May 29th, 2024 - The Mine Wire

METALS MARKET

Gold pulled back this week as investors grew apprehensive over U.S. rate cut timings particularly given the strength in U.S. business activity. Copper (-4.70%) and Palladium (-4.81%) had the biggest pullbacks this past week while Cocoa saw a +17.65 swing again this past week. Cocoa is up +186.50 year-on-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.

• 🇨🇦 The Government of Saskatchewan has proclaimed May 26 to June 1 as Mining Week in the province. (Government of Saskatchewan)

• 🇨🇦 In British Columbia, HTEC announced a $900m investment to build a network of hydrogen production plants and vehicle refueling stations in Western Canada (18 in BC and 2 in Alberta). The Canada Infrastructure Bank is loaning the company $337m while B.C. is supporting the project through four Low Carbon Fuel Standard Initiative Agreements valued at $133m. (CBC) or (The Interior News)

• 🇺🇸 Congress will fund a feasibility study on deep-sea mining by the Department of Defense. The $2m in funding will allow the Pentagon to work with “an entity experienced in refining critical minerals and producing battery-grade metals". If the United States does move forward like Norway, they can certainly expect legal challenges as we cover in our Mining Bits section this week. (Wall Street Journal)

• 🇺🇸 🇰🇪 President Biden, hosted Kenyan President Ruto at the White House which included a state dinner with an impressive guest list. The U.S. agreed to investments in green energy and health manufacturing, as well as helping Kenya reduce its large debt load - mainly to China. As part of these announcements, the U.S. International Development Finance Corporation announced $250m in new investments. (Reuters)

• 🇺🇸 🇨🇳 An interesting piece by Mandy Meng Fang, an Assistant Professor in the School of Law at City University of Hong Kong, who argues that the WTO needs repairing in order to bring temperatures down between China & The United States. She argues, “A full-blown subsidy war between major clean energy producers now threatens to undermine the liberal trading order and fragment global clean energy value chains built on efficiency and economies of scale.” Our bet is on continued tensions or maybe we just watch the news too much. (East Asia Forum)

• 🇨🇳 Speaking on China, it’s state stockpiler - the National Food and Strategic Reserves Administration is expected to purchase around 15,000 tons of cobalt in the next few months from Chinese producers for its stockpile. With cobalt prices near 5 year lows, it isn’t surprising that the government is increasing their purchase volumes. (Reuters)

• 🇦🇺 Western Australia State refreshed its Battery and Critical Minerals Strategy. While the updated strategy announcement didn’t include new funding, the government did announce a $500m Strategic Industries Fund in its recent state budget. The near term priorities for the government include creating a more efficient approvals system; planning and investing in common user infrastructure; and targeted support for strategically important projects. (Western Australia Government)

• 🇦🇺 The Northern Territory passed legislation this week which changes the way royalties are calculated. The Mineral Royalties Bill 2024 introduces a new ad valorem royalty scheme from July 1st, 2024 for the calculation, payment, and administration of mineral royalties for new mines that begin from 2024. The current profit-based mineral royalties scheme contained in the Mineral Royalty Act 1982 will be grandfathered for all existing mines that were in production in the 2023 calendar year. The four royalty rates that will apply are 7.5% for the least refined minerals, 5% for concentrates, 3.5% for chemically refined minerals, and 2.5% for final or highly processed minerals. (Mining.com.au)

• 🇳🇿 The New Zealand government has published its draft minerals strategy for New Zealand to 2040 document. The government has posted it and is accepting submissions until July 31st, 2024. The government has indicated that it would like to double exports of minerals which are currently at $1bn annually. (Government of New Zealand)

• 🇲🇽 Mexican President Andres Manuel Lopez Obrador said the country will not expropriate U.S. construction company Vulcan Materials' mine, but will keep the land closed until the end of its contract term. The President said, "As long as I'm president, we're not going to allow the environment to be destroyed." Vulcan Materials argues against the claim and is now seeking $1.5bn in damages through the International Centre for Settlement of Investment Disputes (ICSID). (Reuters)

• 🇨🇱 The Chilean Minister of Mines signaled that in July 2024, the country will launch a public consultation to modify Supreme Decree No. 248, which regulates tailings deposit design, construction, operation and closure. (Mining.com)

• 🇨🇴 This week, Colombia's Constitutional Court denied proposals from the finance ministry to modify a ruling that struck down a ban on oil and mining companies deducting royalties from their taxes. The government argued that the deductions will cost the government $1.72bn this year and therefore, asked for the deductions to start from 2025. It seems pretty reasonable to us that paid out royalties would be deducted from taxable income, but we aren’t surprised a government would like to double-dip! (SaltWire)

• 🇨🇳 🇹🇷 Turkish Energy Minister Alparslan Bayraktar met with China's Minister of National Resources Wang Guanghua during a visit to Beijing last week and the pair agreed to boost cooperation on mining, especially in critical minerals and rare earths. Turkey is looking to build three nuclear power plants and is working with Russia & China to make it happen. (Reuters)

• 🇷🇺 🇬🇼 Earlier this month the Guinean President visited Russia and met with President Putin. The two nations agreed to collaborate on oil exploration and bauxite mining in the tiny Western African nation. (Energy, Capital & Power)

• 🇮🇩 The Diplomat takes a look at the corruption charges recently brought against Harvey Moeis, a wealthy businessman with interests in the mining sector. Moeis & his wife gained notoriety through social media where they showed off their immense wealth & spending. Now Moeis is accused of establishing illegal mining operations on concessions that actually belonged to state-owned mining firm PT Timah. This was apparently done in collusion with PT Timah officials. The article covers the $26bn amount that has been thrown around in terms of what Moeis stole, but the article clarifies that these figures actually include the environmental and ecological damage that was done. Our advice - if you are doing dirt, maybe keep the lifestyle low-key. Frank Lucas in a fur coat anyone? (The Diplomat)

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MINING MATTERS FROM AROUND THE WORLD 🌎

• Cameco (TSE: CCO) announced a $500m debenture offering and closing by private placement. Cameco will pay 4.94% interest per annum, paid semi-annually, and the debt will mature on May 24th, 2031. (Cameco)

• IAMGOLD (TSX: IMG) (NYSE: IAG) completed a US$300m bought deal financing issuing 72,000,000 share at 4.17 per share for gross proceeds of $300.24m. The miner intends to use the net proceeds to repurchase Sumitomo Metal Mining Co’s 9.7% interest in the Côté Gold Mine. This will bring its ownership back to 70%. (Newsfile)

• Hudbay Minerals (TSX: HBM) (NYSE: HBM) also took advantage of big gains in its share price to issue 36,840,000 common shares at a price of US$9.50 per common share for aggregate gross proceeds of US$349,980,000. The miner intends to use the net proceeds to fund near-term growth initiatives. (Newsfile)

• Australian Copper & Gold producer AIC Mines (ASX: A1M) raised $57m by issuing 110m new shares at 52 cents per share for institutional investors. The Miner will use the funds to extend the life of its Eloise, high grade mine in North Queensland, which has been operating for 28 years. (Hot Copper)

• The European Bank for Reconstruction and Development (EBRD) is providing a US$50m loan to Esan Eczacibasi Endustriyel Hammaddeler Sanayi ve Ticaret AS in Turkey to finance the company’s resource and energy efficiency investments at the Balya polymetallic mine, located in Balikesir. (EBRD)

• Anglo American (LON: AAL) has agreed to sell its niobium and phosphates businesses in Brazil to China Molybdenum for $1.5bn in cash. The sale will help the miner cut debt in it’s fight to hold off a bid by BHP. The sale was roughly $500m higher than what analysts expected. (Reuters)

• Based on Anglo’s need to reduce debt, South32 (AUX: S32) said it’s open to purchasing Anglo’s share of two manganese operations the companies own together, assuming the price is right of course. (Reuters)

• Hecla Mining (NYSE: HL) announced that its Board Chair, Catherine Boggs, would be taking over as Interim President & CEO immediately. No reason was given for Phillip Baker’s retirement, the outgoing President & CEO. (Hecla Mining)

• Russia’s Nornickel (GMKN:ME) is planning to construct a platinum group metals refinery in Bahrain. Nornickel is the world's largest producer of palladium and a major producer of platinum, accounting for 41% and 12% of global mine output. (Reuters)

• China’s CITIC Metal Corp. has approval from its board to sell part of its stake in Ivanhoe Mines (TSE: IVN). The transaction could represent up to 25,390,428 shares or 2% of the outstanding shares of the miner. At yesterday’s close Ivanhoe was trading at CAD$20.59, so the sale could generate north of CAD$500m if prices hold. CITIC currently holds around 24.78% of Ivanhoe Mines, so this is just a small sliver of its holdings. (Mining Technology)

• Chilean Miner SQM (NYSE: SQM) reported a $870m net loss in the first quarter. The world’s 2nd largest lithium producer was hurt by low prices of the metal as well as an unfavorable tax ruling which has a $1.1bn impact. A year earlier, the miner reported a $750m profit in the same quarter, showing just how much things have hurt for lithium producers this past year. (Reuters) or (SQM Earnings)

MINING BITS

• ☄️ According to Nasa, the Auroras seen on May 10th and 11th, may have been the strongest in the past 500 years. The British Geological Survey claimed that the aurora display in the U.K. was the result of the most extreme and long-lasting geomagnetic storm recorded in the last 155 years. While miners in the north may get to see this auroras often, many folks got to see the cosmic displays for the very first time! (Forbes)

• 🕹️ Professor Tom Raimondo, Dean of Programs for Information Technology and Mathematics at the University of South Australia, says a virtual and robotic revolution in Australia’s mining industry could spell the end of fly-in-fly-out (FIFO) workers within decades. (University of South Australia)

• 🐼 WWF-Norway is taking the Norwegian government to court over its decision to open up seabed mining. The environmental group claims that Norway failed to properly assess the consequences of this move and further, went against the advice of its own advisors. (The Guardian) or (Barrons)

• 🌊 Researchers have seemingly solved the mystery of the Sur Pockmark Field, located off the coast of Big Sur, California. There are around 5,200 pockmarks that are about 200 meters wide and 5 meters deep. It was thought that methane gas played a role in their development, but no methane was found. Instead, they discovered that sediment gravity flows, akin to underwater avalanches of mud, sand, and water, have been maintaining these formations for hundreds of thousands of years. We are still holding out hope that it may be an underground parking lot for UFOs! (Earth.com)

• 🇲🇲 The NGO Global Witness issued a report on heavy rare earth mining in Myanmar and the issues with their mining practices on the environment. The $1.4bn dollar industry is controlled by the military dictatorship and is leading to public health risks as well as environmental destruction, according to the NGO. With the metals going straight across the border to China, we doubt international forces will have any influence, but it again raises the issue of sustainable mining and the double standard globally. (Global Witness) or (Le Monde)

• 🏞️ A new study has identified at least 75 rivers & streams in Alaska that have turned bright orange due to melting permafrost, which has released toxic metals into the waterways. The orange coloring can be seen from space and there is a concern that the acidic levels will be deadly to spawning fish. Chemical analysis revealed high levels of zinc, nickel, copper, cadmium and iron. (Live Science)

• 🌋 A new study in Nature Geosciences takes a look at the 2018 volcanic eruptions from Kilauea in Hawaii, located at the Volcanoes National Park on the Big Island. The atypical eruptions were up to 30 feet high and were likely due to the collapse of the magma reservoir, which suddenly increased the pressure of gas trapped in the chamber and lead to an explosive eruption. (ABC News)

• 🎙️ On his podcast, Conan O’Brien Needs a Friend, Conan talks to miner Brad from Manitoulin Island about efficient mine design, how deep Conan could bury himself, and which specific mining position Conan would be best suited for. (Spotify)

• 🇰🇷 Korea launched its new space agency this week - the Korea AeroSpace Administration (KASA). In March, the government established the 2024 Space Development Promotion Action Plan and set five major missions — including space exploration, space transportation, space industry, space security and space science. (The Korea Times)

• 🌮 Taquería El Califa de León, situated in Mexico City’s San Rafael neighborhood was awarded a coveted Michelin Star this past week. The 100-square-foot taco stand with just four items on the menu and nowhere for diners to sit has been open since 1968. Tacos cost between 53 to 82 Mexican pesos (roughly $3 to $5). (Smithsonian Magazine)

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