To bypass China, Western companies are investing in facilities to process battery metals in countries such as Tanzania, Mauritius and South Africa.

Pressure to create supply chains for electric-vehicle batteries that bypass China is prompting Western miners to do something they have long avoided: process their metals in Africa.

China dominates both the production and processing of critical minerals such as cobalt and lithium that are key to the energy transition. That has led to growing concerns among Western governments, including in Washington, about their dependence on Beijing.

Now, some Western companies and investors are starting to build processing plants in Africa so they can refine the raw materials they mine on the continent locally and export them directly to Europe and the U.S.

The investments show how Western executives have become more willing to swallow the risks associated with many African countries, including poor infrastructure, limited skilled labor and, in some places, a reputation for government corruption. By building processing facilities, companies are also meeting demands from African governments that have long called for more local processing for metals and minerals extracted from their soil.

Western companies are starting to build processing plants in Africa to refine the raw materials they mine on the continent locally and export them directly to Europe and the U.S., because of growing concerns among Western governments about their dependence on Beijing.

BHP Group has invested $100 million in a nickel mine in Tanzania along with Lifezone Metals, with plans to build a processing plant to refine the metal in the country.

Investments in processing facilities in Africa are likely to rise given the expected boom in demand for battery metals.

Vision Blue Resources, a London-based $650 million fund, is investing in a new graphite mine in Madagascar and a related processing facility in nearby Mauritius. It is also backing a cobalt refinery in Zambia that it says will be the world’s third largest and the biggest outside of China.

Despite growing interest from investors, huge challenges remain for companies that want to do business in Africa. For example, Zimbabwe banned the export of raw lithium in December, effectively forcing foreign companies to process it there, and Chinese competitors still have the upper hand. Many Westerners say the opportunity now outweighs the risks of doing business in Africa. ReElement Technologies is building a processing facility in South Africa to refine lithium mined in South Africa to battery grade.

Boris Kamstra, chief operating officer at Premium Nickel Resources Ltd, said people are now looking for non-Chinese sources of battery metals.

Source: The Wall Street Journal

Under pressure to distance themselves from gold originating from Russia, jewellers are making advances in traceability and transparency. We unpack how.

Gold mining has come under increased scrutiny for its links to mercury pollution and human rights abuses, prompting a move towards sourcing more traceable, fair-mined gold. A warning in March from the Global Gold Transparency Initiative that brands must ensure they have a full and accurate view of their gold supply chains – or risk unwittingly funding Russia’s war on Ukraine – sped that up further.

Several jewellery houses, from independent designers such as the UK’s Stephen Webster and Brazilian-born Fernando Jorge, to big international names such as Messika and Bulgari, are transitioning to 100 per cent traceable gold. A new industry standard called Single Mine Origin (SMO), which first launched in 2018, is gaining traction, and responsibly sourced recycled gold is another potential solution. But there are still challenges to overcome in the rush for transparency, including cost and distribution.

Gold is notoriously difficult to trace. According to the World Gold Council, an average of 2,500-3,000 tonnes of gold are produced annually and shipped to refineries, where they are transformed into gold bars. However, since gold is indestructible and infinitely recyclable, refineries usually mix freshly mined gold with some of the metal that has been mined since the beginning of time. With around 200,000 tonnes of it in circulation, it is near-impossible to determine its origins. Russia is the second-largest producer of gold globally, after China.

The Alliance for Responsible Mining and Fairtrade International both run schemes to help brands source gold that can be traced from mine to finished jewellery, and guarantee that the gold has been produced in a way that protects the people who mined it. Through these, brands can individually establish close links to small-scale and artisanal mines. For example, in 2013, Chopard began sourcing directly from artisanal and small-scale miners in Peru, Bolivia and Colombia, under the Alliance for Responsible Mining’s scheme.

However fair-mined and fairtrade gold comes with a premium price tag — about $4 more per gram than standard gold, according to Fairmined, an initiative that connects certified responsible mines with gold buyers. “We’ve taken a cut on our margins to be able to ensure that all of our production is fair-mined and it’s been challenging, but it is possible,” says Nigora Tokhtabayeva, founder of US-based fine jewellery brand Tabayer, which launched in 2019. Lower margins have “huge implications” in a business in which raw materials are expensive and the gold price fluctuates as it means the brand has less leverage to hedge for changes in the price of gold. However, she is committed to fair-mined gold, noting that customers and retailers increasingly ask about sourcing policies.

Brothers Charlie and Dan Betts — whose family has been in the gold refining business since the 1700s — believe that real change will only happen by connecting the jewellery industry with medium and large-scale gold mines. In 2018, they created the SMO kitemark, which is applied to gold that has been produced by a legitimate mining operation that holds no ties to conflict, and where miners are being paid a just wage.

SMO operates chain-of-custody protocols on two large-scale mines in Mali and Ivory Coast. A third mine in Guinea is under construction and is expected to start producing SMO gold by mid-2023. Upon arriving at a partner refinery in Switzerland in segregated batches accompanied by documents, SMO gold is refined separately from other gold bars. Independent auditors have been appointed to monitor the process. Jewellery made with SMO is traceable using a QR code. Boodles was one of the first to switch to SMO gold in 2018, and other jewellers such as Garrard, Emefa Cole and Shaun Leane have followed suit.

The brothers claim SMO offers traceability without the premium prices of fair-mined and fairtrade schemes. “The two African mines produce more than 300,000 ounces of gold per year between them, and thanks to the volume and economy of scale there is no need to charge a premium,” says Charlie Betts, “plus, the programme is scalable and can be applied to other mines.”

Jewellery brands are also exploring the opportunities in recycled gold, which can be a responsible choice when the source is known. Recycled gold has been boosted by recent government scrutiny of electronic waste: a UN report published in 2020 valued the recyclable metals such as gold and copper trapped in electronic waste at $57 billion. Earlier this year, the British Royal Mint, a purveyor of coins, medals and gold for investment since the ninth century, launched a jewellery brand called 886 (the year the British Royal Mint was established) made out of reclaimed metals and gold mined in electronics. Chopard recycles gold at its own foundry, while online retailer Finematter offers clients vouchers in exchange for recycling unwanted gold jewellery. Alexander Thiel, a partner at management consultancy McKinsey & Co in Zurich, says that while knowing the origins of materials is important, “consumers, at the moment, are placing more value in recycled materials and circular models.”

Another solution to the transparency challenge in gold sourcing is blockchain technology. Industry body the Responsible Jewellery Council trains jewellers in implementing a chain of custody. Every sourced material needs to be segregated and accompanied by documentation as it moves across the supply chain, and a third party must supervise every stage. The council says blockchain technology can be used to support the process.

In March, the London Bullion Market Association and the World Gold Council announced that they would be working together on a blockchain-backed digital system to track gold across the supply chain from the mine until it is set in jewellery. Similar technology was successfully implemented by De Beers in 2018 with Tracr, a proprietary tool that uses blockchain and artificial intelligence to follow diamonds higher than one carat in the rough from the mine until it reaches the client.

World Gold Council CEO David Tait said its blockchain project was the “first step towards a more aligned gold industry, where we work together to ensure a more accessible and transparent market”.

Source: Vogue Business

The discovery of a gigantic deposit of lithium had raised hopes for the sleepy town of Manono in the southeast of the Democratic Republic of the Congo after a tin boom went bust years earlier.

Australia-based AVZ Minerals announced in 2019 that the Manono lithium-tin project in the DRC probably had the world’s largest untapped lithium deposit, with estimates of 400 million tonnes of lithium ore.

Lithium is essential in making rechargeable batteries for phones and electric vehicles, and is in high demand as countries around the world make the shift to green energy.

The stakes are huge and the rewards are great. But infighting and legal battles among shareholders for control of the Manono site is putting the project on hold.

The main fight pits AVZ against Chinese mining giant Zijin Mining in a case in the International Chamber of Commerce (ICC) International Court of Arbitration.

Zijin claims that through its DRC subsidiary Jin Cheng Mining it bought a 15 per cent stake in Dathcom, a joint venture established in 2016 that owns 100 per cent of the Manono lithium mine.

Zijin says it bought the stake from Cominiere, the DRC’s state-owned mining company, which had 25 per cent of Dathcom under a 2017 deal.

As part of the deal, AVZ had a 60 per cent equity stake, while Dathomir Mining Resources (Dathomir) had the remaining 15 per cent.

Zijin said Cominiere agreed to transfer a 15 per cent interest in Dathcom to Jin Cheng, and the two companies set up a joint venture, Katamba Mining, to explore and develop two greenfield projects at the periphery of the Manono mine.

“Zijin Mining’s purchase price for its 15 per cent stake in the Manono project was at fair market value and includes other provisions that benefit the local community and the DRC,” Sun Kuiyuan, Zijin’s in-house legal counsel, said.

“The sale was subsequently approved at a Dathcom extraordinary general meeting, and lawfully registered at the RCCM [Registre du Commerce et du Crédit Mobilier].”

But AVZ disputes suggestions that Cominiere transferred 15 per cent to Zijin, saying they are “spurious in nature, without merit, containing fundamental and material errors, and having no substance or foundation in fact or law”.

The Australian company says such a transfer would have ignored its right to buy the stake.

“Any such transfer would be subject to the terms and conditions of the existing articles of association of Dathcom as well as the Dathcom shareholders agreement,” AVZ said in its 2022 annual report released on October 17.

“AVZ confirms that Cominière breached the pre-emptive rights of AVZI under the shareholders agreement by purporting to transfer a 15 per cent interest to Jin Cheng, making it invalid and of no force or effect.”

AVZ said it continued to “take all necessary action to resist these vexatious and meritless claims and to protect its and Dathcom’s interests”.

Lithium is essential in making rechargeable batteries for electric vehicles. Photo: AFP

Zijin reportedly paid US$33.4 million for the Cominière share, well above AVZ’s counter-offer of US$15 million.

In a letter dated July 21, 2021, Cominiere director general Athanase Mwamba Misao wrote to AVZ telling it Zijin had expressed interest in acquiring at least 15 per cent of the share capital.

“Having received the green light from the board of directors and the general assembly of Cominiere shareholders to start negotiations with this group, we held a meeting with Zijin on July 14, 2021, during which Zijin expressed its willingness to enter the capital of our joint venture with at least 15 per cent of the share capital,” the letter said.

AVZ replied a few weeks later, opposing the move to sell shares to an outsider and saying it was interested in buying the stake.

“AVZ Minerals hereby notifies you of its willingness to receive the benefit of the right of first refusal, which according to our statutes requires that the shares be first offered and then sold to the shareholders, but this is also in accordance with the agreements between the parties in the Joint Venture agreement of 2017,” AVZ said in its letter to Cominiere.

It warned that any transaction on the sale of shares between shareholders who have discussions outside the company violated corporate governance, the joint venture agreement and the statutes of the company.

These issues are now before the ICC International Court of Arbitration, which is expected to start hearing the case next year.

Another issue is the claim that AVZ acquired a 15 per cent stake from Dathomir, increasing its shareholding to 75 per cent.

However, Dathomir has denied it sold its shares, saying in court documents that although it initially agreed to sell a 5 per cent stake and later another 10 per cent stake, AVZ failed to pay the agreed amounts in time.

Dathomir, owned by a long-time Chinese investor in the country Cong Maohuai, sued in the Congo courts to annul the deal and won.

And in September, the Commercial Court of Lubumbashi suspended the deal, stopping AVZ from buying the shares.

“The transfer of the shares, which were the subject of the sale, to the benefit of the purchaser AVZ International Ltd could only take place after payment in full of the agreed sums; this was not the case for the plaintiff,” Dathomir argued in court.

The Commercial Court of Lubumbashi “ordered the suspension of the payment of the balances of the prices of US$15,000,000 and US$5,000,000 in the two contracts of sale of shares of 5 per cent and 10 per cent that have occurred between the claimant and the first defendant, AVZ International Ltd, while waiting for the arbitration judge to decide on the merits of the case”.

However, AVZ insists it has a 75 per cent stake in Dathcom after acquiring the 15 per cent shareholding from Dathomir.

“AVZI duly completed each of the Dathomir sale and purchase agreements in August 2021, including payment within the required period, and thereby legally acquired a further 15 per cent interest in Dathcom,” it said in its response to the court’s decision.

It said it considered the court’s decision immaterial. “AVZ confirms that it retains legal title to a 75 per cent interest in the Manono project and its pre-emptive rights over the balance of the project.”

AVZ shares remain suspended from trading pending the completion of the sale of its 24 per cent stake in Manono to Chinese battery maker Suzhou CATH Energy Technologies (CATH) for US$240 million.

If the sale goes through and AVZ does not have Dathomir’s 15 per cent share, AVZ’s stake will be reduced to 36 per cent.

While AVZ is based in Australia, its top shareholders, including Yibin Tianyi Lithium Industry, CATH, and Huayou International Mining, are Chinese. Observers say this could mean that the fight for the control of the Manono lithium site is among Chinese mining giants.

Source: South China Morning Post

When the oil market liberalized in the 1970s, a group of commodity trading buccaneers led by the infamous Marc Rich made fortunes by connecting buyers and sellers and surfing the price swings of this newly tradable commodity. Half a century later, some of Rich’s spiritual descendants are hoping to pull off a similar trick in lithium. 

A vital component in most electric-vehicle batteries, lithium is becoming one of the world’s most important commodities. Prices have soared to unprecedented levels as demand forecasts keep growing, leaving automakers scrambling to secure future supplies.

Yet until fairly recently, it’s been almost impossible to trade. Prices would be fixed in long-term private contracts between the handful of dominant suppliers and their customers, with no need for middlemen. Now, the surging demand is shaking up the way that lithium is bought and sold: Many supply deals have become dramatically shorter — with floating prices linked to the spot market — while exchanges from Chicago to Singapore are experimenting with new futures contracts.

Lithium Prices Skyrocket

Surging prices for the battery material are piling pressure on car-makers

And it’s getting the traders’ attention. Companies like Trafigura Group and Glencore Plc that make money moving commodities from copper to crude and coal around the world, are starting to wade into the lithium market. Traders say they can help the market broaden and mature, and reduce risks for other players in the supply chain. Some, like Trafigura and Carlyle-backed Traxys SA, are also investing in new production sources.

“The activity of traders in the lithium market should make this a more transparent and efficient market over time,” said Martim Facada, a lithium trader at Traxys. “It’s like oil in the 70s when governments would sell to consumers but then traders started providing services and that helped growing and developing the market faster. Lithium’s starting to go through that process.”

Of course, the comparison with oil 50 years ago isn’t a perfect one. The lithium market is tiny compared with more established and liquid commodity markets — annual world oil production is worth more than $3 trillion at current prices, versus $30 billion for lithium. The metal is also refined into highly specialized chemicals that some experts argue are much less fungible. 

Lithium Is a Small But Rapidly Growing Market

The approximate value of annual mined lithium production is dwarfed by copper

One of the concerns in the lithium market is that the extreme supply shortages create a risk that prices rise so high, or metal becomes so difficult to access, that automakers have to stop buying.

Commodity traders have a long history of squeezes and shocks in commodity markets, and the high stakes in lithium — so crucial to the success of the world’s decarbonization efforts — could leave them open to criticism. But despite the industry’s swashbuckling reputation, the traders insist they are treading carefully and are focused on helping to alleviate shortages, not make them worse. 

“If a trader is to get involved, it needs to be done with an entirely different approach,” said Socrates Economou, Trafigura’s head of nickel and cobalt trading, who also oversees lithium. “You already have a price that can lead to demand destruction — if you’re going to have market participants driving the price higher, I don’t see how this market can sustain itself.”

Trafigura estimates demand will hit 800,000 tons of lithium carbonate equivalent this year — overshooting supply by 140,000 tons — and sees demand rising by a further 200,000 to 250,000 tons annually through 2025.

Mining Investment Lags in the EV Revolution

And while the world needs more and more lithium, investment in new supply has not kept pace with rising demand. Trafigura’s focus so far has been on tying up deals with early stage mining and refining projects. Traxys, another early mover into the industry,  is taking a similar approach, scouring the globe for new sources of supply and helping to nudge them into production. The aim is to make money increasing the overall flow to car-makers, said Facada.

Other traders are also looking at lithium. Glencore, which is the largest producer of another key battery metal, cobalt, has invested in recycling startup Li-Cycle Holdings Corp. and is thinking about starting to trade lithium produced by the company, as well as third-party material. 

Traders IXM, Transamine SA and Mercuria Energy Group Ltd. have all set up lithium trading books in recent years, while Japan’s Mitsui & Co. has long been active in the sector.

The traders are stepping into the lithium market at a time of dramatic transformation. For years, the main customers for lithium producers were largely niche manufacturers in sectors like pharmaceuticals and industrial lubricants. Now, as carmakers have taken over as the biggest buyers, miners have been shifting towards a shorter-term pricing model that better reflects the mismatch between demand and supply. It’s a trend that’s drawn comparison to a seismic overhaul in the iron ore market as producers shifted to spot pricing in the 2000s, but it’s placing a strain on consumers and producers alike.

Tesla Inc. CEO Elon Musk has said that spot prices have become “crazy expensive,” and after years of urging producers to supply more, he’s stepping up efforts to refine it himself. Meanwhile, investors are pressuring top miners like Albemarle Corp. to shift their contracts over spot pricing more aggressively, potentially adding to the strain on their customers as the buying frenzy continues.

It will probably take some time before lithium matures to become more of a tradable commodity market, said Kent Masters, chief executive of Albemarle, the world’s largest lithium producer. With the spot market growing, the next key milestone for the industry will be the development of liquid futures contracts.

“We do think ultimately there’ll be an instrument out there where you can hedge lithium prices or speculate on the market financially,” he said in an interview. “It’s a good thing once it matures. But it’s going to take some time — it’s not today.”

In addition to helping make markets more efficient, traders say they can also manage risks for automakers and battery producers that are starting to look at mining projects and investments in a way that would have been unthinkable for many just a few years ago, as supply fears begin to rise. That will take them into riskier jurisdictions than they’re used to operating in, and leave them exposed to cost blowouts and wild price swings that are common to the mining industry.

“One of the roles we play is to connect different levels of supply chain to provide some level of price protection,” said Claire Blanchelande, Trafigura’s head lithium trader. “In addition to banks getting involved, car-makers are also getting comfortable because of our involvement.” 

Source: Bloomberg

The global demand for lithium is reaching new heights.

The lithium market has witnessed numerous price increases throughout the year. Additionally, the production of lithium, like other raw materials, is failing to keep up with demand. In fact, demand for lithium has been skyrocketing in recent years, in large part as the result of the ever-expanding electric vehicle (EVs) market.

According to Platts Analytics, global plug-in light-duty EV sales are expected to rise to 6.5 million units in 2022 and 10.5 million units in 2025, up from an estimated 6 million units in 2021 and 3.1 million units in 2020.

Lithium-ion batteries are being rapidly adopted due to their compact size, rechargeability, recyclability and high-density energy output. Infinity Stone Ventures Corp. (OTC: GEMSF) (CSE: GEMS), BrightRock Gold Corp. (OTC: BRGC), Patriot Battery Metals Inc. (OTC: PMETF), Standard Lithium Ltd. (NYSE: SLI), Snow Lake Resources Ltd. (NASDAQ: LITM)

While the EV industry remains in its infancy even as battery technology advances, demand for lithium in the sector is only expected to accelerate.

William Tokash, Senior Research Analyst with Navigant Research, said:

The push by automotive original equipment manufacturers (OEMs) and battery manufacturers to continually reduce battery pack costs continues.

And, the Global Lithium Market size was estimated at USD 5.5 Billion in 2021 and expected to reach USD 9.8 Billion in 2026, at a Compound Annual Growth Rate (CAGR) 11.93%, according to ResearchAndMarkets.

Infinity Stone Ventures Corp. (OTCQB: GEMSF) (CSE: GEMS) announced earlier this month breaking news, “that it has entered into an option agreement to acquire an additional 1,336 hectares directly adjacent to the Company’s Hellcat Project (the “New Claim Block”), which is part of Infinity Stone’s larger Camaro Project, near Patriot Battery Metals (“PMET” or “Patriot”) Corvette Lithium Discovery in the James Bay Region of Quebec.

The block is contiguous with the northwestern boundary of Infinity Stone’s Hellcat Project. The newly acquired area hosts an additional five pegmatite occurrences, with an additional 11 appearing in the southeastern Hellcat Project.

The fall exploration program, conducted by Axiom Exploration Group, Infinity Stone’s contracted technical team, (the “Fall Program”) was extremely successful in confirming historically mapped pegmatites and identified new showings.

87 samples were collected over 3850 hectares of claims adjacent to the Patriot discovery. The samples have been shipped to Saskatchewan Research Council (“SRC”) lab in Saskatoon, Sask., with assay results expected to be returned in the coming weeks.

One of the significant highlights of the Fall Program was the identification of a cluster of highly prospective pegmatitic dykes and cross cutting structures near the northern margin of the Hellcat claims extending to the north, into the newly acquired claim area.

The white, coarse grained, pegmatite dykes in this area were mineralogically characterized by tourmaline, garnet, and muscovite which are common LCT (Lithium-Cesium-Tantalum) pegmatite indicator minerals in the district.

The New Claim Block is underlain by 9 km of strike length of underexplored greenstone and metasediments of the Mesoarchean Rouget formation and Neoarchean Marbot formation respectively.

The under-explored Rouget formation greenstone belt represents an attractive exploration target which is geologically similar and proximal to the Guyer Group greenstone which hosts the PMET Corvette Pegmatites.

Zayn Kalyan, CEO of Infinity Stone, said:

Following our recent Fall Program, we moved quickly to expand our footprint and focus on the most prospective areas of the Camaro Project in James Bay.

“The identification of tourmaline, garnet, and muscovite, in pegmatites on the expanded Hellcat have given us an area of considerable interest and will be critical to our exploration program moving forward,” furthered Mr. Kalyan…

Qualified Person – Technical information in this news release has been reviewed and approved by Case Lewis, P.Geo., a “Qualified Person” as defined under NI 43-101 Standards of Disclosure for Mineral Projects and a director of the Company.

BrightRock Gold Corp. (OTC: BRGC) announced on August 29^th, that the team at Red Beryl Mining Company continues their work on an extensive mapping program of the completed 1400 acre expansion. BrightRock is excited to announce that the team has discovered a second mine with a possible substantial lithium deposit.

The Lone Giant Prospect approximately 0.38 miles from the recent P. and G. Beryl discovery. BRGC CEO Mac J. Shahsavar, P. Eng. Commented “Steven Cyros has been commissioned to do an on ground inspection and a live video at both the P. and G Beryl and Lone Giant Prospect.

BrightRock Gold will release the Inspection Video shortly for our investors’ viewing. We continue to establish ourselves as a major contender in the lithium space. With the recent 1400 acre expansion, discovery of two additional historic mines, we are developing a portfolio of lithium-rich assets to become a major supplier of lithium based products.”

Patriot Battery Metals Inc. (OTCQB: PMETF) announced on October 12^th, core assay results for twelve (12) additional drill holes (CV22-040, 041, 045, 047 through 054, and 056) from its 2022 drill campaign at its wholly owned Corvette Property (the “Property”), located in the James Bay Region of Quebec.

The primary drill area is focused at the CV5 Pegmatite, located approximately 13.5 km south of the regional and all-weather Trans-Taiga Road and powerline infrastructure with two drills currently coring. A third drill rig has been active at the CV13 pegmatite cluster for initial drill testing since early September.

Standard Lithium Ltd. (NYSE: SLI) provided an update on September 7th, on its first commercial lithium plant in Arkansas.

Dr. Andy Robinson, President and COO of Standard Lithium commented:

The award of this FEED study marks a significant milestone for Standard Lithium as it moves the Company and all our project partners closer to commercialization.

“Our internal project team went through a rigorous competitive selection process, and we are delighted to work with OPD and its partners in KES and M3 Engineering to design our first commercial facility and move towards an EPC contract and then to construction.”

“The selection process and study award are further examples of Standard Lithium’s commitment to disciplined and responsible project development. Commercial discussions with Lanxess that will support the construction and operation of the first commercial plant are ongoing, as are all supporting studies such as permitting, geotechnical investigations and engineering integration with Lanxess’ existing infrastructure.”

Snow Lake Resources Ltd. (NASDAQ: LITM) announced on October 4^th, hosted LG Energy Solution in Manitoba, Canada on September 13th to explore the potential next step towards building a domestic supply chain for the North American electric vehicle market. 

Cliff Cullen, Manitoba’s Deputy Premier commented:

Companies such as LG Energy Solution and Snow Lake Lithium are leading the exploration and development of critical minerals that will be key to helping the world pursue the goal of decarbonisation.

Philip Gross, CEO Snow Lake Lithium said:

The visit was a great success and there is an exceptional opportunity here in Manitoba to establish a strong domestic supply chain for the US automobile industry.

“Following our exciting collaboration with world-leading LG Energy Solution we are confident that our rock to road battery supply chain will help the electric vehicle market in North America.”

Source: Batteries News

Shortly before arriving at the Paris Motor Show on Monday, French President Emmanuel Macron told the financial daily Les Echos that his administration wanted to make electric vehicles “accessible to everyone”.

Macron then proceeded to announce a series of measures to enable households to acquire electric vehicles. With the EU seeking to ban the sale of combustion engine vehicles from 2035, France is trying to gradually phase out fossil-fuel cars. While the move is seen as an essential step on the road to energy transition, it also poses a serious problem: it will require massive quantities of metals needed to manufacture batteries, especially lithium.

The figures speak for themselves. Since 2015, production volumes of lithium – also known as “white gold” – have tripled worldwide, reaching 100,000 tonnes per year by 2021, according to the International Energy Agency. The volumes could increase sevenfold by 2030. At the European level, about 35 times more lithium will be needed in 2050 than today, according to an April study by KU Leuven, a Catholic research university in Belgium.

“We are at a stage where all countries are starting their energy transition more or less at the same time and this generates very significant metal needs,” noted Olivier Vidal, a geologist and director of research at the French National Centre for Scientific Research (CNRS). “This will certainly create tensions in the coming years, with expected increases in costs and, possibly, supply difficulties. So, there is a real strategic and sovereignty issue for states.”

The European Commission is well aware of these concerns and included lithium in the list of critical raw materials with a risk of shortage, back in 2020. Lithium “will soon be even more important than oil and gas”, said European Commission chief Ursula von der Leyen in September 2022.

Extraction projects in their infancy

Lithium production today is dominated by just a handful of countries: Australia, which has 20% of the world’s reserves of “white gold”, and Argentina, Chile and Bolivia, which have 60%. China, on the other hand, was an early investor in refining and controls 17% of the world’s lithium production. With just five countries controlling 90% of world production, the International Energy Agency calls it a “quasi-monopoly” situation.

Europe hopes to make the most of the new “white gold” rush by exploiting its own subsoil. The continent’s main reserves are in Portugal, Germany, Austria and Finland. In France, the French Geological and Mining Research Bureau (BRGM) drew up an inventory in 2018 highlighting reserves in Alsace, the Massif Central region, as well as in the Armorican Massif area in Brittany.

Europe’s lithium extraction and production projects have been mostly undertaken by small and medium-scale companies across the continent. “The most successful ones are in Finland. Lithium production could start in 2024 thanks to the exploitation of a small mining site located about 600 km north of Helsinki,” explained Christian Hocquard, a geologist-economist and co-author of a book on lithium energy transition. “In the Czech Republic, an Australian company, European Metals, wants to exploit old tin mines located north of Prague. There are similar projects in Germany and Austria,” he noted.

“These are generally minor projects, carried out by small companies. The big ones prefer to invest in Australia or Latin America,” explained Hocquard. “Few of them will see the light of day, blocked by the difficulties of obtaining permits but above all due to resistance from local communities,” he predicted.

Facing the environmental consequences of our consumption

Mining projects often faced public discontent. In Portugal, an open-pit mine – the largest in Western Europe – was supposed to be built in 2026 in the village of Covas do Barroso. Work has however been currently suspended following numerous protests. In Serbia, the opening of the Jedar mine was cancelled a few months before the January 2022 presidential election. In France, Barbara Pompili, former ecological transition minister, floated the idea of exploiting lithium in the tiny village of Tréguennec, in Brittany’s Finistère region back in February 2021. The area however is classified as a protected zone and sparked a local outcry.

Lithium extraction “produces considerable volumes of waste that must then be stored. The waste can also lead to water or air pollution,” explained Vidal.

While Vidal views the outcry as “completely understandable”, he nevertheless supports these projects. “It would be much more ethical. We consume lithium daily, it would be normal for us to suffer the impacts related to our use. Today, this pollution already exists, but in other countries, far from our eyes. This would raise awareness among users, who would be confronted with the impacts of their consumption,” he said.

France looks to ‘green lithium’

France, for its part, is studying an alternative, called the extraction of “green lithium”. Unlike extractions from rocks or salt deserts, which function like traditional mines, “green lithium” is produced from geothermal sources, with an extraction method similar to that of a well. In France’s Alsace region, the European project EuGeLi (for European Geothermal Lithium) is a pioneer in this field. It recently succeeded in extracting its first kilograms of lithium using this technique. “For the time being, however, the technique remains too expensive to be considered on an industrial level,” noted Hocquard.

The other alternative is to focus on refining lithium rather than mining it. A project was announced in Germany in early June and the Strasbourg-based company Viridian Lithium plans to open the first French lithium factory for batteries there by the end of 2025. It will source ores from Latin America and aims to produce 100,000 tons of lithium hydroxide by 2030. “This would not solve the issue of dependence, but it would create know-how and jobs,” said Vidal.

From an ecological perspective, this would also have a major advantage. At present, lithium is almost systematically transited through China to be refined. The EU now plans to open three “gigafactories” for battery production.

Focusing on battery recycling

Vidal warns that even if all these projects come to fruition, they would still not be able to compete with the salt deserts of South America or with Australian production. “On the other hand, where the European Union could really make its mark in the coming years is in battery recycling,” he noted.

“Currently, the quantities of metals to be recycled are still limited since lithium batteries did not exist ten years ago. But by 2035, we will have batteries for electric vehicles at the end of their life and therefore a stock that can be recycled,” he explained. According to the University of Leuven, 40% to 75% of the EU’s metal needs could be met through recycling by 2050. This would guarantee supply security as well as reduce the environmental impact.

“For that to happen, we have to act now,” said Vidal. “We need to design products that will be easily recyclable, at lower cost, to reassure investors.”

But most important, according to Vidal, is our consumption habits. “We need to think about our uses. Lithium is certainly used in car batteries, but also in many everyday gadgets,” he explained. “One of the levers is also to learn to move towards more material sobriety.”

Source: France24

The World Gold Council has a plan to make trading more liquid, starting with the $500 billion in gold bars beneath London. Critics say it’ll meet stiff resistance.

For Dubai Multi Commodities Centre (DMCC), its foundation was underpinned by gold.

Conceived to provide the physical and financial infrastructure required to create a hub for the global commodities trade, it wasn’t until Standard Bank London and Dubai Islamic Bank became the first to make gold Sharia-compliant by launching the first and only ground-breaking gold Sukuk, which raised $200 million, the proceeds of which were used to finance the construction of its first commercial towers, namely Gold, Silver and Almas.

With a foundational environment created, the Dubai Gold & Commodities Exchange (DGCX) debuted as one of its subsidiaries in 2005 and, with it, the region’s first commodity derivatives exchange.

With a formally established bourse that not only provided guaranteed settlements, reduced counter-party risk, fully transparent fee structures and access to regional and international liquidity pools, DMCC’s facilities and services – particularly its vault, which was developed in conjunction with Brink’s Global Services – helped to support not just the development of its futures market but that of the physical. Which today includes Sharia Gold, India Gold Quanto, Daily Gold and Physical Gold Futures & Spot Gold Contracts.

Having captured the physical market, DMCC’s next focus is on possibilities for bullion in the digital space.

Research to refining

As a single location that fully services the entire gold value chain, from research and refining to trading and investing, Dubai has risen to become responsible for roughly 25 per cent of global trade. However, this was only made possible, but creating and nurturing the right environment. In a similar way to how China, Indonesia and Uzbekistan remain the largest producers in Asia, with China and India being the largest consumers, it is Singapore and Hong Kong that remain the favored trading centres due to their zero rate tax for bullion and strong rule of law.

Similarly, other centres such as Luxembourg have also remained attractive and competitive by catering to the increasing demand for ESG products by offering Fair Trade bullion through its state savings bank. Akin to other Fair Trade products, BCEE guarantees that for each kilo of gold sold, in addition to the minimum fair wage guaranteed, Fair Trade receives a premium of $2,000, which is directly paid to the community of the Macdesa mine in Southern Peru, where the gold is mined.

As a lesson learned from the regulated economies of least resistance, hopefully the same philosophy will be applied to the UAE’s mint and coin industry, thereby attracting another branch of the gold industry to benefit from the country’s existing verticals.

An epicenter for gold

If I were to mention a second key policy advantage, it would be DMCC’s steadfast commitment to serving its stakeholders by remaining an impartial entity whose sole commitment is to its community and the greater long-term vision of Dubai and the UAE. Driven by its own decree, its duty to provide an optimal environment has led to Dubai becoming an epicenter for the global physical gold ecosystem, connecting mining supply sources from Africa and the former CIS countries with the major demand markets of Asia, Europe, and the US, in a globally centralized timezone that facilitates trading activities around the clock.

An additional practice that has dramatically served Dubai’s gold industry is that of collaboration, most recently illustrated through DGCX’s agreement with FinMet, who will not only bring their wealth of experience but support the rollout of new products and in an advisory capacity to onboard banks and new members seeking greater diversity with their product needs.

Bullion’s place in digital economy

It will be interesting to see how gold translates into the digital economy, in particular blockchain and crypto – with companies including Pax (PAXG) providing an asset-backed token where one token represents one fine troy ounce of a London Good Delivery gold bar, stored in professional vault facilities, perhaps more investors will consider this as an easier and safer way to invest.

Certainly, DMCC Crypto Centre will continue to monitor the market and be ready when opportunity, regulation and demand meet.

In a similar fashion to the development of Dubai’s wider gold industry, the release of our latest bullion coins are still in their infancy, particularly in comparison to the Krugerrand, which has been on the market since 1967 and is by far the world’s most popular 1 oz coin. However, as a store of value, which reflects the extraordinary progress made and forged using only fully-compliant 999.9 24-carat gold, I believe it is just a matter of time before history will repeat itself.

Source: Gulf News