25

May

2018

Western Australia to establish lithium strategy taskforce

The Western Australia (WA) Government is set to form a taskforce to cash in on the state’s lithium potential.

As part of the government’s efforts, the taskforce will oversee the development of a lithium and energy materials strategy to build on the region’s competitive edge. In the wake of rising global demand for eco-batteries and green tech, the government intends to unlock the potential of the region’s large deposits of lithium as well as other energy materials.

To be chaired by the WA Minister for Mines and Petroleum, the taskforce will consist of several government representatives.

WA Premier Mark McGowan said: “The availability of lithium and other energy materials in WA creates an once-in-a-lifetime opportunity for our state. My government is committed to the development of this industry to boost our economy and create long-term jobs for Western Australians.

“The taskforce will do the work, in consultation with industry, to ensure our state is front and centre in production of battery technologies, and will also work to make sure these materials can be processed here in WA to maximise local jobs.”

They will interact with mining firms and are scheduled to submit recommendations to the state government within six months.

In its budget, the WA Government allocated A$5.5m ($4.15m) in funding to the Minerals Research Institute of Western Australia (MRIWA), to support the development and manufacturing of technology metals and renewable energy sources.

24

May

2018

Rio Tinto in talks to sell Grasberg mine stake to Inalum

Rio Tinto is engaged in negotiations to divest its entire stake in the Grasberg mine in Indonesia to PT Indonesia Asahan Aluminium (Persero), also known as Inalum, for $3.5bn. Responding to media reports, the company confirmed that talks are ongoing regarding the proposed sale and that no agreement has been reached at this juncture.

Located in the province of Papua, the Grasberg mine is owned and operated by US-based mining company Freeport-McMoRan’s (FCX) subsidiary PT Freeport Indonesia. Under a joint venture with FCX, Rio Tinto is entitled to a 40% share of production above certain levels until 2021 and 40% of all production after 2021.

The proposed sale is part of the company’s strategy to strengthen its balance sheet and reduce debt. It is also to comply with the Indonesian Government’s strategy that seeks to allow local mining firms to have majority stakes in their operations.

In August last year, FCX reached an agreement to offload 51% interest in the mine to the Indonesian Government.

Karara Capital investment manager Rohan Walsh was quoted by Reuters as saying: “It’s probably a sensible sale – raise a bit of capital, get rid of some governance issues.”

With further investment, the mine is set to transition from an open pit to an entirely underground operation. The transition will help increase production to 160,000t per day of ore by 2022.

Furthermore, the addition of 80,000t of ore per day from Deep Mill Level Zone block cave mine will increase ore supply to the mill to 240,000t per day by 2022.

24

May

2018

Highlands Pacific and Cobalt 27 enter Ramu mine arrangement

Highlands Pacific and Canadian battery metals company Cobalt 27 Capital have entered into a streaming arrangement in connection with the $2.1bn Ramu nickel cobalt mine in Papua New Guinea.

In operation for more than five years, the project comprises a nickel laterite mine at Kurumbukari, where the project has a deposit containing a JORC resource of 124 million tonnes of ore at 1% nickel and 0.1% cobalt. Last year, the mine produced 34,666t of nickel and 3,308t of cobalt in concentrate.

Under the streaming agreement, Highlands will receive $113m upfront as payment from Cobalt 27’s subsidiary, Electric Metals Streaming, which will secure 55% of Highlands’ share of cobalt production and 27.5% of Highlands’ share of nickel production from the mine.

Additionally, Electric Metals is required to make ongoing volume-based payments of $1/lb of nickel and $4/lb of cobalt.

Highlands holds an 8.56% interest in the Ramu project, while the remaining interest is owned by a subsidiary of the Metallurgical Corporation of China (MCC), with 85% and the PNG Mineral Resources Development Company (MRDC), with 6.44%.

The company will use the deposit received from Electric Metals to fully repay loans taken from the MCC for the construction and operation of the mine. Once the loans are repaid, Highlands’ interest in the Ramu project will increase to 11.3%.

Highlands retains the right to acquire up to a 13.27% interest in the cobalt nickel stream from Cobalt 27 for around $15m.

Highlands Pacific managing director Craig Lennon said: “Highlands will emerge from this deal in a much stronger financial position, debt free with enhanced access to cashflows from the Ramu mine.

“The repayment of Ramu project loans allows Highlands to increase its ownership interest in the Ramu nickel cobalt mine over five years earlier than expected and will result in an immediate substantial increase in the project cashflows released to Highlands.”

Cobalt 27 will own 142.5 million shares in Highlands in exchange for an investment of A$15m ($11.37m) through a private placement, equal to 13.04% of the total shares.

23

May

2018

Bluejay Mining to increase resources for Dundas project

Bluejay Mining is set to commence fieldwork at its Dundas ilmenite project in Greenland next month in a bid to significantly increase resources available to the operation. The fieldwork will run through to October this year and focus on the potential for the Iterlack Delta and the surrounding region.

Based on internal estimates, Bluejay expects to define resources of more than 100 million tonnes.

Bluejay Mining CEO Roderick McIllree said: “2018 has already been a successful year for Bluejay with a £17m raise executed and a 400% increase on the JORC Code compliant maiden mineral resource achieved, which not only reaffirms Dundas as the world’s highest-grade ilmenite project but also shows our significant scale.

“Our primary focus now is to ensure that we maintain our momentum towards production. To achieve this, our first objective is to finalise and submit our relevant exploitation licence applications to the Government of Greenland, which we should be in a position to do by the end of this field season.”

Currently, environmental impact assessments (EIA) and social impact assessments (SIA) are in progress. Prior to the completion of the assessments, the mine plan is required to be finalised. Once the EIA and SIA are completed, the company will submit the exploitation licence application at the end of this field season.

Bluejay has purchased a mining fleet to begin civil engineering works, including a bulk sampling programme, construction of the run-of-mine pad and commencement of the earth works around the planned plant and port site.

As a result of last year’s field work, the company identified an increase of more than 400% in the Dundas project’s resource base to 96Mt at 6.9% ilmenite in-situ.

23

May

2018

Zimbabwe mining sector to grow 10% this year

The Chamber of Mines of Zimbabwe (COMZ) has predicted that the country’s mining sector will grow by 10% this year, as the country targets $3.7bn from mineral exploits over the same period.

The Chamber held its annual general meeting last week in Victoria Falls, where President Batirai Manhando reported that ten out of 14 minerals recorded increased volumes in the first quarter of this year, compared with the same period last year. The country’s mining sector was also reported to have grown by 8.5% overall last year.

“Notable increases are in gold, up 53%, coal 46%, nickel 18% and cobalt 13%,” said Manhando, who also explained that a price recovery in gold, nickel and chrome had contributed to the overall growth of the sector.

While capacity utilisation increased from 65% to 71% from 2016 to 2017, particularly improving the mining of chrome, coal and diamonds, Manhando still considers there to be inefficiencies and financial confusion within Zimbabwean mining.

For instance, the Zimbabwean Government imposes non-tax-deductible royalties on mined minerals, such as a 15% tax of the value of diamonds and 5% of the value of gold, which restricts growth in the sector. Furthermore, the high costs of the country’s mining infrastructure, from high electricity prices to expensive materials, undermines profits.

The mining sector is expected to grow to be an $11bn industry by 2022, and an $18bn industry by 2030, but this development could be undercut in the short term. The COMZ originally predicted that the industry would need an investment of $7bn over the next five years to maintain existing operations, but this figure was revised to $11bn at the meeting.

“Our quest is for the government to provide [a] stable, competitive and optimal fiscal framework for the mining industry and simplify the fiscal regime from the high multiplicity of tax heads, tax regulatory instruments and collecting agents to a few tax heads, instruments and agents in order to reduce the burden of compliance,” said Manhando.

22

May

2018

Nickel price increases by 16% since the start of 2018

The London Metal Exchange (LME) has reported that nickel is outperforming other major industrial metals, as global consumption of the metal has grown from 5% to 7% this year.

While the price of nickel has dipped slightly from its three-year high of $16,690/t in April, the metal is currently valued at $14,650/t, a 16% increase on the start of the year. Production of stainless steel, in which nickel is traditionally used, rose by 5.8% to a record 48.1 million tonnes last year, according to the International Stainless Steel Forum.

Similarly, the overturning of a 2014 ban on the export of unprocessed nickel ore in Indonesia has led to dramatic growth in the country’s nickel exports, with 3.3 million tonnes of the metal being exported to China in the first quarter of this year, compared with 300,000t in the same period of 2017.

Meanwhile changes in the composition of batteries have also contributed to an increase in demand for nickel.

“There is a sense that the battery supply chain may be starting to stock up on what is already a key metallic input and one that is expected to gain in importance as battery-makers use more nickel and less cobalt in their configurations,” said Thomson Reuters senior metals columnist Andy Home.

“Nickel’s traditional price driver, the stainless sector, is the foundation on which the current price strength rests but the extra spice is coming from the battery sector, even if somewhat pre-emptively via supply chain hoarding and investor interest,” Home added.

The Shanghai Futures Exchange (SHFE) reported a similar improvement for nickel at a time where other base metals were said to have weaker performance; the contract price of nickel was up 20CNY/t to 108,780CNY/t.

However, both the LME and SHFE are reporting a reduction in stocks of nickel. LME stocks have fallen consistently since August 2017 and are now at 303,576t and are down 17% on the start of the year, their lowest level since June 2014. There were 33,000t of SHFE stocks at the end of last week, their lowers level since October 2015.

The International Nickel Study Group reported in April that the world refined nickel market would register a shortfall of 117,000t this year, a significant revision from the group’s assessment in October 2017 that the deficit would be around 53,000t.

22

May

2018

Women in Mining (UK) launches event to celebrate women’s achievements

Non-profit organisation Women in Mining (UK) (WIM) has launched the third edition of its annual event to celebrate women achievers in the mining industry. Named the “Top 100 Global Inspirational Women in Mining”, the event highlights the contribution of women within the global mining industry and identifies ‘inspirational’ role models.

WIM noted that nominations are open for all women workers in mining and affiliated sectors supporting the industry. BMO Capital Markets is co-sponsoring the 2018 edition.

In this year’s event, the organisation wishes to see a greater representation of natural resource sector roles, including from mine to office, explorers, C-Suite, finance, compliance and ESG to government and non-government agencies.

Interested candidates can send in nominations until 15 August and the results are scheduled to be declared in November this year. Nominations can also be sent by companies and colleagues on behalf of the nominee.

WIM managing director Nichole McCulloch said: “Sharing the success stories of women in mining is critical to attracting and retaining female talent in our industry. It also allows us to address the common misconception that there is not a pipeline of talent coming through.

“Whilst more needs to be done, it is a pipeline that is growing and there are already a large number of inspirational women paving the way for the future of our industry. This search is open to women from every level of seniority and we encourage both companies within the mining sector, as well as co-workers to nominate inspirational female colleagues.”

Established in 2006, WIM promotes the achievements of women in the mining industry and encourages women to pursue the mining sector as a career choice.

22

May

2018

Greatland identifies four gold zones at Black Hills licence in WA

Greatland Gold has identified four distinct zones of high-grade, near-surface gold mineralisation at its wholly owned Black Hills licence in Western Australia (WA). The company has identified the potential for near-surface gold mineralisation at several prospects including Saddle Reefs, Eastern, Rogers and Northern Granites.

According to Greatland Gold, testing at Saddle Reefs confirmed the presence of strong surface gold mineralisation.

Meanwhile, the company identified prospective gold mineralisation at the surface in the Rogers and Northern Granites prospects. Drilling at the Eastern prospect indicated the presence of linear zone of mineralised gold over a strike of around 4km.

Greatland Gold CEO Gervaise Heddle said: “Results from our forensic review of the historic data have further highlighted the licence’s prospectivity for multiple zones of high-grade, near-surface gold mineralisation.

“Importantly, this means that exploring Black Hills’ potential will be a relatively low-cost and low-risk endeavour, but one with substantial potential upside. The Black Hills project epitomises our strategy of targeting under-explored areas with great potential.”

The company is planning to begin its first exploration programme at Black Hills within the next few weeks.

In order to determine the areas with the greatest potential for high-grade gold mineralisation, the company will start field work in the coming weeks, including surface geochemical sampling and geological mapping.

The planned field work will enable the company to outline drill targets at the Black Hills project. Covering 25km², the Black Hills project is located adjacent to the company’s Havieron exploration licence.