The Story of Voisey’s Bay: The Discovery (Part 1 of 3)
Presented by: Equitas Resources, “Nickel exploration in Labrador”
The legendary story of one of Canada’s most significant base metal discoveries happened just before the dawn of the internet era. While some investors recall the sequence of events and the value that was created by Diamond Fields, there are many investors today, both new and old, who are not familiar with the story of Voisey’s Bay.
For this infographic, we have turned to Jacquie McNish’s fabulous book The Big Score, which documents the history of the discovery, biographical elements of Robert Friedland’s life, and the ensuing bidding war between Inco and Falconbridge that led to one of the most spectacular takeovers in mining history. If you like these infographics, then look into buying Jacquie’s book. It was gripping and full of information.
By its very definition, a discovery is the breakthrough action of finding something of value that no one knew existed. Discoveries come in all shapes and sizes – but it turns out many of the very best discoveries happen in the most unsuspecting of conditions.
Labrador is located on the Northeast tip of Quebec in Canada, and it’s in this remote area that the Voisey’s Bay discovery takes place. Labrador is bigger than Great Britain and has over 8,000km of coastline, yet only a population of just 26,700. For context, caribou outnumber people in Labrador by a ratio of 13:1.
In 1985, geologists of the Newfoundland Department of Mines and Energy conducted a survey of one of the most remote parts of Labrador. Voisey’s Bay is 35km from Nain, a small town of 1,000 people.
The team, in a helicopter-supported survey, tested samples in the area, but were not encouraged by the low metal content of the weathered rocks exposed at surface. They left and didn’t look back.
In early 1993, Michael McMurrough of a fledgling company called Diamond Fields Resources was looking for untapped diamond properties to add to the company’s property portfolio. He had heard that a place called “Labrador” had ancient Archean rock formations – one of the earth’s oldest rock groups – where diamonds can form in kimberlite pipes. While Labrador’s wealth in iron ore is well-documented, no diamonds have ever been discovered in the region.
Diamond Fields’ geologist, Rod Baker, was sent to Newfoundland in April 1993 but found that the best diamond prospects had just been staked by two Newfoundlanders. Al Chislett and Chris Verbiski, and their prospecting outfit named Archean Resources, eventually convinced Diamond Fields to pay $372,000 in annual instalments over four years to acquire their claims. Diamond Fields also agreed to pay $500,000 to start an exploration program.
The two prospectors sampled throughout the summer of 1993 without much luck, but they did chip some samples of chalcopyrite, a copper-bearing mineral, from an outcrop. The samples came back with 2% copper, and they pushed for Diamond Fields to put more money into the exploration program.
At this time, Diamond Fields was a fledgling company. Running under Robert Friedland’s umbrella of Ivanhoe Capital, the company had its share of issues. Legal problems were mounting, and the company had finally just raised cash in a desperation move: the company impressed investors with its idea of “vacuuming” diamonds off the seafloor near Namibia.
It was company geologist Richard Garnett that convinced the board of Diamond Fields to pursue the Labrador findings, which he had been tracking. The company eventually was able to allocate $220,000 to Labrador – or 40% of what Chislett and Verbiski recommended for follow-up spending.
In August 1994, the prospectors received more detailed assays from the samples they collected – assays that confirmed a multi-element deposit with cobaltite, copper, magnetite, and exceptionally high amounts of nickel. In fall, the team tried to beat winter by executing the next phase of exploration.
On drill hole number two: they hit. The drill core was yellow – not from gold, but from high-grade massive sulphides. The hole was 33 metres long, and signified that Diamond Fields was finally onto something.
At this point, Robert Friedland reigned in control of the company with one mission: to auction off the discovery for the highest price.
The 50 Minerals Critical to U.S. Security
This graphic lists all minerals that are deemed critical to both the economic and national security of the United States.
The 50 Minerals Critical to U.S. Security
The U.S. aims to cut its greenhouse gas emissions in half by 2030 as part of its commitment to tackling climate change, but might be lacking the critical minerals needed to achieve its goals.
The American green economy will rely on renewable sources of energy like wind and solar, along with the electrification of transportation. However, local production of the raw materials necessary to produce these technologies, including solar panels, wind turbines, and electric vehicles, is lacking. Understandably, this has raised concerns in Washington.
In this graphic, based on data from the U.S. Geological Survey, we list all of the minerals that the government has deemed critical to both the economic and national security of the United States.
What are Critical Minerals?
A critical mineral is defined as a non-fuel material considered vital for the economic well-being of the world’s major and emerging economies, whose supply may be at risk. This can be due to geological scarcity, geopolitical issues, trade policy, or other factors.
In 2018, the U.S. Department of the Interior released a list of 35 critical minerals. The new list, released in February 2022, contains 15 more commodities.
Much of the increase in the new list is the result of splitting the rare earth elements and platinum group elements into individual entries rather than including them as “mineral groups.” In addition, the 2022 list of critical minerals adds nickel and zinc to the list while removing helium, potash, rhenium, and strontium.
|Mineral||Example Uses||Net Import Reliance|
|Beryllium||Alloying agent in aerospace, defense industries||11%|
|Aluminum||Power lines, construction, electronics||13%|
|Zirconium||High-temparature ceramics production||25%|
|Germanium||Fiber optics, night vision applications||50%|
|Nickel||Stainless steel, rechargeable batteries||50%|
|Tin||Coatings, alloys for steel||75%|
|Cobalt||Rechargeable batteries, superalloys||76%|
|Antimony||Lead-acid batteries, flame retardants||81%|
|Zinc||Metallurgy to produce galvanized steel||83%|
|Titanium||White pigment, metal alloys||88%|
|Bismuth||Medical, atomic research||94%|
|Tellurium||Solar cells, thermoelectric devices||95%|
|Vanadium||Alloying agent for iron and steel||96%|
|Arsenic||Semi-conductors, lumber preservatives, pesticides||100%|
|Cerium||Catalytic converters, ceramics, glass, metallurgy||100%|
|Dysprosium||Data storage devices, lasers||100%|
|Erbium||Fiber optics, optical amplifiers, lasers||100%|
|Europium||Phosphors, nuclear control rods||100%|
|Fluorspar||Manufacture of aluminum, cement, steel, gasoline||100%|
|Gadolinium||Medical imaging, steelmaking||100%|
|Gallium||Integrated circuits, LEDs||100%|
|Holmium||Permanent magnets, nuclear control rods||100%|
|Indium||Liquid crystal display screens||100%|
|Lanthanum||Catalysts, ceramics, glass, polishing compounds||100%|
|Lutetium||Scintillators for medical imaging, cancer therapies||100%|
|Neodymium||Rubber catalysts, medical, industrial lasers||100%|
|Praseodymium||Permanent magnets, batteries, aerospace alloys||100%|
|Rubidium||Research, development in electronics||100%|
|Samarium||Cancer treatment, absorber in nuclear reactors||100%|
|Scandium||Alloys, ceramics, fuel cells||100%|
|Tantalum||Electronic components, superalloys||100%|
|Terbium||Permanent magnets, fiber optics, lasers||100%|
|Thulium||Metal alloys, lasers||100%|
|Ytterbium||Catalysts, scintillometers, lasers, metallurgy||100%|
|Yttrium||Ceramic, catalysts, lasers, metallurgy, phosphors||100%|
|Iridium||Coating of anodes for electrochemical processes||No data available|
|Rhodium||Catalytic converters, electrical components||No data available|
|Ruthenium||Electrical contacts, chip resistors in computers||No data available|
|Hafnium||Nuclear control rods, alloys||Net exporter|
The challenge for the U.S. is that the local production of these raw materials is extremely limited.
For instance, in 2021 there was only one operating nickel mine in the country, the Eagle mine in Michigan. The facility ships its concentrates abroad for refining and is scheduled to close in 2025. Likewise, the country only hosted one lithium mine, the Silver Peak Mine in Nevada.
At the same time, most of the country’s supply of critical minerals depends on countries that have historically competed with America.
China’s Dominance in Minerals
Perhaps unsurprisingly, China is the single largest supply source of mineral commodities for the United States.
Cesium, a critical metal used in a wide range of manufacturing, is one example. There are only three pegmatite mines in the world that can produce cesium, and all were controlled by Chinese companies in 2021.
Furthermore, China refines nearly 90% of the world’s rare earths. Despite the name, these elements are abundant on the Earth’s crust and make up the majority of listed critical minerals. They are essential for a variety of products like EVs, advanced ceramics, computers, smartphones, wind turbines, monitors, and fiber optics.
After China, the next largest source of mineral commodities to the United States has been Canada, which provided the United States with 16 different elements in 2021.
The Rising Demand for Critical Minerals
As the world’s clean energy transitions gather pace, demand for critical minerals is expected to grow quickly.
According to the International Energy Association, the rise of low-carbon power generation is projected to triple mineral demand from this sector by 2040.
The shift to a sustainable economy is important, and consequently, securing the critical minerals necessary for it is just as vital.
Visualizing China’s Dominance in Clean Energy Metals
Despite being the world’s biggest carbon emitter, China is also a key producer of most of the critical minerals for the green revolution.
Visualizing China’s Dominance in Clean Energy Metals
Renewable sources of energy are expected to replace fossil fuels over the coming decades, and this large-scale transition will have a downstream effect on the demand of raw materials. More green energy means more wind turbines, solar panels, and batteries needed, and more clean energy metals necessary to build these technologies.
This visualization, based on data from the International Energy Agency (IEA), illustrates where the extraction and processing of key metals for the green revolution take place.
It shows that despite being the world’s biggest carbon polluter, China is also the largest producer of most of the world’s critical minerals for the green revolution.
Where Clean Energy Metals are Produced
China produces 60% of all rare earth elements used as components in high technology devices, including smartphones and computers.
The country also has a 13% share of the lithium production market, which is still dominated by Australia (52%) and Chile (22%). The highly reactive element is key to producing rechargeable batteries for mobile phones, laptops, and electric vehicles.
But even more than extraction, China is the dominant economy when it comes to processing operations. The country’s share of refining is around 35% for nickel, 58% for lithium, 65% for cobalt, and 87% for rare earth elements.
Despite being the largest economy in the world, the U.S. does not appear among the largest producers of any of the metals listed. To shorten the gap, the Biden administration recently launched an executive order to review the American strategy for critical and strategic materials.
It’s also worth noting that Russia also does not appear among the top producers when it comes to clean energy metals, despite being one of the world’s leading producers of minerals like copper, iron, and palladium.
Low Regulation in the Clean Metal Supply Chain
While China leads all countries in terms of cobalt processing, the metal itself is primarily extracted in the Democratic Republic of Congo (DRC). Still, Chinese interests own 15 of the 17 industrial cobalt operations in the DRC, according to a data analysis by The New York Times and Benchmark Mineral Intelligence.
Unfortunately, the DRC’s cobalt production has been criticized due to reports of corruption and lack of regulation.
Part of the Congolese cobalt comes from artisanal mines with low regulation. Of the 255,000 Congolese artisanal miners, an estimated 40,000 are children, some as young as six years old.
The Rise of Clean Energy Metals
The necessary shift from fossil fuels to renewable energy opens up interesting questions about how geopolitics, and these supply chains, will be affected.
In the race to secure raw materials needed for the green revolution, new world powers could emerge as demand for clean energy metals grows.
For now, China has the lead.
Misc6 days ago
The Top 10 Largest Nuclear Explosions, Visualized
Technology3 weeks ago
How Do Big Tech Giants Make Their Billions?
Markets4 weeks ago
Satellite Maps: Shanghai’s Supply Chain Standstill
Energy2 weeks ago
Mapped: Solar and Wind Power by Country
Datastream3 weeks ago
Visualizing Companies with the Most Patents Granted in 2021
Technology1 week ago
Synthetic Biology: The $3.6 Trillion Science Changing Life as We Know It
Markets3 weeks ago
Why Investors Tuned Out Netflix
Automotive3 weeks ago
Timeline: The Rise, Fall, and Return of the Hummer