Total transaction value as of Sept. 30 was $4.76 billion, down more than 50% compared to the $10.52 billion registered in the full year 2023, according to S&P’s latest report.

Steel producer H2GS AB’s (H2 Green Steel) $4.14 billion funding round in January led all private equity and venture capital deals in the metals and mining sector during that period.

The number of announced deals in the first three quarters totalled 59, on the year on track for the fewest deals in five years.

In the third quarter alone, total deal value plunged 80% year over year to $240 million from $1.22 billion, and the deal count dwindled to 15 from 37.

Antti Gronlund, managing director of UK-based private equity Appian Capital Advisory, said higher acquisition debt financing rates and reduced venture capital deployments have contributed to lower totals.

Transactions in 2023 may have benefited from large deals and non-sector-focused investors attracted by upbeat headlines focused on electric vehicles, which require significant amounts of critical minerals. Those headlines are now more subdued, affecting deal appetite, Gronlund explained.

Private equity investing is challenging because the sector is “working capital intensive,” added Kyle Mumford, partner at KPS Capital Partners LP.

“There are no small capital requests in a metals business. There’s only really big ones,” Mumford continued. “Unlike other businesses, in metals and mining, change in profitability and manufacturing to meet the demand that may be out there takes a long time and is really hard. It can mean a new equipment or a new mill or a new recycling capacity.

“Those are expensive and don’t often meet typical private equity return profiles.”

Still, opportunity exists for further investment in the coming years. Appian’s Gronlund noted that the mining industry is expected to require about $2.1 trillion by 2050 to support global net-zero goals, citing BloombergNEF estimates.

“A significant portion of that will need to come from private capital sources,” he added.

The study, published just a day after the United Nations warned the world is falling “miles short” of what’s needed to curb devastating global warming, indicates that an investment of $78 trillion will be needed to change this course and achieve net-zero emissions by 2050.

Under the 2015 Paris Agreement, nations committed to limiting global warming to “well below” two degrees Celsius above the average temperatures recorded between 1850 and 1900, aiming for a target of 1.5 degrees Celsius if feasible. Efforts to date have not succeeded in meeting this challenge, the annual “Energy Transition Outlook” from Wood Mackenzie shows.

Unlike the UN pessimistic outlook, the Scottish consultancy believes that while major obstacles hinder short-term targets, particularly for 2030, a 2050 net-zero goal remains feasible. Immediate and coordinated global action would be necessary, WoodMac warns.

Threats to climate progress

A series of global crises, including the Russia-Ukraine conflict, escalating Middle East violence, rising populism in Europe and global trade tensions with China, are undermining the pace of the energy transition, Wood Mackenzie’s vice president head of scenarios and technologies, Prakash Sharma, said. 

He explains that without urgent policy changes and enhanced investment, a warming trajectory of 2.5˚C to 3˚C could become inevitable.

“We are under no illusion as to how challenging the net zero transition will be, given the fact that fossil fuels are widely available, cost-competitive and deeply embedded in today’s complex energy system,” Sharma added. “A price on carbon maybe the most effective way to drive emissions reduction but it’s hard to see it coming together in a polarized environment.”

Key investment are needed across several critical areas, according to WoodMac. As renewable energy sources grow, substantial upgrades to power supply and grid infrastructure are essential to meet the growing demand. Additionally, the need for critical minerals, such as lithium, nickel and cobalt, is projected to increase five- to ten-fold by 2050, as demand for batteries and other technologies essential for the energy transition continues to grow. 

WoodMac sees the need to back the development of emerging technologies, including carbon capture, low-carbon hydrogen, and nuclear power, are vital for facilitating the shift towards cleaner energy sources.

Securing this funding won’t be easy, the consultants noted. “Doubling annual investments to $3.5 trillion by 2050 will be necessary in our net zero scenario,” Sharma said, adding that it will require unprecedented policy coordination globally.

The role of electrification

The electrification of energy systems will play a pivotal role in decarbonization. Transitioning from fossil fuels to electric power, Wood Mackenzie forecasts that electricity’s share of global energy demand will increase from 23% to 35% by 2050 in a base case, and could reach as high as 55% in a net-zero scenario.

Wood Mackenzie’s analysis reveals that global energy demand is set to rise by 14% by 2050. Emerging economies are projected to see even steeper growth at 45%, driven by rising populations and economic advancement. 

In parallel, data centres, electric vehicles, and AI are emerging as new drivers of electricity consumption, with AI-related energy use alone expected to increase from 500 TWh in 2023 to up to 4,500 TWh by 2050.

Including renewable energy source to meet electrifications demand could help reduce emissions, the report says.

According to Wood Mackenzie, solar and wind currently account for 17% of the global power supply, and renewables capacity is expected to double by 2030 in its base case. Yet, this increase still falls short of the COP28 commitment made in 2023 to triple renewables by 2030.

Transition or coexistence?

While nuclear energy holds promise for providing consistent, zero-carbon electricity, its high cost and frequent project delays pose significant challenges. WoodMac says that nuclear power could play a more significant role as it has attracted interest, particularly from tech companies looking to power data centres sustainably.

While fossil fuels is expected to plateau in the 2040s before beginning a gradual decline, Wood Mackenzie predicts that the high capital costs of low-carbon technologies coupled with strong demand for energy, will require the continued use of oil and gas in the near term.

Wood Mackenzie says to meet climate targets there will be necessary that nations gathered at the COP29 meeting in Azerbaijan next month finalize Article 6 of the Paris Agreement. This section focuses on carbon markets and aims to establish a new climate finance goal to replace the previous annual target of $100 billion, which experts consider insufficient.

The consultancy’s report echoes concerns included in a UN Environment Programme (UNEP) study released last week. The document says the next decade is crucial in the battle against climate change, adding that failing to act now will jeopardize any chance of limiting global warming to 1.5 degrees Celsius. According to the UN body, the current rate of climate action could lead to a catastrophic increase of 3.1 degrees Celsius this century. 

“Either leaders bridge the emissions gap, or we plunge headlong into climate disaster, with the poorest and most vulnerable suffering the most,” Secretary General Antonio Guterres warned.

Even if all existing commitments to reduce emissions are fulfilled, global temperatures would still rise by 2.6 degrees Celsius above pre-industrial levels, experts agree.

• Stockpiling. The Trump Administration supported and the Harris campaign supports increased mineral stockpiling. According to the Department of Defense, the National Defense Stockpile (NDS), as of March 2023, only had inventories to cover 6 percent of the US military’s and essential civilian demand’s estimated material shortfalls in a hypothetical one-year conflict with China, followed by a three-year recovery. The president could tap the NDS Transaction Fund for mineral stockpiling, as well as the Defense Production Act (DPA) fund. The Eisenhower Administration used DPA funds for mineral stockpiling during the Cold War, and the president still has this authority (50 USC §4533). Importantly, the next administration’s Department of Defense should prioritize stockpiling minerals extracted and processed in the United States.

• Subsidies. The Trump Administration supported and the Harris campaign supports subsidies for critical mineral projects. The Trump Administration deemed critical mineral processing projects eligible for direct loans under the Advanced Technology Vehicle Manufacturing (ATVM) program, and the Biden-Harris Administration has loaned to such projects. The next administration’s Department of Energy could also deem mining projects eligible under the ATVM program by issuing a draft rule that adds “mining” to 10 CFR 611.2 “Eligible Project” (3). To specifically lower costs for US mineral processing facilities, the next administration’s Internal Revenue Service could propose new regulations extending the production costs covered by the Section 45X 10-percent production tax credit to feedstock acquisition, as has been urged by several organizations and mining companies.

• Procurement. Both the Trump and Biden-Harris administrations support increased domestic content requirements for government procurement. Under the authority of Executive Order 14005, the next administration’s Federal Acquisition Regulatory Council could issue a draft rule that adds a new part to the Federal Acquisition Regulations, requiring that acquisitions of specified clean energy technologies contain a certain threshold percentage of minerals extracted in the United States. For example, the draft rule could ultimately require that the General Services Administration—the federal government’s main source for procuring non-tactical vehicles—only acquire electric vehicles with batteries containing a high percentage of chemicals derived from US-extracted minerals. The next administration’s US Postal Service could adopt a similar content requirement in its Supplying Principles and Practices for electric vehicle acquisitions.

• Tariffs. Trump has pledged significant tariff increases, while the Biden-Harris Administration increased tariffs on several minerals imported from China. Domestic mineral projects like South32’s Hermosa manganese-zinc project support such trade protections to reduce US reliance on foreign minerals. The next president could (likely) impose tariffs on any mineral imports immediately under the International Emergency Economic Powers Act (IEEPA). The only prerequisite is a national emergency declaration, like the now-expired critical minerals executive order. If concerned about the legality of levying tariffs under IEEPA, the president could also direct the secretary of commerce to open a Section 232 investigation into mineral imports, although the tariff imposition would likely take several months to occur.

• Permitting. Both Trump and Harris support expedited permitting for building major projects. Previously, most US mining projects required Clean Water Act section 404 permits—which trigger the National Environmental Policy Act—but the Supreme Court’s decision in Sackett v. Environmental Protection Agency (2023) circumscribed the areas requiring these permits, possibly lowering the permitting requirements for many mine projects. Determining whether a project requires a section 404 permit, however, can take up to one year based on the district. To expedite this process, the next administration’s US Army Corps of Engineers could issue a regulatory guidance letter directing district engineers to prioritize the review of approved jurisdictional determinations for sites of potential mining projects.

In short, the next president’s administration has significant unilateral authority to support US mining of critical minerals. First, it could increase mineral stockpiling by tapping both the NDS Transaction Fund and DPA fund for mineral acquisitions.

The next administration could also expand existing subsidies—like the ATVM direct loan program—to mining projects. For government acquisitions of clean energy technologies, it could set content requirements for US-extracted minerals.

The next administration could, additionally, impose tariffs on mineral imports of their choosing by issuing a national emergency declaration concerning mineral imports under IEEPA.

Lastly, it could expedite permitting by prioritizing jurisdictional determinations for sites of potential mining projects. On January 20, 2025, the next US president could—and should—take these actions to bolster US mining of critical minerals.

** Gregory Wischer is the founder of Dei Gratia Minerals, a critical minerals consulting firm.

Explorers and developers often overstate the certainty of mineral resource classifications based on inadequate data, Desharnais said at an event in Vancouver on Wednesday. The practice has in some instances led to unexpected analyst downgrades, soaring costs and debt, and the derailment of promising assets.

“That classification debt, unfortunately, needs to get paid,” he told about 430 conference participants from 21 countries at CIM’s first Mineral Resources & Mineral Reserves conference. “The CEO may be walking around with a 3-million-oz. resource estimate, but they haven’t earned that classification with sufficient drilling. When the debt comes due, it’s often through painful reclassifications and revisions.”

Decade of missteps

Several recent projects have demonstrated the high cost of classification debt.

Rubicon Resources’ catastrophic 91% downgrade in resource estimates in 2015 stands as one of the most glaring examples. After it began initial production at the F2 gold deposit on its Phoenix property in Ontario’s Red Lake district, the company found the deposit to be uneconomic, shuttering the operation. It had not completed a feasibility study for the high-grade project.

The size of the downgrade blindsided investors and stakeholders, and the company had to undergo a painful restructuring to survive. Rebranded as Battle North Gold, Evolution Mining (ASX: EVN) bought it and its renamed Bateman project in 2021 for $343 million.

In 2018, Pretium Resources promoted the Brucejack gold project in northwestern British Columbia’s Golden Triangle, now owned by Newmont (NYSE: NEM, TSX: NGT, ASX: NEM, PNGX: NEM), as a high-grade gold deposit. Yet, the asset disappointed when gold production grades fell far below expectations.

The nuggety nature of the gold, with Brucejack’s steeply dipping quartz veins and erratic grade distribution, made it difficult to consistently meet production targets, forcing the company to push tonnage through the mill to compensate for lower-than-expected grades.

Aurora (2018), Rainy River (2019), and Gold Bar (2020) show how resource overestimation hurt Guyana Goldfields, New Gold (TSX: NGD; NYSE: NGD) and McEwen Mining (TSX: MUX; NYSE: MUX). They had to downgrade estimates mid-operation. This triggered mine plan revisions, soaring costs, production delays, and financial strain.

Grade versus geometric risk

Desharnais identifies two types of risk that contribute to resource misclassification: grade risk and geometric risk.

Grade risk reflects patchiness in ore quality, while geometric risk involves uncertainty about the size and shape of mineralized domains within the deposit.

Conditional simulations help assess grade risk, Desharnais said, but tools to quantify geometric risk are lacking.

Companies often overestimate deposit geometry without tighter drilling, leading to costly misjudgments.

“Sparse drilling gives us a simpler picture than reality,” he explained, adding that only closely spaced drilling can reveal the true complexity of orebodies.

Best practices

Mathieu Doucette, a senior geologist at ArcelorMittal (NYSE: MT), talked about the difficulty of classifying resources at Canada’s largest iron mine, the Mont-Wright iron ore mine in Quebec, producing continuously since 1974. Outdated data can affect current resource estimates. He illustrated how mixing in fresh drill holes helps manage geological risk as part of a dynamic model essential to avoid misclassification.

“The first thing [a QP] will do is akin to lighting a torch,” he said. “But everything on the edges is dark, and you can’t really see it. Drill holes are our ability to try and get some information, but sparse data hides the full picture.”

David Machuca-Mory, a principal consultant at SRK Consulting, said fixed models are risky. Deposits can be more unpredictable than they seem. Adaptive methods help ensure estimates reflect reality, reducing the chance of costly surprises.

“Even with dense drilling, some areas remain highly uncertain,” Machuca-Mory said. “Confidence intervals are large, and relying solely on drill spacing doesn’t always guarantee accurate classification.”

Cognitive biases

Desharnais said that misclassification is not just a technical problem; human psychology plays a significant role.

Anchoring bias makes companies stick with initial estimates despite new data. Authority bias pressures geologists and consultants to confirm favourable results to please management or investors.

“The consulting firm wants the next contract,” Desharnais said. “The CEO has family and friends invested and needs good news. These biases create a system where classification debt builds up across projects, only to be paid through painful revisions later.”

Owning up

Desharnais argued for more conservative resource models and said benchmarking against operating mines would help set realistic expectations. He suggested that technical reports include histograms that show the distance between drill holes and classified resources, he added.

“It forces the QP or CP to look at what they’ve done and ask: Does this make sense?” he said. “Transparent reporting would help prevent overly aggressive classifications, ensuring companies earn their resource classifications with sufficient data.”

Such measures may slow development, but they could also reduce the prevalence of misclassified resources in the industry. Desharnais urged geologists to scrutinize each block of material above the cut-off grade.

“Over-promising today only delays the inevitable correction tomorrow,” he said.

Publications cited by the WGC have previously concluded that bullion’s primary function is as a store of value, and so its long-run movement should align with the general price level (CPI). However, these studies, as the Council points out, have “mischaracterized gold”, which led to biased conclusions.

The two flawed assumptions that stood out to WGC analysts were: 1) the tendency to use data from the Gold Standard period to analyze gold’s performance, and 2) viewing long-term price dynamics exclusively through the lens of demand from financial markets and ignoring other sources of demand.

Based on such assumptions, many of the studies have landed on an expected long-run real return ranging between 0% and 1%. Alternative approaches using risk premia estimations or bond-like structures with embedded options also produced similar results.

But, as the WGC analysis illustrates (see graph), gold’s long-run return has been well above inflation for over 50 years, more closely mirroring global gross domestic product (GDP).

According to the WGC, the existing frameworks for estimating gold’s long-term returns lack a robust approach that aligns with the capital market assumptions for other asset classes. Specifically, they fail to consider an economic component on top of the financial component that previous models focused on.

Instead, the Council introduces a new model — Gold Long-Term Expected Returns, (GLTER) — that combines an economic component, proxied by global nominal GDP, and a financial component, proxied by the capitalisation of global stock and bond markets, and assesses the influence of each of these variables using regression analysis.

Analysis of regression results for two specifications, one of gold and GDP only, and one of gold and both components, reveals that gold’s long-term expected returns are explained by three parts global nominal GDP growth less one-part global portfolio growth — meaning GDP is the primary driver of the gold price in the long run.

The results show that the estimated average gold return over the 2025-2040 period will exceed 5% per year, which is well above that produced by most other models. Specifically, the estimate exceeds common long-term return assumptions such as a zero real return (2.4% nominal in line with expected CPI inflation) over the next 15 years, or a gold return equivalent to the risk-free rate (2.9% for short-term US Treasury bills).

While this return is lower than the historical return observed from 1971 to 2023, this is largely down to a lower expected growth in global GDP, the WGC says, adding that the impact is likely to be similar for the expected returns of all assets.

“In our view, any model that fails to account for economic growth alongside financial factors will prove insufficient in establishing gold’s long-term expected return,” WGC authors noted.

Compared to the Council’s other pricing models, GRAM and Qaurum, the GLTER places greater emphasis on economic expansion, which it finds to be the primary driver of gold in the long run.

This model also helps to explain why gold’s long-term return has been, and will likely remain, well above inflation, the WGC says.

Rio Tinto (ASX, LON, NYSE: RIO) will acquire Arcadium Lithium (ASX: LTM)(NYSE: ALTM), in an all-cash transaction, valuing the latter at $6.7 billion, the Anglo-Australian giant confirmed on Wednesday.  

The second largest miner is paying the United States-based lithium producer $5.85 per share, it said. The deal represents a premium of 90% to Arcadium’s closing price of $3.08 per share on October 4. 

The move would position Rio Tinto as one of the world’s largest lithium miners, behind only US-based Albemarle (NYSE: ALB) and Chile’s SQM (NYSE: SQM).

The acquisition would hand Rio lithium mines in Argentina and Australia, as well as processing facilities in the US, China, Japan and the UK. Its customer base would include major names, such as Tesla, BMW and General Motors.

Arcadium was created in January from the merger of Philadelphia-based Livent and Australia’s Allkem. Its shares have fallen since, dragged by declining lithium prices, which in turn is a result of weaker demand from electric vehicle (EV) makers and Chinese oversupply.

Ahead of the confirmation of the deal BMO Capital Markets analyst, Joel Jackson, noted a potential takeover has been part of market rumours for years. “Many investors believe that Arcadium (i.e., the Allkem/Livent merger) was completed to shake out interest from suitors like Rio,” he wrote.

The transaction value is ahead of market expectations which was pegged in the $4 billion to $6 billion range. “In our view, this [range] would value Arcadium more like a mining company than a specialty chemicals firm, assuming a mid-cycle price range of $18,000–$19,000 per tonne of lithium carbonate equivalent (LCE), average selling price (ASP),” noted Jackson

Before the official announcement industry participants were supportive of the deal. Vulcan Energy’s (ASX: VUL) founder and executive chair, Francis Wedin, said the company views the development as a favourable one for the broader lithium market, particularly because it shines a spotlight on Adsorption-type DLE (A-DLE) production, used by Arcadium since 1996 next door to Rio’s own A-DLE project in Rincon. 

“The fact that Rio is joining Exxon and Equinor by focusing on A-DLE is a further indication of how the third wave of lithium’s growth is developing,” he said in an emailed statement. 

Battery ambitions

Over the past six years, Rio has been expanding its footprint in the battery market. In 2018, it reportedly attempted to buy a $5bn stake in Chile’s SQM, the world’s second largest lithium producer. 

In April 2021, the world’s second largest miner kicked off lithium production from waste rock at a demonstration plant located at a borates mine it controls in California. 

Rio took another key step into the lithium market in 2022, completing the acquisition of the Rincon lithium project in Argentina, which has reserves of almost two million tonnes of contained lithium carbonate equivalent, sufficient for a 40-year mine life. 

The company plans to develop a battery-grade lithium carbonate plant at Rincon with an annual capacity of 3,000 tonnes and has earmarked $350 million to invest in the project, with first production expected later this year.

It is also trying to revive one of its biggest lithium projects, the proposed $2.4 billion Jadar mine in Serbia. Rio had its mining licence revoked in 2022, following widespread protests against the proposed mine on environmental concerns.

The mining giant won a small, but key battle in July, as Serbia reinstated Rio Tinto’s licence to develop it, but the company will have to secure approvals to move towards production at the site. On Monday, however, the country’s parliament began debating a proposal to ban lithium and borate mining and exploration. If passed into a law, this would effectively put an end to the contested Jadar project.

With projected production of 58,000 tonnes of refined battery-grade lithium carbonate per year, Jadar would be Europe’s biggest lithium mine.

The operation could supply enough lithium to power one million electric vehicles and meet 90% of Europe’s current lithium needs.

RELATED: Timeline: Owners of Arcadium’s lithium assets through the years

In August, global central banks bought only 8 tonnes, compared to the 12-month average of 33 tonnes (t), according to WGC’s latest report. The August figure also represents the lowest net purchase since March, when banks reported a net sale of 2t.

The WGC notes that only four central banks added gold (of a tonne or more) to their reserves during the month of August. Poland led the way with 6t, continuing its net purchase trajectory over the past five months.

The central banks of Turkey, India and Czech Republic also continued to accumulate gold, each adding 3t, 3t and 2t.  On a year-to-date basis, Turkey remains the largest net purchaser at 52t, followed by India in second place at 45t.

Meanwhile, Kazakhstan reduced its gold reserves for a fourth straight months and is now a net seller year-to-date. After shedding 5t in August, its gold holdings now stand at 290t, or about 55% of total reserves.

“While gold’s price performance is not a top strategic driver for central banks purchase, its consistent upward trend could have influenced the deceleration,” WGC’s senior research lead, APAC, Marissa Salim said.

“However, it is worth noting that sales have not increased, which may signal a likely wait and see approach rather than a change in trend. Specially, since all other key drivers of central bank decision making, such as the need for effective diversifiers and gold’s performance in time of risk remain in place.

“In all, our expectation remains positive for the rest of the year but, as we previously discussed, will likely be below last year’s total,” she said.

The Australian miner entered in June into an agreement with Fission Uranium to acquire it for C$1.14 billion ($846m), as strong prices for the fuel used in nuclear reactors has lit fire under market consolidations and deals.

Paladin, which would have become the third-largest publicly traded uranium producer with the planned acquisition, said it was considering the notice sent by Canada’s minister of innovation, science and industry, François-Philippe Champagne.

Ottawa has turned particularly strict on Chinese investment in natural resources over the past four years, and while Paladin’s acquisition of Fission is a deal between Australian and Canadian companies, there are Chinese state-owned entities involved on both sides of the transaction.

CGN Mining Company, a subsidiary of China General Nuclear Power, owns a 11.26% stake in Fission. It formally opposed the deal in late September, but its efforts to block the deal were unsuccessful.

A second Chinese state-owned entity, China National Nuclear Corporation, holds a 25% interest in Paladin’s flagship Langer Heinrich mine in Namibia, and is one of the company’s major lenders.

Paladin said it is exploring its available options and evaluating the prospects of obtaining an Investment Canada Act (ICA) clearance.

The matter is also before the Supreme Court of British Columbia, which is expected to issue a final ruling on the acquisition.

“There can be no certainty that the court will grant the final order, or that ICA clearance will be forthcoming, or that the arrangement will be successfully completed,” Paladin noted.

Foreign acquisitions of Canadian companies may be subject to a national security review, but investments from China have faced the most government scrutiny to date.

In 2020, the federal government blocked Shandong Gold’s bid for TMAC Resources due to the strategic Arctic location of its project. More recently, smaller investments by Chinese mining companies in critical mineral juniors, such as Solaris Resources (TSX: SLS) (NYSE: SLSR) and Falcon Energy Materials (TSX: SRG), were cancelled following national security review delays.

Closer to the US

Paladin Energy chief executive officer Ian Purdy has said the acquisition of Fission would provide investors an alternative in an industry dominated by two major players — Canada’s Cameco and Kazakhstan’s Kazatomprom. 

Fission’s asset is also attractive because of its proximity to Paladin’s major customer, the United States, offering the chance to create a hub with Paladin’s existing tenement in Canada — Michelin.

The combined group would be worth $3.5 billion, hold dual listings in Australia and Canada, and churn out 10% of global uranium output. This would be the result of combining the output of its recently restarted Langer Heinrich Mine in Namibia with Fission’s Patterson Lake South project in Saskatchewan, once completed.

Paladin has been hunting for growth options outside the home country, as Western Australia and Queensland ban uranium mining. The company believes there’s a shortage of primary production coming out of the ground and that the trend is set to continue.

“We’ve seen very strong demand for our Langer Heinrich product. And we expect that when we’re ready to bring our customers to underpin PLS later this decade, that demand (will) be extremely strong,” Purdy said during a July visit to Toronto.

Paladin shares dropped after the announcement, but climbed later in the day, closing up 0.51% at A$11.83 each, leaving the company with a market capitalization of A$3.54 billion ($2.44bn).

The New York-based analytics firm compiled a list of all major copper discoveries between 1990-2023 that met its threshold of 500,000 tonnes in either reserves, resources or past production. In total, 239 deposits met this criteria, for a total contained copper of 1.315 billion tonnes.

While the total copper volume grew year-on-year by 4%, or 61 million tonnes, most of the increase was attributed to older discoveries, with deposits found during the 1990s accounting for 70%, or 43 million tonnes, of the growth, S&P’s analysis found.

Only 14 of the deposits were from the past decade, accounting for only 46.2 million tonnes, or 3.5% of the total copper worldwide. Four of these deposits were made during the last five years (2019-2023), adding only 4.2 million tonnes.

Downward trend

These figures, as the S&P report notes, underscore the downward trend in the rate and size of major discoveries over the past decade. 

Exacerbating the issue, copper exploration budgets have remained well below decade-ago levels, despite surging copper prices, S&P adds. While the global exploration budget climbed 12% in 2023, this was still 34% lower than the peak of 2012, it estimates.

“The dearth of recent discoveries is a direct result of the industry’s continued focus on brownfield assets — extending known deposits and assets — rather than the generative exploration that could yield brand-new discoveries,” Sean DeCoff, author of the S&P report, said.

According to his analysis, grassroots’ share of the copper exploration budget in the 1990s and early 2000s typically ranged between 50% and 60%. However, in a 2023 CES survey, early-stage exploration registered just 28% — the lowest on record. 

“Until there is a reversal in exploration trends, the trend of fewer significant discoveries is likely to persist,” DeCoff said, adding that any new major discovery “will most certainly not match the 1990s in size or abundance.”

Regional contributions

Latin America remains by far the biggest hunting ground for copper, accounting for 55.6%, or 730.9 million tonnes, of the discovered copper from S&P’s dataset. Exploration in the region has mostly been concentrated in Chile and Peru, which combined for 573.9 million tonnes. The top three discoveries on the S&P list are from Chile (Collahuasi and Los Bronces) and Peru (Cerro Verde).

Asia-Pacific ranked second with 21% of global discovered copper, thanks to several tier-one assets such as Oyu Tolgoi in Mongolia, Grasberg in Indonesia and, more recently, Reko Diq in Pakistan.

The US and Canada are collectively ranked third with 10% of discovered copper. In the US, Resolution and Safford account for significant volume, but the nation’s largest discovery, Pebble, has been stymied by regulatory issues and public opposition, making its prospects uncertain.

The study draws on 25 years of research and paints a stark picture of fraud’s reach. Globally, corruption costs the economy $2.6 trillion, roughly 5% of GDP.

For mining operations, particularly in procurement, fraud can escalate costs by as much as 8%. Some examples uncovered in natural resources include suppliers delivering fewer or lower-quality goods than agreed; counterfeit equipment parts and non-existent employees on payroll.

The report also highlights the challenges of corruption, citing cases where the payment of bribes is necessary to acquire government permits. Recently, Glencore was fined £276 million ($352 million) after admitting to bribing government officials for access to oil in Africa.

The report also includes specific case studies.

In one instance, forensic analysis at an Australian gold mining company operating in West Africa revealed the Head of Operations was involved in a corruption scheme. Contractors bribed the executive while delivering substandard work and falsifying government licenses. The result: over $1 million in losses.

In another case, a major copper miner, spending $800 million annually on procurement, discovered 300 ghost employees on its payroll and was losing 7.8% of procurement funds to fraud. After intervention, the company managed to reduce these losses by 51%, saving $20 million per year.

Crowe’s research shows that implementing better fraud prevention practices can cut losses by up to 40% within 12 months.

The report emphasizes that tackling fraud not only saves money but also protects companies from regulatory and reputational harm.

The full report is here.

The new report shows that there have only been five major gold discoveries since 2020, adding about 17 million ounces to the firm’s database of gold discoveries. For its analysis, the New York-based firm defined a major gold discovery as one containing at least 2 million ounces in reserves, resources and past production.

In total, there are now 350 gold discoveries catalogued by S&P between 1990-2023, containing nearly 2.9 billion ounces of gold. The discovery count represents a 3% rise on the previous analysis in 2023, which had 345 gold discoveries with 2.81 billion ounces.

However, S&P’s report noted that while the number of discoveries and amount of gold continue to grow each year, most of the assets were discovered decades ago and only recently met its criteria for a notable gold discovery.

Compared to its last year’s analysis, the five new discoveries contributed to just 22% of the 79 million ounces added in the 2024 update.

It also pointed out that the average size of the recent gold discoveries has shrank, at about 3.5 million ounces compared with 5.5 million ounces during 2010-2019. In fact, none of the discoveries made over the past 10 years entered the list of the 30 largest gold discoveries.

This trend, said S&P research analyst Paul Manalo, supports the firm’s long-held view that the industry’s focus on older and known deposits limits the chances of finding huge gold discoveries in early-stage prospects.

“The lack of quality discoveries in the recent decade does not bode well for the gold supply,” said Manalo.

“Based on the latest monthly Gold Commodity Briefing Service, we expect gold supply to peak in 2026 at 110 million ounces, driven by increased production Australia, Canada and the US — countries that also account for the most discovered gold.”

He went on to add that gold supply is expected to fall to 103 million ounces in 2028, resulting from a decline in supply from these countries.

For the full report, click here.

It’s not that American engineers can’t extract these minerals—far from it. Ask any mining engineer and they’ll tell you it’s entirely possible. But ask a corporate executive or financier and they will tell you that it is simply not worth it. This, despite the fact that these materials are the building blocks for semiconductors, solar panels, and defense systems.

Margins for mining by-products like many of those minerals listed on the US critical minerals list are thin, their markets minute compared to the global juggernauts of aluminum, steel, and iron. For a sense of scale, take the market size for tellurium, which was $464 million in 2021, vs. copper’s market size of roughly $200 billion in that same year. Big mining companies have little incentive to invest in these niche materials when they can just as easily sweep them into the waste stream without denting their balance sheets.

The incentives need to change. The US is not mining in a vacuum—China, through its aggressive industrial policies and state support, has already locked down supply chains for most of these minerals. It has recently imposed export restrictions on germanium, gallium, natural graphite, and antimony.

S&P Global recently reported that the US has around $8 trillion worth of minerals that are trapped underground. As policymakers scramble to diversify supply chains and reduce reliance on adversaries, they’re missing the bigger picture. It’s not about finding more minerals. It’s about rethinking how we make what we already have financially viable.

One promising solution is floating around Washington policy circles: a Strategic Resource Reserve (SRR). The idea is for Congress to establish long-term purchase agreements for critical minerals like gallium and tellurium, thereby giving mining companies a guaranteed buyer. Offtake agreements for by-products alone won’t cut it—these contracts must come with financial incentives significant enough to change corporate behavior.

Policymakers need to think bigger. One way to augment the offtake agreements is to add preferential rates for minerals deemed critical to national security and technology development. Without these measures, we are doomed to repeat the cycle of missed opportunities, as American-made minerals continue to slip into obscurity.

Aligning national security interests with corporate motives is critical. Other mechanisms, like the rumored US Sovereign Wealth Fund—could match spending in greenfield investment in the US up to a certain threshold if a mining corporation goes into an offtake agreement for certain minerals. For instance, Congress could authorize a 1:1 matching of investment for the delineation of new deposits through leveraging the Fund’s capital base. To support the building of new mines, the Fund could offer concessional financing terms for a portion of the capex required through debt, or even take direct equity stakes in exchange for offtake into the SRR.

Investments in smaller-market critical minerals may not light up the quarterly earnings call, but they are essential to the nation’s long-term economic and strategic future. A $20 million tellurium project might be a rounding error on many corporate balance sheets, but they play an outsize role in both meeting energy transition goals, as well as national security needs.

Critical minerals are hiding in plain sight, waiting for policymakers and executives to stop asking whether it’s possible and start asking how it can be made profitable.

(Gabriel Collins is a graduate student researcher at the Colorado School of Mines; Ian Lange is an associate professor of economics at the Colorado School of Mines; and Morgan Bazilian is director of the Payne Institute and professor of public policy at the Colorado School of Mines.)

A 1-million-oz. deficit is forecast this year, up from 731,000 oz. in 2023, as supply edges 1% lower to nearly 7.1 million oz. while demand is expected to grow 3% – the largest gain in five years – to 8.1 million oz., the World Platinum Investment Council says in a new report released on Tuesday.

The council, which represents miners of platinum group metals, forecasts investor demand – driven by exchange traded funds (ETFs) and metal bar and coin sales in China – to rise 15% to 517,000 oz. this year.

Jewelry use is to increase by 7% while mining production is to ease by 1%. Automotive and industrial demand are each predicted to increase 1%, but their levels are already high, the council’s research director, Edward Sterck, told The Northern Miner by phone.

“Automotive demand is at a seven-year high and very much the theme there is higher-for-longer demand for internal combustion engine-containing vehicles,” Sterck said from London where the council is based. “If you exclude the Covid-impacted 2020, and 2014 which was impacted by strikes, it’s actually the weakest year for mine supply since 2000.”

Electric vehicles

Platinum demand can act as a kind of bellwether for the uptake of electric vehicles (EVs), which don’t use catalytic converters to reduce emissions. Leading automakers such as Ford, Toyota and Stellantis have scaled back EV production amid slower than expected sales although hybrids are maintaining growth as vehicle producers lean on them to hit emissions targets. Hybrid autos require more platinum proportionally than traditional cars because their systems operate at lower temperatures, Sterck said.

The council – funded by South African platinum miners Anglo American (LSE: AAL), Northam Platinum, Sedibelo Platinum Mines, Impala Platinum Holdings (JSE: IMP), and Tharisa (JSE: THA) – sees more cost-driven restructuring in South Africa, the leading platinum producer. Production there this year is expected to fall 2% year-on-year to around 3.9 million ounces. With declines in Russian output, global production this year is seen falling 2% to 5.5 million oz., a four-year low, the council said.

Miners have cut back on their capital spending programs substantially and shed about 10,000 jobs, about 6% of the workforce, through the usual legal processes and avoiding labour unrest, Sterck said.

“They’re just effectively trying to improve their labour productivity and drive down their operating costs,” he said. “We’re not expecting any dramatic production cuts as a result of the low palladium and rhodium prices, but the cutback in capex and headcount means you’re probably going to see a gradual erosion of supply going forwards.”

The price of platinum has fallen about 4% this year to about $950 per oz. on Tuesday. Rhodium increased 9.2% this year to $4,750 per ounce​.

Recycling, industries

Global recycling is expected to reach nearly 1.6 million oz. this year, a 2% year-on-year increase.  The spent autocatalyst market should show signs of stabilizing after two years of declines, the council said. Above-ground stockpiles are forecast to drop for the second year in a row, with one-quarter plunge to a four-year low of 3 million oz., just over four months’ worth of demand cover.

Industrial demand is forecast to reach 2.4 million oz. in 2024, marking a 1% year-on-year increase over the elevated levels of 2023. It offsets a sharp decline in platinum chemical offtake, which dropped by nearly half year-on-year to 122,000 oz. in the second quarter, primarily due to a slowdown in China’s petrochemical industry. Chemical demand is expected to decrease by 31% to 542,000 ounces.

Investors

The quarterly report of the council marked the first time it included demand figures from Chinese investors in bars and coins of more than 500 grams. They’re expected to achieve 40% year-on-year growth for full-year 2024 to 188,000 ounces. However, bar and coin investment fell in Japan and in North America.

“We’ve seen, obviously, a lot of demand for gold investment product in China,” Sterck said. “That’s flowing through to platinum investment demand, and that’s grown from effectively from zero five years ago.”

During the second quarter, investment demand surged to its highest level since 2020’s third-quarter, driven by a substantial inflow of 444,000 oz. into platinum ETFs. These included the London-based Wisdom Tree Physical Platinum fund with $629 million under management, and the iShares Physical Platinum fund with $165.9 million.

Jewelry, hydrogen

Historically high gold prices are helping platinum jewelry demand grow to a forecast 2 million oz. this year. India shows strong 28% growth, Japan is forecast to rise by 8% while Europe and North America are expected to reach record high increases of 4% and 3%, respectively. China is set to improve by 3%, reversing a decline in demand that has persisted since 2013, the council said.

The metal’s use is expanding in transportation with the mandated spread of hydrogen fuel cells and charging stations in China and Europe. But its appeal may be limited in North America to long-distance trucking where battery-powered 18-wheelers are impractical on cross-continental routes, Sterck said.

“The challenge is the refueling infrastructure,” he said. “You can’t, with current battery technology, economically electrify coast-to-coast truck transportation because you’re giving up a third of your payload to your battery weight, you’ve got to stop for six hours charging every day, plus arguably in the Midwest, for example, the grids can’t supply that megawatt charging per vehicle requirements.

“So, hydrogen actually is a potential solution to that, and it’s one that’s probably lower cost and easier to implement, but that’s the main scenario where it makes sense in North America.”

The acquisition hands AngloGold the key Sukari mine in Egypt, which is the country’s largest and first modern gold operation, as well as one of the world’s largest producing mines.

The addition of the Sukari mine to its portfolio will increase AngloGold’s annual production by around 450,000 ounces, bringing its total output to 3.1 million ounces. 

Since production began in 2009, Sukari has produced more than 5.9 million ounces of gold, and has a projected mine life of 14 years.

“Today’s transaction is highly compelling and builds on the strong foundation we have built,” AngloGold’s chair Jochen Tilk said in a statement. “It adds to our portfolio as the pre-eminent gold producer in Egypt and offers enormous geological potential that we are very well placed to develop.”

Under the terms of the deal, Centamin shareholders will receive 0.06983 new AngloGold shares for each Centamin share and $0.125 in cash.

The offer represents a 37% premium to the target company’s closing price on Sept. 9, the parties said. 

Once and if the deal goes through, AngloGold shareholders will hold about 83.6% of the combined entity, while Centamin investors will own roughly 16.4% of the enlarged share capital.

South Africa in the rear-view mirror

AngloGold, with assets spanning from Australia to Brazil, has shifted its focus South Africa, the country in which it was founded more than a century ago. It sold the last asset it had in the home country to Harmony Gold in 2020, and last year it moved both headquarters and primary listing to London and New York, respectively.

The transaction is latest in a flurry of industry deals fuelled by ecord-breaking prices for the precious metal. Top player Newmont (NYSE: NEM) bought Australia’s Newcrest Mining for $19 billion last year, cementing its position as the top gold producer. Agnico Eagle Mines (TSX, NYSE: AEM) has completed two major transactions since 2022, positioning itself among the top five producers of the precious metal by market value. Last month, South Africa’s Gold Fields (JSE, NYSE: GFI) bought Canada’s Osisko Mining (TSX: OSK) in a deal valued at C$2.16 billion ($1.6bn).

The deal is also the latest blow to the London stock market, which has seen an exodus of companies in the past few years. The exchange has faced challenges since Randgold’s delisting after its merger with Barrick Gold in 2018, and the massive departure of Russian gold miners following Moscow’s invasion of Ukraine.

A decade ago, Kalgoorlie Consolidated Gold Mines (KCGM), owner of the Super Pit, was a 50:50 joint venture between Newmont Corporation and Barrick Gold. As Barrick gradually retreated from Australia, it relinquished management of the asset to Newmont and tried unsuccessfully to sell its stake in 2016.

A pit wall slip in May 2018, which saw about 1 million tonnes of ore fall into the bottom of the pit, led to guidance being slashed by as much as 25%, further dampening Barrick’s enthusiasm for the asset. It ran another sale process for its stake, and in late 2019, Perth-based Saracen Mineral Holdings emerged as the buyer with a $750 million bid. Months later, Northern Star offered to buy Newmont’s half, an offer that was accepted. 

The transfer of the asset into Australian hands paved the way for a merger between Northern Star and Saracen in October 2020, with KCGM as the centrepiece of the deal.

Kalgoorlie’s gold rush

The exit of the North Americans brought KCGM under Australian ownership for the first time in its 31-year history, though the asset dates back more than a century. Kalgoorlie’s “Golden Mile” was discovered by Irish prospector Paddy Hannan in June 1893, sparking a gold rush that continues today. 

According to Western Australian archives, more than 1000 men were prospecting on the Golden Mile within a week of Hannan’s discovery. The main street of Kalgoorlie, 600km east of Perth, is named after Hannan and there is a statue in his honour.

By 1903, there were 49 mines, 100 headframes and more than 3,000km of underground workings on the Golden Mile, and mining continued through the 20^th century.

KCGM was formed in 1989 by combining the entire area into one entity and was operated by Normandy Mining and Homestake Mining Company, which were acquired by Newmont and Barrick, respectively, in the early 2000s.

The Golden Mile has produced more than 65 million ounces (Moz) of gold since the lease was first pegged. The Super Pit itself is one of the world’s largest open cut mines, measuring 3.5km long and 1.5km wide, and can be seen from space.

Northern Star managing director Stuart Tonkin, who qualified as a mining engineer a few kilometres up the road from KCGM at the WA School of Mines, believes the asset still has decades of life ahead of it.

“My attitude is there’s almost more gold in the ground than what’s come out already,” he said during a site visit to KCGM in early August.

New owners

At the time of the Northern Star-Saracen merger, KCGM had a remaining life of just two years and a hefty remediation bill from the 2018 wall slip.

Once referred to as a “big old pit” by Barrick’s Mark Bristow, KCGM now is facing a long future that goes past just the open cut.

While Bristow’s description wasn’t wrong, Northern Star’s work since acquiring the asset has shown the potential that extends beyond the pit.

An aggressive commitment to exploration has resulted in a 66% increase in resources to 32Moz of gold and a 36% increase in reserves to 13Moz since acquisition, equating to a mine life of more than 20 years.

While KCGM already had one underground mine, Mt Charlotte, Northern Star has focused on the asset’s underground potential. Included in the inventory figure is 10Moz of underground resources and 2Moz of reserves.

Tonkin said underground mineralization remained open in all directions.

“We know [mineralization extends] kilometres to the south, kilometres to the north, 2km at depth – the geology continues, so that’s what we get excited about,” he said.

KCGM produced 437,000oz of gold in the 12 months to June 30, 2024, well below its peak of 730,000oz of gold produced in 2011.

Production will continue to increase this financial year to more than 500,000oz, and the operation is expected to reach a run-rate of 650,000oz per annum (ozpa) in the 2026 financial year.

Part of that is due to the almost complete remediation of the eastern pit wall, which will unlock 1.5Moz of high-grade gold.

“I think what investors are going to start to appreciate is that is the keys to unlock the access to the high-grade [ore] in the pit floor, that essentially was sterilized back in 2018,” Tonkin said.

“There’s was a period of no activity, and then when Northern Star took ownership, we rapidly advanced that cutback, as well as mining the Oroya-Brownhill area, and we’re very, very close to opening up that pit floor, which is the high grade out of Golden Pike.”

Underground ore will also contribute to the production growth as Northern Star kicks off the Fimiston underground mine.

Ore from the underground mines will increase to almost 4Mt in FY26 from 2Mt in FY24.

A new era

Tonkin said one of the drawbacks of the asset’s scale and potential was the multitude of options the company had.

“There’s so many iterations and options in front of us. We’ve just got to be focused and fussy and do something – don’t do nothing and be paralyzed by studies,” he said.

In June 2023, after studying a number of scenarios, Northern Star announced a A$1.5 billion ($1.01 billion) plant expansion, which would take throughput from 13Mt per annum (Mtpa) to 27Mtpa.

The three-year build kicked off about a year ago with A$348 million, or 23%, of the budget being spent in FY24. Work and expenditure are ramping up this financial year with A$500-530 million budgeted. And a new plant is being built alongside the existing facility to minimize disruptions to production.

Using a gold price of A$3,500 ($2,300) an ounce, the project has a post-tax internal rate of return of 26% and a payback period of 3.3 years.

Following a two-year ramp-up period, KCGM’s production will increase to 900,000ozpa at all-in sustaining costs of A$1425/oz. This will make KCGM the largest gold producer in Australia and the fourth largest globally.

“There will only be four other gold mines in the world [producing 900,000ozpa] and they’ll be in pretty exotic places and they won’t be on the doorstep of a history of a century of mining in the Kalgoorlie Goldfields,” Tonkin said.

To feed the expansion, underground ore will reach 6Mtpa by FY29, while Northern Star will draw down on KCGM’s huge stockpile of 137Mt at 0.7 grams per tonne gold. The stockpile is worth around A$6 billion at current gold prices.

Riding high

Gold is trading at a record high, both in US and Australian dollar terms.

When asked what Northern Star would do in the event of a A$1500/oz slump in the gold price, Tonkin said the expansion at KCGM would continue as it would lower unit costs.

“I think when you’re looking at comparing this to anything around the world, we’ve got a very, very, very special system with a century of history,” he said. “And we’ve given it a red-hot crack in essentially investing in it to get those returns.

“It will survive the cycles. This asset will underpin the city, but it will also survive the cycles.”

Last week, Northern Star reported record cash earnings of A$1.8 billion and a net profit after tax of A$639 million for FY24 after producing 1.62Moz of gold at AISC of A$1853/oz from its assets in WA and Pogo in Alaska.

The company declared a dividend of A25c per share and extended its A$300 million share buy-back for a further 12 months.

Northern Star was in a net cash position of A$358 million as of June 30 and will continue to fund the KCGM expansion from internal cashflow.

“We’re still self-funding the growth here, even though that the numbers been spent here for gold mining company are pretty big,” Tonkin said.

“But we are in front of a multi-decade asset here from a pit and underground potential, as well as the other assets that are complemented in the portfolio. Our confidence on this significant system is here and it’s only every year we’ve moved forward, we’ve just got more and more confidence, reaffirming why we got here in the first place.”

This article consolidates recent developments across the Arab states of Bahrain, Qatar, Oman, Saudi Arabia & the United Arab Emirates (UAE).

Bahrain is in talks with Nornickel to set up Platinum Group Metals (PGM’s) refinery. The news is yet to be confirmed as the potential deal is in the initial stages of discussion. Qatar’s sovereign wealth fund has committed to investing $180 million in TechMet. TechMet is an investment vehicle supported by the US International Development Finance Corporation to help secure responsibly sourced supply of critical minerals and reduce dependency on China. 

Oman is experienced and strategically positioned in production and processing capabilities of its copper resources. According to the Ministry of Energy and Minerals’ 2023 Annual Report, six Final Investment Decisions (FID) have been approved  for several projects, such as the Mazoon Mining copper ore project in the Wilayat of Yanqul, located in Al Dhahirah Governorate and in Wilayat of Al Khabourah; Al Ghuzayn copper mining project, targeting over six million tonnes of copper ore to be processed at the Wadi Al Jizzi copper concentration plant.

State owned mining company Minerals Development Oman (MDO) alongside their public-private partnerships announced its redevelopment plans at Lasil & Al Baydha Copper Mines in Sohar, Liwa. The project involves several phases: mobilizing and constructing mines, conducting open-pit mining followed by starting processing operations. Copper ore production from the Lasil mine is set to begin this year, with the Al Baydha mine expected to start in 2026. The project aims to produce around 800,000 tons of copper ore annually. The initial phase of the project is to last four years, but ongoing exploration efforts may extend the production period by finding new reserves.

Australia-based mineral exploration and mining company Alara Resources started copper concentrate production from the mine, operated by Al Hadeetha Resources (AHRL), a joint venture company 51% owned by Alara that has a capacity of one million tonnes per year. Alara expects the refinery to reach full production capacity within the next two to three months. The first shipment, consisting of approximately 1,000 dry tonnes of copper concentrate, will be delivered to Trafigura.

Trafigura will offtake all copper concentrate from the mine for period of eight years from the start of production. In return, it provided a $3.45 million financing facility to Alara to use funds to capitalize AHRL and to complete construction of project infrastructure. Repayment of financing period starts from end of September 2025 until end of its maturity, June 2029. Oman’s establishment for the copper mining value chain has paved the way for exploration of other geological resources. This year, Oman signed five mining pacts to extract potash and nickel ores.

Saudi Arabia’s mining boom catapulted after the revision of its legal regime. By revising its mining law, the Kingdom facilitated an investment friendly jurisdiction promoting active exploration. A Saudi Arabian joint-venture company owned on a 50-50% basis by Royal Road and MIDU Company Limited has been selected as the winning bidder, as part of a competitive licencing round, for the Al-Miyah copper and gold tender area. The award consists of three exploration licences, located in the Asir Province of the Kingdom of Saudi Arabia, 150 km northwest of the company’s Jabal Sahabiyah exploration licences. Saudi Arabia interests expand beyond exploration and extraction.

Eyes on the midstream sector

As part of the vision to self-sufficiency and diversification Saudi Arabia is also directing its capital towards a midstream processing sector. According to Saudi Arabia Industry and Mineral Resources Minister Bandar bin al-Khorayef, the government is currently implementing a steel plate factory with a more than $4 billion investment in a steel plate mill complex for the shipbuilding, petroleum, construction and defence industries; and a “green-renewable” flat steel complex that will supply the automotive, food packaging, machinery and equipment, and other industrial sectors. Both projects are already underway, and so is a $2 billion EV battery metals plant.

Saudi Arabia has gone as far as going downstream in the value chain. In March 2022, Lucid motors announced a $30 million lease agreement with developer Emaar Economic City for a plot of industrial land in the King Abdullah Economic City, near Jeddah. The company that is 61% owned by Saudi Arabia’s Public Investment Fund (PIF) said that it aims to complete the Saudi factory by 2025 or 2026 and build up capacity to 150,000 electric vehicles per year. Saudi Arabia has also signed a $5.6 billion deal with a Human Horizons to manufacture electric vehicles as the kingdom is looking to lead the Arab world in expanding economic ties with Beijing. This massive agreement will make Saudi one of the global hubs in electrical vehicles manufacturing and allows China to bypass European taxes on its electric cars.

Local Saudi investor Ajlan & Bros, with United Kingdom-based Moxico Resources, plans to invest $14 billion in developing mines and processing facilities by 2030. Ma’aden mining company also acquired a 9.9% stake in Ivanhoe Electric and established a joint venture to explore for copper, gold, silver, and other metals in Saudi Arabia. Luxembourg-based Eurasian Resources Group has announced its intention to invest $50 million in the Saudi market for large-scale, tech-enabled early-stage exploration for battery transition minerals. Apart from local initiatives, Saudi Arabia mineral partnerships extend internationally.

In July last year, Saudi Arabia’s mining firm Ma’aden acquired a 10% stake in Brazil’s base metals company Vale, through Manara, its joint venture with the PIF. Manara’s investment in Vale will help it expand extraction of copper and nickel. United States-based fertilizer producer Mosaic Co., said that Ma’aden would acquire company’s stake in a phosphate production joint venture by issuing shares worth about $1.5 billion. Ma’aden will issue about 111 million shares to buy the 25% stake that Mosaic owns in Ma’aden Wa’ad Al Shamal Phosphate Co, a joint venture between Mosaic, Ma’aden and Saudi Basic Industries. Saudi Arabia is also investing heavily in its port infrastructure, aiming to position itself as a central hub for the global mining supply chain. The King Abdullah Port and the Jubail Commercial Port are expanding to facilitate the export of minerals and the import of mining equipment, solidifying the Kingdom’s role in the sector.

Domestically this year in the United Arab Emirates, KEZAD Group and UAE-based Titan Lithium have signed a 50-year land lease to build a state-of-the-art lithium processing plant in Abu Dhabi’s Khalifa Industrial Area. With an AED 5 billion (equivalent to $1,361,285,000.00) investment, the plant will produce battery-grade lithium carbonate and lithium hydroxide, sourced from Zimbabwe. This development positions the UAE as a key player in the global lithium market and supports its innovation and sustainable development goals. The project will create jobs, stimulate the local economy, and align with the UAE’s commitment to increasing electric vehicle adoption by 2050.

Internationally, the UAE was the first Arab nation to establish foreign deals in the extractive sector, starting with a bauxite mine in Guinea in 2013. This deal included developing an alumina refinery and the Kamsar port. Over the past ten years, the UAE has significantly expanded its mining investments across resource-rich regions, particularly in Latin America and Africa. 

United Arab Emirates does this differently than its Arab Gulf counterparts, through buying mining concessions rather than providing investments to others in return for the future supply of raw materials. The majority of Emirati operations in the mining sector are joint ventures. UAE establishes an ecosystem of investment bringing together consortium partners in infrastructure, power, health and logistics. The UAE’s DP World and Abu Dhabi Ports Group are at the forefront of this effort. DP World has secured numerous port concessions across Africa, including in the Democratic Republic of Congo (DRC) and Tanzania. These ports are vital for transporting critical minerals for essential raw materials used in electric vehicles and renewable energy technologies.

It’s worth mentioning that the GCC Mineral Resources Committee has convened four times, focusing on key issues such as: integrating mineral industry chains among GCC countries, mapping regional mineral investments, and protecting geological heritage. The committee reviewed mining strategies from various member states and addressed other agenda items aimed at advancing the mining and mineral resources sector across the Gulf Cooperation Council region. The significance of the latter meeting is that the mining sector is now a serious regional discussion among Arab Gulf States indicating interest and forward thinking beyond hydrocarbon resources.

Mining in the Gulf region has emerged as a key area of opportunity driven by strong diplomatic and financial support through strategic investments, infrastructure development, and partnerships. The Arab Gulf states, particularly Saudi Arabia and the UAE, are intensifying their focus on the mining sector to secure their economic futures. Both the UAE and Saudi Arabia are influencing global resource management and trade by expanding their domestic and international mining sector value chains, positioning themselves as major players in the global market.

* Jamil Hijazi is a mineral economist and reporter who holds a Dual Master’s Degree from the University of Dundee Centre for Energy, Petroleum, Mineral Law, and Policy (CEPMLP).

Significant mergers have already taken place in the mid-tier producer space. Red 5 (ASX: RED) and Silver Lake Resources recently completed their merger, and just days before the conference, Westgold Resources (ASX: WGX) finalized its merger with Canada’s Karora Resources. 

These deals follow earlier tie up discussions that both Westgold and Karora held with Ramelius Resources (ASX: RMS).  

Westgold managing director Wayne Bramwell told MINING.COM the new floor for relevance was production of around 400,000 ounces of gold per annum (ozpa). 

“Under that number, you are fighting for relevance, and it’s that space which we’ve just jumped out of, where you were interesting, but probably less relevant to a wider audience,” he said. 

Bramwell expects to see further consolidation among producers with annual production below the new threshold. 

“The concept of remaining relevant is absolutely top of mind for some of these CEOs,” he said. 

“Because the capital markets are shrinking in certain areas, you have to get a certain scale and a certain profitability to maintain that relevance.” 

Despite walking away from Westgold and Karora, Ramelius does not feel pressured to grow solely for size. Managing director Mark Zeptner emphasized the need for profitability over production volume. 

“It matters less about how many ounces you produce, but more how much money you make, and the margin, so I don’t think there is a number in terms of production profile that makes you any better than anyone else,” he told reporters on the sidelines of the conference. 

Mid-tier ripe for consolidation 

The WA mid-tier gold space is small and fragmented, which makes it the subject of constant consolidation rumours. 

Duncan Gibbs, managing director of Gold Road Resources (ASX: GOR), described the sector as “collegiate”, with industry leaders frequently engaging in discussions that could lead to mergers. 

“Most of the CEOs know each other and particularly when we do the overseas conferences, you’ll find there’s a little Aussie corner and all the CEOs are talking to each other,” he said. 

“There’s a lot of areas where we collaborate on so conversations occur for things that might make sense.” 

Leonora operators Red 5 and Genesis Minerals (ASX: GMD) are often linked by speculation, while Gold Road was recently rumoured to be in merger talks with Regis Resources (ASX: RRL). 

Regis managing director Jim Beyer, while not confirming any specific discussions, acknowledged that the sector’s size makes such conversations common. “Everybody’s probably chatted to everybody,” Beyer said, stressing the importance of creating value for shareholders in any potential deals. 

“We’re looking for value for our shareholders, so anything that we look at has to be valuable for our shareholders, not for the shareholders of the other party. Otherwise, I’m just transferring value from my shareholders to them,” he said. 

Emerging targets 

Among the most speculated targets for takeovers are De Grey Mining (ASX: DEG) and Spartan Resources (ASX: SPR).  

De Grey’s Hemi gold discovery in the Pilbara, set to produce 530,000 ounces per annum at competitive costs, has attracted interest from major global players like Barrick Gold (TSX: ABX), Newmont (NYSE: NEM), and Agnico Eagle Mines (TSX: AEM).  

De Grey is fully funded to build the A$1.34 billion ($880 million) Hemi mine, which will produce gold at all-in sustaining costs of A$1,295 an ounce over the first 10 years. 

Gold Road holds 17.3% of De Grey, positioning itself strategically for any potential takeover. Gibbs said the company was happy to “have a seat at the table”. 

“I think if you look at it in the longer term, De Grey or Hemi is likely to end up in the hands of one of the global majors – it’s the asset that they all want,” he said. 

The other developer sparking M&A speculation was Spartan Resources (ASX: SPR), owner of the high-grade 2.48 million ounce Dalgaranga project, particularly following the recent arrival of Ramelius on the register as an 18% shareholder. 

Zeptner and Spartan managing director Simon Lawson separately confirmed they had met since Ramelius’ A$180 million share raid in early July. 

With a market capitalization of A$1.4 billion, Lawson admitted the company was “quite pricey” for an explorer but could see the potential for Dalgaranga to rival the size of Ramelius’ neighbouring 6moz Mt Magnet operation. 

“I don’t think there is a world where I would give it up unless we were rivalling that kind of size, and I think that’s where our shareholders’ heads are at,” he said. 

Large caps focus elsewhere 

While consolidation continues among mid-tier producers, larger companies like Gold Fields and Northern Star Resources are focusing on different strategies. Gold Fields, rumoured to be actively looking at opportunities in WA, confirmed its expansion intentions this week, with the acquisition of its Windfall joint venture partner Osisko Mining. 

“There is a lot of opportunity for consolidation, not just here, but globally,” Gold Fields CEO Mike Fraser told MINING.COM. 

“I think that’s going to take place, but what we are doing right now is, because we have got a very strong exploration program, is partnering with juniors as well to find new opportunities through the drill bit.” 

Gold Fields’ most recent exploration deal was a A$13 million farm-in with Killi Resources (ASX: KLI), announced in May. 

Northern Star Resources (ASX: NST), now Australia’s largest listed gold miner with a market capitalization of A$16.4 billion, remains committed to reaching a production goal of 2 million ounces per annum by the 2026 financial year.  

Managing director Stuart Tonkin confirmed the company is currently focused on its growth path. “We always look at things, but we’ve just got some really compelling organic projects which have taken our attention,” he said. 

Evolution Mining, the country’s second-largest miner with A$7.6 billion market capitalization, has been active on the corporate front, having completed 11 deals – acquisitions and sales – in the 12 years since its formation. 

It most recently paid A$400 million for 80% of the Northparkes copper-gold mine in New South Wales in December 2023 and A$1 billion to buy out Glencore’s interest in the Ernest Henry copper-gold mine in Queensland in late 2021. 

Evolution executive chairman Jake Klein described the $375 million purchase of the Red Lake mine in Canada in 2020 as its most challenging acquisition and one from which it “wears a lot of scars”. 

Klein said Evolution remained confident of Red Lake’s future, but appeared to rule out further deals for now. 

“I think our shareholders really want us to deliver operational predictability and reliability more than more acquisitions at this time,” he said. 

The strike at the world’s largest copper mine began at 8 a.m. local time on Tuesday and involves the union’s 2,400 members, leaders said in a emailed statement, though no formal announcement has been released yet.

“We’re convinced we made every responsible effort to reach an agreement, but that wasn’t possible,” the union said.

BHP representatives and union leaders sat down on Monday for one last session of mediated talks that extended to the early hours of Tuesday. Before the tense meeting, the Australian mining giant presented an improved wage offer directly to workers and the labour regulator, which included a $28,900 bonus for each worker.  

According to BHP, union leaders didn’t show up to scheduled sessions earlier Monday. Workers’ leaders said the company was aware they wouldn’t be attending the earlier discussions, accusing BHP of revealing the terms without prior consultation.

The company began later in the day removing striking workers, as it activated a contingency plan that allows for “minimum services” and for non-union members to keep working.

The union stated that it remains open to resuming negotiations and accused BHP of breaching strike agreements by bringing in replacement workers for those who walked out. Under Chilean labour laws, strikers may not be replaced by neither external nor internal personnel.

The last significant time Escondida workers downed tools was in 2017 and the strike lasted 44 days. The stoppage hurt production, drove global copper prices up and became the longest private-sector mining strike in Chile’s history.

It’s estimated that Escondida — responsible for about 5% of the world’s total copper output — failed to produce more than 120,000 tonnes of the red metal due to that strike.

Hundreds of millions at risk

Estimates from Goldman Sachs’ indicate that a 10-day strike action could impact BHP’s earnings by upwards of $250 million. This is based on an estimate of $16 million per day and lost production during ramping down and up.

If the strike was to last for 44 days, Goldman estimates the current EBITDA impact would reach $795 million.

BMO analyst Colin Hamilton said it’s unclear how long the current industrial action will last to give estimations of potential losses. “[But] a good rule-of-thumb is that Escondida produces ~25,000 tonnes per week of refined copper; given our last quarterly forecast had copper in a small surplus for 2024, it would not take long for the strike to shift the market back into deficit,” Hamilton said.

Based on data from state-run Chilean Copper Commission (Cochilco), Escondida accounted for 23.7% of the country’s copper production during the first half of the year. This is almost the same amount produced by Chile’s Codelco, the world’s largest copper producer, in the same period. 

Escondida churned out 614,400 tonnes of copper in the first six months of 2024, according to Cochilco. Chile’s total production of the red metal during the period amounted to 2.6 million tonnes.

The stoppage at Escondida comes barely a day after 270 workers downed tools at Lundin Mining’s (TSX: LUN) Caserones copper mine.

While majority-owned and operated by BHP, Rio Tinto and Japanese companies such as Mitsubishi Corp also hold stakes in the mine.

Chile is the world’s biggest copper producer, and sales of the metal make up for about 60% its export earnings.

The takeover is the Johannesburg-based gold miner’s latest move to diversify beyond the home country. Two years ago, the company made an unsuccessful attempt to acquire another Canadian gold miner, Yamana Gold.

Gold Fields will pay C$4.90 per share, a 55% premium to Osisko’s Aug. 9 trading price, it said in a statement. The deal will help the South African producer expand its presence in the Americas region, where it already has mines in Chile and Peru.

The deal makes Gold Fields the sole owner of the Windfall project in Quebec, which it has been developing in a 50/50 joint venture with Osisko.

“Over the past two years, beginning with our initial due diligence in 2022 and throughout our joint ownership of the project since May 2023, we have developed a strong understanding of Windfall and its potential, and view it as the next long-life cornerstone asset in our portfolio,” chief executive Mike Fraser said in the statement.

Gold Fields plans to bring the Windfall mine into production by the end of 2026 or early 2027, eventually ramping up to approximately 300,000 ounces annually. The project, along with the recently commissioned Salares Norte project in Chile, is central to the company’s growth strategy as it looks to replace output from aging assets in Ghana and Peru.

Osisko’s board has given unanimous approval to the deal, calling shareholders to support it. Chairman and CEO John Burzynski said the transaction represented an early payout for Osisko investors and also reflected Windfall’s potential.

“In the span of nine years, we’ve transformed Windfall into one of the largest and highest-grade gold development projects globally, and this transaction is a testament to the extraordinary entrepreneurial effort of the Osisko Mining team,” Burzynski said in a separate statement.

BMO analyst Raj Ray questioned the timing of Gold Fields’ move. “While we acknowledge the transaction rationale behind consolidating the Windfall project and the large exploration potential around it, we are a bit surprised with the timing,” he wrote on Monday.

The metals and mining specialist noted that investors will likely focus on the fact that Gold Fields has “sacrificed a significant portion of its expected cash flows over the next 12 to 24 months”, while taking on development and execution risks.

“This transaction puts even more emphasis on Salares Norte ramp-up, which has not gone smoothly yet,” Ray said.

Gold Fields anticipates completing the acquisition in the last quarter of the year, with funding sourced from both new and existing debt facilities, as well as cash reserves.

Expanding portfolio

Founded in 1887 by Cecil John Rhodes, Gold Fields has reshaped itself throughout the years. It sold all but one of its South African assets a decade ago, refocusing on newer, more profitable deposits in Ghana, Australia, and the Americas.

Earlier this month, the company said it expected a 20% fall in overall production in the first half of the year at its mines, as well as the delayed ramp-up of the Salares Norte mine in Chile.

The miner had already revised its gold output for the 2024 calendar year in June. It said at the time it expected to churn out between 2.2 million ounces to 2.3 million ounces, down from the original range of 2.33 million ounces to 2.43 million ounces.

Gold Fields shares closed more than 6% down in Johannesburg, at their lowest since June 20. That leaves the company with a market capitalization of almost $13.6 billion.

Spot gold was little moved at $2,428.66 per ounce, having posted its biggest one-day surge in three weeks at 1.9% the day before. US gold futures gained only 0.1%, trading at $2,468.40 per ounce in New York.

For the week, bullion is still down about 0.8%, on track for its biggest weekly decline since June 7. Prices fell as much as 3% on Monday as part of a broader equities market sell-off, prompting a three-day losing streak.

Gold then rallied on Thursday after new US labor data that showed applications for unemployment benefits fell by the most in nearly a year, boosting optimism that the Federal Reserve may be able to achieve safe landing with its monetary easing.

Thursday’s gains also put gold within touching distance of the record it reached last month. The precious metal has risen about 18% this year, largely on expectations the US central bank would soon deliver rate cuts.

Other factors supporting gold’s upward trajectory include increased purchases from central banks and Chinese consumers, along with haven buying due to conflicts in the Middle East and Ukraine.

“Heightened volatility, elevated geopolitical risks, recession worries, and expected rate cuts have gotten gold to current levels and eaten into our conviction around urging caution” in buying bullion, RBC Capital Markets analysts, including Helima Croft, said in a note to Bloomberg.

“We maintain a positive view on gold as a diversifier hedge against turmoil elsewhere,” Ole Hansen, head of commodity strategy at Saxo Bank, also said in a Reuters interview.

“In the medium term, the outlook for gold remains positive, with any dips likely to be short-lived due to underlying macroeconomic factors,” stated Zain Vawda, market analyst at MarketPulse by OANDA.

“Yesterday’s US jobless claims data eased recession concerns, boosting gold prices. Additionally, comments from the Fed this week have supported the notion that rate cuts may be forthcoming,” he added.

(With files from Bloomberg and Reuters)

Last month, Serbia reinstated Rio Tinto’s licence to develop what would be Europe’s biggest lithium mine in the western Jadar region, two years after the previous government halted the licensing process due to protests by environmental groups.

Energy Minister Dubravka Djedovic Handanovic told Reuters that the miner needs to secure approvals to move towards production at the site, which will hinge on its environmental impact study. She noted that the project was one of the largest by certified reserve, amounting to 158 million tonnes — equivalent to 17% of Europe’s total lithium reserves.

“How quickly we will proceed is down to us. We have already lost two years. We could have been the first in this race,” Handanovic said.

If completed, the Jadar project would be able to produce 58,000 tonnes of refined battery-grade lithium carbonate per year — enough to power one million electric vehicles and supply 90% of the continent’s current lithium needs. It would also propel Rio Tinto onto the list of the top 10 global lithium producers.

Recently, the President of the Republic of Serbia, Aleksandar Vučić, stated that lithium mining would not occur until guarantees are received from the world’s best experts.

“There will be no digging, no changes in the field, nor will there be. Until we get all the guarantees ourselves, nothing will happen in the next 12 to 18 months,” Vučić said.

Last month, Serbia, the European Union and Germany signed agreements granting EU members and some of the continent’s most important carmakers exclusive access to Serbian lithium. The agreements, covering sustainable raw materials and battery supply chains, came only a week after Serbia’s top court ruled the 2022 decision to revoke the Jadar project licence was unconstitutional.

Thousands took to the streets across Serbia last week to protest against the project. A new major protest is scheduled for Saturday in the capital, Belgrade.

Handanovic questioned the protesters’ motives and said the demonstrations aimed more at challenging the government.

“The arguments presented are aimed at destroying order on the streets under the guise of concern for ecology,” the minister said.

She also said the project would help Serbia, which has mineral resources including copper, zinc, lead, gold and lithium, access technical know-how.

(With files from Reuters)

In a press release, TechMet said the funds will be used to develop both its existing assets and to continue to build its portfolio with strategic projects that scale production and refining of its target critical minerals, which include lithium, nickel, cobalt and rare earths.

Since its inception, the Dublin-based TechMet has invested more than $450 million into projects across North and South America, Europe, and Africa. These include: Brazilian Nickel, Cornish Lithium, EnergySource Minerals, US Vanadium, Trinity Metals, Xerion Advanced Battery Corp, TechMet-Mercuria, Rainbow Rare Earths, REEtec and Momentum Technologies.

This investment by Qatar Investment Authority comes as the US government intensifies its efforts to diminish China’s dominance in the critical minerals market.

As part of this initiative, the Biden administration has sought to persuade Saudi Arabia, Qatar and the United Arab Emirates to invest in US-led projects aimed at extracting and processing minerals for industrial use.

Qatar is a key US ally in the Gulf and also a significant LNG supplier to China.

“There’s a recognition it can’t just be domestic [mining and processing] and it can’t just be US money,” TechMet CEO Brian Menell told the Financial Times on Wednesday.

The $180 million investment is part of a $300 million sixth funding round, advised by Rothschild, which has boosted TechMet’s valuation to over $1 billion.

“A major sovereign investor coming in alongside the US government accelerates our ability to scale and expand the portfolio and build significant value across critical minerals supply chains,” Menell said.

The sector employs nearly half a million people and contributes about 7% to the country’s GDP.

The country recently experienced a shift in its political landscape, resulting in a new Government of National Unity (GNU). Notably, this was the first time the African National Congress (ANC) lost its parliamentary majority since coming to power in 1994.

According to mining analyst Peter Major, the mining sector has faced significant challenges since the ANC took over the government, particularly with the implementation of the Minerals and Petroleum Resource Development Act (MPRDA) in 2004.

“It’s been pummeled, beaten up, kicked,” said Major.

“It was able to survive the last twenty years because we were in a supercycle of metal prices. Had it not been for that, I really don’t think our mining sector would be even a quarter of today’s size. But because we’ve had twenty years of great metal prices, it was able to sustain itself but not grow.”

Major believes there is potential for the government and the mining industry to collaborate on new mining regulations.

“We’re cautiously optimistic,” Major told MINING.COM’s Devan Murugan.

Watch the full interview:

Spot gold fell as much as 3.2% to $2,365.55 per ounce, the biggest single-day drop since early June. By 12:55 p.m. ET, it had recovered half of the loss to $2,403.37 per ounce.

US gold futures were also lower by 1.0% at $2,445.10 per ounce in New York, but maintained above the $2,400 level throughout the session.

Despite Monday’s sharp drop, gold is still up by about 18% year to date. It hit an all-time high in July, aided by central bank buying and Asian consumers. Last week, it crossed the $2,500 mark for the first time ever.

Expectations of rate cuts by the US Federal Reserve, along with rising geopolitical tensions in the Middle East, have provided strong support for bullion, which is often considered a safe haven during times of uncertainty.

But those bullish factors were overshadowed on Monday by pressure on positions from the global stock market selloff triggered by fears of the US tipping into recession following weak economic data last week.

“Margin calls ahead of the New York opening have forced traders to liquidate winning positions in gold to cover their losses on stocks,” said Adrian Ash, director of research at BullionVault, in a Bloomberg note.

In a stock market crash it’s common for gold to drop as equities plunge, “but it falls less and from higher ground before finding its floor sooner,” he explained.

However, analysts believe the precious metal could regain its footing, given the persistent economic and political uncertainties looking ahead, and also on expectations of interest rate cuts, which should bode well for the zero-yield bullion.

“Virtually every time there is marked equities weakness, investors who hold gold as a risk hedge will liquidate part of their holdings to raise liquidity against any potential margin calls,” said Rhona O’Connell, an analyst at StoneX Financial.

“When the dust settles, they almost invariably buy it back,” she added.

(With files from Bloomberg)

The company is second on our list of Canadian miners by last year’s net income at $1.9 billion. It attributed this year’s first-quarter net income of $347.2 million to cost control, nearly 880,000 oz. in output and a record gold price.

“Some of the highlights include our second consecutive quarter of record operating margins and our second consecutive quarter of record free cash flow ($395.6 million),” president and CEO Ammar Al-Joundi said on an April conference call.

“We remain focused on capital discipline,” he said. “We are absolutely determined at Agnico that increases in gold price go to our owners.”

Agnico is advancing the former Hope Bay gold mine project in Nunavut, where it also operates the Meadowbank and Meliadine gold mines, number three and four in Canada by production. It’s planning a $1 billion underground expansion at Detour Lake that would increase annual output to 1 million oz., making it one of the world’s top-five gold mines.

Upper Beaver

The company expects to give an update in August on developing the Upper Beaver project near Kirkland Lake in northern Ontario as an underground gold and copper mine with a small open pit and processing facility.

In July, Agnico pledged C$93 million for a 9.9% stake in Foran Mining (TSX: FOM), which is advancing the McIlvenna Bay copper-zinc-gold-silver project in Saskatchewan. The major invested C$8.2 million for 13% of First Nordic Metals (TSX-V: FNM) in Finland and boosted its holding in Ontario-focused Maple Gold Mines to 19.9%. 

Barrick Gold (TSX: ABX; NYSE: GOLD) leads our list of Canadian miners by net income at $1.95 billion and is second according to market value at C$44.7 billion.

The company produced 1.9 million oz. gold and 83,000 tonnes of copper in this year’s first half, the company said in July. That compares with 1.1 million oz. gold and 102,058 tonnes copper in last year’s second half, according to its annual report.

Barrick says costs should decline as output increases during this year’s second half. The global miner, which has only the Hemlo mine in Canada, expects increased production at Turquoise Ridge in Nevada after maintenance at the Sage autoclave in the first quarter. It continues to ramp up output at Porgera in Papua New Guinea and posted increases at Tongon in Ivory Coast, North Mara in Tanzania and Kibali in the Democratic Republic of Congo (DRC).

Those increases were partially offset by planned lower production at Cortez and Phoenix in Nevada. Pueblo Viejo production in the Dominican Republic was flat as the miner plans to increase throughput and recovery rates in the year’s second half, it said. 

Mali junta

Barrick is also contending with the junta in Mali that wants more taxes from the Loulo-Gounkoto operation that produced 683,000 oz. of gold last year. Rights groups say the mine is funding Russia because its Wagner Group mercenaries are backing the military government.

“Barrick has been engaging with the National Directorate of Geology and Mines to grow our exploration footprint here, securing our ability to deliver real value to Mali,” CEO Mark Bristow said in July in rare comments since the junta took power a year ago. “We continue to work constructively towards a global resolution of our differences.”

Bristow has a history of working with governments in troubled areas as it develops the $7 billion Reko Diq project in Pakistan after reopening Porgera, both with deals giving locals about half the profit.

Dealmaker

Wheaton Precious Metals (TSX: WPM) is number three in market capitalization at C$37.9 billion and sixth in net income at $538 million. Its streaming and royalties model reduces exposure to operational risks for its own shareholders while offering alternative capital raising for companies that may be thwarted by stock market valuations.

From August last year, the company notched up eight deals valued at more than C$1 billion in potential payments, according to president and CEO Randy Smallwood. He’s targeting 850,000 gold-equivalent oz. of annual production.

Nutrien (TSX: NTR; NYSE: NTR), the world’s largest potash producer, clocks in at number four on both lists, with a market value of C$34.5 billion and net income last year of $1.29 billion. The company said in July it’s reviewing strategic options for its half ownership of Argentine fertilizer company Profertil and said it’s no longer pursuing the $2 billion Geismar clean ammonia project in Louisiana.

Teck Resources (TSX: TECK.B), is sixth on our list of market values at C$32.6 billion after it sold three-quarters of its Elk Valley coal assets to Glencore (LSE: GLEN) and the rest to Nippon Steel of Japan and POSCO of South Korea. Formerly Canada’s largest diversified miner, the company is now focused on copper.

Future growth

Teck doesn’t make our top 13 in net profit for last year, but BMO Capital Markets is upbeat about the company’s future. Teck will be a cleaner investment story as a simplified copper investment vehicle, mining analyst Jackie Przybylowski wrote in a July 15 note.

“Completion of this transaction refocuses Teck as a Canadian-based critical minerals champion,” she said. “The proceeds from the coal sale will fund future growth — either from Teck’s existing portfolio of copper growth options or through acquisition of new assets.”

Cameco (TSX: CCO; NYSE: CCJ) ranked seventh with C$22.7 billion in market value and 10th in net income with $263 million as it rode a uranium price surge that peaked in January at $106 per lb., the highest in 17 years. Lower-than-expected sales hurt first-quarter results, but the company said it expects metal revenue to rebound and its 49%-owned Westinghouse nuclear plant services division to have a stronger second half.

DRC

Ivanhoe Mines (TSX: IVN) in the DRC in July restarted the century-old Kipushi mine which aims to be the world’s fourth-largest zinc producer. The company founded by co-chair Robert Friedland is eighth on the market cap list at C$24.8 billion, and ninth in net income at $303 million.

Also in Congo, the Kamoa-Kakula complex, which holds the world’s fourth-largest copper resource, produced 186,925 tonnes of the wiring and plumbing metal in this year’s first half. It’s ramping up its stage three concentrator capacity this quarter to more than 600,000 tonnes a year. Ivanhoe owns 39.5% of Kamoa-Kakula, which aims to produce 440,000 to 490,000 tonnes of copper in concentrate this year.

The company benefits from United States funding of a rail line across Angola to the Atlantic from the Zambia-DRC copper belt. The company, metals trader Trafigura and Angola are considering a 2,000-megawatt high-voltage line from northern Angola hydro-electric plants to the copper region.

Total increased demand, says the Council, was supported by healthy over-the-counter (OTC) transactions, which were up a notable 53% year-on-year at 329 tonnes.

Central banks and official institutions also increased global gold holdings by 183 tonnes, a slower rate than the previous quarter but still reflecting a 6% increase year-on-year.

The surge in OTC demand and continued buying from central banks, plus a slowdown in ETF outflows, helped drive gold prices to a record $2,427/oz. during the quarter. Gold averaged $2,338/oz. for the three-month period, 18% higher year-on-year.

The WGC central bank survey confirmed that reserve managers believe gold allocations will continue to rise over the next 12 months, driven by the need for portfolio protection and diversification in a complex economic and geopolitical environment.

“The rising and record-breaking gold price has made headlines as strong demand from central banks and the OTC market supported prices, which has been a consistent trend throughout the year,” Louise Street, senior markets analyst at the WGC said in the report.

Demand breakdown

Global gold investment remained resilient during Q2, marginally higher year-on-year at 254 tonnes, concealing divergent demand trends. Bar and coin investment decreased 5% to 261 tonnes, due to a sharp decline in demand for gold coins.

Strong retail investment in Asia was counterbalanced by lower levels of net demand in Europe and North America, where profit-taking surged in some markets, WGC said.

Global gold ETFs saw minor outflows of 7 tonnes during the quarter. Asian growth continued, sizable European outflows in April turned into nascent inflows in May and June, and North American outflows slowed significantly compared to the previous quarter.

Record high prices drove down jewellery demand by 19% year-on-year in Q2, but H1 demand remains resilient compared to the same period last year, thanks to a stronger-than-expected first quarter.

In addition, demand for gold in technology continued to increase, jumping 11% year-on-year driven primarily by the AI boom in the electronics sector which saw an increase of 14% year-on-year.

Meanwhile, gold supply rose 4% year-on-year, with mine production increasing to 929 tonnes. Recycled gold volumes increased 4% compared to the same quarter in 2023, marking the highest second quarter since 2012.

Outlook

Looking ahead, the question is: “What will be the catalyst to keep gold front and centre in investment strategies?” Street said.

“With a long-awaited rate cut from the US Fed on the horizon, inflows into gold ETFs have increased thanks to renewed interest from Western investors. A sustained revival of investment from this group could change demand dynamics in the second half of 2024.

“In India, the recently announced import duty cut should create positive conditions for gold demand, where high prices have hampered consumer buying,” she noted.

“While there are potential headwinds for gold ahead, there are also changes taking place in the global market that should support and elevate gold demand.”

For the full report, click here.

Now that one of those factors has changed—permitting—chairman and CEO Rudi Fronk says the company could be in a position to sign on a well-heeled joint venture partner within months to help it develop the mammoth project. He says he was close to signing a deal in 2020 when Covid-19 scuppered talks. 

“With six major gold and copper companies currently at the table, we are confident that we will secure a partnership that aligns with our vision and financial strategy,” he told The Northern Miner during a site visit to KSM in late July. “The nice thing right now is for the first time ever, we have competitive tension going on in our process.” 

RBC Capital Markets is managing a JV negotiation process, Fronk said. RBC has been brought in to manage and enhance the negotiation process for securing a JV partner, creating a competitive environment to secure the best possible deal for Seabridge.

A day before the permit milestone—a designation by the BC government acknowledging that construction at KSM has ‘substantially started’—Fronk predicted a deal could materialize quickly. 

“Once the permit designation has been completed, we could expect a deal within four to six months, perhaps even sooner,” he said.  

A ‘substantially started’ designation confirms the project’s environmental assessment certificate (issued in 2014) is valid for the mine’s entire lifespan. Seabridge has poured more than C$1 billion into the project since getting involved in 2000. 

Besides the permit milestone, the federal and provincial governments’ July 15 commitment of C$195 million for local infrastructure improvements, including upgrades to Highway 37, signals strong governmental backing for the project.  

Seabridge secured $150 million in funding about a year ago in a deal with Sprott Resource Streaming and Royalty, for which it has been conducting early work activities. Seabridge subsidiary KSM Mining gave up a 1.2% net smelter return (NSR) royalty on the project. 

Fronk’s sought to advance the project with staged investments to reduce upfront capital requirements and equity dilution. “Our goal is to bring in a partner who will fund the bankable feasibility study and subsequent project financing, ensuring that Seabridge’s financial exposure is minimized,” he explained. 

Martian landscape

During a recent visit, The Northern Miner saw the vast scale of the KSM deposits from the air, and inspected the progress of pre-construction activities at the Golden Triangle site. 

Extensive road networks, bridges, and infrastructure necessary to support future construction and mining operations are already in place.  

At the Mitchell deposit, one of several deposits at KSM, the tour helicopter touched down in what seemed like a Martian landscape, with outcropping mineralization staining the rocks around the glacial valley bright orange, yellow and turquoise. The deposit naturally leaches acidic water with a pH as low as 2.5 down the streams. 

With a receding glacier as the backdrop, Elizabeth Miller, vice-president with environment and social responsibility, explained the Mitchell deposit is a cornerstone of the KSM project.

The 2022 prefeasibility study highlights the project’s flexibility, Miller said, allowing for different mining approaches and development plans that can be customized to fit a future JV partner’s skills. 

Miller suggested the company had been holding back on doing a bankable feasibility study without the input of a funding partner. 

Copper or gold?

Both Fronk and Miller stressed that KSM has so much gold and copper that it could be developed as either a primary gold or copper operation, depending on the flavour de jour. 

Proven and probable reserves are 2.3 billion tonnes grading 0.64 gram gold, 0.14% copper, 2.2 grams silver, and 76 ppm molybdenum in the Mitchell, East Mitchell and Sulphurets deposits. Contained metal within the reserves comes to 47.3 million oz. of gold, 7.3 billion lb. of copper, 160 million oz. of silver, and 385 million lb. of molybdenum. 

The 2022 prefeasibility study positions KSM as a gold project costing $6.4 billion, with an initial mine life of 33 years.  

The prefeasibility study uses a base case gold price of $1,742 per oz. and estimates a payback period of 3.7 years, with an after-tax net present value (at 5% discount) of $7.9 billion and an internal rate of return of 16.1%. 

According to the study, KSM would produce an average of 1 million oz. gold yearly, along with 178 million lb. copper and 3 million oz. silver. The life-of-mine strip ratio is favourable at 1:1, and removing capital-intensive block caves has reduced total project capital costs.  

Block cave potential

In addition to the prefeasibility study, Seabridge also completed a 2022 preliminary economic assessment (PEA) focused on the opportunity to develop the copper-rich Kerr and Iron Cap deposits through block caving. 

This study suggests a 39-year mine life, with the mill feed containing 16 billion lb. copper, 23.2 million oz. gold, and 122 million oz. silver. The base case for the PEA estimates operating costs at $0.38 per lb. copper produced after credits for gold, silver, and molybdenum, and a total cost of $1.44 per lb. of copper.  

Initial capital for this copper-focused project is set at $1.5 billion, to be funded from the end-of-life cash flows of the 2022 PFS. The operation will support a 170,000-tonne-per-day mining rate and average annual output of 368,000 oz. gold, 366 million lb. copper, and 1.8 million oz. silver. 

The PEA forecasts a total after-tax net cash flow of $18.5 billion, an NPV5% of $5.8 billion, and an IRR of 18.9%. 

A January resource update for the Kerr and Iron Cap deposits shows Kerr now hosts 384.2 million indicated tonnes grading 0.22 gram gold per tonne, 0.41% copper, 1.2 grams silver, and 5 parts per million (ppm) molybdenum, and 2.6 billion inferred tonnes at 0.27 gram gold, 0.35% copper, 1.7 grams silver, and 21 ppm molybdenum. 

Iron Cap contains 471 million indicated tonnes at 0.38 gram gold, 0.21% copper, 4.3 grams silver, and 39 ppm molybdenum. The inferred portion is 2.3 billion tonnes at 0.41 gram gold, 0.27% copper, 2.5 grams silver, and 31 ppm molybdenum. 

A glimpse of progress

Miller noted the company has strong partnerships with the Tahltan Nation, Nisga’a Nation, Gitxsan Hereditary Chiefs, and local governments. “Their support not only reflects the project’s alignment with regional development goals but also our commitment to community engagement and social responsibility,” she said.

Beyond KSM, Seabridge continues to invest in exploration projects such as the nearby Iskut gold project, where on June 27, it published an initial resource on the Bronson Slope deposit of 517 million tonnes grading 0.33 gram gold per tonne, 0.09% copper and 2.7 grams silver for 5.4 million oz. gold, 1 billion lb. copper and 45 million oz. silver. 

It also has the 3 Aces gold project in the Yukon.  

The exploration plans for Iskut this summer include drilling about 15,000 metres, focusing on targets like Quartz Rise, Bronson Slope, and Snip North. At 3 Aces, the first 8,000-metre drill program is underway, targeting high-grade orogenic gold systems. 

Seabridge shares last traded at C$22.91 Wednesday after setting a fresh 12-month high the day prior at C$23.48–up 86% over its period low of C$12.62. Seabridge has a market capitalization of about C$2 billion and a 0.56-oz.-gold-reserve-to-share ratio, a high figure compared with producing peers trending below the 0.2 level, according to Fronk.

Data from S&P Global Market Intelligence, shared by the Financial Times, reveals that the market capitalization of London-listed mining stocks has dropped to $272 billion in 2024 from $322 billion in 2018. In contrast, mining sectors on exchanges in Australia, Canada and the US each exceeded $325 billion.

Since 2020, miners listed on the LSE have raised only $8 billion, less than a quarter of the amounts raised in Sydney and Toronto.

“The market is focused on the tech sector,” Robert Crayfourd, a portfolio manager at CQS, told the Financial Times. “But it is crucial for London, historically an innovative and supportive hub for mining stocks and finance, not to fall further behind. Otherwise, companies may turn to other markets, sidelining London.”

Currently, 171 metals and mining companies are listed on the LSE, representing 17% of the global market capitalization for the sector. However, most of this value is concentrated in a few major firms like Glencore (LON: GLEN), Rio Tinto (ASX, LON, NYSE: RIO) and Anglo American (LON: AAL). Over 100 LSE-listed companies have a market capitalization of less than £100 million ($128 million).

London faced setbacks in 2022 when Russian gold producers delisted following the Ukraine invasion, and BHP (ASX, NYSE: BHP) moved its primary listing to Australia.

Recently, Rio Tinto has faced pressure from activist investors to follow BHP’s lead, Glencore is considering spinning off its coal division for a New York listing, and Anglo American is selling assets after avoiding being acquired by BHP.

With a market capitalization of £86 billion ($110 billion), Rio Tinto is currently the ninth-largest company on the FTSE 100. Losing Anglo American or Glencore would pose a “huge risk for the London market,” according to Hayden Bairstow, a Perth-based analyst at financial advisory firm Argonaut.

The world’s second largest miner has been concentrating on expanding its copper business based on anticipated strong demand surpassing available supply of the energy transition metal.

Rio Tinto, which has long said building mines is a better option for growth than buying assets, seems to be changing its tone as main rival BHP moves to consolidate the sector.

Chief executive Jakob Stausholm said he is not ruling out looking at large takeovers in the copper sector now that Rio has reached an “inflection point”.

“Our ambition is to deliver around 3% of compound annual growth [in copper output] from 2024 to 2028 from existing operations and projects,” he noted during the first-half results call.

Stausholm confirmed that the company’s copper equivalent production is on track to grow by about 2% this year and noted the company is in a “strong position” to deliver on a number of large projects that would drive future growth. 

When it comes to the orange metal, Rio is counting on Oyu Tolgoi’s underground copper mine in Mongolia to make it the world’s fourth-largest copper operation by 2020.

“Oyu Tolgoi’s conveyor is now 97% complete and commissioning is expected in September. The conveyor is critical to ramp up production, so this is really a turning point now for our copper business,” Stausholm said. 

The mine, which began as an open pit in 2011, added underground production last year, and it is expected to deliver half a million tonnes of copper a year from 2028 to 2036.

Rio’s top boss also said he remained confident that construction of the Resolution copper mine in Arizona, which it is developing with BHP, would proceed despite opposition from some Indigenous and environmentalist groups.

The company has pledged to follow United Nations principles that require full consent from Indigenous groups for mining on traditional lands in the wake of its destruction of significant rock shelters in Western Australia for an iron ore mine in 2020.

“We are making real progress there,” Stausholm said. “I think it’s a prospect that will happen but I can’t give you a timeline.”

The company is said to be under “immense pressure” from the US government to develop Resolution, as the asset holds a quarter of the country’s known copper reserves.

Partnering up

Rio Tinto’s copper growth includes strategic alliances with producers of the coveted metal. One of its partners is Chile-owned copper miner Codelco, the world’s largest producer, which has seen output decline to a 25-year low and is desperate to find new commercially viable deposits.

The mining giant also has a venture with First Quantum Minerals (TSE: FM) to unlock the development of the La Granja project in Peru, which currently ranks as the fifth largest copper project in the world.

Rio Tinto is also hoping to recover copper from tailings and is testing its Nuton bioleaching technology in partnership with Arizona Sonoran Copper (TSX: ASCU).

Nuton  is the product of nearly 30 years of in-house research and development, and it seeks to deliver carbon- neutral copper. Rio estimates it can deliver 0.4 tonnes of Co2 equivalent for Scope 1 and 2 emissions per tonne of Nuton copper produced, compared to 5.2 tonnes of C02 equivalent as per standard, conventional primary copper production.   

In 2023, the world’s use of coal rose by 2.6% to set a new all-time high of 8.70 billion tonnes, driven by strong growth in China and India, the two largest consumers globally, the IEA’s July 2024 Coal Mid-Year Update finds.

Driving forces

While coal demand grew in both the electricity and industrial sectors, the main driver, according to the IEA, was the use of coal to fill the gap created by low hydropower output and rapidly rising electricity demand.

This trend is expected to continue this year, with global coal demand forecast to rise marginally by 0.4% to roughly 8.74 billion tonnes, the IEA report says.

In its last publication, the Agency previously predicted a decrease in demand in 2024, with a moderate decline thereafter. However, this forecast, it says, required two conditions: a recovery of hydropower generation in China after years of low rainfall, and a slowdown in Chinese electricity demand growth; the latter of which did not materialize.

“The continued rapid deployment of solar and wind, combined with the recovery of hydropower in China, is putting significant pressure on coal use. But the electricity sector is the main driver of global coal demand, and electricity consumption is growing very strongly in several major economies,” stated Keisuke Sadamori, IEA director of energy markets and security.

“Without such rapid growth in electricity demand, we would be seeing a decline in global coal use this year. And the structural trends at work mean that global coal demand is set to reach a turning point and start declining soon.” 

Regional demand

China, the world’s largest producer and consumer of coal accounting for more than half of the global consumption, saw its electricity demand rebound in 2023, growing by 7%. Another major annual increase in China’s electricity demand is expected this year (6.5%), the IEA forecasts, despite a recovery in the hydropower sector combined with rapid deployment of solar and wind.

India, the second-largest source of global coal consumption, saw double-digit growth (10%) in coal demand for power generation last year. Unlike in many other parts of the world, in India, growth in renewable energy sources is unable to keep pace with the growth in power demand. In the first half of the year, India’s coal consumption rose sharply as a result of low hydropower output and a massive increase in electricity demand due to extreme heatwaves and strong economic growth.

In Europe, coal demand is continuing on the downward trend that began in the late 2000s, largely due to emissions reduction efforts in power generation. After having fallen by more than 25% in 2023, coal power generation in the European Union is forecast to drop by almost as much again this year, the IEA says.

Coal use has also been contracting significantly in the United States in recent years, but stronger electricity demand and less switching from coal to natural gas threaten to slow this trend in 2024, it adds.

Meanwhile, Japan and Korea are continuing to reduce their reliance on coal, although at a slower pace than Europe.

Demand reversal

In 2025, the IEA estimates global coal demand to enter a trend reversal after four years of growth, decreasing slightly by 0.3% to a total of 8.71 billion tonnes.

A key reason is that China, which has traditionally driven coal demand growth, is likely to show its first decline in coal demand since 2016. It is estimated that Chinese coal demand in the power sector will decline by 1.1% in 2025, since renewables are likely to outgrow power demand.

This, combined with ongoing declines in the European Union, United States, Japan, Korea, and other parts of the world, is expected to outweigh continuous growth in India and ASEAN, it says.

Supply forecast

On the supply side, global coal production is expected to decrease slightly in 2024 after steady growth the year before, the IEA says.

In 2024, coal production in China is moderating after two years of staggering growth. In India, the push to boost coal production continues, with a supply increase of around 10% expected in 2024. In advanced economies, coal production is in decline, broadly reflecting demand.

The report also finds that trade volumes are at the highest levels ever seen despite the collapse of imports in Europe and the decline in imports in Northeast Asia (Japan, Korea and Chinese Taipei) since 2017.

However, other countries are stepping in to take up available supply, it adds. In 2024, Vietnam is set to become the fifth largest coal importer, surpassing Chinese Taipei. Imports to China and India remain at all-time highs.

But producers face an immediate challenge: limited demand. Sustainable alternatives to steel, aluminum, and other metals are expensive to produce and priced at a premium. The future market will be vast, yet it’s unclear how quickly it will develop and which customers will be early adopters. That’s a common problem with many new technologies.

Leading producers are generating initial sales by partnering with manufacturers that have a strong incentive to incorporate green raw materials into their products. They are also adapting their commercial strategies to help stimulate near-term demand. By moving along the experience curve faster than the competition, first movers will push costs down, leverage subsidies more effectively, and gain a competitive edge before green metals become mass-market products in the 2030s.

Given the size of traditional commodity markets, sustainable metals are likely to reach impressive scale quickly. For example, we expect between 15% and 25% of European steel production to be low carbon by 2030, or about 25 million to 35 million metric tons. Based on estimated prices, that volume represents a $20 billion to $30 billion market (see Figure 1).

Commodity producers have started making large investments in sustainable metal technologies and production facilities. Many of these will reach commercial maturity in three to five years. For example, H2 Green Steel is building a greenfield plant in northern Sweden to produce steel with a hydrogen-based process powered by renewable energies. The process will reduce carbon emissions from the outset by 90% compared to traditional steel-making methods, with the aim of reducing emissions to zero. The company, which has secured €3.5 billion in debt funding for the investment, aims to start commercial production in 2025 and reach an output of 5 million tons of green steel in 2030.

German steel producer Salzgitter is investing more than $1 billion to start converting an existing steel plant to run on green hydrogen. The company plans to introduce the new technology to its steel plants in stages, with a goal of cutting 95% of emissions from its steel production by 2033. Similarly, Alcoa and Rio Tinto are codeveloping a technology to produce virgin aluminum with no direct carbon emissions. Their joint venture to commercialize the new process, Elysis, aims to begin installations around 2024.

Turning point 2030

Manufacturers that stand to benefit most from decarbonizing their operations will fuel the initial demand for low-carbon raw materials. As demand for sustainable metals grows, supply shortages may increase the premium that producers can charge for them.

The future winners will continually adapt their commercial strategies and models to the evolving market for green commodities. Our analysis suggests a turning point is likely sometime after 2030 when sustainable metals and chemicals become more widely available. Ultimately, premiums will disappear as these new goods become commodities.

A few key guidelines can help leadership teams position themselves for success as demand for green commodities grows.

Early adopters

Commodities typically make up a large proportion of a manufacturer’s carbon footprint. Determine the role of low-carbon materials in each customer’s overall carbon transition to help identify potential sources of demand. For example, steel production accounts for more than 6% of greenhouse gas emissions (see Figure 2). Companies that use a substantial amount of steel in their products are likely to be receptive to a low-carbon alternative to reduce emissions.

Producers that understand the customer’s value chain and decarbonization goals are better able to identify potential early adopters and make a strong case for switching to green commodities.

In addition to reducing emissions, manufacturers may also benefit from green commodities in boosting their sustainability credentials with consumers. Those likely to benefit most from switching to green metals and chemicals will have a high internal cost of carbon, substantial emissions, ambitious decarbonization targets, and a strong commitment to the company’s environmental image. Wind energy giant Vestas, for example, has committed to a 45% reduction in Scope 3 emissions by 2030. Half of the company’s carbon emissions come from the steel used to make its wind turbines.

New sales capabilities

Winning in green commodities requires a different approach to sales, marketing, and communication. Forward-looking producers ensure commercial and production teams work together on pricing and capacity decisions. They also build new capabilities and sales resources to target frontrunners.

Leaders in the transition to green commodities have begun to train sales teams, educate customers on the value of decarbonization, form direct relationships with customers, and establish partnerships. Take the case of H2 Green Steel: At the time of its Series B funding round, the company had already presold 60% of its initial volumes, with some customers also taking equity in the firm. Securing sales prior to production helps assure demand before the market takes off.

Critical signposts

To stay one step ahead of a developing market, leaders identify signposts that will signal pivotal changes in demand and link actions to each one. Such signposts include impending regulations mandating the use of low-carbon inputs. For example, steel and aluminum producers should keep a close eye on the Scope 3 targets of their customers, including those in the automotive, construction, white goods, and machinery sectors. Rising Scope 3 targets will likely lead to higher demand for green commodities. Producers that anticipate these pivotal moments improve the speed and quality of decision making.

The shift to green metals is likely to accelerate in the coming years. Producers that understand the value proposition for sustainable commodities and adapt their go-to-market strategies will move faster down the experience curve. The winners in this future market will help fuel early demand and enjoy premiums while gaining an advantage as the market for green commodities matures.

Like their North American peers, Australian gold miners have been shunned by investors in recent years in favour of battery metal producers. 

With the heat coming out of lithium, and the local nickel market almost wiped out, the gold sector is coming back into favour. 

It’s occurring at a time when the Australian dollar gold price is trading at record levels of more than A$3,600 ($2,358) an ounce. 

The pep in gold miners’ step was evident during a session featuring mid-tier gold producers at the Noosa Mining Investor Conference in Queensland in mid-July. 

“It’s fair to say, it’s a great time to be a gold producer,” Ramelius Resources managing director Mark Zeptner said. 

The comment was a far cry from only two years ago, when rampant cost inflation outrun increases in the gold price and led to significant margin squeeze. 

Changing fortunes 

The fortune of Western Australia’s gold sector can be quite closely linked to the state’s powerhouse iron ore industry, regardless of the gold price. 

When iron ore is booming, the majors are able to pay more to secure the skilled labour they require, often at the expense of the lower margin gold sector. 

This was particularly acute during the covid-19 pandemic, when WA’s borders closed, causing arguably the worst labour shortage the state had ever seen. 

The state’s high-margin iron ore sector was also much more easily able to absorb the additional costs that came along with covid-19, including social distancing and testing. 

“The labour and cost pressures that hit the WA mining industry during the pandemic have eased more recently,” Zeptner told MINING.COM. 

Ramelius, a 250,000-300,000 ounce per annum producer, saw its production impacted by labour availability. 

“Not only was there a rise in absenteeism due to illness, border closures meant widespread shortages of almost all roles across the industry,” Zeptner said. 

“Road train drivers, in particular, were hard to come by. Given the hub and spoke model that Ramelius operates on where we are trucking from satellite deposits to a central mill, we felt this shortage more acutely than others.” 

Cash building 

In early July, Ramelius, Capricorn Metals, Red 5, Westgold Resources and Regis Resources, reported preliminary June quarter results, highlighting improved cashflow generation. 

Ramelius’ margins reached a record 48% in the 2024 financial year and are projected to increase to 55% in the current financial year. 

The two largest Australia-based producers, Northern Star Resources and Evolution Mining, each reported record net mine cashflow, Evolution for the June quarter and Northern Star for the year to June 30, 2024. 

Taking into account inflationary pressures of roughly A$110/oz, Evolution chief executive Lawrie Conway told analysts and reporters that the company’s cashflow increase was at a greater rate than moves in metal prices. 

“Through the course of the year, we’ve seen the benefit of about A$400-500/oz on the gold price, so it’s certainly outweighing it,” he said. 

“And when we look at the spot price today, it’s about A$460/oz higher than what we achieved last [financial] year, so from our expectations, if we were to see spot price maintained through the year, and we take the inflationary impact, we’re picking up A$350/oz better.  

“The gold price is certainly beating off the inflationary impact on our cost base.” 

Costs still rising 

Northern Star’s all-in sustaining costs for FY24 were A$1815/oz and the company has guided to AISC of A$1850-2100/oz for FY25, higher than the market expected. 

Northern Star has already renegotiated some major contracts at higher costs and the higher gold price means an increase in royalty payments. 

When questioned about costs on a conference call, managing director Stuart Tonkin said the guidance was potentially conservative. 

“With the backdrop of the nickel reduction, lithium reduction, even some gas out of iron, there’s potentially some costs plateauing or even potentially some savings across energy costs and labour, so we haven’t baked that into anything across our costs,” he said. 

While Evolution is yet to release FY25 guidance, the company is guiding to a 5% increase in labour costs in the coming financial year. 

“And that’s about A$65-70/oz and the other costs are averaging around 3%, adding A$30-40/oz,” Conway said. 

“As we’ve closed out the year, we’ve seen it pretty well lining up to that benchmarking we’ve done in the mining sector.” 

Conway said the recent 0.5% increase in Australia’s superannuation (retirement pension) guarantee also played a part in rising wages. 

Cost creep 

A higher gold price inevitably leads to cost creep as companies mine more marginal ounces. 

Tonkin said Northern Star had added lower grade tonnes to its mine plan as they were now “materially profitable” but acknowledged that even a small drop in grade would lead to higher AISC. 

“But when the goal post is at A$3500 an ounce and you’re doing reserves at A$3000 and resources at A$2500, there’s a lot of headroom for profitable material that’s in and around the areas that we’re mining,” he said. 

“If you look across the sector, I think we’re still pretty healthy compared to the average of increases that you’re starting to see. 

“I’m not saying we’re the best of the worst bunch, I’m just saying it is what happens when the gold price goes up.” 

Shortages easing 

Evolution has two operations each in New South Wales and Queensland and one each in WA and Ontario. 

Its Mungari operation in WA experienced staff turnover rates of up to 30% during the pandemic. 

“If we look at Mungari, over the last six months, their turnover rate and ability to fill roles has reduced and improved, in that order,” Conway said. 

Conway said recent job cut announcements by BHP and Fortescue meant more people would become available in the WA workforce. 

“From our perspective, we see that as a positive for Mungari, but that’s probably what we’re going to have to track over the next six months compared to what we saw in the last six months when these things hadn’t actually started to take place,” he said. 

Northern Star is already seeing lower vacancy and turnover rates after multiple nickel mines closed. 

“It’s sad to say but we’re beneficiaries of that retraction, but it also was unique that all the cycles peaked at once, when we had two years of the border locked, that we had iron firing, lithium firing, nickel firing and gold firing all at same time with the inability to get important labour and the state was short 25,000 resources workers,” Tonkin said. 

“That’s why you got cost escalation, so this is the opposite side of that hill.” 

Juniors also benefitting 

Luke Creagh was formerly the chief operating officer of Northern Star but now runs smaller gold producer Ora Banda Mining. 

He’s seen firsthand how much harder it is to attract workers to a single-asset junior in a turnaround phase. 

“Before, we’d put a LinkedIn post or an ad out and get zero replies, and now we get meaningful applications, which is really good,” Creagh told MINING.COM. 

“But I still think there’s a skills shortage across the board for your technical people like engineers, which the industry has to solve through training.” 

Creagh said people seemed to be more aware of commodity risk given the job losses in nickel. 

“It’s not all rosy across every part of the sector now and the cost of living is starting to bite a lot of people,” he said. 

“Job security previously wouldn’t have ranked in the top five things people are worried about, but I think job security would now almost be number one.” 

Too late for some 

Against the backdrop of the mid-tier producers’ newfound swagger is a litany of gold company failures in recent years. 

A number of high-cost mines shut down, and others, including Wiluna Mining Corporation and Navarre Minerals, collapsed. 

The most recent collapse was Calidus Resources, which went into voluntary administration in late June due to high debt, just two years after opening its Warrawoona gold mine in WA. 

Ora Banda has had its doubters as the company’s Davyhurst mine, east of Kalgoorlie, has claimed several previous operators. 

Creagh admitted it had been stressful trying to execute a turnaround with a tiny budget, limited team, and against the macroeconomic backdrop in WA. 

“In under two years, we went from zero undergrounds to finding, starting and getting one to commercial production and finding another that’s just about to start, so it’s been remarkably successful on a small budget,” he said.  

“Now we’re into the fun stage, because we’re through the fixing stage – it’s finished – the next 12 months is when we really start generating strong cashflows from the underground.” 

The record gold price has come at the perfect time for Ora Banda, with production set to rise by 30% in the next 12 months and costs to fall by more than 25%. 

“It’s a great place to be at the moment, for sure,” Creagh said.  

“The gold price is awesome and it looks strong for the foreseeable future, which is great for the gold companies.” 

Up until last week, a Trump re-election in November was seemingly baked in. Investors rushed to align their portfolios for a Republican victory.  

But now that US President Joe Biden has withdrawn from the presidential race, Vice-President Kamala Harris, a younger candidate, looks set to inject new vigour into the scuttled Democratic Party.   

With that, the ‘Trump Trade’ is cooling.   

Early polls already hint that a Harris vs. Trump election will be tight. That’s according to Reuters on Wednesday.   

So, what does that mean? 

Investors are now as clueless as ever regarding who might win in November.  

It comes back to what Warren Buffett says about mixing politics with your investment strategies… Don’t do it!  

And it looks like the Oracle of Omaha was spot on again.  

Expect more volatility into November

In Australia, we’re somewhat sheltered from the spectacle unfolding in the States. But as commodity investors, we can’t ignore it altogether. 

The world’s largest economy leads the Western rhetoric on war, geopolitics, renewables, nuclear power, and trade tariffs. All of these ‘big issues’ impact the commodity market.  

Take lithium. A Democratic win will likely lead to further development of renewables, EVs, and lithium-ion batteries. That could cause a rally in lithium stocks on the ASX.  

However, under a Republican administration, fossil fuel companies would flourish, given Trump has been a vocal supporter of domestic oil and gas production. 

Echoing former Alaskan Governor Sarah Palin, Trump’s energy policy can be summarized in three words: “Drill, baby drill!”  

Trying to guess who might win in this coming election and aligning your portfolio accordingly is a fool’s game. 

Each candidate has diverging policies with varying implications for commodity markets, particularly those linked to energy.  

Yet, through the fog, some political agendas look far more certain regardless of who wins in November.  

Temperature rises on China-US relations

At the Republican National Convention last week, Trump and his newly minted running mate, JD Vance, ramped up the “America First” narrative. Not surprisingly, both politicians were keen to parade China as the bad guy. 

There’s little doubt that a Trump-Vance leadership would seek to intensify trade wars against China, something Trump initiated when he took office in 2017.  

Nothing rallies a nation like a common enemy, and Trump looks set to juice this strategy again. But amping up hostilities could be very good for one area of the commodity markets — critical minerals.  

China holds a firm grip on supply of rare earths, graphite, and cobalt thanks to its mining and processing dominance. So, why would these types of stocks do well under rising tensions? 

Critical minerals remain China’s most effective tool against Western trade hostilities. For the most part, it’s kept this ace up its sleeve. 

However, as pressure mounts on the Middle Kingdom, the probability of China weaponizing its trade dominance over these key materials grows. These minerals are crucial for modern-day manufacturing, from defence, tech and renewables.  

After a 12-month hiatus, stocks tied to this group of commodities could return with a vengeance if Trump raises the temperature on US-China relations.   

The key stocks to watch will be companies already in production or capacity to supply the West with an alternative supply within three to five years.   

A few names pop out here, including Lynas (ASX: LYC), Arafura Rare Earths (ASX: ARU) or the advanced graphite developer Renascor (ASX: RNU).

So, what about the other side of the political divide?

This is where you don’t need to apply much political guesswork. 

The hardline stance against China is one of the few bipartisan policies among Republicans and Democrats.   

While the world barely knows what to expect from Harris, so far, it looks as though she’ll follow along with Trump’s China-bashing style. 

Here’s an extract from one of her speeches in late 2022 after visiting Japan: 

“China is undermining key elements of the international rules-based order. China has challenged the freedom of the seas. China has flexed its military and economic might to coerce and intimidate its neighbours.” 

“We will continue to fly, sail, and operate undaunted and unafraid wherever and whenever international law allows.” 

And in 2019, she co-sponsored the Hong Kong Human Rights and Democracy Act, which aims to promote human rights in Hong Kong and sanction officials involved in “undermining Hong Kong’s fundamental freedoms and autonomy.”

These statements certainly aren’t winning any friends in Beijing.  

As far as I can tell, the US’s ramp-up against China is as close to a sure bet as you can get, regardless of who wins.

— James Cooper is a geologist based in Australia who runs the commodities investment service Diggers and Drillers. You can also follow him on X @JCooperGeo.

The UK-based data analytics firm compiled a list of the top M&A financial advisers in the industry for the six-month period, with BofA leading the way in deal value at $5.4 billion. RBC advised on the most deals, with six transactions totalling over $1.6 billion.

Lazard, which did not make the rankings for Q1 2024, came in second place in deal value at $3.8 billion. JPMorgan, the top adviser in Q1 by deal value, had a quieter second quarter and fell to third place at $2.4 billion.

UBS, which went neck and neck with JPMorgan in Q1, finished fourth for H1 2024, while Piper Sandler rounded out the top 5.

In terms of deal volume, RBC outperformed its rivals Cormark Securities and BMO Capital Markets, both of which advised on four deals. Macquarie and Argonaut PCF followed with three deals each.

“RBC Capital Markets registered a massive jump in its ranking by volume in H1 2024 compared to H1 2023,” GlobalData lead analyst Aurojyoti Bose said in a press release.

“It went ahead from 43rd position by volume in H1 2023 to top the chart by this metric in H1 2024. Apart from leading by volume, RBC Capital Markets also occupied the eighth position by value during H1 2024.

“Meanwhile, Bank of America, apart from leading by value, also occupied seventh position by volume in H1 2024. Despite a year-on-year decline in the total value of deals advised, Bank of America’s ranking in terms of value improved from the third position in H1 2023 to the top spot in H1 2024.”

The legislation could speed up approvals of clean-energy, pipeline and electricity transmission projects by shortening some federal environmental reviews and setting limits on court challenges.

“The United States of America is blessed with abundant natural resources that have powered our nation to greatness and allow us to help our friends and allies around the world,” Manchin said in a news release. “Unfortunately, today our outdated permitting system is stifling our economic growth, geopolitical strength, and ability to reduce emissions.”

He went on to say that the bill is a result of over a year of hearings in the Senate Energy and Natural Resources Committee, considering input from colleagues on both sides of the aisle, and negotiations. Manchin currently serves as Chairman of the Committee.

It signals a win for West Virginia Senator Manchin, previously a Democrat, now serving as an Independent, after a previously stalled legislative effort to fast-track energy projects. A bid to attach the energy-permitting package was dropped from must-pass government funding legislation in the Senate last year when it didn’t have the votes.

“A commonsense, bipartisan piece of legislation will speed up permitting and provide more certainty for all types of energy and mineral projects without bypassing important protections for our environment and impacted communities,” Manchin continued.

“The Energy Permitting Reform Act will advance American energy once again to bring down prices, create domestic jobs, and allow us to continue in our role as a global energy leader.”  

“Washington’s disastrous permitting system has shackled American energy production and punished families in Wyoming and across our country. Congress must step in and fix this process,” added Barrasso, Ranking Member of the Committee. “Our bipartisan bill secures future access to oil and gas resources on federal lands and waters.”

The American Exploration & Mining Association (AEMA) released a statement on Tuesday applauding the bill.

“Our inefficient federal permitting system is a significant deterrent to attracting investment in the United States to explore for and develop strategic mineral resources, and it has resulted in the US being increasingly reliant on foreign countries,” AEMA executive director Mark Compton said in the statement. 

“The permitting reforms in this deal are a good start, and we look forward to working with both sides of the aisle to see they become law.”

Full text of the Energy Permitting Reform Act of 2024 can be found here.

The study, carried out by market experts at The Gold Bullion Company, analyzed gold data per country to find where demand outpaces gold production in mines, and by how much.

The demand-supply data comes from the World Gold Council, the international trade association for the gold industry.

The analysts tabulated the 10 countries with the largest gaps between consumer gold demand and mined production (see below).

India tops the ranking in first place. With a population of over a billion, India has a substantial demand for gold, amounting to more than 747 tonnes in 2023 — made up of jewellery and gold bar demand. This works out at roughly 0.52 gram per person. However, there has been significantly lower mine production at 15.1 tonnes, meaning that demand was 50 times the supply in 2023.

Behind in second place is China. With a population of over 1.4 billion, the country has a yearly gold demand of 909.7 tonnes. Although the mine production figure is the highest seen in all 10 countries, it still falls short of the demand by two times.

Rounding out the top 3 is Turkey. Mine production in 2023 stood at 36.5 tonnes, which is six times lower than the demand of 201.6 tonnes. Gold demand has also been rising, going from 1.13 grams per person in 2021 to 1.43 grams in 2022 and 2.34 grams in 2023.

Also falling behind in its production is the United States. The world’s No.1 economy mined roughly 166.7 tonnes of gold in 2023 but still fell about 80 tonnes short of its demand.

Rick Kanda, managing director at The Gold Bullion Company, commented on the importance of sustainable metal production:

“Sustainable metal production is vital for environmental, economic, and social reasons. Environmentally, it helps conserve finite resources, reduces energy consumption, and minimizes pollution, thereby mitigating climate change and protecting ecosystems.”

“Overall, sustainable metal production supports a balanced approach to resource utilization, benefiting the planet, economy and society,” he concluded.