GEMOLOGY

G7 to ban Russian diamonds, announce measures on price cap, assets

Reuters | December 6, 2023 | 

Image from Alrosa.

G7 leaders are expected to announce on Wednesday a ban on Russian diamonds and measures to manage some 300 billion euros ($323.58 billion) in immobilized Russian central bank assets and the G7 oil price cap, sources familiar with the matter said.


G7 leaders are had a virtual meeting on Wednesday.


One source specified that the G7 was expected to announce a direct ban as of Jan. 1 and then an indirect ban with a phase in period from March 1 until Sept. 1.

During the phase-in period, diamond companies will be able to use a self-declaration system like one provided by the World Diamond Council, the source added.

The system will use tracing and certification done through G7 countries and only apply to rough diamonds in an initial phase. Western countries initially looked at various proposals that covered rough and polished gems but countries could not agree on polished.

On the oil side, western nations have admitted that the impact of their $60 price cap on Russian crude oil has waned one year in, and the countries have been looking at ways to strengthen implementation. The EU’s latest proposed package of sanctions on Russia includes some measures to capture details on “ancillary costs” and slow the sale of old western ships to Russia’s so-called “shadow fleet”.

Meanwhile, the United States has started to impose sanctions on those who violate the price cap. Last week, Washington imposed additional sanctions, targeting three entities and three oil tankers as Washington seeks to close loopholes in the mechanism designed to punish Moscow for its war in Ukraine.

As for immobilized Russian assets, the European Commission is expected to propose next week a way to capture the windfall from the interest gained on the frozen assets. Coordination with the G7 is essential, however, as the assets are spread between various currencies though most is being held by Belgian clearing house Euroclear.

($1 = 0.9271 euros)

(By Julia Payne; Editing by Alexandra Hudson)

SOUTH AFRICA

Petra says prices have likely bottomed; secures increase in credit facility

8th December 2023
By: Creamer Media Reporter


Diamond mining group Petra Diamonds has sold 462 794 ct of diamonds for $58.7-million in its third tender for the 2024 financial year.

This is higher than the 444 029 ct sold for $41.5-million in the second tender of the current financial year and the 303 300 ct sold for $41.5-million in the third tender of the 2023 financial year.


The average price for the third tender of the current financial year was $127/ct, higher than the $91/ct achieved in the second tender of the year, but lower than the $137/ct achieved in the third tender of the prior financial year.

"The 20% increase in like-for-like prices for our third tender of financial year 2024 supports the view that diamond prices have likely bottomed.


“We believe actions taken by major producers to curb supply and the two-month Indian moratorium that comes to an end on December 15, together with strengthened retail sales in the US, have improved market conditions as inventory levels across the pipeline rebalance. Ongoing discipline by the key players is important to provide some price stability in the new year," comments Petra CEO Richard Duffy.

Meanwhile, financial services provider Absa has approved an increase of R750-million to an existing R1-billion first lien revolving credit facility.

The diamond miner, which operates three mines in South Africa and one in Tanzania, says R850-million has been drawn under the facility, leaving a balance of R900-million available under the upsized facility.

"Securing this increased facility, coupled with the recently announced capital deferrals and cost optimisation, further improves our resilience and operational and sales flexibility in the event of a weaker-for-longer diamond market," says Duffy. 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Russian uranium import ban teed up for US House floor vote

Bloomberg News | December 7, 2023 | 

Leningrad II nuclear power plant (Image: Rosatom)

Legislation that would bar the import of enriched Russian uranium into the US has been teed up for a vote in the US House of Representatives.


The Prohibiting Russian Uranium Imports Act, by Washington Representative Cathy McMorris Rodgers, has been scheduled for consideration next week under an expedited procedure that requires two-thirds majority to pass, according to the House floor schedule.

Support for a ban on the import of nuclear reactor fuel from Russia is growing among both Democrats and Republicans following Russia’s invasion of Ukraine. Its backers have been seeking to attach the measure to must-pass legislation, according to people familiar with the matter. House passage of a standalone bill would set up the opportunity pass the same legislation in the Senate.

Russia supplied almost a quarter of the enriched uranium used to fuel America’s fleet of more than 90 commercial reactors, making it the No. 1 supplier to the US last year, according to Energy Department data.

The legislation, which would bar Russian uranium imports 90 days after enactment while allowing a temporary waiver until January 2028, was approved by a House committee in May. A Senate panel approved similar legislation, which has the backing of both West Virginia Democrat Senator Joe Manchin and Wyoming Republican John Barrasso, who serve as the top lawmakers on the Senate Energy and Natural Resources Committee.

The House legislation would increase the cost of nuclear fuel in the US by 13%, according to an analysis by the non-partisan Congressional budget estimators.

The bill would “restrict access to relatively low-cost Russian enrichment services and cause disruptions in the market for nuclear fuel, thereby increasing the average price of fuel for US nuclear reactors and lowering their average operating margins,” the Congressional Budget Office said in its analysis of the bill.

The Biden administration has requested more than $2 billion from Congress to increase the US’s domestic enrichment capabilities. That includes both highly enriched uranium, needed for a new breed of advanced reactors, and low-enriched uranium, which is used as fuel by traditional nuclear plants.

(By Ari Natter)

Sprott, HanETF launch copper miners ETF focused on lower carbon footprint

“In the US, it’s fair to say that ESG is highly political and it has been somewhat weaponized … in Europe, things are more progressive, there is a much more accepted focus on ESG, as well as energy transition,”

Reuters | December 7, 2023 

Stock image.

HanETF and Sprott Asset Management on Thursday jointly launched an exchange-traded fund in Europe that tracks copper miners with a lower carbon footprint, in what will be their third fund to be unveiled together in the last two years.


Sprott Asset Management CEO John Ciampaglia noted the use of a greenhouse gas emission screen as the ETF’s most innovative feature.

According to Ciampaglia, the fund relies on a model that helps evaluate the amount of carbon dioxide produced in a miner’s supply chain for every pound of copper it produces and then excludes firms that perform worse in terms of their carbon footprint.

“Copper will be the backbone of the energy transition,” Ciampaglia also said, pointing to its use in electric vehicles and solar industry.

The Sprott Copper Miners ESG-Screened UCITS ETF will track the Nasdaq Sprott Copper Miners ESG Screened Index, with Ivanhoe Mines and Antofagasta among the ETF’s biggest holdings.

It is also Europe’s only Article 8 copper miners ETF under the Sustainable Finance Disclosure Regulation (SFDR), which mandates how asset managers should disclose ESG factors, the firms said.

Although funds that incorporate environmental, social and governance (ESG) goals into their mandate have struggled this year amid a sharp rise in interest rates and economic uncertainty, their performance in Europe has been better than in the United States.

“In the US, it’s fair to say that ESG is highly political and it has been somewhat weaponized … in Europe, things are more progressive, there is a much more accepted focus on ESG, as well as energy transition,” Ciampaglia said.

Ciampaglia and HanETF’s head of research Tom Bailey added that they decided to launch the fund following conversations with a large institutional investor in the DACH region (Germany, Austria and Switzerland).

The ETF has an expense ratio of 0.59%.

Sprott Uranium Miners UCITS ETF and Sprott Energy Transition Materials UCITS ETF are the other two ETFs jointly launched by the asset managers.

(By Bansari Mayur Kamdar)

There’s a way to quit coal without wrecking jobs and communities
Bloomberg News | December 7, 2023 

Yallourn Power Station. Credit: Wikipedia

It’s a persistent global conundrum: Can policymakers close coal mines and power plants without ruining local economies in the process?


In August, a delegation of Vietnamese officials looking to answer that question took the two-hour drive east from Melbourne into the Latrobe Valley. Bundled against the Australian winter, they sped past the cooling towers of the Yallourn power station and the open-cut mines near Morwell, vestiges of the region’s rapidly dying industry. The 18 members of parliament visited a new battery facility built on the site of a now-defunct coal-fired power station, and met with local leaders to discuss their approach.


After almost a century as Victoria’s central provider of electricity — some 90% comes from Latrobe and the broader Gippsland area — most of its mines and power stations are scheduled to close between 2028 and 2035, if they haven’t already. Yet the area has kept decline and diseases of despair at bay, with plans for solar farms, battery storage and the country’s first offshore wind installations. Unemployment is low and the population — currently about 300,000 — is growing, along with household income. Real estate values are rising.

“There is a confidence, in the community, that we’re going to be okay,” said Chris Buckingham, head of the Latrobe Valley Authority, a regional agency created in 2016 to help manage the coming energy transition. “This is not a smiling-while-drowning conversation, right? This is about, if we get this right, if we work together in a harmonious way, we’re far more likely to come out ahead.”

Coal, the dirtiest fossil fuel, still generates about a third of the world’s electricity. It’s especially common in emerging economies, which need fast, cheap, reliable energy and often argue that they shouldn’t have to jeopardize their development to solve a problem that, historically, they didn’t create. Renewable energy has made huge strides, but problems run deeper in countries with constrained infrastructure, and there’s no easy solution: Already-rich countries have yet to deliver the billions promised to fund a transition, and the economic blight triggered by the closure of mines and power plants in the US, UK and Europe is hardly inspirational.

Still, pressures to quit coal are accelerating. All parties to the Paris Agreement have to submit an emission-cutting plan to the United Nations, and foreign funding for coal has largely dried up. The 2021 COP climate talks in Glasgow introduced aid packages to help developing nations speed the closure of coal plants.

Last year, Vietnam signed one of the world’s largest climate finance deals worth $15.5 billion, designed to encourage an orderly coal phase-out that also protects its economy. By its own timeline, it has about 25 years to burn the fuel — and to plan for its peaceful demise.

The idea of slowly, deliberately phasing out coal is relatively new. It hinges on cooperation from the fossil fuel industry and compromise from climate activists. The opportunity to learn from earlier, chaotic mine closures elsewhere is, ironically, a byproduct of Australia’s historically late arrival to climate action. The country is still highly reliant on coal — more so than Vietnam, by some measures — but the Latrobe Valley transition is critical to its new net-zero ambitions.

Emerging economies have less money to spend and a wide range of competing priorities — including growth, which depends on more power, not less. But the broad challenges are similar enough, said Thang Do, a climate policy researcher at Australian National University who organized the study tour for the Vietnamese lawmakers.

“People are worried: ‘If we shut down coal, what will the alternatives be? And how about the workers in the mines and the plants, and their families?’” he said. “You cannot just close the coal power next year or even in the next five years. But planning — that is something policymakers could do.”

The pain of past economic upheavals remains sharp in the Latrobe Valley. People are still talking about the thousands of jobs destroyed with the privatization of the state electricity commission in the 1990s. Then there was the abrupt closure of the Hazelwood mine and power station in 2017, three years after the devastating fire that spewed smoke for six weeks and caused damage upwards of A$100 million ($66 million at today’s exchange rates).

Even before that, Tony Wolfe had started advocating for a shift to renewables. He was 15 years old when he started as an apprentice electrician at Hazelwood; he wrapped his career 44 years later at AGL Energy Ltd.’s Loy Yang B. By the midpoint, though, he said, “I could see the writing on the wall. I was working at a power station for 29 years that was designed with a 35-year life span. We hadn’t even talked about planning for another one.”

Wendy Farmer, whose husband worked at Hazelwood and volunteered for the local fire brigade, came to a similar realization. In the wake of the fire, she grew furious at the failure of government and industry — and her neighbors — to acknowledge the harms caused by coal.

“If your baby can’t breathe at night because of the pollution in the air, you get it. It becomes personal,” said Farmer. She started a group called Voices of the Valley. Initially focused on demanding accountability for the fire, they were soon calling for a total overhaul of the area’s economy.

“We would say, ‘We need to transition, we need to improve our health,’” she recalled. “And they would say, ‘We’ve got coal ’til 2048, we don’t need to transition.’”

Voices of the Valley developed its own proposal for the region, then began to lobby the Victoria government. When the state established the LVA and announced A$266 million in funding for the region, Energy Minister Lily D’Ambrosio tweeted, “We heard you @wendyfarmer_.”


One of the LVA’s first tasks was to support the laid-off Hazelwood workers, almost all of whom ended up either with early retirement packages, placements in another local facility, or roles in the long process of decommissioning the mine.

It also became a champion for a slew of local projects, including a new performing arts center and a A$57 million geothermally heated aquatic center. The spending demonstrated investment, not abandonment, and softened community attitudes toward an agency that ultimately represented economic upheaval.

The LVA also began to develop relationships with renewable energy developers like Macquarie-backed Corio Generation, and Elanora Offshore, a five-member consortium that includes CLP’s EnergyAustralia and Royal Boskalis Westminster NV. There are now more dozens of large projects underway in Gippsland, worth about $55 billion in planned capital expenditure.

In general, these don’t require as many workers as coal mines and plants. But demand will be high for at least 15 years, estimates Charles Rattray, chief executive officer of Star of the South, a Victoria-based company that applied for one of the off-shore wind concessions.

“You have thousands of construction jobs” to build the projects, he said. “And there’s ancillary work in catering, accommodation, transport, the local supply chain.”

The LVA’s 2022 transition roadmap reflects more than 2,000 community meetings, Buckingham points out, and the work of a 48-person steering committee. “A successful transition for us is built from the ground up,” he said.

When Australia’s Labor Party won its first majority in nine years in 2022, it set out to reverse the previous administration’s entrenched denial of climate change and to shore up weakened ties with Southeast Asia. The clean energy transition is now listed as a “ pressing priority” of Australia’s $1.24 billion regional development aid. The country has committed $105 million to support sustainable economic growth in Vietnam.

The government also sponsored the Vietnamese delegation’s tour. Australia’s climate policies are far from ground-breaking, but it’s ahead of its regional neighbors.

“There’s high demand for learning from Australia’s experience,” said Thang, the academic. The Vietnamese wanted to know about the practicalities, policy instruments and technology, he said.

They spent a week in lectures at the Australian National University in Canberra and a week on site visits, including to the Latrobe Valley. The Vietnamese government declined Bloomberg Green’s requests for comment. Buckingham said their session was so animated they worked through the lunch break. “They were absolutely staggered by the age of our plants,” he said.


Coal is Vietnam’s single largest source of electricity and will continue to grow, the government says. At least six plants are set to come online by the end of the decade as the middle class expands and companies set up factories there.

That means it’s too early to think about taking coal plants off line or planning for the roughly 200,000 jobs at risk, said John Rockhold, chairman of the power and energy working group for the Vietnam Business Forum. At the same time, the country has set a 2050 net-zero goal. The country has already become a refuge for solar panel manufacturers eager to avoid the US tariffs on Chinese equipment.

“The government’s policy is: Let’s get our own renewable industry up and running,” Rockhold said. “We have the rare earths, we have the capabilities. Maybe we should slow down and build our own.”

This kind of long-term planning isn’t the most radical idea, but until recently, the coal industry — and its powerful allies — successfully argued there was no need, that climate change was overblown and its causes indeterminate. Net-zero commitments, with their timelines and interim benchmarks, force a longer view. They can also help shift the narrative from disappearing jobs to the new roles being created, as US President Joe Biden did in promoting the Inflation Reduction Act, a stimulus bill plowing billions of dollars into green technologies.

“You can’t just stand there and say, ‘Shut power stations,’” said Farmer, who after years of unpaid activism started in 2021 working as a community organizer for Friends of the Earth. “You just can’t take things away from people without offering solutions.”

For now, that means letting coal fires burn longer than the market — or the planet — can really tolerate. Rather than suffer another hasty closure, Australia has struck agreements to keep Gippsland’s remaining power stations open. Vietnam plans to experiment with so-called clean coal practices, which marginally reduce CO2 emissions. Among other trade-offs, those kinds of policies can distort the market for clean energy, discouraging investment just when it’s most needed.

In return, communities get a chance to survive the upheaval, maybe even to thrive. “People are rightly very proud of having provided electricity for Victoria for the last 100 years,” Wolfe said. “I think we’ve known for some time that what we’ve been doing is not great, that there’s better, cleaner ways to do it.”

“We have an opportunity to build an entirely new workforce, and that’s what I’m excited about.”

(By Janet Paskin)

China’s CMOC says geopolitics helped drive Australia sale

Bloomberg News | December 7, 2023 

MINING IS NOT SUSTAINABLE

Northparkes operation. (Image from Northparkes’ Facebook page)

Chinese copper and cobalt miner CMOC Group Ltd., which sold a controlling stake in its Northparkes mine in Australia earlier this week, said a changing geopolitical situation was one of the reasons for the divestment.


A media representative for the company — confirming comments made by a CMOC official to local media on the sale — said those shifts and a challenging outlook meant it was unlikely to expand its operations in Australia, which ultimately limited future synergies.


Beijing’s relationship with the US and its allies has been fraying, with Washington attempting to build supply chains for ingredients crucial to the energy transition to lessen reliance on China. Australia and Canada have also taken measures to limit Chinese participation in their resources sector.

“Western governments have woken up to the risk that their supply chains of critical minerals could be cut off, or severely squeezed if China dominates supply,” said Grant Sporre, an analyst at Bloomberg Intelligence. That means “a tougher environment for further acquisitions,” especially in developed nations, he said.

CMOC, based in Luoyang in Henan province, agreed earlier this week to sell its 80% stake in the Northparkes copper and gold mine to Australian competitor Evolution Mining Ltd. for $475 million.

Along with peer Zijin Mining Group Co., CMOC has for years been at the forefront of China’s mineral expansion overseas from Africa to the Americas, building copper, cobalt and gold supply. Zijin said in August that it has slowed acquisitions due to high project valuations and geopolitical tensions.

Northparkes’ falling ore quality, meaning its lower metal content, also contributed to the sale, the media representative said, putting annual returns at 15% since the acquisition in 2013. The company has ample capital reserves and will remain open to global acquisition targets, he added.

Chile aims to be among world’s top three cobalt producers

Cecilia Jamasmie | December 8, 2023 

Capstone wants to create a mining district in northern Chile with the integration of its Mantoverde (pictured here) and Santo Domingo operations. (Image courtesy of Capstone Copper.)

Chile, the world’s top copper producer, unveiled this week an ambitious plan to become one of the three largest cobalt producing nations as it simultaneously boosts its lagging copper output.


Declining ore grades, water restrictions and pandemic-related disruptions have seen Chile’s production of the orange metal decline in recent years. That has helped offset a slowdown in demand amid inflation-fighting measures.

Despite the International Copper Study Group’s (ICSG) latest negative forecast, which calls for a 467,000 tonnes surplus next year in 2024, most analysts expect the opposite.

Copper is a key ingredient for the manufacturing of electric vehicles and green technologies and cobalt, also called “blue gold”, is a byproduct of the processing of copper and nickel ores.

For the Chilean government, jumping onto the cobalt wagon is “the next logical step”, Finance Minister Mario Marcel said in a presentation this week.

The economist noted that producing the metal would position Chile as a major supplier of battery metals, as the country is also the world’s second largest supplier of lithium.

Cobalt is used in almost every lithium-ion battery, which in turn power mobile phones, laptops, tablets, bluetooth devices, and even electric toothbrushes.

Getting to the top won’t be an easy task. The Democratic Republic of Congo (DRC) has long been the world’s largest cobalt producer, accounting for 73% of global output in 2022.

Indonesia is in the second spot, with production up more than threefold from 2,700 tonnes in 2021 to almost 9,500 tonnes last year.

According to the Cobalt Institute, the DRC’s dominance is projected to decrease to 57% by 2030 as Indonesia ramps up its cobalt production as a byproduct from its rapidly expanding nickel industry.

The DRC’s supremacy may also be threatened by Chile, according to Pilar Parada, Director of Universidad de Andres Bello’s Center for Systems Biotechnology (CSB UNAB).

Researchers and companies have already taken steps in that direction. Canada’s Capstone Copper (TSX: CS) is one of the companies working on creating a cobalt mining district in northern Chile. The company, born in 2021 from the merger of Capstone Mining and Mantos Copper, recently integrated its Mantoverde and Santo Domingo operations in the Atacama region.

The Vancouver-based miner has said that, in addition to producing 200,000 tonnes of the industrial metal a year, it aims at generating between 4,500 tonnes and 6,000 tonnes of battery-grade cobalt annually.

Chilean Cobalt Corporation, a US-based company, is also conducting exploration at its La Cobaltera cobalt project in the San Juan district of the Atacama region. The goal is to progress to the pre-feasibility stage by the second or third quarter of 2024.

The country is also looking at recovering cobalt from tailings. “Just by extracting the metal in the tailings, Chile could displace Indonesia to become the world’s second-largest producer,” Parada said in an October interview with Latercera.

According to a research commissioned by Chile’s state development office Corfo and the National Geology and Mining Service (Sernageomin), the country has the potential to produce 15,000 tonnes of cobalt from its tailings annually in the medium term.

Green cobalt

With the right technology, Chile could extract the mineral in a cleaner way and at lower production costs, experts say.

One of the methods under study is the application of biotechnology to reprocess tailings to recover cobalt.

This production method could also reduce the environmental risk currently posed by the mining tailings deposits, 86% of which are abandoned or inactive, according to a 2022 Sernageomin survey.

It would also mean additional funding for Chile. Given the potential production based on the current projects and production from tailings and mines, at $33,003 per tonne in November, the country’s annual income would be about $700 million at today’s prices.

Brazil says talks on compensations over Vale-BHP dam burst are halted

Reuters | December 6, 2023 |

October 2017 aerial image of the area affected by the tailings dam failure in Mariana, Minas Gerais, Brazil. (Photo by Vinícius Mendonça, courtesy of Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).)

Brazilian authorities said on Wednesday that talks with miners Vale, BHP and their joint venture Samarco regarding additional compensation for a burst tailings dam in 2015 were halted since the firms did not present a new proposal.


There is still no date for the negotiations to resume as the companies, which own the dam that collapsed in the state of Minas Gerais have refused to submit a new proposal within a pre-established deadline, a group of state and federal government bodies said in a statement.

The dam collapse in the southeastern city of Mariana caused a giant mudslide that killed 19 people and severely polluted the Rio Doce, compromising the waterway to its outlet in the Atlantic Ocean.

The companies’ latest offer presented had “insufficient amounts for the proper reparation of the Rio Doce,” the statement said.

Samarco said it remains open to dialogue and continues to participate in negotiations of the agreement, “in order to move forward with a definitive and consensual solution, based on technical, environmental and social criteria.”

The companies, through the Renova Foundation, had allocated 33.38 billion reais ($6.81 billion) in reparations and compensations as of September.

($1 = 4.9032 reais)

(By Roberto Samora and Peter Frontini; Editing by Anthony Esposito and Kylie Madry)

State auditors recommend Freeport Indonesia be fined for smelter delays

Reuters | December 6, 2023 |

The construction of the smelter is part of the downstream program launched by the government. Credit: Freeport Indonesia

Indonesian state auditors have recommended the energy ministry fine Freeport Indonesia for delays in its plan to build a copper smelter, estimating that such a penalty could amount to $501.94 million, a report issued this week showed.


The Audit Board of Indonesia, known by its local language abbreviation BPK, made the recommendation as part of a summary of its audit results in the first half of 2023, which was submitted to parliament on Tuesday


PT Freeport Indonesia (PTFI), which mines copper and gold in Grassberg in Indonesia’s Papua, is operated by US miner Freeport McMoran, but the majority of its shares are owned by Indonesian state-owned company MIND ID.

The company is building a $3 billion copper smelter in East Java, but the project has faced delays.

Freeport Indonesia said the construction plan has been agreed with the government and the progress, which has reached more than 83% as of November, has been in accordance with the agreed plan targets.

“Regarding the delay fines, we continue to coordinate with the government,” said Freeport Indonesia’s spokesperson Katri Krisnati.

In a memorandum of understanding in 2015, Freeport agreed to build a copper smelter and placed a bond to guarantee the smelter construction in order to obtain an export permit.

Later on, in a December 2018 deal, Freeport and Jakarta agreed that the miner would complete the smelter within five years.

The smelter broke ground in 2021 after being delayed due to the Covid-19 pandemic and is scheduled to start production in mid-2024, before running in full capacity by end of next year.

BPK in its audit found that PTFI has not measured its smelter progress against its initial plan and argued this meant PTFI qualifies to be charged an administrative fine.

The energy ministry did not immediately respond to a request for comment. By law, officials must respond to BPK’s recommendations, though they are not always followed.

(By Bernadette Christina Munthe and Gayatri Suroyo; Editing by Kanupriya Kapoor and Chizu Nomiyama)

URANIUM
enCore Energy to sell 30% of Alta Mesa project to Boss Energy

Staff Writer | December 6, 2023 |

Rosita central processing plant (Image: enCore)

enCore Energy (TSXV: EU; NYSE American: EU) said on Wednesday it will sell 30% of its Alta Mesa project in South Texas to Australia’s Boss Energy (ASX: BOE) for $70 million.


enCore acquired the Alta Mesa project from Energy Fuels (TSX: EFR) in February 2023. The project has an annual production capacity of 1.5 million lb. of uranium oxide.

Boss Energy will pay $60 million in cash, invest $10 million into enCore shares at $3.90 per share, and loan the company up to 200,000 lb. of uranium oxide for enCore’s commercial use over the next year.

enCore will use the net proceeds from the deal, expected to be completed in February 2024, to accelerate its uranium production pipeline in South Texas and develop other projects.

“The accelerated production plan is designed to take advantage of what is projected to be a very strong uranium market over the next decade,” said enCore executive chair William Sheriff in a news release.

enCore will also establish a new unit to hold the Alta Mesa project and it will be jointly owned by the two companies.

The company officially became a uranium producer last week with the restart of the South Texas Rosita in-situ uranium central processing plant.

The Rosita plant is located about 60 miles from Corpus Christi, Texas, where enCore is headquartered. It has a capacity of 800,000 lb. of uranium oxide per year and the ability to expand capacity within the existing licence.

The company is anticipating its first shipment to occur over the course of the next 45 to 60 days. The uranium price has seen a relentless rise to $81 per lb. from under $50 per lb. at the start of the year as a gap between supply and demand emerges.

Shares of enCore rose 2.4% in New York on Wednesday morning. The uranium company has a market capitalization of $672 million.

Young Chinese spurn traditional investments in favour of gold

Reuters | December 5, 2023 |

Credit: Chow Tai Fook

Gold buyers in China are getting younger, as a property market downturn, weakening stocks and currency and low bank deposit interest rates have left them with dwindling options to save for rainy days in a sputtering economy.


The trend underscores heightening uncertainty about growth prospects in the world’s second-largest economy, which has not recovered from Covid-19 lockdowns as fast as consumers and job hunters had expected.

“The employment market has not been very good,” said Linda Liu, 26, who works for a pharmaceuticals company in Beijing, but worries about job stability. “Buying gold makes me feel better.”

“I want gold jewellery instead of diamonds for my wedding.”

China is the world’s top buyer of physical gold and analysts say this year it has been an increasingly important driver behind a rally in global spot gold prices, which hit all-time highs on Monday.

Analysts expect Chinese demand for the safe haven metal to remain high as economic growth grinds lower in coming years and foreign investment outflows weigh on the yuan, while the property market is still looking for a bottom.

“Incomes are not really appreciating, real estate is not really appreciating, the stock market is not really appreciating,” said Jacques Roizen, managing director of consulting at Digital Luxury Group in Shanghai.

“Gold is a little bit of a unicorn in this environment.”

Gold and silver jewellery have been among the best performing consumer goods in China this year, with a 12% rise in value year-on-year in January-October, outpaced only by garments, according to the latest retail sales data.

A Chinese consumer survey released by jewellery firm Chow Tai Fook in late October found 70% of consumers aged between 18 and 40 intend to purchase pure gold jewellery.

While China has long been a top global consumer of gold jewellery, Chow Tai Fook Jewellery Group managing director Kent Wong said that traditionally, customers in China have been older.


“We’ve found people aged 18 to 24 have started to buy gold jewellery, and we were very surprised by this,” Wong said.

Chinese social media discussions about steady gold accumulation abound, with users recommending small jewellery and marble-like gold “beans” as small as one gram that could be purchased even by those with low incomes for 450 to 550 yuan ($63 to $77).

Beijing student Nadia Qi, 21, has spent as little as she could of her pocket money on daily necessities while spending more than $2,000 on gold bars and jewellery so far this year.

“The only thing that I can trust and makes me feel relatively safe now is investing in gold,” said Qi, who plans to buy at least 20 grams a year for rainy days. “The deposit rate is way too low, and investing in the stock market is too risky.”

The one-year deposit rate at major Chinese banks ranges from about 1.5% to 1.8% and has declined in recent months.

China and India, the world’s two biggest gold buyers, together account for more than half of total global demand.

In China, gold trades at a premium to the global spot price. That spread has been $25 to $35 per ounce in the past week, down from a record high of $121 in mid-September, but still above its usual $5 to $15 range.

Office worker Yang, 38, from the central Hunan province, is not discouraged by the rise in gold prices, arguing “the yuan has been depreciating, financial investment is too risky … and the property market remains disappointing.”

“There are not many choices left,” said Yang, who only gave her surname for privacy reasons. “Gold is like hard currency, and this is especially true in the face of mounting geopolitical uncertainties for the moment.”

($1 = 7.1424 Chinese yuan renminbi)

(By Casey Hall and Amy Lv; Editing by Marius Zaharia and Jamie Freed)