March Newsletter – 15.03.2021


  • Newmont to acquire Canada’s GT Gold for $311m
  • UPDATE 2-Contractor asks Australia to review asset sale by China’s Tianqi Lithium
  • As Glencore Walks, Colombia Envisages Decades of Coal Mining
  • Cobalt, nickel free electric car batteries are a runaway success
  • Colombia Will Back Its Coal Industry For Decades To Come
  • First Majestic buys Nevada gold mine from Sprott
  • This Is How Top Polluter China Plans to Be Greener by 2025
  • A New Mining Super-Cycle: Can Supply Rise To The Challenge?

Newmont to acquire Canada’s GT Gold for $311m

GT Gold is involved in advancing its wholly-owned Tatogga property in British Columbia

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GT Gold has made two major discoveries on the Tatogga property

Newmont has signed an agreement with GT Gold to acquire the remaining stake of 85.1% that it did not previously own in the latter for $311m.

Under the terms of the agreement, the US-based gold company will acquire each GT Gold share at a price of C$3.25 ($2.57) in cash.

GT Gold is involved in advancing its wholly-owned, 47,500ha Tatogga property in the Tahltan Territory in British Columbia, Canada.

The acquisition of the Tatogga project is expected to strengthen Newmont’s existing interest in the prospective Golden Triangle near Iskut.

On the Tatogga property, GT Gold has made two major discoveries that include Saddle South, a precious metal rich vein system and Saddle North, a gold-rich copper porphyry system.

UPDATE 2-Contractor asks Australia to review asset sale by China’s Tianqi Lithium

MELBOURNE March 11 (Reuters) – An Australian mining services contractor locked in a legal dispute with China’s Tianqi Lithium Corp over failed payments has asked the Foreign Investment Review Board (FIRB) to examine a related sale, a company director said on Thursday.

Perth-based MSP Engineering has asked FIRB to review a part sale of Tianqi’s Australian lithium business to nickel miner IGO after Tianqi refused to pay it for constructing a battery-grade lithium processing plant in Western Australia.

This week, Western Australia’s Supreme Court ruled that Tianqi, one of the world’s biggest producers of lithium chemicals used in electric vehicle batteries, must pay A$38.9 million ($30 million) in arrears. Tianqi said it will appeal.

The FIRB submission comes at a time of heightened trade tension between China and Australia.

As Glencore Walks, Colombia Envisages Decades of Coal Mining

Glencore Plc may be walking away from its Colombian coal mines, but Colombia isn’t.

The South American nation better known for its coffee and crude is also a major supplier to European coal-fired power plants. While that market may be shrinking as Europe leads a clean-energy shift, there’s still plenty of demand elsewhere for the most polluting fossil fuel, according to Mines and Energy Minister Diego Mesa.

His government is betting coal will continue to play a major role in Asia’s energy mix for the foreseeable future. After Colombian output plunged last year amid a strike and a decision by Glencore to halt operations in a depressed market, Mesa expects production to bounce back. While Glencore plans to start handing back contracts for its Prodeco mines, Colombia hopes to find a new operator.

“These assets continue to be of interest to many investors, specially Asian ones,” Mesa said in an interview from Bogota Thursday.

Two of Prodeco’s six license areas have enough coal to continue operations for another decade, Mesa said. The ministry and Glencore, the world’s biggest shipper of coal, have been in contact with some companies interested in taking them on, he said.

Cobalt, nickel free electric car batteries are a runaway success

A year ago, Tesla surprised the electric car industry when it announced some Model 3s made in its Shanghai factory will be equipped with lithium iron phosphate (LFP) batteries made by China’s Contemporary Amperex Technology (CATL).

While cheaper to manufacture, LFP seemed at odds with Tesla’s sporty, luxury image.

Apart from buses and special purpose vehicles, LFP is associated with tiny (and probably tinny) city runabouts like Wuling‘s Hong Guang Mini EV (jv with GM) which this year overtook the Model 3 as China’s bestselling EV.

NCM (nickel-cobalt-manganese) and NCA (nickel-cobalt-aluminum) dominate the market for electric cars and LFP fares badly against ternary cathode batteries in terms of energy density – and therefore range and charging.

Due to the technology’s shortcomings, there were doubts whether the LFP Model 3 would qualify for full Chinese subsidies, which kick in above 165Wh/kg. No subsidy would negate savings made on the battery.

Colombia Will Back Its Coal Industry For Decades To Come

The world’s fifth-largest coal exporter, Colombia, is confident that continued coal demand in Asia will warrant Colombian government support to the industry for at least two more decades, even after Glencore said it would relinquish its mining contracts in the country.

“Coal demand from China and India is going to continue. It’s impossible for them to switch their power matrix overnight and stop depending on thermal coal,” Colombia’s Mines and Energy Minister Diego Mesa told Bloomberg in an interview this week.

“We are going to continue to give support to the operations we currently have,” Mesa said, adding that the high-quality mines could continue to operate for “a couple more decades.”

Last month, Glencore said that its Colombian subsidiary Prodeco would begin handing back its mining contracts to the government after it found it would be uneconomic to restart operations at mines that were put on care and maintenance in March last year. Colombia’s National Mining Agency declined in January 2021 Prodeco’s request for the Calenturitas and La Jagua coal mines to remain on care and maintenance (C&M).

Glencore and Colombia’s Mines and Energy Ministry have been in contact with companies interested in potentially taking over the Glencore mines, minister Mesa told Bloomberg. There has been interest from Asia for the mines, he added.

Colombia is banking on coal demand from Asia, including China and India, to justify its support for coal mining in the country, while most developed economies are working to reduce their reliance on coal and phase it out as a source of electricity supply.

First Majestic buys Nevada gold mine from Sprott

First Majestic Silver (TSX: FR) (NYSE:AG) is buying the Jerritt Canyon gold mine in Elko County, Nevada, from Sprott Mining for $470 million in shares and five million share purchase warrants.

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As part of the deal, Sprott Mining president Eric Sprott will complete a $30 million private placement investment in First Majestic.

The Canadian miner said it had identified opportunities to enhance the mine’s cost and production profile, as well as near-term brownfield potential between the SSX and Smith mines.

Jerritt Canyon was discovered in 1972 and has been in production since 1981. The asset has since delivered more than 9.5 million ounces of gold. Last year, it produced 112,749 ounces at a cash cost of $1,289 per ounce.

First Majestic said that this new acquisition, along with its three operating silver mines in Mexico, will solidify its position as a premier North American precious metals producer.

The miner’s expected annual production has been pegged at between 30 and 33 million silver equivalent ounces.

This Is How Top Polluter China Plans to Be Greener by 2025

(Bloomberg) — China’s journey toward carbon neutrality took its first major step Friday as the country announced goals to slow emissions in the next five years. The country plans to reduce carbon emissions per unit of gross domestic product by 18% through 2025, and energy use per unit of GDP by 13.5%, Premier Li Keqiang said Friday at the opening of the National People’s Congress. It also plans to boost non-fossil fuels to 20% of energy use by then, and will create an action plan this year to detail how it aims to reach peak emissions by 2030.

At the same time, China plans to continue increasing domestic production of fossil fuels like coal and oil to improve energy security, a key concern for the world’s largest importer of raw materials. And it plans to keep developing nuclear energy after failing to meet goals in the sector over the past five years.

A New Mining Super-Cycle: Can Supply Rise To The Challenge?

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A mining super-cycle is on the horizon, with significant implications for producers and investors alike. Julian Kettle, Wood Mackenzie Senior Vice President, Vice Chair Metals and Mining asks: how strong could demand get? How long would high prices last? And is there a lesson to be learned from the tortoise and the hare?

Speculation abounds about the prospect of a new mining super-cycle. We may not be quite there yet – but it won’t be long before some markets become structurally undersupplied, particularly if the energy transition accelerates.

A different kind of super-cycle

The last mining super-cycle, which started in 2001, was almost entirely driven by China. This time around it will be a global theme rather than a specific country or region that delivers transformational demand.

While China will be a significant factor, given its scale, the real driver will be the energy transition – particularly if the world accelerates onto a two degree pathway. No fewer than 189 countries have committed to zero carbon, but the shape and speed of decarbonisation will be markedly different for individual sectors, and indeed countries. And while the genesis of the super-cycle will undoubtedly be in the associated transformational demand, it will be limitations of supply that make a super-cycle inevitable.


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