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AMERICA Mining considered essential to US Covid-19 response 20 Cambodia Government calls for new mining exploration bids 41 Stronger Chinese steel output seen backing iron ore prices in Q2 10 Coming up on the Mining Agenda 19 NMDC Reduces Iron Ore Prices For April Amid Weak Demand 6 Greenland waives miners' 2020 licence fees 46 Polyus to initiate covid-19 response fund in Russia 6

Who cares If Standard Bank won’t stop financing coal mining? 28 Iron Ships Slide Into Economic Storm 42 Minnesota Court of Appeals Sends PolyMet Air Permit Back To MPCA 26

EQUIPMENT Layoffs intensify at mining contractors due to a reduction of business activities 24 Trump signs executive order to support moon mining, pulling resources from asteroid 31

How Low Can The Iron Ore Price Go? Mining considered essential to US Covid-19 response

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20

Brazil's Vale Warns Resumption of lost capacity could be slowed 33

Miners to further leverage mobile tech for real-time data access, survey reveals 26 Metal prices boosted by a South African move to shut its Mines 40

GLOBAL Coal dust danger Underestimated 12 More than 280 sites to be tendered for mining 13 South African mining companies Gear up for unprecedented 21-day shutdown 14 Merchant Mining in India and latest developments in Odisha Mining Auction 2020 22

Freeport keeps Peru mine running, shuts New Mexico copper mine 27 Covid-19 wipes $282 bn from the Top 50 mining firms 32 Gold Mining Capricorn Nearing It's First Blast At Pilbara Gold Mine 34 Metso & Outotec Outline Covid-19 Impact Ahead Of Expected Merger Completion 38 BHP employees test positive for Coronavirus 39

STATISTICS March 2020 crude steel production 44 World Champions of steel Challenge-14 44 www.skillings.net | 3

MAY 2020 VOL.109. NO.05

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AMERICA

Polyus to initiate covid-19 response fund in Russia Polyus will co-found a fund in collaboration with the Far East Development Fund (FEDF) to finance activities aimed at preventing the spread of COVID-19 in the Russian Far East region.

The fund's size is expected to reach RUB 1 Billion (about $12 million), representing donations from different parties. Polyus and FEDF will donate a total of RUB 250 Million under the first tranche, which will be used to finance initiatives to help prevent the spread of the virus, the companies said in a press release.

A portion of the first tranche will be allocated to the Magadan area and Yakutia, Polyus' main regions of operations in the Russian Far East, and will be used for the procurement of medical equipment for local hospitals and personal protective devices.

The remaining portion of the first tranche will be distributed to all other regions of the Far Eastern Federal District. Polyus is the largest gold producer in Russia. One of its biggest operating centers, the Natalka gold mine, is situated at the Magadan region on the northern Pacific coast.

6 | SKILLINGS MINING REVIEW May 2020

NMDC Reduces Iron Ore Prices For April Amid Weak Demand India's largest iron ore miner reduced prices of the raw material for steel-making to the lowest in four months amid weak demand.

he explained. "However, we believe ore prices can rebound in a few months if mines in Australia and Brazil face production issues as a result of lockdowns / Covid-19 cases within the mining community, and China continuing with stable production Ac c o rd i n g t o Vi s h a l leading to severe Chandok, The decrease is ore deficit."

NMDC Ltd. lowered prices of lumps and fines by 16 percent and 17 percent monthon-month, respectively, to Rs 2,650 and Rs 2,360 a tonne for April, according to an exchange filing. That's the lowest since January.

This comes at a time the new COVID19 pandemic is in line with current marAmit Dixit, AVP likely to deepen ket conditions in India, (research ) at a slump in India's Edelweiss Secusteel demand as where steel production rities, said so far, the nationwide has been decreased subonly lump prices lockdown to were cut by Odiscurb spreading of stantially amid lockdown. ha-based players, infection delays but with this, even construction fines prices will be and purchases reduced drastically and overall this will of houses and automobiles. According be beneficial for JSW Steel Ltd. and other to Vishal Chandok, The decrease is in non-integrated steelmakers—that source line with current market conditions in raw materials. According to him, Weak India, where steel production has been demand in the country has resulted in decreased substantially amid lockdown. the price cut. NMDC has yet to respond "We expect weakness in demand will to BloombergQuint's emailed queries likely keep steel production low through and messages. the FY21 and hence demand for ore,"

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AMERICA

Having demonstrated impressive resilience for the past two months, the price of iron ore took a big hit this week.

Benchmark 62 percent Fe fines closed at US$80.20/tonne on Monday 23 March, back to the lows seen in early February.

How Low Can The Iron Ore Price Go? 8 | SKILLINGS MINING REVIEW May 2020

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global recession is approaching, but before this sell-off, the iron ore price had barely responded. In contrast, as of Monday, the copper price slumped 27% since the beginning of the year – a more 'typical' coronavirusrelated price response for industrial metals and minerals.

We believe iron ore's sell-off is the start of a trend, not a blip. So, why has it been remarkably resilient, and what lies ahead? This article is an excerpt from the insight' Iron ore: how low can it go?'

Why had iron ore fared so well until now?

THE INITIAL IRON ORE OUTLIER PERFORMANCE WAS DUE TO A COMBINATION OF FACTORS:

1. Tight seaborne supply – nothing related to coronavirus, but weather-related disruptions to loadings from Brazil and Australia at the beginning of the year.

2. Resilient demand – Especially in China, where hot metal/pig iron production has held up impressively well.

3. Disruptions to Chinese domestic mine production – labor restrictions, but also due to rail/trucking logistics.

4. Hope (possibly, misplaced)! The market has been taking a wager that the fiscal stimulus, targeted at steel-intensive infrastructure and construction, will be big enough and soon enough to offset the inevitable global downturn.

duration of coronavirus-related damage to Chinese steel and iron ore demand is fraught with uncertainty. The effect of the outbreak is a constantly changing picture.

WHAT IS THE PRICE OUTLOOK FOR IRON ORE?

We're not looking at a glut of seaborne iron ore yet. But risks are escalating, as well as the balance is tilting towards a bigger hit to iron ore demand than supply.

Targeted financial stimulus aimed toward steel-intensive infrastructure should cushion the fall, but our pre-crisis pre-

diction for an annual average price of US$80/tonne is unquestionably at risk.

Our view is that prices should gravitate towards US$70/tonne during the course of the year. However, there are reasons prices could fall further. If demand turns out to be weaker than forecast and the iron ore market moves into awful oversupply, prices could collapse as low as US$50/tonne.

Once prices fall to this level, they begin to approach the break-even of the major iron ore producers, and a supply reaction becomes unavoidable.

WHAT DRIVES THE PRICE OF IRON ORE?

China accounts for over 70% of global seaborne trade in iron ore and 95% of the growth that's happened over the last two decades.

The most significant single driver of seaborne iron ore prices is the Chinese production of pig iron itself, a function of demand for steel within China's manufacturing and construction sectors. Right now, any evaluation of the scale and www.skillings.net | 9

AMERICA

Stronger Chinese steel output seen backing iron ore prices in Q2 According to the latest S&P Global Platts outlook survey, Iron ore prices should be well supported in the second quarter, despite the slow recovery in downstream steel demand, as Chinese mills are expected to lift steel output.

About 38% of survey respondents expected iron ore prices to remain in the $80-$90/mt CFR range, whereas 28% saw them lower at $70-$80/mt. Half of the survey respondents believed their iron ore demands would increase in Q2, while 28 percent thought they could be at similar levels to Q1. Only 13% saw their iron ore demands falling, the survey discovered.

Despite soaring finished steel inventories in China, 72% expected crude steel production to increase in Q2. The discovery was in contrast to the previous survey when more than a third of Chinese mills said they were considering cutting production.

Additionally, it reflects optimism in the steel market, notwithstanding that just a quarter of respondents expected demand to normalize 10 | SKILLINGS MINING REVIEW May 2020

by the end of April. Some 35% believed the market would fully recover by the end of May and a further 25% by the end of June.

"We see the Chinese market returning to normal at the end of April; however, there is much uncertainty as a result of the virus outbreak outside of China. No country can provide only for itself since the steel market is global," a mill official in northern China explained.

The survey discovered that while 19% thought construction would continue to be the key demand growth segment, 37% of respondents, however, anticipated steel demand growth would come mainly from infrastructure.

Steel market participants expected the Chinese government to utilize infrastructure to support the economy in the wake of the

coronavirus outbreak. Not many respondents thought manufacturing would substantially drive demand for steel in Q2, and this was reflected in the outlook for hot-rolled coil margins. The majority, 44%, expected domestic Chinese HRC margins to average a slim Yuan 100-200/ mt ($14-$28/mt) in Q2, with 20% seeing them at Yuan 300-400/mt.

The survey discovered that while 19% thought construction would continue to be the key demand growth segment, 37% of respondents, however, anticipated steel demand growth would come mainly from infrastructure.

"The HRC market will depend mainly on demand from appliances and automobiles, and we're not in any way convinced that will recover strongly in Q2, though pent-up demand should flow through in the second half of the year," a mill contact said.

The prognosis for rebar margins was extremely bearish, with a quarter of respondents seeing margins of Yuan 100/mt or below. As the Chinese government has stated it will not use real estate to stimulate the economy, construction sector demand is expected to be softer in 2020.

Platts spoke to 32 companies for the outlook survey over March 23-25, including Chinese mills, domestic and international traders and mining companies. www.skillings.net | 11

GLOBAL

Coal dust danger

Underestimated A James Cook University scientist says it is possible Miners' exposure to dangerous coal dust has been underestimated, as the communities they live in are polluted.

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ssociate Professor Gunther Paul from JCU's Australian Institute of Tropical Health and Medicine (AITHM), Professor Michael Hendryx from Indiana University, Dr. Saidul Islam from the University of Technology Sydney and Professor GuangHui Dong from Sun Yat-sen University were the group of scientists who analyzed Australia National Pollutant Inventory (NPI) data for the years 2008–2018.

Dr. Paul stated that "Emissions of all studied pollutants from Postcodes that hosted coal mining sites were significantly higher than those from different types of NPI sites, including large cities."

He said the maximum exposure of miners to pollutants at work was mandated by law; however, this did not take into consideration the fact they also live nearby, at least part of their time. "The health of the public at large is impacted by coal mining, however, to the extent that miners also 12 | SKILLINGS MINING REVIEW May 2020

Dr. Paul stated that "Emissions of all studied pollutants from Postcodes that hosted coal mining sites were significantly higher than those from different types of NPI sites, including large cities." live near coal mining operations, their complete exposure is now underestimated," said Dr. Paul. He said surface

mining specifically leads to air contamination with documented damage to cell genetics and increased risks for cardiovascular disease, cancer, and respiratory disease among neighboring communities.

"Australian coal production rose by 35% between 2008 and 2018, and we think pollution emissions increased by much more. For instance, PM10 emissions (pollutants smaller than 10 micrometers, which can penetrate into the lungs) increased by almost 100% by 2014 before falling into an increase of 53% by 2018," said Dr. Paul.

He said more than 160,000 people lived in postcodes representing the top 20 PM10 emissions areas. "Vulnerable populations such as children, elderly individuals, pregnant women, or people that have preexisting conditions may be at most risk from mining-related pollutants.

And today we're seeing that the total risk to the miners themselves may be way above what it is supposed to be."

Dr. Paul called for more testing sites and analysis to better understand the risk to both communities and miners near mines.

More than 280 sites to be tendered for mining According to the Official Gazette, the Turkish Energy and Natural Resources Ministry has made a decision to hold tenders to open 284 sites to mining.

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he said 284 mining sites were put out to tender previously, but the tenders were canceled because there was not a sufficient number of bidders, the decision of the General Directorate of Mining and Petroleum Affairs (MAPEG) stated yesterday.

The tender specifications will be declared on MAPEG's official website for 15 days, it added.

MAPEG will hold a tender to grant certificates for two small mining sites on April 20, according to the decision. Mining operators in the adjacent lands will be eligible to take part in the tender. According to MAPEG, the tender guarantees can't be lower than the minimum bid price.

Turkish mining and quarrying index jumped 8.5 percent in January in the same month of 2019, the data from the Turkish Statistical Institute (TÜİK) revealed on March 14.

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GLOBAL

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resident Ramaphosa ordered that "companies whose operations require continuous processes such as furnaces or underground mine operations will be asked to make arrangements for care and maintenance to avoid damage to their continuous operations."

Large and small-cap mining companies have indicated that they would halt operations in what's expected to seriously affect the critical sector, which has already been suffering as a result of a range of domestic operational challenges and commodity price volatility.

Over the last couple of years, the local mining sector has been shedding jobs as companies shut down loss-making shafts to improve capacity. Production of some important minerals like gold has also plunged.

JOB LOSSES

Independent mining analyst Mamokgethi Molopyane warned that "the lockdown, as much as it is necessary, will severely hit companies. This phase might even lead to more restructuring processes, with more job losses."

south african mining companies

Gear up for unprecedented 21-day shutdown Mining companies will heed the directive by President Cyril Ramaphosa to close down their underground operations as part of the 21-day national lockdown he declared on Monday aimed at curbing the spread of the coronavirus.

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AngloGold Ashanti announced on Tuesday that it would "temporarily suspend production from its South African operations for three weeks starting from midnight on 26 March 2020." Over the period, its operations would be placed into maintenance and care.

The company, which operates the world's deepest gold mine, Mponeng, southwest of Johannesburg, last month announced the sale of its operations to Harmony Gold, in a roughly R4.4 billion transaction. The company said on Tuesday the deal was expected to close by the end of June. It also owns mines in various parts of the African continent, Australasia, and the Americas.

UNPRECEDENTED

Having said the closure would affect its annual production target of 1.4 million ounces and full-year earnings for 2020,

where appropriate so as to minimize any unintended consequences of the lockdown."

with CEO Peter Steenkamp referring to this period as "an unprecedented time in the history of the mining industry and our nation."

Mid-tier gold producer, Pan African Resources, said it supports the measures declared by Ramaphosa aimed at curbing the spread of the virus. While the lockdown will "impact negatively" on operational performance in the short term, it said its liquidity position was strong, with immediately available facilities of $20m.

that the real economic impact of the lockdown will be felt in the third to the fourth quarter of the year. "This is an industry which has been in a rut for some time; it is no doubt that this would add more pressure."

Large and small-cap mining companies have indicated that they would halt operations in what's expected to seriously affect the critical sector, which has already been suffering as a result of a range of domestic operational challenges and commodity price volatility.

It stated it would also look at rescheduling its short term senior debt commitments, in the event of an elongated national lockdown, highlighting the current favorable gold price. Consequently, the company has suspended its full-year production guidance until it could measure the full impact of the lockdown.

MINES MAY NOT REOPEN

Meanwhile, Anglo American Platinum said it would issue a further statement in due course after reviewing the detailed regulations relating to this lockdown, including exemptions for certain business activities. The group said it was "working along with the authorities of South Africa to ensure the continuity of our business

The mining sector added a total of R312 billion to export earnings, which represents nearly 25% of the total South African exports of goods and services.

Molopyane stated that the shutdown might help "reduce a glut" in the platinum group sector, which she said had witnessed an oversupply. She emphasized

According to the Minerals Council, mining contributed R351 billion or 7.3% to South Africa's gross domestic product (GDP) during 2018.

The Minerals Council said it was exploring ways to prevent permanent damage to the industry as a result of the lockdown.

"There are marginal and loss-making mines which will probably be unable to reopen should they be asked to close fully, without remedial measures." The Ministry of Mineral Resources, Gwede Mantashe, is currently meeting the industry players to discuss the measures declared by the president.

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Mine workers are seen under ground at the end of their shift at Cullinan mine, near Pretoria, South Africa, February 1, 2019. REUTERS/Siphiwe Sibeko

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A rusted truck in Panguna, 2010.

Photograph: Ilya Gridneff/AAP

GLOBAL

16 | SKILLINGS MINING REVIEW May 2020

Rio Tinto Accused of Breaching Human Rights

in Bougainville for not cleaning up Panguna mine Anglo-Australian mining giant Rio Tinto is accused of being responsible for "multiple human rights violations" after its Panguna mine on the island of Bougainville left people with a dangerous legacy of poisoned water, polluted fields, and a ruined river valley, according to a damning report from the Human Rights Law Centre.

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blue. The Jaba-Kawerong river valley downstream of the mine resembles a moonscape, with enormous mounds of grey tailings waste and rock stretching almost 40km downstream to the coast." The report was conducted by a research project run by the Catholic Diocese of Bougainville, and compiled through interviews Rio Tinto has not had access with 60 locals in the areas downto the mine site, since abanstream from Panguna and also doning the mine in 1990, draws on over 300 interviews.

he HRLC says the mining company has just been voted in favor of independence from Papua New Guinea, for reconciliation and reparations, and can now return to the island.

For 17 years before 1989, the Panguna mine was one of the world's richest and largest copper and gold mines, run by Rio Tinto subsidiary Bougainville Copper Limited.

Mining ended at Panguna 31 years ago after disputes over the mine's profits, and its environmental damage resulted in a decade-long civil war in Bougainville that killed up to 20,000 people. But the mine pit remains a huge scar in the landscape of Bougainville island and has left a deadly legacy for residents.

because of the current conflict and security issues. The spokesman said it acknowledged concerns raised in the HRLC report but couldn't comment because it hadn't been able to see the mine.

According to the HRLC report, "Polluted water from the mine pit flows continuously into local rivers, turning the riverbed and surrounding rocks an unnatural

The report alleges that many villages have been left without clean drinking water, which must be piped long distances or rely on rainwater tanks that frequently run dry. Many households don't have any option but to continue to use the contaminated rivers for bathing and washing.

People who live in the river valleys have reported serious, long-running health impacts, such as sores and skin lesions, diarrhea, respiratory problems,

www.skillings.net | 17

GLOBAL

and pregnancy complications. The rapid closure of the mine, and the lack of remediation since, means monsoonal rains push against high volumes of tailings sand into the rivers, destroying forests and agricultural land. The crossing of Rivers also becomes dangerous, with shifting sand channels and areas of quicksand.

Locals reported children drowning or sustaining severe injuries trying to cross rivers.

"The Panguna mine devastated our communities both physically and culturally, and we are still living with the consequences," said Theonila Roka Matbob, a teacher and conventional landowner from Makosi village, downstream from Panguna. "Our land is destroyed, and our rivers are contaminated. Children are drinking and bathing in the polluted water and getting sick. We urgently need Rio Tinto to return and deal with these problems so our communities can find healing."

Rio Tinto divested from the mine in 2016, giving its 53.8% interest in Bougainville Copper Limited (BCL) to the Papua New Guinea government and the autonomous Bougainville government. The HRLC report says the company "walked away without contributing to the clean-up or rehabilitation", a move that "appears to have been part of a deliberate corporate strategy by Rio Tinto to divest itself of high-risk, high-liability projects".

Silent rusting mine machinery litters the Panguna mine site, abandoned 28 years ago.

Photo by Catherine Wilson.

A spokesman for Rio Tinto said: "BCL abided with all applicable regulatory requirements up before the mine operations were suspended in 1989." Rio Tinto has not had access to the mine site, since abandoning the mine in 1990, because of the current conflict and security issues.

The spokesman said it acknowledged concerns raised in the HRLC report but couldn't comment because it hadn't been able to see the mine.

"Indeed, the current extremely challenging security situation was one of the reasons for the 2016 share transfer," he explained. "We believe the best means of addressing any current issues is through the proprietors of this mine working directly with the people of Bougainville."

However, the president of the autonomous Bougainville government, John Momis, stated that Rio Tinto's decision was "remarkably unprincipled, shameful and evil", accusing the firm of deliberately sidestepping its responsibility to clean up the damage it had allegedly wrought.

Report author Keren Adams said Rio's decision to "cut and run" out of Panguna was "an appalling breach of its responsibilities." "We spoke to children with skin ulcers that never heal. We heard from families whose loved ones had drowned attempting to cross rivers flooded with mine waste, and women who now have to walk two hours each day to lug water back to their communities because their nearby creeks are now contaminated by copper," she explained.

"This is not a historical issue, it is an ongoing human rights catastrophe, and Rio Tinto must immediately act to tackle it." Since 2005, the future of Panguna has been re-animated by Political developments in Bougainville, an autonomous region of Papua New Guinea.

The abandoned Panguna mine pit, as it is today.

18 | SKILLINGS MINING REVIEW May 2020

In December 2019, the province's people voted largely for independence, with 98% in favor. There is renewed interest in reopening Panguna and establishing new mines in the area.

Coming up on the Mining Agenda

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he dilemma of smart things, robots, and artificial intelligence unleashed are among the topics identified in Accenture 20th yearly report on technology trends.

One of the strong responses from mining and metals respondents, 89% believed that to compete in a post-digital world, organizations needed to elevate their relationship with customers as partners.

Tech Vision 2020 included a global survey of more than 6,000 executives from 21 industries, with Accenture's resources industry lead for New Zealand and Australia Ann Burns highlighting some of the outcomes from the mining sector for Mining Journal.

As regards to artificial intelligence, 84% - compared with 79% globally - said collaboration between humans and machines are crucial to innovation in the future. However, only 29 percent of metals and mining organizations reported they were preparing their workforce for collaborative, interactive, and explainable AI-based systems, although this was higher than 23% globally. As for the dilemma of smart things, 72% of metals and mining executives said their organization connected products and

THE FIVE COMPLETE OVERALL WERE:

• The I in Experience • AI and Me • The Dilemma of Smart Things

• Robots in the Wild; and • Innovation DNA.

services would significantly have more updates over the next three years. About two-thirds - 63% - of metals and mining executives believed fast advancements in scientific innovations and new technologies were poised to disrupt their industry, compared with 56% globally.

Some 77% believed the stakes for innovation had never been higher. In the podcast, the biggest challenge identified by mining executives was revealed by Burns - plus their take on robotics, and how well their workers will cope.

"I think this year is a very intriguing start to a new decade," she explained."I am very encouraged by the pivotal point we are at the start of 2020."

www.skillings.net | 19

AMERICA

Mining considered essential to US Covid-19 response The Department of Homeland Security listed mineworkers as part of the essential critical infrastructure workforce that should maintain work schedules to assist the United States' response to COVID-19.

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s the United States Hunkers down to flatten the curve of the COVID-19 pandemic, it remains crucial for the nation to maintain the critical infrastructure needed to respond to the global emergency and ensure systems remain intact for after the coronavirus has passed.

The Department of Homeland Security considers mining among 16 critical infrastructure 20 | SKILLINGS MINING REVIEW May 2020

Coal loader in Appalachia, 1946.

Photo: Russell Lee - U.S. National Archives and Records Administration

The list of identified essential critical infrastructure workers is intended to be overly inclusive reflecting the diversity of industries across the United States.

National Mining Association President and CEO Rich Nolan industries that "have a particular responsibility in this period to stated that it was delightful to see DHS reiterate the signifcontinue operations." In its March 28 "Guidance on the essential icance of our industry during this crisis." critical infrastructure workforce," DHS stated While mining, and the products made from that "workers necessary for mining and the minerals and metals it produces, are production of critical minerals, materials and used in every sector of business, DHS named related essential supply chains" should be Homeland Security energy and critical manufacturing as two part of the critical workforce that maintains stated in its guidance specific segments of America's essential their work schedules to aid in the United that "Companies can economy that need mined materials. "Our States' response to the coronavirus outbreak. country needs stability right now. Our have significant ecoManufacturing sector needs a dependable This also includes workers engaged in the nomic and social imsupply chain. And we need to know that our maintenance and manufacture of equipment power sector is secure across the country," and other infrastructure required for mining pacts as well as supply said Nolan. production and distribution. The National chain dependencies Mining Association today lauded Homeland which are geographThe critical manufacturing part of the HomeSecurity for reiterating its pre-COVID-19 land Security document underscores how guidance that mining is included among ically dispersed." essential mining is to the economy and other America's critical infrastructure sectors. sectors of the U.S. COVID-19 response.

"Mining supports all aspects of our econMining and the products made from the metals and minerals omy, providing the minerals, metals and coal that are essential it produces can be found in every sector the Department of to almost every sector identified as critical infrastructure Homeland Security considers crucial during the COVID-19 under DHS' Cybersecurity and Infrastructure Security Agency pandemic, particularly energy and critical manufacturing.

National Infrastructure Protection Plan. www.skillings.net | 21

GLOBAL Under this section, DHS named "workers necessary for the manufacturing of metals (including aluminum and steel ), industrial minerals, semiconductors, materials and products required for medical supply chains, and for distribution channels associated with transportation, communications, energy, information technology, food and agriculture, chemical manufacturing, nuclear facilities, wood products, commodities used as fuel for power generation facilities, the operation of dams, water and wastewater treatment, processing and reprocessing of solid waste, emergency services, and the defense industrial base" as critical to America's infrastructure.

While its "Guidance on the essential vital infrastructure workforce," is advisory in nature, DHS urges state and local governments and businesses to "consider the implications of business operations beyond the jurisdiction where the asset or facility is situated" when discussing which employees are critical to the country's infrastructure.

Homeland Security stated in its guidance that "Companies can have significant economic and social impacts as well as supply chain dependencies which are geographically dispersed."

DHS advises critical Infrastructure sectors such as mining to remain cautious in following Centers for Disease Control guidance, as well as local and state mandates, to limit the Spread of COVID-19 while providing the essential services to fight the spread of the disease and recover once this global medical crisis has passed.

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Merchant Mining in India and latest developments in Odisha Mining Auction 2020 Odisha's lease of merchant miners has expired in March 2020.

Subsequently, the authorities held bidding to reallot those mines in the recent past months. Odisha is the major mining state in India. More than 50 percent of Iron ore is mined from these mines located in the various parts of the state.

S

everal steel giants, for instance, JSW Steel, Tata Steel, Vedanta, Adani, etc. took part in the recent auction at Odisha, India, for the Iron ore and other minerals mine. The process took place in two steps; the first one was to technically qualify the bidder and rank them according to the initial bidding for the mines. Second, the highest bidding in the first round for each mine was picked as the base price for the mine and bidding for the second round started taking that price as a floor price.

JSW Steel got Nurgaon iron ore mine with the highest bid of 95.2 percent. Whereas Tata Steel has its iron ore as well as coal mines for a captive purpose only, JSW is currently

trying to dominate the merchant mining.

From the total production limit of 72 million tons, JSW acquired mines can produce 28.5 million ton which is 40 percent of the total production through these mines.

In the recent auction, 17 mines were auctioned, out of which four were acquired by JSW Steel, summing up a total of 21% in total of all the 20 mines. Aside from this, Formentor and ArcelorMittal got one mine each.

Other older merchant miners were able to retain their mines in the auction. On the other hand, TS Alloy Ltd., a subsidiary of Tata Steel, was able to acquire the chromite lease that is held by Misriall Mines. TS Alloy outbid various strong contenders like JSW Steel, Ferro Alloys & Indian Metals with 88.5 percent above the reserve price.

In the recent auction, 17 mines were auctioned, out of which four were acquired by JSW Steel, summing up a total of 21% in total of all the 20 mines. Aside from this, Formentor and ArcelorMittal got one mine each.

price, which is higher than Iron Ore bidding in Karnataka (80 percent) in south India over the past few years.

Companies like JSW Steel and ArcelorMittal may try to reduce the logistics cost through slurry pipelines, so as to tackle these increases in ore prices. Although this may take a few years and considering the current situation of the global pandemic, the prices may take a huge rise.

Furthermore, the state government has provided an intermediate storage facility to merchant miners of ores like Iron ore, manganese ore and chromite ore.

This competitive bidding for large and small mines can lead to a temporary increase in ore prices as the bidders have paid quite a high amount to purchase these mines. The average premium paid was around 114 percent above the reserve

The state steel and mining department have provided the merchant miners with the permit to deposit the material in stockyards, and they can ship it later at the requirements.

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EQUIPMENT

Layoffs intensify at mining contractors due to a reduction of business activities

The care and maintenance announcement from the Skorpion Zinc mine and refinery in southern Namibia, which will inevitably affect a total of about 1 500 workers, has started to trickle down to the mine contractors who have confirmed retrenchments.

24 | SKILLINGS MINING REVIEW May 2020

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ecently, two of Skorpion mine's contractors, Bulk Mining Explosives (BME) and Basil Read confirmed retrenchments, citing a reduction of business as the main reason.

Skorpion Zinc mine will be going into maintenance and care this month. This care and maintenance period overlaps with the Covid-19 lockdown during which production ramp down at the mine and refinery will progressively start. Care and maintenance is a term employed in the mining sector to describe conditions and processes when a mine is closed but where there is potential to recommence operations at a later date.

During a care and maintenance period, production is stopped, but the site is managed to ensure it stays in a safe and stable condition. However, economists have called for financial and monetary interventions by governments to help protect jobs and more importantly, investments.

Meanwhile, in a letter to the labour ministry, mining contractor Basil Read Mining said that the contracts of 332 fixed-term employees would be terminated on 30 April 2020 "due to effluxion of time".

"It isn't the organization's intention to offer new contracts of employment to all employees terminated as our revised compliment doesn't cater for all those being terminated. It's with sadness to inform you that 252 workers will not be given new contracts," read the letter.

(Below) The refinery at the Skorpion Zinc mine will be placed on care and maintenance during 2020. Production ramp down at the mine and refinery will happen progressively during April. Credit: Vedanta Zinc International.

Additionally, in a letter to the Mineworkers Union of Namibia (MUN), BME gave notice of the anticipated retrenchment "due to a reduction of the business as a result of economic reasons".

According to the country manager, Charl Vorster of BME, the company has suffered a 30% drop in business, and as a result of this, 14 of its workers will be affected by the retrenchments. Vorster noted that; "People are our greatest asset." He emphasized that it will be difficult to resume normal production once the business begins to pick up again.

At a recent media briefing, MUN southern region vice Chairperson Petersen Kambinda said the retrenchments at the Skorpion mine are "illconceived and barbaric" in the wake of the Covid-19 pandemic and called on President Hage Geingob to intervene urgently.

At a recent media briefing, MUN southern region vice Chairperson Petersen Kambinda said the retrenchments at the Skorpion mine are "ill-conceived and barbaric" in the wake of the Covid-19

pandemic and called on President Hage Geingob to intervene urgently. Kambinda charged that the job losses could be prevented if the Skorpion mine terminated a mining outsourcing agreement with mining subcontractor Basil Read.

In a recent statement, Skorpion Zinc spokesperson Nora Ndopu said the parent company, Vedanta Zinc International,

remains focused on prioritizing growth projects to create a sustainable life for Skorpion and to cushion the effect of the care and maintenance gap.

She continued that accelerated focus will now be on a Refinery Conversion Project to enable co-treatment of both sulphide and oxide ore, which was originally declared in 2014. www.skillings.net | 25

AMERICA

Minnesota Court Of Appeals Sends PolyMet Air Permit Back To MPCA

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oly Met Mining, Inc., a wholly-owned subsidiary of PolyMet Mining Corp. (collectively PolyMet or the company) TSX: POM; NYSE American: PLM, issued a statement regarding the Minnesota Court of Appeals decision remanding the air permit to the Minnesota Pollution Control Agency to provide more details.

We are not satisfied with the court's decision, and currently, we are evaluating all legal options. We believe the permit issued by the Minnesota Pollution Control Agency appropriately accounted for the NorthMet Project's potential effects. We are ready to provide the additional information the agency might need to update its decision on the air permit.

We demonstrated through the extensive environmental review and permitting process that we can meet or exceed the strict standards for nonferrous mines of Minnesota. This mine will offer muchneeded jobs to a region of the state known for its experience in safe mining. We are prepared to forge ahead.

ABOUT POLYMET

PolyMet Mining Corp. (www. polymetmining.com) is a publicly-traded mine development firm that owns 100% of Poly Met Mining, Inc. (together "PolyMet" or the "company"), a Minnesota corporation that controls 100% of the NorthMet copper-nickel-precious metals ore body through a long term lease.

The project features vital assets, including the deposit itself and infrastructure, such as utilities, roads, and existing rail that connect the ore body to the plant site about seven rail miles away. The project is situated at the established mining district of the Mesabi Iron Range in northeastern Minnesota.

26 | SKILLINGS MINING REVIEW May 2020

Miners to further leverage mobile tech for real-time data access, survey reveals A new study looking into the use of mobile technologies to optimize and transform workings from remote locations signifies real-time data accessibility is defining mining companies' field strategies.

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he 'Future of Field Operations' report from Zebra Technologies Corp, which calls itself "an innovator at the edge of the enterprise with partners and solutions that enable businesses to gain a performance advantage," revealed field service providers in the telecommunications, production, construction, mining, and agriculture industries globally are expected to increase the use of mobile technologies to optimize and transform workflows in the field.

Specifically for mining, 86% of respondents to the survey said real-time data access drives their mobile device usage in the field, with the vast majority of organizations (82%) now considering themselves "mobile-first" businesses, Zebra said. Considering this statistic, it was surprising to learn faster wireless networks (4G/5G) were driving mining company investments in new field operations technologies. In the mining space, these wireless networks can help connect those in the field to cloud-based platforms where they can upload and download data to make real-time decisions on projects around the world.

Drilling down the mining-specific stats further, it showed a positive correlation between the effective use of mobile devices and productivity, efficiency, employee satisfaction, and equipment availability. "Companies that have implemented mobile devices have already achieved many benefits with 61% indicating they increased efficiency and productivity, 50% experienced improvements in worker satisfaction, and 46% increased equipment availability," Zebra explained.

Predictive mobile usage is expected to double over the next five years, according to Zebra's report. Eight out of 10 mining organizations acknowledged that data is evolving, which requires them to look at their business in new ways, Zebra explained. As a result, it is expected to see the use of "predictive mobile solutions" increase.

When inquired about sufficient resourcing for mobile device use, only 21% of mining businesses said that they were assigning the right resource to the right issue at the right time with the use of mobile devices. This compared favorably with 16% of all organizations across the telecommunications, manufacturing, mining, construction, and agriculture industries that Zebra quizzed. In five years, the mining sector representatives expected this number to reach 46%, according to Zebra.

Cerro Verde copper mine. (Image courtesy of Fluor.)

Freeport keeps Peru mine running, shuts New Mexico copper mine Copper giant Freeport-McMoRan Stated that its Cerro Verde mine in Peru was operating, although limited by the Government's extension of a state of emergency to slow the spread of COVID-19.

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and Buenaventura (19.6%), produced just less than 1 billion pounds of copper last year, making it Peru's top copper mine.

Peru is the second-largest copper producer in the world and mining accounts for about 60% of its export earnings.

he world's largest publicly traded copper producer had temporarily placed the mine into care and maintenance last month to comply with national measures aimed at containing the spread of covid-19.

Freeport has been in discussions with the Peruvian Government since then to resume limited operations and stated it was completing steps to provide enhanced health protocols and additional onsite facilities to enable an increase in production at the mine.

On Sunday, the company stated that it had suspended operations at its Chino copper mine in New Mexico indefinitely as a result of the increasing cases of coronavirus cases among its employees and in the US generally.

Chino Mine, in New Mexico's southwest, produced 175 million pounds of copper last year, which makes it the organization's thirdlargest North American mine by production.

Three of the mine's workers tested positive for the virus earlier this month. On Sunday, Freeport told Reuters that more people had tested positive, but added the contagion wasn't "widespread," without providing specific numbers. Cerro Verde, controlled by Freeport-McMoRan with a 53.6% stake, Sumitomo Metal (21%) www.skillings.net | 27

GLOBAL

WHO CARES

If Standard Bank won’t stop financing coal mining?

Earlier this month, Wells Fargo became the third major US bank to announce that it would stop funding new oil and gas projects in the Arctic region. It followed similar pledges by JPMorgan Chase and Godman Sachs.

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hese banks also stated that they would be reducing lending to the coal sector. Wells Fargo, for instance, announced that it would not fund coal projects that involved mountain top removal, nor offer financing to any coal producer

28 | SKILLINGS MINING REVIEW May 2020

engaged in this form of mining.

JPMorgan Chase will no longer provide money or counseling to any company that generates most of its funds from coal.

In February, Europe's largest asset manager, Amundi, said it would

back a shareholder resolution requesting Barclays to phase out funding to fossil fuel firms that were not meeting the goals set out on climate change in the Paris Agreement. Sir Christopher Hohn, founder of activist hedge fund company TCI, also recently signaled

Wells Fargo, for instance, announced that it would not fund coal projects that involved mountain top removal, nor offer financing to any coal producer engaged in this form of mining.

that he might sue banks that continue to fund coal projects.

SUSTAINABLE FINANCE

This shows the significant level of pressure banks are feeling around the world to think about their role in the fossil fuel industry critically.

"The risks are twofold," explains Tracey Davies, executive director of Just Share. "The first is the straightforward financial element which if banks continue to fund these projects and the economy collapses – or they become stranded assets, or changing regulations prevent companies from extracting those fossil fuels – then they've effectively wasted money."

The second and more significant risk, however, is the broader question of the role the private sector should be playing in addressing the climate crisis and ensuring the sustainability of the economic system on which it relies. "Every investment into projects that contribute to climate change contributes to the systemic risk that climate change poses to our entire economic system," says Davies. "These projects can't happen if banks don't finance them," she adds.

extent since it's quite clear to almost everyone that constructing new coal-fired power stations is a bad idea. So a coal mining policy is a more challenging policy to grapple with for the banks."

To that extent, it sets a precedent in the domestic market, and all the big South African banks have indicated that they will follow suit. Nevertheless, shareholders who backed the decision are less enthusiastic about what the policy actually says. "The precedent is not so much what they have said, but more the fact that they've said something," says Jon Duncan, head of responsible investment in Old Mutual Investment Group.

"We have a bank stepping out and openly positioning itself regarding its current and prospective funding of coal," he points out. "But I don't believe the content of the policy itself is very precedent-setting."

THE RISKS AND OPPORTUNITIES

The importance of these reports is that Shareholders can now see the basis on which banks are making lending decisions, and can form

The key is that irrespective of anyone's views on the topic, the world is moving away from fossil fuels. And shareholders want to know how lenders like Standard Bank are currently preparing for this transition.

A LOCAL PRECEDENT

Earlier this month, Standard Bank introduced its thermal coal mining policy. The report is the result of a shareholder resolution that passed at the bank's last AGM, which required it to announce its plans for lending to the coal industry.

"This is the first policy to deal specifically with coal mining," Davies explains. "We have observed a few dealing with the financing of coal-fired power, which can be a lot easier to an www.skillings.net | 29

GLOBAL Standard Bank's lending policy to coal miners relies on the concept that emerging markets will have more flexibility on fossil fuels, as there is a recognition that they haven't contributed as much to historical carbon emissions and they should also be allowed to benefit from using them.

opinions on how suitable these are. Notwithstanding, Standard Bank has not declared any significant reductions in its lending ambitions.

"The content of the policy is fairly measured in that the bank is not saying it is no longer going to do this," says Duncan. "They will do it in a responsible way that deals with the requirements of the countries in which they operate.

"That means that they need to watch and see where the level of national ambition goes," he adds. "But the fascinating point in the discussion about the future of coal in this and other African countries is that the window period for it being commercially viable from a financing perspective is closing."

The key is that irrespective of anyone's views on the topic, the world is moving away from fossil fuels. And shareholders want to know how lenders like Standard Bank are currently preparing for this transition.

"The world is trying to decarbonise long-run economic growth rapidly," Duncan explains. "The winners in that process will be those companies and nations that can do that before the curve."

AN OPTION THAT IS NOT A CHOICE

For Davies, banks are not currently adapting to this reality enough.

Even appreciating that South Africa specifically and Africa more generally will face serious challenges in phasing out the mining and use of fossil fuels, banks can't ignore what is going on in the wider international economy. "I understand the 30 | SKILLINGS MINING REVIEW May 2020

historical carbon emissions and complicated political situathey should also be allowed to tion the banks are in, but all benefit from using them. banks around the globe are in a difficult polit"But even that is ical situation," disingenuous," says Davies.

The world claims Davies.

Standard is trying to "Developing Bank's lending countries might policy to coal decarbonise have slightly miners relies long-run longer to make on the concept changes, but that emerging economic that does not markets will growth rapidly, signify those have more changes don't flexibility on have to be drafossil fuels, as matic. It is not an excuse not to there is a recognition that they change anything." haven't contributed as much to

EQUIPMENT

Trump signs executive order to support moon mining, pulling resources from asteroid

An executive order was signed by President Donald Trump Order, establishing U.S. policy on the exploitation of off-Earth resources. This policy emphasizes that the current regulatory regime — particularly, the 1967 Outer Space Treaty — permits the use of such resources.

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he U.S. sees a clear path to the use of asteroid and moon resources. The water ice and lunar resources that will help the United States set a long-term human presence on the moon are there for the taking, the White House believes. This vision has long held sway in U.S. government circles. For instance, the USA, like the other major spacefaring countries, has not signed the 1979 Moon Treaty, which stipulates that non-scientific utilization of space resources be governed by an international regulatory framework. And in 2015, Congress passed a law explicitly allowing American companies and citizens to use moon and asteroid resources.

The new executive order makes things even more official, emphasizing that the United States does not view space as a "global commons" and sees a very clear path to off-Earth mining, with no need for further international treaty-level agreements.

The executive order, known as "Encouraging International Support for the Recovery and Use of Space Resources," has been in the works for about a year, a senior administration official said during a teleconference with reporters today. The order was prompted, at least in part, by a desire to clarify the United States' position because it negotiates with international partners to help advance NASA's Artemis program for crewed lunar exploration, the official added. (Engagement with international partners remains significant, the official stated.)

Artemis plans to land two astronauts on the moon in 2024 and to establish a sustainable human presence on and around Earth's nearest neighbor by 2028. Lunar resources, particularly the water ice thought to be plentiful on the permanently shadowed floors of polar craters, are important to Artemis' aspirations, NASA officials have said. By the way, the moon is not the final destination for these aspirations.

policy toward the recovery and use of space resources, such as water and certain minerals, to encourage the commercial development of space," Scott Pace, deputy assistant to the president and executive secretary of the U.S. National Space Council, said in a statement today. President Trump has shown great interest in shaping U.S. space policy. In December 2017, for example, he signed Space Policy Directive-1, which set the groundwork for the Artemis campaign.

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Artemis is designed to help NASA and its partners learn how to support astronauts in deep space for long stretches, lessons that will be significant to putting boots on Mars, which NASA plans to do in the 2030s. "As America prepares to return humans to the moon and journey on to Mars, this executive order establishes U.S.

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www.skillings.net | 31

GLOBAL

Covid-19 wipes $282 bn from the Top 50 mining firms According to new figures released by Mining.com, the ongoing coronavirus Covid-19 Pandemic has thus far wiped $282bn from the value of the top 50 mining companies globally.

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2020. Glencore has dropped to ninth place in the ranking after a 50% fall in market value. Two years ago, the commodities giant was the third-largest mining company on earth.

The top 10 mining firms lost about $170bn in market value in the first quarter of

Polish copper firm KGHM dropped out of the top 50 altogether. The biggest drops in market value came from Vedanta, Teck Resources, and Anglo American Platinum.

Russia's largest producer of gold, Polyus, was the only company to see double-digit

he new figures show a struggling industry overall, despite a resurgent gold price in recent months. The top 50 companies by market value compiled by Mining.com showed a combined market value of nearly $1tn in 2019, after adding almost $160bn in market capitalization over the previous year.

32 | SKILLINGS MINING REVIEW May 2020

growth. The company rose 10.2% so far this year. The combined market cap for all the top 50 mining firms now sits at just under $704bn.

Over 30% of that value comes from the six Australian companies on the list. U.S and Canadian companies are the other key players, contributing 16.4% and 11.1%, respectively, to the overall value of the top 50 companies.

Brazil's Vale Warns Resumption of lost capacity could be slowed

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razilian mining company Vale SA said on Tuesday it was at risk of postponing the resumption of lost production capacity due to possible coronavirus-related delays in assessments, inspections, and authorizations but that existing output so far had seen little impact.

The risks, representing a fresh round of upheaval after production cuts last year emanating from the dam burst in Brumadinho's town that killed nearly 270 people, were detailed in a presentation.

Vale said in February, it was expecting

Vale has taken steps to protect companies in its supply chain, including advancing payments to over 1,000 suppliers. to resume capacity of about 40 million tonnes annually at various mines, which are currently undergoing post-Brumadinho safety reviews.

"Vale has had a relatively good performance so far, with limited impact on sales and production, but our ecosystem has been highly impacted by the restrictions imposed by the Covid-19 pandemic, which could affect our operations", the firm said. Vale shares were up 6.2%, hitting a three-week high of 44.36 reais in early afternoon trading in the Sao Paulo stock exchange.

Taking a Look at the international iron ore market across all Producers, Vale said it calculated that approximately 18 million tonnes of output could be interrupted as a result of lockdown-related production reductions in Africa, Malaysia, India,

"Vale has had a relatively good performance so far, with limited impact on sales and production, but our ecosystem has been highly impacted by the restrictions imposed by the Covid-19 pandemic, which could affect our operations", the firm said. Vale shares were up 6.2%, hitting a three-week high of 44.36 reais in early afternoon trading in the Sao Paulo stock exchange.

Peru, and Canada in the transoceanic marketplace. Looking at the global iron ore market across all producers, Vale said it calculated that roughly 18 million tonnes of output could be interrupted in the transoceanic market thanks to lockdown-related production cuts in Malaysia, Canada, India, Peru, and Africa.

Vale said it has thus far seen little effect at its Brazilian mines, which remain open at Chinese ports because they've been designated an essential service. According to the statement, Vale said it had taken steps to protect companies in its supply chain amid fallout from the pandemic, including advancing payments to over 1,000 suppliers. The miner is also changing payment terms for some 3,000 others. www.skillings.net | 33

GLOBAL

Gold Mining Capricorn Nearing It's First Blast At Pilbara Gold Mine ASX-listed Capricorn Metals has been busy for the past few months establishing the necessary supporting infrastructure for its new Karlawinda gold project near Newman in WA that boasts some 900,000 reserve ounces and an estimated initial 8.5-year mine life.

34 | SKILLINGS MINING REVIEW May 2020

Meanwhile, the development and mining work is ongoing at the Karlawinda project, with an updated ore reserve and a significant 20,000-metre air core drilling program, which will test eight high priority gold targets, all within a 15-kilometer radius of the company's processing plant.

The gold targets are all associated with important geological features, which have coincident surface gold or geochemical anomalies. Capricorn explained that it's high ranking targets have seen little to no historical gold exploration due to their remote Pilbara location.

Field teams are currently planning on a first pass soil sampling program across a significant area of 540 square kilometers. It looks like there are no significant hurdles in the way that might sink this project now, with ample cash in the order

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he company has completed the all-important 306-room accommodation village and said it would be ready for lodging by the end of the month. A 44km access road is also currently under construction, which will allow entry through the Great Northern Highway into the mine.

The company is almost halfway towards the completion of the mechanical layout of the gold plant and says that most of the plant site earthworks are now complete, which will facilitate an all-out assault on the construction of the project.

Capricorn has ordered critical items such as steel and some major long lead time processing equipment such as gravity recovery equipment, the ball mill, and crushers.

The company also stated that it had chosen its key power supplier, which will enable them to order the gas generators to fire the gold plant.

Most importantly is Capricorn's nearing of the official mining tender process, where it will seek to award a contractor for digging and hauling ore from the proposed open pits.

of $68M at the end of this quarter and undrawn debt and bank guarantee facility of $100M to support the project, Capricorn's Executive Chairman Mark Clark said: "It is quite gratifying to see our project team continuing to make good progress with the development of the Karlawinda project in these uncertain times. The development benefits from being fully financed and located in Western Australia, in which there is solid mining and construction capacity which to date has not been significantly impacted by the Coronavirus." www.skillings.net | 35

GLOBAL

The Covid-19 pandemic is hobbling U.S. effort to produce lithium, rare earth, and other materials used in high-tech equipment and electric vehicles, dealing a setback to President Donald Trump's plan to curb Chinese control of the strategic minerals industry.

COVID-19

Outbreak Slows US Push To Produce Electric Vehicle Minerals

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Seth Goldstein, a mineral analyst at Morningstar, said: "Coronavirus could cause a year or two delay on projects. That helps China right now."

.S. junior miners have slowed engineering function, loan applications, and environmental reviews as a result of the pandemic, which has killed nearly 20,000 people across the world. "We can just hit pause," said Keith Phillips, Chief executive of North Carolina's Piedmont Lithium Ltd. Lithium Americas Corp, Piedmont, and ioneer Ltd, both of which have Nevada projects, have stated they now face regulatory or engineering setbacks that could push back mine construction.

Most companies focused on U.S. strategic minerals have large cash reserves after recent stock and bond offerings. While none have yet to report an employee testing positive, the virus has, however, fueled a bunker mentality among some executives. Seth Goldstein, a mineral analyst at Morningstar, said: "Coronavirus could cause a year or two delay on projects." "That helps China right now." The pandemic is the latest setback for the lithium industry, with prices for white metal down 37 percent in the past year due to oversupply concerns, according to data from Benchmark Minerals Intelligence.

36 | SKILLINGS MINING REVIEW May 2020

"The economic fallout from the outbreak will slow down the development of new projects," said Benchmark's Andrew Miller. As the U.S. government turns its

attention to the Coronavirus, rare earth projects are also left waiting. The Pentagon last year said it would finance mines using the Defense Production Act, which gives the military wide berth to procure some equipment. Trump has just considered using the same law to improve medical supply manufacturing.

However, U.S. rare earth developers worry the virus could delay any Pentagon decision indefinitely. M.P. Materials, which runs the only U.S. rare earth mine, remains operational, although it still depends on China for final processing.

"As untimely as COVID-19 is, it's on point with what we've been discussing: North American independence is needed now," said Pat Ryan, chairman of UCore Rare Metals Inc, which is developing an Alaska rare earth mine.

Medallion Resources Ltd, Texas Mineral Resources Corp and privately held USA Rare Earth are also waiting on the decision from Pentagon. "We cannot lose concentration on all the other things that we need to do at this hectic time for our nation," said Paul Kern, a retired U.S. Army general, and USA Rare Earth board member. www.skillings.net | 37

GLOBAL

Metso And Outotec Outline Covid-19 Impact Ahead Of Expected Merger Completion While Metso and Outec (mineral processing technology & equipment majors) merger completion still expected to complete in Q2 2020 (via Metso's partial demerger and combination with Outotec to create Metso Outotec & Metso Flow Control spinning off to become Neles), both companies have updated the market on the impact of the coronavirus (COVID-19) pandemic to their businesses.

M

etso's operations in China were significantly impacted by the coronavirus outbreak in February 2020. However, the Chinese factories have restarted successfully and are currently running at their normal capacity. The order intake from China in the first quarter is estimated to be on the planned level, while sales in China will probably be lower than expected, having a slight impact on Metso financial performance.

Metso adds that rapid enforced measures to contain the spreading of the virus in various countries around the world are restricting the mobility of its workforce, and this has started to have an impact on its field service operations.

"Currently, Metso's operations, notably in India, Peru, and South Africa, are affected by the restrictions imposed by the gov-

38 | SKILLINGS MINING REVIEW May 2020

ernments. The restrictions might also impact supply chain activities if prolonged for several weeks."

Under these circumstances, Metso says it will continue to focus on the safety of its personnel and customers, as well as leveraging its international operations so as to provide maximum flexibility to ensure the continuation of its own and its

clients' operations. Simultaneously, the Company continues to prepare actions to adapt to short-term challenges in various locations and focus on cost control and cash flow. For instance, it is currently evaluating the potential closure or other alternatives for its operations in Vereeniging, South Africa.

Metso added: "The Company has earlier implemented a strong cost control, due to its strong liquidity position and the upcoming demerger. The planned shortterm activities could include a reduction in work time and reduced overall spending. Reduced work time is likely to have a temporary negative effect on the com-

pensation for many employees. Therefore the Metso Executive Team has decided to take part in this endeavor by lowering its compensation during this period as well."

The strange circumstances caused by the Coronavirus pandemic are also impacting

Outotec's business. Due to this, Outotec is initiating worker cooperation negotiations on March 31, 2020, with the personnel in Finland as regards to temporary lay-offs. The negotiations concern the entire employee, about 1,400 employees in Finland.

"The coronavirus outbreak has hindered the Global market environment, including our operations in Finland. Regrettably, these measures are necessary to adjust our cost levels in the changed Business situation," explained Outotec's CEO Markku Teräsvasara.

BHP EMPLOYEES TEST POSITIVE FOR CORONAVIRUS BHP says it has had a "small number" of verified cases of COVID-19 among its international workforce of 72,000 people. However, the organization did not disclose the specific number, or places of those diagnosed with COVID-19.

BHP has introduced a personal shopper service that camp residents can use to source supplies. "The resources industry is among the few industries that can provide regional occupations, products to customers and payments to suppliers to help underpin continued financial activity," Henry stated.

A

"We're also working hard to directly support resilience and the mental health of our people and communities, regional health and community services, and the vulnerable in our community as we manage through this difficult period.

c c o r d i n g t o t h e c o m p a ny statement today, "All of the people who tested positive followed the required protocols of selfisolating and reporting, to prevent putting their colleagues at risk." "There has not been any broader transmission from these cases to other employees, or any impact on operations or sites."

BHP said it had procedures in place in case an employee becomes unwell with COVID-19 symptoms, ensuring treatment, solitude and contact tracing. "Our major priority remains to help reduce the possibility of transmission and help safeguard our communities and people," CEO Mike Henry stated. "We're

dedicated to playing our part in the collective response to the COVID-19 pandemic."

BHP is reinforcing hygiene measures and social distancing, while implementing more measures for employees at a higher risk of coronavirus, like those with underlying health conditions.

Non-residential workers at the site are no longer allowed to visit local townships or neighborhood facilities, and in certain places,

"I'm delighted with the way our people are adapting to new ways of working, including rosters and new shift patterns to reduce movements, social distancing, hygiene protocols and regular health screenings.

"Our clients, suppliers and governments have been instrumental in helping us maintain safe production and operational continuity; we appreciate them for their support and will continue to work closely with them." www.skillings.net | 39

GLOBAL

Metal prices boosted by a South African move to shut its Mines A major "disruption" event, the closure of South Africa's large mining industry for 21 days as a precautionary step to stave off the spread of coronavirus, is expected to flow into the prices of a wide range of minerals and metals.

P

latinum is expected to benefit most from the shock decision which coincides with the South Africa Government declaring a nationwide lock-down designed to restrict the movement of people.

South African supplied an estimated 75% of the world's platinum and 40% of its sister metal palladium, last year. It is also a major producer of manganese titanium minerals, coal, iron ore, gold, and a range of other industrial products.

SOUTH AFRICA FOLLOWS PERU

While too early to measure the impact of South Africa's mine closure decision, it is the second major metal producer to close its industry, after Peru shut down mine activities last week.

Losing some raw material from the global market may not have an immediate effect on prices, especially as production slows

40 | SKILLINGS MINING REVIEW May 2020

under the effect of border and factory closures. But a prolonged mine closure could result in a surprise boost to prices and benefit countries able to keep their mines open with Australia and Canada two potential beneficiaries, thanks to the extensive automation of their mining industries which have cut employment numbers permitting them to operate a relatively small workforce, unlike laborintensive African mines.

BRAZIL'S OUTAGE STARTED THE IRON ORE BOOM

An example of what a major disruption event can do to commodity prices happened last year when Brazil was forced to curtail imports of iron ore after two dams holding back mine residue (tailings) collapsed, killing several people.

The consequence of losing a sizable portion of Brazil's iron ore exports helped keep the price of the steel-making

higher for longer, with a second outageevent, a major storm off the Australian coast which closed ports adding to the iron ore shortage.

Iron ore could once again be a major beneficiary from events in South Africa since it's one of the world's major iron ore exporters and it remains a commodity in demand as China slowly resumes normal manufacturing operations after its coronavirus shutdown. Each of the iron ore exporters of Australia saw their share prices gain ground today, though the moves were small and came after a period of significant selling.

THE "DEFIANT BULKS"

Iron ore, coal and manganese, has remained high even as the rest of the commodity complex has sagged in line with the global slowdown.

Though iron ore has been widely tipped for the past 12-months to fall back to about $55 per ton, it stays roughly $88/t fulfilling a surprise role as a safe haven for investors along with a much more surprising success, metallurgical (steel-making) coal which has risen by 17% this year to around $165/t. Until now the driving force behind the iron ore and metallurgical coal industries has been the stronger-than-expected demand for steel in China which is stimulating the construction sector of its economy after the coronavirus slowdown. Closing

South Africa's mines can add a supply increase to what has been demand drive keeping iron ore and coal higher for longer.

Iron ore could once again be a major beneficiary from events in South Africa since it's one of the world's major iron ore exporters and it remains a commodity in demand.

Morgan Stanley, an investment bank, yesterday described metallurgical coal and iron ore as "defiant bulks" which had emerged as comparative out-performers amidst the weaker commodity sell-off. Morgan Stanley stated that "The two major steel ingredients have become safe havens as China's blast furnaces kept running while the two have also been supported by supply-side issues."

The bank said it expected a gradual move to lower prices in 2020, but that was before South Africa declared the closing of its mining industry.

Cambodia Government calls for new mining exploration bids The Mine and Energy Ministry has called on local and foreign organizations to bid for mining exploration licenses. In a statement released this week, the ministry encouraged both foreign and national companies to submit bids to explore potential mining opportunities in three provinces, Mondolkiri, Preah Vihear, and Oddar Meanchey.

A

pplications are expected to close on April 30, with all the necessary documents and reports uploaded to the ministry's online One-Window Service.

Four successful bidders will be informed soon afterward.

Yos Monirath, director-general of the Mines Department at the Ministry, informed Khmer Times that the open call for mining license bids followed a study and evaluation inspection by a team of experts. Both Preah Vihea and Oddar Meanchey have potential metal and copper resources, while Mondolkiri might have gold reserves. A total of 39 firms currently have mining exploration licenses in Cambodia.

The new bidding process followed a previous one in January when seven applications were received by the ministry with four firms selected. "We're expecting more applications this time around," Yos said. "We want to award more licenses." Last year, the government collected more than $20 million in non-tax revenue from the oil and mining sector, an increase of about 10 percent in 2018. Revenues for the extractive sector are divided into two categories. Nontax revenue includes licensing charges, land leases, and royalties payable to the government through the Ministry of Mines and Energy. However, tax revenue is collected by the General Department of

Taxation. The standard rate of corporate tax for companies in Cambodia is 20 percent. But 30 percent is applicable for oil and gas and specific mineral exploration activities. Oil operations and upcoming large-scale mining, including projects by KrisEnergy, Mesco Gold, and Renaissance Minerals, are expected to generate substantial revenues for the government.

Singapore-based KrisEnergy is expected to begin its oil extraction operations this year, and Renaissance Minerals, a subsidiary of Australia-listed Emerald Resources, announced that it hopes to start extracting gold at the Mondulkiri province of Cambodia in Q2 2021. Solinn Lim, Oxfam's country director, said the government should continue to think about the tradition of good governance so that they can keep the people well informed, especially those who reside in areas near investments.

"This is important because the sector requires advanced technologies, and, if not managed efficiently, the risk can be exceedingly high. If we utilize advanced technology, we can lower the impact on society and the environment," she explained. Oxfam has a global extractive industry program, operating in over 30 countries in Asia, Latin America, and Africa, where the company works on the development of tools, reports, and guidelines to promote responsible mining operations. www.skillings.net | 41

AMERICA

Iron Ships Slide Into Economic Storm Economists study the market's "invisible hand," but when it comes to the economy, Iron Rangers believe what we see. That's because here in Northern Minnesota economic indicators ride in diesel engines iron ore cars pulled on steel rails.

"As long as" is the operative phrase here.

Automakers already shuttered plants while steel mills begin to do the same.

Eventually, in Northern Minnesota, this wave of stoppage will reach mines like a very long traffic jam.

ith our own eyes, we see Minnesota's iron mines operating regardless of the historic shuttering of the American economy due to COVID-19. In late March, the first fantastic Lakes freighter full of taconite pellets left the Port of Duluth-Superior to signal the start of the 2020 shipping year.

All Iron Range mines continue to operate at full production.

But also consider how much this situation has exposed the flaws in our broader economy. Even with the mines running, local unemployment offices are currently brimming with fresh jobless claims.

Maybe now we can see what we couldn't see before.

prevent the spread of the COVID-19 pandemic. As long as mines have contracts to fill, they will send Mesabi Range ore down the line.

We no longer live in the era of the Oliver Iron Mining Company when mines alone dictated economic output. We know this because our communities have changed

W

The State of Minnesota deems mining and shipping to be crucial production.

This exempts the industry from orders that sent most Minnesotans home to help 42 | SKILLINGS MINING REVIEW May 2020

as a result of the COVID-19 outbreak. Most businesses' doors remain locked—wind whistles past empty streetscapes and playgrounds. Many people now work from home, while more cannot work at all.The other day I was buying gasoline and heard two men talking as they passed each other in the store.

The first was working full time and complaining that he did not have much protection from the virus. While the other complained that he had gone from working more than 40 hours a week to nothing. The first seemed jealous of the other, but thankful, also. There's just no winning in this circumstance.

In an April 2 BBC News analysis, writer Jonty Bloom asked if coronavirus could reverse trends in globalization. Maybe, confronted with volatile global supply lines and trade uncertainty, some companies will see the wisdom in "re-shoring" more production in Western countries like ours.

That's an encouraging suggestion until you read Bloom's exploration of the matter. If companies become willing to spend more on domestic operations, they will also implement technological change to reduce costs.

THIS MEANS AUTOMATION.

Like a good chess player (and I learned chess in an Iron Range college), we need to think about several moves ahead of our current turn. Yes, iron mines might become idled this year. In fact, it will. But we've dealt with that before. The major question is how we will prepare ourselves for a domestically-focused, technology-driven economic shift? Are we prepared? Or are we merely prepared to be exploited? Again.

The economy is now much more than rocks in train cars. It's intellectual property, technology and design. Are the people still working now? Still, making money and buying low priced stocks for their retirement funds? They do this kind of job and will benefit the majority from what comes.

We need Ore. But yes, Hibbing, we also need more. We need to diversify the economy. And we must capture economic activity related to mining technology or else we're just sailing ore ships into the storm of the century without a map, a compass or a clue.

NORTH AMERICAN MARKET (LTU) Company

IRON ORE PRICE REPORT

Ore Type

Pellets, FOB Michigan Mines Pellets, FOB Cleveland-Cliffs Inc. Minnesota Upper Lakes Port Source: CLEVELAND-CLIFFS INC. Cleveland-Cliffs Inc.

Per Iron Unit

Per Gross Ton at 64%

Per Ton at 64% Reporting Date

$1.28

$81.92

12/31/17

$1.42

$90.88

12/31/17

We thrive on challenges golder.com

www.skillings.net | 43

STATISTICS United States Exports to World of All Steel Mill Products in Thousands of Metric Tons

MARCH 2020 CRUDE STEEL PRODUCTION

W

orld crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 147.1 million tonnes (Mt) in March 2020, a 6.0% decrease compared to March 2019.

Due to the ongoing difficulties presented by the COVID-19 pandemic, many of this month’s figures are estimates from national and regional associations, which may be revised with next month’s production update. World crude steel production was 443.0 Mt in the first three months of 2020, down by 1.4% compared to the same period in 2019. Asia produced 315.2 Mt of crude steel in the first quarter of 2020, a decrease of 0.3% over the first quarter of 2019.

The EU produced 38.3 Mt of crude steel in the first quarter of 2020, down by 10.0% compared to the same quarter of 2019.

North America’s crude steel production in the first three months of 2020 was 29.5 Mt, a decrease of 4.0% compared to the first quarter of 2019.

China’s produced 79.0 Mt of crude steel in March 2020, a decrease of 1.7% compared to March 2019. India estimates 8.7 Mt of crude steel production in March 2020, down 13.9% on March 2019. Japan estimates 8.2 Mt of crude steel production in March 2020, down 9.7% on March

2019. South Korea produced 5.8 Mt of crude steel in March 2020, down 7.9% on March 2019. In the EU, Germany estimates 2.9 Mt of crude steel production in March 2020, down 20.9% on March 2019.

Italy produced 1.4 Mt of crude steel in March 2020, down by 40.2% on March 2019. France estimates 1.2 Mt of crude steel production in March 2020, a 13.2% decrease compared to March 2019.

Spain produced 1.2 Mt of crude steel in March 2020, down 14.6% on March 2019. The US produced 7.2 Mt of crude

steel in March 2020, a decrease of 6.0% compared to March 2019.

Russia estimates 5.9 Mt of crude steel production in March 2020, down 4.4% on March 2019. Ukraine produced 1.8 Mt of crude steel in March 2020, down 10.3% on March 2019. Brazil produced 2.6 Mt of crude steel production for March 2020, down by 8.2% on March 2019. Turkey’s crude steel production for March 2020 was 3.1 Mt, up by 4.1% on March 2019.

WORLDSTEEL ANNOUNCES THE WORLD CHAMPIONS OF STEEL CHALLENGE-14

T

he World Steel Association (worldsteel) today announced the new World Champions of the 14th steelChallenge. Keun Hak Kim from POSCO in South Korea won in the industry category and Huan Xu from Chongqing University of Science and Technology in China won in the student category.

The World Championship of the 14th steelChallenge took place online on 21 April 2020. Originally scheduled to take place in London, UK, the competition took place remotely to follow the social distancing guidelines of health authorities around the world.

The 5 winners of the Regional Championship from each of the industry and student categories competed for the global title.

44 | SKILLINGS MINING REVIEW May 2020

The task was to produce a specific engineering steel grade at the lowest cost using steeluniversity’s Electric Arc Furnace Steelmaking and Secondary Steelmaking simulators.

Scott Chubbs, Director, steeluniversity, said, “this World Championship presented a new challenge as we had to change plans due to COVID-19. We couldn’t meet in London, so we moved the competition online. The steeluniversity team, the finalists, the faculty advisors and the sponsors were all very supportive. We rethought how we did the championship, and this year, for the first time, we invited people from around the world to view the competition and award ceremony via webinar.”

CRUDE STEEL PRODUCTION, MARCH 2020. Source – World Steel Association COUNTRY

MARCH 2020

MAR % CHANGE 2019 MAR 20/19

MARCH 2020

MAR % CHANGE 2019 MAR 20/19

2020

% CHANGE

-24,1

1 816

-10,7

Mexico

1 330 e

1 676

COUNTRY

2020

% CHANGE

-20,6

4 144

-16,6

Austria

543

715

Belgium

470 e

745

-36,9

1 450

-27,6

United States

7 222

7 686

-6,0

21 946

1,0

Bulgaria

45 e

51

-11,1

135

-4,3

Croatia

0 e

12

-100,0

North America

9657

10 661

-9,4

29 516

-4,0

286

391

-26,8

928

-14,0

2635

2 869

-8,2

8 018

-7,0

80 e

61

31,2

235

5,3

0 -100,0

Argentina

Czech Republic

403

395

1,8

1 202

-2,5

Finland

362

337

7,6

1 018

12,6

France

1 200 e

1 383

-13,2

3 729

-3,6

Chile

Germany

2 900 e

3 667

-20,9

9 473

-9,3

Colombia

100 e

105

-4,8

304

-2,2

Greece

100 e

150

-33,3

353

-10,6

Ecuador

50 e

50

0,5

153

0,2

Hungary

154

176

-12,6

402

-17,7

Paraguay

2 e

1

208,2

6

60,5

1 367

2 286

-40,2

5 278

-16,2

Peru

100 e

107

-6,1

297

-0,4

Uruguay

5 e

4

16,0

17

19,3

Venezuela

2 e

11

-81,6

6

-74,0

3 260

3 598

-9,4

9 964

-7,1

Egypt

682

706

-3,5

2 227

5,3

Libya

23

46

-48,8

150

22,4

544

-44,8

1 125

-29,4

Italy Luxembourg

170 e

222

-23,3

537

-9,0

Netherlands

573

612

-6,3

1 737

-3,6

Poland

650 e

912

-28,7

2 052

-18,6

Slovenia

50 e

57

-12,4

164

-0,4

1 170

1 370

-14,6

3 257

-11,2

Sweden

427

440

-2,8

1 252

-4,6

United Kingdom

630

647

-2,7

1 863

-2,8

Other E.U. (28) (e)

815 e

934

-12,8

2 574

-6,3

-20,4 38 292

-10,0

Spain

European Union (28) 12 029

15110

Bosnia-Herzegovina

65 e

76

-14,2

200

-8,7

Macedonia

20 e

29

-30,4

44

-32,1

Norway

64

52

22,8

177

10,1

Serbia

131

184

-28,5

402

-19,6

Turkey

3110

2 986

4,1

8 975

-9,6

Other Europe

3390

3 326

1,9

9 798

-7,3

Byelorussia

220 e

227

-3,1

681

6,2

Kazakhstan

310 e

398

-22,1

912

7,3

40 e

42

-4,8

97

27,6

Russia

5850 e

6 118

-4,4

17 907

-1,0

Ukraine

1 765

1 968

-10,3

5 318

-3,4

50

50,2

236

-71,0

Moldova

Uzbekistan

75 e

C.I.S. (6)

8 260

8 803

-6,2

25 151

-0,6

Canada

1060 e

1 252

-15,3

3 277

-5,4

Cuba

15 e

17

-9,9

49

-7,5

El Salvador

10 e

8

25,7

29

15,3

Guatemala

20 e

23

-13,4

72

-3,4

Brazil

South America

South Africa

300 e

Africa

1005

1 296

-22,4

3 503

-8,6

Iran

2 250 e

1 973

14,1

6 750

13,2

Qatar

163

235

-30,5

572

-9,5

Saudi Arabia (1)

675

637

5,8

2 064

-2,2

UAE

264

212

25,0

857

6,4

3 352

3 056

9,7 10 243

7,7

78 975

80 341

-1,7 234 450

1,2

Middle East China India

8 650 e

10 042

-13,9

27 505

-5,3

Japan

8 200 e

9 084

-9,7

24 360

-2,4

South Korea

5 776

6 275

-7,9

16 936

-4,8

320 e

272

17,5

1 005

27,9

1 580 e

2 032

-22,2

4 870

-14,6

340 e

358

-5,1

1 068

8,9

1 847

1 784

3,5

4 956

-0,1

105 688

110 188

-4,1

315 151

-0,3

424

11,6

1 280

0,2

38

50

-23,8

132

-16,9

413

474

-12,9

1 412

-1,7

Pakistan Taiwan, China Thailand Vietnam Asia Australia New Zealand Oceania

375 e

Total 64 countries (2) 147 054

156 512

-6,0 4 43 030

-1,4

(1) - HADEED only. (2) - the 64 countries included in this table accounted for approximately 99% of total world crude steel production in 2018. e - estimated

www.skillings.net | 45

AMERICA

Greenland waives miners' 2020 licence fees The Greenland government recently announced it would waive mineral exploration license obligations and expenditures through to the end of the year, as part of emergency relief it is providing to the mining sector amid the Coronavirus pandemic.

T

he decision covers all companies with exclusive mineral exploration licenses in Greenland (including special exploration licenses) regardless of the license age and relates to expenditure obligations between January 1 and December 31, 2020.

With zero exploration obligations for the calendar year, the government aims to assist companies operating in Greenland to retain their projects in these challenging market conditions.

In addition to the approved zero obligations, the government is also considering two additional relief measures, the first being the postponement of administrative case handling expenses. The second initiative under consideration is to temporarily, partially or fully reimburse the 46 | SKILLINGS MINING REVIEW May 2020

funds held in escrow for environmental and clean-up monitoring. The decision on both actions is expected by April 19. One of the companies currently exploring in Greenland is Canada’s Hudson Resources (TSXV: HUD), which owns the White Mountain (Qaqortorsuaq) anorthosite mine as well as the niobium exploration license and Sarfartoq rare earth elements (REE).

ADVERTISING INDEX

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Hudson said it hopes to restart exploration activities at Sarfartoq later in 2020 with a focus on the high-grade niobium targets, but this will depend on the restrictions caused by the pandemic.

Minnesota Power....................... 13

At the White Mountain anorthosite mine, which is permitted for 50 years, limited activities are ongoing, but under strict controls with no travel allowed in or out of the site.

Northern Engine & Supply.......... 17

Mielke Electric Works................ 29 Naylor Pipe................................. 48 Neo Solutions............................. 11 Optiro.......................................... 02 SEH............................................. 23 Walcot water.............................. 13

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