February Newsletter – 20.02.2023

  • Pakistan plans to quadruple domestic coal-fired power, move away from gas
  • China to operate in the development of Russian arctic titanium mine
  • Congo demands $17bn more in infrastructure investments from China deal
  • Alberta miner replaces Chinese investor that Ottawa barred from owning Canadian assets
  • Saudi Arabia’s Ma’aden posts 87% jump in 2022 net profit on revenue boost
  • Saudi Arabia has more than 212 industrial investment opportunities: minister
  • Ecuador mining export revenues jump nearly 33% in 2022
  • Ghana mining fund mulls multi-million investment in Atlantic Lithium

Pakistan plans to quadruple domestic coal-fired power, move away from gas

ISLAMABAD: Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming years, its energy minister told Reuters on Monday, as it seeks to ease a crippling foreign-exchange crisis.

A shortage of natural gas, which accounts for over a third of the country’s power output, plunged large areas into hours of darkness last year. A surge in global prices of liquefied natural gas (LNG) after Russia’s invasion of Ukraine and an onerous economic crisis had made LNG unaffordable for Pakistan.

“LNG is no longer part of the long-term plan,” Pakistan Energy Minister Khurram Dastgir Khan told Reuters, adding that the country plans to increase domestic coal-fired power capacity to 10 gigawatts (GW) in the medium-term, from 2.31 GW currently.

Pakistan’s plan to switch to coal to provide its citizens reliable electricity underscores challenges in drafting effective decarbonisation strategies, at a time when some developing countries are struggling to keep lights on.

Despite power demand increasing in 2022, Pakistan’s annual LNG imports fell to the lowest levels in five years as European buyers elbowed out price-sensitive consumers.


China to operate in the development of Russian arctic titanium mine

The state-run Chinese construction and engineering company is embarking on a project to mine a huge titanium deposit located in the Komi region of Russia.

China Communications and Construction Co has agreed to co-operate in developing Russia’s largest titanium deposit. The project will also involve the construction of a new railroad and development of the Indiga deep-water port.

The Chinese state-owned engineering company, which has been under US sanctions for more than a decade, first met with the Russian Titanium Resources (Rustitan) regarding the project on 17 January.

The mining cluster, located in the Pizhemskoye field in the Komi Republic, holds the world’s largest titanium deposit and more 80% of Russia’s titanium ore reserves.

A second meeting took place between Rustitan and the China Railway Construction Co to discuss the Sosnogorsk-Indiga railroad connection. This project would enable the transportation of materials through the Urals and Siberia.

The deposit, discovered in 2021, also holds zircon, iron ore, and gold. The project seeks to provide marketable products for the China, the world’s largest manufacturer and exporter of titanium.


Congo demands $17bn more in infrastructure investments from China deal

Congo’s state auditor has demanded an additional $17 billion of investments from a 2008 infrastructure-for-minerals deal with Chinese investors that is currently being renegotiated, documents seen by Reuters on Thursday showed.

State mining company Gecamines headquarters

President Felix Tshisekedi’s government has been revisiting the deal struck by his predecessor Joseph Kabila under which Sinohydro Corp and China Railway Group Limited agreed to build roads and hospitals in exchange for a 68% stake in Sicomines, a cobalt and copper joint venture with Congo’s state mining company Gecamines.

Under the Sicomines deal, the Chinese investors committed to spending $3 billion on infrastructure projects, but the state auditor – Inspection Generale des Finances (IGF) – demanded that commitment be increased to $20 billion, to reflect the value of the mining concessions that Gecamines contributed to the deal.

A Sicomines official did not immediately reply to a request for comment. He has previously defended the deal, saying it had driven development for Congo’s people and that Sicomines would invest more as production increased.

So far, Sicomines has only spent $822 million on infrastructure investments, according to the IGF report seen by Reuters. The auditor also called for an “immediate” $1 billion investment from Sicomines, and a commitment to 50% of the workforce on infrastructure projects being Congolese.

Among a list of 16 demands, the IGF called for the “renegotiation of the Convention to adjust and balance the duties and benefits of both parties and bring them into line with the value of their respective contributions”.


Alberta miner replaces Chinese investor that Ottawa barred from owning Canadian assets

Lithium Chile regrets losing ‘an incredible shareholder,’ COO says

Brine pools from a lithium mine in Chile.

Lithium Chile Inc., one of three Canadian miners affected by Ottawa’s snap decision to block Chinese investment in critical minerals, said the order has been satisfied, although it regrets losing an “incredible shareholder” that supplied valuable expertise.

Chengze Lithium International Ltd. had purchased a 19.4 per cent stake in Lithium Chile, making it one of the Calgary-based company’s largest shareholders. Chengze sold its shares to Gator Capital Ltd., a Toronto-based firm that focuses on investment consulting and asset management. The transaction was completed for about $34.5 million, or 91 cents per share.


Saudi Arabia’s Ma’aden posts 87% jump in 2022 net profit on revenue boost

The mining company said the outlook this year is positive as it remains focused on sustainable growth and financial discipline

Saudi Arabian Mining Company, one of the Gulf’s biggest miners, reported a more than 87 per cent jump in its full-year 2022 net profit, boosted by higher sales and higher average prices of its products.

Ma’aden, as the Riyadh-listed company is known, posted 12.13 billion Saudi riyals ($3.23 billion) in net profit in 12 months to the end of December, it said in a filing on Monday to the Tadawul stock exchange, where its shares are traded.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 51 per cent at the end of the reporting period to more than 18.68 billion riyals, driven by higher commodities prices.

Revenue for the January-December period surged 50 per cent to more than 40 billion riyals, driven by higher sales volumes. Cash generated from operations jumped 71 per cent on an annual basis to 16.21 billion riyals.

“Ma’aden delivered its safest and most profitable year ever. The transformation initiated a year ago is showing results,” Robert Wilt, Ma’aden’s chief executive, said.

“Financially, sales and profits grew … with working capital improvements contributing to record cash generation levels and the further strengthening of our balance sheet.”


Saudi Arabia has more than 212 industrial investment opportunities: minister

RIYADH: Saudi Arabia’s Minister of Industry and Mineral Resources, Bandar Al-Khorayef, has confirmed there are 212 industrial investment opportunities through the Invest in Saudi platform.

The platform currently presents 82 out of the 163 investment opportunities previously announced by the Kingdom’s national strategy Vision 2030, and will add the rest by the end of 2023.

During his participation in Al-Ahsa Investment Forum 2023, the Minister indicated that the industrial sector is one of the focal points of Vision 2030 which aims to achieve an industrial renaissance and unleash enormous capabilities into the strategic sector, Saudi Press Agency reported.

Saudi Arabia is one of the world’s fastest growing countries in the industrial sector with an average growth rate of 7.5 percent per year, according to the Invest Saudi website.

The Kingdom is empowering the industry through three main goals set to develop a comprehensive map to accelerate the pace of development.

These are building a flexible industrial economy that is capable of adapting to change, forming an integrated industrial center to meet demand, and achieving global leadership in manufacturing certain products.


Ecuador mining export revenues jump nearly 33% in 2022

The value of Ecuador’s mining exports grew 32.6% in 2022 from the year before, reaching $2.78 billion after its two large-scale mines operated at full capacity, the country’s energy and mines ministry said Friday.

The figure surpasses the South American government’s original goal for the year of $2.67 billion.

“This growth is mainly due to the two large-scale mines Mirador and Fruta del Norte, especially since for the first year, both mines were at 100% production capacity,” the ministry said, adding that small-scale mining export revenues also grew 47% in 2022.

Both located in the Zamora Chinchipe province in Ecuador’s Amazon region, the Mirador copper mine is operated by Ecuacorriente, a subsidiary of China’s CRCC-Tongguan, while gold mine Fruta del Norte is run by Canada’s Lundin Gold LUG.TO.

The Andean nation has abundant mineral reserves, but has lagged regional neighbors like Peru and Chile in large-scale mining development due to opposition from indigenous communities and court rulings that have halted project progress.

Ecuador’s mining exports in 2021 were valued at $2.09 billion, according to official data. Mining accounts for the country’s fourth most exported products, behind oil, shrimp and bananas.

With several new mining projects coming online over the next two years, including Australian SolGold’s SOLG.L Cascabel concession, the government hopes to bring in another $4 billion in mining exports by 2025.

The main destinations for Ecuador’s mining exports are China, the United States and Switzerland, according to the ministry’s statement.


Ghana mining fund mulls multi-million investment in Atlantic Lithium

Atlantic Lithium has projects in Ghana and Côte d’Ivore.

Australia’s Atlantic Lithium (LON: ALL) (ASX: A11) said on Friday that it is engaged in talks with Ghana’s state-owned Minerals Income Investment Fund (MIIF) for funding of up to $30 million.

The exploration and development company is developing the Ewoyaa project in central Ghana, which would be the country’s first lithium mine.

Atlantic says the operation, which is expected to begin production in the second half of 2024, has the potential to generate nearly $5 billion in revenue over its 12.5-year life.

The MIIF confirmed plans to take an equity stake in Atlantic Lithium and said the company had agreed to list on the Ghana Stock Exchange. Atlantic Lithium said only that discussions were ongoing, adding that there was no certainty an investment will be made.

A resource update for Ewoyaa, released early February, shows a mineral resource estimate (MRE) of 35.3 million tonnes at 1.25% lithium oxide (Li2O), including 28-million tonnes in the measured and indicated categories.



Link for more detailed information