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The recent civil unrest in Kazakhstan – the world’s biggest producer of uranium – underscores the need for increased regional diversification of supply, says Toronto-listed developer GoviEx Uranium, which owns projects in Niger, Zambia and Mali.

In a letter to stakeholders, executive chairperson Govind Friedland and CEO Daniel Major say that the outlook for uranium has become increasingly positive and that the crisis in Kazakhstan has highlighted the potential risk to output, given the concentration of supply.

Kazakhstan, which supplies about 40% of the world’s uranium, has been rocked by major anti-government protests, which led to the resignation of the government on January 5.

National atomic company Kazatomprom said on January 13 that it had not experienced any delays or disruptions to production, deliveries or sales plans and that it it remained "a secure and reliable supplier, despite operating in a jurisdiction of higher perceived political risk.

Canadian uranium major Cameco also warned that the situation in Kazakhstan should be a reminder for utilities that an over-reliance on any one source of supply is risky.

Friedland and Major believe that GoviEx’s projects could provide regional diversification at a time when demand for uranium is forecast to increase with China having pledged to build 150 new nuclear reactors by 2060, and the prospect that nuclear may be included in EU taxonomy regulation.

“The outlook for uranium has become increasingly positive and we have worked diligently to position ourselves to take full advantage as a new entrant to the market,” Friedland and Mayor note.

GoviEx’s main focus is its flagship Madaouela project, in Niger. A feasibility study for the fully-permitted project will be completed by mid-year, with a target of starting production in 2023. First commercial uranium production is targeted in 2025.

The prefeasibility study of February 2021 estimates that the mine will produce 2.48-million pounds a year of uranium oxide over 20 years, at a cash operating cost of $22.18/lb.

Startup capital expenditure of $347-million will be required.

The company’s two other assets are the mine-permitted Mutanga project, in Zambia, which is forecast to start production in 2027, and the Falea project, in Mali.

Mutanga could be the lowest capital-intensive uranium project in Africa, Friedland and Mayor say. According to a 2017 preliminary economic assessment, Mutanga will require startup capital of $121-million to develop a mine producing 2.6-million pounds a year of U3O8 at a cash cost of $31.1/lb over 11 years.

Falea is a “fascinating exploration project with great potential”, the GoviEx executives note. The project contains an indicated resource of 17.4-million pounds of U3O8, 24.4-million pounds of copper and 16.1-million pounds of silver, as well as an inferred resource of 13.4-million U3O8, also with copper and silver mineralisation.

The World Gold Council (WGC) highlights in its latest outlook for gold that the precious metal may well face similar dynamics to those of last year as competing forces both support and curtail its performance.

The gold price will likely react to tightened monetary policy this year, as a result of global banks trying to control inflation. Yet, while rate hikes can create headwinds for gold, history shows their effect may be limited, the council reports.

Simultaneously, elevated inflation and market pullbacks can likely sustain demand for gold as a hedge.

This while long-term support for gold will come from continued central bank demand and jewellery markets.

In the meantime, the WGC says that, although the gold price rallied into the year-end on the heels of the rapidly spreading Omicron variant of Covid-19, ending the year at $1 806/oz, only 4% lower than at the end of 2020, it was not enough to offset the weakness experienced in the first half of 2021.

The first half of 2021 saw investor optimism over vaccine rollouts resulting in reduced portfolio hedges and gold outflows from exchange-traded funds.

The rest of the year was a tug of war between uncertainty about new Covid-19 variants, increasing risks of persistently high inflation and a rebound in gold consumer demand, against interest rates and a stronger dollar pushing gold demand down.

This year is poised to see a hawkish stance from the US Federal Reserve, with it aiming to reduce the size of its balance through tightened monetary policy. On the other hand, the European Central Bank has indicated it is unlikely that interest rates will rise in 2022, despite recent record inflation prints.

The Reserve Bank of India has also signalled its intention to maintain its accommodative monetary policy stance to revive economic recovery.

The views remain mixed over whether inflation will linger and the WGC explains that central banks initially played down inflation concerns, and while some have acknowledged upside risks, there is an underlying expectation that inflation will dissipate.

“Investors seem to be less sure. While the vast majority expect inflation to remain high, many still believe it will cool down. Gold historically performed well amid high inflation,” the WGC notes.

The council adds that, despite potential rate hikes by some central banks, nominal rates will remain low from a historical perspective. Even more so, elevated inflation will likely keep real rates depressed. This is important for gold, since its short- and medium-term performance tends to respond to real rates.

“It has been two years since the start of the pandemic and the world seems ready to move on. Global stock markets have strongly rebounded from their 2020 lows, albeit at different rates. But ‘tail events’ have also been on the rise.

“Pullbacks are likely to continue in the face of the seemingly endless stream of new Covid variants, as well as simmering geopolitical tensions and overall buoyant equity valuations fuelled by a long-lasting ultra-low rate environment,” the WGC says.

The council adds that, in this context, gold can be a valuable risk management tool in an investor’s arsenal. Gold has a proven record of mitigating the negative impact of equity market pullbacks in periods of systemic risk.

The WGC summarises its outlook by stating that gold can still receive positive support in 2022 from key jewellery markets such as India and central banks will remain an important source of demand.

“[But] gold’s performance in 2022 will, ultimately, be determined by which factors tip the scale.”

Hydrogen fuel cells are increasingly being viewed as an attractive technology to decarbonise large parts of industry, particularly heavy-duty transport.

Two key barriers to more widespread adoption of fuel cells are the costs and production scale of fuel cell systems.

In response, innovative low-cost and energy-dense fuel cells manufacturer, Swiss-based EH Group Engineering AG, has developed proprietary technology to help address both these constraints.

It has done so with the aim of creating energy dense fuel cells that can be produced at a scale and cost to competitively meet global demand across mobile and stationary applications. Platinum, mined overwhelmingly in South Africa, is an essential catalyst in proton exchange membrane, or PEM, fuel cells.

‘We believe this technology has the potential to be game-changing, and targets two important challenges for making fuel cells and hydrogen, as a global decarbonisation vector, more competitive, AP Ventures managing partner Andrew Hinkly stated.

EH Group stated on Thursday that it had raised over CHF5-million in pre-series A funding, with AP Ventures participating in the raise. Anglo American Platinum-linked AP Ventures is a significant investor in breakthrough hydrogen technologies.

Proceeds will go towards the installation of EH Group’s own proprietary stack assembly technology as well as to the continued development of the company’s first commercial fuel cell stack products. EH Group, which will be looking to raise additional capital in 2022 to finance its progression to commercial-scale roll-out, expressed delight at having a marquee investor in AP Ventures join it on its ambitious journey.

The Swiss company lauded AP Ventures’ longstanding pedigree in investing across the hydrogen value chain as being second to none.

“We look forward to capturing synergies and deepening our relationship as we work to accelerate our fuel cell deployments,” EH Group’s Christopher Brandon stated in a media release to Mining Weekly.

Founded in 2017, EH Group is focused on the design and production of its innovative fuel cell technology, across both stationary and mobile applications.

Its fuel cell stacks and systems offer significant power density. The implementation of a fully automated production process is aimed at widespread deployment of its fuel cell technology for a decarbonised future.

Headquartered in London, but with a South African presence, AP Ventures manages venture capital funds with a global mandate to invest in pioneering new technologies and businesses which aim to solve global challenges such as renewable energy integration, resource scarcity and a growing population.

AP Ventures, which has been investing in the hydrogen industry since 2013, is recognised for its cross-value-chain venture capital fund.

It manages $395-million of assets on behalf of 12 entities and presently has a portfolio of 17 technology companies across the hydrogen value chain.

AP Ventures is led by Hinkly and founding partner Kevin Eggers.

Gold exchange-traded funds (ETFs) experienced outflows of 173 t, or $9.1-billion, in 2021, driven by North American funds whose assets fluctuated in tandem with the gold price.

Collective gold holdings were down 5% year-on-year to 3 570 t for the year, while assets under management in value terms dropped by 9% year-on-year to $209-billion, as net outflows were compounded by a 4% contraction in the gold price.

Despite the considerable outflows in 2021, gold ETF holdings remain above pre-pandemic levels, as a result of the record inflows of 875 t, or $48-billion, during 2020.

Asian gold ETFs emerged as the primary growth driver among global funds, adding about 20%, or $1.5-billion worth of gold, over the year, while gold ETFs in Europe turned positive in the second half of 2021, amid rising inflation expectations.

The World Gold Council explains that Chinese-based funds, which make up more than 60% of total inflows for the region, are being driven by concerns over slowing economic growth and lower yield expectations, as well as local investors taking advantage of a lower gold price.

Gold finished the year at $1 806/oz, which indicates a slight price rally on the back of the rapidly spreading Omicron variant of Covid-19, prompting flight-to-quality flows, but it was not enough to offset outflows from earlier in the year.

Overall, gold faced headwinds from higher bond yields, especially during the first quarter, and a stronger dollar, particularly in the second half of the year.

Conversely, gold was supported by concerns that inflation surprises would not be transitory and market volatility linked to continued Covid-19 variants.

Looking ahead, the council believes gold will experience similar dynamics in 2022.

The persistence of high inflation is still likely owing to knock-on effects from Covid-induced monetary and fiscal policies, supply-chain disruptions and a tight labour market.

This, combined with high equity market valuations, potential new Covid-19 variants and a growing appetite for less liquid assets, could well result in more frequent market pullbacks and increased demand for gold as a portfolio hedge.

Gold may also find continued support from consumer demand and central bank purchases, both of which continue to be important long-term drivers of performance.

On the contrary, gold may also face challenges if interest rates rise quicker than currently anticipated.

“In our view, however, despite potential rate hikes both nominal and real interest rates will remain low from a historical perspective.

This, in turn, will continue to drive structural changes in the composition of investment portfolios and likely increase the need for a high-quality liquid asset such as gold,” the council states.

The formal launch takes place this Tuesday of South Africa’s first green ammonia project, which has already secured an in-principle offtake agreement from a global player – a clear indication of the world’s ‘go green’ momentum.

Hive Hydrogen and BuiltAfrica – together as Hive Hydrogen South Africa – as well as Linde plc, through its wholly owned South African subsidiary Afrox, have teamed up to establish this R75-billion green ammonia export plant in Nelson Mandela Bay, Eastern Cape, which is expected to generate 10 000 direct and indirect jobs. (Also watch attached Creamer Media video.)

Former Eskom CEO Thulani Gcabashe, as chairperson of Hive Hydrogen South Africa and executive chairperson of BuiltAfrica, expressed Hive Hydrogen’s delight at bringing what he described as a landmark green ammonia project to South Africa.

A combined 3 200 MW of renewable sun and wind energy will electrolyse of 3.4 megalitres of sea water a day as part of a desalination and hydrogen extraction process. Proton exchange membrane or PEM electrolysers generally make use of South Africa’s platinum and iridium platinum group metals.

The project will be working closely with salt-making company Cerebos, which has an adjoining desalination plant.

Nitrogen will be simultaneously extracted from the air utilising an air separation unit. The hydrogen and nitrogen will then be combined through ammonia synthesis to produce green ammonia, which will then be cooled, liquified and stored for export.

Planned is the export of 780 000 t/y of green ammonia a year from the Coega special economic development zone in ships that will likely be driven by green ammonia themselves at that stage, given the fast pace of change.

The first phase is expected to go live in 2025, with full operation by the end of 2026.

In an exclusive Zoom interview with Engineering News & Mining Weekly, Gcabashe spoke with enthusiasm about the positive response the project is already receiving from banks, corporates and investment houses willing to invest in it.

Gcabashe was also full of praise for the Coega Development Corporation, which he described as an excellent partner, as well as Transnet, which he said had indicated the availability of space at the port for the export of a commodity already showing strong global demand.

Gcabashe spoke of the need for South Africa Inc to revive its long-held capability in development of mega projects and the country’s strong track record in carrying out big projects on time and on budget.

He described green hydrogen and green ammonia projects as now having the potential to be a game-changing growth pursuits for South Africa.

The project certainly heralds a new era in its commitments to greener solutions for industry and is being driven by companies with strong green credentials. BuiltAfrica is a company with renewable energy operations and Hive Energy UK, under CEO Giles Redpath, has been working on renewable energy powered green hydrogen and green ammonia projects since 2019.

Following the completion of the project’s prefeasibility study, all concerned have been confident in announcing their collective aspiration to move forward to the final investment decision and the commencement of the development of this leading project.

Engineering News & Mining Weekly: What motivated your decision to take steps to produce and export green ammonia?

Gcabashe: BuiltAfrica, from the outset, has been a company that has only worked in renewable energy. We have a couple of solar plants that are in operation and Hive Energy similarly – most of their portfolio is in renewable energy. They are quite big internationally. As players in that space, we always had a concern about the intermittency of renewable energy sources and hydrogen has always had the potential to be a zero-carbon energy carrier that can also be stored and transported. When this opportunity came, we really latched on to it to try and produce green ammonia initially for the global market.

Who will buy the ...

JSE- and TSX-V-listed tin miner Alphamin Resources, which owns and operates the Mpama North mine in the Democratic Republic of Congo, increased its contained tin production by 10% quarter-on-quarter to 3 114 t in the fourth quarter ended December 31.

A producer of 4% of the world’s mined tin, the miner also increased its contained tin sales during the period by 13% to 3 056 t, while its earnings before interest, taxes, depreciation and amortisation guidance was a record $74-million – up 38% from the third quarter.

Quarter-on-quarter, Alphamin’s net cash increased by 6 486% from $1.03-million in the third quarter, to $68-million in the fourth quarter.

In line with Alphamin’s vision to become a major sustainable tin producer, and from a capital allocation perspective, the miner’s board considered the combination of significant exploration, investment in growth and a high dividend yield – a robust value proposition leading to it declaring a 2021 financial year dividend of C$0.03 a share ($30-million in the aggregate).

The dividend is payable on February 11 to shareholders of record as of the close of business on February 4.

Dividend distributions will be considered based on excess free cash after taking account of working capital requirements, reserve contingencies and expansion opportunities.

In terms of tin processing, the miner produced 1% less quarter-on-quarter at 107 981 t, while the grade of tin improved to 3.9% tin, from 3.5% tin in the third quarter.

Canadian miner Ivanhoe Mines has set its sights on producing between 290 000 t and 340 000 t of copper in concentrate this year.

The Kamoa copper project, in the Democratic Republic of Congo, produced 105 884 t of copper in concentrate in 2021. This exceeded the upper end of the guidance range, which was set at between 92 500 t and 100 000 t.

The project has been ramping up its processing capacity as part of Phase 1 of project. Phase 2 expansion is 80% complete and will start operations in the second quarter of the year.

Phase 2 will take the plant’s nameplate milling capacity to 3.8-million tonnes a year.

Ivanhoe co-chairperson Robert Friedland says Phase 2 remains significantly ahead of schedule and that the project is well on its way to doubling its annualised copper output to more than 400 000 t starting early in the second quarter – vaulting Kamoa Copper into the ranks of the world’s ten largest copper mines.

Phase 3 of the concentrator expansion is targeted for 2024, with earthworks to access new mining areas already under way.

"Our outstanding team of geologists are confident that the Kamoa and Kakula mines are just the initial discoveries of a major new mining district, which extends the storied African Copperbelt in a southwesterly direction all the way to the Zambian border.

“We will be conducting an extensive drilling campaign on our majority-owned Western Foreland exploration licences this year to unlock the potential of this highly-prospective ground,” Friedland says.

Meanwhile, the guidance range for cash costs (C1) per pound of payable copper in 2022 is between $1.20/lb and $1.40/lb of payable copper.

C1 costs per pound of payable copper for Q3 2021 totalled $1.37/lb in the third quarter last year, while cost of sales per pound of payable copper sold for the third quarter was $1.08/lb.

Power utility Eskom should link its delayed Tubatse pumped storage scheme to the need for Hillside Aluminium to go green.

This could be done, a close observer of the intensive electricity user sector of the South African economy contends, through Eskom doing an independent power producer (IPP) or public-private partnership transaction with Hillside aluminium, a critically important commercial partner to Eskom and its closest operational customer.

As reported by Mining Weekly last week, if the ASX- LSE- and JSE-listed South32 group is unable to secure an affordable source of low-carbon electricity for Hillside, this key KwaZulu-Natal smelter risks becoming uncompetitive in the international market over time, given the emergence of carbon border tariffs and end-user demand for green aluminium.

The contention being put forward is that Eskom’s De Hoop dam Tubatse hydro-battery project, which was held back several years ago owing to capital constraints, could be able to do what chemical batteries cannot, and assist the South African economy materially at the same time.

Had the Tubatse hydro-battery project gone ahead when originally scheduled, it would likely have paid for itself by now in diesel saving during day peaks.

Now, owing to the large capacity of the Tubatse hydro-battery requiring an equally large customer, Hillside and Eskom are seen as a perfect match for a deal of this nature.

South32’s initial study results indicate that, combined with battery storage, renewables could be technically feasible, through new solar photovoltaic and wind capacity.

Owing to the electricity-intensive aluminium smelter’s significant economic and social importance, South32 has commenced just transition planning to support options for the smelter if its energy transition is not commercially viable and the smelter becomes uncompetitive.

The aluminium smelter plays an important role in underpinning the stability of the national electricity grid, as Eskom has the flexibility to interrupt supply to the smelter to support management of the grid and minimise load-shedding.

But Hillside also accounts for a high 58% of the Scope 1 and 2 carbon emissions of the four operations that South32 runs owing to its carbon-intensive electricity consumption and is in need of significant greening.

Many large long-life hydro-batteries are going ahead around the world because of their ability to store electrical energy in large quantities.

It is contended that Tubatse would enable a green Hillside smelter to compete from 2030 to beyond 2050 only if Eskom and Hillside continue their very close relationship over these three necessary phases:

Eskom IPP contracts the construction of the 12 000 MWh Tubatse hydro-battery to Hillside through a contractual amendment of their power supply contract on the basis of the integrated Eskom grid being able to optimise the use of the 12 000 MWh Hillside hydro-battery to eliminate burning turbine diesel during daily peak load periods, and both Eskom, and a greener Hillside scoring the carbon-credits and avoiding expensive peak tariffs;

New 1 000 MW photovoltaic and wind electricity being wheeled over Eskom grid to power Hillside during most days, with Eskom grid backup; and

Another new 1 000 MW photovoltaic and wind to recharge the Tubatse hydro-battery, again with Eskom grid backup.

Currently Eskom grid is the backup to South32’s Mozal Aluminium smelter in Mozambique, which is hydropowered.

Without the 12 000 MWh IPP hydro-battery project available from Eskom, there is a likelihood that Hillside will close when its low-cost Eskom power contract expires in less than ten years.

Could Hillside's modern potlines then be relocated to the Democratic Republic of Congo (DRC), for 24-hour green power from the Inga 3 hydropower project?

Was it BHP Billiton, out of which South32 was unbundled, that replaced President Thabo Mbeki's important Westcor Project, by convincing the DRC that aluminium smelting in the DRC is better than 4 000 MW to...

Diversified major BHP will make a $90-million investment into private firm Kabanga Nickel to accelerate the development of the Kabanga nickel project, in Tanzania.

Kabanga Nickel on Monday announced an initial $40-million investment by the miner, which will convert into an 8.9% equity stake in Kabanga Nickel once approvals and conditions are met. Once invested and on conversion the second tranche of $50-million will increase BHP’s equity stake in Kabanga Nickel to 17.8%, thereby valuing the project at $658-million.

On satisfaction of additional conditions, BHP will secure the right to make a further investment in Kabanga Nickel subject to achieving certain agreed milestones.

“We are delighted to announce this partnership with BHP. It highlights the world-class nature of the Kabanga deposit and its importance in helping meet the crucial decarbonisation challenge facing the world today,” said Kabanga Nickel CEO Chris Showalter.

“BHP is the ideal partner for Kabanga Nickel, bringing significant advantages and expertise that will enable us to move ahead with the project. BHP’s investment reflects the project’s strong environmental and social governance credentials and its role in improving environmental performance throughout the nickel value chain.”

Meanwhile, BHP will also invest $10-million into green technology firm Lifezone to advance the roll-out of its patented hydrometallurgical (hydromet) technologies, which are more cost-efficient than smelting, have a significantly lower environmental impact, and will ensure that finished Class 1 battery grade nickel, copper and cobalt are produced in Tanzania

Showalter said that BHP’s funding support of Lifezone’s hydromet technology would drive progress towards a greener world.

“Through development of Kabanga and Lifezone hydromet, Tanzania will have a growing role in the supply of the battery metals needed to move to a global low carbon economy.”

The investment into Lifezone allows for new patent applications, as well as research and development work that will further commercialise the Lifezone hydrometallurgical technology. Lifezone currently has patents granted in over 150 countries.

The investment into the Kabanga nickel project will support an acceleration in the mine’s development, including an enhanced metallurgical drilling programme to enable update of the definitive feasibility study and support the construction plans for the hydromet refinery. These studies are expected to be completed by the end of 2022. Site and infrastructure development is already underway. The investment will also support hiring and training of local Tanzanian talent.

The current project development timeline anticipates first production in 2025. Output will ramp up to target a minimum yearly production of 40 000 t of nickel, 6 000 t of copper and 3 000 t of cobalt.

Mining Weekly Editor Martin Creamer discusses decarbonisation as an opportunity to create quality employment; South Africa's need to transition to clean energy without creating job losses and ghost towns in areas where fossil fuels provide the overwhelming economic support; and South Africa's appreciation of platinum fuel cells being recognised increasingly as the world’s only zero-emission answer to climate change.