August Newsletter – 03.08.2020
- Fortuna Silver Mines’ subsidiary cleared from responsibility following accusations of water contamination in Mexico
- Russian billionaire Abramovich sells out in $1.4bn gold deal
- Explosion at coal mine in Colombia kills nine
- Proactive weekly mining highlights: AEX Gold, Highland Gold, Glencore …
- Hong Kong wants a massive new island, but where will it get the sand?
- Rio Tinto to advance mining automation skills
- US finds its Chinese rare earth dependency hard to break
Fortuna Silver Mines’ subsidiary cleared from responsibility following accusations of water contamination in Mexico
Mexico’s Federal Attorney for Environmental Protection issued a report stating that the subsidiary of Canada’s Fortuna Silver Mines (NYSE: FSM), Compañía Minera Cuzcatlán, hasn’t caused any pollution to rainwater collection ponds in the Magdalena Ocotlán municipality in the southern Oaxaca state.
One of the rainwater collection ponds in Magdalena Ocotlán
The government agency reached its conclusion after inspecting Fortuna Silver Mines’ San José silver-gold mine, which is located some 400 metres from the ponds. Officials also inspected the ponds and ran lab tests on water samples.
The procedure was requested by some community members and activists from the “Front No to Mining for a Future for All,” who accused the mining company of releasing wastewater into the wells and endangering the local ecosystem and people’s health.
THE INSPECTION WAS REQUESTED BY ACTIVISTS FROM THE “FRONT NO TO MINING FOR A FUTURE FOR ALL,” WHO ACCUSED THE MINING COMPANY OF RELEASING WASTEWATER INTO THE WELLS
In inspection minute No. PFPA/26.2/2C.27.1/0011-20, the Federal Attorney for Environmental Protection – known as Profepa in Spanish – states that in 2020, “there haven’t been any accidental spill, filtrations, releases or leaks of dangerous materials or residues that could have an impact on the areas surrounding the mining operation. After looking at the beneficiation plant, which is operational, we couldn’t see any release or leakage of mine tailings onto the ground.”
The inspection focused on the beneficiation plant at San José, which employs a flotation process, and the tailings dam and deposit, both located in a different aquifer basin from those of the wells.
In a media statement, Compañía Minera Cuzcatlán said that the community should be reminded that tailings at the operation are inert and are classified by the environmental authorities as non-toxic.
The miner also said that its processes are designed to generate zero water discharges and reuse 96% of the water, with the remaining 4% lost to evaporation. On top of this, the main source of water for the mining company comes from the Ocotlán de Morelos Wastewater Treatment Plant that Minera Cuzcatlán manages and maintains through a loan agreement with the Ocotlán City Council.
Russian billionaire Abramovich sells out in $1.4bn gold deal
Russian billionaire Roman Abramovich is selling his stake in local mid-sized gold miner Highland Gold (LON: HGM), the latest in a series of mining deals involving the precious metal, which is trading at record highs.
Abramovich and other investors holding 40.06% of the Russia-focused gold miner have agreed to sell their shares to Fortiana Holdings Limited in a deal that values Highland at about $1.4 billion.
Fortiana, a Cyprus-registered company of Russian businessman Vladislav Sviblov, will make an offer to the rest of Highland’s shareholders at the same price of 3-pounds-per-share ($3.94), a 3.8% premium to Thursday’s closing price.
ABRAMOVICH AND OTHER INVESTORS ARE SELLING THEIR 40.06% STAKE IN HIGHLAND GOLD
Highland Gold is one of Russia’s top 10 gold producers, operating several mines in the country’s Far East.
The agreement follows Fortiana’s sale last month of about 5% in another Russian gold miner, Petropavlovsk. Selling that interest gave the company cash to pursue other investment opportunities, it said at the time.
Spot gold has climbed about 29% this year on the back mixed factors, including safe-haven demand, a weakening US dollar, negative real yields and a flood of monetary and fiscal stimulus.
Even with the likelihood of gold price volatility in the near term, investment demand should hold up over a longer time period, the World Gold Council said Thursday.
Abramovich sold last year a stake in Nornickel, Russia’s biggest mining company. The deal was the largest share sale by a Russian company since Magnit PJSC’s accelerated bookbuild offering in November 2017.
Fortiana’s acquisition of a stake in Highland Gold is expected to close in the fourth quarter of 2020.
Explosion at coal mine in Colombia kills nine
The bodies of nine miners have been recovered from a coal mine in Colombia where an explosion took place on July 31, 2020.
According to the National Mining Agency, the blast at the Los Cedros mine in the El Zulia municipality of the Norte de Santander department was caused by the accumulation of gases in the pit.
Three engineers and two mechanics from the Agency together with a mine rescue team of 12 people worked around the clock since Friday to release the accumulated gasses and drain a water well. This allowed them to retrieve the bodies.
According to the mining body, the underground operation was not fully licensed. Thus, the National Prosecutor’s Office will start an investigation.
Proactive weekly mining highlights: AEX Gold, Highland Gold, Glencore …
AEX Gold Inc. (LON:AEXG) (CVE:AEX) saw its shares commence trading on the AIM market of the London Stock Exchange on Friday under the ticker AEXG.
Thor Mining PLC (LON:THR) (ASX:THR) firm revealed that there is visible gold from sample panning of the second phase of gold, nickel, and chromium geochemical sampling at the 100%-owned Pilbara Goldfield tenements in Western Australia.
Highland Gold Mining Limited (LON:HGM) has agreed to a takeover offer from Fortiana Holdings Limited that values the group at just over £1bn or 300p per share.
Glencore PLC (LON:GLEN) has set lower full-year guidance for the production of nickel and coal, though most of its project have continued to operate throughout the quarter to June.
European Metals Holdings Limited (LON:EMH) (ASX:EMH) highlighted “continued progress” at its Cinovec lithium and tin project in Czechia.
NQ Minerals PLC (AQSE:NQMI) reported that in the first quarter of 2020 it produced 8,127 tonnes of lead concentrate, up from 4,712 a year ago, while zinc concentrate rose to 4,609 tonnes from 3,015.
Metal Tiger PLC (LON:MTR) said Southern Gold, in which it owns a 17.1% stake, has drilled 720.46 metres (m) of at the Aphae project, while drilling of a fourth hole has now commenced at the Deokon project.
Pan African Resources plc (LON:PAF) the South Africa-based gold miner said the feasibility study for its Egoli underground mine suggests that a gold price of US$1,650 per oz, the project can generate US$131mln from a nine-year life.
Berkeley Energia Limited (LON:BKY) believes uranium market conditions could tighten, heightening concerns about future supply and potentially pushing up the price of the element.
Anglo American PLC’s (LON:AAL) interim dividend halved as earnings tumbled after a challenging half-year. Underlying earnings (EBITDA) dropped 39% to US$3.3bn.
IronRidge Resources Ltd (LON:IRR) told investors it has had further high-grade results and defined significant targets at the Ehuasso area of the Zaranou gold project in Côte d’Ivoire.
Oriole Resources PLC (LON:ORR) has struck a deal to sell its legacy royalties in Turkey to its partner Bati Toroslar for US$250,000.
Ariana Resources PLC (LON:AAU), the Turkey-focused gold group, announced a 50% increase in the size of the resource at its Salinbas project to 1.5mln ounces (Moz).
Arkle Resources PLC (LON:ARK) chief executive Patrick Cullen stepped down with John Teeling temporarily taking over alongside his role as non-executive chairman.
Rio Tinto PLC (LON:RIO) increased its half-year dividend in a show of strength despite revenue and profits shrinking.
Sunrise Resources PLC (LON:SRES) has received a mine permit for the CS perlite-pozzolan project in Nevada, USA.
Savannah Resources PLC’s (LON:SAV) Mina do Barroso lithium project could contribute nearly €1.2bn to the gross output of Portugal, according to a new report.
Hong Kong wants a massive new island, but where will it get the sand?
Carrie Lam’s plan to fix area’s housing crisis risks calamitous environmental damage
Residential flats on Lantau Island, pictured on Jan. 15: Lantau Tomorrow is a plan to build 17 sq. kilometers of artificial land with housing for up to one million people in the ocean waters off of the island
Plagued by a shortage of land on which to house its swelling population, Hong Kong has come up with a simple-sounding solution: make more! That’s the central idea behind “Lantau Tomorrow,” a plan to build 1,700 hectares (17 sq. kilometers) of artificial land with housing for up to one million people in the ocean waters off of Lantau.
The project’s multibillion-dollar price tag and its potential impact on local residents and the environment have sparked plenty of controversy. Much less attention is being paid to the crucial question of where and how to obtain the project’s most vital component: sand.
Trivial though it seems, sand is actually the most important solid substance on Earth. We humans consume 50 billion tonnes of this natural resource every year — more than any other except water. It is the main ingredient in the concrete and glass that our cities are made of, and the silicon chips that our computers and cellphones run on. And it is the go-to raw material for building artificial land, a practice that is surging all around the world.
In recent years, advancing technology has enormously increased our power to “reclaim” land by dredging titanic volumes of sand and silt from the ocean floor to create new land where there was no land before.
For coastal megalopolises long on population but short on physical space, land reclamation offers an easy way to make room and profits. Dubai’s famous palm-tree shaped “islands” are the most famous example, but cities from Lagos to Copenhagen to Singapore are similarly expanding their physical footprints. All told, according to the Dutch research group Deltares, since 1985 human beings have added 5,237 sq. miles (13,563 sq. kilometers) of artificial land to the world’s coasts — an area about as big as Jamaica.
China is a major contributor to that total. From 2006 to 2010, cities on China’s coast built an average of 700 sq. kilometers of new land each year. In 2010 alone China created the equivalent of two Manhattans worth of new real estate. Hong Kong has a long history of land reclamation. The international airport, the local Disneyland, and the 34-mile bridge connecting Hong Kong to the mainland all sit on human-made land. In fact, some 6% of Hong Kong’s total area, housing one-quarter of the population, was reclaimed from the sea.
Development Secretary Michael Wong Wai-lun has claimed that locally sourced construction waste will provide “a considerable percentage of the amount of fill” for the Lantau land. That seems unlikely, given that Hong Kong produces only enough construction waste each year to reclaim about 60 hectares (0.6 sq. kilometers). Sand dredged from the ocean will have to provide most of the rest. All told, the Lantau project will require an estimated 260 million cubic meters of material.
Sucking that much sand from the ocean floor can inflict calamitous damage on the environment. First off, the habitat of whatever marine life was living down there will be annihilated. The stirred-up sediment also clouds the surrounding water, which can suffocate fish, crustaceans, and other creatures, and block sunlight from reaching plants below the surface. All of which can affect people, too. Fishers and environmentalists in Indonesia are currently trying to shut down a sea-sand mining operation they fear will wipe out local fish stocks.
Rio Tinto to advance mining automation skills
Rio Tinto has pledged almost $60 million to accelerate the development of automation skills in Western Australia’s mining workforce.
Automation qualifications are considered “critical skills” by Rio Tinto, as the mining industry expands its adoption of advanced technologies.
The mining giant will pledge $2 million towards funding the state’s automation courses, which it had helped develop last year — as part of the first nationally recognised automation qualifications.
Western Australia Education and Training Minister Sue Ellery said the state’s automation courses had emerged from last year’s resource industry collaboration between the state government, South Metropolitan TAFE and Rio Tinto.
“These courses are the first of their kind in Australia and I am pleased to see Rio Tinto partnering with BHP Mitsubishi Alliance, Queensland TAFE and CQ University to expand the program into Queensland,” Ellery said.
“WA’s cutting-edge automation courses have captured the imagination of industry and are a great example of industry working in partnership with TAFE to ensure people have the skills for the new jobs that are being created through technological innovation.”
The mining company is set to recruit 150 people in 2021, which will include graduates, apprentices, trainees and vacation students in Western Australia.
Rio Tinto Vice President Human Resources – iron ore Scott Brown said the company hopesd these changes would lead to positive change for many Australians.
“Australian industry is a global leader in innovation, made possible by the ingenuity, skill, diversity and capability of the people that make up its workforce,” he said.
US finds its Chinese rare earth dependency hard to break
The US Department of Defense has just committed funding for two rare earth separation plants on US soil.
It’s one small step towards the Trump administration’s stated goal of breaking the country’s dependence on Chinese supplies of critical minerals.
But the direct involvement of the Pentagon underlines the scale of the task associated with creating from scratch a non-Chinese rare earths supply chain.
WHAT’S CURRENTLY MINED IN US GETS SHIPPED TO CHINA TO BE UPGRADED INTO COMPOUNDS AND PRODUCTS WHICH ARE THEN SHIPPED BACK
The United States was almost totally dependent on imports of rare earth compounds and metals last year, just as it was the year before and the year before that. China remained the largest supplier to the tune of around 80% of all imports, according to the United States Geological Survey (USGS).
That reliance on China for minerals with critical uses across a wide spectrum of civilian and military applications is becoming ever more problematic as Sino-U.S. relations deteriorate.
However, to break it, as the United States is finding out, requires a mix of direct government support, alliances with like-minded countries, and a long-term focus on the six-stage process chain from ore to rare earth magnet.
Linking the chain
The United States now produces rare earths at the reopened Mountain Pass mine in California, bought out of bankruptcy in 2017 by MP Materials, an investment vehicle backed by U.S. funds JHL Capital Group and QVT Financial.
The mine produced 26,000 tonnes of light rare earth oxide in concentrate form last year, accounting for 12% of global production, according to the USGS.
China’s dominance of the first-stage of the global rare earths chain is weakening, partly due to the return of Mountain Pass and partly due to a displacement of highly-polluting heavy rare earths mining from China to Myanmar, which last year produced 22,000 tonnes of concentrate.
However, China’s control of global processing capacity is almost total, with the exception of Australia’s Lynas Corp which operates a separation plant in Malaysia.
What’s currently mined at Mountain Pass gets shipped to China to be upgraded into compounds and products which are then shipped back to the United States.
MP Materials is one of the three companies chosen to receive direct government funding for a separation plant, albeit only after a review into its Chinese shareholder, Shenghe Resources.