AL Circle's weekly wrap
EU critical raw materials: Italy anticipates to source 16 domestically
Italian authorities are planning to implement a comprehensive package of measures to enhance procurement and reprocessing of critical raw materials, according to a draft decree reviewed by Reuters and reported by Mining.com.
This initiative, championed by Prime Minister Giorgia Meloni's administration, underscores a strategic shift towards reducing dependency on imports, particularly from countries such as China. Key among the measures is streamlined permitting procedures designed to expedite the release of mining concessions, facilitating greater domestic extraction of essential materials. This policy shift reflects the government's commitment to bolstering local industries and securing a more self-reliant economic future.
Italy estimates it can domestically source 16 out of the 34 raw materials deemed critical by the European Union, including lithium and bauxite. The draft proposal, led by Industry Minister Adolfo Urso, underscores the urgency of projects related to these materials' extraction, processing, or recycling, stating that they are not just important but 'non-deferrable and urgent '.
Under this scheme, licenses for these activities must be issued within a maximum of 18 months. Government officials mentioned that the cabinet could discuss the proposal as early as June 20, 2024.
The Italian government operates under the EU's Critical Raw Materials Act, a cornerstone of the bloc's strategy to ensure its industry remains competitive with the United States and China in producing clean technology and accessing essential materials.
A provision in the Italian decree is expected to draw criticism from environmental groups, as it allows for the issuance of exploration permits for strategic raw materials without requiring an environmental impact assessment.
Additional measures in the decree permit the reopening of closed or abandoned mining sites, primarily located in the Alps, Tuscany, and Sardinia.
Companies holding mining concessions will be required to pay the state or local authorities between 5 per cent and 7 per cent annually of the value of their output, depending on whether the mining takes place on land or at sea.
Rio Tinto invests to maintain anode production at Grande-Baie smelter
Rio Tinto will invest US$165 million (CA$226 million) in its Grande-Baie aluminium smelter to refurbish two anode baking furnaces that have reached the end of their useful life. The company will also carry out feasibility studies for the eventual replacement of the scrubbers and overhead bridge cranes at the anode production centre.
The work to rebuild the concrete shell and refractory lining of the anode baking furnaces will be carried out over two years, in 2025 and 2026. The new equipment will ensure a competitive supply of anodes to the Grande-Baie and Laterrière plants for decades to come.?
Rio Tinto will offset the carbon emissions related to the construction project through various initiatives like planting trees near the aluminium smelter.
Grande-Baie and Laterrière Operations Director Martin Lavoie said, ‘‘The refurbishment of the Grande-Baie smelter’s anode baking furnaces is a major investment that will ensure the sustainability and competitiveness of responsible aluminium production in the region for decades to come and will generate significant economic benefits. We are very happy to be completing this project over the next years in collaboration with our employees and local business partners.”
Most of the economic benefits associated with the project will be generated in Quebec. At the peak of the project, about 185 workers should be on site.
Rio Tinto completed the replacement of its anode baking furnaces at the Alma aluminium smelter in 2021.
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Macquarie acquires 49.9% of Hydro’s renewable energy subsidiary in a landmark deal
Hydro has finalised the sale of 49.9 per cent of its renewable energy subsidiary, Hydro Rein, to Macquarie Asset Management. Initially announced in October 2023, this transaction marks a significant milestone in Hydro's strategy to expand its renewable energy portfolio.
The transaction has assigned a value of USD 333 million to Hydro Rein as of June 30, 2023, subject to any closing adjustments. Macquarie will contribute USD 214 million at closing, with the funds to be transferred by June 25, 2024. The remaining committed capital will be injected gradually as per the project requirements, ensuring a steady financial support for Hydro Rein's operations.
"We are excited to conclude the transaction, marking the next chapter in our renewable energy partnership with Macquarie Asset Management. Hydro Rein is well equipped to execute its ambitious growth agenda, with a strong project pipeline going forward. Industrial decarbonisation begins with renewable energy and Hydro Rein will be instrumental in supporting Hydro as well as other industries with the energy we need to reduce our CO2 emissions," stated Hydro's President and CEO, Eivind Kallevik.?
Impact of the transaction
The impact of the transaction will be reflected in Hydro's second-quarter income statement but will be excluded from "Adjusted results." With the capital injection from Macquarie, Hydro Rein is expected to be fully funded for its current projects under construction and for the development costs of future projects in the pipeline over the next few years. The goal is to avoid calling for new equity from the owners beyond the already committed capital.
Hydro and Macquarie have maintained a longstanding partnership in the renewable energy sector. Since 2017, the companies have collaborated on various projects, developing 1.3 GW of renewable energy capacity. This includes several wind projects in the Nordics and a 456 MW onshore wind farm in Brazil. These projects feature power purchase agreements with Hydro, aiding in the decarbonisation of its operations.
Robust industrial partnerships
Since its inception in 2021, Hydro Rein has been actively developing 8.4 GW of gross capacity across its key markets in the Nordics and Brazil. The company has fostered robust industrial partnerships, culminating in long-term power purchase agreements for its projects, amounting to 5.3 TWh annually. These agreements notably include partnerships with Hydro's significant facilities, such as the alumina refinery Alunorte, the primary aluminium plant Albras, and the bauxite mine Paragominas. Additionally, Hydro Rein collaboratively initiated a wind project to supply clean electricity to support the Norwegian operations of the telecommunications giant Telenor. Read the full news here.
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