London Metal Exchange and Fastmarkets to set lithium price benchmark

The London Metal Exchange (LME) is partnering with Fastmarkets to develop the reference price for its planned lithium futures contract, which will help analysts and executives to get a full sense of the global market for the key ingredient in the making of the batteries that power electric vehicles (EVs).

Unlike for copper or other metals used in the making of EVs, there currently is no traded price for lithium.

“In recent years there has been unprecedented price volatility in the lithium market, driven particularly by explosive electric vehicle (EV) battery demand,” the exchange said.

Unlike for copper or other metals used in the making of electric vehicles, there is no traded price for lithium.

The move, it added, comes after industry players, including producers, end-users and several leading automotive firms, urged the LME to develop effective lithium price-risk management tools.

“This global strategic partnership will develop a definitive roadmap aimed at providing a pricing mechanism for lithium that can be utilized throughout the supply chain and will support the development of risk-management tools for the industry,” Fastmarkets said in a separate statement.

Last year, the LME asked companies that assess prices of battery-grade lithium to submit proposals to supply a reference for cash-settled contracts it planned to launch  in the fourth quarter of this year.

Today, however, the exchange only said it would continue “to gauge appropriate timing” for a launch.

Currently, producers negotiate contracts with buyers, but the terms of the deals are not made public.

The LME, the world’s oldest and largest market for industrial metals, said it selected Fastmarkets because their prices were used widely across the industry.

The agency already provides the global benchmark for the cobalt market — another key battery raw material.

The post London Metal Exchange and Fastmarkets to set lithium price benchmark appeared first on

DeepGreen closer to mining battery metals from the sea after $150m injection

Canada’s DeepGreen Metals, a start-up planning to extract cobalt and other battery metals from small rocks covering the seafloor, has secured the bulk of the $150 million it needs to carry out its first feasibility studies.

The financing, provided by Switzerland-based offshore pipeline company Allseas Group, is a welcome sign of progress for the deep sea mining sector, which has been stalled due regulatory uncertainty and environmental concerns.

Unlike other seafloor mining companies, including pioneer Nautilus Minerals, the Vancouver-based explorer doesn’t want to drill, blast or dig the bottom of the ocean. DeepGreen’s main goal is to scoop up small metallic rocks located thousands of metres below the surface in the North Pacific Ocean.

Unlike other seafloor mining companies, the Canadian start-up doesn’t want to drill, blast or dig the bottom of the ocean, but to scoop up small rocks containing cobalt, nickel and other battery metals.

Its exploration focus is the Clarion-Clipperton Zone (CCZ), a mineral-rich, 4,000-kilometre swath of the Pacific that stretches from Hawaii to Mexico, where billions of potato-sized metals-rich rocks lie in a shallow layer of mud on the seafloor.

The deep sea, more than half the world’s surface, contains more cobalt, nickel, copper, manganese and rare earth metals than all land reserves combined, according to the US Geological Survey.

Companies exploring or already developing projects to mine the seafloor argue the extraction of those deep-buried riches could help diversify the sources currently supplying metals needed for electronics and evolving green technologies, such as electric vehicles (EVs) and solar panels.

Academics and scientist, however, are concerned by the lack of research on the possible impacts of high seas mining. They fear the activity could devastate fragile ecosystems that are slow to recover in the highly pressurized darkness of the deep sea, as well as having knock-on effects on the wider ocean environment.

Not enough studies

Last year, the European Parliament called for a ban on seabed mining until the environmental impacts and risks of disturbing unique deep-sea ecosystems are understood. In the resolution, it also urged the European Commission to persuade member states to stop sponsoring and subsidizing licenses to explore and exploit the seabed in international waters as well as within their own territories.

Shortly after, an international team of researchers published a set of criteria to help the International Seabed Authority (ISA), a UN body made up of 168 countries, protect biodiversity from deep-sea mining activities.

So far, it has granted 29 licences to governments and companies, authorizing them to explore in international waters.

Nautilus, however, is the only company that has gone beyond the exploration stage and has gotten close to open the first polymetallic seabed mine off the coast of Papua New Guinea. Its Solwara 1 project, however, has been slowed by funding issues and local opposition.

Anglo American (LON:AAL) sold its 4% stake in Nautilus a year ago, as part of efforts to retain only its most profitable assets. And, in March, it had to delist from the Toronto Stock Exchange.

The post DeepGreen closer to mining battery metals from the sea after $150m injection appeared first on

Top 40 miners’ good performance not enough for investors – report

The world’s 40 largest mining companies showed steady growth in 2018 and consolidated the positive performance they had over the past several years, a new report by PwC revealed.

In its Mine 2019: Resourcing the future report, the multinational professional services network states that, as a group, the top 40 mining firms increased revenue by 8% to $683 billion, buoyed by higher commodity prices and a 2% growth in production.

According to PwC, these companies also boosted their cash flows, paid down debt and provided a record dividend of $43 billion to their shareholders.

The firm’s experts highlight the good performance of copper miners such as Freeport-McMoRan, Antofagasta, Jiangxi, First Quantum, KGHM, among others, who comprise over half of the top 40 companies and are responsible for 55% of the global production of the red metal.

As those companies responded to higher copper demand, year-on-year production grew almost 7% and revenue was up 12%. However, 2019 is not looking so good as producers are forecasting a fall in output due to declining grades, higher costs, and the lengthy processes of bringing new projects online in a moment when inventory levels are at ten-year lows.

Coal miners also had a positive 2018, as the black mineral, which supports 38% of the global electricity generation, remained the largest revenue-generating commodity with prices growing by 21% and revenues by 12%.

“Top 40 coal production increased despite the selloff of coal assets by some. Glencore and Yangzhou acquired Rio Tinto’s remaining coal assets in Australia. Coal offtake agreements are often not at spot, explaining the difference between revenue and price growth,” the analysis explains.

PwC predicts that coal demand will continue to rise in the near to medium term due to the above-average economic growth of Asian countries. Past 2023, when renewable energy is expected to reshape the energy mix, coal consumption should plateau.

Also plateauing will be iron ore prices, the report suggests. Following an increase in production in 2018 driven by Australian and Brazilian companies’ expanded mines, demand was fulfilled and prices went down 3%.

The aftermath of the disaster at Vale’s Corrego do Feijão operation in late January, is expected to have a mid-term impact on iron ore prices.

“Forecasts indicate continued steady performance in 2019. Revenue should remain stable, with weaker prices for coal and copper offsetting marginally higher production and higher average prices for iron ore,” Mine 2019 reads.

Climate change and other uncertainties

Despite the generally positive numbers, PwC’s analysis reveals that investors seemed unimpressed last year, judging by market valuations, which fell 18%. “While total market capitalization rose in the first term of this year, it remains 8% down compared to the end of 2017. Over the past 15 years, total shareholders’ return in mining has lagged that of the market as a whole as well as comparable industries such as oil and gas,” the document states.

In the view of PwC’s experts, investors’ reaction indicates that the market, with its perennial focus in the future, has reservations about the mining industry’s ability to respond to the risks and uncertainties of a changing world.

PwC says that when it comes to consumers, miners need to clearly articulate the essential role that they play in meeting their existing and emerging needs

“With strong balance sheets and cash flows, now is the time for the Top 40 to address the issues weighing down market valuations. Climate change, technology and changing consumer sentiment are among the defining business challenges of our age,” the report states. “To restore faith in ‘brand mining’, leading miners need to prove they are keeping up with the pace of change. As an industry, this means transforming their reputation as efficient ‘converters of dirt’ to prominent builders of both economic and societal capital. Prioritising green and customer-centric strategies, enabled by technology, will help earn the trust of stakeholders and enable miners to create sustainable value into the future.”

According to PwC, investors worry about the variety of responses that mining companies give when it comes to climate change and the rising frequency of extreme weather events. While some firms have adopted climate change strategies, others are seemingly indifferent.

In general, the top 40 miners are performing strongly in terms of sustainability reporting but PwC says stakeholders believe that disclosure is not enough and they want direct, measurable and visible progress.

Beyond their reduction in groundwater consumption and targets to decrease greenhouse gas emissions by one digit by 2020, investors seem to want mining giants to invest in green technology and in more environmentally friendly solutions for their respective commodity end uses.

PwC’s document predicts that copper and battery metals stand to gain in this context, as the energy mix moves away from combustion engines to electricity including renewable energy.

“The mining industry will have a window of opportunity over the next few years, created by strong operating fundamentals, to adapt to the growing and changing expectations of stakeholders. By utilising technology to operate safely and more efficiently, addressing global concerns, and maintaining a disciplined strategy to create ongoing value for its stakeholders, the industry can forge a better future for all beneficiaries of mining – industry, consumers, communities and other stakeholders,” the report concludes.

The post Top 40 miners’ good performance not enough for investors – report appeared first on

Argentina rejects Barrick’s challenge to glacier protection

The verdict is in, and it does not look good for miners in Argentina.  

In a unanimous decision on Tuesday, Argentina’s Supreme Court rejected a challenge to an environmental law banning mining in glacial areas that was brought by Barrick Gold. The Canadian miner had attempted to subvert Argentina’s controversial Glacier Protection Law prohibiting mining in glacier and permafrost areas.  

Barrick owns the Veladero gold mine in Argentina and the Pascua-Lama project on the Argentine-Chile border. 

The company did not issue a statement, but a Barrick source with knowledge of the matter said the court's decision would not affect any of the company's current operations in Argentina. The source, who said Barrick would "analyze" the ruling, spoke anonymously, Reuters reported.

Miners have long marked this region for its rich gold, silver and copper deposits, and have been on standby for nearly a decade awaiting a judicial decision from Argentina’s top tribunal as to whether or not they could mine in glacier terrain,” said Jorge Daniel Taillant, executive director, Center for Human Rights and Environment in a media statement.  

McEwen Mining’s Los Azules, Stillwater’s El Altar, and Meryllion Gold’s Cerro Amarillo are a few other mining projects that stalled when Argentina passed the world’s first Glacier Protection Law, prohibiting any industrial activity that could harm glaciers and periglacial areas Miners have long marked this region for its rich gold, silver and copper deposits, and have been on standby for nearly a decade awaiting a judicial decision from Argentina’s top tribunal as to whether or not they could mine in glacier terrain

The Argentine Glacier Law was passed in 2008, unanimously by Congress, when then activist Environment Secretary Romina Picolottibrought the draft law through Congress with no opposition whatsoever,” Taillant said. 

Then President Fernández de Kirchner vetoed the new Glacier Law on the grounds that it was detrimental to the mining sector.  

Environmentalists fought for the return of the Glacier Law, and in 2010 Congress passed a national Glacier Protection Law, prohibiting mining and oil and gas projects in glacier and permafrost areas, making the law retroactive. 

In 2015 Chile's Environmental Court ruled that the Pascua-Lama project had not damaged glaciers within the project's area of influence. 

Argentina’s public officials in the mining sector, and environmental authorities took nearly 10 years to carry out the glacier inventory which the law called for, and failed to crack down on mining operations already in glacier areas, which the law also mandated 

Sure that the court system would take years, or even decades to rule on the case, pro-mining public officials went about their business as if the Glacier Law did not exist, encouraging mining companies to move forward with investments, although the billions of dollars promised by mining companies to extract gold, silver and copper, did not materialize,” Taillant said. 

Argentina's Supreme Court knocked down the miner’s arguments, maintaining that the company failed to show that the Glacier Protection Law affected mining investments.  

“The request of Barrick to declare the unconstitutionality of the national regulations has been a perverse move that fortunately lost. Now, it is necessary to enforce the law and close Veladero. We can not allow more mining on the glaciers of the Argentines, " said Gonzalo Strano, a Greenpeace Argentina spokesperson in a media statement.  

Tuesday’s ruling halts 44 mining projects nearby or on bodies of ice that are being evaluated, according to the National Secretariat of the Environment. 


The post Argentina rejects Barrick's challenge to glacier protection appeared first on

Codelco leads $11 billion mining capital raising in 2019

Codelco leads $11 billion mining capital raising in 2019

Source: GlobalData Mining Intelligence Center

A new report by GlobalData shows the value of capital raising deals in the metals and mining sector increased from the final quarter last year to over $11 billion in Q1 2019 despite the number of agreements inked falling sharply.

GlobalData said overall, the total volume of completed capital raising deals decreased from 378 in Q4 2018 to 273 in Q1 2019, a 27.8% decline.

In contrast, however, during the same period, the number of announced deals increased from 226 to 268, an 18.6% rise noted Vinneth Bajaj, senior mining analyst at the independent analytics firm:

“The slowing Chinese economy alongside the ongoing China-US trade war has weighed on the completion rate of mining capital raising activities."

According to the report the largest of the completed deals during the first quarter 2019 was the $1.3B capital raised by Chilean state-owned copper giant Codelco which offered international bonds due in 2049. This was followed by India’s Tata Steel which raised $967m in a private placement of shares.

India, China, Chile, Canada, and Switzerland were the five largest countries globally in terms of deal value, accounting for over 81% or US$9.2bn of the global total.

Robust mining M&A

A recent report by GlobalData showed overall deal value of mergers and acquisition in the sector in Q1 2019 grew by 6.3% to $22.5B from $21.2B in the same period last year. Deal volume decreased by 8.7% from 358 in Q1 2018 to 327 deals in Q1 2019.

Among advisers CIBC topped the list, with the Canadian bank advising on two deals worth $18.7B edging out M. Klein & Company. Cravath Swaine & Moore and Davies Ward Phillips & Vineberg shared first place among M&A legal advisers.

The four firms worked together, advising Barrick Gold (which last year bought Randgold Resources) on its attempted takeover of Newmont Mining launched in February.

The all-share mega-merger did not materialize, but the two gold miners did combine their operations in Nevada to create the world’s largest gold mining complex with annual production of more than 4m ounces. Newmont's acquisition of Goldcorp closed in April.

The post Codelco leads $11 billion mining capital raising in 2019 appeared first on

Top miners saw positive FY2018

Large diversified miners saw another 12 months of consistently increasing profit margins and cash flows in FY2018.

According to Fitch Solutions, the positive numbers are a result of miners streamlining their operations, cutting debt and expenditures, increasing production efficiencies, and incorporating advanced technology in operations to further enhance productivity and reduce costs.

"Building on their recovery in FY2016, and stellar results in FY2017, top mining companies reported commendable FY2018 results yet again, including Rio Tinto's 56% y-o-y increase in net income and shedding of all of its debt, Freeport-McMoRan and Anglo-American's offloading of about half of their net debt levels from 2017, and Vale's 17% y-o-y increase in profit margins," a report released by the market intelligence firm reads.

Fitch cites the fact that Rio is not only free from debt and in a net-cash position now, but also gave shareholders a return on equity ratio of 31% in FY2018, one of the highest in the industry. "We expect continued outperformance from Rio due to strong management and good governance, as displayed by the company's consistent capital discipline and strong balance sheets," the document reads.

In Fitch's view, one of the keys to such positive results for Rio and others has been the decision to divest from non-core assets and implement stringent spending programmes that have allowed them to reduce debt-loads consistently.

"Anglo American's drastic restructuring plan announced in 2015 lowered the firm's net debt-to-EBITDA ratio from a staggering 11.1x in 2013 to 0.3x by 2018," the report recalls. "The company has transformed the quality and performance of its portfolio over the past five years by halving the number of assets."

Similarly, the market researcher quotes big strides made by Vale after management decided to sell non-core assets. The Brazilian giant was able to reduce its heavy debt load from over $25.1 billion in FY2016 down to $9.7 billion as of FY2018.

The report states that, despite high price volatility, generally supported metal prices also drove the strong performance last fiscal year.

What's a miner to do with all this cash?

"Despite tempting times for miners to resume aggressive acquisitions amid better performance and a pickup in commodities prices since 2017, mining companies will continue their restraint over capital and supply over the coming years," Fitch's report reads.

According to the market researcher, while healthier balance sheets have encouraged a slight increase in CapEx budgets since 2017, the increase has been modest.

The analysis presents Vale's plans as an example. The iron ore miner has budgeted to spend $4.7 billion per year in 2019 and 2020, while back in 2013 the company spent $13.3 billion.

Rio Tinto is on the same boat with plans to spend $6 billion in 2019 and $6.5 billion in 2020 compared to $13 billion in 2013.

Freeport-McMoRan, on the other hand, spent $5.3 billion in 2013 and expects to spend only $2.3 billion per year in the next two years.

For Fitch, big miners are not planning to increase production either, even though prices of most commodities are predicted to go up over the coming years.

"For instance, Rio Tinto has adopted a 'value over volume' approach and expects minimal increases in production in 2019. Anglo American's production guidance for the years ahead shows most of its output levels for the coming years at or minimally above FY2018 levels. Glencore is a step further, cutting its 2019 production targets for all commodities," the report reads.

The post Top miners saw positive FY2018 appeared first on

Geoscience BC gets C$5 million to conduct earth science research

Following the recommendations of the Mining Jobs Task Force report released in January 2019, the Government of British Columbia granted Geoscience BC C$5 million in one-year bridge funding to support earth science research in the western Canadian province.

In a press release, the non-profit organization said the new funding will allow for the continuation of its minerals, energy and water related public earth science for another 12 months. The cash injection will also avoid the halting of ongoing projects and allow for new programmes scheduled for 2019-2020 to go ahead as planned.

BC Minister of Energy, Mines and Petroleum Resources, Michelle Mungall, together with Geoscience BC President Gavin C. Dirom, and Executive Vice President Carlos Salas. Photo by Geoscience BC.

Among the projects set to begin soon, the group cited a new airborne survey over northern Vancouver Island to identify potential mineral deposits; new research to better understand how earthquakes travel through the ground in northeast BC; and a regional assessment of geothermal energy potential in the Garibaldi Volcanic Belt in partnership with the Geological Survey of Canada.

“The research that will come from this funding will attract the investment necessary for resource development,” Geoscience BC president and CEO, Gavin C. Dirom, said in the media statement. “Geoscience BC’s minerals, energy and water research meets a need for new public geoscience data that attracts investment, informs decisions, stimulates innovation and supports the responsible development of BC’s natural resources.”

The post Geoscience BC gets C$5 million to conduct earth science research appeared first on