British Columbia

Teck Coal charged for alleged dumping harmful to fish in B.C

Environment Canada said the charges stem from an investigation that began in March 2023

The Canadian Press · Posted: Jul 11, 2024 

A sign welcomes people to Sparwood, B.C., near Teck Coal's Line Creek operations. (Jeff McIntosh/The Canadian Press)

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Environment Canada has laid five charges against Teck Coal Limited after the company was alleged to have dumped harmful substances into waters frequented by fish in southeastern B.C.

The department says the charges for violations of the Fisheries Act stem from an investigation that began in March 2023. 

It says officers were looking into an allegation that the resource company deposited a substance into Dry Creek from its Line Creek Operations coal mine and into the adjacent Fording River. Both bodies of water are frequented by fish, according to the ministry.

• IN DEPTH
  Tracing the toxic impact of B.C. coal mining

Environment Canada says a so-called deleterious substance can include oil, chemicals and pesticides that, if added to water, would degrade or alter the water quality to the point that it could harm fish.

Prior to this legal challenge, Teck Coal had also been fined tens of millions of dollars for contaminating waterways in B.C. over the years.

• Coal company Teck fined $60M for contaminating rivers in southeastern B.C.

• B.C. fines Teck Coal $16 million for contaminating Kootenay waterways

• $6.4B needed to clean toxic selenium from B.C. coal mines: report

The five recent charges against the company have not been tested in court. The ministry's news release does not indicate a court date. 

On Thursday, Teck also announced that the company has closed the sale of its B.C. coal mining operations to Glencore. When reached for comment, the spokesperson for Teck referred CBC News to the Swiss commodities giant.

• Teck closes sale of B.C. coal mining operations to Swiss company

Glencore said in a statement to CBC News that the Elk Valley Resources business will be liable for any penalties payable from the charges.

"We will not comment further on ongoing legal matters but will honour the commitments made under the ICA and note that EVR has made significant progress in advancing the Elk Valley Water Quality Plan and will continue these efforts," the statement said. 

With files from Alex Nguyen

Environment and Climate Change Canada Enforcement lays five charges for contraventions of subsection 36(3) of the Fisheries Act 

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NEWS PROVIDED BY

Environment and Climate Change Canada

Jul 11, 2024,


CRANBROOK, BC, July 11, 2024 /CNW/ - The Government of Canada is committed to protecting the health, safety, and environment of Canadians. Environment and Climate Change Canada enforces the laws that protect the air, water, and natural environment in Canada, and it takes pollution incidents and threats to the environment very seriously.

On July 10, 2024, Environment and Climate Change Canada Enforcement laid five charges against Teck Coal Limited for contraventions of subsection 36(3) of the Fisheries Act. Under subsection 36(3) of the Fisheries Act, it is prohibited to deposit or to permit the deposit of a deleterious (harmful) substance into water frequented by fish, or in any place where the deleterious substance may enter any such water.

The charges stem from an investigation opened by Environment and Climate Change Canada enforcement officers on March 7, 2023. The investigation was conducted into alleged deleterious (harmful) deposits into Dry Creek on Teck Coal Limited's Line Creek Operations Mine in British Columbia, and the adjacent Fording River.

All charges are currently before the Court, and they have not yet been proven. Under Canadian law, those charged are presumed innocent until proven guilty. Therefore, Environment and Climate Change Canada will not be commenting further at this time.

Environment and Climate Change Canada has created a free subscription service to help Canadians stay current with what the Government of Canada is doing to protect the natural environment.

Quick factsEnvironment and Climate Change Canada enforcement officers are responsible for administering and enforcing the pollution prevention provisions of the Fisheries Act.
Dry Creek and the Fording River are waters frequented by fish, as defined under the Fisheries Act.
Mining of coal can create large volumes of waste rock that, when exposed to water and air, may accelerate the release of contaminants including (but not limited to) selenium and nitrate.
A deleterious substance can be any substance such as oil, chemicals, and pesticides that if added to water would degrade or alter the water quality to the point that it could harm fish.
The Fisheries Act allows for two types of charges —those by summary conviction and the other by indictment. The charges against the company were laid by indictment. Offences charged by indictment are deemed more serious.

Associated linksFisheries Act (Pollution Prevention Provisions)
Frequently Asked Questions: Fisheries Act Pollution Prevention Provisions
Testing for Toxicity to Fish

Environment and Climate Change Canada's X (Twitter) page

Environment and Climate Change Canada's Facebook page

SOURCE Environment and Climate Change Canada

China pauses new coal-based steelmaking for first time in years

Bloomberg News | July 11, 2024 | 

The production of steel currently accounts for 8% of the world’s total carbon emissions. 

(Stock image by Anelo.)

China didn’t permit any coal-based steelmaking projects in the first half of the year for the first time since announcing its major climate neutrality goals in 2020, according to a report released Thursday.


All 7.1 million tons a year of steelmaking capacity permitted by provincial governments in the first half used electric arc furnaces, a cleaner process that runs on recycled scrap and electricity, said the Center for Research on Energy and Clean Air in its report on Thursday.

Greening the steel industry, China’s second largest source of carbon emissions at 15%, is a vital part of the country’s plan to become carbon neutral by 2060. Beijing has been taking measures including curbing crude steel output and promoting cleaner steelmaking technology over the past years. But challenges remain as mills struggle with low margins in a weak economy.

The move to stop permitting coal-based projects could be a turning point in China’s steel decarbonization progress, CREA said. It will keep China on track to cut 200 million tons of carbon dioxide from the steel industry by 2025, a 10% drop from its peak in 2020, said the research organization.

The world’s biggest steel user announced a new 2024-2025 action plan for the sector in May, which sets a 53 million-ton emissions reduction target and restricts exports of low-value iron and steel products.

“As China’s steel demand peaks and more scrap becomes available, it brings us a major opportunity to reduce emissions over the next 10 years,” Xinyi Shen, the lead author, said in the report.

(By Audrey Wan)

Polish miner found alive after more than 48 hours trapped underground

Reuters | July 13, 2024 | 3:35 pm News Europe Coal

Hardhat in a coal mine. (Image from RawPixel, CC0).

A Polish coal miner trapped underground since Thursday was found alive by rescuers on Saturday, local media reported.


The Rydultowy mine in southern Poland, operated by state-controlled group PGG, was hit by a tremor at around 06:00 GMT on Thursday about 1,200 metres (3,960 feet) below ground.

One miner died as a result of the tremor and some 76 were brought to the surface alive by rescuers on Thursday, with 17 taken to hospital.

State-run news channel TVP Info reported that the miner was conscious when rescuers reached him. Private broadcaster RMF FM said a helicopter was at the mine to transport him to hospital.

Most of the miners who went to hospital have now been discharged, TVP Info reported.

(By Alan Charlish; Editing by Mark Potter)

One miner dead after tremor in Poland, one still missing

Reuters | July 11, 2024 | 

Coal mine in Poland (Credit: PGG)

One miner died and one was still trapped underground after a pit in southern Poland was struck by an earth tremor, mine owner PGG said on Thursday evening.


Representatives of the mine said earlier that one of the miners was being brought to the surface without giving any details on his condition.


Some 76 miners had been brought to the surface earlier and 17 had been taken to nearby hospitals with one seriously hurt, PGG CEO Leszek Pietraszek said during a televised news conference in the afternoon.

PGG spokesperson Aleksandra Wysocka-Siembiga earlier said the tremor occurred at around 06:00 GMT about 1,200 metres (3,960 feet) below ground at the Rydultowy mine.

(By Alan Charlish, Anna Wlodarczak-Semczuk and Anna Koper; Editing by Mark Heinrich, David Holmes, Barbara Lewis, David Evans and Sandra Maler)

Column: After another boom and bust, where next for lithium?

CENTRAL PLANNING PERHAPS

Reuters | July 14, 2024 |

(Stock Image)

Lithium boom has turned to lithium bust over the last two years as a wave of new supply overwhelms weaker-than-expected demand for electric vehicle (EV) batteries.


The CME contract for lithium hydroxide has collapsed from a 2022 high of $85,000 per metric ton to $11,930. The CME carbonate contract was above $40,000 when it began trading in July 2023 and has since slumped to $12,850.

Lithium has been here before. There was a similar boom-bust cycle in 2016-2017 but the difference this time is that no-one seems to be expecting a speedy recovery.

The short-term outlook is for prices to trundle along at the lows as the market digests surplus material.

The longer-term picture is more positive as governments force the transition to electric vehicles but there will be no return to the giddy heights of 2022 in the next 10 years, according to analysts at BMI, a Fitch Solutions company.

Don’t be too quick to write off either lithium or the electric vehicle sector, though. The current price bust has been exacerbated by one-offs on both the supply and demand sides of the equation.

CME lithium hyroxide and carbonate prices

Too much supply

Lithium producers view their product as a bespoke chemical tailored to battery-makers’ tight specifications rather than as a generic commodity.

Yet lithium’s price behaviour is that of any other commodity, periods of high pricing encouraging over-production which must then be weeded out by periods of low pricing.

That pattern is currently playing out as producers trim output and defer expansion plans in reaction to the new much lower price reality.

One little-discussed element of the current glut, however, is the surge in artisanal mining (ASM) in Africa, particularly in Nigeria and Zimbabwe.

Research house CRU estimates that artisanal miners accounted for almost two-thirds of African lithium supply in 2023 with volumes nearly equivalent to the global market surplus last year.

African shipments of ore and low-grade concentrates accounted for a quarter of China’s total lithium imports in the first quarter of this year on a metal contained basis, according to CRU.

Chinese entities are heavily involved in formalising artisanal supply which is centred on previous tin and tantalum mining areas.

However, ASM is particularly price sensitive. The current wave of independent production began when the price of spodumene ore was still above $6,000 per ton at the start of 2023. It is now closer to $1,000, challenging the economic viability of all but the richest of deposits.

More formalisation may result but as the cobalt market has learnt, ASM can be a very significant and very fast-moving swing component of the overall supply picture.

Too little demand

Compounding lithium’s price weakness has been a downgrade in expectations for EV sales as the Chinese market matures and the Western market loses some of its recent momentum.

The EV revolution has hit a slow patch but is far from going into reverse. BNP Paribas, for example, is still expecting global sales growth of 23% this year, equivalent to over 18.7 million vehicles.

What has changed, however, is the product mix. Sales of pure battery vehicles are flat-lining, while sales of hybrid gas-electric vehicles are booming, even in China.

Chinese sales of plug-in hybrids jumped by 90% year-on-year in April and May, while those of pure electric vehicles rose by a comparatively modest 10%, according to BNP.

This may be good news for the broader energy transition but it’s not so good for lithium since many hybrids use a nickel hydride battery with no lithium, the bank notes.

Hybrids, once viewed as a mere stepping stone on the journey from internal combustion to fully electric engines are proving remarkably popular with consumers worried about charging infrastructure and the relatively high cost of pure battery vehicles.

Automakers are responding. Stellantis, which saw hybrid sales grow by 41% year-on-year in Europe in the first half of the year, plans to expand its line of affordable hybrid vehicles to 36 models in Europe by 2026.

So too are governments. The Joe Biden administration has rowed back on its target of converting two-thirds of new vehicles to battery electric vehicles by 2032, allowing auto-makers to step up production of hybrids instead.

Full charge ahead

The automotive energy transition is still in full swing but is not matching the exuberant forecasts made a couple of years ago.

There is now too much lithium supply and too much battery capacity relative to consumer demand for electric vehicles.

The slowdown could easily reverse.

One critical facilitator will be the build-out of EV charging infrastructure, a sector which has attracted far less investment than battery manufacturing.

Car buyers in Europe and the United States are choosing hybrids because of range anxiety and they will continue to do so until they see more charging points.

The second key factor is price, with electric vehicles still more expensive than traditional cars everywhere outside of China.

Lithium price surge unlikely to return: Fitch

Just as high lithium prices were good news for producers but not battery-makers, current low prices are bad news for the lithium sector but very good news for consumers in the form of lower battery prices.

Lithium-ion battery packs registered a 7% increase in price between 2021 and 2022, breaking a long-running downtrend, according to the International Energy Agency. High lithium prices were matched by bull markets in other battery inputs such as cobalt, nickel and graphite.

Battery prices are now tumbling as prices for lithium and other materials fall.

The average Asian nickel-cobalt-manganese battery cell price fell to $90 per kilowatt hour in May, according to analysts at Benchmark Mineral Intelligence. That was the lowest since 2021 and a long way off the March 2022 peak of $166.

The seeds of the next lithium upswing are already being sown in the current low-price environment.

It will likely not match the spectacular boom of 2022 but lithium’s history of price volatility isn’t over yet.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Jane Merriman)

Vehicle electrification requires 55% more copper mines by 2050 — report

AND CENTRALIZED GLOBAL PLANNING (WWII)

Staff Writer | July 14, 2024 

View from above of an open-pit copper mine in Peru. Stock image.

Electrification of the global vehicle fleet would require 55% more new copper mines coming online by 2050, the target year for net-zero emissions, according to a recent study published by the International Energy Forum.


Even factoring out energy transition, the world will need to mine at least 115% more copper than has been mined in human history pre-2018 just to meet business-as-usual trends, the report added.

Dr. Lawrence Cathles, an earth and atmospheric sciences professor at Cornell University who co-authored the study, said these findings point to a “disconnect” between the intentions behind decarbonization and the reality of the materials required.
Supply-demand disconnect

In short, the study — led by Dr. Cathles and Dr. Adam Simon, a professor of earth & environmental sciences at the University of Michigan — found that the rate at which the world is producing copper cannot keep pace with the increasing global demand for electric vehicles.

To quantify this disconnect, it gave projections of both supply and demand in a fashion that is unique to prior studies (see below).

(A) Historic and projected mined copper production. (B) Copper mine production requirement scenarios. Credit: IEF

On the supply side, annual mine output is expected to increase by 82% (from 20.4Mt to 37.1Mt) by 2050, and so will the total supply, after accounting additions from copper recycling. However, all production estimates are set to peak around the year 2086 (mine output of 48.7Mt), as shown in Figure A.

On the demand side, the study investigated several decarbonization scenarios and broke down the additional copper production that will be required under each case up until year 2050 (Figure B) .

Evidently, the net-zero scenario displays the largest gap — requiring at least 194 mines or 6 new mines every year. On the other hand, the baseline scenario (business as usual) presents a more realistic challenge of 35 mines — about one per year (see chart below).

Extra copper (relative to 2018) mined between 2018 and 2050 and number of mines that must be put into operation each year over this period to meet electrification demands. Credit: IEF

However, the authors also noted that they have been optimistic in projecting the new mine creation needs. For instance, if copper recycling remains constant at its 2018 level rather than increasing as assumed, then the number of new mines required for baseline demand would be 43.
EV manufacturing goal

Even before reaching the 2050 net-zero target, the goal of 100% EV manufacture by 2035 will still require an unprecedented departure from the copper mining baseline, the report noted.

Historically, it is estimated that excursions from mine production have been around 1 million tonnes per year (in magnitude over about 15 years), and a departure from the baseline related to EV manufacture will be five times greater and twice as long as we have experienced before (5Mt for over 30 years).

Corrected for recycling, this mining excursion is equivalent to a demand gap of 8.1 million tonnes in 2035 and 9.6 million tonnes in 2040, it added.

It is worth noting that the methods used in this study are identical to the one used by M. King Hubbert, who was famous for successfully predicting 30 years of US oil production right up to when technologies such as directional drilling and hydraulic fracturing made it possible to produce natural gas and crude oil from shale and expanded the hydrocarbon resource.

Mining takes time

With increased mining activity, there also comes the question of whether the Earth holds enough resources to support this. The short answer given by the IEF report is yes.

Under the baseline scenario, about 1.69 billion tonnes of copper will be mined by 2050, which represents 26% of the total copper resource of approximately 6.66 billion tonnes estimated by the authors. Their total resource estimate is also close to the 5.6 billion tonne figure given by the USGS.

If mining ever shifts to greater depths in Earth’s crust, the copper resource would grow further to 89 billion tonnes, and 241 billion tonnes may be recoverable from the seafloor.

Hence, there is plenty of copper available. The real concern, then, is whether these resources can be mined fast enough to support baseline global development, and then go beyond towards vehicle electrification.

The study puts that into doubt by pointing out that the new copper mines that came online between 2019 and 2022 took an average of 23 years from the time of a resource discovery for mines to be permitted, built, and put into operation.

“Within this long discovery-to-operation pipeline, we should see at least ten years of prospects (e.g. 17 prospects) with a combined production potential of 8 million tonnes per year in the pipeline to have any confidence we can meet the 1.7 major deposits per year discovery rate required for EV manufacture,” the authors wrote.

Hybrid: An alternative

In light of the findings, the authors of the report suggested hybrid vehicles as a better alternative for balancing the copper demands of electrification and the pressure placed on the mining industry.

“There is remarkably little difference between the amount of copper needed to manufacture hybrid electric rather than ICE vehicles,” they said, highlighting that hybrid electric vehicles require 29 kg of copper compared to 24 kg for an ICE vehicle.

“It would therefore be judicious to aim for a transition to the 100% manufacture of hybrid electric vehicles by 2035, rather than transitioning to the 100% manufacture of battery electric vehicles, which require 60 kg. The copper required for this transition is only slightly above baseline and does not require major grid improvements.”

“This is not a perfect solution, but it is a much more resource realistic one,” they emphasized.

Read the full report here.



Friedland warns of copper ‘crisis’ as mine costs soar

Henry Lazenby - The Northern Miner | July 12, 2024 |

The closing panel at the Rule Symposium. From left: Rick Rule, James Rickards, Albert Lu, Nomi Prins, and Adrian Day. Credit: Henry Lazenby

Miners and analysts gathered this week in a sweaty beach city in southeast Florida to ponder why the industry gets the cold shoulder from most investors.


Copper in particular faces a forecasted supply chasm, mining mogul Robert Friedland told the Rule Symposium via a pre-recorded video interview from Telluride, Colorado.

“The world is suffering from a shortage of copper metal,” the founder and executive co-chair of Ivanhoe Mines (TSX: IVN) said. But copper prices “fall woefully short” of supporting the development of new projects. The current price is around $4.60 per lb.

“We see a crisis coming in physical markets and a requirement for much higher prices to enable most of the copper projects that are in development to have a prayer coming in.”

Humanity would have to mine more copper in the next 20 years than we have in human history to meet surging global demand on the back of the energy transition, Friedland told the conference, organized by resource speculator and founder of Rule Investment Media, Rick Rule.

Meanwhile, the cost of new mines has soared. Friedland said recent copper mine builds in Chile and Peru, jurisdictions once credited for having among the biggest and cheapest copper mines, have seen costs soar to about $45,000 per tonne of daily installed capacity due to inflation, steadily falling grades and dropping output.

While some analysts see near-term respite for soft copper prices, developers need a sustained price gain to make long-term investment decisions. Last week, BMO Capital Markets and Citigroup analysts said copper prices may rise past the $10,000-per-tonne ($4.54 per lb.) mark again in the near term due to a Chinese smelter supply shortage and grid investments in China. Copper posted a record high of $5.11 per lb. In May.

Copper price surpasses $10,000, expected to rise further, says Citigroup

The International Energy Agency projects that copper demand will increase to 36.4 million tonnes by 2040 from 25.9 million tonnes last year, driven by its growing application in clean technology and electric grid expansion. However, analysts have warned for years that copper prices aren’t high enough to support new builds. 

Friedland underlined the critical role of copper in the global economy, given its significance in electrification and renewable energy, and major new demand for modern warfare.

“The global economy needs to find five or six new Kamoa-Kakula-sized projects yearly to maintain a 3% gross domestic product growth rate over the next two decades,” Friedland estimated.

Ivanhoe is doing its part to address the copper deficit challenge with its world-class Kamoa-Kakula copper project in the Democratic Republic of Congo (DRC). The mine is ramping up, producing over 100,000 tonnes of the red metal in the June quarter. The company’s guidance for 2024 is 440,000-480,000 tonnes, with the outlook set to top 600,000 tonnes next year.
Contrarian approach

The current state of the copper market is a consequence of chronic historical underinvestment in production, compounded by increasingly scarce resources, the conference heard.

Symposium host Rule, noted that’s a repeated pattern in natural resources that will continue to lead to more boom-and-bust cycles.

Rule pointed to dramatic increases in commodity prices during the 1970s due to underinvestment: oil prices rose from $2.50 to $30 per barrel., gold from $35 to $850 per oz., and copper from $0.30 to $1.60 per pound.

Drawing parallels to the present, Rule pointed out that the US dollar lost 85% of its purchasing power in the 1970s, a situation he believes is re-emerging due to $6 trillion in quantitative easing in recent years and federal on and off-balance sheet debt of more than $100 trillion.

“Investing in underappreciated sectors presents an opportunity to invest in high-quality companies at a discount,” Rule said.

“The cure for high prices is high prices. The cure for low prices is low prices,” he said, repeating one of his favourite mantras.

Rule stressed the importance of being a contrarian investor, suggesting that attendees look for value in areas where others see risk or disinterest.

He pointed out that generally, the current sentiment around sub-$2 billion market cap mining companies is notably poor, presenting an opportunity to invest in high-quality companies at a discount.

“You can buy the serially successful companies at a small discount to the serial losers. That’s a really good deal if you think about it. The market has been completely undiscriminating with regards to the quality of leadership,” he said.
Commodities rally

The concentration in the US stock markets poses a big risk to economic stability as a small number of issuers are driving most gains, James Rickards of Paradigm said in the closing session at the conference. About 70% of the stocks in the S&P 500 are down for the year despite the index hitting new highs, driven by a handful of tech stocks.

Still, commodities have seen big gains this year, macroeconomist Nomi Prins of PrInsights Global said.

“Gold has rallied 24%, copper 27%, silver 49%, and uranium 60% — indicators of a massive transition regardless of economic ground realities,” she said.

Perhaps preaching to the converted, she noted natural resources have a critical role in future economic stability and growth. “These assets have a tremendously positive trajectory from here, driven by modern geopolitical and energy-related needs.”

CAPITALI$T XAO$

Indonesian onslaught wipes out Australia’s nickel industry

Kristie Batten | July 14, 2024 | 

BHP Leinster airport. Image: Kristie Batten

An influx of cheap nickel supply from Indonesia has all but killed off Western Australia’s long-running nickel sector.


Nickel prices halved in 2023, dipping below $16,000 per tonne in December as surpluses widened.

According to Benchmark Mineral Intelligence, Indonesia accounted for 49% of nickel production in 2023, up from less than 5% just eight years ago.

Nickel sector decimated

The impact on Australia’s nickel industry has been dramatic.

ASX 200 producer IGO paid A$1.1 billion ($744 million) for nickel miner Western Areas in mid-2022. Just 18 months later, the entire value of the acquisition had been written off and the Cosmos development project was suspended, resulting in the loss of 400 jobs.

Wyloo Resources, owned by Fortescue founder Andrew Forrest, paid A$760 million for Kambalda nickel producer Mincor Resources, and just seven months later, announced the suspension of operations.

A spokeswoman for Wyloo confirmed to MINING.COM that a joint feasibility study with IGO into a nickel sulphate plant had been paused.

In April, Canada’s First Quantum Minerals announced it would put its Ravensthorpe nickel laterite operation in WA’s southwest on care and maintenance.

The Savannah mine in WA and Avebury mine in Tasmania were also suspended after owners Panoramic Resources and Mallee Resources, respectively, collapsed.

BHP makes tough call

In February, BHP recorded a non-cash $3.5 billion impairment charge on its Nickel West division and reported negative EBITDA of $200 million, triggering a review into its future.

The worst was confirmed on Thursday when BHP announced it would “temporarily suspend” Nickel West – comprising the Kwinana nickel refinery, Kalgoorlie nickel smelter, Mt Keith and Leinster mines and West Musgrave development – from October.

The Kambalda concentrator, which relied on third-party ore, was suspended earlier this year.

More than 3,000 jobs will be lost though BHP will offer its 1,600 “frontline” employees the choice of redeployment or redundancy.

The decision will be reviewed by February 2027, and BHP has vowed to invest around $300 million per year to support a potential restart.

Once the suspension is complete, Australia will have just three operating nickel mines, IGO’s Nova and Forrestania and Glencore’s Murrin Murrin, though Forrestania and Nova are due to close within the next two years.

Prior to the decision, the Australian government’s Office of the Chief Economist was forecasting Australia’s nickel exports to decline from 161,000 tonnes in the 2023 financial to just 62,000 tonnes in the 2026 financial year.

Long history

Nickel was first discovered in the WA Goldfields in 1966, which led to the establishment of the town of Kambalda by Western Mining Corporation (WMC).

The Kambalda concentrator, Kalgoorlie smelter and Kwinana refinery were in operation by the end of that decade.

BHP acquired WMC in 2006 for $7.3 billion, and was initially extremely profitable, making more money than BHP’s world-class iron ore division in 2007, thanks to a surge in the nickel price to as much as $50,000/t.

The Global Financial Crisis reversed nickel’s fortunes and in 2014, the business was deemed as non-core and put up for sale.

Despite interest from Glencore, the sale was pulled after an acceptable price couldn’t be reached. The more than A$1 billion in closure liabilities and large capital spend required were said to be the sticking points.

Though it remained non-core, Nickel West was surprisingly left out of 2015’s demerger of South32. BHP was still keen to sell the division as recently as 2017 and it was slated for closure in 2019.

Electric era

The rise of electrification changed the outlook for Nickel West and BHP announced it would build a nickel sulphate plant in Kwinana, an industrial area south of Perth, the first and only facility of its kind in Australia.

With Tesla as its foundation customer, the plant produced its first crystals in late 2021.

BHP confirmed it had invested around $3 billion in Nickel West since the 2020 financial year.

Despite the hefty investment, Nickel West had been cashflow negative during that period and was expected to report an underlying EBITDA loss of roughly $300 million in the 12 months to June 30.

“Clearly, it’s not viable to continue operating under these significant and sustained losses,” BHP president Australia Geraldine Slattery told reporters.

The company will record an additional impairment of $300 million in its full-year results in August.

Political fallout

WA premier Roger Cook and federal resources minister Madeleine King both live near the Kwinana refinery and have been watching the review with interest.

At a conference in Perth in May, Cook urged BHP to reflect on the support of the WA government and community before considering “whether they’ll turn their back on WA in relation to the nickel industry”, while King criticized BHP for not investing more in the ageing facilities.

On Thursday, Cook described BHP’s decision as disappointing and pledged to support the workers impacted.

King acknowledged the nickel market conditions were beyond BHP’s control.

“I really am grateful that it’s a temporary suspension and not a more, I suppose, dead-end kind of closure, which would be even a worse situation,” she told local radio on Friday.

‘Devastating’

Kalgoorlie-Boulder, around 600 km inland from Perth, is the largest town in the WA Goldfields with a population of just under 30,000 people.

The City of Kalgoorlie-Boulder released a statement, describing the Nickel West news as “profoundly sad”.

“This decision is devastating, with significant impacts on the livelihoods of our residents and businesses, which will have far-reaching effects across the Goldfields,” it said.

Kambalda is about 60 km from Kalgoorlie and is home to around 2,500 people, while Leinster is a further 300km to the north. Wiluna, which supports the Mt Keith mine, is 585 km north of Kalgoorlie, on the edge of the Western Desert, and has a population of just 240.

Wiluna Shire president Peter Grundy said he was deeply concerned about the community impact.

“While this decision has been coming like a slow train across our red desert landscape, we are still shocked and disappointed by it,” he said.

“There is a knock-on effect with a decision like this – one that may get a small mention in a boardroom, but is as real as an oily, dusty, overdue invoice for some.”

BHP has established a A$20 million community fund though many estimate that won’t be enough.

Hope for Leinster?

Leinster, with a population of just 400 people, is run by BHP Nickel West.

Nickel West asset president Jessica Farrell said the company owned around 280 houses in the town and was hopeful they could be used for those workers supporting the care and maintenance process.

“We would continue to honour, obviously, the obligations of running that town,” she told reporters.

In a positive for the future of Leinster, the 200,000-ounce-per-annum Bellevue gold mine has recently opened and is already talking about expanding, while Liontown Resources’ A$1 billion Kathleen Valley lithium mine is due for firs production within weeks.

Customers and suppliers weigh impacts

Nickel West is also a supplier of sulphuric acid, which is produced as a smelter by-product.

Lynas Rare Earths has a contract with BHP for the supply of sulphuric acid to its Kalgoorlie rare earth facility until mid-2027. Lynas said BHP had affirmed its commitment to supply imported acid to the company.

The suspension of the nickel sulphate plant will impact battery customers including Tesla, Panasonic and Toyota.

IGO is the only remaining supplier of third-party ore to BHP. A spokesman for IGO said the company did not comment on contractual agreements but the closure would have no material impact.

Shares in junior Kambalda nickel explorer Lunnon Metals slumped by more than 12% on Friday to an all-time low. The company said it was considering alternative processing options to Nickel West, including the purchase or lease of the Kambalda concentrator or the development of a new facility.

The decision will also impact contractors and suppliers.

GR Engineering Services said the suspension of West Musgrave would impact its revenue by up to A$80 million in the 2025 financial year, while local airline Alliance Aviation Services, which operates 24 round-trip flights to Nickel West sites per week, reported an EBITDA impact of A$3-5 million per year over the next two financial years.

Other contractors and suppliers are likely to disclose impacts in the coming days.
The end of Australian nickel?

The nickel market is expected to remain in surplus until later this decade. Fastmarkets believes the market is oversupplied by up to 8% of demand.

Slattery said multiple options for Nickel West, including partial curtailment, were considered.

“Ultimately, this was less about the cost of running the business and more about the market outlook and anticipated extension of what is a structural low in the market,” she said.

BHP expects the market to remain in surplus for at least the next three years but was confident of an improvement beyond that timeframe.

“Now, of course, there’s uncertainty with that, but we’ve got sufficient conviction to maintain investment in the option of bringing the Nickel West business back into operation,” Slattery said.

The Nickel West suspension will narrow the nickel surplus but also cement Indonesia’s dominance.
Costly restart

If BHP decides to stick to nickel, it will have to go ‘all in’.

The West Musgrave nickel-copper project, acquired in last year’s A$9.6 billion takeover of OZ Minerals, has a large price tag of A$1.7 billion and is only partially built.

The concentrator, smelter and refinery are all nearly 60 years old and require investment.

In particular, the Kalgoorlie smelter requires a significant upgrade, one that is likely to cost upwards of A$500 million.

The restart will have to compete for capital with other large projects, including a potential new concentrator at the Escondida copper mine in Chile.

Even at full operations, nickel represents a tiny part of BHP’s business – around 1-2%.

(By Kristie Batten)

 

Six Shipping Industry Groups Come Out Swinging Calling for CII Reforms

Six trade groups representing all sectors of shipping jointly called for revision to the IMO's CII ranking system (file photo)

PUBLISHED JUL 10, 2024 12:41 PM BY THE MARITIME EXECUTIVE

 

 

Six of the major shipping industry trade groups representing everything from bulk cargo to containers, tankers, and passenger shipping, have joined together to highlight the shortcomings of the International Organization’s Carbon Intensity Indicator (CII).  While there has been broad talk of the issues within the structure of the CII which became effective on January 1, the six groups have joined together to highlight the perceived “inadequacies” of the program.

CII applies to ships of 5,000 gross tonnage and above and according to the IMO it was designed to aid ship owners and operators by determining “the annual reduction factor needed to ensure continuous improvement of a ship's operational carbon intensity.” Based on 2023 data, the first rating for each ship is being issued and many have warned that it could impact the economic livelihood of ships garnering the lowest rankings. Further, the program requires a ship rated D for three consecutive years, or E for one year, to submit a corrective action plan to show how it will achieve a C or higher rating.

“To achieve the IMO’s intent, the CII scheme must reflect the true efficiency rating for each ship.,” the policy statement by the six organizations declares. “A one-size-fits-all instrument, as the CII is currently designed, has inherent flaws that works against its intended purpose of supporting our collective objective of reducing GHG emissions across the maritime industry.”

The groups which include BIMCO, CLIA, Intercargo, InterManager, the International Chamber of Commerce, and Intertanko are calling on the IMO to amend the current CII system to avoid unintended consequences that are contradictory to reducing overall GHG emissions. At the same time, they are also calling for public administrations, flag states, ports, and destinations to acknowledge that the current CII system has inherent shortcomings recognized by the IMO and may not accurately reflect the true environmental performance of ships.

The IMO has acknowledged “significant concerns” raised about the program. Marine Environment Protection Committee (MEPC) in March 2024 noted that possibly inaccurate or misleading CII ratings could result in unintended adverse consequences for some ships, particularly for business-critical decisions made by the finance, insurance, chartering, brokering, and port sectors. Recognizing “shortcomings and unintended consequences of the CII mechanism,” MEPC said the issues should be addressed in the CII review, but under the IMO rules the review only must completed by 2026.

In calling for immediate actions to reform the CII system, the groups highlight that the IMO has already received 78 proposals submitted by every sector of shipping all calling for amendments to the CII. Representing the shipping industry, the six groups declared they will be part of the solution and will engage with the MEPC as the review commences in September. 

The groups are promising to propose revisions to the current CII methodology and formula that will provide a better indicator of a ship’s actual efficiency. In addition, they are also calling for those who are considering the CII rating as a potential for decision-making in the future to work closely with shipowners and flag administrators to determine whether the CII rating accurately reflects a ship’s environmental performance before making decisions.

 

South Korea’s HD Hyundai Qualifies to Compete for U.S. Navy Repair Work

HD Hyundai signed an agreement that permits it to compete for U.S. government vessel repair work (file photo)

PUBLISHED JUL 11, 2024 4:33 PM BY THE MARITIME EXECUTIVE

 

 

In a first of the Korean shipbuilding industry, HD Hyundai Heavy Industries, the intermediary company for three of South Korea’s largest shipyards, has secured the right to compete over the next five years for U.S. Nay maintenance, repair, and overhaul work. The agreement comes at a time when the U.S. Navy is facing a critical shortfall in shipbuilding and repair capabilities and follows a visit by U.S. Secretary of Navy Carols del Toro to South Korea earlier this year.

The company estimates the market is valued at $14.5 billion annually for both MSTS support ships and the Navy’s warships. The Koreans highlight it builds on their experience as the first domestic shipbuilding company to enter into the overseas maintenance business having established operations in the Philippines in 2022. The company also highlights that it has built warships for Korea and exported 18 vessels to the Philippines and elsewhere.

HD Hyundai Heavy Industries applied for the U.S. certification in May last year. The company underwent quality inspections in January as well as security inspections and a financial review before being certified. Today, they reported signing a Ship Maintenance Relations Agreement (MSRA) with the U.S. military authorities.

The MSRA program operated by the U.S. Naval Supply Systems Command involves private shipyards to provide maintenance and repair work mostly for the support ships deployed by the Military Sea Command (MSC) and U.S. Navy. Most of the work goes to U.S. private shipyards but the U.S. government has been strategically assigning work outside the country. India’s L&T (Larsen & Toubro) Kattupalli shipyard in Chennai, India performed its first project on a supply ship in 2022 with additional work in 2023. Three Indian shipyards were certified in April 2024.

Joo Won-ho, head of the Special Vessel Building Division of HD Hyundai called the agreement the company’s “full-scale entry” into the U.S. ship maintenance, repair, and overhaul market. Describing the scope of the work, HD Hyundai said it plans to use these projects to “build the trust of the U.S. military authorities.” It looks to expand its scope to newbuilding projects such as special purpose vessels and other government orders.

SECNAV del Toro visited Hyundai in Ulsan, South Korea in February and commended the level of work and technology available at the yard. He was quoted at the time as encouraging the South Koreans to enter the U.S. and possibly rehabilitate shipyards to expand the domestic capabilities and apply their technologies to the U.S. industry. Hyundai says they discussed ways of strengthening cooperation with the U.S. authorities. 

HD Hyundai made a first play into the U.S. market in April 2024 signing a MOU to work with the Philly Shipyard on government projects. This however was upended when Hanwha Ocean announced last month that it agreed to acquire Philly Shipyard.

 

CBP Recovers Over 1,300 Stolen Cars Being Smuggled Overseas from U.S. Ports

Baltimore CBP recovered three Mercedes being exported each valued at over $225,000 (CBP)

PUBLISHED JUL 12, 2024 6:22 PM BY THE MARITIME EXECUTIVE

 

 

U.S. Customs and Border Protection is reporting a strong increase in the recovery of stolen vehicles being smuggled out of U.S. ports often hidden in containers. Just over 1,300 stolen cars were recovered, a 6.5 percent increase, nationwide before they could be smuggled out of the country. 

The agency highlights that its officers are discovering stolen vehicles packed in shipping containers being exported from the United States. The agency says it has increased its rigorous import and export inspections with officers examining the export documentation and comparing a vehicle’s identification numbers against stolen vehicle reports.

The Baltimore Field Office which covers the Mid-Atlantic region recovered 343 stolen vehicles last fiscal year (Oct. 1, 2022 – Sept. 30, 2023). The office ranked second in the nation for vehicle recoveries. The estimated value of the vehicles is $17.7 million. 

The single most valuable vehicle retrieved was a Lamborghini Urus, valued at over $250,000. It was bound from Norfolk, Virginia to Togo in West Africa. At least three Mercedes-Benz G63 AMG sedans were also retrieved before they could depart Baltimore for Togo or in one case Benin. Each of the cars was valued at over $225,000 while an Aston Martin DBX valued at $175,000 was stopped before it could depart Norfolk also for Togo.

The Baltimore office reports that 90 percent of the stolen vehicles it was able to recover, a total of 310, were destined for West Africa.

“The international trade in stolen vehicles is just one of many revenue streams for transnational criminal organizations, so Customs and Border Protection officers will continue to strike back by recovering these vehicles and reuniting them with their lawful owners,” said Matthew Davies, Acting Director of CBP’s Baltimore Field Office. “Auto theft remains a rising concern in the United States. CBP remains committed to working with our federal, state, and local partners to hold these exporters accountable.”

The strongest increase was in the port area of Norfolk and Newport News in Virginia where CBP recovered 18 stolen vehicles an increase of 158 percent versus the prior year. The cars were valued at over $10 million. Norfolk ranked second national among the ports of entry.

There was a slight decrease in the number of stolen vehicles stopped at the Port of Baltimore last year. While the port ranked third nationally, CBP said eight fewer cars were discovered. They stopped a total of 141 stolen vehicles valued at over $7.3 million.

The criminals are also attempting to export the vehicles through smaller ports. The ports of Philadelphia and the Port of Wilmington, Delaware, collectively recovered 22 stolen vehicles.

The stolen cars run the gamut from subcompacts to full-sized sports utility vehicles. CBP reports that 73 percent of those stopped were SUVs. Land Rover’s Range Rover took the top spot again last year followed by the Toyota Highlander. They also stopped BMWs, Toyotas, and Infinity models. 

CBP reports they even recovered a 1991 Toyota pickup valued at just $2,150 being exported from Wilmington to Honduras. They only recovered one electric vehicle (Hyundai IONIQ5) but also recovered four stolen motorcycles and even a 2014 John Deere Combine that thieves were trying to send from Baltimore to Argentina.

Two individuals were sentenced in June in the District Court in Maryland. Both had been arrested for shipping stolen vehicles to West Africa. 

The seizures are part of the wider efforts by CBP officers which are also searching for narcotics, firearms, counterfeit consumer goods, and other contraband that violate U.S. export laws. 

 

California Invests $27 Million in Port Data System Development

California is investing in a new port data system (file photo)

PUBLISHED JUL 14, 2024 12:18 PM BY THE MARITIME EXECUTIVE

 

 

The California Governor’s Office of Business and Economic Development (GO-Biz) today announced the award of $27 million to support data system development and interoperability across California’s five containerized ports, the first-ever state-level funding in the country focused on improving data functionality across a statewide network of ports.

As the nation’s premier gateway for international trade, California and its ports are essential to the smooth functioning of the global economy. The state’s containerized ports, which include the Ports of Los Angeles, Long Beach, Oakland, San Diego, and Hueneme, handle a staggering 40% of all U.S. containerized imports, supporting millions of jobs and generating billions in economic activity.

“California’s ports are critical to the stability of our national and global supply chains, as well as the health of our worldwide economy,” said GO-Biz Director and Senior Advisor to Governor Gavin Newsom, Dee Dee Myers. “These historic, first-of-their-kind awards will allow us to use data to improve the functionality of our supply chain, and we look forward to working with our ports to further the momentum that these projects will generate across the state.”

The awards will fund ten innovative projects across the five ports that address key challenges in port operations and foster long-term statewide freight resilience. These projects encompass a wide range of solutions including optimization of cargo-routing, deployment of cutting-edge technologies such as artificial intelligence, implementation of climate resiliency and emissions reductions measures, adoption of trucking appointment systems, and the development of new data standards for cargo.

“This milestone marks significant progress in the Governor’s vision to improve California’s supply chain, powering us into a more equitable and economically prosperous future,” said California Transportation Secretary Toks Omishakin. “Through this critical funding and strong collaboration between California’s ports, key operators will now have essential data to help move goods using a more efficient, reliable and resilient transportation network. Together with our recent Port and Freight Infrastructure Program investments, these groundbreaking awards will help leverage innovation and new approaches, continuing to advance CalSTA’s Core Four priorities of economic prosperity, equity, climate action and safety.”

 The grant program and awards also mark a significant milestone in the Governor and Legislature’s historic investment in supply chain and goods movement, aimed at building long-term resilience in the wake of global supply chain challenges just years ago.

“As Chair of the Select Committee on Ports and Goods Movement, I am happy to see all of California’s containerized ports continue to modernize their infrastructure and benefit from this $27 million for data system development,” said Assemblymember Mike A. Gipson (D-Carson). “I am dedicated to ensuring a continued, collective partnership between the Legislature, State, and ports. Ports are a vital part of California’s economy, and I will work to ensure that California is doing everything to support our ports.”

The funds follow the signing of a first-of-its-kind Memorandum of Understanding (MOU) last spring that formed the California Port Data Partnership between the five ports. Both the MOU and the awards are expected to yield significant economic, environmental, and transportation benefits for the State.

What the Ports Are Saying

“This unprecedented level of funding is crucial for California’s containerized ports as it will enhance the sharing of supply chain data to improve information flow. With the state’s investment, the Port of Hueneme will support collaborative efforts to bridge data gaps in the regional, state, and national supply chain. The funding will also accelerate the Port’s data strategy enhancing commercial, operational, and financial data sharing systems. We appreciate the State’s commitment to resiliency and its significant investment in goods movement.” – Port of Hueneme CEO & Port Director Kristin Decas

“With six marine terminals at the Port of Long Beach now connecting to a beta version of the Supply Chain Information Highway, we’ve entered a crucial phase of development. We are grateful to the State of California and GO-Biz for their continued leadership in supporting data modernization to bolster goods movement. This funding will be important as we roll out these new enhancements to increase cargo velocity and tighten coordination across modes of transportation.” – Port of Long Beach CEO Mario Cordero

“California is the first state to step up with policy and funding to enhance supply chain digitalization. This GO-Biz funding will help the Port of Los Angeles accelerate our proven technology, the Port Optimizer, to further improve efficiency, lower impacts on our communities and make us more competitive.” –  Port of Los Angeles Executive Director Gene Seroka

“The California Port Data Partnership is a monumental and strategic achievement. This grant allows the Port of Oakland to further expand its current data environment, as well as improve the trucker appointment system in Oakland to allow for a more seamless user experience. These enhancements are critical in improving overall supply chain visibility, efficiency and planning at the local, state and national levels.” – Port of Oakland Maritime Director Bryan Brandes

“We are grateful to the Governor’s Office for prioritizing data partnerships among California’s ports. We are eager to upgrade our technology and create an interoperable system where we can share information and collaborate to further improve our maritime operations, increase cargo throughput, and enhance customer service, as we promised our constituents. Together, we’re modernizing our seaports to strengthen the supply chain and to be greener and cleaner overall.” – Port of San Diego Board of Port Commissioners Chairman Frank Urtasun

The products and services herein described in this press release are not endorsed by The Maritime Executive.

Adani Invests in New Greenfield Port in Da Nang

Waterfront at Da Nang (Thang Nguyen / CC BY SA 3.0)

PUBLISHED JUL 14, 2024 10:48 PM BY THE MARITIME EXECUTIVE

 

 

India’s Adani Ports and Special Economic Ltd (APSEZ) has reportedly secured a deal to build an important new greenfield port in Da Nang, Vietnam. Located along the central coast of Vietnam, the Lien Chieu port is expected to become a major maritime gateway, helping to ease cargo handling for the overloaded Tien Sa port. It will also boost hinterland connectivity to Thailand, Laos and Myanmar.

In an interview with Bloomberg, Karan Adani, the managing Director of APSEZ, said that the company had secured an “in-principle approval” from the Vietnamese government for the development of Lien Chieu Port. Although the construction of the port was launched back in 2022, the project has been facing significant delays due to absence of an investor.

“We are targeting countries that are high on manufacturing or high on population, which will lead to high consumption. We are focusing on export volumes in these countries,” added Karan.

Lien Chieu becomes the fourth asset in Adani’s rapidly growing international terminals portfolio. Recently, the company has won stakes in Israel’s Haifa port, Colombo in Sri Lanka and the Port of Dar es Salaam in Tanzania.

The development of the port comprises two components. The first includes building of the shared infrastructure such as the breakwaters, shipping channels and access roads. This is supported by public funds to the tune of approximately $140 million.

The second component involves development of the wharf area, which the government has been trying to get an investor to support. The goal is to build out eight container berths and six general cargo berths, as well as supporting facilities, all estimated at a cost of $1.9 billion.  

With the selection of Adani Ports, the construction of the first phase is expected to begin soon. It includes building of two 750m berths for containerships with a capacity for 8,000 TEUs and above. Work has also begun on construction of a 6-lane two-mile coastal road connecting the national road system and the Lien Chieu port.