Thursday 19th July 2018

Resource Clips


Posts tagged ‘Germany’

Lithium in abundance, but…

April 25th, 2018

Bolivia’s huge resources face huge challenges, Simon Moores points out

by Greg Klein

Bolivia’s huge resources face huge challenges, Simon Moores points out

Estimates vary widely but attribute enormous lithium potential to Bolivia’s Salar de Uyuni.

 

It’s a testament to lithium market expectations that companies will compete with each other to do business in Bolivia. When news broke that the country wanted help to develop its fabled Salar de Uyuni, several firms showed willingness to overlook a history of investment confiscation. So has one of the world’s worst mining jurisdictions become serious about opening what just might be the world’s largest lithium resources?

Yes, an April 21 government announcement would seem to indicate. Media reports say the German firm ACI Systems GmbH had been selected out of five applicants from China and one each from Canada and Russia to team up with the state-owned Yacimientos de Litio Bolivianos, which would hold the lion’s share of a 51%/49% joint venture. The actual agreement has yet to be signed.

Bolivia’s huge resources face huge challenges, Simon Moores points out

After winning power in 2006, Bolivian President Evo Morales gained a reputation for nationalizing resource and infrastructure assets, sometimes without compensation. State-run and co-operative mining operations, meanwhile, have suffered problems ranging from inefficiency to
exploitive and even deadly working conditions.

Clearly there’s an incentive for Bolivia to change its approach to mining. According to la Razón, the deal calls for $900 million from YLB (all figures in U.S. dollars) and $1.3 billion plus expertise from ACI to develop facilities that would process lithium and manufacture batteries and cathodes, primarily for the European electric vehicle market.

Expected to come online within 18 months, the industry might eventually provide Bolivia with a forecasted $1.2 billion in annual revenues, 1,200 direct jobs and thousands of indirect jobs.

It takes enormous mineral potential to rationalize such optimism. While estimates can vary wildly, they all rate Bolivia highly. Uyuni has “likely the largest accumulation of lithium in the world,” according to the U.S. Geological Survey, citing a 2013 estimate of nine million tonnes at an average concentration of about 320 ppm. Another USGS report estimates a 2017 global total of 53 million tonnes, with 9.8 million tonnes in Argentina, nine million in Bolivia, 8.4 million in Chile, seven million in China, five million in Australia and 1.9 million in Canada. Comparing Bolivia with its Lithium Triangle neighbours, Industrial Minerals credits Uyuni with three times the resources of Chile’s Salar de Atacama and nearly 20 times that of Argentina’s Salar del Hombre Muerto. Some media reports say Bolivia holds as much as a quarter of global supply.

Resources mean little and economic reserves mean everything.

“There is no doubt that Bolivia has a huge lithium resource with Uyuni, most probably the biggest in the world,” notes Simon Moores, managing director of Benchmark Mineral Intelligence. “But resources mean little and economic reserves mean everything.

“In these economic terms—extracting the lithium in a usable form for the battery industry at a reasonable cost—Chile and Argentina are light years ahead of Bolivia,” he tells ResourceClips.com.

The country has been conducting pilot scale work, but nothing comparable to its neighbours. In contrast to Chile’s Atacama, Moores says, Uyuni’s high magnesium content and lower evaporation rate present processing challenges. “Most likely new or adapted processing methods will have to be employed, which adds a further layer of complexity.”

As for political risk, “the jury is out on any partnership in Bolivia,” he stresses. “In 2009, when this story first broke, there were a number of high-profile partners involved. Every partnership to date has failed. This is not to say any present or future partnership will share the same fate, but you are not only dealing with a challenging resource—despite its size—you are dealing with Bolivia and all the political problems that come with that. The risk is huge.

“Then when you are in production, the risk is even bigger. You just have to see the problems SQM has had with the Chilean government at a time of high prices and high demand. And they have been operating since the mid-90s.”

If Albemarle, SQM, Ganfeng, Tianqi, FMC get involved then you will have to stand up and take notice. Until that point, Bolivia will always be a lithium outside shot.

As for other companies entering Bolivia, Moores sees the possibility of “a handful of explorers becoming active and maybe one or two ‘industrial’ partners. But the key thing we always look for at Benchmark Mineral Intelligence is partners with lithium processing experience. If Albemarle, SQM, Ganfeng, Tianqi, FMC get involved then you will have to stand up and take notice. Until that point, Bolivia will always be a lithium outside shot.”

He regards Bolivia’s infrastructure as another significant challenge, but not the country’s worst. “If big mining groups can make this happen in Africa, they can make it happen in Bolivia. The biggest focus should be economic extraction and the long-term viability of Uyuni. This is the biggest hurdle.”

Simon Moores speaks at the International Mining Investment Conference in Vancouver on May 15, the first day of the two-day event. For a 25% admission discount click here and enter the code RESOURCECLIPS.

On May 16 Moores presents the Vancouver stop of the Benchmark World Tour 2018. Click here for the complete tour schedule and free registration.

Matthew Vickery writes about a Bavarian city built with local stone bearing millions of tiny asteroid-created diamonds

December 27th, 2017

…Read more

A fairy tale town that’s—no fairy tale, this—made of diamonds

November 24th, 2017

by Greg Klein | November 24, 2017

Sitting amid a 72,000-tonne supply and featuring a 5,000-carat diamond church, this Bavarian city might strain the imagination of even the most feverish newsletter writer. But Nordlingen’s diamonds are real, albeit too small to have economic value. Matthew Vickery described his visit in a BBC report this week.

A fairy tale town that’s—no fairy tale, this—made of diamonds

The picture book town seen from the
tower of St. George’s 5,000-carat church.

The ninth-century town was built largely of suevite, in which the locally quarried variety comes “embedded with millions of tiny diamonds, in a concentration seen nowhere else in the world,” he states. As a result, the town’s buildings, city walls and other structures display a “shimmering” effect that locals take for granted.

As SmithsonianMag.com explains, the tiny stones were created not at depth but on surface about 15 million years ago when the site of the future town got clobbered by a one-kilometre-wide, three-billion-ton asteroid. The collision created suevite, “an impact breccia or coarse-grained rock comprised of angular fragments that can include glass, crystal and diamonds, and is commonly found at impact sites such as this one.

“When the asteroid hit the Earth, the force caused graphite-bearing gneiss rocks in the region to form diamonds due to the immense pressure—believed to have been 60 gigapascals, according to one study.”

Fifteen million years later, the locals assumed the circular town’s basin was created by a volcano which they confidently presumed to be extinct. A 1960s study by two American geologists determined the 24-kilometre-long Ries crater’s extra-terrestrial instigator. In the 1990s British researchers discovered the microscopic diamonds, attributing to the crater a not-quite-43-101 estimate of 72,000 tonnes.

“Although suevite can be found in other parts of the world from similar impacts, nowhere is the gemstone concentration as high as it is in Nordlingen,” points out Vickery. But the “gemstones” are actually not gem-quality. The tower watchman for the 5,000-carat-encrusted church of St. George tells him that the diamonds are luckily “very, very small, otherwise the tower would’ve been taken down a long time ago.”

Avoid a European sell-off

November 19th, 2017

Zimtu Capital offers a timely warning to dual-listed companies

by Greg Klein

A little-known legal requirement threatens Canadian companies trading in Europe. But it’s a threat that’s easily avoided. Beginning January 3, the European Securities and Markets Authority (ESMA) will require all companies trading in the continent to have a 20-digit alpha-numeric code called a Legal Entity Identifier. Companies that don’t could be delisted. Companies that don’t apply for an LEI could face a pre-delisting sell-off by European investors.

Zimtu Capital offers a timely warning to dual-listed companies

By disregarding new requirements, Canadian companies
risk unnecessary selling in Frankfurt and elsewhere in Europe.

As the deadline approaches, a surprising number of companies on this side of the pond remain unaware of the requirement. Yet the LEI can be obtained easily. Zimtu Capital TSXV:ZC president Dave Hodge encourages companies to act promptly.

“Zimtu Capital is proud to be one of the leaders in bringing Canadian companies to European markets,” he says. “By getting their LEIs, companies demonstrate commitment to their European shareholders.”

LEIs can be acquired online through an allocating agency such as WM-Leiportal in Germany. No such agencies exist in Canada yet. WM-Leiportal’s English-language online registration takes about 30 minutes. The fee currently comes to an initial €80, with a €70 annual renewal charge. The LEI normally arrives within days of payment being received.

The procedure’s not difficult. Even so, some dual-listed companies have encountered challenges. Having already walked several applicants through the process, Zimtu’s Shaun Ledding compiled a free step-by-step guide available from sledding@zimtu.com.

Zimtu Capital is proud to be one of the leaders in bringing Canadian companies to European markets. By getting their LEIs, companies demonstrate commitment to their European shareholders.—Dave Hodge

As an internationally standardized ID for market participants, the LEI was established by the Financial Stability Board, a Basel, Switzerland-based regulatory committee, on behalf of the G20 in response to the 2008 crisis. Entities such as companies, banks and investment funds use the LEI to comply with a number of financial reporting requirements.

According to the Deutsche Bӧrse Group, “The LEI will clearly assist the regulatory authorities in monitoring and analyzing threats to the stability of the financial markets, [but] it can also be utilized by counterparties internally for risk management purposes.”

The ESMA notes that LEIs are also “required or are in the process of being implemented by other regulators, including those in the U.S., Canada and Asia-Pacific.” Last month the ESMA stated it “expects all relevant trading venues and investment firms to comply with the MiFID II requirements on LEIs ahead of the implementation of the new regime on 3 January 2018.”

“Failure to have an LEI number could result in delisting in Germany and denying Germans the ability to trade a company’s shares,” Ledding points out. Adding that investors can check a company’s LEI status online, he warns: “Companies that do not address this could create a situation of risk for shareholders in Germany, prompting them to sell their shares.”

For a copy of his free guide to obtaining an LEI, write to sledding@zimtu.com.

German cops nab suspect family but fail to find 100-kilo gold coin

July 12th, 2017

by Greg Klein | July 12, 2017

German cops nab suspect family, fail to find 100-kilo gold coin

Security footage shows camera-shy suspects
passing through a train station near the museum.

Hundreds of heavily armed police, some wearing masks, raided several buildings and arrested four suspects in the theft of a 100-kilogram Canadian Maple Leaf gold coin. Worth well over $4 million, the coin fell victim to a daring heist at Berlin’s Bode Museum last March.

“We assume that the coin was partially or completely sold,” Associated Press quoted Carsten Pfohl of the Berlin state criminal office. A museum employee likely tipped off the thieves, another source told AP.

The four suspects, aged between 18 and 20, were said to be members of “a large Arab family with alleged links to organized crime,” the BBC reported. Several others are being questioned.

The arrests follow last week’s release of CCTV footage showing hooded suspects averting their faces as they walked along an otherwise deserted train station platform.

The missing coin was one of five produced by the Royal Canadian Mint, which keeps one copy in its vaults. Another, property of Barrick Gold TSX:ABX, remains on display at Toronto’s Royal Ontario Museum, where it’s part of the Teck Suite of Galleries.

Related:

Michael Eissenhauer of the State Museums of Berlin expresses dismay at the theft of a 100-kilo gold Maple Leaf coin

May 12th, 2017

…Read more

Seen this 100-kilo gold coin? Call Berlin police

March 27th, 2017

by Greg Klein | March 27, 2017, updated March 28, 2017

A 100-kilogram Maple Leaf gold coin seems destined for meltdown following a daring heist at Berlin’s Bode Museum. With a face value of $1 million but worth over four times that amount at today’s prices, it’s one of five identical coins produced by the Royal Canadian Mint.

Thieves entered the building between 2:00 and 4:00 a.m. March 27, according to a museum statement.

Seen this 100-kilo gold coin? Call Berlin police

A tad too conspicuous for general circulation, an identical
coin delights visitors at Toronto’s Royal Ontario Museum.
(Photo: Royal Ontario Museum)

“We are shocked that the burglars overcame our security systems, which have been successfully protecting our objects for many years,” said Michael Eissenhauer, director general for the State Museums of Berlin. “We hope that the perpetrators will be caught and the precious coin will be returned undamaged.”

The museum requested tips from anyone who’s been offered deals on large volumes of gold.

Due to superior security or less brazen bandits, other million-dollar Maple Leafs have survived Canadian museums. Victoria’s Royal B.C. Museum hosted the numismatic oddity in 2015 at the Gold Rush! El Dorado in British Columbia exhibit, before the show’s artefacts went to Gatineau’s Canadian Museum of History last spring.

That Maple Leaf belongs to its creator, the Royal Canadian Mint. “We don’t know who owns the coin stolen in Berlin but we can confirm that it’s not the Mint’s,” Alex Reeves of RCM external communications informed ResourceClips.com. “Our own coin is safe and sound in our Ottawa vaults.” The Mint doesn’t reveal the other owners’ names, Reeves added.

Making no secret of its ownership, Barrick Gold TSX:ABX displays its Maple Leaf in the company’s section of the Teck Suite of Galleries at the Royal Ontario Museum in Toronto. A ROM spokesperson declined to discuss security arrangements.

The Ottawa mint has itself been victim of a heist, although not a caper likely to inspire admiration. Last month former employee Leston Lawrence was sentenced to 30 months and ordered to repay $190,000 or serve an additional 30 months. The court heard he snuck something like 22 gold “pucks,” weighing around 7.4 ounces each, out of his workplace and into the hands of buyers.

Among the evidence was a tube of Vaseline found in his locker. He smuggled the contraband in his rectum.

Coal mine could produce green, renewable electricity

March 17th, 2017

by Greg Klein | March 17, 2017

Should all go to plan, the transformation from dirty to clean energy might come to be symbolized by this German coal producer. A longstanding idea to convert mine shafts to hydro chutes got further encouragement in a March 14 speech reported by Bloomberg. North-Rhine Westphalia state governor Hannelore Kraft has declared her support for a project that would convert the Prosper Haniel coal mine into a pumped storage facility.

Coal mine could produce green, renewable electricity

Dirty old Prosper Haniel could get a new, clean lease on life.

Referred to as a type of battery, it would use excess wind or solar energy to pump water from a reservoir at the depths of the mine to another reservoir above the shafts. When wind or solar fails to meet demand, the water would be released, plunging something like 1,300 metres to electricity-generating turbines.

A 2014 article on Grist.org said the mine could store up to about 990,000 cubic metres of H2O, “roughly the volume of the Empire State Building.” That could produce a 200 megawatt capacity, enough to power more than 400,000 homes, Bloomberg reported.

Prosper Haniel’s mining days are expected to end in 2018, when federal subsidies for the industry expire. Other mines could follow this reincarnation as the coal mining region of North-Rhine Westphalia intends to double its production of renewable energy to 30% by 2025, Bloomberg stated.

According to the National Energy Board, Canada’s only pumped storage facility is the 174 MW Sir Adam Beck station operated by Ontario Power Generation, which diverts water from the Niagara River to a 300-hectare reservoir. The transition from turbine to pumping sequence takes just minutes and occurs several times a day, the utility states.

The NEB attributes over 30 pumped storage facilities to the U.S., producing about 23,000 gigawatt hours a year but using about 29,000 GWh to do so. “Despite this net loss of energy, the grid reliability provided by PSH facilities and the ability to generate when demand is strong is highly beneficial and will become increasingly important as Canada and the U.S. integrate more renewable power into their grids.”

How a Brexit could affect the gold price

July 7th, 2016

The precious metal’s recent run could just be getting started

by SmallCapPower.com | July 7, 2016

Gold was already one of the best-performing asset classes in 2016 before British citizens unexpectedly voted to leave the European Union on June 23. We believe this will turn out to be the most important catalyst for the precious metal since it began its most recent bull run.

How a Brexit could affect the gold price

Despite beginning the New Year below $1,100, gold had failed a few times to hold above the $1,300 level since its upward move began back in January. We feel confident that the Brexit uncertainty will hang over the markets for at least the remainder of 2016, providing a firm support above $1,300.

The most immediate catalyst likely coming gold’s way is U.S. employment data for the month of June, which is expected to be released on July 8. The Labor Department expects 170,000 new jobs to be created during the month.

Given May’s dismal 38,000 employment gain, only a figure well above 200,000 will create any potential headwinds for the precious metal.

This all leads to the next U.S. Federal Reserve meeting that is happening during the final week of July. Minutes from the last Federal Open Market Committee meeting (released on July 6) suggested that the impact of a Brexit would need to be more certain before the Fed would decide to raise interest rates again, all of which is good news for gold bulls.

Also helping gold is negative interest rates on long-term debt in Germany, France, Japan and, most recently, Switzerland, which has seen its 50-year interest rates go negative for the first time.

Could the United States be next? In fact, that country’s 10- and 30-year interest rates on July 6 reached all-time lows of 1.32% and 2.1% respectively. According to data released by Fitch Ratings, a record US$11.7 trillion of global sovereign debt has dipped to sub-zero yield territory.

Continue reading this article on SmallCapPower.com.

Volkswagen ponders a German Gigafactory

May 28th, 2016

by Greg Klein | May 28, 2016

A multi-billion-euro electric vehicle battery factory could be coming to Germany if Volkswagen approves the idea. The German business daily Handelsblatt said VW has the plan under consideration and might make an announcement at the firm’s annual meeting on June 22.

Volkswagen ponders a German Gigafactory

Volkswagen hopes models like the E-Up will improve
the company’s image as well as its revenues.
(Image: Volkswagen)

Citing unnamed company sources, Handelsblatt stated, “The company’s executive board looks likely to approve the plan, which is also supported in principle by the works council and the state of Lower Saxony, its major shareholder.”

The Dieselgate-bedevilled company hopes to expand its electric car sales to one million within a decade, according to the journal.

Earlier this month Benchmark Mineral Intelligence said at least 12 mega-factories are expected to be producing lithium-ion batteries by 2020.

While unveiling Tesla Motors’ Model 3 on March 31, CEO Elon Musk announced the company’s Nevada Gigafactory is “already operational today.”

Interview: Chris Berry discusses the lithium boom.