Congo artisanal cobalt monopoly can launch in months, CEO says

Bloomberg News | February 8, 2024 | 

Artisanal miners in DRC. (Image by Enough Project, Flickr)

The state-owned company created to buy all of Democratic Republic of Congo’s hand-dug cobalt could start operating within three months after years of delays, according to its chief executive officer.


Entreprise Generale du Cobalt will soon launch pilot sites around the town of Kolwezi on parts of five mining permits belonging to its main shareholder, state-miner Gecamines, Eric Kalala said.


“The problem before was that we didn’t have any land, but that problem has been solved,” Kalala told Bloomberg News on the sidelines of the Mining Indaba conference in Cape Town on Wednesday. The company doesn’t yet have an offtake agreement for the electric-vehicle battery metal, which will be dug by small-scale, artisanal miners working with EGC-approved cooperatives.

Congo founded EGC in 2019 to formalize artisanal cobalt mining, which employs hundreds of thousands of people but is infamous for dangerous working conditions and child labor. The company has struggled to get off the ground amid disagreements about its structure and weak cobalt prices due to oversupply.

The low prices offer an “opportunity” to set up the company with less competition on the ground from other buyers, with the aim of being ready to capitalize when the market turns, Kalala said.

In theory, EGC could be a major player in global cobalt, 70% of which comes from Congo. The country’s artisanal miners can account for as much as 20% of national output, according to the company.

Congo exported 139,800 tons of cobalt last year, a 21% increase from 2022. Total world production was about 190,000 tons in 2022, according to US Geological Survey estimates.

Commodity trader Trafigura Group is still EGC’s “main partner” in the project, but “bilateral discussions” continue with other parties, Kalala said.

“Trafigura remains committed to its commercial agreement with EGC and delivering on the pressing need to kick-start the large-scale formalization” of the artisanal and small-scale cobalt sector, Trafigura said by email.

“At present Trafigura is the only company permitted to buy from EGC – we encourage others to follow our approach and contribute towards meaningful change,” the Singapore-based company said.

Incursions by artisanal miners pose risks for private miners across Congo, and EGC is “designing a legal solution” that could allow it to operate on parts of permits owned by companies like Glencore and Eurasian Resources Group, Kalala said.

ERG didn’t immediately respond to a request for comment. Glencore declined to comment.

(By William Clowes and Michael J. Kavanagh)

Congo’s Gecamines and Entreprise Generale du Cobalt sign mining deal

Reuters | February 7, 2024 |t

State mining company Gecamines headquarters. (Image courtesy of Gecamines).

Congo’s state mining company Gecamines and its subsidiary Entreprise Generale du Cobalt (EGC) have signed an agreement granting EGC exclusive mining rights to five mining areas, the firms said on Wednesday.


Created by government decree in December 2019, EGC was granted a monopoly on artisanal cobalt produced in the central African country, the world’s top producer of a critical metal key to the global energy transition.

“The provision of these 5 mining areas from Gécamines to EGC will mark the beginning of the standardization of artisanal cobalt mining and the structuring of local entrepreneurship,” Gino Buhendwa Ntale, EGC chairman, said in a statement.

Artisanal miners, who dig cobalt using rudimentary means, are the second largest source of cobalt worldwide after the Congo’s industrial mines.

Late on Tuesday, the Mineral Security Partnership (MSP), a multinational collaboration of more than a dozen countries and the European Union to invest in a global supply chain, also announced a deal with Gecamines and Japan’s JOGMEC.

“This is a MOU (memorandum of understanding) that will expedite European and Japanese investment in the mining sector in the DRC (Democratic Republic of Congo), and it’s also a powerful demonstration of the MSP’s efforts to secure and diversify critical mineral supply chains,” US Under Secretary of State for Energy Jose W. Fernandez told a media briefing.

(By Anait Miridzhanian and Wendell Roelf; Editing by Eileen Soreng and Mark Potter)

US to commit more funds to African rail link for metal exports

Reuters | February 8, 2024 | 

The railway runs from Lobito, on Angola’s Atlantic coast, 1300km westwards to Kolwezi in the Democratic Republic of Congo, with a connection to Zambia. 

Credit: Ministry of Transport, Angola

The United States will provide more funds for the construction of the Lobito Corridor, a rail link to export metals from Central Africa’s Copperbelt, including a link for Zambia, US energy envoy Amos Hochstein said.


Washington has been supporting the project linking mineral-rich Democratic Republic of Congo (DRC) and Zambia to Lobito port in Angola. The link seeks to bypass logistics bottlenecks in South Africa that have held up copper and cobalt exports – metals vital to the energy transition away from fossil fuels.

In 2022, a consortium led by global commodities giant Trafigura, Portugal’s Mota-Engil and Vecturis SA of Belgium was awarded a 30-year concession for railway services and support logistics on the Lobito Corridor. The consortium plans to spend $455 million in Angola and $100 million in the DRC on equipment, operations and infrastructure maintenance.

Ivanhoe, Trafigura to be first users of Lobito Atlantic Railway Corridor

Additional funding is required to extend the 1,700 km (1,060 miles) line into Zambia in the second phase.

“We have committed to finance $250 million for the Angola phase one. I expect that we will commit additional resources in the same range for the second phase,” Hochstein said late Wednesday in an interview ahead of an investment forum on the project in Zambia.

The first phase involved upgrading the rail line on the Angolan side, and the second phase will involve building a new multibillion-dollar rail through Zambia and beyond, he said.

“I expect that we will start seeing some significant volumes using the rail by June-July,” he said, without giving figures.

The US and its partners have also mobilized close to $1 billion to expand the Lobito Corridor by developing a new 800 km (500 mile) rail line to further connect Zambia to the network, he said during the opening of the investment forum on Thursday.

“With the Africa Finance Corporation (AFC) as the private-sector lead developing the project, we aim to break ground in 2026 and have an operational rail between eastern Angola across northwestern Zambia by 2028,” he said.

The AFC had financing commitments from the US, the European Union and African Development Bank (AfDB), which would bring in extra private sector financing, he said.

Hochstein welcomed the announcement on Wednesday by mining firm Ivanhoe Mines that it had signed up to use the rail line for its copper exports from the DRC.

“That’s critically important because it shows commitment by the private sector to this project. It will also make financing cheaper,” Hochstein said.

He also said the US was contemplating other similar projects in Africa and elsewhere.

“Within Africa, I expect to have at least one more in the next year,” Hochstein said, without specifying where.

(By Chris Mfula; Editing by Nelson Banya and Mark Potter)

China’s CMOC eyes further growth in Congo and beyond after taking cobalt crown

Reuters | February 7, 2024 | 

The Tenke Fungurume mine in DRC. Credit: CMOC

Chinese mining firm CMOC Group could buy more assets in copper and cobalt-rich Democratic Republic of Congo, and sees further potential for growth in South America and Indonesia, an executive told Reuters on Wednesday.


“If there are opportunities, if there are assets that meet our criteria, of course we do consider increasing our presence in the DRC. Why not? We already have investments,” Julie Liang, CMOC vice president for ESG, said in an interview on the sidelines of the Africa Mining Indaba.


Copper and cobalt are among the metals that are expected to see strong demand in the years to come due to their use in green technologies, such as electric vehicles, that are key to helping governments globally meet climate targets.

CMOC last year became the world’s No. 1 cobalt mining company with production of some 55,000 tons, and could further outpace rivals including Glencore after raising its output forecast this year to 60,000 tons-70,000 tons.

The group’s copper production is projected at 520,000 tons-570,000 tons from about 420,000 tons last year. In the long run there is potential to further increase production beyond 600,00 tonnes, Liang said.

“We do have ambitions to become one of the biggest copper producers in the world,” she said. CMOC’s current 2024 forecasts would put it seventh or eighth in the world this year.

Like other copper producers in DRC, CMOC is struggling with electricity shortages and issues shipping the metal to ports.

But Chinese cobalt producers have seemed unconcerned by oversupply that has knocked down cobalt prices, with some said to benefit from state support for a sector seen as vital to China’s electric vehicle industry.

The copper deposits held by CMOC’s Congolese business are lower cost than some, Liang said, which allows it to ramp up cobalt production as a by-product even as rivals are scaling down due to a price slump.

CMOC is likely to churn out even more cobalt as it ramps up copper output, she added.

Silvery-blue cobalt was once seen as an indispensable element of EV lithium-ion batteries, with prices soaring in May 2022 to four-year highs, but they have since slipped back nearly 70%.

EV sales have been slowing as inflation hits consumers and governments cut subsidies, while batteries without the mineral have been rising in popularity.

While the company sees lower cobalt prices remaining for longer, its production is aligned to longer-term demand fundamentals that could benefit from the future outlook for the energy transition sectors globally, Liang said.

Short-term weakness in cobalt prices does not represent a threat to its operations, she said, as it mines the metal as a by-product and can afford to keep producing at lower prices.

(By Felix Njini and Veronica Brown; Editing by Jan Harvey)

Pressure groups sue LME for allowing trade of ‘polluting’ Indonesian metal

Reuters | February 8, 2024 | 

Grasberg mine seen from space. (Image courtesy of NASA.)

Two pressure groups have filed a legal action against the London Metal Exchange (LME) for allowing the sale on its platform of metal produced in Indonesia that they allege is polluting local rivers used by indigenous communities, they said on Thursday.


The London Mining Network (LMN) and the Global Legal Action Network (GLAN) said in a statement papers have been filed in London’s High Court asking for a judicial review.


They say the LME is breaching British anti-money laundering and proceeds of crime legislation. Reuters confirmed that court documents were filed at the court on Tuesday.

“The LME believes that the claim filed by the London Mining Network and the Global Legal Action Network is misconceived and intends to resist that claim,” the exchange said in response to a request for comment.

The LME requires companies that trade on the exchange, the world’s largest and oldest forum for trading metals, to undergo audits for sustainability.

The 147-year-old LME is in the process of suspending or delisting 10% of its metals brands until their producers provide it with responsible sourcing information, which includes requirements for environmental management.

But the LMN and GLAN say the LME’s sustainability framework is not enough.

“If successful, this case will force the LME to revisit the rules under which it lists metal for trading on its exchange,” the two groups said in a statement.

“This in turn will force metal producers to adapt their mining practices if they want to keep being able to access this platform which is essential for them to reach customers and to sell their products.”

The court action will allege mining waste is being dumped from the giant Grasberg copper mine in West Papua Indonesia owned by Indonesia’s state mining company and US-listed Freeport McMoRan, opens new tab, which is also the operator of the mine. The legal action is not against Freeport.

“In West Papua, indigenous communities are suffering the effects of mining waste pollution from the Grasberg mine being dumped into the water sources that they rely on for basic needs like drinking, cooking and bathing,” the release said.

Freeport said in a sustainability report, opens new tab on its website that tailings disposal in Indonesia is reliable and safe.

“Nearly three decades of engineering analyses, extensive monitoring and data collection, and computer modelling confirm that the current tailings management system poses the lowest risk to people and the environment,” the Freeport report said.

GLAN and the LMN say copper derived from Grasberg and traded on the LME is “criminal property” as it is produced in circumstances that would breach British criminal law if they were to occur in Britain.

“The LME is a recognised investment exchange, which means it has specific legal obligations around identifying and mitigating the risk of financial crime on its platform,” said Leanna Burnard, a lawyer with GLAN.

The LME is owned by Hong Kong Exchanges and Clearing (HKEx).

(By Pratima Desai and Eric Onstad; Editing by Jan Harvey)

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.