Anglo's Coal Sale Presents Generational Opportunity

Panama demands First Quantum drop arbitration before talks can commence

May 17, 2024

The Pre-Start

  • The Federal Court dismissed a case brought by ECCQ, concerning Narrabri’s stage 3 extension approvals, clearing the way for a final judgement that could extend the project life by 13 years to 2044 (WHC)

  • The mining lease for Jericho copper mine has been granted by the QLD resource minister, allowing small-scale surface work to commence (A1M)

  • Alkane Resources has restructured its debt facility, increasing it to $60m expiring in June 2027, with no additional hedging (ALK)

  • Poseidon recommence lithium exploration at Lake Johnston after the sale process fell over with Min Res (POS)

  • Jan Joubert has been voted onto the board at Sierra Rutile following the AGM, while PRM nominee Wara Serry-Kamal didn’t make it (SRX)

SRX AGM voting results

SRX AGM voting results

High Grade It

  • BHP & Anglo’s jousting has created a generational opportunity for buyers looking for Bowen Basin coal exposure (The Australian)

  • WA has slipped to 4th in the Fraser Institutes ranking of attraction mining jurisdiction on the back of policy concerns (The West)

  • Lobbying from miners to get the Coalition to reverse its opposition to tax breaks for critical minerals has fallen on deaf ears, with Peter Dutton making the policy key to his budget attacks (The West)

  • Collie’s one step closer to construction on a $400m steel mill, which expects to create jobs & help the region transition from coal (BN)

  • $230m market cap Peninsula Energy launched a $106m raising to help get its Wyoming uranium project back on track (The West)

  • Anglo wants to sell its five Australian met coal assets to one buyer while keeping a small Australian technical team (AFR)

  • Nickel miner PT Vale Indonesia received a special mining permit extension to 2035, ending months of uncertainty and seeing the government become 34% shareholders (Bloomberg)

  • Saudi state-back Manara Minerals has picked former AngloGold Ashanti boss Pierre Chenard to head its new metals vehicle

  • Gold prices hovered near one-month highs as signs of inflation stabilising in the US increased the likelihood of rate cuts (Reuters)

  • Europe’s aluminium output is recovering as energy prices fall. French & German smelters should reach full production this year (Bloomberg)

  • Panama’s new president has ruled out First Quantum talks until it drops multiple arbitration proceedings seeking compensation (Mining.com)

  • A massive dislocation between copper prices traded in NY and other exchanges has rocked the market and prompted a frantic dash for supplies to ship to the US (Mining.com)

Wheelin’ n Dealin’

  • The Australian suggested Santos will restart a sale process on Dorado, indicating it’ll target reducing its stake from 80% to 60%

  • JP Morgan is doing the round to help sell Carnarvon Energy entirely, or its assets, pitching the opportunity to consolidate a larger stake while Santos sells down its stake (AFR)

  • Asian developer Atlantic Gulf & Pacific has approached Australia’s largest energy companies for a JV or supply pact as it runs the ruler over a deal to buy gas import proponent Venice Energy (The Australian)

Rattlin’ the Tin

  • EQ Resources is in a trading halt to raise cash (EQR)

Word on the Decline

  • WORK WITH ME HERE

  • In the second half of the decade, Honda plans to further expand its battery business by building a vertically-integrated supply chain (electrek)

  • POSCO is already building a battery cathode facility in Quebec (reuters)

  • Is this why PMET cut ties with Albemarle, as a POSCO/Honda tie-up post-2028 is more likely?

  • Ken Brinsden had the POSCO JV in his Pilbara Minerals days, so there is already a relationship.

Honda’s proposed vertically integrated supply chain

  • Venturing back to Australia, as part of the state government of Queensland’s Battery Industry Strategy, there is $80 million signposted to go towards an ‘industry grant program’. Word on the Decline is that copper companies of all sizes may be on the receiving end of some of that money. Let’s hope it gets allocated effectively.

In the Weeds

  • The IEA lowered its oil demand growth projections for 2024 following a slow start to 2024, forecasting 1.1m barrels a day in growth (WSJ)

  • Honda is plotting a US$65b EV investment to create 7 new models in an attempt to compete with BYD and Tesla (Electrek)

  • Outlook for higher electricity demand is lifting share prices to new heights for US-based Vistra, NRG and Constellation (WSJ)

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Today’s Top Tweet

Devil’s in the Detail

Peninsula Energy must be the only uranium developer to have had woeful share price performance in this uranium bull market. Ever since UEC pulled its agreement leaving Peninsula with an unexpected funding gap, they have been ‘cum raise’. Yesterday’s monster capital raising apparently sees the company “fully funded” and we wonder if their run of bad lack might be over. They’ve got some catching up to do!

Relative U performance

Relative share price of ASX uranium developers, last two years

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