September Newsletter – 03.09.19

ANNOUNCEMENTS

Ramu sends nickel price to 5-year high amid tightest market in decade

There may be a fortune buried in a forgotten corner of Europe

Mining industry players come together to form new interoperability forum

Chile’s Codelco profits plunge on falling copper price, labor strife

China is already winning the next great race in electric cars

How hydrogen could solve steel’s climate test and hobble coal

Canada injects millions into EVs, energy-efficient mining technology projects

Government approves Japan Gold’s expansion plans

TOP NEWS

Ramu sends nickel price to 5-year high amid tightest market in decade

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Expectations of booming demand for electric vehicles have bolstered the longer term bull case for nickel, and a supply crunch, following threats of a shutdown of a major Asian supplier only added fuel to the fire on Friday.

Nickel is now up 65% since the start of the year, rocketing more than 8% to $17,695 per tonne in London on Friday, the highest since September 2014. As an indication of just how tight supply has become, in London the spread between spot prices and nickel for delivery in three months spiked to the highest in a decade.

The nickel price jumped to a record high in Shanghai to the equivalent of $18,342 per tonne, surpassing the value of tin on that futures market for the first time.

“RAMU OPERATION PRODUCES APPROXIMATELY 35,000 TONNES OF NICKEL, EQUIVALENT TO 23% OF THE METAL HELD IN LME INVENTORIES”

Friday’s move comes after the mines ministry of Papua New Guinea said a nickel processing plant owned by Metallurgical Corp of China (MCC) that spilled mine waste into Papua New Guinea’s Basamuk Bay may face closure.

“The (Ramu) operation produces approximately 35,000 tonnes of nickel, equivalent to 23% of the metal held in London Metal Exchange inventories,” antipodean investment bank ANZ said in a note quoted by Reuters.

https://www.mining.com/ramu-sparks-fresh-nickel-price-high-amid-tightest-market-in-decade/

COMMODITIES

There may be a fortune buried in a forgotten corner of Europe

PRAGUE – The ancient scooter gurgling through a languid summer afternoon brought groceries and a fistful of cash to Sasa Antic’s house. Like many of his neighbors, the 30-year-old Serb hasn’t had a job for some time so the family relies on the arrival of his mother’s pension.

Yet buried in the ground beneath this forgotten corner of former Yugoslavia is the prospect of becoming a new European front in the economic battle with Asia. Geologists are exploring the hilly landscape for the metal that’s become ubiquitous in modern technology: lithium.

“It would be a godsend if they can prove lithium reserves,” said Antic, as his mother counted out the dinars handed to her by a merchant who also delivered milk, rolls and butter to them in Klinovac, a hamlet of barns, stone houses and more goats than cars. “This is the least developed part of Serbia and we are at a dead end.”

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The global hunt for lithium is afoot as companies look to cut fossil-fuel use. BloombergNEF estimates battery demand for lithium material will grow eightfold over the next 11 years.

https://www.miningweekly.com/article/there-may-be-a-fortune-buried-in-a-forgotten-corner-of-europe-2019-08-30

LEGAL AND REGULATORY

Mining industry players come together to form new interoperability forum

The Global Mining Guidelines Group (GMG), following its inaugural mining interoperability alignment roundtable two weeks ago in Perth, Australia, has come together with industry participants to launch an interoperability organisations taskforce.

This group will work toward fleshing out a detailed roadmap and develop a way of illustrating how all the pieces fit together, the GMG said.

GMG stated: “Interoperability is a priority for the mining industry and there are many ongoing projects, guidelines and standards being developed for it.”

The roundtable was designed to accelerate progress and enhance collaboration between organisations working on interoperability. It brought organisations working on different aspects of the issue – both inside and outside the mining industry – together to increase the visibility of ongoing interoperability initiatives and to prevent duplication of efforts, according to GMG.

Representatives from AMIRA, CSIRO, Enterprise Transformation Partners, GMG, IIC, ISO, Interop, IREDES, METS Ignited, and MI4 presented on their initiatives and discussed ways to move forward collaboratively.

https://im-mining.com/2019/08/28/mining-industry-players-come-together-to-form-new-interoperability-forum/

FINANCIAL

Chile’s Codelco profits plunge on falling copper price, labor strife

The world’s top copper producer Codelco saw profits plunge 74% to $318 million in the first half of 2019, the company said on Friday, as the state miner confronted falling prices globally and labor strife at its flagship Chuquicamata mine in northern Chile.

Outgoing Chief Executive Nelson Pizarro told reporters Codelco had “faced an incredibly challenging second quarter,” in a presentation at the company’s headquarters in Santiago, but said the company was still on track to hit 1.7 million tonnes of production in 2019.

CODELCO IS PUSHING FORWARD WITH A 10-YEAR, $40 BILLION PLAN TO OVERHAUL ITS FLAGSHIP MINES AMID SHARPLY FALLING ORE GRADES AND WAVERING MARKETS

Pizarro’s exit comes at a defining moment for Codelco, as it pushes forward with a 10-year, $40 billion plan to overhaul its flagship mines amid sharply falling ore grades and wavering markets.

Despite the challenges, Codelco reported production costs had fallen slightly to $1.42 per pound of copper.

Pizarro said Codelco estimated the copper price would land between $2.47 and $2.88 in 2019, a wide range he blamed on continuing global trade tensions. He said he believed “demand would normalize in a couple of years.”

(Reporting by Fabian Cambero Writing by Dave Sherwood; Editing by Tom Brown)

https://www.mining.com/web/chiles-codelco-profits-plunge-on-falling-copper-price-labor-strife/

INNOVATION AND TECHNOLOGY

China is already winning the next great race in electric cars

Battery packs clamber up a conveyor belt before dropping into a flame-proof chamber, where they are crushed into gray metallic mush, a cocktail containing the car fuel of the future.

The facility separates components like cobalt, nickel, graphite and lithium from waste plastic particles. Factory owner Duesenfeld GmbH is bracing for a tidal wave of spent batteries as carmakers move beyond combustion engines in huge numbers. Over the next decade, the pile of retired power plants will grow from almost nothing to 1.6 million tons annually, according to BloombergNEF.

DEPLOYMENT OF ABOUT 140 MILLION ELECTRIC VEHICLES BY 2030 WILL REQUIRE 3 MILLION TONS MORE COPPER A YEAR, 1.3 MILLIONS TONS MORE NICKEL AND ABOUT 263,000 TONS MORE COBALT

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The recycling push betrays a dilemma at the center of the car industry’s green reincarnation: Battery-powered cars might not have the carbon footprint of their combustion siblings, but they are still toxic at heart. The power cells contain raw materials mined in politically and environmentally delicate places, like Bolivia and the Democratic Republic of Congo, and if estimated growth rates are any guide, demand will eventually outstrip supply.

“At some point it won’t make sense anymore to dig for raw materials, because enough batteries are available,” said Duesenfeld Managing Director Christian Hanisch in his office in Wendeburg, located in the heartland of northern German car production, where Volkswagen AG has its headquarters and some of its biggest facilities. “As a carmaker, I’d seriously consider safeguarding the raw materials. A deposit system might work.”

There’s another hard economic truth facing recycling companies and vehicle manufacturers alike. The process comes at a cost that’s unlikely to be covered by the value of the extracted materials, which are less precious than the substances retrieved from catalytic converters, for example. That’s set to expose electric cars to an additional cost burden, further widening the profitability gap to conventional vehicles.

The transition to battery power will dramatically increase the thirst for raw materials. Deployment of about 140 million electric vehicles by 2030 will require 3 million tons more copper a year, 1.3 millions tons more nickel and about 263,000 tons more cobalt, according to Glencore Plc, a top producer of all three metals. In the case of cobalt, that surge will dramatically outstrip total current mined production, which stood at 150,000 tons in 2018, according to BloombergNEF.

It’s such calculations that will make recycling inevitable. Already, battle lines are forming, and China is emerging as a leader in the field. Unlike in the U.S. and Europe — where high transport and energy costs are a burden — recycling vehicle batteries is profitable in China, based on the value of the raw materials alone. That’s nurturing an industry ready for expansion and in a pole position to compete with western efforts.

https://www.mining.com/web/china-is-already-winning-the-next-great-race-in-electric-cars/

How hydrogen could solve steel’s climate test and hobble coal

Steel could shed its reputation as a climate threat by using hydrogen instead of fossil fuels for as much as half of global output by 2050, according to BloombergNEF.

The steel industry could adopt hydrogen for between 10% and 50% of output by mid-century given the right carbon pricing, BloombergNEF analysts wrote in a report. The sector accounts for as much as 9% of global carbon emissions, according to the World Steel Association

“Hydrogen technologies offer a viable pathway to slash the emissions from making steel,” Kobad Bhavnagri, head of special projects at BloombergNEF, said by email. “No big R&D breakthroughs are necessary. If policy was in place, the world could start producing green steel within a decade.”

Hydrogen is one option for steelmakers facing louder calls from climate lobbyists and regulators to tackle their carbon problem. It’s an alternative already being tested by industry giants including top supplier ArcelorMittal, as well as Germany’s Thyssenkrupp.

https://www.miningweekly.com/article/how-hydrogen-could-solve-steels-climate-test-and-hobble-coal-2019-08-30/rep_id:3650

Canada injects millions into EVs, energy-efficient mining technology projects

Canada’s Minister of Natural Resources is investing C$2 million (about $1.5m) in an initiative to develop an energy-efficient mining technology expected to reduce energy consumption at mine sites, cut costs and make remote operations more productive.

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The Canada Mining Innovation Council’s project seeks to replace conventional crushers with technology that can reduce the crushing and grinding component of a mining site’s energy consumption by up to 40%.

Crushing and grinding rocks into smaller pieces is the most energy-consuming activity in a mining operation.

The project, funded through Natural Resources Canada’s Clean Growth Program, lowers costs for that part of the mining process by 30%.

The program is a C$155-million investment fund that helps emerging clean technologies further reduce their impacts on air, land and water, while enhancing competitiveness and creating jobs.

https://www.mining.com/canada-injects-c2m-into-energy-efficient-mining-technology-project/

PROJECTS

Government approves Japan Gold’s expansion plans

The Japanese Ministry of Economy, Trade and Industry accepted Japan Gold’s (TSXV: JG) new prospecting rights applications in the Southern Kyushu Epithermal Gold Province, which is located on the island of the same name.

In a press release, the Canadian miner said the new applications include the Mizobe project and a second extension to the Ohra-Takamine project.

THE NEW APPLICATIONS INCLUDE THE MIZOBE PROJECT AND A SECOND EXTENSION TO THE OHRA-TAKAMINE PROJECT

With these additions, the new Mizobe project comprises four applications of 1,195 hectares, while the Ohra-Takamine project was extended by 1,167 hectares to 4,872 hectares.

Mizobe is located 10 kilometres east of the Ohra-Takamine project, along the western edge of the Kagoshima Graben. According to Japan Gold, historic mining activities in the project area were focused on antimony mineralization located in the north-western part of the application area. Antimony is a typical pathfinder element for epithermal gold mineralization and commonly concentrated in the upper parts of epithermal gold systems.

The Ohra-Takamine project, on the other hand, lies within the Hokusatsu-Kushikino Mining District and covers five historic gold mines.

Japan Gold said that the extension applications for Ohra were made to encompass MMAJ-defined areas of hydrothermal alteration co-incident with gravity high, CSAMT geophysical and geochemical soil anomalies, some 2 to 3 kilometres southeast of the historic Matsuno mine workings.

https://www.mining.com/government-approves-japan-golds-expansion-plans/

COMMODITY PRICES

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