August Newsletter – 17.08.2020
- How Cornish Lithium plans to produce lithium with a net-zero footprint
- Tianqi Lithium president leaves embattled Chinese firm
- Endeavour Mining considers London listing
- Shandong Gold calls on Canada to approve Arctic mine buy
- Codelco CEO sees copper price steady through 2020
- Bridgewater hedge fund boosts gold ETF investment to over $1 billion
- Vale to move forward with Serra Sul iron ore expansion
How Cornish Lithium plans to produce lithium with a net-zero footprint
Following the announcement of the UK government’s plans to invest in Geothermal Engineering and Cornish Lithium’s deep geothermal project in Cornwall, Jeremy Wrathall, CEO of the junior mining company, provided details on their plans to establish an optimal method of lithium extraction at the site.
“We will be collaborating with Geothermal Engineering to take water from their deep geothermal well and trial it through the pilot plant,” Wrathall told MINING.COM. “The pilot plant aims to extract lithium using Direct Lithium Extraction (DLE) technology which essentially sieves the lithium out of the water – leaving behind the water as it was before – but without the lithium content. This is then reinjected into the ground via boreholes.”
To selectively remove lithium compounds from the water, the plan is to use technologies such as nanofiltration rather than relying on evaporation and other less environmentally friendly methods.
Geothermal Engineering’s deep geothermal project in Cornwall.
According to Wrathall, this is the first plant of its kind in Europe and the goal is to demonstrate that lithium can be produced from geothermal waters with very minimal impacts in the surrounding ecosystems.
“The lithium will have a net-zero footprint as the power for the extraction plant will be generated using zero-carbon geothermal energy. The power plant will be on the same site as the extraction plant,” the executive said.
In Wrathall’s view, the development of this £4-million project is key as the United Kingdom has great ambitions in the electric vehicle arena and hence a captive supply of the necessary raw materials is necessary.
“If there is a possible supply of lithium on your doorstep, it makes total sense to try and develop it,” Cornish Lithium’s CEO said. “This will also increase the likelihood of the UK being able to attract the battery mega factories that will be needed to maintain the country’s auto industry. The Cornish economy has been especially hard hit by covid-19 and desperately needs new industries that supply year-round, well-paid jobs.”
Tianqi Lithium president leaves embattled Chinese firm
Expansion plans for the Kwinana plant in Western Australia have been put on hold due to Tianqi’s financial situation
China’s Tianqi Lithium Corp said its president Vivian Wu has left the company, as the indebted producer of a key commodity for electric-vehicle batteries looks for a way out of a perilous financial situation.
Wu, who had been with the Chengdu-based firm since 2011, submitted a written resignation to Tianqi’s board of directors on Wednesday, saying she was stepping down as president and director for personal reasons, according to a filing to the Shenzhen Stock Exchange dated Friday.
Tianqi founder and chairman Jiang Weiping will assume the duties of president until a new appointment is made, the statement said. Wu’s term was not due to expire until 2023.
TIANQI FOUNDER AND CHAIRMAN JIANG WEIPING WILL ASSUME THE DUTIES OF PRESIDENT UNTIL A NEW APPOINTMENT IS MADE
Her departure marks the end of a difficult two years for the executive, who was a key figure in Tianqi’s acquisition of nearly a quarter of Chilean lithium miner Sociedad Quimica y Minera de Chile SA (SQM) for $4.1 billion, announced in May 2018.
The high-profile purchase, described by Wu at the time as an “attractive investment” that would greatly benefit shareholders, has left Tianqi saddled with debt it is struggling to repay after a roughly 70% plunge in lithium carbonate prices since the deal was agreed, amid plentiful supply.
Tianqi has said it is considering asset sales and trying to renegotiate the terms of its loans, including a $3.5 billion syndicated facility led by China Citic Bank taken out for the SQM stake purchase.
The company last month removed senior vice president Ge Wei, while members of its Shanghai corporate communications team have also left.
Tianqi expects to stay in the red in the first half of 2020 after a 6 billion yuan ($860 million) net loss in 2019 but said on an investor platform this month it was seeing stronger orders in the second half and saw downstream demand improving.
Endeavour Mining considers London listing
The Ity mine in Côte d’Ivoire
Canada’s Endeavour Mining (TSX:EDV), West Africa’s top gold producer, is said to be considering whether to dual list in London or New York in the wake of its merger with smaller rival Semafo.
“We are going to move to one or the other,” Chief executive officer Sébastien de Montessus told FT.com. “We are currently assessing which is the most relevant and attractive given our portfolio and locations and also the fit in terms of governance and liquidity,” he noted.
Endeavour’s management team is already based in London, so favouring the listing in the UK wouldn’t come as a surprise.
The London exchange lost its top gold company last year, when Randgold Resources delisted after being acquired by Barrick Gold.
Endeavour saw its share price rise by more than 60% from March, when it announced it was acquiring Semafo, to early July, when the it completed the deal.
Among top dogs
With a market cap of C$5.3 billion (about $4bn), the miner would be amongst the most valuable precious metals companies currently listed on the LSE. These include Russian duo Polyus (LON: PLZL) and Polymetal International (LON: POLY), Mexico-focused Fresnillo (LON: FRES) and incoming Canadian Yamana Gold (LON: 0P6G), all of whom have a market value of more than $4.5bn.
Endeavour Mining confirmed last week it expected to produced more than one million ounces of gold this year.
After incorporating Semafo’s operations in its second-quarter financial and operating results, the company said it aims to churn out between 995,000 to 1,095,000 million ounces of the precious metal in 2020, at all-in-sustaining cost targets of between $865 to $915 per ounce.
Shandong Gold calls on Canada to approve Arctic mine buy
Shandong Gold Mining, one of China’s top bullion miners, said its acquisition of a Canadian junior that owns the massive Hope Bay property in Nunavut should be approved for economic reasons.
The Hope Bay property is located in Nunavut, Canada
The Chinese state-controlled miner signed in May a $149 million deal to buy struggling TMAC Resources (TSX: TMR). The company, which went public in 2015, had seen its shares fall from a peak of C$10.77 in 2018 to C$1.68 the day before Shandong’s bid and to C$1.49 on Thursday.
The gold giant offered TMAC C$1.75 a share in cash and committed to purchase another 12 million shares at the same price in a private placement for around $15 million.
CHINESE STATE-CONTROLLED MINER IS KEEN TO REVITALIZE HOPE BAY, WHICH HAS UNDERPERFORMED TO EXPECTATIONS
The Toronto-based miner’s shareholders approved the transaction in June, but it still requires the Canadian government to sign-off.
Shandong’s main objective is to add TAMC’s Hope Bay gold property in the Canadian Arctic, a region of growing strategic importance as climate change makes shipping lanes and resources more accessible.
Lawyers and security analysts have said the crucial location of the asset could prompt Ottawa to block the deal.
“The net benefit to Canada will be an international company focused on … continuing to drive and expand Canadian employment and the broader spend from Canadian suppliers,” Mark Wall, the newly appointed chief executive of Shandong’s unit Streamers Gold Mining Corp., told Reuters this week.
Streamers and Shandong Gold act together as one group in respect of the acquisition of TMAC Resources.
Liu Qin, director of Shandong Gold Mining, highlighted in a statement the ties between the company and Mark Wall.
“We have worked closely with Mr. Wall during our successful partnership with Barrick Gold and welcome him to lead our Canadian business,” he said. “His extensive background in the industry will serve us well in Nunavut, beginning with the development of an expansion feasibility study aimed at doubling the output at Hope Bay,” Qin noted.
Codelco CEO sees copper price steady through 2020
Codelco Chief Executive Officer Octavio Araneda said on Thursday he expects the copper price to hold at around $2.80 per pound through 2020.
Araneda, who has led Codelco through the coronavirus crisis in Chile, told reporters on a tour of the El Teniente mine that uncertainty still reigned.
The copper price “depends on what is happening in the world…but at the moment, that is the vision we have,” he said.
Codelco, the world’s top copper producer, has largely maintained production through the pandemic, churning out the red metal even as it reduced staffing and adjusted shifts to fight the spread of the virus.
Araneda said the number of coronavirus cases had dropped “significantly” at the company’s mines, but said the state-run miner planned to keep operating in similar conditions for at least “another year” while the world awaits a vaccine.
Bridgewater hedge fund boosts gold ETF investment to over $1 billion
Hedge fund Bridgewater Associates raised its investment in gold-backed exchange-traded funds by a third in the second quarter, buying the equivalent of 170,000 ounces of gold worth $340 million at current prices, a regulatory filing showed.
The move is part of a wider rush among investors to buy gold, which they hope will hold its value as the coronavirus crisis upends markets and pushes down returns on bonds.
Bullion prices have already surged almost 30% this year to record levels around $2,000 an ounce.
Exchange-traded funds (ETFs) store gold on investors’ behalf.
INVESTORS RUSH TO BUY GOLD, WHICH THEY HOPE WILL HOLD ITS VALUE AS THE CORONAVIRUS CRISIS UPENDS MARKETS AND PUSHES DOWN RETURNS ON BONDS
Bridgewater, led by billionaire Ray Dalio, bought 1.4 million shares in the SPDR Gold Shares ETF, equivalent to around 130,000 ounces of gold, in the April-June quarter, it said in the filing on Wednesday.
It also bought 4.1 million shares in the iShares Gold Trust representing around 41,000 ounces of gold.
Its investment in SPDR Gold Shares was worth $914 million on June 30, up from $601 million at the end of March, when it had just over 4 million shares in the fund.
Vale to move forward with Serra Sul iron ore expansion
Brazil’s Vale (NYSE:VALE) has received board approval for a long-sought expansion of the already massive S11D iron ore mine, in the northern state of Pará.
The $1.5 billion Serra Sul 120 project aims to increase the S11D mine-plant capacity by 20 million tonnes to 120 million tonnes of iron ore a year. Once completed, it will increase output at Vale’s North System to 260 million tonnes a year.
THE SERRA SUL 120 PROJECT WILL INCREASE S11D MINE-PLANT CAPACITY BY 20MTPA
The Rio de Janeiro-based mining giant said completion of Serra Sul 120 is expected in the first half of 2024.
The project includes the opening of new mining areas, the duplication of the long-distance belt conveyor (TCLD), which will require a $385 million investment. It also involves implementing new processing lines at the plant and expanding storage areas, Vale said.
Vale noted that bringing forward the multi-year project and the ongoing impact from the coronavirus pandemic means the company will have to revise guidance on investments for 2021 and the 2022-2024 period.
Accidents and pandemic
Vale is still reeling from a tailings dam collapse at one of its mines that killed 270 people last year.
The disaster forced the company to suspend operations and curtail production at several of its mines. The iron ore producer originally estimated it would take two to three years to reach the annual output target of 400 million tonnes it had originally set for 2019.