Weekly Metals News Digest – April 8-12
Environmental Concerns in Nickel Production
Advocacy for Enhanced Environmental Regulations in China
Andrew Forrest, chairman of Australia's Fortescue Metals Group, has called upon Chinese authorities to enforce stricter environmental standards within their global nickel supply chain. He emphasized the severe ecological damage caused by the mining and processing of nickel ores in China and expressed particular concern about the sourcing practices of electric vehicle manufacturers, especially regarding nickel imports from Indonesia. This metal is essential for producing batteries for electric vehicles, underscoring the importance of sustainable sourcing practices.
Developments in Lithium Extraction
Vulcan Energy Initiates Lithium Chloride Extraction in Germany
Australia's Vulcan Energy has commenced the extraction of lithium chloride from its new plant in Germany, taking a significant step toward the production of battery-grade lithium hydroxide. This project is pivotal as it represents the only operation of its scale in Germany and the entire European Union that aligns with the EU's strategic goals of self-sufficiency in critical metals like lithium and cobalt. Vulcan Energy has secured contracts to supply lithium hydroxide to leading European automotive manufacturers, including Volkswagen, Stellantis, and Renault. The company's ambitious goal is to establish a production capacity of 24,000 tonnes of lithium hydroxide per year by the end of 2026, which would be sufficient to support the annual production needs of 500,000 electric vehicles.
Emerging Threat of a Copper Shortage Due to AI Expansion
Trafigura's Forecast on Copper Demand
Saad Rahim, the chief economist at Trafigura, an international trader, has warned of a potential increase in copper demand by 1 million tonnes by 2030 due to the proliferation of artificial intelligence technologies. Copper is crucial for manufacturing various components essential for AI operations, such as power cables, electrical products, heat exchangers, and coolers in data centers. A typical 1MW data center in North America requires between 20-40 tonnes of copper, leading to significant industry demand. This surge is expected to contribute to a global shortage of copper, potentially exacerbating to a deficit of 4-5 million tonnes by 2030, including the additional million tonnes from AI-related consumption.
Expansion Plans for Alumina and Aluminium Production
Vinacomin's Increased Production Capacity in Vietnam
Vietnam's state-owned entity Vinacomin is poised to significantly bolster its alumina and aluminium production capabilities. As part of its comprehensive investment program, the production at the Nhan Co plant is expected to triple from 650,000 tonnes to 2 million tonnes of alumina annually. Similarly, the Dak Nong plant will also see a threefold increase in its capacity, eventually aiming to produce 2 million tonnes of alumina and 1 million tonnes of aluminium each year. These expansions are strategically supported by new bauxite mining initiatives in the Central Highlands of Dak Nong province, which houses a significant portion of Vietnam's bauxite reserves. The total investment for these ambitious expansions is projected at $7.3 billion.
Intensifying Competition for Ghana's Akyem Gold Mine
Asante Gold's Participation in Akyem Bidding
The Canadian mining company Asante Gold has announced its intention to join the bidding process for the Akyem mine in Ghana, currently held by Newmont, one of the largest gold producers globally. This mine, valued at $2 billion, is part of Newmont's asset divestiture strategy following financial challenges stemming from its acquisition of Newcrest Mining, which led to a loss of $2.5 billion in 2023. The bidding has also attracted interest from other prominent mining companies, including Shandong Gold Mining, Chifeng Jilong Gold Mining, Perseus Mining, and Zijin Mining Group. Asante Gold, although not a major player globally, has extensive experience and a strong presence in Ghana, providing it with a strategic advantage in understanding local mining operations.
European Union's Lithium Independence Initiative
Vulcan Energy's Strategic Role in EU Lithium Supply
The European Union's ongoing efforts to secure independence from external lithium sources are evidenced by Vulcan Energy's recent advancements in lithium extraction and supply. The EU is focused on enhancing its self-sufficiency in critical raw materials, as emphasized by periodic updates to the critical raw materials list and proposed legislation by Ursula von der Leyen, President of the European Commission. The EU supports a variety of lithium extraction and processing projects, which can broadly be classified into two categories: those extracting lithium from underground hot water and those mining it from ore minerals like spodumene. Significant investments are expected to boost these initiatives in the coming years, with the EU aiming to strengthen its position in the global market for critical raw materials.
