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Australia/New Caledonia/Papua New Guinea Mining

Nickel Relives The Failed Attempt By The Hunt Brothers To Corner Silver – by Tim Treadgold (Forbes Magazine – October 20, 2019)

https://www.forbes.com/

Attempts to “corner” a metal market invariably end in tears, if not jail time, which is what happened with silver in 1980 and copper in 1995, so when the market in nickel “inverted” last week warnings were issued that an old game was being played in one of the new generation of battery metals.

The term inverted essentially means that the short-term price of a product, whether a metal or a government bond, rises above the long-term price, which is unnatural and a sign of trouble ahead. An inverted bond yield can be interpreted as a recession pointer.

Three Brothers And A Silver Plan

Silver had its crisis when three brothers who were heirs to the Hunt Oil fortune acquired, or attempted to acquire, one-third of the global supply of the metal.

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China starts new $10b Oakajee iron ore push – by Peter Ker (Australian Financial Review – October 21, 2019)

https://www.afr.com/

A Chinese state-owned entity will seek to revive a $9.7 billion mining rail and port project in Western Australia, in a move that could unlock the nation’s next iron ore export province.

Sinosteel has acquired Japanese giant Mitsubishi’s interests in the long-stalled Oakajee Port and Rail project, in a deal that comes in the strongest year for iron ore prices since 2014.

The acquisition effectively resolves a dispute over port tariffs that was the major wrecker of attempts to develop Oakajee during the heady peaks of the iron ore boom in 2011, and when combined with Sinosteel’s existing assets nearby, make the Chinese company the dominant force in the mid-west region of WA.

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Adani awards QLD business $100m rail construction contract (Australian Mining – October 21, 2019)

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Adani has handed out a $100 million rail contract to Australian-operated Martinus Rail, which will deliver the work out of Rockhampton, Queensland.

This is the latest in the more than $450 million worth of contracts awarded for the Carmichael coal and rail project. A majority of these have been given to regional Queensland areas.

Martinus Rail will be based in Rockhampton, where Adani has also opened a business centre. Martinus Rail managing director Treaven Martinus said the company was keen to ensure regional communities saw the benefits of the significant contract.

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U.S. edges China out of race to fund Bougainville independence vote – by Jonathan Barrett (Reuters U.S. – October 16, 2019)

https://www.reuters.com/

SYDNEY (Reuters) – The United States and its Pacific allies have plugged a funding gap that endangered next month’s independence referendum in the Papua New Guinea (PNG) region of Bougainville, a strategic move that also sidelined China, two sources told Reuters.

Western nations are looking to rein in China’s influence in the increasingly contested Pacific, where it has recently drawn away two of Taiwan’s allies, Kiribati and the Solomon Islands, triggering a strong rebuke from the United States.

The vote in PNG’s autonomous region of Bougainville, formerly the site of a bloody civil conflict, will run from Nov. 23 to Dec. 7, and could trigger separation negotiations to create a new nation in the strategic waters of the Pacific.

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Lithium at Two-Year Low Hobbles U.S. Bid to Loosen China’s Grip on Market – by Laura Millan Lombrana (Bloomberg News – October 10, 2019)

https://www.bloomberg.com/

The lowest lithium prices in over two years are hampering a handful of miners that want to challenge China’s dominance in the market.

China controls most of the processing that makes the mineral usable in rechargeable batteries, leaving American vehicle makers vulnerable to supply disruptions if trade tensions escalate. With automakers from Tesla Inc. to General Motors Co. aiming to manufacture more electric cars at home, small companies are seeking to build the first U.S. lithium mines in decades as a step toward forming a local supply chain.

However, financing mines is proving a challenge after a rush of Australian supply dragged down prices by a third from a record in mid-2018. Companies also face stricter environmental rules and regulatory hurdles in the U.S., which currently accounts for just 1.2% of global lithium production.

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EXPLAINER-How do miners dispose of their waste in the sea? – by Melainie Burton (Reuters U.S. – October 11, 2019)

https://www.reuters.com/

MELBOURNE, Oct 11 (Reuters) – Sea disposal of mining waste could spread as Indonesia weighs adopting the technique for new nickel projects, as Papua New Guinea is doing for a gold mine proposed by Australia’s Newcrest Mining.

The management of mining waste has drawn attention since two dam disasters in Brazil, and after red mud spilled into Papua New Guinea’s Basamuk Bay from Ramu Nickel’s operations in August.

An expert in chemical contamination has called test results from the Ramu Nickel spill “alarming,” media said this week. That spill resulted from an operational failure, however, rather than an issue with tailings management.

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China And The U.S. Fight Over Australian Rare Earths – by Tim Treadgold (Forbes Magazine – October 9, 2019)

https://www.forbes.com/

The U.S. hunt for future supplies of rare earths and other critical minerals has led Commerce Secretary Wilbur Ross to Australia this week where he might not get the reception he was expecting.

China is not only well entrenched in the Australian mining industry but an academic paper released to coincide with Ross’s visit suggest that China could be a more reliable source of project development capital for new mining projects.

Published by the United States Studies Center at the University of Sydney the paper’s theme was whether there was scope for government intervention in rare earths, an industry dominated by China but important to many countries because rare earth elements have unique properties.

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[Copper Mining] THE BOUGAINVILLE REFERENDUM AND BEYOND – by Ben Bohane (Lowyu Institute – October 8, 2019)

http://www.lowyinterpreter.org/

EXECUTIVE SUMMARY

Australia has a long history and a complicated relationship with Bougainville, an island group to the east of the PNG mainland that was administered by Australia as part of Papua New Guinea for 60 years between 1915 and 1975.

On 23 November 2019, its 300 000 people will commence voting in an independence referendum, and a clear majority is expected to vote for independence from Papua New Guinea. The Bougainville Peace Agreement requires PNG and Bougainville to negotiate an outcome after the conclusion of the referendum, and Canberra has indicated that it will respect any settlement reached between them. James Marape, the new PNG prime minister, has expressed a clear preference for an autonomous, not independent, Bougainville.

With geostrategic rivalry growing across the Pacific, Australia will need to step up its engagement and consider further policy approaches to Bougainville if it wishes to remain a trusted peace and security broker in Melanesia. If the people of Bougainville vote for independence and are unable to reach agreement with the government of Papua New Guinea, the Bougainville issue may precipitate another regional crisis.

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Fortescue confirms bid for vast Simandou iron ore deposit – by Cecilia Jamasmie (Mining.com – October 7, 2019)

https://www.mining.com/

Australia’s Fortescue Metals Group (ASX:FMG) has confirmed its interest in a slice of the giant Simandou iron ore deposit, handed back this year to the Guinean government by billionaire Beny Steinmetz’s BSG Resources.

The committee in charge of an international tender for the project’s blocks 1 and 2, launched in mid-July, should come to a final decision in November, sources close to the matter told Reuters.

Both the consortium of Société Miniere de Boke (SMB) and Singapore’s Winning, which is Guinea’s biggest bauxite exporter, have already acknowledged they submitted an offer. Brazil’s Vale (NYSE: VALE), the world’s largest producer of iron ore, is also said to have paid for documents needed to submit an offer, but decided not to do so.

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COLUMN-United States races to build critical minerals alliances – by Andy Home (Reuters U.S. – October 7, 2019)

https://www.reuters.com/

LONDON, Oct 7 (Reuters) – President Donald Trump’s offer to buy Greenland didn’t go down well with either the inhabitants of the world’s largest island or with Denmark, which administers it as an autonomous territory.

The Danish prime minister Mette Frederiksen described the idea as “absurd”, triggering a diplomatic fall-out as Trump decided to cancel a planned visit to Denmark.

The idea may be many things but, from a U.S. perspective, it is not “absurd”. There are two completely rational drivers for eyeing up Greenland – its strategic location for North Atlantic shipping and its untapped mineral reserves.

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Australia sees opportunity to boost critical minerals supply to U.S. – report (Reuters U.K. – September 30, 2019)

https://uk.reuters.com/

MELBOURNE, Oct 1 (Reuters) – Australia has a fresh opportunity to supply the United States with critical minerals after recent changes to U.S. regulation aimed at cutting its dependence on China, an Australian government report showed on Tuesday.

U.S. President Donald Trump in July signed five memoranda authorising U.S. Department of Defense funding to be directed to resources or technology “essential to the national defense” in a move aimed at shoring up domestic supplies.

That opens the door for the United States to offer project funding for rare earths, a group of 17 elements used in products ranging from lasers and military equipment to magnets found in consumer electronics, according to the report by Australia’s Trade and Investment Commission.

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RPT-COLUMN-Gold may keep Australia the “lucky country” if commodity exports stumble – by Clyde Russell (Reuters U.K. – September 30, 2019)

https://uk.reuters.com/

LAUNCESTON, Australia, Sept 30 (Reuters) – Is Australia the ultimate commodity hedge? When looking at the country’s natural resources the focus tends to be as its status as the world’s biggest exporter of iron ore and liquefied natural gas (LNG), and its competition with Indonesia as the top shipper of coal.

But this ignores that Australia is also the world’s second-largest gold producer after China, giving its export earnings from resources a hedge should growth commodities start to suffer as a result of a slowing global economy.

In effect, Australia is the also world’s largest gold exporter, given China is still a significant net gold importer. The importance of gold to Australia was underlined in the latest Resources and Energy Quarterly, released on Monday by the Department of Industry, Innovation and Science.

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Gold puts a silver lining on trade war’s commodity clouds – by Peter Ker (Australian Financial Review – September 30, 2019)

https://www.afr.com/

Resources minister Matt Canavan has urged financial institutions to invest in the Australian mining sector as trade tensions cloud the outlook for several of the nation’s most important commodities.

Although it still expects the value of Australian commodity exports to hit a record high of $282 billion in fiscal 2020, the Department of Industry has shaved its June export value forecast by 1.1 per cent following falling prices for iron ore, coal and liquefied natural gas over the past four months.

The department said a ”further modest slowdown” in the global economy was likely, as a range of geopolitical issues such as Brexit add to the trade tensions caused by US President Donald Trump’s trade war against China.

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Rio Tinto sees rosy future for diamonds despite end of Argyle – by Barbara Lewis (Reuters U.S. – September 26, 2019)

https://www.reuters.com/

LONDON (Reuters) – Rio Tinto (RIO.AX)(RIO.L) is exploring for diamonds in Canada as part of its plans to stay in the sector despite the looming closure of its Argyle mine in Australia, known for extremely rare pink diamonds, the firm’s head of copper and diamonds said.

Demand and prices for the wider market have fallen as concerns mount about the world economy, and laboratory-grown gems have added to supply. Colored or particularly large diamonds, however, have held value, especially pink diamonds, 90% of which are produced by Argyle. That mine, the world’s biggest in carat terms, is expected to cease production by the end of next year.

Arnaud Soirat, Rio’s chief executive for copper and diamonds, said pink diamonds had risen in price by 500% since 2000. He gave no figures for the overall market, but producers have reported lower overall demand and prices.

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REFILE-Papua New Guinea to review resource extraction laws next year (Reuters U.S. – September 25, 2019)

https://www.reuters.com/

TOKYO, Sept 26 (Reuters) – Papua New Guinea plans to begin working with foreign investors next year to review natural resource extraction laws that are more than 40 years old, the country’s petroleum minister said on Thursday at an industry confernce in Japan.

Most of the country’s resource extraction laws stem from before it won independence in 1975, and the government, which came to power in May, is looking to ensure the country benefits more from its huge petroleum and mineral resources.

Papua New Guinea is already in the process of revising its Mining Act, and next year will look to update its petroleum legislation to match regulations in other nations that produce liquefied natural gas (LNG).

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