March Newsletter – 19.03.18
ANNOUNCEMENTS
Joanna Qiao, Behre Dolbear Environmental Specialist, will be attending GMAC Members’ Meeting 22nd March, 2018, 4:30pm – 6:00pm, Beijing Yuyang Hotel
No. 18 Xinyuanxili Zhongjie, Chaoyang Distrcit, Beijing
To arrange a meeting please contact joanna.qiao@dolbear.
+86-18610175024
- Glencore signs massive cobalt sale deal with China’s GEM
- Paradigm shift required to position mining industry for long-term success
- Anglo Says Cleaning Up Mining Will Earn It Billions in Profit
- Three tonnes of dore bars strewn across runway at Russian airport
- Rising Commodity Prices Hide Longer-Term Challenges
- Cobalt to be declared a strategic mineral in Congo
- Eurochem produces first potash at new $2bn Russian plant
- Battery makers descend on Australia, Canada cobalt developers
- Zimbabwe Ownership Law Stymies RioZim’s Bold Expansion Plan
TOP NEWS
Glencore signs massive cobalt sale deal with China’s GEM
(Reuters) – Glencore Plc (GLEN.L), the world’s biggest producer of cobalt, has agreed to sell around a third of its cobalt production over the next three years to Chinese battery recycler GEM Co Ltd (002340.SZ), according to a filing by GEM on Wednesday.
Glencore will sell 52,800 tonnes of cobalt hydroxide to GEM between 2018 and 2020 as demand for cobalt, a critical metal in lithium-ion batteries, soars on a forecasted boom in electric vehicle sales.
Paradigm shift required to position mining industry for long-term success
VANCOUVER (miningweekly.com) – The long-term mindset of the mining industry will have to change if it is to position itself for long-term success, set against an ever-changing landscape, says BHP Billiton’s head for Minerals America, Daniel Malchuk.
He told an audience during the keynote session of the recent Prospectors and Developers Association of Canada’s 2018 convention, held in Toronto, that it is critical for the industry to understand the past, in order to better prepare for the future.
“Previously, the industry did not plan for the future, or think about its context in broader society,” he said, pointing to the example of how sodium nitrate mining a century ago in Chile left in its wake a trail of destruction and devastated communities, when the commodity suddenly became synthetically manufactured in laboratories.
“The industry had no interest in cultivating or nurturing the host towns the industry created. It’s been endemic in the industry at times,” he stressed.
Anglo Says Cleaning Up Mining Will Earn It Billions in Profit
Bloomberg
- Miner to spend $200 million a year on new sustainability goals
- Company remains one of the biggest thermal coal producers
Mining is a dirty business, but Anglo American Plc Chief Executive Officer Mark Cutifani says it doesn’t have to be.
The miner of everything from copper to diamonds to iron ore is overhauling its sustainability targets, and predicts it can earn an extra $9 billion through 2030 by improving the way it mines and boosting relations with governments and communities.
In an industry that rips up massive areas of pristine landscape while consuming valuable water and pumping out dust and pollution, companies that don’t become better corporate citizens will face higher costs, mounting opposition and lose out on new deposits, Cutifani said in an interview.
“We need access to resources,” he said. “If you don’t have good relationships you don’t get access to ground; if you don’t have access to ground you can’t develop a mine.”
Three tonnes of dore bars strewn across runway at Russian airport
MINEX Forum
A ‘An-12’ airplane taking off after refuelling at an airport in Siberia lost almost 172 bars of gold/silver dore that fell to the ground after breaking through the loading bay fuselage.
The bars, which originally came from Kinross’ Kupol mine in Chukotka, northeastern Russia, weighted 20 kilos each and ended up scattered on the runway and the fields that surround the airport.
According to local media and a Telegram message from Russia’s Investigative Committee, the plane’s total cargo weighted about 9.3 tonnes so about a third of it was dropped. Following the incident, the aircraft had to land back at the airport and police had to secure the area to prevent people from rushing to the scene.
An AFP report states that all of the flying bars were recovered.
http://minexforum.com/en/three-tonnes-of-dore-bars-strewn-across-runway-at-russian-airport/
COMMODITIES
Rising Commodity Prices Hide Longer-Term Challenges
Bloomberg
Slower economic growth in China is a concern to producers and exporters worldwide.
As major economies continue to expand moderately, it’s not surprising that commodity use is increasing and many prices are rising. The Bloomberg Commodity Index is up 20 percent since early 2016. Crude oil prices have more than doubled since bottoming in February 2016. The MSCI World Metals & Mining Index of equities has risen about 90 percent since the start of 2016, topping the 30 percent gain for the MSCI All Country World Index.
Yet the rosy outlook presented by financial markets masks challenges for commodity producers from a broader transition in the economy: A greater share of economic spending is on services and a declining portion of outlays is for goods. In 1947, 61.6 percent of U.S. personal consumption expenditures was devoted to goods and 38.4 percent to services. In 2017, those shares were 32.3 percent and 67.7 percent, respectively. The same dynamic is at work in emerging economies such as China. In the services sector, consultants use some commodities via computers, but the vast majority of the output is in analysis and experience. Among goods, in contrast, vehicles are largely composed of commodities such as steel, aluminum and rubber.
Slower economic growth in China is a concern to commodity producers and exporters worldwide, especially since that country uses 40 percent to 50 percent of global production of many mineral and agricultural products, according to data from the National Bureau of Statistics of China. In fact, the ups and downs of the commodities market since 2001 can be tied to China’s decision to join the World Trade Organization at the end of that year. Although big miners of copper, coal and other raw materials collectively undertook new projects that cost $1 trillion in total to take advantage of demand from China, many producers failed to realize that China was not adding much to net global demand for commodities but rather absorbing more of the global total as manufacturing shifted there and to other developing countries from North America and Europe.
Cobalt to be declared a strategic mineral in Congo
LONDON, March 14 (Reuters) – Democratic Republic of Congo will declare cobalt and coltan, used in electric vehicle and renewable energy technology, as “strategic” minerals which will earn the country higher royalties, an advisor to the prime minister said on Wednesday.
A new mining code was signed into law on Friday by President Joseph Kabila despite vigorous opposition by global mining companies with operations in Congo such as Glencore, Randgold and China Molybdenum.
Eurochem produces first potash at new $2bn Russian plant
MINEX Forum
Russia-focused fertiliser producer Eurochem said it has produced its first potash at its new $2-billion Usolskiy plant in Russia.
The project may intensify competition among suppliers of the crop nutrient in the region, traditionally dominated by Russia’s monopoly producer Uralkali and Belarusian miner Belaruskali.
Privately-held Eurochem, one of the world’s largest producers of nitrogen-based fertilisers, plans to produce the first ready-for-sale potash at its new Russian plant in the second quarter of 2018. By the end of the year, it plans to produce 450 000 t of ready product at the plant.
Eurochem has been actively investing in two potash projectsand one ammonia project in recent years. After the start of the Usolskiy plant in March, another – VolgaKaliy – will be launched this summer.
Swiss-based Eurochem, owned by Russian businessman Andrei Melnichenko, has said that the launch of the two potash mines in Russia in 2018 will result in higher core earnings the following year. Eurochem produces fertilisers and crop nutrients in Russia, Belgium and Lithuania.
http://minexforum.com/en/
Battery makers descend on Australia, Canada cobalt developers
MELBOURNE/VANCOUVER March 19 (Reuters) – Nervous Asian battery makers are turning to early-stage cobalt projects in Australia and Canada to lock in supplies of the critical battery ingredient ahead of expected shortages as demand for electric vehicles revs up.
Mine developers say interest from Japanese and Korean firms is particularly strong as they compete with rivals from China, which has built deep supply chain ties with the Democratic Republic of Congo, the world’s top producer.
The central African country accounts for nearly two-thirds of global cobalt output and production is set to rise despite concerns over the use of child miners and rising royalties.
“We are starting to see the first signs of an arms race to secure long term cobalt supplies,” said Joe Kaderavek, chief executive of Australia’s Cobalt Blue.
“With over 85 percent of new global cobalt supply over the next decade coming from Africa, in a region where the Chinese have entrenched relationships, the Korean and Japanese cobalt processing industries are very focussed upon Australian and Canadian projects.”
LEGAL AND REGULATORY
Zimbabwe Ownership Law Stymies RioZim’s Bold Expansion Plan
- Company needs $125 million to more than double production
- Investors seen reluctant due to ownership laws, royalties
RioZim Ltd., a Zimbabwean diamond, nickel and gold miner, wants to more than double output of gemstones at its Murowa mine. The problem is the expansion depends on attracting $125 million in investment against a backdrop of high royalties and ownership laws that scare investors.
President Emmerson Mnangagwa, who replaced President Robert Mugabe after military intervention in November, has said the southern African nation won’t apply the ownership laws, known as the Indigenization Act, to most minerals. However, it still applies to miners of diamonds and platinum, which will be required to sell or transfer 51 percent stakes to black citizens.
“Without firm direction on the indigenization plan, financiers, lenders and equity holders alike are unlikely to provide the much-needed funds,” RioZim Chairman Lovemore Chihota said. “We need $125 million to give the mine a further three years of life, but as you will appreciate, this is a massive sum of money for any Zimbabwean company.”
COMMODITY PRICES
