Peruvian miners face potential tax hikes

The Peruvian Government is seeking to obtain powers to raise an additional $3bn in taxes, of which $750m would be obtained from the mining sector.

According to economy deputy minister Alex Contreras, the tax “would be a significant increase for structural income in the country, which is the one with the lowest collection compared to the rest of the region. We collect less than half of an OECD country.”

The proposed tax rise was first mentioned by Peru’s Finance Minister Pedro Francke, who said on Sunday that the government wants to increase mining taxes by 3-4%, citing a study from the International Monetary Fund, which gave room to hike levies.

Since leftist Prime Minster Pedro Castillo came into office in July, the government has been at loggerheads with the mining industry. There have been extensive protests throughout the country, especially within rural areas where miners operate, with mining firms complaining that the government has done little to try and resolve the blockades that have impacted the supply line.

Peru’s mining chamber has criticised the proposed tax hikes, saying it would put more than $50bn in future investments at risk in the world’s second-largest copper producer. The National Society of Mining, Oil and Energy said Francke’s proposal would “irreparably” damage competitiveness in Peru’s sector mining, the engine of the country’s economy.

Rio Tinto agrees to write off loan to Mongolian Government

Rio Tinto has agreed to write off a $2.3bn loan it provided to the Mongolian Government to cover its share of the construction and development costs of the Oyu Tolgoi copper mine.

The write-off was announced by Mongolian Prime Minister Oyun-Erdene Luvsannamsrai on Monday. The prime minister stated that his office had received a letter from Rio Tinto agreeing to write off the debt, conduct an independent audit into the financing of the project’s expansion, and improve overall governance on the project.

In addition to the debt write-off, Rio has offered to terminate the underground development plan and make an additional investment. This is expected to allow the next phase of the mine’s development to begin in January. The agreement also means that Erdenes Oyu Tolgoi, the state-owned company that holds the government’s equity in the project, won’t incur additional debt after the mine is put into operation in the first half of 2023.

The Oyu Tolgoi gold and copper project is situated in the south Gobi region of Mongolia. It is one of the world’s biggest gold and copper mines, with the potential to produce more than 500,000 tonnes per annum by 2027.

However, the development of the Oyu Tolgoi mine has been beset by a myriad of issues and delays. The Mongolian Government has been pushing for better terms on the project after spiralling costs, with the investment needed for the underground expansion effort increasing from $1.3bn to $1.8bn from Rio Tinto’s original development capital.

Ivanhoe secures $300m in streaming financing for Platreef project

Canadian miner Ivanhoe’s subsidiary Ivanplats has concluded stream-financing agreements worth $300m to support the development of the Platreef project in South Africa. According to a company statement, Ivanplats signed the agreements with Orion Mine Finance and Nomad Royalty Company for a $200m gold-streaming facility and a $100m palladium and platinum-streaming facility.

Expected to commence production in 2024, the Platreef Project is a platinum-group-metals and base metals underground mine in Limpopo, South Africa, around 280km north-east of Johannesburg. The resources will include palladium, rhodium, platinum, nickel, copper and gold.

Ivanplats will use the new proceeds to move ahead with the first phase of the project’s mine development. A definitive feasibility study for Platreef’s phased development plan is expected to be released in the first quarter of next year.

The total production is expected to amount to more than 40,000tpa, however, the proposed offtake arrangements are subject to further negotiation and signing of definitive documentation for a concentrate sales agreement.

Ivanhoe Mines president Marna Cloete said: “The stream financing agreements, which represent a small fraction of Platreef’s incredible resource base and accompanying offtake arrangements are critical milestones in the progression to commercial production for Ivanplats."

Nickel Mines signs $525m deal to acquire 70% stake in Indonesian project

Australia’s Nickel Mines has signed a binding definitive agreement with its partner Shanghai Decent Investment to acquire a 70% equity interest in the Oracle nickel project in Indonesia. The $525m deal follows a memorandum of understanding signed last month.

The project will feature four rotary kiln electric furnace (RKEF) lines and ancillary facilities within the Indonesia Morowali Industrial Park in Central Sulawesi.

The RKEF lines will have a nameplate production capacity of 36,000tpa of equivalent contained nickel in nickel pig iron. Separately, the project will build a 380MW captive power plant to support RKEF operations, and Shanghai Decent will lead the design and construction of Oracle Nickel.

The four Oracle RKEF lines are expected to commence operations no later than 19 February 2023 while the power plant will be commissioned no later than 19 July 2023. According to Nickel Mines, the overall construction costs for the project, including the power plant, will not exceed $750m. 

Nickel Mines managing director Justin Werner said: “With our commitment to the Oracle nickel project coming rapidly on the heels of the fast-tracked commissioning of our 80%-owned Angel nickel project, Nickel Mines is set to more than triple the size of its attributable nickel production and operational cash flows over the next 15 months.”

Barrick’s Bulyanhulu to acquire six prospective licences in Tanzania

Barrick subsidiary Bulyanhulu Gold Mine is set to acquire six prospecting licences located in areas adjacent to the namesake Bulyanhulu mine in Tanzania. The move was announced by Twiga Minerals, a joint venture between Barrick and the Government of Tanzania.

According to a statement, Bulyanhulu signed a binding agreement to purchase a 100% stake in the six licences from Tembo Gold subsidiary Mineral Industry Promotion and Consulting Company Limited. Bulyanhulu will pay a $6m consideration, along with other contingent payments up to an aggregate amount of $45m. These contingent payments will depend on the inferred, indicated and measured gold mineral resources identified in the licence areas.

Bulyanhulu will also invest at least $9m in the overall licence area in four years from the closing of the transaction.

The Barrick subsidiary has also agreed to subscribe for more than 5.5 million Tembo common shares of Tembo at a price of C$0.27 per share. This will provide Bulyanhulu with a 5.5% pro forma ownership in Tembo.

Tembo president and CEO David Scott said: “We do not underestimate the significance of Barrick’s interest and the conclusion of this purchase agreement that will enable a serious advance of our exploration strategy, and our expectation and hope is that a number of significant new discoveries will be made, benefitting both the companies that are making the investment, the surrounding communities and this mining-friendly country of Tanzania.”

Thousands protest in Serbia against proposed lithium mine

Thousands of people across Serbia have protested this weekend against two proposed laws that campaigners argue will permit foreign companies to take advantage of local mineral resources.

In the capital, Belgrade, protesters set up roadblocks on a major highway and bridge that links the city centre to the suburbs. Thousands gathered on the main bridge chanting, “Rio Tinto go away from the Drina River”. The protests were primarily in objection to Rio Tinto’s Jadar lithium project, and Zijin Mining’s recently-opened  Čukaru Peki copper and gold mine, which they claim will pollute land and water in the Balkan nation.

According to a special plan published by the Serbian Government, the zone at risk of subsidence will be spread across 850 hectares, the size of more than 1,000 football pitches.

The excavation process will entail a significant environmental toll, generating 57 million tonnes of waste over the mine’s life. As a result, the mine will involve the relocation of 81 households, voluntary or otherwise, and the purchase of 293 landowners’ fields.

In July, Rio Tinto announced a $2.4bn investment in the project in the Jadar Valley, with the view that it would become Europe’s biggest lithium mine and one of the world’s largest on a greenfield site. Rio Tinto have estimated that over its 40-year life, the mine will produce 2.3 million tonnes of battery-grade lithium carbonate and 160,000 tonnes of boric acid annually.

“Such mines are mostly opened in deserts precisely because of the detrimental effect on the environment and biodiversity,” said Professor Dragana Đorđević, head of environmental chemistry and engineering at the University of Belgrade.