July Newsletter – 19.07.2021


  • Dawn of a mining supercycle. Are you taking the fizz?
  • UPDATE 2-China’s Ganfeng to buy Millennial Lithium for up to $280 mln
  • Coal-powered bitcoin mining soars in Kazakhstan following Chinese ban
  • Congo likely to start artisanal cobalt buying within 8 weeks
  • Copper price down while China’s smelters reduce production
  • Russia considers measures to tap mining profits once export tax ends
  • It’s not just mining. Refining holds U.S. back on minerals
  • EIA says U.S. 2020 coal output lowest since 1965
  • Why Nauru Is Pushing the World Toward Deep-Sea Mining

Dawn of a mining supercycle. Are you taking the fizz?

Published on Thursday, a new Wood Mackenzie forecast for the green energy transition, or GET™ (a new MINING.COM trademark we’re making freely available) is, for good reason, already in wide circulation.

Written by global metals expert Simon Morris, VP for Research, Metals & Mining Global Metals, at the Scotland-based analytics firm, the whitepaper is titled:

Champagne supercycle: Taking the fizz out of the commodities price boom

Scots may be known for their frugality, but at this website we don’t believe in taking the fizz out of anything so we decided to get on the wagon and take another look at Woodmac’s GET and planet decarbonisation predictions.

Under Woodmac’s most aggressive scenario for cutting the world’s carbs (like a strict keto diet – you’re not allowed beer, only Scotch), Morris says $50 trillion must be invested by 2050 “to electrify infrastructure and engineer out the aspects of modern life that most significantly contribute to carbon emissions”.

$50 trillion certainly looks and quacks like a supercycle duck (or on current trajectory the combined worth of Bezos/Scott, Musk/c and Gates/French in 2050) and miners would be pleased as punch for even a snifter of that, considering the dregs the industry has had to be content with in the past.

But Morris warns not to pop the corks just yet.

While the report does say “a supercycle is coming,” it’s not here yet, and overall the Morris metals and mining message is a sobering one – essentially saying mining and metals pundits are already drinking, but the party hasn’t started.


UPDATE 2-China’s Ganfeng to buy Millennial Lithium for up to $280 mln

July 16 (Reuters) – China’s Ganfeng Lithium Co Ltd said on Friday it would buy Argentina-focused Millennial Lithium Corp for about C$353 million ($280 million), extending a deal spree by one of the world’s biggest producers of the white metal.

Prices for lithium, a key ingredient in electric vehicle batteries, are up more than 65% year-to-date in China amid resurgent demand following a three-year downturn.

The bid by Ganfeng unit GFL International at C$3.60 per share is a premium of 8.4% to Vancouver-based Millennial’s closing price of C$3.32 on Thursday, the company said in a filing to the Shenzhen Stock Exchange.

Millennial recommended that shareholders support the offer, which it said had unanimous board approval and backing from its largest investor.

The deal, expected to close in the fourth quarter of 2021, provides “a very attractive opportunity for Millennial’s shareholders to realize full liquidity at a substantial premium to the current share price,” CEO Farhad Abasov said.

Ganfeng has so far this year agreed to buy the shares it does not already own in Mexico-focused Bacanora Lithium for $264.5 million, as well as stakes in a lithium mine in Mali and a salt lake in China for $130 million and 1.47 billion yuan ($227 million), respectively.


Coal-powered bitcoin mining soars in Kazakhstan following Chinese ban

Chinese bitcoin mining has almost entirely ceased since the government restricted cryptocurrency use in May, meaning much of this activity has moved elsewhere – including to Kazakhstan, where fossil fuels, including coal, produce more than 90 per cent of the nation’s electricity supply.

Bitcoin relies on a network of computers known as miners that solve mathematical problems to secure the currency, consuming vast amounts of electricity in the process. Data from the Cambridge Centre for Alternative Finance (CCAF) shows that the previously rapid investment in new bitcoin mining plants stopped in China from September 2019 to April 2021 in anticipation of the ban.

China’s share of global bitcoin mining power declined from 75.5 per cent to 46 per cent over the period, while the existing miners remained static in size and waited for news. During the same period the global mining share of Kazakhstan rose from just 1.4 per cent to 8.2 per cent, catapulting it to third place after the US.


Congo likely to start artisanal cobalt buying within 8 weeks

  • Congo selects Kasulo as first site
  • Congo’s artisanal miners second largest source of cobalt
  • Traders had expected start of buying by now

LONDON, July 12 (Reuters) – The Democratic Republic of Congo is expected to start buying cobalt from artisanal miners within eight weeks as it aims to become the only legal buyer from miners in the informal sector.

The government is looking to capitalise on soaring demand for rechargeable lithium-ion batteries for electric vehicles and to curb illegal exports which strip the state of needed tax revenue. It is also aiming to end unsafe working practices and child labour.

Artisanal miners extract cobalt by hand in precarious conditions, often working on illegal or only semi-regulated sites. Most of this material is bought by Chinese traders and sold on to refiners in China.

The state buyer, Entreprise Generale du Cobalt (EGC), launched in March and announced a responsible sourcing standard.


Copper price down while China’s smelters reduce production

China’s major copper smelters lowered production in June by 3.6% from the previous month due to seasonal maintenance, state-backed research house Antaike said on Monday.

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Copper for delivery in September fell 0.5% from Friday’s settlement price, touching $4.321 per pound ($9,506 per tonne) midday Monday on the Comex market in New York.

The 22 smelters in Antaike’s production survey churned out 745,700 tonnes of refined copper cathode last month, which was still up 6.7% year-on-year, as producers including Tongling Nonferrous carried out overhauls.

January-June production from the group came in at 4.61 million tonnes, Antaike said, up 12.4% from a coronavirus-impacted first half of 2020.


Russia considers measures to tap mining profits once export tax ends

Russia is considering longer-term measures to grab a bigger slice of mining companies’ profits once a temporary export tax finishes at the end of this year, according to people familiar with the matter.

The government last month announced duties of at least 15% on steel, nickel, aluminum and copper exports from Aug. 1 — with varying rates — to help cool surging commodities prices and boost state coffers. It said the move would be temporary and that it would seek to develop more sustainable measures.

Officials are now mulling changes to mineral extraction taxes, with rates likely linked to raw-material prices so that levies rise when the market does, the people familiar with the matter said, asking not to be identified as the information isn’t public. That would probably replace export taxes from 2022, with a final decision taken after parliamentary elections in September. Other options of tapping mining profits may still be discussed, they said.


It’s not just mining. Refining holds U.S. back on minerals

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Republicans are sensing a vulnerability in the White House’s avowed allegiance to renewable energy, questioning whether the Biden administration will embrace mining projects to ramp up the United States’ access to the minerals vital to building electric vehicles, wind turbines and solar panels.

They have taken aim at a Biden administration decision to delay a land swap that would facilitate copper mining on sacred Apache land and another to postpone orders to open Alaskan land to mineral development (E&E Daily, April 29).

But experts say mining expansion isn’t a silver bullet in the United States’ quest to become competitive with China on critical minerals during the energy transition. Instead, they argue that the key problem the Biden administration must swiftly address is farther up the supply chain: the dearth of U.S. mineral processing plants and refineries.

“Even if we dig up more minerals here, the majority would have to be shipped abroad for processing,” said Abigail Wulf, director of the Center for Critical Minerals Strategy at Securing America’s Energy Future.

Supply chain weaknesses have captured the White House’s attention, with officials saying one of President Biden’s top priorities will be securing domestic access to the full range of minerals needed to make the United States a significant player in manufacturing technologies that can help combat global warming (Greenwire, June 8).

The White House has maintained that this effort will encourage both mining and processing.


EIA says U.S. 2020 coal output lowest since 1965

The Energy Information Administration (EIA) on Wednesday said U.S. coal production fell in 2020 to its lowest level since 1965 due to low global demand in the wake of the coronavirus pandemic.

The federal agency said in a report https://www.eia.gov/todayinenergy/detail.php?id=48696 that U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019.

The EIA said the pandemic slowed global demand for coal, and some U.S. mines were idled for extended periods to slow the spread of the virus among workers, with exports declining significantly in April 2020.

U.S. coal-fired generation fell 20% year-on-year and exports were 26% lower in 2020 than in 2019.

Coal production in Wyoming, where more coal is produced than in any other state, was 21% lower in 2020 than it was in 2019, while the second-largest producer West Virginia saw an annual slide of 28%, the agency said.

The EIA explained that the decline was also as a result of less U.S. electric power sector demand for the non-renewable energy source, while lower natural gas prices made coal less competitive for power generation.

Coal had been the primary fuel for U.S. power plants for much of the last century, but its use has been declining since peaking in 2007.

Gas overtook coal as the leading fuel for U.S. power plants in 2016, according to federal data, and has held that title ever since.

As of late-May this year, U.S. power companies plan to retire or convert over 5,800 megawatts (MW) of coal-fired plants in 2021 to gas after shutting over 10,400 MW in 2020, according to EIA and Thomson Reuters data.


Why Nauru Is Pushing the World Toward Deep-Sea Mining

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A small South Pacific nation gave the International Seabed Authority a two-year deadline to finalize the rules for mining the deep sea, but the jury is still out on when, exactly, deep-sea mining will begin.

Nauruans have suffered a legacy of destructive extraction. Like many other small South Pacific nations, Nauru was devastated by colonial powers. Over time, Germany, Great Britain, Australia, New Zealand, and Japan stripped the country of white gold, or phosphates, leaving large swaths of the land uninhabitable moonscapes of white pinnacles. The roughly 10,000 people who live on the island crowd along the coastline, the only fertile land left, and are threatened by erosion and climate change. For over a millennia, nesting seabirds sought refuge on Nauru and ensured the richness of phosphate, but now, they don’t come as often.

The geographically isolated country is roughly a third the size of Manhattan, New York. But Nauru has recently taken up an outsized spot on the world stage. It used an obscure clause in the United Nations Convention on the Law of the Sea to give the International Seabed Authority (ISA), the independent body tasked with regulating the ocean floor in international waters, a two-year deadline to finalize the exploitation regulations of the Mining Code—the set of rules that will determine where, when, and how the deep sea can be mined.

The ISA must now work to either finalize the exploitation regulations, or provisionally approve mining licenses under the draft regulations. Nauru kick-started the race on behalf of Nauru Ocean Resources Inc., a wholly owned subsidiary of DeepGreen, a deep-sea mining company based in Vancouver, British Columbia.



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