Surging energy prices force Japanese steel giant to revisit coal

Bloomberg News | June 20, 2022 |

Credit: Nippon Steel Corp.

Nippon Steel Corp. is prepared to make more investments in coal mines after the energy source surged in price, as Japan’s biggest steelmaker looks at ways to stabilize the supply of one of its key raw materials.


International prices of coking coal, the variety shoveled into blast furnaces to manufacture the alloy, have spiked to unprecedented levels in the wake of Russia’s invasion of Ukraine. At the same time, Japanese steel mills, most of which are reliant on imports, are grappling with ballooning costs after a dramatic slide in the value of the yen.

It’s a dynamic that’s led Nippon Steel to study whether investing further in coal projects makes sense, particularly as miners come under pressure to divest those assets because of fears over global warming, Kiichi Yamada, the general manager of the company’s raw materials division, said in an interview in Tokyo last week.

Nippon Steel currently has minority stakes in six coking coal assets, mostly in Australia, including the Moranbah North project led by Anglo American Plc with production capacity of 15 million tons a year, according to the company’s annual factbook.

Yamada didn’t give any details on possible new investments. In the news, Japanese trading firm Mitsui & Co. has begun seeking buyers for its 20% stake in a joint venture that operates coking coal mines in Queensland, according to a report in the Australian Financial Review, which didn’t name its sources.

Nippon Steel’s potential move to bolster its upstream presence underscores how energy price inflation is forcing companies to prioritize their short-term operational needs over longer-term ambitions to cut carbon emissions. Manufacturing steel is intensely pollutive. In both China and Japan, the world’s no. 1 and no. 3 producers, it’s estimated to account for around 15% of each country’s total emissions.

For its part, Nippon Steel has promised to become carbon neutral by 2050, a plan that involves making more steel from melting scrap and replacing coal with hydrogen. The first means an expensive switch to electric arc furnaces, while the second involves substantial investment in a technology that’s promising but still uncertain. Mindful of the costs of getting to net-zero, the company has lobbied the government for billions of dollars in state aid.

In the meantime, coal mines that were being shunned for their baleful impact on the atmosphere are being given a new lease of life. Nippon Steel’s interest coincides with BHP Group’s U-turn just last week on its plan to exit from thermal coal, the kind used by power plants. The Australian mining giant’s about-face came after surging prices made the assets more valuable and a shift in investor attitudes eased pressure on the company to stop digging up the dirtiest fossil fuel.

Still, Yamada expects the market for coking coal to remain tight. It’s mined in fewer places around the world than the more ubiquitous and cheaper thermal kind. Japan bought about 70 million tons last year, over half of which came from Australia. Moreover, the broad shift to net-zero makes it harder for miners to finance new projects, entrenching the dominance of producers like BHP Group.

Prices are more than twice where they were a year ago, and given the limited opportunities to expand supply, “it’s structurally difficult for coking coal prices to fall,” Yamada said.

The Japan Iron and Steel Federation, which represents more than 100 producers and traders including Nippon Steel, has warned there’s a mismatch between steel prices and the cost of the raw material, and has set up a team to investigate. In India, the second-biggest producer, the steel industry is seeking government help to check the soaring cost of the raw material, the Business Standard newspaper reported last week.

Part of the problem, according to Yamada, may be how coking coal prices are reflected in the market. Five years ago, the company switched to using price assessments as the basis for procuring supply because the spot market had grown too volatile. But China’s ban on imports of Australian coal in 2020 has significantly cut the number of deals struck and left pricing less liquid. It may mean that prices don’t “fairly reflect the supply-demand balance,” he said.

Nippon Steel has begun discussing the problem with its suppliers. Resolving the issue will involve either enhancing the credibility of index-linked pricing or finding an alternative, Yamada said.

(By Masumi Suga, with assistance from Swansy Afonso)

Eighth and last missing miner found dead in flooded Burkina Faso mine

Reuters | June 20, 2022 

Drillers underground at Trevali Mining’s Perkoa zinc mine in Burkina Faso.

 Credit: Trevali Mining

The body of the last of eight miners who drowned in a Burkina Faso zinc mine owned by Trevali Mining Corp when it flooded on April 16 was found on Monday, the government said.


The seven other bodies have been recovered gradually from the mine’s underground passages since May 24, when the first four were discovered.

Hopes of finding any survivors had already dissolved by then, as rescue teams had found no one inside a chamber in which there had been a slim chance that the eight missing miners who had not managed to resurface might have sought shelter.

“After 66 days of searching, the eight miners who disappeared after the flooding… have finally all been found dead,” the government said in a statement.

The victims were six Burkina Faso nationals, one Tanzanian and one Zambian.

The Perkoa mine was flooded after torrential rain fell unexpectedly during the West African country’s dry season.

Both the government and Canada-based Trevali have opened investigations into the incident.

(By Thiam Ndiga and Sofia Christensen; Editing by Sandra Maler)

Martian moon could be crucial for asteroid mining

Staff Writer | June 21, 2022 

Phobos. (Image by NASA).

Researchers at the Harvard-Smithsonian Center for Astrophysics have shown that mining the Main Belt of asteroids that orbit between Mars and Jupiter could be done profitably if spacecraft were deployed from a station in an orbit similar to that of the Martian moon Phobos.


In a paper published in the journal Planetary and Space Science, astronomers Martin Elvis, Jonathan McDowell, and past Harvard undergraduate Anthony Taylor explain that even though space mining will likely start with near-earth objects (NEOs) or asteroids whose paths cross the earth’s orbital path, it will eventually start looking at the Main Belt of asteroids, as it contains about 10,000 times more resources than NEOs.

However, profitable mining entails balancing more than just the cost of travelling across a distance, and any asteroid mining operation must take into account the expense of the rendezvous—slowing the spacecraft down once it arrives—as well as the cost of shipping the ore back to a processing facility.

The cost (and weight) of the fuel needed to rendezvous is among the most critical parameters in the feasibility calculation. It is mainly determined by the parameter “delta-V,” a measure of the kinematic requirement of accomplishing a spacecraft maneuver, and is usually cited in units of kilometres per second. A rendezvous with an especially favourable NEO from a spacecraft in low-earth orbit involves a delta-V of about four kilometres per second.

But accessing asteroids in the Main Belt typically involves a delta-V of about seven kilometres per second, which leaves them energetically very difficult to reach from the earth.

Phobos, however, orbits about six thousand kilometres from Mars’s surface and offers a lower delta-V to the Main Belt asteroids.

According to Elvis, McDowell and Taylor, Mars itself offers some added orbital advantages because unlike the earth, with a nearly circular orbit, Mars’s orbital eccentricity and inclination also provide a lower delta-V path to the asteroids.

The authors, thus, suggest two-burn and three-burn scenarios (referring to the number of rocket ignitions needed) to accomplish a rendezvous, and they develop a computer code to calculate the energetics for known asteroid orbital classes. The results show potentially very significant reductions in the costs of exploration.

Whether or not a mission ultimately makes financial sense depends on many other factors, but, in the researchers’ view, the concept of launching and then returning to an operations center based in a Phobos-like orbit, or even on Phobos itself, is relatively convenient and advantageous.

GNOMES OF ZURICH

Switzerland imports Russian gold for first time since war
Bloomberg News | June 21, 2022 

Swiss National Bank. Stock image.

Switzerland imported gold from Russia for the first time since the invasion of Ukraine, showing the industry’s stance toward the nation’s precious metals may be softening.


More than 3 tons of gold was shipped to Switzerland from Russia in May, according to data from the Swiss Federal Customs Administration. That’s the first shipment between the countries since February.

The shipments represent about 2% of gold imports into the key refining hub last month. It may also mark a change in perception of Russian bullion, which became taboo following the invasion. Most refiners swore off accepting new gold from Russia after the London Bullion Market Association removed the country’s own fabricators from its accredited list.

While that was viewed as a de facto ban on fresh Russian gold from the London market, one of the world’s biggest, the rules don’t prohibit Russian metal from being processed by other refiners. Switzerland is home to four major gold refineries, which together handle two-thirds of the world’s gold.

Almost all of the gold was registered by customs as being for refining or other processing, indicating one of the country’s refineries took it. The four largest — MKS PAMP SA, Metalor Technologies SA, Argor-Heraeus SA and Valcambi SA — said they did not take the metal.

In March, at least two major gold refineries refused to remelt Russian bars even though market rules permit them to do so. Others, such Argor-Heraeus, said they would accept products refined in Russia prior to 2022, so long as there were documents proving that the gold had not been exported from Russia after beginning of the war, and that accepting them would not benefit Russia, a Russian person or entity anywhere in the world.

Some buyers remain wary of Russian precious metals, including bars minted prior to the war which are still tradeable in western markets. In palladium, it’s created a persistent dislocation between spot prices in London and futures in New York, due to the greater risk of receiving ingots from Russia in the latter.

Switzerland has been importing small quantities of palladium from Russia — the world’s biggest miner of the metal — since April.

(By Eddie Spence)

FPX, Indigenous partner sign MOA for Decar nickel project in British Columbia

Staff Writer | June 21, 2022 | 

Decar nickel-iron project, British Columbia. Image by FPX Nickel

FPX Nickel (TSXV: FPX; OTC: FPOCF) has executed a new development memorandum of agreement (MOA) for the Decar nickel district with Binche Keyoh Bu Society, which represents the Keyoh families within the Binche Whut’en in central British Columbia.


FPX has had a longstanding memorandum of understanding (MOU) for Decar with the Tl’azt’en Nation, which included Binche Keyoh families, prior to the de-amalgamation of Binche from Tl’azt’en and formation of the Binche Whut’en in 2019.

The new MOA between FPX and the Binche Society formalizes protocols for continuing the co-operative working relationship established between FPX, the Binche Society, and constituent Keyoh families regarding exploration and development activities at Decar.

The MOA confirms the support by the Binche Society and constituent Keyoh families for offsite engineering and scientific studies and onsite field programs. It also describes how project activities will be managed with respect to cultural and environmental interests of the Binche Whut’enne, ongoing community consultation activities, and socio-economic benefits to the Binche community through capacity funding, and business and employment opportunities.

“Since the beginning of exploration activities at Decar in 2008, FPX has worked respectfully with the traditional Keyoh families of Binche Whut’enne and Tl’azt’enne to create shared value through employment and economic opportunities, while also being responsible stewards of the natural environment,” Martin Turenne, FPX’s president and CEO, commented.

“This agreement signifies that the Binche Whut’enne Keyoh families are recognized as the true title and rights holder that have the decision-making authority for their traditional family Keyoh territories,” Chief Dwayne R. Martin of Binche Whut’en added.

The Decar nickel district is FPX’s flagship project, covering 245 km2 of area in the Mount Sidney Williams ultramafic-ophiolite complex, located 90 km northwest of Fort St. James. Nickel-iron alloy mineralization has been identified in four target areas within this complex, with the main exploration focus being on Baptiste, which has shown promise for bulk tonnage, open pit mining.

Based on its most recent resource update (2020), the Baptiste deposit is estimated to contain 2 billion tonnes of indicated material, grading 0.12% nickel, for 2.43 million tonnes of contained metal.

Learn more about the Decar nickel district at www.FPXNickel.com.

Trudeau’s energy chief unveils low-carbon industrial strategy

Bloomberg News | June 21, 2022

Canada’s Minister of Natural Resources Jonathan Wilkinson. 

(Image courtesy of Province of British Columbia.)

Canada is launching an industrial strategy for its natural resources, with critical mineral infrastructure, hydrogen production and other low-carbon projects set to be a major focus.


The strategy, formally known as the Regional Energy and Resource Tables, will see Prime Minister Justin Trudeau’s government partnering with each province to “identify, prioritize and pursue opportunities.”

The rollout began this month in British Columbia and Manitoba in the west, and the east-coast province of Newfoundland and Labrador, with the program set to reach every other region by early 2023.

“It’s being a little bit more thoughtful about economic strategy,” Natural Resources Minister Jonathan Wilkinson said in an interview, describing the effort as an industrial strategy. “It’s about actually pulling together the kinds of resources, and looking at the kinds of processes that typically prohibit rapid movement towards securing those opportunities.”

Wilkinson, speaking via video-conference Monday, said the primary goal is to accelerate the energy transition from fossil fuels in each region, and to engage Indigenous groups and industry players on how to best achieve quick results.

The types of projects each region is keen to advance with the government is already becoming clear, the minister said.

In Newfoundland “we probably have at least six or seven large-scale hydrogen production projects using electrolysis, using wind, a number of which have been proposed by pretty credible counterparties and have relationships in Europe that would actually take the hydrogen,” Wilkinson said.

In British Columbia, officials are particularly interested in hydrogen, critical minerals and the electrification of heavy industry, Wilkinson said. In Quebec, it’s battery manufacturing and how the critical mineral supply chain can feed into it. In Ontario, electric vehicle production is likely to get attention. And in oil-rich Alberta, carbon capture projects will be key.

“Part of the job of this table will be prioritizing those, looking at where they’re at, are they ready, and looking at the tools that we could bring to the table,” the minister said.

He pointed out that one tool the government wields is, of course, money, with C$3.8 billion ($2.9 billion) already earmarked for critical minerals in the April budget.

On top of that, “we have a billion and a half dollars in the Clean Fuels Fund, we have eight billion dollars in the Net Zero Accelerator, we’re setting up the Clean Growth Fund, we have the Canada Infrastructure Bank,” he said.

Wilkinson emphasized that the focus needs to be on getting projects moving forward as soon as possible if the energy transition is going to happen at scale.

“The average mine takes 15 years to bring into production,” he said. “In the context of the energy transition, we don’t have 15 years if we’re actually going to provide enough of the minerals to be able to support just the battery development. So it behooves us to bring everybody into the room to figure out how to do it.”

Canada’s emphasis on critical minerals also aligns with the priorities of its neighbor and biggest trading partner, with the US hoping to shift its dependence away from rival nations like China for their supply. “What we can really contribute in a world of friend-shoring is critical metals and minerals and energy,” Finance Minister Chrystia Freeland said Monday alongside Treasury Secretary Janet Yellen after a joint meeting in Toronto.

(By Brian Platt)

Piedmont Lithium looks abroad amid North Carolina uncertainty

Reuters | June 22, 2022 

Piedmont lithium project, North Carolina. Image from Piedmont.

Piedmont Lithium Inc’s first steps toward securing lithium supplies will be in Quebec or Ghana, not the United States, as an intensifying North Carolina regulatory review delays the miner’s goal of anchoring America’s electric vehicle battery renaissance.


The delay has forced Piedmont to expand its strategy beyond its proposed North Carolina mine – a project it has touted as the best way to help secure American energy independence, but one that now faces a regulatory quagmire – and fund mines abroad.

“We think two of our projects will happen faster than our Carolina Lithium project: Quebec and Ghana,” said Chief Executive Keith Phillips. “The (North Carolina) regulators are doing a very good job. It’s a rigorous process. It’ll happen when it happens.”

Piedmont was founded in 2016 in Australia but moved its headquarters last year to North Carolina, where it hopes to dig a 500-foot-deep (150 m-deep) open-pit mine in a $988 million project that would be one of the largest US lithium mines.

The relocation was designed to be closer to EV manufacturing plants being built across the US South by Toyota, SK Innovation and others.

Piedmont signed a deal in 2020 to begin supplying Tesla Inc with lithium sometime between July 2022 and July 2023 from the North Carolina mine, but last year delayed the first shipments without a definitive date for when deliveries could begin.

Reuters reported last summer that Piedmont’s chaotic roll out of that plan – in which it wooed Wall Street and Tesla before local residents – had fueled concerns about levels of dust, noise and vibrations in the area just outside Charlotte.

Those issues are now the focus of the state mining review process that officials and the company itself acknowledge has no clear end date. Piedmont does not have an expectation for when its North Carolina facility will open.

As opposition to the North Carolina mine grew, Piedmont invested last year in Quebec-focused Sayona Mining Ltd and Ghana-focused Atlantic Lithium Ltd.

Meanwhile, Albemarle Corp, the world’s biggest lithium miner, is hiring staff and buying land in a neighboring North Carolina county as it mulls re-opening a mothballed spodumene lithium mine that would compete directly with Piedmont.

Regulatory questions

North Carolina regulators asked Piedmont in January for more detail on 12 points they felt were not adequately explained in the company’s mining permit application, according to regulatory filings.

Regulators asked Piedmont to explain how the proposed mine could affect water table levels, as well as how to modify mine site blasting on cloudy days to limit dust that could affect a nearby airport’s operations.

The state additionally has “many concerns” about Piedmont’s plans to discharge chemicals into the public sewer system, according to the filings, and archaeologists have recommended that Piedmont erect a 25-foot buffer around four cemeteries at the mine site, a step that could force the company to change its development plans.

Piedmont has until July 13 to respond.

While investor appetite for lithium stocks has been high in recent years, Piedmont has outperformed even among peers, hitting a record high near $80 this past spring before softening. In March, it booked $130.8 million in a secondary stock offering.

Seven analysts rate Piedmont stock a “buy” with all expecting it to trade higher, according to Refinitiv Eikon.

Piedmont said it has applied for US Department of Energy loans, although the company would need to have its North Carolina permits before it would receive government support. The funds could not be used to dig mines in Quebec or Ghana.

In January 2021, Piedmont bought a roughly 20% stake in Sayona and its Quebec lithium projects. First production is expected next year.

Piedmont also took a 9% stake in Ghana-focused Atlantic Lithium, and committed to spending $17 million on a feasibility study and $70 million on building Atlantic’s Ewoyaa lithium project.

The market value of both investments has surged in the past year due in part to rising lithium prices. Piedmont will not operate the mines in Quebec or Ghana but has agreed to buy at least half of each company’s production of a lightly processed type of lithium known as spodumene concentrate.

“The potential for Piedmont to generate cash flow as early as 2023 is being overlooked by the market,” said Canaccord Genuity analyst Reg Spencer, referring to Quebec.

Albemarle looms

Pushback from residents and regulators is not Piedmont’s only problem in North Carolina.

Albemarle, which supplies Tesla, appears set to reopen its Kings Mountain, North Carolina, mine in a mining-friendly county near Piedmont’s proposed site.

In March, it bought 60 acres (25 hectares) that abut that mine site, hinting at the company’s future expansion plans. Albemarle has also recently posted job openings to help run the facility.

Albemarle is conducting initial geological tests and the project could open by 2027, spokesperson Kim Ronkin Casey said.

Lithium produced from spodumene rock can be used to make lithium hydroxide, which is prized by EV battery manufacturers partly because it holds a charge longer than the more-common lithium carbonate.

The United States does not have an active lithium spodumene mine, so the first one to open will garner huge interest from the country’s nascent battery sector.

Albemarle said it has been sharing its plans widely with the local community, taking the opposite tack from Piedmont, which purposefully did not approach local residents with its plans for years.

“There’s a lot of work we’re doing also with the community,” said Eric Norris, head of Albemarle’s lithium division. “We’ve engaged them very early on.”

(By Ernest Scheyder; Editing by Amran Abocar and Marguerita Choy)

Vale to spend $400 million in 2022 to remove tailings dams

Reuters | June 21, 2022 | 

Aftermath of Vale’s dam collapse in Brumardinho, Brazil. 

(Image by Vinícius Mendonça/Ibama, Wikimedia Commons.).

Brazilian miner Vale SA expects to spend $400 million in 2022 to decommission its tailings dams, aiming to have 12 of its 30 structures eliminated by the end of the year, the company told Reuters on Tuesday.


The dam elimination program, which began four years ago, has already cost the company $857 million of the $4 billion it projects to spend by 2035 in an effort to eliminate existing structures that could cause disasters like those in Brumadinho and Mariana, in Brazil’s Minas Gerais state.

Tailings dams are structures that contain mining waste. The breach of one in Brumadinho in 2019 killed 270 people and resulted in a wave of mining tailings impacting the region.

So far, seven structures have been eliminated, four in Minas Gerais and three in Para state. By the end of the year, another five in Minas Gerais will be decommissioned, according to the company.

The 12 dams Vale expects to eliminate by December represent a total volume of 46.9 million cubic meters of tailings.

(By Rafaella Barros and Peter Frontini; Editing by Bill Berkrot)

Electra begins talks on second cobalt refinery in Quebec

Staff Writer | June 22, 2022 | 

Electra Battery Material’s cobalt refinery site northeast of Cobalt, Ontario. 

Credit: First Cobalt

As part of its growth strategy in support of the onshoring of electric vehicle supply chains in North America, Electra Battery Materials (NASDAQ, TSXV: ELBM) has begun preliminary discussions with the government of Québec to build a new cobalt refinery in Bécancour that will integrate with an emerging battery materials park in the province.


Electra has been focused on creating North America’s first integrated battery materials park near the town of Cobalt, Ontario, which includes a hydrometallurgical cobalt refinery that is on track for commissioning by year-end. Once complete, it will be one of two major cobalt sulphate refineries located outside China, with target production of 6,500 tonnes of cobalt (from 32,500 tonnes of cobalt sulphate) annually.

The company will look to complete, in different stages, a battery materials recycling plant, a modular nickel sulphate plant and a battery precursor materials plant to complete its Ontario battery park.

“Given a forecasted deficit in domestic cobalt sulfate production by 2025, we have received significant interest from industry and government stakeholders to build a second refinery in North America,” Electra’s CEO Trent Mell said in a news release.

“The industrial park in Bécancour, Québec, is quickly becoming an important future hub for EV battery materials in North America given its numerous advantages, including a deep-water port, extensive infrastructure, hydro-electric power, strong support from the Québec government, and a qualified work force,” Mell said.

Global commitments

According to Electra, the Bécancour industrial park has already attracted commitments and investments from global automotive and chemical processing companies to establish facilities to produce precursor cathode active materials (PCAM) and cathode active materials (CAM) essential in the production of lithium-ion batteries.

In support of the preliminary discussions with the Québec government, the company plans to undertake a study to determine annual production requirements for the industrial park, capital costs for the refinery, flow sheet modifications for alternate sources of feed material, permitting requirements, synergies from integration with other battery materials companies in Bécancour, and potential funding opportunities from the federal and provincial governments. This study is expected to be completed by the end of 2022.

Earlier this year, the Canadian government earmarked C$3.8 billion towards the development of a Critical Minerals Strategy. Electra’s Ontario refinery – as well as other parts of its first battery materials park – has already received financial support from the provincial government.

De Beers sale shows stronger US and Chinese demand

Cecilia Jamasmie | June 22, 2022 

Prices for small rough diamonds, the type that would end up clustered around the solitaire stone in a ring, are climbing. (Image courtesy of Anglo American | Flickr.)

De Beers, the world’s top diamond producer by value, saw improved sales in its latest auction, despite moving into the summer, which is generally considered a weaker period for roughs demand.


The Anglo American unit sold $650 million of diamonds in its fifth sale of 2022, slightly up from $604 million at the previous event this year, but higher than the $477 million it sold this time last year.

De Beers sells its gems through 10 sales each year in Botswana’s capital, Gaborone, and the handpicked buyers — known as sightholders — generally must accept the price and the quantities offered.

Around 60 handpicked customers are given a black and yellow box each time. These contain plastic bags filled with stones, with the number of boxes and quality of diamonds depending on what the buyer and De Beers had agreed to in an annual allocation.

Prices for small diamonds, those that usually end up clustered around a solitaire stone in a ring, have soared since early April, when Russia’s Alrosa (MCX: ALRS) was targeted by US sanctions related to Russia’s invasion of Ukraine.

De Beers chief executive Bruce Cleaver noted that diamond jewellery sales have been moving in the opposite direction to most other commodities on strong US demand and the reopening of retail outlets in China following covid-triggered lockdowns.