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Why battery raw material prices slumped under pressure in the first half of 2023
Originally posted on source.benchmarkminerals.com
Prices of critical battery materials such as lithium, cobalt, nickel and graphite, were under pressure in the first six months of this year as a slowdown in China hit downstream demand and new supplies continued to enter the market.
Critical battery material prices declined between 20% and 40% in the first half of 2023 at a time when cathode and anode makers continued to destock existing inventories or remained cautious with new orders and producers continued to pile up supplies amid an uncertain demand scenario.
“Following a year of bumper cell production in China in 2022, the first half of 2023 saw a notable softening for battery raw materials in China, with these markets slowing down for the first time in nearly two years as downstream players took a breath in regards to feedstock purchasing whilst working through stockpiled cell inventories,” said Daisy Jennings-Gray, analyst at Benchmark.
Demand for electric vehicles in China took a hit at the start of the year following the discontinuation of a decade old New Energy Vehicle subsidy and the incoming Spring Festival. Electric vehicle sales remained weak but picked up pace in February after a Tesla-induced price war that spurred local rivals to offer steep discounts as well. In late June China extended the sales tax break for electric vehicles until 2027.
The battery material price declines also came at a time as the US and Europe moved ahead with ambitious plans to build their own critical minerals supply chains to responsibly source battery materials and challenge China’s mid and downstream dominance by the end of the decade.
According to Benchmark data, this year China alone is forecast to refine 62.5% of the world’s lithium supplies in 2023, 76% of cobalt, mine 65% of the world’s natural graphite and produce 72.5% of synthetic graphite.
Lithium starts 2023 on the back foot
Battery grade lithium carbonate and lithium hydroxide prices in China had already fallen 64% and 56% respectively in the first four months of the year, slowing down the two-year rally for the critical battery material.
Prices however recovered some ground in early May as cathode and cell makers accelerated orders despite only a moderate recovery in downstream demand. Still lithium carbonate and lithium hydroxide prices were down 40% and 42.2% overall in the first six months of 2023 data from Benchmark’s Lithium Price Assessment shows.
Cell makers started the year with high inventories spurring cathode makers to destock and make limited chemical purchases leading to an inventory build up with lithium producers and a fall in prices. Lithium traders also held back from engaging in market activity, as they waited to see if prices move lower.
Cobalt bear run continues
Cobalt sulphate and cobalt hydroxide prices fell 21.2% and 30.3% in the first six months of 2023. Cobalt metal prices have declined 51% since peaking in April last year.
In February the industry had speculated that cobalt metal prices had neared the floor but limited demand from the electric vehicle and the consumer electronics sector stoked negative sentiments and drove prices further down.
One of the most significant cobalt developments in the first six months of the year was when China Molybdenum’s Tenke Fungurume copper and cobalt mine in the DRC began exports of material in May after a 10-month ban. The move pushed prices further down. CMOC had piled up an estimated 16,000 tonnes of cobalt hydroxide during the ban which could now enter the market for sale.
Chinese graphite market meets muted downstream demand
Domestic Chinese -100 mesh 94-95% C flake graphite prices fell 20.8% and those of pre-calcined pet needle coke, the key feedstock for synthetic graphite fell 29% in the first half of the year as new capacity continued to come online despite lacklustre demand from the electric vehicle sector.
On the flake graphite front, supply from Heilongjiang Province in China has remained relatively robust from April onwards. Graphite operations are seasonally suspended from Heilongjiang Province from September to April or May. Prices usually fall in summer when more supply comes in and this year they have fallen even more because of weak demand from the electric vehicle industry.
Heilongjiang is expected to produce 60% of global -100 mesh flake graphite, the grade typically used for battery applications, this year, according to Benchmark’s Natural Graphite Forecast.
The fall in graphite prices puts increasing pressure on graphite miners, and comes as anode manufacturers report plentiful raw material inventories, especially in China.
For synthetic graphite, supply of pet coke and pet needle coke remained robust with new capacity continuing to come online and despite less efficient producers halting production.
Synthetic graphite anode producers were also being more lenient with the feedstock they could use – putting downward pressure on low sulphur coke prices.
China continues to lead global coke production, and by 2030 the country is projected to account for a near 75% share of global supply of coke, according to Benchmark Synthetic Graphite Forecast.
Nickel rally loses steam in first half
Nickel sulphate prices retreated by 20% in the first half of 2023 due to muted demand from the electric vehicle sector and the weak NCM demand recovery. Prices did rise in February when producers rushed to buy additional material given the sizable arbitrage between the Chinese and the international prices. Prices also rose slightly in June amid firming downstream demand.
Nickel sulphate prices have been on a generally bearish trajectory since October 2022. In April Chinese nickel sulphate prices reached their lowest levels since June 2021 only to recover moderately.
For the most of the first half in 2023, nickel demand remained constrained as existing inventories were prioritised over sourcing new feedstock.
2022 marked a record year for capacity additions and expansions with refined nickel production increasing by 18% year-on-year to 3.2 million tonnes. This is set to grow by a further 6% in 2023, to 3.4 million tonnes, largely driven by a 50% increase in Indonesia’s nickel output, according to Benchmark Nickel Forecast.
Indonesia is emerging as a key nickel producer and Benchmark forecasts that Indonesian nickel production for the battery industry will grow by over 600% this decade, thanks to significant Chinese investment in processing plants.
G-7 to expand cooperation on critical minerals security, supply chains
Originally posted on Spglobal.com
G-7 ministers agreed April 16 to a joint plan for critical minerals security, stressing the growing importance of the materials to the clean energy transition and the need to prevent economic and security risks caused by vulnerable supply chains.
The energy and environment ministers for Canada, France, Germany, Italy, Japan, the UK, the US and the EU pledged to boost diversification of suppliers while upholding strong environmental, social and governance standards.
"We are committed to supporting open, transparent, rules- and market-based trade in critical minerals with traceability, opposing market-distorting measures and monopolistic policies on critical minerals, and promoting dialogues between extraction, producer and consumer countries," the ministers said in a final communique after two days of wide-ranging talks in Sapporo, Japan.
Critical minerals have become a larger focus of G-7 energy ministers in recent years as part of their efforts to reach net-zero economies by 2050. Demand is expected to soar for lithium, nickel, cobalt and other metals needed for batteries and electrification technologies, but supply chains to bring the commodities to market face numerous challenges.
"We should not end up in a situation where we're too dependent on one single supplier," European Commissioner for Energy Kadri Simson told S&P Global Commodity Insights in an April 15 interview in Sapporo. "That means that we need a network, a wider partnership of trusted partners."
Andrew Light, US assistant secretary of energy for international
affairs, testifies to the US Senate on energy security Feb. 16.
Light said the US is working to build critical mineral alliances.
Source: Kevin Dietsch/Getty Images North America via Getty Images
Expanding supply diversity
The impacts of the war in Ukraine on oil and gas markets are an urgent reminder for the G-7 to address the geopolitical risks of critical minerals supply chains, Andrew Light, US assistant secretary of energy for international affairs, told S&P Global Commodity Insights in an April 16 interview.
"We're doing everything we possibly can to diversify the entire critical mineral materials and supply chains for renewable energy," said Light.
The US aims to accelerate cooperation on critical minerals with the G-7, the Association of Southeast Asian Nations, or ASEAN, and Latin American countries that hold major mineral resources and potential for refining and manufacturing capacity, according to Light.
"This is not at all a situation where China is so far ahead that we can't pull back a lot of that market if we work together," Light said. "That's the key. The United States can't do it alone, we've got to work with other countries."
Even mineral-rich Canada has an imperative to ensure that G-7 countries have access to critical minerals, Jonathan Wilkinson, Canada's natural resources minister, said in an April 16 interview.
"Canada is not going to build every battery, it's not going to build every electric car," Wilkinson said. "But we need to ensure that Germany and Japan and France and the United States have access to the critical supplies and minerals that they need. We are interested in helping them with that and we are having bilateral and multilateral conversations with all of them."
Environmental, social safeguards
The ministers from rich nations acknowledged the need to help developing countries on a number of fronts to achieve climate goals. On critical minerals, they suggested creating incentives for environmentally sound management of electrical and electronic waste, establishing domestic recycle chains and fostering recycling capacity for used lithium-ion batteries and neodymium magnets, "which will be discarded in huge quantities due to the scrapping of [electric vehicles], etc.," the G-7 plan said.
The G-7 plan promised to develop resources and supply chains responsibly through groups like the Minerals Security Partnership, whose goal is to ensure that critical minerals are produced, processed and recycled in a manner that "supports the ability of countries to realize the full economic development benefit of their geological endowments."
Arifin Tasrif, Indonesia's energy and mineral resources minister,
speaks at the Sydney Energy Form on July 12, 2022. He
attended the G-7's climate and energy talks April 15-16, 2023.
Source: Brook Mitchell/Getty Images AsiaPac via Getty Images
Major nickel producer Indonesia, which is not a G-7 member but was invited to the talks as the chair of ASEAN, echoed the need for outside investors to protect the environment and improve the population's well-being if they want to share the benefits of developing Indonesia's vast resources.
"[Indonesia has] 270 million people, and it's growing by the year," Arifin Tasrif, Indonesia's energy and mineral resources minister, said in an April 15 interview. "How can we fulfil their needs? We have to create jobs."
Tasrif said the government realizes the effect of pollution caused by past mining operations but maintains it has ramped up oversight.
"We don't want it, it will directly affect our people," he said. "So we have to make strict regulation, tight control and then apply such kind of close scrutiny to the people who are not obeying the regulation."
Canada's Wilkinson said Indonesia was welcome to join groups like the Sustainable Critical Minerals Alliance if it can demonstrate strict environmental standards, and "if it can't yet but wishes to aspirationally, then it's incumbent on countries like Canada to help them actually get there."
"I can't opine on whether they've met that test yet, but I do think that test is going to be important if they want to be a supplier not only to Canada but to the United States, Germany and France, who have all committed to only buy from countries with high ESG standards," he said.
S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.
Japan's Mitsubishi Corp looks to invest in nickel, lithium projects
Originally posted on Reuters.com
The signboard of Mitsubishi Corp is pictured at its head office in Tokyo, Japan August 2, 2017. REUTERS/Kim Kyung-Hoon
TOKYO, April 13 (Reuters) - Japanese trading house Mitsubishi Corp (8058.T) is looking to invest in nickel and lithium projects to meet growing demand for electric vehicle (EV) batteries, while boosting its copper output, the head of its metal operations said on Thursday.
The move comes as global push by automakers to electrify their fleets has sparked a rush for stable supplies of lithium, nickel and copper and other critical minerals. Demand is expected to exceed supply by the end of the decade.
"As global resource companies and others are looking for lithium and nickel, we are considering to invest in the two metals," Satoshi Koyama, Mitsubishi's mineral resources group CEO, told an analysts meeting.
Canada and Australia could be investment targets for nickel as they meet both the criteria of safety from the perspective of geopolitical risk and access to renewable power from the perspective of decarbonisation, he said.
Last year, Mitsubishi bought a 15% stake in a joint venture with Giga Metals Corp (GIGA.V) to pursue the development of the Turnagain nickel deposit in Canada.
"We are verifying what kind of nickel projects will make it to the profitability line, given technical hurdles and cost issues," Koyama said.
Mitsubishi is also looking into a number of lithium projects.
To develop a new mine, it must come with the downstream operation to process the metal into raw battery material, but whether it can be done in Australia and North America will be the biggest challenge, Koyama said.
Mitsubishi and its joint venture partner BHP Group (BHP.AX) in Australia have put up for sale their Daunia and Blackwater metallurgical coal mines in Queensland's Bowen Basin.
"If the deal comes through, we may allocate the cash into growth segments such as copper and battery metals," Koyama said.
Mitsubishi, which owns a stake in five copper mines in South America, including 40% stake in Anglo American's (AAL.L) Quellaveco mine in Peru, wants to bolster its copper output by expanding the existing mines and investing in new promising projects, Koyama said.
Reporting by Yuka Obayashi; Editing by Kim Coghill
Canada’s budget measures brighten funding prospects for critical miners
Originally posted on Mining.com
Canada’s move to expand the investment tax credit for mining companies to align it with policies in the United States is accelerating funding talks for critical miners, company executives told Reuters.
Prime Minister Justin Trudeau’s government proposed a 30% investment tax credit for expenses related to the exploration of critical minerals in the latest budget announced last month. This incentive also covers investors planning to buy shares in certain critical mining companies such as those in the exploration of lithium brine.
Company executives say the new measures would help bring in new equity investors who stayed away from the mining sector due to volatile capital market conditions. An early-stage exploration project typically needs between C$10 million ($7.4 million) to C$25 million, according to industry estimates.
“These provisions are going to be of huge help to attract investments,” said Mark Selby, CEO of Canada Nickel Company Inc.
Since the budget announcement, Selby said Canada Nickel’s ongoing discussions for a potential partnership with an unidentified Korean battery maker have accelerated thanks to the specific measures. The TSX Venture Metals and Mining Index is up 4% since the budget, compared with a 2.7% rise in the broader market.
Canada is trying to match the incentives announced by the United States under the Inflation Reduction Act which offers a combination of tax credits and government loans worth $40 billion to support critical mineral projects.
Canada is home to half of the world’s mining companies and is seen as a premium destination for junior miners to raise capital, according to The Toronto Stock Exchange.
Chris Doornbos, CEO of Alberta-based E3 Lithium, said the government’s proposals open up a whole new funding option for junior miners in Canada that was not available before. E3 Lithium is working on the exploration of lithium from brines in Calgary.
“So you actually get better value for the money (raised through flow-through shares) and now there’s more of that which is available,” Doornbos said.
The flow-through shares are a specific feature in the Canadian capital market, where listed mining companies raise equity at a higher price from investors for exploration projects, and investors in turn claim tax rebates. This helps attract investments in risky exploration projects, company executives say.
Several junior mining companies in western Canada are optimistic about the fund raising prospects and are in talks with banks for financing, Doornbos added.
“At Litus we are excited about how this initiative will further ignite the strategic battery metals sector,” said Ghada Nafie, CEO and Co-Founder of Litus, a Calgary-based company working on a technology to extract lithium.
TSX, Canada’s biggest stock exchange operator, sees the new budget proposals as “very positive” for the mining sector but warned that broader economic uncertainty and geo-political risks are dominating investor sentiment, Dean Mcpherson, the Head Global Mining, TSX told Reuters.
Still, the mining industry has a reason to cheer.
“These measures do level the playing and put us in a stronger position,” said Pierre Gratton, CEO of the Mining Association of Canada.
($1 = 1.3488 Canadian dollars)
(By Divya Rajagopal; Editing by Alistair Bell
Canada is sitting on a critical minerals mother lode. But is it ready for the new gold rush?
Originally posted on Cbc.ca
Drive two hours north of Ottawa, put on a hard hat and bright orange vest, descend into a pit — and you find yourself on the frontline in the fight to be part of the new, green economy.
A mining project might not be what comes to mind when you think of the transition to a lower emissions economy. But embedded in electric vehicles, solar panels and hydrogen fuel storage are metals and minerals that come from mines like the one in Lac-des-Îles, Que.
The graphite mine, owned by the company Northern Graphite, is just one of many projects aimed at extracting what are now officially dubbed "critical minerals" — substances of significant strategic and economic importance to the future of national economies.
Lac-des-Îles is the only significant graphite mining project in North America, accounting for Canada's contribution to an industry dominated by China.
Hugues Jacquemin and Kirsty Liddicoat of Northern Graphite take The House on a tour of their mine in Quebec, and talk about what Canada needs to do to lead the way on critical minerals development.
Experts and industry proponents say Canada has the potential to be a major player in critical minerals — but it needs to change the scope and scale of investment and regulation in order to get there.
For Northern Graphite, in the short-term, that means money. Hugues Jacquemin, Northern Graphite's CEO, told CBC's The House during a tour of the Quebec facility that the company is trying to open a mine in Bissett Creek, Ont., to produce graphite that could go into EV batteries.
But they need to raise $150 million to kick-start production.
Hugues Jacquemin, CEO of Northern Graphite, stands in a pit mine nearing the end of its commercial life in Lac-des-Îles, Que. (Jennifer Chevalier/CBC)
"No investor is willing to take 100 per cent of the risk. We need someone to step in alongside the investor and support part of the risk because today there is no demand for battery materials in Canada or in the U.S. at the moment," Jacquemin said.
"So we need something to help us jump-start the whole supply chain so that we can be there three or four years from now, when the market is buying materials."
The company says it expects to seek significant financial support from the federal government, but nothing has been confirmed so far.
For its part, the federal government says it's committed to helping build a critical minerals industry in Canada and recently released its official strategy to do so.
"We need to ensure that we have access to these critical minerals to be able to successfully go through the energy transition and fight climate change," Natural Resources Minister Jonathan Wilkinson said in an interview with The House.
Wilkinson told host Catherine Cullen that while the government is willing to work with companies, it can't be the only source of funding.
"The source of all capital doesn't come from the government. Government can actually do things to help kick-start those [projects]. But obviously companies need to be able to [raise] private capital," he said.
Wilkinson pointed to a number of measures the government has in place to help Canadian companies develop critical minerals projects, including the Canada Growth Fund, new tax credits for green investments and government funding for infrastructure to help facilitate projects.
Project timelines a concern
The Canadian government is far from the only one interested in critical minerals mining in this country. The U.S. Department of Defence has expressed interest in projects here — and a willingness to invest. Jacquemin said Northern Graphite plans to apply for American investment as well.
Critics — including Conservative Leader Pierre Poilievre — have said it simply takes too long to develop a mining project in Canada. Northern Graphite, for example, has owned Bissett Creek since 2012, and the mine is not yet operational.
Wilkinson said the average mining project typically takes around 12 to 15 years but "that's still too long." He said the government is aiming for something more like five or six years.
CBC News: The House49:39Mission critical: Is Canada lagging behind in the critical minerals race?
The House takes an in-depth look at Canada’s efforts to become a leader in the development of critical minerals. Hugues Jacquemin and Kirsty Liddicoat, executives of Northern Graphite, explain their efforts to expand. Natural Resources Minister Jonathan Wilkinson explains how the government is responding. Mark Podlasly talks about his efforts to help First Nations secure their interests, and experts Nate Wallace, Alisha Hiyate and Ian London weigh in on what Canada should be doing to respond to what some are calling the new gold rush.
Ian London, executive director of the Canadian Critical Minerals and Materials Alliance, told Cullen that Canada has the "pieces of the puzzle" to unlock Canada's critical mineral potential, but more needs to be done.
"Prospective customers … want operating facilities, not aspirations," he said.
Environmental impact, Indigenous participation
Perhaps the most significant challenges to the mining industry come from concerns about environmental impacts and the role of Indigenous communities.
On the environmental front, advocacy groups like Environmental Defence worry that mining projects carry with them dangers of waste and environmental damage.
"We need to recognize that more mining likely needs to happen, but it needs to be governed responsibly, and we can't use the rush to extract more minerals for the transition to be an excuse for watering down environmental standards," said Nate Wallace, a program manager with the group.
Ontario Premier Doug Ford shows a draft agreement with Chief Cornelius Wabasse of Webequie First Nation, left, and Marten Falls Chief Bruce Achneepineskum, centre, in March 2020 after signing an agreement to move forward on building the Northern Road Link in the Ring of Fire area. (Nathan Denette/The Canadian Press )
Wallace noted that with some projects, there's a risk that the benefit of unlocking reduced emissions from innovations like electric vehicles would not be worth the cost of the project's greenhouse gas output. He cited the controversial Ring of Fire proposals in Ontario as one example.
"There's also significant environmental concerns about that project because it's covered by peatlands, and that's basically equivalent to Canada's Amazon rainforest, in terms of being a massive carbon sink," he said.
London said he agrees that a balance needs to be struck between environmental impacts and developing projects. He said that dialogue should continue on controversial projects, but Canada's focus should be more immediate.
"Our priority should be set on projects which are closer to — not shovel ready — but actually going into production," he said.
Wilkinson said the government is "very focused" on making sure the environmental cost of mining is minimized.
"There is no such thing as a mining project that has zero impact," he said. "But there certainly are projects that can be done in a way where the impacts are modest and that there is a plan for how you remediate in the aftermath of the mine."
The Ring of Fire proposals are also a key test of how governments and companies interact with Indigenous communities. The Neskantaga First Nation has said it was not meaningfully consulted on the proposals and has protested them.
First Nations take their message directly to Ontario government — no resource extraction without consent
Watch this uncut exchange as leaders from five First Nations in northwestern Ontario and NDP MPP Sol Mamakwa speak to reporters after demonstrating their continued opposition to mining in the Ring of Fire without their prior consent at Question Period.
Mark Podlasly, an executive with the First Nations Major Projects Coalition, acknowledged that Indigenous people have been wronged in the past when it comes to development.
"Many First Nations are concerned that this new rush for critical minerals, towards the net zero transition, is going to be a repeat of what's happened in the past," he told Cullen.
"How it should work is Indigenous people have to be included in the environmental and economic decisions of the projects from the start."
Mining faces a reputational challenge
Kirsty Liddicoat, Northern Graphite's COO, said the mining industry also faces challenges when it comes to building up its own reputation and workforce. Along with domestic concerns, Canadian companies are frequently criticized for their actions overseas.
"I think mining as an industry is poorly understood and it doesn't necessarily have the best reputation. So that's leading us to a number of challenges with social acceptability and talent," she said.
"We need to be attracting the smartest people to the biggest problems that we have as a world, to help us make this shift."
Kirsty Liddicoat, chief operating officer of Northern Graphite, holds a rock with graphite ore at the company's Lac-des-Îles mine. (Jennifer Chevalier/CBC)
Kirsty Liddicoat, chief operating officer of Northern Graphite, holds a rock with graphite ore at the company's Lac-des-Îles mine. (Jennifer Chevalier/CBC)
London said the mining industry has taken steps to build in more corporate responsibility but there will always be a tradeoff in an extractive industry.
"A colleague of mine said when it comes to green technologies, amongst all that green, there's always going to be a little black," he said.
"It is an extractive industry, there will be some negative impact. But overall, it's tremendously positive."
Federal government outlines $83B in clean economy tax credits in bid to compete with U.S. incentives
Originally posted on ctvnews.ca
Serious money is heading for Canadian industries looking to reduce emissions after the federal government unveiled its answer to the U.S. Inflation Reduction Act.
The spending commitments announced in Tuesday's federal budget include tax credits for investments in clean electricity, clean-tech manufacturing, and hydrogen that together are expected to cost some $55 billion through to the 2034-35 fiscal year.
Details: Budget 2023 prioritizes pocketbook help and clean economy
Capital Dispatch: Sign up for in-depth political coverage of Parliament Hill
Total tax incentives amount to almost $83 billion over that timeframe when the carbon capture and storage and clean-tech investments credits announced last year are factored in, both of which saw minor boosts this round.
The government says the funding is necessary to boost clean economy spending from some $15 billion a year to the $100 billion a year needed. The spending is also needed to not fall behind as other countries roll out subsidies, most notably with the US$369 billion contained in the landmark U.S. legislation passed last year.
"In what is the most significant economic transformation since the Industrial Revolution, our friends and partners around the world, chief among them the United States, are investing heavily to build clean economies," said Deputy Prime Minister Chrystia Freeland as she introduced the budget.
Tax credits are the backbone of the effort because they are stable and efficient way to roll out government support, while leaving decision-making with the expertise of the private sector, said a senior government official in the budget lockup.
Clean electricity is the biggest focus of the credits, costing $6.3 billion over the first four years starting in 2024, and $25.7 billion through to the 2034-35 year. Notably, provincial utilities and Indigenous-owned corporations will be eligible for the credits.
The spending is meant to help spur both more generation, as well as a better-connected east-west grid to meet the expected doubling of electricity demand by 2050.
The clean electricity package is where the government has likely done enough to meet its goals, said Michael Bernstein, executive director of Clean Prosperity.
Other funding areas however, including the $11.1 billion in credits for manufacturing and $12.4 billion for carbon capture through to 2034, likely aren't enough to close the gap with what the U.S. is offering, he said.
"It really is one of those situations where your competitor has stepped up and said we are going to be providing an almost unthinkable amount of money."
Canada has opted for construction-focused project support, while the U.S. IRA covers operational costs with payments based on production volumes. It's like Canada is offering a single large cup of soda, whereas the U.S. is offering endless kiddy-cup sized refills, meaning Canada needs to offer a pretty big cup to compete, said Bernstein.
Since it's not covering operations, Canada needs to move quickly on offering the carbon pricing backstop that it's promised to develop in the budget, he said.
The so-called contracts for difference would provide certainty to industry on future carbon pricing and credits, but so far they're still in consultation, as are several other key policies.
"What surprised me was how many things are still left to be determined," said Rachel Samson, vice-president of research at the Institute for Research on Public Policy.
Along with the contacts for difference, she noted that details are scarce about how the $15 billion Canada Growth Fund will be spent.
The government announced in the budget that the fund will be administered independently by the Public Sector Pension Investment Board, with money starting to flow in the first half of the year, but didn't provide guidance on priority areas.
Samson said it was good the government isn't trying to direct the money itself, but worried that pension fund managers are too cautious to put the money in the bold projects needed.
"We need projects that are more on the cutting-edge, that are riskier."
The government also pushed down the road any commitments on biofuels such as sustainable jet fuels, which surprised Samson as Canada is currently exporting the raw wood pellet feedstock and knows companies have projects ready to go.
The budget was also notable for what wasn't in it for the oil and gas industry. While it did tweak last year's carbon capture incentives, it didn't go as far as some were pushing for, while the emissions cut-off for hydrogen production will likely exclude most carbon-capture based hydrogen projects.
"Oil and gas did not get a lot of what I think it wanted in this," said Samson.
The lack of funding comes as climate advocacy groups have pushed against support for both programs as wasteful projects that don't achieve the emission cuts needed in the near term, while also pushing against support for an industry that has reported record profits.
The government has also framed the budget as one of fiscal restraint that it hopes will allow private capital to do much of the heavy lifting to keep Canada in the running.
"Canada must either meet this historic moment, this remarkable opportunity before us, or we will be left behind as the world's democracies build the clean economy of the 21st century," said Freeland.
This report by The Canadian Press was first published March 28, 2023.
U.S. offers cash to Canadian critical minerals projects during Biden's visit
Originally posted on cbc.ca
There was a pot of gold at the end of President Joe Biden's jaunt to Canada. It's going to Canada's mining sector.
The U.S. military will deliver funds this spring to critical minerals projects in both the U.S. and Canada. The goal is to accelerate the development of a critical minerals industry on this continent.
The context is the United States' intensifying rivalry with China.
The U.S. is desperate to reduce its reliance on its adversary for materials needed to power electric vehicles, electronics and many other products, and has set aside hundreds of millions of dollars under a program called the Defence Production Act.
The Pentagon already has told Canadian companies they would be eligible to apply. It has said the cash would arrive as grants, not loans.
On Friday, before Biden left Ottawa, he promised they'll get some.
U.S. President Joe Biden addresses Parliament in Ottawa, Canada, on March 24, 2023. (Kevin Lamarque/AFP/Getty Images)
The White House and the Prime Minister's Office announced that companies from both countries will be eligible this spring for money from a $250 million US fund.
Which Canadian companies? The leaders didn't say. Canadian officials have provided the U.S. with a list of at least 70 projects that could warrant U.S. funding.
Biden also said Canadian semiconductor projects would be eligible for access to another Defence Production Act program.
"Our nations are blessed with incredible natural resources," Biden told Canadian parliamentarians during his speech in the House of Commons.
"Canada in particular has large quantities of critical minerals that are essential for our clean energy future, for the world's clean energy future.
"And I believe we have an incredible opportunity to work together so Canada and the United States can source and supply here in North America everything we need for reliable and resilient supply chains."
Canada has also promised billions of dollars to the sector. One participant at a recent Pentagon briefing in Washington said the U.S. funding would reassure potential private-sector investors that a given project has U.S. military backing.
It's not clear which types of jobs these projects would create in Canada.
Biden may have triggered some cringes in Canadian political circles when he appeared to suggest the value-added transformation jobs from this future sector would go to the U.S.
He cast it as an ideal partnership: Canada would extract the minerals, Americans would build things with them.
"You guys – we don't have the minerals to mine, you can mine them," he said. "You don't want to produce, I mean, turn them into product."
Cut the red tape, mining sector says
Another unknown is how quickly this sector will grow in Canada, and whether it can ramp up in time for this country to become a major player in providing raw materials for growing fleets of electric vehicles.
Some business groups have told the Canadian government it must speed up permitting times or risk seeing this window close for Canada.
The Mining Association of British Columbia, for example, has proposed numerous measures to alleviate what it called interminable delays.
"The permitting and authorization processes that regulate mining projects are too cumbersome, untimely and inconsistent with the urgent need," it said in a recent briefing paper.
The federal government has acknowledged this issue and has promised to speed things up.
"It cannot take us 12 to 15 years to open a mine in this country. Not if we want to achieve our climate goals," Environment Minister Jonathan Wilkinson said late last year.
Canada budget to have tax credit for equipment used to produce EVs – sources
Originally posted on Mining.com
Canada’s Foreign Minister Chrystia Freeland. Photo by Freeland’s press office
Canada will introduce in its budget next week a 30% investment tax credit to boost clean-tech manufacturing, especially in the electric vehicle (EV) supply chain, two government sources familiar with the document said on Thursday.
The tax credit for capital investments in manufacturing equipment will be a “significant piece” of a bundle of measures aimed at putting Canada’s green-transition effort on the same level as the United States, said one source.
The credit will be available for future investments in equipment used to extract and process critical minerals used in EVs, a second source said, and to purchase equipment used in manufacturing along the entire EV supply chain, including for batteries.
In addition, the tax credit will be able to be used to buy equipment to produce nuclear energy fuels and heavy water, for making electrical energy storage, and for producing solar panels or wind turbines, the second source said.
Finance Minister Chrystia Freeland will present the 2023-2024 fiscal year budget to parliament on Tuesday. Neither source was authorized to speak on the record. A finance ministry spokesperson declined to comment.
Freeland has promised to bolster Canada’s green energy stimulus after the US last year passed the Inflation Reduction Act (IRA), which provides massive incentives for those who invest in clean technology there.
“In an ideal scenario, this will incentivize expanded critical minerals extraction and processing in Canada, and ideally a lot of that will then be purchased and fed into a growing net-zero manufacturing base in the US,” the first source said. US President Joe Biden is due to arrive in Ottawa on Thursday for an official visit that officials say will include an agreement between the two countries to enhance cooperation clean energy and technologies.
Last year, Canada budgeted C$3.8 billion ($2.8 billion) to scale up exploration and infrastructure for critical minerals. Pierre Gratton, president and CEO of the Mining Association of Canada, said more investment is badly needed. Countries across the globe are scrambling to take advantage of a rapid shift to low-carbon energy. Canada has an abundance of the critical minerals used to produce EVs.
“The US does need us… and right now, we’re not on track to deliver,” Gratton said. “So these measures, if they turn out to be in the budget, will help us make sure we can deliver.” Canada sends three-quarters of its exports south of the border, and the automobile industries of the two countries are highly integrated.
Neither source put a price tag on the measure, but they did say it would not apply to projects where investments have already been agreed, such as the two Canadian battery plants planned by carmakers Volkswagen and Stellantis NV.
Canada has limited financial firepower compared with what the US put forward in the IRA, which many experts say will lead to more than $1 trillion in investment.
Earlier this month, a source told Reuters that green transition budget measures would focus on increasing the capacity of the electricity grid, on battery manufacturing and on mass timber construction, without providing details.
Last autumn, Canada announced investment tax credits for companies that purchase finished clean energy systems, like solar panels. Instead, the new tax credit will apply to manufacturers buying equipment to build things like solar panels.
“It’s about building out the industrial base in Canada,” the second source said.
($1 = 1.3659 Canadian dollars)
(By Steve Scherer; Editing by Denny Thomas, Bill Berkrot and Marguerita Choy)
Europe turbo charges its critical minerals drive
Originally posted on Mining.com
The European Union has unveiled the accelerator in its drive to reduce the bloc’s import dependency for critical minerals and metals.
The Critical Raw Materials Act (CRMA) “will significantly improve” Europe’s domestic extraction, processing and recycling capacity for metals such as lithium and rare earths, according to Ursula von der Leyen, president of the European Commission.
The Act comes with targets for production and for reducing dependency on any single third country. China currently dominates the supply chain for many of the entries on Europe’s list of “strategic” metals.
The EU is also playing catch-up with the United States, which is already investing heavily in critical metals capacity under the aegis of the Defense Production Act and the Inflation Reduction Act.
Europe may, however, have given itself a competitive edge by moving to streamline project permitting, a tortuous process that often drags on for years before the first shovel hits the ground.
(Moving) targets
The CRMA covers a subset of the EU’s critical minerals list, with particular focus on battery metals like lithium, nickel, cobalt and manganese and magnet inputs such as boron and rare earths.
Copper is on the list as an enabler of all things electric but aluminum and zinc aren’t, which is a striking omission given the recent shrinkage of European production capacity.
Germany’s Speira has joined the list of casualties, this month announcing the full closure of its Rheinwerk aluminum smelter due to high energy costs.
“Today’s strategic raw materials list must not be the finished picture,” warned Evangelos Mytilineos, president of industry group Eurometaux.
It probably won’t be. The CRMA includes a provision for periodically updating the list to reflect evolving economic importance and supply risks across the critical metals spectrum.
For those metals on the list the target is for the region to mine 10%, process 40% and recycle 15% of what it consumes annually by 2030. By which time not more than 65% of any strategic metal’s consumption will be able to come from a single third country.
These are ambitious targets given Europe currently sources 97% of its magnesium in China, which also has a complete monopoly on the processing of heavy rare earths and graphite.
Europe’s lithium extraction can in theory meet the 10% target but it hinges on multiple new projects, many of them using innovative technology.
Recycling lithium-ion batteries is also a technical challenge that has to be resolved at scale to meet the 15% recycling target.
Permitting
In terms of maximizing domestic mining and processing capacity, Europe is following the United States in instructing all national governments to go back and look at what may have been left behind in tailings ponds and historic mine sites.
Operators of existing mines and plants should prepare an economic assessment study of what they’re losing in “waste” streams. It’s a policy that has already significantly closed the US dependency gap for tellurium and scandium.
However, Europe has overtaken the United States in one key area, aiming to streamline the permitting of “strategic” projects to ensure a maximum time-line of two years for mines and one year for processing plants.
All such projects should be considered as being “in the public interest” by the relevant national authority when considering environmental impact.
The US Administration has come under fire for using the Inflation Reduction Act to incentivize domestic mining while simultaneously blocking development of mines on federal land. The green-on-green environmental clashes seem set to continue until there is a long-overdue rewrite of the General Mining Act of 1872.
Collective buying and stockpiles
Many strategic metals markets are opaque, not easily financially hedged and concentrated on the supply side, according to the CRMA. All of which “increases the negotiating power of sellers and increase prices for buyers.”
It calls for the Commission to set up a system for collective purchasing by interested buyers, a mechanism already trialed in the gas market.
It also recommends the accumulation of strategic metal stocks to buffer against unexpected supply disruptions. Europe has no strategic metal inventory, unlike the United States, China and South Korea.
Member states may have their own stockpiles and “as a first step and considering the lack of relevant information,” the 27 countries in the bloc should report to the Commission what, if anything, they are holding.
Given such a humble starting point, it seems unlikely EU strategic metal reserves are going to come any time soon, if they come at all.
Metallic arms race
The EU accepts it will never be fully self-sufficient in most if any of the metals it’s identified as being critical to its industrial and defense sectors.
The CRMA advocates diversifying supply in favor of “reliable partners” and creating “mutually beneficial partnerships with emerging market and developing economies.”
It represents a further tectonic decoupling of global supply chains.
What started as a response to China’s dominance of critical metals supply has been accelerated by Russia’s invasion of Ukraine.
Russia has historically been a major supplier of aluminum, copper and nickel to Europe’s industrial sector to the extent that the EU has to date held back from sanctioning Russian material even as the United States imposes penal import duties.
But the metals world is clearly starting to split between West and the East.
It’s a messy process, witness the dispute between the EU and the United States over the exclusion of European products from the electric vehicle subsidies introduced in the Inflation Reduction Act.
That particular hurdle may shortly be cleared, German newspaper Handlesblatt reporting that a draft agreement has been reached.
It is evidently in neither side’s interest to compete with each other in the context of reducing resource ties with China and Russia.
Assuming future trans-Atlantic harmony can be achieved, something akin to a metallic NATO will start to take ever clearer shape.
(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)
The impact of vehicle sizes on mineral demand in the EV market
Originally posted on Mining.com
Source: Benchmark Mineral Intelligence
As the electric vehicles (EV) market grows, a debate is developing about the amount of minerals needed to supply the demand for EV batteries.
Following the US’ push for electrification with the Inflation Reduction Act, the European Union recently unveiled its Critical Raw Materials Act to “significantly improve” domestic extraction, processing, and recycling capacity for metals such as lithium and rare earths.
Other nations like Canada and South American countries are also discussing how to benefit from the expanding market.
The infographic above by Benchmark Mineral Intelligence demonstrates how different models and battery types impact critical mineral demand.
While a Tata Motors Tiago battery contains only 1.1kg of lithium carbonate equivalent (LCE), a Tesla Semi truck requires over 500kg of LCE to operate.
Prime Minister Trudeau and President Biden Joint Statement
Originally posted on pm.gc.ca
Canada and the United States celebrate our progress under the Roadmap for a Renewed U.S.-Canada Partnership over the past two years and reaffirm our historic alliance, steadfast friendship, and commitment to overcome the daunting challenges of today and realize the full potential of the relationship in the future. Our enduring partnership is based on a mutual commitment to shared security, shared prosperity, and shared democratic values, including the importance of fighting climate change and an abiding respect for human rights and the rule of law. As the closest of friends and allies, we remain committed to making life better for people on both sides of our shared border and to building a more free, equitable, secure, and prosperous world.
To that end, Canada and the United States will work together to:
1.Catalyze Clean Energy and Create Good Jobs: Deepening economic integration, accelerating the deployment of clean technologies, and workforce development are essential to building a more sustainable and globally competitive economy for American and Canadian workers, including through continued implementation of the U.S.-Mexico-Canada Agreement.
Prime Minister Trudeau and President Biden highlighted Canada’s Emissions Reduction Plan and the U.S. Inflation Reduction Act as foundational elements to leading the clean energy future through robust clean energy industrial policies that help mobilize technological innovation, bolster resilient supply chains, strengthen our respective economies and expand the middle class, while keeping our environment healthy for future generations. Canada is moving forward with an enhanced plan to support a clean economy future, including with a new investment tax credit for clean technology manufacturing in addition to tax measures that support clean hydrogen and clean technology adoption. As the implementation of these plans proceed, the United States and Canada will work together toward an integrated North American approach that benefits U.S. and Canadian workers, suppliers, and products.
Canada and the United States launched a one-year Energy Transformation Task Force chaired by the U.S. Special Presidential Coordinator for Global Infrastructure and Canada’s Deputy Prime Minister to work across the spectrum of the clean economy. The task force will accelerate cooperation on critical clean energy opportunities and supply chains, including but not limited to, securing and strengthening renewable energy and electric vehicle supply chains, critical minerals and rare earths, grid integration and resilience, advanced and conventional nuclear energy and other areas that advance our collective energy security, and to avoid and reduce disruptions to our integrated and mutually supportive supply chains.
Canada and the United States have built the world’s largest market-based energy trading relationship, which provides a firm foundation as we strive to reach net-zero greenhouse gas emissions. Both countries will work to harmonize charging standards and develop cross-border alternative fuel corridors, drawing on USD $7.5 billion in the U.S. Bipartisan Infrastructure Law and CAD $1.2 billion in Canadian funding to build a network of electric vehicle fast chargers and community charging options on both sides of the border.
Building on Canadian and U.S. commitments to achieve net-zero power grids by 2035 and to accelerate efforts to phase down new, unabated coal power generation facilities, both countries intend to propose regulations before this fall that will reduce greenhouse gas emissions from their respective sectors. The United States and Canada also intend to work with other major energy importers and exporters to develop an internationally aligned approach to measurement, monitoring, reporting, and verification for lifecycle methane and CO2 emissions across the fossil energy value chain.
Canada and the United States will work together to address the climate impact of goods, promote North American trade of low-emissions goods, including the promotion of common approaches for trade in low emissions goods, including green steel and aluminum.
On civil nuclear engagement, Canada will join the Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST) program, providing funding and in-kind support. Canada and the United States will also coordinate efforts to develop secure and reliable North American nuclear fuel supply chains and build broader partnerships with longstanding allies and partners, both of which will help to ensure access to low enriched uranium, including High-Assay Low Enriched Uranium.
2.Strengthen Resilience of Critical Mineral and Semiconductor Supply Chains: Canada and the United States will work together to create a strong, environmentally responsible, and resilient North American critical minerals supply chain. We are committed to identifying, securing, and developing critical minerals extraction, processing, manufacturing, and recycling opportunities in both countries to diversify supply chains essential to clean energy, electric vehicles, semiconductors, aerospace, and defense, among other sectors, that meet strong environmental, sustainability, worker, health and safety, Indigenous and Tribal consultation and partnership, and community engagement standards.
Canada and the United States are taking a significant step toward the creation of reliable and sustainable critical mineral supply chains that are vital to our economic and national security and demonstrate the commitment of the United States to support Canadian companies in the energy economy.
Last year, the United States announced USD $250 million of Defense Production Act Title III funding for U.S. and Canadian companies to mine and process critical minerals for electric vehicle and stationary storage batteries, with awards to U.S. and Canadian companies to be announced this spring.
The Canadian Critical Minerals Infrastructure Fund will make CAD $1.5 billion available to support clean energy and transportation infrastructure projects necessary to accelerate critical minerals production and an additional CAD $1.5 billion through the Strategic Innovation Fund to support advanced manufacturing, processing, and recycling.
With the passage of the CHIPS and Science Act, Canada and the United States will facilitate investment to promote secure and resilient semiconductor supply chains, creating jobs in both countries. Both countries will advance a cross-border packaging corridor, beginning with Canada and IBM providing a significant investment to develop new and expanded packaging and testing capabilities at its Bromont facility as part of a Memorandum of Understanding
To strengthen advanced packaging for semiconductors and printed circuit boards in North America, the United States announced an additional USD $50 million in Defense Production Act funding for U.S. and Canadian companies to advance packaging for semiconductors and printed circuit boards, with Canada to provide up to CAD $250 million for semiconductor projects from the Strategic Innovation Fund in the near term. We are also establishing an Advanced Technology Data and Security Dialogue and intend to deepen our collaboration on shared priorities in quantum information science and technology.
3.Protecting Our Shared Waters and the Arctic: Canada and the United States committed to fight climate change and build net-zero economies, conserve biodiversity, and protect fragile ecosystems, including in transboundary waters and the Arctic.
Recognizing the vulnerability of the unique, shared Arctic ecosystem, Canada and the United States committed to advancing conservation, environmental protection and resilience in partnership and consultation with the Indigenous peoples and populations, and furthering work under agreements and treaties established around the movement of shared species.
Canada and the United States further committed to initiating dialogue with other Arctic Nations and Indigenous peoples to advance conservation and sustainable economic development in the Central Arctic Ocean, and recognized the need to conserve and protect Arctic ecosystems and reduce localized emissions of carbon dioxide, methane, and black carbon in the Arctic to complement our global mitigation efforts. The two countries will collaborate to prepare for, prevent, and respond to oil spills and other environmental disasters in the Arctic.
Canada and the United States announced a renewed commitment to preserving and restoring our shared national treasure, the Great Lakes. The United States welcomed Canada’s announcement of a new, historic investment of CAD $420 million over the next decade as part of this shared responsibility to protect and restore the world’s largest freshwater ecosystem. The U.S. Bipartisan Infrastructure Law provided the largest single investment in the Great Lakes in history, with USD $1 billion for cleanup and restoration activities.
Canada and the United States will intensify their work over the coming months toward agreement on a modernized treaty regime that will support a healthy and prosperous Columbia River Basin. We will focus on flood risk management, power generation, and environmental benefits that are shared equitably by both countries and the Indigenous peoples and Tribal nations, communities, and stakeholders in this watershed. The Columbia River is a vital shared resource that underpins many lives and industries on both sides of the border and the watershed requires our attention and prompt coordination.
Canada and the United States also intend to reach an agreement in principle by this summer to reduce and mitigate the impacts of water pollution in the Elk-Kootenay watershed, in partnership with Tribal Nations and Indigenous Peoples, and in order to protect the people and species that depend on this vital river system.
4.Advancing Diversity and Inclusion: Recognizing the central importance of inclusion and equal opportunity to our democracies, Canada and the United States will continue to work toward fair and inclusive policies that benefit all citizens, regardless of sex, gender, or sexual orientation; race, ethnicity, or religion; age; disability; or geography.
Building on previous bilateral and North American commitments, the Leaders reaffirmed their shared determination to promote equality and ensuring everyone lives free from discrimination, harassment, or violence. Canada and the United States remain committed to ensuring the full, equal, and meaningful participation of marginalized communities in our societies.
The Leaders reaffirmed their shared commitment to promoting gender equality and empowering women and girls as essential for achieving a more peaceful, inclusive, and prosperous world. They underscored the importance of continued cooperation on the advancement of gender equity, including with respect to child benefits, early learning and childcare, pay equity, and women’s entrepreneurship, among other issues.
5.Bolster Global Alliances: Canada and the United States are committed to the security of our treaty allies, including through the North Atlantic Treaty Organization (NATO), and to supporting our partners around the world. We are even stronger through our collaboration at and with the United Nations and other international organizations, alliances, and groups, including the G7, G20, the Five Eyes, and the Organization of American States.
We condemn Russia for its illegal, unjustifiable, and unprovoked war against Ukraine, and will continue imposing economic costs on Russia, while maintaining our unwavering support for Ukraine for as long as it takes.
Canada and the United States acknowledge the serious long-term challenge to the international order posed by the People’s Republic of China, including disruptive actions such as economic coercion, non-market policies and practices, and human rights abuses. While we will cooperate with China in areas of mutual interest, such as on climate change, we remain committed to ensuring our ability to compete effectively with China on a level playing field. Canada and the United States will also continue to cooperate on countering foreign interference in our societies in a manner that reflects our shared democratic values.
We emphasize that our basic positions on Taiwan remain unchanged, and reiterate the importance of maintaining peace and stability across the Taiwan Strait as an indispensable element of security and prosperity in the international community. We encourage the peaceful resolution of cross-Strait issues.
The Prime Minister and the President reaffirmed their commitment to the Americas Partnership for Economic Prosperity, and welcomed the first U.S.-Canada Indo-Pacific Strategic Dialogue on March 10 and will cooperate to promote a free, open, prosperous, secure, and resilient Indo-Pacific.
Canada and the United States are working together to support countries around the world as they develop their economies to deliver inclusive and resilient growth, while fostering sustainable pathways to net zero emissions. Through the G7 Partnership for Global Infrastructure and Investment, we are collaborating to unlock public and private capital for quality infrastructure to create lasting positive impacts for low- and middle-income countries and support sustainable development, as well as benefit partners’ economic security and global supply chains. We are also advancing an ambitious agenda to evolve the multilateral development banks, starting with the World Bank, to better respond to global challenges, while also enhancing their work on poverty alleviation and meeting the Sustainable Development Goals.
Canada and the United States also remain concerned about deteriorating security in Haiti, committed to increasing international support for the Haitian people, including through security and humanitarian assistance, enhanced support for the Haitian National Police, and by holding accountable those who undermine Haiti’s stability.
6.Invest in Our Collective Defense and Security: Our highest priority is to protect our citizens and our sovereign territory. We will invest in the modernization of the North American Aerospace Defense Command (NORAD), including specifically:
As part of a CAD $6.96 billion investment in surveillance system modernization, procuring and fielding two next generation Over-the-Horizon Radar (OTHR) systems covering the Arctic and Polar approaches, the first by 2028 to enhance early warning and domain awareness of North American approaches;
CAD $7.3 billion in investments in the northern forward operating locations to support 5th generation aircraft and mobility/refueling assets, which capabilities should be in place prior to the arrival of the F-35 aircraft, including airfield improvements to accommodate aircraft personnel, fuel, and munitions, to ensure NORAD’s ability to deter and defend against emerging threats to our air and sea space and compete with China and Russia for years to come.
The Prime Minister confirmed that the funding for these investments would come from Canada’s planned investments in defense infrastructure. These Canadian and U.S. efforts will bolster NORAD’s ability to detect threats earlier and more precisely and respond effectively. In the face of global threats, the Leaders acknowledged the importance of investment in modern, ready, and capable forces in line with their commitments to NATO under the 2014 Wales Summit Defence Investment Pledge. Such investments enable effective contributions to NATO, United Nations, and other global missions.
The Leaders recognized the need to work in close collaboration to combat all criminal activity in our combined jurisdiction. The Cross-Border Crime Forum is key to the safety of both countries, by facilitating cooperation to reduce violent extremism, child sex exploitation, cross-border smuggling, and firearms violence on both sides of the border.
Cyber threats can impact both Canadians and Americans, particularly when directed at cross-border systems on which we all rely.
To better protect against these threats, we will deepen our cooperation on driving improvements to the cybersecurity and resiliency of our critical infrastructure.
We will focus on two key sectors – pipelines and electricity – due to their criticality to our economies and their cross border nature. Further, we reiterate that in each of our countries, should an adversary choose to target critical infrastructure systems, we will both respond.
The opioid overdose crisis is having devastating health and economic consequences in our societies. We are united in our resolve to disrupt the illicit production and distribution of synthetic opioids like fentanyl and its precursor chemicals while augmenting our public health response.
Canada and the United States will expand multi-agency cooperation to improve intelligence sharing on cross-border fentanyl and precursor chemical trafficking to support interdictions and investigations, as part of our effort to bolster cooperation under U.S.-Canada Opioids Action Plan.
Canada will join the United States as it builds a global coalition against synthetic drugs, underscoring Canadian and U.S. leadership in response to this shared security and public health challenge. Canada and the United States reaffirm their commitment from the tenth North American Leaders’ Summit to work with Mexico trilaterally to defeat the synthetic opioid crisis.
7.Manage Migration Collaboratively: The Los Angeles Declaration on Migration and Protection enshrines our belief that irregular migration requires a regional approach centered on expanding legal pathways and humane border management and recognizes that we must address the underlying economic and security drivers of migration. Canada and the United States remain committed partners in advancing the principles of the Declaration.
As part of its commitment to these principles, Canada will welcome an additional 15,000 migrants on a humanitarian basis from the Western Hemisphere over the course of the year to continue expanding safe, regular pathways offered throughout the hemisphere as an alternative to irregular migration, with a path to economic opportunities
Additionally, Canadian and U.S. officials are now poised to implement an agreement to apply the terms of the Safe Third Country Agreement to asylum seekers who cross between ports of entry, which we anticipate will deter irregular migration at our shared border. We will remain in close coordination as we work to implement this new agreement.
Vanadium Reserves by Country
Originally posted on Investingnews.com
Vanadium reserves worldwide exceed 63 million MT, according to the US Geological Survey’s latest report on the metal.
The industrial metal occurs in deposits of phosphate rock, titaniferous magnetite and uraniferous sandstone and siltstone. Significant amounts of vanadium can also be found in bauxite and carboniferous materials like coal, crude oil, oil shale and tar sands. Generally vanadium is mined as a by-product, and for that reason it is difficult to accurately determine world reserves.
That said, estimates are available, and investors interested in vanadium may want to know which countries are thought to have the highest vanadium reserves. Read on to learn about the top three — interestingly, these countries are also the largest producers of vanadium.
1. China
Vanadium reserves: 9 million MT
China has the largest reserves of vanadium and produced 42,000 MT of the metal in 2016. The country also consumes the most vanadium and has the fastest-growing rate of vanadium consumption. Indeed, between 2006 and 2014, China’s vanadium consumption grew by 217 percent.
About 91 percent of vanadium produced in China is used to make steel. According to Roskill’s most recent Vanadium Quarterly Review, Chinese steel production will grow by 0.2 percent annually to 2025.
2. Russia
Vanadium reserves: 5 million MT
Russia, like China, extracts vanadium from slag produced by steel smelters or as a by-product of uranium mining. In 2016, Russia produced 16,000 MT of vanadium.
In April, Russia’s minister of industry and trade, Denis Manturov, told Metal Bulletin that the country’s government is planning to significantly increase the nation’s vanadium production. A spokesman for Manturov said it will achieve this expansion by paying subsidies to the country’s largest vanadium producers and providing tax breaks.
3. South Africa
Vanadium reserves: 3.5 million MT
Vanadium production in South Africa came to 12,000 MT last year, and was hindered by the closure of an iron and vanadium mine in 2015.
The mine closure forced a major vanadium product producer to suspend its operations, and left the country with just two major vanadium producers. Additionally, a private vanadium products producer in Austria that relied on imported vanadium from South Africa is expected to have reduced output moving forward.
Honorable mentions
Australia has 1.8 million MT of vanadium reserves and the US has 45,000 MT. The US Geological Survey notes that all of the US demand is met by imports from other countries, even though the US has enough domestic resources to supply most of its domestic needs. Data on the total amount of vanadium reserves in Brazil is not available, but the country produced an estimated 6,000 MT in 2016.
Vanadium Uses: Alloys and More
Originally posted on Investingnews.com
Curious about vanadium and vanadium uses? About 90 percent of vanadium is used to make steel, but the metal has other key applications as well.
Vanadium is a silvery-grey transition metal that’s currently produced in only four countries: China, Russia, South Africa and Brazil. The metal is not found on its own in nature, but can be separated from about 65 minerals, including carnotite, roscoelite, vanadinite, mottramite and patronite.
In terms of characteristics, vanadium has good structural strength and is ductile; in addition, it’s harder than most metals and steels, though due to its ductility some sources refer to it as soft. Vanadium is also resistant to corrosion, and remains stable against alkalis, along with sulfuric and hydrochloric acids. It oxidizes at about 660 degrees Celsius, becoming vanadium pentoxide, or V2O5.
Those qualities give the metal many uses, with the main vanadium use being in the production of alloys like ferrovanadium. That said, demand for vanadium from the battery sector is expected to grow, while vanadium pentoxide is used in ceramics and as a catalyst in certain chemical reactions. Read on for a more detailed overview of vanadium uses.
Vanadium uses: Alloys
As mentioned, most vanadium produced today is used to make alloys. In fact, current estimates indicate that about 90 percent of vanadium is used to make ferrovanadium, an alloy of iron and vanadium.
Those new to the vanadium space might reasonably wonder why so much of the metal is used for just one thing. To see why that’s the case, it’s important to understand what exactly ferrovanadium is. Put simply, ferrovanadium is one of many different ferroalloy types, and ferroalloys themselves are alloys of iron that have a high proportion of one or more other element. Other common ferroalloys include ferromagnesium, ferromanganese and ferrochromium.
Ferroalloys are important in the world today because they’re used in the production of steel and other alloys. Steel, of course, has myriad industrial applications; for instance, it’s used in infrastructure, such as roads and railways, as well as to make appliances and buildings. Another vanadium use is in ships, and it is also used in the aerospace industry and in pipelines, among many others.
Steel has different characteristics depending on what ferroalloy it’s made with, and ferrovanadium is particularly desirable in steelmaking. That’s because only a small amount of vanadium can significantly increase the strength, hardness and high temperature stability of steel.
Vanadium uses: Other
It’s clear that most of the metal goes toward the production of alloys, but there are other vanadium uses worth mentioning. For instance, as noted above, vanadium pentoxide is used in ceramics and as a catalyst in certain chemical reactions. Specifically, it’s used to make sulfuric acid and maleic anhydride, and is added to glass to make a green or blue tint.
Vanadium pentoxide is also used to permanently fix dyes to fabric, and can be mixed with gallium to form superconductive magnets.
On a different note, vanadium use is gaining traction in the energy space. Some believe that in the future the energy sector may become a big source of demand for vanadium, suggesting that as the world shifts toward using more sustainable power, vanadium-redox batteries (VRBs) will become increasingly widespread. VRBs are a type of flow battery designed to safely store and release large amounts of energy.
That said, VRBs have had a rocky start — though the first VRB was created in the 1980s, until 2006 companies weren’t allowed to produce them due to initial patent terms. Since then, work on VRBs has moved forward a little more quickly, with countries like Japan and Germany providing subsidies for companies working in the energy storage space.
Interest in VRBs has ramped up in particular over the last couple of years, although the technology has been overshadowed by developments in the lithium-ion battery industry. “Vanadium flow has yet to have its Tesla (NASDAQ:TSLA) moment, and therefore it still flies under the radar,” Simon Moores of Benchmark Mineral Intelligence told Bloomberg in January 2018.
VRBs last longer than lithium-ion batteries and can be charged and discharged over and over without any effect on performance. But they are intended for larger-scale applications, and some experts have suggested that VRB makers are vulnerable because they depend heavily on a niche metal.
Vanadium Market Forecast: Top Trends That Will Impact Vanadium in 2023
Originally posted on Investingnews.com
What’s ahead for the vanadium space? Read on to see what market watchers see for the vanadium forecast in 2023.
Heading into 2022, experts were expecting vanadium demand to increase on battery segment attention.
While most vanadium is used in China for steel applications, particularly the high-strength, low-alloy steel used to make construction rebar, the metal has a growing role in batteries that is attracting interest.
As the year comes to an end, what can investors expect for vanadium in 2023? Read on to learn more about vanadium’s performance in 2022, as well as what analysts and market watchers are forecasting for next year.
How did vanadium perform in 2022?
As mentioned, at the end of 2021, analysts were expecting vanadium demand to grow in 2022. But the first few months of the new year were shocking for metals markets as Russia's invasion of Ukraine brought volatility to the commodities sector.
All in all, the story of the vanadium industry in 2022 was almost exclusively determined by the Russia-Ukraine conflict, Willis Thomas and Connell Murphy of CRU Group told the Investing News Network (INN).
“Vanadium has not been affected to the same extent many other commodities have been in the wake of the conflict, but initial sentiment saw prices almost double in March due to the invasion,” they said. “This was due to the risk of losing the large supply of ferrovanadium into the European steel market through the Russian-owned Evraz.”
Sanctions hit Roman Abramovic, the biggest shareholder of Evraz, a major vanadium producer with assets in Russia and Czechia, leading to the resignation of the company's entire board.
“Due to Evraz trading vanadium oxide into the Czech Republic, where it is then processed into ferrovanadium, however, very little impact has been seen,” the CRU analysts said. “This has been confirmed by the market, with prices dropping since March and resting back at pre-conflict prices for the past four months.”
Commenting on the performance of vanadium in 2022, Jack Bedder of Project Blue also said that despite initial fears, there has been no meaningful disruption of vanadium flows as a result of the Russia-Ukraine conflict or sanctions.
“We expected more subdued demand from China ― and this proved to be the case,” he said. “(There were) no major surprises on the supply side ― although of course the Russia-Ukraine war was unexpected.”
In the first half of the year, the market also moved from worrying about supply risks due to the ongoing Russia-Ukraine war; instead, demand risks took over as China’s lockdowns impacted the sector.
“Demand in China has been lower than expected as a result of steel production curbs in China enforced due to the Winter Olympics, and extended COVID-19 shutdowns,” Bedder said back in June.
Lockdowns in China impacted demand, but not as much as some had anticipated during the first half.
“Lower steel production for rebar and some slowdowns in battery projects came as a result, with delays more than anything,” CRU’s Thomas told INN back in June.
Speaking about the battery sector, Thomas said there have been more investments for electrolyte capacity, so there will certainly be increased demand moving forward. “Vanadium battery demand expectations are notoriously difficult to meet, with issues of supply and for the battery projects themselves being common,” he said.
Vanadium is a key metal used in vanadium redox batteries (VRFBs), which are a viable option for large-scale storage because they are able to provide hundreds of megawatt hours at grid scale.
In contrast to the volatility of H1, a steady and subdued market persisted with much lower prices in the second half of the year.
“As is the case with all ferroalloys, demand from the steel sector was subdued owing to trends in China, principally its zero-COVID strategy and faltering property and construction sectors,” Bedder said. “Vanadium prices were impacted accordingly and fell back.”
But in the last quarter, activity picked up a little. “Rebar stocks are slowly being drawn down, although restocking is typical of this time of year with producers preparing for higher demand to come,” Bedder said.
While steel demand is down, aerospace demand for vanadium (and other metals) was a bright spot in Q4.
“In addition, more announcements of VRFB electrolyte capacity and planned installations continue to suggest that the technology is gathering momentum,” Bedder added.
What factors will move the vanadium market in 2023?
As 2023 kicks off, global demand for vanadium is once again expected to increase, according to CRU, as many industries ― steel, chemicals, aerospace, batteries and more ― are still seeing growth coming out of COVID-19.
“(There is) steady growth seen in chemicals, temporary growth seen in the steel sector and accelerating growth seen in both aero and batteries,” Thomas and Murphy said.
Similarly, Project Blue expects the overall market to grow at a CAGR of 2.7 percent over the 2021 to 2027 period, although it expects a 5 percent decline between 2021 and 2022.
“Over the five year horizon, demand in steel is set to increase, supported by high-strength, low-alloyed output and higher intensity of vanadium use,” Bedder said. Alloy demand growth is expected, but will be a slow recovery from COVID-19 impacts.
As a whole, the firm is not expecting demand to reach 2019 levels again until the late 2020s.
“Growth in chemicals demand will be moderate with no novel applications set to boost demand,” Bedder added.
Looking in particular at the steel sector, coming into 2023 Project Blue expects consumption to be roughly in line with 2021 levels. CRU expects to see growth in demand due to China exiting their zero-COVID policy eventually.
“This will temporarily result in an overall increase in vanadium demand from steel, which will see decreases in following years due to reduced steel production, though intensity gains will offset this to a degree,” Thomas and Murphy said. “Past 2023, however, due to China’s peak in steel production following 2020, the vanadium demand in the steel sector will see a slight decline.”
In terms of the battery segment, Project Blue expects to see continued commercialization of vanadium redox batteries in its base case. Its current projection is set at more than 35 percent per year growth to 2027, with demand to be driven by China.
“I think we will continue to see more announcements regarding planned installations, but the question is how big will these batteries be, and thus how much vanadium will they need?” Project Blue's Bedder explained to INN. “I also expect more commitment to build electrolyte capacity.”
CRU is also forecasting continued battery growth in China, with large-capacity additions being almost exclusively within this region.
“Demand for the battery segment, due to the low volume of capacity additions currently, is often annually set by one or two large projects being produced in China,” Thomas and Murphy said. “Going into 2023 we expect an increase in demand compared to 2022 as some large VRFB projects are expected to begin construction, as well as numerous smaller commercial-scale projects.”
According to the analysts, the introduction of low-cost, primary production continues to be the main challenge for vanadium production going into 2023. “Without this we will see demand destruction going forward,” they said. “This comes down to a balancing act of high enough prices to incentivize production, but not so high that niobium replacements are seen in steel and alternative long-duration energy storage is seen in the battery sector.”
In terms of prices, the analysts said they will increase steadily coming into 2023.
“This will be off the back of a large forecast of battery capacity with relatively steady demand seen in other sectors,” Thomas and Murphy said. “Supply will be able to partially meet this growth in demand, but not completely. This will see a slight increase from the plateau in pricing we are seeing towards the end of this year.”
All in all, in 2023, Project Blue’s outlook is for a balanced market unless there are unexpected supply-side shocks.
Japan, Canada in talks over collaboration in battery metals supply chain
Originally posted on mining.com
Canadian Prime Minister Justin Trudeau meeting with Japanese Prime Minister Kishida Fumio. Credit: The Canadian government’s Twitter page
Japan and Canada are discussing collaboration on building strong supply chains for battery metals, Japan’s industry minister, Yasutoshi Nishimura, said on Tuesday.
A public-private mission led by Japan’s Ministry of Economy, Trade and Industry (METI) and including 16 companies that work with batteries visited Canada last week for talks on building sustainable and resilient supply chains, he said.
“Canada has an abundance of battery metals and good market access to the United States,” Nishimura told a news conference.
“Canada is one of the most important countries for Japan when it comes to strengthening our supply chains of storage battery metals,” he said.
He declined to give details of the talks but said he would take various opportunities, including an upcoming G7 ministerial meeting, to reinforce cooperation with Canada.
As the chair of the Group of Seven nations (G7) this year, Japan will hold a ministerial meeting on climate, energy and environment in the city of Sapporo on April 15-16, ahead of a G7 summit in Hiroshima on May 19-21, to promote what it calls a realistic energy transition.
Batteries are key for Japan as it strives for carbon neutrality by 2050 as they are the most important technology in the electrification of automobiles and other devices and essential for boosting the adoption of renewable energy.
(By Yuka Obayashi; Editing by Robert Birsel)
Volkswagen to open its first North American EV battery plant in St. Thomas, Ont.
Originally posted cbc.ca
The Ontario government has announced a landmark deal that would bring a Volkswagen electric vehicle battery plant to St. Thomas along with new jobs in manufacturing.
The Ontario government has announced Volkswagen's first electric vehicle (EV) battery manufacturing plant will be built in St. Thomas, in the area of Talbot Line and Yarmouth Centre Road, near the city's airport.
The announcement, released Monday by the office of Vic Fedeli, the province's minister of economic development and trade, is the first public confirmation of the deal that has long been rumoured to be in the works.
The German auto giant said production is set to begin in 2027, calling it its first overseas "gigafactory" for battery cell manufacturing.
"I think that means a very large plant with a very large workforce," said St Thomas Mayor Joe Preston on Monday. "We're already clearing the land and getting things ready for as fast as a construction that we can do."
Preston said the plant will likely result in thousands of jobs, at the plant itself, along the supply chain and during the plant's construction, which is expected to take two to four years.
"In the long run, it's maybe more than we can dream. It's that good for St Thomas."
Flavio Volpe, head of the Automotive Parts Manufacturers' Association (APMA), said the new plant could result in "as many as 2,500 direct jobs created and up to 7,500 total jobs including indirect positions."
The province recently passed legislation that would allow the City of St. Thomas to annex 607 hectares of farmland from the Municipality of Central Elgin. The aim is to turn the parcel into industrial lands as part of what the province called an investment "mega-site."
Neighbours were upset by the legislation, which they said was done in secret and without their consultation.
Preston said it's typical for governments to keep real estate deals confidential until they're a fait accompli.
"Obviously any negotiation on property or land purchases needs to be done quietly. We certainly don't put up billboards about it," he said.
Volkswagen officials met with Premier Doug Ford on Feb 23, according to a provincial news release to seal the deal.
Batteries at the plant, once built, would be manufactured by PowerCo, a Volkswagen subsidiary in its first overseas battery manufacturing plant.
'A vote of confidence' for Ontario manufacturing
Brendan Sweeney is managing director of the Trillium Network for Advanced Manufacturing at Western University in London, Ont.
Sweeney said the new EV battery manufacturing plant "really is a vote of confidence in Ontario as a location for manufacturing and particularly southwestern Ontario, especially given that this is not an incumbent manufacturer making a new investment — this is a manufacturer that is quite new to Canada."
Sweeney said that by the time the plant is built, it will likely feed at least three other EV manufacturing plants in North America, including a yet-to-be-built EV plant in the Carolinas and a not-yet announced Audi plant, the location of which is still to be determined.
The Ram 1500 Revolution electric battery-powered pickup truck is displayed during the Stellantis keynote at the CES tech show Jan. 5 in Las Vegas. (John Locher/The Associated Press)
Given all that, Sweeney said, the plant could be as big, if not bigger, than the recently announced Stellantis EV battery plant in Windsor, which will employ 2,500 workers.
"This could be as big or bigger," he said. "It's very exciting."
Sweeney said the announcement means St. Thomas will likely see a large amount of growth in the form of new housing and more suppliers in order to serve the new plant.
He said part of the reason Volkswagen may have chosen the St. Thomas site is because of recent layoffs at the CAMI Assembly plant in Ingersoll and the Brose auto-parts manufacturing plant in London, as well as the recent closure of the Johnson Controls International plant in Tillsonburg.
"That, in an odd way, is likely one of the reasons this [Volkswagen EV] plant landed where it did. There's an available workforce that knows the auto industry very well.
"Those layoffs, in such a tight labour market, might have made Volkswagen say, 'Oh, there's people available,'" Sweeney said. "The quality of the workforce in the region is probably a big draw."
Provincial officials and company officials from Volkswagen were not immediately available for comment Monday.
Why Graphite Could be the Next Critical Mineral to Rise Steeply in Price
Originally posted on investorintel.com
Last July and August, I did a 6-part series called the “Dean’s List” which looked at North American explorers and miners that could benefit from government commitments to critical minerals, like the Inflation Reduction Act. This is especially important given how many of those materials are controlled, either through mining, ownership, or processing by China, which isn’t exactly “singing from the same hymn book” as the United States and many of its allies these days. Despite the current global tensions, it also comes down to math. There just isn’t enough of many of these commodities at present to meet the explosive growth being projected in the various segments of the “green” revolution.
One of the articles from last year’s series focused on graphite. I consider graphite to be one of the least publicized critical minerals, especially given this anode material is the single largest component (by weight) of lithium-ion batteries used in EVs (up to 48%) and energy storage technologies. On top of that, almost 80% of graphite mine production in 2021 came from China, while China makes almost 100% of the graphite anode material. Lastly, graphite also requires the largest production increase of any battery mineral in order to meet forecast demand.
Graphite Growth Requirements for Battery Demand Forecasts
Naturally one would expect that the price of graphite would be following a similar path as lithium, which was the second best-performing commodity in 2022, and despite coming off its recent highs, lithium is still triple its three-year average. However, it appears graphite is not following suit, despite all the table pounding about the growing supply/demand imbalance, at least not yet. Although there is a slight caveat to this comment as there are no standardized prices for natural graphite and there are no fungible spot or futures markets.
Flake Graphite Price – 2022
Graphite Prices
There are a couple of reasons that graphite prices haven’t taken off like lithium prices and I’ll try to provide some clarity on that. But as we go through this it will begin to appear that it’s only a matter of time before graphite sees its time to shine. Unless of course, you are a consumer of graphite, then you might want to start working on how you will explain to Elon Musk why dropping all the prices of his Tesla models might not be a great idea.
Historically, industrial uses of graphite have always been the main driver of demand. Currently, steelmaking is still the largest source of demand for graphite, but another interesting use, at least in the U.S., is over 7% of annual demand in 2021 came from brake linings. Graphite production for these well-established industrial uses has helped keep the market well supplied, reducing price volatility. In fact, weakness in steelmaking demand, along with a return to more normal graphite production post-COVID (remember that China didn’t open up their economy until well after the rest of the world) is the primary reason for graphite prices to have come off the boil.
Synthetic Graphite
The second reason graphite prices haven’t taken off (yet) has to do with the fact that anode manufacturers have an alternative, a synthetic graphite derived from petroleum coke (a carbon-rich, solid material that comes from oil refining). I could talk for hours about petcoke from my previous career but I think that would only be interesting to me and maybe one other person I know. As noted earlier, there are a lot of opaque corners in the world of graphite, but I was able to find the following comment: “Today, synthetic graphite anodes dominate in terms of market share, accounting for approximately 57 percent of the anode market” which is attributed to Benchmark Mineral Intelligence but it might be behind their paywall. I also found this quote in an article on the Benchmark Mineral website: “Synthetic graphite anode supply grew by more than 30% during 2022, and is anticipated to even surpass that in 2023, given a supply deficit developing for natural graphite feedstock.” It appears a lot of the growing anode demand for graphite is being supplied by fossil fuels and not natural graphite.
The Time for Natural Graphite
My interpretation of all this information is that it is simply a matter of when, not if, graphite prices start to rise as we have seen with lithium. The reasons are multi-faceted and thus it could make for a slow and steady rally or if all factors coalesce at one time it could become a parabolic rise.
As anode demand becomes a more material component of overall graphite demand it removes any previous flexibility from the supply side. If steel making or any other industrial use for graphite returns to historic levels it will quickly put pressure on the rapidly growing anode component of the demand equation. The first graph above shows how just anode growth alone will impact the overall demand outlook, let alone any other industrial uses. In the grand scheme of things, I don’t see steel consumption going to zero anytime soon freeing up that graphite supply.
The synthetic graphite derived from petroleum coke is going to be influenced by oil prices. If oil prices go back over $100/bbl that is going to have a material impact on synthetic graphite prices. Granted, oil prices could just as easily go back to the $50-$60/bbl range and partially offset the overall graphite price rise due to general demand growth, but my personal opinion is that we’ll see $100/bbl before we see $50/bbl (perhaps an article for another day).
But the biggest impact could come from the ESG side. “The production of synthetic graphite can be four times more carbon intensive than that of natural graphite”, another interesting fact attributable to Benchmark Mineral Intelligence that I could only find in this article. Kinda makes you think we can’t see the forest for the trees when you are making decisions like this in an effort to reduce carbon emissions. If battery makers demand low carbon anode material we could see a step change in prices, literally overnight, as natural graphite becomes the only option.
It would appear now might be a very good time to be developing a natural graphite deposit outside of China.
Leading Producers and Junior Miners Who Benefit as EV Boom Drives Cobalt Demand
Originally posted on investorintel.com
Cobalt is a key component of the lithium-ion (“Li-ion”) battery used in electronics and many types of electric vehicles (“EVs”). The EV boom is causing cobalt demand to surge higher.
In 2021, the International Energy Agency forecasted that cobalt demand could grow between 6x to 21x from 2020 to 2040 depending upon various scenarios. The main driver is the forecast surge in sales of EVs. Our Trend Investing forecast is for a 5.7x increase from 2020 to 2037. The reason it is lower than the IEA is due to the emergence of lithium-iron-phosphate (“LFP”) batteries which do not use cobalt. Nonetheless, a 5.7x increase is still very significant, especially when we consider that cobalt has the most difficult supply chain of all EV metals.
The cobalt market is currently quite balanced with a mild surplus as demand from electronics remains weak; however, Trend Investing forecasts that by 2027 onwards this will become a growing deficit, assuming EVs sales continue to grow strongly.
As a result of the above, the cobalt price (US$15.20/lb) and many of the cobalt miner’s stock prices are depressed allowing a more attractive entry point for long-term investors into the sector.
Trend Investing vs IEA demand forecast for EV metals
The leading cobalt miners in 2023
Glencore PLC (LSE: GLEN | OTC: GLCNF | HK: 805) is the leading global producer of cobalt with production of 43,800t in 2022. Most of this production came from the Democratic Republic of the Congo (“DRC”). In 2023, Glencore’s guidance is for the production of 38,000t of cobalt plus or minus 5,000t. On the plus end, this would lead to the production of 43,000t in 2023 or slightly lower than the production in 2022.
From the Mutanda and Katanga mines in the DRC, Glencore has the potential to increase cobalt supply to approximately 57,000 tonnes-per-annum (“tpa”) if market conditions suit. They also produce about 3,000tpa from their Murrin Murrin operation in Australia. Given total global cobalt supply was approximately 200,000t in 2022 it means that Glencore is a critical player in the market and can influence pricing by altering its supply. Glencore has agreed to supply General Motors Co. (NYSE: GM) with cobalt from its Murrin Murrin operation in Australia.
CMOC Group Limited (HKSE: 3993 | SHE: 603993 | OTC: CMCLF) (formerly China Molybdenum) is the second largest global producer of cobalt producing 18,501t in 2021 from their Tenke Fungurume mine in the DRC. For the first 3 quarters of 2022, CMOC’s cobalt production stood at 15,300t. However, 2022 has seen a dispute with the DRC’s Gecamines which has resulted in exports being suspended since July 2022. On a more positive note, CMOC announced in January 2023 that mining from their other DRC mine (KFM copper-cobalt mine) had begun.
Zhejiang Huayou Cobalt (SHA: 603799) is the third largest global cobalt producer at around 20,000tpa. They also rely on mines in the DRC. Huayou Cobalt agreed to supply cobalt to Tesla, Inc. (NASDAQ: TSLA) from July 1, 2022 until 2025.
Other cobalt producers
Other global cobalt producers include Eurasian Natural Resources Corp. (private), GEM Co Ltd. (SHE: 002340), Jinchuan Group International Resources (HK: 2362), Shalina Resources subsidiary Chemaf, and several other smaller cobalt producers such as Vale SA (NYSE: VALE), Norilsk Nickel, Sumitomo Metal Mining Co. (TYO: 5713), Sherritt International Corporation (TSX: S | OTC: SHERF), Korea Resources Corporation, Umicore SA (Brussels: UMI | OTC: UMICY), and Nickel 28 Capital Corp. (TSXV: NKL).
Junior cobalt miners
The most advanced junior cobalt miners are Jervois Global Limited (ASX: JRV | TSXV: JRV | OTCQX: JRVMF) and Electra Battery Materials Corporation (NASDAQ: ELBM | TSXV: ELBM). Jervois aims to commence commercial concentrate production by the end of Q1/2023 from their Idaho Cobalt Operations in the USA. Jervois also now owns the Kokkola producing refinery in Finland and plans to have a second refinery in Brazil up and running by the end of Q1/2024.
Electra targets to have their Ontario cobalt refinery (North America’s first cobalt sulphate refinery) operational with ore feed from Glencore by the Spring of 2023. They are also working on battery recycling and own the Iron Creek Cobalt-Copper Project in Idaho, USA.
Closing remarks
The cobalt market is quite small and is dominated by supply from the DRC, making it a rather risky market from a supply chain point of view. The current slowdown in electronics (smartphones, PCs) sales has temporarily hurt cobalt demand. Looking ahead this should recover and as electric car sales grow the demand for cobalt rises dramatically. It is looking like a fairly tight market from now to 2027, but from 2027 onwards the world will need multiple new junior cobalt miners to meet supply.
Monsters of Rock: Can we count on another nickel rally in 2023?
Originally posted on stockhead.com
Nickel prices have dropped more than 20% this year
CBA mining analyst Vivek Dhar says higher supply from Indonesia and China’s economic growth targets could count against another bull rally this year
Miners suffer bloodbath in miserable trading day
The nickel market has been one of the most fascinating in battery metals over the past year (and really it always is).
Small but prominent and with a base of Australian producers and explorers dating back to its discovery in Kambalda in the 1960s, the industry is important to the history of the Australian equity market (the modern exchange can be traced back to the wild speculation around the Poseidon Bubble) and to its future.
It saw massive gains last year, rising around 50% to its highest year-end price in 15 years at more than US$30,000/t.
But the heat has come off so far in 2023, with prices stalling, down over 23% to US$23,974/t yesterday.
Can we expect a rebound? On the plus side demand continues to rise from the energy transition. CBA mining expert Vivek Dhar said in a note today 11% of nickel demand is now linked to that dominating investment trend. Part of the cathode of NCM-chemistry lithium ion batteries, it’s a component that helps make an EV battery more energy dense – ergo, longer driving range.
That comes off a low base, with the metal traditionally used in the stainless steel production process.
As EV use and stationary storage rollouts rise, will we see prices return to growth territory?
Some developments in South East Asia mean a return to last year’s bull run (admittedly propelled by volatility following a short squeeze and liquidity crisis with price-setter the London Metals Exchange) could be less likely in 2023.
Indonesia ramping up class 1 supply
Much of this year’s price drop has been down to macroeconomic issues, a rising US dollar and fears that while pent up demand from China’s emergence from Covid will bolster demand in the first half of 2023, a lower than expected 5% economic growth target will dull hopes of a second-half boom.
China, according to Dhar, provides 55-60% of nickel demand.
At the same time, while there will be a “15-20%” growth in class 1 nickel demand in 2023, Indonesia’s investment in ramping up supply overall and in the battery market could eat into deficits.
“Class II nickel dominates current nickel supply, but Indonesia has led the recent charge to convert Class II nickel to Class I nickel,” Dhar said.
“Indonesia’s investment in both Class II and Class I nickel supply is likely going to result in a heavy surplus in Class II markets and a narrowing deficit in Class I markets.
“The Class I nickel market deficit forecast for this year mostly reflects the 15‑20% growth in Class I nickel demand.”
Battery chemistry in vehicles will also be a major focus for nickel producers, with cheaper nickel-free battery chemistries increasingly adopted in China.
“A notable trend that Class I nickel markets will have to contend with in coming years is an increasing share of the low cost and nickel-free Lithium Ferro Phosphate (LFP) battery chemistry,” Dhar said. “LFP batteries have lower energy density than those that contain nickel, but the energy density is sufficient for low-cost EVs.”
It is worth noting current prices offer good margins to most producers and remain well above the average of around US$18,500/t seen in 2021 and long term lows of US$7600/t in early 2016.
Nickel miners share prices today:
A day you’d rather forget about
Materials stocks were down around 1.8% at lunchtime.
They closed the day off 3.13%, with energy stocks off 3.36%, as the ASX 200 endured a bloodbath.
There was little to write home about among the large and mid caps, outside what was a slightly green run for gold miners as prices rose overnight.
They will be biting their nails nervously ahead of the jobs report due out of the US of A tonight.
Stronger-than-expected employment numbers would heighten risks of a larger, more severe and longer rate hike cycle, which would harm demand for bullion.
Not so Monstars share prices today
We stand ready to support renewable energy, says Standard Bank
Originally posted on miningweekly.com
Standard Bank says it is at the ready to support renewable energy and infrastructure projects.
The bank, which this week delivered record 37%-higher headline 2022 earnings of R34.2-billion and paid the highest dividend in its 161-year history, expresses the view that meaningful structural reform and an improvement in the electricity supply in South Africa could lift confidence and accelerate economic growth, job creation and social upliftment.
The bank, headed by CEO Sim Tshabalala, says its 2023 balance sheet growth – particularly from renewables and infrastructure, combined with higher average interest rates – should support low-teen net interest income growth year on year.
The Gauteng provincial government reports that at least 1 500 ha of the land that precious and green metals mining company Sibanye-Stillwater has donated to it are earmarked for the development of a solar power farm to ease Gauteng’s energy crisis.
The process of allocating land parcels to independent power producers will be completed in March, Business Day quotes Gauteng Finance MEC Jacob Mamabolo as saying.
The solar farm will reportedly benefit from R1.2-billion in seed capital set aside by the provincial government to fund projects that are shovel-ready and can contribute to ending loadshedding in the province.
On the horizon is engagement with local authorities to receive the solar power generated.
Renewables are described by Scatec sub-Saharan Africa VP Jan Fourie as presenting the optimal solution to South Africa’s energy woes, with the urgency of the situation calling for increased private sector investment to fast-track the Department of Mineral and Energy Resources' Integrated Resource Plan and accelerate economic recovery.
After reaching financial close in July 2022, Scatec started construction of the three Kenhardt projects totalling 540 MW solar and 225 MW/1 140 MWh battery storage. Kenhardt is a small town in the Northern Cape, about 120 km from Upington.
Fourie sees widespread investment in renewables being driven by strong tailwinds and offering businesses far more than a safety net against loadshedding.
"Embracing renewables is a key component of many successful businesses' corporate social responsibility strategies, and tends to herald strengthened stakeholder relations, including with the local community, customers and employees," he says, adding that new energy wheeling legislation and power purchase agreements are alleviating energy-mix pressures.
Harnessing South Africa’s abundant sun and wind resources could, he emphasises, hold the key to future-proofing this country’s energy sector.
Fourie urges the private sector to shift gears in staking their claim in a cleaner, more sustainable future through significant renewables buy-in.
South Africa’s mining industry is leading the move by the private sector into renewables. The mining industry has 89 energy projects by 29 companies for 6.5 GW of renewable electricity at a project value exceeding R100-billion, Minerals Council South Africa states in its latest Facts and Figures Pocketbook 2022.
Renewable energy’s big plus is that its sunlight and wind sources are constantly being replenished.
Global investments in energy transition technologies – including energy efficiency technologies – reached $1.3-trillion in 2022, a report published by the International Renewable Energy Agency (Irena) and Climate Policy Initiative shows.
This figure was a new record high, up 19% from 2021 investment levels and 50% higher compared with investment levels before the pandemic in 2019.
Although global investments in renewable energy reached a record high of $500-billion in 2022, this figure still represents less than 40% of the average investments needed each year between 2021 and 2030, according to Irena’s 1.5 ºC scenario.
Investments are also not on track to achieve the goals set under the 2030 Agenda for Sustainable Development, the report notes.
Quoting independent sources such as Climate Action Tracker, Anglo American CEO Duncan Wanblad last month warned that the world is on a trajectory to reach 2.7 °C of warming above pre-industrial levels, a long way mathematically from the 1.5 °C that is required by the Paris Agreement.
Global warming and its accompanying negative effects on the environment have been the motivating force behind the move to renewable sources of energy.