December 11th, 2023 - The Mine Wire Soft Launch

MARKET COMMODITIES

Market Analysis: Commodity prices fell which may be an early indicator that higher interest rates are starting to have an impact in bringing down inflation and demand. Specific commodities like Natural Gas are down due to a warmer than expected winter, while safe haven metals like gold and silver are still up year on year.

GOVERNMENT

COP28 WRAPS UP WITH DIFFERENCES BETWEEN OPEC MEMBERS & OTHER NATIONS TAKING CENTRE STAGE

COPs are convened under the United Nations Framework Convention on Climate Change (UNFCCC), a multilateral treaty adopted in 1992. These formal meetings of the Conference of the Parties (COPs) are where governments assess global efforts to advance the key Paris Agreement aim of limiting global warming to as close as possible to 1.5 °C above pre-industrial levels.

At COP28, a clear division has formed between OPEC nations and their allies and other groups that want commitments to “phase out” fossil fuels. In the crosshairs are the future of oil, gas and coal. Regardless of the outcome of COP28, it is clear that climate change and the phase out of fossil fuels will continue to be a hot topic.

What is certain is that any solution to transition away from these fossil fuels will rely on mining. As the IEA points out, “Critical minerals such as copper, lithium, nickel, cobalt and rare earth elements are essential components in many of today’s rapidly growing clean energy technologies - from wind turbines and electricity networks to electric vehicles.”

A Transport & Environment report that came out last week showed that carmakers have only secured less than 1/5 of key battery metals they need up until 2030. Tesla & BYD are well ahead in terms of their entire supply chain while some a number of carmakers are very far behind in securing the critical minerals they will need in the next years.

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KEEPING AN EYE ON GOVERNMENT POLICY

With many forecasting significant demand for metals into the foreseeable future, governments are all over the place with their policies. Here are some of the notable moves this week:

• 🇵🇦 The Panama government shut down First Quantum’s Cobre Panama mine after the supreme court ruled last month the contract to operate the mine was unconstitutional. Despite contributing 5% to the national GDP, protests where as many as 250,000 of the 4.4 million population marched, left the government no choice but to act.

• 🇿🇼 Zimbabwe which banned the export of unprocessed lithium in December 2022, has given lithium mining companies until March 31st, 2024 to submit beneficiation plans. With the largest lithium deposits in Africa, Zimbabwe is trying to keep as much of the value chain within its borders and therefore, is requiring all new miners to have beneficiation plants.

• 🇳🇴 The minority Norwegian government and two opposition parties agreed on a framework to allow seabed mineral exploration. Time will tell whether this leads to full-scale mining operations in the future.

• 🇺🇸 The United States Department of Energy came out with their Interpretation of Foreign Entity of Concern. It states that any company with 25% of shares, voting rights or board seats held by 🇨🇳 Chinese, 🇰🇵 North Korean, 🇷🇺 Russian or 🇮🇷 Iranian investors will not qualify for the billions in incentives available through the Inflation Reduction Act - 2022.

MINING MATTERS FROM AROUND THE WORLD 🌎

• 🪨 Rio Tinto plans $6.2 billion investment in Guinea iron ore project.

• 💲Mining Giant Vale says that China can’t dictate the price of iron ore. Despite China’s criticism of high iron ore prices, Vale has argued that supply and demand will continue to guide prices.

• 📈 China’s CMOC lifts output of cobalt by 144% in the past nine months and is on pace to become the largest global producer by 2025. Despite a fall in prices, Chinese companies are aggressively expanding their output in places like the Congo and Indonesia to expand their overall market share. Seen as critical to China’s EV industry, many suspect state support that makes the operations viable, even in downturns.

• ⛏ Anglo-American to reduce iron ore and copper output in the near term to lower costs. It’s stock has fallen 36% this year while other companies like Rio Tinto (+11%) and BHP (+5%) have seen gains.

• 🛻 Ford will take a direct stake in a battery-nickel plant under construction in Indonesia in order to make sure it has direct access to the source materials it needs.

ENVIRONMENT & LAW

AMAZON SHOWDOWN: COLOMBIAN & BRAZILIAN AUTHORITIES BLOW UP ILLEGAL GOLD MINES HALTING ILLEGAL PRODUCTION & MERCURY POLLUTION

Authorities this week blew up 19 illegal mines in the amazon, halting 1.5M in gold production per month. Some have estimated that these illegal operations are raking in as much as $2.5 billion per year in 🇨🇴 Colombia alone. These illegal operations have been linked to other crimes like money laundering, corruption, human trafficking and illegal arms purchases.

Earlier this year, a 🇧🇷 Brazilian news outlet ran an in-depth story with corresponding video on just how pervasive illegal narco-mining has become on the Brazilian side of the Border.

Unfortunately this problem extends borders and is prolific in many third world nations as reported by Science earlier this year. With billions in value being extracted each year, this type of illegal, small scale mining is on the rise and is unlikely to stop as long as gold prices remain high and the consequences of being caught remain low.

MINING BITS

• ♻️ Caterpillar invests in recycling technology developer Nth Cycle as part of a push to boost the reuse of metals used to make batteries and construction equipment.

• 💵 Lithium deposits in California’s Salton Sea may hold enough lithium to produce 375 million electric vehicles.

• 💰 With gold up 13.47% in the past year, here are 5 ways to invest to gain exposure to this safe haven asset.

• 🚢 Teck Resources is partnering with with Oldendorff Carriers to invest in a wind-propulsion system for one of the bulk carriers that will ship metallurgical coal, reducing emissions by 55%.

• 🚍 Glencore starts operation of first autonomous trucks at Minera Lomas Bayas.

• 🚀 Rapid growth in the global mining explosives market.

• ⚙️ Reducing the Use of Cyanide in Mining with Glycine Leaching Technology.

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