Markets https://www.bloomberg.com/news/arti...llars-goes-missing-in-china?srnd=premium-asia Copper Worth Nearly Half a Billion Dollars Goes Missing in China Onshore depot in Hebei has 200,000 tons less than it should Risky financing in China exposed by volatility, economy woes Photographer: Carla Gottgens/Bloomberg Copper concentrate Bloomberg News 4 August 2022 A group of Chinese companies are investigating why a commodities storage site in northern China is holding only one third of the copper concentrate they were financing, according to people familiar with the situation. Traders from more than a dozen mostly state-owned firms gathered in Qinhuangdao city this week after becoming aware of the missing material following concerns into the borrower’s finances, said the people, who asked not to be identified as they aren’t authorized to speak publicly. The group has a total claim on 300,000 tons of concentrate worth about 5 billion yuan ($740 million), but there’s only 100,000 tons at the depot, the people said. That puts the dollar value of the missing material at about $490 million. The copper discrepancy in Hebei province comes just months after a separate dispute, spanning several locations in southern China, over missing aluminum tied to $1 billion of lending. Scrutiny of commodities financing and warehouse operations in China is growing, especially as volatile global markets expose some of the more opaque funding arrangements to greater risk. Huludao Risun Trading Co., a medium-sized merchant that purchases between 800,000 and 1 million tons of imported copper concentrate a year for distribution to domestic Chinese smelters, said the people. The company typically relies on larger counterparties to finance the materials, and then repays the loans with interest and fees after finalizing the trade. Nobody picked up several calls to the company’s main number, and there was no immediate reply to an email seeking comment. Risky Business Commodities traders have faced a tougher environment this year as banks turn cautious in the wake of high-profile losses -- especially in the nickel market -- and huge price volatility exacerbated by Russia’s invasion of Ukraine. That’s encouraged alternative financing, in which smaller, privately-owned firms pledge their goods to large state-run traders to get funding for operations. But that route is also exposed to risk as the growth model that’s sustained China’s economy for decades shows signs of strain. Some state-owned enterprises, including the country’s top steel mills, have asked units to cut back on operations -- including third-party trading -- to preserve cash and avoid liquidity crunches. The impact on the spot concentrate market of the Qinhuangdao copper dispute could be limited, consultancy Mysteel said in a note on Wednesday. Chinese smelters who take material from this merchant should be able to use their existing inventory, while traders could re-route cargoes due to arrive at the Qinhuangdao site to other destinations, it said. — With assistance by Alfred Cang, and Winnie Zhu
BHP’s OZ Minerals bid is really about Olympic Dam BHP has tried just about everything to make Olympic Dam work. An $8.3 billion bid for OZ Minerals suggests it will leave no stone unturned in the next attempt. Peter Ker Resources reporter Aug 8, 2022 https://www.afr.com/companies/minin...d-is-really-about-olympic-dam-20220808-p5b87n There was an uncomfortable moment at BHP’s 2018 annual meeting of shareholders in Adelaide when BHP chairman Ken MacKenzie appeared to chide his then Minerals Australia president Mike Henry over his public commentary on Olympic Dam. Eleven days before the meeting, Mr Henry had participated in an article in The Australian Financial Review which questioned why BHP had been so patient with the under-performing Olympic Dam through an era in which lots of other better performing assets were sold or demerged to South32. An aerial view of one of the Olympic Dam mines. AP Henry had accurately and succinctly said in the article what most people who follow BHP knew to be true. “Olympic Dam as it stands today is not of a BHP scale, it is not where we want it on the cost curve and it is certainly not generating BHP-like returns, so there is a clear recognition that the Olympic Dam of today isn’t what we want to have in the future,” Henry said in October 2018. Concerned that BHP might be losing its love for the state’s biggest mine, some passionate and parochial South Australians quizzed the chairman about those comments at the 2018 meeting in Adelaide. MacKenzie responded pointedly by saying Henry would have chosen his words differently if he had his time again. Four years on, MacKenzie has seemingly given Henry the nod to spend more than $8 billion turning the Olympic Dam of today into something different by acquiring the mine’s neighbour, OZ Minerals. While the bid for OZ Minerals is partly motivated by a desire to get more nickel into BHP’s Western Australian smelters and refineries, it is mostly about finally solving the puzzle at Olympic Dam. The simplest way to create value in mining OZ has two copper mines and Olympic Dam falls right in between them, meaning the bid hits on the simplest way to create value in mining; by combining adjacent assets and sharing infrastructure to unlock extra capacity. But nothing about Olympic Dam is simple; the copper occurs inconsistently across a giant resource that has been described by insiders as “like a chequerboard”. High levels of uranium in the ore force BHP to run the entire processing chain on site at Roxby Downs and produce sheets of copper metal. OZ’s lower uranium levels allow it to run a much easier system; it exports an intermediate concentrate that others turn into metal interstate or overseas. BHP has tried just about everything to turn Olympic Dam from underperformer into something special. Plans to build a giant open pit, a big heap leach processing operation, then a brownfield expansion came and went over the past 12 years, although the notion of building a giant heap leach operation hasn’t been dismissed permanently. Consolidation of OZ Minerals was for years suggested but dismissed as a possible solution; after all, the one thing Olympic Dam has never lacked is an abundance of resource. The mine could run for 500 years at current production rates before it would start to scrape the bottom of the proverbial barrel that mother nature placed in the South Australian outback, and that’s before you count the extra copper BHP found at Oak Dam 60 kilometres away. Oak Dam had looked increasingly important to the future of Olympic Dam in recent years, as BHP mulled what benefits could be achieved by blending its ore with that at Olympic Dam. The fact BHP has this week gone looking for external copper resources to add to Olympic Dam’s enormous mineral endowment raises the question as to whether it now expects Oak Dam to be a modest contributor at the margins, rather than a revolutionary force at Olympic Dam. People close to BHP vigorously reject the theory that a bid for OZ Minerals is tantamount to a concession that Oak Dam is somehow flawed or underwhelming. No short-term panacea But the OZ bid suggests BHP either does not see Oak Dam as the short-term panacea for Olympic Dam, or BHP wants to make sure it has access to absolutely every option in the Gawler Craton toolbox to make Olympic Dam work. So what benefits could come by consolidating OZ’s Prominent Hill and Carrapateena mines with Olympic Dam? Some believe it could allow Prominent Hill and Carrapateena to be mined in a way that does not need to avoid patches of ore with high levels of uranium; the whole lot could be scooped up knowing the uranium could be treated at Olympic Dam. The two companies have previously shared infrastructure like power and roads too, and while some of those relationships have been abandoned as OZ matured, there could be efficiencies created by combining them. The South Australian government will hope that the efficiencies are not delivered by cutting OZ’s white-collar staff in Adelaide. Then there is the financial side of things; BHP’s balance sheet would mean that all OZ’s growth assets could be developed at once. OZ will need to source funds from debt or equity in the near future to do that. At the 2018 shareholder meeting, Mr MacKenzie said the reason BHP had been so patient with Olympic Dam was because the opportunity was so large if BHP could get it right. “Olympic Dam is an opportunity for us to move the needle,” he told the meeting. A bid for OZ Minerals shows that BHP is throwing absolutely everything at getting Olympic Dam right this time. If this plan fails like the open pit and the brownfield expansion did, it’s hard to imagine what is left for BHP to try.
The EV race is turning a gold rush haven into a battery hub Bloomberg News | August 8, 2022 |Battery Metals Australia Copper Lithium https://www.mining.com/web/the-ev-race-is-turning-a-gold-rush-haven-into-a-battery-hub/ Barrick/Newmont’s Fimiston open-pit gold mine in Western Australia. (Image by Popo le Chien, Wikimedia Commons). Gold has long dominated the Western Australian city of Kalgoorlie, born in a late 19th Century prospecting rush and home to one of the world’s largest open pit mines, nestled right next to residential streets. Blasts to dislodge precious-metal laced rock from the more than two-mile-long Super Pit still frequently rattle the main street. As about 2,700 executives, investment bankers, and industry stalwarts gathered in the precious metals hub last week for Australia’s key annual mining forum it was clear where the industry’s focus lies. All attention is on the frantic hunt for battery metals to deliver the world’s shift to electric vehicles. The most in-demand mining leaders are no longer those who’ve unearthed vast troves of glittering gold, but instead, the companies delivering previously shunned projects to yield volumes of lithium, nickel, manganese, and cobalt. A rush of recent supply deals led by Ford Motor to add contracts for battery metals from Australian mining companies is drawing new attention to a nation that already provides about three-quarters of Tesla Inc.’s lithium needs, and is aiming to deliver a rapid expansion in the production of a whole suite of raw materials. There are few better examples of that gold-to-electric-cars transition than IGO, which has added investments in nickel and lithium while selling off a stake in an underground gold operation. Executives shuttled conference delegates out to see Greenbushes, the largest hard rock lithium mine, and the Kwinana refinery that converts raw materials into specialist battery chemicals. Hitting global net-zero goals will require a dramatic increase in renewable energy installations and in the adoption of electric vehicles, Peter Bradford, IGO’s managing director, told the conference. “To achieve it we are going to need lots and lots of metal,” he said. IGO and its partners aim to double production capacity at Greenbushes by 2027. The mining sector’s largest company, BHP Group, is also seizing on the outlook for rapidly increasing battery metal demand. BHP said on Monday it had made a takeover approach to add OZ Minerals, a producer of copper and nickel with mines in Australia and Brazil. Though the proposal has been rejected, analysts see the combination as compelling. OZ Minerals shares advanced 35% in Sydney trading Monday. BHP forecasts electric models will account for 60% of new car sales by 2030, rising to 90% by 2040, said Jessica Farrell, asset president of the Nickel West unit, a once-unwanted collection of mines, smelters, and refineries, including an operation in Kalgoorlie, that’s had its fortunes transformed by EV sector demand. The unit this month added a potential supply agreement with Ford to earlier pacts with Tesla and Toyota Motor Corp. “We anticipate demand for nickel in the next 30 years will be 200% to 300% more than the previous 30 years,” Farrell told the conference. Lithium producers remain the most in demand. Liontown Resources’ executives used the conference to celebrate recent pacts with Tesla, Ford, and LG Chem, while Core Lithium — which also has a tentative deal with Elon Musk’s carmaker — told delegates its project in the Northern Territory is on track to deliver the first shipment before the end of the year. Pilbara Minerals, which counts Great Wall Motor Co. and battery producer Contemporary Amperex Technology among its partners, this month received a record-equaling bid for its spodumene — a partly-processed form of lithium — at one of its regular auctions. “What we’re seeing now is record-breaking demand and prices,” Pilbara CEO Dale Henderson said in an interview at his company’s Pilgangoora site in a remote region in the north of Western Australia. (By Harry Brumpton)
BHP likely to raise bid for ‘strategically sensible target’ OZ Minerals, say analysts Reuters | August 9, 2022 | Markets Top Companies Australia Copper https://www.mining.com/web/bhp-likely-to-raise-bid-for-strategically-sensible-target-oz-analysts/ Underground operation at the Prominent Hill mine. Photo by OZ Minerals. BHP Group Ltd will likely raise its A$8.34 billion ($5.82 billion) offer to buy Australia’s OZ Minerals, analysts said after the global miner was rebuffed in its pursuit of the nickel-copper miner on Monday. OZ rejected BHP’s A$25 per share offer, terming it undervalued and “opportunistic” as it was tabled when copper prices and its stock price have fallen from recent peaks. “While OZ’s board rejected the offer based on price, this is a strategically sensible target as it would enable BHP to unlock more of the value from (its copper mine) Olympic Dam and would also add to BHP’s Western Australian nickel business,” Jefferies analysts said in a note. BHP plans to zero in on battery metals like nickel and copper to align itself with a global push towards electrification and decarbonisation, as firms race to capitalize on burgeoning interest in clean energy and electric vehicles. While the companies did not say if another bid was in the offing, analysts expect a higher offer and touted the likelihood of a bigger takeover battle. Brad Smoling, managing director at Smoling Stockbroking, said other players would eye OZ’s assets in light of the green energy push, and suggested a new offer could be up to A$30 per share. “Other buyers may be interested in OZ Minerals with many miners optimistic on the outlook for copper. Potential acquirers such as Glencore, Anglo American, Teck Resources, and so on are in very strong financial shape and able to bid,” said Jon Mills, an equity analyst at Morningstar. Mills added, however, that BHP was likely overpaying for the deal at the current price, though that would not deter it from making another approach. “If BHP revises its offer price by another 20% to 25% then the OZL board may accept the offer,” said Kunal Sawhney, chief executive officer of Kalkine Media. ($1 = 1.4331 Australian dollars) (By Shashwat Awasthi and Tejaswi Marthi; Editing by Maju Samuel)
Magnesium demand could double in just 8 years. 49 minutes ago | Reuben Adams https://stockhead.com.au/resources/...hese-asx-stocks-are-hoping-to-catch-the-wave/ 75% lighter than steel and 33% lighter than aluminium, magnesium has the highest strength-to-weight ratio of all common structural metals. It is a key raw material for four important global industries: aluminium alloying (which uses up to 6% magnesium), magnesium alloy for the automotive sector, steelmaking as a desulphurising agent and titanium sponge production. Like many raw materials, most of the world’s 1 million tonnes per annum of supply (about 85%) is produced by China, which also exports a sizeable volume. Late last year, the global magnesium market was turned on its head when the low-cost Chinese producers slashed output by ~50% due to ongoing energy sector reform. Prices went through the roof. In an earnings call, Volkswagen’s head of purchasing said a shortage was expected. “We cannot forecast right now if the shortage on magnesium, which will happen definitely according to planning, will be bigger than the semiconductor shortage,” Volkswagen’s Murat Aksel said. While prices have now settled back to pre-spike levels, CM Group’s Alan Clark says the volatility is far from over. “That price spike was driven by the Chinese authorities clamping down on their semi-coking ovens,” says Clark, who has worked in the magnesium sector for over 25 years. “Many Chinese magnesium producers are co-located with coking ovens, because they supply heat energy at low cost to drive the process. “So, when the local authorities threatened to shut down more than half the coking ovens because of their poor environmental performance, there was an enormous threat to magnesium production.” There is a threat of more shutdowns, Clark says. “There is still some [government] policy which has to be worked through, and we don’t expect to see that until later this year,” he says. “If the government is just as ruthless in its approach to the semi-coking industry when the policy is next released, we might see another price spike.” The 5-year magnesium price chart, including that hectic spike in 2021. Pic: Tradingeconomics The car sector: a major growth industry The automotive sector is the key growth area for magnesium demand. In last four years, aluminium sheet containing up to 6% Mg was used in cars for the first time, as producers look to produce lighter, more CO2 efficient vehicles, near term producer Latrobe says. “Combined with the surge in EVs, magnesium demand is set to drastically increase as car producers look to ‘lightweight’ heavy EVs,” it says. “China, the world’s biggest car producer, has a 13-year plan to increase Mg in cars from 8.6kg in 2017 to 45kg in 2030. “This will generate 1 million tonnes of new demand per annum [alone].” That’s a doubling of demand in eight years. While this prediction may be at the bullish end, the fact remains – there is growing pressure on automotive companies to reduce the weight of their vehicles. Add to this the drive to secure supply chains outside China, and there are numerous new magnesium projects popping up around the world. “They have been inspired by two things: the spike in prices we saw last year, and the drive to secure a supply of critical minerals, which will become much more important to supply chains in the years ahead,” Clark says. But BEWARE: the past is littered with failed projects China production dominates because they use a relatively low-cost and proven, albeit dirty, method to produce magnesium metal. And that’s where magnesium production differs from other metals, like copper. It is less about the ore feed, and more about the technology used to extract the metal. “Magnesium is not nearly as much about the raw material [which can come from seawater, magnesite, dolomite, and even fly ash] as it is about the technology and the input costs into that technology,” Clark says. “That is a critically important part of the magnesium supply equation that perhaps people don’t understand as well as they should. “One of the advantages for Chinese producers is that the tech used is simple, commercially proven and very well known. “So the technical risk is so much lower. “When it comes to competing on cost, global producers are always going to be up against proven, low-cost Chinese production.” Elevated technical risk has led to notable failed attempts to build Western projects in the past. Australia had a go at developing a magnesium industry 20 years ago, when AMC raised hundreds of millions of dollars from investors to build the Stanwell project near Rockhampton. The plus-billion-dollar project was mothballed before it even got off the ground. There have been others, like SAMAG in South Australia and Magnola in Canada. “They all suffered a similar fate, none of the projects went ahead in the end,” Clark says. “The problems were rooted in capital cost overruns, operating cost blowouts and mounting technical risks. “All three have the potential to cause problems for this next generation of magnesium projects in the future.”
About 50kg of nickel goes into each Tesla battery but the world isn't producing enough to keep up with demand About 50kg of nickel goes into each Tesla battery but the world isn't producing enough to keep up with demand By business reporter Rachel Pupazzoni 13 minutes ago https://www.abc.net.au/news/2022-08...rgy-race-to-produce-to-match-demand/101334424 Australian nickel is in high demand. (Rachel Pupazzoni, ABC News.) Mining companies in Australia are racing to find the next big reserve of one of the world's most in-demand metals. Key points: Australia was once a world-leading producer of nickel but fell behind Now miners are racing to find the next big reserve of the metal, which is a key component of batteries Big companies are ramping up production and are on the hunt for more mines Nickel is a critical metal in batteries, and as the world keeps moving toward renewables, more batteries are needed to store energy. In fact, there's a strong case that much more of it is needed than lithium — a commodity many people know of, because it is in the name of lithium batteries. But there are a variety of batteries made with different metal compositions and, as Elon Musk puts it, batteries need a sprinkle of lithium compared to nickel. "The lithium is actually two per cent of the cell mass," he said at a presentation in 2016. "It is like the salt on your salad." "It's a very small amount of the cell mass and a fairly small amount of the cost, but it sounds like it's big because it's called lithium-ion, but our batteries should be called nickel-graphite, because it's mostly nickel-graphite." About 50 kilograms of nickel goes into each Tesla battery. A report by the CSIRO shows about five times as much nickel (48,006 kilotons) will be needed to meet global demand by 2050 as lithium (8,990 kilotons). The problem the world now faces is finding enough nickel to make all the batteries needed. The search is on to find more nickel to meet the growing demand for the critical battery metal.(Supplied: Panoramic Resources) Nickel lost its shine Australia was once a world-leading producer of the shiny metal. Such was its demand, nickel fetched as much as $US52,000 ($73,700) per tonne in 2007. But just as prices were rising, the global financial crisis hit, sending the commodity spiralling down, to as low as about $US9,000 ($12,700) in October 2008. Dozens of mines closed, including a brand new nickel mine opened by BHP in Ravensthorpe, in the south of Western Australia. It went under in January 2009, having operated for less than a year. For years, BHP tried to sell its Nickel West business, but by the mid-2010s it decided to hold onto it and invest in the commodity. Now, BHP is ramping up its nickel production and is on the hunt for more mines. The search for nickel Last week, BHP announced an unsolicited offer to buy nickel and copper miner Oz Minerals for $8.3 billion. Oz Minerals advised shareholders to reject the bid, saying it was "highly opportunistic" and significantly undervalued the company. BHP has deals to sell its nickel to three major car makers. "I think there's a fantastic opportunity with the Tesla, the Ford and the Toyota agreements," BHP Nickel West asset president Jessica Farrell told The Business. "I think it is a sign of a direct relationship with the miner and the car manufacturers and we're very well placed to provide sustainable nickel to the battery sector." BHP Nickel West's Jessica Farrell wants to increase its nickel reserves so it can fulfil orders from car manufacturers.(ABC News: John Gunn) While Ms Farrell said BHP had enough nickel to fulfil those deals, it clearly wants more. "We have the second-largest nickel sulphide deposit globally in the Agnew-Wiluna belt, which is an incredible deposit," she said. The Agnew-Wiluna belt is a geological strip of land rich in nickel and other commodities that stretches south, roughly through the middle of Western Australia, where other miners also operate. "We're certainly not short of customers … in terms of what we see in the demand trajectory," she said. "We're actively exploring globally, and we've significantly increased our own exploration spend within the portfolio of the land tenure that we have." BHP is set to spend billions of dollars because it sees demand only rising. "If we look out to 2030, we see a 60-per-cent increase in electric vehicles and then out to 2040 we see that going up another 30 per cent, to 90 per cent," she said. "So, we see an incredibly good trajectory for demand — and that's globally. "We'll also see that transition locally, I think, a lot faster than we expect." More mines needed BHP isn't the only company expanding its nickel operations. In June, the ink dried on a deal that saw Australian company IGO buy nickel miner Western Areas for $1.3 billion. The deal adds another two nickel mines to IGO's portfolio: the already-in-production Forrestania mine as well as Cosmos, where mining is due to start by the end of this year. IGO produced 24,000 tonnes of nickel metal concentrate from its Nova mine last financial year.(ABC News: Jon Kerr) It also extends the life of its existing Nova site, where it has been mining nickel since 2017. "Since then, it's just been delivering fantastically consistent production levels for IGO and fantastic financial returns," IGO managing director Peter Bradford told The Business. Peter Bradford runs one of the major nickel and lithium miners in Australia.(ABC News: John Gunn) But it is not the first time IGO has tried to add to its nickel portfolio. In 2019 it attempted to buy Panoramic Resources, a company with a nickel mine called Savannah in the Kimberley region, in the far north-east of Western Australia. While Mr Bradford is remaining tight-lipped on whether it will make another takeover attempt, its purchase of Western Areas does give it a 21.5-per-cent stake in Panoramic. It also has about 10,000 square kilometres of land around Panoramic's mine that it is currently searching for nickel. "What we're exploring for is a repetition of Nova or a repetition of the Savannah mine that Panoramic have," he said. "What we may or may not do with the 21.5-per-cent interest in Panoramic will depend on the success around that exploration of assets in the Kimberley." Panoramic's managing director, Victor Rajasooriar, told The Business he was focused on expanding operations, regardless of IGO. "At the end of the day, they have 21 per cent of the company, they are a supportive shareholder and we can coexist," he said. Panoramic Resources managing director Victor Rajasooriar says he's focused on delivering for shareholders, not another potential takeover by IGO.(ABC News: John Gunn) "Our main purposes is to get this project up and running properly, ramp up to nameplate capacity, work safely and increase shareholder wealth, and they will benefit from that. "That's what we can control, and that's what we will do." Price play The vast majority of nickel mined in the world doesn't go into batteries – it's used to make stainless steel. "But certainly over time, expectations are that [electric vehicles] will become a much larger piece of the demand pie for nickel," resources division director at Macquarie Hayden Bairstow told The Business. "It is about 15 per cent now of the global nickel demand market, if you like, for electric vehicles. "That's certainly grown from basically nothing a few years ago, and the expectations are that it will move into the 20s and 30 per cent of the total, and beyond that over time, as the EV market gets larger and larger." As that demand grows, so too does the price, which swung wildly at the start of 2022. At the end of 2021, nickel was selling for roughly $US20,000 – a far cry from the pre-GFC peak, but more than double its 2009 low. It had been increasing fairly steadily for the last few years, along with battery demand. But as Russia invaded Ukraine the price soared, briefly to as high as $US100,000 a tonne before the London Metals Exchange halted trading and cancelled the day's transactions. Russia is one of the biggest global suppliers of nickel and there were fears of a massive shortage, just as demand was growing. The nickel price has once again stabilised to about $US24,000 a tonne. The next iron ore of mining With prices now back rising in a more normal range and car makers pleading with miners to find more nickel, the sector is trying to expand as fast as it can. "But nickel is very hard to find," explained David Southam, the outgoing managing director of nickel miner Mincor. "It's a race to secure those critical minerals and the Western world has probably fallen a little bit behind [and] is now playing catch up." David Southam stepped down as Mincor Resources managing director this month.(Supplied: Mincor Resources) While Mr Southam may be leaving the company (Mincor's new managing director, Gabrielle Iwanow, steps into the role later this year), he only sees growth for the sector. "It's that fundamental shift in the supply-demand, with the demand for electric vehicle batteries, for battery storage, where nickel content gives you the longevity in the battery that means you can travel further, that has fundamentally shifted," he explained. "It's almost like iron ore, with the Chinese infrastructure boom, that took off, and nickel is very similar." "The price has gone up, which has enabled projects to get off the ground," he told The Business. "With this fundamental shift in the market, if you can produce clean, green nickel, because it will be traced right through to the vehicle, you've probably got a pretty good future ahead of you."
LME bans Russian nickel from approved UK warehouses MINING.COM Editor | August 16, 2022 | Battery Metals Markets Europe Nickel https://www.mining.com/lme-bans-russian-nickel-from-approved-uk-warehouses/ London Metal Exchange. (Image by HM Treasury, Flickr.) The London Metal Exchange (LME) has banned Russian nickel from its two approved warehouses in the UK exported on or after July 20. The decision follows an April 1 resolution that blocked other Russian metals, including copper, lead, primary aluminum and aluminum alloy from British warehouses. The exchange said there was currently no Russian nickel stored in approved British warehouses, located in Hull and Liverpool. The LME noted, however, that anyone receiving Russian nickel from the UK risks being hit with very high additional costs. Russia supplies roughly 10% of the world’s nickel, 6% of its aluminum and around 3.5% of its copper. A ban on Russian metals could lead to shortages and fresh price surges at a time of global inflation. Nickel prices have been climbing since the start of the year due to strong demand and inventory draws. Russia’s invasion of Ukraine on February 24 provided a further push. The surge to a record above $100,000 a tonne in chaotic trade on March 8, triggered by China’s Tsingshan Holding Group and others cutting their short positions, led the LME to suspend trading for more than a week. (With files from Reuters)
US hits the EV accelerator to cut Chinese metals ties Reuters | August 16, 2022 | Battery Metals Intelligence China USA Copper Lithium Nickel https://www.mining.com/web/column-us-hits-the-ev-accelerator-to-cut-chinese-metals-ties/ Stock Image (The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.) The Inflation Reduction Act (IRA) includes the “largest investment ever in combating the existential crisis of climate change”, according to President Joe Biden. Around $369 billion of federal funds will flow into climate change and energy security, boosting domestic capacity to produce wind turbines, solar panels and electric vehicles. However, the green investment comes with a metallic sting in the tail. The IRA extends and expands the existing electric vehicle (EV) subsidy of up to $7,500 but conditions the tax credit on the sourcing of the mineral content of the battery. At least 40% of the critical metals in the battery – lithium, nickel, cobalt, and manganese – must come from the United States or a Free Trade Agreement (FTA) partner. That percentage rises to 80% in 2026. Auto-makers lobbied hard against the linkage, arguing that China is still too dominant and the United States too lagging in the battery metals supply chain for it to work. That, though, is the point. The link between subsidy and mineral input is meant to accelerate the drive to build out domestic, or at least friendly, critical minerals capacity and break China’s stranglehold. Made in America Auto-makers should “get aggressive and make sure that we’re extracting in North America, we’re processing in North America and we put a line on China,” said Senator Joe Manchin, the architect of the minerals sourcing component of the EV subsidy scheme. It’s a daunting challenge. Benchmark Mineral Intelligence estimates that China currently has 81% of the world’s battery cathode manufacturing capacity, 75% of its cobalt refining capacity, and 59% of its lithium processing capacity. The United States and Canada combined refine just 3.0% and 3.5% of the world’s lithium and cobalt respectively and have even less battery cathode capacity. Canada is an FTA partner. So too are other major mineral producers such as Australia, Chile, Mexico and Peru. However, not on the list are Argentina, currently experiencing a lithium investment boom, or Indonesia, which is emerging as a major battery metals production hub centered on its massive nickel deposits. Also not on the list is the European Union, which has already said the new EV subsidy scheme may breach World Trade Organization rules. South Korea agrees. While battery manufacturers such as LG Energy Solution and Samsung should benefit from the country’s FTA status, they may themselves be dependent on Chinese metal inputs. Given the EU and South Korea are both members of the US-backed Minerals Security Partnership, a metallic alliance of “friendly countries”, there is likely to be some scope for compromise in the devilish detail of the sourcing criteria. The challenge for auto-makers to qualify for the subsidies still remains immense, given the multi-year process of building new mines, particularly in the United States. Investment drive There is no shortage of government money to do so. The Department of Energy was given $6 billion to invest in a domestic battery supply chain by the Bipartisan Infrastructure Law passed last year. Applications for the first tranche of battery metals processing funding closed at the start of July and the money is expected to start flowing in the next couple of months. The Department of Defense is separately investing in a $120 million rare earths separation plant in alliance with Australia’s Lynas Rare Earths. Rare earths are critical for electric motors, meaning they are captured by the EV minerals sourcing rules. The IRA delivered a little more bounty by lifting the tax credit to 30% for investment in any “advanced energy project”, which covers a wide spectrum of green transition technology. Such huge US government investment in mining and metals processing hasn’t been seen since the Second World War and the Biden Administration has invoked a relic of the Korean War – the Defense Production Act – to stimulate it further. Green gauntlet It should be a boom time for North America’s mining and processing industry. But it’s not. The number of applications to mine on federal land has been falling for a decade, according to E&E News. So too has the number of permits granted. Mining companies and their shareholders have suffered bruising permitting battles with environmentalists. All too often they have been on the losing side with major projects such as Antofagasta’s Twin Metals copper and nickel mine in Minnesota blocked. However, the stick of the EV subsidy sourcing rules comes with the promised carrot of mine permitting reform. “We have reached an agreement with President Biden and Speaker Pelosi to pass comprehensive permitting reform legislation before the end of this fiscal year,” said Joe Manchin and Senate Leader Chuck Schumer in a joint statement. Whether this amounts to tweaking or more fundamentally rewriting the long-outdated General Mining Act of 1872 remains to be seen. But there is a clear understanding that permitting is a major log-jam in building out a full battery metals supply chain on home soil. Senator Manchin’s EV scheme also challenges directly the contradictions at the heart of the green movement, which wants to move faster to a low-carbon world but doesn’t support the means of facilitating that transition. The message seems to be that if you want government-subsidized electric vehicles, you’ll have to stop opposing the new domestic metals capacity that will be needed to make them. Whether it works remains to be seen. But make no mistake. This EV subsidy scheme marks another big movement in the reshaping of critical mineral supply chains. (Editing by David Evans)
China-Linked Bots Attacking Rare Earths Producer ‘Every Day’ Campaign aimed at Lynas’ environmental record in Malaysia US push for critical minerals industry behind attacks: experts The Lynas processing plant in Kalgoorlie, Western Australia.Photographer: Carla Gottgens/Bloomberg By James Fernyhough 27 August 2022 https://www.bloomberg.com/news/arti...e-earths-producer-every-day?srnd=premium-asia Cyber-protection experts say the campaign is targeting US and Australian collaboration on critical mineral supply chains. First made public in June, the attacks are focusing on Lynas’ environmental record in Malaysia in an attempt to turn public opinion against a new plant it’s building in Texas with US government funding. “We see bot posts on various social media every day, and we report them every day, and it’s quite frustrating,” Lynas Chief Executive Officer Amanda Lacaze said in an interview on Friday. “It’s very easy to see the bot posts and the messages are exactly the same.” Amanda Lacaze Photographer: Carla Gottgens/Bloomberg China-connected propagandists have long attempted to leverage social media to influence public opinion on issues ranging from the origin of the coronavirus to the US presidential election, according to cybersecurity firms including Mandiant and Graphika. The Cyberspace Administration of China didn’t immediately respond to a request for comment. The bot campaign against Lynas was first identified by Mandiant, which dubbed it “Dragonbridge” and said it was emanating from a “pro-People’s Republic of China (PRC) network.” Mandiant said the campaign was also targeting a Canadian company, Appia Rare Earths & Uranium Corp. Albert Zhang, a researcher at the Australian Strategic Policy Institute think tank, separately monitored the group and concluded it was a “Chinese Communist Party information operation”. Both Mandiant and Zhang said the attacks were likely to be an attempt to derail President Joe Biden’s efforts to build a US critical minerals industry. China currently dominates the supply chain of minerals needed in green energy, military equipment and high-tech manufacturing. Rare earths -- used in magnets vital for electric vehicles and wind turbines -- are among the most important of these. Still, Lacaze said the social media attacks have had no discernible impact on the company’s operations. Lynas is the world’s biggest producer of rare earths outside China, with an operating processing plant in Malaysia and two additional facilities being constructed in the US and Australia. On Friday, it reported record full-year net income after tax of A$541 million ($377 million), more than three times last year’s figure. Lacaze said the result was helped by soaring demand for wind turbines and electric vehicles, adding that consumption would continue to grow. “I think the chart goes from the bottom left to the top right with very little deviation from that trajectory,” she said, referring to the long-term demand outlook for rare earths. — With assistance by Jamie Tarabay, and Andrew Janes