Industry news

India announces discovery of 5.9 million tonnes of lithium

13 February | Exploration

The Indian Ministry of Mines reported the discovery of 5.9 million tonnes of inferred lithium ore on their Twitter on 9 February. This deposit alone makes India the country with the fifth-largest lithium reserves in the world. The deposit lies in the Reasi district in the provinces of Jammu and Kashmir.

Lithium is used in the production of batteries for electronic vehicles (EVs), solar panels and electronic devices. Production of minerals necessary for the clean energy transition could increase by as much as 500% between 2020 and 2050 according to the World Bank.

According to the International Lithium Association, demand is set to increase six-fold between 2021 and 2040, due to growing interest in EVs and renewable technologies. This is the first major discovery of lithium in India with the only other being a small deposit of 1,600 tonnes found in Karnataka two years ago.

As India seeks to become a major competitor in the development of EVs this discovery could improve their standing. India is currently reliant on imports of lithium for its manufacturing sector, principally from Argentina, Chile and Australia. Imported lithium forms around 80% of the total lithium used in the country.

This discovery could draw dominance away from the “lithium triangle”, made up of Chile, Argentina and Bolivia. Approximately, 75% of the world’s lithium supply lies beneath the salt flats of these three nations.

The Indian Government has celebrated the discovery as part of president Modi’s movement towards “aatmanirbhar”, a slogan roughly translating to “self-reliance”.

While lithium is associated with efforts towards carbon neutrality, experts have cautioned against the environmental impacts of the mine itself. The Himalayan region between Jammu and Kashmir is an eco-sensitive region, mining could lead to a loss of biodiversity. Ecologically sensitive zones are designated by the Ministry of Environment Forests and Climate Change in India. In these areas, often surrounding national parks, commercial activities are restricted to ensure their protection.

10 February | Law

Trafigura books $577m charge for nickel shipments fraud

The Trafigura Group will take an impairment charge of almost $577m in the first half of this year, after discovering missing nickel in its purchased shipments. The commodity trader recently found that the quantities of containerised nickel in transit during 2022 were misrepresented, and that it was presented with several false documents.

The firm claims the ‘systematic fraud’ was perpetrated by companies connected to and controlled by Dubai-based metals trader Prateek Gupta, including TMT Metals, and companies owned by the UD Trading Group. As a result, Trafigura is now undertaking a thorough review of the fraud and has also initiated legal proceedings against Gupta and the companies allegedly involved in the misconduct.

Since late December, the firm has been inspecting a small proportion of the nickel containers purchased from these companies. The inspection found that some of the commodity was missing, and in response, Trafigura is due to inspect the majority of the shipments which are still in transit.

In a press statement, Trafigura said: “The fraud is isolated to one specific line of business. We have seen no evidence to suggest that anyone at Trafigura was involved or complicit in this illegal activity.

“Nonetheless, the group recorded a $577m charge in the first half of 2023 for [the] Trafigura Group, estimated to be the maximum loss exposure related to this fraud. The group’s net profits in the first half of its 2023 financial year are expected to exceed first half 2022 net profits, notwithstanding this impairment.”

9 February | Deals

General Motors weighs stake acquisition in Vale’s base metals unit

Automaker General Motors (GM) is considering acquiring a stake in Brazilian mining giant Vale’s base metals unit, reported Bloomberg News, citing people familiar with the matter.

The move comes as the automaker intends to access the materials needed to manufacture electric vehicle (EV) batteries. GM has advanced to the next bidding round for a minority stake in Vale’s business, sources said.

A potential stake sale could fetch $2bn for Vale, reported the news agency, and this is not the only instance of new investors eyeing a stake in the Brazilian miner. Last November, Bloomberg News reported that Saudi Arabia’s Public Investment Fund and Japanese trading house Mitsui were also considering offers for a stake in Vale’s nickel and copper operations.

Although talks are in progress, Vale has not made a final decision about the stake sale, nor other rumoured would-be deals. Last December, Reuters reported that Vale was in advanced talks with undisclosed potential partners for its new base metals investment vehicle.

Vale intends to place its copper and nickel mines into a new legal structure, known as Vale Base Metals. The Brazilian firm is looking to announce a strategic partner for the new entity in the first half of this year.

Last year, GM signed an agreement with Vale whereby the automaker will buy battery-grade nickel sulphate equal to 25,000 million tonnes per annum of contained nickel for use in its Ultium battery cathodes to power EVs.

7 February | Deals

First Mining to divest $5m royalty portfolio to Elemental Altus

Canada-based First Mining Gold has agreed to offload its non-core royalty portfolio to Elemental Altus Royalties in a cash-stock deal worth around $5m (C$6.7m).

The deal consideration includes $3.5m in cash and 1,598,162 common shares of Elemental Altus. Under the deal, First Mining Gold will sell 19 royalties across Mexico, the US, Canada and Burkina Faso.

These royalties include a 2.0% net smelter return (NSR) royalty on the Auteco Minerals-operated Pickle Crow development stage gold project in Ontario, Canada.

The royalty portfolio sale also comprises a 1.5% NSR royalty on the Big Ridge Gold-operated Hope Brook Gold development stage project, in addition to other royalties on exploration and development projects. Proceeds from the sale will be used by First Mining to advance its Springpole and Duparquet gold projects in Canada.

Elemental Altus CEO Frederick Bell said: “The acquisition of this royalty portfolio materially expands our development pipeline in Canada. The Pickle Crow and Hope Brook projects are both former operating gold mines, which have reportedly produced over 2.2 million ounces of gold historically and are currently the subject of extensive exploration and investment.

“The portfolio further expands our North American presence and is in line with our strategy of acquiring high-quality royalties.”

3 february | ESG

Las Bambas mine forced to close due to protests

The Chinese-owned Las Bambas mine in Peru halted production due to protests from workers. The mine is responsible for almost 2% of global copper production.

Works at the mine were deemed impossible by owners after months of blockages and protests. MMG, the company which owns the mine, have announced that they have transitioned to a care and maintenance structure.

The Peruvian mining organisation, the Sociedad Nacional de Mineria Petroleo y Energia, claims that mining investments will reduce in the coming years due to political instability and protests such as that at the mine. The unrest has left 30% of Peru’s copper production at risk.

Peru has seen near-continuous protests since early December following the removal of then-president Pedro Castillo by the National Assembly, the body that assumed legislative power in Peru. The populist leader attempted to dissolve the legislative body to avoid impeachment proceedings.

Castillo was popular among Peru’s mine workers due to his denouncement of multinational corporations and calls to nationalise swathes of the mining industry.

Since his impeachment workers have staged numerous demonstrations saying that they work in unsafe conditions and are underpaid.

Copper is used frequently in electric vehicle manufacturing as well as in electronics. Industry experts are predicting a copper deficit in the coming years, but prices have not yet risen to reflect this.

3 February | Deals

Sojitz to offload stake in Canadian copper mine to Taseko Mines

Japan’s Sojitz is set to divest its 12.5% stake in Gibraltar Mine in south-central British Columbia, Canada, to majority owner and operator Taseko Mines, reported Mining.com.

Taseko currently owns a 75% stake in the Gibraltar copper-molybdenum mine, which is claimed to be the country’s second-largest open-pit copper mine. The mine has an average annual production of 135Mlb of copper and 2.5Mlb of molybdenum. It is expected to have operational life until 2038.

This divestment by the trading house comes due to unstable operations, rising risks of environmental liabilities, and deteriorating grades. The deal is expected to close by the end of March this year.

Japanese firms Furukawa and Dowa Holdings each hold a 6.25% interest in the Gibraltar mine. In December 2022, production from the mine was impacted by unplanned mill downtime, including a power outage late in the month.

Separately, Taseko plans to start construction on its Florence Copper Project in Arizona this year. The project is expected to nearly double the firm’s annual copper production capacity. Taseko also owns advanced staged projects, including Yellowhead Copper Project, New Prosperity Gold-Copper Project and Aley Niobium Project.

In January this year, Taseko president and CEO Stuart McDonald said: “Mill throughput in October and November averaged above design capacity, but production in December was impacted by unplanned mill downtime, including a sitewide power outage late in the month."

2 February | Finances

De Beers sees rough diamond sales value drop by almost one third

The world-leading diamond company De Beers have announced the provisional value of their first sales cycle of 2023 for rough diamond sales at $450m. The company also confirmed actual sales for between the 5 December and the 20 December at $417m.

The $450m compares unfavourably to $660m in sales revenue for the same period last year. The company points to wider macro-economic forces leading to caution from purchasing company Sightholders for this decline.

De Beers CEO Bruce Cleaver called for cautious optimism as the year progresses, particularly as China’s economy recovers from its strict policy on limiting imports from regions affected by the Covid-19 pandemic. China is the largest market for polished diamond outside of the US, responsible for 11% of the market, according to 2021 data from De Beers.

The sales figures suggest greater stability in the diamond industry following the Covid-19 pandemic which led to a 28% decline in sales for De Beers during the second sales cycle of 2020, the point at which the pandemic outbreak occurred.

In recent years, consumers have also turned towards artificial diamonds. These can have cost benefits as well as limiting concerns as to the conditions under which individuals are working in diamond mines.

In brief

Angola considers dual listing for diamond mining firm Endiama

Angola is aiming for a dual listing for state-owned diamond miner Endiama, reported Reuters, citing the country’s mines minister. The country initially plans an initial public offering for a stake between 5% and 10% in the company on the Angolan stock exchange, following which it will seek a secondary foreign listing.

This move forms part of the OPEC member’s efforts to reform and privatise the economy, including a partial listing of national oil company Sonangol.

Platinex forms JV with Fancamp for Canadian gold mineral properties

Canadian mineral exploration company Platinex has signed a joint venture agreement with Fancamp Exploration to advance gold mineral properties owned by two firms in Ontario.

As part of the agreement, Fancamp’s Heenan Mallard and Dorothy properties and Platinex’s Shining Tree property will be transferred to South Timmins Mining, a wholly owned subsidiary of Platinex. Located in the Shining Tree District of Ontario, the district-scale Shining Tree gold mineral properties comprise 1,138 mining claims and one mining lease.

Canada’s Mkango reach loan and equity investment deals with CoTec

Canadian mineral exploration and development firm Mkango Resources has signed agreements with Canada-based CoTec Holdings.

The deals are related to a $2.4m convertible loan, a $1.8m equity investment in Mkango’s wholly-owned subsidiary Maginito, and a cooperation agreement for investments in rare-earth processing technology opportunities in the US. Under the equity investment deal, CoTec will subscribe for Maginito shares, equivalent to a 10% equity stake, for an investment of $1.8m.

Vedanta ditches Indian copper smelter divestment plan

Indian mining firm Vedanta has abandoned its plan to offload its Sterlite Copper smelter located in the southern state of Tamil Nadu, reported Bloomberg News.

Vedanta’s Sterlite Copper Business operates the 400,000mtpa copper smelter with associated facilities such as a refinery and copper rod plant, a 1.2Mmtpa sulphuric acid plant and a 220,000mtpa phosphoric acid plant. In June 2022, Vedanta selected Axis Capital to assist in its process to sell its assets.

2 February | Deals

Iamgold concludes deal to offload Rosebel Gold Mines in Suriname

Canada-based precious and critical metal exploration company MLK Gold has expanded its critical metals portfolio in Newfoundland with the acquisition of a second lithium asset from an undisclosed party.

The acquired property is located around 18km due east of the high-grade Kraken

Canadian miner Iamgold has completed the divestment of its 95% stake in Rosebel Gold Mines N.V. to China’s Zijin Mining Group.

Zijin paid $360m in cash and assumed $41m of Iamgold’s equipment lease liabilities. The remaining 5% stake in Rosebel Gold Mines N.V. is held by the Suriname Government. Rosebel Gold Mines N.V. owns a 100% stake in the Rosebel Gold Mine and a 70% interest in the Saramacca Mine in Suriname.

Located in the Chester and Yeo Townships, District of Sudbury, northeastern Ontario, the Côté Gold Project covers a total area of 596km². In December 2022, Iamgold announced the decision to amend its Côté Gold joint venture agreement with Sumitomo Metal Mining and SMM Gold Cote.

According to the agreement, Sumitomo will contribute funding to the Côté Gold Project. Meanwhile, Iamgold will transfer a 10% stake in Côté to SMM as funding is made by SMM.

Iamgold interim president and CEO Maryse Bélanger said: “With the completion of the sale of Rosebel, Iamgold has achieved an important milestone in the company’s strategy to create value for our stakeholders through disciplined portfolio management to fund the Côté Gold Project.

“Côté Gold today is over 70% complete and remains on track for production in early 2024. This transaction, in addition to the previously announced sale of Iamgold’s West African gold assets and the financing agreement with Sumitomo, ensures the current remaining funding requirements for completion of construction at Côté have been met.”

2 February | Exploration

Camino and Nittetsu collaborate on Peru copper exploration project

Canada’s Camino and Japan’s Nittetsu Mining intend to partner for the development of the latter’s Los Chapitos copper exploration project in Peru.

Under the letter of intent, Nittetsu can earn a 35% stake in the project by making C$10.1m in payments and expenditures over a period of three years. The proceeds will be used for exploration, infill drilling, and metallurgical and engineering studies for the Chapitos project.

Nittetsu will also complete due diligence and sign a definitive agreement with Camino by the end of April 2023. Upon Nittetsu acquiring a 35% interest in the project, Camino and Nittetsu will set up a joint venture. The Canadian firm will remain the operator of the project.

Located in the iron oxide copper gold (IOCG) belt of the coastal cordillera of northern Chile and southern Peru, the Los Chapitos property covers an area of around 22,000ha. Nittetsu currently operates the Atacama Kozan copper mine in northern Chile. The mine was developed from an IOCG deposit style similar to Camino’s Los Chapitos project.

Camino CEO Jay Chmelauskas said: “Nittetsu is the operator of the Atacama Kozan mine located in the prolific iron oxide copper gold belt in Chile, next to one of the world’s largest IOCG copper mines, Candelaria.

“Our Japanese partners have extensive mining and geological exploration expertise in a renowned IOCG belt to bring to our southern Peru location. There has been growing interest in southern Peru as an underexplored IOCG mining district, and Nittetsu has recognised our Los Chapitos project as one of the most advanced exploration projects in this coastal cordillera region.”

In brief