With annual production capacity of 120 million metric tons, the project in the African nation’s southeast is set to be the world’s largest mine for the highest grade of iron ore, key to the green transition in the global steel value chain.

Simandou has four mining blocks with two in the northern region developed by a consortium of Singapore-based Winning International Group, Weiqiao Aluminium, which is part of China Hongqiao Group, and United Mining Suppliers.

Baowu has become a key shareholder after completion of the transfer in June of shareholding rights by Winning Consortium Simandou (WCS), as it is known.

“Because Simandou is rich in high grade-resources with favourable mining conditions, production cost will be relatively competitive,” the company said in a briefing on its third-quarter result.

The company hopes to optimise its ore blending structure after Simandou starts production, it added.

Baosteel is a unit of state-owned China Baowu Steel Group, the world’s largest steelmaker by output.

The company also said the building for its zero-carbon plant, with an investment of 4.5 billion yuan ($631 million) and powered by green hydrogen and green electricity in Zhanjiang in the southern province of Guangdong, will be completed in 2025.

On Tuesday, Baosteel reported a plunge of nearly 65% in its third-quarter net profit, undermined by a fall in steel prices.

Its export orders in the first three quarters hit a record high of 4.66 million tons, well on track for its 2024 target of 6 million tons.

($1=7.1360 Chinese yuan renminbi)

(Reporting by Amy Lv in Beijing and Farah Master in Hong Kong; Editing by Christian Schmollinger and Clarence Fernandez)

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.

The rather hopefully named Beijing “bazooka” was expected to be followed up by another stimulus blitz the following week, this time focused more on fiscal policy and infrastructure investment, but the latter turned out to be a damp squib, with prices down 9% since then. 

Next week could be another make or break moment for the copper price in a highly anticipated meeting of the Standing Committee of China’s National People’s Congress, the country’s highest lawmaking body, scheduled for 4–8 November. 

Copper markets will be hoping for more detail of the scale and nature of Beijing’s stimulus measures, but in a note the copper service of Benchmark Mineral Intelligence points out that the announcement did not mention debt or fiscal policy on the agenda, so it remains to be seen how forthcoming policymakers are with details: 

“If the meeting fails to shine further light on the scale of fiscal stimulus, we expect copper prices to come under renewed pressure. We note that copper prices have trended significantly above their implied relationship with the USD index since the announcement of China’s stimulus ‘blitz’ in late September. 

“If Chinese authorities follow through on the market’s expectations, we could see a permanent step-change in this relationship (just like we did post-COVID). Conversely, if the market loses faith in China’s stimulus efforts and deems them inadequate or superficial, our regression analysis suggests that copper stands to drop by close to $1,000 per tonne.”

CMOC Group Ltd. produced 84,722 tons of cobalt at its mines in Africa in the first nine months of this year, according to the firm’s earnings report late Monday. Its earlier output guidance for all of 2024 was 70,000 tons at the high end.

The faster-than-expected increase has deepened a global cobalt glut and helped send prices tumbling to an eight-year low this month. The Chinese firm passed Glencore Plc last year as the world’s top supplier of the metal used in everything from electric-vehicle batteries to aerospace alloys.

CMOC has been expanding two huge mines in the Democratic Republic of Congo, where cobalt is extracted as a by-product of mining copper. Its output of the red metal in the first nine months rose 78%, and could hit 600,000 tons for this year “if this pace of production continues,” CMOC said on its official WeChat account.

The miner’s third-quarter net income rose 64% from a year earlier to 2.9 billion yuan ($410 million), largely thanks to the higher copper output and relatively strong global prices of the metal. Revenues rose 16% to 51.9 billion yuan.

CMOC is among several Chinese firms trying to lift output in central Africa’s copper belt. Preliminary exploration work has started for the western area of its Tenke Fungurume mine, and also for phase two of its Kisanfu project, it said.

In a separate statement, CMOC said it has signed a three-year supply and purchase agreement with Contemporary Amperex Technology Ltd. — the world’s top battery-maker and CMOC’s second-biggest shareholder — for metals including copper, cobalt, nickel and lithium.

CATL bought $546 million worth of products from CMOC in the first eight months of 2024, more than double the volume in all of 2023. CMOC said those were primarily nickel products.

(By Annie Lee)

Australia is the world’s biggest supplier of seaborne iron ore, accounting for around half of global supply. But the Pilbara grades dug up from the country’s west are generally regarded as too low to be turned into steel without using coal.

That means as steel makers decarbonize, they are turning elsewhere for iron ore, which could hit Australia’s top export earner, Otranto said at the IMARC conference in Sydney.

“The message is, take the opportunity,” he said on the sidelines of the conference. “We have an abundance of solar and wind… so the logical next step is to get into downstream industries.”

Competition is growing from new green steel projects – made without the use of fossil fuels – in the Middle East, while Guinea’s giant Simandou iron ore mine is set to start up next year, he said.

“That’s a high grade deposit going straight into the steel mills in China,” he said of Simandou.

“Let’s not sit here with our head in the sand thinking it’s not going to happen again.”

Australia had the opportunity to help build Indonesia’s nickel industry but did not anticipate China’s speed and technical innovation, and its domestic industry suffered as a result.

“The Chinese … built the biggest nickel industry the world has ever seen and … took out an entire market sector in four years,” he said, referring to the transformation of Indonesia’s nickel industry into the world’s dominant supplier, driven by Chinese stainless steel giant Tsingshan.

That flood of supply has hammered nickel producers around the globe, including in New Caledonia and Australia.

Otranto said a similar scenario could play out in Australia’s iron ore industry which, along with the Australian government, was underplaying the threat to the sector and that government and industry need to collaborate to lower power costs in particular.

“We have to bring in Chinese manufacturing of solar panels and wind turbines, because they’re doing it better than anyone else,” he said. Automating robots for installation would cut labour costs to help make green iron production economic, he said.

The world needs Australia’s iron ore to sustain steel production so answers must be found.

“We cannot lose the opportunity to place the 600 to 700 million tons of iron ore that Australia ships out,” he said. “So we have to work unbelievably hard, even harder than we’re doing now.”

The world’s fourth largest iron ore miner, Fortescue will use green hydrogen from solar farms at its Christmas Creek operations to start producing 2,000 tons per year of green iron using hydrogen next year.

On Monday, Brazilian miner Vale, the world’s second biggest iron ore producer, said it had partnered with China’s Jinnan Steel Group to build an iron ore beneficiation plant in Oman to make high quality pellet.

(By Melanie Burton; Editing by Sonali Paul and Lincoln Feast)

Using data from 2022, the study estimates that the US generated 13,767 kg of gold that year worth around £882.8 million from its e-waste. The gold was recycled from a world-leading 4.1 billion kg of wastes, owing to the nation’s consumerist culture.

In second place is China, which recycled fewer than half of the gold than its main rival at 6,630 kg worth £425.1 million. In 2022, the world’s top consumer recycled 1.9 billion kg of documented e-waste, contributed by its role as a global e-waste hub since the 1970s.

Germany ranks third in estimated gold value from recycled e-waste, with 3,249 kg of gold worth approximately £208.4 million. The country processed 956.6 million kg of waste in 2022, a result of strict EU policies that require responsible collection and recycling.

Rounding out the top five are two other G7 nations — France and Japan — with 2,924 kg (£187.5 million) and 2,084 kg (£133.6 million) respectively.

The country that recycled the least amount of gold in 2022 was Azerbaijan, with just 10,000 kg. This could be for a range of reasons, such as a limited e-waste management infrastructure or the lack of regulations, the study says.

On a per-capita basis, Norway led the way with 19.42 kg of documented and recycled waste from electronic goods in 2022, which could generate an estimated 0.066 gram of gold worth £4.23.

For the full list of the world’s top gold recyclers from e-waste, click here.

The facility will be located in Sohar, a port city about 200 km north of the capital, Muscat. It will have the capacity to process 18 million tonnes of low-grade iron ore a year starting in 2027. The aim is to produce 12.6 million tonnes of high-grade concentrate annually.

Vale will invest $227 million to connect the plant to its pelletizing facilities in the region. Jinnan will invest about $400 million to build and operate the plant, which it will own.

“This project brings together Brazil’s capacity to produce high-quality iron ore and Oman’s prime location and infrastructure to enhance integration between the two countries, while also reinforcing our partnership with China through Jinnan,” Vale’s new CEO Gustavo Pimenta said in a release.

The iron ore is to be transformed into a higher-quality concentrate for the production of premium pellets and, in the future, briquettes, with a reduced environmental impact.

This marks Jinnan’s first project in Oman, supporting the country’s industrial ambitions. The company is known for its leading edge in magnetic separation technology.

Vale intends to replicate this investment model across its mega hubs. The miner has announced three mega hubs in the Middle East (Oman, Saudi Arabia, and the United Arab Emirates) and has signed agreements to develop similar projects in Brazil and the United States.

Shares in Vale gained 1.7% to $62.76 apiece by mid-Monday afternoon in New York, valuing the company at $284.8 billion.

Total demand fell by 22% to 218 tons in the three months to September, according to Bloomberg calculations based on data from the China Gold Council on Monday. Jewelry consumption tumbled 29% to 130 tons, while for bars and coins there was a 9% drop to 69 tons.

Gold prices have rallied by about a third this year, hitting a fresh peak last week, on increased purchases by central banks, as well as sustained haven demand from investors. That surge has made jewelry purchases much more expensive at a time when many Chinese consumers are already feeling the strain from a prolonged slowdown in the economy.

Over the first three quarters, gold consumption fell by 11% to 742 tons, according to the council. Last month, non-monetary imports dropped to 97 tons, down 22% from a year ago, although they rose from August.

Read More: BofA’s Hartnett says bets on gold are rising before US election

The total stock market valuation of the world’s biggest mining companies is up a fairly modest 8% year to end-September and despite the good run is still $240 billion below the peak hit in the second quarter of 2022. And judging by the performance of the top tier in the final quarter (BHP down 8% QTD, Rio Tinto –5%, Vale –3%, Glencore –5%, Newmont –9%, Zijin –5%, Freeport –7%) the gap won’t be closing anytime soon.

In contrast, Nvidia — the maker of chips highly prized for artificial intelligence (AI) computing — is up nearly 200% so far this year (and 2,600% over five). When comparing the graphics card maker’s stock valuation to the mining industry’s collective worth, it’s difficult not to wonder if something is not awry with how global investors appraise the industrial economy.  

Should Nvidia (or Microsoft or Apple for that matter) be worth more than twice the top 50 miners? Outside the top 50 the average market cap quickly shrinks to the low teens so Nvidia is in fact worth more than the entire listed mining industry. 

Even when extending the top 50 into metals and energy –  steel, aluminium and electricity companies often operate their own mines – Nvidia can still throw shade. BHP does not even crack the top 100 most valuable companies in the world and is worth less than Booking.com, and Temu and Zara’s owners, none of which can exactly be called the building blocks of the global economy. 

Nvidia briefly surpassed Apple on Friday to become the world’s most valuable company. Its market capitalization is approximately $3.5 trillion, just below Apple’s, which remains the highest-valued firm globally.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.35% higher at 783.5 yuan ($109.92) a metric ton.

The contract had earlier risen as much as 3.33% to 793.0 yuan, its strongest level since Oct. 17.

The benchmark December iron ore on the Singapore Exchange was 1.73% higher at $103.05 a ton, as of 0718 GMT.

Markets are now pricing in expectations of fiscal stimulus from China’s upcoming legislative meeting, said Atilla Widnell, managing director at Navigate Commodities.

However, China’s finance ministry has “potentially mistakenly set expectations too high”, with markets incorrectly interpreting the meeting as Chinese government spending and fiscal support for domestic construction and infrastructure projects, Widnell added.

While steel demand from end-users remains lacklustre, prices of major steel products may stabilize and rebound this week on stimulus expectations, Chinese consultancy Mysteel said.

China’s top legislative body will meet from Nov. 4-8, but there was no mention on the agenda of highly anticipated debt and other fiscal measures.

Earlier today, the People’s Bank of China launched a new lending tool to inject more liquidity into the market and support credit flow, as the bank remains under pressure to do more to hit Beijing’s economic growth target of 5% this year.

Meanwhile, China’s September industrial profits plunged, recording this year’s steepest monthly decline, due to factors such as insufficient demand and a sharp decline in producer prices.

Other steelmaking ingredients on the DCE leapt, with coking coal and coke rising 4.14% and 4.61%, respectively.

Steel benchmarks on the Shanghai Futures Exchange advanced further. Wire rod jumped 4.12%, rebar and hot-rolled coil climbed about 2.65%, and stainless steel ticked 0.4% higher.

($1 = 7.1282 Chinese yuan)

(By Gabrielle Ng; Editing by Sumana Nandy)

Beijing has sought to develop its ties with the Taliban since they took control of Afghanistan in 2021, but like all governments has refrained from formally recognizing the Islamic fundamentalist group’s rule amid international concern over its human rights record and those of women and girls.

But the impoverished country could offer a wealth of mineral resources to boost Beijing’s supply chain security although it risks becoming a haven for militant groups threatening China’s Xinjiang region and huge investments in neighbouring Pakistan.

Selling Afghanistan’s lithium, copper and iron deposits to feed China’s enormous battery and construction industries would help the Taliban prop up their economy, which the UN says has “basically collapsed”, and provide a much needed revenue stream as the country’s overseas central bank reserves remain frozen.

“China will offer Afghanistan zero-tariff treatment for 100% tariff lines,” Zhao Xing, Chinese ambassador to Afghanistan, wrote on his official X account late on Thursday, above a photo of him meeting acting deputy prime minister Abdul Kabir.

Afghanistan exported $64 million worth of goods to China last year, according to Chinese customs data, close to 90% of which was shelled pine nuts, but the Taliban government has said it is determined to find foreign investors willing to help it diversify its economy and profit from its minerals wealth.

The country exported no commodities to China last year, the data shows, but Zhao has regularly posted photos of him meeting Taliban officials responsible for mining, petroleum, trade and regional connectivity since his appointment last September.

“In the Horn of Africa, China’s Special Envoy Xue Bing said that the best way to resolve security and terrorism challenges is through economic development. I think they are bringing that same mindset to Afghanistan,” said Eric Orlander, co-founder of the China-Global South Project.

“I don’t buy the whole strategic minerals line that we hear in Washington about how China is eyeing Afghanistan’s vast lithium reserves,” Orlander added, citing the cost and security challenges involved in extracting them.

“(China’s) answer to everything is build a road, and from that economic development will lead to peace and harmony.”

Several Chinese companies operate in Afghanistan, including the Metallurgical Corp of China Ltd, which has held talks with the Taliban administration over plans for a potentially huge copper mine, and was highlighted in an August feature in Chinese state media on Chinese companies rebuilding Afghanistan.

Chinese President Xi Jinping at a Beijing summit for more than 50 African leaders in September announced that from Dec. 1 goods entering his country’s $19 trillion economy from “the least developed countries that have diplomatic relations with China” would not be subject to import duties, without giving details.

The policy was then repeated on Wednesday by vice commerce minister Tang Wenhong at a press conference in Beijing on the preparations for upcoming China’s annual flagship import expo.

Lin Jian, a Chinese foreign ministry spokesperson, confirmed on Friday the policy would apply to Afghanistan, adding it would promote mutually beneficial trade and economic cooperation.

The Afghanistan embassy in Beijing did not respond to a request for comment.

Last October, Afghanistan’s acting commerce minister told Reuters the Taliban wanted to formally join Xi’s flagship “Belt and Road” infrastructure initiative.

Kabul has also asked China to allow it to be a part of the China-Pakistan Economic Corridor, a $62 billion connectivity project connecting China’s resource-rich Xinjiang region to Pakistan’s Arabian Sea port of Gwadar.

(By Joe Cash and Mei Mei Chu; Editing by Raju Gopalakrishnan)

Read More: Taliban says it signed mining deals worth over $6.5 billion

Technical teams from both companies will work closely on exploring pelletizing using the Pilbara fines and the application of biomass.

Rio’s flagship product Pilbara blended fines are typically used to make sintered ore, used in blast furnaces to produce hot metal.

And pelletization usually requires higher grade iron ore, which is helpful for reducing carbon emissions along the steel value chain.

“We are pleased to have reached a new milestone in steel carbon reduction … the low carbon transition in the steel industry needs high-quality raw material and massive technological innovation,” said Simon Farry, head of steel decarbonization at Rio.

Upstream mining giants have accelerated cooperation with their big consumers on decarbonizing the steel value chain to cope with climate change.

Rio Tinto last year signed a MoU with China Baowu, the world’s biggest steelmaker by volume, to develop projects aimed at enabling lower grade ore to be used in low-carbon steelmaking.

It’s rival BHP Group and Chinese steel company HBIS Group Co Ltd, agreed last March to trial carbon capture, utilization and storage (CCUS) technologies at the Chinese firm’s steel mills.

(By Amy Lv and Colleen Howe)

While Beijing Antaike Information Development Co. forecasts substantial growth in demand from the renewables sector, the focus of copper optimists, it also sees an impact from a slowing Chinese economy and from buyers switching over to aluminum.

China’s demand growth in the five years up to 2030 will average 1.1%, down from 3.9% in the five years to 2025, Antaike analyst Yang Changhua said at the group’s conference in Wuhan. The copper intensity of renewables investment is falling as industries bid to reduce usage or find alternative materials, he said.

For the past half-decade, there have been a series of eye-watering forecasts for copper, largely resting on the idea that the world’s mines will struggle to keep up with a long demand boom.

Prices this year reached a record above $11,000 a ton amid emerging signs of supply tightness, but have since drifted lower as China’s economy struggles and manufacturing in the rest of the world remains soft. The metal was little changed on Friday near $9,500 on the London Metal Exchange, heading for a fourth weekly decline.

Key risks to the “peak by 2030” forecast include the future strength of China’s manufacturing exports, or the relocation of factories overseas, Yang said. He didn’t give an outlook for global copper demand.

China’s combined consumption of copper from electric vehicles plus the solar and wind industries will rise to 3.1 million tons by 2030, Yang said. That will be 26% of the nation’s total demand, up from 15% in 2023.

Read More: China copper imports climb 15% on seasonal demand, brighter outlook

Importers of lithium, graphite and cobalt for use in manufacturing in the UK will be granted access to UK Export Finance, a state body that usually helps British exporters and their buyers with financing and insurance, people familiar with the matter said. They will only be eligible for the support if they hold long-term contracts with UK exporters, a move that will benefit the defense, aerospace, electric vehicle and renewable energy industries, they said, asking not to be named discussing measures to be announced in the Oct. 30 budget.

Western countries in recent years have been stepping up efforts to secure supplies of critical minerals that are crucial to advanced manufacturing but are currently dominated by China. Reeves’s initiative next week will make it easier for UKEF to secure finance contracts for suppliers in Commonwealth countries who have large mineral deposits, such as Australia, the people said. Prime Minister Keir Starmer is holding a series of bilateral meetings on trade and economic growth at the Commonwealth heads of government meeting in Samoa this week.

Reeves is preparing to unveil a package of tax rises and further borrowing in Labour’s first budget in 14 years. She’s seeking to raise some £40 billion ($52 billion) to help fund party priorities like the National Health Service and to plug a fiscal void that she blames on her Conservative predecessors. Reeves has also been debating changing the measure of debt used to inform the country’s fiscal rules, freeing up as much as an extra £50 billion of government spending on infrastructure.

While the government didn’t specify which companies it expects the move on export finance to benefit, manufacturers such as jet engine maker Rolls Royce Holdings Plc are significant users of imported metals, and Indian firm Tata Motors Ltd. is building a battery plant in southwest England that will require lithium supplies.

Labour is also relying on attracting on an influx of private investment into the UK to get the economy firing and spur the growth needed to generate more tax income. The government said it drummed up £63 billion at its international investment summit earlier this month, though some of that had previously been committed.

On Friday in Samoa, Starmer unveiled an additional £1 billion investment in the UK property market by Aware Super, an Australian fund and Delancey Real Estate. AustralianSuper, the country’s biggest pension fund, is also preparing to bolster its international investment team in London, expecting to manage £250 billion from its London office by 2035, the UK government said in a statement.

Starmer hosted a business meeting with AustralianSuper chief executive Paul Schroder, Bank of America chair Brian Moynihan and Lloyd’s of London CEO John Neal in Samoa on Thursday.

(By Ellen Milligan)

In combined battery capacity deployed – a better indicator of battery materials demand than unit sales alone – the global electric car market expanded by 22% so far this year. 

In total, 505.6 GWh of fresh battery power hit the globe’s roads from January through August, according to data from Toronto-based EV supply chain research firm Adamas Intelligence.

The robust growth rate also comes despite a noticeable swing towards hybrid vehicles, which have inherently smaller batteries and therefore contained metal. 

The combined battery capacity of plug-in hybrid vehicles steered onto roads globally for the first time this year is up 70% versus a must more sedate pace for full electric passenger vehicles of 15%. At the same time the average battery capacity of plug-ins is also rising, up 14% this year to 23kWh, more than a third of the average full electric vehicle.

For miners supplying the EV battery industry, the news remain negative: when pairing metals demand with prices in the supply chain, declines this year are brutal. 

The latest data based on EV registrations in over 110 countries show the sales weighted average monthly dollar value of the lithium, nickel, cobalt, manganese and graphite contained in the batteries​​ of the average EV based on global end-user registrations, battery capacity and chemistries.

Put it all together and the raw materials bill for the average EV is now down to $537 compared to $1,342 in August 2023 and a monthly peak of more than $1,900 at the beginning of last year, according to Adamas Intelligence analysis.      

The downtrend is led by lithium where the sales weighted average value per EV is down 75% over the past year to $236 and cobalt, which at little over $46 is 42% below the value reached in August 2023. Manganese is the only battery raw material in positive territory this year, up 3% but the raw material is also down 8% compare to the same month last year. For anode material, graphite loadings and values have held mostly steady at just under $26 per average EV.

The value of nickel in the average EV battery is down 26% as LFP battery chemistries continue to take global markets. LFP batteries represented 42% of the global total in terms of capacity deployed in GWh in August.

That compares to a 32% share during the same month last year, more than offsetting the long-running trend towards high-nickel cathodes, and the growing popularity of NCM batteries for larger plug-in and range-extending hybrids, where the energy density of nickel-based cathodes makes more sense given the weight of these vehicles. 

For a fuller analysis of the battery metals market check out the latest Northern Miner print and digital editions. 

* Frik Els is Editor at Large for MINING.COM and Head of Adamas Inside, providing news and analysis based on Adamas Intelligence data.

If implemented, the rule change could disrupt the annual shipment of billions of dollars of gold ore and concentrate to China, the world’s top refined gold producer.

Gold ore and concentrate imports to China do not currently attract import or value added tax (VAT).

Now Chinese customs are planning to identify gold concentrate containing a combined iron and sulphur content of more than 58% as pyrite, which is subject to a 1% import tax and 13% VAT, the sources said.

Shipments of precious metals ore and concentrate excluding silver to China hit a six-month low in September, trade data showed. It dropped 22.4% to 201,004.9 metric tons from August, which was when Chinese customs revealed its plans, the sources said.

Gold ore and concentrate is the biggest chunk of this category, the sources said.

Chinese customs did not respond to requests for comment.

Higher taxes on gold concentrate and ore imports would squeeze trading margins, two of the sources said, adding that sellers of these products already faced a difficult market over the past couple of months due to the gold price rally.

Some traders have diverted their gold concentrate shipments to destinations other than China for fear of retrospective taxation, one of the sources said.

China’s gold concentrate importers expressed their opposition at a meeting in late September but customs staff refused to withdraw the proposal, the two sources said.

Supplies of industrial metals such as copper could also be impacted in China. Peru, the world’s third largest copper producer, exports a sizeable amount of copper-bearing gold concentrate, used as feedstock by some Chinese copper smelters.

If the changes to classification go ahead, Peru’s copper-bearing gold concentrate may be diverted to other countries and exacerbate a mined copper shortage in China, the sources said.

(By Julian Luk and Amy Lv; Editing by Pratima Desai and Emelia Sithole-Matarise)

Cash zinc contracts are trading at a $24.09 premium to three-month futures, in a pricing structure known as backwardation that’s a hallmark sign that spot demand is exceeding supply. The spread was trading at a discount as recently as last week, and is now at the highest level since 2023.

The zinc market has been rattled by a series of mine setbacks this year, dramatically tightening supplies of raw zinc ores known as concentrates. Demand for the metal has suffered during an industrial downturn in China and Europe, but the supply ructions have been large enough to underpin an 17% gain in zinc prices on the LME this year.

The key question among analysts and traders is whether zinc smelters — squeezed by rising raw material costs and weak end-use demand — will be forced to cut production. That could constrict spot metal supplies and fuel further price gains. The backwardation signals that buyers in the LME market are increasingly alert to that possibility.

Within the past week, one individual buyer has acquired between 50% and 80% of the readily available zinc inventories in the LME’s warehousing network, according to data from the exchange. And in the futures market, one entity has also bought up at least 40% of the main November-delivery zinc contracts, which would entitle them to scoop up more inventory than there is available in the system, if held to expiry.

“Has this tightness been accentuated by changes in trader positioning? Maybe, but there’s a fundamental basis for it because we’re simply not mining enough zinc,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, said by phone from London. “I can see why it’s happening, because on the raw-material side it’s the tightest of all the base metals.”

Backwardations can emerge quickly in individual price spreads as large buyers emerge on the LME, and they can dissipate just as rapidly if and when those inventories and futures positions are sold back into the market. But the tightness isn’t limited to near-dated months, with a steep backwardation emerging all the way out to 2027 in recent trading sessions — suggesting that investors, traders and consumers could be bracing for a longer-term squeeze on supply.

Global mine production fell by 4.2% in the first eight months of the year, data from the International Lead and Zinc Study Group showed on Wednesday. Meanwhile, refined zinc output has fallen 1%, but BMO’s Hamilton said it’s likely that more meaningful smelter cutbacks will be seen moving into next year.

Bullish investors have been betting on a slower-than-expected recovery in mined supplies following a series of cuts to production guidance, including a downward revision by Ivanhoe Mines Ltd. earlier this month, according to Zeng Tong, an analyst at Jinrui Futures Co.

The latest knock to mine supply came on Friday, as Sibanye Stillwater Ltd. said that it expects operations at its Century zinc mine in Australia to be suspended until mid-November after a bushfire damaged some equipment.

Investors might be rushing to build long positions following the Century news, said Han Zhen, an analyst at researcher Shanghai Metals Market. There is also talk about possible production cuts at European smelters due to higher electricity costs over winter, she said.

Zinc was down 0.4% at $3,126 a ton on the LME as of 1:32 p.m. in London, after climbing 2% on Tuesday. Other metals were mixed, with copper down 1.2% to $9,470 a ton, while aluminum rose 0,3%.

Column: Zinc facing supply deficit as mine output falls again

The Canadian copper producer announced Xia’s appointment along with Juanita Montalvo, a managing partner at a Cuban financial advisory firm, in its earnings statement released Tuesday.

Xia is currently at Jiangxi and served most recently as president of marketing and trading, according to First Quantum. Xia has held various roles at the company over two decades.

The appointment follows a shareholder rights agreement struck in July that prevents Jiangxi, a state-owned Chinese mining firm, from buying more stock in First Quantum or selling a shares block of 5% or larger without the Canadian miner’s consent. The three-year agreement also gave Jiangxi the right to nominate one person for consideration by First Quantum’s governance committee to the board of directors.

The standstill deal follows efforts by Canada’s government to crack down on Chinese investment in the critical minerals sector. Canada said earlier this year it would only approve foreign acquisitions of Canadian critical mineral firms in “the most exceptional of circumstances.”

One of the largest copper smelting companies in the world, Jiangxi has an 18.5% stake in First Quantum and bought an additional $212 million in shares in January.

(By Jacob Lorinc)

Latin America’s biggest economy holds 5% of the world’s uranium resources and only produces a tiny amount of the nuclear reactor fuel, according to the World Nuclear Association. Brazil’s resources rank eighth globally, well behind Australia, Kazakhstan and Canada. The last assessment of Brazilian reserves took place 40 years ago, but elevated uranium prices are reviving the nation’s ambitions to seek out new deposits.

Nuclear Industries of Brazil — or INB — is seeking to collaborate with global companies to carry out new research in regions known for their mineral potential. The state-owned company plans to call for bids from partners interested in exploring areas in Brazil’s northeast, midwest and south by year end.

“We aim to move forward 40 years in four,” INB President Adauto Seixas said in an interview. “We have already received visits from companies from Russia, India, Korea, France, Australia, the United States and China.”

Brazil’s push comes amid surging interest in uranium, with investors piling into a radioactive metal that underpins a global push to tap carbon-free energy in the form of nuclear power. Uranium prices this year peaked in early February and though they’ve since retreated, levels are still above the historical average.

The Brazilian initiative is called the Uranium and Associated Mineral Resources Prospecting and Mining Partnership Program — or Prouranio. Exploration will be in areas that hold other minerals including copper, gold and rare earth elements that occur alongside uranium. INB’s strategy includes mining already mapped areas with help from private firms.

Yet, Brazilian minerals research industry group ABPM argues that a partnership model doesn’t suit the private sector, which would want to operate independently. The group’s head, Luis Mauricio Azevedo, suggests that Brazil should open up uranium exploration and development — a move that could help boost global supplies.

“If we have the reserves we imagine, Brazil could be a storehouse of energy for the world,” he said.

Miners are already approaching INB to collaborate on developing potential uranium from its rare earth deposits. Australia’s OAR Resources signed a memorandum of understanding in August to determine the potential for some projects. Brazil produces 105 tons a year — enough to cover about a quarter of uranium the country uses to feed two nuclear reactors west of Rio de Janeiro.

Despite Brazil’s desire to go big in uranium, government bureaucracy may be a hurdle. Fertilizer producer Galvani partnered with INB to extract and process phosphate products and uranium concentrate more than a decade ago, yet the company is still waiting for permits to operate a project known as Santa Quiteria.

Galvani expects to get its first environmental license for the mine this year after Brazil’s nuclear regulator approved the location and authorities agreed to analyze the project’s environmental impacts, chief executive officer Marcelo Silvestre said. He said the operation, which could start by 2028, may produce 2,300 tons of uranium a year — enough to turn Brazil into an exporter.

Galvani expects to invest 2.5 billion reais ($438 million) in Santa Quiteria, according to the CEO, who also said the firm would consider bidding in future INB auctions.

INB is also seeking partners for production in the southeast mining area of Gandarela as well as northeast Brazil’s Lagoa Real, which would involve expanding its Caetite mine and concentration plant — the country’s only operational facility. INB plans to raise 66.7 billion reais through production partnerships over three decades.

(By Mariana Durao)

Yet prices for all three EV battery inputs have fallen to such bombed-out levels that producers are curtailing output and deferring new projects.

This is partly a problem of oversupply. Explosive price rallies in 2021 and 2022 resulted in too much new production capacity being brought online too quickly.

But it is also a problem of demand.

The transition away from the internal combustion engine has by no means ground to a halt. Global new energy vehicle sales were up by 20% year-on-year in January-August, according to consultancy Rho Motion.

Rather, the mix of vehicles being sold and the evolution of battery chemistry have dramatically changed the metals demand dynamic.

The rise of the hybrids

Pure battery electric vehicle (BEV) sales have underperformed expectations due to buyers’ concerns about limited driving range and charging infrastructure.

By contrast, hybrid and plug-in hybrid cars, which have both a battery and internal combustion engine, have soared in popularity.

The increase in global sales of BEVs slowed to 10% year-on-year in the first eight months of 2024, while plug-in hybrid (PHEV) sales jumped 46%, according to Rho Motion.

This trend has been led by China, the world’s largest EV market. The key driver is the emergence of the extended range electric vehicle (EREV), a type of PHEV that uses the gasoline engine solely to charge the battery, giving the vehicle an extended driving range of more than 1,000 kilometres (621 miles).

EREVs now account for 31% of all plug-in hybrid sales in China, according to research house Adamas Intelligence, which expects them to enjoy similar success in both Europe and the United States.

Major automakers are embracing hybrids in all forms as a relatively low-cost transition technology between gasoline and pure electric vehicles.

Hybrids don’t need the same battery power as a BEV. Adamas calculates that battery pack capacity in a PHEV is a third of that in a BEV, which means a similar-sized reduction in the amount of lithium, nickel and cobalt used per vehicle.

Other metals, however, stand to benefit from the rise of the hybrids. Platinum and palladium, which are used to clean auto exhausts, have been granted an unexpected new lease of life.

Changing chemistry

While the new energy vehicle mix is changing, so too is battery chemistry.

Lithium-iron-phosphate batteries (LFP) have become the rising stars of the battery industry, accounting for around 40% of battery demand in 2023, more than double the share recorded in 2020, according to the International Energy Agency (IEA).

As with the new extended range hybrids, the LFP revolution is being led by China, where two-thirds of EV sales used this technology in 2023, the IEA estimates.

Chinese battery makers have turned what was once regarded as a low-power technology suitable only for short city commutes into a product that can compete with nickel-manganese-cobalt battery chemistries.

China’s CATL unveiled a new break-through LFP battery at the Beijing auto show in April. The Shenxing Plus boasts a driving range of 1,000 kilometres on a single charge, effectively eliminating range anxiety.

The only critical metal input for an LFP battery is lithium. It doesn’t require either nickel or cobalt, which makes an LFP battery both cheaper and more environmentally friendly than other chemistries.

The market has taken note. Demand forecasts for nickel and cobalt use in batteries have been steadily downgraded over the last year to factor in China’s pivot towards LFP technology.

Going global

European and US automakers have until now stuck with high-nickel chemistries in their EV batteries but that may be starting to change.

Both Ford Motor and General Motors have shown interest in using CATL’s LFP technology.

Moreover, while China has been the only mass-producer of LFP batteries since the 2010s, the core patents that enabled this dominance expired in 2022.

This has sparked interest outside China.

For example, the IEA has noted a surge of LFP investment in Morocco, which is home to the world’s largest phosphate reserves. Importantly, it also holds free-trade agreements with both the European Union and the United States.

A twisting road

Li Auto’s L6 family sports utility vehicle is an example of how hybrid and LFP technologies have come together to upset preconceived notions about the EV market.

Boasting what the company calls “the latest generation of lithium-iron-phosphate battery”, the vehicle has a range of 212 kilometres in pure battery mode and a range of 1,390 kilometres in mixed battery-engine mode.

The Li6 can accelerate from zero to 100 kilometres an hour in 5.4 seconds, which lays to rest any fear that LFP batteries can’t deliver the same performance as nickel-rich batteries.

Such products are good news for the broader energy transition, offering consumers a cheap, reliable alternative route to an all-electric future.

But they challenge the idea that the global auto market will jump straight from the internal combustion engine to a pure battery vehicle.

They also defy expectations that all EV batteries need nickel and cobalt to enhance power and performance.

What’s more, the battery revolution has only just begun. Battery makers are investing heavily in research and development with the goal of developing ever cheaper, more powerful batteries.

Even lithium is at risk of substitution from sodium-ion batteries as CATL and other Chinese companies such as BYD expand capacity for the new technology.

Sodium-ion batteries could cost up to 20% less than incumbent technologies and can be used for both stationary storage and compact urban EVs, according to the IEA.

They use no lithium but, depending on chemistry, need both nickel and manganese, which foreshadows the potential for more metallic twists in the unpredictable electric vehicle revolution.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Louise Heavens)

China, which buys almost three-quarters of global seaborne iron ore, is likely to import as much as 120 million metric tons this month, according to vessel-tracking and port data.

This would be a strong rise from the official customs number of 104.1 million tons in September, and also represent an all-time high, eclipsing the previous record of 112.7 million in July 2020.

The strength in iron ore imports stands in sharp contrast to the softness in steel production, which slid for a fourth consecutive month in September, dropping to 77.07 million tons, down 1.1% from August and 6.1% from the same month in 2023.

China’s steel output for the first nine months of the year was 768.48 million tons, down 3.6% from the same period in 2023, according to data released by the National Bureau of Statistics last week.

If there is a positive from the September steel production data, it’s that the pace of decline slowed from the 10.4% on-year drop in August.

Whether the drop in steel output can be lifted to show an increase in the next few months largely depends on whether steel mills see rising demand on the back of Beijing’s stimulus efforts.

September was too early for any kick higher in steel demand, given the major stimulus announcements were just before month end.

However, if the measures to boost the ailing property sector do bear fruit, it’s likely to only result in an increase in actual demand in 2025.

This makes the rush to buy more iron ore seem somewhat premature.

Price driven imports

October’s imports are on track to reach 120.5 million tons, according to data compiled by commodity analysts Kpler, while LSEG analysts expect arrivals of 117.3 million tons.

It’s likely that steel mills and traders took heart from the stimulus efforts announced by Beijing, but lower spot prices for iron ore may also have boosted buying.

The price of Singapore Exchange contracts dropped to the lowest in 22 months in September, hitting $91.10 a ton on Sept. 10.

They then traded in a narrow range around that level until the end of the month, meaning that much of the iron ore arriving in October would have been secured at relatively low prices.

Iron ore prices did surge in the wake of the stimulus announcements, reaching a three-month peak of $110.55 a ton on Oct. 7, before easing back to end at $104.21 on Monday.

A more sober reflection of when China’s stimulus is likely to actually result in increased steel demand may have led to iron ore prices moderating, but it’s worth noting they have still held onto most of the gains made since the October low.

The risk is that the strong import volumes end up being added to inventories, which could act as a drag on further price gains even if steel output does start to recover.

Port inventories monitored by consultants SteelHome rose in the week to Oct. 18, hitting 147.2 million tons, up from a five-month low of 145.8 million the prior week.

Stockpiles have risen strongly in the past 12 months, rising from a seven-year low of 104.89 million tons in the last week of October 2023 to a recent high of 151.8 million in late July.

(The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.)

(Editing by Lincoln Feast)

Prices for alumina have surged by more than 20% so far this month and are now within striking distance of the record of $707.75 set in 2018, according to pricing agency Fastmarkets Ltd.

The rally has been building all year due to a string of disruptions along the sprawling global supply chain, from Australia to Jamaica. To make aluminum, raw ores known as bauxite are refined into alumina, which is then smelted into pure metal. The latest shock came earlier this month, when Guinea blocked Emirates Global Aluminium’s bauxite exports, sowing panic among buyers who are now scrambling to snap up alumina supplies.

As a result, the aluminum industry in China — the world’s biggest producer of the metal used in everything from drink cans to airplane parts — is coming under strain. China relies heavily on Guinea for bauxite, and smelters are being squeezed as alumina costs soar while prices for the finished product haven’t risen as quickly.

In the worst-case scenario, aluminum smelters could need to curtail production to limit losses, tightening metal supplies and underpinning a rally in aluminum prices. Analysts are hopeful that alumina output will rebound before that happens, but conditions on the ground are deteriorating fast.

Chinese port inventories of alumina have plunged to the lowest levels since at least 2015. With spot cargoes disappearing fast, traders and smelters have been approaching other sellers in western markets that they don’t usually buy from, according to people familiar with the matter. In some cases buyers are queuing up outside alumina plants, according to industry researcher Mysteel Global.

Trading in alumina futures has surged in Shanghai, bringing in a new cohort of eager buyers as smelters and physical traders dash to obtain dwindling supplies.

“For months, the market has been one accident or event away from a major price move,” Duncan Hobbs, head of research at metals trading house Concord Resources Ltd., said by phone. “The Guinea situation has provided the catalyst for another step-up in prices, and it sets the stage for a tighter market and a deeper deficit.”

The latest turmoil offers a fresh reminder that a handful of companies and countries have outsized influence in one of the world’s most ubiquitous metals.

A wave of Chinese investment in Guinea over the last decade has led to surge in bauxite production in the West African country. China’s industry — which produces about 60% of the world’s alumina and aluminum — now sources 70% of its import needs from the nation.

Concerns about Guinea’s dominance in bauxite rose to the fore during a coup in 2021. Since then, the nation’s ruling military junta has sought to leverage its mineral wealth by compelling miners to invest in alumina plants in-country as well.

“The export ban is likely to be somewhat of a shakedown of mining companies to both increase royalties on bauxite, and to accelerate investment in promised alumina refineries in Guinea,” BMO Capital Markets analysts Colin Hamilton and George Heppel said in an emailed note.

Emirates Global Aluminium signed a preliminary deal to build an alumina refinery in Guinea in June, working alongside Aluminium Corporation of China, commonly known as Chalco. But by building additional alumina refining capacity there, the companies could constrain bauxite supplies that would otherwise go to their existing alumina plants.

EGA is still seeking clarity on the exact reason for the stoppage, but it believes there’s no legal justification for the action based on its progress in developing the alumina refinery, the company said in an emailed statement. Colonel Kaba Camara, a spokesperson for Guinea’s General Directorate of Customs, declined to comment on the matter.

“This growing dependence on Guinea leaves room for market shocks,” Morgan Stanley analysts led by Amy Gower said in an emailed note. “While suspensions like this are often short-lived, it highlights the thin safety buffer in the bauxite market.”

The consensus among analysts is that recent disruptions in Australia and elsewhere will be resolved before smelters will need to start shutting down, particularly due to the hefty costs involved in doing so. But further disruptions shouldn’t be ruled out, according to Concord’s Hobbs.

“In the next 12 months the alumina market balance should ease significantly, and it’s hard not to take the fundamental position that prices will fall,” he said. “But the alumina market is starting from a much deeper deficit than appears popularly appreciated, so there will be more catch-up to do to make the market square again.”

Aluminum prices rose as much as 1.9% to $2,644 on the London Metal Exchange on Tuesday, while other metals were mixed.

Read More: China to extend record aluminum output amid ample power

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) surrendered some earlier losses to end daytime trade 0.52% lower at 762 yuan ($107) a metric ton.

The benchmark November iron ore on the Singapore Exchange was 0.98% lower at $100.8 a ton, as of 0722 GMT.

It fell below the key psychological level of $100 a ton to hit an intraday low at $99.8 earlier in the session.

Transaction volumes of construction steel products slipped nearly 8% from the day before to 122,500 tons on Monday, data from consultancy Mysteel showed.

Steel benchmarks on the Shanghai Futures Exchange fell. Rebar shed 0.15%, hot-rolled coil lost 0.82%, wire rod slid 3.04% and stainless steel fell 1.37%.

“After macro sentiment temporarily cooled, speculative demand has decreased significantly while the recovery of rigid demand is limited,” analysts at First Futures said in a note.

“Rebar is likely to build up inventories in November when demand will be weighed with weather getting colder (in the northern regions).”

Beijing has unveiled a raft of stimulus measures since late September to spur the economy and arrest price and sales slump in its property market.

That had lifted sentiment in the commodities markets, pushing iron ore and steel prices higher by 12% and 6%, respectively.

Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 1.22% and 0.75%, respectively.

Despite broad loss in the ferrous market, some analysts believe prices will move within a relatively narrow range as the market awaits further signals from an important meeting which will possibly be held later this month.

($1 = 7.1214 Chinese yuan)

(By Amy Lv and Mei Mei Chu; Editing by Rashmi Aich and Mrigank Dhaniwala)

The forecasts from Worldsteel show diverging prospects between China — for two decades the major driver of global demand growth — and steel hot spots in the rest of the world, from South Asia to the Middle East and Latin America.

“China’s at the structural peak in terms of steel demand,” Simon Trott, chief executive for iron ore at Rio Tinto Group, the world’s largest supplier of the steelmaking ingredient, said at an address in Melbourne on Friday. “The world will need more steel in the next 20 years than it’s used in the last 30, despite the sort of growth we’ve seen in China.”

Worldsteel sees Chinese consumption racking up a fourth year of declines in 2024 to 869 million tons, while demand in the rest of the world rises 1.2% to reach 882 million tons. China’s share will shrink further in 2025, according to the association.

The figures show how the end of China’s decades-long infrastructure and property boom is reshaping the nation’s steel consumption. But they also suggest another reason why China’s exports have surged so dramatically this year to their highest since 2016: There’s rising demand elsewhere.

India’s market will grow by 8% this year — after rising 14% in 2023 — to 143 million tons, while other emerging and developing economies will see growth of around 7% for a second year running, according to Worldsteel.

The rest of the world last surpassed China’s share of demand in 2018. Worldsteel acknowledged risks to its forecasts due to Beijing’s recent barrage of stimulus measures to support growth, citing a “growing possibility of more substantial government intervention and support for the real economy, which could bolster Chinese steel demand in 2025.”

Read More: China steel demand plateaus at a decent level, Vale boss says

A gauge of strength of the greenback was up about 0.4% and touched the highest since early August. That’s made commodities including base metals less appealing for investors holding other currencies.

Copper and zinc advanced earlier after reductions in two key rates at Chinese banks. The cuts were larger than economists had expected, and they followed the central bank cutting its key policy rate in September. China’s top leadership had called for lower interest rates and stronger measures to aid the ailing property market, a key source of demand for metals like steel, copper and zinc.

Industrial commodities have had a volatile few weeks as investors reacted to a flurry of Chinese government announcements on steps to aid the economy and help it reach the 5% growth target for this year.

Copper fell 0.8% to $9,552 a metric ton by5:08 p.m. local time on the London Metal Exchange, while zinc slipped 0.7% and aluminum was down 0.6%.

Read More: China to extend record aluminum output amid ample power

After the port’s inauguration in mid-November, it will initially cover a direct route to Shanghai and then may ship to other points in the Asian market, depending on demand, said Carlos Tejada, general manager of Hong Kong-based Cosco’s local subsidiary, Cosco Shipping Chancay Peru.

“At the end of November, we will begin the stage known as ‘test conditioning,’ which we expect to run until May. However, during this soft launch phase, we can already handle actual cargo, with two direct vessels per week,” the executive told reporters following a Peruvian-Chinese business forum.

Tejada said that cabotage routes will be opened with smaller ships from Colombia, Ecuador and Chile, whose cargo will later be shipped to Asia from Chancay, initially in ships carrying up to 14,000 containers, which will then be progressively increased to larger vessels holding up to 24,000 containers.

Cosco Shipping Ports owns and will operate the port with a 60% stake, with the remaining 40% held by Peruvian miner Volcan, which is controlled by Glencore.

(By Marco Aquino and Brendan O’Boyle; Editing by Adam Jourdan)

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.

The ministry said in a statement that relief would be granted under specific and exceptional circumstances. The measure is designed to help firms adjust their supply chains to cope with the new tariffs, it said in a statement.

Canada announced the measures in late August, citing China’s intentional, state-directed policy of over-capacity. A 100% surtax on EVs was imposed on Oct. 1 while a 25% surtax on steel and aluminum products comes into effect on Oct. 22.

“To ensure that Canadian industry has sufficient time to adjust supply chains, remission will provide relief … under specific and exceptional circumstances,” the ministry said.

“The federal government will consider the appropriate duration of remission, with intent to provide it on a transitional basis only in most cases,” according to the ministry.

Remission would be considered in the following cases:

• Situations where goods used as inputs, or substitutes for those goods, cannot be sourced either domestically or reasonably from non-Chinese sources.
• Where there are contractual requirements, existing prior to Aug. 26, 2024, requiring businesses to purchase Chinese inputs into their products or projects for a specified period of time.
• Other exceptional circumstances, on a case-by-case basis, that could have significant adverse impacts on the economy.

Remission will not be granted for goods intended for resale in the same condition to the United States.

(By David Ljunggren; Editing by Mark Porter)

“This is like the early days in Chile, the Escondida discoveries and so on,” he said at the Gold Forum Americas in Colorado Springs, referring to Pakistan’s untapped discovery potential.

Bristow said supply constraints for gold and copper and the strong demand are pushing prices higher, while both suffer from weak development pipelines. The company is expanding its Lumwana copper mine in Zambia and Reko Diq in Pakistan, both of which will add to its copper output while driving local economic development.

“Copper has no substitutes,” Bristow said. “It is as strategic as gold is precious, and we’re bringing new copper projects online just as the supply squeeze hits.”

Bristow also addressed the suspension of operations at Barrick’s Porgera gold mine in Papua New Guinea last month due to local clan violence. He reinforced the company’s commitment to making a positive social and environmental impact, especially in emerging markets.

Watch the final part of Bristow’s three-part interview with The Northern Miner’s western editor, Henry Lazenby.

China currently dominates the world’s supply of rare earths, accounting for approximately 70% of the global mine production and as much as 90% of the refined output.

The announcement was made this week at an international mining conference held in Tianjin, China, where a delegate led by Alparslan Bayraktar, Turkey’s minister of energy and natural resources, met with his Chinese counterpart Wang Guanghua to complete the MOU signing.

“Critical minerals, which are indispensable for high-tech products, have become important raw materials that shape the policies of countries. Investing in critical minerals and rare earth elements plays an important role in our energy transformation vision,” Bayraktar said during the conference.

“In this context, we aim to establish an industrial facility that will purify 570,000 tonnes of rare earth elements annually in order to bring the world’s second largest rare earth element reserve, which we discovered in Eskişehir, to our economy.”

The agreement follows an earlier MOU focused on cooperation in energy transformation signed during a visit by Bayraktar in May. The Turkish government had hoped that the rare earth mining agreement could encourage Chinese companies including BYD, the world’s biggest maker of electric cars, to consider producing batteries following a recent deal to make EVs in the country, Bloomberg sources said last month.

During this week’s visit, Bayraktar also met with the vice president of CNOS, one of China’s leading nuclear companies, to discuss possible opportunities for modular reactors, and the chairman of SPIC, one of Chinese largest energy companies, regarding potential renewable energy partnerships.

“In today’s world, where the global mining industry is going through a critical period, joint projects to be developed between China and Türkiye in the field of mining have great potential,” Bayraktar said in a follow-up statement on his official X account.

The Chinese cellmaking giant, through its subsidiary CBL International Development, formed the venture with government-owned Indonesia Battery Corporation, the companies said in a statement. The project in Karawang, West Java, aims to scale up battery production to 15 gigawatts a year.

The move marks an important step toward Indonesia’s goal to build out a complete supply chain for electric vehicles, a key aim launched by outgoing President Joko Widodo. The government has looked to leverage its vast production of nickel, a key ingredient for some batteries, to draw in foreign investors to the EV sector.

Earlier this year Hyundai Motor Group and LG Energy Solution Ltd. opened the first-ever battery cell plant in the country, while China’s BTR New Material Group launched an anode material plant.

(By Eddie Spence)

The London Metal Exchange (LME) cash price, indexed to Platts benchmark Australian alumina assessment, closed Wednesday at $633.35 per metric ton, lifting the ratio to the aluminum price to almost 25%.

The alumina-aluminum ratio was just 15% at the start of 2024, when alumina was priced at $350 per ton.

A series of supply disruptions have driven the alumina price higher this year. The trigger for the latest price jump was news of export problems in Guinea, the major import source of bauxite for China’s alumina refineries.

The physical alumina market is undeniably tight but the explosive nature of the price action also signals a speculative frenzy on the Shanghai Futures Exchange (ShFE).

Shanghai boom

Nearly 25 million tons were transacted on the ShFE alumina contract on Wednesday, a record daily high and equivalent to almost a fifth of global annual production.

Open interest has also soared to life-of-contract highs as investors have bought into a steadily rising market.

The exchange adjusted both trading limits and margins on Thursday, imposing a percentage point premium on speculative positions relative to industrial hedge positions.

This is standard operating procedure for China’s exchanges in the face of speculative surges such as that currently washing into the Shanghai alumina market.

This sort of futures price volatility is a new phenomenon for the alumina market.

Both the LME and its US peer CME Group offer alumina contracts but neither is liquid. The explosive growth in the Shanghai contract, by contrast, has changed the dynamic between paper and physical markets since trading began in June last year.

This is the second bout of turbulence on the Shanghai market after a massive price spike in January, also due to concerns about Guinean bauxite supply.

All eyes on Guinea

The price sensitivity to events in Guinea highlights how dependent China’s alumina refineries have become on West African bauxite.

China’s bauxite mining sector has been hit by multiple waves of environmental inspections, limiting domestic supply and encouraging more alumina refineries to look overseas for their raw material.

Imports of Indonesian bauxite stopped early 2023 after the Indonesian government banned exports in a drive to force its miners downstream into refining and smelting.

Guinea has fast emerged as China’s primary bauxite supplier. Imports doubled between 2000 and 2023 to almost 100 million tons and were up by another 13% in the first eight months of this year.

The January alumina panic was down to an explosion at an oil terminal in the Guinean port of Conakry. This time around it’s news that a local subsidiary of Emirates Global Aluminium has had its bauxite exports suspended by customs.

Although wildly exaggerated, the price reaction in Shanghai is logical, given the lack of alternative bauxite supply and tighter conditions in the alumina market itself.

Supply hits

Alumina supply has taken multiple hits this year.

US producer Alcoa announced in January the permanent closure of its Kwinana refinery in Australia. The ramp-down was scheduled to be completed by the third quarter.

In May Rio Tinto declared force majeure on deliveries from its refineries in Queensland due to restricted gas capacity levels.

Century Aluminum’s operations in Jamaica were briefly interrupted by Hurricane Beryl in September and South32 has flagged concerns about its Australian operations due to conditions on its operating licence required by environmental regulators.

Meanwhile, Chinese demand for alumina has been growing strongly as the country’s smelters have benefited from improved power supply, particularly in the hydro-rich province of Yunnan.

National aluminum output rose by 4.4% year-on-year in the first eight months of 2024 with annualized run-rates increasing by almost 1.5 million tons since December.

That said, China at a national level doesn’t seem to be physically short of alumina since it continues to export significant quantities to Russia.

Indeed, exports to Russia surged by 41% year-on-year to 1.0 million tons in January-April, turning China from net importer to net exporter of the intermediate product.

Future(s) disruption

But physical availability is not the same as exchange availability.

ShFE alumina stocks have dropped by more than half since June to 103,416 tons. The result is time-spread tightness with the premium for cash relative to forward contracts flaring wider this week.

Short-position holders’ ability to deliver physical material will depend on how much alumina is located at ShFE’s four delivery points in the provinces of Shandong, Henan, Gansu and Xinjiang.

Much also hangs on how serious the threat of disruption to Guinean bauxite shipments is. The January scare quickly subsided and there’s no indication the latest incident is the harbinger of a national change of policy around exports.

What has changed, however, is the reaction time to such events.

Before the arrival of the Shanghai futures contract, spot alumina was priced by physical cargo transactions, which can be few and far between in a market dominated by yearly supply contracts.

Now a headline from Guinea can move the futures price in seconds, creating a disconnect between paper and physical markets.

This added volatility is going to make the previously tranquil alumina market a much more turbulent place.

It’s also going to make smelter costs much more unpredictable with a potential knock-on impact on the price of aluminum itself.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Emelia Sithole-Matarise)

Chinese dominance over critical minerals used in technologies like smartphones, electric vehicles (EVs), and solar power has become a growing concern for the U.S. and other Western countries.

Currently, China refines 68% of the world’s nickel, 40% of copper, 59% of lithium, and 73% of cobalt, and is continuing to expand its mining operations.

This graphic by Visual Capitalist Elements visualizes the total cobalt supply from the top 10 producers in 2030, highlighting China’s dominance.

China’s footprint in Africa

Cobalt is a critical mineral with a wide range of commercial, industrial, and military applications. It has gained significant attention in recent years due to its use in battery production. Today, the EV sector accounts for 40% of the global cobalt market.

The Democratic Republic of Congo (DRC) currently produces 74% of the world’s cobalt supply. Although cobalt deposits exist in regions like Australia, Europe, and Asia, the DRC holds the largest reserves by far.

China is the world’s leading consumer of cobalt, with nearly 87% of its cobalt consumption dedicated to the lithium-ion battery industry.

Although Chinese companies hold stakes in only three of the top 10 cobalt-producing countries, they control over half of the cobalt production in the DRC and Indonesia, and 85% of the output in Papua New Guinea.

Given the DRC’s large share of global cobalt production, many Chinese companies have expanded their presence in the country, acquiring projects and forming partnerships with the Congolese government.

According to Benchmark, Chinese companies are expected to control 46% of the global cobalt mined supply by 2030, a 3% increase from 2023.

By 2030, the top 10 cobalt-producing countries will account for 96% of the total mined supply, with just two countries—the DRC and Indonesia—contributing 84% of the total.

Iron ore futures fell more than 5% to trade below $100 a ton in Singapore, while tin, zinc and nickel paced declines for non-ferrous metals on the London Metal Exchange.

China will expand a program to support the completion of unfinished housing projects to 4 trillion yuan ($562 billion), Housing Minister Ni Hong said at a briefing on Thursday. That nearly doubles the scale of spending as Beijing bids to ease the real estate crisis, but investors had been hoping for more.

“The property policies are focused on resolving the backlog of housing inventory, which doesn’t really help much with steel demand in the short term,” said Zhou Minbo, an analyst with GF Futures Co.

Iron ore had rallied from a two-year low below $90 in late-September to above $110. But prices have faded as a series of government briefings on economic policy fell short of expectations. China’s economy is still under pressure, with its third-quarter growth likely to be at its weakest pace in six quarters, according to a Bloomberg survey.

Investors are placing too much expectation on government announcements of stimulus, said Han Jing, an analyst with SDIC Essence Futures Co. There has been a clear shift in policies, but the scale and the pace will become clear more gradually, he said.

Iron ore is down by more than a quarter this year, and pressure isn’t coming just from weaker Chinese demand. Relatively strong supply has been underscored by quarterly output tallies from the big three miners this week, with Brazil’s Vale SA pushing its production to the highest since 2018.

Iron ore futures were trading down 4% at $100.60 a ton as of 12:36 p.m. London time. Copper was 0.5% lower at $9,514 a ton on the LME, having earlier hit a three-week low of $9,435.50 a ton. Tin fell 2.4%, while nickel and zinc were more than 1% lower.

Read More: World’s top two iron ore miners raise output even as China slows

Rio’s third-quarter output edged up about 1% from a year earlier, while Brazil’s Vale beat estimates to churn out its highest volume since late-2018, ahead of a dam-collapse disaster that triggered years-long disruptions.

Iron ore demand in top buyer China remains at risk due to a slump in its metals-intensive property sector, although that’s been partially offset by some corners of the manufacturing industry as well as surging exports of steel. Iron ore futures are down nearly a quarter this year as supply outpaces demand.

“China’s economic recovery has been uneven, prompting more government support to sustain growth,” Rio said in its production report. “As the economy transitions from the property sector to new growth areas, future commodity demand will turn more reliant on advanced manufacturing, including electric vehicles, and power infrastructure.”

The world’s top iron ore miners continue to beef up supplies, with their large-scale operations safeguarded by per-ton costs that remain far below current spot levels. BHP Group Ltd., the third-biggest, reports its quarterly output on Thursday this week.

Vale’s production of 91 million tons for the quarter surpassed output from Rio Tinto’s mines in the Pilbara region at 84.1 million tons. Rio held its full-year guidance for iron ore at 323 million to 338 million tons, while Vale said it expects to produce between 323 million and 330 million tons.

“Cost pressures in the Pilbara continue to be a small headwind” for Rio, Jefferies analysts including Christopher LaFemina said in a note. Iron ore “should be a massive, underappreciated cash cow business for Vale,” he said in a separate note.

Rio’s shares were trading 1.8% lower in Sydney at 1:44 p.m. local time.

Support measures

The commodities world is closely watching what China does next to support its slowing economy, with all eyes on a briefing by the housing minister on Thursday which should give more detail on plans to tackle the housing slump. Steel demand in China is expected to fall 3% this year, according to the World Steel Association.

Meanwhile, Rio’s copper output in the quarter slipped 1% from the year before, while bauxite output rose 8% and aluminum was down 2%.

On copper, Rio said that “pent-up demand” in China returned in the third quarter, as fabricators held back from buying amid high prices in the prior period. “Demand in the rest of world was mixed, with strong performance in developed Asia offset by weakness in Europe,” it said.

More coming

Rio is ramping up production across its traditional iron ore and copper portfolio. Its largest project is the Simandou iron ore mine in Guinea, which will deliver first ore next year and ramp up to 60 million tons per annum soon after.

The London-based miner also said its $2 billion Western Range iron ore project in the Pilbara was 80% complete. Rio is undertaking studies of five other projects that would add another 40 million tons of supply.

Iron ore still accounts for around two-thirds of Rio’s revenue, but the group is diversifying into other commodities including lithium. Earlier this month, it announced a $6.7 billion takeover of Arcadium Lithium Ltd., marking its return to deal-making after more than a decade.

(By Paul-Alain Hunt)

National output is expected to rise 3% in the fourth quarter from a year ago to 11 million tons, according to Shanghai Metals Market. The forecast assumes that smelters in Yunnan will escape production cuts for the first time in four years due to abundant electricity supplies.

China’s smelters, which account for about half of the world’s aluminum, churned out a record 3.69 million tons in August, according to the research firm, whose figures differ slightly from official data. September is likely to show a bit of a dip before gains resume, culminating in 3.72 million tons in December, SMM said.

Demand has been healthy despite a slowing economy due to the lightweight metal’s burgeoning applications in clean energy and power transmission. But producing aluminum is notoriously electricity-thirsty. In Yunnan, the province that accounts for about 12% of China’s supply, smelters rely on hydropower, which has been pinched in recent years by drought.

But this year, an increasingly fickle climate has delivered heavy rains that should keep reservoirs full over the drier winter months. Hydro generation in the first eight months of the year surged 22% to 882 billion kilowatt hours. China has also built enormous stockpiles of coal, its mainstay fuel, which mitigates the risk of outages at smelters elsewhere.

The government’s planning agency said last week that China has enough coal to ensure adequate heating supplies over the colder months. In Yunnan, the local authorities won’t restrict power supplies to aluminum smelters over the winter and spring due to ample supplies of hydropower and coal, the official Xinhua News Agency reported at the end of last month, citing the region’s grid company.

Still, China will be glad for the extra metal. The market for aluminum will remain tight due to rising consumption from electric vehicles and solar power, as well as the impact of the government’s recent barrage of economic stimulus, said SMM analyst Li Jiahui.

That’ll keep prices, which hit a two-year high in May, at an elevated level, she said. Inventories, meanwhile, have slumped more than 20% from their peak in March to 656,000 tons, according to SMM.

Output growth is expected to slow to 2% next year as China runs up against its capacity cap of 45 million tons, said Li. The nation is forecast to end 2024 with production rising by 3.9% to 43.1 million tons, according to SMM.

Read More: Aluminum squeeze unravels on LME, easing pressure on sellers