It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Sunday, September 19, 2021
BHP inks supply deals for Jansen potash output
Cecilia Jamasmie | September 15, 2021 | Jansen is slated to produce 4.4 million tonnes of potash annually in its first phase, or nearly 8% of the world’s total. (Image: BHP’s presentation. )
BHP (ASX, NYSE, LON: BHP) said on Wednesday it had secured non-binding deals with major importers to for up to 100% of future production from its Jansen potash project in Canada’s Saskatchewan province.
The world’s largest mining company, which approved up to $5.7 billion investment in August to bring Jansen into production, said in a presentation that its expanded marketing team will have more than five years to build relationships and secure binding sales.
The strategy aims to “replicate tried and tested model of marketing directly to major customers via regional offices leveraging BHP’s broader commercial resources,” the company said.
BHP SAID ITS TEAM WOULD HAVE ABOUT FIVE YEARS TO BUILD RELATIONSHIPS WITH BUYERS AND TO SECURE BINDING SALES BEFORE FIRST PRODUCTION
BHP said markets for Jansen’s potash could include the US, Brazil, India, and China. Potash is seen by farmers as an attractive resource because of its use as fertilizer, which also boosts drought tolerance and improves crop quality.
The mining giant expects potash demand to increase by 15 million tonnes to roughly 105 million tonnes by 2040 or 1.5% to 3% a year, along with the global population and pressure to improve farming yields given limited land supply.
BHP has tried to tap into the fertilizers market for some time. In 2010, it unsuccessfully bid $38.6 billion for Potash Corp. of Saskatchewan, which in 2018 merged with Agrium Inc. to form Nutrien (TSE, NYSE: NTR).
The Canadian potash producer has been an open critic of the Jansen project for years, as it believes developing it would cause an unwelcome oversupply. The company’s tone has slightly changed since Mayo Schmidt took the helm of the company earlier this year, replacing Chuck Magro.
The Saskatoon-based miner said in May the market could absorb Jansen’s output if produced in a “disciplined” way.
Located 140km east of Saskatoon, the project is expected to give BHP exposure to a market driven by rising global food demand and represents one of its few major growth prospects.
Jansen is slated to produce 4.4 million tonnes of potash annually in its first phase, or nearly 8% of the world’s total. It will have capacity for an additional 12 million tonnes thereafter, for a life of 100 years.
BHP’s net-zero targets don’t include its steelmaking customers
BHP Group said it will target net-zero greenhouse gas emissions from its direct suppliers and the shipment of its products by 2050, but stopped short of extending it to steelmaking customers due to what it describes as the technical challenges facing the industry.
The Melbourne-based company’s Scope 3 emissions — which include procurement and shipping as well as end-user emissions — were 402.5 million tons of carbon dioxide-equivalent in the year ended June 30, BHP said in a climate plan announced Tuesday. That’s more than the total emissions of the U.K. and account for 96% of its overall emissions.
While steel is an important component in many of the products driving the decarbonization process, its production accounts for as much as 10% of global greenhouse gas emissions — and about three quarters of BHP’s Scope 3 emissions. The company says it’s working with industry giants including Japan’s JFE Steel and China’s HBIS Group on ways to reduce manufacturers’ carbon footprint.
“There are a number of global uncertainties that must be reckoned with in terms of achieving net zero in steel,” BHP said in the report, including the timeline for finding economical solutions to decarbonize the steel-making process. While some steel producers are trialling the use of hydrogen as a cleaner alternative to coal, the company has said the technology faces headwinds in terms of cost and storage.
BOTH BHP AND RIO TINTO GROUP, THE WORLD’S TOP IRON ORE EXPORTER, ARE TARGETING A 30% REDUCTION IN THE EMISSIONS INTENSITY OF ITS STEEL CUSTOMERS OVER THE NEXT DECADE
Both BHP and Rio Tinto Group, the world’s top iron ore exporter, are targeting a 30% reduction in the emissions intensity of its steel customers over the next decade. Fortescue Metals Group Ltd. has said it will announce targets for Scope 3 emissions later this month.
BHP’s Scope 3 goals come with caveats. Its net-zero target for direct suppliers is subject to the availability of carbon neutral goods and services that meet the miner’s requirements. Its shipping pledge depends on the widespread availability of carbon-neutral solutions including low or zero emissions marine fuels as well as technology on board suitable ships.
While emissions from BHP’s operations rose 2% in the past year, the company said it remained on track to reach its 30% reduction target by 2030. Solar and wind power supply deals were already in place across a range of its mine assets which would lower those emissions in the years ahead, the company said.
BHP is looking to clean up its portfolio by exiting thermal coal and increasing its exposure to what Chief Executive Officer Mike Henry calls “future-facing commodities”. They include metals such as copper and nickel — key materials for the batteries and wiring that are key to the clean-energy transition.
(By James Thornhill)
Hydrogen Could Be A Game-Changer For Midstream Oil & Gas
This is the final article in a series that examines Environmental, Social, and Corporate Governance (ESG) programs in the oil industry, with an emphasis on how some companies are using hydrogen to improve their metrics. Previous articles were:
Today I want to talk about specific examples of how various companies are incorporating hydrogen into their businesses.
Alerian on Midstream ESG
The genesis of this series came from a recent research piece from independent energy infrastructure and master limited partnership (MLP) market intelligence data provider Alerian: Midstream/MLPs: The Unsung ESG Push.
The research piece covered a number of different initiatives, but I was particularly interested in learning what these companies are doing in the area of hydrogen. I inquired, and heard back from Mauricio Samaniego, Senior Research Analyst, Alerian and S-Network Global Indexes, who said:
“As you may be aware, the recurring hydrogen theme for midstream has revolved around natural gas pipelines and storage facilities being used for the transportation and storage of blue or green hydrogen over the next decade.
Today, hydrogen initiatives are in very early stages and are mostly focused on blending hydrogen into existing natural gas pipelines, which has been set forth, explored, and/or discussed by Enbridge (ENB), TC Energy (TRP), Kinder Morgan (KMI), and The Williams Company (WMB). Additionally, TRP and Enterprise Product Partners (EPD) have also discussed—and are evaluating—leveraging existing nuclear and petrochemical plants for hydrogen production.”
He included a number of bullet points delineating these hydrogen-related initiatives, some of which I have used in the commentary below.
Hydrogen in Midstream
There are three readily accessible uses for hydrogen produced near a natural gas field. The first is compression. Midstream operators rely on compression to move natural gas from the field to the customer.
The National Energy Technology Laboratory (NETL), a branch of the Department of Energy, estimates that there are 1,700 midstream natural gas pipeline compressor stations with a total of 5,000-7,000 compressors, approximately 13,000-15,000 smaller compressors in upstream, and 2,000-3,000 compressors (all sizes) in downstream oil & gas and liquefied natural gas (LNG) applications. The DOE estimates that 2-3% of U.S. natural gas production is utilized by these compressors. (Source).
Among other companies, GE has developed hydrogen-fueled compressors. They currently have more than 100 units in the field operating on up to 100% hydrogen. So, a midstream operator could utilize hydrogen locally produced from underutilized products like ethane to improve ESG metrics.
Industrial gas turbines are currently the prime mover of choice for most mainline applications. Each of these turbines emits carbon dioxide, and they are high-profile targets for ESG improvements. Within the next 15 years, an estimated 5 million horsepower of compression must be replaced. (Source).
Operators of gas-fired power plants are also in the crosshairs, with regulators and investors setting ambitious CO2 reduction targets. Power plant turbines can be operated using a blend of methane and up to 20% hydrogen to reduce CO2 emissions. Mitsubishi Power has announced development of turbines capable of operating on 100% hydrogen.
To get that hydrogen to the power plants, many midstream operators are testing the blending of hydrogen into natural gas pipelines. In its Q4 2020 earnings call, Kinder Morgan mentioned having the technology in place to blend hydrogen with natural gas and move it via its pipelines.
At a recent energy conference, Energy Products Partners mentioned evaluating hydrogen applications for transportation and storage—citing ongoing discussions with a petrochemical company regarding hydrogen pipeline and storage projects.
Finally, the Canadian Government has incorporated a hydrogen strategy that intends to position Canada as a world-leading producer of clean hydrogen. This explains why Canadian midstream corporations are leading the hydrogen movement (e.g., Enbridge, TC Energy).
For American midstream operators, U.S. policy support has started to take shape the last few months, with both the Biden Administration and Congress proposing new and expanded hydrogen tax credits, along with other incentives for hydrogen investment. Along with the proposed policies, more supportive legislation could presumably accelerate the adoption of hydrogen and lead to further hydrogen-related developments across the midstream space.
By Robert Rapier
How mining waste can be used for hydrogen fuel production
(Image by Dr Hong Peng, courtesy of the Queensland University of Technology).
Researchers at the Queensland University of Technology have discovered a way to use mining waste as part of a potential cheaper catalyst for hydrogen fuel production.
The team led by Ziqi Sun and Hong Peng published these findings in the journal Advanced Energy & Sustainability Research. In their article, they explain that, normally, water splitting reactions that produce hydrogen are triggered using platinum, which costs about $1,450/ounce, iridium at $1,370/ounce and ruthenium at $367/ounce. Cheaper but less active metals such as cobalt, whose price is about $70,000/tonne, nickel at $26,000/tonne and iron at $641/tonne, are also used.
But they propose the idea of a new catalyst that requires only a small amount of these reactive metals and is combined with feldspars, aluminosilicate rock minerals found in mining waste that some companies pay about $30/tonne to dispose of. Feldspars make up about 60% of the Earth’s crust.
FELDSPARS ARE ALUMINOSILICATE ROCK MINERALS FOUND IN MINING WASTE. SOME COMPANIES PAY ABOUT $30/TONNE TO DISPOSE OF IT
In a series of experiments, the scientists triggered a water-splitting reaction using heated-activated feldspars nano-coated with only 1–2% of the cheaper reactive metals.
“Water splitting involves two chemical reactions—one with the hydrogen atom and one with the oxygen atom—to cause them to separate,” Sun said. “This new nano-coated material triggered the oxygen evolution reaction, which controls the overall efficiency of the whole water splitting process.”
According to Sun, cobalt-coated feldspar was very efficient and optimizing the new catalysts could see them outperform raw metals or even match the superior efficiency of platinum metals. He also said the aluminosilicates were chemically inert, but heat caused defects that were useful for chemical reactions and electron transport.
In his view, the new catalyst could potentially lower the cost of lithium-ion batteries and other sustainable energy solutions that rely on electrochemical conversions. This is why his group is now looking to test the catalysts at a pilot scale.
“Australia’s abundance of aluminosilicate and the simplicity of this modification process should make industrial-scale production of this new catalyst easy to achieve,” Sun said.
“Companies like Tesla could potentially use this technology for energy production, advanced energy storage solutions like new battery technologies, and renewable fuel.”
Rio Tinto hit with fresh tax bill in Australia
Cecilia Jamasmie | September 16, 2021 | Jakob Stausholm, Rio Tinto’s CEO since January 2021. (Image courtesy of Rio Tinto.)
The penalty relates to the denial of interest deductions on an isolated borrowing used to pay an intragroup dividend six years ago. This borrowing was repaid in 2018.
Rio received in March an amended assessment of A$$406.5 million. The sum consisted of A$359.4 million ($298m) in primary tax and A$47.1 million ($435m) in interest over money paid by its Australian unit to its United Kingdom entity.
THE LATEST ASSESSMENT ASKS THE MINING GIANT TO PAY A$352M ($257.9M) IN PRIMARY TAX AND REDUCES THE INTEREST TO A$27 MILLION ($19.8M) FROM A$47M
The latest assessment asks the mining giant to pay A$352m ($257.9m) in primary tax and reduces the interest to A$27 million ($19.8m) from A$47m ($34m).
Rio Tinto, which rewarded investors in February with the biggest dividend in its 148-year history, said the penalties are on top of more than A$8.4 billion ($6.4m) of Australian income tax paid during the relevant period. It added that borrowing to fund the payment of a dividend was a normal commercial practice.
This is the second curveball thrown by the ATO to Rio’s new chief executive, Jakob Stausholm, since he assumed the top post in January.
The company and the ATO are already at loggerheads over two other matters that are now the subject of talks between Australian and Singapore tax authorities.
The tax authority believes Rio’s Australian subsidiaries did not charge an appropriate price for the aluminum they sold to Rio’s controversial Singapore marketing hub between 2010 and 2016.
GOOD NEWS Democrats’ energy plan will kill US coal by 2030, miners say Bloomberg News | September 14, 2021 Massive coal conveyor at Seward, Alaska – Image from Adobe Stock Photos
A plan to push utilities to use more clean energy could eliminate coal from the US power grid by the end of the decade, according to a trade group that represents coal miners.
The Clean Electricity Performance Program proposed by House Democrats authorizes $150 billion in incentives for utilities that deliver at least 4% more clean energy to customers. Those that don’t will have to pay a penalty to the US Energy Department.
The program is a key part of President Joe Biden’s signature climate goal of decarbonizing the electric grid by 2035. For the coal industry, the carrot-and-stick approach is a serious threat, according to America’s Power, which represents miners including Peabody Energy Corp. and Consol Energy Inc.
“The CEPP would eliminate coal-fired electricity by 2030, if not sooner,” Michelle Bloodworth, the group’s chief executive officer, wrote in a letter Monday to leaders of the House Committee on Energy & Commerce. It would also “eliminate or at least drastically curtail the use of natural gas to generate electricity.”
The trade group said that U.S. utilities are already shifting away from fossil fuels, but pushing for such a rapid transition requires rapid adoption of more wind and solar energy, potentially threatening the stability of the power grid.
(By Will Wade and Ari Natter)
WANT CHEESE WITH THAT WHINE
US miners decry mineral royalty plan floated in Congress
Reuters | September 16, 2021 | US Congress. Credit: Wikimedia Commons
U.S. mining companies are blasting proposals in Congress that would set royalties for copper, lithium and other minerals extracted from federal land, with executives saying the measures would hurt domestic production of the building blocks for solar panels, electric vehicles and other green technologies.
The House of Representatives Natural Resources Committee added language to the proposed $3.5 trillion reconciliation spending measure last week that would set an 8% gross royalty on existing mines and 4% on new ones. There would also be a 7 cent fee for every ton of rock moved.
That would mark one of the most-substantial changes to the law that has governed U.S. mining since 1872 and could raise about $2 billion over 10 years for federal coffers.
The full House could reverse the committee’s move and the legislation faces an uncertain fate in the U.S. Senate.
“The race for electric vehicles and electrification of the economy requires metals and mining, and that needs to be incentivized, not stalled,” said Rich Nolan, head of the National Mining Association, an industry trade group.
Tensions are rising in the United States over how best to procure minerals needed to green the economy. President Joe Biden has yet to take a public stance on the issue, though privately he has signaled plans to rely on allies for EV metals, Reuters reported earlier this year.
THE PROPOSED NEW ROYALTY RATES WOULD AFFECT SO-CALLED HARD ROCK MINING, BUT ARE PART OF A SERIES OF OTHER PROPOSED FEE HIKES ON OIL, COAL AND NATURAL GAS EXTRACTION
The 1872 law did not set royalties in order to encourage development of more than 350 million acres in the western United States. Miners say it should remain as-is, or be tweaked only slightly. Environmentalists have long said the law should be updated to require the industry to pay to extract minerals on taxpayer-owned land.
Executives say Biden’s goal to have 35% of U.S. electricity generated by solar panels – up from 3% today – would be all but impossible without new mines. Silver is used to make photovoltaic cells.
“This royalty proposal is really inconsistent with being able to grow production and meeting the demands for silver to green the economy,” said Phil Baker, chief executive of Hecla Mining Co, the largest U.S. silver producer. Baker said he will close mines if the proposal is approved.
Miners say they already pay high income, sales and other taxes. They warned that the proposed royalty on gross profit would discourage investment when commodity prices rise and shorten a mine’s life when prices fall.
The NMA declined to say what percentage royalty its members would find palatable. It said it would prefer a royalty on net, rather than gross, profit.
“New taxes on the front end of the supply chain undermine the EV battery goals that have been set by the president and Congress and make U.S. policy look schizophrenic,” said Todd Malan of Talon Metals Corp, which is developing the Tamareck nickel deposit in Minnesota. Nickel is used to make EV battery cathodes.
The proposed new royalty rates would affect so-called hard rock mining, but are part of a series of other proposed fee hikes on oil, coal and natural gas extraction. The committee also approved language that would block Rio Tinto Ltd from building its Resolution copper mine in Arizona.
The NMA said it does support the committee’s proposal to create a $3 billion reclamation fund for older abandoned mines.
Lithium Americas Corp, which is developing the Thacker Pass lithium mine on federal land in Nevada, said it stands ready to work with Congress to develop a “reasonable royalty for operating on public lands.” Lithium is a key component of EV batteries.
“The current proposal will impair U.S. competitiveness when demand for lithium is soaring and the domestic production is just starting to respond,” said Tim Crowley of Lithium Americas.
(By Ernest Scheyder; Editing by David Gregorio)
Teck Resources weighs sale, spinoff of $8 billion coal unit
Bloomberg News | September 14, 2021 | Teck’s Greenhills steelmaking coal operation in Elk Valley, British Columbia.
Teck Resources Ltd. is exploring options for its metallurgical coal business, including a sale or spinoff that could value the unit at as much as $8 billion, people with knowledge of the matter said.
The Canadian miner is working with an adviser as it studies strategic alternatives for the business, which is one of the world’s largest exporters of the steelmaking ingredient, the people said, asking not to be identified discussing confidential information.
Shares of Teck were up 4.7% at 1:04 p.m. in Toronto, giving the company a market value of about C$17.4 billion ($13.7 billion).
Large commodity producers are under increasing pressure to cut back on fossil fuels in response to investor concerns over climate change. BHP Group last month agreed to sell its oil and gas assets to Australia’s Woodside Petroleum Ltd. and is seeking to exit some of its coal operations. Anglo American Plc spun off its South African coal unit for a separate listing in June.
LARGE COMMODITY PRODUCERS ARE UNDER INCREASING PRESSURE TO CUT BACK ON FOSSIL FUELS IN RESPONSE TO INVESTOR CONCERNS OVER CLIMATE CHANGE
Exiting coal could free up resources for Teck to accelerate its plans in commodities like copper, as demand shifts to the building blocks of an electrified global economy. Deliberations are at an early stage, and Teck could still decide to keep the business, the people said.
A Teck representative declined to comment.
Teck produced more than 21 million metric tonnes of steelmaking coal last year from four locations in western Canada. The business accounted for 35% of the company’s gross profit before depreciation and amortization in 2020, according to its website.
Metallurgical coal is a key raw materials used in steelmaking, which remains one of the most polluting industries on the planet and faces significant pressure from policymakers to clean up its act. China, the world’s largest metal producer, has indicated it will curb steelmaking in an effort to reduce carbon emissions.
Prices of metallurgical coal prices have continued to rise this year as bets on a global economic recovery fuel frenzied demand for steel. This helped Teck swing to a second-quarter net income of C$260 million, compared with a C$149 million net loss the same period last year. (Updates with share move in third paragraph)
(By Dinesh Nair and Ed Hammond, with assistance from Kiel Porter, Yvonne Yue Li, James Attwood, Joe Ryan and Joe Deaux)
Chile indigenous group asks regulators to suspend SQM’s permits
Reuters | September 13, 2021 | (Image courtesy of SQM.)
Indigenous communities living around Chile’s Atacama salt flat have asked authorities to suspend lithium miner SQM’s operating permits or sharply reduce its operations until it submits an environmental compliance plan acceptable to regulators, according to a filing viewed by Reuters.
Chile’s SMA environmental regulator in 2016 charged SQM with overdrawing lithium-rich brine from the Salar de Atacama salt flat, prompting the company to develop a $25 million plan to bring its operations back into compliance. Authorities approved that plan in 2019 but reversed their decision in 2020, leaving the company to start again from scratch on a potentially tougher plan.
That ongoing process has left the fragile environment of the desert salt flat in limbo and unprotected as SQM continues to operate, according to a letter from the Atacama Indigenous Council (CPA) submitted to regulators last week.
In the filing, the indigenous council said the ecosystem was in “constant danger” and called for the “temporary suspension” of SQM’s environmental approvals or, where appropriate, “to reduce the extraction of brine and freshwater from the Salar de Atacama.”
“Our request is urgent and…based on the state of environmental vulnerability of the Salar de Atacama,” council president Manuel Salvatierra said in the letter.
SQM, the world’s No. 2 lithium producer, told Reuters in a statement that it was moving forward with a new compliance plan and incorporating changes requested by the regulator to a draft document it submitted in October 2020.
“This is a normal part of the process, so we are working on the observations, which we hope to present this month,” the company said.
The Atacama region, home to SQM and top competitor Albemarle, supplies nearly one-quarter of the globe’s lithium, a key ingredient in the batteries that power cellphones and electric vehicles.
Automakers, indigenous communities and activists, however, have increasingly raised concerns in recent years about the environmental impact of lithium production in Chile.
SQM, which is ramping up production in Chile to meet fast-rising demand, last year announced a plan to slash its use of water and brine at its Atacama operations.
(By Dave Sherwood; Editing by Aurora Ellis)
In Arctic push, US extends new economic aid package to Greenland
Greenland said on Wednesday it had agreed a new economic aid package with the United States which seeks to boost ties the world’s biggest island and strengthen US military presence in the Arctic.
Washington has a military base on Greenland but paid little attention to the Arctic for two decades until 2019, when it began turning to the island to try to counter a Russian and Chinese commercial and military buildup in the region.
The aid package from USAid worth $10 million announced on Wednesday is primarily aimed at development of Greenland’s mining sector, tourism and education.
GREENLAND ELECTED A NEW GOVERNMENT IN APRIL THAT HAS PLEDGED TO HALT A LARGE CHINESE-BACKED RARE EARTH MINING PROJECT BECAUSE IT CONTAINS RADIOACTIVE URANIUM
“This is not a big amount, but symbolically it’s very important,” the country’s minister for industry and foreign affairs, Pele Broberg, told Reuters in an interview in the capital Nuuk.
The package comes on top of a $12.1 million package announced by Washington last year, which drew some criticism from Copenhagen for creating division between Greenland and Denmark.
Greenland, home to only 57,000 people but rich in natural resources, is a former colony and now an autonomous Danish territory.
It gained international attention in 2019 when former President Donald Trump tried to buy the island. Last year, the United States opened a consulate in Greenland, where it for decades has had a military base that is vital to its ballistic missile early warning system.
Greenland elected a new government in April that has pledged to halt a large Chinese-backed rare earth mining project because it contains radioactive uranium. The project was seen as a potential game-changer for the country’s tiny economy.
“It has some ripple effects to say no to uranium mining, but we think there are other areas that can be developed, and that is what we will look into with the Americans,” said Broberg of a small pro-independence party.
With an economy heavily dependant on fishing, the island relies on annual grants of around $600 million from Denmark. However, some see the relationship with Denmark as an obstacle to economic development.
“We don’t get the support from Denmark we need to be able to thrive. So now we try to go our own ways, without Denmark, and we’re starting small,” Broberg said.
(By Jacob Gronholt-Pedersen; Editing by Philippa Fletcher)
Albemarle, union in Chile reach agreement, ending strike Reuters | September 15, 2021
Brine pools from a Albemarle’s lithium mine. Albemarle Corp, the world’s top lithium producer, said on Wednesday it had reached a labor contract deal with a union at its Atacama salt flat plant, ending a month-long strike that had inflamed tensions between workers and the company.
The 135-member “Albemarle Salar” union, which comprises about half the workers at its key Salar production plant, went on strike in August after failing to reach a deal with the US-based lithium miner.
The company said in a statement that it had inked a new 36-month contract with the union and that workers would return immediately to the job.
“The operations at the Salar plant today return to normality, with special emphasis on safety of workers while production returns to levels before the strike,” the company said.
Throughout the strike, Albemarle maintained the extended walk-off had not hit its output of lithium from Chile.
The company clarified on Wednesday that the strike had led to a reduction in the pumping of lithium-rich brine at its Salar Plant, where the walk-off took place, but that the labor action had not impacted overall output from its La Negra chemical plant, where brines are processed into battery grade lithium carbonate.
Union representatives did not immediately respond to a request for comment on the agreement.
Albemarle’s Atacama operations in Chile are a vital source of the ultralight white metal used in batteries that power electric vehicles. Competitor SQM operates nearby.
Albemarle, which struck labor deals with its three remaining Chilean guilds earlier this year, said the deal with its Salar union of workers brings closure to this year’s negotiations.
(By Dave Sherwood; Editing by Marguerita Choy)
Codelco reaches labor agreement with union at Salvador division Reuters | September 15, 2021 | 2:32 pm Latin AmericaCopper Workers starting a shift at Codelco’s Andina mines. Image from Codelco.
Chile’s state-owned Codelco, the world’s largest copper producer, said on Wednesday it had reached agreement on a labor contract with a union representing workers at its small Salvador division in northern Chile.
The miner and the Benito Tapia Tapia union No. 6 signed a 36-month deal that includes a $5,200 signing bonus as well as production-linked benefits, the company said in a statement.
The company’s final contract offer was approved by 61% of the union workers who voted, Codelco said.
Soaring copper prices this year have handed unions in Chile more leverage than in the recent past, ratcheting up tensions in some labor negotiations, including a prolonged strike at Codelco’s Andina mine near Santiago.
Salvador, an aging deposit that has experienced declining ore grades and low productivity, has embarked on a $1.4 billion upgrade to extend its life.
The division produced 56,300 tonnes of copper in 2020.
(By Dave Sherwood; Editing by Peter Cooney)
Union at Albemarle Atacama plant rejects new contract offer, strike continues Reuters | September 13, 2021 | Image from Albemarle Corp.
A Chilean union at Albemarle Corp, the world’s top lithium producer, said on Monday it had rejected the company’s latest labor contract offer, leaving workers to continue a walk off that has extended for more than a month.
The 135-member “Albemarle Salar” union, which comprises about half the workers at its key Salar production plant, went on strike in August after failing to reach a deal with the U.S.-based lithium miner. The company maintains the extended walk-off has yet to hit its output of lithium.
ALBEMARLE SAID IT REGRETTED THE UNION’S DECISION BUT REJECTED ITS CLAIMS OF UNFAIRNESS
The union said in a statement issued Monday that the latest deal offered nothing beyond two prior proposals that were also rejected. The union called the contract offer “discriminatory” and said it would only foster salary inequality among its workers.
Albemarle told Reuters it regretted the union’s decision but rejected its claims of unfairness.
“The Salar aspires to a bonus for the termination of the conflict that is much higher than that of the other three unions with which we successfully concluded collective bargaining,” the company said in a statement.
Albemarle’s Atacama operations in Chile are a vital source of the ultralight white metal used in batteries that power electric vehicles. Competitor SQM operates nearby.
The company, which struck labor deals with its three remaining Chilean guilds earlier this year, said again on Monday it had a “solid” contingency plan that assured it could continue to meet its customers needs during the walk-off.
The union has alleged the miner had been flying workers in by helicopter to replace those on strike, a practice it said violated union rights.
Albemarle extracts lithium-rich brine from beneath the salt flat at its Salar plant, then processes the distilled brines into battery grade lithium carbonate at its La Negra chemical plant near the city of Antofagasta in northern Chile.
(By Dave Sherwood; Editing by Chris Reese)
Copper price down as labour conflicts in Chile resolved, supply concerns fade
The copper price fell again on Monday on signs that strike risks are all but over in Chile, the world’s biggest producer.
In quick succession, mining companies in Chile have resolved a series of labor conflicts.
On Friday, plant workers at Codelco’s Andina mine agreed to end a more than three-week stoppage. The next day, workers at BHP Group’s Cerro Colorado mine accepted an offer hammered out by the two negotiating teams in mediated talks, avoiding a strike.
The recent breakthroughs follow strike-ending agreements earlier this month with the two main unions at Andina and at a mine owned by JX Nippon Mining & Metals. The industry also managed to avoid stoppages at top-tier mines such as Escondida and El Teniente.
Copper for delivery in December fell 1.8% from Friday’s settlement price, touching $4.374 per pound ($9,622 per tonne) midday Monday on the Comex market in New York.
Click here for an interactive chart of copper prices
Massive global stimulus measures are keeping metals demand strong. Yet the economic bellwether has also been overshadowed lately as China’s move to curb metals production to reduce pollution and a coup in key bauxite supplier Guinea sent aluminum to a 13-year high of $3,000 a tonne.
China’s state reserves administration also released 150,000 tonnes of copper, aluminum, and zinc in the market that led to some cooling in copper prices.
(With files from Bloomberg and Reuters)
'MAYBE' TECH
Alrosa tests CO2 capture potential by its ore Reuters | September 16, 2021 |
Kimberlite is an igneous rock which fills up volcanic pipes. Credit: Alrosa
State-controlled diamond producer Alrosa has teamed up with Russian scientists to test the ability of its processed ore to absorb carbon dioxide, the company said on Thursday, adding that initial results of the study have been promising.
Alrosa, the world’s largest diamond producer, mines the precious stones from kimberlite ore in the remote Yakutia region in Russia’s far east. It plans to adopt a climate change strategy in the first quarter of 2022.
It currently generates 90% of its power from renewable sources and keeps on replacing fuel for its transport with natural gas to reduce greenhouse gas emissions, but admits that absorbing CO2 from the atmosphere or offset measures will be needed for its goal to become carbon-neutral in the future.
If diamond-containing kimberlite rock is able to absorb emissions of the main greenhouse gas, it would help diamond companies fully join global efforts to slow down global warming.
Alrosa’s main peer – De Beers – started piloting a project to capture carbon in kimberlite rock to offset emissions in 2017.
“If future research confirms the preliminary data, it would mean that we have established significant potential for compensating greenhouse gas emissions in diamond mining through the ore’s ability to absorb carbon dioxide from the atmosphere,” Mikhail Dubovichev, head of innovation and technology at Alrosa, said in a statement.
The first and initial phase of Alrosa’s study, which will last until 2023, showed that kimberlite ore in its tailings could potentially absorb more CO2 than the entire company generates, it said in the statement. In 2020, Alrosa’s direct emissions totalled 997,000 tonnes of CO2 equivalent.
Tested samples of stored kimberlite ore, mined from its Udachnaya pipe, could absorb as much as 80 kg of CO2 per tonne of processed ore, Alrosa said.
The estimate was based on ore samples that spent between one month and ten years in its tailings storage, and comparison with samples of ore just removed from the pipe, it added.
