June Newsletter – 14.06.2021


  • Can mining save Cornwall’s economy?
  • China’s Zijin and Citic Metal to buy copper from DRC mine
  • Canada dominates Amazon energy and mining
  • Underwater mining reaches Mexican waters
  • Why China is betting on Minmetals’ success with direct lithium extraction technologies
  • Endeavour Silver announces Terronera Project drilling results
  • Anglo’s coal retreat may boost South African fossil-fuel output
  • Moody’s – New scores reflect negative credit impact of ESG risks on metals, mining and coal companies

Can mining save Cornwall’s economy?

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At Gwennap engineers are drilling down into geothermal waters

At an industrial site in central Cornwall there are a couple of boreholes, each just 12cm across but driven down a kilometre into the rock.

They are pumping up water containing what may turn out to be a magic ingredient when it comes to Cornwall’s future.

It’s lithium, the element that goes into making batteries, for electric cars amongst other things.

“It’s going to be absolutely crucial for the green industrial revolution and we think we have decent resources of it,” says Lucy Crane, from the company Cornish Lithium.

Two hundred years ago, this part of Cornwall was dubbed the richest square mile on earth thanks to its copper mines, says Lucy.

And these modern day prospectors are hoping that lithium represents a new green “gold in them there hills”. But it will take a couple of years before Cornish Lithium’s pilot projects can establish just how much is down there.


China’s Zijin and Citic Metal to buy copper from DRC mine

June 9 (Reuters) – China’s Zijin Mining Group said on Wednesday one of its subsidiaries and trader Citic Metal would each buy 50% of the copper production from the recently-launched first phase of its Kamoa-Kakula mine in the Democratic Republic of Congo (DRC).

The deals will see wholly-owned Zijin unit Gold Mountains (H.K.) International Mining Co Ltd and Citic Metal, part of state-owned conglomerate Citic Group, split the initial offtake from what is expected to be the world’s highest-grade major copper mine.

The agreements were done “on competitive arms-length commercial terms” and include treatment and refining charges based on the annual industry benchmark, Zijin said in a filing.

They are for both copper concentrate directly from Kamoa-Kakula, which started production on May 25, and blister copper processed at a nearby smelter, it added.

Canada-based Ivanhoe Mines, Zijin’s main partner in the Kamoa Copper joint venture that operates the mine, also announced the deals on Wednesday, saying that first-phase output is projected to be approximately 200,000 tonnes of copper per year.


Canada dominates Amazon energy and mining

China is the biggest foreign investor in Amazon hydropower, but Canadian companies have the most shares across environmentally risky sectors, new data shows.

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An oil project in the Yasuní national park, Ecuadorean Amazon

Canadian companies have the greatest share of foreign investment in Amazon energy and mining projects while companies headquartered in China control scarcely 10% across the hydropower and extractives sectors, according to new data published by US think-tank the Inter-American Dialogue.

“I don’t think anyone knew exactly how active Canada was in the Amazon,” said Lisa Viscidi, director of the Dialogue’s energy, climate change and extractive industries programme, adding that the lower level of Chinese participation was surprising.

The collection of data on hydroelectric, oil and gas, and mining in the Amazon aims to identify the companies and banks with projects in a vital ecosystem. The Amazon serves as a critical carbon sink and home to indigenous groups and several million species of plants and animals, according to the report “Energy and Mining in the Amazon”.

Throughout South America, 197 Canadian mining companies own or operate an estimated US$8 billion worth of projects. In an area the report defines as the “biogeographic Amazon” – the cradle of the ecosystem’s biodiversity that extends beyond legal-political boundaries – they control equity shares equivalent to 47 whole projects, the data shows.


Underwater mining reaches Mexican waters

The transition to clean energy requires minerals and companies are looking to the bottom of the sea. But non-existent legislation could mean a loss of biodiversity

Belgium, China and Russia are among the main backers of mining the seabed to extract the rare minerals needed for the energy transition. Yet, without a clear international framework for this practice, it could lead to environmental damage, biodiversity loss and the alteration of the seabed.

Fearsome-looking machines scrape the seabed in order to separate stones known as polymetallic nodules that are rich in cobalt, copper, manganese and nickel and pump the material to the surface through giant tubes. Sediment is returned to the sea via another conduit.

However, these  deep waters host species and ecosystems that provide sustenance and ecosystem balance, and   are highly vulnerable, according to recent studies by Greenpeace and WWF Europe.

Mexico was initially hesitant about this type of mining but now an international settlement could open the door for extraction in an area inhabited by vulnerable marine species.


Why China is betting on Minmetals’ success with direct lithium extraction technologies

High lithium recovery rates reported at Minmetals Salt Lake’s Yiliping brine project in China’s Qinghai province prompted Roskill to analyze the implications of the development of brine assets in the Asian giant.

Minmetals is employing a direct lithium extraction process developed by Xi’an Lanshen New Material Technology. The process uses aluminum hydroxide as an adsorbent to separate lithium from other impurities.

R&D investment at Yiliping totalled approximately $7 million and a 1kt scale pilot line started operation in April. After running consecutively for two months, test results showed improvements in lithium recovery rates and processing cost compared to historical processing methods.

Initially, Minmetals Salt Lake adopted a membrane technology provided by Jiuwu Hi-Tech, though a solar evaporation stage was still essential and it took 18-24 months to produce concentrated brine from which lithium could be extracted.

The new direct lithium extraction technology, on the other hand, shortens the extraction process to 20 days, can be applied in the initial concentration stage of processing and uses membrane separation later to extract lithium from solution, increasing the current capacity without significant investment.


Endeavour Silver announces Terronera Project drilling results

Endeavour Silver Corp. has announced that it has intercepted high grade silver-gold mineralisation in a number of structures near the Terronera vein, highlighting the potential of the area. Four structures (the San Simon, Fresno, Pendencia, and Lindero veins) are located immediately to the southeast of the Terronera vein, and the Los Cuates vein is located approximately 10 km to the northwest of the Terronera Project, in Jalisco, Mexico.

The drill results reported represent ongoing exploration work at the Terronera Project, with a plan to complete 16 000 m of drilling by the end of the year. Key targets include extensions of the Terronera vein, which hosts most of the reserves in the Terronera feasibility study that is currently in progress, and more regional targets to grow resources in the district. As the feasibility study is nearing completion, all 2021 drill results will not be included as part of the development plan.


Anglo’s coal retreat may boost South African fossil-fuel output

Under pressure from investors and environmentalists, Anglo American exited its South African coal business this week, but the spinoff could have an unforeseen outcome: higher output of the most polluting fuel.

Anglo’s CEO Mark Cutifani said it was a “responsible transition” from thermal coal, but July Ndlovu, the head of spinoff Thungela Resources, has a different perspective. Ndlovu wants South Africa’s biggest coal exporter, which began trading in Johannesburg and London on Monday, to develop new resources and buy rivals.

“I didn’t take up this role to close these mines, to close this business,” Ndlovu said in a June 8 interview at Thungela’s new offices in Johannesburg’s Rosebank business district. “I took this role to do what is right for the people of this country.”

The CEO’s bullishness about an industry where prices are currently surging highlights the potentially unintended consequences of the world’s biggest mining companies stepping away from thermal coal. While Anglo’s exit burnishes its appeal to institutional investors with ambitious climate goals to meet, expansion at Thungela’s could mean the spinoff generates more greenhouse gases than had the mines been gradually run down by Anglo.


Moody’s – New scores reflect negative credit impact of ESG risks on metals, mining and coal companies

New ESG issuer profile and credit impact scores cover 45 metals & mining companies and 17 coal companies globally
Scores provide greater clarity, consistency and differentiation on ESG risk exposure, degree of credit impact
Moody’s Investors Service today published environmental, social and governance (ESG) issuer profile and credit impact scores for various rated issuers in the global metals and mining and coal sectors.

This follows the publication of ESG scores for a range of corporate issuers, utilities and US state and local governments in June 2021, and for sovereign issuers in January 2021.

The scores support Moody’s integration of ESG in its credit analysis, providing greater clarity, consistency and differentiation on risk exposure and the degree of credit impact. For example, the latest scores highlight that ESG factors have an overall negative credit impact on metals and mining companies and a more pronounced negative credit impact on coal companies.

“Nearly all metals and mining companies and coal companies have exposure to environmental considerations that carry very high credit risks,” said Benjamin Nelson, Moody’s VP-Senior Credit Officer. “Social risks are also significant in these sectors, driven by health and safety issues and responsible production risks, with some differentiation by commodity and location of operations.”

Carbon transition is the biggest environmental risk for thermal coal companies, especially in the United States, driven by growing global demand and policy support for less carbon-intensive and cleaner energy. Metals and mining companies face the most risk from their dependence on natural capital and the physical damage that mining can cause.

A company’s ability to mitigate these various ESG considerations and their significance relative to other credit drivers determines the degree to which the considerations affect its credit rating. Strong governance is an important mitigant for many highly rated companies in the metals and mining and coal sectors.



Link for more detailed information

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