April Newsletter – 30.04.2021


  • Newmont shares drop on covid-19 hits in South America, Canada
  • Polyus becomes world’s largest gold miner by reserves
  • After Default, Zambia’s Outsized Bet on Copper Could Play Into China’s Hands
  • Breaking China’s Stranglehold on the Rare Earth Elements Supply Chain
  • Shut U.S. coal plants seen as potential sites for small reactors
  • Deep-sea mining robot lost on cobalt-rich floor of Pacific
  • Fortuna Silver to buy Roxgold in $884 million deal
  • Australian state commission approves extension of Glencore’s Mangoola coal mine

Newmont shares drop on covid-19 hits in South America, Canada

Top gold producer Newmont on Thursday warned of more hits to its South American operations due to the COVID-19 pandemic, which also prompted it to suspend activity at a Canadian mine, sending its shares down nearly 5%.

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Argentina’s Cerro Negro mine first gold pour.

The S&P 500-listed miner, worth $49 billion in New York, said it expects impacts to continue at its mines in Argentina and Peru, countries currently grappling with a second wave of the pandemic, until they begin mass coronavirus vaccinations.

Newmont said it had also paused operations for five days in April at its Musselwhite mine in Canada’s Ontario province, which has emerged as a covid-19 hotspot after reporting 3,480 new cases and 24 deaths on Wednesday.

The miner, which idled operations across all these regions due to pandemic-led curbs in 2020, said 12 of its employees had died as a result of the coronavirus over the last year.


Polyus becomes world’s largest gold miner by reserves

Russia’s largest gold producer Polyus on Thursday said that its total proved and probable ore reserves had risen by 71% to 104 million ounces of gold at the end of 2020 due to inclusion of reserves at its giant Sukhoi Log deposit.

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Sukhoi Log is the world’s largest gold deposit among both greenfield and developed mines

“Polyus is now confirmed to have the largest reserve base globally, with approximately 97% of these reserves attributable to our operating mines and our flagship greenfield project, Sukhoi Log,” Polyus CEO Pavel Grachev said in a statement.

Polyus was previously the world’s third-largest gold miner by reserves behind Newmont and Barrick.

The Russian gold producer plans to take a final investment decision on the Sukhoi Log project in Siberia in 2022.

The company’s measured, indicated and inferred mineral resources were estimated at 204 million ounces of gold at the end of December, compared with 188 million ounces at Dec. 31, 2019, it added.


After Default, Zambia’s Outsized Bet on Copper Could Play Into China’s Hands

Zambia takes on $1.5 billion debt to acquire loss-making mine, raising fears it could ultimately hand strategic asset to top creditor, China

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Copper mines play a major role in Zambia’s economy, with the metal accounting for two-thirds of its export revenue

Zambia, which defaulted on payments to bondholders in November, is doubling down on debt with a high-stakes bet that nationalizing one of its biggest copper mines will help rescue its flailing economy.

Once seen as among the most investment-friendly countries in the region, the landlocked nation in south central Africa is the most extreme example of a wave of populist governments in mining-dependent countries that are struggling to pay the bills after borrowing for infrastructure in recent years. Zambia was the first country on the continent to register a pandemic-era default on a sovereign debt payment late last year when it missed a $42.5 million interest payment on some of its $3 billion of dollar-denominated bonds.

The country has some $12 billion in external debt, including $3 billion in international bonds and large loans from Chinese state-owned lenders. The government hasn’t said exactly how much it owes to Chinese lenders as a whole. Johns Hopkins University’s China-Africa Research Initiative estimates that Zambia has signed some $9.9 billion in loans from China, although not all of that money has been drawn.

But in January, Zambia’s state-owned mining company took on $1.5 billion in debt to take over a Glencore PLC copper mine, Mopani Copper Mines PLC, the latest in a string of moves that has remade the country into an exemplar of resource nationalism.


Breaking China’s Stranglehold on the Rare Earth Elements Supply Chain

Japan and the United States are dependent on a potential adversary for some of the most crucial materials in high technology production: rare earth elements. Rare earths are 17 elements that include: scandium, yttrium, lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium.

These elements are important in producing cell telephones, computer hard drives, and medical imaging equipment, electric vehicle motors, missile and aircraft guidance and control systems, optics, radar, guided weapons, and telecommunications.

In China, control of rare earth materials is considered a major element of national policy. Japan and the U.S., however, took the route of depending on China for these elements.

The People’s Republic of China (PRC) will use these metals for political gain, as we learned in 2010. After a Chinese fishing boat collided with two Japanese coast guard vessels near the Senkaku Islands, China imposed an embargo on rare earth materials to Japan because the Chinese boat captain had been detained.


Shut U.S. coal plants seen as potential sites for small reactors

Recently shut U.S. coal-fired power plants could serve as sites for a new generation of small nuclear reactors, the head of the nation’s largest public power utility and a U.S. senator from West Virginia said on Wednesday.

Hundreds of coal plants have been shutting due to competition from cheap natural gas and falling costs for renewable power, resulting in massive job losses in communities that depend on mining and power generation. Since 2010 more than 250 U.S. coal-fired power plants have shut.

“I see those sites as very viable small modular reactor (SMR) sites,” Jeff Lyash, president and chief executive of the Tennessee Valley Authority, or TVA, said during a virtual Atlantic Council event.

TVA first started using coal-fired plants in the 1950s, but has begun to retire older, less efficient units in keeping with its commitment to generate cleaner energy. It has three traditional nuclear reactors.


Deep-sea mining robot lost on cobalt-rich floor of Pacific

A deep-sea mining robot on test mission to bring up rocks rich in cobalt and nickel from the floor of the Pacific Ocean has malfunctioned.

Controversial plans to mine the ocean floor face a key test this year when a United Nations body unveils rules that could spur the exploitation of hundreds of billions of dollars of battery metals. Environmentalists say that would endanger fragile marine ecosystems, while the industry argues that extracting metals needed for the green-energy transition would cause less damage than terrestrial mining.

Global Sea Mineral Resources, a unit of Belgium’s DEME Group, brought up its first minerals from the ocean floor on April 20. It’s one of the companies, including DeepGreen Metals Inc., Lockheed Martin Corp. and China Minmetals Corp., spearheading moves to exploit seabed metals needed by electric vehicles.

“Patania II now stands on the sea floor,” GSR said in a statement on Wednesday, referring to the name of its mining device. Salvage operations will begin later today after a pump needed to lift the robot failed.

The GSR robot had been operating at a depth of 4.5 kilometers (2.8 miles) in the Clarion-Clipperton Zone: an expanse of ocean between Hawaii and Mexico that’s as big as the continental U.S. Its seabed is littered with billions of tons of manganese nodules — fist-sized rocks formed over thousands of years, which are filled with nickel and cobalt needed for lithium-ion batteries.


Fortuna Silver to buy Roxgold in $884 million deal

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Lindero mine in Argentina is Fortuna Silver’s newest operation.

Canada’s Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) is buying fellow miner Roxgold (TSX: ROXG) in a deal valued at about C$1 billion ($884.32 million), as strong gold prices spur a wave of mergers and acquisitions in the sector.

Vancouver-based Fortuna, which has operations in Peru, Mexico and Argentina, said the combined company would produce about 450,000 ounces of gold equivalent a year.

West-Africa focused Roxgold’s shareholders will receive 0.283 common shares of Fortuna and C$0.001 for each Roxgold common share held.

The exchange ratio implies a consideration of about C$2.73 per Roxgold share, a 42.1% premium to its last closing price.


Australian state commission approves extension of Glencore’s Mangoola coal mine

(Reuters) – An Australian state planning commission on Monday approved an extension to Glencore Plc’s Mangoola coal mine in the Upper Hunter Valley of New South Wales.

The commission’s decision comes ahead of a byelection on May 22 for the Upper Hunter seat in the New South Wales state parliament, in which the future of coal mining in the region is likely to be a key issue.

The project has been opposed due to concerns about air quality, biodiversity, greenhouse gas emissions, impacts on water resources and Aboriginal cultural heritage, among others.



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