Russia Relies Heavily on Alumina Imports from China
In the first nine months of 2024, Russia increased alumina imports from China by 43% to 1.2 million tonnes, with imports expanding 1.6 times to 123,100 tonnes in September. In monetary terms, alumina imports from January to September grew 1.7 times to $582.6 million, doubling to nearly $70 million in September alone.
This sharp increase in Chinese alumina imports is attributed to purchases by Rusal, Russia's only primary aluminium producer, which last October acquired a 30% stake in the Hebei Wenfeng New Materials alumina refinery. Rusal was forced to make this purchase due to challenges in securing raw materials from its assets outside Russia. Notably, it lost the Nikolaev alumina refinery in Ukraine, capable of producing 1.5-1.7 million tonnes of alumina per year, which was nationalized by the Ukrainian government in 2023. Additionally, in 2022, the Australian authorities imposed a ban on bauxite and alumina supplies to Russia, further impacting Rusal's operations.
The situation has made Rusal increasingly dependent on Chinese alumina to keep its production stable, and this dependency is not without risks. The fluctuating alumina prices and China's market dominance put pressure on Rusal's operational costs and profitability. Rusal has attempted to mitigate these challenges through diversification, such as by investing in the construction of a new alumina refinery in northwestern Russia. The planned refinery, which will have an annual capacity of 4.8 million tonnes, represents an ambitious project that includes the construction of a deep-water port to facilitate transportation. The cost of this project is expected to exceed $4 billion.
However, this new project will not be realized quickly, and until it becomes operational, Rusal will continue to rely heavily on alumina imports from China, which will continue to weigh on its profitability. The rising global alumina prices, exacerbated by a reduction in exports from Australia and disruptions in supplies from Guinea, further complicate the situation for Rusal. This reliance underscores the challenges faced by Russian aluminium producers as they navigate international trade restrictions and supply chain disruptions.
African Player Plans Lithium Plant in Germany
The African Bravura Group plans to build a lithium hydroxide production plant in Germany, a key component for manufacturing batteries used in electric vehicles and electronic devices such as smartphones and laptops. The company is currently evaluating various potential locations for the facility and negotiating with automakers and component manufacturers. The final decision on the site is expected next year, after which construction will commence, with operations tentatively scheduled to begin in 2027.
Bravura Group plans to supply the plant with spodumene concentrate sourced from its deposits in Africa, transported by its own fleet of dry bulk carriers. By ensuring a stable supply chain, Bravura aims to maintain independence from intermediaries and traders, giving it a competitive advantage in the European market. If successful, Bravura will be the first to supply lithium hydroxide directly to German consumers without intermediaries, enhancing cost-efficiency and supply reliability.
The company's approach differs from that of British Zinnwald Lithium, which plans to develop the Zinnwald deposit in Germany and produce 12,000 tonnes of lithium hydroxide annually. Bravura’s move signals an increased focus on vertically integrated supply chains, which can provide a more streamlined production process and improve supply stability.
Judging by Bravura Group's plans, we can expect that in the coming decade, companies from various regions will undertake similar projects to establish lithium production facilities within the European Union. This trend aligns with the EU's policy to ensure at least 40% of the lithium consumed within its borders is produced locally by 2030. Such developments are also a response to the increasing demand for lithium-ion batteries, driven by the rapid expansion of electric vehicle production and the growing focus on renewable energy storage solutions.
The EU's focus on boosting local lithium production is not just about meeting growing demand but also about reducing dependence on imported materials, particularly from politically sensitive regions. By fostering domestic lithium production capabilities, the EU aims to bolster its supply chain security, enhance resilience against potential trade disruptions, and create new economic opportunities within the bloc.
Alcoa Predicts Shift from Copper to Aluminium
According to William Oplinger, CEO of U.S.-based Alcoa Corporation, the global shift towards renewable energy is driving an increase in copper consumption. He predicts that as copper demand outpaces supply, aluminium will gradually replace copper in some industries. Overall, current global market trends support an increase in aluminium orders by 3-5% annually.
While there may indeed be a long-term copper shortage due to the rise of electric vehicles, solar and wind power plants, and grid infrastructure, as well as limited capacity to increase copper supply, aluminium may not be a feasible alternative for all applications. Copper has superior physical properties, including higher ductility and electrical conductivity, making it the preferred choice in many uses. For instance, using aluminium windings in electric car motors significantly increases their size compared to copper windings. Additionally, aluminium is less resistant to moisture and more challenging to weld than copper.
In addition to these limitations, aluminium substitution could also have implications for the efficiency and performance of key applications. In power transmission, for example, copper’s superior electrical conductivity means less energy loss compared to aluminium, making it the material of choice for most electrical wiring. Despite aluminium being cheaper and lighter, its physical limitations may prevent widespread replacement in critical components.
Thus, aluminium is unlikely to replace copper in electric motors and other high-performance applications on a large scale. Instead, its use will likely be limited to manufacturing electric car wheels, body parts, and less critical components where cost and weight are prioritized over performance. However, as the renewable energy sector continues to grow, the demand for both metals is expected to remain robust, driven by their roles in supporting green technologies.
AngloGold Ashanti to Create a New Leader in the Gold Market
Shareholders of the American corporation AngloGold Ashanti and British Centamin have approved their merger, which is expected to be completed by the end of November 2024. The merger will be executed through a share exchange, resulting in AngloGold Ashanti shareholders owning 83.6% of the combined company and Centamin shareholders owning 16.4%.
AngloGold Ashanti, formed in 1998 after the spin-off of gold mining assets from Anglo American and its subsequent merger with Ashanti Goldfields in 2004, operates mines and exploration projects in Ghana, Guinea, Tanzania, Argentina, Brazil, Colombia, the U.S., Australia, and other countries. In 2023, the company produced over 2.5 million troy ounces of gold, primarily from the Geita, Kibali, Tropicana, Iduapriem, AngloGold Ashanti Mineração, and Sunrise Dam mines. In March 2024, AngloGold Ashanti also discovered a new gold deposit in Nevada, U.S., with an inferred resource of 9.1 million troy ounces.
The merger is expected to bring significant synergies, including operational cost savings and increased production efficiency. By combining their resources and expertise, AngloGold Ashanti and Centamin aim to enhance their global competitiveness and secure a stronger foothold in key mining regions. If the merger with Centamin proceeds smoothly, AngloGold Ashanti could become the world's fourth-largest gold producer, behind Barrick Gold, Newmont Mining, and Agnico Eagle.
In addition to the production synergies, the combined entity will benefit from a more diversified portfolio of mining assets, which will reduce risks associated with individual projects or regional instability. The discovery of the new deposit in Nevada is also expected to play a key role in the growth strategy of the combined company, further bolstering its production capabilities and strengthening its market position.
Impala Platinum Reduces Production in Q3
In Q3 2024, South Africa's Impala Platinum reduced its production of platinum and platinum group metals by 5.5% year-on-year to 947,000 troy ounces. Production from its wholly owned operations decreased by 6% to 751,000 troy ounces, while output from joint ventures increased by 3% to 145,000 troy ounces. Sales of platinum and related metals, however, declined by 4% to 792,000 troy ounces.
Factors affecting Impala Platinum's production and sales included the launch of a new furnace at Zimplats, the company's Zimbabwean asset, and changes in capacity utilization at specific operations. Notably, operations at Impala Rustenburg in South Africa improved significantly, despite disruptions caused by a forced shutdown in November 2023 following a fatal incident involving two miners.
Conversely, there was a decline in ore processing volumes, and the amount of platinum and related metals in concentrate dropped by 22% to 58,000 troy ounces. This decrease was primarily due to operational challenges, including lower ore grades and maintenance activities that temporarily reduced processing capacity.
Nevertheless, Impala Platinum may be able to increase metal output by the end of the year, supported by ongoing demand from the automotive, electronics, and jewelry industries, as well as the recent recovery in platinum and palladium prices since September. The automotive sector, in particular, continues to drive demand for platinum group metals due to their use in catalytic converters, which help reduce vehicle emissions.
In addition, Impala Platinum is exploring opportunities to optimize production at its existing facilities and invest in new technologies to improve operational efficiency. These efforts are part of the company’s broader strategy to enhance profitability and maintain its position as a leading producer of platinum group metals in the global market.
