October 16th, 2024 - The Mine Wire

METALS MARKET

Base metals faced a selloff as China’s stimulus package failed to boost confidence. Many had expected a much larger shot in the arm to get things going. Copper, Nickel and Zinc all suffered while Iron Ore retreated from its large gains the week before.

China did import a record amount of Coal in September as prices fell as low as $136.46 per metric ton on Sept. 23. Customs data showed that 47.59 million metric tons were imported, a 13% increase from a year prior.

^{**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 Democratic Republic of Congo’s Mines Minister Kizito Pakabomba said the country is looking to attract new investors and diversify away from China’s dominance of its cobalt industry. Part of the country’s strategy is to work with the United Arab Emirates as well as building a railway to the Atlantic ocean so it can more easily access North American & European markets. The Minister said that the country will make “strategic choices” about who it wants running its mines. Earlier this year the state blocked the proposed sale of Trafigura Group-backed copper and cobalt miner Chemaf Resources Ltd. to China’s Norin Mining Ltd. Frustrated with falling cobalt prices, the African nation clearly wants more control over its resources and production. Given that they are the global leader by a country mile for cobalt, it makes a lot of sense for them to want to control the pricing of this domestic resource. (BNN Bloomberg) or (Mining.com)

• 🇿🇲 Zambia’s Mines Minister Paul Kabuswe said that the government will keep ownership of some mining licenses that look to be promising. The country is currently funding an aerial geophysical survey to sniff out the best areas. The Minister hinted at one scenario where the government would partner with industry and keep 45% of the joint venture. When asked about Zambia’s financial contribution, he suggested that the nation has already contributed through paying for the mapping. While we suspect that won’t fly, the mapping will most certainly put the country in a better negotiating position. (BNN Bloomberg) or (Mining Business Africa)

• 🇰🇪 Kenya is the latest African nation to say it will ban the export of some valuable minerals once the construction of its processing plants is completed. The country has signed agreements to have both a gold processing plant and a granite processing plant built. Once these are complete, exports of raw gold will be banned as the country looks to process gold, gemstones and granite domestically. (Business Daily Africa)

• 🇺🇦 Ukraine has auctioned off state-owned miner UMCC-Titanium for 3.94bn hryvnia ($95.6m USD). Cemin Ukraine, a Neqsol Holding unit, was the only participant in the auction. Neqsol Holding is an international group of companies founded by Azeri businessman Nasib Hasanov. Ukraine confirmed that more state assets will be on the for sale block as the country continues its fight against Russia. (The KYIV Independent)

• 🇨🇦 The Canadian government announced $5.1m for 16 projects related to critical minerals across two programs: the Critical Minerals Geoscience Data Initiative and the Global Partnerships Initiative. That means all of the money is going to Geological Surveys/governments across Canada as well as the International Energy Association. The announcement coincided with the OECD’s conference in Sudbury. We would have liked to see a bigger splash of cash particularly given the spending done by other foreign governments but are glad to see these initiatives supported. (Government of Canada)

• 🇺🇸 The U.S. Department of Energy (DOE) awarded contracts to six companies to spur the buildout of a U.S. supply chain for fuels for advanced nuclear reactors. Many advanced reactors will require high-assay low-enriched uranium (HALEU) to achieve smaller designs, longer operating cycles, and increased efficiencies over current technologies. These contracts will allow selected companies to bid on work for deconversion services, a critical component of the HALEU supply chain. The six companies are: BWXT, Centrus, Framatome, GE Vernova, Orano and Westinghouse. (U.S. Department of Energy)

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GLOBAL INVESTOR COMMISSION ON MINING 2030 - REPORT

The Global Investor Commission on Mining 2030 is a collaborative investor-led initiative seeking to define a vision for a socially and environmentally responsible mining sector overall by 2030, and to develop a consensus about the role of finance in realizing this vision.

82 financial institutions representing USD $15 trillion in assets under management or advisement have formally pledged support to the Global Investor Commission on Mining 2030. These investors include Allianz Investment Management, Brunel Pension Partnership, the Church of England Pensions Board, LGIM, Orion Resource Partners, Scottish Widows, Swedish National Pension Funds (AP1-4) Ninety-One and Royal London Asset Management. That’s a lot of cheddar cheese!

For context The Canadian Pension Plan has $646.8bn CAD under management while Saudi Arabia’s Public Investment Fund has about $925bn USD. Even the #1 behemoth, Norway’s Norges Bank Investment Management, has only a mere $1.64tn under management. How do we apply for Norwegian citizenship?

Anyways, on October 8th, the Commission identified six foundational priorities for investors seeking to support an environmentally and socially responsible mining sector that can meet global demand for minerals and the goals of the Paris Agreement:

• Align investor expectations of companies with global and mining industry standards.

• Ensure demand-side companies align with these expectations and work towards circularity and traceability.

• Encourage regulation to reinforce investor expectations.

• Deliver fair, equitable and sustained benefits locally and nationally.

• Identify and reduce mining-related conflict and its drivers.

• Address historic legacies and create positive legacies for current operations.

The Commission will now begin consulting stakeholders on the development of practical implementation plans before publishing its final recommendations for investors in mid-2025. More information as well as contacts can be found at this link —> (Mining 2030)

MINING MATTERS FROM AROUND THE WORLD 🌎

• State-owned CHN Energy Investment Group has started construction on its 170bn yuan ($23.29 bn USD) Hami Integrated Innovative Energy Base Project. Once operational, the project will produce 4 million tons of coal-to-liquid (CTL) products annually, including 3.2mn tons from direct liquefaction and 800,000 tons from indirect liquefaction. The project is expected to help China reduce its dependence on imported oil while creating 5,500 direct jobs. (China Daily) or (BNN Bloomberg)

• GreenX Metals Ltd. (ASX: GRX) was awarded £252m (329.4m USD) due to a successful arbitration against the government of Poland. GreenX served Poland with a notice of arbitration in September 2020, claiming that actions by Poland had blocked the development of the Jan Karski and Debiensko mines in the country and that this deprived the company of the entire value of its Polish investments. The stock is up over 25% since the news. (Morningstar)

• A high court in London has ruled that Sibanye-Stillwater (JSE: SSW) is liable for damages following the termination of a $1.2-billion agreement with investment adviser Appian Capital regarding two nickel mines in Brazil. The case will enter a second phase with a trial scheduled for November 2025 to determine damages. Sibanye-Stillwater’s stock is down 11.5% since the news broke. (Mining Weekly)

• Philippines coal producer Semirara Mining and Power is planning to invest approximately $5.07bn (291.4bn pesos) to expand its mining operations. This will allow the company to operate both of its current coal pits (Molave and Narra) while opening its new Acacia pit. The country is still highly dependent on coal for power but also exports it to China, South Korea and Brunei. (Mining Technology)

• Uzbekistan’s gold mining giant Navoi Mining & Metallurgical Combine (NMMC) has issued its debut $1bn Eurobond. The bond consists of a dual-tranche offering: $500m in 4-year notes with a 6.70% yield and another $500m in 7-year notes at 6.95%. The money raised will go towards the company’s growth projects and it has been reported that this could be the first step towards an eventual IPO. (Intellinews)

• Japan’s Mitsui & Co plans to re-enter global precious metals trading to hedge client risk after a nine-year absence according to Reuters. It is expected to return to the market via Mitsui's subsidiary, Mitsui Bussan Commodities Ltd, from London, and they are apparently looking for someone to Head their re-entry efforts. (Reuters)

• Metals Acquisition Ltd. (NYSE: MTAL, ASX: MAC) raised approximately $150m AUS ($103m USD) through an oversubscribed placement. The company said the proceeds, together with existing cash, will enable MAC to optimize its balance sheet and de-lever following the acquisition of the CSA Copper Mine from Glencore plc in mid-2023, while also providing additional flexibility to pursue strategic inorganic growth opportunities. (Metals Acquisition Ltd.)

• Congratulations to Founders Metals (CVE: FDR) which received a $12.1m investment from B2Gold (TSE: BTO). B2Gold will own 5.0% of the Company's issued and outstanding common shares on a non-diluted basis. Founders Metals stock is up almost 15% since the news. (Newsfile)

• NexGold Mining Corp. (TSXV: NEXG) and Signal Gold Inc. (TSX: SGNL) will combine forces to develop both of their gold projects in Northern Ontario & Nova Scotia. Each SGNL share will be exchanged for 0.1244 of a NEXG Share. Upon completion of the Transaction, existing NexGold and Signal shareholders will own approximately 71% and 29% of NexGold. (GlobalNewswire)

MINING BITS

• 🇺🇸 The Federal Bureau of Investigations (FBI), the Securities and Exchange Commission (SEC), and the U.S. Department of Justice (DOJ) through Operation Token Mirrors, were able to arrest 18 individuals related to fraud and manipulation in cryptocurrency markets. They created sham companies, made false statements about the tokens, created “wash trades” to artificially boost token prices and bring in outside interest, while selling near the top in a classic pump and dump. One of their companies, Saitama, even reached a multi-billion dollar valuation at one point. American’s lost $5.6bn to crypto fraud schemes in 2023, which was up 45% from the year before. If only they had invested in gold, silver, copper, uranium or a bunch of other miner stocks! (KITCO)

• 🌏 Speaking of gold, do you know which countries have purchased the most gold over the past decade? U.S. Global Investors shows that since 2009, central banks have been net buyers of the precious metal. The top 10 countries by metric tons purchased are: Russia (1,230.6), China (1,210.2), Turkey (475.6), Poland (295), India (291.4), Kazakhstan (132.6), Uzbekistan (126.3), Singapore (101.5), Qatar (96.3) and Hungary (91.4). (U.S. Global Investors)

• 💡 What’s in a mineral name? Not very many women, a University of Michigan study finds. Researchers went through nearly 6,000 mineral names and found that while 50.7% of all minerals are named after men, just 2.8% of all minerals are named after women. Famous men like Michael Scott who co-founded the technology company Apple, billionaire George Soros, Franklin Delano Roosevelt and Leif Erickson all have minerals named after them. Further, despite a larger number of women working as scientists, only about 10% of new minerals named after people are women. Interestingly, Russians comprise 15% of all minerals named after people, but are responsible for nearly half—43%—of minerals named for women. The United States ranks second, but Russia has nearly three times the number of women with minerals named for them, 72, compared to the U.S. At the current rate, gender parity won’t happen until 2266 and would take another 44,000 mineral discoveries to happen, something that isn’t likely. (University of Michigan)

• 💲 British VC Founders Factory has launched the Mining Tech Accelerator in partnership with Rio Tinto which contributed 14.4m AUS over three years to support pre-seed and seed-stage startups. Congratulations to the first cohort of six companies to receive funding which include Endolith, ProSpectural, BluumBio, SunChem, Vycarb and Magmatic. The accelerator is investing based on the following themes: Mining Exploration, Mining Productivity, Mining Safety, Mining Decarbonization, Nature & Biodiversity, and Water. Apply here → (Founders Factory)

• 🇵🇬 PBS NewsHour covered Deep Sea Mining in Papua New Guinea on its show on October 8th. Currently, Papua New Guinea is the only country to allow deep sea mining. In the first part they go on board with Magellan to witness the deep sea mining operations. In the second part they speak to villagers who are concerned about ecosystems, fishing and their way of life. Finally, the third part looks at regulations, the failure of Nautilus Minerals, a lack of transparency within the Papua New Guinea government as well as its ineptitude and finally, the shady practices by key investors of the current operations. Definitely not a great look for anyone involved! (PBS NewsHour)

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