December Newsletter – 13.12.2021

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  • Five charts ask if mining is in a supercycle, one screams no
  • China’s mining group scrutinizes Afghanistan for opportunities
  • How China wrested control of the Congo’s critical minerals
  • Anglo American flags major design changes at UK fertilizer project
  • Geothermal brines in California’s Salton Sea could be future source of lithium in the US
  • USA Rare Earth to produce nearly half of critical minerals in USGS’ updated list
  • China eyes bolstering mining across Tibet
  • Dolly Varden Silver to acquire Fury Gold Mines’ Homestake Ridge project for $39m

Five charts ask if mining is in a supercycle, one screams no

COP26’s climate goals necessitate massive new investments in mining, but how does today’s boom stack up to the aughts?

Supercycle or no? is a favourite parlour game in mining and there is no shortage of opinions and arguments on whether the industry can party like it’s the aughts or if the mid-2010 hangover is just around the corner.

The latest entry in the genre is by Julian Kettle, senior VP and vice chair of Woodmac’s metals and mining business (read it here). Kettle’s first exhibit in Supercycle demand. Are we there yet? would be rather dispiriting if you’re in the bull camp. (A bull? Me?)

Bar cobalt and nickel, Woodmac’s demand growth projections for this cycle are noticeably lower than during the five-year period between 2003 and 2007 when the great sucking sound from the East was getting louder and louder.

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China’s mining group scrutinizes Afghanistan for opportunities

Just months after the Taliban seized power, Beijing stepped into the void left by the United States and its allies, giving Chinese mining groups the opportunity to access the country’s lithium and copper deposits in Afghanistan. looking for.

A group of mining representatives have visited Afghanistan in recent weeks, according to senior Kabul officials and representatives of Chinese trade associations.

China’s efforts to secure mining rights come when Afghanistan is facing a serious situation Financial and humanitarian crisis After the withdrawal of US and Allied forces in August, and after the Beijing and Taliban leaders met before the withdrawal of the United States.

“China has maintained direct communication with the Taliban since August 2021, is one of the first few countries to send aid, and is eager for finances to stabilize the Afghan economy. We have definitely boosted our relationship with the Taliban, “said Claudia Chia. Analyst at the Institute of South Asian Studies, National University of Singapore.

Major economies are rushing to secure Access to lithium Copper is an important resource used to develop technologies such as electric vehicle batteries and smartphones. According to Nomura, lithium deposits in Afghanistan may be comparable to the world’s largest known reserves in Bolivia.

How China wrested control of the Congo’s critical minerals

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China’s system of bankrolling its state companies may be entrenching great inefficiency in its economy but has delivered it unchallenged dominance in the critical minerals required for advanced technologies.

Separate investigations by the New York Times and Bloomberg released in recent weeks have shown how Chinese mining companies, backed by state-owned banks, seized control of the Democratic Republic of the Congo’s most prized cobalt deposits. In 2016, China Molybdenum bought out the holdings of US mining group Freeport-McMoran using very similar means to those used by the Nixon administration to gain control of the DRC’s mineral resources in the 1960s.

Despite an avowed concern to end the US dependence on China for supplies of critical minerals, both the Obama and Trump administrations stood aside, allowing Freeport to hand control of the world’s largest cobalt mine to China Molybdenum with the sale of its nickel and cobalt operations in the DRC. The Chinese were assisted in their purchase by President Joe Biden’s son Hunter.

Anglo American flags major design changes at UK fertilizer project

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Woodsmith is the UK’s biggest mining project in decades.

Anglo American (LON:AAL) flagged on Friday major design changes to the vast fertilizer project being built beneath the North Yorks Moors national park in England, which it acquired last year when buying British junior Sirius Minerals.

The company, which has so far excavated about two-thirds of a 37-km-long tunnel between the Woodsmith mine and a port on Teesside, said it will inject a further £530 million ($700m) into the project.

The additional investment will be used to continue the sinking of two main shafts and the development of underground areas to accommodate increased production capacity, it said.

Anglo added the planned changes, a result of a detailed technical review, would result in a “different construction and production ramp-up schedule.”

“We expect to have completed our design engineering, capital budget and schedule at the end of 2022,” chief executive Mark Cutifani, who is being replaced in April by Duncan Wanblad, said in the statement.

Geothermal brines in California’s Salton Sea could be future source of lithium in the US

A literature review prepared by Berkeley Lab scientists found that geothermal brines in the Salton Sea region of California are expected to be a major source of domestic lithium for the United States in the future but that significant technical challenges have to be overcome.

One of the main obstacles is that brine is extremely hot when it comes out of the subsurface, and it contains a rich stew of many dissolved minerals in addition to lithium.

“It comes out at over 100 degrees Celsius,” Will Stringfellow, lead author of the paper, said in a media statement. “So, you have to deal with the heat. And it’s very, very saline – about 25% by weight.”

Stringfellow pointed out that there are many materials in the mix that could potentially interfere with the extraction.

“There is a lot of salt, meaning a lot of sodium, a lot of chloride. There’s also a lot of calcium and magnesium, and other things like iron and silicon,” he said.

However, based on the review he conducted with co-author Patrick Dobson, a few ideas seemed feasible.

USA Rare Earth to produce nearly half of critical minerals in USGS’ updated list

USA Rare Earth announced that it expects to produce nearly half of the critical minerals listed in the US Geological Survey’s revised list of raw materials deemed crucial for national security and the economy.

In a press release, the Texas-based company said that together with partner Texas Mineral Resources, it is committed to developing the Round Top heavy rare earth, lithium and critical minerals project in Hudspeth County, thus making it a national strategic asset for supply chains essential to the US economy.

“USA Rare Earth will bring into domestic production nearly half of the critical minerals identified by the USGS, including gallium, which tops the new Critical Minerals List,” Thayer Smith, USA Rare Earth president, said in the media brief. “We commend the USGS for its robust evaluation of these important mineral commodities and for identifying the material constraints for American technology and national defence.”

According to Smith, in February 2021, the USGS identified Round Top as the largest gallium deposit in the United States. Gallium is a critical semiconductor chip material, for which there are currently no US producers.

In addition to Ga, the Survey deemed 16 rare earths as critical, including neodymium, dysprosium, praseodymium, and terbium.

China eyes bolstering mining across Tibet

Tibet is rich in natural resources including rare earths, which many fear Beijing plans to exploit without protecting the environment.

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The Tibetan Plateau has been called the world’s ‘Third Pole.’

Before the invasion of Tibet by the People’s Republic of China (PRC), mining was rarely conducted in that region. Within the Tibetan cultural sphere, mining and ground disturbance are often said to remove “the bcud [nutrition or essence] of the earth, of which minerals are [a] primary form.”

During the Cultural Revolutions, Tibetan people were sent to Jang Tsala Karpo, a borax mine in the high-altitude Jangtang region of northern Tibet (Nagchu). Some mining for chromium was also done using Tibetan prisoners, many of whom were worked or starved to death. In short, after the invasion, China’s mining continued throughout Tibet.

Gabriel Lafitte, one of the foremost environmentalists and researchers on mining in Tibet, has divided China’s exploitation of Tibetan natural resources into four periods.

The first stage was that of the 1950s, 1960s and 1970s when the Tsaidam Basin became the site of one of the largest exploitations of minerals such as chromium and bauxite.

The second stage was that of the 1980s and 1990s, characterized by the damaging gold rush mostly involving small-scale private individuals in the rivers of Kham and Amdo, two of the traditional provinces of Tibet.

The third stage of China’s exploitation of Tibet’s natural resources began with the large-scale mining by government organizations such as the People’s Armed Police or by state-owned enterprises.

The fourth stage of natural-resource mining in Tibet was for minerals like copper, which requires a large amount of electricity and a good network of roads.

Dolly Varden Silver to acquire Fury Gold Mines’ Homestake Ridge project for $39m

Dolly Varden Silver (TSXV: DV; US-OTC: DOLLF) is acquiring Fury Gold Mines’ (TSX: FURY; NYSE-AM: FURY) Homestake Ridge gold and silver project in British Columbia’s Golden Triangle in a cash and shares deal valued at C$50 million ($39m).

Homestake Ridge is adjacent to Dolly Varden’s namesake project, and sits about 32 km southeast of Stewart and 113 km from the town of Terrace.

Under the deal Dolly Varden will pay C$5 million in cash and issue 76.5 million of its common shares to Fury Gold Mines. If the transaction is completed, Fury Gold Mines will own about 36.9% of Dolly Varden Silver.

Dolly Varden shareholders will vote on the acquisition at a special meeting in February.

The 7,500-hectare Homestake project is estimated to contain indicated resources of 0.736 million tonnes grading 7.02 grams gold per tonne, 74.8 grams silver per tonne, 0.18% copper and 0.077% lead for contained metal of 165,993 oz. of gold, 1.8 million oz. silver, 2.9 million lb. copper and 1.25 million lb. lead. Inferred resources add 5.55 million tonnes grading 4.58 grams gold per tonne, 100 grams silver per tonne, 0.13% copper, 0.142% lead for 816,719 oz. gold, 17.8 million oz. silver, 15.9 million lb. copper and 17.3 million lb. lead. The resource estimate used a cut-off grade of 2.0 grams gold-equivalent per tonne.


Link for more detailed information

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