October Newsletter – 15.10.19
ANNOUNCEMENTS
NEWSLETTER
- Mining reps talk climate change in Geneva
- As Fortescue taps Guinea, China eyes broader iron ore supply sources: CEO
- Lithium at Two-Year Low Hobbles U.S. Bid to Loosen China’s Grip on Market
- Gold falls as Fed’s Kaplan says rate cuts should be restrained
- The mining industry’s guiding hand
- Chile bill to make desal water public good
- Argentina looking for more Chinese investment in mining
- World’s largest hydrogen haul truck on way – Anglo
- Miners still need social licence for their autonomous vehicles, Wilson says
- Uncertainty, capital constraints holding South Africa’s junior miners back
- U.S. says military carried out aerial resources survey of Greenland
TOP NEWS
Mining reps talk climate change in Geneva
Delegates from 80 countries at the 15th Annual General Meeting of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development have just launched a series of discussions in Geneva related to mining in the context of climate change.
THE THEME OF THIS YEAR’S MEETING IS ‘MINING IN A CHANGING CLIMATE’
“This year’s meeting will focus on how the mining sector can not only adapt to climate change but also play a role in lessening its impacts,” said Greg Radford, Director of the IGF Secretariat, in a media statement. “The AGM will discuss how governments can ensure enabling policy conditions are in place within their jurisdictions that allow and encourage mining and mineral exploration companies to invest in adaptation and mitigation activities.”
https://www.mining.com/mining-reps-talk-climate-change-in-geneva/
COMMODITIES
As Fortescue taps Guinea, China eyes broader iron ore supply sources: CEO
MELBOURNE (Reuters) – China is looking beyond current suppliers like Australia to procure raw materials in future as its steel demand continues to grow, the chief executive of the world’s No. 4 iron ore producer Fortescue Metals Group warned on Thursday.
Even as clouds gather over the global economy amid the bitter trade war between Washington and Beijing, Fortescue CEO Elizabeth Gaines told an industry event in Melbourne that China still has a considerable way to go before it reaches peak steel usage, predicting robust growth this year.
“Those who think that growth is going to slow, or that China won’t continue to look to develop broader markets for supply would be at risk of underestimating some important factors,” she said, referring to the continuing urbanization of the country.
Gaines’ comments came just a few days after Fortescue confirmed it has submitted a bid to develop two blocks in the giant Simandou iron ore deposit in Guinea, with a government commission expected to come to a final decision in early to mid November, sources told Reuters.
Lithium at Two-Year Low Hobbles U.S. Bid to Loosen China’s Grip on Market
Bloomberg
The lowest lithium prices in over two years are hampering a handful of miners that want to challenge China’s dominance in the market.
China controls most of the processing that makes the mineral usable in rechargeable batteries, leaving American vehicle makers vulnerable to supply disruptions if trade tensions escalate. With automakers from Tesla Inc. to General Motors Co. aiming to manufacture more electric cars at home, small companies are seeking to build the first U.S. lithium mines in decades as a step toward forming a local supply chain.
However, financing mines is proving a challenge after a rush of Australian supply dragged down prices by a third from a record in mid-2018. Companies also face stricter environmental rules and regulatory hurdles in the U.S., which currently accounts for just 1.2% of global lithium production.
Gold falls as Fed’s Kaplan says rate cuts should be restrained
Bloomberg News
Federal Bank of Dallas President Robert Kaplan introduced some caution to investor enthusiasm that has sent gold holdings in exchange-traded funds to their longest streak of gains in a decade.
Kaplan said that the reduction in borrowing costs by the Fed shouldn’t be a “full-fledged cutting cycle,” tamping down expectations of a prolonged monetary easing that helped drive non-interest bearing gold to a six-year high last month.
BEFORE THURSDAY’S DECLINE, INVESTORS BOOSTED THEIR HOLDINGS IN BULLION-BACKED EXCHANGE-TRADED FUNDS TRACKED BY BLOOMBERG FOR AN 18TH STRAIGHT DAY, THE LONGEST RUN OF INFLOWS SINCE 2009
“This cutting we’re doing should be limited, restrained and modest,” Kaplan said in a Bloomberg Television interview Thursday. “I think we’re in a fragile period in here, which is why I am glad the Fed has taken some action in July and September. But I think this could go either way.”
Gold futures for December delivery slipped 0.8% to settle at $1,500.90 an ounce at 1:31 p.m. on the Comex in New York, erasing a 0.6% gain earlier.
https://www.mining.com/web/gold-falls-as-feds-kaplan-says-rate-cuts-should-be-restrained/
LEGAL AND REGULATORY
The mining industry’s guiding hand
International Mining
Ahead of the WA Mining Conference & Exhibition, in Perth, Western Australia, IM spoke with Michelle Ash, Chair of the Global Mining Guidelines Group (GMG), on mining guidelines, the industry’s rate of technology adoption, automation and, of course, interoperability.
Given that Ash is due to sit on a panel discussion titled, ‘The future generation of mining – who, what, when and where’ at the event on October 15, the conversation was very much forward looking.
IM: The development of mining guidelines has been a big focus for you in your work with GMG. Outside of the existing working groups GMG already has in place, where, in the next three to five years, do you see the need for future industry guidelines to ensure mining companies and their employees can leverage new technology?
MA: Our mission at GMG is to work collaboratively with industry and help speed up its rates of change. The guidelines are one of our main products, but we are involved in two others.
One is education where we bring the mining industry (mining companies, suppliers, consultants, academics/academic institutions, regulators and governments) together on topics. Blockchain is a good example of that; we’ve had our members raising the use of blockchain as an issue for the last couple of years – some have not known what the use cases might look like or even the full capabilities of the technology.
An example of the second product is what we have recently carried out in the tailings dam space…where we initially looked at who was doing what in the public arena worldwide. From this, we created a database of that activity with the intention that our members should, first, engage with work that is already being conducted. We are now trying to think through how we codify that data. In this regard, part of the way we will speed up innovation in the mining industry is not only through collaboration, but also making sure we leverage industry work that has already been completed.
Then on the guidelines, we have covered battery-electric vehicles (BEVs), automation and communications systems. We’re currently going through the process of devising a guideline on interoperability and functional safety, too. In the next few months, we will start working with our members to define what ones to pursue from 2020 onwards.
IM: What might these future guidelines look like?
MA: At our leadership summit this year, we will be talking about climate change and how that is going to impact the mining industry. Thinking about the workforce of the future is another potential avenue for future guidelines. That is on top of some of the more futuristic topics like blockchain provenance tracking, changes to business models, etc.
https://im-mining.com/2019/10/07/the-mining-industrys-guiding-hand/
Chile bill to make desal water public good
A bill seeking to declare water produced from seawater desalination plants a public good has begun to be read in Chile.
If passed, the bill, introduced into the Senate in January 2018, would allow the distribution of such water to be subject to the authority of the state, which concerns the private sector companies, particularly in the mining sector, which have invested hundreds of millions of dollars to secure their water sources through investment in desalination plants, particularly in arid northern Chile.
The scarcity of water in northern Chile, one of the largest districts of copper production in the world, means there are more water rights in existence than water to satisfy them, a situation which has led the government to declare that any new mining project or expansion must include investment to produce its own water through seawater desalination.
As a compromise to the proposals in the bill, the Ministry of Public Works, which is responsible for water supply and regulation through its water directorate, has suggested it should be able to take 5% of the production of desalination plants.
https://www.mining-journal.com/copper-news/news/1373304/chile-bill-to-make-desal-water-public-good
FINANCIAL
Argentina looking for more Chinese investment in mining
Argentine authorities are looking to encourage Chinese investors to spend more on the country’s mining sector.
This week, government representatives and local mining executives will go to the China Mining 2019 summit in Tianjin in order to attract new investors and encourage owners of projects already under construction and in exploration to ratify their investments.
The amount of Chinese investments committed to in Argentina in 2019 currently stands at US$391mn of a total of US$1.8bn from foreign investors. Meanwhile, Chinese mining investment in exploration and project construction in Argentina reached US$233mn in 2017 and US$244mn in 2018.
“China has become the country with the second biggest budget allocated to Argentina in the exploration industry,” Mariano Lamothe, undersecretary of mining development, was quoted as saying by news agency Télam.
https://www.bnamericas.com/en/news/argentina-looking-for-more-chinese-investment-in-mining
INNOVATION AND TECHNOLOGY
World’s largest hydrogen haul truck on way – Anglo
JOHANNESBURG (miningweekly.com) – Diversified mining company Anglo American on Thursday announced its agreement with global energy and energy services company ENGIE to develop and fuel the world’s largest hydrogen-powered mine haul truck.
The agreement was signed onboard the Energy Observer, the world’s first fully electric vessel powered exclusively by hydrogen and renewable energies.
The new hydrogen haul truck project is part of Anglo American’s innovation-led approach to sustainable mining, which applies innovative thinking and technological advances to address mining’s major sustainability challenges.
This collaboration, in which ENGIE is providing the hydrogen generation solutions and Anglo developing the truck, marks the first time a truck of this size and load capacity has been converted to run on hydrogen.
‘First motion’ of the hydrogen powered truck is expected in 2020, followed by a testing and validation programme at Anglo American Platinum’s Mogalakwena platinum group metals mine in Limpopo, after which the trucks are expected to be deployed at other Anglo operations.
Operational performance of the converted trucks is expected to be the same or better than the original diesel trucks, with the additional benefits of cleaner air, less noise and lower maintenance costs.
“We’re extremely pleased to be partnering with ENGIE and we look forward to developing and implementing this step-change technology,” commented Anglo technical director Tony O’Neill in a release to Creamer Media’s Mining Weekly Online.
https://www.miningweekly.com/article/worlds-largest-hydrogen-haul-truck-on-way-anglo-2019-10-10
Miners still need social licence for their autonomous vehicles, Wilson says
International Mining
Mining companies embracing automation and technological innovation must be also be aware of the possible implications for their social licence to operate, according to a social performance specialist.
Dr Ceit Wilson, who has more than eight years of professional experience in addressing the social and development challenges of the extractive resources industry, says there are risks around the future of technology and employment, especially from a social perspective.
Dr Wilson will address the issue in a presentation at this year’s International Mining and Resources Conference (IMARC) in Melbourne in October – Australia’s largest mining event.
Issues around social licence to operate and sustainable mining principles will be a key focus for the three-day conference with a dedicated workshop and two conference sessions covering the topic.
Environmental health and safety, social licence, sustainability, staff retention and skills development are also among the topics set to be discussed in the free to attend Collaboration Theatre, one of five concurrent conferences at IMARC.
“I intend to use my presentation at IMARC to bring attention to the fact that the while the mining industry is positively benefiting from automation and technology innovation, we need to address the question of how technological change will impact the host communities in which they operate,” Dr Wilson said.
PROJECTS
Uncertainty, capital constraints holding South Africa’s junior miners back
Junior and Emerging Miners’ Desk of the Minerals Council South Africa, has found that junior miners, including small-scale and micro miners, hold up to 80% of the mining licences in South Africa.
The research indicates that the Department of Mineral Resources and Energy has issued about 1 490 mining licences covering a variety of commodities, with only 20% of these allocated to major mining companies.
The juniors, despite holding the majority of mining licences, deliver only about 8% of the total revenue generated by the South African mining industry, the report said.
The junior miners are still struggling to progress beyond exploration to project development, owing to a number of challenges, including a restrictive regulatory environment and lack of capital funding.
U.S. says military carried out aerial resources survey of Greenland
LONDON, Oct 9 (Reuters) – The U.S. military has conducted an aerial survey of Greenland to assess the vast arctic island’s mineral potential as part of agreement between the two governments, a top U.S. diplomat said on Wednesday.
The memorandum of understanding for cooperating on developing the mineral sector there was inked in June before a diplomatic flap between the United States and Denmark, to which Greenland is linked as an autonomous territory.
U.S. President Donald Trump called off a visit to Denmark scheduled for early September after the country’s prime minister rebuffed his idea of purchasing Greenland.
Frank Fannon, the U.S. assistant secretary of state for energy resources, told reporters at a gathering at London’s Chatham House that the process was “quite costly and technology intensive” and so Greenland had sought U.S. assistance.
“We had the navy there to shoot a hyperspectral survey, to basically use overflight technology to better understand the resource endowment.”
COMMODITY PRICES
