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Energy & Critical Metals

Silver Miners Are Expected to Benefit From US Blocking Solar Panel Imports From China

In the latest episode of growing trade tensions, the US is now officially blocking the import of solar panels…

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This article was originally published by A Head of the Herd

2021.09.02

In the latest episode of growing trade tensions between the worlds’ top two economies, the US is now officially blocking the import of solar panels from China over concerns of forced labor.

The implications of such a move could be huge; solar energy is currently the fastest-growing source of new electricity generation in the United States.

The Department of Energy’s latest media brief states that solar accounts for 3% of the electricity generated in America today, and the Biden Administration would like to boost that to more than 40% by 2035.

However, the production of solar panel production is dominated by China, and the latest import ban could pose a new challenge to bringing renewable energy to US households.

According to Philip Shen, a solar industry analyst with Roth Capital Partners, discussions with power utilities indicate that the US border has detained panels from one single manufacturer that are capable of generating about 100 megawatts worth of electricity, enough to power about 29,000 homes a year.

Adding up all the affected manufacturers, we are looking at a severe disruption to a lot of planned solar projects that could completely derail the Biden Administration’s climate plan.

Silver for Solar Panels

The decision by the US government to prioritize its human rights agenda over climate goals may force the administration to seek alternatives, including bolstering its domestic production. This bodes well for those within the US (and Canada) that are capable of supplying the key ingredients required to make solar panels.

One of those essential raw materials is silver, which makes up about 6% of the total cost to build each unit of a solar panel. The precious metal is highly conductive and amenable to cost-effective screen-printing processes, making it a key component of solar photovoltaic cells. The average panel of approximately 2 square meters can use up to 20 grams of silver.

In the early 2000s, silver demand from the solar sector barely registered, making up less than a percent of total demand. Fast forward to 2019, the photovoltaics sector accounted for 10% of total silver demand with nearly 100 million ounces used, according to Metals Focus data (see below). Since then, that percentage has risen to 13% and is still increasing.

Silver demand

These figures indicate that the use of silver in photovoltaics is not likely to stop, and some projections have silver demand growing 85% in 10 years, according to a report by BMO Capital Markets.

Coming off a record year despite the pandemic, the US solar industry would likely remain one of the leading drivers of silver demand. Installations grew 43% year over year in 2020, reaching a record 19.2 gigawatts of new capacity. By 2030, solar installations are expected to quadruple from current levels, according to a report from the Solar Energy Industries Association and Wood Mackenzie.

As most of the solar panels used in the US come from Asia, the latest import ban on China places the US solar industry in a bind, potentially sparking a surge in domestic silver exploration.

Rare Earth Metal Replacement?

Aside from its integral role in solar energy, silver also has other industrial uses such as 5G technology and automotives. However, a new application for silver may have been discovered.

A recent report by The Silver Institute has labelled silver as a potential replacement in consumer electronics, which often use rare and expensive metals to function properly.

A crucial part of the touchscreens and similar products is the composite material indium tin oxide (ITO), which has the uncommon trait of being visually transparent while still electrically conductive, and is thus scarce and expensive.

According to Behnam Akhavan, PhD, a senior lecturer in engineering at the University of Sydney, Australia: “Demand is growing for indium because of increasing production of touchscreen devices, but, even though only tiny amounts are needed, there are fears supply can’t keep up.”

With that in mind, Akhavan and his team have spent many years trying to find a replacement for ITO, and might have successfully done so in layers of tungsten oxide, silver and silver/tungsten oxide on glass.

The researchers covered glass with a 30-nanometer layer of tungsten oxide, followed by 10 nanometers of pure silver and another layer of 50 nanometers of a composite of tungsten oxide and silver. The end product was a clear 90-nanometer coating on the glass that was both conductive and transparent.

Akhavan noted that while neither tungsten nor silver is considered overly abundant, they are much less rare than indium.

Thus, we could see silver become an even more valuable commodity within the next few years as cheaper alternatives for rare metals are sought after.

Dolly Varden Silver

An enormous leap in silver demand across multiple sectors places pressure on the supply side as more projects will be needed, making potential silver producers a worthwhile investment.

One prospective silver producer that we’ve been tracking closely is Dolly Varden Silver Corp. (TSXV: DV) (OTC: DOLLF), which is exploring one of the richest mineralized regions on the planet: the Golden Triangle of British Columbia.

Silver is often a byproduct of gold mining, and as the name suggests, the Golden Triangle is esteemed for its impressive array of gold discoveries, both in the past and present.

With over a century of mining history, this particular area of BC has already been the site of three gold rushes and is home to some of Canada’s greatest gold mines such as Premier, Snip and Eskay Creek. Other significant deposits are also present, including Brucejack, Galore Creek, Copper Canyon, Schaft Creek, KSM, Granduc and Red Chris.

Located at the southern part of the Triangle (see map below), Dolly Varden’s flagship project covers 88 square kilometres of land in the Stewart Complex, an area that is well-known for its base and precious metals deposits.

Map of Golden Triangle

Notable projects within the vicinity include Hecla Mining’s (NYSE: HL) Kinskuch project and Fury Gold Mines’ (TSX: FURY) Homestake Ridge.

Kinskuch is an early-stage project with the potential for discovery of epithermal silver-gold, gold-rich porphyry and VMS deposits. At Homestake Ridge, the project’s PEA study has envisioned a 13-year mine with peak annual production of just over 88,000 gold-equivalent ounces.

Pure Silver Project

Unlike most in the region, DV’s project is volcanogenic massive sulfide (VMS) and epithermal-style pure silver deposit in nature, which is extremely rare in the mining industry, making it desirable for those looking for a pure silver play in a historically productive mining region.

The project is currently host to four historically active silver mines — Dolly Varden, Torbrit, North Star and Wolf — all of which have parts that remain largely unexplored to this day.

Mining activity on the property can be dated back to 1910, when the original Dolly Varden mine was discovered by Scandinavian prospectors. Nearly ten years later,  the Dolly Varden mine came into production and quickly established itself as one of the British Empire’s richest silver mines. It was also in the same year when the property expanded further with the discovery of another deposit nearby.

This deposit, named Torbrit, later contributed to most of the historical production at Dolly Varden. At its peak,  it was considered the third-largest silver producer in all of Canada.

Historical records show that the Torbrit mine produced 18.5 million ounces of silver at an average recovered grade of 13.58 oz per tonne between 1949-1959, while the Dolly Varden mine had 1.5 million ounces at an average grade of 35.7 oz per tonne in the early 1920s.

Altogether, about 20 million ounces of silver were produced from the two historical mines over a 40-year period, with assays of ore as high as 2,200 oz (over 72 kg) per tonne.

Though production subsequently ceased due to low silver prices, that didn’t deter companies from expressing their interest in these assets. Dolly Varden eventually acquired the property with the grand ambition of re-awakening the historic silver mine.

But first, the company plans to unlock more silver resources from the historical deposits through drilling, beginning with an aggressive two-year campaign that is already underway.

According to DV, only about 3% of the property has been explored in detail, leaving tonnes of upside for shareholders as well as investors looking to position themselves for the imminent silver demand boom.

Conclusion

Drilling is progressing well so far in this year’s 10,000-metre program, split equally between infill and expansion of the high-grade, potentially bulk-mineable silver resource at the Dolly Varden property.

It was previously estimated that the project has 32.9 million ounces of silver in the indicated category and 11.477 million ounces inferred, all adjacent to the historical deposits. These figures could get much bigger once the drilling is ultimately completed — perhaps surpassing 100 million ounces total.

Geologically, the project draws similarity to Skeena Resources’ Eskay Creek, located to the north and right in the heart of the Golden Triangle. The Eskay mineralization has been the focus of considerable exploration activity dating back to the 1930s, and at one time was the highest-grade gold mine in the world.

According to DV, the Eskay Creek deposit is said to be on the same structural trend as its own property, with Dolly Varden situated at what should be the silver-dominant end of the VMS-style mineralization.

Could Dolly Varden represent the focal point of North America’s next silver mining district? With demand for the precious metal set to explode in the coming years, the discovery potential of this large, rare pure-play silver project warrants our attention.

Dolly Varden Silver Corp.
TSXV:DV, OTC:DOLLF
Cdn$0.63, 2021.08.30
Shares Outstanding 130.6m
Market cap Cdn$82.3m
DV website

Richard (Rick) Mills
aheadoftheherd.com
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Energy & Critical Metals

Report: Australia scores the lowest among G20 countries for adopting climate policies

In a review of G20 countries and their transition to net-zero emissions, Australia has scored the lowest on all but … Read More
The post Report: Australia…

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In a review of G20 countries and their transition strategies to a net-zero emissions economy, Australia has scored the lowest on all but one of the nine metrics evaluated by The Climate Transparency Report.

Based on 100 indicators for adaptation, mitigation, and finance the report aims to make good practices and flaws transparent.

Up against countries such as Brazil, the UK, Russia, Saudi Arabia, the US, Argentina, and India, the assessment has demonstrated that Australia is in fact the worst ranked G20 nation when it comes to implementing climate policies across a range of sectors.

While marking a ‘medium’ policy rating for the construction of low emission buildings, Australia scored in the red on policy ratings relating to renewable energy in the power sector, coal phase-out in the power sector, phase-out of fossil fuel heavy duty vehicles, energy efficiency in industry and setting a target for net-zero deforestation.

 

Climate change data
Pic: Climate Analytics, 2021

While all of this can bee seen as embarrassing, it isn’t entirely surprising.

Curtin University Professor of Sustainability Peter Newman said the phase-out of fossil fuel cars and heavy-duty vehicles was “rightfully bad in Australia”.

“We are Third World on cars,” he said.

“The CEO of Volvo spoke about this on Radio National Breakfast last Friday, it is our real black spot.

“Mining companies are starting to do electric vehicle trucks and ammonia-trains on their own, but we need to remove the diesel rebate to help with this.

“It’s 52c/l, which is huge.”

In regards to Australia’s net-zero energy rating and renovation of new buildings, Newman said regulations were also “very poor”.

“The present debate is about the update of the National Construction Code from 4 to 7 stars, which is not even close to what is needed.

“This must be net-zero and the data shows this is cheaper and relatively easy to do now.”

 

Australia’s emissions ‘nearly three times the average’

The report states that collectively, the G20 member nations are responsible for around 75% of global greenhouse gases and while some positive developments have been made, including in the growth of solar and wind power among G20 members, the dependence on fossils fuels is not going down.

It also highlights that the consumption of coal is projected to rise by nearly 5% in 2021 and the consumption of gas increased by 12% across the G20 from 2015–2020.

One of the major key findings was that while energy-related CO2 emissions plunged by 6% across the G20 in 2020, they are projected to rebound by 4% in 2021.

Climate Analytics chief executive officer Bill Hare said Australia has the G20’s highest per capita emissions “nearly three times the average” and yet the government has no credible climate policies and “no plan that doesn’t involve replacing fossil fuels with fossil fuels”.

“Australia has been long recognised by all organisations that have looked at a comparative analysis that it is a laggard on nearly every front.

“There is very little happening on a national level.”

In the report, Australia’s emissions targets were classified as “highly insufficient” and consistent with 4 degrees of global warming should they be adopted by other countries – meaning targets are not Paris Agreement compatible.

It said: “The UK is the only G20 member with a domestic target that aligns with a 1.5°C modelled domestic pathway in 2030; however, the overall rating is ‘almost sufficient’ as its policies and action are not yet 1.5°C aligned nor is it meeting its ‘fair share’ target or climate finance contribution.”
 

Rooftop solar isn’t going to get us over the line

And while data has been released stating that Australia has the “highest uptake of solar globally”, Hare said it does not scale to the emissions reductions nationally.

“Rooftop solar is very important but it is not the big story,” he said.

“The big story is how much is renewable energy penetrating the Australian energy system as a whole – not in one sub-sector.

“If you look at the big picture, Australia’s renewable energy in terms of its total energy use is really quite small; it’s only 7%.

“You also have to decarbonise the energy supply for big industry, transport and so on – they all have to work together to get to Paris Agreement compatible targets.”

The post Report: Australia scores the lowest among G20 countries for adopting climate policies appeared first on Stockhead.

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Energy & Critical Metals

Coal Generation In UK Jumps As Wind Speed Drops

Coal Generation In UK Jumps As Wind Speed Drops

Authored by Charles Kennedy via OilPrice.com,

Coal met some 3 percent of the UK’s electricity…

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Coal Generation In UK Jumps As Wind Speed Drops

Authored by Charles Kennedy via OilPrice.com,

Coal met some 3 percent of the UK’s electricity demand on Friday morning, reaching its highest level of Britain’s power generation in one month, amid lower wind speeds this week and an outage at a gas-powered plant, Bloomberg reports.

The last time the UK generated 3 percent of its electricity from coal was in early September when low wind generation reduced renewable power supply and triggered the massive spikes in UK wholesale electricity prices.

Utility Uniper fired up its coal-powered plant in Ratcliffe early on Friday, while the gas-fired plant in Pembroke, Wales, operated by RWE, suffered an unplanned outage.

Over the past week, gas has consistently accounted for the largest share of the UK’s electricity generation, according to data from National Grid ESO. For example, on Wednesday, gas produced 44.8 percent of Britain’s electricity, more than wind with 19.2 percent and nuclear with 12.6 percent.

Surging natural gas prices and warm and still weather in September forced the UK to fire up an old coal plant that was on standby in order to meet its electricity demand.

The UK has pledged to phase out coal-fired power generation by October 2024.

UK power company Drax could have its last two coal-fired plants in the country operating beyond the 2022 deadline it had set for closure if the UK government asks it to keep them operational amid the energy crisis in the country and the whole of Europe.

“If the government wants us to rethink our plans, we need to talk to them in the next few months,” Drax’s chief executive Will Gardiner told the Financial Times at the end of September.

Last week, the UK government committed to decarbonizing the country’s electricity system by 2035.

“While gas generation continues to play a critical role in keeping the UK electricity system secure and stable, the development of clean energy technologies means it will be used less frequently in the future,” the UK government said.

Last year, UK Prime Minister Boris Johnson said that the United Kingdom would aim to become a global leader in offshore wind energypowering every home in the country with wind by 2030.

Tyler Durden Sun, 10/17/2021 - 08:10
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Energy & Critical Metals

Will Texas choose to be pro-business or pro-market?

Tesla recent announced plans to move its corporate headquarters from California to Texas.  But there are some ironies associated with this action:
And…

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Tesla recent announced plans to move its corporate headquarters from California to Texas.  But there are some ironies associated with this action:

And despite the state’s business-friendly reputation, Tesla can’t sell vehicles directly to customers there because of a law that protects car dealerships, which Tesla does not use.

I would challenge the reporter’s use of the term ‘despite’.  Indeed, in a sense the Texas ban on direct sales from auto manufacturers is because they are pro-business, specifically, pro-car dealership business.

Another irony is that Tesla produces a type of battery that can be combined with renewable energy sources, which is not exactly the most popular type of energy in Texas:

In February, a rare winter storm caused the Texas electric grid to collapse, leaving millions of people without electricity and heat for days. Soon after, the state’s leaders sought — falsely, according to many energy experts — to blame the blackout on renewable energy.

“This shows how the Green New Deal would be a deadly deal for the United States of America,” Texas Gov. Greg Abbott said on Fox News of the blackout. “It just shows that fossil fuel is necessary for the state of Texas as well as other states to make sure we will be able to heat our homes in the wintertimes and cool our homes in the summertimes.”

Musk, a Texas resident since last year, seemed to offer a very different take Thursday, suggesting that renewable energy could, in fact, protect people from power outages.

“I was actually in Austin for that snowstorm, in a house with no electricity, no lights, no power, no heating, no internet,” he said. “This went on for several days. However, if we had the solar plus Powerwall, we would have had lights and electricity.”

I am in favor of shifting the economy toward more use of non-carbon sources of energy, such as nuclear, hydro, wind and solar.  For that reason, I am pleased with Tesla’s move, as I suspect it might begin to change the impact of the energy industry on Texas politics.  Here’s The Economist:

Even without subsidies, wind and solar power are often the cheapest new source available, so sure to grow. They are also popular, having created a lot of jobs, especially in Republican states. Iowa, Texas, Oklahoma and Kansas are the country’s top wind-energy producers. Texas employs almost as many people in wind, solar and electricity storage as the entire mining industry that Mr Trump used to harp on.

A carbon tax would be much better than clean energy subsidies, but apparently a carbon tax is politically impossible at the moment.

In an ideal world, different energy sources could compete on a level playing field, perhaps after Pigovian taxes are implemented.  But politics will almost inevitably intrude; as it will be argued that non-monetary considerations (such as power outages) are also important.  Thus while many experts blamed Texas’s power outages last winter on problems in the natural gas industry, fossil fuel supporters blamed wind energy:

[Texas governor] Greg Abbott, blamed a catastrophic grid failure in February on intermittent wind power—despite official findings that poorly maintained gas power stations were mostly to blame—and ordered the state regulator to penalise the renewables industry. . . .

The Koch-linked Texas Public Policy Foundation made the running in blaming wind for the state’s recent blackout. Like the pro-gun lobby, another skilful circumventer of public opinion, the fossil-fuels camp has also propagated a powerful conservative mythology. In contrast to cosseted renewables, it claims to be a preserve of wildcatting free spirits, which is half true, and unsubsidised, which is not.

The renewables industry’s ability to fight back has until recently been limited. It was for years too small to lobby effectively and its diverse technologies made it slow to get organised. It was therefore chiefly represented in the battle for influence by environmentalists. This was a good way to woo Democrats. But it helped its enemies on the right misrepresent the industry—now the source of around 20% of America’s electricity and over 400,000 jobs—as a left-wing boondoggle.

It will be interesting to watch how this debate plays out in the next few decades.  Major automakers have announced plans to dramatically ramp up the production of electric cars.  These cars are becoming much more popular in the area where I live (Orange County.)  Just a few days ago, Ford announced plans for a massive new electric car and battery plant in Tennessee. Will Ford be able to convince conservative Texans to buy electric F-150 pickups?  The next decade will be very interesting.

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