Weekly Metals News Digest (Sept 25-30)

Check out a recap of the most important mining news from the past week:

Gates and Bezos will be searching for copper in Zambia

Zambia is among the world’s largest suppliers of copper ore, with approximately 1 million tons of ore (in terms of refined copper) being extracted from its mines out of the 22 million tons mined globally each year.

There have been occasional opinions suggesting that Zambia’s copper reserves may soon deplete due to a recent decline in its production. However, the American company KoBold Metals, which counts billionaires Bill Gates and Jeff Bezos among its shareholders, has allocated $150 million for the exploration of new copper (and cobalt) deposits as part of the Mingomba project, located within the famous copper belt of Africa (stretching across the territories of Zambia and Congo).

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Palladium Prices Predicted to Decline

Global palladium prices may remain relatively weak in the coming months due to a reduction in stockpiles in China and the active shift of automotive companies worldwide towards using platinum for catalytic converters (platinum is considered a substitute for palladium as it is cheaper, although its catalytic properties are lower).

According to analysts at UBS bank, palladium futures are currently trading on the NYMEX at $1252 per troy ounce, with the possibility of them decreasing to $1200 per troy ounce by September 2024.

It’s worth noting that UBS’s expectations may not materialize, as they do not account for power supply issues in South Africa, which periodically lead to the shutdown of local palladium mining operations. It is also possible that by the end of 2023, global palladium supply may turn out to be significantly lower than previously anticipated.

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Regenx Tech Launches Its Innovative Plant

American company Regenx Tech has launched the first module at its Greenville plant, commencing the production of platinum and palladium from used automotive catalytic converters. Currently, it is being loaded to its designed capacity.

Traditionally, automotive catalytic converters are processed by melting them under high-temperature conditions created in furnaces, accompanied by emissions of a wide range of harmful substances. Regenx Tech has proposed an alternative technology that involves the recovery of metals and is therefore more environmentally friendly.

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China Raises Concerns Among Metal Market Participants

The economic situation in China, the world’s largest consumer of base and precious metals, is causing deep concern among all participants in the global metals market, as it shows excessively slow recovery rates following pandemic-related restrictions.

Hedge funds and banks, in particular, are exhibiting pessimism, predicting further declines in global prices for aluminum and copper. For example, Societe Generale bank expects copper to depreciate by 14% to $7,000 per ton by January of the next year, amid rising inventories on the London Metal Exchange, which have reached record levels.

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VSMPO-AVISMA Faces American Sanctions

The U.S. Department of Commerce has added the Russian corporation VSMPO-AVISMA to its sanctions list under export control regulations. VSMPO-AVISMA is engaged in the production of products for Russia’s defense industry, and it is associated with a ‘critical risk of diverting American defense technology,’ according to the U.S. Department of Commerce document.

As indicated in the document, VSMPO-AVISMA has been placed on the so-called Entity List, implying strict export control measures towards them. Licenses for the export, re-export, and transfer of goods subject to U.S. export regulations (broadly defined as dual-use goods) to companies listed on the Entity List will be reviewed with a ‘presumption of denial,’ effectively imposing an embargo on the supply of dual-use goods to these organizations.

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