Russia Announces 82-Million-Ton Arctic Oil Discovery

By Julianne Geiger - Jul 04, 2022,

• Russian oil and gas giant Rosneft claims to have made an 82-million-ton oil discovery in the Pechora Sea.
• 
  
• Rosneft has a controlling interest in 28 offshore licenses in the Arctic including 8 in the Pechora Sea where this most recent discovery was made.
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• Western analysts have speculated that Russia doesn’t have the expertise or technology to grow oil production in the region, but the head of Rosneft believes they do.

Russian state-run Rosneft has confirmed an 82-million-ton oil discovery in the Pechora Sea in the Arctic.

Rosneft discovered the field thanks to a drilling campaign in the Medynsko-Varandeysky area. “During the tests, a free flow of oil was obtained with a maximum flow rate of 220 cubic meters a day,” the company’s statement read on Wednesday, noting that the “oil is light, low-sulfur, low viscosity,” Rosneft said, describing the drilling campaign in the Medynsko-Varandeysky area, as reported by Russian RT. 

Rosneft described the findings as proving “significant oil potential of the Timan-Pechora province on the shelf.” 

According to Russian media, Rosneft has a controlling interest in 28 offshore licenses in the Arctic, eight of which are located in the Pechora Sea.

The discovery announcement comes after Rosneft head Igor Sechin, a close ally of Russian President Vladimir Putin, told an economic forum on Friday that Western sanctions are illegal, warning of a coming biblical-style cataclysm. 

In mid-June, Rosneft said it was going ahead with its Vostok Oil project in the Arctic, which Sechin has described as “the only project in the world that can bring a stabilizing effect on the oil market.” 

According to Rosneft, Vostok will produce up to 115 million tons of oil per year by 2033. That volume of oil is said to be equivalent to 20 percent of Russia’s total oil production for 2021. 

While Western analysts have speculated that Russia will not have the necessary technology under sanctions to grow oil production, Sechin has disagreed, despite the exit of partner Trafigura earlier in June. 

“We have all needed competences, knowledge and experience, and in these kind of projects 98 percent of technology is produced in Russia,” Sechin told reporters in reference to the Vostok Oil project. 

Trafigura Group said in mid-June that it planned to sell its 10-percent stake in Vostok Oil, for which it paid around $8.5 billion in the fourth quarter of 2020, Bloomberg reported. 

The discovery announcement also follows Putin’s decision on July 1st to seize control of the Sakhalin-2 oil and gas project in which Shell is an investor, along with Japanese investors, Reuters reported. 

Mining Industry Warns Energy Transition Isn’t Sustainable

By Irina Slav - Jul 03, 2022,  Oilprice.com

• There is a glaring problem in the energy transition that not many people are acknowledging. 
• 
  
• It is being built on the back of finite resources, and the mining industry is already warning that there aren’t enough metals for all the batteries the transition will require.
• 
  
• Because of the short supply, prices are on the rise, as are prices across commodity sectors.

The energy transition has been set by politicians as the only way forward for human civilization. Not every country on the planet is on board with it, but those that are have the loudest voices. And even amid the fossil fuel crunch that is beginning to cripple economies, the transition remains a goal. It is no secret that the transition—at the scale its architects and most fervent proponents envisage it—would require massive amounts of metals and minerals. What does not get talked about so much is that most of these metals and minerals are already in short supply. And this is only the start of the transition problems.

Mining industry executives have been warning that there is not enough copper, lithium, cobalt, or nickel for all the EV batteries that the transition would require. And they have not been the only ones, either. Even so, the European Union just this month went ahead and effectively banned the sales of cars with internal combustion engines from 2035. 

“Rare earth materials are fundamental building blocks and their applications are very wide across modern life,” a senior VP at MP Minerals, a rare-earth miner, told Fortune this month. He added that “one third of the demand in 2035 is not projected to be satisfied based on investments that are happening now.”

Because of the short supply, prices are on the rise, as are prices across commodity sectors. According to a calculation by Barron’s, the price of a basket of EV battery metals that the service tracks has jumped by 50 percent over the past year as a result of various factors, including Western sanctions against Russia, which is a major supplier of such metals to Europe.

The combination of short supply and rising prices is, of course, making the energy transition even costlier than it has been projected to be. It has also reminded us all that because of these metals and minerals, which are exactly as finite as crude oil and natural gas, the transition is not towards a renewable-energy future. It is towards a lower-carbon future. And this future may perpetuate some of the worst models of the past we want so much to leave behind.

A lot of the battery metals that the energy transition needs are sourced from Africa, a continent fraught with poverty, corruption, and political uncertainty. It is also a continent that is currently threatened by a new sort of colonialism because of the energy transition.

In a recent analysis for Foreign Policy, Cobus van Staden, a China-Africa researcher from the South African Institute of International Affairs, wrote that the dirty secret of the green revolution is its insatiable hunger for resources from Africa and elsewhere that are produced using some of the world’s dirtiest technologies.

More importantly, van Staden added, “What’s more, the accelerated shift to batteries now threatens to replicate one of the most destructive dynamics in global economic history: the systematic extraction of raw commodities from the global south in a way that made developed countries unimaginably rich while leaving a trail of environmental degradation, human rights violations, and semipermanent underdevelopment all across the developing world.”

It is difficult to argue with this forecast if you know the history of resource exploitation in Africa. Sometimes called “the resource curse” and commonly used for oil, it has been in fact, a notable feature of the colonial and post-colonial period. Van Staden notes human rights violations, corruption, and the perpetuation of low labor and environmental standards, and he also notes that pretty much all foreign businesses in Africa’s mining sector are doing all this.

Based on this evidence, it appears that besides non-renewable, the energy transition appears to not be very socially conscious. In other words, the ESG investment movement, which focuses on transition companies, might, in fact, be a movement that rewards companies that are neither very environmentally nor socially friendly. At least not in Africa. And there are no white hats because, as Van Staden says, “The entire logic of the battery metals race is to secure national prosperity at home—not in Africa.”

It could perhaps be argued that unlike the last time—the Industrial Revolution—this time, we have a lot more mechanisms to protect human rights. As true as that may be, there hasn’t been a lot of progress on that in the Democratic Republic of the Congo, for example, a huge country that is key for the transition because of its cobalt wealth.

Even with these mechanisms, there is no way to eliminate corruption unless all involved don’t want to eliminate it, which appears not to be the case with mining companies and resource-rich African governments. That’s the problem with corruption; it is hard to uproot. Corruption, in turn, affects environmental standards and fair compensation for workers, and the resource curse keeps its stranglehold on the continent.

The good news is that all these problems with the transition were more or less taboo until recently. Now they are being talked about more and more, and this would hopefully lead to a readjustment of goals or at least timelines to make them more realistic. Maybe, just maybe, the just transition idea will gather speed as well.

Top U.S. LNG Producer Wants Exemption From Pollution Limit

By Tsvetana Paraskova - Jul 08, 2022,

Cheniere Energy, the largest LNG producer in the U.S., has requested from the Biden Administration an exemption from an EPA pollutant limit on the gas-fired turbines it uses, so it won’t be forced to shut some capacity, Reuters reported on Friday, quoting documents it had reviewed.

The Environmental Protection Agency (EPA) includes, as of August, two types of stationary gas-fired turbines in the rule for limits on air pollutants such as formaldehyde and benzene. Cheniere, the top American LNG exporter, uses such turbines at its facilities in Texas and Louisiana, and has asked the EPA this spring to exempt it from the rule. That’s because the turbines cannot easily be fitted with pollution control equipment, Cheniere says.

In one letter to the EPA in March, seen by Reuters, the company says:

“Potentially imposing significant costs and operational disruption on the U.S. LNG industry at the same time the administration is focused on Europe’s strategic need to break its reliance on Russian gas is counterproductive.”

The request would be a dilemma for the Biden Administration, which seeks to limit emissions at home and, at the same time, help EU allies replace as much Russian pipeline natural gas as soon as possible.

A slowdown in U.S. LNG shipments is the last thing Europe needs right now as it scrambles to get any non-Russian gas to stock up ahead of the winter.

The EU has been importing record volumes of American LNG in recent months, although analysts say LNG imports alone cannot replace Russian pipeline gas.

For the first time ever, the European Union imported in June more LNG from the United States than gas via pipeline from Russia, as Moscow slashed supply to Europe earlier this month, Fatih Birol, Executive Director of the International Energy Agency (IEA), said last week.

“Russia’s recent steep cuts in natural gas flows to the EU mean this is the 1st month in history in which the EU has imported more gas via LNG from the US than via pipeline from Russia,” Birol tweeted last week.

By Tsvetana Paraskova for Oilprice.com

Shell Continues Exporting LNG From Australian Facility Despite Strike

By Irina Slav - Jul 08, 2022, 

Shell continues to load liquefied natural gas from the offshore Prelude facility in Australia despite industrial action, Reuters has reported, citing the company.

According to the report, Shell has loaded and shipped a tanker of LNG from Prelude this week.

The supermajor warned a week ago there would be loading disruptions at Prelude because of a workers' strike that has reduced the rate of operation at the facility.

"We have issued a notice to customers that cargoes will be impacted until at least mid-July due to the industrial action," Shell said on June 29.

The floating LNG production facility in northwestern Australia has an annual capacity of 3.6 million tons.

The news of a halt to operations adds to an already difficult situation for gas importers after Russia reduced the flow along the Nord Stream 1 pipeline by 60 percent, and an explosion took the Gulf Coast Freeport LNG out of commission for at least three months.

According to Reuters, at normal rates, Prelude LNG loads one tanker every 7 to 10 days. Now, operations have been scaled down as workers dispute wage terms with the supermajor. A vote on a new proposal by Shell is expected at the start of next week.

News of the industrial action emerged in early June, just two months after Shell restarted operations at the facility after a four-month suspension resulting from a large-scale power failure. The outage contributed to the gas price rise in Europe that began last year.

The Prelude FLNG facility, which shipped its first cargo in 2019, is one of a series of massive-scale LNG projects in Australia that allowed the country to briefly take the crown of top world LNG exporter from Qatar a while ago.

Currently, Australia's total LNG capacity is on par with Qatar's, with the country shipping 77.7 million tons of the superchilled fuel abroad last year.

By Irina Slav for Oilprice.com

HIGH ENERGY USE

Microwaves efficiently extract manganese, zinc from spent batteries

Staff Writer | July 8, 2022 | 

Crystallized electrolyte of a leaked alkaline cell. (Reference image by Túrelio, Wikimedia Commons).

Researchers at Japan’s Ritsumeikan University are proposing the idea of a distributed recycling system that uses microwave heating for extracting metals from old alkaline batteries.


Distributed recycling systems involving small-scale recycling facilities offer a sustainable alternative to conventional recycling systems as they can greatly reduce the energy requirements for transportation and, thus, have the potential to increase recycling rates.

While this system is still in its infancy, many studies have explored its use in recycling plastics, photovoltaic waste, and wastewater, with particularly promising outcomes in distributed plastic recycling.

Given such outcomes, the Ritsumeikan researchers thought it may be possible to implement similar processes for spent alkaline batteries.

“The feasibility of decentralizing the recycling of e-waste needs to be analyzed, considering the different characteristics of each municipality,” said Shoki Kosai, a member of the research team and the first author of the paper that presents this proposal.

The study introduces a system that employs microwave irradiation, which offers selective, rapid heating and reduced energy consumption compared to furnace-based heating.

First, the researchers conducted an empirical study to explore the usability of this microwave-based technique in recycling spent alkaline batteries. Then, they conducted an analytical case study to examine the effectiveness of distributed recycling systems in 1,710 municipalities in Japan.

To test the effectiveness of the proposed recycling system, the scientists used energy consumption and greenhouse gas emissions as metrics.

The empirical analysis showed that microwave-based heating achieved a recovery rate of 97% of manganese oxide and zinc from the alkaline batteries. This recovery rate is 1.5 times higher than what’s obtained through conventional electric furnace-based heating while taking only half of the time.

The analytical study also revealed positive results, as the team noted that a balance between centralized and distributed recycling systems can reduce annual energy consumption and greenhouse gas emissions across Japan by 26,500 GJ and 1.54 Gg-CO2eq, respectively.

“Through the adoption of this system, areas where natural resources are not available will gain the opportunity to become suppliers of secondary resources,” Kosai said. “This system could also remedy the problem of metal recycling in developing countries.”

Chile helps Dominican Republic identify lithium deposits

Cecilia Jamasmie | July 8, 2022 |

Dominican Republic has set up a special senate committee to investigate how best to commercialize and develop potential lithium resources. (Reference image by Ben Kucinski |Flickr Commons.)

Chilean experts from the mining ministry and the geology service Sernageomin met members of the Dominican Republic’s senate this week to outline terms of a cooperation agreement aimed at helping the Caribbean nation identify possible lithium deposits.


“We have already conducted campaigns about… lithium in provinces including Barahona and Bahoruco, in zones where there are salt flats, and we hope to continue designing an effective investigation program,” Dominican Republic’s mining director, Rolando Muñoz said in a news release.

A second meeting is planned to discuss the sampling process, the senate’s special committee president, Iván Silva, said.

Lithium consumption has nearly quadrupled since 2010, boosted mostly by an uptake in electric vehicles demand. The industry is expected to dominate demand for the battery metals, accounting for almost three quarters of lithium consumption by 2030, up from 41% in 2020.

Demand associated with cell phones, computers and tablets and other consumer goods will reach 411,000 tonnes in 2030, compared with the 79,000 tonnes expected for this year, Chilean copper agency Cochilco estimates.

Most of known deposits of lithium in Latin America are in the “lithium triangle” a region shared with neighbouring Chile and Bolivia. This area which contains nearly 56% of the world’s resources of the metal, according to the most recent figures from the United States Geological Survey (USGS).

Australia is the world’s largest producer of lithium.

Earth’s mineral diversity 75% greater than previously thought

Staff Writer | July 5, 2022 | 

Nature has used 21 different ways over the last 4.5 billion years to create pyrite. (Image by ARKENSTONE/Rob Lavinsky, courtesy of the Carnegie Institution for Science).

Researchers at the Carnegie Institution for Science developed a method for clustering (lumping) kindred species of minerals together or splitting off new species based on when and how they originated, a novel approach that explains the origins and diversity of every known mineral on earth.


In two papers published in American Mineralogist and sponsored in part by NASA, the scientists point out that their findings help reconstruct the history of life on earth, guide the search for new minerals and ore deposits, predict possible characteristics of future life, and aid the search for habitable planets and extraterrestrial life.

The International Mineralogical Association recognizes more than 30 “species” of tourmaline, but the new papers acknowledge only a handful of “mineral kinds.” (Image by ARKENSTONE/Rob Lavinsky, courtesy of the Carnegie Institution for Science).

According to co-authors Robert Hazen and Shaunna Morrison, once mineral genesis is factored in, the number of “mineral kinds” — a newly-coined term — totals more than 10,500, a number about 75% greater than the roughly 6,000 mineral species recognized by the International Mineralogical Association on the basis of crystal structure and chemical composition alone.

Another key finding of the 15-year scientific effort is that more than 80% of the earth’s minerals were mediated by water, which is, therefore, fundamentally important to mineral diversity.

By extension, this explains one of the key reasons why the Moon and Mercury and even Mars have far fewer mineral species than earth.

“The work also tells us something very profound about the role of biology,” Hazen said in a media statement. “One-third of earth’s minerals could not have formed without biology – shells and bones and teeth, or microbes, for example, or the vital indirect role of biology, such as by creating an oxygen-rich atmosphere that led to 2,000 minerals that wouldn’t have formed otherwise.” 
Many roads lead to…fool’s gold

The paper also notes that nature created 40% of earth’s mineral species in more than one way – for example, both abiotically and with a helping hand from cells – and in several cases used more than 15 different recipes to produce the same crystal structure and chemical composition. Those recipes ranged from near-instantaneous formation by lightning or meteor strikes, to changes caused by water-rock interactions or transformations at high pressures and temperatures spanning hundreds of millions of years.

Among those minerals with a number of different recipes is pyrite, aka fool’s gold, for whose creation nature came up with 21 different methods over the last 4.5 billion years. Pyrite forms at high and low temperatures, with and without water, with the help of microbes and in harsh environments where life plays no role whatsoever.

Composed of one part iron to two parts sulphide (FeS2), pyrite is derived and delivered via meteorites, volcanos, hydrothermal deposits, by pressure between layers of rock, near-surface rock weathering, microbially-precipitated deposits, several mining-associated processes and many other means.
Rare elements

The studies also found that rare elements play a disproportionate role in the planet’s mineral diversity. Just 41 elements — together constituting less than 5 parts per million of earth’s crust — are essential constituents in some 2,400, or over 42%, of earth’s minerals. The 41 elements include arsenic, cadmium, gold, mercury, silver, titanium, tin, uranium, and tungsten.

In addition, much of the planet’s mineral diversity was established within its first 250 million years, with the oldest known minerals being tiny, durable zircon crystals, almost 4.4 billion years old.

There are also almost 300 minerals that are thought to pre-date earth itself. Of these, 97 are known only from meteorites, with the age of some individual mineral grains estimated at 7 billion years, which is billions of years before the origin of our solar system.

Mining, on the other hand, has also played a role in the creation of minerals — over 500 species of them. Of these, almost half were formed by coal mine fires.
How they did it

To reach their conclusions, Hazen and Morrison built a database of every known process of formation of every known mineral. Relying on large, open-access mineral databases, amplified by thousands of primary research articles on the geology of mineral localities around the world, they identified 10,556 different combinations of minerals and modes of formation.

In all, minerals have come into being in one or more of 57 different ways.

The goal behind all this work was to understand how the diversity and distribution of minerals have changed through deep time and to propose a system of mineral classification that reflects mineral origins in the context of evolving terrestrial worlds.

Canada’s first rare earths producer reports first run at plant beats expectations

Staff Writer | July 8, 2022 | 

Vital Metals became the first rare earth producer in Canada by starting ore production from the Nechalacho project in the Northwest Territories in June 2021. Credit: Vital MetalsVital Metals (ASX: VML) has reported that results from the first feed of the dense media separation (DMS) unit at its Saskatoon rare earths extraction facility in Saskatchewan, Canada, is comparable to the TREO grade achieved from laboratory metallurgical testwork in its first run.


The company is the first rare earth producer in Canada and the second in North America, besides California’s Mountain Pass mine. Vital is processing ore from the company’s Nechalacho operation in Canada’s Northwest Territories, where mining began in mid-2021.

Vital’s Saskatoon plant will have initial throughput capacity of 1,000 tonnes per year of rare earth oxide (REO) excluding cerium, which is equivalent to ~470t NdPr/year.

Results show the DMS plant Sinks achieved comparable grades to those seen in testwork, with 43.7% total rare earth oxide (TREO) achieved from the DMS Cyclone at Saskatoon, compared to 44.6% TREO achieved in laboratory conditions at SGS.

The DMS unit also achieved 75.2% recovery in its first run for a single pass, processing ~2,300kg of concentrate mined at Vital’s Nechalacho rare earth project, sorted onsite and then crushed at the Saskatchewan Research Council (SRC) facility adjacent to Vital’s Saskatoon plant as part of a rare earths hub.

“The fact that on the first run we hit the laboratory test grades for total rare earths with 75% recovery with low grade feed material is above expectations,” Vital Metals managing director Geoff Atkins said in a media statement.

“There will be work to do with optimising our process over the coming months but these initial results demonstrate incredible potential. It gives us a great level of confidence for future commissioning activities through the remaining process,” Atkins said.

“We look forward to continuing our commissioning process with the production of our 2.5T qualification sample followed by production ramp-up.”

Political changes boost risk for miners in Latin AmericaCecilia Jamasmie | July 7, 2022 
Since leftist President Pedro Castillo took office, the number of social conflicts has increased by more than 7%. (Image courtesy of FrenteGuasu | Twitter.)IT'S BECAUSE THE PARLIAMENT HAS A RIGHT WING DOMINANCE

A rising demand to participate in the revenues from natural resources, tougher environmental protection rules and changes to laws are increasing risks for mining and energy companies across Latin America, even in countries once considered safe investment destinations, a new study shows.


According to the 2022 Latin America Mining Risk Index, published by consultancy Americas Market Intelligence (AMI), once investors’ darling – Chile – now presents more risks, but it remains the most welcoming jurisdiction for miners in the region.

The world’s top copper producer, where global copper giants like Codelco, BHP, Anglo American, Albemarle and Antofagasta have mines, scored 68 out of a maximum of 70 points in AMI’s ranking, which places it at the top.

The higher the overall score, the better a jurisdiction is for mining investment because the risks are not as acute, the authors explain.

The nation is redrafting its market-orientated constitution, which dates back to the military dictatorship of Augusto Pinochet. It will hold a nationwide referendum vote on the new text in September, which could bring a full ban to mining in glaciers, many of which are adjacent to lithium deposits.

The new constitution may also include mandatory community prior consent on new concessions near indigenous land claims and the end to ownership of water within concession boundaries, replaced by a water permitting process.

The consultants use a proprietary approach that divides risk into seven overlapping categories, namely political interference, economic pressure, community opposition, legal and regulatory instability, reputational risk, safety and security and operational risk.

Perhaps surprisingly in light of recent community opposition-driven turmoil, Peru is the second most welcoming jurisdiction, with 61 points and 80 projects on hold.

The mining industry blames President Pedro Castillo for the recent wave of social unrest, which has taken a toll on production. Since the former rural activist from a Marxist party took office, the number of social conflicts is up about 7% as the administration is prioritizing the right to protest over other concerns such as free transit.

“Peru’s political class has generally understood the economic importance of mining and has promoted it accordingly,” Alejandro Alvarez, one of the authors, told MINING.COM.

“This may change in next year’s edition of the ranking if the Castillo administration does not manage to harmonize community opposition and social demands with the intrinsic importance of the industry to the country’s economy,” Alvarez added.
Source: The 2022 Latin America Mining Risk Index. (Note: the higher the better)

Argentina, with 56 points, is the third best country for miners and energy firms in Latin America.

The country has attracted over the past year major players, including the world’s second largest miner Rio Tinto and South Korean steelmaker Posco.

Economic pressure may hinder some of the expected growth in the industry, as an ever-present fiscal crisis in Argentina pushes the government to raise taxes on its natural resource sectors, including mining, the report reads.

Brazil holds the fourth position, with 54 points. The country’s diverse geography, history, and people, combined with its decentralized political system, makes it challenging to analyze risk on a national level, the authors of the index say.

They highlight an increasing number of projects in the Amazonian basin, thanks to concessions given by President Jair Bolsonaro, which have drawn global criticism.

Costs are other issues in Brazil, as almost everything is more expensive in Brazil than in the rest of Latin America, the authors say. Logistical costs in the country are, according to the report, 50% higher than in Canada.

On top of that, in some Brazilian states like Bahia, security is of grave concern, mostly due to drug trafficking.

Completing the “top five” countries is Panama, with 53 points. First Quantum’s Cobre Panamá put the country on the map by developing the world’s third-largest mine. With little mining history, Panama is only now waking to the industry’s potential, the report reads.Cobre Panama copper mine put the Central American country in the mining map. (Image: First Quantum Minerals.)
The nation’s mining code, written in 1963, is outdated and fails to incorporate today’s best practices. Key issues that need to be addressed include adherence to best environmental stewardship practices, such as water, waste, and biodiversity management, the study says.

The mining risk index assigns a lower numeric value to countries with adverse environments to miners and investors. Based on that metrics, Venezuela, Bolivia and Honduras rank last across all categories, including heightened security, regulatory instability and operational concerns.

The authors of the ranking warn mining investors that country risk is only one of many factors to be considered ahead of project investment or lending.

Of equal or greater importance is the local investment climate, including interests of local stakeholders, fears and aspirations of local communities, the rule of law and security environment, as well as the historical relationship between the local community and national authorities, among other issues, they say.

The report also highlights that most obstacles to mining projects Latin America currently originate from local, not national, issues.