Small brains can accomplish big things, according to new theoretical research

Howard Hughes Medical Institute

Neuroscientists had a problem.

For decades, researchers had a theory about how an animal’s brain keeps track of where it is relative to its surroundings without outside cues – like how we know where we are, even with our eyes closed.

According to the theory, which was based on brain recordings from rodents, networks of neurons called ring attractor networks maintain an internal compass that keeps track of where you are in the world. An accurate internal compass was thought to require a large network with many neurons, while a small network with few neurons would cause the compass’s needle to drift, creating errors.

Then researchers discovered an internal compass in the tiny fruit fly.

“The fly’s compass is very accurate, but it’s built from a really small network, contrary to what previous theories assumed,” says Janelia Group Leader Ann Hermundstad. “So, there was clearly a gap in our understanding of brain compasses.”

Now, research led by Marcella Noorman, a postdoc in the Hermundstad Lab at HHMI's Janelia Research Campus, explains this conundrum. The new theory shows how it is possible to create a perfectly accurate internal compass with a very small network, like in fruit flies.

The work changes the way neuroscientists think about how the brain carries out many tasks, from working memory to navigation to decision-making.

“This really expands our knowledge of what small networks can do,” Noorman says. “They actually can do a lot more complicated computations than previously known.”

Generating a ring attractor

When Noorman arrived at Janelia in 2019, she was presented with the problem Hermundstad and others had been puzzling over: How could the fruit fly’s small brain generate an accurate internal compass?   

Noorman first set out to show that you couldn’t generate a ring attractor with a small network of neurons, but that you needed to add “extra stuff” -- like other cell types and more detailed biophysical properties of the cells – to get it to work. To do that, she stripped away all the “extra stuff” from existing models, to see if she could generate a ring attractor with what was left over. She thought this wouldn’t be possible.

But Noorman struggled to prove her hypothesis. That’s when she decided she needed a different approach.

“I had to flip my mindset and think, well, maybe it’s because you can generate a ring attractor with a small network,” she says, “and then figure out what specific conditions the network has to satisfy to make that happen.”

By changing her assumption, Noorman discovered that, in fact, it is possible to generate a ring attractor with as few as four neurons, as long as the connections between them are carefully adjusted. Noorman worked with other researchers at Janelia to test the new theory in the lab, finding physiological evidence that the fly brain can generate a ring attractor.

“Smaller networks and smaller brains can perform more complicated computations than we previously thought,” Noorman says. “But, to do so, the neurons have to be connected much more precisely than they would otherwise need to be in a larger brain where you can use a lot of neurons to perform the same computation.”

“So there’s a trade-off between how many neurons you use for this computation and how carefully you have to connect them,” she says.

Next, the researchers plan to explore whether the “extra stuff” might provide additional robustness to the ring attractor network, and whether the base computation could serve as a building block for more complicated computations in bigger networks with multiple variables. Additional experiments could also help researchers understand how the connections between neurons in the network are adjusted and how sensory cues might impact the network’s representation of head direction.

For Noorman, a mathematician turned neuroscientist, it has been challenging but fun to figure out how to translate biology into a math problem that can be solved.

“The fly’s head direction system is the first example of neural activity that I’d ever seen, so it’s been fun to actually figure out and understand how that works,” she says.

---

Journal

Nature Neuroscience

DOI

10.1038/s41593-024-01766-5 

Article Title

Maintaining and updating accurate internal representations of continuous variables with a handful of neurons

Article Publication Date

3-Oct-2024

 

Wake Forest University School of Medicine awarded $3.4 million to study medical misinformation

Atrium Health Wake Forest Baptist

WINSTON-SALEM, N.C. – Oct. 3, 2024 – Researchers at Wake Forest University School of Medicine have received a five-year, $3.4 million grant from the National Institute on Aging, part of the National Institutes of Health, to study medical misinformation.

During the COVID-19 pandemic, public distrust in science and medicine grew. The hyper-politicized environment, evolving health guidelines as scientists learned more and disagreements about trustworthy sources for health information only intensified the spread of misinformation.

While many physicians discuss medical misinformation with their patients during clinical visits, there’s little known research on the factors that assist or impede these conversations.

“Health care providers play a crucial role in mitigating misinformation,” said Zubin Master, Ph.D., associate professor of social sciences and health policy at Wake Forest University School of Medicine and the study’s principal investigator. “However, we need a better understanding of why physicians may choose not to confront patient misinformation.”

Master said that older patients are also disproportionately affected by health misinformation, which can hurt informed decision-making and health outcomes.

For the study, the research team will conduct 100 interviews and survey a national sample of 1,400 physicians to evaluate attitudes about confronting medical misinformation surrounding two topics known to have rampant misinformation: COVID-19 vaccinations and unproven stem-cell therapies.

Master said while these topics vary in their politicization, misinformation in both areas is a threat to public health. For example, unproven stem cell therapies have not been scientifically tested for patient safety and effectiveness, and yet, there’s a direct-to-consumer market that flourishes.

Using online focus groups with older adult patients, researchers will also evaluate communication preferences and willingness in being confronted with evidence-based health information from physicians.

Master said that future research will involve translating data from these studies to create a toolkit for physicians that can be tested and implemented within a health system.

“Health care providers are highly trusted information brokers,” Master said. “This funding will support our long-term goal in understanding the best methods to increase health literacy and counter medical misinformation among an aging public.”

 

Rutgers receives grant from USDA to develop an alternative to hydroponics method

The funding will spark innovations in plant growth from urban areas to outer space

Grant and Award Announcement

Rutgers University

Rutgers Health received a $607,000 grant from the U.S. Department of Agriculture to develop “electroponics,” an alternative to the hydroponics approach to farming that would allow plants to grow under limited water conditions or in zero gravity conditions ready for deployment in space stations.

The idea behind the research is to adapt farming to conditions resulting from climate change where water is a rare commodity and to precisely target the delivery of agrichemicals that can cause serious environmental pollution.

“Increasing food security is one of the challenges of the 21st century. We need to increase food production by 100% by 2050, and we need to do so in a more sustainable manner at a time that climate change reduces arable land and makes water scarce,” said Philip Demokritou, the Henry Rutgers Chair and Professor of Nanoscience and Environmental Bioengineering at Rutgers Health, Professor of Mechanical and Aerospace Engineering, and principal investigator of the project.

“There is an urgent necessity to develop effective irrigation strategies, which utilize minimal water usage and optimize the delivery of agrichemicals for crop growth,” continued Demokritou, who is the director of the division of environmental health biosciences at the Environmental Occupational Health Sciences Institute (EOHSI).

The three-year grant will leverage innovations in Demokritou’s Nanoscience and Advanced Materials Center and at Jonathan Singer’s Hybrid Micro/Nanomanufacturing Lab (Project co-PI) at Rutgers School of Engineering to optimize plant germination and growth. The proposed novel and game-changing technology uses electrospray as a method of precisely delivering water in the form of electrically charged micron-size particles and biopolymer-based nanofibers extracted from food waste that can be used as seed coatings to enhance germination and plant growth suitable for many types of edible plants such as lettuce. “We will scale up and demonstrate these innovative technologies in simulated urban and space environments, bringing precise micronutrient and water delivery to critical scenarios for long-term sustainability and exploration,” said Jonathan Singer, Associate Professor of Mechanical and Aerospace Engineering and Mary W. Raisler Distinguished Teaching Chair at Rutgers School of Engineering.

The agricultural sector is faced with challenges brought about by climate change and population growth, including water scarcity and agrichemical delivery inefficiencies. Water scarcity is a pressing issue in agriculture, leading to low yields and crop failures, whereas inefficiencies in agrichemical delivery also result in major environmental and public health issues.

“The scientific knowledge gained in the project can impact and inform more efficient farm practices and enhance food security at a global scale,” adds Demokritou.

The goal of the project will be a scaled-up electroponics system demonstrated in a field study in terms of its ability to enhance plant growth using minimal amounts of water and agrichemicals. The proposed innovative platform for the precision delivery of water and agrichemicals using electrospray/electrospinning approaches will thereby be shown as a viable alternative to current soilless approaches in tackling future challenges.

Gold Fields Taps ExoSphere To Advance Exploration at Salares Norte in Chile



News provided by Fleet Space
Oct 02, 2024

ADELAIDE, Australia, Oct. 2, 2024 /CNW/ -- Fleet Space Technologies, Australia's leading space exploration company, today announced plans to deploy its end-to-end mineral exploration solution, ExoSphere, to enhance Gold Fields' data-driven exploration and development of their Salares Norte project in Northern Chile. ExoSphere will be used to generate 3D subsurface imaging of the Brecha Principal and Agua Amarga resource areas and surrounds with the aim to drive new insights and understandings about the mineral system and its structural setting. Additionally, the survey will be used to identify new exploration targets in the near field of the BP-AA system.

"Fleet Space and Gold Fields share a vision of applying the powerful capabilities enabled by advanced satellite connectivity, 3D multiphysics, and AI to unify the end-to-end exploration journey and deliver more sustainable outcomes at scale on the path to discovery," said Flavia Tata Nardini, Co-Founder & CEO of Fleet Space Technologies. "We are proud to deploy ExoSphere to further Gold Fields' data-driven exploration and ESG targets, reinforcing their position on the forefront of innovation and supporting the development of their world-class operation in Chile."

Home to the Brecha Principal deposit and Agua Amarga resource, Salares Norte is located on the Maricunga Belt in the Andes Mountains between 3,900–4,700 meters above sea level in the Atacama region of Northern Chile. In March 2024, first gold was poured, marking a significant milestone and technical achievement for the project. Due to the remote location, challenging terrain and harsh seasonal conditions, Gold Fields has had to develop innovative strategies and engage new technologies to enhance their exploration activities whilst maintaining a low environmental footprint. Gold Fields was an early adopter of Fleet Space's end-to-end solution, ExoSphere, at its St. Ives operation in Australia. Based on these results and the near-zero surface impact of Fleet Space's smart seismic sensors (called Geodes), the application of ExoSphere at Salares Norte was a logical step to provide low-impact, rapid 3D subsurface imaging.

"In the field of mineral exploration, ExoSphere has delivered the world's largest real-time ANT survey in Australia's Macquarie Arc and now the world's highest real-time ANT survey on Chile's Maricunga Belt - radically scaling the mining industry's capacity to enhance mineral systems knowledge of highly remote opportunity zones across vast distances and at unprecedented altitudes, while minimising environmental impact," added Fleet Space CEO, Flavia Tata Nardini. "We look forward to partnering with the dynamic Chilean mining industry to unlock next-level insights and sustainability benefits across their exploration value chain."

The architecture underlying ExoSphere integrates the latest advances in satellite connectivity, 3D multiphysics and AI into a single end-to-end solution. Fleet Space's satellite network in low Earth orbit, smart seismic sensors with edge computing, and rapid data processing enable ExoSphere to deliver real-time 3D mapping of mineral systems and AI-powered targeting recommendations with near-zero environmental impact. By unifying the data acquisition, processing, integration, and targeting steps of the end-to-end exploration journey, ExoSphere makes exploration more dynamic and precise by giving remote onsite teams real-time access to actionable insights. This radically streamlines data operations, enhances the quality and speed of onsite decision making, while also reducing environmental footprint at scale.

For the real-time, predictive capabilities and sustainability benefits ExoSphere has unlocked for the global exploration industry, Fleet Space was recognised at the Banksia Foundation's 35th National Sustainability Awards as winner of the Climate Technology Impact Award for 2024. Global adoption of ExoSphere has also propelled Fleet Space's exponential growth over the past year, which included a A$50 million Series C, a doubling in valuation to A350$ million, and recognition as Australia's fastest growing company.

About Fleet Space Technologies
Fleet Space Technologies, Australia's leading space exploration company, is revolutionizing critical mineral discovery with its end-to-end mineral exploration solution, ExoSphere, which combines satellite connectivity, 3D multiphysics, and AI to image mineral systems in real-time. Over 40 leading exploration companies like Rio Tinto, Barrick Gold, and Core Lithium have used ExoSphere to conduct real-time surveys across five continents. Due to global demand for ExoSphere, Fleet Space's international footprint has expanded to the US, Canada, Chile, and Luxembourg with over 130+ employees worldwide. Fleet Space was named "Australia's Fastest Growing Company" by the Australian Financial Review in 2023 and recognized with the Climate Impact Technology Award by the Banksia Foundation in 2024. Reach out here to learn more about ExoSphere and speak with the Fleet Space team.

SOURCE Fleet Space

WAIT, WHAT?!

Costco adds platinum to its growing line of precious metal offerings

Chris Morris
Updated Wed, October 2, 2024 

Costco (COST) isn’t the place you’d expect to be a precious-metals hub, but following the success of its gold bar sales and silver coins, the retailer has added platinum to the lineup.

The company has launched the sale of 1-oz. platinum bars on its website, with a price tag of $1,089.99. A 1-oz. Canada Maple Leaf platinum coin sells for the same price. Both carry a premium markup of about $94.

The Swiss-made bars and coins aren’t available in all parts of the country and cannot be delivered to Nevada or Louisiana, the company said on its website. They also can’t be returned or refunded. And if you want one, you’ll need to act quickly when they come into stock, as they sell out almost immediately.

(Reddit users have already launched a subreddit—Costco Precious Metals—to inform one another when stock is refreshed for gold, platinum and silver offerings.)

Introducing precious metals to its online offerings has been a boon for Costco’s e-commerce operations. Chief Financial Officer Richard Galanti, speaking on an earnings call earlier this year, said the increase in online sales in the last quarter of 2023 was "led by sales of gold and very recently silver."

Costco shoppers are a bit fonder of the gold than the silver offerings. An analyst note from Wells Fargo earlier this year estimated that sales of the company’s gold bars account for between $100 million and $200 million per month. Sales of the 1-oz. bars, which are made of 24-karat gold, began last October. The bars sell for about $2,000 each.

While the revenue numbers are significant, the research note suggests the profits from these sales are low, at best. The real value, it says, is in how the price reinforces Costco’s value position. Think of it as a high-end version of the company’s rotisserie chickens—a way to attract customer attention.

This story was originally featured on Fortune.com

 

Yellowknife lithium project touts encouraging results amid market slump

Analyst says low prices affecting lithium explorers around the globe

Jocelyn Shepel · CBC News · Posted: Oct 06, 2024 

Mining company Li-FT has been exploring for lithium in the Yellowknife area and says results from its first drilling program are promising. (Andrew Strain/Li-FT)

Social Sharing

• Facebook
• X
• Email
• Reddit
• LinkedIn

The president of a company exploring for lithium in the Yellowknife area is touting the results of its first drilling campaign — but Li-FT is facing the same challenges affecting the lithium market around the world: low prices.

When Li-FT bought the project properties along the Ingraham Trail in late 2022, lithium prices were around $80,000 a tonne. Now it sells for around $10,000. 

That hasn't discouraged Li-FT president Alex Langer. He says the company's first drilling results suggest that it has the third-largest hard rock lithium deposit in Canada.

He says the current market does make access to capital more difficult, but says the company was lucky enough to raise a large amount during the initial boom.

"I think we've raised $70 or $80 million in the first two years. So we have shareholders and directors that are able to raise capital even in downturns of markets. So it allows us to still push for the project because we do believe in the longer-term price of lithium," said Langer.

He believes that the world may only need 10 or 20 more lithium mines, so while other mining projects slow down or shut down he says Li-FT is preparing for a future lithium boom.

In a news release this week, Li-FT said initial drill results indicate pegmatites in the Yellowknife area hold an estimated 50.4 million tonnes of lithium. Pegmatites are large rocks that host lithium. Five more pegmatites on Li-FT's Yellowknife properties have yet to be drilled. 

Li-FT's mineral resource estimate covers 8 of 13 spodumene-bearing pegmatite dykes like the one pictured above. (Andrew Strain/Li-FT)

Langer says these results place the project within the top 10 largest resources within the Western Hemisphere.

"It sets the stage that we are going to be one of the largest ones," said Langer.

Analyst says too soon to forecast future prices

John Ciampaglia, CEO of capital market company Sprott Asset Management, said lithium exploration projects around the world are struggling in the current market. He said numbers have been pretty flat over the last year or so.

"That's because a number of companies say 'we cannot produce lithium at these prices,'" said Ciampaglia.

• N.W.T.'s mining future could be in gold or lithium, say companies

• Chinese-made EVs are now subject to a 100% tariff. What does this mean for Canadians?

He said more projects have shut down than have started up

Ciampaglia said companies like Albemarle, one of the world's largest producers of lithium, recently announced that they're curtailing operations and reducing their workforce. 

"When the majors are announcing that prices are not economical to continue production, that is not a great sign for projects that are still in early phases of development, given how much capital they need to get off the ground."

ABOUT THE AUTHOR

Jocelyn Shepel

Jocelyn Shepel is a 2024 Joan Donaldson Scholar. She’s from B.C. and a BCIT graduate. 

You can reach her at jocelyn.shepel@cbc.ca.

Vale backs Brazil critical minerals fund in nod to government

Bloomberg News | October 2, 2024 | 

Brumadinho, Minas Gerais. Credit: Wikimedia Commons

Vale SA is committed to investing in Brazil’s first fund to support critical minerals as it seeks to diversify, the new chief of the world’s No. 2 iron ore supplier said Wednesday.


Vale has 90% of its revenue coming from the steelmaking ingredient and wants to boost copper production, chief executive officer Gustavo Pimenta said at a press conference.

“The industry’s big challenge today is to bring these critical minerals into operation, develop these projects, bring these projects to the commercial stage,” he said.

The fund, backed by Vale and Brazil’s development bank BNDES, selected a consortium formed by JGP Asset Management, BB Asset and Ore Investments to manage the 1 billion reais ($184 million) private equity fund created to support research and exploration of strategic minerals needed for the energy transition.

The announcement was the first by Vale’s new top boss, who took the helm Tuesday. Restoring government relations is one of the company’s top priorities as Vale seeks to permits to expand iron ore production and logistics. The miner also is negotiating a settlement over a deadly mining disaster in 2015.

The Rio de Janeiro-based company and the bank will seed the fund with as much as 250 million reais each, allowing the fund managers to focus on raising capital. The money will be invested in 20 junior and mid-sized companies working in mineral research, development and implementation of strategic mineral mines in Brazil, starting in March.

(By Mariana Durao)

CRIMINAL CAPITALI$M

Glencore-Congo mine row tied to sanctioned ex-partner Gertler

A GLENCORE TRADITION

Bloomberg News | October 3, 2024 

Gertler, originally a diamond trader, amassed his fortune mostly by buying mining assets from the DRC at greatly discounted prices, and selling them at great profit. (Image: Screenshot from Bosolo Na Politik Officielle | YouTube.)

A dispute between a Glencore Plc unit and the Democratic Republic of Congo centers around a deal Israeli businessman Dan Gertler struck years ago.


Congo’s mines minister said the spat between authorities and a Glencore-owned copper and cobalt mine revolves around royalty payments the unit makes to Gertler, who the US sanctioned in 2017 over alleged corruption. Congo now says part of the funds should have been paid to the state instead.

Bloomberg reported last week that a tax agency says Kamoto Copper Co. owes the state hundreds of millions of dollars in a royalties row. The involvement of Gertler — who still receives royalties from Congo projects including Kamoto — is a reminder of the challenges his ongoing presence poses in the key producer of minerals needed for the energy transition.

It also highlights why Western firms have resisted US encouragement to invest in Congo, where many mines are owned by Chinese firms. Washington wants the West to finance projects there to tackle Beijing’s dominance in critical metals, but progress has been hit by a range of issues. They include Congo’s history of demanding large one-off payments, and the continued involvement of Gertler that makes some investors wary of doing business there because of the sanctions.

Congo’s high-grade deposits of copper and cobalt are some of the world’s most important sources of so-called green metals. President Joe Biden’s administration views the country as a key battleground in its drive to reduce China’s dominance in mining and processing critical minerals.

Kamoto is one of the largest mines in Congo. A tax agency known by its French acronym DGRAD says it owes the state more than €800 million ($885 million), people familiar with the matter have said. After the unit’s local bank accounts were frozen earlier this year, tax collection staff recently also briefly sealed off a warehouse where the company was storing metal, the people said.

The payments at the center of the spat relate to transfers Kamoto makes to Gertler, Mines Minister Kizito Pakabomba said in an interview in New York on Friday. (Kamoto also pays a different set of royalties based on sales which go directly to the government.)

“These are Dan Gertler’s royalties,” he said, declining to go into further detail about the dispute. The impasse is moving in the right direction and an agreement between the parties “has almost been reached,” Pakabomba said.
Mine payments

DGRAD’s position is that local laws mean that 50% of the royalties paid to Gertler should go to the nation’s Treasury, according to people familiar with the matter who asked not to be identified.

A Glencore spokesman declined to comment. A spokesman for Congo’s finance ministry, which oversees DGRAD, didn’t respond to questions from Bloomberg, including on why it’s requesting the funds from Kamoto rather than Gertler.

Gertler’s Ventora Group said that it’s aware of a dispute, but that it is a matter between the tax agency and Kamoto. “It does not involve Ventora Group, we do not know what it relates to, any other details or the merits of such claim.”

Gertler kept royalty rights in Kamoto and another nearby mine belonging to Glencore — equal to about 2.5% of revenue — after selling his minority holdings before he was sanctioned by the US. He also benefits from a similar arrangement at another project owned by Eurasian Resources Group.

Under a deal cut with Congo’s government in 2022, he agreed to hand back some assets in exchange for help lobbying the US to lift sanctions, though still retained royalties. Gertler, who acquired the Kamoto rights from Congo’s state miner Gecamines about a decade ago, has never been charged with a crime and denies any wrongdoing.

The current dispute with tax authorities isn’t the first time Gertler’s royalties have caused problems for Glencore. After halting transfers amid sanctions, the company resumed payments to him in 2018 — in euros — following a lawsuit filed by Gertler. Glencore said at the time the decision was the “only viable option to avoid the material risk of seizure” of its Congolese mines.

(By William Clowes, Michael J. Kavanagh and Thomas Biesheuvel)

ECOCIDE
Madagascar’s nickel and cobalt miner Ambatovy shuts down ore pipeline

Reuters | October 2, 2024 | 

Forests around the Ambatovy mine. 

(Image by Sebastien Desbureaux, courtesy of Bangor University).

Madagascar’s nickel and cobalt miner Ambatovy has shut down a pipeline supplying ore from its mine in the country’s east to a processing and refinery plant due to damage, its major shareholder Sumitomo Corp said.


As Ambatovy continues to assess the impact on operations and the timeline for recovery, traders said that the incident could tighten supplies in the cobalt market if the stoppage goes on for more than two months.

The cause of the damage to the slurry pipeline, which occurred on Sept. 25, is being investigated, Sumitomo said in a statement on Monday, adding that no injuries were reported.

The Japanese trading house has been struggling to stabilize production and improve profitability at the Ambatovy project, which launched in 2005.

The project produced about 8,000 metric tons of nickel during the April-June quarter, down from about 10,000 tons a year earlier, Sumitomo said in July. It expects annual production of 35,000 tons for the year to March 31.

It did not disclose its cobalt production. According to Darton Commodities, Ambatovy produced 3,390 tons of cobalt last year.

Sumitomo owns a 54.2% stake in the project companies – Ambatovy Minerals, a mining company, and Dynatec Madagascar, a refining company – while the remaining stake is held by Korea Mine Rehabilitation and Mineral Resources.

The Ambatovy nickel project companies filed a debt restructuring plan with a court in London in August. Sumitomo Corp said at that time that the filing was part of their effort to ensure the stable and efficient operation of the project, not a liquidation process.

(By Pratima Desai and Polina Devitt; Editing by Jan Harvey)

Copper smelters warn of closures as crunch talks get underway

Bloomberg News | October 4, 2024 | 

Copper smelter. Stock Image.

Copper smelters are warning that plants may shut down or even go out of business if the industry’s processing fees drop too sharply, as annual supply negotiations with key miners get underway this week.


A wave of new smelter investments in China and elsewhere has left plants in growing competition to find enough ore to feed their furnaces, which means that miners can squeeze out increasingly attractive supply terms.

In private conversations, senior industry executives attending the annual LME Week said it’s likely that the key processing fee will fall to a level where smelters will struggle to turn a profit. The two sides began holding meetings this week to share their views on the market, although they have yet to put any numbers on the table, they said. There’s a broad expectation that the talks will be the toughest in years.

While the annual negotiations don’t get much attention outside of the metals world, this year the outcome could have far-reaching ramifications for the copper market. Smelter closures could reshape the map of global refined copper supply at a time of growing concerns about Chinese dominance over critical minerals. And, after a year in which the market for refined copper has been in oversupply even as miners struggled to lift output, the squeeze on smelters is likely to crimp refined supply — just as some expect China’s newly announced stimulus to kickstart consumption.


Smelters typically derive a large part of their profits from processing fees that are deducted from the cost of concentrates, the partly processed ore that they buy from miners. The industry agrees a benchmark for treatment and refining charges (TC/RCs) in the fourth quarter of each year — the fee is used as a reference for long-term supply contracts, while other ad hoc sales throughout the year are priced based on conditions at the time.

The mounting squeeze on ore supplies has led to a wide gulf between last year’s benchmark — which was set a $80 per ton of ore and 8 cents per pound of contained metal — and the terms being agreed in spot deals. The situation has grown so severe that the fees have turned negative; traders and smelters have been paying more for copper ore than the copper contained in it would fetch once processed, a highly unusual situation.

In a straw poll of more than two dozen miners, traders and smelters, respondents who provided an estimate said the benchmark would likely be agreed between $20 and $40 a ton and 2c to 4c a pound. Several respondents suggested that the negotiations could lead to a breakdown of the benchmark system, a potential watershed moment for the industry.

This year, the benchmark is expected to be negotiated with Chilean miner Antofagasta Plc, which in the past has tended to strike a tougher negotiating line than American rival Freeport-McMoRan Inc. The US company has often set the benchmark in recent years, but it will have far fewer concentrates to sell next year after building a huge new smelter next to its largest mine in Indonesia. Chief executive officer Kathleen Quirk said in an interview that Freeport won’t set the benchmark this year.

A spokesperson for Antofagasta declined to comment on the negotiations.

Representatives of Chinese smelters in London this week said they are emphasizing to Antofagasta that the industry already faces widening losses because there is not enough concentrate to go around, and warning that an aggressive cut to the benchmark fees could lead to production cuts and cause permanent damage to the industry. Officials at Chinese smelters said the industry would probably be lossmaking at fees below about $35 to $40 a ton.

“There’s been so much new capacity developed for smelters in China over the years, and there’s just not the concentrate available to feed everything,” Freeport’s Quirk said in London this week. “But for concentrate producers that are relying on smelters, they have to think: ‘Well, I don’t wanna push these guys out of business.’”

The huge mismatch between concentrate supply and demand stems from the commissioning of new plants in India, Indonesia and the Democratic Republic of Congo, as well as several major plant expansions in China. It’s also been a weak year for mine supply, but the rapid expansion in smelting capacity has fueled expectations that smelting margins will remain severely constrained even as mined output rebounds.

“We’ll maintain our production as we do have long-term supply contracts, and we’ll have to live with these lower TC/RCs for the coming year,” said Toralf Haag, who last month took over as CEO of Aurubis AG, Europe’s largest copper smelting group. “We’re optimistic that the situation will start to resolve itself over the coming year — some refining capacity will come off-stream, and some additional mining capacity will come onstream.”

Researcher CRU estimates that the difference between smelters’ needs and concentrate supply will balloon to about 1.2 million tons, the biggest deficit in at least a decade.

It expects that 70% of the gap will be resolved by smelters reducing their operating rates, but the remaining gap will need to be solved by temporary or permanent plant closures. And the more aggressive miners are in driving down TC/RCs, the more extensive the cuts will be, according to Erik Heimlich, the consultancy’s head of copper and zinc.

“Miners are in a very good position and they could force a very low TC/RC, but there are reasons that they won’t want to go as low as possible,” he said in an interview. “These are long-term relationships, and if you go very low, you’ll end up with an industry that loses a lot of players on the demand side.”

China’s fast-growing copper champion is reshaping global metal supply

Bloomberg News | October 2, 2024

Pictured: Zijinshan gold-copper mine. 

(Image courtesy of Zijin Mining)

Chen Jinghe was not long out of university when a government official handed him the assignment that would change his life. Go to Zijin mountain, he was told, and find gold.


It was 1982, and the geology graduate found himself on forested slopes in the remote, humid highlands of southeastern China. The bet paid off. The deposit his team eventually discovered became the nation’s biggest gold mine — and the foundation for a $67 billion state-owned behemoth that is today driving copper supply growth and gaining ground on some of the most established names in the global resources industry.

After a three-decade exploration and acquisition blitz, Zijin Mining Group Co. digs up gold, copper and lithium across multiple continents. A state-run company on paper, it has more frequently behaved like a private firm, with relatively few employees and a flexible, risk-tolerant approach to investments that has put it on track to join BHP Group Ltd. this decade among the very top ranks of copper producers.

“In the first ten years, we developed gold and copper at Zijinshan. In the second, we expanded across China. And in the past ten years, we’ve turned to global expansion,” the 66-year-old Chen said at the group’s headquarters in Xiamen, a coastal city some three hours’ drive east of the mine that gave the company its name.

Established Western names like Anglo American Plc limited spending over the past decade after the splurges of the last commodities boom, and most have yet to fully loosen the purse strings — but Zijin and peers like CMOC Group Ltd. have pressed ahead through the sector’s wilderness years. The result is that China, long dominant in refining and smelting, has now been able to dramatically expand its access to mined copper.

Zijin’s production of the metal has more than tripled over the past five years as new operations ramp up in Africa, the Balkans and at home. On an equity basis, it was the sixth-largest copper miner last year.

To a certain extent, the expansion tracks the nation’s broader rise to global growth engine and top commodity consumer. But Zijin is emblematic of a coterie of Chinese companies — both private and state-owned — changing the global metals landscape by generating a wave of mine supply, outpacing others with innovation and billions of dollars of investment, often in less-than-prime locations. China already dominated lithium refining, but has built up a robust lithium supply chain. Nickel too stands transformed.

Chen has previously described Zijin’s position as firmly in “the middle transition zone” between state firms and private rivals.

“They’re the fastest-growing copper miner and they fly a bit under the radar. They’ve ramped up mines internationally very successfully,” said Colin Hamilton, managing director for commodities research at BMO Capital Markets.

“People ask me if China could do in copper what they have done in lithium. The answer is, it’s a lot harder in copper, but a lot of the copper growth in the next few years is coming from places with significant Chinese investments.”

Granted, the blueprint is not as easy to follow as it was, between worsening geopolitical headwinds and a global scramble for critical minerals.

“As a Chinese company, future expansion will be more difficult,” Chen said, sitting back in an armchair in the company’s town-center office. “As investors, we cannot ignore these pressures.”


Resistance to Chinese acquisitions is growing across Western markets, and Canada’s curbs on foreign investment in mining have had particular significance for Zijin. The company has done more than $4 billion worth of deals with Toronto-listed companies since 2015. Even so, its plans to buy 15% of Toronto-listed copper miner Solaris Resources Inc. were scuttled in May, after a lengthy review by the federal government.

Solaris has since said it will relocate its head office to Quito. Zijin says it won’t give up on Canadian targets.

“All of this is quite regrettable,” Chen said, adding miners would feel the absence of Chinese capital. Firms like Zijin, which can take a longer, strategic view on raw material investments, have long been an important funding source for the junior mining sector.

But opportunities for Zijin will still come, he said, even if they emerge from locations where large, blue-chip Western miners still fear to tread.

“In order to have better options, we go to places with the richest resources in the world, even in places with relatively low development levels, or to places that many international mining companies consider problematic,” Chen said. “This is our differentiation.”

Not everything has gone Chen’s way over the past decades. In 2010, the company suffered a serious setback when acid leaked from its copper smelter at Zijinshan into the local river, killing enough fish to feed 72,000 people for a year and causing widespread panic. The toxic leak led to some Zijin and local government officials being charged, and Chen was handed a fine.

It was, Chen says, a mistake made by a young company. The company put up a memorial after the disaster, and marks the occasion annually. Today, he says, standards in some respects exceed those of Western counterparts.

More recently, Zijin has been swept up in US accusations of forced labor use in China’s western Xinjiang region. Its copper-gold unit there was sanctioned by the US in August, a development Chen said he met with “total shock and disbelief”. He said salaries were nearly double the local average, and added the company’s recruitment criteria required employees to be capable and to join of their own accord.

Back at Zijinshan, in the earliest days, Chen’s team sought to find anything more lucrative than the scraps of gold that had been spotted in the area as far back as the Song dynasty, a thousand years earlier.

He led his team into the forest, and toward what turned out to be a major gold lode below the mountain’s peak. Under that, they found copper. Extraction didn’t start until the 1990s, but it turned Zijin into a poster child for Chinese mining.

In Chen’s telling, the experience ultimately defined the company.

“Technology and innovation is our key competitive advantage,” Chen said, a floor-to-ceiling photograph of Zijinshan looming behind him. “We have our own research, design, construction capacity, so our projects can be completed very fast.”

In reality, deals have mattered almost as much, accelerating after a 2003 Hong Kong listing. From 2006 until last year, Zijin spent at least $7 billion on acquisitions, most of them completed overseas and in the past decade. It invested in Glencore Plc’s convertible bond in 2009, a means of gaining information and, the group said at the time, access. It moved into battery metals in 2021, with Argentinian lithium.

“We always know that most of the world’s highest-quality and largest mineral resources are controlled by Western mining companies,” Chen said. “As a latecomer, the opportunities for acquisitions were always going to be relatively difficult.”

Many deals have been small — the biggest to date was Canada’s Nevsun Resources in 2018, snapped up for $1.4 billion in cash. But it’s the early-stage swoops that Zijin stands out for. It’s been enough to ensure the company is worth close to nine times more than it was a decade ago and can credibly target the position of top three copper miner. Output from Zijin’s mines is expected to climb to as much as 1.6 million tons of copper by 2028, up from 1 million last year — hefty, even if that includes some production attributable to other shareholders.

One such risk was a 2015 gamble on Canadian maverick Robert Friedland and his Kamoa project. Then, most of the industry was in debt and this was at best a promising project, tucked away in a remote corner of the Democratic Republic of Congo.

Now it’s one of the world’s biggest. Zijin bought into the mine and took a near-10% stake in Friedland’s Ivanhoe Mines Ltd, later increased. Today, Zijin and Ivanhoe both have a share in the operation of just under 40%.

“He’s been the high bidder for the best assets,” Friedland told Bloomberg. “And that is exactly Warren Buffett’s motto. Warren Buffett said, when I look back at my career, I always made the most money overpaying for the best assets.”

The mine produced almost 394,000 metric tons of copper concentrate in 2023 and Chen said Zijin was considering a pathway toward 1 million tons of annual output — ambitious, given the continued logistics and power supply challenges at Kamoa-Kakula.

“Our biggest regret in terms of M&A is that we didn’t manage to buy all of Ivanhoe at that time,” Chen said. “Robert was not willing.”

Zijin’s copper surge is well timed. The prospect of surging demand, as the energy transition takes hold, has already pushed the red metal to a record earlier this year. Large-scale new mines like Kamoa are rare.

“They are unburdened by the self-imposed constraints that Western mining companies — which are very risk adverse — face,” Friedland said. “It’s difficult to conceive of a future where Zijin doesn’t continue to have world leading growth.”

Read More: Zijin vows to keep investing in Canadian mining despite crackdown