SP Angel Morning View -Today’s Market View, Wednesday 20th August 2025

Spodumene prices break $1,000/t helped by CATL and other mine suspensions

MiFID II exempt information – see disclaimer below

Anglo American (AAL LN) – Setback on sale of Australian coal business

Arafura (ARU AU) – c.A$80m equity raise

Lindian Resources (LIN AU) – A$91.5m raise with Kangankunde Stage 1 FID annoucnced

Premier African Minerals (PREM LN) – Testing at the Zulu lithium plant, Zimbabwe

Sovereign Metals* (SVML LN) – Exceptional first-year results from rehabilitation trials at Kasiya Rutile-Graphite Project in Malawi

Wia Gold (WIA AU) – A$30m equity raise

Spodumene prices break $1,000/t helped by CATL and other mine suspensions

• The Jianxiawo mine is the largest in China’s lithium hub of Yichun is estimated to account for ~6% of global supply.
• Closure fuelled speculation of broader Beijing crackdown on lithium oversupply as part of its anti-involution initiative.
• Earlier, the Yichun Natural Resources Bureau issued notices to eight operators asking them to provide resource/reserve verification reports after identifying discrepancies in minerals permitted for extraction and actual production.

China -Policymakers looking to stimulate consumption while raising input prices in key raw materials to reverse deflationary slide

• Economies generally need and use inflation to inflate debt away. It’s a tried and tested strategy and we suspect we are about to see more of it in the west.
• Deflation, unfortunately, does the opposite, it makes debt more expensive at the cost of smaller margins for businesses, and it rewards those who hoard cash and postpone investment.
• China is suffering a degree of deflation across some key manufacturing sectors due to excessive regional and other government stimulus, though it is currently offset by food price.
• Property construction, EVs and solar panel production are key deflationary areas to focus on, with property investment far lower than it was.
• Property deflation is good for lowering household costs but is bad for lenders and existing owners.
• Private companies hold 95% market share or more in the solar and batteries sectors and 65% in EVs vs 35% in steel and 50% in cement according to the FT.
• New inflation in EVs and Solar panels sounds better with China already undercutting other global manufacturers by some margin.
• The FT also wrote yesterday that China’s GDP deflator has fallen for since Q2 2023 with CPI averaging just 0.1% yoy highlighting the deflation trend and that with PPI commodities drove ~2/3rds of deflation.
• Policymakers need to slow the funding of new capacity and start encouraging real margin and wage growth though this is going to be difficult with US tariffs slowing sales growth in China’s largest export market.
• Consumer spending can be stimulated through the provision of social services such as education, childcare, healthcare and state-run care homes enabling families to reduce their level of savings from >40%

Conclusion: China is focussing on stimulating domestic demand, as requested by the US, and on raising commodity input prices.

Once Chinese policymakers discover the secret to unlocking household savings for consumption this could drive a new wave of demand fuelled inflation which will be good for China but may stimulate new inflation in the West. So far China is exporting deflation into the West, once this is reversed policymakers are going to struggle to maintain interest rates while holding back inflation back.

Commodities: While China has been a strong driver of demand China Inc. has worked hard to reduce prices of many commodities to artificially low levels.

We see China’s new focus on margins in place of output as positive for industrial commodities starting with Lithium and Rare Earths and extending to a range of other industrial and listed commodities.

IGTV – The Future of Mining: Gold, Copper, Rare Earths & M&A:  https://youtu.be/-G59iOq6x2c?si=z4fVkyHNP9isbOTB

The News Forum – The Buck Stops Here: https://www.thenewsforum.ca/series/thebuckstopshere

Economics

China – Prime loan rates remain unchanged despite weak economic data

• 1y and 5 y rates, a reference for short term corporate loans and new mortgages, respectively, came in line with expectations.
• That was the third month in a row that banks kept rates unchanged.
• The central bank may step in with a rate cut, potentially as early as in coming few weeks, Bloomberg writes.
• 1y Loan Prime Rate (Cur/Prev/Est): 3.0/3.0/3.0
• 5y Loan Prime Rate (Cur/Prev/Est): 3.5/3.5/3.5

UK – Inflation hits a 18-month high, ahead of market expectations, on higher food, fuel and transport prices.

• Services inflation, a closely watched gauge for core pricing pressures, climbed to 5%, beating BOE target for 4.9%.
• The pound gained back a drop following the announcement trading a little changed around the 1.35 mark.
• The BOE expect inflation to peak at 4% in September, double the 2% target, before pulling back after that.
• Odds of a rate cut before YE pulled back only so slightly suggesting stronger inflation numbers were more or less expected.
• 2y bond yields were actually off following the release, although, not much lower (-3bp).
• CPI (%mom, Jul/Jun/Est): 0.1/0.3/0.0
• CPI (%yoy, Jul/Jun/Est): 3.8/3.6/3.7
• Core CPI (%yoy, Jul/Jun/Est): 3.8/3.7/3.7
• CPI Services (%yoy, Jul/Jun/Est): 5.0/4.7/4.8

Currencies

US$1.1644/eur vs 1.1681/eur previous. Yen 147.56/$ vs 147.66/$. SAr 17.686/$ vs 17.630/$. $1.350/gbp vs $1.352/gbp. 0.644/aud vs 0.649/aud. CNY 7.179/$ vs 7.183/$.

Dollar Index 98.28 vs   98.04 previous.

Precious metals:

Gold US$3,325/oz vs US$3,340/oz previous

   Gold ETFs 92.6moz vs 92.6moz previous

Platinum US$1,320/oz vs US$1,340/oz previous

Palladium US$1,112/oz vs US$1,124/oz previous

Silver US$37.2/oz vs US$38.0/oz previous

Rhodium US$7,575/oz vs US$7,575/oz previous

Base metals:   

Copper US$9,689/t vs US$9,759/t previous

Aluminium US$2,565/t vs US$2,572/t previous

Nickel US$14,925/t vs US$15,115/t previous

Zinc US$2,770/t vs US$2,774/t previous

Lead US$1,969/t vs US$1,983/t previous

Tin US$33,760/t vs US$33,875/t previous

Energy:           

Oil US$66.5/bbl vs US$66.0/bbl previous

• Crude oil prices edged higher as the API estimated a w/w draw of 2.4mb to crude (-1.2mb exp), offset by builds of 1.0mb to gasoline and 0.5mb to distillate stocks.
• European energy prices were stable with France’s nuclear generation rising 5% w/w to 68% of 61.4GW maximum capacity.
• Masdar and its consortium partners have closed project financing to cover a substantial portion of $1.1bn build costs on the 2GW Al Sadawi solar project in Saudi Arabia, which is expected to commence generating power in 2027.

Natural Gas €31.4/MWh vs €30.9/MWh previous

Uranium Futures $73.2/lb vs $73.2/lb previous

Bulk:   

Iron Ore 62% Fe Spot (cfr Dalian) US$109.3/t vs US$109.7/t

Chinese steel rebar 25mm US$482.4/t vs US$482.4/t

HCC FOB Australia US$189.8/t vs US$189.8/t

Thermal coal swap Australia FOB US$111.0/t vs US$110.3/t

Other:  

Cobalt LME 3m US$33,335/t vs US$33,335/t

NdPr Rare Earth Oxide (China) US$88,246/t vs US$81,795/t

Lithium carbonate 99% (China) US$11,980/t vs US$11,973/t

China Spodumene Li2O 6%min CIF US$1,020/t vs US$990/t

Ferro-Manganese European Mn78% min US$1,005/t vs US$1,005/t

China Tungsten APT 88.5% FOB US$493/mtu vs US$483/mtu

China Graphite Flake -194 FOB US$410/t vs US$410/t

Europe Vanadium Pentoxide 98% US$5.4/lb vs US$5.4/lb

Europe Ferro-Vanadium 80% US$23.4/kg vs US$23.4/kg

China Ilmenite Concentrate TiO2 US$268/t vs US$268/t

China Rutile Concentrate 95% TiO2 US$1,093/t vs US$1,093/t

Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t

Brazil Potash CFR Granular Spot US$355.0/t vs US$355.0/t

Germanium China 99.99% US$3,025.0/kg vs US$3,025.0/kg

China Gallium 99.99% US$395.0/kg vs US$395.0/kg

EV & battery news

Caterpillar and Redwood agree deal for battery recycling

• Redwood Materials and Caterpillar have partnered to recycle lithium-ion batteries from the equipment manufacturer’s R1700 XE electric underground loader.
• The R1700 XE has a 213kWh pack that carries the same storage capacity as more than 17,000 iPhones, and is a figurative ‘gold-mine’ for Redwoods recycling business
• Recovered lithium, cobalt and nickel are reintegrated into the supply chain, creating a cradle-to-grave-to-cradle recycling model.
• Redwood currently recycles materials equivalent to 250,000 EV batteries annually.
• The partnership helps reduce dependence on newly mined materials and supports sustainable mining practices amid rising battery demand.

Tesla slashes UK lease prices by 40% amid sales slump

• Tesla is offering up to 40% discounts to leasing firms in the UK to clear stock and ease storage constraints as popularity with the brand has plummeted in recent months.
• Model 3 leases have dropped to around £252/month, down from £600–£700 last year, with Model Y leases now from £377–£400/month.
• UK sales of Tesla vehicles plunged 60% in July to just 987 units, cutting Tesla’s market share to approximately 0.7%, while rival BYD rose to 2.3%.

 Company news

Anglo American (AAL LN) 2,131p, Mkt Cap £25.6bn – Setback on sale of Australian coal business

• Yesterday afternoon, Anglo American issued a statement on reports that Peabody Energy had terminated its plans to acquire Anglo American’s steelmaking coal business in Australia.
• In November last year, Peabody agreed to pay US$3.8bn for the assets, including US$2.05bn in cash, a deferred cash consideration of US$725m and a price-linked earnout of up to US$550m and contingent cash consideration of $450m.
• In yesterday’s announcement, Anglo American confirmed that it is continuing to “make good progress towards the safe restart of Moranbah North and firmly believes that the event that occurred on 31 March 2025 at the mine, which forms part of Anglo American’s steelmaking coal business, does not constitute a Material Adverse Change (“MAC”) under the definitive agreements with Peabody”.
• Yesterday’s announcement cites “the lack of damage to the mine and equipment, as well as the substantial progress made with the regulator, our employees and the unions, and other stakeholders as part of the regulatory process towards a safe restart of the mine”.
• Anglo American says that it has strived to ”avoid a legal dispute … [and that following] … Peabody’s decision not to proceed with the transaction … [it continues to] … to focus on the safe restart of Moranbah North and in delivering value from the entirety of our SMC portfolio”.
• CEO, Duncan Wanblad, said that Anglo American is “confident that we will successfully conclude an alternative sales process for value in due course”.

Arafura (ARU AU) A$0.19, Mkt Cap A$542m – ~A$80m equity raise

• The Company raised ~A$80m at A$0.19 to advance the Nolans REE Project, Australia (NT).
• In addition, the Company is launching a rights issue for up to A$5m.
• The placing price represents a ~14% discount to the last closing price.
• Hancock Prospecting, a ~9% shareholder in the Company, is taking part in the placing.
• Following the placing the Company will a have a cash balance of A$107m.
• Net proceeds to be used:
  • Working capital;
  • Allocation to project development capital upon FID.
• The Company continues discussion regarding equity part of the project funding.
• The project is envisaged as an integrated facility producing separated oxides.
• 4.4ktpa NdPr oxides and 0.6ktpa SEG/HRE oxides over 38y LOM.
• US$1.2bn capex generating US$1.7bn NPV8 AT and 17% IRR AT (@ US$133/kg NdPd price).
• NPV8 AT US$2.5bn and 21% IRR AT (@ US$163/kg NdPr).
• 66% of NdPr is under binding offtakes with Hyundai & Kia, Siemens and Traxys.

Lindian Resources (LIN AU) A$0.22, Mkt Cap A$266m – A$91.5m raise with Kangankunde Stage 1 FID annoucnced

• The Company raised A$91.5m at A$0.21 declaring FID on the Kangankunde REE Project, Malawi.
• Placing price represents a ~6% discount to the last closing price.
• Stage 1 is now fully funded to first production.
• First production is targeted for 4QCY26.
• Additionally, proceeds to be used to increase ownership to 100% (from current 67%) as well as engineering studies for Stage 2 expansion.
• Stage 1 envisages a 450ktpa open pit operation producing ~15ktpa monazite concentrate (55% TREO) over 45y LOM.
• Low capital intensity with a total ~US$40m development spend is attributed to simple gravity and magnetic separation flowsheet for production of concentrate to be sold to third parties including Iluka (6ktpa over 15y offtake agreement for a total 90kt).
• Stage 2 expansion has the potential to grow production to 50ktpa.
• The Company will launch an expansion FS to consider expansion beyond the 50ktpa target.
• Iluka holds a ROFR over Stage 2 production expansion for up to 375kt or 25ktpa over 15y (ie 31ktpa incl Stage 1) subject to Iluka providing a 50% debt funding.
• Iluka has also agreed to provide a US$20m Stage 1 construction loan earlier.
• The Company will spend US$10m to increase its stake in the project to 100%.

Premier African Minerals (PREM LN) 0.04p, Mkt Cap £19m – Testing at the Zulu lithium plant, Zimbabwe

• Premier African Minerals reports that the second phase of pilot-plant testing at its Zulu lithium plant in Zimbabwe has now been completed and that it has verified the plant’s ability to “run continuously as intended and is now commissioned such that all plant components operate and are integrated and automated to support the ongoing optimisation necessary to continuously meet saleable concentrate grade”.
•  Today’s announcement confirms that the plant has been able to produce “Saleable Concentrate … [defined as >5% Li₂O] … on numerous occasions with grades up to 6,2% Li2O, and the result of ongoing optimisation is expected to be that this is achieved consistently”.
• The company says that it is “now reassured that the process has moved from a commissioning phase to that of a refining and optimising phase”.
• Premier African Minerals also confirms that as “some operating parameters have changed since the test work done last year on the secondary floatation plant, the board have elected to postpone this purchase to allow our newly appointed managing director to fully assess the rationale and benefits of proceeding”.
• The announcement also reports that a second site visit by “a large trading house” considering an offtake agreement for spodumene concentrate has “confirmed that the minimum requirements for their purchase of spodumene is Saleable Concentrate”.
•  CEO, George Roach, welcomed the progress “on advancing Zulu from its current early stage to the diversified industrial minerals producer we believe it can become”.
•  Commenting on the importance of a successful conclusion of negotiations with the potential off-taker, Mr. Roach explained that they “will be important and pivotal … [and that] … Achieving full optimisation and settling outstanding debt will involve securing additional funding and continuing to apply strong, strategic management”.

Conclusion: Further testing at the Zulu lithium plant has been completed and showed progress on achieving a saleable spodumene concentrate.

A decision on the purchase of secondary flotation equipment has been deferred to allow the incoming managing director to assess the purchase plan.

Sovereign Metals* (SVML LN) 36.5p, Mkt Cap £251m – Exceptional first-year results from rehabilitation trials at Kasiya Rutile-Graphite Project in Malawi

(Sovereign currently holds 100% of the Kasiya project. Malawi has 10% free carry right. Rio Tinto holds 18.5% of Sovereign Metals)

• Sovereign Metals report exceptional first-year results from its rehabilitation trials at the Kasiya Rutile-Graphite Project in Malawi.
• The success of these trials along with the data will guide the ‘progressive rehabilitation strategy’ for the ongoing Definitive Feasibility Study.
• The trials show the post post-mining land at Kasiya “can achieve superior agricultural productivity compared to pre-mining conditions.”
• Maize yields of 5.2t/Ha are reporting on post-mining land vs the regional average of 1t/Ha supporting the process of progressive mining, back-filling and rehabilitation.
• The trials on a 10-Ha pilot site involved 28 local farmers as partners proving the rehabilitation process to be effective and ready for larger scale implementation.
• Six-step process:
  • Land preparation with complete backfill and grading to original contours.
  • Soil nutrient enhancement via application of locally sourced lime, biochar and fertilisers.
  • Mechanical integration using community-sourced equipment.
  • Strategic planting of bamboo blocks with intercropped maize and legumes.
  • Harvest success delivering 5.2 tonnes/hectare average yield.
  • Year-round productivity enabled by drip irrigation for winter farming programs.
• “The rehabilitation approach combines proven agronomic practices with innovative techniques, including biochar application, precision nutrient management, and intercropping with Giant Bamboo”
• The work and collaborative approach strengthens Sovereign’s social license within the local community, within Malawi and with the development groups watching the project.
• Last year The Malawi government estimated ~44% of Malawi’s corn crop had failed affecting ~2m households with 20m people needing ~600,000t of food aid.

Conclusion: Full credit to the combined Sovereign, Rio Tinto and other experts for such impressive results. Malawi has struggled to feed its population through floods and then drought conditions and the results at Kasiya could form the basis of a much larger land improvement program for the benefit of the Kasiya community and more generally across Malawi.

*SP Angel act as Nomad and broker to Sovereign Metals. An SP Angel analyst has visited the Kasiya mine site.

Wia Gold* (WIA AU) A$0.33, Mkt Cap A$433m – A$30m equity raise

• The Company raised A$30m at A$0.30 to progress development of the Kokoseb Gold Project, Namibia.
• The placing price implies a ~5% discount to the last closing price.
• Net proceeds to be used for
  • Resource development and exploration in Namibia;
  • Studies and testwork to advance Kokoseb towards DFS completion;
  • Permitting, social and environmental;
  • Working capital.
• Scoping Study remains on target for completion 3QCY25.
• The Company will have A$55m in cash post raise.

*An SP Angel Analyst holds shares in WIA Gold

LSE Group Starmine awards for 2025 / 2024 commodity forecasting:

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls for Q1 2025

No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024

Analysts

John Meyer –John.Meyer@spangel.co.uk – 0203 470 0490

Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484

Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474

Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476

Sales

Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472

Abigail Wayne –Abigail.Wayne@spangel.co.uk – 0203 470 0534

Rob Rees –Rob.Rees@spangel.co.uk – 0203 470 0535

Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471

George Krokos – george.krokos@spangel.co.uk – 0203 470 0486

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*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

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