May 8th, 2024 - The Mine Wire

METALS MARKET

WTI Crude Oil continued its fall to under $80 per barrel this week and is down -8.31% this month. Still, Lithium is taking the monthly poor performance cake, down -18.75%. Palladium is running in second, down -11.11% so far this month.

In terms of winners, iron ore saw a +8.16% gain this week and is up +16.44% this month. Other monthly winners include tin +11.66%, coal +13.96%, manganese +28.10% and indium at an astronomical +41.98%.

Indium is up +92.31% this past year with only uranium coming close at +72.75%. As we’ve reported in the past weeks, it has been a very good year to be invested in certain miners.

^{**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.

• 🇵🇦 Panamanians have elected pro-business candidate José Raúl Mulino as their new president. He ran on a campaign platform of boosting the economy, but was quiet when it came to First Quantum’s Cobre Panama mine. Still, the long-time politician has historically been friendly to the mining industry and the outcome is seen as positive for First Quantum. With that said, there is still a lot of uncertainty given the public sentiment towards the mine. (Financial Post)

• 🇧🇷 Brazil rejected Vale and BHP’s settlement offer for the Mariana disaster in 2015. The companies offered just over $25b USD but Brazil and the State of Espirito Santo rejected the offer suggesting it wasn’t much of an improvement on the last one. The State of Minas Gerais was more collaborative, suggesting it wasn’t a proposal they could sign, but would allow both sides to continue talks. (Reuters) 

• 🇧🇷 Within days, the Attorney General’s Office filed a request to the courts to have Vale and BHP pay roughly $15.69b USD within 15 days. If the companies fail to pay they have asked the courts to block the companies assets. (Brazil Government)

• 🇺🇳 The United Nations Environment Program put out an issues note this week on Deep-Sea Mining. They are concerned with the potential environmental impact of mining activities and suggest that more analysis is needed, as well as, reporting mechanisms for those nations that move to permit such activities. (UN Environment Program)

• 🇺🇸 This week, The U.S. Senate gave final approval to legislation barring imports of Russian uranium. Currently, about 12% of the U.S.’s uranium needs are filled by Russia. This gave domestic uranium stocks a boost as some are up 6% to 8% in the days since and Forbes event suggested there is still a 60% upside. (AP News)

• 🇺🇸 The U.S. Department of Energy (DOE) clarified in a blog post that domestic miners with critical mineral projects like Lithium, Cobalt and Nickel, are eligible for a $72b USD pot of loan guarantees under Title 17 Clean Energy Financing Program. (DOE Blog)

• 🇺🇸 The U.S. Treasury Department gave automakers additional flexibility on battery mineral requirements for electric vehicle tax credits on some crucial trace minerals from China, such as graphite. The department is giving automakers until 2027 to remove the hard-to-trace minerals. Automakers were pleased with the extension, while some politicians like the Senate Energy Committee Chair, Joe Machin, slammed the decision, “the administration has made it clear it will break the law in pursuit of their goal to flood the market with electric vehicles as quickly as possible." (Reuters)

• 🇺🇸 Not surprisingly then, North American graphite miners are lobbying the U.S. government to impose a 25% tariff on three graphite products sourced from China. This pits the miners against OEM’s who rely on China particularly since it controls about 70% of the world’s production of graphite. The OEM’s are against the tariff as they contend any additional costs increases will make them less competitive against domestic Chinese OEM’s. (Reuters)

• 🇺🇸 The U.S. Department of Energy’s Office of Fossil Energy and Carbon Management’s (FECM) Critical Minerals Sustainability Program, posted a Q&A with Grant Bromhal, Senior Science Advisor in FECM’s Office of Resource Sustainability and Acting Division Director of Mineral Sustainability. (DOE Blog)

• 🇵🇭 🇺🇸 The Philippines & United States are in early discussions about how to work together to prevent China’s dominance over nickel processing in the country. Early talks indicate a potential trilateral agreement where The Philippines supplies the raw nickel material, the United States provides financing and a third country like Australia, Japan or South Korea provides the technology for smelting and refining. The Philippines Environment and Natural Resources Secretary Maria Antonia Yulo Loyzaga said the country is ready to partner with all countries but, “They must practice responsible mining and advance our global competitiveness by investing in onshore processing.” (The Business Times)

• 🇦🇺 James Chalmers, Treasurer in Australia’s Albanese government, said the government will welcome foreign investment, but only if it is in Australia’s national interest. Foreign investment will be looked at from 5 points which include: Will it drive competition? Does it contribute to net zero targets? Will it benefit Australian workers? Will it improve national security and resilience to economic shocks? and will it give taxpayers value for money? The federal budget comes out May 14th. (9 News Australia - Video)

• 🇦🇺 The NSW government in Australia will be publicly sharing its geospatial survey data of the state of up to 50km below the surface, to support critical minerals exploration. The Minister for Natural Resources Courtney Houssos said, “The release of this data will help stimulate investment and make sure NSW continues to lead the exploration and development of critical minerals in Australia.” (NSW government)

• 🇦🇺 The Australian government is set to announce $566.1m AUS over 10 years towards deploying geoscientists to map Australian resources and deliver data, maps and other tools for the resources industry. This funding will be part of the upcoming budget next week. (The Australian)

• 🇩🇿 The Algerian Minister of Energy & Mining said that a joint desert exploration venture with China discovered lithium, along with tungsten, tantalum and niobium. (Zawya)

• 🇿🇼 Zimbabwe put the country’s only producing nickel mine under administration this past week after production was halted for over 7 months. The government owns 70% of Bindura Nickel Corporation’s (BNC) Trojan Nickel Mine that employs around 1,100 people. Damage done by a seismic event, coupled with low prices for nickel and high input costs like electricity, forced the shutdown according to BNC. (Globe & Mail)

• 🇿🇼 Zimbabwe’s Investment & Development Agency (ZIDA) said it is successfully attracting investors, particularly from China, to invest in lithium and gold projects. (The Sunday Mail)

• 🇺🇿 The President of Uzbekistan said the country will put together a program to provide $500m in support to promising rare earth element projects. The nation has recently signed a MOU with the EU to develop critical raw materials. (Times of Central Asia)

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MINING MATTERS FROM AROUND THE WORLD 🌎

• Glencore (LSE: GLEN) is apparently considering its own bid for Anglo-American after BHP’s offer was rejected the other week. Of course Glencore responded, “We do not comment on market rumor or speculation.” With that said, it is believed that Glencore could make a competitive bid as it wouldn’t need to decouple the assets in South Africa as part of the deal. (Reuters)

• China’s top smelters have raised concerns that BHP’s bid of Anglo-American would hurt their ability to negotiate copper prices as the combined entity would become the largest producer in the world, ahead of both Codelco and Freeport McMoRan. Add in the issues with the Cobre Panama mine and a projected deficit of the metal for the next 3 years, and prices should stay strong. (Reuters)

• 🇳🇪 A number of Chinese-owned gold mines in Niger were ordered to shut down after herders reported that dozens of animals died from drinking wastewater. (France24)

• Goldman Sachs settled a 2014 class action lawsuit which alleged the investment firm engaged in illegal trading activity related to platinum and palladium. Goldman Sachs did not disclose the settlement amount. (Morningstar)

• Orano’s Cluff Lake site in Saskatchewan, Canada, was fully decommissioned and returned to the province and is now accessible to the public. What a great story of reclamation! (World Nuclear News)

• Alliance Resources (NDAQ: ARLP) operates 7 coal mines in the United States and has a market cap $2.88b. Apparently, as part of a pilot project, the miner started mining bitcoins in the second half of 2020 with excess power it generated. Since then, it has amassed 425 bitcoins worth roughly $30m. We love the ingenuity! (Coindesk)

FIRST QUARTER EARNINGS

• Albemarle (NYSE: ALB), the world’s largest lithium producer, posted sales of $1.36b in the first quarter, down from $2.58b a year earlier. Adjusted EBIDTA came in at $291m, well below $1.761b a year earlier, but still positive particularly given the steep decline in lithium prices. The stock is up nearly 10% since the earnings were posted. (Albemarle)

• Lundin Mining (TSX: LUN) reported $937m USD in revenue in Q1, up from $753.1m a year earlier. The increased revenue came largely from the inclusion of the Caserones mine revenue. Despite the higher revenue, earnings per share were only $0.02 compared with $0.19 a year earlier. Lundin’s stock is up 4.38% since the earnings and a whopping 49.77% year-to-date. (Lundin Mining)

• Mosaic (NYSE: MOS) reported revenues of $2.7b, down 26% from a year earlier, due to lower selling prices. Net earnings totaled $46m for the quarter compared with $435m a year ago. The stock is down 3.14% since the news and down 18.09% on the year. (Mosaic)

• New Gold (TSX/NYSE: NGD) had revenue of $192.1m, down slightly from $201.6m a year earlier. Gold production was down over 17,000 ounces to 70,898. The lower production was offset by higher gold prices and higher production of copper. The miners stock is up 3.63% since earnings and up a stellar 35.98% this year. (New Gold)

• Coeur Mining (NYSE: CDE) reported revenues of $213.1m up from $187.3m a year earlier. Adjusted EBIDTA came in at $44.3m but net income loss was ($29.1m). The stock is up 11.30% since the earnings release and is up an astounding 60% this year. (COEUR MINING)

MINING BITS

• 🌑 A paper published this week suggests that Mars may have been quite a different planet in the past. In May 2017, the NASA Curiosity rover observed higher than usual amounts of manganese in the lakebed rocks within the Gale crater, Mars. These sedimentary rocks have larger grain sizes than what is typical for the lakebed rocks in the Gale crater. This may indicate that the original sediments were formed in a river, delta, or near the shoreline in the ancient lake. (Academic Paper Here)

• 🦠 Researchers in Spain have developed a new copper coating for touchscreens that can eliminate 99.9% of bacteria. The metal is opaque as well as electrically conductive, two qualities that aren’t so great for covering a touchscreen. However, the scientists were able to break the copper down through a process called rapid thermal annealing, leaving a film that was transparent, color-neutral and electrically non-transparent. All this while leaving in place the anti-bacterial properties. (New Atlas)

• 🇿🇦 CNN explores manganese processing in South Africa, or the lack thereof. Despite having one of the world’s largest reserves of manganese, it only processes about 2% of its production. Simply put, it is cheaper to ship the metal to be processed where the end-users are, rather than process it in South Africa where there is a lack of customers and costs can be higher. Yet, Manganese Metal Company is looking to change that. (CNN)

• 💎 Researchers from the Institute for Basic Science in South Korea published a study in the scientific journal Nature last week explaining the process they’ve used to grow synthetic diamonds in 150 minutes. Lab grown diamonds currently take a number of months to grow and while this new research is in its early phase, it could really shake things up. (Yahoo)

• 🌀 An earthquake map shows the biggest global tremors in 2024. We certainly feel safe being located in North America, knock on wood. See the map here - (Newsweek).

• 🧠 AsianInvestor takes a look at AI and the risk it poses for financial markets. The ability for AI to engage in subtle forms of market manipulation will clearly be possible and therefore, it will be important for AI to be integrated responsibly. While it isn’t covered in the article, what happens if nefarious foreign states engage in such practices? Will market trading need to change or have new rules? Will we see a move to more privately held businesses? What do you think? (AsianInvestor)

• 💩 Yup, that is a poop emoji. Apparently, big brands are going to pay Vaulted Deep $58.3m USD to shoot poop and other organic waste products into underground wells in order to prevent CO2 emissions. (The Verge)

• 🦷 A 38 year old dentist in Fukuoka, Japan, was caught stealing silver teeth last month. He told investigators that he had stolen teeth over 100 times in the past 10 years and sold them for roughly $200k USD. (The Japan News)

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