September Newsletter – 05.09.2022

  • Metal plants feeding Europe’s factories face an existential crisis
  • Nigeria to pay $496 million to settle claims over steel plants
  • Turquoise Hill’s fifth largest investor rejects Rio Tinto’s bid
  • Nigerian Miners Urge Government To Stop Chinese From Illegally Grabbing Nigeria’s Lithium
  • Deepsea mining proposal of Vancouver’s The Metals Company under scrutiny
  • Saudi ministry announces final stage in licensing for largest mining site, Khnaiguiyah
  • Lucapa finds Angola mine’s sixth-largest white diamond

Metal plants feeding Europe’s factories face an existential crisis

In the aluminum industry, closing a smelter is an agonizing decision. Once power is cut and the production “pots” settle back to room temperature, it can take many months and tens of millions of dollars to bring them back online.

Yet Norsk Hydro ASA is preparing this month to do exactly that at a huge plant in Slovakia. And it’s not the only one — European production has dropped to the lowest levels since the 1970s and industry insiders say the escalating energy crisis is now threatening to create an extinction event across large swathes of the region’s aluminum production.

The explanation lies in aluminum’s nickname: “congealed electricity.” The metal — used in a huge range of products, from car frames and soda cans to ballistic missiles — is produced by heating raw materials until they dissolve, and then running an electric current through the pot, making it massively power intensive. One ton of aluminum requires about 15 megawatt-hours of electricity, enough to power five homes in Germany for a year.

Some smelters are protected by government subsidies, long-term electricity deals or access to their own renewable power, but the rest face an uncertain future.

“History has proven, once aluminum smelters go away, they don’t come back,” said Mark Hansen, chief executive of metals trading house Concord Resources Ltd. “There is an argument which extends beyond employment: this is an important base metal commodity, it goes into aircraft, weapons, transport and machinery.”

Nigeria to pay $496 million to settle claims over steel plants

Nigeria has agreed to pay $496 million to settle a multi-billion dollar claim from Global Steel Holdings Ltd following the termination of a contract to upgrade the country’s steel plants, the presidency said on Saturday.

Global Steel, which is linked to India’s Mittal family, had between 2004-7 acquired rights to Nigeria’s entire state steel industry via five major concessions and share purchase contracts. The deal also included access to Nigeria’s iron ore reserves and the central railway network.

But in 2008, the government of the late Umaru Yar’Adua terminated the contracts. Global Steel sought arbitration at the International Chamber of Commerce, Court of Arbitration in Paris the same year.

Between 2011 and 2020, Global Steel and the Nigerian government made several attempts to settle but failed.

Turquoise Hill’s fifth largest investor rejects Rio Tinto’s bid

Rio Tinto joined Turquoise Hill as a strategic partner in October 2006

Sailingstone Capital Partners, the fifth-biggest investor in Turquoise Hill Resources (TSX: TQR), is ready to put the brakes on Rio Tinto’s intended $3.3 billion takeover of the Canadian miner as it says the offer does not “adequately compensate” minority shareholders.

Rio Tinto (ASX, LON: RIO) announced on Thursday it had reached an in-principle agreement with Turquoise Hill to acquire the remainder of the company following six months of negotiations.

US-based SailingStone, which has a 2.2% stake in Turquoise Hill, said the “opportunistic” cash offer for the 49% of the shares it doesn’t already own is well below Rio’s own valuation of the company.

According to the fund manager specializing in resources companies, Rio’s bid of C$43 a share was C$13 short of the minimum it would accept.

“Rio Tinto holds its interest in Turquoise Hill on the Rio balance sheet at $41 a share, the equivalent of C$56 a share at current exchange rates and a more than a 30% premium to the revised offer,” Sailingstone said in a statement. “This should be the bare minimum for any attempt at price discovery.”

Nigerian Miners Urge Government To Stop Chinese From Illegally Grabbing Nigeria’s Lithium

Given its global role in exploiting critical mineral resources, the scavenging activities of China seem unending. Recently, it was reported that Chinese nationals are burrowing in Nigeria’s mines, grabbing whatever deposits of Lithium they could find to sneak back to their country, to fuel their industries.

Provoked by this act, Miners under the umbrella of the Miners Association Of Nigeria, sent a passionate plea to the federal government to check the activities of Chinese miners scavenging for Lithium in the country, stating that their activities will threaten the economy down the line.

This was disclosed by Mr. Dele Ayanleke, the National Secretary of the association in an interview.

“Chinese are moving from one mining site to the other, scavenging and mopping our raw Lithium mineral at a cheap rate to develop their industries and economy. This is not good for the future of our economy, what this means is that Nigeria will end up buying electric batteries from them.

“The government should safeguard our Lithium and revive all the moribund companies producing batteries in Nigeria to start using the Lithium to produce electric batteries. Allowing the Chinese to enter into every mining site is one of the reasons kidnapping is on the increase in Nigeria because they are the major target for kidnappers”.

Deepsea mining proposal of Vancouver’s The Metals Company under scrutiny

A Vancouver-based mining company has come up with what it considers to be a cleaner option for producing minerals needed to power green transportation.

Instead of blasting minerals out of the earth from terrestrial mines, The Metals Company wants to scoop up some of the billions of tonnes of mineralized rocks that litter vast tracts of the deep Pacific Ocean bottom between Hawaii and Mexico.

The rocks, called polymetallic nodules, formed naturally over millions of years and contain nickel, copper and manganese — minerals essential for making lithium batteries. Their concentrations are so rich that the company refers to them as “a battery in a rock.”

However, as The Metals Company embarks on its biggest exploration project, accompanied by an environmental study, the company has come under scrutiny, including from a New York Times’ investigation that raised questions about its close relationship with the International Seabed Authority (ISA), the UN-sponsored regulatory body that governs activity in the open ocean.

Saudi ministry announces final stage in licensing for largest mining site, Khnaiguiyah

Three bidders will participate in the electronic live multi-round auction on the signing bonus on Sunday, September 04, 2022. The multi-round auction is consisting of 12 rounds daily and the bidding period is 30 minutes per round.

The Saudi Ministry of Industry and Mineral Resources (MIM) announced the final stage for the exploration license for Khnaiguiyah, the Kingdom’s largest exploration sites, which covers approximately 353 kilometers west of Riyadh.

The auction will start at 10:00 am and finish at 5:00 pm Riyadh time. The Khnaiguiyah site demonstrates potential for significant mining resources, generating six proposals from international and local companies to obtain the license. The three competitive bidders approved by MIM for the final round in the application process are a consortium between Alara Saudi Ventures Pty. Ltd. Resources and AlTasnim Enterprises LLC; a consortium between Saudi Arabian Mining Company “Maaden” and Ivanhoe Electric Inc.; and a consortium between Moxico Resources Plc, and Ajlan & Bros Mining Company.

Competitive bidders for the license were assessed on several criteria. In addition to their exploration and mining capabilities, the Ministry, as part of its efforts to ensure its mining sector is ESG compliant, will look to each bidder’s social programs to assess their application.

This included improvements to local community healthcare and education facilities, and commitments to create jobs and develop training programs for local residents.

Lucapa finds Angola mine’s sixth-largest white diamond

The 160 carat white Type IIa diamond.

Australia’s Lucapa Diamond (ASX: LOM) has recovered a 160-carat white Type IIa diamond at its prolific Lulo mine in Angola, the sixth-largest recovered at the operation to date.

The diamond was found at the same alluvial mining block as the Lulo Rose, a 170-carat pink-coloured diamond believed to be the largest of its kind found in Angola in 300 years.

Lucapa has a 40% stake in the Lulo mine, which hosts the world’s highest dollar-per-carat alluvial diamonds. The rest is held by Angola’s national diamond company (Endiama) and Rosas & Petalas, a private entity.

The partners have now recovered 28 stones exceeding 100 carats, with the Lulo Rose the fifth largest, regardless of its colour, found at the mine.

In 2016, the operation yielded the largest ever diamond recovered in Angola — a 404-carat white stone later named the “4th February Stone.”

Chief executive officer Stephen Wetherall told delegates at a conference on Friday that his company was working to discover the source of the large stones in Angola.

Canada-based Company to Open Rare Earth Mine in Greenland

A Canada-based company recently announced its plans to develop a rare earth mineral mine in Greenland. Materials from the mine will be sent to Estonia, which has one of only two plants outside China that processes rare earths to a high degree.

Rare earths are a group of minerals used in making electric vehicles, wind turbines, electronics, robots and other machinery. China currently processes about 85 percent of the world’s rare earths. But increased demand is pushing companies to look for other sources.

Neo Performance Materials is based in Toronto, Canada. The rare earth processing company said recently that it plans to develop the Sarfartoq deposit in southwest Greenland. It will then send the materials to its plant in Estonia in Eastern Europe.

Neo aims to have the mine running in two to three years. It will be the company’s first big mining project. Constantine Karayannopoulos, the company’s chief said that by opening the mine, he hopes to protect the company from fast-moving rare earth prices, which have increased in recent years due to supply problems and strong demand.

“We’re at the mercy of the market,” he said. “At the mercy of” is an expression that means you are in a position or situation in which you can be harmed by something you cannot control.


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