It’s Time to Mine is back, now with multiple authors to cover more critical minerals and mining technology news.
Copper
Hot off the heels of the MinExpo mining equipment conference in Las Vegas, the quickly modernizing mining world continues to focus on automation and electrification. Mining equipment giants are announcing battery-electric autonomous equipment, such as Liebherr’s T 264 dump truck. Majors and juniors alike are increasingly talking about battery metals, particularly copper, with prices rising in recent months, but lagging the gains of other industrial metals like iron ore, which saw a recent price rise based on Chinese stimulus.
Rio Tinto aims to produce copper in Arizona by the end of the decade. While copper mining activity in the United States has been eclipsed by Canada and Australia’s production in recent history, Rio Tinto’s Resolution and increasingly stronger support from the U.S government, including the Department of Defense, aims to change that. Successfully negotiating with indigenous groups and navigating the permitting process could position Rio Tinto's Resolution project as an integral solution in addressing how the U.S. will meet surging copper demand stemming from the energy transition.
Panama sees exports of stockpiled First Quantum copper as viable. After being shut down by Panamanian authorities over widespread environmental protests and contractual disagreements, First Quantum and the government have gotten closer to reaching a truce and reopening the Cobre Panama mine. Both sides are hoping to reach an agreement by next year. Pressures are mounting on both sides: First Quantum still has mined copper sitting around and Panamanian leadership needs to cement public trust as they enter into an important political period of social security reform and ensure President Jose Raul Mulino is successful. The government’s shift in attitude towards the mine can also be partially attributed to the economic pressure of credit agencies’ downgrades.
Zijin wants its Africa copper mine to rival the world’s biggest. Kamoa-Kakula in the Lualaba province of the DRC is one of the world’s largest copper deposits. Joint-owner Zijin plans to ambitiously scale up Kamoa-Kakula's production to 1 million tons, a 25% increase from its previous maximum production projection of 800,000 tons. This would bring the mine's output closer to BHP's Escondida, the highest-producing copper mine in the world. This expansion is yet another instance of marquee copper supply additions to fulfill rampantly growing copper demand.
Copper smelters warn of closures as crunch talks get underway. Ah, the world of TCs – no, not total compensation; think treatment charges. TCs are what smelters charge for concentrate to be processed. In a world where copper concentrate is hard to come by, those TCs have been forced into negative territory because smelters are fighting over one another to obtain concentrate. In other words, smelting capacity has increased substantially, especially in Asia and Africa, while actual mined ore has lagged. While negative TCs are a boon for miners who do have concentrate, copper producers have to be extra careful so not to let too much smelting capacity go offline due to the dismal pricing. Adding more gas to the fire is that notoriously hard negotiator Antofagasta is setting the TC benchmark this year. Like lithium, how long low prices take to bring refined copper back to equilibrium remains to be seen. Here’s a great Twitter thread for further reading.
TotalEnergies considers foray into copper trading, top executive says. Want to take it further than investment to demonstrate your interest or commitment to metals? Try starting your own metals trading operation. Total has done exactly that, along with its trading house peers of Vitol, Gunvor, and Mercuria. While recent weeks have returned the glamor of volatility to oil, on the aggregate firms like Total view metals as an avenue that has long-term tailwinds (energy transition demand) and increased volatility. Another motivation to enter metals for Total specifically is to wean itself off its reliance on LNG as a driver of earnings. But let’s be clear – base metal markets are far past their infancy. New market participants have to be aware that there are existing sophisticated market participants who have already optimized the dollars on the table.
Rare Earths
Defense Metals, Saskatchewan Research Council team up to strengthen Canada’s REE supply chain. In recent years, Western countries have become more aware of retaining control over the rare earth element (REE) supply chain in the interest of national security, as China has not been afraid to show its current dominance. In light of this, Defense Metals and Saskatchewan Research Council (SRC) have entered into an MOU (memorandum of understanding) that intends to synergize the two entities and advance REE exploration and eventually production in Canada. SRC also initiated the first production of REE in Canada with its processing facility unveiled in mid-September.
Lithium
Kodal Minerals flags possible delay in first production at Bougouni lithium project. Rain, rain, go away: Mali’s first lithium production may be delayed due to heavy rainfall. Kodal Minerals, which is competing with Leo Lithium to become Mali’s first lithium producer, has pushed back expected maiden production at Bougouni to Q1 2025, with shipments of key mining equipment potentially delayed with the heavy rainfall hitting vital transportation routes. In separate news, Kodal is hoping in talks with the government to transfer its mining license for Bougouni to a newly established entity with the Chinese Hainan Group, who owns 51% of the project.
Rio Tinto in Talks to Buy Arcadium Lithium, Reuters Says. Rio Tinto looks to buy lithium producer Arcadium for a valuation of $4B to $6B. Instead of the usual organic lithium mineral development, Rio Tinto is smartly using M&A to expand its portfolio in an oversupplied lithium market. Weaknesses in the lithium market have been on both sides: demand for critical battery metal has waned due to lowering EV subsidies globally while production (surprisingly, not just from the Chinese) has boomed. However, spodumene (the mineral feedstock for lithium chemicals) costs have fallen but less so than lithium carbonate, causing many Chinese chemicals producers to consider cutting output to bring the lithium market back to equilibrium.
Platinum Group Metals
Sibanye-Stillwater lay offs impact 700. In another blow to American mineral production and processing, Sibanye-Stillwater is planning to lay off an estimated 700 employees due to disappointing palladium and platinum prices. Sibanye-Stillwater has attributed this price decrease to U.S imports of Russian palladium. In an effort to reconcile this, Montana senators Jon Tester and Steve Daines have introduced a bill to ban imports of Russian palladium. While this sounds great on paper, market participants always find ways to circumvent market controls if the product is superior or more price-effective. Instead, the focus should be on expanding American production of palladium and platinum, perhaps through grants to encourage building capacity expansion or more creative ways of recovering platinum.
Policy
US Department of Energy announces $3B in grants to 25 companies for battery metals projects. Many of the recipients are focused on battery recycling, with companies like American Battery Technology Co receiving $150M and Cirba Solutions receiving $200M. However, some of the grants are going towards mining projects. Revex Technologies received $145M for the REV Nickel project. REV is a collaboration between Revex and Lundin Mining to extend the life of Lundin’s Eagle Mine by utilizing waste from the US’s only operating nickel mine. South32 was awarded $166M for the Hermosa project in Arizona to produce high-purity manganese sulfate monohydrate (HPMSM), an important battery chemical. South32 is targeting H2 2027 to bring the zinc-manganese-silver-lead mine into production. Element 25 was also granted $166.1M for another HPMSM production facility using manganese concentrate sourced from their wholly-owned Butcherbird mine in Western Australia.
Vale backs Brazil critical minerals fund in nod to government. Vale’s 250 million reais seeding of Brazil’s first critical minerals fund (1 billion reais, or $180M, total) is the latest government push into the critical minerals business. The other backer is Brazil’s development bank BNDES, and the private equity fund will be managed by JGP Asset Management, BB Asset and Ore Investments. But for all the fanfare these enormous investments have received in the past few years, one must ask the question – is huge capital inflow enough to push the energy transition forward and/or protect domestic interests in critical minerals? Yes, fund size matters, but it remains to be seen how that capital is actually allocated.