June 12th, 2024 - The Mine Wire

METALS MARKET

It was another rough week for metals as most saw declines. The biggest losers this week were Coal (-7.44%), Uranium (-6.18%), Zinc (-4.78%) and Nickel (-4.40%).

The biggest winner this week was WTI Crude Oil which was up +6.29%. The markets were spooked after OPEC met last week and suggested that they may start to increase production over time. However, after a pullback in prices, OPEC stated that they may also decrease production if necessary which helped prices bounce back.

^{**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.

• 🇨🇴 Colombia is set to ban coal exports to Israel, in order to put pressure on the Israeli government to stop the war in Gaza. Colombia is currently the largest supplier of coal to Israel with $450m in exports per year. The coal comes from two companies operations - Drummond Company based in Alabama and Glencore based in Switzerland. (Financial Post)

• 🌏 Continuing with coal, sources have told Reuters that some of the world’s largest economies want to finalize a plan through the Organisation for Economic Co-operation and Development (OECD) to halt new private sector funding of new coal projects before COP28 in November. Of course any policy would be non-binding so it would be somewhat symbolic. However, the policy to compensate closures as well as fund energy transitions sounds a lot better to us than straight out divestments and bans. (Reuters)

• 🇻🇳 Vietnam is one nation where coal use has been climbing steadily. With many companies moving operations out of China, Vietnam has benefitted the most. However, the rapid growth in the country’s economy demands energy and coal has been both cheap and abundant. (Reuters)

• 🇺🇸 Meanwhile in the United States, 14 states with coal operations have filed a petition for judicial review with the U.S. District Court for the District of Columbia asking it to vacate the rule they argue seeks to strip states of regulatory authority delegated to them by Congress and the U.S. Constitution. (KPVI)

• 🇬🇷 Greece became the 12th European country to support a moratorium on deep-sea mining. The government signed a cooperation agreement with France where they signaled their support. (Greece Government) The The Deep Sea Conservation Coalition (DSCC), founded in 2004, has a good infographic on the 26 countries calling for a moratorium and how strong their support is. (DSCC)

• 🇨🇦 In Canada, the government added three additional minerals to its Critical Minerals List. High-purity iron, phosphorous and silicon metal have been added and now bring the list to 34 minerals. (Government of Canada) or (Financial Post)

• 🇨🇦 The Canadian government also announced $10m in funding for two companies to support critical minerals mining in northern Ontario. Congratulations to the Mining Innovation Rehabilitation and Applied Research Corp (MIRARCO) and Electra Battery Materials Corporation (Electra) who will each receive $5m in funding. (Government of Canada)

• 🇰🇷 South Korea’s President is continuing his charm offensive again this week as he travels to Turkmenistan, Kazakhstan and Uzbekistan to explore expanding cooperation in critical minerals and other key sectors. Along with his summit with 48 African Nations last week, the President has been very busy. (The Korea Times)

• 🇰🇿 While we are on the topic of Kazakhstan, the nation is considering a $10-$12bn nuclear power plant as it considers its own energy transition. (DARYO)

• 🇨🇳 🇵🇰 China and Pakistan have agreed to boost mining cooperation. The Pakistani Prime Minister was in China last week to build the relationship and secure further investments from China. The latter has promised to promote mining investments in Pakistan to Chinese investors while working on other industrial initiatives. (Reuters)

• 🇧🇼 Botswana signaled that it is interested in increasing its stake in De Beers, particularly given all of media around Anglo-American divesting from the iconic brand. Anglo-American currently owns 85% of De Beers with Botswana owning the other 15%. (BNN Bloomberg) or (Bloomberg)

• 🇨🇫 Central African Republic government has suspended a Chinese mining company’s operations in the country, accusing it of cooperating with armed militias. The country's ministry of mines accused Daqing SARL, a Chinese gold and diamond mining company, of “intelligence with armed groups, illegal exploitation, illegal introduction of foreign subjects into mining areas, non-payment of taxes and lack of activity reports.” The country has been in conflict since 2013 with numerous militia groups. (ABC News)

• 🇻🇳 Vietnam looks set to allow private businesses to import gold for the first time in over a decade. In 2012, the government took over control of the import of gold but it now wants to bridge the gap between local prices and international benchmarks. Vietnam is one of the top 10 consumers of gold, as individuals use the precious metal to preserve wealth and hedge against market uncertainties. (Reuters)

SPONSORED BY S&A STRATEGIES

Update on Canada Capital Gains:

On Tuesday, Canada’s Deputy Prime Minister Chrystia Freeland introduced a motion in parliament on capital gains tax increases. The motion was separated outside of the larger budget votes to force the Conservative Party of Canada to vote on the tax. The governing Liberal Party of Canada is hoping to make a wedge issue out of “Taxing the Richest Canadians”. The motion ended up passing as both the New Democratic Party and the Bloc Québécois supported the motion to change capital gains taxes.

The Conservative Leader Pierre Poilievre said, "He [Trudeau] wants to tax away doctors when we have a doctor shortage. He wants to tax homebuilders when we have a housing shortage. He wants to tax farmers when we have a food price crisis, and he wants to tax small businesses when our economy is already shrinking.”

We covered these changes in a previous issue of The Mine Wire as there will be numerous impacts on the mining sector. Investors as well as employees of companies could be impacted and this in turn will have its own consequences.

The Conservative Party is currently in a very healthy lead in the polls, so there is hope that these changes may be reversed after the next election should Mr. Poilievre win. In the meantime, keep an eye on the market in the coming weeks as we suspect we could see some selling before June 25th when the changes take place.

S&A Strategies is a boutique government relations firm based in Toronto that has worked with junior mining exploration, mining services and other groups to secure government funding for their projects. Connect with us.

MINING MATTERS FROM AROUND THE WORLD 🌎

• The World Bank’s International Centre for Settlement of Investment Disputes has rejected Canadian miner Montauk Metal’s $180m USD claim against Colombia. The ICSID ruled that the ban on mining in the Santurbán Páramo should have been expected by the mining firm and further, that it didn’t violate the Canada-Colombia Free Trade Agreement. Colombia has thirty-four páramos that are unique, high-altitude wetland ecosystems that serve as vital sources of freshwater for nearby inhabitants’ survival. (The Northern Miner) 

• PwC came out with a report (BC Mine 2023) that says critical mineral mining is the greatest opportunity in a generation for the province of British Columbia. They point out that there are currently 17 applications in for critical mineral mines, but the regulatory processes take too long and are a risk to development. Metallurgical Coal currently accounts for $8.9bn or 61% of the net mining revenue in the province. Critical Minerals accounted for $3.8bn or 26% of the revenue. (PwC)

• Last week we mentioned that Novelis would be seeking an IPO - well it turns out the market conditions weren’t ripe enough for the company - “There was a lot of interest in Novelis and strong support for the company and its growth trajectory. However, market conditions did not support achieving the premium outcome we were seeking.” (Recycling Today)

• This week Russia’s Rosatom fired back at Bloomberg’s report that alleges Rosatom is courting Niger’s Military-led government for French Orano’s uranium assets. The Russian agency said, “The information published by Bloomberg agency is untrue and is regarded by us as an attempt to destabilize the international uranium market.” (Nuclear Engineering International)

• Lomiko Metals received a grant of $11.4 million from the U.S. Department of Defence and another $4.9 million from Natural Resources Canada in May. Well it turns out that the U.S. investment might be having a negative impact with some residents as they no longer see the potential graphite mine powering electric vehicles, but military equipment. The Quebec Minister of Natural Resources didn’t comment on the funding source but said mining projects must be accepted by locals to move forward. Graphite is used in electric vehicle batteries as well as military equipment. China currently produces roughly two-thirds of graphite globally while Canada accounts for roughly 1%. (CBC)

• Bloomberg reported that Glencore may be considering a sale of its 70% stake in Kazakhstan miner Kazzinc due to Chinese buyer interest. Given the rally in zinc prices this year, Glencore’s stake could be worth several billion dollars. Like some of the other larger miners, Glencore’s CEO is focused on simplifying the business and therefore, looking for opportunities to divest from smaller or complicated assets. (BNN Bloomberg) or (Bloomberg)

• Rio Tinto will acquire Mitsubishi’s 11.65% stake in Boyne aluminum smelter. It was reported recently that Rio Tinto would purchase Sumitomo Chemical Company’s 2.46% as well. Both purchases will bring Rio Tinto’s total ownership stake to 73.5%. (Rio Tinto)

• Rio Tinto will invest $143m USD ($215m AUD) to develop a research and development facility in Western Australia to further assess the effectiveness of its low-carbon ironmaking process, BioIron, to support decarbonizing the global steel value chain. Sounds like a great investment and a big win for Western Australia. (Rio Tinto)

• Metso will also make a significant €150m investment to build a new Lokomotion technology center in Tampere, Finland. The new center will house over 900 employees (Metso)

• Rare Earths Norway (REN) estimates that they’ve found Europe’s largest deposit of Rare Earth Elements (REE), around 8.8 million tons. Europe currently has no REE mining projects and most of the global REE production is controlled by China. REN was established in 2016 and has 2 owners, Hustadlitt Group and Brennebu AS, both privately owned holding companies with long histories in mineral exploration and development. (CNBC)

• Rare Earth Element’s strike again as it was reported that US uranium producer Energy Fuels, will invest $183m into Australian-based Astron Corporation’s rare earth and mineral sands operation in Western Victoria. It is the 4th largest REE project globally and the 2nd largest in Australia. (ABC)

• Meanwhile, Fireweed Metals has raised $41.7m CAD (30.3m USD) from the Lundin Family Trusts to help develop its assets in the Yukon Territory in Canada. The stock is up almost 6% since the investment was announced. (Fireweed Metals)

• Nevada Copper on the other hand, was unable to raise additional funds and filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court of the District of Nevada. The company is not expecting to continue operations but is looking to preserve and protect its assets. The President & CEO stepped down and a new board chair has been appointed. Not surprisingly, the stock went from $0.10 to $0.02 cents on the news and is currently down 66.7%. (Nasdaq)

• Construction started on Bill Gates TerraPower nuclear plant in Kemmerer, Wyoming. The plant is being built adjacent to the Naughton Power Plant which is expected to stop burning coal in 2026 as well as natural gas a decade later. TerraPower has said it will hire workers from the Naughton Power Plant once it is operational. (Newsweek)

MINING BITS

• 🤖 The Atlantic takes a look at the U.S. Geological Survey and other scientists helping prepare astronauts for the upcoming Artemis III mission to the moon. It argues that astronauts can certainly do a better job of analyzing the surface of the moon compared to a group of scientists staring through a computer screen at whatever the rover is recording. However given the advance of A.I., some ponder whether robots will be able to replace geologists in the future or whether there are, “knowledge in terms that are idiosyncratically human like the smell of a mineral warmed by a rock hammer’s strike, or the sink or crunch of the soil underfoot.” Regardless, it does seem likely that robots and A.I. will dominate space travel until we figure out how to adjust human life to such harsh conditions. (The Atlantic - Paywalled)

• 🥚 Researchers from Trinity College Dublin’s School of Natural Sciences and the Irish Centre for Research in Applied Geosciences (iCRAG), have used eggshell waste to recover rare earth elements (REEs) from water. The unique characteristic of eggshell calcite makes it a potential sustainable sorbent for REEs according to the researchers. (The Engineer)

• 🇦🇺 🏡 Anyone living in Vancouver, Toronto, Adelaide, Melbourne, Sydney, or Auckland will known that housing affordability is as dire as large cities like Singapore, Hong Kong, London, San Francisco and New York. In a case that is similar to Fort McMurray during the oil sands boom, the mineral-rich Pilbara region of Australia is attracting more people to the area due to the resource boom. The downside? An impact on the rental market and escalating costs. Now there are calls for subsidized accommodations for mine workers. (ABC) & (Visual Capitalist)

• 👨‍🏫 The University of Utah, in collaboration with the Chile-based company Minverso, has developed the initial phase of a first-ever metaverse platform that includes a mining training program using virtual reality (VR). This certainly seems like a positive development in giving potential students a taste of mining while also improving the health & safety in mines around the world. (University of Utah)

• 🗺️ The British Geological Survey’s National Geoscience Data Centre has released another 8,000 technical reports that were created between 1950 and 2000. They cover onshore geology, marine geology, minerology and petrology, mineral resources, global seismology and geomagnetism. (British Geological Survey)

• 🪙 Swiss Based precious metals company MKS PAMP Group has repurposed an aviation hangar in Florida for a silver mint in a bet on strong North American investment demand. PAMP was the first brand to decorate the reverse sides of its minted bars with its Lady Fortuna bars. Recently it has come out with themed bars like Call of Duty, Barbie & Hot Wheels. (Reuters)

• ♻️ The Associated Press takes a look at Nexans, the behemoth French wire & cable producer. At their operations in Montreal, there is a focus to recycle more as demand is projected to outpace supply. About 14% of the metal in their products is recycled and they hope to get to 20%. Apparently two-thirds of the copper produced in the last century is still in use. I guess this is why copper theft is on the rise globally. (AP News) & (Calgary Herald)

• 🇺🇳 🇯🇵 UNESCO has asked Japan to provide more details on its submission of a gold and silver mine complex on Sado Island for World Heritage list registration. The gold mine was founded in the 17th century and produced gold for 400 years. Despite its rich history, the mine used Korean forced labour during WWII and therefore, the application has brought a strong objection from South Korea. (The Asahi Shimbun)

• 🤑 Whatcha gonna do when the Hulk runs a pump and dump on you? Yes, Hulk Hogan is the latest to be accused of promoting a meme coin in his name, although he has stated the posts were not from him and would be deleted. In other news, SEC Chair Gary Gensler was interviewing Jim Cramer on ETF’s and the mere mention of a meme coin in his name, sent the coin up 650% immediately despite him calling it a pump and dump. (Cypto Potato) & (Benzinga)

• 🌊 Finally, John Oliver on his Last Week Tonight show on HBO took aim at Deep Sea Mining. He took aim at The Metals Company and insinuates they are sugar coating the process by comparing it to picking up golf balls on a driving range. Instead he had his own words for the potential impact on sea life - “Basically, it could fuck everyone’s shit up.” While John Oliver ain’t no Ryan Reynolds, Scarlett Johansson or Keanu Reeves, celebrity attention to any issue can turn public sentiment quickly and create havoc for policy-makers. (The Guardian)

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