A pair of bills introduced in the Minnesota House of Representatives this year seek to change the state’s mining laws.

The bills target copper-nickel mining, a type of mining that has never been done in the state, by changing the responsibility of the Minnesota Department of Natural Resources and boosting an existing law that requires mining companies pay financial assurances to reclaim the sites.

Transferring mining promotion to DEED

Currently, the DNR is responsible for both promoting mineral development throughout the state and weighing a potential mine’s environmental effects.

Rep. Kelly Morrison, DFL-Wayzata, said that’s a conflict of interest. Her bill, HF 3331, would transfer the responsibilities of mining promotion from the DNR commissioner to the commissioner Department of Employment and Economic Development.

Morrison, a physician, said she’s concerned about the potential for toxic acidic runoff from copper-nickel mining to pollute nearby waterways and sources of drinking water.

“I think there probably was a time when it was appropriate to have DNR manage both promoting mining and preserving natural resources,” Morrison said in an interview. “But it seems clear that with a move to embark on this new kind of mining that carries much higher environmental and health risks than mining iron ore taconite, it’s just a clear conflict of interest for DNR to be in charge of both.”

She said the DNR’s responsibility of both promoting mining and conservation would make it difficult, if not impossible, for the agency to halt a project proposal.

“(The DNR) may try to mitigate but it’s not designed to stop even ones that might not be appropriate,” Morrison said.

In an email, Jess Richards, assistant commissioner of the DNR, told the News Tribune the agency hasn’t reviewed the bills and had not taken a position on either bill.

He noted that a similar bill was introduced last year.

“We stated then that we believe transferring duties to DEED would create a situation where it would be difficult to ensure broad natural resource protection topics are fully integrated with minerals promotion decisions,” Richards said. “We believed this was a fundamental flaw of the bill last year.”

Besides minerals management, he added the DNR has a “dual mission” in forest management, recreation and game and fish regulation.

“Regardless of the topic, we always conduct state business with the highest level of professionalism and integrity,” Richards said.

The bill’s companion in the Senate, SF 3369, is expected to be introduced Thursday and is authored by Sen. John Marty, DFL-Roseville.

Financial assurance boost

Another bill, introduced by Rep. Jean Wagenius, DFL-Minneapolis, seeks to boost and clarify the financial assurance packages required by new nonferrous (metals that don’t contain iron) mines in Minnesota.

“All Minnesotans, whether they support new mining or not, agree that new mining should not contaminate our lands and waters,” Wagenius told the News Tribune. “And if it does, then it’s the mining companies, not the taxpayers, who are responsible for the cleanup.”

Minnesota law already requires financial assurance meant to reclaim a site when the mine closes, either as planned or unexpectedly.

For example, PolyMet, which is trying to open a copper-nickel mine near Hoyt Lakes and Babbitt, posted $74 million in financial assurance prior to its permit to mine. That’s expected to grow to $588 million when mining begins and exceed $1 billion at peak mining. The amount can be evaluated each year by the DNR.

Wagenius said the additional language in the bill would ensure money for cleanup.

“This bill clarifies, more than anything else, current law,” Wagenius said. “It lists lands and waters that need to be cleaned up and specifies treaty rights.”

Rep. Jennifer Schultz, DFL-Duluth, and Morrison have signed on as co-authors, but as of Wednesday, the bill does not have a companion bill in the Senate.

Bills face uphill battle

A number of bills aimed at regulating copper-nickel mining were also introduced in the House last year but made little progress after introduction.

A Republican-controlled Senate friendly to miningcould make it difficult for these bills to ever become law, too.

“Even though we probably aren’t going to get hearings in the Senate, I think that highlighting this issue, continuing to educate people, continuing to have these conversations is very important to the future of our state,” Morrison said.

But Wagenius was more hopeful on the Senate side.

“Senators also say make sure our waters and our lands are protected,” Wagenius said.

Long-suffering cobalt bulls were dealt another blow on Wednesday after reports that the world’s largest electric carmaker is shifting some production of its most popular model away from batteries that contain nickel and cobalt.

In a surprise move, China’s top battery manufacturer CATL will supply Tesla with lithium iron phosphate (LFP) batteries for Model 3 production at its newly built $2 billion factory outside Shanghai.

The Model 3 is Tesla’s most popular and the US-made version uses the company’s nickel-cobalt-aluminum (NCA) cathode chemistry. Most other automakers favour nickel-cobalt-manganese (NCM) cathodes.

LFP batteries are cheaper than batteries using NCA and NCM but lack the energy density, reducing driving range. LFP batteries power almost the entire electric bus fleet in China and are popular for smaller city runabout vehicles where range is not an issue.

According to Benchmark Mineral Intelligence, a battery supply chain and price reporting company, cobalt played no part in Tesla’s decision to use LFP cells:

The move is a specific strategy to balance the cost reduction of Model 3 with appropriate range and performance for China’s domestic market.

Benchmark believes LFP powered Model 3s will qualify for China’s EV subsidies as range estimates with Tesla’s drivetrain efficiency will take it beyond the 250km (155 miles) threshold for the minimum subsidy payout of CNY 18,000 (roughly $2,600).

Benchmark estimates that the total cost saving compared to Model 3s made in the US using NCA cells will be in excess of 25%, but it is unlikely that Tesla will produce LFP models outside China.

Cobalt miners may make up some lost ground if the Model 3 proves popular in China, which accounts for half the world’s EV sales. Tesla plans to use NCM 811 cells (~80% nickel, ~10% cobalt) supplied by LG Chem for its long-range Model 3s for the domestic market.

Benchmark domestic Chinese prices for cobalt sulphate jumped by more than 10% in January, to $6,900 a tonne. Measured from multi-year lows hit during the summer, prices for cobalt used in the battery supply chain have recovered 30%.

Chinese nickel sulphate prices fell an average of 5.8% on the previous month in January, according the Benchmark data, but at CNY24,500 ($3,500) per tonne ex-works >22% nickel content, prices are flat year-on-year.

No commodity is benefiting from the deadly coronovirus outbreak more than palladium.

Futures contracts for the precious metal surged as much as 8.1% to a record as Wall Street fled stocks. Investors are searching for safe havens after Apple Inc. warned that the virus and efforts to contain it would have its sales missing forecasts.

“Palladium has been unbelievable – it’s like the Tesla stock of commodities,” Edward Meir, an analyst at ED&F Man Capital Markets, said by phone. “Prices are caught up in the rally in precious metals. Whenever these metals rally palladium tends to move as well, but by a greater magnitude.”

The rally in metals gathered pace around 10 a.m. as gold advanced above $1,600 an ounce. Over that full hour, volume for palladium was more than six times the average in the past 100 days for that time of day, according to data compiled by Bloomberg. Palladium delivered a 77% return over the past year, the biggest among 45 raw materials on the DCI BNP Paribas Enhanced Index.

Palladium rallies on back of gold, precious metals

Palladium futures for March delivery climbed 7.8% to settle at $2,497.60 an ounce at 1:01 p.m. on the New York Mercantile Exchange. Prices kept rising after the market closed Tuesday, touching $2,504.50, the highest in records going back three decades. The market was closed on Monday for a U.S. public holiday. In the spot market, the metal also reached an all-time high.

Gold futures for April delivery rose 1.1% to $1,603.60 an ounce, the highest close for a most-active contract on the Comex in New York since 2013. The tally of outstanding contracts for the metal is more than 30 times the size of palladium.

Palladium’s stellar performance has been driven by expectations that stricter Chinese environmental standards will spur higher loadings of the material in cars, draining global supply that’s already struggling to meet demand.

Production will trail consumption by 1.9 million ounces this year, wider than the 1.1 million ounce-deficit last year, Anglo American Platinum Chief Executive Officer Chris Griffith said in a presentation.

In response to the growing need to recover more metals from bottom ash in energy-from-waste (EfW) applications, Eriez has released a new white paper which describes how the innovative P-Rex Scrap Drum can help maximize ferrous recovery.

“P-Rex Distinguishes itself in Energy-from-Waste Applications,” written by Eriez Director of Heavy Industry Darrell Milton, is available now on the company’s website.

The paper begins by offering background information and case studies. It explains that one report determined all United States EfW facilities combined are recovering more than 700,000 tons of metals for recycling annually. Yet some 250 million tons of trash containing metals is still going to landfills every year. Approximately three percent of the waste stream is metal, so 7.5 million tons of recoverable metals are lost.

As reported in the white paper, the P-Rex Scrap Drum Magnet is the most powerful magnetic drum on the market today.

Its strength and revolutionary design allows for the highest level of ferrous metal recovery possible from bottom ash. Prior to the introduction of P-Rex, processors had to accept reduced revenue because of more limited metal recovery systems.

The white paper reveals that advanced engineering and rare earth magnet technology give P-Rex the advantage in critical performance areas: superior edge-to-edge separation, no “transfer point” drop in magnetic force and no decline in performance due to heat.

“P-Rex Distinguishes itself in Energy-from-Waste Applications” includes a variety of photos and cutaway drawings to enhance readers’ understanding of how this groundbreaking equipment operates.

“We developed this white paper because even some of the largest and most successful EfW facilities are missing substantial ferrous recovery opportunities,” says Milton. “Our aim as a recycling industry leader is to educate professionals about our cutting edge solutions–such as P-Rex–which give users the ability to cash in on the significant revenue stream available through greater recovery of ferrous metals.”

One of the companies on the leading edge of this upward momentum is Pacific Rim Cobalt Corp. (CSE:BOLT) (OTCQB:PCRCF) (XFRA:NXFE) (PCRCF Profile), which is setting out a bold expansion plan following a successful exploration and development season in Indonesia last year. Other companies with interest in nickel production include Honda Motor Company Ltd. (NYSE:HMC), which will be looking for more nickel as it increases its EV range. Tesla Inc. (NASDAQ:TSLA) also continues to push the boundary for EV and has seen its stock rise as the market grows. Toyota Motor Corporation (NYSE:TM) is moving into EV, with millions of alternative fuel vehicles sold in the United States. Panasonic Corp ADR (OTCPK:PCRFY) is working with several of these companies to keep up the EV battery supply.

Electric Vehicles Spur Mining Boost for Indonesia

In many people’s minds, electric vehicles (EV) are associated with big cities in East Asia, North America and Western Europe. These are major markets where new vehicles are making their presence felt, particularly as environmentally conscious consumers seek to retain their personal mobility while protecting the planet from carbon emissions.

But the drive to put more EV on the roads is having a knock-on effect in other regions. Indonesia, a giant in the production of nickel, is seeing both its economy and its global status boosted by the need for nickel in EV batteries. This shift could help turn the country into an economic superpower, which may have significant consequences for companies working there.

Expanding Indonesian Nickel Production

Among the companies developing Indonesia’s nickel supply is Pacific Rim Cobalt Corporation (CSE:BOLT) (OTCQB:PCRCF) (XFRA:NXFE), a Canada-based battery metals company with offices in Vancouver, Shanghai, Jakarta and Sentai, Indonesia.

Pacific Rim specializes in acquiring and developing production-grade battery metal projects and is committed to providing these critical metals to companies producing EV batteries. The company has been working towards leveraging its flagship nickel-cobalt Cyclops project by employing a vertically integrated “mineral to market” strategy. Based in Papua Province, nestled at the edge of the Cyclops Mountains, this operation is based in a region rich with nickel deposits, where past operations have confirmed the presence of the mineral.

The Indonesian government, which controls licensing to extract minerals in the country, is aware of the growing interest in the industry. Recently the government updated the mining registration process, in part to encourage companies in this industry.

In light of the favorable government outlook and as a result of its its ongoing efforts, Pacific Rim recently secured government approvals needed from the OMBUDSMAN of the Republic of Indonesia for the Cyclops project to move forward. The nickel and cobalt project has been found fully compliant with the updated mining registration process, meaning it is clear to progress.

Pacific Rim Cobalt CEO Ranjeet Sundher commented: “2019 was a pivotal year for us, and we’re pleased to carry this momentum into 2020. Obtaining approval from Indonesia’s OMBUDSMAN is an important step toward our goal of securing strategic partnerships and participating in Asia’s growing battery metals supply chain.”

This milestone marker for Pacific Rim has been possible thanks to the support and connections the company has established. National, regional and local support has been found for the project, which will provide jobs in Papua Province in mining, transport and support services. With government approval in hand, company officials have now begun discussions with potential strategic partners and investors to further develop the operation.

A Global Hub for Electric Vehicle Production

Pacific Rim’s operation is well timed to tie in with plans of the Indonesian government.

Indonesia aims to become a global hub in the EV industry supply chain. Not only does the country have rich sources of nickel, it also has direct nautical trade routes to China and Japan. These powerful neighboring countries represent major markets for the materials Indonesia is producing, thanks to Japan’s high-tech consumer economy and China’s powerful battery industry. Vehicle manufacturers in both countries are focused on becoming leaders in EV, and for that they’ll need battery-grade nickel.

To make the most of this opportunity, Indonesian president Joko Widodo has established rules to bolster the EV industry in the country. Through a series of incentives, the government aims to make EV 20% of its car production by 2025. This movement has attracted investment from major EV players. Operations such as the Cyclops project should play a critical role in making that happen.

To support its plan to become a world-leading player in the EV supply chain, Indonesia has stopped export of unprocessed nickel ore. The government has also recently approved environmental impact studies for the completion of several factories designed to produce battery-grade nickel chemicals.

With the Indonesian government providing support for nickel production, and factories being established to process the chemicals, Indonesia won’t just be a source of nickel-bearing ore — it will become a major market for the base metal.

Ambitious Plans for Nickel

The Indonesian government’s ambitious plans for the country’s EV industry are matched by the ambition of the companies working in the region.

For Pacific Rim, this ambition is backed by the company’s impressive exploration successes in 2019. Testing on its wholly owned site revealed significant nickel and cobalt mineralization near the surface.

These conclusions are based on several successful operations in the second half of 2019. Excavation and sampling of test pits produced 530 kg of sample materials, which were sent to Canada for bench scale testing. Test results indicate 75 drill holes, 51 augur holes and 11 test pits were used to check mineral levels down to various depths. Combined with historic results from 856 drill holes and 26 test pits, these provide a detailed picture of the mineral profile at the Cyclops site.

With these results in hand, Pacific Corp. has identified ambitious milestones for development in 2020, including the completion of a pilot plant in Canada and a demonstration plant in Indonesia, which would produce battery-grade nickel and cobalt material to suit the growing EV market. The operations and success of these initial operations will be used to develop design criteria for a full commercial scale plant.

A Growing Market

The demand for EV batteries means that demand for nickel is high and looks set to stay that way. According to research by Deloitte, EV sales reached 2 million units globally in 2018 and should reach 4 million units in 2020, expanding to 21 million by 2030. At the same time, the cost of EV battery packs has been falling by 20% per year, making EV a more affordable option for consumers.

CRU Mobility and Energy Futures has predicted that the EV market will need 1.3 million tons of nickel per year by 2030, compared with 600,000 tons in 2018. This means that demand for Pacific Rim’s products could more than double in the next decade.

With Indonesia holding 25% of the world’s nickel reserves, the country — and companies with operating inside the country — lies at the nexus of these developments. Spending on new nickel processing plants in the country is expected to reach $20 billion by 2024, thanks to the government’s efforts to create a world-leading EV supply chain. Companies such as Pacific Rim, with an early position in the country’s nickel market, look to be ideally positioned to profit from this.

The EV Nickel Market

The nickel market is increasingly defined by the car manufacturers working in EV.

Honda Motor Company Ltd. (NYSE:HMC) (OTCPK:HNDAF) is making big moves with EV and hybrid vehicles such as the new Fit. The company is increasing its general levels of car production, with a record-breaking year in 2019 for production in China. Critically, Honda is looking beyond the consumer market in its EV work, with a new research agreement with Isuzu to work on heavy-duty trucks driven by electric fuel cells. This would expand the need for EV batteries.

Tesla Inc. (NASDAQ:TSLA) is the name most associated with EV. The company has played a leading role in pushing the industry forward as well as in raising its public profile. The company’s stated mission is to accelerate the world’s transition to sustainable energy, which means moving transport faster over to EV. Through intense R&D work, the company has pushed its cars to ever greater mileage, while also developing other battery-based projects, such as Megapack utility-scale energy storage. The company’s recent stock-price growth reflects increasing investor confidence in the EV sector.

Like other vehicle companies, Toyota Motor Corporation (NYSE:TM) (OTCPK:TOYOF) is moving from traditional engines towards EV. The company has sold more than three million alternative fuel vehicles in the United States alone and is now backing its electric vehicles with an extended-battery warranty. The company also offers some of the most innovative EV on the market, with its Mirai the first zero-emissions vehicle with a range of more than 300 miles.

Panasonic Corp ADR (OTCPK:PCRFY) has entered the vehicle market by providing batteries for car manufacturers. In addition to its partnership with Tesla, Panasonic has established a joint venture with Toyota  to produce EV batteries in China and Japan. The latter project is expected to increase Toyota’s battery production capacity 50 times over, bringing down the cost of individual batteries and significantly increasing the demand for components such as nickel.

With EV production going through a period of dramatic growth, nickel mining looks to be set for dramatic expansion. Nowhere will this be more noticeable than in the government-supported industry of Indonesia.

American Battery Metals will advance construction of its battery metals recycling plant in Nevada with a $10 million investment commitment from Unifinance Limited, the company said Wednesday.

American Battery Metals said the funding commitment will position the company to aggressively pursue its lithium-ion battery recycling initiatives and advanced extraction technology. The company is also conducting drilling programs at potential lithium mining projects in Nevada as it seeks to become the world’s first fully integrated battery metals supply chain provider.
The Nevada-based battery metals company announced plans for the recycling facility in 2019 in response to concerns over the stability of the battery metals supply chain in meeting future demand for renewable batteries.

“The American Battery Metals Corporation recycling process will address a global e-waste challenge, while reintroducing critically-needed materials back into the supply chain for the electric vehicle and energy storage sectors,” VCM Group Director Michael Vogel said in a statement. Unifinance is an affiliate of VCM.

Unifinance’s investment will also allow the company to eliminate a portion of its convertible debt and fund other working capital needs.

The recycling facility will extract lithium, cobalt, nickel and other metals from feedstock in the form of scrap, consumer electronics and end-of-life electric vehicle batteries.

“Mining and development projects take time to bring resources online, and battery manufacturers need the crucial metals now,” ABMC said in a separate statement last week.

“The economic and national security implications are so acute, the US government is actively seeking innovative solutions from the market to help break America’s reliance on foreign sources of critical minerals.”

In October, ABMC appointed Ryan Melsert as chief technology officer and head of its battery metal extraction and recycling divisions. Melsert is the former manager of Tesla’s battery materials processing division.

ABMC said its battery recycling plant is scheduled to be fully operational in late 2020.