October Newsletter – 01.10.18
ANNOUNCEMENTS
TOP NEWS
Freeport Seals Pact With Indonesia on Giant Grasberg Mine
Bloomberg
- Definitive agreement to allow Inalum to raise stake to 51%
- Accord is culmination of more than a year of negotiations
Freeport-McMoRan Inc. and Indonesia signed a binding landmark agreement for the U.S. miner to hand over majority control of the giant Grasberg copper and gold mine to a local state-owned firm, in the country’s biggest ever divestment by a foreign resources company.
Freeport Chief Executive Officer Richard Adkerson and PT Indonesia Asahan Aluminium President Director Budi Gunadi Sadikin signed a divestment deal and two other pacts in Jakarta on Thursday. The transfer of majority shares to Asahan Aluminium will happen once the company makes a payment of $3.85 billion to Rio Tinto Group and Freeport, Sadikin said.
A Lloyd’s Emerging Risk Report
Events such as the Paris Intergovernmental Panel on Climate Change (IPCC) convention on climate change demonstrate strong political will that the global economy must become more sustainable. Great reliance will be placed on technologies that incorporate breakthroughs in material science that require increasingly rare earth minerals and metals.
Mining, one of the world’s oldest industries, is going through a period of rapid change to meet this demand. The unique context of each mining operation dictates the exact type and nature of insurance required.
This report explores the risks and drivers of current mining trends, and assesses the role insurance can play in the managing of mining risks in the interests of supporting human progress towards sustainability.
AustSino to acquire Sundance shares for $58m
Sundance Resources has secured a $58 million investment from AustSino Resources that will be used to develop its flagship Mabalam-Nabeba iron ore project in Central Africa.
The investment includes $50 million towards the cancellation of Sundance’s current convertible notes and $8 million in cash for the advancement of Sundance’s Mbalam-Nabeba project, located on the border of Cameroon and the Republic of the Congo.
AustSino will make two placements: one of 62.5 million fully paid ordinary shares at 0.4 cents per share, and a second of around 10.5 billion shares at 0.55 cents per share in addition to 10.5 billion unlisted options at 2 cents per option.
https://www.australianmining.com.au/news/austsino-to-acquire-sundance-shares-for-58m/
LEGAL AND REGULATORY
Congo-owned Sokimo may hinder transfer of Kibali mine to Barrick
Congo’s Société Minière de Kilo-Moto SA, better known as Sokimo, warned Friday that if Randgold Resources transfers to Barrick its stake in Kibali gold mine, in which the state miner has a 10% interest, it would be forced to “assert its rights”.
Canada’s Barrick Gold (TSX, NYSE:ABX) agreed to buy Randgold Resources (LON:RRS) this week in a $18.3 billion share deal, which will create the world’s largest gold company by value and output. Kibali, one of Africa’s biggest gold mines, was flagged as one of the five “tier-one” considered key to the business case of the proposed merger.
While Sokimo did not clarify its plans, it said in a statement quoted by Jeune Afrique (in French) it had learned of the tie-up through the press. It added the proposed business combination was “another illustration of control transfer deals between large global groups, conceived and structured to impose themselves, without any prior discussion, in the countries from which the resources that make up their wealth are extracted.”
http://www.mining.com/congo-owned-sokimo-may-hinder-transfer-kibali-mine-barrick/
Zambia hikes mining taxes in 2019 budget to rein in debt
LUSAKA, Sept 28 (Reuters) – Zambia will introduce new mining duties and increase royalties to help bring down mounting debt, the finance minister said in a budget speech on Friday, as crowds outside protested about alleged government corruption.
Delivering a 86.8 billion kwacha ($7.1 billion) budget in parliament, Margaret Mwanakatwe pledged to bring debt down and to trim the fiscal deficit to 6.5 percent of gross domestic product (GDP) in 2019 from 7.4 percent this year.
The economy of Africa’s No.2 copper producer was expected to grow by at least 4 percent in 2019, around the same as forecast for this year, she said.
Outside parliament, police flanked around 100 demonstrators wearing black t-shirts emblazoned with “Zambia Demands Accountability”.
“We are tired of hearing about scandal after scandal concerning the misuse of our national resources,” said Laura Miti, one of the protest organisers.
http://www.mining.com/web/zambia-hikes-mining-taxes-2019-budget-rein-debt/
FINANCIAL
Tiberius Offers Crypto Coins Backed by Seven Commodities
By Jan-Patrick Barnert
- Company to make a market in token to anchor value to metals
- Swiss project takes path that’s been difficult for precursors
Swiss asset manager and commodities trader Tiberius Group AG is stepping into the $215 billion digital coin market by offering a new token backed by seven metals in a sale set for Oct. 1.
Aiming to distinguish its Tiberius Coin from the thousands that have no reference value, the company plans to make a market in the asset so that its value holds close to that of a price of a basket of copper, aluminum, nickel, cobalt, tin, gold and platinum.
Tesla Supplier Ganfeng Lithium Seeks $676 Million in Share Sale
Ganfeng Lithium Co., China’s top producer of the metal used in electric-vehicle batteries, seeks as much as $676 million from a first-time share sale in Hong Kong.
The Jiangxi-based company is offering 200.2 million shares at HK$16.50 to HK$26.50 apiece, according to terms for the deal obtained by Bloomberg. The price range represents a 29 percent to 56 percent discount to Ganfeng Lithium’s Tuesday closing price in Shenzhen.
Six cornerstone investors, including South Korean battery makers LG Chem Ltd. and Samsung SDI Co., have agreed to buy about $230 million of stock in the offering, the terms show.
AngloGold’s New CEO Weighs Asset Sales to Unlock Value of Miner
- Dushnisky says some ‘streamlining’ of assets makes sense
- Ghana mine may become growth engine, ex-Barrick president says
AngloGold Ashanti Ltd.’s new chief executive officer, Kelvin Dushnisky, said his goal of unlocking value at the world’s third-largest gold producer will involve focusing on its best assets and selling those that aren’t core to the business.
Dushnisky, 55, took over at AngloGold on Sept. 1 as the Johannesburg-based miner considers its future in its home country, which now accounts for about 12 percent of total output, and grapples with regulations that threaten profits at operations in Tanzania and the Democratic Republic of Congo. The former president of Barrick Gold Corp. ruled out “fire sales,” but said he would focus on assets that generate the most value.
INNOVATION AND TECHNOLOGY
Digitalising the mining & metals global supply chain: Rise of blockchain and the smart contract
Blockchain and smart contracts could deliver a much-needed productivity boost to the mining and metals global supply chain
With today’s pressured margins, inflationary costs and murmurs that the hard-won productivity gains of recent times may be eroding, mining companies are looking for ways to improve efficiencies. They are also seeking to demonstrate to customers and regulators that their products consistently meet technical, environmental, social and regulatory performance requirements. Blockchain technology, together with ‘smart contracts’ that run on blockchain, can transform many aspects of the mining and metals global supply chain. There is much to gain by adopting these evolving technologies, but a number of significant—and sometimes unexpected—hurdles stand in the way of the efficiencies and process improvements blockchain promises.
Blockchain—the basics
Distributed ledger technology (DLT) is an umbrella term to describe technologies that distribute information or records among all those using it, privately or publicly.
A blockchain is just one type of DLT, a sub-category of a broader definition, much like how gold falls under the umbrella term of precious metals. Blockchains are the first fully functional DLT, and the only one people have known about for close to a decade.
A blockchain is a structure for storing data in which groups of valid transactions, called blocks, form a chronological chain, with each block linked to the previous one through a cryptographic fingerprint unique to each block.
Blockchains are permanent, in that it’s nearly impossible for bad actors to alter the data encoded in a blockchain if it’s properly set up. They are append-only, in that old transactions cannot be changed in a properly functioning blockchain; only new transactions can be added. And they are distributed, meaning no single entity owns or controls the chain— this is particularly true for public blockchains. A network of computers maintains and secures the database, and each participant, or ‘node’, in the chain stores a copy. In short, certain blockchains can remove the need for an intermediary completely.
Public (permissionless) and private (permissioned) blockchains are the two most common types. Public blockchains, such as those underlying Bitcoin and Ethereum (open-source, public, blockchain-based distributed computing platforms), are accessible to anyone, meaning the database and the code are public information. A public blockchain network is completely open, and anyone, without any permission, is free to join and participate in the core activities of the blockchain network. Anyone can join or leave, read, write and audit the ongoing activities on a public, permissionless, blockchain network.
A private blockchain can be set up by anyone who would like to permit entry only to select, verified participants. Private blockchains run on a shared database with a blockchain structure that requires participants to obtain permission before reading or writing to the chain.
82% of executives in the mining industry, surveyed by Accenture in 2016, expect to increase investments in digital technology over the next three years
The mining & metals sector is already characterised by strong adoption of automation in the search for productivity
PROJECTS
GSR Deep-sea Exploration – Building an environmental baseline
GSR’s exploration activities in the Clarion Clipperton Zone (CCZ) focus on three major elements: resource assessment, technology and environment, all of which are shown in this 12-minute video covering the company’s 2017 Pacific campaign.
To verify resource estimates undertaken during GSR’s 2014 and 2015 campaigns, nodules were collected using deep-sea dredges and box cores. The technological aspects involved the deployment of ‘Patania I’, the first tracked vehicle to reach and travel the seafloor at depths of more than 4,500 m. Meanwhile scientist from both GSR and independent research institutions collected baseline data to better understand sites that may be subject to mining in the future and ensure that any such activities only proceed once the environment impact has been judged acceptable by the international community.
https://www.youtube.com/watch?v=szx3Q1xIDh4&feature=youtu.be
Visualizing the Rise of the Electric Vehicle
It’s easy to dismiss exponential growth at its earliest stages.
That’s because at the beginning of such a phenomenon, the quantities involved can seem insignificant. One becomes two, two becomes four, and so on.
But if the environment is right, and the growth continues on, it can all of a sudden take over. This growth can lead to a paradigm shift and a new status quo, as well as massive opportunities along the way.
http://www.visualcapitalist.com/rise-electric-vehicle/
Tourist finds 3-carat diamond on ground in State Park
New York Post
A woman visiting the Crater of Diamonds State Park in Arkansas earlier this month made the “find of a lifetime,” uncovering a nearly 3-carat diamond, which she initially thought was a piece of glass.
The woman, who was only identified as a 71-year-old tourist from Aurora, Colorado, was visiting the park with her husband, son and two grandchildren when she noticed the diamond just 10 minutes after the family began to search for precious stones.
According to a press release from the park Tuesday, the woman “found the gem about halfway between the East Drain and North Wash Pavilion in the park’s 37.5-acre diamond search area,” which it described as an “eroded surface of an ancient, diamond-bearing volcanic crater.”
COMMODITY PRICES
