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Metals

The Guardian needs a dodgy metals expert

Or, even, a dodgy expert in metals:

The area may soon be home to a large, open cut mine that will extract minerals including garnet, zircon and gold from beneath the flats.

Sigh.

TiGa has applied for consent to mine minerals for ilmenite

It’s an ilmenite mine – the source for titanium. You know, the white in white paint? That’s why the Ti in the company name?

Sure, garnet and zircon are usual byproducts but they are byproducts. It’s an ilmenite mine.

Don’t think so you know

Now it is true that the definition of reserve for a fossil fuel is slightly different from the definition used for the sorts of minerals I’m more familiar with. But even with that I’d very strongly suggest that the Telegraph is wrong here:

Russia has found vast oil and gas reserves in the Antarctic, much of it in areas claimed by the UK.

The surveys are a prelude to bringing in drilling rigs to exploit the pristine region for fossil fuels, MPs have warned.

Reserves totalling 511bn barrels of oil – about 10 times the North Sea’s entire 50-year output – have been reported to Moscow by Russian research ships, according to evidence given to the Commons Environment Audit Committee (EAC) last week.

It follows a series of surveys by the Alexander Karpinsky vessel, operated by Rosgeo – the Russian agency charged with finding mineral reserves for commercial exploitation.

Antarctica is meant to be protected by the 1959 Antarctic Treaty that bans all mineral or oil developments. The UK’s interests are overseen by the Foreign Office – but it has been accused of ignoring the emerging crisis.

A mineral deposit is “there’s some stuff here”. A mineral resource is “there’s some stuff here and given a bit of work we’re between sure and very sure that we can extract at a profit” and a mineral reserve is “we have shown to the level of proof that a bank will lend to us, a stock market allow us to raise money on the claim, that we can extract from this deposit, using current technology, at current prices and make a profit. Also, we’ve the licences and legal right to do so.”

As this claimed deposit is in an area where extraction is illegal then it’s not going to be a mineral reserve, is it?

A deeply unfashionable opinion

Buyers ready to dig deep for world’s miners

I think there’s a good chance this will end in tears. Yes, yes, EV, the electric world, lots of metals needed. So, buy into that limited stock that will definitely rise in price, right?

There are four major areas here. Copper, cobalt, lithium and rare earths. Market prices of the last three are all below production costs (for many, at least) right now. The fourth, copper, well, might be a real shortage but I’m really not sure.

I tend to think – note this is not investment advice, this is just me having a thought – that the people running the miners are believing a bit too much of the hype. There’s a battle gong on in Oz to be the buyer of a really bit potential Li mine between billionaires. And yet at the same time there’s a brand new mine not operating because of low prices. Just doesn’t seem sensible to me.

I fear people are buying at the top…..

Well, umm, yeeees

A mining company has announced plans to extract 10,000 tonnes of lithium a year from rocks beneath a County Durham beauty spot after drilling found vast volumes of hot brines laden with the precious mineral.

Lithium is an essential component of the rechargeable batteries that power everything from mobile phones to electric vehicles – but the UK is currently entirely dependent on imports.

Weardale Lithium’s planned processing plant in the Co Durham valley would strip the lithium from water pumped from deep underground reservoirs, creating the UK’s first domestic supply of the mineral.

If the deposits prove commercially viable then the UK could reduce its current complete reliance on imports which mainly come from Australia and South America.

The area is the second part of the UK to yield commercially viable lithium deposits. Cornish Lithium is already seeking to exploit similar deposits in Cornwall. It too expects to produce about 10,000 tonnes a year.

The idea’s sensible enough. Lithium is soluble in water. Therefore geothermal waters going through a nice granite etc (a usual host rock for lithium) might well be enriched in lithium.

It’s technically feasible – for a slightly weird reason the people who do this contacted me about something else – to extract the Li from the Cornish Lithium waters. Weardale I assume is somewhat similar. 50 ppm is good enough.

That’s not the same as comercially viable of course. And with the Li price down in the dumps perhaps it isn’t.

There are two other things e can test against. On the Rhine, and around the Salton Sea, there are geothermal energy plants. That water is also Li enriched. So, they’ve two revenues from that same water. And the Rhine, well, maybe the Li is commercially extractable. From what I hear the Salton Sea is (note, hear, not know).

But if with two revenue sources the Rhine is still, well, we dunno, then Weardale with only one revenue stream, well, is it commercially viable?

In the Weardale doc package there will be a price assumption for lithium. If that’s realistic and the numbers are positive then yes, commercially viable, subject to uncertainty about future prices. But what is that assumption?

Gupta’s playing a blinder here

If Greensill hadn’t gone bust then these loans would already have been called in and Gupta would be bust.

Administrators for collapsed finance firm Greensill Capital have warned they could attempt to seize assets from steel magnate Sanjeev Gupta to recover $587m (£472m) in unpaid funds.

GFG Alliance, a collection of companies headed by Mr Gupta, has been targeted by the administrators having been one of Greensill’s most prolific borrowers before its collapse.

As a specialist lender that advanced cash to companies so they could pay suppliers early, Greensill was reportedly owed £3.7bn from GFG at the time of its failure in 2021.

This includes $587m owed to the UK arm of Greensill Capital, which is yet to be repaid despite long-running negotiations, according to an update published by administrators at Grant Thornton.

But the administrators, they’re not going to be time sensitive – to put it politely. So, Gupta gets to keep hte working capital for another couple of years. And, who knows, maybe something will turn up? #

Getting into this situation, well, but he’s playing the cards he’s got damn well.

Meh

Britain and America have teamed up to block the trade of Russian metals to “prevent the Kremlin funnelling more cash into its war machine”.

The London Metal Exchange and the Chicago Mercantile Exchanges will no longer trade new aluminium, copper and nickel produced by Russia, in an effort to hinder one of the country’s biggest sources of revenue.

Delivery of new metal into warehouse is rarely a thing. Might, maybe, use futures to fix the price but that doesn’t necessarily use physical delivery into warehouse.

A marginal issue at best.

Erm, no, not really

The cost of cocoa, chocolate’s main ingredient, has been increasing all year, hitting a record high just before Valentine’s Day and again this week, when it was priced at more than $10,000 a tonne – meaning it is currently more valuable than several precious metals,

Journalists and numbers again.

gold, silver, platinum, palladium, rhodium, iridium, osmium, rhenium, and ruthenium

$10k a tonne is something like 30 cents an ounce (1,000 kg in a tonne, around and about 30 ounces in a kg (or, around 30 grammes in an ounce, either way)).

And absolutely none of the precious metals are priced at tens of pennies per ounce.

Methinks our scribe has got confused somewhere in ounces and tonnes, prices per.

Business in West Africa is different

The sacked chief executive of London-listed Endeavour Mining was involved in $15m (£12m) of “deliberately disguised” payments made to a party based in the UAE, an investigation has found.

Sébastien de Montessus transferred the money in 2020 and 2021 to an unknown entity, according to investigators, who said they had failed in their efforts to unmask the recipient.

London-listed Endeavour Mining fired Mr Montessus in January, alleging he had made an irregular payment of $5.9m to an unknown third party in March 2021 relating to the sale of its Agbaou gold mine in the Ivory Coast.

Fast growing gold miner able to make deals and sign contracts in West Africa.

The idea that there were not, erm, consultancy contracts is the surprising one.

Matt Oliver got sold a pup here

The Industrial editor at the Telegraph:

The opening of America’s first cobalt mine for decades, marked with pomp and a ribbon-cutting ceremony, was supposed to be a step towards better energy security.

Instead, the facility in Idaho, built by Jervois Global, has become a victim of the problem it was meant to solve – reducing the West’s dependence on China for critical minerals, as Beijing seeks to dominate them.

“We are an unfortunate case study,” says Bryce Crocker, chief executive of Jervois. “I’d rather not be, but we are.”

Yet six months after opening, Jervois was forced to mothball the new facility as the price of cobalt plunged so low it became impossible to make a profit.

As Tim Newman will tell you, very loudly, the problem was Jervois screwing up the design of the refinery over contaominant elements in the ore. Which then, of course, leads to this:

Even on that score, Jervois’s Crocker sounds a positive note. His company is currently working with the Pentagon to expand the size of the US’s mine and open a potential refinery, helping to make the overall proposal more economically viable.

“We don’t need a 90pc market share, just a share that allows the portion of the product that goes into certain industries, which are genuine and critical, not to be cut off in the event of geopolitical unrest,” he adds.

“It’s an insurance policy. And I guess, since Covid and Ukraine, people are starting to realise that insurance policies matter.”

Plus the usual “Please Mr. PentagonMan, can I have some money”?

This also has the ring of a lot more hope than sense about it:

In Tyneside, one company seeking to do just this is Tees Valley Lithium. From 2026, the company hopes to begin producing lithium hydroxide and carbonate at a refinery near Redcar that will supply UK battery factories.

Paul Atherley, chairman of Alkemy Capital, the company’s parent, says he is “agnostic about the lithium price” to a degree because his company will be seeking to deal with car makers who sell to wealthier customers, not those looking for cheaper, entry level cars.

“We’re targeting that premium market, where anybody who is consumer-facing has to make a value decision about the product and the supply chain that goes into it.

“Customers also want to re-align their supply chains, so they’re not totally dependent on [China].”

You just try charging a substantial premium for local lithium for local people matey. You’re not gonna get far.

But to me the joy is here:

the price of cobalt plunged so low it became impossible to make a profit.

Over the past two years the metal’s value has tumbled from around $19,000 per tonne to less than $5,000, according to data from Benchmark Mineral Intelligence,

No, that’s not the cobalt metal price, which remains in the $25 to $30k per tonne range. Probably one of the salts.

Two years ago, the global price of nickel peaked at around $7,000 per tonne. Now it is below $4,000 per tonne following a significant boost in production by Chinese-owned mines in Indonesia.

Eh?

And, you know, if you’re that far out on the prices – which can be looked up real easy – then the strategy and real story stuff is going to be…..

Just a musing about scrap metal

Solar panels. Clearly, going to be a big business in recycling them. Or perhaps is disposing of them. Which is where the musing comes in.

So, think of standard silicon (so, not the Cd/Te ones). Might be a bit of gallium/germanium in there for really top end ones. Aluminium frames. Don’t know what connectors are made of – gold perhaps? Plated obvs.

So there’s some metals value in there. But clearly the bulk is silicon. And that, I think, has no value. Or single digit $ per tonne levels perhaps.

Because the raw material is pretty valueless. Sand, effectively. OK, that’s then made up into silicon metal at a high purity – 99,9999%, say. At which point it costs maybe $20 a kg. But it’s the process of making the Si atoms up into the ingots of high purity metal that adds that value. A process that you’ve got to go through with the Si atoms you’ve just recovered from the solar panels.

Unless there’s a lot of gold and copper in there I can;t see such scrap panels as having a positive metals value once you subtract any cost of processing. That is, I can’t see a free market in solar panel recycling emerging unsubsidised.

Now this really is only a musing, I’ve not checked any of the numbers. But if it’s true then that just adds again to the cost of solar, doesn’t it? We’ve real, positive, disposal costs at the end.

Something you might like for today

Over at the Substack:

The point is that the honey trap does exist. And for the “black market” in nuclear metals and bomb making materials – as nuclear and bomb making materials that is, not as scrap into other industries – the only market that really does exist is the honey trap one.

It’s not that someone trying to sell you a bomb is dodgy, it’s that someone trying to buy one from you started their career eating donuts on an all night watchout.

So the advice is, if you’re looking for a career as a Yakuza nuclear bomb trader, then don’t. The career opportunity simply doesn’t exist.

By the way, if you’ve got some of those 10 metre zirconium/niobium tubes, seamless, then I’m interested. 1.1% Nb, 2.5% Nb, no matter. Even just the offcuts and scrap actually. Starting bid might be about $4 a kg. But if it is the tubes, neatly packed, unused, then could you make sure you drive a tank over them first? I really do want them only for the scrap value, that’s the only valuation that keeps us all out of jail.

A view – all the pgm miners are about to go bust

The platinum arm of Anglo American is to cut 3,700 jobs in South Africa as the British mining company attempts to improve performance in the troubled division.

Anglo American Platinum (Amplats) said on Monday it aimed to cut jobs after a sharp drop in platinum metal prices, which had led to a collapse in profits last year.

The jobs under threat account for about one-fifth of the Johannesburg-based company’s total workforce, with Amplats also reviewing the roles of an additional 620 contractors.

Profits at Amplats, in which Anglo American holds a 79% stake, fell to R14bn (£586m) in 2023, down by 71% from R48.8bn in 2022.

“About” might be a bit early but…..

The platinum/palladium/rhodium market is dominated by two things.

1) Catalytic convertors

2) The stock of the metals in the current car fleet that will be recycled at end of life.

As an example, US Pt/Pd use seems to be 130k kg or so, recycling is 55k kg or so from car catalysts alone.

So, the move to EVs – or hybrids, or fuel cells, whatever. Sure, it’s not going to be 100% by 2030 or anything, but. So, we’re going to have that same flow of end of life catalysts coming to market and no more, or many fewer, being made.

Miners of virgin material are going to get screwed, right? Because yes, that recycling is vastly cheaper to do – that’s why a used cat actually has a value in your hands on the roadside.

It’s not an industry I’d be leaving my money in, put it that way.

It’s possible to think the other way, that fuel cells using Pt will take over. But actually sensible fuel cells are SOFC ones, which don’t use pgms.

Doesn’t sound right this, just doesn’t

Norway is set to become the first country in the world to allow commercial deep-sea mining after overcoming opposition from green campaigners.

The Nordic nation’s parliament is expected to approve opening up 108,000 square miles of its national waters, an area bigger than the size of the UK, to lithium and cobalt licences in a vote on Tuesday.

Lithium? From those seabed nodules? Sounds a little odd. Copper, cobalt, manganese, nickel, sure. But lithium? Think someone’s misread the press release there. Or the Weegies are even more odd than I thought.

Not, really, a lot of sense in this

Endeavour Mining, the largest gold producer in West Africa, told investors after markets shut on Thursday it had terminated the employment of Sébastien de Montessus for “serious misconduct” after uncovering an “irregular payment instruction” of $5.9m (£4.7m).

Endeavour said the payment was discovered “in the course of a review of acquisitions and disposals”.

Last night Mr de Montessus told The Telegraph: “In 2021 I instructed a creditor of Endeavour to offset an amount owed to the company to pay for essential security equipment to protect our partners and employees in a conflict zone.

“The decision had no additional cost to the company and did not benefit me personally in any way. I omitted to inform the board that I had arranged for this offset, which I have freely accepted was a lapse in judgement.

“This week I was given 48 hours’ notice of the concerns and no proper opportunity to answer them.”

But that is the explanation, right? So, that didn’t take 48 hours, did it? And why didn’t the board accept it?

Also, how does an offset lead to a payment instruction?

Endeavour Mining, which was founded in 1988, runs mines in Burkina Faso, Côte d’Ivoire and Senegal.

Ah, you know, I think – in my opinion – that might be where the problem is. Big, London listed, miners and corporations do not, at all, ever, play with money in the same way that the thieves and bandits which are governments in some parts of the world do. It’s just that the thieves and bandits aren’t too sure about that, even if the miners say they are.

Umm, well now

“It’s a watershed event in aviation safety,” says Andreas Spaeth, an aviation journalist and co-host of a podcast that examines historic plane crashes.

“This was an aircraft that was absolutely full. So to see that everyone escaped safely is a miracle.

“Even then, it was a fairly long time before a big fire emerged. We have never seen a fuselage made of carbon fibre burn. And the structure held up pretty well.”

Well, yes, but. If that same fuselage were made of the more usual aluminium alloys then it wouldn’t have burnt at all…..

Erm, why?

Bardenfleth-Hansen also highlights the importance of reducing Europe’s reliance on lithium mines in China: “The necessity to move away from China, or basically anything that’s controlled outside of Europe, has obviously become very clear over the past couple of years.”

Not that there are many lithium mines in China – it’s the processors that are there. But given that your Heathen Chinee will happily hand over the lithium at the sight of folding stuff then why do European cars needs to be powered by something produced in Europe?

I don’t know enough about the chemistry here to know whether sodium would be a useful cell or not. But I know enough about markets to know that lithium is in oversupply right now and given the number of developments going on is likely to crash further in price. As I’ve pointed out, there’s 2,850 million, billion, tonnes of it out there and we need perhaps 20 million tonnes to provide batteries for 2 billion cars. It’s not in short supply.

Weapons take a long time

Deploying ground-launched Tomahawks is not very revolutionary; what is game-changing is the ability of the SM-6 to defeat incoming hypersonic glide missiles. The SM-6 Block IB has a redesigned body and larger Dual Thrust Rocket Motor, which can help propel the medium-range air defence missile to reach hypersonic speeds.

‘Hypersonic’ merely means faster than Mach 5, but in a modern sense when talking about hypersonic missiles we normally mean a missile which attacks at hypersonic speeds in a glide in the upper atmosphere, and which can manoeuvre as it does so.

Now, whether it was this specific programme or some other development path I don’t know. But 25 years back we were making hafnium carbide for the interior coating of such missile engines. About the only “chemical” that could deal with the temperatures.

The joy was that we were using a lab in Moscow to make it for the US research effort…..

Could be, but unlikely

Russia’s Wagner mercenary group has earned as much as £2 billion ($2.5 billion) for the Kremlin from the African gold trade since the invasion of Ukraine, according to new research estimates.

The notorious militia has become the Kremlin’s de facto representative on much of the continent, while also earning billions from murky gold investments to help bankroll Vladimir Putin’s assault on Russia’s neighbour.

The Blood Gold Report by a research team led by African-European relations expert Jessica Berlin, accuses the group of generating more than £80 million a month in the Central African Republic (CAR), Sudan and Mali.

£2 billion? Strikes me – on no evidence at all of course – as being more likely to be turnover than profits. Gold mines do cost money to run.

Well, yes and no, yes and no

Last week’s first-half results from Yellow Cake read very well, as net asset value shows healthy gains, buoyed by higher uranium prices and well-timed additions to the company’s stockpiles of triuranium octoxide (U3O8) in its specialist warehouses in France and Canada.

Ish, ish. Technically it is triuranium octoxide, but that’s not what anyone calls it. It’s the sort of description used by someone looking it up rather than anyone with industry knowledge. But there we are.

But this story is a fast-moving one and further purchases and advances in the commodity price, thanks in no small part to Dubai’s Cop28 summit, mean that net asset value is already higher still.

Yellow Cake could therefore prove to be particularly well-positioned as nuclear power starts to really grab the attention of policymakers.

During the six months from April to September, the value of Yellow Cake’s holdings of U3O8 rose by 56pc, amid a 45pc surge in uranium spot prices to $73.50 per pound and an increase in the company’s physical stock, thanks to purchases from Kazakhstan’s Kazatomprom.

And, you know, -ish, -ish.

The actual point of the company, Yellow Cake, is to be a method of allowing the individual investor to speculation uppon the uranium price. Here’s one I prepared earlier:

Yellow Cake Exists To Allow Speculation On The Uranium Price

And in more detail:

As it happens we’d rather than random economic actors – you know, speculators, folk like us – didn’t get their hands on piles of uranium. We’re all a bit funny that way. So, to trade anything in this world you need to have a license. I actually had one once and it took about 6 months to get. Never used it but I just want to point out that it’s not something easily handed out.

This requirement for a license means that there are no terminal markets. It’s not like aluminum, or nickel, where you can sell a future, deliver into warehouse and that’s it, you’re paid. The transaction has to go to the actual user, that end user – they’re the only people with licenses to be able to buy.

There are brokers in this market but they tend to be working on commission rather than taking ownership.

So, we’ve no terminal market, no futures- how could we have physical delivery if you must have a license? and if only the few hundred people with a license could take physical delivery then how can you have a futures market? – so price discovery is pretty hazy. We have guidance as to what prices are but every actual deal is large and individually priced.

So, you can’t speculate in the uranium price
This means that it’s not possible to speculate in the uranium price. We can do so indirectly, through stock in miners, or processors (Energy Fuels being an obvious candidate). There are several ETFs which hold baskets of exactly these sorts of companies. That’s great, but that’s always indirect. Energy Fuels might be driven either way by its adventures in rare earths for example, rather than by the uranium price. Indirect proxies for prices are, well, they’re indirect and thus not perfect.

It’s possible that you might want to be able to hedge against the uranium price. If you were a reactor company, for example. But the real thing is that many speculators – sorry, investors – would like to be able to play that uranium price. But as above, that’s difficult.

So, Yellow Cake
This is what Yellow Cake PLC (the company) is about. The whole of the thing is to have a structure that allows people to speculate on the uranium price. If a company owns a pile of that yellow cake then the company valuation will vary as does the yellow cake price. Folk can buy and sell shares in the company and there we are, we’ve our desired ability to speculate on the uranium price.

This is why the company was created. They’ve got the necessary licenses to be able to sit on a pile of uranium. We don’t need a license to be able to trade the stock. Great there we are, the job’s done.

Twiggy is a one, eh?

The Australian mining billionaire Andrew Forrest has used the backdrop of the Cop28 climate summit to pay for ads in more than 10 major newspapers around the world attacking the oil and gas industry and calling for fossil fuels to be phased out.

Forrest, who this year ranked as Australia’s second richest person, with a net worth of A$33.3bn (£17.4bn), placed an ad in the Friday edition of papers including the New York Times, Wall Street Journal, Washington Post, Financial Times, Times of India, Australian Financial Review and the Australian.

OK. Anyone can have any view they like, obvs.

The campaign was timed to run as Forrest, who made his fortune mining iron ore but who has more recently become an aggressive renewable energy investor and advocate, called for urgent action at the climate summit in the United Arab Emirates.

Ah, yes, his investing plans. In renewables. And, in fact, his mining is more into the metals for renewables as well.

No, no, of course rich men do not try to shift public policy into supporting their own investment plans. Perish the thought. Never happens.