February 13th, 2024 - The Mine Wire

METALS MARKET

We haven’t covered it above but Palladium prices fell below Platinum for the first time since 2018. The metal dropped 5.63% this past week.

The largest gains were seen in Uranium (6%) and Titanium (11.43%) while other commodities like WTI Crude (5.69%) and Cocoa (12.93%) saw major gains.

KEEPING AN EYE ON GOVERNMENT DECISIONS

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:

• 🇺🇸 🇺🇿 🇹🇯 🇰🇬 Do you recognize these flags? On February 27th join an event from the US State Department with U.S. Ambassadors to Uzbekistan, Tajikistan, and Kyrgyzstan and Elena Son, Executive Director of the American-Uzbekistan Chamber of Commerce, the U.S.-Kyrgyzstan Business Council, and the U.S.-Tajikistan Business Council, to learn about the three countries’ mining and emerging critical mineral sector and the experiences of U.S. companies operating in these evolving markets.

• 🇨🇦 Canada’s trade minister Mary Ng implied that the Canadian government will support First Quantum and said, "I will stand up for Canadian companies where they operate, and First Quantum has operated in Panama for many years".

• 🇦🇺 Australia will propose setting up international standards for ethical and environmentally friendly mining in an attempt to command higher prices for its minerals amid a sluggish market and competition from countries like Indonesia. We could see this being a selling point particularly for EV’s where the consumer is looking to lower their carbon footprint.

• 🇳🇨 🇫🇷 The French government plans to offer fresh subsidies and loans for a New Caledonia nickel plant co-owned by commodities group Glencore, who has already signaled they want to sell their stake. New Caledonia, an island between Australia & Fiji but French controlled has some of the largest nickel reserves in the world. At first glance, the support doesn’t look like it’ll be enough to impact the decision of operators given the massive slump in nickel prices recently.

• 🇪🇺 The European Parliament passed a plenary resolution in response to Norway’s move to allow seabed mining. MEP’s called on the Commission and EU countries to work towards an international moratorium until the impact of this activity on the marine environment has been sufficiently understood and harm to marine ecosystems prevented. The resolution was strongly approved by 523 votes in favour, 34 against, and 59 abstentions.

• 🇪🇺 This same week, the European Council and Parliament agreed to grant a two-year delay for sector-specific standards proposed in its Corporate Sustainability Reporting Directive (CSRD).

• 🇺🇸 More and more we are seeing state concern over water usage and the impact the mining sector has. A bill is moving through the Utah legislature which rewrites how mineral extraction companies can use water that hits the Great Salt Lake. In Minnesota we are seeing a piece of legislation to protect the Boundary Waters. In other locations like Nevada we are seeing concerns related to wildlife as well as watershed concerns.

• 🇲🇽 Mexico’s president is proposing a ban on open-pit mining due to the negative impact on the environment and the adverse health effects on communities living nearby. Major open-pit projects in Mexico include Newmont's Peñasquito, Fresnilllo's Herradura, Torex Gold's El Limón-Guajes, and Agnico Eagle Mines' Pinos Altos.

• 🇨🇳 China was responsible for 96% of coal plants constructed in 2023. Despite this, China’s installed wind and solar capacity will overtake coal for the first time this year with roughly 40% capacity, compared to coal’s 37%. China plans to use coal for backup generation and given their move into nuclear power plant construction, we could see a reduction in coal usage in the next decade.

• 🇳🇵 Nepal’s Department of Mines and Geology grants permission to 156 mining companies to extract minerals.

• 🇳🇷 Once an island of prosperity due to its phosphate, Foreign Policy covers the decision of cash-strapped Nauru to support seabed mining.

• 🇬🇾 The Guyana Government is looking to reduce deforestation caused by miners with its mineral mapping exercise, for which some $400 million has been allocated in Budget 2024.

• 🇳🇬 The Deputy Speaker of the House of Representatives in Nigeria, Benjamin Kalu, says the house will enact a law to address issues relating to untapped mineral resources in Nigeria. At the moment, mining activities contribute a measly 0.3% of GDP.

• 🇿🇲 Zambia is keen to negotiate larger holdings in new mining projects in order to raise its revenue and boost spending by investors on social projects, according to mines minister Paul Kabuswe.

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MINING MATTERS FROM AROUND THE WORLD 🌎

• Congratulations to Kathleen Quirk who has been announced as the new CEO of Freeport-McMoRan effective June 11th, 2024. She has been with the company for 35 years.

• 🇰🇷 South Korea has revised its electric car subsidy program, lowering the overall maximum amount to 6.5 million won (roughly $4,900 USD). The maximum subsidy is based on quite a few factors, but new regulations on battery density will benefit domestic producers who use Nickel Manganese Cobalt batteries as opposed to Lithium Iron Phosphate ones. While Hyundai Motors will qualify for the full subsidy, Tesla is expected qualify for about 3 million won ($2,250 USD). Time will tell if the subsidy gap impacts consumer behavior.

• 🇪🇹 Ethiopia’s Minister of Transport and Logistics, Alemu Sime, recently stated that the country will not allow cars that are not electric to enter the market. The government will focus on charging infrastructure as well as incentives to promote electric vehicle usage.

• Cameco reported its Q4 results with $80 million in quarterly profit, compared to a loss a year ago.

• BHP and Rio take the competition out of going green as they announce they are working with Australian manufacturer BlueScope Steel (BSL.AX) to try and decarbonize how the alloy is produced. Iron Ore accounts for the majority of both companies revenue and it’s Australia’s top export, worth A$130 Billion ($85 Billion USD).

• Meanwhile, BHP has signaled that it needs to start cutting costs in its West Australian nickel operations in order for the mines to have any future. Even China and Indonesia are looking at cutting nickel output in order to see a rebound in prices.

• In 2013 Glencore applied for a mineral lease for the McArthur River mining project in Australia. The high court has sided with aboriginal groups and stated that they must approve of the project before it can go forward on their traditional lands.

• Anglo-American released a production report that showed copper was up 24% in 2023 compared to the previous year. The CEO also indicated that the company is in early stage exploration in Zambia, looking for copper and cobalt.

• Billionaire Gautam Adani secures ore for world’s largest single-location copper smelter in Gujarat.

• The London Metal Exchange is facing a new legal headache after a group of activists sued it for allegedly breaking UK law by allowing metals produced in environmentally damaging ways to trade on its marketplace.

• Canada Nickel is planning to build a nickel processing plant in Ontario for EVs that would cost $1 billion dollars to build. It plans to ask the provincial and federal governments for support. At a time when a glut of nickel from Indonesia has flooded the market, many nickel operations have shut down and are asking for bailouts or claiming bankruptcy.

MINING BITS

• 💲Take a look at the richest billionaires in the mining industry. Gina Rinehart takes the top spot with a net worth of $30.3 billion.

• 🇯🇵 🚂 Tobu Railway in Nikko, Japan, has started testing biofuel to replace coal in its coal-fired steam locomotives. It is partially replacing coal with biocoke, made from buckwheat chaff, wood chips, coffee grounds and other materials.

• 🍫 That chocolate bar might cost you more in the future. Cocoa prices were up for a 9th straight day this past week as systemic supply shortages have panicked the market.

• ⚒️ Check out this article and graph that shows the rise and decline of coal mining jobs in the United States from 1970 - 2022. From 200,000 jobs at the 1980 peak to around 50,000 today.

• 🪴Professors and grad students at the University of Idaho are studying Phytomining, which uses plants to absorb and mine elements.

• 🌕 Lunar Resource Extraction Startup Interlune Raises $15.6M. Founded by a number of former Blue Origin executives, it will be worth keeping an eye on this one.

• ⌚ Check out Hublot’s Big Bang Unico Green Saxem that uses rare earth metals like thulium, holmium, and chromium. At $116,000 USD a pop, it is a bit out of our price range.

• 🚗 Check out this Visual of the Future Demand for Battery Minerals.

• 🇦🇱 A massive hydrogen reservoir discovered beneath an Albanian mine could be an untapped source of clean energy.

• 😕 Does The World's Largest Nickel Miner Need To Choose Between China And The US? Video here.

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