May Newsletter – 02.05.2023

  • Vulcan secures German lithium plant finance from chemicals maker Nobian
  • A New Rush to Find Gold in the Sierra Nevada Foothills
  • Chile’s plan to nationalise lithium industry may impact China – report
  • Gold price down after crossing $2,000 as robust US data counters banking woes
  • Saudi Arabia’s industry and mining minister seeks to boost Swiss ties during visit
  • Australian trade commission highlights major prospects for companies in Saudi mining industry
  • Peak Rare Earths locks in $18 million to develop Tanzania project
  • Brazil Indigenous leader awarded for fight against mining

Vulcan secures German lithium plant finance from chemicals maker Nobian    


Existing Insheim renewable energy power plant.

Vulcan Energy Resources Ltd said on Thursday chemicals producer Nobian GmbH would invest 161 million euros ($177.76 million) in the lithium developer’s main lithium plant in Germany in exchange for a 50% stake in the project.

Vulcan is building out lithium production in Germany that will tap renewable energy from geothermal power in the Upper Rhine Valley. It plans to produce 24,000 tonnes per year lithium hydroxide monohydrate in its first phase.

Under the strategic non-binding agreement, Nobian’s investment will fund half of the projected capital expenditure for the lithium plant, with the rest to be secured via project debt finance.

As part of the agreement, Vulcan’s project will be split into two companies – one entity owning infrastructure to produce renewable energy and lithium chloride and the other controlling the main lithium plant.

“It is expected that Nobian’s equity contribution, alongside expected project debt finance to be obtained by the company … will fully cover the funding requirement for the (plant),” Vulcan said.

Nobian will assume 50% ownership of the entity which includes the main lithium plant, Vulcan said.

Vulcan is also in talks with “strategic counterparties” for equity funding of the first special purpose company and planning similar ownership structure to bring in project-level equity investment, it said.

A New Rush to Find Gold in the Sierra Nevada Foothills

In their lust for riches, the miners of the gold rush moved a gargantuan amount of dirt. A prominent geologist, Grove Karl Gilbert, calculated in the early 1900s that miners in the Sierra Nevada had displaced eight times the amount of dirt and detritus that was moved to build the Panama Canal.

Most of what those miners displaced was broken loose from the landscape by spraying hillsides with powerful water cannons. The human-made mudslides that resulted were directed through troughs known as sluices, which had grooves to catch flakes and nuggets of gold.

This seminal chapter in California’s history came up a number of times during two trips I took to Gold Country in recent weeks. Fortune seekers, geologists and amateur prospectors compared the past winter’s deluges to the water cannons of yore.

The chain of atmospheric rivers that Californians endured had many consequences: It filled reservoirs, flooded valleys, spurred a super bloom of wildflowers, and extended the ski season into summer.

And, as it turns out, the rain brought a measure of gold fever back to the foothills of the Sierra. In an article published over the weekend, I explored the small but dedicated corps of fortune seekers who said they had seen conditions like this only a few other times in their lives.

Bill Mitchell, a geologist in El Dorado County who specializes in mineral exploration, said a majority of the gold in the Sierra had still not been extracted. It’s going to take rainy years like this one to pry some of the remaining gold loose, he said.

The fortune seekers of the Sierra are donning wet suits and “sniping” for gold — probing creek bottoms with snorkels and masks. And they are walking the riverbanks with metal detectors.

Chile’s plan to nationalise lithium industry may impact China – report

Chinese companies are closely watching Chile’s plan to nationalise its lithium industry, which may negatively impact prices and import volumes to the world’s largest producer and consumer of new-energy vehicles (NEVs).

Last week, Chile’s President Gabriel Boric announced the nationalisation plan to boost its economy and protect its environment.

China’s Tianqi Lithium Corporation is monitoring the situation, state-run Global Times newspaper reported, citing news portal

The company has a 22.16 percent stake in Chilean miner SQM. The company, along with US-based Albemarle Corp, mines lithium in Chile, with concessions to expire in 2030 and 2043.

Tianqi said it only acquires investment income from SQM’s operation, as its relationship is “based on the stake it holds,” the news portal noted.

China-based Ganfeng Lithium said its lithium mineral imports from Chile are “quite small” as it mainly imports from Australia, news website reported.

BYD, the world’s largest electric vehicle maker, has got approval to build a factory and produce lithium iron phosphate (LFP) cathodes material in Chile, Global Times said.

With an investment of $290 million, the factory will produce 50,000 tonnes per year of LFP cathodes and is scheduled to start production in 2025.

Gold price down after crossing $2,000 as robust US data counters banking woes

Gold gave up all of its gains in volatile trading on Monday following the release of better-than-expected US manufacturing data in the run-up to the Federal Reserve’s rate hike decision.

Spot gold was down 0.3% at $1,982.81 per ounce by noon EDT, after rising 0.7% to $2,005.73 earlier in the session. US gold futures also lost 0.4% to $1,990.90 per ounce.

US manufacturing pulled off a three-year low in April as new orders improved slightly and employment rebounded, while construction spending increased more than expected in March.

That stronger-than-expected data knocked down the metals market and boosted the dollar a little bit, said Jim Wyckoff, senior analyst at Kitco Metals, in a Reuters note.

The dollar index gained 0.3%, making greenback-priced bullion less attractive for overseas buyers.

Heading into the session earlier, gold had rebounded above $2,000 as traders took stock of news that JPMorgan Chase would buy most of First Republic Bank’s assets after regulators seized the troubled lender over the weekend.

“The move was definitely premature… We used some of that opportunity to try and capitalize on taking some positions off on that move upwards,” said Phillip Streible, chief market strategist at Blue Line Futures, in Chicago.

The Federal Open Market Committee (FOMC) will meet on May 2-3, and markets largely expect a 25-basis-point interest rate hike.

Saudi Arabia’s industry and mining minister seeks to boost Swiss ties during visit

RIYADH: Saudi Arabia’s industrial and mining sectors are set to benefit from potential ties with Switzerland amid a ministerial visit to the European country.

During his trip, Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef aims to review investment opportunities in the sectors for which he is responsible, the Saudi Press Agency reported on Monday.

The minister is also reportedly planning to open new channels of communication for investors from both countries.

Alkhorayef is scheduled to participate in the World Economic Forum, meet government officials, and visit several Swiss companies during his stay.

The ministerial visit will help the Kingdom diversify its economic base by opening its doors to investors from all over the world.

In 2021, the volume of the Kingdom’s non-oil exports to Switzerland amounted to more than SR3.42 billion ($911.82 million), while the volume of imports was recorded at SR7.99 billion.

Australian trade commission highlights major prospects for companies in Saudi mining industry

RIYADH: Saudi Arabia’s mining sector is offering major prospects for Australian equipment, technology, and services companies, according to a report released by the country’s Trade and Investment Commission.

Saudi Arabia is expecting its mineral wealth to exceed earlier estimates of $1.3 trillion

Australian METS firms are now participating in a wide array of Saudi-based projects, including developing the NEOM smart city in Tabuk Province, battery metals for electric automobiles, and technologies that boost production efficiency and diminish emissions.

The commission attributed an increase in the participation of companies from Australia in these fields to a range of reforms around mining license applications and approvals by the Saudi Mining Investment Law.

Launched by the Saudi Ministry of Industry and Mineral Resources in 2020, the law creates a well-defined licensing system and raises investor confidence, according to the commission.

Moreover, the Kingdom’s mining sector entails a list of up to 38 initiatives that aim to create a robust and resilient mining industry built on the foundation of integrated value chains.

This paves the way for Australian METS firms with key opportunities across exploration, drilling, and land and air surveying.

There are also possibilities in mine infrastructure, mineral processing, mining consultancy, education, and training.

Over the next three to four years, more opportunities will emerge across digital technologies, quality and safety solutions, environmental services and mine safety equipment and services.

Mining is increasingly becoming a key element of Saudi Arabia’s economic development, after energy and petrochemicals, as the Kingdom seeks to wean its economy off oil production and exports.

Peak Rare Earths locks in $18 million to develop Tanzania project

Ngualla is one of the world’s largest and highest grade Neodymium and Praseodymium (NdPr) rare earth deposits.

Australian junior Peak Rare Earths (ASX: PEK) said on Monday it had locked A$27.5 million ($18m) from high net worth and offshore institutional investors to advance its Ngualla project, in Tanzania.

The company said about 55 million new shares would be offered at a price of 50 Australian cents each, in a two-tranche institutional placement.

The first tranche of the placement will raise $14.3 million, with shares to be allotted on Friday, May 5.

Peak’s largest shareholder, Shenghe Resources, has committed to increase its shareholding from 19.8% to 19.9% via the placement.

Given Shenghe currently holds more than 10% of the company’s issued share capital and has a nominee director on the Peak board, its participation will be in tranche two and subject to shareholder approval.

The placement marks another step towards the development of the Ngualla rare earths project and follows the signing of a binding framework agreement with the government of Tanzania last month, after a five-year wait.

Brazil Indigenous leader awarded for fight against mining

Alessandra Korap Munduruku first turned to activism as she watched advancing agriculture devastate her Indigenous territory in Brazil, but it was her battle to drive out mining giant Anglo American that landed her in the spotlight.

On Monday, the 38-year-old will be one of six people in the world presented with a Goldman Environmental Prize for efforts against the British multinational’s efforts to set up in Indigenous territories in the Amazon.

“We ran campaigns, wrote letters … until they arrived in their hands and we told them that we would not accept any mining in our territory,” Korap Munduruku told AFP in a video call.

In May 2021, after months of pressure, Anglo American withdrew 27 mining projects approved by authorities in Indigenous lands, including her territory of Sawre Muybu, which contains more than 160,000 hectares (400,000 acres) of rainforest.

“We are going to defend our territory tooth and nail,” added Korap Munduruku.

“Alessandra’s successful campaign represents a significant shift in private sector accountability around destructive mining in Brazil,” said the Goldman Foundation, which was due to present its prizes at a ceremony in San Francisco.

Soon after Anglo American, Brazilian giant Vale also announced the withdrawal of all of its exploitation permits in Indigenous territories in Brazil.