Skillings Mining Review February 2021 by CFX Network, LLC

2021 FEBRUARY IN REVIEW

110/02

2020 IRON ORE MINING

2020 was a great year for iron ore mining

Trump officials are rushing to mine in a desert area which is considered to be holy by native tribes

Rio iron ore industry is in a healthy state

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AMERICAS

5 Vale gets go-ahead for Serra Leste expansion

10 Stopping illegal mining in the Great Lakes area amidst the pandemic

14 .2020 was a great year for iron ore mining

17 The Lake Carriers Association praise Great Lakes Maritime sponsorship

28 Trump officials are rushing to mine in a desert area which is considered to be holy by native tribes

42 American and Norway investors exert

26 Geological Survey Of India Signs MoU

pressure on SBI due a loan to Australia's Adani Mine

With GTK, Finland In Fields Of Geology & Mineral Resources

35 Rio iron ore industry is in a healthy GLOBAL

18 In a down year, Alaska mining is a bright spot

state

40 Mothballed NT iron ore mines reopen mid soaring demand for steel in China

22 Minerals and metals eye recovery in 2021

24 Las Bambas blockades affect Peru copper shipments

25 Equatorial Guinea shows progress in gas development and mining exploration

STATISTICS

46 Global crude steel output decreases by 0.9% in 2020

46 NOVEMBER 2020 crude steel production

EQUIPMENT

6 Oxbotica manages to garner US $47 million for speed mine automation

8 Booyco win proximity detection order in African nation of Namibia

12 Quebec miners are relieved amidst Covid lockdown exception

20 Blanket Mine will commission Central Shaft

32 Options remain for copper's raging bull fire

38 Demand for minerals and metals is expected to increase in 2021 www.skillings.net | 3

FEBRUARY 2021 VOL.110. NO.02 2021 FEBRUARY IN REVIEW

110/02

2020 IRON ORE MINING

2020 was a great year for iron ore mining

Trump officials are rushing to mine in a desert area which is considered to be holy by native tribes

Rio iron ore industry is in a healthy state

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AMERICAS

Vale gets go-ahead for Serra Leste expansion Vale (NYSE: VALE) has obtained permission from environmental authorities in the northern state of Parรก, Brazil, for the resumption of its Serra Leste mine expansion activities.

he expansion requires the renovation of an iron ore plant, which is expected to bring the facility's processing capacity to 10 million tonnes per year by early 2023, the company said. The Serra Leste Mine is located 50 km from Curionรณpolis and 5 km from Serra Pelada and has an estimated reserve of 307.4 million metric tons, with an average iron content of 65.4%. Development has

extraction of iron ore reached its limit. Maintenance will be done in December for the secure resumption of operations, Vale said. Serra Leste, with a 6 Mpty production capacity, is projected to generate approximately 4-5 Mtpy by 2021, achieving maximum capacity by 2022. According to Parรก state officials, the extension will account for about 1,300 new jobs on the construction site and about 1,100 jobs when the project is in operation.

been halted since January 2019, when the region previously licensed for the

In the Serra Leste Scheme, Vale foresees the mining and processing of 107 million tonnes of iron ore over the next 11 years.

www.skillings.net | 5

EQUIPMENT

Oxbotica manages to garner US $47 million for speed mine automation New investment companies in the UK, USA, China and Australia represented an endorsement of the go-to-market strategy of Oxobotica. It used its autonomy software in industrial usage cases prior to operating in urban passenger transportation applications in the future. I? What's around me? What am I going to do next? The ability to drive all vehicles, regardless of size or form, with the same system of autonomy means that a mine can be orchestrated in a way that is not currently possible.' A memorandum of understanding on the development of a open autonomy solution for mining was signed with Hitachi unit Wenco in June last year, Oxbotica said. "A memorandum of understanding on the development of an "open autonomy solution for mining" was signed with Hitachi unit Wenco in June last year, Oxbotica added. It claimed that initial trials were underway and that the two firms were actively recruiting mining partners with appropriate testing grounds.

he companies include UKbased BGF, IP Group, Halma and energy major BP; Venture Science, headquartered in San Francisco; Tencent Holdings, China; and HostPlus, Australia's super fund manager. Funds advised by Doxa Partners have sponsored the Series B fundraising. Oxbotica was founded in 2014 by Paul Newman and Ingmar Posner, Oxford pro-

fessors. Selenium, the flagship product, is described as "a full stack autonomy system and the product of over 500 person-years of effort" Selenium has the potential, both at prototype volume and at scale, to turn any suitable vehicle platform into an autonomous vehicle. It is a series of interoperable software modules that enable the vehicle to answer three main questions: Where am

6 | SKILLINGS MINING REVIEW February 2021

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EQUIPMENT

Booyco win proximity detection order in African nation of Namibia The engineering contractor of the mine, Murray & Roberts, selected Booyco to install the CXS proximity detection solution on 19 mining machines for an underground stop-over horizon project in the Wolfshag region of the mine. The deal's financial details were not disclosed.

"Our equipment will help achieve the highest level of safety by mitigating the risk of collisions between pedestrians and vehicles, and between vehicles, on this project," says Anton Lourens, Chief Executive Officer of Booyco.

features very low frequency (VLF) technology for pedestrian detection. Lourens noted that the CXS system of the new generation being used in the project is a "a true collision avoidance system" rather than just an alert system.

"The installation of our CXS units is in line with the commitment by the mine and the contractor to achieve zero harm in the workplace." Along with GPS and radio frequency technology for vehicle detection in surface applications, Booyco CXS

"The CXS system on this project will deliver Level 7 and Level 8 capability in terms of the Earth Moving Equipment Safety Roundtable (EMESRT), and can also accommodate Level 9," he says, referring to the ideal EMESRT working group that

8 | SKILLINGS MINING REVIEW February 2021

is establishing mining safety standards.In one of Otjikoto's depleted open pits for the underground stop horizon project, Murray & Roberts are planning to create a 5x5 meter drop from the orebody. With a wide range of equipment including drill rigs, dump trucks, load-haul-dumpers and utility vehicles required, as well as shotcreting and ancillary equipment, this will require the project to be mechanized.

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AMERICAS

Stopping illegal mining in the Great Lakes area amidst the pandemic What is required to curb the illicit sourcing and trafficking of mineral resources in Africa's Great Lakes region is an all-inclusive strategy involving all stakeholders. This is according to Gabor Beszterczey, the United Nations' senior program officer.

the Democracy and Good Governance Program, International Conference on the Great Lakes Region (ICGLR); and Marcus Courage, CEO of Africa Practice, who was also the moderator, joined the panel.

Veronica Cody, Regional Coordinator for the Great Lakes Region, EEAS, EU; Ambassador Ambeyi Ligabo, Director of

The Great Lakes countries of Africa are well supplied with natural resources and have one of the Earth's richest concentrations of precious minerals and metals. The

eszterczey was a panelist at a recent Africa Mining Forum webinar entitled Attracting Responsible Mining and Natural Resources Investment in a Pandemic Climate in the Great Lakes Region.

10 | SKILLINGS MINING REVIEW February 2021

mining and trade of minerals, however, is too often carried out illegally and often funded by non-state armed groups, further destabilizing the country. Moreover, these problems have been exacerbated by the onset of COVID-19. Although many attempts have been made to address this problem, according to Beszterczey, challenges remain at the regional level. What is needed, however, is to focus efforts at a global level on addressing this. THE PANDEMIC FACES GREATER RISKS

Cody, weighing in on the discussion, said the COVID-19 pandemic had a negative

The Great Lakes countries of Africa are well supplied with natural resources and have one of the Earth's richest concentrations of precious minerals and metals. The mining and trade of minerals, however, is too often carried out illegally and often funded by non-state armed groups, further destabilizing the country. of Responsible Mining and Sourcing Regulations, which will enter into force in January 2021. This ensures that all minerals collected are required to follow international requirements for responsible sourcing as set by the Organisation for Economic Co-operation and Development ( OECD). PROGRESS SLOW BUT STEADY

In the meantime, Ligabo claimed that a declaration had been made at the special summit of the heads of state of the ICGLR in December 2010 to decide that the battle against the illicit exploitation of natural resources was part of the regional

defense, sustainability and growth pact. A regional certification mechanism that is at the heart of this initiative is part of the programme. "We aim to have transparent and accountable supply chains for minerals from the mine site to export points." Significant progress has been made in this aspect, according to Ligabo, but it is happening at a slow rate. "Instability has brought violence to the region of the Great Lakes, and while this remains a major challenge, it is addressed in our framework for peace, security and cooperation," he concluded.

effect on attempts to curb illicit mineral procurement. "The pandemic has put due diligence in the supply chain at risk, affecting the ability to reduce international border trafficking and enabling new actors and new patterns of mineral trafficking to emerge," she explained. Cody added that new trends and threats have arisen because of the COVID-19 lockout. That said, some progress has been made in the tin, tantalite and tungsten fields, though gold remains a major concern as it continues to be trafficked illegally in large quantities outside the DRC. "Not only are armed groups beneficial to these activities, but corrupt state officials as well as international actors from Europe, Asia, the Middle East and the United States are also part of the programme," she noted. On a positive note, Cody clarified that the EU will issue its own collection www.skillings.net | 11

EQUIPMENT

Quebec miners are relieved amidst Covid lockdown exception The lockdown, described as tougher than the shutdown of Quebec in March 2020, comes with an overnight resident curfew and extends the closure of non-essential businesses through to February 8.

he 80-member Quebec Mining Association said it welcomed the fresh restrictions on travel in a statement this week. The members were relieved of the government's decision to enable the continuation of mining and exploration operations, partially because of the industry's vigorous steps in the first wave of the pandemic. Site entry controls and other risk reduction measures have been adopted by mining companies. Some also set up private laboratories to perform screening tests.

"The results of the measures implemented speak for themselves: it is possible to operate our mines safely. With its decision to maintain mining activities, the government has come to the same conclusion, which is reassuring for our industry and the economy of several regions," said Josee Methot, CEO of QMA. "This decision is consistent with all of the government's rhetoric that the mining sector will be one of the cornerstones of the province's economic recovery." The association said the initiatives helped preserve the foreign competitiveness of Quebec's mining industry. Quebec has

12 | SKILLINGS MINING REVIEW February 2021

so far reported 220,518 COVID cases and 8,562 related deaths, according to data from the Centre for Systems Science and Engineering at Johns Hopkins University. Nearly 1.9 million infections and 16,600 associated deaths have occurred across Canada. With record numbers of new infections reported daily, the second phase of the pandemic is intensifying. A record 3,519 new cases of COVID-19 infections were revealed Thursday in Ontario, Canada's most populous province and the financial hub of the nation, leading the provincial government to extend the remote learning period for southern Ontario students and the shutdown period for northern Ontario. Despite their role as an important commodity, miners in the province are also excluded from the most onerous restrictions.

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AMERICAS

2020 was a great year for iron ore mining

2020 was topsy-turvy for the Minnesota iron mining industry. The industry was hard hit by plant idlings, employee furloughs and a slowdown in demand. Mega consolidations and acquisitions are, at the same time, promising to lead the iron and steel industries to a new future. About 20 years ago, significant market restructuring occurred. This year, however, even further restructuring took place. Leading the way was Cleveland-Cliffs, Inc.

wo big consolidations were completed by Cliffs, which moved the 173-year-old firm into steelmaking for the first time.

In its mammoth Minntac Mine in Mountain Iron, United States Steel Corp.

expanded into electric arc furnace steel making and agreed to option interest. In the spring, after the industry hit the skids, domestic steel prices and global iron ore prices skyrocketed to the highest levels in years by the end of 2020. “It

14 | SKILLINGS MINING REVIEW February 2021

was a remarkable year in a lot of different respects,” said Kelsey Johnson, Iron Mining Association of Minnesota president. “The Iron Range facilities are all integrated into steelmaking facilities. It's not like they're trying to sell iron ore on the open market anymore.”

More positive news from the industry is that, relative to 2019, steel shipments into the United States are down. According to the American Iron and Steel Institute, total and completed steel imports for the year are estimated to be around 22.4 million tons. Compared to 2019, that's a 19.8% cut. “Even though we had really crazy economic conditions, imports are still down 22%,” Johnson said. “All of that Section 232 (steel tariffs) work is still playing out in our favor.” The following are top iron ore mining stories that emanated from northeastern Minnesota in the past year. PLANT IDLINGS

The unpredictable nature of the domestic iron ore and steel sectors has once again hit home. Three of the six iron ore plants in northeastern Minnesota went idle in the midst of the national and global economic downturn.

CLEVELAND-CLIFFS COMPLETES SECOND STEEL DEAL

On December 9, Cleveland-Cliffs concluded a $1.4 billion deal in its second big acquisition to buy a large part of ArcelorMittal USA and its subsidiaries. The purchase implies that Cleveland-Cliffs has full or part ownership in four iron ore facilities in northeastern Minnesota, Hibbing Taconite, Minorca Mine, Northshore Mining Co. and United Taconite.

The deal makes Cliffs the United States' largest flat-rolled steel producer and the largest producer of iron ore pellets in the world. As the only two integrated steelmakers left in the United States, it also leaves Cleveland-Cliffs and United States Steel. KEETAC RESUMES

Production of iron ore pellets resumed Dec. 8 at Keetac after being down for nine months. The re-start brought back to work some 380 steel employees.

In the spring, after the industry hit the skids, domestic steel prices and global iron ore prices skyrocketed to the highest levels in years by the end of 2020.

In the spring, Hibbing Taconite Co., Northshore Mining Co. and Keetac were all quiet. The idlings have resulted in around 1,700 employees being furloughed. In late summer, Hibbing Taconite and the Northshore Mining Co. resumed operations. CLEVELAND-CLIFFS PIONEER ALLIANCE

Cleveland-Cliffs, Inc., bought AK Steel Holding for $1.1 billion in its first mega transaction of the year. Two integrated blast furnace steel mills, two electric arc furnaces, a new hot-briquetted iron plant and other installations are included in the contract. For the automotive industry, steel facilities manufacture value-added steel and specialty components. Cliffs also relocated to the Port of Toledo to complete its hot-briquetted iron factory. Northshore Mining Co.'s DR-grade pellets will feed the factory. www.skillings.net | 15

AMERICAS

Some Keetac steel workers went on to work at other northeastern Minnesota iron ore plants during idling, or accepted other jobs. Previously, from 2015 to 2017, Keetac was idle for 22 months. US STEEL STARTS MONETIZING IRON ORE ASSET

U.S. Steel Corp. cut a deal to sell Stelco, Inc. a 25 percent stake in Minntac Mine (Steel Company of Canada). Stelco was expected to pay the U.S. $100 million of steel in five installments of $20 million due by Dec. 31, 2020. Stelco had paid U.S. salary as of Sept. 30, 2020 $60 million in steel, according to the U.S. Report for Steel 10-Q. In order to acquire the 25 percent stake, Stelco has until Jan. 31, 2027 to pay another $500 million. North America's largest iron ore plant is the Minntac Mine. The Minntac Mine is wholly owned by the United States. Steel since October 1967, when it started operations. PELLET PRODUCTION DECLINES

For a portion of the year, with three plants idle, overall iron ore pellet production took a hit. At the end of the year, production was expected to fall below 30 million tons. The six plants have an annual capacity of some 40 million tons of pellets of iron ore. Not hitting the 30 million-ton mark means that iron ore producers are not eligible for a 25.1 cent-per-ton Taconite Export Tax refund under the state law. MESABI METALLICS

lics until May 1, 2021, to meet several benchmarks. For nearly two decades, the uncompleted mining and processing facility has been in progress. IRON ORE INDUSTRY IS ENVIRONMENTALLY FRIENDLY

The iron ore facilities in Northeastern Minnesota run on 50% renewable energy.

The state of Minnesota Executive Council gave Mesabi Metallics additional time to move toward completion of its iron ore project near Nashwauk, amid opposition from several Iron Range legislators.

In December, Minnesota Power, which supplies the plants with energy, reported that all its customers are now receiving 50% of their electricity from renewable sources. The biggest customer is Minnesota Power's Iron Ore Plants.

A mineral lease agreement was amended by the Council, granting Mesabi Metal-

U.S STEEL TAKES OVER BIG RIVER STEEL

In order to acquire the remaining 50.1%

16 | SKILLINGS MINING REVIEW February 2021

interest in Big River Steel, United States Steel exercised an option. Big River Steel in Osceola, Ark., is the newest minimill in America. Steel from recycled scrap is made by the mill. US. U.S. Steel already owned the mill's 49.9% stake. To receive the remaining 50.1%, the U.S. $774 million will be paid by Steel. The acquisition, together with the start-up at its Fairfield Works in Alabama of an electric arc furnace (EAF), moves the U.S. Steel into the growing segment of steelmaking EAF. According to the American Iron and Steel Institute, EAF steelmaking accounts for around two-thirds of all the steel currently produced in the United States.

The Lake Carriers Association praise Great Lakes Maritime sponsorship The Lake Carriers' Association is thankful to the members of Congress who continue to see the value of the maritime industry in the Great Lakes and the crucial economic protection that the nation offers.

his week's huge omnibus spending bill passed by Congress requires support for a new U.S. Great Lakes Icebreaker and major investment in the Great Lakes Navigation System Coast Guard (USCG) (GLNS).

For the Department of Homeland Security, FY21 appropriations provide $4 million for the USCG to build the urgently needed heavy Great Lakes icebreaker. Over the past five years, the project has earned $18 million in total.

A significant problem remains the loss of over $2 billion in economic development and over 10,000 jobs over the past eight years due to insufficient icebreaking on the Great Lakes. The money allocated to the USCG this year will continue the progress already made in bringing the new heavy icebreaker from the Great Lakes forward.

Together with the help of other Great Lakes Congressional delegates, Senator Tammy Baldwin has made considerable efforts to ensure that trade will continue to travel safely across the Great Lakes throughout the winter months. "Congress has a vested interest in protecting our sailors from hazardous ice conditions, coastal communities from devastating floods caused by ice jams, and the economy from major disruptions," said Jim Weakley, President of the Association of Lake Carriers.

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GLOBAL

Aerial view of Kensington Mine Comet portal. www.wikipedia.org

In a down year, Alaska mining is a bright spot For several of Alaska's firms, it's been a rough year, but one industry is doing well-mining. The prices of metals are up and the cost of fuel is down, which means good profits for the handful of mines made in Alaska. 18 | SKILLINGS MINING REVIEW February 2021

With the happy outcome that more gold is found and demand is growing, a few mining companies are pouring more funds into exploration. At Pogo, an underground mine near Delta Junction east of Fairbanks, one example is. Northern Star Resources Ltd., an Australian company operated by Pogo, has raised the mine's reserves to an estimated 6.7 million ounces at 0.29 ounces per ton of ore, the mine's record amount of gold. This also gives Pogo one of the highest-grade mining properties in the world with an ore body larger than 5 million ounces. Overall, the "endowment" of Pogo gold is now estimated at 11 million

Under the estimated 6.7 million-ounce reserve, 3.1 million ounces are in the ‘measured and indicated' category of higher confidence and 3.6 million ounces are in the 'inferred' category’. This is jargon from the mining industry. ounces, combining the existing 6.7 million ounce reserve with over 4 million ounces extracted from the mine so far. Under the estimated 6.7 million-ounce reserve, 3.1 million ounces are in the ‘measured and indicated' category of higher confidence and 3.6 million ounces

are in the 'inferred' category’. This is jargon from the mining industry. Measured and indicated resources are those in which the quality and quantity of the mineral is known and well defined, usually through drilling test holes that obtain core underground ore samples.

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EQUIPMENT

Blanket Mine will commission Central Shaft Blanket Mine, a GWANDA-BASED gold mining company, is expected to commission its Central Shaft this quarter, adding momentum this year to the company's output target of between 61 000 and 67 000 ounces.

n July 2019, Caledonia Mining Company, operated by Blanket Mine, completed the Central Shaft sinking program. Due to the adverse effects of the Covid-19 pandemic, the equipping of the shaft was slower than expected. The New York Stock Exchange and the mining company Aimlisted said: “During the first quarter of 2021, the Central Shaft is planned to be commissioned. “Targets production of 61 000 to 67 000oz of gold in 2021; targets production of 80 000oz of gold per annum from 2022.” Caledonia, meanwhile, has announced an increased quarterly dividend payment of US$0.11 on each of the shares 20 | SKILLINGS MINING REVIEW February 2021

Caledonia Mining Company reports a further 10 percent rise in their quarterly dividend, reflecting a total 60 % increase in the dividend since the first increase in October 2019."

of the company. The mining group said the analysis reflects a 10 percent rise from the previous 10-cent quarterly dividend paid in October 2020.

fidence in the outlook for our business. "As reported in our results for the third quarter of 2020, the company continues to perform well, supported by strong production and a firm gold price." He said that as they reach the end of Blanket Mine's sixyear investment program, his company hopes that the combination of increasing output and decreasing capital investment over the next two years will give them the ability to consider more dividend increases.

Caledonia reported last month that it had entered into an option agreement for Glen Hume and Connemara North, granting the mining company exclusive rights to explore and eventually purchase the mining claims if the exploration is successful and at its absolute discretion. â&#x20AC;&#x201D; @okazungaa This, Mr. Curtis said, is in addition to providing investment funds for new ventures, including opportunities for exploration at Glen Hume and Connemara North in the Midlands province.

Caledonia said increased production, a high gold price and strong cost management have continued to contribute to improved cash generation, which has given the board confidence that until the benefits of Central Shaft are recognized, the company can maintain a higher level of dividend distributions. MR. STEVE CURTIS, CHIEF EXECUTIVE OFFICER OF THE MINING COMPANY, SAID:

â&#x20AC;&#x153;We are pleased to report a further 10 percent rise in our quarterly dividend, reflecting a total 60 percent increase in the dividend since the first increase in October 2019, the fourth increase in the past 15 months. 'The output goals are 61 000 to 67 000 oz of gold in 2021; the production targets are 80 000 oz of gold per annum as of 2022.' The board's decision to raise the dividend represents our continued and growing conwww.skillings.net | 21

GLOBAL

Minerals and metals eye recovery in 2021 A more favorable pricing environment should be seen by miners and metal producers in 2021, as almost all mineral and metal prices (except iron ore) are projected to average higher year-on-year (y-o-y) in 2021, Fitch Solutions forecasts in its latest report.

hile metal prices have recovered impressively over Q2-Q420, following the decline reported at the beginning of the year due to covid-19, Fitch states that prices will continue to fall on average year-on-year basis in 2020. In 2021, Fitch says that the wider and stronger global economic recovery will boost prices as covid-19 vaccines are made available. In some key mining countries, such as Peru and South Africa, access to vaccinations would also help reduce the disruptions to operations seen in 2020.

According to Fitch, mining and metal operations will therefore increase in 2021, after the sector encountered major disruptions in 2020 due to government-imposed lockdown measures and tighter procedures for health and safety. This was especially the case for the copper sector, as the pandemic had a major effect on Peru and Chile, which

22 | SKILLINGS MINING REVIEW February 2021

account for a large share of the mine's output. The resulting pickup in supply is likely to retain something of a price limit.

structure and for electric vehicle batteries (including copper, nickel and aluminium) could be supported in 2021 and beyond.

Fitch, meanwhile, expects a sharp recovery in global mineral and metal demand in 2021. As infrastructure projects continue to make progress, China's metal consumption will remain high, assisted by the Covid-19 stimulus policy.

The outlook for miners and metal producers is optimistic for next year, Fitch maintains, as overall costs, output and consumption of minerals and metals will increase in 2021.

Fitch states that the continuing acceleration of decarbonisation policies and corporate environmental, social and governance (ESG) initiatives, while a slow-burning and longer-term trend in nature, implies that demand for some metals used in renewable energy infra-

and impacted by lower end demand, would see a sharper production recovery. Elevated rates will continue to benefit gold miners. Compared with 2020, Fitch sees mining and metals capital expenditure improving in 2021. Although 2020 forecasts continued to worsen marginally as the pandemic progressed from April to November, the budget outlook for 2021 improved as a result. This move is possibly due to businesses postponing development initiatives from 2020 to 2021 and, in the midst of the pandemic, concentrating on saving cash in the interim.

The decline in input prices expected by Fitch for steel in 2021, due to improved supply (iron ore prices and coking coal), would enable the sector to achieve profitability. Other nations, such as the US, the EU, Japan and India, in the case of steel and aluminium, which have seen their mining and metal operations disrupted

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Offices: Byron, GA Escanaba, MI Muskegon, MI Coleraine, MN Tulsa, OK Chester, PA Oshkosh, WI Green Bay, WI Rhinelander, WI www.skillings.net | 23

GLOBAL

Las Bambas blockades affect Peru copper shipments The Peruvian Ministry of Energy and Mines (Minem) recently expressed its opposition to the blockades on the Southern Runway (Corredor Vial del Sur), which have impeded the transport of copper concentrate and staff to and from the Las Bambas mine by MMG.

agency Andina that the blockaders are being intransigent and thus obstructing the government's mediation efforts to address their needs and restore public order.

The Ministry reported in a communiquĂŠ reprinted by the state-owned news

According to Minem, on December 27, a committee comprising its own staff, as well as officers from the Peruvian

eeks ago, activists launched their protest action in the district of Velille, in the area of Cusco, some 200 kilometers from the mine.

24 | SKILLINGS MINING REVIEW February 2021

National Police and the Cusco Public Order Attorney visited the blockade site, hoping to start a conversation with the protesters about opening the route. They got a negative response, despite the effort. Activists from the district of Velille demand that an agreement signed in September between Las Bambas and the district of Velille-Chumbivilcas be checked, which allows the company to fund sustainable development projects for up to 1.25 million soles ($348,000) over the next two years, as well as make spot payments to families affected by the pandemic of covid-19.

Equatorial Guinea shows progress in gas development and mining exploration

Progress in gas production and mining exploration is being demonstrated by the Ministry of Mines and Hydrocarbons. Released for the MMH by Africa Oil & Power (AfricaOilandPower.com).

rilling proposals, downstream investments in natural gas, cross-border agreements and a full revamp of the mining sector are just a few of the measures launched in recent months by the Ministry of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang Lima team. The Ministry of Mines and Hydrocarbons (MMH) of Equatorial Guinea has drafted a 100-day plan to drive the sector forward and deliver economic growth in order to help the Central African oil producer resolve the challenges of the COVID-19 pandemic and the 2020 downturn in oil prices. The strategy has come to an end now. In the country's overall strategy to establish a natural gas-driven downstream mega-hub at Punta Europa, the two ongoing main projects tend to be on track. According to an MMH assessment survey, the Backfill project designed to feed gas from the Alen field to the hub is 85 percent completed, while the Punta Europa modular refinery is 90 percent completed. A new onshore exploration strategy, as well as preliminary studies to identify targets in its continental basins, have been drafted and concluded by the MMH. It has also reactivated negotiations with Cameroon to jointly develop the Yoyo-Yolanda cross-border gas field. www.skillings.net | 25

GLOBAL

Geological Survey Of India Signs MoU With GTK, Finland In Fields Of Geology & Mineral Resources India Geological Survey, the country's 170-year-old leading geological organization, has signed an MoU with the GTK Geological Survey of Finland, which is a leading European center of competence for geological resource assessment and sustainable use.

he MoU was signed during a virtual conference between Dr. Ranjit Rath, Director General, Geological Survey

of India, and Mr. Mika Nykanen, Director General, GTK Finland, to cooperate on the various aspects of exploration

26 | SKILLINGS MINING REVIEW February 2021

and management of geology and mineral resources.

would be fruitful and mutually beneficial. Scientists from both organizations submitted their studies on different subjects after the signing of the MoU. Dr. Saibal Ghosh addressed the role of GSI as a nodal agency for landslide studies in India from the GSI side. GSI and corresponding Geoscience Research Challenges & Opportunities gave an overview of Mineral Exploration in India by Shri Dattatreya S. Jeere. A presentation on Airborne Geophysical Surveys in India was given by Shri B.K. Sahu and on International Training and Capacity Building by Shri Biswajit Gangopadhyay. A presentation on Geodata Management was delivered by Ms. Niina Ahtonen from GTK. Ms. Bijal Chudasama gave a presentation on Mineral Prospectivity Modelling. The presentation by Mr. Jussi Ahonen was on Controlled Aquifer Recharge and on Mineral Processing, Isotope Geology and Mine Climate and Circular Economy was presented by Mr. Juoko Nieminen.

Proud to be your reliable partner. Speaking on the occasion, Dr. Rath said that both organizations would benefit from this partnership with GTK, especially in the fields of mineral exploration, geoscientific data repository, landslide hazards and their mitigation process. He also pointed out that because of their natural geographical proximity to the North Pole, the Finnish counterparts will assist GSI in their research and research in the discipline of Glaciology through their expertise developed over decades of work in this area. Via an exchange programme in the field of training and capacity building, GTK and GSI will support each other. Mr. Mika Nykanen, Director General of GTK Finland, was pleased to collaborate in its various fields of work with an organisation such as the Geological Survey of India and hoped that this synergy between the two organisations

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AMERICAS

Trump officials are rushing to mine in a desert area which is considered to be holy by native tribes

San Carlos Apache tribal member Wendsler Nosie Sr has been camping in a teepee since January at a campground in the Oak Flat of south-eastern Arizona, a vast high desert oasis dotted with ancient oak groves and soaring rock spires. It is a demonstration in defense of the "holy land" where for centuries the Apache have prayed and conducted ceremonies.

dozen Native American tribes in the south-west have close cultural links to Oak Flat. But, as the Guardian has learned, the Trump administration has embarked on a rapid attempt in its waning days to pass control of the region to a mining corporation linked to the destruction of an Aboriginal site in Australia. We were in the fourth quarter and there were two minutes left in the match. And then Trump lied, but we've just got one minute left now,' said Nosie, who was a

high school football quarterback. "To fight this, everybody has to mobilize now." Last month, tribes found that the completion deadline of a vital environmental assessment phase was abruptly pushed forward to December 2020 by a full year, even as the tribes are dealing with a Covid epidemic that has stifled their ability to respond. The tribes may be powerless to stop the mine if the environmental assessment is done before Trump leaves office.

28 | SKILLINGS MINING REVIEW February 2021

Local leaders said the drive was happening in a meeting with environmental groups because, according to notes from the meeting seen by the Guardian, "we are getting pressure from the highest level at the Department of Agriculture." The US Forest Service, which is in charge of Oak Flat, is overseen by the state. Officials are hurrying through a host of environmentally damaging projects that will favor business interests as the curtain closes on the Trump age. This include opening the national Arctic wildlife refuge

Former San Carlos Apache Chairman Wendsler Nosie Sr. addresses Apache Stronghold on Jan. 10. www. pressnewsagency.org/

www.skillings.net | 29

AMERICAS A view of Oak Flat, which is threatened by a proposed copper mine. Photograph: Russ McSpadden / Center for Biological Diversity

to the exploration of oil and gas and scaling back restrictions on endangered gray wolves. A business named Resolution Copper and its two Anglo-Australian parent companies, the mining conglomerates Rio Tinto and BHP, will be beneficiaries at Oak Flat. RAĂ&#x161;L GRIJALVA, THE DEMOCRATIC ARIZONA DELEGATE, SAID,

"The Trump administration is cutting corners and doing a hasty job just to take care of Rio Tinto." And the fact that Covid is doing it makes it even more disgusting. Trump and Rio Tinto know the reaction of the tribes will be very powerful and public under normal conditions, but right now the tribes are trying to save their people. Since 1995, when what is believed to be one of the world's largest copper reserves was found 7,000 feet below Oak Flat, a war against Resolution Copper has raged against environmental and indigenous groups. Oak Flat includes several indigenous archaeological sites dating back 1,500 years, which are listed on the National Register of Historic Places. If the mine continues as scheduled, 11 square miles, including Apache burial grounds, religious sites, petroglyphs and medicinal plants, will be consumed. Resolution aims to mine 1.4 million tons of copper ore by blasting and dragging it out into tunnels under the surface. A crater measured to

be 1,000 feet deep and almost two miles long will be left behind until all of the ore is sucked out. A 400ft-high escarpment called Apache Leap that is vulnerable to the planned mine is also concerned. Named for Apache warriors who jumped off the cliff in the late 1800s to prevent US army capture, the site has great historical significance for the people of Apache,

Since 1995, when what is believed to be one of the world's largest copper reserves was found 7,000 feet below Oak Flat, a war against Resolution Copper has raged against environmental and indigenous groups. 30 | SKILLINGS MINING REVIEW February 2021

and memorializes tribal defeats when their homeland was invaded by European immigrants. On behalf of the Arizona Mining Reform Alliance, an independent study carried out concluded that there is a 9 percent risk the mine's crater could hit and catastrophically destabilize Apache Leap. While mining at Oak Flat has always been resisted by the San Carlos Apache and other tribes, there are no federal laws granting Native Americans ownership over ancestral lands that are beyond reservation limits. In 2014, when a plan to swap federally owned Oak Flat for private property owned by Resolution Copper was included in a defense spending bill at the last minute, tribes were blindsided. This inclusion was at the request of four members of Congress from Arizona who

a surveillance program where archaeologists train tribal members to help recognize indigenous artifacts that are culturally significant. Yet the recent past of one of the parent companies, Rio Tinto, has given cause for concern. The Forest Service has been undertaking an environmental review of the planned mine and the controversial land swap for the last 6 years. In the hope that the mine could be stopped from going forward or substantially scaled back, several tribes and environmental organizations have expressed their opposition. Last May, in Juukan Gorge, in western Australia, Rio Tinto blasted a 46,000-year-old sacred Aboriginal site. Rio Tinto's CEO and two other top executives resigned in September after widespread public outrage and investor protest over the devastation.

sponsored the mining proposals of Resolution; President Barack Obama signed the bill into law. Resolution Copper has stated that it takes all appropriate care for the environment and has sought input from tribes. "There have been hundreds of consultations with Native American tribes on the Resolution Copper project," project director Andrew Lye wrote in an email. "As with all tribes, Resolution Copper would welcome the chance to build a relationship with the San Carlos Apache tribe for more collaborative dialogue and eventually look for ways to partner for mutual benefit."

Simon Thompson, chairman of Rio Tinto, said in a statement following the resignations, "What happened at Juukan was wrong and we are determined to ensure that the destruction of a heritage site of such exceptional archaeological and cultural significance never happens again at a Rio Tinto operation." The land exchange must occur within 60 days once the final Oak Flat environmental assessment is issued. Ownership of

Oak Flat could be passed to Resolution Copper before the inauguration of Joe Biden on January 20. "We are looking at the destruction of some of the most important cultural and historical sites of the Apache with this project," said Kathryn Leonard, the historic preservation officer of the state of Arizona. She clarified that federal historical preservation laws concentrate on ameliorating harms rather than blocking a construction entirely. To avoid this degree of destruction, our preservation laws are not set up. It's heavily weighing on me.' Grijalva, who chairs the Natural Resources Committee of the House, asked the Forest Service to clarify the explanation for the expedited timetable, but his staff had not obtained any clarification as of late last week. Environmental organizations are in a position to appeal the court's ruling, while Grijalva and Senator Bernie Sanders have tabled a bill asking for the transfer of land to be revoked. If the land swap happens, it'll be hard to roll back," Grijalva said." That's why it's not possible to hurry this. Because of what is at stake, the Forest Service must do its due diligence. The harm is irreparable.

To ensure that the mine's crater does not get too close to the sacred cliff, Resolution has vowed to track seismic activity around Apache Leap. Lye also points to a host of company-funded community outreach projects to assist the San Carlos Apache and other tribes. This include www.skillings.net | 31

EQUIPMENT

Options remain for copper's raging bull fire Copper from the London Metal Exchange (LME) reached a year-to-date peak on Monday of $7,708.50 per tonne, a volume not traded since March 2013. At the present $7,670, the threemonth benchmark contract for the exchange is up by 24 percent at the beginning of the year and by an incredible 75 percent from the March low of $4,371 per tonne. 32 | SKILLINGS MINING REVIEW February 2021

To explain the rally, copper bulls can choose from a wealth of optimistic drivers. With production of metal-intensive white goods operating at red-hot speeds, China's manufacturing recovery from COVID-19 surpassed all expectations. Imports of processed copper from the world are booming. On the collective investment radar, the dollar is down, the yuan is up and the copper-gold ratio is back. Not to mention the surge in demand from the rollout of green recovery plans around the world. Hidden market drivers, as well as more visible ones, still have such a run-away rally. The demand for LME options is one and it has served as an accelerant to an already blazing market as the price rises across short-exposure layers. THE ACCELERANT REALITY

London copper has soared from less than $7,000 to Monday's 7-year highs in the last two weeks. It has broken through several layers of December call option strikes in the process, with more than 240,000 tonnes of combined market open interest. At the $8,000 hit, another 2,620 lots, or 65,500 tonnes, sit just above the current price action. There was a flurry of purchases of these options back in July that conferred the right to purchase at a pre-determined strike price. Copper then rose through the $6,000-per tonne mark and the options in the bull story would have represented a cheap upside punt for early believers. Sellers, on the other hand, possibly did not believe that by December the price would be anywhere near $8,000 per tonne. Granting them may have seemed low risk, particularly if they were the offset, a perennial copper producer hedge, for buying downside put options.

But what is often called "zero-cost" hedging strategies may be anything but if the price rallies through the component of the call option. As this copper rally has reached ever more layers of exposure to options, short options will have to buy futures to offset their price risk, or delta-hedge, as is known in the jargon of the options market. In the underlying market, the faster the rally, the faster and heavier the collective delta-buying, which is the options accelerant effect.

At the $8,000 hit, another 2,620 lots, or 65,500 tonnes, sit just above the current price action. There was a flurry of purchases of these options back in July that conferred the right to purchase at a predetermined strike price. OUT FROM TIME

Time is all in the options game and time is running out for those with exposure to these call options with the LME's December options expiring on Wednesday.

LOOKING FORWARD

December can also be risky for sellers of options because, with correspondingly high open interest, the month is often relatively liquid. In the aluminium and zinc sectors, what is playing out in copper is mirrored, where the speed of recent rallies has also reached crucial upside call option amounts. But the ability for options to continue causing uncertainty in the months ahead should not be overlooked in the case of the copper market. The January call options landscape of the LME already shows strong open market interest in the $8,000 strike (750 lots), the $8,200 strike (500) and the $9,000 strike (900). There are 1,900 lots of open market demand for the $9,000 strike in March, and there are already 50 lots open for the $10,000 strike in December 2021. BULLISH EXUBERANCE HERE?

When the December $8,000s were purchased back in July, there were many who would have felt the same. Options will not tell you in December next year where the demand is going to be. What they can tell you is that there'll be some really unhappy option shorts if copper is anywhere near the $10,000 mark.

A further price increase to $8,000 over the next 24 hours will prompt further purchases. Alternatively, waves of selling from no-longer-needed hedge cover will carry a sharp correction. "to chop, especially with Dec options expiry tomorrow"chop up, especially with Dec options expiring tomorrow. "Chop" may also prove to be an understatement. www.skillings.net | 33

GLOBAL

34 | SKILLINGS MINING REVIEW February 2021

Rio iron ore industry is in a healthy state With the miners signaling that it could capitalize on stratospheric iron ore prices by shipping record volumes of the steel-making commodity this year, Rio Tinto's biggest profit in nine years could be just the beginning.

he largest iron ore miner in Australia is on track to post a full-year underlying profit of nearly US$12 billion next month, but with iron ore prices 76 percent higher than the average price received by Rio over the past year, the record US$15.5 billion profit set in 2011 appears to be vulnerable in the coming year.

with earnings of more than $US29 billion. But Rio warned investors that while record exports of iron ore were possible in the year ahead, an increased focus on indigenous heritage following the Juukan Gorge scandal last year and difficulties with the delivery of new mines within the hard border of Western Australia could hamper export rates.

While demand from other Asian markets was recovering from pandemic lockdowns, Rio said Chinese buying patterns remained strong, creating boom conditions despite trade tensions between Australia and China.

Rio said that between 325 million and 340 million tonnes of iron ore would be shipped in 2021.

Peter O'Connor, Shaw and Partners analyst, said that if iron ore prices stayed at the price of $US174.07 per tonne on Monday night for the rest of this year, Rio would almost double its best ever result

That target range straddles last year's 330.6 million tonnes shipped by Rio from Western Australia, but implies that there is more room for growth than a reduction in production. According to analysts, Rio is expected to ship 336 million tonnes in 2021. Rio has www.skillings.net | 35

GLOBAL

Brockman 4. Last year, Goldman analyst Paul Young speculated that the Juukan Gorge regulatory response could be a watershed moment for the resource industry, leading to weaker growth in future exports. But Rio stressed that throughout its iron ore division, it had a lot of flexibility, which should allow it to cope with any needed modifications to mine plans. In its mining divisions, Rio has placed responsibility for heritage management, saying that product groups such as the WA iron ore division would have primary responsibility for engagement with communities and stakeholders. In the final three months of 2020, Rio shipped 88.9 million tonnes of iron ore from Western Australia, a result that was slightly better than expected. The strong end of the year means that Rio has reached the export target it set at the beginning of 2020. After cyclones hit WA in February 2020, that target was downgraded, but Rio recovered to sneak into the bottom end of its original guidance range. EFFECTS FROM CHINA

never done better than the 338.1 million tonnes shipped in 2018, but the guideline range on Tuesday means that if everything goes to plan, the record could fall.

"The future impact on our Pilbara iron ore operations, mine developments and heritage approach from the reform of the Aboriginal Heritage Act 1972 (WA) remains unknown.''

Import data from China suggests that strong demand from the Asian superpower may have been a bigger factor than Brazilian export weakness in the recent iron ore price strength.

Rio's relationship with the traditional owners of Puutu Kunti Kurrama and Pinikura has been severely tested by the destruction of the Juukan Gorge, and Rio has pledged to implement a permanent moratorium on mining around the gorge as part of efforts to heal the relationship.

China's imports of iron ore rose by 9 per cent to a record 1170 million tonnes in 2020. The additional 101 million tonnes imported by China last year may overshadow Brazil's 2020 decrease in exports of iron ore. When it sold 365.5 million tonnes of iron ore products, Vale achieved record exports in 2018.

RISKS EMPHASIZED

Australian iron ore miners' export targets are always subject to weather, given that the bulk of the nation's production comes from the cyclone-prone Pilbara region of WA. But Rio put a couple of additional qualifiers on its 2021 export target. "Iron ore guidance takes into account the risks associated with tying in approximately 90 million tonnes of replacement mine capacity,'' Rio said in a statement.

IMPACTS OF REGULATIONS

On Tuesday, Rio was not explicit as to what impact a permanent moratorium would have on the nearby iron ore mine

36 | SKILLINGS MINING REVIEW February 2021

In the immediate future, UBS analysts said there was no sign of iron ore prices softening, with steel demand strong,

Chinese steel exports resuming, and the risk of further supply disruption in Brazil following a fire last week at a major iron ore port. Sales and shipment information will be reported by Brazilian miner Vale later this month, but its sales slump is not expected to exceed 100 million tonnes. â&#x20AC;&#x153;In China the industrial sector has recovered and is now at pre-COVID levels due to the rapid deployment of stimulus.â&#x20AC;? â&#x20AC;&#x201D; Rio Tinto statement Rio said Chinese iron ore buying remained robust while demand in other markets such as Japan, Korea and Taiwan was recovering from lockdowns. ''In China the industrial sector has recovered and is now at pre-COVID levels due to the rapid deployment of stimulus,'' Rio said on Tuesday. ''A policy shift to promote domestic investment and consumption is supportive of the commodity demand outlook." While the iron ore price boom is auguring well for Australia, prices are also encouraging miners and steelmakers to look for new iron ore options in other countries, and Rio has confirmed that its Simandou iron ore tenements in the African nation of Guinea have resumed activity.

Rio said Chinese iron ore buying remained robust while demand in other markets such as Japan, Korea and Taiwan was recovering from lockdowns. "Activity at the mine area is starting including roadworks,'' Rio said on Tuesday. Rio said that before June 30, it wanted to complete a review of the infrastructure requirements for the project, including 650 kilometers of new railway. This review will help inform Rio of the negotiations in the Simandou Mountains with neighboring iron ore aspirants. Last year, former Rio chief Jean-Sebastien Jacques pointed out that the high infrastructure costs of getting Simandou's iron ore into the seaborne markets ensured that working together on infrastructure could make sense for the various miners in the region. www.skillings.net | 37

EQUIPMENT

Demand for minerals and metals is expected to increase in 2021 A more favorable pricing environment should be seen by miners and metal producers in 2021, as almost all mineral and metal prices (except iron ore) are projected to average higher yearon-year (y-o-y) in 2021, Fitch Solutions forecasts in its latest report.

In 2021, Fitch says that the wider and stronger global economic recovery will boost prices as covid-19 vaccines are made available. In some key mining countries, such as Peru and South Africa, access to vac-

38 | SKILLINGS MINING REVIEW February 2021

cinations would also help reduce the disruptions to operations seen in 2020. According to Fitch, mining and metal operations will therefore increase in 2021, after the sector encountered major disruptions in 2020 due to gov-

ernment-imposed lockdown measures and tighter procedures for health and safety. This was especially the case for the copper sector, as the pandemic had a major effect on Peru and Chile, which account for a large share of the mine's output. The resulting pickup in supply is likely to retain something of a price limit.

Although 2020 forecasts continued to worsen marginally as the pandemic progressed from April to November, the budget outlook for 2021 improved as a result. This move is possibly due to busi-

nesses postponing development initiatives from 2020 to 2021 and, in the midst of the pandemic, concentrating on saving cash in the interim.

Other nations, such as the US, the EU, Japan and India, in the case of steel and aluminium, which have seen their mining and metal operations disrupted and impacted by lower end demand, would see a sharper production recovery. Fitch states that the continuing acceleration of decarbonisation policies and corporate environmental, social and governance (ESG) initiatives, while a slow-burning and longer-term trend in nature, implies that demand for some metals used in renewable energy infrastructure and for electric vehicle batteries (including copper, nickel and aluminium) could be supported in 2021 and beyond. The outlook for miners and metal producers is optimistic for next year, Fitch maintains, as overall costs, output and consumption of minerals and metals will increase in 2021. The decline in input prices expected by Fitch for steel in 2021, due to improved supply (iron ore prices and coking coal), would enable the sector to achieve profitability. Elevated rates will continue to benefit gold miners. Compared with 2020, Fitch sees mining and metals capital expenditure improving in 2021. www.skillings.net | 39

GLOBAL

Mothballed NT iron ore mines reopen mid soaring demand for steel in China As Chinese demand for steel soars and prices sit at a seven-year peak, Northern Territory iron ore miners are making a comeback. In the past few months, two mothballed mines have restarted operations and are projected to be in full supply in 2021.

Iron ore is one commodity that one market analyst says will likely stay unaffected in the on-going China-Australia trade dispute. (Supplied: Nathan River Resources)

40 | SKILLINGS MINING REVIEW February 2021

s trade tensions between Beijing and Canberra increase, the revival of the NT's iron ore sector comes as Chinese demand pushes prices above $US135 a tonne. "We need to be very careful, and I think there's reason to be concerned, but the fundamental reality is that China's reliance on imported iron ore is very high and rising," said Philip Kirchlechner, an iron ore market analyst. REOPENING MINES MOTHBALLED

The Roper Bar mine, located approximately 600 kilometers southeast of Darwin, and the Frances Creek mine, located 200 kilometers south of Darwin, both shut down after the price of iron ore plummeted below US$90 a ton in 2014. In 2017, Nathan River Resources, a private company subsidiary of the British Marine Group, bought the Roper Bar mine and has restarted mining in the last six weeks. Stefan Murphy, CEO of Nathan River Resources, said the mine would boost production by up to 1.5-2 million tonnes per year, and operations would create 250 jobs. "We're tracking, at the moment, at around 70-80 per cent NT employment and 20 per cent Indigenous employment," he said. Last month, the company's maiden export to China left its load-out facility at the port of Bing Bong on the Gulf of Carpentaria and is currently planning a second shipment. In the next three years, the initial aim is to mine 6 million tonnes while seeking new reserves and downstream processing opportunities that can push the life of the mine to 20 years.

The company recently entered into an agreement with Anglo American, the multinational mining giant, to sell iron ore from the Frances Creek mine to foreign customers. After the stockpiled ore has been sold, NT Bullion plans to resume mining at Frances Creek early next year. RELIANCE ON AUSSIE IRON ORE BY CHINA

The restart of these mines comes at a delicate time when the relationship between Australia and China, the world's largest purchaser of iron ore, is apparently souring. Commodities were the victims of trade wars, such as barley, wine, and poultry. Mr Kirchlechner, the director of Iron Ore Research and a member of the Australia China Business Council, said, however, that the trade in iron ore would most likely be unaffected because China was increasingly dependent on imported iron ore. "For the calendar year we're looking at another year of record [Chinese] steel production exceeding 1 billion tonnes, and that is why the iron ore price has continued to strengthen," he said. According to Mr. Kirchlechner, Xi Jinping has ordered a "inward turn" and an emphasis on China's domestic economy to soften the blow of the US trade war and, more recently, the Covid-19 pandemic. Mr. Kirchlechner said that the policy had sparked new investment in construction and infrastructure and that Australia, the largest producer of iron ore in the world, wanted to meet the new demand.

A $250 million investment in infrastructure and properties, Mr Murphy said, meant that the mine could withstand potential price fluctuations. We have approached the project because we want to be able to supply US$60 a tonne to China,"We've approached the project in that we want to be able to deliver into China for $US60 a tonne,"

"China now has to import 70 per cent of its iron ore requirement, so China is now not only the biggest user of iron ore in the world but the biggest importer of iron ore in the world," he said. "It is because of Australia's production that China enjoys a very low-cost platform for its urbanisation policies, which is absolutely necessary for developing its own economy, so without Australian iron ore, China would have a big problem."

The Frances Creek mine is now operated by Darwin-based NT Bullion and is making its first export shipment of stockpiled ore left by Territory Iron, previously owned, by the end of the year.

Mr Murphy is hopeful that an alternative demand can be sought for the iron ore at the Roper Bar mine if iron ore is dragged into the fray of trade tensions. www.skillings.net | 41

EQUIPMENT

American and Norway investors exert pressure on SBI due a loan to Australia's Adani Mine India's largest bank's shareholders are raising questions about a planned loan to Adani Enterprises Ltd. to help finance the opening of the controversial Carmichael coal mine in northern Australia. 42 | SKILLINGS MINING REVIEW February 2021

Carmichael Coal Mine, Queensland Photo: Cameron Laird

ew York-based BlackRock Inc. and Norway's Storebrand ASA officials have approached the Indian government's State Bank of India, which is majority-owned, about the loan. According to Indian media reports, the loan's value is estimated to be as high as 50 billion rupees ($678 million). Since it was proposed in 2010, the Carmichael mine has been the subject of environmental demonstrators, most

recently protesting at a Nov. 27 cricket match between Australia and India in Sydney. Last month, Adani changed its trade name to Bravus Mining and Resources in Australia, likely to help dampen the dispute over the mine situated in the Galilee Basin in the province of northeastern Queensland. The project has become a subject of outrage from the country's climate change advocates, who this year have seen record temperatures and

widespread wildfires. "It is clearly not part of a sustainable future to finance new coal plants," Andreas BjĂ¸rbak AlnĂŚs, Senior Sustainable Investment Advisor at Storebrand, said in an emailed statement. BlackRock, which owns both Adani and SBI shares, has met with the companies linked to the Carmichael project and raised its objections because, according to a person familiar with the matter, the venture has ESG-related risks, who declined to be named because the www.skillings.net | 43

EQUIPMENT

conversations are private. In February, when it signed an 18 million euro ($21.8 million) contract to provide rail-signalling systems for the mine, BlackRock rebuked Siemens AG for similar reasons. An SBI official who refused to be named challenged the bank's criticism, given that the mine's license was officially approved last year by the government of Queensland. The press office of the bank did not respond immediately to a request for comment on the loan. "The State Bank of India can surely see that the time to build massive new thermal coal mines has passed for economic and climate reasons," said Pablo Brait, a campaigner for the Market Forces activist organization. "India is already struggling with the disastrous impacts of climate change, like Australia, and Adani's mega-mine is going to make climate change worse."

According to stock-exchange filings in India, officials from BNP Paribas Asset Management met their SBI counterparts on Tuesday. A BNP Paribas spokesperson refused to reveal the specifics of the meeting. Amundi Asset Management has said that if the Adani loan goes ahead, it will sell SBI's green bonds. As recently as June, it kept around $21 million of bonds in its Amundi Planet Emerging Green One portfolio. After around a decade of challenges from environmental groups, the Queensland government approved a scaled-back proposal for the mine in June 2019. In 2014, SBI initially proposed a memorandum of understanding for a loan to Adani and then backed off as the project became more contentious politically.

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STATISTICS United States Exports to World of All Steel Mill Products in Thousands of Metric Tons

NOVEMBER 2020 CRUDE STEEL PRODUCTION

orld crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 158.3 million tonnes (Mt) in November 2020, a 6.6% increase compared to November 2019. Due to the ongoing difficulties presented by the COVID-19 pandemic, many of this month’s figures are estimates that may be revised with next month’s production update. In Asia, China produced 87.7 Mt of crude steel in November 2020, an increase of 8.0% compared to November 2019. India produced 9.2 Mt of crude steel in November 2020, up 3.5% on November 2019. Japan produced 7.3 Mt of crude steel in November 2020, down 5.9% on November 2019. South Korea’s crude steel production for November 2020 was 5.8 Mt, down by 2.4% on November 2019. In the European Union, Germany produced 3.4 Mt of crude steel in November 2020, up 14.8% on November 2019. Italy produced 2.0 Mt of crude steel in November 2020, up 3.2% on November 2019. France produced 1.1 Mt of crude steel in November 2020, up 3.7% on November

2019. In North America, the United States produced 6.1 Mt of crude steel in November 2020, a decrease of 13.7% compared to November 2019. In the C.I.S., production is estimated to be 8.2 Mt in November 2020, up 7.0% on November 2019. Ukraine produced

1.7 Mt of crude steel in November 2020, up 30.8% on November 2019. In other Europe, Turkey’s crude steel production for November 2020 was 3.2 Mt, up by 11.6% on November 2019. In South America, Brazil produced 3.0 Mt of crude steel in November 2020, up 11.2% on November 2019.

GLOBAL CRUDE STEEL OUTPUT DECREASES BY 0.9% IN 2020

lobal crude steel production reached 1,864.0 million tonnes (Mt) for the year 2020, down by 0.9% compared to 2019. Asia produced 1,374.9 Mt of of crude steel in 2020, an increase of 1.5% compared to 2019. China’s crude steel production in 2020 reached 1,053.0 Mt, up by 5.2% on 2019. China’s share of global crude steel production increased from 53.3% in 2019 to 56.5% in 2020. India’s crude steel production for 2020 was 99.6 Mt, down by 10.6% on 2019. Japan produced 83.2 Mt in 2020, down 16.2% on 2019. South Korea produced 67.1 Mt, down 6.0% on 2019. The EU produced 138.8 Mt of crude steel in 2020, a decrease of 11.8% compared to 2019. Germany produced 35.7 Mt of crude steel in 2020, down 10.0% on 2019. In the CIS, production was 102.0 Mt in 2020, up by 1.5% on 2019. 46 | SKILLINGS MINING REVIEW February 2021

Russia is estimated to have produced 73.4 Mt in 2020, up 2.6% on 2019. Ukraine produced 20.6 Mt in 2020, down 1.1% on 2019. Crude steel production in North America was 101.1 Mt in 2020, down 15.5% on 2019. The United States produced 72.7 Mt in 2020, down 17.2% on 2019. The Middle East produced 45.4 Mt of crude steel in 2020, an increase of 2.5% on 2019. Iran is estimated to have produced 29.0 Mt in 2020, up 13.4% on 2019. Annual crude steel production for South America was 38.2 Mt in 2020, a decrease of 8.4% on 2019. Brazil produced 31.0 Mt in 2020, down by 4.9% compared to 2019. Turkey’s crude steel production for 2020 was 35.8 Mt, up by 6.0% on 2019. Africa produced 17.2 Mt of crude steel in 2020, the same as the 2019 production figure. Oceania produced 6.1 Mt of crude steel in 2020, down 1.4% on 2019.

CRUDE STEEL PRODUCTION NOVEMBER 2020. Source â&#x20AC;&#x201C; World Steel Association COUNTRY

NOV 2020

NOV 2019

%CHANGE OCT20/19

2020

% CHANGE

COUNTRY

NOV 2020

NOV 2019

%CHANGE OCT20/19

2020

% CHANGE

Austria

550 e

562

-2.1

6 023

-12.7

Mexico

1 450 e

1 426

1.7

15 220

-10.6

Belgium

530 e

628

-15.6

5 955

-17.9

United States

6 120

7 088

-13.7

66 073

-17.9

Bulgaria

40 e

-5.4

443

-15.3

Croatia

0 e

North America

8 497

9 527

-10.8

91 581

-16.7

391

358

9.3

3 263

-24.4

2 954

2 657

11.2

28 085

-6.7

100 e

113

-11.2

1 051

2.6

0 -100.0

Argentina

Czech Republic

413

348

18.8

4 054

-3.3

Finland

336

258

30.4

3 162

-3.8

France

1 149

1 109

3.7

10 441

-22.8

Chile

Germany

3 376

2 941

14.8

32 521

-11.6

Colombia

95 e

10.8

1 007

-18.5

Brazil

Greece

115 e

115

0.0

1 252

-0.3

Ecuador

40 e

-21.3

418

-25.0

Hungary

111

163

-32.1

1 421

-11.5

Paraguay

2 e

-44.0

-25.6

2 049

1 986

3.2

18 702

-14.2

Peru

70 e

103

-31.8

528

-53.7

Uruguay

5 e

-27.5

-27.6

Venezuela

2 e

322.8

-47.7

3 659

3 377

8.3

34 437

-10.6

Egypt

672

604

11.2

7 235

8.3

Libya

6.7

422

-22.4

431

-24.4

3 584

-38.8

Italy Luxembourg

175 e

178

-1.9

1 770

-12.5

Netherlands

554

545

1.7

5 514

-10.1

Poland

670 e

644

4.1

7 209

-13.3

Slovenia

50 e

-1.1

519

-11.8

1 019

11.2

10 043

-21.7

Spain

1 133

Sweden

400 e

309

29.5

3 978

-8.4

United Kingdom

702

542

29.6

6 481

-2.8

Other E.U. (28) (e)

455 e

699

-34.9

5671

-32.9

5.5 125 159

-14.6

European Union (28) 12 809

12 137

Bosnia-Herzegovina

40 e

-41.5

465

-36.3

Macedonia

25 e

20.4

175

-18.4

Norway

65 e

23.6

592

2.0

Serbia

121

154

-21.2

1 337

-24.5

Turkey

3 220

2 886

11.6

32 360

4.9

Other Europe

3 471

3 181

9.1

34 930

2.3

Byelorussia

215 e

174

23.5

2 323

-3.0

Kazakhstan

330 e

363

-9.2

3 425

-8.9

40 e

-2.4

401

12.4

Russia

5 855 e

5 746

1.9

65 182

-0.6

Ukraine

1 733

1 325

30.8

18 710

-3.0

34.6

846

45.4

7 701

7.0

90 887

-1.2

885 e

954

-7.2

9 858

-16.5

15 e

-34.5

155

-25.5

El Salvador

7 e

-26.7

-26.1

Guatemala

20 e

-26.1

205

-26.6

Moldova

Uzbekistan C.I.S. (6) Canada Cuba

70 e 8 243

South America

South Africa

326 e

Africa

1 068

1 101

-3.0

11 241

-14.1

Iran

2 575 e

2 256

14.1

26 369

12.8

174

-53.7

1 133

-52.2

Saudi Arabia

720

641

12.3

6 884

-8.5

United Arab Emirates

239

289

-17.1

2 442

-19.4

3 615

3 360

7.6

36 829

1.4

China

87 660

81 191

8.0 961 158

5.5

India

9 245

8 933

3.5

89 393

-12.3

Japan

7 264

7 716

-5.9

75 669

-17.3

South Korea

5 760

5 904

-2.4

60 800

-7.2

370 e

260

42.3

3 352

10.2

1 565 e

1 650

-5.2

18 749

-7.5

445 e

333

33.5

4 059

4.4

4 098

1 537

166.7

26 609

43.6

116 407

107526

450

Qatar

Middle East

Pakistan Taiwan, China Thailand Vietnam Asia Australia New Zealand Oceania

8.3 1 239 789

2.0

448

0.3

5 017

-0.5

-28.7

526

-13.7

492

508

-3.1

5 544

-1.9

Total 64 countries (1) 158 261

148 417

6.6 1670396

-1.3

(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

Skillings Mining Review February 2021

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