NioBay suspends exploration at James Bay project on First Nation objections
Naimul Karim | March 18, 2022 | 

Lake in Ontario. Stock image.

NioBay Metals (TSXV: NBY; US-OTC: NBYCF) has suspended exploration activities at its James Bay niobium project located in the district of Cochrane on the traditional territory of the Moose Cree First Nation (MCFN) following a survey involving residents of the community in northeastern Ontario.


Results of the survey “indicated an intent to preserve the South Bluff Creek area from any development,” said the company, adding that the MCFN asked to meet with NioBay to talk about “ceasing its permitted exploration.”

“NioBay has repeatedly stated that it would not build a mine without the consent of the MCFN community,” the company said in a press release. “This project is still in the exploration phase and the company does not yet have information as to whether an economic operation may be viable at this location. The company will present the results of its exploration when this information is available.”

The Montreal-based company said that it was suspending all of its exploration activities until a meeting with MCFN is held and that its board of directors was “evaluating all options” available to the company regarding the matter.

NioBay acquired the 25.9-sq.-km. property in 2016 and completed a preliminary economic assessment (PEA) in 2020. In February, the company commenced a 15,000- to 20,000-metre exploration drill program to convert its inferred resources to the indicated category to complete the project’s prefeasibility study.

The PEA evaluated three mining scenarios: open pit, underground and a hybrid of both mining methods. The early-stage study forecast an annual average 5,470 tonnes to 6,283 tonnes of niobium, a metal included in Canada’s list of critical minerals. The study envisions a capital expenditure of $482 to $579 million with a mine life ranging from 23 to 30 years.

At an 8% discount rate, the project would generate a post-tax net present value of C$733 million to C$1 billion and a post-tax internal rate of return of 21.6% to 27.5% using metal prices of $45 per kg niobium. The PEA foresees an all-in- sustaining cost ranging from C$52.93 per tonne of niobium to C$75.08.

The project’s indicated resources total 29.7 million tonnes grading 0.53% niobium for contained metal of 158 million kg. Inferred resources add 33.8 million tonnes grading 0.52% niobium for 177 million kg.

Aside from its James Bay property, NioBay also holds a 72.5% interest in the Crevier niobium project and 47% in the Clairy copper-gold project. Both the early-stage projects are located in Québec.

Following the announcement, the company’s shares fell by C13.5¢ or 43.5%, to C17.5¢. This is the lowest that the company has traded in the last one year, beating its previous low of 26¢. The company has 71.15 million common shares outstanding for a market cap of C$12.47 million.

US unveils battery strategy in West Virginia to ease coal loss
Bloomberg News | March 18, 2022 |

US Secretary of Energy Jennifer Granholm.

Credit: Wikimedia Commons

Energy Secretary Jennifer Granholm and Senator Joe Manchin on Friday announced a program to develop lithium batteries in the U.S. as part of a broader strategy to help Appalachia amid a transition away from coal.


Lithium-based batteries are critical components of electric vehicles, grid storage and weapons, but the U.S. relies on international markets for the processing of most raw materials, according to the Energy Department.


The department is promoting a plan to support a domestic battery supply chain — from critical minerals mining to manufacturing and recycling. The DOE also announced $5 million in funding for pilot projects for workers in communities where energy and automotive industries once held sway.

“American leadership in the global battery supply chain will be based not only on our innovative edge, but also on our skilled workforce of engineers, designers, scientists, and production workers,” Granholm said in a statement. President Joe Biden “has a vision for achieving net zero emissions while creating millions of good paying, union jobs — and DOE’s battery partnerships with labor and industry are key to making that vision a reality.”

As part of the initiative, Energy Department officials, representatives of the AFL-CIO and the United Mine Workers of America and executives of Sparkz Inc., a battery manufacturer that is developing a cobalt-free battery technology in Knoxville, Tenn., met Friday at the West Virginia Regional Technology Park in South Charleston, West Virginia.

The company said in a statement after the meeting it plans to begin construction in 2022 of a “Gigafactory” in West Virginia to commercialize their zero-cobalt battery that will initially employ 350 workers.

Manchin, a West Virginia Democrat and longtime champion of the state’s coal industry, has been a crucial factor in the advancement, or lack of it, of Biden’s economic and climate agenda.

The lithium battery announcement and the meeting were among the events during a listening session held by the Biden administration’s Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization to identify projects to help the 13-state Appalachia region.

“While I remain concerned about our dependence on China and other foreign countries for key parts of the lithium-ion battery supply chain, engaging our strong and capable workforce to manufacture batteries domestically is a critical step toward reducing our reliance on other countries and ensuring we are able to maintain our energy security,” Manchin said in a statement. “I look forward to seeing this initiative grow, and we will continue to work closely together to ensure we can onshore the rest of the battery supply chain.”

On Friday, the administration also announced nearly $215 million in Interior Department funding to clean up abandoned mines in West Virginia, Agriculture Department grants for grid improvements and other projects in coal communities in West Virginia, Pennsylvania, Ohio and Kentucky, and Environmental Protection Agency grants to a West Virginia non-profit for job training and environmental cleanup.

(By Ari Natter)

Canada’s scrambling to fill a massive global fertilizer deficit

Bloomberg News | March 17, 2022 | 

Patience Lake potash mine. Credit: Nutrien Ltd.

Nutrien Ltd. is increasing output of key crop nutrients in the face of a global shortage. But there’s only so much even the world’s largest fertilizer company can do.


The Canadian company said Wednesday it would boost potash production by about 1 million metric tons in 2022 to a total of 15 million tons, with most of the additional volume coming in the second half of the year.

Nutrien won’t be able to go beyond that in 2022 — even if the market is desperate for it, Interim Chief Executive Officer Ken Seitz said in an interview. To increase output, the company is having to place additional mining machines at three sites, while also pushing off some maintenance operations. But the company needs to balance that ramp up with safety considerations, which limits how much they can add to supplies this year, Seitz said.

The company can continue to boost production over the next two or three years, if it’s still needed, he said.

“We are going to be watching the supply side of the equation, and therefore the pace at which we think about our own potash production ramp up as well,” Seitz said.

Nutrien’s bump of 1 million tons this year may not be nearly enough to meet demand. Sanctions on major producers means there could be a shortage. Second-ranked producer Russia may face sanctions due to its invasion of Ukraine, while third-ranked Belarus has already been cut off from global markets. That leaves Canada scrambling to supply agriculture powerhouses like Brazil, the biggest importer. The northern nation already supplies nearly all of the potash used in the U.S.

Nutrien’s move “while sorely needed by the market, does not come close to fixing the supply gap if both Russia and Belarus are sanctioned out of the global potash trade,” said Alexis Maxwell, an analyst for Bloomberg’s Green Markets.

Russia and Belarus together supply about 42% of the $35 billion global potash trade, or some 24 million metric tons annually, Maxwell said.

Nitrogen fertilizer is also being squeezed on concerns over supply from Russia, which was the world’s largest exporter of nitrogen products last year. The price of natural gas, the number one feedstock for most nitrogen fertilizer, is also climbing in Europe, and some producers are cutting back output.

Nutrien is also stretching its nitrogen production, hoping to add a half a million tons of production over the next couple of years from its North American plants, Seitz said. The company has very competitive production costs because of lower natural gas prices in North America, he said.

“We are expanding production as we speak,” Seitz said.

(By Elizabeth Elkin)

Signet shocks diamond trade with refusal to buy Russian gems

Bloomberg News | March 17, 2022

iStock/Stootsy

Signet Jewelers Ltd., the owner of Kay Jewelers and Zales, sent shockwaves through the global diamond trade on Wednesday, telling suppliers it would no longer buy stones mined in Russia, the world’s biggest source of gems.


The move by the largest diamond retailer in the industry’s most important market will create difficulties through the entire global supply chain. In diamond hubs from the Belgian port-city of Antwerp to Mumbai and Dubai, diamonds from different countries are routinely mixed together at almost every stage of cutting, polishing and trading.

Signet’s decision is the latest example of companies going beyond the sanctions imposed by governments as Russia’s invasion of Ukraine raises concerns about a consumer backlash. Russia vies with Botswana as the world’s biggest diamond producer, supplying almost a third of all stones by volume. The U.S. is easily the industry’s most important market, accounting for about half of all sales.

Other big brands are considering similar moves, according to people familiar with the situation who asked not to be identified as the discussions are private.

Signet has gone much further than U.S. President Joe Biden. In a decree on Friday, he announced a ban on the import of Russian diamonds and while that initially caught the industry off guard, the small print showed the ban only impacted rough diamonds.

Very few rough diamonds are shipped to the U.S. Most end up in India — via trading hubs in Belgium and Dubai — where they are cut, polished and set in jewelry before being shipped around the world. Those goods were not impacted by Biden’s decree.

In a memo — seen by Bloomberg News — Signet told suppliers it will stop buying diamonds and precious metals that originate in Russia.

“Signet has therefore halted all trade in precious metals and diamonds that originate from such sanctioned Russian sources, and you are therefore requested to stop supplying the same to Signet even though the country(s) in which you operate may not have imposed sanctions on Russian precious metals and diamonds,” Signet said in the memo.

Chief Executive Officer Gina Drosos said the request to shun the Russian market is in line with Signet’s years-long effort to ensure the company is sourcing its diamonds and gemstones in an ethical way, a process that includes audits.

“It’s not a shockwave through our vendor community for us to ask them to partner with us to not use Russian diamonds that are sourced after this conflict began,” Drosos said in an interview after the release of the company’s quarterly earnings on Thursday. “They get that.”

The CEO said the majority of Signet’s diamonds by value come from southern Africa, Australia and Canada. The company hasn’t seen a significant impact on the price of diamonds originating in those countries since Russia’s invasion of Ukraine, she said.

While less well known than De Beers, Russia’s Alrosa PJSC produces about the same amount of gems as the iconic diamond company that had a monopoly until the start of this century.

The ban threatens to upend supply chains, but Signet has added caveats to stop an immediate crunch. In the memo, the company said its block applies to goods purchased after Feb. 24, the date Russia invaded Ukraine. The diamond industry has a long supply chain, with many months between buying rough stones to finally handing over finished goods to retailers.

The impact of Signet’s move will likely have ripple effects across the industry. More than a million people work in India’s diamond manufacturing industry and mining the stones is crucial to the economies of countries such as Botswana and Lesotho.

The diamond industry’s ability to satisfy Signet’s demand is also in question. While rough diamonds are issued Kimberley Process certificates — designed to end the sale of blood diamonds that financed wars in the 1990s — that show their origin, these are often replaced in trading centers with “mixed origin” certificates when parcels of stones are mingled.

Very few diamonds remain in one company’s custody through the entire supply chain. Most are cut, polished, manufactured and then set in jewelry by different companies and often traded in between each step. Diamonds are routinely mixed into parcels of similar sizes and qualities throughout this process making origin tracking almost impossible in many cases.

Some in the diamond midstream — which is dominated by private family-run businesses — are already planning on separating supply chains, according to people familiar with their thinking. Russian diamonds, which can still be bought using euros, will be channeled toward Chinese or Indian markets rather than the West.

There are some nascent programs introduced by the industry, such as De Beers’s Tracr program, that track origins. They may work for high-value diamonds, such as those that sell for tens of thousands of dollars in a Tiffany & Co. shop, but are hard to replicate for the millions of small stones that most of the industry works with.

(By Thomas Biesheuvel and Jeannette Neumann)

LONDON METALS EXCHANGE

LME rips up its free-market rule-book to tame wild metals

Reuters | March 17, 2022 |

The LME said the committee was likely to include representatives of nine companies.

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


You can tell the London Metal Exchange (LME) is new to price limits.

The venerable 145-year-old institution’s first attempt to restart its broken nickel market was over in chaotic minutes on Wednesday as the price immediately fell to – and briefly through – the lower 5% daily limit at $45,590 per tonne.

Thursday’s restart with a widened 8% price band also misfired.

The LMESelect electronic trading platform evidently hasn’t read the memos and keeps allowing small numbers of trades to be executed outside of the new limits.

These trades have been cancelled as were those booked on the March 8 melt-up prior to the market being suspended.

The system’s inability to react to the new trading reality is symptomatic of the tectonic upheaval playing out in the forum for global metals pricing.

The LME has for years epitomised the United Kingdom’s light-touch regulation of its financial services sector but a history of last-minute intervention in disorderly markets looks to be over. The last few days have brought time-spread caps, daily price limits and cancelled contracts.

This is in part due to the LME’s own dysfunction. The nickel crisis has exposed fundamental flaws in the exchange’s regulatory scope.

But it is also because industrial metal markets have turned ever wilder since the start of 2021. The LME may be a damaged lens right now but it is showing up an equally dysfunctional metals market.

Blind-sided

The nature of the short squeeze in nickel – a margin meltdown as China’s Tsingshan Group tried to collateralise its huge short positions – has exposed two regulatory blind spots.

The LME has come in for understandable criticism that it waited too long to suspend the nickel market. The exchange’s compliance department, which has unique insight into trading flows, should surely have seen that something ugly was brewing.

But the LME can only track what it sees. Exchange flows are but the tip of a much bigger metals pricing pyramid, most of it trading over-the-counter (OTC) between producers, merchants, banks and users.

The price risk embedded in often bespoke contracts is channeled to the LME via banks and brokers, who net off differing positions as much as they can before trading any residual risk in the LME system.

What the LME compliance department gets to see is a risk landscape that has been distilled multiple times. Perfect vision on a very narrow screen.

The LME has pointedly noted that “the widely reported large short positions (originated) primarily from the OTC market”. If Tsingshan was sitting in the OTC shadows, the sheer size of its short position may not have been obvious at all.

Nor would any parallel OTC trading strategy. Lost in the media frenzy around Tsingshan and its ebullient owner Xiang Guangda was a March 7 announcement by Zhejiang Huayou Cobalt, Tsingshan’s industrial partner, that it too is facing losses on its nickel positions.

Short sighted

The LME’s difficulties in discerning the true state of positional play have been confounded by a rule-book that interprets market abuse exclusively through the prism of dominant long positions and their ability to squeeze cash metal availability.

Alan Whiting, the executive director of the UK Treasury’s regulation and compliance department, wrote the LME rule-book and even he conceded in 1998 that “while the exchange does not seek to favour shorts, backwardation limits do penalise longs, whereas there is currently no equivalent financial penalty on the misuse of dominant short positions.” (“Market Aberrations: The Way Forward”, October 1998)

The LME explored the possibility of imposing penal margins on dominant shorts but that would require a determination of when a short position is “abusive”, a semantic and regulatory dead-end.

The nickel market’s independent decision to impose its own penal margins on Tsingshan, the trigger for this whole sorry saga, underlines the regulatory dilemma of how to handle a big commodity short position held by a big industry player.

Wild metals

Nickel’s breakdown is intricately tied up with the current crisis in Ukraine, specifically concern around the continued supply of Russian metal to the European physical and LME storage markets.

The exchange cited “geo-political news flow” as one reason for its decision to suspend the contract and what Russia calls its “special operation” in Ukraine is undoubtedly one reason all six core LME contracts are now in special measures.

But Doctor Copper turned wild in October last year, forcing the LME to intervene in its flagship metals contract as available stocks fell to just 14,150 tonnes.

Tin spreads had already gone stratospheric at the start of 2021, the cash premium flexing out to an extraordinary $6,500 per tonne.

Indeed, measured by time-spread turbulence, every LME metal has become much more unstable since the pandemic as global supply-chains have buckled.

Metals such as tin are now pricing in genuine supply scarcity. LME tin took some collateral damage from the nickel suspension, tumbling 21% on March 9. But at a current $41,680 it would still be off any historical chart.

If you believe Goldman Sachs, copper is also heading for scarcity as government spending on green infrastructure accelerates pandemic recovery.

Look beyond the LME and both lithium and cobalt prices have also been on a tear as a rapidly expanding battery supply chain stocks up. Indeed, it was the battery pull on LME nickel stocks that laid the foundations for the short squeeze.

There has been a lot of talk about a metals supercycle and it was starting to take tangible form even before markets had to factor in the possible loss, or at least diversion, of Russian supply.

Higher demand means higher prices and they come with higher volatility.

The LME’s history of laissez-faire regulation rested on an assumption that markets could efficiently be left to price themselves barring the occasional “aberration” requiring intervention.

The synchronised price turbulence across all six base metal contracts challenges that assumption to the core.

That’s why the LME has ripped up the old rule-book. Changed metal markets need a change in rules.

There are some who think it might be time to rip up the LME after last week’s rolling fiasco but the underlying pricing risk won’t go away. Indeed, if the last year is a taster of the metals cycle to come, it’s only going to increase.

(Editing by Kirsten Donovan)

Nickel, the devil’s metal with a history of bad behaviour

Reuters | March 10, 2022 | 

The sky in the smoke from the chimneys of Norilsk Nickel plant. (Stock Image)

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


The global nickel market is in a pricing black-out.

The London Metal Exchange (LME) three-month nickel price sits in suspended animation at $48,048 per tonne, Monday’s closing price and the last trade with even a semblance of legitimacy.

Tuesday’s mayhem and the resulting decision by the LME to suspend all trading has frozen what is the core reference price for the global supply chain stretching from miners to stainless steel mills and electric vehicle battery makers.

China is also in black-out. The Shanghai Futures Exchange has suspended trading until Friday.

Today there is no global nickel trading and no price formation.

Related Article: Nickel price spike “purely financial” but Tsingshan effect could linger

It’s a truly shocking outcome but not without precedent.

When German miners first discovered nickel in the fifteenth century, they called it Kupfernickel, or “Old Nick’s Copper”, and it has had a history of devilish behaviour ever since the LME launched the contract in 1979.

The underlying cause of the repeated market disorder has never changed.

Ghosts of crisis past

“The LME contract has been criticised as illiquid, unrepresentative, open to manipulation and volatile”.

Hard to disagree given this week’s extraordinary events but those words were written in 1992 by a former colleague, Simon Clow.

The criticism came hot on the heels of what at the time was known as the nickel crisis of 1988.

On Friday Feb. 25 of that year the LME official ring descended into chaos as one house bid up the cash price from $10,000 per tonne to $15,000 per tonne with not a single offer. The cut and thrust of open outcry came perilously close to physical fisticuffs.

By the standards of the time, the liquidity vacuum and price acceleration were just as shocking as Tuesday’s explosion to $101,365 per tonne.

Ring-trading was suspended for the first afternoon session, which at the time amounted to halting the market, while the LME board held an emergency meeting.

A daily backwardation limit of $150 per tonne was imposed as a condition for trading resuming on the second afternoon ring session. The official ring price was scrubbed on the convenient basis that it had not actually traded.

Fast forward to 2007 and the LME had another nickel crisis on its hands. The year stands out as the previous all-time nickel price high – $51,800 per tonne – but that peak coincided with a ferocious squeeze on cash positions.

The pain for short position-holders became so acute the LME had to change its lending rules, categorising several small dominant long positions as a single entity.

A generous view was that the exchange was forcing affordable liquidity across its raging time-spreads. A less generous interpretation was that it had detected collusion among key players.

Here we are again. Time-spread pain. Extreme volatility. Shorts who can’t cover. And another broken nickel market.
Stand and deliver?

The common theme running through all three crises is one of low exchange stocks and the difficulties facing even some of the largest nickel players in delivering physical metal against LME short positions.

Physically-deliverable contracts such as the LME’s are where paper price meets real-world price and wild outcomes around settlement dates are far from rare – think back to April 2020 when front-month WTI oil settled at a negative $37.63 per barrel.

Settlement stress, however, is compounded on the LME by a rolling daily prompt date structure, which can translate into daily premium pain for a short unable to deliver physical metal as an exit route.

And nickel has delivery issues which are all its own.

“Part of the problem, critics say, is linked to the structure of the contract,” Clow wrote in 1992, explaining, “only a minority of the nickel produced every year is deliverable against the LME contract (…) LME stocks represent only a small percentage of worldwide production.”

That is as true today as it was back then.

Only Class I nickel, defined as nickel with greater than 99.8% purity, is deliverable against the LME contract.

Nickel comes in multiple forms and guises – nickel pig iron, nickel matte, ferronickel, nickel sulphate – all of which need to be price-hedged on the LME but none of which can be delivered.

The Shanghai market is no different. If anything it’s more restrictive due to the limited number of registered non-Chinese brands.

Nickel is a small market by comparison with other base metals with global consumption of around 2.77 million tonnes last year, according to the International Nickel Study Group.

Less than half of that is exchange-deliverable and the ratio is shrinking all the time.
Broken pricing

Indonesia, the world’s driver of primary production growth, doesn’t produce nickel in Class I form.

Tsingshan, the Chinese company at the epicentre of the current storm, has massive nickel capacity in Indonesia but its metal is either flowing directly into its stainless steel meltshops or being converted into intermediate products for shipment to Chinese battery makers. None of it is Class 1.

Whatever the mix of price hedging and speculative overlay in the company’s positioning, the short play ultimately had no physical delivery escape path.

Others may have fallen through the same price-delivery gap. The LME’s latest positioning report shows four significant short-position holders on the main March prompt date. If those are hedges against anything other than Class I, the owners are in the same pickle.

Nickel’s deliverability issue has dogged the LME contract since launch. There was intense industry discussion in the 1990s about the disconnect between exchange and supply-chain pricing.

But finding good-delivery criteria for a highly variable product such as ferronickel, which can grade between 20% and 40% with a wide spectrum of iron content, proved impossible.

The stainless steel sector, historically the largest user of nickel, evolved a surcharge system to try and mitigate and pass through nickel’s price volatility, but at the occasional cost of generating an echo-effect in the stainless stocking cycle.

Nickel sulphate, a fast-growing process stream which is destined for battery makers but is also not exchange deliverable, opens up another potential rift in the pricing landscape.

The London Metal Exchange is facing a lot of pressure to think harder about how it manages markets such as nickel after this week’s chaos.

But the nickel market also needs to think a lot harder about how it wants to handle its pricing risk.

(Editing by Elaine Hardcastle)

The $140 billion question: Can Russia sell its huge gold pile?

Bloomberg News | March 16, 2022 

The Kremlin Palace (Stock Image)

Russia spent years building a giant stash of gold, an asset that central banks can turn to during a crisis. But any attempt to sell it will now be a challenge just when it’s needed most.


Bank of Russia expanded its gold reserves almost sixfold since the mid-2000s, creating the world’s fifth-biggest stockpile that’s valued at about $140 billion. It’s the type of asset it could sell to shore up the ruble, which has plunged as global economies isolate Russia following its invasion of Ukraine.

Doing so will be difficult. Sanctions forbid US, UK and European Union institutions from doing business with Russia’s central bank. Traders and banks are wary of buying the country’s bullion indirectly or using other currencies out of fear of reputational damage or falling foul of penalties. And senators in Washington want secondary sanctions on anyone buying or selling Russian gold.

“This is why they bought their gold, it was for a situation just like this,” said Fergal O’Connor, a lecturer at Cork University Business School. “But if no one will trade it with you, it doesn’t matter.”

Moscow may need to look east to central banks in nations like India or China to sell gold or secure loans using it, according to CPM Group Managing Partner Jeff Christian, who has followed precious metals since the 1970s.

“They could pick it up at a discount to the market,” Christian said in an interview from New York. Russia could also sell via the Shanghai Gold Exchange, where it has commercial banks as members, though any sales would likely be small, he said.

Still, a move by a bipartisan group of US senators to further hinder gold transactions may deter banks in places like China and India from buying or lending against Russia’s bullion — and Beijing wants to avoid being impacted by US sanctions over the war. That’s further reducing Russia’s options.

The Bank of Russia didn’t reply to a request for comment.
Gold attempts

In another example of how the West is targeting Russia’s gold trade, the London Bullion Market Association and the CME Group Inc. suspended the country’s refineries from their accredited lists, amounting to a ban on new Russian bars entering the key London and U.S. markets.

The LBMA’s suspension of refineries has restricted countries’ access to the market before. After it suspended Kyrgyzstan’s state refinery last year, the country had to ask Switzerland if one of its refineries could process Kyrgyz gold for its central bank so that it could be accepted on the global market, said people familiar with the matter who asked not to be identified.

At least one Swiss refinery declined to do so on worries of being penalized by the LBMA, one of the people said. The Kyrgyz central bank didn’t specifically comment on the matter.
Related: Gold prices fall despite ongoing war and surging inflation

Other countries have also turned to gold, or tried to, when facing sanctions. Dictator Moammar Qaddafi sold a share of Libya’s reserves to pay troops during an uprising, according to former central bank Governor Farhat Bengdara. And a U.S. indictment against Turkey’s Halkbank in 2019 described how Iranian funds there were converted to gold, exported to Dubai and then sold for cash.

Venezuela has fought to access its gold stored in the Bank of England’s vaults as the UK recognized opposition leader Juan Guaido as president. The BOE is a popular place for central banks to keep their bullion due to its location within the London market.

Former President Hugo Chavez had already repatriated much of Venezuela’s gold. Bank of Russia’s gold is stored domestically, according to its 2020 annual report.


If Russia gets desperate, it could sell bullion domestically to buy rubles, Citigroup Inc. said. If done at a fixed price, that would be tantamount to an internal gold standard.

“If things get worse, you could basically re-anchor to a pile of gold,” Credit Suisse Group AG strategist Zoltan Pozsar said on Bloomberg’s Odd Lots podcast. “You need an anchor in situations like this.”

(By Eddie Spence, with assistance from Greg Ritchie, Yvonne Yue Li, Tracy Alloway, Joe Weisenthal, Nariman Gizitdinov and Áine Quinn)

THE BOLSHEVIKS CAPTURED AND MAINTAINED THE TZARS GOLD STASH THEY WENT ONTO HOLD THE SPAINISH GOVERNMENT GOLD SUPPLY DURING THE SPANISH CIVIL WAR, THEY NEVER RETURNED IT. THEY LOOTED THE TREASURIES OF EASTERN EUROPE OF THEIR GOLD AFTER WWII

Carbon-neutral biosurfactants may help boost mineral extraction from low-grade ores
Staff Writer | March 17, 2022 | 

Copper ore. (Reference image by James St. John, Flickr).

Cleantech company Locus Fermentation Solutions announced the launching of a new mining operating division whose focus will be on developing and commercializing carbon-neutral biosurfactant additives to boost mineral extraction from low-grade ores.


Biosurfactants are compounds of ​​microbial origin that lower the surface tension between two liquids, between a gas and a liquid, or between a liquid and a solid. Thus, they may act as detergents, wetting agents, emulsifiers, foaming agents, or dispersants.

In a press release, LFS said its biosurfactant technology shows potential as an effective, environmentally friendly solution for extracting essential minerals needed to fuel the green energy revolution.

(Graph provided by Locus Mining Solutions).

According to the US-based firm, when tested in traditional copper extraction processes, its renewable biosurfactant additives resulted in 138% more acid-insoluble copper recovered and 28% better performance than sulfuric acid.

The technology also allowed for a 40% reduction in carbon dioxide emissions, while also lowering sulphur oxide-associated emissions by 70% and nitrogen oxide-associated emissions by 70%.

“The world’s growing reliance on minerals and metals in the transition to a clean energy future is exceeding current extraction capabilities creating an imperative need for sustainable technologies that can reach trapped resources,” Andrew Lefkowitz, co-founder of Locus FS, said in the media brief.

“Our zero-carbon biosurfactants have an unmatched ability to reach and extract more natural resources. We’re addressing critical environmental and economic concerns to transform the industry, reduce environmental impact and support economic growth in the US.”

Energy traders lobby for urgent funds to avoid liquidity crisis

Bloomberg News | March 16, 2022 

Image: Shell

Europe’s energy traders are lobbying central banks and governments for urgent funding as the industry faces cash-calls running into the billions of dollars due to soaring commodity prices.


The European Federation of Energy Traders is petitioning for “emergency funding mechanisms” in order to prevent some traders from experiencing liquidity problems that could lead to financial contagion, according to a letter viewed by Bloomberg. Members of the industry group include Shell Plc, TotalEnergies SE, Vitol Group and Mercuria Energy Group Ltd. among others.


“Since the end of February 2022, an already challenging situation has worsened and more energy market participants are in a position where their ability to source additional liquidity is severely reduced or, in some cases, exhausted,” according to the letter.

The EFET didn’t immediately respond to a request for comment.

Prices of commodities from grains and metals to natural gas and oil have jumped at an unprecedented rate as Russia’s invasion of Ukraine set off a scramble to source alternatives to one of the world’s top raw-materials producers. In these circumstances margin calls — demands to deposit additional funds with brokers and exchanges to cover part of the value of commodities contracts — have become a major drain on traders’ cash reserves.

The shock and its potential to impact outside the commodities sector was highlighted in the market for nickel, where prices rose so sharply they triggered margin calls larger than some brokers on the London Metal Exchange would have been able to pay. The exchange canceled a day’s nickel trades and halted transactions on its contract to prevent effective defaults, Chief Executive Officer Matt Chamberlain said at the time.

“Market participants, clearing members and clearing houses are currently encountering major challenges in managing the impact of the current geopolitical situation,” according to the letter. “Massive price movements on European energy exchange markets have resulted in massively increased margin requirements for market participants.”

The Financial Times was first to report the letter on Thursday.

(By Archie Hunter)

BAD CANADIAN MINER TOO

Barrick’s Tanzania gold mine hit by new police abuse accusations
Bloomberg News | March 16, 2022 

The North Mara gold mine is one of the three operations Barrick has in Tanzania. 

(Image courtesy of Twiga Minerals | Instagram.)

A corporate watchdog is alleging that local police are killing and assaulting villagers around a Tanzanian mine owned by Barrick Gold Corp. The Canadian miner denies that it is responsible for police conduct.


UK-based RAID said in a report that since 2019, when Barrick took operational control of the North Mara mine, at least four people have been killed and seven others seriously injured by local police, sometimes after villagers enter the site in search of waste rock. A lawsuit over assaults that occurred before 2019 is going before a British court this week.

RAID’s fresh allegations, which follow the group’s interviews with more than 90 people over the past 28 months, underscore the challenges to mining industry efforts to overhaul its relations with local communities at a time of rising investor scrutiny on environmental and social issues.

“Barrick’s board and investors should ensure an end to the mine’s relationship with the police and set up a truly credible and independent investigation into the abuses,” said RAID executive director Anneke Van Woudenberg.

The report alleges the company has ties to police, including a memorandum of understanding that includes paying and equipping officers assigned to provide security for the mine. But Barrick said that the RAID report was misleading, and that local police operate independently while hired security within the mine site is performed by unarmed employees of a local company.

“The mine is obviously not responsible for their conduct,” Barrick said in an emailed response, referring to the local police force.

The company said the government has agreed to provide human rights training to all officers serving in the area, and added that if RAID has “any evidence of the deaths and injuries it alleges, it should bring this to the attention of the Tanzanian attorney general without delay.”

Barrick subsidiaries are due in a British court on March 17 to face allegations of unlawful killings and assaults at the mine between 2014 and 2019. The claimants include the family of a nine-year-old girl killed by a mine vehicle driven by police, and four women who were fired upon while gathering around her body. Barrick’s subsidiaries deny liability.

In December, Barrick said it had “radically repaired” community relations and established clear boundaries with local police at the North Mara mine after taking operational control from its subsidiary Acacia Mining in 2019.

Barrick cited “significant progress made with regards to environmental, community and security aspects,” including three independent audits that recognized improvements.

According to a Bloomberg analysis of environmental, social and governance data, the Canadian firm’s overall social score is below its peer-group average. However, the company ranks above average in the community rights and relations subcategory.

(By James Attwood)

BAD CANADIAN MINER

Canadian firm aims to double potash output in project near Brazil indigenous lands

Reuters | March 15, 2022 | 

Image courtesy of Brazil Potash Corp.

A Canadian-owned company has proposed doubling planned output of potash from a deposit in Brazil’s Amazon to reduce the agricultural powerhouse’s dependence on fertilizer imports disrupted by the Ukraine war.


Brazil Potash Corp said on Tuesday that its executives met with Brazilian Agriculture Minister Tereza Cristina Dias in Ottawa and discussed increasing from 2.44 million tonnes to over 5 million tonnes per year the output from its Autazes project.

That could cover almost half of Brazil’s need for potash, a key fertilizer. However, the company said it would take at least three years to come on stream once licensing has been obtained.

Brazil Potash owner, investment bank Forbes & Manhattan, whose chairman Stan Bharti met with Dias on Sunday, has been trying to develop the Autazes deposit for more than five years, but the project has been held up by environmental concerns.

Prosecutors recommended in 2016 suspending the license to develop Autazes because the Mura indigenous tribe had not been consulted, in violation of Brazil’s constitution.

Brazil depends on imports for 95% of its potash and is a major buyer from top suppliers Canada, Russia and Belarus. Last year, Brazil imported some 10 million tonnes.

About 30% of global potash supply has been taken out of the market due to the inability of Russian and Belarus producers to export.

“Our view is that the sanctions placed on Russia and Belarus are not going to be short-lived,” Brazil Potash said in a statement sent to Reuters.

As potash prices tripled last year and geopolitical risks threatening supplies from Eastern Europe deepened, interest has grown in Brazil in the Autazes project.

Brazil’s right-wing President Jair Bolsonaro has said Brazil needs to mine the deposit soon and has pushed for a law that would allow mining on indigenous reservations.

The company says the mine would have minor environmental impact. Salt separated from the potash at a surface processing plant would be returned underground, according to plans.

The Mura worry that it will pollute the rivers and scare away game and fish on which they depend.

(By Anthony Boadle and Ernest Scheyder; Editing by Cynthia Osterman)