EU Selects 13 Strategic Raw Material Projects Outside the Bloc

EU strategic raw material projects

EU Seeks to Diversify Critical Mineral Supply Chains

The European Commission has approved 13 strategic raw material projects outside the European Union, estimating a total capital investment of €5.5bn ($6.26bn) to bring them online. Chosen from 49 applications, these projects span Brazil, Canada, Greenland, Kazakhstan, Madagascar, Malawi, New Caledonia, Norway, Serbia, South Africa, the UK, Ukraine, and Zambia. Under the 2024 EU Raw Materials Act, the bloc aims by 2030 to domestically extract 10pc, process 40pc, and recycle 25pc of 17 strategic raw materials. Additionally, no single third country should supply more than 65pc of annual EU consumption.

Targeting Lithium, Nickel, Cobalt, Manganese, and Rare Earths

Ten of the approved projects focus on lithium, nickel, cobalt, manganese, and graphite, while two — Songwe Hill in Malawi and Zandkopsdrift in South Africa — will extract rare earth elements. Other notable initiatives include Rio Tinto’s Jadar lithium and boron project in Serbia, the Integrated Dumont Nickel Project in Canada, Kobaloni Energy’s cobalt processing in Zambia, and Balakhivka Graphite Deposit in Ukraine. The EU will provide coordinated support, including facilitating finance and connecting projects with potential off-takers. Industrial commissioner Stephane Sejourne emphasised that diversifying away from dependency on countries like China is critical, given current reliance levels exceeding 100pc in some refining and recycling segments.

The Metalnomist Commentary

The EU’s latest selections mark a significant expansion of its global strategic raw material network, signalling an urgent push to secure supplies ahead of the 2030 targets. While the €5.5bn investment is substantial, long-term success will depend on execution speed, environmental considerations, and stable geopolitical relations with host nations.

Velta Secures $2M Loan from Traxys to Restart Titanium Production

Velta Titanium Mining

Financing Enables Modernisation of Ukraine’s Birzulivske Ilmenite Deposit

Velta secures $2M loan from Traxys to carry out capital repairs and restart production at its Birzulivske titanium deposit in Ukraine. The Luxembourg-based trading company provided pre-export financing to help modernise Velta’s operations, which had paused from 2022 to 2024 due to the redirection of funds to wartime support efforts. The financing will enhance production efficiency and stability at the Kirovohrad-based site.

Velta’s CEO Andriy Brodsky confirmed that the company will use the funding to establish its own energy system. This will lower power costs and improve reliability for future operations. The Birzulivske deposit contains 3 million tonnes of ilmenite, making it a strategic source of titanium feedstock. Meanwhile, Velta is preparing to develop its second site, the Likarivske deposit, which contains an additional 2.6 million tonnes and is now in final design stages.

Traxys has a longstanding relationship with Velta. In 2020, the companies signed a five-year, $100 million titanium supply agreement that was fully executed. Traxys supplies titanium raw materials to titanium dioxide producers in North America. Therefore, the fact that Velta secures $2M loan from Traxys signals continued confidence in Ukrainian titanium’s role in global critical mineral supply chains.

The Metalnomist Commentary

This renewed funding reflects investor confidence in Ukraine’s long-term titanium capacity. Velta’s dual-deposit strategy, coupled with energy independence, may help position it as a resilient titanium supplier despite ongoing geopolitical risks.

MMG to Supply Zinc Concentrate to Minmetals North-Europe Through 2027

MMG

Strategic intra-group agreement supports China’s global metals supply chain from Australia’s Dugald River mine

Chinese mining company MMG Ltd has announced a multiyear sales agreement to supply zinc concentrate to Minmetals North-Europe from 2025 to 2027. Both companies operate under the umbrella of China Minmetals Corporation, a major state-owned enterprise overseeing critical metals supply chains.

Under the deal, MMG will supply approximately 100,000 to 120,000 tonnes per year of zinc concentrate from its Dugald River operations in Queensland, Australia. The Dugald River mine currently produces around 370,000 tonnes per year of zinc concentrate at full capacity.

Pricing linked to LME zinc and LBMA silver benchmarks

The contract specifies that pricing will be based on zinc content and silver by-products contained in the concentrate. Zinc will be priced using the London Metal Exchange (LME) average over the agreed contract period, while silver pricing will reference the London Bullion Market Association (LBMA) average.

A proposed annual price cap of $200 million will apply, helping both parties manage pricing risk amid volatile metals markets.

This supply agreement not only ensures consistent feedstock for Minmetals North-Europe's refining operations but also reinforces China’s secure access to zinc — a key material for galvanizing, battery production, and alloying.

Vertical integration strengthens China's control over zinc supply

MMG’s strategic partnership with Minmetals North-Europe highlights China Minmetals’ vertically integrated approach to securing raw materials. By aligning mining, trading, and refining under a single corporate structure, China enhances its ability to manage market fluctuations and supply risks.

With zinc demand rising globally for use in infrastructure, automotive, and renewable energy sectors, this long-term agreement positions China to maintain pricing stability and secure raw material access outside its borders.

Elkem Launches Review of Silicones Division to Navigate Market Challenges

Elkem

Elkem, a Norwegian ferro-alloy and silicon producer, has initiated a review of its silicones division in response to overcapacities in China and weak consumer markets. The company’s goal is to streamline operations and reallocate capital to its silicon products and carbon solutions divisions. As a fully integrated player in the silicones industry, Elkem handles everything from silicon metal production to downstream silicone specialties. However, the company faces a tough operating environment due to global oversupply, particularly in China.

Elkem's Investment in Expansion and Recovery in 2024

To address these challenges, Elkem has invested heavily in expanding its production capabilities. In 2024, the company allocated 4.4 billion Norwegian kroner ($390 million) to enhance its Chinese and French operations, boosting overall capacity by 140,000 tons per year. The improvements in China were completed in May, while the French project was scheduled for completion by the end of the year. Despite the market difficulties, Elkem’s silicones division reported a significant recovery, with earnings before interest, taxes, depreciation, and amortization (EBITDA) of NKr145 million for the January-September period in 2024. This marked a major improvement from a loss of NKr672 million in 2023, driven by operational efficiencies and the ramp-up of new capacity.

Strategic Review with Expert Advice

To ensure the company’s continued success in this challenging environment, Elkem has appointed Norwegian bank ABG Sundal Collier to assist with the review. While the timeline for the review is not yet clear, the company is scheduled to report its fourth-quarter results on February 12. This review underscores Elkem’s commitment to maintaining competitiveness in the silicones sector and ensuring capital is deployed effectively across its divisions.

Iluka Resources Reduces Heavy Mineral Production in 2024 Amid Global Economic Slowdown

Iluka Resources

Iluka Resources, an Australian mining company, has reported a 22% decline in its combined output of zircon, rutile, and synthetic rutile for 2024. The company produced 496,200 tons of heavy minerals, a drop from the previous year despite an increase in production during the October-December quarter. Several factors contributed to this decrease, including slowdowns in construction, particularly in the United States, and a weakening demand for pigments. These market conditions led to reduced demand for Iluka’s key products in both the zircon and rutile markets.

Declining Demand in Key Markets Contributes to Reduced Output

Zircon production saw the most significant drop, falling by 31% to 277,200 tons, primarily due to reduced demand from Chinese and U.S. ceramics manufacturers. Additionally, seasonal weaknesses in the European ceramics market further impacted production levels. During the fourth quarter, zircon output also decreased by 29% despite a slight overall increase in heavy mineral production.

Synthetic rutile production similarly faced a downturn, with a 19% decrease in overall output to 211,200 tons. This reduction followed a slower construction sector in the U.S., which dampened pigment demand. Although production picked up in the fourth quarter, especially for synthetic rutile, Iluka had to pause operations at two Western Australia rutile plants in October 2023 due to weak demand and scheduled maintenance.

Outlook for 2025: A Modest Production Forecast Amid Uncertainty

Looking ahead to 2025, Iluka has set a cautious output guidance of 495,000 tons of heavy minerals, lower than 2024’s production figures. This forecast includes 270,000 tons of rutile and synthetic rutile and 225,000 tons of zircon. The company attributes this conservative projection to ongoing global economic uncertainties and slower-than-expected recovery in demand from key markets.

Despite these challenges, Iluka remains hopeful that changes in global trade, particularly increased tariffs on Chinese imports to Europe, could drive higher demand for rutile among Western pigment producers in the coming year.

Element 25 Secures $166M US Grant for High-Purity Manganese Plant

Element 25

Louisiana Refinery to Strengthen North American Battery Supply Chain

Element 25 (E25) has received a $166 million grant from the US Department of Energy (DOE) to develop its high-purity manganese sulphate monohydrate (HPMSM) refinery in Louisiana. The project, set to begin construction on April 1, 2025, will refine manganese concentrate from the Butcherbird mine in Western Australia. This initiative aligns with the US government’s $3 billion plan to boost domestic battery materials production, reducing reliance on Chinese supply chains.

Strategic Financing and Automaker Partnerships

The DOE grant supports a critical part of Element 25’s financing strategy, supplementing an $85 million loan from General Motors (GM) and a $30 million investment from Stellantis in 2023. Under these agreements, E25 will supply 32,500 t/yr of HPMSM to GM and 10,000 t/yr to Stellantis. These partnerships reflect automakers’ efforts to secure stable battery material supplies amid increasing demand for manganese-rich battery chemistries.

Rising Demand for Battery-Grade Manganese

In 2024, global HPMSM production reached 300,000 tonnes, but analysts forecast a 1.2-1.3 million t/yr supply deficit by 2034 due to surging EV battery demand. The Louisiana refinery positions Element 25 as a key supplier in the North American EV supply chain, addressing the growing need for high-purity manganese in lithium-ion battery cathodes.

Brazil's BNDES and FINEP Announce R$5 Billion Investment in Strategic Minerals Projects

BNDES

Brazil's National Bank for Economic and Social Development (BNDES) and the Financing Agency for Studies and Projects (FINEP) have unveiled a joint investment of R$5 billion ($821 million) to bolster strategic minerals projects within the country. This significant funding initiative aims to stimulate the development of pilot plants and commercial-scale operations for key minerals vital to various industries.

Target Minerals and Project Focus

The investment will specifically target projects focused on lithium, rare earth elements, nickel, graphite, and silicon. These minerals are crucial for the production of advanced technologies, including batteries for electric vehicles and photovoltaic cells for solar energy. The funding will support both the construction of pilot and commercial-scale plants, as well as crucial studies aimed at expanding Brazil's industrial capacity in these strategic sectors. The initiative is designed to attract further private investment, fostering growth in the domestic production of these essential materials.

Driving Clean Energy and Sustainable Development

BNDES stated that this investment aims to support the increasing domestic demand for solar and wind power. Brazil has made significant strides in clean energy production, with 91% of its power coming from clean sources in 2023. Wind and solar power accounted for approximately 20% of this clean energy mix, a notable increase from 16.6% in 2022, according to energy transition think tank Ember. By supporting the development of strategic mineral resources, Brazil aims to further its commitment to sustainable energy and reduce reliance on imported materials.

Brazil's Mineral Wealth

Brazil possesses significant reserves of several key minerals. The country holds the world's largest reserves of niobium and is the leading producer of this element, which is used in various applications, including alloys, tools, dies, and superconducting magnets.  Brazil also boasts the second-largest natural graphite reserves, ranks third in nickel and rare earth element reserves, and holds the fifth and third-largest lithium and silicon reserves, respectively, according to BNDES. This abundance of natural resources positions Brazil as a potential key player in the global supply chain for these critical minerals.

REC Silicon Shifts Focus from Polysilicon to Silicon Gases Amid Production Challenges

REC Silicon

REC Silicon, a Norway-based manufacturer, is halting its efforts to produce solar-grade polysilicon at its Moses Lake, Washington facility due to persistent quality issues, pivoting to focus on the production of silane gas, a strategic shift reflecting changes in market demands and internal capabilities.

Production Shift Due to Quality Challenges

Initially, REC Silicon aimed to resume polysilicon production supported by a significant investment from South Korean solar panel producer Hanwha Qcell in 2022, which included a 10-year offtake agreement. However, despite several attempts to enhance the quality of the polysilicon, REC faced continuous challenges in removing key impurities. The product ultimately failed a qualification test in December, leading to decision of shutting down the polysilicon production line. The first deliveries were consistently delayed throughout 2024, failing to meet the high purity standards required for solar cell production.

Strategic Refocus on Silicon Gas Production

With the closure of the polysilicon segment, REC Silicon is now redirecting its focus towards the production of silicon gases, particularly silane, which is used in the manufacture of silicon anodes for batteries. This move is expected to better align with the evolving market dynamics, especially as the demand for battery materials increases. REC Silicon's shift is timely, considering the reduced potential customer base in the U.S. for solar-grade polysilicon, exacerbated by the doubling of U.S. tariffs on polysilicon imports from China.

The company anticipates the shutdown process will take approximately three months, during which it will maintain the necessary equipment for silicon gas production. This strategy not only saves costs but also allows for operational flexibility, enabling the company to potentially restart or scale operations based on future market needs.

In September, REC signed a significant contract to supply silane to Sila Nanotechnologies from the first quarter of 2025 through to 2031. Sila Nanotechnologies also holds contracts with major firms like Mercedes-Benz and Panasonic, indicating a strong upcoming demand for REC's silicon gas products.

Giyani Metals Delays Battery-Grade Manganese Production in South Africa

Giyani Metals

Giyani Metals, a Canada-based battery metals company, has postponed the production phase of its battery-grade manganese demonstration plant in Johannesburg, South Africa, due to external operational challenges. Originally slated to begin production of high-purity manganese sulfate monohydrate (HPMSM) in Q4 2024, the company now aims to start output in Q1 2025.

The delay is attributed to power and water supply disruptions. A local power outage earlier this month caused a five-day halt in water supply, which temporarily shut down plant operations. Additionally, slow progress in commissioning the control system has further impacted the timeline.

As a result, Giyani’s planned sample product production for offtakers has been pushed from the end of 2024 to early 2025.

Impact on Commercial Production Timeline Unclear

Giyani Metals has not yet confirmed whether this setback will affect the construction schedule for its planned commercial HPMSM plant, which remains on track for a 2026 groundbreaking with a production ramp-up in 2027.

The company’s demonstration facility is a key step in its strategy to supply battery-grade manganese for the growing electric vehicle (EV) battery sector, where demand for high-purity manganese sulfate is expected to rise.

China's Graphite Market to Grow in 2025 Despite Oversupply and Geopolitical Challenges

China Graphite

China's graphite flake market is set to expand further in 2025, driven primarily by sustained demand from the new energy vehicle (NEV) industry. Despite challenges such as oversupply and geopolitical uncertainties, the market remains resilient due to the critical role of graphite in producing lithium-ion battery components like anodes.

The NEV industry, a major consumer of graphite, has grown exponentially in China over the past decade, supported by the country's decarbonization agenda. In 2023, NEV production reached 11.345 million units (up 35% year-on-year), with sales climbing 36% to 11.262 million units. By October 2023, NEVs accounted for 46.8% of China's auto market, up from 26% in 2022.

To meet rising demand, China's domestic graphite flake production increased from 930,000 tons in 2020 to 1.2 million tons in 2023. Major companies, such as China Minmetals Heilongjiang Graphite, have launched large-scale projects, including a 6 million tons/year graphite flake ore production complex. Additional capacity expansions are underway, including projects by Heilongjiang Ruitong, Heilongjiang Longda, and Inner Mongolia Hengyu.

Export Licensing Challenges and Geopolitical Headwinds

However, Beijing's introduction of export licensing controls on graphite products like flake and spherical graphite is curbing exports. From January to October 2023, Chinese graphite flake exports dropped 23% year-on-year to 49,647 tons. Exports to India plummeted to zero, compared with 9,379 tons in the same period last year, largely due to the new regulatory restrictions.

Exporters must now comply with stringent licensing procedures that require detailed documentation, including technical descriptions, end-user identity verification, and export contracts. This move aligns with China's broader export control legislation for dual-use items, which applies to goods that have both civilian and military applications.

China also reduced tax rebates for spherical graphite exports, an essential component in lithium-ion batteries, from 13% to 9%, effective December 1, 2023. Meanwhile, stricter inspections on US-bound graphite shipments reflect escalating trade tensions between the two countries. Policies such as the US Inflation Reduction Act and the EU's Critical Raw Materials Act are further encouraging global battery manufacturers to diversify supply chains away from China.

Global Battery Producers Adapt

In response to export restrictions and potential US tariff hikes, Chinese battery manufacturers are increasing overseas investments. BTR, a major battery material producer, recently launched an 80,000 tons/year anode material plant in Indonesia and began building additional facilities in Morocco. Similarly, Shijiazhuang Shangtai is investing $154 million to establish a 50,000 tons/year anode material plant in Malaysia.

Such initiatives are helping companies hedge against geopolitical risks while ensuring a stable supply of raw materials for the growing global battery market.

Uncertain Political Climate

Political developments, such as a potential re-election of Donald Trump as US president, could further disrupt the global electric vehicle (EV) market. Trump's policies favor traditional energy sources and could lead to increased tariffs on lithium-ion batteries and related raw materials. This uncertainty underscores the importance of diversifying supply chains and expanding overseas production.

LME Approves Listing of China's Greatpower Co. Cobalt Cathode

Greatpower

The London Metal Exchange (LME) has officially approved the listing of Zhejiang Greatpower Co.'s GREATPOWER brand cobalt cathode. This milestone, announced on December 17, 2023, marks a significant step for the Chinese cobalt industry in gaining global recognition. Greatpower, a major player in cobalt production, operates a state-of-the-art cobalt cathode facility in Shangyu district, Shaoxing city, located in eastern China’s Zhejiang province.

Expansion Plans for Greatpower

Since its launch in 2022, the Greatpower cobalt cathode facility has maintained a production capacity of 2,000 tons per year (t/yr). Looking ahead, the company is set to double its output by 2025, with plans to reach 4,000 t/yr. This expansion will help Greatpower meet the growing global demand for refined cobalt, particularly as cobalt remains essential for energy storage technologies, electric vehicle (EV) batteries, and other high-tech industries.

China’s Growing Cobalt Production Capacity

Greatpower’s refined cobalt output, which includes cobalt sulphate, cobalt chloride, and cobalt cathode, contributes to the nation’s rapidly expanding capacity in cobalt metal production. In 2023, the price premium for cobalt metal over cobalt salts has encouraged domestic refineries to increase their production. According to market forecasts, China’s cobalt metal capacity is expected to more than double, reaching around 65,000 tons in 2024, with further potential for growth to 80,000 tons by 2025.

Key players in China's cobalt industry, including Jinchuan, Huayou, GEM, Hanrui, Tengyuan, and Guangxi Yinyi, are expanding their operations. New entrants such as CNGR and New Era Group Zhejiang Zhongneng are also slated to launch production lines in 2024.

Impact of LME Listings

The LME’s approval of cobalt cathodes from China is expected to slightly ease the oversupply in the domestic market. Other Chinese cathode brands already listed on the LME include those from Jinchuan, Yantai Cash Industrial, GEM (Jiangsu) Cobalt Industry, Quzhou Huayou Cobalt New Material, Ganzhou Tengyuan Cobalt New Material, and Zhejiang Greatpower Cobalt Materials. With increasing global demand for cobalt, these listings offer greater market access for Chinese producers while contributing to a more balanced global cobalt supply.

Ganfeng Lithium Begins Production of Spodumene Concentrate at Goulamina Mine in Mali

Ganfeng Lithium

Ganfeng Lithium, one of the world's leading producers of lithium, has officially started producing spodumene concentrate at its Goulamina lithium mine in Mali. This marks a significant step in the development of the mine, which is being constructed in two phases. The first phase, which began in 2022, has a production capacity of 506,000 tonnes per year (t/yr) of spodumene concentrate, with commercial production starting on December 15, 2024. The second phase, when completed, will raise the total capacity to 1 million t/yr.

Goulamina Lithium Mine: A Major Step for Ganfeng's Global Lithium Supply

The Goulamina project is one of Ganfeng's key international investments, located in Mali, a country that is becoming increasingly significant in the global lithium supply chain. The mine has a total resource base of 7.14 million tonnes (mn t) of lithium carbonate equivalent (LCE), with an average grade of 1.37% lithium oxide (Li2O), a quality that positions it as a key source of lithium in the coming years.

As part of its development, Ganfeng has announced that its wholly owned subsidiary Lithium du Mali SA (LMSA) holds a 100% stake in the project. However, in a move to strengthen its relationship with the host nation, Ganfeng will transfer a 35% stake in LMSA to the Mali government. This will see the government receive 10% of the stake for free, while the remaining 25% will be acquired for approximately $32 million.

Expanding Ganfeng’s Global Lithium Portfolio

Ganfeng Lithium is investing heavily in lithium extraction from both spodumene ore and brine sources across the globe. In addition to the Goulamina mine, Ganfeng has major operations in Australia, Argentina, Mexico, Ireland, and China. The company is also ramping up its Cauchari-Olaroz project in Argentina, which boasts an annual 40,000 t/yr capacity for lithium carbonate production.

The move to secure assets in Africa is part of a broader trend among Chinese lithium producers, who are increasingly looking to diversify their supply chains. Companies such as Huayou, Sinomine, Chengxin, and Yahua have been sending shipments from their Zimbabwe-based mines to lithium refineries in China, highlighting the growing importance of African countries as key players in the global lithium market.

Strategic Implications for Global Lithium Markets

Ganfeng’s investment in Mali and its expanding operations across Africa signal an ongoing shift in the global lithium mining landscape, with Chinese firms increasingly focusing on securing access to critical resources outside traditional markets like Australia and South America. As demand for lithium continues to surge, driven by the rapid growth of electric vehicles (EVs) and renewable energy storage solutions, these strategic moves will play a pivotal role in shaping the future of the lithium supply chain.

Syrah Resources Declares Force Majeure at Mozambique Graphite Plant Amid Civil Unrest

Syrah Resources

Sydney-based graphite producer Syrah Resources has declared a force majeure at its Balama operations in Mozambique, signaling significant disruptions due to post-election civil unrest in the country. The declaration comes as the company faced defaulted payments on debts backed by the US government.

Production Halt and Financial Strain

Syrah Resources reported that ongoing protests, which began in late September at the Balama site due to historical farmland resettlement grievances, have escalated following Mozambique's general election in October. Allegations of electoral fraud have led to violent protests across major cities, exacerbating the situation and preventing production activities. The unrest has not only halted production from October through December to replenish inventory but also hindered sales to customers, resulting in a declared force majeure event.

Implications of the Default

The unrest and consequent production stoppage have led to events of default on loans with significant US entities—the US International Development Finance Corporation (DFC) and the Department of Energy (DOE). The US DFC had previously extended a $150 million loan to Syrah for graphite operations, marking its first such financial engagement. Additionally, Syrah received a $102 million loan facility from the US DOE to expand its Syrah Vidalia anode active material facility in the US. The company is currently engaging with both entities to address the defaults.

Despite peaceful protest actions, which have not deliberately damaged property, plant, or equipment at Balama, Syrah acknowledges that resolving the situation will be a lengthy process. The company is striving to restore operations as quickly as possible. Notably, production at Balama has been on hold since July due to adequate existing inventory and low demand for graphite fines.

Bushveld Minerals Reports Lower Vanadium Output in Q3 Amid Operational Adjustments

Bushveld Minerals

South Africa’s Bushveld Minerals reported a year-on-year decrease in vanadium production for the third quarter of 2024, as the company continues a controlled operational slowdown at its Vametco complex due to liquidity challenges. Despite the reduced output, Bushveld reaffirmed its focus on Vametco as its core vanadium-producing asset following the sale of its Vanchem processing plant.

Q3 Production Highlights

• Vanadium production at Vametco: 855 tonnes (t), down 15% year-on-year.
• Aggregate output for January-September: 2,546t, a decrease of 8.5% compared to the same period last year.
• Nitro-vanadium output at Vametco: 485t in Q3, an 11% decline from the previous year, and 1,387t for January-September, down by 19%.

The slowdown at Vametco was attributed to ongoing cash flow challenges, prompting Bushveld to revise its 2024 production guidance downward in alignment with its liquidity management strategy.

Vanchem Processing Plant Sale and Q3 Output

Earlier this month, Bushveld completed the sale of its Vanchem vanadium processing plant to investment fund Southern Point Resources, consolidating its focus on Vametco. Vanchem’s Q3 output totaled 370t, down 19% year-on-year due to mill issues following maintenance in May. Vanchem’s Q3 production breakdown included:

• Ferro-vanadium: 65t
• Vanadium pentoxide flake: 236t
• Other vanadium chemicals: 69t

Bushveld Minerals’ strategic divestment of Vanchem and reduced production guidance underscore its efforts to stabilize operations and focus on its primary asset amid global market fluctuations.

China’s Polysilicon Output Declines as Producers Seek Market Balance

Daqo New Energy

China's polysilicon production experienced significant cuts in recent months, as leading producers adjusted output to counter oversupply and stabilize the market. According to Daqo New Energy, a leading polysilicon manufacturer, output fell 15% month-on-month in July and 6% in August, marking the lowest production levels of the year. Total production dropped below 130,000 tons in August, easing market pressure and temporarily stabilizing prices.

Market Pressures Prompt Production Adjustments

The oversupply had driven polysilicon prices to a low of 35-40 yuan/kg, below cash costs for Tier 1 producers. However, by September, prices rebounded slightly to 38-43 yuan/kg as downstream buyers took advantage of the lower prices. The sector remains under strain, with four consecutive months of cash losses pushing producers to revise strategies.

In response, Daqo implemented a series of measures:

• Facility Maintenance and Utilization Adjustments: Daqo reduced capacity utilization to 50% in Q3 and produced 43,592 tons, down from 64,961 tons in Q2.
• Production Guidance Downgrade: Full-year guidance was revised to 200,000-210,000 tons, down from an earlier forecast of 280,000-300,000 tons.

CEO Xu Xiang highlighted the ongoing need for further production cuts and stronger downstream demand to sustain price recovery.

Solar Demand and Government Stimulus Provide Hope

While the polysilicon market struggles, the broader solar photovoltaic (PV) sector shows robust demand. New solar PV installations in China reached 160.88 GW in the first nine months of the year, a 25% increase compared to 2023. The fourth quarter traditionally sees the highest number of installations, bolstered by government stimulus packages encouraging state-owned enterprises to invest in renewable energy projects.

The China Photovoltaic Industry Association (CPIA) has set a reference price of 0.68 yuan/W for PV modules, aiming to stabilize bidding processes and provide pricing clarity.

Outlook: Consolidation and Recovery

Despite signs of stabilization, Xu noted that the market may have reached a cyclical bottom but has not yet shown a clear turning point. Poor profitability and cash burn are likely to drive higher-cost producers out of the market, paving the way for long-term capacity optimization and recovery.

Bushveld Minerals Withdraws Vanadium Production Guidance Amid Operational Slowdown

Bushveld Minerals

Vanadium producer Bushveld Minerals has announced the withdrawal of its 2024 production guidance, citing a necessary "controlled slowdown" of operations at its Vametco complex in South Africa.

The company, facing liquidity challenges, indicated that it is no longer able to operate at the previously planned production levels. On Friday, Bushveld explained that the pace at which it secures additional funding would determine when operations at Vametco can return to full capacity.

The Vametco complex, which produces nitro-vanadium, has been impacted by these financial constraints, and as a result, the company is forced to adjust its expectations for vanadium output. The company had earlier projected a total production of 3,800-4,000 metric tonnes (t) of vanadium for the full year 2024 across both its Vametco and Vanchem operations. Vanchem, which produces ferro-vanadium and vanadium pentoxide flake, is also affected by the financial pressures.

In order to address its liquidity shortfall, Bushveld Minerals is finalizing the sale of its Vanchem asset to Southern Point Resources, a move expected to provide crucial capital to support ongoing operations. The sale is slated to close by the end of the month, and Bushveld anticipates this deal will provide the necessary funds to stabilize the company's operations.

Despite the setback, Bushveld's management remains optimistic about the future, as the closure of the Vanchem sale should help the company regain financial stability and meet its production targets in the longer term.

Bushveld Minerals decision to withdraw its production guidance highlights the broader challenges facing the vanadium industry, particularly in the context of fluctuating commodity prices and operational difficulties. The company has stressed that it remains committed to its long-term strategy but needs to resolve its financial situation before moving forward with increased production.

Anglo American Reports 3Q Decline in Copper Output but Revises Nickel and PGM Guidance Upwards

Anglo American

Anglo American, the UK-South African mining giant, experienced a 13% year-on-year decline in copper production during the third quarter of 2024, with output falling to 181,000 tons. The decrease was primarily attributed to reduced production at its mines in Chile and Peru.

Copper Production Highlights

• Peru’s Quellaveco Mine: Output fell 21% to 68,700 tons due to lower grades and recoveries. Production is expected to rebound in the fourth quarter.
• Chilean Operations: Output dropped 7% to 112,600 tons, driven by the planned closure of the Los Bronces plant in July, where production fell 20%. However, higher grades at El Soldado boosted output by 16%, partially offsetting the losses.

Total copper production for the year to date reached 575,000 tons, down 4% year-on-year. The company remains on track to meet its full-year production guidance of 730,000-790,000 tons, split between 430,000-460,000 tons from Chile and 300,000-330,000 tons from Peru.

Platinum Group Metals (PGMs) Performance

• PGMs in Concentrate: Production dropped 10% to 922,000 ounces due to lower output at South Africa’s Mogalakwena and Amandelbult mines. Higher production at Zimbabwe’s Unki mine partially offset these declines.
• Refined PGMs: Production rose 22% to 1.11 million ounces, supported by stability in processing operations.

Anglo American revised its full-year refined PGM production guidance upward to 3.7-3.9 million ounces, from the earlier estimate of 3.3-3.7 million ounces.

Nickel Production Trends

Nickel output increased 6% to 9,900 tons during the quarter, driven by operational improvements at the Barro Alto plant in Brazil. Year-to-date nickel production reached 28,900 tons, up 2%.

The company raised its full-year nickel production guidance to 38,000-39,000 tons, up from its earlier range of 36,000-38,000 tons.

Outlook

Anglo American’s diversified portfolio continues to offset challenges in copper production with strong performance in nickel and PGMs. While facing difficulties in its copper operations, the upward revisions in nickel and PGM guidance underscore the company’s adaptability and operational resilience.

China Graphite's Flake Sales Skyrocket on Battery Demand

China Graphite's

China Graphite, a major natural graphite producer, has reported a remarkable surge in flake sales during the first half of the year. The rise, driven by robust downstream demand from the lithium-ion battery industry, highlights the growing importance of graphite in the production of electric vehicle (EV) batteries.

From January to June, China Graphite sold 10,109 tonnes of graphite flake, marking a 174% increase compared to the 3,689 tonnes sold in the same period last year. The revenue from flake sales grew by 111% to 25.1 million yuan ($3.6 million), up from 11.9 million yuan in the previous year.

Spherical Graphite Decline Due to Production Suspension

However, while flake sales thrived, spherical graphite sales saw a steep decline. The company’s spherical graphite output fell by 51% to 923 tonnes during the first half, as production was halted in the first quarter due to colder winter temperatures. As a result, spherical graphite revenue dropped 71% to 10.2 million yuan from 34.9 million yuan the previous year.

The demand for graphite is closely linked to the electric vehicle market. China's new energy vehicle (NEV) production rose by 29% year-on-year to 7.008 million units between January and August. Sales of NEVs increased by 31% to 7.037 million units during the same period. The NEV penetration rate in August reached 45%, up from 32% in 2023, reflecting the booming EV market and the essential role of graphite in this sector.

Germany Launches €1 Billion Raw Materials Fund to Strengthen Supply Chains

Germany has approved a €1 billion ($1.1 billion) raw materials fund aimed at boosting domestic and international raw material projects. The initiative, managed by state-owned development bank KfW, is designed to strengthen value chains and reduce reliance on foreign imports. The fund will focus on critical areas such as mining, processing, and recycling, and the German government will contribute through equity capital.

Eligible projects must have a binding offtake agreement and a completed feasibility study, as outlined by KfW in May. A government-led raw materials committee will oversee project negotiations and approvals. This strategic move aligns with Europe's growing emphasis on securing critical minerals, a priority under the EU’s Critical Raw Materials Act.

Germany’s initiative mirrors similar efforts in France and Italy, which have also launched raw materials funds. Italy's fund, valued at €1 billion, is expected to attract an additional €1 billion from private investors, while France has committed €500 million to its fund. The European Bank for Reconstruction and Development, along with the EU, launched a joint initiative in July to provide up to €100 million in equity investments for critical materials projects.

Key minerals such as lithium, copper, battery metals, and rare earth elements—essential for industries like aerospace and defense—are primary targets for these European initiatives.

Hubei Letong Halts Manganese Flake Production Due to Losses

Hubei Letong, a Chinese manganese flake producer, suspended its output last week amid operating losses and equipment maintenance issues, market sources confirmed. The company, based in Changyang county, Hubei province, has yet to announce when production will resume. Hubei Letong was producing 40-50 tonnes per day prior to the halt, with a total annual capacity of 36,000 tonnes. Compounding the situation, manganese ore supplies have been tight due to local environmental inspections.

Manganese flake prices have rebounded slightly in the past two weeks, driven by producers raising offers to offset operating losses. However, further price increases are not expected, as the market for manganese alloys has remained sluggish. The stainless steel sector, a major consumer of manganese flake, has not recovered as anticipated, even after the typical summer slowdown ended.

Producers with in-house mines faced significant losses when prices fell below 12,000 yuan per tonne. On September 18, domestic prices for 99.7% grade manganese flake were assessed at 12,000-12,200 yuan per tonne, reflecting a 300-yuan increase from earlier this month. This price recovery comes after a downward trend throughout July and August, following a one-year high of 13,700-13,900 yuan per tonne in late June.