Rio Tinto Reviewing 'All Options' for PNG Project
Mining behemoth Rio Tinto (LSE:RIO) (NYSE:RIO) is considering all options following a devastating new law at its Bougainville copper mine in Papua New Guinea.
The new bill, which was approved on Friday, revokes Rio Tinto’s seven exploration licenses and special mining lease at the Panguna mine. The company announced it will review all viable options and opportunities going forward.
"Rio Tinto has decided now is an appropriate time to review all options for its 53.83 percent stake in Bouganville Copper," the company said in a statement.
According to Bougainville Copper managing director Peter Taylor, the company has not ruled out legal action but did confirm pulling the cord on the project was not an option. As for plan b, the government of Bougainville has a keen interest in re-opening the mine for economical reasons.
"For some time, Bougainville Copper has been involved in discussions with the Government of Papua New Guinea, the Autonomous Bougainville Government and landowners about whether it would participate in a future potential return to mining at Panguna,” Rio Tinto said.
The mine (which has been closed for over 25 years) was a major contributing factor in the country’s bloodiest civil war. The open-pit mine drew ire for causing environmental and social problems among the community.
The Bougainville Mining (Transitional Arrangements) Bill 2014 essentially negates Rio Tinto’s subsidiary Bougainville Copper from mining the Panguna mine. It also gives more power to local landowners.
British Lithium Pressured Due To Calls for Electric Cars
The British demand for lithium is set to reach 75,000 tonnes by 2035 as the government works towards their ban on the sale of high-polluting diesel and petrol vehicles within the UK. This comes as automakers worldwide continue to insist on the benefits electric vehicles will have on slowing the rate of climate change.
It is estimated that the UK will require 50,000-60,000 MT of lithium carbonate a year by 2035 for battery production to satisfy government needs. This is assuming production remains at 1.2 million vehicles per year, and the amount of lithium required does not increase.
British Lithium, which hopes to begin constructing a quarry to produce 20,000 MT of lithium carbonate a year in a $400 million investment, are not without competitors, both within the UK and abroad.
Competition For Lithium Rises In Europe
After only five years after its initial launch, Cornish Lithium is setting its sights on becoming a UK powerhouse in mining lithium, aiming to begin commercial production in under four years. Jeremy Wrathall, a former investment banker and current managing director of Cornish Lithium, had the future in mind when founding the company.
“In 2016, I started to think about the electric vehicle revolution and what that would mean for metal demand, and I started to think about lithium,” he said in an interview with AFP. “A friend of mine mentioned lithium being identified in Cornwall, and I just wondered if that was a sort of unrecognised thing in the UK.”
Lithium was first discovered in Cornwall around 1864 and has not been mined again since 1914 when it was produced as an ingredient in fireworks. Now, however, Cornish Lithium is reportedly in the testing stage to see if the metal can be produced commercially to meet the growing demand required for the electric car sector.
Despite Cornwall’s close historic ties to mining lithium, Wrathall insists that the project is purely commercial.
Cornish Mining Revival For Lithium Production
“It’s not a mission that drives me to the point of being emotional or romantic,” he says. “It’s vitally important that we do get this technology otherwise Europe has got no lithium supply.”
The European Commission has also stated their goal to end the sale of new petrol and diesel cars by 2035 to aid the environment. That being said, the majority of lithium extraction currently relies on power provided by environmentally damaging fossil fuels─a slight contradiction.
Alex Keynes, from the Brussels-based lobby group Transport & Environment, is adamant that mining for lithium should be done sustainably.
“Our view is that medium-to-long term, the majority of materials including lithium should come from efficient and clean recycling.
“Europe from a strategic point of view should be looking at securing its own supply of lithium.”
Despite growing competition from abroad, British Lithium Chairman, Roderick Smith, continues to place importance on the mining of lithium within the UK.
“Imagine what the UK economy would look like if we lost our automotive industry,” Smith says. “The stakes are high for the UK.”
Smith expects the UK to compete with other European countries to secure a lithium battery plant in the near future.