Miner and commodities trader Glencore (LON: GLEN) has inked a multi-year agreement with General Motors to provide the automaker with cobalt from its Murrin Murrin operation in Australia.

The U.S. car producer has committed to making all-electric vehicles by the end of the decade, setting the goal of having 30 new EVs models, equivalent to 1 million electric cars, in the market by 2025.

“Climate change is real, and we want to be part of the solution by putting everyone in an electric vehicle,” chair and chief executive officer Mary Barra says.

GM will use Glencore’s cobalt in its Ultium battery cathodes, which currently powers the Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq vehicles, the companies said. 

The deal comes as automakers scramble to secure steady supply of battery metals, including cobalt, nickel, lithium and copper, to meet rising demand for EVs.

Some manufacturers such as Tesla and Volkswagen have even announced intentions of becoming “actively involved in raw materials business”. Tesla’s Elon Musk seems particularly inclined to do so with lithium, which prices have reached what he calls “insane levels”.

The EV giant has recently secured lithium mining rights in Nevada and has off-take agreements for the battery metal with Liontown Resources and Ganfeng Lithium, China’s no.1 producer of the commodity. For cobalt, Tesla locked down supply from Glencore in 2020. 

Detroit-based rival Ford Motor said on Monday it had signed a preliminary deal to buy lithium from a Lake Resources NL facility in Argentina, marking the first time Ford has publicly announced where it will procure the battery metal.

Glencore, the world’s largest cobalt producer thanks to its mines in the DRC, noted the metal makes up only 0.001% of the earth’s crust. Its appeal to EV makers comes from the fact that it provides batteries with energy density that increases the range of their vehicles and boosts their life.

GM has several other agreements in place for lithium and rare earths and other materials.

Shareholders in Canadian miner Turquoise Hill Resources (TSX, NYSE: TRQ), the majority owner of the vast Oyu Tolgoi copper-gold mine in Mongolia, are poised to cash in on Rio Tinto’s US$2.7 billion offer to buy the remaining 49% of the company it doesn’t already own, analysts say.

While the non-binding buyout proposal is considered “generous” — a 32% premium to Friday’s closing price — it also reflects Rio’s lack of strategic wiggle room under the current capital structure.

Rio Tinto currently controls and operates the Oyu Tolgoi mine, located is 550 km (342 miles) south of Mongolia’s capital Ulaanbaatar via Turquoise Hill’s 66% stake. The government of Mongolia owns 34%.

Market observers believe Turquoise’s investors could get a sweeter deal. Analysts at Scotiabank predict that the company’s shareholders will seek a materially higher offer from Rio Tinto than the $34/share offer price, perhaps greater than $50/share.

The world’s second largest miner has the financial resources to pay a higher premium. As of December Rio had US$1.6 billion of net cash, while high iron ore prices are adding to that pile. The company’s willingness pay up is not so clear, which makes a transaction highly uncertain.

Acquiring the Vancouver-based miner would boost Rio Tinto’s copper output by 10% over the next five years, and 17% on average over 10 years, according to Macquarie.

The bank noted that Rio’s offer might be a 32% premium to Turquoise closing price on Friday but is a narrower 12% premium to the bank’s target on the stock.

Analysts at Jefferies believe that Oyu Tolgoi would become a “crown jewel” in Rio Tinto’s portfolio. They also see the acquisition as an opportunity to straightened up the project’s messy capital structure, which has been one of the reasons why the underground copper mine has suffered delays.

“This transaction would increase Rio’s attributable copper production via an asset that it has developed, currently operates, and clearly knows well,” Jefferies’ note says.

UBS experts warn that while the Mongolian mine is a high-quality deposit, it is in a challenging jurisdiction, which could make it an “overall poor investment.”

They also noted the timing could be off given Turquoise Hill’s stock has risen 254%, to $34.04 from $9.6, since January 2021, and it fears cash returns will be dented this year, with Rio Tinto having now directed about US$3.5 billion to mergers and acquisitions.

Alexander Pearce and David Gagliano of BMO Capital Markets, noted that the company’s strategy over its stake in Turquoise Hill has been subject to discussion for many years, adding that the acquisition could “make sense.”

“In the past Rio Tinto has been happy to share the risk of its assets with minority shareholders, however, given the dearth of copper opportunities elsewhere, perhaps increasing its exposure to Oyu Tolgoi now makes sense and could simplify the remaining funding hurdles for the underground project,” they wrote in a note to clients. “From a Rio Tinto perspective, with a strong balance sheet (US$1.6 billion net debt at Dec. 2021) and expectations of US$12.6 billion FCF [free cash flow] this year, US$2.7 billion is easily affordable for the company.”

Biggest new copper mine

Rio Tinto has had a rocky relationship with the Vancouver-based miner, particularly over how to fund Oyu Tolgoi’s expansion. The top miner has also drawn criticism from some of Turquoise Hill’s minority shareholders about the control it exerts over the company.

“Given the dearth of copper opportunities elsewhere, combined with its recently lowered risk profile, perhaps increasing its Oyu Tolgoi exposure now makes sense,” Pearce and Gagliano wrote.

Once completed, the underground section of Oyu Tolgoi will lift production from 125,000-150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.

KoBold Metals, a start-up backed by a coalition of billionaires including Bill Gates and Jeff Bezos, has raised $192.5 million in its latest financing round, which will allow it to speed up efforts to find new deposits of critical metals needed for batteries and clean energy.

Investors in the Series B funding round for the company included Sam Altman’s Apollo Projects and Mary Meeker’s Bond Capital as well as BHP (ASX: BHP) and the Canada Pension Plan Investment Board, Canada’s largest pension fund, two people familiar with the matter told the Wall Street Journal.

Previous backers include big names such as Venture capital firm Andreessen Horowitz and Breakthrough Energy Ventures. 

The Silicon Valley-based firm, founded in November 2018, plans to use artificial intelligence to create a “Google Maps” of the Earth’s crust, with a special focus on finding cobalt deposits. It collects and analyzes multiple streams of data — from old drilling results to satellite imagery — to better understand where new deposits might be found.

Algorithms applied to the data collected determine the geological patterns that indicate a potential deposit of lithium and cobalt, which occurs naturally alongside nickel and copper.

KoBold Metals estimates the world needs to mine more than $10 trillion of these key metals to meet the expected demand for electric vehicles (EVs), adding that traditional mining companies are likely to turn to artificial intelligence (AI) tools to help them along their quest.

Not a miner  

KoBold, as its chief executive officer Kurt House has stated multiple times, does not intend to be a mine operator “ever.”  

The company’s quest for battery metals began last year in Canada, after it acquired rights to an area of about 1,000 square km (386 sq. miles) in northern Quebec, just south of Glencore’s Raglan nickel mine. 

The firm, named after the German word for a goblin that controls the earth’s minerals, has already gathered publicly available data from company disclosures and government sources, as well as historical information from companies it partners with.

These include BHP, the world’s no. 1 miner, Norway’s state-backed energy company Equinor, and Greenland-focused junior Bluejay Mining (LON: JAY). 

KoBold’s algorithms then crunch the data obtained in search of geological patterns, which guides its activities and land acquisitions.

The technology can locate resources that may have eluded more traditionally minded geologists and can help miners decide where to acquire land and drill, the company has said.

It currently owns about a dozen exploration properties in places such as Zambia, Quebec, Saskatchewan, Ontario and Western Australia. 

Vista Gold Corp. (TSX: VGZ) announced on Wednesday the results of a feasibility study (FS) for its 100% owned Mt Todd gold project located in the Northern Territory, Australia.

With economics based on Q4 2021 costs, the project is expected to deliver compelling cashflows over a 16-year mine life, the study showed, totaling $2.1 billion for the first seven years of commercial operations (at a US$1,800/oz gold price).

Using the same gold price, the FS gave the project an after-tax net present value (NPV) of US$1.5 billion and an internal rate of return (IRR) of 26.7%.

The average cash costs over life of mine is estimated at US$817/oz, including average cash costs of US$752/oz during the first seven years of commercial operations. The average all-in sustaining cost (AISC) is US$928/oz, including average AISC of US$860/oz. during the first seven years.

According to Vista, Mt Todd’s economic returns benefit from an increase in the gold reserve estimate, favorable results of the power plant trade-off study and slightly lower energy costs in the Northern Territory.

Gold reserves increased 19% to 6.98 million oz., resulting in average annual gold production of 479,000 oz. during the first seven years and 395,000 oz. over the life of mine.

Initial capital requirements for the project are US$892 million, an 8% increase, which reflects the use of a third-party owner/operator of the power plant.

“The FS affirms the strength of Mt Todd’s gold production capacity and ability to deliver solid economic results at a time when inflationary pressures are having significant impacts on operating mines and development projects alike,” Vista’s president and CEO Frederick Earnest commented.

“Completion of the FS represents another major step in de-risking Mt Todd and readying the project for development. The scale, quality of work completed and location of Mt Todd, together with the completion of the FS and the fact that all major authorizations for development have been obtained, distinguish Mt Todd as a unique development opportunity,” he added.

Shares in Vista Gold jumped 11.2% by 12:30 p.m. New York time, giving the gold developer a market value of US$91.6 million.

BHP (ASX: BHP) has taken a key step towards its goal of reaching net-zero by 2050 after receiving the first of five LNG-powered carriers to transport iron ore from Australia’s Port Hedland to Asia.

The 299-metre long Mt. Tourmaline Newcastlemax ore carrier was built by Eastern Pacific Shipping in China and stopped off in Singapore to take on LNG fuel. It will next head to Port Hedland in Western Australia to load iron ore that will then be shipped to customers in China.

The world’s largest miner said that introducing LNG-powered ships would eliminate nitrogen oxide and sulphur oxide emissions and reduce carbon dioxide emissions by about 30% per trip.

BHP has inked several agreements in the past year with some of the world’s largest steel mills to co-operate on low carbon technologies, including Japan’s JFE Steel, South Korea’s Posco, as well as Baowu and HBIS in China.

“This is not small. Together these four steel mills account for 12 per cent of global steelmaking. Whatever the future landscape will be in steelmaking, we will be part of that,” BHP chief commercial officer Vandita Pant said.

While the vessel can also still burn traditional very low sulphur fuel oil, BHP intends to use LNG to power Mt. Tourmaline as much as possible, said Pant.

Hardest to tackle

Scope 3 emissions — those generated indirectly when consumers burn or process commodities produced by BHP — are undoubtedly the hardest to tackle, but they account for as much as 97% of BHP’s total, according to Market Forces executive director Julien Vincent.  They are also larger than Australia’s total emissions in 2019 of 532.5 million tonnes of carbon dioxide equivalent, so stakeholders were expecting more.

“The targets fall short of the ~42% reduction that would be required to align with a 1.5°C pathway from 2020 to 2030,” investors group Market Forces said. “Put simply, BHP has deliberately chosen not to meet the Paris Agreement’s ultimate aim of holding warming to 1.5°C.”

BHP is the top exporter of coking coal used in steelmaking and number three in iron ore, the raw material for steel.

The highly polluting process of making steel involves adding coking coal to iron ore to make the alloy and is responsible for up to 9% of global greenhouse emissions.

Last year, BHP invested in a start-up company seeking to develop less-polluting ways of making steel.

It also inked a deal with mining equipment giant Caterpillar (NYSE: CAT) to speed up the development and deployment of zero-emissions mining trucks at BHP sites. 

The company has been working on cleaning up its portfolio by exiting thermal coal, divesting metallurgical coal assets, and increasing its exposure to what chief executive officer Mike Henry calls “future-facing commodities”. They include metals such as copper and nickel — key materials for the batteries and wiring that are key to the clean-energy transition.

UK and Australia-based researchers have identified the mechanism through which copper, cobalt, tellurium and platinum are passed from the earth’s mantle to the crust.

In a paper published in the journal Nature Communications, the scientists explain that they have discovered a ‘Goldilocks zone’ at the base of our planet’s crust where the temperature is just right at around 1000°C for metals to be transported to shallower levels near the surface, where they can be mined.

The main issue at hand is that most of these metals are primarily stored at depths of more than 25 km, making them inaccessible for exploitation. Yet in certain parts of the world, nature can bring them to the surface through the flow of liquid rock, known as magma, that originates in the earth’s mantle and rises upwards into the crust.

However, up until now the journey of metals to their final deposition site had been uncertain.

The study, thus, clarifies how a temperature-dependent zone, located at the base of the earth’s crust, acts as a valve and intermittently allows the metals to pass upwards to reach the upper crust.

“When magmas reach the base of the crust the critical metals often get trapped here and cannot reach the surface if the temperature is either too hot or too cold,” co-author Iain McDonald said in a media statement. “As with Goldilocks, we have discovered that if the temperature is ‘just right’ at around 1000°C, then metals like copper, gold and tellurium can escape the trap and rise up towards the surface to form ore deposits.”

In the view of McDonald and his colleagues, these findings can lead to more targeted, less costly, and more environmentally friendly practices to explore for and extract metals that are key to the manufacturing of renewable energy technologies.

Copper is a key commodity of the future, with demand forecast to outstrip supply over the next decade as the world ramps up the race to decarbonize and transition to a greener economy powered by renewable energy and electric cars.

The world’s top copper producers – Chile and Peru – have, over the past couple of years, seen political instability rise with new governments considering tax royalties that could threaten the economic viability of key copper mines, and consequently production, and community opposition to new projects based on environmental, social and governance (ESG) risk.

A new exploration company, CopperCorp Resources Inc. (TSX-V: CPER), was listed on the TSX this month, and is focused on copper exploration in Australia. 

Run by a management team made up of veteran mine-finders of the world’s majors with a wealth of experience and expertise – CopperCorp has US$11 million in funding out of the gate.

CopperCorp’s flagship asset is its 100%-owned Alpine copper project in the state of Tasmania, one of the world’s most stable and sustainable mining jurisdictions with a 150-year mining history. Tasmania’s number one source of revenue is mining and mineral projects.

“What interested me about Tasmania is the jurisdiction – it really does matter more than it ever used to,” says CopperCorp CEO Stephen Swatton, who has extensive international exploration experience with major mining companies.

“There are a lot of copper deposits in the world, but it is difficult to find large deposits in good jurisdictions,” Swatton says. “You go back to the jurisdictions you know, and make sure you’ve turned over every stone.” 

The company is currently drilling – with over 4,100 meters completed in 12 holes so far at Alpine, targeting Iron-Oxide-Copper-Gold (IOCG) deposits at a district scale. A National Instrument 43-101 resource report is pending.

This year CopperCorp also plans to drill at its nearby Skyline project in the same jurisdiction, and adjacent to critical infrastructure such as power grids and wind farms via sealed road access.

Swatton says the geology indicates higher grades at near surface, which can translate into a future mine with a smaller environmental footprint.

The Alpine project is within 30 kms of Grange Resources’ Savage River magnetite mine, within the same host rocks, and considered by geologists to be an IOA style deposit, a close relative of IOCG. 

“All the major companies would be eager to consider opportunities like Alpine,” says Swatton, “It is district-sized with the potential to host multiple mines in a safe jurisdiction, one that is powered by 100% renewable energy.”

“We’re drilling in and around there – that’s our starting point. We’re looking for multiple copper deposits around the whole district.”

The global resource is more than 600 million tonnes (mt) at 40% recoverable magnetite. Magnetite is a key indicator for finding IOCG deposits.

“This belt is a few hundred kilometers long from north to south,” says Swatton. “It’s in an area where there is a very large iron ore deposit – 600 million tonnes at 40% iron. The origin of that iron ore deposit has never been fully understood, but the reinterpretation is that the whole belt may have iron-oxide copper-gold.”

Swatton says there are a lot of prospects in that area that haven’t been looked at for many years, and the particular area CopperCorp is looking at now has been drilled in the past but has not been viewed as a district and interpreted as a whole.

“There are a few different types of copper deposits – the largest are porphyritic – and we’re looking at a reinterpretation of old rocks,” Swatton says.

“We’re aiming to secure as much of these prospective belts as possible. Alpine and Skyline are each large, district-wide plays, not just one asset.”

The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by CopperCorp Resources Inc. and produced in cooperation with The Northern Miner.  Visit CopperCorp Resources Inc. for more information.

Vox Royalty (TSXV: VOX; OTC: VOXCF), which holds the second-largest mining royalty portfolio in Australia behind Franco Nevada, and has been tapped as the top company for projected revenue growth amongst its peers, has executed an agreement to acquire two world-class platinum group metals (PGM) royalties for $8.3 million (C$10.4m), expanding its portfolio of precious metals royalties.

They include a 1% royalty over the Dwaalkop project and a 0.7% gross royalty over the Messina project which collectively cover the full extent of the 36 million ounce Limpopo PGM project, operated by Sibanye Stillwater (JSE: SSW; NYSE: SBSW).

Limpopo was last successfully mined in 2009 via the existing Baobab shaft and concentrator, which are both still in place. Since the takeover of the Limpopo project in 2019, Sibanye initiated a strategic review process, including revising and updating the 2017 feasibility study in 2020 to assess an optimal development timeframe for the assets.

Due to the steep dip of the UG2 and Merensky Reefs, the project remains an attractive mechanization option, which fits well with strategic goals, Sibanye has said. Sibanye’s most recent 2020 study confirmed the financial viability of a near-term restart of Limpopo.

“This project came to us through what we’ve built up as our systematic advantage in the industry – our proprietary database – our deal sourcing agents around the world connecting the dots to find these unique and valuable acquisitions,” says CEO Kyle Floyd.

“This asset was one that we had identified and had been working on for months. It was one of those forgotten royalties of the last decade. Sibanye wound up acquiring Lonmin Plc, the company that previously operated this asset and paid the royalty,” Floyd says.

Vox’s edge is the information it obtains from the intellectual property contained in its global royalty database. Over the last ten years, Vox’s management has built the world’s largest proprietary database of over 8,000 global mining royalties. Vox uses that database to find ”under the radar”mining royalty opportunities, often in the unlikely hands of telecommunications, technology, or automotive companies.

“This royalty was created in 1998 – when this project was sold by a forgotten company called SouthernEra Resources Limited,” Floyd says.“SouthernEra was acquired by Lonmin – Lonmin was acquired by Sibanye Stillwater. People just lost track of this royalty. It was forgotten until now – surfaced by Vox deal agents working throughout South Africa and globally and vetted by the technical understanding of our team of geologists and mining engineers.”

“For us, this deal was very consistent with our theme of acquiring royalties, with very deep value, anywhere from one year to five years pre-production, with a de-risked plan to get back into production,” Floyd says.

“It’s very de-risked, in that it was an already producing asset, all of the existing infrastructure is in place, with a tremendous amount of capital already put in the ground. It has a US$10 billion operator that knows how to operate these assets as well as anyone. It checked every box for us.”

The acquisition provides exposure to an 18 million ounce 4E (platinum, palladium, rhodium, gold) Measured and Indicated PGM resource and a further 18 million ounce 4E Inferred PGM resource over a past-producing mine on the prolific Bushveld Igneous Complex. When the by-product credits from the copper, nickel and other secondary metals are included this resource hosts a total gold-equivalent resource of over 50 million ounces, a generational orebody.

It significantly increases Vox’s exposure to battery metals such as rhodium, copper and nickel contained within the resource – in 2007, Lonmin plc produced 73,600 ounces of PGMs, along with 752 tonnes of nickel and 513 tonnes of copper at the Limpopo mine.

“This is highly consistent with our strategy and our systematic advantages of finding forgotten royalties and in these cases we are able to truly delineate value through our due diligence review with our technical team, and surface the best value for shareholders,” Floyd says.

 “This is a generational acquisition for our business. Being able to check all those boxes to top it off – I don’t know that there’s been a royalty acquisition in the last decade where the royalty covered 50 million gold-equivalent resource ounces, certainly not at these prices,” Floyd adds.

“It’s a stunning acquisition from that standpoint. It’s what we’ve been communicating to investors we were going to be accomplishing all along. Our ability to connect all the dots and find this type of hidden value for shareholders is really unprecedented in the sector.”

The preceding Joint Venture Article is PROMOTED CONTENT sponsored by Vox Royalty Corp. and produced in co-operation with Canadian Mining Journal.  Visit Vox Royalty Corp. for more information.

Tanzanian Gold (TSX: TNX; NYSE: TRX) believes a three-pronged approach to developing its 2-million-ounce Buckreef project could lead to Tanzania’s next national mining success story, CEO Stephen Mullowney tells The Northern Miner. 

Situated about 45 km to the west of Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu gold mine and nearly 35 km south from AngloGold Ashanti’s (NYSE: AU; JSE: ANG) flagship Geita mine in north-central Tanzania, Tanzanian Gold is looking to expand its current 360 tonnes per day processing plant to 1,000 tonnes per day by the end of the year, increasing the yield capacity from about 9,000 oz. of gold to more than 15,000 oz. per year.  

In the past year, subsidiary Buckreef Gold continued to operate the 5 tonnes per hour oxide test plant on the 1600-hectare property. It plans to apply the cash flow to expand its exploration program this year and to advance the metallurgical study of its sulphide development project. The company believes about 90% of Buckreef’s gold resource is held in sulphide material. 

“I don’t know many mining assets in this kind of a position,” Mullowney said in an interview. “There are many good projects, but they are funded from treasuries. We are getting in a position where we can fund it from operating cash. It’s not a large production, but it’s enough to do a lot of work.”  

In December, Buckreef produced 533 oz. of gold through its 360 tonnes per day processing plant. The two other ball mills required to upgrade the plant’s capacity to 1,000 tonnes per day have arrived in the port city of Dar es Salaam, which according to Mullowney, was the most time-consuming aspect of the expansion project.  

The world’s first mechanized development blast charging system, Avatel is set to enter Newcrest Mining’s (TSX: NCM; ASX: NCM) Cadia underground mine in the later half of 2022 as the first commercial trial in the world. 

Co-developed by Orica and Epiroc, Avatel is a first-of-its-kind semi-automated explosives delivery  system designed to remove people from harm’s way and drive productivity during underground development. The innovation enables a single operator to prepare and wirelessly charge a development face from within the safety of an enclosed cabin, while providing superior blast control and operational reliability with Orica and Epiroc’s flagship technologies. 

A critical enabler of Avatel is the second generation wireless initiation initiating system, WebGen 200, which will eliminate the need for wired connections and subsequent exposure to crews at the face, enabling continued and safe access, even in poor or seismic ground conditions, to accelerate the development cycle. 

“We are proud and excited that Newcrest have continued to place their trust in us by being the first site globally to trial Avatel,” said Orica chief technology officer Angus Melbourne. “They have provided invaluable advice throughout the design and development of the system, which we are truly grateful for. Together, we eagerly await the delivery of the first Avatel unit as it will herald the start of a new era for safer and productive underground development charging.”  

“We do expect teething issues as is common when deploying any new technology,” added Newcrest’s group manager for directional studies and innovation Tony Sprague. “However, it will  be well worth it if we can ensure our tunnel faces are charged with all human work completed from the safety and comfort of Avatel’s operator cabin.” 

Avatel is currently undergoing trials at Epiroc’s Kvantorp underground test mine in Sweden under controlled conditions before heading to Agnico Eagle’s Kittila mine in Finland to complete extended underground trials in the production environment.

Australia will receive the first commercial unit in the second half of 2022, with Canada following closely toward the end of the year.

Learn more about blasting at www.Orica.com.