September 18th, 2024 - The Mine Wire

METALS MARKET

WTI Crude bounced back some this week as the commodity was likely oversold. Silver, Zinc and Palladium all had strong weeks. The Year-on-Year winners at the moment are Gold (+33.09%), Silver (+32.29%), Uranium (+21.37%) and a host of rare metals that are up even more like Gallium, Geranium and Indium to name but a few.

The biggest losers Year-on-Year are Lithium (-60.92%), Cobalt (-27.29%), Iron Ore (-24.76%) and Nickel (-17.74%). This will come as no surprise to anyone following the mining sector.

Later today, the United States Federal Reserve will drop its interest rate decision. Markets are pricing in roughly 250 basis points of easing by the end of 2025, but views are mixed on whether a rate cut of 0.25% of 0.50% is coming later today. Last week, the European Central Bank cut rates by 0.25% to 3.50% due to falling inflation and slower economic growth. In Canada, inflation data yesterday showed it hit the Central Bank’s 2% target in August, its lowest level since February 2021. The Canadian Central Bank has indicated that further rate reductions will be coming as it hopes for a “soft landing”. Meanwhile in Australia, economists are expecting up to four rate cuts in 2025 but a cut before then is seen as premature given higher inflation numbers.

^{**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 United Nations Secretary-General released his report, “Resourcing the Energy Transition.” This is a “how-to guide to help generate prosperity and equality alongside clean power," and outlines seven Guiding Principles and five Actionable Recommendations to embed equity and justice in the race to net-zero emissions. The 7 principles are:

  • Human rights must be at the core of all mineral value chains.

  • The integrity of the planet, its environment and biodiversity must be safeguarded.

  • Justice and equity must underpin mineral value chains.

  • Development must be fostered through benefit sharing, value addition and economic diversification.

  • Investments, finance and trade must be responsible and fair.

  • Transparency, accountability and anti-corruption measures are necessary to ensure good governance.

  • Multilateral and international cooperation must underpin global action and promote peace and security.

• 🇷🇺 One leader not singing Kumbaya this week is Vladimir Putin. The Russian President said that Moscow should consider limiting exports of uranium, titanium and nickel in retaliation for Western sanctions. Western uranium miners jumped on the news as did the price of nickel. An export ban on uranium would be particularly challenging for the United States which imports roughly 27% of its enriched uranium from Russia. (Reuters)

• 🇺🇸 With China already limiting exports, it wasn’t surprising to see the U.S. Government Accountability Office put out a blog this week titled, “Critical Materials Are In High Demand. What is DOD Doing to Secure the Supply Chain and Stockpile These Resources?” It is an interesting read of all the initiatives the Department of Defense is taking to secure and stockpile the minerals it needs. (U.S. Government Accountability Office)

• 🇺🇸 The United States will impose a 25 per cent tariff on Chinese critical minerals including indium, tantalum, chromium, cobalt and tungsten. These will go into effect on September 27th. The U.S. Trade Representative determined not to exclude any critical minerals from the proposed Section 301 tariffs which include the aluminum and steel tariffs covered previously. (Argus Media)

• 🇳🇿 In New Zealand, the government shared a draft critical minerals list for the country, the first of its kind. The government will use this list to design a strategy to ensure the nation has access to these critical minerals. The list includes 35 minerals and it is currently open for public consultation until October 10th, 2024. (New Zealand Government)

• 🇦🇺 The Australian government sealed a free trade deal with the United Arab Emirates (UAE). The deal was welcomed by industries who export to the middle east nation, while unions were critical given the UAE’s human rights record. In regards to the mining industry, the Australian government is hopeful that this will bring more investments into the critical minerals sector from the UAE’s sovereign wealth fund which manages roughly $1.5 trillion in assets. (ABC News)

• 🇦🇺 In Queensland, the Labor government passed the Coal Royalty Protection (Keep it in the Bank) Bill 2024, that enshrines royalty rates in legislation. So what is the point of this? Well it makes it more difficult for a future government to make changes because they will have to amend the legislation which takes a majority government, takes time and garners much media attention. The government touted that these royalties have delivered $9.4bn for Queenslanders since introduced 2 years ago. Fairly significant for a government that has around $82bn per year in budgeted revenues. (Queensland Government)

• 🇬🇧 In the United Kingdom, London’s High Court ruled that West Cumbria Mining’s proposed coal mine in Whitehaven, England was unlawful based on climate grounds. Britain dropped its defense when the labor party came to power recently, so this ruling isn’t entirely unexpected, but could have implications globally if others look to UK law. (CNN)

• 🇨🇦 In Canada, the Yukon Supreme Court has authorized an initial transaction that would allow the Selkirk First Nation to assume control of the abandoned Minto copper-gold mine and its assets. The mine was abandoned by Minto Metals in 2023 for financial reasons. The offer by the First Nation has been sealed by the courts, but if this progresses, this would be the first Indigenous owned mine in Canada. (CIM Magazine)

• 🇪🇺 European Commission President Ursula von der Leyen named a new team to lead the EU’s most powerful institution. The Commission is the executive branch of the EU and is tasked with proposing laws, developing policies, managing budgets and well you get the point. Key focus areas for the new President include regional security, competitiveness and growth. To see the proposed appointments for each country’s representative, check out this article —> (EuroNews)

• 🇨🇳 China's top legislative body has approved a proposal to raise the country's retirement age to fight both a shrinking workforce as well as increased costs for pensions as people age longer. Now if you are completely unaware like we were, you might think, oh no, how bad is it. Well according to Reuters, the retirement age will be raised for men to 63 years old from 60, while for women in white collar work it would be raised to 58 years from 55. For women in blue collar work it will be increased to 55 from 50. For reference, Australia’s retirement age is 67, New Zealand and Canada are 65, The UK and US are 66, with most of the EU nations between 65 and 67 and none below 60. (Reuters)

MINING MATTERS FROM AROUND THE WORLD 🌎

• We don’t know what the executive team over at Lucara Diamond Corp. (TSE: LUC) are eating for breakfast, but we’d sure like to find out. The company found their 2nd 1,000+ carat diamond in as many months from their mine in Botswana. The stock is up a whopping 50% the past month and 16.25% from a year ago. Pretty impressive considering the pressure the diamond industry has been under. (Lucara Diamond)

• Wheaton Precious Metals (TSX, NYSE, LSE: WPM) announced the launch of the inaugural Future of Mining Challenge, which will award US$1 million to a winning venture to advance their technology. The Future of Mining Challenge invites cleantech companies from around the world to submit and propose industry solutions. This year's challenge focuses on identifying eligible technologies with the potential to reduce greenhouse gas emissions across mining operations. In alignment with Wheaton's business model, the solutions should be applicable for base and/or precious metal mining. Applications open September 18th with the winner announced in March 2025 at PDAC. (Wheaton Precious Metals)

• The Chinese battery behemoth CATL is apparently mulling a possible suspension to its massive lepidolite mine in eastern China. Analysts at UBS said this would lead to about an 8% reduction of China's monthly lithium carbonate equivalent (LCE) production. The news sent many lithium miner stocks up on the day. (Reuters)

• Sibanye-Stillwater (JSE: SSW) announced that it will be laying off about 700 workers at its Montana mining operations as it contends with weakened palladium prices. The price of palladium was about $2,300 an ounce two years ago but has dipped below $1,000 an ounce over the past three months. The operations have lost more than $350m since the beginning of 2023 according to the company. Most of its operations will be paused while it works out efficiencies and likely waits for prices to improve. (ABC News)

• In South Africa, Seriti Resources plans to cut 1,241 jobs to contain costs due to lower prices and persistent rail bottlenecks. Coal prices have fallen from $450 per metric ton in 2022 to around $100 per ton today. The union representing the workers said it will fight the decision. (Reuters)

• B2Gold (TSX: BTO, NYSE: BTG) announced that it has agreed to terms with the State of Mali in connection with the ongoing operation and governance of the Fekola Complex, including the development of both the underground project at the Fekola Mine (owned 80% by B2Gold and 20% by the State of Mali) and Fekola Regional. The news sent the miner 16.5% higher this week. (B2Gold)

• Midnight Sun Mining Corp. (CVE: MMA) confirmed that its Kazhiba licence remains in good standing and the Zambian Ministry of Mines and Minerals Development has updated their public portal to reflect this. There were concerns at the end of August that the license was not being renewed due to a public notice, which turned out to be a mistake apparently. On September 12, 2024, the Company received a letter dated April 22, 2024, from the Ministry, advising the Company that the application for renewal has been deferred pending a site verification report to ascertain the exploration progress undertaken during the previous tenure. The company has 14 days to get this report to the Geological Survey Department of Zambia. Despite the seemingly good news, the stock is down 15% since the news release. (Newsfile)

• Private equity firm MBK Partners is targeting Korea Zinc in a hostile takeover attempt. The firm is working with Young Poong, Korea Zinc’s largest shareholder, and other related parties to become a majority shareholder. There currently is a power struggle between Young Poong and the current Chairman, Choi Yun Beom. Young Poong and its affiliates already control 33.1% of the company. With MBK Partners bid, they hope to control nearly 52% of the firm and oust the Chairman. Sounds like a movie plot to us! (The Chosun Daily)

• Pasofino Gold (CVE: VEIN) announced that it has entered into an exclusivity agreement with an arm's length potential purchaser who has proposed to acquire Pasofino for cash consideration of US$75 million (approx. C$101.75 million), representing a purchase price of US$0.66 (approx.C$0.907) per Pasofino Common Shares. The stock is up over 15% on the news but still trading C$0.75 - feeling lucky? (Junior Mining Network)

• Alcoa (NYSE: AA) will sell its 25.1% stake in its Ma’aden (TADAWUL: 1211)

  joint venture for $1.1 billion. The transaction includes approximately 86 million shares of Ma’aden and $150 million in cash and is expected to close in the first half of 2025. Alcoa said it would hold its Ma'aden shares for a minimum of three years. (Reuters)

MINING BITS

• 🇧🇹 It turns out that the tiny nation of Bhutan has been mining Bitcoins with renewable energy. In fact, the country holds 13,011 Bitcoin, currently valued at approximately $780.49 million. The country's Bitcoin mining activities are managed by Druk Holding & Investments, the government's investment arm. With an abundance of hydropower due to its geography, we are impressed to see this relatively poor country, take such a bold and innovative step. Bhutan is now holding the 4th most Bitcoins of any government. United States - 213,246, China - 190,000, United Kingdom - 61,000, Bhutan - 13,011, El Salvador - 5,800. (BTC Times)

• 🇵🇬 In sadder news, a series of shootouts between fighting rival tribes in Papua New Guinea killed at least 30 people, including 16 children as they fight over the Porgera gold mine. "This deteriorating situation has been caused by illegal miners and settlers who are using violence to terrorize local communities and victimize traditional landowners," said Papua New Guinea's police commissioner David Manning. "Put simply, if you raise a weapon in a public place or to threaten another person, you will be shot," he added. We hate to see this type of escalation and hope peace returns to the area soon. (BBC) or (Al Jazeera)

• 🇬🇱 A mysterious seismic event that shook the earth for 9 days back in September has been attributed to a 650 foot tsunami in Greenland. That would make the tsunami at its peak about twice as tall as the Statue of Liberty or 1 and 4/5’s as long/high as a football field. So what the heck happened? It turns out a 882 million cubic feet of rock and ice — a volume equivalent to 25 Empire State Buildings — fell into the fjord in the remote and uninhabited area in Eastern Greenland. (CBS News)

• 🇨🇦 Popular Mechanics takes a look at gold miners in the Yukon and all of the amazing fossilized discoveries they are responsible for. These include a fully mummified woolly mammoth, a 57,000-year-old wolf pup and a 30,000-year-old squirrel. Miners are turning over some 5,000 fossils per year to the Yukon government. It’s nice to see a positive story about gold mining in the Yukon. (Popular Mechanics)

• 💎 Wired takes a look at diamond making machines and notes that they start at around $200,000 per machine on Alibaba. Of course this machine is on the lower end and the operation isn’t as simple as throwing some mix into a machine. According to Wired, “You need a reliable source of high-quality graphite, metal catalysts like iron or cobalt, and precise temperature and pressure control systems. CVD machines require a steady supply of methane and hydrogen gases, as well as the ability to generate and control microwaves or hot filaments. Both methods need diamond seed crystals to start the growth process.” Of course, the process takes a lot of expertise, but the point is the quality continues to improve and there are a lot of future potential applications. (Wired)

• 🌏 The ASEAN Centre for Energy came out with its report, “Coal Mine Methane Emissions Largely Overlooked in ASEAN.” While we didn’t read the entire report, the authors argue that a number of challenges persist. “The lag behind coal mine methane abatement efforts can be attributed to several challenges, including, the lack of transparency and absence of a robust Monitoring, Reporting, and Verification (MRV) system for coal mine methane emissions, lack of knowledge on the types and availability of abatement technologies, limited financing, and the lack of awareness and political commitment.” (ASEAN Centre for Energy)

• 💡 The Elements Visual Capitalist came out with an infographic - “Visualizing the Rise in Global Coal Consumption.” It shows that coal use in Asia Pacific has skyrocketed relative to other regions. China alone consumed 53% of the world’s coal in 2023. Check it out —> (Elements Visual Capitalist)

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