AI Infiltrates Oil Industry To Speed Up Drilling, Cut Costs

                    

• AI-powered technologies are helping the industry to produce more oil and gas for less money.
• 
  
• Bloomberg: AI tech hadshelped shale drillers shorten the average period for drilling a new well by a whole day and the period for fracking that well by three days.
• 
  
• Evercore: AI and other tech could bring costs in the shale patch down by double digits as soon as this year.
• 
  

Many tech analysts have accused the oil industry of being too slow to adopt new technology. Yet the industry is itself the source of much technological progress in its narrow, specialized field.

Over the past ten years, however, oil and gas have started to open up for digital technology and automation. In fact, the energy industry has very much embraced all things digital and AI. And now, these technologies are helping it produce more oil and gas for less money.

Bloomberg recently reported how the oil industry was using artificial intelligence to improve drilling in the shale patch and boost the recovery rates of fracked wells. This is quite an important step for the industry, which until quite recently appeared to prefer to use the power of computers for things like seismic surveys and pipeline monitoring.

Back in 2018, a KPMG survey found that many oil and gas companies were already adopting artificial intelligence or planning to adopt it soon. Of course, at the time, “artificial intelligence” usually referred to tech such as predictive analytics and machine learning, and yet it was proving helpful enough to merit the attention of oil executives.

“Technology is disrupting the status quo in the oil and gas industry. AI and robotic solutions can help us create models that will predict behavior or outcomes more accurately, like improving rig safety, dispatching crews faster, and identifying systems failures even before they arise,” said one of the authors of the survey, KPMG’s Global Sector Head for Energy and Natural Resources in the United States, said at the time in comments on the findings.

All this is still true and digital technology is being used ever more widely in the energy industry. The U.S. shale patch is a natural early adopter because production costs there tend to be generally higher than they are in conventional oil and gas drilling. But thanks to tech, these costs are coming down as drilling times accelerate—and accuracy is improving too.

Bloomberg noted in its recent report that technology had helped shale drillers shorten the average period for drilling a new well by a whole day and the period for fracking that well by three days. A day saved is a day’s costs saved. Then there is the drilling of longer horizontal wells that last year contributed significantly to higher-than-expected well productivity in the shale patch. And it would not have been possible without digital technology.

According to Evercore ISI, AI and other tech could bring costs in the shale patch down by double digits as soon as this year. “There’ll be significant cost savings, at a minimum double digits, but probably in the 25% to 50% of cost savings in certain scenarios,” Evercore analyst James West told Bloomberg.

These are some significant cost savings, for sure. And if they do materialize, they would certainly enable higher production—if the industry develops an appetite for it. This used to be the natural order of things: whenever drillers found a cheaper way to drill, that was what they did, boosting production.

Now, times are somewhat different. Oil and gas companies do plan for higher production—but within limits as they continue to prioritize shareholder returns and capital discipline. Yet digital tech adoption will likely intensify—because it can apparently help oil and gas companies meet their climate-related targets.

Right now, there is a campaign gathering speed against methane emissions. Just an afterthought a few years ago when everyone focused on CO2, methane has now become a public climate enemy in its own right because of its more powerful, though shorter-lived, greenhouse effect.

Methane emission tracking and monitoring—and ultimately reduction—is becoming a priority area for the energy industry. This is one area where digital technology would certainly come in handy, especially since it is already used for monitoring and risk assessment.

AI and other tech will also come in handy in boosting operational efficiency. Remote drilling and monitoring is a big growth area, and so is equipment failure prediction, which is crucial in this industry. Baker Hughes, for example, boasts it can predict equipment failure for 65% of a client’s wells in the Permian. It wants to boost this to 70%, and it probably will before too long.

Perhaps most importantly, however, is that AI and the rest of what we collectively call digital tech could help oil and gas with its talent shortage problem. Fewer and fewer college-age people are choosing a career in oil and gas. That’s in large part a result of a concerted effort by climate NGOs to discourage them from choosing such a career and, in part, due to the long-term uncertainty of such a career. Cyclical industries are famous for it. Many young people also apparently dislike the physical demands of oilfield work.

Yet the tightening embrace between oil and gas and digital technology is attracting a new sort of talent that does not mind working in the oil and gas industry as long as that work is conducted in an office and not the field. The adoption of things like AI, automation, and predictive analytics is changing the reputation of oil and gas—and for the better this time. And it is changing the industry itself.

By Irina Slav for Oilprice.com

B.C. funds project to extract minerals, metals while reducing environmental impact

A statement from the province says Vancouver-based PH7 Technologies Inc. has developed a "closed-loop" process using chemistry to extract and refine critical minerals and help the industry transition to renewable energy.


Author of the article:
The Canadian Press
Published Mar 20, 2024 • 

Energy and Mines Minister Josie Osborne says the company is demonstrating the kind of innovative thinking that could transform mining around the world. 

PHOTO BY CHAD HIPOLITO /THE CANADIAN PRESS
Article content

The B.C. government is funding a pilot project that it says offers the mining industry a way to significantly reduce the environmental impacts of extracting critical minerals.

A statement from the province says Vancouver-based PH7 Technologies Inc. has developed a “closed-loop” process using chemistry to extract and refine critical minerals and help the industry transition to renewable energy.

It says the process also enables the extraction of metals from low-grade resources in a cost-effective way, including platinum-group metals such as copper and tin.

Mines Minister Josie Osborne says the company is demonstrating the kind of innovative thinking that could transform mining around the world.

The company is receiving $850,000 from a provincial fund to conduct a pilot project to process 5,000 kilograms of raw materials each day into about 2,500 kg of extracted platinum group metals per year.

The release says the process results in significantly lower greenhouse-gas emissions, and lower electricity and water usage compared with mining or other recycling methods.

US Critical Materials discovers gallium deposit in Montana

The US currently relies entirely on imports for gallium, predominantly from China.

March 22, 2024
Gallium is used in semiconductors as well as defence systems. Credit: BeataGFX via Shutterstock.com.

US Critical Materials has announced the discovery of a “strategically significant” high-grade gallium deposit within its 6,700-acre claims in Sheep Creek, Montana.

The discovery of gallium, which is essential for a range of applications including semiconductors and defence systems, is said to be very important as the US currently relies entirely on imports, predominantly from China.

This issue has been exacerbated by the recent embargo on gallium exports by the Chinese Government.

The embargo has intensified concerns as gallium is a critical component in various technologies such as semiconductors, 5G networks, smartphones, satellite systems and critical photonics technologies.

The 2022 list of critical minerals by the US Government emphasised gallium’s supply vulnerability, which has been exacerbated by China’s export restrictions.

In response to this challenge, US Critical Materials took a proactive step in December 2023 by partnering with Idaho National Laboratories.

The agreement focuses on developing new rare earth processing methods, including gallium separation.

The collaboration focused on leveraging novel technologies to establish a domestic supply of gallium, thereby reducing the national security risks associated with its importation.


The initiative is a significant stride towards securing the US’ critical mineral supply chain and enhancing the country’s self-reliance in strategic resources.

Based in Salt Lake City, US Critical Materials has holdings in Montana and Idaho.

The mineral deposits held by the company are said to be unique due to their high grades of rare earths, low levels of thorium and large numbers of surface carbonatites.

Push for ESG price premiums may reshape global critical minerals markets



As low nickel prices force Australian miners to scale back production, some have called for an ESG premium on low-carbon production that would help Western producers compete with cheaper, but more polluting Indonesian metal.

But are customers willing to pay more for low-carbon nickel? Some analysts say yes — under certain conditions.

“If the market sees a benefit in paying a premium for certain supplies then it will,” Jim Lennon, managing director of commodities at Macquarie Group, told The Northern Miner in an interview. “A buyer would be willing to pay a premium if they can see an economic benefit in using that product, such as receiving a government subsidy or securing a sale of a ‘greener’ electric vehicle.”

The price of nickel has been on a downtrend since late 2022 when it was $33,575 per tonne ($15.23 per lb.). The price on Tuesday was $17,678 per tonne ($8.02 per lb) and in February dipped as low as $15,850 per tonne ($7.19 per lb).

The price doldrums have prompted Wyloo Metals and BHP (ASX: BHP) to suspend operations in Australia, with BHP announcing it would take a $2.5 billion impairment on its assets.

Given the devastation to its nickel sector, Australia has been the most vocal in creating new variable price brackets for low-carbon emissions nickel.

The idea for premium ESG pricing isn’t new. In fact, some experts argue that there’s already a premium.

Canada Nickel (TSX: CNC; US-OTC: CNIKF) CEO Mark Selby says people might be surprised to learn that price premia have already been paid for various North American products perceived as cleaner on Asian markets.

Selby notes that domestic premiums for certain materials have been sustained over several years, which might not be directly attributable to lower carbon footprints or ESG factors alone but could be influenced by a combination of factors, including local supply.

But this type of premium isn’t helping Australian nickel miners. And deliberately imposing an ESG premium would be a different story.

“The main challenge is defining what ‘ESG-compliant’ actually means,” Macquarie’s Lennon said.

It’s an obstacle that the London Metal Exchange (LME) is facing as it investigates and prepares for the potential emergence of premium pricing for low-carbon products on separate trading contracts.

Georgina Hallett, LME’s chief sustainability officer, says that there’s increasing interest from producers, consumers, and investors in establishing a price premium for metals produced with lower carbon footprints. However, defining what constitutes ‘low carbon’ or ‘green’ metals isn’t easy due to the lack of a standardized, universally accepted framework for measuring and verifying the environmental impact of metal production processes.

“The aim is to build a robust framework that supports the gradual introduction of sustainability-linked pricing mechanisms while ensuring broad market participation and avoiding undue disruption,” Hallett said. “By taking a step-by-step approach, the LME hopes to align the interests of various stakeholders and drive meaningful progress toward the integration of sustainability into the global metals market.”

Free market forces

Lennon suggests that establishing a special low-carbon contract for metals on the LME is unnecessary. This is because the prices for different products are already determined by normal market activities, such as supply and demand. Just like prices for different metal shapes and origins adjust based on market conditions, the prices for products with various ESG qualities would naturally adjust in the same way.

“Exchanges don’t need necessarily to get involved since they can focus on ‘objective criteria for delivery (shapes, metal purity, etcetera) and leave the market to decide on ‘subjective’ factors such as value-in-use of different products/shapes and ESG,” Lennon said.

From an exchange perspective, like the LME, there is also a risk of damaging liquidity if they were to introduce multiple contracts. Compared with large commodity derivative markets, nickel is not particularly liquid and dividing this liquidity could reduce the usability of the market for some participants.

Lennon says markets will ultimately determine the outcome. Currently, nickel prices vary significantly between products depending on supply and demand.

Today’s primary nickel products that are LME deliverable include metal rounds, pellets, cut cathode, and full plate cathode. When delivered to LME warehouses, each product is assigned a warrant associated with it. When buyers want to take delivery from the LME, they are often willing to pay LME brokers a premium for warrants of a particular material shape or origin.

Similarly, other non-LME deliverable products, including intermediates (concentrates, mattes, MHP, MSP, etc.) or finished products (ferronickel, nickel pig iron, nickel sulphates, nickel chlorides, etc.) also sell at varying discounts or premiums to LME base prices. Lennon said these premiums/discounts can change dramatically due to changes in supply and demand.

For example, nickel pig iron was selling at a premium to the LME price at the start of 2022 and then had fallen to a discount of 40% to the LME by the first half of 2023.

“Product type, ESG, and country of origin are all important properties and presumably were factors that led major automakers to agree to term supply contracts with BHP and Vale in recent years. ESG was no doubt a factor in these negotiations,” Lennon said.

Canada Nickel’s Selby emphasized the importance of provenance tracing rather than setting up a formal two-tiered pricing system.

He points out that imposing a pricing mechanism before the market is ready can lead to inefficiencies, such as a benchmark that does not accurately reflect market conditions. He suggests letting the market sort it out.

“We will continue to observe the distinction between Western-supplied, clean, green nickel and the high-carbon, less ESG-compliant nickel from China and Indonesia,” he said. “As for the necessity of a formal pricing mechanism, it’s typically better if such mechanisms emerge naturally in the marketplace before establishing a formal platform for trading them.”

Aussie nickel rout

An increase in supply from Indonesia has cratered nickel prices, as the southeast Asian nation boosted production of refined and semi-refined nickel, mainly on the back of an export ban on raw ore, which led to massive investment from China in new processing plants, according to Lennon.

Indonesia has become the dominant nickel producer, accounting for 55% of global supply, up from 7% in 2015, according to Bank of America data.

Higher-cost Australian supply can’t compete.

Australia’s federal resources minister Madeline King responded to the raft of nickel suspensions by adding nickel to the country’s critical minerals list, enabling industry access to part of the A$4 billion ($2.6 billion) federal funding earmarked for critical energy transition minerals exploration and development.

“Prices paid for Australian minerals need to recognize the high ESG standards the Australian industry adheres to and the fact that Australian workers enjoy good working conditions and the highest safety standards.”

At PDAC she noted that Canada and Australia have agreed to jointly advocate for robust ESG credentials to be built into global, transparent and traceable critical minerals supply chains.

Laying foundations

The LME has been considering introducing a premium for green or sustainable metals since it released a 2020 white paper on the topic, Hallett noted.

In 2021, the LME collaborated with Metalshub, a digital metals procurement platform which facilitates buyers’ access to the physical metal that meets specific attributes, including carbon intensity and other ESG criteria. The LME said that low-carbon nickel, classified as producing 20 tonnes of carbon dioxide or less per tonne of nickel, could already be traded on Metalshub’s system.

The platform aims to allow market participants to specify and search for metals that meet specific sustainability standards, thereby fostering the emergence of a market-driven definition of ‘green’ metals.

Hallett says the critical missing component to formalizing a new price bracket is doing the less sexy but foundational work around how one measures emissions the same way across the industry to create an equal playing field for products in the value chain included in that new contract.

The LME has initiated several measures to promote sustainability within the metals market. One of the key initiatives is the development of metal-specific measurement methodologies, in collaboration with metal industry associations, to standardize measuring carbon emissions across different metals.

However, the LME is taking a deliberate approach to implementing a low-carbon pricing mechanism for nickel and other metals, given the still-evolving market for low-carbon metals.

“Our approach remains one of cautious optimism and pragmatic progression,” Hallett says. “We are committed to leading the industry towards a more sustainable future, understanding that real change is achieved not by rushing but by thoughtful, collective action.”

OPPORTUNIST
Billionaire among prominent Indians flocking to Modi’s party ahead of vote

Reuters | March 24, 2024 | 

Naveen Jindal, head of Jindal Steel and Power. (Image by the World Economic Forum, Wikimedia Commons.)

A billionaire industrialist and a former Indian Air Force chief on Sunday became the latest prominent figures, including a judge and an ambassador, to join Prime Minister Narendra Modi’s party in recent weeks as it seeks to widen its lead over the opposition.


Modi’s Bharatiya Janata Party (BJP) is widely expected to win a third straight term in elections starting next month, as the opposition struggles to stay together while its leaders are embroiled in various corruption investigations.

Analysts say the wave of new joiners, many from the main opposition Congress party that has ruled India for more than five decades, indicates the inevitability of another BJP win.

Naveen Jindal, head of Jindal Steel and Power and a two-time Congress parliamentarian, followed the country’s last air force chief, Rakesh Kumar Singh Bhadauria, in joining the BJP late on Sunday. Moments after he quit Congress, the BJP said Jindal would contest the upcoming election from his home state of Haryana for the party.

“To fulfil the resolve of Prime Minister Modi for a developed India, famous industrialist, sportsperson and politician Naveen Jindal joined the BJP today,” BJP General Secretary Vinod Tawde told a press conference, with Jindal by his side thanking Modi for the opportunity.

Abhijit Gangopadhyay, who resigned as a judge of the Calcutta High Court earlier this month, will also contest the election for the BJP.

On Saturday, six former lawmakers from Congress in the state of Himachal Pradesh joined the BJP. Before that, India’s ambassador to the United States until January, Taranjit Singh Sandhu, became a member and is expected to contest the polls.

Unlike previous governments that mostly relied on seasoned politicians to run key ministries, Modi roped in experts to head important departments like foreign, technology and energy in his current term that began in 2019.

Opposition parties say many of their members have been forced into joining the BJP out of fear of corruption investigations. The BJP denies that.

Congress, meanwhile, says it is short of money even for campaign work because authorities have frozen its accounts in connection with a number of tax investigations.

(By Krishna N. Das; Editing by Giles Elgood)

China’s younger steel industry slows net zero path, BHP CEO says

Bloomberg News | March 25, 2024 |

BHP CEO Mike Henry (Credit: BHP)

China’s steel industry is young compared to Europe’s, and its transition to net zero may be slower as it takes a different path to reach government-mandated decarbonization goals, according to BHP Group Ltd.’s chief executive officer Mike Henry.


While certain unique factors have led European steelmakers to make faster plans to carbon neutrality, China may be at a disadvantage in the global race to remove carbon from heavy industry because its blast furnaces are younger and not due for retirement anytime soon, Henry said in remarks prepared for delivery at the China Development Forum in Beijing on Sunday.

Steel making accounts for roughly 8% of global carbon dioxide emissions. China produces approximately 50% of the world’s steel, with a goal to replace 15% of its output with electric arc furnaces by 2025.

Europe is replacing its traditional coal-fired blast furnaces with electric arc furnaces and recycling vast reserves of scrap steel, Henry said. China however is continuing to add steel on a net basis, meaning the availability of scrap is low.

“Given younger, less carbon intensive blast furnaces, and less scrap availability, Chinese steelmakers are understandably looking at continuing to use these assets rather than replacing them earlier than otherwise would be the case,” the top executive of the world’s biggest miner said.

Manufacturers in China are showing their commitment by using technologies such as hydrogen injection, and carbon capture, utilization and storage to offset rising amounts of greenhouse gas emissions, he said, adding BHP is supporting such efforts through several partnerships.

“China’s willingness to open up to the world, and the world’s willingness to work with China” is integral to the future of energy, he said.

(By Paul-Alain Hunt)

China’s top miner says it ‘will be targeted’ amid US risks

Bloomberg News | March 25, 2024 

Tibet. (Image by Göran Höglund (Kartläsarn), Flickr).

Zijin Mining Group Co., one of China’s most acquisitive metals groups and its biggest listed miner, warned that US-led efforts to tackle Beijing’s control of minerals could slow the company’s global expansion, warning that geopolitical tensions are “becoming increasingly grim”.


The attempted containment of China by developed nations was now commonly understood, and Zijin “will be targeted for sure” given its leading role in the industry and plans for more acquisitions, Chairman Chen Jinghe said on a media call on Monday. “The development of the Chinese economy and the Chinese mining industry is becoming more difficult,” he added.

Beijing’s dominant role in mining supply chains — especially in “critical minerals” vital in industries from electric vehicles to military hardware — has led the US and European Union to push for greater reliance on materials produced domestically or by friendly nations. That poses a risk to the growth of Zijin, which has bought copper and gold mines from Canada to Africa, and expanded into lithium in a bid to become a key player in the battery material.

Chen’s comments came after Zijin said on Friday that it planned to ramp up output of all its metals by 2025 through major acquisitions, including of “ultra-large mines or mining companies with global influence.” The company will remain active in its global development, despite “geopolitical tensions becoming increasingly grim,” Chen said Monday.

Zijin also delivered an outlook for its major commodities in its annual results. Here are some of the key comments:While gold is getting support from central-bank buying, the upside could be capped if the US economy achieves a “soft landing”. Uncertainty over the pace and magnitude of Federal Reserve cuts will drive volatility.
Copper will “continue to exhibit significant fluctuations” amid global supply disruptions and uncertainty over demand from key sectors including autos and real estate in China, or in regions including the US and Europe
The global zinc market is expected to be tightly balanced, and mining costs will support a bottom for prices
Lithium producers are already responding to low prices for the battery material by cutting supply, and lithium should have strong support at about 100,000 yuan a ton. That’s just below recent prices.

Pilbara Minerals, Ganfeng agree to study for lithium chemical plant

Reuters | March 24, 2024 | 

Pilgan plant at the Pilgangoora lithium operation. (Image courtesy of Pilbara Minerals.)

Australia’s Pilbara Minerals has agreed to a study with Chinese customer Ganfeng Lithium on options to build a 32,000 metric-ton-per-year lithium conversion facility in a country yet to be decided, the companies said on Monday.


The feasibility study for the plant that could produce lithium carbonate or hydroxide is expected to be completed in the March quarter of 2025.

The parties are considering a number of locations for a plant, including Australia, to explore greater geographical diversification in the battery chemicals supply chain, the country’s biggest independent lithium miner said in an exchange filing.

Pilbara Minerals already has a joint stake with South Korea’s POSCO in a lithium hydroxide plant and a tie-up with Calix Limited for the construction of a midstream lithium chemicals demonstration plant in Western Australia.

The study will also include the potential production of a midstream lithium chemicals product to help cut transportation volumes and the carbon footprint.

Pilbara Minerals seals another Chinese offtake deal

“Preliminary engagement with several countries has indicated strong interest in establishing lithium chemical production with potential economic, taxation and funding incentives on offer, together with access to land and offers of assistance with permitting and approvals,” the Pilbara Minerals filing said.

If the joint venture proceeds, the parties intend to own the project 50:50, but Ganfeng is open to selling down its stake, depending on potential benefits from the US Inflation Reduction Act subsidy scheme that has US sourcing requirements, the companies said.

Pilbara Minerals is expanding production to 1 million tonnes of spodumene a year. It has committed to supply 300,000 tons of spodumene a year for the project via a 15-year offtake agreement if it goes ahead.

If a final investment decision fails to secure approval, Pilbara will supply an extra of 100,000 tons of spodumene to Ganfeng Lithium on an annual basis from 2027 to 2030, on top of the existing offtake agreement, Ganfeng Lithium said in a filing to the Shenzhen Stock Exchange on Monday.

It will in the June quarter decide whether to expand production capacity beyond 1 million tonnes a year, it said in the statement.

(By Melanie Burton and Amy Lv; Editing by Tom Hogue, Jamie Freed and Louise Heavens)

Northvolt starts construction of €5 billion battery plant in Germany

Northvolt was founded by two former Tesla executives. 

Bloomberg News | March 25, 2024 | 

(Image: Northvolt)

Northvolt AB is starting construction of a €5 billion ($5.4 billion) battery plant in northern Germany to supply electric cars, capping an intense lobbying effort under newly relaxed European Union state aid rules.


The project will receive just over €900 million in handouts and guarantees from Germany, which helped prevent the project being lured to the US. Chancellor Olaf Scholz said the factory near the town of Heide will help support the country’s future as a manufacturing base.


“The production of good cars beyond the combustion engine continues to form the backbone of our industrial sector,” Scholz said Monday according to a statement during an opening ceremony. “For that we need battery cells made in Germany, made in Europe.”

The EU last year eased its rules on nations providing subsidies to better compete with the US, where generous tax relief and aid for climate technologies is pulling in investments. Northvolt, Europe’s only major home-grown EV battery maker with customers including Volkswagen AG and BMW AG, is also developing a site in Canada.

Northvolt’s Heide plant, running on wind power, will employ roughly 3,000 people and start operating in 2026. The site is targeting an annual capacity of 60 gigawatt-hours — which would make it Germany’s biggest — and enough to power roughly 1 million electric vehicles. Initial estimates on the cost of building Heide were pegged at €4.5 billion.

(By Rafaela Lindeberg and Michael Nienaber)

Ivanhoe Electric earns into 60% of nickel-copper project in Côte d’Ivoire

Staff Writer | March 25, 2024 l

Credit: Sama Resources

Ivanhoe Electric (NYSE American: IE) (TSX: IE) has completed its earn-in to acquire a 60% interest in the Samapleu-Grata nickel-copper project in Côte d’Ivoire after satisfying the expenditure requirements outlined in an agreement from three years ago.


The completion of the earn-in, which required Ivanhoe to spend C$25 million on exploration by March 2024, follows the release of an updated preliminary economic assessment (PEA) by Sama Resources (TSXV: SME), its joint venture partner on the polymetallic project, last week.

The PEA demonstrated the potential for a 16-year open-pit mine producing copper concentrates of 38,627 tonnes and nickel concentrates of 55,119 tonnes a year, with associated byproducts such as platinum and palladium.

Its average annual nickel metal in concentrate will amount to approximately 7,165 tonnes and copper metal in concentrate of approximately 10,043 tonnes.

Using a long-term nickel price of $8.83/lb. and copper price of $3.99/lb., the study calculated a post-tax net present value (at an 8% discount) of $257 million and an internal rate of return of 22.3%. The initial capital cost is $338 million.

The 2024 PEA, said Sama, was an improvement on the study published in 2020 since it effectively doubled the mill feed and changed the flowsheet to produce conventional nickel and copper concentrates. In doing so, it increased the overall nickel concentrate production by 19%, and increased the life-of-mine copper concentrate production by more than 100% over its projected mine life.

These project economics only included the Grata, Main and Extension deposits and the Sipilou Sud laterite deposit, which together cover just 3% of the 835 km2 project area at Samapleu-Grata.

This, according to Ivanhoe, provides ample opportunities for exploration upside and expansion opportunities, including at known mineralized zones at Yepleu and Draba.

“We are particularly encouraged to see the polymetallic nature of the project and the inclusion of all key payable metals – nickel, copper, gold, cobalt, platinum and palladium – and the significant improvement in both the quality and quantity of potential future copper concentrate production,” Ivanhoe Electric CEO Taylor Melvin said in the March 21 news release.

Following the latest updates, the Samapleu-Grata project is now a 60/40 joint venture between Ivanhoe Electric and Sama. In addition to earning its 60% interest, Ivanhoe also owns 22.7% of the common shares of Sama.

Ivanhoe Electric’s shares rose by 2.8% to C$12.34 by 11:15 a.m. in Toronto. The Vancouver-headquartered copper explorer has a market capitalization of C$1.49 billion ($1.1bn).

US awards record $6bn to back industrial emissions reduction projects

Reuters | March 25, 2024 | 

Credit: Century Aluminum

The US Energy Department on Monday announced $6 billion in federal funding to subsidize 33 industrial projects in 20 states to cut carbon emissions, saying the investment would support well-paying union jobs and boost US competitiveness.


Energy Secretary Jennifer Granholm will unveil the awards during a visit to a Cleveland-Cliffs Steel Corp facility in Middletown, Ohio, which will receive up to $500 million to install two new electric arc furnaces and hydrogen-based technology to reduce greenhouse gas emissions by 1 million tons.

Granholm said the initiative, the single largest industrial decarbonization investment in US history, would leverage a total of $20 billion, including the companies’ share of the costs. Together, the projects are expected to eliminate 14 million metric tons of pollution each year, equivalent to taking some 3 million gas-powered vehicles off the road, she said.

The Portland Cement Association, an industry group, said the funding “is a welcome acknowledgement from the government that America’s cement manufacturers are taking ambitious and significant steps toward reaching carbon neutrality.”

Manufacturing of construction materials is a significant source of global carbon dioxide (CO2) emissions. Production of cement, the main ingredient of concrete, accounted for 7% of global CO2 emissions in 2019, the International Energy Agency estimates.

The awards come as President Joe Biden’s 2024 reelection campaign kicks into high gear, with the Democratic president and other key officials traveling to battleground political states to tout the administration’s economic policies and job creation.

Granholm said the projects would slash emissions from industries such as iron and steel, cement, concrete, aluminum, chemicals, food and beverages, pulp and paper, which account for about a third of US carbon emissions.

Century Aluminum will receive up to $500 million to build the first new US primary aluminum smelter in 45 years in the Mississippi River basin. The project will double the size of the current US primary aluminum industry and avoid 75% of emissions from a traditional smelter.

The United States was the leading primary aluminum producer in the world in 2000 but is now ninth with four US smelters in operation, down from 23 in 1993, said energy group SAFE.

“A new domestic smelter puts the US back in the game and reverses our dangerous, decades-long decline in primary aluminum production,” said Joe Quinn, director of the Center for Strategic Industrial Materials at SAFE.

Dow Chemical will receive up to $95 million for a US Gulf Coast facility to use approximately 100,000 tons of CO2 annually to produce key components of electrolyte solutions needed for electric vehicle batteries, while Kraft Heinz will get up to $170.9 million to upgrade and decarbonize operations at 10 facilities, reducing annual emissions by more than 300,000 tons of carbon dioxide annually.

ExxonMobil won a $331.9 million award to enable the use of hydrogen in place of natural gas for ethylene production in Baytown, Texas for the key chemical feedstock in textiles, synthetic rubbers, and plastic resins.

The Energy Department said nearly 80% of the projects are in disadvantaged communities that had experienced years of divestment.

(By Andrea Shalal and David Shepardson; Editing by Sonali Paul)

Taseko to become sole owner of Gibraltar mine

Gibraltar mine, Canada’s second largest open-pit copper operation.

Cecilia Jamasmie | March 25, 2024 |

 (Image courtesy of Taseko Mines.)

Taseko Mines (TSX, LON: TKO) (NYSE: TGB) said on Monday it’s acquiring the remaining 12.5% interest in the Gibraltar mine, the second largest open-pit copper operation in Canada, from current holders Dowa Metals & Mining and Furukawa.


The move will boost the Canadian miner’s attributable copper production by 14% and increase cash flow as the company progresses with construction at the Florence copper project in Arizona, CEO Stuart McDonald said.

The definitive agreement will see Taseko pay C$117 million ($86.1m) over a period of ten years for the shares held by Dowa and Furukawa in Cariboo Copper Corp.

With the move, the Vancouver-based company will be the sole owner of Cariboo Copper Corp, effectively gaining a 100% interest in Gibraltar in south-central British Columbia.

It also gives it additional offtake rights as the Cariboo offtake contract comes back to Taseko, providing potential cost savings, McDonald said.

On top of the initial C$5 million ($3.7m) to be paid to Dowa and Furukawa (C$2.5 million each) after closing the deal, Taseko may be responsible for contingent payments depending on copper prices and Gibraltar’s cashflow, the company said.

“We have established a positive relationship with Dowa and Furukawa over the last 14 years,” McDonald noted. “Given that both groups are reducing their copper smelting businesses and are exiting their copper mining investments, we’ve been able to structure this exit from our long-term partnership in a mutually beneficial manner.”

The company posted its highest ever revenue of $525 million for 2023 earlier this month, thanks mainly to the contribution of Gibraltar mine. The revenue represented a 34% increase compared to 2022.

In 2023, the mine produced a total of 122.6 million pounds of copper, with an average copper recovery rate of 82.6% and head grade of 0.25%. This production was higher than the company’s original guidance and also 26% higher than in 2022.

Taseko is also close to beginning production at Florence, which is expected to happen in the fourth quarter of 2025.