November Newsletter – 14.11.2022

  • Rare Earths And Hydrogen At The Core Of New EU-Kazakhstan Trade Deals
  • Cameco signs uranium deal with China Nuclear
  • Africa moving very slowly toward clean energy transition – report
  • France puts future of deep sea mining in doubt
  • Australia extends $165 million in loans to local lithium miner
  • Ford, GM in talks with Posco Chemical on battery metal hubs
  • India to be self-sufficient in thermal coal output by FY25: Pralhad Joshi
  • Empty iron ore ships switch to coal to survive China’s slump

Rare Earths And Hydrogen At The Core Of New EU-Kazakhstan Trade Deals

  • On November 7 the European Commission signed an agreement with Kazakhstan’s government to develop supplies of green hydrogen and raw materials.
  • Efforts are under way to develop the “Middle Corridor” supply route, bypassing Russia and going across the Caspian Sea, but removing bottlenecks will take several years.
  • Critical raw materials identified by the EU include rare earth magnates, for wind turbines; lithium and cobalt, for batteries; and polysilicon, for semiconductors.

Europe has turned its sights on distant Kazakhstan as it casts around for supplies of rare earth metals and clean hydrogen to meet its green economy targets.

On November 7 the European Commission signed an agreement with Kazakhstan’s government to develop supplies of green hydrogen and raw materials to manufacture equipment such as wind turbines and batteries for electric cars.

The memorandum of understanding, signed on the sidelines of the COP27 climate change conference in Egypt, will “boost the green and digital transformation of both sides’ economies,” the commission said.

“A secure and sustainable supply of raw materials, refined materials and renewable hydrogen is a key layer to help build a new, cleaner foundation for our economies, especially as we move away from our dependency on fossil fuels,” European Commission President Ursula von der Leyen said.

“Together, we will work to better integrate our strategic value chains related to raw materials, to batteries and to renewable hydrogen,” she added.

Meeting green and digital economy goals “requires an appropriate amount of specific raw materials, and in particular minerals of which Kazakhstan is so rich,” von Der Leyen continued. “So raw materials and renewable hydrogen are not only essential building blocks for our sustainable future but also for our shared prosperity.”

Cameco signs uranium deal with China Nuclear

Cameco (TSX: CCO), based out of Saskatoon, has announced that it signed a uranium apply agreement with China Nuclear International Corporation, a subsidiary of the China National Nuclear Corporation.

The contract, finalized earlier this year, was signed as part of the China International Import Expo 2022. Terms and details of the supply agreement are commercially confidential and will not be disclosed publicly. The contract volumes comprise part of the 50 million lb. that Cameco has added to its long-term uranium contract portfolio so far this year.

“China is counting on nuclear energy to play a major role in its commitment to achieve net-zero emissions, and CNNC is a large and growing part of that effort,” said Cameco president and CEO Tim Gitzel. “Cameco is very pleased to continue increasing our contribution towards the attainment of China’s important climate goals.”

Africa moving very slowly toward clean energy transition – report

Africa’s investments in renewables trail far behind the rest of the continents, accounting for only 0.6% of the $434 billion destined for clean energy worldwide in 2021, a recent report by BloombergNEF shows.

Amogdoul wind farm in Essaouira, Morocco

According to the market analyst, despite Africa’s natural resource wealth, rapidly growing electricity demand and improving policy frameworks, only $2.6 billion of capital was deployed for new wind, solar, geothermal or other renewable power-generating projects in 2021, the lowest in 11 years.

The figures are particularly relevant at a time when the 2022 United Nations Climate Change Conference or Conference of the Parties (COP27) is taking place in Egypt, offering an opportunity to take stock of how far the continent’s energy transition has advanced – and how much work remains to be done.

BNEF’s document states that Africa’s poor results cannot be blamed on any lingering effects of the covid-19 pandemic, particularly when taking into account that while renewables investment globally rose 9% from 2020 to 2021 to reach an all-time high, renewables investment in Africa slipped 35% year-on-year.

France puts future of deep sea mining in doubt

Citing climate change, France on Thursday called for an international ban on deep sea mining, upending negotiations by a UN-affiliated organization to allow the exploitation of unique ocean ecosystems for valuable metals to begin within two years.

“As the effects of climate change become increasingly threatening and the erosion of biodiversity continues to accelerate, today it does not seem reasonable to hastily launch a new project, that of deep seabed mining, the environmental impacts of which are not yet known and may be significant for such ancient ecosystems which have a very delicate equilibrium,” French Ambassador Olivier Guyonvarch told the International Seabed Authority at a meeting of its policymaking Council in Kingston, Jamaica.

The United Nations Convention on the Law of the Sea treaty established the ISA in 1994 to regulate mining in international waters while at the same time ensuring the protection of the marine environment. After years of negotiations to develop mining regulations, ISA member nation Nauru in 2021 triggered a provision in the treaty that requires the Council to approve those regulations within two years.

Otherwise, the Council may be compelled to provisionally approve an application for mining by The Metals Company, a Canadian-registered seabed mining venture sponsored by Nauru, a tiny Pacific island nation. Nauru, like other ISA member states that sponsor mining contractors, would receive royalties from any seabed mining.

Australia extends $165 million in loans to local lithium miner

Australia will provide up to A$250 million ($164.95 million) in long-term financing to support the expansion of a Pilbara Minerals hard rock lithium mine in Western Australia state.

The 10-year debt facility will go toward expanding mining and processing at the Pilgangoora project, which sits on one of the world’s largest lithium ore deposits, according to the company’s website.

“The global path to net zero runs through the Australian resources sector and producing battery materials is a vital contributor to a lower carbon economy,” resources minister Madeleine King said in a statement.

Roughly 40% of the funds will go to adding 100,000 tons per year of spodumene concentrate production at the miner’s Pilgan plant. The remainder will go to replacing a crushing and ore sorting facility and funding future expansions.

The facility consists of two loans — A$125 million from Export Finance Australia and A$125 million from the Northern Australia Infrastructure Facility (NAIF). The latter is subject to final approval from the Western Australian state government.

“We look forward to continuing to work with the Australian Government as we pursue our growth and diversification strategy to further realise our ambition to become a fully integrated, sustainable battery materials supplier,” said chief executive Dale Henderson in a statement posted to the stock exchange.

Ford, GM in talks with Posco Chemical on battery metal hubs

POSCO processes lithium phosphate from SungEel to produce lithium carbonate for rechargeable battery makers LG and Samsung

Ford Motor Co., General Motors Co., and Stellantis NV are in talks with South Korea’s Posco Chemical Co. about potentially investing in plants producing electric-vehicle battery materials in North America, according to people familiar with the matter.

The factories would make cathode-active or anode materials — key ingredients for determining the energy density of lithium-ion batteries used in cars — said the people, asking not to be identified because the discussions are private. The talks are preliminary and may not necessarily lead to a deal, according to the people. Posco Chemical is also talking to other automakers about similar investments, they added.

A spokesperson for Posco Chemical declined to comment, while representatives for Ford, Stellantis, and GM all declined to comment.

Posco Chemical’s Chief Executive Officer Min Kyung-zoon told reporters on Nov. 1 that the Korean company is in talks with three carmakers to build battery-materials plants in the US, without naming them. It already has a relationship with GM, in July signing a $10.8 billion deal to supply battery materials, bringing the total value of its contracts with the US carmaker to almost $17 billion.

India to be self-sufficient in thermal coal output by FY25: Pralhad Joshi

Union coal minister Pralhad Joshi on Wednesday exuded confidence that the country would be largely self-sufficient in thermal coal production by the financial year 2024-25.

“We will be largely self-sufficient in thermal coal production by 2024-25 and the country will not face any problem in the thermal energy sector,” Joshi said while interacting with the media during the investors’ conclave on ‘opportunities in the coal sector’.

He said that in the sixth phase, commercial auction is being conducted for 141 coal mines across the country, including 28 blocks of Madhya Pradesh.

According to the minister, for the first time in the country’s history, such a large number of coal blocks are being auctioned.

He said that the government is expected to get a revenue of Rs 25,000 crore from this auction, while two lakh people will get employment after the start of production.

Joshi appealed to the investors to actively participate in the coal mine auction.

Empty iron ore ships switch to coal to survive China’s slump

Cargo ships suffering from weak Chinese demand for iron ore are finding a more lucrative alternative as the global energy crisis spurs a greater need for coal.

Miners and traders are slashing shipments of iron ore, the second-most widely traded seaborne commodity, and re-assigning their bulk carriers to highly unusual coal routes to prop up earnings. More vessels are ferrying the fuel from Russia to China and from Australia to Europe, according to owners, brokers and traders.

The cargo switching comes as a deepening crisis in China’s housing market is dousing hopes of a demand recovery in iron ore. Meanwhile, coal has seen a resurgence after Moscow’s invasion of Ukraine forced countries to replace Russian gas.