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South Africa's headline consumer price inflation rose to 4.5% in September, from 4.4% in August, staying above the South African Reserve Bank's 3% plus-minus 1% target range.

September's consumer price index data showed inflationary pressure on costs that impact mining, such as transport, fuel, electricity and water.

The 10.8% year-on-year (y-o-y) rise in transport prices followed the 27.9% y-o-y and 4.6% month-on-month fuel price surge.

Passenger transport services rose 12.3% and the transport of goods rose 6.8%. Fuel is used in operations for mobile equipment, generators and operational vehicles, while purchased transport services connect production to domestic and export markets.

Higher fuel and freight prices increase on-site as well as mine-to-market expenses especially in the case of bulk commodities that make use of road haulage.

The impact on profit margins depends partly on commodity prices. When export prices are strong, mining companies can absorb some of the higher transport costs without a major reduction in profitability. When commodity prices are weak, however, companies have less revenue available to cover these costs, so profit margins narrow more sharply.

This pressure is difficult to pass on to customers because most mining products are sold at prices determined in international markets.

Minerals Council South Africa's economics department stated in its release to Mining Weekly on Tuesday, October 27, that it expected cost-push pressures, mainly dominated by higher fuel prices, to elevate the headline consumer price index to a level beyond the upper band of the South African Reserve Bank's inflation-targeting framework.

Goods inflation rose to 4.1% from 3.3%. The easing of services inflation to 4.9% from 5.1% was indicative of near-term cost pressure being increasingly concentrated on goods and operational inputs for now.

While the South African Reserve Bank and National Treasury expected inflation to moderate over the medium term, the current policy and prime lending rates were nevertheless keeping financing conditions restrictive, the Minerals Council report stated.

Housing and utilities prices increased by 5.2% y-o-y, contributing a further 1.3% to transport's 1.5%. Water supply and related services rose 7.4%, while electricity, gas, and other fuels rose 7.9%. Electricity and water are essential for ventilation, pumping, hoisting, cooling, processing, dust suppression and mine-water treatment, with tariff increases raising the minimum cost of maintaining production.

"Deep-level, energy-intensive and water-intensive activities are most exposed. Additionally, utility-cost increases can compress margins and affect output, employment, and remaining economic life, with the effect felt especially by junior and emerging miners and by mines in industries experiencing sustained production declines, for example, diamond mines.

"This pressure also affects capital allocation. Higher tariffs strengthen the case for renewable energy, water recycling, and efficiency technologies, but upfront capital costs can force constrained companies to choose.

"Further, rising essential costs reduce real purchasing power and can influence wage expectations and demand for support. Pressure is strongest when essential prices rise faster than wages, increasing calls for transport, housing and other assistance.

"Insurance and financial services prices increased by 5.4% y-o-y, contributing 0.6% to headline inflation. These services are especially relevant to mining because of the sector's capital intensity, long investment horizons and complex operational risks.

"These services protect people, assets, production and environmental liabilities and fund working capital and projects. Higher premiums and fina...

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Abu Dhabi-based nonprofit blockchain organisation ADI Foundation and digital asset developer SAGINT have announced a global partnership to bring SAGINT's Digital Warehouse Receipt technology to ADI Chain, creating a verifiable digital record for critical minerals as they move from producers to warehouses, buyers and across borders.

The partnership is designed to address one of the most persistent challenges in commodities trading: proving where a material came from, who has held it and who has control over it as it moves through the supply chain.

ADI Foundation will serve as SAGINT's exclusive channel participant, helping to introduce producers, warehouses, traders and other market participants to the SAGINT network across Africa, the Middle East, Asia and other markets.

SAGINT International CEO Troy Fitrell says trust in trade should not depend on a stamp on a piece of paper. With ADI, the proof travels with the material, lot by lot, across every border. "Producers can reach financing, lenders and insurers can see what they are backing, while governments can see their own resources clearly," he notes.

ADI Foundation principal council member Ajay Bhatia adds that trade has never lacked goods but it has lacked proof that travels with them. "When that proof moves with the material, finance can follow. Bringing the Digital Warehouse Receipt to ADI Chain gives our network a record that authorised lenders, insurers or customs officers can verify for themselves.

"As SAGINT's exclusive channel participant worldwide, we look forward to bringing the first organisations onto the network," Bhatia states.

HOW IT WORKS

SAGINT's Digital Warehouse Receipt replaces fragmented paper records with a secure digital record for each lot of material. The system captures information including origin, quantity, custody and assay data, allowing authorised participants to verify the information relevant to them while protecting commercially sensitive data.

By recording these records and associated events on ADI Chain, participants across different markets can rely on a shared, verifiable record rather than separate documents held by individual counterparties. The result is intended to make critical minerals easier to finance, insure and trade by increasing confidence in the assets underlying those transactions.

The opportunity is significant. The International Energy Agency valued the global market for key energy-transition minerals at about $325-billion in 2023.

Simultaneously, access to trade finance remains constrained: the Asian Development Bank estimates the global trade finance gap at $2.5-trillion, while the African Development Bank estimates unmet trade finance demand in Africa at between $74-billion and $92-billion.

The partnership also supports ADI Foundation's work with the African Continental Free Trade Area Secretariat to develop digital trade infrastructure across Africa, including infrastructure designed to improve verification of trade documentation and expand businesses' ability to access financing against inventory and other certified assets.

EXAMPLE IN PRACTICE

SAGINT has issued Digital Warehouse Receipts for production material since January this year, having started with refined rare earth oxide produced by ReElement Technologies.

This audio is brought to you by Endress and Hauser, a global leader in process and laboratory measurement technology, offering a broad portfolio of instruments, solutions and services for industrial process measurement and automation.

Platinum and palladium are among four precious metals included in new futures contracts launched in London, World Platinum Investment Council (WPIC) reports, amid New York-listed Intercontinental Exchange's commencement of trading precious metals derivatives in London.

Intercontinental Exchange's contracts, which also cover gold and silver, are linked to London's established daily benchmark price auctions and offer market participants an additional way to manage price exposure and risk. For platinum and palladium, the development could provide greater flexibility for investors and industrial users, although the impact on market liquidity will depend on trading activity and uptake, WPIC noted on LinkedIn.

Platinum and palladium was also given a major trading boost from September 28 when China gave international access to the trading of the two platinum group metals (PGMs) on the Guangzhou Futures Exchange (GFEX), where domestic exchange activity has been improving price discovery since the launch in November last year.

The GFEX's investment scope now reaches out to foreign institutional investors and giving them full access to platinum and palladium futures and options contracts.

On the GFEX, the form of the platinum and palladium being traded also goes beyond bar and includes sponge. This is tailor made for China where most industrial and automotive end-users of platinum and palladium much prefer it in the form of ready-to-use sponge.

Expected to result from international participation in platinum and palladium is price discovery and the emergence of increased arbitrage opportunity.

Interestingly, GFEX adheres to the technical specifications, quality standards and responsible platinum and palladium sourcing rules of the London Platinum and Palladium Market (LPPM) and entered the futures fray alongside the likes of Chicago Mercantile Exchange (CME), London's LBMA, Japan's Osaka Exchange as well as over-the-counter trading entities.

DEMAND OUTLOOK

Widening industrial uses for PGMs have been good for the demand outlook for the metals, which are hosted overwhelmingly in South Africa.

PGMs are needed, for example, for proton exchange membrane (PEM) electrolysers that generate hydrogen as well as in fuel cell electric vehicles (FCEVs) that convert the hydrogen back into electricity for mobility or stationary poser.

Reiterated in a report earlier this month is that Algeria and Tunisia have joined Italy, Austria and Germany in strengthening cooperation on the 3 300 km SoutH2 Corridor pipeline project, which aims to transport renewable hydrogen from North Africa to European markets in the early 2030s. The five countries signed a political declaration to support project development, financing and commercial partnerships.

Also, US Society of Piping Engineers and Designers president Javier Rubio has reported that the 18 green hydrogen projects under construction or in operation across Europe, China, India, and Saudi Arabia represent about $26-billion in announced and reported project investment, excluding projects without confirmed figures.

Japanese vehicle manufacturer Toyota regards hydrogen as an important energy source, WPIC has noted, in realising a carbon-neutral society. It introduced its first FCEV, the Mirai, in 2014 and has sold it in more than 30 countries and regions.

Since 2019, Toyota has also begun supplying fuel cell systems that generate electricity from hydrogen, and has provided more than 3 500 fuel cell systems to over 100 customers worldwide for applications such as buses, rail, and stationary generators. In partnership with others, Toyota has also developed hydrogen cartridge and hydrogen sauna, promoting decarbonisation in areas of everyday life as well.

Fuel Cell Works reports that...

This audio is brought to you by Endress and Hauser, a global leader in process and laboratory measurement technology, offering a broad portfolio of instruments, solutions and services for industrial process measurement and automation.

With Canada's Industry Minister Mélanie Joly having announced a $193-million investment for the aluminium sector under the Strategic Response Fund last week, federal department Innovation, Science and Economic Development Canada (ISED) says the two targeted projects will help maintain about 6 000 full-time jobs in Québec and across Canada, support 65 co-op student placements and strengthen collaborations with Canadian research institutions, post-secondary institutions and small- and medium-sized enterprises.

The first investment comprises $164-million for Rio Tinto's aluminium value chain in Saguenay–Lac-Saint-Jean as part of a $818-million strategy to strengthen production capacity and decarbonise the diversified miner's regional operations.

Rio plans to construct a new billet casting centre at the Alma smelter to support the production of value-added aluminium products and modernise anode baking furnaces at the Grande-Baie smelter through major infrastructure upgrades and equipment refurbishment.

The second investment that Joly allocated for support is that of Aluminerie Alouette. About $28-million will go to supporting the company's $135-million project to modernise and optimise its electrolysis operations.

These technological improvements will directly target energy performance, industrial competitiveness and the reduction of greenhouse-gas (GHG) emissions.

"By investing in transformational, emissions-reducing projects like Alouette's, we are increasing Canada's global competitiveness in the aluminium sector. As global tariffs put pressure on Canadian industries and reshape international trade dynamics, the government of Canada is investing in critical mineral resources, modernising the aluminium supply chain and protecting well-paying Canadian jobs," ISED states.

Rio Tinto aluminium Atlantic operations MD Sébastien Ross welcomes the federal support for Canada's aluminium industry, particularly as Rio itself is celebrating 100 years of aluminium production in Saguenay–Lac-Saint-Jean, and in the context of increased international competition.

"This investment is a real driver for accelerating modernisation, growth and the decarbonisation of our operations in the region. It's helping reinforce our value chain, support quality jobs and create the necessary conditions for continuing to invest, innovate and produce here in Quebec and in Canada," Ross adds.

In turn, Aluminerie CEO and president Claude Gosselin comments that with the fund's support the company can continue to modernise its operations, including improving energy efficiency and reducing GHG emissions.

"As the largest smelter in the Americas, we are proud to generate significant economic benefits for Canada, notably through about 1 000 quality jobs and hundreds of millions of dollars in purchases of goods and services. In a geopolitical context where uncertainty remains high, the government's support strengthens investor confidence and allows us to keep investing toward a sustainable future," Gosselin says.

Rio is the largest producer of primary aluminium in Canada with its Canadian hub in Montréal. Rio employs about 4 300 people in Québec alone, with an estimated 14 000 employees across its aluminium and mining segments in Canada.

In turn, Aluminerie is the largest aluminium smelter in North America, producing about 633 000 t of primary aluminium every year.

Canada has nine primary aluminium smelters, with the majority being in Québec and one other in British Columbia.

This audio is brought to you by Endress and Hauser, a global leader in process and laboratory measurement technology, offering a broad portfolio of instruments, solutions and services for industrial process measurement and automation.

Rio Tinto said on Friday it will invest $1.9-billion to develop the Kangwinan bauxite project in Queensland, Australia, replacing output from its ageing Andoom mine and lifting annual production capacity at its Weipa bauxite operations.

The miner said the investment would add 20-million tonnes of annual bauxite production in Weipa, with first output targeted in 2029 and full production expected by 2032.

Located in Queensland, Weipa is one of the world's largest bauxite mining complexes. It supplies the ore to make alumina and aluminium for applications ranging from construction and transportation to packaging and renewable energy infrastructure.

Kangwinan will replace production from the Andoom mine near Weipa as it reaches the end of its life this decade, while increasing Weipa's annual production capacity to about 44-million tonnes from around 38-million tonnes currently.

The development will also help offset the planned 2029 closure of Rio's Gove bauxite mine in the Northern Territory.

The announcement follows Rio's agreement last month to acquire the adjacent Aurukun bauxite project from Glencore and Mitsubishi, subject to regulatory approvals, as it seeks to extend long-term growth in the region.

Rio said the combined Amrun, Kangwinan and Aurukun operations are expected to support its Weipa bauxite business well beyond the middle of the century.