July 3rd, 2024 - The Mine Wire

METALS MARKET

Palladium (+9.13%) had another strong week due to constrained supply. WTI Crude maintained it’s position above $80 per barrel and was up +2.76% week to week. Manganese (-5.84%) once again had a tough week but is still up +16% on the year-to-year.

^{**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.}

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.

• 🇧🇴 While not directly related to mining policy, we had to mention the attempted coup d'état in Bolivia last Wednesday. Fast forward and General Juan Jose Zúñiga has been arrested for orchestrating the military aggression. But wait! The General has said that President Luis Arce instructed him to do so in order to raise his own falling popularity - think President standing with the people and telling the General to step down for democracy. Well it did boost his numbers temporarily but now everyone is wondering what the heck is going on. Former President Evo Morales who still holds a lot of influence called it a “hoax”, as did President Milei in Argentina. While we don’t know how this soap opera will end, it certainly isn’t good for investor confidence. Bolivia was already in the 10 least attractive jurisdictions for mining investment in the last Fraser Institute survey. (AP News) and (Fraser Institute)

• 🇰🇪 Kenya’s President William Ruto declined to sign a highly contentious finance bill that was meant to raise an additional $2.7bn in taxes. The proposed change lead to nationwide protests and resulted in at least 39 deaths. He has sent the bill back to Parliament for amendments. (KDAL)

• 🇨🇳 China made a big policy splash this past week with a statement by the State Council that said rare earths belong to the country and no organization or individual are allowed to claim them. The changes come into effect on October 1st and will allow the nation to keep a grip on this precious resource. They plan to introduce a traceability program and implement strict fines for anyone mining illegally. Given that the country is responsible for about 90% of the worlds refined output as well as 70% of mined REE’s, other countries better watch out. (Business Standard) or (Reuters)

• 🇨🇳 China also announced that it will be setting up a new entity that groups national oil producers and other state firms to search for ultra-deep oil and gas reserves and tackle harder-to-extract non-conventional resources. With declining output in mature fields, the nation is hungry for new reserves to fuel its manufacturing and military needs. (Reuters)

• 🇨🇦 The 2024 OECD Conference of Mining Regions & Cities will be held in Sudbury, Ontario from October 8th to 11th this year. The conference will focus on two pillars: 1. Partnering for sustained development in mining regions and; 2. Future-proofing regional mineral supply for the energy transition. Want to attend? Fill out the forms and see if you get an invite. (Invest Sudbury)

• 🇦🇺 Speaking of conferences, the CEO of South Australia’s Department for Energy & Mining, Dr. Paul Heithersay, was in hot water for his expenses during the PDAC conference. The expenses included business class flights totalling $23,233 AUD ($15,500 USD), five nights at the Ritz-Carlton at almost $1500 AUD per night, and at least three restaurant dinners. The department said the Ritz-Carlton was picked because few other options were available. We can’t imagine that will fly with the public. (9 News)

• 🇺🇸 The U.S. Department of Energy issued a Request for Proposals last Thursday to purchase low-enriched uranium from domestic sources. The DOE plans to award two or more contracts, which will last for up to 10 years. Proposals are due by 5:00 p.m. EDT on August 26, 2024. (U.S. Department of Energy)

• 🇺🇸 Not surprisingly, the U.S. Department of the Interior’s Bureau of Land Management came out with a final recommendation on 28 million acres of public lands in Alaska. The recommendation was to keep the current protections in place. Since former President Donald Trump had wanted to open these lands up, we can expect he will take further action should he win the upcoming election in November. (The U.S. Department of the Interior) or (Washington Post)

• 🇺🇸 There were several court cases with potential impacts on the mining sector this week. In one 6-3 ruling at the Supreme court, it held that the Constitution’s 7th Amendment guarantee to a trial by jury applies when the SEC seeks civil penalties for securities fraud. Agencies such as the Federal Energy Regulatory Commission and the Federal Mine Safety and Health Review Commission operate under laws that require that civil penalties be pursued in agency enforcement proceedings. This means the commissions may have to empanel juries instead of settling cases on their own. (Politico)

• 🇺🇸 In another ruling, the U.S. Court of Appeals for the District of Columbia Circuit in a split 2-1 decision sided with a lower court in finding that a final rule the Bureau of Land Management issued in 2003 does not limit the number of 5-acre mill sites a company can acquire around a single mine claim, which covers 20 acres. A number of environmental groups wanted mill sites limited based on the 1872 Mining Law. (E&E News)

• 🇸🇪 Sweden has joined the Sustainable Critical Minerals Alliance along side Australia, Canada, France, Germany, Japan, the United Kingdom and the United States. The Alliance was launched in 2022 to drive the global uptake of environmentally sustainable and socially inclusive and responsible mining, processing and recycling practices and responsible critical minerals supply chains. (Government of Canada)

• 🇳🇴 Next door, Norway is set to award Arctic seabed mining blocks in 2025. The country is putting 386 blocks up which comprise about 38% of the approved areas for exploration. (Mining.com)

• 🇸🇦 Saudi Arabia’s Ministry of Industry and Minerals Resources announced the successful bidders for Its 5th Round of exploration licensing across six exploration sites. (Saudi Press Agency)

• 🇲🇦 🇹🇷 Morocco & Turkey signed strategic energy and mining agreements that will see the two nations cooperate more closely. For mining, the partnership will include geological mapping, remote sensing, geographic information systems (GIS), artificial intelligence for mineral assessment, geological research, post-mining management, seismic monitoring, strategic and critical mineral management, and joint projects in energy and mining exploration. (Morocco World News)

• 🇵🇭 The Philippines is looking to court Western investors as a “China-Free” source of the critical battery metal. Ceferino S Rodolfo, under-secretary of the Department of Trade and Industry told the Financial Times that “There is room now for the Philippines to be a significant player for batteries.” Interested in Nickel or the Philippines? Check out the article. (Financial Times)

• 🛢️ HE Haitham Al Ghais, OPEC’s Secretary General wrote a blog post on the energy transition this week and posits a bunch of questions related to how realistic timelines are and what role OPEC’s members will play in the future. Definitely worth a read. (OPEC)

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MINING MATTERS FROM AROUND THE WORLD 🌎

• Rio Tinto (ASX: RIO) will install carbon free aluminium smelting cells using first ELYSISTM technology licence at its Arvida smelter in Québec, Canada. Rio Tinto will design, engineer, and build a demonstration plant equipped with ten pots operating at 100 kiloamperes (kA). The plant will be owned by a new joint venture in which Rio Tinto and the Government of Québec, through Investissement Québec, will invest $179 million (CAN$235 million) and $106 million (CAN$140 million) respectively as equity partners, for a total investment of US$285 million (CAN$375 million). (Businesswire)

• Victoria Gold (TSE: VGCX) remained in the spotlight last week after its heap leech pond breech. Yukon government officials said it was still too early to know whether any cyanide reached waterways or what the overall environmental impact was. First Nations and some residents have complained that the breech is being downplayed and want to see a “full-scale response”. Residents in the closest town Mayo, were also dealing with wildfires this week and are on evacuation alert. A Toronto-based law firm is investigating a potential investor class action. (CBC)

• Speaking of lawsuits, First Quantum Minerals (TSE: FM) will launch formal arbitration proceedings against Panama in July according to Reuters sources. In the initial stage of arbitration, concerned parties negotiate for six months in a bid to avoid moving on to formally launching proceedings, but this has apparently failed. First Quantum is seeking $20bn as compensation for the Panamanian government shutting down its Cobre Panama mine last November. Panama’s GDP is $76.52bn USD per year so $20bn will sting! (Reuters)

• In another case, Chinese miner Gafeng Lithium filed an international arbitration against Mexico after the country canceled a potential mining project valued at more than $1 billion. Mexico’s outgoing President, Andres Manuel Lopez Obrador, said the nation will seek a deal with the miner. Under Lopez Obrador, the country nationalized Lithium production and therefore, Gafeng Lithium lost is concession. (Reuters)

• Over in the Democratic Republic of Congo, state-owned miner Gecamines said it will oppose the sale of Trafigura Group backed miner Chemaf Resources Ltd. to China’s Norin Mining Ltd. Chemaf has struggled with low cobalt prices and has racked up roughly $690m in debt. While the government has approved of the sale, Gecamines is against it. Chemaf Resources probably should have made sure the lessor and owner of the property, Gecamines, was aware of the transaction, instead of letting them find out in the press. (BNN Bloomberg) or (Mining.com)

• Vendanta Resources Ltd. is close to taking back control of the Konkola copper mine in Zambia. The mine was put into provisional liquidation in 2019 when the previous government accused Vendanta of lying about its expansion plans and paying too little tax. The company is prepared to pay $250m USD to settle debts and is in talks to sell a minority stake in the mine to help finance the $1bn+ in investments that will be required to expand operations. (African Mining Market)

• Anglo American (LON: AAL) has suspended production at its Grosvenor steelmaking coal mine in Queensland, Australia after a methane explosion caused a fire in its underground mine. Thankfully, no one was injured. Anglo’s statement said, “The mine team is working with specialist teams from the Queensland Mines Rescue Service and the regulatory authorities to extinguish the underground fire, prior to being able to assess the steps towards a safe re-entry into the mine. These procedures are expected to take several months as a result of the likely damage underground.” (Anglo-American)

• Skeena Resources (TSE: SKE) announced that it had received a $750m funding package from Orion Resource Partners. The funds will support the development, construction and general working capital for its Eskay Creek Gold-Silver Project in British Columbia, Canada. The market liked the news with the stock up around 25% since the news. (Mining Technology)

• Meanwhile in Australia, Arafura Rare Earths (ASX: ARU secured $150m in project financing from The Export-Import Bank of Korea (Eximbank). The bank expects about 1,500 tons of neodymium-praseodymium oxide, a type of rare earth essential for electric vehicles and renewable energy manufacturing processes, to be supplied to domestic Korean companies each year for roughly 12 years. (The Korea Economic Daily)

• Lundin Mining (TSE: LUN) is rumored to be exploring the sale of two zinc mines in Europe (Sweden & Portugal). Apparently, the Canadian miner would like to focus on copper and would use the funds to help expand its projects in Latin America. CEO Jack Lundin declined to comment on the rumors, but said the miner does not need to divest from any assets to fund its “South American ambitions”. (mint)

• ExxonMobil (NYSE: XOM) and Korean EV battery maker SK (KRX: 034730) have signed a MOU for SK to take up to 100,000 metric tons of Lithium from ExxonMobil’s first planned project in Arkansas. SK already has two battery plants in Georgia with four more projects planned as joint ventures with Ford Motor Company and Hyundai Motor Group. (ExxonMobil)

• Liebherr Mining Equipment got a shout-out from the Governor of Virginia who was commending them for their $72.3m investment to expand their manufacturing plant in the City of Newport News and the City of Hampton. The investment will create 175 new jobs. (Governor of Virginia)

• Toronto based e-Zinc has raised $31m USD from a host of new backers as well as some current investors. e-Zinc previously raised $25m in its Series A round. The company is focused on long-duration energy storage with its zinc-air battery, which can store energy for up to 24 hours - about 10x that of traditional batteries. The money will help the company complete the construction of its 42,000 sq. ft pilot manufacturing facility in Mississauga, Ontario. The company is currently partnering with Toyota Tsusho Canada Inc. and the California Energy Commission to demonstrate how e-Zinc’s energy storage systems can reliably provide long-duration energy storage at commercial scale. (Financial Post)

MINING BITS

• 🌴 If you have ever watched the Discovery channels “Gold Rush”, then you will know who Todd Hoffman is. In an interview with Fox News, he tells the story of almost getting shot in Guyana after taking out $12,000 USD, about two duffel bags of cash in local currency. After being chased by gun totting hijackers, his driver managed to pull a Jason Statham and get them out of trouble. (Fox News)

• 📚 While we haven’t had a chance to read the book ourselves, a Forbes senior contributor takes a look at the book “The War Below: Lithium, Copper & the battle to power our lives” by Ernest Scheyder. If you are looking for a book to read at the cottage or on that tropical beach, this might be a good option. (Forbes)

• 🌎 World Atlas takes a look at the 10 largest copper mines in the world. How many can you name without looking? And do you know what the largest is? Half are in South America, with another 3 in Central & North America. Africa and Asia have 1 project each. (World Atlas)

• 🏞️ CNN profiles scientists working in Bangladesh who discovered the Ganges Delta was rerouted due to a large 7 or 8 magnitude earthquake roughly 2,500 years ago. We don’t completely understand all the science behind the research, but we are sure some of you geologists will find this article interesting. (CNN) or (Journal of Nature Communications)

• 🇨🇱 Columbia University’s Centre on Global Energy Policy interviews Juan Carlos Jobet, Chile’s former Minister of Energy & Mining. They discuss the country’s own energy transition as well as its broader role globally. They discuss lithium nationalization as well as the growing trade war between China & the United States and how it may impact Chile. (Columbia University)

• 📺 Matthew Chamberlain, CEO of the London Metal Exchange, was on CNBC last week discussing the outlook for the nickel industry. (YouTube)

• 🇬🇱 Authors in the Internationale Politik Quarterly argue that the European Union and United States should work more closely with Greenland to help develop its critical minerals. According to the authors, the Danish territory may have the second largest reserves in the world of Rare Earth Elements which are critical for things like wind turbines and nuclear reactors. They lay out a number of initiatives and policy steps that can be taken to help. (Internationale Politik Quarterly)

• 🇨🇦 The Mining Innovation Commercialization Accelerator (MICA) has chosen 10 projects to share in $2.4 million in development funding as part of its third cohort. There are some very cool companies listed with interesting technologies. (Northern Ontario Business)

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