December Newsletter – 11.12.18



Vale doubles down on nickel ahead of EV revolution

LONDON (Reuters) – Vale, the Brazilian mining giant built on supplying the world’s steel mills with iron ore, is now betting on the electric vehicle (EV) revolution to turn its nickel division around.

Xinjiang Joinworld Announces Plans For US$831-Million Alumina Refinery In Western Guinea

Another aluminium firm hailing from the People’s Republic of China has staked its claim in West Africa, as this week saw Xinjiang Joinworld Co. Ltd announce plans to build an alumina refinery in Guinea.

According to a filing made to the Shenzhen Stock Exchange on Monday, Xinjiang Joinworld said that the US$831-million project will be built over a 30-month period in a special economic zone in the vicinity of the coastal city of Boffa.

The planned alumina refinery will have a 27-year lifespan, raking in US$69 million per year from refining bauxite into alumina. Approximately one quarter, or US$240 million of the construction costs will be covered by the company itself, with the remainder to be provided via loans and other debt vehicles.

“The Guinea project will ensure sufficient alumina supplies to our company, while at the same time, any surplus we don’t need for our own aluminum smelting we would sell to other consumers not only in China but also to buyers in Central Asia and the Middle East,” explained an unnamed company official in an industry media outlet.

Xinjiang Joinworld is but the latest in a spate of projects begun by Chinese companies over the past several months. This spring saw the announcement by Chalco to partner in a US$800-million project near Boffa, while only weeks ago Cosco Shipping Corp. revealed its discussions with various shipbuilders to construct over two dozen ore carriers for ferrying bauxite from Guinea to Chines ports.

China’s Copper Imports Slump as Economy Slows and Trade Stalls

China’s monthly copper imports dropped for the first time this year — joined by declines in iron ore and soybeans — as economic growth slows in the world’s biggest consumer of commodities amid a simmering trade row with the U.S.

Oft cited as a market indicator for economic health, the metal has been under pressure since the summer, threatening to unwind a three-year rally. Goldman Sachs Group Inc. warned in a note this week that conversations with copper investors revealed increasing worries over China’s economy. This concern was backed up by broader trade figures Saturday that showed growth in imports and exports faltering over the month, as tensions with the U.S. stall trade.


“People are grasping for whatever ounces of [palladium] they can get”

Palladium has overtaken gold as the most valuable precious metal for the first time in 16 years.

It was worth over US$1,246 an ounce on the spot market at the time of writing, while gold was around $1,240/oz.

Palladium had briefly touched a fresh high of $1,261.72/oz yesterday.

“People are grasping for whatever ounces of material they can get,” BMO Capital Markets head of base and precious metals Tai Wong told Bloomberg yesterday.

“It’s very expensive to borrow, and that is perhaps the biggest factor driving the spot price higher.”

Analysts have pointed to a strong fundamental outlook, with palladium tipped to benefit from the rising demand for hybrid electric vehicles, while platinum – which tends to be used in diesel catalytic converters – has dwindled on diminished demand since the 2015 Volkswagen emissions-rigging scandal.


Saudi rises on Ma’aden starting output at new plant

DUBAI, Dec 9 (Reuters) – Saudi Arabian Mining Company (Ma’aden) helped Saudi Arabia’s stock index gain ground in early trading on Sunday, while Dubai’s market remained flat after falling to its lowest level in more than five years last week.

Ma’aden was up 2.6 percent after the company said on Dec. 6 that the firm will start commercial production on Sunday at its plant producing aluminium flat rolled products. Ma’aden Rolling Company is 74.9 percent owned by Ma’aden and 25.1 percent owned by Alcoa.

Al Rajhi Bank gained 0.1 percent, while Jabal Omar Development Co added 0.6 percent.

Bushveld apologises for Aim rules breaches, pays £490 000 fine

The London Stock Exchange has determined a public censure of Aim-listed Bushveld Minerals and fined the company £700 000 relating to Aim rule breaches that occurred in April 2016.

Bushveld settled the fine early and it was, therefore, discounted to £490 000.

The breaches were the result of Bushveld failing to meet its regulatory obligations in relation to its undertaking to pay an exclusivity fee to the vendors of Vametco.

“The transaction in question has been at the heart of the company’s rapid transformation from a junior exploration company with a market capitalisation of under £20-million to a significant and growing integrated mining and processing company, with a market capitalisation of more than £450-million.


Melting gold at room temperature is a thing now

Researchers from Chalmers University of Technology, the University of Gothenburg, the University of Jyväskylä, and Stanford University have found a way to make the surface of a gold object melt at room temperature.

The discovery came as a fluke after the scientists started analyzing the yellow metal to its most intrinsic and smallest components.

First, they placed a small piece of gold in an electron microscope. Then they started observing it at the highest level of magnification and began gradually increasing the electric field to extremely high levels. When they reached the highest electric field, they noticed that the surface layers of gold had actually melted – at room temperature.

“I was really stunned by the discovery. This is an extraordinary phenomenon, and it gives us new, foundational knowledge of gold,” Ludvig de Knoop, a researcher at Chalmers, said in a media statement.


Monchetundra now fully authorised

The office of Russian Prime Minister Dmitry Medvedev has official approved the mine permit for the Monchetundra platinum group metals (PGMs) and base metals mine, Aim-listed Eurasia Mining reported on Wednesday.

The permit was awarded in November, but required approval from Medvedev’s office.

The company is now authorised to start construction at the two-million-ounce palladium-equivalent State-approved reserve and resource on the Kola peninsula, bordering Finland.

Eurasia has a contract with Chinese group Sinosteel for an engineering, procurement, construction and financing contract, valued at $176-million, for the contract. A $50-million subcontract is specified within the contract and is assigned to Eurasia’s 80% subsidiary Terskaya Gornaya Kompany, or a subcontractor of its choosing, for engineering and pit development works in advance of mining.