Naimul Karim
Mon, March 4, 2024
CANADA-ENVIRONMENT-AUTOMOBILE-INNOVATION-DISCOVERY
Canada has inked an agreement with Australia to work together in developing the minerals needed for the energy transition away from fossil fuels, as both look to reduce their dependence for raw materials on China and pivot more towards friendlier nations.
The non-legally binding agreement means the two nations will work together to extract these minerals responsibly, improve transparency, build partnerships, conduct joint research and development programs and share industry growth models.
The joint statement said that Canada and Australia share a “like-minded” approach to the development of these minerals and will work together to develop these minerals in a “clean” and “fair” manner.
Canada is looking to build a battery industry as it expects the world to gradually shift away from fossil fuels within the next three decades. Batteries require minerals such as lithium, nickel and graphite, so the government has looked to boost its mining sector in recent years.
It also introduced a policy in 2022 that made it more difficult for foreign companies, especially “non-like-minded” nations, to purchase stakes in Canadian miners involved in producing these critical minerals. For instance, in 2022, it ordered three Chinese companies to divest its shares from three Canadian lithium companies.
Despite this policy, some Canadian junior miners have inked deals with Chinese companies in the last year. Montreal-based SRG Mining Inc. agreed to sell 19.4 per cent of the company to Carbon One New Energy Group Co. Ltd; Vancouver-based Solaris Resources Inc. inked an agreement with Zijin Mining Group Co. Ltd. to receive $130 million by way of a private placement of common shares; and Vancouver-based Osino Resources Corp. agreed to be bought by Yintai Gold Co. Ltd. for $368 million.
The completion of all three agreements will depend upon the federal government’s approval based on the Investment Canada Act.
Australia miners have a big presence in Canada. For example, North American Lithium Inc., the only major lithium producer in Canada, is owned by Sayona Mining Ltd. and Piedmont Lithium Inc., both of which are listed in Australia.
Perth-based Wyloo Metals Pty Ltd., which is run by Australian billionaire Andrew Forrest, bought Canadian junior miner Noront Resources Ltd. in 2022. Wyloo is looking to build a nickel mine in Ontario’s Ring of Fire region.
Melbourne-based BHP Group Ltd. has agreed to invest $14 billion in Saskatchewan to build one of the world’s biggest potash mines. Another Australian mining giant, Rio Tinto Ltd., inked a memorandum of understanding with Canada last year to look for ways in which the miner can contribute to the country’s low-carbon battery industry during the next decade.
“We will also work together with like-minded partners to respond to changing geopolitical realities so they do not negatively impact our pursuit of these goals,” a statement from Natural Resources Canada said.
Naimul Karim
Mon, March 4, 2024
rio-tinto-0304-ph
Mining giant Rio Tinto Ltd. “would love” to produce lithium in Canada, given the right project, says chief executive Jakob Stausholm.
Rio doesn’t currently produce lithium, but Stausholm, speaking at one of the world’s largest mining conventions in Toronto on March 3, said the miner is keen on building a lithium business and is on the hunt for a top-tier property. He said he believes lithium is more likely to dominate the battery market in the future than other metals such as nickel and cobalt.
Volatile market
“We would like to grow lithium, but what’s clear is that lithium is abundant in this world,” Stausholm said at the Prospectors & Developers Association of Canada convention. “And, therefore, you have seen a very volatile (market). Sometimes very high prices, and now prices have gone down so far.”
Lithium is expected to play a key role in the energy transition away from fossil fuels since it’s used to build batteries for electric vehicles (EVs). Several miners are exploring lithium projects in Canada, but there is just one major company — North American Lithium Inc., which is owned by Sayona Mining Ltd. and Piedmont Lithium Inc. — producing the mineral in the country.
The metal’s price rose manyfold in 2022 and early 2023 on the expected rise in EV demand. But prices have plummeted in the past year due to an increase in supplies, subdued Chinese demand and a poor EV market. The price of lithium carbonate is down more than 70 per cent from the same time last year.
Rio in 2023 dipped its toes into Canada’s lithium exploration industry by signing two agreements. In July, it signed an option agreement for about $115.7 million with Longueuil, Que.-based Azimut Exploration Inc., giving it the opportunity to own at least 75 per cent of the Corvet and Kaanaayaa lithium properties in the Eeyou Istchee James Bay region.
An option agreement doesn’t necessarily mean Rio will own the properties, and the company must fulfil several conditions. For instance, to acquire 50 per cent of Azimut’s properties, Rio must spend at least $14 million over four years to explore the projects. To secure an additional 20 per cent, Rio will need to spend an additional $100 million over five years on exploration.
The deal allows the mining giant to spend a few million dollars to test the lithium projects owned by Azimut and assess the financial viability of building mines at the locations.
A month earlier, Rio inked a similar deal with Montreal-based Midland Exploration Inc. to explore 10 lithium properties in the James Bay region, covering a surface area of about 1,000 square kilometres.
Both deals come after Rio entered a memorandum of understanding with the federal government last year to look for ways in which the miner can contribute to Canada’s low-carbon battery industry over the next decade.
Cutting carbon emissions
Aside from the projects in Canada, Rio is actively trying to develop three other lithium projects in Argentina, Serbia and the United States. But lithium continues to be a relatively small segment of Rio’s business. It’s currently more focused on its aluminum and iron-ore businesses in Canada and has made a few investments recently to reduce its carbon emissions.
For example, the company is trying to reduce the amount of heavy fuel oil consumed in the production of iron ore pellets and concentrates by installing an electric boiler in its Canadian operations.
In December, Rio also entered the aluminum recycling industry through a $700-million investment in Brampton, Ont.-based Matalco Inc. Producing secondary aluminum is more energy efficient than producing primary aluminum, but Stausholm believes the way forward is a combination of both.
In June, Rio announced it would invest $1.4 billion to expand its aluminum smelter in Quebec by adding new pots that it said would reduce its carbon emissions by 290,000 tonnes per year — equivalent to removing 63,000 vehicles from the road.
Despite these investments, Stausholm doesn’t think capital markets are properly rewarding companies focused on low-carbon strategies. However, he said the steps taken by Rio will create a difference in the coming decades, if not in the near future. Rio is trying to stay a step ahead of the game by “futureproofing” its assets, he said.
Stausholm said Canada is at least a decade ahead of other Western nations in terms of measures to reduce carbon emissions due to its reliance on hydropower. But he said he hasn’t seen a place where “people are so serious about addressing climate change like in China.”
Nevertheless, Canada and the U.S. are looking to reduce their reliance on China for metals and other raw materials and pivot towards friendlier nations.
Mining giant Rio Tinto dips toes in Canadian lithium projects
Critical minerals sector is 'not healthy,' says Barrick
Canada 'decade or two' ahead in climate change battle: Rio Tinto
In 2022, Canada prevented Chinese companies from investing in three lithium Canadian miners after it announced a policy that made it harder for “non-like-minded” nations to invest here.
Stausholm didn’t specifically comment on that issue, but said politicians serve their societies and companies serve the countries in which they operate, and “we are a global company” with major businesses in China and other nations.
• Email: nkarim@postmedia.com
Exclusive-BHP sets tentative sales deals for Canadian potash, not interested in Cobre Panama
Updated Mon, March 4, 2024
Small toy figure and mineral imitation are seen in front of the BHP logo in this illustration
By Rod Nickel
WINNIPEG, Manitoba (Reuters) -BHP has signed non-binding sales agreements for all potash production from both phases of the Canadian mine it is building, and will look to convert those into firm offtakes within 12-18 months, a senior executive told Reuters.
BHP Chief Commercial Officer Ragnar Udd also said the company is not interested in acquiring the idled Cobre Panama copper mine from First Quantum Minerals.
Australia-based BHP's entry into selling potash is expected to shake up the global fertilizer market, which producers in Canada, Belarus and Russia dominate. Fertilizer is a key input for farmers to boost yields of crops such as corn.
BHP expects to begin production at Jansen, Saskatchewan in late 2026, ramping up to 4.35 million metric tons annually. A second phase approved by BHP will boost yearly output to 8.5 million tons, expanding global supply by roughly 10%.
BHP plans to sell potash to distributors, rather than directly to companies that re-sell the fertilizer to farmers, Udd said, declining to name the companies.
BHP has not previously disclosed the sales agreements or how it will market its potash.
Selling to distributors reflects the fact that BHP does not own a potash distribution network and allows it to focus on what it is best at - production, Udd said in an interview.
"A lot of the feedback we've had from customers is how thrilled they are to be seeing a new reliable, stable form of supply coming in from an industry player that's well-known," Udd said.
BHP will turn tentative sales into binding contracts - typically lasting one year - as production comes online, with the first likely in late 2025 or early 2026, Udd said.
BHP will provide stiff competition to Nutrien, Mosaic, Belaruskali and Uralkali. The company's entry may initially be "quite destructive" to prices, said Humphrey Knight, principal analyst of potash and phosphates at consultancy CRU.
Selling to distributors runs counter to how BHP usually operates, controlling much of the supply chain itself, Knight said.
The U.S. is the prime market for Canadian potash due to its proximity, but it has been difficult to penetrate for another producer, Germany's K+S AG, Knight said.
Udd said he would not give specifics about BHP's U.S. plan but said it is "quite comfortable" with its ability to compete there.
BHP, best-known for mining iron ore, copper, nickel and metallurgical coal, is not interested in acquiring First Quantum's Cobre Panama, one of the world's largest open-pit copper mines, which was forced to shut down in December after Panama's top court ruled that its contract was unconstitutional.
"Honestly, while we're always looking for opportunities, I think that's a situation best left for Panama and others," Udd said.
(Reporting by Rod Nickel in Winnipeg; additional reporting by Divya Rajagopal in Toronto, Editing by Franklin Paul)
Updated Mon, March 4, 2024
Small toy figure and mineral imitation are seen in front of the BHP logo in this illustration
By Rod Nickel
WINNIPEG, Manitoba (Reuters) -BHP has signed non-binding sales agreements for all potash production from both phases of the Canadian mine it is building, and will look to convert those into firm offtakes within 12-18 months, a senior executive told Reuters.
BHP Chief Commercial Officer Ragnar Udd also said the company is not interested in acquiring the idled Cobre Panama copper mine from First Quantum Minerals.
Australia-based BHP's entry into selling potash is expected to shake up the global fertilizer market, which producers in Canada, Belarus and Russia dominate. Fertilizer is a key input for farmers to boost yields of crops such as corn.
BHP expects to begin production at Jansen, Saskatchewan in late 2026, ramping up to 4.35 million metric tons annually. A second phase approved by BHP will boost yearly output to 8.5 million tons, expanding global supply by roughly 10%.
BHP plans to sell potash to distributors, rather than directly to companies that re-sell the fertilizer to farmers, Udd said, declining to name the companies.
BHP has not previously disclosed the sales agreements or how it will market its potash.
Selling to distributors reflects the fact that BHP does not own a potash distribution network and allows it to focus on what it is best at - production, Udd said in an interview.
"A lot of the feedback we've had from customers is how thrilled they are to be seeing a new reliable, stable form of supply coming in from an industry player that's well-known," Udd said.
BHP will turn tentative sales into binding contracts - typically lasting one year - as production comes online, with the first likely in late 2025 or early 2026, Udd said.
BHP will provide stiff competition to Nutrien, Mosaic, Belaruskali and Uralkali. The company's entry may initially be "quite destructive" to prices, said Humphrey Knight, principal analyst of potash and phosphates at consultancy CRU.
Selling to distributors runs counter to how BHP usually operates, controlling much of the supply chain itself, Knight said.
The U.S. is the prime market for Canadian potash due to its proximity, but it has been difficult to penetrate for another producer, Germany's K+S AG, Knight said.
Udd said he would not give specifics about BHP's U.S. plan but said it is "quite comfortable" with its ability to compete there.
BHP, best-known for mining iron ore, copper, nickel and metallurgical coal, is not interested in acquiring First Quantum's Cobre Panama, one of the world's largest open-pit copper mines, which was forced to shut down in December after Panama's top court ruled that its contract was unconstitutional.
"Honestly, while we're always looking for opportunities, I think that's a situation best left for Panama and others," Udd said.
(Reporting by Rod Nickel in Winnipeg; additional reporting by Divya Rajagopal in Toronto, Editing by Franklin Paul)
