March Newsletter – 08.03.2021
ANNOUNCEMENTS
Who’s Who Legal – Mining 2021 has noted in its discussion of experts that Behre Dolbear’s Director and Senior Associate Barney Guarnera “is a well-established player in the international consulting space, highlighted for his extensive expertise in the valuation of mineral properties and mining companies.”
HEADLINES
- Rare earth unlocks key reaction in copper, gold, silver, uranium mineralization
- How China’s Belt and Road and an Australian mining company could be the deciding issues in the Greenland election
- Hostility to Beijing drives Chinese gold diggers into new territory
- U.S. Forest Service rescinds environmental report for Rio’s Arizona copper mine
- To go electric, America needs more mines. Can it build them?
- Vale drills caused Brumadinho dam collapse, police say
- China says domestic competition hurting rare earth prices
- Rio and Mongolia agree to replace $7bn plan to expand copper mine
- PERSPECTIVE: China’s Nuclear Weapons May Very Well Contain American Rare Earths
Rare earth unlocks key reaction in copper, gold, silver, uranium mineralization
Researchers at Australia’s Monash University found that the rare earth cerium affects the fate of a key reaction in copper, gold, silver, and uranium mineralization.
In a paper published in the journal Nature Communications, the scientists explain that, in the past, it was believed that ore fluids picked up some cerium on their way to giant deposits. Their findings, however, show that trace elements can have an important, yet difficult to predict, effect on the coupling between fluid flow, creation of porosity, and mineral dissolution and precipitation. This effect controls large-scale element mobility and rheology in the Earth’s crust.
Cerium, in particular, plays an active role during the replacement of magnetite by hematite: it acts as a catalyst that speeds up the reaction; provides space for the precipitation of the value minerals; and promotes a positive feedback between reaction and fluid-flow, that contributes to increasing the metal endowment of the deposit.
“In order to discover new giant deposits and efficiently mine existing ones, we need a mechanistic understanding of the processes that form – and transform – the minerals that host valuable metals,” Joël Brugger, co-author of the study, said in a media statement. “Although more recycling is an important part of raw materials’ future, we need more metals than the sum of those mined to date to resource the transition to a carbon-free economy.”
Brugger and his team conducted this research as part of the ‘Olympic Dam in a test tube’ project, where scientists tried to reproduce, in the laboratory, the processes that resulted in the concentration of more than a trillion dollars worth of metals at BHP’s (ASX, LON, NYSE: BHP) Olympic Dam copper, gold and uranium mine in South Australia.
https://www.mining.com/rare-earth-unlocks-key-reaction-in-copper-gold-silver-uranium-mineralization/
How China’s Belt and Road and an Australian mining company could be the deciding issues in the Greenland election
People in Narsaq fear radioactive dust from a proposed rare earth mine will poison their water and crops.
Stretching like a frozen white ocean, Greenland’s ice sheet has long helped stabilise the global climate.
It’s a third the size of Australia and more than two kilometres thick.
But waterfalls now gush in the summer from melting ice, feeding yellow wildflowers and wild thyme, as climate change accelerates.
Greenland has just experienced its two hottest summers on record. During the summer thaw, the odd stray polar bear has ventured off the ice sheet, looking for food.
“Climate change is also changing how we live,” Greenland’s finance minister Vittus Qujaukitsoq said.
“Traditional hunters are finding it harder to make a living, and smaller communities are having a hard time surviving, so more people are moving to larger communities,” he said.
Large is all relative in Greenland.
Just under 60,000 people live on the island, which is 80 per cent covered by the ice sheet. Greenland’s largest town and capital, Nuuk, has a population of about 18,000 people.
Greenland’s government has, in recent years, looked for ways to draw in new investment, to boost economic growth, and improve education, quality of life and job prospects for Greenlanders, most of whom are Inuit.
Hostility to Beijing drives Chinese gold diggers into new territory
- Chinese gold companies pay higher premiums
- Gold assets in developed world are more expensive, Chifeng says
- Chinese acquisitions get more scrutiny in Canada, Australia
- Chinese gold M&A activity increases: tmsnrt.rs/3uVxJOE
JOHANNESBURG/HONG KONG, March 4 (Reuters) – Chinese gold mining companies are on a buying spree in West Africa and South America, outbidding rivals for assets in less familiar regions as the governments in their usual hunting grounds turn against them.
China’s overseas mining M&A activity fell overall in 2020, Refinitiv data shows, but the number of acquisitions in the gold sector tripled from 2019 even though a surge in the gold market to record levels inflated premiums.
Bankers and lawyers predicted the focus would continue on the emerging economies that welcome Chinese investment as Australia, Canada, and the United States increase scrutiny of Chinese acquisitions.
U.S. Forest Service rescinds environmental report for Rio’s Arizona copper mine
(Reuters) – The U.S. Forest Service on Monday said it rescinded its January decision to publish an environmental report that cleared the way for an Arizona land swap needed for Rio Tinto Ltd’s Resolution Copper project.
The decision effectively reverses one made by officials in the waning days of former President Donald Trump’s administration and comes less than a week after Tom Vilsack was sworn in as secretary of agriculture, which oversees the Forest Service.
In 2014, then-President Barack Obama signed a Pentagon funding bill that approved Rio Tinto’s proposal to exchange land for another parcel nearby, with the caveat that it could not occur until an environmental report on the mine was published. The Trump administration published that report on Jan. 15, clearing the way for the exchange within 60 days.
While Monday’s action effectively nullifies that publication, it was not immediately clear if the land swap will still go ahead. The U.S. Forest Service did not immediately respond to requests for comment.
https://www.reuters.com/article/us-usa-mining-resolution-idUSKCN2AT3JA
To go electric, America needs more mines. Can it build them?
Reuters) – Last September, in the arid hills of northern Nevada, a cluster of flowers found nowhere else on earth died mysteriously overnight.
Conservationists were quick to suspect ioneer Ltd, an Australian firm that wants to mine the lithium that lies beneath the flowers for use in electric vehicle (EV) batteries.
One conservation group alleged in a lawsuit that the flowers, known as Tiehm’s buckwheat, were “dug up and destroyed.” The rare plant posed a problem for ioneer because U.S. officials may soon add it to the Endangered Species List, which could scuttle the mining project.
Ioneer denies harming the flowers. Their cause of death remains hotly debated – as does the fate of the lithium mine.
The clash of environmental priorities underpinning the battle over Tiehm’s buckwheat – conservation vs. green energy – is a microcosm of a much larger political quandary for the new administration of President Joe Biden, who has made big promises to environmentalists as well as labor groups and others who stand to benefit by boosting mining.
To please conservationists, Biden has vowed to set aside at least 30% of U.S. federal land and coastal areas for conservation, triple current levels.
https://www.reuters.com/article/us-usa-mining-insight-idUSKCN2AT39Z
Vale drills caused Brumadinho dam collapse, police say
Mineral tailings mud after dam rupture in Brumadinho, Minas Gerais, Brazil.
Federal Police in Minas Gerais, Brazil, released the forensic report on the cause of the tailings liquefaction that led to the dam collapse at Vale’s (NYSE: VALE) Córrego do Feijão mining complex in Brazil, which killed 270 people two years ago.
The report concluded that the disaster was triggered by vertical perforations in a weak point of the structure.
According to the investigators, the procedure was initiated by Vale five days prior to the rupture with drilling machines that operate with fluid injection. The pressure of these liquids caused dissolution of the stored sediments and subsequent generation of waves, which ended up shaking the dam.
Vale previously said that the rupture had been caused by the weight of the tailing itself, associated with rains at the end of 2018.
Federal Police also dismissed the hypothesis that a detonation at a nearby mine would have triggered the liquefaction.
Vale said it “became aware on Friday 26th of the expedition of the Federal Police’s technical expert report on the possible causes of the rupture of Dam I, of the Córrego do Feijão mine, and that “it will evaluate the entire content of the report.”
https://www.mining.com/valle-drills-caused-brumadinho-dam-collapse-police-say/
China says domestic competition hurting rare earth prices
BEIJING (Reuters) – China’s rare earths, a group of 17 minerals used in military equipment and consumer electronics, are being undersold due to “vicious competition” domestically and face low resource utilisation, the country’s industry minister said on Monday.
Prices for some rare earths in China, such as praseodymium-neodymium (PrNd) – used in rare earth magnets – have spiked to multi-year highs this year amid strong demand from the electric vehicle sector.
However, prices for other rare earths mined simultaneously, such as cerium and lanthanum, used in catalysts for oil refining, remain depressed due to abundant supply.
“Our rare earths did not sell at the ‘rare’ price but sold at the ‘earth’ price… because of competitive bidding, which wasted the precious resource,” Minister of Industry and Information Technology Xiao Yaqing said during a news briefing.
A heavy reliance on China, the world’s top producer of rare earths, has led the United States to order a review of its supply chain for the minerals.
Shipments of rare earth magnets from China to the United States hit 585 tonnes in December, the highest since at least 2016, according to Chinese customs data. China’s overall rare earth exports last year were the lowest since 2015 amid coronavirus-hit demand overseas.
https://www.reuters.com/article/us-china-rareearths-industry-idUSKCN2AT13G
Rio and Mongolia agree to replace $7bn plan to expand copper mine
After weeks of escalating tensions and leadership turmoil, Mongolia and Rio Tinto have agreed to work out a new arrangement to finance the costly expansion of the vast Oyu Tolgoi copper mine, Nikkei Asia has learned.
The rising cost of the new underground phase of the mine, one of the world’s biggest copper deposits, played a role in bringing down both Mongolia’s previous prime minister and Rio’s last chief executive. This appears to have helped set the stage for changing the terms of how the two co-owners of the project will share the expense.
Public irritation has been running high in Mongolia after new figures emerged late last year showing that the government could not expect to start receiving dividends from its 34% ownership of the mine in 2032 as originally expected. Rather, due to a new two-year delay and a $1.5 billion jump in the project’s cost to $6.8 billion, the government is concerned it may not receive any dividend before the mine’s reserves are depleted.
While Rio has solely financed the construction and operation of the mine and provided Mongolia with a loan to finance its share of the mine’s ownership, it also gets all the profits for now, with Rio taking a management fee and payments on its loan out of Oyu Tolgoi’s earnings. Under the expansion arrangement reached in 2015, Ulaanbaatar has to wait until the loan is fully repaid before receiving a dividend though it does collect royalties on the minerals mined.
Now both sides are ready to scrap that deal and put a new one in place.
PERSPECTIVE: China’s Nuclear Weapons May Very Well Contain American Rare Earths
This is a call to action for the United States federal government and its citizens. America’s rise to global economic predominance more than a century ago is rapidly coming to an end. The People’s Republic of China has achieved what Imperial Germany and the Soviet Union never could: economic parity with the United States. While China is strategically intent on replacing the United States as the most powerful country in the world, that parallelism has not, in fact, yet arrived. However, forecasts demonstrate that the critical moment of equivalency will inevitably come later this decade. When that moment materializes – and it will – the fundamental basis of world-power politics over the past 100-plus years will have fundamentally changed. China’s inevitable subordination of the United States will assuredly result in a paradigm shift in the global balance of economic and military power.
China’s monopoly on rare earths: the focal point of the heightened US-China trade war
What if China controlled the world’s oil supply, while actively buying oil assets across the planet? Undoubtedly, the West and its allies would be terrified, and rightfully so. Western countries would secure and bolster their domestic supplies to reduce dependence. While it is good this is not happening with oil, the same cannot be said for rare earths and critical materials. In fact, China’s monopoly over the global rare-earth supply chains is more dangerous to the United States than OPEC’s ability to single-handedly control the world’s oil prices. Like oil and natural gas, rare earths are vital to U.S. national and economic security.
COMMODITY PRICES
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