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15 May 2024

Australia commits A$7bn to tax incentive for critical minerals processing

The Australian Government has announced a Critical Minerals Production Tax Incentive, committing A$7bn over the decade to bolster the processing of critical minerals.

This move is aimed at enhancing supply chain resilience and supporting the downstream refining of 31 identified critical minerals including lithium, cobalt, nickel and rare earths. The incentive includes a 10% refundable tax offset for eligible costs associated with processing these minerals domestically.

According to the Association of Mining and Exploration Companies (AMEC), the initiative holds the potential to catalyse industry growth and value addition. AMEC has been instrumental in shaping this proposal through collaboration with the Minister for Resources and Minister for Northern Australia Madeleine King.

AMEC CEO Warren Pearce said: “This announcement from the Treasurer demonstrates how serious the government is about the energy transition and decarbonising the Australian economy. A Critical Minerals Production Tax Incentive is the cornerstone of the ‘Future Made in Australia’ strategy and sends a clear message to Australians and the world that Australia means business.”

The government’s A$22.7bn Future Made in Australia package ensures Australia can secure investment required for critical minerals projects, make the country a renewable energy superpower, and secure jobs and opportunities.

6 May 2024

Brazil rejects $25bn Mariana disaster settlement offer from Vale, BHP

Brazil’s federal government and the state of Espirito Santo have reportedly turned down a $25.03bn settlement proposal from mining giants Vale and BHP for the 2015 Mariana tailings dam collapse. The offer, which included $9.2bn already disbursed, was deemed insufficient and laden with “inadmissible conditions” by the office of Brazil’s solicitor general, reported Reuters.

The dam collapse at the Samarco iron ore mine, a joint venture between Vale and BHP, unleashed a deluge of mud and mining waste, claiming 19 lives, displacing hundreds, and causing extensive environmental damage to the Doce River in Minas Gerais state.

Despite the proposal’s increase in funds allocated to federal and state governments, it suggested a significant reduction in the companies’ previously agreed obligations. Notably, the plan implied a drastic cutback in the removal of mining tailings from the Doce River, with the government suggesting it bordered on a scenario of no removal at all.

While the federal government and Espirito Santo have expressed firm opposition, the Minas Gerais government has adopted a different stance. Minas Gerais Secretary for Planning and Management Luisa Barreto was cited by Reuters as saying that the state intends to continue negotiations over the current proposal.

In response to the rejection, BHP reaffirmed its commitment to fair reparation and compensation measures while Vale emphasised its dedication to reaching a fair and comprehensive repair agreement.

9 May 2024

Australia invests A$566m to map mineral deposits, energy sources

The Australian Government has committed A$566.1m ($365.8m) to identify new mineral deposits and energy sources, a move aimed at bolstering the nation’s future economic and industrial growth. This investment is part of a broader focus on resources in the upcoming Budget, with the objective of fully mapping Australia’s resources over the next ten years, starting in 2024–25.

Australia Prime Minister Anthony Albanese said: “There is no nation on Earth better placed than Australia to achieve our goal of moving toward a clean energy future. This investment highlights my government’s commitment to building a secure and sustainable future for all Australians. By investing significantly in geoscience, we can boost our progress towards net zero.”

The initiative, led by Geoscience Australia, will deploy the country’s leading geoscientists to comprehensively chart Australia’s resources, supporting the government’s Future Made in Australia policy. This long-term investment is designed to generate data, maps and tools that will guide new discoveries and sustain the economy, while also creating secure jobs for the current and future workforce.

According to Geoscience Australia, the precompetitive data programme has already facilitated significant discoveries including critical minerals and rare earths essential for clean energy technologies and achieving net-zero emissions.

9 May 2024

Standard Lithium partners with Equinor on sustainable lithium extraction

Standard Lithium has announced a strategic partnership with Equinor, which will see an investment of up to $160m to advance sustainable lithium projects in Arkansas, US.

This collaboration aims to leverage Standard Lithium’s DLE expertise and Equinor’s project execution capabilities. It will combine Standard Lithium’s proprietary DLE process with Equinor’s experience in subsurface assessment and production. This alliance is expected to significantly mitigate project execution risks, particularly in the development phase at the south-west Arkansas site.

Equinor senior vice-president for new business and investments in technology, digital and innovation, Morten Halleraker, said: “With Standard Lithium as operator and by building on Equinor’s core competencies such as subsurface and project execution capabilities, we believe that more sustainably produced lithium has growth potential and will be an enabler for the energy transition.”

Under the agreement, Equinor will invest up to $160m, securing a 45% stake in Standard Lithium’s projects in south-west Arkansas and east Texas projects. The investment includes a $30m cash payment to Standard Lithium at closing and a $60m work programme funded by Equinor. This programme includes a $33m carry for Standard Lithium’s portion and $27m for Equinor’s share in the projects. Upon positive final investment decisions by both parties, Standard Lithium could receive up to $70m in additional payments.

16 May 2024

PT Vale Indonesia secures permit extension until 2035

Vale’s Indonesian unit, PT Vale Indonesia, has been granted an extension of its IUPK, ensuring operations until 28 December 2035.  The IUPK provides PT Vale with legal certainty to continue its operations within the concession area and supports the company’s growth strategy.

Under the terms of the IUPK, PT Vale is required to complete the construction of new processing and refining facilities including downstream developments within a specified timeline. These projects must comply with existing laws, feasibility studies and the company’s commitment to good mining practices and environmental, social, and governance standards.

With the IUPK, PT Vale is now obliged to share 10% of its net income with the Indonesian Government as profit sharing. The IUPK’s validity extends beyond the original contract of work expiration date of 28 December 2025, covering an additional ten-year extension period.

This extension forms part of an agreement where Indonesia’s mining industry holding company Mining Industry Indonesia acquires an additional 14% stake in Vale Indonesia from Vale SA and Sumitomo Metal Mining.

This deal, which was announced earlier this year, will result in the Indonesian Government becoming the company’s largest shareholder with a 34% ownership stake.