March Newsletter – 20.03.2023

  • Guinea, partners resume Simandou infrastructure operations
  • Ten trapped miners found dead in Colombia, toll rises to 21
  • LME rocked by new nickel scandal after finding bags of stones
  • Elon Musk’s Starlink linked to illegal mining in Brazil
  • Aldoro to acquire stake in Namibian heavy rare earth carbonatite project
  • Norway’s Loke buys UK deep-sea mining firm from Lockheed
  • Vale weighs IPO of metals unit after sale of 10% stake
  • Over 200 projects in pipeline for privatization in Saudi Arabia – Al-Jadaa

Guinea, partners resume Simandou infrastructure operations

Guinea’s government and its partners in the Simandou infrastructure and mine restarted construction works at the world’s biggest untapped reserve of iron ore.

The $15 billion project, which includes a railway and port, was restarted Saturday, almost one year after operations were suspended. It was officially launched by the ruling junta leader Colonel Mamadi Doumbouya at a ceremony in Moribaya, at least 100 km south of the capital Conakry.

Simandou is part-owned by Rio Tinto Group and Winning Consortium Simandou, which is backed by Chinese and Singaporean companies. Recent negotiations allowed China Baowu Steel Group to enter in the project so as to accelerate the financing.

“My ambition is for the Simandou project to serve as real catalyst for the economic development of Guinea, and allow the country to become a major player in the world iron ore market,” Doumbouya said in a speech.

Ten trapped miners found dead in Colombia, toll rises to 21

Ten workers trapped in a coal mine in central Colombia were found dead, bringing the death toll from an explosion in the pit to 21, President Gustavo Petro said Thursday.

A build-up of methane gas apparently triggered the Tuesday night explosion in the underground complex, according to local officials.

“Sadly, 21 people lost their lives in this tragic accident in Sutatausa,” a municipality in Cundinamarca department, the Colombian leader wrote on Twitter.

Rescuers had found 11 other bodies on Wednesday in the mine, which is some 45 miles (75 kilometers) north of Bogota.

Cundinamarca Governor Nicolas Garcia also announced the search was over Thursday, writing on Twitter that “unfortunately there is no longer anyone alive. We are heartbroken.”

Dozens of rescuers had searched for the miners in six interconnected legal mines, where officials are now investigating whether there was appropriate air flow.

Sutatausa’s mayor, Jaime Arevalo, had earlier described the rescue effort as “very complex,” saying oxygen was running out and water was “beginning to accumulate.”

LME rocked by new nickel scandal after finding bags of stones

The London Metal Exchange has discovered bags of stones instead of the nickel that underpinned a handful of its contracts at a warehouse in Rotterdam, in a revelation that will deliver another blow to confidence in the embattled exchange.

The amount of metal represents just 0.14% of live nickel inventories on the LME, worth about $1.3 million at current prices, so the immediate impact on metals markets is limited. But the shock announcement has much wider implications: in an industry riddled with scandals, the LME’s contracts are viewed as unquestionably safe. The news that even a few of them have been compromised will raise fresh questions about its systems and procedures while the 146-year old exchange is still wading through the fallout of its last nickel crisis.

“LME warehouse warrants used to be the gold standard of warehouse warrants around the world, treated as a near-cash equivalent,” John MacNamara, chief executive officer of Carshalton Commodities Ltd. and a veteran commodity trade finance banker, wrote on LinkedIn. “Something has gone horribly wrong at the LME.”

It also comes at a fraught time for the wider metals world, after trading giant Trafigura Group revealed in February that it had been the victim of a vast alleged fraud involving missing nickel cargoes. The news that a powerful player like Trafigura is facing hundreds of millions of dollars in losses has spooked others in the industry and prompted some to check on their own metal cargoes.

Elon Musk’s Starlink linked to illegal mining in Brazil

Perhaps not even the biggest Elon Musk detractors could have imagined one of his ventures being linked to unethical mining.

SpaceX’s starlink satellites stream across the sky in Brazil

Reports this week by The Associated Press revealed that illegal gold miners in Brazil’s Amazon have been using Musk’s Starlink high-speed internet technology as a novel tool for illicit operations.

Launched in 2019 as a division of SpaceX, Starlink is a low latency, broadband internet system consisting of nearly 3,600 low-orbit satellites that aims to connect the underserved areas of the planet with the rest of the world.

In Brazil, this technology was made available last January as part of a government-led project to serve schools in rural areas and monitor the Amazon rainforest. While that project has failed to gain traction, the use of Starlink has only grown across a region populated by illegal mining groups, according to reports.

Illegal miners have long relied on internet as a means for communication, but the logistics involved in setup and the luck needed for it to work without getting caught by law enforcement, would have been a gamble. So Musk’s Starlink may have been seen as a safer bet.

In a federal raid on an illegal mining site Tuesday, agents from the Brazilian environment agency’s special inspection group and the federal highway police rapid response group found one Starlink terminal up and running next to a pit, Associated Press reported.

Aldoro to acquire stake in Namibian heavy rare earth carbonatite project

Upon deal completion, Aldoro plans to organise a due diligence sampling programme at the project.

Australia-based Aldoro Resources has signed a binding heads of agreement to acquire an 85% stake in mineral permits EPL 7373; EPL 7372; and EPL 7895, collectively known as the Kameelburg Project, in Namibia.

The agreement was signed with Logan Exploration and Investments CC and Okonde Mining and Exploration CC.

Aldoro Resources chairman Troy Flannery said the critical metals transaction would increase the company’s rare earths exposure in what it claims to be an extremely large outcropping carbonatite deposit.

Flannery said: “We are comfortable with the project’s location in Namibia, which is ranked by the Fraser Institute as the second most favourable jurisdiction (behind Morocco) on the Policy Perception Index (PPI) across the African continent.”

According to the agreed terms, Aldoro will make an initial payment of A$41,000 upon signing the agreement, A$201,000 at completion, as well as issue 500,000 fully paid Aldoro ordinary shares.

Located 300km north of Windhoek and in the northern Central Damara Orogenic Belt, the Kameelburg Project comprises the Cretaceous Kameelburg Carbonatite plug and associated radial dykes that intrude precursor syenites in the older host Neoproterozoic marbles and schists.

Norway’s Loke buys UK deep-sea mining firm from Lockheed

OSLO, March 16 (Reuters) – Norway’s Loke Marine Minerals has acquired deep-sea mining firm UK Seabed Resources (UKSR) from Lockheed Martin, the companies said on Thursday.

UKSR holds a 100% interest in two deep sea mineral licences in the Clarion-Clipperton Zone (CCZ) in the Pacific Ocean, and a 19.9% interest in the Ocean Mineral Singapore, licences issued by the International Seabed Authority (ISA).

“We’ve got the approval from the UK government… Our ambition is to start extraction from 2030,” Hans Olav Hide, Loke’s chairman, told Reuters.

Companies that also hold exploration licences for swathes of the sea floor in the CCZ include Global Sea Mineral Resources (GSR) and The Metals Company.

Vale weighs IPO of metals unit after sale of 10% stake

Vale SA is considering a spinoff or initial public offering of its sprawling base metals business after it completes the sale of a minority stake, according to people familiar with the situation.

Refinery in Sudbury, Ontario

The Brazilian mining giant is in talks to sell a 10% stake in the unit and expects final bids in that process to be submitted by mid-April, said one of the people, who asked not to be identified because the deliberations are private. Once the transaction is completed, Vale will likely list the unit or spin it off in 2024, the person said.

The company has approached Mark Cutifani, a former chief executive officer of Anglo American Plc, about becoming chair of the base metals business, the people said. Vale is also considering other options and there’s no guarantee Cutifani will be offered the job or accept it, according to the people. There is also no guarantee the listing or spinoff will go ahead, they said.

Over 200 projects in pipeline for privatization in Saudi Arabia – Al-Jadaan

RIYADH — Minister of Finance Mohammed Al-Jadaan said that Saudi Privatization Program has a pipeline of over 200 projects in 17 targeted sectors, creating tremendous opportunities for investors.

Al-Jadaan opened on Wednesday the second edition of the two-day Financial Sector Conference organized by the partners of the Financial Sector Development Program, including the Ministry of Finance, Saudi Central Bank and Capital Market Authority.

He said, “The number of small and medium sized enterprises has nearly doubled since 2016 as the share of bank financing going to SMEs reached 7.9 percent and 45 percent of SMEs are owned by Saudi women.”

“The Female participation rate in the labor market is now 37 percent. Consumption is strong and home ownership has grown to a record 62 percent, while real estate lending quadrupled since 2018.”

He stressed that the Silicon Valley Bank (SVB) offers lessons for regulators, investors, and financial institutions. “Effective implementation of macro-prudential measures contributes to the resilience of the financial system against shocks of this kind.”

Al-Jadaan said in his speech that the Financial Sector Conference is held this year after having achieved remarkable results in the comprehensive development process, the features of which are set out in the Saudi Vision 2030 that aims at bringing about a bright and sustainable future in all fields.