March Newsletter – 07.03.2022


  • Soil bacteria reveal it takes about 40 years to rehabilitate former mine sites
  • China calls on rare earths companies to bring prices back to ‘reasonable’ level
  • Base metals set for best-ever week as war stokes shortage fears
  • Tesla to win approval for $5.5 billion Berlin gigafactory on Friday
  • Europe returns to South Africa for coal after Russia sanctions
  • Sibanye-Stillwater faces court battle for ditching $1.2bn Brazil mines deal
  • Copper price hits all-time high as warehouses empty out
  • Chinese state-own firm lost control of cobalt mine in Congo

Soil bacteria reveal it takes about 40 years to rehabilitate former mine sites

Researchers at Flinders University are using high-throughput sequencing of soil eDNA to track progress and predict timeframes for post-mining recovery by looking at patterns in soil microbial communities.

pic1 Behre Dolbear newsletter 07.03.2022

South32’s Worsley Alumina bauxite mine.

In a paper published in the Journal of Environmental Management, the scientists explain how they examined changes in soil bacteria following revegetation at three case study mine sites in southwest Western Australia.

The first mine in question was Alcoa’s Huntly bauxite site. There, the post-mining chronosequence sites sampled in 2016 captured rehabilitation ages from 2–29 years. The adjacent reference forest allows to track how the rehabilitation sites are performing.

The second mine was Iluka Resource’s Eneabba mineral sands mine site, where sampling data from 2019 captured rehabilitation ages from 7–38 years, a wide gap that responds to the variability in topsoil storage time and mulching practices.

The third mine was South32’s Worsley Alumina bauxite mine site. There, samples were collected in October and December 2019 and captured rehabilitation ages from 2–28 years old.

China calls on rare earths companies to bring prices back to ‘reasonable’ level

pic2 Behre Dolbear newsletter 07.03.2022

Rare earth fluorides.

China summoned some key rare earths companies amid continuously-rising product prices and urged them to ensure a steady supply chain to help cool prices, the regulator said on Friday.

The Ministry of Industry and Information Technology said in a statement that it had instructed producers including China Rare Earth Group, China Northern Rare Earth Group and Shenghe Resources to regulate their operation and trading, and to prevent any market speculation or hoarding.

The authority also urged the companies to take a lead in promoting a pricing mechanism for rare earths products and jointly bring prices back to a reasonable range, it said.

Prices of rare earths, a group of 17 minerals used in electric vehicles (EVs) and military equipment, have surged since the second half of 2021 amid concerns of supply uncertainty from Myanmar and strong demand.

Base metals set for best-ever week as war stokes shortage fears

The world’s most important metals are heading for the biggest weekly gains on record as Russia’s invasion of Ukraine sparks a clamber for supplies.

Commodities markets from metals to oil and gas have been upended by the war in Ukraine as big corporates withdraw from Russia, lenders pull back from financing deals and the threats of new sanctions deter buyers.

A Bloomberg gauge of industrial metals has surged 11% this week, on course for the biggest-ever rise. Aluminum hit a fresh record on Friday, nickel surged as much as much as 7.8% to a decade-high and zinc is the most expensive since 2007.

It’s getting increasingly difficult to transport commodities like metals since almost half of the world’s container ships no longer go to Russia, a crucial supplier of aluminum and nickel. Soaring global fuel prices also are a headache for the market as production costs increase and pile pressure on smelters.

Nickel has been among the biggest movers this week, jumping 16%, to trade at $28,255 a ton on the London Metal Exchange. Russia is a key source of the metal, crucial for electric-vehicle batteries and stainless steel. Aluminum rallied 13% this week, set for its best such performance. Zinc has risen 11%, while copper has also climbed to move closer to a record.

pic3 Behre Dolbear newsletter 07.03.2022

Tesla to win approval for $5.5 billion Berlin gigafactory on Friday

pic4 Behre Dolbear newsletter 07.03.2022

Giga Berlin under construction in Grünheide, October 2020.

The German state of Brandenburg has called a news conference for Friday at which it is widely expected to approve Tesla’s 5 billion euro ($5.5 billion) gigafactory near Berlin if certain conditions are met.

“The approval procedure for the e-car and battery factory of the U.S. company Tesla in Gruenheide in Brandenburg is nearing completion,” the state government said in a statement.

Tesla has for months been awaiting approval for a licence to begin production at the electric vehicle (EV) factory and adjacent battery plant in Gruenheide near Berlin, slowed down by red tape and local opposition.

CEO Elon Musk has made his irritation for German laws and processes known, saying in a letter to authorities last year that the country’s complex planning requirements were at odds with the urgency needed to fight climate change.

Europe returns to South Africa for coal after Russia sanctions

Europe’s surging demand for coal is reviving an infrequent trade lane for shipments from South African mines.

The fossil fuel typically heads east from Richards Bay Coal Terminal, the continent’s biggest export hub. Of the 59 million tons of coal shipped from the South African port last year, only 4% went to Europe and more than 86% was delivered to Asia.

There may have been a shift in that balance since Feb. 20 as a handful of bulk carriers have headed west round the Cape of Good Hope after calling at Richards Bay, according to ship tracking data compiled by Bloomberg. At least two stopped directly at RBCT.

Europe’s key coal price climbed to a record on Wednesday as sanctions and companies’ own decisions to stop trading with Russian counterparties mean traders are trying to buy elsewhere. There are also concerns further sanctions and war could tighten the ability of utilities to source coal from Russia if they need to.

European utilities have “ramped up volumes in the last few weeks” of South African coal, said Bevan Jones, chief executive officer of consultants African Source Markets. There are also notable flows of coal from the U.S. and Colombia to Europe, he said.

Sibanye-Stillwater faces court battle for ditching $1.2bn Brazil mines deal

Appian Capital Advisory is taking Sibanye-Stillwater (JSE: SSW) (NYSE: SBSW) to the High Court in London over the South African miner’s decision to ditch a multi-million deal to acquire nickel and copper mines in Brazil.

The British investment firm, advising two affiliated private equity funds which own the Santa Rita nickel and Serrote copper mines in Brazil, said the transaction was worth over $1.2 billion and called Sibanye’s failure to close on it “unlawful.”

Sibanye-Stillwater agreed to buy the two assets in October 2021, in a bet to boost its growing battery metals portfolio, while diversifying away from platinum and gold.

The company suddenly cancelled the deal early this year, citing a “geotechnical event” at the Santa Rita mine in north-eastern Brazil. Sibanye, which reported strong profits and a 20% increase in South African platinum group metals (PGM) production for 2021, said the issue at Santa Rita would have had a material and adverse impact on operations.

Appian, however, has said the instability quoted by the precious metals miner was a “localized” crack in the mine’s pit wall, which has had and would have no impact on the open-pit mine’s life.

Copper price hits all-time high as warehouses empty out

The copper price hit an all-time high on Friday as traders looked to stock up over fears of further supply-chain disruption.

Concerns about supply disruption, historically low global stockpiles and rocketing energy costs have lit a fire under base metals, trumping concerns over the longer term impact of the Ukraine invasion on global growth, rising interest rates in the developed world and a slowing economy in China. 

Copper for delivery in May rose on the Comex market in New York, touching a high $4.9490 per pound ($10,910 per tonne), more than 3% compared to Thursday’s closing. The bellwether metal is up 10% since the Russian invasion of Ukraine little over a week ago.

Adding to metal supply fears are falling inventories in LME-registered warehouses. Copper stocks, at 69,825 tonnes, are the lowest since 2005.

Base metals rallied across the board with the LMEX Index, which tracks six major contracts, surging to a record high. Nickel briefly trade above $30,000 a tonne for the first time since 2008.

“The market is in a panic mode in terms of supply,” said Gianclaudio Torlizzi, a partner at consultants T-Commodity, adding prices would keep rising while conflict raged in the Ukraine.

Russia isn’t a major copper player, producing about 3.5% of the world’s copper. Still, commodities extended their massive rally this week as the war fueled fears of supply crunches.

Chinese state-own firm lost control of cobalt mine in Congo

A court in the Democratic Republic of Congo appointed a temporary administrator to take over China Molybdenum’s Tenke Fungurume mine, or TFM, on Monday, March 1, according to Reuters.

China Molybdenum or China Moly holds an 80% stake, and state miner Gecamines holds a 20% stake in TFM.

The New York Times reported that the ruling followed after Gecamines had tried to remove Chinese management of the mine. Last year the President of Congo allowed an investigation into China Moly after an accusation that it had deceived the Congo government by not paying royalties from the mine.

Gecamines stated that China Moly did not disclose hundreds of thousands of tons of copper and cobalt reserves at the mine, depriving this firm of significant payments.

The Commercial Court of Lubumbashi appointed Sage Ngoie Mbayo, Gecamines representative, as administrator to assume the managerial position of the mine for six months.

According to the New York Times, in 2020, the mine was the second-biggest cobalt source in the world. Last year Congo produced 70% of the world’s cobalt.

China Moly, backed by the Chinese regime financing, bought the Tenke Fungurume mine in 2016 from an American mining giant, Freeport-McMoRan.

Working conditions at the Tenke Fungurume mine have deteriorated after China Moly took it over from the U.S. firm.

A dozen mineworkers or contractors told The New York Times that injuries have increased, many of which were not reported to management. In addition, two Congolese safety officers revealed that workers were assaulted after raising concerns; they were offered bribes to cover up accidents.


Link for more detailed information

comm1 Behre Dolbear newsletter 07.03.2022comm2 Behre Dolbear newsletter 07.03.2022comm3 Behre Dolbear newsletter 07.03.2022