January 11th, 2024 - The Mine Wire Soft Launch

GOVERNMENT

CRITICAL MINERAL MINES IN BRITISH COLUMBIA COULD GENERATE NEARLY $800 BILLION!

According to a report by the Mining Association of British Columbia (MBAC), the province is sitting on a literal gold mine of economic activity should 16 proposed critical mineral projects go through.

Currently, there are 16 projects in advanced stages of development and a number of them are in the early stages of regulatory approval. If all of the projects were approved, there is an estimated economic output of $791.7 over the lifetime of these 16 mines. They would generate $154.5 billion in tax revenue as well as $183.8 billion in labour income.

Despite the global attention to critical minerals and the need for more output to help the transition to cleaner technology, the report points out that British Columbia has a reputation as a high-cost jurisdiction where it is difficult to get projects done. In order to become more competitive like other provinces such as Ontario and Quebec, the report suggests the BC government take some actions, including:

• Improve the competitive fiscal framework by improving the carbon tax paid in BC. Currently, it is the most expensive jurisdiction in the world.

• Improve processes for permitting and authorization for significant projects and decide on a best placed regulator to make approvals, as opposed, to duplicative processes for several authorities that add significant delays to approvals.

• Advance Economic Reconciliation with First Nations by having Ottawa and BC provide some financial instruments to allow First Nations co-ownership over mining projects.

• Investments in Electrification and Infrastructure which includes a new electrical grid, road and rail infrastructure. These investments are important so that mining operations can continue to have one of the lowest GHG emissions in the world.

• Continued investment in Skills Training, Health & Safety as these critical mineral projects will create demand for qualified workers which are already in short-supply. With many baby-boomers expected to retire in the next years, it is even more important that programs to train up the next generation of workers are available.

All of these recommendations make sense to us and we hope that the provincial and federal government figure out a way to get these projects over the finish line.

SPONSORED BY S&A STRATEGIES

ARE YOU TAKING ADVANTAGE OF GOVERNMENT INCENTIVES IN CANADA?

Over $3.8 billion is currently being made available to mining companies of all sizes in Canada. Government relations firms like S&A can help companies leverage this unique opportunity. Governments of Ontario and Canada in particular are advanced in their offerings.

The following programs are a few of the many current and growing opportunities for interested mining firms:

• Critical Minerals Infrastructure Fund - funding of up to $300M per project for energy and other infrastructure investments at a mining site.

• Critical Minerals Traceability Project (CMTP) - offers $675,000 per project for commercial-stage pilot traceability projects.

• Strategic Innovation Fund - Critical Minerals Stream - funding of $10M per project and above. 

Companies looking to develop their critical minerals business should be setting a government partnership and funding support strategy now.

Click Here to have a free consultation with S&A Strategies.

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:

• 🇪🇨 The Ministry of Energy and Mines of Ecuador, through the Central Coordination Zone, has authorized the extension period for the La Plata mining concession until 2049 for Atico Mining Corporation.

• 🇯🇴 The Ministry of Energy and Mineral Resources for Jordan said that it aims to strategically position the Kingdom on the regional and global mining map, capitalizing on the positive mineral exploration results across over the past few years. While some countries like Panama push back on mining operations, others like Jordan, see the benefits.

• 🇸🇦 Saudi Arabia’s recent discovery of massive gold deposits could lead to it becoming a major regional producer of the precious metal. With it’s Vision 2030 policy to diversify its economy and attract more foreign direct investment, we expect to see strong year on year growth related to mining in the Kingdom.

• 🇨🇳 With a rise in tailings pond leaks in China due to a number of factors, The Ministry of Ecology and Environment updated their rules in 2022, while also increasing inspections. While some groups are calling for stronger oversight, only time will tell whether China decides to take any further action.

• 🇪🇺 The European Union imposed sanctions against Russian diamond miner PJSC Alrosa and its CEO Pavel Alekseevich Marinychev. PJSC is owned by the Russian state and accounts for more than 90% of Russian production of diamonds.

MINING MATTERS FROM AROUND THE WORLD 🌎

• 🪓 Endeavour Mining stock falls more than 10% after firing CEO for serious misconduct.

• ⛏️Core Lithium suspends mining at Finniss as lithium prices plummet. With increased global production coupled with depressed demand from China and EV makers, we could see more and more announcements of paused actions in 2024.

• 📈 Agnico-Eagle (AEM) made a $23.13M investment in Canada Nickel (CNC) which constitutes about 12% ownership. We expect to see more and more investments into the critical minerals sector as governments focus on a move away from fossil fuels.

• ⛏ Energy Fuels (EFR) announced that in response to surging prices, supportive government policies, and a domestic focus on security of supply, they have commenced production at three of their U.S. uranium mines in Arizona and Utah.

• 💲Teck Resources (TSX:TECK.B, NYSE: TECK) has completed the partial sale of its B.C. steelmaking coal mines to Japan’s Nippon Steel Corp. and South Korean steel maker, POSCO. 

• 🇭🇰 China’s CMOC Group is number 1 after boosting its cobalt output by more than 170 per cent last year, surpassing Glencore as the world’s top producer of the key battery metal.

BUSINESS

FIRST QUANTUM CONTINUES TO MAKE HEADLINES

First Quantum (FM - TSE) lost over half its value late in 2023 when the Supreme Court of Panama ruled that the agreement to mine Cobre Panama was unconstitutional. Hundreds have continued to protest at the mine to pressure the government and First Quantum to close the mine. Accounting for roughly 40% of First Quantum’s revenue, the closure has been a major hit.

Barrick Gold (ABX - TSE), according to Bloomberg, has approached several of the largest shareholders including the Capital Group, which owns a 22% interest, as well as China’s Jiangxi Copper, which owns an 18% interest, about a potential sale.

Smelling blood or at least a savory opportunity, Barrick may see an opportunity to add value to its own portfolio of assets if the price is right. Barrick has been clear that it wants to move into the copper sector, but has stated it prefers to do so through organic growth as opposed to M&A’s unless it makes financial sense.

First Quantum, however, is believed to be in talks with Jiangxi Copper, about selling its stake in its Zambian copper mines in order to boost its financial position. First Quantum has two mines in Zambia which are estimated to be worth about $6 Billion. We would have to think that as a major shareholder Jiangxi Copper would like to both purchase the Zambian copper mine assets while also seeing its investment in First Quantum improve. We would therefore, be surprised to see a Barrick acquisition but only time will tell.

MINING BITS

• 🦣Coal miners in North Dakota unearth 7 foot mammoth tusk buried for thousands of years.

• 💻Bill Gates-backed Calgary startup, GeologicAI, preparing for major scale-up, large workforce expansion.

• 🚀 Could Wyoming be a space pioneer when asteroid mining becomes a reality?

• 😤 TikTok Creators quit vaping to protest cobalt mining conditions in the DRC. While we are against child-labor and poor conditions for workers, this seems like virtue-signaling to us.

• 🛩️ Joint venture of arctic mining companies assisting plane crash victims in NWT who were flying up to build winter roads for the mines in the area. History’s Ice Road Truckers will give you a taste of the harsh conditions in the NWT as well as the impressive skills of the truckers who call these roads home.

• ♻️ With China implementing new export controls on graphite, could this be the new frontier in EV battery recycling?

• ⚛️ Check out public perceptions on nuclear power in a range of countries as well as some misconceptions globally. We are bullish on uranium and the need for nuclear to hit our global CO2 emission goals.

• 🚘China’s BYD sold more than 3 million units of pure electric cars and plug-in hybrids in the year, surpassing Tesla. While China and Western Nations fight for control of critical minerals, it is clear that demand will be strong in the long-term for these metals.

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