November Newsletter – 28.11.2022

  • UK, South Africa seek deeper cooperation on critical minerals
  • Condor Gold puts La India project in Nicaragua up for sale
  • India’s Jindal wins bid to build Botswana’s 300 MW coal power plant
  • Australia to become ‘more assertive’ on foreign investment in critical minerals
  • Govt Planning To Sell Small Stakes Of Coal India, Hindustan Zinc: Report
  • The hard choices geopolitical tensions will force on Chile’s mining sector
  • Atalaya Mining stock rises on potential discoveries from regional exploration in Spain
  • Nickel firm Lygend looks to raise $470m in Hong Kong listing

UK, South Africa seek deeper cooperation on critical minerals

London and Pretoria announced a partnership to promote the responsible exploration, development, production, and processing of critical minerals in South Africa.

Braggite ((Pt,Pd,Ni)S) in sulfidic serpentinite -platinum-palladium ore

In a media statement, both governments said that this new collaboration will start with the launching of regular ministerial and technical dialogues between South Africa’s Department for Mineral Resources and Energy and the UK’s Department for Business, Energy and Industrial Strategy.

“South Africa is a leading producer of minerals including platinum, palladium and iridium for hydrogen production and vanadium and manganese for battery storage,” the release points out. “Cooperation will help to support investment into exploration, production and beneficiation activities, securing and expanding access to minerals that are key for clean industrial and economic development and the global clean energy transition.”

South Africa is responsible for 60% of the global manganese supply, 75% of the platinum supply and 40% of the palladium supply. It also produces or has the potential to produce, vanadium, nickel, cobalt and rare earth elements.

Thus, in addition to boosting the mining sector, the UK and South Africa plan to work together to identify and carry out joint projects aimed at developing clean energies and technologies such as battery storage, fuel cell technologies, energy efficiency and renewable energy solutions.

“This joint work aims to create an enabling environment for promoting participation of private sector companies, support investment flows into the minerals mining sector and grow new clean jobs, noting that the UK is a leading centre of mining finance, standards, and metals trading,” the communiqué reads. “Both countries will encourage and support partnerships between UK and South African companies across the value chain for minerals and clean energy to grow and strengthen business links to the benefit of both economies.”

Condor Gold puts La India project in Nicaragua up for sale

La India open pit gold project in Nicaragua.

Condor Gold (LON: CNR) (TSX: COG) has decided to put its flagship La India open pit gold project in Nicaragua up for sale, preferably to a gold producer with mine building expertise.

The miner said the board reviewed the company’s options, including going through a financing and construction phase as a single-asset, single-jurisdiction company with no existing gold production.

Condor concluded, however, that it is in the best interests of the company and all stakeholders to offload its assets, and it has hired Hannam and Partners to assist with the sale.

The company completed in October a definitive feasibility study for La India, which confirmed the plan to build a mine in two stages, with two additional permitted high-grade feeder pits that can be added during the early years of production.

The study also demonstrates La India has the capacity to produce an average of 81,524 ounces gold per annum for the initial 6 years of its 8.4 year mine life at a relatively low total upfront capital cost of $106 million, chief executive Mark Child said.

The two additional feeder pits can boost early production to over 100,000 ounces gold a year, with a stage 2 expansion to 150,000 ounces of gold per annum, he said.

India’s Jindal wins bid to build Botswana’s 300 MW coal power plant

GABORONE, Nov 21 (Reuters) – Botswana has picked India’s Jindal Steel & Power Ltd (JNSP.NS) as the preferred bidder in a tender to build a 300 megawatt (MW) coal-fired power plant, a notice from its energy ministry showed on Monday.

It is the only fossil fuel-based power plant the Southern African country plans to procure in the next 20 years.

Four companies were initially short-listed for the contract but one pulled out leaving Jindal, African Energy Resources and Minergy (MIN.BT) in a three-way race.

Botswana has over 200 billion tonnes of coal resources and despite recent pressure on coal due to climate change, the diamond-dependent country is pressing ahead with monetising its coal for economic development.

“The contract (is) for the design, finance, construction, ownership, operation, maintenance and decommissioning at the end of its economic life of a 300MW net greenfield coal-fired power plant in Botswana as an Independent Power Producer,” the notice read.

Jindal will finance construction of the plant and recoup its investments from selling electricity to the Botswana Power Corporation (BPC) under terms to be negotiated between the two parties.

State owned Morupule Coal Mine and Minergy’s Masama are the country’s only operating coal mines.

Jindal Botswana country head Neeraj Saxena did not respond to enquiries but the company told Reuters in November 2021 that it would start building a coal mine in south-eastern Mmamabula coalfields in 2022, aiming to supply the export market and the planned coal power plant.

Australia to become ‘more assertive’ on foreign investment in critical minerals

Top lithium supplier Australia is set to become more selective about who it lets invest in its growing critical minerals industry, Treasurer Jim Chalmers said on Friday.

Australia, a major supplier of minerals key to the energy transition like rare earths, has more to gain by encouraging investment from allies to build up its minerals processing industry, Chalmers said at a conference in Sydney.

“Foreign investment is a good thing when it’s in our national interest,” Chalmers said.

“But as investment interest grows, and as the sources of that investment interest grow, we’ll need to be more assertive about encouraging investment that clearly aligns with our national interest in the longer term.”

Chalmers stopped short of announcing any review of existing international holdings of operations, after Canada ordered three foreign firms to divest from its critical minerals sector earlier this month.

The Labor government which took power in May is buttressing Australia’s policy to build out a critical minerals processing supply chain.

Federal investment is already helping to construct a processing plant run by Iluka Resources as part of its A$2 billion critical minerals facility.

Resources Minister Madeleine King in a separate speech flagged recent developments in Australia’s burgeoning critical minerals processing industry.

The strategy will provide friendly nations with an alternative at a time when Russia’s invasion of the Ukraine has underlined the strategic risks of having a dominant supplier, Chalmers said.

Govt Planning To Sell Small Stakes Of Coal India, Hindustan Zinc: Report

The central government is planning to sell small stakes in PSUs, including Coal India Ltd., Hindustan Zinc Ltd., Rashtriya Chemicals, and Fertilizers Ltd, to boost revenue in the final quarter of this financial year, reported Bloomberg. The report citing sources privy to the matter said that the government plans to profit from the stock market boom.

A total of five firms could be listed. With Coal India Ltd., Hindustan Zinc Ltd., Rashtriya Chemicals and Fertilizers Ltd., a listed entity under the railway ministry could also be chosen. Center is looking to sell 5 per cent-10 per cent of shares via the so-called offer-for-sale mechanism, the report said. Though the details are not in the public domain yet.

According to Bloomberg calculations, even at the lower end of the range, the sale could bring in around Rs 165 billion ($2 billion) for the government. With a healthy pace of economic growth, local shares are currently at a record high. This sale can help the government fund its subsidy bill which has surged partly because of the war in Ukraine.

In May, the government raised $2.7 billion from the initial public offering (IPO) of Life Insurance Corporation (LIC). Though it had estimated to earn Rs 650 billion from stakes sales of PSUs this financial year. The report said that the roadshows have started to gauge investor interest in stake sales.

In the past year, Coal India’s shares have gained about 46 per cent and Rashtriya Chemicals’ shares gained 58 per cent. Coal India Ltd is the world’s biggest coal miner and Hindustan Zinc Ltd is asia’s largest zinc producer. In July this year, the Centre reportedly called bids from merchant bankers to assist the government in selling its 29.5 per cent residual stake in Hindustan Zinc.

The hard choices geopolitical tensions will force on Chile’s mining sector

Chile’s mining industry is set to benefit from a boom in demand for minerals such as copper and lithium, triggered by decarbonization efforts, but it will also have to grapple with maintaining supply.

“The dependence on minerals in the new green economy will undoubtedly increase demand and create new needs,” Dorotea López, director of Universidad de Chile’s international studies institute, told BNamericas.

Mining exports accounted for 59% of Chile’s total exports in January-October, reaching US$49.1bn. China was the main destination, but the North America and EU are also seeking to secure supplies. Lithium carbonate exports increased by 784%, or by US$5.48bn, compared with the first 10 months of 2021, with 78% of them going to China.

“Analyzing the future of the Asian country in the economic scenario and reducing dependence on the export basket aimed at a single country is essential in the development processes of the economy, and especially for green growth,” said López.

China is also the main buyer of Chilean copper and accounts for 75% of global demand, according to copper commission Cochilco. However, Chilean copper exports fell 16.3%, or by US$7.07bn, compared with January-October 2021.

At the recent Apec summit in Thailand, President Gabriel Boric talked to his Chinese counterpart Xi Jinping and affirmed Chile would remain neutral, despite having received pressure to choose between the US and China, local media reported.

In February, the US launched a green energy strategy, mentioning China’s dominance in lithium and cobalt refining, essential for battery production, and in rare earth magnet manufacturing, which is necessary for wind turbines.

Tensions over technology have been rising for a while, but the war in Ukraine and supply chain interruptions have increased them further. “We’re talking about a crisis that multilateralism is facing, or about the fatigue of globalization,” López said.

Atalaya Mining stock rises on potential discoveries from regional exploration in Spain

Atalaya Mining (TSX: AYM) shares took off on Friday morning following the latest update on its regional exploration program in southern Spain, which included a potential new massive sulphide discovery and new high-grade zone at the Proyecto Masa Valverde (PMV) project.

Drilling along the Mojarra trend at PMV has resulted in a potential discovery was made via intersection of 18.75 metres of polymetallic massive sulphides from the second hole in a previously undrilled area, grading 0.84% copper, 0.63% zinc, 0.66% lead and 76.24 g/t silver. This intersection included a higher-grade zone of 6.8 metres at 1.22% copper and 101.60 g/t silver.

Step-out drilling in the western area of the Masa Valverde deposit also led to the discovery of a new high-grade zinc zone, including a main mineralized interval of 18 metres at 0.25% copper, 8.30% zinc, 2.49% lead, 60.17 g/t silver and 0.89 g/t gold (4.06% copper-equivalent). This zone remains open laterally.

“The discovery of the Mojarra trend is very promising and demonstrates the value of the systematic exploration approach being implemented by our geological team,” CEO Alberto Lavandeira commented in Thursday’s press release.

Atalaya acquired PMV in 2020, having discovered the small but high-grade polymetallic Majadales deposit, and in April 2022 published a new NI 43-101 resource estimate for the Masa Valverde and Majadales deposits.

Since then, the company has defined new, shallow and potentially economic mineralization at the Campanario trend, and have now made a potentially new discovery at the previously undrilled Mojarra trend.

“All of these achievements, together with the numerous geophysical targets that remain untested, confirm our belief that the ultimate resource potential of PMV is underexplored and far from defined,” Lavandeira said.

At the Campanario trend, resource definition also encountered new zones of shallow polymetallic mineralization, including 7.5 metres at 0.45% copper, 1.09 g/t silver and 6.67 g/t gold from 35 metres, and 9.8 metres at 0.44% copper, 8.16 g/t silver and 0.15 g/t gold from 11 metres.

These drill holes are located west and east of the historical Campanario mine, where previous drilling defined shallow higher-grade zones. Additional drilling around the Campanario mine has confirmed the continuity of the previously defined mineralization.

Nickel firm Lygend looks to raise $470m in Hong Kong listing

Chinese nickel producer and trader Lygend Resources & Technology plans to raise $470m through its initial public offering (IPO) in Hong Kong, reported Reuters citing two people privy to the development.

The firm has sold 232.54 million shares in the IPO, at HK$15.80 a share.

This marks Hong Kong’s fourth largest IPO so far this year.

Lygend intends to use 56% of the proceeds to develop the HPAL nickel hydrometallurgy project in Indonesia, stated the news agency.

Being developed in phases on Obi Island, the HPAL project aims to have an aggregate annual production capacity of 120,000 metal tonnes of nickel-cobalt compounds, including 14,250 metal tonnes of cobalt. 

The project will be equipped to produce nickel-cobalt compounds, including mixed hydroxide precipitate (MHP), nickel sulfate and cobalt sulfate.

On 14 November 2022, Lygend commissioned two nickel-cobalt compound production lines as part of phase one of the HPAL project.

All the production lines of the HPAL project are expected to be commissioned by the fourth quarter of 2023.

Lygend shares are scheduled to start trading on 1 December 2022.