October Newsletter – 22.10.19
ANNOUNCEMENTS
NEWSLETTER
- RNC shares up on more Beta Hunt bonanza gold
- Australia’s exploration budget surpasses that of Canada
- Peabody to close Illinois coal mine
- BHP to decide fate of Jansen potash mine in early 2021
- Tin demand likely to contract this year – association
- Battle for Greenland: US and China race to grow Arctic footprint
- China copper smelters hike fourth-quarter treatment charge floor ahead of 2020
- Australia backs solar farm for two Fortescue iron ore mines
- DeepGreen makes run at seafloor mining
TOP NEWS
RNC shares up on more Beta Hunt bonanza gold
Toronto’s RNC Minerals has recovered about 3,200oz of coarse gold immediately north of the storied Father’s Day vein discovery at Beta Hunt in Western Australia.
The company made the discovery while preparing for stope production on the 15 level’s A Zone. Production is expected to start there late this year or early in the New Year.
“This is yet another example of Beta Hunt delivering rich pods of high-grade coarse gold,” said CEO Paul Andre Huet.
“These high-grade gold occurrences provide additional cash generation beyond what is forecasted by our steady state mine model, which excludes these high-grade zones.”
Earlier this week, RNC announced half-year guidance of 42,000-49,000oz of gold at all-in sustaining costs of US$1,150-1,250 an ounce, though that doesn’t include any discoveries of coarse gold.
“We hit them in certain areas of the mine,” RNC managing director Australian operations Graeme Sloan told the ResourceStocks Sydney conference earlier this month.
“We don’t know when or where we’re going to hit them. What we can say is we are going to hit them.”
The discovery of the Father’s day vein in September last year sent RNC shares rocketing 1,000% higher while adding thousands of ounces of bonus production.
Australia’s exploration budget surpasses that of Canada
New data has revealed that the global exploration recovery, which began in late 2016, has faltered this year, with the estimated nonferrous exploration budget falling by 3% to $9.8-billion.
Latin America remains the top region for exploration, despite its $2.62-billion budget being $117-million less than in 2018.
Australia’s nonferrous allocations have increased the most, by $199-million to $1.53-billion, surpassing Canada for the first time since 2001. Canada has slid by $134-million to fourth place with $1.31-billion.
In third place is S&P’s rest of the world region, which includes Europe and mainland Asia. Allocations to the latter have fallen by $241-million to $1.44-billion in 2019, placing it behind Australia for the first time since 2003.
Peabody to close Illinois coal mine
Peabody Energy (NYSE: BTU) is reportedly closing the Wildcat coal mine and nearby Willow Lake plant in Illinois in December due to “uneconomic mining conditions”
The closure is expected to impact about 225 workers.
Employees were told at a compulsory meeting on Monday, local media reported.
The company would try to place employees at other Peabody operations in the Midwest, according to a letter to staff.
The underground Wildcat thermal coal mine in Saline County opened in 2006 and sold 1.4 million tons of coal last year.
Peabody had last month flagged weaker September quarter earnings, because of shrinking thermal coal demand and delays ramping up production at the Middlemount joint venture mine in Queensland, Australia.
https://www.mining-journal.com/bulks/news/1373655/peabody-to-close-illinois-coal-mine
BHP to decide fate of Jansen potash mine in early 2021
BHP (ASX, NYSE: BHP), the world’s largest miner, will decide whether to go ahead with its long-delayed $17 billion Jansen potash project in Canada by February 2021, when it reaches 10 years since completing the feasibility study for the operation.
The company has been mulling a final decision on the asset for at least six years, during which it has spent almost $3 billion laying the ground for crop nutrient-producing project.
BHP HAS LONG BEEN EAGER TO ENTER THE POTASH MARKET TO DIVERSIFY ITS ASSET BASE, CURRENTLY CONCENTRATED AROUND IRON ORE AND COPPER
Two shafts have already been sunk, but BHP will have to invest another $5.3–$5.7 billion to finish phase one construction of the mine, which the company said would take fewer than 5 years to complete. BHP has in the past said it would consider selling a stake in the project to share capital and risk.
https://www.mining.com/bhp-to-decide-fate-of-jansen-potash-mine-in-early-2021/
COMMODITIES
Tin demand likely to contract this year – association
Although refined tin use grew by 2% year-on-year in 2018, the International Tin Association (ITA) expects demand to contract for this year, primarily as a result of an unstable macroeconomic environment.
Releasing the results of its fifteenth annual report, on Thursday, the association said there had been a contraction in refined tin use in most sectors so far this year.
The report surveyed 141 companies, which account for about 43% of estimated global refined tin use.
Solder accounts for the largest global share of tin use and the sector’s demand grew by 2% in 2018.
Forecasts for 2019, both inside and outside of China, were significantly more negative because of weakening global manufacturing and supply chain issues, mainly linked with the US–China trade war, the association noted.
It added that electronics miniaturisation remained the greatest medium-term threat to tin demand, primarily in China, but this would be countered by growth in new markets, including fifth-generation communications and electric vehicles.
Tin use in chemicals continued to grow, although at a slower pace. In 2018, the sector grew by 3% compared with 6% the year before. This was mainly driven by growth in polyvinyl chloride stabiliser and polymer catalyst markets.
Tin use for all tin chemicals, including inorganic forms, was forecasted to decline this year.
The ITA further found that tinplate use continued a long-term trend of slow decline, contracting by 2% in 2018. This is likely to decrease again in 2019. Prospects are especially poor in China, despite continued reports of increasing capacity there.
Lower tin coating weights and competition from alternative packaging are challenging tin use. Changing tariffs are significantly disrupting global supply chains, said the ITA.
The survey further showed that lead-acid battery tin use achieved strong growth of 4% in 2018, reflecting market expansion in high tin use in start-stop hybrid vehicles, as well as motive batteries in forklifts.
The ITA expects modest growth in refined tin use in the lead-acid battery sector this year.
“The use of tin in electric bikes in China is a significant proportion of tin use but we expect it to flatten and decline under government pressure on lead-acid batteries and competition from lithium-ion,” the association stated.
Meanwhile, tin use in copper alloys and other metal product markets declined by 2% in 2018. Copper alloy producers in China reported weakness in domestic markets for bronze strip in electrical products, with some impact from the US–China trade war on exported high-end products.
Provisional estimates of total global tin use, including refined and unrefined forms, totalled 455 600 t in 2018, up 3% on 2017. The recycling input rate – the use of recycled tin as a proportion of total tin use – was calculated to be roughly constant at 32% in both 2018 and 2019 so far.
Pipeline refined tin stocks held by surveyed companies at the end of 2018 amounted to the equivalent of 3.9 weeks’ supply.
“If this ratio is extrapolated based on global consumption, it would imply that world consumer stock holdings were around 28 000 t. The survey indicates that many users are in the process of significantly running down their inventories this year,” the ITA said.
https://www.miningweekly.com/article/tin-demand-likely-to-contract-this-year-association-2019-10-17
LEGAL AND REGULATORY
Battle for Greenland: US and China race to grow Arctic footprint
Global warming brings new opportunities in resources and military strategy
YASUO TAKEUCHI, Nikkei staff writer
NUUK, Greenland — Call it an Arctic Game of Thrones. The U.S. and China are turning their focus to Greenland’s rich mineral deposits and strategic location as melting ice caps open up the Arctic to new business possibilities.
Xploration Services Greenland, which helps mining companies set up shop on the island 85% covered with ice, has received many inquiries about possible partnerships over the past few years from players in Canada, Australia, Europe and China.
“The ice is melting as temperature rises. It makes it easier to mine here,” said Xploration CEO Bent Olsvig Jensen, adding that exploration and transportation have become less difficult.
The world’s largest island has been in the spotlight since U.S. President Donald Trump said he wanted to buy the autonomous territory from Denmark. The island itself has been keen to bring in foreign investment, believing that economic growth is the quickest path to grasping independence from Denmark.
But its sheer geopolitical location — a stone’s throw away from North America and Russia — makes any changes to the status quo a sensitive topic.
China in particular is aggressively pursuing Greenland’s essentially untapped resources. Shenghe Resources Holding and China National Nuclear Co. set up a joint venture in January to process and trade rare-earth metals from Greenland.
Rare earths are a vital component of many digital equipment. Greenland is believed to have a quarter of the world’s reserves of these materials, and securing mining interests there would give China a leg up in the battle for technological domination.
The U.S. is also turning its focus on Greenland even though Danish Prime Minister Mette Frederiksen quickly dismissed Trump’s purchase suggestion as “absurd.”
The American ambassador to Copenhagen has been visiting the island more frequently, according to a local diplomatic expert. There is also talk of setting up a permanent consulate in Greenland.
The U.S. has deep military ties to both Denmark, a NATO ally, and to Greenland, and has operated a base on the island since the 1950s. China’s growing clout in the area is both an economic and security concern.
Maritime activity has also picked up in nearby waters. Local reports indicate more Russian submarines sailing in the Arctic Sea, while both Russia and China are interested in new shipping lanes made possible by the melting ice.
The Greenland government aims to eventually become fully independent from Denmark, and roughly 70% of its population of about 56,000 supports the plan. Chinese investment could help the island achieve economic independence, and Greenland is considering setting up its fifth diplomatic outpost abroad in China.
“The security tension among big powers is affecting Greenland, which seeks the economic growth for independence in the future,” said University of Greenland professor Rasmus Leander Nielsen.
“We welcome investment from all over the world,” Greenland Foreign Minister Ane Lone Bagger told Nikkei in an interview, urging players against escalating tensions in the Arctic.
FINANCIAL
China copper smelters hike fourth-quarter treatment charge floor ahead of 2020 talks
KUNMING, China/SINGAPORE (Reuters) – China’s top copper smelters on Thursday raised their fourth-quarter floor treatment and refining charges (TC/RCs) by 20% from the previous quarter, according to three people with knowledge of the matter.
The China Smelters Purchase Team (CSPT) set the treatment charge floor at $66 per tonne, and the refining charge floor at 6.6 cents a pound at a meeting in Shanghai, said the sources, who asked not to be identified due to the sensitivity of the matter.
That was up from $55 a tonne and 5.5 cents a pound in the third quarter, but still below the $90 a tonne and 9 cents a pound set for the fourth quarter of last year.
“Easing (restrictions) from an Indonesian miner …and compounding smelters’ closures and maintenance in October both contribute to spot TC’s hike, then a CSPT floor price hike, and hopefully a benchmark hike next year,” said a trader with a private smelter.
Last month, Indonesia authorities approved an increase in copper concentrate exports for a unit of Freeport McMoran Inc, while research house Antaike said there were plans for some smelting overhauls in October.
Copper miners pay TC/RCs to smelters to process their ore into refined metal. Higher charges indicate more abundant concentrate supply or that smelters have less need.
INNOVATION AND TECHNOLOGY
Australia backs solar farm for two Fortescue iron ore mines
MELBOURNE (Reuters) – The Australian government said on Friday that it will provide more than half the funds for a A$200 million ($136.60 million) solar farm being built by Alinta Energy to help power two iron ore mines in Western Australia’s remote Pilbara region.
Alinta, owned by privately owned Hong Kong conglomerate Chow Tai Fook Enterprises, is planning to build a 60 megawatt (MW) solar farm at Christmas Creek, which would help replace diesel generation at mines owned by Fortescue Metals Group.
The mines also use power from a gas-fired plant owned by Alinta.
“The combination of solar and gas means the mining operation will have clean, secure and reliable energy supply from morning to night,” Energy Minister Angus Taylor said in a statement.
The government said its Northern Australia Infrastructure Facility has agreed to lend up to A$90 million and the Australian Renewable Energy Agency (ARENA) will provide a A$24.2 million grant to Alinta.
“Working together, we are on the cusp of demonstrating that renewables can drive Australia’s economic powerhouses forward -even for remote and complex industrial applications,” Alinta Managing Director Jeff Dimery said in a joint statement with ARENA.
PROJECTS
DeepGreen makes run at seafloor mining
Canadian Mining Journal Staff
DeepGreen Metals intends to be the world’s first zero tailings miner by retrieving polymetallic base metal nodules from the seafloor. In lab tests the nuggets have been treated with calcination and smelting techniques that produced iron-rich alloy nuggets with payable amounts of nickel, copper and cobalt. A manganese silicate product was also produced.
DeepGreen and its subsidiary NORI (Nauru Ocean Resources Inc.) are interested in the Clarion Clipperton (CC) zone in the eastern Pacific Ocean. NORI holds a 15-year exploration contract for the 74,830 km2 project area.
The company is doing further tests and engineering studies with plans of building a pilot plant next year. It will produce nickel and cobalt sulphates and copper cathode products. Suitable sites for a commercial plant are under consideration.
The nodules are typically 1 to 20 cm in diameter, 4,000 to 5,000 metres below the surface. They lie below a layer of mud up to 30 cm deep. The nodules occur as concentric layers of manganese and iron oxides and hydroxide concentrated around a core, according to DeepGreen.
Earlier this year a preliminary economic assessment put NORI inferred resources at 909 million tonnes (wet nodules) grading 1.3% nickel, 29.2% manganese, 1.1% copper and 0.2% cobalt with a mean nodule abundance of 13 kg/m2 based on a cut-off of 4 kg/m2.
Editor’s note: The company boasts of being “the world’s first zero tailings mining project.” While the claim is supported because no solid tails will be produced and stored at the mine, mining the seafloor is not without risks. The nuggets occur in mud, and the act of mining will undoubtedly create extensive turbidity of the seawater during mining. And there is considerable ecological opposition to disturbing the seafloor.
https://www.mining.com/deepgreen-makes-run-at-seafloor-mining/
COMMODITY PRICES
