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Why mining is essential to the energy transition and global prosperity

Wed, 01/04/2023 - 06:45

Imagine a world without mining. Many people do.

They see mining as environmentally harmful, dangerous to health and wellbeing, and ultimately obsolete as green energy advances.

So the extractive industry has its work cut out to challenge perceptions about a field that it counters is increasingly sustainable and safe.

One that’s absolutely vital to global prosperity, the energy transition and 1.5º C climate goals, as well as growth for emerging economies.

In short, what could be the world’s best-kept secret must be told: one of the Earth’s oldest industries is also one of the most forward-looking, and most essential to the future.

As mining is continually reinvented and reimagined, lands of opportunity – the Middle East, North and East Africa, and Central Asia – have huge potential to complement global mining’s transformation, and underline the sector’s importance to economic, social and environmental aims.

Mining’s unexpected ally

A key – and unexpected – ally in this quest? Saudi Arabia.

For context, PIF, the nation’s sovereign wealth fund, is driving the economic diversification aims of Vision 2030, the nation’s reform blueprint. While Saudi Arabia is known for hydrocarbons, mining is emerging as an economic pillar, alongside oil/gas and petrochemicals.

Mining could triple its contribution to Saudi GDP from $17 billion to $64 billion by the end of this decade.

Accordingly, Metals and Mining is one of PIF’s 13 target sectors, with its portfolio company, Ma’aden or the Saudi Arabian Mining Company, pioneering the Saudi mining industry.

Now the region’s largest multi-commodity mining and metals company, among the world’s top five best-performing mining companies based on financial results and the top 15 in market capitalization, Ma’aden is focused on some 40 initiatives to enhance value chain resilience; environmental, social and governance (ESG) systems to balance growth with resource stewardship, plus achieve carbon neutrality by 2050; and legal framework transparency for investors.

Adding to the company’s global-player position: the strategically significant Arabian-Nubian Shield, a Precambrian geologic formation spanning nine countries and endowed with world-class, strategic resources.

Hailed as a new exploration frontier, the Shield includes Saudi Arabia’s portion, which alone represents $1.3 trillion in untapped mining potential across more than 48 minerals.

Ma’aden’s fully integrated mining chain includes phosphate, a primary nutrient for photosynthesis and crop growth for a stable global food supply; gold, with a planned million ounces annually to aid socio-economic development; and copper, at the epicenter of electrification as a main component in EVs, batteries and charging stations.

A fast-changing industry

The critical nature of these materials means that mining has been one of the most agile sectors to navigate the covid pandemic, despite extreme volatility and challenging conditions.

This industry continues to become safer, with loss-prevention standards and innovations that protect workers. Autonomous vehicles, robotics, drones and Internet of Things data transmission are limiting or eliminating human activity underground through automation.

Ma’aden is using smart helmets that monitor construction project workers in real time; and harvesting years of data to build predictive models through artificial intelligence and machine learning for optimized operations and cost savings.

Innovation is also transforming mine productivity, with digitization gathering Big Data to guide decision-making, while AI and machine learning set more accurate resource targets and improve efficiency.

Mining is also focusing on processes that mitigate environmental impact.

A recent memorandum of understanding between Ma’aden and top universities and research institutions aims to study new technologies, particularly those that make mining more sustainable.

Using less energy and water will play a huge part in future mining. By 2050, over 90 percent of the water used in Ma’aden’s operations will be recycled to protect Saudi Arabia’s natural underground aquifers.

Rising mineral and metal intensity

But these strides are only part of the story.

Many future industries and global initiatives depend on mining.

Visit any mining school, company or community and you’re likely to hear:

“If you can’t grow it, you have to mine it.”

Without copper, aluminum and silicon chips, for example, there would be no phones or computers. Without potash and phosphates, no fertilizer for crops.

The energy transition certainly needs mining. The world must increase critical mineral output seven-fold to fuel the circular carbon economy.

Without rare earth elements, there could be no wind turbines; without gallium and germanium, no solar panels. Without lithium, no battery-powered electric vehicles.

In 2020, the World Bank’s “Minerals for Climate Action” report noted that graphite, lithium and cobalt production could increase some 500 percent by 2050, specifically for clean energy technologies.

That report also estimates more than 3 billion tons of mined resources are needed for solar, wind, geothermal power and energy storage.

To cap things, the International Energy Agency and other data sources agree that meeting climate-change mitigation goals depends on significantly greater and increasingly sustainable production of copper, cobalt, nickel and lithium.

Along these lines, Ma’aden entered an MoU with GlassPoint, the leader in solar industrial process steam, to build the world’s largest solar thermal plant at Ma’aden’s alumina refinery.

The plant will cut carbon emissions by more than 600,000 tons annually while aiding the transition to green aluminum.

The untold story

Fortunately, lands of opportunity can create a new hub supporting the global industry in the mining value chain and downstream.

The area can also offer enhancements in land access, geology, infrastructure and ease of doing business to foster foreign investment and partnership – one of the reasons the Future Minerals Summit, held annually in Riyadh, promotes these nations for their ability to serve the growing global economy.

As the world population rises to 9 billion by mid-century and emerging middle classes seek a higher quality of life, all energy sources will be needed – adding urgency to the development of mineral-intensive renewables.

For us to bring the world on board, people need to hear about mining’s lessening environmental footprint and better solutions for reuse, recycling and waste management.

They need to know about collaboration in key areas like exploration, development and production for more efficient resource use, as well as digitization for risk reduction, improved safety and lower costs.

And the need to invest in responsible mining that creates long-term economic and social benefits is the bottom line.

Mining, always key to modern life, is essential to growing economies. And it is increasingly positioned to meet growing demand while contributing to a carbon-neutral future. 

But first, we need to be more vocal about an industry whose benefits vastly outweigh the challenges.

That’s a secret we must shout from the rooftops.

Robert Wilt is CEO of Ma’aden, the Saudi Arabian Mining Company. He is based in Riyadh.

Electra Battery Materials sheds non-core Canadian assets

Wed, 01/04/2023 - 05:09

Electra Battery Materials (NASDAQ, TSX-V: ELBM), until recently known as First Cobalt, announced on Wednesday that is disposing its non-core Canadian assets while retaining royalty interests in the properties.

The move is part of an amendment to a 2021 share purchase and option agreement with Kuya Silver (TSX-V: KUYA), involving silver and cobalt exploration assets in Canada’s Cobalt Camp.

“Our initial agreement with Kuya was designed to allow us to maximize shareholder value for our exploration assets in Ontario, given our primary focus on recommissioning North America’s first cobalt sulfate refinery,” Electra CEO Trent Mell said in the statement.

To exercise its right to acquire a 100% interest in Electra’s assets in Ontario, Kuya is required to make a payment in cash or in the equivalent value of its shares for C$1 million on or prior to January 31 this year.

The equivalent value of Kuya’s shares will be based on the share price equivalent to the earn-in volume weighted average price prior to the issuance, Electra said.

Kuya silver’s planned acquisition of Electra’s interest in the Silver Kings joint venture properties will grant the miner ownership or exclusive rights to roughly 16,600 hectares in Ontario’s cobalt-silver district.

“Although Kuya Silver remains focused on its flagship Bethania silver project in Peru, having this kind of scale in a mining-friendly jurisdiction like Ontario will differentiate the company from other single-project juniors,” Kuya CEO David Stein said in a separate statement.

Electra Battery Materials is currently focused on developing an integrated battery materials complex in Ontario. The facility is expected to combine cobalt, nickel, and manganese sulfates production with the recycling of battery black mass.

According to the company, the Electra Battery Materials Park will be North America’s only fully integrated, localized and environmentally sustainable battery materials plant.

Nexa Resources halts Peru zinc mine due to blockade

Wed, 01/04/2023 - 03:35

Latin America-focused Nexa Resources (NYSE: NEXA) has halted production at its Atacocha San Gerardo open pit zinc mine in Peru due to a road blockade by a local Machcan community in place since December 27.

The zinc producer, controlled by Brazilian holding company Votorantim SA, said the obstruction of the road to access the mine has not have a material impact on Atacocha´s production to date.

Nexa noted that, on a weekly basis, Atacocha produces about 200,000 tonnes of zinc — less than 3% of the company’s total zinc production.

The company also said that current activities are limited to critical operations with a minimum workforce to ensure proper maintenance, while it engages in an active dialogue with the community and authorities.

Mining conflicts in Peru have risen over the past two years as empowered local communities increased demands under the administration of leftist ex-President Pedro Castillo, who was impeached in December and replaced by vice president Dina Boluarte.

Nexa itself faced two road blockades at Atacocha last year. The first one in March, which cost the miner 300 tonnes of lost zinc production, and another one in August.

A wave of protests hit Peru’s major operations in early 2022, including Glencore’s (LON: GLEN) Antapaccay, the country’s sixth largest copper mine. Other operations affected were Southern Copper Corp’s Cuajone mine and MMG’s giant Las Bambas mine, which is the nation’s fourth-largest copper mine and the world’s ninth-largest.

Nexa currently owns and operates five underground mines — three located in the Central Andes of Peru and two located in the Brazilian state of Minas Gerais.

The company is developing the Aripuanã project as its sixth underground mine in Mato Grosso, Brazil.

It also owns and operates three smelters, two in Brazil and one in Peru, Cajamarquilla, which is the largest in the Americas.

Peru is the world’s no. 2 copper producer after Chile and an important producer of zinc.

University of Oulu gets €1.6 million funding to expedite emission-free steel industry

Tue, 01/03/2023 - 16:37

The Tiina and Antti Herlin Foundation’s four-year funding, aimed at cutting carbon dioxide emissions, will be allocated to steel research and the promotion of carbon neutrality in the steel industry, with objective is to create a completely emission-free steel mill in Finland.

The Advanced Steels for a Green Planet (AS4G) project funded by the Foundation begins in January. The project will focus on processing the end results of an emission-free steel mill – the utilisation of side streams and the manufacturing of ultra high-strength steels, in particular, the University of Oulu said in a media release.

“It’s important to focus research on the themes where emissions can be decreased the most and where the strengthening of expertise creates the most benefits,” said Jukka Kömi, Professor at the University of Oulu. “The aim is to enable expertise for a completely emission-free steel mill in 2050.”

“In terms of carbon dioxide, achieving an emission-free steel mill in the Nordics will be realistic as early as 2035. It’s also important that future steel mills will not generate waste, but that all created side streams will be utilised as raw material in different sectors,” said Mirja Illikainen, Dean of the Faculty of Technology and Professor of inorganic materials in circular economy at the University of Oulu.

“Slag from current steel production is utilised well, but we still need development for the slag that will be created in carbon-free steel production.”

The carbon dioxide emissions of steel applications can be cut by decreasing and strengthening the steel used in them. Ultra high-strength steel makes structures lighter, which means that moving, for example, trucks, ships and trains requires less fuel. The carbon dioxide emissions of Finland could be cut by up to 8% if high-tensile steel was used in trucks.

“We study and review on an atomic level how high- strength steel works,” Kömi said. “We have to know how atoms interact and what makes steel high-tensile. Steel always has a lot of impurities, which is why it must be understood exactly what can be alloyed into it to make the end result even stronger.”

The northern research and engineering hub is forging future steel, circular economy and hydrogen – and promoting several sectors from construction to traffic.

“With basic research, we focus on steel development so that efficient supply chains can be designed for steel mills. Operational excellence must be constantly developed to understand how different grades of steel behave, as the same steel won’t work in a wind power plant, a ship and a bridge,” Kömi said.

The AS4G project is committed to the development of sustainable solutions and principles of circular economy, which will create new business opportunities for many sectors connected to the steel industry.

The development of lightweight steel structures is expedited by the automotive industry, because lighter cars must be strengthened in different ways while ensuring their safety. High-tensile steel is necessary for protecting the heavy batteries of electric cars, and it is also needed for the chassis – to make them functional.

The new AS4G project will be a unique combination of multidisciplinary expertise from the research of advanced steels, basic physics, metallurgy and the utilisation of industrial side streams.

In addition, emission-free steel production is being developed with the help of ground-breaking hydrogen innovations, for example, in producing hydrogen directly with sunlight without massive energy consumption.

The use of hydrogen as a reductant in steel production could cut Finland’s emissions by up to 7%, the University said.

Mining’s biggest future challenges will be meeting sustainability expectations – and adapting to the metaverse

Tue, 01/03/2023 - 14:18

We present the winner of the 2022 Northern Miner Scholarship, part of the Young Mining Professionals Scholarship Fund. For a list of all the 2022 winners, click here.

A societal shift is happening — specifically in the mindset of first-world, capitalist countries: we are beginning to recognize that unsustainable practices are coming back to haunt us. Companies and consumers alike are transitioning towards products with lifetime guarantees, and products that limit waste and eliminate inefficiency. If the Covid-19 pandemic has proven anything, it is that a stay-at-home lifestyle is not only practical, but is often preferable to much of the population.

As a university student in the first year of my PhD program in economic geology, I believe that within my lifetime, there will be a global transition towards online workplaces and recreation that is facilitated by VR technology within a metaverse. Physical products and services will be progressively replaced by virtualized NFTs (non-fungible tokens), which will be marketed as an environmentally friendly, inimitable, and unbreakable alternative to physically produced goods, and manufactured with minimal carbon emissions. I believe that the demand for physical goods will see an inverse correlation with adoption of metaverse technology, with a subsequent decline in the demand for hydrocarbons.

What does this mean for the mining industry? Mining will be increasingly focused on electronic components, and hydro, wind, solar, and battery powered machines. As evidenced by their recent price surges since 2020, metals such as lithium, cobalt, nickel, and even manganese will become incredibly valuable, as electric (and ideally self-driven) automobiles take over the trucking and delivery-based industries, whereas some more common and traditionally mined materials will likely depreciate in value. Materials such as concrete, asphalt, and iron could become much less valuable, as public buildings see less use, resulting in cities that are less motivated to engage in publicly owned projects and spaces, as people become entrenched in private spaces and opt for the increasingly convenient and comfortable lifestyle of staying at home.

The mining industry’s biggest challenge will be to adapt to these changes, and to meet the demands of a highly sophisticated, and virtualized society. I believe the mining industry will increasingly “mine” old technology and infrastructure while opening and operating fewer traditional mines. With the transition to working from home, and an adoption of virtual lifestyles, we can already see that office spaces, town halls, libraries, universities, medical facilities, places of worship, grocery stores, and restaurants have all experienced a significant decline in foot traffic, and it may not be long before some of these institutions forego in-person activities altogether. Some may transition to a strictly online/delivery-based service in order to streamline efficiency and cut unnecessary costs amidst rapid inflation. Many of these old buildings could become obsolete, and could be demolished. Many common building components such as copper and iron will be salvaged from these buildings prior to demolition, further depreciating the value of some base metal deposits. I believe the mining industry is poised to take advantage of this societal shift to a virtual takeover, but many mining companies will likely fail to make the transition. Mining companies will need to adapt to survive, as society ventures into truly unexplored territory.

Seafloor Mining

Demand for materials involved in battery power will continue to increase, which may in turn lead to seafloor expeditions, specifically in search of manganese nodules, which are also a source of cobalt and nickel — metals that are invaluable for battery-powered technology. However, extracting these materials from the seafloor comes with several different challenges, specifically the environmental impacts, permitting regimes, and its potential to inflame political disputes over territory. The world’s oceans do not belong to any one country, so who has the authority to determine who gets to mine what, and where, and define what is a reasonable degree of environmental disturbance?

Unless ore deposits can be found within a country’s exclusive economic zone, mining corporations must appeal to globalized institutions such as the International Seabed Authority, which has thus far granted 19 exploration licences within the Pacific Ocean’s Clarion Clipperton Zone — an area renowned for its abundance of polymetallic manganese nodules. These discussions open the door beyond manganese nodules to the mining of other seafloor deposits such as seafloor massive sulphides, which host especially unique and fragile faunal abundances that are restricted to these hydrothermal settings.

With the rise of seafloor mining, the mining industry may be challenged by even greater political interference, as governments may choose to create public mining corporations that are perceived as acting in the public interest, rather than allowing private companies to access seafloor mining opportunities. This will present huge challenges for the mining industry, as companies may be forced to compete with government-owned mining corporations.

The ongoing virtualization of work and recreation demonstrates challenges for the mining industry. These societal shifts have repercussions for the demands of metals, specifically for those involved in battery-powered technology. These metals tend to be particularly abundant in seafloor deposits such as manganese nodules, but the logistics surrounding seafloor mining remain uncertain.

The future of the mining industry is closely intertwined with political, social, and environmental concerns, all of which are prone to unpredictable fluctuations in public sentiment. Only one thing is certain: mining is here to stay, but the concerns and demands of this sector will always be in flux, as rising sustainability expectations, environmental concerns, and social restructuring will all directly impact the demand for resources in the coming decades.

Jonathan Umbsaar is a first-year PhD student at the University of Toronto, researching the critical metal distributions of seafloor massive sulphides and how these deposits compare to the  ancient analogues that we mine on land.

Teck’s oil sands exit faces legal challenge

Tue, 01/03/2023 - 12:53

One of the owners of the Fort Hills oil sands project in Alberta appears to be taking exception to a plan by Teck Resources (TSX:TECK.B) to exit the oil sands business by selling its stake in the project to Suncor Energy (TSX,NYSE:SU).

In October, Teck and Suncor announced a $1 billion buyout plan, in which Suncor, which owns 54.1% of the project, would acquire Teck’s 21.3% share. That would bring Suncor’s ownership stake to 75.4%.

The other owner of the Fort Hills project is TotalEnergies (NYSE:TTE), which owns 24.6%.

Last week, The French energy company filed an application in Court of Queen’s Bench in Alberta challenging the right of first refusal offer that Teck made to TotalEnergies in relation to the proposed sale of its share of Fort Hills to Suncor. Under the right of first refusal, Total could elect to acquire Teck’s interest in Fort Hills.

Total is asking that the 90-day period in which Total could exercise its right of first refusal be suspended until the courts have dealt with Total’s application.

It is not clear from public filings and news releases what Total’s issue with the transaction is, although it could have something to do with the fact Total also recently announced plans to exit Alberta’s oil sands by spinning out its share of Fort Hills and another oil sands project it co-owns into a new publicly listed company.

Just one month before Teck announced its planned exit from the Fort Hills project, TotalEnergies likewise announced it too wanted to quit Alberta’s oil sands.

In September, Upstream reported that Total wanted to quit the oil sands, or at least give the appearance of an exit, because it did not fit with its low-carbon investment strategy.

But instead of selling its stakes outright in Fort Hills and the Surmont SAGD project – which it co-owns with ConocoPhillips (NYSE:COP) – Upstream reported that Total planned to create a new spinoff company, to be listed on the TSX, and which would end up owning Total’s 50% of Surmont and its 24.6% share of Fort Hills.

Both Teck and Suncor said they don’t think Total’s legal challenge will be successful.

“Teck believes that Total’s position is entirely without merit and expects the transaction to close in the first quarter as previously announced,” Teck said in a December 23 news release. “It remains open to Total to accept the right of first refusal notice provided by Teck, and Teck intends to vigorously defend the proceedings.”

“Suncor supports Teck’s view on the validity of the ROFR notice and believes the filing by Total to be without merit,” Suncor said in a release.

(This article first appeared in Business in Vancouver)

Copper Mountain Mining’s IT systems seized in malicious malware attack

Tue, 01/03/2023 - 12:19

Copper Mountain Mining (TSX: CMMC) says it has idled its mill at its mine operations near Princeton, British Columbia and switched operations to manual, following a ransomeware attack.

The company said in a news release that the company’s IT systems at its mine and its head office in Vancouver were seized in the malicious malware attack late on December 27.

Ransomeware is a malware program that criminals use for extortion by seizing control of computers. The victims are typically frozen out of their computers until they pay a ransom.

Ransomware attack on mining operations “almost inevitable,” says cybersecurity expert

“The company quickly implemented its risk management systems and protocols in response to the attack,” the company said in a news release. “The company has isolated operations, switched to manual processes, where possible, and the mill has been preventatively shutdown to determine the effect on its control system.”

“The company’s external and internal IT teams are continuing to assess risks and are actively establishing additional safeguards to mitigate any further risk to the company. Copper Mountain is investigating the source of the attack and is in contact with the relevant authorities, who are assisting the company.

“There have been no safety or environmental incidents as a result of the attack. The company’s main priority is to continue to ensure safe operations and limit operational and financial impacts.”

This article first appeared in Business in Vancouver

Metso Outotec launches Optimus Sinter

Tue, 01/03/2023 - 11:53

Metso Outotec is launching Optimus Sinter, a digital optimizer for iron ore sintering plants. The new tool facilitates improved sinter plant process performance and stability by holistically optimizing the overall sintering processes.

A thermodynamic model forms the core of the Optimus Sinter; it calculates the process conditions in the sinter bed, which cannot be measured with sensors due to the high temperatures. It also offers advanced insights into the sinter plant operations.

Based on process measurement and actual raw material data as well as the proprietary process model, Optimus Sinter provides online, real-time process calculations;

monitoring of relevant process parameters and KPIs; visualization of chemical and physical processes and temperatures in the sinter bed; online optimization of feed material mix; real-time forecast of product quality; and improved burn-through calculation. 

“We are very happy to announce the launch of our holistic sinter plant optimizer. With Optimus Sinter, our customers can get the best performance out of their operations. Operators can manage the plants better by leveraging the advanced insights this digital tool offers. Optimus Sinter also offers real-time operating advice with respect to different operating plant targets,” shares Andreas Meier-Hedde, senior product manager for sintering technology at Metso Outotec.

Endurance Gold reports new geochemical anomaly at Reliance project

Tue, 01/03/2023 - 11:46

Endurance Gold (TSXV: EDG) has reported results from soil and biogeochemical orientation surveys conducted on the Olympic claims of its Reliance gold project in southern British Columbia. 

The road accessible property is located 4 km east of the village of Gold Bridge, and 10 km north of the Bralorne-Pioneer gold mining camp, which has historically produced over 4 million oz. of gold.

The orientation survey, consisting of 432 talus fines soil samples and 317 Douglas fir tree clippings, was designed to test two shear zones approximately 3 km east of the Royal shear that hosts the high-grade Imperial and Eagle deposits.

The combination of talus fine samples and biogeochemical samples have identified a geochemical anomaly along the Olympic Trend with a strike length of 1.6 km which is open to expansion. The anomaly is defined by elevated arsenic, giving a similar geochemical signature to the initial sampling that discovered the Eagle zone in 2020.

Prospecting and sampling have also identified high-grade gold-stibnite veins at the Enigma showing approximately 900 metres east of the Olympic anomaly. The Enigma veins are hosted in a 75-metre-wide shear zone where grab samples returned assays up to 9.66 g/t gold and 11.9% antimony.

“We are very encouraged with these preliminary results on the recently acquired Olympic claims,” said Robert Boyd, CEO of Endurance Gold.

“The recognition of the Olympic and Enigma trends within geologic settings similar to the Eagle zone, continue to support our belief that the Reliance gold project is prospective for multiple additional gold deposits related to at least five regional scale structures. All of these indicate potential for a multi-million ounce ‘epizonal’ orogenic gold camp on the Reliance property,” Boyd said.

New Found Gold increases Queensway drill program to 500K metres

Tue, 01/03/2023 - 11:39

New Found Gold (TSXV: NFG) has announced the expansion of the exploration program at its 100%-owned Queensway project, located on the Trans-Canada Highway, 15 km west of Gander, Newfoundland. 

To date, the company has completed approximately 80% of its current 400,000-metre diamond drill program at Queensway. Approximately 60,000 metres of drill core is pending assay. With 319,000 metres of drilling completed to date, the company is aiming for 181,000 metres of core production during 2023.

During 2022, New Found drilled 184,911 metres of core, equating to 3,555 metres of core production per week, while employing an average of 14 drill rigs. This expanded drill program is fully funded out of the company’s current cash and marketable securities balance of C$90 million.

According to the company, exploration drilling will include a hybrid of targeted drilling, aimed at expanding existing zones and identifying new zones in highly prospective areas, as well as grid drilling aimed at testing open swaths of prospective strike along main fault structures, with a strong emphasis on the west side of the Appleton fault zone (AFZ). 

Drilling is also planned for the parallel JBP fault zone (JBP) at Queensway north, the newly optioned VOA ground to the north, and at Queensway South.

“Looking regionally, the Queensway project covers a multitude of known gold prospects, structures, and prospective geological environments. This includes the JBP, which parallels the AFZ and remains underexplored, despite the presence of high-grade gold found on surface and in drilling. At Queensway South, we see the potential for additional gold discoveries along the southern extensions of both the AFZ and JBP faults, which extend for over 90 km,” said Greg Matheson, COO of New Found.

“Recognizing our success rate to date, and acknowledging the size of this canvas, we are excited to continue to aggressively pursue further potential high-grade gold discoveries at Queensway,” he added.

Recession risks to weigh on precious metals prices, but weaker dollar would help — report

Tue, 01/03/2023 - 10:56

The ongoing war in Ukraine, continued high inflation and recession concerns will play a pivotal role in the gold, silver and platinum metals markets in 2023, according to Heraeus, the world’s biggest precious metals trader.

While the war in Ukraine served as a catalyst for the rally in Q1 2022, the prices of gold, silver and platinum group metals still spent the rest of the year returning to lower levels as the conflict rumbles on.

This year, slower economic growth is predicted in many regions, and both Europe and the US may be facing recessions, which would likely weigh on demand for precious metals, according to Heraeus’ 2023 outlook report, produced in collaboration with UK consultancy SFA (Oxford) Ltd.

Although covid-19 has become a diminishing concern in most countries, top consumer China remains on high alert and is still enforcing restrictions, which could further constrain its economic growth and metal demand, Heraeus adds.

2023 outlook

Prices of gold (and, by extension, silver) have not made gains over the past year despite a multi-decade-high inflation, thanks to persistent strength in the US dollar as the Federal Reserve aggressively hikes interest rates.

With interest rate hikes likely to continue, the dollar strength could persist through 2023, potentially drawing more investors away from these metals. However, a weakening economy may lead the Fed to change course, resulting in a weaker dollar and potential upside for gold and silver, Heraeus says.

Should the US central bank keep interest rates stable or even lower them, a record high for gold in euro terms is quite possible, Heraeus predicts.

Depending on the direction for the dollar resulting from the Fed’s actions, gold is likely to fall in range between $1,620/oz $1,920/oz, while silver is forecast to trade between $17/oz and $25/oz in 2023, according to Heraeus estimates.

Source: Heraeus

Platinum has also been depressed by the strength of the dollar against the South African rand, and would benefit as the dollar weakens, even though the platinum market is predicted to remain oversupplied (by over 400,000 oz) in 2023. The price forecast for platinum is between $800/oz and $1,150/oz, with upside driven by a potentially weaker dollar.

Likewise, the palladium market is forecast to swing into surplus in 2023, providing downside price risk for the metal. Supply is picking up, partly owing to a lacklustre demand from the automotive sector. Given the oversupply, palladium is predicted to trade between $1,300/oz and $2,250/oz for the year.

Read the full report here.

Artemis says delayed permits for Blackwater gold project won’t affect construction timeline

Tue, 01/03/2023 - 09:17

In the latest update on the progress of its Blackwater project in central British Columbia, Artemis Gold (TSXV: ARTG) said on Tuesday that it is expected to finally obtain the BC Mines Act permits for major construction works during the first quarter of 2023. The permits were initially expected in fall 2022.

Despite the revised receipt date of the BC Mines Act permits, Artemis said this delay is not expected to affect its planned start of major construction activities at Blackwater later in Q1 2023.

Site works that are currently underway include logging, clearing and grubbing of the plant site area; installation of physical environmental controls; and advancement of the construction camp accommodations. Site levelling, pad preparation and bulk earthworks for the construction camp were completed as planned in Q4 2022.

The company is also advancing required upgrades to the site, which include running buried and surface pipelines from selected water wells, and upgrades to its sewage infrastructure to accommodate planned head count capacity at site for major works construction activities.

“While we are disappointed that we did not receive the BC Mines Act permits as planned in fall 2022, they are well advanced and are expected to be finalized in the coming weeks,” CEO Steven Dean said in a news release.

“The Blackwater construction team has made significant progress in Q4 2022, with Blackwater on-site activities progressing on schedule. The construction camp and process plant area preparation and bulk earthworks are on track to be completed prior to the start of major works,” Dean added.

Located about 446 km northeast of Vancouver, the Blackwater project comprises the construction, operation and closure of an open-pit gold mine and ore processing facilities that will be developed in multiple stages.

Over an estimated 22-year mine life, Blackwater is expected to produce an average of 339,000 oz. of gold per year.

Manganese batteries market may face deficit in 2024

Tue, 01/03/2023 - 09:01

The high-purity manganese market may face a deficit as early as 2024, according to people in the industry heard by MINING.COM.

An essential component of the steel-making process, manganese has played an increasing role in the battery market. The metal sulphate is an important stabilizing ingredient in the cathodes of batteries widely used in electric vehicles and electronics.

Volkswagen, Mercedes, Tesla, and GM are among the companies that have announced intentions to use high-purity manganese in their cars. A Chevy Bolt, for example, can contain over 24 kg of manganese. 

“The reason nobody is talking about manganese is that it’s very cheap, and it’s taken for granted,” said Andrew Zemek, special adviser at CPM Group.

While the lithium price has skyrocketed over the last couple of years, passing $80,000 per tonne and other metals like cobalt and copper reached over $8,000 per tonne, manganese sulphate costs less than $1,000 per tonne in China.

But increasing demand from the EV industry and the subsequent deficit of high-purity manganese may impact the metal price in 18 or 24 months, according to Euro Manganese CEO Matt James. 

“There’s been a build-out of manganese sulphate capacity in China and that has been enough to feed the current demands of the battery industry,” James told “But going forward, we’re going to see significant growth in both the European and North American battery industry. Both of those will require their own supply chains.”

“As the market looks to source locally, in North America because of the Inflation Reduction Act(IRA) or Europe because of geopolitics, when they start to look at the high-purity capacity in both of those regions, it is very very small,” James said.   

“The Chinese price does not reflect a western price. The price today in Europe and North America commands a significant premium,” said James.

People in the industry estimate the price at $3,300 per tonne by 2027 — growing to $4,000 by 2031 for Europe and North America, considering the cost of freight from China and costs with green credentials.

Reliance on China 

Over 92% of high-purity manganese sulphate conversion capacity is in China. Currently, only two plants outside of China are in production, one in Japan and the other in Belgium. 

Vibrantz Technologies produces high-purity manganese in Belgium and sources its ore from South Africa, Gabon, and Brazil. 

The other producer outside China is Nippon Denko in Japan, which also uses imported ore.

Combined, these two facilities produce around 5% of the global high-purity manganese sulphate.

“I don’t see a risk of shortage in the short term because so much capacity is being built in China,” said Aloys d’Harambure, executive director of the International Manganese Institute.

However, the market may have to adjust with the United States and Europe moving to build their own supply chain of battery materials. 

“The environmental, social, and governance procedures in China are sometimes not as strict as in other, European and North American and, some African countries. The cost of high manganese sulphate that you see from China is not realistic from the rest of the industry,” said d’Harambure.

According to Sam Jaffe, vice president of Battery Storage Solutions, China can always “blow out” the North American and European competitors if it chooses to do so. 

But that dynamic is changing.

“As we move to intracontinental supply chains, China remains a huge factor in the high-purity manganese market, but it’s not the single determinant of where those markets will move,” said Jaffe.

Piping Manganese 

By 2031, North America is expected to require over 200Kt of high-purity manganese annually.

The continent, however, has no current high-purity manganese processing capacity to supply a large number of battery gigafactories and cathode plants under development.

South32 is developing the first new US manganese mine in decades. The company has allocated $55 million of capital expenditure to work on the Hermosa project in Arizona for the current fiscal year and expects to begin a pre-feasibility study before mid-2023.

In Europe, Euro Manganese is developing its Chvaletice Project in the Czech Republic, the only sizeable, classified resource of manganese in the European Union. 

The project entails re-processing manganese deposits contained in waste (tailings) from a decommissioned mine that operated between 1951 and 1975.

The company plans to convert the carbonate to high-purity manganese metal and sulphate and send it to Euro Manganese’s planned processing facility in Quebec where it will be converted into a liquid sulphate. The site is adjacent to two proposed cathode plants allowing the liquid sulphate to be piped directly into the cathode production processes.

“Going forward, we’re going to see a European battery industry and a North American battery industry,” said Jaffe. “Both of those are growing at a tremendous pace and are gonna require their own supply chains, including a supply chain for manganese. And when you thinking about moving forward, I would talk about 10 years from now or over the next five years.”

Copper price down as China’s manufacturing activity contracts

Tue, 01/03/2023 - 08:04

The copper price fell on Tuesday due to a stronger dollar and deteriorating demand prospects over weak growth in China.

Copper for delivery in March fell 0.1% on the Comex market in New York, touching $3.80 per pound or $8,360 per tonne.

[Click here for an interactive chart of copper prices]

China’s manufacturing sector activity contracted at a sharper pace in December as surging covid infections disrupted production and weighed on demand, a survey of purchasing managers (PMIs) showed.

A recovery in subway use in major Chinese cities sends “a powerful signal that China is waking from its covid-induced slumber” said Giles Coghlan, an analyst at broker HYCM.

“However, that has not been felt in copper markets because of worries that both the US and Europe are heading towards recessions while China’s latest PMI prints show further falls,” he added.

Sliding demand for imported copper in China can be seen in the Yangshan copper premium, which had slumped to $37.50 a tonne on Dec. 30, down more than 70% since the middle of October.

(With files from Reuters)

US, allies should disconnect rare earths supply chain from China — report

Tue, 01/03/2023 - 07:24

A recent report from Rice University’s Baker Institute for Public Policy suggests that policymakers in the United States and allied countries should start bolstering raw materials supply chains to reduce the country’s dependence on rare earths from China.

The dossier notes that the China Rare Earth Group, a merger of three of China’s state-owned enterprises into one mega-conglomerate, controls up to a quarter of global mineral-bearing rare-earth elements. Combined with China’s overall dominance in rare-earth minerals and materials—roughly 60% of world production—the merger grants Chinese central planners significant pricing power and influence over world supply.

“Whether China would weaponize their leverage over rare-earth supply chains in direct conflicts with the US and/or its allies is a matter of speculation and debate,” the report reads. “However, one thing is for sure: In such an event, the US must minimize China’s ability to limit sanctions and other collective global responses against potential coercive action.”

According to the authors, the covid-19 pandemic and Russia’s invasion of Ukraine have highlighted fragilities in global commodity supply chains and trade flows—as well as tensions among competing world powers.

“They serve as sobering reminders that relying on dominant suppliers and revisionist actors for vital commodities can create significant pitfalls,” the researchers point out. “In particular, rising trade and geopolitical security tensions with China could threaten REE supply, potentially influencing up to $1 trillion of goods.”

They argue that despite how important it is to strive for a domestic or less risky supply chain, convincing American voters to support more assertive raw materials policies will be a challenge for government and industry decision-makers.

“It is not certain that voters will accept the burden of ‘de-risking’ a broad swath of raw materials and technology-oriented industrial policies,” the authors write. “Defense planners, in particular, must be ready to deal with those outcomes.”

Skeena Resources seals Essay Creek royalty sale to Franco Nevada

Tue, 01/03/2023 - 05:52

Canadian explorer and developer Skeena Resources (TSX, NYSE: SKE) announced Tuesday it had closed the sale of a 0.5% net smelter returns royalty (NSR) on its Eskay Creek gold-silver project in British Columbia to Franco-Nevada (TSX, NYSE: FNV) in a cash deal worth C$27 million ($20m).

The transaction, first announced in early December, also gives Skeena an additional cash consideration of C$1.5 million ($1.1m).

Net proceeds of the sale will be used mainly to fund exploration and development activities at Eskay Creek, which the company acquired from Barrick Gold in 2020. 

The British Columbia-focused company feasibility study for Eskay Creek envisions an open pit operation with an annual production of 352,000 ounces of gold equivalent a year.

Average grades are pegged at 4.57 g/t gold-equivalent, while the after-tax net present value, at a 5% discount, is estimated at C$1.4 billion, with a 56% internal rate of return and a 1.4-year payback at $1,550/oz gold.

The past-producing Eskay Creek mine was the world’s highest-grade gold operation between 1994 and 2008.

Ferrexpo owner Zhevago steps down from board after arrest

Tue, 01/03/2023 - 03:47

Ukrainian iron ore pellets producer Ferrexpo Plc (LON: FXPO) said on Tuesday that its owner and non-executive director, Kostyantin Zhevago, has resigned from the company’s board following his detention in France for alleged money laundering.

The resignation of the billionaire, who was arrested at a hotel in the luxury French ski resort Courchevel on December 27, was effective two days later, the company said.

Zhevago was wanted for allegedly embezzling and money-laundering linked to the disappearance of $113 million from Finance & Credit, his former bank that went bankrupt in 2015.

Ferrexpo noted that Zhevago was entitled to appoint a non-executive director to the board as his representative, but he hasn’t exercised this right.

The mogul, a member of Ukraine’s parliament from 1998 to 2019, stepped down as the Ferrexpo’s chief executive in late 2019 amid an investigation by Ukraine’s state prosecutor office.

Zhevago has denied any wrongdoing, while the firm has stressed that the detention of the businessman was tied to matters unrelated to the company.

Battery metal binge outweighs cost hikes at PolyMet copper-nickel project in Minnesota

Fri, 12/30/2022 - 10:26

Surging demand for battery metals is offsetting increased costs to build PolyMet Mining’s (TSX: POM) copper-nickel project in northeastern Minnesota, according to new estimates.

Developing the first phase of the NorthMet open-pit operation about 100 km north of the Lake Superior port of Duluth is forecast at $1.2 billion in an updated feasibility study released Friday. That’s greater than a quarter more expensive than the $945 million estimated in a 2018 technical report. PolyMet wants production to start in 2026.

Phase two is to cost $325 million, the St. Paul, Minnesota-based company said Friday, compared with $259 million in the 2018 report, another one-quarter increase.

Still, the global demand for copper and nickel means the new forecasts reaffirm the project’s technical and financial viability, Jon Cherry, PolyMet chairman, president and chief executive officer, said in a news release on Friday.

“An improved market forecast created by soaring demand for clean energy metals such as copper, nickel and cobalt more than offsets inflationary pressures and improves the project’s valuations and returns,” Cherry said.

The project aims to mine 29,000 tonnes of ore a day for an after-tax net present value of $304 million at a 7% discount rate during a 20-year mine life, the study shows. It forecasts an after-tax internal rate of return of 10.5%

Commodity gains

Copper has increased in price by about 18% over the last five years while nickel has more than doubled as automakers and technology companies scramble to secure supplies of materials used in electric vehicle batteries and other widespread modern gadgets.

PolyMet, which is 70% owned by Glencore (LSE:GLEN), agreed in July to a joint venture with Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK) to develop NorthMet and Teck’s nearby Mesaba deposit.

The companies expect the deal, which keeps Glencore in control of the venture called NewRange Copper Nickel, to close by the end of March.

NorthMet has 289 million tons (254 million tonnes) proven and probable mineral reserves grading 0.597% copper equivalent after dilution, according to the updated feasibility study.

Phase one includes rehabilitating the former LTV Steel Mining processing plant and using modern wastewater treatment to clean up former iron ore operations, the company said.

Phase two is building and operating a hydrometallurgical plant to treat nickel sulphide concentrates into upgraded nickel-cobalt hydroxide and recover additional copper and platinum-group metals, PolyMet said.

It forecasts phase two’s net present value at C$487 million with a 7% discount rate, and an after-tax internal rate of return of 11.5%.

Court challenges

Both phases have all necessary permits, but face court challenges from groups opposed to the project. In June, PolyMet won one case threatening to revoke an environmental permit for air quality. More litigation is pending, PolyMet said.

Teck’s Mesaba project is in an early stage of studying potential development options.

The deposit has a measured mineral resource of 340 million tons (308 million tonnes) grading 0.497% copper, 0.115% nickel, 36 parts per billion (ppb) platinum, 101 ppb palladium, 28 ppb gold, 74 parts per million (ppm) cobalt and 1.2 ppm silver, according to a November filing by the company.

The NorthMet and Mesaba projects account for about half of the known resources of copper, nickel, cobalt and platinum group metals in Minnesota’s Duluth Complex, the company said. The complex north of Lake Superior east of Duluth formed 1.1 billion years ago by upwelling magma flows during North America’s mid-continental rift.

Platinum price on pace for 20% quarterly gain, its biggest since 2008

Fri, 12/30/2022 - 09:37

Due to ongoing supply concerns, platinum prices have surged more than 20% over the past three months, and the precious metal is now set to experience its best quarter since the start of 2009.

On Friday, platinum prices rose another 1.0% to $1,064.50 per ounce, bringing its quarterly gain to just under 23%.

Should the price of platinum maintain its 20% uptick, then this will will be the biggest quarterly increase since the first quarter of 2008, when it gained a staggering 34%.

According to the World Platinum Investment Council, top consumer China has imported excessive amounts of platinum metal since 2019, which has left a limited above-ground supply for the rest of the world.

“This, in combination with higher prices likely being needed to release Chinese inventories to the domestic market, could have a significant bearing on platinum market price discovery,” the Council wrote in its Platinum Perspectives report in December.

The Council is anticipating a platinum deficit in 2023, with demand growing by 19% while supply increasing by just 2%.

“Despite international economic turbulence, with many countries already in, or expected to tip into, recession, industrial demand for platinum will be up 10% compared to 2022, which exceeds the 10-year average,” the WPIC said in a press release.

Demand for platinum in the automotive industry will also continue to grow next year, while jewelry-based demand for platinum is forecasted to remain constant throughout 2023, the WPIC added.

According to Reuters data, platinum is by far the best-performing precious metal in 2022, recording a year-to-date gain of 9%. Over the same period, gold has lost around 1%, silver up around 3% and palladium down 4%.

(With files from Reuters)

Australia takes serious look at its carbon sequestration potential

Fri, 12/30/2022 - 09:34

Nature-based carbon sequestration technologies such as permanent plantings and farm forestry, currently provide significant potential for Australia to reach net-zero emissions, a recent report has found.

Published by CSIRO, Australia’s national science agency, the study assessed 12 nature-based and engineered carbon sequestration technologies to look at their actual sequestration potential, barriers to uptake and co-benefits. 

The technologies reviewed were permanent plantings, plantation and farm forestry, natural regeneration of native forest, avoided land clearing, savanna burning, soil carbon, blue carbon, pyrolysis biochar, geological storage (carbon capture and storage), bioenergy with carbon capture and storage (BECCS), direct air capture (DAC), and mineral carbonation.

The techniques that involve trees and other plants were identified as the ones with the highest sequestration potential. These mechanisms are followed by biochar, mineral carbonation and DAC, which are also efficient but are associated with higher costs.

(Graph courtesy of CSIRO).

According to the authors of the report, further research and development of these technologies are needed to bring down costs and increase national sequestration capabilities.

While the report considers the potential of each mechanism, it does not analyze the impact of competition for land, resources, or energy between different technologies.

These will be important considerations when it comes to implementation, as it will mean realizable sequestration is likely considerably lower than technical and economic potential sequestration estimates provided in the report.

“No single technology will get us there. An integrated and optimized portfolio of technologies will be required,” Andrew Lenton, head of CSIRO’s CarbonLock Future Science Platform, said in a media statement.

In Lenton’s view, a comprehensive integrated assessment modelling approach will need to quantify potential and feasible sequestration opportunities and guide development at the national and regional scales.

The report will inform an Insights Paper on carbon sequestration being published by the Climate Change Authority, which will, in turn, help inform the advice to the government on Australia’s 2035 emissions reduction target.


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