January Newsletter – 16.01.2023

  • OreCorp’s Nyanzaga reveals true potential
  • China’s reopening should underpin commodity demand acceleration – Barclays
  • This village is standing in the way of Germany’s coal revival
  • Sweden Blockbuster Discovery Of Rare Metals Crucial For Electric Vehicles: Here’s What We Know
  • PH mining to be key contributor to Indo-Pacific growth, says Diokno
  • Glencore evacuates personnel after protesters vandalize Antapaccay mine camp
  • Biden backs Nevada lithium mine with $700 million loan offer
  • Zambia extends electricity rationing to mining firms

OreCorp’s Nyanzaga reveals true potential

ASX-listed gold junior OreCorp is entering the final phase of a journey to move its Tanzania-based Nyanzaga project from exploration into construction and production.

Having released an economically compelling DFS in August this year, the company has commenced with finance discussions to raise the US$474 million required to start building in mid-2023 and produce first gold in mid-2025.

LAURA CORNISH spoke to the CEO and MD of OreCorp, MATTHEW YATES, about the company’s journey to date, its aspirations for the project and the positive experience of working in-territory since the new president took to the helm.

Nyanzaga, like many potential mining projects, has been on and off explorers’ radars for decades. In fact, gold was first discovered at Nyanzaga in the 1930s, when three exploration adits were developed into the Nyanzaga hill to examine its potential more closely. The first drill holes were made in the mid-1990s.

Advancing a project amidst policy turmoil

Prior to OreCorp’s involvement in the project, it belonged to the now defunct Acacia – once Tanzania’s largest gold producer. OreCorp earned into the project and various contributions towards advancing it and ultimately became the sole owner in October 2019 of the local entity (Nyanzaga Mining Company (NMCL)).

Describing himself as a “project finder”, Yates describes Nyanzaga as the kind of asset that junior companies are built on. “It was viewed as a 10 Mtpa, billion-dollar project – but it lacked attention to detail and opportunity and its geology had never been given justice,” he says.


China’s reopening should underpin commodity demand acceleration – Barclays

JOHANNESBURG (miningweekly.com) – China’s reopening and ‘whatever it takes’ approach to the property sector are tectonic shifts that should underpin an acceleration in commodity demand through 2023, say Barclays Equity Research analysts.

2023 is set to be another strong year for miners, European metals and mining analysts Amos Fletcher, Ian Rossouw and Tom Zhang state.

This follows China’s commodity demand momentum being under downward pressure throughout 2022.

The ‘whatever it takes’ approach to the real-estate sector is seen as being central to commodity demand.

In particular, the analysts see the move to relax the ‘three red lines’ policy as well as the ‘16-point comprehensive plan’ as being supportive of recovery. It was the ‘three red lines’ policy that triggered the real-estate meltdown of the last two years.

With China now accounting for more than half of key commodity demand, the analysts see the impact on mining of a US/European recession as being lowered. The impact of Europe on key commodity demand is put at 15% and that of the US is calculated to be 8% at most.

“Our conclusion is that with China set to deliver a positive economic impulse into 2023, it should underpin powerful relative outperformance from the miners even during a western world recession,” they state.

China’s real-estate rescue plan of November, they point out, has already helped to improve homebuyer confidence, with the onshore bond market starting to reflect the improving policy backdrop. Household savings are also elevated after two years of limited consumption, implying significant pent-up demand potential.

Iron-ore, they point out, has enjoyed a powerful bounce since November amid imported iron-ore inventories at steel mills being at multi-year lows.

A plausible case is seen for the iron-ore price reaching $150/t before falling back and for iron-ore to then average a 15%-higher price of $115/t in 2023.


This village is standing in the way of Germany’s coal revival

Protest in Lützerath, Jan. 14, 2023

The protest started cheerfully enough on Wednesday, with music blaring and flags flying even under the driving rain. Then the police arrived, decked out in riot gear and backed by bulldozers, ready to demolish the village of Luetzerath to make way for the expansion of an opencast coal mine in the heart of Europe.

As Germany turns back to the dirtiest fossil fuel to counter a global energy crisis triggered by Russia’s invasion of Ukraine, this desolate settlement of drab brick houses and muddy fields has found itself at the heart of a broader debate about the future of the continent’s energy security — and its consequences for a warming planet.

A few houses are all that remain of Luetzerath, a hamlet in Germany’s industrial powerhouse of North Rhine-Westphalia, where mining has deep roots and still provides thousands of jobs. Its original residents have long since been relocated, but as many as 300 activists moved in about two years ago to block a decades-old plan to expand mining operations in the area.


Sweden Blockbuster Discovery Of Rare Metals Crucial For Electric Vehicles: Here’s What We Know

A Swedish mining company announced this week it discovered more than a million tons of rare earth minerals near a mining pit in the country’s far north, providing the state-owned company an unexpected potential windfall, and offering hope to various countries (including the United States) eager to use the metals for wind turbine and electric vehicle production—but heavily reliant on China for them.

In a statement on Thursday, LKAB, a state-owned mining company, said it found “significant deposits” near a mine it operates near the city of Kiruna—the largest deposit of its kind in Europe.

The metals, which are not mined in Europe, according to the company, are essential in the production of common household electronics like televisions, computers and smartphones, as well as electric vehicles and wind turbines, as well as defense systems, like night-vision technology and military jets.


PH mining to be key contributor to Indo-Pacific growth, says Diokno

Economies in the Indo-Pacific region need deeper integration to share resilience at a time when a global slowdown, if not another recession, is expected, according to Finance Secretary Benjamin Diokno.

The Finance chief said this as the Philippines looks to the mining industry as having “the greatest potential to be a key driver in country’s recovery and long-term growth, along with the industries of semiconductor and electronics, and renewable energy.

Diokno said this in the context of the Indo-Pacific Economic Framework for Prosperity (IPEF) that US President Joe Biden launched in May 2022, during a visit to Japan.

The IPEF is expected to help create a stronger, fairer, more resilient economy for families, workers and businesses in the United States and in the Indo-Pacific region.

US partners that have rallied around the IPEF include the Philippines, Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Singapore, Thailand and Vietnam.

Also, the IPEF will strengthen the country’s ties across this critical region to define the coming decades for technological innovation and the global economy.


Glencore evacuates personnel after protesters vandalize Antapaccay mine camp

Antapaccay workers.

The campsite at Glencore’s Antapaccay copper mine in southern Peru was vandalized by a group of people protesting against the country’s new president and demanding a general election.

According to local media, the incident took place on Friday morning when the protesters broke into the site’s water plant and set the facility on fire. The plant provides drinking water to over 6,000 people in nearby communities.

The Peruvian press pointed out that the company reported the incident to the police and asked for increased security measures around Antapaccay but their claims went unheard. Most national police officers have been deployed in the cities of Puno, Juliaca and Cusco as the government attempts to contain protests sprouting in different areas.

Given this response, Glencore issued a communiqué stating that management decided to evacuate most of the 2,400 people that were at the mining camp, among them staff and contract workers. Only essential personnel needed to maintain basic operations going will remain at the site.


Biden backs Nevada lithium mine with $700 million loan offer

The Rhyolite Ridge lithium-boron project in Nevada.

A Nevada lithium mine that would be only the second in the US is getting backing from the Biden administration as it seeks to boost the domestic supply of the critical mineral needed to make electric vehicle batteries.

The Energy Department issued a conditional commitment for up to $700 million for Ioneer Ltd.’s Rhyolite Ridge Lithium-Boron Project, a prospective supplier to Ford Motor Co. and Toyota Motor Corp. that could produce enough lithium for 370,000 electric vehicles a year. Project partners include mining and metals processing group Sibanye Stillwater Ltd.

The funding, being made through the department’s Advanced Technology Vehicles Manufacturing Loan Program, comes as the Biden administration seeks to create a domestic battery supply chain amid a broader goal of half of vehicles sold in the US by the end of the decade be emissions-free.

Demand for lithium, which also is used for grid storage and weapons, is projected to exceed current production by 2030. The US relies on international markets for the processing of most raw materials, according to the department.


Zambia extends electricity rationing to mining firms

Lubambe copper mine, Zambia.

Zambia has started rationing electricity supply to mining firms following reduced power generation after a big drop in water levels in lake Kariba, the chairman of state-owned power utility Zesco said on Tuesday.

Water levels in the lake were down at 1.66% of usable storage on Monday for the Kariba North Bank Power Station in Zambia and the Kariba South Bank Power Station on the Zimbabwean side of the lake, said the Zambezi River Authority, which manages the dam.

The north bank power station has an installed capacity of 1,080 megawatts (MW), while the south bank power station in Zimbabwe has a capacity of 1,050 MW.

Hydropower contributes to more than 75% of Zambia’s electricity generation.

“We requested them to give away 180 MW but after negotiations we went down to 110 MW,” the utility’s chairman Vickson Ncube told Reuters, referring to mining companies in Africa’s No. 2 copper producer.

Last week, Zesco doubled the number of hours it cut supply to domestic customers to 12 hours from six hours daily as the low water levels in the lake threatened power generation.

Water levels in the lake have fallen due to reduced inflows from the Zambezi river and its tributaries and heavy use by power generation companies in Zimbabwe and Zambia.