Norwegian sovereign wealth fund to support Teck Resources plan to split business

STEELWORKERS LOCAL SUPPORTS SPLIT

The Canadian Press

Norway's sovereign wealth fund will vote to support Teck Resources Ltd.'s plan to split the company's metals and steelmaking coal businesses into two separate companies at a key shareholder meeting next week. 

The decision comes as Teck works to secure support for its plan over an unsolicited takeover proposal by Swiss company Glencore, which is urging shareholders to reject the company's proposal in favour of its offer to acquire the company.

Glencore has said it cannot pursue its bid if Teck's plan to separate its businesses goes ahead since it would add significant complexity to the deal. 

Norges Bank Investment Management, which manages Norway's Government Pension Fund Global, published its voting intentions as part of its routine disclosures on its website. It held a roughly 1.5 per cent stake in the Canadian mining company as of the end of 2022.

The United Steelworkers (USW), the union which represents over 4,000 Teck employees in B.C., has also come out in favour of Teck's planned split into Teck Metals and Elk Valley Resources.

In a statement on Thursday, USW District 3 director Scott Lunny said Teck supports the economies of numerous B.C. communities in which it operates, including Logan Lake, Sparwood, Elkford and Trail.

 "Management has briefed the union on their plans and our union believes the plan to split into two, B.C.-based companies is in the best interest of our members at the metals operations and at the coal mines," Lunny said.

"This is a well-thought-out plan that will create two strong companies willing to work with us and British Columbians to become ESG leaders, provide stability and certainty for our members, provide ongoing benefits to Indigenous nations, and invest in B.C.”

Teck announced in February a proposal to split up its metals and steelmaking coal businesses into two companies, Teck Metals and Elk Valley Resources. The change requires approval by a two-thirds majority vote by the class A shareholders as well as approval by a two-thirds majority vote by the class B shareholders. 

Teck shareholders will vote on the separation plan at a meeting on April 26.

This report by The Canadian Press was first published April 21, 2023.

Sumitomo Metals backs Teck’s split plan

Cecilia Jamasmie | April 20, 2023 | 

Teck owns 60% of Quebrada Blanca Phase 2 project and Sumitomo Metal Mining, together with Sumitomo Corporation, have a collective 30% interest. (Image courtesy of Teck Resources.)

Japan’s Sumitomo Metal Mining (SMM) confirmed on Thursday its support for Teck Resources’ (TSX: TECK.A, TECK.B) (NYSE: TECK) planned spinoff into two companies in the face of an alternative proposal from Glencore (LON: GLEN), which wants to buyout Canada’s largest diversified miner.


The company, one of Teck’s top shareholders, holds 18.9% of the Class A shares and 0.1% of the Class B shares of Teck. It also has a 49% stake in Temagami Mining, which itself holds 55% of Teck’s Class A shares.


The Vancouver-based mining giant operates under a dual-class structure, in which Class A shares are each worth 100 votes. Class B shares are worth one vote each.

SMM and Teck have a decades-long partnership in mining, including the joint development and construction of the Pogo gold mine in Alaska, and the Quebrada Blanca copper mine in Chile.


Teck is trying to get backing for its proposed restructuring ahead of a shareholder vote on the proposal on April 26. It wants to to split up its metal and steelmaking coal businesses into two companies, Teck Metals and Elk Valley Resources.

POSCO, both a customer and a JV partner with Teck on its Elkview and Greenhills operations, as well as China Steel Corporation, are among the shareholders that have backed the Canadian miner in the last 24 hours.

Glencore published on Wednesday an open letter to Teck shareholders, saying it was open to talk improvements to its proposal directly with Teck shareholders if the board continued to rebuff its offer.


The Canadian company quickly replied by saying that Teck has previously engaged “extensively” with Glencore – for six months on “essentially the same proposal” – and repeatedly determined it is not in the best interest of its shareholders.

Glencore’s initial bid represented a 20% premium to Teck’s March 26 closing price, when it was privately made.

The Swiss miner and commodities trader has indicated it could raise its current $23 billion bid if shareholders vote against Teck’s plans next week.

Sumitomo Metal Mining Co. Ltd., a key shareholder at Teck Resources Ltd., says it will vote in favour of the company's plan to separate its metals and steelmaking coal operations into two companies.

The Japanese company says in a statement that it has built a trusted partnership with Teck in the mining business.

Swiss company Glencore has proposed a takeover offer for Teck that would see shareholders receive a stake in a combined metals company as well as a choice of cash or shares in a company that would hold their merged coal assets.  

However, Glencore has said Teck shareholders must first reject the company's plan to split its business into Teck Metals and Elk Valley Resources.

Teck, which has rejected the Glencore proposal, is controlled by the Keevil family, which owns the company's multi-voting class A shares together with Sumitomo. 

Sumitomo holds 18.9 per cent of Teck's class A shares and 0.1 per cent of its class B shares. It also holds a 49 per cent interest in Temagami Mining Co. Ltd., which holds 55 per cent of Teckʼs class A shares.

This report by The Canadian Press was first published April, 20, 2023.

 

Letko Brosseau to vote in favour of Teck's plan to split company

Danielle Bochove, Bloomberg News

TECK RESOURCES LTD-CLS B (TECK/B:CT)

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Investment manager Letko Brosseau & Associates Inc. will vote in favour of Teck Resources Ltd.'s plan to split the company, saying it will ultimately offer more value for shareholders than a Glencore Plc takeover.

The unsolicited offer by the Swiss commodities giant dramatically undervalues Teck's metallurgical coal assets, Peter Letko, co-founder of the Montreal based firm, said in a Thursday interview.

Glencore originally offered to buy Teck for US$23 billion in shares, and earlier this month revised its proposal to give Teck shareholders an option to receive as much as US$8.2 billion in cash instead of stock in a spun-off coal company. Letko said the coal number is “extremely low.”

“I think ultimately this is going to be worth maybe twice what they're offering,” he said. “I don't think that we're in the ballpark. I doubt very much that we'd see a big improvement in their proposal.”

Representatives from Letko Brosseau have spoken to Teck and met Glencore, Letko said. The company has owned shares of the Vancouver-based miner for at least 20 years and currently holds about 3.6 million shares, he said.

Letko called Glencore “rather clever” for making a takeover attempt before other companies could put together offers. Teck's controlling shareholder, Norman Keevil, has signaled that he'd support a transaction with the “right partner, on the right terms” after the firm separates its metals business from its coal operations. Shareholder are expected to vote on the plan at an April 26 meeting.

“Given a little time, you'll see broader interest and a real competitive bidding for these assets,” Letko said. “And that's the way I think we're going to get the best price.”

Trudeau team ‘closely’ watching Glencore’s

bid to swallow Teck

Bloomberg News | April 18, 2023 | 

Canada’s Minister of Natural Resources Jonathan Wilkinson.

 (Image courtesy of Province of British Columbia.)

One of Justin Trudeau’s senior cabinet ministers said the Canadian government is monitoring Glencore Plc’s attempted takeover of Teck Resources Ltd., pointing out that the country benefits from having the headquarters of major companies.


“We are following it very closely,” Natural Resources Minister Jonathan Wilkinson said Monday in a phone interview. But he added that his cabinet colleagues won’t pre-judge the “commercial conversations” that are taking place.

Wilkinson said Teck is an important player in Canada’s mining sector not just because of critical minerals projects, but also as a contributor to the economy of his home province of British Columbia, including its coal business.

Teck is racing to secure investor support for its plan to separate its coal and metals assets — on which shareholders are scheduled to vote next week — while fending off an unsolicited $23 billion takeover offer from Swiss commodities giant Glencore for the whole company.

Wilkinson said it’s a “positive thing for Canada” to have major companies headquartered locally.

“We are a country that would love to have more corporate offices in this country that actually drive research and development spending,” he said. “And so obviously we are watching this with great interest and certainly having conversations.”

But the minister stressed that he won’t jump ahead of talks between the commercial players, or any potential deal review that would be overseen by his cabinet colleague, Industry Minister François-Philippe Champagne.

Teck shares rose to a record close of C$65.15 in Toronto on Monday after controlling shareholder Norman Keevil said the company is willing to consider deals after it’s finished spinning off the coal business.

Canada’s investment law gives the government some latitude to block foreign takeovers of large companies, though the power has not been used frequently. After allowing a string of mega-takeovers in the mining and metals sector in the early 2000s, the government in 2010 blocked BHP Group’s proposed takeover of Potash Corp. of Saskatchewan.

Last year, Trudeau’s government ordered Chinese firms to divest of three junior lithium miners and promised tougher rules for investment in the critical minerals sector.

(By Brian Platt)

Uranium price showing resilience relative to other commodities – report

MINING.com Editor | April 18, 2023 |
Stock image.

The U3O8 uranium spot price fell slightly from $50.85 to $50.70 in March and remains up 4.93% year-to-date as of March 31, 2023, showing strength relative to other commodities, which declined 6.47% YTD (as measured by the BCOM Index), Sprott Asset Management said in its latest uranium report.


Over the longer term, uranium has demonstrated even greater resilience within the commodity space, Sprott added. For the five years ended March 31, 2023, U3O8 spot appreciated a cumulative 140.95% compared to 20.62% for the BCOM.

Physical uranium and uranium stocks have outperformed other asset classes over past five years. Credit: Sprott

“We believe that uranium market fundamentals, which are the most positive in over a decade, will continue to support prices. Physical uranium, which demonstrates low correlation to other major asset classes, also shows low historical correlation to other commodities,” said Jacob White, ETF product manager at Sprott Asset Management.

“These characteristics make uranium an attractive option when considering portfolio diversification,” he added.

Uranium spot demonstrates low correlation to other commodities. Credit: Sprott

Uranium mining equities, in contrast to physical uranium, fell 6.74% in March and are off just 1.48% year-to-date, buoyed by January’s stellar performance. Like physical uranium, uranium mining equities have had notable long-term results, having gained a cumulative 138.02% for the five years ending March 31, 2023, Sprott noted.

According to Sprott’s analysis, uranium equities were impacted by March’s challenging headwinds (i.e. the US banking crisis), and smaller-cap, junior uranium miners were the main detractors for the month. However, the firm noted that despite the selling pressure in March, junior uranium miners continue to make progress with production restarts, uranium contracting with utilities and exploration programs.

While the stronger uranium price is encouraging the restart of idle capacity, pricing remains well below the levels required for new greenfield production, Sprott said. In addition, while utilities have contracted to purchase the highest amount of uranium in 10 years, their purchasing activity remains below annual replacement levels.

“The performance of uranium miners in March did not reflect the sector’s increasingly bullish fundamentals. We believe the uranium bull market still has a long way to run. Conversion and enrichment services price increases may likely cascade to the uranium spot price and support uranium miners,” noted White.

“Over the long term, increased demand in the face of an uncertain uranium supply may likely support a sustained bull market,” he added.

Sayona feasibility for North American Lithium mine confirms $1.5 billion value

Staff Writer | April 18, 2023 | 

The NAL processing plant is now again in production. Sayona Mining photo

Having restarted commercial production at its North American lithium (NAL) mine in Quebec last month, Sayona Mining (ASX:SYA) has released the definitive feasibility study for NAL, including the nearby Authier lithium deposit.


The project is given a 20-year life with an average annual mill feed of 1.4 million tonnes. The plant has a capacity of 4,200 t/d, and the average concentrate production during the first four years will be 226,000 tonnes. The all-in sustaining cost will be C$987 per tonne of concentrate.

The NAL project has an after-tax net present value (8% discount) of C$1.4 billion, and the after-tax internal rate of return is 2,545%. Combined with the Authier project, the NPV would reach C$2 billion ($1.5bn). Total capex of the mine and mill restart are C$375.3 million, and the onsite total operating costs are C$2.3 billion, or $597 per tonne of concentrate.

Sayona says proven and probable reserves are 21.7 million tonnes grading 1.08% lithium oxide (Li2O) and containing 235.5 million tonnes Li2O. Reserves are contained in measured and indicated resources, which total 25 million tonnes at 1.23% Li2O for the pit constrained portion, plus 22 million inferred tonnes at 1.2% Li2O.

A 50,000-metre drilling program is scheduled for this year. The first phase will primarily target the conversion of inferred resources to indicated within the pit shell. The northwest and southeast strike extensions at NAL will also be drilled.

NAL and Authier projects are part of Sayona Quebec, owned 75% by Sayona Mining and 25% by Piedmont Lithium (ASX: PLL; NASDAQ: PLL).

Graphic: Hefty shortages to help buoy aluminum prices this year

Reuters | April 18, 2023 | 

Aluminum smelter. Stock Image.

Supply disruptions in China due to problems with hydropower mean hefty shortages of aluminum this year, which are likely to offset slow demand growth and help bolster prices.


Smelter shutdowns in Europe due to high energy prices over the past couple of years and consumers there shunning Russian metal after Moscow invaded Ukraine last year make the problem particularly acute in the region.

Despite expectations of tight supplies, aluminum prices on the London Metal Exchange (LME) have come under pressure due to interest rate hikes in the United States and sluggish demand in top consumer China.


At $2,400 a tonne, they have dropped 10% since mid-January.

However, in recent weeks deficits have emerged, as seen in sliding inventories of aluminum used in the transport, construction and packaging industries.


In warehouses monitored by the Shanghai Futures Exchanges, aluminum stocks at 274,347 tonnes have dropped 12% over the last month. In LME approved warehouses, stocks have fallen 5% since mid-February.

Chinese production should rise, but at a slower pace than previously forecast due to power rationing and disruptions in provinces such as Yunnan where aluminum is mostly smelted using hydroelectricity.

“China’s smelters remain under pressure because of hydropower shortages. At the same time, demand should pick up, so exports will likely remain capped,” said Bank of America analyst Michael Widmer. “We expect rising deficits going forward.”

Widmer expects an aluminum market deficit of 1.53 million tonnes this year and a shortage of 1.93 million tonnes next.


Meanwhile, in Europe, lower power prices have helped to reduce production costs, but smelter restarts are limited.

A scramble for supplies has since mid-January fuelled a 20% jump in the duty-paid aluminum premiums buyers in Europe pay in the physical market – above the LME price – to $330 a tonne.


“Physical premiums managed to hold up in Europe where supply constraints remain following the large smelter cuts last year and Russian metal being diverted to Asia,” Macquarie analysts said in a note.

“Given more Russian metal is expected to flow to China, there should be fundamental support for physical premiums.”

Macquarie forecasts an aluminum market deficit of 670,000 tonnes this year and global consumption at 70.8 million tonnes.

(By Pratima Desai; Editing by Mark Potter)

China’s Yunnan Tin says Myanmar mining halt could hit global supply

Reuters | April 18, 2023 | 

The largest end-use for tin is soldering in semiconductors. 

Image courtesy of Pixabay.

A suspension of mining in Myanmar could lead to further tightening of global supplies of tin, China’s Yunnan Tin, the world’s top refined tin producer, said on Tuesday.


On Monday, Myanmar’s ethnic minority Wa militia said that from August the Wa region – a key tin producer – would suspend all mining activities to protect the remaining resources after more than a decade of “disruptive and wasteful mining”.

The news sent tin prices skyrocketing, with the most-traded May contract on the Shanghai Futures Exchange up as much as 17.5 per cent in two sessions and the benchmark three-month contract on the London Metal Exchange hitting a two-and-a-half month high.

“The company is closely monitoring the Chinese raw material supply,” Yunnan Tin told Reuters in a statement, adding that it would make “timely adjustment to its operations” as the impact on supply hinged on the implementation of the suspension.

The International Tin Association (ITA) said in a report on its website that “it is still unclear how and if these plans will be implemented.”

Myanmar accounted for 77 per cent of China’s tin ore imports last year, Chinese customs data showed. The Wa region is estimated to have accounted for over 70 per cent of Myanmar’s tin production in 2022, the ITA said.

The main tin mine in the self-declared Wa State, which borders China’s Yunnan province, is Man Maw, which produced around 32,000 tonnes of tin in 2020, the ITA said in a 2021 report.

“This tin is generally smelted in China and mining investment is thought to be sourced from China,” the report said.

Less significant tonnages of tin are also mined in Myanmar government-administered areas including the Mawchi mine in Kayah State and the Heinda mine in the Tanintharyi Region of southern Myanmar, the ITA added.

Myanmar is estimated to have the world’s third largest tin reserves at 700,000 tonnes – or 15 per cent of global reserves, behind Indonesia’s 800,000 tonnes and China’s 720,000 tonnes, US Geological Survey (USGS) data in 2023 showed.

Other major tin mining countries include Peru, Democratic Republic of Congo, Bolivia, Brazil and Australia.

Tin is used in the electronics and semiconductor industries.

Shares of Yunnan Tin hit their highest since June 2022 at 17.96 yuan ($2.61) on Tuesday. They jumped 10 per cent in the previous session on the Myanmar news.

Yunnan Tin last year produced 77,100 tonnes of refined tin, around a fifth of global output, ITA data showed.

China is the world’s biggest consumer of tin and is also the top producer of tin ore and refined tin. Four of the world’s top 10 refined tin producers are Chinese, data by the ITA showed.

($1 = 6.8719 yuan)

(By Siyi Liu and Mai Nguyen; Editing by Tom Hogue and Mark Potter)

Column: Tin spooked by threat of supply disruption in Myanmar

Reuters | April 18, 2023 |



Tin prices leapt higher on Monday on news of a possible production halt in Myanmar, the world’s third-largest producer of the soldering metal.


London Metal Exchange three-month tin jumped by 11% to hit a two-month high of $27,705 per tonne and was last trading at $27,180. It took its lead from the Shanghai Futures Exchange (ShFE), which was already seeing record levels of trading activity before the latest turmoil.

The unexpected threat to supply comes in the form of a statement from the Central Economic Planning Committee of the Wa State, Myanmar’s most powerful ethnic armed group that controls the tin-mining area on the border with China.

All mining and processing activities will be “suspended” from the start of August to preserve the remaining resource, according to a document seen by Reuters.

It seems a strange move, given tin is such an important source of revenue for the self-declared Wa State, and there may well be more to the announcement than meets the eye.

But it serves to highlight the importance of one of the most inaccessible parts of southeast Asia to the global tin supply chain.

China’s tin smelters are particularly exposed even though they have been trying to cut their dependence on Myanmar ore.

Myanmar’s tin rush

Myanmar was a significant producer of tin before World War Two but the industry had all but vanished by the end of the last century.

The first anyone knew of a significant new tin find was in 2013 when large quantities of ore and concentrates from Myanmar started turning up in China’s import figures.

Imports from Myanmar grew from 30,000 tonnes in 2012 to 89,000 tonnes in 2013 and mushroomed to almost 500,000 tonnes in 2016. The mid-decade peak coincided with a sharp drop in implied value, suggesting the movement of lower-grade stockpiled metal.

The raw materials import flow has since stabilized at around 150,000-200,000 tonnes a year.

What began as small-scale and artisanal mining quickly became mechanized and semi-formalized as the United Wa State Army (UWSA) took control of the core Man Maw mining area.

The International Tin Association visited the site in 2016 and estimated it was operating close to its 50,000-tonne-per-year contained metal capacity, albeit with significant potential for new finds.

The United States Geological Survey estimates production last year fell to 31,000 tonnes from 36,900 tonnes in 2021, still making the country the world’s third-largest supplier after China and Indonesia.

It’s a controversial one, too, given the UWSA was put on the United States sanctions list in 2003 for alleged narcotics trafficking.
Chinese dependence

The Myanmar tin boom occurred at the right time for China’s tin smelters, many of which were struggling to bring on new mining capacity as Beijing steadily tightened environmental controls on the mining sector.

But the risks of becoming overly dependent on its neighbor became apparent when Covid-19 restrictions massively disrupted both Myanmar’s mining output and the flow of raw materials over the border.

China’s smelters have been busy tracking down new potential sources of tin.

The ratio of Myanmar imports has fallen from nearly 100% of total ore and concentrates imports over the middle of the last decade to 77% in 2022.

Last year’s imports included 23,500 tonnes from the Democratic Republic of Congo, 11,500 tonnes from Australia and 3,000 tonnes from Nigeria as well smaller amounts from Laos, Vietnam, Thailand, Malaysia and Russia.

However, it’s doubtful that supply from alternative sources could be ramped up fast enough or at a sufficient scale to offset the loss, even temporary, of material from Myanmar.

Insecurity of supply

The speed of Monday’s price action says as much about market positioning as it does about the immediate supply impact.

The Shanghai tin market has recently seen extremely elevated levels of trading activity, with both turnover and open interest hitting fresh life-of-contract highs in March. Last month’s volumes of 5.34 million tonnes were 14 times greater than last year’s global production of 380,000 tonnes.

Shifts in ShFE market open interest suggest tin’s new speculative friends have been trading from the short side, or they were until Monday when open interest surged again into the price rally.

The bearish stance made sense given a significant easing in soldering demand from a slowing consumer electronics sector and the build in visible inventory in China.

ShFE-registered stocks have risen by 65% since the start of January to 9,056 tonnes, their highest level since 2017.

That will provide plenty of short-term cushion for Chinese buyers as they and everyone else wait to see if the Wa State is serious about suspending production.

However, the threat alone underscores the fragility of tin supply at a time when Indonesia, the largest exporter of the metal in refined form, is mulling an export ban to stimulate the build-out of downstream processing capacity.

The tin production sector has been chronically under-invested for many years and has ridden its luck on small-scale miners finding the big deposits, as was the case in Myanmar in the 2010s and Brazil in the 1990s.

A failure to diversify supply has left tin’s fortunes at least partly dependent on the shadowy UWSA and its opaque policy-making processes.

This is probably not going to be the last time tin gets spooked by unexpected news from Myanmar.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Paul Simao)

Supply-chain problems in the forecast as battery metals demand surges – study

Staff Writer | April 18, 2023 |

Lithium mine on the Salinas Grandes salt flat Jujuy province, Argentina.

 (Image by Earthwork, Flickr.)

An expected surge in demand for battery-grade lithium, nickel, cobalt, manganese and platinum is set to create a variety of economic and supply-chain problems, according to new research out of Cornell University.


In a paper published in the journal Nature Communications, senior author Fengqi You and his colleagues examined 48 countries that are committed to playing a strong role in electrifying transportation, including the US, China and India.

Under a scenario where 40% of vehicles are electric by 2050, the need for lithium globally will increase by 2,909% from the 2020 level. If 100% of vehicles are electric by 2050, the need for lithium more than doubles to 7,513%.

From the years 2010 to 2050, in a scenario where all vehicles are electric, the annual demand for lithium would increase globally from 747 metric tons to 2.2 million metric tons.

By mid-century, for example, the demand for nickel eclipses other critical metals, as the global need ranges from 2 million metric tons, where 40% of vehicles are electric, to 5.2 million metric tons where all vehicles are electric.

The paper also notes that the annual demand for cobalt (ranging from 0.3 to 0.8 million metric tons) and manganese (ranging from 0.2 to 0.5 million metric tons) is expected to rise by the same order of magnitude in 2050.

“The unstable supplies of critical metals and minerals can exacerbate supply risks under surging demand,” You said, pointing to World Bank data that show that currently, critical metals and minerals are centralized in politically unstable countries such as Chile, Congo, Indonesia, Brazil, Argentina and South Africa.

Given this forecast, the researchers urge caution on the electrification of heavy-duty vehicles, which require more critical metals than other vehicles. Although they account for only between 4% and 11% of the total road fleet in some countries, battery-related critical metals used in heavy-duty electric vehicles will account for 62% of the critical metal demand in the decades ahead.

In their view, building a circular economy would be indispensable if it achieved a closed-loop supply chain of critical metals in the future. Thus, a number of strategies should be considered to promote the recycling efficiency and recovery rate of end-of-life batteries at a proper pace.

They also suggest that countries should adopt policies that prioritize alternative designs for cathodes/anodes and fuel-cell systems to reduce the reliance on primary critical metals.

Finally, the Cornell group proposes that decarbonization targets for road transportation should consider not only electric vehicle deployment but also the timing of carbon peak and neutrality, and accurate emission budgets.

B2Gold begins phased closure of Namibia mine

MINING.COM Editor | April 18, 2023 

B2Gold gained access to the Otjikoto mine through its acquisition of Auryx Gold in 2011. (Image courtesy of B2Gold.)

B2Gold (TSX:BTO)(NYSE: BTG) said on Tuesday it had begun the phased closure of its Otjikoto gold mine in Namibia, once the country’s largest producer of the precious metal.


The mine, which began commercial production in March 2015, has reached the end of its open-pit gold resource, B2Gold said, adding it would gradually reduce its production until 2031, when it will cease operations completely.

Otjikoto’s production reached 161,614 ounces of gold last year, representing about 16% of B2Gold’s total output for 2022.

“B2Gold Namibia has commenced with the implementation of its Phased Mine Closure Plan at the Otjikoto mine. Phased downscaling of operations, in line with the closure plan, are only scheduled to commence during the first quarter of 2024,” a spokesperson told Reuters.

The last year of full open-pit mining production will be 2023, with output expected to be between 190,000 and 210,000 ounces of gold.

B2Gold noted it would continue to develop its underground mine at Otjikoto, which could extend the mine-life and replace some of the lost production from the open-pit operation.

The Canadian miner also has operations in Mali and the Philippines as well as exploration projects in Uzbekistan, Finland and Colombia.

It is also in the midst of acquiring Sabina Gold & Silver (TSX: BTO)(NYSE: BTG), a Canadian exploration and development company, which owns five high-grade gold projects in Nunavut.

One of these projects, Back River, is expected to start producing gold in 2025 at an annual rate of 300,000 ounces for 15 years.

Chile government says it will reach deal with copper producers before key mining tax vote

Bloomberg News | April 18, 2023 | 

Chile government. Credit: Wikimedia Commons

Chile’s government is confident it can smooth out differences with the country’s largest mining companies before a key vote in congress this week on a new mining royalty bill.


The administration of President Gabriel Boric is optimistic over an agreement between Tuesday and Wednesday, Mining Minister Marcela Hernando said at a seminar Tuesday in Santiago.

“We understand that several points of consensus have been reached,” Hernando said.

The comments come after the government presented amendments to the bill on Monday that would lower the maximum tax burden for copper producers to 48% of operating profit, from the 50% previously proposed. This would bring the average tax rate to 42.1% based on prices over the past 10 years, according to previous data presented by Finance Minister Mario Marcel.

Still, there are differences over calculations of the tax burden, with Juan Carlos Guajardo, who heads the consulting firm Plusmining, putting the average nearer 46%.

“The ideal for the mining industry in Chile would be to lower it a few more points,” Guajardo said in a message.

The Senate’s Finance committee will vote on the bill later Tuesday with a vote at the Senate floor scheduled for Wednesday. The bill will then head back to the lower house for a potential final vote.

(By Eduardo Thomson and James Attwood, with assistance from Valentina Fuentes)

Anglo American’s Los Bronces project granted environmental permit

Reuters | April 17, 2023 | 

Near the tailings facility for Los Bronces copper mine in Chile. 

(Image courtesy of Anglo American | Flickr.)

Chile’s ministry of environment on Monday said that a committee of government ministers approved an environmental permit for a $3 billion extension of Anglo American’s Los Bronces project in Chile.


Environmentalists and social groups have criticized the initiative located in the Andes Mountains, near the Chilean capital, for its long-term impact on a nearby glacier, as well as on the area’s water supply.

Last May, the global mining company said it would continue to seek approval for the Los Bronces copper mine after being initially rejected by the Environmental Assessment Service (SEA).

The committee – made up of the ministries of mining, agriculture, energy, economy, and health and chaired by the environment ministry – is not part of the Chilean EAS but has the power to hear and review environmental resolutions.

In a statement, the ministry of environment said the committee approved the permit on the grounds of a series of “demanding” environmental conditions proposed by the company.

The National Mining Society (Sonami) union said the approval would be a “powerful signal” to promote investment in the sector.

The Los Bronces extension seeks to sustain production levels and extend the mine’s life through to 2036, according to the company.

Anglo American said last year that it would supply half of its Los Bronces project with desalinated water from 2025, amid environmental criticism.

The project is part of Anglo American Sur, owned by Anglo American (50.1%), the Codelco-Mitsui consortium (29.5%) and Mitsubishi (20.4%).

Last year, Chilean authorities rejected a project that sought to extend the life of the small El Soldado copper mine, also owned by Anglo American.

(By Fabian Cambero and Isabel Woodford; Editing by Brendan O’Boyle and Sandra Maler)

Codelco sees new synergies after Anglo American project approval

Reuters | April 18, 2023 |

Andina mine, Chile. Image courtesy of Codelco.

Chile’s Codelco, the world’s largest copper producer, sees greater synergy with its Andina mine and Anglo American’s neighboring Los Bronces mine following an environmental permit approval, the state-owned company’s chief executive said on Tuesday.


A committee of Chilean ministers approved the Los Bronces Integrado environmental permit on Monday, paving the way for a $3.3 billion extension of the project.

“There are always new synergies, mining has dynamics that progress as projects advance,” Codelco’s CEO Andre Sougarret told reporters after a panel at the World Copper Conference in Santiago.

“We are confident that this will generate a positive future for both operations,” he added.

Codelco is a shareholder in Anglo American Sur, which owns Los Bronces.

Conditional measures for the approval of Los Bronces Integrado include a joint study with Codelco’s Andina mine on monitoring particulate matter emissions.

“We have been working on it,” Sougarret said in regards to the monitoring, but did not provide details.

(By Fabian Andrés Cambero and Alexander Villegas; Editing by Marguerita Choy)

Norwegian Crude Becomes Mainstay For EU Refiners As They Ditch Urals

By Tsvetana Paraskova - Apr 19, 2023

• The price cap on Russian crude has created an opportunity for Norwegian crude. 
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• Norway's Johan Sverdrup crude is now a top choice for European refineries.
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• So far this year, only 2 million barrels of Johan Sverdrup crude have made their way to Asia, compared to 100 million barrels in 2021

The continuous shift in oil trade flows following the EU embargo on Russian exports is a huge win for the crude from Western Europe's largest oilfield offshore Norway. 

Norway's Johan Sverdrup crude is now a top choice for European refineries that used to rely on Russia's flagship grade, Urals, before the Russian invasion of Ukraine.  

The Johan Sverdrup crude from the same-name field, which came online in 2019, is similar in quality to Russia's Urals and has been increasingly flowing to European customers over the past year at the expense of Asian destinations. Urals, for its part, is now flowing east to Asia and no longer to Europe after the EU embargo on imports of Russian oil, according to traders and tanker-tracking data cited by Reuters.   

So far this year, only 2 million barrels of Johan Sverdrup crude have made their way to Asia, compared to 100 million barrels in 2021, the year before the Russian invasion of Ukraine in February 2022, per Refinitiv Eikon reported in the Reuters analysis. 

Urals, on the other hand, is selling in India and China and reportedly above the $60 price cap in recent weeks. India is estimated to account for over 70% of the Urals shipments in April, and China is receiving 20% of those shipments so far this month, according to Reuters estimates. 

China and India haven't joined the so-called Price Cap Coalition of mostly Western nations that imposed a price cap on Russia's crude oil if the cargoes are using Western insurance, shipping, and financing.

Since the OPEC+ announcement of additional cuts through the end of this year, the price of Urals has moved higher, threatening the price cap imposed in a bid to hurt Russia's oil revenues. 

The Johan Sverdrup and Urals grades, similar in content and gravity, have now switched their previously top destinations, highlighting the major shift in global crude oil flows since the West imposed sanctions on Russia's oil. 

Johan Sverdrup has medium density and medium sulfur content, lower than the sulfur content of Urals, which is also a medium sour crude. Both grades have high diesel yields. 

Johan Sverdrup flows to Asia have fallen off a cliff, but hit a record high to Poland, according to Refinitiv Eikon data. Poland stopped importing Russian crude via pipeline in February this year. In the following month of March, imports of the Johan Sverdrup crude at the Polish port of Gdansk soared to a record-high of more than 8 million barrels, the data showed. 

Johan Sverdrup also accounted for at least 50% of Finland's crude oil imports and is also heading to Lithuania, according to Refinitiv Eikon. 

With the major trade shift, most voyages of Johan Sverdrup cargoes are now much shorter than the time spent on shipments to Asia, while Russia pays for longer trips of Urals from its Baltic Sea ports to India and China. 

Johan Sverdrup is estimated to be able to meet up to 7% of European oil demand, the operator of the oilfield, Equinor, says. 

The Johan Sverdrup oilfield, Western Europe's biggest oilfield, which came online in 2019, produced 535,000 barrels per day (bpd) of crude oil, and with Johan Sverdrup phase 2 started up at the end of last year, the giant oilfield is now pumping around 720,000 bpd.

Johan Sverdrup alone can meet 6-7% of the daily oil demand in Europe. Recoverable volumes in the Johan Sverdrup field total 2.7 billion barrels of oil equivalent, Equinor says.                     

"Johan Sverdrup accounts for large and important energy deliveries, and in the current market situation, most of the volumes will go to Europe," Geir Tungesvik, Equinor's executive vice president for Projects, Drilling & Procurement, said in December 2022.  

By Tsvetana Paraskova for Oilprice.com

Why Biden Needs To Relax Sanctions Against Venezuela

By Matthew Smith - Apr 19, 2023

• Biden administration has loosened sanctions on Venezuela's petroleum industry to alleviate the US's dependency on foreign oil.
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• U.S. sanctions and mismanagement of Venezuela's petroleum industry have led to a drastic decline in production, with the country now only producing 716,000 barrels per day.
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• Chevron has been authorized to resume lifting petroleum from Venezuela provided that PDVSA does not profit, but it still only represents a small fraction of the oil and derivative petroleum products imported from Russia, prior to White House restrictions.

The recent shock OPEC+ production cut of nearly 1.2 million barrels per day caught the world by surprise and caused the price of oil to spiral higher, with Brent soaring 7% over the last two weeks to $85 per barrel. The cartel made this substantial production cut despite the considerable displeasure voiced by U.S. President Joe Biden and the potential it has of sparking a global recession at a time when inflation is rampant. The decision confirms Saudi Arabia’s return to being a global geopolitical powerbroker and the Biden White House’s inability to influence a key Middle Eastern ally. This forced the White House to consider other means of boosting domestic oil supply as the summer driving season looms and pressure grows to refill the Strategic Petroleum Reserve. It is the pariah state of Venezuela, the world’s second-largest oil exporter in 1998, which Washington views as a potential solution.

Strict U.S. sanctions, along with decades of mismanagement, malfeasance and corruption, have crippled Venezuela’s economic backbone, the country’s once monumental petroleum industry. From a peak of pumping over three million barrels per day in 1998, production has collapsed since Hugo Chavez took office in February 1999 to be only 716,000 barrels per day during 2022. Crippling U.S. sanctions, particularly those imposed by President Donald Trump in January 2019, coupled with endemic corruption and a dearth of skilled labor as well as an investment are responsible for the swift implosion of Venezuela’s oil industry. 

Since taking office in January 2021, President Biden has progressively loosened sanctions against Venezuela as part of a strategy to ease the humanitarian crisis engulfing the country, which has been described as the worst to occur outside of war. The push to ease sanctions accelerated after Moscow invaded Ukraine and Washington, along with European allies, imposed restrictions on Russia’s oil exports, causing energy prices to soar. The international Brent benchmark surged to over $130 per barrel, which along with spiraling natural gas prices because of Russia cutting crucial gas supplies to Western Europe, caused inflation to surge and precipitated an energy crisis. This added to the sense of urgency for Washington and its allies to find alternative sources of oil and natural gas. 

By March 2022, the White House had sent an envoy to Caracas to initiate discussions with the autocratic Maduro regime, the first diplomatic contact since Trump ratcheted up sanctions in early January 2019. In June 2022, the Biden administration authorized Italy’s Eni and Spain’s Repsol to ship Venezuelan crude oil to Europe in exchange for reducing debt owed by PDVSA, although Maduro eventually blocked those shipments. In a somewhat surprising move, Biden further eased sanctions in November 2022 after Maduro agreed to recommence negotiations with Venezuela’s opposition. The U.S. Treasury authorized Chevron to recommence lifting petroleum in Venezuela on the condition that PDVSA doesn’t profit from the petroleum extracted and all oil produced is only exported to the U.S.

While this is a significant political event, it has done little if anything to provide material relief from the constraints impacting U.S. oil supply. The four joint projects in which Chevron participates with PDVSA are pumping an estimated 90,000 barrels per day. Shipping documents show that Chevron was shipping the equivalent of around 100,000 barrels per day of Venezuelan crude oil to the U.S. during February 2023. Those volumes are significantly less than the 209,000 barrels per day of crude and 500,000 barrels daily of derivative petroleum products imported from Russia by the U.S. during 2021, prior to White House restrictions. Those numbers pale in comparison to the 12 million barrels per day pumped by the U.S. oil industry during 2022 and the 20 million barrels per day consumed last year.

When it is considered that Venezuelan production growth has stalled, with the embattled OPEC member only pumping 700,000 barrels per day for February 2023, it is difficult to see how lifting sanctions will materially boost the global oil supply. This is further emphasized by the fact that it will take a massive amount of capital estimated to be between $110 billion and $250 billion, invested over a decade to materially boost production. Venezuela’s petroleum industry infrastructure is so heavily corroded from decades of under-investment in critical maintenance, malfeasance and a lack of crucial parts as well as skilled labor it will take a decade or longer to restore output to over two million barrels per day.

It is only Western energy companies such as Chevron which possess the deep pockets, skilled labor and technical know-how required to rebuild Venezuela’s shattered oil industry. International energy companies will not commence making the required investment until they can operate in Venezuela profitability without impediment from either strict U.S. sanctions or the authoritarian Maduro regime. For these reasons that it makes little sense for the Biden White House to ease sanctions solely in response to global petroleum supply constraints. More so, when it is considered that Venezuela is a member of OPEC and even if capable of significantly bolstering production, the country will be bound by the production quotes and restrictions imposed by the OPEC+ consortium.

Nevertheless, the humanitarian situation in Venezuela is dire. A combination of endemic long-standing corruption, gross economic mismanagement, the collectivization of the means of production and harsh U.S. sanctions caused Venezuela’s economy to collapse, especially after the oil industry crumbled. This triggered an immense economic implosion, described as the worst to ever occur during modern times outside of war, 

which has left at least 77% of Venezuelans living in extreme poverty. The crisis is so severe that an estimated seven million Venezuelans have fled their country since 2015. It is for these reasons that Fernando Blasi, the latest Venezuelan opposition representative to the U.S., recently urged Biden to relax harsh U.S. sanctions against the pariah state. Blasi went on to state that if sanctions aren’t relaxed, Washington risks becoming a scapegoat for Venezuela’s economic and humanitarian hardships, which will only strengthen the position of Maduro’s dictatorial regime.

This is in stark contrast to the previous hardline approach taken by Venezuela’s opposition, where many members were in favor of the maximum pressure approach taken by the Trump administration. That pivot has occurred because there is unmistakable evidence that the policy of maximum pressure has failed. Despite the Trump White House’s attempts to unseat Maduro, the socialist autocrat’s power has strengthened, and he has solidified his control of the levers of power while eliminating most of his opponents along the way. This includes the White House’s handpicked interim Venezuelan President Juan Guaido, who lost his seat as president of the National Assembly, which destroyed his legitimacy. For that reason, Guaido not only lost the backing of many governments internationally, such as the European Union, but the former lawmaker was ousted from his role within the opposition.

Despite strict U.S. sanctions blocking sales of Venezuelan crude oil, which is the petrostate’s primary export, the crisis-riven country’s economy returned to growth during 2021, with gross domestic product growing 0.5% and then by another 8% in 2022. That somewhat surprising development has further cemented Maduro’s grip on power and is providing handy anti-U.S. and anti-opposition propaganda for the authoritarian socialist regime. For these reasons, AP quoted Blasi as stating: “If we continue down this path, Venezuela is destined to be another Cuba,”. While Venezuela, despite possessing the world's largest reserves of 304 billion barrels, is incapable of materially boosting global oil supplies, and there are pressing geopolitical and humanitarian reasons for the Biden White House to substantially relax sanctions. For those reasons, the White House must act urgently if another brewing Latin American political crisis is to be averted.

By Matthew Smith for Oilprice.com