October Newsletter – 11.10.2021


  • China’s Zijin Mining to acquire Neo Lithium in $737M deal
  • Barrick’s Tanzania ops on track
  • New Peru PM says redrafting constitution is not a priority
  • Sanjeev Gupta’s GFG Alliance strikes debt deal with Credit Suisse
  • China eyes coal output boost, higher power prices to ease shortages
  • US narrows gap with China in race to dominate battery supply chain – report
  • Rare Earth Mine Opens Arctic Rift
  • China steps up coal imports from Kazakhstan, South Africa and Mozambique amid supply crunch

China’s Zijin Mining to acquire Neo Lithium in $737M deal

China’s Zijin Mining Group Co Ltd will buy Canada’s Neo Lithium Corp for C$918.7 million ($737.14 million )the companies said on Friday.

Zijin has agreed to buy Argentina-focused lithium company, Neo Lithium at a price of C$6.50 per share in cash, the companies said in a joint statement.

The offer represents a premium of over 18% to Neo Lithium’s last close of C$5.49 on Friday.

Neo Lithium said that the deal has been unanimously approved by the board.

In August, Chinese gold and copper miner Zijin said its plan on lithium and other new energy minerals were in a preliminary strategic planning stage with no detailed time frame or specific projects yet.

The deal comes after Chinese battery maker Contemporary Amperex Technology Co (CATL) last month agreed to acquire Canada’s Millennial Lithium Corp in an all-stock cash deal worth C$376.8 million ($302.33 million).

Last year, CATL also purchased more than 10 million shares of Neo Lithium Corp and became the company’s third-largest shareholder.


Barrick’s Tanzania ops on track

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Underground at Bulyanhulu

Barrick Gold’s (TSX: ABX; NYSE: GOLD) Tanzanian mines, North Mara and Bulyanhulu, are said to be on track to achieve their respective 2021 production targets and to replace depleted reserves through brownfields exploration, the company announced on Sunday.

The company reports the production ramp-up at Bulyanhulu is gaining momentum with plant performance ahead of expectations and recoveries at a consistent rate of 93%.

Three new fully automated loaders and three additional drills partly drove an 11% increase in tonnage, Barrick disclosed in a media release.

The company has successfully converted and optimized mineral resources in the upper portion of Deep West, where it expects to add significant reserves to the asset base, thereby unlocking additional value in the mine plan.


New Peru PM says redrafting constitution is not a priority

Peru’s new prime minister Mirtha Vasquez said redrafting the country’s pro-market constitution is not currently a priority for the government, despite it having been a key campaign promise.

“This government is not proposing (to change the constitution) and won’t propose that overnight,” Vasquez said during one of her first interviews late on Friday with state-owned TV Peru. “Right now, what matters is facing the pandemic…and especially generating economic stability.”


Vasquez, a former head of Congress, is the second person to become prime minister under President Pedro Castillo, who has been in the job just two months.

She is a leftist politician but considered more moderate than her predecessor, who resigned earlier this week. Vasquez also does not belong to the same party as Castillo, the Marxist-Leninist Free Peru Party.

Her remarks will further calm investors who have been spooked by Castilllo’s campaign promise to redraft Peru’s pro-market constitution.


Sanjeev Gupta’s GFG Alliance strikes debt deal with Credit Suisse

The GFG Alliance said on Sunday it had agreed on a debt restructuring deal with Credit Suisse for its Australian steel and coal mining assets, and announced plans to inject 50 million pounds ($68 million) into the restart of its Rotherham electric furnace in the United Kingdom.

GFG, owned by commodities tycoon Sanjeev Gupta, has been scrambling to refinance its cash-starved web of businesses in steel, aluminium and energy after supply chain finance firm Greensill Capital filed for insolvency in March.

The debt restructuring for its Australia assets will allow GFG to make a “substantial upfront payment” to Greensill Bank and Credit Suisse, with the balance paid in instalments until the new maturity date of June 2023, a statement from GFG said.

Zurich-based Credit Suisse had previously disclosed some $2.3 billion worth of loans exposed to financial and litigation uncertainties within Greensill-linked supply chain finance funds, with some $1.2 billion of its assets related to GFG.


China eyes coal output boost, higher power prices to ease shortages

BEIJING/SINGAPORE, Oct 8 (Reuters) – China has ordered its two top coal regions to boost output and will allow coal-fired power utilities to charge customers higher prices as the country battles its worst power crunch in years.

Inner Mongolia and Shanxi told coal miners to lift combined annual production capacity by more than 160 million tonnes, while China’s cabinet said market coal-fired power prices may now fluctuate up to 20% from base rates, an increase on previous limits, or more for high energy consuming sectors.

The pricing adjustment is designed to prevent high energy consumption, state media reported, adding that prices for residential and agricultural users, as well as public welfare initiatives, would be kept stable. read more

Near-record high thermal coal prices and electricity shortages that have prompted power rationing across China have dented the country’s industrial output and threaten its economic growth.


US narrows gap with China in race to dominate battery supply chain – report

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Jaguar’s battery electric vehicle race series. (Reference image by Jaguar MENA, Flickr).

The US is narrowing the gap with China when it comes to the race to dominate the battery value chain, BloombergNEF’s second annual Global Lithium-Ion Battery Supply Chain Ranking shows.

According to the research provider, the United States has moved up the ranking to come second in both 2021 and its projection for 2026.

“As a country, the US has the second-largest EV market globally, after China. Tesla and Asian cell manufacturers continue to make significant investments in the country, and the Biden administration’s policy to help establish a domestic battery supply chain and support EV growth will further strengthen the country’s position,” the report reads.

BNEF’s experts point out that America has many of the ingredients needed to foster a domestic lithium-ion battery value chain but in the past, individual companies like Tesla have had to forge a path by themselves. Now that there is policy support in place, however, there seems to be a coordinated effort from companies across the supply chain to anchor more value within the country.

But even as the US makes considerable strides to build and strengthen its domestic battery supply chain, China continues to dominate the ranking throughout the period thanks to continued investment and strong local and global demand for its lithium-ion batteries.


Rare Earth Mine Opens Arctic Rift

Greenland is facing a difficult decision. A mining company wants to extract precious minerals from its island in the Arctic, promising to help develop the economy. But many residents are worried about what that means for the environment and their life.


China steps up coal imports from Kazakhstan, South Africa and Mozambique amid supply crunch

China has increased purchases of coal from Kazakhstan since the start of the year as power cuts have become more frequent and coal supplies dwindle

A global coal supply shortage has sent prices soaring and contributed to an electricity crunch that has hammered businesses in the world’s No 2 economy

China has been busy cultivating at least two new coal markets, Mozambique and South Africa, and expanding trade with smaller exporters, including Kazakhstan, Myanmar and Colombia, since the start of the year, as domestic demand for coal-fired power rises acutely amid an electricity crunch and continued ban on the commodity from Australia.

On Monday, Zhejiang said it bought its first shipment of thermal coal from Kazakhstan, as the industrial province looks for new sources of supply, local media reported.

Zhejiang Energy Group, which is backed by the provincial government, received a 136,000-tonne shipment of 6,000-calorie premium-quality coal at Liuheng Port.

Though it was Zhejiang’s first batch of coal from Kazakhstan, China as a whole has been buying more thermal and coking coal from Kazakhstan since the start of the year, as power cuts have become more frequent and coal supplies dwindle.



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