August Newsletter – 24.08.2020


  • Germany working towards extracting lithium from thermal water reservoirs
  • Trump administration to block Pebble mine in Alaska
  • Ivanhoe Mines and China’s CNMC announce Africa partnership
  • Cardinal Resources takeover bid from Shandong Gold gets government approval
  • Barrick and Japan Gold expand gold exploration work
  • Gold miners eye London, New York listings as Toronto loses shine
  • Japan is closing its old, dirty power plants – and that’s bad news for Australia’s coal exports
  • Japan unearths rare metals essential for lithium-ion batteries off Pacific island

Germany working towards extracting lithium from thermal water reservoirs

Researchers at Germany’s Karlsruhe Institute of Technology have developed an environmentally friendly process to extract lithium from the salty thermal water reservoirs that are located in the Upper Rhine Trench.

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Using the method developed by KIT, lithium could be extracted from the German and French Upper Rhine trench

Similar to other initiatives that are taking place in the UK, the German scientists want to recover the white metal using minimally invasive processes.

The mechanism they have come up with consists of filtering out lithium ions from the thermal water and then further concentrating them until lithium can be precipitated as a salt.

“As far as we know, there can be up to 200 milligrams per litre,” said in a media statement Jens Grimmer, a geoscientist at KIT who co-developed the method with his colleague Florencia Saravia. “If we consistently use this potential, we could cover a considerable part of the demand in Germany.”


According to Grimmer, compared to traditional methods of lithium production from the South American salt flats and Australian solid rock, the KIT’s process doesn’t need external water inputs as the existing infrastructure of geothermal plants, through which up to two billion litres of thermal water flow every year, can be used.

At the same time, the new process generates hardly any overburden, the land consumption is minimal and since the thermal water is returned to the underground after use, no harmful substances are released and geothermal electricity and heat production are not impaired.

In terms of efficiency, the researcher said that the mechanism he is proposing allows for lithium to be continuously extracted within hours in the thermal water cycle of the geothermal plant, which greatly differs from how things are done at the Lithium Triangle’s deposits where the enrichment process takes several months and is highly weather-dependent.

Trump administration to block Pebble mine in Alaska

The Trump administration is planning to block the controversial Pebble mine in southwestern Alaska that’s recently drawn opposition from certain powerful Republicans, according to a person familiar with the matter.

The project, which has known deposits of copper, gold and other metals, is located in an area that drains into Bristol Bay, home to the world’s most productive wild salmon fishery.

Conservationists, local activists and fishing operations have fought the project for years, but blocking the project would be a reversal for the Trump administration.


Pebble Mine CEO Tom Collier

The Environmental Protection Agency in 2019 resumed consideration of the proposed water pollution restrictions that had effectively stalled the project since they were outlined in 2014. In July, the Pebble mine secured a final environmental impact review from the U.S. Army Corps of Engineers, regarded as a major step toward permitting and production.

The Corps is said to be sending a letter to the mine noting that the project may pose significant environmental degradation. While that doesn’t spell the absolute end of the road for the project, it’s a signal that a lot more work may be required before a permit would be granted — a move that could push a final decision on the project until after the November election.

The Pebble Limited Partnership, which is owned by a Canadian subsidiary of Northern Dynasty Minerals Ltd, downplayed the development, saying “it appears that the normal process continues to move forward for the project.”

“We categorically deny any reports that the Trump Administration is going to return to an Obama-like approach that allowed politics to interfere with the normal, traditional permitting process,” Pebble Mine Chief Executive Officer Tom Collier said in a statement. “This president clearly believes in keeping politics out of permitting — something conservatives and the business community fully support.”

Ivanhoe Mines and China’s CNMC announce Africa partnership

JOHANNESBURG, Aug 18 (Reuters) – Canada’s Ivanhoe Mines on Tuesday announced a deal with China Nonferrous Metal Mining (Group) Co. Ltd (CNMC) under which the companies would jointly look for African mining projects to explore, develop or acquire.

Ivanhoe’s co-chairmen Robert Friedland and Yufeng Sun said the strategic partnership would also see the companies, both active in Democratic Republic of Congo, exploring production, smelting, and logistics opportunities.

Friedland hinted at possible mergers arising from the agreement with CNMC, saying the partnership would begin by “examining the synergies between the operations currently owned by our two companies”.

CNMC Chairman Wang Tongzhou said: “I strongly believe that cooperation is the best way to achieving the goals of both companies.”

Ivanhoe has previously said it is in talks with companies over its Kipushi and Western Forelands projects in the Congo, and its Platreef project in South Africa.

CNMC in January launched Congo’s first large-scale copper smelter, the Lualaba Copper Smelter, 45km from Ivanhoe’s Kamoa-Kakula copper joint venture with Zijin Mining in the country’s southern copperbelt.

CNMC is also the majority owner of Deziwa copper and cobalt mine and processing plant, a joint venture with Congo’s state mining company Gécamines which started producing in January.

Cardinal Resources takeover bid from Shandong Gold gets government approval

Shandong is moving towards closing the takeover following a back-and-forth bidding war between the Hong Kong-based gold miner and Moscow-based Nord Gold SE.

Cardinal Resources Ltd (ASX:CDV) (TSE:CDV) confirmed that Shandong Gold Mining (HongKong) Co., Limited has received a no objection notification from Australia’s Foreign Investment Review Board (FIRB) for its takeover bid for Cardinal.

The Hong Kong subsidiary of Chinese state-owned Shandong Gold Mining Co., Ltd (SHA:600547) can now move ahead with its off‐market takeover offer to acquire all of the shares in Cardinal it does not presently own at a cash price of 70 cents per share.

The Shandong Gold offer remains subject to the other conditions contained in the bidder’s statement, including:

  • 50.1% minimum acceptance by Cardinal shareholders;
  • No material adverse change in relation to Cardinal; and
  • Other conditions customary for a transaction of this nature.

Board recommendation

The latest development follows a back-and-forth bidding war between Shandong Gold and Moscow-based Nord Gold SE to takeover Cardinal.

Cardinal’s board of directors continue to unanimously recommend that Cardinal shareholders accept the Shandong Gold takeover offer and reject the Nordgold bid.

Barrick and Japan Gold expand gold exploration work

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Mineral exploration firm Japan Gold and its partner Barrick Gold are moving forward with exploration activities in the Kitami Region in north-east Hokkaido, Japan.

The latest move comes as part of the two companies’ joint efforts to explore the country’s gold mining potential.

Barrick Gold and Japan Gold announced their alliance in February.

Under the joint venture, the two companies completed bulk leach extractable gold (BLEG) and rock chip sampling over eight of the 14 Barrick Alliance projects in the Southern Kyushu Epithermal Gold Province within the Hokusatsu region.

Last month, Japan Gold and Barrick Gold began regional scale geophysical-gravity surveys in the Hokusatsu region. Barrick Alliance’s field teams also relocated from southern Kyushu province to north-east Hokkaido.

Barrick Gold is currently advancing the exploration work at the Sanru project, which is Japan Gold’s biggest project.

Sanru covers a 25km-long strike length on the prospective Omu-Kamikawa trend in Japan’s major epithermal gold province Hokkaido.

Within the Kitami region, Japan Gold has nine projects with applications and prospecting rights covering 737km² of prospective ground within the region.

Eight of these projects are included as part of the Barrick Alliance.

Japan Gold currently holds a total portfolio of 30 projects in the country.

Barrick has committed to solely fund an initial evaluation phase of 28 out of 30 projects that Japan Gold holds in the country.

In May, Japan Gold and Barrick Gold announced plans to jointly explore and develop certain gold mineral properties and mining projects in Japan.

Gold miners eye London, New York listings as Toronto loses shine

TORONTO/JOHANNESBURG (Reuters) – Gold miners in Canada keen to tap new investors are eyeing secondary listings in London and New York, underscoring pent-up demand for the precious metal from generalist funds.

Gold prices XAU= have soared 32% this year as central banks dial up stimulus measures in response to the COVID-19 pandemic.

That has fueled a cash surge for miners, who have hiked dividends and pledged cost discipline to broaden their appeal beyond a shrinking pool of resource-only investors.

A listing in New York or London opens the door for miners’ shares to be included in many more exchange-traded funds (ETFs) – guaranteeing substantial liquidity and broadening their investor basis further.

“There is a lot of dumb money sloshing around in London in the mining space, and the gold miners want to soak it up,” said Henry Steel, London-based portfolio manager at Odey Asset Management, which manages $4.9 billion.

That would help plug a large gap here in the London market left by Barrick Gold’s (ABX.TO) (GOLD.N) 2018 tie-up with Randgold Resources, which had been listed in London. Mining company listings in London have slowed in recent years.

Japan is closing its old, dirty power plants – and that’s bad news for Australia’s coal exports

Last month, the Japanese government announced a plan to retire its fleet of old, inefficient coal-fired generation by 2030. And what happens to coal power in Japan matters a lot to Australia.

Australia shipped more than A$9 billion dollars’ worth of thermal coal to Japan in 2019 – about 12% of our total thermal coal exports.

In the short term, several new coal plants are being built in Japan to replace scrapped capacity. But there are signs investors are not flocking to invest in expensive new Japanese coal technology.

And in the long run, the investment environment for new coal technology is worsening. If Japan’s commitment to coal weakens, that will mean less demand for Australia’s exports.

Japan’s changing coal fleet

Almost all Japan’s nuclear power stations remain shuttered ten years after the Fukushima disaster. The Japanese government has positioned coal as a long-term hedge against the possibility the nuclear power restarts will not proceed as hoped.

However, Japan has also been criticised for its lack of ambition on plans to address climate change under the Paris Agreement.

Last month, the government signalled it will decommission about 100 inefficient coal-fired power units. It aims to reduce coal’s share of the power mix to 26% by 2030 – down from 32% in the 2018 financial year.

The big questions are: what are the prospects for Japan’s coal fleet, and what does this mean for Australia?

The Japanese government is supporting investment in newer plants, including some that use a high-pressure “gasifier” to turn coal into gas. But these types of plants are expensive to build. With a typical coal plant expected to operate for about 40 years, companies are wary of making huge outlays with relatively limited time to recoup the investment.

Reflecting this, last year Osaka Gas withdrew plans to build a 1.2 gigawatt (GW) coal plant in Yamaguchi Prefecture. Tokyo Gas, Kyushu Electric and Idemitsu also abandoned plans to build a 2GW coal plant in Chiba Prefecture near Tokyo. In total, 30% of planned investment in coal power has been scrapped since 2016.

Japan unearths rare metals essential for lithium-ion batteries off Pacific island

A government agency dealing with natural resources has announced the successful excavation of rare metals including cobalt and nickel from the seabed of Japan’s exclusive economic zone.

Domestic rare metal production has been a pressing issue for Japan as the nation is highly dependent on China for such metals that are essential to lithium-ion battery production.

The seabed mining site is located about 900 meters below sea level, off the southern coast of the Pacific island of Minami-Torishima.

The Japan Oil, Gas and Metals National Corporation (JOGMEC), commissioned by the Economy, Trade and Industry Ministry, excavated in July about 650 kilograms of cobalt-rich crust, a mineral deposit containing the rare metal.

JOGMEC reported that through its excavation research, it discovered the area containing enough cobalt to meet Japan’s demand for about 88 years and enough nickel for about 12 years.

Cobalt and nickel are essential materials for lithium-ion batteries, which are used in electric cars and other vehicles.

Japan has relied on imports of such highly scarce metals for almost the entirety of its domestic consumption.

With the advent of the ultra-fast 5G communication standard, the use of these materials in communications equipment is also rapidly increasing, and their trading prices are rising worldwide.

Domestic rare metal production will also help to strengthen the competitiveness of Japan’s domestic industry.

The ministry has plans to inspect the drilling technology with an aim toward mass production, saying the excavation’s success is a big step toward the domestic production of rare metals.


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