April Newsletter – 19.04.2022
- Indonesia, Australia face limits in coal exports to Europe ahead of Russian ban
- Guinea: Foreign Mining companies ordered to process bauxite on site
- Mexican president reignites debate around mining reform with focus on lithium
- Tesla may start mining lithium as Musk cites battery metal cost
- Rio Tinto takes full control of Queensland alumina refinery after Russian oligarchs sanctioned
- Atalaya Mining, Endesa X to build largest solar farm for a mining operation in Spain
- China iron ore price surges to highest since August on improving consumption
- Vale agrees to sell manganese, iron ore assets to J&F
Indonesia, Australia face limits in coal exports to Europe ahead of Russian ban
Anglo American Thermal Coal Greenside Collieries.
Indonesia and Australia, among the world’s top coal exporters, have hit their production limits and are unlikely to meet Europe’s demand for additional supplies if the European Union bans Russian coal imports, mining executives said on Wednesday.
The European Commission proposed on Tuesday new sanctions against Russia over its invasion of Ukraine, including a ban on buying Russian coal and on Russian ships entering EU ports, and said it was working on banning oil imports too.
The EU depends on Russia for around 45% of its coal imports, according to the European Commission website.
Before the EU proposal, some European buyers had already held talks with Indonesian miners in March as they sought to replace Russian supplies, a senior executive of Indonesia Coal Miners Association (ICMA) said.
Guinea: Foreign Mining companies ordered to process bauxite on site
Guinea’s ruling junta has given foreign companies until the end of May to submit proposals and a timetable for the construction of bauxite refineries.
Colonel Mamady Doumbouya in a meeting with stakeholders in Conakry asked that the industrialists ensure this was done before the end of May and that all raw materials used in the manufacturing process be produced locally.
“Despite the mining boom in the bauxite sector, we have to admit that the expected revenues are below expectations, and you and we cannot continue this game of fools that perpetuates great inequality in our relations” Colonel Doumbouya said.
The junta head also warned that foreign companies that violate the refinery construction deadlines will be penalized.
With an estimated 7.4 billion tons, Guinea has the world’s largest reserves of bauxite, a mineral used in the manufacture of aluminum, which is essential for the automotive and food industries. It is also the second largest producer. China imports about half of its bauxite needs from Guinea.
However, the benefits to Guinea from bauxite mining and other abundant natural resources such as iron, gold and diamonds are notoriously disproportionate. Experts cite insufficient investment, lack of essential infrastructure such as roads, and rampant corruption as factors that have hindered growth.
Mexican president reignites debate around mining reform with focus on lithium
During a recent press conference, Mexican president Andrés Manuel López Obrador warned that if Congress does not approve a constitutional reform on electrical matters next week, following a decision by the Supreme Court of Justice that granted constitutional validity to the new Law on Electrical Power, he will push for a rewrite of the country’s Mining Law.
“In the event that the members of Congress that represent vested interests prevent the reform, in that case, they will not be able to dispose of lithium. They care a lot about lithium, as they want to put their hands on this strategic mineral,” López Obrador said. “If we were to be betrayed, we can still resort to reforming the Mining Law.”
The president pointed out that amending the Mining Law does not require the approval of two-thirds of Congress but only of a simple majority, that is, half of the votes plus one. In his view, this means that his proposal would get the necessary votes to pass, which would “make lithium a mineral that belongs to the nation, to the Mexicans.”
Tesla may start mining lithium as Musk cites battery metal cost
Nearly two years after Tesla Inc. outlined a plan to dig for lithium, its chief Elon Musk signaled that the electric car giant might start doing so, due to skyrocketing cost of the metal key to battery technology.
Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.
There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.— Elon Musk (@elonmusk) April 8, 2022
Lithium has joined the turmoil gripping commodities in the wake of Russia’s war on Ukraine. Even before the war, prices of raw materials rallied with demand surging and supplies choked up due to pandemic-triggered supply chain woes. An index of global lithium prices compiled by Benchmark Mineral Intelligence has surged almost 490% in the past year. China worries about prices of lithium so much that it hauled in a range of market players for two days of talks focused on halting a breakneck run-up in prices.
Lithium is a key component in electric vehicle batteries and so automakers are racing to secure supplies, expecting surge in demand amid a global push for the electrification of transportation. Tesla has signed supply deals with producers of battery metals in the past couple of years, including a secret one with mining giant Vale SA.
Rio Tinto takes full control of Queensland alumina refinery after Russian oligarchs sanctioned
Oleg Deripaska and Viktor Vekselberg hold stakes in the Gladstone based refiner, which has been under pressure to cut ties after Ukraine invasion.
The Queensland Alumina smelter at Gladstone. Rio Tinto has taken full control after Russian oligarchs Oleg Deripaska and Viktor Vekselberg, who both hold stakes, were sanctioned by the Australian government
Rio Tinto has taken full control of an alumina refinery in which oligarchs Oleg Deripaska and Viktor Vekselberg hold stakes after the Australian government slapped sanctions on the pair and banned the export of bauxite products to Russia.
The oligarchs have an interest in Queensland Alumina Limited through shareholdings in En+ Group, a London-listed resources company which owns the second-largest aluminium producer in the world, Rusal.
Rusal owns 20% of QAL and Rio Tinto owns the remainder.
In a statement, Rio Tinto said: “As a result of the Australian government’s sanction measures, Rio Tinto has taken on 100% of the capacity and governance of Queensland Alumina Limited (QAL) until further notice.”
“Our focus remains on ensuring the continued safe operation of QAL, as a significant employer and contributor to the local Gladstone and Queensland economies,” the company said.
Atalaya Mining, Endesa X to build largest solar farm for a mining operation in Spain
Cyprus-based Atalaya Mining (AIM: ATYM, TSX: AYM) and utility company Endesa X have joined forces to build the largest self-consumption photovoltaic plant for a mining operation in Spain.
The 50-MW facility will be located in the southwestern municipality of Minas de Riotinto, where Atalaya’s local subsidiary manages the historic Riotinto mine, an open-pit copper operation with a commercial production rate of 15 mtpa and proven and probable ore reserves totalling 197 million tonnes at 0.42% copper.
The €30-million, 60-hectare solar farm will be the first one in Spain to supply clean energy to a mining operation. It will include 75,765 solar panels of 650 and 655 Wp, which will extend through a collection area of 234,810 square metres, thus fulfilling one-quarter of the mine’s energy needs.
The facility is also expected to avoid the annual release of 40,000 tonnes of CO2 into the atmosphere or the equivalent of the emissions of over 19,000 gas-powered cars.
Besides the main plant, Endesa X plans to build a substation that will convert energy from 132 to 30 kilovolts and will connect directly to the mine. The amount of green energy supplied to Riotinto will be equivalent to powering 14,500 homes for 12 months.
China iron ore price surges to highest since August on improving consumption
Iron ore futures in China jumped 4% on Wednesday, hitting their highest level in more than eight months, as trading resumed after the Tomb Sweeping Festival holidays.
The most-active iron ore futures on the Dalian Commodity Exchange, for September delivery, rose as much as 4.1% to 945 yuan ($148.49) per tonne, as demand at steel producers recovered from pandemic disruptions.
“Currently, the sluggish property market in China has dented steel and iron ore consumption… but iron ore destocking has started,” analysts with Huatai Futures wrote in a note.
According to SteelHome, portside iron ore inventories in China were at 155.6 million tonnes in the week ended April 1, down by 4 million tonnes from a week earlier and 3.3% from the peak in mid-February.
Vale agrees to sell manganese, iron ore assets to J&F
Brucutu is the second largest mine in Brazil, behind Vale’s Carajás.
Brazil’s Vale (NYSE: VALE) has agreed to sell its manganese and iron ore mines in central Brazil, with an enterprise value of about $1.2 billion, to holding company J&F Investimentos, it said in a securities filing on Wednesday.
In addition to the manganese and iron ore mines, the mining giant also agreed to sell logistics assets in the region to J&F, parent company of meat packer and pulp maker Eldorado Brasil.
Vale said last week it was in advanced talks to sell the companies that compose its Center-West system as it looks to focus on core businesses and growth opportunities, but did not reveal the potential buyer.
The Center-West system, which comprises Mineracao Corumbaense, Mineracao Mato Grosso, International Iron Company and Transbarge Navegacion ventures, produced 2.7 million tonnes of iron ore and 200,000 tonnes of manganese ore in 2021.
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