British Columbia gov’t orders Artemis to remove camp near Blackwater project

Staff Writer | August 26, 2024 | 

Blackwater project construction camp area. Credit: Artemis Gold Inc.

The British Columbia government has directed Artemis Gold (TSXV: ARTG) to remove a construction worker camp near its Blackwater project by the end of August for breaking environmental guidelines.


Early this month, the BC Environmental Assessment Office issued an enforcement order to remove the camp after an on-site inspection in May found part of it was on a hydro transmission corridor in violation of the company’s permit.

The company said it was having no problems complying with the order after spending C$200,000 on cleaning up the site it had occupied with the permission of the separate Ministry of Energy Mines and Low Carbon Innovation. Known as the Chu site, it dated proved a previous owner, Artemis said in an emailed statement.

“We saw an opportunity to assist the provincial government with clean up of the Chu camp site, while also ensuring our transmission line workforce was close to their job sites,” an Artemis spokesperson said. “We agreed to remediate the existing site, which contained old buildings and infrastructure.”

Artemis was initially given a deadline of Aug. 7 to close the infringing camp, but it was extended when BC wildfire-fighting contractors used it.
First gold

The proposed open-pit gold and silver mine about 600 km north of Vancouver was nearly 90% complete at the end of June, according to the company. A first gold pour is planned for the fourth quarter. Blackwater aims to mill 60,000 tonnes a day over at least 17 years.

Artemis said its workers had already left the Chu site and striking the campy wouldn’t affect Blackwater’s construction schedule or materially impact costs.

The Blackwater environmental certificate allows for a main construction camp of up to 1,000 workers and an operations camp housing up to 500 people. Both facilities must be located entirely within the project site.

Inspection records showed the camp had at least 48 accommodation units, three generators and potable water storage on the corridor outside the Blackwater site.

Also, the camp site wasn’t part of the construction plans, and therefore not contemplated in the project’s environmental assessment.

Shares in Artemis Gold fell 2.2% on Tuesday afternoon in Toronto to C$12.62 apiece, valuing the company at C$2.8 billion. They’ve traded in a 52-week range of C$4.98 to C$13.48.

Scramble for critical minerals spurs an African rail revival

Bloomberg News | August 24, 2024 |

Lobito railway runs from Lobito port, on Angola’s Atlantic coast, to the DRC and Zambia. Credit: Ministry of Transport, Angola

Southern Africa’s railways are suddenly getting global attention and attracting billions of dollars in investment, with a race to secure copper supplies needed for the energy transition at its center.


From Angola on the continent’s west coast to Tanzanian on the east, governments and investors are readying to revive decades-old rail lines that have fallen into disrepair and build new ones. Much of the new demand for freight comes from the central African copperbelt that Zambia and Democratic Republic of Congo share.

“We’re at a turning point — it’s very historic,” Babe Botana, executive director at the Southern African Railways Association, said in an interview. “The rest of the world is developing interest to come and revitalize the railway industry.”

Already, truck logjams clog routes out of Congo, which last year overtook Peru as the world’s second-biggest source of copper used in electric vehicles and data centers that power the artificial intelligence boom. Zambia has ambitious plans to catch up with its northern neighbor. From the US and European Union to China, there’s a growing realization that rail must play a central and strategic role in allowing exports to flow.

The surge in interest was plain to see at the Southern African Railways Association’s annual conference in Johannesburg this week. Attendance was up by about 50% from last year, with many first-time delegates from around the world, according to the organizers.

During the week, a rail route from Congo to an Angolan port that the US is backing with $553 million in development finance loaded its first copper shipment bound for Baltimore. Amos Hochstein, a senior adviser to President Joe Biden who has led the US efforts to develop the so-called Lobito corridor, called the event a BFD — short for big deal, with an expletive.

The Zambian government hopes to sign a deal with China next month that will see a $1 billion refurbishment of a line connecting its copper mines with the Tanzanian port of Dar es Salaam. In South Africa, which has the continent’s biggest rail network, state-owned logistics operator Transnet SOC Ltd. last month got a $1 billion loan from the African Development Bank to help boost its rail-recovery plans.

Years of neglect and a lack of funding have left many of southern Africa’s rail lines limping along despite growing demand for trade routes for critical materials used to produce electric vehicles.

That’s brought a $10 billion backlog for maintenance and track refurbishment regionally, said Johny Smith, head of rail at South Africa-based logistics company Grindrod Ltd.. He estimates as little as 7% of cargo travels by rail in the region.

Yet securing investment to revive old lines and build new ones hasn’t been easy. Many projects have been “stagnant for decades,” according to Xoliswa Njokweni-Mlotywa, acting chief executive officer at Thelo Infrastructure Development in Johannesburg.

Development financiers need to help prepare projects to make them attractive, and someone needs to pull the various funding sources together to reduce risk and ensure projects are viable, she said in an interview.

“The private sector will not invest in projects without knowing that they will get a return,” Njokweni-Mlotywa said.

(By Matthew Hill)

Congo wants Trafigura partner Chemaf’s deal with Norinco halted

Reuters | August 26, 2024 | 

(Image courtesy of Chemaf)

The government of the Democratic Republic of Congo is opposed to a proposal by Chemaf SA to sell its copper and cobalt mines in the country to China’s Norin Mining, according to a document seen by Reuters.


Chemaf, a long-time partner of commodities trader Trafigura, said in June it had agreed to sell its mines in Congo to the unit of Chinese state-backed defence and industrial giant, China North Industries Corp (Norinco).

Chemaf put itself up for sale last year due to a cash crunch that was stalling the expansion of its Etoile and Mutoshi projects in Congo as cobalt prices slumped.

Kizito Pakabomba, Congo’s mines minister, said the deal is in breach of state miner Gecamines’ lease agreements with Chemaf and recommended that the transaction be stopped, according to the minutes of a council of ministers’ meeting on Friday seen by Reuters.

The council of ministers adopted the ministry of mines’ recommendation that the transaction be halted.

“Considering the flagrant violation of the clauses of the farm-out contract between Gecamines and Chemaf, it was recommended that the current transaction be halted following Gecamines’ opposition,” the minutes said.

A Chemaf spokesperson said the company would continue to work with authorities in Congo to progress the signed transaction.

Gecamines said last month that it owns mineral rights to the Chemaf mines and was also opposed to the deal with Norin.

China’s miners, most of which are state-backed, have become the biggest investors in Congo as the world’s second-largest economy aggressively pursues copper and cobalt supplies for its rapidly expanding electric vehicle industry.

Norinco already owns the Comica and Lamikal copper and cobalt operations in Congo, the world’s No. 1 cobalt supplier.

(By Sonia Rolley and Felix Njini; Editing by Kirsten Donovan)

Nornickel examining impact of latest US sanctions

Reuters | August 26, 2024 | 

Image courtesy of Nornickel

Russian mining giant Nornickel said on Monday it was examining the implications of new US sanctions on its subsidiaries, which are not involved in the company’s production and sales.


On Aug. 23, the United States imposed sanctions on several Nornickel subsidiaries as well as on the Bystrinsky copper and gold project, which Nornickel controls.

These companies were listed among 400 entities and individuals “whose products and services enable Russia to sustain its war effort and evade sanctions,” according to the US Treasury Department.

“The group’s production and sales companies (PJSC MMC Norilsk Nickel, its Polar Division and subsidiaries, Kola MMC and its subsidiaries) were not included in the US sanctions list dated August 23, 2024,” the company said in a statement.

“A number of the group’s service companies were included in the sanctions list. The company’s management is assessing the impact of the imposed sanctions,” it added.

Nornickel, the world’s largest producer of palladium and a major producer of high-grade nickel, is not subject to direct Western sanctions.

However, sanctions against Moscow prompted some Western producers to avoid buying Russian metal and complicated payments, prompting Nornickel to redirect sales to Asia and to try to transfer some final stages of its production out of the country.

In its statement, the company did not mention the sanctions against the Bystrinsky plant, in which Nornickel indirectly owns 50.01%.

According to the latest available data at the end of 2023, Bystrinsky’s other shareholders included Nornickel’s major shareholder Interros Holding with 36.66% and a subsidiary of a Chinese private equity firm Hopu with another 13.33%.

The remote project, located in Russia’s Far East, includes gold, copper and iron ore deposits as well as a processing plant. The products are mainly supplied to China.

(By Anastasia Lyrchikova; Editing by Gleb Bryanski and Mark Potter)

 GREENWASHING 

Goldman Sachs analysis sheds light on rise of commodities in ESG

Bloomberg News | August 27, 2024 |

Coal mining in an open pit. Stock image.

The days of equating ESG with the blacklisting of commodities are over, it seems.


In a fresh study, analysts at Goldman Sachs Group Inc. have found that fund managers are increasingly including oil, gas and mining stocks in portfolios that are registered as ESG.

The development coincides with a regulatory rethink of how to frame environmental, social and governance strategies, opening the door for ESG investors to hold assets that might be green one day, even if they aren’t yet. It also follows protracted attacks by the US Republican Party, which has repeatedly accused the ESG industry of blacklisting fossil fuels.

Goldman’s research looked at funds registered under the European Union’s Sustainable Finance Disclosure Regulation, which is the world’s biggest ESG investing rulebook. SFDR has two sustainable fund categories: Article 8 (the broadest) and Article 9 (the strictest). The analysis found that fund managers are generally more exposed to oil, gas and mining stocks now than they were 12 months ago.

Among Article 8 funds, a category that Bloomberg Intelligence estimates covers more than $7 trillion of assets, 51% now hold at least one oil and gas company, up from 47% a year ago, Goldman’s analysis found. When it comes to metals and mining, 46% of Article 8 funds hold at least one company in the industry, while the equivalent figure for Article 9 managers is 32%, the analysis shows. That’s up about 5% to 6% from a year ago, Goldman found.

Though ESG funds continue to be overall underweight commodities, “we see more willingness to own metals and mining companies,” Goldman analysts including Evan Tylenda and Grace Chen wrote in the report, which was published this week. And there’s evidence that ESG fund ownership of oil and gas stocks has “increased slightly,” they said.

SFDR is currently in the middle of a major overhaul following a lengthy consultation period. The revamped version is expected to make greater allowance for transition investing, meaning fund managers will be able to hold formerly controversial assets provided they can show their ownership is helping improve a holding’s ESG profile.

Changes in the ESG regulatory backdrop in Europe “will spark the advent of improved mainstreaming of transition/improver funds as credible sustainability strategies, which could drive flows towards companies traditionally excluded,” the Goldman analysts said.

The findings follow signs of a wider retreat from ESG in recent years, amid lackluster returns and mixed evidence of any positive environmental or social impact.

In the first half of 2024, Article 8 and 9 funds had a combined $17 billion of outflows, compared with $68 billion of inflows for non-sustainable equity funds (a category known as Article 6 within SFDR), the Goldman analysis found. The picture is different in the bond market, however, with sustainable fixed-income funds generating $115 billion of inflows, compared with $75 billion for non-sustainable funds, the analysts said.

What’s more, there are signs of improvement in recent months, with Article 8 and 9 funds seeing “modest net inflows” in both May and June, they said.

And despite net outflows during 2024, assets under management in Article 8 and 9 funds are close to “all-time highs,” the analysts said.

(By Lisa Pham)

Drilling marks the path for a mine reboot in Red Lake

West Red Lake Gold Mines taking the patient approach before resuming production at the Madsen Mine

Ian Ross | Northern Ontario Business

Madsen Mine, outside the Town of Red Lake 

West Red Lake Gold Mines image

West Red Lake Gold Mines president-CEO Shane Williams was very guarded in talking about the blue-sky gold potential of the company’s Madsen Mine property in northwestern Ontario .

The Vancouver company is not rushing the dormant underground mine back into production but is taking a patient approach in its reboot of an operation that entered creditor protection in the fall of 2022 under the Pure Gold Mining banner.

“Given the history of it, it’s very important to get what we have right,” said Williams, in a recent online interview with CRUX Investor.

“We’re not talking about scaling up,” Williams said, even though there’s plenty of gold to be tapped into on the company’s property.

With three drills turning and 150 people on site, Williams said by the time planning is finished for Madsen’s relaunch, a year-and-half’s worth of drilling data will be in the library to guide their approach to mining the deposit.

West Red Lake acquired Madsen in a CCAA sales process in June 2023 and began drilling there in October of that year.

The historic 47-square-kilometre mining property, located just southwest of the Town of Red Lake, contains a 2 million-ounce gold resource at 1.7 million ounces indicated and 300,000 ounces inferred, averaging 7 grams per tonne. The company also inherited a solid base of mining infrastructure, including a 1,200-metre shaft, a key to mining deep deposits.

While some mining analysts though Madsen was a turn-key operation, Williams said the company felt it was important to step back and reduce the risks for the restart

That began with infill drilling of the existing deposit. More than 50,000 metres has been done to date with another 50,000 metres to go.

This is not exploration drilling to grow the gold resource, Williams said, but is high definition drilling to better understand the intricacies of the ore body. Infill drilling creates more certainty in the company’s approach of how to best mine it.

About 1,500 metres of underground development at Madsen has been done to carve out stations to conduct definition drilling at “six to seven-metre spacings.” said Williams.

Because of the tricky nature of Red Lake gold systems, Williams said it’s easy to “lose control of the ore body.”

"The geology of Red Lake is complex,” Williams said, with deep “high grade veins that pinch and swell.”

That was the problem with Pure Gold, he said. The company hadn’t performed enough deep, definition drilling to understand how the ore body moved.

These types of ore bodies does not lend itself to huge underground stopes and big bulk tonnes, Williams said, it’s about chasing narrow veins.

Not spending the money on drilling can get one in trouble, he said.

Since acquisition, West Red Lake has raised $100 million, part of that allocated to the drill program. He estimates they’ll need another $50 million to $70 million to put Madsen back into production. That could come in the form of a royalty offering, a streaming deal or some other financing alternatives.

“It’s a lot of money to drill but it pays for itself in spades later on as we go into mine,” said Williams.

The company said in June its aim was to restart Madsen in the second half of 2025.

Once operating, Williams suspects Madsen will not be a large operation, producing around 60,000 to 70,000 ounces of gold a year, in staying with their existing processing mill capacity of 800 tonnes per day.

“Not a huge project, but for us it’s more important to get that running, set a base and then talk about growing.”

Copper supply risks ease as Chile miners do deals

Bloomberg News | August 26, 2024 | 

Workers at El Teniente. Image: Codelco

Chile’s copper-mining industry is emerging from an intense period of wage negotiations, signaling a diminished risk of further disruptions in a country that accounts for a quarter of supply.


Over the weekend, about 300 striking workers at a Lundin Mining Corp.-operated mine went back to work. A week earlier, the main union at the giant Escondida mine run by BHP Group ratified a labor pact following a three-day stoppage. Antofagasta Plc reached an early wage deal with the main union at its Centinela facility, completing the firm’s talks for the year.

To be sure, there are several contracts still pending — including at Codelco’s sprawling El Teniente mine — totaling about 752,000 metric tons of supply, according to data compiled by BTG Pactual. But that’s down from the 3.35 million tons at risk at the start of the year.

“Supply risk derived from strike action is receding as most 36-month collective labor agreements have been fulfilled,” BTG Pactual analyst Cesar Perez-Novoa said in a written response.

Companies are having to spend more to get contracts signed, although the pullback in copper prices from a record-high in May probably has helped convince workers to lock in deals. For the market, waning strike risk in Chile will help ease concerns over tightness in the supply of concentrate — the raw material used to feed smelters.

(By James Attwood)

First Quantum seeks damages for copper trapped at Panama mine

Bloomberg News | August 27, 2024 | 

Copper shipments from Cobre Panama mine. (Image courtesy of Cobre Panama.)

First Quantum Minerals Ltd. is seeking compensation from Panama for a stockpile of semi-processed copper ore stranded at the company’s flagship mine as part of wider arbitration over the shuttered operations.


The material, worth between $225 million and $340 million at current copper prices, has sat idle for months at the giant mine while the Panamanian government determines whether the metal was mined before or after Cobre Panama was ordered to close last year. The Canadian mining company has warned that the matter must be resolved urgently since the stockpile can degrade in value and poses an environmental risk when left idle.

First Quantum argues that Panama must either let the 120,000 metric tons of the material leave the site or compensate the company based on the metal’s market value, according to people familiar with the matter. The claim is part of First Quantum’s two ongoing arbitration cases against Panama over shutting the $10 billion mine, said the people, who asked not to be named discussing confidential matters.

Compensation for the copper cache would be a welcome boost for First Quantum’s balance sheet after Panama ordered the closure of its mine last November following fierce public protests. The company is seeking at least $20 billion from Panama in two arbitration cases — one through the International Chamber of Commerce and another through the Canada-Panama Free Trade Agreement — filed after Cobre Panama’s closure.

Panama’s Commerce and Industry Ministry didn’t immediately provide a response to requests for comment. First Quantum declined to comment.

The Vancouver-based company had expected to be able to ship the copper material earlier this year. It’s now arguing it is entitled to damages to compensate for the time that the material has been barred from shipment, said one person familiar with the matter.

The ICC’s International Court of Arbitration case is the most advanced of the two proceedings with a final hearing scheduled for September 2025, First Quantum said in its July 24 earnings call with investors.

Canadian mining royalty firm Franco-Nevada Corp. and German equipment manufacturer Liebherr-International AG have also both said they’re pursuing separate arbitration claims related to Cobre Panama’s closure.

(By Jacob Lorinc and Valentine Hilaire)

 

German Chancellor Visits Meyer Werft Signaling Support for Bailout

Scholz spoke with shipyard employees and media promising government support for the shipbuilder (Meyer Werft)

Published Aug 22, 2024 2:10 PM by The Maritime Executive

 

 

Financially troubled German shipyard Meyer Werft received assurances of a government-supported bailout during a town hall meeting for employees with German Chancellor Olaf Scholz and Lower Saxony’s Minister President Stephan Weil. While cautioning that the deal is not yet done, the government officials emphasized the importance of the jobs and their commitment to the company and its employees.

“The way has now been paved for the start of the restructuring and securing the future of the shipyard,” CEO Bernd Elkens and restructuring expert Ralf Schmitz told employees after meeting with the chancellor and local government officials. They said they would be following the roadmap from Deloitte’s recently presented restructuring report and would be clarifying details of the agreement with the commercial banks.

Government officials however emphasized that the final deal also requires the support of the budget committee of the Bundestag (the German federal parliament) as well as the Lower Saxony state parliament. The deal must also be structured in a form that will be approved by the European Union.

Meyer Werft’s problems are not a shortage of orders, but a financial shortfall and inability to finance future constructions. The company has 10 large cruise ship orders, including five new orders for Disney and its Japanese affiliate as well as two recent orders for Carnival Cruise Line, as well as work on a research vessel and four offshore converter platforms for the offshore wind energy industry. Media reports are saying the company booked approximately $12.3 billion in recent orders due for delivery till 2029.

The cruise lines reportedly pay 20 percent of the cost of the contract upfront and make the bulk of the payments when the ships are delivered several years later. The company took a loss on some of its recent projects due to increased labor and material costs after the pandemic and due to the war in Ukraine. Banks have been unwilling to finance the new construction without loan guarantees and are also calling for increased capital to help offset the recent financial losses.

 

Schulz told employees he understood the pressures created by the financial uncertainties while saying the government stands with the shipyard (Meyer Werft)

 

Meyer Werft in Papenburg is a major employer with Scholz emphasizing the critical importance of the maritime industry to Germany. He called the shipbuilder the “crown jewel,” for Germany in the industry. Around 3,300 people currently work at the Papenburg yard with Meyer employing as many as 7,000 with its other shipyards in Rostock (Meyer Neptun) and Finland (Meyer Turku). As many as 18,000 jobs are also associated with the yard from suppliers and contractors.

The terms remain to be set but Meyer is reportedly looking for as much as $2.5 billion in loan guarantees to finance the construction projects. In addition, the banks are reportedly demanding as much as approximately $450 million in new equity. German media is reporting the proposed terms call for the federal government and the Lower Saxony state to each provide approximately $1 billion in loan guarantees as well as making the capital infusion. In exchange, the government would receive a majority ownership stake possibly as high as 80 to 90 percent of the Meyer.

Members of the federal parliament are already saying the deal must be structured with a clear exit path for the government as well as a timeline. Some reports suggest the guarantees would only carry the company to 2027 but give the Meyer family the first option to reacquire the company. Commentators point out that a similar deal was created during the pandemic for Lufthansa and the government made a profit selling the shares. 

Meyer has previously said it faces a mid-September deadline to resolve its current financial crisis. In July, it reached terms with the unions to establish a works council and supervisory board, the standard structure for German companies. Meyer Werft had moved its corporate headquarters to Luxemburg but agreed to bring them back to Germany. In exchange, the unions agreed to a plan to reduce headcount by 300 employees first through voluntary efforts or in 2025 through layoffs.

Meyer remains one of the leading shipyards in the world for building large cruise ships and the pioneer in LNG-fueled cruise ships. For the mega-ships only Fincantieri and Chantiers de l’Atlantique have been traditional competitors but China is also working to enter the market after having built its first domestic cruise ship and currently enhancing processes as it builds its second cruise ship. 

 

Global Offshore Wind Capacity to Top 500 GW by 2040

Pixabay

Published Aug 25, 2024 5:11 PM by The Maritime Executive

 

 

Despite 2023 being a turbulent year for the offshore wind industry, recent estimates by the energy research firm Rystad show that new capacity additions will grow by nine percent to over 11 GW by the end of this year. Rystad projects that the growth of the global offshore wind sector will continue at a steady pace, with installations (excluding the People’s Republic of China) expected to exceed 520 GW by 2040.

Europe will play a critical role in this growth, relying heavily on floating wind. By 2040, the continent is projected to account for more than 70 percent of global floating wind installations. As a result, floating wind capacity in Europe is expected to approach 90 GW by 2040. The UK, Portugal and France will be at the forefront of this development.

Asia will also play a key role in advancing floating wind as a mature technology. The region, excluding mainland China, will capture a share of 20 percent of global installations by 2040, reaching a capacity of 17 GW.

However, the floating wind sector is facing short-term supply chain constraints, similar to the bottom-fixed segment. These challenges are likely to hinder development of floating wind technology, with capacity estimates of less than 7 GW by 2030. Looking ahead, most of the growth is anticipated to happen between 2030 and 2035. During this period, Europe is expected to add 20 GW of floating wind, while Asia, excluding mainland China, will add up to 5GW.

“Supply chain bottlenecks present significant challenges to the industry’s further expansion. While ambitious targets boost investor confidence, it is crucial to address logistical issues to ensure that offshore wind can successfully take a key role in the energy transition,” said Petra Manuel, Senior Offshore Wind Analyst, Rystad Energy.

Meanwhile, in the bottom-fixed market, the UK, Germany and the Netherlands will emerge as the three dominant players. This is because of their proximity to the North Sea and extensive maritime areas, which provide a strong foundation for large-scale installations. The three countries are projected to account for a total of 150 GW of installed capacity by 2040. The U.S will follow with less than 40 GW, contingent on its political landscape.

But between 2025 and 2030, the Americas - led by the U.S. - will experience significant growth, beginning with close to 2 GW of installed capacity in 2025.