Weekly Metals News Digest, November 20-26
Rio Tinto expands its foray into lithium through a partnership with Charger Metals on the Johnston Lake project, while Emirates Global Aluminium ventures into aluminum recycling, constructing a facility to produce secondary aluminum. Indian conglomerate Vedanta Resources announces its plans to build a copper rod production facility in Saudi Arabia, marking its first venture outside India. Russian aluminum giant Rusal may benefit from proposed reductions in alumina import duties by the Russian government. Meanwhile, U.S. President Joe Biden considers increasing taxes on mining, a move that could significantly impact the industry.
Rio Tinto Expands into Lithium with Charger Metals
Australian junior company Charger Metals has struck a favorable deal with the international mining and metals giant Rio Tinto for its participation in the Johnston Lake lithium project. Under the agreement, Rio Tinto will invest $1.7 million to finance the project, particularly for exploration work. This investment may increase to $40 million in the future, which would grant Rio Tinto a 75% stake in the project. The Johnston Lake project is located in an ancient greenstone belt, known for its abundant spodumene pegmatites, a primary source of lithium. Given the prevalence of spodumene in the area, the project shows high potential for discovering a significant lithium deposit. Rio Tinto's recent interest in lithium, a metal not previously prioritized by the company, is evident from its involvement in the Rincon project in Argentina and a partnership with Aterian in Rwanda.
Emirates Global Aluminium Ventures into Recycling
Emirates Global Aluminium has commenced the construction of a facility for recycling scrap and waste aluminum. With a planned capacity of 170 thousand tons of secondary aluminum annually, the facility will process materials like broken window frames and empty beverage cans. The plant, operating under the RevivAL brand, will take three years to build and is part of Emirates Global Aluminium's initiative to produce low-carbon aluminum, which includes the solar-electrolyzed CelestiAL brand. Emirates Global Aluminium, the largest primary aluminum producer in the Middle East and the world's fifth-largest by volume, anticipates that global demand for secondary aluminum will reach 57 million tons by 2040, up from 27 million tons in 2022.
Vedanta Resources to Launch Copper Facility in Saudi Arabia
Vedanta Resources, a major player in India's non-ferrous metals industry, plans to build a copper rod production facility in Saudi Arabia. This facility, set to produce 100 thousand tons of copper wire rod annually, will supply cable companies in the Middle East and beyond. This marks Vedanta Resources' first venture outside India, aligning with the Saudi government's economic diversification efforts. However, sourcing copper for the plant poses a challenge, as Saudi Arabia does not produce the metal domestically.
Rusal May Benefit from Reduced Alumina Import Duty
The Russian Ministry of Industry and Trade is considering optimizing customs duty rates on critical raw materials for metal production, including bauxite, which is currently taxed at 5% of its value. Any reduction in these duties would benefit Rusal, which plans to build a new 4.8 million ton capacity plant in the Leningrad region, along with a deep-water port. The total investment for the project is estimated at $4.5 billion. Rusal produced 12.3 million tons of bauxite in 2022, with 47% sourced from Russia and the remainder from Guinea. The company also relies on imports for 49% of its alumina needs.
US President Joe Biden to Increase Mining Taxes
President Joe Biden is considering raising taxes on mining activities. The interagency working group's report suggests imposing not only standard mineral extraction taxes but also a separate tax on dirt and waste from mining processes. Critics argue that such a tax could render many mining operations unprofitable, increasing the U.S. industry's dependence on foreign suppliers. This discussion comes at a time when world prices for non-ferrous metals are low, and increased taxation could further diminish domestic production of metals like copper and nickel.
Forecast: Lithium Market Dynamics Remain Unchanged Despite Price Fluctuations
The involvement of Rio Tinto in Charger Metals' Johnston Lake lithium project reflects the ongoing race for lithium, despite recent price drops. Lithium hydroxide futures have fallen from $83.8 thousand per ton in January to $19.950 thousand in November. The race for lithium includes diverse companies like ExxonMobil, which plans to extract lithium from hydrocarbon field formation waters in Arkansas by 2027. Tesla is also exploring lithium mining in Africa. The current structure of lithium deposits, predominantly salt marshes and pegmatite deposits, is expected to remain consistent over the next few years.
