March Newsletter – 16.03.2020
ANNOUNCEMENTS
- Fortescue hopes for China virus recovery as steel backlog builds
- Foresight latest US coal miner to file for bankruptcy
- Canadian band plays world’s deepest underground concert
- Coronavirus sends shudders through mining industry as case confirmed after top conference
- Despite a turbulent year – BHP keeps its brand crown
- Colombia coal miner Cerrejon, union fail to reach contract agreement
- Mining The Ocean Bottom For Metals – Is This A Bad Idea?
- Brazil’s Vale says part of Gongo Soco mine continues to erode
- Here’s Who’s Backing Coal as Some of the World’s Biggest Banks Get Out
- Breakthrough technique could produce lithium in hours not months
- Coronavirus could have a lasting effect on China-dominated lithium sector
TOP NEWS
Fortescue hopes for China virus recovery as steel backlog builds
The head of Australian mining giant Fortescue Metals says the fall in new coronavirus cases in China provides hope that restrictions on business and travel will continue to ease, breaking the paralysis that could imperil demand for Australian shipments of iron ore.
Australia’s miners of iron ore – the steelmaking ingredient and the nation’s most lucrative export – are monitoring the worryingly high build-up of finished steel stockpiles at China’s steel mills after efforts to arrest the deadly pandemic closed roads and left factories and construction sites empty, preventing deliveries across supply chains.
The build-up of steel stockpiles has surged since late January, when new coronavirus infections spiked in China, fuelling worries among investors about the knock-on effect of an oversupply to ASX-listed iron ore miners including BHP, Rio Tinto and Fortescue.
But fears that disruption in China would drive down demand for Australia’s exports of steelmaking commodities have so far failed to materialise, Fortescue chief executive Elizabeth Gaines told The Age and The Sydney Morning Herald, with the iron ore price “holding up” at around $US90 a tonne and market conditions remaining “largely unchanged”.
Foresight latest US coal miner to file for bankruptcy
Foresight Energy became on Tuesday the latest coal miner to file for bankruptcy, saying the global economic slowdown triggered by the coronavirus epidemic had pushed it over the edge.
The company, already hit by an ongoing switch to cheaper and cleaner sources of energy, said it planned to hand ownership to its creditors as part of a restructuring plan.
The restructuring plan, which allows the company to stay in business, would cut debt by about $1 billion by swapping $1.4 billion of debt for equity, according to the Chapter 11 documents filed in US Bankruptcy Court in St. Louis.
FORESIGHT, ALREADY UNDER PRESSURE FROM CHALLENGING REGULATIONS AND COMPETITION FROM CLEANER ENERGY SOURCES, SAID THE CORONAVIRUS EPIDEMIC HAD PUSHED IT OVER THE EDGE
The strategy, chief executive Robert D. Moore said, leaves Foresight with just $225 million.
The coal miner’s collapse is yet another sign of a dying industry, despite President Donald Trump’s rescue attempts. Right after taking office, he slashed environmental regulations and even installed former coal lobbyist Scott Pruitt at the head of the Environmental Protection Agency (EPA). Pruitt resigned in 2018, facing numerous ethics investigations.
The deregulatory push, however, has been unable to offset market forces. Coal just can’t compete with cheap natural gas and the falling cost of solar power, wind and other forms of renewable energy.
Jobs in the sector continue to shrink. While there are over 129 million people employed by businesses in the US, there are only about 50,000 coal miners in the or 0.04% of the country’s total number of people working.
The latest jobs report, published last week, shows that there are fewer people employed by the coal sector now (50,600 as of February) than three years ago (50,900 in January 2017). This compares to over 6.4 million jobs being added in the past three years.
Internal demand for the fossil fuel, in turn, has hit a decades-low point with power plants expected to consume less coal next year than at any point since President Jimmy Carter was in the White House, according to official forecasts. At the same time, financial institutions are restricting thermal coal funding.
To date, over 100 global banks and insurers, including Goldman Sachs and JPMorgan Chase, have announced their divestment from coal mining and/or coal-fired power plants.
https://www.mining.com/foresight-energy-becomes-latest-us-coal-miner-to-file-for-bankruptcy/
Canadian band plays world’s deepest underground concert
A Canadian band set a Guinness World Record when they ventured 6,213 feet below sea level to play a 50-minute concert.
Guinness adjudicator Kaitlin Vesper was on hand March 7 deep inside Vale’s Creighton Mine in Greater Sudbury, Ontario, to witness the concert played by the Shaft Bottom Boys.
“Working for Guinness World Records, I get to meet a lot of very interesting people and travel to some interesting places but can confirm I haven’t been anywhere as interesting as Creighton Mine or been this far below sea level before,” Vesper said while handing the group their official certificate.
The Shaft Bottom Boys were awarded the record for the world’s deepest concert underground, with a depth of 6,213 feet and 3.05 inches below sea level.
The concert and record attempt were a joint fundraising effort between Vale and Science North. Organizers said the event raised funds for Science North summer camps and charity Miners for Cancer.
Coronavirus sends shudders through mining industry as case confirmed after top conference
The consequences of holding one of the largest mining conferences on the planet in Toronto last week in the midst of a global health scare became clearer on Wednesday when public health authorities confirmed that an attendee from Sudbury, Ont., has tested positive for coronavirus, sending shudders through the industry.
The conference, hosted by the Prospectors and Developers Association of Canada, was widely attended including appearances by Prime Minister Justin Trudeau and senior cabinet officials, Ontario Premier Doug Ford and his senior cabinet officials, as well as numerous senior and junior mining executives, drawing some 23,000 people in total — down only 10 per cent from the prior year, despite the known risks of the spread of coronavirus strain COVID-19.
The infected individual, described as male in his fifties, attended the event on March 2 and 3. He was in self-isolation and his identity had not been divulged, but two sources said it is believed to be an individual who works for Ontario’s Ministry of Energy, Northern Development and Mines.
The ministry is based in a building connected to the Laurentian University in Sudbury. A spokesman for the university said all classes were cancelled as of Wednesday and said that the Ministry of Energy, Northern Development and Mines would provide further information.
Despite a turbulent year – BHP keeps its brand crown
BHP, in alliance with Mitsubishi, owns and operates coal mines in Queensland, Australia.
Australia’s BHP has retained the title of the world’s most valuable mining, iron & steel brand, despite recording a 3% drop in brand value to $5.8 billion, according to the latest report by Brand Finance, an independent brand valuation consultancy.
BHP has had a turbulent year, from negotiating a $5 billion lawsuit related to the Samarco dam disaster in 2015, to battling the repercussions of the Australian bushfire that severely damaged its coal output, with production falling 13% in the final months of 2019. These setbacks, coupled with the brand’s exposure to fluctuating global trade and softening demand in the Chinese market, resulted in a fall in the company’s brand value in 2019.
Brand Finance adds that the future of BHP looks bright, as iron ore prices – the brand’s main commodity and source of income – are expected to remain high throughout 2020.
BHP’s newly appointed CEO, Mike Henry, has already been garnering media attention and stakeholder scrutiny following his refusal to withdraw the brand from the Minerals Council of Australia, which has been heavily criticized for its position on climate change. Despite this, the consultancy believes Henry’s tenure could provide the impetus for change needed to rejuvenate the brand as BHP continues to tackle the challenges faced across the sector.
“BHP, along with all mining, iron & steel brands, is having to negotiate the increasing intolerance of new mining projects; a strong brand becomes increasingly important in keeping other influential stakeholders, such as regulators, on side to maintain growth and profitability,” Brand Finance CEO David Haigh said in the report.
https://www.mining.com/despite-a-turbulent-year-bhp-keeps-its-crown/
Colombia coal miner Cerrejon, union fail to reach contract agreement
BOGOTA, March 6 (Reuters) – Cerrejon, one of Colombia’s biggest coal producers, and its largest workers union on Friday concluded contract negotiations without reaching an agreement, the parties said.
Union members will now vote on whether to strike or to go to arbitration with the company.
“There was no agreement. We will call a vote between a strike and an arbitration,” Igor Diaz, president of Sintracarbon, told Reuters in a message. “Right now we are closer to a strike than we are to a solution.”
“Negotiations remain ongoing,” Cerrejon said in a message, which is owned equally by BHP Group, Anglo American and Glencore.
The company exported 26.3 million tonnes of coal in 2019 and has 5,896 employees, of which 4,600 are union members.
The union is demanding a pay rise of 7.8%, as well as additional health, education and accommodation benefits. The mining company, which offered a rise of 3.8% to match inflation in 2019, is also in talks with smaller union Sintracerrejon.
The initial negotiation period between the miner and Sintracarbon ended on Feb. 15 but both groups agreed to a further 20 days of negotiations, which expired on Friday.
The last strike at Cerrejon was in Feb. 2013 and lasted 32 days.
Last year, coal prices fell to an average of $51.40 per tonne, down from $82.50 per tonne in the previous year, according to the Energy Ministry.
https://www.reuters.com/article/cerrejon-colombia-idCNL1N2AZ1JH
Mining The Ocean Bottom For Metals – Is This A Bad Idea?
Everyone is finally getting the idea that going green isn’t just shutting down coal plants or driving electric vehicles.
Those are necessary, but the how may be even more important than the what. Bringing up green tech like electric vehicles and wind turbines takes a lot of resources, more than we can provide now, particularly special metals like Co, Li, Te and Nd, as well as just base metals like Fe, Cu, Pb and Zn.
And getting those metals out of the ground in the amounts needed is as bad or worse for the environment as drilling for oil and gas, or mining for coal. And China leads the world’s production of these metals – by a lot.
In mineral-rich regions of China, poisoned water and soil have caused skyrocketing disease, cancer and death rates in impoverished villages, like that shown above. As a result of producing things like neodymium (Nd) for wind turbine magnets, most crops and animals have died around a 5-mile-wide crusty lake of toxic black sludge near the City of Baotou.
Poisoned water and soil with skyrocketing disease, cancer and death rates near the City of Baotou, Inner Mongolia as a result of mining and processing rare metals like neodymium for wind turbine magnets. NASA
Geologists have long known that the ocean floor is chock full of metals – Cu, Ni, Ag, Au, Pt and even diamonds.
These occur as sulfide crusts around deep ocean vents, in thin sediment layers and as bits lying on the ocean floor. But the big prize is something called a manganese nodule.
Manganese nodule
A 4-inch diameter manganese nodule. These nodules are polymetallic rock concretions on the sea bottom formed of concentric layers of iron and manganese hydroxides around a core of san or, a piece of rock or shell. These nodules occur in most oceans, even in some lakes, and are abundant in the abyssal plains of the deep ocean between 4,000 and 6,000 m (13,000 and 20,000 ft). They contain varying amounts of manganese, iron, nickel, copper, cobalt, titanium and barium. KOELLE
Manganese nodules are polymetallic rock concretions on the sea bottom formed of concentric layers of iron and manganese oxihydroxides. These nodules occur in most oceans, even in some lakes, and are abundant on the abyssal plains of the deep ocean between 4,000 and 6,000 meters (13,000 and 20,000 ft).
Manganese nodules contain varying, but large, amounts of manganese, iron, nickel, copper, cobalt, titanium and barium, as well as lesser, but significant, amounts of precious and rare metals like niobium, vanadium, thallium, bismuth, yttrium, lithium and molybdenum.
Nodule formation is simple. Most metals are dissolved in sea water to some amount. Over time, they can precipitate around a nucleus of some kind on the sea floor – a shark’s tooth, a fragment of shell – around which the nodule grows.
Manganese oxide minerals are key, especially vernadite, todorokite and birnessite. These form naturally in water and in the pore water between the sediment particle. Other metals are incorporated in smaller amounts during their precipitation.
Nodules grow very slowly, millimeters per million years, and environmental conditions must remain stable over this long of a time – a lot of sediment can’t be raining down on them, there must be constant flow of ocean bottom water, small pieces of shells need to be around to serve as nucleation sites, the sediment must be porous, not hard rock, and there must be a good supply of oxygen in order to form the manganese oxides.
Thus, deep ocean abyssal plains are perfect. Areas having high economic supplies are concentrated particularly in the Pacific and Indian Oceans, in the wide deep-sea basins at depths of 3500 to 6500 m.
The Clarion-Clipperton Zone (CCZ) is the largest, about the size of Europe, extending from the west coast of Mexico to Hawaii. The total mass of manganese nodules here is over 21 billion tons. Other important areas include the Peru Basin, the Penrhyn Basin near the Cook Islands, and the central Indian Ocean.
Brazil’s Vale says part of Gongo Soco mine continues to erode
SAO PAULO, March 9 (Reuters) – Brazilian miner Vale said the company is monitoring its Gongo Soco mine in Barao dos Cocais as an embankment at the facility continues to erode, according to a securities filing on Monday.
Vale said it is watching for any impact the erosion could have on the Sul Superior mining waste dam about 1.5 km (0.9 miles) from the embankment, having raised the emergency level at the dam last year after heavy rainfall eroded the structure’s reservoir.
Here’s Who’s Backing Coal as Some of the World’s Biggest Banks Get Out
Moves by some of the world’s biggest banks to end coal financing for the sake of the planet was supposed to create major headaches for companies like Whitehaven Coal Ltd.
Yet there was the Australian miner on a conference call last month announcing the refinancing and extension of a A$1 billion ($650 million) credit line, backed mostly by Chinese and Japanese lenders.
“Our banking relationships are strong, we are really well supported,” Chief Financial Officer Kevin Ball said. “That might come as a little bit of a surprise to people who aren’t familiar with coal.”
The relatively easy credit underscores the challenge of ridding the world of the dirtiest energy source. While global banks including Goldman Sachs Group Inc. and BNP Paribas SA are withdrawing support for coal mines, others are stepping into the breech.
Asian banks and export credit agencies, private-equity firms and the cashflow from coal sales are all keeping the mines operating with ample funding even as pressure mounts to put the industry out of business. The Export-Import Bank of China and the Japan Bank for International Cooperation lead firms that have committed $29 billion for new coal power projects in Vietnam and Indonesia alone.
“If the strategy is to starve coal mines of all debt finance there is still a long way to go,” said Richard Denniss, chief economist at the Australia Institute, an environment-focused think tank.
Breakthrough technique could produce lithium in hours not months
A new filtration technique could cut the time needed to produce lithium raw materials at South America’s vast evaporation ponds to hours from months, according to a study by a group of international scientists.
The method, developed by researchers at Australia’s national science institute CSIRO, Monash University, the University of Melbourne and the University of Texas at Austin, mimics the filtering capabilities of living cells to extract lithium from concentrated salt water, where the metal is typically mixed with other materials, including potassium and salt.
“We could one day have the capability to produce simple filters that will take hours to extract lithium from brine, rather than several months to years,” said Huanting Wang, a professor of chemical engineering at Monash University, and among the authors of newly published research on the technique.
Early studies indicate about 90% of contained lithium can be recovered using the filter system, compared to about 30% when producers use the existing process of pumping brines into a series of ponds and allowing the sun to evaporate the liquid for as long as 18 months, according to the researchers. Fort Lauderdale-based Energy Exploration Technologies, which is seeking to commercialize the technology, says the process can also cut refining costs by about half.
Lithium, key for rechargebale batteries that power electric cars, is currently mainly produced either by refining spodumene, a mineral typically extracted from hard rock mines in Australia, or by processing salty brines found predominantly in Chile, Argentina and Bolivia.
Though lithium prices have tumbled since mid-2018 as a raft of new mine projects have lifted supply and amid weaker demand in China, suppliers are focused on developing more efficient production techniques ahead of a forecast demand revival from about 2023, according to BloombergNEF. There’s currently not enough lithium capacity under development to meet a forecast 2 million tons of total demand by 2030, BNEF said in a note last month.
New extraction technologies promise to curb the use of water and energy in lithium production, and to potentially open up new sources of supply, including petroleum wastewater and geothermal brines, according to BNEF. Companies including Eramet SA, Rincon and Summit Nanotech are among others who’re developing nano-filtration technologies.
Coronavirus could have a lasting effect on China-dominated lithium sector
It’s been a tough time for miners of lithium, the metal essential to many high-performing batteries.
Just as the market looked to be crawling out of a two-year slump that knocked about 60% off the battery metal’s prices, its biggest player, China, has been hammered by the novel coronavirus outbreak. Three major mining firms have issued profit warnings for 2020, with the world’s second-biggest lithium producer SQM explicitly citing coronavirus-driven logistics issues as a problem.
It’s hard to overstate China’s importance to the lithium market. It is the biggest consumer of the metal, it is central to supply chains that process lithium, and a quarter of the world’s lithium is produced by two Chinese companies. What’s more, it has been a major bankroller of lithium projects.
https://qz.com/1812892/coronavirus-may-have-lasting-effect-on-china-dominated-lithium-sector/
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