July 17th, 2024 - The Mine Wire

METALS MARKET

China reported that its GDP grew 4.7% in Q2 year-on-year compared with expectations of 5.1%. China’s GDP had grown 5.3% in the previous quarter. This slowing down along with inflation data in the United States had an impact on a number of commodities including WTI Crude, Iron Ore and Nickel.

The likelihood of an interest rate cut in the United States grew which positively impacted both Gold & Silver. The precious metals become more attractive when treasury yields decrease and there is greater global uncertainty.

^{**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.

• 🇺🇸 You’d have to have been living under a rock or searching for them in the remote wilderness to not have heard about the attempted assassination of former President Donald Trump. While lots of questions remain around the “how was this even possible?”, one redditor posted a comment which we thought was highly accurate: “Someone took a shot at Trump and killed Biden.” Certainly the former President is now the favorite to win the election on November 5th, 2024. Whether its his support for oil and gas exploration, support for the coal industry or continuing the fight against China’s rising influence, the former President is a positive for the mining industry in America.

• 🇺🇸 Yesterday, U.S. Senator Bob Menendez of New Jersey, was convicted of all 16 criminal charges he faced, including bribery, illegally acting as an agent of the Egyptian government, obstruction of justice, wire fraud and extortion. The Senator had been Chair of the powerful U.S. Senate Foreign Relations Committee. He received about half a million dollars, gold bars, a luxury car and mortgage payments in return for steering billions of dollars in aid to Egypt. Another blow to U.S. Democrats. (Reuters)

• 🇺🇸🇲🇽 This past week the United States & Mexico announced greater cooperation in fighting China’s circumvention of U.S. tariffs on Chinese aluminum & steel. Under a new policy, steel product imports from Mexico will be subject to 25% U.S. "Section 232" tariffs unless the steel is documented to have been melted and poured in Mexico, the U.S. or Canada. For aluminum product imports from Mexico to escape the 10% Section 232 tariffs, they must not contain primary aluminum that is smelt or cast in China, Russia, Belarus or Iran. (Reuters)

• 🇺🇸🇮🇩 According to U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez, the U.S. spoke to Indonesia this week about joining the Minerals Security Partnership. While no timelines have been given, conversations have been happening. (Reuters) & (Minerals Security Partnership)

• 🇺🇸 Senator Marco Rubio introduced a few bills this past week. The first one “Critical Mineral Supply Chain Realignment Act of 2024” would impose mandatory tariffs on electromagnets, permanent magnets, batteries, solar panels, and solar wafers that are manufactured by entities controlled by China, in China or in countries that are not allies or free trade partners. The tariffs are quite hefty at 150% as a start! (Senator Marco Rubio)

• 🇺🇸 The second bill that Senator Rubio introduced with other senate colleagues is the “Global Strategy for Securing Critical Minerals Act of 2024.” Check out the link for more information but this bill speaks more to diplomatic relations, financial tools and funds as well as increasing partnerships to secure critical minerals (Senator Marco Rubio)

• 🇨🇦 Up north in Canada, the Yukon Government was taking the most heat as it deals with Victoria Gold’s heap leech break. The government found reasonable grounds for Waters Act breaches in the mine landslide and called for Victoria Gold to take several actions immediately. The Yukon Energy, Mines and Resources Minister said the government will investigate the incident with support from outside experts. (Yukon News)

• 🇨🇦 The Government of Canada was busy with a number of announcements this past week. First, two companies in British Columbia (B.C.) received $9m to help enable Made-in-Canada lithium battery supply chain (Government of Canada). The governments of Canada & B.C. also announced a joint investment of $195m to upgrade key highway infrastructure in B.C.’s northwest needed to support critical minerals development in the region. (Government of Canada) Finally, the Canadian Government announced $770,000 over two and a half years to the Mining Industry Human Resources Council (MiHR) to help support women’s participation in the mining sector. (Government of Canada)

• 🇨🇦 The Government of Saskatchewan boasted that it brought in nearly $6m in revenue from subsurface mineral bids related to lithium. There were 16 acceptable bids covering a total of 39,650.88 hectares. (Government of Saskatchewan)

• 🇦🇺 Canada wasn’t the only government with a funding announcement. The Australian Government announced $13m for two companies. Queensland Pacific Metals Limited will receive $8 million to bolster domestic nickel and cobalt production, while South Australian-based Renascor Resources will receive $5 million for its pilot purified spherical graphite project. (Australian Government)

• 🇬🇧 The new British Government has apparently already acted on the controversial Cumbrian Coal Mine by telling the High Court that it is pulling its defense of the planning permission and instructing that the approval should be quashed. (The Independent)

• 🇰🇿 Kazakhstan announced changes to its Mineral Extraction Tax (MET) for uranium. Starting in 2025 the tax will go from 6% to 9% and by 2026 a sliding scale will be adopted with small volumes being taxed at 4% while the largest volumes will be taxed at 18%. The news sent uranium stocks higher as Kazakhstan’s national uranium company, Kazatomprom, supplies about 20% of the global market. The higher rates will lead to higher uranium prices or so the market believes. (Track Insight)

• 🇺🇦 The Ukrainian government approved the conditions for the privatization of UMCC Titanium, a miner and processor of titanium raw material, and set the starting price at UAH3.9 billion (about $95.4 million at the current exchange rate). No risk no reward - feeling lucky? (Interfax)

• 🇨🇷 Costa Rica announced its win against Canadian gold miner, Infinito Gold, at the World Bank's International Centre for Settlement of Investment Disputes. The miner brought a case against Costa Rica, after the nation cancelled its concessions in 2010 based on environmental grounds. (VOA News)

MINING MATTERS FROM AROUND THE WORLD 🌎

• BHP (ASX: BHP) announced that the Nickel West operations and West Musgrave project (Western Australia Nickel) will be temporarily suspended from October 2024. Despite a number of Australian government initiatives to support the industry, global market forces were too difficult to overcome. According to BHP’s website, the Nickel West mine employs roughly 2,500 people. (BHP)

• In other BHP news, the miner is rumored to be in discussions with Lundin Mining (TSE: LUN) to jointly bid for another miner, Filo Corp. (TSE: FIL). Currently, Lundin owns 32% of Filo while BHP owns 6%. Filo has a market cap of almost $4bn CAD and is up over 13% since the rumor news broke. (Reuters)

• Cleveland-Cliffs (NYSE: CLF) has agreed to purchase Hamilton, Canada’s Stelco for $3.4bn CAD. As part of the deal, Cleveland-Cliffs has agreed to keep Stelco’s head office in Hamilton and ensure Canadian representation on its management team. The Canadian Taxpayers Federation used the takeover as an example of why “Corporate Welfare” doesn’t benefit Canadians. In 2019, Stelco received $50m from the federal government towards its $412m project to modernize operations. (CBC) and (BNN Bloomberg)

• Victoria Gold Corp. (TSE: VGCX) said it might not have the money to remediate the impacts of its heap leach failure. Reactions have been harsh from opposition political parties, first nations and the public. These incidents often lead to greater scrutiny, more oversight and lengthier approval timelines for current and prospective projects. (CBC)

• Barrick Gold (TSE: ABX) reported preliminary Q2 production estimates yesterday. The global mining giant produced 948,000 ounces of gold and 43,000 metric tons of copper during the period and is on track to meet 2024 production guidance. (Barrick Gold)

• 🇲🇱 Barrick’s CEO also indicated that the miner is in talks with Mali’s National Directorate of Geology and Mines to expand exploration. Barrick’s mines currently account for between 5% and 10% of the country’s gross domestic product annually. Mali’s new mining code which allows the government and local communities to take a greater stake in mining operations has created uncertainty and impacted exploration in the country. (Barrick Gold)

• In other forecasting news, Chinese miner Tianqi Lithium Corp. (SHE:002466) is anticipating a significant net loss of between 4.9 billion yuan and 5.5 billion yuan ($674 million and $756 million) for the first half of 2024. (Caixin Global)

• Sibanye-Stillwater (JSE: SSW) was hit with a cyberattack last week. The miner said it was a “limited disruption” as they caught it quickly, but it goes to show that all companies should have a cybersecurity system and action plan in place. (Tech Nation)

• Congratulations to Montage Gold Corp. (TSXV: MAU) (OTCQX: MAUTF) which raised $170m through an equity financing. The miner received $53.7m from China’s Zijin Mining which gives it a 9.9% stake. Lundin Family Trusts is investing $43m and will increase its stake from 17% to 19.9% as part of the equity raise. (Newswire)

• Almonty Industries Inc. (TSX: AII) (ASX: AII) signed a MOU for a location for its Sangdong Downstream Tungsten Oxide Plant. The agreement was signed with Yeongwol County which is about 30kms from the Sangdong Tungsten Mine. China supplies roughly 85% of the worlds Tungsten so we like this move a lot. The companies stock is up 13.79% this past year. (Financial Post)

• 🇿🇲 The Zambian Government said China’s JCHX Mining (SHA: 603979) will invest $300m into the country’s Lubambe Copper Mines which was recently acquired by Zambia’s state mining investment unit. The investment will give the Chinese miner an 80% stake with Zambia’s mining unit owning the other 20%. (Mining.com)

• Finally, congratulations to Québec City-based Point Laz who raised $1.2m CAD pre-seed round to support the production of its mine shaft scanning device. The startup says its flagship Lazaruss scanner is a locally developed optical tool used to automate mine shaft inspections by generating structural and visual data of mine shaft conditions. We think anything technology that helps improve the safety of mines is a big plus! We definitely recommend checking these guys out. (BetaKit)

MINING BITS

• 🇨🇳 "Kaituo 2" an engineering prototype developed independently by Shanghai Jiao Tong University, made a record dive of 4,102.8 meters in late June. Over 5 operations, the deep sea mining machine was able to collect 200kgs of mineral samples. (Xinhua) or (Interesting Engineering)

• 🇺🇸 A good summary by Ruth Demeter, Senior Director for policy at the Global Energy institute, of the U.S. Chamber of Commerce’s Critical Minerals Summit and some of the key ideas discussed. Essentially there is an awareness that the U.S. needs additional sources of critical minerals, but also needs to improve processes at home to advance domestic projects. (U.S. Chamber of Commerce)

• ❄️ The University of Chicago published a white paper by several authors looking at glacial climate intervention. The paper was a result of two recent conferences at the University of Chicago and Stanford University on geoengineering. The report identifies major areas of research for the future, including identifying what natural processes might limit ice sheet deterioration and human interventions that could enhance those processes; and what the window of opportunity for implementing interventions might be. (University of Chicago)

• 🪐 The Australian Strategic Policy Institute takes a look at the recent Artemis Accords which pave the way for exploring, extracting and using resources of the Moon, Mars and other stellar bodies and how those Accords will not be appropriate for mining in Antarctica. Currently there is a ban on mining activities in Antarctica but the author makes some interesting comparisons between the two. An informative read. (ASPI)

• 🧠 An interesting article by Forbes, looking at a quest by a geological researcher at the Universidad de Chile to identify the origins of Niobium. The rare earth is used in phones, lenses, jet engines and rockets. But did you know that 90% of the global production comes from Brazil with 95% of known reserves also from the country? (Forbes)

• 👊🇨🇫 Small scale miners in Central African Republic are facing violence and eviction by none other than Russia’s Wagner Group. The mercenary group was called into the country in 2017 by the President to help deal with rebel groups. In recent years they have apparently “created a complex network of operations to plunder diamonds, gold, and other natural resources.” (Al Jazeera)

• ⛏️ World Atlas takes a look at the world’s ten largest coal mines. Do you know which one is the largest? Hint: 4 are in Indonesia, 2 in the United States, 2 in India, 1 in China and 1 in Poland. (World Atlas)

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