October Newsletter – 03.10.2022

  • EY’s top global mining risk no surprise
  • Atlantic Lithium aims to begin production at Ghana mine in 2024
  • NTPC Commences coal production from Chatti-Bariatu Mine
  • Top Miners Teaming Up in Bid to Wean Themselves Off Dirty Trucks
  • Iron ore price marks quarterly losses on China covid, property woes
  • China to host almost a third of the world’s new coal mines
  • MMG to invest $2 billion at its troubled Peruvian Las Bambas mine

EY’s top global mining risk no surprise

ENVIRONMENTAL, social and governance risk has been rated the highest concern for mining companies in 2023, much as it was for 2022 according to a survey by business services firm EY.

The survey of mining and metals executives found ESG impact was felt across every part of the business as the issue became a priority for key stakeholders.

Water stewardship is the top ESG risk for 76% of survey respondents as climate change and water scarcity concerns escalate.

The rest of the top 10 risks, after ESG, are geopolitics; climate change; license to operate; costs and productivity; supply chain disruption; workforce; capital; digital and innovation; and new business models.

EY global mining & metals leader Paul Mitchell said it was becoming more complex to manage ESG risk.

“Miners who get it right can get an edge on competitors in many ways – from accessing capital, to securing license to operate, attracting talent and mitigating climate risk,” he said.


Atlantic Lithium aims to begin production at Ghana mine in 2024

Australia’s Atlantic Lithium (LON: ALL) (ASX: A11) is targeting first production at its Ewoyaa project in Ghana, which would be the country’s first lithium mine, in the second half of 2024.

The Ewoyaa lithium deposit in Ghana.

The exploration and development company, which also has lithium projects in Ivory Coast, estimates the operation has the potential to generate nearly $5 billion in revenue over its 12.5-year lifetime.

Reporting financial results for the year 2022, the Africa-focused exploration and development firm highlighted its agreement with Piedmont Lithium (ASX, NASDAQ: PLL), which would allow Atlantic Lithium to fund Ewoyaa, via a staged earn in of $103 million, to production.

A pre-feasibility study of the project, released last week, projected a production of two million tonnes a year, an initial rate of return of 224% and payback in less than five months. An updated assessment will be published in early 2023.


NTPC Commences coal production from Chatti-Bariatu Mine

State-run power giant NTPC on Friday said it has commenced coal production from its Chatti-Bariatu mine in Jharkhand’s Hazaribag district. With this Chatti-Bariatu became the fourth coal producing mine of the company and the coal from the mine will used in the power stations of NTPC.

“Mining operations started in Chatti-Bariatu on April 25 and within a span of one month NTPC touched the coal seam. The peak-rated capacity of this mine will be 7 million tonnes per annum to be achieved in four years time,” the company said in a statement.


Top Miners Teaming Up in Bid to Wean Themselves Off Dirty Trucks

(Bloomberg) — Members of the International Council on Mining and Metals are planning a joint effort to test hydrogen and other zero-emission technologies in a bid to shift away from diesel-fueled vehicles.

Members, which include producers BHP Group and Glencore Plc, are pitching sites to pilot technologies including electrolysis plants, trolley-assist haulage and regenerative braking, according to Rohitesh Dhawan, ICMM’s chief executive officer. The group expects to choose 50 sites within the next two months to form a development network, the results of which will be shared with the rest of the industry.

Although the mining industry now uses more renewable energy to power operations, it’s only started testing prototype vehicles that are key to meeting net-zero targets. Governments and investors have become more sensitive to environmental concerns.

The testing network follows a push to bring mining companies and manufacturers together to speed the development of zero-emission vehicles. While mass availability of hydrogen and electric trucks is expected in 2027 — compared with an earlier projection of 2040 — Dhawan hopes to shorten that cycle further.


Iron ore price marks quarterly losses on China covid, property woes

Dalian and Singapore iron ore marked their second quarterly losses, despite some gains on Friday, as worries over a stringent zero-covid policy and property sector jitters in top steel producer China continued to dominate markets.

However, hopes of sustained policy support for the ailing Chinese economy and increased construction-related demand for steel lent some support to the steelmaking ingredient.

The most-traded January iron ore on China’s Dalian Commodity Exchange closed 0.1% higher at 721.50 yuan ($101.66) a tonne, off the day’s high of 730.50 yuan.

On the Singapore Exchange, benchmark October iron ore was up 0.6% at $96 a tonne, as of 0747 GMT, below session-high $97.55.

In the spot market, the benchmark 62%-grade iron ore bound for China was somewhat steady this week at around $100 a tonne, down 18% from the previous quarter.


China to host almost a third of the world’s new coal mines

Almost a third of the new coal mines planned for the world are in China, all but guaranteeing that output will keep rising in the top producer, even as calls grow for the dirtiest fossil fuel to be phased out to avoid the worst effects of climate change.

Based on data from Global Energy Monitor, China had 559 million tons of proposed new coal mines at the start of the year, accounting for 29% of the global total, according to a note from Bloomberg Intelligence. Australia was second with a 17% share, then India and Russia with 16% each. Still, the 1.94 billion tons of new mines planned around the world is 15% less than a year ago.

China mined 4.01 billion tons of coal in 2021, a figure that will only increase after production was ramped up to record levels to prevent a repeat of the power crisis that crippled the economy last year.

The daily coal output target was raised to 12.5 million tons in August, implying annualized production of 4.56 billion tons, BI said. While the spot price should remain resilient as miners prioritize shipments to term-contract customers, imports are likely to come under even more pressure.


MMG to invest $2 billion at its troubled Peruvian Las Bambas mine

LIMA : Chinese miner MMG Ltd expects to invest $2 billion in the next five years to expand its troubled Las Bambas copper mine in Peru and is eyeing potential acquisitions to further increase production, an executive said on Tuesday.

Las Bambas General Manager Edgardo Orderique said at the Perumin mining conference parent company MMG is hoping to double copper production by 2025 and double it again by 2030.

The mine is expected to produce 240,000 tonnes of copper in 2022, after years of production drops due to falling ore grades and social conflicts.

Peru is the world’s No. 2 copper producer and Las Bambas is one of the largest producers of the red metal in the world.

Las Bambas opened in 2016 in the Peruvian Andes, but has suffered recurrent disruptions from indigenous communities who say its vast mineral wealth has not translated into better living conditions.


Mexican legislator calls for public release of mining companies’ financial, environmental records

Mexican MP Adriana Bustamante Castellanos presented an amendment to Article 7 of the country’s Mining Law, which would allow for the public release of information regarding the production, processing and sale of minerals, as well as data on deposits’ mineral reserves and mining and metal companies’ financial statements. 

Under the current Mining Law, private mining companies can keep such information confidential.

During a press conference, Bustamante Castellanos deemed such confidentiality as out of date because it is a legacy of the negotiations that were taking place in 1992 when Mexico was pushing to join the North American Free Trade Agreement.

The MP for the ruling party Morena also said that moving towards transparency when it comes to access to information means that mining companies will also have to disclose their strategies to guarantee communities’ right to a healthy environment.

“This [1992] legislation allowed [miners] to cause irreparable damage to the ecosystems and territories where extractive activities are carried out. It has also had impacts on the health and wellbeing of entire populations,” she said.




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