November Newsletter – 16.11.2020


  • Gangfeng ups stake in Sonora lithium project
  • US coking coal unfazed by Biden presidency
  • China-Australia relations: iron ore demand powers ahead as Fortescue secures US$4 billion in deals
  • Alrosa’s pink diamond sets new record price at auction
  • Seeking to reopen PNG gold mine, Barrick CEO meets landowners
  • Galaxy Resources signs offtake deal with Sichuan Chengtun Lithium
  • JX Nippon buys partner’s stake in Caserones copper mine
  • Japanese aerospace company chooses Denver area as its U.S. headquarters
  • Neutralising negative growth, Coal India poised for output ramp-up

Gangfeng ups stake in Sonora lithium project

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The Sonora project is expected to produce 35,000 tonnes of lithium per year at full tilt

Shares in lithium explorer and developer Bacanora Minerals (LON:BCN) jumped as much as 13% to 37p on Friday morning after it announced its Chinese partner had more than doubled its stake in the company’s Sonora project in Mexico.

Cornerstone investor Gangfeng Lithium, China’s largest producer of the battery metal, will invest £21.8 million ($29m) to increase its holding in Bacanora’s flagship project from 22.5% to 50%.

Bacanora said the investment was a “huge milestone” in the development of Sonora, which should start producing in 2023.

The Chinese lithium producer, which has major supply agreements with batteries and electric vehicle makers, including Tesla, said it believed Sonora was a key project.

“We have been working with Bacanora on the exciting Sonora Lithium project for over two years and are delighted to be increasing our investment in what we believe to be a world-class lithium project,” Gangfeng’s deputy chairman, Wang Xiaoshen, said in a media statement.

US coking coal unfazed by Biden presidency

US mining firms expect Joe Biden’s presidency to raise some obstacles for the coking coal industry, but there is confidence that infrastructure investment and a different approach to diplomatic relations will foster more favourable market conditions.

Job losses and mine closures in the last year or more, linked to a weak market meant that the Donald Trump administration failed to significantly raise coal employment as the sector had hoped. But support for the outgoing president in the major coal mining states of West Virginia and Alabama remained strong in this last election while Biden secured Pennsylvania by a slim margin of 0.8pc over Trump.

Meanwhile, mining firms appear largely unfazed ahead of Biden’s presidency, with most of them focused on taking advantage of the recent surge in Chinese demand for low-volatile and mid-volatile alternatives to Australian coals amid an import curb.

China-Australia relations: iron ore demand powers ahead as Fortescue secures US$4 billion in deals

  • Australian-listed miner Fortescue Metals Group signed 12 memorandums of understanding (MOUs) at the China International Import Expo (CIIE)
  • China buys just over 80 per cent of Australia’s iron ore, while Australian iron ore makes up 60 per cent of China’s supply

Australian iron ore mining giant Fortescue Metals Group secured some US$4 billion in iron ore deals at the China International Import Expo (CIIE) in Shanghai as Australia’s most important export continues to withstand rising tensions with China amid proposed bans on a number of other Australian products.

The Australian-listed miner signed 12 memorandums of understanding (MOUs) for the purchase of its iron ore with major Chinese steel mills, procurement partners and financial institutions on Monday, the penultimate day of the third CIIE, after hosting two days of events at the expo.

It reaffirmed its deals with long-term partner and major shareholder Hunan Valin Iron & Steel Group in Changsha, Hunan province, for the supply of iron ore and its “strategic cooperation” relationship with the Bank of China, while also striking nine new agreements with future buyers including Baotou Iron & Steel, Benxi I&S Group International Economic & Trading and Lingyuan Iron and Steel.

Alrosa’s pink diamond sets new record price at auction

An extremely rare, purple-pink diamond mined and polished by Russia’s Alrosa (MCX:ALRS) has set a new record price for a gem of that colour sold at an auction after fetching $26.6 million (24.4 million Swiss francs) at Sotheby’s in Geneva.

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The diamond, cut from a rough mined in 2017 in Yakutia, is the largest of its kind ever found in Russia

The flawless 14.83-carat diamond, named “The Spirit of the Rose” after a ballet of the same name from 1911, already had another record under the belt — it’s the largest of its kind ever found in Russia.

The oval gem was bought by a telephone bidder who chose to remain anonymous, Sotheby’s said.

While the selling price is a fresh world record in the pink-purple category, both Alrosa and coloured diamonds specialist had estimated the stone would fetch between $60 million and $65 million.

Coloured diamonds, especially pink ones, have been lately achieving top prices. They are expected to soar to new highs in the coming years as Rio Tinto this month closed its iconic Argyle mine. The operation was the world’s biggest diamond mine and the main global source of high-quality pink gems.

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The Pink Star holds the world’s auction record for any diamond (Photo: Sotheby’s.)

Sotheby’s set the record for any gem ever sold at an auction in 2017, with its $71.2 million sale of the 59.6-carat Pink Star to Hong Kong-based jewelry retailer Chow Tai Fook Jewellery Group.

Until then, the most expensive coloured diamond ever sold at auction was the “Oppenheimer Blue,” which fetched 56.8 million Swiss francs (about $58 million) in May 2016.

Seeking to reopen PNG gold mine, Barrick CEO meets landowners

SYDNEY, Nov 12 (Reuters) – Barrick Gold Corp boss Mark Bristow met Papua New Guinea landowners in the capital of Port Moresby on Thursday to discuss royalty arrangements, the landowners said, as the miner seeks to negotiate a reopening of the remote Porgera gold mine.

The Canadian miner’s lease over the highlands mine, which it operated with China’s Zijin Mining, lapsed when Prime Minister James Marape refused to extend it in April.

Last month Bristow and Marape agreed that Barrick and Zijin would be allowed to remain as operator, but few other details seem settled and Bristow told a mining conference that fuller resolution of the dispute was “a long way off”.

The Porgera Landowners Association, representing some local landowners, said in a statement that they met Bristow in a Port Moresby hotel and are pressing for direct royalty payments. It was unclear if anything was agreed.

Galaxy Resources signs offtake deal with Sichuan Chengtun Lithium

Mining company Galaxy Resources has signed a three-year offtake agreement with Sichuan Chengtun Lithium, a wholly-owned subsidiary of Chengxin Lithium Group.

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The Chinese lithium producer will purchase a minimum of 60,000 dry metric tonnes (dmt) of spodumene concentrate per annum from Galaxy’s Mt Cattlin mine.

The Mt Cattlin spodumene mine is located two kilometres north of the Ravensthorpe town in Western Australia.

The commencement of the offtake will take effect from next year and will continue through 2023.

Galaxy has ended its contract with Yi Chun Yin Li Energy and is now allocating that tonnage to the new offtake agreement with Sichuan Chengtun.

Galaxy Resources CEO Simon Hay stated: “We are pleased to welcome Chengxin as a new major offtake partner, further diversifying and strengthening Galaxy’s customer base to support Mt Cattlin’s operations. Chengxin also has expansion plans underway to increase production capacity in preparation for the impending lithium demand surge in the medium to long term.

“The drawdown of inventory combined with strong customer indications for demand in 2021 has also led Galaxy to examine the potential ramp up of Mt Cattlin back to full rate in 2021, although there will need to be sustained price increases for us to commit to the return of higher production levels.”

Galaxy has existing offtake agreements for Mt Cattlin’s spodumene concentrate with Yahua for 120,000t and Meiwa for 55,000t.

JX Nippon buys partner’s stake in Caserones copper mine

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Caserones copper mine is located in Chile’s arid north, close to the border with Argentina.

Japan’s top smelter, JX Nippon Mining & Metals, is buying a stake in its majority-owned Caserones copper mine in Chile, which was put up for sale on Monday by its partners in the operation Mitsui & Co and Mitsui Mining and Smelting.

The move doesn’t come as a surprise as Caserones has been a source of ongoing worries for its owners even before it began producing, in May 2014.

The project’s cost more than doubled to $4.2 billion from an estimated $2 billion because of factors including rising labour costs and bad weather.

Once in production, the mine’s output has been consistently below expectations due to a series of technical problems in its ramp-up phase and market conditions, costing its Japan-based owners hefty impairment charges.

Mitsui Mining, which holds 25.87% stake in Caserones, will book a 20 billion yen ($193 million) loss from the operation in the current financial year while Mitsui, owner of a 22.63% stake in the mine, said it expected a 7 billion yen ($67 million) loss from the deal.

Ditching the loss-making copper mine is part of Mitsui’s reorganization and asset portfolio reconstructing, it said in a separate statement.

Mitsui gained access to Caserones in 2010 after buying a stake in Minera Lumina Copper Chile (MLCC), the mine operator. At the time, the mine had a planned annual capacity of 150,000 tonnes of copper concentrate and 30,000 tonnes of copper cathodes.

The operation’s expected annual production still falls short of that target, though it has recently stabilized at more than 100,000 tonnes.

On top of that, MLCC is facing fines of up to $54.8 million for infractions to provisions established in its mining permit.

Japanese aerospace company chooses Denver area as its U.S. headquarters

Company cites Colorado’s strong aerospace industry as factor in its decision

A Japanese aerospace company that is developing a lander to make deliveries to the moon has chosen Colorado for its U.S. headquarters.

Gov. Jared Polis said in a statement Monday that ispace inc. will open its office in the Denver area.

“Colorado is a proven leader in the aerospace sector and one of the best places to live and to start or run a business,” Polis said.

Colorado’s overall private aerospace employment of 30,020 is second only to California’s and is the country’s highest per capita, according to a report by the Metro Denver Economic Development Corp. The report says 57,830 private and military workers in Colorado support an additional 140,390 workers in all industries, bringing direct and indirect jobs supported by the aerospace sector to 198,220.

The industry contributes more than $15 billion annually to the state economy.

“Colorado’s dynamic aerospace ecosystem and abundance of talent strongly align with our aggressive hiring plan,” said ispace CEO Kyle Acierno.

In October, the Colorado Economic Development Commission approved a Job Growth Incentive Tax Credit  worth up to $1.13 million for ispace. The new office is expected to employ 48 people over the next five years with an average wage of $118,333.

The company is also looking to build a plant to manufacture its landers, although it is not certain if that would be built near the U.S. office.

Neutralising negative growth, Coal India poised for output ramp-up

New Delhi: State-owned Coal India Ltd (CIL) for the first time in the current fiscal on October 20 neutralised the negative growth in coal production for the year. The coal production of 265.69 million tonnes (MTs) on October 20 was at level with last year’s output on the same date with the company posting a marginal 0.04 MT increase in volume terms, CIL said in a statement.

CIL arm Mahanadi Coalfields Ltd with progressive coal production of 71.17 MTs, on Wednesday, which is a 9.61 MT increase on year-on-year comparison and Northern Coalfields Limited at 60 MTs logging a jump of 3.15 MTs during the referred period have played catalytic role in wiping off CIL’s negative production trend, it said.

Also, what made this possible was that beginning August, CIL began posting strong growth in production and offtake.


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