Resource Mining Corporation acquires highly prospective nickel and lithium tenements in Finland

“We are already in early-stage discussions with potential strategic partners for the development of these projects and I look forward to completing this acquisition and finalising those negotiations which will add significant further value to our shareholders”, said executive chair Asimwe Kabunga.

Resource Mining Corporation Ltd (ASX:RMI) has executed a binding term sheet to acquire Element92 Pte Ltd, the owner of three projects in Finland: the Ruossakero Nickel Project in Northern Finland, the Kola Lithium Project in Central Finland, and the Hirvikallio Lithium Project in Southern Finland.

The company completed extensive due diligence activities on the target projects, including acquiring a large volume of historical data on the projects and the commissioning of an external review by Skapto.

Resource Mining Corporation’s executive chair and consultants then confirmed the review’s findings with a site visit that generated new prospective lithium targets on the tenure.

RMI negotiated all-scrip acquisition terms to the tune of 40 million RMI shares at $0.10 per share. The agreement is now subject to execution of formal documentation.

Search begins for strategic partners

“We are excited to have secured agreement to acquire this portfolio of highly prospective nickel and lithium projects in Finland following an extensive due diligence process”, Resource Mining Corporation executive chair Asimwe Kabunga said.

“We are already in early-stage discussions with potential strategic partners for the development of these projects and I look forward to completing this acquisition and finalising those negotiations which will add significant further value to our shareholders.”

The projects sit near other companies’ lithium projects, and are host to historical mines and known lithium pegmatite occurrences, giving RMI confidence in the tenements’ prospectivity, Proactive Investors reports.

Serbia, New energy and mining minister pushes Rio Tinto lithium project forward

Lithium mining projects around Europe

Europe is desperate to increase its domestic supply of lithium, though only a limited number of projects are capable of achieving production in the coming years, Jack Bedder of Project Blue told the Investing News Network.

For Bedder, Europe will have to innovate to significantly reduce its reliance on imported lithium feedstock. “Europe’s ability to ‘win’ the battle for lithium self-sufficiency remains hinged on technological breakthroughs, along with the creation of a supporting framework in which new mining and processing facilities can operate in a globally competitive industry”, he said.

Even though Europe’s lithium supply is quite limited, there are a few companies exploring and developing lithium projects in the region, with the aim of supplying the electric vehicle industry. Here’s a brief overview of some of them listed in alphabetical order.

European Lithium

Serbia, Entire country needs to be blocked if Rio Tinto continues its lithium project

Member of parliament Aleksandar Jovanović Ćuta from the Together party accused the government that it sold Serbia’s natural resources to foreigners and called on environmentalist organizations and the population to revolt against mining projects. “We will not let that happen peacefully,” he stressed and threatened that the central Gazela bridge in Belgrade would be blocked together with the entire country if Rio Tinto continues with its lithium project.

The new Government of Serbia is facing discontent among environmental activists and the local population about mining projects just like the former cabinet of Prime Minister Ana Brnabić, but the difference is that now they also have representatives in the National Assembly. Head of the parliamentary Environmental Protection Committee and copresident of the Together (Zajedno) party Aleksandar Jovanović Ćuta said the committee’s next meeting would be held in Loznica.

Rio Tinto is still working on its project for lithium mining and processing in the area in western Serbia even though the government formally halted it in January.

The National Assembly still didn’t fulfill its legal obligation to schedule a debate on the people’s initiative to permanently ban lithium exploration and exploitation, Jovanović pointed out

Ahead of the vote on the appointment of the new government, Jovanović called other lawmakers and ministers to also come to the meeting and explain why the company still has an office in the village of Gornje Nedeljice in the territory of the city of Loznica. Furthermore, he pointed out that the National Assembly still didn’t fulfill its legal obligation to schedule a debate on the so-called people’s initiative to permanently ban lithium exploration and exploitation. The petition was signed by 40,000 people, said the top official from the green left Together party.

Jovanović, one of the leaders of protests held in the past two years against Rio Tinto’s Jadar project, accused the government that it is working for foreign interests. “Serbia is an ecological time bomb. You gave the Russians our gas and oil. To the Chinese you gave our copper and gold. Now another predator needs to be appeased, and its name is Rio Tinto. There are more than 50 mines in the new spatial plan”, he stated.

Moreover, exploration was approved for 70 potential gold mines and more than 60 lithium mines, Jovanović asserted.

Serbia is an ecological time bomb, the head of the parliamentary Environmental Protection Committee warned

“That is 15% of our territory. Well, do you think we will peacefully watch how your foreign pals plunder our gold, our lithium and our natural resources? And you plan to let peasants become environmental refugees. I am calling on all environmentalist organizations, all citizens. There is a keyword for 2022, namely revolt. We will not let that happen peacefully”, he threatened. Jovanović claimed that the Gazela bridge on the highway in central Belgrade would be blocked again, together with entire Serbia, if Rio Tinto continues with its project, Balkan Green Energy News reports.

Europe is looking to enter the race for lithium

Lithium is the essential resource for developing a sustainable electric vehicle industry in Europe. Until now, this resource has mainly been produced in Australia, Chile, and China. Europe is looking to enter the race for this white gold and is betting on several deposits in its soil. We’ve put together a list below of the 6 main European mines that will be exploited in the coming years.

Lithium is a white powder that is essential for the manufacture of electric car batteries. In 2021, according to the US Geological Survey (USGS), global production is close to 100,000 metric tons, a figure 20% higher than in 2020. Global consumption in 2021 is estimated to be 93,000 metric tons. This is due to strong growth in global demand, particularly because of the accelerated production of EV batteries required for the energy transition.

This alkaline metal allows electrons to flow between a positive and a negative electrode, both of which are immersed in an ionic conducting liquid (the electrolyte).

When a lithium-ion battery is used, for example to power an electric car, the electrons accumulated in the negative electrode are released and reach the positive electrode. The opposite happens when the battery is being charged. Without lithium, batteries could not power a device and then recharge.

There are two types of lithium that can be used in batteries: lithium carbonate and lithium hydroxide. Currently, the demand for lithium hydroxide for batteries is increasing and could exceed the demand for lithium carbonate by 2030. Lithium hydroxide is currently priced at around US$35,000 a metric ton. Lithium carbonate is around US$ 59,900 a metric ton.

The problem with this precious metal is that it is found in a few places on earth. The main producers are Australia (55%), Chile (26%), China (14%), and Argentina (6%). China is the leading lithium refiner.

Reducing Europe’s Dependence

This means that Europe has no choice today but to import almost all the lithium it consumes. According to forecasts, at least 30 million zero-emission electric vehicles will be on the roads of the EU by 2030. Thermal vehicles will be banned in Europe in 2035. By 2030, Europe aims to produce 25% of the world’s batteries (compared to 3% in 2020) in its numerous production plants currently under construction.

The EU should therefore see its lithium consumption explode in the coming years. Some estimates predict a 20-fold increase between 2020 and 2030.

In a tweet, Ursula von der Leyen warned that Europe must get rid of its dependence on the outside world, especially China. She believes the continent must put in place an industrial strategy not only for lithium but for all the other rare earth elements found in batteries such as nickel, cobalt, or graphite.

Europe has already entered the race for the new white gold and is seeking to develop its own lithium mining industry. The USGS estimates probable European resources at 7% of the world total. The number of mining projects has increased in recent years in several European countries.

Here is a tour of Europe’s main projects and the companies behind them. These projects could eventually cover 80% of European battery needs.

1/ Portugal

The Barroso Project, Savannah Resources

Portugal has the largest reserve of lithium in Europe with around 60,000 metric tons of known reserves, according to the USGS. But until now, Portuguese lithium has mainly been used in the ceramics industry to make glassware. The country is just now entering the race for the new white gold.

British company Savannah Resources has ambitions to exploit the Barroso mine in the north of the country, which is rich in spodumene, a form of hard rock lithium.

According to Savannah Resources, the mine could contain 27 million metric tons of lithium, including over 285,900 metric tons of lithium oxide. According to the company, this is enough to meet the demand in Europe over the next few decades.

The group is waiting for the green light from the Portuguese authorities to start production as the project is facing strong local opposition. If opened in 2023, the Mina do Barroso open-pit mine will become the first major producer of lithium in Europe.

2/ Germany

The Vulcan Project, Vulcan Energy

Australian company Vulcan Energy is currently working on a pilot project in the Upper Rhine Valley in Germany. The idea is to produce “zero-carbon” green lithium by using geothermal energy to extract lithium-rich brine from the Upper Rhine. The final lithium hydroxide will then be created by electrolysis.

The company says they were able to produce 57.1% lithium hydroxide, surpassing the 56.5% battery grade specifications usually required.

The Vulcan pilot plant in Germany has been operating since April 2021 and is expected to launch commercial production in 2025.

3/ France

The EMILI Project, Imerys

French company Imerys recently announced that it will start mining a lithium deposit in the Massif Central (in the Allier department) in 2028.

Since the second half of the 19th century, the site has been home to a quarry producing 30,000 metric tons of kaolin per year for tile production.

According to Alessandro Dazza, CEO of Imerys, the deposit contains one million metric tons of lithium oxide. This would be enough to produce, according to the company, “34,000 metric tons of lithium hydroxide per year from 2028 over 25 years.” This would enable approximately 700,000 electric vehicles to be equipped with lithium-ion batteries.

4/ Czech Republic

The Cinovec Project, European Metals Holding

The Cinovec project, located 100 km from Prague in the Czech Republic, is being carried out by European Metals Holding. It aims to produce nearly 30,000 metric tons of battery-grade lithium per year over a period of 25 years.

According to European Metals’ 2022 pre-feasibility study, Cinovec has the potential to become the producer of the lowest-cost hard rock lithium in the world. The mine could produce at a cost of US$5,000 to US$6,000 per metric ton.

5/ Austria

The Wolfsberg Project, European Lithium

European Lithium is developing the Wolfsberg Project in Carinthia, 270 km south of Vienna, in Austria. Located in the heart of Europe, this mine project plans to extract 10,000 metric tons of lithium hydroxide per year.

According to the company, this will equip the batteries of approximately 200,000 electric vehicles. They hope to achieve an operating rate of 800,000 metric tons per year with a mine life of over ten years.

The company expects to begin production in 2025.

6/ Finland

The Keliber Project, Keliber Oy

Finnish company Keliber Oy, specializing in mining and battery chemicals, is currently running a project in western Finland with the objective of reaching the production of 15,000 metric tons of lithium hydroxide per year beginning in 2025.

The company is also aiming for sustainable production. The lithium they plan to extract will, they say, have a smaller carbon footprint than the competition. This is because the refinery plant is located 70 km from the mine. In addition to this, more than half of the electricity in the Finnish national grid is generated from renewable energy sources. As a result, the refining process will be more environmentally friendly.

The Finnish potential has attracted the attention of investors. South African mining giant Sibanye-Stillwater intends to acquire a majority stake in Keliber Oy.

Future Challenges

The enthusiasm for lithium mining in Europe is not unanimous, however. In Serbia, the Anglo-Australian company Rio Tinto stopped its project in the southwest of the country due to local opposition.

In the future, the most important challenge for Europe will be to find ways to accommodate mining projects and environmental and social standards. As can be seen, the European lithium extraction projects that are listed above will not be operational until 2025. But the demand for gigafactories is already here. Swedish company Northvolt has already opened Europe’s first battery gigafactory, Direct Industry writes.

Lithium mines are not Serbia’s potential

The Alliance of Environmental Organizations of Serbia (SEOS), reacting to the statement of the Minister of Mining and Energy, Dubravka Đedović, that she will consider how to implement the exploitation of lithium, assessed that with the first advertisement, she made it clear why she came to that position, the non-governmental organization announced.

Didn’t anyone instruct the new minister when he offered her to sit in a chair from the white world, that she should work in that position in the interest of the people and the state? Understandably, none of the colleagues could take on that duty, because they would probably choke in the middle of a sentence, SEOS points out.

That association tells the minister that lithium mines are not Serbia’s potential, neither in the economic sense nor in any other sense.

And the fact that our non-renewable mineral in the non-renewable land that feeds us is essential to the world’s renewable energy sources is not our concern. We don’t want green pastures and bills for white world starched shirts to go over our hump, states the SEOS press release, Danas reports.

Kazakhstan has large lithium reserves

At today’s meeting in Zhetysu region the Head of State said that Kazakhstan has large lithium reserves by various estimates ranging from 50 to 100,000 tons, the Telegram Channel of the President’s press service reports.

The country’s geological service should speed up its activities in this direction as development and exploration require large investments.

The region has good industrial growth dynamics. Since the start of the year 23 facilities were put into service. The President highlighted modernization and launch of the high-quality silicon production plant Kazsilicon which stood idle for a few years and construction of the plant for the direct reduction of iron. Both plants are of great importance for Kazakhstan and are called to develop and spread advanced mining industry technologies.

Notably, the region built an investment portfolio until 2026 including 162 projects. As a result more than 7,000 jobs will be generated there, Inform writes.

The Rio Tinto Company has not left Serbia

The Rio Tinto Company has not left Serbia and, judging by environmental associations in the country, has not stopped its lithium exploitation project in the Jadar Valley, even though the government’s decree from 20th January was supposed to put an end to the company’s lithium exploration.

According to Zlatko Kokanović, a resident of Gornje Nedeljice, Rio Tinto has not given up on lithium in Serbia and has no intention of giving up.

“Twenty days ago they bought a house that is not in the mining area but along the motorway route. Their activities were supposed to be stopped by the government decree from 20 January, but the only thing that has been done is the conversion of land from residential to agricultural use again,” emphasises Kokanović from the Ne Damo Jadar Association.

He says that on 10 August, the municipal administration issued 45 decrees stipulating the demolition of dilapidated houses and that the Association and the public were only informed about it at the beginning of October.

“We asked the municipal administration to see the decree and all the planning documents, so we can inspect them and determine who authorised the demolition without a building permit, but also to tell us where the waste will be disposed of”, Kokanović notes.

The local administration responded that they intend to dispose of the waste on their farmland, which, as he says, cannot be used as a landfill site.

“The inspection did not do its job and we sent a letter to the Ministry of Agriculture to do something about it as there are many agricultural plots devastated and not used for the intended purpose,” he notes.

Kokanović adds that he is waiting for an answer and expects the new Serbian government to adopt a proposal for a permanent ban on the exploitation and processing of minerals containing lithium and boron on the territory of the whole of Serbia.

“Only then will the project be finished. When the new government is formed, we will again send a letter in which we are urging for Rio Tinto to leave the country and demanding that no other such company be allowed to operate here’, Kokanović underlines, Serbian Monitor writes.

Rio Tinto’s Serbian saga offers a lesson in critical minerals

The failure of the Jadar Project in Serbia should be viewed as an opportunity for all role-players to recalibrate their processes in line with ESG principles

The northern hemisphere’s summer of 2022 will be remembered as one of the hottest in recorded history. For example, Nasa reported that June was one of the hottest Junes on record. The UK, in turn, experienced record temperatures in July.

On May 14, the city of Jacobabad, Pakistan, became the hottest city on Earth, when temperatures peaked at 51ºC. Contemporaneously other parts of the world suffered devastating climate change-related fires (such as those that blazed across France) or floods (including the August 8 large-scale floods in Seoul).

These events provide an unfortunate prelude to the Sharm el-Sheikh Climate Change Conference scheduled for November (better known as COP27), which is now less than three months away. While it remains critical for governments across the world to remain committed to the undertakings provided under the Paris Agreement, words without actions are of little value to those who are being (or will soon be) affected by increasingly severe weather events.

The single most important impediment to this growth trajectory, according to a July 2022 report by the International Energy Agency (IEA), is the supply of critical minerals and metals used in the manufacture of batteries. According to the IEA, battery and minerals supply chains will have to expand tenfold to meet government electric vehicle (EV) ambitions.

Following the increased demand for battery metals during the pandemic the prices of raw materials such as cobalt, lithium and nickel surged. In May lithium prices were more than seven times higher than in early 2021 owing to unprecedented battery demand and a lack of sufficient investment in new supply capacity.

The demand for key minerals such as lithium will only increase as the global community continues to race towards net zero by 2050. Whether or not we will succeed depends on access to the required minerals.

Controversial Jadar Project lithium mine

On April 3 Aleksandar Vučić was re-elected for a second term as president of Serbia, with the coalition formed around his party, SNS, winning the most seats in the National Assembly, albeit falling short of an outright majority. Vučić’s re-election followed the widely publicised January 20 cancellation of what became known as the controversial Jadar Project, the proposed development by Rio Tinto of a $2.4bn lithium mine in Serbia.

While the government’s actions raised new questions surrounding the future of the lithium mining industry in Serbia, in the light of the IEA’s recent report it also poses existential questions for global supply chains.

The cancellation of the Jadar Project followed months of countrywide protests over the potential environmental impact of the project. The affair gave rise to intense speculation over the introduction of a possible blanket ban on lithium mining in Serbia; president Vučić’s previous administration had promised to defer such a decision until after the election.

The introduction of such a ban would prove to be a mistake. The mineral deposits at the heart of the Jadar Project are located underneath a river system in an agricultural area that is prone to flooding, giving rise to a material environmental risk. The Serbian government did not have a direct stake in the proposed lithium mine and so could not justify the project on the basis that it would fill public coffers. The government consequently did not believe it could do what governments elsewhere do when they have a fair deal: politically and publicly defend it.

The Serbian government had hoped to use the project as a basis to attract further investment across the batteries sector, including the manufacturing of batteries and battery-reliant products, such as EVs. However, the government was unable to present to the public concrete assurances that the project would lead to the creation of more than a small number of relatively low-skill mining jobs. As a result there was a widespread sentiment among the Serbian public that the main beneficiaries of the Jadar Project would be European carmakers and consumers, who would benefit from Serbia’s cheaper labour costs at the expense of the Serbian environment.

By December 2021 thousands of people across the country had began protesting, and the matter quickly became the leading electoral issue in the build-up to the general election on April 3 2022. As a result, on January 20 the government announced that it was revoking all of Rio Tinto’s permits relating to the project, with the promise that it would consider introducing an outright ban on lithium mining following the general election.

Although the Jadar Project was ostensibly cancelled over concerns regarding the potential of environmental damage, it is important to note that Rio Tinto had complied with all applicable local laws. The project was cancelled prior to the completion of a final environmental impact assessment, as mandated by Serbian law, meaning the public furore over the potential environmental damage was not supported by a comprehensive scientific assessment.

The failure of the Jadar Project is therefore an important example of a mining project being cancelled owing to reaching a critical level of opposition from the public, also referred to as a loss of the “societal licence” to operate that may not have existed in the first place.

Managing the ‘S’ in ESG

The episode illustrates the reality that public acceptance is the currency on which mining companies trade. Such acceptance of a mining company can make or break a project, including one with strong central government backing. Accordingly, mining companies must be sensitive to the fact that globally the sector is often not trusted by communities for a variety of reasons (often outside the control of the companies themselves).

Companies must become better at convincing communities, authorities and the public that they can be trusted because they have a well developed understanding of the social risk factors that are most relevant to each individual project, rather than adopting an unchanging, one-size-fits all approach. The lack of a social impact assessment in Jadar (with an integrated human rights impact assessment), in line with industry best practice (though not required by Serbian law) proved fatal in this regard.

At the same time, the failure of the Jadar Project cannot rest on Rio alone. Jadar’s host government partner, the previous Vučić administration, expended political capital in promoting and advocating for the project until the affair became a serious electoral risk. The public was not persuaded by arguments that the project had been conducted in accordance with the applicable regulatory regime, largely because the regulatory regime itself simply was not aligned with the public’s evolving expectations. Governments, as well as mining companies, should be mindful of the fact that public-interest projects are always subject to scrutiny under the evolving criteria of societal expectations.

This is not in itself a new concept; it is simply the case that the public expectations on mining companies are increasingly becoming much more demanding than the legal requirements imposed by national regulatory regimes. The episode should be seen as a timely reminder for national regulators and mining companies should recalibrate their processes to be founded in environmental, social and governance (ESG) principles. Moreover, if governments and national regulators wish to remain the final decisionmakers over which mining projects are deemed to be in the public interest, they must ensure that the legal and regulatory regimes in place reflect the evolving expectations of the public in each stage of the development and operation of a mine such as Jadar.

The role of international financial institutions should likewise not be overlooked in this regard. Although they did not feature prominently in the Jadar Project, similar projects in developing countries are often financed (at least in part) by large international financial institutions such as the World Bank’s International Finance Corporation or the US Development Finance Corporation. In view of the importance placed by stakeholders on the reputation of mining companies, the backing of those international financial institutions is often used to buttress the credentials of sensitive projects.

Where this is the case the relevant international financial institutions are well placed to guide, through their well-developed performance standards, both mining companies and governments in navigating the challenges associated with obtaining and maintaining a project’s societal licence. This may include, where appropriate, making the availability of financing conditional on the relevant mining company satisfying certain ESG-linked criteria.

History is the best teacher

It is clear that the failure of the Jadar Project has exposed a breakdown in public trust and fault lines between the expectations of mining companies, governments and the wider public. However, extractive resources which are associated with “green” industries, such as lithium, present a unique opportunity to combine economic development with the advancement of the transition to low-carbon energy sources. Despite the associated challenges, entirely foregoing the extraction of such resources would be a mistake which is likely to have worse environmental consequences in the long run.

Accordingly, rather than resulting in a ban on lithium extraction, the failure of the Jadar Project should be viewed as an opportunity for investors, governments and international financial institutions to recalibrate their processes in line with ESG principles, to facilitate the sustainable growth of the mining sector. To achieve this a delicate balance must be struck between the ability of companies to turn a profit and the need to promote sustainable economic development and combat the effects of climate change in line with societal expectations and the concerns of the broader citizenry, Business Live writes.

Portugal will not commit to setting a new date for a long-awaited auction of lithium mining licences

Portugal will not commit to setting a new date for a long-awaited auction of lithium mining licences as it awaits the conclusion of ongoing environmental impact studies at two sites, Energy Secretary Joao Galamba said on Wednesday.

The southern European nation, which has 60,000 tonnes of known lithium reserves, is central to Europe’s bid to secure more of the battery value chain and cut reliance on imports.

Concerns about the potential environmental and social impact of lithium mining from nature preservation groups and local communities have led to multiple delays to the auction, initially planned for 2018.

Galamba told a parliamentary committee that the “government understands that the international auction will benefit from the conclusion of these processes”.

“It doesn’t make much sense to launch an international public auction, when simultaneously these environmental assessment processes are underway” at the Barroso mine and the Montalegre mine, in northern Portugal, he said.

The Barroso mine is owned by London-based mining company Savannah Resources (SAVS.L) and the Montalegre mine is owned by local company Lusorecursos.

Savannah said in a statement earlier on Wednesday it had “very useful and productive” meetings with Portugal’s environmental agency APA. As a result, it has until March 17 to submit its revised plans to the regulator.

However, APA does not have a deadline to decide on the evaluation process, which could be interrupted if it asks for more data or clarification.

The environment ministry, to which Galamba’s department belongs, has said the assessment conducted by the energy and geology agency analysed eight lithium-rich areas in central and northern Portugal, concluding “there were conditions to move forward in six of them”.

Portugal is Europe’s biggest lithium producer but its miners sell almost exclusively to the ceramics industry and are only now preparing to produce the higher-grade lithium that is in demand globally for use in electric cars and electronic devices, Reuters writes.