Australian Mining https://www.australianmining.com.au Australia's home for mining industry news Fri, 20 Oct 2017 05:29:26 +0000 en-AU hourly 1 https://wordpress.org/?v=4.7.2 Peninsula divests South Africa uranium venture https://www.australianmining.com.au/news/peninsula-divests-south-safrica-uranium-venture/ https://www.australianmining.com.au/news/peninsula-divests-south-safrica-uranium-venture/#respond Fri, 20 Oct 2017 05:29:26 +0000 https://www.australianmining.com.au/?p=171697 Peninsula Energy, an Australian uranium mining company, has announced it is to divest its interest in the Karoo projects in South Africa. The company says it intends to divest so it can focus on its US Lance projects in Wyoming, which has the highest reserves of uranium in North America.

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Peninsula Energy, an Australian uranium mining company, has announced it is to divest its interest in the Karoo projects in South Africa. The company says it intends to divest so it can focus on its US Lance projects in Wyoming, which has the highest reserves of uranium in North America.

Peninsula’s South African uranium interests included the Rhyst Kuil, Kareepoort and Kwaggas Fontein mines. The company’s regional partners included Beaufort West, Lukisa, Tasman Mmakau and Tasman Pacific.

In a statement released by Peninsula managing director and chief executive officer Wayne Heili, he explains that “with the ongoing challenges in the uranium market, the longer term growth and value creation opportunities for the company are more likely to be centred on cost competitive uranium ISR (in-situ recovery) operations.”

“Peninsula recognises the importance of continuing to support its South African partners and stakeholders in the pursuit of regulatory permitting processes for the Karoo Projects during the divestment process.”

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Tawana completes funding for Bald Hill lithium mine https://www.australianmining.com.au/news/tawana-completes-funding-upcoming-bald-hill-lithium-mine/ https://www.australianmining.com.au/news/tawana-completes-funding-upcoming-bald-hill-lithium-mine/#respond Fri, 20 Oct 2017 00:38:21 +0000 https://www.australianmining.com.au/?p=171678 Up-and-coming Australian company Tawana Resources — one of the largest movers in capital growth according to Deloitte's WA Index top 100 list from Diggers & Dealers 2017 — has finalised funding for its Bald Hill lithium and tantalum prospect.

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Up-and-coming Australian company Tawana Resources — one of the largest movers in capital growth according to Deloitte’s WA Index top 100 list from Diggers & Dealers 2017 — has finalised funding for its Bald Hill lithium and tantalum prospect.

Tawana holds 50 per cent of lithium rights from the mine; a feasibility study conducted in July 2017 confirmed up to 1.2 million tonnes a year of lithium at the mine.

Due to commence early next year, with a tentative shipping target of first quarter 2018, Tawana today announced the Eastern Goldfields-located project will commence thanks to a $25 million equity and debt package with German company Weier Antriebe und Energietechnik GmbH, a subsidiary of Chinese lithium battery specialists Jiangte Special Electric Motor Co. (JSMC).

“We are exceptionally placed to benefit from the long-term demand dynamics for the lithium sector,” said Tawana managing director Mark Calderwood in reference to the recent boom in lithium-hungry electric vehicles.

“The raw materials required for Li-ion and other next-generation batteries have become a critical focus for the global automotive sector, who wish to secure these materials from high-quality, clean, reliable and low-risk supply chains.”

The $25 million fee is split between $20 million in equity investment and $5 million in loans. Tawana’s ambitious project is being supported by offtake partner Burwill Holdings (also Chinese); the company has improved the terms of its $12.5 million repayment request with Tawana from 20 per cent of each lithium concentrate shipment to 15 per cent, an increase to cash flow indicative of long-term faith in the project.

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The top risks facing mining in 2018 https://www.australianmining.com.au/features/top-risks-facing-mining-2018/ https://www.australianmining.com.au/features/top-risks-facing-mining-2018/#respond Fri, 20 Oct 2017 00:24:58 +0000 https://www.australianmining.com.au/?p=171681 Digital effectiveness has emerged as the number one risk for the mining and metals industry, according to Ernst & Young’s (EY) latest Top 10 business risks facing mining and metals report.

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Digital effectiveness has emerged as the number one risk for the mining and metals industry, according to Ernst & Young’s (EY) latest Top 10 business risks facing mining and metals report.

This trend has developed in the lead up to the 2017-18 report as companies strive to improve productivity by introducing new technologies.

With the sector increasingly investing in digital, EY explained that cyber risk has risen from ninth to third position in the ranking as the convergence of information technology and operational technology has made companies more vulnerable to rogue activity.

While most companies have started their digital journey, poor implementation of technology and a gap between progress and the scale of the opportunity leaves companies at risk of falling behind leading adopters.

Meanwhile, despite the unprecedented rise in cyberattacks year-on-year, the report indicates that the sector is yet to catch-up in cybersecurity awareness.

EY Global Mining & Metals advisory leader Paul Mitchell said the opportunity through digital was huge.

“But digital goes beyond just adopting new technologies: it is a critical enabler to address the sector’s most urgent operational challenge – improving productivity across the value chain,” Mitchell said.

“And as the sector increasingly moves toward digital transformation, the attack surface is also becoming larger and it is critical that mining and metals companies accelerate their cybersecurity program.”

New risks emerge

Cash optimisation fell from first to sixth position in this year’s ranking, in the wake of higher margins and improved cash generation.

The need to drive competitive shareholder returns, however, calls for companies to manage the competing demands of short-term capital allocation with longer-term investment in growth, according to the report.

While 2017 has seen companies reduce leverage and return cash to shareholders through dividends and share buyback programs, this is a short-term response to the underperformance of recent years, as return on capital employed has consistently fallen below the weighted average cost of capital.

Now that balance sheets have been restored and excess cash returned, the sector will begin to look for investment opportunities that drive long-term return on capital.

For those companies that fail to do so, the report points to increasing pressure from activist shareholders – even at the risk of takeover.

New world commodities become a risk

How quickly renewables will step up and replace the need for fossil fuels is the question hanging over the coal market, according to EY.

Future demand dynamics for coal are largely being driven by innovation associated with emission-reducing technology.

Scott Grimley, EY Oceania Mining and Metals leader, commented: “We have seen the volume of coal deals increase as miners, investors and vertically aligned energy companies make a bet on coal’s future through the acquisition of higher-grade coals in Australia.”

Meanwhile, increased requirements in battery power and storage for electric vehicles (EVs) has driven up the price of key commodities associated with making batteries.

While demand is expected to rise for cobalt and lithium, more traditional commodities, such as copper will also be required for electric cars in greater volumes than petroleum cars.

“Miners will need to adopt a level of flexibility in their business models to be agile to change and regularly review their portfolios, considering all future growth assets — new and old,” Grimley said.

Regulatory risk surges

Regulatory risk is a new entrant to the top 10, as governments demand a greater return from their natural resources in light of improving commodity prices and profits, while transparency initiatives continue to gain momentum.

Grimley said Australia was not immune to companies facing regulatory risks.

“We continue to see proposals to change royalty and tax regimes for projects where significant capital has previously been invested or committed to,” he said.

“A stronger collaboration between the three key stakeholder groups, being the Government, local communities and miners would assist to reduce this risk.”

Mitchell added: “This year’s business risks report clearly reflects the positive uptick in the market – volatility has eased-off in a number of commodities, and balance sheets are in a better position.

“It is now all about how companies stay ahead of the competition – gaining competitive advantage and being at the lower end of the cost curve is key. Managing the risks will assist mining and metals companies in achieving this.”

EY’s top 10 business risks in mining:

  1. Digital effectiveness (new)
  2. Competitive shareholder returns (new)
  3. Cyber (2016: 9)
  4. New world commodities (new)
  5. Regulatory risk (new)
  6. Cash optimisation (2016: 1)
  7. Social license to operate (2017: 7)
  8. Resource replacement (new)
  9. Access to and optimisation of energy (2016: 7)
  10. Managing joint ventures (2016: 8)

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Mining automation market to grow by 50% https://www.australianmining.com.au/news/mining-automation-market-grow-50/ https://www.australianmining.com.au/news/mining-automation-market-grow-50/#respond Fri, 20 Oct 2017 00:23:01 +0000 https://www.australianmining.com.au/?p=171675 The global mining automation market is expected to grow in value by almost 50 per cent by 2023, according to a report.

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The global mining automation market is forecast to grow in value by almost 50 per cent by 2023, according to a report.

Australia and the Asia-Pacific (APAC) region will guide this global expansion, with the Markets and Markets analysis forecasting growth in value from $US2.22 billion in 2017 to $US3.29 billion by 2023.

APAC is estimated to be the largest market for mining equipment and implementation of mining automation technologies globally, Markets and Markets said.

“The reason for this trend is the increased use of automated mining equipment by leading exploration and mining companies such as Rio Tinto, Fortescue Metals Group and BHP Billiton,” the US-based analysis said.

“These mining companies have started using automated mining equipment in their mine sites in the western region of Australia.

“Moreover, the increasing digitisation of mines and globalisation of economies have attracted significant investments from the mining companies all over the world.

“Key factors such as the increasing need for worker safety, the growing requirement improvement in mining productivity, and the reduction in operating costs are driving the mining automation market growth.”

The report added that a restraint for the mining automaton market would be the depletion of natural resources and the reduction in grades at mine sites.

It said mining equipment manufacturers, such as Caterpillar, Atlas Copco, Sandvik and Komatsu, were focusing on product launches and developments, acquisitions, and collaborations strategies to enhance their product and service offerings and expand their business.

“Top companies are adopting an organic approach toward improving their position in the mining automation market, by either improving their existing product portfolio or by adding new offerings,” Markets and Markets commented.

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Malcolm Broomhead made BHP sustainability chairman https://www.australianmining.com.au/news/malcolm-broomhead-made-bhp-sustainability-chairman/ https://www.australianmining.com.au/news/malcolm-broomhead-made-bhp-sustainability-chairman/#respond Thu, 19 Oct 2017 23:00:16 +0000 https://www.australianmining.com.au/?p=171611 Ex-Orica CEO (currently board chairman) and BHP non-executive director Malcolm Broomhead has stepped in to replace Malcolm Brinded as chairman of the company's sustainability committee.

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Ex-Orica CEO (currently board chairman) and BHP non-executive director Malcolm Broomhead has stepped in to replace Malcolm Brinded as chairman of the company’s sustainability committee.

Brinded left BHP in August due to ongoing allegations of corruption related to his previous role as a board director at Shell; he had been with BHP since 2014. Brinded is due to face trial in coming weeks regarding bribery allegations related to a 2011 oil purchase agreement in Nigeria.

Broomhead has served in his non-executive director role since 2010, and comes from a long corporate background. He served as managing director and chief executive officer of explosives company Orica from 2001 to 2005, and has been a chairman of the company since 2016.

He has also held various executive positions with companies such as North, Coates Group Holdings and Asciano Finance Trust.

Broomhead had previously been considered to replace outgoing chairman Jacques Nasser, but this role instead went to Canadian-born Ken MacKenzie, who spoke at his first annual general meeting (AGM) meeting with the company in London yesterday.

BHP confirmed they will not be releasing a statement from Broomhead but the new sustainability chairman will speak at the upcoming BHP Billiton Ltd AGM — not to be confused with the above-mentioned BHP Billiton Plc AGM— in Melbourne in November.

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