MINEX Forum

Month: July 2024

  • Zinnwald Lithium’s Share Prices Surge Following Resource Estimate Update

    Zinnwald Lithium’s Share Prices Surge Following Resource Estimate Update

    Germany-focused Zinnwald Lithium (LON: ZNWD) experienced a significant increase in its shares on Friday after announcing a 50% boost in the mineral resource estimate for its flagship project in Saxony. The lithium producer, which had initially forecasted an annual production of 12,000 tonnes, now expects to produce 16,000 to 18,000 tonnes of battery-grade lithium per annum.

    This update positions Zinnwald as the second largest hard rock lithium project in the European Union and the third largest in Europe by resource size and contained lithium. Europe’s largest hard rock lithium deposit is the Cinovec lithium project in the Czech Republic, owned by European Metals (ASX, LON: EMH) and state-controlled utility CEZ.

    In response to the updated assessment, Zinnwald announced plans to conduct a pre-feasibility study (PFS) to enhance the expanded project and explore potential for a second production phase. This study will also focus on minimizing environmental and community impact while evaluating technical test work and trade-offs. Chief executive officer Anton du Plessis stated that the PFS is expected to be completed in the first quarter of 2025. “We have already completed many workstreams, with several more underway or nearing completion,” du Plessis said. “Key upcoming milestones include ongoing metallurgical testwork, detailed mine planning, permitting, and commercial activities.”

    While Zinnwald is in a secure financial position, it is seeking support from the German federal and state governmentsafter receiving an invitation in June to apply for grant funding. If successful, 70% of the funding will come from the federal government, with the remaining 30% from the State of Saxony, which has already shown support for the battery-chain project.

    Located approximately 35km from Dresden, in the heart of Europe’s chemical and car industries, the project is expected to produce battery-grade lithium carbonate, lithium hydroxide, and lithium fluoride (Li2CO3, LiOH, LiF) or a combination of these products.

    Despite a dramatic drop in lithium prices over the past 18 months due to slowing growth in electric vehicle sales and market oversupply, Zinnwald Lithium’s stock rose nearly 5% following the announcement, trading at 8.2p near closing time. This increase leaves the company with a market capitalization of £38.84 million ($50.4m).

  • Chromium’s Vital Role and Growing Demand in Global Industries

    Chromium’s Vital Role and Growing Demand in Global Industries

    Since its discovery by French chemist Nicolas-Louis Vauquelin, chromium has become one of the world’s top five most extensively mined metals, with production reaching 41 million tons in 2023. Chromium is essential for producing stainless steel and is used across a variety of industries, including military, aerospace, transportation, and medical equipment.

    With over 30 years of experience in the chrome ore mining industry, I have witnessed a significant rise in the demand for chromium and ferrochrome. The top chromium-producing countries are South Africa, Turkey, Kazakhstan, India, and Finland, with Albania emerging as a notable producer of high-grade chrome ore and holding Europe’s largest reserves.

    Chromium’s properties, such as corrosion resistance and high-temperature resistance, make it irreplaceable with no viable substitutes. It is becoming increasingly important in the green energy sector, particularly in the manufacturing of solar panels, electrochemical cells, and electrolyzers for hydrogen production. Chromium is also used in rechargeable batteries, catalytic converters, and water treatment processes.

    However, extensive mining of high-grade chrome bodies has increased the cost of extraction, leading to a surge in chrome ore prices due to a projected decline in production. Informal surveys with global mining companies confirm this scarcity, suggesting potential challenges for industries reliant on this metal.

    The demand for stainless steel continues to grow, driven by economic growth, urbanization, and advancements in production processes. The chemical industry also plays a crucial role in chromium demand, particularly in specialty chemicals and eco-friendly practices.

    Investing in chromium involves both risks and opportunities. Supply chain disruptions, geopolitical tensions, and emerging environmental regulations are significant factors to consider. Technological advancements in AI and automation are transforming the mining industry, enhancing sustainability, efficiency, and productivity.

  • China Implements Stricter Rare Earth Regulations to Safeguard National Security

    China Implements Stricter Rare Earth Regulations to Safeguard National Security

    China has introduced a new set of rare earth regulations aimed at protecting its supplies for national security. The regulations, issued by the State Council on Saturday, establish stringent rules on the mining, smelting, and trade of these critical materials. Rare earth elements are essential in producing a range of products, from magnets in electric vehicles to consumer electronics.

    The State Council’s regulations state that rare earth resources belong to the state, and the government will oversee the industry’s development. China has become the world’s dominant producer of rare earths, accounting for nearly 90% of global refined output.

    The EU, recognizing the industrial significance of rare earths, enacted a law in May setting ambitious 2030 targets for domestic production of minerals crucial to the green transition. This includes rare earths due to their use in permanent magnets that power motors in electric vehicles (EVs) and wind energy. EU demand is projected to increase sixfold by 2030 and sevenfold by 2050.

    The new Chinese regulations, effective from October 1, will see the State Council establish a rare earth product traceability information system. Enterprises involved in rare earth mining, smelting, separation, and export must create a product flow record system, “truthfully” record the flow, and enter it into the traceability system.

    Last year, China introduced restrictions on exports of germanium and gallium, widely used in the chip-making sector, citing the need to protect national security. The country also banned the export of technology for making rare earth magnets and the technology for extracting and separating rare earths.

    These measures have heightened concerns that restrictions on rare earth supplies could escalate tensions with the West, particularly the United States, which accuses China of economic coercion. Beijing denies these allegations.

    China’s rare earth regulations coincide with the EU’s move to impose provisional tariffs on Chinese EVs starting July 4, aiming to protect the 27-state bloc from what it claims is a surge of EVs produced with unfair state subsidies. Both sides have expressed intentions to discuss the proposed tariffs.

  • Conflict in Ukraine Drives Surge in Copper Demand

    Conflict in Ukraine Drives Surge in Copper Demand

    The ongoing conflict in Ukraine has led to a significant increase in demand for copper, according to sources cited by Fastmarkets. Copper is a critical component in munitions, with bullet cartridge casings made from brass, an alloy of copper and zinc.

    In the latest development of the conflict, which has persisted since 2022, a series of Russian missile strikes targeted cities across Ukraine on Monday, including a children’s hospital in Kyiv, resulting in at least 22 deaths and 68 injuries.

    “Every day, the war consumes many tonnes of copper. At the end of the war, there will be a new mine in Ukraine with all that copper scrap,” a producer told Fastmarkets, noting the increasing demand for brass.

    A NATO 155-millimeter artillery shell contains 0.5 kg of copper, with Ukrainian forces reportedly firing up to 7,000 such shells daily, according to the European Defence Agency (EDA). The Royal United Services Institute (RUSI), a UK defense think tank, stated that Russia’s equivalent is the 152 mm shell, with Russia producing 4.5 million shells annually—a 150% increase in output over the past year, as noted by consultancy Bain & Company.

    Bloomberg estimates that before the war, the US produced an average of 14,400 shells per month. However, DefenceOne, a specialist defense industry publication, reported that the country aims to ramp up production to 100,000 monthly shells by the end of 2025.

    “War is good for the metals business,” said Fastmarkets analyst Andy Farida, suggesting that the ongoing conflict in Ukraine is partly responsible for the resilience of copper prices compared to other base metals.

    The military’s demand for copper has garnered significant attention in recent years. Mining magnate Robert Friedland recently told Bloomberg that despite China’s weak real estate market, military demand in the country remains high. “Europe is rearming; Japan is rearming. The United States military is worried about a shortage of 155 mm howitzer shells. Where do you think the world’s army is made out of when all the shooting goes on?” Friedland commented. “If someone is pointing a gun at you, you need that copper to shoot back.”

  • EBRD Provides €30 Million Loan to Serbia for Renewable Heat Generation

    EBRD Provides €30 Million Loan to Serbia for Renewable Heat Generation

    The European Bank for Reconstruction and Development (EBRD) is providing a €30 million ($32.5 million) loan to Serbia for investments in renewable heat generation, the lender announced. These investments aim to modernize district heating companies in 10 Serbian cities. The project includes the refurbishment of heat substations and district heating networks, along with other energy-efficiency measures, the EBRD stated on Tuesday.

    “Currently, Serbia’s district heating systems rely heavily on fossil fuels and are notably energy inefficient. This project, the first of its kind in south-eastern Europe, aims to address these challenges by providing significant environmental benefits and boosting energy security,” the EBRD said.

    The project will benefit from up to €12 million of donor funds mobilized by the EBRD from the Swiss State Secretariat for Economic Affairs, the European Union, and Austria’s government.

    The implementation will be carried out by Serbia’s mining and energy ministry in cooperation with the participating municipalities and district heating companies.

    The total value of the project, “Renewable energy sources in district heating systems in Serbia – Phase 1,” amounts to €40.5 million, including €10.5 million in grants, according to the government.

  • Gabriel Resources Seeks Annulment of ICSID Decision on Rosia Montana Project

    Gabriel Resources Seeks Annulment of ICSID Decision on Rosia Montana Project

    Canadian mining company Gabriel Resources has filed a claim seeking the annulment of a decision by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in March, which dismissed the company’s claims against Romania for compensation regarding its unsuccessful Rosia Montana gold mining project. Gabriel Resources has also requested a stay of enforcement for the court costs awarded to Romania, amounting to approximately $10 million (9.23 million euros), the mining company announced on Monday.

    “The Arbitral Decision must be annulled due to fatal defects in the constitution of the ICSID tribunal given that two of the arbitrators who rendered the majority decision […] lacked the qualities of independence and impartiality that the ICSID Convention requires, and failed to adequately disclose relationships between themselves and with the parties involved in the case, including Romania’s counsel,” the company stated.

    Gabriel Resources argues that the arbitrators’ decision is flawed due to excesses of power during the litigation, including disregard for applicable law, departure from procedural rules, and failure to state reasons for several decisions made during the arbitration. The litigation was initiated in 2015 by Toronto Stock Exchange-listed Gabriel Resources, whose main business has been the exploration and development of the Rosia Montana project in Romania, a major undeveloped gold deposit.

    Gabriel Resources claimed around $6.7 billion in damages from Romania, including interest, as noted by Leaua Damcali Deaconu Paunescu, the Romanian legal team representing Romania in the case, in a March press release.

    Gabriel Resources has held a license for the Rosia Montana gold and silver mine in Romania’s Alba county since 2000. The project was blocked by the Romanian state in 2014, following nationwide protests against its development that began in the fall of 2013 and lasted several months. The project faced significant opposition from environmentalists, local residents, and various civil groups, primarily due to concerns over the use of cyanide in the mining process and the displacement of local communities.

  • Казгеология передала активы Бесшокы компании Ulmus Besshoky

    Казгеология передала активы Бесшокы компании Ulmus Besshoky

    АО “НГК Казгеология,” полностью принадлежащее государственному холдингу “Тау-Кен Самрук,” передало свои активы Бесшокы компании Ulmus Besshoky, сообщает inbusiness.kz. Участок с ценными полезными ископаемыми расположен в Карагандинской области. С 2015 по 2021 год в разработку месторождения было вложено около 1,4 млрд тенге.

    Казгеология получила лицензию на разведку Бесшокы весной 2015 года. Летом того же года Ulmus Besshokyвошла в инвестиционный проект и получила 75% прав и обязанностей по лицензии на геологоразведочные работы на этом участке. Весной 2022 года контракт на геологические изыскания был продлен еще на три года.

    Наибольшей долей в Ulmus Besshoky (более 36%) владеет Бай Тау Минералс, принадлежащая зарубежной компании GRA Investment Ltd, которой руководит сербский бизнесмен Владимир Делич. В 2023 году компании выдали кредит в размере восьми миллиардов тенге для разработки ценного участка недр.

    К концу 2023 года право на пользование ¼ месторождения принадлежало частной компании Besshoky, являющейся 100-процентной дочерней структурой Казгеологии. В декабре 2023 года национальная компания и Ulmus Besshoky подписали договор на продажу оставшейся части акций, в результате чего частная организация полностью перешла под контроль покупателя.

    Ulmus Besshoky обязалась выплатить 4 213 808 тыс. тенге, из которых аванс в размере 918 600 тыс. был внесен в конце 2023 года. Оставшуюся сумму, порядка 3 295 208 тыс. тенге, планируется перевести после перерегистрации предприятия.

    Сложное финансовое положение Казгеологии могло стать причиной продажи прав на недропользование. В 2022 и 2023 годах чистый убыток национальной компании составлял 668 403 тыс. и 446 103 тыс. тенге соответственно.

  • Kazgeology Transfers Besshoky Assets to Ulmus Besshoky

    Kazgeology Transfers Besshoky Assets to Ulmus Besshoky

    АО “NGK Kazgeology,” fully owned by the state holding “Tau-Ken Samruk,” has transferred its Besshoky assets to Ulmus Besshoky, reports inbusiness.kz. The site with valuable mineral resources is located in the Karaganda region. From 2015 to 2021, approximately 1.4 billion tenge were invested in the development of the deposit.

    Kazgeology obtained a license for the exploration of Besshoky in the spring of 2015. In the summer of that year, Ulmus Besshoky joined the investment project and acquired 75% of the rights and obligations under the geological exploration license for this site. In the spring of 2022, the geological survey contract was extended for another three years.

    The largest share in Ulmus Besshoky (over 36%) is owned by Bai Tau Minerals, which belongs to the foreign company GRA Investment Ltd, managed by Serbian businessman Vladimir Delic. In 2023, the company received a loan of eight billion tenge to fund the development of the valuable subsoil site.

    By the end of 2023, the right to use ¼ of the deposit belonged to the private company Besshoky, a 100% subsidiary of Kazgeology. In December 2023, the national company and Ulmus Besshoky signed an agreement to sell the remaining quarter of the shares, transferring full control to the private organization.

    Ulmus Besshoky committed to paying 4,213,808 thousand tenge, of which an advance payment of 918,600 thousand was made at the end of 2023. The remaining amount, approximately 3,295,208 thousand tenge, is to be transferred after the enterprise re-registration.

    Kazgeology’s difficult financial situation may have led to the sale of the subsoil usage rights. In 2022 and 2023, the national company’s net losses amounted to 668,403 thousand and 446,103 thousand tenge, respectively.

  • В Казахстане объявили изменения в налоговых ставках на добычу урана с 2025 года

    В Казахстане объявили изменения в налоговых ставках на добычу урана с 2025 года

    В 2025 году в Республике Казахстан изменится ставка налога на добычу полезных ископаемых (НДПИ) на радиоактивные металлы, передаёт пресс-центр атомной компании «Казатомпром». С первого дня следующего года налог на добычу ценных ископаемых составит 9%. А с 2026 года введут дифференцированный налог, при котором ставка НДПИ сможет варьироваться от 4% до 18%.

    Ставка будет зависеть от реального количества добытого урана по каждому конкретному контракту, а также от стоимости концентрата природного урана. Если объём извлечённого за год металла составит до 500 тонн, то предприятие будет облагаться НДПИ в 4%. При ежегодном уровне добычи до 1 000 тонн ставка поднимется до 6%, до 2 000 тонн — до 9%, до 3 000 тонн — до 12%, до 4 000 тонн — до 15%. В случае, если за год недропользователи добыли более 4 000 тонн урана, НДПИ достигнет 18%.

    Нужно учитывать, что при превышении определённой средневзвешенной цены на уран ставка будет расти. Например, если средняя стоимость окажется свыше $70 за фунт концентрата, размер налога увеличится на 0,5%. Если цена преодолеет барьер в $110 за фунт, то к существующей ставке прибавят ещё 2,5%.

    До конца 2024 года для урановых компаний останется прежний порядок налогообложения. Напомним, с 1 января прошлого года НДПИ равен 6%. Руководство «Казатомпрома» ожидает, что в 2026 году все дочерние компании и совместные предприятия нацкомпании смогут рассчитывать на дифференцированный подход к расчёту налога.

  • Changes in Uranium Mining Tax Rates Announced for 2025

    Changes in Uranium Mining Tax Rates Announced for 2025

    In 2025, the Republic of Kazakhstan will see a change in the mineral extraction tax (MET) rate on radioactive metals, according to the press center of the atomic company Kazatomprom. Starting from the first day of the new year, the tax on the extraction of valuable minerals will be set at 9%. From 2026, a differentiated tax will be introduced, allowing the MET rate to vary between 4% and 18%.

    The rate will depend on the actual amount of uranium extracted under each specific contract, as well as the cost of natural uranium concentrate. If the annual extracted volume is up to 500 tons, the enterprise will be taxed at 4%. For annual production levels up to 1,000 tons, the rate will rise to 6%, up to 2,000 tons — 9%, up to 3,000 tons — 12%, and up to 4,000 tons — 15%. If more than 4,000 tons of uranium is mined in a year, the MET will reach 18%.

    It is important to note that if a certain weighted average price of uranium is exceeded, the tax rate will increase. For example, if the average cost exceeds $70 per pound of concentrate, the tax rate will increase by 0.5%. If the price surpasses $110 per pound, an additional 2.5% will be added to the existing rate.

    Until the end of 2024, uranium companies will continue with the current taxation procedure. Since January 1 of last year, the MET has been 6%. The management of Kazatomprom expects that in 2026, all subsidiaries and joint ventures of the national company will be able to benefit from the differentiated tax calculation approach.