April Newsletter – 25.04.2022


  • Balkans turns to coal as energy crisis trumps climate commitments
  • Samarco creditors reject debt restructuring proposal
  • Chile recommends denying extension for Anglo American copper mine
  • China dominates the rare earth element market: What is US government doing to increase global supply?
  • Lithium Energy, Hanaq Group join forces to explore lithium deposits in Argentina
  • Indian aluminium producer NALCO faces coal scarcity due to train shortage
  • LME abandons attempt to crack gold market
  • Zijin invests in Xanadu to ink copper-gold resources in Mongolia

Balkans turns to coal as energy crisis trumps climate commitments

Balkan nations in southeast Europe are turning to coal as they try to tackle a global surge in energy prices, raising fears among environmentalists that countries are rowing back on commitments to phase out the most polluting fossil fuel.

North Macedonia, once a frontrunner in attracting renewable energy investors, said earlier this month it planned to open two new coal mines to supply power stations.

The energy ministry also said it wants to buy 3 million tonnes of coal from neighbouring Kosovo, though no deal has been signed.

“With the start of the energy crisis, not just us but all nations in Europe have immediately increased the production of electricity from coal because it is the cheapest and most secure (source),” said Vasko Kovacevski, CEO of state-owned power utility Elektrani na Severna Makedonija (ESM).

Surging wholesale prices, low inventories and Russia’s invasion of Ukraine have sent energy prices soaring and prompted many countries to scramble to secure supplies.

But environmentalists say turning to coal is not the answer.

“Decarbonisation is one of the pillars of the green agenda and we submit a plan for a coal mine? This is unacceptable,” said Nevena Smilevska of environmental group Eko-svest in Skopje.

The new coal mines are Zivojno, close to the Bitola power plant in the south of the country, and Gushterica, near the Oslomej plant in the west. Neither the government nor ESM have said when they will open or how much they will produce.


Samarco creditors reject debt restructuring proposal

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The Germano complex.

Creditors of Brazilian miner Samarco Mineracao SA, a joint venture of Vale SA and BHP Billiton Ltd, on Monday rejected the debt restructuring plan presented by the company in an online creditors assembly.

Creditors are expected to present an alternative plan for the debt restructuring within 30 days. Representatives of 99.3% of unsecured credits rejected the plan, while smaller creditors in different classes voted favorable to the company’s plan.

An alternative plan designed by creditors is now allowed under Brazilian law, which previously mandated liquidation if creditors rejected a restructuring plan proposed by the company.

In a statement, the group of creditors said they will propose mining executive Tito Martins to lead Samarco and take the company “back to growth”. Creditors also said the company’s restructuring plan “underestimated” Samarco’s production capacity.

In a statement, Samarco said financial creditors need to consider interests of all stakeholders and “should not look only for financial return that cannot be supported by the company”.


Chile recommends denying extension for Anglo American copper mine

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Los Bronces copper mine in Chile.

A Chilean environmental regulator has recommended that global miner Anglo American’s Los Bronces copper project not be granted an extension permit involving a planned $3.3 billion investment, the company said on Saturday.

Anglo American said Chile’s Environmental Assessment Service had issued the recommendation although a firm decision on the mine’s life extension would only come next week.

“The SEA’s recommendation is despite the strong support for the project offered to date by 23 of the 25 technical services bodies and government ministries that form part of the assessment process,” Anglo American said in a statement.

Environmental advocates have criticized the Los Bronces project, located near Chilean capital Santiago, because of its potential impact on a local glacier as well as on water availability for the region.


China dominates the rare earth element market: What is US government doing to increase global supply?

Rare earth metals are needed to make electric cars, wind turbines, and more. With China dominating the market, the US is scaling up its focus on mining.

Rare earth minerals are metallic elements found in the earth’s crust which can be processed into increasingly vauable commodities. These elements and metals are used to make the motors for hybrid and electric cars, generators for wind turbines, military-grade weapons, and other technologies.

Contrary to the name, the concentration of these elements within the earth’s surface is actually quite high. Economically, however, finding high concentrations in a specific area is “rare,” making establishing a mine and processing center costly.

Radioactivity and environmental danger

Additionally, when the minerals are refined, they often need to be separated from other elements like uranium which has radioactive properties. As the minerals are processed, Technologically Enhanced Naturally Occurring Radioactive Materials (TENORM) are created as a byproduct. The Environmental Protection Agency defines as TENORMs as “naturally occurring radioactive materials that have been concentrated or exposed to the accessible environment as a result of human activities such as manufacturing, mineral extraction, or water processing.”

If these materials are not disposed of properly, there can be severe environmental consequences. Still, the industry is identifying the proper ways to store or dispose of these materials, and no clear consensus has been reached. Currently there are no processing facilities in the United States over fears of radioactive leakage. There is, however, one mine near San Bernadino, California called Mountian Pass where the element bastnäsite is mined.


Lithium Energy, Hanaq Group join forces to explore lithium deposits in Argentina

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Solaroz project area.

Australia’s Lithium Energy Limited (ASX: LEL) and Hanaq Group, a company with Chinese and Argentinian capital, have joined forces to find new lithium deposits in the Olaroz-Cauchari endorheic basin, located in Argentina’s northwestern Jujuy province.

Together with Bolivia and Chile, Argentina is part of the so-called Lithium Triangle, a region that hosts more than half of the world’s identified lithium resources.

According to a statement released by the Jujuy provincial government, Hanaq and LEL are already taking steps to file the necessary permits that would allow them to begin exploration work this year.

The dossier points out that Hanaq, the current operator of the Providencia silver mine, has been developing a lithium division for some time now. This new direction is what led to the collaboration with Lithium Energy and, together, they plan to conduct drilling campaigns on the properties with the potential to contain lithium brine resources.

“This [partnership] is the fruit of the work that has been done to promote exploration and knowledge of the province’s natural resources,” Miguel Soler, Jujuy’s secretary of Mines and Hydrocarbons, said. “This company [Hanaq] is advancing with surface geophysical prospecting and exploration work and soon will be drilling to define new lithium brine resources.”


Indian aluminium producer NALCO faces coal scarcity due to train shortage

Indian state-run aluminium producer National Aluminium Co Ltd (NALCO) is facing a coal supply shortfall, due to supplies being diverted to priority electricity generation and a shortage of trains to deliver fuel to NALCO’s power plants.

Daily supplies to NALCO were falling short of requirement by at least 5,000 tonnes due to the train shortage, a senior company official told Reuters, adding that the company had coal inventories that would last only four days.

India has diverted coal supplies from the non-power sector, and put on hold plans for some fuel auctions, in a bid to ensure coal availability for utilities and tackle widespread power outages across the country.

There is also a general shortage of trains to move coal around the country. State-run Indian Railways has fallen short of utilities’ requirements by 16% in the first half of April, a government official familiar with the matter said.

NALCO data seen by Reuters show that supplies by state-run Coal India COAL.NS under a long-term supply deal fell short of the contracted quantity by 17% in 2021/22, while shortfalls were more than 75% under another related deal.


LME abandons attempt to crack gold market

The London Metal Exchange will abandon its attempt to break into precious-metal trading after just five years.

The LME — the world’s biggest exchange for industrial metals — partnered with banks including Goldman Sachs Group Inc and Morgan Stanley in 2017 to launch the contracts. London is one of the two major centers of precious-metals trading, where trillions of dollars in gold, silver and associated derivatives change hands each year. It’s an almost entirely over-the-counter business, dominated by top bullion banks like JPMorgan Chase & Co. and HSBC Holdings.

The LME’s project sought to move the trade onto an exchange comparable to the Comex in New York, providing more transparency over pricing. Initially it met with some success, but volumes dropped steeply after Societe Generale SA — one of the LME’s original partners — closed most of its commodity trading business in 2019.

The decision will come as little surprise to the market, given the contracts haven’t traded since 2020. But it’s a painful reminder of other issues facing the LME.


Zijin invests in Xanadu to ink copper-gold resources in Mongolia

Chinese miner Zijin Mining Group Co Ltd said on Wednesday that it would buy stake in Xanadu Mines Ltd with an eye toward obtaining its copper and gold resources in Mongolia.

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In a filing to the Shanghai Stock Exchange, Zijin said it signed an agreement with Xanadu Mines to acquire a 19.9% stake in the company at A$0.04 ($0.0296) per share, and 50% stake in Xanadu’s subsidiary Khuiten Metals Pte Ltd for $35 million.

Eventually, Zijin aims to take a 45.9% stake in Mongolia’s Kharmagtai copper and gold mine through Khuiten Metals’ 76.5% stake in the mine, the company said.

The Kharmagtai mine is estimated to hold 2.93 million tonnes of copper and 7.8 million ounces, or 243 tonnes of gold, according to Xanadu’s 2021 annual report.

“The company thinks the project has a large amount of resources and total investment is low,” Zijin said in the filing, noting that its expertise in developing low-grade resources will facilitate the investment.

Zijin currently runs overseas copper projects in Serbia and Democratic Republic of the Congo. It has gold mines in Colombia, Australia, Papua New Guinea and others.



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