Ground Breakers: Another day, another dire battery metals projection

The world could need 400 new mines to hit decarbonisation targets. Where’s Brian Lara when you need him?
Calidus and Tietto roll out numbers at slowly ramping gold ops
Miners tumble on bearish Chinese property news

Another day, another dire prediction about our prospects of finding enough green metals to fuel and foster the energy transition.

This one comes from McKinsey, via Bloomberg.

Those consultants see shortages of nickel amounting to 10-20% of demand by 2030 with dysprosium, one of the suite of heavy rare earths largely produced in China and used in lasers, data storage and as a neodymium substitute in NdFeB permanent magnets used in EV motors, could hit a 70% deficit.

How much more investment will we need in mines to make up these shortages?

McKinsey estimates some US$3-4t worth by 2030, 50% more per year than we saw in the last decade at a time of uncertain global economic footing and, for now at least, tepid commodity pricing.

All in all as many as 900 mines diggin’ metals like nickel, lithium, tin, copper and cobalt need to be in operation against ~500 today. Only Brian Lara has ever piled up 400 so fast.

But not doing so could let an extra 400-600Mt of greenhouse gases seep into the atmosphere. The question is who has the risk appetite to make it all happen?

More goldies fire up their reporting rounds

Tietto Minerals (ASX:TIE) shares rose 4% as the gold miner announced it had produced 15,592oz of gold at its new Abujar mine in Cote d’Ivoire, hitting commercial production in the June quarter.

It was around 64% up on the March quarter, with grades rising from 0.55g/t to 0.68g/t as the company shifted from mining shallow oxide ore to deeper fresh rock.

The mine is forecast to ramp up to 105,000-120,000oz at all in sustaining costs of between US$875-975/oz for the second half of 2023.

Mill throughput exceeded its 4Mtpa design rate through the month of June, though the mine’s ramp up has been delayed by slow pre-stripping, which had resulted in the use of stockpiled over high grade ore in its early days.

“We are pleased to have reached this milestone at Abujar in less than 18 months after commencing earthworks on the process plant and I thank all members of the team for their efforts in achieving this result,” Tietto MD Matt Wilcox said.

“Mining rates increased markedly during the quarter, and we anticipate delivering strong net cash flow over the second half as we optimise mining and milling after achieving commercial production during June.”

Tietto had previously expected to deliver 260,000oz over its first year of production and 200,000ozpa in its first six at Abujar.

The company has US$24m ($36.2m) in cash and bullion in the bank.

Out of West Africa and back to WA, Calidus Resources (ASX:CAI) was unchanged as it announced it had met its six-month guidance for the Warrawoona mine in the Pilbara.

Calidus turned out 31,364oz, just hitting the lower end of its 31,000-36,000oz guidance range for the second half of FY23.

“June production of 5,745 ounces was a record at Warrawoona and continues the trend of steadily increasing production on both a monthly and quarterly basis,” the ~$85m gold producer said.

“This sets an excellent platform for continued growth through higher-grade pits and undergrounds.”

Its costs are expected to fall within the previously guided $2000-2250/oz range.

Tietto Minerals (ASX:TIE) and Calidus Resources (ASX:CAI) share prices today:

China property woes send miners tumbling

The materials sector was in a world of pain this morning, down 1.38% with bellwether BHP (ASX:BHP) off 2.31% and lithium stocks falling as Chinese property developers sent shudders through the market.

It came despite higher Singapore futures, currently up 0.5% to over US$110/t as developer Shimao Holdings failed to find a buyer for a Shenzhen project at a heavily discounted price, Westpac economists said.

– China steel/property sector woes returning?
1. CISA "peak inflection point for steel demand" warning
2. Tangshan curbs steel prodn 30-50% in July.
3. Vanke warns "real situation a bit worse"
4. Shimao holdings forced land auction fails
5. Sino-Ocean bonds tumble on debt workout pic.twitter.com/VgnPRUHrdR

— Robert Rennie (@Robert__Rennie) July 5, 2023

In the very small winner’s circle today though was Bellevue Gold (ASX:BGL), up 1.96% after announcing yesterday it had a pathway to early cashflows at its gold mine of the same name in WA’s northern Goldfields.

And BGL MD and former Northern Star (ASX:NST) executive Darren Stralow will link up with former Northern Star and Saracen boss Raleigh Finlayson to do so.

Having recently acquired the Gwalia gold mine from St Barbara (ASX:SBM), Finlayson’s Genesis Minerals (ASX:GMD) will use the underfed mill to process around 100,000t of dirt grading 3g/t from Bellevue’s Vanguard open pit.

It will come ahead of the commissioning of Bellevue’s own plant onsite in the December quarter.