Tuesday 11th August 2020

Resource Clips

Posts tagged ‘myanmar’

Crisis response

April 3rd, 2020

A look at mining, exploration, infrastructure and supply chains under the pandemic

by Greg Klein | April 3, 2020

A look at mining, exploration, infrastructure and supply chains


Idled explorers: Can you help?

“Essential supplies and personnel are needed to create and operate temporary facilities for testing, triage, housing and isolation areas for vulnerable populations,” states the Association for Mineral Exploration. “As mineral explorers, we have access to the supplies needed and are in a unique position to help.”

AME calls on the industry to contribute excess capacity of the following:

  • Insulated structures (both hard and soft wall)

  • Camp gear such as furniture, lighting and kitchen appliances

  • Medical equipment

  • Camp support personnel such as caterers, housekeepers, janitors, etc.

  • Available medical staff including such qualifications as OFA3s, paramedics, RNs, etc.

  • Other supplies or skills

If you can help, please fill out this form and AME will be in touch. 

For further information contact Savannah Nadeau.

Preparing for a wider emergency

Given the danger of one crisis triggering others, essential infrastructure remains at risk. One plan to safeguard Ontario’s electricity service would require Toronto workers to bunk down in employer-supplied accommodation under lockdown conditions better known to isolated locations.

A look at mining, exploration, infrastructure and supply chains

Quarantines might require essential
services to provide job-site bed and board.
(Photo: Independent Electricity System Operator)

It hasn’t happened yet, but the province’s Independent Electricity System Operator stands ready for the possibility, according to a Canadian Press story published by the Globe and Mail. A not-for-profit agency established by the province, the IESO co-ordinates Ontario electricity supply to meet demand.

About 90% of its staff now work at home but another 48 employees must still come into work, CEO Peter Gregg said. Eight six-person teams now undergo 12-hour shifts in two Toronto-area control rooms.

“Should it become necessary, he said, bed, food and other on-site arrangements have been made to allow the operators to stay at their workplaces as a similar agency in New York has done,” CP reported.

Similar plans may well be underway not only for essential infrastructure but also for essential production, processing, manufacturing, communications, transportation and trade. One sign of the times to come could be locked-down camps in supermarket parking lots for our under-appreciated retail-sector heroes.

Meanwhile, retaining and protecting care-home staff already constitute a crisis within a crisis.

Australia guards against predatory foreign takeovers

With China prominently in mind, Australia has taken extra measures to protect companies and projects shattered by the COVID-19 economy. Canberra has temporarily granted its Foreign Investment Review Board extra powers to guard distressed companies and assets against acquisitions by opportunistic foreigners. Although previous foreign acquisitions came under review only when the price passed certain thresholds, now all such transactions get FIRB scrutiny.

The changes follow concerns raised by MPs on Australia’s intelligence and security committee. The Sydney Morning Herald quoted committee chairperson Andrew Hastie warning of “foreign state-owned enterprises working contrary to our national interest. More than ever, we need to protect ourselves from geo-strategic moves masquerading as legitimate business.”

Committee member Tim Wilson added, “We can’t allow foreign state-owned enterprises and their business fronts to use COVID-19’s economic carnage as a gateway to swoop distressed businesses and assets.”

Among protected assets are exploration and mining projects, utilities, infrastructure and an interest of 20% or more in a company or business.

Critical minerals become ever more critical

As Lynas Corp extended the suspension of its rare earths processing facility in line with Malaysian government pandemic orders, the company noted the importance of its products “in permanent magnets used in medical devices including ventilators, and in lanthanum products used in oil refineries for petroleum production.”

A look at mining, exploration, infrastructure and supply chains

The suspension of its Malaysian plant prompted
Lynas to emphasize REs’ criticality to virus treatment.
(Photo: Lynas Corp)

Originally set to expire on March 31, the government order currently stays in force until April 14. RE extraction continues at Lynas’ Mount Weld mine in Western Australia.

In late February Malaysia granted the company a three-year licence renewal for the processing facility, which had been threatened with closure due to controversy about its low-level radioactive tailings. Among conditions for the renewal are development of a permanent disposal facility for existing waste and putting a cracking and leaching plant in operation outside Malaysia by July 2023 to end the practice of transporting radioactive material to the country.

Committed to maintaining a non-Chinese supply chain, the company plans to locate the C&L plant in Kalgoorlie, Western Australia.

Sharing the disease, hoarding the treatment

A problem recognized in American defence procurement has hit health care—the need to build non-Chinese supply chains. Most of the world’s ventilators and about half the masks are manufactured in China, points out a recent column by Terry Glavin.

The West is learning, finally and the hard way, “that thriving liberal democracies cannot co-exist for long within a model of neo-liberal globalization that admits into its embrace such a tyrannical state-capitalist monstrosity as the People’s Republic of China.”

The U.S., for example, relies heavily on China for antibiotics, painkillers, surgical gowns, equipment that measures blood oxygen levels and magnetic resonance imaging scanners. China effectively banned medical equipment exports as soon as Wuhan went on lockdown, Glavin adds.

“It probably didn’t help that Ottawa sent 16,000 tonnes of gear to China back in February. That was a lot of gear—1,101 masks, 50,118 face shields, 36,425 medical coveralls, 200,000 pairs of gloves and so on—but a drop in Beijing’s bucket. A New York Times investigation last month found that China had imported 56 million respirators and masks, just in the first week of the Wuhan shutdown.

“It is not known how much of that cargo came from the massive bulk-buying campaign organized and carried out across Canada by affiliates of the United Front Work Department, the overseas propaganda and influence-peddling arm of the Chinese Communist Party.”

A look at mining, exploration, infrastructure and supply chains

Desperate need for health care supplies
pits country against country. (Photo: 3M)

Nor does the non-Chinese world display altruism. In response to the crisis, the EU and more than 50 countries have either banned or restricted exports of medical equipment, Glavin states.

By April 3 global health care products supplier 3M revealed that Washington asked the company to stop exporting U.S.-manufactured N95 respirators to Canada and Latin America. 3M noted “significant humanitarian implications” but also the possibility of trade retaliation. “If that were to occur, the net number of respirators being made available to the United States would actually decrease.”

The company did win China’s permission to import 10 million of its own Chinese-manufactured N95s into the U.S.

Meanwhile the Canadian government comes under increasing criticism for discouraging the public from wearing masks.

Chinese supply chains also jeopardized by Chinese disease

As the world’s main exporter of manufactured goods, China’s the main importer of raw materials, especially metals. But, as the world’s main exporter of disease, China managed to threaten its own supplies.

Reuters columnist Andy Home outlined lockdown-imposed cutbacks of copper, zinc and lead from Chile and Peru, and chrome from South Africa; reductions in cobalt from the Democratic Republic of Congo, in tin from already depleting Myanmar, and in nickel from the Philippines, the latter a hoped-for replacement after Indonesia banned unprocessed exports.

The longer the lockdowns, “the greater the potential for supply chain disruption,” Home comments. “As the biggest buyer of metallic raw materials, this is a ticking time-bomb for China’s metals producers.”

Miners’ providence unevenly distributed

Probably no other foreign shutdowns have affected as many Canadian miners and explorers as that of Mexico. Considered non-essential, their work will be suspended until April 30, with extensions more than likely. Mexico’s announcement must have sounded familiar to Pan American Silver TSX:PAAS, which had already pressed the pause button to comply with national quarantines in Peru, Argentina and Bolivia. That currently limits the company’s mining to Timmins, where production has been reduced by about 10% to 20% to allow physical distancing.

A look at mining, exploration, infrastructure and supply chains

Mauritania exempted Kinross Gold’s Tasiast mine
from domestic travel restrictions. (Photo: Kinross Gold)

One company more favourably located, so far, is Kinross Gold TSX:K. As of April 1, operations continued at its seven mines in Nevada, Alaska, Brazil, Mauritania, Russia and Ghana, while work went on at its four non-producing projects in Alaska, Mauritania, Russia and Chile.

Expanded shutdowns ordered by Ontario on April 3 include many construction and industrial projects but exempt mining. Earlier that day New Gold TSX:NGD announced Rainy River’s restart after a two-week suspension to allow self-isolation among employees. Many of the mine’s workers live locally and made short trips into Minnesota before the border closed.

Quebec border restrictions have hindered the Ontario operations of Kirkland Lake Gold TSX:KL, cutting off a source of employees and contractors. As a result the company reduced production at its Macassa mine and suspended work at its Holt complex, comprising three gold mines and a mill. Kirkland reduced operations at its Detour Lake mine effective March 23, after a worker showed COVID-19 symptoms and self-isolated on March 14. He tested positive on March 26. Production continues at the company’s Fosterville mine in Australia.

Some explorers have been idled by government restrictions, others by market conditions. Still, some companies have money and jurisdictions in which to spend it. Liberty Gold TSX:LGD, for example, resumed drilling its Black Pine gold project in Idaho on March 31.

Some jurisdictions, like B.C. and New Brunswick, have extended work requirement deadlines to help companies keep exploration claims active.

“China needs to be held responsible”

A few Canadian journalists are saying what we might never hear from our politicians. Here, for example, is Toronto Sun columnist Lorrie Goldstein:

“China needs to be held responsible. The problem is, because of its political power— and you see it in the World Health Organization announcements, in Canadian announcements—they’ve been praising what China did. There would have been a virus anyway. China made it worse. More people are dying, more people are being infected, and its dictators need to be held to account.”

Clint Cox: Formidable challenges face competitors of Chinese rare earths

January 20th, 2020

by Greg Klein | January 20, 2020

Depending which part of the supply chain’s under consideration, this one country produces anywhere from 70% to 95% of these critical minerals. China’s overwhelming rare earths dominance has long been obvious but trade tensions have once again highlighted the problem. Speaking at VRIC 2020 on January 19, Clint Cox outlined the hurdles Westerners face in the struggle to ensure security of supply.

Formidable challenges face competitors of Chinese rare earths

An analyst with The Anchor House who’s specialized in REs since 2006, Cox works with people throughout the supply chain including end users, government agencies, producers and junior explorers.

Last year China’s trade war threat to “weaponize” rare earths brought chills to Western end-users, who are all too familiar with the crisis of 2010. Prior to the Senkaku incident, prices had been trending downwards. Then came the monumental spike, shooting up costs of some elements 30 times.

“Our entire auto industry in North America almost shut down because of this,” Cox says. “A number of other industries almost shut down because of this.”

Naturally juniors found opportunity in crisis. Previously numbering about a dozen, ASX- and TSXV-listed rare earths explorers swelled their numbers beyond 450, a number grossly disproportionate to the availability of qualified geos. “They raised almost $6 billion in that time period,” Cox points out. “They ended up with one producing mine in Lynas Corporation and one mine in Molycorp, the Mountain Pass mine that went bankrupt.”

Mountain Pass in California has since re-opened—as a supplier to China. The world’s greatest source of rare earths deposits has, over the last two years, become a significant importer.

That’s a legacy of environmental neglect that includes an 11-square-kilometre tailings pond with about 100,000 to 150,000 tonnes of exposed radioactive muck, right next to a tributary of the Yellow River.

“China knows this,” he says. “They’re trying to fix it.”

As a result the government has been shutting down mines and looking for external sources. But on a global scale domestic production remains overwhelming.

As does the processing supply chain, led by six state-owned companies that have consolidated their operations. The Big Six benefits from China’s approach to capitalism.

They are all subsidized, every last one of them. They’re subsidized at the local level, the provincial level and the national level.—Clint Cox

“They are all subsidized, every last one of them,” Cox emphasizes. “They’re subsidized at the local level, the provincial level and the national level. This could be free power, this could be interest-free loans, it could be loans that never have to be paid back, and sometimes just flat-out cash payments. They are subsidized at every level.”

Companies in Bayan Obo, China’s most important rare earths-producing region, received about $395 million in government support over just one year. “That’s free money, that’s a subsidy, that’s tough to compete with. That’s way over what the United States is going to spend to try to solve this issue.”

A 20-year expansion plan for rare earths projects in the region finished well ahead of schedule, he notes.

Cox says China began 37 rare earths projects last year, promising some 48,000 tonnes of magnet production. “We only have a couple of hundred tonnes of magnet production in North America. And they spent close to, we gather, ten and twenty billion dollars on making rare earths facilities last year. And we’re excited about tens of millions, or maybe a hundred million dollars spent on some of the projects by the government this year.”

The country’s environmental legacy notwithstanding, China’s current handling of radioactivity presents another advantage. Freeing up the miners, the Chinese nuclear authority now takes responsibility for dealing appropriately with waste. Non-Chinese companies have to fend for themselves. Such challenges have been illustrated by Lynas, which faces opposition to the cracking and leaching plant in Malaysia that processes material from the company’s Mount Weld mine in Western Australia.

Another Chinese advantage: The Big Six launders material from the “unofficial or black market,” coming from unsanctioned, artisanal operations of dubious environmental and workplace standards. Some of it comes from inside China, while additional sources include Myanmar and other parts of southeast Asia, South America and elsewhere.

“So a lot of material flows through this black market. They legitimize it, because once it enters one of their supply chains, one of the Big Six, they can stamp an ‘official’ stamp on it and it becomes official material.”

He adds, “In general, Western countries can’t utilize the black market like China can. That is a huge edge. Some of the black market material can cost one-third of regular material.”

The juniors are definitely the place where the last crop of potential mines came from, and it looks like they might be the next out there. There’s some out there today.—Clint Cox

Supporting all this is a totalitarian regime. “That is tough to compete with.” Despite heightened Washington concern, the U.S. government agencies trying to address the problem remain uncoordinated. U.S. Congress currently has 18 bills concerning rare earths, Cox says.

Still, efforts persist to extract rare earths from sources such as mineral sands and coal. Then there are the juniors.

“The juniors are definitely the place where the last crop of potential mines came from, and it looks like they might be the next out there. There’s some out there today.”

But he has a warning for would-be miners who assume they’d receive a premium for non-Chinese supply. They won’t, he cautions. They’ll have to meet Chinese prices.

Other possibilities might not be predictable. “A dark horse can always come up. You never know what might happen in the rare earths industry. A new application, a new mine, a new processing technology, any of that can transform the industry.”

Read about the Canada-U.S. Joint Action Plan on Critical Minerals Collaboration.

Under the hammer

April 21st, 2016

From the mantle, Myanmar and Mars, rare rocks go on the auction block

by Greg Klein

These have been the days of the $22-million no-sale, the ruby-red beauty of Burma and the scream from outer space. Over two days, two rival auction houses offered up some of the most exceptional stones known to this planet and others.

From the mantle, Myanmar and Mars, rare rocks go on the auction block

Sotheby’s rejected $2.2 million
a carat for the Shirley Temple Blue.
(Photo: Sotheby’s)

The much-anticipated main event at Sotheby’s April 19 Magnificent Jewels sale lasted less than a minute before the hammer came down on an anti-climactic $22 million. The auctioneer rejected the bid and withdrew the lot, having wanted something in the range of $25 million to $35 million. Such was the optimism inspired by the Shirley Temple Blue diamond, a 9.54-carat, potentially internally flawless, cushion-cut fancy stone once owned by the child phenom.

Still, $22 million was a tad more than the $7,210 paid by Temple’s dad in 1940. But extraordinary expectations have been provoked by some extraordinary prices.

Earlier this month Sotheby’s unloaded the De Beers Millennium Jewel 4 in Hong Kong for $31.8 million, a record price for Asia. In November Christie’s auctioned the 16.08-carat Sweet Josephine for $28.5 million. The following day the same buyer—a father rather more extravagant than Temple’s—paid Sotheby’s “a new record price for any gemstone and per carat” for the $48.4-million Blue Moon of Josephine.

This time around Sotheby’s performed relatively modestly, selling five items for over $1 million each, with the top-selling lot getting $4.56 million. That was for a “magnificent platinum and fancy purplish pink diamond ring” that came in close to the $5-million maximum estimate. In all, the auction pulled in nearly $29.89 million. But the Shirley Temple disappointment held the total far back from that of a Sotheby’s event 12 months earlier, which raked in a record $65.08 million.

From the mantle, Myanmar and Mars, rare rocks go on the auction block

Christie’s called the Jubilee “the very best Burmese
ruby offered for sale” in the U.S. for over 25 years.
(Photo: Christie’s)

Christie’s came much closer to that figure just one day after the Shirley Temple got shelved. That rival Magnificent Jewels auction offered 255 items and totalled nearly $57.03 million. Starring the show was the 15.99-carat Jubilee ruby. “To find an almost circular cut, unheated gem weighing more than 15 carats, with near-perfect crystallization is the dream of every gemstone connoisseur,” oozed the auctioneer. Set in a gold and diamond ring, the Jubilee sold for $14.16 million, well inside the hoped-for $12-million to $15-million range.

Another bidder put up $8.84 million for a 10.07-carat “fancy intense purple-pink diamond” mounted in a platinum and gold ring. With a pre-sale estimate of $8 million to $12 million, that gem also sold within expectations.

As did a $7.22-million, 40.43-carat round brilliant-cut diamond that was estimated between $7 million and $10 million.

While Christie’s New York was peddling opulence, Christie’s London was marketing meteorites. Prices hovered much closer to earth, however—between $267 for “a corner cut of the Toulon meteorite” and $62,213 for the Tirhert, “a meteorite which never hit Earth.” A Moroccan kid found it wedged between tree branches.

But no matter how exotic, the more expensive extra-terrestrial stuff got consigned to inventory.

Bidders passed up souvenirs of Mars, one of which Christie’s hoped would bring up to $355,500 and another up to $639,900. Similarly spurned was the “world’s largest oriented meteorite with extra-terrestrial gemstones.” That was further described as “encompassing an enormous aggregate of extra-terrestrial olivine and peridot in a steel-blue patina dappled with mango accents.”

From the mantle, Myanmar and Mars, rare rocks go on the auction block

Even this extra-terrestrial expression of
Munch-ish anguish failed to find a buyer.
(Photo: Christie’s)

Christie’s wanted somewhere between $711,000 and $1.13 million for the 650-kilogram chunk of rock, arguably a bargain compared to those earthly objects measured in mere carats. And they’re not even dappled with mango accents.

Another non-mover was “an otherworldly evocation of Edvard Munch’s The Scream.” Naturally formed, Christie’s insists, the 179-kilogram space oddity came with an aspired but unrealized price between $213,300 and $355,500.

The auction totalled just $817,601 for 44 meteorites, leaving nearly three dozen unsold. Evidently aficionados prefer the products of domestic geology. Maybe there’s still something to be said for this planet after all.

Next month Christie’s and Sotheby’s plan to separate big spenders from their loot in Geneva. Sotheby’s set a hopeful $28-million to $38-million target for the 15.38-carat Unique Pink diamond, while Christie’s talks of up to $45 million for the 14.62-carat Oppenheimer Blue.

Assuming there are takers, how does one explain such extravagance?

“Even though there may be a general economic malaise, a lot of people are making a lot of money and are very cash-rich,” David Bennett told Rapaport Magazine. As chairperson of Sotheby’s jewelry division, he conducted the Blue Moon auction and several other high-profile sales.

“Fine gemstones have always been something that people consider having in their portfolio of investments,” he added. “If they are going to buy something, they want to buy the rarest, the best.”

Global Witness identifies Myanmar jadeite as a conflict mineral one month before a mine site landslide kills over 100 people

December 2nd, 2015

…Read more

Over 100 dead at Myanmar jade mining site

November 22nd, 2015

by Greg Klein | November 22, 2015

With more victims still unaccounted for, rescuers so far have pulled 104 bodies from a landslide in northern Myanmar, local media reported. The Global New Light of Myanmar stated a hill of soil extracted from a jade mine collapsed early November 22, burying around 70 huts housing small-scale miners and their families.

Over 100 dead at Myanmar jade mining site

Environmental degradation at the world’s
largest jade mining district takes a deadly toll.

The inhabitants were in the area to search mine waste for jade, the paper added. They had been warned of landslide risks around Hpakant in Kachin state, home to the world’s biggest jade mining operations.

Last month Myanmar’s jade industry came under fire from Global Witness for corruption, degrading the environment and funding violence. Because of the industry’s practices, “mountains have become valleys and valleys have become mountains,” one Hpakant source told Global Witness.

In June Radio Free Asia reported at least five landslides had occurred at jade mining sites in the first half of the year. At least 20 people died in a January landslide, Global Witness stated.

The group’s 12-month investigation found large jade operations were controlled by families and cronies of government and military figures, people connected to the former junta, drug lords and rebel militias fighting a conflict that’s killed thousands of people since 2011.

An upbeat story about jade in the same issue of the Global New Light of Myanmar said the industry contributes US$2 billion to $3 billion a year to the government. Global Witness stated the big mines made at least $12 billion last year, probably closer to $31 billion.

Earlier this month the country held its first free elections in 25 years, won by the opposition party of Aung San Suu Kyi, who spent 15 years under house arrest during military rule. But, according to a New York Times analysis, she might be forced to co-operate with former junta officers who still wield influence in the transitional government.

The Global New Light of Myanmar reported more fighting between the Tatmadaw (Myanmar Defence Services) and rebel Kachin Independence Army between November 15 and 19.

Read about the Global Witness investigation into Myanmar jade mining.

Myanmar’s dirty ‘state secret’

October 26th, 2015

Environmental and human rights abuses taint the most prestigious type of jade

by Greg Klein

One of the planet’s most precious gems, the highest-quality jade can sell for over $13,000 a kilo. What that meant to Myanmar last year alone was at least $12 billion in production, more likely up to $31 billion, according to Global Witness. That figure represents about 48% of the impoverished country’s GDP and 46 times the expenditures on health care. But, the human rights group maintains, most of the money goes to government insiders and military officers, their families and cronies, and the war efforts of both sides in an independence struggle that’s left thousands dead since 2011.

It’s another story of conflict minerals from a deeply troubled part of the world. Yet Chinese appetite persists for jade in both its forms, the more expensive but often ethically tainted jadeite from next-door Myanmar and the more modestly priced nephrite jade, of which British Columbia supplies about 75% of world supply. As Myanmar prepares for its first elections since the military junta ended in 2011, Global Witness released an October 23 study calling for thorough reform of the jadeite industry, possibly “the biggest natural resources heist in modern history.”

It centres around Hpakant in Kachin state, the world’s biggest jade mining district and described by a community leader as “one of the most valuable places on earth because you can earn billions from a very small area… and yet only a small number of people are getting advantages.”

“If openly, fairly and sustainably managed, this industry could transform the fortunes of the Kachin population and help drive development across Myanmar,” Global Witness states. “Instead, the people of Kachin state are seeing their livelihoods disappear and their landscape shattered by the intensifying scramble for their most prized asset. Conditions in jade mines are often fatally dangerous, while those who stand in the way of the guns and machines face land grabs, intimidation and violence.”

As heavy equipment and explosives demolish hills of jade, “mountains have become valleys and valleys have become mountains,” one source said. Polluted rivers, water-filled craters, deforestation, landslides and flooding now characterize Hpakant.

As for the beneficiaries, Global Witness’ 12-month investigation revealed a list that “reads like a who’s who from the darkest days of junta rule.” They include families of high-ranking military and government figures, some dating to the dictatorship, others with the current cabinet. At least four “army companies” exploit jade to provide “off-budget finance for secret military projects and an income stream for retired army officers.” Tycoons with junta connections lead a third category of “crony companies.” Drug lords control a fourth category.

The four can overlap. Drug lords, according to one source, can bribe an army officer for his assistance in securing a jade concession. “If the licence comes through, this general or one of his family members will get a share in the mining company.”

They do very well indeed, at Hpakant’s expense. Jade companies linked to former military dictator Than Shwe, current government minister Ohn Myint, drug lord Wei Hsueh Kang and government crony Aike Htwe “recorded around US$430 million in pre-tax sales at the 2014 official government jade sale alone.”

Jade also provides the main source of income for two rebel groups, the Kachin Independence Army and the Kachin Independence Organization. That makes “the battle for control of jade revenues a strategic priority for both sides in the conflict.” Apart from having killed thousands of people since 2011, the struggle has displaced another 100,000, Global Witness reports. Like the government military, the rebels stand accused of war crimes.

When many fear hardliners may finance sectarian violence and dirty tricks, Myanmar’s citizens urgently need to know where the jade money is going.

With the industry playing an integral role in both motivating and financing the struggle, peace depends on addressing “the question of who benefits from Kachin state’s jade.”

Until the early 1990s, when the junta got involved in jade concessions, small-scale operations with local miners benefited. Now, with a “massive upswing” in jade extraction over the last year, local people fear resource depletion could leave nothing for future generations.

That adds a sense of urgency to Global Witness’ call for reform. So does the impending November 8 election. “When many fear hardliners may finance sectarian violence and dirty tricks, Myanmar’s citizens urgently need to know where the jade money is going.”

Global Witness describes its mission as investigating and campaigning “to change the system by exposing the economic networks behind conflict, corruption and environmental destruction.” Among other projects, previous Global Witness campaigns have targeted conflict diamonds in Zimbabwe and the Central African Republic, and conflict gold and tantalum in the Democratic Republic of Congo.

Download Jade: Myanmar’s “Big State Secret”.

November 22 update: A landslide at a Myanmar jade mining site kills over 100 people.

First-mover advantages

June 19th, 2015

Electra Stone sees opportunities as the first publicly traded jade company

by Greg Klein

What prompted Electra Stone TSXV:ELT to become the world’s first publicly traded company to pursue jade? For starters, president John Costigan points out a tremendous price increase. “In 2004, A-grade B.C. jade was $40 a kilo. Last year it sold for $1,800 a kilo.” Obviously something big was happening, but under the radar of other juniors. Taking advantage of British Columbia’s importance to global jade supply, Electra began acquiring properties, not to mention expertise. Now, with summer exploration slated to begin imminently, the company sees jade opportunities beyond exploration and mining.

Electra Stone sees opportunities as the first publicly traded jade company

British Columbia supplies about
75% of the world’s nephrite jade, presenting opportunities that Electra believes other juniors have missed.

“The Chinese have virtually mined out all their domestic jade,” Costigan says. “But they have an emotional and spiritual connection to this stone. It’s far more significant than an attachment to say gold or silver. The Chinese will actually use jade as a currency and as a storehouse of value, much like gold but it has a spiritual element to it. According to belief, jade, especially green jade or B.C. jade, can confer good health and good luck upon oneself.”

Of the two types of jade, jadeite is the more costly stuff, which comes in different colours from Myanmar. Dwindling supplies and a re-awakened interest in China’s traditional jade have increased consumer interest in nephrite jade, of which B.C. produces about 75% of global supply.

A-grade nephrite goes into jewelry and carvings. B-grade finds uses in furniture or architectural adornments. Costigan sees a neglected market for B-grade jade. With attributes largely overlooked by B.C. suppliers, jade’s characteristics make it an ideal dimensional stone, he says.

“First of all, it’s harder than granite or steel,” Costigan explains. “It’s non-porous so it doesn’t stain. You can get a mirror polish on this stone. Its translucency also adds to its functional value. When back-lit, you get this soft, green glow. You combine all these qualities and you have a fantastic, beautiful, strong stone that will compete with high-end marble. So it has not only functional characteristics in terms of its architectural applications, but aesthetically it’s very pleasing.”

He adds, “The Asian community has used it for walls, fireplaces, trim, tables, table legs—there’s a panorama of uses for B.C. jade that’s barely been touched.”

Already an industrial minerals company, Electra began compiling its jade portfolio earlier this year with three properties in northern B.C.’s Liard mining division. Two were acquired through staking, the 2,225-hectare Rustic project and the 478-hectare Kutcho property. Last month Electra signed a 100% option on the 1,490-hectare Polar placer jade project, about one kilometre north of the Polar Jade mine, one of Canada’s most important jade operations.

Barely south of 60, Liard’s climate allows only a short working season. Electra has a 90-day prospecting program scheduled to begin shortly, with the four-person crew working under a seasoned jade prospector. Although the campaign will cover as much of Electra’s ground as possible, Polar will get particular attention.

Should the properties become operational, relatively simple quarry or placer mining would take place. No processing would be required, Costigan says.

You combine all these qualities and you have a fantastic, beautiful, strong stone that will compete with high-end marble.—John Costigan, president of Electra Stone

With the appointment of CiCi Yim to Electra’s advisory board, the company gained the expertise of the chief gemologist and jade specialist for the 24K Gold Company. Among other accomplishments, she holds a diploma from the Hong Kong Institute of Gemology and an MBA in supply chain management from Birmingham University in the UK. Electra has also created a jade marketing team and joined the Canada National Jade Research Institute.

Longer-term goals would have the company become a vertically integrated miner with its own trading arm and manufacturing operations.

A private placement closed this month with $850,000 in convertible debentures, of which $350,000 came from Costigan and the rest from a Chinese investor. Electra hopes to close another $750,000 placement soon while waiting for a shareholder vote on another $2-million placement by an individual subscriber that would result in change of control for the company.

Revenue comes to Electra from its Apple Bay project, a chalky geyserite quarry on Vancouver Island. Also known as aluminum silica, the product is shipped to a cement manufacturer in Seattle.

Having “inherited” Apple Bay as a money-losing operation during Electra’s restructuring, Costigan says, “We made some big changes and we’ve turned the corner. Our first profitable shipment was a few months ago.”

Meanwhile Electra shares began this month at $0.10, twice their mid-May price, and have so far spent most of June doing even better, reaching a 52-week high of $0.14 on June 18 and again on June 19. Not surprisingly, the stock’s performance boosts Costigan’s confidence. “As of today we’re the only public jade company in the world,” he says. “And that gives us a lot of first-mover advantages.”