August Newsletter – 31.08.2021
HEADLINES
- Cobalt producers in race to cover the growing supply gap – report
- China-Australia trade: iron ore miner Fortescue set earnings, shipment records in past financial year
- Afghanistan Is Sitting On A Gold Mine. Literally
- EXCLUSIVE Congo reviewing $6 bln mining deal with Chinese investors -finmin
- Explained: Why China is looking at a larger role in Taliban-ruled Afghanistan
- China’s CATL, Huayou eye 10% stakes in miner Jinchuan Intl -sources
- Amazon bears brunt of gold-prospecting surge, study shows
- How Afghanistan’s $1 trillion mining wealth sold the war
Cobalt producers in race to cover the growing supply gap – report
The exponential demand growth for cobalt is placing pressure on producers to increase supplies to cover the growing supply gap as electric vehicle (EV) penetration rates in auto production rise above 50% by 2030, new analysis by Bank of America Global Research has found.
Mutanda copper mine
The bank’s Global Commodity Research team suggests three routes to bridging the supply gap: production increases at miners and refiners; improved processing technology; and recycling.
Sibanye-Stillwater (JSE: SSW), which is repositioning its portfolio towards MIFTs (metals important for future technologies), outlined in its 1H21 results that an increase of “requirements for EV production is already starting to have substantial implications for battery metal supply and is expected to accelerate.”
Mine expansions are already happening. In the Democratic Republic of Congo, Jinchuan Group International is developing the 10,000-tonne Musonoi project, which should start up by 2024.
China Molybdenum is working on two projects, expanding Tenke Fungurume by 17,000 tonnes from 15,000 tonnes. At the same time, the company is also proceeding with the as yet undeveloped Kisanfu site, a project it had initially acquired from Freeport McMoRan.
Reflecting concerns over the supply of battery raw materials, China’s battery manufacturer CATL took a 23.75% stake in Kisanfu four months ago.
Glencore is also restarting the 25,000-tonne Mutanda mine, currently the most prominent site globally.
https://www.mining.com/cobalt-producers-in-a-race-to-cover-the-growing-supply-gap-bofa-report/
China-Australia trade: iron ore miner Fortescue set earnings, shipment records in past financial year
Since prices hit an all-time high of more than US$230 a tonne in May, prices for the steelmaking ingredient have fallen with Chinese authorities curbing output
Beijing blocked several goods amid its protracted geopolitical conflict with Canberra, but iron ore shipments are still welcomed with open arms
China’s ravenous appetite for iron ore has helped Australian miner Fortescue double its profits and achieve record shipments while making Australian shareholders and governments wealthier with a bumper dividend and royalty payouts.
In its 2020-21 financial year results released on Monday, Fortescue said it had more than doubled its net profits to US$10.3 billion and unveiled total dividends of about US$8 billion.
The miner, which ships almost all of its iron ore to China, said it reached its “highest-ever annual shipments of 182.2 million tonnes” of iron ore and achieved “earnings and operating cash flow surpassing any year in its history”.
But analysts expect these heady times of bumper prices and shipments to have peaked.
In late July, during Fortescue’s April-June quarter production update, CEO Elizabeth Gaines warned that it was monitoring the Chinese market closely as steel margins and prices had been volatile, adding that there was “policy uncertainty relating to production curtailments”.
Afghanistan Is Sitting On A Gold Mine. Literally
Afghanistan is sitting on a gold mine. I don’t mean that figuratively.
The country sits atop what could be one of the world’s largest reserves of various metals and minerals, including not just gold but also platinum, silver, copper, iron, aluminum and uranium. It’s believed to have so much lithium, an increasingly important metal that’s widely used in battery technology, that Afghanistan could one day be known as the “Saudi Arabia of lithium,” according to a 2010 memo by the U.S. Department of Defense.
The combined value of its minerals is estimated at between $1 trillion and $3 trillion. By comparison, opium poppy production in the country was valued at only $350 million in 2020, despite an increase in cultivation from the previous year.
Afghanistan Rich in All-Important REEs. Will They Fall into the Right Hands?
Among Afghanistan’s rich resources are rare earth elements (REEs). REEs are those metals with unpronounceable names that are used in the manufacture of advanced technologies, including electric vehicles, wind turbines and missile guidance systems. Your iPhone contains a number of them. Each F-35 fighter jet carries about half a ton of these strategic elements.
EXCLUSIVE Congo reviewing $6 bln mining deal with Chinese investors -finmin
Aug 27 (Reuters) – Democratic Republic of Congo’s government is reviewing its $6 billion “infrastructure-for-minerals” deal with Chinese investors as part of a broader examination of mining contracts, Finance Minister Nicolas Kazadi told Reuters.
Explained: Why China is looking at a larger role in Taliban-ruled Afghanistan
Following the withdrawal of US forces from Afghanistan, China has emerged as one of the first nations to develop diplomatic channels with the Taliban. What are its economic interests in the country?
This week, China established its first diplomatic contact with the Taliban in Kabul, just a week after the militant group took control of Afghanistan. “China and the Afghan Taliban have unimpeded and effective communication and consultation,” Chinese Foreign Ministry Spokesman Wang Wenbin told a media briefing soon after.
Following the recent withdrawal of US forces from Afghanistan, China has emerged as one of the first nations to develop diplomatic channels with the Taliban, which has swept to power once again in the crisis-torn country. Interestingly, China has over the past two decades of US-led governance of Afghanistan, maintained a low profile, quietly observing as the longest war in history raged on taking its toll in terms of both resources and lives.
https://indianexpress.com/article/explained/afghanistan-crisis-taliban-takeover-china-7472999/
China’s CATL, Huayou eye 10% stakes in miner Jinchuan Intl -sources
CATL submits HK$2 bln offer for 9.9% of Jinchuan Intl – sources
Chinese cobalt miner says it held talks about issuing new shares
Says no contact with 3rd parties on matter since early August
HONG KONG, Aug 26 (Reuters) – Contemporary Amperex Technology Co Ltd (CATL) (300750.SZ) and Zhejiang Huayou Cobalt are each in talks to buy stakes of around 10% in Chinese miner Jinchuan Group International Resources Co (2362.HK) worth HK$2 billion ($257 million), sources told Reuters on Thursday.
Amazon bears brunt of gold-prospecting surge, study shows
A new analysis of satellite images shows the extent of mining growth in Brazil, particularly small-scale gold prospecting in the Amazon region.
Between 1985 and 2020, the area of Brazil dedicated to mining grew more than sixfold to about half a million acres, according to a MapBiomas report. Small operations that use manually-intensive methods surged in recent years to occupy a larger area than industrial mining.
The Amazon has borne the brunt of that growth as supposedly protected areas are exploited to feed global demand for beef, soybeans, leather and minerals. Brazil’s government is actively engaged in a campaign to open up the Amazon to development.
The biome accounts for 72.5% of Brazil’s total mining area and 93.7% of small-scale and informal mining, known in Brazil as garimpo. Half of garimpo mining is in conservation or indigenous lands, the study shows.
Illegal prospecting has been increasing lately and now accounts for half of artisanal activity, federal prosecutor Gustavo Kenner Alcantara told a conference on Monday.
https://www.mining.com/web/amazon-bears-brunt-of-gold-prospecting-surge-study-shows/
How Afghanistan’s $1 trillion mining wealth sold the war
Skeleton with copper patina excavated from Mes Aynak archeological site.
After the fall of Kabul, US media regurgitates a 2010 New York Times frontpage story on Afghanistan’s mineral riches based on a secret Pentagon memo and a 1977 Soviet geologic map.
Search for Afghanistan minerals and you get dozens of articles written in the last few days quoting a magical $1 trillion number including gems like The Taliban are sitting on $1 trillion worth of minerals the world desperately needs (CNN), Afghanistan: Taliban to reap $1 trillion mineral wealth (Deutsche Welle), Biden Just Handed Afghanistan’s Mineral Wealth to China (Newsweek), China Eyes Afghanistan’s $1 Trillion of Minerals With Risky Bet on Taliban (Bloomberg) and so on.
All the one trillion dollar articles are derived from a breathless June 2010 New York Times front-page story and interview with General David H Petraeus during which the commander of US forces in Afghanistan referenced a US Dept of Defense “internal memo”.
The story of how “the vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists” by the Pulitzer prize-winning journalist James Risen’s opens with a bang (emphasis added):
“The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.”
“The previously unknown deposits including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.”
https://www.mining.com/how-afghanistans-1-trillion-mining-wealth-sold-the-war/
COMMODITY PRICES
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