June Newsletter – 15.06.2020



  • Russia’s gold mine production growth to overtake China’s by 2029 – report
  • China’s Zijin Mining to buy Guyana Goldfields for $238 million
  • Rare earths processing facility opens in Colorado
  • Chile, Poland and Japan mining corporations dig out USD 200 million backing
  • Papua New Guinea amends oil, gas, mining laws to boost revenue
  • The treasure trove hidden in discarded computers
  • Australian economy and miners to profit from Brazil’s coronavirus outbreak
  • Zijin Mining to acquire majority stake in Tibet Julong Copper for $548m
  • Edenville Energy signs coal mining deal

Russia’s gold mine production growth to overtake China’s by 2029 – report

A report by Fitch Solutions states that global gold mine production growth is expected to rebound in the coming years underpinned by higher gold prices and mergers between major mining firms.

“We forecast global gold production to increase from 106moz in 2020 to 133moz by 2029, averaging 2.5% annual growth,” the document states. “This would be an acceleration from the average growth of just 1.2% over 2016-2019.”

Putting the spotlight on Russia, Fitch predicts that the eastern European giant is set to overtake China a decade from now, growing from 11.3moz in 2020 to 15.5moz in 2029. This would represent average annual growth of 3.7% during the period and would see Russia accounting for 11.6% of global output by 2029, compared to 10.6% in 2020.

In the market analyst’s view, Russia’s increase in gold production is being fueled by the ongoing and expanding US sanctions.

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“The rising risk of Russian state banks being frozen out of dealing in dollar-denominated assets all together as bilateral relations remain strained is pushing the Russian central bank to increase its holdings of gold. As long as tensions with the US remain, domestic demand for gold is set to remain,” the report reads.

Australia, on the other hand, is set to see a 2.2% average annual growth production over the coming years but close to that of China, increasing from 11.7moz in 2020 to 14.2moz by 2029.

One of the major driving forces behind Australia’s growth is OZ Minerals’ development at its A$916-million Carrapateena copper-gold project, one of the largest mines being built in the country.

Carrapateena will be a 4.25mnt per annum copper-gold underground operation, with an estimated life of 20 years. Life-of-mine average annual production is expected to be 65kt of copper and 67koz of gold.


China’s Zijin Mining to buy Guyana Goldfields for $238 million

BEIJING (Reuters) – China’s Zijin Mining (601899.SS) (2899.HK) said on Friday it would acquire Guyana Goldfields (GUY.TO) for C$323 million ($238 million), bringing an end to a protracted takeover battle for the Canada-listed gold miner.

Toronto-based Guyana Goldfields announced on June 3 that it had received a binding proposal from an unnamed overseas-based miner to acquire the company, valuing it around 35% higher than a previously accepted offer from Silvercorp Metals (SVM.TO).

On Friday, Zijin, one of China’s biggest state-controlled gold producers, was confirmed as the mystery bidder behind the higher all-cash offer to buy Guyana Goldfields, whose flagship asset is the Aurora gold mine in Guyana, for C$1.85 per share.

Zijin has been on an acquisition spree, wrapping up its purchase of Continental Gold for C$1.3 billion in March and earlier this week taking a 50.1% stake in a copper miner in Tibet for $548 million.

“The all-cash offer from Zijin represents a significant premium to the amended Silvercorp offer price and is an excellent outcome for Guyana Goldfield’s shareholders,” Guyana Goldfields Chief Executive Alan Pangbourne said in a statement.


Rare earths processing facility opens in Colorado

USA Rare Earth, the funding and development partner of the Round Top heavy rare earth project and Texas Mineral Resources announced Thursday that its rare earths pilot plant processing facility in Wheat Ridge, Colorado has received the required permits and officially opened.

Once fully commissioned, the plant will be focused on group separation of rare earths into heavy (dysprosium, terbium), middle, and light (neodymium, praseodymium) rare earths (REE’s) and will be the first facility to separate the full range of rare earth elements in the US since 1999.

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Colorado mountains

USA Rare Earth’s pilot plant is the second link in a 100% US-based rare earth oxide supply chain, drawing on feedstock from its Round Top deposit.


The final phase of the pilot work will be the further separation of high-purity individual REE compounds. The pilot plant will also be focused on recovery of non-REEs focusing on lithium, uranium, beryllium, gallium, zirconium, hafnium and aluminum, all of which are on the US Government Critical Minerals List.

Confirming the recovery of these critical non-REEs will support upgrading the measured and indicated resources to proven and probable reserves (with no in-fill drilling required), and completion of the Preliminary Feasibility Study (PFS) for the Round Top project, the company said.

“Establishing an independent domestic rare earth and critical minerals supply chain is monumental for USA Rare Earth and for the United States, overcoming reliance on China for materials and processing that are essential for defense applications and advanced technology manufacturing,” said Pini Althaus, USA Rare Earth CEO.

Althaus also said the opening is another step forward for USA Rare Earth’s objective to build the first rare earth and critical minerals processing facility outside China and to bring the Round Top project into full commercial production – which they estimate to be in 30 months.


Chile, Poland and Japan mining corporations dig out USD 200 million backing

Four Chilean, Polish and Japanese mining companies have received a combined USD 200 million from Polish development bank, Bank Gospodarstwa Krajowego. Chilean mining company Sierra Gorda SCM, Polish silver and copper producer KGHM Polska Miedz and Japanese copper, nickel and gold miner Sumitomo Metal Mining, and Tokyo-headquartered Sumitomo Corporation, one of the eighth largest companies in Japan, are the benefitting companies. Gide Loyrette Nouel lawyers in Warsaw and London advised the Polish bank on providing the financing, which has been provided by way of a credit facility agreement signed by Sierra Gorda with Bank Gospodarstwa Krajowego. The bank loan will be put towards supporting Sierra Gorda’s continuing pursuits, taking into account the economic environment caused by Covid-19. The loan agreement will come into effect once the formal conditions laid out have been met. Secured by a corporate guarantee issued by Sierra Gorda’s owners, the loan guarantee’s value derives from the shares owned in the company, at 55%, as well as from the total value of the bank loan. In total, the guarantee is for USD 110 million. Sierra Gorda is one of the largest mining operations to take off in Chile’s Antofagasta region, while KGHM Polska Miedz is one of the biggest companies in Poland, with operating mines in Canada, the United States, Chile and Poland. Sumitomo Metal Mining, the third largest copper-maker and largest producer of nickel and gold in Japan, has mining, smelting and refining operations across the globe, including in Australia, Peru, Brazil, the US and Chile.


Papua New Guinea amends oil, gas, mining laws to boost revenue

  • Oil, gas law change could impact LNG expansion
  • Mining law change deals with lapsed leases
  • PM Marape says PNG just wants fair share (Adds Exxon comment in paragraph 9)

MELBOURNE, June 11 (Reuters) – Papua New Guinea has passed legislation seeking to boost benefits to the country from oil, gas and mine developments, which could impact talks on a stalled project planned by Exxon Mobil Corp.

Prime Minister James Marape came to power a year ago on a platform to lift the country out of poverty by getting a bigger share of wealth from the country’s energy and minerals. His government this week secured an emergency loan from the International Monetary Fund.

The country would not break legitimate exploration or development contracts or agreements, Marape said in a posting on his Facebook page after the legislation was passed on Wednesday.

“I can assure our investors that we know they must make money for their shareholders too, so we will not be greedy, but we (are) just asking for a fair share, if they want to harvest our resources,” Marape wrote.


The treasure trove hidden in discarded computers

What do you do with an old hard disk drive, the kind that still spins up inside most PCs, once it reaches the end of its life?

If Allan Walton has his way, parts of it could soon be propelling your next car along the road, assuming you go electric.

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The University of Birmingham professor is a director in the firm Hypromag, which extracts and recycles neodymium magnets from used hard disks.

Neodymium is a rare earth metal – chemical elements considered essential ingredients in many of today’s must-have technologies, from smartphones to TV screens. Neodymium is used, among other things, to make magnets that turn the motors that drive electric vehicles.

Prof Walton believes that in the next 10 years, his company could be recycling enough neodymium to meet a quarter of the UK’s demand – almost all of which is currently imported from China.

Once electric vehicles are assembled and running, they are broadly seen as being more environmentally friendly than cars with an internal combustion engine. But making magnets from rare earths is far from green.

Though processes needed to refine rare earths use many of the same chemicals found in oven cleaners and cosmetics, their waste can be destructive if not properly controlled.

At one mining site, Bayan Obo in Inner Mongolia, they have contributed to a vast toxic lake.

Next to the mine itself is a tailing dam, a reservoir created by what is left over from separating rare earths.

Steel and aluminium already have large established recycling programmes which help to reduce chemical processing.

However, rare earth minerals used in phones, hard drives and old wind turbines are generally lost.

Four years ago at the University of Birmingham, Prof Walton and his mentor, Prof Rex Harris, discovered that running hydrogen gas through old hard-disk drives turns the magnets into powder which can be harvested, re-packed and coated, to become new magnets.

Not only will the project offer a greener solution to the rare earths market, the global demand for these minerals means there is a business case to be built.


Australian economy and miners to profit from Brazil’s coronavirus outbreak

The Australian economy and its largest iron ore miners — BHP, Rio Tinto and Fortescue Metals — are set to benefit from Brazil’s misfortune once again.

Key points:

Vale is one of the world’s biggest iron ore miners

A judge ordered Vale to close three of its mines after a COVID-19 outbreak

Reduced iron ore supply will benefit Australian miners, despite the Government’s tense relationship with China.

A coronavirus outbreak has infected at least 188 workers, employed by mining giant Vale SA, at its Itabira mining complex in the south-eastern state of Minas Gerais.

It led to a Brazilian judge ordering on Saturday that all activity be suspended at three of Vale’s mines in that complex.

This court decision is expected to send jitters through the global iron ore market as 12 per cent of Vale’s iron ore output will come off the market.

Vale produced 302 million tonnes of iron ore last year, with the Itabira complex accounting for a significant 36 million tonnes.

Like Australia, Brazil is one of the world’s major iron ore exporters.

But unlike Australia, the South American nation is plagued with the second-highest number of COVID-19 infections in the world (with 692,000 cases).

Brazil’s handling of the pandemic, particularly in mining regions, has led to worries about the reduced supply of iron ore in the world.

Australia to benefit from Brazil’s outbreak

It also comes at a time of rapidly growing demand from Australia’s biggest trading partner, China.


Zijin Mining to acquire majority stake in Tibet Julong Copper for $548m

The transaction is part of Zijin Mining’s plans to further increase its resources reserves and realise its sustainable development

China’s Zijin Mining Group has signed an agreement to acquire a majority stake in Tibet Julong Copper for $548m in cash.

Fujian-based Zijin is acquiring a 50.1% stake in Julong Copper through its wholly-owned subsidiary Tibet Zijin.

The stake will be acquired from Zangge Group, Zangge Holding, Zhongsheng Mining, Shenzhen Chenfang and Huibaihong Industrial.

The transaction is part of Zijin Mining’s plans to further increase its resources reserves and realise its sustainable development.

Julong Copper owns three copper mines

Incorporated in December 2006, Julong Copper is involved in exploration and development of copper mines.

Currently, the company owns the Qulong Copper and Polymetallic Mine, the Rongmucuola Copper and Polymetallic Mine and the Zhibula Copper and Polymetallic Mine.

The projects are located at a linear distance of 20km southwest of the county seat of Maizhokunggar County.

The Qulong Copper and Polymetallic Mine and the Rongmucuola Copper and Polymetallic Mine are a complete porphyry-type copper deposit, while the Zhibula Copper and Polymetallic Mine is a skarn copper deposit.

The company has obtained mining permits for the Qulong Copper and Polymetallic Mine and the Zhibula Copper and Polymetallic Mine.

The three mines have 7.9576 million tonnes of copper metal volume in aggregate, according to the filed resource reserve volume reports.

In addition, the mines are estimated to possess 370.6 thousand tonnes of associated molybdenum metal volume in total.

Zijin Mining stated: “As the Rongmucuola Copper and Polymetallic Mine will share the same mining pit and processing plant with the Qulong Copper and Polymetallic Mine, its investment before production commencement has already been included in the Qulong Copper and Polymetallic Mine.

“As the stripping ratio is small, stripping of infrastructure is not required. The project can commence production once the mining permit is obtained.”


Edenville Energy signs coal mining deal

The agreement will come into effect once COVID-19 related restrictions are lifted.

The deal covers mining and processing activities at Rukwa, said Edenville Energy, also noting that under its terms ILTL will become a customer of the thermal coal firm. The agreement will also cover sales, marketing, offtake and an asset level loan.

ILTL will enter into a long-term coal supply agreement that involves the initial purchase of 3,000 tonnes of washed coal per month at standard market rates, which will increase to 5,000 tonnes a month over 12 months.

Edenville Energy said the deal would also enable it to leverage ILTL’s logistics network and “expertise with respect to existing and potential customers” to improve the likelihood of securing long-term contracts. Edenville plans to monetise the Rukwa coal deposit via the development of a mine-mouth coal-to-power project providing electricity to the Tanzanian power grid.

A loan agreement before the restart of mining operations at Rukwa will see the parent company of ILTL provide an up to US$1 million loan to Edenville Energy.

Edenville Energy will continue to hold the mining licence for Rukwa and will be responsible for mining approvals and compliance.

“This announcement heralds a new chapter for Edenville,” said chief executive Alistair Muir. “I am confident we have now struck a beneficial arrangement for our shareholders, which we hope will set the pattern for our future strategic partnership with ILTL.”



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