Nexa Resources halts Peru zinc mine due to blockade

Cecilia Jamasmie | February 8, 2024 | 

Latin America-focused Nexa Resources (NYSE: NEXA) has halted production at its Atacocha San Gerardo open pit zinc mine in Peru due to a road blockade by the Joraoniyoc community since earlier this week.


The zinc producer, controlled by Brazilian holding company Votorantim SA, said the obstruction of the road to access the mine has not had a material impact on Atacocha’s production to date.

Mine production has been suspended, and activities are limited to critical operations with a minimum workforce to ensure proper maintenance, Nexa said.

On a weekly basis, the Atacocha mine produces about 200 tonnes of zinc, which is less than 3% of the company’s total zinc production, it said.

Mining conflicts in Peru have risen over the past two years as empowered local communities increased demands under the administration of leftist ex-President Pedro Castillo, who was impeached in December 2022 and replaced by vice president Dina Boluarte.

Nexa itself has faced three recent road blockades at Atacocha. The first one, in March 2022, cost the miner 300 tonnes of lost zinc production. It was also affected by another blockage in August the same year, and in January 2023.

Nexa has nine operations distributed between Brazil and Peru – three of which are refineries and six mines. including the largest underground zinc mine in Peru, Cerro Lindo, and the largest zinc refinery in the Americas, Cajamarquilla.

Peru is the world’s no. 2 copper producer after Chile and an important producer of zinc.

The Atacocha mine is in the province of Pasco, Peru. (Image courtesy of Nexa Resources.)

Portuguese prosecutors seek to annul environment permit for Savannah lithium mine

Reuters | February 8, 2024 |

Mina do Barroso is set to be Europe’s first significant producer of spodumene.

 (Image courtesy of Savannah Resources.)

Portuguese prosecutors have asked a judge to annul an environment permit for a lithium mining project being developed by London-based Savannah Resources, alleging various legal infringements, a court document seen by Reuters showed.


The document, filed by the Prosecutor’s Office in December and seen by Reuters on Thursday, upheld a lawsuit filed by a municipality in northern Portugal that sought to block Savannah from developing what could become western Europe’s largest lithium mine.

Last year Portugal’s environmental agency APA gave environmental approval, conditional on some remedies, for Savannah Resources to develop a mine in Boticas, in the Barroso region of northern Portugal, a world heritage site for agriculture since 2018.

The Prosecutor’s Office requested that the Administrative Court of Mirandela in northern Portugal annul the environmental approval of the Boticas mine as it “suffers from the defect of violating the law”, citing risks “known” to APA that the mine could endanger the heritage site and Portugal’s international commitments.

It also said that APA had failed to correctly assess mining waste management needs or water contamination risks, and did not consider the real joint impact from the Savannah mine and another mine being developed by Portuguese mining company Lusorecursos to extract battery-grade lithium in Montalegre, northern Portugal, despite their proximity and large scale.

APA did not reply to a Reuters request for comment.

Savannah said it was “ready to address the concerns” of the prosecutors and cited advice from its lawyers “that the lawsuit is without foundation” and does not impact the project’s activities.

The Savannah mine was part of a wider probe last year by Portuguese prosecutors into alleged illegalities in lithium and “green” hydrogen deals.

The probe led to the resignation in November of then Prime Minister Antonio Costa after prosecutors detained his chief of staff and named APA head Nuno Lacasta as a formal suspect in alleged illegalities. Costa and Lacasta have denied any wrongdoing.

Savannah said in January that after a full legal assessment which included due diligence by independent experts of relevant accounts, facts and documents, “Savannah can confidently reaffirm its solid legal standing.”

With more than 60,000 tonnes of known lithium reserves, Portugal has been seen as central to Europe’s efforts to secure more of the battery value chain and cut reliance on imports.

Catarina Alves Scarrott, a campaigner against mining in Barroso, viewed the prosecutors’ move as a victory, but said there was no timing yet for a court decision.

(By Sergio Goncalves, Patricia Rua and Andrei Khalip; Editing by Susan Fenton)

Billionaire Adani secures ore for $1.2 billion copper smelter

Bloomberg News | February 9, 2024 | 

Gautam Adani. (Image: Headlines Today | YouTube.)

Indian billionaire Gautam Adani’s conglomerate has signed contracts to buy 1.6 million tons a year of copper concentrate for the world’s largest single-location smelter for the industrial metal.


The first 500,000 tons of capacity at the $1.2 billion facility in Mundra in the western state of Gujarat is set to start operations next month, according to Vinay Prakash, chief executive officer at Adani Natural Resources. This will be expanded to 1 million tons by March 2029 to cater for a forecast doubling of Indian copper demand by the end of the decade, he said in an interview.

Adani Enterprises Ltd., the port-to-power conglomerate’s flagship company, is seeking resource security in critical minerals and is resuming capital expenditure now that its shares have stabilized after a short-seller attack in January 2023. The smelter is starting up just as the global copper market experiences a collapse in the fees that processors charge miners because there’s not enough ore to go around.

A combination of high operating costs and the low fees means smelters and refiners globally may be forced to curtail production, Prakash said. “Our plant will be a low-cost producer with higher metal recovery and this will help us to remain competitive in the market.”

The concentrate deals are a mix of short- and long-term arrangements, Prakash said, without disclosing the suppliers. Concentrate supply is likely to increase in the medium- to long-term as more mining projects, including in Africa and Peru, come on stream, he said.

(By P R Sanjai and Swansy Afonso)

EU, US to align global minerals push against China’s supply grip

Bloomberg News | February 9, 2024 |

Credit: Minerals Security Partnership

The US and the European Union are in talks to merge a core area of their efforts to engage suppliers of critical minerals in resource-rich nations, seeking to streamline their push against China’s dominance in materials key for future technologies.


The aim is to combine the EU’s high-level policy approach with the US focus on specific projects, according to people familiar with the discussions.


Specifically, the move would merge the EU’s critical raw materials club concept with the Biden administration’s flagship Minerals Security Partnership. It comes after the EU delayed plans to launch its own program in Dubai last year at the COP 28 climate summit, said the people, who asked not to be identified describing internal policy discussions.

The new initiative, known broadly as a “minerals security partnership forum,” would align outreach efforts to buyers in developed countries and resource-rich nations to cooperate on projects and policies, said the people.

As part of their broader economic security strategies, Washington and Brussels are seeking to counter China’s domination of the supply chain for so-called critical minerals, a broad term that includes inputs for electrical vehicles and other green energy technologies.


Key to their combined efforts is working with resource-rich nations to develop standards on investment, trade, research and environmental issues that the US and EU see as an alternative to working with China.

The allies, who’ve identified more than a dozen potential projects, have taken on a daunting challenge. The lengthy and expensive process of developing mining or refining projects means Beijing’s dominance will likely continue for decades. And US officials have conceded it’s impossible to fully replace China.

US and EU officials aim to reach an agreement later this month and officially launch the project in March, according to one of the people. They will discuss the plan at the Munich Security Conference in Germany next week, said a separate person.

The EU and the US are discussing how to optimize their efforts in fostering international cooperation on critical raw materials, Olof Gill, a spokesperson for the European Commission, said in a response to questions, adding that an important aspect of these talks is to find “the best synergies” between the EU’s critical raw materials club and other international activities.

A US State Department official, who asked not to be identified discussing internal matters, said the two sides believe separate outreach plans to resource-rich nations duplicated efforts and risked creating confusion. They also want to ensure alignment on the broader goal of reducing the West’s dependence on China for the production and processing of many critical minerals like lithium, manganese and cobalt, and properly coordinate mobilizing state finances and private companies, the official said.

The EU was already a part of the US-led minerals security partnership alongside Australia, Canada, Finland, France, Germany, India, Italy, Japan, South Korea, the UK and others, which aims to funnel foreign investment into the green energy sector.

The EU has also signed its own minerals pacts with several countries, including the Democratic Republic of Congo, which supplies about 70% of the world’s supply of cobalt, and Zambia.

As well, Central Asian members of the C5+1 group — which includes Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan — have also expressed interest in the minerals security partnership, the US State Department official said.

Separate EU-US talks on a bilateral critical minerals agreement remain stalled over labor rights and concerns over the feasibility of adopting a trade pact in an election year.

US officials, who have already struck a bilateral deal with Japan, have wanted to kick-start new mining and processing projects by acting as a bridge between private companies seeking raw materials and developing nations that have relied in recent years mainly on China for resource investments.

(By Alberto Nardelli and Iain Marlow)

Syrah starts active anode material production in Louisiana

This makes the graphite miner the first commercial-scale vertically integrated natural graphite AAM supplier outside China

Staff Writer | February 9, 2024 | 

Syrah’s Vidalia facility in Louisiana. Credit: Syrah Resources

Syrah Resources announced on Friday the start of active anode material (AAM) production at its Vidalia facility in Louisiana.


This makes the graphite miner the first commercial-scale vertically integrated natural graphite AAM supplier outside China, said CEO Shaun Verner.

Vidalia processes natural graphite from Syrah’s Balama graphite operations in Mozambique.

Syrah is expected to supply 8 kilotonnes per annum (kpta) of AAM from Vidalia to Tesla under an existing offtake agreement, subject to production ramp-up and finalizing qualification.

The miner is progressing the expansion of Vidalia to 45 ktpa capacity, inclusive of 11.25 ktpa, to readiness for a final investment decision.

The company said it has produced unpurified spherical graphite from the front-end milling area since October 2023 to build inventory of precursor value-added material in preparation for the commissioning of the purification and furnace areas in January 2024.

The first purified spherical graphite material was produced in late January 2024.

The heating cycle for the first furnace line commenced in early January 2024, and carbonization of Syrah’s first pitch-coated purified spherical graphite is now complete.

Syrah has applied to the US Department of Energy (DOE) for an additional loan of $350 million under DOE’s Advanced Technology Vehicles Manufacturing loan program to support funding of the Vidalia expansion project, and DOE is progressing due diligence.

Shares of Syrah were down 3.3% by 12:10 p.m. EDT. The company has a market capitalization of $238 million.

Canada Nickel plans to raise $1 billion for processing plant

Reuters | February 8, 2024 | 

Crawford nickel-cobalt sulphide project. (Image courtesy of Canada Nickel Company.)

Canada Nickel Co on Thursday said it is looking to raise $1 billion to build a nickel processing plant, as it seeks to position itself as an alternative supplier of the metal used in car and electric battery vehicles.


The processing plant in Ontario is expected to begin production in 2027 and process 80,000 tonnes of nickel annually. Nickel production is currently concentrated in Asia, and the company hopes that the new plant will help increase supplies from cleaner sources.

The company is in discussions with the Canadian government, the United States Department of Defense and other partners in the battery manufacturing sector to raise the funding, CEO Mark Selby told Reuters.

The miner, which counts Samsung SDI and Agnico Eagle Mines as shareholders, is also building a nickel mine in Ontario and hopes to integrate the battery supply chain with the proposed processing plant, according to Selby.

The company’s stock rose 3.6% to C$1.42. The Toronto Stock Exchange Venture-listed miner has a market value of C$194 million.

The announcement by NetZero Metals, a unit of Canada Nickel, comes as large global nickel producers cut costs and reduce production after prices dropped 40% in the last year.

But Selby expects demand for the metal to grow.

“The car companies and battery supply chain know that the amount of nickel needed in North America is going to double and triple over the next decade,” Selby said, adding that what these buyers want is responsibly produced, clean, green nickel in North America.

(By Divya Rajagopal; Editing by Mark Porter)

Rio Tinto, BHP tie up in Australian ‘green iron’

Reuters | February 8, 2024 | 

Jimblebar, one of seven iron ore mines BHP operates in the Pilbara. 

(Image courtesy of AGC)

Mining rivals Rio Tinto and BHP Group joined with Australia’s largest steelmaker on Friday to announce a pilot “green iron” project to help cut emissions for steelmakers around the globe who rely on Australian iron ore.


Australia’s two largest iron ore producers and BlueScope Steel will study the feasibility of building a pilot ironmaking electric smelting furnace (ESF), the country’s first, with a potential start date of 2027, according to a joint statement on Friday.

If successful, it could help slash the emissions involved in preparing iron for steelmaking. This “green iron” could help cut the carbon footprint of steelmakers around the world who rely on Australian iron ore.

The production of steel, a key material for infrastructure and the net-zero energy transition, currently contributes around 8% of global carbon emissions.

“The carbon intensity of iron and steelmaking requires profound change to meet the needs of our planet and our climate objectives,” Rio Tinto Iron Ore chief executive Simon Trott said.

One potential ambition for the project could be to make commercial quantities of “green iron” that could then be shipped to steelmakers in Asia, said Tania Archibald, CEO of BlueScope.

However, the pilot would need to run for several years, so commercial production was unlikely before the 2030s, she added.

The announcement was made at BlueScope’s Port Kembla steelmaking operations, Australia’s largest steel plant, roughly 75 km (47 miles) south of Sydney.

If successful, this would be the first partnership between the two global miners on a downstream project.

“If we can crack it, it’s going to be a significant uptick for the mining industry … Australia in general and the globe,” Tim Day, BHP’s incoming Western Australia iron ore asset president, said at a news conference.

The project will incorporate work done since October 2021 between Rio and BlueScope on ways to cut emissions during an earlier stage of the iron ore processing process by replacing coal with green hydrogen, known as direct reduction.

Iron ore could then be converted to direct reduced iron (DRI) before it is fed into an ESF. Together, the DRI-ESF equipment could cut emissions by more than 80%, the companies said in the joint statement.

The companies said they would assess several locations in Australia, the world’s top exporter of iron ore, for the proposed pilot facility.

The pre-feasibility study work program is expected to conclude at year-end.

Costs for the project will be shared equally, although the companies declined to provide any estimates.

BHP is also working with global engineering firm Hatch to design a similar electric smelting furnace pilot plant in Australia.

(By Lewis Jackson, Melanie Burton and Praveen Menon; Editing by Stephen Coates)

Mexican president proposes ban on open-pit mining

Staff Writer | February 10, 2024 | 

Mexican President Andrés Manuel López Obrador presenting constitutional reforms in February 2024.

 (Image by the Presidential Office, Twitter/X.)

Mexican President Andrés Manuel López Obrador, known as AMLO, presented before parliament a series of constitutional reforms among which there’s a proposal to modify Article 27 so that it prohibits open-pit mining.


In detail, his proposal calls for banning the granting of open-pit mining concessions and activities related to the exploration, exploitation, benefit or use of minerals, metals or metalloids using the open-pit method.

To argue his case, López Obrador said that open-pit mining causes severe environmental damage and uses excessive water that could be supplied to water-scarce communities.

“It is clear that open-pit mining transgresses human rights by affecting the right to a healthy environment and good health,” his proposal states. “The most significant effects are evident in the communities and towns near project areas, placing them in a situation of vulnerability and inequality.”

The proposal, however, does not mention underground mining.

The motion is expected to revive hostilities between the Mexican government and big industry players, as the country’s oldest and largest mines are open-pit operations. In total, Mexico hosts 264 mines that extract surface minerals, most of them located in Chihuahua, Zacatecas, Sonora and San Luis Potosí.

Top producers such as Grupo Mexico’s Buenavista del Cobre, Newmont Goldcorp’s Peñasquito, two of Fresnillo’s gold-silver units, and several other mines owned by Industrias Peñoles are open-pit operations.

Since taking over in 2018, the AMLO administration has not granted any new concessions through de facto mechanisms but without the backing of any specific law.

The recent move adds to the uncertain investment atmosphere in the country, whose miners were shaken back in May 2023, when Mexican Senators approved a new mining law in an accelerated process without opposition legislators present.

The mining law reforms involve companies having to deal with an increased burden of pre-consultation, impact studies and water concessions, among other things. The new law also requires financial commitments (bonding) and shortens the tenure of mining concessions from 50 years to 30 years, with a one-time 15-year renewal possible.

PORTRAIT OF AN IMPERIALIST

‘Doctor Death’ gives life to gold mines

Tommy Humphreys - The Big Score | February 10, 2024 | 

He sent three quarterbacks to the hospital. In one game.


That’s how Dave Fennell became ‘Dr. Death’ and a household name in Canada.

“If you’re going to survive as a defensive lineman. The people who are opposite you, have to be afraid of you,” Fennell remembers.

“I was capable of playing very violently.”

He played 10 seasons for the Edmonton Eskimos (renamed Elks in ‘21), appearing in 8 Grey Cups (Canada’s Super Bowl). The Eskimos won 6, including 5 in a row 1978-1982.

Fennell, who turned 71 on Feb 4, is chain-smoking Marlboros on a Zoom call with me on Feb 5. He’s reflecting on a career that spans beyond the gridiron to golden ventures. His resume includes co-founding Golden Star (US $467M sale in ‘22) and Miramar ($1.5B sale in ‘08). Fennell was a tenured director of Sabina ($1.1B sale in ‘23) and Torex ($1.2B market cap). His Reunion Gold ($485M market cap) has rapidly discovered a major gold deposit after setbacks.

Weary of the spotlight from his football career, Fennell has kept quiet about his journey – until now.

Fennell’s sons picked up his drive too. David Jr. played Michigan State football then turned engineer. John raced luge at the Sochi Winter Olympics, now he’s a corporate analyst.

–

Raised in a middle-class Edmonton, Alberta family, Fennell was the second of four children. “I was taught very early on, you’re not allowed to quit when you start something. It was not acceptable.”

He completed a 4-year undergrad degree at U of North Dakota in 3 years. Fennell could have gone to the NFL, but chose to stay in Edmonton, joining the Eskimos on the condition he’d also go to law school.

It’s hard to imagine a pro athlete smoking, studying law, and winning six championships today. But Dave Fennell did it all. He planned to play pro for 10 seasons, and wondered, “What do you do when the cheering stops?”

Joining a law firm next, the bosses leveraged his “Dr. Death” fame for networking. Fennell recalls, “They loved taking me to the Petroleum Club on Mondays.”

His law practice worked with many small miners. After three years and a Guyana field trip, Fennell decided to get into gold mining himself.

At 32, Fennell founded Golden Star Resources (GSR). He partnered with Roger Morton, a U of Alberta geology professor, to explore Guyana. GSR spent $20K staking the forgotten Omai gold deposit. “It was open ground.”

Anaconda Copper explored Omai extensively in the late 1940s but stopped when the Korean War began.

Secrets of the Anaconda Library

A private detective helped Fennell find Anaconda’s geological data. They learned of a cavernous library in Montana, holding 100 years of records. A librarian just laid off, liked Fennell and sold him the Guyana files for $30K.

GSR hired SNC Lavalin, with their top supercomputer, to process this historical information. It showed a big potential mine.

Placer Dome partnered on Omai in ‘87, before walking away. Fennell didn’t give up. He invited Louis Gignac’s Cambior to visit Omai during a 3 day rainstorm. Cambior ended up funding construction for a 70% stake. It produced 3.7 million gold ounces from 92-05.

Renowned mining investor Rick Rule says Fennell is easy to underestimate. “The physicality obscures a great intellect and a guy that’s actually very kind. He’s the classic entrepreneur. When he sees an opportunity, he can’t not grasp it.”

Next, GSR pursued Cambior to partner in Suriname. “If I had a mine each time someone told me a story about a property, I’d be a very rich man,” Gignac says. GSR’s Rosebel discovery was in region reeling after Suriname’s civil war. “David, why don’t you settle down, get married, do something easier than this,” Gignac advised him.

Fennell persisted, inviting Gignac to tour Rosebel. It poured rain again on that trip, which Gignac saw as a good omen after Omai’s success. Cambior eventually built the mine. Rosebel became one of South America’s largest, yielding over 6 million ounces. Today, it’s operated by Zijin. GSR stock jumped 600% in the early ’90s thanks to these wins.

Gignac and Fennell discuss Omai and Rosebel in this Canadian Mining Hall of Fame video (begins at 2:24):

Investor Mike Halvorson says GSR’s work in the Guianas and Suriname put the area on the map for mining.

“Back in those days, from a political point of view, it was considered high-risk to go into the Guianas,” Gignac remembers. “It took a lot of guts for [Fennell] to get involved, and a lot of guts to follow him there. We eventually mined about twice the [initial] reserves at Omai. By doing Omai, it was that much easier to do Rosebel. We were comfortable with the region and its people. There’s a lot of advantages in these countries. It’s simpler. Decision makers are easier to know and be in contact with.”

Halvorson remembers Fennell throwing a ‘chirping’ analyst into a pool on one Suriname stay. The guy skipped on the water like a stone. Fennell and Halvorson connected in Edmonton in the 1980s through their love of migratory bird hunting.

“Anything that walks, flies or swims, Dave has killed,” says mining engineer Bruce McLeod, who hunts and fishes with Fennell. A massive Anaconda snake skin once adorned the crown mouldings in Fennell’s Montreal offices.

At 41, Fennell lucked out as the sole bidder for Sigrist House, once King Edward VIII’s Bahamian villa. Fennell lived there 28 years before downsizing.

In the late 90’s, Fennell clashed with GSR’s board and was pushed out. Later, GSR refocused on Africa and was sold to a Chinese company.

To avoid GSR conflicts, Fennell eyed new gold regions. BHP’s Hugo Dummett offered him all their gold assets for $80 million. But with few flush bidders, BHP sold the portfolio in pieces.

Ivanhoe got to Mongolia and discovered Oyu Tolgoi. Randgold took West Africa, and Harmony got East Africa.

“If you’d have kept that package together, it’d be the second largest copper company [today]. And you’d be arguing with Newmont about who was the biggest gold company,” Fennell says.

He bought the Canadian assets for US $20.4 million. It had Hope Bay, a 4 million ounce gold discovery in the high Arctic.

Fennell dealt through Cambiex Exploration (CBX), where he’d been appointed Chair and CEO in January ‘99, when CBX was a 15 cent stock with a $3.5 million market cap.

CBX split the tab with Miramar, a modest gold miner sitting on cash. Miramar swallowed CBX in 2002, appointing Fennell Executive Vice Chairman. Miramar invested about $100 million in Hope Bay and led it through permitting. In 2008, Newmont bought Miramar for $1.5 billion.

Every $1 invested in CBX’s equity funding when Fennell took over in early ‘99 was worth $19.50 when Newmont acquired Miramar 9 years later. CBX shareholders made even more money through a spinout company, Ariane Gold, acquired by Cambior in ‘03.

Rob McLeod, a geologist at Hope Bay, admired Fennell’s strong presence, humour, and optimism. Fennell built bonds with Inuit partners through fishing and Crib games, easing the permitting process.

Fennell would need that optimism for his next venture.

–

In 2004, Fennell listed Nevada explorer New Sleeper. A name change to Reunion Gold (RGD) came in 2006, after recruiting former GSR colleagues and returning to the Giuanas.

The stock ran from 30 cents to over $2 in early ‘07 on the back of a Suriname gold find. It didn’t pan out. RGD crashed to 3.5 cents during the ‘08 financial crisis.

“When you take your shareholder’s money and you say you’re going to do this, and if it’s not successful, my job is to fix that and I’m not going to roll all the stock back. I’m not going to wipe shareholders out,” Fennell says, explaining RGD’s current 1.23 billion shares.

Reunion roared back above $2 again after a Guyana manganese discovery. Then, metal prices crashed, cutting RGD to one penny by 2016.

“You’re going to fail a hundred percent guaranteed in both exploration and football,” Fennell says. “The real question is, what are you going to do after you fail?”

Reunion Gold Photo.

A US $10 million sale of the manganese project provided a lifeline.

In 2019, Barrick partnered with Reunion on exploration, committing $4.2 million.

Reunion was a 7-cent stock in 2020 when they found gold at Guyana’s Oko project.

But, Barrick quickly abandoned the alliance and skipped a $3 million commitment. They even sued Reunion after Oko’s success. In 2023, Barrick and RGD settled, owing nothing to each other.

Oko moved from a prospect to a major gold deposit rapidly. An initial 2023 resource estimate showed 4.3 million ounces (indicated plus inferred).

Fennell believes Oko could be the best gold mine in South America. He sees a 300–400,000 ounce per year, low-cost mine, with a 12 year initial mine life.

“It’s going to be much bigger and longer,” Fennell says, optimistically. “Whether we’re going to live longer is a whole different question.”

Reunion aims to publish a PEA study on Oko before Summer. Fennell also looks forward to a feasibility study and final permits in Q1 2025, with construction to start soon after.

“From a discovery to a tier one mine in [potentially] six years, it doesn’t get any better,” Fennell says.

He’s in Georgetown this week, talking with the Guyanese government about Oko’s future. Reunion’s looking at options: build, sell, merge, or partner up. Fennell wants RGD to avoid execution risk and debt.

G Mining Services, led by Fennell’s old friend Gignac, is advising on Oko. They’ve successfully built many mines, like Fruta del Norte in Ecuador (Lundin Gold – $3.7B market cap). Gignac’s G Mining Ventures, doing well and on track in Brazil, could be a key player in Oko’s future.

“There will be a mine [at Oko]. There’s absolutely no question,” says Gignac. “The size, grade, and gold content. That’s going to be the next one to put on his record.”

There’s a slight problem with Venezuela’s claim over Guyana’s Essequibo region, where Oko is. Fennell isn’t worried. He says the US will protect it because of Exxon and Chevron’s huge oil investments there.

Gignac says Fennell hasn’t changed since they first met in the late 80s. “Always glass half-full, always enthusiastic. A track record as good as anybody at finding deals, doing exploration, and developing orebodies.”

Fennell is honest and a consummate salesman according to Rule. “I don’t think in 35 years he ever lied to me, but he would polish the living shit out of the rearview mirror.”

Some colourful highlights of my 2-hour Zoom with Mr. Fennell were published on Youtube. It’s raw and full of wisdom about gold exploration and football.

“David is one of the most low-key and commercially successful entrepreneurs in [mining],” Bruce McLeod wrote on X. “He has played a huge part in mentoring others too. Without David, I wouldn’t be where I am today.”

Fennell says, “We always overcome challenges. I never give up.”

Reunion Gold (RGD-TSXV) is worth $485 million at press time, last at 39.5 cents.

Fennell owns 61 million RGD shares. He has warrants and options to purchase 12.6 million more.

B. McLeod, Rule & Halvorson all own the stock.

All figures CAD unless otherwise indicated.

 

Svitzer to Become Standalone Public Company in Demerger from Maersk

Maersk plans to spinoff Svitzer as an independent company (Svitzer file photo)

PUBLISHED FEB 8, 2024 1:17 PM BY THE MARITIME EXECUTIVE

 

 

Svitzer, one of the leading global providers of towage and marine services, is set to become a standalone company after 45 years of ownership by AP Moller-Maersk. Svitzer’s management is calling it a new chapter as they look to continue their customer-focused operations while Maersk says it is the next step in the company’s Global Integrator strategy which focuses on evolving into an integrated logistics provider.

“Having evaluated the different options for Svitzer, Maersk has concluded that Svitzer as a standalone listed entity is the best option for the company and for long-term value creation for Maersk shareholders, offering them the possibility to participate in the future growth of a global leader within towage with attractive development prospects,” Maersk said in announcing the plans for the demerger. Maersk had been rumored to be exploring the possible sale of Svitzer.

Under the new plan, which will officially be presented the company said around March 22, they are proposing to distribute the shares of Svitzer to the current shareholders of AP Moller-Maersk. The proposed distribution is one share of Svitzer Group, which will be traded on the Nasdaq Copenhagen, for every 500 shares of Maersk. A.P. Moller Holding, the family’s investment company, would hold around 41.5 percent of the new standalone company and is reported to have agreed to a 360-day lockup on its shares.

Established in 1833 as a salvage company, Svitzer entered the towage business in 1870. Maersk became the majority shareholder in 1979 and later took full ownership of the company. Svitzer began its geographic expansion in 1999 and in the early 2000s made acquisitions.

Today, Svitzer has a fleet of 430 vessels with operations in more than 30 countries and more than 140 ports as well as more than 25 oil and gas terminals worldwide. The company reports it has 4,400 employees and each year completes more than 135,000 harbor towage jobs and over 50,000 LNG tanker assists.

Svitzer had revenues of $839 million in 2023, which was up more than eight percent over the prior year. Earnings were reported at $246 million in 2023 (EBITDA) up more than seven percent over 2022.

The company will continue to be headquartered in Copenhagen retaining its current management team. The completion of the demerger requires shareholder approval which Maersk expects to complete in April. The anticipated first day of trading for the shares of Svitzer Group on Nasdaq Copenhagen is April 30, 2024.

Maersk has been making major acquisitions for the landside operations in its logistics strategy while also divesting non-core businesses. Last year, Maersk completed its exit from the energy sector agreeing to divest Maersk Supply Service to its parent company A.P. Moller Holding. That followed the 2017 sale of Maersk Tankers as a standalone business and the following year the sale of Maersk Oil to what is today TotalEnergies. The company also spun off Maersk Drilling to shareholders in 2019, and last year the drilling company was merged into Noble Corporation.

 

Op-Ed: To Avoid UK's Struggles, All AUKUS Subs Should Be Virginia-Class

USN file image

PUBLISHED FEB 8, 2024 12:45 PM BY THE MARITIME EXECUTIVE

 

 

[By Peter Briggs]

In a recent article for The Strategist I painted a depressing picture of the UK’s submarine capability—a force undercapitalized, with inadequate facilities, short of personnel and unable to get its nuclear-powered attack submarines (SSNs) to sea. Britain’s Royal Navy is struggling to sustain a continuous at sea nuclear deterrent, at the expense of its conventional capabilities. The combination of issues is leading to poor morale and difficulty filling key senior leadership positions.

I argued that the RN’s submarine force of four ballistic missile submarines (SSBNs) and six SSNs has fallen below critical mass. Recovery in terms of manpower, shore infrastructure and submarine numbers will not be simple or quick.

This is a poor foundation for the UK to lead the design of the submarine planned for the UK and Australia’s navies under the AUKUS arrangements agreed to by the US, UK and Australia. The risk is compounded by the need to prioritise resources to recover from this situation, sustain the continuous at sea deterrent, all whilst also introducing a new class of ballistic missile submarines.  The risk from a delayed, over cost and unproven AUKUS SSN design, requiring prolonged rectification to achieve an operational capability is much higher because of this combination of factors.

Under the current plan, the capability gap induced by the retirement of Australia’s conventionally-powered Collins Class submarines and the time taken for the transition to the AUKUS SSNs will be covered by the purchase of three to five Virginia class nuclear-powered submarines from the US.  This would impact on the US Navy’s force level in a time of shortfall and may well not achieve the necessary agreement from a future US Administration to sell these submarines.

Further, this would entail the RAN operating two classes of SSN, from two design houses—significantly adding to supply chain, training and support costs. The two countries have different nuclear regulatory regimes which impacts on the design of their respective submarines and poses issues for the current plan. Which standard is Australia to adopt?  Presumably that of the USA, given the preponderance of USN support and the intention for the USN to certify our fitness for nuclear stewardship under the current plan. How do we then manage a different standard in a UK designed AUKUS SSN?

Further, there is a significant risk that neither of the relatively small number in each class will achieve critical mass or an operational capability.

This is a compounding situation—a change in the plan is needed to avoid it. In developing this we should heed the lessons of the UK situation and ensure that both the UK and Australia’s submarine capabilities individually achieve critical mass. In Australia’s case, I believe this is at least 12 SSNs.

Using the Virginia class as the design baseline for an AUKUS SSN (V), and General Dynamics-Electric Boat (GD-EB) as the lead designer could solve these problems. With a class build of over 38 submarines, currently spread over six blocks, Virginia is a mature design and GD-EB a well-practised designer in updating and building the boats. A secure network and suite of collaborative design applications connecting all three countries would be essential if the program I propose is to succeed. The Integrated Product Development Environment (IPDE) used for Virginia has revolutionised shipbuilding, reducing construction times and costs. It is also the best way to incorporate requirements and design input from the UK and Australia.

Compared to the option for a UK design lead, which is based on the unsatisfactory experience of the Astute Class SSN, which ran considerably over budget and schedule, AUKUS SSN (V) should be less risky, cheaper and importantly, quicker to reach an operational capability.

I suggest GD-EB be tasked with leading an IPDE team, including BAE Systems and ASC, the UK and Australia’s submarine design houses, to produce an updated Virginia design available for construction in the UK, Australia and the US, optimised for sea denial. The design should be updated to achieve the following priorities:

• Simpler and quicker to build,
• Cheaper to own and operate, with a smaller crew
• Incorporating the improvements achieved over the evolution of the Virginia, Columbia, Collins and Dreadnought class submarine designs, possibly including electric propulsion, X configuration after control surfaces
• Able to be built in UK and Australian shipyards, utilising module construction, including by supporting sub-contractors
• Local supply chains in each country would be important to improve resilience and avoid adding to the current difficulties in these areas in the US
• Compatible with current and future US submarine weapons, unmanned underwater and aerial vehicles.
• A simple analysis demonstrates some of the benefits the USA could obtain from this approach:
• A much higher probability of a successful AUKUS SSN program, boosting Allied submarine capabilities, in a shorter time and at reduced cost
• A smaller, quicker to build, cheaper to own SSN option, handy in the event the USA needed to increase force levels quickly
• Ongoing supply chain and depot level support capability for Virginia class submarines in the UK and Australia
• The shorter time taken to achieve an operational capability could reduce or obviate the need to sell Australia submarines from the US’s order of battle
• This would avoid the need to provide design support to BAES if it had to undertake the AUKUS SSN design from an inadequately resourced baseline.

From the UK’s perspective the plan would:

• Avoid the costs of leading the design effort, enabling resources saved to be redirected towards remedying the current situation
• Result in a quicker/cheaper build program for Britain’s Astute replacement (possibly allowing for an increased number to be built to overcome the critical mass issue).
• Open up the possibility of supplying major components such as the reactor to a larger number of submarines
• Engage BAES in a world class development and providing ongoing, UK-based design support. Note, BAES already has a design relationship with GD-EB for Astute and Dreadnought designs
• Provide more resilient supply chains, with compatible base and depot level support facilities in the USA and Australia
• Allow greater focus of UK’s resources on achieving an operational ballistic missile capability as early as possible to relieve the pressure on the current SSBNs.

From an Australian perspective the advantages are significant:

• Reduced time to achieve an operational SSN capability, possible avoiding the need to purchase Virginia class submarines from the USN
• Avoid the complications and expenses of operating two classes of SSN
• Avoids the uncertainty and risks of introducing an unproven UK design
• The base and depot level facilities to be established to support the USN Virginia class submarines deployed to Australia as part of the Submarine Rotation Force -West (SRF-W) can be utilised to support the AUKUS SSN, saving time, expenses and personnel
• Given the number of Virginia class submarines already operating in the Pacific and Indian oceans, AUKUS SSN (V) represents a more appropriate design for Australia; the RAN would operate one of many
• The savings, greater efficiency and single class solution offer a better chance to achieve a critical mass in the capability
• Open up opportunities for Australian companies to provide support for a greater number of submarines, including in the UK and US
• The embedded RAN personnel in the SRF-W SSNs and those in Collins Class submarines would provide Australia’s submarine capability during the transition
• ASC, the Australian submarine builder, already has a relationship with GD-EB.

This analysis is simplistic and looks at only at the potential benefits. There will be costs of course and these need to be evaluated in considering whether to change the plan. I suggest that a Virginia Class baseline with GD-EB and the USN leading, offers a significantly improved, reduced risk and lower cost option for the AUKUS SSN program.

All participants stand to benefit from this change. The design, construction and through-life support efficiencies inherent in a single-class operated by the three navies could substantially reduce the cost of ownership and deliver enormous resilience and inter-changeability benefits in times of emergency.

It is time to reconsider the plan; the current concept is one of hope over experience and is at severe risk of becoming entangled in the significant difficulties currently being experienced in the UK’s submarine service, together with the limitations of its submarine building and maintenance infrastructure.

Peter Briggs is a retired submarine specialist and a past president of the Submarine Institute of Australia.

 

Seaspan Finishes Welding Tests for Heavy Icebreaker Construction

Illustration courtesy Seaspan

PUBLISHED FEB 8, 2024 4:10 PM BY THE MARITIME EXECUTIVE

 

Vancouver-based shipbuilder Seaspan has completed a "prototype" hull block for the Canadian Coast Guard's future polar icebreaker to validate its forming and welding techniques, and in a statement Thursday, the firm said that the effort was worthwhile. Heavy icebreakers haven't been built in North America in generations, and both the U.S. Coast Guard and the Canadian Coast Guard are working with shiupbuilders to relearn how to work with the specialized steel and extra-heavy plate required to construct these complex vessels. 

Heavy icebreakers face some of the most difficult operating conditions on the planet, on land or at sea. Air temperatures can be as low as -40 F. The hull and frame are exposed to extreme slamming and vibration from riding up on top of the ice, crushing it, and then pushing through the debris. The structure has to hold up to these rigors for the service life of the vessel - and if past life extensions are any indicator, this could be 50 years or more.  

These service specifications require a high-strength steel with good low-temperature properties - in this case, EH50, which has a higher tensile strength and better resistance to impact at extremely low temperature. 

Some of the plate for the icebreaker will be up to 2.4 inches thick, posing unique challenges for forming and weld quality. Seaspan has set up its own certified test lab on site to evaluate steel and weld quality with a fast turnaround. 

In June 2023, Seaspan set out to determine what it would take to build one block of the icebreaker. That project is now complete, the yard says, and lessons have been learned on the required processes, procedures, equipment and skills. These lessons are informing improvements in the ship's design for manufacturing, the yard said. 

“Having the opportunity for our engineering and production teams to work collaboratively to construct this Prototype Block very early in the design process was beneficial not only to Seaspan, but also to our customer and our cross-country supply chain," said Martin Edwards, Chief Program Officer at Seaspan. 

While its shipbuilding workforce has been busy with Canadian government contracts, Seaspan has been supplementing its own workboat fleet with imported vessels. The firm operates tugs, barges and ferries in domestic trade, and has longstanding relationships with high-quality specialty workboat yards in Turkey. Recent deliveries include HaiSea Wamis, the world's "first fully electric harbor tug," which is owned and operated by a joint venture between Seaspan and the Haisla Nation. 

 

Metal Shark Expands Shipbuilding in Louisiana

Metal Shark is expanding with a third shipbuilding facility in Louisiana (Metal Shark)

PUBLISHED FEB 9, 2024 7:29 PM BY THE MARITIME EXECUTIVE

 

Metal Shark, a builder of specialized welded aluminum vessels for defense, law enforcement, and commercial operators, reports it is expanding its operations in Louisiana. This comes after the news earlier in the week that the company had divested of its Alabama-based ship refit and repair business to Birdon America.

The company is adding production capacity with the opening of a third Louisiana location, a 40,000-square-foot manufacturing facility in Iberia Parish. According to Metal Shark, combined with its nearby facilities in Jeanerette and Franklin, the company now has nearly 200,000 square feet of enclosed manufacturing space spread across 35 acres and employs nearly 400 people.

“Birdon America put forth an offer that made good business sense for us while providing long-term opportunities for our Alabama team members,” said Chris Allard, CEO of Metal Shark. “With the sale of our refit and repair business and steel boat building operations now concluded, we are refocusing our energies and doubling down on our core business: the design and construction of durable, high-performance, manned and autonomous welded aluminum vessels.”

Metal Shark reports it is aggressively recruiting to expand its workforce across all its Louisiana facilities to meet its strong order backlog. The company is currently hiring for all production trades and is also recruiting naval architects, project coordinators, and project engineers.

 

This week Metal Shark launched a new US Navy near coastal patrol vessel 

 

“As a diversified builder, at any given time we’re producing boats for customers across a range of markets including U.S. and foreign military forces, state and local law enforcement agencies and fire departments, and numerous commercial markets including pilot groups, passenger vessel operators, and the offshore wind industry,” said Allard. “Our new Avery Island facility will reduce lead times for vessels that lie outside our mainstream production mix, with an experienced crew of boat building professionals specializing in custom rigging and production efficiency.”

The builder highlights that it has retained a portion of its Alabama waterfront to support ongoing training, trials, and autonomous testing. In addition to continuing research, design, and testing in Alabama, Metal Shak has a dedicated engineering facility in Croatia. The company reports its customers include U.S. and foreign militaries, law enforcement agencies, fire departments, passenger vessel operators, pilot associations, and other clients worldwide.