November 13th, 2024 - The Mine Wire

METALS MARKET

Not a very pretty chart above. It is a tale of two stories. The stimulus in China was not well received and the re-election of Donald Trump went smoother than expected.

In China, the USD $1.4 trillion bailout was aimed at fixing municipal balance sheets. Analysts believe the money will be used to shore up hidden debts and don’t believe much of the stimulus will go towards boosting the economy. Further, while the U.S. only accounts for 16% of China’s exports, any tariffs and their spread among allies will only make things tougher for the Asian superpower. This weighed on many metals this week.

While both the U.S. Federal Reserve and the Bank of England cut their interest rates by a quarter basis point last week, some are concerned that Trump tariffs could slow interest rate cuts, impacting gold’s appeal. The precious metal suffered its worst week in 5 months last week. Additionally, China paused its purchase of gold for the sixth straight month while demand in India waned.

By far the biggest winner this past week was Bitcoin. Since Trump’s re-election, the crypto currency has soared to nearly $90,000 US as he is seen as crypto-friendly. We suspect there will be gains in the sector across the board, but this will also give rise to pump and dumps so if you are playing in this space, be cautious.

^{**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

Here are some of the notable government policy moves this week:

• 🇲🇱 Australian gold miner Resolute Mining (ASX: RSG) confirmed that three of its executives, including its CEO, were being detained in Mali. Resolute said the executives were in Mali's capital Bamako to hold discussions with mining and tax authorities regarding Resolute's "in-country business practices, and to progress open claims made against Resolute, which the company maintains are unsubstantiated". Western Australia’s Premier said the men have not been harmed and are "being looked after." While we assume and hope this is a strong arm tactic by the junta to get its way in negotiations, it does not bode well for the country’s image. The miners stock is down 43% since the news broke. We hope that the executives are released quickly. (ABC News)

• 🇬🇶 Did the sex in government offices have you scrolling this week? The African nation of Equatorial Guinea has ordered new measures to prevent the judiciary and ministry officials from engaging in illicit acts at work and installed security cameras in all offices. Private videos were apparently found in the hundreds at a senior finance officials home who was being investigated for corruption. The videos appeared to include wives of other powerful government figures as well as their other family members. The Vice President said the leaked videos have denigrated the country's image. President Teodoro Obiang has ruled Equatorial Guinea for 45 years, the world’s longest serving President. The ministry official who was investigated and caught - his nephew. Was this a political hitjob as senior government officials jockey to be the successor to the 82 year old President? We have no clue, but the videos appear to be real and given the country’s history of torture, murder and violence, we wouldn’t want to involved. (BBC) & (Reuters)

• 🇺🇸 The National Mining Association is looking forward to working with President-elect Donald Trump. “The first time Trump was in office, he issued executive orders, did quite a bit, started moving some projects through the pipeline,” said Rich Nolan, president of the National Mining Association. Nolan said that the Biden administration was less consistent, approving some projects while blocking others. The association believes that a lot of bi-partisan initiatives will now cross the finish line. Trump has started announcing key appointments like Susie Wiles as his Chief of Staff and Rep. Lee Zeldin, R-N.Y., to lead the EPA. It shouldn’t be long before the entire cabinet for his administration is announced. (Politico) & (NBC News)

• 🇦🇺 Regis Resources (ASX: RRL) is taking legal action against Federal Environment Minister Tanya Plibersek who issued a protection order in mid-August, rejecting the proposed site of a tailings dam at the McPhillamys mine in central-west NSW. The order was given based on aboriginal cultural heritage claims, but the company argues those were "vigorously disputed". (The Canberra Times)

• 🇦🇺 Former NSW Labor Mineral Resources Minister, Ian MacDonald, lost an appeal over his jail sentence for a corrupt mine deal while he was Minister in 2008. He was sentenced to 14 years in prison with a non-parole period of 10 years in 2022, after a judge found there was a high degree of criminality involved in issuing the Doyles Creek mine license. It was issued without tender to John Maitland, a former union leader and cost the state tens of millions in lost up-front fees that other tenders in the same region were generating. While the appeal judges recognized that the sentencing was strict, they also said it was not “out of the range” to conclude the sentencing judge had erred. (news.com.au)

• 🇨🇦 The Canadian government announced $1m in funding for the Geological Survey of Newfoundland and Labrador while the province issued a request for proposals for the Glover Island Exempt Mineral Land. The closing date for proposals is January 22nd, 2025. (Canada Government) & (Glover Island RFP)

• 🇨🇦 The Ontario government’s Mines Minister George Pirie and Associate Mines Minister Stephen Crawford announced that $13m in funding will go to 84 projects through its Ontario Junior Exploration Program (OJEP). 62 of the projects are focused on the exploration of critical minerals. The Ontario Junior Exploration Program covers up to 50 per cent of eligible costs and up to a maximum of $200,000 per project for companies with a market capitalization up to $100m. (Ontario Government)

• 🇨🇦 Agnico Eagle announced yesterday that it had received $10m in funding from the Ontario government as part of the Skills Development Fund Training Stream. The project will train more than 150 workers over a one-year period, with a priority for Indigenous Peoples and other underrepresented minority groups. This program will support workforce development for critical mining jobs in high demand, including underground and surface miners, trades apprenticeships and engineers and geologists in training. This project provides participants with immediate, full-time employment, with training directly at Agnico Eagle's mining operations. (Agnico Eagle)

• 🇨🇦 Jealous of that $10m that Agnico Eagle got yesterday? Well the province of Ontario will open up its second capital stream for Skills Development Fund on November 29th with $74m available. The funding goes towards building a new training centers, upgrading existing training centers or converting an existing building into a training center. Sectors targeted include the skill trades, healthcare and information technology as well as other sectors experiencing recruitment challenges. To date, many of the recipients have been unions in the skilled trades. (Government of Ontario)

• 🇨🇦 The Office of the Auditor General of Canada issued a report on Canada’s critical mineral strategy and found that Natural Resources Canada did not have strong enough governance or robust risk analysis, nor did the department sufficiently assess the environmental and climate impacts of the Canadian Critical Minerals Strategy to support the achievement of the strategy’s objectives of advancing reconciliation with Indigenous peoples and promoting climate action and environmental protection. (Auditor General of Canada)

• 🇨🇳 Chinese lawmakers passed the revised Mineral Resources Law, which requires action to increase reserves of strategic minerals and boost production capacity. The law stipulates that the government should refine policies to step up support for exploring, mining, trading and stockpiling mineral resources of strategic importance. (The People’s Republic of China)

• 🇨🇳 🇮🇩 China and Indonesia signed deals worth $10 billion at the Indonesia-China Business Forum in Beijing this past weekend. On Saturday, Chinese President Xi Jinping and Indonesian President Prabowo Subianto met, the first state visit for the Indonesian President who took office last month. The visit is symbolic in showing Indonesia’s desire to further strengthen ties with China. (Reuters)

MINING MATTERS FROM AROUND THE WORLD 🌎

• 🇨🇦 Unionized supervisors at British Columbia ports and dockworkers at the Port of Montreal were both on strike this week. The two ports represent 55% of Canada’s volume (BC - 45%, Montreal - 10%) and impact imports as well as exports. Canadian agricultural and forestry products, oil and critical minerals all need these ports humming in order to move their products to Asia and Europe. Not surprisingly, as we are writing this on Tuesday, the Canadian Labour Minister, Steven MacKinnon, announced the government was imposing binding arbitration and forcing both sides back to work. Potash companies were one of the first to call for an end to the strike and the Minister specifically referenced concerns related to this sector in his announcement. (CTV News)

• 🇨🇦 In other Canadian news, Pan American Silver (TSE: PAAS) received approval from the Government of Canada under the Investment Canada Act for the sale of its La Arena gold mine as well as the La Arena II project in Peru, to Jinteng (Singapore) Mining, a subsidiary of Zijin Mining Group. Canada has been blocking the sale of companies with projects that are deemed critical to national security. Gold however, is not typically on that list so this isn’t really a surprise, but we are sure the company is breathing a big sigh of relief. (Pan American Silver)

• South32 (ASX: S32) announced that it was acquiring a 19.9% stake in American Eagle Gold Corp. (CVE: AE) for USD$22m. The investment will support American Eagle Gold’s exploration activities in British Columbia, Canada. (Newsfile)

• Japan's Itochu Corp. has agreed with Brazil's steel company Companhia Siderúrgica Nacional (CSN) to buy a 10.74% stake in CSN's iron ore unit CSN Mineracao (CM) from CSN for about 4.42 billion real (USD $769 million). (Reuters)

• 🇰🇷 Last week we touched on the continued drama at Korea Zinc as the company did share buybacks and then did reissuance of stock to raise money. Well, it turns out that South Korea’s regulator the Financial Supervisory Service (FSS) is halting the issuance for the moment. “After reviewing the securities report submitted by Korea Zinc, we found insufficient details explaining the purpose of the rights offering, its decision-making process, the lead underwriter’s due diligence, the reason for setting subscription quotas and how it differs from its tender offer prospectus,” said an FSS official. The FSS is now auditing Mirae Asset Securities and KB Securities, underwriters of Korea Zinc’s rights issuance and looking for any illegal activity. The FSS has suggested that the process could have violated the Capital Markets Act. (The Korea Economic Daily)

• Zhejiang Huayou Cobalt Co., one of the world’s largest nickel producers, is sounding out banks for roughly $2.7bn in financing for its Ford Motor Co. backed project in Indonesia, according to Bloomberg. (BNN Bloomberg)

• Meanwhile, GEM Co., a Chinese battery-metal producer, and Vale SA’s Indonesian unit signed an agreement to build a $1.42 billion nickel plant in country with GEM owning up to a 25% stake in the project, Vale owning 30% with a 3rd party being introduced for the remainder. (BNN Bloomberg)

Q3 Earnings Bonanza!

• It was a big earnings week as many miners reported Q3 earnings. Albemarle lost more than $1bn as lithium prices have stayed as depressed as Eeyore from Winnie the Pooh. Large gold miners continue to ride high prices with Kinross and IAMGold beating analyst expectations. Barrick Gold missed but still came in with a 31.25% increase in profits (+$115m) compared to a year ago. Cameco blew past analyst revenue targets of $535.8m for the quarter, with $721m achieved. However, the uranium giant’s net earnings came in at $7m compared with $148m a year earlier due to higher costs.

• Companies with earnings this past week included: Albemarle, Arcadium Lithium, B2Gold, Barrick Gold, Calibre Mining, Cameco, Coeur Mining, Endeavour Mining, Equinox Gold, Filo Corp., First Majestic Silver Corp., First Mining, Franco-Nevada, Galiano Gold, IAMGold Corp., Intrepid Potash, Kinross Gold, Labrador Iron Ore Royalty Corp., Lithium Americas, Lithium Royalty Corp., Lundin Mining, McEwen Mining, Piedmont Lithium, Nutrien, SSR Mining, Standard Lithium and Wesdome Gold Mines.

MINING BITS

• 💡 The University of Waterloo shared five tips to get emerging talent excited about mining. These are related to the need for the mining industry to change perceptions with Generation Z (born between 1997 & 2012). First, highlight safety efforts as there is a misconception that mining is unsafe. Second, leverage technology and innovation as emerging talent is drawn to leveraging cutting-edge tools. Third, engage key influencers and educational institutions such as parents and educators who may have outdated perceptions of mining. Fourth, prioritize work-life balance and career development with flexible schedules. Fifth and finally, commit to environmental sustainability. Overall message - the mining industry needs to do a better job of communicating their successes and the advancements they are making in mining. What do you think? (University of Waterloo)

• 🇦🇺 Speaking of public perceptions, Australia's national science agency, CSIRO, conducted its 10th annual “Australian Attitudes toward Mining survey”. They’ve found that the energy transition is positively impacting attitudes towards mining. Key findings included:

  • 73 per cent of respondents acknowledge that access to critical minerals is essential to achieve net zero emissions.

  • 71 per cent agree that mining is important to the Australian way of life.

  • 72 per cent believe mining will support Australia’s future prosperity.

  • Despite the above, 61 per cent agree that mining has negative environmental impacts.

  • 32 per cent of respondents believe Australia should reduce mining activity, even if it delays the transition to net zero emissions.

  • Ensuring fair distribution of mining’s benefits and actively engaging communities are key to maintaining the industry’s social license (52 per cent of participants agree that mining communities receive a fair share of benefit).

  • Katie Valentine, Head of Integration & Execution of Fortescue’s Decarbonization Program said, “The findings in this report reiterate the urgency for the mining and resources sector to accelerate its decarbonization efforts.” (CSIRO)

• 🌳 Well how timely, KPMG published its 2024 Global Metals and Mining Outlook report which looks at strategies for decarbonization and operational excellence. The report is 46 pages and too big for us to summarize here, so if you have decarbonization, sustainability or chief in your title, you might want to give this one a read. (Report Here)

• 💧 MIT news takes a look at another company, Phoenix Tailings, founded by alumni, that is scaling up a process for harvesting materials, including rare earth metals and nickel, from mining waste. The company uses water and recyclable solvents to collect oxidized metal, then puts the metal into a heated molten salt mixture and applies electricity. Very cool stuff. —> (MIT News)

• 🇦🇺 The BBC takes a look at Rio Tinto’s Greater Nammuldi iron ore mine in Pilbara where autonomous haul trucks are the norm. In fact, Australia has the greatest number of autonomous trucks and mines that use automation of any country. According to Rio Tinto, the move was made to improve the safety of workers which data supports it has, while productivity has also improved 15% as autonomous vehicles don’t have to account for shift changes or breaks. To date, no one has lost their job to automation as they’ve been retrained or redeployed. Certainly, overseeing autonomous vehicles in an operating center in a city is going to be more appealing to the next generation of workers than doing fly-in, fly-out work. Finally, if you’ve ever operated a haul truck, and we have, our first thought is what happens when a ramp gets wet and a truck slides. How does the automated truck deal with that? Well it is pointed out by one professor at the University of Queensland that effort needs to be directed into improving the ability of trucks themselves to detect moisture as there have been incidents where wet roadways have caused them to lose traction. Regardless, the mines of the future are here. Worth a read! (BBC)

• 🫖 A collection of Chinese silver worth £10,000 was discovered in an attic after being hidden away for 80 years. The collection includes a sterling silver tea set, salver, and ewer, all with finely detailed dragon decoration, carried out by Shanghai silversmith Zeewo. The pieces were made between 1900 and 1920 and were hidden by servants during WWII. We really love the design of these but we love dragons. Click here for the picture —> (BBC)

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