September Newsletter – 19.09.19
ANNOUNCEMENTS
TOP NEWS
Global mining panel looks to boost accountability after Brazil disaster
BELO HORIZONTE, Brazil (Reuters) – New safety standards being drawn up by a global mining industry panel will include rules to better define management accountability after Vale SA’s (VALE3.SA) January tailings dam disaster, a top industry official said on Wednesday.
The governance standards would help ensure independent reviews of dams and adequate disclosure of risks, said Tom Butler, president of the International Council on Mining and Metals.
“The engineers know what they’re doing with these things but the implementation and the management and the change management, that all involves humans,” Butler told Reuters in an interview in Brazil.
“Therefore it involves governance and that’s where there’s potential for things to go wrong if the governance is weak or the right hand is not talking to the left.”
A draft version “is almost ready to go out” and is expected by late September or early October, Butler had earlier told a mining conference in Belo Horizonte, about 20 miles (30 km) from the site of January’s disaster.
RPA joins independent mining consultancy exodus
International environmental consulting firm SLR has followed rival ERM in buying a top-shelf mining consultancy, picking up respected Canadian company RPA for an undisclosed price.
Toronto-based RPA (Roscoe Postle Associates) was acquired by UK-based Scott Wilson Group in 2006, then bought out and reprivatised by management in 2011.
SLR’s move on RPA follows ERM’s acquisition of Australia-based CSA Global in July this year.
RPA has about 60 staff, including geological, mining and metallurgical consultants, and offices in Toronto, Denver and London. The company becomes part of SLR’s existing mining and minerals arm.
The companies said they’d collaborated on client projects for several years and “together we will now be able to offer our clients in the mining sector a complete service extending from value creation and generation through resource and reserve work to environmental and social risk and liability management”.
SLR CEO Neil Penhall said the company’s fourth acquisition this year reflected “the confidence both we and our new investors, Charterhouse Capital Partners, have in the market and the opportunities to provide world-class environmental solutions and advice to our clients”.
Sluggish EV Sales And China’s Currency Depreciation Whack Miners Of Battery Metals
Car makers are rushing to release electric versions of their popular models, but the same can’t be said of consumers who are balking at the cost of a change over while fretting over range anxiety and the challenge of finding a convenient charging station.
The net result is that companies mining the metals which go into EV rechargeable batteries have been caught with full stockpiles as demand dries up for lithium, cobalt and graphite.
The flow-on effect of over-supply meeting under-demand is a price crash that is reverberating across the raw materials world, tipping some companies into insolvency and forcing the cancellation of projects.
In Australia, where a lithium-mining boom was unleashed three years ago, a series of mines and processing plants have been deferred while one small lithium producer, Alita Resources, has collapsed into a form of bankruptcy.
Indonesia sees China as ally as it weighs bans on exporting minerals
JAKARTA – Indonesia, which is weighing an early ban on exports of bauxite and copper concentrates, is betting on Chinese companies to add to the billions of dollars of investment in building smelters and processing plants.
Making a deal with China is “simple”, as the country “is willing to meet any request from us,” said Coordinating Minister of Maritime Affairs Luhut Binsar Pandjaitan, who also oversees mining. “The most important thing is how Indonesia can protect its national interest, not the origin of investment,” he said.
Indonesia expects the export ban to lure about $20-billlion in fresh investment into nickel and related projects by 2024. Several overseas firms are planning battery-grade nickel facilities in Indonesia, including China’s Tsingshan Holding Group Co. and PT Vale Indonesia, a unit of the Brazilian mining giant. Investments have totaled about $9-billion so far, Pandjaitan said.
Indonesia last month jolted the metals market by expediting a ban on nickel ore exports by two years to force miners to build smelters to locally process the ore used in stainless steel and lithium-ion battery. It’s now studying bringing forward export curbs on bauxite, asphalt and copper concentrates in line with President Joko Widodo’s efforts to transform the country into a processor of major minerals.
LEGAL AND REGULATORY
PNG demands 40% of output from Newcrest-Harmony’s Wafi-Golpu project
Australia’s Newcrest Mining (ASX: NCM) and South Africa’s Harmony Gold (JSE: HAR) (NYSE: HMY) are facing fresh challenges in Papua New Guinea, as the administration is asking to keep 40% of gold extracted at the companies’ Wafi-Golpu project.
The joint venture partners had been hoping to secure a mining lease for the $5.4 billion gold-copper deposit this year. A new government, however, has brought delays in the permitting process as James Marape’s administration has vowed to “take back” PNG’s mineral resources.
Marape had quit as finance minister in April, questioning a major global gas development deal with France’s Total SA. He was elected by the parliament in May, after a 101-8 victory.
“THEY GET 60% OF THE PRODUCTION, WE GET 40%. IF THEY DON’T LIKE IT, WE’LL MINE IT OURSELVES – WE OWN THE RESOURCES”
Wera Mori, PNG’s minister for commerce and industry
“We’d like to see Newcrest come to the negotiating table on this,” Wera Mori, minister for commerce and industry told Reuters in a phone interview late on Thursday.
https://www.mining.com/png-demands-40-of-the-output-from-newcrest-harmony-wafi-golpu-project/
Malaysia firms up on bauxite mining, export operating procedures
Malaysia has announced the finalisation of new operating procedures for bauxite mining and export activities based on an earlier draft proposal after discussions with various stakeholders, including miners and green groups.
The new operating procedures include capping monthly bauxite exports at 600,000 tonnes.
According to a Reuters report, the Water, Land and Natural Resources Minister, Dr Xavier Jayakumar, said that although this move was specific to Pahang state, “the ministry will expand its usage to the whole country through broader standard operating procedures”.
The Southeast Asian nation was once the biggest bauxite supplier to top aluminium producer China, with shipments peaking at nearly 3.5 million tonnes a month around the end of 2015. Most of Malaysia’s bauxite is mined in the East Coast port city of Kuantan in Pahang.
Pahang Mentri Besar, Datuk Seri Wan Rosdy Wan Ismail, vowed that careful screening of bauxite mining permit applications will be undertaken to prevent incidents of environmental pollution from recurring in the state.
He said the careful screening of the applications was important to ensure that those granted permits for bauxite mining operations and export licences met the new standard operating procedure (SOP) criteria.
“We have agreed to use the new SOP set by the Ministry of Water, Land and Natural Resources and to ensure its effectiveness, the bauxite mining permit cannot be issued easily.
“Careful screening of the applications will be undertaken before the state government can issue the permit and mining activities can begin.”
All mining activities were banned in early 2016 after unregulated mining and run-off from unsecured stockpiles contaminated water sources.
Earlier this year, Malaysia lifted the mining ban due to strong demand for bauxite, but later added that bauxite miners must each conduct an environmental impact study on their sites before receiving licences to restart operations.
FINANCIAL
Investing green is all the rage, but benchmarks still hazy
Global money managers and companies are rushing to meet a deadline to report on their carbon footprint, but the lack of a standard metric raises concerns their efforts could just be a box-ticking exercise in the transition from brown to green.
From 2020, firms with some $118-trillion of funds under management – among 800 signatories to a United Nations pact – will make climate-risk related disclosures as an early step towards making the world a better place by 2030.
The problem with assessing carbon footprints is that there are no universal criteria for benchmarking environmental, social and governance (ESG) – the key factors in measuring the sustainability and ethical impact of an investment.
“The way you quantify climate impact and consider transition risks could differ from company to company,” said Stephane Andre, a Sydney-based portfolio manager at Alphinity Investments which has A$8.2 billion ($5.65 billion) in assets under management.
Newmont says Red Lake mine sale underway
The world’s biggest gold miner, Newmont Goldcorp (NYSE: NEM, TSX: NGT) confirmed on Friday in a press release that its Red Lake mine in Ontario, Canada, is up for sale.
Talk of a potential sale of the mine, formerly part of Goldcorp, comes only one week after announcement of Newmont’s divestment of a 45.5% stake in the Nimba iron ore project in Guinea to High Power Exploration, a company backed by billionaire Robert Friedland.
Following the blockbuster merger earlier that gave rise to Newmont Goldcorp, it was expected that between $1 billion and $1.5 billion in assets would be sold over the next two years. Many of the projects that came with Goldcorp, including Red Lake, Musselwhite and Porcupine, were considered to be on the block.
Meanwhile, Newmont also confirmed on Friday that incoming CEO Tom Palmer will be presenting at next week’s Denver Gold Forum.
https://www.mining.com/newmont-confirms-potential-sale-of-red-lake/
INNOVATION AND TECHNOLOGY
Looks like hydrogen economy could happen – CPM
JOHANNESBURG (miningweekly.com) – Hydrogen energy has been like science fiction since the post-World War II period. Many have dreamed about being able to replace oil and natural gas with hydrogen, but limiting factors have been been the cost of production and safety issues.
Now, widespread sun and wind power use as well as liquid organic hydrogen carrier (LOHC) advances are sweeping these issues aside to make hydrogen’s $1/litre, or $4/gallon, cost competitive with petrol.
https://www.miningweekly.com/article/looks-like-hydrogen-economy-could-happen-cpm-2019-09-13
COMMODITY PRICES
