November Newsletter – 23.11.2020


  • Copper price soars to highest since 2014 on vaccine hopes
  • New Chinese submersible reaches Earth’s deepest ocean trench
  • Ghanaian government expects increased gold production in 2020
  • China must ban new coal power plants to meet 2060 goal – report
  • A US rare earths miner is staging a comeback to take on China
  • Copper price surges on Peru worries, China futures launch
  • Northern Dynasty submits Pebble mitigation plan

Copper price soars to highest since 2014 on vaccine hopes

Copper price surged to a fresh two-year high on Friday following positive reports on covid-19 vaccine breakthroughs from Pfizer and Moderna.

On the Comex market, copper for delivery in December gained 3.1% to $3.3015 a pound ($7,276 a tonne) by mid-afternoon in New York. If copper closes above $3.30 it would be the highest level since January 2014.

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Copper, considered an economic barometer, is heading for an eighth straight monthly gain
The metal surged as much as 1.6% to $7,207.50 a tonne on the London Metal Exchange, to the highest since June 2018.

Pfizer and BioNTech SE plan to file for emergency use, allowing for the vaccine, which they say is 95% effective, to be used in the US in the next month.

Copper is heading for an eighth straight monthly gain, the longest run in almost a decade, as rebounding growth in China and signs of progress in developing a covid-19 vaccine buoy demand prospects.

Investors are also betting on a boost from spending on green infrastructure following the five-year plan hammered out by China, as well as alternative-energy initiatives outlined by US President-elect Joe Biden.

New Chinese submersible reaches Earth’s deepest ocean trench

BEIJING – China livestreamed footage of its new manned submersible parked at the bottom of the Mariana Trench on Friday, part of a historic mission into the deepest underwater valley on the planet.

The “Fendouzhe,” or “Striver,” descended more than 10,000 meters (about 33,000 feet) into the submarine trench in the western Pacific Ocean with three researchers on board, state broadcaster CCTV said.

Only a handful of people have ever visited the bottom of the Mariana Trench, a crescent-shaped depression in the Earth’s crust that is deeper than Mount Everest is high and more than 2,550 km (1,600 miles) long.

The first explorers visited the trench in 1960 on a brief expedition, after which there had been no missions until Hollywood director James Cameron made the first solo trip to the bottom in 2012.

Cameron described a “desolate” and “alien” environment.

Video footage shot and relayed by a deep-sea camera this week showed the green-and-white Chinese submersible moving through dark water surrounded by clouds of sediment as it slowly touched down on the seabed.

Fendouzhe, which has made multiple dives in recent days, had earlier this month set a national record of 10,909 meters for manned deep-sea diving after landing in the deepest known point of the trench, Challenger Deep, just shy of the 10,927-meter world record set by an American explorer in 2019.

The mission on Nov. 10 beamed up the world’s first live video from Challenger Deep.

The submersible, equipped with robotic arms to collect biological samples and sonar “eyes” that use sound waves to identify surrounding objects, is making repeated dives to test its capabilities.

Ghanaian government expects increased gold production in 2020

Ghana’s Minister of Lands and Natural Resources, Kwaku Asomah-Cheremeh, said that the Nana Akufo-Addo government expects the country’s mining sector to surpass last year’s production of over four million ounces of gold.

According to local media, the minister said this goal is not unrealistic taking into account that AngloGold Ashanti’s 30-million-ounce Obuasi mine has been restarted and that, across the country, production was not suspended even at the peak of the covid-19 pandemic.

In his view, the resilience of the mining sector has also become evident as investments in exploration, technology and human resources remained steady through 2020.

Talking at the Ghana Mining Industry Awards organized by the Ghana Chamber of Mines, Asomah-Cheremeh also said that the government has realized that it needs to strengthen its policies when it comes to extractives industries so that they can back the country’s socio-economic development.

The minister’s support to the mining sector comes at a time when environmental groups have taken it to the courts to try to stop mining projects such as a bauxite mine being proposed by a Chinese firm in the Atewa Range Forest.

China must ban new coal power plants to meet 2060 goal – report

China needs to immediately stop building new coal power plants and double wind and solar installations to put itself on a path to meet its 2060 carbon neutrality pledge, climate researchers said in a new report.

China’s coal power fleet, already more than 1,000 gigawatts strong, is underutilized and already includes dozens of redundant plants, researchers from Draworld Environment Research Center and the Centre for Research on Energy and Clean Air said in the report.

The country should aim to whittle its coal fleet down to about 680 gigawatts by 2030, instead of plans by some in the industry to expand it to about 1,300 gigawatts.

With solar and wind power quickly becoming as cheap or cheaper than coal, such an building spree could result in more than 2 trillion yuan ($304 billion) in stranded assets, said Zhang Shuwei, Draworld’s chief economist and the report’s lead author.

“A further expansion of the coal-fired power industry would greatly complicate this challenge, requiring a cliff-fall of coal power generation after 2030,” Zhang said.

The report comes two months after President Xi Jinping shocked the world by announcing in a United Nations speech that China will be carbon neutral by 2060, although Beijing has yet to lay out detailed steps on how the world’s biggest polluter will get there.

Draworld and CREA researchers said that to meet the goal, China needs to ban new coal plants immediately and also double the installed capacity of new wind and solar power to at least 100 gigawatts annually.

A US rare earths miner is staging a comeback to take on China

The Mountain Pass rare earths mine in California’s Mojave desert has had its ups and downs through the years.

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Once the world’s largest producer of rare earths—a group of 17 minerals crucial in the manufacturing of many high-tech products—it was forced to shut in 2002 in part because it was squeezed out by China’s low prices. In 2015, its owner went bankrupt. A new owner acquired the mine, and slowly restarted operations. Now that company, MP Materials, is about to go public on the New York Stock Exchange. Its stated mission: restore the full rare earth supply chain to the US and eliminate dependence on China, which currently dominates the global rare earth industry.

Under the arrangement, MP Materials is expected to merge this week with a private-equity backed “blank check” company—known more technically as a special purpose acquisition company—after which it will trade under the ticker “MP” in a $1.5 billion deal highlighting investors’ growing interest in the US rare earths industry. MP Materials will net about $500 million in cash to fund upgrades to the Mountain Pass facility, where it’s currently mining elements for ultimate use in magnets critical to the manufacturing of electric vehicles.

While Beijing drove the country’s rare earths dominance with government subsidies and production and export quotas, companies in the US and elsewhere now hope that markets, together with strategic government rules, can help counter China’s sway in the rare earths sector. The SPAC that’s helping take MP Materials public, for example, is controlled by Japan’s SoftBank group.

“Strategic, small investments aimed across many parts of the supply chain…is a very urgent requirement in order for the US government” to close gaps in industrial capacity, said Dan McGroarty, an adviser to USA Rare Earth, a company that’s developing a rare earths mine in Texas. He pointed to Japan and Australia (paywall) as examples of governments that have made strategic investments that catalyzed private investment in the industry.

Copper price surges on Peru worries, China futures launch

Copper prices set fresh multiyear highs on Monday over worries about possible supply disruptions following unrest in Peru and optimism about the launch of a Chinese futures contract open to international investors.

On the Comex market, copper for delivery in December gained 2.7% to $3.2625 a pound ($7,193 a tonne) amid heavy buying, with more than $8.3 billion worth of metal traded by mid-afternoon in New York.

Monday’s trading brings the bellwether metal’s recovery since the height of the covid-19 induced sell-off, which sent the copper price crashing to below $2.00 a pound, to more than nearly 70%.

Peru’s currency fell to a record low over the weekend amid political chaos and the largest protests in the capital Lima in decades. Experts have also warned that further upheavals threaten the fight against the coronavirus in the country, which, with a population of 32 million, has one of the world’s highest per-capita death rates from covid-19.

In a note, BMO Capital Markets said the unrest in Peru, the world’s number two copper producer behind Chile, while focused on the capital, could cause issues for copper concentrate logistics (plus other metals), should the situation escalate.

An indication of the scarcity of concentrate for prompt delivery, spot treatment charges – paid by miners to refiners –  plunged to an eight-year low of around $45 a tonne last week, a 40% decline from the 2020 high hit in March.

TC/RCs were already under pressure from reports that China has unofficially banned Australian imports of concentrate amid a political row between the two countries.

Northern Dynasty submits Pebble mitigation plan

Northern Dynasty Minerals (TSX: NDM) has submitted a compensatory mitigation plan (CMP) for the controversial Pebble project to the US Army Corps of Engineers (USACE), ahead of Wednesday’s deadline.

Northern Dynasty and its US-based subsidiary Pebble Partnership said they believe the submitted CMP fully satisfies mitigation requirements for the proposed mine in southwest Alaska.

Following the publication of a positive final environmental impact statement (EIS) in July, the USACE published its mitigation requirements for Pebble on August 20 and provided the Pebble Partnership 90 days to submit a CMP to address them. Filing an approved CMP for the project is a necessary prerequisite to receiving a federal record of decision (ROD).

If permitted, Pebble would become North America’s largest mine, with an estimated 6.5 billion tonnes of measured and indicated resources containing 57 billion lb copper, 71 million oz gold, 3.4 billion lb molybdenum and 345 million oz silver.

Pebble’s development has been surrounded by controversy and delays, including the EPA’s decision in 2014 to propose restricting the discharge of mining waste and other material in the area.

The criticism prompted the Vancouver-based company to submit a new, smaller mine plan that includes lined tailings, and discard the use of cyanide in the gold extraction process.

“Based on the findings of the final EIS, we already know Pebble can operate safely and reliably, while fully protecting the water, fish and wildlife resources of Bristol Bay. Meeting the USACE’s challenging mitigation requirements provides even greater evidence that Pebble can and will co-exist with commercial, subsistence and sport fisheries in southwest Alaska,” Northern Dynasty president and CEO Ron Thiessen said in a press release.

Thiessen said the final EIS for Pebble indicates the project will make “important, positive socioeconomic contributions to the region, the state and the nation.”

“Pebble will also deliver the critical and strategic minerals the United States requires for its economic and military security,” he said, “while helping facilitate the transition to a lower-carbon future.”

Thiessen said Pebble Partnership technical/permitting staff and expert, third-party consultants in Alaska have prepared a “high-quality mitigation plan” to fully satisfy the lead federal agencies’ requirements — including undertaking extensive field investigations this summer and fall.


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