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Why the world’s mining companies are so stingy (The Economist – February 18, 2024)

https://www.economist.com/

The energy transition requires vast quantities of metals. But miners are reluctant to invest

Mining companies have spent much of the past decade in investors’ bad books. Throughout the 2000s and early 2010s the industry, betting that the surge in commodity prices brought on by China’s economic rise would persist, splurged on investments and racked up hefty debts in the process.

At the height of the frenzy in 2013 the combined capital expenditure of the world’s 40 largest mining firms by market value reached $130bn, according to pwc, an advisory firm, nearly four-fifths of their earnings before interest, tax, depreciation and amortisation (ebitda). That spending spree left mining bosses red-faced as economic growth in China slowed, causing commodity prices—and the industry’s profits—to plummet.

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US Moves to Restore Stockpiling ‘Panic Button’ in EV Metals Fight with China – by Mark Burton, Joe Deaux, Michael J Kavanagh, Jennifer A Dlouhy and Annie Lee (Bloomberg News – 19, 2024)

https://www.bnnbloomberg.ca/

(Bloomberg) — Insiders liken it to a “panic button.” And for more than 80 years, the primary job of the National Defense Stockpile has been to keep the US military supplied with essential raw materials and protect against supply shocks.

So when China surprised the markets by restricting exports of two niche industrial metals last year, top-level officials in the Pentagon-controlled agency—and the White House—faced an uncomfortable reality: Its panic button no longer worked. The realization triggered a different kind of alarm in Washington.

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Critical minerals sector is ‘not healthy,’ says head of global gold giant – by Naimul Karim (Financial Post – February 18, 2024)

https://financialpost.com/

‘Just look at the so-called critical minerals industry today, lithium’s a bust, so is nickel’ — Barrick chief

The critical mineral industry required to power the energy transition away from fossil fuels is in an unhealthy state and running ahead of itself, says Barrick Gold Corp.’s chief executive Mark Bristow, who heads the world’s second-largest gold company.

Bristow said the mining sector is entering an era dominated by the demand for metals such as lithium, nickel and cobalt, but the projects containing these critical minerals are often led by promoters more focused on the short-term benefits rather than by “responsible miners” that are in it for the long run.

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GM, Panasonic strike deals to buy EV battery materials from Quebec’s Nouveau Monde – by Nicolas Van Praet (Globe and Mail – February 16, 2024)

https://www.theglobeandmail.com/

U.S. automaker General Motors Co. and Japan’s Panasonic Holdings Corp. will buy electric-vehicle battery materials from Nouveau Monde Graphite Inc. and invest in the company, buoying the Quebec miner’s bid to become a go-to critical mineral supplier for North America.

GM and Panasonic have each committed to purchasing 18,000 metric tonnes of graphite for battery anodes annually, beginning when Nouveau Monde’s planned mining and refining facilities enter production, the company said in news releases Thursday. The offtake agreements will run for six to seven years, and they represent about 85 per cent of Nouveau Monde’s planned commercial production, which it is aiming to begin in 2027.

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‘Time for courageous, big-thinking policy’, says nickel miner – by Brad Thompson (Australian Financial Review – February 17, 2024)

https://www.afr.com/

Andrew Forrest-owned nickel miner Wyloo says “courageous, big-thinking policy” is needed to save the industry in Australia. Wyloo is pushing hard for big tax breaks and other action beyond belated relief measures announced by the Albanese and WA governments on Friday.

Perth-headquartered Wyloo and other big players in nickel and lithium are maintaining calls for a production tax credit of at least 10 per cent to reduce costs and spur investment in downstream processing of battery and strategically important minerals.

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West challenges China’s critical minerals hold on Africa – by Andy Home (Reuters – February 16, 2024)

https://www.reuters.com/

LONDON, Feb 16 (Reuters) – China’s CMOC Group overtook Glencore to become the world’s largest producer of cobalt last year as it ramped up its new Kisanfu mine in the Democratic Republic of Congo. The company’s production leapt by 174% year-on-year to 55,526 metric tons, accounting for over a quarter of global demand of 213,000 tons.

Kisanfu, in which Chinese battery giant CATL owns a minority stake, has flooded the cobalt market. The Cobalt Institute estimates global production exceeded demand by 12,500 tons in 2023, making it one of the “biggest surpluses in recent years”.

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Investing in commodities has become nightmarishly difficult (The Economist – February 15, 2024)

https://www.economist.com/

What happened to that “supercycle”?

Only a few years ago, analysts and investors were aflutter with talk of a new “supercycle” in commodities. Some believed the world was about to repeat a surge in raw-material prices that began in the early 2000s, and lasted until the global financial crisis of 2007-09.

This time the prompt was meant to be a mixture of a fast economic recovery, as the West emerged from covid-19 lockdowns, combined with a shift to green energy. Today the thesis looks far less certain. Prices of lithium and nickel, which are vital for electric-vehicle (ev) batteries, exploded in 2021 and 2022, but have since collapsed.

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Are Lithium Stocks at Rock Bottom? – by Stephen Wilmot (Wall Street Journal – February 19, 2024)

https://www.wsj.com/

The volatile metal has spawned a volatile market, and prices have fallen too far to cover the cost of supply needed for electric vehicles

If investing is about pouncing at the point of maximum pessimism, lithium stocks must be worth a fresh look.

The metal used to make electric-vehicle batteries has given investors whiplash. Prices rose rapidly in 2021 and 2022 before falling even faster in 2023. Seaborne spot supplies of the benchmark compounds, lithium carbonate and lithium hydroxide, now cost roughly what they did in mid-2021, according to data from the price-reporting agency Fastmarkets.

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Canadian graphite miner NMG scores deals with GM, Panasonic – by Cecilia Jamasmie (Mining.com – February 15, 2024)

https://www.mining.com/

Nouveau Monde Graphite (TSX-V: NOU) (NYSE: NMG) inked on Thursday multi-year offtake agreements with General Motors (NYSE: GM) and Panasonic Holdings, with both companies also vowing to invest in the Canadian miner to help it produce high-quality graphite in North America.

GM and Panasonic have each committed to purchase 18,000 tonnes of natural graphite active anode material annually over a period of six to seven years, the Montreal-based miner said. They are also making equity investments of $25 million each in the company. The two firms and potential co-investors could join future rounds of financing worth hundreds of millions of dollars, Nouveau Monde Graphite (NGM) said in a statement.

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Heather Exner-Pirot: Why critical minerals are key to Canada’s global influence – by Heather Exner-Pirot (The Hub – February 12, 2024)

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It’s time to establish strategic reserves for critical minerals

From the acquisition of a rare earths stockpile from a mine in the Northwest Territories to the purchasing of stakes in Canadian miners Solaris Resources and First Quantum, a recent spate of Chinese investment in Canadian mining projects has rightly sparked concerns. In the past three years, many Western nations including Canada have put out critical minerals strategies to promote friendly sources of supply and mitigate Chinese dominance in the sector. Yet we are still falling behind.

At the same time, one empathizes with Canadian miners looking to China for investment; they are not finding it anywhere else. Junior and mid-sized miners are starved for capital even as Western politicians are proclaiming their commitment to the sector. Thankfully, there is a solution to the challenge of both reducing dependence on Chinese-controlled exports and boosting Western investment in our own supply. It is time to establish strategic reserves for critical minerals.

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Indonesia Has Grand Ambitions for Its Nickel Industry – by Christina Lu (Foreign Policy – February 13, 2024)

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As the country heads to the polls this week, the future of Jakarta’s bid is set to come into sharper focus.

Long before the energy transition gained momentum around the world, nickel powerhouse Indonesia dreamed of harnessing its mineral riches to transform its economy and wield greater leverage in the international marketplace.

The global shift away from fossil fuels and the growing demand for the critical minerals powering green technology have turbocharged Jakarta’s ambitions. Nickel is a key component in electric vehicle batteries, yet few countries can claim as big of a stake over the global nickel sector as Indonesia, which is home to some of the world’s biggest nickel reserves and mined half of the global supply in 2022.

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US wildlife service considering endangered status for tiny snail near Nevada lithium mine – by Scott Sonner (Associated Press – February 8, 2024)

https://apnews.com/

RENO, Nev. (AP) — Federal wildlife officials have agreed to conduct a full, year-long review to determine whether a tiny snail found only in high-desert springs near a huge lithium mine being built along the Nevada-Oregon line should be listed as a threatened or endangered species.

The U.S. Fish and Wildlife Service said in a finding published Thursday in the Federal Register that enough scientific exists to warrant the review sought by environmentalists who say that groundwater pumping required for the operation of the Thacker Pass mine could push the Kings River pyrg to the brink of extinction.

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How China Built BYD, Its Tesla Killer – by Keith Bradsher (New York Times – February 12, 2024)

https://www.nytimes.com/

The leading Chinese electric vehicle company, with origins as a battery maker, has posted two years of million-car growth in sales.

China’s BYD was a battery manufacturer trying its hand at building cars when it showed off its newest model in 2007. American executives at the Guangzhou auto show gaped at the car’s uneven purple paint job and the poor fit of its doors. “They were the laughingstock of the industry,” said Michael Dunne, a China auto industry analyst. Nobody is laughing at BYD now.

The company passed Tesla in worldwide sales of fully electric cars late last year. BYD is building assembly lines in Brazil, Hungary, Thailand and Uzbekistan and preparing to do so in Indonesia and Mexico. It is rapidly expanding exports to Europe. And the company is on the cusp of passing Volkswagen Group, which includes Audi, as the market leader in China.

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Feds invest $5 million in Temiskaming cobalt processing plant – Ian Ross (Northern Ontario Business – February 9, 2024)

https://www.northernontariobusiness.com/

Refinery developer optimistic more government, private funding will arrive to finish construction

Ottawa is weighing into the processing of critical minerals with a $5-million investment in Electra Battery Materials’ cobalt refinery in Temiskaming, the first dedicated plant of its kind in North America.

The funding will go toward a restart of a construction project that was mothballed in 2023 and for other preparatory technical and processing work. In an interview with Northern Ontario Business, Electra CEO Trent Mell called today’s funding announcement “great news, but it is only a first step.”

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The Great Salt Lake Is Full of Lithium. A Startup Wants to Harvest It. – by Scott Patterson (Wall Street Journal – February 12, 2024)

https://www.wsj.com/

Lilac has raised $145 million from Bill Gates’s Breakthrough Energy Ventures, other investors

America’s biggest saltwater lake may hold a key to the country’s energy future. This summer, a California startup plans to start construction on a project to suck up water from the Great Salt Lake to extract one of its many valuable minerals: lithium, a critical ingredient in the rechargeable batteries used in electric vehicles.

The water will then be reinjected back into the lake, which Lilac Solutions says addresses concerns about the damaging effects of mineral extraction. At its peak, Lilac says it will use a series of pipes to suck up 80,000 gallons of water a minute to harvest the mineral. The company plans to eventually produce up to 20,000 tons of battery-grade lithium a year at its site in northern Utah, located among fields of cattle and pickleweed.

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