August Newsletter – 01.08.2022

  • Rio Tinto inks deal to unlock huge Simandou iron ore project
  • Iron ore price retreats as China’s zero-covid policy clouds demand
  • Canada races ahead of US on current lithium project pipeline
  • US coal giants see surging sales as global prices reach records
  • ArcelorMittal to buy Brazil steelmaker CSP for $2.2 billion
  • Common table sugar key to improving aqueous zinc batteries’ safety features
  • Kazakhstan To Slash Coal Exports Ahead Of Winter

Rio Tinto inks deal to unlock huge Simandou iron ore project

Simandou holds over two billion tonnes of iron ore reserves and some of the highest grades in the industry.

Rio Tinto Group said it’s formed a joint venture with the Guinea government and Winning Consortium Simandou to develop infrastructure including a railway and port in a breakthrough that should help unlock the world’s biggest untapped iron ore deposit.

“The parties will now work on next steps including shareholding agreement, finalizing cost estimates and funding, and securing all necessary approvals and other permits and agreements required to progress the co-development of infrastructures,” Rio said in a statement.

Getting the massive Simandou project under development would be a second major win for Rio’s Chief Executive Officer Jakob Stausholm, after striking a deal with Mongolia earlier this year on Rio’s flagship copper project. Since taking the helm just over a year ago, the CEO has prioritized getting stalled projects moving, while rebuilding the company’s reputation after a series of missteps.

The latest agreement hands Guinea’s government a 15% “free-carry” stake in the infrastructure joint-venture, meaning Rio and Winning will bear construction costs. Efforts to develop Simandou have been stymied for years by a litany of disputes over ownership and infrastructure, and by political changes in Guinea.

Iron ore price retreats as China’s zero-covid policy clouds demand

The iron ore price retreated on Friday as China indicated controlling covid-19 outbreaks is still a priority.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $115 a tonne Friday morning, down 3.5%.

On China’s Dalian Commodity Exchange, September iron ore ended daytime trade 1.8% higher at 782 yuan ($116.11) a tonne, off Thursday’s four-week peak of 798.50 yuan.


“It appears to us that any change in the zero-covid policy will only happen when authorities are convinced that mutations are less virulent and vaccines/medicines are proven to be more effective. Both are unlikely to happen in the near term,” ANZ analysts said in a note.

Investors had been optimistic that more aid was on its way to revive construction projects stalled by a wave of repayment boycotts from homebuyers, but none was forthcoming during a key Politburo meeting.

Canada races ahead of US on current lithium project pipeline

Lithium salt extraction area at the world’s biggest salt plain Salar de Uyuni, Bolivia.

Canada’s lithium supply response is expected to post strong growth through 2031 and outperform the US, a new analysis by Fitch Solutions Country Risk & Industry Research suggests.

Canada’s current solid project pipeline, prospective investments into petroleum brine production techniques in Alberta, and a fast-growing battery and electric vehicle (EV) manufacturing base in Quebec and Ontario provide more significant upside in the medium-term due to Canada’s more attractive regulatory environment, the authors say.

Mine permitting times are shorter compared with the U.S., and the current government, led by Prime Minister Justin Trudeau, has proposed C$3.8 billion in spending in April to support the mining sector. This includes the creation of infrastructure for remote projects, of which C$1.6 billion were dedicated to critical minerals projects.

Critical Elements Lithium’s (TSXV: CRE) Rose project, Sayona Mining’s (ASX: SYA) Authier project, and Sayona and Piedmont Lithium’s (Nasdaq: PLL; ASX: PLL) jointly owned La Corne mine  — all in Quebec — are expected to begin production in 2023. The three projects are expected to add over 50,000 tonnes of lithium carbonate equivalent (LCE) production. La Corne targets a total production capacity of 265,000 tonnes per year in the longer term, assuming its planned expansions are authorized and financed.

US coal giants see surging sales as global prices reach records

The biggest US coal miners are seeing soaring revenues as global demand for the dirtiest fossil fuel drives prices to record highs.

Peabody Energy Corp., the biggest US coal producer, saw second-quarter sales jump 83% to $1.32 billion, the most since 2018, the company said in a Thursday statement. Arch Resources Inc. reported revenue of $1.13 billion, more than double the total from a year earlier and the most since 2011.

The results come a day after US lawmakers announced a breakthrough spending deal that includes $370 billion to fight climate change, but also calls for increased lease sales on federal land for oil and gas drilling. Senator Joe Manchin, a democrat from coal-heavy West Virginia, had been a holdout in the protracted negotiations.

Peabody shares rose 4% at 9:38 a.m. in New York. Arch Resources fell 5.2% after reducing guidance on 2022 sales volume.

Peabody said the gains in the quarter were “due to higher realized prices in every segment.” US miners are facing strong domestic demand and increasing exports, with revenue bolstered by prices that have reached record highs in the US, Europe and Asia.

A global energy crisis has boosted demand for fossil fuels around the world, driving up prices. Costly natural gas has spurred demand for coal, but limited supplies have meant surging prices. The trend that started almost a year ago got a huge boost after the war in Ukraine started in February, prompting nations to ban imports of Russian coal and further increasing demand from suppliers including Peabody and Arch.

ArcelorMittal to buy Brazil steelmaker CSP for $2.2 billion

ArcelorMittal (NYSE: MT) has agreed to buy Brazilian steelmaker Companhia Siderurgica do Pecem (CSP) from Vale (NYSE: VALE) and South Korea’s Dongkuk and Posco for $2.2 billion.

The deal gives ArcelorMittal, itself created through one of steel industry’s biggest ever takeovers, CSP’s installed capacity of 3 million tonnes a year of steel slabs.

Analysts backed the transaction, with Bloomberg Intelligence metals analyst Grant Sporre saying the price ArcelorMittal will pay was “very competitive”. He added that the build cost of “such a cost-competitive” facility would likely be higher than the $2.2 billion acquisition price.

The market didn’t seem to agree, as shares in ArcelorMittal, the world’s second-largest steelmaker, fell 1.7% in early trading in New York to $23.14 a piece. They recovered slightly mid-afternoon at $23.50 each.

“In CSP, we are acquiring a modern, efficient, established and profitable business which further enhances our position in Brazil and adds immediate value to ArcelorMittal,” the steelmaker’s chief executive, Aditya Mittal, said in the statement.

He noted the buy will Allow for further expansions, such as the option to add primary steelmaking capacity (including direct reduced iron) and rolling and finishing capacity.

Founded in 2008, CSP is located in the northeastern Brazilian state of Ceará. It began operations in 2016 and required an investment of $5.4 billion.

Common table sugar key to improving aqueous zinc batteries’ safety features

Researchers at Tsinghua University are proposing the idea of chemically modifying common table sugar to stabilize the zinc-ion environment in aqueous zinc batteries and improve the devices’ safety features.

In a paper published in the journal Nano Research, the scientists say aqueous zinc batteries are cost-effective compared to current lithium-ion batteries and even safer, as they don’t require flammable organic electrolytes. In addition to this, Zn anodes have a high theoretical capacity, which makes these batteries even more promising for applications like future grid energy storage.

The issue with zinc batteries so far is that when the zinc ion (Zn2+) concentration on the surface of the anode drops to zero, dendrites start growing. Uncontrolled Zn dendrite growth deteriorates the electrochemical performance and poses a serious threat to safe operation.

“These dendrites can penetrate the separator and cause the battery to short-circuit,” study co-author Meinan Liu said in a media statement.

According to Liu, past studies have shown that adjusting the solvent environment -called ‘solvation structure’- can increase the mobility of Zn2+ in response to the electric field and successfully suppresses the growth of dendrites. The problem was that these previous adjustments—like introducing other salts or including fewer water molecules—ended up decreasing the ionic conductivity of the system as well.

“There was a fundamental understanding gap between Zn2+ solvation structure and its mobility,” the researcher said. “This was a key factor affecting the dendrite growth and stability of Zn anode.”

Kazakhstan To Slash Coal Exports Ahead Of Winter

  • Last year, Kazakhstan faced a massive coal shortage as demand outpaced supply.
  • In order to prevent another shortage, the Central Asian country is planning to cut coal exports via road transportation.
  • Analysts and officials blamed traders for exploiting the situation, suggesting they were hoarding coal and waiting on prices to rise.

Kazakhstan plans to ban the export of coal via road transportation for six months to avoid a repeat occurrence of the rush-buying-provoked shortage during last year’s heating season. The Industry and Infrastructure Development Ministry has said in a decree that the ban on taking coal out of the country in trucks and cars will begin on August 1. Other forms of fuel used for heating homes, such as briquettes and pellets, are also covered by the ban.

In introducing the ban, the ministry specifically harked back to events in September, when a sharp unseasonal cooling in temperatures sparked a sudden spike in demands for coal and caused a deficit.

“Unscrupulous traders exploited this situation during the peak period of coal purchases and ‘topped up’ their prices. They bought at 13,000 tenge ($27) per ton and resold at up to 30,000 tenge per ton. That had a negative impact on the population,” an explanatory note attached to the decree read.

The cold conditions of September drove many to desperate acts. People waited in line for hours on end in the hope of getting enough supplies to keep their families warm. In October, a local resident in the eastern city of Oskemen threatened to set himself on fire after failing to buy any coal for days on end. Two weeks later, again in the same city, a man attempted to ram-raid the gates of a coal sale depot. 

It remains to be seen whether the export restriction will be enough to avoid a repeat though, since there is no consensus on what caused the problem in the first place.

India Wants to Open Up For Lithium Mining in Batteries Quest

  • Government is seeking to change current mining laws: people
  • Nation aiming to add more self-sufficiency in clean energy

India is seeking to change laws to allow private miners to extract lithium, the key ingredient for batteries used for electric vehicles and energy storage, as the nation aims to be more self-sufficient in green technologies.

Prime Minister Narendra Modi’s government wants lawmakers’ approval for amendments to existing policies in the current session of parliament, according to people familiar with the plans. Eight minerals, including lithium, beryllium and zirconium will be removed from a restricted list that currently prohibits production by private companies.

The changes would allow the government to auction permits to exploit lithium reserves, the people said, asking not to be named as the matter is not yet public. They are also aimed at reducing India’s dependence on imports for some key minerals, and to put the country in a better position to compete in the lucrative battery supply chain, according to the people.

A mines ministry spokesperson didn’t immediately respond to a request for comment.


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