A report published by market analyst Lux Research states that companies looking to decarbonize their energy trade routes have about 10 years to do so.
According to Lux, by 2030, imported electricity via new high-voltage direct current (HVDC) power lines is likely to become cheaper than low-carbon natural gas turbines. This means that corporations that have renewable energy import infrastructure in place by then, will be able to take advantage of the low prices.
The market analyst’s document states that there will be another tipping point in 2040 when imported liquid hydrogen is expected to be cheaper than low-carbon steam methane reformation.
With these developments around the corner, companies should “develop the partnerships and pilot projects necessary to demonstrate such a transformative energy paradigm,” the report reads.
In Lux’s view, this is particularly the case for enterprises operating in countries such as Singapore, Japan and the Netherlands, which cannot satisfy their own demand for energy with domestically produced renewable energy because they simply lack the land area and resource potential to power their energy-intensive economies.
“Countries representing $9 trillion of global GDP would face difficulties in meeting energy demand with domestic renewable production alone, requiring the import of future energy carriers,” the paper states.
By comparing the lifetime costs of 15 different renewable energy carriers such as electricity and vanadium, Lux’s analysis shows that across all renewable energy carriers, low-cost solar energy can be delivered to resource-constrained regions at 50% to 80% lower cost than generating that solar energy locally under less favourable conditions.
The study presents data that supports the idea that the expanded buildout of AC and DC power lines — which are currently the only way to connect wind and solar generation to end-users — will be the most cost-effective way of importing low-cost solar energy from distant regions, though only up to roughly 1,000 kilometres. At farther distances, other renewable energy carriers like synthetic fuels are less expensive.
“Delivering energy via land-based infrastructure like powerlines or pipelines becomes expensive at long distances due to the inefficiencies of power lines and capital costs of pipelines,” the report reads. “Delivery via ship, on the other hand, is much more cost-effective at long distances, whether it be LOHC [liquid organic hydrogen carriers] delivered by tanker or liquid hydrogen delivered by cryogenic carriers like LNG.”
Even though at present no current energy carrier can offer costs low enough to completely replace liquid natural gas or oil, Lux believes that imported energy costs can be competitive against other zero-carbon technologies.
US domestic production of uranium concentrate plunged 89% to 174,000 pounds of U3O8 (triuranium octoxide) last year, according to the latest annual report published by the US Energy Information Administration (EIA). This also represents a steep decline compared to the 4.89 million pounds the US produced five years earlier.
The production of uranium concentrate is the first step in the nation’s nuclear fuel production process. The U3O8 is converted into UF6 (uranium hexafluoride) to first enable uranium enrichment, then fuel pellet fabrication and finally fuel assembly fabrication.
The EIA records uranium production from six existing facilities: five in-situ leach (ISL) plants in Nebraska and Wyoming (Crow Butte operation, Lost Creek project, Ross CPP, North Butte and Smith Ranch-Highland operation) and one underground mine.
The report comes about a month after the Trump Administration released its plans to rescue the struggling US uranium mining industry.
At the end of the year, two conventional uranium mills — the Shootaring Canyon mill in Utah and the Sweetwater uranium project in Wyoming — were on standby with a total capacity of 3,750 t/d. The 2,000 t/d White Mesa mill in Utah was no longer producing uranium.
At the year’s end, three ISL plants — Lost Creek, Nichols Ranch ISR project, and Smith Ranch-Highland, all in Wyoming — were operating with a combined capacity of 9.5 million pounds U3O8 per year, the EIA said. Six ISL plants were on standby and seven ISL plants were planned for four states, including New Mexico, South Dakota, Texas and Wyoming.
Total estimated uranium reserves at year-end were 31 million pounds U3O8 at a maximum forward cost of up to $30/lb. At up to $50/lb and $100/lb, reported estimated reserves were 206 million pounds and 389 million pounds U3O8 respectively.
The EIA added that these reserves are a fraction of likely total domestic uranium reserves, as it did not include inferred resources that were not reported.
NexGen Energy (TSX: NXE; NYSE: NXE) has signed a $30 million financing agreement with Queen’s Road Capital Investment (TSXV: QRC) and plans to use the funds to advance work at its flagship Arrow deposit, part of the company’s Rook 1 project in Saskatchewan.
“Warren Gilman, chairman and chief executive officer of Queen’s Road Capital, is a long-time shareholder and supporter of NexGen and also joined our board in 2017,” Leigh Curyer, NexGen’s CEO, said in an interview.
“Warren came to us and wanted to invest in uranium, but only wanted to invest in world-class projects and world-class management teams. We met both those criteria.”
A leading financier to the global resource sector, Queen’s Road Capital Investment makes investments in privately held and publicly traded resource companies and acquires and holds securities for both long-term capital appreciation and short-term gains, says the company.
The financing consists of a $15 million private placement (11.6 million common shares at C$1.80 per share) and $15 million in unsecured convertible debentures. The debentures carry a 7.5% coupon over a five-year term and can be converted into about 8.9 million common shares at C$2.34 per share.
“This agreement is identical to our previous financing agreement for $110 million with CEF Holdings back in 2017,” Curyer said. “When you consider the pricing of both agreements at a 5% premium to the 20-day VWAP, I think it speaks very highly to overall financing for NexGen and also Queen’s Road Capital.”
News of the financing on May 11 sent the company’s shares up 3.6% to $2.04, which Curyer said is “a solid indication of the market’s appreciation of this financing agreement.”
NexGen Energy is now extremely well-funded with about $75 million in the treasury on the closure of the agreement, he added, “so, we are very well placed to complete the feasibility study for our Arrow deposit by the end of this year, subject to the business returning to normal after the coronavirus outbreak.”
The mining executive also pointed to the investor rights agreement in the transaction, which he said will provide for voting alignment, standstill and transfer restriction covenants for as long as Queen’s Road Capital holds at least 5% of NexGen’s shares on a partially diluted basis, or until there is a change of control.
“The rights agreement means that the investor and debenture holders will support management and the board in resolutions forwarded to the shareholders,” said Curyer, “which is very important for any hostile M&A attention we might receive.”
NexGen’s 100%-owned Arrow deposit has indicated mineral resource of 2.89 million tonnes grading 4.03% U3O8 for 256.6 million lbs. contained U3O8, including a high-grade core of 0.46 million tonnes grading 17.85% U3O8 for 181 million lbs. of U3O8. Inferred resources add 4.84 million tonnes grading 0.86% U3O8 for 91.7 million lbs of U3O8.
Colin Healey, a mining analyst at Haywood Securities said in a research note that NexGen is his top pick in the uranium sector “due to the disruptive potential of the Arrow deposit.”
“We continue to be very bullish on NexGen as we believe it controls one of the best undeveloped resources globally, in any commodity,” he stated in his note to clients.
Brian MacArthur of Raymond James increased his target price on NexGen following news of the financing from C$4.00 per share to C$4.25.
Tuesday afternoon, NexGen Energy was trading at $2.10 per share within a 52-week trading range of 76¢ and $2.31 on the TSX.
The company has around 355 million common shares outstanding for a C$756.53-million market capitalization.
(This article first appeared in The Northern Miner)
Teck Resources (TSX:TECK.A | TECK.B)(NYSE:TCK), Canada’s largest diversified miner, is facing fresh pressure from investors who want the company to ditch its energy and coal business and replace long-standing chief executive officer, Don Lindsay.
Connecticut-based Impala Asset Management has emerged this week as the second investor in a month to criticize Lindsay’s guidance. In excerpts of a letter to the miner’s board, published by Bloomberg, the firm blames Teck’s CEO for what it calls “destruction of shareholder value”.
Impala also claims that Lindsay receives one of the biggest paychecks in the industry — C$9.2 million ($6.6 million), including C$1.64 million in salary, last year.
Impala’s claims add to Tribeca Investment Partners’ recent concerns. The Australian hedge fund shareholder said in April that investors should push Teck to a pure base metals miner.
The move, it said, would improve Teck’s environmental credentials and could lead to a six-fold share gain over the next year.
Tribeca also said the Vancouver-based miner should oust Lindsay and scrap its dual-class shares to boost returns.
Earlier this month, Teck seemed to have taken its first step towards the direction investors are rooting for by leaving the Canadian Association of Petroleum Producers. The industry organization’s members represent about 80% of the country’s oil and gas production.
Teck spokesman, Chris Stannell, said at the time that the decision was made as part of a cost-cutting drive, noting the membership annual cost is close to cost about C$135,000.
Oilsands and coal
In February, Teck officially withdrew its application to build the C$20.6-billion ($15.7bn) Frontier oilsands mine, just days before the Canadian government was slated to make a decision on the 260,000-barrel-per-day project in northern Alberta.
The company remains a big player in the oilsands sector, however, as it owns 21.3% of the Fort Hills oilsands mine, operated by partner Suncor Energy (TSX, NYSE: SU).
The miner has also set a target to reduce carbon emissions by 33% by 2030. The announcement builds on the previously disclosed commitment to be carbon neutral across all its operations and activities by 2050.
Teck’s sustainability strategy also includes goals to procure 50% of its electricity demands in Chile from clean energy by 2020 and 100% by 2030 and accelerate the adoption of zero-emissions alternatives for transportation by displacing the equivalent of 1,000 internal combustion engine vehicles by 2025.
This week, however, news of the US government growing reportedly concerned about pollution from coal mines in British Columbia, where Teck’s steelmaking coal operations are located, emerged.
According to The Canadian Press, the Environmental Protection Agency (EPA) is demanding the BC government to explain why the company’s coal mines are being allowed to exceed guidelines for a toxic heavy metal.
Teck had previously said, in response to similar claims, that it had earmarked more than $1 billion to clean up its effluent by 2024, adding that selenium levels should start to drop by the end of this year.
(With files from Bloomberg)
Colorado-based Energy Fuels (TSX: EFR) announced that it has entered into an agreement to acquire from GeoInstruments Logging all of its Prompt Fission Neutron technology and equipment, including all of its related intellectual property.
In a press release, Energy Fuels said the $500,000-acquisition will give the company the exclusive right to use, license, and service this particular PFN technology globally.
“PFN is critical to successful uranium production particularly from many in situ recovery deposits, as it more accurately measures downhole in-situ U3O8 ore grade versus traditional Total Gamma and Spectral Gamma methods,” the media brief states.
The equipment and technology to be acquired include four PFN tools; nine gamma tools with point resistivity, spontaneous potential and deviation; two low-mileage, heavy-duty logging trucks with logging and associated equipment; power supplies, computers, communication, and other technology; and all associated intellectual property, including all internal details of the tools, circuit board diagrams, firmware code, software, manuals, instructions, patents and the sole right to utilize and license the acquired PFN technology globally.
“[The] acquisition of this PFN equipment and technology will further solidify Energy Fuels’ position as the leading uranium miner in the United States, especially in the ISR space,” Mark S. Chalmers, the buyer’s president and CEO, said in the press brief. “We believe that acquiring PFN technology is now more important than ever, as we believe a revival of the U.S. uranium industry is imminent.”
Preliminary figures from the US Energy Information Administration show that renewables generated more electricity than coal every day in April 2020.
According to the Institute for Energy Economics and Financial Analysis, whose researchers had access to the numbers, this clean energy stretch began on March 25, when utility-scale solar, wind and hydropower collectively produced more than coal-fired generation and continued for at least 40 straight days through May 3.
“These figures are even more remarkable when compared to 2019’s total of 38 days when renewables beat coal,” IEEFA experts said in a media statement. “Last April had a total of 19 days when this happened—the most of any month in 2019—with the longest continuous stretch lasting just nine days.”
According to the Institute, the transition away from coal for electricity generation has accelerated in 2020 due to low gas prices, warmer weather, a significant amount of new renewable capacity connecting to the grid late last year, and more recently, lower power demand due to the coronavirus pandemic.
“IEEFA had forecasted that power generation from renewables would likely surpass coal-fired generation in 2021, an important milestone in the energy transition that is well underway,” the brief states. “But in the first quarter of 2020, renewable generation unexpectedly exceeded coal, and with this strong performance continuing in the second quarter, there is an increasing chance that the milestone could occur this year.”
Globally, renewable energy overtook coal as a source of electricity generation for the first time in 2019, according to the International Energy Agency.
Arizona-based Electric Applications just launched a research project designed to balance electrical current across banks of advanced lead batteries supporting wind and solar systems.
The 18-month study is backed by the Consortium for Battery Innovation. The plan is to take an in-depth look into how balancing the electrical current across large strings of batteries can improve cycle life, which is the ability of a battery to continue working through numerous cycles when it is not fully charged.
In the view of the researchers, improving cycle life will also help reduce the overall cost of the energy storage system, lowering the need for replacement batteries, something utility and renewable energy providers should take into consideration.
“This kind of research is taking advanced lead battery technology to a new level by marrying intelligent battery management systems with banks of battery storage units,” the Consortium’s director, Alistair Davidson, said in a media statement. “Lead batteries are particularly useful in microgrids and in managing peaks and troughs in demand, such as those experienced in renewable energy systems.”