December 4th, 2024 - The Mine Wire

METALS MARKET

In central bank news, South Korea cut its interest rate to 3.00% as it prepares for an incoming Donald Trump presidency and potential tariffs. The nation registered a record trade surplus of $44.4bn in 2023 with the United States, so we would expect it to be on President Trump’s radar.

^{**For our chart above we are taking prices from Tuesday 4pm EST to Tuesday 4pm EST, so not the typical week of Monday through Friday.}

KEEPING AN EYE ON GOVERNMENT DECISIONS

Here are some of the notable government policy moves this week:

• 🇳🇴 The Norwegian government has shelved deep sea mining until at least 2026 as part of a deal with the Socialist Left Party to get it’s annual budget passed. “We have used our negotiating power to stop licensing for deep sea mining for minerals,” Kirsti Bergsto, leader of the Socialist Left, told reporters in Oslo. The country has been ruled by minority and coalition governments since 1981. Norway’s next election is scheduled for September 2025. (Reuters)

• 🇵🇪 Peru has named Jorge Montero as the new Minister of Mines and Energy. The former Minister, Romulo Mucho, was removed by congress last week after small-scale miners protested outside the Peruvian legislature's building in Lima and halted traffic throughout the South. Small-scale miners want an extension to a 2 year temporary permit that has allowed those without permits to operate. However, legislators and congress felt that this has increased illegal activities while the former Minister did little to resolve the issue. Not surprisingly, congress also approved an extension of 6 months for these small-scale miners to give them more time to seek formal approval of their operations. (Reuters)

• 🇸🇻 El Salvador President Nayib Bukele called the country’s 7-year ban on mining “absurd” and says he supports gold mining in the country. In 2017, El Salvador banned all metals mining in order to protect the country’s water resources from contamination. The President is very popular after dealing with the country’s famous street gangs and therefore, it is likely these changes will go through. (AP News)

• 🇵🇦 After losing arbitration in 2020, Panama has finally decided to pay the arbitration award to Dominion Mineral Corp. which amounts to $26m. Meanwhile, the country was also downgraded by S&P Ratings this week to BBB- from BBB. Fitch Ratings had already downgraded Panama to junk status in March. Not surprisingly, the country’s notes lost 5.6% last quarter and are the worst performing among its emerging-market peers. Maybe it’s time for them to resolve the First Quantum issue? (La Estrella) & (S&P Global)

• 🇦🇺 The Western Australian government announced a $150m package to help lithium miners in the state. The package includes a $50m interest-free loan fund as well as the waiving of some government fees. State enterprises including water and energy providers will waive government fees for the lithium industry in a bid to assist with downstream processing. Port charges and tenement fees will also be waived. (Financial Review)

• 🇨🇦 The Ontario government introduced a new regulation under the Mining Act that would make it easier to recover residual metals and minerals from mine waste that could be found at operating, closed or abandoned mine sites. Once the new regulation comes into force on July 1, 2025, Ontario will become the first jurisdiction in Canada to enable a dedicated regulatory pathway to recover residual minerals from mine waste. (Ontario Government)

• 🇺🇸 A coalition of 11 state Attorney Generals, lead by Texas, is suing BlackRock, State Street and Vanguard. Their lawsuit alleges that the powerful three investment management companies used their influence from investing in publicly traded coal companies to reduce coal production and therefore increased utility prices for American consumers. We will keep an eye on this one. (E&E News)

• 🇺🇸 President-elect Donald Trump threatened tariffs of 100% against the nine BRIC countries if they work to undermine the U.S. dollar. Trump, in a Truth Social post, said: “We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.” (AP News)

• 🇨🇳 Last but definitely not least, China banned exports of the critical minerals gallium, germanium, and antimony as well as superhard materials to the United States. These all have widespread military applications. The move was in response to the United States restricting semiconductor exports to China that could be used in military or AI applications. Perpetua Resources (TSX: PPTA) was up over 17% on the day as it has an antimony project in Idaho. (Reuters)

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MINING MATTERS FROM AROUND THE WORLD 🌎

• 🇦🇺 🇨🇳 Fortescue announced that it intends to purchase over 100 pieces of zero emissions Heavy Mobile Equipment from Chinese heavy machinery manufacturer, XCMG. The contract is worth up to US$400m and is XCMG’s largest contract outside of China for mining equipment. It will see battery electric wheel loaders, wheel dozers, water carts, float prime movers and graders delivered to Fortescue’s Pilbara mining operations by 2030. While this isn’t as big as the $2.8bn deal that was announced at MINExpo with Liebherr, this has to be pretty exciting for XCMG. Mine workers in the w/mining forum on Reddit were less enthused and were predicting maintenance, parts supply and other issues with the perceived lower cost Chinese equipment. What are your thoughts? (Fortescue)

• 🇦🇺 Australian gold miner Northern Star Resources (ASX: NST) will buy De Grey Mining (ASX: DEG) for AUS$5bn in an all share deal. The transaction price is a 37.1% premium to the last close and 43.9% premium to De Grey shareholders based on the 30-day Volume Weighted Average Price. Stuart Tonkin, Northern Star’s CEO said, "De Grey’s Hemi development project will deliver a low-cost, long-life and large-scale gold mine in the Tier-1 jurisdiction of Western Australia, enhancing the quality of Northern Star’s asset portfolio to generate cash earnings." (Northern Star Resources)

• Anglo American (LON: ALL) continued to be a busy bee as it put 16m shares up for sale in Anglo American Platinum (Amplats), worth about $535m. The offering will raise money for Anglo while helping reduce the number of shares distributed to Anglo shareholders after the Amplats spinoff, which is planned by the end of 2025. (Reuters)

• 🇧🇷 Peru’s Minsur S.A. will sell its Brazilian subsidiary Mineração Taboca, which operates the Pitinga mine and the Pirapora smelter, to China Nonferrous Trade Co. Ltd., a subsidiary of China Nonferrous Metal Mining Group Co., for $340m. Taboca is Brazil’s largest tin producer. (Int’l Tin Association)

• 🇵🇹 Portuguese energy company Galp (ELI: GALP) has cancelled plans to build its Aurora lithium refinery in Portugal after Northvolt, its 50/50 joint venture partner, pulled out. Not surprisingly, Galp has found it difficult to find a new partner with Chinese oversupply and depressed lithium prices. The project was estimated to cost $1.05bn. An unfortunate economic development loss for the Southern European nation. (Reuters)

• 🇦🇷 McEwen Copper is looking to raise $2.5bn from investors to help develop its Los Azules copper mine in Argentina. Company Vice President Michael Meding told Reuters that the company is 4 to 6 weeks away from getting its environmental permits and hopes to start construction near the end of 2025. McEwen has already invested $400m into the project with notable backers like Stellantis and Nuton, a division of Rio Tinto. (Reuters)

• 🇦🇺 Rio Tinto and Sumitomo Metal Mining will partner on the Winu copper-gold project in Western Australia. Rio Tinto will continue to develop and operate Winu as managing partner and SMM will pay Rio Tinto $399m for a 30% equity share of the project. This includes $195m upfront and $204m in deferred considerations contingent on milestones and adjustments to be agreed on. (Businesswire)

• Bloomberg reported that De Beers has given in and reduced its prices by 10% to 15% in its final sale of the year. The company holds 10 sales per year and usually buyers have to take De Beers terms. However, inflation has taken its toll on the luxury goods market and the rise of lab-grown diamonds has not helped. With Anglo American looking to get out of the diamond business, there is no doubt the pressure is on at De Beers. (BNN Bloomberg) 

• 🇬🇧 UK-based Tungsten West (LON: TUN) is looking to get government support for its Tungsten mine near Plymouth, England. Their Hemerdon Mine has the 2nd largest deposit of Tungsten globally. As the BBC points out, 80% of the worlds production is met by China and there have been insinuations that Tungsten could be next on the export ban list. What do we think? The UK government should definitely be providing some supports to get this mine operational. Maybe Tungsten West should look for some U.S. Department of Defense funding given China is likely to include Tungsten in its export bans? (BBC)

• 🇲🇬 Energy Fuels (TSX: EFR) announced that the Madagascar government has lifted its suspension on the company's 100%-owned Toliara critical minerals project. The Suspension was imposed by the Government in November 2019 pending negotiation of fiscal and other terms. In October 2024, Energy Fuels acquired Base Resources and the Toliara Project which currently holds a mining permit that allows production of titanium and zirconium minerals, including ilmenite, rutile and zircon. (Cision)

MINING BITS

• 🇬🇧 Congratulations to Imperial College London and Rio Tinto which have launched the Rio Tinto Centre for Future Materials. The Centre, created with an investment of $150m from Rio Tinto over the next 10 years, will connect some of the world’s best researchers with the capability and commitment of industry to help transform the way materials are sourced, processed, used and recycled to make them more environmentally, economically and socially sustainable. The Centre will act as a hub for collaboration with other leading global institutions, bringing together four new academic partners: The University of British Columbia, Vancouver, The University of California, Berkeley, The University of the Witwatersrand, Johannesburg, and The Australian National University, Canberra. (Imperial College)

• 🌏 Even though the data is a few years old, we enjoyed this visual capitalist infographic which shows the 11 countries that rely heavily on mining exports (60%+). The top three were Botswana (92%), Guinea (87%) and Mali (85%). Of the 11 countries listed, 8 are in Africa, 3 in South America and 1 in Asia. Can you guess which countries they are? (Visual Capitalist)

• 🧠 We enjoyed this McKinsey & Co article on CAPEX and mining project delivery. The authors say their estimates show that cost and scheduling challenges affect 83% of recent major mining and metals projects, with capital expenditure overruns of more than 40% and schedule delays of 20 to 30%. Looking at megaprojects valued at $1bn or more, the result is even worse: on average, cost overruns run at least 79% higher than initial budget estimates, while delays average out to 52% higher than initial time frames. They say that the best performers in project deployment in mining are intervening early with a clear focus on five aspects: investing in rigorous feasibility studies, bringing up and improving the economics early, enabling project delivery excellence, focusing on execution productivity, and fostering a sustainable, healthy culture that enables performance. (McKinsey & Co.)

• 🇧🇷 Two senior police officers were arrested in Brazil on suspicion that they took bribes and provided security for illegal gold mining activity in the Amazon. Another 36 officers were removed from their jobs for suspected participation in the protection scheme. The country is battling a surge in illegal gold mining as high prices lure many into the illegal trade. (Reuters)

• 🇦🇺 Congratulations to Dr Rebecca Sproule who has been appointed Chief Government Geologist of Tasmania’s Geological Survey. She is a Tasmanian who studied geology at the University of Tasmania, as well as in Victoria. She is currently Principal Geoscientist for Rio Tinto based in Utah. (Tasmanian Government)

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