Mining Sector Serbia 2020 by CorD Magazine

MINING

Sector 2020

Stevica Deđanski Ph.D., State Secretary, Serbian Ministry of Mining and Energy ● H.E. Sian Christina MacLeod, UK Ambassador to Serbia ● H.E. Kati Csaba, Ambassador of Canada to Serbia ● Eric Rasmussen, Director Natural Resources, European Bank for Reconstruction and Development (EBRD) ● Ivan Janković, Assistant Minister at the Serbian Ministry of Mining and Energy ● Branko Zečević, President of the Geological & Mining Association of Serbia (GRAS) ● Marnie Finlayson, General Manager of Rio Sava Exploration LLC ● Goran Galić, Regional Leader, Eastern Europe & Balkans, Cummins Distribution Europe ● Dr. Milinko Radosavljević, Director of the Mining Institute Ltd. Belgrade ● Aca Ilić, director, Mine and Flotation ‘Rudnik’ d.o.o. (Ltd.) ● Vasil Andreev, Founder, Owner and CEO of GEOPS Balkan Drilling Services ● Zoran Radisavljević, Owner, and Dejan Nikolić, Director, Geoing Group ● Nenad Stanković, NST Law ● Branislav Grbović, Project Director & Regional Director Southern Europe (SE) Mining and Minerals ● Aleksadar Milikić, Mayor of the City of Bor ● Nada Štrbac, Ph.D., Dean of the Technical Faculty in Bor ● Dr Mile Bugarin, Scientific Advisor, Director of Mining and Metallurgy Institute Bor ● Dejan Kovačević, President of the Municipality of Gornji Milanovac

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CONTENT

06 08

COMMENT

LAST YEAR SAW 16 MILLION TONNES OF ORE PRODUCED

STEVICA DEĐANSKI PH.D., STATE SECRETARY, SERBIAN MINISTRY OF MINING AND ENERGY

WE’VE INVESTED 245 MILLION DOLLARS IN SERBIA

DUNDEE PRECIOUS METALS INC.

SERBIAN MARKET BECOMING INCREASINGLY ATTRACTIVE H.E. KATI CSABA, AMBASSADOR OF CANADA TO SERBIA

MINING INSTITUTE THAT’S RECOGNISED ON THE MARKET

WE SUPPORT RESPONSIBLE MINING

SERBIAN LITHIUM IS UNIQUE IN THE WORLD

IVAN JANKOVIĆ, ASSISTANT MINISTER AT THE SERBIAN MINISTRY OF MINING AND ENERGY

DR. MILINKO RADOSAVLJEVIĆ, DIRECTOR OF THE MINING INSTITUTE LTD. BELGRADE

ERIC RASMUSSEN, DIRECTOR NATURAL RESOURCES, EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD)

EFFICIENCY & QUALITY IN AN ECOLOGICAL WAY

UK AMONG MINING SECTOR CHANGE LEADER

H.E. SIAN CHRISTINA MACLEOD, UK AMBASSADOR TO SERBIA

GORAN GALIĆ, REGIONAL LEADER, EASTERN EUROPE & BALKANS, CUMMINS DISTRIBUTION EUROPE

FROM DIESEL ENGINES TO HYBRID PLATFORMS

SERBIA – A LEADER IN EXPLORATION & MINING

NO DEFICIT OF MINING WEALTH IMMINENT

WE ACHIEVE WHAT OTHERS CANNOT

ZORAN RADISAVLJEVIĆ, OWNER, AND DEJAN NIKOLIĆ, DIRECTOR, GEOING GROUP

PLEDGE FOR THE FUTURE

ACA ILIĆ, DIRECTOR, MINE AND FLOTATION ‘RUDNIK’ D.O.O. (LTD.)

BRANISLAV GRBOVIĆ, PROJECT DIRECTOR & REGIONAL DIRECTOR SOUTHERN EUROPE (SE) MINING AND MINERALS

GREAT TO HAVE MANY COMPANIES EXPLORING IN SERBIA

NENAD STANKOVIĆ, NST LAW

STUDENTS ARE FUTURE ZIDJIN WORKERS

BOR’S BUDGET TOINCREASE THREEFOLD

EXAMPLE OF SUCCESS

ORE FROM BREZAK IS AGAIN ARRIVING

44 48 50

GOING FOR GOLD

NADA ŠTRBAC, PH.D., DEAN OF THE TECHNICAL FACULTY IN BOR

VASIL ANDREEV, FOUNDER, OWNER AND CEO OF GEOPS BALKAN DRILLING SERVICES

ADVANCING MINING WITHIN THE EPS SYSTEM

SERBIAN MINING FEVER

THE DEVELOPMENT OF MINING CAN REDUCE THE BRAIN DRAIN

BRANKO ZEČEVIĆ, PRESIDENT OF THE GEOLOGICAL & MINING ASSOCIATION OF SERBIA (GRAS)

ALEKSADAR MILIKIĆ, MAYOR OF THE CITY OF BOR

DR MILE BUGARIN, SCIENTIFIC ADVISOR, DIRECTOR OF MINING AND METALLURGY INSTITUTE BOR

DEJAN KOVAČEVIĆ, PRESIDENT OF THE MUNICIPALITY OF GORNJI MILANOVAC

RUSSIAN MINING IN 2020 – THE TOP TRENDS

FEATURE

INVESTING IN CHANGE

MARNIE FINLAYSON, GENERAL MANAGER OF RIO SAVA EXPLORATION LLC

FEATURE

THE BIG MINERS MOVING AWAY FROM COAL UK SET FOR MINING ‘REVIVAL’ POSTBREXIT

Supported by the Serbian Ministry of Mining and Energy EDITOR IN CHIEF: Miroslava Nešić-Bikić m.bikic@aim.rs DESIGNER: Jasmina Laković j.lakovic@aim.rs EDITORIAL MANAGER: Neda Lukić n.lukic@aim.rs PHOTOS: Zoran Petrović

COPY EDITOR: Mark Pullen SALES MANAGERS: Biljana Dević, b.devic@aim.rs Nataša Trifunović, n.trifunovic@aim.rs Vesna Vukajlović, v.vukajlovic@aim.rs Mihailo Čučković m.cuckovic@aim.rs

OFFICE MANAGER: Svetlana Petrović s.petrovic@aim.rs FINANCE: Dragana Skrobonja finance@aim.rs GENERAL MANAGER: Maja Vidaković m.vidakovic@aim.rs PUBLISHER: Ivan Novčić i.novcic@aim.rs

DIRECTOR: Ana Novčić a.novcic@aim.rs a.novcic@cordmagazine.com

E-mail: office@aim.rs; office@cordmagazine.com www.aim.rs; www.cordmagazine.com

MINING SECTOR 2020

Published by: alliance international media Makenzijeva 67, 11111 Belgrade 17, PAK 126909, Serbia Phone: +(381 11) 2450 508 Fascimile:+(381 11) 2450 122

THIS PUBLICATION IS FREE OF CHARGE The views expressed in this publication are those of the presenter; they do not

necessary reflect the view of publications published by alliance international media

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COMMENT

Serbian

MINING FEVER If it continues to develop at this pace, mining could contribute five per cent to GDP growth in Serbia. Is mining the ace up Serbia's sleeve?

s things stand, mining is Serbia’s ace. Confirmation of that is the ever increasing presence of foreign investors, whether those who are as yet working only in the field of exploration, or those who will soon need to progress from words to deeds and start actually exploiting mineral reserves. After languishing for decades, mining has announced that it could significantly increase its contribution to GDP... by up to five per cent, thereby becoming one of the most important drivers of Serbia’s economic development. This all relates to the most dynamic growth spurt in the economy, which is acknowledged by both domestic and foreign officials. And the confirmation of this is that the Serbian government has high hopes for this sector in the future. Confirming that Serbia is shuddering with mining fever is also the fact that the country has more than 130 active exploration sites and about 250 exploitation fields, where extensive work is underway. These are today investments worth in excess of 180 million euros, with a tendency for further growth, given that work is still continuing on the opening of new mines. A further reason for there being so much interest in mining in Serbia, interest which extends from America to China, is the adoption of the Law on Mining and Geological Surveys, which contains incentive solutions and ensures the cost-effectiveness of investments, all following contemporary world trends, which are a priority for every investor in this sector, both foreign and domestic. Serbia can be particularly proud of the fact that a team of Serbian and Anglo-Australian geologists employed by Rio

Tinto discovered a mineral deposit near Loznica that contains the mineral jadarite. The deposit, located in Serbia’s Jadar River Valley, is the only place in the world where this mineral has been found. Jadar is considered one of the world’s largest lithium deposits. This lightest metal on the planet is today mostly sought for the production of batteries for hybrid and electric vehicles. Of course, we shouldn’t expect the impossible or for miracles to happen overnight, because the mining sector is specific in that it requires time and years of active work for geological exploration in the field, which - apart from being expensive doesn’t necessarily mean that ore extraction will commence. On the other hand, we shouldn’t overlook the fact that all this only makes sense if Serbia remains the owner of its mineral resources. That’s especially so when it comes to ores like gold and lithium, which are extremely expensive and highly sought-after around the world. It is estimated that, by 2022, lithium from Serbia will account for ten per cent of world production and more than 90 per cent of production in Europe. We should never forget the example of Norway, which was a poor country until 60 years ago, but with the discovery of oil became one of the most developed countries in the world. And that was only because no one but the Norwegians had a stake in that black gold. It seems that, of all other economic indicators, mining will be particularly important in the coming years, providing jobs for tens of thousands of workers in a sector that currently has about 25,000 employees.

Jadar is considered one of the world's largest lithium deposits. This lightest metal on the planet is today mostly sought for the production of batteries for hybrid and electric vehicles

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INTERVIEW

STEVICA DEĐANSKI PH.D., STATE SECRETARY, SERBIAN MINISTRY OF MINING AND ENERGY

LAST YEAR SAW 16 MILLION Tonnes Of Ore Produced The largest number of exploratory works relate to metals – copper and gold, lead and zinc, but also lithium and boron. Serbia will work in future on bringing some major world companies to the country

lthough 72 companies dealing with geological exploration are currently present in Serbia, this doesn’t mean that our country has bequeathed its mineral resources to someone, including foreigners, while mineral resources are under the ownership of Serbia, says Stevica Deđanski Ph.D., State Secretary at the Ministry of Mining and Energy, speaking to CorD. One of the most commonly repeated statements, from the socialist era to this day, is that Serbia is a country with great natural (and mineral) wealth. The current balance of reserves in Bor and Majdanpek alone guarantee continuous production for the next 50 years. How large are the total reserves of lignite, which we mostly use to produce electricity? What is the situation with brown coal in the vicinity of Štavalj and how many sites are being explored and exploited today? - The total balance of reserves of lignite amount to 3.1 billion tonnes. Most of those reserves certainly account for the

coal that is being exploited from the surface, in the scope of activities of EPS [state-owned electric utility power company Elektroprivreda Srbije] and used for electricity generation. Likewise, within the framework of public enterprise PEU Resavica there is a branch operating in Štavalj, where exploitation is performed using techniques and technologies under the scope of underground exploitation. The Štavalj desposits are certainly promising from the aspect of achieving the full value of current reserves of 200 million tonnes of coal through the production of electricity. The site in question certainly needs to be further explored and for the quantity and quality ot be increased, i.e. in the category of verified coal reserves. Zidjin Bor is the new owner of RTB Bor, where the results of operations are impressive to date. What is it that attracts foreign investors like this – and many others – to invest in Serbia: proven mineral reserves, incentives granted by the state to take over abandoned giants, or something else?

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- The fact that more than 2,200 occurrences and deposits of mineral resources have been registered in the Republic of Serbia testifies to the fact that we have a significant wealth of mineral resources. Deposits of mineral resources have been confirmed at more than 500 locations. The legal regulations governing the field of mining are harmonised with the world’s best practises and standards. Transparency is pronounced in procedures and security regarding lease collections for ores. All of the aforementioned, coupled with the proactive work of the competent ministry on attracting new investments, testifies to the fact that an environment has been created which provides security for both existing and potential investments in this sector. Verified geological reserves in Bor and Majdanpek total around 1.38 billion tonnes of copper, gold and silver. What does this mean for Serbia; how is exploitation progressing, how much of these reserves are extracted annually and what is their value? - The total balance of reserves in Bor and Majdanpek are somewhat smaller, but are still large enough to ensure the certain exploitation of copper for a longer period, which certainly provides security for that region, both in terms of the employment of the population and the region’s further development. During 2018, 16 million tonnes of ore was produced. With further development and an increase in mining capacities, but also capacities for processing ores, we are reaching a situation in which there will be a significant increase in the production of copper cathodes from our own raw material, which will impact greatly on GDP growth, i.e. on the economy of the entire country.

Following the announcement that Canadian company Erin Ventures has found several abandoned coal mines and huge reserves of boron ore near Baljevac on the River Ibar, and that company Rio Tinto plans to open three mines in Serbia, many people have questioned how many companies are conducting research on our territory and which minerals they are seeking. How many companies are engaged in geological exploration in Serbia today, and is it true that

most of this research relates to raw metals, lithium and boron? - There are currently 72 companies present that deal with geological surveying. Of the total number of companies, 31 have foreign capital. Most of the research relates to metals, specifically copper, gold, lead and zinc. Likewise, a fairly large number of research fields relate to lithium and boron.

Further development and an increase in mining capacities will impact greatly on GDP growth, i.e. on the economy of the entire country

With the assumption the noted quantities of copper are as high as cited, what is Serbia doing with that valuable raw material; is it exported and, if so, to whom? Do some quantities remain in Serbia? Where are other deposits of this ore? - Copper is a metal that is traded on the stock market, i.e. the stock market determines its price on the basis of supply and demand. Company ‘SERBIA ZIJIN COPPER BOR’ makes placements in accordance with its business policy, selling copper as a final product. The largest deposits of copper and gold are certainly in the Bor Metallogenetic Zone.

We have also become known far and wide for lithium. What quantities of lithium do we have as proven reserves today; on which territory; and what is the potential of this mineral, given that there is ever more talk about battery-powered electric cars; and will this Serbian lithium be used to produce such batteries? - We currently don’t have proven lithium reserves. Rio Tinto is in the final stages of exploration and we expect the verification of reserves very soon. At present, we can mention the potential of about 136 million tonnes of lithium ore at the Jadar site. Given the quality of the ore and the prospects of the area, it is certain that Serbian lithium will be used in the production of batteries that can be used for various purposes. 9

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There are also presumed large reserves of the mineral Jadarite in the vicinity of Loznica. If the estimates of U.S. and Serbian geologists working on the Jadar project turn out to be correct, would Serbia be able to meet as much as 20 per cent of the world’s total demand for this ore? How high have reserves been estimated at so far; is research still underway or has exploitation begun? - As I stated previously, we can currently talk about the potential of the Jadar site, which starts from around 136 million tonnes of ore. With the opening of a mine and the launch of the exploitation and processing of ore at the site in question,

it will certainly be possible to service a large part of the world’s total demand for this mineral, which totals over 10%.

Does Serbia have the money to research and exploit its own wealth of mineral resources? How long do exploratory works last; what is the value of those activities and did we have to hand over all the mining potential to foreigners? What would have happened if we hadn’t granted them access to local mines? - Irresponsible and ignorant people are attempting to create an erroneous picture in the public. The Republic of Serbia hasn’t handed over its mining potentials to anyone, including foreigners. Raw mineral resources are owned by the Republic of Serbia, and companies receive the right to explore or exploit those resources in accordance with the law. They pay fees for that right and engage Serbian companies and workers. Likewise, the Republic of Serbia, via the Serbian Geological Institute, performs basic geological surveys, in accordance with financial possibilities. Serbia’s policy – as of seven years ago, to the present day and in the future – is a policy to protect the interests of our country and its economic development. I can state freely that we’ve represented this policy, and the stance that I always defend publicly, since Aleksandar Vučić came to power. That was the beginning of the liberating of Serbia from bad practises and poor, non-transparent operations. The result of that is an enormous increase of interest in investing in our country among both domestic and foreign companies. This is shown very clearly with the presence of the world’s largest mining companies, such as Australia’s Rio Tinto, America’s Freeport, China’s Zijin, Canada’s Dundee, Mundoro and Medgold, and the very recent arrival of Brazil’s Vale - the third largest company in the world. I cite this as an example of interest in Serbia because when such large companies invest funds somewhere that only serves to shows two things: and those are great potential and an opportunity to generate profit, as well as certain and faith in the secure policies in place in that country. We must admit that we didn’t have any of that just seven years ago.

The fact that more than 2,200 occurrences and deposits of mineral resources have been registered in the Republic of Serbia testifies to the fact that we have a significant wealth of mineral resources

When it comes to Jadarite, we are talking about a rare mineral that contains both boron and lithium – two metals with a huge spectrum of commercial use in industry, agriculture and medicine. Are we using it for this purpose domestically, or is that still being done by foreign companies? - Boron and lithium are present in the products of domestic industry to an extent. With the opening of a new mine and a plant for processing raw materials, the possibility is created to open new production facilities for products that will contain these two elements. As stated by President Vučić, Serbia’s priority is to process some of these ores here and to use them for finished products. In the coming period, in accordance with these intentions of the Presi10

dent, we – as a state – and also foreign investors will work to bring some major world companies that can work here and deliver final products.

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ADVANCING MINING WITHIN THE EPS SYSTEM

BUSINESS

EFFICIENCY & QUALITY

In An Ecological Way

he stable and efficient production of electricity, as well as a reliable supply, form the basis of Serbia’s economic development and improving the quality of life of citizens. On the basis of Serbia’s available resources, the state has a strategic commitment to also generate electricity from coal, which is why mining represents the fulcrum that national electric utility Elektroprivreda Srbije (EPS) is committed to strengthening. It used to be sufficient for there simply to be enough coal, especially during the 1980s and ‘90s, when Serbia was going through difficult times. Today, in the two mining basins that comprise the “pulsing vein” of Serbia’s energy, Kolubara and Kostolac, EPS bases mining production on highquality management, energy efficiency, labour productivity and satisfying Europe’s environmental standards and norms. Coal from the Kolubara Mining Basin produces as much as 52 per cent of Serbia’s total electricity. This basin supplies about 30 million tonnes of coal annually. Two essential projects that are underway at Kolubara will provide sufficient quantities of high-quality coal for the decades ahead. These are the new digs at Field “E” and “Radljevo”. Production begin in 2018 at Field “G”, which contains excellent quality coal, representing a total investment of 160 million euros.

In order for extraction technology to be significantly improved and for the quality of coal to be unified, finalisation of the very first green project at EPS is underway - “Protecting and Advancing the Environment in the Kolubara Coal Basin”. This “green” project, worth €181 million, enables the increasing of the efficiency of the operations of thermal power plants, reducing negative impacts on the environment and improving energy efficiency. In Kostolac, where the first new thermal block is being built in Serbia after three decades, a project is underway to increase the capacity of the Drmno Mine from nine to 12 million tonnes of coal annually, precisely in order to provide sufficient quantities of high-quality coal for the new 350 megawatt block. With this investment of €613 million, EPS will gain a modern, highly efficient block that satisfies all domestic and European environmental criteria. It also included the acquisition of new, impressive equipment for mining operations, such as a landfill with a capacity of 8,500 cubic metres per hour in which $18.9 million has been invested. The second phase of the project to modernise TPP Kostolac B, which implies the construction of a new block and increasing production at the Drmno Mine, has a total value of as much as $715.6 million. The future of this branch is the West Kostolac Mine in the village of Dubravica, where coal deposits of 350 million tonne have been discovered. According to announcements, the implementation of investments worth around 100 million euros, for the procurement of mining machinery necessary for extracting the discovered deposits, will soon commence. In the meantime, the priority is on investments in mining equipment, such as the new BTO system for the Drmno Mine, which was realised from 2016 to 2019 and is worth $97.6 million, followed by reconstruction of the system for exporting coal from PK “Drmno” in which 73 million euros has been invested, as well as the procurement of auxiliary machinery.

Colossus on the move Under the scope of preparations for the opening of the Radljevo Mine, EPS experts performed the most complex and longest transportation of production equipment in the history of the Kolubara Mining Basin and EPS. The rotary excavator “rodent 10”, weighing more than 1,600 tonnes, travelled 24 kilometres. Along the route, this gargantuan digger, which is 30 metres tall and 20 metres wide, traversed the Belgrade-Bar railway, the Ibar Highway and the Kolubara river, creeping past numerous power lines along the way.

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INTERVIEW

H.E. SIAN CHRISTINA MACLEOD, UK AMBASSADOR TO SERBIA

UK Among Mining Sector

CHANGE LEADERS Finance in mining is especially important, as mines - and the infrastructure that supports them - are very capital intensive

K mining companies have turned towards new solutions and strategies, especially to digital technologies: innovative and sustainable mining is the future. Proven expertise and a healthy business environment attract international institutions to see UK standards as a model, says the UKâ&#x20AC;&#x2122;s ambassador to Serbia Your Excellency, the UK is a world economic powerhouse and certainly a desirable economic partner for most countries around the world. Mining has played a significant role in your history, and to this day the UK remains one of the leading countries for mining supply chain companies. What has been the secret to success for the advancement of the mining industry in your country? - Mining has indeed played an important role in our history over many centuries, with metals extraction dating back perhaps 4,000 years. My own mother comes from a coal mining town in the Welsh valleys.

Minerals have played an important role in our economic growth and success. We take a holistic approach to the modern mining sector, recognising that it isnâ&#x20AC;&#x2122;t only extraction that counts, but rather that this is an intricate web of financial regulation, education and skills, corporate law, environmental and tax policy, infrastructure development and so on. Finance in mining is especially important, as mines - and the infrastructure that supports them - are very capital intensive. Our position as a global financial centre for the mining industry is built upon a trusted legal and regulatory framework that supports mining development and finance. Four of the top five leading globally diversified mining companies are listed in London. For a mine to flourish requires a robust governance and policy framework that articulates the responsibilities and rights of stakeholders clearly. It is important to plan economic, social and ecosystem solutions that work for all. Good professional service providers delivering legal, financial, due diligence and technical expertise

Mining can support local development to a large extent, including through the creating of employment

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to miners, owners, investors – and governments – are important too. In recent years, UK mining companies have turned towards new solutions and strategies, especially to digital technologies: innovative and sustainable mining is the future. Proven expertise and a healthy business environment attract international institutions to see UK standards as a model. UK companies have developed extensive operational excellence and are themselves required to demonstrate integrity in areas ranging from human rights, occupational health and safety, anti-corruption and transparency in reporting, through to sustainability and the environment and carbon footprint reduction. In the advisory sphere, UK consultancies deliver expert advice to global organisations on the efficient adaptation of business practises to satisfy these standards. The mining industry has been growing through transformation in the last few decades. Digitisation and automation in particular have been singled out as factors that will continue to significantly shape the way business is done. Your own country has been embracing these changes, and has managed to benefit from them. What are the key messages you could pass on to Serbia on this topic. - The world is changing, society’s needs are changing and our industries are changing. Whereas for previous generations coal mining was a major source of energy generation and employment, we are increasingly focusing on reducing environmental impacts, including through the development of lower carbon alternatives and, in particular, renewable energy sources. Adaptable skills become ever more important as the pace of technological change increases. Mining regions can also diversify economic strategies, and avoid an over reliance on exploitation of a primary ore. Serbia, for example, is rich with lithium and borate, which can be used in so many different future applications. The potential for developing downstream supply chain industries and boosting local economies is very real. Mining, of course, can also support a local manufacturing sector producing content for use in operations and creating employment. Forward looking government strategies and good education and skills are a winning combination.

mining. UK mining companies are turning towards new solutions and strategies, especially to digital technologies. Introducing automatic processes can help remove people from dangerous working conditions. In turn, automation creates a demand for new jobs in areas such as data processing and software design. These can be paid better than the manual jobs they replace. The UK has a world class reputation in higher education, and specifically in the technical disciplines that are needed for the mining industry, including world class geoscience, minerals and engineering research centres. We are now also developing a wealth of knowledge and expertise related to low-carbon technologies, sustainability, biodiversity and water management. Environmental issues are another important factor affecting the future direction of the mining industry. UK mining companies are working closely with universities, government and environmental experts to shape practises so as to address environmental and climate challenges. Tackling climate change is a very high priority for the UK Government: we will be hosting the next UN climate summit, COP 26, in Glasgow in November. How do you see the future development of UK-Serbia relations in the mining sector? - UK investment and expertise in Serbia’s mining sector is an important part of the relationship between our countries. Before arriving here as Ambassador last summer, I met representatives of companies to discuss their current activities and future plans. But our support to the sector goes beyond our engineering and scientific specialists. For a flourishing mining industry, a country needs a robust governance and policy framework. Mining is a complex business that needs clear responsibilities and rights for all stakeholders, from investors to local communities. The UK remains a committed partner in Serbia’s reform efforts, and we are proud to be one of the largest donor countries. Our support through the Good Governance fund has helped yield great results that are recognised through Serbia’s improved ranking on the Doing Business list. A healthy business environment with a clear legal framework that is applied fairly, transparently and predictably is essential for attracting high-quality businesses and enhancing the reputation of a country as a destination for investment. I have every intention of continuing UK support for the creation of such an environment here in Serbia.

This is a complex business that needs clear rights for all stakeholders, from investors to local communities

How has the UK embraced new trends in mining? - The United Kingdom is one of the leaders of change in the mining industry today. We see the future in innovative and sustainable

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BUSINESS

MARNIE FINLAYSON, GENERAL MANAGER OF RIO SAVA EXPLORATION LLC

INVESTING In Change

Together with the Government of Serbia and other industrial players, international mining and metals company Rio Tinto is working to change the image of mining in Serbia, and has so far invested $200 million in the lithium-borates Jadar Project

io Tinto’s R&D experts have built a small testing facility that has to date conducted more than 2,000 tests to find new technology for processing the mineral Jadarite, according to Mrs. Finlayson, the Rio Tinto representative speaking in this interview for CorD. Serbian PM Ana Brnabić and Energy Minister Aleksandar Antić recently met with Rio Tinto’s representatives who are working on the development of the Jadar Project. How much support do you have from the government when it comes to implementing your activities in Serbia? - Mining in Serbia is experiencing a revival and the Government is well aware of its long-term economic potential. This revival is partly due to the reformed regulatory framework, which has attracted a number of leading players in the fields of geological exploration and mining to Serbia. As one of the global leaders in terms of mining and related health, safety and environmental standards, Rio Tinto is well positioned to contribute to the Serbian mining sector. Together with the Government and other industry players, we are working to change the image of mining in Serbia and are proud to contribute to Serbia’s ambitious reform agenda. The strong support of the local government in Loznica, as well as the communities around the deposit, has been, and will remain, fundamental for our ability to develop our plans. In July 2017, we signed a Memorandum of Understanding with the Government establishing a foundation for cooperation on the development of jadarite deposits. As we move forward with the project, we will work closely with various Serbian institutions on the preparation and adoption of strategic planning documents, environmental and other

permits, road and utility infrastructure and the utilities necessary to support the potential development of this large and modern industrial complex. When do you expect to complete your geological surveys and how much has Rio Tinto invested in Serbia to date? - Ever since the formal classification of jadarite as a new mineral in 2007, we have achieved a lot and have come a long way in understanding this unique mineral and its deposit. However, when you find a mineral, such as jadarite, which has never been found in the world before, managing the timetable is never a simple task. The work on this world-class lithium borate deposit discovered by Rio Tinto in 2004 is extremely complex and timely. When you add to that our industry-leading standards in all aspects, millimetre-sized precision and an enthusiastic team of Serbian and international experts, we are proud of our progress, phase by phase, day by day. So far, Rio Tinto has committed more than US$200 million to the project and we expect to complete our current study phase in mid-2020. We have to date drilled and tested more than 200 km of core samples, the equivalent of twice the distance from Belgrade to Jadar as the crow flies. Rio Tinto’s R&D experts have built a smallscale test plant in our research centre in Melbourne to find a novel jadarite processing technology. Designing the mine and technical facilities has been a challenging piece of work. We’ve had to install more than 5,000 pieces of equipment at the pilot processing plant, in collaboration with 40 world-renowned international suppliers. The detailed engineering is still being processed, but some interesting statistics are emerging. For example, the processing plant will need more than 225 km of pipework.

We are working to change the image of mining in Serbia and are proud to contribute to Serbia’s ambitious reform agenda

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Is it correct that the Jadar Project being implemented in the vicinity of Loznica is among your company’s top development projects at the global level? In which phase is the project at present and are the levels of reserves of the jadarite mineral known? - Rio Tinto has a long and proud history of mining exploration and the Jadar Project is a result of our hard work to find minerals that are essential to human progress. We have to prioritise our work rigorously and the investment we have made in Jadar to date is testament to its potential. The project is still in a pre-feasibility phase and there is still much work to be done – continued technical analysis, planning and understanding the global economic potential of this mineral before the project can move beyond the study phase [towards construction and operation]. Rigorous ore body knowledge studies and analysis conducted over the years have increased confidence in the size and composition of the Jadar ore body and we’ve declared Jadar Mineral Resources at 136 million tonnes. The total equivalent of borate product resources are more than 21 million tonnes and equivalent lithium product resources are 2.5 million tonnes, confirming that Jadar is a significant source of borates and lithium.

We have to date drilled and tested more than 200 km of core samples, the equivalent of twice the distance from Belgrade to Jadar as the crow flies

Could you explain to us precisely what the Jadar project implies and encompasses. As far as we know, it relates to the

development of underground mining. What else does this project entail specifically and what are the expected end products? - We intend to not only mine, but also process jadarite in order to produce two valuable final industrial products, the first is battery-grade lithium carbonate, and the other, the more-established boric acid. So, Jadar should be seen more as a combined underground mine and mineral processing project, on a brand new, greenfield site. It will need to be constructed from scratch and once developed can become a globally significant source of lithium and borates. The borates business is well established. The lithium market is relatively new and still developing. Our goal for the project is to develop a long-term technically, environmentally and economically sustainable operation. We want to position Jadar for success. Jadar could produce a battery grade lithium carbonate and thereby add significant value to the final product produced in Serbia.

It is well known that the Jadar Project encompasses one of the world’s most significant deposits of lithium and borates. How useful will this be for you when it comes to the production of lithium batteries and what else can the jadarite mineral be used for? - Both lithium and borates are essential building blocks for modern life and critical for human progress. Lithium is used in a vast array of products, most notably 15

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batteries for hybrid and electric cars. Lithium has an important role to play in the development of the post-fossil fuel economy. Through its application in efficient battery storage, lithium is vital to the development of renewable energy sources, including the anticipated widespread expansion in the use of electric vehicles. The Lithium battery value chain is relatively new and highly sophisticated, requiring specific technical expertise. Borates are used in wind turbines and insulation fibreglass for buildings, as well as in a wide range of everyday products, from screens for TV sets and smartphones to detergents and fertilisers. Sodium sulphate, our third product, is used in the textile industry and in the production of powdered detergents and glass.

ing innovative ways to minimise energy use and carbon emissions, manage water responsibly and reduce waste. We respect the value of natural resources and believe that environmental stewardship is essential to our relationships with local communities, regulators and others. We are developing an Environmental Impact Assessment that will be reviewed by the Serbian Government and open for public consultation. This will cover potential environmental impacts of the mine and facilities, including our proposals for ultimate closure and waste storage. Our proposals are based on Rio Tinto’s exacting global standards and we hope will set a benchmark for Serbia.

We consider the environmental impact of all our activities right from the start and Rio Tinto is pioneering innovative ways to minimise energy use and carbon emissions

Both Serbian and international experts are engaged in the preparation of necessary studies and analyses; and what kind of experience have you had with your colleagues from Serbia? - During the ongoing study phase, the project is supported by Serbian and international experts form a range of disciplines, including underground mining, mineral processing, engineering and community relations. Together, we have been conducting extensive environmental and socioeconomic analyses, and we are proud that the testing has involved the active participation of a number of Serbian graduates. They will also form an important part of our future processing and engineering team. I am really proud of our strong team of talented individuals, who have made the Jadarite processing formula work.

To what extent does Rio Tinto take care of the natural environment of the Loznica area and what environmental studies are you working on? - At Rio Tinto, we believe that the materials we produce are essential to human progress and that we must produce them responsibly. We consider the environmental impact of all our activities right from the start and are pioneer16

And to conclude, on a more personal note, mining is usually perceived as a “man’s job”. How is it to be a woman in mining? And considering that you’ve been in Serbia for some time now, how do you like the country? - The image of miners with coal-stained faces as perceived in a Charles Dickens’ novel has long been consigned to our history. In addition, for us, mining in the 21st century is no longer a ‘Man’s job’. Gender equality and diversity is of great significance to our company and is one of the reasons that I’m so proud to work for Rio Tinto. Many of our pioneers in our 145-year history have been women and we intend to extend this culture to Jadar as well. I have met many wonderful people during my time in Serbia. When not working, I enjoy nothing more than travelling around the country, experiencing the great beauty, traditions and people of Serbia. My family and I love skiing on Kopaonik and were delighted to attend our Serbian friends’ family Slava. I’m also very passionate about sharing my own insights into the Serbian culture with the many visitors I have from around the world. They always leave Serbia with a very different, positive view, impressed by Serbia’s great talents, opportunities and potentials for further development.

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DUNDEE PRECIOUS METALS INC.

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We've Invested 245 MILLION DOLLARS IN SERBIA

September 2018 saw the company release an updated undee Precious Metals Inc. is a Canadian mining mineral resource assessment for the areas of Bigar Hill, company that’s listed on the Toronto Stock ExKorkan, Korkan West and Kraku Pešter. They are part of change and has been conducting exploration works DPM’s Timok Gold project, which is estimated at 46.9 million in Serbia since 2004. The company currently postonnes, evaluating an average of 1.32 grams per tonne of sesses the rights to nine exploration permits, which cover a gold in the specified resource category total area of approximately 525 square for 1.996 million ounces of gold. kilometres in the area located in the DPM’s current leading The Timok Gold project is curmagmatic complex of Timok in eastern project is Timok gold Serbia and the magmatic complex of rently in the preliminary economic – a newly discovered style Lece in southern Serbia. During its assessment phase, while the comfifteen-year presence in the country to pany is simultaneously working on of mineralisation on the date, the company has invested around the preparation of a feasibility study. western climbs of the Timok 245 million Canadian dollars. It is planned for completion in the first magmatic complex DPM’s current leading project is half of 2020, after which a feasibility Timok gold – a newly discovered style study for the Timok Gold project is of mineralisation on the western climbs of the Timok magexpected to begin. In addition to developing the Timok Gold project, the matic complex. As part of this research, the company has company is continuing its research activities based on engaged with local communities, especially the Municipality other exploration permits in Serbia. of Žagubica, where most of the work is being done. 17

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INTERVIEW

H.E. KATI CSABA, AMBASSADOR OF CANADA TO SERBIA

SERBIAN MARKET Becoming Increasingly Attractive

Canadian companies seek markets with effective legislation, predictability, reasonable tax regimes and competitive mining regulations

erbia recently underwent a fiscal consolidation process that placed a limit on employment in the public sector, which impacted on the administration’s ability to respond to the growing needs of the private sector. On the other hand, many administrative procedures in Serbia have been shortened, and the construction sector is a good example – says Canadian Ambassador to Serbia Kati Csaba, speaking in this interview for CorD. Canadian companies have been present in this field in Serbia, among 25 other competing companies. Could you tell us how difficult or easy it is to invest in Serbia? - The Government of Serbia has been putting significant effort into improving the overall business environment, in order to attract foreign and domestic investors and unlock its economic potential. This was demonstrated by Serbia moving up four positions on the World Bank’s Doing Business list, an excellent result. Data on incoming FDI over the past couple of years also shows how the Serbian market is becoming increasingly attractive. Canadian mining and exploration companies are well known for their international presence and interest in investing their funds in global projects. Our companies look for markets with effective legislation, predictability, reasonable tax regimes and competitive mining regulations. Over the past fifteen or so years, a number of Canadian exploration companies have initiated projects across Serbia, which

confirms - on the one hand - the increasing attractiveness of Serbia’s mineral resources deposits, and - on the other - the enhanced business environment in the country. The year 2015 marked a significant achievement when, through the joint efforts of the Ministry of Mining and Energy and the local and international mining community, Serbia adopted its new Law on Mining. This legislation provided needed amendments to permitting procedures, defined the new tax regime and contributed to the growing international interest of mining and exploration companies. Vale Canada, the third largest global base metals company by market capitalisation, recently decided to invest in Serbia, and I am convinced that this is at least partially due to Serbia’s amended legislation. All of this confirms both the attractiveness of Serbia’s minerals sector, as well as the interest of Canadian companies in this sector based on its mineral potential, enhanced legislation and long history and tradition of mining. Competing companies in Serbia have come across more or less the same problems as Canadian companies. What is the biggest problem when it comes to implementing a job in our country - slow administration, lengthy waiting times for permits etc.? - We all know, and businesspeople will confirm, that every industry faces its own challenges. These challenges can include the need for enhanced legislation, strengthened administrative capacities, or more transparent procedures. Challenges can also be related to

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limited infrastructure or a lack of access to key data. However, we have to be careful not to put all the blame on public administration and to keep in mind the overall economic and social situation of a country. Serbia is an emerging economy, striving to reach the level of economic development of EU countries. The country has recently gone through a fiscal consolidation process, which, for example, placed limits on public sector employment. That affected the administration’s capacity to respond to the growing demands of the private sector. On the other hand, many administrative procedures in Serbia have been shortened, with the construction sector serving as a good example. Public administration efficiency and investments in infrastructure have improved over the past couple of years, and Canadian companies share that opinion. To be honest, while Canada is perceived as a global leader in mining, our country has also recently faced certain challenges in the mining industry. This led the public sector, industry and expert associations in mining in Canada to come together and consider the situation, and resulted in a series of recommendations on how to improve different aspects of mining to bring Canada back to its leading position. Canadians are big believers in dialogue and we carefully nurture this culture. We are happy to share that experience with the Serbian mining community, as we did in 2015 through our active engagement in the consultation process to draft the new mining law. Our Embassy was very proud of its role in that process and with the results achieved. Considering that mining is an area in which investments are made over the long term and returns on investments take even longer to realise, what are the future plans of Canadian companies in Serbia? Will they remain exclusively in the area of mining, or will businesses extend to other areas, and, if so, which? - The life cycle of a mining project, from exploration and development to closure, is very long and equally complicated. It sometimes takes 20 years and 10,000 drilling holes for a company to develop a mine. This lengthy process includes investments often worth several hundred million dollars out of which 75 per cent remain in the local economy through wages, taxes and fees. I want to emphasise the importance of the mineral exploration phase in the development of any mining project. While exploration is perceived by many as a ‘drilling-only’ period, this phase actually brings strong financial and non-financial benefits to the country and local communities.

Canadian mining companies in Serbia are all still in the exploration phase of their projects, with some exciting findings. They are primarily exploring for copper and gold, but also lead, zinc, lithium, silver and boron. Their projects are located in almost every region in Serbia, including Bor, Majdanpek, Raška, Valjevo, Loznica and Bosilegrad. We are aware that local authorities have a strong interest in witnessing the opening of new mines in Serbia. So do we! However, we have to understand the entire process of exploration and exploitation and possibly separate the two in order to manage expectations. Companies start their exploration work only where they think they have a good chance of success, but there is no guarantee that they will be successful – not every exploration project leads to the opening of a mine! That being said, we are hopeful that the exploration work being done by Canadian companies leads to findings and investment decisions in the future that, in turn, result in the opening of some new mines, that will be of benefit of everyone. Canadian companies are interested in Serbia as a market and our Embassy’s trade team receives enquiries every day with regard to possible activities in this market. I am very proud to see companies like Molson Coors, Magna, Bombardier and others being present or showing an interest in Serbia. Our trade colleagues, here at the embassy and at our ministry in Ottawa, work with many SMEs from Canada and local partners in Serbia to develop stronger economic ties between our two countries, and we hope to see many more companies flying here for business. Maybe even with a direct flight from Toronto one of these days! Canadian mining companies are also present in North Macedonia. What specifically are they doing there? - Canadian companies are primarily investing in mineral exploration projects in North Macedonia. However, lately they have shown interest in the aviation industry, ICT and the car parts industry. The country has recently gone through some painful but necessary processes to unlock its political and economic potential, which we hope will result in positive outcomes for the people of North Macedonia. The largest Canadian mining investment there, Euromax’s exploration in Strumica, is currently on hold due to some administrative issues. We hope to see that resolved soon, so that the investment can proceed and bring important economic benefits and jobs to the local community.

It sometimes takes 20 years and 10,000 drilling holes for a company to develop a mine

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BUSINESS

GORAN GALIĆ, REGIONAL LEADER, EASTERN EUROPE & BALKANS, CUMMINS DISTRIBUTION EUROPE

From Diesel Engines TO HYBRID PLATFORMS Cummins has a direct presence in Serbia, as a subsidiary of Cummins Inc., which demonstrates understanding for this market, especially in the area of mining

he company is present in the Western Balkans, while the equipment powered by Cummins engines includes underground loaders and dumpers, dumpers and hydraulic excavators used in surface mining for copper and coal, says Cummins Regional Leader Goran Galić. Cummins West Balkans is a company that deals with sales and maintenance of diesel and gas-powered engines for all types of vehicles, but also mining equipment. What exactly do you do; who do you supply in Serbia, how long have you been present here? - Cummins Inc. (www.cummins.com) is a corporation of complementary business segments that design, produce, distribute and service a broad portfolio of energy solutions. The company’s products range from diesel and gas engines to hybrid and electric platforms, as well as technologies related to powertrain, including battery systems, fuel systems, transmissions, filtration, emissions solutions and power generation systems. Headquartered in Columbus, Indiana (U.S.), since its founding in 1919, Cummins employs approximately 62,600 people who are dedicated to creating a more prosperous world through corporate responsibility priorities: education, environment and equal opportunity. Cummins West Balkans is part of Cummins Distribution Business Europe, which supports more than 25,000 users across nine regions and from 25 locations around Europe. Cummins has been present in this region for decades. What sets us apart, however, is the fact that Cummins is present in Serbia directly, as a subsidiary of Cummins Inc. This, among other things, demonstrates an understanding for this market and the potential it offers, particularly in mining, and, at the same time, the desire to provide the best possible support to the end user and our partners.

What’s your experience in mining like; what equipment do you supply to the industry and are you also present elsewhere on the territory of the former Yugoslavia? - Cummins is present in all mining regions: Bosnia-Herzegovina, Serbia, Montenegro, N.Macedonia, Bulgaria. The equipment that’s powered by Cummins engines in the Western Balkans includes loaders and dumpers for underground exploitation, dumpers and hydraulic excavators in surface mining of copper and coal, ancillary equipment (bulldozers, piplayers) in surface coal mining in Serbia. These range from 4.5L engines like the QSB4.5 to 60L models like the unsurpassed QSK60. What are your experiences of doing business in Serbia; do you have major competition and how do you manage to stay competitive on the market? - Cummins is certainly the world leader among manufacturers of diesel engines that drive mining equipment, especially when it comes to high-capacity equipment. The situation is very similar in the Western Balkans, where Cummins successfully retains its leading position. The key to maintaining this position is the service we provide to our mining partners. Our key task is to optimise the total operating costs of equipment for owners, so-called TCO – total cost of ownership. This implies minimising downtimes, remote monitoring of engine operation, extended service intervals, minimal response time for intervention, use of superior filtration technology, use of superior working fluids and genuine spare parts. We are awaited in the future by the retaining and improving of our position, as well as the development of support for underground exploitation, which is, unequivocally, the future of this region. In addition to this, we also aim to maintain our leadership position in the implementing of new technologies that are also fast becoming a reality in mining.

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BUSINESS

BRANISLAV GRBOVIĆ, PROJECT DIRECTOR & REGIONAL DIRECTOR SOUTHERN EUROPE (SE) MINING AND MINERALS

No Deficit Of

MINING WEALTH IMMINENT Wood is among the world's largest international engineering companies, employing as many as 60,000 people in 60 countries worldwide, while it has been operating in the Balkans for the past 15 years

e are fortunate to serve a broad range of industrial markets, including all energy sectors, processing and refining, utilities, infrastructure, mining and manufacturing, and we leverage our experience to provide innovative and flexible solutions to our clients. How are reserves of ores and minerals in our part of the world? What are the largest projects you’re currently working on in Southeast Europe? - There is great interest in mining reserves in Southeast Europe. Fortunately, a generally stable environment and a constantly improving investment climate have created many opportunities for experienced companies to work alongside local experts and stakeholders to explore this potential. Southeast Europe is one of the regions where we’ve been operating and have established a permanent presence for over 15 years, delivering studies and projects for the mineral resources industry in countries such as Bulgaria, Serbia, North Macedonia, Romania and Turkey. Examples of our most recent projects delivered in the region include the Copler Gold Project in Turkey and DPM’s Krumovgrad Gold Project in Bulgaria. This showcase project is the first greenfield mining project in the EU in over 25 years to be fully permitted and put into commercial production.

impacted on the business, and that includes process automation and optimisation. For example, digital performance management can automate reporting and offer real-time data that facilitates strategic decision-making. That being said, mining can sometimes prove unpredictable, which is why a company needs a strong team of professionals who can assess and adapt processes as required. We are unable to develop technology proactively without a profound understanding of the terrain, deposits and all surrounding environmental factors, which is why technology hasn’t replaced human experts, but rather serves to empower them with extensive insight. Will we face a shortage of mining wealth in the coming decades or will we – thanks to companies like yours – discover new sites around the world? - There is an ongoing public misconception that we are on the verge of exhausting resources and that a shortage of mining wealth is imminent. The reality is that when it comes to technology and tapping into global sites – we have only just scratched the surface. Ongoing innovation of mining technology, as well as increasing globalisation, are opening up new avenues for discovering, mining and processing ores every day. Companies like Wood are leading the way. We specialise in utilising our strong in-house minerals processing capability to deliver engineering solutions for poly-metallic, low grade and difficult to extract ores. The challenges are greater, but so are the advances in mining and methods for processing minerals. Companies like Wood are leading the way. Our projects don’t just secure mining wealth, but rather also serve as excellent springboards for advances in exploration, analysis, mining and processing technologies.

The reality is that – when it comes to technology and tapping into global sites – we have only just scratched the surface

The mining business has always been considered among the most difficult. How much has that changed with the advancement of technology? To what extent are today’s work processes automated and optimised? - Recent advancements in technology have most definitely 22

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DR. MILINKO RADOSAVLJEVIĆ, DIRECTOR OF THE MINING INSTITUTE LTD. BELGRADE

BUSINESS

MINING INSTITUTE That's Recognised On The Market Most of the works that the Mining Institute is engaged in are in, or for, Public Enterprise Elektroprivreda Serbia (EPS), but the institute is also engaged in other areas

he Mining Institute of Serbia marks its 60th anniversary in 2020. During this time, more than 5,000 projects have emerged from this institute, with which it has acquired enviable references in the country and around the world, with more than 70 open mines, 11 patents etc., says qualified mining engineer and direct of the institute Dr. Milinko Radosavljević.

the institute is also engaged in other areas. I will mention just a few of the current ones: the Project for a Construction Permit in the Second Phase of Construction of the Kostolac B3 Thermal Power Plant (resolving the problem of external transportation of ash, slag and gypsum); the Technical Reclamation Project for the 400km long main gas pipeline; (Inter-connector) Bulgarian border - Hungarian border; Periodic measurements of emissions of pollutants and testing the integrity of analysers (Analyser Management System) in thermal power plants. Otherwise, the Mining Institute has approximately 90 full-time employees, most of whom are highly skilled staff of various profiles. It is state-owned and accredited as a research and development institute.

We are witnesses to the fact that Serbia has huge mining potential. What is the role of the Mining Institute in this area? - The role of the Institute is significant, as it is a place where the right information and logistics can be obtained by all those who are ready to invest in the mining secMore than 5,000 projects have tor. The institute deals comprehensively with mining, energy and protection of the emerged from this institute, natural and working environment, playing with more than 70 open mines an important role in the mining sector. We according to project designs of are witnessing the ever growing interest of large mining companies and their the Mining Institute, more than significant investments in geological re20 tailing ponds and ash dump search, while – among other things – many sites, over 40 mineral processing foreign companies have been present on the territory of Serbia for years. plants, 11 patents etc. Which specific works is the Institute engaged in; how many employees do you have and are you still under state ownership? - The Mining Institute mostly generates its revenue by selling its services on both the domestic and the markets of the region. The Institute’s activities are conducted through two design departments: the Department for the Design of Mineral-Raw Material Mining and the Department for Mineral Processing and Design, as well as three accredited testing laboratories. The majority of works that the Mining Institute is engaged in are in or for Public Enterprise Elektroprivreda Serbia (EPS), but

You celebrate a major anniversary in 2020. The Institute was important in Yugoslavia and remains important in Serbia today. What would you single out as your greatest achievements in the areas in which you work? - We are extremely proud of our upcoming anniversary marking 60 years since our founding. Generally speaking, it is today a stable entrprise that’s recognisable on the market. When it comes to achievements, it is enough to point out that more than 5,000 projects have emerged from this institute, with which it has acquired enviable references in the country and around the world, with more than 70 open mines according to project designs of the Mining Institute, more than 20 tailing ponds and ash dump sites, over 40 mineral processing plants, 11 patents etc. In the year ahead, the year of our anniversary, we will host the major gathering of the eighth consecutive Balkan Mining Congress, which will be held in Belgrade in June. 23

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France

ARAMINE AND EPIROC ANNOUNCE PARTNERSHIP

Serbia

COPPER MILL IN SEVOJNO – EXPECTS PROFIT OF €4MLN The Sevojno copper rolling mill, which employs about 1,200 workers, as stated by its managing director Milija Bozovic, will relatively successfully finish the business year and generate a net profit of about €4mllion, which is four to five percent more than in 2018. He estimated that “the factory’s market position is solid” and that most of its production is exported to the European and American markets, while marketing to the Russian market is “very modest and with no possibility of a significant increase, due to the sanctions imposed by the EU on Russia and the decisions the Russian economy that by its own production meets the needs of that market, regardless of the quality of the product”.

By Elizabeth Cope Resulting from the historical partnership between Epiroc and Aramine, a distribution contract was signed in 2019 appointing Aramine as official distributor of Epiroc products for underground mines and tunnels in France and several countries in Central and West Africa (Central African Republic, Benin, Burkina Faso, Cameroon, Chad, Congo-B, Côte d’Ivoire, Gabon, Gambia, Guinea-Conakry, Equatorial Guinea, Liberia, Mali, Mauritania, Niger, Senegal, Sierra Leone, Togo). The Epiroc product range for mines and tunnels adds to the portfolio of machines dedicated to galleries of small and medium sections designed by Aramine. According to Marc Melkonian, President of Aramine: “Epiroc trust is a mark of recognition of our long-standing partnership, and this collaboration between our two companies allows us to offer a wide and complete solutions range for mines and tunnels to our customers”.

China

LITHIUM MINERS RALLY ON ELECTRIC VEHICLE

COKING COAL MINE GOES AHEAD Following approval from the local council, UK-based West Cumbria Mining expects to start construction early this year at Woodhouse Colliery, a 3.1 million mt/year capacity, GBP165 million coking coal mine project in Whitehaven in the north of England, the UK’s first significant new coal mine venture for decades. Slated for 2021 start-up, the colliery has gained support at a time when nations including Germany are turning their backs on coal. It is nonetheless expected to supply coal to European and UK steelmakers. A century ago, the UK was a major coal miner and a significant copper producer. Production declined due to the impacts of deindustrialisation and globalisation, making it hard to achieve economies of scale, however, it still produces considerable tonnages of industrial minerals such as china clay, sand, gravel and slate. 24

Lithium stocks are on the rise last month as investor sentiment improves following the Chinese government’s assurance it won’t be reducing subsidies on electric vehicles (EVs) this year. China began subsidising EV purchases in 2009 to help stimulate the industry but has since been gradually reducing its funding. However, the country’s Minister of Industry and Information Technology Miao Wei reportedly told senior auto industry executives at the EV100 forum in Beijing the government will not cut subsidies for new energy vehicles (NEVs) any further in July 2020. According to Reuters news wires, the minister also said Chinese NEV sales hit 163,000 units in December, almost double the November 2019 sales total of 83,000. This figure brings the country’s 2019 full year NEV sales to 1.2 million units. Major U.S. EV manufacturer Tesla’s stock price has also surged recently following the delivery of its Shanghai-made Model 3 cars.

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Brazil

ALTAMIRA GOLD GRANTED TRIAL MINING LICENSE IN BRAZIL

ANGLO AMERICAN OFFERS TO ACQUIRE SIRIUS MINERALS Anglo American has made an offer to purchase Sirius Minerals, which values the entire issued and to be issued share capital of the latter at $526.5m. Anglo American noted that Sirius Minerals shareholders will now be required to vote on the proposed transaction at a general meeting. The company noted that Sirius Minerals’ North Yorkshire polyhalite project, which has the potential to become a low-cost and long-life asset, will be a complementary addition to its portfolio upon the completion of the deal. The deep shaft mine is planned to be developed in two phases.

Altamira Gold received the first Trial Mining License with respect to a permit for its Cajueiro gold project in Brazil. In a press release, Altamira said that the permit grants the company and its partner FMS Investimentos e Participacoes Ltda. the right to process up to 50,000 tonnes per year from the southern part of the key Crente resource area, and is valid for 36 months. The license also allows Altamira and FMS to start building a 1,000-tonne-per-day processing plant in the Cajueiro project area and will open up the southern portion of the highly-prospective Crente resource for feed for the plant. Located in the northern part of the Mato Grosso state in western Brazil, the Cajueiro project comprises a large land package located in the Alta Floresta – Juruena Gold Belt.

Turkey

HUNDREDS OF MINES DESTROYED IN SYRIA Turkish security forces have destroyed 891 mines and 1,660 improvised explosive devices in northern Syria within the area of its latest anti-terror operation in the region, the National Defense Ministry said last month. Since 2016, Turkey has launched a trio of successful antiterrorist operations across its border into northern Syria to prevent the formation of a terrorist corridor there: Operations Euphrates Shield (2016), Olive Branch (2018), and Peace Spring (2019). Turkey launched Operation Peace Spring on 9th October 2019 to eliminate YPG/ PKK terrorists from northern Syria east of the Euphrates River in order to secure Turkey’s borders, aid in the safe return of Syrian refugees and ensure Syria’s territorial integrity.

U.S.

U.S. STRIPS BACK REGULATORY PROCESS FOR NEW MINING PROJECTS By Matthew Hall Environmental fast-tracking is set to be extended to US non-energy mining projects after a federal permitting committee voted to include mining as a covered infrastructure sector under the Fixing America’s Surface Transportation (FAST) Act. Passed by the Obama administration in 2015, the FAST Act created the Federal Infrastructure Permitting Improvement Steering Council (FPISC), aimed at streamlining the permit process for “high priority” infrastructure projects costing upwards of $200m. The FAST Act limits the duration of public comment periods during the environmental impact statement process and reduces the statute of limitations for litigation. National Mining Association senior vice president of communications Ashley Burke told Mining Technology: “Permitting efficiencies can be achieved without sacrificing environmental protection. The best indicator of environmental performance is the strength and enforcement of applicable standards, not the length of time spent in the permitting process.” 25

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INTERVIEW

ERIC RASMUSSEN, DIRECTOR NATURAL RESOURCES, EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD)

WE SUPPORT

Responsible Mining Serbia may benefit from strong demand for critical raw materials coming from Europe, but it has to seek responsible investors who apply good corporate governance and best practices in their operations. EBRD may help in this process

he distribution of raw material supplies could result in a loss of competitive economic activity in Europe and reduced availability of strategically important products in the Renewables, ICT, automotive and aviation sectors. Therefore securing access to metals and minerals is a high priority for European countries. “Attention is directed to mapping out the raw materials available for mining, since Europe has almost no extraction of antimony, beryllium, borates, magnesium, molybdenum, niobium, PGMs, phosphorus, rare earths, scandium, tantalum, titanium and vanadium,” says Eric Rasmussen, Director Natural Resources, European Bank for Reconstruction and Develop-

ment (EBRD). “Moreover, the EU’s Raw Material Initiative focuses on the sourcing of raw materials, from international markets as well as from within the EU. Specifically, its Critical Raw Material List seeks to stimulate the production of critical raw materials in the EU and associated countries.” Against this backdrop, it is evident that countries like Serbia, located along the mineral rich Tetyan geological belt, are well positioned to benefit from Europe’s increasing demand for critical raw materials. As Rasmussen explains, “the EBRD has financed mining operations in EU and non-EU countries for more than two decades. The battery materials (copper, lithium etc.) deposits

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- The EBRD plans its financing based on due diligence, which includes - among other things - analysis of the energy and operating efficiency of mining companies. The EBRD has long experience of financing companies with the aim of implementing innovative technologies and new processes to become more resource efficient and hence reduce operating expenditures.

at the Timok reserve are generally of good potential and the EBRD would thus likely be able to support investors with mine development plans.â&#x20AC;? What are the institutional preconditions for turning mining into a source of creating national wealth? - The countries will need quality investors to develop their mining industry sustainably. The EBRD invests alongside responsible investors, who apply good corporate governance and best practices in their operations, which are summarised in environmental, social, health and safety action plans (ESAP) and disclosed to relevant stakeholders. The EBRD also supports constructive institutional relations and good economic management. In particular, the EBRD would support countries in the implementation of voluntary initiatives, such as the Extractive Industries Transparency Initiative (EITI), Publish What You Pay (PWYP) and/or the Responsible Mining Index (RMI). These voluntary initiatives can be a great help for countries and companies aiming to adopt sustainable mining. How could the EBRD help mining companies increase their operational efficiency and become more competitive?

The EBRD Mining Strategy does not support the EBRDâ&#x20AC;&#x2122;s financing of thermal coal mining projects. If a coal deposit is a mix of thermal and metallurgical coal, then the EBRD cannot assist with financing for the mining

The EBRD recognises the potential negative impacts of mining when international environmental standards are not respected and economic diversification is not pursued. From that perspective, how do you evaluate policies in Serbia and the Western Balkans as a whole? - The EBRD is mindful that investors in the mineral resources sector face significant challenges in most EBRD countries of operation, including those of the Western Balkans. Capital intensity, cyclicality and climate change pressures on the industry already demand strong balance sheets and organisational capacity for long-term survival. Moreover, mining investors have a substantial share of their portfolio of extractive and supply chain assets in remote places and emerging markets. However, emerging markets, many of which are located in the EBRD region, also increase the risk

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exposure to weak legal and institutional frameworks, among many other factors. Weak legal and institutional frameworks are at the core of mining investors’ need for objective, neutral and fair rules-based institutions. However, economic and financial downturns – with their pressure on budget revenues – often trigger debates about renationalising natural resources or increasing taxes. In places with weak legal and institutional frameworks, the mining resource investor can face a variety of interfer-

helping mining investors to coordinate and resolve a variety of issues associated with a project’s diverse and multiple stakeholders (i.e. equity partners, banks, suppliers, competitors, unions, NGOs, courts, media, etc.), as well as diverse means to shape the behaviour of host countries’ leadership and government institutions. The EBRD is therefore well positioned to offer a problem-solving partnership for responsible investors operating in the EBRD region. How can mining operations be conducive to local growth? - The EBRD is supporting mining, because it contributes to economic and social development, with local communities often benefiting significantly from mining activities. The EBRD is also well aware that the potential benefits of mining resources are contingent on whether resources and associated revenues are developed and managed responsibly over time. Through its practical involvement in the mining sector, the EBRD implements its institutional mandate of promoting sustainable investments and dispersing best practices of resource development. Serbia is heavily focused on coal extraction, which has high carbon intensity due to losses in production, transmission and distribution, as well as outdated infrastructure. What are the policies at hand to alleviate the problem? - The EBRD Mining Strategy does not support the EBRD’s financing of thermal coal mining projects. If a coal deposit is a mix of thermal and metallurgical coal, then the EBRD cannot assist with financing for the mining.

ence that disrupts their rights and Preserving and improving ability to control and operate a mine. the environment is a central The key threat is actions of state institutions (e.g. ministries, municipality feature of a modern and administrations, agencies and SOEs). well-functioning market This is why a mining investor’s problemsolving capacity is evidently a critical economy, and is therefore success factor for an investor in a mine a key goal of the transition of strategic importance to a country. The EBRD may assist the investor’s process that the EBRD was project company by diversifying its set up to promote funding sources, providing financing How can other EBRD policies, such as for the tender that matches asset life those related to the green economy, and therefore supports the building of a stronger balance contribute to sustainable solutions? sheet with a leverage fit for purpose. - The EBRD Mining Strategy has an overview of the various By having a resident office and investment portfolio in policies, all of which underpin the strategy. One of these the host country (or region), the EBRD is well positioned to policies is to promote transitions to a green economy, which assist the investor in dialogue with the local government and, is close to the heart of the EBRD. Preserving and improving the environment is a central feature of a modern and if needed, provide technical assistance to help the country well-functioning market economy, and is therefore a key adopt EITI and best practice standards for the environment, goal of the transition process that the EBRD was set up to health, safety, social and stakeholder engagement. promote. The EBRD’s approach to green transition builds on The EBRD has gained the trust of its partners and is a long history of delivering sustainable investment projects. recognised for its experience and pragmatic attitude in 28

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ACA ILIĆ, DIRECTOR, MINE AND FLOTATION ‘RUDNIK’ D.O.O. (LTD.)

BUSINESS

Pledge For

THE FUTURE According to the opinions of both governmental and nongovernmental institutions, case studies and business results, Rudnik is among the top five examples of privatisation in Serbia. This is the first privately-owned mine of non-ferrous metals with underground exploration since World War II, and is today one of the most successful companies in this sector of industry

e have hired more than 250 new workers over the last 15 years, while we have mining reserves for at least another 10 years of production. Investments in geological exploration have increased 13-fold and resulted in another 4.5 million tonnes of ore. During 15 years of operations, over 3.5 million tonnes of ore have been processed, approximately a billion dinars has been invested in equipment and average monthly production levels have increased from 10,000 to 24,000 metric tonnes. You have received a large number of awards and acknowledgements. Which would you single out as being the most important? - Since the launch of operations, we have received six awards from the Chamber of Commerce & Industry of Serbian and the Kraljevo Regional Chamber of Commerce for our successful operations, outstanding contribution and results achieved in the development and advancement of the economy. We devote special attention to health and safety at work and have reduced the number of injuries from 47 to an average of just four per year. We are very proud that we received the international award for safety at work from the European Agency for Safety and Health at Work for 2016/2017. That was the first time that an enterprise from the territory of the former

Yugoslavia received this award. In addition to that, we are pleased that this was also recognised by the Occupational Safety and Health Administration, and to date we’ve received three national awards in this domain. In the area of corporate social responsibility, in 2016 we received recognition from the Smart Kolektiv and the Forum for Responsible Business, as well as the CCIS National Award for Corporate Social Responsibility, with 1st place in the category of medium-sized companies. The year 2018 was marked by the VIRTUS Award for contributions to the local community in which the company operates, which is awarded by the Trag Foundation, and we ended 2019 with the “Flower of Success” acknowledgement in the category of “Most Gender Sensitive Company”, which is awarded by the Association of Business Women of Serbia. Only 10% of employees at the company are women, but they achieve excellent results with their engagement and work. What plans do you have for the period ahead? - Our mission is to preserve the mine and hand it down to the generations that are to come after us. We are continuing with ambitious plans, primarily in finding new reserves of ore, investing in new equipment and technologies, increasing ore production and processing, increasing safety at work etc.

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INTERVIEW

IVAN JANKOVIĆ, ASSISTANT MINISTER AT THE SERBIAN MINISTRY OF MINING AND ENERGY

SERBIAN LITHIUM

Is Unique In The World The economic development of every country with serious mineral potential is mainly based, to a large extent, on the exploitation and processing of mineral resources

erbia is becoming ever more attractive for investment in mining, which is not surprising if one is aware that it has extremely significant mining potential. But not only that, the fact that as many as 30 of a total of 70 companies actively engaged in geological surveys in the country are foreign confirms that conditions have been created to guarantee investors security for their investments in this important economic sector, says Ivan Janković, assistant energy minister, speaking in this interview for CorD. The territory of the Balkans is increasingly attractive for geological exploration. In our country alone, more than 50 companies are searching for various minerals, half of which are operating with foreign capital. Does this mean that individual deposit sites show significant reserves that are sufficient for opening a mine, and where are those sites? - It should primarily be emphasised that the Republic of Serbia is a country with pronounced high attractiveness for investments in the mining sector and that it possesses significant mineral potential. There are more than 70 geological survey companies currently present, 30 of which participate with foreign capital. The reason for this certainly lies in the fact that conditions have been created in the mining sector that guarantee certainty for investors regarding their investments. Reserves have also been proven at some sites, while others have exceptionally high potential. At the end of 2019, major copper and gold reserves were confirmed by a state commission, or more specifically a task force, at the Čukaru

Peki mine near Bor, where research was conducted at the end of 2019 by the Rakita company from Bor, which belongs to Chinese company Zijin. This is the first large amount of confirmed reserves of ore with high metal content after many decades. The project is in the preparatory phase of opening a mine. Another site that’s very significant from the aspect of future mining activities is certainly Jadar and the works being implemented by Rio Tinto via its company Rio Sava Exploration, which is registered in the Republic of Serbia. Estimated reserves of lithium at the site in question are so high that the opening of a mine and launching of exploitation would create the potential to supply 10 per cent of global demand for this metal, which would position Serbia as one of the world’s leading suppliers of lithium. The unique new mineral Jadarite is being researched In Western Serbia. However, most permits have been issued to companies that are seeking gold and copper. Is this true and does it mean that we have those ores the most or that they sell the best? - As I stated previously, Jadar is a very significant site and a new mineral composed of boron (B) and lithium (Li) has been discovered there and named after the locality of Jadar - Jadarite. Lithium isn’t present in this mineral form anywhere else in the world, and thus Jadar falls among unique lithium deposits. It should also be noted that lithium only became interesting for application and research relatively recently, and that some technologies for the production of this metal have yet to be elaborated in full detail. On the other hand, metals like copper, gold, zinc and lead have been

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exploited for centuries, and their exploitation and processing is so well perfected that there’s no room for unknowns. Perhaps, on the basis of the aforementioned, one should – among other things – seek reasons for greater interest among companies exploring copper and gold, and then also other metals. According to the latest available data, geological surveys are being conducted at more than 120 locations. Does the state, as the owner of mineral resources, also have information from companies that have ceased exploring in certain locations? - Geological surveys are currently being carried out in more than 160 exploratory fields, including 140 just in central Serbia. According to legal regulations, the mining area is defined in such a way that each holder of a permit for geological surveying is obliged to submit the results of their geological survey to the Ministry of Mining and Energy after a certain period of exploration. The same is true for those companies that have abandoned exploration. Thus, the state has data on surveys being performed or that have been performed by companies in specific locations.

aim of taking samples and more. All this requires considerable resources, especially if we take into consideration that a wellresearched deposit requires the carrying out of a large number of the previously mentioned works in a not-so-short period of time. Likewise, investing in them represents a major risk for every company, because at the start of surveying it isn’t known whether it will result in the finding of a new deposit or without tangible results.

Geological surveys are currently being carried out in more than 160 exploratory fields, including 140 just in central Serbia

Local governments also benefit from exploitation in terms of employment, but also rent payments. How much do companies pay for each square kilometre of space they survey. What do the charges range from and to? - A distinction must be made between fees for geological surveying and fees for utilisation of mineral resources, or for exploitation. Companies pay a geological survey fee in accordance with the Law on Fees, and that fee currently stands at 10,100 dinars per square kilometre per year of prospecting, and its financial impact is far lower than that of exploitation fees. However, the precursor to every exploitation is geological surveying, so it is for this reason that the investments they bring are important.

Are there any limitations to the geological surveying process? How long can they last and can decisions on surveying be extended? - There are rights and obligations for every company that conducts surveying, and they are defined by the Law on Mining and Geological Surveys. Geological surveying is done on the basis of a project that must be in compliance with the conditions of the Institute for Nature Conservation of Serbia and the competent Institute for the Protection of Cultural Monuments. The maximum length of geological surveys depends on the type of mineral resource being sought. For example, surveying for metallic minerals - with all the extensions of surveying rights - can last for a maximum of 10 years. For non-metallic minerals, the surveying period is much shorter and totals up to 3 years, with all extensions of surveying rights.

Mineral exploration is important for every country. What kind of economic importance does it have for Serbia? How expensive, and how lucrative, is this business, and is that the reason companies engaged in this business in Serbia are largely foreign? - The economic development of every country with serious mineral potential is mainly based, to a large extent, on the exploitation and processing of mineral resources. We can say that investments in the mining sector are of huge importance to the economic advancement of our country. As I pointed out earlier, high-quality geological surveys are of great importance to every example of the exploitation and processing of ores, because the data obtained represent input parameters for planning extraction and processing activities. On the other hand, geological surveys are very expensive, especially when it comes to exploring metallic mineral resources. These are surveys that are primarily conducted in the field and encompass drilling, excavation, various mining facilities with the 31

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BUSINESS

VASIL ANDREEV, FOUNDER, OWNER AND CEO OF GEOPS BALKAN DRILLING SERVICES

Serbia – A Leader In

EXPLORATION & MINING

GEOPS is a company that has successfully drilled dozens of wells in Serbia, Poland and Bulgaria with a depth exceeding 2,000 metres – the deepest of which, 2,202 metres deep, is in Bor, Serbia

ver the 15 years that GEOPS has been operating in Serbia, alongside geological explorations accounting for drilling of up to 1.5 million metres, this company has also been providing all other services, from road and site construction, directional drilling and trajectory management, to geophysical studies, hydro-geological testing and analysis ~ according to the company’s Founder, Owner and CEO Vasil Andreev. How many mining and geological surveying activities have you conducted to date and in how many countries are you currently active? - The total volume of geological exploration activities, since the founding of the company until the present day, exceed 1.5 million drilled metres. This includes all major methods and technologies in core drilling: wireline coring, conventional coring; sonic; reverse circulation. We have also performed a significant number of drilling services with other technologies and for various purposes, such as: drilling for potable, technical and geothermal water; oil and gas drilling; work on oil and gas wells and others. After investing continuously over these 15 years, we can now offer a one-stopshop in the field of geological exploration. In addition to classic drilling, this includes all support services, such as road and site construction, directional drilling and trajectory management, multilateral well drilling, geological services, geophysical studies, hydrogeological tests and analyses etc. Is it true that you’ve managed to drill to a depth of 3,000 metres and, if so, how and where was that exploratory work carried out? Is that merely a result of the fact that you use the latest, state-of-the-art equipment, or is it primarily due to your staff including expert engineers of various specialisations? - We have the capacity to reach depths of up to 3,500 metres. We have successfully completed dozens of wells with depths exceeding 2,000 metres in Serbia, Poland and Bulgaria. The deep-

est of them is 2,202 metres in Bor, Serbia. We also set a record of our own here in Serbia – by gaining a 292 mm diameter core from a depth of 630 metres. We strive to offer the latest trends in our profession. We determine our equipment specifically for each of our projects, and if necessary we design or procure new equipment. We have the required conditions to design and produce. For this reason, there are no projects that are impossible/ unachievable for us from a technical perspective. With such depths and complexity of projects, the quality of staff is crucial. Many of our specialists have been working with the company since its inception. These are drilling engineers, mining and mechanical engineers with many years of experience in the field of drilling. We are currently working in the Republic of Serbia, Bulgaria, North Macedonia, Montenegro, Portugal and Lithuania, while we expect new projects in Austria, Cyprus, Bosnia-Herzegovina, Germany, Russia, Peru, Chile and Tunisia. We have a total of around 370 employees. Our Serbian staff consists of 155 people who work mainly in the Republic of Serbia, while some of them are engaged in Montenegro and North Macedonia. Are you currently engaged in Serbia? What are your experiences of working in Serbia and do you have any other new projects agreed in our country, given that you are present in the Balkans and elsewhere in Europe? - Serbia is a leader in exploration and mining in the Balkans and Europe. It is normal for us to be focused on this market. Perfect conditions and guarantees have been created in Serbia for investors who need high-quality and well-equipped drilling companies. The drilling companies that are already active on the market fully satisfy those needs. In fact, there is an excess of drilling equipment at the moment, which leads to intensified competition and much lower market prices for services than in previous years. However, on the other hand, the positive is the pursuit of more efficient and innovative work.

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ZORAN RADISAVLJEVIĆ, OWNER, AND DEJAN NIKOLIĆ, DIRECTOR, GEOING GROUP

BUSINESS

WE ACHIEVE

What Others Cannot

ZORAN RADISAVLJEVIĆ

GEOING is one of the first privately-owned companies in the Republic of Serbia to have been engaged in geological research since 1996, and since 2003 it has been expanding its activities to geological and geotechnical research, engineering and consulting. It was then that it gained the business name 'Geoing Group'

hen conducting research and testing in accordance with local norms and global trends, the Geoing Group takes care of environmental protection of the soil and groundwater, as well as the environmental protection of man’s environment. Your company undertakes a wide range of jobs in the mining sector. What are all the areas that you cover? - Radisavljević: The basic activity of our company is researching, designing and conducting research works and testing in the field of mineral resources, hydrogeology and geotechnics. We have equipment and instruments to perform exploratory drilling, geophysical testing on the surface of terrain and in wells, mining space in areas intended for the building of construction facilities. Nikolić: Geoing Group is a leading company in Serbia for designing and applying research in the field of geology, geophysics, geotechnics and hydrogeology. Our professional and efficient work, as well as the highest quality of services, guarantee the complete satisfaction of our partners, because we work constantly to improve our operational possibilities.

DEJAN NIKOLIĆ

resources and reserves. The major projects that we are involved in include the construction of an exploration low dig for the massive Čukaru Peki sulphide deposit, which is located outside the town of Bor, as well as geotechnical research in Majdanpek. Radisavljević: I would like to note that our company respects and nurtures the highest level of safety and health at work, as well as the highest level of environmental awareness. It is important to us that we complete all contracted work in a high-quality way and within agreed deadlines, which is why we are constantly investing in new technologies.

The Geoing Group uses technologies and materials with minimal harmful impacts on the environment and on employee health and safety

You’ve conducted research in Majdanpek, Gadžin Han and Bačko Gradište. What are the biggest and most significant projects in which you’ve participated in recent years? - Nikolić: With the signing of a contract with Rakita Exploration, we’ve been able to provide our active contribution to the exploration of the copper deposits of Timok, while we are also involved in the project of calcite exploration in Ćelije near Gadžin Han. The works encompass exploratory drilling, geological mapping, the testing of samples, as well as development of studies on

Geoing Group is the leading company in Serbia for designing and appliying research in the fields of geology, geophysics, geotechnics and hydrogeology. How do you manage to retain that position? - Radosavljević: Maintaining the highest degree of our integrated quality management system, environmental protection and occupational health and safety in every job is our first business goal. The leading position in every business, including ours, is acquired and retained through the selection of the best and most expert personnel. We dedicate and invest a lot in the continuous education and training of our employees, both in the fields of geological, geophysical, geotechnical and hydrogeological professions, and in the field of environmental protection and health and safety at work. Nikolić: With an integrated system of quality, environmental protection and health and safety at work, we are creating a socially responsible company, both towards our employees and towards the wider community, and that is our permanent commitment. We encourage inventiveness among employees and team spirit in work, because that’s one of the key advantages of our company on the market. 33

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INTERVIEW

BRANKO ZEČEVIĆ, PRESIDENT OF THE GEOLOGICAL & MINING ASSOCIATION OF SERBIA (GRAS)

The Development Of Mining Can Reduce

THE BRAIN DRAIN

Regardless of whether you produce copper as a final product or non-ferrous metal concentrates, your sales depend on the international market, where you need to be competitive. There is no isolation or protection of any market, says Branko Zečević, president of the Geological & Mining Association of Serbia (GRAS)

increase capacity. There are also other mines producing zinc, lead, gold and silver, and Serbia’s potential in polymetallic deposits is truly impressive. One can safely say that today’s level of participation of the mining sector in the economic development of the country is below the sector’s real potential, but there is a noticeable trend of a steady increase of investments in mining, so I’m hopeful that this sector of the economy will soon assume the place that belongs to it.

lthough mining has the prospects of making a significant contribution to GDP growth, it seems that this important industry would develop even faster if the legislature shifted closer to investors. That primarily relates to the part concerning the length and slow pace of procedures, as well as very complicated and demanding undertakings for the collecting of essential documents. Mr Zečević, when it comes to mineral reserves, Serbia is richest in copper, lead and lignite. How important is the significant contribution of the mining sector to the country’s economic development? - It is generally known that the majority of electricity production in Serbia is based on the utilisation of the large reserves of coal that our country possesses. This is a trend that will continue for the foreseeable future. We also have significant copper production, in which the new owners of RTB Bor - China’s Zijin Mining Group – are already investing large funds in order to

It was also stated publicly recently that mining could also impact on GDP growth. Bearing this in mind, it is clear that this sector is also of great importance to the development of local communities. To what extent and in what way? - Mining is naturally an activity that employs quite a large number of workers on each project. Apart from direct employment from local communities, there are also the positive effects that mining activities have on the wider area through subcontractors, suppliers of equipment and spare parts, and providers of various services, from transportation to hospitality and housing. Budget inflows based on concession fees and taxes are also very significant for local communities. There is no doubt that mining can provide a significant contribution to development at the local level, and as the areas in question are mainly underdeveloped, the effect of regular cash inflows is much greater than the comparative effect that such inflows would have in more developed areas. The development of mining can reduce – and often halt entirely – outflows of populations from smaller communities towards cities. More than 25 foreign companies are currently participating in the exploration and exploitation of mineral reserves

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in Serbia. Can the mining sector be a source for creating national wealth? - Serbia has great geological and mining potential. Mineral reserves have already been discovered in several places, which can be considered significant at a planetary level (copper, lithium, coal etc.). Given that the establishing of every new mine is preceded by years of exploration and the certification of reserves, the presence of a large number of exploration companies is encouraging. We already have several projects that are transitioniing from the exploration phase to the mine construction phase, and this will provide a significant contribution to increasing the national wealth. An international gathering dedicated to this domain was held in Serbia recently and included discussions of foreign experiences. What are those experiences and to what extent do we apply them in Serbia? What kind of results have been achieved to date? - I think that the companies representing the mining sector in Serbia â&#x20AC;&#x201C; whether under local or foreign ownership â&#x20AC;&#x201C; are very well connected and exchange information with companies abroad. That is simply the nature of this sector. Regardless of whether you produce copper as a final product or non-ferrous metal concentrates, your sales depend on the international market, where you need to be competitive. There is no isolation or protection of any market, so you are compelled to keep pace with all the innovations in your field and to constantly invest in developing and improving production. A company that does not do this very quickly finds itself in trouble and threatened by bankruptcy. Whatever the case, room exists for improving the productivity, environmental protection and profitability of many of the companies that are active in Serbia.

What financing options for mining are possible in Serbia? - In Serbia, for now, there are no specialised banks or funds that understand the mining sector to a sufficient extent to be effective sources of financing. Mining projects are approached like construction or any other projects, which is a mistake. Mining has its own specificities that donâ&#x20AC;&#x2122;t fit into classical financing patterns and difficulties arise when agreeing financing conditions for mining projects that cannot provide the same collateral as projects in other areas. As the president of GRAS and the Metalfer Group, would you change anything in the area of the Law on Mining, which has taken a big step forward compared to the previous law. Is there a need to modernise the law and what could that change? How much could this possibly lead to an increase in foreign investments in this sector? - The current Law on Mining is indeed much better than the previous one, but it can and should always be better. The basic problem of this law is the length and slow pace of procedures, as well as very complicated and demanding undertakings for the collecting of essential documents. There are also overlaps between the Law on Mining and some other laws from other fields, so there are also often contradictions. I think that we, as GRAS, must work together with the Ministry of Mining and Energy on amending the law, which will lead to the simplifying and speeding up of all procedures, from the issuance of exploration rights to the issuance of exploitation permits. The actual process of exploration, certifying reserves, designing a mine, constructing mine infrastructure, investing in equipment etc. are both time consuming and exceptionally investment intensive. If you are additionally struggling with a bureaucratic apparatus and a forest of unclear regulations, your appetite for investment inevitably diminishes.

Representatives of GRAS must work together with the Ministry of Mining and Energy on amending the law, which will lead to the simplifying and speeding up of all procedures, from the issuance of exploration rights to the issuance of exploitation permits

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RISING CIVIL UNREST ADDS TO MINING RISKS IN 2020 By Cecilia Jamasmie Global miners will have to get ready to deal with the increasing threat from civil unrest, following last year’s succession of dramatic — and in several cases unforeseen — social explosions in almost 50 countries, including highly popular mining jurisdictions such as Chile, Mali, Guinea, Congo and Zimbabwe. According to risk consultancy Verisk Maplecroft’s quarterly civil unrest index, released last month, turmoil will linger in 2020, as most nations experiencing ongoing bursts of public discontent lack the tools and ability to handle them. The experts foresee as many as 75 countries having to deal with soaring public rage over a variety of topics, including economic inequality and political roguery during the next six months. Other jurisdictions, such as Hong Kong and Chile, which saw the greatest increases in risk over the last year, are unlikely to improve over the next two years, Verisk Maplecroft’s predicts. As a result, the number of extremely risky countries in the Civil Unrest Index jumped by 66.7%; from 12 in 2019 to 20 by early 2020. An ‘extreme risk’ rating in the index, which measures the risks to business, reflects the highest possible threat of transport disruption, damage to company assets and physical risks to employees from violent unrest. Most sectors, ranging across mining, energy, tourism, retail and financial services, have felt the impacts over the past year. The resulting disruption to business, national economies and investment worldwide has totalled in the billions of U.S. dollars, the consultancy says, citing Chile as an example. The first month of unrest in the copper-rich country caused an estimated $4.6 billion worth of infrastructure damage, and cost the Chilean economy around $3 billion, or 1.1% of its GDP, Verisk Maplecroft notes. The consultancy detected that a deterioration in some risk factors could serve as an early warning sign in certain jurisdictions. Out of the 11 elements considered in the Civil Unrest Index, subsidy cuts were the single biggest indicator that the risk of civil unrest was growing in Chile, Lebanon and Zimbabwe. Inflation and the weakening of mechanisms that allow the channelling of discontent before it erupts into unrest also played a role, Verisk Maplecroft says, particularly in Chile, Hong Kong and Zimbabwe. With protests continuing to rage across the globe, the consultancy expects both the intensity of civil unrest, as well as the total number of countries experiencing disruption, to rise over the coming year.

BROKEN HILL TURNS TO U.S. FOLLOWING THACKARINGA SALE

RIO TINTO AWARDS MONDIUM MINE CONSTRUCTION CONTRACT Rio Tinto has awarded Perth-based company Mondium a contract valued at approximately AUS$400 million for the design and construction of the Western Turner Syncline Phase 2 (WTS2) mine in the Pilbara region of Western Australia. Mondium will undertake all engineering and design, procurement and site construction works associated with the WTS2 development, including the process plant, overland conveyor and non-process infrastructure. The work is expected to create 450 jobs starting in the first quarter of 2020 and is expected to be completed in 2021. Mondium and Rio Tinto plan to work closely to ensure the contract provides local and Indigenous employment as well as business opportunities in the region.

Broken Hill Prospecting has completed the transfer of its interest in the Thackaringa cobalt project in New South Wales, Australia to its joint venture (JV) partner Cobalt Blue. Broken Hill will receive $6 million in cash, shares and deferred consolidation, while Cobalt Blue acquires a 30 per cent holding in Broken Hill. The company is now turning its attention to developing and commercialising the La Paz rare earths project in Arizona, US. Broken Hill is changing its name to American Rare Earths to avoid confusion with Cobalt Blue’s Broken Hill interests and align with this new focus.

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NORGE MINING: NEW MINERAL ZONES WITH A LOT OF COBALT, COPPER AND NICKEL During the Norge Mining’s presentation in the Grendahuset in Helleland, Norway, it was revealed that the mineral zones in the area have proven to be larger than previously thought. The studies have also shown indications of large, deep-lying zones with a lot of cobalt, copper and nickel. In the spring, the company will return to perform core drilling and take samples from as deep as 1,000 metres below ground level. The company currently has what is called the exploration right to the area, but announces that they are ready to take the next step. Answering to questions about the consequences a mine could have for the local community, Gunnar Holen, Norge Mining’s representative said “We must present a thorough environmental and impact assessment that takes into account that you do not harm the local environment. We also have to think that when we finish this area, we should get it back to what it was, or maybe even better. There will always be some noise and other issues with mining, but also jobs – and that is the type of job that gives a ripple effect in the form of other jobs in adjacent industries”.

SERBIA GETS THE CADASTRE OF MINING WASTE By Vladimir Spasić Serbia got its Cadastre of Mining Waste in an eponymous project implemented by the Ministry of Mining and Energy with the European Union’s financial support. The project worth EUR 2.1 million, which lasted from February 2017 to January 2020, has contributed to the further development and improvement of the system for responsible and sustainable mining waste management in Serbia, according to the speakers at the final conference of the project held today in Belgrade. Representatives of the ministry, the Delegation of the European Union to the Republic of Serbia and members of the project team led by a consortium of German companies Plejades and DMT presented the project results, methodology and importance for the mining sector and its environmental impact. Source: balkangreenenergynews.com

SOUTH AFRICA: DROP IN MINING PRODUCTION South Africa’s mining production fell 3.1% year-on-year to November according to data released by Statistics South Africa. The figures are for the month prior to unprecedented power outages which impacted the mining industry in December. Stats SA said the largest negative contributor was platinum group metals, down 13.5% and contributing negative 3.6 percentage points. Iron ore and coal were down 7.5% and 0.7 percentage points and 2.8% and 0.7% respectively. Stats SA said “other” non-metallic minerals were a significant positive contributor, up 20.5% and contributing 1.2 percentage points. However mineral sales jumped 5.8% year-on-year, led by PGMs up 36.5% and contributing 8.4 percentage points, followed by gold which was up 64% and 6.7 percentage points.

ERIN MOVES FROM EXPLORATION TO DEVELOPMENT Erin Ventures announced that it has started the exploitation licensing process for its Piskanja boron project in Serbia with the commissioning of an “Elaborate of Reserves,” a significant step towards production. The document is expected to be ready in about three months. According to the Canadian miner, the primary components of an Elaborate are a Mineral Resource Calculation and a Technical Economic Assessment, which must be generated in compliance with standards set by the Serbian Ministry of Mining. “This is an important milestone for us, as we are officially advancing from exploration to the development stage,” Tim Daniels, Erin Ventures CEO, said. The Piskanja project is located 250 kilometres south of Belgrade. The project has an indicated mineral resource of 7.8 million tonnes averaging 31% B2O3, and an inferred resource of 3.4 million tonnes averaging 28.6% B2O3. 37

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BUSINESS

NENAD STANKOVIĆ, NST LAW

Great To Have

MANY COMPANIES EXPLORING IN SERBIA The Mining Law has created a framework for market business and facilitated direct investment in this sector

he problem for companies is the disharmony of regulations. Sometimes it seems that simple legal solutions are extremely difficult to put into practice, says lawyer Nenad Stankovic to CorD.

Since you are involved in investment law, project financing, mining and commercial law, what is your experience with mining companies? - I would say that the Mining Law has created a framework for market business operations and enabled direct investment into this sector. In addition to the successfully completed PPRP of RTB Bor and entering into a JV with a Chinese partner, other companies in this sector are also very active and their experiences are better than good. It is extremely good that there is a large number of companies doing research quite successfully. Some companies have reached the foreign exchange markets and found so-called “large partners”, all thanks to results from Serbia, which was a real challenge in this area. International commercial associations such as CANSEE and professional chambers such as GRAS have taken a very active role in this, which is very constructive.

and obtaining exploitation licenses. Finally, the financial aspect of mining activity is related to the matter of environmental protection. This is a sensitive topic, and we face the need to invest funds into improvement of business processes enabling mitigation of any damaging impact on the environment. What legal advice are you asked for most and how difficult is it to advise multinationals? - This is a difficult question to answer since it all depends on the client’s project phase and the project size. It begins with basic questions about company establishment and getting the proper permits, and in the later phase, we respond to questions regarding preservation of certain rights, financing, drafting agreements with strategic partners as well as financing agreements. As far as financing goes, it seems to me that we lack established practices. Therefore, the knowledge of international institutions like EBRD in this area is important. In short, the questions vary from requests for interpretation of regulations to inquiries about the protection of investor’s rights, optimization of tax costs, obtaining permits and environmental protection. Advising can be challenging when dealing with companies that must obey certain compliance rules that deviate from Serbian regulations. Compliance related to the UK Anti-Bribery act and FCPA is a particular aspect of counselling.

Some companies have reached the foreign exchange market and found large partners, thanks to results in Serbia

What are the greatest difficulties in practice? - Local legislation is constantly developing and there is a lot more space for growth. In my opinion, the greatest problem is the mutual (dis)harmony of regulations, while the application of regulations seems to be an even bigger issue. It sometimes seems as if simple legal solutions are extremely difficult to implement. For example, there is the question of solving proprietary relations, the manner of pledging future things, and the possibility of retention and extension of certain rights. This includes not only the issue of issuing licenses but also issues regarding property, financing 38

What are the most complex business transactions you have undertaken as part of the NST LAW legal team in the mining industry? - The most challenging were those transactions involving the registration of companies in foreign stock exchanges, joint venture contracts with so-called “large partners” and certain M&A projects. In addition, project financing, which includes financing research companies, is one of the most current issues, especially when it comes to defining collateral.

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NADA ŠTRBAC, PH.D., DEAN OF THE TECHNICAL FACULTY IN BOR

BUSINESS

Students Are

FUTURE ZIDJIN WORKERS

Testifying to the connection between the Technical Faculty in Bor and RTB Bor is the fact that company Zidjin last year signed a contract on professional work experience practise with 38 students that's valid until their graduation

he Technical Faculty in Bor was founded in 1961 as a precise result of the need to educate essential personnel of highly educated engineers for the needs of the economy in Eastern Serbia, which was also expanding at that time, says Nada Štrbac, Ph.D., Dean of the Technical Faculty in Bor, speaking to CorD. Professor Štrbac, your faculty marks 60 years of its work and existence next year. This is confirmation of how important this higher education institution has been to Bor since its establishment, given that RTB Bor is there. When was it hardest to work at this college, considering that you’ve been there for 32 years and can surely recall both beautiful and less beautiful things? - The Faculty has grown over time and became a valued institution of higher education, which is known both within national frameworks and at the international level. Alongside my 32 years of professional engagement at the Technical Faculty in Bor, I also studied at this faculty, in bachelor’s, master’s and Ph.D. studies, which ensures my feelings towards the college are deep and extremely positive. There were certainly many challenges during that long period, but also many more beautiful moments. However, when a person does a job that they love in an environment of students and colleagues who fulfil them, in the end they only remember the beautiful things, while the challenges serve as a meaningful experience that’s passed on to younger generations.

- Cooperation between the Technical Faculty in Bor and RTB Bor has always been at the highest level and in our mutual interest, considering the large number of engineering graduates from our Faculty who work there. The privatisation of RTB Bor by international company Serbia Zidjin Bor Copper has resulted in our cooperation remaining at a high level, but has also led to some new opportunities for our students. It should be noted that Zidjin last year signed a contract on professional work experience practise with 38 of our students that’s valid until their graduation, with the possibility of them gaining employment at that company. Moreover, representatives of this company are included in the Council of Employers of the Technical Faculty in Bor, which we are just in the process of forming and which will further bolster our cooperation.

Cooperation between the Technical Faculty in Bor and RTB Bor has always been at the highest level

How has cooperation been for the Faculty since RTB Bor was acquired by a new Chinese owner? Does it differ from cooperation to date and do your partners have any specific requirements for you and the generations of new students who will presumably one day work for this Chinese company?

The Technical Faculty in Bor is the only technical engineering college not located in Belgrade. How much has that additionally obliged you to lead generations and generations of students on the right path and, in so doing, to ensure they don’t lag behind their colleagues in the capital in any way? - The fact that the Technical Faculty in Bor belongs to the University of Belgrade, as the only one of this University’s 31 colleges to be located outside Belgrade, is both a great honour and an obligation. As such, the Faculty’s teaching process on its accredited study programmes is conducted at the highest possible level of quality. This also applies to the quality of scientific research work, both by teachers, associates and students of our Faculty. Alongside this, the fact that the college is located in a major industrial centre gives our students the opportunity, in addition to the high level of teaching at the college, to have great opportunities to acquire practical work experience at the facilities of companies in Bor. 39

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BUSINESS

ALEKSADAR MILIKIĆ, MAYOR OF THE CITY OF BOR

Bor's Budget

TOINCREASE THREEFOLD Chinese company Zidjin Rakita is working intensively on the project to open the Čukaru Peki Mine, the exploitation of which could begin in the second half of 2021

he city’s budget is currently funded up to 60 per cent from mining revenues, and it has been possible to increase the transfer funds on the basis of income taxes since Bor regained city status in 2018, says Bor Mayor Aleksander Milikić, speaking to CorD. Mayor Milikić, you stated recently that Bor will have the highest per capita income in Serbia thanks to the investments of company Zidjin. Has that happened and what does it mean for the budget of the City and the citizens of Bor? - When it comes to the economy of the state and local government, mining participates greatly in that area. Zidjin, the new strategic partner, is already changing things and will definitely change happenings in Bor, as this city is developing massively and rapidly. Bor’s budget is currently funded up to 60 per cent from mining. We have a rounded story with Zidjin that confirms that the city’s budget will increase threefold over the next four years. Chinese company Zidjin Rakita is working intensively on the project to open the Čukaru Peki Mine, the exploitation of which could begin in the second half of 2021. Analysis has shown that the opening of the new Čukaru Peki Mine will increase the city budget by almost four billion dinars, that we will be able to invest even more in road infrastructure, sewage and water supply networks, as well as in schools, nurseries... Mining is primarily important for the local population living on the territory where the new mine is being opened, for the city and the local community as a whole, as it will change both the ecology and the economy, and is also important for the investor.

- Bor first gained city status in 1947, but subsequent laws on the country’s territorial organisation envisaged it as a municipality. However, 71 years later, in 2018, it again became a city and the administrative and economic centre of the Bor District. The administration has been ordered in a completely new way, which has to date proved much more efficient, and the status we have been granted provided the basis for us to be able to increase so-called resource transfers on the basis of income tax, which means that about 13 per cent more money has poured into the local budget. On an area of around 50 hectares that’s managed by the Institute of Mining and Metallurgy in Bor, there have been surveys of the tailings pond for a longer period already. It is presumed that mining waste contains large amounts of gold and other metals. You say that the Institute has a very large role and that this will solve two important issues for the City of Bor – ecology and economy. What precisely do you expect? - Mining burdens the environment, not only in Bor and Serbia, but all over the world. Environmental policy measures, apart from contributing to the protection and preservation of the environment, should also contribute to increasing income. No matter how good the process of production and what is being done are, there is always some relationship between ecology and economics, and that is precisely one of the challenges that awaits us in the years ahead. The local government has a great role to play, because it can send its opinions and views to the ministries of mining and environmental protection, and to the government, in order to keep them up to speed with the challenges on the ground that need to be resolved. It is very important for us to have a successful institution like the Institute of Mining and Metallurgy, in which the City of Bor has a 12.92% share of the capital.

It is important for Bor to have the Institute of Mining and Metallurgy

According to a majority of votes among MPs in the National Assembly, Bor’s city status has been restored after 71 years. What does this mean in practise? 40

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FEATURE

Serbia Gets Cadastre Of Mining Waste With

EUROPEAN UNION SUPPORT Serbia has put in place the Cadastre of Mining Waste, following a project implemented by the Ministry of Mining and Energy, and supported financially by the European Union

he project, worth 2.1 million euros, was implemented in the period from February 2017 to January 2020, and successfully achieved the main project goal of further developing and improving the system for managing mining waste in Serbia. Representatives of the Ministry of Mining and Energy, the European Union Delegation to the Republic of Serbia and members of the project team, which was led by a consortium of German companies PLEJADES and DMT, presented the project’s results and methodology, as well as the importance of this project for the Serbian mining industry and the impact of this project on the environment, to interested stakeholders, including companies, organisations and media representatives, in Belgrade on 17th January. Project Team Leader Dr. Peter Bayer said he was satisfied with the results achieved, whilst highlighting the complexity of the project: “The challenge was the large number of sites across Serbia to be visited and later investigated, the sheer volume of data to be managed, documented in comprehensive reports and maps, and introduced into the data base we programmed. Despite the technical and operational complexity of the project, our team - comprising over 40 national and international experts - succeeded in completing the project in a rather short period of time,” noted Bayer. An inventory presented in the form of a web application and a book entitled “Cadastre of Mining Waste” features systematically collected and compiled data of 250 abandoned mining waste sites. It also contains the results of a detailed investigation of 41 abandoned mining waste sites with detailed information from chemical, mineralogical, geomechanial and laboratory analyses, as well as conclusions based on those investigations and analyses, which characterise the mining waste and assess its impact on the environment and human health. Speaking at the event, Dr. Dragana Jelisavac Erdeljan, Head of the Department for Mining at the Serbian Ministry of Mining and Energy, said: “with the results obtained from the field and with labaratory

results in place, the Ministry will be equipped with sound documentation so it can be possible for it to react in an appropriate manner in the case of remediation, rehabilitation and re-cultivation of mining waste facilities that are critical for the environment or human health.” Jelisavac Erdeljan also announced that, starting as of this year, the new Decree to regulate mining waste management in Serbia will come into force. “Mining companies are given a period of two years to align their operations with the Decree. The outputs and experience gained during this project, such as the new Manual for Inspectors, visits to mining waste sites in Germany, exchanges of experience and best practices with colleagues from active mines, closed or abandoned mining sites, with colleagues from institutions in charge of remediation and monitoring of those locations in Germany, will certainly represent a valuable contribution to the implementation of activities envisaged by the Decree. Boris Ilijevski, Head of Section III (energy, environment, transport and agriculture), Delegation of the European Union to the Republic of Serbia, also spoke at the conference, saying: ”the EU is the main partner of Serbia in protecting the environment. All our projects are designed and implemented to have a positive impact on environmental protection and citizen’s quality of life. Over the past 19 years, the EU donated 402 million euros to Serbia for environmental protection.” Ilijevski also said that, with the “Cadastre of Mining Waste” project, the EU is assisting Serbia in the development of an inventory comprising some 500 mining sites and added that such information serves as a starting point for the actions of ministries and local governments toward the mitigating of risks, mining waste management or further use, if possible, by companies that exploit mineral resources. In conclusion, Ilijevski emphasised that local communities and people living near such mining waste sites would be the immediate beneficiaries of all of this.

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DR MILE BUGARIN, SCIENTIFIC ADVISOR, DIRECTOR OF MINING AND METALLURGY INSTITUTE BOR

EXAMPLE Of Success

This facility has the latest generation state-of-the-art equipment, accredited laboratories and exceptionally professional staff for monitoring gas emissions and imissions and the quality of water and soil

lthough it is to be expected for Mining and Metallurgy Institute Bor to be involved directly in the issue of resolving air pollution, which has been a hot topic in Serbia recently, its involvement is insufficient, says Dr. Mile Bugarin, the director of this institute, speaking to CorD

Given that air pollution has been the most pressing issue in Serbia in recent days and considering the work at RTB Bor, to what extent is your Institute helping to reduce the negative impact of pollution? - The city of Bor is very polluted. The impact of mining and metallurgical activities isn’t limited only to air quality, but also impacts on the quality of water that’s discharged and the quality of land in the vicinity of the surrounding watercourses. With mining and metallurgical activities, large quantities of mining and other types of waste are generated, the waste categorisation and characterisation of which is carried out by the Institute. All of this isn’t something that’s just now emerged. This is the legacy of the former RTB Bor. Heavy particles well beyond the permissible limits are also present in the wastewater of the smelting plant, as well as in waste mine water that mainly gravitates towards the Bor River, and further into the Timok and the Danube. The Institute’s engagement in monitoring the pollution of Bor and its surroundings is insufficient, or at some initial phase, both with new company Zidjin and with the City of Bor. The Institute has the latest generation state-of-the-art equipment, accredited laboratories and exceptionally professional staff for monitoring of gas emissions and imissions, and the quality of water and soil.

- Collaboration with Zidjin is only in its infancy, given that the company is being led by new management. The engagement of our capacities with regard to Zidjin is much lower than the capacities we have available, but the tendency is for that to be at a much higher level than it is now. I think that is in our mutual interests. The Institute has been operating under market principles for 12 years, and since the moment of its separation from the former RTB, over the last 10 years, about 10 million euros has been invested in the development of the Institute. We have good professional staff and, in the scope of mineral resources, the Institute is ranked at the top, among the best companies in Southeast Europe and beyond when it comes to engineering services, design and quality control with laboratory analysis of metals, non-metals, coal, water, environmental parameters and mining waste. The previous year was very demanding for the Institute’s engineers and designers – difficult, but also successful.

The engagement of our capacities with regard to Zidjin is much lower than the capacities we have available

What is the form collaboration between Serbia Zijin Bor Copper doo Bor and Mining and Metallurgy Institute Bor (MMI) generally? Do you work on the basis of market principles? 42

What is the core activity of the Institute; what kind of research do you conduct? - The Institute is an organisation with multidisciplinary activities when it comes to mineral resources, and that applies to metals, non-metals, coal, water, measurements of emissions and imissions, air quality and suspended particles, waste categorisation, design in geology, mining, technology, metallurgy, construction, mechanical engineering and energy. Within the framework of these activities, the Institute deals with engineering, design, laboratory analysis of almost the entire periodic table of elements in ores, water, air and waste, and do so using accredited methods. Significant clients come from the countries of the region, but also Japan, Germany, Austria, China... Our Institute is a clear example that a state institution, with good vision, operational organisation and management, can operate successfully regardless of ownership structure. Unfortunately, there are very few such examples in our country.

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DEJAN KOVAČEVIĆ, PRESIDENT OF THE MUNICIPALITY OF GORNJI MILANOVAC

BUSINESS

Ore From Brezak Is

AGAIN ARRIVING The surface mine in Pranjani has started operating again after a decade, given that Kraljevo's Magnohrom, which also encompasses this mine, has been acquired by a new owner

After a break lasting a decade, the Brezak surface mine for magnesite resumed operations last September. Why wasn’t it previously operating and who invested how much to bring it back to life? - Following the successful privatisation of the magnesite surface mine in Pranjani, the mine began operating again after a ten-year break. There are currently about 30 employees working at the mine, while the goal is to employ sixty to seventy workers by the end of the year, in order for it to continue at full capacity in the period ahead. The reopening of the Brezak Mine is extremely important for the municipality of Gornji Milanovac, because – in addition to the development of industry and the economy in the very centre of the town - industry is also developing successfully in other parts of the municipality. The Brezak surface mine in Pranjani resumed operating because Kraljevo’s Magnohrom, which also encompasses this mine, has been acquired by a new owner.

Apart from lead and zinc, what does this mine mean for Pranjani and the local government itself? - Fifteen years after its privatisation, the lead and zinc mine has been relaunched at full capacity, has close to 500 employees and is of great importance to the local government, given that part of the funds for renting the mine is returned directly to the local government for the construction of infrastructure. We have one major lead and zinc mine which has been operating successfully for several years after privatisation, which I must say is one of the best in Serbia, and operates with approximately 500 employees and generates high earnings. In addition to the relaunch of Brezak, we will soon also have some new facilities that we’ll open and tour, and that’s something that’s very important for both Gornji Milanovac and Pranjani itself. Photo by Branka Vučićević Vučković

ifteen years after privatisation, the lead and zinc mine has been relaunched at full capacity, has close to 500 employees and is of great importance to the local government, given that part of the funds for renting the mine is returned directly to the local government for the construction of infrastructure, says Dejan Kovačević, President of the Municipality of Gornji Milanovac, speaking to CorD

How many employees are at Brezak; what are the estimated reserves of ores, what are they used for and are there plans to open new plants? - The Brezak surface mine in Pranjani means a lot to the whole Pranjani area, given that after the closure of both the mine and fashion garment company Rudnik in Pranjani, we were left without almost any plants. This will mean a new life for the whole Pranjani area. The Brezak mine has great prospects and we hope that, after this privatisation and the re-opening of the mine, it will achieve excellent results in the decades to come.

There are almost 500 employees at Brezak

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RUSSIAN MINING IN 2020 – THE TOP TRENDS

Going For GOLD

Russia is currently the world’s third largest gold producer, and its output has been rising year-on-year. Gold is amongst the hottest prospects in Russian mining right now. If the sector continues its upward trajectory, then Russia is well placed to leapfrog Australia and become the number two gold producer globally

evelopment of Polyus’ Sukhoi Log, an untapped field holding that could produce 1.7m ounces once operational, will be the most significant step in generating more output. Of the smaller miners, Petropavlovsk Plc plans to boost capacity, while BlackRock Inc.-backed GV Gold may expand further, after more than doubling output since 2016 to 304,000 ounces. COAL’S CONTINUED IMPORTANCE Coal is perhaps the best performing mineral for Russia right now. Alexander Novak, Minister of Energy of the Russian Federation, has said coal is at a five-year-high in terms of both production and exports. 2018 saw final output rise by 7%, exceeding 430m tonnes, and generating over $14bn in revenues for coal miners nationwide.

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ment and upgrades on their minds. The entire industry has been Rusal’s market re-entry For example, Norilsk Nickel, one of flagged for ongoing development, has faced some issues. the largest mining companies in the particularly in creating better export world and the chief nickel producer infrastructure. According to Platts The biggest issue is globally, will be investing $1.4bn in analyst Gareth Carpenter, weak develcommodity prices. As of upgrading two key operations. opment of port and rail infrastructure, November 2019, prices had The first is the expansion of the outdated mining technology, and a company’s Talnakh Concentrator, lack of trucks, is hampering Russian slumped 10% from their also known as Talnakh Phase 3 or development plans. Up to $25bn has been allocated to March peak, which means less TOF-3. TOF-3 aims to increase the the coal industry by the government demand. Most aluminium concentrator’s throughput capacity from 10 to 18m tonnes annually, as to continue its positive growth and improve export-focussed infrastructure. sellers, including Rusal, have well as see installation of efficient enrichment technology. All the ore Russian coal miners will have more run into difficulty when mined at the Talnakh deposit would money to invest in updating their renegotiating contracts be processed here. Project commisequipment fleets from 2020 onwards. sioning kicks off in 2023. One of Russia’s richest men, RoSouth Cluster will develop further the Norilsk-1 deman Trotsenko, is eyeing up expanding production and posit where NorNickel draws a considerable share of its construction on the Taymyr Peninsula. Despite being in resources. Here, ore mining capacity, with the installation the Arctic Circle, this region holds 5.7bn tonnes of coal, of modern infrastructure and technology, will reach 9m and Trotsenko’s company, Vostok Coal, is determined tonnes annually by 2027. Stripping works launched in to extract it. 2019, while the mine rap-up is slated to begin by 2022 It’s projects and government spending like this that at the latest. make coal one of the Russian mining sectors to watch Another to watch is Udokan, one of the foremost in 2020. greenfield copper projects in the world. Framed around a brand-new metallurgical complex boasting an annual RUSSIAN MINERS INVEST production capacity of 12m tonnes of ore, and 130,000 IN MAJOR PROJECTS tonnes of copper, annually, this is a major benefactor for This round up of Russian mining projects reveals Russian copper growth. companies large and small have expansion, refresh45

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This is just two, but they represent a pleasant trend for exporters of mining and mineral extraction machinery and equipment: namely, Russian firms are looking to create or upgrade new mines.

suppliers are advised to follow Rusal’s activity throughout the coming twelve months.

ENVIRONMENTALISM MORE OF A FOCUS FOR RUSSIAN MINERS Miners throughout Russia are cleaning up their act. RUSAL ON THE ROAD TO RECOVERY A report from WWF-Russia – the 2019 Environmental Rusal recently had its US sanctions removed by WashTransparency of Mining and Metals Companies Operating ington, which means Russia’s chief aluminium producer, and in Russia – has revealed that companies a higher number of the largest outside of China, is back in business. Russian miners are revealing their environmental measures. Even so, its market re-entry has faced some issues. 41 companies took part in the 2019 The biggest issue is commodity prices. As of November 2019, prices had The mining industry is one of survey, opposed to just 14 particiin 2018. According to the report, slumped 10% from their March peak, the most important sectors of pants Russia’s leaders in transparency are which means less demand. Most aluthe Russian economy today. Polyus, SDS-Ugol and Kinross Gold minium sellers, including Rusal, have “The mining industry is one of the run into difficulty when renegotiating The growing demand for most important sectors of the Russian contracts. To circumvent this, Rusal is posi- the various mineral resources economy today. The growing demand tioning itself as a player in the premium regarding the development for the various mineral resources regarding the development of a green segment, according to the company’s of a green economy will make economy will make this sector even Sales and Marketing Director Roman Andryushin. Value added products, this sector even more valuable more valuable,” Knizhnikov said. “With that in mind, we need to generate more such as alloyed ingots and slabs, are efficient mechanisms that can reduce the negative impact expected to make up 45-50% of Rusal’s sales next year. of mining companies on the environment.” The US is once more importing aluminium products Cleaning up does not come cheap. NorNickel, actually from Rusal, with its VAP deliveries forecast to reach up a major polluter, is investing $1.9bn this year to help cut its to 300,000 tonnes in 2020. emissions and lower the company’s overall environmental Indeed, the company expects prices to start rising impact. With eco-friendly thinking becoming ever more again alongside a spike in global demand by the secprevalent in Russian mining and mineral extraction, a space ond quarter of 2020. If this is the case, and revenues for technologies to help reduce damage to the country’s increase, it may be that Rusal starts to reinvest in its environment is emerging. own production and extraction operations. Machinery 46

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THE EMBASSY OF CANADA TO SERBIA

FEATURE

CANADA SUPPORTS

Responsible Conduct In Mining Industry

Embassy of Canada hosted seminar on role of responsible business conduct in Serbian mining industry’s future

he Embassy of Canada has organized the seminar “Trilateral dialogue on responsible business conduct in mining – experience from Canada” on January 21st, with the goal of strengthening a responsible approach in the development of mining projects. The seminar gathered representatives of the Ministry of Mining and Energy, City of Bor, Municipality of Raška, Canadian companies, the World Bank, as well as other sector key stakeholders. The seminar represented an opportunity to introduce guests to the work of the international non-government organization “Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development”, with a Secretariat located in and supported by Canada. The organization which gathers more than 70 countries with active mining interests, was represented by Mr. Matthew Bliss, deputy director. Presenting the importance of this industry for Canada, Ambassador Kati Csaba emphasized that its size and value also involves responsibility towards all direct and indirect mining stakeholders. “The Government of Canada, civil society and private sector, using domestic and international experience, constantly improve standards and legislation aiming for more responsible, transparent and sustainable mining”. Ambassador Csaba introduced guests to the most important principles

and standards of responsible mining developed in or supported by Canada, including the recently established Ombudsman for Responsible Enterprises. The State Secretary of the Ministry of Mining and Energy, Stevica Dedjanski, introduced participants to the future plans of the Ministry, adding that the number of exploration licenses issued grew significantly, and that investment in exploration projects surpassed EUR100 million in 2018. “The Ministry wants to cooperate with companies in responsible project development, and our doors are always open for communication and cooperation”, added Dedjanski, insisting this topic needs to be communicated in the future. Canadian companies “Dundee Precious Metals”, “Mundoro Capital”, “Tethyan Resources” and “Medgold” introduced participants to their standards and projects developed in cities and municipalities around Serbia including Bor, Raška and Bosilegrad. The mining industry in Canada contributes to GDP with CAD97 billion or 5%, directly and indirectly employing 626,000 people. The Toronto Stock Exchange lists 1,136 mining companies, out of which 80% are exploration companies. Since 1932, Toronto hosts the annual PDAC (Prospectors&Developers Association of Canada) Convention, which will take place from March 1-4 this year.

“The Government of Canada, civil society and private sector, using domestic and international experience, constantly improve standards and legislation aiming for more responsible, transparent and sustainable mining.” – H.E. Kati CsabaCanada, Ambassador of Canada To Serbia

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FEATURE

THE BIG MINERS

Moving Away From Coal

Rio Tinto sold its last coal mines in 2018, becoming the first mining major to go coalfree. Since then other mining companies have followed Rio Tinto’s lead and exited the coal industry; could the days of mining majors investing in coal be numbered?

Winchester South coal development project in June 2018 to nglo-Australian mining major Rio Tinto is the world’s Whitehaven Coal for A$200m. second-largest mining company, and the first big mining In September 2017, Rio Tinto completed the sale of its whollycompany to divest from coal. It completed its exit from owned subsidiary Coal & Allied Industries to coal in August 2018 with the sale of its assets in Queensland, Australia. British mining company Anglo Yancoal Australia for A$2.69bn, following a The company sold its interests in the Hail American has taken small steps protracted bidding war with Glencore. Anglo- Australian mining multinational Creek coal mine and Valeria coal development to move away from coal as BHP took its first steps to divest from coal project to British-Swiss multinational Glencore for A$1.7bn, as well as its 80% interest investors ratchet up pressure, in April 2018 by leaving the World Coal Asin the Kestrel underground coal mine to a but these movements have been sociation (WCA), citing policy differences concerning climate change and a narrow consortium comprising EMR Capital and minimal compared to other range of activities of benefit to the company PT Adaro Energy for A$2.25bn. as important factors. This follows the company’s divestment mining majors divesting The WCA noted that it was “disappointed” of its 75% stake in the Queensland-based from coal

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BY UMAR ALI affected by the phase-out. Glencore is Australia’s biggest coal in the decision, saying in a statement: “BHP is one of the world’s miner, and although it has been slow to divest from coal compared largest exporters of coal. We have compared our position on to other mining multinationals (even purchasing coal assets from energy and climate policies with those set out in BHP’s Industry these companies), it appears that pressure from investors has Association Review, and believe there are no material differences encouraged the company to start moving from coal. between the two.” In February 2019, Glencore outlined plans to improve its enIn May 2019, BHP’s chief financial officer Peter Beaven told vironmental record, including efforts to ensure its membership analysts and investors in a strategy briefing that the company idenin trade organisations does not undermine support for the Paris tified the decarbonisation of stationary power and electrification Agreement, and disclosing to investors how its operations in of public transport as important strategic themes for the future. exploration and acquisition of fossils fuels are aligned with Paris Beaven also warned that coal could be phased out “sooner Agreement targets. While this is not as extensive as the moves away than expected” and that the company has “no appetite for growth in energy coal regardless of asset attractiveness.” According to a Bloomberg report published in July 2019, BHP is exploring options to exit its remaining thermal coal mines in Colombia and Australia, which are expected to generate around 4% of the company’s earnings in 2019. British mining company Anglo American has taken small steps to move away from coal as investors ratchet up pressure, but these movements have been minimal compared to other mining majors divesting from coal. In an update for its investors on 10th December 2019, the company lowered its 2020 metallurgical coal production outlook from 22-24 metric tonnes (Mt) to 21-23 Mt. Anglo American has also reduced its 2021 thermal coal target from as much as 30Mt to 26Mt. This follows an investor visit to Anglo coal from companies such as BHP and American assets in Australia in November Last year German Chancellor from Rio Tinto, Glencore’s position as a producer 2019, in which thermal coal was conspicuAngela Merkel said her of around 25% of the global coal trade, with ously absent from a list of units the company considered to have long-term potential. A country would withdraw from about a third of its business constituted by coal, means this cap on production could spokesperson for the company said Anglo coal-fired power production have significant effects on the coal industry American is on a trajectory away from thermal by 2038, showing her support as a whole. coal, adding that this move would be done In a statement describing these commit“responsibly.” for the deadline recommended ments, Glencore said: “To meet the growing However, in July 2019, Anglo American by a government-appointed needs of a lower carbon economy, Glencore approved the development of the Aquila coal commission aims to prioritise its capital investment to project in Queensland, which will extend the grow production of commodities essential to life of the existing underground operations the energy and mobility transition and to limit its coal production by six years. Last year German Chancellor Angela Merkel said capacity broadly to current levels.” her country would withdraw from coal-fired power production However, in August 2019 the New South Wales Independent by 2038, showing her support for the deadline recommended by Planning Commission approved a A$381m coal mine, to be devela government-appointed commission. The proposals highlight oped as a joint venture between Glencore and U.S. coal producer Germany’s shift to renewables, which made up more than 40 Peabody. The development will facilitate the extraction of an adpercent of its energy mix last year, surpassing coal for the first ditional 150million Mt of run-of-mine coal over a 23-year period, time. The so-called coal commission said that Germany should with the caveat that the coal can only be sold to signatories of shut down all of its coal-fired power plants by 2038 at the latest the Paris Agreement. and proposed at least €40 billion in aid to coal-mining states

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FEATURE

BY DIANA KINCH

UK Set For Mining

'REVIVAL' POST-BREXIT UK mining is set for growth after being largely forgotten as an investment destination for decades, mine developers said last month. However, much of the latest funding is coming from abroad, notably Canada, and not from the UK

nvestor interest in new or disused mine projects – both in industrial minerals and metals – is resurfacing in the UK after laying dormant for 30 years, amid signals that “metals are the facilitator of the transition to a zero-carbon economy,” said Jeremy Wrathall, founder and CEO of Cornish Lithium. Cornish Lithium is reviving a lithium brine project in Cornwall, the country’s sole lithium project. project is fully permitted. “The UK government is very supportive Wrathall’s assertion follows last month’s GBP386 million (€452 of the development of new mines,” Strongbow said. million) bid by mining giant Anglo American for Sirius Minerals’ Nonetheless, the funds for this project are coming from outside Woodsmith polyhalite mine project in North Yorkshire. The export the UK. “To be frank, there might be a revival of interest in mining in project would be Anglo’s first in the UK and the nation’s biggest-ever the UK, and perhaps from investors, however that doesn’t necesmine, requiring a potential investment of $4 billion for a 10 million sarily mean there is a revival of interest in investing in mining in the mt/year complex. Reports indicate the sale will proceed, even UK. From UK-based investors at least. All the money that we see after Sirius’s 2019 failure to raise $500 million in financing. Broker coming in is from Canada,” said Strongbow corporate communicaSP Angel said a go-ahead would be “a massive and very welcome tions manager Irene Dorsman. favour to the workers at Woodsmith and the UK government.” Strongbow recently announced plans to raise $2 million to Other new or revived mine projects underlining the UK’s mineral advance South Crofty’s drilling programme and feasibility studies, potential include the TSX-listed Dalradian Resources’ Curraghinalt with $1 million to be taken up by Canadian gold project in Northern Ireland, purchased by North American-based Orion Mine Finance in In keeping with the new push to gold smelter Osisko Gold Royalties. Cornish Lithium has managed to raise $3.4 million late 2018 for around $600 million; Australiaheadquartered Scotgold Resources’ Cononish support UK mine development, over a two-year period for its lithium project, showing “market confidence” in so-called green gold project in Scotland; Strongbow ExploraUK-based production of production of lithium from geothermal waters, tion’s South Crofty tin project in Cornwall, battery metals should in Wrathall said. It’s also gained a 500,000 pound where there is also a tungsten/tin project set for development by London-listed Strategic future be mainly aimed at local government grant for the development of this project, the priority of which would be sales Minerals at Redmoor; while in Devon, the battery production in the UK. The project is, however, still in the Drakelands tungsten/tin project is expected exploration stage and may need another five years to reach producto be developed by a consortium set to buy Wolf Minerals, formerly tion. In keeping with the new push to support UK mine development, listed in Australia and which entered voluntary administration in UK-based production of battery metals should in future be mainly 2018 after its international financial backing dried up. aimed at local battery production, according to Wrathall, who noted TSX-listed Strongbow’s South Crofty underground mine, which the government “is keen to secure a mega battery factory here in has produced in the past and considered well-positioned to capitalise the UK to support” electric vehicles. on the demand for “clean” tin, is still in feasibility studies, but has The UK Department for Business, Energy and Industry received planning permission to construct a processing plant and Strategy had no comment on the mining strategy it intends to claims to have “strong local support to resume production.” adopt after Brexit. After receiving a water discharge permit in October 2017, the

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