September Newsletter – 20.09.2022

  • China doubles down on coal spending as energy crunch bites
  • Australian mining major Fortescue to invest $6.2bn in net zero push
  • Top banks pull back from China metal financing after crises
  • AngloGold Ashanti to buy Coeur Mining’s projects in Nevada for $150 million
  • OZ Minerals said to seek A$10 billion in potential sale
  • Deadline for working group dealing with Las Bambas conflict extended to year-end
  • World’s largest gem-quality ruby discovered in Mozambique

China doubles down on coal spending as energy crunch bites

Beijing: China has stepped up spending on coal in the face of extreme weather, a domestic energy crunch and rising global fuel prices — raising concerns Beijing’s policies may hinder the fight against climate change

The country is the world’s biggest emitter of the greenhouse gases driving global warming, and President Xi Jinping has vowed to reduce coal use from 2026 as part of a broad set of climate promises

Beijing has committed to peaking its carbon emissions by 2030 and achieving carbon neutrality by 2060.

Overall carbon emissions in China have fallen for four consecutive quarters on the back of an economic slowdown, research reported by climate monitor Carbon Brief showed in early September.

But at the same time, slowing growth has led authorities to rely on smokestack industries in an effort to boost the economy.

The push to shore up coal power — which still makes up most of China’s energy supply — has alarmed analysts who warn that it will make an eventual transition to a renewables-dominated energy mix more difficult.

Spooked by an energy shortage last autumn, Chinese authorities in spring ordered coal producers to add 300 million tonnes of mining capacity this year -­the equivalent of an extra month of coal production for the country.

In just the first quarter of 2022, regulators endorsed the equivalent of half the entire coal-fired power plant capacity approved in 2021, according to Greenpeace.

– Inefficiencies – Authorities have also burned and mined more coal in recent weeks in order to meet increased air conditioning demand and make up for shrunken hydropower dams during China’s hottest-ever summer.

Australian mining major Fortescue to invest $6.2bn in net zero push

Billionaire chair Andrew Forrest predicts heavy industries will follow on renewables and hydrogen drive

One of Australia’s largest mining companies has unveiled a plan to spend more than $6bn by the end of the decade to hit its net zero emissions targets.

Fortescue Metals Group, one of the world’s biggest producers of iron ore, made the commitment in New York as part of Joe Biden’s First Movers Coalition and the UN Global Compact.

The commitment sets a benchmark for investments heavy industry needs to make to reach net zero, according to billionaire Andrew Forrest, Fortescue founder and executive chair.

The company has been among the most vocal about the need for the mining sector and heavy industry to reduce carbon emissions. It has established a separate unit — Fortescue Future Industries — to invest in renewable and hydrogen technologies that can be applied to its own operations and developed as separate businesses.

Forrest argued that eliminating the use of fossil fuel at Fortescue’s mines by converting vehicles, including enormous trains, to hydrogen would reduce operating costs by $818mn a year from 2030. He said cumulative cost savings would reach $3bn by the end of the decade, with its investment paid back by 2034 based on current market prices for fossil fuels.

Top banks pull back from China metal financing after crises

JPMorgan Chase & Co. and ICBC Standard Bank Plc are cutting back on financing to China’s troubled metals trade, adding pressure to a sector already hit hard by a struggling economy.

At least three Chinese metal trading companies have had credit lines frozen or reduced by either of the banks in recent weeks, according to people familiar with the matter. The lenders have pulled back after a liquidity crisis emerged at top copper trader Maike Metals International Ltd., said the people, who asked not to be identified discussing private information.

Both JPMorgan and ICBC Standard Bank have financing relationships with Maike. It’s not clear whether the banks’ pullback from the Chinese metals market is a temporary freeze while they assess their situation, or a more permanent retreat.

Maike’s admission last month that it asked for government help with liquidity issues is further shaking confidence in the industry, coming after the nickel short squeeze that almost bankrupted Tsingshan Holding Group Co. in March, and two recent cases of missing metal used as collateral for financing deals.

JPMorgan had the largest exposure to Tsingshan of its roughly 10 banks and brokers, and was reviewing its commodities business in the wake of the nickel crisis, Bloomberg reported at the time. ICBC Standard Bank was also among Tsingshan’s banks and brokers.

AngloGold Ashanti to buy Coeur Mining’s projects in Nevada for $150 million

Coeur Mining has operations in Nevada, including the Rochester open pit, heap leach silver-gold mine, pictured here.

South Africa’s AngloGold Ashanti (NYSE: AU) (JSE: ANG) is expanding its footprint in Nevada, US, with the acquisition of Coeur Mining’s (NYSE: CDE) subsidiary for $150 million cash.

The unit, Crown Sterling Inc, holds properties in Nevada immediately south of AngloGold’s assets and they are estimated to hold 914,000 ounces of gold.

The assets include Coeur’s C-Horst, SNA, Secret Pass and Daisy operations, as well as the decommissioned Sterling mine and all tenements that surround the properties.

The bullion producer has agreed to pay Coeur an extra $50 million if further exploration results in a mineral resource greater than 3.5 million ounces.

The move increases AngloGold’s foothold in the Beatty district, in south-central Nevada, where it bought all projects held by Corvus Gold after the recent $370-million acquisition of the Canadian junior.

“The addition of these properties consolidates our ownership position in one of North America’s most promising new gold districts,” said AngloGold Ashanti chief executive officer Alberto Calderon.

OZ Minerals said to seek A$10 billion in potential sale

OZ Minerals Ltd. is seeking about A$10 billion ($6.7 billion) in a potential sale as BHP Group Ltd. pursues a deal for the Australian miner, people with knowledge of the matter said.

Sydney-listed OZ Minerals believes an offer of around A$30 per share would better reflect its growth prospects and be a starting point for further negotiations, the people said, asking not to be identified because the information is private. It rejected an earlier bid from BHP in August of A$25 per share.

BHP has been considering raising its bid for OZ Minerals and could increase its proposal as soon as this month, Bloomberg News has reported. It’s unclear how much BHP is willing to offer and whether it would meet OZ Minerals’ expectations. Shares in OZ Minerals closed at A$25.25 on Friday.

Deliberations are ongoing, and OZ Minerals could end up pushing for a different price, the people said.

OZ Minerals and BHP declined to comment.

BHP, which this year hived off its oil and gas assets, is seeking growth in commodities tied to trends including low-emissions transport and clean energy — particularly copper for renewables and nickel for lithium-ion batteries. BHP is also pouring billions of dollars into a giant new potash mine in Canada to enter the fertilizer sector.

The biggest miners are universally bullish on copper, expecting surging consumption in cities and electric vehicles as the global economy decarbonizes. Earlier this month, Rio Tinto Group reached a definitive agreement to acquire all remaining shares of miner Turquoise Hill Resources Ltd., owner of a giant copper mine in Mongolia.

Deadline for working group dealing with Las Bambas conflict extended to year-end

The Peruvian government, until December 31, 2022, the expiration date of the working group tasked with assessing and guaranteeing compliance with the agreements signed between the government, Las Bambas representatives and the communities of Fuerabamba, Chila, Choaquere, Chuicuni, Pumamarca and Huancuire located in the south-central Apurimac department.

Following a modification of a previous decision, the expanded timeline was settled in ministerial resolution 252-2022-PCM, which was made public over the weekend in the official gazette El Peruano.

The working group was established through a series of agreements signed in mid-June, following a blockade that forced Chinese miner MMG to halt operations at its flagship mine for more than 50 days, the longest in Las Bambas history.

The protest was started in mid-April by the communities of Fuerabamba and Huancuire, who say the mining company had not honoured all of its commitments to them. Both communities sold land to the company to make way for the mine, which opened in 2016.

The Chila, Choaquere, Chuicuni and Pumamarca communities joined later and all six of them are now part of the working group, which operates under the umbrella of the Presidency of the Ministers’ Council (PCM) and was supposed to be active only until September 18, 2022, two months after it was created.

World’s largest gem-quality ruby discovered in Mozambique

The world’s largest gem-quality ruby “Estrela de FURA” has been unveiled in Dubai, in the United Arab Emirates. The 101-carat stone was discovered in the northern Mozambican province of Cabo Delgado by Fura Gems, which states that “its vivid red hue, fluorescence, and clarity are extremely rare, making it intensely sought-after”.

According to Dr A. Peretti, the chief executive officer of the independent gem specialist company GRS GemResearch Swisslab, “I have finally come across the most consequential and promising gemstone ever tested in my career, a magnificent rough ruby of over 101 carats in size from Fura’s Mozambique mine.

This ruby shows characteristics normally encountered only in the classical Mogok mines of Burma. It possesses a fluorescence and vivid red colour and even excels in its excellent clarity. Estrela de FURA provides the potential to achieve the new world record of being the finest gem-quality ruby ever found with a size of over 50 carats once it goes through the final cutting process”.

This analysis is backed up by Daniel Nyfeler, the managing director of Gubelin Gem Lab, who considers that “the Estrela de FURA ruby is likely to yield an intense, saturated red colour once fully and properly faceted with adequate proportions”.

He added, “compared to most rubies, including those from Burma, which tend to be fairly included when reaching sizes above 5 carats, this ruby is relatively free of eye-visible inclusions. Considering its very large size, the vivid red colour, and clarity characteristics of this ruby give it an extraordinary potential to become one of the largest high-quality faceted rubies ever seen”.

Saudi Arabia announces new discovery of gold and copper ore in Madinah

JEDDAH: The Kingdom of Saudi Arabia on Thursday announced the discovery of new sites for gold and copper ore deposits in the Madinah region.

According to the Saudi Press Agency (SPA), the Saudi Geological Survey, represented by the Survey and Mineral Exploration Centre, said that the discoveries of gold ore were within the boundaries of Aba Al-Raha, the shield of Umm Al-Barrak Hejaz, in the Madinah region.

Copper ore was also discovered at four sites in the Al-Madiq area in the Wadi Al-Faraa region in Madinah.

These discoveries represent promising potentials for special copper deposits, from the mineral chalcocite (Cu2S), which is scattered, as well as some secondary copper carbonate minerals.

These will be added to the list of discoveries during 2022, which will accelerate the pace of mining investment in the Kingdom, and thus, will support the Kingdom’s Vision 2030 and the national economy. These discoveries in various locations in Saudi Arabia will contribute to the development of the national economy, with the influx of local and international investors to make investments in the thriving mining sector.

Saudi Arabia announces new discovery of gold and copper ore in Madinah | Business – Gulf News


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