February Newsletter – 07.02.2022


  • Will China continue its ban of Australian coal?
  • JV Article: Defense Metals’ Wicheeda rare earths project poised to become the next REE producer in North America
  • US mining output rises 12% y/y to $90.4bn
  • Rock Tech, Bilfinger to build Europe’s first lithium refinery
  • China’s Zijin to Invest $380m in Argentina Lithium Plant
  • Twin Metals mine cancellation is a gut punch to US steelworkers, gift to China
  • Guest opinion: U.S. must develop raw materials for electric vehicles, solar panels
  • France coal-fired power plants get short-term right to burn more

Will China continue its ban of Australian coal?

In 2020, China banned the importation of Australian coal. With a phase down of coal expected, this could prove a permanent fixture.

In October 2020, China effected a ban on imports of Australian coal. Australian exports account for 58% of the global seaborne trade or metallurgical coal, essential to primary steelmaking. China is a steelmaking hub, accounting for 57% of world steel production in 2020.

The ban was expected to impact the economies of both countries adversely. Indeed, for China, since it enacted the ban, every million tonnes of coal used in its steel mills has cost more than $400m, compared with around $250m paid by everywhere else.

However, both countries have also adapted effectively. China has shored up its supplies from extensive domestic production increases and larger imports from other coal-producing powers such as Indonesia. Australia has also partially offset its losses by increased shipments to India, South Korea, Taiwan, and Japan.

With little political will on either side so far towards a thawing of relations, it can be expected that the import ban could continue through into 2023. Whether this will prove detrimental to both countries is up for question; however, due to coal’s abundance and willing buyers, demand will likely remain high enough to avoid forcing the hand of either state.


JV Article: Defense Metals’ Wicheeda rare earths project poised to become the next REE producer in North America

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Summer drilling program at the Wicheeda property in British Columbia.

When Defense Metals (TSXV: DEFN) acquired 100% ownership of its flagship Wicheeda rare earth elements deposit in British Columbia this month, it was the latest in a series of milestones the company marked over the past year.

Drilling has intersected visible rare earth element (REE) mineralization in dolomite-carbonatite rocks in all holes, and the Preliminary Economic Assessment (PEA), filed in January, indicates the project has an after-tax net present value with an 8% discount of $404 million, and an internal rate of return of 18%.

Last year, Defense Metals entered into an agreement with Sinosteel Corporation for testwork and concentrator design research cooperation, and an investigation into the establishment of an on-site large-scale demo  plant at Wicheeda to assess the economic and technical feasibility of full-scale mine development.

The company reports having a Mineral Resource Estimate comprising 5.0 million tonnes of indicated resource, averaging 2.95% TREO and 29.5 million tonnes of inferred resources, averaging 1.83% TREO, at a cut-off grade of 0.5% TREO. The current resource represents a 36% increase on a contained metal basis in comparison to the prior 2020 resource estimates, due to the estimation of additional economically significant medium and heavy REE’s and a lower cut-off grade established based on PEA economic assumptions.


US mining output rises 12% y/y to $90.4bn

Operating mines in the United States generated $90.4 billion in mineral commodities in 2021, a 12% increase year-over-year, the US Geological Survey said in the 27th annual Mineral Commodity Summaries report published this week.

The USGS credited the restart of the US economy in 2021 following government-mandated shutdowns seen during the initial phases of the covid pandemic as having driven increased demand for minerals.

The estimated value of US production of all industrial minerals in 2021 was $56.6 billion, which is 63% of the total value of US mine production value. Crushed stone was the leading nonfuel mineral commodity domestically produced in 2021, accounting for 21% of the total value of US mine output.

Metal mine production was valued at $33.8 billion, or 23% higher than 2020. The main contributors to the figure were copper (35%), gold (31%), iron ore (13%), and zinc (7%).


Rock Tech, Bilfinger to build Europe’s first lithium refinery

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Bilfinger will overtake engineering services and, in the event the project is realized, procurement services and construction management.

Canada’s Rock Tech Lithium (TSX-V: RCK) and Germany’s Bilfinger SE will work together on building Europe’s first lithium converter and refinery in a push to meet the region’s increasing demand for electric vehicles (EVs).

The Canadian miner and the German industrial services provider have signed a memorandum of understanding to build the lithium hydroxide converter for Rock Tech’s planned battery-metals facility in Guben, southeast of Berlin, the companies said.

Refineries are needed to convert the lithium oxide found in spodumene rock deposits into battery-grade chemicals. Having a local smelter would allow Europe to avoid some of the complex logistics involved in shipping what is a highly corrosive substance that reacts violently with water.

Markus Brügmann, CEO of Rock Tech Lithium, said in a separate statement that the cooperation agreement was “another significant milestone for Rock Tech Lithium on its way to becoming a leading clean-tech company supplying the automotive industry with high-purity lithium hydroxide.”

The company, which announced the construction of Europe’s first lithium refinery in October last year, plans to largely source the ore for the German factory from its own spodumene mine in Georgia Lake, Ontario.

Bilfinger will overtake engineering services and, in the event the project is realized, procurement services and construction management, it said in the statement.


China’s Zijin to Invest $380m in Argentina Lithium Plant

The plant will be situated in the Tres Quebradas project, the northern province of Catamarca, and will aim to produce 20,000 tonnes of lithium carbonate per year

Chinese mining firm Zijin Mining Group Co Ltd will invest $380 million to construct a lithium carbonate plant in Argentina via local subsidiary Liex, the country’s Ministry of Production said on Friday.

The plant will be located in the Tres Quebradas project, in the northern province of Catamarca, and will aim to produce 20,000 tons of lithium carbonate per year with the idea of doubling its production in the medium term, the government said.

Last year, Zijin purchased Canada’s Neo Lithium Corp, which operates the Tres Quebradas (3Q) project.

Argentina, which sits within South America’s so-called “lithium triangle” along with Chile and Bolivia, is the world’s fourth largest producer of the battery metal behind Australia, Chile and China, based on U.S. Geological Survey data

The global lithium price has shot up over the last year on expectations of a boom in demand to make the batteries needed to power a shift towards electric vehicles.

The investment was announced after a meeting between Argentine officials and executives of Zijin, Liex and Neo Lithium.


Twin Metals mine cancellation is a gut punch to US steelworkers, gift to China

Last week, the Biden administration effectively canceled two long-standing mineral leases at the Twin Metals mine located in northeastern Minnesota. This decision is not only a serious blow to the thousands of union workers who would have built and operated the mine but is also antithetical to the president’s stated climate and energy goals, which need a substantial, and stable, supply of minerals to operate.

The Twin Metals mine is a state-of-the-art underground copper, nickel, cobalt and platinum group metals (PGM) operation using some of the most advanced and precise methods of extraction. It is a part of the Duluth Complex in northern Minnesota that, according to the U.S. Geological Survey, contains the largest undeveloped deposits of nickel, cobalt and PGM in the world.

These metals are necessary components to modern life and crucial to the expanded development of green energy technologies. The cobalt mined from Twin Metals could be used to build lithium-ion batteries, the nickel could be used in advanced battery storage technologies and the copper could be used in solar panels and wind turbines. Instead of being canceled, these jobs should be heralded as the green energy jobs the president often touts.


Guest opinion: U.S. must develop raw materials for electric vehicles, solar panels

In recent years, Americans have become far more aware of China’s massive presence in the global economy. They’ve faced shortages of imports from China during the COVID pandemic — with stores running out of common, everyday goods. And they’ve seen global protests over China’s hosting of the Winter Olympics. Congress is now paying attention — and is finally starting to confront China’s predatory behavior.

The problem for Washington, however, is that ending the nation’s heavy reliance on China — and rebuilding America’s industrial base — won’t happen overnight. That’s doubly clear, now that the U.S. Geological Survey (USGS) has weighed in with a new report regarding America’s deepening dependence on imported metals and minerals from China.


France coal-fired power plants get short-term right to burn more

France is temporarily allowing electricity producers to burn more coal after the nation’s grid operator warned of possible power shortages.

The government formally raised the cap on running coal-fired power stations for the months of January and February, according to a decree published Sunday in the official journal. The Ecology Ministry proposed the loosening in early January, saying it was necessary to ensure a secure supply of electricity when power use is high during the cold winter months.

Coal is playing a bigger role in Europe’s energy mix during the winter even as prices rise and climate concerns pressure governments to curb its use.

France’s coal units will be allowed to operate for about 1,000 hours over the first two months of 2022, 300 hours more than the cap that was set in 2019 to help curb carbon emissions.

The grid operator, Reseau de Transport d’Electricite, said in December that France ran the risk of a power shortfall in the event of a cold snap and insufficient wind energy. An unusually high number of nuclear reactors have been halted for maintenance.



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