Weekly Metals News Digest – July 1-August 2
Alliance Nickel's Faith in the Future of Nickel
Ambitious Plans for NiWest Project
Alliance Nickel, an Australian mining company, has ambitious plans to begin mining and processing nickel-cobalt ores from its NiWest project in 2027. The company aims to produce 90,000 tonnes of nickel and 7,000 tonnes of cobalt annually. The NiWest project, located in Western Australia, is currently undergoing a feasibility study, expected to be completed by the end of 2024. The project has already received major project status, marking it as a significant endeavor in the critical minerals sector.
Industry Challenges and Synchronization with BHP Nickel West
The timing of Alliance Nickel’s production launch is synchronized with the anticipated restart of BHP Nickel West, a vertically integrated complex that will suspend operations in October 2023 due to plummeting world nickel prices and oversupply caused by increased exports from Indonesia. The Indonesian supply surge has impacted five Australian nickel producers, underscoring the challenges facing the industry.
Despite these challenges, Alliance Nickel remains optimistic about the long-term demand for premium nickel, driven by the electric vehicle and energy storage markets. The company is confident that nickel prices will recover, especially as supply chains prioritize Inflation Reduction Act-compliant metals to capitalize on U.S. subsidies. This focus on sustainable and ethically sourced metals aligns with the growing demand for ESG-focused production methods.
Market Dynamics and Future Outlook
Alliance Nickel anticipates a persistent low price environment for cobalt but expects an increase in market demand by 2030. The company believes the underlying fundamentals for robust growth in nickel demand remain intact, with increasing volumes of premium class-one nickel metal sourced from ESG-focused producers expected to rise.
The company has also secured a $4 million loan facility from its major shareholder, Zeta Resources, to complete the definitive feasibility study (DFS) and conduct final metallurgical test work. The project is under review by the Environmental Protection Authority of Western Australia and will undergo necessary procedures with federal and regional authorities.
Controversy Surrounding Rio Tinto's Lithium Project in Serbia
Mass Protests and Environmental Concerns
Rio Tinto's proposed $2.4 billion investment in the Jadar lithium deposit in Serbia has sparked mass protests in several Serbian cities. Thousands of residents have marched in opposition to the project, chanting "Rio Tinto go away," due to environmental concerns and potential social impacts. The Jadar project, discovered by Rio Tinto in 2004, aims to produce 58,000 tonnes of battery-grade lithium carbonate annually, along with boric acid and sodium sulfate.
Legal and Political Challenges
The development of the Jadar mine was halted in 2021 after Serbian authorities refused to grant land access due to environmental concerns. In July 2023, a court ruled the government’s decision unlawful, reviving hopes for the project. However, ongoing protests threaten to deepen political divisions within Serbia, making the project's future uncertain. Even if obstacles are overcome, Rio Tinto is unlikely to launch the mining and metallurgical complex before 2028.
Russian Aluminum Accumulation in LME Warehouses
Impact of UK Government Ban
Stocks of Russian aluminum in London Metal Exchange (LME) warehouses increased by 33% in the first half of 2024, exceeding 695,000 tonnes. This surge is attributed to panic among traders following the UK government's ban on accepting Russian aluminum, introduced in April 2024. In response, traders stockpiled aluminum in LME warehouses, particularly in Malaysia, due to the ambiguity of the UK’s decision.
Price Fluctuations and Market Consequences
The UK government's ban led to a spike in aluminum prices on the LME, reaching $2,610 per tonne in May. However, the weakening demand for aluminum in China has since caused global prices to decline. Traders holding stocks of aluminum purchased at higher prices are now facing losses, as they struggle to sell at current market rates.
Korea Zinc's Diversification Strategy
Expanding Product Lines
Korea Zinc, one of the world's largest zinc producers, is implementing a long-term diversification strategy to produce new types of products. By 2033, the company aims to produce up to 60,000 tonnes of copper foil, 80,000 tonnes of precursors, and 90,000 tonnes of nickel sulfate annually.
Strategic Acquisitions and Partnerships
As part of this strategy, Korea Zinc acquired American trader Kataman Metals for $55 million in April 2024. Kataman Metals specializes in non-ferrous metal scrap and sells up to 300,000 tonnes of copper and aluminum scrap annually, generating $1.5 billion in revenue. Korea Zinc also acquired Igneo Technologies, an American firm that processes electronic scrap and has developed proprietary technology to extract precious and non-ferrous metals. Additionally, Korea Zinc is collaborating with Trafigura to build a nickel plant in South Korea.
Founded in 1974, Korea Zinc currently produces over 1 million tonnes of zinc per year. The company's diversification efforts aim to position it as a leading producer of advanced metal products for the evolving global market.
GreenX Metals' Copper Mining Ambitions in Germany
Reviving Copper Mining at Tannenberg
GreenX Metals, an Australian company, plans to revive copper mining in Germany through its acquisition of a 90% stake in Group 11 Exploration, which owns the Tannenberg project in central Germany. The Tannenberg project spans 272 square kilometers and includes the historic Richelsdorf mines, which ceased operations in the 1950s after producing 416,500 tonnes of copper and 33.7 million troy ounces of silver.
Geological Potential and Exploration Plans
The Richelsdorf mines are located in cuprous shale, a sedimentary rock rich in copper reserves. GreenX Metals plans to conduct extensive exploration at Tannenberg, targeting high-grade copper deposits at shallow depths of 50 to 500 meters. This initiative aims to tap into Germany’s historical mining heritage and leverage modern techniques to unlock new resources.
Broader Efforts to Strengthen Commodity Independence
Germany is one of Europe's largest copper producers, with an annual output of about 1 million tonnes. However, its production relies heavily on scrap and imported concentrates. If successful, the Tannenberg project could bolster Germany's raw material supply and reduce dependence on imports.
GreenX Metals is not alone in its ambitions; British corporation Anglo American is pursuing similar projects in Germany, including Löwenstern and Leine-Kupfer. These projects reflect a broader trend towards strengthening domestic resource independence in Europe.
Germany's Strategic Moves in Lithium and Critical Raw Materials
Attracting Global Interest
Germany's lithium reserves have attracted significant attention from international companies. Australian firm Vulcan Energy plans to extract lithium from underground hot brines and supply it to European battery and electric vehicle manufacturers. Vulcan Energy has already secured lithium hydroxide supply contracts with major automakers such as Volkswagen, Stellantis, and Renault.
Building a Sustainable Lithium Supply Chain
Vulcan Energy aims to construct a plant by the end of 2026 capable of producing 24,000 tonnes of lithium hydroxide annually, enough to support the production of 500,000 electric cars per year. This initiative aligns with Germany's goals to strengthen its position in the global electric vehicle market and reduce reliance on imported raw materials.
European Commission's Support for Critical Raw Materials
The European Commission's Critical Raw Materials Act, adopted in 2023, provides support for copper and lithium mining projects, offering benefits and preferences under EU legislation. These initiatives aim to secure a stable supply of critical materials for European industries, enhancing the region's economic resilience and sustainability.
Overall, these developments reflect the dynamic nature of the global metals industry as companies navigate challenges and opportunities in pursuit of sustainable growth and technological innovation. The ongoing projects and strategic shifts highlight the critical role of metals in shaping the future of energy, transportation, and industrial production worldwide.
