July Newsletter – 11.07.2022

  • Giant Congo cobalt mine exports at risk as investors feud
  • Volkswagen breaks ground on $20 billion battery unit’s first cell plant
  • Tussle over $5 billion wages a new risk to India’s coal supply
  • UK coal mine decision delayed as politics intervenes
  • Tycoon whose bet broke the nickel market walks away a billionaire
  • Tianqi Lithium raises $1.7bn through IPO in Hong Kong
  • Mining the deep sea for battery materials will be dangerously noisy, study finds
  • Miner BHP loses appeal against $6 billion-plus Brazil dam case
  • US largest lithium mining project faces strong resistance

Giant Congo cobalt mine exports at risk as investors feud

An intensifying feud between shareholders of the giant Tenke Fungurume Mining SA in the Democratic Republic of Congo may lead a court-appointed administrator to block its exports of copper and cobalt.

Tenke Fungurume operation

The administrator, Sage Ngoie Mbayo, began ordering the export suspension over the past week as he tries to resolve a dispute over royalty payments between CMOC Group Ltd. and state-owned miner Gecamines, according to four separate letters sent to a Congolese tax agency, and three export agents including a unit of France’s Bollore Group. The documents seen by Bloomberg were verified by Ngoie’s office, which said the suspension would take some time to take effect.

CMOC said Ngoie doesn’t have the authority to stop exports. Tenke “is always under the legitimate and effective control of the management team nominated by CMOC,” company spokesman Vincent Zhou said in an emailed response Friday. “The production and operations, including transportation and export, are normal.”


Volkswagen breaks ground on $20 billion battery unit’s first cell plant

Volkswagen AG broke ground on a new battery plant in Germany on Thursday, saying the factory marks the first step in an effort that will generate more than 20 billion euros ($20.4 billion) in annual revenue by the end of the decade.

The Salzgitter venture is one of six battery plants VW has planned for Europe. PowerCo, the unit formed to oversee the carmaker’s global battery business, is expected to invest more than 20 billion euros in five of the factories by 2030, creating roughly 20,000 jobs in Europe, according to a statement.

Automakers from VW to General Motors Co. are exploring different business models as they race to electrify their lineups and catch Tesla Inc., the world’s top seller of electric vehicles. They’re forging partnerships with battery cell makers and mining companies as they try to secure materials and know-how.

Salzgitter is home to VW’s main motor factory, and last year the carmaker opened an $80 million facility there to research, develop and test EV batteries. Roughly 2 billion euros will be invested in the cell factory by 2026, where production is scheduled to begin in 2025. At full capacity, the plant will be able to produce 40 gigawatt-hours of cells per year, enough for roughly 500,000 EVs, according to the company.


Tussle over $5 billion wages a new risk to India’s coal supply

Workers are seeking a 47 per cent increase in wages — having earlier demanded a 50 per cent hike — while Coal India has offered a 3 per cent raise. A group of unions has written to the nation’s Coal Minister Pralhad Joshi and urged him to intervene to help the sides conclude negotiations.

A key trade union at Coal India Ltd. has warned workers may strike over delays in finalizing salary increases, a move that would risk complicating efforts to meet soaring fuel demand.

Talks held July 1 failed to reach any agreement over a pay deal, said Sudhir Ghurde, who represented Akhil Bharatiya Khadan Mazdoor Sangh, one of the leading unions, at the meeting.


UK coal mine decision delayed as politics intervenes

A UK government decision on whether to allow a new coal mine in Cumbria, northwest England, was delayed for up to six weeks after Michael Gove, the minister responsible for the relevant department,was sacked by Prime Minister Boris Johnson.

Johnson himself said on Thursday he was resigning, bowing to a barrage of calls to quit from ministerial colleagues and lawmakers.

Gove, Secretary of State for Levelling Up, Housing and Communities,had been expected to announce on Thursday whether the mine, being developed by privately owned West Cumbria Mining and which seeks to extract coking coal for the steel industry, should go ahead.

“Regrettably, Planning Ministers will not be in a position to publish a decision by this date,” Gove’s former department said in a letter to environmental group Friends of the Earth seen by Reuters.

Britain has a climate target to reach net zero emissions by 2050, and the government’s independent climate advisers, the Climate Change Committee (CCC), had warned allowing the mine would make reaching this target more difficult.

West Cumbria Mining has said the project will have local benefits and create around 500 jobs.

A decision on the mine is now expected to be made on or before August 17, the department for Levelling Up, Housing and Communities said in another letter to Friends of the Earth.


Tycoon whose bet broke the nickel market walks away a billionaire

Xiang Guangda, chairman of Tsingshan Holding Group.

By 2:08 p.m. Shanghai time on March 8, it was clear that Xiang Guangda’s giant bet on a fall in nickel prices was going spectacularly wrong.

Futures had just skyrocketed above $100,000 a ton and his trade was more than $10 billion underwater. It was threatening not only to bankrupt Xiang’s company, but to trigger a Lehman Brothers-like shock through the entire metals industry and possibly topple the London Metal Exchange itself.

But Xiang was calm. Within hours, more than 50 bankers had arrived at his office wanting to hear how he planned to respond to the crisis. He told them simply: “I’m confident that we will overcome this.”

And he did.

Four months on, the nickel price is falling, as Xiang had predicted. The coterie of banks led by JPMorgan Chase & Co. that were baying for his blood has been repaid. He has closed out nearly all his short position in nickel, making a loss on the trade of about $1 billion — a manageable sum given the profits being generated elsewhere in his business empire, say people who know him.

Crucially: the man nicknamed ‘Big Shot’ in Chinese commodities circles is poised to walk away from the fiasco with his multibillion-dollar mining and steelmaking company, Tsingshan Holding Group Co., intact and even expanding.


Tianqi Lithium raises $1.7bn through IPO in Hong Kong

The deal’s joint sponsors include China International Capital, Morgan Stanley, and CMB International Capital.

Chinese mining firm Tianqi Lithium has raised HK$13.5bn ($1.7bn) upon listing its shares on the Hong Kong Stock Exchange, reported Bloomberg News citing parties familiar with the development. The Chengdu-based firm sold 164.1 million shares at HK$82 each. Cornerstone buyers comprise South Korea’s LG Chem and the state-owned China Aviation Lithium Battery.

Financial Times reported Tianqi Lithium chair Jiang Weiping as saying at a press convention final week: “Supply exceeded demand for most of the past two decades in the lithium industry, but that dynamic flipped in 2021 with gaining popularity over electric vehicles. “We think it will be a far-reaching and long-term development.” The offering’s joint sponsors include Morgan Stanley, China International Capital and CMB International Capital, according to Bloomberg News.

Tianqi’s secondary listing forms part of the ‘newest fundraising rush’ of Chinese firms involved in electrical automobile battery and materials productions as the country looks to boost its domestic production of these commodities. Tianqi Lithium, which owns lithium mines in Australia, raised $110m through an initial public offering in Shenzhen in 2010. The firm is engaged in lithium resource investment, lithium concentrate extraction and advanced lithium speciality compound production.


Mining the deep sea for battery materials will be dangerously noisy, study finds

A slideshow of texts are projected onto the side of the Hidden Gem during a demonstration against deep-sea mining

The race is on to figure out how to protect the ocean abyss as deep-sea mining operations look to extract minerals like nickel, cobalt, and copper from the sea floor. But there’s one potential risk to the deep-sea environment that tends to fall under the radar. Not only will mining dredge up the seafloor, but it’ll also create a lot of noise that poses its own problems for marine life, according to a newly published paper in the journal Science.

People have talked about mining the deep sea for minerals for decades, and that future is almost here. Driven by a need for more of the minerals used in everyday gadgets and batteries, the first efforts to raid polymetallic nodules at the bottom of the ocean for these resources could begin in earnest as soon as next year. The noise from those operations could affect marine life even hundreds of kilometers away, the authors of the new paper found.

Within about 6 kilometers (3.73 miles) of a mine, the noise could be equivalent to or even louder than a rock concert. That exceeds the threshold, 120 dB, that the US National Marine Fisheries Service says could negatively impact marine mammals’ behavior. The noise travels up to 500 kilometers (310 miles) away, where it would weaken but still be louder than ambient noise levels during fair weather.


Miner BHP loses appeal against $6 billion-plus Brazil dam case

LONDON, July 8 (Reuters) – Global mining giant BHP Group (BHP.AX) has lost an appeal in a London court seeking to block a 5 billion pound-plus ($6 billion-plus) lawsuit by 200,000 Brazilians over a 2015 dam failure that triggered Brazil’s worst environmental disaster.

In what claimant lawyers described as a “monumental judgment”, the Court of Appeal on Friday overturned previous judgments and ruled that the group lawsuit – one of the largest in English legal history – could proceed in English courts.

“The days of huge corporations doing what they want in countries on the other side of the world and getting away with it are over,” said Tom Goodhead, managing partner of law firm PGMBM, which represents Brazilian individuals, businesses, churches, municipalities and indigenous people.

BHP, the world’s largest mining company by market value, said it would consider a Supreme Court appeal.

The collapse of the Fundao dam, owned by the Samarco venture between BHP and Brazilian iron ore mining giant Vale (VALE3.SA), killed 19 as more than 40 million cubic metres of mud and mining waste swept into the Doce river, obliterating villages and reaching the Atlantic Ocean more than 650 km (400 miles) away.


US largest lithium mining project faces strong resistance

The planned Thacker Pass lithium mine in the remote north of US state of Nevada, the largest known lithium deposit in the United States, has drawn concerns and protests from environmental groups, Native American tribes and local ranchers.

The proposed lithium clay mining development project, one of the largest in the world, is located in Humboldt County, about 25 miles from the Nevada-Oregon border.

The mine is designed to cover 9 square miles of public land and operate on one of the largest lithium deposits in the country, according to the Nevada Division of Environmental Protection (NDEP).

Using ore crushing, acid leaching and processing methods, the mine aims to produce lithium carbonate, which will be turned into electric car batteries, according to the NDEP.

The project run by Lithium Americas, the mining company developing the mine site, has become a hotspot of controversy over the past year as it faces strong resistance from protesters, with some having been camping out near the project site for a long time.

The company received a permit from the US Bureau of Land Management (BLM) to develop the mine in January 2021.



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