9 minute read
2021 news in review
JANUARY 07: GOLDMAN SACHS PREDICTS POST-COVID-19 COMMODITIES SUPERCYCLE
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The 2020s will usher in a new commodities supercycle akin to the boom of the early 2000s, according to investment banking giant Goldman Sachs.
Goldman’s view on the imminent supercyle is predicated on how the world will recover from the COVID-19 crisis, with emphasis on policies supporting a green industrial revolution.
The world’s two largest economies – China and the US – will lead the global effort to decarbonise key industries, after China
recently committed to carbon neutrality by 2060 and US president-elect Joe Biden pledged to deliver a US$2 trillion green infrastructure programme.
This green industrial revolution ‘has the potential to create a capex cycle on par with the emerging markets-driven cycle of the 2000s’, according to Goldman.
The impact of a globally synchronised decarbonisation push on demand for energy metals such as copper, lithium and nickel would be dramatic. Goldman is particularly bullish on copper, with a 12-month target of $9,500 per tonne.
Q1
MARCH 17: CHINESE LITHIUM CARBONATE PRICES ROCKET UP BY 98% IN 2021
Lithium carbonate prices in China have almost doubled so far this year, according to latest data from battery supply chain research and price reporting agency Benchmark Mineral Intelligence.
Benchmark said average pricing for EXW China technical grade lithium carbonate was up 97.5% to US$11,700 per tonne in 2021, with continuing supply shortfalls seeing converters ‘scramble for units’.
Battery-grade material has gained a further 12.2% in the past two weeks to be up 88.4% this year, with the average pricing at $12,635 per tonne ‘on market shortage as many producers sell out of product inventory’.
Lithium hydroxide prices have also recorded a 9.1% increase in the past two weeks to $9,625 per tonne. Earlier this month, Benchmark reported that Chinese carbonate prices held a premium over hydroxide for the first time since April 2018, due to a build-up of hydroxide capacity in China.
2021 NEWS IN REVIEW
APRIL 30: COPPER HITS $10,000 PER TONNE AS ANALYSTS POINT TO FURTHER GAINS
The copper price has exceeded US$10,000 per tonne for the first time since 2011, as recovering economies turn to the ‘bellwether metal’ and mines struggle to keep up with rising demand.
Prices rose as much as 1.3% to $10,008 per tonne on the London Metal Exchange – putting copper in sight of its all-time high of $10,190 in February 2011 – before slipping back to trade near unchanged.
“The copper price has gone stratospheric and probably has further to go, which is a boon for miners who are currently making at least two dollars for every one they spend getting metal out of the ground,” said analyst at CRU Group Robert Edwards.
Since the end of the first COVID-19 wave last year, the copper price has more than doubled on the way to its current near-record value, based on increased demand from postpandemic economic stimulus and a broad longterm belief in the global decarbonisation trend, in which copper will play a crucial role.
Q2
JUNE 04 RMI LAUNCHES NEW ESG STANDARD FOR MINING SECTOR
US-basedResponsible Minerals Initiative(RMI) has launched a new ESG standard which seeks to further improve conditions for workers, the environment and communities across the mining sector.
The Responsible Minerals Assurance Process ESG Standard seeks to help miners navigate expectations by providing a set of criteria right through the supply chain, from mineral processors to smelters and refiners.
RMI – which counts more than 400 member companies – identified four major areas of focus for mining companies: environment, social obligations, occupational health and safety provisions and governance requirements.
“The RMI’s ESG Standard offers the most comprehensive set of environmental, social and governance requirements globally for facilities sourcing and processing minerals,” said Responsible Business Alliance vice president of responsible sourcing Leah Butler.
“This standard will help companies meet government, investor, customer and regulatory requirements, such as the expectations set by EU due diligence frameworks and the London Metals Exchange.”
2021 NEWS IN REVIEW
AUGUST 18: BHP APPROVES $5.7 BILLION SASKATCHEWAN POTASH PROJECT
BHP has given the green light for the development of the Jansen Stage 1 potash project in the Canadian province of Saskatchewan, in a move that it says will align the company with ‘future facing commodities in world class assets’.
The long-awaited decision paves the way for a US$5.7 billion investment in the project, which is expected to produce approximately 4.35 million tonnes of potash per annum with potential for further expansion. First ore is
targeted in the 2027 calendar year.
“This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations,” said BHP CEO Mike Henry.
Potash is a natural mineral fertiliser that is set to be required in vastly greater quantities in line with growing global population estimations. The Jansen project is located in the world’s best potash basin and is expected to operate for up to 100 years.
Q3
SEPTEMBER 28: AGNICO EAGLE TO BUY KIRKLAND LAKE GOLD IN $10.7 BILLION MERGER
Canada’s Agnico Eagle Mines and Kirkland Lake Gold have announced a US$10.68 billion merger of equals, creating a company with a reserve base of 48 million ounces of gold and an extensive pipeline of development and exploration projects around the world.
The companies said the deal will establish the new Agnico Eagle as the gold industry’s highest-quality senior producer, with the lowest unit costs, highest margins, most favourable risk profile and industry-leading ESG practices.
“The merger will create a best-in-class gold mining company operating in one of the world’s leading gold regions; the AbitibiGreenstone Belt of Northeastern Ontario and
Northwestern Quebec, with superior financial and operating metrics,” the joint statement read.
“Consolidation within the Abitibi will also provide the new Agnico Eagle with significant value creation opportunities through synergies and other business improvement initiatives.”
The new company is also uniquely positioned as the only gold producer in Nunavut and has profitable and prospective assets in Australia, Finland and Mexico.
2021 NEWS IN REVIEW
OCTOBER 06: ICMM MEMBERS COMMIT TO NET ZERO BY 2050 Recapping the biggest stories of the year in the global resources sector, quarter by quarter
A group of the world’s biggest mining companies have committed to a goal of net zero direct and indirect carbon emissions by 2050 or sooner, the International Council on Mining and Metals (ICMM) has announced.
The ICMM’s membership, which is comprised of 28 members that account for one third of the global mining and metals industry, have made the collective pledge ahead of the UN Climate Change Conference in November.
“ICMM members’ collective commitment to net zero scope one (direct) and two (indirect) greenhouse gas emissions by 2050 is a pivotal
moment in our history,” said ICMM’s CEO Rohitesh Dhawan in an open letter signed by the 28 chiefs of the world’s largest miners.
Several members, including Anglo American, Rio Tintoand BHP, have already made individual net zero commitments by 2050 or earlier, amid sustained pressure from environmental activists and shareholders.
Direct and indirect emissions will be lowered by accelerating the use of renewable energy at mine sites and reducing or eliminating the use of diesel trucks, Dhawan said.
Q4
NOVEMBER 09: NEWCREST TO BUY OUT CANADA’S PRETIUM IN $2.8 BILLION DEAL
Australia’s Newcrest Mining has entered into an agreement to acquire all outstanding common shares of Pretium Resources (Pretivm) it does not already own, in a deal that values the Canadian miner at US$2.8 billion.
Pretivm’s board of directors unanimously recommended shareholders vote in favour of the transaction and have entered into voting support agreements with respect to all of the Pretivm shares that they control.
Pretivm is the owner of the Brucejack gold mine in the highly prospective Golden Triangle region of British Columbia. Newcrest will become the operator and 100% owner of Brucejack following the transaction, which is currently targeted for completion by Q1 2022.
The acquisition fits in with Newcrest’s strategy to build a Canadian portfolio of assets following its listing on TSX last year. The Brucejack operation is located approximately 140 km from Newcrest’s Red Chris copper-gold mine.
“We are delighted to be expanding our presence in this highly prospective region in BC. Brucejack is a Tier 1 mine in a Tier 1 jurisdiction,” Newcrest CEO Sandeep Biswas said.
The International Mining and Resources Conference (IMARC) is where global mining leaders connect with technology, finance and the future. As Australia's most influential mining event, IMARC creates a global conversation, mobilises the industry for collaboration and attracts some of the greatest leaders in the mining, investment, and technology industries for three days of learning, deal-making and unparalleled networking.
HearHear from more than 250 mining leaders and resource experts with a conference program that covers all aspects of the mining supply chain. From exploration, to investment, production to optimisation through to new technologies and global opportunities. Alongside discussions on health and safety, renewable energy, critical minerals, and sustainability.
Furthermore, the exhibition will feature over 200 leading companies across the 13,000m2 expo floor showcasing the latest mining projects, equipment, and innovations the industry has on offer.
Due to ongoing travel and gathering restrictions, and the resurgence of COVID-19 around A Australia, the 2021 edition will take place from January 31 - February 2, 2022. The hybrid event will welcome Australian attendees in-person to Melbourne, and international attendees from more than 130 countries via an online platform. Attendees will be able to log in online to stream live and on demand conference presentations, participate in virtual meetings and interactive networking.
