Weekly Nugget

Peruvian Presidential Election Weighs Heavy on Local Mining Taxation

Ganfeng Lithium (US: GNENF, SHE: 002460, HKG: 1772), one of the world’s top lithium producers, said on June 11, it would sell around USD$630 million in new shares to fund potential investments and boost its lithium production capacity.

Socialist Pedro Castillo secured a lead in Peru's presidential election on Thursday with 63,000 votes over Keiko Fujimori, who has not yet conceded the election and claims electoral fraud.

Castillo, a school teacher and political newbie has rattled the country’s political and business elite with widespread grassroots support for pledges to rewrite the constitution and redistribute income taxed from the mining industry.

Castillo has proposed to change Peru’s decades-old constitution, tax up to 70% of profits from mining companies operating in the country and introduce new royalties on mineral sales.

His campaign has back-pedaled its stance on nationalization, but maintains that extractive companies are not paying enough taxes. A Castillo presidency would review tax stability agreements, as well as look at, and likely increase, royalties paid by the mining and oil and gas companies.

There are 307 projects in Peru on Prospector Portal. 

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China’s Ganfeng Lithium Boosting Capacity with $630M Financing

Ganfeng Lithium (US: GNENF, SHE: 002460, HKG: 1772), one of the world’s top lithium producers, said on June 11, it would sell around USD$630 million in new shares to fund potential investments and boost its lithium production capacity.

The company intends to use 80% of the raised capital for capacity expansion, mostly at its lithium projects overseas, and potential investment in lithium resources. The other 20% has been earmarked for replenishment of working capital and general corporate purposes.

In March, Ganfeng announced an ambitious plan to increase its lithium production capacity roughly five times to 600,000 tonnes of lithium carbonate equivalent a year. The Chinese company has made serious financial commitments to Argentina to further its capacity.

As one of the world’s top producers of the commodity used in electric vehicle batteries, Ganfeng signed a deal to explore setting up a battery plant in Argentina. The non-binding agreement with Argentina’s Ministry of Productive Development and the Jujuy provincial government, explores the possibility of building a battery plant and further resource exploration or acquisition. 

“We want to support the industrial development of Argentina to make it one of the most important lithium-producing countries in the world...” -Ganfeng Chairman Li Liangbin 

In early May, the company announced the acquisition of lithium explorer and developer Bacanora Lithium (LON:BCN), becoming the sole owner of the Sonora project, in Mexico. The mine is expected to begin production in 2023 and produce 35,000 tonnes of lithium per year once at full tilt.

The Chinese company is also developing the Cauchari-Olaroz lithium brine project in Argentina’s northwestern Jujuy province, close to the proposed battery plant. 

Beijing announced last year a development plan for the “new energy vehicle” (NEV) industry from 2021 to 2035. It is targeting a 20% share of NEVs in the country’s total vehicle sales by 2025.

A recent study by the International Energy Agency (IEA) recommends governments start stockpiling battery metals, noting that lithium demand could increase 40 times in the next 20 years. 

IEA executive director Fatih Birol said this would become an “energy security” issue. China dominates lithium processing, while mine supply overwhelmingly comes from Chile and Australia. 

China controls 70% of the world’s lithium supplies, 80% of rare earth metals and roughly 70% of the world’s graphite.

There are 137 lithium projects on Prospector Portal. 

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American Angst Over Mining Delays Projects, as EV Reality Hits Home; Thacker Pass Lithium Project In Court

Lithium Americas Corp. (TSX: LAC) has delayed plans to excavate its Thacker Pass lithium mine site in Nevada, according to court filings acquired by Reuters.  A US federal judge is considering whether the former Trump administration made a mistake in approving the project that some environmentalists say could endanger the sage grouse and other wildlife.

A Group of environmentalists filed the suit after a BLM decision to advance the mine, arguing that regulators did not abide by federal statutes designed to protect sage grouse. The company and BLM disagree, according to filings.

Thacker Pass, if completed, would be the largest lithium mine in the United States, producing 30,000 tonnes of lithium annually, enough to make more than 475,000 electric vehicle batteries.

Lithium Americas has an odd ally in Glenn Miller, who founded the environmental group Great Basin Resource Watch, one of the conservationist groups suing to block the mine. Miller said he disagrees with the group's opposition to the project and resigned from its board earlier this week.

"Everyone is deeply concerned about climate change. It's a question about values, and I go with the need for lithium...This is one of the least-impactive mine plans I've ever seen." -Glenn Miller

This is just one mine among many US mines facing opposition. US Environmentalists have been pressuring courts and regulators to stop US mining projects from several companies as mining has seen a resurgence under a renewed effort for domestic sources of the metals for renewable technology. 

ioneer (ASX: INR) is facing challenges as the Fish and Wildlife Service is proposing to list a rare wildflower an endangered species. Antofagasta (LON: ANTO) faced stiff opposition to its Twin Metals copper-nickel mine in northeastern Minnesota while Rio Tinto (ASX: RIO) Resolution project in Arizona. 

The U.S. Army Corps of Engineers denied a permit for Northern Dynasty’s (TSX-V:NDM) Pebble Mine on Nov. 25, 2020. The decision should be a death knell for Pebble Mine, however the company has filed an appeal. 

Twin Metals, Resolution and Pebble Beach received strong support under a Trump administration, however with Biden in power environmentalists have renewed hope to stop these operations. 

However it is clear that Biden's national security/critical minerals agenda and his build-back-better strategy will come into opposition with the more progressive elements of America as they reconcile their environmental concerns with the material reality of the transition away from fossil fuels.

There are 748 mineral projects in the United States on Prospector Portal.

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Ivanhoe Secures Sales Agreement for Kakula's Copper, DRC

[Summary of an article written by Cecilia Jamasmie of the Northern Miner]

Robert Friedland’s Ivanhoe Mines (TSX: IVN) signed deals with China’s Zijin Mining’s subsidiary and trader Citic Metal to sell each 50% of the copper production from the recently-launched first phase of its Kamoa-Kakula mine in the Democratic Republic of Congo.

The off-take agreements will see the wholly-owned Zijin unit Gold Mountains International Mining Co and Citic Metal split the offtake of copper concentrate and blister copper from just Kakula, Ivanhoe’s first of the two mines.

Ivanhoe said that the DRC government has fully authorized it to export blister copper and concentrate to international markets.

The permit came as Ivanhoe signed a 10-year agreement with the Copper Smelter in Lualaba, located outside the town of Kolwezi, for the processing part of Kamoa’s copper concentrate production.

Ivanhoe delivered its first copper concentrates to Lualaba on June 1, and will receive first blister copper ingots within 30 days of delivery.

The DRC, the world’s the top cobalt producer and Africa’s biggest copper miner, reinstated a ban on exports of concentrates last month to encourage miners to process and refine ore in country.

“If we came from Mars and we were sent in our flying saucer to orbit the Earth to find copper, we would definitely go to Katanga in the southern part of the Democratic Republic of the Congo as the richest place on the planet for copper...” -Robert Friedland

There are 56 technical reports on projects in the Democratic Republic of Congo.

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