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Latin America Mining

Electric car dreams may be dashed by 2050 on lack of cobalt, lithium supplies – by Cecilia Jamasmie (Mining.com – March 16, 2018)

http://www.mining.com/

Supplies of cobalt and lithium, key for making the batteries that power electric cars and mobile phones, are likely to be limited by 2050, German researchers have warned.

According to the Karlsruhe Institute of Technology (KIT) study, published this week in the journal Nature Reviews Materials, a shortage and price increase of cobalt are likely to occur in about thirty years, especially since demand for the metal is expected to be twice as high as today’s identified global reserves.

The authors are not so pessimist when it comes to lithium, as there are several companies rushing to explore and produce the so-called white petroleum. They do warn production will have to be strongly boosted — more than ten times, they predict — to match future demand.

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Explainer: Chile attempts to block China from prize lithium asset – by Dave Sherwood and Nicole Mordant (Reuters U.S. – March 13, 2018)

https://www.reuters.com/

SANTIAGO/VANCOUVER (Reuters) – Chile’s government has asked antitrust regulators to block the sale of a 32 percent stake in Chilean lithium company SQM SQM_pb.SN to a Chinese firm on the grounds it would give it an unfair advantage in the global race to secure resources to develop electric vehicles.

Chile development agency Corfo, which oversees SQM’s lithium leases in the Salar de Atacama, claimed in a 37-page complaint filed on Friday that the purchase of a stake in SQM by “Tianqi Lithium, or any entity related to it directly or indirectly (including companies controlled by the government of China)” would “gravely distort market competition.”

WHY WOULD CHILE WANT TO BLOCK A CHINESE BUYER?

It was unclear if Corfo’s complaint, if upheld, would block all potential Chinese bidders for the stake. But it certainly seeks to block Tianqi Lithium, one of China’s top lithium producers.

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Lundin Gold eyes growth after mine in Ecuador built – by Susan Taylor (Reuters U.S. – March 4, 2018)

https://www.reuters.com/

TORONTO (Reuters) – Lundin Gold Inc has a hearty appetite for growth even as the Canadian miner focuses on building its first mine in Ecuador on time and budget, Chief Executive Ron Hochstein said on Sunday.

“We want to grow to be an at least 1-million-ounce-a-year producer with three to four operations,” Hochstein said in an interview with Reuters at the Prospectors and Developers Association of Canada mining show in Toronto.

“Our appetite is a good one. We’ve got great opportunities to grow organically and obviously we’ll look at other places as well,” he said. The company would focus on North and Latin America for future growth.

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Guatemala Mines a Mother Lode of Trouble – by Mac Margolis (Bloomberg News – March 1, 2018)

https://www.bloomberg.com/

A bitter fight over a silver mine points to the pitfalls of Latin America’s new resource nationalism.

Although it’s small and mostly poor, Guatemala sits on a heap of treasure. Last year, it ranked as the world’s 15th-largest producer of silver, a nest egg that could yield economic growth and taxes and royalties, helping to hoist millions from misery.

So why is the Escobal silver mine, one of the world’s largest, idle? In 2014, when the Canadian-owned Tahoe Resources Inc. started production, corporate touts projected a two-decade bonanza. Now they’re facing a shuttered mine, protesters, and a lode of legal troubles.

To hear tell from the mine’s backers, including U.S. legislators in a letter to President Jimmy Morales and Guatemalan industrialists, Escobal is the victim of choleric political activists, and even “criminal groups,” as one company official told me, who are using the courts as a fig leaf to thwart foreign investors.

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Iron ore grade war boosts Vale as Evy Hambro exits Fortescue – by Peter Ker(Australian Financial Review – February 28, 2018)

http://www.afr.com/

Australian iron ore exporters’ geographic advantage over South American rivals has been largely eroded by China’s growing preference for higher grade iron ore, according to the giant Brazilian miner that stands to benefit most from the trend.

Vale’s claim to now be matching the profit margins on each tonne of iron ore sold to China by the likes of Rio Tinto and BHP comes as Evy Hambro’s BlackRock World Mining Trust confirmed that it had exited Fortescue Metals Group’s share register because of the wider price discounts being applied to Fortescue’s iron ore

The average iron content of Vale’s ore has recently risen to 64.3 per cent with the introduction of the high-grade S11D mine in Brazil’s Carajas region, and the arrival of that mine has coincided with Chinese steel mills paying a premium for higher grade iron ore as they seek to improve environmental efficiency.

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Australia’s Newcrest takes 27-per-cent stake in Lundin Gold, clearing way for Ecuador mine production – by Niall McGee (Globe and Mail – February 27, 2018)

https://www.theglobeandmail.com/

Lundin Gold Inc. has secured a US$250-million investment from Australia’s Newcrest Mining Ltd. as the Vancouver-based junior gold miner looks to kickstart production at a key mine in Ecuador.

Newcrest’s move to take a 27-per-cent stake in the company is part of a larger US$400-million financing – including money from Orion Mine Finance Group and the Lundin family – that will help Lundin Gold complete the construction of its Fruta del Norte gold mine, which is on track to begin production late next year.

The investment by Newcrest is further evidence of an emerging trend in the sector as senior companies invest in juniors via so-called strategic investments instead of staging full-scale takeovers.

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Tahoe suffers $18m Q4 loss as Escobal shutdown saga drags on – by Henry Lazenby (MiningWeekly.com – February 24, 2018)

http://www.miningweekly.com/

VANCOUVER (miningweekly.com) – Precious metals producer Tahoe Resources has recorded an $18-million loss for the fourth quarter ended December 31, as its flagship Escobal silver mine, in Guatemala, lingers on care and maintenance.

The TSX- and NYSE-listed miner reported an adjusted comparative loss of $17.7-million, or $0.06 a share, for the period, contrasting against headline earnings of $18.4-million, or $0.06 a share, in the same period of 2017. This was well below average analyst estimates, calling for nil cents a share.

The company talked up the rising importance of its gold portfolio, as Escobal – the world’s third largest silver producer – remains closed because of a mining licence dispute. The net loss for the period came to $18-million, or $0.06 a share, compared with profit of $300 000, or nil per share, in the same period of 2016.

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Australia’s Top Gold Miner Boosts Bets on Ecuador’s Riches – by David Stringer (Bloomberg News – February 25, 2018)

https://www.bloomberg.com/

Australia’s largest gold producer, Newcrest Mining Ltd., will invest $250 million for a stake in Lundin Gold Inc. to boost its presence in Ecuador, which is attracting a slate of mining giants hunting for major untapped metals deposits.

Newcrest will take 27.1 percent of Vancouver-based Lundin Gold, which expects to bring the Fruta del Norte gold and silver mine in southeastern Ecuador into production by the end of next year.

The companies will explore eight other concessions to the north and south of the project under the deal, and Newcrest can earn up to a 50 percent interest in that joint venture by spending $20 million over five years, the Melbourne-based producer said in a statement Monday.

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Barrick Gold focuses on discipline after merger misstep – by Niall McGhee (Globe and Mail – February 23, 2018)

https://www.theglobeandmail.com/

As it continues to deal with repercussions from an ill-fated copper deal in Africa, don’t expect Barrick Gold Corp. to rush into any major mergers and acquisitions deals any time soon.

“When times are good, companies overpay for mediocre assets and invest in projects with low returns,” said executive chairman John Thornton in a webcast to investors on Thursday.

“At Barrick, this will not happen. We are putting in place the discipline to make certain this is the case.” Mr. Thornton said that Barrick had examined a number of external M&A opportunities last year, but passed.

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Sale of $5bn lithium stake to test electric car hype – by Henry Sanderson (Financial Times – February 17, 2018)

https://www.ft.com/

PotashCorp plans to sell a big stake in Chile’s SQM, a key supplier of the metal

When Canadian fertiliser company PotashCorp acquired shares in Chile’s SQM almost 20 years ago, the latter’s lithium business appeared an afterthought.

Controlled by Julio Ponce, the well-connected son-in-law of Chile’s former dictator, Augusto Pinochet, SQM was known as a fertiliser company. However, the then obscure lithium business is why the 32 per cent stake is now valued at $4.7bn.

Lithium has hitched a stunning ride on the wave of interest in electric cars, making it one of the world’s hottest commodities. SQM’s lithium business generates about 60 per cent of the profits for the company, which is in talks with Elon Musk’s Tesla over a deal to supply lithium, a key ingredient in electric car batteries.

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Southern Copper wins auction for massive Peru copper project – by Frik Els (Mining.com – February 20, 2018)

http://www.mining.com/

An auction for the $2 billion Michiquillay copper project in Peru attracted 10 interested companies according to Peru’s government investment agency Proinversión with Southern Copper Corp declared the winner on Tuesday.

Reuters reports Southern Copper won the tender with a proposal to transfer $400 million to the government and pay 3% royalties. Southern Copper is controlled by conglomerate Grupo Mexico. Southern’s chief executive told Reuters in September that Michiquillay has arsenic impurities, requiring a “slightly higher” investment to clean up the area.

According to Proinversión, the other companies that pre-registered for the tender included Peru’s Buenaventura, local units of Rio Tinto, Teck Resources and Hudbay Minerals, as well as Compania Minera Milpo, a company controlled by Brazil’s Votorontim. Milpo had offered $250 million in transfers and 1.875% royalties. Eight companies did not end up bidding.

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A look behind Sherritt’s double financing victory – by Barry Critchley (Financial Post – February 15, 2018)

http://business.financialpost.com/

The Canadian resource company bought back $121.223M of three classes of debt at an aggregate cost of $110.331M plus accrued interest

It looks like a classic win-win, now that the second part of a financing package unveiled one month back by Sherritt International has closed: the issuer raised more equity than originally intended and bought back more debt than anticipated — and at a slightly lower price.

Wednesday, Sherritt announced it had bought back $121.223 million of three classes of debt at an aggregate cost of $110.331 million plus accrued interest. Under normal circumstances, that debt was set to mature over the period of 2021-2025. Because of the buy-back the company now has about $600 million of debt outstanding — down from $720 million previously.

Sherritt bought the debt back through a modified Dutch auction: prior to the auction, it posted maximum prices; asked holders to submit their proposals, indicated those proposals “must be less or equal to the maximum price,” and then picked the so-called market-clearing price.

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Barrick Cuts Gold Output Forecast for Eighth Potential Drop – by Danielle Bochove (Bloomberg News – February 15, 2018)

https://www.bloomberg.com/

Barrick Gold Corp., the bullion producer that once towered over rivals, continues to shrink. The Toronto-based miner is predicting its eighth straight decline in annual production as it takes less gold out of the ground at its main mines.

The company expects to produce 300,000 fewer ounces in 2018 than it had previously forecast. It now projects total production will be 4.5 million to 5 million ounces this year, compared with a previous forecast of 4.8 million to 5.3 million ounces. Total gold output in 2017 was 5.32 million ounces.

Barrick also raised its forecast for all-in-sustaining costs to a range of $765 to $815 an ounce this year, compared with previous guidance of $710 to $770.

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INSIGHT: Brazil Potash – King of the jungle? (ICIS.com – February 14, 2018)

https://www.icis.com/

LONDON (ICIS)–Deep in the Amazon lies a wide clearing – an unremarkable space overlooked by jungle trees with little sign of human habitation. However, if muriate of potash (MOP) start-up Brazil Potash pulls off its plan, the sleepy jungle of Autazes could soon be home to the nation’s largest MOP mine – a scheme CEO Matt Simpson believes could vastly reduce Brazil’s near-complete reliance on imported potash fertilizer.

Simpson – an experienced industry professional in the field of mining – heads up Brazil Potash, which formed in 2009 with a simple plan: to provide Brazil’s immense agricultural industry with a homegrown source of the vital mineral fertilizer.

‘Potash’ is the umbrella term for a number of potassium-rich fertilizers used the world over to support plant nutrition, improve yields, and fend off disease.

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Barrick sees drop in gold production ahead, putting its No. 1 spot at risk – by Niall McGee (Globe and Mail – February 15, 2018)

https://www.theglobeandmail.com/

Barrick Gold Corp. is on track to lose its long-held crown as the world’s largest gold producer after forecasting production for this year that will likely fall short of U.S. competitor Newmont Mining Corp.

In a release announcing its fourth-quarter results after the markets closed on Wednesday, Toronto-based Barrick said it expects to produce between 4.5 million to 5 million ounces of gold in 2018. In December, Newmont predicted that its 2018 gold production will be between 4.9 million to 5.4 million ounces.

While Colorado-based Newmont had already passed Barrick in terms of market capitalization, it had lagged Barrick in production.

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