Two weeks into the second quarter, the MINING.COM TOP 50* ranking of the world’s most valuable miners had a combined market capitalization of $1.36 trillion, up $79.7 billion so far in 2025.

The total stock market valuation of the world’s biggest mining companies remains almost $400 billion below the peak hit in the second quarter of 2022.

This snapshot was taken at the close of trading on 17 April and not at the start of Q2 as usual to avoid some of the market distortions brought on by the chaotic weeks following Trump’s on-again off-again tariffs.

This flatters the index to some extent as gold stocks rode the coattails of the record setting bullion price and almost all big names regained some ground after the severe sell-off during the first week of April.

Newcomers

The volatile trading saw the greatest number of new entries – six in all – in a quarter since MINING.COM started tracking the Top 50 six years ago. From $6.7 billion at the end of 2024, the lowest ranked entry must now be worth $8 billion.

Mining and metals arguably suffered some of the biggest swings and roundabouts as the economic effects of a trade war and the focus on critical minerals played havoc – exemplified by the volatility on copper markets.

The bellwether metal hit a record high in the US at the end of March, only to plunge more than 20% over the next week and a half and then make up a big chunk of those losses going into the long weekend.

Amid the hectic trading, copper producers and diversified companies with large base metal portfolios lost a combined $53 billion to April 17 and are now trading $205 billion below their collective peak end-Sep 2024 as the sector’s ranks thin.

Lundin Mining dropped out of the Top 50 during Q1 following another copper counter, Poland’s KGHM, which did not make the cut off in Q4 last year. Q1 was a mixed blessing for the Canadian mining empire with the copper producer making way for Lundin Gold, entering the Top 50 for the first time after doubling in value in USD terms to $10.1 billion in Toronto.

Huayou Cobalt’s inclusion proved to be short-lived while South32 failed to make the cut for the first time since being spun out of BHP a decade ago. The base metals sans copper producer sits at position 51 after being narrowly edged out by Shanjin International Gold, so the stock may well return if (and not necessarily when) profit-taking in gold and gold stocks starts to make sense.

Another notable mover of 2025 is Amman Mineral, the worst performer in the index which lost over $10 billion in value as reality about its piercing run since its debut in Jakarta early 2023 continues to set in. The Indonesian copper-gold company is now worth an eye-catching $20 billion less than its high point at the end of Q2 last year, even after investors ran up the stock more than 20% just in the last week.

Nothing counters gold

While the direction of the copper price over the last few months was almost impossible to judge, gold’s record breaking run looked inevitable. At $3,420 per ounce gold at the time of writing, the yellow metal has now finally also surpassed its 1980 peak in inflation-adjusted terms.

Unsurprisingly, precious metals counters dominate the best performer list and make up the majority of new entrants. Gold, silver and PGM miners and royalty companies now represent a third of the value of the Top 50. The strength in precious metals has also seen Canada overtake Australia for the first time in terms of the value of miners headquartered there.

At 22% of the index, the 13 Canadian companies collectively are worth a smidgen under $300 billion compared to $275 billion for the now eight Australian firms with the inclusion for the first time of Sydney-based gold stock Evolution Mining. In their current form Melbourne-based BHP and Rio Tinto have been the top two global mining stocks since the turn of the century, together worth $220 billion today.

The MINING.COM Top 50 tracks stock value in USD terms not share price gains on local exchange and many stocks in the ranking benefitted from strengthening currencies against the USD.

South Africa’s Harmony Gold tops the gainers after jumping 24 spots to enter the ranking at no 37 following a 117% advance since end-2024. Like Harmony, Goldfields also benefited from the strong rand against the greenback, lifting the Johannesburg-based company’s shares by 83% year to date.

Russia’s Polyus, which added $14.4 billion in Q1, was only beaten by the top two gold stocks Newmont and Agnico Eagle which added $18.6 billion and $19.9 billion year to date in market cap gains. The ruble has strengthened by 20% against the US dollar in 2025 and Norilsk Nickel, thanks to captive investors on the MCX, has maintained its good standing in the Top 50 despite sanctions and trading restrictions. Norilsk is still worth north of $20 billion but still a far cry from its peak position as the world’s number 5 most valuable mining company reached mid-2021.

London-listed Fresnillo returns to the index after years in the wilderness thanks to a 74% surge in value for the Mexican silver and gold miner, majority owned by Mexican industrial group Peñoles. Together with Southern Copper, owned by Grupo Mexico, the country now represents nearly 6% of the value of the Top 50.

Gold counters are likely to only increase in number and size over the rest of 2025. Kazatomprom dual-listed in London and Astana in 2018, and Uzbekistan is now readying an IPO for Navoi Mining and Metallurgy Combinat – the world’s fourth largest gold mining company and significant uranium producer later this year.

Rare earth representation

China Northern Rare Earth is the only producer of the 17 elements in the ranking and despite the frenzy surrounding the sector as China tightens control. There are no obvious REE candidates that could join the Top 50 in short order.

MP Materials, which operates the Mountain Pass mine in California, has surged by 69% in value year to date but the Las Vegas-based company is still worth only $4.3 billion.

The company’s valuation peaked above $8 billion in March 2022, but the whole mining industry was riding high at the time and the high price ticket for entry at the time meant it fell just outside the ranking. Australia’s Lynas Rare Earths have also come close in the past and is up 26% this year for a valuation of $5.3 billion.

Lithium down to a single stock

Lithium’s representation in the ranking is down from six companies to a single stock – Chile’s SQM languishing in position 42 and worth less than $10 billion – following the exit of China’s Tianqi and US-based Albemarle during the quarter, with the latter dropping by 38% in 2025.

The value destruction caused by the slump in lithium prices has been nothing short of astonishing. Lithium stocks in the index peaked in the second quarter of 2022 with a combined value of nearly $120 billion.

While Albemarle now worth $6.2 billion may well make a comeback (the longer term prospects for lithium demand remains bright), the absorption of Arcadium by Rio Tinto makes it unlikely that the Top 50 will see a rush of lithium stocks any time soon, a rebound of the commodity notwithstanding.

Zangge Mining, which does derive a good proportion of income from lithium, but is mostly a fertilizer producer, is bubbling under at number 53. The Chinese company may not stick around either – it’s the subject of takeover overtures by Zijing Mining, which also helps explain the 25% rise in the stock on the Shenzen exchange in USD terms.

Notes:

Source: MINING.COM, stock exchange data, company reports. Share data from primary-listed exchange at close April 17/18, 2025 close of trading converted to US$ where applicable. Percentage change based on US$ market cap difference, not share price change in local currency.

As with any ranking, criteria for inclusion are contentious. We decided to exclude unlisted and state-owned enterprises at the outset due to a lack of information. That, of course, excludes giants like Chile’s Codelco, Uzbekistan’s Navoi Mining (the gold and uranium giant may list later this year), Eurochem, a major potash firm, and a number of entities in China and developing countries around the world.

Another central criterion was the depth of involvement in the industry, and how far upstream is the bulk of its revenue, before an enterprise can rightfully be called a mining company.

For instance, should smelter companies or commodity traders that own minority stakes in mining assets be included, especially if these investments have no operational component or even warrant a seat on the board?

This is a common structure in Asia and excluding these types of companies removed well-known names like Japan’s Marubeni and Mitsui, Korea Zinc and Chile’s Copec.

Levels of operational or strategic involvement and size of shareholding were other central considerations. Do streaming and royalty companies that receive metals from mining operations without shareholding qualify or are they just specialized financing vehicles? We included Franco Nevada, Royal Gold and Wheaton Precious Metals on the basis of their deep involvement in the industry.

Vertically integrated concerns like Alcoa and energy companies such as Shenhua Energy or Bayan Resources where power, ports and railways make up a large portion of revenues pose a problem. The revenue mix also tends to change alongside volatile coal prices. Same goes for battery makers like China’s CATL which is increasingly moving upstream, but where mining will continue to represent a small portion of its valuation.

Another consideration is diversified companies such as Anglo American with separately listed majority-owned subsidiaries. We’ve included Angloplat in the ranking but excluded Kumba Iron Ore in which Anglo has a 70% stake to avoid double counting. Similarly we excluded Hindustan Zinc which is listed separately but majority owned by Vedanta.

With other groups like Mexico’s Penoles where refining and chemicals make up a substantial part of the business where possible the Top 50 would include separately listed operating subsidiaries that are dedicated to mining. This is also why Southern Copper represents Grupo Mexico in the ranking.

Many steelmakers own and often operate iron ore and other metal mines, but in the interest of balance and diversity we excluded the steel industry, and with that many companies that have substantial mining assets including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many others.

Head office refers to operational headquarters wherever applicable, for example BHP and Rio Tinto are shown as Melbourne, Australia, but Antofagasta is the exception that proves the rule. We consider the company’s HQ to be in London, where it has been listed since the late 1800s.

Please let us know of any errors, omissions, deletions or additions to the ranking or suggest a different methodology: email Frik Els at fels@mining.com with Top 50 in the subject line.

The Zimbabwe Mining Development Corp. has asked the Mines Ministry for a resolution to a longstanding dispute with a unit of Amaplat Mauritius Ltd. that is laying claim to the assets, a letter written by the company’s chairman Paul Chimboza to Mines Minister Winston Chitando shows.

Chimboza confirmed the veracity of the letter, which has been seen by Bloomberg, but declined to comment further, referring queries to the ministry.

The $93 million owed by ZMDC is among a litany of creditor woes confronting state entities in Zimbabwe. The government is more than $21 billion in debt and locked out of international capital markets after defaulting on payments owed to institutions including the World Bank and European Investment Bank.

“The corporation has on many occasions requested that the Amari debt be assumed by the state,” Chimboza wrote in reference to ZMDC’s standoff with the Amaplat unit. ZMDC, which the Treasury indicated should address the matter using internal resources, has few assets of its own as they have mostly been transferred to a new state company known as Defold Mine Ltd.

Zimbabwe’s case against Amaplat was heard by the International Chamber of Commerce’s arbitration court in a sitting in Zambia in 2014, and the tribunal ruled in the company’s favor. Zambia’s High Court granted Amaplat leave to enforce the arbitration ruling in 2019.

Two years later, the company made a proposal to the country’s finance ministry for the settlement of the debt, which amounted to $65.9 million at the time. That was acceded to with the understanding that ZMDC would make the payments.

ZMDC suggested that Bravura, a company owned by Nigerian businessman Benedict Peters, pay Amaplat $15 million as part of the agreement. Bravura, which received platinum concessions, however only paid $3 million to the mines ministry, Chimboza said, and the remaining terms of the settlement, including the transfer of mining assets to Amaplat, haven’t been met.

Bravura officials weren’t available for comment, said a person who answered their phone at offices in Zimbabwe’s capital, Harare.

“It is not for Amari and Amaplat to determine how the government of Zimbabwe sources funds for payment for its public debt,” Amaplat said in a response to queries. “As the ICC award is against a Zimbabwe government parastatal and the commissioner of a government ministry, the ZMDC and the Chief Mining Commissioner of the Ministry Mines, the public debt remains the responsibility of the government of Zimbabwe for the full amount.”

Secretary for Mines Pfungwa Kunaka said he was traveling and didn’t respond to questions on how the dispute would be handled.

More legal trouble may lie ahead for Zimbabwe as Amaplats plans to register its award in Canada, after doing the same in the US at the end of last year. A hearing in Canada is set for June 30, Chimboza said in the letter.

Zimbabwean diamonds, due to be sold in Brussels, were temporarily seized in relation to the dispute in 2014.

The continuous engagement of external lawyers is costly with more than $500,000 spent by ZMDC and the ministry in engaging legal representation, Chimboza said.

(By Godfrey Marawanyika and Ray Ndlovu)

The world’s top producer of platinum group metals (PGM) by volume expects to be hived off parent company Anglo American Plc by June as the global mining giant narrows its focus to energy transition metal copper and iron ore.

Amplats’ proposed new name would be put up to a shareholder vote at its annual general meeting on May 8, the company said in a statement.

The company will retain its primary listing in Johannesburg, with a secondary listing on the London Stock Exchange.

(By Nelson Banya; Editing by Alex Richardson)

Read More: Amplats halts operations at South African mine after heavy rains

Although it is normal for any large miner to seek to buy as well as to sell on the spot market, bidding in recent weeks by Amplats unnerved some consumers who had anticipated prices would fall.

Johannesburg-based Amplats, the world’s third largest rhodium producer after Impala Platinum and Sibanye-Stillwater, had sought to buy or borrow the metal, the sources said on condition of anonymity.

Amplats “is a regular buyer and seller of PGMs (platinum group metals) in the ordinary course of business and regularly sources metal from the markets to meet customer needs and manage price risk,” a company spokesperson told Reuters.

Prices for rhodium, mainly used by automakers in vehicle exhaust systems to neutralize harmful emissions, have risen 20% so far this month.

They broke above a psychological level of $5,000 per troy ounce on Thursday and reached $6,040 on Tuesday, their highest since June, 2023, before retreating to $5,640 on Wednesday.

In a previous spike in 2021, the price hit a record $29,890 an ounce on strong demand and production outages, and analysts say volatility is to be expected in thinly traded markets such as rhodium.

Amplats, which is due to demerge from Anglo American by June and seek a separate listing in London, did not specify how much metal it sought from the market.

It said market sentiment had strengthened because of expected demand from China, strong car sales in the United States and the European Union’s easing of CO2 emission rules.

Flooding in some parts of South Africa in late February prompted Amplats to temporarily halt operations at its Tumela mine, accounting for 10% of the group’s output.

The company, however, was able to keep its 2025 forecast for metal-in-concentrate production unchanged.

Two years of depressed prices

The price jump when rhodium’s sister metals – platinum and palladium – have been largely flat is positive for miners hit by two years of depressed prices for platinum group metals, due to bets that growth in EVs would curb future demand.

“There has been stronger-than-expected end-user demand as well as a consistent bid in the market over the past two weeks,” Tai Wong, an independent metals trader, said.

South Africa supplies 80% of mined rhodium output with the rest coming from Russia, Canada or the recycling sector. Miners usually sell 80% to 90% of their production under long-term contracts and the balance on the spot market.

A source at another miner, who declined to be named, said the firm was receiving requests for metal to sell on the spot market but could not meet them because it had agreed contracts to sell most of its rhodium.

The source said the additional demands were mostly from North American automakers and Chinese glass manufacturers.

Wilma Swarts, director of PGMs at consultancy Metals Focus, said the increased activity was the result of short-term supply constraints and was unlikely to last.

“While the price could go higher, it should be short-lived,” she said, adding that softness was expected longer term due to rise in PGMs-free battery electric vehicles.

According to Metals Focus, the deficit in the global rhodium market is expected to narrow this year to 74,000 ounces from 143,000 ounces in 2024 with demand falling by 8% to 1 million ounces and supply declining by 2% to 951,000 ounces.

Above-ground stocks will meanwhile decline to 612,000 ounces.

(By Polina Devitt in London and Felix Njini; Editing by Barbara Lewis)

Earlier this month, Trump said levies on automobiles would be coming as soon as April 2. This would mean imports into the country would become more expensive, while exporters to the United States could see demand for their cars slide.

The ripple effects are expected to spread to platinum, palladium and rhodium, known collectively as platinum group metals, which are used in vehicle exhaust systems for gas, diesel and hybrid vehicles.

Tariffs typically fuel inflation and keep interest rates higher, potentially slowing economic growth, which Zain Vawda, market analyst at MarketPulse by OANDA, said would weaken demand for platinum and palladium.

The auto sector accounts for nearly 40% of platinum demand and 80% of palladium offtake globally.

Vawda expects global platinum demand to decline 1% or around 102,000 ounces this year and palladium by 4% or 364,000 ounces if the tariffs on US auto imports are imposed.

The US auto industry is heavily dependent on imported parts and fully assembled vehicles, particularly from Canada and Mexico.

Barclays estimates Mexico provides up to 40% of the parts in US vehicles, Canada provides more than 20% and that German auto giant Volkswagen produces about three-quarters of its North American fleet in Mexico.

Meanwhile, Wilma Swarts, director of PGM research at Metals Focus, said PGM demand could drop about 150,000 ounces this year if tariffs reduce US vehicle sales by up to one million units and if 90% of that drop is from internal combustion engine and hybrid vehicles.

“American consumers would probably hesitate to buy a tariff hit vehicle because they wouldn’t like the higher price,” said David Whiston, equity strategist – US autos at Morningstar.

Spot platinum and spot palladium each fell more than 2% on February 19, a day after Trump announced his auto tariff plans. Since then, they have dropped about 5% and 7%, respectively.

(By Ashitha Shivaprasad and Shivansh Tiwary; Editing by Pratima Desai and Kirsten Donovan)

Commenting on the company’s results for the final six months of 2024, chief executive Nico Muller said Implats has been “continuously evaluating the future” of the palladium-rich Lac des Iles mine in Ontario. The operation contributed about 7% of the company’s production in the period.

“I would not be surprised if, in the course of the next few months we come to a position that an accelerated and responsible wind down of that operation seems to be economically the most effective way to deal with (Impala) Canada,” Muller said.

Price plunge

Palladium has suffered the steepest price drop among platinum group metals (PGMs), plunging from a peak of about $3,440 an ounce in March 2022 to current levels around $921.

The sharp fall has weighed on Implats’ profitability, cutting its first-half fiscal 2025 earnings to 1.9 billion rand ($103 million).

Implats acquired the Lac des Iles mine in 2019, which fuelled the company’s profits in the early part of the decade. 

Like its peers such as Anglo American Platinum and Sibanye-Stillwater (JSE: SSW) (NYSE: SBSW), the company has been forced to cut costs and scale back production in response to persistently weak metal prices.

The company also reported a 154% increase in the total amount of contained palladium equivalent (PdEq) ounces, compared to the previous estimate in 2023.

Bravo’s shares were trading at C$2.54 on Tuesday morning, up 10.43% in Toronto. The company has a market capitalization of C$277 million ($195 million).

Strategic location

Luanga is located approximately 40 km east-northeast of Parauapebas, the mining capital of Pará and home to the Carajás complex — the main iron ore production hub of Vale SA.

According to Bravo, the inferred resources at the deposit have increased to 78 million tonnes with a grade of 2.01 grams per tonne (g/t) of palladium equivalent, resulting in a total of 5 million oz. of palladium equivalent.

The company also reported that measured and indicated categories now account for 67% of the total resource, an increase from 38% in the 2023 estimate.

Bravo’s new pit-constrained mineral resource estimate includes 158 million tonnes with a grade of 2.04 g/t palladium equivalent, amounting to a total of 10.4 million oz. of palladium equivalent.

“The 2025 MRE firmly establishes our Luanga project as one of the few large-scale, multi-million-ounce, open-pit PGM deposits available globally, in mining-friendly, geopolitically favorable locations,” said Luis Azevedo, Bravo’s chairman and CEO.

He will be succeeded by Richard Stewart, current head of the company’s operations in Southern Africa, who will assume the role of CEO-designate starting March 1 while continuing his regional responsibilities.

Froneman, 65, has led Sibanye since its inception in 2013, when the company—then known as Sibanye Gold—was formed through the consolidation of three old Gold Fields mines. Under his leadership, Sibanye transformed into a diversified mining giant with gold and platinum group metals (PGM) operations across Southern Africa and the United States.

“Neal leaves behind a proud legacy at Sibanye-Stillwater and in the South African mining industry, which is testament to his strategic vision and inspirational leadership,” board chair Vincent Maphai said in a statement.

“He still has the same enthusiasm for what he does, and has lost none of his drive [but] wishes to spend more of his time with his family and loved ones and on his many interests.” 

During his tenure, Froneman expanded Sibanye-Stillwater into critical minerals, notably lithium, through the acquisition of a stake in Finland’s Keliber Lithium project, a joint venture with the Finnish government. The company is also involved in the Rhyolite Ridge lithium project in the US.

Sibanye has further diversified into zinc, acquiring Australia’s Century mine after taking over local producer New Century Resources in 2023.

Profit in 2024 likely declined to between 6.3 billion rand ($339 million) and 7.6 billion rand, from 13 billion rand the previous year, the Johannesburg-based company said Thursday in a statement. Earnings were also hit by 1.9 billion rand of asset writedowns, mainly relating to the coarse particle recovery technology at its Mogalakwena mine.

Anglo American Plc announced plans to exit its controlling stake in Johannesburg-listed Amplats last May. It’s part of a wider restructuring program that was unveiled in response to an unsolicited $49 billion takeover proposal by BHP Group. Anglo has since sold part of its stake in Amplats to increase the South African unit’s free float ahead of a full exit.

Amplats and its peers in South Africa – by far the world’s largest producer of platinum – have been battling a prolonged period of weak prices that’s slashed profits and forced cost-cutting. In the longer term, the firms are focused on finding alternative sources of consumption to replace dwindling demand from the auto sector, which uses PGMs to curb emissions in gasoline and diesel vehicles.

(By Dylan Griffiths)

Read More: Anglo Platinum CEO sees investor interest ahead of spinoff

The Australian mining giant and the Swiss commodities trader and miner have recently held “early-stage talks” about a deal, according to the newswire adding that “it’s unclear whether the talks are still live.”

Rio Tinto is the world’s second most valuable mining company and shares with its Melbourne-based neighbour BHP the distinction of being valued at more than $100 billion, but only just.  

Rio Tinto’s stock was worth $103 billion on Thursday while Glencore, which in 2023 made an unsuccessful bid for Canada’s Teck Resources, is valued at $55 billion in London – placing it sixth.

As with BHP’s failed attempt to acquire Ango American last year a Rio Tinto and Glencore combination is centred around copper, thanks to the bellwether metal’s bright prospects as the central commodity enabling the global energy transition.

Together, Rio and Glencore’s copper production would rival that of BHP. Glencore’s guidance for 2024 is around the 1 million tonne mark while Rio Tinto’s upper target is 720 kilotonnes.  

A Rio Tinto-Glencore combination would leapfrog long-running number one BHP, which is worth $125 billion, but mining’s top tier is trading well below their peak reached in the second quarter of 2022. 

Another go

There have been many attempts for M&A at the top of the global mining industry, and not the first time Glencore had been at the centre of it.

In 2014, Glencore under former CEO Ivan Glasenberg, barely two years after gobbling up Xstrata for $90 billion to add a vast mining portfolio to its then high-flying trading business, made its first attempt to merge with Rio Tinto. That approach was quickly rebuffed.

The Glencore-Xstrata tie-up, that eventually resembled a hostile takeover more than a merger of equals, itself came about after Anglo American in June 2009 rejected a proposal to merge with Xstrata outright.

Rio Tinto does not have a great record of M&A either. In 2007, the company bought Alcan for $38 billion, paying a 65% premium for the Canadian aluminum maker to beat other suitors. In the following years as the cycle turned, Alcan-related writedowns ballooned to a stomach-churning $25 billion.

Another merger that quickly went nowhere was in 2008 when then BHP Billiton attempted to take over Rio Tinto. Regulators in a number of countries opposed the deal and BHP eventually walked away from the $116 billion deal with the onset of the great financial crisis, which did not spare the commodities world.

Big 5’s troubles 

News of a possible merger comes at a difficult time for mining’s traditional big 5 – BHP, Rio Tinto, Glencore, Vale and Anglo American – that trace their roots back many decades if not more than a century.

According to the MINING.COM Top 50 ranking, together the stalwarts shed 25.3% or $119.7 billion of their combined value in 2024 as their bread and butter commodities – copper and iron ore – went into retreat. 

The rampant dollar over the final months of 2024 only compounded losses: MINING.COM’s Top 50 considers performance in US$ market capitalisation terms, not share price changes in local currency on domestic exchanges.  

In the past these companies would, apart from wobbles as the Chinese supercycle became just a cycle, consistently occupy the top five slots in the ranking, supported by vast asset portfolios covering a range of commodities across many regions. 

Now the big diversifieds stocks – the mining industry’s now erstwhile version of the Mag 7 – make up less than 28% of the total index, down from a height of 38% at the end of 2022.  

Vale, down 44.9% for the year, a dismal outcome made worse by the 22% fall in the real last year, is the ranking’s worst performer of the year. 

Vale topped $100 billion in value briefly in 2022.  Now the Rio de Janeiro based giant’s market cap is down to $37.7 billion and the counter has dropped out of the top 10 position pushed out by Indonesian upstart Amman Mineral.

Anglo American is not a top 10 company anymore either but has the distinction of being the only one of the old guard which ended 2024 in positive territory, adding $5.5 billion or 18.1% last year. 

How much of that valuation is the lingering effects of BHP’s approach is debatable, but long term investors will still be carrying the shock of January 2016 when  Anglo’s market cap fell below $5 billion after it came close to suffocating under a pile of debt.  

Glencore trades but does not mine iron ore, iron ore has been the cash cow for the big 5 as China’s massive infrastructure investment sucked upwards of 80% of seaborne cargoes and prices flirted with $200 a tonne. 

In 2011, iron ore came with some of the fattest margins mining had ever enjoyed. With two-thirds of pre-tax profits coming from the steelmaking raw material that year BHP recorded a $24 billion windfall, Vale reaped $23 billion, Rio racked up $15 billion and Anglo made $11 billion. 

Today the steelmaking ingredient is back to double digits and a looming supply surge coupled with the prolonged construction malaise in China, offer little hope of a return to the go-go days.

Copper potential

After hitting record highs in 2024, copper looked poised to bring back windfall profits to the Big 5, but the rally soon fizzled.

With the copper-heavy Anglo deal dead in the water a pivot to organic growth is under way at BHP with up to $10bn being spent on Escondida alone, the world’s largest copper mine. 

Rio Tinto benefits from the fact that BHP has been working its Melbourne neighbour’s 30% stake in Escondida so hard while its Resolution copper project in Arizona languishes in permitting hell. 

The long-running battle to expand Oyu Tolgoi in Mongolia also seems to have reached a steady state, but Rio’s diversification bent and penchant for opportunistic investment are intact. 

Rio spent $6.7 billion to buy into lithium in 2024 just as its Jadar project in Serbia was thrown a lifeline. Whether the project goes into production is still in dispute, much like the prospects for lithium.  

Glencore finally got a piece of Teck Resources last year, but had to settle for the Canadian miner’s met coal business in a deal worth $6.9 billion. 

With geopolitics and global trade entering ever more dangerous territory, Glencore may find its trading business beginning to throw off cash.  The Swiss company which has for decades been negotiating commodity trading waters few are willing to wade into may also want to avoid the Las Bambas effect.  

The prospects of an IPO for Vale’s base metals spin-off seems to be vanishing into the distance and is now scheduled “going into 2027”.

Moreover, the $25 billion to $30 billion promised spending to build up the business seems lavish with copper and nickel’s medium term prospects less than inspiring.   

But they are to be fed from the nearly $1 billion capex South African Waterberg mine that hasn’t been built yet and would need to overcome that country’s trade restrictions on unrefined precious metal exports. That’s a major obstacle, according to BMO Capital Markets mining analyst Raj Ray.

“In order for the Waterberg concentrate to be processed in Saudi Arabia, a long-term export approval to ship concentrate from South Africa is required,” he wrote in a note to clients on Wednesday. “It is all conditional on the South African government granting the export permit.”

The partnership with Ajlan & Bros, an investment holding company with more than $15 billion in assets under management, includes a $4 million feasibility study split 50/50. There’s an option to form a joint venture to secure concentrate offtake from Platinum Group’s Waterberg PGM project.

The project’s September feasibility study estimates a 54-year mine life, with steady combined production of platinum, palladium, rhodium and gold (4E) of 353,208 oz. per year, peaking at 432,950 ounces.

Ore export ban

The company said late Tuesday it’s still negotiating with South African authorities. PGM wants to explore local beneficiation options and secure export permits.

“Resolving the export approval issue is essential to realizing the full potential of Waterberg,” Platinum Group’s CEO, Frank Hallam, said in a September news release.

While the goal is to export the ore, there is a potential local opportunity. South African PGM smelters may seek Waterberg’s sulphide-rich concentrates to optimize furnace recoveries. They face depleted reserves from other PGM mines on the platinum-rich Merensky Reef and an increased reliance on Upper Group 2 ore, which contains chromite and aluminum silicate minerals and fewer base metals, according to the company.

Waterberg, in the Bushveld Igneous Complex, has one of the country’s largest untapped PGM resources. It has proven and probable reserves of 246.2 million tonnes at 2.96 grams 4E per tonne for 23.4 million oz. of metal.

The capital cost totals $946 million, with $776 million needed during the peak stage. After-tax cash flow over the mine’s life could reach $6.5 billion, with on-site cash costs of $658 per oz. and all-in sustaining costs of $761 per ounce.

Proactive Saudis

Ajlan & Bros, which first partnered with Platinum Group in December last year for the refinery project, plans to complete a definitive feasibility study for the smelter. No timeline for its completion has been given.

A market study has already found that recycling PGM-bearing materials, like automotive and petrochemical catalysts from the Gulf region, could diversify feedstock and reduce the refinery’s reliance on Waterberg concentrate. Saudi Arabia’s Ministry of Investment pledged to help with strategic guidance and financial evaluations.

The project aims to support Saudi Arabia’s Vision 2030 strategy to expand mining and industry. The strategy includes the Global Supply Chain Resilience Initiative, under which this project falls. It aims to strengthen supply chains, attract export-focused investments, and support economic diversification.

Shares in Platinum Group Metals closed flat at C$2.25 apiece on Wednesday. They have ranged between C$1.30 and C$3.13 over the past 12 months, and it has a market capitalization of C$253.9 million.

The company said on Monday that its full-year nickel production forecast was now at 196,000-204,000 metric tons, up from 184,000-194,000 tons previously. The new target was still below the 209,000 tons produced in 2023.

The company said it had produced 146,210 tons of nickel in the first nine months of the year as the furnace at its flagship Nadezhda smelter went back into operation after major repairs in August.

As a result, the company reported a 16% quarter-on-quarter increase in nickel output in the third quarter.

Its palladium production guidance was increased to between 2.624 million and 2.728 million ounces, up from 2.296 million to 2.451 million ounces previously. Palladium output was up 1% year on year at 2.156 million ounces in the nine months of 2024.

Nornickel’s operations director Alexander Popov said the company increased nine-month copper and palladium output year on year while platinum and nickel were unchanged.

The “positive dynamics” were attributed to improved operational efficiency and increase mined ore, he said in a statement.

Nornickel is not subject to direct Western sanctions, though sanctions against Moscow have prompted some Western producers to avoid buying Russian metal and complicated payments, leading Nornickel to redirect sales to Asia.

(By Anastasia Lyrchikova and Gleb Bryanski; Editing by David Goodman)

The move, Blue Evolution said, creates a combined entity that will leverage enhanced R&D capabilities to drive innovation and commercialize new seaweed-based products across multiple sectors – agriculture, biomaterials – and critical minerals.

In December of last year, the US Advanced Research Projects Agency–Energy (ARPA-E) first announced its selection of scientific teams to explore the feasibility of extracting critical minerals from ocean macroalgae.

In July this year, Blue Evolution announced a groundbreaking advancement in sustainable biomining after it partnered with Pacific Northwest National Laboratory (PNNL) and Virginia Tech to develop a revolutionary method for sustainably extracting critical minerals and rare earth elements from seaweed.

The company operates seaweed farms in California and Alaska, and this month finalized a joint venture with the Māori Iwi Tribe to scale regenerative seaweed farming in Aotearoa, New Zealand.

From biofuels to rare earths

Blue Evolution CEO Beau Perry has been working with ARPA-E since 2017, first on large-scale systems for cultivation of seaweed for biofuels in Kodiak, Alaska, testing new hardware to grow seaweed in abundance, sustainably and economically.

Alaska is unparalleled in the US in terms of seaweed farming because of its size, environmental conditions and infrastructure. Perry noted both the state and the public are much more receptive to seaweed farming than to mining projects.

“It’s a relatively new industry. In post-war Japan, the coastal seaweed the Japanese had harvested for a long time was kind of destroyed…A British woman had closed the life cycle on nori in the early 50s. Seaweed farming was fairly new as a major agricultural sector, but now we grow, globally, 30 million tons of it,” Perry told MINING.com in an interview.

More than half of it is grown in China, but also Japan, Korea, Philippines and Indonesia.

The United States only entered the market ten years ago, and Perry said the US has grown a couple thousand tons so far.

Of over 10,000 species of seaweed worldwide, 300 species have been commercialized. Blue Evolution is working with six different species – four that they are growing in Alaska. Perry said seaweed has the potential to enter multiple markets because of its sustainability.

“It soaks up a lot more carbon than any terrestrial biomass per area, and it really only needs sunlight and seawater,” he said.

“We were looking [at] how to render biofuels from seaweed. PNNL was doing very in-depth content analyses of different samples of different species from different locations in our farmer network. We worked with different farmers that we’ve helped set up in Alaska, including the first ever commercial farm in Kodiak.”

The team started to find some unusual levels of minerals designated as in the strategic interest of US economic development and national security, but Perry said what got the Department of Energy’s attention was the rare earths.

The discovery is a positive development for a nascent North American rare earths market and taps into the broader issue of the glaring lack of domestic production. China has a near monopoly on mining and refining the group of 17 metals that are crucial to the development of smart electronic devices and wind turbines, and which are notoriously difficult to extract and expensive to process.

“This was sort of a beautiful accident, and it’s all a function of what’s in the water where the seaweed is growing,” Perry said.

“They’re a prolific sponge – they soak up nitrogen, phosphorus, carbon and a lot of minerals, and so in this first pass at the content analysis, we got a certain set of signals around REEs and precious metals, like rhodium, palladium and scandium.”

Each species of seaweed is metabolically prone to take up a certain set of minerals, and Perry noted some are really fascinating.

“We’ve seen sort of peaks and flat lines from different locations around the globe, and now we’re starting to fill in the puzzle of which seaweed could grow where to get what minerals,” he said.

“It’s clear that each one is taking up some combination of precious minerals, REEs and these other strategic minerals.”

The team has preliminary data and is working to understand which species, where, how they are grown, and determining scalable extraction methods.

“There’s kind of this matrix of ‘what am I growing the seaweed for?’ I think critical minerals past a certain scale will always be part of that based on what we’re seeing,” Perry said. “In certain locations, that might be the primary one if we find a species that really soaks this stuff up. We’re talking parts per million, and even parts per billion as a baseline. It’s perfectly standard in mining.”

Doubling seaweed value

Perry said the company is forging ahead with a “very critical mineral centric expedition” to find if there are places to focus on critical minerals and develop farms that are primarily oriented towards producing them.

“It’s possible that the critical minerals are disruptive to seaweed farming economics generally. They could double the value of the biomass,” he said.

“If I were to grow at a level where … at a significant scale relative to that market, the amount of critical minerals that will be running through our supply chain will be significant. In some cases, maybe fundamentally changing the supply picture for specific critical minerals.”

“There are some tricks that we’re going to explore to really enhance the amount of rare earths per ton of biomass. It’s taking these things up all the time.

There are ways to coax maybe orders of magnitude more than we’re finding by accident, not really trying. We can do things at the genetic level, selecting for strains that are going to bioaccumulate more of a given target critical mineral.”

The goal, Perry said, is to really understand what’s possible from an extraction standpoint.

“There’s a certain amount of critical minerals that are economically recoverable from a site, but around it are a million years of sediment that the seaweed will be sort of steeped in, like a sponge. And that yield should actually increase over time, given that the baseline of those minerals should stay the same pretty much over a long period of time. And we’re going to get better at getting the seaweed to accumulate them and getting them out.”

When you think about a seaweed farm as a mine, it’s unlikely to run out anytime soon,” Perry said. “It will be replenished constantly by the ocean. So that, I think, from a mining perspective is pretty radical – I don’t need to spend $100 million to maybe break ground on a mine in 20 years.”

The industry body, funded by South African platinum miners Anglo American (LON: AAL), Northam Platinum, Sedibelo Platinum Mines, Impala Platinum Holdings (JSE: IMP), and Tharisa (JSE: THA) – estimates the global industry has shed around 10,000 jobs this year alone.

The WPIC’s latest report highlights the significant impact of declining platinum group metals (PGMs) prices on the sector, especially in South Africa, which accounts for about 70% of global output.

The plunge in PGMs prices has been a key driver behind the current challenges in the sector. Platinum, used in automotive catalytic converters, jewellery, and various industrial applications, has seen demand volatility due to shifts in global markets and the transition toward greener technologies.

The pressure of weak prices on margins has forced companies to slash their workforce in order to remain viable. According to the WPIC, the sector is now operating at levels last seen before the pandemic, which caused major disruptions and uncertainty across global commodity markets.

Long-term production concerns

While job cuts have provided short-term relief for mining companies, the WPIC is concerned about the long-term consequences. Reducing the workforce could erode South Africa’s production capacity, leading to a potential shortfall in global supply over time, it said. 

Production in South Africa this year is expected to fall 2% year-on-year to around 3.9 million ounces.

“The current strategy may risk long-term production erosion,” the Council said, emphasizing the need for a careful balance between cost-cutting and maintaining sustainable output levels.

The WPIC warns that without careful management, the sector could face a deeper supply crisis in the future, which could destabilize not only South Africa’s mining sector but also global platinum markets. 

 With declines in Russian output, global production this year is seen falling 2% to 5.5 million ounces, a four-year low, the Council said.

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

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

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

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

Electric vehicles

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

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

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

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

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

Recycling, industries

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

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

Investors

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

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

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

Jewelry, hydrogen

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

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

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

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

The sale is part of a comprehensive sweeping restructuring program triggered by a failed takeover attempt by its larger rival BHP (ASX, LON, NYSE: BHP). The explosion and subsequent fire at the company’s Grosvenor coal mine in Queensland rose questions about the process. Anglo continued as planned, enlisting the services of three top banks in July to assist in the sale.

Bids will be open for Anglo’s Grosvenor and Moranbah North mines, as well as three smaller mines in Queensland, according to two unnamed sources cited by Reuters.

Analysts predict that potential bidders may include Glencore (LON: GLEN), already a major supplier of Australian coal, Indonesian companies and Yancoal (ASX: YAL), which operates several coal mines in the country. 

Glencore recently abandoned plans to spin off its coal unit following discussions with shareholders, who pushed back against the move. The Swiss miner and commodities trader’s business has long been centred around the fossil fuel, and the prospect of abandoning it seemed improbable for a company built on the commodity.

Following the announcement, chief executive Gary Nagle said the company would even consider buying more steelmaking coal assets, given they were “fair priced” and located in “the right place”.

A group of Indonesian companies led by Golden Energy and Resources is reportedly considering making an offer. Delta Dunia Group, a Jakarta-listed company that operates the BUMA coal mining services business in Australia, announced in July its intention to expand through acquisitions.

China-backed Yancoal is another strong candidate to bid for Anglo’s assets. The miner said on Monday it was on the hunt for metallurgical coal deals in Australia, backed by A$1.5 billion ($1bn) in available funds. If successful, the move would position Yancoal as one of the nation’s top producers, capitalizing on rising demand across Asia.

The move by the world’s second largest miner will boost its shareholding in Sovereign to 19.76%, as it continues to raise its exposure to battery minerals.

The investment builds on a previous deal one year ago, when Rio Tinto spent A$40.4 million ($27m) to take an initial 15% interest in the owner of the world’s largest rutile and second largest flake graphite deposit.

The Kasiya orebody contains 1.8 billion tonnes at 1% rutile and 1.4% graphite, resulting in 17.9 million tonnes of contained natural rutile and 24.4 million tonnes of contained graphite.

Rio Tinto’s further investment represents another significant step towards unlocking a major new supply of low-carbon footprint natural critical minerals, the miners said in the statement.

Sovereign managing director Frank Eagar said the company has made significant progress in advancing Kasiya over the last year, thanks to Rio’s involvement. This includes the successful launch of a pilot phase in May.

Rio not only is one of Sovereign’s top shareholders, but also offers the Australian junior support and guidance on the technical and marketing aspects of the Kasiya project through a joint committee set up by the two companies.

The mining giant already produces titanium dioxide from rutile at its operations in Madagascar, South Africa and Canada. Titanium is used in solar panels, paint and aircraft because of its ability to withstand temperature extremes.

The basket price of the platinum group metals (PGMs), which are chiefly used in vehicle exhausts to neutralise harmful engine emissions, slumped in 2023 due to worries that rising market share of PGMs-free, battery-powered electric vehicles (BEVs) would reduce demand in future.

Demand for the PGMs from the auto sector rose last year as the 2021-2022 chip crisis had run its course, but the pace of BEVs penetration remained the main challenge for the PGMs demand, Metals Focus said in its 104-page report.

BEVs currently account for 14% of auto production, up from 11% at the beginning of 2023, Metals Focus said. This impact has been partly offset by a pickup in hybrid vehicles, which need PGMs. These now have a 22% share of light duty vehicles, up from 18% at the start of 2023.

The competition between the metals inside the group saw a change in 2023 with the slowing substitution of palladium with platinum as the two approached price parity.

“Going forward, we expect substitution will stall,” Metals Focus said.

On the supply side, lower palladium and rhodium prices have squeezed margins, with half of South African mines operating uneconomically on an all-in sustaining cost basis, an industry metric that reflects total expenses, at the end of 2023.

Many miners sought to reduce costs, and this process will keep supply constrained this year causing another year of structural deficit, which in its turn is going to be covered by existing above-ground stocks.

“Trading behaviours that dominated 2023 will continue to play a large role in shaping prices in 2024,” Metals Focus said.

In 2024, Metals Focus expects average prices for platinum to slide by 1% to $960 per troy ounce, for palladium to decline by 23% to $1,030, and for rhodium to fall 28% to $4,750.

PGMs market balance and price forecast by Metals Focus

(By Polina Devitt; Editing by Nick Macfie)

The autocatalyst maker added that it expected all platinum group metals (PGM) – platinum, palladium, and rhodium – to remain in deficit in 2024.

The three metals are used in autocatalysts that reduce emissions from vehicle engines, with platinum also used in other industry and for jewellery and investment.

Johnson Matthey (JM) said it expected the platinum market’s deficit to increase to 598,000 ounces this year from a shortfall of 518,000 ounces in 2023.

It forecast platinum demand would stabilize at around 7.61 million ounces, with small decreases in automotive and jewellery balanced by an uptick in investment.

Auto sector consumption is expected to slip 1.3% in 2024, while primary supply is projected to fall 2% as Russian shipments return to more normal levels following heavy selling of mined stocks in 2023, JM said.

For palladium, JM said use by automakers would fall about 7%, reducing overall demand to 9.73 million ounces and cutting the market deficit to 358,000 ounces from 1.02 million ounces last year.

For rhodium, auto consumption is also expected to fall – by about 6% – dragging total demand down 4% to 1.06 million ounces. The rhodium market is likely to be undersupplied by 65,000 ounces, down from 125,000 ounces in 2023, JM said.

“Automotive and industrial users bought more metal than they needed during 2020-2022 to mitigate price and supply risks. Since then, consumers have been using up excess PGM inventory, and some have even sold metal back to the market,” Rupen Raithatha, market research director at Johnson Matthey, said.

At around $950 an ounce, palladium is trading lower than platinum at $960, pressured by growing demand concerns.

Rhodium is trading around $4,700 an ounce, down about 84% from all-time highs reached in March 2021.

(By Brijesh Patel; Editing by Mark Potter)

BHP’s unsolicited offer “significantly undervalued” the 107-year-old mining company and would be “highly unattractive” to its shareholders, Anglo said on Friday in a response widely expected by analysts. 

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects,” Anglo chairman Stuart Chambers said in the statement.

The bid contemplated a structure which the board believes is “highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent in the proposal, and significant execution risks.”

Analysts and some of Anglo’s top investors agreed on Thursday that BHP’s initial offer was significantly lower than the kind of price that would compel the miner to consider the proposal. If BHP wants to initiate negotiations, it will need a sweeter offer.

BHP’s proposal is valued at £25.08 per Anglo share, a 14% premium to the target company’s closing price on Wednesday. For Jefferies’ Christopher LaFemina, a price of at least £28 per share would be necessary for serious discussions to take place.

“If we include our estimate of synergies on an after-tax present value basis, we estimate Anglo fair value to be 2824p per share, which equates to a $42.6 billion equity value. That is 28% above the most recent Anglo share price, and we believe it is a reasonable starting point,” LaFemina wrote.

“Anglo American shareholders may consider fair value closer to the share price in 2023 before operational issues emerged and other suitors may be compelled to act at this price,” said James Whiteside, metals and mining research director at Wood Mackenzie.

BMO analyst Alexander Pierce believes there is room for an improved offer adding that it would be up to management to show how the merger can drive value. “The combined entity would have EBITDA of about $33 billion and would easily be the largest mining company globally, including the world’s largest copper producer at nearly 2Mtpa attributable, which could bring some regulatory scrutiny,” Pierce wrote. “However, copper exposure would reduce overall for Anglo American shareholders, while iron ore would increase.”

Elliot’s $1 billion play

Amid the buzz triggered by the potential tie-up, news of Elliott Investment Management silently building a nearly $1 billion stake in Anglo American, has come to light. The move, reported first by Bloomberg, adds to the challenges Anglo American faces following its refusal of BHP’s approach.

The activist hedge fund, headed by Paul Singer, has been acquiring shares over the past few months, according to sources familiar with the matter quoted by Bloomberg. 

The size of the stake would place Elliott as one of the miner’s top 10 shareholders.

The activist investor is not a stranger to mining. In 2017, it acquired a large stake in BHP and pressured the company to divest certain oil assets. By 2021, the world’s largest miner had made agreements to further reduce its involvement in fossil fuels, such as selling its oil and gas operations to Woodside Petroleum Ltd.

Both Elliott and Anglo American declined to provide comments on the matter.

Copper thirsty

A merger would give BHP about 10% of global copper production. It would also boost its presence in the world’s top copper producing countries, Chile and Peru, as it would gain access to four of the world’s largest copper mines — Collahuasi (with ownership of 44%), Los Bronces (50.1%), El Soldado (50.1%) and Quellaveco (60%). This would improve the company’s exposure to the metal, a key actor in the world’s ongoing energy transition, by about 40%. 

“With copper representing 30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materializes,” Anglo chairman Chambers said.

Anglo has been a takeover target in recent years after output fell and costs mounted. Potential suitors have been discouraged along the way by Anglo’s complex business structure and mix of commodities, including platinum and diamonds.

Under takeover rules, BHP is required to either make a solid offer for Anglo American by May 22 or walk away.

The potential agreement is already being compared to BHP merger with South Africa’s Billiton in 2001. Another BHP mega-merger attempt was its 2007 bid to acquire rival Rio Tinto, which was rebuffed.

The precious metals producer kicked off in October a business review at its gold mines in the home country, which revealed the need to address losses at Beatrix 1 shaft and Kloof 4 shaft. 

The precious metals producer noted Beatrix 1 has failed to achieve the planned production, while Kloof 4 shaft has been already shut. 

The planned move is in line with the Sibanye-Stillwater’s previous cost-cutting measures, that saw it axe jobs at all its platinum group metal (PGMs) operations, including those in the United States.

Prices for the main PGMs — platinum and palladium — plummeted by about 38% and 63%, respectively, in 2023.

The company has faced headwinds at its US operations beyond issues related to the price collapse of PGMs, used in catalysts that curb toxic vehicle emissions. Those mines have been affected by weather-related incidents, particularly flooding.

Job losses are also expected at the miner’s Kloof 2 plant, which has had insufficient processing material after the Kloof 4 shaft was closed last year, Sibanye-Stillwater added.

“We continue to act prudently to protect the balance sheet and ensure the sustainability of the Group. We are committed to constructively engaging with affected employees and through their representatives to minimize job losses,” chief executive Neal Froneman said in the statement.

Sibanye-Stillwater’s boss recently indicated his company is considering raising about $500 million through prepayment arrangements, such as metals streaming, to strengthen its cash position.

The Stillwater West project – which is also prospective for copper, cobalt, platinum group elements and gold – represents the largest nickel resource in an active US mining district, according to estimates by Stillwater Critical.

In a January 2023 technical report, the company defined 1.6 billion lb. of nickel, copper and cobalt in inferred resources, and 3.8 million oz. of palladium, platinum, rhodium and gold, all contained within 255 million tonnes of material at an average grade of 0.39% nickel equivalent (or 1.19 g/t palladium equivalent).

This resource was 62% higher in tonnage compared to the project’s inaugural estimate, and is contained within five deposits in the 9-kilometre central area of the property, all of which are open along strike and at depth.

The Stillwater district itself has a rich mining history for PGEs, nickel, copper, chromium as well as other commodities. The Stillwater West project is located right next to the high-grade PGE mines operated by Sibanye-Stillwater, which have over 14 million oz. of palladium and platinum in past production.

“We are pleased to have Glencore’s continued support through their participation in this placement as we advance our flagship Stillwater West project as a large-scale source of nine metals that are now listed as critical in the US,” Stillwater CEO Michael Rowley said in a news release.

In total, the company has raised C$2.5 million via a private placement of units priced at C$0.14 each, with Glencore’s order being by far the largest. The units have an exercise price of C$0.21, and would provide up to C$1.875 million in additional funding should they be exercised.

Last June, the commodity trading giant made its first investment by purchasing C$4.94 million worth of Stillwater Critical’s units, then priced at C$0.25 each, to gain a 9.99% interest in the company on a non-diluted basis.

Shares in Stillwater Critical Minerals closed Thursday’s session 3.5% higher at C$0.145 apiece. The company has a market capitalization of C$28.7 million.

Along with close relative rhodium, the two metals are chiefly used in the catalytic converters used to clean exhaust fumes by the auto sector, an area that accounts for some 40% of platinum demand, and 80% of palladium offtake.

Losing that demand will be significant for all three metals – and for palladium and rhodium, there is currently no other industry that can realistically replace the volumes that will be lost as consumers transition to electric vehicles, which don’t need autocatalysts.

Analysts see a long tail for PGMs use in traditional internal combustion engines, and a drop in supply as mining becomes less economic has kept prices relatively well supported. But with fellow precious metal gold at all-time highs this year, that’s a disappointing performance.

“The PGM sector is facing a shift in which palladium and rhodium will see declining demand with no major alternative demand sector on the forecast horizon,” Wilma Swarts, head of PGMs at consultancy Metals Focus, told Reuters.

Estimates of when the erosion of PGM demand from auto makers will become significant vary, and depend on views of future sales of pure internal combustion vehicles versus hybrid or electric vehicles.

According to analysts at Macquarie, demand for both platinum and palladium from the auto sector will start falling beyond 2025.

Earlier this decade palladium was a standout performer among precious metals, more than tripling in price between late 2018 and early 2022 to more than $3,000 an ounce. At just over $1,000 an ounce, it has now given up the price premium it had held to platinum since 2018.

Both palladium , down 9% so far this year after a 39% slump in 2023, and rhodium, a small, illiquid market which has clawed back a little ground this year after dropping almost two-thirds in 2023, have further to slide, according to analysts whose estimates cover the next five years.

But platinum , down 9% so far in 2024 after sliding 8% in 2023, may fare better. It is the only major metal in the group that is expected to rise by 2028 from last year’s level, helped by demand in non-auto industries such as jewellery.

Producers and analysts also hope the metal has potential to benefit from new demand from the hydrogen economy via fuel cell vehicles, a slower-growing competitor to battery electric technology in cars.

But hopes for an acceleration of demand from fuel cell vehicles appear to be built on shaky ground.

“The current pace of deployment of fuel cell vehicles is certainly disappointing,” said one person at a company involved with the technology.

In Macquarie’s base case scenario, total annual hydrogen-related demand will struggle to rise materially above 250,000 ounces of platinum by 2030. For comparison, the auto sector currently consumes 3.3 million ounces of platinum a year.

Analysts are more certain that the supply side will support platinum in the future through declining output from mines.

The World Platinum Investment Council, whose members are major Western producers, expects platinum to be in an average annual deficit of 500,000 ounces until 2028. Shortages will cut above-ground stocks to six weeks of demand by end-2028 from 23 weeks at end-2023.

Macquarie’s five-year outlook, which sees average 2028 palladium prices falling by 40% from 2023 levels to $800 per ounce, conversely expects platinum prices to rise to $1,250 an ounce by 2028, up 29% from 2023.

For South Africa’s platinum miners, that is cold comfort. According to consultancy Metals Focus, South African PGM miners currently get just 35% of their revenue from platinum.

Even at current prices, around half of South African mines are producing their PGMs at a loss, prompting them to rely on other products such as chrome. Mines in North America are under pressure too, according to Metals Focus.

“Palladium was over-valued compared to platinum in recent years,” said a major PGMs producer. “That was certainly very pleasant, but it’s over.”

(By Polina Devitt and Ashitha Shivaprasad; Editing by Veronica Brown and Jan Harvey)

African Rainbow Minerals (ARM) said on Friday it was deferring plans to expand output at its Bokoni mine due to low platinum group metal (PGM) prices after reporting a 43% drop in its half-year profit.

The diversified South African miner’s headline earnings declined to 2.96 billion rand ($158.5 million) in the six months to December 2023, from 5.17 billion rand previously, as lower thermal coal and PGM prices hit income.

ARM cut its interim dividend to 6 rand per share, from 14 rand per share previously.

The miner acquired the Bokoni mine in South Africa from Anglo American Platinum and Atlatsa Resources Corporation in 2022 as part of its plans to expand PGM output.

Bokoni mine, which had been put under care and maintenance by its previous owners in 2017, resumed production in November 2023, with plans to further expand output.

However, the sharp fall in PGM prices over the past year, mainly due to weaker demand in China and an uncertain global economic outlook, has forced South African miners, who account for 70% of world output, to suspend projects and cut costs.

ARM said a bankable feasibility study for the phased development of Bokoni, a key step towards securing funding, had been deferred “due to depressed commodity prices and uncertain immediate outlook”.

The company said the prices of palladium and rhodium fell 42% and 70%, respectively, during the period under review, resulting in a 40% decline in the average realized rand price for its set of PGMs.

ARM said its immediate priority is to conserve cash while ramping up production on a phased basis from the installed capacity of 60,000 metric tons of ore per month using existing infrastructure.

($1 = 18.6702 rand)

(By Nelson Banya; Editing by Jamie Freed, Eileen Soreng and Emelia Sithole-Matarise)

The precious metals producer kicked off in October a restructuring process at its four loss-making mines that was expected to result in the loss of 4,095 jobs. 

Sibanye-Stillwater said the reduction in the number of layoffs was possible thanks to strategic decisions taken in consultation with interested parties. These include going ahead with the announced closure of the Simunye shaft, which ceased production in 2023, as well as keeping the 4 Belt (4B) shaft at Marikana open.

The miner said that the Marikana mine shaft, which employs 1,496 permanent workers and 54 contractors, will only stay in production if it does not run up net losses on a monthly basis.

Two other shafts, Rowland and Siphumelele, which were hit by operational and geological issues, “have been repositioned for sustainable levels of production at a lower cost structure”, Sibanye-Stillwater said.

The Johannesburg-based firm noted that almost 1,300 employees had voluntarily left their jobs or accepted early retirement packages, while 467 people left since September due to “natural attrition”.

The company said earlier this week that it expects to report a 91% loss for 2023 due to multiyear-lows for platinum-group metals prices. It also flagged an impairment of 47.5 billion rand ($2.58 billion). 

Palladium and platinum prices decline has driven producers in South Africa, including Sibanye-Stillwater to apply severe cost-cutting measures. 

Impala Platinum Holdings has offered voluntary job cuts, including at its deep-level Rustenburg complex, while Anglo American Platinum (Amplats) has announced plans to cut 3,700 jobs after its profit plunged 71% last year.

The company said it expects to report in March a loss per share for 2023 of 12.68 rand to 14.01 rand, compared with a profit of 6.51 rand a share the previous year. This is equivalent to an eye-popping 91% drop in annual profit.

The announcement comes only two months after the South African miner announced it would lay off 1,500 workers from its gold mines. It also said at the time it had begun talks that could affect 4,000 more employees at its platinum group metals (PGMs) operations, including those in the United States.

“We have already taken proactive steps to address loss-making production at unprofitable operations and the group remains focused on ensuring the sustainability of our business and delivering on our strategical essentials through this period of low commodity prices,” the company said in a statement.

Sibanye shares fell more than 5% in afternoon trading in Johannesburg, closing at ZAC 1,994. The stock has lost almost 48% of its value in the past year, mainly due to the prices decline of palladium and rhodium.

The sharp drop of PGMs prices decline has driven producers to apply severe cost-cutting measures. Anglo American Platinum said on Monday it would cut 3,700 jobs at its South African operations, or 17% of the Anglo American unit’s workforce. 

Impala Platinum Holdings has offered voluntary job cuts, including at its deep-level Rustenburg complex.

Despite the challenges, Sibanye noted that all its South African and Australian operations were profitable before the end of the fourth quarter of 2023. 

RELATED: In election year, South African mines bleed cash, jobs

A year where the gold price sets an all-time record should be unalloyed good news for the mining and exploration industry, which despite all the buzz surrounding battery metals and the energy transition still represents the backbone of the junior market.

Metal and mineral markets are volatile at the best of times – the nickel, cobalt and lithium price collapse in 2023 was extreme but not entirely unprecedented. Rare earth producers, platinum group metal watchers, iron ore followers, and gold and silver bugs for that matter, have been through worse.

Mining companies have become better at navigating choppy waters, but the forced closure of one of the biggest copper mines to come into production in recent decades served as a stark reminder of the outsized risks miners face over and above market swings.

Panama shuts down giant copper mine

After months of protests and political pressure, at the end of November the Panama government ordered the closure of First Quantum Minerals’ Cobre Panama mine following a ruling by the Supreme Court that declared the mining contract for the operation unconstitutional.

Public figures including climate activist Greta Thunberg and Hollywood actor Leonardo Di Caprio backed the protests and shared a video calling for the “mega mine” to cease operations, which quickly went viral. 

FQM’s latest statement on Friday said Panama’s government hasn’t provided a legal basis to the Vancouver-based company for pursuing the closure plan, a plan that the industries ministry of the central American nation said will only be presented in June next year.

FQM has filed two notices of arbitration over the closure of the mine, which has not been operating since protesters blocked access to its shipping port in October. However, arbitration would not be the company’s preferred outcome, said CEO Tristan Pascall.

In the aftermath of the unrest, FQM has said it should have better communicated the value of the $10 billion mine to the wider public, and will now spend more time engaging with Panamanians ahead of a national election next year. FQM shares have bounced in the past week, but is still trading more than 50% below the high hit during July this year.

Projected copper deficit evaporates

Cobre Panama’s shutdown and unexpected operational disruptions forcing copper mining companies to slash output has seen the sudden removal of around 600,000 tons of expected supply would, moving the market from a large expected surplus into balance, or even a deficit.

The next couple of years were supposed to be a time of plenty for copper, thanks to a series of big new projects starting up around the world.

The expectation across most of the industry was for a comfortable surplus before the market tightens again later this decade when surging demand for electric vehicles and renewable energy infrastructure is expected to collide with a lack of new mines.

Instead, the mining industry has highlighted how vulnerable supply can be — whether due to political and social opposition, the difficulty of developing new operations, or simply the day-to-day challenge of pulling rocks up from deep beneath the earth.

Lithium price routed on supply surge

The price of lithium was decimated in 2023, but predictions for next year are far from rosy. Lithium demand from electric vehicles is still growing rapidly, but the supply response has overwhelmed the market.

Global lithium supply, meanwhile, will jump by 40% in 2024, UBS said earlier this month, to more than 1.4 million tons of lithium carbonate equivalent.

Output in top producers Australia and Latin America will rise 22% and 29% respectively, while that in Africa is expected to double, driven by projects in Zimbabwe, the bank said.

Chinese production will also jump 40% in the next two years, said UBS, driven by a major CATL project in southern Jiangxi province.

The investment bank expects Chinese lithium carbonate prices could fall by more than 30% next year, dipping as low as 80,000 yuan ($14,800) per tonne in 2024, averaging at around 100,000 yuan, equivalent to production costs in Jiangxi, China’s biggest producing region of the chemical.

Lithium assets still in high demand

In October, Albemarle Corp. walked away from its $4.2 billion takeover of Liontown Resources Ltd., after Australia’s richest woman built up a blocking minority and effectively scuppered one of the largest battery-metals deals to date.

Eager to add new supply, Albemarle had pursued its Perth-based target for months, eying its Kathleen Valley project — one of Australia’s most promising deposits. Liontown agreed to the US company’s “best and final” offer of A$3 a share in September — a near 100% premium to the price before Albemarle’s takeover interest was made public in March.

Albemarle had to contend with the arrival of combative mining tycoon Gina Rinehart, as her Hancock Prospecting steadily built up a 19.9% stake in Liontown. Last week, she became the single largest investor, with enough clout to potentially block a shareholder vote on the deal.

In December, SQM teamed up with Hancock Prospecting to make a sweetened A$1.7 billion ($1.14 billion) bid for Australian lithium developer Azure Minerals, the three parties said on Tuesday.

The deal would give the world’s no.2 lithium producer SQM a foothold in Australia with a stake in Azure’s Andover project and a partnership with Hancock, which has rail infrastructure and local experience in developing mines.

Chile, Mexico take control of lithium

This week Chile’s President Gabriel Boric hailed the formation of a new government-controlled lithium partnership that fuses assets of state-run Codelco with private miner SQM, as the leftist leader advances his push for greater public control over the battery metal. 

SQM said it would partner with copper giant Codelco for the future development and production of the metal in the Atacama salt flat, in a tie-up set to kick off in 2025 and run through 2060.

The deal gives Codelco majority control in line with the president’s plans announced in April to strengthen state control of lithium to generate more broad-based benefits from surging demand and to allow only public-private partnerships to participate in its exploitation.

For much of the year, the firms had been locked in talks over the future of lithium mining and production in the salt flat, located in Chile’s north and the home to 90% of the nation’s lithium reserves. The South American country has the world’s largest proven lithium reserves.

Mexican President Andres Manuel Lopez Obrador in February signed a decree handing over responsibility for lithium reserves to the energy ministry.

Lopez Obrador urged the private sector to work with the new state miner, saying the size of the investment needed means the government needs partners.

But analysts argue that companies are more likely to focus near-term investments in Chile or Argentina’s sprawling salt flats, where industries are more established and policies more market-friendly.

In August, Chinese lithium giant Ganfeng said Mexico’s mining authorities had issued a notice to its local subsidiaries indicating nine of its concessions had been terminated.

Gold to build on record-setting year

The New York futures price of gold set an all-time high at the beginning of December and looks set to surpass the peak going into the new year. 

London’s gold price benchmark hit an all-time high of $2,069.40 per troy ounce at an afternoon auction on Wednesday, surpassing the previous record of $2,067.15 set in August 2020, the London Bullion Market Association (LBMA) said.

“I can think of no clearer demonstration of gold’s role as a store of value than the enthusiasm with which investors across the world have turned to the metal during the recent economic and geopolitical turmoils,” said LMBA’s chief executive officer Ruth Crowell. 

JPMorgan predicted a new record back in July but expected the new high to occur in the second quarter of 2024. The basis of JPMorgan’s optimism for 2024 – falling US interest rates – remains intact:

“The bank has an average price target of $2,175 an ounce for bullion in the final quarter of 2024, with risks skewed to the upside on a forecast for a mild US recession that’s likely to hit sometime before the Fed starts easing.”

Even as gold climbed new peaks, exploration spending on the precious metal dipped. A study published in November overall mining exploration budgets fell this year for the first time since 2020, dropping 3% to $12.8 billion at the 2,235 companies that allocated funds to find or expand deposits.

Despite the sparkling gold price, gold exploration budgets, which historically have been driven more by the junior mining sector than any other metal or mineral, dropped by 16% or $1.1 billion year-on-year to just under $6 billion, representing 46% of the global total. 

That’s down from 54% in 2022 amid higher spending on lithium, nickel and other battery metals, a surge in spending on uranium and rare earths and an uptick for copper. 

Mining’s year of M&A, spin-offs, IPOs, and SPAC deals

In December, speculation about Anglo American (LON: AAL) becoming the target of a takeover by a rival or a private equity firm mounted, as weakness in the shares of the diversified miner persisted.

If Anglo American doesn’t turn operations around and its share price continues to lag, Jefferies analysts say they can’t “rule out the possibility that Anglo is involved in the broader trend of industry consolidation,” according to their research note.

In October, Newcrest Mining shareholders voted strongly in favour of accepting the roughly $17 billion buyout bid from global gold mining giant Newmont Corporation.

Newmont (NYSE: NEM) plans to raise $2 billion in cash through mine sales and project divestments following the acquisition. The acquisition brings the company’s value to around $50 billion and adds five active mines and two advanced projects to Newmont’s portfolio.

Breakups and spin-offs were also a big part of 2023 corporate developments.

After being rebuffed several times in its bid to buy all of Teck Resources, Glencore and its Japanese partner are in a better position to bring the $9 billion bid for the diversified Canadian miner’s coal unit to a close. Glencore CEO Gary Nagle’s initial bid for the entire company faced stiff opposition from Justin Trudeau’s Liberal government and from the premier of British Columbia, where the company is based.

Vale (NYSE: VALE) is not seeking new partners for its base metals unit following a recent equity sale, but could consider an IPO for the unit within three or four years, CEO Eduardo Bartolomeo said in October.

Vale recruited former Anglo American Plc boss Mark Cutifani in April to lead an independent board to oversee the $26-billion copper and nickel unit created in July when the Brazilian parent company sold 10% to Saudi fund Manara Minerals.

Shares in Indonesian copper and gold miner, PT Amman Mineral Internasional, have surged more than fourfold since listing in July and are set to keep rising after its inclusion in major emerging market indexes in November.

Amman Mineral’s $715 million IPO was the largest in Southeast Asia’s biggest economy this year and counted on strong demand by global and domestic funds.

Not all dealmaking went smoothly this year.

Announced in June, a $1 billion metals deal by blank-cheque fund ACG Acquisition Co to acquire a Brazilian nickel and and a copper-gold mine from Appian Capital, was terminated in September.

The deal was backed by Glencore, Chrysler parent Stellantis and Volkswagen’s battery unit PowerCo through an equity investment, but as nickel prices slumped there was a lack of interest from minority investors at the stage of the $300 million equity offering which ACG planned as part of the deal.

Talks in 2022 to acquire the mines also fell through after bidder Sibanye-Stillwater pulled out. That transaction is now the subject of legal proceedings after Appian filed a $1.2 billion claim against the South African miner.

Uranium upsurge

In late November uranium prices scaled $80 per pound for the first time in 15 years, driven by a resurgence in demand for nuclear power and supply disruptions.

Global yellowcake supply might reach 145 million lb. this year or next according to the World Nuclear Association. But annual demand is already at 180 million lb. and the industry group expects it to nearly double to 300 million lb. by 2040.

Some 60 nuclear plants are under construction globally and more are planned. Countries like Germany and Japan that considered phasing them out are reversing course.

Activity in northern Saskatchewan’s Athabasca uranium hotspot is intensifying. NexGen received environmental approval for its Rook I project in November, the province’s first OK for such a project in two decades. Denison Mines released a feasibility study for its Wheeler River project before investing in junior explorer F3 Uranium’s Patterson Lake North property.

Also, IsoEnergy took over Consolidated Uranium in September. Uranium Energy spent C$570 million over the past two years buying Uranium One, UEX Corp. and Rio Tinto’s Roughrider project. Cameco and Brookfield Renewable Partners in October closed their deal to buy Westinghouse’s nuclear plant construction unit for $7.9 billion.

Nickel nosedive

In April, Indonesia’s PT Trimegah Bangun Persada, better known as Harita Nickel, raised 10 trillion rupiah ($672 million) in what was then Indonesia’s largest initial public offering of the year. 

Harita Nickel’s IPO quickly turned sour for investors, however, as prices for the metal entered a steady and long decline. Nickel is the worst performer among the base metals, nearly halving in value after starting 2023 trading above $30,000 a tonne.

Next year is not looking great for the devil’s copper either with top producer Nornickel predicting a widening surplus due to lacklustre demand from electric vehicles and a ramp-up in supply from Indonesia, which also comes with a thick layer of cobalt:

“…due to the continuing destocking cycle in the EV supply chain, a greater share of non-nickel LFP batteries, and a partial shift from BEV to PHEV sales in China. Meanwhile, the launch of new Indonesian nickel capacities continued at a high pace.” 

Palladium also had a rough year, down by more than a third in 2023 despite a late charge from multi-year lows hit at the start of December. Palladium was last trading at $1,150 an ounce.

China flexes its critical mineral muscle

In July China announced it will clamp down on exports of two obscure yet crucial metals in an escalation of the trade war on technology with the US and Europe.

Beijing said exporters will need to apply for licenses from the commerce ministry if they want to start or continue to ship gallium and germanium out of the country and will be required to report details of the overseas buyers and their applications.

China is overwhelmingly the top source of both metals — accounting for 94% of gallium supply and 83% of germanium, according to a European Union study on critical raw materials this year. The two metals have a vast array of specialist uses across chipmaking, communications equipment and defence.

In October, China said it would require export permits for some graphite products to protect national security. China is the world’s top graphite producer and exporter. It also refines more than 90% of the world’s graphite into the material that is used in virtually all EV battery anodes, which is the negatively charged portion of a battery.

US miners said China’s move underscores the need for Washington to ease its own permit review process. Nearly one-third of the graphite consumed in the United States comes from China, according to the Alliance for Automotive Innovation, which represents auto supply chain companies.

In December, Beijing banned the export of technology to make rare earth magnets on Thursday, adding it to a ban already in place on technology to extract and separate the critical materials.

Rare earths are a group of 17 metals used to make magnets that turn power into motion for use in electric vehicles, wind turbines and electronics.

While Western countries are trying to launch their own rare earth processing operations, the ban is expected to have the biggest impact on so-called “heavy rare earths,” used in electric vehicle motors, medical devices and weaponry, where China has a virtual monopoly on refining.

Rhodium has lost two thirds of its market value and palladium a third during 2023, pushing the six-element PGM basket price to $1,250 per oz., two thirds lower than its peak in April 2021, the World Platinum Investment Council says in a report released on Thursday.

The PGM supply deficit is forecast at 8% of demand through 2027 while above ground stocks may fall by 70% during the period to 1.4 million oz., the council said. A quarter of mines are operating unprofitably and putting them on care and maintenance will worsen the supply problem, it said.

“The decline in PGM basket prices over the last 12 months has materially undermined the economic sustainability of significant portions of primary supply,” the council said. “Markets are already projected to be in deficit through our two- to five-year forecast horizon. This, we believe, strengthens the investment case for platinum.”

The price drop is partially due to how supplies from the main PGM producers South Africa and Russia haven’t been disrupted as much as the industry predicted. Declines in their currencies haven’t offset lower prices in US dollars and production cost inflation, putting profitability of their miners at risk. It is forcing mines to increase production to reduce unit costs, sell excess inventory to generate more cash, slash capital spending, renegotiate supply agreements and cut dividend payments.

Output at risk

Mothballing mines to weather the poor prices could put 1.3 million oz. of platinum output and 1.2 million oz. of palladium production at risk, the council said. Primary platinum production is forecast to average about 5.6 million oz. a year between 2020 to 2024, which is 9% lower than the five-year annual average production of 6.1 million oz. from 2015 to 2019, according to the report. Palladium output may fall 6%, the council said.

The ramp up of projects at Northam Platinum’s Booysendal, Eland and Zondereinde; African Rainbow Minerals’ Two Rivers; Implala Platinum Holdings’ (JSE: IMP) Styldrift and Zimplats; Sibanye-Stillwater’s (JSE: SSW; NYSE: SBSW) Stillwater and K4; and Anglo American’s (LSE: ALL) Motololo could add about 1 million oz. of annual PGM production growth, the council said.

Mines depend on prices when fixed costs account for about a quarter of an open pit mine and two thirds of an underground mine, the council says. The earnings before interest, tax, depreciation and amortization of primary PGM miners have fallen an average of 54% in this year’s first half compared to the same period in 2022. That’s more than double the 21% revenue drop during the same period.

Still, some miners have an operating cushion after higher prices during 2020-22.

“Being largely debt free should provide some headroom to take one or several short-term actions to improve or tolerate current margins,” the council said. “However, we estimate that these types of actions are only likely to reduce loss-making ounces by 5-10%.”

In its Platinum Quarterly report released this week, the WPIC highlights a booming demand for the metal, slated to rocket by 27%, hitting 8.23 million ounces. This overshadows a barely changing supply forecast, stagnating at 7.22 million oz., just 31,000 oz. above last year’s figures.

“These statistics spotlight a market under intense pressure, with potential ramifications for investors and industries dependent on this precious metal,” WPIC research director Ed Sterck tells The Northern Miner in an interview. (See video below)

The recovering automotive sector drives this demand upswing, with Sterck’s data projecting a 13% (or 381,000 oz.) increase in 2023. Ramped-up vehicle production rates underpin this surge, with forecasts indicating a 6% and 7% growth for light-duty and heavy-duty vehicle production, respectively.

Sterck highlighted the ongoing platinum for palladium substitution in gasoline vehicles, an adjustment dictated mainly by the existing price differential between the two materials. On the industrial front, significant capacity additions in the chemical and glass sectors are influencing the demand surge.

The Chinese government has been implementing stricter emission standards from July 1, further bolstering platinum demand as industries integrate more platinum group metal (PGM) coated particulate filter systems. This trend is set to elevate the global platinum automotive demand to an anticipated 3.28 million ounces.

Simultaneously, the industrial sector is smashing records, with predictions setting the demand at 2.67 million oz., a notable 14% year-on-year increase. This rise mainly stems from substantial capacity expansions in the glass and chemical sectors, seeing growth rates of 50% (251,000 oz.) and 12% (82,000 oz.), respectively. In contrast, the electrical and petroleum segments anticipate a dip in demand, slated to fall by 8% (9,000 oz.) and 11% (22,000 oz.).

Investment circles also embrace the platinum trend, with predictions setting the net investment demand at 386,000 oz. for 2023. Platinum ETF holdings experienced a significant surge, growing by 155,000 oz. in the June quarter, marking the most substantial quarterly increase since the third quarter of 2020.

Stagnant supply

However, the supply side fails to mirror this burgeoning demand, notes Sterck.

Refined mine production of platinum has plummeted by 4% or 65,000 oz. over last year, settling at 1.46 million oz. in Q2. South Africa, which contributes 75% of global supply, saw a 9% dip in output year-on-year, a decrease linked to ongoing maintenance activities and relentless power disruptions due to the state-owned power utility’s ongoing load curtailments.

Sterck says recycling avenues, too, are on a downturn, reporting a 12% reduction in global recycling in the second quarter.

According to Sterck, these trends underscore the dwindling availability of above-ground stocks to cushion this growing deficit, hinting at a precarious situation where, by the end of 2023, the stocks might cover only five months of annual demand. “A significant portion of these reserves, held in China, are not readily exportable to meet global demands, potentially heightening concerns over metal availability,” Sterck says.

As the market tightens, the intertwined narratives of soaring demand and constricted supply are positioned to offer both short and long-term value incentives for investors. Moreover, platinum’s pivotal role in facilitating a green hydrogen economy, albeit nascent in 2023, is set to burgeon substantially in the medium term, carving a promising pathway for investors seeking a stake in global decarbonization efforts.

VIdeo is here: https://vimeo.com/862155056

Muller said there was no immediate risk of mine closures, but management would weigh each mine’s potential to generate profit, given the price fall.

The Johannesburg-based miner on Thursday said headline earnings in the year to June 30 declined 41% to 18.8 billion rand and cut its full-year dividend by 65% to 5.85 rand per share.

Impala and its South African peers, including Sibanye Stillwater and Anglo American Platinum, had been making record returns when rhodium hit almost $30,000 an ounce in 2021 and palladium surged to more than $3,400 an ounce after Russia’s invasion of Ukraine last year.

Rhodium, which was trading around $4,100 per ounce on Thursday, has dropped more than two thirds in 2023 so far, while palladium, at around $1,230 an ounce, is down 31% this year.

Muller said the company understood the record high prices were not sustainable, but the precipitous decline, particularly in rhodium and palladium, was a surprise.

“It was the speed at which it happened that surprised us, not necessarily the fact that record highs we experienced from 2021 have not been maintained,” Muller told a conference call.

South Africa is the world’s top rhodium supplier and second-largest palladium producer behind Russia. The metals are used in catalysts that curb toxic vehicle emissions.

Production of the metals has also been hit by rolling power cuts in South Africa that reduced Impala’s platinum metals output by 4% to 2.9 million ounces in the year to June 30.

Impala shares in Johannesburg were down 3% by 1241 GMT.

The company hopes to boost output from next year, which could proportionately lower its production costs.

Its output should rise as it incorporates assets acquired from Royal Bafokeng Platinum, which it acquired in a deal finalized this month. Its refined platinum group metals output is expected to rise to between 3.3 million and 3.45 million ounces.

Analysts said that weaker demand from China and the impact from Russian metal being sold at a discount in the Asian economy could be contributing to the fall in prices.

“China’s lower platinum group metals demand and the prioritization of discounted Russian material has been a key driver in our view,” UBS said in a note.

(By Felix Njini and Swati Verma; Editing by Muralikumar Anantharaman, Barbara Lewis and David Goodman)

The restrictions — most frequently taxes, but also quantitative limits — have increased more than five-fold in the last decade to a point where 10% of the global value of exports is subject to at least one measure, the OECD said.

China, India, Argentina, Russia, Vietnam and Kazakhstan are the top six in terms of new curbs in the last decade. Those are also among the countries many of the OECD’s members depend on for supply, the organization said.

“The research so far suggests that export restrictions may be playing a non-trivial role in international markets for critical raw materials, affecting availability and prices,” researchers Przemyslaw Kowalski and Clarisse Legendre said. “Taking into account OECD dependencies on relevant imports described in this paper, this situation warrants scrutiny.”

The findings come as the OECD also said a significant scaling up of production and trade in the materials is needed to meet an expected four-to-six-fold increase in demand for the green transition.

Lithium, rare earth elements, chromium, arsenic, cobalt, titanium, selenium and magnesium saw the largest increase in production in recent years.

“While the production and trade of most critical raw materials has expanded rapidly over the last ten years, growth is not keeping pace with projected demand for the metals and minerals needed to transform the global economy,” the OECD said.

(By William Horobin)

South Africa’s Northam Platinum has terminated its offer to buy Royal Bafokeng Platinum, citing low prices of platinum group metals (PGM) as it ended a year-long takeover battle with bigger rival Impala Platinum.

Northam had outbid Impala’s initial offer to acquire RBPlat, but on Wednesday said that PGM prices had fallen to levels amounting to a “material adverse change” that proved fatal to its offer.

“Northam Holdings hereby notifies RBPlat shareholders that the offer is terminated with immediate effect,” it said.

The miner said that the rhodium closing price has remained below $9,000 an ounce for 12 consecutive trading days, while the basket price for four PGMs had fallen below 33,000 rand ($1,830.91) per ounce for 10 consecutive trading days.

Northam’s decision to end its pursuit of RBPlat clears the path for Impala, the world’s second-biggest PGM producer, to strengthen its hold on a miner with high-grade assets that made it an attractive takeover target.

Impala and Northam have built holdings in RBPlat of 40.71% and 34.52% respectively during the takeover battle.

Northam did not say whether it would retain its stake or sell to Impala, but Northam chief executive Paul Dunne told analysts on March 24 that his company could consider jointly running RBPlat with Impala.

($1 = 18.0238 rand)

(By Anait Miridzhanian and Nelson Banya; Editing by Jan Harvey and David Goodman)

“Will our investors continue to get their returns? Yes, they will, but the size of returns will be slightly softer,” Chief Executive Officer Natascha Viljoen said in an interview. “Will it be the returns we had in 2021? probably not.”

A year ago, the Anglo American Plc unit announced a record payout as automaker demand buoyed the price of rhodium and palladium, which are produced as byproducts of platinum mining. While metal prices have slipped back from 2021 levels, the biggest drag faced by miners are intensifying power blackouts as state-owned utility Eskom Holdings SOC Ltd. struggles to keep its unreliable coal-fired plants working.

The challenges are “worrying” as they hit hard on a sector that’s already grappling with criminal activities and sabotage at mine sites, said Viljoen. She added that the extra time she devotes to managing power outages means she only gets about six hours sleep a night. Still, at current prices, Amplats’s margins are “really good,” she said.

The power outages could cut South Africa’s output of platinum-group metals by a fifth this year, after an estimated reduction of 10% in 2022, Sibanye Stillwater Ltd. CEO Neal Froneman said in an interview last week. While the lower volumes of metals being mined from South Africa will probably help buoy prices, producers will struggle to keep a lid on costs, he said.

“What is for sure is earnings will be impacted negatively,” Froneman said in an interview. “Companies may still have some flexibility to ensure dividends and payouts to shareholders and stakeholders can still be met.”

(By Felix Njini)

The new inferred resource estimate raised tonnage by 62% compared with figures from 2021, according to a company filing on Wednesday. Contained metal jumped across the board: nickel up 52%; copper 44%, cobalt 31%; platinum 66%, gold 30% and rhodium 76%.

“These increases speak to the fantastic growth potential and under-explored nature of the Stillwater West project,” president and chief executive officer Michael Rowley said in a news release. “Its world-class endowment of eight critical minerals is unique in the United States as a district-scale asset located in an active, producing district that has a long history of large-scale critical mineral production.”

The project about 320 km southeast of state capital Helena in the Stillwater igneous complex lies beside Sibanye-Stillwater’s Stillwater, East Boulder, and Blitz mines, the world’s highest-grade major platinum group metals operations and largest outside South Africa and Russia.

Stillwater is among companies in the exploration surge for battery and other minerals deemed critical by Western nations for modern technology and to challenge China’s dominance in their production. The Vancouver-based company says it sees similarities between the project’s site and the world’s largest reserves of platinum group metals north of Pretoria, where Ivanhoe Mines (TSX: IVN) is developing its Platreef project.

Danie Grobler, vice-president of exploration, is working with Prof. Wolfgang Maier at Cardiff University in Wales on models targeting the ultramafic mineralization at Stillwater and how it compares with the bushveld complex in South Africa.

“Our 2023 exploration programs will be focused on expansion of these thick zones of mineralized pegmatoidal pyroxenite/peridotite and associated chromites, as well as broad zones of massive to net-textured sulphides near the base of the layered sequence,” Grobler said in the release. “We are seeing similar metal distribution characteristics when compared to the Platreef.”

The 32-km-long Montana project’s new resource estimate is focused on five deposits in its 9-km central area, all open along strike and at depth with geophysical anomalies showing expansion potential, Stillwater said. The project could use a conventional flotation recovery process since sulphur grades of 1.13% to 6.16% indicate high nickel in the sulphide, it said.

The company has also inventoried 2.3 billion lb. of critical mineral chromium.

The Stillwater West project has 255 million tonnes grading 0.19% nickel, 0.09% copper, 0.02% cobalt, 0.15 gram platinum per tonne, 0.25 gram palladium, 0.05 gram and 0.02 gram rhodium (0.39% nickel-equivalent and 1.19 grams palladium-equivalent per tonne), according to the company filing. The cut-off grade is 0.2% nickel.

Contained metal is 1.1 billion lb. nickel, 499 million lb. copper, 91 million lb. cobalt, 1.2 million oz. platinum, 2.1 million oz. palladium, 395,000 oz. gold and 115,000 oz. rhodium (2.2 billion lb. nickel-equivalent and 9.8 million oz. palladium-equivalent).

That compares with a 2021 estimate of 157 million tonnes grading 0.2% nickel, 0.1% copper, 0.02% cobalt, 0.15 gram platinum, 0.26 gram palladium, 0.06 gram gold, and 0.01 gram rhodium per tonne (0.45% nickel-equivalent and 1.2 grams palladium-equivalent).

Contained metal was 694 million lb. nickel, 347 million lb. copper, 69.4 million lb. cobalt, 758,000 oz. platinum, 1.3 million oz. palladium, 303,000 oz. gold and 61,000 oz. rhodium (1.6 billion lb. nickel-equivalent and 6.1 million oz. palladium-equivalent).

Visualizing the metals you can buy with $1,000

For millennia people have purchased and relied on metals for decorative and industrial uses, figuring out their values based on their practical applications and visual luster.

Today, precious and industrial metals markets quote figures in millions and billions as they exchange thousands of ounces, with varying densities and values of metals making it difficult to compare them.

Using price data from TradingEconomics, this graphic visualizes how much of each metal you can buy for $1,000 so you can see just how much, or how little, of each metal you get for your money.

How we value precious and industrial metals

Characterized by their natural shine, metals are valued using the two key principles of rarity and their industrial uses, with unique properties such as their appearance or cultural significance also affecting their value.

• Rarity: A more scarce metal or resource will often have a higher value than one which is more abundant.
  • For example, while there are an estimated 2.1 billion tonnes of identified copper deposits, there are only 57,000 tonnes of underground gold reserves. While copper is valued at $0.24 per troy ounce, gold is worth around $1,815 per troy ounce.
• Industrial uses: Metals which are needed for important industrial processes will often have a high demand from manufacturers, increasing their valuation.
  • For example, for most of its history cobalt was used decoratively for its striking blue color and for the creation of superalloys and steel products. However, when it was recently discovered that cobalt could be a key component in lithium-ion batteries for EVs, demand for cobalt surged sending its price from around $23,000 per tonne to more than $90,000 per tonne at one point.

Along with these two primary factors, unique properties and historical uses can also affect a metal’s valuation.

Former monetary metals like gold and silver are still sought after by investors for their potential ability to retain value over time compared to today’s fiat currencies. Meanwhile, platinum’s durability, resistance to tarnishing, and its bright white color makes it highly sought after for jewelry, raising the demand and value of the precious metal.

Getting less for more: Comparing metal density

A key factor that determines the volume of a metal you get for a certain price is also the metal’s density. Precious metals tend to be more dense than industrial metals, with sometimes more than double the density depending on the specific metals compared.

As seen in the graphic above, $1,000 worth of highly dense metals like gold (19.32 g/cm³), iridium (22.56 g/cm³), and osmium (22.59 g/cm³) amount to small cubes less than a centimeter across. Meanwhile, $1,000 of a less dense (and also less valuable) metal like aluminum with a density of only 2.7 g/cm³ yields a large cube nearly two feet tall.

To put these densities in comparison, if gold had the same density as aluminum, its cube on the graphic above would be more than seven times larger.

While it’s impossible to directly compare the value of each metal’s industrial uses and applications, seeing just how much (or how little) of a metal you get for $1,000 can give some perspective to their value.

(This article first appeared in the Visual Capitalist Elements)

The proposed mine, located 10 km from Marathon, Ontario, is expected to produce an average of 245,000 ounces of palladium equivalent production annually over an estimated 13-year mine life. 

Platinum group metals, which includes palladium, platinum and rhodium, are key materials used in n the manufacturing of catalytic converters, which remove harmful chemicals from car exhaust emissions. 

Copper, the other metal to be produced at the mine, is a critical in the manufacturing of electric vehicles (EVs) and associated charging infrastructure. An EV battery requires 2.5 times more copper than a standard internal combustion engine vehicle. 

Generation Mining said it would now proceed with obtaining any additional permits from federal offices, including Fisheries and Oceans as well as the department of Natural Resources.

“The minerals mined through this project, mainly palladium and copper, will play an important role in Canada’s transition to a low-carbon economy,” Environment and Climate Change Minister Steven Guilbeault said in a statement.

It is also expected to help build the supply chain for critical minerals and the automotive manufacturing industry in Ontario, the province said in a separate statement.

Hundreds of jobs

Building the Marathon mine will require the construction, operation, decommissioning and remediation of three open pits. It would also need an on-site ore processing facility, a 115 kV transmission line, an access road and a water management system among other infrastructure.

The processing plant will operate at about 9.2 million tonnes a year of ore to produce about 87,000 tonnes of copper concentrate annually. The concentrate will be delivered to a third-party facility for further downstream processing into refined critical minerals.

Site construction is anticipated to take 18 to 24 months and will employ around 900 workers. The operating workforce is estimated at 375 people, Ontario’s Minister of Mines George Pirie said.

Based on current mineral reserves, Marathon is expected to deliver 1.91 million ounces of palladium, 467 million pounds of copper, 537,000 ounces of platinum, 151,000 ounces of gold and 2.82 million ounces of silver in payable metals.

Guilbeault, who is also responsible for the Impact Assessment Agency of Canada, noted that approving the Marathon project will also result in important benefits for members of Biigtigong Nishnaabeg First Nation.

Ontario’s mining industry generates more than C$11 billion in annual mineral production and supports 75,000 direct and indirect jobs.

The sector is the largest private employer of Indigenous peoples in Canada. In Ontario, First Nation workers made up 11% of the province’s direct mining jobs.