Tuesday 12th November 2019

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Posts tagged ‘Germany’

Uranium: A 2040 prognosis

September 5th, 2019

Growing energy needs, emissions reduction look positive for the other yellow metal

by Greg Klein

Oversupplied and under-priced for years, uranium’s forecast now looks good up to 2040, according to a new study. In its latest Nuclear Fuel Report, a study released at roughly two-year intervals, the World Nuclear Association has revised its projections upwards for the first time in eight years. Demand will come from a growing reliance on nuclear energy thanks mainly to China, India and other Asian countries, said the industry organization. Global warming concerns also play a role.

Growing energy needs, emissions reduction look positive for the other yellow metal

The report presents different data for each of three case studies, explained World Nuclear News, a WNA publication. The Reference scenario reflects official targets and plans announced by states and companies, and also considers how nuclear can help address climate change. The Upper scenario anticipates more favourable economics, greater public acceptance and increased dependency to offset climate change. The Lower scenario considers the possibility of negative public sentiment, a lack of political support and more challenging economics.

Even at the Lower scenario, the study foresees nuclear capacity remaining at its current level of 402 gigawatt electrical to 2040. The Reference scenario sees moderate growth to 569 GWe, while the Upper scenario predicts capacity almost doubling to 776 GWe.

The Upper and Reference scenarios show faster growth than at any time since 1990.

Even greater expansion would be required should countries adopt the WNA’s Harmony climate change strategy, which calls for nuclear to supply 25% of the world’s electricity by 2050.

The need for new primary uranium supply becomes even more pressing as a number of older mines are projected to be depleted in the second decade.—World Nuclear Association

The three scenarios “show that the capacity of all presently known mining projects (current and idled mines, projects under development, planned or prospective) should be at least doubled by the end of the forecast period, and the need for new primary uranium supply becomes even more pressing as a number of older mines are projected to be depleted in the second decade,” the WNA emphasized. 

“There are more than adequate uranium resources to meet future needs. However, oversupply and associated low uranium prices are preventing the investment needed to convert these resources into production. Uranium resources would be unlikely to be a limiting factor for the expansion of nuclear programs in order to meet the Harmony goal.”

As for uranium production, the report sees “fairly stable” volume until the late 2020s, but a sharp decrease from 2035 to 2040 “as a quarter of all mines listed in the model reach the end of their production lives,” the WNN stated. “Global output of 66,400 tonnes uranium in 2030 declines to 48,100 tU under the Reference scenario. For the Upper scenario the figures are 71,500 tU (2030) and 49,400 tU (2040). The partial return of currently idled mines to production is expected to begin in 2023 in the Reference case, 2022 in the Upper scenario and 2026 in the Lower scenario.”

In addition to Asia’s growing nuclear reliance, the report bases its positive forecasts on improved government sentiment in France, and in the U.S. at the federal and state level. Countries like Bangladesh, Egypt and Turkey will become significant producers of nuclear energy.

In our models, we don’t get excited on the demand side.—Kazatomprom CEO
Galymzhan Pirmatov,
as quoted by Bloomberg

The study crunched data from questionnaires sent to WNA members and non-members, publicly available info and “the judgement and experience of the members of the association’s working group.” Among the considerations were nuclear economics, government policies, public acceptance, climate change, electricity market structure and regulatory standards.

Co-chairing the working group was Riaz Rizvi, chief strategy and marketing officer for Kazatomprom, the world’s top uranium miner. But the positive forecasts seem to contradict his boss. Last June Bloomberg quoted CEO Galymzhan Pirmatovas saying, “In our models, we don’t get excited on the demand side.”

Using data from other sources, Cameco Corp TSX:CCO estimated an August 31 U3O8 spot price of $25.30 per pound and long-term price of $31.00, down from $26.30 spot and $31.25 long-term a year earlier. The company gives numbers of $60.50 spot and $70.00 long-term for March 1, 2011, 10 days before a tsunami hit Japan’s Fukushima Daiichi complex. As Japan shut down other reactors one by one, followed by a few other countries like Germany, the mining industry faced oversupply. Uranium prices fell steadily, sometimes dramatically.

Make no mistake, there is still a long way to go before we decide to restart McArthur River-Key Lake.—Cameco CEO Tim Gitzel

By January 2018 Cameco suspended its McArthur River mining and Key Lake milling operations, despite having put Cigar Lake into production less than four years earlier. Expressing cautious optimism last July, CEO Tim Gitzel added: “However, make no mistake, there is still a long way to go before we decide to restart McArthur River-Key Lake.”

But without them, Cameco has become more buyer than producer. To meet 2019 supply commitments, the company anticipates purchasing 21 million to 23 million pounds from other sources. That compares with an estimated nine million pounds expected from Cigar Lake this year.

‘The money-conjurers’

July 3rd, 2019

Only a radical reset can solve the central bank problem, says Nomi Prins

by Greg Klein

Only a radical reset can solve the central bank problem, says Nomi Prins

 

Imagine the power—unchecked power, at that—to create money. Then imagine the disaster such power could unleash. While that scenario looms in the foreseeable future, Nomi Prins argues, its precursors have made themselves obvious since 2008. They’re the result of central bank policies and the system that sustains them, institutions absolutely bereft of a Plan B. A mess so manifestly dangerous calls for radical solutions, she maintains.

That’s the perspective of an insider, or at least an ex-insider. A veteran of Lehman Brothers, Bear Stearns and Goldman Sachs, Prins dedicated herself “to exposing the intersections of money and power and deciphering the impact of the relationships between governments and central and private bankers on the citizens of the world.” Six books later came Collusion: How Central Bankers Rigged the World, recently released in paperback.

This is a work of extensive detail, recounting who did what to interest rates, inflation rates, currency valuations and other economic interventions, focusing on quantitative easing and the other euphemisms for her preferred term: “money conjuring.” Collusion also answers a key question: Cui bono?

Only a radical reset can solve the central bank problem, says Nomi Prins

The U.S. responded to the sub-prime crisis by “subsidizing private banks (in particular, the Big Six US banks that were key toxic asset creators). The Fed fashioned an historic bailout program that invoked zero interest rate policy (ZIRP), initiated a strategy of quantitative easing by which the central bank fabricated money to purchase government bonds and other securities, and created massive lending programs for banks with relaxed collateral rules. The Fed coerced central banks worldwide to adopt similar strategies.”

With little or no trickle-down effect, she emphasizes. If the too-big-to-fail rationale claimed to protect the wider economy, the wider economy didn’t notice. Through share buy-backs and other strategies, banks used the largesse to enrich themselves instead of providing loans or investments that would put more people to work. G7 banks also used conjured money to “speculate globally, especially in developing countries, in markets rather than in direct economic investment that benefited populations.”

Only in isolated incidents were malefactors called to account. That happened in late 2016, for example, when the U.S. Justice Department hit European Central Bank beneficiary Deutsche Bank with $7.2 billion in fines “for crimes committed during the financial crisis—a sign of all that conjured-money policy had plastered over…. All the cheap-money subterfuge had not addressed the prevailing and alarming codependencies among too-big-to-fail banks the world over. That meant systemic risk had not been extinguished, it had only been camouflaged. The fine was just that, a fine, not a shift to prevent any of the looming hazards the financial system could still unleash.”

Facing even less scrutiny than private banks are central banks, rarely required to explain their machinations. “They vacillate between taking credit for what they deem are positive results in the world economy and remaining silent in the wake of catastrophic failures that result from their policies.”

While G7 central banks collaborated with the Fed, some of their G20 counterparts resisted. Regardless, globalization globalized America’s crisis. But despite U.S. efforts to reinforce world influence, the country inadvertently helped China rise to second-greatest economy status with a currency that challenges dollar supremacy. Contributing to the Middle Kingdom’s stature were some emerging economies, distrustful not only of America’s ambitions but its economic stability.

The Fed has allowed the biggest banks on Wall Street to essentially double the risk that devastated the system in 2008.—Nomi Prins

Current and future stability, more than past misconduct, remains Prins’ greatest concern. “The Fed has allowed the biggest banks on Wall Street to essentially double the risk that devastated the system in 2008.”

She attributes to manufactured money a global debt equal to three times global GDP, a peril that could itself crash the economy or seriously aggravate a crisis of geopolitical origin. As for solutions, she insists that desperate times call for very desperate measures:

“We could write off all the public debt incurred since 2008 that hasn’t been redirected to the real economy—that is, take a deep breath and cancel it out globally.”

Prins also advocates oversight of the money-conjurers, as well as forcing them to channel their money into constructive investments. She wants the big banks dismantled “so that they can’t hold people’s deposits hostage during the next crisis.”

But, assuming her proposals are sound, where’s the will to carry them out? She depicts G7 countries and central banks as stuck in conventional attitudes and clinging to privilege with no impetus for reform. Emerging economies, meanwhile, might be watching with cautious detachment. China, quite likely, looks on expectantly.

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.”