Novo sells New Found Gold stake to Sprott for $100 million

Staff Writer | April 12, 2022 

Gander River, Newfoundland (Credit: Wikimedia Commons)

Western Australia-focused gold producer Novo Resources (TSX: NVO) has agreed to sell its entire stake in New Found Gold, consisting of 15 million shares or about 9% of NFG’s share capital, to a corporation controlled by Canadian mining investor Eric Sprott.


Pursuant to arm’s-length negotiations, Novo will receive total consideration of C$125.9 million (about $100m), representing a 9.3% premium to NFG’s stock price of C$7.68 as of market close on April 11, 2022.

The share sale will be conducted in two tranches. The first tranche will consist of 8.25 million NFG shares priced at C$8.35 for gross proceeds of C$68.9 million, and is scheduled for completion on April 27. The second tranche totals 6.75 million NFG shares priced at C$8.45 for gross proceeds of C$57 million, and is scheduled to settle on August 5.

Proceeds of the NFG share sale will be used by Novo to advance its exploration efforts across the Pilbara and Victoria, and to expedite a feasibility study on the Fresh component of its Beatons Creek project in Nullagine, Western Australia.

“Novo has always considered its sizeable investment portfolio as a means to fund growth expenditure,” Mike Spreadborough, executive co-chairman of Novo, said in a news release.

“The sale of our New Found holding at a premium of 9.3% to the closing price of C$7.68 is an excellent result and allows Novo to deleverage our balance sheet, continue to focus on optimizing operations at Beatons Creek, and aggressively accelerate growth and expansion plans across Western Australia and Victoria.”

The transaction will also free Novo of its debt with Sprott Private Resource Lending II, allowing it to repay its C$50.5 million ($40m) senior secured credit facility with Sprott upon completion.

For Sprott, his shareholding in NFG will expand to 51.6 million common shares, or 31.4% of the its outstanding shares, once the transaction is completed.

NFG’s flagship asset is the 100%-owned Queensway project located 15 kilometres west of Gander, Newfoundland, where it is currently conducting a 400,000-metre drilling campaign.

American, UK companies join forces to develop largest uranium prospect in Argentina

Staff Writer | April 12, 2022

Central Plateau Project area. (Image courtesy of UrAmerica).

Evolution Metals announced this week that it has acquired a significant position in UrAmerica, the owner of the largest prospective uranium deposit in Argentina.


UrAmerica controls 59 exploration permits and mining concessions, either wholly-owned or through JV agreements, covering over 221,000 hectares across the central plateau of Argentina’s province of Chubut. These assets include the Central Plateau Project (CPP), which encompasses 145,000 hectares and is the largest and highest grade sedimentary hosted uranium deposit in Argentina.

In a press release, Evolution and UrAmerica said that in-situ resources, including lithium and heavy rare earth elements, have been identified within multiple sites, including the CPP. The companies believe that such resources may be commercially viable and complement uranium operations.

“This is one major step in Evolution’s vertical integration plan for critical metals production,” David Wilcox, Evolution Metals’ chief executive officer, said in the media brief.

“America is mineral insecure and we are doing our part to change that reality. Industry leaders, including Elon Musk, have publicly remarked on the importance of this issue. Evolution and UrAmerica are positioned to have a positive impact on energy transformation materials’ dependencies.”

Wilcox pointed out that the recent transaction represents the first known American investment in Argentina’s nuclear power sector, which has traditionally been dominated by Russia and China.

“The announcement comes only months after a renewed commitment between the government of Argentina and Chinese state-owned China National Nuclear Corporation for the development of the Atucha 3 nuclear power plant in Lima, Argentina,” the release reads.

Western Australia is world’s new top mining destination

Cecilia Jamasmie | April 11, 2022 

Western Australia has some of the world’s largest iron ore mines and it also hosts gold and lithium assets. (Stock image of the Super Pit in Kalgoorlie.)

Resource-rich Western Australia has been picked the most attractive region for mining investment in 2021, replacing the US state of Nevada, which fell to the third place in the latest annual survey of mining companies released by think-tank the Fraser Institute.


Canada’s Saskatchewan is still on the podium, climbing from a third place overall in 2020 to a second position in the 2021 index, which takes both mineral and policy perception into consideration.

Nevada, which topped the 2020 ranking, ranked third last year, followed by Alaska, Arizona, Quebec, Idaho, Morocco, Yukon, and South Australia.

The US was the country with the most jurisdictions considered among the world’s 10 most attractive by mining investors — Nevada, Alaska, Arizona and Idaho. Canada followed closely with three provinces at the top of the index — Saskatchewan, Quebec and the Yukon. Australia only had two states among the best ten destinations — Western Australia and Southern Australia.

Source: Fraser Institute’s Annual Survey of Mining Companies 2021.

As in previous years, the best places to invest in mining are located in developed countries with long histories of success in the industry, which not necessarily is a good thing.

The main issue is that the number of available projects in the top jurisdictions are limited, while some of the world’s best deposits are in places where doing business is, or is perceived as, risky.

Zimbabwe, which has an abundance of resources including gold, platinum, diamonds, lithium, chrome, and coal, ranked as the least attractive jurisdiction in the world for investment followed by Spain, the Democratic Republic of Congo (DRC) and Mali.

Also in the bottom ten, beginning with the worst, are Nicaragua, China, Panama, Argentina’s Mendoza, Venezuela and South Africa.

Permit times

The survey also included a sub-ranking of exploration jurisdictions, based on the length of their permitting process.

This year’s report went beyond Canada, gathering data from Australia, the US and Scandinavia, all regions where mining, environmental and other policies are broadly comparable.

In most Canadian provinces and territories, the majority respondents said they were able to acquire the necessary exploration permits within six months. There were some notable differences among regions, particularly when comparing Manitoba, where 42% of participants said it took them 24 months or more to obtain all necessary permits, versus British Columbia, where the majority said it took between three and six months.

“Overall, senior mining executives continue to cite the uncertainty around protected areas, disputed land claims, and environmental regulations as major areas of concern for Canadian provinces and territories,” said Elmira Aliakbari, director of the Fraser Institute’s Centre for Natural Resource Studies and co-author of the study.

“Policymakers in every province and territory should understand that mineral deposits alone are not enough to attract investment,” Aliakbari said.

Quebec performed the best, with 60% of respondents indicated that they received exploration permits in two months or less. When comparing the four regions included in the survey — Canada, the United States, Australia, and Scandinavia — Canadian jurisdictions have, on average, a higher percentage of respondents indicating that it took six months or less for them to receive their permits.

Newmont becomes sole owner of Yanacocha gold mine in Peru

Cecilia Jamasmie | April 12, 2022 

Yanacocha mine, in Peru’s northern Cajamarca region. (Image courtesy of Newmont.)

Newmont (NYSE: NEM) (TSX: NGT), the world’s no. 1 gold miner by output, is buying Sumitomo Corp’s 5% stake in the Yanacocha mine in Peru for $48 million.


The deal makes of the Denver, Colorado-based company the sole owner and operator of the vast gold mine, located in northern Peru’s Cajamarca region.

Newmont had announced in February that it was acquiring partner Buenaventura’s 43.65% interest in Yanacocha, in a transaction valued at $300 million.

Buying Buenaventura’s and Sumitomo’s stakes in the asset is consistent with Newmont’s district consolidation strategy, the company said.

Yanacocha is South America’s largest gold mine, producing about 350,000 ounces of the precious metal a year. The company is advancing a feasibility study for what it calls the “Yanacocha sulphides” project, which would extend the mine life beyond 2040.

As the oxide resources of the open pit Yanacocha mine are close to being depleted, the project is designed to continue mining sulfide material underground.

The first phase focuses on developing the Yanacocha Verde and Chaquicocha deposits to extend operations beyond 2040. The second and third phases, Palmer said, have the potential to extend the mine life for “multiple decades.”

One of Peru’s top mining projects

Newmont had said the sulfides project is one of the most important ones planned in Peru for the next five years.

“We’ve been in Peru for 30 years. The Yanacocha Sulphides project will ultimately position us to be in Peru for at least another 30 or 40 years,” chief executive Tom Palmer said in an investors update last year.

The company says Yanacocha has provided over $1 billion in environmental and social responsibility projects since it started operations in the 1990s.

About two-thirds of the mine’s revenue is ploughed back into the local economy in wages, taxes, goods and services, as the operation employs 1,400 workers directly and supports a further 40,000 Peruvian jobs. Two-thirds of workers at the mine are residents of Cajamarca.

Guinea junta turns up the heat on bauxite miners

Henry Lazenby | April 12, 2022 | 

Bauxite, aluminium hydroxide. (Photo by JJ Harrison, Wikimedia Commons).

The military junta that took control of Guinea in September is heaping pressure on multinational miners to refine raw bauxite, a raw material used to make aluminium, to more advanced materials before export.


In a recent research note released by CRU Group’s senior analyst, Anthony Everiss, the junta has asked the companies to present the mines ministry with proposals by the end of May with a precise timetable for constructing refineries. The junta appears to be doubling down, turning the nation’s mineral wealth into a means of economic development.

Bauxite miners in Guinea have reportedly previously committed to developing them.

According to CRU data, the announcement comes when Guinea bauxite shipments to China are at an all-time high, surpassing 6 million tonnes in a single month for the first time.

However, there is currently just one alumina refinery in operation, which was built several decades ago.

Everiss said the drive for value-added investment has been in place for some time and has always been a common theme when international mining companies, industry partners, and government officials gather at the annual Guinea Mining Symposium.

However, Everiss noted this recent announcement might have more significant rhetoric as it was the first time Guinea’s junta had shown its hand and was the strongest sign of intent yet that the new military regime was determined to pursue a policy of resource nationalism.

“The message to the international mining community in recent times is that Guinea is now much more aware of the value of their resources, has better control and understanding of the mining industry and exports, and would be ensuring a more equitable share of the revenue and profits from international mining endeavours. This was coupled with a focus on social inclusion, agriculture, infrastructure spending and sustainability,” said Everiss.

CRU currently does not expect a greenfield alumina refinery to be built in the country before 2026. “Technical limitations alongside higher capital costs versus China may lead to disappointment for the government’s expectations. Running costs also are likely higher than competing nations,” said Everiss.

According to CRU, six companies have planned 11 million tonnes per year of alumina refining capacity in Guinea. “However, unlike the significant progress in bauxite mining, the progress of the alumina refineries is very slow at present. Only SMB’s alumina project has made some progress,” said Everiss.

CRU notes, however, that significant hurdles remained when it came to building greenfields alumina refineries in the country, namely that inputs such as all the other raw material needs, such as energy and caustic soda, need to be imported.

“The key issue is whether the projects can control the other raw material costs. Compared to Indonesia, for example, the mining cost in Guinea is lower. But Guinea refineries also contend with a longer distance if opting to transport the alumina back to China,” said Everiss.

“Nevertheless, new permits for mining will need to be accompanied by a clear investment plan for a downstream plant, depending on the scale of the project. In bauxite, the ruling military regime had remained firmly committed to continuing resource mining and export, but now requires ‘partnership’ with industry for longevity.”

“The latest announcement shows that it will be increasingly important for mining companies to build on verbal commitments and set into motion the actions needed to construct alumina refineries, rail, roads, and port infrastructure, alongside community spending,” said Everiss.

Barrick bets big on Pakistan with $7 billion copper mine project

Bloomberg News | April 12, 2022 |

The Reko Diq deposit is located in the Balochistan province, whose landscape is pictured here. (Image by Michael Foley, Flickr)

Barrick Gold Corp.’s first crack at building a copper mine in Pakistan was thwarted when the government denied it permits. A decade later, the company is making another — much bolder — attempt.


The Toronto-based miner laid out revised plans Tuesday for developing the giant Reko Diq copper-gold deposit in a desert region close to the borders of Iran and Afghanistan. Barrick shares rose 0.7% to C$32.33 at 2:05 p.m. in Toronto.


The conceptual design calls for the $7 billion project to be built in two phases, with each able to process about 40 million metric tons of ore a year and production starting as soon as 2027, Barrick said in a presentation on its website. The latest plan is double the annual throughput capacity and more than twice the investment estimated in a 2010 feasibility study.

Barrick is increasing bets on Pakistan while its Chilean partner, Antofagasta Plc, exists the project in preference for safer and closer jurisdictions in the Americas.

Among Barrick’s reasons are juicy returns: annual production of about 200,000 tons of copper would start just as the world faces a shortfall of a commodity that’s key to the the clean-energy transition, given how much is used in electric vehicles and renewable energy.

In addition, mines are getting trickier and pricer to build throughout the world with political risk on the rise, even in traditionally safer nations like Chile and Peru. As a result, Pakistan looks relatively less risky, just as a new centrist prime minister takes office.

Pakistan is now a 50% partner in Reko Diq, a type of arrangement that Barrick also had to adopt in Papua New Guinea, and one that gives host nations a more direct interest in seeing projects succeed. Barrick plans a full update of the Reko Diq feasibility study following last month’s agreement with Pakistan.

Barrick’s two-phase approach in the conceptual design gives the company a way to speed up first production while minimizing risk. A $4 billion first phase would cover initial crush, milling and flotation circuit, with output set to start in 2027-2028. A $3 billion second phase would encompass a parallel circuit that would fire up in five-plus years after phase one starts.

The latest design shows a mine life of 40-plus years, compared to the 56 years identified in the 2010 study that pegged initial costs at $3.3 billion.

Barrick also sees the project in southwestern Balochistan as “a springboard for further exploration and other mineral discoveries along the highly prospective Tethyan Metallogenic Belt.”

The company expects to close a definitive agreement with Pakistan in the second half and complete the feasibility update in 2023-2024. In the meantime, Barrick and its partners are seeking to raise “limited” recourse financing for the first phase.

(By James Attwood)

New lithium technology can help the world go green — if it works

Reuters | April 7, 2022

(Image courtesy of Lilac Solutions).

Rio Tinto, General Motors and even the US Energy Department are investing heavily in a crop of newer technologies that could revolutionize the way lithium is produced for electric vehicle batteries.


Now those technologies just have to prove they work on a commercial scale.

If they do, miners will be able to boost global lithium production with a footprint far smaller than open-pit mines and evaporation ponds, which often are the size of multiple football fields and unpopular with local communities.

These so-called direct lithium extraction (DLE) technologies extract the white metal from brine using filters, membranes, ceramic beads or other equipment that can typically be housed in a small warehouse. But they often use lots of potable water and electricity, and none have worked at commercial scale.

Global automakers, mining companies and investors are pouring millions of dollars into DLE companies, betting they can supply the bulk of the lithium needed to power the electric vehicle revolution.

“It’s such a game changer. There’s huge opportunities,” US Energy Secretary Jennifer Granholm told an energy conference last month about DLE.

Granholm’s department has given Warren Buffett’s Berkshire Hathaway Inc a $15 million grant to test DLE technology at California’s Salton Sea, under which sit large geothermal lithium deposits, and is considering funding other DLE projects.

DLE technologies would challenge traditional miners such as Albemarle Corp, the world’s largest lithium producer, and prospective miners such as Lithium Americas Corp, ioneer Ltd and Piedmont Lithium Inc.

Albemarle is studying various DLE technologies but its executives have said DLE likely works best when engineered for a specific lithium deposit, which could curb enthusiasm.

Large water usage by several types of DLE technologies has raised eyebrows. The technology General Motors Co is relying on to supply a “sizeable amount” of its lithium from the Salton Sea region uses 10 tonnes of water for every tonne of lithium produced.

Privately held Lilac Solutions Inc, backed by BMW and Bill Gates’ Breakthrough Energy Ventures, developed that technology and said it could use a desalination plant to filter brackish water to avoid using potable water.

“If needed, we’re willing to make those capital investments to ensure we’re not jeopardizing anyone’s freshwater,” said Lilac CEO Dave Snydacker. “New technology is absolutely essential for society to obtain the volumes of lithium that are necessary for electric vehicles.”

Prominent short seller Hindenburg Research issued a 59-page report in February questioning whether the DLE technology from Standard Lithium Ltd even works, despite backing for its Arkansas project from chemical giants Koch Industries Inc and Lanxess AG.

“DLE is one of those technologies that’s been a hope and a prayer, Hail Mary for most, so that’s fertile ground for stock promoters,” said Nathan Anderson of Hindenburg.

Standard disputed the allegations in the report, which erased more than $300 million in Standard’s market value in one day and stoked fears about the DLE movement. The stock has partially recovered.
‘I’m a skeptic’

There are dozens of DLE-focused companies worldwide, some with their own technologies, some with brine-rich acreage and some with both.

“Direct lithium extraction is becoming a hot subject,” said Olivier Le Peuch, chief executive of Schlumberger Inc, which is developing DLE technology with Panasonic Corp. It hopes to supply Tesla’s Nevada Gigafactory, but has acknowledged it must find a way to produce the metal without potable water.

US and global ambitions to go green are at stake. At least 70% of the US lithium deposits are held in brine reserves, according to the Energy Department. Elsewhere, DLE offers a chance to produce lithium in areas where open-pit mines face strong opposition.

In Germany, Vulcan Energy Resources Ltd aims to use DLE the produce the metal for Renault SA and other automakers from Germany’s Black Forest.

“As the EV transition accelerates, we can grow with that market,” said Horst Kreuter, Vulcan’s CEO.

Privately held Luna Lithium Ltd plans to use DLE in Nevada, CEO Emily Hersh said. In Utah’s Great Salt Lake, Compass Minerals International Inc has been trying to chose a DLE technology for more than a year and hopes to make a decision this summer.

Galvanic Energy LLC aims to sell to sell the 100,000 brine-rich acres it controls in Arkansas if it finds a DLE technology that works.

“These companies promote and talk about what they can do, but I’m a skeptic until proven otherwise,” said Brent Wilson, a former Chesapeake Energy Corp geologist who formed Galvanic in 2018.

Rio Tinto Ltd paid $825 million last December for an Argentina DLE project, which it said “has the potential to significantly increase lithium recoveries as compared to solar evaporation ponds.”

Privately held Energy Exploration Technologies Inc, known as EnergyX, has developed a DLE technology that uses membranes to filter lithium, but in some cases, EnergyX’s DLE membrane technology may have to be paired with another DLE technology, said CEO Teague Egan.

“Our DLE membrane technology is very good, but DLE doesn’t have to mean one technology or another. I think that’s what people fail to see,” said Egan, who aims to take EnergyX public by mid-2023.

EnergyX recently sent a pilot version of its technology to Bolivia in the hopes of convincing La Paz to chose it to develop the Uyuni salt flat, one of the world’s largest lithium deposits.

Lilac, as well as several Chinese and Russian companies, are also competing for the Bolivian project, pointing to the rising global attention paid to the industry.

“DLE is not a magic wand, but it is a very valuable tool in the toolkit,” said Luna Lithium’s Hersh.

(By Ernest Scheyder and Victoria Waldersee; Editing by David Gregorio)

Direct lithium extraction technique for greener batteries gains traction

Special method for production gets cash injection from govt, vendors

Dan Robinson®

Fri 8 Apr 2022 


New techniques for producing lithium could play a vital part in making batteries for applications ranging from smartphones to electric vehicles that are more environmentally friendly than current methods of extraction.

According to a Reuters report, car makers, mining companies and investors including the US Energy Department are pouring money into direct lithium extraction (DLE) technologies that hold out the promise of boosting global lithium production, which is mostly sourced from just a handful of countries today.

There are a number of DLE technologies which all revolve around extracting the metal from brine in various ways, such as using filters, membranes, or ceramic beads. These are touted as more sustainable solutions than existing ways of obtaining lithium, such as pumping lithium-containing saltwater from underground lakes to the surface in desert areas of Chile or Argentina, and extracting it through evaporation in large basins.

However, while DLE techniques do not require the use of enormous evaporation basins, some critics have argued that they still consume large volumes of water and electricity to produce the lithium.

For example, General Motors is aiming to use a DLE technique to supply a considerable amount of the lithium it needs from the Salton Sea region in southern California, which reportedly uses 10 tons of water for every ton of lithium produced.

But one company in Cornwall, UK, believes it has found a more environmentally responsible method of getting lithium from brine. Cornish Lithium said it aims to extract lithium from geothermal waters, and also power the extraction process with geothermal energy from the same source.

Cornish Lithium said it is planning to directly extract the lithium from the fluids in a processing unit that is expected to have a footprint the size of a supermarket or medium sized industrial unit.

The company said it has already received £9m ($11.7m) of a package of up to £18m ($23.5 million) from metals-focused investment company TechMet Limited to develop its technology, and has recently begun drilling a research borehole at Twelveheads, near Redruth.

Elsewhere, an Australian firm, Ekosolve Lithium Limited, announced this week that its DLE pilot plant has processed lithium brines from the Incahuasi Salar, a salt basin in the Catamarca region of north-western Argentina, and achieved a recovery of greater than 90 percent of the lithium present.

It claimed that 200 liters of brine was processed, with high-grade lithium chloride produced. This can then be converted to battery-grade lithium carbonate or used as feeder stock for other lithium compounds, according to the firm.

In Canada, E3 Metals recently announced it had received $1.1m of a $1.8m grant from the Alberta Innovates research agency following completion of its lab-based pilot DLE prototype that uses a proprietary ion-exchange process to extract lithium.

It now aims to build and operate a field pilot plant that will operate continuously within the Clearwater area to extract lithium directly from the brine produced from the Leduc Aquifer, in order to demonstrate that it can scale up to a projected commercial scale of 20,000 tons per year of lithium hydroxide monohydrate.

The National Renewable Energy Laboratory (NREL) in the US is also researching DLE methods, and said they could potentially deliver 10 times the current US lithium demand from the Salton Sea.

"Lithium-rich geothermal brines represent a vast, untapped resource that can potentially be developed into a robust domestic supply while adding to a well-paying workforce," said NREL senior geoscientist Ian Warren, in an announcement last year about its research into DLE.

"The increasing global demand and the need for a secure supply of lithium has created a deep interest - and urgency - in fully developing DLE that is considered environmentally safe," he added. ®

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Ford inks Argentina lithium supply deal with Lake Resources
Reuters | April 11, 2022 | 

Kachi lithium brine project. Photo by Lake Resources.

Ford Motor Co said on Monday it has signed a preliminary deal to buy lithium from a Lake Resources NL facility in Argentina, marking the first time the automaker has publicly announced where it will procure the electric vehicle battery metal.


The deal is a major bet by Ford on direct lithium extraction (DLE), a relatively new breed of technologies that filter the metal from brines and use far less acreage than open-pit mines and evaporation ponds.

General Motors Co, BMW, Stellantis and other Ford rivals have inked supply deals of their own with companies planning to use DLE technology.

Ford aims to buy 25,000 tonnes annually of the white metal from Lake’s Kachi project in northern Argentina, which is being developed with privately held extraction startup Lilac Solutions Inc.

Lilac’s technology, like all DLE technologies, has yet to work commercially, though it has the support of Bill Gates’ Breakthrough Energy Ventures and other high-profile investors.

The agreement between Lake and Ford is nonbinding and would need to be finalized to include a specific delivery timetable.

Ford Chief Executive Jim Farley said in February that his company was working on deals to secure supply of key raw materials for batteries such as lithium, nickel, rare earths and copper.

“This is one of several agreements we’re exploring to help Ford secure raw materials to support our aggressive EV acceleration plan,” said Ford spokesperson Jennifer Flake.

Sydney-based Lake Resources is listed on the Australian Stock Exchange, which requires supply deals to be publicly disclosed.

The Kachi project, in northern Argentina near the Chilean border, is expected to cost about $540 million and open by 2024.

Lilac’s technology uses 10 tonnes of water for every tonne of lithium produced. Lilac has said it could use a desalination plant to filter brackish water to avoid using potable water.

(By Ernest Scheyder and Ben Klayman; Editing by Aurora Ellis)

LITHIUM 

EV AND BATTERY BIG TALK MUST NOW SWITCH TO MINING AS SUPPLY CHAIN BITES
8th April 2022 

By Simon Moores and Morgan Bazilian

The lithium ion battery is in the midst of its transition from niche industry to mainstream platform technology for the 21st century.

The coming of age of electric vehicles has seen demand for these batteries surge from 59 gigawatt-hours (GWh) in 2015 to 400 GWh in 2021. This is forecast to grow by a significant 50% to 600 GWh in 2022, according to analysis by Benchmark Mineral Intelligence.

This sheer scale of battery output has been made possible through the rise of so called gigafactories, battery plants an order of magnitude bigger than their predecessors.

Sparked by Elon Musk’s first Tesla Gigafactory in Nevada in 2017, the rest of the world has now followed in building super-sized battery plants.

From 3 such plants in 2015, we now have 285 gigafactories globally at various stages of planning and construction.

This has allowed output to increase exponentially and costs to fall significantly from $280/kWh in 2015 to $115/kWh.

However, for the last few years these cell costs have been flatlining and last year experienced their first increase in this giga-era.

Why? Because the critical raw material inputs have been neglected.
NEGLECT AT YOUR PERIL

In 2015, 40% of the cost of a lithium ion battery was raw materials, the critical minerals that get transformed into chemicals to make a battery’s main components, the cathodes and anodes.

At less than half of the cost of the whole battery, cathode and anode raw materials were deemed not worthy of priority attention.

In 2022, the dynamics have shifted: raw materials now account for upwards of 80% of the cost of a lithium ion battery.

Therefore, if EVs mean lithium ion batteries, EVs must now mean critical minerals and mining.

As a result of surging EV battery demand and a lack of new supply, pressure on the critical minerals that fuel lithium ion battery production have been increasing.

Since January 2020, Benchmark’s lithium prices have increased by over 700%, nickel by 250%, cobalt and manganese by 100%, and graphite by over 25%.

And right now, there is not enough of these raw materials in the pipeline to take the majority of EV makers beyond 2030.

While upwards of $500bn has flowed into building the 285 gigafactories around the world – and $150bn last year alone – critical mineral mines and mid stream processing plants have not seen anywhere like this type of investment.
THE GREAT RAW MATERIAL DISCONNECT

This great EV raw material disconnect has OEMs, the ultimate end users of these battery cells, concerned.

An industry that is used to dominating a supply chain is suddenly coming to the realisation that it has to build these new energy supply chains from scratch after the capital markets failure to step up.

It’s a similar realisation that automakers had around 2018 when they were forced to get involved in battery cell making.

A handful of EV makers are taking the supply chain strategy a few steps further but the examples are isolated.

Tesla wants to build its own cathode, nickel chemical and lithium hydroxide plants in Austin, Texas, feeding its new 4680 battery cell factory.

VW announced only a few weeks ago that it wants to begin nickel and cobalt refining in China.

General Motors has committed $400m to build cathode material in Canada.

But to have the ultimate sway of industrial power you need to own the mines, in part or in full.

This is the only way to guarantee the raw material to make your batteries and EVs.
ECHOES OF HENRY FORD

OEMs are right to be fearful and hesitant to want to “become miners”.

Echoes of an ill-fated venture by Henry Ford to build rubber plantations in Brazil in the 1920s after the industry ran out of rubber tyres loom large.

One hundred years on the industry faces an eerily similar problem.

The reality is that this global EV blueprint is yet to be built out to a scale needed to reach surging consumer demand and increasing aggressive OEM and government targets… We are nowhere close.

Critical mineral mines will need to be built, existing mines expanded, stockpiles and waste heaps revisited, and battery recycling needed.

The significance of the situation is not lost on global leaders.

Only last week, The White House enacted the Defense Production Act Title III to zero in on domestic battery minerals production of lithium, cobalt, nickel, graphite and manganese.

The most recent DPA determination focused on the covid pandemic and it had previously been used for metals during times of war.

This clearly shows the US government becoming actively involved in investing in its domestic battery raw materials production both via co-production and to help fund bankable feasibility studies for exploration stage miners – a major bottleneck for institutional money.

This is a major step forward for US production of critical battery minerals and a move that it hopes will drag the finance community into 21st century mining.

Big talk on EVs must now mean equally as big statements on mining.

After all, a gigafactory without secure raw materials is as useful to an OEM as a grain silo.

Simon Moores is CEO of Benchmark Mineral Intelligence and Morgan Bazilian is Director of the Payne Institute and Professor of Public Policy at Colorado School of Mines.

Second staff rotation at Chernobyl

11 April 2022

The first staff rotation at Ukraine's Chernobyl nuclear power plant in three weeks and only the second since late February when Russian forces seized the site has been carried out. The workers were transported by boat as the plant remains inaccessible by road.

The Pripyat River (Image: Energoatom)

Nuclear power plant operator Energoatom announced on 9 April that it provided its boat for the change of staff at the Chernobyl plant. It said 49 employees were taken by the boat along the Pripyat River to the plant from the city of Slavutych, which lies outside the 30-kilometre exclusion zone. 51 workers were then taken from the plant back to Slavutych. "There are currently no other ways of delivering people to the station from Slavutych," the company noted.

Most of the workers at Chernobyl, including 46 volunteers, had been there since 20 March. However, 13 workers had been on site since 24 February.

International Atomic Energy Agency (IAEA) Director General Rafael Mariano Grossi welcomed the second staff rotation as a much-needed positive step for the well-being of the plant's personnel and their families. He said the shift change was also important for the safe and secure operation of the Chernobyl plant, which was controlled by the Russian military for five weeks until they withdrew on 31 March.

However, he said the fact that those taking part in the latest staff rotation had to be transported to and from the site by boat underlined that the situation at the plant and the exclusion zone around it remained far from normal.

"While it is very positive that Ukrainian authorities are gradually restoring regulatory control of the Chernobyl site, it is clear that a lot of work remains to return the site to normality," Grossi said. "As soon as it is possible, I will head an IAEA mission to Chernobyl to conduct a radiological assessment there, resume remote safeguards monitoring of the facility and its nuclear material and deliver equipment, including spare parts and components, for the plant's safe and secure operation. I'm in close consultations with Ukraine on setting a date and organising a programme of work for the visit, which is expected to take place soon."

The IAEA said on 8 April that it will be the "single point of contact" for international technical assistance to Ukraine and it is in discussions with the many countries that have expressed interest in backing its efforts to help ensure the safety and security of Ukraine's nuclear facilities.

In a 10 April update, the IAEA said it had been informed by Ukraine that the site's analytical laboratories for radiation monitoring were destroyed and the analytical instruments stolen, broken or otherwise disabled. In addition, an associated Information and Communication Centre had been looted, parts of its communication lines destroyed, and the automated transmission of radiation monitoring data disabled.

Ukraine said that following the departure of Russian troops last week, despite "the increase in the level of radioactive contamination ... due to non-conformity with requirements of radiation safety and strict access procedures", the radiation situation is "within the limits" for the site.

In a 9 April IAEA update, Grossi said its experts can only conduct a radiological assessment at the site and deliver required safety-related equipment to the plant when they go there.

Whilst the IAEA has not been receiving remote data transmission from its monitoring systems installed at Chernobyl, it said such data was being received from Ukraine's other nuclear power plant sites.

Regarding the country's 15 operational reactors at four sites, eight are currently connected to the grid, including two at the Russian-controlled Zaporozhe plant, three at Rivne, two at the South Ukraine plant and one at Khmelnitsky. The seven other reactors are shut down for regular maintenance or held in reserve.

Researched and written by World Nuclear News

US nuclear generation down but share remains the same

12 April 2022

Total US nuclear electricity generation declined slightly for the second consecutive year in 2021, although nuclear's share of electricity generation has remained similar to its average share over the previous decade, according to figures from the US Energy Information Administration (EIA).

(Image: EIA)

Output from US nuclear power plants totalled 778 million MWh in 2021, 1.5% less than the previous year. Nuclear's share of US electricity generation across all sectors was 19%.

Since 2017, the EIA has included all US generating plant retirements since 2002 in its Preliminary Monthly Electric Generator Inventory. Six nuclear units with a total capacity of 4736 MWe have retired since the end of 2017, and three more, with a combined capacity of 3009 MWe, are scheduled to retire in the coming years. These are: Palisades, in Michigan, which is scheduled to retire later this year; and Diablo Canyon, in California, where one unit is scheduled to retire 2024 and one in 2025.

Only one of the five 2021 nuclear retirements that EIA expected, of January that year, actually took place. Exelon Generation reversed the decision to retire the Byron and Dresden plants - each home to two units - following the passage by Illinois of energy legislation supporting their continued operation.

The loss of electricity generation from the only retirement of the year - Entergy Corporation's Indian Point unit 3, which closed in April after nearly 60 years of nuclear power generation at the site in New York state - was partially offset by an increase in the generation of the remaining nuclear fleet at a higher capacity factor, EIA said. The US fleet achieved an average nuclear capacity factor 93% in 2021.

The Bipartisan Infrastructure Law, enacted in November 2021, includes the allocation of some USD6 billion to prevent the premature retirement of existing nuclear power plants.

Vogtle units 3 and 4 in Georgia remain the only nuclear units currently under construction in the USA. The two AP1000 units - each rated at 1114 MWe - are scheduled to come online by the end of 2023.

UEC launches Wyoming hub-and-spoke project

08 April 2022

US uranium mining company Uranium Energy Corp (UEC) has disclosed mineral resources totalling over 69 million pounds U3O8 (26,541 tU) in the first technical filing for its Wyoming hub-and-spoke uranium in-situ leach project.

UEC's Wyoming hub-and-spoke concept (Image: UEC)

The project is centred on the fully licensed Irigaray Central Processing Plant as the "hub" with seven satellite projects - four of which are fully permitted - forming the "spokes". The satellites include assets purchased by UEC through its acquisition of Uranium One Americas (U1A), completed in December 2021, and the Reno Creek project, which it acquired in 2017.

The project consists of the Irigaray, Christensen Ranch, Moore Ranch, Reno Creek, Ludeman, Allemand-Ross, Barge and the Jab/West Jab project areas. Total measured and indicated resources across all the assets total 61,956,200 pounds U3O8, with total inferred resources of 7,105,700 pounds U3O8.

Texas-based UEC reports its mineral resources in accordance with the US Security and Exchange Commission's S-K 1300 regulation. With the exception of Reno Creek, the Technical Report Summary (TRS) filed by the company is the first time these resources have been reported under the S-K 1300 format.

Irigaray and Christensen Ranch have previously collectively been referred to as the Willow Creek project, with  Irigaray plant as the processing plant for that project. Christensen Ranch is currently under care and maintenance and Irigaray is operating in a toll processing capacity. The Christensen Ranch satellite plant is also fully licensed, and Moore Ranch, Reno Creek and Ludeman are fully permitted.

UEC President and CEO Amir Adnani said the technical data from the conversion of U1A’s historical resources into fully compliant S-K 1300 resources would be employed in implementing the company's uranium extraction plans. The resources outlined in the TRS filing also represent the largest S-K 1300 resource summary completed and filed to date, he added. "These considerable permitted Wyoming resources coupled with our Texas permitted projects, positions UEC to lead the resurgence of US uranium production," he said.

Researched and written by World Nuclear News