Anton Löf talked about The Demand for High Grade Iron Ore at China Mining 2019

At China Mining 2019 in Tianjing, China, Anton Löf was invited to present RMG Consulting’s views on the iron ore high grade market. Anton talked in the session where the Global Mining Situation was discussed. The conference is organised in cooperation with the Chinese Ministry of Natural Resources and is one of the most important mining conferences in China.

For more information visit the conference website: http://www.chinaminingtj.org/en/

”Ohållbara konstruktioner förbrukar jordens resurser”

Magnus Ericsson with friends at the Academy of Engineering Sciences have written an opinion piece in the Swedish newspaper NyTeknik.

Produkter som är konstruerade för att kunna plockas isär är helt avgörande för ökad återanvändning. Förbrukningen av resurser inom elektronikindustrin är katastrofal, skriver bland andra Rolf Sandström, KTH och Charlotte Andersson, LTU.

Read more: https://www.nyteknik.se/opinion/ohallbara-konstruktioner-forbrukar-jordens-resurser-6970166?utm_custom%5Bcm%5D=355177032,35081&=

Trög elbilsförsäljning ger prisfall på litium

Magnus Ericsson was interviewed in the news and gave his views on the lithium market.

Trög elbilsförsäljning ger prisfall på litium

Priset på litium, som bland annat används för att tillverka batterier i elbilar, har fallit med 30 procent. Nya gruvor och sviktande elbilsförsäljning ligger bakom prisfallet.

Enligt nyhetsbyrån Bloomberg så har priserna på metallen litium rasat med 30 procent sedan mitten av förra året.

Anledningen är att många snabbt har flockats till vad som såg ut som en lukrativ gruvnäring. I Australien öppnade nyligen sex nya litiumgruvor.

– Det räcker med att det kommer i gång tre-fyra fem gruvor runt om i världen så har man täckt efterfrågan, säger Magnus Ericsson, professor i mineralekonomi och grundare av råvaruanalysföretaget RMG Consulting.

Samtidigt så har elbilsförsäljningen inte riktigt fått den fart man förväntade sig. I Kina, den största marknaden för nya elbilar, sjönk försäljningstillväxten första kvartalet i år jämfört med samma period i fjol.

Magnus Ericsson på råvaruanalysföretaget RMG Consulting säger att litium-marknaden är extra känslig för variationer i efterfrågan, eftersom den är relativt liten.

– Marknaden för litium har varit i storleksordningen 25-50 000 ton upp till för något år sedan. De stora metallerna, stål till exempel, det är 2000 miljoner ton varje år. Så det är en väldigt stor skillnad i efterfrågan mellan de olika mineralerna och metallerna, säger han.

Det är riskabelt att ge sig in i litiummarknaden nu, menar Magnus Ericsson. Det kan ta uppemot 15 år att starta en gruva, och på den tiden kan mycket hända.

– Det är inte säkert att den typ av batterier som man nu pratar om kommer att bli det som gäller om 10-15 år. Det här är en ny bransch, det kommer nya ideer och nya tankar. Befintliga batterikonstruktioner går det inte åt lika mycket kobolt, nickel eller litium som det var bara för några år sedan, säger Magnus Ericsson.

Skillnaden mellan tillgång och efterfrågan kommer få priset att svaja lång tid framöver, tror han.

– Med snabba förändringar på efterfrågesidan, om det kontrasteras mot långa processer på gruvproduktionssidan. Då får man en marknad som är lite i obalans, man kommer att få se stora prisuppgångar och prisfall på det här metallråvarorna i framtiden också. Det är jag helt övertygad om, säger Magnus Ericsson.

Philip Ramqvist
philip.ramqvist@sverigesradio.se

read more: https://sverigesradio.se/sida/artikel.aspx?programid=83&artikel=7273490

Valuation of Mineral Projects Based on Technical and Financial Modelling

Our dear friend Prof. Dennis Buchanan will present the course Valuation of Mineral Projects Based on Technical and Financial Modelling in Oulu, Finland, 22 - 25 October. During several years Raw Materials Group cooperated with Prof. Dennis Buchanan bringing his courses to Sweden. A much appreciated course for all those participating.

The course will be of particular interest to mining analysts, fund and asset managers, bankers, engineers responsible for development planning, exploration managers and other specialists in the valuation of mineral projects. It will also be of interest to government officials.

The course will be relevant to entrepreneurs needing to understand the qualifying framework that private equity funds use to evaluate projects.

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Anton, Magnus and Olof publishes in CIS Iron and Steel Review

Iron Ore Market Review 2018

CIS Iron and Steel Review (2019 Vol.17)

Iron ore prices remained at relatively high levels during 2018. Premia paid for high quality ores increased and are substantial. Global iron ore production is estimated to grow by around 2% in 2018. Sharp cuts in production of un-beneficiated ore have taken place in China during 2018. Demand for iron ore in general and for high grade products in particular has however increased. Future developments in China, both in the steel and iron ore industries, will be crucial to the global iron ore markets in 2019. This review is written in March 2019 and incorporates as much as possible figures and trends for the full year 2018, in some cases this is however not yet possible.

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Många vill jaga batterimetall

I spåren av elbilsboomen exploderade även intresset för att leta batterimetaller i Sverige.

Men än så länge har ingen gruva fått tillstånd. Och det lär dröja många år innan Northvolt kan hoppas på något därifrån, enligt Bergsstaten. 

Vanadin, litium, kobolt, mangan, grafit och nickel.

Alla är de metaller intressanta för batteritillverkare som Northvolt som nu tryckt på startknappen för sin jättefabrik i Skellefteå. Och de finns alla i Sverige.

Intresset för att leta efter dem har ökat kraftigt senaste åren.

Mellan åren 2010 och 2015 låg beviljade tillstånd att leta efter vanadin, litium och kobolt på mellan noll och 13 per år. 2016 stegrade den siffran till 34 för att öka till 65 året därpå och 43 stycken i fjol.

– Metallerna finns i Sverige, men inga gruvor, säger bergmästare Åsa Persson vid Bergsstaten.

Prospektering och att slutligen få tillstånd att utvinna mineralen är en lång process.

– Det handlar om många, många år, säger Åsa Persson.

Vissa har kommit längre, bland andra Talga Resources som har hittat en stor fyndighet grafit i Vittangi, enligt bolaget med den högsta halten i världen. Men gruvtillstånd saknas ännu, något de hoppas få klart med i höst. Planen är att förädla grafiten till färdigt anodmaterial med fullskalig produktion 2023.

– Vi vill se oss som en del av de värdekedjor för batterier som växer fram i Sverige, säger Talgas Sverigechef Anna Utsi utan att vilja gå in på huruvida företaget har kontakter med Northvolt.

Statliga gruvjätten LKAB har dragit i gång ett projekt för att ta reda på gruvslammet, restprodukter från järnmalmsbrytningen innehållandes olika jordartsmetaller, bland annat vanadin. Gruvbolaget avser att träffa Northvolt för att se om det finns några intressanta samarbetsprojekt.

– Men vi har inget som i dag utvinns, säger David Högnelid, marknads- och kommunikationschef på LKAB:s division Specialprodukter.

En annan svensk gruvjätte, Boliden, har heller inget att erbjuda i dagsläget, enligt bolaget.

Att dra i gång en gruva för smala och relativt sällsynta metaller är ett högriskprojekt, enligt flera bedömare TT talat med. Det gäller att ha långa planeringshorisonter för att våga investera.

I dag hämtas exempelvis mycket av världens koboltutvinning från politiskt mycket osäkra Kongo. Det driver upp priset, speciellt när efterfrågan på batterier skjutit i höjden.

Den priseffekten kan klinga av om läget skulle bli stabilare och därmed spricker kanske kalkylen för en tänkt ny koboltgruva.

Utöver det är teknikens framtid osäker.

– Batteristandarden är oklar. Man vet inte vilka metaller som kommer att vara rådande i batterierna framöver, säger Anton Löf, råvaruanalytiker på RMG Consulting.

 

Fakta: Metalljakt i Sverige

I fjol lämnades totalt 166 ansökningar om undersökningstillstånd av mineralfyndigheter in i Sverige. Året innan var motsvarande siffra 227 och året innan dess 139 tillstånd. Totalt gällande tillstånd låg vid senaste årsskiftet på 623, aningen högre än åren innan.

Åren före 2013 låg ansökningarna kring 200 per år, innan det blev ett fall under några år.

Bland de beviljade tillstånden 2018 var koppar och guld de vanligaste mineralerna och platserna vanligtvis belägna i Norrbottens och Västerbottens län.

Källa: Bergsstaten

Publicerad i Svenska Dagbladet 2019-06-13 

Olle Lindström / TT

Mining’s contribution to national economies between 1996 and 2016

Magnus Ericsson and Olof Löf publishes article in Mineral Economics.

In several low- and middle-income countries rich in non-fuel mineral resources, mining makes significant contributions to national economic development as measured by the revised Mining Contribution Index (MCI-Wr). Ten countries among the 20 countries where mining contributes most (highest MCI-Wr score) have moved up one or two steps in the World Bank’s country classification between 1996 and 2016. In particular, African countries have benefitted. Socio-economic development indicators also show signs of progress for African mineral-rich countries. This paper provides an update and expansion of an earlier study within the framework of the United Nations University (UNU) World Institute for Development Economics Research (WIDER) initiative Extractives for Development. Based on the detailed data available for the sector, such as production, export, prices, mineral rents, exploration expenditure and government revenues, an analysis is carried out of the current situation for 2016, and trends in mining’s contribution to economic development for the years 1996–2016. The contribution of minerals and mining to GDP and exports reached a maximum at the peak of the mining boom in 2011. Naturally, the figures for mining’s contribution had declined for most countries by 2016, but importantly the levels were still considerably higher than in 1996. The results of this survey contradict the widespread view that mineral resources create a dependency that might not be conducive to economic and social development. In addition, this paper presents an attempt to use already available socio-economic indicators for African mineral-rich countries to measure socio-economic developments. One preliminary conclusion of this survey is that mining countries perform better than oil-producing countries and non-mineral countries in Africa as measured by these indices of human development and governance.

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Magnus Ericsson publishes article in Euroasian Mining Journal

Internationalisation of mining education and research - a recurring process running through the centuries

International cooperation and mobility are buzzwords of today’s research and innovation clusters all over the world. These are however not new concepts. The understanding that research and innovation can only thrive in an international and open environment has been in place for at least 300 years in Sweden. All interested and knowledgeable scientists and business developers have been welcomed to push the front of knowledge and the industry forward. The international contacts of Swedish mining education, research and innovation prove that with an open mind and a persistent, long term effort results will come.

The roots of mining education and research in Sweden dates back to the 17th century. Initially the focus was on applied research rather than education, but the early efforts also slowly led to important purely scientific results. Swedish metallurgists/chemists have discovered more elements than scientists from any other nation. Over 150 years, from the early 18th century to the end of the 19th century, 20 elements - and among them many industrially important metals — were isolated and described.

The ancient Falu copper mine was the logical choice for location of one of the first technical schools in Sweden: “Falu Bergskola” (Falu Mining School), which was set up in 1822. Its first director was precisely one of the chemical scientists engaged in the discovery of new elements. This Mining school was later merged with other existing institutions offering some technical training into “Tekniska Institutet” (the Technical Insitute). This was in 1876 transformed into a technical high school along German models. The Association of Swedish Iron and Steel industry (Jernkontoret in Swedish) was a key supporter and funder of these developments. The new school was called Kungliga Tekniska Högskolan (KTH) in translation Royal Institute of Technology. KTH had 5 departments, including a school of mining science.

In 1972 the education of mining engineers was transferred to the newly established Luleå Technical College close to the Arctic Circle. The College was later expanded and in 1997 renamed Luleå University of Technology (LTU). LTU has become one of the leading mining universities in Europe, to a large extent due to the fact that it is situated in the centre of one of Europe’s remaining mining regions. Around 2/3 of all university trained staff employed by Swedish mining has been trained at LTU. But LTU has also had its focus on the mining sector for a long time and in its internal program Mines of the Future it has relentlessly pushed the importance of mining and minerals and demonstrated its ambition to be a leading actor in this area. LTU has been appointed by Swedish government to lead the national education and research in mining. The recent decision by the EU to locate one EIT Raw Materials CLC (Co-location Centre) to Luleå means that the university has been given a similar role also on the EU level. LTU has actively built international links and supported cooperation with other universities within Europe and around the world. The bold and officially stated aim is to become one of the globally leading mining universities.

Eurasian Mining, ISSN 2072-0823, Vol. 2, p. 44-48

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Magnus Ericsson presented at the South African Institute of International Affairs (SAIIA) seminar on “EU’s normative role in African extractive governance”.

In conjunction with the 25th Mining Indaba South African Institute of International Affairs (SAIIA) hosted a seminar of “EU’s normative role in African extractive governance”. RMG Consultants and Magnus Ericsson was invited to report from the STRADE (Strategic Dialogue on Sustainable Raw Materials for Europe) project which completed a 3-year Horizon 2020 project in November 2018.

Photo: SAIIA

Photo: SAIIA

For details about the STRADE results please go to www.stradeproject.eu

For details about SAIIA please go to https://saiia.org.za

For details on the seminar please see https://saiia.org.za/event/save-the-date-4-february-2019/

Africa’s push to add value to minerals now a riskier gamble

Magnus Ericsson is quoted in Jordan Times.

14 December 2018

LONDON — African government efforts to force mining companies to process minerals before export may backfire as they come up against weakening commodity prices and investor demands that firms reduce risky investments.

In the last year alone, Zimbabwe, Zambia, Democratic Republic of Congo (DRC), Namibia, South Africa and others have hinted at, announced or put in place measures aimed at adding value to minerals exports, which would boost tax revenue, encourage formation of new businesses and add jobs.

But with falling metal prices and a drastic reduction in the capital available for the mining industry, wary companies are increasingly shying away from investment in countries where the rules of the game can change quickly.

“Investment sentiment in the last year has moved against the mining sector, but the governments tend to have a lagging view of how this is going to affect investment in their countries,” said Mike Elliott, global mining and metals leader at Ernst & Young.

“They continue to argue that mining needs to make a bigger contribution to their economies, but you’ll have to see investment severely tail off to make them think they need to attract investment rather than scare it away,” he added.

According to consultants, governments could find more targeted and effective ways of adding value to local economies.

For example, they could push local companies that provide services for the mining industry such as logistics, security, catering and construction to become more competitive and then tighten regulation around the procurement of such services, consultant Tom Wilson at Africa Practice suggested.

“Ultimately you can’t turn market forces on their head. You have to figure out where the country has the capacity to fill the need for goods and services and provide some structures that actually help indigenise some businesses,” Wilson said.

The top five mining companies are slashing total capital spending from a peak of about $70 billion in 2012 to an expected $46 billion in 2015, according to Reuters I/B/E/S.

Mining firms have been taking costly writedowns following years of risky bets to pursue growth, and they now need to prove to shareholders they can use their cash more wisely.

“Companies need to decide whether they wish to continue mining in these countries and face what the governments want to do in terms of beneficiation or pull out. And in some cases it will be a pull-out strategy,” said Kevin Goodrem, vice president of beneficiation for De Beers Group.

The hard line

Zimbabwe, which holds the world’s second-largest platinum reserves after South Africa, has taken a hard line. President Robert Mugabe late last year threatened to stop exports of raw platinum in a bid to force mining firms to process the metal domestically.

The government said last month it had short-listed two companies to build a refinery by 2016, but industry players expect the project will take much longer than two years.

A source at a mining company operating in southern Africa said the volumes mined in Zimbabwe are not enough to make construction of a $2-$3 billion refinery economically viable, and he was sceptical that the energy supply would be sufficient to run it.

But companies operating in Zimbabwe, which include top world platinum producers Anglo American Platinum and Impala Platinum Holdings, have to remain engaged with the government to avoid losing assets.

“For the platinum miners who operate in Zimbabwe, it is a very concerning time. And it is a bit of a tragedy for Zimbabwe, because they are a very significant producer, but no global capital is going to go there today with that policy uncertainty,” Elliott said.

The DRC and Zambia, Africa’s largest copper producers, are also trying to boost downstream investment.

Kinshasa is trying to implement a ban on exports of copper and cobalt concentrates but has so far encountered the resistance of the powerful governor of Congo’s copperproducing Katanga province.

Many in the industry say the ban is unrealistic as acute electricity shortages hamper processing activities in Congo.

In Zambia, President Michael Sata in October revoked a law that had suspended a 10 per cent duty on exports of unprocessed minerals including copper, iron, cobalt and nickel.

Miners say that although some plants are being built, Zambia does not have enough smelting capacity to process all its copper, so they are accumulating high stocks of concentrate.

“Some of these countries are trying to run before they can walk,” remarked Deutsche Bank analyst Robert Clifford.

“I understand why they want to do it, but they have to provide some assurance to companies that they are not going to pull the rug out from under their feet and change the rules once they have spent billions of dollars,” he said.

Also new smelters and plants may not make sense if their products are expensive and uncompetitive in global markets.

Mining experts say governments should avoid blanket policies and instead target parts of the industry that will actually benefit from downstream investment.

They cite Indonesia’s controversial ban on exports of unprocessed mineral exports as an example.

The ban is expected to boost downstream processing investment in the next few years in nickel, where the country is competitive. But in copper, it is expected to achieve little besides souring the relationship between the government and producers.

Wary of the risks, Namibia seems to have taken a softer approach so far. The government has commissioned a study to identify the commodities it would be more beneficial to process.

“You have to be careful with value-addition policy, because the risk is that it could be value disruptive,” said Magnus Ericsson, founder of the Raw Materials Group, a consultancy that advices governments and companies on mining issues.

“One policy doesn’t fit all. That’s a recipe for disaster,” he added.