Nickel price volatility makes for a tough H1 for Western Areas

Nickel miner Western Areas has reported a turbulent six months for the period ending December, with volatile nickel prices impacting revenues and profits. Revenue for the six months to December fell to A$123.6-million, compared with the A$132.4-million in the previous six months, while net profits after tax declined from A$8.3-million to A$150 000 in the same period.

Recommissioned Aussie mine dispatches first nickel concentrate shipment to China

This week, Panoramic Resources (ASX:PAN) sent out the first shipment of bulk nickel/copper/cobalt concentrate from its Savannah mine in Western Australia to Lianyungang, China.

The shipment is making the news because its contents were produced after Panoramic was able to reopen the mine, which had been placed on care and maintenance in May 2016. The miner was waiting for a recovery in the nickel price, which at the time was around $3.93 per pound.

Such recovery has been taking place in the past weeks, prompted by growing interest in the mineral from the lithium-ion battery industry. Prices in the first two months of 2019 have reached $5.61 per pound of nickel, which makes the current situation significantly different from that miners were facing three years ago.

Foreseeing this new market reality, Panoramic obtained new financing in September 2018 and recommenced underground operations in December 2018, following pre-production and rehabilitation work that started in October.

Prior to this, the Perth-based firm signed a deal with China's Jinchuan and Sino Mining to sell them concentrate for at least the next four years.

The first shipment, dispatched on February 13, contained 7,735 wmt of nickel/copper/cobalt concentrate valued in approximately $6.1 million.

“This is a significant milestone in the recommissioning of the mine and processing plant at Savannah,” said Peter Harold, managing director of Panoramic Resources, in a media statement.

According to the company’s website, the project will now ramp up to full production over 15 months to a forecast life-of-mine average annual production rate of 10,800t Ni, 6,100t Cu and 800t Co metal contained in concentrate.

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Sherritt International reports higher annual nickel production at Cuban JV

Sherritt International (TSX: S) released its financial results for Q4 2018, today, reporting the company’s share of finished nickel production at the Moa joint venture (JV) in Cuba and Saskatchewan, Canada was 4,294 tonnes, up 4% from last year, while finished cobalt was 428 tonnes, down 8% from Q4 2017.

The company stated production for Q4 2018 was impacted by the disruption in the supply of hydrogen sulphide, a key reagent used in the production of finished nickel and cobalt at the refinery in Fort Saskatchewan. Q4 2018 marks the second consecutive quarter that the Moa JV has made distributions, indicative of improved nickel prices over the past several quarters.

Sherritt received C$6.7 million in distributions from the Moa JV in Q4 2018 for a total of C$11.9 million in distributions for FY2018. Q4 2018 marks the second consecutive quarter that the Moa JV has made distributions, indicative of improved nickel prices over the past several quarters.

Sherritt ended the year with cash, cash equivalents and short-term investments of C$207 million, up from C$203 million at the end of 2017.

“Sherritt ended 2018 with lower debt and more cash than we started the year with as a result of several initiatives designed to reduce expenses, buy back $130 million of outstanding debentures and improve production reliability at our operations,” said David Pathe, Sherritt’s president and CEO in a media statement.

“Although concerns of international trade disputes and the impacts of tariffs have resulted in recent commodity price volatility, we expect to sustain our momentum through 2019 and beyond by capitalizing on the strong market fundamentals and outlook for Class 1 nickel, completing drilling on Block 10, and identifying opportunities where we can bring innovations developed by our technologies group to market,” said Pathe.

At market close in Toronto on Thursday, Sherritt’s stock was up 2.35%.

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Cost parity by ‘early 2020s’ will be electric vehicle tipping point

A new report by McKinsey forecasts a rapid switch from gas guzzlers to electric vehicles on the world's roads will be boosted by the plummeting costs of owning a battery powered vehicle.

The consulting firm's 2019 Global Energy Perspective report foresees a two-thirds drop in the cost of EV battery packs by 2030. The tipping point at which EVs will be cheaper to own than internal combustion engine-powered vehicles is forecast to be reached in the early 2020s:

The timing of total cost of ownership (TCO) parity in the US and China is comparable to Europe, with China slightly earlier and the US slightly later, reflecting differences in fuel taxation and subsidies for electric vehicles.

After this tipping point, "economic considerations alone" would be sufficient to accelerate the growth of EV sales, says McKinsey. Car sharing and autonomous driving will add further incentives to go electric. Improving battery technologies will mean that even long-haul trucks could be economically electrified during the second half of the next decade.

Cost parity by 'early 2020s' will be electric vehicle tipping point

Source: McKinsey Global Energy Perspective 2019

McKinsey's view of the electrification of the transport sector makes for some dramatic reading:

  • EV sales jump to 100m units by 2035
  • Battery-powered passenger car sales grow by a factor of 60 through 2050
  • By 2035 there will be 400m EVs on the road in China and developed countries
  • To meet demand, 2.4m charging stations must be deployed per year through 2035
  • By 2050 road transport will constitute 27% of electricity demand, up from less than 1% today
  • Demand for oil could peak as soon as the early 2030s

McKinsey's rosy view of transport electrification stands in contrast to a recent US government study which forecasts electric car sales will be stuck in the slow lane for the foreseeable future.

 

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Minerals Council of Australia calls for tax, workplace law reform

The Minerals Council of Australia published a report titled The Next Frontier: Australian Mining Policy Priorities where it asks the government to advanced a revived tax reform that removes barriers that hinder the growth of the country’s mining sector.

According to the Council, such reform would encourage additional investment in capital and technology.

“Australia should have strong tax integrity rules that are consistent with OECD best practice. The treatment of debt to fund investment in Australia should be aligned with OECD measures and should not affect legitimate debt, which is critical for Australia as a capital-importing economy,” the report reads.

The industry group also called on the Parliament to ensure tax settings are competitive and to retain the Fuel Tax Credit scheme so that companies operating in remote areas are not penalised for off-road diesel use.

In the document, the MCA urges authorities to modernise Australia’s workplace rules, which would imply removing duplication and red tape to allow local firms to stay ahead of the pack globally. In the organization’s view, there is unnecessary overlap in the requirements put forward by federal and state governments and this causes delays on projects and impacts the workforce.

“Flexibility and choice in employment arrangements will ensure that Australia’s highly paid, highly skilled mining workforce will be able to make the most of opportunities created by technology and new ways of working,” the report states.

The Minerals Council of Australia said it fears that jobs and the sustainability of regional and remote communities will be at risk if legislation related to the workplace is kept the way it is right now.

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American Manganese moves forward with plans to recycle lithium-ion battery materials

American Manganese (TSX.V: AMY; FRANK: 2AM) announced this week that its partner, Kemetco Research, started the processing of a select sample of cathode scrap material through Stages 1 and 2 of a Pilot Plant built to recycle cobalt, nickel, manganese, and aluminum.

In a press release, the Surrey-based company explained that the commencement of the pilot plant followed a hazard and operability study and preliminary testing of all the unit operations in the first two processing stages.

Scrap battery cathode material. Photo by American Manganese.

The exploration firm also provided details as to what are the different stages of its hydrometallurgical plant aimed at generating a continued recovery of cathode material.

Stage 1 – Pre-treatment of cathode material
Stage 2 – Leach of active material
Stage 3 – Purification
Stage 4 – Recovery of base metals
Stage 5 – Lithium recovery and water recycle

According to Norman Chow, President of Kemetco Research, having gone through the first couple of phases is a great accomplishment for American Manganese, as it moves forward in its quest to prove its patent-approved lithium-ion battery recycling technology.

"This is a great milestone for the company as we work towards a complete lithium-ion battery recycling process. The company is also anticipating an official U.S. Patent number for its recently approved patent application,” Reaugh said in the media statement.

In previous releases, American Manganese has cited industry sources as saying that up to 10% of manufactured lithium-ion battery cathodes are rejected for use. The rejected cathodes, termed ‘scrap,’ consist of the aluminum foil backing and the cathode metal powder which, in the firm’s view, can be recycled into usable cathode material.

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UEX eyes 2.94% Co and 2.08% Ni drilled over 4.5 metres at West Bear

Saskatoon-based UEX Corporation has the first drill results from its West Bear cobalt-nickel property located in the heart of the Athabasca Basin. Recent results have also allowed the company to extend the strike length of the deposit to 400 metres.

Highlights from the first assays include 2.94% cobalt and 2.08% nickel over a 4.5 metre core length and 1.94% cobalt and 3.68% nickel over 11.0 metres. Both these results came from hole WBC-044 that had a total length of 13.8 metres averaging 0.72% cobalt and 1.06% nickel.

Other assays were positive as well. Hole WBC-043 interested 012% cobalt and 0.31% nickel over 13.8 metres. WBC-042 returned 20.5 metres averaging 0.55% cobalt and 0.25% nickel, including 1.90% cobalt and 0.57% nickel over 5.5 metres. WBC-045 returned 20.5 metres at 0.04% cobalt and 0.14 nickel. The final hole – WBC-046 – returned 52.0 metres averaging 0.53% cobalt and 0.36% nickel, including 2.0 metres at 1.65% cobalt and 0.75% nickel, 9.0 metres at 2.17% cobalt and 1.07% nickel, and 1.0 metre at 0.96% cobalt and 0.94% nickel.

True widths are estimated to be 90% to 95% of core lengths.

UEX announced the maiden resource estimate for West Bear last July. Inferred resources were 390,000 tonnes grading 0.37% cobalt and 0.22% nickel for 3.2 million lb. of contained cobalt and 1.9 million lb. of contained nickel.

(This article first appeared in the Canadian Mining Journal.) 

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Balmoral extends known depth of Grasset deposit in Quebec

In the first expansion drilling since 2015 on its Grasset deposit in the Abitibi greenstone belt of Quebec, Balmoral Resources has extended the known depth of the nickel, copper, cobalt and PGE deposit by several hundreds of metres.

The junior explorer reported this week that Grasset’s H1 zone has now been intersected for 1,140 metres along strike and from the bedrock surface to a depth of 775 metres, while the deposit’s broader H3 zone has been intersected for 700 metres along strike and to a vertical depth of about 620 metres.

The deposit remains open in all directions. Other highlights include 23.03 metres of 1.08% nickel, 0.12% copper, 0.03% cobalt, 0.20 gram platinum and 0.51 gram palladium from 537 metres downhole.

Drill hole GR-18-102A returned a 0.78 metre intercept grading 0.51% nickel, 0.002% copper, 0.02% cobalt, 0.07 gram platinum and 0.17 gram palladium from 751.30 metres downhole in the H3 zone.

The same hole returned an interval in the H1 zone of 14.15 metres grading 0.41% nickel, 0.04% copper, 0.01% cobalt, 0.07 gram platinum and 0.15 gram palladium starting 942 metres downhole, including a 0.51 metre intercept of 2.76% nickel, 0.15% copper, 0.05% cobalt, 0.40 gram platinum and 0.98 gram palladium.

Drill hole GR-18-05 also intersected both the H1 and H3 zones. The hole, the most northwesterly to test the deposit to date, returned a 3.10 metre intercept in the H1 zone of 1.49% nickel, 0.21% copper and 0.04% cobalt, 0.55 gram platinum and 0.83 gram palladium from 318 metres downhole—grades the company notes are almost identical to the current resource grade of the deposit from the H1 zone.

The high-grade core of Grasset currently hosts 3.45 million indicated tonnes grading 1.56% nickel, 0.17% copper, 0.03% cobalt, 0.34 gram platinum and 0.85 gram palladium to a vertical depth of just under 500 metres.

Other highlights from the most recent batch of assay results include 23.03 metres of 1.08% nickel, 0.12% copper, 0.03% cobalt, 0.20 gram platinum and 0.51 gram palladium from 537 metres downhole.

Balmoral  (TSX: BAR; US-OTC: BALMF) discovered Grasset in 2013 and tabled a maiden resource in 2016.

At press time, Balmoral was trading at $0.15 per share within a 52-week trading range of $0.12 and $0.475 per share. The junior has about 139 million common shares outstanding for a market cap of about $21 million.

This story first appeared in The Northern Miner.

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Australia miner Independence says in talks with potential buyers of battery chemicals

Independence Group, an Australian miner looking to move into making chemicals used in electric vehicle batteries, on Wednesday said it was in talks with a range of potential buyers of those products. The mid-tier miner trialled production of battery chemical nickel sulphate in December and January, said CEO Peter Bradford, and is now set to send samples to potential customers and partners.

Battery megafactories buildout could up nickel demand 19 fold—Benchmark

It was encouraging for miners when Simon Moores, managing director, Benchmark Mineral Intelligence, testified before the U.S. Senate Committee on Energy and Natural Resources on Tuesday.

Moores was summoned by the Senate Committee to testify on the lithium, cobalt, nickel and graphite supply chains for energy storage.

"Benchmark Mineral Intelligence is now tracking 70 lithium ion battery megafactories under construction across four continents, 46 of which are based in China with only five currently planned for the US. When I gave my last testimony in October 2017, the global total was at 17," Moores said.

Moores said that these megafactories are being built almost exclusively to make lithium ion battery cells using two chemistries: nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminium (NCA).

“This means the supply of lithium, cobalt, nickel and manganese to produce the cathode for these cells, alongside graphite to produce battery anodes, needs to rapidly evolve for the 21st century," Moores testified.

Moores presented a chart based on the assumption that all of these megafactories are built and run at 100% capacity utilization.

"Under this scenario, lithium demand will increase by over eight times, graphite anode by over seven times, nickel by a massive 19 times, and cobalt demand will rise four-fold, which takes into account the industry trend of reducing cobalt usage in a battery," Moores testified.

Also on Tuesday, Benchmark Mineral Intelligence launched lithium carbonate and hydroxide price indexes, which draw from the data collected by analysts across 11 market prices. See more on price boosts here.

Moores' full testimony is available here.  

Read more here. 

(Hat tip to WC)

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