September Newsletter – 03.09.18
ANNOUNCEMENTS
TOP NEWS
China’s Tianqi Lithium Files For $1 Billion Hong Kong Listing: Sources
Serbia has picked a Zijin Mining, China’s largest gold miner and one of the country’s top copper producers, to take over its debt-hit copper mining and smelting complex RTB Bor, Minister of Mines and Energy Aleksandar Antic said on Friday.
The $1.26 billion-deal, which gives Zijin a 63% stake in the asset, marks the latest expansion of Beijing’s economic footprint in the Balkan region.
China views Serbia as part of its One Belt, One Road initiative, which is aimed at opening new foreign trade links for local companies.
Deal gives the Chinese miner a 63% stake in the RTB Bor mining and smelting complex in eastern Serbia.
It has invested over $1 billion so far in the Balkan country — a candidate for European Union membership — mostly in soft loans, infrastructure and energy projects.
The contract also fits Serbia’s efforts to sell-off indebted state-run companies to help spur growth and relieve pressure on the budget, as recommended by the International Monetary Fund.
As part of the agreement, published on the Serbian government’s website, Zijin has also promised to cover RTB Bor’s $200 million debt and keep 5,000 jobs at the mine.
Cleveland-Cliffs completes sale of its Asia Pacific iron ore assets
31 August 2018
Written by ASIA Miner News
Cleveland-based iron ore mining company Cleveland-Cliffs has closed the sale of its Asia Pacific iron ore assets to Mineral Resources.
With the transaction, Cliffs’ previously disclosed costs of closing the Australian operations were reduced by approximately US$85 million. According to Cliffs, this included asset retirement obligations assumed by MRL.
As a result of the transaction, in 3Q18, Cliffs will be recording a reversal of its currency translation adjustment, which will result in a positive contribution to net income of approximately US$230 million, or income of approximately US$0.75 per diluted share.
Northern Star Resources To Acquire Pogo Gold Mine For $260 Million
Aug 30, 2018
An Australian gold miner has entered into an agreement to acquire a United States based underground gold mine.
Northern Star Resources Ltd has announced this week that it has entered into an agreement with the Japan based Sumitomo Metal Mining Co and Sumitomo Corp to acquire the latter’s Pogo Gold mine.
https://www.miningglobal.com/investing/northern-star-resources-acquire-pogo-gold-mine-260-million
Newmont Buys Stake in Evrim Resources
August 30, 2018
Newmont Mining has agreed to purchase more than 4.8 million shares of Evrim Resources for $1.50 per share for gross proceeds of nearly $7.3 million. Evrim said it will use most of the funding for the Cuale high-sulphidation epithermal gold project in Jalisco, Mexico.
“The investment by Newmont is a strong endorsement for the potential of the Cuale gold project,” said Evrim CEO Paddy Nicol. “Evrim and Newmont have established a strong exploration relationship for several years undertaking targeted generative exploration in two areas of North America, and this investment is a natural evolution of that relationship.”
He said they would use Newmont’s technical knowledge and expertise in high-sulphidation gold systems to advance Cuale.
https://www.e-mj.com/breaking-news/newmont-buys-stake-in-evrim-resources/
COMMODITIES
Minerals Supply Faces Crunch Time As Economic Powerhouses Drive Demand
31 August 2018
Written by ASIA Miner News
As China remains a key driver of global commodity demand, India – the world’s fastest growing economy – and Indonesia, Asia’s emerging new powerhouse, could potentially add pressure on minerals supply.
Owen Hegarty, EMR Capital Executive Chairman, warns that future resources supply constraints will parallel the more than halving in minerals exploration spend, particularly for the global non-ferrous exploration budget.
“Investment in the sector remains at trough levels,” Mr Hegarty said. “And this at a time the global economy itself remains healthy.”
Mr Hegarty pointed to genuine fears about impacts on resources commodities of a trade war between majors and the United States – with copper pundits pricing in a greater than 0.5 per cent drag on global growth due to uncertainty about economic policy within the resources powerhouses.
“By any examination, however, the global economy is expected to double by 2050 and this will be led by the emerging seven top economies: China, India, Brazil, Mexico, Russia, Indonesia, and Turkey,” Mr Hegarty said.
“The United States will still rank as the world’s third largest economy by 2050 but the seven emerging economies will be those with the tiller in their hand.”
Australia would miss the cut in the top 15 economies in 30 years’ time, those slots taken up by Japan, Germany, the UK, France, Saudi Arabia, Nigeria and Egypt.
Russia Will Export 200M Metric Tons of Coal in 2018
Russia is expected to export more than 200 million metric tons (mt) of coal in 2018, according to Xinhua. At a fuel and energy commission held in Kemerovo Region, Energy Minister Alexander Novak said, “Russia is expected to produce over 420 million mt of coal in 2018, surpassing the maximum level of former Soviet times reached in 1988.”
He added, “The export of coal from Russia, according to our estimates, is expected to exceed 200 million mt — about 100 million mt in the west and about 100 million mt in the east. Russia’s total share in the global coal market has increased more than 3.5 times over the past 20 years and now amounts to 14%.”
Pennsylvania Offers Funding to Blaschak to Reopen Mammoth Reserves
Anthracite coal operator Blaschak Coal Corp received a $1 million grant to develop a new, large mine in eastern Pennsylvania. Provided by the Redevelopment Assistance Capital Program and supported by Pennsylvania Gov. Tom Wolf, the funding will support the reengineering, reopening and redevelopment of a large reserve of Mammoth coal in Mount Carmel.
FINANCIAL
Paulson Scorns ‘Inexcusable’ Delay in Detour Holder Meeting
28 August 2018
Billionaire John Paulson’s hedge fund said Detour Gold Corp.’s plan to hold a shareholders meeting in December to vote on its slate of nominees to replace the miner’s board was “inexcusable.”
On Monday, Detour said it would hold a special shareholders meeting on Dec. 11 after it was requisitioned by Paulson & Co. On Tuesday, the hedge fund called that “the latest entrenchment tactic.”
“It is inexcusable that the board delayed the meeting and refused to hold itself accountable to shareholders,” Marcelo Kim, a Paulson partner, said in a statement.
Paulson has nominated eight directors to replace Detour’s entire board and called for a meeting of shareholders to elect its slate no later than Sept. 28.
“Paulson is the only one pushing for a September meeting for reasons that benefit only Paulson,” Detour said by email, noting the meeting had been set well within the standard time frame. “Paulson threw out a date tactically, knowing full well it was not practical.”
INNOVATION AND TECHNOLOGY
Fact or Fiction: A Shortage of Lithium and Cobalt for EVs?
As demand for electric vehicles increases, so does fear of a shortage of raw materials for its batteries. But does such a shortage really exist, and what is the impact on EV prices?
The electrification of transport will increase the demand of raw materials used in batteries, especially lithium and cobalt. It is feared that this rapid growth will cause shortages, followed by rising prices of the raw materials, and eventually by rising prices of the EVs.
Rising Prices – Fact
Even though the production costs of lithium-ion batteries have fallen significantly over the last decade (from about $1,000/kWh in 2007 to $300/kWh in 2015 and below $200/kWh this year), the prices of the raw materials have actually been rising. Since 2015 the price of lithium has tripled, that of cobalt has doubled. Even though the total price of the batteries is supposed to keep on decreasing, to about $150/kWh by 2020 according to a Rabobank Quarterly report, the prices of the raw materials are estimated to go up even further.
Shortages – Fiction
The abundance of lithium, and the lack of production restrictions should not cause fears considering supply shortages, nevertheless prices jumped to $19,500 per ton in 2017 from $5,000/t in 2016. Still, McKinsey Global Institute assumes that it is unlikely to see price spikes continue because new capacity is readily available and will be brought online to rebalance supply and demand.
PROJECTS
Construction Phase Begins in Mina Justa
Juan Luis Kruger, general manager of the Peruvian mining company Minsur, a subsidiary of Alxar, the mining branch of the Angelini Group, has announced the beginning of construction in Mina Justa, the first mining project for the company outside Chile. This announcement was made two weeks after completing the financing of US$900 million.
“We hope to produce the first cathode and the first copper concentrate by the end of 2020,” Kruger said.
The company expects to generate at least 8,000 jobs as a result of the construction activities in this project.
https://www.e-mj.com/breaking-news/construction-phase-begins-in-mina-justa/
Black Mountain Sand Announces Expansion Into the Mid-Continent; Solidifies Position as Largest In-Basin Frac Sand Provider in the Nation
Addition of 6th mine boosts total annual production capacity to more than 19 million tons, totaling almost 17 percent of estimated 2019 frac sand demand
August 28 2018
FORT WORTH, Texas– Black Mountain Sand a Texas-based in-basin frac sand provider, announced today expansion into Western Oklahoma’s Mid-Continent. Construction is now underway on its sixth mine, the first outside Texas. Once fully commissioned, the 1,290-acre Blaine County facility will employ 75 people and produce 3 million tons of sand annually. Delivery of the mine’s first commercial tons is anticipated to begin by mid-January 2019.
With the addition of the Mid-Continent mine, Black Mountain Sand is now the largest in-basin sand provider in the nation with annual combined production capacity exceeding 19 million tons. It is also the only in-basin provider serving three of the most active basins in North America: Eagle Ford Shale and the Permian and Anadarko Basins. With Houston-based research firm Seaport Global Securities estimating total 2019 frac sand demand at 115 million tons, the company’s annual production capacity equals 16.5 percent of the market.
https://www.businesswire.com/news/home/20180828005141/en
COMMODITY PRICES
Uranium Set for Best Run Since 2014 as Miners Buy After Halts
31 August 2018
Uranium is heading for its longest run of monthly gains since November 2014 as global supply tightens after mine closures and as producers and investors boost purchases in the spot market.
Spot uranium is up 2.1 percent this month, set for a fourth monthly advance, and has climbed more than 30 percent since hitting a low in April. A decline in supply and boost in demand has helped underpin a price increase, according to Ux Consulting Co., a provider of research on the nuclear industry. Further gradual gains are seen through the remainder of the year, Ux said.
