October Newsletter – 29.10.19
ANNOUNCEMENTS
NEWSLETTER
- Seven Mining, Metals Companies Partner on Responsible Sourcing with World Economic Forum
- China leads the race to exploit deep sea minerals — UN body
- 4 Reasons The Developed World Is In Big Trouble With Critical Minerals
- Barrick CEO Sees Zambia Mine Worth More Than $735 Million
- Mining giant Rio Tinto nets China ore pact
- Metals sector in costly battle to turn green
- Rio Tinto starts producing lithium in California from old mining waste
- Vale Canada enlists GoldSpot for Sudbury exploration
TOP NEWS
Seven Mining, Metals Companies Partner on Responsible Sourcing with World Economic Forum
Leading mining and metals companies have joined forces to accelerate responsible sourcing of raw materials with the World Economic Forum.
The Mining and Metals Blockchain Initiative will explore the building of a blockchain platform to address transparency issues, the track and tracing of materials, the reporting of carbon emissions or to increase efficiency.
Antofagasta Minerals, Eurasian Resources Group Sàrl, Glencore, Klöckner & Co, Minsur SA, Tata Steel Limited, Anglo American/De Beers (Tracr), are founding members.
Geneva, Switzerland, 25 October 2019 – Seven leading mining and metals companies have partnered with the World Economic Forum to experiment, design and deploy blockchain solutions that will accelerate responsible sourcing and sustainability practices.
The Mining and Metals Blockchain Initiative will pool resources and cost, increase speed-to-market and improve industry-wide trust that cannot be achieved by acting individually. It aims to be a neutral enabler for the industry, addressing the lack of standardization and improving efficiency. The intention is to send out a signal of inclusivity and collaboration across the industry. The group will look to develop joint proof-of-concepts for an inclusive blockchain platform. Over time, this could help the industry collectively increase transparency, efficiency or improve reporting of carbon emissions.
In many cases, blockchain projects to support responsible sourcing have been bilateral. The result has been a fractured system that leaves behind parts of the ecosystem and lacks interoperability. This new initiative is owned and driven by the industry, for the industry. Members will examine issues related to governance, develop case studies and establish a working group.
Key areas of collaboration and development could include carbon emissions tracking and supply chain transparency. They will work to use blockchain technology to increase trust between upstream and downstream partners, to address the lack of industry standardization and to track provenance, chain of custody and production methods.
“Material value chains are undergoing profound change and disruption”, said Jörgen Sandström, Head of the Mining and Metals Industry, World Economic Forum. “The industry needs to respond to the increasing demands of minerals and materials while responding to increasing demands by consumers, shareholders and regulators for a higher degree of sustainability and traceability of the products.”
The World Economic Forum has offered its platform and expertise to help industry leaders better understand the impact and potential of blockchain technology. It will provide guidance on governance issues related to the delivery of a neutral industry platform and the expansion of members.
Quotes from the industry:
“We hope this collaboration and pilot will give us practical examples of how blockchain can increase efficiency of the supply chain management and improve interoperability; address certain supply chain management risks such as transparency and consumer trust; and unlock opportunities including integration of key data such on environmental impact such carbon emissions”, said Ivan Arriagada, CEO of Antofagasta Minerals.
“This initiative responds to a cross-industry desire to collaborate around blockchain technology in efforts to enhance responsible sourcing,” said Benedikt Sobotka, CEO of Eurasian Resources Group. “By working together, our goal is to develop solutions that can be adopted across the industry and value chain.”
“The mining and metals industries produce the commodities required to advance everyday life,” said Ivan Glasenberg, CEO of Glencore International AG. “We welcome the development of technology that can facilitate industry reporting to improve compliance across the supply chain.”
“We need more collaboration in our industry to address supply chain transparency and inefficiencies,” said Gisbert Rühl, CEO of Klöckner & Co. “This blockchain consortium – with collaboration between forwarding thinking companies, and regulators, NGOs and technology providers – with blockchain and distributed ledger technology has a great potential for industry adoption and value creation.”
“As a responsible player in the mining and metals industry, we are committed to build a sustainable future,” said T.V. Narendran, CEO of Tata Steel Limited. “We believe enhanced collaboration across the industry to facilitate collective action, leveraging technology to reduce emissions, and conserving the environment is imperative and critical in our journey towards attaining a carbon-neutral future.”
“We look forward to collaborating with the consortium as Tracr begins to roll-out its connected supply chain platform for the diamond industry,” said Jim Duffy, CEO of Tracr (representing Anglo American/De Beers). “Lessons learned creating Tracr are highly relevant to the sustainable sourcing of all mining and metals.”
“The distributed nature of blockchain technology makes it the ultimate networked technology,” said Nadia Hewett, Blockchain Project Lead, World Economic Forum. “Forward-thinking organizations are starting to understand the disruptive potential of blockchain to solve pain points, but are now also recognizing that industry-wide collaboration around blockchain is necessary.”
Competitors within the same industry who research and experiment with blockchain or distributed ledger technology are increasingly exploring consortium formation to accelerate and strengthen blockchain technology knowledge and potential research and development. This trend is reflected in the Deloitte Global Blockchain survey published in May, where the overwhelming majority (92 percent) of respondents say they either belong to a consortium or plan to join one in the next 12 months.
China leads the race to exploit deep sea minerals — UN body
OSLO (Reuters) – China is likely to become the first country in the world to start mining seabed minerals if the international rules for exploitation are approved next year, the head of the International Seabed Authority (ISA) said.
The quest for exploiting seabed minerals, such as polymetallic nodules containing nickel, copper, cobalt and manganese is driven by demand for smart phones and electric car batteries, and the need to diversify supply.
The ISA has already signed 30 contracts with governments, research institutions and commercial entities for exploration phase, with China holding the most, five contracts.
IF THE RULES ARE APPROVED, IT COULD TAKE ABOUT TWO TO THREE YEARS TO OBTAIN PERMITS TO START DEEP SEA MINING UNDER THE CURRENT DRAFT
The body, which was established to manage the seabed resources by the United Nations Convention on the Law of the Sea (UNCLOS), is aiming to adopt seabed mineral exploitation rules by July 2020.
“I do believe that China could easily be among the first (to start exploitation),” Michael Lodge, ISA general-secretary, who visited China last week, said.
“The demand for minerals is enormous and increasing, there is no doubt about the market.”
There is also interest from European countries including Belgium, Britain, Germany and Poland, as well as from the Middle East.
However, no one has yet demonstrated that deep sea mining can be cost effective and some non-governmental organisations have questioned whether it would be possible to reach a deal on exploitation rules next year.
“I think, it’s pretty good. I think the current draft is largely complete,” Lodge said, when asked about prospects of adopting the rules by next July.
One of the issues yet to be agreed is proportionate financial payments to the Jamaica-based ISA for subsea mineral exploitation outside national waters.
“We are looking at ad valorem royalty that would be based on the value of the ore at a point of extraction … The middle range is 4% to 6% ad valorem royalty, potentially increasing over time,” Lodge said.
If the rules are approved, it could take about two to three years to obtain permits to start deep sea mining under the current draft, Lodge said.
Canadian Nautilus Minerals had tried to mine underwater mounds for copper and gold in the national waters off Papua New Guinea, but it run out of money and had to file for creditor protection earlier this year.
This has not deterred others, such as Global Sea Mineral Resources (GSR), a unit of Belgian group DEME, and Canada’s DeepGreen, to continue technology tests and research.
In July, Greenpeace called for an immediate moratorium on deep sea mining to learn more about its potential impact on deep sea ecosystems, but the ISA has rejected such a proposal.
(By Nerijus Adomaitis and Barbara Lewis; Editing by Alison Williams)
COMMODITIES
4 Reasons The Developed World Is In Big Trouble With Critical Minerals
Jeff McMahon, Forbes
The world’s richest countries are realizing how poorly equipped they are to access the critical minerals needed for emerging technologies, especially renewable energy, energy storage, electrification, and smart devices.
But they may not yet realize the implications, according to Michelle Michot Foss, the fellow in energy and minerals at Rice University’s Baker Institute, including disruption of the falling cost curves that advocates of renewables and storage love to display.
“We’re in a very slow realization… that the US and and the OECD in general are not very well positioned on all of this,” Foss said this month during a Baker Institute conference on the energy transition. “We barely have a mining industry in the U.S. today versus when I was a young professional starting out.”
Even redeveloping a mining industry would not be enough of a solution, she added.
The 36 member states of the Organisation for Economic Co-operation and Development (OECD) tend to be free-market, developed economies that have moved away from mineral extraction or, in some cases, have depleted their resources.
FINANCIAL
Barrick CEO Sees Zambia Mine Worth More Than $735 Million
- There’s no rush to sell the Lumwana operation, Bristow says
- Mine isn’t selling production due to smelter maintenance
LUSAKA – Barrick Gold believes its Zambian copper mine is worth more than the $735-million carrying value listed in its latest annual report.
CEO Mark Bristow said he’s received interest from potential buyers of the mine, called Lumwana, but isn’t in a hurry to sell it. Bristow disputed a report that it would start the disposal process in January.
“We believe it’s got substantially higher value,” he said in a phone interview. “That’s the past. We have and we continue to improve the business.”
Lumwana has attracted interest from companies including China Minmetals, Jiangxi Copper and Zijin Mining Group, people familiar with matter said earlier this month.
Bristow declined to comment on the names, only saying “we have had expressions of interest.”
The company, the world’s second-biggest gold producer, has had a tough time with Lumwana. It bought the operation as part of a $7-billion deal two months after copper prices peaked in 2011.
Two years later, Barrick had written down the asset by $3-billion. The company has dealt with frequent tax changes and power shortages in Zambia, Africa’s second-biggest copper producer.
Since taking over as Barrick CEO in January, Bristow has replaced management at Lumwana, where the company plans to produce 210-million to 240-million pounds this year. The operation produced 224-million pounds last year, making it one of the biggest producers in Zambia.
Mining giant Rio Tinto nets China ore pact
The move is likely a trial for the buyer as it is only purchasing SP10 products rather than its main PB powder and blocks, analysts say.
Rio Tinto Group, a British-Australian behemoth in the global mining industry, has signed its first yuan-denominated purchase contract as China looks to internationalize its currency and move more Chinese steel overseas, Yicai Global reported.
London- and Melbourne-based Rio agreed to buy 170,000 tons of SP10 iron ore from Shanxi Gaoyi Steel, Shanghai Securities News reported today. It will collect the ore from Rizhao Port in Shandong province, the report said.
The move is likely a trial for the buyer as it is only purchasing SP10 products rather than its main PB powder and blocks, said Wang Yangwen, a global analyst at Standard & Poor’s Financial Services.
https://www.asiatimes.com/2019/10/article/mining-giant-rio-tinto-nets-china-iron-ore-pact/
INNOVATION AND TECHNOLOGY
Metals sector in costly battle to turn green
LONDON (Reuters) – Metals producers, from miners to smelters, are grappling with increasingly tough and costly environmental demands imposed by banks seeking cleaner investments.
While the transition may prove overwhelming for smaller producers, larger companies are playing a long game, casting ahead to a period where greener technology helps slash their costs.
Sustainability has been a long-standing issue in metals, covering a wide range of issues including corruption, board structure, jobs, communities around mines and mine waste.
But environmental concerns have moved to the top of the agenda in recent years with heightened awareness of climate change amid public protests.
Metals and mining are responsible for 10% of the total impact on climate change, according to the United Nations Environment Programme.
“We’re turning down lots of stuff. Being green is a precondition for lending,” said Laurent Charbonnier, global head of metals and mining at HSBC (HSBA.L), speaking ahead of LME Week when the world’s metal industry gathers in London.
Rio Tinto starts producing lithium in California from old mining waste
Rio Tinto Group is starting pilot production of lithium in California, sifting through old mining waste instead of excavating new areas, as the electric car battery revolution fuels demand for the material.
Work to reprocess waste piles from a 90-year-old mining site in the Kern County community of Boron has produced lithium carbonate — needed in rechargeable batteries for electric vehicles and consumer technology, Rio said this week. Efforts are now focused on improving quality and lifting volumes, the company said.
A pilot plant being assembled at Boron under a $10-million first phase is expected to produce about 10 metric tons a year of lithium carbonate equivalent by chemically processing material from the pile of mining waste.
The company will consider expanding to become the top domestic supplier in the United States.
Boron is part of a unit in California’s Death Valley that has produced borates — materials used in such items as laundry soap and nuclear reactor components — since 1872. There are at least 80 minerals to be found in material from the site, and staffers had initially been combing the waste for gold and other elements when they discovered lithium, according to Rio.
Rio, the world’s No. 2 miner, will next consider a $50-million investment to build an industrial-scale lithium plant with capacity for 5,000 tons a year that could be sold to battery makers. That volume would be enough to make batteries for about 15,000 of electric automaker Tesla Inc.’s Model S cars, the company said.
“If the trials continue to prove successful, this has the potential to become America’s largest domestic producer of battery-grade lithium — all without the need for further mining,” Bold Baatar, chief executive of Rio’s energy and minerals division, said in a statement. Currently the only supplier in the United States is Albemarle Corp.’s Silver Peak operation in Nevada, according to the U.S. Geological Survey.
PROJECTS
Vale Canada enlists GoldSpot for Sudbury exploration
Vale Canada has engaged Toronto-based artificial intelligence mine-tech company GoldSpot Discoveries to use machine learning to identify new drilling targets at the Coleman mine, part of its base metals operations in Canada’s nickel hub at Sudbury, Ontario.
GoldSpot said its team of geologists and data scientists would apply machine learning to sift through the “tremendous amount of data” it had collected at Coleman over several decades. The team will look at the entire database to find “previously unrecognised data trends” to find new discoveries at depth.
GoldSpot said its technology would help cut drilling costs and reduce exploration risk.
The company would employ geoscience and its machine science expertise to “clean, unify and analyse” exploration data from Coleman, which would then render 3D targets for Vale’s exploration programme. GoldSpot will also deliver new geophysical products produced through reprocessing the borehole EM to detect sulphides and new simplified lithological interpretations and models.
“Vale is one of the world’s largest nickel producers and the Coleman mine is a major operation in Ontario,” said GoldSpot CEO Denis Laviolette.
“To be part of the digital transformation of one of the world’s leading diversified miners is an incredible opportunity for our company. At GoldSpot, we are excited to put our technology and team into action on a copper, nickel and precious metals deposit.”
COMMODITY PRICES
