February 27th, 2024 - The Mine Wire

METALS MARKET

Nickel was the big winner with a significant gain just over 7% this past week. Coal was up 6.61% and is up almost 10% this past month. But the real commodity winner this past month isn’t from the energy or metal category. The winner continues to be cocoa which was up another 14.75% this past week, 45.58% this past month and up a staggering 153.55% this past year! Time to start stockpiling chocolate bars? 🍫

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

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:

• 🇨🇦 British Columbia’s Minister of Water, Land and Resource Stewardship, Nathan Cullen, announced last week that the NDP government would pause and re-evaluate it’s proposed Land Act changes that would give First Nations a veto over use of Crown Land. Also this week, The Narwhal and The Globe and Mail did a joint investigative report on taxpayer liability in covering the cost of cleaning up mine pollution when companies go bankrupt in the province.

• 🇨🇦 In Quebec, The Mitchikanibikok Inik First Nation, also known as the Algonquins of Barriere Lake, had their judicial review heard in Quebec’s Superior court. They say that Quebec's mining act breaches the province's duty to consult and is asking the Quebec Superior Court to deem it unconstitutional.

• 🇨🇦 Meanwhile in Ontario, Cat Lake First Nation is seeking an injunction to halt First Mining Gold’s access road in it’s traditional territories, pending judicial review.

• 🇺🇸 The United States expanded its Russian sanctions list this past week when it added another 500+ individuals and entities. These included an aluminum product producer, a steel pipemaker, gold miners, as well as mining investment companies. Concern of sanctions sent Nickel to a 10 week high despite the fact that the main driver of low nickel prices has been Indonesian over-supply.

• 🇺🇸 The U.S. Department of Justice brought charges against Yakuza boss, Takeshi Ebisawa, who allegedly tried to traffic material containing uranium and weapons-grade plutonium from Burma to other countries. The WSJ covered how he and his associates sold weapons like rocket launchers and illegal drugs.

• 🇺🇸 Wyoming is looking at a tax reform proposal that would exempt property taxes for homes up to $1 million in exchange for boosting Wyoming’s sales tax by 2%. Travis Deti, Executive Director of the Wyoming Mining Association, raised concerns about the impact increased taxes will have on miners as they purchase goods and services despite a proposed rebate being considered for the energy sector.

• 🇺🇸 Idaho’s Senator, Jim Risch, writes an opinion piece in Newsweek on the need for the United States to overhaul the federal government's permitting process for mines so that the U.S. can secure its supply chains and compete with China.

• 🇨🇴 Colombia is proposing a bill that would ban new exploration and production contracts for coal. The bill would also give the government the ability to expropriate mining assets in some cases. The bill is currently open for comment.

• 🇮🇳 Meanwhile in India, the government received 40 bids for 32 commercial coal mines that were made available for auctioning in December. India is the world’s second largest user of coal and the hope is that private company involvement will help boost production.

• 🇨🇰 The Cook Islands has made amendments to its Seabed Minerals Act this week, including replacing the term "mining" with "minerals harvesting ... to reflect the actual activity that takes place". It certainly sounds more environmentally friendly, so we can understand the word change. 🇬🇧 The UK at the same time has launched an environmental science network on deep-sea mining to provide evidence on its impact.

• 🇲🇬 Madagascan President Andry Rajoelina's ex-chief of staff was convicted in a London court on Tuesday of offering to help precious stone miner Gemfields win lucrative mining rights in exchange for substantial bribes.

• 🇹🇭 🇿🇦 Both Thailand and South Africa announced incentives for their EV sectors as they look to grow their footprint.

• 🇧🇫 Burkina Faso suspended export permits for small-scale gold production as it looks to clean up the sector.

• 🇸🇪 Sweden's Climate and Environment Minister Romina Pourmokhtari has announced the launch of an investigation to abolish the country's ban on uranium mining which came into force in 2018. Sweden has 6 nuclear reactors which produce about a third of Sweden’s electricity and the country has roughly ¼ of Europe’s known uranium reserves.

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MINING MATTERS FROM AROUND THE WORLD 🌎

• BHP’s (BHP) after tax profit fell 86% from $6.5 billion to $927 million in the six months to December 31 with most of the pain coming from a $5.6 billion write-down of the value of the company’s nickel business. Shareholders still received a dividend of $0.72, but down from $0.90 previously.

• Rio Tinto’s (RIO) profit fell 12% but resulted in a higher dividend of $2.58 per share, up from $2.25 a share a year earlier. While Iron Ore production improved, other areas like Aluminum, Copper and other minerals all saw significant declines. Watch Rio Tinto’s CEO talk with Bloomberg here.

• Teck Resources (TECK) reported its 4th quarter results. Net sales amounted to $3.02 billion, a 30.5% year-over-year increase. The gross profit was also up 16% from the year-ago quarter. Teck benefited from higher steelmaking coal volumes and higher copper prices.

• Newmont Corporation (NEM) came out with quarterly earnings of $0.50 per share compared to earnings of $0.44 per share a year ago. The yearly dividend was cut from $1.60 a year ago to $1.00 per share. The Gold miner also announced it plans to sell mines in Canada and Australia as part of its optimization strategy post-Newcrest purchase.

• Antofagasta (ANTO.L), the Chilean miner, posted a 5% increase in 2023 profit compared to a year earlier. EBITDA increased to $3.1 billion from $2.9 billion in 2022. Despite the increase the full year dividend was cut to 36 cents a share from 59.7 cents a share a year earlier.

• Fortescue’s (FMG) first-half profit surged 41%. Fortescue’s revenue from iron ore jumped 24% to $8.71 billion in the six months through December. Unlike BHP and Rio Tinto, Fortescue gets almost all of its revenue from iron ore, so it benefited from high prices last year. The dividend was up 44% from a year earlier at $0.71 a share.

• First Quantum (FM) reported a net loss of $1.45 billion for the quarter ended Dec. 31, compared with a profit of $117 million a year earlier. The company is taking a host of restructuring measures to deal with the closing of its Cobre Panama mine, but is also seeking $20 Billion from Panama through international arbitration.

• Vale's (VALE) Q4 EBITDA rose to $6.7 billion, a $2.7 billion increase from the prior year. Vale benefited largely from stronger iron ore prices. Vale will pay out $2.4 billion in dividends in March.

• Ivanhoe Mines (TSX.IVN) reported a profit of US$303 million, a record normalized profit of US$388 million and record adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of US$604 million in 2023. Despite this, shares slumped Monday as Ivanhoe warned that costs at their Kamoa-Kakula mine could go up 17%.

• U.S. activist investor Elliott Investment Management is setting up a new venture, called Hyperion, to go after mining assets worth more than $1 billion. The new venture will be led by former Newcrest Mining CEO Sandeep Biswas and Elliot is willing to leverage up to $65 billion to go after deals.

MINING BITS

• 🇹🇿 Tanzania is using drone technology to explore its land in order to provide comprehensive insights into the country's mineral wealth.

• 🇨🇳 Chinese researchers used muons imaging technology to detect the internal structure of a mineral deposit. Is this the future of mineral exploration?

• 👺 A Pennsylvania thrift store found a rare 14-karat gold LEGO mask, in a box of donated goods. The mask sold at auction for over 18k. Only around 25 were made by LEGO.

• 🧠 American’s are investing in AI, anti-aging research and asteroid mining among others.

• 🚓 A Texas man was convicted for securities fraud this week after making almost 1.7M off illegal trades. How did he do it? Eavesdropping on his wife’s business calls while they were both working from home.

• 🇧🇼 Four large diamonds were discovered by Lucara Diamond Corp. in Botswana including one weighing 320 carats. Large uncut diamonds have been sought after by boutique and luxury houses over the past years as reported here.

• ⛑️A good reminder by Safety & Health magazine for miners to use extra caution during cold weather particularly given the risk of cold stress.

• 🇸🇧 A case study from Solomon Islands looks at the social impacts of critical mineral exploration on Indigenous peoples’ lands. The author argues that social impacts need to be explicitly considered and proactively addressed to ensure just transition outcomes and minimize barriers to the realization of a low-carbon future.

• 🛁 Do you like Epsom salts in your bath. You definitely are not alone. The Epsom salt market was estimated to be worth around $4.53 Billion in 2023. It is estimated that the market could be worth as much as $7.7 Billion by 2033 as demand for its wellness products continues to rise steadily.

• 🎈 MIT’s Technology Reviews looks at Helium, its rising price and the challenge of bringing on new production despite growing demand for this essential element.

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