September Newsletter – 30.09.19
ANNOUNCEMENTS
TOP NEWS
Nine countries join U.S. strategic minerals initiative
(Reuters) – The United States on Thursday said nine countries have joined its initiative to help discover and develop reserves of minerals used to make electric vehicles, part of an effort to cut the world’s reliance on China for the high-tech materials.
Secretary of State Mike Pompeo on Thursday met with foreign ministers from the nine countries on the sidelines of the United Nations General Assembly in New York.
The countries joining the United States include Australia, Botswana, Peru, Argentina, Brazil, Democratic Republic of the Congo, Namibia, the Philippines and Zambia.
Under the Energy Resource Governance Initiative (ERGI) announced in June, the United States will share mining expertise with member countries to help them discover and develop their minerals such as lithium, copper and cobalt, as well as advise on management and governance frameworks to help ensure their industries are attractive to international investors.
“U.S. companies require a certain set of above-ground conditions regardless of what’s below ground,” Frank Fannon, the top U.S. energy diplomat, said in an interview.
Washington grew more concerned recently about its dependence on mineral imports after Beijing suggested using them as leverage in the trade war between the world’s largest economic powers. That could interrupt the manufacture of a wide range of consumer, industrial and military goods, including mobile phones, electric vehicles, batteries, and fighter jets.
Water security a concern for the global mining industry, says Moody’s
Securing reliable sources of water is becoming a challenge for mining companies globally, says ratings agency Moody’s.
It notes that water is not only a vital resource in the mining process, but mines also use a significant amount of water in a variety of ways. Water is used for processing ore, smelting and refining, dust suppression, slurry transportation, cleaning of equipment and for use by employees.
While mining companies have become more efficient at managing their water use through recycling, Moody’s says miners still face elevated risks with securing sources for new and existing projects because of the locations of the mines.
Additionally, many mines are often located in countries where water is either scarce or competes with the local population requirements, such as Peru, Chile and even parts of Africa.
COMMODITIES
Rio Tinto sees rosy future for diamonds despite end of Argyle
LONDON – Rio Tinto is exploring for diamonds in Canada as part of its plans to stay in the sector despite the looming closure of its Argyle mine in Australia, known for extremely rare pink diamonds, the firm’s head of copper and diamonds said.
Demand and prices for the wider market have fallen as concerns mount about the world economy, and laboratory-grown gems have added to supply.
Coloured or particularly large diamonds, however, have held value, especially pink diamonds, 90% of which are produced by Argyle. That mine, the world’s biggest in carat terms, is expected to cease production by the end of next year.
Arnaud Soirat, Rio’s chief executive for copper and diamonds, said pink diamonds had risen in price by 500% since 2000. He gave no figures for the overall market, but producers have reported lower overall demand and prices.
Despite the overall bearish backdrop, Soirat said Rio Tinto planned to stay in diamonds.
“Diamonds is a business we like a lot. It’s a very high-margin business in line with our strategy of value over volume. It makes a lot of sense. We want to stay in the diamonds business,” Soirat said in an interview.
Rio is exploring in Canada, where it has a 60% interest in and operates the Diavik Diamond Mine.
Nio stock plunge casts doubt over China’s EV prospects
Heavy losses, job cuts and asset disposals at China’s largest electric vehicle maker even raise questions over whether a bubble could be about to burst. At the very least, tough times lie ahead.
China’s once-ballooning electric vehicle industry is showing signs of bursting after the country’s largest manufacturer reported the biggest quarterly loss since its inception, triggering massive job cuts and asset sales.
New York-listed Nio, dubbed the ‘Tesla of China’ by both advocates and journalists seeking a handy reference point, said it lost Rmb3.3 billion $462 million in the three months to June-end. That was 83% higher than in the same period last year and 25% higher than in the first quarter.
https://www.financeasia.com/article/nio-stock-plunge-casts-doubt-over-chinas-ev-prospects/454517
LEGAL AND REGULATORY
Miners push for U.S. Congress to vote on electric vehicle supply chain bills
“We don’t have great clarity on what the legislative timelines are,” said Keith Phillips, chief executive of Piedmont Lithium Ltd (PLL.AX), which is developing a lithium mine in North Carolina. “This pending legislation would be a big positive” to help secure investment.
The bills would, if passed and signed into law by President Donald Trump, streamline regulation; fund research into rare earths extraction from coal; allow formation of a rare earths co-operative, bypassing antitrust laws; push the Pentagon to seek new minerals supplies; and speed approval of mine permits.
The delay leaves the United States reliant on others for many specialized minerals as the global economy becomes electrified after more than a century of reliance on fossil fuels. The drive has gained visibility as millions of young people joined worldwide climate protests and leaders gathered at the United Nations to revitalize efforts to curb carbon emissions.
Senator Lisa Murkowski, chair of the U.S. Senate Energy and Natural Resources Committee, expressed confidence her legislation will eventually pass as it awaits a full Senate vote.
Senators Joe Manchin and Marco Rubio have introduced similar legislation, as have U.S. House of Representatives members.
INNOVATION AND TECHNOLOGY
Mining software major MineRP partners with Karuschain blockchain platform
MineRP, a global leader in mining software and consultations, and 78% owned by mining group Dundee Precious Metals, has signed a letter of intent to partner with blockchain platform Karuschain; “creating an extensive opportunity for further transparency, and ensuring the secure management, tracing, and tracking of critical data throughout the precious metals supply chain.”
MineRP, with over two-hundred employees and five offices on four continents, and existing partnerships with SAP, Deloitte, IBM and GE, has been closely working behind the scenes with Karuschain’s executive and technical team to collaborate on an integrated blockchain solution to meet the demands of their large customer base. Karuschain, founded by former executives with a combined industry experience of more than 270 years from companies such as JP Morgan, Shell Oil & Gas, BHP Billiton, AngloGold Ashanti, Intercontinental Exchange (ICE) and Farpoint Metals and Mining, enables end-to-end traceability and tracking for the global precious metals industry.
“Modular by design, Karuschain’s blockchain offers versatility that compliments and enhances a broad range of existing industry technologies and software systems therefore the solutions offered are customisable, scalable and interoperable. By implementing this technology to MineRP’s existing systems Karuschain will enable seamless traceability and audit reports through simple user-friendly dashboards, as well as the tracking of processes with a digital signature all the way from extraction to the final consumer.”
“This new partnership represents the way in which digitalisation is fueling the transformation of the mining and metals industries. In fact, more than $425 billion of value is said to be generated from the digitalisation of the mining and metals industry by 2025, the equivalent of a 3-4% increase in industry revenue during the same period, according to a recent analysis conducted by the World Economic Forum.
“I have been involved in some incredible growth businesses in my time, but I have never witnessed the synergy between two companies like this before,” said Richard Verkley, CEO & Founder of Karuschain. “This relationship is creating a new-world software solution that truly will become a leading industry force driving dramatic cost benefits, enhanced security, information innovations, and an opportunity for next-generation compliance.”
The future of mining is (still) people
What will drive the next wave of productivity improvements in the natural resources sector? Historically, improvements have come from the people who work in the sector. People develop new logistics and systems. People invent, adopt, and adapt new tools and technologies. People make decisions and solve problems, day in and day out. Every gain has come from the hard work and good ideas of people who know about mining.
But now a revolution in technology has finally reached the world of mining and extraction. Digital solutions and data platforms are changing how planning, decisions, and operations are managed.
As more and more companies integrate digital and data platforms into their operations, where should we look to find the next generation of improvements in our sector?
The answer is (still) people.
COMMODITY PRICES
