March Newsletter – 14.03.2022


  • Tata Steel looks at other markets for coal imports to fuel operations
  • Guinea junta halts Rio Tinto’s Simandou iron ore project
  • Rio Tinto cuts ties with Russian businesses over Ukraine war
  • Norilsk cleared to pay debt in foreign currency, Potanin says
  • China’s MMG races for deal to protect copper flow from Peru mine
  • Gold dealers swamped by demand as war creates inflation scare
  • Uranium soars following Ukrainian war
  • Canadian Gold Miner Looks To Acquire Four Zim Mines

Tata Steel looks at other markets for coal imports to fuel operations

The geopolitical crisis after Russia’s invasion of Ukraine has spurred fears of supply disruptions and surging costs of commodities from aluminum to coal and iron ore.

Tata Steel, India’s biggest producer, is seeking alternative sources for coal supply to its European and Indian operations due to difficulties of doing business with Russia after its invasion of Ukraine, a top official said on Saturday.

Tata Steel will look at alternative markets for coal imports as transactions with .Russian suppliers and bankers at present come with a “lot of uncertainties,” managing director TV Narendran, told reporters on the sidelines of an event in Kolkata. The company used to buy upto 15% of its coal requirements from Russia, he said.

Guinea junta halts Rio Tinto’s Simandou iron ore project

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Simandou deposit, Guinea.

Guinea’s ruling junta has ordered a full halt of Rio Tinto’s (ASX, LON, NYSE: RIO) vast Simandou iron ore project in the country’s southeast, with interim president Mamady Doumbouya saying it is not clear how the mine will preserve national interests.

The current government, who took power in a military coup in September, said in a statement that Doumbouya had not seen any progress in that direction, despite having discussed the matter with Rio’s boss Jakob Stausholm in December.

“[Colonel Doumbouya] therefore ordered the cessation of all activity on the ground pending the answers to questions posed to various actors and the clarification of the operational mode by which the interests of Guinea will be preserved,” government spokesperson Ousmane Gaoual Diallo said in the statement.

Rio Tinto cuts ties with Russian businesses over Ukraine war

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Queensland Alumina Ltd is the world’s largest alumina refinery with access to a deep-water port in Queensland, Australia.

Rio Tinto (ASX, LON, NYSE: RIO) has become the first major mining company to announce it was cutting all ties with Russian businesses, joining a massive exodus of Western companies since Moscow’s invasion of Ukraine.

The world’s second largest miner, which operates aluminum refineries in Russia’s east together with aluminum producer Rusal International, had said it wanted to keep its relationships with local business “steady”. This, as the company was trying to avoid diesel supply issues at its giant Oyu Tolgoi copper-gold mine next-door, in Mongolia.

Rio Tinto, however, in an emailed statement, said on Thursday it was “in the process of terminating all commercial relationships it has with any Russian business.”

The miner is reviewing its 80-20 joint venture with Rusal in Queensland Alumina (QAL), which runs a refinery in the Australian northeast state and also plans to stop supplying bauxite and sourcing alumina from a Rusal’s Aughinish refinery in Ireland, which is a key supplier to Europe’s aluminum sector.

Norilsk cleared to pay debt in foreign currency, Potanin says

Russia’s Ministry of Finance has cleared MMC Norilsk Nickel PJSC to pay off its foreign debts in currencies other than the ruble, said Vladimir Potanin, the company’s president and biggest shareholder.

The mining company, which dominates the palladium market, has already paid the coupon of its dollar-denominated bond that was due on March 11, Potanin said in an interview with Russian newspaper RBC that was published on Saturday.

Norilsk was due to make an interest payment of $6.4 million on a $500 million note maturing in 2025. The company had a separate $500 million note due April 8 that was repaid earlier this week, Potanin said. The bond was called on March 9, Bloomberg data shows.

“Non-payment of even a small amount leads to cross-defaults on all obligations,” said Potanin, Russia’s richest man and one of the few tycoons to escape sanctions. “And, accordingly, we, I think, do not need to face a situation where all the debts of enterprises and sovereign debt become urgent to repay. This, in my opinion, is not in our interests.”

China’s MMG races for deal to protect copper flow from Peru mine

Protests weigh on Las Bambas, top source of the metal under Beijing control

LIMA, Peru — With copper prices at an all-time high, Chinese state-owned producer MMG is under the gun to work out a deal by the end of the month to keep supplies flowing from Las Bambas, a Peruvian mine which happens to be the biggest source of the crucial metal under Beijing’s control anywhere in the world.

The mine, sited in the Andes Mountains geographically some 70 km southwest of the historic Incan capital of Cusco, generates 2% of world copper production — when it is running.

But MMG, a Hong Kong-listed unit of China Minmetals, has found it harder and harder to keep up the flow, with annual output sliding since 2018. Amid political turmoil that has seen four presidential successions in Peru since then, community protests along the mountain roads from the mine have repeatedly disrupted production.

Pedro Castillo won election to the presidency on behalf of the leftist Free Peru party last June promising both to resolve community complaints about the traffic and to collect more revenue from MMG by raising mining taxes. He met with executives from the company soon after the vote and sent his prime minister to meet with community leaders upon taking office.

But after a brief truce, the protests grew even more serious, leaving the road closed to MMG for much of the last quarter of 2021 and depressing annual output to 290,106 tons, 35.5% below the level of Las Bambas’ 2017 debut. Expected government approvals for developing a new $2 billion phase of the mine were also pushed back.

Gold dealers swamped by demand as war creates inflation scare

Gold is playing its age-old role as a safe haven in times of wars and crises, and people all over the world are piling in.

Russia’s invasion of Ukraine has sent the price of everything from oil and gas to wheat and metals skyrocketing, sparking inflation fears and threatening global growth. That’s driving retail investors everywhere from Vienna and Singapore to New York to the safety of gold, which spiked to $2,070.44 an ounce, close to the record reached during the pandemic.

The almost 10% surge in gold prices since the start of the year is turning into a boon for bullion dealers like Rudolf Brenner, founder of Philoro Edelmetalle GmbH, whose shops in German-speaking Europe now have long lines of buyers — a trend that’s likely to continue with the conflict showing no signs of abating.

“When the crisis in Ukraine started, we saw massive orders” said Brenner, whose sales are triple their normal level. “People are buying everything.”

Uranium soars following Ukrainian war

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The price of uranium has reached 10-year highs above $US53 per pound ($A158/kg) as supply concerns grow following Russia’s invasion of Ukraine.

Ukraine contains the world’s sixth largest uranium reserve of roughly 46,000 tonnes and produces the ninth highest volume of the resource.

Nuclear power accounts for 20 per cent of the United States’ energy sector, meaning Russia taking control of Ukraine could have significant effects on the uranium market, as world leaders continue to place sanctions against Russian trade.

In Australia, Vimy Resources has completed a $17 million placement to advance its Mulga Rock uranium project in Western Australia, showing local confidence in the sector.

Vimy managing director and chief executive officer Steven Michael said it was important for Australia to secure domestic supplies before Russia and Ukraine’s resources became unfeasible.

“The past few days have been exceptionally volatile for the global uranium sector, given the events… in Ukraine,” he said.

“The strategic value of uranium deposits in Tier 1 jurisdictions has never been more apparent and there are few new term development opportunities that meet those criteria.

Vimy’s new $17 million will be put towards completing the Mulga Rock bankable feasibility study, advancing pre-development site works at Mulga Rock, and commencing an extensive drilling program at its Alligator River project in the Northern Territory.

Canadian Gold Miner Looks To Acquire Four Zim Mines

CANADA based miner, Zephyr Minerals Limited, is set to acquire four gold mines in Zimbabwe.

In a statement to shareholders this week, the company said it had “investigated 12 potential gold projects throughout” the country over the past seven months.

“Management has concentrated on projects with proven gold potential as demonstrated through active, shallow, small scale mining operations or previous exploration work, and based on property size, the ability to host a target potential of at least one million ounces of gold,” reads the statement.

“Based on these parameters, of the 12 properties evaluated, four high priority gold properties are being aggressively pursued for acquisition/joint venture.”

Company President and CEO Loren Komperdo added; “Our investigations to date confirm the merits of our strategy to pursue gold opportunities in Zimbabwe.

“We remain firm in our view that success in project generation in Zimbabwe will provide our shareholders with exposure to gold projects with company transformative potential.”

The Company staked and registered two Special Blocks totaling 201 hectares for gold and base metals in the north-eastern part of Zimbabwe’s Umkondo Basin.


Link for more detailed information

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