May 17, 2020

Weak prices force Teck Resources to temporarily close six Canadian coal mines

Teck Resources
mine sites
2 min
Weak prices causes Teck Resources to temporarily close six Canadian coal mines
Frail market conditions continue to wreak havoc on the mining industry as Teck Resources Ltd announced it will temporarily shut down six of its Canadian...

Frail market conditions continue to wreak havoc on the mining industry as Teck Resources Ltd announced it will temporarily shut down six of its Canadian coal mines.

The Vancouver-based miner said the suspensions would last three weeks and be staggered over the summer months – July, August and September -- with additional production adjustments being considered as market conditions evolve. The decision could have ripple effects in other sectors of the Canadian economy.

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“Rather than push incremental tons into an oversupplied market, we are taking a disciplined approach to managing our mine production in line with market conditions,” Don Lindsay, Teck’s chief executive officer, said in a statement.

"We will continue to focus on reducing costs and improving efficiency to ensure our mines are cash positive throughout the cycle and well-positioned when markets improve.”

The suspension will include five mines in British Columbia and one mine in Alberta.

Teck has already reduced its dividend, cut 600 jobs and deferred plans to restart one of its mines in B.C.  The suspension will also cut roughly 20 percent (1.5 million tons) from Teck’s quarterly production. The company said it could cut further production this year.

“While Teck’s move to lower production is a good start … the cut in and of itself is still only a drop in the bucket. More cuts are needed, in our view,” TD analyst Greg Barnes said in a research note.

Despite closing six coal mines, analysts still believe Teck Resources is a great pick for long-term oriented investors.

The shutdown will force Teck to reduce its annual production by six percent, from 26.5 million-27.5 million to 25 million-26 million. However, this cut could go a long way towards balancing the metallurgical coal market as 1.5 million tons of productions, which is roughly 10 percent of the supply glut.

According to Seeking Alpha, the production cuts could work out well for Teck as the higher prices of copper and zinc prices could offset the negative impact coming from the prolonged weakness in coal prices. 

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Jul 20, 2021

British Lithium Pressured Due To Calls for Electric Cars

3 min
The ever-increasing need for electric vehicles is mounting pressure on British Lithium as the 2035 deadline inches closer

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.

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