October 30th, 2024 - The Mine Wire

METALS MARKET

The biggest loser of the week was WTI Crude as prices per barrel slipped under the $70 mark. Israel responded to Iran’s attack but hit military targets instead of oil and gas infrastructure which many were concerned about. Since geopolitical tensions were baked into the price, the perceived cooling of temperatures has pushed prices down. Time will tell if it lasts.

The biggest winner for a second week in a row was Palladium which was up another 12.57% this past week. The U.S. government is pushing G7 countries to expand sanctions against Russia on Palladium & Titanium. Russia's MMC Norilsk Nickel, the world’s largest palladium producer, accounts for roughly 40% of global supply.

In other market news, it looks like Potash production has returned to levels seen before Russia’s invasion of Ukraine. Russia and Belarus have been stepping up their own potash production (roughly 23m metric tons of the world’s 73m metric tons) and side-stepping Western sanctions with deliveries to Asia and South America. Prices have dropped below $300 a ton from a mid-2022 peak of $1,000, on weak demand causing some producers to suspend plans to increase production. (Reuters)

^{**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:

• 🇺🇸 The U.S. Department of the Treasury and the IRS released final rules for the Advanced Manufacturing Production Credit (Section 45X of the Internal Revenue Code), to spur continued growth of U.S. clean energy manufacturing as part of the Investing in America Agenda. The proposed rules would have given the 10% production credit to processors and manufacturers but did not include miners. After much advocacy, it seems miners have achieved a partial win. Those who can mine and process in America will receive the credit, but those who don’t, won’t - for example, there are currently no nickel smelters in America, so those operations would not count. The National Mining Association’s CEO, Rich Nolan, said "Treasury's decision to limit the credit to those producers who also refine materials will prevent many important projects from benefiting from the credit as Congress intended." (U.S. Department of the Treasury) & (Reuters)

• 🇺🇸 The U.S. Department of the Interior and the Office of Surface Mining Reclamation and Enforcement (OSMRE) announced more than $244m in fiscal year 2024 funding to address dangerous and polluting abandoned mine lands, create good-paying, family-sustaining jobs and catalyze economic opportunity in coal communities across Pennsylvania. With a Presidential election just a week away, we aren’t surprised to see such an announcement for an important battleground state. (U.S. OSMRE)

• 🇺🇸 The U.S. Department of the Interior announced that it was approving Ioneer’s (ASX: INR) Rhyolite Ridge lithium mine in Nevada. The project was under a lot of scrutiny and media attention given the presence of Tiehm's buckwheat which is endangered and only grows in the area. The stock is up over 14% since the news broke. (U.S. Department of the Interior)

• 🇲🇱 Mali’s military government has threatened to take back Barrick Gold Corporation’s Loulo mine concession when the current permit expires in 2026. The junta declined a favorable 55%/45% split on the economic benefits from the mine and instead has a significant list of demands if Barrick wants to keep operating it. The mine accounted for 13% of Barrick’s gold production in 2023. Neither side provided comments on the matter. (BNN Bloomberg) or (Mining.com)

• 🇲🇱 The Malian government has closed a deal to take over the Yatela mine from AngloGold Ashanti and IAMGOLD Corporation. The mine ceased operations in 2016 when gold prices plunged. The two companies sold the mine to the government for a symbolic franc and will pay another $36m for the closure and rehabilitation of the mine as well as $4.1m to be paid to the treasury. (Barrons)

• 🇧🇼 Botswana heads to the polls today to elect a new President. The diamond-rich nation has fallen on tougher economic times as the diamond market has seen a significant downturn. While people enjoy free healthcare and education, some feel that corruption has increased. In the President’s case, he negotiated a new deal with De Beers to give the country a greater share of rough diamonds but Wednesday will tell whether he is given a second term to lead. (Reuters)

• 🇷🇺 Russia is in talks with other BRICS members about creating an international precious metals exchange to rival western exchanges like the LME. It would also help countries like Russia and Iran continue trade without interruption when hit with sanctions from the west. The BRICS include Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. (Reuters)

• 🇬🇧 Look out for the United Kingdom’s budget release today. According to sources, importers of lithium, graphite and cobalt for use in manufacturing in the UK will be granted access to UK Export Finance. It would benefit companies like Rolls-Royce Holdings and Tata Motors Ltd. (BNN Bloomberg)

• 🇨🇦 Premier Scott Moe & The Saskatchewan Party managed to win the provincial election in Saskatchewan giving them another 4 years to govern. The New Democratic Party made it a lot closer than they would have liked and will give the incumbents something to think about as they move forward. Certainly, those in the potash, uranium and critical minerals sector must be pleased as the ruling party has been pro-mining. (CBC)

MINING MATTERS FROM AROUND THE WORLD 🌎

• Asteroid miner hopeful, AstroForge, became the first company to receive a license from the Federal Communications Commission (FCC) to operate a commercial mission in deep space. Communication is critical to any mission and per the Commission's part 5 experimental licensing, this authorization gives AstroForge both approval for the flight and the green light to establish communication networks with their ground partners that will enable near real-time data transmission and operational oversight as their Odin spacecraft travels deep into the solar system. Congrats guys! (AstroForge)

• Rio Tinto and Fleet Space Technologies will collaborate to advance Rio Tinto’s Rincon Lithium Project in Argentina. The project will leverage Fleet Space’s end-to-end exploration solution powered by space and AI. We can’t think of two more bullish terms these days. It is no surprise “Space” is a topic at IMARC this year. (Fleet Space Technologies)

• Eramet bought out its Chinese partner Tsingshan in a lithium project in Argentina that is about to start production. The French miner spent $699m to purchase Tsingshan's 49.9% stake. The two companies will continue their partnership in Indonesia where they operate a nickel mine. (Reuters)

• Vale and Jinnan Steel & Iron Group announced a joint partnership to establish an iron ore concentration plant in Oman. The Sohar Concentration Plant, scheduled to commence operations by mid-2027, will process 18m tons of low-grade iron ore annually, producing 12.6m tons of high-grade concentrate. Vale will invest US$227m to connect the plant to its agglomerate facilities in the region. Jinnan will invest approximately US$400m to build, own and operate the plant. (Vale)

• Vale was also in the news this week, along with BHP, as they came to an agreement with the Brazil government for an additional $23bn to settle the damages from the 2015 Mariana dam disaster. It brings the total compensation to roughly $30bn. However, the London High Court is currently hearing a case from some 2000 businesses, 46 municipalities and 65 faith-based organizations who say the total claim is around $36bn. (Financial Times)

• Aura Minerals will acquire (TSX: ORA) will acquire Bluestone Resources (TSXV: BSR) for US$74.3m. (Global Newswire)

• Congratulations to ATEX Resources (CVE: ATX) which secured a US$40m investment from mining giant Agnico Eagle Mines. Proceeds will be allocated towards the Company's exploration activities at the Valeriano Copper-Gold Project in Chile and for general corporate purposes. The stock is up 14.7% since the news broke. (Newsfile)

• Some champagne popping is also in order for McEwen Copper which secured a US$35m investment from Nuton, Rio Tinto’s venture arm for copper. Two other investors grabbed a total of US$2m in this round, bringing the total raised to US$56m. McEwen Copper previously announced a non-brokered placement of up to US$70m. They mention that qualified investors can still get in subject to a US$1m investment and certain other conditions. We are a little short to participate unfortunately. (Globe Newswire)

• Epiroc (STO: EPI-A) reported Q3 earnings this past week. Revenues increased 5% year-over-year to SEK15.7bn, powered by stronger demand in mining. However, EBIT only increased slightly due to a number of factors which included stronger equipment sales, but not an increase in its traditional service business. It was also dealing with dilution from the acquisition of Stanley Infrastructure. The stock is up around 4% since earnings were reported. (Cision)

• Newmont Corporation (TSX: NGT, NYSE: NEM, ASX: NEM ) reported Q3 earnings. The miner saw a huge 9.1% drop on the day as investors became concerned about rising mining costs and an inability to capitalize on rising gold prices. The stock is down 16.50% since earnings. (Newmont Corp)

• Teck Resources (TSX: TECK.B) reported a beat on Q3 profit estimates due to higher production at its Quebrada Blanca mine in Chile. However, it also cut its full year copper production forecast due to labour issues and mining delays at its Highland Valley Copper mine in Canada. The stock was down over 5% on the day but has since recovered about half its ground. (Teck Resources)
  

• Anglo American (LON: AAL) reported that copper production was down 13% in the quarter and diamond production was down 25%. However, it did mention that its steelmaking coal sale process continues to see significant competition, with a final round of bidders in place, and they expect to announce execution of a sale agreement in the coming months. The mining giant did not change its production forecast for the year. The stock is up over 4% since earnings. (Anglo American)

• Vale SA (BVMF: VALE3) reported an earnings beat for Q3 with a $2.41bn net profit on $9.55bn in revenue. Analysts had expected profits to come in around $1.65bn. The company said it booked an additional $956m provision related to the dam disaster payout. The stock is up over 4% since earnings. (Vale) & (Reuters)

• Last but not least, Grupo Mexico (BMV: GMEXICOB) reported earnings last week which saw a 17.55% increase in its net profit for the quarter. Despite this, net profit still came in under analyst expectations at $820.1m. There was an expectation for this to be about $115m higher. The company is one of the world’s largest copper producers and is benefiting from the metals rise. However, the stock is down over 5% since earnings. It is still up 40% year-on-year. (Grupo Mexico) or (Reuters)

MINING BITS

• 🏦 Bank of America achieved the top spot in Q1 - Q3 in terms of mergers and acquisitions in the metals and mining sector when it comes to money volume. Bank of America lead the way with $10.157 bn followed by BMO Capital Markets at $9.805 bn. All of the top 3 saw their volume compared to a year ago down between -48.3% and -71.3%. We can’t imagine that is great for the bonuses. Moelis & Company in 4th place saw a 225.2% increase to $5.158bn while National Bank of Canada saw a 217.3% increase to $3.932 bn.

• 🏦 RBC Capital Markets achieved the top spot in Q1 - Q3 for total deals done with 8. BMO Capital Markets & Macquarie were tied for 2nd spot with 7 deals done. In the same term in 2023, RBC Capital Markets did only 1 deal for 16m. Their 8 deals this year had a volume of $3.372bn. Nice improvement. (Mining Technology)

• 💨 Australia’s national science agency CSIRO takes a look at ventilation air methane (VAM) which is a byproduct of underground coal mining. Roughly 60% of emissions from coal mining come from VAM and it accounts for 15% of Australia’s methane emissions. With funding from the Australian governments, researchers have developed technology called Catalytic VAMMIT to destroy the methane before it leaves the underground. They are now in discussions with potential commercialization partners to bring the technology into full development. Worth a read. (CSIRO)

• 🇦🇴 We enjoyed this article that takes a look at the Belgian non-profit APOPO’s HeroRATS that are trained to sniff out landmines. There are roughly 110 African giant pouched rats working in Angola and they are about 192x more efficient than humans with metal detectors and their light weight means they won’t set off mines. Pretty amazing work. (El Pais) & (APOPO)

• 🇨🇦 Congratulations to Sudbury’s NORCAT which received $225,000 from the Canadian Federal government to expand battery-electric vehicle (BEV) training for mine workers. (Sudbury.com)

• 🇨🇦 Cool job alert! - The Government of Nunavut is hiring a Community Mining Advisor. The person will help organize and maintain an effective and professionally run regional geoscience office that provides support to the public, prospectors, the mining and mineral exploration industries, and to community organizations. Experience working in government, or the mining and minerals industry is an asset. Check out the posting here —> (Nunavut Government)

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