October Newsletter – 29.10.2021


  • Sibanye-Stillwater buys nickel-copper mines in Brazil for $1 billion
  • Europe’s magnesium crunch poses another carbon conundrum
  • Botswana delivers first iron ore exports to China
  • China agrees on plan to cap coal price to ease power crisis
  • Overall gold consumption rises in China
  • Pilbara Minerals finalises joint venture with Posco to participate in downstream Lithium Chemicals Facility
  • Research explores how to turn copper waste into cobalt
  • Resource nationalism on the rise in top mining countries — report
  • Mongolia is concerned about Rio Tinto’s management of Oyu Tolgoi

Sibanye-Stillwater buys nickel-copper mines in Brazil for $1 billion

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The Santa Rita nickel mine in Brazil

South Africa-based Sibanye-Stillwater (JSE: SSW) (NYSE: SBSW) is buying two nickel and copper mines in Brazil from private equity firm Appian Capital Advisory in a $1 billion deal that boosts the company’s growing battery materials portfolio.

The acquisition of Atlantic Nickel and Mineração Vale Verde from Appian is Sibanye’s fourth battery metal investment this year, and follows a buy in September of a 50% stake in ioneer Ltd’s (ASX: INR) lithium-boron project in Nevada. 

The precious metals miner said the transaction also includes a 5% net smelter return royalty (NSR), valued at about $218 million, over potential future underground production from Santa Rita, which CEO Neal Froneman said is one of the world’s ten biggest open-pit nickel sulfide assets.

Appian is keeping its investment exposure to the upside potential of both assets trough NSRs, equivalent to a 35% stream on gross gold revenues in the case of Mineração Vale Verde, as well as by retaining 100% ownership of the Pereiro Velho gold exploration property post-acquisition, the London-based firm said in a separate statement.

“The transaction represents a unique opportunity for Sibanye-Stillwater to acquire significantly pre-developed and pre-capitalized, low-cost, producing nickel and copper assets,” Froneman said.


Europe’s magnesium crunch poses another carbon conundrum

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EcoMag plans to extract hydrated magnesium carbonate from waste-water from Dampier Salt’s facility, pictured here. Photo by Rio Tinto.

(The views and opinions expressed herein are the views and opinions of the author, Andy Home, a columnist for Reuters.)

Magnesium is not what most people think of as a critical mineral.

But the human body doesn’t work without it, the United States Food and Drug Administration recommending a minimum daily intake of 420 milligrams.

And a broad spectrum of manufacturing activity can’t work without it either, as the European Union (EU) is fast finding out.

Europe is facing a magnesium crunch, threatening output and jobs in the steel, packaging, construction and automotive sectors.

The European Commission is holding talks with China, its dominant supplier, both about “immediate shortages” and “long-term solutions to tackle this strategic dependency.”

China supplies 95% of Europe’s magnesium demand, which last year totalled around 155,000 tonnes.


Botswana delivers first iron ore exports to China

Botswana’s first iron ore mine, Ikongwe, has started production and delivered its maiden exports to China, a company official told Reuters on Tuesday, as the Southern African country makes headway in efforts to diversify its economy away from diamonds.

Although diamond mining’s contribution to GDP has declined over the years and was less than 20% last year, Botswana is still heavily reliant on the precious stones, with diamonds accounting for more than 70% of foreign currency revenues.

The first exports from the Ikongwe mine, owned by Vision Ridge Investments, a unit of India’s Yashomann Industries, reached China in September.

“We have an order of 50,000 tonnes per month from a state-owned steel manufacturing company there,” Vision Ridge director Chetan Patil said.

Vision Ridge aims for Ikongwe to produce one million tonnes of iron ore per year over an initial 10-year lifespan, with a grade of up to 65%.

The exports currently go via South Africa, in containerised shipments, but Vision Ridge is in talks with Botswana Railways to organise bulk shipments through Mozambique’s port of Maputo, Patil said.


China agrees on plan to cap coal price to ease power crisis

CHINA plans to limit the price miners sell thermal coal for as it seeks to ease a power crunch that’s prompted electricity rationing and even caused a blackout in a major city in September.

Beijing aims to set the price of its most-popular 5,500-NAR grade coal at 440 yuan (S$92.90) a tonne at the pithead, according to people familiar with the situation, who asked not to be identified as they are not authorised to speak publicly.

That price, which includes taxes, is a target rate, and there will be an absolute ceiling at 528 yuan.

The plan, which is scheduled to last until May 1 next year, is pending approval by the State Council, and could be revised.

Beijing also wants downstream sales prices to be controlled, though it will let local governments set standards to limit the price of local coal trading, the people said.


Overall gold consumption rises in China

China’s gold consumption in the first nine months of 2021 rose a massive 48.4% on the year to 813.59 tonnes, according to the China Gold Association. This came as demand recovered from a pandemic-affected 2020. The figure implies third-quarter consumption of 266.54 tonnes, up 18.5% from a year earlier.

In terms of the supply-demand balance, gold production in the period from January to September fell 10% from a year earlier to 236.75 tonnes, the association said in a statement. This was said to be due to intense safety inspections in Shandong, China’s top gold-producing province. Shandong Gold Mining, one of China’s biggest gold miners, attributed a 1.3 billion yuan ($203 million) net loss for the first nine months to the sharp reduction in its gold output.

In October, Shandong Gold’s production stood down around 10% versus year-ago levels, the company said in a filing, adding it was now aiming for annual production of 24.5 tonnes, versus 37.8 tonnes in 2020.

Looking at the reasons for the rise, jewellery sales during the Qixi Festival, China’s equivalent of Valentine’s Day, in mid-August, and the Mid-Autumn Festival in September.

The association said “The performance of ancient gold jewellery is still eye-catching,” referring to a boom in demand for Chinese heritage gold items.


Pilbara Minerals finalises joint venture with Posco to participate in downstream Lithium Chemicals Facility

Australian lithium producer, Pilbara Minerals Limited (ASX: PLS) (Pilbara Minerals or the Company), is pleased to announce that it has executed a Shareholders Agreement with POSCO for the formation of an incorporated joint venture to develop and operate a 43ktpa lithium hydroxide monohydrate (LHM) Conversion Facility in South Korea. The JV will be named “POSCO-PILBARA MINERALS LITHIUM SOLUTION CO LTD”, with its establishment consistent with Pilbara Minerals’ long-term strategy to become a fully integrated lithium raw materials company with a globally diversified customer base. The Conversion Facility will consist of two production trains, each with a 21.5ktpa LHM production capacity, using (in part) POSCO’s leading patented purification technology which has been developed by POSCO over the last 10 years which will be licensed on a nonexclusive basis to the JV.

Based on studies undertaken by POSCO the capital development costs for the Conversion Facility are currently estimated at a pre-feasibility study level to be between USD$600-6501 million dollars (100% basis). After allowing for initial working capital and pre-production financing costs, the total JV funding requirement is expected to be approximately USD$700-7501 million dollars. Operating costs of the Conversion Facility are expected to be largely consistent with industry peers.


Research explores how to turn copper waste into cobalt

The Queensland Government has partnered with Japan Oil, Gas and Metals National Corporation (JOGMEC) and the University of Queensland to study leftover cobalt in copper mine tailings.

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The three-year study will take samples from Copper Resources Australia’s Rocklands copper mine in northwest Queensland.

Queensland Resources Minister Scott Stewart said this study could change the face of sustainable copper mining.

“This research could help unlock the state’s potential as a major global supplier of ethically sourced cobalt and battery manufacturing right here in Queensland,” Stewart said.

“Australia and Japan have a strong trade partnership and the Palaszczuk Government is proud to be working with JOGMEC and the University of Queensland.

“Cobalt is a highly sought-after new economy mineral that is a key component in lithium-ion batteries used in electric vehicles and battery storage systems.”

The study has the potential to turn waste into another revenue stream for copper mines globally, once results are released by 2024 in a public report and data set.

The samples will be studied at the University of Queensland’s Sustainable Minerals Institute and at JOGMEC’s laboratories in Japan.


Resource nationalism on the rise in top mining countries — report

The last year has seen a rise in resource nationalism — or the risk of thereof —in an extensive and fast-rising number of countries, including top mining countries, market analyst Fitch Solutions finds in its latest industry report.

While resource nationalism had been relatively contained geographically speaking in the past to Sub Saharan Africa, and localised countries such as Indonesia, it is spreading across the world and is now noticeable in SSA (the DRC, Mali, Zimbabwe, South Africa, Guinea), Latin America (Mexico, Peru, Chile), North America (the US), Europe (Russia) and Asia (Indonesia, Mongolia), Fitch reports.


Mongolia is concerned about Rio Tinto’s management of Oyu Tolgoi

Mongolia is concerned Rio tinto Government officials told CNBC about the management of the Oyu Tolgoi copper and gold mines in the Gobi Desert in the southern part of the country.

“We are concerned about transparency, and we are also concerned about whether the mine is operating efficiently.” Solongoo Bayarsaikhan, Deputy Secretary of the Cabinet Secretariat of the Mongolian Government, said on CNBC’s “Squawbox Asia.. “

NS Open pit mining The underground mining project is being jointly developed by the government, which owns approximately 34% of Oyu Tolgoi, and Rio Tinto’s Canadian subsidiary. Turquoise hill resource It has a 66% stake.



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