Tag Archives: precious metals

The Power Plays in Africa

As the overthrow of despot Robert Mugabe entered a stalemate on November 17,  2017, eyes turned to China — Zimbabwe’s largest foreign investor and a key ally — amid speculation over its role in the military coup.Source in Harare believe the Zimbabwean conflict within the ruling party Zanu PF is involving two rival camps has direct links to China and Russia with both countries trying to control and protect their own economic interests.

The army chief General Constantino Chiwenga, visited Beijing l — just days before tanks rolled into the streets of Harare. President Mugabe has been been hostile to the Chinese in recent years accusing them of plundering the countries diamonds worth $15 billion.  On October 2017 First Lady Grace Mugabe was in Russia where she represented her 93-year-old husband at a function where he was honoured with some accolade in Russia at the World Federation of Democratic Youth (WFDY) in Moscow.

“It is a BRICS internal rivalry with both Russia and South Africa on one side trying to protect their economic interests and China on the other side,” a regional think-tank in London said on November 17, 2017… Russia has been investing in several projects in southern African nations, for example, the ALROSA group of diamond mining companies is engaged in several projects in Zimbabwe, while mining and steelmaking company Evraz and Severstal steel and steel-related mining company conduct their business in South Africa.

Russia and South Africa, which together control about 80% of the world’s reserves of platinum group metals, have created a trading bloc similar to OPEC to control the flow of exports according to Bloomberg.

Zimbabwe, Canada, and the U.S. are among other major platinum group metals producers.

Russian and South African officials signed a memorandum of understanding today to cooperate in the industry.South Africa mines about 70 percent of the world’s platinum, while Russia leads in palladium, a platinum group metal used in autocatalysts, with about 40% of output, according to a 2012 report by Johnson Matthey Plc.

According to the Chamber of Mines of Zimbabwe (CMZ) and geologists, Zimbabwe has far bigger platinum reserves than Russia. The country currently has the second known largest platinum reserves after South Africa. Experts say underfunding and limited exploration has over the years stifled growth of the mining sector.

The Zimbabwe chamber is on record saying it seeks to increase production to the targeted 500 000 ounces per annum requires the setting up of base and precious metal smelters and refineries, investment of $2,8 billion in mines, $2 billion in processing plants and between $200 and $500 million to ensure adequate power supply. Already, the country’s major platinum miners – Zimplats, Unki and Mimosa who are currently processing the metal in neighbouring South Africa – have undertaken to construct the refinery….

Miles Blessing Tendi, a lecturer in African history and politics at the University of Oxford, says there is no way to be certain if China knew about Mugabe’s fate but believes China’s respect for sovereignty would make their involvement uncharacteristic.

Excerpt, It gets ugly as Russia and South Africa gang-up against China over Zimbabwe coup, http://www.thezimbabwemail.com/, November 17, 2017

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The Scramble for Lithium

Lithium rich brine  Uyuni, Bolivia .  The lithium-rich brine is concentrated by pumping it into solar evaporation ponds. image from wikipedia

SQM, Chile’s biggest lithium producer [has]Its headquarters in the military district of Santiago bears no name. The man who for years ran the business, Julio Ponce, is the former son-in-law of the late dictator, Augusto Pinochet. He quit as chairman in 2015, during an investigation into SQM for alleged tax evasion. (The company is co-operating with the inquiry.) Last month it emerged that CITIC, a Chinese state-controlled firm, may bid for part of Mr Ponce’s controlling stake in SQM, as part of China’s bid to secure supplies of a vital raw material…

SQM is part of a global scramble to secure supplies of lithium by the world’s largest battery producers, and by end-users such as carmakers. That has made it the world’s hottest commodity. The price of 99%-pure lithium carbonate imported to China more than doubled in the two months to the end of December, to $13,000 a tonne…

The industry is fairly concentrated, which adds to the worry. Last year Albermarle, the world’s biggest lithium producer, bought Rockwood, owner of Chile’s second-biggest lithium deposit. It and three other companies—SQM, FMC of America and Tianqi—account for most of the world supply of lithium salts, according to Citigroup, a bank. What is more, a big lithium-brine project in Argentina, run by a joint venture of Orocobre, an Australian miner, and Toyota, Japan’s largest carmaker, is behind schedule. Though the Earth contains plenty of lithium, extracting it can be costly and time-consuming, so higher prices may not automatically stimulate a surge in supply.

Demand is also on the up. At the moment, the main lithium-ion battery-makers are Samsung and LG of South Korea, Panasonic and Sony of Japan, and ATL of Hong Kong. But China also has many battery-makers…Tesla Motors, an American maker of electric cars founded by Elon Musk, a tech tycoon, is also on the prowl. It is preparing this year to start production at its “Gigafactory” in Nevada, which it hopes will supply lithium-ion batteries for 500,000 cars a year within five years….[I]n August Bacanora, a Canadian firm, said it had signed a conditional agreement to supply Tesla with lithium hydroxide from a mine that it plans to develop in northern Mexico. Bacanora’s shares jumped on the news—though analysts noted that shipping fine white powder across the United States border would need careful handling.Bigger carmakers also have a growing appetite for lithium…

Another big source of demand may be for electricity storage. The holy grail of renewable electricity is batteries cheap and capacious enough to overcome the intermittency of solar and wind power—for example, to store enough power from solar panels to keep the lights on all night.

Excerpts from  An increasingly precious metal, Economist, January 16, 2016