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Glencore's 2022 cobalt production up, along with oil, nickel, ferrochrome
Mining and marketing company Glencore produced 40% more cobalt last year, along with 16% more oil, 5% more nickel and 1% more ferrochrome.
Although coal production of 110-million tonnes was 6.7-million tonnes higher, on a like-for-like basis, overall group coal production fell by 7%, primarily owing to wet weather challenges and an extended community blockade in Colombia, where Glencore now owns 100% of Cerrejón.
Following the restart of the Mutanda mine in the Democratic Republic of Congo (DRC), the London- and Johannesburg-listed company last year produced 43 800 t of cobalt, 12 500 t more than in 2021.
Entitlement interest oil production of 6.1-million barrels of oil equivalent was 0.9-million barrels higher than 2021 on a full year’s production from the Alen gas project in Equatorial Guinea.
Own sourced nickel output of 107 500 t was 5 200 t higher than 2021 on Koniambo mine in New Caledonia running two production lines for most of 2022 and the absence of a maintenance shut at Australia’s Murrin Murrin, which was partially offset by lower production at INO caused by strike action in Canada and Norway.
Attributable ferrochrome production of 1 488 000 t was 1% up on that of 2021.
Copper production of 1 058 100 t was 12% down on 2021, owing to the sale of Ernest Henry mine in Australia, ongoing geotechnical constraints at Katanga in the DRC, planned mining sequence changes at Collahuasi in Chile, and a lower contribution from Mount Isa in Australia.
Zinc production of 938 500 t was 16% lower on the disposal or cessation of South America operations, closure of Matagami mine in Canada, and lower volumes from Mount Isa as Lady Loretta approaches the end of its mine life.
“Overall, 2022 production volumes were in line with our revised guidance from October 2022, with final quarter sequential production increases delivered across most of our key commodities, including copper, zinc, nickel and coal,” Glencore CEO Gary Nagle stated in a release to Mining Weekly.
“During the year, however, we saw a mixed overall production performance. Copper and zinc volumes reflect the base effect of asset sales, notably Ernest Henry and Bolivia, Katanga’s geotechnical constraints and supply chain headwinds in Kazakhstan.
“Nickel volumes benefitted from operating two lines at Koniambo for the majority of the year, partially offset by Canadian industrial action.
“Overall coal volumes rose during the year with the acquisition, in January 2022, of the balance of Cerrejón that we did not already own, however, on a like-for-like basis, group production actually declined by almost nine-million tonnes (7%), primarily due to abnormally wet weather,” Nagle added.
REALISED COAL PRICING
The average Newcastle coal settlement prices for 2022 was $360/t. After applying a portfolio mix adjustment of $115/t to reflect, for example, movements in the pricing of non-Newcastle quality coals, coking coal margins and the lag effect of 2021’s fixed-price contracts, an average thermal-equivalent realised price of about $245/t can be applied across all coal sales volumes, Glencore stated.
“Realised coal prices were higher than our forecast,” Barclays Equity Research stated in a note.
Fourth-quarter production beat the forecast of Morgan Stanley Research as well as its consensus estimates across coal, copper and zinc by 5% to 8%.
“We expect shares to outperform peers on the back of today's results,” Morgan Stanley added in a note.
Good grade uplifts Harmony’s gold output
Despite the ongoing electricity shortages and supply chain disruptions, the total gold production of Harmony Gold has increased quarter-on-quarter, the Johannesburg- and New York-listed company, which will be presenting at next week’s Investing in African Mining Indaba in Cape Town, stated on Wednesday.
The quarter-on-quarter production increase was ascribed mainly to improved underground recovered grades mined during the second quarter of Harmony’s financial year 2023, which were higher than the 5.45 g/t to 5.60 g/t guided earlier this year. Underground recovered grade guidance for the full year remains at between 5.45 g/t and 5.60 g/t, however.
Production guidance for the full financial year 2023 remains at from 1 400 000 oz to 1 500 000 oz, with all-in-sustaining costs forecast to be below R900 000/kg, as has been achieved in the six months to December 31.
The 47 000-employee Harmony, which has nine underground mines, one openpit mine and several surface operations in South Africa, is this country’s largest gold producer by volume.
Outside of South Africa, it mines in Papua New Guinea, where it is also developing the Wafi-Golpu gold/copper project, and last year acquired Eva Copper in Australia, where feasibility studies are underway into what is a fully-permitted, near-term copper/gold project in northern Queensland.
EXPANSION OF TAILINGS FACILITY
Meanwhile, all the necessary permits and approvals have been received for the expansion of the Kareerand tailings storage facility at Mine Waste Solutions, a low-risk, low-cost surface operation, near Stilfontein, in North West province, which is expected to produce about 100 000 oz/y of gold and add 16 years of mine life to the operation.
Following the conclusion of the Eva transaction in December, feasibility studies are underway into this fully-permitted, near-term copper/gold project in Northern Queensland, Australia, which is fully permitted, with the results of the studies expected within 12 months. Alongside Wafi-Golpu, Eva Copper introduces the prospect of near-term copper into the portfolio.
NEW APPOINTMENTS, TWO VACANCIES
With immediate effect, Harmony’s South Africa and Southeast Asia operational executive teams have been restructured as regional executive management teams under the leadership of Beyers Nel as group chief operating officer operations. From 2016 Nel held the position of chief operating officer of the South African operations.
In addition, a process is under way to recruit two regional executive operating officers covering South Africa and Southeast Asia, who who will report to Nel, and the new business development and growth function has been strengthened under the leadership of Johannes Van Heerden as group chief operating officer of business development and growth.
Van Heerden, who joined Harmony in 1998 and who has been chief executive officer Southeast Asia since 2008, is now dedicated fully to business development and growth, with focus areas including leading Eva Copper into development, progressing Wafi-Golpu, and pursuing further growth opportunities in Africa, Southeast Asia and Australia.
South Africa well on way to unlocking incredible base metals potential – Orion
Emerging production hubs in the Northern Cape are opening the way for South Africa to be a producer of future-facing ‘green’ metals to support the global energy transformation and to help mitigate against climate change.
The two emerging production hubs are the Prieska Copper-Zinc Mine and the Okiep Copper Project.
Both are the outcome of the vision of the Sydney- and Johannesburg-listed Orion Minerals, which is now well on its way to achieving its goal of unlocking what it describes as incredible base metals potential in the Northern Cape.
Following the securing of a funding package to progress pre-development at Prieska Copper-Zinc and the completion of permitting and early stage funding for Okiep Copper, stakeholders are on standby for the imminent transition to mine development and production.
The funding arrangements include the introduction of South Africa’s State-owned Industrial Development Corporation (IDC) as an Okiep development partner, in addition to being a Prieska funder.
The combined pre-development funding by Triple Flag of Canada and the IDC for Prieska now totals R350-million-plus, allowing for trial mining and underground dewatering to help bring about early works bankable feasibility study completion by mid-year.
“Orion is entering an exciting phase ,” Orion CEO Errol Smart stated in the December quarterly release to Mining Weekly.
Base metals prices continued their upwards trajectory during the December 2022 quarter on the back of relatively bullish sentiment, although the movement was not uniformly upwards.
Bank of America commodity strategists believe copper could rally to $12 000/t in the second quarter of 2023, given the right set of circumstances.
Fitch Ratings, however, have kept their copper assumptions unchanged, reflecting “softer market sentiment linked to the global economic slowdown in 2023, offset by supportive short- and medium-term supply-demand drivers”. The same also remains the case for zinc, noting “smelter and refining bottlenecks that kept the market tight in 2022 will continue in 2023, despite growing mine supply”.
Concentrates surpluses will remain until 2024, when new Chinese smelting capacity comes on stream, alleviating refined metal scarcity.
At Prieska, preparations are on schedule to allow dewatering to begin during this quarter in a modular form that allows for scale-up should the need arise and sufficient funding become available.
At Okiep, the water use licence application process began in November with the public participation process to remain open until mid-February, after which submission to the Department of Water and Sanitation can proceed.
New partnership enabling South African lithium pioneer to go full throttle
Battery metals investment and exploration company Marula Mining, which is delivering its first shipment of lithium ore from its Blesberg lithium and tantalum mine in the Northern Cape, has received a funding boost by clinching a partnership with Q Global Commodities (QGC).
As a majority shareholder and major investor in three future metals projects, QGC is set to fund Marula and bolster the value of the assets of this Aquis Stock Exchange-listed company that also has interests in the Nkombwa Hill niobium and tantalum, rare earth elements and phosphate project in Zambia and the Kinusi copper mine in Tanzania. Marula is also exploring opportunities to admit its shares to trading on the London AIM and Kenya’s Nairobi Securities Exchange.
“We want to make sure this is a company that we can all look to for massive growth and future profits,” QGC CEO Quinton van der Burgh stated in a release to Mining Weekly.
QGC sees itself as being able to add considerable value with a background of having brought more than 47 projects to mining stage and having nine mines under management.
“We believe Marula is a big play and we intend to throw a lot of our time and efforts to get it there during this year,” said Van der Burgh, who is proposed to be appointed chairperson of the board of directors.
The reprocessing of the stockpiles is providing a good base from which to undertake broader exploration and eventual hard rock mining.
“With Quinton, we can now go full throttle,” said Marula Mining CEO Jason Brewer.
Marula is targeting opportunities in East Africa, Central Africa and Southern Africa that can generate positive returns for all stakeholders.
“Our board and management team aims to establish Marula as a socially and environmentally responsible, sustainable, and profitable producer of critical metals and commodities that are of increasingly strategic importance to modern technologies and the global economy,” added Brewer, a sentiment which QGC echoed.
QGC’s investment is seen by Brewer as effectively removing funding risk from advancing Marula’s projects and accelerating far-reaching development.
“We now have the ability to implement our exploration plans, resource drilling programmes, feasibility studies and development work across our projects.
“Through strengthened financial and marketing relationships, I believe we can now look to establishing Marula as a profitable producer of critical metals and commodities that are of increasing strategic importance to modern technologies and the global economy," added Brewer.
The first shipment of lithium is taking place under a $5-million lithium prepayment facility to a South African subsidiary of global commodity group Traxys.
Solar saving gold mine $145 000 a month, more renewables on way, says Pan African
The 10 MW solar power plant at Evander is averaging savings of $145 000 a month for the Mpumalanga gold mine, Pan African Resources said on Monday.
Construction is scheduled to begin in June on yet another solar facility, this time an 8 MW photovoltaic solar plant at Barberton Mines’ gold operations, also in Mpumalanga, for which site clearance has already been completed.
Moreover, the scheduling of further large renewable energy initiatives is underway, London- and Johannesburg-listed Pan African stated in an operational update for the six months to December 31.
At Evander gold operation alone, grid electricity issues in the six months lowered production by 5%, which has reinforced Pan African’s imperative to expand its renewable energy portfolio.
Group production in the six months fell by 14.6% to 92 307 oz, but with full-year guidance being maintained at 195 000 oz to 205 000 oz for the full financial year to June 30.
Barberton Tailings Retreatment Plant, or BTRP, produced 10 012 oz in the six months, an increase on the 9 126 oz of the corresponding 2021 half-year.
Elikhulu was flat with 25 830 oz (2021: 25 900 oz), Evander Mines delivered 24 443 oz compared with 33 068 oz in the corresponding six months of 2021, and Barberton Mines fell to 32 022 oz from 39 991 oz. Evander’s production includes the gold equivalent platinum group metals ounces produced by the operation’s Osmiridium circuit.
“Reduced gold production over the past half-year can primarily be attributed to the performance of the Barberton Mines underground operations. We believe that the concrete measures being implemented at this operation will result in a significant improvement during the second half of the financial year and in the years ahead,” Pan African CEO Cobus Loots stated in a media release to Mining Weekly.
Senior debt funding for the construction of the Mintails project is expected to be finalised in April, with good economics being demonstrated at a gold price considerably lower than the current spot price by the project’s definitive feasibility study.
This asset is expected to significantly increase group gold production in the years ahead. Concept engineering work on the Soweto cluster is also underway.
The interim results on 15 February 2023 will include further details on growth projects.
SUDAN EXPLORATION PROJECT
The group’s first fire assay multi-element analytical laboratory commissioned in Sudan will be used for the analyses of all exploration samples being extracted from the Block 12 exploration concessions granted to Pan African by the Sudan Ministry of Mines.
An exploration team is active within Block 12A South and Block 12A North, conducting soil geochemistry and hard rock chip sampling programmes to further define the identified exploration anomalies.
Initial assaying received from the exploration targets identified in the south-eastern corner of Block 12A South averaged 1.7 g/t from 12 samples taken from quartz veins, rock debris and soil.
Some of the structures sampled indicated higher gold mineralisation, with values ranging from 2.9 g/t up to 9.4 g/t gold. These structures will be further defined over the next six weeks as part of a confirmatory sampling programme.
BARBERTON MINES REVIEW COMPLETED
Barberton’s underground operations have experienced above-inflation increases in labour and energy costs, increasing depth and underground travel times at Fairview Mine, reducing available face-time, and the depletion of the high-grade 42 Level block at Consort mine.
A detailed review of operations at Barberton to mitigate these challenges has been completed and agreement reached with representative employee unions to convert Consort to a contractor mining operation, and continuous shift cycle mining, while still allowing for ongoing maintenance and other support activities, at Fairview and Sheba from next month.
The conversion of Consort is expected to result in a more optimal operating model throug
African mining investors see opportunity amid rising insecurity and recession fears
The “world’s largest investment conference”, the Investing in African Mining Indaba, looks to entice investors to Cape Town’s International Convention Centre in hopes of righting “Africa’s myriad economies” following successive years of geopolitical shifts and economic disruptions, says international exhibition organiser Hyve Group’s Mining Indaba portfolio director Simon Ford.
This year’s theme – ‘Unlocking African Mining Investment: Stability, Security and Supply’ – speaks to the promise of African mining that sees recent changes “create pressure points and opportunities”, says Ford, noting that global economies are seeking security of supply for their energy transitions, as well as raw materials and precious metals to bolster their economic power.
“We would say that – in many reaches of Africa – the potential of mining is still untapped, and that there is significant opportunity for mining to attract capital and be transformative.”
However, the global uncertainty and instability have yet to subside, with both the Russia-Ukraine conflict and the consequences of the Covid-19 pandemic lingering longer than many anticipated. There is also the niggling threat of a global recession.
The Dark Cloud
One of the major concerns affecting investment is insecurity.
‘Security of supply’ for manufacturers and secure and reliable access to water and power for miners are probably the foremost priorities. Naturally, because as ERM consulting director Charles Pembroke notes, “several critical minerals and metals are concentrated in a few key jurisdictions, many of which face export restrictions, weak governance and infrastructural challenges”.
However, all stakeholders should be more cognisant of the effects of ‘insecurity’ in general.
As the African Development Bank (AfDB) notes in its report titled ‘Security, Investment and Development: A Diagnostic Assessment’, globalisation and the resultant flexibility to relocate production processes and/or move capital across borders has placed conflict-affected regions at a disadvantage from an investment perspective.
The report, published in October last year, flags insecurity as one of the reasons why Africa’s share of global foreign direct investment remains perilously low at 4%. Moreover, insecurity is increasing, with the report finding that, in 2021, more than 18 000 conflicts affected the continent.
The report cites the ‘Disaster Triangle’ of rural poverty, youth unemployment and environmental degradation, which, alongside poor governance, weak State capacity and corruption, are factors that help cause insecurity.
“Fourteen African countries are classified as medium- and high-intensity conflict-affected situations. These countries share 80 land borders with other African countries, meaning that 85% of the continent’s 1.3-billion people are either living in or sharing land borders with a conflict-affected country,” the AfDB report observes. “The number of shared borders heightens the risk of cross-border spillovers, both in terms of conflict and its consequences on investment, growth and development.”
Aside from spillover effects and perceptions of risk affecting investment decisions and funding – with insecurity affecting both the terms and quantum of financing – the AfDB notes that instability also disrupts trade by upending supply chains “within and between countries”.
Law firm Webber Wentzel partner Tyron Theessen adds that supply chains were already weakened by disruptions caused by the pandemic and the war in Ukraine – evidenced by delivery delays and the rising costs of inputs as supply deficits started to bite.
Moreover, crime, as both a cause and a consequence of increased instability, is also adversely impacting on supply chain resilience.
Webber Wentzel partner Bruce Dickinson notes that attacks on long-haul trucks carrying high-value commodities to ports in South Africa have increased, while Webber Wen