August Newsletter – 23.08.2021


  • Tianqi, IGO produce first Australian lithium hydroxide for batteries
  • Water scarcity is starting to bite in biggest copper supplier
  • Zambian mines look to new leader to unlock $2 billion investment
  • Analysis: Workers at Chile’s Escondida mine hit jackpot, raise bar in labor talks elsewhere
  • Resource nationalism sweeps Latin America’s top mining countries
  • China Won’t Have Much Time to Enjoy America’s Misfortune
  • The Taliban are sitting on $1 trillion worth of minerals the world desperately needs

Tianqi, IGO produce first Australian lithium hydroxide for batteries

A joint venture between Tianqi Lithium and IGO Ltd has produced Australia’s first batch of lithium hydroxide, as demand for the chemical used in electric-vehicle (EV) batteries is set to gain speed, IGO said on Monday.

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Once in full production, Kwinana will be the largest lithium hydroxide-producing operation and the biggest spodumene converter in the world

IGO gave debt-laden Tianqi a lifeline late last year when it agreed to pay $1.4 billion for a stake in the Chinese company’s Australian lithium assets, namely the Kwinana processing plant and the world’s biggest lithium mine, Greenbushes, both in Western Australia.

Tianqi had postponed commissioning of the Kwinana hydroxide plant in March 2020, citing liquidity problems, after a precipitous fall in lithium prices blamed on oversupply. Lithium prices are up sharply in 2021 on resurgent demand.

“We first ran some spodumene through the calcination oven and then through all of the various steps. That culminated … in getting some lithium product out of the last step to produce the first lithium hydroxide,” Chief Executive Peter Bradford told Reuters on Friday. Spodumene is the name for hard-rock lithium.

Water scarcity is starting to bite in biggest copper supplier

Water shortages are starting to threaten copper production in a country that accounts for more than a quarter of global supply.

In Chile this week, a BHP Group mine was ordered to halt groundwater pumping for three months, while Antofagasta Plc warned it will produce less than expected this year amid water supply constraints.

While BHP’s Cerro Colorado is a small operation coming to the end of its life and Antofagasta’s guidance cut isn’t huge, the disruptions underscore the challenges of running mines in one of the world’s driest deserts. Copper mines have been pumping water out from aquifers under the soil for decades, often to the detriment of local communities.

The issue has risen to prominence recently as the desert expands south amid a decade-long drought, potentially exacerbated by global warming. The industry has responded by stepping up efforts to switch to seawater, which is expected to account for almost half of its total water consumption by 2031.

Zambian mines look to new leader to unlock $2 billion investment

Copper producers are ready to start expansion projects worth $2 billion in Zambia next year if the industry can reach an agreement on royalties with President-elect Hakainde Hichilema’s new administration.

Companies including First Quantum Minerals Ltd. and EMR Capital are ready to raise funding for the projects, while other producers need to spend “hundreds of millions on dollars” in capital that they’d held back  since 2019 because of tax changes that deterred investment, the Zambia Chamber of Mines said.

Despite the southern African nation’s copper production edging higher to a record last year, output has largely stagnated over the past decade because of the industry’s hostile relationship with outgoing President Edgar Lungu’s government. In 2010, Zambia produced nearly twice as much of the metal as the Democratic Republic of the Congo to the north. By last year, Zambia’s output was almost half that of the DRC’s, limiting the benefit of record prices.

“The president-elect has reset the tone to one of rebuilding confidence and spurring growth,” Chamber of Mines President Godwin Beene said in response to emailed questions Thursday. “The industry is very positive that with this common-goal approach to the way forward, there will be more of a partnership with government than we have ever seen before.”

Analysis: Workers at Chile’s Escondida mine hit jackpot, raise bar in labor talks elsewhere

SANTIAGO, Aug 18 (Reuters) – An historic benefits package at BHP’s (BHP.AX) sprawling Escondida copper mine has raised the prospect for tough new negotiations and strikes at mines around the country, workers and analysts told Reuters.

Resource nationalism sweeps Latin America’s top mining countries

A move towards resource expropriation, tax and royalty increases, as well as demands for local participation in companies’ ownership, all resource nationalism components, continue to increase, with Latin America taking centre stage, a new study shows.

According to the latest report from risk consultancy Verisk Maplecroft, there is a clear four-year trend in minerals-rich nations to seek greater control over the revenues generated by their natural resources, which is expected to increase over the next two years.

The consultancy identified 66 countries out of the 198 included in the resource nationalism index (RNI), or 33% of them, that have tightened the grip on their riches since 2017.

Latin America is the jurisdiction where risks of expropriation and taxes hikes have increased the most, the study says. Mexico stands out as seeing the nation where the risks have climbed the most, driven by López Obrador administration’s nationalist agenda that wields community and environmental arguments as justification for greater state involvement in the extractive sector, Verisk Maplecroft says.

China Won’t Have Much Time to Enjoy America’s Misfortune

Afghanistan’s stability is no laughing matter for its biggest neighbour.

Afghanistan: Time to Take the Long View

One thing that makes a loss sting more, whether it’s a football game or a land war in Asia, is the merciless roasting you have to take from your rivals. Sure enough, China’s state and social media have had some fun with America’s ugly withdrawal from Afghanistan.

But Russia is being more reserved, for some reason. And China’s razzing will soon fade at the prospect of having a fundamentalist Islamic state on the border of Xinjiang, home to millions of Uighur Muslims. China has been trying to stay on the Taliban’s good side, if only to protect its Belt and Road project in Pakistan. But any dreams China had of belting and roading Afghanistan or mining the gold (or copper or lithium or etc.) from them thar hills have been deferred by the Taliban’s fast takeover, writes Ruth Pollard. The place is now just far too unstable to even start talking about Infrastructure Week: Hindu Kush Edition.

Sure, the Taliban is saying all the right things about protecting human rights and making frowny faces at terrorism. But the Afghans scrambling to flee the country don’t buy it, and neither does Eli Lake. He warns President Joe Biden would be foolish to give the Taliban legitimacy without setting hard conditions on their behavior. Afghanistan’s neighbors will want similar assurances.

The Taliban are sitting on $1 trillion worth of minerals the world desperately needs

London (CNN Business)The swift fall of Afghanistan to Taliban fighters has triggered a humanitarian crisis, with thousands trying to flee the country. It’s also brought renewed focus on Afghanistan’s vast untapped mineral wealth, resources that could transform its economic prospects if ever developed.

Afghanistan is one of the poorest nations in the world. But in 2010, US military officials and geologists revealed that the country, which lies at the crossroads of Central and South Asia, was sitting on mineral deposits worth nearly $1 trillion.

Supplies of minerals such as iron, copper and gold are scattered across provinces. There are also rare earth minerals and, perhaps most importantly, what could be one of the world’s biggest deposits of lithium — an essential but scarce component in rechargeable batteries and other technologies vital to tackling the climate crisis.

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Copper ore is seen at Aynak in the Logar Province of Afghanistan on March 4, 2013.

“Afghanistan is certainly one of the regions richest in traditional precious metals, but also the metals [needed] for the emerging economy of the 21st century,” said Rod Schoonover, a scientist and security expert who founded the Ecological Futures Group.

Security challenges, a lack of infrastructure and severe droughts have prevented the extraction of most valuable minerals in the past. That’s unlikely to change soon under Taliban control. Still, there’s interest from countries including China, Pakistan and India, which may try to engage despite the chaos.

“It’s a big question mark,” Schoonover said.


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