July 10th, 2024 - The Mine Wire

METALS MARKET

Silver (+4.27%), Tin (+4.01) and (Copper (3.47%) all had strong weeks while Palladium (-3.86%) gave back some of its gains from last week, although it is still up +8.49% on the month.

^{**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. All prices are in USD, except Lithium which trades in Chinese Yuan.}

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.

• 🇬🇧 Voters in the United Kingdom gave the Labour Party a massive majority on July 4th. After 14 years in government, the Conservative Party was given the boot with their poorest performance in history. So what does it mean for the energy and mining sectors? There have already been calls for the new government to withdraw support for a controversial coal mine in Cumbria. While the party was mum on the mine during the election, we don’t expect the new government to support new coal mining operations. Additionally, we would expect them to support a moratorium on seabed mining. So what else will they focus on? Renewable energy like solar and wind as well as nuclear projects, including small nuclear reactors. (Mining Technology)

• 🇪🇺 Across the English Channel, the European Commission imposed a provisional tariff up to 47.6% on Chinese made Battery Electric Vehicles (BEVs). The Commission found that the BEV value chain in China benefitted from unfair subsidization, which caused a threat of economic injury to European BEV producers. The two jurisdictions are still in talks with a final determination coming in November through a vote of Member States, which will then be in place for 5 years. (S&P Global)

• 🇨🇦 The Canadian government approved Teck’s coal business sale to Glencore, but also came out with stricter guidelines related to large Canadian-headquartered firms engaged in critical minerals operations. Specifically, under Canada’s Investment Canada Act, “transactions will only be found of net benefit in the most exceptional of circumstances. This high bar is reflective of the strategic importance of Canada’s critical minerals sector and how important it is that we take decisive action to protect it.” Scotiabank analyst Orest Wowkodaw said, "This updated policy significantly compresses M&A optionality and potentially restricts financing options for Canadian miners. As a result, we now anticipate most Canadian miners to trade at lower valuation multiples vs. global peers." In the global race to secure critical minerals and Canada’s own push to develop an Electric Vehicle cluster, we aren’t surprised to see this move but agree it could impact Canadian miners negatively. (Canada Government) & (Reuters)

• 🇺🇸 Mining trade groups in the United States are reportedly planning to push Washington to revive and expand the Bureau of Mines. The Bureau was shut in 1996 due to budget cuts. Currently, mining policy is administered through a number of agencies, including the Bureau of Land Management, the Fish and Wildlife Service, and the Mine Safety and Health Administration. The thought is that a standalone agency focused on mining would be able to streamline efforts to regulate and approve projects, particularly in a time when the US is in a race with China to secure critical minerals. (Reuters)

• 🇮🇩 US Mining trade groups are not the only ones trying to lobby the US government. Indonesia’s Deputy Foreign Minister Pahala Mansury said countries like the US need to invest in countries with vast reserves of critical minerals, like Indonesia of course, to reduce supply chain risks as these commodities are “the new oil” driving geopolitics. The nation is looking to diversity its investments and partnerships with a host of countries to ensure it doesn’t get caught in the US-China rivalry. (Financial Post)

• 🇨🇳 🇹🇯 Meanwhile, Chinese Xi Jinping was on a state visit to Tajikistan this week where he engaged engaged in negotiations with Tajik President Emomali Rahmon. The leaders earmarked the joint production of green technologies, and in particular, electric cars, solar panels and smart electric grids, as promising areas for ​​cooperation. (The Times of Central Asia)

• 🇨🇳 The Guangzhou Futures Exchange (GFEX) said it plans to launch its first platinum and palladium futures contracts in China. The listing date is not yet decided, but the contracts are meant to give domestic businesses hedge price risk. (New Straits Times)

• 🇨🇳 Official data from China’s central bank, showed that it didn’t purchase gold for its reserves for the 2nd straight month in a row. Regardless, it seems that China is likely to still purchase more than its yearly average, while other central banks like India & Poland continued their purchasing of the precious metal. (KITCO)

• 🇮🇳 🇿🇲 In other Indian news, the country is finalizing a pact with Zambia on geological mapping and mineral exploration which would help India secure access to mineral resources while also boosting bilateral ties with the African nation. (Business Standard)

• 🇺🇸 The State of Hawaii’s Governor signed a bill on Monday to ban seabed mining. Meanwhile, New Zealand was dealing with public backlash over a 2nd seabed mining proposal. (Wall Street Journal) & (The Post New Zealand)

• 🇬🇭 Martin Ayisi, Chief Executive Officer (CEO) of the Minerals Commission in Ghana, has announced that following a strategic partnership between Ghana and a Chinese manganese company, the country is set to build a $450 million refinery in Ghana. This will increase the country’s revenues by a significant percentage. (CITI Newsroom)

• 🇨🇱 Yesterday, Chilean officials said they will consider 81 proposals for lithium projects that were submitted last month. The government will announce the process to award lithium extraction contracts next month, and potentially provide updates on projects in April or May of next year, Finance Minister Mario Marcel said. (Mining.com)

• 🇺🇳 There wasn’t a communique that we could see at the time of writing this, but the United Nations convened panel on global principles for critical energy transition minerals met in person for the first time this week in Copenhagen. (United Nations)

MINING MATTERS FROM AROUND THE WORLD 🌎

• Teck Resources (TSX: TECK.A & TECK.B, NYSE: TECK) issued a statement that regulators have approved its sale of its remaining 77% interest in the steelmaking coal business, Elk Valley Resources (EVR) to Glencore plc (LON: GLEN). The transaction is now expected to close on July 11. Teck expects to receive total cash proceeds of US$6.9 billion (CAD $9.5 billion). (Teck Resources) or (Glencore)

• The government of Canada published its own release on the approval of the Teck Resources sale. It stated that it approved the deal after an extensive net benefit review under the Investment Canada Act. It also resulted in the government putting out stricter guidelines on future deals which we covered earlier. As part of this approval, Glencore has agreed to a number of conditions related to a 10 year term including maintaining a head office for EVR in Vancouver; maintaining regional offices for EVR in Calgary, AB and Sparwood, BC; ensuring that the majority of EVR’s Directors are Canadians; ensuring that at least 66% of all executive and senior management roles at EVR are filled by Canadians; and for a term of at least 5 years maintain significant employment levels at EVR. Glencore also agree to binding undertakings related to environmental preservation and stewardship of liabilities as well as First Nations commitments. (Government of Canada)

• In other Glencore news, according to insiders, the miner scrapped plans to sell its nearly 70% stake in Kazakh mining company Kazzinc. Apparently, the mining giant and Chinese bidders were too far apart on their valuations. (Mining Technology)

• 🇳🇪 The Nigerien junta was at it again this past week as they revoked Canadian miner GoviEx’s (CVE: GXU) permit to mine uranium in the country. GoviEx has been operating there since 2007. Their stock was down 35% on the news. The Nigerien junta expelled French forces last year and ended a security agreement with the US which has until September to withdraw its forces. The government is cozying up to Putin’s government who sent 100 military advisors to the Nigerien capital this year to train its forces. (Financial Post)

• Victoria Gold’s (TSE: VGCX) issues continued as the Yukon government confirmed that cyanide was present in several creeks near the Eagle gold mine. Cyanide levels may have an impact on fish and residents have been advised to stay away from the immediate vicinity and not to drink the water. However, the Yukon governments Energy, Mines and Resources Minister John Streicker said that the levels were mostly low. Still, First Nations groups have called for a halt to mining activities on their land. (CBC)

• First Quantum (TSE: FM) may have a chance to re-open as the Panamanian President said, “I will order a strict environmental audit of the mine, with the best international experts, so that the country knows the truth about the state of the site,” in his first address as head of government on Monday. “The plan to open and definitively close the mine in a safe and positive manner for our country will depend on the results of that environment study.” Given that the mine accounts for 5% of GDP and a looming large potential penalty, we aren’t surprised to see the President try to resolve the issue. First Quantum’s stock has almost doubled from its lows after the shut down, although it is still down over 50% from its previous highs. (Mining.com.au)

• 🇳🇮 Meanwhile Calibre Mining Corp. (TSX: CXB; OTCQX: CXBMF) announced that Nicaraguan authorities have granted the company the key environmental permits for the development and production of the open pit mine at the Volcan gold deposit. (Financial Times)

• Eramet SA (EPA: ERA) announced that it plans to invest $800 million in the construction of a second lithium production plant in the Argentine province of Salta, dependent on the fiscal measures announced by the government. (AzerNews) & (Government of Argentina)

• Erament SA is also apparently in discussions with Zhejiang Huayou Cobalt Co. about a partnership to produce battery-grade nickel in Indonesia. The deal Eramet had with BASF to invest $2.6bn in the country was cancelled in June. (Financial Post)

• China's Zijin Mining (SHA: 601899) expects first-half net profit to have jumped by as much as 50%, the company said in a trading statement on Monday. The company is projecting that net profit could reach up to 15.5-billion yuan ($2.13-billion). (Mining Weekly)

• China’s BYD plans to open its first factory in Southeast Asia, in Thailand. The $486m facility will join other Japanese automakers like Honda, Toyota and Isuzu who manufacturer their vehicles in the nation. With tariffs on Chinese EV’s coming from the US and EU, it isn’t surprising to see the EV behemoth open factories in other jurisdictions. BYD is also planning a new factory in Hungary. (Reuters)

MINING BITS

• 🇨🇳 Chinese geologists have discovered two new minerals at the world's largest rare-earth mine in northern China, the Chinese Academy of Sciences (CAS) has announced. The two new niobium-scandium minerals, named as Oboniobite and Scandio-fluoro-eckermannite, were discovered in the Bayan Obo deposit in the Inner Mongolia Autonomous Region. Since 1959, 20 new minerals have been discovered at this site. Wow! (Chinese Academy of Sciences)

• 🇨🇦 Over in Canada, Researchers at McGill University found that seawater plays a role in gold formation. "In our new study, we discovered that sodium ions in seawater are what cause gold nanoparticles to clump together, acting like the acid in souring milk and eventually forming gold veins," said lead author Duncan McLeish, a Postdoctoral Research Fellow in McGill’s Department of Earth and Planetary Sciences. They also contend that high-grade gold veins may be easier to form in sub-seafloor settings. (McGill University)

• 🌊 Speaking of the seabed, The Institute Polytechnique De Paris takes a look at the various geopolitics around seabed mining including High-Seas, Mining, Climate and Commons Geopolitics. Anyone interested in public policy should have a read of this article. (Polytechnique-Insights)

• 🇨🇦 🇯🇵 Back to Canadian research, congratulations to Dr. Paul Hoffman, an Adjunct Professor at the University of Victoria who won the prestigious Kyoto Prize. Seen as the Japanese equivalent of the Nobel Prize, he is the first ever geologist to win the award and 3rd Canadian. The Award comes with 100 million yen prize, roughly $850,000 CAD. (University of Victoria)

• 🇺🇸 🇨🇳 CNBC takes a look at Tungsten and China’s grip on the critical mineral. The tough metal with a high energy density has made it an important material in weapons, automobiles, electric car batteries, semiconductors and industrial cutting machines. Both Taiwan Semiconductor Manufacturing Company (TSMC) and Nvidia use the metal in their chips. But China currently controls about 80% of the supply chain. Almonty Industries Inc (TSE: ALL) is covered as one company with projects outside of China with operations in Portugal, Spain and South Korea. (CNBC)

• 🧠 AI Startup Altrove raised €3.7m in a Pre-Seed funding round. The company uses an automated lab to experiment to determine the optimal combination of ingredients to make things that replace existing elements like gallium, germanium, cobalt, and nickel. The proprietary AI platform helps accelerate the discovery process by 100 times. (Tech.EU)

• ⛏️ 🇺🇦 The Guardian did a piece this past week on Ukrainian women taking on traditional male roles in coal mining and other male dominated industries as many men fight on the front-lines of the war. (The Guardian)

• 🌋 Watch Mount Etna, one of Europe’s most active volcanoes, put on a spectacular show last week amid increased volcanic activity. (AP News)

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