September Newsletter – 26.09.2022

  • OZ Minerals gives green light to $1.1 billion copper project
  • Europe upstages China as main driver for copper outlook
  • Glencore proposes loans to ensure production at Mopani copper mine
  • Daily Dozen | Forbes: Putin Doubles Down; The Metal Mining Boom; LA Metro Corruption
  • China has enough coal reserves to last another five decades
  • Steve Sisolak Is Backing a Massive Lithium Mine in Nevada. So Is a Chinese Company With Communist Leaders.
  • Russian aluminum imports are hurting US market, Rio Tinto CEO warns

OZ Minerals gives green light to $1.1 billion copper project

OZ Minerals Ltd., the target of a takeover attempt by BHP Group Ltd., has approved a A$1.7 billion ($1.1 billion) investment to develop its West Musgrave copper-nickel project in Western Australia.

All key regulatory approvals for the project are now in place, and OZ Minerals’ lenders have provided a new A$1.2 billion, 18-month syndicated facility to help develop West Musgrave, the Sydney-listed company said in a statement Friday. The final funding mix may include potential to sell a minority interest in the project to a strategic partner, it added.

“Investment approval for West Musgrave unlocks one of the largest undeveloped nickel projects in the world,” Chief Executive Officer Andrew Cole said in the statement. “It is set to generate about A$9.8 billion undiscounted cashflow over its 24-year operating life.”

The approval comes a week after people familiar with the matter said OZ Minerals was seeking about A$10 billion in a potential sale to BHP, after the miner knocked back a smaller takeover bid from the giant in August.

Europe upstages China as main driver for copper outlook

LONDON – Shrinking copper demand in Europe due to a manufacturing recession caused by the energy crisis will dominate market sentiment for some time with prices likely to retreat towards two-year lows early next year.

Copper prices typically react to the ebb and flow of demand in China, which accounts for half of global consumption estimated at around 25-million tonnes this year.

But this time the focus is on Europe, accounting for 15% to 20% of global demand for copper used in power and construction.

The region is facing surging gas and power prices after energy supply cuts, which Russia blames on Western sanctions over the Ukraine conflict. The European Union has made proposals to impose mandatory targets on member countries to cut power consumption.

“It would be rare to see an outright decline in demand, but I think that’s what we are going to see in Europe over the next 3-6 months,” said Citi analyst Max Layton.

“There will be a very substantial seasonal surplus between December and March, the combination of which is going to bring copper down to 6 600.”

Benchmark copper prices on the London Metal Exchange (LME) CMCU3 fell to $6 955/t in July, the lowest since November 2020 when Covid lockdowns hit manufacturing activity around the world.

Weak copper demand means surpluses.

Glencore proposes loans to ensure production at Mopani copper mine

Mopani Copper Mine

Glencore Plc and Zambia’s state-owned mining company ZCCM-IH could jointly lend Mopani Copper Mines $200 million to help cover running costs under a proposal made by the global miner last week, a letter seen by Reuters showed.

Glencore, which owned Mopani until March 2021, is prepared to lend up to $100 million as a short-term cash injection to Zambia’s Mopani copper mine, the global miner said in a Sept. 12 “non-binding letter of intent”.

Mopani Copper Mines is a large mine and smelter complex that Glencore sold to state mining investment firm ZCCM-IH in 2021 after drawing the ire of the Zambian government by putting it on care and maintenance in 2020 at a time of lower copper prices.

Switzerland-based Glencore however kept the exclusive right to sell Mopani’s production when it sold its majority stake in the asset to ZCCM-IH in a $1.5 billion deal funded by debt.

The more than 90-year-old mine has the potential to produce 225,000 tonnes of copper annually, nearly three times its expected 2022 production, Mopani Copper Mines officials have said, but it needs investment of at least $300 million to fund a complicated underground expansion.

Daily Dozen | Forbes: Putin Doubles Down; The Metal Mining Boom; LA Metro Corruption

PepsiCo is the latest major food and beverage company to stop production in Russia in a stand against the country’s invasion of Ukraine. President Joe Biden’s pick to lead the Federal Aviation Authority is under fire for allegations of corruption from when he helmed Los Angeles Metro. Hundreds of new mines may be needed to satisfy growing demand for lithium-ion batteries in the push toward electric vehicles.–forbes-putin-doubles-down-the-metal-mining-boom-la-metro-corruption/?sh=7205ca9370ed

China has enough coal reserves to last another five decades

China has enough coal for the next five decades and sufficient oil to last at least 18 years at current rates of production, according to the Ministry of Natural Resources.

Main north-south railway line, Xinzheng, Henan, China

The latest annual tally of reserves released on Wednesday shows an endowment of fossil fuels that stretches well beyond China’s 2030 deadline to peak its carbon emissions. In the case of coal, the worst fuel for global heating, there’s enough in the ground to take China past even its 2060 ambition to achieve carbon neutrality.

China consumes over 4 billion tons of coal a year, most of it domestically mined with imports making up less than a tenth of its needs. In 2021 its reserves stood at around 208 billion tons, 28% more than the prior year’s level, while the outlay on exploration rose 10% to 1.3 billion yuan ($184 million), according to the ministry.

For oil, reserves edged up 2.8% to 3.7 billion tons, which would theoretically be enough to get the nation’s drillers through most of the next two decades, assuming stable output of about 200 million tons a year. Natural gas reserves were a touch higher at 6,339 billion cubic meters, enough for the next three decades.

However, China still relies on imports for most of its oil and much of its gas. Investment in exploration over the year rose 13% to 80 billion yuan, with breakthroughs made in finding new reserves in Sichuan, Xinjiang and Inner Mongolia, as well as the Bohai Bay, the report said.

Steve Sisolak Is Backing a Massive Lithium Mine in Nevada. So Is a Chinese Company With Communist Leaders.

Chinese lithium giant Ganfeng’s role in Nevada mining project prompts concern that Dems’ green energy push benefits communist nation

Democratic governor Steve Sisolak is backing a foreign company’s plan to deliver America’s green energy future through a massive Nevada lithium mine. That company’s largest shareholder is a Chinese enterprise led by known Chinese Communist Party members, prompting concern that the project could ultimately benefit America’s top adversary.

Sisolak in September 2020 approved $8.5 million in tax abatements for Lithium Americas, a Canadian company that intends to mine tens of thousands of tons of lithium—the key component in electric vehicle batteries—from a site in northern Nevada. Another top Nevada Democrat, Sen. Catherine Cortez Masto, in 2019 met with the company’s executives and two years later persuaded her colleagues on the Hill to scrap legislation that would have imposed costly royalties on Lithium Americas and other hardrock miners.

Russian aluminum imports are hurting US market, Rio Tinto CEO warns

Rio Tinto Plc’s top executive is raising the alarm that the unfettered flow of Russian aluminum into the US is making North American producers less competitive.

Russian imports, which remain exempt from US sanctions, are flowing into the country unrestricted when allies like Australia continue to face restrictions left over from the Trump administration, Chief Executive Officer Jakob Stausholm said in an interview at Bloomberg’s New York headquarters. His comments are the most candid about the aluminum industry since taking the helm of Rio at the start of 2021.

The warning from the head of one of the world’s largest aluminum producers comes as US trade data shows Russia was the third-largest aluminum exporter to the US in August. Monthly imports from Russia were up almost 60% last month from April levels even as worldwide buyers refused to purchase Russian metal due to its invasion of Ukraine.

Trevali to close Burkina Faso zinc mine after deadly flood

Canadian mining firm Trevali will close its Perkoa zinc mine in Burkina Faso, a company official told Reuters on Friday, following a flood at the mine in April that killed eight workers.

The miners drowned in the underground passages of the mine in Sanguie province after unexpected torrential rain during the West African country’s dry season.

The mine, one of Trevali’s three main operating assets, has been closed since.

“The funds still available…are insufficient to complete the rehabilitation of the mine,” said Ditil Moussa Palenfo, country director of Nantou Mining, the Trevali entity that owns Perkoa.

“Funds are barely sufficient to cover severance pay for terminated employees.”

A court in Burkina Faso last week handed out suspended sentences to two executives after finding them guilty of involuntary manslaughter for the flood disaster.


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