BHP says it must do more to address toxic workplace culture

Bloomberg News | March 1, 2022 

Ken MacKenzie, BHP chairman since 2017. (Image courtesy of BHP.)

BHP Group Ltd. has been focused on tackling all forms of harassment at its workplaces for some time, but the company still has more to do, Chairman Ken MacKenzie said in a speech Wednesday.


His comments come after rival miner Rio Tinto Group in Feb. published an explosive report showing evidence of endemic sexual harassment, racism and bullying across its operations. The industry’s remote mines can be especially risky for women. They remain largely male-dominated, with workers living in camp-style accommodation that blurs the line between work and social life.

“We know unacceptable behaviour still occurs in all workplaces, including BHP. And it shouldn’t,” MacKenzie told a conference in Melbourne. “Our data shows that an inclusive and diverse workforce is safer, more engaged and more productive,” he added.

BHP revealed last year that it had fired 48 workers at its sites in Western Australia since July 2019 after verifying allegations of harassment, as well as receiving two substantiated allegations of rape.

The global miner has increased female participation across the business by two-thirds since 2016, lifting it to over 30%, MacKenzie said, although it still has work to do to meet an aspirational target of gender balance by 2025.

Demands on large corporations from a range of stakeholders “seem louder, and more conflicting than ever before,” MacKenzie said, but BHP must not lose sight of the opportunities afforded by the increased focus on environmental, social and governance issues.

(By James Thornhill)

‘Uncertainties’ for Kinross Gold’s Russian operations amidst conflict — BMO

Naimul Karim | March 1, 2022 

Image: Kinross

Prolonged international sanctions might “slow or halt” the development of Kinross Gold’s (TSX: K; NYSE: KGC) operations in Russia, BMO’s metals and mining analysts said, as the country continues to attack Ukraine.


The first wave of sanctions on Russia were announced on February 22, after Moscow’s order to deploy troops to eastern Ukraine.

“As the Russia conflict continues to evolve, uncertainties around Kinross’s operations in-country continue to build,” BMO mining analyst Jackie Przybylowski wrote in a research note to clients. Przybylowski spoke to the Kinross team, including its CEO Paul Rollinson, at the ongoing 2022 BMO Global Metals and Mining Conference in Hollywood, Florida.

International sanctions limit the ability of Russian domestic banks to purchase Kinross’s produced gold and if gold were to accumulate at site for a prolonged period, Kinross could see a shortage of working capital, which could affect short-term operations, the analyst said.

The lack of sales could also slow or halt development of the company’s Udinsk project in southeast Russia, which is currently in the feasibility stage and is expected to be funded by cash generated from the Kinross Gold’s Kupol mine in Russia.

Kinross Gold wasn’t immediately available for comment. However, in a press release on February 23, the company said that its operations in Russia were “operating according to plan” and remained “unaffected by U.S. sanctions.”

Kinross has been operating in Russia for about 25 years, and currently operates the Kupol underground mine and mill in Russia’s Far Eastern region of Chukotka, about 7,000 km from Ukraine. The mine produced 481,108 gold-equivalent oz. last year.

In 2013, the company expanded the mill from 3,500 to 4,500 tonnes per day to process additional ore from the Dvoinoye mine, about 100 km to the north, where mining activities ceased in 2020. Stockpiles from Dvoinoye are expected to be processed until about 2024.

In January 2020 Kinross acquired the Chulbatkan licence, also in Russia’s Far East. Drilling there has focused on the Udinsk resource pit, which is the first project it expects to develop on the licence, with first production forecast to start in 2025.

In 2022, Kinross expects approximately 13% of its global production to come from Russia.

The company’s stock is down 29% year to date, which is “significantly worse than other gold companies under BMO’s coverage,” said Przybylowski.

However, BMO believes that the company is taking reasonable measures to “balance risk from exposure to Russia with commitments to its local stakeholders and its operations.”

“In the near term, maintaining operations is important to ensure the long-term viability of the regional business. Kinross has a responsibility to the community; it maintains employment of its ~2,000 workers and numerous stakeholders in country (Russia),” wrote Przybylowski.

(This article first appeared in The Northern Miner)

EXPLAINER – The importance of Russian titanium to global industry

Reuters | March 1, 2022 | 

Monument to Russian Yuri Gagarin, the first person to travel in space, made of titanium. (Stock image by Сергей Детюков.)

The potential for disruptions to Russian commodity supplies has thrown a spotlight on the metal used in the aerospace, marine and auto industries.


The United States and Europe have imposed financial sanctions on Russian banks, individuals and other entities after Russia invaded Ukraine.



There are as yet no sanctions on Russian commodity exporters such as VSMPO-Avisma, which supplies titanium to planemakers Boeing and Airbus.

But a decision by Western allies to block “selected” Russian banks from the SWIFT payments system could disrupt supplies of commodities that Russia exports, as could suspension of container shipping to and from Russia.

Where is titanium produced?

Titanium minerals are used to make titanium sponge, which is turned into metal for industrial applications.

China is the world’s top producer of titanium sponge, accounting for 57% of global output at 210,000 tonnes last year, according to U.S. Geological Survey (USGS).

USGS data shows Japan comes next with nearly 17%, followed by Russia with nearly 13% of the market. Kazakhstan produced 16,000 tonnes and Ukraine 3,700 tonnes.

Russia has low titanium mineral reserves.

“In 2021 Ukraine was the leading source of titanium mineral concentrates imports into Russia,” USGS said. “Other leading sources included Vietnam, Mozambique and Kazakhstan.”

USGS estimates that Ukraine produced 525,000 tonnes of titanium mineral concentrates last year.

Who imports uranium?

Consultancy CRU says that China was the largest importer of titanium sponge last year with more than 16,000 tonnes, up from 6,000 tonnes in 2020.

The second-largest importer was the United States with about 16,000 tonnes last year, down from 19,000 in 2020.

Japan is the largest exporter of titanium sponge to China and the United States, shipping 8,000 tonnes and 14,000 tonnes respectively last year.

“The recovery of industries such as construction and aerospace last year led to a jump in demand for titanium products post-pandemic,” CRU analysts said.

Tight supplies can be seen in prices of titanium sponge which are up nearly 9% since the end of December at about $9 per kg.

What is titanium used for?

Titanium is used in the aerospace industry to make landing gear, blades and turbine discs, in the marine industry titanium sheet is used to make ships and submarines and in the auto sector it is used in components for internal combustion engines.

In chemical processing, titanium offers protection from fatigue and cracking, in vaping titanium wire is used to enhance safety and control temperature and in sport its uses include golf club heads.

Titanium is also used for joint replacements and dental implants because it has a similar density to human bones.

What’s in a name?

The name Titanium is derived from the Titans of Greek mythology, with the metal accounting for about 0.6% of the earth’s mass.

It is a hard, strong, lightweight metal with extraordinary resistance to corrosion. Titanium is as strong as steel, yet 45% lighter.

(By Pratima Desai; Editing by David Goodman)

BHP, Capricorn back startup promising cleaner lithium mining
Bloomberg News | March 1, 2022 

The Calgary-based startup also plans to raise at least $100 million in series B funding by the end of this year or early next year. (Adobe Stock Image.)

Capricorn Investment Group and BHP Group’s venture capital unit are backing a startup that says its processes make for cleaner and more efficient mining in lithium, the metal used in electric-vehicle batteries.


Summit Nanotech Corp. said in a statement that it closed on a $14 million investment round co-led by Capricorn’s Technology Impact Fund and Temasek’s Xora Innovation, along with BHP Ventures. Funds will be used to help commercialize Summit’s technology.



Summit is tapping into an accelerating race among mining heavyweights and automakers to control more supplies of raw materials that are key to transitioning to low-carbon energy sources. Investors are pressing miners to ensure that battery metals including lithium, nickel and cobalt are produced ethically and in an environmentally friendly way amid a global push to reduce pollution in worldwide economies.

The Calgary-based startup also plans to raise at least $100 million in series B funding by the end of this year or early next year and has already engaged in talks with three automakers, according to Founder and Chief Executive Officer Amanda Hall.

(By Yvonne Yue Li)

Honduras to cancel environmental permits for mining, ban open pits

Reuters | February 28, 2022 

Stock image.

Environmental permits for Honduran metal and non-metal mining will be cancelled, the country’s government said in a brief statement on Monday, describing the industry as harmful and declaring it will specifically prohibit open-pit mining.


The statement from the Ministry of Energy, Natural Resources, Environment and Mines added that natural areas with “high ecological value” will be preserved, without going into further detail.

“The approval of permits for extractive exploitation is cancelled due to being harmful to the state of Honduras, threatening natural resources, public health and because they limit access to water as a human right,” according to the ministry’s statement.

The energy and mining ministry did not immediately respond to a request for clarification on whether the permit cancellations will only affect new projects, or whether they will also apply to existing ones.

The announcement comes from the barely a month-old government of leftist President Xiomara Castro, who took office in January promising to pull the Central American nation “out of the abyss” caused by failed economic policies and rampant corruption.

Castro’s election manifesto released last September pledged to limit mining, prior to her victory at the polls in late November. The manifesto detailed 282 mining concessions doled out by previous governments through 2017, citing the country’s geology and mining institute.

Canada’s Aura Minerals operates an open-pit mine in western Honduras, where it has encountered stiff local opposition in part due to alleged disturbances to a Maya-Chorti indigenous cemetery.

Last year, the company suspended operations due to what it described as illegal blockades.

Aura Minerals’ San Andres mine processed more than 4.4 million tonnes of ore in 2020, producing nearly 61,000 ounces of gold, according to the company’s website.

Honduran mining export revenue from silver, zinc and lead projects in the country totalled nearly $130 million last year, according to central bank data, which did not include any revenue from gold shipments.

(By Gustavo Palencia and Kylie Madry; Editing by David Alire Garcia, Chris Reese and Kenneth Maxwell)

USA 

Most Georgians prefer clean energy over coal – study
MINING.COM Staff Writer | March 2, 2022 | 6:06 am Energy News USA Coal Uranium

Solar panels. (Image from Piqsels).

A recent survey carried out on behalf of researchers at Georgia Tech and the University of Georgia found that a majority of residents of the US state of Georgia strongly support new solar and wind power capacity over new coal-fired plants and believe the government should set a carbon emissions reduction goal.


Conducted by polling firm Dynata, the survey found that 60% of residents back the creation of a state carbon emissions reduction goal. That includes 74% of Democrats and Democratic-leaning independents, 52% of independents, and 45% of Republicans and Republican-leaning independents.

The poll also found that seven out of 10 Georgians support new solar power and six out of 10 back new wind power, with new hydroelectric and natural gas capacity also receiving relatively favorable marks.

On the opposite side of the spectrum, the study showed that only 30% of respondents supported new coal-fired power plants.

“This survey demonstrates that many Georgians across the political spectrum are in favor of green energy solutions that will benefit the state’s environment, create new jobs, and support our economy,” Marilyn Brown, professor of sustainable systems in Georgia Tech’s School of Public Policy, said in a media statement.

Coal is the fourth most important energy source in Georgia, contributing to nearly 12% of the state’s net generation in 2020.

According to the US Energy Information Administration, most of the state’s electricity comes from natural gas, accounting for 49% of its net generation in 2020.

The southern region also exports LNG, particularly after the Elba Island liquefied natural gas import terminal added liquefication and export facilities with the capacity to export 350 million cubic feet per day. Export operations began two years ago, and more than 36 billion cubic feet were exported from Elba in 2020.

Locally, LNG was followed by nuclear power, as Georgia’s four operating nuclear reactors accounted for 27% of the net generation in the same year, while renewable energy, including hydroelectric power and small-scale solar, accounted for 12%.

GREENWASHING

After 139 years of coal mining, Peabody expands into solar

Bloomberg News | March 1, 2022 | 

Peabody’s North Antelope Rochelle Mine (NARM). 

(Image courtesy of Peabody Energy)

Peabody Energy Corp, the biggest U.S. coal producer, is expanding into clean energy.


The St. Louis-based company is forming a joint venture with Riverstone Credit Parters and Summit Partners Credit Advisors to develop utility-scale solar projects on land around retired coal mines, according to a statement Tuesday.


The move is symbolic for a company that’s been digging up the dirtiest fossil fuel since its founding in 1883. But it’s unlikely to mark a significant strategic shift. Peabody characterized the decision as a way to generate new revenue sources, but didn’t disclose how much it was investing in the effort. The company’s primary focus will continue to be coal.

“It would take a long time to turn that ship,” said Andrew Cosgrove, a mining analyst with Bloomberg Intelligence. “This doesn’t move the needle, financially.”

Peabody shares gained 10% to $19.09 at 10:25 a.m. in New York.

The joint venture, R3 Renewables, is focused initially on six sites in Indiana and Illinois. It expects to develop more than 3.3 gigawatts of solar projects and 1.6 gigawatts of battery storage during the next five years.

The venture will create “additional value from our existing assets,” Chief Executive Officer Jim Grech said in Tuesday’s statement. Company representatives didn’t respond to phone calls or emails Tuesday requesting further details.

“I’m not sure how much skin is in this transaction,” BI’s Cosgrove said, suggesting that one potential scenario could see Peabody provide the land and its partners take on most of the development work.

Peabody isn’t the first coal producer to expand into solar. Hallador Energy Co. said in June plans to develop as much as 1,000 megawatts of renewable power in Indiana with Hoosier Energy Rural Electric Cooperative Inc., near a power plant that Hoosier expects to retire in 2023.

(By Will Wade)

Nutrien sees long-lasting disruption to fertilizer market from Russia’s invasion

Cecilia Jamasmie | March 2, 2022 

Nutrien will boost potash production if it sees sustained supply problems in Russia and Belarus, the world’s second- and third-largest potash producing countries after Canada.(Image courtesy of Nutrien.)

Canada’s Nutrien (TSX, NYSE: NTR), the world’s largest potash miner, sees supply shortages of fertilizer getting worse due to the ongoing and escalating Russian invasion of Ukraine, two of the world’s top producers of crops food.


Interim chief executive Ken Seitz, who took the helm in January after the sudden resignation of Mayo Schmidt, told a BMO Capital conference that Russia’s invasion could result in prolonged disruptions to the global supply of potash and nitrogen crop nutrients.

The executive said Nutrien was ready to increase potash production if it sees sustained supply problems in Russia and Belarus, the world’s second- and third-largest potash producing countries after Canada.

Nutrien has said it expects to sell as much as 14.3 million tonnes of potash this year, its most ever, and Seitz said the company plans to run its plants “flat out” as it braces for exports interruptions and plant closures from Russia.

Global spot prices for potash hit a 13-year high of around $650 per tonne in December, after a spike in crop prices and a demand recovery this year. The record price for the fertilizer was set in 2008 when supply deals were signed at around $800 per tonne.

The invasion of Ukraine is also jeopardizing Russia’s nitrogen fertilizer exports and triggering sharp price increases of oil and natural gas, a key input in nitrogen production.

Europe relies on Russia for about a quarter of its oil and more than a third of its gas, with many of those shipments flowing through pipelines crossing Ukraine.

BMO fertilizer and chemicals analyst, Joel Jackson, said the bank sees European gas prices set to remain elevated, likely leading to further plant closures and further uncertainty around Russian supply.

“This could, in our view, see Nutrien reach the high end of 10.8 million tonnes to 11.3 million tonnes 2022 nitrogen volume guidance,” Jackson wrote.

Further disruptions could leave Europe freezing in the winter and curb the continent’s electricity production, forcing energy-intensive industries such as metals smelters and fertilizer makers to slow or shut their output.
Soaring prices

Prices of both oil and gas have skyrocketed in the past week, much higher than North American levels, as European governments are looking to wean their economies off Russian gas.

Brent crude — the global benchmark for oil prices — hit $113 a barrel on Wednesday, its highest since June 2014.

Nutrien shares have climbed 54% in the past year, as global demand for fertilizer already exceeded supply prior to this week’s geopolitical crisis.

The stock was 2.15% up in pre-market trading in New York on Wednesday at $86.76 a piece, leaving Nutrien with a market capitalization of C$59.53 billion ($47 billion).

(With files from Reuters, Bloomberg)

BHP invests $79m in South America-focused Filo Mining

Cecilia Jamasmie | February 28, 2022 

The Filo del Sol project straddles the international border between Chile and Argentina. (Image courtesy of Filo Mining.)

BHP (ASX: BHP), which has been expanding its copper footprint in the past, will invest C$100 million ($79m) in Canadian junior Filo Mining (TSX: FIL), which is developing a copper-gold-silver project straddling the border between Argentina and Chile.


The Vancouver-based company said on Monday it would issue 6.27-million common shares in a private placement to BHP at C$15.95 a piece, representing a 12% premium to the 20-day volume-weighted average trading price. Filo Mining’s stock closed at C$14.30 a share on Friday.

Once the private placement is completed, which is expected to happen on or before March 11, BHP will own about 5% of Filo Mining and will be granted certain participation and top-up rights, the companies said.

The junior plans to use the funds for further exploration and development of its Filo del Sol project.

According to Lundin Mining Corp., Filo Mining’s majority owner, the project is expected to be an operation of equal size or bigger that its Candelaria mine in Chile. Chairman Lukas Lundin has said that building Filo del Sol will cost between $4 billion and $5 billion.

Filo’s president and CEO Jamie Beck said BHP’s investment was a “significant endorsement” of the company’s project, team and strategy.

Beck added that the company and BHP had also agreed to form a joint advisory committee to share expertise, exploration concepts, and discuss future project development.

Stamp on project’s potential

“We believe that while funding for exploration was never in doubt, the quality of the source of funding in this transaction, and the potential capacity of BHP to fund future development endeavors places a firm stamp on the project’s potential,” Haywood Capital Markets said in a Monday note to investors.

“We see potential project longevity spanning several decades,” the experts added.

Filo Mining, and its predecessors, have been exploring at Filo del Sol since the 1999-2000 field season. Work has been limited to the summer season, typically between November and April.

Based on the latest figures released by the company, the Filo del Sol project will have an estimated after-tax value of C$1.28 billion, with an internal rate of return of 23%.

The asset is expected to produce an annual average of 67,000 tonnes of copper, 159,000 ounces of gold and 8.65 million ounces of silver.

Charlebois: Ukraine conflict — the global agri-food industry is about to take a big hit and Canada won't be immune

Given what has already been happening around the world with supply chain issues, saying that this conflict will prompt food-price inflation is an understatement.

Author of the article:Sylvain Charlebois
Publishing date:Feb 28, 2022 

Ukraine, formerly nicknamed the 'granary of Europe,' counts broadly on its farming sector. So does the rest of the world. 

Humanity just got dealt another blow with Russia’s invasion of Ukraine. Only thinking of the human cost is unbearable. But the agri-food sector has already been impacted by the conflict in more ways than one.

First, Ukraine is Europe’s breadbasket, so this conflict will affect global commodity markets in a meaningful way. Wheat and corn futures are slowly reaching record levels. Ukraine is the ninth-largest producer of wheat in the world, producing slightly less than Canada yearly. Ukraine is also the fifth-largest producer of corn in the world, with 13 per cent of all world exports in corn. Agricultural activity represents about 70 per cent of the country’s land, and about 25 per cent of the world’s reserves of black soil is in Ukraine. The country has exceptional growing conditions.

But this conflict obviously includes Russia. Both countries together account for 25 per cent of global wheat exports. Barley and rye are also heavily produced in the region. All these commodities combined could compromise many agri-food companies’ access to key ingredients. The invasion has led to a ban on all commercial vessels in the inland sea of Azov, which is the main connection to the Black Sea, where Ukrainian ports are located. Almost 90 per cent of Ukrainian grain exports are transported by sea, and marine logistics in the region have been severely compromised.

Given what has been happening around the world over the last several months with supply chain issues, saying that food price inflation will stem from this conflict is an understatement. If you think Canada is immune to all of this, given our domestic agriculture production, think again. Agricultural commodities are traded on world markets. What happens in Ukraine and Russia affects us. The world, especially the agri-food world, is deeply interconnected.

Oil is now trading between $90 and $100 U.S. a barrel, which is the highest it’s been in more than six years. Russia exports about 5 million barrels of crude per day and about half of that goes to Europe. Countries are trying to penalize Vladimir Putin’s regime without disrupting Russia’s energy exports, to help the world recover from the pandemic. This is telling of how incredibly delicate the situation is, and how Putin strategically chose his moment to invade. But if energy costs haven’t been a factor with the current food inflation problem, they certainly are now. We are expecting transportation fees to be impacted within weeks, if not days.

The fertilizer market has also been affected by this conflict. The region is a significant exporter of nitrogen, potassium and phosphorus fertilizers. The invasion last week increased fertilizer prices globally by more than $200 a ton overnight. This is not great news for farmers who were looking to increase yields this year due to higher prices. Fertilizers were already quite expensive before the conflict in Ukraine. Canadian farmers are likely to do well with markets, but prohibitively expensive fertilizer prices could impact agricultural output in the Northern Hemisphere, including Canada. If Mother Nature doesn’t co-operate yet again, this could be another challenging year for our farmers.

Price gouging in the industry has always been an issue, and U.S. Agriculture Secretary Tom Vilsack has notified companies already not to inflate fertilizer prices unnecessarily. It’s not a sector most consumers know about, but without the proper soil science supported by effective fertilizers, the cost of our food just wouldn’t be the same.

And make no mistake. For Russia, China is an ally. Putin is not simply seeking to mend lost Soviet territory; he is focused on restoring Russian influence. And controlling global food supply chains with China is one way to do it. Given their production, both countries combined are agriculturally influential. So western economies are being destabilized yet again. For two years, it was a virus, and now, it is a tyrant.

In essence, what this conflict will do is bring to the agri-food sector a new layer of uncertainty, at the worst possible time. And as consumers, we need to take a deep breath and hope the conflict doesn’t last long. But we have been down this awful road before, so the prospects are not great.

In the meantime, we need to stand for Ukrainians as they are the victims of evil, simply put.

Prof. Sylvain Charlebois is Senior Director, Agri-Food Analytics Lab, Dalhousie University.