Skillings Mining Review August 2021 by CFX Network, LLC

2021 AUGUST IN REVIEW

110/08

BITCOIN MINING DESTROYING FINGER LAKES Bitcoin mining operation is destroying one of the Finger Lakes: Locals

Interview with Mr. Richard De Leon

A mining startup’s haste for underwater metals poses high risks

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UNDERGROUND MINING

26 Interview with Mr. Richard De Leon,

40 Turmoil raises questions on Latin Amer-

Senior Mining Engineer Consultant Mining Plus -Melbourne, Australia

ica’s energy transition minerals mining

SURFACE MINING

05 Can rising iron ore price’s

SPECIAL FOCUS

STATISTIC

46 June 2021 crude steel production 47 crude steel production December 2020

34 A mining startup’s haste for underwater metals poses high risks

reverse Alien Metals' share price decline?

06 India needs to double its iron ore mining capacity by 2030

16 Russia is considering measures to tap mining profits once the export tax is repealed

19 Mineral Technologies introduces a new modular plant line

22 Vietnam's Hoa Phat acquires iron ore mine in Australia

24 South Africa’s Economy is being rescued by Mining

32 First-ever green iron ore produced by Fortescue

THE LEAD

08 Bitcoin mining operation is destroying one of the Finger Lakes: Locals

www.skillings.net | 3

AUGUST 2021 VOL.110. NO.08 2021 AUGUST IN REVIEW

110/08

BITCOIN MINING DESTROYING FINGER LAKES Bitcoin mining operation is destroying one of the Finger Lakes: Locals

Interview with Mr. Richard De Leon

A mining startup’s haste for underwater metals poses high risks

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CAN RISING IRON ORE PRICE’S REVERSE ALIEN METALS' SHARE PRICE DECLINE?

espite some positive news from the exploration and mining project developer in 2021, the share price of Alien Metals (LSE: UFO) has been declining. The group's shares have fallen 31% year-to-date to 0.81p. They plummeted in June 2021 after Alien Metals announced the termination of an earn-in agreement signed with Capstone Mining for a copper-gold project in Mexico. Though the share price movements have not been encouraging, the company has released some positive news in 2021. It announced in June that the second phase of drilling on its Hancock tenement in Western Australia, which is part of the Hamersley Iron Ore Project, had been completed.

Announcing the project, Chief Executive Bill Brodie Good, said, “With iron ore prices remaining robust and the consistently good results we are seeing from our exploration, the team is increasingly encouraged by the potential of Hamersley Iron Ore Project, and we look forward to updating the market further as we continue to drive these projects up the value curve.” The Hamersley Iron Ore Project contributes £61.2 million to Alien Metals' total valuation of £82.9 million. The good news from the project, which accounts for such a large portion of the company's portfolio, will encourage shareholders because it removes some exploration risks. In addition, the company received an extension

of 30 days for its Elizabeth Hill Silver Tailings Project to complete its tests and study the results. Iron ore has been one of 2021's best performers, with the iron ore spot price rising 107.6% over one year to $214.43. This was primarily due to demand from China. Still, as governments worldwide turn to infrastructure projects to drive post-pandemic recovery, commodities such as iron ore are expected to rise further. At the same time, silver is being used in solar cells, electronics, and batteries in electric vehicles. This increases demand as these markets expand.

www.skillings.net | 5

SURFACE MINING

India needs to double its iron ore mining capacity by 2030 As per the National Steel Policy (NSP) 2017, to meet the demands, iron ore mining in India will have to double by 2030, according to National Institution for Transforming India (NITI Aayog) member V K Saraswat.

“Domestic production has gone up by 13% in the last five years from 129 million tons in 2015 to 206 million tons in 2019 at a CAGR of 12.4%. In terms of consumption, it has gone up from 115 million tons in 2014-15 to 160 million tons in 2019. Major efforts are being made toward achieving the goals of NSP by 2030-31,” he said. However, he noted that the sector faces significant challenges in terms of cost competitiveness due to high royalty and low import duty. Saraswat believes that despite three years of the auction process, no large mine has begun production. To date, only 53 mines have been auctioned, with only three mines able to start production.

Former DRDO Chief and present NITI Aayog member V K Saraswat. (Wikimedia Commons)

n terms of steel, he stated that growth in infrastructure, power, and cement industries would be the actual triggers for the increase.

Further, attractive opportunities arising through the Production Linked Incentive (PLI) scheme, policy support for micro, small and medium enterprises, and so on are driving steel demand, Saraswat said at an Indian Chamber of Commerce webinar. 6 | SKILLINGS MINING REVIEW August 2021

India is already the world's second-largest steel producer, and by 2050, the country is expected to increase its annual production volume by almost twice that of Europe.

There are significant issues with coking coal, logistics infrastructure, land acquisition, increased consent requirements, increased compensation, and a lack of technological advancement. He, nevertheless, is optimistic that by 2050, with all modifications and changes implemented by the government and industry, India will account for nearly one-fifth of global steel production, up from around 5% at present. India is already the world's second-largest steel producer, and by 2050, the country is expected to increase its annual production volume by almost twice that of Europe.

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THE LEAD

Bitcoin mining operation is destroying one of the Finger Lakes: Locals

Summer on Seneca Lake, the largest of upstate New York's Finger Lakes, is typically spent boating, fishing, swimming, and wine tasting. However, in 2021, many residents of this rural region are participating in a new activity: protesting a gas-fired power plant that they claim is polluting the air and heating the lake. 8 | SKILLINGS MINING REVIEW August 2021

he Seneca Lake facility is owned by the private equity firm Atlas Holdings and managed by Greenidge Generation LLC. They have increased the output of power at the gas-fired plant between 2020 and 2021, and they use a large portion of the fossil-fuel energy not to keep the lights on in surrounding towns but to conduct energy-intensive mining of bitcoins.

earn small bitcoin rewards by verifying bitcoin transactions on the internet all over the world. The math required to verify transactions and earn bitcoins becomes increasingly complex over time, necessitating increased computer power. Greenidge's computers run around the clock, consuming a staggering amount of real energy and emitting real pollution while collecting virtual currency.

Bitcoin is a cryptocurrency, which means it is a digital form of money with no physical bills or coins. Mining it, or earning it, necessitates massive high-performance computers. The computers

According to the University of Cambridge, global bitcoin miners consume more energy in a year than Chile. When the energy is derived from fossil fuels, the process can significantly increase carbon

emissions. The Greenidge plant currently houses at least 8,000 computers and is looking to add more, which means it will need to burn even more natural gas to generate more energy. Private equity firms, such as Atlas, buy companies with debt and hope to sell them later for a profit. They are covert operations with difficult-to-trace investments. In recent years, the number of such firms has increased significantly, and they now manage $5 trillion for pension funds and insurance companies, as well as university endowments and wealthy individuals.

www.skillings.net | 9

THE LEAD

Reportedly, private equity firms have invested nearly $2 trillion in energy over the last ten years, of which $1.2 trillion has been invested in conventional energy, which includes fossil fuel plants, refineries, and pipelines, compared to $732 billion in renewables such as solar and wind power. As investor pressure causes some public companies to divest their fossil fuel assets, private equity firms are eager buyers. For example, in 2019, powerhouse Kohlberg, Kravis & Roberts, or KKR, acquired a majority stake in the troubled Coastal GasLink Pipeline project in British Columbia. This 400-mile fracking gas pipeline has drawn citations from a regulator and protests from First Nations people whose land it crosses. The Environmental Assessment Office, a provincial agency, stated in a report in the fall of 2020 that the project failed to comply with 16 of 17 items inspected. As a result, Coastal GasLink was directed to hire an independent auditor to monitor its work to prevent polluting streams and harming fish. Because private equity firms typically hold investments for only a few years, they frequently keep fossil-fuel operations running that would otherwise be shut down and they are often immune from investor pressures. In 2016, for example, the Boston-based private equity firm ArcLight Capital Partners acquired Limetree Bay, an oil refinery and storage facility in the US Virgin Islands of St. Croix. After a string of toxic spills, the company declared bankruptcy, but it reopened in February 2021. It was closed down three months later after it released petroleum rain on nearby neighborhoods. 10 | SKILLINGS MINING REVIEW August 2021

KKR invests heavily in energy on behalf of endowments, public pension funds, and other institutional investors. KKR, like many of its private equity peers, has invested far more in conventional energy assets such as the Coastal GasLink Pipeline than in renewables. Giachino estimates that KKR invested $13.4 billion in conventional energy assets from 2010 to 2020, compared to $4.9 billion in renewables. KKR's spokeswoman said the firm is "committed to investing in a stable energy transition, one that supports a shift to a clean energy future while recognizing the ongoing importance of supplying the conventional energy needed for well-being and economic growth around the world today." According to the company, it communicates its investment approach, progress, and goals to stakeholders transparently. KKR recently formed a team focused on North American energy transition investments.

Greenidge’s intake pipe can draw up to 139 million gallons of lake water to cool the natural gas plant daily. Jessica McKenzie Photo: www.grist.org/

Jeff Kirt, CEO of Greenidge, the Atlasowned operator of the Seneca Lake power plant, stated that its environmental impact has never been better

ArcLight, which has invested $23 billion since its inception in 2001, relinquished operational control of Limetree Bay in early 2020, according to a person familiar with the situation, and exited in a restructuring in April, just before the accident. According to an ArcLight spokesperson, the company takes its environmental and community responsibilities seriously and is committed to maintaining the highest standards. Because private equity firms are opaque, their investors may be unaware of what they own or the risks they face. www.skillings.net | 11

THE LEAD

than it is now. According to a company-commissioned report, the lakeshore facility complies with federal and state environmental regulations and has created 31 jobs. The prospect of cryptocurrency profits adds to the allure of purchasing lowcost, carbon-intensive power plants. While natural gas-fired plants, such as Greenidge's in New York, emit fewer greenhouse gases than coal-fired plants, they still emit harmful greenhouse gases. Kirt stated that after Greenidge took over the plant, it looked for ways to maximize the value of its surplus energy.

at Atlas's retired printing plant in Spartanburg, South Carolina. Greenidge stated in March 2021 that its Bitcoin mining capacity of 19 megawatts would increase to 45 megawatts by December and could reach 500 megawatts by 2025 as it replicates its model elsewhere. Larger gas-fired plants in the United States have capacities ranging from 1,500 to 3,500 megawatts. Greenidge also announced a merger with Support.com, a struggling tech

With bitcoin mining, it struck gold. According to the company, it mined 1,186 bitcoins at the cost of about $2,869 each. Bitcoin, which is gyrating wildly, is currently trading at around $34,000. Atlas, the private equity firm that owns Greenidge, is on a roll. It recently raised $3 billion in funding from investors, bringing its total assets to $6 billion. Atlas has a stake in 23 companies, including two power generators- Greenidge in New York and Granite Shore Power in New Hampshire. Atlas purchased the 150-acre Greenidge coal-fired power plant in 2014, three years after it had closed. The nearly 80-year-old plant, which was converted to natural gas, began operations in 2017, supplying energy to the grid only when there was a high demand. Greenidge started using the plant to power bitcoin mining in 2019 and increased its output. It still provides surplus power to the local grid, but much of the energy it generates is now used for bitcoin mining. According to company documents, it has plans for expansion. Greenidge announced last week the launch of a new bitcoin mining operation 12 | SKILLINGS MINING REVIEW August 2021

support company whose stock is traded on the Nasdaq. Atlas will gain control of the merged company and access public investments as part of the deal expected to conclude in the third quarter of 2021. According to a regulatory filing, Atlas founder Andrew Bursky owns half to three-quarters of the company. Greenidge stated last month that its operations would be carbon neutral by the end of 2021. It is purchasing credits from various US greenhouse gas reduction projects

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THE LEAD

to offset the plant's emissions. According to critics, bitcoin mining is viewed as a threat to the environment because new operators of power plants may decide to use permits issued in the past without undergoing in-depth environmental assessments. According to Greenidge, state environmental authorities have determined that the plant does not have a significant impact on the environment. Nonetheless, the plant's emissions are skyrocketing. Regulatory documents obtained by Earth Justice through an open records request showed that the plant's carbon dioxide equivalent emissions totaled 243,103 tonnes at the end of 2020, up from 28,301 tonnes in January. Federal documents show that before it began mining bitcoins, the plant produced

Greenidge Generation sits on the shores of Seneca Lake in Dresden, NY. Jessica McKenzie

119,304 tonnes of CO2 in 2018 and 39,406 tonnes in 2019. Residents protested the plant on June 5, 2021, at a nearby Department of Environmental Conservation office in Avon. They claim that if regula-

tors do not rein in the Greenidge plant, 30 other power plants in New York will be converted to bitcoin mining, jeopardizing the state's emission-reduction goals. Greenidge's water usage is another issue, according to residents. Currently, Greenidge is permitted to take in 139 million gallons of water and discharge 135 million gallons per day at temperatures as high as 108 degrees Fahrenheit during the summer and 86 degrees Fahrenheit during the winter. The Environmental Protection Agency (EPA) warns that rising water temperatures can stress fish and promote toxic algae blooms. A full thermal study has not been completed and will not be until 2023, but residents oppose the plant claiming the lake is warmer when Greenidge is operational. Greenidge lately published average discharged water temperatures from March 1 to April 17, 2021, during the trout spawning season.

Informal temperature monitoring of Greenidge’s discharges in August shows water is warmest immediately below the discharge pipe into Keuka Outlet (red line). The lowest water temperatures are from a point above the discharge pipe (blue line). The yellow line shows that water cools as it flows from Keuka Outlet into Seneca Lake. The green line shows the difference in temperatures above and below the outlet pipe. Source: CPFL.

14 | SKILLINGS MINING REVIEW August 2021

They ranged from 46 to 54 degrees Fahrenheit, with differences of 5 to 7.5 degrees between inflow and outflow. According to Greenidge, water temperatures recorded at a buoy about 10 miles north of the Greenidge plant and at a depth of three-

and-a-half feet averaged 67.3 degrees from June 7 to July 6, 2021. On June 7, the temperature dropped to 61 degrees, and on July 1, it reached 73 degrees. Temperatures have risen over longer periods, however. According to a February 2021 email from the DEC to a resident, since 2017, the plant's daily highest discharge temperatures have been 98 degrees in the summer and 70 degrees in the winter. Greenidge's spokesperson stated, "The limits already protect the lake's fishery and the public health, and they have been clearly validated as not concerning."

Greenidge is not universally despised. The Dresden Fire Department appreciated the company's $25,000 donation for a jaws-of-life machine, and the school district was thankful for a $20,000 gift to develop education and enrichment programs. A recent economic study commissioned by Greenidge found that the company paid $272,000 to local governments in place of real property taxes in 2020. However, the residents are compelled to fight on.

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SURFACE MINING

Russia is considering measures to tap mining profits once the export tax is repealed According

to people familiar with the situation,

Russia

in commodities. However, the temporary measures announced by Russia in June 2021 risk causing a change in exports if companies stockpile the metal, and the costs could be passed on to consumers. Raising mineral extraction taxes would almost certainly mean those producers would bear the lion's share of the additional costs.

considering long-term measures to take a large portion of mining companies' profits after a temporary export tax is repealed later in 2021.

o calm rising commodity prices and boost the state exchequer, the government announced in June 2021 a duty of at least 15% on exports of steel, nickel, aluminum, and copper beginning August 1 – at varying rates. It stated that the move would be temporary and that it would work to develop more long-term solutions. Officials are now considering changes to mineral extraction taxes, with the rates

likely tied to raw material prices so that the levies rise when the minerals are in the market. It will most likely replace export taxes beginning 2022, with a final decision to be made following the September 2021 parliamentary elections. With economies recovering from the COVID-19 pandemic, countries worldwide have taken steps to alleviate inflation

16 | SKILLINGS MINING REVIEW August 2021

It is believed that regulating the market via a mineral extraction tax would be less painful for the metals industry and the global market because it would be more predictable. According to the July 5, 2021 issue of Vedomosti, a new mineral extraction tax could raise 100 billion rubles ($1.35 billion) per year, and the increased levy could include precious metal producers. The government has more than tripled taxes on most metals and fertilizers in 2021 to help reduce the budget deficit, though coal, gold, and silver have been excluded.

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18 | SKILLINGS MINING REVIEW August 2021

Mineral Technologies introduces a new modular plant line For more than 80 years, Mineral Technologies (MT) has led

the industry in developing new and innovative mineral processing solutions. Their latest Modular Plant packages, synonymous with gravity separation and world-class spiral technology, deliver a combination of off-the-shelf modular design and engineering mastery.

ustomizable to the specific ore body, Mineral Technologies' new Modular Plants provide the same superior metallurgical performance that the company is known for. Besides being affordable, these units are also customizable, manufactured to the highest quality and safety standards, easy to ship and assemble, and can be relocated if necessary. It's clear that they put in the effort; this product line isn't just another modular plant on the market.

SEPARATION OF MINERALS IN DNA

General Manager Alex de Andrade spoke at the launch of the new plants about the underlying knowledge and expertise that allows Mineral Technologies to "find a better way" and improve mineral processing operations.

Alex is proud of MT's long and successful history, which, according to him, has enabled them to "become a global leader in fine mineral separation. Initially running mining operations in Australia before moving to a technology-focussed business. Mineral processing is uniquely embedded in our DNA and explains why we've been involved in most of the world's major mineral sands projects and a growing number of iron ore projects". According to Alex, the company's innovative culture continues to improve both equipment and plant designs for customers worldwide. Recent marketing solutions include the Mobile Mining Unit (MMU), Lyons Feed Control Unit (LFCU), and Relocatable Modular Plants. www.skillings.net | 19

SURFACE MINING

Modular Plants enable project teams to increase their outputs and capacity on demand, bringing real financial benefit. They can be easily transported across sites or added modules at a later time. UNYIELDING METALLURGICAL OUTCOMES

At the launch, Matthew Allen, Global Manager - Business Development, stated that the new Modular Plants family had been a year in the making, cleverly designed to deliver exceptional operational performance while providing a quick return on investment. Modular Plants enable project teams to increase their outputs and capacity on demand, bringing real financial benefit. They can be easily transported across sites or added modules at a later time. "When we started to develop our new modular plant designs, we didn't want to compromise metallurgical process outcomes, which was a common feature of most modular plant designs. We knew there had to be a better way than the

traditional one size fits all approach that forces customers into compromising both metallurgical and financial outcomes", said Matthew. BRINGING TOGETHER THE BEST MINDS

The development team also had the advantage of enlisting the best plant design minds from the engineering team of Mineral Technologies. "We have a very strong engineering design capability with over 100 engineers located across our global footprint", said Matthew. Mineral Technologies is well known for its spiral separators, of which it is the world's leading supplier. Also, the company is a leading supplier of process plant design, including the world's largest min-

20 | SKILLINGS MINING REVIEW August 2021

eral sands plant, Grande Cote, in Africa. FULLY CUSTOMIZABLE

With capacities spanning from 5 t/h to 300 t/h, the new Modular Plants range allows Mineral Technologies process engineers to tailor plant designs to specific ore bodies. Matthew discussed the current issues that many customers are experiencing with more difficult ore bodies that necessitate more complex process solutions. MT smarts have shown a growing demand in new and upcoming projects, according to him. "We wanted to help customers get operational faster despite the growing complexity of their ore bodies. With our in-house metallurgical testing, we can

deliver the entire process. From initial mineral testing and flowsheet development, our experts can use the clever flexibility we've designed into our Modular Plant range to customize a solution specific to the orebody.", said Matthew. The customizable modules have been designed to accommodate the entire line of Mineral Technologies' world-class spiral separators, so there is no reason for a Relocatable Modular Plant not to have the best spiral technology available. LOWERING THE ENVIRONMENTAL IMPACT

Mineral Technologies' new Relocatable

Modular Plants have also been designed to incorporate some of their most recent innovations, such as the LFCU and CT1 spiral technologies, which have recently been trialed and shown to reduce water requirements significantly more than traditional spiral plants. Matthew describes, "our recent trials that combine the LFCU feed system with the latest CT1 compact spirals, have shown successful mineral separation at feed densities over 60% solids (w/w). This means that this new technology has the potential to reduce water demand by almost two-thirds".

Mineral Technologies estimates that the decrease in water consumption by the plant means the amount of water sent to the tailings dams will decrease significantly. Consequently, tailings systems consume significantly less power. ADDITIONAL INFORMATION

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SURFACE MINING

Vietnam's Hoa Phat acquires iron ore mine in Australia Hoa Phat, a Vietnamese steel producer,

has purchased Australia's Roper Valley iron ore project in the Northern Territory (NT) in order to secure at least 50% of its iron ore demand, or 10 million tonnes per year through mine ownership in Australia.

oa Phat is also interested in acquiring Australian coking coal mines to become self-sufficient in the critical steel feedstock. Despite the fact that Australian iron ore mines and projects are presently trading at a premium because of the current high price environment, several coking coal mines are up for sale due to lower coking coal prices as a result of China's ban on Australian coal imports. These include the BHP Mitsui Coal mines in Queensland and some mines in New South Wales' Illawarra region. The Australian Foreign Investment Review Board has endorsed Hoa Phat's purchase of Roper Valley, also known as Roper River, from UAE firm Al Rawda Resources as part of a deal struck in February. According to Hoa Phat, the

22 | SKILLINGS MINING REVIEW August 2021

mine has 320 million tonnes of reserves and a mining capacity of 4 million tonnes per year. Previous owners struggled to keep production going at what was a relatively high-cost, low-grade operation. In 2016, Al Rawda purchased the Roper River project from administrators and applied to the NT government, through its Australian subsidiary Northern Territory Iron Ore, to reopen the mine in early 2018. However, this did not happen and the mine has remained dormant. Sherwin Iron, the mine's previous owner, was one of the first small Australian

Operating costs in Australia are much lower than they were in 2014, though they are beginning to rise again as the Covid-19 border closures make it difficult to attract skilled labor. Iron ore prices are also nearing record highs, prompting the restart of several more marginal projects.

iron ore mining firms to go into voluntary administration in July 2014, when the 62pc Fe iron ore price was $95/t cfr China. It was a relatively high-cost mine that only shipped 300,000 tonnes at an average of 58.5pc Fe, resulting in a significant discount to the 62pc price before the administrators were called in. Roper River had a resource estimate of 488 million tonnes when it went into administration, with Sherwin forecasting that it could produce 81 million tonnes of marketable product at an average Fe content of 57 percent.

Local indigenous communities are opposed to the restart of Roper Valley because it includes barging ore up the Roper River for transshipment in the Gulf of Carpentaria, although trucking it to Darwin is less expensive.

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SURFACE MINING

South Africa’s Economy is being rescued by Mining The world's deepest precious-metals mines, along with massive iron-ore and coal pits, are providing an unexpected boost to South Africa's economy, which is slowly recovering from its worst contraction in a century. 24 | SKILLINGS MINING REVIEW August 2021

ising demand and prices for commodities such as platinumgroup metals (PGM), iron ore, manganese, and coal are generating record mining profits and increasing government revenue. This is despite decades of declining output and investor reluctance to build new mines, which have harmed the industry's prospects. President Cyril Ramaphosa had said that the sector would play an essential role in accelerating the recovery of South Africa from 2020's coronavirus-induced slump.

When South Africa's economy falters, the mining industry frequently takes center stage. Its once-dominant gold industry fueled the country's transformation into the continent's most industrialized economy. Bullion sales insulated the economy from the effects of the 1970s oil-price and dollar collapse, as well as international outrage against apartheid rule a decade later, which resulted in massive capital outflows. The commodities boom of the 2000s provided the Treasury with a war chest to weather the global financial crisis's devastation.

PGM exports by the world's top platinum suppliers increased by 40% in 2020, despite COVID-19 disrupting operations and reducing output, according to the National Statistics Agency.

windfall is one of the largest on record. Previous experience demonstrates how South Africa's macro fortunes can shift due to favorable commodity prices and a favorable external backdrop. Consequently, there has been a period of respite, relief, and rallying. Nonetheless, Ramaphosa's government's failure to use the commodity rally to accelerate a slew of reforms and pursue investment to stimulate growth and create new jobs could cancel out the recent fiscal gains. According to the Reserve Bank of South Africa, the rally in commodities prices will only last a short time. While mining production has returned to pre-lockdown levels, the industry's full potential is limited by challenges ranging from insufficient electricity supplies to regulatory uncertainty, as per the central bank's Quarterly Bulletin released on June 29, 2021.

The mining industry's output increased by 18.1% in the first quarter of 2021-22 compared to the previous three months, contributing to higher-than-expected growth. During the period, the sector accounted for 9% of gross domestic product (GDP). The mining industry, which employs over 451,000 people, accounted for 8.2% percent of GDP in 2020-21. First time in five years, revenue for the fiscal year through March exceeded budget estimates, thanks to stronger corporate tax collections. This has allowed the Treasury to reduce the amount of debt on sale for the second time at its weekly auctions since March 2021, which bodes well for the Treasury's plans to generate in fiscal 2024-25 a primary surplus and stabilize the debt at 88.9% of GDP in 2025-26. PGM exports by the world's top platinum suppliers increased by 40% in 2020, despite COVID-19 disrupting operations and reducing output, according to the National Statistics Agency. PGM sales, which are in high demand as stricter emission regulations increase their use in vehicle autocatalysts, totaled $13.3 billion, owing to a rise in palladium and rhodium prices. South Africa's terms of trade, which reflect export prices relative to imports, increased 12% in 2020 and by over 20% since the end of 2018, as the global economic recovery from the pandemic increased demand for commodities. The trade www.skillings.net | 25

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profiles in mining

Interview with Mr. Richard De Leon Senior Mining Engineer Consultant Mining Plus -Melbourne, Australia Richard De Leon is a Mining Engineer by trade with a passion to seeking out solutions for Mining Companies and employ effective mine planning with the use of best practice mine planning, as well as optimizing mining business operations. Having graduated from one of the world’s top mining universities (UNSW), Richard has spent the majority of his career in metals mining - covering open cut and underground operations. Richard has also managed and built a company based in Vietnam.

Summarize your company business and current projects you are involved in. Mining Plus is the leading mining technical services provider, consisting of professionals specializing in geology, mining engineering (Surface & Underground), geotechnical engineering, mine ventilation and operational management. I have been involved in Iron Ore, Gold, Diamonds, Minerals sands projects to name a few. I am involved from all levels of project evaluation to mine planning and project execution with site support assistance for various clients. Mining Plus has had the privilege of working in all corners of the world throughout our rich history. Our passion

for our great industry comes from the understanding that Geology and Mining is a global "language" and this is represented by the locations we have worked. Some highlights include the largest mineralisation systems on earth based in Australia to the coldest parts of the world in Russia and Canada to the highest mines in the mountains of Peru and Chile to the deepest mines in South Africa to the biggest open pits in the US. It is however not only about the "most" it is also about everything in between from deserts, jungles, cities, rivers, oceans, farmland and just the plain old bush. With over 1,850 projects for 630 customers in 40 countries over a range of different commodities we have built a diverse experience base and reputation. www.skillings.net | 27

PROFILES IN MINING

Tell us a bit about your prestigious company, “Mining Plus” please, especially how it all begun. Mining Plus started from a small two-man consulting company based in Perth Western Australia. To date it has grown to have a global presence across multiple mining disciplines; we have offices around Australia, Canada, United States, South America, United Kingdom, and East Asia - Mongolia. Our core capability is in geology, mining engineering, and geotechnical engineering, covering a broad range of mineral commodities and project types, enhanced by strategic alliances in other core disciplines.

28 | SKILLINGS MINING REVIEW August 2021

tical approach. We provide services from exploration to mine planning to operations. Mining Plus is a part of the Byrnecut Group, which allows us to provide additional coverage to other sectors of the industry.

Mining is a lot about managing teams in foreign countries and cultural integration, how do you execute all of this? Managing teams already has its challenges, however managing teams in foreign countries has the added challenge of language barriers, culture and skill sets. I particularly experienced this during my time managing a local team of mining professionals in Vietnam.

We have grown and diversified over the years to cover a broad range of mineral commodities across the project value chain, from the conceptual stage of projects, right through to feasibility study work, project delivery, commissioning, and mine closure.

I found the best way to start my journey to accomplishing a successful team was to immerse myself into the culture and pick up the language quickly, at very least the basics to earn the rapport with the team members.

Mining Plus can integrate seamlessly with client project teams to deliver results with the flexibility of working remotely or mobilising to site. Our operations are conducted with an underlying emphasis on innovative thinking coupled with a prac-

Culture is also another important aspect to dive into and embrace, it eventually grows on you and you start to understand the individual characters and enjoy the way of life that is very different in comparison to growing up in Sydney – Australia.

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profiles in mining

Once you have a little language skill and cultural understanding under your belt it becomes much easier to train, skill-up team members and start bridging the gap of knowledge and move the operations to best industry best practice. Managing teams is a two- way street, you learn just as much as they learn from you. Respect along with trust is what then makes

managing the foreign workforce a much easier and successful outcome.

What are some basic primary musthave skills that you expect any workforce to come trained with, and then what are the unique propositions that they usually learn while their work at Mining Plus?

Some of the basic skills I would expect is having that site time spent and in varying roles so you get a good understanding of how an operation runs and the processes involved. Having also experience working on more than just 1 site is always a benefit so you can compare and understand why or how things are done different to achieve the same outcome. Skilling up in www.skillings.net | 29

PROFILES IN MINING

Our core capability is in geology, mining engineering, and geotechnical engineering, covering a broad range of mineral commodities and project types, enhanced by strategic alliances in other core disciplines. mine planning software is a general must to me at any point. Particularly, at Mining Plus you will be expected to use multiple packages (with the technology landscape always changing and improving); the diversity gives you the upper hand and this is something unique that a professional is likely to learn when working at Mining Plus. Further to the importance of having some site time, Mining Plus will definitely provide the opportunity to work across multiple commodities and projects around the world which is something you general don’t get to do if working specifically at a site role. Mining Plus is also at the forefront of technology in the industry and is a strong advocate for the industry. So, there will always be opportunities to participate in something new and exciting and be in the lookout of new technologies that can assist solve problems.

Please throw some light on the role of software technology in mine planning. Having also worked directly in software development for the mining industry, I can confidentially say that software use in mine planning has come a long way 30 | SKILLINGS MINING REVIEW August 2021

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profiles in mining

from the early days and with the change of workforce and younger professional entering key roles. This has driven the need to shift towards stream lining processes in software applications and emphasis on UI/UX, allowing for faster training and uptake on new applications. Now-a-days all area of mine planning goes through some sort of mine planning package whether its geological modelling, site infrastructure layout, mine design and financial modelling. Standardization has given rise to platforms that can produce live production feeds and help optimize operations. Software technology has been taking advantage of the advances in computing as well to help speed up processes and standardize the way we perform mine planning activities.

What have you done to optimize mining business operations at Mining Plus in the recent years? Some of the work done to date to help mining operations has been to optimize resources and pit designs to improve the overall economics and also to assist with identifying where possible expansions of a resource could potentially be to assist with future exploration direction. Others have been around managing and optimizing teams on sites to help streamline processes to speed up workloads using smart software technologies or processes. This is particularly more important nowadays where we face a shortage of mining professionals and we are finding that mine planning teams are having to diversify in their skill sets.

What is the one biggest challenge that you face as a senior mining consultant? How has covid impacted this? One of the biggest challenges faced as a senior consultant is having to quickly upskill in changing technologies and also

to rapidly learn as we face a shortage of mining professional particularly the “grey hairs” as we younger professionals would call them. Knowledge being passed down is hard to come by, but luckily at Mining Plus I have had the opportunity to spend time and learn from highly experience professionals and this in turn I believe has made me a better mining consultant. Whilst being in the deep end in my time managing in Vietnam, the skills and knowledge picked up were vital to developing myself as a professional consultant and I would definitely recommend to all new young aspiring mining professionals to definitely jump into the deep end

if the chance arises. Covid has created newer challenges with regards to travel restrictions to get to sites and more so for international travel, however the industry has done fairly well with the use of technology and remote access, site live video feeds, and automation. However, at Mining Plus we have handled Covid very well and myself being based in Melbourne and the several lockdowns we have had have not affected the way I can help clients even if working from home. As long as you have a PC, desk, and a good internet connection, you can still achieve the same mine planning outcomes and workload as per pre Covid times. www.skillings.net | 31

SURFACE MINING

First-ever green iron ore produced by Fortescue As part of its renewable energy and industry initiative Fortescue Future Industries (FFI), the Fortescue Metals Group has produced high-purity green iron ore as well as trialed ammonia-powered freight. The initiative aimed to see if it was possible to use only green energy to produce green iron, steel, fertilizer, and cement.

According to FFI CEO Julie Shuttleworth, trialing hydrogen, ammonia, and battery technology to power the company's

32 | SKILLINGS MINING REVIEW August 2021

trains, haul trucks, ship engines, and drill rigs was a success. “To demonstrate this within Fortescue, we set ambitious decarbonisation targets for our own heavy industry,” Shuttleworth said. “These are being driven by FFI’s Green Team, who are aiming to eliminate carbon emissions from our own operations. This work commenced in earnest only several months ago and the results have been immense. “FFI’s green team has established a major facility at Hazelmere in Perth, where we have been managing and trialling technology on hydrogen, ammonia and battery power for trains,

Fortescue CEO Elizabeth Gaines stated that the company is working hard to make the transition from importing fossil fuels to exporting renewable energy. testing device for ship engines, and the finalization of a next-generation ore carrier design. Further, Fortescue has tested battery cells for its haul trucks. It designed and built hydrogen-powered technology for drill rigs and haul trucks for mine sites.

“We are leading by example to decrease emissions across our operations, using our large industrial platform of operating mine sites in the Pilbara to trial and demonstrate technologies in completely renewable green hydrogen, green ammonia and green electricity.

Fortescue CEO Elizabeth Gaines stated that the company is working hard to make the transition from importing fossil fuels to exporting renewable energy.

“All of us at Fortescue are committed to its decarbonisation. Our great progress to date and our ongoing projects underpin Fortescue’s plan to become a major renewable energy and industry product exporter.

“At Fortescue, we are leading the heavy industry battle against global warming, transitioning from being a major fossil fuel importer to a significant green and renewable energy and product exporter,” Gaines said.

As part of this plan, we are aiming to meet or beat our internal global industry-leading target to achieve carbon neutrality by 2030.

ship engines, haul trucks and drill rigs for technology demonstration. Our dedicated specialist teams have worked relentlessly to bring our own heavy industry decarbonisation into reality.” During the initiative, FFI produced iron ore with greater than 97% purity at low temperatures in a continuous flow process. The initiative also tested the use of waste from the green iron process to make green cement with other materials sourced from the environment. The testing involved the combustion of ammonia to produce renewable green fuel, the development of a combustion www.skillings.net | 33

SPECIAL FOCUS

A mining startup’s haste for underwater metals poses high risks Seabed mining startup DeepGreen Metals Inc. has effectively sold itself to the investors as a game-changing source of minerals for making electric car batteries that can be obtained in abundance. That, too, at a high profit while minimizing the environmental damage caused by land mining.

owever, there is compelling scientific evidence that the seabed targeted for mining is one of the most biodiverse places on the planet—and more reason to be concerned about DeepGreen's enticing promises. There are concerns about the company's business plans. Previously undisclosed agreements with South Pacific developing island states demonstrate the company's political and financial clout with its part-

ners, who rely on DeepGreen's expertise to exploit their seabed resources and are obligated to ensure DeepGreen's adherence with international environmental regulations. The Canadian-registered startup has been pitching a climate change solution for years that can be found 13,000 feet below sea level. There, billions of potato-sized polymetallic nodules rich in cobalt, nickel, and

34 | SKILLINGS MINING REVIEW August 2021

copper cover the ocean floor. DeepGreen CEO Gerard Barron refers to these nodules as "a battery in a rock." The deep ocean is home to the world's largest estimated mineral reserves, which could be worth trillions of dollars. While seabed mining is still technically and commercially unproven, rising demand and prices for metals essential to decarbonization are already sparking a gold rush to the seafloor. According to DeepGreen's public relations campaign, the

www.skillings.net | 35

SPECIAL FOCUS

minerals can be extracted gently, avoiding the environmental costs of terrestrial mining and facilitating the transition to a clean-energy future. DeepGreen stated in a statement that it does not consider mining on land or underwater to be sustainable. “The only path to sustainable metals is to build up enough metal stock to shift away from mined to recycled metals,” says Dan Porras, the company’s head of communications and brand, adding, “Our stated objective is to inject enough primary metal stock into the system to enable this shift… and exit primary extraction as soon as possible.” DeepGreen officials have misrepresented the ocean floor as less vulnerable to damage from mining, according to scientists. It has been recently discovered that deep-sea life, which DeepGreen would mine, survives on timescales that dwarf human existence. Tens of millions of years are needed for nodules to form, accumulating metallic elements that

precipitate from seawater. A single nodule can support dozens of species, including millennia-old corals, tubeworms, and sponges that incubate ghost octopuses' eggs. Nodules are central to the functionality of the underwater ecosystem. There is mounting evidence that beaked whales

dive 2.5 miles into this abyss to forage prey, holding their breath the entire time. According to researchers, half of the larger species rely on nodules and only a fraction of those animals have been discovered thus far. DeepGreen executives tend to emphasize the dangers of mining on land while minimizing those underwater in public statements. DeepGreen announced plans to go public in March 2021 by combining with a special purpose acquisition company, or SPAC. These companies are risky for investors because they are not heavily regulated. However, the risks here are global in scope. Scientists warn of the potential destruction of ocean ecosystems, which play an essential role in the global carbon cycle and climate change. DeepGreen's success with investors thus far, who have valued its SPAC merger at nearly $3 billion, is a positive sign for the case for nodules in the deep-sea mining industry. DeepGreen's SPAC, Dallas-based

36 | SKILLINGS MINING REVIEW August 2021

ISA is currently finalizing regulations that will allow DeepGreen and other companies to apply for licenses to begin seabed mining. The company holds prospecting rights over nearly 90,000 square miles in the Clarion-Clipperton Zone, a large expanse of the Pacific Ocean between Hawaii and Mexico, thanks to a partnership with three small and impoverished South Pacific island states Nauru, Tonga, and Kiribati.

Sustainable Opportunities Acquisition Corp., raised $300 million in 2020, and institutional and strategic investors have committed an additional $330 million to the new transaction. The combined company, renamed The Metals Company, will be headquartered in Canada. However, environmentalists are attempting to stop the merger. DeepGreen's push to position itself as a company that mines with "the lightest planetary touch" is a test case for disagreements between investors, regulators, and scientists about how to navigate the potential for untested climate solutions. The company appears to understand the allure of guilt-free mining.

wall, England. DeepGreen has launched an aggressive fundraising campaign as it prepares to go public. The company estimated total capital costs for a single deep-sea mining operation and an onshore metals processing plant at $10.6 billion in the SPAC registration statement, with annual operating costs of $1.8 billion after 2030.

According to scientists, environmentalists, the European Parliament, and some national governments, deep-sea mining should be prohibited until the environmental consequences are better understood.

In 1994, when the United Nations Convention on the Law of the Sea established the International Seabed Authority (ISA), it recognized the seabed to be “the common heritage of mankind,” with rich and poor nations sharing equally in any seabed mining spoils. Previous secret agreements between DeepGreen and Nauru and Tonga demonstrate the company's clout in the countries.

BMW AG, Samsung Electronics Co., Google, and Volvo Cars backed the moratorium and pledged not to use deep-sea minerals in March 2021. Protests against ocean mining are also on the rise. Many surfers paddled out to protest seabed mining at the June G-7 meeting in Corn-

Mining contractors must obtain sponsorship from an ISA member state, which is required to exercise effective control over the contractor and is jointly responsible for its compliance with environmental regulations with the ISA. In turn, sponsoring states can collect royalties and fees.

DeepGreen is one of only 22 companies authorized to prospect for minerals in the deep ocean. It is the only one that will be listed on public stock exchanges shortly. The licenses are issued by the International Seabed Authority (ISA), an autonomous and obscure United Nations organization headquartered in Kingston, Jamaica. The agency is responsible for regulating deep-sea mining while also protecting the marine environment. The www.skillings.net | 37

SPECIAL FOCUS

Most sponsoring countries work with government-run mining contractors or companies headquartered in their respective countries and controlled by their citizens. Western startups, such as DeepGreen, have sought sponsorship from small countries that have access to mining concessions that the ISA reserves for developing countries. With a population of 106,000, Tonga is the sponsor of one of DeepGreen's mining contracts. The sponsorship agreement disclosed in the SPAC registration statement allows DeepGreen to assign the mining contract unilaterally to another party and declares that the deal is governed by Canadian law. Any disagreements must be resolved in British Columbia, 5,700 miles away from Tonga. The country of Nauru has a similar agreement with DeepGreen. The license was initially obtained by a Nauruan-registered company called Nauru Ocean Resources Inc (NORI). In 2011, DeepGreen purchased NORI. According to the registration statement, DeepGreen now estimates that it will earn $95 billion from one area of the Nauru concession over 23 years of production. The startup expects to pay Nauru and the ISA 7.6 percent of its revenue in royalties. Like Tonga, the sponsorship agreement between DeepGreen and Nauru demonstrates that the government has little control. It allows DeepGreen to transfer the mining contract to another entity without reason or prior consultation. The sponsorship agreement also prohibits Nauru from nationalizing or expropriating NORI's assets, and it requires the government to guarantee the transfer of NORI's earnings overseas. The island of Nauru is 8 square miles in size, with an estimated 11,000 people,

that has been ravaged by decades of phosphate mining overseen by the United Kingdom, Australia, and New Zealand. Long plagued by corruption, Nauru's revenues are primarily derived from hosting an Australian refugee detention center, though this income has recently dropped dramatically. DeepGreen's most recent round of funding was greater than Nauru's GDP. In the event of a disaster caused by seabed mining, Nauru and Tonga could be held liable. DeepGreen's promotion of its robotic nodule collector may provide some reassurance in this regard. A sleek design designed by a Danish architecture firm is depicted in a new rendering. In stark contrast to rival contractors' mining machines, which roll across the seabed on tank-like treads, DeepGreen's machine looks like a cross between an Apple computer mouse and a Roomba. According to Porras, the collector is being built, and testing is set to begin in 2021 or early 2022. “Directing a jet of seawater across the tops of the nodules, the collector gently frees them from sediment and lifts them on compressed air bubbles to a production vessel at the surface,” DeepGreen says on its website. However, the reality may be harsher. Many believe that all marine life on nodules would be killed, and microbial life in the sediment would also be in peril. Experts say that even if they could delicately remove the sediment, the majority of the animals still live there and constitute a significant portion of the seabed's biodiversity, including many rare species.

38 | SKILLINGS MINING REVIEW August 2021

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UNDERGROUND MINING

Turmoil raises questions on Latin America’s energy transition minerals mining Latin America may be on the verge of a mining boom. Governments and businesses worldwide are scrambling to cut carbon emissions. The region is a crucial supplier of the minerals used to manufacture solar cells, wind turbines, and electric vehicles. Extraction, however, is costly and has environmental and social repercussions. 40 | SKILLINGS MINING REVIEW August 2021

"People want to stop climate change," said Juan Carlos Jobet, Chile's Minister of Energy and Mining. "That requires copper. But they don't want more copper mining." Chile supplies nearly a quarter of the world's copper. Solar panels, wind turbines, electric vehicles, and power transmission lines utilize copper. In the Paris Agreement on Climate Change, nearly every country pledged to keep global warming below 2 degrees Celsius compared to pre-industrial levels. According to the (IEA), the supply of minerals such as copper, lithium,

and zinc will have to quadruple in the coming decades to achieve that goal. It is estimated that six times more minerals would be required to achieve net-zero emissions by 2050. According to S&P Global Market Intelligence, a significant increase in mineral demand could fuel an economic boom in Latin America. In 2021, S&P Global Market Intelligence estimates, Chile, Peru, and Mexico account for nearly 40% of global copper production. Chile and Argentina account for more than 25% of the world's estimated lithium

production, while 19% of the world's zinc production comes from Mexico, Bolivia, and Peru. Significantly increasing production in Latin America faces serious challenges. It is believed that bureaucracy and a lack of local investment hampered exploration and development, and the region's mining sector remains underfinanced. Growing social and political risks in significant markets such as Chile and Peru have recently alarmed international mining companies. There are also questions about whether some parts of Latin America are even open to new mining projects. www.skillings.net | 41

UNDERGROUND MINING

However, without additional supplies from the region, the green-energy industry may run out of crucial minerals. "What we are seeing here is many groups are opposing more investment in mining because of its environmental impact, because of the impact it has on some local communities," said Jobet in May 2021 at a conference held by Columbia University. "Also, the political turmoil or the social unrest is hurting the long-term investments in mining." Latin America has been roiled by protests over what academics refer to as an "inequality crisis" since 2019. When the coronavirus struck, a region already suffering from a slowing economy was thrown into chaos.

Technicians completing construction of a new wind turbine in Israel's Golan Heights. An onshore wind farm requires nine times more minerals than a natural gas plant, according to the International Energy Agency. Source: David Silverman/Getty Images News via Getty Images

As predicted by the United Nations, Latin America and the Caribbean's GDP shrank by 7.7 percent in 2020, the largest contraction in 120 years, as unemployment rises to 10.7 percent and poverty rates reach unprecedented levels. Meanwhile, some Latin American governments are attempting to take a larger share of mining profits, which is unsettling producers as local opposition to the industry grows. The mining sector in Chile is engulfed in a debate over copper taxes. "The whole industry is following the situation very closely," said Kathleen Quirk, CFO of Freeport McMoRan Inc., which is planning on expanding the El Abra copper mine in Chile's northern desert. "The project could be a $5 billion, $6 billion project. And so, making that investment requires that we understand what the rules are." If Freeport-McMoRan opts to proceed with the El Abra expansion, executives estimate it will take at least six to eight years due to permitting requirements. These difficulties highlight a broader risk that a lack of critical raw materials will

A solar photovoltaic plant developed by Total and SunPower in Chile's Atacama Desert. Copper is an essential input for solar panels. Source: TotalEnergies

hinder global efforts to reduce greenhouse gas emissions. In May 2021, the IEA stated that existing supply and investment plans for many critical minerals are insufficient to support the accelerated deployment of clean-energy technology. The agency warned that any shortfall could postpone the transition to a zero-carbon economy, which would be necessary to mitigate the effects of

42 | SKILLINGS MINING REVIEW August 2021

catastrophic climate change. The Biden administration unveiled its plan to boost domestic battery manufacturing and critical-mineral supplies on June 8, 2021. "America is in a race against economic competitors like China to own the [electric-vehicle] market — and the supply chains for critical materials like lithium and cobalt will determine whether we win or lose," U.S. Energy Secretary Jennifer Granholm said in early 2021. "If we want to achieve a 100% carbon-free

economy by 2050, we have to create our own supply of these materials, including alternatives, here at home in America." Metals prices have recently risen, providing a glimpse of the problems that future bottlenecks may cause. Experts and executives in the renewable energy sector warned of delays in project development as iron ore and copper prices hit record highs, causing stocks of wind and solar companies to fall while the world attempts to curb climate change aggressively. CONCERNS ABOUT TAXES

Mining companies are projected to increase their investments in Latin America by about 20% in 2021 after spending fell by 21% in 2020 due to COVID-related lockdowns. However, looking beyond the expected rebound in the immediate future, the long-term trend is troubling.

barriers to production that keep some attractive projects around the world from going forward." Latin America's political winds are particularly worrying for miners, according to Brian Menell, CEO of mining investor TechMet. "You have a serious risk in Chile and in certain other countries like Peru ... of a kind of populist-socialist backlash against the growing disparities and inequalities and aftermath of the present pandemic," Menell said. "It's not impossible you get nationalization of massive lithium resources." Peruvian voters shook the mining industry on June 6, 2021, when they elected socialist Pedro Castillo as President, proposing new royalties on mineral sales and renegotiating existing tax deals. Chile's government is attempting to reduce a proposed copper tax after analysts warned that it would limit production.

Research analysts believe that financing multibillion-dollar mines isn't the way to build value for the shareholders, and obtaining approvals for massive new developments is difficult these days. Companies, therefore, are focusing less on early-stage assets in favor of expanding production at existing mines, which is cheaper and easier to accomplish. Politicians are concerned, however, that the lack of grassroots exploration could harm future production. The IEA stated that increased investment is critical as existing mines approach peak output due to declining ore quality and dwindling reserves. Metal extraction from low-grade ore generates more waste and requires more energy, raising costs and causing environmental damage. For example, more than 80% of Chile's copper is produced in waterstressed areas. Water consumption is also a source of contention in the lithium industry, which, according to the United Nations, requires nearly 2 million liters of water to produce one ton of lithium. Outside of the United States, which withheld production data, approximately 82,000 tons of lithium were produced in 2020. "Projects today around the world, geologically, are more difficult," Richard Adkerson, chairman and CEO of Freeport-McMoRan, told analysts in January 2021. Cerro Verde copper mine, for instance, is a large, low-grade project in the desert highlands of southern Peru, which requires significant investments in infrastructure and equipment, according to Adkerson. "And then you have these

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UNDERGROUND MINING

Electric shovels on a road at the Escondida copper mine in Chile where lawmakers are debating new copper taxes. Source: Construction photography/ Avalon/Hulton Archive via Getty Images

"We have to see how Chile plays out, obviously, but we're still hopeful that that's going to proceed down the path where people understand the importance of maintaining stability and the importance of being able to attract capital,” said the CEO of BHP Group, majority owner of the Escondida copper mine in Chile's Atacama Desert, Mike Henry, at an investor conference in May 2021. "Because, of course, Chile has fantastic copper resources, but for the big, ongoing investment into the country, the fiscal settings have to be attractive."

ments until there is more clarity about the fiscal regimes in those countries. THE CONTRADICTION

The growing concern on environmental, social, and governance (ESG) issues among investors and corporate executives adds to the uncertainty. Ironically, the technologies required to eliminate greenhouse gas emissions are a byproduct of mining, a notoriously dirty industry frequently carried out in high-risk areas.

Quirk, the CFO of Freeport-McMoRan, agreed with Henry. When asked about the latest developments in Chile and Peru, Quirk told investors on June 10 that the industry is unlikely to make large invest44 | SKILLINGS MINING REVIEW August 2021

To date, this dynamic has benefited Chinese companies, which face less scrutiny on ESG issues than their western counterparts and have gone to great lengths to increase ownership of and access to critical minerals around the world. In its June 8, 2021 report, the Biden administration proposed that the United States work with the private sector as well as non-governmental organizations to promote the development and adoption of robust sustainability standards for key minerals such as lithium and copper.

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be a crucial minerals supplier as producers continue to operate existing mines and add incremental capacity where possible. Nevertheless, the real question will be those potential massive new developments.

"Growing demand must be met more sustainably," BHP's Henry told investors in May 2021. "Better alignment will enable the transition to be achieved more sustainably, quickly and cost-effectively. Conversely, a lack of alignment will result in poor sustainability outcomes and slower and more costly progress on the energy transition."

"The contribution of the mining sector to the mobilization of domestic resources needs to be strengthened in the short term for the post-COVID-19 recovery but without losing the long-term vision and delaying the required efforts to make the sector more sustainable to support ... the development of mineral-producing countries."

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According to Mauricio León, officer of Economic Affairs, Natural Resources Division of the United Nations Economic Commission for Latin America, existing legal and regulatory frameworks need to be updated to address flaws or inadequacies that undermine sustainable development Caribbean. "Fiscal regimes should also be reviewed to improve revenue collection through instruments that make the system more progressive, equitable, and efficient and through capacities and mechanisms to minimize evasion and illicit flows," León said.

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As Latin American countries compete for investment, some fear a race to the bottom on ESG standards. However, with billions invested in infrastructure, it can be said that Latin America will continue to www.skillings.net | 45

STATISTICS

JUNE 2021 CRUDE STEEL PRODUCTION

orld crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 167.9 million tonnes (Mt) in June 2021, an 11.6% increase compared to June 2020. CRUDE STEEL PRODUCTION BY REGION

Africa produced 1.5 Mt in June 2021, up 46.9% on June 2020. Asia and Oceania produced 122.5 Mt, up 6.4%. The CIS produced 8.9 Mt, up 9.1%. The EU (27) produced 13.2 Mt, up 34.7%. Europe, Other produced 4.3 Mt, up 21.0% The Middle East produced 3.6 Mt, up 9.1%. North America produced 10.0 Mt, up 45.2%. South America produced 3.9 Mt, up 51.3%. TOP 10 STEEL-PRODUCING COUNTRIES

The 64 countries included in this table accounted for approximately 98% of total world crude steel production in 2020. Regions and countries covered by the table: Africa, Asia and Oceania, CIS, European Union, Middle East, North America, South America.

China produced 93.9 Mt in June 2021, up 1.5% on June 2020. India produced 9.4 Mt, up 21.4%. Japan produced 8.1 Mt, up 44.4%. The United States produced 7.1 Mt, up 44.4%. Russia is estimated to have produced 6.4 Mt, up

Table 1. Crude steel production by region Jun 2021 (Mt) Africa Asia and Oceania CIS EU (27)

1.5

% change Jun 21/20 46.9

Table 2. Top 10 steel-producing countries

Jan-Jun 2021 (Mt) 8.0

% change Jan-Jun 21/20

Jun 2021 (Mt)

% change Jun 21/20

Jan-Jun 21 (Mt)

% change Jan-Jun 21/20

28.0

China

93.9

1.5

563.3

11.8

India

9.4

21.4

57.9

31.3

Japan

8.1

44.4

48.1

13.8

7.1

44.4

42.0

15.5

e 6.4

11.4

38.2

8.3

122.5

6.4

737.0

13.8

8.9

9.1

53.3

8.7

13.2

34.7

77.8

18.4

Europe, Other

4.3

21.0

25.2

18.1

Middle East

3.6

9.1

21.4

8.7

North America

10.0

45.2

58.7

16.4

South America

3.9

51.3

22.6

28.1

167.9

11.6

1003.9

14.4

Total 64 countries

11.4%. South Korea produced 6.0 Mt, up 17.3%. Germany produced 3.4 Mt, up 38.2%. Turkey produced 3.4 Mt, up 17.9%. Brazil produced 3.1 Mt, up 45.2%. Iran is estimated to have produced 2.5 Mt, up 1.9%.

United States Russia South Korea

6.0

17.3

35.2

8.3

Germany

3.4

38.2

20.6

18.1

Turkey

3.4

17.9

19.7

20.6

3.1

45.2

18.1

24.0

e 2.5

1.9

15.0

8.0

Brazil Iran

The 64 countries included in this table accounted for approximately 98% of total world crude steel production in 2020. Regions and countries covered by the table: Africa: Egypt, Libya, South Africa. Asia and Oceania: Australia, China, India, Japan, New Zealand, Pakistan, South Korea, Taiwan (China), Vietnam. CIS: Belarus, Kazakhstan, Moldova, Russia, Ukraine, Uzbekistan. European Union (27). Europe, Other: Bosnia-Herzegovina, Macedonia, Norway, Serbia, Turkey, United Kingdom. Middle East: Iran, Qatar, Saudi Arabia, United Arab Emirates. North America: Canada, Cuba, El Salvador, Guatemala, Mexico, United States. South America: Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, Venezuela

46 | SKILLINGS MINING REVIEW August 2021

CRUDE STEEL PRODUCTION DECEMBER 2020. Source – World Steel Association COUNTRY

DEC 2020

DEC 2019

%CHANGE DEC-20/19

2020

% CHANGE

COUNTRY

DEC 2020

DEC 2019

%CHANGE DEC-20/19

2020

% CHANGE

Austria

530 e

521

1.7

6 665

-10.2

Mexico

1 550 e

1 361

13.9

16 854

-8.3

Belgium

359

505

-28.9

6 119

-21.1

United States

6 434

7 292

-11.8

72 690

-17.2

Bulgaria

40 e

-6.3

485

-14.3

Croatia

15 e

101.9

-32.0

North America

9 107

9 801

-7.1

101 119

-15.5

388

326

19.0

3 651

-21.4

2 886

2 462

17.2

30 971

-4.9

Argentina

Czech Republic

408

359

13.7

4 465

0.6

Finland

339

186

81.8

3 500

0.8

France

1 155

918

25.7

11 596

-19.8

Chile

105 e

109

-3.5

1 165

2.8

Germany

3 137

2 835

10.6

35 658

-10.0

Colombia

110 e

13.5

1 126

-15.5

17.0

1 430

5.9

Ecuador

50 e

0.5

477

-21.5

164

-44.8

1 513

-14.5

Paraguay

3 e

-4.4

-17.5

1 404

6.9

20 200

-12.9

Peru

105 e

15.8

671

-45.4

Uruguay

5 e

-7.2

-24.6

Venezuela

2 e

315.8

-43.6

3 654

3 143

16.3

38 158

-8.4

Egypt

994

574

73.0

8 229

13.4

Libya

16.2

495

-18.4

297

-1.5

3 877

-37.0

934

45.5

12 600

-10.1

2 224

19.6

29 030

13.4

186

-54.3

1 218

-52.4

Saudi Arabia

440

664

-33.8

7 775

-5.1

United Arab Emirates

280

297

-5.8

2 722

-18.2

3 465

3 371

2.8

40 745

2.7

China

91 252

84 692

7.7 1 052 999

5.2

India

9 796

9 383

4.4

99 570

-10.6

Japan

7 526

7 785

-3.3

83 194

-16.2

South Korea

5 952

5 880

1.2

67 121

-6.0

380 e

261

45.6

3 743

13.3

1 700 e

1 693

0.4

20 570

-6.3

Thailand

410 e

357

14.8

4 420

4.1

Vietnam

1 600 e

1 876

…

19 500

11.6

118 616

111927

6.0

1 351 117

1.6

473

449

5.4

5 490

0.0

3.8

586

-12.2

533

506

5.2

6 076

-1.4

Greece Hungary Italy

110 e 90 1 500 e

Luxembourg

113

17.3

1 886

-11.0

Netherlands

540

521

3.6

6 054

-9.1

Poland

680 e

642

5.9

7 890

-11.9

Slovenia

50 e

45.0

570

-8.5

Spain

891

765

16.4

10 934

-19.5

Sweden

410

376

8.9

4 409

-6.6

United Kingdom

710 e

550

29.0

7 185

-0.5

Other E.U. (28) (e)

680 e

642

6.0

8180

-12.1

10 665

10.2

138 786

-11.8

European Union (28) 11 757 Bosnia-Herzegovina

6.5

759

-5.2

Macedonia

35.9

180

-24.8

Norway

3.2

624

0.5

Serbia

119

158

-24.8

1 456

-24.6

Turkey

3 403

2 893

17.7

35 763

6.0

Other Europe

3 671

3 185

15.3

38 782

3.9

Byelorussia

200 e

225

-11.2

2 490

-5.0

Kazakhstan

355 e

374

-5.0

3 835

-7.2

45 e

28.2

465

18.7

Russia

6 110 e

6 159

-0.8

73 400

2.6

Ukraine

1 906

1 561

22.1

20 616

-1.1

-4.8

950

42.6

Moldova

Uzbekistan

80 e

C.I.S. (6)

8 696

8 438

3.1

101 756

1.5

Canada

1 070 e

1 092

-2.0

11 078

-14.1

20 e

-8.5

181

-21.4

El Salvador

8 e

-5.7

-22.5

Guatemala

25 e

-3.9

237

-22.6

Cuba

Brazil

South America

South Africa

292 e

Africa

1 359

Iran

2 660 e

Qatar

Middle East

Pakistan Taiwan, China

Asia Australia New Zealand Oceania

Total 64 countries (1) 160 858

151 969

5.8 1 829 140

-0.9

(1) - HADEED only. (2) - the 64 countries included in this table accounted for approximately 99% of total world crude steel production in 2019. e - estimated