Investors should give chief executives planning to re-invent firms as digital businesses a simple message: there is no point starting now.
TOKYO -- The women's floor of the Takashimaya Nihombashi department store was filled with colorful summer outfits and red-and-yellow sale signs, and shop attendants waiting to greet customers with friendly calls of "Irasshaimase," or "welcome." The only thing missing was the customers.
SAN FRANCISCO: US consumers spent US$211.5 billion during Q2 on e-commerce, up 31.8 percent quarter over quarter.
The US Census Bureau data provides the latest picture of how the coronavirus pandemic has accelerated the shift to online shopping.
E-commerce now accounts for 16.1 percent of all US sales, up from 11.8 percent in Q1.
With bricks-and-mortar stores closing, many consumers have turned to online retailers for essential goods like paper towels and hand sanitizer, which has led to an uptick in purchases for things like office supplies and electronics.
Online grocery orders also surged as many consumers opted to skip trips to the supermarket.
Amazon and Walmart reported massive increases in e-commerce sales in Q2, while Target, reported similar figures in Q1.
To our interns: We are listening to you. Our 2020 Summer intern class represents a cohort that is moving faster, more boldly and with greater purpose than our clients may realize. To the extent investors are rewarded for predicting changes in habits or attitudes, we believe they must listen to you. If companies want to stay ahead of changing consumer tastes, they must listen to you. And if Morgan Stanley aims to help our clients make the best investment and capital allocation decisions… then we must listen to you. From groups like these come the future generation of business leaders, and they already seem to be several steps ahead of their time. We offer our thanks to our 2020 intern class for providing these unique insights. We’re listening.
You’re ahead of the game… In autos, your tastes appear several steps ahead of the market. Your preference for Tesla as the top auto brand at 30% compares to less than 2% of their current US market share. And 22% of you plan to buy an all-electric car in the next 5 years… a rate that exceeds our US EV penetration forecast in the year 2033. You’re at least a decade ahead of the market in this regard.
Within internet, it seems you are solidifying the argument for ‘winner take all’ or ‘winner take most’ in key markets as evidenced by your preference for Uber as your go-to rideshare (82% vs. 81% last year), Spotify in music streaming (73% vs. 68% last year) and Netflix in subscription video (57% vs. 44% last year).
Your continued sponsorship of the Apple cloud/ecosystem remains very high as nearly 90% of you have an iPhone as your primary phone with 69% of the intern class spending money on at least one of Apple’s services in the last 6 months, up from 57% this time last year.
Your opinions around markets post COVID-19 are insightful. For example on the telecom side, working from home arrangements have increased the demand for broadband connectivity reducing the percentage of interns only having wireless internet access from 23% to 13% this year. On the shopping side, while mall visits are down significantly as a result of COVID-19 (just 19% of interns visited a mall in the last month versus 51% last year), the proportion of interns who prefer to shop in-store for apparel and footwear has remained relatively stable (64% this year vs. 65% last year), suggesting there is still a role for brick & mortar in a post-COVID world.
In many cases, your willingness to adapt to change is outpacing the suite of products and technologies currently available in the market. 75% of you expect fully autonomous cars will be a viable public transport option by 2030. You seem to have strong conviction on this point as nearly 50% of you don’t even think owning a car will be necessary by the end of this decade. Maybe we need to rethink our 0.3% fully autonomous global penetration forecast by 2030!
And on issues of ESG/Sustainability, are investors and companies prepared for the pace of change you will usher in? Sustainability is becoming increasingly more important for this generation, with interns planning to increase recycling efforts (88% vs. 75% in ’19), buy more sustainable products (75% vs. 57%) and pursue sustainable investing (42% vs. 36%). For the majority (72%), sustainability performance is an important factor in choosing an employer. 23% listed diversity as the #1 sustainability challenge (vs. only 9% last year)… supporting our research department’s view that “social” implications are again foremost on investors’ minds.
Lumber shoots to a 30 year high.
Daily foot traffic to Home Depot stores since April has been running at least 35% above last year’s, according to Unacast Inc., which tracks location data from 25 million cellphones on any given day. In 26 states, traffic doubled following a surge in late May.
After a long day working from home, you just need a Jacuzzi.
Even in the all-markets rally that has sent stocks, bonds and commodities rising in unison since the economic shutdown, forest products stand out for how sharply their prices have climbed.
Lumber futures have more than doubled since early April, when roughly 40% of North America’s sawing capacity was curtailed by mill owners. They expected widespread job loss and economic uncertainty would torpedo demand for building products.
Instead, stuck-at-home Americans undertook home-improvement projects en masse. Home builders are rushing to meet soaring demand for houses, stoked by historically low mortgage rates and a flight to the suburbs.
“Our sales folks are spending three, four, five hours a day, dealing with customers that don’t have any inventory,” said Christopher McIver, vice president of sales and marketing at West Fraser Timber Co., North America’s largest lumber producer. “Whether it’s in plywood or whether it’s in lumber, everybody is still very, very short, including the box stores.”
Exxon Mobil Corp. was removed from the Dow Jones Industrial Average yesterday after more than 90 years, in a largely symbolic move that nevertheless sums up the oil industry's woes in the last five years.
Exxon was pulled from the widely watched stock index along with Pfizer Inc. and Raytheon Technologies Corp., according to a news release. The three companies were replaced by SalesForce.com Inc., Amgen Inc. and Honeywell International Inc.
S&P Dow Jones Indices said the changes were a routine shuffling of the index's members to remove "overlap between companies of similar scope and adding new types of businesses that better reflect the American economy."
Exxon and its oil-producing peers are far from dead, however. Chevron Corp., the second-biggest U.S. oil company, remains a part of the index, and Exxon's market capitalization is bigger than those of two of the companies that joined the Dow.
But the decision shows how quickly the energy industry is changing amid climate concerns, falling oil prices and the rise of renewable power sources.
"ExxonMobil out of the DJIA. Incredible," Chris Nelder, a manager at the Rocky Mountain Institute, said on Twitter. "I wonder which will be the first wind or solar company to join it."
The decision doesn't affect Exxon's business or the fundamentals of the oil industry, Exxon spokesman Casey Norton wrote in a statement.
"Our portfolio is the strongest it has been in more than two decades, and our focus remains on creating shareholder value by responsibly meeting the world's energy needs," Norton wrote.
Exxon has been a part of the Dow Jones average since 1928, when the company was known as Standard Oil of New Jersey, according to published reports. As recently as 2011, when oil prices were still high, it was the largest U.S. corporation by market capitalization.
Its stock price has fallen by nearly half since those days, and tech companies like Apple Inc. have eclipsed Big Oil as the country's largest corporations.
Exxon has been betting on a continued future for oil and gas, and it has struggled since the coronavirus pandemic slashed oil prices, said Danielle Fugere, president of the activist investor group As You Sow.
As oil consumption fell in the last six months, European oil producers like BP PLC and Royal Dutch Shell PLC cut their dividends and accelerated their plans to diversify into cleaner sources of energy (Energywire, Aug. 4).
Exxon has taken on debt to maintain its dividend, even as it signaled that the pandemic could force it to write down the value of its oil and gas fields.
"It's just failing to adapt to a changing energy market," Fugere said.
- US stocks closed at new records on Tuesday, but US bank Jefferies thinks stocks have reached the sort of "euphoria" that tends to precede a correction.
- Sean Darby, global equity strategist at Jefferies said in a note: "Some of our indicators are beginning to move into the 'euphoria' stage, and we caution that managing drawdown risk is coming to the fore."
- The bank said a close watch should be kept on the US 30-year yield and "any sign that the US money supply is rolling over."
Just as the S&P 500 and Nasdaq hit their highest levels ever on Wednesday, one analyst says the market is starting to show signs of the sort of "euphoria" that tends to come before a major correction.
In a note Tuesday, Sean Darby, global equity strategist at Jefferies said: "US earnings expectations have certainly 'V-shaped' and this has been accompanied by an enormous reversal in risk appetite in almost a miniscule amount of financial time."
"Some of our indicators are beginning to move into the 'euphoria' stage, and we caution that managing drawdown risk is coming to the fore," he added.
The S&P 500 closed at yet another high on Tuesday, ending the day at 3443 points. The tech-heavy Nasdaq also hit its highest close ever at 11,466. The S&P 500 has recovered 53% since touching coronavirus lows in March.
Stimulus packages worth trillions, coupled with rock bottom interest rates, have helped investors flock to equity markets in recent months, and bolster pandemic stricken companies, which in turn has pushed stocks higher.
The investment bank said while the coronavirus pandemic proved to be a challenge for corporations, the "recovery in US earnings revisions has been the fastest on our records."
But Darby said there are signs the stock market rally is running out of steam.
"In the last 10 or so trading days," Darby said, "the US equity markets have begun to display some signs of exhaustion despite the new highs being made."
"We highlight that this rally has been well above the average of the previous S&P 500 recoveries from market lows."
The bank points out the following worrying signals:
- Increasing divergence of the top 20 S&P 500 stocks from their 200-day moving average.
- The S&P 500 Index is making new highs, but the equal-weighted index — which gives equal weighting to all 500 companies in the index — is flat-lining.
- Global risk appetite and S&P 500 sentiment indicators are pretty close to "extreme" levels.
Jefferies concludes: "The bottom line is that as investors 'buy' into the 'earnings growth', risk appetite is moving into the euphoria stage."
"The obvious catalysts for a correction are not present but the technical 'stretch' of some of our indicators are a warning sign. A close watch should be kept on the US 30-year yield and any sign that that US money supply is rolling over," the bank added.
By Loz Blain
August 25, 2020
NDB makes remarkable claims about its self-charging nano-diamond battery, here seen mocked up as a circuit board component
California company NDB says its nano-diamond batteries will absolutely upend the energy equation, acting like tiny nuclear generators. They will blow any energy density comparison out of the water, lasting anywhere from a decade to 28,000 years without ever needing a charge. They will offer higher power density than lithium-ion. They will be nigh-on indestructible and totally safe in an electric car crash. And in some applications, like electric cars, they stand to be considerably cheaper than current lithium-ion packs despite their huge advantages.
The heart of each cell is a small piece of recycled nuclear waste. NDB uses graphite nuclear reactor parts that have absorbed radiation from nuclear fuel rods and have themselves become radioactive. Untreated, it's high-grade nuclear waste: dangerous, difficult and expensive to store, with a very long half-life.
This graphite is rich in the carbon-14 radioisotope, which undergoes beta decay into nitrogen, releasing an anti-neutrino and a beta decay electron in the process. NDB takes this graphite, purifies it and uses it to create tiny carbon-14 diamonds. The diamond structure acts as a semiconductor and heat sink, collecting the charge and transporting it out. Completely encasing the radioactive carbon-14 diamond is a layer of cheap, non-radioactive, lab-created carbon-12 diamond, which contains the energetic particles, prevents radiation leaks and acts as a super-hard protective and tamper-proof layer.
To create a battery cell, several layers of this nano-diamond material are stacked up and stored with a tiny integrated circuit board and a small supercapacitor to collect, store and instantly distribute the charge. NDB says it'll conform to any shape or standard, including AA, AAA, 18650, 2170 or all manner of custom sizes.
And so what you get is a tiny miniature power generator in the shape of a battery that never needs charging – and that NDB says will be cost-competitive with, and sometimes significantly less expensive than – current lithium batteries. That equation is helped along by the fact that some of the suppliers of the original nuclear waste will pay NDB to take it off their hands.
Radiation levels from a cell, NDB tells us, will be less than the radiation levels produced by the human body itself, making it totally safe for use in a variety of applications. At the small scale, these could include things like pacemaker batteries and other electronic implants, where their long lifespan will save the wearer from replacement surgeries. They could also be placed directly onto circuit boards, delivering power for the lifespan of a device.
In a consumer electronics application, NDB's Neel Naicker gives us an example of just how different these devices would be: "Think of it in an iPhone. With the same size battery, it would charge your battery from zero to full, five times an hour. Imagine that. Imagine a world where you wouldn't have to charge your battery at all for the day. Now imagine for the week, for the month… How about for decades? That's what we're able to do with this technology."
And it can scale up to electric vehicle sizes and beyond, offering superb power density in a battery pack that is projected to last as long as 90 years in that application – something that could be pulled out of your old car and put into a new one. If part of a cell fails, the active nano diamond part can be recycled into another cell, and once they reach the end of their lifespan – which could be up to 28,000 years for a low-powered sensor that might, for example, be used on a satellite – they leave nothing but "harmless byproducts."
In the words of Dr. John Shawe-Taylor, UNESCO Chair and University College London Professor: “NDB has the potential to solve the major global issue of carbon emissions in one stroke without the expensive infrastructure projects, energy transportation costs, or negative environmental impacts associated with alternate solutions such as carbon capture at fossil fuel power stations, hydroelectric plants, turbines, or nuclear power stations. Their technology’s ability to deliver energy over very long periods of time without the need for recharging, refueling, or servicing puts them in an ideal position to tackle the world’s energy requirements through a distributed solution with close to zero environmental impact and energy transportation costs.”
Indeed, the NDB battery offers an outstanding 24-hour energy proposition for off-grid living, and the NDB team is adamant that it wishes to devote a percentage of its time to providing it to needy remote communities as a charity service with the support of some of the company's business customers.
Should the company chew right through the world's full supply of carbon-14 nuclear waste – a prospect that would take some extremely serious volume – NDB says it can create its own carbon-14 raw material simply and cost-effectively.
The company claims to have completed a proof of concept, and is ready to begin building its commercial prototype once its labs reopen after COVID shutdown. A low-powered commercial version is expected to hit the market in less than two years, and the high-powered version is projected for five years' time. NDB says it's well ahead of its competition with patents pending on its technology and manufacturing processes.
Should this pan out as promised, it's hard to see how this won't be a revolutionary power source. Such a long-life battery would fundamentally challenge the disposable ethos of many modern technologies, or lead to battery packs that consumers carry with them from phone to phone, car to car, laptop to laptop across decades. NDB-equipped homes can be grid-connected or not. Each battery is its own near-inexhaustible green energy source, quietly turning nuclear waste into useful energy.
Sounds like remarkable news to us!
We spoke with several members of the NDB executive team. Check out the full edited transcript of that interview for more information, or watch the cartoon video below.
Nano Diamond Battery Explainer Video - NDB
Source: NDB
Update, August 27, 2020: We have contacted NDB to clarify several of their claims in this article. At this stage we believe the power density claims may relate to the power delivered by the supercapacitor part of the cell, rather than to how much energy the carbon-14 diamond itself is capable of generating. If this is the case, we may be looking at a very slow trickle charge from the diamond into the supercapacitor, and a high power output from the supercapacitor.
The properties of supercapacitors are well known: high power density allowing fast charge and discharge, long lifespan, and low energy density – meaning they can store only a small amount of energy per volume.
Such a system – a trickle-charged supercapacitor – could be useful for sustained, low-power applications, and for emergency applications like Uninterruptible Power Supplies (UPS) that can slowly charge themselves for weeks or months between periods of discharge, but would not generate power anywhere near quickly enough for use in a long-range electric car or other applications requiring sustained high power outputs from a compact battery pack.
NDB speaks of low- and high-power versions of the cell in development, but until we see some output figures the claims are still hazy, and until we see some proof, they're just claims, and we're still waiting to hear back from the company. We'll keep you updated.
The recent verdict of the Madras High Court in the Sterlite case shows the government of Tamil Nadu and its pollution control arm, the Tamil Nadu Pollution Control Board (TNPCB), in poor light. The judgment throws up innumerable instances when the pollution watchdog didn’t do its job.
The copper smelter plant of Sterlite Copper, part of the Vedanta group, was closed down by the Tamil Nadu government in May 2018, based on a similar order of the TNPCB. Sterlite moved the High Court of Madras against the closure and the court gave its judgment last week, upholding the closure.
The judges, T S Sivagnanam and Bhavani Subbaroyan, have lambasted the body multiple times in the judgment.
For instance, when the judgment refers to the mound of copper slag lying dumped at a point near a river, the judges note that “neither the TNPCB nor the District Administration took effective steps to abate the nuisance.”
They further observe that the district administration “cannot plead ignorance because the quantity of slag dumped is virtually a small hillock and visible to any passer-by. Therefore, this court can safely conclude that the officials of the District Administration turned a blind eye to the illegality.”
Finding TNPCB “equally culpable”, the judges say, “What needs to be done to these officers is a matter which requires serious consideration and to serve as a deterrent to the serving officers of the Board.”
(Sterlilte’s stand is that it had sold off the slag to a man called A Paul, who had stored it there—some 10 km away from Sterlite plant. Even though the company had an MoU with Paul to ensure the disposal of the slag, it was not allowed to do so and had even reported it several time to both the district collector and the TNPCB.)
Ground water quality
While talking about ground water quality, the judges take note of Sterlite’s stand that there was never a charge on that count against it, but say, “the regulator (TNPCB) failed to do their job.” They, however, said that Sterlite “cannot be exonerated” because the TNPCB failed to do its job.
An allegation against Sterlite is that it had been operating for many years without obtaining the authorisation under the Hazardous Waste Management Rules renewed by TNPCB. (Sterlite says that it’s application had been pending with the Board, like that of many other companies in the region—all of which still continue to operate without the HWM authorisation.) “The fact that authorisation was not renewed is a very serious matter,” the judges have said.
The judgment holds that Sterlite could not continue to handle and dispose-off hazardous waste just because the renewal of the authorisation was pending. (Sterlite feels the waste is not hazardous at all and says the TNPCB has allowed the waste to be used in road construction.) Having said that, the judgment comes down heavily upon the TNPCB saying, “stringent action has to be initiated against the officials who were in-charge at the relevant point of time, equally the superior officers and others at the helm of affairs.”
At another point, the judges come down heavily on the TNPCB for just accepting Sterlite’s reply to a show-cause notice of the Board, saying that “all the issues were being addressed.” The Board closed the issues raised in the show-cause notice based on the assurances. The judgment calls this “irresponsible”, even while noting, “it is not clear what assurance was given by the petitioner.”
“The Board has failed to disclose how the explanation offered by the petitioner was acceptable,” the judges say, holding the TNPCB “reckless” and calling for prosecution of the officials in-charge.
Gulf of Mannar
A point considered in the judgment is that of arsenic contamination, arising out of the toxic metal being present in the imported copper concentrate. The judges say the TNPCB failed to monitor the quality of the imported concentrate. “The quality of the copper concentrate is definitely an issue which is a matter of concern and we shift the blame to the TNPCB.”
In this context, the question of TNPCB’s prolonged silence in answering the application for renewal for handling hazardous waste material comes up again. Once again, the judges are livid. “It is rather surprising as to how the TNPCB continued to permit the petitioner to operate and handle and disposed of hazardous waste without renewal of the authorisation.
“Thus, we can safely conclude that there is every possibility of these hazardous chemicals being not accounted for, thereby causing hazard to the environment. The person to be blamed is the regulator and the regulator alone.”
The judgment also finds fault with the state government for not notifying the Gulf of Mannar as a National Park even though it was recommended by the Chief Wildlife Warden in April 2003.
“It is not clear as to why the State of Tamil Nadu is sitting tight on the proposal, are there any hidden beneficiaries who would benefit by delaying the publication of the notification?” the judgement says.
24 August
Global: Global Covid-19 infections have passed 23.4 million with more than 808,000 deaths, according to Johns Hopkins University.
US: The US Food & Drug Administration said it has authorised the use of blood plasma from patients who have recovered from Covid-19 as a treatment for the disease, a day after President Donald Trump blamed the agency for impeding the rollout of coronavirus vaccines for political reasons.
As US Covid-19 cases passed 5.7 million, New York reported that virus-related hospitalizations had dropped to 472 and intensive care patients to 110, both the lowest since mid-March. It also marked the 16th straight day of positive-test results under 1%.
California reported 6,777 new virus cases on Sunday, the highest number in a week but still less than the seven-day average of 7,822.
China: China sees no locally transmitted cases for the eighth day in a row. The country reported 16 new Covid-19 cases in the mainland for 23 August, all of which were imported infections involving travellers from overseas, the country’s health authority said on Monday.
South Korea: South Korea counted its 11th straight day of triple-digit daily jumps in coronavirus cases as officials tighten social distancing restrictions nationwide to combat what they describe as the biggest crisis since the emergence of Covid-19.
Japan: Japan’s prime minister, Shinzo Abe, visited a Tokyo hospital on Monday for a second time within days, stoking concern about his ability to stay on as leader due to health issues and fatigue from tackling the coronavirus pandemic.
Australia: The state of Victoria reported its lowest daily rise in new coronavirus infections in seven weeks on Monday, fuelling optimism that a deadly second wave there is subsiding. Victoria on Monday reported 116 cases and 15 deaths from the virus in the past 24 hours, down from a peak of more than 700 cases early this month.
France: France reported almost 4,900 new coronavirus cases over the last 24 hours, its highest figure since May. Deaths increased by one to 30,513 in the past 24 hours.
Italy: The number of daily coronavirus cases recorded in Italy has nearly doubled in the past five days, rising to more than 1,200 on Sunday. Italy recorded 1,210 cases in the past 24 hours, compared with 642 on Wednesday, latest official figures showed. There were seven deaths compared with three the day before.
UK: The UK recorded 1,041 new cases of Covid-19 on Sunday, down from 1,288 on Saturday, government figures showed. It is the fourth day in a row that new infections have been more than 1,000 in 24 hours.
Greece: The Greek island of Lesbos was added to a list of areas under heightened Covid-19 vigilance, officials said. The move came as health authorities announced a new daily infection high of 284 cases nationwide in the last 24 hours. The total number reached 8,664, of which around 40% has been reported in August. The death toll reached 242.
Mexico: Mexico has reported 226 more deaths from the coronavirus, finishing the week with 3,723 fatalities, the lowest total in over two months, according to government figures.
Vaccine news
China: The Chinese government has been administering a vaccine candidate to selected groups of key workers since July, a senior health official told state media yesterday. Zheng Zhongei, head of the national health commission’s science and technology centre, told CCTV the government had authorised “emergency use” and it was in line with the law, the South China Morning Post has reported.
Philippines: The Philippines is negotiating with 16 manufacturers of potential Covid-19 vaccines to procure supplies needed to battle South-East Asia’s largest outbreak. In addition, the Philippine education department reported that at least 311 teachers and 268 students have been infected with the coronavirus. In an announcement on social media, Education Undersecretary Alain Pascua said that of the total cases, 318 remain active while 22 have died. It was unclear how many of the total fatalities were teaching staff or students.
Lockdown updates
New Zealand: New Zealand’s largest city, Auckland, will continue with its Level 3 restrictions for an additional four days. Auckland was set to lift the restrictions – requiring residents to ‘stay at home and stay local’ – on Wednesday, but those have now been extended to 11:59pm on Sunday.
Brazil: President Jair Bolsonaro defended the reopening of retail outlets “with responsibility” and said his government had done everything possible to curb the spread of Covid-19, in a video posted on social media Sunday.
Global: Global Covid-19 infections have passed 23.6 million with more than 813,000 deaths, according to Johns Hopkins University.
Cancer patients are at high risk of severe disease if they contract Covid-19, and those with blood diseases are in the most danger, researchers said. People with leukaemia and other blood cancers who contract the coronavirus face as much as 57% higher odds of severe disease compared to those with breast cancer, according to a study published Monday in The Lancet Oncology journal.
China: A Hong Kong man has been re-infected with Covid-19 after four-and-a-half months, leading to immunity concerns. A Hong Kong man who recovered from Covid-19 was infected again four-and-a-half months later in the first documented instance of human re-infection, researchers at the University of Hong Kong said on Monday.
US: Coronavirus cases in the US increased by 0.6% as compared with the same time Sunday to 5.72 million, according to data collected by Johns Hopkins University and Bloomberg News. The increase was lower than the average daily gain of 0.8% over the past week. Deaths rose by 0.2% to 176,991.
Gaza: Gaza reported its first Covid-19 cases outside quarantine areas and declared lockdown. The first cases of coronavirus have been detected outside of quarantine facilities within the Gaza Strip, a potentially disastrous development given the enclave’s fragile health system.
Sweden: Sweden is likely to see local outbreaks but no big second wave of Covid-19 cases in the autumn, such as inundated hospitals a few months ago, Sweden’s top epidemiologist and architect of its unorthodox pandemic strategy said.
Pakistan: latest figures from Pakistan show the country has 8,934 active cases of coronavirus – the lowest since April 24, according to our correspondent Asad Hashim. Pakistan recorded an additional 450 cases on Monday and 11 deaths.
Australia: The state of Victoria has confirmed 148 new cases of coronavirus and eight deaths in the past 24 hours. The state’s capital, Melbourne, is slightly more than halfway through a six-week lockdown imposed as a second wave of cases emerged in the state.
Germany: New coronavirus cases increased at a pace close to Saturday’s four-month high, while the infection rate fell below a key benchmark of 1.0. There were 1,628 new infections in the 24 hours through Tuesday morning, taking the total to 236,122.
Singapore: Singapore’s Building and Construction Authority ordered a stop to activities at some construction worksites after a new Covid-19 cluster was found at the country’s largest foreign worker dormitory, raising concerns of a resurgence in virus infections.
Vaccine news
US: Dr Anthony Fauci, the top US infectious diseases expert, warned that distributing a Covid-19 vaccine under special emergency use guidelines before it has been proved safe and effective in large trials is a bad idea that could have a chilling effect on the testing of other vaccines.
Dr Stephen Hahn, commissioner of the US Food and Drug Administration (FDA) says the agency will not be influenced by political pressure when it comes to approving a vaccine for Covid-19. Hahn said the FDA’s decision to issue an emergency authorisation for blood plasma treatment for coronavirus at the weekend was not political.
Mexico: Four different coronavirus vaccine initiatives will receive financial support from the Mexican Government, the Foreign Ministry said in a presentation. A total of 19 projects including those focused on Covid-19 treatments will receive financing via a fund with resources from the Mexican International Development and Cooperation Agency, foreign entities and private foundations, the Foreign Ministry said in a separate statement.
Lockdown updates
Global: The United Nations said the threat from ISIL (ISIS) has been reduced by the coronavirus lockdowns imposed in many countries. “Measures to minimise the spread of Covid-19, such as lockdowns and restrictions on movement, seem to have reduced the risk of terrorist attacks in many countries,” said Vladimir Voronkov, undersecretary-general for counter-terrorism.
South Korea: South Korea on Tuesday ordered most schools in Seoul and surrounding areas to close and move classes back online, the latest in a series of precautionary measures aimed at heading off a resurgence in coronavirus cases, Reuters reports.
Colombia: Colombia will start a new phase of the pandemic in which mandatory lockdowns end and authorities instead impose “selective lockdowns” with fewer restrictions to individual mobility, President Ivan Duque said on state TV.
Economic updates
Australia: Qantas Airways Ltd. plans to cut as many as 2,500 more jobs by offloading ground operations such as baggage handling and aircraft cleaning as the cost of the coronavirus pandemic mounts.
Philippines: The Philippines’ House of Representatives on Monday approved the final version of a 165.5 billion-peso ($3.4 billion) pandemic relief bill that would provide subsidies to the unemployed, assistance to businesses and loan repayment extension to borrowers.
SHANGHAI (Reuters) - U.S. asset manager Vanguard Group said on Wednesday it will close its operations in Hong Kong and Japan and exit Hong Kong exchange-traded funds, citing unsupportive "industry dynamics".
The fund giant, with about $5 trillion in assets, said in a statement that its Hong Kong business primarily served institutional clients and not retail investors, which are its primary focus.
It said the exit would happen gradually and take between 6 months to two years.
Vanguard, which launched a wholly foreign-owned enterprise (WFOE) in China in May 2017, said it will "gradually cease (its) onshore presence in Hong Kong and make an orderly exit" from its Hong Kong ETF, Mandatory Provident Fund and Index-Tracking Investment Schemes businesses.
Hong Kong is home to Vanguard's Asian headquarters. The index fund giant closed its Singapore operation in 2018.
In a separate statement, a spokesman confirmed that Vanguard would also close in Japan, and shift its primary office in Asia to Shanghai.
"Our future focus in Asia is on Mainland China," the spokesman said in an email.
Vanguard's closure plans were first reported on Wednesday by Ignites Asia, a Financial Times service.
Vanguard announced a China advisory joint venture in December 2019 with China's leading fintech company, now known as Ant Group, to provide retail investment advisory services.
Ant, an affiliate of Alibaba Group Holding Ltd, is currently seeking a $200 billion dual listing in Hong Kong and Shanghai and operates Yu'ebao, one of the world's largest money market funds.
https://finance.yahoo.com/news/vanguard-close-hong-kong-japan-093233993.html
(Bloomberg) -- China says it has made concessions in proposing to let U.S. regulators to audit some of its most sensitive companies and is calling for direct talks to solve a years-long dispute that threatens global markets.
In an interview in Beijing on Wednesday, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said China is “sincere” in wanting to solve the standoff over the accounting issues.
U.S. officials have recently stepped up a push to gain access to audit working papers for Chinese companies that trade in the U.S., threatening rules that would trigger delisting shares such as those of Alibaba Group Holding Ltd. and Baidu Inc. if the request isn’t met. The standoff has dogged relations for years and deteriorated since 2017, after a trial inspections done jointly by Chinese and American regulators failed to yield an agreement.
Fang said on Wednesday that earlier this month, the CSRC sent the U.S.’s Public Company Accounting Oversight Board a fresh proposal, which would allow the U.S. to pick any of its state-owned enterprises for another trial run. China though would still insist on redacting some information because of national security concerns, a condition Fang described as an international norm.
“As both sides gain confidence we can proceed to handling these sensitive issues so that both sides are satisfied,” he said. “They are a bit more urgent. We are very sincere, but on the other hand we are also serious about protecting national security information.”
Fang said he reached out to the U.S. to hold a video or phone meeting, but has yet to get a response. As to why another pilot auditing project hasn’t taken place since 2017, Fang said it could be due to the “general atmosphere.”
When Fang went to the U.S. in September 2019 to try to solve this issue, the chairman of the PCAOB refused to meet him and instead sent one of his department heads, said a person familiar, who declined to be named discussing a private matter. In the past, the previous PCAOB chairman had been happy to meet and talk, the person said.
Financial Fears
After a protracted trade dispute that has roiled markets over the past three years, tensions between China and the U.S. are now spilling over onto the financial and technology sectors with tit-for-tat sanctions over a crackdown on Hong Kong and threats against some of China’s biggest companies.
Fang said that no one stands to gain from a financial decoupling between the two nations and that it would be bad for both New York as a financial center and for Chinese companies.
The disputes are playing out against a backdrop of China this year opening its financial markets more fully to Wall Street giants such as Goldman Sachs Group Inc., counting on them to provide fresh investments and foster a more competitive local industry.
This has proceeded unhindered with the most approvals being granted to U.S. financial institutions and is expected to gain pace as the Chinese economy gathers steam, Fang said.
“The presence of foreign investors in our market has provided kind of an anchor,” he said. “The continued presence of foreign investors in our market will help promote the quality of our stock market. Both from a demand and supply point of view I do expect that foreign participation in our market, whether its providing services or providing capital, will accelerate.”
https://finance.yahoo.com/news/china-makes-concessions-call-talks-112321937.html
The ASX200 continues to rotate between 5900 and 6200, for the last 3-months every time local stocks have felt destined to break away from this comfort area its failed with the last 48-hours no change. The interesting action is unfolding beneath the hood and we believe this is where the main attention should continue to be focused e.g. yesterday alone on MM’s Growth Portfolio, we enjoyed Zip (Z1P) rally 27.5% while Bravura (BVS) fell -13.4%. Fortunately, the net effect was in our favour, but this is a clear illustration that a boring index is not remotely telling even half the tale.
Its not just the index that’s not witnessing follow through, it’s also been a common phenomenon on the stock level with obvious exceptions being stars like Xero (XRO) / Afterpay (APT) and “dogs” like Whitehaven (WHC). I’ve noticed 1-2 days strong up, or down, days is generally being followed by sellers / buyers fading the respective move, it feels like fund managers are fighting extremely hard around the edges to add some alpha / performance to their portfolios – as they should!
Overnight we saw US equities anticipating the Fed chairman Jerome Powell speech tonight which will basically deliver a message of steady as she goes with definitely no rocking of the recovery boat, the one change likely is around how they look at inflation ‘tweaking’ this to be an average inflation target, which allows for overshooting to offset undershooting i.e. giving them the ability to be more tolerant of higher inflation – the $US slipped lower even as bond yields rose helping precious metals rally strongly and the bull market in US tech continue with almost euphoric strength, the NASDAQ is now up 37% in 2020 even with COVID-19.
MM remains bullish the ASX200 medium term.
We often say at MM “look after the losers and the winners will look after themselves” hence this morning I’m looking at BVS as opposed to Z1P. Yesterday they announced an inline FY20 earnings result however their FY21 guidance was around a ~12.5% miss to market expectations, hence the sell off but to me it was just common sense prudence in these uncertain times i.e. try and under promise and over deliver:
“While the new sales pipeline remains strong, due to the wider impact of COVID-19 there is greater uncertainty in the timing of deal closures when compared to prior years. It is therefore possible that FY21 NPAT will be similar to FY20”.
We’ve taken this as meaning that a worst-case scenario could be a flat year in terms of earnings, further clarity would always be nice but our inclination is consider adding to our 3% position. Also, importantly BVS is not trading on a hugely inflated P/E, for FY21 they’re now on 22x with – in MM’s view - upside to current FY21 earnings.
MM remains bullish BVS
Global juggernaut Apple (AAPL US) continues to charge ahead, leading the NASDAQ from the front. In our opinion this is a clear illustration of the changing of the guard when it comes to stock / sector performance, unfortunately our own market lacks such quality large cap tech stocks hence the ASX is languishing compared to US Indices on the performance front – its why investing overseas is well worth considering for all investors, we are doing more and more international equities in portfolios which aids performance and well as providing greater diversification to themes we simply don’t have in Australia.
I know many pundits keep talking about excessive valuations across the tech sector but they are missing some vital points – these stocks are already generating huge cash profits while growing fast, with bond yields around zero they’re arguably far from too expensive – making comparison to the tech bubble of 2000 I think is irrelevant and actually counterproductive.
I’m confident at some stage in the next 6-12 months stocks like Steve Jobs legacy suffer a ~20% pullback but its likely to be only a blip on the chart like COVID has already become, in our opinion major pullbacks should be bought not sold – MM’s preference is this will probably unfold when markets become scared by an increase in bond yields.
MM remains long & bullish Apple (AAPL US).
Overseas Indices & markets
Overnight US stocks again rallied strongly to fresh all-time highs, ongoing impressive performance whatever the economic and social backdrop. As we’ve said previously this is a bull market where the most prudent action over the last 5-months has been to buy pullbacks where its averaged one a month since March and MM sees no reason this rhythm won’t continue into Christmas. Importantly investors should note that the last time the S&P500 broke out to fresh high in April 2019 it rallied for 8-months before having its ascent halted by the global pandemic i.e. our call of an ongoing rally for 12-18 months is statistically nothing unusual.
MM remains bullish US stocks medium-term.
Overnight we saw the $US only dip slightly and gold pop +2% and silver over +3%, in our opinion this remains both the new trend and path of least resistance into Christmas. Our “Gut Feel” in the short-term is the $USD will bounce sending precious metals and most commodities lower i.e. on balance we still believe be patience will be rewarded with regard to accumulating resource stocks in the weeks ahead. However, the surprises in all markets are generally with the trend so opposed to further follow through by the $US it might just rotate around the 93 area before commencing another leg lower which fits our macro thesis.
MM remains bullish precious metals medium-term.
The VanEck Gold Miners ETF (GDX US) continues painting a very clear technical picture for MM – we are buyers below 40 and will be looking to take profit on our sector exposure just under 50 hence the risk / reward still favours the bulls.
MM remains bullish precious metals medium-term.
Is lumber painting us a picture?
I know when investors look at the surface of the global economy there’s not much to like but all the forward looking signals we look at MM are pointing to areas of boom in the years ahead – there’s certainly been enough money thrown at the problem! Lumber has been going through the roof, the chart below illustrates how its already close to tripling in 2020. Historically this is very bullish both the US economy and the stock market, eventually when lumber prices “roll over”, there’s usually a multi-month divergence between the top in lumber and the S&P500’s equivalent making it a very useful leading indicator.
Undoubtedly part of the appreciation in lumber falls at the door of closed mills due to COVID but there’s actually been a simultaneous increase in demand for home construction in the US – it’s boring old supply and demand yet again. Some of the fuel pushing up prices is the young adults who were born around the 1990’s peak looking for their 1st home, low interest rates are obviously also helping this side of the equation. Construction has actually been a commodity / industry that has benefited from COVID as people in the US look to relocate to the cheaper “burbs” and build their own home, one of the few silver linings of the virus.
At this stage lumber is telling us the next few years will paint a very different picture to the virus influenced 2020, I’m sure a number of us will be saying good riddance over a turkey this Christmas!
MM remains bullish US equities.
“Doctor Copper” is the more lauded global economic indicator and it’s also rallied in 2020, especially from its panic low in March. In our opinion the industrial metal is telling us all is well with the global economy as opposed to the exciting boom which lumber is portraying, hence it’s to the later that we have directed this morning’s report.
MM is bullish copper & the “reflation trade” into 2021 and beyond.
This morning we have simply looked at 3 Australian stocks with exposure to the US building sector where we believe things look good but remember we are bullish the $A which creates an almost new headwind with Australian companies enjoying meaningful revenue from the US.
1 James Hardie (JHX) $31.87.
JHX manufactures building products for new home construction & remodelling, a great place to be assuming the lumber price is portraying an accurate picture. The stock is within striking distance of a fresh all-time high and we believe for the reasons discussed earlier it’s a matter of time before JHX punches up towards $40. Earlier in the month the company released its quarterly numbers and all looked good with net sales only down 5% while operating cash flow was up 35% year on year.
MM is bullish JHX.
2 Boral Ltd (BLD) $3.76
BLD manufacturers / supplies building materials in Australia and internationally which includes a clay brick business in the US. The stock been a poor performer since 2017 but after Kerry Stokes bought 10% of the company, I feel this may finally be a turnaround story. There is talk of selling off some assets to fix their balance sheet which is/has been under stress.
MM is bullish BLD initially targeting a break above $4.
3 Brickworks (BKW) $18.03.
BKW manufactures and distributes clay products including brick, paver and floor tile products. Importantly BKW recently invested in 3 brickmaking businesses in the US creating a potentially strong growth channel moving forward plus an apparently sustainable 3.5% fully franked dividend is not to be sniffed at in today’s almost zero rate world. Also, BKW owns 40% of Soul Patts (SOL) which is bullish, we can see it rallying ~20% higher – see 2nd chart below.
MM is bullish BKW eventually targeting a break above $21.
THE state of activity in the refining sector is an interesting barometer for the things to come in the crude sector. After all, we use products and not crude. And crude is converted into the required products by refineries. The rate of conversion thus remains a ‘good’ indicator of crude demand.
And today, the refining industry is not in the best of the shapes.
Several refiners and oil majors have announced permanent closures in the United States and Asia, while analysts believe that some high-cost refineries in Europe could also be shut down over the next few years as margins for processing crude into fuels are expected to remain depressed, Tsvetana Paraskova, said in a piece for oilprice.com.
Refiners face the ‘adapt-or-die’ scenario in the wake of the pandemic. Closures and consolidation will be the two major themes in the downstream going forward, analysts are underlining.
The list of closures is interesting enough. Global majors are taking a lead, apparently in view of the industry’s changing landscape.
Phillips 66 has just announced plans to shut down the Rodeo Carbon Plant and Santa Maria refining facility in Arroyo Grande, California, in 2023. Phillips 66 also plans to reconfigure its San Francisco Refinery in Rodeo, California, to produce renewable fuels.
Marathon Petroleum is reportedly idling the Gallup and Martinez refineries indefinitely and is evaluating the strategic repositioning of Martinez to a renewable diesel facility.
Shell is also planning to transform its Tabangao oil refinery in The Philippines into a full import terminal to optimise its asset portfolio.
According to Wood Mackenzie, nearly 10 per cent of high-cost refineries in Europe, or 1.4 million barrels per day of capacity, are in serious threat of closure in Europe alone over the next three years, Alan Gelder, Head of Downstream Oil, and Gerrit Venter of Corporate Analysis told the press, last month.
The industry is reacting to demand patterns which continue to stay gloomy. The Paris-based International Energy Agency has recently revised down its gasoline and jet fuel demand forecast for the rest of the year.
For the refining sector, the petrochemical industry was their next bet. Hardly a few years back, refinery and petrochemical integration was being discussed as the way out for the industry. Seeking alternatives, the oil sector looked at petrochemicals as the step to grow out of the slowing global crude consumption. They looked at petrochemicals to take the industry out of the quagmire they were in with the changing crude consumption pattern. The refining sector was expected to play a lead role in this portfolio transition. With demand for crude oil as fuel expected to decline under pressure from electric vehicles and other alternative fuels, petrochemicals were expected to become at some point the main profit-maker for refiners.
Not anymore.
Analysts are beginning to question Big Oil’s choice in relying on petrochemicals for growth in the coming years.
With the coronavirus crisis shocking every major industry, they are now questioning the economics and the long-term rationale of Big Oil’s ‘safety bet’ on petrochemicals, especially in view of the energy transition and continued drive toward reduced use of plastics in developed economies.
However, the pandemic has caused some majors to pause and defer investments in the petrochemical sector. Chevron Phillips Chemical Company (CPChem) — a joint venture between Chevron and Phillips 66 — has deferred the final investment decision for its US Gulf Coast project, it was announced in end-July.
BP has also announced divesting its global petrochemicals business to UK’s Ineos for US$5 billion as part of the next strategic step in BP’s metamorphosis, from an oil and gas company to an energy company that could compete in the energy transition.
Saudi Aramco though remains an exception in this scenario. It continues to eye chemicals and petrochemicals as a key focus area of development, as it aims to become “the world’s preeminent integrated energy and chemicals company.”
Mid-July, Aramco announced a downstream reorganisation. Abdulaziz M. Al Gudaimi, Aramco’s Senior Vice President of Aramco Downstream described the move as helping “streamline its operations and reinforce their position as a major global energy and petrochemicals player.”
Kathy Kathy Hipple, an analyst with the Institute for Energy Economics and Financial Analysis (IEEFA), while talking to CNBC termed petrochemicals “the last frontier for the oil and gas industry”. Yet, petrochemicals were “a poor bet” from the beginning, even before the coronavirus crisis, underlined Hipple.
The current state of the global refining industry is enough to underline; the demand for most of the products is declining and that the energy sector is past its peak.
The Covid-19 pandemic has added severe financial strain on a North American upstream industry that was already reeling under billions of dollars of debt. With WTI climbing past $40 a barrel, most exploration and production firms (E&Ps) have been able to keep their head above water, but unless prices strengthen further about 150 more E&Ps will need to seek Chapter 11 protection through 2022, a Rystad Energy analysis shows. So far this year, according to Haynes & Boone, 32 E&Ps have already filed for Chapter 11, recording a cumulative debt of about $40 billion. On the oilfield services (OFS) front, 25 companies have filed for Chapter 11. If WTI remains at $40, Rystad Energy estimates 29 more E&P Chapter 11 filings this year, adding another $26 billion of debt at risk.
In a scenario with WTI continuing to hover around $40 over the next two years, we can expect another 68 Chapter 11 filings from E&Ps in 2021, and 57 more in 2022, adding $58 billion and $44 billion, respectively, of more debt at risk. That would bring the total amount of E&P debt at risk from now until the end of 2022 to $128 billion.
If WTI price levels remain largely unchanged and our Chapter 11 forecasts materialize, this would bring the total number of North American E&P filings for 2020-2022 to nearly 190, compared to 207 during the five-year period of 2015-2019. That would also bring total Chapter 11 North American E&P debt for 2020-2022 to about $168 billion, 36% higher than the $122 billion recorded in 2015-2019.
The number of filings so far is lower than what was recorded in the previous downturn, particularly in 2016, but total debt for the filings in the first seven months of the year, for both E&Ps and OFS players, is already at the same level as the full year of 2016, at $70 billion. Looking at the average debt per company, 2020 seems to be a clear outlier, at $1.2 billion. This is 160% higher than the average debt of $460 million recorded in the 2015-2019 period and twice as much as the 2017 level, which was the second highest in terms of average debt in a year.
Both E&Ps and OFS Chapter 11 cases exhibit the same dynamic this year – with the average debt for an E&P at $1.25 billion and for an OFS company at $1.19 billion. The OFS sector usually has lower debt than E&Ps, as the former in the US is punctuated with small suppliers and service providers, whereas the capital structure of smaller E&Ps is typically fully family owned. The average debt for the OFS sector is higher this year because of several large bankruptcies.
Our E&P Chapter 11 model is based on a cash flow analysis covering about 10,000 active North American oil and gas E&Ps. The model is designed to present a macro-level outlook rather than look at individual company insights, as the capital structure for a majority of small and private E&Ps is based on assumptions and matches the actual number of Chapter 11 cases.
“While an improvement in oil prices towards $40 per barrel WTI saved a significant number of E&Ps and prevented early Chapter 11 filings in June-July, the current price environment is in no way sufficient for a large number of E&Ps in the medium-term. As hedging programs set at WTI $50+ per barrel expire in the second half of this year, we anticipate greater financial pressure on the industry unless WTI prices recover further,” says Artem Abramov, Rystad Energy’s Head of Shale Research.
Midland unemployment continues to trend lower MSA inched down to 9.4 percent in July from 9.5 in June
Preliminary numbers for July with June numbers in parentheses: Odessa 12.6 (12.7) Preliminary numbers for July with June numbers in parentheses: Odessa 12.6 (12.7) Photo: DenisTangneyJr/Getty Images/iStockphoto Photo: DenisTangneyJr/Getty Images/iStockphoto Image 1 of / 33 Caption Close Midland unemployment continues to trend lower 1 / 33 Back to Gallery
Midland’s unemployment continues to trend lower, recording a second monthly decline as the rate retreats from its high of 12.6 percent recorded in May.
The Texas Workforce Commission said Friday that unemployment in its Midland metropolitan statistical area – which includes Midland and Martin counties – dipped to 9.4 percent in July from 9.5 percent in June. That remains far above the July 2019 unemployment rate of 2.2 percent.
While Odessa reported an unemployment rate decline similar to Midland – dipping to 12.6 percent from 12.7 percent in June – the city recorded the state’s highest unemployment for a second consecutive month.
“I think we’re seeing it trend in the right direction,” Willie Taylor, chief executive officer of the commission’s Workforce Solutions Permian Basin, told the Reporter-Telegram in a phone interview.
He said the number of unemployment insurance benefit claims is also trending lower. Despite the hurdles caused by the COVID-19 pandemic, Taylor said his office tries to hold virtual job fairs every other week “to ensure we get people back to work.” One is scheduled for this week with Medical Center Hospital.
The issue with getting unemployed people back to work is child care, Taylor said. Regionwide, the waiting list for child care is 900, he said. With West Texas split almost evenly between men and women, he said it presents a challenge to single parents trying to return to work. With a new child care provider contract set to take effect next month, he said he hopes those issues will soon be addressed.
The region’s dominant industry sector, oil and gas, has been hit hard by the twin blows of the COVID-19 pandemic and the economic woes of the dominant oil and gas industry, Taylor said. “It tells us we need to focus on trying to diversify our industry base to make sure we can sustain ourselves through these downturns.”
Midland’s civilian labor force grew by 120 from June to July, to 102,658 from 102,532 in June. Still, it remains about 8,900 below the 111,590 recorded last July. Supporting the market was the fact that about 250 residents joined the ranks of the employed, which grew to 93,040 from 92,797 in June but is 16,000 below the 109,105 employed a year ago. The number of unemployed residents shrank by about 100 to 9,618 from 9,735, still 7100 above the 2,485 unemployed last year.
Though Midland’s unemployment rate continues to decline, the Tall City still shed 1,200 total nonfarm jobs from June to July. Total nonfarm jobs in July were 98,700, down from 99,900 in June and 16,900 below the 115,600 of July 2019, a decline rate of 14.6 percent.
The dominant Mining, Logging and Construction sector lost 800 jobs from June to July, followed by the Leisure and Hospitality sector with 400 jobs lost. The Trade, Transportation and Utilities sector and the Government sector each lost 100 jobs. Education and Health Services was the only sector to gain, adding 200 jobs during the month.
For the 21 months from July 2019 to July 2020, the Mining, Logging and Construction sector has shed 11,500 jobs for a decline rate of 28.2 percent. The Trade, Transportation and Utilities sector followed with the loss of 1,800 jobs and the Leisure and Hospitality sector, with 1,400 jobs. The Other Services sector lost 800 jobs and the Government sector 400 jobs. The Manufacturing sector and the Financial Sector each lost 300 jobs and the Education and Health Services sector 200 jobs. The Information and Professional and Business Services sectors each lost 100 jobs.
Statewide, the unemployment rate dropped to 8 percent, the third consecutive monthly decline. The state lost 12,300 jobs from June to July.
Amarillo recorded the state’s lowest unemployment at 5.1 percent, followed by College Station-Bran with 5.8 percent and Abilene and Sherman-Denison at 5.9 percent each.
Midland Unemployment
January 2020 2.4 percent
January 2019 2.3 percent
February 2020 2.3 percent
February 2019 2.2 percent
March 2020 3.4 percent
March 2019 2 percent
April 2020 10.2 percent
April 2019 1.7 percent
May 2020 12.4 percent
May 2019 1.8 percent
June 2020 9.6 percent
June 2019 2.1 percent
July 2020 9.4 percent
July 2019 2.2 percent
According to GuruFocus data, the largest Insider Buys this week were for Phillips 66 (NYSE:PSX), Elanco Animal Health Inc. (NYSE:ELAN), Bunge Ltd. (NYSE:BG) and MDU Resources Group Inc. (NYSE:MDU).
Phillips 66: Director John E. Lowe bought 1,500 shares
Director John E. Lowe bought 1,500 shares on Aug. 19 at the average price of $61.45. The price of the stock has decreased by 0.78% since.
Phillips 66 is an American international energy company. It was formed as an independent company when ConocoPhillips (COP) executed a spin-off of its downstream and midstream assets. The company focuses on producing natural gas liquids and petrochemicals and is active in more than 65 countries. The company has a market capitalization of $26.63 billion, and as of Aug. 21 it traded at $60.97.
On July 31, Phillips 66 reported financial results for the second quarter of 2020. Net loss for the quarter totaled $141 million, or $0.33 per share. The company generated $764 million of operating cash flow during the quarter.
Elanco Animal Health Inc: Director John P. Bilbrey bought 22,560 shares
Director John P. Bilbrey bought 9,580 shares on Aug. 19 at the average price of $26.20. The price of the stock has increased by 3.44% since.
Elanco Animal Health Inc. is an American pharmaceutical company that focuses on producing medicines and vaccinations for pets and livestock. The company was a subsidiary of Eli Lilly and Company (LLY) before being divested in 2019. The company has a market capitalization of $12.79 billion, and as of Aug. 21 it traded at $26.20.
On Aug. 3, Elanco Animal Health Inc. announced that it has closed the acquisition of Bayer Animal health, valued at $6.89 billion. The transaction was funded by $5.17 billion in cash and 72.9 million shares to Bayer (XTER:BAYN). The acquisition expands Elanco's scale and capabilities.
Bunge Ltd: Director Vinita Bali bought 1,200 shares
Director Vinita Bali bought 1,200 shares on Aug. 19 at the average price of $46.17. The price of the stock has increased by 1.3% since.
Bunge Ltd. is an American international food processing company that focuses on soybean exporting, grain trading and fertilizers. The company is a component of the Russell 1000 and has approximately 32,000 employees in 40 countries. The company has a market capitalization of $6.53 billion, and as of August 21 it traded at $46.77.
On Aug. 10, Bunge Ltd. announced that the company has priced a public offering of $600 million aggregate principal amount of 1.630% senior notes, due 2025. The company intends to use the net proceeds for general corporate purposes, including repayment of certain short-term indebtedness. The transaction closed on Aug. 17.
MDU Resources Group Inc: Director David M. Sparby bought 2,000 shares
Director David M. Sparby bought 2,000 shares on Aug. 20 at the average price of $22.52. The price of the stock has decreased by 0.44% since.
MDU Resources Group Inc. is an American energy delivery, natural gas and construction company. The company's electric and natural gas utility companies serve approximately 1.1 million customers across 48 U.S. states. The company has a market capitalization of $4.5 billion, and as of Aug. 21 it traded at $22.42.
On Aug. 13, MDU Resources Group Inc. announced that its Board of Directors has declared a quarterly dividend on the company's common stock of $0.2075 per share. The dividend will be payable on Oct. 1 to shareholders of record at the close of business on Sept.10.
(Bloomberg) -- Norwegian life insurer Storebrand ASA has beefed up its climate policy, leading it to exit oil giants Exxon Mobil Corp. and Chevron Corp. and accelerate a full divestment from coal.
The move by the Oslo-listed company, which has about $91 billion under management, is another illustration of how investors are adjusting to the risks of climate change, putting pressure on fossil-fuel producers.
Storebrand has sold its holdings in Exxon and Chevron, chemicals giant BASF SE and miner Rio Tinto Group for their lobbying efforts against the Paris Agreement and climate regulation, it said in a statement. It also quit ConocoPhillips and Husky Energy Inc because of their investments in polluting oil sands.
The lobbying assessment is based on the companies’ official positions, the organizations they’re a member of and how much resources they’ve invested in climate work, Jan Erik Saugestad, the head of Storebrand Asset Management, said in an interview. Although Exxon and Chevron have joined the global Oil and Gas Climate Initiative, they’ve set no firm targets for cuts across their emissions, as opposed to European rivals.
Exxon and Chevron said in separate statements that they support the goals of the Paris Agreement and are investing in technology to reduce emissions. Exxon “is focused on the dual challenge of meeting the growing demand for energy and minimizing environmental impacts and the risks of climate change,” spokesman Casey Norton said by email.
Chevron is “carefully considering” a recent shareholder vote to increase disclosure on climate lobbying, spokesman Sean Comey said by email. The company is not always aligned with third-party organizations it works with “but it’s important for us to be part of conversations on challenging issues where there are multiple points of view.”
More oil divestments could follow, Saugestad said. European oil majors like BP Plc, Royal Dutch Shell Plc and Norway’s own Equinor ASA can’t “rest easy and continue with business as usual,” he said.
The new policy also bans companies that get more than 5% of their revenue coal, a target Storebrand earlier planned to reach by 2026.
Small Divestment
Divestments as a result of the new policy were completed this year, Saugestad said, declining to be more specific. At a total of $47 million, almost half related to Exxon and Chevron alone, they represent a small share of Storebrand’s assets.
“The most important for us is to send a clear signal that we expect that the companies will cooperate with us,” Saugestad said. “In a global context, we’re quite a small player. But we’re also in a leading global position on sustainable investments.”
Storebrand has been at the forefront of a campaign to put pressure on Brazil to protect the Amazon forest, bringing together funds with more than $4.6 trillion in assets. It’s also removed all oil investments from its Swedish unit.
https://finance.yahoo.com/news/91-billion-asset-manager-dumps-040000725.html
When it comes to finding the final frontier for big oil discoveries, you need to look beyond the Guyana-Suriname basin where everyone’s already staked their claims. And beyond the American shale patch, where growth is already slowing.
Africa is the next great oil frontier, where small-cap companies are staking large-cap claims of the kind that generously reward investors with a bigger risk appetite.
This could be the final, underexplored frontier for oil; is there anywhere else to go?
“There is nowhere on earth with as much potential as Africa,” Jay Park, CEO of Reconnaissance Energy Africa told Oilprice.com in an interview.
While many would have disagreed two decades ago, times have changed, and the fact that the African continent already holds 7.5% of the world’s known oil reserves, and as much of its gas reserves, yet still remains woefully underexplored, is exactly what might make this the last big land based venue on Earth for oil.
We’ve got the “legacy” players, such as Nigeria, Angola, Congo-Brazzaville and Equatorial New Guinea, but the real final frontier is only just emerging in places such as Ghana, Uganda, Mozambique, Tanzania and - even further off the radar, Namibia, where small-cap Reconnaissance Energy Africa (TSX:RECO.V; OTC: RECAF) holds the license for the entire Kavango Basin with potentially 18 billion barrels+ of oil-in-place waiting to be proved up to technical recovery.
Park, who previously worked as a lawyer specializing in upstream oil and gas and petroleum regimes, says the African continent is wildly undervalued. “The value of subsoil resources in OECD countries is at about $300,000 per square mile. In Africa, they’re valued at only about $60,000 per square mile,” he said. “This is either because Africa doesn’t have its fair share of the world’s resources, or because it hasn’t found those resources yet. I’d put money on the latter because Africa is vastly underexplored compared to the rest of the world.”
‘New Legacies’
Ghana, according to Deloitte, boasts the highest oil production among its peers, launching its first offshore licensing round in late 2018 and attracting majors from all over the place. They’re all hoping to top the massive Jubilee field - a massive discovery made in 2007 and operated by Tullow Oil.
Mozambique, another newcomer on the final frontier scene, enjoys the largest gas resources in the region and the biggest untapped gas potential, according to Deloitte. And now it’s planning a massive LNG development in the Rovuma Basin, with production expected somewhere around 2022.
Tanzania - the fastest-growing economy among these oil players - is second only to Mozambique in terms of natural gas resources, while major oil discoveries in Uganda in 2006 have catapulted the country into fifth place in terms of resources, with first production scheduled for next year.
Namibia is the newest venue of the lot, but it’s also the one that has the potential to be bigger in territory than Eagle Ford--the shale basin that put the U.S. on the oil exporter map to rival the best of OPEC.
The prize here is about as pure as it gets: The country has never produced a barrel of oil, but its potential is pinging the radar of even giant Exxon (NYSE:XOM), which recently acquired an additional 7 million net acres from the government for a block extending from the shoreline to about 135 miles offshore in water depths up to 13,000 feet, with exploration activities to begin by the end of this year.
Onshore, the potential is also striking. And nothing is more striking than the 6.3-million-acre Kavango Basin, which rivals the Eagle Ford in size. It’s also believed to be an extension of South Africa’s 600,000-square-kilometer Karoo sedimentary basin, home to Shell’s massive Whitehill Permian shale play.
ReconAfrica bought up the entire basin, with a 90% interest (the government owns the other 10%) and a four-year exploration license and a 25-year production license once a commercial discovery is made.
That’s a major feat for a small company with a market cap of ~$50-million. Still, they’ve done what is usually reserved for the majors: They’ve secured the oil and gas rights to an entire sedimentary basin in Namibia and Botswana--both very friendly to oil exploration, with very low royalty fees (5%) and an estimated 18.2 billion barrels of oil in place.
It is the quintessential setup for the rare savvy junior. It has plans to go big on exploration, and even has the potential to be scooped up by a supermajor that’s already operating in the region.
And if that wasn’t enough--this small-cap just keeps getting bigger and bigger: On June 11th, they expanded their position, announcing a new petroleum license covering the Eastern extension for the Deep Kavango Basin and a farm-out option agreement. That new license is northwestern Botswana is for 2.45 million acres and is contiguous to its 6.3-million-acre petroleum license in northeast Namibia.
And now, ReconAfrica is fully funded for a 3-well drilling campaign, and acquired its first rig earlier this year.
And just as exciting - one of the world’s leading Geochemists, Dan Jarvie of Worldwide Geochemistry has just put out a report on Recon Africa’s oil potential and he is saying there is potential for 120 billion barrels of petroleum potential on just 12% of Recon Africa’s holdings. You can read his full report here: https://reconafrica.com/wp-content/uploads/ReconAfrica-Postulated-Petroleum-Yields-V2.pdf
Dan does not put his name to anything he doesn’t strongly believe in. This is a very strong message from one of the shale sectors pioneers.
That’s an unusually advantageous position for a small-cap oil and gas company to be in--especially these days. The typical scenario is that a small-cap company has to keep going back to the market to raise bits and pieces of money to actually get to the drilling, and they usually move very slowly.
That’s not the case with ReconAfrica (TSX:RECO.V; OTC: RECAF) because it’s already fully funded and de-risked to prove this basin up.
Their last raise was a huge success. They brought in over CAD$22 million, making it the most successful oil deal on the Toronto Stock Exchange (TSX.V) this year.
Why? Because I believe investors understand the potential size of the deal here …
How Risky Is Oil’s Next Frontier?
Whether it’s legacies like Nigeria and Angola, or newcomers with massive potential such as Ghana, Uganda, Mozambique or Namibia, what’s always kept investors away is the regulatory risk associated with these venues.
That’s exactly why Africa is, today, the next frontier for oil.
Park, who has spent years identifying and creating investor-friendly petroleum regimes around the world - from Africa to South America - says this is exactly what makes or breaks a country’s oil industry.
Overall, Park says he’s disappointed that Africa has fallen so far behind.
That’s a result of states creating regimes that are “complex and heavily taxed”, he says. “They also fail to give investors the assurances they need. Investors want to be confident that when they make a discovery, it will turn into money.”
So, while Africa is definitely the place to go for resources, it’s not always attractive to investors.
According to Deloitte, the risks are high, and companies need to plan for everything from regulatory and policy hurdles, to problems with third-party partners and suppliers, environmental and labor issues, and overriding questions of infrastructure.
In addition to that, “macro risks, such as political, security, governance, economic structural, country liquidity and currency risks also loom large”.
For Park, Namibia ticked all the right boxes: good geology, good fiscal terms and a good regime. That includes a 5% royalty and a 35% corporate income tax on oil reserve profits--and, of course, the country is offering up good deals because it hasn’t made any discoveries yet.
For companies who can properly navigate the risk, that risk gets smaller every day, particularly thanks to technological advancements.
Major developments over the past decade and a half open up enormous possibilities in this underexplored region.
And if parts of Africa weren’t on investor radar yet, they will be soon.
“You probably hadn’t heard of Suriname on the oil map until a couple of months ago,” says Park. “By the time it’s on everyone’s radar, it’s much less of an opportunity. Namibia, for instance, is just emerging as one of the world’s exploration hot-spots with some big wells going down this year. But for now, it’s a virgin opportunity.”
“Success with ReconAfrica's three-well programme could radically alter the value of the Company because it has all rights to the entire sedimentary basin. In all, the basin is optimally conducive to a functioning petroleum system that must be drilled,” Park said.
Other companies set to win big as oil prices bounce back:
Total (NYSE:TOT)
Total is a diversified French energy company which holds to a ‘big picture’ outlook across all of its endeavors. Not only has the company taken a progressive approach towards loomin climate risks, it’s taking into account how its operations are set to impact the world’s growing population. That’s why its receive great praise for its commitment to contributing to each of the United Nations’ Sustainable Development Goals. From diversity and societal progression and workplace safety to its commitment to reducing its own carbon footprint, the near-100 year old energy giant is checking all the right boxes for investors.
While Total’s share price slipped in March along with the wider market, Total’s pivot towards sustainability has helped it outperform some of its peers. Though it still maintains a major presence in the global oil and gas industry, it has made significant strides in the renewable realm, as well.
BP (NYSE:BP)
British Petroleum is another European energy giant slowly pivoting towards greener energy alternatives. BP, which has been criticized in the past as being slow and late to the environmental cause, could now leapfrog its peers. We are still a long way from Beyond Petroleum. But chief executive Bernard Looney believes that we are only 30 years from a net zero BP. He has promised that in September the company will lay out a more detailed plan that shows the path to that destination. But he has shown already that there is more to his commitment to net-zero than there was to Beyond Petroleum 20 years ago.
“Renewables and natural gas together account for the great majority of the growth in primary energy. In our evolving transition scenario, 85% of new energy is lower carbon,” Spencer Dale, BP group chief economist, said, commenting on the outlook to 2040.
ExxonMobile (NYSE:XOM)
Exxon is an outlier in the recent downturn in oil prices. Unlike its peers, Exxon hasn’t booked major writedowns since oil prices crashed earlier this year. It also has deviated from its European peers in its lack of committing to a solid carbon target, though it is making headwinds in the fight to reduce its own emissions, especially in the race for carbon capture tech.
ExxonMobil claims to have about one-fifth of the world’s total carbon capture capacity. The company captures about 7 million tons per year of carbon. This has been in place since 1970, and the company claims to have captured more CO2 than any other company — more than 40 percent of cumulative CO2 captured.
Suncor Energy (NYSE:SU; TSX:SU)
Suncor Energy has adopted a number of high-tech solutions for finding, pumping, storing, and delivering its resources. Not only is it big in the oil sector, however, it is a leader in renewable energy. Recently, the company invested $300 million in a wind farm located in Alberta.
When the rebound in crude prices finally materializes, giants like Suncor are sure to do well out of it. While many of the oil majors have given up on oil sands production – those who focus on technological advancements in the area have a great long-term outlook. And that upside is further amplified by the fact that it is currently looking particularly under-valued compared to its peers.
Canadian Natural Resources (NYSE:CNQ; TSX:CNQ)
Though Canadian oil has had a particularly rough go at it this year, Canadian Natural Resources, kept its dividend intact after swinging to a loss for the first half of the year, while Canada's producers are scaling back production by around 1 million bpd amid low oil prices and demand. Though Canadian Natural Resources kept its dividend, it withdrew its production guidance for 2020, however. It also said it would curtail some production at high-cost conventional projects in North America and oil sands operations and carry out planned turnaround activities at oil sands projects in the second half of 2020.
While the Canadian energy giant has seen its stock price slump this year, it could provide a potentially opportunity for investors as oil prices rebound. It is already up over 170% from its March lows, and it could still have some more room to run.
https://finance.yahoo.com/news/biggest-oil-discovery-could-happen-000000074.html
Coronavirus to set back plastic waste and pollution reduction efforts 1-3 years - analyst
By Joseph Chang 2020/08/17 NEW YORK (ICIS)--The coronavirus pandemic will roll back global efforts to reduce plastic waste by 1-3 years, an analyst said on Monday.
“We believe that the pandemic has set back efforts to reduce plastic waste and pollution by 1-3 years… Bans and taxes have been rolled back, physical and chemical recycling activity has decreased, and virus concerns may have reduced consumers’ desire to minimise consumption of single-use plastics,” said Laurence Alexander, analyst at Jefferies, in a research note.
While the overall volume of plastics waste is down because of demand destruction across large swaths of the global economy, demand for single-use plastics is flat to marginally up, he added.
Indian refiners processed 2.5% less oil in July compared to June, the first monthly fall since April, as renewed restrictions due to rising coronavirus cases stalled recovery in fuel sales in the world’s third-largest domestic market.
India refiners’ crude processing plunged by a record 28.8 per cent in April, when the country was under complete lockdown and has been recovering since as its normally traffic-clogged cities eased restrictions, putting drivers back on the road.
Processing by Indian refiners in July, by comparison, was down 18.8 per cent from a year earlier to 4.18 million barrels per day (bpd) or 17.68 million tonnes, the government data released on Tuesday showed.
At the heart of the fall is a slide in fuel consumption, with data last week showing an 11per cent fall in actual oil sales.
Weak refining margins have also encouraged refiners to rein in output and capacity use is set to decline further in August due to shutdowns at Reliance Industries Ltd`s Jamnagar plant and the complete closure of IOC`S 300,000 bpd Paradip for most of the month.
Indian refiners operated at about 83.3 per cent of their overall capacity in July compared to 85.4 per cent in June, the data showed.
Top refiner Indian Oil Corp (IOC) operated its directly owned plants at 90.6% capacity, the data showed.
The company said last month it would continue to operate its refineries below capacity in 2020/21 due to expectations demand would remain subdued.
Reliance, the owner of the world`s biggest refining complex, operated its plants at about 74 per cent capacity.
In an outbreak that trails only Brazil and the United States in terms of size, coronavirus cases in India surged to 3.17 million on Tuesday.
Natural gas output in July declined 10.3% from a year ago to 2.44 billion cubic metres, and crude oil production fell by 5% to 2.63 million tonnes (620,000 barrels per day), the data showed.
Motiva Enterprises is temporarily shutting down its Port Arthur refinery, the nation’s largest, in preparation for Hurricane Laura.
The Houston independent refiner on Tuesday said it will halt operations at its refinery and petrochemical plant in Port Arthur to protect its personnel and facilities from the hurricane, which expected to land as either a Category 2 or 3 hurricane near Lake Charles, La., on Wednesday night or Thursday morning. If Laura becomes a Category 3, it would be the first major Atlantic hurricane in 2020.
“The safety of our employees, contractors, and communities is a company core value and remains our top priority through any emergency event,” said the comany, a subsidiary of Saudi Aramco. “Precautions are taken in advance of a potential storm to safeguard our personnel and physical assets as well as ensure reliable fuel supply in our communities after the storm passes.”
MOTIVA CUTS: Houston-based Motiva to lay off 10% of workforce by September
Gulf Coast refineries, which process about half of the nation’s fuel and natural gas, and chemical plants are particularly susceptible to hurricanes’ devastating effects.
In 2017, Hurricane Harvey dumped more than 51 inches of rain in the Houston area, flooding the city’s petrochemical corridor and releasing dozens of known carcinogens, including benzene, vinyl chloride and butadiene, into local neighborhoods. In one case, an Arkema chemical plant in Crosby exploded after the plant’s backup generators flooded and lost power, releasing hazardous gases from organic peroxides into the surrounding area.
In September, Exxon temporarily shut down its Beaumont refinery because of flooding caused by Tropical Storm Imelda. The company is operating its refinery units normally as of yesterday..
Meteorologists don’t expect Laura to stall over Houston like Harvey did, but they warn that the storm could bring high winds and storm surges that could affect coastal refineries.
Houston refiner and chemical maker Phillips 66 said it is monitoring the progress of Laura but doesn’t expect it to affect its refineries or operations. The company has three refineries along the coast — in Westlake, La., Belle Chasse, La., and Sweeny.
Pipeline operator Kinder Morgan suspended activities at two terminals along the Louisiana coast. Energy Transfer shut down a pipeline that hauls gas from offshore fields to Louisiana.
Exports of the very low-sulphur fuel oil (VLSFO), with a maximum sulphur content of 0.5% to comply with emission rules set by the International Maritime Organization (IMO), were 1.18 million tonnes, down from June's 1.26 million tonnes.
Exports for the first seven months totalled 7.64 million tonnes, according to data from the General Administration of Customs.
Fuel oil imports into bonded storage, which include both high sulphur and low sulphur materials, were around 520,000 tonnes, down from 1.29 million tonnes in June.
Part of the high sulphur imports could be for deliveries into bonded storage against the futures contracts <0#SFU:> traded at the Shanghai Futures Exchange.
Chinese refineries have expanded their production capacity of VLSFO amid Beijing's push to reduce its reliance on bunker fuel imports and to create its own marine fuel hub to supply northern Asia.
Plants began exporting VLSFO in January after Beijing offered tax incentives to boost local production of the fuel, but only allowed four state refiners - Sinopec, CNPC, CNOOC and Sinochem - and private refiner Zhejiang Petrochemical Corp to export under a combined quota of 10 million tonnes.
The table below shows China's fuel oil imports and exports.
The column of exports under bonded storage trade largely captures China's VLSFO bunkering sales along its coast.
Exports Bonded storage trade YTD
Jan-Feb 1,560,681 1,560,681
Mar 1,068,789 2,629,470
Apr 1,425,085 4,062,655
May 1,143,929 5,196,914
June 1,264,909 6,461,687
July 1,179,766 7,641,453
Imports Ordinary Bonded storage Monthly YTD
Trade total
Jan-Feb 199,770 2,516,123 2,716,957 2,716,957
March 208,462 747,236 955,698 3,672,655
April 67,657 1,029,406 1,097,063 4,769,718
May 46,892 1,553,326 1,600,218 6,275,290
June 230,465 1,292,880 1,523,345 7,798,520
July 99,529 518,917 618,446 8,416,966
Iran's benchmark TSE index (TEDPIX) has soared 330% since the start of the year in local currency terms thanks to a breathtaking rally in oil firms, refineries and the petrochemical industry - accounting for more than a third of the top 30 companies.
The steep ascent, however, may have little to do with confidence in the country's future. Instead, it mirrors events in Venezuela and Zimbabwe, where indexes have surged more than 400% in local terms amid rising inflation and capital controls.
"Stock market gains in Iran should not be viewed as a signal of economic stabilisation, but rather a reflection of hyperinflation and trapped capital, more akin to Zimbabwe than Russia or Saudi Arabia," said Hasnain Malik, head of equity research at Tellimer.
"Local wealth is seeking a refuge to preserve some of their capital," he added.
The lion's share of the gains comes from energy firms - the main source of foreign exchange revenue for the country, putting the sector in a stronger position compared to others.
The Isfahan Oil Refining Company has roared 500% higher since the start of the year, while Tehran Oil Refining Company is up 450% and Bandar Abbas Oil Refining Company up 250%.
The trajectory of Iran's oil stocks seems out of line with international counterparts, with refiners in Asia and North America permanently closing their processing plants due to uncertain prospects for a recovery in fuel demand.
The share prices of U.S. refiners Marathon Petroleum Corp and HollyFrontier have halved since the start of the year.
This summer, Tehran planned to sell some of its shares in refineries including Isfahan Refinery, Tehran Refinery and Bandar Abbas Refinery. However, a delay due to disagreements among ministries has caused the stocks to retreat from their record highs in the last two weeks.
"The government does not want to sell its shares cheap," said Arash Safari, a trader at TSE.
By selling part of its shares, the government seeks to raise funds to curb a ballooning budget deficit due to oil sanctions.
Many traders invested their money in the refineries and petrochemicals firms, betting oil exports will rebound one day and oil prices will increase. Some were punting on oil prices - which fell some 30% this year and are currently hovering at $45 per barrel - to bounce back to $70 in the coming months.
"The refineries with more exposure to exports benefited the most from the rise in the stock market and the depreciation of the rial," said an oil and products trader on condition of anonymity.
LOCAL DRIVE
A complicated web of restrictions and sanctions has made Iran's stock market almost exclusively a playing field for local investors. Meanwhile, rising price pressures have spurred more retail investors to plough cash into shares.
"Inflation, or to be more exact expected inflation, is the main factor for the rise of the index of the Tehran Stock Exchange," a TSE spokesperson told Reuters.
"Fortunately or unfortunately, Iran's economy has long faced economic sanctions which intensified in recent years - this has limited the impact of the global economy on the Iranian economy," the TSE added.
Inflation stood at 27% in July, according to Iran's official statistics. The International Monetary Fund predicts it could exceed 34% over the year. Iran's rial currency has weakened 70% against the dollar since Jan. 1.
"A lot of capital that is flowing into the stock exchange is money that otherwise would have been leaving Iran, but now is actually a more difficult time for Iranians to find ways to take their capital abroad," said Esfandyar Batmanghelidj, founder of Bourse & Bazaar, a think tank focused on Iran's economy.
Clerical rulers also encouraged ordinary Iranians to invest in local stocks to boost the country's economy.
While analysts and traders warn of a bubble that could burst, President Hassan Rouhani called the unprecedented rally a sign of economic resilience against the U.S. sanctions.
"They are all angry and say that the stock market is in turmoil all over the world," Rouhani said in April. "Why is the Iranian stock market growing? Iran's stock market is good because of the efforts of all companies and economic activists."
Iran has agreed to allow inspectors by the United Nations' nuclear watchdog to access two suspected former secret nuclear sites, after a months-long standoff between the two sides.
The agreement reached on Wednesday came during a visit by the International Atomic Energy Agency (IAEA) chief Rafael Grossi to Tehran for high-level talks.
"Iran is voluntarily providing the IAEA with access to the two locations specified by the IAEA," Grossi and the head of Iran's nuclear agency, Ali Akbar Salehi, said in a joint statement.
"Dates for the IAEA access and the verification activities have been agreed."
In exchange, the agency said it would pursue no further questions regarding this issue.
"Both sides recognise the independence, impartiality and professionalism of the IAEA continue to be essential in the fulfilment of its verification activities," the statement said.
The IAEA had for months sought access to the sites in Tehran and Isfahan where Iran is suspected of having stored or used undeclared nuclear material.
In June, the IAEA stepped up pressure on Iran when its Board of Governors passed a resolution calling it to let inspectors into the sites and cooperate with the agency. Until Wednesday, however, Tehran had refused to grant access arguing that the UN's nuclear watchdog's requests were based on allegations from Israel and had no legal basis.
"Iran, like before, is ready to cooperate with the IAEA," Iranian President Hassan Rouhani told Grossi on Wednesday, according to state media.
He called the agreement "favourable" and said it can help "finally settle issues". Rouhani also called on Grossi to consider that Iran has "sworn enemies" with nuclear weapons who do not cooperate with the IAEA and are "always seeking to cause issues" for Tehran.
Grossi's trip took place shortly before a September 1 meeting of the joint commission on a landmark nuclear deal signed in 2015 between Tehran and world powers.
Under the accord, known as Joint Comprehensive Plan of Action (JCPOA), Iran scaled back its uranium enrichment programme and promised not to pursue nuclear weapons. In exchange, international sanctions were lifted, allowing Tehran to sell its oil and gas worldwide.
But the JCPOA has been in jeopardy since President Donald Trump unilaterally withdrew the United States from it in 2018 and reimposed crippling economic sanctions on Iran, leading Tehran to start scaling back compliance with the deal.
On Thursday, the US attempted to invoke a punitive measure included in the JCPOA by declaring that Iran was, in fact, in violation of the agreement.
The JCPOA's European signatories - France, Germany and the United Kingdom - rejected the move, saying the US had no such right since it was no longer a party to the deal.
Official Chinese data showed this week that China imported 120,000 barrels per day (bpd) of oil from Iran in July as Beijing returns to reporting crude imports from the Islamic Republic after reporting no such imports for June.
According to Chinese customs data reported by Radio Farda, China’s oil imports from Iran averaged 77,000 bpd between January and July this year, nine times lower than the figures China had reported before the U.S. re-imposed sanctions on Iran’s oil industry and exports.
In reality, various reports, media investigations, and tanker-tracking firms suggest that China is receiving much more oil from Iran than the official figures report.
China’s imports from Iran, as reported by the customs data, corresponds with data provided by data intelligence company Kpler to Radio Farda.
But one tanker, as per Kpler data, tried to cover up the origin of Iranian oil going to China labeling the cargo as “Indonesian oil.”
That tanker, the Giessel, was one of four oil tankers that the Caribbean island state of St. Kitts & Nevis stripped of its flag after an NBC News investigation found that as many as 15 tankers under various flags had manipulated their trackers to skirt the U.S. sanctions on Iran’s oil exports.
An earlier investigation by NBC News found that those tankers were switching off trackers to hide the fact that they had traveled to Iranian waters to load oil for exports in violation of the U.S. sanctions on Iran’s oil industry.
Iran is exporting a lot more crude oil than U.S. figures suggest, data from TankerTrackers.com has revealed, as reported by NBC News.
According to the data, Iran is exporting as much as 600,000 bpd, using ship-to-ship transfers with transponders turned off to avoid detection, skirting U.S. sanctions. The daily average number compares with an estimate of 227,000 bpd made in a U.S. Congressional report, NBC’s Raf Sanchez wrote on Twitter.
Norway's Equinor will not drill any more wells in the U.S. shale patch this year as it adjusts to a lower-for-longer oil price environment, a spokesperson for the company said as quoted by Hart Energy.
The company stopped drilling in the Bakken and the Marcellus shale plays where it has acreage in March this year as it slashed billions in spending in response to the oil price collapse. Now, Equinor will also be cutting jobs in the shale patch, although it has yet to specify how many.
On the silver lining side, however, the company has no asset sale plans, which means it could still have long-term plans for its shale oil and gas operations in the United States.
"There is no change in our acreage portfolio. The action that we are taking now is to ensure that our business is profitable in a lower price scenario," the spokesperson said.
"Equinor is in a strong financial position to handle market volatility and uncertainty," outgoing CEO Eldar Sætre said in March. "Our strategy remains firm, and we are now taking actions to further strengthen our resilience in this situation with the spread of the corona virus and low commodity prices."
At the time, Equinor said it could be cash flow neutral at oil prices of $25 per barrel. Since March, prices first dipped and then recovered above that level, which must have benefited the company. In a lower-for-longer scenario, however, everyone is adjusting.
Meanwhile, like the rest of the European majors, Equinor is pursuing its transition strategy from an oil company to a broader energy company. Early this year, before the pandemic hit, Equinor unveiled a plan to reduce the net carbon intensity of the energy it produces by at least 50 percent by 2050.
The firm also plans to grow its renewables business and become a global offshore wind major. Under the plan from February, Equinor targets to grow its renewable energy capacity tenfold by 2026, when it expects production capacity from renewable projects of 4 GW to 6 GW.
Robert Louis Stevenson once wisely said, “Don’t judge each day by the harvest you reap, but by the seed you plant.” I try to reflect on this quote every day because sometimes thinking about the end goal is simply too overwhelming, it seems too unattainable. Sometimes the only way to tackle a big project, one that may seem impossible is to take it one step at a time, to break it down into bite size chunks.
Today, I write to you to celebrate a small step taken by the communities of Midland and Odessa to someday reap the harvest of not two cities working separately but one community unified with purpose.
I recently had the honor of being appointed by my fellow councilmen and woman to sit on the Metropolitan Planning Organization (MPO) Policy Board. For those unfamiliar with what the MPO does, in short, it is a board made up of one elected official from the two County Commissioner Courts (Midland and Ector) and the two city councils (Midland and Odessa), tasked with the purpose of envisioning, prioritizing, and commissioning studies for future road development between the two communities.
It was not long after being asked to serve on the MPO that I was approached by the then newly elected Mayor of Midland, Patrick Payton, about his vision for a massive outer loop around both cities, connecting both communities and driving future development. There were several hurdles before an endeavor like this could take place. As I began to pursue the fulfillment of the mayor’s vision, I went about learning the history of our past successes in completing major road projects; very quickly a common thread emerged. We only succeeded when we approached the powers that be, not as Midland or Odessa but as a unified Permian Basin.
Recently meetings have been taking place between the stakeholders on the MPO from both communities to work on a strategy of cohesion and to provide a unified front to TXDOT for more road funding in the Permian Basin.
I am proud to tell you that today that strategy has taken its first baby steps. Thanks to the leadership of Ector County Judge Debi Hays, Odessa City Councilman Tom Sprawls, and Midland County Commissioner Robin Donnelly, our board is proud to announce that we have approved a $250,000 study specifically directed to finding the necessary routes for a greater loop around our two communities. It should be noted that this study requires no additional revenue from taxpayers.
Until the study is complete in 12-18 months we won’t really know where the optimal route would be and if this loop’s primary purpose will initially be as a freight reliever route to Loops 250 and 338; however there is no doubt that this loop will spur further economic development in our region. Eventually such a loop would connect to the future I-14 and I-27 corridors currently being discussed at the Federal level, to further connect Midland-Odessa to the wider world.
It is my hope that this study is the first step in a grander strategy between our two communities to our mutual benefit. It is also my desire that in writing this op-ed others will be inspired to reach out and become involved in how they might further this dream for greater connection between our communities. The most important step we can take as a unified community is not the first step but always the next step.
The Permian Basin has been the center of oil and gas production nationally – even globally – amid its unconventional shale boom.
Now the region stands to be the global center of efforts to capture and eliminate carbon emissions, helping the environment and climate change. That’s because the region will be the site of the world’s largest Direct Air Capture and sequestration facility in the next few years.
“Direct Air Capture technology is known,” Jim McDermott, chief executive officer of 1PointFive and founder and managing partner of Rusheen Capital Management, said in a phone interview. “It’s time to scale that technology up. The Permian is beneficial because people know carbon capture, and the region can safely store it. The Permian Basin will play a large role and, if the solutions work, that will have a global impact.”
1PointFive – named for the international protocol of limiting global warming to 1.5 degrees – is a just-formed joint venture between Oxy Low Carbon Ventures, a subsidiary of Occidental Petroleum, and Rusheen to finance and deploy the technology.
“Our focus is to design, build, own and operate Direct Air Capture plants, first in the Permian Basin and use for atmospheric carbon capture and permanently put it away in Occidental fields,” McDermott said.
When he was on the board of Carbon Engineering, the Canadian clean energy company that developed the DAC technology that is being licensed to 1PointFive, he met Vicki Hollub, chief executive officer of Occidental. McDermott said she was instrumental in moving the project forward.
“Fossil fuels are not going anywhere, but we need to find ways to have less carbon emissions,” he said.
He met with Richard Jackson, president of Oxy Low Carbon Ventures and chairman of 1PointFive. “Richard and I talked about the need – this is exciting technology – to build a plant as quickly as we can. The Permian Basin is an amazing place in terms of infrastructure for CO2. Occidental has billions of dollars in infrastructure and the most well-developed CO2 operations. The Permian has a CO2 management system, and Texas has very efficient deregulated electric grid. West Texas also has some of the lowest-cost wind and solar power and low-cost storage capacity.”
Engineering and design for the first facility is underway and, while the COVID-19 pandemic caused some delays, McDermott said it is on target for construction to begin in 2022, with completion set for roughly two years later. A site in the Permian has been selected but is not being disclosed, he said. That first facility will be followed by at least 27 more, and McDermott said he envisions thousands of such plants being constructed around the nation and around the world.
“This is an enormous opportunity for the oil and gas industry in West Texas and the Permian Basin to lead the world in decarbonizing fossil fuels and long-term sequestration,” he said.
McDermott added, “Oil companies know the subsurface, oil and gas and minerals better than anyone.”
The challenge is figuring out what to do with that carbon, he said, and the key to answering that question is using the existing skills so prevalent in the Permian in CO2-based enhanced oil recovery and repositioning them in a different direction.
“That’s what energy transition looks like,” he said.
Taking advantage of discounted prices, HomeBound Resources has completed a $4.4 million acquisition in the Midland Basin that spans Midland, Martin, Reagan and Glasscock counties in Texas and Lea County in New Mexico.
“This goes to Tier One proved, developed, producing assets,” Stefan Toth, chief executive officer, said in a phone interview. He said that when his company started looking at the assets the first of this year, the price was $10.5 million.
The acquisition includes 55 drilled wells and 106 acres of proven undeveloped reserves (PUDs) with roughly 50 locations at varying depths. The company estimates the average lifting cost on the acquisition is below $15 per barrel.
Toth said his company has been seeing that, as operators see their borrowing bases for developing assets shrink, those companies are divesting Tier One assets that they don’t operate, while keeping operated assets and assets they have to develop through continuous drilling clauses. That makes maintaining cash flow important, he said.
The Midland Basin acquisition is a small piece of the company’s acquisition plans, he said.
“We’re looking at larger portfolios. Cash flow is what we’re targeting. The most expensive asset is not the lease but what’s already generating cash flow. Someone already took the risk, made it a producing asset,” he said.
The company also eyes assets that are in line to begin production within a 12-month period, Toth said.
The acquisition was made on behalf of an energy-focused investment fund, sponsored by HomeBound and offered through Resolute Capital Partners, which invests in productive regions with known oil and gas fields that are too complex for small companies and not large enough for many public companies.
“In the private equity and private capital space, there needed to be a contrarian space,” Tom Powell, senior managing partner and founder of Resolute, said in a phone interview.
Powell said the oil and gas industry is not a favored child of banks or public lending institutions, which opens tremendous opportunities for private equity companies such as Resolute.
“Energy is what drives the U.S. and the world,” he said. “Capital leaving such an integral industry provides us the opportunity to provide capital.”
Resolute, Powell said, has a number of companies managed by HomeBound.
“We invested in the team; we helped grow a fantastic team,” he said.
The two are looking for similar opportunities in the greater Texas market, Powell said, noting that the Lone Star State is a fantastic place to do business, though the Permian Basin remains a prime area of opportunities. Powell said the partners are looking at as few as five and as many as eight opportunities.
Said Toth, “We want in the basin with the lowest operating expenses, the lowest capital expenditures. We’re not looking at reinventing the wheel. We focus our clear line of sight on great operating assets in great basins – the Midland, the Delaware, the Denver-Julesberg.”
This year, the company was able to acquire a workover rig and four crew members to work on its wells, Toth said. He said the company uses local vendors in the counties where it has wells – Andrews and Crane for example.
The Labor Environment Action Network (LEAN) has emailed its supporters as part of their "residential gas-to-electric" program encouraging them to ditch gas stoves and heaters for electric ones.
"A residential gas-to-electric program comes with an added bonus: it will free up gas for industry and give our manufacturers the extra time they need to switch to new fuels such as hydrogen," the campaign said.
LEAN draws on the Australian Electrical Market Operator's gas report earlier this year which forecasts a shortage in gas from 2023-24, saying supplies could be freed up if more people were using electrical appliances.
"We know increasing gas supply is not the solution — it is not good for the economy, it is not good for jobs, and it is not good for the environment," the campaign said.
"The only long-term solution is to reduce the demand for gas."
Residential and commercial gas consumption growth is projected to be relatively flat, from 191 PJ in 2020 to 205 PJ in 2039, according to AEMO.
"The effect of continuing and new energy efficiency schemes, fuel switching away from gas appliances, and assumed sustained high gas prices are forecast to offset growth in domestic usage of gas from new gas connections," it said in its 2020 Gas Statement of Opportunities.
Despite the email sent to subscribers, LEAN national co-convener Felicity Wade told Energy News it was neither "possible or preferable" for commercial kitchens, or even homeowners to throw out current appliances.
"The kinds of policy prescriptions that the Victorian branch of LEAN is envisaging relate more to providing household incentives to switch over time from gas dependence to low carbon electricity," she said.
"This might include encouraging new residential buildings to avoid gas connections or encouraging those replacing appliances to consider electric alternatives."
The campaign has been joined by other groups, including Lock the Gate, which said it "made sense" to be advocating for households to make the switch, making the same arguments about emissions and lowering gas demand. .
"Upgrading your gas hot water system to an electric heat pump can help reduce your emissions by around 10 tonnes over the heat pump's life while saving A$150 per year," it said.
LEAN is also using the campaign to argue against the AGL's Cribb Point LNG import terminal in Victoria, calling the proposal a "white elephant".
"The terminal lacks local community support, will not reduce gas prices, and will adversely impact the local environment," it said.
AGL's project will be made up of a gas import jetty and floating storage and regasification unit permanently moored there and a 57-kilometre pipeline to the suburb of Pakenham
In its environmental impact statement submitted in July, AGL said it would begin building next year with first gas slated for two years after that, meeting the shortfall and supplying double what Santos' planned Narrabri CSG project in NSW could - a project also vehemently opposed by environmental groups.
AGL's is one of several competing LNG import plans, but unlike Australian Industrial Energy's planned Port Kembla terminal it is a greenfield development that has even drawn ire from politicking local member Greg Hunt, who is Health Minister in Liberal Scott Morrison's cabinet.
"The project would source gas from interstate and international suppliers for residential, commercial and industrial customers in south-eastern Australia," AGL said.
Santos CSG's project is currently before the Independent Planning Commission, which is slated to hand down its decision to let the project go ahead or not next month.
On Friday, August 21, Turkey's President Recep Tayyip Erdogan announced that a sizeable natural gas field had been found off the Turkish Black Sea coast. The discovery of some 320 billion cubic metres (bcm) reserve is being hailed as a game-changer. "It is only the beginning," presidential adviser and spokesman Ibrahim Kalin remarked. "We are very hopeful that it would lead to other fields in the same area."
Such an enthusiastic response is understandable. Today, Turkey consumes large amounts of natural gas. Rapid economic growth over the past decades has seen a demand surge from a meagre 0.5bcm in 1987 to 53.5bcm in 2017, most of which is imported.
Historically, Turkey's biggest gas supplier has been Russia, accounting for more than half of the volume entering the country, followed by Iran, Azerbaijan, Algeria, Qatar and others. In the first half of this year, however, Russian and Iranian gas imports slumped by more than 40 percent, with Azerbaijan emerging as the biggest exporter to the Turkish market, supplying almost a quarter of all gas imports. In the same period, imports of liquified natural gas (LNG) grew by almost 45 percent, with Algeria and Qatar claiming about half of those imports.
Indigenous production promises to reduce dependence on external suppliers and possibly lay the groundwork for exports to lucrative markets in the EU. Beyond reducing Turkey's chronic trade deficit fuelled by a large oil and gas bill, Black Sea hydrocarbons may boost its political leverage, too.
What also matters, of course, is the timing of the discovery in the Tuna-1 zone, about 100 nautical miles north of the Turkish coast in the western Black Sea. Erdogan's announcement comes at a time when Turkey is locked in a dispute over maritime boundaries and access to offshore hydrocarbon deposits in the Eastern Mediterranean.
The agreement signed with the Government of National Accord (GNA) in Libya for the delimitation of the exclusive economic zones (EEZs) has led to pushback by Greece, Cyprus, Egypt, Israel, and lately, France. Tensions are rising after Greek and Turkish ships collided earlier in August.
And this week, the airforces of Greece and the United Arab Emirates (UAE) are holding their first-ever joint drill south of the island of Crete. It follows earlier Turkish wargames. While both Ankara and Athens would prefer to avoid dangerous escalation and eventually come back to the negotiating table, neither wants to blink first.
But should Erdogan choose to dial down pressure by freezing exploratory activities in the disputed waters around Cyprus or off the Greek island of Kastellorizo, the new discovery would provide the means to divert domestic attention. Unlike the Eastern Mediterranean, territorial waters and EEZs in the Black Sea are generally not contested (aside from Crimea, of course, after the Russian annexation in 2014).
Right now, the chances for such a shift are slim. Cross-party support for Turkey's muscular posture vis-a-vis Greece and its allies runs strong. More assertive diplomacy appears to be paying off, whether in Syria, Libya or in the Eastern Mediterranean. Last but not least, Turkish policymakers do not see a linkage between the two issues. But keeping all options on the table, including de-escalation and diversion, would be a prudent choice for Ankara.
The gas discovery is also seen in Turkey as a piece of positive news at a moment when the Turkish economy is struggling. After a bounceback in 2019, it has taken a huge hit due to the COVID-19 pandemic. The IMF and World Bank expect the gross domestic product (GDP) to shrink by 3.8-5 percent this year, for the first time since 2009. The Turkish lira has lost a fifth of its value vis-a-vis the dollar since January.
There will be a modest recovery in 2021, but the golden days when the governing Justice and Development Party (AKP) was winning support on the back of robust growth and improvement of living standards and welfare provision are gone.
Black Sea gas is not the silver bullet to rescue Turkey. Though authorities are vowing that production will kick off as early as 2023, the centennial of the Republic, tapping into offshore deposits is technically challenging and costly. With hydrocarbon prices low, recouping investment might prove difficult.
Demand on the Turkish domestic market is in decline over the past two years and indigenously sourced volumes will face competition from importers, including cheap liquefied natural gas (LNG). The same applies to putative gas recovered from the Eastern Mediterranean in case a settlement is reached. It might well turn out to be too expensive to sell. In other words, there is no energy bonanza just around the corner.
Still, the Black Sea find does make a difference. In the coming five years, Turkey will be renegotiating its long-term contracts with major suppliers. The list includes deals signed with Gazprom for the so-called Western route, currently served by the TurkStream pipeline, as well as for Blue Stream.
The Turkish state-owned utility BOTAS will have extra leverage in extracting better terms on issues such as the pricing formula or indeed the take-or-pay clause obliging it, as it stands now, to absorb 80 percent of the contracted volumes. Gazprom's market share has been contracting rapidly over the past two years.
Yet Ankara will be driving a hard bargain with the State Oil Company of Azerbaijan (SOCAR) one of whose contracts is expiring in 2021. Qatargas, on the other hand, is likely to be afforded preferential treatment in upcoming negotiations, courtesy of the close diplomatic and military alliance between Ankara and Doha.
In sum, Turkey will gain flexibility and increase its say over external energy relations. Domestic production of gas can recast strategic relations with Russia. Diversifying energy supplies away from Gazprom does strengthen Turkey's hand and allows it to compete against Russia where their interests diverge, but it will not usher in a major turnaround.
Ankara and Moscow still need each other on a host of issues, from Syria, to Libya, to Black Sea security. Moving closer to its goal to achieve energy independence, Turkey will continue to balance between Russia and the West in pursuit of status and influence.
Former Governor of the Bank of England Mark Carney has joined investor Brookfield Asset Management to oversee the firm’s investment strategies.
Carney will serve as the company’s vice chair and head of ESG (environmental, social and governance) and impact fund investing.
Brookfield CEO Bruce Flatt stated that Carney will help the investment firm to “combine better long-term outcomes for society with strong risk-adjusted returns”.
To date, the company has invested in nearly 20GW of operational renewable energy capacity and has 18GW in development globally through its Brookfield Renewable Partners unit, it stated.
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Vestas has secured an order to supply 20 of its V150-4.2MW turbines in 4.3MW power-optimised mode to CPC Germania’s 86MW Lakiakangas III wind farm in Southern Ostrobothnia, western Finland.
It will also service the turbines for 20 years.
Turbine delivery is expected to be completed by the second half of 2021.
CPC Germania had secured a power contract for Lakiakangas III in Finland’s technology-neutral auction scheme in 2019.
Vestas had previously provided turbines to the first two phases of CPC Germania’s Lakiakangas wind complex.
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Goldwind and Lacour Energy have secured buyers for output from a 348MW portion of their 450MW Clarke Creek wind farm in Queensland, Australia.
The Queensland Government and the Stanwell Corporation – a state government-owned energy company – will buy output for 15 years.
Construction is planned to start in mid-2021.
The company he runs is a big contributor to NZ's carbon emissions. We gave Z Energy boss Mike Bennett's 60 seconds to explain his big idea for tackling climate change. See the full One Hot Minute series at stuff.co.nz/onehotminute
Z Energy boss Mike Bennetts says his company can earn more from selling New Zealand biofuel to companies in the United States than it can make from selling its lower-carbon fuel to Kiwis.
US government subsidies of around 17 cents a litre make it hard to justify selling the fuel in New Zealand, where there’s no subsidy, Bennetts said.
Z Energy put its Auckland biodiesel plant into hibernation after being outbid by overseas buyers for the fatty animal tallow it was turning into diesel for milk tankers and other vehicles.
In the first episode of Stuff’s new video and podcast series, One Hot Minute, Bennetts said a government subsidy was crucial to make the local biofuel market viable, unless carbon prices or oil prices spiked dramatically.
“If the price of oil was $150 a barrel, it would solve itself. If the price of carbon was $150-200 a tonne, it would solve itself. Or if there was a targeted incentive, that could solve it,” he said.
Unlike fuels made from corn or other crops, biofuels made from waste, such as tallow, don’t take up land needed for food production, Bennetts said. Biofuels could cut New Zealand’s transport emissions during the many years it will take to transition the ageing car and truck fleets to electric vehicles and other low-carbon options, he said.
He told Stuff some of Z’s corporate customers had paid a premium for biodiesel, but it wasn’t enough to recoup the $50 million cost for building the plant and operating it at a loss.
Maarten Holl/Stuff Z Energy CEO Mike Bennetts is pushing the Government to support biofuels as a bridge to electrification of vehicles.
With uptake of electric cars still painfully slow, Bennetts isn’t the only one calling for Government intervention to cut tailpipe emissions. But not everyone agrees focussing on cleaner cars and trucks should be the priority, with some fearing it will come at the expense of radically increasing public transport, walking and cycling.
Transport is New Zealand’s fastest-growing emissions problem, accounting for around a fifth of greenhouse gases, and growing.
Bennetts’ company’s products alone are responsible for 8 per cent of New Zealand’s total emissions – and an even bigger share of carbon dioxide.
In his podcast interview, Bennetts acknowledged the irony of selling fossil fuels for a job while calling for stronger climate action.
But he argued he wasn’t the only one in New Zealand in this awkward position.
While School Strike 4 Climate protestors were on the streets demanding action to slash the country’s carbon output, some of their parents were expressing their outrage at the prospect of rising petrol prices, Bennetts said.
The Z boss has downsized his car and stopped eating meat to cut his personal climate impact, though he still flies regularly for work.
He expects he’ll still be selling fossil fuels the day he retires.
“I’m a father, I've got two daughters in their early 20s, I hope to be a grandfather one day. I think very carefully, in my roles both as a parent and a business leader, about the legacy I leave. I don’t want to be the guy who people say... why didn’t they push harder?”
“But I don’t have a billion dollars of my own, personally or as a company, to go and pay for the transition we need.”
South Africa has issued a request for proposals (RPF) to procure emergency power to help plug a severe energy shortage, the Department of Mineral Resources and Energy (DMRE) announced Saturday.
The programme seeks to procure 2000 megawatts (MW) from a range of energy sources and technologies, it said.
Proposed technical solutions will have to be able to provide a range of support services to the grid system operator, the Department added.
Proposals must meet BEE criteria
The RFP is designed to support Broad Based Black Economic Empowerment initiatives including ownership and localisation.
“Bidders will have to make commitments in terms of job creation, socio-economic development, supplier and enterprise development and skills development.”
Stringent local content thresholds and targets have also been introduced that should provide “impetus to the local construction and manufacturing sectors.”
This RFP is expected to attract investment in the region of R40 billion and “all power procured under this programme is expected to be fully operational by not later than the end of June 2022,” the department said in Saturday’s statement.
Embattled Eskom wobbles on
Beleaguered state-owned power utility Eskom has been forced to cut power regularly, retarding economic growth in Africa’s most industrialised economy as unreliable and outdated diesel and coal-fired plants struggle to generate enough electricity to meet rising demand.
Load shedding has returned as South Africa eased strict lockdown restrictions to contain COVID-19, and has re-opened power-gobbling industries, such as mining, in a bid to resuscitate a struggling economy.
Look at who has closed the N17 in Bethal Mpumalanga this evening.
They are protesting against loadshedding caused by @SikonathiM of @Eskom_SA pic.twitter.com/5fOdMecrB2 — Engineer Matšhela Koko (@koko_matshela) August 19, 2020
During load shedding, which is meant to protect the national power grid from complete collapse, residents and businesses are typically left without electricity for a couple of hours at a time, causing huge frustrations and putting business entities at risk.
In December, South Africa issued a request for information (RFI) to source between 2000 and 3000 MW of generation capacity to be connected in the shortest time, and at the lowest cost.
In February, Turkey’s Karpowership, one of the world’s largest suppliers of floating power plants with projects on the go in some thirteen countries, said it had submitted plans to provide “several” ships capable of alleviating the country’s power shortages, Bloomberg reported.
Right now my friends across the state are staring down disaster after disaster, suffering through climate change in action while they struggle with the ongoing pandemic.
Last week, a heat wave baked the West. In Death Valley, a world record may have been set for the hottest temperature observed on Earth: 130 degrees Fahrenheit. From Phoenix, Arizona, to the Bay Area, people turned up their air-conditioning, straining California’s electricity infrastructure, because the state imports power from its neighbors. Demand outstripped supply, and the grid operator started rolling blackouts. The cause is climate change: It has made heat waves five times more likely to occur in the western United States.
During the blackouts, California had unusually intense lightning strikes, which dotted the darkened landscape with electricity from the sky. These storms triggered fires across Northern California, forcing more than 100,000 people to evacuate their homes. Climate change has increased fire risk, and lengthened the fire season. It’s only August, and already more land has burned in California this year than all of 2019.
These climate disasters are happening against the backdrop of the still uncontrolled coronavirus outbreak, which makes it harder for people to flee to safety. Evacuating to a friend’s house or a community center when a highly contagious illness is circulating is not a simple choice.
Those theoretically “safe” in their homes don’t have it easy, either. Without electricity, many Californians have to choose between opening the windows and breathing in air choked with smoke, or keeping them closed in a hot house. My friend posted a picture of herself wearing an N95 mask with an exhalation valve, and a surgical mask on top: the first to protect herself against the smoke, the second to protect others from the virus.
I don’t want to live in a world where we have to decide which mask to wear for which disaster, but this is the world we are making. And we’ve only started to alter the climate. Imagine what it will be like when we’ve doubled or tripled the warming, as we are on track to do.
Climate change is not just destabilizing California’s grid. The East Coast is facing down a deadly hurricane season and has already seen outages for 1.4 million people. An unprecedented wind storm—which some are calling an “inland hurricane”—left a quarter million people in the Midwest without power.
Yet some people refuse to acknowledge that climate change is the cause of the problems California is facing. The Wall Street Journal published a misleading editorial blaming the state’s reliance on renewable energy for the outages.
In reality, several fossil-gas plants unexpectedly went offline when the heat wave struck, resulting in less available power. Gas plants can struggle to operate in the heat. In an ironic twist, burning fossil fuels will become less reliable in our hotter world. And California’s grid is connected to other states’, so when a heat wave spikes electricity demand from Arizona to Nevada, that leaves less power to import. With lower rainfall and many years of drought—again, caused in part by climate change—many of the state’s hydropower plants were also underperforming.
“Last year 29 gigawatts of offshore wind capacity was connected to electricity grids around the world. In 2029 Wood Mackenzie forecasts that number will hit 180 gigawatts.”
BBC News 13th August
That’s all you need to know to forecast that offshore wind turbine installation is going to become the next wild west of the offshore industry – with a boom, followed by the inevitable bust, as the supply of vessels to install windfarm installation capacity increases to meet the huge increase in demand. Last week (here) we covered the current state of play of the industry – ever larger, more powerful turbines being installed in ever deeper water by jackups with ever larger cranes, with installations starting to surge in Asia, and new projects on the Atlantic coast of the USA to add to burgeoning demand in Northern Europe.
Here’s a hot new investment pitch
Now, everyone is waking up to the potential, not just the dredging companies in the Lowlands, who have invested aggressively to build bigger and better wind turbine installation vessels (WTIVs) in recent years. Now, everyone wants a piece of the action, especially the brokers and finance houses with compelling PowerPoints to sell investments to institutional investors, the same people who poured into the cablelay business in the 1990s, leading to a surfeit of cable-lay vessels, and the inevitable bankruptcy of the industry leader Global Crossings; and the same people who urged investment in deep-water drilling and PSVs in the early 2010s, which led to the bankruptcy of just about every major offshore drillship owner (see Valaris’ Chapter 11 announcement last week here).
Speculation: Build it and they will charter
Speculative newbuild WTIVs are the order of the day. There’s a reason for this. Analysts have identified a massive shortfall in capacity for newbuild jackup windfarm installation vessels. The brokers foresee a supply crunch, which will send day rates higher, as windfarm operators like Ørsted and Total clamour to charter vessels to install the turbines they have ordered.
Suddenly, jackup WTIVs look as if they are the critical path item for many new windfarms. Current forecasts suggest that not enough vessels will be available, as the number of installed turbines increases from just over seven thousand this year to close to 27,000 in 2030.
Scorpio signs with Daewoo
The business case was made in a compelling fashion by Scorpio Bulkers, when it announced on August 3, 2020, that it had signed a letter of intent to construct a WTIV at Daewoo in Korea, along with three option vessels. Scorpio helpfully posted the PowerPoint justification online here. If you only read one PowerPoint on the offshore wind industry, read that one, and just focus on this one graph here, on page 7: (click link at the bottom of the page)
The Scorpio WTIV is a GustoMSC NG 16000X design with a 1,500-tonne leg encircling crane from Huisman. Since windfarms are all about the green energy, Scorpio has been at pains to show how the vessel has “strong eco credentials” with hybrid battery power and is designed to be “fuel cell ready,” whenever anyone builds a sufficiently compact fuel cell to place onboard a jackup without jeopardising its deck load capacity or stability (Where are you, Elon Musk?).
Scorpio highlighted that total cost of the new build project is expected to be “approximately US$265 – US$290 million.” Given that Scorpio Bulkers has a market capitalisation of only US$175 million and reported a net loss of US$45 million in the second quarter (here) financing four such units may be a stretch…
However, the business case seems strong. Those helpful people at Clarksons-Platou claim that the world needs at least ten more WTIVs simply to meet 2024 demand for turbine installation.
Ulstein Design has made the same argument here.
Scorpio argues that current contract rates of US$220,000 per day “imply attractive cash flow and return on capital” and, the kicker, “potential for rates to improve as the market tightens over the next three to four years”. This business case looks infallible, surely – even if our summary of windfarm vessels last week seemed to show considerably more than just five high-specification WTIVs already existing and on order in the world.
So, what could go wrong?
Triumph has spotted the treasure, too
Such low hanging fruit has unfortunately not escaped the greedy eyes of others. On August 11, Triumph Subsea Services announced that it had signed a letter of intent for a pair of new build WTIVs, to be built to the GustoMSC NG-14000XL design at Brodosplit shipyard in Croatia.
Triumph’s press release managed to check every “green hype” buzzword, declaring, “In-line with our core values of green, our ethos of technology, and our mission to be net zero by 2035 or sooner, the vessels have been designed from the onset to be future proofed, and will be DNV GL classed with numerous green notations, including Fuel Cell (Power). The FC (Power) notation, along with the installation of the latest advanced hybrid technology, energy recovery and autonomous systems reduce fuel consumption and carbon emissions by up to 50 per cent compared to similar vessels. Once the fuel cell technology is ready for installation, it will be short duration dry-docking to then reconfigure the vessel into a 100 per cent net zero emissions vessel.”
Triumph of the will? Billion dollar newbuild plans
Questions hang over who is funding Triumph, and how it will pay the half a billion US dollars required to build its WTIVs in Croatia. The answer?
I don’t know… but since the company has also announced another letter of intent with the same Croatian shipyard to build a pair of field development vessels plus two option vessels of the same design, each 200 metres long with two 600-tonne fibre rope cranes, as well as “commitment” to build a Jones Act-compliant floating wind farm installation vessel for the American market, Triumph will need very deep pockets – like billions of dollars deep.
The announcements are here – there is also a “collaborative partnership” to invest in Norwegian Eelume autonomous underwater vehicles, which look like giant, robotic eels, and which Triumph says will be deployed from its field development vessels. Watch out, Ocean Infinity and Fugro; you have a potential, new rival in the vicious, subsea robot war (here)!
For those of you too lazy to click on the link, Triumph says that the expected steel-cutting date of the first hull is in February 2021, with the cutting of steel for the second hull being six months later. The company estimates that the build time from contract signing is 30-32 months for the first vessel.
Perhaps there will be some state or EU funding, as Triumph claims that “this new contract will ensure the sustainability of the Croatian shipbuilding industry and will create numerous employment opportunities and supply chain revenues for local and EU regions.”
So that is six newbuilds to plug the gap. But wait, there are more, as you would expect in a gold rush.
Norwegians jump in with newbuilds, too
No offshore bubble is ever complete without Norwegian involvement, so it was no surprise to find that Offshore Heavy Transport was entering the turbine installation market, when it announced (here) that it had entered into a binding heads of agreement with China Merchants Heavy Industry in Jiangsu, China, for the construction of two WTIVs with options for a further two units.
Guess what? The vessels will be jackups of GustoMSC design, with a telescopic crane with maximum capacity of 2,500-tonnes and a maximum lifting height of around 165 metres.
Readers will not be surprised to learn that “special emphasis has been placed on providing a class-leading environmental footprint by way of energy and heat recovery, battery hybrid solutions as well as a sophisticated electrical and control system, reducing CO2 emissions by 20 per cent compared to similar units… As a future option, the vessels have been prepared for fuel cells powered by hydrogen to be installed to cut emissions even further.”
OHT says that the first unit will be delivered in early 2023, whilst the delivery structure for the second unit is flexible. Which is usually the case at Chinese shipyards, anyway…
OHT offers integration through the supply chain
What differentiates OHT from Scorpio and Triumph is that it is already an established player in the heavy lift market, albeit usually transporting jackup and semi-sub rigs and offshore modules around the world on its fleet of five semi-submersible heavy lift vessels (here). In 2018, OHT announced a contract to build what the company claimed was “the world’s largest and most efficient wind turbine foundation installation vessel” named Alfa Lift, also at China Merchants.
Alfa Lift will be delivered next year, and is designed to install monopiles and jackets from a floating vessel in dynamic positioning mode “to achieve higher efficiencies and lower cost” the company states.
Dogger Bank in the bag
As turbine and monopile production is standardised and becomes a centralised production line, OHT reckons its heavy lift vessels can provide the transport leg from factory to offshore, and then its installation vessels will complete the work in a seamless chain. It already boasts that for the Moray East windfarm off Scotland, it is transporting 48 jacket foundations from the UAE.
OHT has also announced that Alfa Lift has been awarded the transport and installation contract for the foundations of the Dogger Bank A and B windfarms in the North Sea. This is the world’s largest offshore wind farm and Alfa Lift will commence the work from 2022 onwards, with Dutch owner Jan De Nul’s new build WTIV Voltaire, contracted to install the massive 12MW turbines there.
OHT’s entry means DEME, Van Oord, Boskalis, and Jan de Nul now have serious Norwegian competition.
Japan becomes the next battleground
With three new players battling to supply the European market against the seven incumbents, there’s also a turf war breaking out in Asia, where nationalism means that each country prefers to use nationally built and flagged vessels, if available. So, Japanese construction company Shimizu has announced it will make an investment of 50 billion Japanese yen, (about US$477 million) to build, guess what, a newbuild WTIV in Japan for the Japanese market.
This unit will be equipped with a crane with a maximum lift capacity of 2,500 tonnes and a maximum lift height of 158 metres. It is designed to be able to transport and install seven 8MW wind turbines in a single voyage in water depths of up to 65 metres.
The unit’s crane offers both a combination of high hoisting capability for turbine installation (1,250 tonnes at 158 metres) and a heavy load capability for foundation installation (2,500 tonnes at 121 metres).
Japan Marine United Corporation will build the vessel, and it will be designed by GustoMSC again (see announcement here). To ensure maximum local content in the operations, Fukada Salvage will provide crew and will technically manage the unit.
Then, in March this year, PaxOcean Group of Singapore and Penta-Ocean Construction of Japan announced that they would co-operate to build a WTIV at a PaxOcean yard, again to target the Japanese market. They claimed that the jack up would be fitted with a 1,600-tonne crane, a 3,800-square-metre deck and built to a GustoMSC design for delivery in the second half of 2022. Baird coverage here.
NYK ties up with Van Oord
The old proverb says that good things come in threes. So, at the same time, Japanese ship owning giant NYK also announced that it and Dutch contractor Van Oord plan to own and operate Japanese-flagged offshore wind installation vessels (here) as well.
It’s not clear whether they will reflag an existing Van Oord asset, or build a new one, but NYK said that the WTIV will “be suitable to install the latest generation of wind turbines” when it announced the memorandum of understanding with its Dutch partner. The two players will also “explore opportunities to collaborate on other types of vessels required for the construction and operation of offshore wind farms.”
To cover the day to day windfarm personnel and light cargo operations after the electricity is flowing, NYK also announced an agreement to co-operate on the ownership and operation of windfarm crew transfer vessels with Sweden’s Northern Offshore Group, which already operates 35 such vessels in Northern Europe (see here).
China also building
Enough! But August also saw China’s OuYang Offshore announce it would be building two newbuild WTIVs. The vessels, OuYang 003 and OuYang 004, will be constructed at the Dayang Offshore Equipment’s shipyard in China and AqualisBraemar’s will provide the newbuilding supervision.
OuYang already operates two WTIVs – OuYang 001 and OuYang 002.
The newbuilds are self-propelled, with an operational water depth of up to 50 metres and accommodation for up to 68 persons. They are smaller units, well suited for China’s shallow water, smaller turbine, domestic market.
OuYang 003 and OuYang 004 will be equipped with one 600-tonne leg fitted crane with a lifting height of 140 metres from sea level. The WTIVs are capable of the lifting installation of 10MW wind turbines in China, AqualisBraemar said in its release here.
America joins in
Then in May, Dominion Energy touted that in addition to building America’s largest commercial offshore windfarm, it would also participate in a consortium to build America’s first domestic WTIV. Because the world needs more, clearly, and the Jones Act would give such a vessel a commercial edge in US waters.
The company’s CEO Thomas Farrell announced the move during Dominion’s first quarter conference call. During the call with analysts, Mr Farrell explained that funding needs to be finalised among consortium participants for the WTIV, and that he hoped the WTIV would enter service in 2023. Watch this space.
Conclusion: Too much of a good thing
We can see now that a bubble is building in the wind farm sector. The new building announcements covered here total billions of dollars of additional capital entering the sector. Demand is going to rise sharply in the short term, but supply risks overshooting in the medium term, as we see in every single shipping bubble. The same analysts are touting the same business case to a dozen ship owners and investors, just as they did in the deepwater drilling frenzy from 2008 onwards.
The early movers may well make a mint and profit handsomely, but it is hard to avoid the conclusion that there is a serious risk of an excess of new WTIVs leading to a calamitous collapse in the US$220,000 per day rates Scorpio identified.
In Part 3 next week, we’ll look at other factors which may burst the WTIV bubble in the medium term.
Announcements of plans and projects for hydrogen-based energy are appearing with ever scale and ambition in Europe and Asia. The United States, in contrast, is not seeing the same sort of headline grabbing initiatives. But the US is making quiet progress and laying the basis for what could soon emerge as a national strategy for hydrogen energy.
The European Union’s new Hydrogen Strategy, closely linked to its Energy System Integration Strategy, wants to create a large regional hydrogen market encompassing Eastern Europe and North Africa. And Northeast Asia is on par with Europe regarding plans for hydrogen adoption. Japan’s far-reaching planning includes the import of ‘blue hydrogen’ (produced with carbon capture) from major oil and gas exporting countries of the Middle East.
While the US has not announced a major effort of this scale, significant progress is being made in envisioning and initiating a future “hydrogen economy.” The US government is now funding a dedicated initiative that focuses on emergent technologies and market development. Meanwhile, a major industry group has published a realistic “roadmap” that sets out a 10-year timeline for new technology deployment and the opening of markets.
DOE does hydrogen
The US Department of Energy’s H2@Scale program, described as a ‘multi-year initiative to fully realize hydrogen’s benefits across the economy,’ is a four-year old initiative that is beginning to show results. It sees hydrogen as an integration technology that enhances the performance of diverse energy sources and plays a key role in facilitating a low carbon energy system.
During the past year, DOE has channeled more than $100 million in grants to some 50 projects to further the H2@Scale initiative. They are funded through DOE’s Energy Efficiency and Renewable Energy Office (EERE), through its Hydrogen and Fuel Cell Technologies Office (HFTO) in cooperation with other EERE offices. Just last month, EERE announced approximately $64 million for 18 projects in Fiscal Year 2020. Related: General Haftar Rejects Libyan Truce, Calls It ‘Marketing Stunt’
The selected projects show great breadth and focus where technological development is required to broadly advance the deployment of hydrogen throughout the US energy system. Taken together, they show the key role hydrogen is expected to play in de-carbonizing transport, heavy industry, energy storage, and other energy-intensive sectors.
Six projects are devoted to research and development on fuel cell technology and manufacturing of heavy-duty fuel cell trucks. There is support for private sector R & D on electrolyzer manufacturing, and for corporate and academic research on hydrogen storage, specifically high-strength carbon fiber for hydrogen storage tanks. There are two projects to spur demonstrations of large-scale hydrogen utilization at ports and data centers, and academic research on application of hydrogen for the production of ‘green steel.’ One project is devoted to a training program for a future hydrogen and fuel cell workforce.
“H2@Scale is identifying new and emerging markets, where the integration of hydrogen technologies can add value,” says Sunita Satyapal, EERE HFTO Director. “Some examples of these markets are data centers, ports, steel manufacturing, and medium and heavy-duty trucks,” she adds.
Ms. Satyapal says that projects are designed to bridge gaps in technology innovation, with demonstrations of how to turn hydrogen opportunities into real solutions. All research, development and demonstration under the purview of HFTO is guided by technical, performance, and cost targets. The targets have been developed with industry input to ensure that new technologies will be competitive with incumbent technologies.
“Projects will emphasize strengthening the hydrogen supply chain through innovative manufacturing approaches and techniques,” she says.
In addition to the competitively selected and funded projects, there are over 25 H2@Scale projects under lab cooperative agreements. The Cooperative Research and Development Agreements (CRADA) enable national laboratories to work with industry on key technical areas to advance H2@scale. A new call for CRADA projects was recently made with up to $24 million available for collaborative projects at national laboratories in two priority areas: hydrogen fueling technologies for medium- and heavy-duty FCEVs; and hydrogen blending in natural gas pipelines.
Industry input
“The U.S. Department of Energy’s H2@Scale program is crucial to enabling broader commercialization of transformational hydrogen and fuel cell technologies,” says Morry Markowitz, President of the Fuel Cell and Hydrogen Energy Association (FCHEA).
“Many of these projects are advancing hydrogen applications in traditionally hard-to-decarbonize markets such as heavy-duty transportation, shipping propulsion, and steel production,” he says. Related: Two Major Shale Drillers Plan Layoffs
FCHEA, a Washington DC-based industry association that seeks to promote commercialization and markets for fuel cells and hydrogen energy, has produced a comprehensive vision for a “Hydrogen Economy.” Its Road Map to a US Hydrogen Economy looks at the full spectrum of potential applications: as a low-carbon (potentially zero-carbon) fuel for residential and commercial buildings; as an important fuel in the transportation sector; as a fuel and feedstock for industry and long-distance transport; as an important player in the power sector for power generation and grid balancing.
FCHEA’s road map may well prefigure an official strategy for hydrogen, should the US government get serious about comprehensive planning and goal-setting for a low carbon energy future. It has four phases: 2020-22 (immediate steps), 2023-25 (early scale-up), 2026-30 (diversification), and beyond 2030 when the group would expect a ‘broad rollout’ of hydrogen applications.
The immediate steps start with setting goals at state and national levels. They also focus on the best opportunities to scale mature applications, seeking cost reductions that will open new opportunities. An early opportunity is seen in states that have renewable energy standards, where the appropriate regulatory framework can allow hydrogen to begin to have a role in electric grid stability and storage.
In early scale-up, large-scale hydrogen production and demand starts to bring costs down. The road map sets specific goals for fuel cell electric vehicles (FCEVs), both light and heavy-duty, and calls for scaling up the fueling station network. Retrofitting of power generation will allow enhanced grid balancing while blending with natural gas for buildings also begins.
Diversification begins at mid-decade with some 17 million metric tons of low-carbon hydrogen fuel consumed annually and 1.2 million FCEVs sold. By the end of the decade the critical infrastructure is in place with the hard-to-decarbonize sectors of heavy industry and aviation being impacted. An economy-wide carbon price will facilitate this expansion.
Beyond 2030, the backbone infrastructure of hydrogen begins to appear at large-scale, with low-carbon hydrogen production, a hydrogen distribution pipeline network, and a large fueling station network across the US. By 2050, the adoption of hydrogen fuel cells for distributed power is standard, while on-site electrolyzers support local grids, energy storage and load balancing while providing hydrogen for fueling stations. In industry, low-carbon hydrogen is a widely used feedstock, produced either with carbon capture and storage or with dedicated renewables and on-site water electrolysis.
This lofty vision for hydrogen will rely on strong government leadership and close cooperation with industry. The FCHEA’s road map notes that European and Asian countries are now investing in the groundwork for a future hydrogen economy. The group calls on the US to not fall behind.
Rice
Rice was higher again last week as the harvest is active near the Gulf Coast. The weekly charts show that a small bottom has formed and the daily charts imply that higher prices are coming. New crop prospects appear solid for increased production in the coming year. The area is larger and the growing conditions are mostly good. The crops are called in good condition in Mississippi, Arkansas, and Missouri. Texas and southern Louisiana field yield reports are strong. Quality is called average to above average. Export demand for the new crop Rice has been slow to develop as buyers wait for lower prices. Domestic demand has also been less. It looks like many buyers bought and hoarded Rice during the first pandemic scare and are now full of supplies.
(Reuters) - The U.S. unit of diversified Canadian miner Northern Dynasty Minerals Ltd on Saturday denied a media report that said the administration of U.S. President Donald Trump plans to block its proposed Pebble Mine in Alaska early next week.
Politico reported https://www.politico.com/news/2020/08/22/trump-set-to-block-alaska-pebble-mine-400206 earlier on Saturday that Trump was planning to block the proposed Pebble Mine, which environmentalists argue would damage the surrounding salmon-rich habitat, and the people and wildlife that depend on it.
"We firmly believe that the implication pushed by Politico that the White House is going to kill the project is clearly in error, likely made by a rush to publish rather than doing the necessary diligence to track down the full story", Pebble Limited Partnership said in a statement.
The U.S. Army Corps of Engineers (USACE) office in Alaska is planning to hold a conference call on Monday with groups connected to the proposed mine to discuss its decision, Politico reported, citing people familiar with the plans.
"It appears that the normal process continues to move forward", Pebble Limited Partnership said, adding the USACE was going to publish a letter on Monday.
"Based upon our ongoing interaction with the USACE, we believe the letter will discuss the need for a significant amount of mitigation for the project's wetlands impacts," it said.
Politico, which included Pebble's response in its report, did not immediately respond to a request for comment on the company's denial.
The Trump administration in July proposed approving a permit for the mine near an Alaska salmon fishery, boosting a project the administration of former President Barack Obama tried to block on environmental grounds.
Earlier this month, Democratic presidential candidate Joe Biden opposed the project, saying that if he was elected in the November election, his administration would stop the proposed mine.
https://finance.yahoo.com/news/northern-dynastys-u-unit-denies-041358037.html
In the 19th century California gold rush, the surest way to a fortune, according to Mark Twain, was to be in the “pick and shovel business.”
If 2020 gold fever has an equivalent, it’s the ETF business.
Exchange-traded funds backed by physical gold and silver accumulated more than $50 billion of bullion this year. ETFs now hold more gold than every central bank with the exception of the Federal Reserve.
That’s generated windfall fees for ETFs and has been a boon for everyone involved in the business of servicing those enormous hoards of shiny metal. That includes the financial firms that provide the funds to investors, through to the banks and security firms responsible for storing hundreds of billions of dollars worth of gold and silver beneath the streets of London.
“At these times, it’s a very good business to be in,” said George Milling-Stanley, chief gold strategist at State Street Global Advisors, the marketing agent for the largest gold ETF, SPDR Gold Shares or GLD. “There’s no question in my mind that ETF demand is driving gold right now.”
ETFs typically charge fees as a percentage of the value of their assets. With investors adding to their holdings as spot gold soared to a record above $2,075 an ounce this month, earnings have benefited from a double boost.
Total fees for the top 10 gold ETFs, based on current prices and holdings, are about $610 million a year, according to a Bloomberg News calculation; while for the top five silver ETFs the figure is around $110 million. Investors have bought more silver through ETFs in the first eight months of the year than was produced by the world’s 10 largest miners combined last year.
GLD is delivering some $300 million of fees a year at current holdings and prices. That’s good news for State Street and also for the World Gold Council -- a mining industry-backed group that helped create the ETF -- as both take a cut of those fees.
It’s also benefited the few big banks -- principally JPMorgan Chase & Co. and HSBC Holdings Plc -- that hold gold and silver on behalf of the ETFs in underground vaults, behind foot-thick reinforced doors. For them it’s a niche business, but as holdings have surged in value, it has become a solid earner.
GLD’s gold is held in HSBC’s vault in London. The last time the vaulting fees were disclosed, in 2015, they amounted to 10 basis points, or 0.1%, per year for the first 4.5 million ounces held, followed by 6 basis points thereafter. HSBC declined to comment.
Vaulting typically accounts for roughly 10% of the $1.1 billion to $1.2 billion a year that banks earn from precious metals, according to Amrit Shahani, research director at Coalition Development Ltd. But, he said that figure “will be pretty much double” this year.
Vaulting Strains
The surge in demand has strained the system.
GLD’s quarterly reports reveal that beginning in April, it owned some gold that was not held at HSBC’s vault, but instead at the Bank of England, which trails only the Fed in its store of bullion.
As movements of gold were slowed down by social distancing during the coronavirus pandemic, the BOE couldn’t transport the metal quickly enough to HSBC’s own London vault to meet the ETF’s demand, according to people familiar with the situation.
The record pace of silver buying by ETFs is causing other headaches. Bulkier and less valuable than gold, it takes up large amounts of space in a vault.
The custodian for the largest silver ETF, the iShares Silver Trust or SLV, is JPMorgan. For a long time, the fund’s prospectus included a note explaining that if its holdings increased above 500 million ounces, it would seek an additional custodian. But in July, as SLV’s holdings soared above that level, the clause was quietly dropped.
JPMorgan has done several deals with other vault providers in London, and is now storing silver on behalf of the ETF with Malca-Amit, which has a vault close to Heathrow Airport, as well as two vaults owned by Brink’s Co., according to the ETF’s daily bar lists.
A spokeswoman for BlackRock Inc., which owns iShares, declined to comment.
Still, bankers and logistics providers say there’s still vault space available in London, following an expansion during the last gold bull market. That includes room in HSBC’s vault, according to Milling-Stanley of State Street Global Advisors.
“We’re a corner of HSBC’s vault with GLD,” he said, even with the growth surge in the gold-backed ETF. “The vault is enormous, no question about that. We have space in that vault.”
https://finance.yahoo.com/news/gold-fever-2020-means-exchange-060000154.html
(Bloomberg) -- Northern Dynasty Minerals Ltd. plunged after reports the Trump administration is planning to block the controversial Pebble mining project in Alaska.
The project has drawn opposition from prominent Republicans including Donald Trump Jr. On Monday, an Army Corps of Engineers letter was made public demanding a mitigation plan for “unavoidable adverse impacts.”
Pebble is in an area in southwestern Alaska that drains into Bristol Bay, home to the world’s most productive salmon fishery. Conservationists, local activists and fishing operations have fought the project for years, but blocking it would be a reversal for an administration that has allowed a review of the plan to proceed.
The project -- which has known deposits of copper, gold and other metals -- secured a final environmental impact review from the U.S. Army Corps of Engineers last month.
But in order to submit a “record of decision,” the Army Corps said in a letter dated Aug. 20 that the company needs to develop a mitigation plan within 90 days “to compensate for all direct and indirect impacts caused by discharges into aquatic resources” over thousands of acres of wetlands.
Cantor Fitzgerald analyst Mike Kozak put his rating and price target on Northern Dynasty under review, citing Pebble uncertainties.
Northern Dynasty fell as much as 51% in Toronto, the steepest intraday drop since at least 1994 when Bloomberg records begin. The shares, which more than tripled this year through Friday, were down 34% as of 12:01 p.m.
The company said Monday in a statement that it launched an advertising and outreach campaign targeting “the Trump Administration, the Republican Party, its delegates and influencers to coincide with the Republican National Convention kicking off Tuesday.” The campaign includes television ads to influence people in the party and others in “the conservative movement.”
Trump Jr., a keen sportsman, took to Twitter this month to oppose the mining project, lining up with Nick Ayers, a former chief of staff to Vice President Mike Pence.
https://finance.yahoo.com/news/alaska-mine-developer-plunges-reports-141132439.html
Bulk ore sorting, sometimes called bulk diversion is on the minds of a number of top tier miners today and at the heart of this is scanning based on different types of sensor technology. Bulk ore sorting is generally the most cost effective technique to upgrade conveyed flow quality as elemental composition measurement can provide ore grade, deleterious content, mineralogy correlations, and other processing parameters (such as ore hardness indicators, clay content) in a single pass following primary or secondary crushing. Suitable measurement accuracy can be achieved independent of rock size, belt speed, segregation or layering, presence of dust or surface coatings, and moisture content through customised configuration and performance enhancements if needed.
Two options are Prompt Gamma Neutron Activation Analysis (PGNAA) and Pulsed Fast Thermal Neutron Activation (PFTNA) for continuous, online bulk mined ore analysis, which are now being applied in sorting projects. The leading supplier of PGNAA to the minerals sector is Scantech, based in Adelaide, Australia. Its GEOSCAN-M is a high-performance elemental analyser utilising Prompt Gamma Neutron Activation Analysis (PGNAA) to measure the elemental composition continuously in real time, through the full conveyed cross section so that the entire flow can be representatively measured. Unique advantages of the GEOSCAN-M are that it is proven on belts containing steel cords and chlorine (such as FRAS rated belts used underground) and on ores such as potash containing high chlorine levels or those with rare earth elements.
The GEOSCAN can be configured to measure over shorter or longer time increments depending on the application. Where bulk sorting is required, short analysis, say every 30 seconds, allows for a minimal sorting increment mass, whereas for blending purposes a longer measurement time of say five minutes may be appropriate. Typically results are reported every 1 or 2 minutes. The GEOSCAN-M has a patented no belt contact design and has no wear components, ensuring minimal maintenance requirements as well as complete safety through careful design of the shielding and access. Except in a few jurisdictions, no isolation area is required around the GEOSCAN-M during normal operation.
Henry Kurth, Scantech’s Minerals Consultant, told IM that bulk diversion (bulk ore sorting) requires a flow diversion process to be activated by the plant control system using real time GEOSCAN-M measurements. Delay time between GEOSCAN and diverter is taken into account so that each increment is diverted as accurately as possible. Low quality material can be rejected entirely so it is not processed, or diverted to a stockpile. Only high specification analysers have proven effective for bulk ore sorting as very short measurement times with good measurement accuracy are needed to optimise selectivity (<10 t per increment for 1,000 t/h flow) and maximise confidence in diversion decisions. Ore value can also be determined through levels of deleterious components, elemental ratios to indicate ore type, or comminution characteristics eg hardness, which can be derived from elemental results.
One of the global miners at the forefont of bulk ore sorting, utilising MMD systems consisting of a grizzly, feeder, mineral sizer, conveyors, diverter, stackers & associated equipment, is Anglo American. It has been trialling several sensor technologies in the past two years, and had selected GEOSCAN-M for evaluation at its three main bulk ore sorting sites, namely Mogalakwena platinum mine in South Africa, its Barro Alto nickel operation in Brazil and the El Soldado copper mine in Chile. Since the initial sensor acquisitions it has also gone on to invest in additional units. PGNAA and PFTNA are the key sensor technologies in Anglo’s ore sorting program and it has also purchased CNA3 cross-belt analysers from Malvern Panalytical that use PTFNA, as well as using some XRF technology.
Elsewhere in the world, underground copper and gold block cave mine New Afton is using GEOSCAN-M for active grade management diverting (every 8 t) low grade material from the conveyed flow to surface (from 1,000-1,300 t/h flows) and stockpiling the low grade material for potential processing in future. It had also evaluated XRF for conveyed quality measurement but this was not successful.
In Australia, Newcrest’s Cadia gold and copper mine has the GEOSCAN-M operating and is receiving results every 30 seconds on a 4,000 t/h flow. They were looking to utilise the analyser data in a number of ways, not just bulk ore sorting. Newcrest has since bought another GEOSCAN-M for evaluation for bulk ore sorting at a gold focussed site. GEOSCAN-M can measure gold directly in conveyed flows over longer time increments but for bulk ore sorting uses proxies for gold where available.
Scantech told IM it has now sold GEOSCAN-M analysers (additional to those mentioned above) to copper mines in Canada, Peru, Chile and Australia for 30 second measurement at 0.02% Cu precisions. Some are for bulk ore sorting with others for evaluating 30 second measurement data to understand ore variability in real time including for feed forward control. Scantech has experience using GEOSCAN-M in bulk ore sorting of iron ore going back to 2008, where a third of a site’s product is diverted to bypass unnecessary processing. It saves them $6-7 million/y in beneficiation costs. Payback for all of their 19 GEOSCAN-M units used throughout their flowsheet was well under 18 months.
Going back further, Scantech started out selling on-belt analysers for bulk sorting and other applications in coal since the mid-1980s. By 1991 IEA Coal Research estimated there were 23 analysers being used for coal sorting. Since then many more have been installed. In the late 1990s, Scantech supplied natural gamma analysers to a gold operation in South Africa for waste conveyors. When the uranium content spiked the site knew through the close uranium to gold relationship that there was ore on these belts and they diverted those segments of flow to the process plant to recover the gold. Paybacks were achieved in a matter of weeks.
Kurth told IM that bulk sorting aside, other GEOSCAN-M applications include ore reconciliation, ore blending, product blending, sinter basicity control, feed forward plant control, metal accounting, and general quality monitoring. The advantage is the availability of representative, accurate, real time compositional measurements every 30 seconds to every 2 minutes.
And in addition to GEOSCAN-M, Scantech TBM moisture analysers have also been in high demand due to proven performance in multiple industries and commodities for reliable moisture measurement on a second by second basis. In mining this has proven beneficial in measuring plant feed to determine dry tonnes, moisture content control in dust management, dryer and filter performance optimisation and TML monitoring.
Lastly, Scantech recently released its new SIZESCAN PSD analyser which is a next generation on belt particle size analysis system. It was developed by COREM in Quebec and incorporates 3D infrared camera technology that improves particle recognition through advanced algorithms. This overcomes segmentation limitations of existing 2D digital camera systems which also require dust and lighting controls which add to install cost and ongoing maintenance. SIZESCAN does not have any ongoing software licences fees or data access costs and, like all Scantech’s analysers, data is owned by the client. The SIZESCAN also measures the conveyed volume accurately as well as belt speed and can be used for mass flow measurement using material bulk densities, or can utilise the PSD data to adjust bulk density input. GEOSCAN-M, TBM and SIZESCAN can all easily be installed together within a 5-10 m section of a conveyor.
https://im-mining.com/2020/08/24/scantechs-geoscan-m-heart-bulk-ore-sorting-mining/
Key Highlights:
AEX has safely mobilized its entire expatriate and local Greenlandic workforce in Greenland, with the site fully staffed since August 15, 2020.
Nalunaq's core exploration activities in 2020 ahead of targeted underground development scheduled for 2021 will include: 3,000m of surface drilling, including infill drilling to continue testing the down-dip extensions close to South Block, and testing for near surface extensions at Target Block; Surface geological mapping to follow up on historic sampling of hanging wall veins; Underground mapping and channel sampling to better understand geological controls on high-grade mineralized zones, and to identify geochemical signatures indicating potential high-grade zones.
In addition, AEX will commence pre-development activities at Nalunaq ahead of camp construction and underground development activities, which will commence in 2021.
Additional reconnaissance work on regional assets, focussed on targets in the Greater Amphibolite Ridge area, Lake 410, Jokum's Shear and Kangerluluk, in preparation for drill testing in 2021. Work will include verifying historic high-grade gold occurrences, mapping the extent of gold occurrences at surface, and collecting samples for gold deportment studies and metallurgical testwork.
Eldur Olafsson, CEO of AEX, commented:
"We are delighted to be moving forward with our work program following the successful fundraise and admission to AIM in July. Working closely with the Greenlandic authorities, we have safely deployed our team in Greenland and are excited to begin work to resume operations at Nalunaq, and progress our significant exploration portfolio, which all have potential for high-grade discoveries, towards drilling and development.
"With our near-term focus on Nalunaq, we are looking forward to deepening our understanding of the Main Vein extensions as well as other potential mineralized zones within Nalunaq Mountain that could offer further gold resources and upside over and above the demonstrated extensions to the Main Vein.
"Through this highly exciting exploration program, we are confident that we can deliver significant upside to investors in what is one of the most underexplored and highly prospective regions in the world. This is the first step in our ambition of becoming a full-cycle gold mining business, with Nalunaq the first project in what we believe could be many from our existing portfolio of gold assets."
The Anglo American unit, De Beers has decided to reduce the price of its diamonds as Covid-19 pandemic has weakened the industry. De Beers and its Russian competitor Alrosa had earlier attempted to defend the value of the gems as the Covid-19 paralysed the industry. With the closure of jewellery stores, cutters and polishers restricted to their homes, the diamond industry has come to a standstill. In the second quarter of 2020, De Beers and Alrosa sold a total of $130m in rough diamonds, which is a huge decline from $2.1bn recorded a year before.
Hudbay Minerals is now the majority owner and operator of the Talbot project in Manitoba, after it exercised its right to buy back a 2% interest in the property from mining junior Rockcliff Metals.
As consideration for the buy-back, Hudbay has made a $725,892 (US$550,000) cash payment to Rockcliff, and it now owns 51% of the project with Rockcliff holding the remaining 49%.
Once Hudbay takes the project into production, Rockcliff will retain a 35% carried interest in the project through life-of-mine, provided that Rockcliff contributes its pro-rata share of pre-construction capital.
The Talbot property is a gold-rich copper asset, hosting indicated mineral resource of 2.2 million tonnes at 2.3% copper, 2.1 g/t gold, 1.8% zinc and 36 g/t silver and an inferred mineral resource of 2.4 million tonnes at 1.1% copper, 1.9 g/t gold, 1.7% zinc and 25.8 g/t silver.
Rockcliff, a major landholder in the Flin Flon-Snow Lake greenstone belt of central Manitoba, has been developing the Talbot deposit over the past six years.
Compared to 30 mines that have gone into production in the area, Talbot holds the fourth-largest initial resource prior to production, after the past-producing Flin Flon mine and the Lalor and 777 mines.
Shares of Hudbay Minerals were down 1.8% by 1:20 p.m. EDT on the TSX, giving the Toronto-based miner a market capitalization of $1.37 billion.
Meanwhile, Rockcliff Metals’ stock plunged 12.5%, capping the company’s value at $32.27 million.
The junior explorer said it would issue up to 19.25 million shares at C$0.65 each
The company intends to use the proceeds for drilling and other technical studies on the Berenguela Silver-Copper project in Peru, and the Challacollo and Cachinal Silver-Gold projects in Chile
Aftermath Silver Ltd (CVE:AAG) (OTCQB:AAGFF) is poised to bring in C$12.5 million via a private placing, with resource investor and gold bull Eric Sprott investing over C$5.3 million.
In a brief statement, the junior explorer said it would issue up to 19.25 million shares at C$0.65 each.
"The company intends to use the net proceeds for drilling and other technical studies on the Berenguela Silver-Copper project in Peru, and the Challacollo and Cachinal Silver-Gold projects in Chile, and for general working capital purposes," the company said.
Sprott has agreed to invest C$5,351,022 in the private placement, the firm added, buying over 8.2 million shares.
Assuming the placing is fully subscribed, this investment would mean Sprott would hold around 19.9% of Aftermath's shares on closing.
At the end of July, Aftermath revealed it had inked a binding letter of intent with SSR Mining to buy the Berenguela silver-copper project in Puno, Peru.
It will buy the Peruvian holding company Sociedad Minera Berenguela SA for nearly US$13 million in staged cash payments, an investment in Aftermath shares and net smelter return royalties.
Aftermath said the Berenguela silver–copper project is an epithermal polymetallic carbonate-replacement deposit with a total tenement package of 6,594 hectares.
Gold was worth about US$1,950 an ounce on the spot market at the time of writing.
Analysts have tipped markets bracing for more volatility and IG analyst Joshua Mahony pointed out "one of the themes of this crisis has been one of uncertainty".
US-China tensions continue to simmer, while the oil price has soared to a five-month high above $43 a barrel as Hurricane Laura threatens output.
Copper also gained on potential supply disruptions, with Marex Spectron's Anna Stablum noting Freeport Indonesia had met with workers to discuss demands following a blockage to the Grasberg copper and gold mine, while Codelco's Chuquicamata in Chile was suspended due to heavy rains.
Freeport (NYSE: FCX) closed up 3.8% in New York, where the S&P 500 hit another record high.
The red metal closed up 1% on the London Metal Exchange to $6,615 per tonne.
Northern Dynasty Minerals (TSX: NDM) regained much of the ground lost this week, having hosed down permitting concerns regarding its Pebble project in Alaska on Monday.
It closed up 51.9% yesterday to $1.17, returning to Monday's levels but well down from Friday's $1.91 and its peak of $3.28 last month.
Finally, Guyana Goldfields (TSX: GUY) is about to delist, after announcing this week China's Zijin Mining had completed its acquisition of the company, which recently mothballed its troubled, flagship mine.
The Democratic Republic of the Congo (DRC) has given mining companies an ‘indefinite waiver’ to an export ban on cobalt hydroxide and carbonate.
The latest move comes after a meeting with the country’s biggest miners in the DRC’s capital city Kinshasa, Reuters reported.
On 22 August, concentrates of 3Ts (tin, tungsten and tantalum), have also been granted an indefinite waiver by the DRC’s mines ministry.
An export ban waiver on copper concentrate was also announced by the ministry.
However, the duration of this waiver is yet to be determined as companies are expected to submit their proposals on the plan a week from now.
Congo is the world’s largest producer of cobalt and Africa’s biggest copper producer. It banned exports of copper and cobalt concentrates in 2013 to encourage miners to process the ore in the country itself.
The latest decision by the government comes as a relief to cobalt, copper and tin miners in Congo, as well as Zambian smelters and refiners.
Reuters cited the ministry as stating: “After a long debate, the mines minister Professor Willy Kitobo Samsoni decided to grant an indefinite waiver for cobalt hydroxides and carbonates, the tin concentrates of Alphamin, and concentrates of 3Ts.”
Alphamin operates a tin mine in the Congo’s North Kivu province.
In January, state-owned firm China Nonferrous Metal Mining (CNMC) launched the Congo’s first large-scale smelter, the Lualaba Copper Smelter (LCS), which is 45km from the Kamoa-Kakula project in the DRC.
The government joint venture (JV) is capable of processing 400,000tpa of copper concentrate and producing 120,000tpa of copper blister.
However, LCS cannot process all of the Congo’s copper production, even at full capacity.
According to the central bank, the Congo produced 765,000t of copper concentrate in the first half of this year alone, marking a 13.4% increase year-on-year (YoY).
In September 2019, the Indonesian Government intended to bring forward the ban on nickel exports from 2022 to January 2020, enabling higher exports of nickel from the Philippines to China.
https://www.mining-technology.com/news/miners-get-relief-congo-makes-exceptions-ban-cobalt-export/
Hydrogen could dominate the future of the world’s transportation. By passing hydrogen and oxygen through a fuel cell, heat and electricity is produced, and the clean, efficient process has generated a lot of attention within the transport sector in recent years. Figures from Global Market Insights suggest that the hydrogen generation market alone could be worth $160bn by 2026, boasting a combined annual growth rate of more than 6%.
While much of this interest is around private electric vehicles or public transport, the mining industry could be set to gain from improvements in hydrogen-powered technology. A 2020 report from Deloitte described many hydrogen fuel cells in the mining industry as at the “prototype” stage, with research and development leading to radical new technologies, with none more famous than Anglo American’s 290-ton hydrogen-powered mining truck .
Yet there is significant investment in hydrogen-powered mining vehicles beyond this, literally, massive example, with international financial agreements in new technology projects in Chile and China painting a very positive outlook for the future of hydrogen fuel cells in mining.
Chile pursues “dual fuel” approach
While Anglo American has made an ambitious move to power its gargantuan truck with hydrogen alone, a Chilean project is targeting a more reliable power system. Alta Ley, a spin-out of governmental economic development organisation CORFO, has partnered with Austrian technology firm Alset to develop what it calls a “dual fuel” system, where hydrogen and diesel are both used to power existing combustion engines.
This system could be a relatively straightforward transition, with no need for new engines to be constructed, and a role remaining for traditional diesel fuels to play. Corfo first announced the project in 2018, and aims to produce a functional mining truck prototype by 2021, the three-year turnaround epitomising the ease with which the developers hope mining companies can transition to the new power source.
The hydrogen-powered trucks also aim to deliver a number of the same environmental benefits as Anglo American’s vehicle, with the reduction in reliance on diesel fuel, however partial, generating significant environmental advantages. Alset predicts that a fuel mix of 70% hydrogen could cut carbon dioxide emissions by around 2,260 tons per year, and noted that hydrogen can be locally produced, divorcing its supply from the geopolitically tense and complex supply of oil around the world.
Despite this potential, it remains to be seen if hydrogen-powered trucks can be truly game-changing for Chile, considering the country’s vast mining infrastructure. In 2019, Chile produced around 5.6 million metric tons of copper, the most in the world, and the country’s greenhouse gas emissions from copper mining alone have increased by around 40% between 2010 and 2018, highlighting the widespread and historically polluting nature of the Chilean copper industry.
China joins the 200-ton hydrogen vehicle race
Not to be outdone by Anglo American and CORFO, state-owned Chinese firm the Weichai Group has partnered with the country’s National Energy Group to deliver its own 200-ton hydrogen truck. The vehicle, which was announced last December, uses a control system developed by CRRC Yongji Electric, which specialises in the development of rail infrastructure and has already worked on a 240-ton electric truck, albeit one not designed for mining work.
The new truck design offers significant improvements in operational efficiency, with such a vehicle saving, on average, 20 tons of fuel per day, equivalent to over 21,000 litres of diesel. This could cut carbon dioxide emissions of each vehicle by around 57 tons per day, delivering significant environmental approvals.
The project also has support from actors across Chinese energy. In addition to government support inherent in the Weichai Group, a report from the International Renewable Energy Agency (IRENA) found that the Ministry of Science and Technology had provided research and development funding for two separate projects aiming to further the country’s research into fuel cell technologies.
However, the same IRENA report found that China may be an unsuitable environment for large-scale hydrogen fuel cell development due to a perceived “competition with growing national energy demand”. Indeed, a 2019 BP report found that China’s average annual energy consumption is set to increase by 1.1% year-on-year, and will account for 22% of the world’s total energy consumption by 2040. While China has invested dramatically in its own energy production, it will only account for 18% of global energy generation in 2040, creating an energy deficiency that could see new energy projects, such as large-scale hydrogen-powered mining vehicles, shelved in favour of policies and programmes to address this deficit.
Mitsui’s $25m hydrogen investment
Many of these new technological developments would be impossible without significant financial support, and Japanese trading giant Mitsui has staked a claim in the hydrogen-powered mining sector. The firm has invested $25m into FirstElement Fuel (FEF), the largest developer of hydrogen fuel stations in California, and the agreement brings together one of the sector’s brightest startups and most well-established mining financiers.
The deal follows a year of collaboration between the companies, and is Mitsui’s latest move in the hydrogen industry. The company has participated in the world’s first international hydrogen supply chain demonstration project, which will see 210 tons of hydrogen supplied from a gas liquefaction plant in Brunei, enough to power 40,000 vehicles. Mitsui has also made investments into fuel cells, power storage, transportation, and backup power solutions in the hydrogen sector, as it aims to deliver not just technological innovation, but a robust supply chain for the future of the industry.
Yet it is unclear whether this investment will see a direct impact on the company’s mining portfolio, and mining in general. Mitsui energy business chief operating officer Masaharu Okubo told the Hydrogen Council last year that the FEF deal will enable the investor to “gain access to one of the most advanced markets of hydrogen mobility, and take a leading role in an initiative to reduce carbon emissions in the mobility sector.” These are important developments, but ones that do not necessarily lead to the kind of tangible changes in mining operations and equipment backed by Anglo American and CORFO.
Miners unite on hydrogen innovation
Collaboration is often a hallmark of new innovations in the mining sector, and hydrogen power is no different. Earlier this year, Fortescue, Hatch, BHP, and Anglo American formed a consortium to investigate the use of hydrogen to decarbonise their operations through ‘green hydrogen’, which is produced through the same electrolytic processes as other hydrogen, albeit powered by renewable power sources.
Much like Mitsui’s holistic investment, this consortium will focus on delivering a sustainable and financially viable supply chain for the hydrogen sector, and will contribute to research and development and the deployment of green hydrogen pilot studies. While the group has not announced plans for mining vehicles in particular, with the work that Fortescue, BHP, and especially Anglo American do in mining and new fuel technologies, there is hope that this cross-company collective will be able to deliver results for the nascent technology.
As an industry – including miners, OEMs and attachment producers, we need to move things forward. Mining companies are typically risk-averse and do not like to be first movers. Steel and casting companies more often than not measure their performance on tonnes sold. Boilermakers like to weld. And OEMs often appear to focus on machine and technology development, over ‘the bit that moves the dirt’ (an essential function of their machines!). This presents a question: can we do better?
If we really focus on what the goal / purpose of the equipment is, can we offer better solutions as an industry? In other mobile equipment attachments – most notably dump bodies – we have seen significant advances in weight reduction and increases in payload, but why has this not been effectively translated in bucket design?
On many mine sites, we are still building and repairing using chocky blocks, heel blocks, a mixture of wear bars and wear liners on top of other wear blocks and wear liners. Wear parts to stop the wear parts wearing out. There are thousands of instances of this – use of bi-metals, chocky blocks, wear buttons, manual hard facing, etc. All costly, all time consuming to install, all adding weight to a product that is to be suspended off the front of an excavator, and for which every kilo of mass we add to the bucket, we should be removing a kilo of usable payload! And that is before we get into what we are doing to the base structural materials of the bucket with all that heat input.
Can we think a different way?
In the 1970s, gas-guzzling, full-size cars from the big American automakers ruled the world – with examples such as the Ford LTD clocking in at just 8.5 miles per gallon! But in recent years Tesla has outstripped the value of all these companies using new technology, with the development of lightweight, electric vehicles that are desirable enough to be sold at a premium.
In the lifting industry, technological advances in materials and design over the last 90 years have seen us go from steam cranes with 12t payloads and a 3.5m hoist to telescopic mobile cranes with 100x this payload – 1,200t at a reach of up to 188m!
Closer to home in mining, as mentioned, significant advances have been made by many in dump body design, with higher strength, higher hardness materials enabling structural and wear components to be combined, and enabling new shapes to be used, reducing welds and high-stress areas. Here lightweight aftermarket options can yield up to a 10% improvement in the available payload.
But the potential gains can be even bigger in buckets than bodies. And as there are fewer excavators in the system than dump trucks, when we can get the productivity of an excavator up it can make a bigger difference to the overall operational efficiency of the mine then upgrading a single body. The full lifecycle should also be considered – the cost of maintenance, refurbishment and repair versus productivity/tonnes moved.
What are we trying to achieve?
In mining, there are four major considerations:
• Safety
• Efficiency
• Environment
• Cost
However, ultimately in a truck and shovel operation, the goal is to move the most tonnes in the safest, fastest means, and for the lowest cost per tonne.
Bucket design constraints
As a non-OEM producer, we need to design and operate within the Machine Design Constraints. That being the suspended load limits (the maximum allowable weight the machine can lift – a combination of the bucket and payload weight), the Tip to Pin radius (which is specified to both ensure sufficient breakout force, but also prevent contact between the bucket and the stick), the Bucket to Machine Connections (pin arrangement), and a maximum bucket width.
The design may also be constrained by the Ground Engaging Tool (GET) design and selection – particularly with the use of Cast Lips which pre-fix the width of the bucket to the width of the casting. Plate lips offer some additional flexibility with lip width and the spacing of GET – but also come with additional manufacturing costs.
We also need to think about the rock. When designing for a specific application we need to understand the hardness profile of the rock, which comes from the mineral composition. We need to understand the shape of the rock and the sharpness of particles. The density of the rock is critical to right-size the bucket, and the material fragmentation size is also important in this aspect to understand fill factors.
What is available to us now?
As indicated, times are changing, and we need to change with it. We have a suite of new tools and materials at our fingertips and we need to utilize these / take steps away from the old way of building a structure from structural materials in the same shape as we have always made it, and then covering it with wear-resistant materials.
Materials
• New stronger, harder, tougher advanced steels, offering the capability to combine wear and structural elements.
• New composites.
• Castings in new shapes and in new materials.
Joining Technologies
• Welding
• Bolting
• Adhesives
Design and Analysis Tools
• Advanced CAD/CAM
• Finite Element and Discrete Element Modelling
There are several who have innovative designs and thinking, but there is not widespread take-up of these from the industry, and there are still many who are happy to sell tonnes of steel rather than to sell the opportunity for increased tonnes moved.
To be followed by Part 2, detailing what G&G has done to meet these needs with our XMOR high productivity bucket offering.
https://www.mining-technology.com/sponsored/moving-rocks-not-steel-part-1/
Aug 24 (Reuters) - London Metal Exchange's copper futures rebounded on Monday as inventories tracked by the exchange fell to their lowest in 13 years, while a weaker U.S. dollar also lent support.
Copper stockpiles in LME-approved warehouses hit their lowest since August 2007 at 103,475 tonnes, latest exchange data showed, pushing the premium of cash LME over the three-month contract to a one-month high of $21.50 a tonne.
Three-month copper on the London Metal Exchange rose 0.5% to $6,523 a tonne by 0250 GMT, after posting small gains in the previous two weeks.
A weak U.S. dollar also made greenback-priced LME copper more attractive to buyers holding other currencies.
The most-traded October copper contract on the Shanghai Futures Exchange fell 1.3% to 51,310 yuan ($7,416.99) a tonne.
FUNDAMENTALS
* China's July aluminium imports leapt nearly sevenfold year-on-year to their second-highest level on record, as a rare price phenomenon saw the world's top exporter of the metal turn net importer for the first time since 2009.
* The global nickel market surplus narrowed to 9,700 tonnes in June, compared with a surplus of 12,100 tonnes in May, data from the International Nickel Study Group showed.
* LME nickel rose 0.8% to $14,805 a tonne while ShFE nickel jumped 0.9% to 116,720 yuan a tonne. LME aluminium advanced 0.6% to $1,775 a tonne and Shanghai aluminium fell 0.8% to 14,700 yuan a tonne.
Rio Tinto has spared its chief executive and other senior executives from losing their jobs over the destruction of ancient sites in Western Australia and instead cut their bonuses.
Rio sparked international outrage in May when it blew up the 46,000-year-old Juukan Gorge rock shelters on Puutu Kunti Kurrama and Pinikura (PKKP) country in the Pilbara region.
The company had secured consent under WA's Aboriginal Heritage Act but has since apologised to the traditional owners, admitting it had overlooked significant new information about the cultural significance of the sites.
Evidence given to a Senate inquiry revealed the blast allowed Rio to extract an additional $US135 million ($A188 million) worth of high-grade iron ore.
Traditional owners were not told one of the world's biggest iron ore miners had examined three other options for expanding its Brockman 4 mine, which did not involve damaging the rock shelters.
A Rio board review, the findings of which were published on Monday, has determined there was "no single root cause or error that directly resulted in the destruction of the rock shelters".
"It was the result of a series of decisions, actions and omissions over an extended period of time," the company said.
Chief executive Jean-Sebastien Jacques will be penalised almost $A5 million in 2020, including the loss of a 1.7 million pounds ($A3.1 million) short-term bonus and a reduction in his long-term incentive plan.
Mr Jacques' total remuneration in 2019 was 5.79 million pounds ($A10.58 million), including fixed pay and bonuses.
Perth-based iron ore chief executive Chris Salisbury and corporate relations executive Simon Niven will also lose their short-term bonuses.
Rio said it would provide more details on the cuts when its 2020 remuneration report is released.
The Australasian Centre for Corporate Responsibility labelled the response "highly disappointing" and renewed calls for Mr Jacques and other executives to depart.
"This is an appalling indictment of how Rio Tinto truly values cultural heritage," strategy lead James Fitzgerald said in a statement.
"Tens of thousands of years of cultural significance get blown up and all that goes to show for it is $A7 million of lost remuneration (for all three executives)."
The PKKP are yet to respond to the Rio board review but spokesman Burchall Hayes earlier this month said traditional owners were deeply hurt and felt their heritage had been belittled.
"In particular, we regret the lack of value being attached to the land we had entrusted to them, beyond short term financial gains," he said.
Premier Mark McGowan said he hopes a looming overhaul of WA's heritage laws will help to resolve issues between land users and traditional owners.
Federal MPs are expected to visit PKKP country next month as the parliamentary inquiry continues.
Further evidence will be heard via conference call on Friday, with noted Indigenous academic Marcia Langton among the witnesses.
A transition package is on the cards for Southland, as it deals with the looming closure of the New Zealand Aluminium Smelter.
Gore district mayor Tracy Hicks believes good progress was made on Monday around plans to keep the Tiwai Point smelter open for another three to five years.
Southland leaders, led by Hicks, met with Finance Minister Grant Robertson and Energy Minister Megan Woods in Invercargill on Monday to discuss options for keeping the smelter open until the region has had time to develop alternative industries.
“It was a constructive meeting,” Hicks said. The “essence” of the discussion was how the lifespan of the smelter could be extended.
“Ultimately, we would like to see the smelter stay,” Hicks said, but at this stage leaders were asking for at least five more years.
Robertson told the Regional Leadership Group that the Government, majority New Zealand Aluminium Smelter owner Rio Tinto, and Meridian Energy were in negotiations to create a managed transition.
A just transition package for Southland was also discussed, the group said in a statement.
This would fund projects identified in the Southland Regional Development Strategy to grow alternative industries and create jobs.
Hicks said the smelter’s closure would be a significant issue for Southland voters in the upcoming election.
“It is expected that all political parties will have a clear stance on this and while the timing of the election is not helpful, we have been proactive in taking the opportunity to engage directly with all party leaders to advocate for a managed transition,” he said.
However, Hicks acknowledged that any confirmation or decisions would be unlikely before the election.
This was the second in-person meeting Robertson and Woods had held with Southland leaders in Invercargill since Rio Tinto announced last month that it intended to close the smelter by the end of 2021.
As it is one of the region’s largest employers, 1000 staff are expected to lose their jobs. A further 1600 Southlanders would be indirectly impacted.
At a breakfast with business leaders earlier in the day, Robertson supported the idea of a three- to five-year transition for Southland’s economy – which would clearly be better than an abrupt exit, he said.
Robertson also confirmed that the Government would not be offering subsidies to Rio Tinto but would look for ways to reduce costs associated with the plant.
JAKARTA, Aug 25 (Reuters) - Workers at Indonesia's Grasberg gold and copper mine operated by the local unit of Freeport-McMoRan Inc extended a protest into a second day on Tuesday as they demanded an easing of a coronavirus lockdown
More than 1,000 mine workers had joined the second day of protests and blocked access to the world's second-largest copper mine in the easternmost region of Papua, Yonpis Tabuni, a workers' representative said.
"Our demand is not met yet. Today there is a meeting with the local government and the management," Tabuni said.
Asked whether the protest have disrupted mining operation, PT Freeport Indonesia's spokesman Riza Pratama said on Tuesday "we continue to monitor and conduct negotiations."
The company was working on a new working schedule that adhered to "new normal" protocols, he said a day earlier.
"Hopefully there will be a resolution soon," Pratama said.
Freeport mine workers were asking for the company to allow employee bus services to resume amid travel restrictions implemented to contain coronavirus infections.
Freeport Indonesia said in May it reduced number of workers and restricted travel in and out of the mine due to rising number of coronavirus infection in the area.
Local government data showed as of Monday there were nearly 700 coronavirus infections in the Mimika region, where Grasberg is located.
Operations at Grasberg are currently shifting from open pit to all-underground mining. The mine is expected to produce 110,000 tonnes of ore per day in 2020.
https://finance.yahoo.com/news/protest-freeports-grasberg-mine-indonesia-051054515.html
* Nickel prices hit highest since November 2019
* Cash copper still at a premium to 3-month contract
LONDON, Aug 25 (Reuters) - Copper prices rose on Tuesday supported by historically low inventories in London Metal Exchange registered warehouses and a weaker dollar, but gains were limited because of uncertainty about demand prospects.
Benchmark copper on the London Metal Exchange was up 0.3% to $6,533 a tonne at 1600 GMT. Prices of the metal used widely in the power and construction industries have traded around the $6,500 level since the middle of July.
"Copper is in a situation where the market needs to figure out where the balance is heading in the sense that we have seen extremely strong demand from China," said Julius Baer analyst Carsten Menke. "We also need to know how much of that demand is actually being consumed and how much is restocking."
DOLLAR: A weaker U.S. currency makes dollar-denominated metals cheaper for consumers using other currencies, which could boost demand. It could also increase costs for producers in other currencies that are appreciating against the dollar.
"Dollar weakness is cyclical not structural and it is primarily against the euro," Menke said. "Emerging market currencies are still weak against the dollar and you can't say costs in those metal producing countries will rise."
INVENTORIES: Stocks of copper in LME warehouses have tumbled to 14-year lows at 95,525 tonnes and compare with a number above 250,000 tonnes in May.
Worries about copper supplies on the LME market have since the start of July created a large premium for the cash over the three-month contract . It rose to $25 a tonne in late July and closed at $18 a tonne.
NICKEL: Three-month nickel earlier touched $14,995, the highest since November last year, on worries about supplies for China's stainless steel mills.
"Recently nickel laterite ore prices have been continuously rising amid declining inventories at Chinese ports," ING analysts said in a note.
"Stainless steel margins have also improved recently, which should be supportive for nickel demand."
OTHER METALS: Aluminium was up 0.2% at $1,775 a tonne, zinc gained 1.3% to $2,478, lead rose 0.7% to $1,994, tin climbed 0.5% to $17,390 and nickel advanced 0.3% to $14,975.
Nickel is used in stainless steel and in electric vehicle batteries
A drop in nickel output from major mining projects in the Philippines has helped cut Chinese nickel inventories down to two year lows and, in the process, helped to drive prices up to nine month highs.
Nickel as a metal has struggled to gain traction in the market this summer as uncertainties around stainless steel demand from China have thus far kept a lid on the price.
Even a surprising intervention from Tesla chief Elon Musk last month failed to light a fire under the price.
But if the Chinese are growing short of it, that could make all the difference in the near term. The price moved up to US$6.74 per pound this week, a long way above the lows hit in March of around US$5.00.
Global mined nickel fell 7.7% in June compared to the amount mined in the corresponding month last year, according to the International Nickel Study Group, which monitors the markets.
That production rate still marks a significant improvement from the sharp comparative falls witnessed in the market in April and May. Nevertheless, year-to-date production has fallen by more than 10% to 1.1 million tonnes as coronavirus shut-downs have come into effect.
Production from the Philippines is down by 28%, production from Canada is down by 19%, and production from Indonesia by 11%.
And, at the same time, as Chinese stimulus money continues to filter through into new infrastructure spending, demand could rise significantly. It’s that potential tightening of the market that’s beginning to move the price, underpinned by longer-term hopes for demand such as that highlighted by Mr Musk.
The lithium ion batteries that go into Tesla cars are actually primarily composed of nickel, to the point that each Model 3 contains around 30 kilogrammes of the metal. It in the nickel that the energy is actually stored, and the more nickel a battery contains, the higher the energy density of the battery.
Musk is keen to see nickel mined in a sustainable and ethical way, and has allowed something of a spotlight to be shone on waste-dumping techniques employed in Indonesia and elsewhere.
It also allows newer entrants into the market an opportunity to shine. Shares in Horizonte Minerals, for example, have strengthened in recent weeks as the company has moved towards financing a new mine in Brazil. Other companies that could also benefit from significant re-ratings on the back of a renewed strength of the nickel price include like Amur Minerals, Canada Nickel Corporation, ALX Resources, Midland Exploration, Talon Metals and Palladium One Mining.
Majors like Rio Tinto, Glencore, Vale and Norilsk are already well ensconced in this space, and have recently been showing a renewed appetite to do deals with smaller companies.
Glencore owns 73.1%, First Quantum Minerals 16.9% and ZCCM-IH, Zambia's mining investment arm, 10% of the operation, which was shuttered briefly earlier this year.
Mines minister Richard Musukwa told Reuters ZCCM-IH was seeking a larger stake "with a view to holding a controlling stake in Mopani".
In April, Glencore put Mopani on care and maintenance, citing a rapid decline in the copper price and COVID-19 disruptions.
The government then threatened to revoke its mining licences, with Mopani saying it would resume operations for 90 days then intended to return to care and maintenance.
The company had said it would appeal the mines ministry's July decision to reject its proposal to suspend the operations, and Musukwa said the government was working closely with labour unions and suppliers to ensure the operations ran smoothly during negotiations, Reuters reported.
Glencore told the wire service discussions with ZCCM-IH and other shareholders were progressing.
Glencore CEO Ivan Glasenberg had confirmed Mopani was operating but the company believed care and maintenance was the best option, in an earnings conference call earlier this month.
"However, as I say, we are in discussions with the government for certain issues that are taking place where we may find a solution, but we'll wait and see," he said at the time.
Glencore closed down 2.2% in London to 168.04p, capitalizing it at £22.39 billion (US$29.4 billion).
The notable mining firm Rio Tinto has issued an apology after blowing up the 46,000-year-old Juukan Gorge caves in Western Australia as part of an expanded iron ore project, BBC reported earlier today.
The aboriginal caves dated back to the last ice age and were located in the Pilbara region.
An article published by The Guardian claimed the detonation obliterated at least two ancient rock shelters.
In 2013, the mining firm was given approval for the iron ore project, but then ancient artifacts were discovered at the site, including a sharpened bone and grinding stones.
BBC reported that “a belt made from human hair, analysis of which showed a direct link going back 4,000 years between” the Puutu Kunti Kurrama and Pinikura People (PKKP) “and the prehistoric cave-dwellers” was also found at the Juukan Gorge.
According to the BBC article, the firm had an agreement with authorities to destroy the caverns.
The piece by The Guardian said Rio Tinto previously asserted that PKKP representatives did not make it evident that the site was to be preserved. However, Burchell Hayes, a PKKP spokesman, denied the claims, alleging that the site’s importance was told to the mining firm “as recently as March.”
Hayes further stated that they only learned of the firm’s explosive intentions on May 15.
Per the BBC, Chris Salisbury, the iron ore chief executive of Rio Tinto, said the firm was “sorry” for causing distress, particularly to the PKKP. They were the “traditional” site owners.
“We will continue to work with the PKKP to learn from what has taken place and strengthen our partnership. As a matter of urgency, we are reviewing the plans of all other sites in the Juukan Gorge area.”
PKKP representative John Ashburton called the destruction a “devastating blow.”
He added that there are very few aboriginal sites as old as the Juukan Gorge caves, making it a vital part of history.
“Our people are deeply troubled and saddened by the destruction of these rock shelters and are grieving the loss of connection to our ancestors as well as our land,” said Ashburton.
The mining firm has been in search of other interests in Australia, aside from the ore, including diamonds, uranium, and more.
Blowing up the caves has been called a “genuine mistake” by Ken Wyatt, the Australian Minister for Indigenous Affairs.
Wyatt is aboriginal himself, and while he believed the destruction to be unimaginable, he also seemed to think it was a failure of state laws that allowed the explosive decision to occur.
The Guardian stated that the state government is reportedly considering a bill to help protect the cultural heritage of the aboriginal people, but the ongoing coronavirus pandemic has delayed the process.
SHANGHAI, Aug 27 (SMM) — SHFE nonferrous metals closed mixed on Thursday August 27, as the supply of nickle shrank and inventories of aluminium declined.
Sentiment was helped by positive news on the coronavirus vaccine front and solid US economic data. Moderna said its coronavirus vaccine showed promising results in a small trial of patients aged 56 and older. The company’s stock jumped 6% on the news. The US durable goods orders jumped by 11.2% in July, easily topping a 4.3% estimate from Refinitiv.
Tin, the best performer, rose 1.66%, nickel advanced 0.69% and copper climbed 0.37%, while zinc edged down 0.13%, aluminium weakened 0.03% and lead shed 1.23%.
SMM data showed that stocks of aluminium billet across the five major consumption areas – Foshan, Wuxi, Huzhou, Changzhou and Nanchang – in China shrank 3,800 mt from a week ago to 56,200 mt as of Thursday August 27.
Primary aluminium ingot inventories in China declined moderately this week, showed SMM data.
The ferrous complex closed mixed. Hot-rolled coil rose 0.54%, rebar advanced 0.24%, while iron ore shed 0.43%.
Copper: The most-traded SHFE 2010 copper contract rose to an intraday high of 51,660 yuan/mt after the opening bell, and closed 0.37% higher at 51,490 yuan/mt today. The Trump administration on Wednesday added 24 Chinese companies to a government list that bans them from buying American products, citing their role in helping the Chinese military construct artificial islands in the disputed South China Sea. Global investors worried about the trade relations between the two countries, and market risk preference was suppressed, which curbed copper prices. However, LME inventories continued to decline, and stood below 100,000 mt, which was at a historical low level, still supporting copper prices to some extent.
Aluminium: The most-liquid SHFE 2010 aluminium contract surged to an intraday high of 14,530 yuan/mt and ended 0.03% lower at 14,555 yuan/mt today. Open interest increased 2,709 lots to 113,000 lots as investors added their short positions. The basis and the flow of funds will come under scrutiny.
Zinc: The most-active SHFE 2010 zinc contract closed down 0.13% at 19,850 yuan/mt today. Open interest fell 470 lots to 105,000 lots. The contract is expected to fluctuate tonight.
Nickel: The most-traded SHFE 2011 nickel contract finished the day 0.69% higher at 119,430 yuan/mt. Open interest fell 4,189 lots to 146,000 lots. Whether the contract could move above 120,000 yuan/mt will be monitored tonight.
Lead: The most-traded SHFE 2010 lead contract slid to an intraday low of 15,605 yuan/mt, before regaining some ground to finish the day 1.23% lower at 15,640 yuan/mt. The contract fell for six consecutive days. Whether the contract could remain above 15,600 yuan/mt will be monitored tonight.
Tin: The most-liquid SHFE 2011 tin contract rose to an intraday high of 143,950 yuan/mt, before giving some gains to end 1.66% higher at 143,830 yuan/mt today. Open interest increased 1,162 lots to 22,232 lots. Pressure above is expected to around 144,500 yuan/mt.
WestStar Industrial’s engineering contractor business Alltype Engineering has won a contract from Fortescue Metals Group (FMG) for process piping fabrication works at the Christmas Creek iron ore mine in Western Australia (WA).
The Christmas Creek iron ore operations are located in Pilbara, WA.
Operations at Christmas Creek are combined with activities at Cloudbreak. Both deposits are situated 110km north of Newman.
Alltype will provide process piping fabrication works for FMG’s wet high-intensity magnetic separation (WHIMS) project at Christmas Creek.
Alltype’s multiple works at FMG are valued at $7m in contracts relating to mining, oil and gas, power generation, water, waste processing and transport infrastructure projects this financial year.
Alltype Engineering managing director Kelvin Andrijich said: “Recent supply chain disruption to overseas and interstate fabrication options has increased the market opportunity of the business, resulting in significantly increased levels of tendering for committed major project works, new clients domestically and internationally, with notable consumption of industry capacity.
“Alltype has been delivering accelerated fabricated steel, plate and piping products and equipment to enable major resource and infrastructure projects to maintain progress and momentum on site.
“Once this alternative supply chain process was proven successful, it has resulted in multiple repeat orders and future supply opportunities. Our site teams continue to assist with critical infrastructure works on both planned and reactive basis to our client’s needs.”
Last November, WestStar Industrial executed a share sale agreement to purchase 100% of Alltype Engineering.
In November 2018, mining services provider Thiess received a contract to install autonomous haulage system (AHS) technology at Christmas Creek.
https://www.mining-technology.com/news/weststar-unit-provide-fabrication-fmg-mine/
Amur Minerals Corporation, which is focused on nickel-copper sulphide mineral exploration and resource development in Russia’s Far East, has announced that it will invest $4.67 million in Nathan River Resources (NRR) which owns the Roper Bar iron ore project located in Northern Australia.
The Roper Bar project allows for the rapid restart of mining and shipping operations as substantial stockpiles of high-quality iron ore are currently ready for loading and transport to the Chinese market. The project has 194,000 mt of iron ore stockpiles ready to be shipped starting from October. Meanwhile, the long-term offtake agreement with international commodities producer and trader Glencore provides Amur with a reliable partner who has substantial imports.
“Iron ore has been performing very well with demand out of China expected to remain strong as continued stimulus measures are taken by the Chinese and other governments,” Amur said in its statement.
The project has reserves of 446 million mt of iron ore with 39.9 percent Fe content and 4.76 million mt of iron ore with 60.1 percent Fe content.
(Yicai Global) Aug. 26 -- Brazilian mining giant Vale put its first iron ore grinding center in China into operation yesterday, The Paper reported.
The base is located at the Shulang Lake Ore Transfer Terminal at Ningbo-Zhoushan Port, China's largest iron ore and crude oil transfer base. It has three production lines with an annual production capacity of three million tons. The plant's first product, GF88, is a new iron ore pellet feed.
Ore grinding is the process by which mechanical equipment reduces ore to a powder. The latest ore grinding equipment used at the base will not produce gangue or waste water as neither fuel nor water is required during production.
Rio de Janiero-based Vale is the world's largest producer of iron ore, pellets and nickel.
Ningbo-Zhoushan Port in southwestern Zhejiang province is the busiest port in the world in terms of cargo tonnage. Last year it had cargo throughput of 1.12 billion tons and container throughput of 27.53 million twenty-foot equivalent units.
The Brazilian state of Minas Gerais has asked a judge to order iron ore miner Vale to pay for economic losses and other damages with respect to the Brumadinho tailings dam disaster that occurred last year.
State authorities and federal prosecutors have sent a joint petition seeking a judge’s order for Vale to freeze R$26.7bn ($4.78bn) in assets for ‘eventual restitution’ to Minas Gerais.
They are also seeking R$28bn ($5.01bn) in collective ‘moral and social’ damages.
Last month, a Brazilian court ordered Vale to pay R$7.9bn ($1.47B) in guarantees for damages from the disaster, which occurred on 25 January 2019 when a dam located near the Córrego do Feijão iron mine collapsed, causing a mudslide to hit the town of Brumadinho.
This incident is considered one of the worst environmental disasters in Brazilian history, with 84 people confirmed dead and around 270 still missing.
The disaster led to the Brazilian Government banning the construction of new upstream mining dams in February 2019. In July of the same year, Vale agreed to pay compensation to the families of the victims.
Since the start of last year, iron ore production in Brazil has suffered due to the disaster, weather-related conditions and the spread of Covid-19 pandemic.
Last year, Brazil’s overall iron ore output was 404.9Mt.
https://www.mining-technology.com/news/minas-gerais-asks-court-freeze-vale-asset/
