December Newsletter – 14.12.2020


  • Australia’s IGO to take 25% of Greenbushes lithium mine and 49% in Li processing plant; $1.4B deal
  • Pakistan won’t approve new coal power plants
  • China Tells Power Firms to Cap Coal Purchase Cost: Futures Daily
  • China’s trade war is actually benefiting Australia – and harming the communist nation instead, economist claims
  • Finland vanadium plant could open door to European market
  • Congo Agrees to Freeport’s Sale of Copper Mine to China Moly
  • Chile’s SQM bets on higher sales, demand for lithium, announces new expansion
  • Afghan women arrive in Kazakhstan as part of EU-funded educational project

Australia’s IGO to take 25% of Greenbushes lithium mine and 49% in Li processing plant; $1.4B deal

Australian mining company IGO will acquire a 24.99% stake in the Greenbushes hard-rock lithium mine and a 49% share of the Kwinana lithium hydroxide plant—both in Western Australia—from China-based Tianqi Lithium for US$1.4 billion.

The deal will be funded through a combination of debt, IGO’s existing cash position (which totaled US$366 million at end-September 2020) and an equity raising, with completion targeted for Q2 2021.

Tianqi, one of the world’s top producers of lithium used in EV batteries, said it would use the proceeds from the stake sale to repay part of its $1.88 billion in loans set to mature near the end of December.

Roskill notes that this deal provides IGO with a share in one of the world’s lowest-cost hard-rock lithium mines and, once commissioned, one of the few lithium hydroxide production facilities outside of China coupled with an experienced partner in Tianqi.

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Greenbushes is located in Western Australia and is currently the largest hard-rock lithium mine in the world. Since May 2014, the mine has been owned by Talison Lithium in a joint venture between Tianqi Lithium (51%) and Albemarle (49%). It has produced spodumene concentrate predominantly for export to China-based mineral conversion plants or consumers of technical-grade spodumene concentrates in Europe, North America and China.

Lithium ore (spodumene) at Greenbushes is mined from the fresh, unweathered zones in the pegmatite (igneous rock, formed underground, with interlocking crystals) that are exposed in the open pits.

Pakistan won’t approve new coal power plants

Pakistan’s Prime Minister, Imran Khan, announced over the weekend that as part of a number of efforts to counteract the effects of climate change, his administration will not approve new coal-fired power generation projects.

“We have already scrapped two coal power projects which were supposed to produce 2,600 megawatts of energy. [We have] replaced them with hydroelectricity,” Khan said during his address at the Climate Ambition Summit 2020, which was hosted virtually by the United Nations, the United Kingdom, France, Chile and Italy.

Khan also talked about ‘indigenous coal’ and said that his government has decided to support initiatives related to producing energy from coal-to-liquid or coal-to-gas so that the fossil fuel doesn’t have to be burnt.

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“We have also decided that by 2030, 60% of all energy produced in Pakistan will be from clean energy, renewables, and also 30% of all our vehicles will be [powered by] electricity,” the PM said.

Over the last five years, the South Asian country has seen 18 wind power projects of 937MW, six solar power projects of 418MW and six bagasse projects totalling 201 MW achieve commercial operations and provide electricity to its grid. Yet, renewables and nuclear only make up 9% of the energy mix, while hydropower produces 27% and fossil fuels – natural gas, liquefied natural gas, and coal – generate 64% of the electricity.

There is also still a gap between current demand and supply of approximately 2,000 MW in peak season, as the annual consumption rate has grown by almost 7%.

China Tells Power Firms to Cap Coal Purchase Cost: Futures Daily

China’s top economic planning agency requested power companies to cap the buying price of coal amid a surge in the cost of the fuel, the Futures Daily reported.

The cap was set at 640 yuan ($98) per ton after a Saturday meeting between the National Development Reform and Commission and 10 power operators, the report said, citing people it didn’t identify. The NDRC will investigate the origins of coal purchases if prices go above the cap, and require companies to file a report, Futures Daily said.

The agency also asked companies to avoid getting high-priced coal as much as possible, and coordinate supplies among the power plants they own.

A series of deadly mining accidents has hit output, while self-imposed import restrictions limited shipments from overseas. That has led to a supply crunch at a time when winter demand for heating is peaking and industrial activity is surging, pushing up coal prices.

Futures Daily also said all restrictions on coal imports — except for those from Australia — will be removed. China has blacklisted a wide swathe of Australian commodities and food products amid a worsening diplomatic spat, with more than $500 million worth of Australian coal stranded on ships anchored off Chinese ports.

China’s trade war is actually benefiting Australia – and harming the communist nation instead, economist claims

Beijing has slapped tariffs on Aussie wine and barley and blocked other exports
But China is importing so much Australian iron-ore that the price is soaring
Top economist believes Australia’s deficit will be $3billion better than forecast
China’s trade war with Australia has backfired and is actually handing Canberra more cash, according to a top economist.

Beijing’s decision to slap tariffs on Aussie wine and barley and block several other exports including wood, coal and seafood has badly affected some producers.

But the tension has helped push up the iron-ore price as importers scramble to get hold of the mineral amid fears President Xi Jinping will impose a tariff on Australia’s largest export.

Finland vanadium plant could open door to European market

The Finnish city of Pori has been chosen as the preferred site of a vanadium recovery plant proposed by Critical Metals PLC and ASX-listed Neometals and expected to supply up to 5% of the global market from 2025.

Billed as a “sustainable” recycling plant, it is proposed to turn steel-slag from Scandinavian steel giant SSAB into high-purity vanadium chemicals used in specialty steels and energy storage solutions.

The low-emission plant would have among “the highest-grade vanadium feedstock sources in the world”, according to the joint venture partners, who are hoping to muscle in on the European vanadium market currently dominated by Russia, China and South Africa.

The duo recently signed a 10-year agreement with SSAB to supply about 2Mt of stockpiled high-grade vanadium-bearing slag from mills in Sweden and Finland, which have vanadium grades of about 4% vanadium pentoxide (V2O5) and 3%, respectively.

The recovery facility, set to be located at Pori’s Tahkoluoto port, aims to process 200,000 tonnes of slag per year with production scheduled to kick off by the end of 2024.

It will use a “low energy-low emission, hydrometallurgical process to recover vanadium from steel slag”.

The Finnish vanadium recovery plant will be powered by renewable energy and use CO2 gas sequestered from local industry.

A recently completed scoping study into the viability of the recovery plant indicated its operating costs would be in the lowest-quartile range. A feasibility study is due to be completed in mid-2022.

It is not known how the project will be financed. The companies were not available for comment at the time of writing.

Vanadium is included in the EU Commission’s list of critical raw materials due to concerns around supply.

The price of ferro vanadium in Europe rose during 2020 – peaking at over US$30/kg in mid-February – thanks to China’s appetite for vanadium, used in steel production, but has since fallen back to US$24.45/kg.

Congo Agrees to Freeport’s Sale of Copper Mine to China Moly

Democratic Republic of Congo will agree to Freeport-McMoRan Inc.’s sale of its undeveloped Kisanfu copper and cobalt project to China Molybdenum Co., Mines Minister Willy Kitobo Samsoni said in a text message Saturday.

Kitobo said his ministry was required to sign off on the deal according to the country’s mining code, which was revised in 2018. He would not share the terms of the agreement. Freeport did not respond to an email and phone call Friday. A phone call to CMOC went unanswered after normal business hours.

Freeport tried to sell Kisanfu to CMOC when it was still under exploration in 2016 along with its $2.65 billion stake in the Tenke Fungurume copper and cobalt mine. At the time, Freeport was asking $50 million for Kisanfu, which is located between Tenke and Glencore Plc’s massive Mutanda copper and cobalt project, according to its website.

Chile’s SQM bets on higher sales, demand for lithium, announces new expansion

SANTIAGO, – Chilean miner SQM announced on Thursday plans for a fresh expansion of its Chile lithium operations by 2023, predicting its sales of the electric vehicle battery metal would continue their growth through 2021 even as profits flounder.

SQM said it had sold 17,700 tonnes of lithium in the third quarter, up 56% from the same period the previous year despite the global downturn and coronavirus pandemic.

The company said in a statement announcing its quarterly results that it would likely sell 30% more lithium in 2020 than in 2019, and predicted a similar jump in sales volume in 2021. SQM’s head of lithium, Pablo Altimiras, said the company’s optimism was further fueled by hints of higher prices in China, a critical market for the miner.

“We have seen in China a recovery in the price level, which could mean that we have already hit the floor,” Altimiras said in a conference call with stock analysts. “We should see better prices during the next year.”

Prices for lithium began to collapse on oversupply last year. Miners boosted output in anticipation of a demand rush from carmakers going into 2020, but the COVID-19 pandemic slammed the brakes on the electric vehicle revolution in China and elsewhere, denting profits and forcing many companies to shelve expansion plans.

SQM said its net income plunged 97% year-on-year to $1.7 million in the quarter, dragged down by the low prices and a one-time, $62.5 million settlement fee in a class action lawsuit.

Afghan women arrive in Kazakhstan as part of EU-funded educational project

A group of 10 Afghan women, who were the recipients of scholarships funded by the European Union, have arrived in Kazakhstan to pursue their education, the press-service of the OSCE’s regional office said on December 9.

The students will begin their academic journey with online English language classes at Almaty Management University (AlmaU) Language School. After completing the program, they will enroll at one of the top universities in Kazakhstan – the Kazakh-British Technical University – to study mining.

“The project runs under a €2 million grant provided by the EU to support Afghan women who strive for higher education. In total, 50 Afghan women will obtain higher, technical, and vocational educational degrees at various universities across Kazakhstan and Uzbekistan by 2025,” the OSCE said. “Empowering women, via education, creates a vast personal as well as economic impact in that it generates opportunities to realize one’s potential and ability to contribute to their communities upon returning to Afghanistan.”

“Women are central to economic growth and sustainable development and their economic empowerment is crucial to the progress of any country. According to the new EU Strategy for Central Asia, it is in the joint interest of the EU and of the Central Asian countries to intensify cooperation to promote peace and stability in Afghanistan. In other words, without a peaceful Afghanistan, there will be no prosperous Central Asia.


Link for more detailed information

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