J2. Fossil Fuel Industry

Today, I’m taking a deep dive into the ill-fated nickel market.

If you’re a close follower of commodity markets, you probably know the problems afflicting this sector. Surging output from Indonesia’s nickel laterite mines has flooded the market with new supply.

And if you’ve been listening to the commentary on nickel’s woes, you’ll probably consider this an un-investible sector. Supply gluts are set to last year’s numbers, according to some analysts.

In response, Australia’s nickel mines are shutting up shop. It’s the same across Europe and Canada. Andrew Forrest’s Wyloo Metals closed the door on its nickel acquisition in Kambalda, Western Australia. A project formerly owned by Mincor Resources.

Meanwhile, BHP’s (NYSE: BHP; LSE: BHP; ASX: BHP) Nickel West operations have been put on notice.

The global response to oversupply has been predictable and unanimous. Operations are shifting into care and maintenance. Over time, that will take supply off the table.

While it will take time, Indonesia’s dominance could create structural problems for the global nickel market. Concentrating supply into a single region will make the sector less responsive to rising demand.

It also exposes the nickel market to sudden production cuts. As mines close abroad, the country has free rein to reduce supply and influence prices. Indonesia is truly becoming the OPEC of nickel!

But there’s more than meets the eye regarding this important industrial metal. So, let’s tap into the nitty gritty before unpacking possible opportunities.

Nickel deposits come in two forms: hard rock sulphide deposits, which consist of nickel-bearing minerals known as pentlandite and nickel laterite deposits.

Sulphide deposits are scattered worldwide, from northern Europe, South Africa, Canada and Western Australia.

We then have the laterites, which typically form in high-rainfall equatorial regions. As rain dissolves and removes minerals and elements from the soil it leaves behind immobile elements like nickel, iron and aluminium. That leads to a natural concentration of nickel in these regions.

There are outliers. Shifts in the global climate over geological history have enabled places like arid inland Australia to form laterite deposits. This region was once bathed in tropical rainfall and lush jungle.

But of the two sources of nickel, sulphides are far easier to process and refine into high-purity products, the ideal choice when it comes to EV battery material. For this reason, sulphide miners have retained a competitive edge.

However, that started to shift in 2018 when the world’s largest nickel producer, China’s Tsingshan Holding Group, announced a $700-million plan to produce battery-grade nickel from nickel laterites. Processing laterite ore into high-purity nickel uses a system known as High-Pressure Acid Leaching (HPAL). The innovation unlocked a swathe of new supply and Indonesia’s nickel output exploded after integrating HPAL technology in 2018.

In early March, the Macquarie Group’s nickel expert, Jim Lennon, claimed supply gluts could be overblown.

That assessment was based on a recent visit to China where Lennon claimed the demand for stainless steel and other nickel alloys is far higher than the official numbers report. According to Lennon, nickel inventories are also far lower than the stated figures. In other words, he believes the consensus forecast of a nickel oversupply is wrong.

It’s an interesting perspective. Chinese officials are known for under- or over-reporting figures to suit political motives.

But are Lennon’s observations, alone, enough for investors to move into this beleaguered market? Perhaps.

Resource stocks coming off a low base can result in large ‘recovery gains’ as sentiment creeps back into the market. It’s also worth noting that U.S. officials recently excluded Indonesian nickel from lucrative tax credits as part of its Inflation Reduction Act (IRA). That’s thanks to a tight interlink between Indonesian operators and Chinese investors.

So, where does that leave investors?

Everything is not what it seems in the nickel market and that’s where contrarian opportunities are born. Given that China plays a major role in supply and demand, this suggests there could be a lot more to this story. The data remains cloudy, meaning there could be more surprises in the months ahead.

A prime value opportunity may emerge with several nickel producers and explorers trading at multi-year lows.

I’ll explore that with my Diggers and Drillers readers over the coming months.

James Cooper runs the commodities investment service Diggers and Drillers. You can also follow him on X @JCooperGeo.

Canadian explorer Volta Metals (TSX-V: VLTA) has launched a structural targeting study as part of its ongoing exploration activities at the Falcon West lithium property in northwestern Ontario, Canada. 

The detailed structural study seeks to enhance the understanding and exploration of the promising lithium-bearing system identified in a recently completed discovery drill program.

That study had identified numerous high-priority targets for further examination thanks to the combination of geochemical soil data and a high-resolution drone magnetic survey.

Volta said the discovery drill program confirmed the presence of at least six near-surface spodumene-albite pegmatite-hosted lithium, cesium, and tantalum pegmatites within a 300-meter corridor. The area is still open for further expansion, indicating the possibility of more discoveries, the company said.

“Structural geology is one key to understanding the emplacement and evolution of lithium-bearing pegmatites,” Fred Breaks, the company’s technical advisor, said in the statement. “The structural study is crucial at this project stage and will further generate prospective targets for our exploration program.”

Northwestern Ontario has become a hub for lithium exploration, with many junior players engaging in active staking and land acquisition activities. Unlike companies focused on precious and base metal exploration, lithium junior miners face a more complex operating environment. 

There are no lithium refineries in the province for converting lithium oxide into high-quality battery-grade material known as lithium hydroxide, though  companies such as Rock Tech Lithium (TSX-V: RCK) are trying to fill this gap. 

The clean technology firm inked earlier this month a binding cooperation agreement with BMI Group to build Ontario’s first refinery at the former Norampac paper mill site. 

Volta Metals is in the final stages of preparing its exploration program for 2024, which will involve comprehensive geochemical sampling, mechanized trenching, and, depending on outcomes, diamond drilling.

Precious gemstones miner Gemfields (LON: GEM) warned on Friday that it expects to swing to a loss of $2.8 million in 2023 from a $74.3 million profit the previous year due to a write-down in its platinum group metals investments, lower output and the cancellation of an emerald auction. 

The London-based company, which has a 6.54% stake in South African platinum group miner Sedibelo Resources, said that plummeting prices for platinum group metals (PGMs) has affected its bottom line.

Since the beginning of 2023, prices for palladium and rhodium, used mainly in the catalytic converters that clean exhaust fumes in vehicles, have dropped by 44% and 63% respectively. This collapse is attributed to inventory reductions and a sluggish global economy. 

While the decrease in platinum has been less significant, the overall decline in PGMs has had a severe impact on producers’ profits.

Gemfields said it had reduced the value of its Sedibelo investment, which will result in a write-down ranging between $4 million and $28 million. This would translate in a loss of $0.8 US cents per share for 2023, a significant change from 4.8 US cents in earnings per share of achieved in 2022. 

Headline loss per share, which includes Sedibelo Resources’ fair value loss, is likely to be 0.9 cents compared with the prior year’s headline earnings per share of 4.8 US cents.

When it comes to its core business, Gemfields saw revenue from its 75%-owned Kagem emerald mine in Zambia drop 40% to $89.9 million in 2023, from $148.6 million the previous year. Top-line revenue at its Montepuez ruby mine in Mozambique decreased by 9.2% to $151.4 million from $166.7 million in 2022.

“Production of premium rough gemstones has been weaker at both Kagem and Montepuez Rompared to 2022, and resulted in November 2023’s planned higher quality emerald auction being withdrawn from our schedule,” chief executive Sean Gilbertson said.

“We look forward to completing our first auction of the year later on today, with a commercial-quality emerald auction taking place in Jaipur, and our next higher-quality emerald and mixed-quality ruby auctions to take place in Q2,” Gilbertson added.

Gemfields’ luxury brand Fabergé also disappointed, recording revenue of $15.7 million, which is 11% lower than the $17.6 million it had in 2022, mainly due to softer demand for precious stones.

As low nickel prices force Australian miners to scale back output, some have called for an ESG premium on low-carbon production that would help Western producers compete with cheaper, but more polluting Indonesian metal.

But are customers willing to pay more for low-carbon nickel? Some analysts say yes — under certain conditions.

“If the market sees a benefit in paying a premium for certain supplies then it will,” Jim Lennon, managing director of commodities at Macquarie Group, told The Northern Miner in an interview. “A buyer would be willing to pay a premium if they can see an economic benefit in using that product, such as receiving a government subsidy or securing a sale of a ‘greener’ electric vehicle.”

The price of nickel has been on a downtrend since late 2022 when it was $33,575 per tonne ($15.23 per pound). The price on Tuesday was $17,678 per tonne ($8.02 per lb.) and in February dipped as low as $15,850 per tonne ($7.19 per pound).

The price doldrums have prompted Wyloo Metals and BHP (ASX: BHP) to suspend operations in Australia, with BHP announcing it would take a $2.5 billion impairment on its assets.

Given the devastation to its nickel sector, Australia has been the most vocal in creating new variable price brackets for low-carbon emissions nickel.

The idea for premium ESG pricing isn’t new. In fact, some experts argue that there’s already a premium.

Canada Nickel (TSX: CNC) CEO Mark Selby says people might be surprised to learn that price premia have already been paid for various North American products perceived as cleaner on Asian markets.

Selby notes that domestic premiums for certain materials have been sustained over several years, which might not be directly attributable to lower carbon footprints or ESG factors alone but could be influenced by a combination of factors, including local supply.

But this type of premium isn’t helping Australian nickel miners. And deliberately imposing an ESG premium would be a different story.

“The main challenge is defining what ‘ESG-compliant’ actually means,” Macquarie’s Lennon said.

It’s an obstacle that the London Metal Exchange (LME) is facing as it investigates and prepares for the potential emergence of premium pricing for low-carbon products on separate trading contracts.

Georgina Hallett, LME’s chief sustainability officer, says that there’s increasing interest from producers, consumers, and investors in establishing a price premium for metals produced with lower carbon footprints. However, defining what constitutes ‘low carbon’ or ‘green’ metals isn’t easy due to the lack of a standardized, universally accepted framework for measuring and verifying the environmental impact of metal production processes.

“The aim is to build a robust framework that supports the gradual introduction of sustainability-linked pricing mechanisms while ensuring broad market participation and avoiding undue disruption,” Hallett told The Northern Miner. “By taking a step-by-step approach, the LME hopes to align the interests of various stakeholders and drive meaningful progress toward the integration of sustainability into the global metals market.”

Lennon suggests that establishing a special low-carbon contract for metals on the LME is unnecessary. This is because the prices for different products are already determined by normal market activities, such as supply and demand. Just like prices for different metal shapes and origins adjust based on market conditions, the prices for products with various ESG qualities would naturally adjust in the same way.

“Exchanges don’t need necessarily to get involved since they can focus on ‘objective criteria for delivery (shapes, metal purity, etcetera) and leave the market to decide on ‘subjective’ factors such as value-in-use of different products/shapes and ESG,” Lennon said.

From an exchange perspective, like the LME, there is also a risk of damaging liquidity if they were to introduce multiple contracts. Compared with large commodity derivative markets, nickel is not particularly liquid and dividing this liquidity could reduce the usability of the market for some participants.

Lennon says markets will ultimately determine the outcome. Currently, nickel prices vary significantly between products depending on supply and demand.

Today’s primary nickel products that are LME deliverable include metal rounds, pellets, cut cathode, and full plate cathode. When delivered to LME warehouses, each product is assigned a associated warrant. When buyers want to take delivery from the LME, they are often willing to pay LME brokers a premium for warrants of a particular material shape or origin.

Similarly, other non-LME deliverable products, including intermediates (concentrates, mattes, MHP, MSP, etc.) or finished products (ferronickel, nickel pig iron, nickel sulphates, nickel chlorides, etc.) also sell at varying discounts or premiums to LME base prices. Lennon said these premiums/discounts can shift dramatically due to changes in supply and demand.

For example, nickel pig iron was selling at a premium to the LME price at the start of 2022 and then had fallen to a discount of 40% to the LME by the first half of last year.

“Product type, ESG, and country of origin are all important properties and presumably were factors that led major automakers to agree to term supply contracts with BHP and Vale in recent years. ESG was no doubt a factor in these negotiations,” Lennon said.

Canada Nickel’s Selby emphasized the importance of provenance tracing rather than setting up a formal two-tiered pricing system.

He points out that imposing a pricing mechanism before the market is ready can lead to inefficiencies, such as a benchmark that does not accurately reflect market conditions. He suggests letting the market sort it out.

“We will continue to observe the distinction between Western-supplied, clean, green nickel and the high-carbon, less ESG-compliant nickel from China and Indonesia,” he said. “As for the necessity of a formal pricing mechanism, it’s typically better if such mechanisms emerge naturally in the marketplace before establishing a formal platform for trading them.”

An increase in supply from Indonesia has cratered nickel prices, as the southeast Asian nation boosted production of refined and semi-refined nickel, mainly on the back of an export ban on raw ore, which led to massive investment from China in new processing plants, according to Lennon.

Indonesia has become the dominant nickel producer, accounting for 55% of global supply, up from 7% in 2015, according to Bank of America data. But it relies on coal-fired power.

Higher-cost Australian supply can’t compete. Australia’s federal resources minister Madeline King responded to the raft of nickel suspensions by adding nickel to the country’s critical minerals list, enabling industry access to part of the A$4 billion ($2.6 billion) federal funding earmarked for critical energy transition minerals exploration and development.

“Prices paid for Australian minerals need to recognize the high ESG standards the Australian industry adheres to and the fact that Australian workers enjoy good working conditions and the highest safety standards.”

At PDAC, she noted that Canada and Australia have agreed to jointly advocate for robust ESG credentials to be built into global, transparent and traceable critical minerals supply chains.

The LME has been considering introducing a premium for green or sustainable metals since it released a 2020 white paper on the topic, Hallett noted.

In 2021, the LME collaborated with Metalshub, a digital metals procurement platform which facilitates buyers’ access to the physical metal that meets specific attributes including carbon intensity and other ESG criteria. The LME said that low-carbon nickel, classified as producing 20 tonnes of carbon dioxide or less per tonne of nickel, could already be traded on Metalshub’s system.

The platform aims to allow market participants to specify and search for metals that meet specific sustainability standards, thereby fostering the emergence of a market-driven definition of ‘green’ metals.

Hallett says the critical missing component to formalizing a new price bracket is doing the less sexy but foundational work around how one measures emissions the same way across the industry. The point is to create an equal playing field for products in the value chain included in that new contract.

The LME has initiated several measures to promote sustainability within the metals market. One of the key initiatives is the development of metal-specific measurement methodologies, in collaboration with metal industry associations, to standardize measuring carbon emissions across different metals.

However, the LME’s taking a deliberate approach to implementing a low-carbon pricing mechanism for nickel and other metals, given the still-evolving market for low-carbon metals.

“Our approach remains one of cautious optimism and pragmatic progression,” Hallett says. “We are committed to leading the industry towards a more sustainable future, understanding that real change is achieved not by rushing but by thoughtful, collective action.”

Natural gas forward prices pushed modestly higher at the front of the curve during the March 14-20 trading period, particularly in the Northeast and Appalachia, data from NGI’s Forward Look show.

Meanwhile, spring contracts at hubs near the congested Permian Basin struggled under the weight of weak near-term fundamentals.

Fixed prices for April delivery at benchmark Henry Hub added 4.1 cents week/week to exit the period at $1.704/MMBtu. Modest front month fixed price gains were the norm for most of the Lower 48.

With the market awash in supply exiting an exceptionally mild winter, and amid reports of downstream pipeline constraints, associated gas from the oily Permian has struggled to find takers recently. Regional spot prices illustrate the lack of demand for Permian gas.

Waha, for instance, posted a negative daily spot price average throughout the March 14-20 trading period, according to NGI’s Daily Gas Price Index. NGI recorded spot trades as low as minus-$2.350 at the hub during the period.

Forward contracts felt the gravity of the negative spot market trades, and April fixed prices fell to near zero during the period, Forward Look data show.

Waha prices for April delivery tumbled to just 8.0 cents, a 27.2-cent discount week/week. El Paso Permian front month fixed prices dropped 24.9 cents to exit the period at 12.5 cents.

The South Central saw a net 21 Bcf injection into storage for the week ended March 15, leaving regional stockpiles at a 41.7% surplus to five-year average levels, according to U.S. Energy Information Administration (EIA) data.

Permian producers have seen a number of pipeline projects come online in the past few years to provide incremental takeaway capacity for their associated gas volumes, RBN Energy LLC’s Housley Carr said in a recent blog post.

However, “continued crude oil production growth through the early 2020s has once again put gas production and egress capacity on a knife’s edge,” Carr said. 

Recent expansions for the Permian Highway Pipeline and the Whistler Pipeline have “provided a little breathing room,” while the 2.5 Bcf/d Matterhorn Express Pipeline should “give a lot more when it comes online in the second half of this year,” according to Carr.

Front month Nymex futures experienced ups and downs during the March 14-20 trading period as the market contemplated some moderate late season cooling that still paled in comparison to lost demand from an exceptionally mild winter overall.

The market has found itself dealing with excess storage following “blowtorch February and March weather conditions,” EBW Analytics Group analyst Eli Rubin noted. 

In the coming weeks, the surplus versus the five-year average “may finally begin to peak and retreat to allow bulls to at least gain traction,” Rubin said. “Still, we caution that the pathway toward a more manageable storage surplus may be long and slow, with a prolonged period of weakness favored at the front of the Nymex forward curve to sustain power sector coal-to-gas switching and keep excess natural gas supply off the market.”

Recent Nymex futures pricing reflects “inventory congestion risks,” but “numerous basis markets have been on the mend of late,” analysts at Mobius Risk Group observed in a recent note.

Forward Look data bear out this trend of regional basis strengthening, particularly for Appalachian hubs.

Basis pricing at Eastern Gas South has rallied around 40-60 cents for April 2024 through October 2024 since the start of winter. October 2024 pricing has swung 63.3 cents higher winter-to-date, from minus-$1.659 to minus-$1.026.

Broadly, this parallels regional production trends. According to Bloomberg data, Appalachian dry gas production peaked above 36 Bcf/d in late 2023. Volumes had fallen off to around 33.2 Bcf/d as of recent estimates Thursday.

This comes as numerous regional operators have signaled plans to curtail output this year in response to weak prices.

Meanwhile, unlike other markets, Western Lower 48 hubs have seen premiums that were “largely in place following last year’s inverse inventory dynamic” fade over the course of the winter, the Mobius analysts noted. They pointed in particular to pricing at the Southern California border.

According to Forward Look data, SoCal Border Avg. basis for April was trading at a 40.8-cent premium to Henry Hub at the start of November. April basis there has since flipped to a 3.4-cent discount versus the national benchmark.

As of the week ended March 15, Pacific region storage totaled 216 Bcf, 50% higher than the five-year average and 200% above year-earlier levels. Around this time a year ago, Pacific region storage sat at 72 Bcf, a steep deficit to the 163 Bcf 2018-2022 average, EIA data show.

“In addition to elevated inventory levels in the West…there is also the potential for stronger hydro electric generation this spring versus what was anticipated just a few months ago,” the Mobius analysts said.

The post Permian Natural Gas Forward Prices Plummet; Other Markets Seeing Basis Improvement appeared first on Natural Gas Intelligence

To cater for the rapidly increasing demand for battery-grade lithium required for the energy transition, Metso has reviewed its lithium hydroxide technology and service offering. As part of this comprehensive review, Metso’s proprietary, sulphate-free alkaline pressure leach process has been validated as a Planet Positive technology for the production of battery-grade lithium.

Metso’s hydrometallurgical alkaline leach process is a simple and safe way to refine spodumene concentrate to battery-grade end products like lithium hydroxide monohydrate and lithium carbonate. The innovative refining process produces high-purity lithium salts and hydrates, which are needed for the cathodes of lithium-ion batteries used in electric vehicles.

In the process, lithium is extracted with high yield. Inert and neutral mineral residue is minimized and ready to be reused or disposed of, thus minimizing pollution to air, water, and soil. No additional impurity removal or precipitation stages are needed.

In recent studies, the alkaline leach process has also shown reduced environmental impact compared to other technologies. Based on the life cycle impact assessment (LCIA), the process can provide up to 40% to 60%reduction in water consumption, as well reduction in the acidification and eutrophication impact. The compact process also minimizes plant footprint and embedded carbon.

Metso has been developing sustainable alkaline leaching technologies for hard rock lithium sources for 20 years. Today the offering includes comprehensive proprietary technologies for refining lithium from spodumene mineral concentrates. Intensive R&D and piloting is also ongoing in the processing of other lithium-bearing pegmatite hard rocks such as petalite, zinnwaldite, and lepidolite. Metso has proven processes also for the extraction of lithium from brines.

Metso has been developing lithium processing technologies for over 20 years. The processes address all aspects of production from mine to battery materials, and recycling of black mass plus world-class service support.

“As a strong and reliable partner for the development of lithium hydroxide and other battery minerals projects, Metso can deliver the whole production process – from mine to battery materials, and recycling of black mass – complemented with world-class service support,” says Marika Tiihonen, technology manager for lithium at Metso.

US Critical Materials said on Thursday it has discovered a “strategically significant” deposit of high-grade gallium on its 6,700 acres of claims at its flagship Sheep Creek property in southwest Montana.

The US is 100% dependent on imported gallium, which is critical for national defense, primarily from China. Gallium is used for semiconductors, 5G technology, smartphones, satellite systems, critical photonics technologies and military radar systems. The 2022 list of critical minerals identifies gallium as a US supply risk.

The Pentagon has already announced plans to issue a first-time contract to US or Canadian companies to recover gallium after China curbed exports last year.

In December 2023, US Critical Materials signed an agreement with Idaho National Laboratories to develop new rare earth processing methods, including gallium separation.

Last year, the Sheep Creek property reported grades that exceeded any other domestic rare earth resource. As part of the United States Geological Survey (USGS) Earth Mapping Resource Initiative, the USGS, in cooperation with the Montana Bureau of Mines, announced last April it is conducting an aeromagnetic and aero-radiometric survey at Sheep Creek.

The company said it believes the technologies developed under this cooperative research and development agreement could potentially provide environmentally responsible mining and processing  to mitigate environmental concerns.

US Critical Materials president James Hedrick is a 29-year former USGS and Bureau of Mines rare earth commodity specialist.

“Not only is our gallium high grade, but we are also confident that we will be able to create a separation process that will be environmentally respectful. US Critical Materials’ prime gallium claims average over 300 ppm and go as high as 1,370 ppm,” Hendrick said in a statement, adding that gallium can be separated profitably at 50 ppm.

“US Critical Materials looks forward to being the primary gallium producer in the United States,” he said.

Signal Gold (TSX: SGNL) said on Thursday it has begun evaluating potential strategic alternatives to advance its flagship Goldboro project in Nova Scotia. BMO Capital Markets will act as the company’s financial advisor in the process.

Goldboro is an advanced-stage gold project located in Guysborough county. To date, Signal has progressed the project through several permitting milestones, with the most recent being the environmental assessment approval in August 2022.

Applications for the key remaining permits have all been submitted, and the company said it remains committed to working to obtain these permits within the next 12 months.

At the same time, Signal’s exploration team continued to grow the mineral resource at Goldboro. It now has measured and indicated resources of 1.42 million oz. (15.7 million tonnes at 2.82 g/t gold) for the open pit, and 1.16 million oz. (5.9 million tonnes at 6.09 g/t gold) underground.

A 2021 feasibility study on the project demonstrated an approximate 11-year life of mine with average gold production of 100,000 oz. per annum and an average diluted gold grade of 2.26 g/t.

Its after-tax net present value, discounted at 5%, is pegged at C$328 million, with an internal rate of return of 25.5% and projected payback of 2.9 years. The initial capital cost is estimated C$271 million, and the life-of-mine sustaining capital is C$63.1 million.

Still, this “robust, high-grade project with significant leverage in an increasing gold price environment” is being substantially discounted, Signal said in its media release, adding the company is “focused on being capital efficient, with an emphasis on minimizing shareholder dilution and maximizing value.”

“Signal Gold recognizes that a larger, better capitalized, or cash flow generating company could be better positioned to advance or assist in the advancement of Goldboro over the development timeline,” it said.

Shares of Signal Gold shot up 11.7% to C$0.095 by 10:40 a.m. in Toronto. Over the past 52 weeks it traded within a range of C$0.08-C$0.35 The gold junior has a market capitalization of C$23.9 million ($17.7m).

Gold finally surpassed $2,200 an ounce for the first time on Thursday after the US Federal Reserve indicated that it would press ahead with three rate cuts in 2024 despite elevated inflation.

Spot gold set a new record of $2,222.39 during the early hours of trading, before retreating to $2,206.10 by 9:05 a.m. EDT for a 1.0% gain. US gold futures soared 2.4% to $2,208.20.

[Click here for an interactive chart of gold prices]

Gold’s latest rally, which started mid-February, is underpinned by longstanding tailwinds including heightened geopolitical risks and increased central bank buying. This month alone, the safe-haven metal hit new highs on five occasions.

Its rapid ascent, according to Bloomberg columnists, has surprised many seasoned market observers, as there hasn’t been a clear catalyst. What has been partially driving bullion are expectations for looser monetary policy in the US, and that has now been reaffirmed by the Fed.

On Wednesday, Fed chair Jerome Powell continued to highlight officials would like to see more evidence that prices are coming down, but “it’s still likely in most people’s view that we will achieve that confidence and there will be rate cuts,” he said.

“What we saw last night was the green light really for gold traders to come back in,” said Chris Weston, head of research for Pepperstone Group.

“The Fed have said that right now they’re tolerant of the inflation that we’ve seen, they’re tolerant that the labor market strength is not going to be the impediment,” Weston told Bloomberg.

Speculation around the timing of the Fed’s long-anticipated pivot may have provided the trigger for recent gains, with data showing that traders boosted their net long positions on gold in the week through March 5 by the most since 2019.

The metal stands to benefit even more when US interest rates actually do come down, as bullion-backed exchange traded funds look likely to increase their holdings, according to UBS Group.

On the geopolitical front, there are a number of risks boosting gold’s allure as a haven asset: Russia appears to be gaining the upper hand in its war in Ukraine, the Israel-Hamas conflict continues unabated and has led to a re-routing of global shipping, while the US presidential election at later this year could prove massively consequential for markets.

Chinese buying has also underpinned prices. As well as the central bank, people have been stocking up on coins, gold bars and jewelry to safeguard their wealth from a years long property downturn and losses in the country’s stock market.

(With files from Bloomberg)

Austrian researchers have found a way to selectively capture metals from a waste stream using spent brewer’s yeast, the same beer byproduct that goes into the food spread Marmite.

In a paper published in the journal Frontiers in Bioengineering and Biotechnology, the scientists explain that electronic waste is notoriously difficult to recycle because it’s hard to separate the different metals in the waste from each other.

“Getting the metals in solution is a first step, but the selective recovery of the metals remains a challenge. Compared to processes such as chemical precipitation, biosorption using spent brewer’s yeast presents a cheap and environmentally friendly approach,” Klemens Kremser of the University of Natural Resources and Life Sciences, Vienna, and corresponding author of the article, said in a media statement.

Several options already exist for separating the different component metals of electronic waste, including other biosorbents—biological materials that can be used to soak up pollution. However, they all have significant downsides. For instance, chemical precipitation produces contaminated slag, while biochar—a biosorbent that is similar to charcoal—is difficult to separate from wastewater.

So the scientists turned to brewer’s yeast.

They acquired 20 litres of spent brewer’s yeast, separated the biomass from leftover brewing residues, and dried out the biomass. Electrostatic interactions on the surface of the yeast allow metal ions to stick to that surface—a process called adsorption. Changing the pH of this solution alters the interactions, which can allow the yeast to adsorb more or different metal ions, depending on the contents of the solution and the specific pH.

The researchers then chose to test the yeast biomass against zinc, aluminum, copper, and nickel, economically important metals. They tested each metal solution at different pHs and temperatures, to gauge whether it was possible to increase the strength of the interactions and recover more metal. They also tested the yeast against a real polymetallic waste stream.

“Using waste biomass for metal recovery is not a completely new process, but the selectivity of biosorption processes is a key factor for efficient metal recovery from polymetallic waste streams,” Anna Sieber, Ph.D. fellow of K1-MET, an Austrian metallurgical research center, and first author of the article, said.

“We demonstrated high metal recovery rates from a complex metal solution using an environmentally friendly and cheap biomass. Yeast biomass is considered a safe organism, and the demonstrated reusability of the biomass makes it an economically feasible approach.”

The group was able to recover more than 50% of aluminum, more than 40% of copper, and more than 70% of zinc from the test metal solutions. Over 50% of copper and over 90% of zinc were retrieved from the polymetallic waste stream they tested the yeast on.

Changing the temperature had little impact on efficiency, except for zinc, where it raised the recovery rate by 7.6%. Similarly, adjusting the pH had a limited effect on most of the metal solutions, except for aluminum, where it improved the recovery efficiency by 16%.

“The metals can be removed from the yeast surface by acid treatment and thus could be recycled,” Sieber said. “It would be interesting to investigate potential applications for these reclaimed metals.”

The yeast itself could also be recycled without heavily impacting its ability to recover metal: the scientists were able to use it five times to recover different metals.

The team, however, cautions that the new process needs testing with much larger studies in real-life conditions before it can be implemented on an industrial scale.

“The metal removal process in this study was optimized for the four metals in question,” Kremser said. “The concentration of potentially interfering metal ions was very low in our starting solutions, but this would be important to consider when applying this approach to different mixed metal solutions.”

Australia’s Lucapa Diamond (ASX: LOM) has recovered a 203-carat diamond at its prolific Lulo mine in Angola, the fifth-largest ever found at the operation.

The diamond is also the third 100-carat-plus stone found at Lulo this year.

Lucapa said the high-quality, type IIa diamond was recovered during the processing of run-of-mine stockpiled ore and its recovery follows those of a 162 and a 116 carat diamonds on successive days last month.

The mine, which hosts the world’s highest dollar-per-carat alluvial diamonds, began commercial production in January 2015. Only a year later, it delivered the largest ever diamond recovered in Angola — a 404-carat white stone later named the “4th February Stone”.

Lucapa has a 40% stake in the Lulo mine. The rest is held by Angola’s national diamond company (Endiama) and Rosas & Petalas, a private entity.

Angola is the world’s fifth diamond producer by value and sixth by volume. Its industry, which began a century ago under Portuguese colonial rule, is successfully being liberalized.

Egypt-focused Centamin (LON: CEY) (TSX: CEE) reported on Thursday a 25% increase in profit in 2023 thanks to higher gold sales at soaring prices for the precious metal.

The miner’s profit last year rose 14% to $195.1 million from $171 million in 2022, with revenue climbing 13% to $891.3 million from $788.4 million. 

Gold sales from Sukari in Egypt, the company’s only producing mine, totalled 456,625 ounces, up 4% from 438,638 in 2022. This as Centamin saw realized prices for the precious metal increase 8.6% to $1,948 per ounce from a previous $1,794 per ounce.

Bullion prices climbed 15% in 2023, ending at $2,078.4 an ounce, a record high year-end figure, according to data from the World Gold Council. The average 2023 price of $1,940.54 an ounce was 8% higher than the 2022 average, marking the metals’ best year since 2020.

“2023 was the third consecutive year that we have safely delivered on our production guidance, reflecting the operational improvements and flexibility from our three-year reinvestment plan,” chief executive Martin Horgan said.

The company cut its payout to shareholders to 2 US cents, down from 2.5 US cents it handed in 2022. This made a total payout of 4 cents, down 20% from 5 cents the previous year.

The executive said Centamin had “re-positioned” Sukari to achieve a consistent annual production of 500,000 ounces. He also anticipated a reduction in operational expenses following the establishment of solar power generation capabilities.

The company invested less than expected last year, with a $204 million total capital expenditure bill, below guidance of $272 million. It attributed the drop to cost savings, lower costs capitalization and changes to equipment rebuild schedules.

Centamin highlighted a grid connection project that it kicked off last year, thanks to recent upgrades to Egypt’s power distribution infrastructure. The completion of this project, which would be supplemented with the existing onsite solar power generation, is expected to cut $41 million a year just in diesel costs.

The plan would also help Centamin achieve its near-term decarbonization goals. It is targeting a reduction of 30% of its Scope 1 and 2 emissions, those hose incurred through mining operations and power consumption, respectively, by 2030.

The miner left its 2024 gold production guidance range of 470,000 to 500,000 ounces per annum unchanged.

The British Columbia government has invested C$850,000 ($630,000) from the province’s Innovative Clean Energy (ICE) Fund in cleantech startup pH7 Technologies.

The funds will be used to support a pilot project to process 5,000 kg per day of raw materials into approximately 2,500 kg of extracted platinum group metals per year.

Founded in 2020, pH7 is headquartered in Vancouver and was recently listed on the Cleantech Group’s 2024 Global Cleantech 100. The new process enables efficient metal extraction from low-grade resources or difficult substrates in a cost-effective way, it said.

The company has created a proprietary closed-loop process using advanced chemistry to extract and refine critical metals that will help the mining sector transition to renewable energy in an environmentally and economically sustainable way, the ministry of Energy, Mines and Low Carbon Innovation said in a news release.

Metal alloys including platinum group metals, copper and tin produced by pH7 are then refined by industrial customers. This method results in significantly less greenhouse gas emissions, electricity and water usage compared to mining or other recycling methods.

“BC is home to a growing clean-energy sector, accounting for 20% of Canada’s world-leading cleantech firms that are having positive impacts globally,” Josie Osborne, Minister of Energy, Mines and Low Carbon Innovation, said.

“With near net-zero environmental impact in the extraction of critical metals and minerals, pH7 is demonstrating the kind of innovative thinking that can transform mining around the world.”

Since 2008, the ICE Fund has committed approximately C$112 million ($83m) to support pre-commercial clean-energy technology projects, clean-energy vehicles, research and development, and energy-efficiency programs.

“The clean, green future we envision requires more critical metals than we have access to currently,” said Mohammad Doostmohammadi, founder and CEO of pH7 Technologies.

“Through innovation and collaboration, we look forward to bringing our cleantech solution to help scale the extraction of metals and make existing processes much more sustainable and cost-effective.”

Sibanye-Stillwater (JSE: SSW NYSE: SBSW) announced Wednesday that it has appointed Greg Cochran as executive vice president head of uranium, effective June 1 2024.

Cochran will be responsible for developing and driving strategies to realise and optimise the value of the Group’s substantial uranium resources, as well as for leveraging his track record of value creation in the uranium industry to capitalise on other opportunities that may arise, the company said.

Cochran is a respected international mining executive with over 30 years of experience in a diverse range of commodities and in various leadership positions globally and in uranium.

His uranium industry experience spans over 15 years, beginning in 2006 when he joined Uranium One’s South Australian team. He guided the Honeymoon mine through its environmental approvals and oversaw the establishment of the Mitsui, Uranium One Australia JV.

Cochran also led the due diligence team on Uranium One’s C$3.8 billion acquisition of UrAsia Ltd. in 2007, which was the largest uranium transaction in history, and was responsible for the integration and management of the Kazakh joint venture interests.

Cochran has also led other uranium companies including Namibia-focused uranium developer Deep Yellow Ltd. and most recently, as the managing director and CEO of Aurora Energy Metals, which has an advanced uranium project in the US.

Prior to Aurora, he was the CEO Reward Minerals, an aspiring sulphate of potash development company.

Calibre Mining (TSX: CXB) has embarked on raising C$100 million ($74m) for projects in Canada, the United States, and Nicaragua. A syndicate of underwriters led by BMO Capital Markets has agreed on a bought deal basis to purchase 59.6 million shares of Calibre at a price of C$1.68 per share.

The underwriters have the option to buy up to an additional 15% in overallotments.

Calibre says the proceeds will be used towards continued development of the Valentine gold project in Newfoundland; the El Limon and La Libertad gold mines in Nicaragua, and the Pan gold mine in Nevada. Provision has also been made for more exploration and for general corporate and working capital purposes.

Chief among Calibre’s projects is the wholly owned Valentine open pit gold development in central Newfoundland. This will be the largest gold mine, producing 195,000 oz. per year for the first 12 years, in Atlantic Canada. Production is planned for the first quarter of 2025.

The Valentine project has estimated proven and probable reserves of 2.7 million oz. of gold in 512.6 million tonnes grading 1.62 g/t gold. Total measured and indicated resources (inclusive of reserves) contain 3.4 million oz. in 64.6 million tonnes grading 1.90 g/t gold. Additional Inferred resources are 1.1 million oz. in 20.8 million tonnes grading 1.65 g/t gold.

In Nicaragua, the El Limon mine has produced more than 3.5 million oz. of gold and the La Libertad and the La Libertad mine has produced about 1.9 million oz. The two mines have a probable reserve containing 6.8 million oz. of gold. Both are 100%-owned by Calibre.

The Pan gold mine in Nevada, also 100%-owned, is an open pit and heap leach operation. The smallest of Calibre’s mines, producing about 45,400 oz. of gold in 2022, Pan has tremendous exploration potential with targets both to the north and south of the operation.

Barrick Gold (TSX: ABX; NYSE: GOLD) announced on Wednesday that it is prepared to explore new gold and copper deposits in the Democratic Republic of Congo in partnership with the government.

The world’s No. 2 gold miner wants to continue exploring the region, it said, after its success at the Kibali gold mine in northeastern DRC. The mine yielded 343,000 ounces of gold in 2023, representing nearly 8.5% of the company’s output for the year.

“Kibali has transformed what was previously the disadvantaged northeast region of the country into a new economic frontier and a flourishing commercial hub,” Barrick CEO Mark Bristow said in a news release.

“Of our $5 billion investment in the DRC, more than half has been spent with local contractors and suppliers,” Bristow said.

Last year, Barrick announced it intended to search for additional copper deposits in Zambia and the DRC as part of its efforts to expand its presence in the African copper belt.

CleanTech Lithium (AIM: CTL) announced on Wednesday that its direct lithium extraction (DLE) pilot plant in Copiapó, northern Chile, has commenced operations. The plant has a design capacity of one tonne per month of lithium carbonate equivalent as concentrated eluate.

The first production of eluate was completed in the past week, and it will begin to be shipped in batches to North America, the UK-based lithium developer said. Brine from the company’s Laguna Verde project, located approximately 250 km from the pilot plant, was processed through DLE columns.

“This pilot plant aims to produce significant quantities of battery-grade product for evaluation by potential strategic partners, making CTL one of the few companies in the sector to produce pilot-scale volumes of battery-grade product,” CleanTech CEO Aldo Boitano said in a news release.

“The pilot plant positions CTL as a leader in the sector and in Chile, with the first eluate production representing a significant milestone for the company,” he said.

Read More: CleanTech kicks off exploration at two new Chilean assets

Perseus Mining (ASX: PRU, TSX: PRU) announced on Wednesday that it has raised its off-market takeover offer for OreCorp (ASX: ORR) as it seeks to beat out Canadian rival Silvercorp Metals (TSX: SVM; NYSE: SVM) in acquiring the Africa-focused gold explorer.

The new per-share offer price of A$0.575 represents a 4.5% increase over its previous bid of A$0.55, which was turned down by OreCorp earlier in the year. However, the Perth, Australia-based gold miner has maintained its confidence in completing a deal, and earlier this month, it extended its previous offer to April 19.

Perseus currently holds 22.01% of OreCorp’s share capital, having increased its stake by another 2.11% immediately prior to the new offer. It is now the largest shareholder of OreCorp, just ahead of Silvercorp (21.11%).

In a news release confirming Perseus’ latest offer, OreCorp said it has notified Silvercorp of what is determined to be a “superior proposal” in accordance with the matching rights process set out in the bid implementation deed signed between the companies in December 2023.

Silvercorp, which initiated its takeover proposal in August 2023, now has a five business days to make a better offer.

Should Silvercorp fail to provide such an offer within the five-day period, the OreCorp board intends on recommending that shareholders accept the amended proposal in the absence of a superior proposal, the Australian gold developer said.

OreCorp also said it had received statements of intent from major shareholders, who in aggregate hold approximately 15.6% of its shares, indicating that they intended to accept the new proposal from Perseus.

At the heart of this takeover battle is the Nyanzaga project in Tanzania, located near Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu mine and AngloGold Ashanti’s (JSE: ANG) (NYSE:AU) Geita mine.

A 2022 definitive feasibility study gave the project an after-tax net present value of $618 million at a 5% discount rate and an internal rate of return of 25%.

Geographically, Perseus is the closer suitor with three operating mines in West Africa producing gold at a rate of more than 535,000 ounces per year.

Silvercorp has two producing mines in China but has been looking to diversify its portfolio.

The EPA last year announced aerial surveillance of “super-emitters.”

 The proposed offshore terminal is one of four projects intended to expand oil export capacity.