Nuclear icebreakers help Northern Sea Route to record year

05 January 2024

A new record for cargo transported via Russia's Northern Sea Route was set in 2023 with existing nuclear icebreakers providing more than 730 vessel support services. Work continues to progress on two more nuclear-powered icebreakers.

(Image: Rosatomflot)

The Northern Sea Route (NSR) runs along the north coast of Russia connecting the European and far eastern ports of Russia over a distance of 5600 kilometres. By 21 December, Rosatom reported that 35 million tonnes had been transported, compared with the previous record of 34.1 million tonnes, which was set in 2021.

Vladimir Panov, special representative of the Rosatom State Corporation for Arctic development, noted that in 1987 the record for NSR freight for the Soviet Union was set at 7 tonnes and that 2023's figure was a bounce back from 2022 when there was a 90% drop in transit cargo flow "due to geopolitical factors". He said that this had been reversed with a record set for transit cargo flow, of 2.17 million tonnes, with cargo redirected from the Suez Canal to the Northern Sea Route.

According to a report by Norway's Nord university's High North News, citing Center for High North Logistics data, "strong demand for Russian crude oil in China resulted in record transit cargo on the Northern Sea Route in 2023. More than a dozen shipments delivered 1.5m tons of crude oil from the Baltic Sea to China through the Arctic". It reports that "additional volume came in the form of iron ore, coal and LNG. General cargo and containerised cargo accounted for around 7 percent".

Rosatom says that the distance from Murmansk to Japanese ports is halved by using the NSR rather than the Suez Canal, with the duration cut from about 37 to 18 days. Panov said of the growth of the total cargo: "This contribution will only grow. The Northern Sea Route is defined by the President of the Russian Federation Vladimir Putin as one of the strategic development priorities."

Further development of the Northern Sea Route is also due to be on the agenda of a conference in March held at Russia's Chamber of Commerce which, according to the Tass news agency, will focus on the development of the "backbone cities" of the route. It also quoted President Putin as saying in December that the NSR was "becoming more efficient than the Suez Canal" and was becoming more open for ships in different seasons of the year, although the icebreaker fleet will still be needed for a long time, "for more than one decade and this is a great competitive advantage for our country".

The nuclear-powered icebreakers play a key role in the development of the shipping route and there is currently a construction programme 'Project 22220' to build a new fleet. As part of this, the second RITM-200 reactor unit was delivered to the Baltic Plant in St Petersburg on 22 December, to be installed on the Chukotka, which is due to be delivered in 2026. The reactor weighs 147.5 tonnes, is 7.3 metres high and 3.3 metres in diameter - the RITM-200 installation includes two reactors with a thermal power of 175 MWt each, which deliver 60 MW at the propellers via twin turbine generators and three motors.

The second reactor for the Chukotka arrives (Image: Baltic Shipyard)

Igor Kotov, head of manufacturers Rosatom’s Mechanical Engineering Division, said: "The arrival of the tenth RITM-200 reactor unit at the Baltic Plant is a significant event for the Mechanical Engineering Division of Rosatom. Now all the newest generation universal nuclear icebreakers being built at this shipyard are equipped with the most modern installations that will allow the icebreaker fleet to work more efficiently and transport even more cargo along the Northern Sea Route."

The fourth of the Project 22220 icebreakers - the Yakutia - is also currently under construction at the site. In November its mast, which is 18.6 metres tall and weighs about 76 tonnes, was loaded on to the vessel, which led to it reaching its final height of 59.3 metres. It is slated for service later this year, when it will follow the Artika, Sibir and Ural.

The Yakutia gets its mast (Image Baltic Shipyard)

Andrey Tenitsky, adviser to the director general of FSUE Atomflot, said that there had been a notable lowering of the average age of people working for Rosatomflot: "Young people are attracted to work on new universal nuclear icebreakers: modern domestic equipment, unique technologies and reliability. But there is also noticeable career growth on these ships. For example, on Project 22220 nuclear-powered ships there are two captains who have not yet turned 42 years old."

Researched and written by World Nuclear News

 

Canadian collaboration to explore isotope production for space exploration

05 January 2024

The Canadian Nuclear Isotope Council (CNIC) and nuclear innovation company Nuclear Promise X (NPX) will explore the feasibility of using Canadian nuclear reactors to produce plutonium-238 (Pu-238) for use in deep space exploration.

An image from the Martian surface captured by NASA's Perseverance rover - which uses a radioisotope thermoelectric generator fuelled by Pu-238 - in March 2021 (Image: NASA/JPL-Caltech)

The study for the Canadian Space Agency will look at how Canada's existing reactors can be used to irradiate neptunium-237 to produce Pu-238, and all costs associated with production, shipment, and extraction of the energy source. The goal will be to understand if it is economically feasible for Canada's reactors to add Pu-238 to their existing isotope production portfolio, leveraging the medical isotope production infrastructure which is already in place.

CNIC members will evaluate the feasibility of production and level of capability, with NPX providing overall project management and engineering.

NPX CEO Bharath Nangia said the company looks to operate "in the intersection" of nuclear energy and innovation. "This is going to be a rewarding and creative project, that has the potential to add a lot of value," he said.

Radioisotope power systems fuelled with Pu-238 have been used in space missions since the early 1960s, using the heat from the radioactive decay of the isotope to provide power and heat continuously over long, deep space missions. Such systems have been used in missions including the Voyager and Pioneer spacecraft, as well as the Perseverance rover. However, supplies of Pu-238 are limited. The US Department of Energy restarted production of the isotope in 2015 after a gap of some 30 years, but Russia - which had previously also supplied the isotope - ceased production in 2009. The European Space Agency is considering the use of americium-241 derived from civil plutonium stockpiles as an alternative.

The CNIC is an independent organisation of representatives from the Canadian health sector, nuclear industry and research bodies, which was established in 2018 to advocate for Canada's role in the production of the world's radioisotope supply. CNIC Chair James Scongack said the study aligns with the organisation's Isotopes for Hope Campaign, launched in 2023. "Together our companies working with NPX hope to demonstrate another example of why radioisotopes are so important to modern society," he said.

Researched and written by World Nuclear News

Blade runners: how LFP batteries brought EV metal markets back to earth

Frik Els | January 5, 2024 | 

LONG READ

LFP’s moonshot landed. Image: Space X

In February 2020, your reporter published the following headline:

Tesla’s China surprise big blow for cobalt, nickel price bulls


In a surprise move, China’s top battery manufacturer CATL will supply Tesla with lithium iron phosphate (LFP) batteries for Model 3 production at its newly built $2 billion factory outside Shanghai.

A follow up a year later confirmed the blow was bigly:

Cobalt, nickel free electric car batteries are a runaway success

Few months in, LFP Model 3 already commands 5% of global EV market, counts for 21% of Tesla battery capacity hitting roads–even before key patent expiry next year.
The iron fist

It’s January 2024 and unfortunately for said cobalt and nickel bulls the blow from the iron fist is even more severe than feared. And the runaway success has become a battery-powered juggernaut.

During that month nearly four years ago when Elon Musk first announced the move to LFP batteries, the cathode chemistry contributed less than 50 tonnes to overall battery metal demand according to Adamas Intelligence, Toronto-based research consultants tracking demand for EV batteries by chemistry, cell supplier and capacity in over 110 countries.

The 50 tonnes LFP batteries used was a fraction of the nearly 13,000 tonnes of lithium, graphite, nickel, manganese and cobalt that found their way into the batteries of electric passenger cars sold during February 2020.

NCM (nickel-cobalt-manganese) and Tesla-Panasonic’s NCA (nickel-cobalt-aluminum) dominated the market for electric cars at the time. LFP fares badly against ternary cathode batteries in terms of energy and power density and therefore charging time and range. LFP’s cold weather performance is also significantly worse but is hard to beat when it comes to cost, is better at thermal stability not catching fire and lifespan.

Musk had long voiced concerns about nickel supply – once saying that he called up all the big mining CEOs to ask them to please make (sic) more nickel. Thrifting out cobalt was also a priority at the Texas-based electric car pioneer with Musk saying publicly that Teslas were virtually cobalt-free while simultaneously inking offtakes with Glencore.

Shanghai surprise. Image: China gigafactory opening January 2019.

At the time LFP was associated with tiny and tinny city runabouts like the Wuling Hongguang Mini EV Macaron (not making that up and yes, there is a cabrio version and it’s called the FreZe Froggy in Europe), end-mile delivery vans, buses and other special purpose vehicles.

Range then as now was a top concern for those looking to electrify and the Wuling Mini EV (a GM joint venture creation now available in the top-of-the-range Gameboy Edition; look it up) only managed around 100 miles in lab conditions.

The Mini EV surpassed the Tesla Model 3 as China’s bestselling EV in 2020. A sticker price of less than $6,000 clinched it.

Like other outlets, this paper was skeptical of the idea that LFP fitted well with Tesla’s luxury and sporty carmaker image.

We were wrong. Sorry again Mr Musk.

Build your nickel, cobalt free dreams

Weeks after Tesla’s Shanghai surprise, LFP received what turned out to be an even bigger boost to its build out.

In March 2020, BYD “unsheathed to safeguard the world” its Blade batteries. The Shenzhen-based auto and battery manufacturer’s breakthrough technology compensated for the inherent energy density limitations of LFP by cramming more cells into battery packs.

BYD even said at the event (online only – this was March 2020 after all) it’s happy to share the technology with all interested parties. Much was made of the safety of LFP over NCM and NCA and BYD would shift its entire range to LFP.

The month of the unsheathing Tesla supplied new owners of its S,3,X models and just launched Y, nine power hours for every one BYD did.

Today BYD’s full electric range outsells Tesla in good months. Factor in its popular plug-ins – also LFP only – and BYD is nearly 600,000 car lengths ahead of Tesla. Tellingly, BYD started out as battery company in the 1990s.

BYD, in which Warren Buffet famously bought a stake in 2008 for $232 million that is still worth some $6 billion after years of steady divestment, sells one out of every five EVs around the world. That’s despite being largely absent from markets outside China (BYD supplies Tesla’s Berlin factory with LFP batteries).

LFP now also runs the gamut of vehicle segments. All the way from the Wuling Hongguang Nano EV (for those who found the Mini a bit too bulky) to BYD’s gigantic YangWang U8. The YangWang wagon can do a 360 degree tank turn, float on water and sail at 1.62 knots and retails for $150,000 making it China’s most expensive EV. It also weighs 3-and-half tonnes (another comparative downside of LFP).

The cheaper of the pack

During the first ten months of 2023 LFP cornered 31% of the global EV battery market in GWh terms despite virtually zero LFP manufacturing capacity outside China. By the time final registrations for the calendar year is tallied, it may well be a third.

Nickel and cobalt containing batteries are now cut out of over half the Chinese market in GWh terms. With China leading the pack, on a cumulative basis LFP recently overtook NCM 523 (roughly 50% Ni, 20% Co, 30% Mn) as the top cathode technology in the global EV parc. Adamas battery capacity data is based on vehicles delivered to end-customers, not wholesale markets or sales to dealerships.

The lemon law. Image: GM

LFP is now also firmly in the driver seat at Tesla. The vast majority of newly sold Model 3s around the world this year has been LFP powered. And the LFP-version of the Model Y occupies the top spot in China in terms of battery capacity deployed.

The cost advantage of LFP shrank considerably as lithium flirted with $80,000 a tonne in 2022, but the decline has been swift since then. In China spot prices for lithium carbonate are below $16,000 a tonne, hydroxide used in hi-nickel batteries dipped below $15,000 last week and spodumene averaged $1,300 a tonne – all down by 80% this year with losses accelerating into the year end, according to Benchmark Mineral Intelligence.

The bounce caused by the trucker strike in central Africa and worries about DRC elections have turned into a dead cat and cobalt enters 2024 below $30,000 a tonne. Coupled with the chaotic highs on London nickel markets giving way to a steady decline to the mid $16,000s a tonne on the LME, lithium’s losses has turned LFP cheap and cheerful again.

Thanks a tonne

The 50 tonnes of LFP induced demand of February 2020 is now 27,000 tonnes per month, to which you can add another few 100 tonnes from best of both worlds LFP-NCM combo batteries finding their way into more and more EVs.

From just over 33% in 2019 before LFP’s coming out year, nickel’s share of global active battery material demand has now fallen below 25%. From a nicely carved niche of 8% in 2019, cobalt clings on at less than 5% now. Manganese is down from close to 9% to 6%.

Nickel’s waning battery metal share comes despite the rapid adoption of nickel rich chemistries for NCM batteries. In early versions of NCM the metals were applied in a roughly 1:1:1 ratio. In 2023 this mix makes up 1% and that’s probably dealerships moving stock forgotten on a lot somewhere.

So far this year NCM 811 with nickel in excess of 80% has cornered more than a fifth of the market in GWh terms, surpassing NCM 523 (roughly 50%+ nickel), according to Adamas. Tesla-Panasonic’s third generation NCA also contains over 80% nickel while NCM cathode chemistries with 90% nickel have been available for a while.

Since lithium carbonate equivalent tonnages and LCE prices are almost always quoted in industry literature it’s easy to forget that tonne for tonne nickel is in fact THE battery metal and on a 100% metal content basis total demand for cobalt and manganese is not that far behind lithium. (New Year’s resolution: Always divide by 5.323.)

Or in the words of Musk in 2016 well before LFP: “Technically, our cells should be called nickel-graphite, because the primary constituent in the cell as a whole is nickel. There’s a little bit of lithium in there, but it’s like the salt on the salad.”
Blade runners

So what would a world look like without blade runners like BYD’s Dolphin, Seal, Han, Song and YangWang and Fangchengbao luxury and off-road brands? What if Tesla opted to employ NCM and NCA for all their vehicles? Or if the LFP cells supplied by CATL – the world’s biggest EV battery maker by a country mile – did not displace a third of its NCM output?

Hold onto your hard hats. It’s not pretty.

The combined battery capacity of EVs (including conventional and mild hybrids) is likely to surpass 700 GWh in 2023, a 45% gain over 2022 and is more than five times the size it was in 2020 and the basket of battery metals in newly sold EVs should easily surpass one million tonnes Adamas predicts.

On an annual basis potential nickel tonnes lost this year is likely to top 107,000 tonnes. For cobalt the metal that went unwanted because of LFP would be more than 38,000 tonnes or roughly 20% of global production last year. Producers of manganese for the battery supply chain would have enjoyed 58,000 tonnes greater annual demand.

Add tonnes lost to LFP to actual use for the year, and you get to 94,000 tonnes of cobalt demand from the EV sector. That’s more than half of cobalt mined each year ending up in the EV industry. For nickel that number is 375,000 tonnes and manganese 127,000 tonnes.

Adamas crunched the numbers on the basis of mid-market NCM 5-Series being the battery doing the work of LFP, not NCM 811. Under the latter scenario the what-could’ve-been for nickel miners would naturally be even more eye-watering.

Also keep in mind the kilograms that end up in every EV are fractions of what would have been procured upstream.

A factor that is sometimes omitted from estimates of metal requirements is low yields in the conversion and manufacturing process.

CATL disclosed 50% yield in its factories early on, exacerbated by ramp up challenges, but even at a steady state your average cell producer turns as much as 30% of the metals entering factory gates into black mass. Between the mine mouth and the gigafactory many more tonnes are never recovered.
Battery bulge

Despite the havoc wreaked by LFP other trends are nickel and cobalt’s friend. The combined battery capacity of EVs sold this year has surged by 45% year on year and is running well ahead of new registrations which are up 33% globally according to Adamas data.

Battery capacity is a better gauge of metal demand than unit sales alone and not only are packs bulking up, the shift to high-nickel batteries has some way to go.

Last year, the sales weighted average full electric vehicle – including LFP-powered units – sold globally contained just under 25 kilograms of nickel in its battery, 7% more than in 2022. The average battery in plug-in hybrids, which are soaring in popularity particularly in China, had 6.4kg of the devil’s copper, a 12% year on year jump.

The big battery bulge is also keeping cobalt weightings from falling more quickly amid ongoing thrifting. On average full electric cars sold globally in 2023 contained 4.8 kilograms and plug-in hybrids 2.2 kg up 5% and 2%.

Nickel’s not classy

It’s perhaps too easy to blame LFP for today’s Ni-Co situation although it was earlier predictions for spectacular demand growth from electric cars that spurred much of the investment in new supply and in the case of nickel, new industrial processes, in the first place.

Global nickel exploration (and by extension cobalt) budgets according to S&P Global Market Intelligence are up 19% this year to a remarkable $732 million, nearly a quarter of what is being spent expanding or finding new copper resources. Nickel only reached annual output of 3 million tonnes last year and that’s after years of robust growth – the copper industry is nearly eight times the size.

HPAL pals. Image: Joko Widodo, Twitter.

Most of the nickel mined around the world still ends up as stainless steel and soft demand from the construction and manufacturing sector on the all-important Chinese market has seen vast surpluses in non-class 1 nickel – not suitable for the battery supply chain – build up.

However, when it comes to demand from the EV sector nickel class matters less today. Large chunks of the China-Indonesia nickel-pig-iron industry is pivoting towards LME and battery friendly products (not so environmentally friendly though).

A rapid ramp up in Indonesia nickel mining thanks to a slew of new high-pressure-acid-leach (HPAL) projects (even attracting investment from as far afield as Dearborn) which are about as environmentally conscious as they sound only adds to the weak fundamentals. Indonesia is already responsible for half of global nickel output and Chinese investment in the archipelago is not slowing.

Cobalt blues

Cobalt probably had most to gain from the EV revolution, it’s a small highly concentrated market, with a few big players and sparkling per tonne prices.

Indeed, Glencore was the first major to herald a new dawn for mining thanks to electric cars, telling investors in 2017 that “as early as 2020, when electric vehicles would still make up only 2% of new vehicle sales, related metal demand already becomes significant.”

That prediction proved conservative – global penetration reached over 5% in 2020.

But cobalt thrifting had become more of a priority after the 2018 spike to above $100,000 tonne scared automakers and ESG-transgression hunters went looking for breaches in the Congo, responsible for over two-thirds of the world’s cobalt.

Nearly all cobalt supply is a byproduct of nickel and copper mining. As far back as 2019, BMW’s offtakers pounced on the only primary cobalt mine in the world, although Canada’s Fortune Minerals could soon provide an opportunity for enterprising automakers.

In an irony that would not be lost on cobalt promotors rumours are swirling that the Swiss miner is considering suspending production at Mutanda again to shore up cobalt prices (as it is, Mutanda’s output is down 15% due to lower grades).

It worked in 2019 when Mutanda still had 20% of the market, but new supply not just from the Congo but also Indonesia where laterites come with a thick layer of cobalt would mute the impact this time around.

Cobalt just does not have much going for it at the moment. Vast cobalt stockpiles from Tenke Fungurume in the DRC are still being sold down and the copper-cobalt mine’s Chinese owner’s expansion plans are well under way. Tenke could soon rival Mutanda as the world’s largest cobalt mine and CMOC overtook Glencore as the world’s number one cobalt producer in 2023.

A new railway through Zambia to Tanzania’s Dar es Salaam port will also alleviate cobalt’s lasting logistics problems which have underpinned prices in the past.

EVs overtook all else when it comes to cobalt demand a few years ago now, so a fall-off at the margins coupled with the small size of the market can quickly and thoroughly depress prices.

Manganese meh

Manganese is often overlooked in the battery metals space and the excitement stirred by Volkswagen’s newly-formed PowerCo battery subsidiary back in March 2021 have long dissipated. At the time, the world’s no 2 carmaker said it’s building six new plants and are looking at high-manganese batteries for its mid-range vehicles.

But last month Volkswagen said a fourth European battery factory is postponed indefinitely, much to the relief of Czech taxpayers who unlike their Canadian counterparts now won’t not have to shoulder billions in subsidies and tax breaks for the honour of having a large battery factory.

Horses for courses. Image: BYD Yangwang U8

Tesla has also expressed interest in manganese, with Musk saying last year high-manganese batteries could be an alternative to LFP, but there’s been little news since then.

Besides, with ore production of 20 million tonnes per year, LMFP and other high-manganese chemistries were never going to light a fire under manganese at the mining level.

That said, downstream battery ready compounds do become scarce from time to time and manganese sulfate in China has not succumbed the way lithium, cobalt and nickel has. Manganese sulphate is down 29% over the last year changing hands for less than $700 a tonne in China.

US, EU 2. Affordable Chinese EVs 0

Another development that could keep the LFP wolf from the door on markets outside China a bit longer is geopolitics and a growing mercantilist approach to trade in the world’s largest economies.

While Chinese-made EVs have close to zero presence in the US, Europeans can and often do choose Geometry, HiPhi, Lynk & Co, Ruixing, Seres, Aeolus, Zeekr, XPeng, Weltmeister (one of China’s earliest EV startups ribbing Wolfsburg and co), and others over homegrown automakers like Volkswagen, Peugeot and Fiat.

Get behind the wheel of a Tesla, Citroen, BMW, Dacia, Honda, Renault or Smart and there’s also a good chance you’re driving a made-in-China vehicle. Last year in terms of battery capacity rolled onto roads, nearly a fifth of the EVs bought by Europeans were made in China.

The EU’s probe of Beijing’s subsidies to its EV industry is all but inevitable to result in tariffs and other measure to limit access to EU car markets while in the US, long-awaited new rules on so-called foreign entities of concern (FEOC) all but eliminates direct Chinese involvement.

In 2024 EVs that contain any battery components manufactured or assembled by China will not be eligible for the US federal tax credit, currently a maximum of $7,500 per vehicle. The incentive cut-off date for any lithium, nickel, cobalt and graphite or other battery metals produced by, or which make their way through China, is 2025. Rare earths used in nearly 90% of all EV motors are already subject to IRA rules.

Not much more than a handful of electric cars sold in the US would qualify. On top of that a bipartisan group of lawmakers also recently asked for Trump era duties of 25% on Chinese automobiles to be doubled and to close any loopholes should China locate factories in Mexico for instance.

The new guidelines may allow US automakers to cut licensing and technology deals with Chinese companies. This should give a green light (although that’s far from clear) to ventures like Ford’s partnership with CATL for its LFP plant in Michigan, and Tesla’s venture in Texas with the Chinese behemoth.

Ford made much of the fact that BlueOval – which is now going to be 40% smaller than originally envisaged – would produce LFP batteries, calling it a “key part” of its US EV plans allowing it to “scale more quickly, making EVs more accessible and affordable for customers.” Given the success of Tesla and BYD with LFP, US automakers are bound to follow in their tracks.

Benchmark Mineral Intelligence sees LFP factory growth outside China at factors more than NCM build-out. But that would not nearly be enough for the rest of the world to embrace the technology at the same speed and scale as China, which itself is expected to grow LFP cathode capacity by more than three times by the end of the decade according to the London-headquartered research firm and pricing agency.

FEOC FOMO

The new EV provisions pitted automakers against mining firms with the former arguing that barring China from directly participating in the US mine-to-megawatt supply chain would be close to impossible given the short timelines and would delay EV adoption by Americans by pushing up costs.

The FEOC rules are intended to complement the Inflation Reduction Act’s requirement that any EV subsidy is conditional on a percentage of all material inputs being sourced either domestically or from a US free trade partner. Currently the threshold is 30% and will rise to 80% in 2027.
Now made in FEOC. Stock image.

An exception was made for foreign subsidiaries of privately-owned Chinese companies in friendly countries, like Australia and Indonesia, but even these entities may fall foul of the rules if they are deemed to be under the control of the Chinese government. Even off-take agreements with Chinese buyers – and for EVs they act as close to a monopsony – may be deemed to bring too much CCP influence to bear.

Miners, justifiably, want rules that speed up and incentivize domestic production, not least because the time from resource discovery to mine production is often counted in decades. The convoluted US permitting system also provides almost zero certainty that investments in new mines will pay off – no matter to what extent miners dot environmental i’s and cross social license to operate t’s.

The one-two punch by US and European authorities may end up bringing the much talked about – and yearned for – premium pricing for metals and minerals supplied by Western firms. What it won’t do is make EVs cheaper and reignite sales growth in these markets.

The road not travelled

While nickel-rich EV batteries will always have a large niche, it’s difficult to shake a sense of what could’ve been:

The latest and greatest Model Y – the global bestselling EV on a GWh basis – coming out of Tesla’s Texas factory has a NCM 811 battery which uses kilograms of cobalt that approach double digits and more than 50kg of nickel. The Cybertruck uses NCA for now, but the bestselling truck in the US, the Rivian R1T is moving to LFP so that the California startup can stop making up in volume what they lose per sale.

Imagine selling 20 million a year – as Musk promised – of these workhorses. Instead, the unwanted tonnes of Ni-Co-Mn will only pile higher and higher. Or stay buried.

According to China’s automobile association November was the first one million month for electric car sales and December is likely to top that. The US market is expanding by more than 50% year on year and penetration rates are still in single digits.

Germany is betting its industrial future, if not its national pride, on the ability to catch up to China in the electric car business. But at the moment three gasoline powered cars leave autohaus lots for each with a charging cable in the frunk.

South Korea is the world’s sixth largest EV market in terms of battery power rolling onto roads in 2023 and the only country that rivals China in battery output despite the absence of LFP capacity. Yet EV penetration is 11% south of the DMZ. As for Japan, its power hours fall short of Belgium’s.

How much of China’s lead can be ascribed to LFP remains up for discussion considering all the moving parts in the EV supply chain. But it’s safe to say China would not have been able to deploy more battery power in electric cars last year than the next 50 countries combined if it hadn’t.
Sodium on the podium

Vehicle electrification is the biggest thing to happen to the automotive and mining industries in a century. The green energy transition more broadly is allowing mining to step outside the shadow of oil and gas.

Crucially, for the first time metal extraction aligns with the goals of the environmental movement (even though the message does not seem to be getting through).

But the story of how LFP crashed into battery metals illuminates something else about mining.


Apart from gold which is money, the arrival of EVs has exposed the industry to the vagaries of technological change like never before.

LFP has severely dented nickel and cobalt prospects and after all metal pricing is all about the marginal tonnes. The next thing to come out of a lab could turn the mine that took decades to build into a white elephant. Substitution has and will keep miners awake at night.

Can sodium-ion batteries do to lithium-ion what iron phosphate did to nickel and cobalt? Three former Tesla executives seem to believe so. The first sodium-ion EVs could go on sale soon and sodium could also salt the field of stationary energy storage.

Until now graphite has been immune to changing chemistries, but the hard carbon anode used for sodium-ion cells can be made from food scraps. Can solid state lithium batteries, which can also do away with graphite for the anode, nix the parts sodium doesn’t?

Crude awakening

Unlike in mining, oil and gas demand destruction is not an intrinsic part of technological progress – at least not one that can play out over a few short years like cobalt and nickel free cells. As the outcome of COP28 showed, it must be imposed.

Indonesia, Russia and the Philippines control some three-quarters of global nickel supply, 70% of the world’s cobalt comes from the Congo and additional tonnes will mostly come from Indonesia.

If copper – ground zero for the energy transition – was crude and output could be turned up or down after a secretariate meeting in Vienna, Chile would be Saudi Arabia and all the Gulf states combined. It would be Peru’s sovereign wealth fund dangling $1 billion in front of a French soccer player.

But as platinum group metal watchers must realise by now, establishing an Opec+ style cartel will forever be a pipe dream in mining.

Nickel is not the new gold and no, lithium is not the new oil.

Yet here we are.

Back at the salt mines.

China’s coal king is catching up with its new battery champions

Bloomberg News | January 5, 2024 | 

A coal mine pit located in Qinghai Province, China. Stock image.

China’s battery giants are at the forefront of the global energy transition, but on the stock market they’re being outshined by the dirtiest fossil fuel.


Coal miner China Shenhua Energy Co.’s market capitalization is closing in on that of Contemporary Amperex Technology Co. Ltd. after surpassing BYD Co. in late November. It’s a stark difference from February last year, when CATL’s valuation was more than double that of Shenhua’s.




The diverging fortunes underscore the staying power of fossil fuels even as the world tries to decarbonize. Shenhua, China’s largest listed coal miner, has seen its shares rise 23% in the past year as authorities pushed mining output to record highs in a drive for energy security. The company’s shares in Hong Kong are near the highest level in more than a decade.

CATL and BYD’s share prices have plunged even as they’ve experienced real-world success. CATL dominates global battery sales, but increased competition has sent prices for energy storage devices falling. BYD overtook Tesla Inc. last quarter to become the world’s biggest electric vehicle producer, but is mired in a price war with rivals.

Still, analysts are betting on a rebound for the companies behind the energy transition. The average 12-month price targets for CATL and BYD are 74% and 61% above current levels, according to data compiled by Bloomberg. By contrast, Shenhua shares closed just above the average target on Thursday.

(By Dan Murtaugh)

Endeavour Mining plunges after firing CEO for serious misconduct

Bloomberg News | January 5, 2024 |

Sabodala-Massawa CIL plant. Credit: Endeavour Mining

Endeavour Mining Plc tumbled after announcing it fired chief executive officer Sébastien de Montessus, citing “serious misconduct” and irregularities tied to the sale of a company asset.


The London-based gold miner removed de Montessus after discovering an alleged “irregular payment instruction” of $5.9 million related to an asset sale, it said in a statement. The company also revealed it recently conducted an external investigation into the CEO’s personal conduct with colleagues, following whistle-blowing allegations from October.

Endeavour, which is backed by Egyptian billionaire Naguib Sawiris, traded 12% lower in London on Friday, after falling 10% in Toronto following the announcement on Thursday. The company has named mining industry veteran and deputy chairman Ian Cockerill as CEO.

In a statement on Thursday, De Montessus said that in 2021 he instructed an unnamed creditor of Endeavour to offset an amount owed to the company for essential security equipment, to protect its partners and employees in an unspecified conflict zone.

“The decision had no additional cost to the company and did not benefit me personally in any way,” de Montessus said. “I omitted to inform the board that I had arranged for this offset, which I have freely accepted was a lapse in judgment.”

He said he was given 48 hours’ notice of the concerns and “no proper opportunity” to respond to them before he was fired.

“As to the other investigation: no misconduct of any kind was discovered because none occurred,” de Montessus said. “I am proud of what we have built together at Endeavour,” he said, adding he would “take my time to consider my position with my advisers.”

The dramatic termination ends de Montessus’s seven-year stint at the helm of Endeavour. The former executive transformed the company through a flurry of dealmaking and mine-building that replaced small and high-cost operations with new flagship projects. The company operates gold mines in West Africa with assets across Senegal, Ivory Coast and Burkina Faso.

Neither the company or de Montessus disclosed the asset in question or its location. The company said it became aware of the payment instruction during a review of acquisitions and disposals, which is ongoing. In the past two years, Endeavor has sold mines in Burkina Faso and its stake in an Ivory Coast gold project.

Endeavour has been among the most acquisitive mining companies in recent years, having bought Teranga Gold Corp. and rival Semafo Inc. in 2020.

It has also backed away from deals, abandoning an attempt to buy Centamin Plc, which owns the Sukari mine in Egypt, after its advances were rebuffed. In 2017, the company ended talks on a potential combination with Acacia Mining Plc, a Tanzanian miner that has since been reabsorbed by Barrick Gold Corp.

Cockerill, who is replacing de Montessus effective immediately, previously served as CEO of Gold Fields Ltd. and Anglo Coal, a subsidiary of Anglo American Plc.

(By Jacob Lorinc and Thomas Biesheuvel)

Nippon Steel confident of completing US Steel acquisition

Bloomberg | January 5, 2024 | 

Credit: US Steel

Nippon Steel is confident of successfully completing its planned acquisition of US Steel, despite opposition from labor union and certain US senators, its president said on Friday.


The world’s fourth-largest steelmaker’s planned $14.9 billion deal has drawn criticism from Democratic and Republican lawmakers and the powerful United Steelworkers union, the main union at the third-largest US steel company.


The White House has also expressed the need for “serious scrutiny” of the deal given the company’s role in U.S. steel production that the government regards as critical to national security.

“I believe we can successfully complete the planned acquisition,” Nippon Steel President Eiji Hashimoto told reporters on the sideline of the Japan Iron and Steel Federation’s new year party on Friday.

“The deal poses no harm to America… as we will make investment in line with the economic security strategies of the United States and other Western nations,” he said.

Hashimoto said the substantial investment from Nippon Steel and the use of the Japanese company’s advanced steel-making technology would be advantageous to the United States.

He also said the current labour agreement would be maintained, adding: “Taking good care of our employees and labour union is our speciality.”

Acknowledging the challenges, Hashimoto said that Nippon Steel had anticipated hurdles, including differing opinions, objections, and government’s scrutiny.

(Reporting by Yuka Obayashi; editing by Barbara Lewis)

Workers at First Quantum’s shuttered Panama mine warn of threat to ‘invade’ site

Reuters | January 4, 2024 

Cobre Panama copper mine. (Image courtesy of Franco-Nevada assets handbook.)

The union representing workers at First Quantum’s copper mine in Panama on Wednesday warned of another union’s plan to “invade” the site next week, the latest face-off over the now-shuttered mine that provoked nationwide protests last year.


The UTRAMIPA miners’ union said in a statement it was “worried” by the plans of the Suntracs construction workers union, the largest in the country, to force its way into the Canadian miner’s operation on Jan. 9.

First Quantum in late November suspended commercial production at the mine and put it into care and maintenance, but the company still has equipment and workers at the site.

Suntracs, which does not represent the mine’s workers, in recent months led protests against First Quantum and backed blockades that strangled the mine’s ability to bring in supplies.


A Suntracs spokesperson said on Wednesday it would “symbolically close” the mine on Jan. 9, a national holiday commemorating anti-US demonstrations in 1964 over the sovereignty of the Panama Canal zone in which more than 20 Panamanians were killed.

“We’re calling all Panamanians to come with us, to go where our sovereignty was violated,” Suntracs union leader Saul Mendez said in a press conference late last month.

The miners’ union said Suntracs had entered the site by force in 2016 and 2018.

First Quantum did not immediately respond to a request for comment on the plans for the Jan. 9 protests at the mine.

Panama’s Supreme Court in late November ruled First Quantum’s lucrative contract to operate in the country unconstitutional, prompting the government to order its “definitive” shutdown.

The mine had previously accounted for some 5% of Panama’s gross domestic product, but became a flashpoint as previously small anti-mining protests grew into a larger anti-government movement.

The mine’s union called for aid from the government in protecting the site, citing previous incidents of violence against workers and the need to avoid an environmental disaster.

Union leader Michael Camacho said that they had yet to receive a response from authorities and that First Quantum had not given instructions to ensure workers’ safety.

(By Valentine Hilaire, Eli Moreno and Kylie Madry; Editing by Jamie Freed)

First Quantum said to be in talks with Jiangxi over Zambian mines

Cecilia Jamasmie | January 5, 2024 

The Sentinel open-pit copper mine. (Image courtesy of First Quantum Minerals.)

Canadian miner First Quantum Minerals (TSX: FM), which is reeling from the forced closure of its flagship copper mine in Panama, is said to be in talks to sell a stake in its Zambian operations to help shore its finances.


A person familiar with the matter told Reuters on Friday that Chinese state-owned Jiangxi Copper Corporation has already approached First Quantum on the matter, but that no agreement has been reached so far.

The Vancouver-based miner is the sole owner of the Sentinel copper mine and has a 80% stake in the Kansanshi mine, both in Zambia.

Jiangxi, First Quantum’s top shareholder, is said to be evaluating the acquisition of one of the two mines or a stake in one of them, according to the report.

First Quantum’s presence in Zambia, Africa’s second-largest copper producer, also includes the Fishtie copper project, near the border with the Democratic Republic of Congo.

The companies, which have been exploring the asset since 2012, recently announced it would speed up development with the goal of beginning production in 2026.

The news adds to several other rumours about First Quantum’s future, which include an alleged takeover in the making by fellow Canadian miner Barrick Gold (TSX: ABX), (NYSE: GOLD).

The gold giant has been expanding into copper as of late as it aims to double production of the metal to 1 billion pounds by 2031. It has already committed $2 billion to the development of the Lumwana super pit expansion in Zambia, and has a stake in the Reko Diq mine in Pakistan, expected to be one of world’s 10 largest when it reaches production in 2028.

First Quantum said it plans to provide an update on the company’s plan to meet its debt obligations by the end of January.

UN economic forecast cites conflicts, sluggish trade, high interest and climate disasters

Edith M. Lederer, The Associated Press

The United Nations issued a somber global economic forecast for 2024 on Thursday, pointing to challenges from escalating conflicts, sluggish global trade, persistently high interest rates and increasing climate disasters.

In its flagship economic report, the U.N. projected that global economic growth would slow to 2.4 per cent this year from an estimated 2.7 per cent in 2023, which exceeds expectations. But both are still below the three per cent growth rate before the COVID-19 pandemic began in 2020, it said.

The U.N. forecast is lower than those of the International Monetary Fund in October and the Organization for Economic Cooperation and Development in late November.

The IMF said it expects global growth to slow from an expected three per cent in 2023 to 2.9 per cent in 2024. The Paris-based OECD, comprising 38 mainly developed countries, estimated that international growth would also slow from an expected 2.9 per cent in 2023 to 2.7 per cent in 2024.

The U.N.’s report -- World Economic Situation and Prospects 2024 -- warned that the prospects of prolonged tighter credit conditions and higher borrowing costs present “strong headwinds” for a world economy saddled with debt, especially in poorer developing countries, and needing investment to resuscitate growth.

Shantanu Mukherjee, director of the U.N.’s Economic Analysis and Policy Division, said fears of a recession in 2023 were averted mainly due to the United States, the world’s largest economy, curbing high inflation without putting the brakes on the economy.

But he told a news conference launching the report: “We’re still not out of the danger zone.”

Mukherjee said that’s because the unsettled situation in the world could fuel inflation. For example, another supply chain shock or problem in fuel availability or distribution could prompt another interest rate hike to bring the situation under control, he said.

“We’re not expecting a recession, per se, but because there is volatility in the environment around us, this is the major source of risk,” he said.

Very high interest rates for a long time and the threat of possible shocks to prices contribute to “quite a difficult balancing act,” Mukherjee said. “So that’s really why we said that we are not yet out of the woods.”

According to the report, global inflation, which was at 8.1 per cent in 2022, is estimated to have declined to 5.7 per cent in 2023, and is projected to decline further to 3.9 per cent in 2023.

But in about a quarter of all developing countries, annual inflation is projected to exceed 10 per cent this year, it said.

While the U.S. economy performed “remarkably well” in 2023, the report said growth is expected to decline from an estimated 2.5 per cent in 2023 to 1.4 per cent this year.

“Amid falling household savings, high interest rates, and a gradually softening labor market, consumer spending is expected to weaken in 2024 and investment is projected to remain sluggish,” the U.N. said. “While the likelihood of a hard landing has declined considerably, the United States economy will face significant downside risks from deteriorating labor, housing and financial markets.”

With elevated inflation and high interest rates, the report said Europe faces “a challenging economic outlook.”

GDP in the European Union is forecast to expand from 0.5 per cent in 2023 to 1.2 per cent in 2024, it said, with the increase driven by “a pick-up in consumer spending as price pressures ease, real wages rise, and labor markets remain robust.”

Japan, the world's fourth largest economy, is projected to see economic growth slow from 1.7 per cent in 2023 to 1.2 per cent this year despite the country’s monetary and fiscal policies, the report said, “Rising inflation may signal an end from the deflationary trend that persisted for more than two decades” in the country, it said.

In China, the world’s second-largest economy, the U.N. said recovery from COVID lockdowns has been more gradual than expected “amid domestic and international headwinds.

With economic growth of just 3.0 per cent in 2022, the report said China turned a corner during the second half of 2023 with the growth rate reaching 5.3 per cent. But it said the combination of a weak property sector and faltering external demand for its products “will nudge growth down moderately to 4.7 per cent in 2024.

In developing regions, the U.N. said economic growth in Africa is projected to remain weak with a slight increase from an average of 3.3 per cent in 2023 to 3.5 per cent in 2024.

“The unfolding climate crisis and extreme weather events will undermine agricultural output and tourism, while geopolitical instability will continue to adversely impact several subregions … especially the Sahel and North Africa,” the report said.

The U.N. forecasts a moderate slowdown in East Asia economies from 4.9 per cent in 2023 to 4.6 per cent in 2024. In Western Asia, GDP is forecast to grow by 2.9 per cent in 2024, up from 1.7 per cent in 2023.

In South Asia, GDP rose by an estimated 5.3 per cent last year and is projected to increase by 5.2 per cent in 2024, “driven by a robust expansion in India, which remains the fastest growing large economy in the world.” Its growth is forecast to reach 6.2 per cent this year, similar to its projected 6.3 per cent increase in 2023.

 

U.S. employers add a surprisingly strong 216,000 jobs in a sign of continued economic strength

Paul Wiseman, The Associated Press

The nation’s employers added a robust 216,000 jobs last month, the latest sign that the American job market remains resilient even in the face of sharply higher interest rates.

Friday’s report from the Labor Department showed that December’s job gain exceeded the 173,000 that were added in November. The unemployment rate was unchanged at 3.7 per cent — the 23rd straight month that joblessness has remained below four per cent.

The latest data reflect an economy and a job market that are decelerating back to pre-pandemic norms. Hiring remains steady, and while employers are posting fewer openings, they are not laying off many workers.

Despite the low unemployment and cooling inflation, polls show that many Americans are dissatisfied with the economy. That disconnect, which will likely be an issue in the 2024 elections, has puzzled economists and political analysts.

A key factor, though, is the public’s exasperation with higher prices. Though inflation has been falling more or less steadily for a year and a half, prices are still 17 per cent higher than they were before the inflation surge began.

Fed Chair Jerome Powell warned of hard times ahead after the central bank began jacking up interest rates in the spring of 2022 to attack high inflation. Most economists predicted that the much higher borrowing costs that resulted would cause a recession, with layoffs and rising unemployment, in 2023.

Yet the recession never arrived, and none appears to be on the horizon. The nation’s labour market, though cooler than in the sizzling-hot years of 2022 and 2023, is still cranking out enough jobs to keep the unemployment rate near historic lows.

The resilience of the job market has been matched by the durability of the overall economy. Far from collapsing into a recession, the U.S. gross domestic product — the total output of goods and services — grew at a vigorous 4.9 per cent annual pace from July through September. Strong consumer spending and business investment drove much of the expansion.

At the same time, average hourly pay has outpaced inflation over the past year, leaving Americans with more money to spend. Indeed, as they did for much of 2023, consumers, a huge engine for U.S. economic growth, hit the stores in November, shopped online, went out to restaurants or traveled.

Since March 2022, the Fed has raised its benchmark interest rate 11 times, lifting it to a 22-year high of about 5.4 per cent. Those higher rates have made borrowing costlier for companies and households, but they are on their way toward achieving their goal: Conquering inflation.

Consumer prices were up 3.1 per cent in November from a year earlier, down drastically from a four-decade high 9.1 per cent in June 2022. The Fed is so satisfied with the progress so far that it hasn’t raised rates since July and has signaled that it expects to make three rate cuts this year.

Beyond a hard hit to the housing market, higher rates haven’t exerted much damage across the broader economy. Many industry sectors, including healthcare and government, have proved relatively resistant to higher interest rates.

The labour market’s cool-down has been nowhere near enough to signal that a recession is on the way. Normally, slowing job growth might be a cause for concern. But under the current circumstances, with inflation still above the Fed’s two per cent annual target, a more moderate pace of hiring is seen as just what the economy needs.

Lower demand for workers tends to ease the pressure on employers to raise pay to keep or attract workers and to pass on their higher labour costs to customers by raising prices.

New bridge connecting Detroit to Canada 

won't open until fall 2025

The Associated Press

The freighter Manitowoc makes its way down the Detroit River past continuing construction on the Gordie Howe International Bridge, Canadian span, in Detroit on Dec. 29, 2023. (Daniel Mears /Detroit News via AP)

DETROIT — A second bridge connecting Detroit and Canada over the Detroit River won't open for travel until fall 2025, months later than anticipated, officials said Thursday.

Officials cited construction disruptions in the U.S. and Canada related to the COVID-19 pandemic.

The Gordie Howe International Bridge, named for a Canadian who played hockey for the NHL's Detroit Red Wings, began in 2018 and was last scheduled to be completed in 2024.

The target now is September 2025, though the bridge deck should be finished this year.

"Our project team is pleased that the impact to the construction schedule is limited to only 10 months beyond the original contracted completion date," said Charl van Niekerk, chief executive of the Windsor-Detroit Bridge Authority.

The project carries a price tag of $6.4 billion, up from $5.7 billion.

The Howe bridge will join the privately owned Ambassador Bridge as the second span connecting Detroit and Windsor, Ontario.

The Ambassador Bridge is considered the busiest U.S.-Canadian border crossing, carrying 25 per cent of all trade between the two countries. It plays an especially important role in auto manufacturing.

Canadian government will foot extra $700M

in Gordie Howe bridge delays

CBC
Thu, January 4, 2024

Crews work on the Canadian side of the Gordie Howe International Bridge in July. (Patrick Morrell/CBC - image credit)

The Gordie Howe International Bridge is now slated to open in September 2025, a delay of 10 months from its original targeted completion date in 2024.

The new targeted opening date means the international border crossing will now cost $6.4 billion Cdn, up from the original $5.7-billion cost estimate — a cost that will be borne entirely by the Canadian government, a Windsor-Detroit Bridge Authority spokesperson said.

"The project is still entirely funded by the Government of Canada," said Heather Grondin, the chief relations officer for the Windsor-Detroit Bridge Authority (WDBA). "So that does include this increase in the contract value."

Bridging North America, the private-sector partner on the project, would only absorb costs like fluctuations in the exchange rate or construction increases that are not caused by an unplanned event like the pandemic, Grondin said.

The new international border crossing was scheduled to be completed in November but "experienced unprecedented disruptions as a result of the COVID-19 global pandemic," the bridge authority said in a press release issued Thursday morning.

"The disruptions were even more prevalent for the Gordie Howe International Bridge project given the differing applicable restrictions in the U.S. and Canada, combined with the ramping up of construction activities in early 2020," the statement reads.

The bridge authority says the contract between the Windsor-Detroit Bridge Authority (WDBA) and Bridging North America (BNA) has been updated to reflect the new completion date.

Grondin says the increased project cost will not impact the eventual toll to use the bridge — instead the government will just take longer to recoup its costs on the project via tolls.

The first vehicles are expected to cross the bridge in fall 2025. Last year was "the busiest construction year to date" on the project, the bridge authority says.

The delay comes with a one-year extension to the bridge's community benefits plan worth $3 million Cdn that will be split between Canada and the United States over the 2025-26 fiscal year.

In 2023 the bridge towers reached their full height of 220 metres. Grondin says the bridge itself will finally meet in the middle over the Detroit River this summer — but that does not mean the bridge will be ready to open.

The news was initially shared by Windsor West MP Brian Masse on Facebook late Wednesday night.

"We're doing this to improve the conditions in our community that have been really difficult to deal with," Masse told CBC News. "Getting $3 million for community benefits is a plus and it really does make a difference because we'll now have to wait a little longer, but at the same time we'll see some improvements in our community and that's the important part."

Mary Ann Cudderman is a business owner in Sandwich, the neighbourhood where the Canadian portion of the bridge is located, and sits on the committee advising on the bridge's community benefits plan.

"It's a little disappointing to tell you the truth. I think we're all looking forward to this new bridge here in this area and getting construction over with and done," Cudderman said. "But I think we can understand the challenges they have met especially with COVID."

Proceeds from the community benefits plan are awarded to non-profit organizations. Cudderman says personally she'd like to see funds address children's issues and poverty in the area.

"We're really looking forward to having this new bridge and having these community benefits," Cudderman said. "I think anyone that crosses the bridge is looking forward to the bridge being built.

"We need it."