November 27th, 2024 - The Mine Wire

METALS MARKET

A truce between Israel and Hezbollah helped ease worries about potential supply disruptions in the middle east and kept crude oil below $70 per barrel. However, escalations in the Russia-Ukraine conflict as well as Iran taking steps to expand its nuclear fuel production has created enough uncertainty to keep prices in the $70 range for now. The geopolitical climate has generally boded well for precious metal prices.

^{**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:

• 🇺🇸 🇨🇦 🇲🇽 🇨🇳 On Monday, President Donald Trump made a splash with his promise to implement a 25% tariff on all goods entering the United States from both Canada & Mexico. He also promised an additional 10% tariff on all Chinese goods. Mexico’s President, Claudia Sheinbaum, said the government has gone on a campaign to get companies to replace Chinese parts with locally made ones. President Trump says that illegal drugs and immigration are issues from both sides of the border and he will not remove the tariffs until these issues are resolved. Negotiation tactic? Most likely. Blunt force tool? Absolutely. Working? Certainly seems to be getting a reaction and we are starting to see an every person for themselves mentality. (Reuters) & (AP News)

• 🇲🇽 Meanwhile, Mexico was also busy proposing an increase to two different mining royalties according to the mining chamber Camimex. The first royalty is currently 7.5% of the income from the sale of minerals extracted from a mining concession minus the authorized deductions, on an annual basis (the government royalty) - this would be increased to 8.5%. The second royalty is in the case of the commercialization of gold, silver or platinum, where an additional 0.5% of the income for the sale of such minerals on an annual basis (the extraordinary government royalty) is paid. This would increase to 1.0%. (Mexico Business News)

• 🇺🇸 The U.S. Geological Survey put out a report on critical minerals. Their researchers have developed a new model to assess how disruptions of critical mineral supplies may affect the U.S. economy. Using the model, the researchers estimate there could be a $3.4 billion decrease in U.S. GDP if China implements a total ban on exports of gallium and germanium, minerals used in some semiconductors and other high-tech manufacturing. (U.S. Geological Survey)

• 🇨🇦 The newly re-elected NDP government in British Columbia has decided to create a new Ministry of Mining and Critical Minerals, led by Jagrup Brar. He was previously Minister of State for Trade before the most recent election. Both Michael Goehring, CEO of the Mining Association of British Columbia and Keerit Jutla, President of the Association of Mineral Exploration welcome the move. Only time will tell if the NDP government keeps their promise to speed up permitting while keeping environmental standards in place. (BC Government)

• 🇨🇦 The Canadian government announced $2.1m for the Qikiqtani Inuit Association (QIA) to purchase heavy equipment simulators dedicated to the Pond Inlet Research and Training Centre. This will allow Inuit Nunavummiut to receive training in their home territory. (Government of Canada)

• 🇨🇦 The Alberta government will invest up to $50m to support the creation of a first-in-Canada drilling test site to support technology development in the oil, gas, geothermal and lithium industries. This Alberta Drilling Accelerator already has interest from Eavor Technologies, Tourmaline Oil Corp. and Halliburton. (Government of Alberta)

• 🇦🇺 The Australian government introduced its production tax credit legislation on Monday which stems from its May budget. Critical minerals and hydrogen projects hoping to benefit from the government’s new tax credits will have to be in production by 2040 under a tweak to the arrangements. In the budget it was until 2041, so one year earlier. (The West Australian)

• 🇲🇱 We are happy to report that Resolute Mining’s CEO and executives have been released by Mali’s military junta. Unfortunately, they’ve now arrested 4 Malinese employees of Barrick Gold. We hope they are released soon. The junta certainly has a spring in their step from their “victory” with Resolute Mining so they’ve now turned their attention to Barrick and the on-going dispute between the two parties. (Barrons)

MINING MATTERS FROM AROUND THE WORLD 🌎

• 🇮🇳 U.S. prosecutors issued a warrant for India’s second richest person, Gautum Adani. The man is already worth $69.8bn, but that didn’t stop him from allegedly offering bribes to Indian officials worth $265m. In return, he secured contracts that will turn a profit of $2bn over the next 20 years. Further, he used those contracts to raise money in the United States. Well, big mistake if the allegations are true. Unfortunately, U.S. law bars foreign companies which raise money from U.S. investors from paying bribes overseas to win business. It is also against U.S. law to raise money from investors on the basis of false statements. Needless to say, anything with Adani in it on the markets took a major tumble after the news. Often where there is smoke, there is fire, so we will keep an eye on this one. (Reuters)

• 🇸🇦 Another Indian billionaire, Anil Agarwal, and the company he controls, Vedanta, will spend $2bn to build a copper smelter in Saudi Arabia. The facility will be able to produce 400,000 metric tons per year. Vedanta also plans to set up a facility to produce as much as 300,000 tons per year of copper rods. A big win for the kingdom which has been pushing hard to diversify into minerals and metals. (Financial Post)

• 🇧🇴 Bolivia announced that it has signed a $1bn deal with China's CBC Investments to build two lithium carbonate plants in the landlocked South American nation. The two plants, with a combined capacity of 35,000 mt/year, will be built at the Salar de Uyuni salt flats in the southern highland Potosí and will be 51% owned by Bolivian state lithium company YLB. (S&P Global)

• Anglo American (LON: AAL) has sold the rest of its coal assets to Peabody Energy (NYSE: BTU) for up to a cool US$3.775bn. The acquisition includes four metallurgical coal mines – Moranbah North, Grosvenor, Aquila, and Capcoal – located in Australia's Bowen Basin, which is widely recognized for the world's highest-quality steelmaking coal. Proceeds to Anglo American would also include $455m made possible by the acquisition of Dawson Mine by PT Bukit Makmur Mandiri Utama in a back-to-back transaction. Peabody Energy was down over 7% on the day while Anglo American was up slightly. (Anglo American) and (Peabody Energy)

• Newmont Corporation (NYSE: NEM) was busy with another sale in as many weeks as it agreed to sell its Éléonore operation in Northern Quebec, Canada, to Dhilmar Ltd for $795m in cash consideration. Never heard of Dhilmar? Well it is a newly incorporated, UK-based private mining company led by Alexander Ramlie, President, Director and CEO of PT Amman Mineral Internasional Tbk. The planned divesture of 6 assets was announced back in February as part of the mining giants move away from non-core assets. (Newmont Corporation)

• Congratulations to mining technology company Hexagon which has agreed to purchase indurad, a global leader in radar and Real-Time Location Systems (RTLS) technologies, along with its autonomous haulage subsidiary, xtonomy. Based in Germany, indurad specializes in modular radar systems that deliver precise object location tracking, collision avoidance, and machine automation capabilities. The company has 140 employees and sales of roughly 19m EUR per year. (Hexagon)

• 🇷🇺 Russia's Alrosa, the world's largest producer of rough diamonds by volume, is grappling with a very difficult market and on-going sanctions. The CEO of the company said that the miner would look to cut labor costs by 10% in 2025 and may take additional measures depending on market conditions. The company employs roughly 35,000 people in Russia. (Reuters)

• Endeavour Silver Corp. (TSX: EDR) announced a US$73m bought deal financing led by BMO Capital Markets. The principal objectives for use of the net proceeds of the offering are for general working capital and the advancement of the Pitarrilla Project in Northern Mexico. The miner is down over 7% since the news, but most silver miners are down 3-4% in the same period. (Endeavour Silver)

• 🇨🇦 An Ontario Cree First Nation, the Taykwa Tagamou Nation, has filed a statement of claim against the Province of Ontario and Newmont Corporation, who operates its Pamour Mine near Timmins. The nation says that Newmont did not consult them on reopening the Pamour mine while Newmont says they did consult and are committed to meaningful engagement. It looks like the nation is looking for an improved deal. (CTV News)

• 🇨🇦 Over in British Columbia, the Tsetsaut Skii km Lax Ha Nation says that Seabridge Gold’s KSM Mine would feature a tailing pond with toxic materials and has applied to the B.C. Supreme Court for a judicial review of the province's decision to issue a "substantial start determination." In court documents the nation says the government failed to consult, while Seabridge Gold says the nation turned down repeated invitations to participate in the review process. Further, the company has substantive agreements with the Tahltan and Nisga'a nations who are supportive of the project and are recognized by the government as the traditional land holders. (CBC)

MINING BITS

• 🇨🇱 Marco Mendez, a professor at the University of Chile who studies evolutionary biology, discusses the amazing ‘Karachi’ fish who survive in the Ascotan salt flat against all odds. With high concentrations of heavy metals, variable salinity, hot to freezing temperatures and a host of other factors, these fish have adapted quite quickly to this unique environment. Now locals and researchers are worried that a proposed lithium project on the salt flat may impact this unique fish forever. Very interesting read —> (Reuters)

• 🇺🇸 Well this one isn’t related to mining, but we wanted to give a shoutout to The Minnesota Department of Natural Resources’ new Nongame Wildlife EagleCam which is giving viewers a unique chance to watch a pair of nesting bald eagles. If this doesn’t warm your heart, we don’t know what will. (AP News)

• 🌏 According to Ben Gibson, head of advisory for auction house Pickles, used mining equipment prices are falling due to oversupply coupled with falling demand. Auctions were selling 90-95% of their inventory during COVID, but now struggle to get to 60-70%. Add in electrification and automation initiatives and a lot of outdated machinery has lost even its replacement parts appeal. Great read for anyone in the mining equipment industry. (Mining.com.au)

• 🇦🇺 The MinRes story keeps getting worse and worse. We aren’t going to rewrite some of the things that Founder Chris Ellison has allegedly said to female employees, but if true, the company needs an entire culture cleanse. If you are a shareholder, definitely give this one a read. (Financial Review)

• 🇦🇺 A review by Rio Tinto found that rape, sexual assault and bullying persist in their mines. The report found eight people reported experiencing actual or attempted sexual assault or rape, compared to five people in 2021. Thirty-two people reported experiencing pressure or requests for sex or sexual acts, compared to 37 people in 2021. Shane Roulstone of Western Mine Workers' Alliance said that things at the Tier 1 miners have definitely improved but there is still a long way to go. Two thumbs up to Rio Tinto for shining a light on this and trying to tackle this problem head on. Two thumbs down/or middle fingers up to the actual abusers. Can we say that? I think we can. (Reuters)

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