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Metals

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.

There’s more to this

Fraud squad investigators investigating a company accused of supplying fake aeroplane parts to airlines around the world have arrested a man.

The man was being questioned on Wednesday after his home was searched by the Serious Fraud Office (SFO) and the National Crime Agency (NCA).

London-based AOG Technics has supplied parts to airlines around the world, but has been accused of selling products using fake safety documents.

In some cases it has caused aircraft to be grounded, sending carriers and manufacturers scrambling to discover whether they are affected.

The money to be made doing this is huge. Therefore someone will do it. That’s just what happens. Not desirable, by any means, but it will happen.

However, there’s something else too:

Jet engine maker CFM International discovered a quality issue related to powdered metal at an unnamed supplier in 2021, and has fully implemented repairs, the head of CFM’s joint owner Safran said on Thursday.

The disclosure of the issue involving a limited number of parts during a quarterly results call comes days after RTX unit Pratt & Whitney, the main competitor to CFM, ordered inspections on 1,200 engines of Airbus A320neo jets after a problem with contaminated powdered metal.

A slew of jet engines have had to be taken out of service out of this – entirely legal, not based upon false paperwork – problem with the metal powders used in original manufacture. My guess here – and it’s totally a guess, therefore highly likely to be wrong – is that someone’s been trying to use a cheapier rhenium supplier. One with too much potassium in the original ammonnium perrhenate and not processing that out before making the metal. The reason I make this guess is that it’s something that the industry knows has to be very tightly controlled, the Kazakh high potassium APR trades at a discount to the “western” material without the problem. Well, you know, maybe. That could be my possession of a hammer and looking for the nail.

But the interest here is, well, how much of that CFM problem is now going to get blamed on the bloke with the dodgy certificates? It’s one of those possibilities, isn’t it?

This is an interesting defence

Sure, it’s fraud, obvs, but it’s them too:

Chat messages and emails show that senior Trafigura staff were complicit in a scheme to pass off low-value scrap and other metal as valuable nickel, court filings allege.

The privately owned Swiss commodities trading giant is embroiled in a high-profile lawsuit against Prateek Gupta, an Indian businessman, who Trafigura alleges masterminded a huge fraud against the company.

Trafigura in February said it was booking a $577 million charge related to the alleged fraud after discovering that a number of cargos bought from companies linked to Gupta did not contain high-quality, high-value nickel as expected.

Gupta argues that a number of senior Trafigura employees “knew full well that most of the cargos did not contain LME-grade nickel, and that the arrangement to agree contracts between the parties for the sale and purchase of LME-grade nickel but, in fact, to trade other materials was devised and proposed at Trafigura’s instigation”.

Trafigura argues that Gupta’s defence is “flawed and frankly desperate” and that his claims “appear to be nothing more than mudslinging to deflect attention from the fraud he admits to committing against Trafigura”.

What is the Spanish for Lebensraum?

Venezuelan president Nicolás Maduro has ordered the country’s state-owned companies to “immediately” begin to explore and exploit the oil, gas and mines in Guyana’s Essequibo region, a territory larger than Greece and rich in oil and minerals that Venezuela claims as its own.

The announcement came a day after Maduro declared victory in a weekend referendum on whether to claim sovereignty over the region.

Maduro said he would “immediately” proceed “to grant operating licenses for the exploration and exploitation of oil, gas and mines in the entire area of our Essequibo.”

As we’ve noted before, the trouble with socialism is that you run out of country to plunder.

Someone who actually gets it right

We should celebrate such rarities:

There are millions of tons (and billions of dollars in value) of recoverable metals, plastics, and other materials currently stored in landfills. The simple reason mining does not occur is economics: for multiple reasons, the costs to mine a solid waste landfill are currently greater than the value of recoverable materials.

The cost of any mining operation includes extraction of the target ore, processing to concentrate the ore (beneficiation), managing the associated wastes, transporting and selling the material, and finally closing and reclaiming the mine. These costs must be lower than the revenues made from selling the mined material. While the mining of solid waste landfills has many environmental benefits, it is subject to the same economic conditions as traditional mining.

Entirely, wholly and exactly spot on.

Ooooh, this is lots of fun

The $2 Million Coal Mine That Might Hold a $37 Billion Treasure

They’ve found rare earths in the coal mine. A layer of ionic clay above and below the coal bed in fact.

Very exciting.

Except, well……there’s nothing at all to indicate this is a special coal bed. So, assume that there really are lots of rare earths here. Well then, that means lots of rare earths in many coal beds. Or, they ain’t rare.

And, well, most coal does contain some rare earths. We’ve known that for decades. The point is always “How much?”.

Ah. So about 10% of the level of other ionic clays that people are exploiting for rare earths. And, well, 10%? That might not be economic at all. Maybe, you know. Just the level of cost of getting it out might be more than the value of what is extracted. Or, alternatively, if they can extract profitably at those levels then rare earths really are not rare – because that’s not, from memory at least, an unusual content level for a coal bed. So they’re really, really, not rare.

This isn’t quite true

So Russian gold is being re-refined in UAE and so getting past the sanctions. London Bullion Market acts like the LME, accrediting producers for “good delivery” bars.

It cannot be imported into the UK as bars because it lacks LBMA certification,

Nonsense. You can’t sell it as a good delivery bar because it’s not a good delivery bar. But you can import it, sure. You’ll end up selling it at a discount to a refiner – who will do locally what is being done in the UAE. It’s not all that difficult either – recall, the Brinks-Mat folk did this in a shed at the bottom of the garden. It loses a few percent in value by this thing being done. But it is only that few percent too. Because the conversion of pure gold scrap (what you have to sell a non-good delivery bar as) into a good delivery bar costs a couple of percent of the gold value. Therefore that’s the discount.

Add or subtract whatever you want for it being illegal gold dodging sanctions of course. But the process? Easy enough to do. If Russia were willing to accept something outrageous – 20% say – as a disount they could sell all the gold they want around sanctions.

Getting taken in by the PR process

Distaste for mining projects among investors is threatening net zero targets, the world’s biggest asset manager has warned.

Blackrock said a “complacent attitude” towards the sector has led to money managers underestimating the importance of base metals in delivering clean energy.

It said environmental apprehension around mining has led to a “staggering” investment gap, which could lead to a “scarcity” of critical raw materials.

Blackrock fund managers Evy Hambro and Olivia Markham said the mining and metals industry will play a critical role in achieving net zero, as they called for more investment to help the sector go green.

Tossery and bollocks.

Blackrock recently launched a copper ETF and a critical minerals investment fund. Clearly, not sold all that well and they’re trying to drum up trade.

Not really, no

Europe’s biggest copper producer has warned it may face hundreds of millions of euros in losses after being hit by a massive theft.

Shares in Hamburg-based Aurubis dropped as much as 18pc after the company said it had found significant discrepancies in stockpiles and shipments of scrap metal linked to its recycling business.

Bosses believe some of its suppliers have manipulated details about the scrap metal they provided and have been working with employees in the company’s sampling department to cover it up.

That’s unlikely to be a massive theft. Far more reasonable for it to be a series of minor thefts. Which then turn up once you do a proper stocktake and audit. It’s damn difficult to lie about the arrival of a train of scrap, or the content of that train full of scrap. Trivially easy, with inside help, to get paid out on 2 and 5% variations in your favour of weights and purities. Nudging up the tin content by 2 or 5% on a 5 tonne load, that sort of thing. Over time and a group of suppliers that would indeed add up.

Sure, obviously, I could be wrong. But that’s the way I’d bet. Long standing and individually small scale fiddle, they’ve just found out the cumulative effect of it.

Also hahaha

It is the world’s oldest and most famous lawn tennis tournament, so it is no surprise that Wimbledon pulls out all the stops to keep its grass immaculate.

But achieving a garden as vivid green as the courts of the All England Club is not as impossible as one may believe, as its secret ingredient – a rare mineral salt mined beneath the Yorkshire Moors – can be bought for just £10.

Polyhalite is a naturally occurring crystal made up of four nutrients – potassium, calcium, magnesium and sulphate – which experts say can help to make grass and other crops grow faster and stay healthy when used alongside other fertilisers.

That’s from that mine where the civil servants said they’d not give planning permission because there was no market for the output.