February 6th, 2024 - The Mine Wire

METALS

2024 IS LOOKING LIKE URANIUM’S YEAR

Uranium has been on an absolute run this past year, up over 85% and currently trading at $106.25lb. With growth forecasted on the demand side coupled with projected supply constraints, many would argue that equity valuations of producers still have room to run.

Where is the demand coming from?

There are currently 440 nuclear power reactors operating across 32 countries plus Taiwan. There are 60 nuclear reactors under construction with a further 110 planned. At the recent UN climate conference, a group of 22 countries backed a plan to triple nuclear energy capacity by 2050.

Therefore, nuclear power seems poised to be a key part of the green energy transition globally. The fact that the public has become more accepting of nuclear power, its safety record and its benefits means that we expect to see even more jurisdictional commitments to new nuclear operations over the coming years.

Where is the supply constraint coming from?

Sprott Asset Management has commented that uranium supply has been in a deficit for several years, with last year's primary uranium production estimated at around 140 million pounds, compared with annual nuclear-reactor requirements of 180 million pounds. With only another 10 to 12 million pounds coming online in 2024, there will still be a significant supply gap.

The Next Few Years

Nuclear power remains one of the safest and cleanest sources of electricity today. More and more jurisdictions are expected to embrace nuclear while supply challenges are expected to persist. New production will inevitably take time to come online, while other challenges like the Russia-Ukraine war, continue to impact potential supply. Add in Kazatomprom’s warnings around production levels, and it looks like uranium and its producers could continue to run for the foreseeable future.

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:

• 🇧🇴 Bolivia's state-owned lithium company, Yacimientos de Litio Bolivianos (YLB), has announced a new international tender for the development of lithium projects.

• 🇬🇹 Víctor Hugo Ventura, Guatemala’s Minister of Energy & Mines, promised that all recent mining licenses will be reviewed after complaints about bribes, corruption and other illicit activities linked to the country’s mining sector.

• 🇳🇴 Norway defended its decision to allow deep-sea mining, saying it may help to break China and Russia’s rare earths stronghold.

• 🇮🇳 Meanwhile, India’s President Murmu said it was important to explore prospects of minerals through deep sea mining.

• 🇨🇭 Switzerland joins the EU and bans Russian diamond imports, sanctions in relation to Russia’s war with Ukraine.

• 🇩🇪 Germany will invest $1.1bn to counter China on raw materials. Given Germany’s leading advanced manufacturing sector, it is critical the country secures the supplies it needs for future success.

• 🇹🇭 Thailand hopes to start producing lithium domestically from a mine in the southwest in about 2 years time. The government’s goal is to become the regional hub for battery production, both for EV and for energy storage.

• 🇰🇷 🇺🇦 South Korea is focusing on its partnership with Ukraine, with the aim of leveraging Ukraine's abundant lithium resources for its burgeoning battery industry.

• 🇹🇷 🇻🇪 Turkey’s Energy Minister was in Venezuela to discuss investment and cooperation opportunities in the field of mining.

• 🇨🇦 The Quebec government added APATITE (PHOSPHATE) to its critical and strategic minerals list. Meanwhile, others push the Canadian government to add silver as well as manganese to its critical minerals list.

• 🇯🇵 The Japanese government has added uranium to its list of critical minerals particularly given Russia’s dominance over the sector.

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MINING MATTERS FROM AROUND THE WORLD 🌎

• The Narwhal covers Ontario First Nations demand for a year-long pause on mining claims. The Ontario government recently introduced the Building More Mines Act in order to ensure Ontario has a modern and competitive regime for mineral exploration and development. With jurisdictions competing across the globe for mining investments, any uncertainty in government policy could be disastrous as the Ontario Prospectors Association points out.

• The Fraser Institute points out that British Columbia (BC) plans to 'reconcile' by giving First Nations a veto on land use. But at the AME RoundUp conference the Premier touted that BC offers a level of certainty not found elsewhere. 🤔

• Two foreign electric vehicle battery assembly and charging station firms, Australia-based Fortescue Metals Group and Germany-based EcoG GmbH, each received approvals Tuesday for various incentives and inducements from the Michigan Strategic Fund to build locations in Detroit.

• Vale, BHP and their joint venture Samarco were ordered by a federal judge to pay 47.6 billion reais ($9.67 billion) in damages for a 2015 tailings dam burst. BHP has said that they will review the decision.

• Anglo American announced the launch of a research and development project in collaboration with GEM, one of China’s largest battery and battery material recyclers, to explore new and more efficient technologies for the use of existing and alternative raw materials to be used in batteries for electric vehicles (EVs).

• Nissan to produce cheaper EV batteries for emerging markets using Lithium iron phosphate cells. These are about 20% to 30% cheaper than conventional lithion-ion batteries that contain nickel, cobalt and manganese. The tradeoff? Distance per charge shrinks by the same 20% to 30%. At the same time, Sharp and FDK in Japan are testing Zinc batteries as a possible cheaper alternative to lithium-ion.

• Chilean state-owned copper giant Codelco raised $2bn (1.79trn pesos) in a bond offering last week.

• Korean State-run KOMIR mining company to file around $747 million claim against Panama due to the shut-down of First Quantum’s copper mine in the country.

• KoBold Metals, a California-based metals exploration company backed by billionaires Bill Gates and Jeff Bezos, said it may consider partnerships as it plans to fast-track development of a new copper mine in Zambia that could cost about $2 billion.

MINING BITS

• ⛑️ IAMGOLD’s Côté Gold mine in Ontario, Canada is turning to automation and will soon have 23 autonomous Caterpillar haul trucks in operations.

• 🛞 China’s Zoomlion has started producing larger 120 ton all electric haul trucks.

• 📚 Researchers at Texas A&M University have developed a method of refining valuable critical minerals using produced water from the oil and gas industry and carbon dioxide.

• 🔴 Researchers in Germany have shown that aluminum mining waste (red mud), could be source of green steel. While the process has low carbon emissions, it is very energy intensive and therefore, currently economically challenging.

• ⌛ Apparently we are on the brink of a “sand crisis” due to its use in concrete. Researchers at Rice University have shown that a heating technique can create a type of graphene that could serve as a substitute for sand in concrete.

• 💍 Pandora, the world’s largest jewelry brand, will now only source recycled gold and silver for its products.

• 🌎 The climate case for a career in mining. An excellent synopsis of some of the challenges the sector faces in recruiting young talent and some potential low-hanging fruit.

• 👨‍🔧 Watch this Aussie tradesman explain why many miners are living paycheck to paycheck despite mining industry salaries being the highest in the country at $116,000 on average.

• 🛰️ Check out Nasa’s earth observatory pictures of the Chuquicamata mine in northern Chile’s Atacama Desert.

• ⚛️ Visualizing All the Nuclear Waste in the World shows in a graph that types of nuclear waste and where they need to be stored and how much of it there is!

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