Australia to become ‘more assertive’ on foreign investment in critical minerals

Reuters | November 24, 2022 | 

Image by Iluka Resources.

Top lithium supplier Australia is set to become more selective about who it lets invest in its growing critical minerals industry, Treasurer Jim Chalmers said on Friday.


Australia, a major supplier of minerals key to the energy transition like rare earths, has more to gain by encouraging investment from allies to build up its minerals processing industry, Chalmers said at a conference in Sydney.

“Foreign investment is a good thing when it’s in our national interest,” Chalmers said.

“But as investment interest grows, and as the sources of that investment interest grow, we’ll need to be more assertive about encouraging investment that clearly aligns with our national interest in the longer term.”

Chalmers stopped short of announcing any review of existing international holdings of operations, after Canada ordered three foreign firms to divest from its critical minerals sector earlier this month.

The Labor government which took power in May is buttressing Australia’s policy to build out a critical minerals processing supply chain.

Federal investment is already helping to construct a processing plant run by Iluka Resources as part of its A$2 billion critical minerals facility.

Resources Minister Madeleine King in a separate speech flagged recent developments in Australia’s burgeoning critical minerals processing industry.

The strategy will provide friendly nations with an alternative at a time when Russia’s invasion of the Ukraine has underlined the strategic risks of having a dominant supplier, Chalmers said.

“To put it as simply as I can – our international friends need to rely on someone, so let’s have them relying on us,” he said.

Australia is revising its critical minerals strategy and has been positioning itself as a green superpower, backed by its mineral endowments.

It signed a Critical Minerals Partnership with Japan in October and its Southeast Asia Economic Strategy to 2040 will include a focus on resources, energy and the green economy, Chalmers said.

($1 = 1.4799 Australian dollars)

(By Melanie Burton; Editing by Stephen Coates)

Australia court blocks giant coal mine on human rights grounds

Bloomberg News | November 25, 2022 | 

Waratah Coal is focused on the exploration and development of coal projects in Australasia. (Image courtesy of Waratah Coal.)

An Australian court has blocked a proposal for a huge coal mine, saying the emissions produced by the fuel would threaten human rights.


The Galilee Coal Project would add 1.58 billion tons of carbon dioxide to the atmosphere over its lifespan — more than triple Australia’s annual domestic emissions — and impact the human rights of future generations, the Queensland Land Court ruled on Friday.

“Climate change was a key issue in this hearing,” the court said in its ruling. “This Project alone is not the difference between acceptable and unacceptable climate change. But 1.58 gigatons of CO2 is a meaningful contribution to the remaining carbon budget to meet the long-term temperature goal of the Paris Agreement.”

The landmark ruling is another blow for Australia’s A$120 billion ($81 billion) coal export industry, less than a week after accusations that it falsified data about the quality and climate impact of its products. The project’s biggest stakeholder, billionaire Clive Palmer, in August had another proposed mine rejected by the government.

The case is the latest in a line of lawsuits from the US to the Philippines that seek to press governments and firms to hasten efforts to reduce greenhouse gas emissions. Germany’s highest court last year forced lawmakers to bring forward the nation’s net zero goal by five years after ruling existing law put young people’s futures at risk by leaving most emissions cuts until after 2030.

The Galilee project proposed to develop the biggest thermal coal mine in the nation, with production of 40 million tons a year. It’s the first time a Queensland coal mine has been blocked because of its climate impact, Alison Rose, a senior solicitor with the Environmental Defenders Office, which represented the plaintiffs, including indigenous groups, said by telephone.

The ruling was “very new for Australia” and would set a legal precedent for other proposed fossil fuel projects in Queensland, one of the largest coal exporting regions in the world, Rose said. A similar case blocked a mine in New South Wales in 2019, but was later overturned.

Closely held Waratah Coal, the Palmer-controlled company developing the project, didn’t immediately respond to a request for comment. The Queensland Resources Council, which represents Queensland’s coal sector, also declined to comment on the wider implications of the judgment.

Waratah can appeal the decision in Queensland’s Supreme Court.

(By James Fernyhough)

Mining coal in your garden is a lucrative business in Poland

Bloomberg News | November 27, 2022 | 

Anna coal mine in Pszów, Poland

Reference image by Jan Pešula, Wikimedia Commons.

Polish taxi driver Grzegorz says his phone won’t stop ringing, such is the demand for his services. Yet it’s not a ride people want.


Grzegorz has given up driving for a far more lucrative line of work as Poland grapples with energy shortages: illegal mining. Around his home in the Lower Silesian city of Walbrzych, coal sits as little as a meter below the surface in fields, recreation areas and even gardens. A four-man team can unearth a ton in an hour and make 1,000 zloty ($220) each for half a day’s work, roughly 60% of what an average person earns in a week.

“My wife is against it and worried about me, but as a taxi driver I wouldn’t be able to make this kind of money,” Grzegorz said as he hoisted a bucket of the black gold from a square hole on the edge of a residential area while two of his cohort chipped away with pickaxes.

Across the world, the dirtiest of fuels is going through a revival as Russia withholds gas supplies needed to generate electricity because of the war in Ukraine. That clamor is even more acute in Poland because a disproportionate number of households still depend on coal for heating and there’s a shortage the government is struggling to address.

Vladimir Putin’s invasion of his neighbor has reshaped the energy market, with European Union sanctions on Russia shutting down coal imports to Poland, where it’s used to heat 37% of homes. The nation of 38 million accounts for 77% of all households using coal for heating in the 27-member bloc.

With coal reserves being used up and temperatures plunging, the government in Warsaw is securing coal and relying on municipalities to distribute it. But some coal storage facilities have had to shop from supermarkets after suppliers ran out of stock in the immediate aftermath of the war, undermining President Andrzej Duda’s assurance that Poland has enough coal to last for 200 years.

So people are taking action. Some have turned to burning garbage, worsening air quality in a country where three of its main cities — Warsaw, Krakow and Wroclaw — were in the top 10 for pollution globally at one point this month.

In Walbrzych, it’s sent people driving across the border to buy coal in the Czech Republic — or to pick up shovels and dig. Mayor Roman Szelemej blamed the government for creating a national dependence on the fuel. “This crisis is showing that this was a mistake,” he said at his office.

With a population of about 100,000, the Walbrzych area’s economy relied on coal extraction for two centuries before the last (legal) pit closed in 2000.

The industry’s legacy looms large after thousands of miners were pushed out of work. Indeed, illegal mining isn’t new, it’s more a case of making a comeback. Unemployment is 12% in surrounding towns and villages, about three times the rate of the city itself, so an opportunity to make money can be tempting for those with the residual knowhow.

So-called “poor man’s pits” have sprouted up in forests, fields and shrubland. On the outskirts of the city, a cluster of small private gardens is also dotted with them. One resident said some people need the money and others the coal. The city, meanwhile, is sending patrols to check on the places they know are popular with miners.

“There are more pits in the locations we used to monitor throughout the last years over sporadic cases of illegal mining,” said Mateusz Majchrzyk, spokesperson for the Forestry Management in Walbrzych. “We noticed an increased activity around the mines, and we are also spending more money on the sand we use to fill in the holes.”

Grzegorz, who declined to give his last name or age given his involvement in an illicit trade, said he may be taking the opportunity to make good money, but he’s also helping resolve Poland’s gravest energy crisis in decades.

His group was supervised by Bartosz, who had three years’ experience working as a miner. The pit they were working on was around 3 meters deep, with two men in charge of digging accessing the hole using a hand-made wooden ladder. Grzegorz was filling the sacks with the coal to be carried to a car hidden behind the trees.

“We will dig here as long as we will be able to extract coal,” said Grzegorz. “And then we will dig a new pit.”

(By Natalia Ojewska, with assistance from Piotr Skolimowski)

Rio Tinto reaches historic agreement with Juukan Gorge group

Reuters | November 28, 2022

Juukan Gorge cave sites seen before the destruction. 

(Screenshot via YouTube.)

Rio Tinto (NYSE, ASX: RIO) has reached a restitution agreement with an Aboriginal group whose rock shelters in Western Australia it destroyed two years ago for an iron ore mine, the groups said on Monday.


The destruction of the Juukan Gorge sites that showed evidence of human habitation stretching back into the last Ice Age 46,000 years ago caused deep distress to the traditional owners, the Puutu Kunti, Kurrama and Pinikura (PKKP) peoples.

It also fueled a global uproar, cost three senior leaders and two board members their jobs, a parliamentary inquiry, and an overhaul of the mining industry’s agreements with Indigenous Australians.

Financial terms were not disclosed by either party at the request of the PKKP, the parties said.

“Nothing can compensate for or replace the loss suffered at Juukan Gorge, so this is an outcome orientated legacy to ensure something positive will come from it for years to come,” PKKP Aboriginal Corp Chairperson Burchell Hayes said.

The Juukan Gorge Legacy Foundation will focus on education and training opportunities, financial independence through business development, preservation and an increased voice over heritage, culture and land, the PKKP said in a statement.

The two groups are in advanced talks about a co-management of mining agreement, the PKKP added.

“We fell far short of our values as a company and breached the trust placed in us by the PKKP people by allowing the destruction of the Juukan Gorge rock shelters,” Rio Tinto Chief Executive Jakob Stausholm said.

“As we work hard to rebuild our relationship, I would like to thank the PKKP people, their elders, and the Corporation for their guidance and leadership in forming this important agreement,” he said in a separate statement.

As well as the legacy foundation, remedy discussions have centred on ongoing rehabilitation of the rock shelters and their surrounds at Juukan Gorge, Rio said.

Australia said last week that it would strengthen laws to better protect Aboriginal cultural heritage following the enquiry, although it did not offer a time frame for completion.

(By Melanie Burton; Editing by Stephen Coates)

LME says it saved nickel market from $20 billion ‘death spiral’

Bloomberg News | November 28, 2022 | 

Image courtesy of LME.

The London Metal Exchange has defended its controversial decision to cancel billions of dollars of nickel trades in March as necessary to avoid a $20 billion margin call that would have sent the market into a “death spiral” and threatened the exchange’s own survival.


The LME on Monday provided its most detailed account yet of the historic short squeeze this year when prices soared 250% in little over 24 hours, in a filing outlining its defense against lawsuits from Elliott Investment Management and Jane Street.

The document — which describes a growing sense of panic and mounting defaults among members well before the worst of the spike — describes why the LME took the unprecedented decision to unwind hours worth of trading, but may also reignite questions from its critics about why it didn’t act sooner.

If the prices reached during the canceled trading on March 8 had been allowed to stand, the nickel market would have faced a margin call of $19.75 billion, ten times higher than the previous record level, the exchange said. At least seven clearing members would have gone into default, and the crisis had the potential to create a “death spiral,” according to Adrian Farnham, the chief executive officer of the LME’s clearinghouse at the time.

In that scenario, LME Clear would have incurred a loss of $2.6 billion, and would have had to seek contributions of at least $1.22 billion from the remaining clearing members. That in turn would probably have caused a further five clearing members to default, the LME said in the filing, “resulting in the LME being unable to function as a venue for non-ferrous metals markets, and posing a significant systemic risk to the wider financial system.”

Elliott and Jane Street are seeking a total of nearly $500 million in damages from the LME and its clearinghouse, arguing that the exchange acted improperly in its decision to cancel the March 8 trades.

“The LME maintains that Elliott’s and Jane Street’s grounds for complaint have no merit and are based on a fundamental misunderstanding of the situation on 8 March and the decisions taken by the LME,” an LME spokesperson said. “All the actions taken on 8 March were lawful and made in the interest of the market as a whole. The LME will continue to vigorously defend these proceedings.”

Missed calls

The LME’s defense reveals how much stress the market was under even on March 7, the day before the market was suspended, when prices rose 66%. Three members missed initial margin calls that were due for payment by 9 a.m. that day, and one remained unpaid, according to the LME.

By 1:15 p.m. in London on March 7, the LME had made nine intraday margin calls totaling about $7 billion, and LME Clear “was concerned that it would not be feasible for Members to meet further intraday margin calls”. As a result, LME Clear decided to stop making intraday margin calls — a decision that was “extremely unusual and a departure from internal policy,” according to the filing.

Yet when the LME’s special committee held a call at 4 p.m. on March 7, it concluded that the market was still orderly, and allowed it to reopen as usual the following night at 1 a.m.

At 5:53 a.m. on March 8, Farnham was informed that six members had not made overnight margin payments worth $2 billion — or one third of the total due — that were due by 9 a.m. Between 5:33 a.m. and 8:18 a.m., seven members approached the LME to say that they would have difficulty posting margin.

At about 7:30 a.m., LME and LME Clear executives held a call at which they agreed that the market had become disorderly and decided to suspend trading. At 9 a.m., a further call was held at which the decision was taken to cancel all trades that had taken place on March 8.

Responding to the suggestion that it had acted to favor Tsingshan Holding Group Co., whose massive short position was the focus of the nickel market squeeze, the LME said it had not known about the situation.

“It has emerged that underlying the unprecedented price convulsions on 8 March 2022 there very substantial short positions in the over-the-counter (“OTC”) market contributing to market disorder,” the LME said in the filing. “On 8 March, the LME was not aware of the large short positions in the OTC market.”

(By Jack Farchy and Mark Burton)

Las Bambas mine resumes copper output; transportation still halted

Reuters | November 28, 2022

(Reference image by the Peruvian Ministry of Energy and Mines, Twitter).

MMG Ltd resumed copper production at its Las Bambas mine in Peru after a protest was lifted, a source close to the company said on Monday, but added that transportation of the metal to port remained blocked by a separate conflict.


Las Bambas had reduced its operations to 30% of its usual capacity earlier this month due to the protests.

Protests against the Chinese-owned mine are recurrent and have often disrupted operations, amid complaints by nearby indigenous communities that the company’s huge mineral wealth has not translated into better living conditions for them.

The source said a protest in the town of Challhuahuacho had been lifted, which allowed production to resume.

But a separate protest blocking the road that Las Bambas uses to transport its copper onto a seaport for shipment to clients remained blocked along the Chumbivilcas province.

Peru is the world’s No. 2 copper producer and Las Bambas ranks among its largest producers of the red metal.

Since Las Bambas began operations in 2016, the miner has faced over 540 days of road blockades, according to statistics kept by the company.

(By Marco Aquino; Editing by Lisa Shumaker)

CRIMINAL CAPITALI$M

Russian tycoon to face new probe over Billionaire Bay villas
Bloomberg News | November 29, 2022 | 

Suleiman Kerimov, 56 (right), has been sanctioned by the US since 2018. Credit: Wikimedia Commons

Russian billionaire Suleiman Kerimov, 56, and his family are set to face a fresh probe in France, with a new team of prosecutors examining how his daughter came to own several luxury villas on the Riviera, and who the ultimate beneficiary is.


A Paris prosecution unit in charge of tackling organized crime known as Junalco is leading the investigation into the financial flows that enabled the acquisition by Gulnara Kerimova, 32, of the companies that own the four villas on the “Billionaire Bay” at Cap d’Antibes, according to people familiar with the matter. The ownership of the villas was the subject of a money laundering case opened several years ago in Nice, in southeastern France.

Junalco prosecutors are now drawing on a June report by France’s anti-money laundering body Tracfin, said the people. According to that document, Gulnara spent €268 million ($279 million) to take over the ownership structure, with funds provided for the most part by her brother Said, investigative news outlet Mediapart reported. In response to Bloomberg questions, Paris prosecutors confirmed that Junalco is taking the lead in investigating the Tracfin memo.

Nikita Sichov, an attorney representing Suleiman, Said and Gulnara, brushed aside any efforts to draw the family back under the French legal spotlight, suggesting that the change of ownership of the properties is well known to French authorities.

“The Tracfin report you refer to concerns a restructuring carried out in complete transparency with the competent bodies in order to comply with all the regulations in force,” Sichov said in response to Bloomberg questions.

The new probe caps a bad month for Kerimov’s family, which until earlier this year held a majority stake in Polyus PJSC, Russia’s largest gold miner. It fully exited the company in May.

Kerimov, who is a senator in Russia and whose net worth is $10.9 billion according to Bloomberg Billionaires Index, has been sanctioned by the US since 2018. Two weeks ago, the US sanctioned Said, Gulnara and the four French real estate firms she acquired as well as Alexander Studhalter, a Kerimov associate who had previously used a Swiss firm for ownership of the villas. The European Union and the UK added Kerimov to their sanctions lists following the invasion of Ukraine. Said has been sanctioned by the EU since April.

While Kerimov is on the EU sanctions list, the four villas don’t appear on France’s list of frozen properties, highlighting the difficulty local authorities have had in tying the luxury homes to him.
Nice case

Kerimov seemed to be in the clear in France following a 2020 settlement deal between prosecutors in Nice and the Swiss company run by Studhalter for €1.4 million.

That case made global headlines in November 2017 when the Russian billionaire was apprehended at the Nice airport and accused of money laundering. The arrest was dramatic. Kerimov had flown by private jet to Nice planning to head to Cap d’Antibes. Instead, he was met by French police officers. For months after that, he was under virtual house arrest on the French coast, required to check in with police weekly and allowed to return to Russia only with special permission for short visits.

Much of that probe had initially focused on secret payments worth €92 million during the acquisition of the “Villa Hier,” famously used as Michael Caine’s home in the 1988 film Dirty Rotten Scoundrels.

Sichov, Kerimov’s attorney, said the accusations against his client in the Nice case relating to the sale of the Villa Hier have been dismissed and that the billionaire isn’t facing any formal charges in any criminal proceedings.

The Nice prosecutors had stumbled onto Kerimov by accident as an investigation into drug dealers unexpectedly led French police to a secretary working for a Corsican lawyer. As investigators started to wiretap the lawyer’s entourage, they noticed suspicious transactions from one of his clients, the prior owner of Villa Hier. That trail then led them to Studhalter and Kerimov.

Throughout that probe, Kerimov claimed he never bought the villas but was merely renting them from Studhalter. The tycoon was reputed for being something of a Jay Gatsby-type figure because of his glitzy parties on the Riviera, including a bash where Beyonce sang.

Yet there were signs that Kerimov was more than just a renter. Blueprints from London-based architects MMM for renovations at Villa Medy Roc in 2009 showed plans for bedrooms with the names of Kerimov’s children — Said, Gula and Emina. A lawyer for Studhalter declined to comment.
Junalco’s probe

Now, the Tracfin report and the tasking of Junalco prosecutors to look into the villas’ ownership may put the Kerimov family back in French judicial cross-hairs. Junalco is an elite unit set up recently in Paris and charged with prosecuting “very complex” organized crime cases throughout France, from drug lords to cyber-criminals. It shares competence on certain matters with the Parquet National Financier, another prosecuting unit that operates in France and focuses on white-collar crimes.

Meanwhile, rich Russians, once a noticeable presence on the French Riviera, have all but disappeared since the invasion of Ukraine. They used to be seen vacationing in their vast sea-view villas or on superyachts from Saint-Tropez to Monaco. But many of their mansions are now frozen and their boats immobilized across Europe.

(By Gaspard Sebag, with assistance from Stephanie Baker)

New Australia coal projects to increase methane emissions by 19%

Bloomberg News | November 29, 2022

Open-cut coal mine in Australia’s Hunter Valley. (Reference image by Max Phillips, Wikimedia Commons.)

If 15 planned coal mining projects in Australia enter operation they would boost the country’s methane emissions from the dirtiest fossil fuel by nearly a fifth, according to an analysis from energy think tank Ember.


Australia’s coal mines already cause more planetary warming in a typical year than emissions from all the country’s cars. The new projects were previously approved but are facing fresh scrutiny under Prime Minister Anthony Albanese’s Labor coalition, which has joined the Global Methane Pledge that aims to cut global emissions of the potent greenhouse gas 30% by 2030.


Cutting emissions from coal mines is the cheapest way for Australia to significantly reduce the amount of methane it releases, a separate Ember analysis found last month. The nation’s coal mines already spew more than 1 million metric tons of methane each year, nearly a quarter of the country’s overall emissions of the gas, the group said in the new report.

The office of Environment Minister Tanya Plibersek did not respond to a request for comment.

Methane has 84 times the warming power of carbon dioxide during its first two decades in the atmosphere. Cutting emissions of the gas is a crucial test for Albanese’s Labor government, which campaigned on a promise to improve the nation’s climate standing on the world stage. In September, the government passed a law requiring a 43% cut in greenhouse gas emissions from 2005 levels by 2030 and setting a net zero goal by 2050, its first binding emissions-reduction target.

If the 15 projects being reviewed move forward they would increase Australian methane emissions from coal mines by roughly 190,000 metric tons a year, according to Ember.

In February, Australia disclosed it had revised how it calculates methane pollution from open-cut coal mines and said the change means total national emissions were on average 0.3% higher than previously stated for each year since 1990. That revision was prompted by the use of satellite data, which has improved the ability to estimate greenhouse gas emissions, the government said.

(By Aaron Clark, with assistance from James Fernyhough)

TANZANIA

Petra Diamonds to keep Williamson mine idled until mid-2023

Cecilia Jamasmie | November 30, 2022 | 

Dense media separation washing screen at Williamson mine plant. 

(Image courtesy of Petra Diamonds.)

Petra Diamonds (LON: PDL) said on Wednesday its Williamson mine in Tanzania would not resume production before the middle of 2023, following the partial collapse of tailings storage facility (TSF) earlier this month.


The company said the decision comes after an assessment by a team of experts that concluded there is a low risk of further failures of the mine’s TFS. They also warned of a possible breach of the New Alamasi water dam.

On November 7, part of the eastern wall of Williamson’s tailing dam collapsed, releasing a total of 12.8 million cubic metres of water and tailings material that flooded nearby areas.

There were no injuries or fatalities and the mine pit was unaffected, Petra said. It added that water and tailings material samples taken by the Tanzanian Government Chemist Laboratory Authority did not find dangerous chemicals and the ones detected were within normal parameters.

Petra, which also operates three diamond mines in South Africa, said its Tanzanian subsidiary, Williamson Diamonds (WDL), has built since an initial 6-metre-high wall to close the breached wall area.

As a precautionary measure, WDL has also put up containment walls upstream and downstream of the New Alamasi water dam, while support for facility’s new wall is under way.

Various diversion trenches are also being constructed to prevent any build-up of water and to enable rainwater to flow into the surrounding rivers and streams, Petra said.
Up to one-year wait

In a preliminary assessment, both Petra’s and independent external specialists concluded that the failure was the result of a subsidence of a portion of the TFS’ East wall measuring around 1.5 metres. This enabled water to crest the wall, initiating the breach.

“The root cause of the subsidence has not been determined and will require a forensic geotechnical investigation to be completed,” Petra said.

“This work will be undertaken by an independent company specializing in tailings dam design and management,” it added.

Cost and timing of the investigation will be available after a detailed scoping process is completed, but the miner said initial estimations point to between six and 12 months.

The company said that, in light of the failure of the existing facility, the design of the new TSF is currently under review, and is expected to be finalized in February 2023.

Petra warned the new TSF will take longer than initially anticipated to become operable. In parallel, an option of repairing and using the existing TSF is also being explored as a long-term solution, but this is subject to the outcome of the geotechnical investigation.
Financial support

Petra, which owns 75% of Williamson, said it was in talks with the government of Tanzania, which owns 25% of the diamond mine, on options for financial support during the production halt.

One of the options proposed by the company is the release and sale of a 71,654 carat diamond parcel seized by Tanzanian authorities in 2017.

At the time, Petra had to halt operations at Williamson, the source of the confiscated diamonds, as local authorities claimed the company was undervaluing its exports, which the miner has denied.

The Williamson mine has been the target of illegal artisanal miners in the past. 

(Image courtesy of RAID.)

The two parties reached an agreement in December 2021, with the Tanzania government agreeing to release the proceeds of the parcel sale to the company.

Operations at Williamson were halted for months last year due to a decline in diamond prices. During this time, the mine was subject to numerous incidences of illegal mining, and accusations of human rights abuses by security guards trying to keep intruders at bay.

Petra investigated the claims and end up reaching a $6 million settlement.

Common fungus turns out to be inexpensive, effective way to deal with mercury pollution

Staff Writer | November 22, 2022 | 

Mercury-polluted water at the New Idria mercury mine in the US.

 (Reference image by Joe.nehls, Wikimedia Commons.)

Researchers at Zhejiang University and the University of Maryland have discovered that the fungus Metarhizium robertsii removes mercury from the soil around plant roots, and from fresh and saltwater.


In a paper published in the journal Proceedings of the National Academy of Sciences, the scientists point out that their findings could provide an inexpensive and efficient way to protect crops grown in polluted areas and remediate mercury-laden waterways, such as those close to gold mining operations.

In detail, the study shows how Metarhizium stops plants from taking up mercury. “Despite being planted in polluted soil, the plant grows normally and is edible. What’s more, the fungus alone can quickly clear mercury from both fresh and saltwater,” UMD professor of entomology and co-author of the study, Raymond St. Leger, said in a media statement.

St. Leger explained that Metarhizium is a nearly ubiquitous fungus that colonizes plant roots and protects them from herbivorous insects.

Scientists have known that Metarhizium is often one of the only living things found in soils from toxic sites like mercury or artisanal gold mines. But no one had previously determined how the fungus survived in mercury-polluted soils, or if that had implications for the plants the fungus normally lives with.

A copycat

St. Leger and other colleagues had previously sequenced the genome of Metarhizium, and Weiguo Fang, lead author of the paper, noticed that it contains two genes that are very similar to genes present in a bacterium known to detoxify, or bioremediate, mercury.

For the current study, the researchers ran a variety of laboratory experiments and found that corn infected with Metarhizium grew just as well whether it was planted in clean soil or mercury-laden soil. Moreover, no mercury was found in the plant tissues of corn grown in polluted soil.

The researchers then genetically modified the fungi, removing the two genes that were similar to those in mercury-remediating bacteria. When they replicated their experiments, modified Metarhizium no longer protected corn plants from mercury-laden soil, and the corn died.

To verify that the genes were providing the detoxifying qualities, the researchers inserted them into another fungus that does not normally protect corn from mercury. The newly modified fungus performed like the Metarhizium, protecting the plants from mercury-laden soil.

Microbiological analyses revealed that the genes in question expressed enzymes that break down highly toxic organic forms of mercury into less toxic, inorganic mercury molecules.
Genetically engineered

Lastly, the researchers genetically engineered Metarhizium to express more of the detoxifying genes and increase its production of the detoxifying enzymes.

In their final experiment, the scientists found they could clear mercury from both fresh and saltwater in 48 hours by mixing in Metarhizium.

According to St. Leger, the next step will be to conduct experiments in the field in China to see if the fungus can turn toxic environments into productive fields for growing corn and other crops.

“Allowing plants to grow in mercury-rich environments is one of the ways this fungus protects its plant home,” St. Leger said. “It’s the only microbe we know of with the potential to be used like this because the bacteria with the same genetic capabilities to detoxify mercury don’t grow on plants. But you can imagine simply dipping seeds in Metarhizium, and planting crops that are now protected from mercury-rich soils.”

In addition to its potential as a cost-effective tool for reclaiming polluted lands for agriculture, the fungus may help clear mercury from wetlands and polluted waterways that are increasingly threatened by mercury pollution as climate change and melting permafrost accelerate the release of the toxic metal into soils and oceans.