This Week in Critical Minerals – #12
This Week in Critical Minerals – #12
Mining technology, copper, lithium, rare earths, uranium, and palladium news
This Week in Critical Minerals is back! Let’s dig into what happened in critical minerals mining this week.
Technology
Lifezone Metals announces recycling joint venture with Glencore. Lifezone Metals acquired the hydromet technology in July and is commercializing it to recover platinum, palladium, and rhodium (collectively known as platinum group metals, PGMs) from used catalytic converters. Phase 1 testing is underway at a lab in Perth, and is expected to conclude in the first half of 2024, with a feasibility study to follow outlining recoveries and project economics. Glencore will be providing the capital (US$15-20M) for the phase 2 commercial-scale recycling facility located in the United States and will be the sole offtaker and marketer of the refined PGMs. Lifezone is also advancing the Kabanga nickel project in Tanzania, which will use similar hydrometallurgical technology; a definitive feasibility study is underway.
Veracio and Granite partner to transform drillhole data. Veracio is a wholly-owned subsidiary of Boart Longyear, spun out of the company’s main business (drill rig manufacturing and services) in October. The newly independent entity is a technology company specializing in core scanning (XRF and high-res photos), logging features of core samples, analytics, and drill rig monitoring. Granite subsidiary International Directional Services (IDS) specializes in data collection from drill holes. The latest partnership will allow IDS to leverage Veracio’s drill rig monitoring technology to improve the efficiency and accuracy of drill rigs, as well as apply Veracio’s AI analysis tools. This combination of hardware and software expertise will undoubtedly improve efficiency in the exploration drilling process.
Glencore deploys autonomous haul trucks at Lomas Bayas mine in Chile. This deployment is through the Lomas Lab, a technology creation initiative that seeks to test the automation of production processes at Glencore’s Lomas Bayas mine in northern Chile before scaling the technology to the company’s other operations worldwide. The pilot utilizes four Komatsu 930E-5 extraction trucks running the Komatsu FrontRunner autonomous system operating in a separate area from the rest of the mine. Glencore expects a decrease in fuel consumption of 4%, reduced safety incidents, and longer hours of operation through greater utilization of the autonomous fleet. Autonomous blasthole drills used in mining were deployed at the site starting mid-last year using technology provided by FLANDERS on two Caterpillar drill rigs.
Epiroc acquires drill parts and excavator attachments businesses. Epiroc is one of the largest manufacturers of mining equipment in the world, producing drill rigs, excavation equipment, loaders, trucks, and much more. They made two acquisitions this week, the first (and smaller) being Weco Proprietary Limited, a leading manufacturer of precision-engineered rock drilling parts primarily serving underground mines in South Africa. They also acquired STANLEY Infrastructure, a manufacturer of excavator attachments and handheld hydraulic tools, from Stanley Black & Decker for US$760M.
Copper
Copper price sees biggest day since January. The 3-month copper price on the LME jumped 2.8% on Thursday amidst expectations that the Fed would cut interest rates next year. Copper has seen a steady climb over the last few months from around US$3.60/lb to Friday’s closing price of $3.88 (copper continuous contract on NYMEX). Supply constraints are adding upward pressure to the price, with the Panamanian government shutting down First Quantum’s Cobre Panama mine recently, as well as Anglo American lowering copper production guidance for next year by 200,000 tonnes. Anglo American shares plunged nearly 20% following this news last week.
Ivanhoe Mines raises C$500M, to quadruple exploration budget in 2024. The company announced a mega private placement to fund exploration, working capital, and general corporate purposes. They are also increasing their exploration budget fourfold to $90M. Most of this will be deployed at the Western Foreland exploration site adjacent to the producing Kamoa-Kakula copper complex, particularly around the Kitoko find announced last month, which contained two mineralized zones grading as high as 11.64% over 5.19 meters in one hole. Ivanhoe geologists predict that the mineralization at Western Forelands extends over a greater area than at other projects in the DRC.
Workers at Antofagasta mine approve contract, avert strike. The union at Antofagasta’s Centinela mine in northern Chile voted to approve a new labor contract, following a threat by the union leader earlier in the week that they would go on strike. The union rejected a previous offer from Antofagasta last month over working conditions and production-related bonuses. The mine produced 247,600 tonnes of copper last year, approximately 1% of global supply.
Lithium
MinRes ups stake in Delta Lithium to 24.27%. The company recently raised A$70M to fund drilling at the Mt Ida and Yinnetharra lithium projects, including participation from MinRes. MinRes has been accumulating shares since it revealed itself in August as the mystery buyer of 14% of the shares on the open market. This was followed by the appointment of MinRes Managing Director Chris Ellison as Non-Executive Chairman of the Delta board. This is part of a wave of consolidation in Western Australian lithium, with producing companies acquiring stakes in exploration and development projects. In the last few months, MinRes has also accumulated 13.56% of Azure Minerals and 19.85% of Wildcat Resources.
Livent acquires minority stake in EnergySource Minerals. EnergySource subsidiary ILiAD Technologies is developing a direct lithium extraction process that extracts lithium from brines. Their technology uses 9X less water than conventional salars (brine ponds) and 3X less water than hard rock mining. The California-based company is working on deploying its technology at the ATLiS project in the Salton Sea in California. The new deal with Livent will see ILiAD’s technology platform deployed at Livent’s Argentinian brine asset, Salar del Muerto, significantly reducing Livent’s energy and water consumption.
Volt Lithium releases PEA for Rainbow Lake oil field brines project. The project is located in Alberta, and the preliminary economic assessment details the ramp-up of lithium hydroxide monohydrate production from 1000 tpa to 23,000 tpa in three phases over a 19-year project life. The company finished a pilot of its proprietary direct lithium extraction (DLE) technology earlier this year, extracting 90% of the lithium in brines at a concentration of 34 mg/L, and 97% Li recoveries from 120 mg/L. Volt has a strategic partnership with Cabot Energy, an Alberta oil and gas company, in which Volt can utilize existing equipment and wells with lithium-infused brine. The company anticipates production to begin in the second half of next year.
Rare Earths
Aclara delivers maiden mineral resource estimate at Carina project in Brazil. The company announced a 168 Mt inferred resource grading 1510 ppm total rare earth oxides. Carina is an ionic clay rare earth deposit, formed where rare earth mineral particles weather from the parent rock and adsorb onto clay particles, as opposed to hard rock deposits formed by solidification of rare earth-rich magma into carbonatite rock. Ionic clay rare earth mining is increasingly common in China, now comprising ~10% of Chinese rare earth mines, but is virtually absent outside of China and Myanmar. While lower grade, ionic clay deposits tend to be located near the surface, so mining it is cheaper and less disruptive to the environment. Ionic clay deposits contain a greater proportion than carbonatite deposits of dysprosium and terbium, two critical rare earth metals used to improve the magnetic properties of NdFeB magnets (the kind used in electric vehicle motors). Aclara is moving quickly, with plans to test a pilot plant to produce 20 kg of mixed rare earth carbonate and the release of a preliminary economic assessment in Q1 of next year, followed by further exploration drilling on-site in Q2.
Uranium
US House passes bill banning Russian uranium imports. The bill passed on Monday does include exemptions for purchases made in the national interest or if an alternative source cannot be found to power a nuclear reactor. The vote still needs to pass through the Senate, and it is unclear if that will occur by the end of the year. If enacted, uranium prices (particularly low-enriched uranium used in power plants) will likely spike. Though many North American uranium projects are under development, these will take years to come online and fill the domestic supply gap. Russia supplied 12% of the uranium used in the US in 2022, with US companies paying the state-owned company Rosatom nearly US$1B last year. With sanctions across most Russian exports, certain metals—notably uranium and titanium—have been an exception. The UK also expanded its sanctions against Russia during the week to include several dozen metals, including copper, nickel, and aluminum (but not uranium).
Fission Uranium releases 2024 development program for the PLS project in Saskatchewan. The PLS project is in the Athabasca Basin, known as one of the highest-grade uranium regions in the world, home to major mines like Cameco’s Cigar Lake and McArthur River. The feasibility study released in January estimated a production cost of C$13.02/lb U3O8 (US$9.70) against the current market price of around US$85. Construction is estimated to take 3 years with an initial capital cost of C$1.15B for a shallow underground operation, and a mine life of 10 years with several areas of future expansion. The announcement shows Fission Uranium’s plan to submit the draft Environmental Impact Statement in Q1, advance licensing with the Canadian Nuclear Safety Commission in Q2, and finalize engineering plans for the mine, mill, and related infrastructure next year. The company plans to commence site prep and construction in 2026 and commission the mine in 2029.
NexGen to raise C$500M to develop the Rook I project. The Rook I project will be an underground mine located in the southwest part of the Athabasca Basin. Permitting is in the final stages, with the company awaiting provincial construction approval and a hearing with the Canadian Nuclear Safety Commission. With provincial environmental approval this past November, Rook I is the most advanced greenfield uranium project in Saskatchewan in the last 20 years. The project’s feasibility study estimates C$1.3B of capex to construct the initial mine, with opex of C$7.58/lb U3O8, one of the lowest production costs in the uranium industry. The at-the-market equity offering will fund 2024 goals, including the completion of earthworks, front-end engineering and design for the mine and mill, and a start to construction in the next few years.
Boss Energy buys 30% of Alta Mesa from enCore Energy for US$60M. enCore acquired Alta Mesa from Energy Fuels in February, and the in situ recovery project located in Texas is now fully licensed and expected to commence production in 2024. In situ recovery is a method of uranium extraction used primarily in Kazakhstan, where fluids are injected underground to dissolve the uranium, and then the fluid is pumped up and processed. The company officially became a uranium producer less than a month ago with the recommissioning of the Rosita in situ recovery processing plant in Texas. enCore will be a major player in domestic US uranium production in the coming years, with expected 2026 production of 3.6M lbs/U3O8 and projects in Texas, South Dakota, Wyoming, and New Mexico. Boss Energy is an Australian company developing the Honeymoon uranium ISR project in South Australia, where production is expected to commence in H1 next year. They recently announced the completion of an A$205M placement which will fund the restarts of Alta Mesa and Honeymoon and other exploration activities.
Palladium
Price rallies nearly 20% on sanction fears. Last week, the UK deployed sanctions across several dozen Russian metals, but not palladium. However, on fears of potential disruptions to palladium supply (of which Russia supplied 42% in 2022), the price has rallied 16% since Thursday’s announcement and 26% in the last week to US$1185/oz (at the time of writing). The metal is still down 34% this year and nearly 60% since the price approached US$3000 just after Russia’s invasion of Ukraine in February 2022. Primary uses are in catalytic converters in automobiles and as industrial catalysts, though demand for the metal is expected to grow slower than in the past with the switch to electric vehicles that don’t require it. With the surge of palladium prices in 2021 and 2022, some automakers switched to the cheaper platinum in their catalytic converters (now US$947.70/oz).