March Newsletter – 02.03.2020



New energy future, coronavirus near top of PDAC agenda
Rio to begin copper production at Winu in 2023
Exclusive: Tesla in talks to use CATL’s cobalt-free batteries in China-made cars – sources
Nornickel sees no major palladium substitution in near term
ICA creates global standard for responsible copper
Canadian pipeline proponent to suspend work
China ferrous metals’ sell-off intensifies amid pandemic, recession fears
Potanin Forges Ahead on Tokens for Metals and Air Tickets
Two years on, Elon Musk’s big battery bet is paying off in Australia

New energy future, coronavirus near top of PDAC agenda

The world’s mining community is preparing to descend on Canada’s financial capital Toronto en masse for the annual Prospectors and Developers Association of Canada convention, arguably the mining world’s biggest annual meeting point for company leaders, strategists, geoscientists, technologists and, increasingly, futurists.

One topic that PDAC president Felix Lee expects to receive widespread coverage this year is the role mineral exploration and mining must play in the global shift towards a low carbon future.

“To meet demands for electric vehicle batteries, as well as solar panels and wind turbines, minerals such as copper, lithium, cobalt, nickel, graphite, various rare earth elements, aluminium and manganese are required in ever greater quantities. We expect this subject will be widespread,” Lee told Mining Journal.

Other popular themes highlighted in the comprehensive programming include diversity and inclusion, sustainability, capital markets and Indigenous affairs, with an emphasis on the latter given recent events affecting Canada’s reputation as an attractive destination for investment dollars.

Lee said discussions underpinned by the PDAC’s 2019 report on the State of Mineral Finance, would also receive significant attention. “The industry finds itself at a crossroads. The PDAC convention is a chance for the sector to gather and discuss the trends, challenges and opportunities being faced by the industry around the world,” he said.

Rio to begin copper production at Winu in 2023

Rio Tinto (ASX, LON, NYSE: RIO) plans to ramp up development of its Winu copper-gold project in Western Australia, with first production expected in 2023.

The world’s no. 2 miner continues drilling and geophysical testing at the asset, which could be its next major copper project, and is progressing discussions with landowners to keep moving forward.

Chief executive officer Jean-Sébastien Jacques said on Wednesday that the company’s job was to create options to meet market demand.

“A great example of one is Winu, our copper opportunity in Western Australia,” he said.

The Winu copper-gold-silver discovery is about 130 km (80 miles) from Newcrest’s Telfer copper-gold mine in the East Pilbara. It’s also close to numerous copper prospects discovered recently by juniors, and 350 km (220 miles) southeast of Port Hedland, the world’s largest bulk export port. 

Exclusive: Tesla in talks to use CATL’s cobalt-free batteries in China-made cars – sources

Beijing (Reuters) – Tesla (TSLA.O) is in advanced stages of talks to use batteries from CATL (300750.SZ) that contain no cobalt – one of the most expensive metals in electric vehicle (EV) batteries – in cars made at its China plant, people familiar with the matter said.

Adoption would mark the first time for the U.S. automaker to include so-called lithium iron phosphate (LFP) batteries in its lineup, as it seeks to lower production costs amid faltering overall EV sales in China.

Tesla has been talking to the Chinese manufacturer for more than a year to supply LFP batteries that will be cheaper than its existing batteries by a “double-digit percent,” said a person directly involved in the matter, who was not authorized to speak with media and so declined to be identified.

Tesla Inc and Contemporary Amperex Technology Co Ltd (CATL) declined to comment.

EV manufacturers usually use nickel-cobalt-aluminum (NCA) or nickel-manganese-cobalt (NMC) batteries on passenger vehicles because of their higher energy density, which is critical in determining how far an EV can drive on single charge.

To boost the density and safety of its LFP batteries, CATL has been working on its so-called cell-to-pack technology, the people told Reuters.

It was not clear to what extent Tesla intends to use LFP batteries but the automaker has no plans to stop using its current NCA batteries, said one of the people.

Tesla has been ramping up production of its Model 3 cars at its newly built $2 billion Shanghai plant and cutting prices to win market share from conventional premium automakers such as Germany’s BMW AG (BMWG.DE) and Daimler AG (DAIGn.DE).

Tesla started to deliver cars from the factory in December, helping it save on shipping costs and tariffs for imported models. It is currently seeking regulatory approval to make longer-range Model 3 cars at the plant.

Sales in China of new energy vehicles – referring to battery-only, plug-in hybrid and fuel-cell vehicles – likely sank 54.4% in January, industry data showed, due in part to the Lunar New Year holiday starting earlier than last year as well as the impact of the outbreak in China of a new coronavirus.

The use of LFP batteries will also help Chief Executive Elon Musk meet a 2018 promise that Tesla would cut the use of cobalt – which costs some $33,500 a tonne – to “almost nothing”.

Tesla plans to host a battery event, probably in April, to share its future battery strategy and technology, Musk said at an earnings conference in January.

Nornickel sees no major palladium substitution in near term

Russia’s Norilsk Nickel (Nornickel), the world’s largest producer of palladium and high-grade nickel, expects the palladium market to continue to be in a deficit of about 500 000 oz this year, driven by the continuing increase in loadings in autocatalysts.

Underpinning the company’s market forecast for palladium is the rolling out of the China 6 vehicle emissions standard and the introduction of real driving emissions (RDE) tests in Europe to measure pollutants.

The miner states that palladium’s substitution with platinum will be limited in 2020, as an “effective technical solution is not available”.

“We do not anticipate any major palladium substitution with platinum in the near term, owing to the technological challenges related with the differences in certain chemical properties of the two metals, making them not fully interchangeable in the modern autocatalysts. 

ICA creates global standard for responsible copper

The International Copper Association (ICA) has announced its creation of the ‘Copper Mark,’ a global standard to ensure responsible production and trading of copper.  

The ICA’s more than 500 global program partners bring together the copper industry to develop and defend markets for copper and to make a contribution to society’s sustainable-development goals. 


Inspired by the United Nations Sustainable Development Goals, the Copper Mark is to be launched this year.

“For the copper industry, as well as for other extractive industries, proving responsible business practices is no longer a ‘nice to have’ but a commercial imperative,” Michèle Bruelhart, executive director of the Copper Mark, said in a media statement.

“Businesses are expected to look beyond shareholder profit, and to make purpose and responsibility key parts of their mission and operations.”  

The Copper Mark uses an existing tool, the Risk Readiness Assessment, to address 32 issue areas across environmental, social and governance (ESG) topics.  

“In doing so, the Copper Mark seeks to improve practices across the spectrum of producers globally and covering all major areas of responsible production,” Bruelhart said.  

The project’s next major milestone will be seen this year, with the launch of its formal application process. The organisation will begin accepting applications from copper producers (including mines, smelters and refiners) this year, while applications from copper fabricators are planned to be accepted within two to three years. 

“The new measure seeks to monitor the performance of copper mines and refineries around the globe, assessed against responsible production criteria. Unlike other sustainability programs currently in place, the Copper Mark targets copper specifically,” said GlobalData’s Mining Technology writer Scarlett Evans.  

“Copper has gained a reputation as the material of our future, and with countries doubling down on their eco-efforts, demand is set to spike in the coming years. Holding such powerful sway over the global energy sector, the need to legitimise the metal’s supply chain has never been more urgent.” 

Canadian pipeline proponent to suspend work

The Canadian proponent of a C$6.6 billion (US$5 billion) natural gas pipeline at the heart of nationwide protests in support of Indigenous rights has agreed to once more suspend work in order to facilitate emergency dialogue between federal, provincial and Indigenous stakeholders.

Coastal GasLink has agreed to a two-day pause of construction activities in the Morice River area, in doing its part to meet Wet’suwet’en hereditary chief pre-conditions for engaging with federal government over the ongoing land rights dispute. 

Hereditary chiefs’ demands include the Canadian Royal Mounted Police removing a check point on their territory, end police patrols on the access road and for GasLink construction work to stop before they’d be willing to engage. The pause is expected to begin as soon as talks start.

The project will transport natural gas from northeast British Columbia to the west coast and currently employs about 1,300 people, of whom about 30% are Indigenous.

Protests sprung up across Canada following police enforcement on the territory of a Supreme Court of British Columbia injunction granted on December 31.

Wildcat protests in solidarity with the Indigenous group have been illegally blocking railway lines, locking Canada’s economy in a stranglehold.

China ferrous metals’ sell-off intensifies amid pandemic, recession fears

MANILA – Prices of steel products and raw materials on China’s futures markets tumbled on Friday, with iron-ore dropping nearly 5% as the fast-spreading coronavirus fuelled fears of a global recession, darkening the demand outlook for ferrous metals.

China, where the coronavirus originated and has infected and killed thousands of people, accounts for more than half of the world’s steel output and is the biggest exporter of the manufacturing and construction material.

China, also the top iron ore importer, has come under pressure to sell more steel products as its inventories have piled up after the epidemic stalled many construction projects and kept factories shut for weeks, denting demand.

Iron ore’s most-active contract on the Dalian Commodity Exchange dropped as much as 4.7% to 606 yuan a tonne, as spot prices hit their lowest in more than two weeks. Futures on the Singapore Exchange lost as much as 3%.

Potanin Forges Ahead on Tokens for Metals and Air Tickets

  • Russia’s central bank approved tycoon’s blockchain platform
  • Platform is also expected to start in U.S. and Switzerland

Russians may soon be able to use digital tokens to buy metals, book air tickets and transfer ski passes from Vladimir Potanin’s businesses after the billionaire got the go-ahead for his blockchain platform.

Potanin has long signaled plans to start crypto tokens for metals, but can now expand the project to the consumer side of his empire after getting central bank approval last week. The aim of the platform is to speed up transactions and reduce paperwork and interaction between customers and companies.

“To some extent Russia appears ahead of many other jurisdictions in terms of digitalization,” Potanin, Russia’s richest man, said in an interview near Moscow. “The central bank gave us a very wide mandate.”

The commodities industry is looking to digital trading systems using ledger technology to cut costs and administration and track materials through the supply chain. The tech and digital currencies are also being used more widely for things like renting cars or voting on soccer-club decisions, although blockchain is yet to take off on a large scale.

Two years on, Elon Musk’s big battery bet is paying off in Australia

Two years after Tesla Inc. installed it, the world’s biggest lithium-ion battery is helping to avert blackouts and lower costs as Australian grids struggle to handle surging renewable power generation.

The Neoen SA-owned Hornsdale Power Reserve has responded to three major system outages, helping to restore stability to the network and lower the costs of running the grid, engineering consultant Aurecon Group said Friday. The battery started in 2017 after Elon Musk famously won a bet that he could get a 100-megawatt system up and running in 100 days to help solve a power crisis in South Australia.


Hornsdale and other grid-scale batteries offer a way to tackle the variability of wind and solar power, and South Australia is seen as a global testbed in the transition away from fossil fuels, with the state getting more than half its power from renewable sources last year.

Confidence in the global energy storage market faltered in 2019, mainly as a result of fires in South Korean installations, with global growth shrinking for the first time ever, BloombergNEF said Thursday in a report.

Hornsdale “demonstrates at scale the potential for battery storage to provide fast-acting supply and demand balancing,” Aurecon Managing Director Paul Gleeson said in a media release. That “is critical to maintaining consistent frequency for grid stability and improving integration of renewable energy.”

Batteries smooth out power flows which can threaten network stability when they become volatile. The Tesla battery can respond to these frequency events much more quickly than coal or gas-fired generators, which have traditionally performed the role in Australia, and at a much lower cost, said Garth Heron, Neoen’s head of development in Australia.

“The grid has a heartbeat that needs to be regulated,” Heron said in an interview. “I think there will be a faster battery roll-out than most people expect. They really are able to solve a multitude of problems.”

Hornsdale reduced network costs by about A$116 million ($76 million) in 2019, according to Aurecon, savings Heron said would be passed on to businesses and households in the state. The battery’s introduction also slashed the cost to regulate South Australia’s grid by 91%, bringing it in line with other regions in the nation, according to Aurecon.

“Not only has the Hornsdale Power Reserve identified how batteries can physically help the grid, it has also showed how they can make money along the way,” BNEF analyst Ali Asghar said. “More importantly, it has boosted investor confidence in the storage market by showing developers how revenues from different power based services can be stacked to build a business case for storage in Australia.”

Paris-based Neoen will add a further 50 megawatts of capacity at Hornsdale this year and has ambitious plans for a giant renewables hub at Goyder South, also in South Australia, which would incorporate 900 megawatts of battery storage. Tesla has installed three big battery systems across Australia.