February Newsletter – 17.02.2020
ANNOUNCEMENTS
NEWSLETTER
- China steel traders hold off post-holiday buys as coronavirus saps demand
- Call made for accelerated exploration to build critical-minerals pipeline
- Barrick CEO sees no competition in his bid for Freeport’s Grasberg mine
- Anfield Energy Applauds the US Government’s US$1.5B Uranium Reserve Proposal in its FY21 Federal Budget
- Teck Resources needs at least $65 oil and deep-pocketed partners for Frontier oilsands mine to make economic sense
- Vale makes US$671M tailings dam provisions
- Trafigura in talks with Congo over financing cobalt buyer
- Australian companies, academia working on fast-charge Li-ion batteries for trams
- Prospects brighten for Northern Dynasty Pebble mine on leaked draft study
TOP NEWS
China steel traders hold off post-holiday buys as coronavirus saps demand
BEIJING (Reuters) – Steel traders in China are holding off returning to the market for their usual post-Lunar New Year purchases, their appetites dampened by sluggish demand from a construction sector hit by the outbreak of a flu-like virus.
The coronavirus, which has killed more than 1,000, was first discovered in December in Hubei province and has forced China to limit public activities and cut transport links as it spread across the country.
The epidemic is expected to hurt the world’s second-largest economy, with a government economist and other analysts saying that China’s first-quarter economic growth may dip below 5%.
China’s containment measures have also weighed on a seasonal pick-up in demand for construction steel, forcing traders – who typically replenish stock after the holiday period – to hold back purchases because of the uncertain economic outlook.
A trader in the eastern city of Hangzhou, capital of Zhejiang province, said demand usually recovers after the Lantern Festival, which fell this year on Feb. 8.
“But this year is special,” he said. “There’s no construction activity … Who would buy at this time?”
Call made for accelerated exploration to build critical-minerals pipeline
Amid growing demand for critical minerals globally on the back of increased production of the technologies needed to realise a low-carbon future, North America’s policies and regulations are said to be hindering exploration and depleting its project pipeline.
This is the most minerals-intensive time in history, with demand for hard-rock minerals set to increase in the coming years in light of technological advances, says US mining lobby group National Mining Association president and CEO Rich Nolan.
“US policies will be a key factor in determining whether the country’s domestic mining sector can meet the increasing demand for hard-rock minerals or whether we continue to deepen our import reliance, most notably owing to the difficulty in securing the necessary permits to proceed with mining projects in the US.”
Prospectors & Developers Association of Canada (PDAC) president Felix Lee tells Engineering News & Mining Weekly that there is an unquestionable push in Canada towards a low-carbon future, and he expects more exploration and development of the minerals and metals that are crucial to achieving this goal.
Barrick CEO sees no competition in his bid for Freeport’s Grasberg mine
TORONTO (Reuters) – Barrick Gold Corp Chief Executive Mark Bristow on Wednesday said he sees no competition from rivals in his pursuit of Freeport-McMoran Inc’s Grasberg copper-gold mine in Indonesia but cautioned any deal for the asset would take time to pull off.
Bristow has fanned speculation that Barrick, the world’s No. 2 gold miner, is poised to deepen its exposure to copper and last week expressed interest in acquiring Freeport’s flagship Grasberg mine.
Grasberg ranks as the world’s second-largest copper mine and largest gold mine and would enable Barrick to take advantage of rising demand for copper in the electric vehicle industry.
In an interview, Bristow ruled out a hostile approach for Freeport while reiterating interest in Grasberg
“And there’s no competition for Grasberg,” he added. “First of all, it’s held in a U.S. company so no Chinese company can access it. Secondly Rio Tinto sold out of it.”
Rio Tinto Plc sold out its Grasberg stake in 2018.
COMMODITIES
Anfield Energy Applauds the US Government’s US$1.5B Uranium Reserve Proposal in its FY21 Federal Budget
VANCOUVER, British Columbia, Feb. 12, 2020 (GLOBE NEWSWIRE) — Anfield Energy Inc. (TSX.V: AEC; OTCQB: ANLDF; FRANKFURT: 0AD) (“Anfield” or “the Company”) applauds the Trump Administration’s proposal to create a strategic uranium reserve as part of its FY21 Federal Budget. Under the proposal, the Department of Energy would have US$150M per year – for a period of 10 years – at its disposal to purchase uranium from US producers. This proposal “reflects the Administration’s Nuclear Fuel Working Group (NFWG) priorities”.
Corey Dias, Anfield’s CEO, stated, “We are very pleased with the US government’s proposal to create a strategic uranium reserve. This is a critical first step to provide US uranium producers and near-term producers with a dedicated, improved domestic market for its material. Moreover, the NFWG may have additional recommendations on which the Administration might act that could further improve the prospects of US-based uranium miners and producers.
Teck Resources needs at least $65 oil and deep-pocketed partners for Frontier oilsands mine to make economic sense
Even if Ottawa approves the project, there are looming, unresolved economic questions that could determine whether it goes ahead
“Get out of Albertan’s way”, Environment minister speaks out on Teck Frontier mine decision.
Even if the Liberal government approves Teck Resources Ltd’s proposed Frontier oilsands project later this month, there are looming, unresolved economic questions that could determine whether the new mine is constructed.
Most notably, this includes the price of oil. A federal-provincial review panel last year noted that Teck had assumed oil prices would exceed US$95 per barrel, which is 70 per cent higher than the current West Texas Intermediate (WTI) price of about US$56 per barrel.
LEGAL AND REGULATORY
Vale makes US$671M tailings dam provisions
Brazil iron ore major Vale SA expects to book US$671 million in net new provisions related to its tailings dam decommissioning programme when it reports full-year 2019 and December-quarter financial results next week.
Roughly a year after the catastrophic Brumadinho tailings dam burst, which killed about 270 people, the company said it was still reeling from the incident, characterising 2019 as “the most challenging year of its history”.
However, it said it was making progress on the “decharacterisation” of nine at-risk tailings dams, with the first, 8B, completed in December and a second, Fernandinho, expected to be concluded later this year.
Vale has also completed construction of a containment structure for the Sul Superior dam in the city of Barão de Cocais, while containment structures for the B3, B4 and the Forquilhas dams will be concluded by June. Decharacterisation work at these sites will start thereafter.
The company said it was reducing existing provisions for the decharacterisation programme by $447 million. However, a closer look at the tailings dams of concern revealed some of them to have smaller internal dykes that were built using the same upstream construction method as the failed Brumadinho dam, and that these structures would therefore also be decharacterised.
This requirement led to a $315 million expansion in provisions.
https://www.mining-journal.com/bulks/news/1380819/vale-makes-ususd671m-tailings-dam-provisions
FINANCIAL
Trafigura in talks with Congo over financing cobalt buyer
Trading house Trafigura Group is in talks with the Democratic Republic of Congo about financing a new state-controlled company that will buy all the African nation’s hand-mined cobalt.
Entreprise Generale du Cobalt will need $80 million to $100 million to begin buying cobalt from so-called artisanal miners, according to people familiar with the matter, who asked not to be named because the negotiations are private. Mines Minister Willy Kitobo Samsoni said last week that hand-dug metal accounts for a fifth of cobalt output in Congo, the world’s biggest producer of the essential ingredient in lithium-ion batteries for electric vehicles.
Trafigura declined to comment. Kitobo didn’t respond to messages seeking comment, nor did Albert Yuma, chairman of state-owned miner Gecamines.
Gecamines set up EGC last year in a bid to influence cobalt prices and better regulate small-scale artisanal mining, long criticized for unsafe working conditions and its use of child labor. Warnings about long-term shortages caused cobalt prices to spike in 2017 and 2018, before slumping from too much supply. Lower prices cut production by artisanal miners last year, according to trading house Darton Commodities.
Congo supplies more than 60% of world cobalt production, mainly through industrial miners like Glencore Plc and China Molybdenum Co. The new company will have a monopoly on the purchase of all artisanally mined cobalt ore, which it will sell to processing plants in Congo.
Trafigura already purchases artisanally mined cobalt in the country, and is funding a pilot project to formalize such digging at Chemaf Sarl’s Mutoshi mine.
“The project is by no means perfect,” James Nicholson, Trafigura’s head of corporate responsibility, wrote in a report on the project last year. But “it has delivered a notable social and economic impact at a local level,” he said.
More than 200,000 people make their living digging cobalt and copper in Congo’s southeast Katanga region, according to the report.
https://www.mining.com/web/trafigura-in-talks-with-congo-over-financing-cobalt-buyer/
INNOVATION AND TECHNOLOGY
Australian companies, academia working on fast-charge Li-ion batteries for trams
Nanotechnology company VSPC, a 100%-owned subsidiary of Lithium Australia NL (ASX: LIT), together with CSIRO, the University of Queensland and Soluna is taking part in an A$5-million government-funded program to develop fast-charge lithium-ion batteries for use in new-generation trams.
In a press release, Lithium Australia said that battery-powered trams eliminate the need for overhead power lines, which are expensive, visually polluting and potentially hazardous.
“As well as expertise in the design of Li-ion batteries, CSIRO already has specific experience and intellectual property relating to fast-charge batteries for application in trams and other forms of transport such as e-buses, ferries and military applications,” the media brief states. “VSPC will partner with battery researchers at CSIRO’s Clayton site in Victoria to design, manufacture and test fast-charge Li-ion battery prototypes.”
PROJECTS
Prospects brighten for Northern Dynasty Pebble mine on leaked draft study
A leaked draft of an environmental impact statement (EIS) on Northern Dynasty’s (TSX: NDM) proposed copper-gold mine in Alaska has brightened up its prospects, suggesting nearby terrestrial freshwater resources and downstream fisheries could co-exist with the project.
While the US Army Corps of Engineers’ document is not final, it could mean the government is closer to issuing a long-sought permit for the $100 billion copper-gold mine in Bristol Bay, Alaska.
Shares jumped up as much 9.4% to 70 cents (Canadian) on the news on Wednesday, to close at 69 cents. On Thursday, the stock added to yesterday’s gains and was trading at 86 cents by 1:30 pm E.T., the highest value so far this year.
If permitted, Pebble would be North America’s largest mine, according to a study by the Center for Science in Public Participation. Current resource estimate includes 6.5 billion tonnes in the measured and indicated categories containing 57 billion pounds of copper and 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million silver ounces.
https://www.mining.com/prospects-brighten-for-northern-dynasty-pebble-mine-on-leaked-draft-study/
COMMODITY PRICES
