October Newsletter – 04.10.2021


  • Iron battery breakthrough could eat lithium’s lunch
  • Coal surges to record as global scramble for energy accelerates
  • New underground mine to extend life of Barrick’s Loulo-Gounkoto gold complex
  • Endeavour Mining outlines ambitious five-year exploration plan
  • Greenland-focused Greenroc Mining IPOs on the AIM
  • Power crunch looms in India as coal stocks reach crisis point
  • India snags cheap Australian coal sitting at Chinese ports
  • Why China has to ration electricity and how that could affect everyone

Iron battery breakthrough could eat lithium’s lunch

The world’s electric grids are creaking under the pressure of volatile fossil-fuel prices and the imperative of weaning the world off polluting energy sources. A solution may be at hand, thanks to an innovative battery that’s a cheaper alternative to lithium-ion technology.

SB Energy Corp., a U.S. renewable-energy firm that’s an arm of Japan’s SoftBank Group Corp., is making a record purchase of the batteries manufactured by ESS Inc. The Oregon company says it has new technology that can store renewable energy for longer and help overcome some of the reliability problems that have caused blackouts in California and record-high energy prices in Europe.

The units, which rely on something called “iron-flow chemistry,” will be used in utility-scale solar projects dotted across the U.S., allowing those power plants to provide electricity for hours after the sun sets. SB Energy will buy enough batteries over the next five years to power 50,000 American homes for a day.

“Long-duration energy storage, like this iron-flow battery, are key to adding more renewables to the grid,” said Venkat Viswanathan, a battery expert and associate professor of mechanical engineering at Carnegie Mellon University.


Coal surges to record as global scramble for energy accelerates

Coal prices soared to their highest on record as China accelerated a global struggle for resources that has brought the dirtiest fossil fuel roaring back.

High-quality thermal coal loaded on ships at Newcastle port in Australia surged to $203.20 a ton, breaking the previous record set in July 2008. That’s the benchmark price for Asia, the world’s largest market for the fuel by far.

The rally comes during a global energy crunch that’s hitting China, the world’s biggest coal producer and consumer, especially hard. And as gas prices spike higher in Europe, there’s been a resurgence in demand for the fossil fuel that the continent’s policy makers have long been trying to phase out.

Still, there isn’t enough coal to go around. A German electricity producer closed one of its plants recently after it ran out of the fuel.


New underground mine to extend life of Barrick’s Loulo-Gounkoto gold complex

The Loulo-Gounkoto gold complex in Mali continues to replace the ore depleted by mining, Barrick chief executive Mark Bristow told reporters on Saturday.

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Loulo Gounkoto underground

Speaking at a media briefing, Bristow said Loulo-Gounkoto was on track to meet its annual production guidance, with its new underground mine at Gounkoto — the complex’s third underground operation — ramping up production. Through successful exploration, it is on track to increase mineral reserves net of depletion for the third successive year and promising results from the Yalea Ridge and Gounkoto-Faraba targets reaffirm the potential for further life-of-mine extensions.

Mines operated in Mali by Barrick and its predecessor Randgold have spent some $8 billion in the country in the form of taxes, royalties, salaries and payments to local suppliers over the past 24 years.


Endeavour Mining outlines ambitious five-year exploration plan

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The miner see the most potential for growth at its Ity mine, (pictured) in Côte d’Ivoire

Canada’s Endeavour Mining (TSX, LON: EDV), West Africa’s top gold producer, has unveiled an ambitious five-year plan to add between 15 to 20 million indicated ounces of gold through exploration over the next five years.

The company, which began trading in London in June, said the newly outlined program seeks to extend the life of its seven core assets beyond 10 years. It also aims to discover new greenfield projects.

Endeavour will spend an average of $80 million a year and it expects to add the resources at a cost of less than $25 per ounce, well below West Africa’s producers’ average of $74/oz and the global mean of $83/oz.


Greenland-focused Greenroc Mining IPOs on the AIM

On Monday, the ordinary shares of GreenRoc Mining (AIM: GROC) started trading on London’s junior AIM platform. The explorer seeks to capitalize on the growing demand for critical minerals its stable of Greenland assets could produce.

The company was created to buy the spun-out assets of Alba Mineral Resources (AIM: ALBA).

GreenRoc raised £5.1 million ($6.9 million). It issued 111.2 million shares at 10p each, implying a market capitalization of £11.1 million ($15.2 million).

GreenRoc’s assets include the Thule Black Sands ilmenite project, the Amitsoq graphite project (considered one of the highest-grade graphitic carbon projects in the world), the Melville Bay iron project and the Inglefield multi-element project.

Of particular focus for GreenRoc are the graphite and titanium markets, which are designated as critical minerals by the EU and the US. Company data suggests demand for graphite increasing by 2,500% by 2040, driven by the electric vehicles sector.

Alba will retain a 54% shareholding in the company.


Power crunch looms in India as coal stocks reach crisis point

More than half the country’s power plants have less than three days of supplies remaining

India is the latest country to face a severe power crisis that threatens to undermine its recovery from the pandemic, with authorities warning that power plants have run perilously low on coal.

According to India’s power ministry, the 135 thermal power plants of Asia’s third-largest economy had an average of just four days of coal stocks as of Friday, down from 13 days of supplies in early August. Of the plants monitored daily, more than half have less than three days of stocks.

Power supply shortages have already started to hit the economy in neighbouring China, where the manufacturing sector last month suffered its first contraction since the start of the pandemic. Beijing has ordered state-owned energy companies to secure fossil fuel supplies at all costs to stave off winter shortages, helping to drive up prices for other large importers, including India.

“The [Indian] power sector is facing a kind of perfect storm,” said Aurodeep Nandi, India economist at Nomura Financial Advisory and Securities. “You are caught in a situation where demand is high, your supply is low from the domestic side and you haven’t restocked on inventories by importing.”

India’s power generators cut down on coal imports in recent months, as international prices surged on the back of robust global demand, from Europe as well as China. Prime Minister Narendra Modi’s government has also promoted a policy of Indian economic self-reliance as a guiding principle for its recovery from the pandemic.


India snags cheap Australian coal sitting at Chinese ports

India is buying Australian coal that’s been stranded inside China for months, according to people who have made the purchases, spotlighting how geopolitics is complicating Beijing’s battle against an energy supply crisis.

The fuel is being bought at a $12 to $15 a ton discount to fresh shipments from Australia and is some of the cheapest thermal coal relative to its quality on the market, said the people, who asked not to be identified because they aren’t authorized to speak with the press. Indian cement makers and sponge iron plants are among buyers that are using the supplies to bridge domestic shortfalls.

The development reflects the extent to which China-Australia relations have soured: China is battling a crippling energy crunch that’s set to get worse as winter sets in, and yet it won’t touch coal from Australia due to a geopolitical squabble. Indian firms have bought nearly 2 million tons of Australian thermal coal that has been sitting in warehouses at the Chinese ports, the people said.

Stockpiles of the fuel at Indian coal-fired power plants, which produce nearly 70% of the country’s electricity, are near the lowest levels in four years and have prompted the state-owned miner Coal India Ltd. to direct more supplies to domestic utilities. That’s reduced shipments to other consumers, including aluminum makers, cement companies and steel mills.


Why China has to ration electricity and how that could affect everyone

BEIJING — Here is a riddle: China has more than enough power plants to meet electricity demand. So why are local governments having to ration power across the country?

The search for an answer begins with the pandemic.

“Coal consumption shot up like crazy in the first half of the year because of a very energy-intensive, industry-driven recovery from the COVID-19 lockdowns,” says Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air in Helsinki.

In other words, as China’s export machine roared back to life, electricity-guzzling factories churned out fast fashion and home appliances for customers in the United States and elsewhere. Regulators also loosened controls on coal-intensive sectors like steelmaking as a way to recover from China’s pandemic-induced economic slowdown.

Now thermal coal has tripled in price on some commodities exchanges. About 90% of coal used in China is domestically mined, but mining volumes from some of China’s northern provinces have dropped by as much as 17.7%, according to respected Chinese financial magazine Caijing.

Normally, those higher coal prices would have been passed on to energy consumers. But electricity utility rates are capped. This mismatch has pushed power plants to the brink of financial collapse because higher coal prices have forced them to operate at a loss. In September, 11 Beijing-based power generation companies penned an open letter petitioning a central policy decision-making body, the National Development and Reform Commission, to raise electricity rates.



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