Newsletter 22-4-2024

Newsletter – 22.04.2024

22/04/24                                      WEEKLY NEWSLETTER
  • African critical minerals output could reach $2 trillion by 2050
  • Emirati company to invest $550 million in Argentinian lithium project
  • New process recovers five times more lithium from waste than existing technology
  • China is front and center of gold’s record-breaking rally
  • UAE giant eyes majority stake in Vedanta’s Zambian mines in expansion drive
  • Glencore and Trafigura’s sanctions games are draining the LME

African critical minerals output could reach $2 trillion by 2050

Cobalt found alongside copper and malachite.

Sub-Saharan Africa could produce almost $2 trillion of metals required for the energy transition by 2050, according to the International Monetary Fund.

Global revenue from mining copper, cobalt, lithium and nickel could reach $16 trillion in current dollar terms over the next quarter century under a demand scenario estimated by the International Energy Agency, the IMF said in a paper on Friday. Output from sub-Saharan Africa will account for about 12% of that total, according to the report.

As demand for the minerals used in electric vehicles and renewable energy equipment is expected to soar, the Democratic Republic of Congo already produces more than 75% of the world’s cobalt and is the second-largest source of copper. Countries including Zimbabwe, Ghana and Mali plan to become significant producers of lithium.

Emirati company to invest $550 million in Argentinian lithium project

Emirati engineering company United Mining Projects Corporation (UMPC) announced, through its subsidiary Marhen Lithium, a $550-million, four-year investment in Argentina’s northwestern Catamarca province.

In a press release, UMPC said that after two years of negotiations between the Catamarca government and a consortium of foreign companies, an accord to start exploring and developing the Rio Grande Sur lithium brine salar project was signed.

Rio Grande Sur occupies 9,000 hectares and is situated in Catamarca’s northwest.

The half-a-million-dollar fund is to be used to build mine infrastructure, extract the battery metal and process it.

The project is forecast to create 700 jobs during the construction phase and keep 200 during the production phase, generating $168 million for the local economy.

Catamarca is Argentina’s top lithium-producing province, totalling 20,000 tonnes of lithium carbonate equivalent (LCE) generated every year and hosting most of the country’s exploration projects. Neighbouring Salta and Jujuy are also rich in the battery metal and, together, they are part of the Lithium Table, a regional government initiative that aims to standardize policies related to sustainable lithium extraction and processing.

In total, Argentina produces 34,000 tonnes of LCE annually, being the fourth top producer in the world behind Australia, Chile and China. In 2023, exports totalled over $500 million, with a year-on-year growth of 84%.

New process recovers five times more lithium from waste than existing technology

Chemists at the US Department of Energy’s Oak Ridge National Laboratory demonstrated that aluminum hydroxide, a mineral that is abundant in the earth’s crust, can adsorb at least five times more lithium than can be collected using previously explored adsorbent materials.

Using a newly developed process to extract lithium from waste liquids leached from mining sites, oil fields, and used batteries, the researchers proved that aluminum hydroxide can act as a sorbent of lithium sulphate and hold it.

“The key advantage is that it works in a wider pH range of 5 to 11 compared to other direct lithium extraction methods,” Parans Paranthaman, ORNL Corporate Fellow and co-author of the papers that present these findings, said in a media statement.

The patent-pending acid-free extraction process takes place at 140 degrees Celsius, compared to traditional methods that roast mined minerals at 250 degrees Celsius with acid or 800 to 1000 degrees Celsius without acid.

China is front and center of gold’s record-breaking rally

Gold’s rise to all-time highs above $2,400 an ounce this year has captivated global markets. China, the world’s biggest producer and consumer of the precious metal, is front and center of the extraordinary ascent.

Worsening geopolitical tensions, including war in the Middle East and Ukraine, and the prospect of lower US interest rates all burnish gold’s billing as an investment. But juicing the rally is unrelenting Chinese demand, as retail shoppers, fund investors, futures traders and even the central bank look to bullion as a store of value in uncertain times.

China and India have typically vied over the title of world’s biggest buyer. But that shifted last year as Chinese consumption of jewelry, bars and coins swelled to record levels. China’s gold jewelry demand rose 10% while India’s fell 6%. Chinese bar and coin investments, meanwhile, surged 28%.

UAE giant eyes majority stake in Vedanta’s Zambian mines in expansion drive

The mining investment arm of Abu Dhabi’s most valuable company has offered to buy a majority stake in Vedanta Resources’ Zambian copper assets, two sources familiar with the matter told Reuters, in its drive to build an African copper mining empire.

The unit of International Holding Company recently made an offer of more than $1 billion to buy a 51% stake in Konkola Copper Mines (KCM) from Indian billionaire Anil Agarwal-owned Vedanta, the sources said.

The unit – International Resources Holding (IRH) – is racing to broaden its burgeoning copper mining business in Zambia after buying a 51% stake in Mopani Copper Mines in a deal worth $1.1 billion. IRH said last month it planned to bid for a stake owned by EMR Capital in Lubambe copper mine, which is also for sale.

The deals spree is part of a push by oil-rich United Arab Emirates (UAE) and Saudi Arabia to secure critical metal supplies from Africa, a move that could also help them participate in the transition to green energy.

The IRH offer for a controlling stake is non-binding and talks are ongoing, one of the sources said. Vedanta might balk at giving up a majority interest in KCM as it has always wanted the assets on its balance sheet, the source added.

“IRH is deeply committed to strategically expanding its presence in the copper mining sector, exemplified by our interest in multiple assets,” IRH said in reply to a request for comment. It declined to comment on “ongoing discussions”.

Vedanta wants to sell part of its 80% stake in KCM and has hired Standard Chartered to manage the process in an effort to raise capital to revive the assets, which were nearly paralyzed in an ownership dispute with the government that erupted in 2019 when the then-administration seized them.

The Zambian government owns 20% of KCM through state firm ZCCM-IH.

Glencore and Trafigura’s sanctions games are draining the LME

The world’s two biggest metals traders are moving to withdraw large volumes of aluminum from the London Metal Exchange in a complex trade made possible by new UK sanctions on Russian metal, raising questions about unintended consequences from the new rules.

Trafigura Group and Glencore Plc plan to withdraw the metal to profit from a new multi-tiered system created by the sanctions, according to people familiar with the matter. The trade involves ordering out Russian metal and then re-registering it on the LME under a new, less-desirable category, while striking profit-sharing deals with warehouses to receive a sliver of the rent paid by future owners for as long as it sits there. (The longer it sits, the more money they stand to make.)

Nearly $400 million of aluminum was requested for withdrawal this week from warehouses in South Korea and Malaysia, according to LME data, driving live inventories in the warehouse system close to a record low. Trafigura and Glencore have both been behind orders for withdrawal of aluminum this week, according to people familiar with the matter.


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