Battery Metals

Gold price tumbles on reports of de-escalating Middle East tensions

November 26, 2024 By News Team

Gold prices fell sharply on Monday following reports of de-escalating geopolitical tension in the Middle East, denting the safe haven metal’s appeal.

Spot gold tumbled about 3% to $2,627.01 an ounce by 12:20 p.m. ET, breaking a five-session rally to its highest in nearly three weeks. US gold futures were down 2.9% at $2,634.40 an ounce in New York.

Gold extended losses after Axios reported that Israel and Lebanon have accepted the terms of a ceasefire agreement, though the parties have yet to make an announcement.

Another factor in bullion’s decline was Donald Trump’s nomination of Scott Bessent for Treasury Secretary, a choice that many see would inject more stability into the US economy and financial markets.

The Bessent news is a possible driver of gold’s price drop on Monday, along with profit taking following last week’s rally, according to UBS Group commodity analyst Giovanni Staunovo.

“Some market participants see him as less negative for a trade war, considering his comments on a phased approach for implementing tariffs,” Staunovo said.

Gold prices were primed for a sell-off on buying exhaustion after last week’s rally. Scott Bessent’s appointment further took away some of the risk premium associated with the US, echoed TD Securities commodity strategist Daniel Ghali.

Investors are now focused on the outlook for monetary policy, after a report showed US business activity expanding at the fastest pace since April 2022. Swaps traders now see a less-than-even chance the Fed will cuts rates next month.

“I still anticipate a 25 bps rate cut in December, but recent Fed speakers have taken on a more cautious tone heading into 2025, which could pose a bit of a headwind for gold,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Gold has still climbed roughly 30% this year, supported by central bank purchases and the Fed’s pivot to rate cuts. Haven buying has also been a feature on an escalation in the Russia-Ukraine war.

Most banks remain positive on the outlook, with Goldman Sachs and UBS seeing further gains in 2025.

Mining’s old guard needs strong medicine

November 25, 2024 By News Team

MINING.COM’s ranking of world’s 50 most valuable miners enjoyed a combined market capitalization of $1.51 trillion at the end of Q3, up by single digits since the start of the year compared to rip-roaring broader US and world markets.

Much of the drag on the index comes from the top – the mining industry’s traditional Big 5 – BHP, Rio Tinto, Glencore, Vale and Anglo American.

With the exception of Anglo, which received a fillip from BHP’s approach, the stocks are deep in the red for 2024.

Together, the large diversified companies have lost nearly $60 billion in value this year. One bad week – say copper retreats further and iron ore goes into double digits – would see them hit new 52-week lows. As the table shows, on a longer horizon their underperformance is even more startling.

Source: MINING.COM, stock exchange data, share performance as at November 22, 2024

In the past these stocks would consistently occupy the top five slots in the ranking, supported by vast asset portfolios covering a range of commodities across many regions.

In a boom and bust industry that was the key to success (if not survival) for companies that trace roots back many decades if not more than a century.

In a new report, Boston Consulting Group points out mining companies’ underperformance over the last decade when only about one in four companies delivered a total shareholder return (TSR) greater than the bellwether MSCI World Index and return on capital has been equally inferior:

“In their pursuit of growth, miners triggered price crashes that destroyed value. Given this performance, it’s not surprising that many investors commonly view mining companies as a “trade,” and that many active and specialist investors have abandoned the market.”

While the industry faces many common challenges including grade fade, geopolitical and policy uncertainty, particularly in permitting (more than 90% of exploration projects fail to turn into physical mines), climate disruption, and social pressures, BCG’s study of 77 companies across commodities and regions did find some industry darlings.

The top-quartile performers, many of them based in frontier jurisdictions, achieved an average TSR of 22% over the past decade (year-end 2013 through year-end 2023), outperforming the other industry participants by 18 percentage points.

Source: BCG *Value Creation in Mining 2024*

While the first quartile were able to deliver stellar results through revenue growth and margin expansion, the mining majors have been unable to increase production to a meaningful extent, and margins shrank on average by around 20%, says BCG.

BCG sees two reasons for the struggles of the majors:

“First, their strategic choices have limited their degree of freedom. The focus on large, long-life, and low-cost assets may have improved their resilience through cycles, but good assets alone do not yield TSR outperformance. The focus on low-risk jurisdictions has constrained their ability to quickly develop and access high-grade ore.

“Furthermore, their reluctance to invest in smaller (and somewhat easier to build) mines has made it harder for them to adapt to development challenges and consistently deliver steady growth.

“In addition, diversification has increased the complexity of the majors’ businesses without an apparent corresponding payoff for shareholders. By complexity, we mean everything from organizational structure and business systems to different types of operations and value-chain integration.”

BCG’s remedies for this drag on performance include “having a playbook for value-creating M&A,” committing to new locations and adopting new mining methods:

The process of simplifying operations, shedding assets, spin-offs and the like is well underway at the top tier.

But as BHP’s failed takeover of Anglo, which indeed did come with demands for non-core asset sales and divestment from certain locations, shows value-creating M&A is easier said than done.

Engineered additive makes low-cost renewable energy storage a possibility

November 24, 2024 By News Team

Solar and wind are quickly transforming the energy landscape—but if we are to realize the full potential of these intermittent, renewable energy sources, we’ll need safe, affordable batteries capable of storing it.

As part of an effort to overcome the long-term energy-storage challenge, University of Wisconsin–Madison engineers have invented a water-soluble chemical additive that improves the performance of a type of electrochemical storage called a bromide aqueous flow battery.

“Bromide-based aqueous flow batteries are a promising solution, but there are many messy electrochemical problems with them. That’s why there’s no real successful bromide-based products today,” says Patrick Sullivan who graduated from UW–Madison with a Ph.D. in chemistry in 2023. “Yet, our one additive can solve so many different problems.”

Sullivan, Ph.D. student Gyohun Choi, and Dawei Feng, an assistant professor of materials science and engineering at UW–Madison, developed the additive. The research was published on October 23, 2024, by the journal Nature.

Currently, giant tractor-trailer-sized lithium-ion battery packs store energy for the grid—but with technical limitations. Lithium batteries have safety concerns due to the potential for fires and explosions and a complicated international supply chain.

Aqueous flow batteries, however, could make grid-scale storage safer and cheaper. In these batteries, positive and negative liquid electrolytes circulate over electrodes that are separated by a membrane. Since the batteries use ions dissolved in a liquid—water—they can be scalable, sustainable and safe.

The most commercially mature flow batteries are based on vanadium ions, which, like lithium, are expensive and hard to source. However, another version of these flow batteries relies on bromide, a cheap, widely available ion that performs similar to vanadium—at least on paper.

In practice, however, tiny bromide ions cause all sorts of problems in flow batteries. They can pass through the membrane that separates the electrodes, and that reduces the battery’s efficiency. Sometimes the ions precipitate out of the electrolyte and form a messy oil that “sinks” to the bottom of the solution. Occasionally, the ions also form toxic bromine gas. These issues hinder practical performance and reliability.

An additive called a complexing agent could help. Choi set out to find an additive that enhances bromide aqueous flow battery performance. The researchers used molecular design to engineer over 500 candidate organic molecules they call “soft-hard zwitterionic trappers.” They synthesized and tested 13 of these representative molecules as potential additives for the bromide batteries.

The resulting multi-functional additives solve the flow battery’s main problems. It encapsulates the bromide ions while allowing them to remain water-soluble, and since the resulting complex is now larger, they can’t pass through the membrane. The ions are also “phase-stable,” which means they don’t separate out of the water electrolyte or create toxic bromine gas.

Importantly, the additives dramatically improve the flow battery’s performance, increasing the efficiency and longevity of the chemical system. “Our devices with the additive functioned without decay for almost two months compared to ones without it, which typically fail within a day,” says Feng. “This is important because for green energy storage, you want to use it for 10 or 20 years.”

The team plans to continue refining the work. Choi will study the fundamental science behind additives for bromide and iodide flow batteries, while Sullivan, who is CEO of Flux XII—a renewable energy spinoff company he co-founded with Feng—will explore the commercial viability of the additive, which has already been successfully produced in industrial ton-scale reactions.

Gold price set for biggest weekly jump in 20 months on haven demand

November 23, 2024 By News Team

Gold headed for the biggest weekly gain since March last year as an escalation in the Russia-Ukraine conflict boosted its haven appeal, with traders also assessing prospects for further easing by the Federal Reserve.

Bullion rose by as much as 1.5% to $2,710.16 an ounce after Ukraine said Russia launched a “new” kind of ballistic missile at the city of Dnipro in an alarming signal to Kyiv’s Western backers. Heightened geopolitical tensions tend to drive investors to safety assets, such as gold.

“The tit-for-tat escalation between Russia and Ukraine has lifted the geopolitical temperature to higher levels than those seen during the year-long war between Israel and Iran-backed militants, and markets have responded accordingly,” said Ole Hansen, head of commodities strategy at Saxo Bank.

The renewed haven demand “has injected fresh momentum back into the market following an early November correction,” Hansen added.

Traders were also weighing comments from Fed Bank of Chicago President Austan Goolsbee, who said he sees interest rates moving “a fair bit lower,” and expressed confidence inflation is easing toward the central bank’s target. Lower rates typically benefit bullion as it doesn’t pay interest.

The precious metal has surged more than 30% so far this year, supported by healthy central bank buying, increasing safe-haven demand and the Fed’s cycle of cutting interest rates. The precious metal’s rally was dented in the weeks following the re-election of Donald Trump, as the dollar surged, weighing on commodities.

There are widespread expectations for fresh records in 2025, with Goldman Sachs Group Inc. and UBS Group AG both issuing bullish outlooks for the precious metal in recent days.

Spot gold was up 1.3% at $2,704.11 as of 12:40 p.m. in New York, taking its weekly gain to 5.5% so far this week, its best performance since March 2023. The Bloomberg Dollar Spot Index rose 0.4%, extending two days of gains. Silver and platinum rose, while palladium fell.

Earth AI, Legacy Minerals make first greenfield palladium discovery using artificial intelligence

November 22, 2024 By News Team

Clean energy metals explorer Earth AI and its joint venture partner Legacy Minerals (ASX: LGM) announced Thursday the verified discovery of one of the largest palladium mineral systems in Australia.

The discovery was made near Wombat, in the Southwestern Slopes region of New South Wales, at a site known as the Fontenoy project, in a mineral rich area of the Lachlan Fold Belt.

Beyond the original drilled area, Earth AI said it has uncovered broader mineralization across a 2 km2 zone, which could make it the largest platinum group elements (PGE) prospect in the world.

This discovery of palladium, platinum and nickel is both the first verified greenfield mineral discovery made by artificial intelligence (AI), and the first discovery of magmatic nickel, copper and PGEs on the east coast of Australia, a region previously thought to contain no magmatic nickel, the companies said.

Earth AI said the discovery presents a potential shift for the critical minerals’ global markets. Roughly 40% of palladium is produced in Russia, which has been subject to growing calls for international sanctions, while another 40% is produced in South African brownfield mines that are known for dangerous working conditions and poor economics.

Palladium is a vital component used in catalytic converters to reduce noxious emissions in internal combustion engine and hybrid vehicles, while platinum and nickel are both used in energy transition technologies including hydrogen fuel cells and lithium-ion batteries.

“The opportunity at Fontenoy is massive and it is a project that has huge significance, both in providing critical metals needed for the energy transition,” Earth AI CEO Roman Teslyuk said in Thursday’s news release.

Earth AI, founded in 2017, takes a novel approach to mineral exploration that combines AI-powered mineral discovery software and proprietary drilling technology. This identifies mineral prospects and validates and delineates the scale of the deposits faster and more cost efficiently than traditional methods, it said.

In 2023, Earth AI made the first discovery of a greenfield molybdenum deposit using artificial intelligence.

Earth AI first identified Fontenoy as highly prospective for magmatic nickel in 2022. The company later established a joint venture with Legacy Minerals, agreeing to a 3% royalty on mining revenue in exchange for identifying and drilling a discovery hole.

Last month, Earth AI entered into an agreement to take an 80% equity stake in the project.

China’s germanium, gallium ban could cost the US $3.4 billion

November 21, 2024 By News Team

The US economy could see a $3.4 billion hit if China imposes a total ban on gallium and germanium, according to a new report released by the United States Geological Survey (USGS).

In 2023, China imposed export licensing controls on mineral commodities containing gallium and germanium, requiring state approval for all exports and establishing a pathway to progressive export restrictions. China announced restrictions on the export of eight gallium and six germanium products starting Aug. 1, the latest salvo in an escalating war between Beijing and Washington over access to materials used in making high-tech microchips.

China supplies 60% of the world’s germanium, used in applications such as fiber optic cables, solar cells, and infrared technology. Prices for the metal hit record highs earlier this year in China due to speculation about potential state buying.

According to the USGS, economic losses in the US would primarily impact the semiconductor device manufacturing industry, accounting for over 40% of the total loss. Additional losses would affect downstream producers reliant on semiconductors.

The agency also forecasts gallium prices could increase by more than 150% and germanium prices by 26% in the event of a total ban.

“Losing access to critical minerals that constitute a small fraction of the value of products like semiconductors and LEDs can result in billions of dollars in economic losses,” said Nedal Nassar, lead author of the report.