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Posts tagged ‘indium’

EU names six new critical materials, warns of industry challenges

May 26th, 2014

by Greg Klein | May 26, 2014

Six new critical raw materials bring the European Commission’s list up to 20, posing a “major challenge for EU industry,” the EC announced May 26. An update to the original 2011 collection, the set now includes borates, chromium, coking coal, magnesite, phosphate rock and silicon metal. No longer included is tantalum, now considered to have a lower supply risk. The division of rare earths into two categories, light and heavy, brings the total to 20 materials:

Raw materials are everywhere—just consider your smartphone. It might contain up to 50 different metals, all of which help to give it its light weight and user-friendly small size. Key economic sectors in Europe—such as automotive, aerospace and renewable energy—are highly dependent on raw materials. These raw materials represent the lifeblood of today’s industry and are fundamental for the development of environmental technologies and the digital agenda.—EC Enterprise and Industry

  • antimony
  • beryllium
  • borates
  • chromium
  • cobalt
  • coking coal
  • fluorspar
  • gallium
  • germanium
  • graphite (natural)
  • indium
  • magnesite
  • magnesium
  • niobium
  • phosphate rock
  • platinum group metals
  • rare earths (heavy)
  • rare earths (light)
  • silicon metal
  • tungsten

With 54 candidates considered, materials were evaluated largely on two criteria, economic importance and supply risk. Economic importance was determined by “assessing the proportion of each material associated with industrial megasectors” and their importance to the EU’s GDP.

Supply risk was assessed through the World Governance Indicator, which considers factors “such as voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law or control of corruption.”

Not surprisingly, the report names China as the biggest global supplier of the 20. “Several other countries have dominant supplies of specific raw materials, such as Brazil (niobium). Supply of other materials, for example platinum group metals and borates, is more diverse but is still concentrated. The risks associated with this concentration of production are in many cases compounded by low substitutability and low recycling rates.” About 90% of the critical materials’ primary supply comes from outside the EU.

The commission hopes its list will encourage European production of the materials. The list will also be considered when negotiating trade agreements and promoting R&D, as well as by companies evaluating their own supplies.

As for the future, the EC sees growing demand for all 20 critical raw materials, “with niobium, gallium and heavy rare earth elements forecast to have the strongest rates of demand growth, exceeding 8% per year for the rest of the decade.”

The commission adds that “all raw materials, even when not critical, are important for the European economy” and therefore should not be neglected.

The EC intends to update its list at least every three years.

Download the EU report on critical raw materials.

Focused on Fox

July 25th, 2013

Happy Creek Minerals drills high-grade, near-surface tungsten in B.C.

by Greg Klein

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“It’s not often that a junior delivers the best drill result in the Western world, at least in recent memory.” That bold statement comes from David Blann, president/CEO of Happy Creek Minerals TSXV:HPY. He’s referring to just one of the assays that show near-surface, high-grade tungsten at his company’s Fox project in central British Columbia. But for all tungsten’s importance as a critical mineral, “no one I know of in Australia, South America, North America or Europe has found anything new,” Blann tells ResourceClips.com. “This is a brand new, from-scratch discovery.”

As pointed out by Core Consultants managing director Lara Smith, both the European Union and the U.S. Department of Defense rate tungsten in their top three list of critical minerals. Speaking at Vancouver’s World Resource Investment Conference in May, House Mountain Partners founder and Morning Notes co-editor Chris Berry called tungsten one of four critical metals on which he’s now focusing.

Happy Creek Minerals drills high-grade, near-surface tungsten in B.C.

Happy Creek Minerals says its near-surface tungsten grades
compare favourably with high-grade underground mines.

Among its refractory metal qualities, tungsten combines special strength, hardness and density, along with the highest melting point of any metal (3,422 degrees C). That gives tungsten a range of vital uses from light filaments, ballpoint pens, electronics, blades, drills, saws and munitions to fishing lures and strings for musical instruments.

As for its critical mineral status, the tungsten story is a familiar one. Mining Weekly quoted Smith saying that China accounted for most of the world’s supply as well as demand. “This has placed an unprecedented threat on the tungsten sector outside of China, which presents enormous opportunities for the development of tungsten ores, concentrates and intermediary products outside of China,” she said.

Naturally that draws attention to tungsten in reliable jurisdictions and, Blann maintains, further emphasizes Fox’s significance. Consisting of four zones along a three-kilometre north-south axis, as well as a fifth zone about four kilometres south, the 16,491-hectare Fox has been showing strong results since late 2011. The “best drill result in the Western world” that Blann speaks of was released in November 2012 from the BN zone, where hole F12-27 showed:

  • 4.04% tungsten trioxide (WO3), 0.91% zinc, 4.51 grams per tonne indium and 4.1 g/t silver over 14.8 metres, starting at 83.2 metres in downhole depth.

(True width wasn’t available.)

The same hole also showed:

  • 1.78% WO3, 0.36% zinc and 1.56 g/t indium over 4.1 metres, starting at 1.9 metres
  • 0.79% WO3 over 24 metres, starting at 136 metres
  • (including 2.01% WO3, 0.84% zinc, 3.9 g/t indium and 9 g/t silver over 5.8 metres).

Tungsten highlights from the RC zone showed:

  • 0.74% WO3 over 12.4 metres, starting at 8.3 metres
  • 0.82% over 19.4 metres, starting at 14 metres
  • 0.8% over 11 metres, starting at 15 metres
  • 0.68% over 14 metres, starting at 27 metres.

Blann maintains Fox’s grades stand up to those of North American Tungsten’s TSXV:NTC Cantung mine, a diesel-operated, fly-in/fly-out underground producer in the Northwest Territories that’s “probably considered the highest-grade tungsten mine in the Western world.” Fox’s location, however, makes infrastructure more accessible.

A power line to the former Boss Mountain molybdenum mine (under option to NMC Resource TSXV:NRC) passes within 17 kilometres of Fox. A logging road links Nightcrawler, Fox’s most southerly zone, to the community of Forest Grove, about 45 minutes away. From there it’s another 20 minutes to highway and rail at the town of 100 Mile House. Helicopter-supported drilling now takes place about four kilometres north of Nightcrawler, at about 1,800 metres in altitude. That could eventually require Happy Creek to extend the road. “A logging company already has a plan and permit to build a road halfway there anyway,” Blann says.

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Year in review: Part II

December 29th, 2012

A mining and exploration retrospect for 2012

by Greg Klein

Read Part I of Year in Review.

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Graphite boom, bust and echo

One of the commodities that excited the 2012 market, graphite began stirring interest in 2011 and really gained momentum early this year. But the precipitous fall, right around April Fool’s Day, let cynics bask in schadenfreude. It was a bubble all along, they insisted.

Well, not quite. Despite reduced share values, work continued as the front-runners advanced their projects and earlier-stage companies competed for position in graphite’s second wave of potential producers. By autumn some of the advanced-stage outfits, far from humbled by last spring’s events, boldly indulged themselves in a blatant bragging contest.

Old king coal to regain its throne

If clean carbon doesn’t excite investors like it used to, plain old dirty carbon might. By 2017 coal’s share of the global energy market will rival that of oil. So says the International Energy Agency, which issued its Medium-Term Coal Market Report in December.

A mining and exploration retrospect for 2012

The forecast sees China consuming over half the world’s production by 2017. “Even if Chinese GDP growth were to slow to a 4.6% average over the period, coal demand would still increase both globally and in China,” the report stated. India, with the world’s “largest pocket of energy poverty,” will take second place for consumption.

Coal’s growth in demand is slowing, however. But its share of the energy mix continues to increase even though Europe’s “coal renaissance” (sic) appears to be temporary.

Bringing coal miners to new hassle

Chinese provide much of the market and often the investment. So why shouldn’t they provide the workers too? That seems to be the rationale of Chinese interests behind four British Columbia coal projects.

The proponents plan to use Chinese underground workers exclusively at the most advanced project, HD Mining International’s Murray River, for 30 months of construction and two additional years of mining. Only then would Canadians be initiated into the mysteries of Chinese longwall mining. But with only 10% of the workforce to be replaced by Canadians each year, Chinese “temporary” workers would staff the mine until about 2026. The B.C. government has known about these intentions since at least 2007.

The HD Mining saga has seen new developments almost every week since the United Steelworkers broke the story on October 9.

As Greenland’s example suggests, the scheme might represent another facet of China’s growing power.

Geopolitical geology

Resource imperialism aside, resource nationalism and other aspects of country risk continued throughout 2012. South American Silver TSX:SAC continues to seek compensation after spending over $16 million on a silver-polymetallic project that the Bolivian government then snatched as a freebie. Centerra Gold TSX:CG escaped nationalization in Kyrgyzstan but works its way through somewhat Byzantine political and regulatory intrigue, as does Stans Energy TSXV:HRE. In November the latter claimed a court victory over a hostile parliamentary committee.

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Week in review

October 12th, 2012

A mining and exploration retrospect for October 6 to 12, 2012

by Greg Klein

«Le Plan Nord est enterré»

Plan Nord was nothing more than “marketing” for projects that were already in the pipeline. So says Quebec’s new natural resources minister, according to Sunday’s Montreal Gazette. But industry observers still don’t know how the newly elected Parti Quebecois will treat the mining sector.

Prior to the province’s September 4 election, then-premier Jean Charest vowed his Liberal government would spend $2.1 billion on a massive infrastructure program to develop Quebec north of the 49th parallel. Over a 25-year period, Plan Nord would attract $80 billion in private and public investment, he said. During the election campaign, however, PQ leader Pauline Marois called the Liberals’ planned expenditure a $2.1-billion giveaway to the private sector.

A mining and exploration retrospect

Marois also talked of imposing a 5% royalty on all minerals extracted and a 30% tax on all mining profits above 8%. Her election victory raised obvious concerns throughout the sector.

“People involved in the Plan Nord are very anxious to know the position of the government,” Nochane Rousseau, a partner in PricewaterhouseCoopers’ Montreal office, told the Gazette. He pronounced the Plan Nord “brand” dead but added, “In order to create wealth, we absolutely will have to develop our natural resources, and northern Quebec is overflowing with them.”

Natural Resources Minister Martine Ouellet made her dismissive comment in a meeting with the editorial board of La Presse. She refused the Gazette’s requests for an interview.

New regulations disappoint Ontario explorers

Ontario’s exploration sector suffered a setback with a new mining law that takes full effect April 1. Probably the industry’s biggest chagrin is the requirement to consult native bands prior to early-stage exploration drilling on Crown land. The bands will have 30 days to express concerns, which could then block a permit, according to a Tuesday dispatch from Bloomberg. “It’s going to cost a lot more now and there are going to be a lot more delays,” the news agency quoted Mistango River CEO Robert Kasner.

Solid Gold Resources TSXV:SLD CEO Darryl Stretch told Bloomberg, “It should be the government’s duty to consult with first nations, not the mining industry’s.”

Stretch was a vocal member of Miners United, a group representing about 60 companies that surfaced at last spring’s Toronto PDAC convention to express concern about native relations. In a March 27 Globe and Mail story about the group, Ontario Prospectors Association Executive Director Garry Clark said that native bands charge companies for exploration drilling in confidential deals that often surpass $100,000.

Bullish, but …

Among those predicting more merger-and-acquisition activity are the three principals of NewGen Asset Management, which was written up in Friday’s Financial Post. “Our strategy is to identify those [most] likely M&A candidates,” said Manager David Dattels. The FP explained that one of the company’s portfolios “typically has about 20 core holdings, with others used as trading positions, including short positions that usually represent 5% to 20% of the portfolio.”

Dattels’ enthusiasm for the industry has its limits. “Mining has traditionally been a poorly managed industry. Corporate governance is probably the worst relative to other industries. Investors are smartening up to that.”

Consumers acquire critical commodity companies

Increasing demand and a 15% Chinese export tax have put another EU-designated critical mineral in the spotlight. Fluorspar “is used throughout the world, primarily by the chemical industry, for refrigerants and foam products and in the manufacturing of aluminum, Teflon, refined petroleum products, glass and medicine,” the Gold Report quoted Jennings Capital Analyst Ken Chernin on Tuesday. “There are virtually no substitutes for many of its uses and it is an essential ingredient in hydrofluoric acid.”

Chernin added that companies with deposits outside China are candidates for acquisition—and not necessarily by other miners. “In February 2012, the aluminum company RUSAL acquired the remaining 50% of Russia’s only fluorspar producer, [Yaroslavsk Mining Company], from Russkaya Gornorudnaya Kompaniya,” he said. “Fluorspar is used to produce aluminum fluoride, which is used in the production of aluminum. And in January 2012, the chemical group Solvay announced it acquired a 30,000 tonne-per-year fluorspar mine in Bulgaria from Italy’s M&M Group. DuPont and Honeywell are also big consumers of fluorspar.”

More of the same for Venezuela

Hugo Chavez “gets six more years to squeeze industries.” That’s how the Globe and Mail commemorated the results of Venezuela’s Sunday election. His 54% vote gives Chavez another six years in office, which would extend his presidency to 20 years. The Reuters commentary notes that “the nationalization campaign Mr. Chavez launched in 2007 has saddled the state with scores of loss-making companies.” Nevertheless he plans to continue nationalizing companies and confiscating mining operations.

Sad SAC

“Vehement” was South American Silver’s TSX:SAC denial of the latest allegations from the Bolivian government. The company’s Tuesday statement responded to an October 5 threat of legal action from Minister of Mines Mario Virreira, who claimed South American Silver had been working in Bolivia illegally.

The accusations “are patently false and have no factual basis,” the company said, repeating its intention to seek international arbitration “to obtain full compensation, including the fair market value of the Malku Khota Project.” Bolivia confiscated the silver-indium project in July, after SAC had sunk over $16 million building a resource. On October 3 Virreira stated the company would get zero compensation.

Cry the troubled country

Reports from South Africa said two more people died in labour-related violence early Thursday, while on Friday the three-week truck drivers’ strike ended. Also on Friday Atlatsa Resources TSXV:ATL announced that 2,161 fired employees would be reinstated provided they return to work at the company’s Bokoni Platinum Mines by October 15.

An attempt at reassurance came from Platinum Group Metals TSX:PTM. On Friday the company stated that progress continues on its application for a $260-million loan to build the WBJV Project 1 Platinum Mine in South Africa. Phase I development “has been progressing steadily and well…. There are approximately 325 people on site and the project has completed 880,000 man hours with a single minor lost-time incident.”

Not surprisingly the news was buried by allegations that surfaced on Thursday. South African President Jacob Zuma reportedly spent $23 million of public money renovating his home.

On Monday Kitco News summarized the situation for 10 major companies recently affected by South African strikes.

Canadian juniors explore the world. But beyond?

It’s twice the size of earth, mostly diamond with some graphite thrown in—but credit for the discovery goes to astronomers, not geologists. Apparently not the first diamond planet ever discovered, 55 Cancri e, as it’s unhelpfully named, “is the first time one has been seen orbiting a sun-like star and studied in such detail,” according to a Thursday report from Reuters.

And, as the news agency pointed out, “any fortune-hunter not dissuaded by The Diamond as Big as the Ritz, F. Scott Fitzgerald’s jazz age morality tale of thwarted greed, will find Cancri e about 40 light years, or 230 trillion miles, from Park Avenue.”

Week in review

October 5th, 2012

A mining and exploration retrospect for September 29 to October 5, 2012

by Greg Klein

So much for the environmental review

Monday’s news from British Columbia indicates another level of uncertainty has hit the province’s mining sector. Two B.C. cabinet ministers refused an environmental assessment certificate for Pacific Booker Minerals TSXV:BKM, even though the company passed a provincial environmental review. As a result, the half-billion-dollar Morrison copper-gold-molybdenum proposal has been put on hold.

A new development at the provincial level, it does have similarities to a federal decision to reject Taseko Mines’ TSX:TKO Prosperity gold-copper mine proposal for B.C. A November 2010 report from the Canadian Environmental Assessment Authority convinced the federal government to reject the $800-million proposal. The three-member CEAA panel found few significant adverse environmental effects but emphasized significant adverse effects on established native rights, potential rights, potential title, tradition and culture.

Mining and exploration week in review

Now B.C. has taken a comparable approach, although the supposedly “environmental” arguments come from politicians, not the people who conducted the environmental review. In fact the provincial review repeatedly stated that, with successful implementation of mitigation measures and conditions, the Morrison mine is “not likely to have significant adverse effects.”

Nevertheless Derek Sturko, who’s both executive director of B.C.’s Environmental Assessment Office and an associate deputy minister of the environment, seemed to reject his own department’s 270-page report. He suggested instead that the government take a “risk/benefit approach.” Sturko also emphasized strong native opposition and a “moderate to strong prima facie case for aboriginal title.” On that basis, two cabinet ministers representing mining and the environment nixed the proposal.

The decision might be related to the pre-election BC Liberal government’s prevaricating but currently negative stance towards the proposed Northern Gateway pipeline. But the province’s decision, like the federal decision regarding Taseko, also raises the question of whether native rights are handled according to the principle of law or appeasement.

Taseko submitted a revised $1.1-billion New Prosperity proposal to the feds on September 20. On Tuesday Business in Vancouver cited analysts, for some reason speaking anonymously, who said Taseko’s $300-million revision remains viable despite a drop in copper prices. But “with a large question mark as to whether the federal government will approve the project on a second go-round, they’re currently ascribing no value to the project in their target stock prices for the company,” BIV reported.

On Tuesday Pacific Booker Director Erik Tornquist told ResourceClips his company is reviewing its options.

Confiscation without compensation

If miners haven’t given up on B.C., it might be a case of the devil they know. Wednesday’s announcement that the Bolivian government would not provide compensation for nationalizing the Malku Khota Project followed months of uncertainty for South American Silver TSX:SAC. Since 2007, the company had spent over $16 million building a resource of 158 million ounces silver and 1,184 tonnes indium with lead, zinc and copper credits.

The company claimed the support of 43 out of 46 land-owning indigenous groups. SAC blamed illegal artisanal miners and activists from outside the region for intense opposition from the three dissident communities.

But last May, the company said, Mining Minister Mario Virreira signed an agreement with the 43 supportive groups stating that the government will not reverse the mining concession and that the company should continue exploration.

Protests turned violent in June, with one death and several injuries. Later that month seven people were taken hostage, including three drill contractors, two SAC employees, a government prosecutor and a police officer. The final three hostages were released unharmed after 11 days, when the government decreed that it would nationalize Malku Khota.

Reuters quoted a confident-sounding Vice-President Alvaro Garcia saying, “If we have to invest $500 million or $700 million or even $1 billion for a large-scale project at Malku Khota, which benefits Bolivia, the state is prepared and has the capacity to do that.”

At the time he added that government might pay compensation of $2 million or $3 million. Then came Wednesday’s decree. In an Agence France-Presse dispatch printed in the Globe and Mail, Virreira stated, “The nation has no financial obligation to South American Silver.”

By press time South American hadn’t responded. In an August 2 statement Greg Johnson, then the company’s president/CEO, said the company is prepared to go to international arbitration.

But, as Financial Times correspondent Andres Schipani pointed out, “Getting fair compensation, or any for that matter, from Bolivia has proved tricky since 2007. A year after [President Evo] Morales took office, the Andean country pulled out of the World Bank body that conducts arbitration between businesses and governments …”

Schipani noted other troubled nationalizations in Bolivia, including the Colquiri tin mine taken from Glencore in June. The government rationalized the move by saying it could then end disputes between independent and unionized miners. But the conflict flared up again with more violent clashes which shut down operations. On September 14 Reuters quoted Hector Cordova, president of the state-owned mining company, who said, “We’re losing more than $250,000 per day through lost production and this has been going on for two weeks. That means an accumulated loss of almost $4 million.”

Last Sunday the government said it solved the dispute by dividing the mine’s richest vein between the rival groups.

Friends and foes in the Kyrgyz Republic

On Friday three Kyrgyzstan MPs faced criminal charges while political unrest focused on Centerra Gold’s TSX:CG Kumtor Gold Mine. Prosecutors say the three attempted to overthrow the government by leading a mob that stormed the parliament building on Wednesday, Reuters reported. The incident grew out of a protest demanding that Kumtor be nationalized.

Violence has turfed previous Kyrgyzstan governments in 2005 and 2010. Last June a motion to nationalize Kumtor failed to pass parliament but MPs did pass a motion to consider increasing the country’s 33% stake in the Centerra subsidiary that owns the mine, as well as redefining the concession and boosting taxes.

But reassuring news came on Monday when Kyrgyzstan’s new president Zhantoro Satybaldiyev declared, “Kumtor will not be nationalized.” He told Reuters, “Problems will be resolved. I asked [the Kumtor venture] to keep up its output.” He added, “The way they extract gold, it’s really a state-of-the-art job. To be honest, I am jealous of their skills.”

The news agency pointed out, however, that the government had cancelled a televised auction of mining licences on August 28 after protesters stormed the TV studio.

Kumtor produced 583,156 gold ounces in 2011 at $482 an ounce. But in August the company blamed its $54.6-million Q2 loss largely on Kumtor’s “abnormal mining costs.”

Last September Kyrgyzstan ordered Stans Energy Corp TSXV:HRE to suspend drilling at its Kutessay II REE Deposit. According to the company, the government wanted “a firm proposal for the gratuitous transfer of a percentage of ownership” of a company subsidiary to the state. The stop-work order ended as the company met with Satybaldiyev and Economic Minister Temir Sariev.

In a statement issued Monday, Stans quoted Sariev saying, “Our state does not have the necessary financial and technical resources for the development of deposits and we have, so far, no such specialists. Development of the mining industry of our country at this stage is only possible by attracting investment. And the investors will come to our country when they will be confident in the safety of their financial investments.”

South Africa: A tragic outcome from a positive move?

Another striking miner was killed in South Africa Thursday night. On Friday Anglo-American Platinum fired 12,000 strikers. A Reuters dispatch in the Globe and Mail stated, “When rival Impala Platinum fired 17,000 workers in January to squash a union turf war, it led to a six-week stoppage in which three people were killed, the company lost 80,000 ounces in output and platinum prices jumped 21%.”

One disturbing aspect of the crisis is that a generous pay hike in a poor country can cause so much controversy. In last month’s “Lonmin settlement,” the platinum producer raised miners’ wages between 11% and 22%. Nic Borain, described as “an independent political analyst,” told Reuters, “Amplats had been giving signals that it was going to hold the line after Lonmin had folded—but it’s a huge gamble. Someone had to take it on the chin or this would have kept on unravelling and spread through the economy. It’s difficult to know whether this causes the unrest to spread or whether it takes some of the sting out of it. It could go either way.”