Exports empty Canada's canola bins, driving prices to near records

CANOLA;IS MONANTO GMO RAPESEED

By Rod Nickel

© Reuters/Todd Korol A deer feeds in a Western Canadian canola field in full bloom in 2019

WINNIPEG, Manitoba (Reuters) - Canada, the world's biggest canola grower, is running short of the oilseed six months before the next harvest, with strong export demand driving prices to nearly 13-year highs last week.

Supplies of major commodity crops are dwindling worldwide as buyers hoard food supplies during the COVID-19 pandemic. China is loading up on grains and oilseeds that it can feed to animals, raising food inflation and causing some nations to restrict exports of their crops.

Canola, known for its bright yellow flowers, is crushed mainly for oil to make French fries, mayonnaise and salad dressings. Its meal is also fed to livestock like pigs.

To Manitoba farmer Bill Craddock, it seemed like a good decision in autumn to sell all of his canola at high prices, only to see them spike even more this month. Still, Craddock profited off last week's rally by trading small numbers of futures contracts.

"I'm entering my 51st year of trading and the market is as volatile as I ever remember," Craddock said. "To try and make money from it, you have to stand your ground, and be right, or get killed."

The roots of Canada's canola shortage trace back to the autumn, when farmers reaped their smallest harvest in five years. Strong export demand for canola seed and oil then drove a late-summer rally that prompted farmers to sell more crop earlier than usual.

Those early deliveries to commercial handlers have helped Canada export nearly 33% more canola year-to-date over last year, according to government data. Top buyer China more than doubled purchases to 1.2 million tonnes as of December, despite continuing restrictions against Canadian exporters Richardson International and Viterra.

Other exporters can still ship Canadian canola, helping meet China's voracious demand for animal feed as its hog herd recovers from a deadly disease.

With the market soaring, canola importers locked in their purchase prices under terms of their sales agreements last week, fearing even higher prices, said Tony Tryhuk, manager of commodity trading at RBC. That forced Canadian exporters on the other ends of those sales to buy canola futures at high prices to fill them, likely registering big losses in the process, he said.

ICE canola futures retreated late in the week to less than C$700 per tonne, remaining close to levels unseen since the record 2008 commodity boom.

Strong canola oil demand has also spurred Canadian crush plants to process brisk volumes domestically, further straining supplies.

Both crush plants and exporters may already be short canola to fulfil orders, a Canadian exporter said.

Archer-Daniels-Midland Co, Bunge Ltd and Richardson, major crushers, declined to comment. Cargill Inc did not respond.

The canola rally is not necessarily over, Tryhuk said. Bigger than usual futures positions for November delivery indicate that seed exporters and crushers are already worried about the shortage continuing through the next harvest, he said.

Statistics Canada will estimate Canadian crop stockpiles on Friday in a report likely to garner more attention than usual.

With prices so high, Canadian farmers are likely to plant this spring a 6% bigger canola crop, said LeftField Commodity Research analyst Chuck Penner, in a presentation.

(Reporting by Rod Nickel in Winnipeg; Editing by Marguerita Choy)

Carbon capture technology has been around for decades — here's why it hasn't taken off

While trees and other plants can remove some carbon dioxide from the atmosphere, most climate change experts agree we can't plant enough, fast enough, to do the job alone.

Carbon capture technology has been around for decades, and is used to strip carbon out of factory emissions as well as remove carbon that's already in the air.
But it's expensive, and until the cost of releasing carbon into the air rises, there's little economic incentive to use it.

© Provided by CNBC People tend to vegetables growing in a field as emission rises from cooling towers at a coal-fired power station in Tongling, Anhui province, China, on Wednesday, Jan. 16, 2019.

Elon Musk is going to pay $100 million towards a prize to come up with the best carbon capture technology. (Or so he tweets. Details are scarce so far.)

The maverick tech CEO's promise is not particularly notable for its generosity. With a net worth of over $200 billion, $100 million is 0.05% of Musk's wealth.

But still, the richest person in the world's tweet brings attention to an often-overlooked technology that has been around since the 1970s but has mostly been relegated to niche corners of the energy community.

"Mr. Musk's announcement reflects a maturation in the private sector around climate change and investment," Julio Friedmann, a senior research scholar at the Center on Global Energy Policy at Columbia University, tells CNBC via email. "As in the past, Mr. Musk's announcement has shaken up the gumball machine."
Why not just plant more trees?

One popular reaction to Musk's tweet was that he would be better to spend his money planting trees. Trees, like other plants, consume carbon dioxide in the process of photosynthesis and release oxygen. There is an international initiative, 1t.org, which aims to restore and grow one trillion trees by 2030 to mitigate climate change. The trillion trees campaign is run by the World Economic Forum and funded by the Marc R. Benioff Foundation, an eponymous philanthropic effort funded by the billionaire Salesforce CEO.

But even 1t.org knows planting trees is not a silver bullet.

"Addressing climate change will require investment in technologies that help to limit future emissions, such as electric vehicles, and also the drawdown of carbon from the atmosphere. Nature-based solutions can help with both of these, but we will need thousands of solutions in combination," says Tom Crowther, a tenure-track professor of Global Ecosystem Ecology at ETH Zürich and the chief scientific advisor to the United Nation's Trillion Tree Campaign. "There is huge potential for direct carbon capture technology as part of a diverse climate plan," Crowther tells CNBC from Switzerland via email.

So does Musk. In response to one tweet recommending tree-planting, Musk said trees "are part of the solution, but require lots of fresh water & land. We may need something that's ultra-large-scale industrial in 10 to 20 years."

In that vein, here's a look at where carbon capture, utilization and storage or sequestration (CCUS), which is often shortened to "carbon capture," technology stands now and why it has, thus far, not been more broadly deployed.
Carbon capture from factory emissions: Where it stands

There are currently 21 large-scale CCUS commercial projects around the globe where carbon dioxide is taken out of factory emissions, according to the International Energy Agency, a Paris-based intergovernmental energy organization. The first one was set up in 1972.

The earliest CCUS technology was used for enhanced oil recovery, meaning the carbon dioxide is pumped into an oil field to help oil companies retrieve more oil from the ground, Howard Herzog, a senior research engineer at the MIT Energy Initiative and author of the book "Carbon Capture," tells CNBC.

It wasn't until the 1980s that carbon capture technology was studied for climate mitigation efforts, but even then, it was "mainly lone wolves," Herzog says. By the 1990s, "activity really ramped up," he says.

One example in the United States is in Decatur, Ill., where the food processing giant Archer Daniels Midland Company launched a carbon capture and storage project in 2017. It has the capacity to take 1.1 million tons of carbon per year out of the emissions released by a corn processing factory, and stores that carbon a mile and a half underground.

© Provided by CNBC One part of the carbon capture project at Archer Daniels Midland Company in Decatur, Illinois.

For factory carbon-capture, emissions are routed through a vessel with a liquid solvent which essentially absorbs the carbon dioxide. From there, the solvent has to be heated up in a second tower — called a "stripper" or "regenerator" — to remove the CO2, where it's then routed for underground storage. The solvent can then be re-used in the first vessel or tower, Herzog says.

If the storing is done carefully, "you should be okay," Herzog says. "We don't have experience on the scale we want to go to," Herzog says, "but we've demonstrated you could do it correctly."

The U.S. Department of Energy is on the case, "developing models that simulate the flow of stored carbon dioxide, to help understand and predict chemical changes and effects of increased pressure that may occur."

Carbon capture from the air: Where it stands

In terms of reversing global climate change, there's already been too much carbon released into the atmosphere for us not to try and capture carbon and store it, says Klaus Lackner, the director of Center for Negative Carbon Emissions and professor at Arizona State University.

"The question of whether you want to store or not to store [carbon] was a very good question in 1980," Lackner tells CNBC. "But you needed to have this discussion 30, 40 years ago because back then you still had a chance to stop the train before we collide with something."

The concentration of carbon dioxide in the atmosphere is tracked as in parts per million, or PPM. As of December, atmospheric carbon dioxide stands at 414.02 ppm, according to the National Oceanic and Atmospheric Administration.

"We started the industrial revolution with 280 parts per million in the atmosphere," Lackner tells CNBC. "By now we have 415 [ppm], and we are going up 2.5 ppm a year at this moment." The consequences of that rising carbon dioxide in the atmosphere are already dire and will get worse. "The oceans have started to rise, hurricanes have gotten way worse, climate has become more extreme, and this will only get worse over the next decade," Lackner says.

The only choice, Lackner says, is to "draw down" the atmospheric carbon dioxide — or to suffer unknown, devastating consequences.

Capturing carbon from the air, not from a factory smokestack, is called "direct air capture," and there are currently 15 direct air capture plants in Europe, the United States and Canada, according to the IEA. "Carbon removal is expected to play a key role in the transition to a net-zero energy system," the IEA says, but currently it is a very expensive technology.

Direct air capture is "very expensive because the CO2 in the atmosphere is only .04%," Herzog tells CNBC, and the technical process of removing carbon dioxide from a gas gets more expensive the lower the concentration of the carbon dioxide gets. "But it is very seductive. A lot of people jumped on this," he says.

Lackner sees it as a necessity. "In the end, I see CO2 as a waste management problem. We have for two centuries simply dumped the waste from energy production — which is carbon dioxide — in the atmosphere and not thought about it any further, and we are gradually waking up to the fact that that's not acceptable," Lackner says.

The future of carbon capture technology

The technology exists to capture carbon and there is a grave need for climate change to be mitigated. So why isn't it being used everywhere already?

The problem is economics, says Herzog. "It's cheaper to put [carbon dioxide] in the atmosphere. It is cheaper to let it go up the smokestack than put this chemical plant on the back of the smokestack to remove it," Herzog says. "Who is going to pay for that?"

To change that reality, there must be economic costs to releasing carbon dioxide pollution into the atmosphere.

"The best capture technology will reduce these costs, but it will never be zero. Hence, even the best carbon capture technology will be useless if the world is not willing to put a price on carbon," Berend Smit, a Professor of Chemical and Biomolecular Engineering at the Department of Chemical and Biomolecular Engineering, at the University of California, Berkeley, tells CNBC by email. His research focuses on finding the optimal material for carbon capture.

In the meantime, scientists and researchers are working to make current carbon capture technologies better.

"Over the past 10 years, there are a number of innovations and improvements to enable us to save more energy and cost up to 70% less for new carbon capture processes," Paitoon (P.T.) Tontiwachwuthikul, a professor of industrial and process systems engineering at the Canadian Academy of Engineering and a co-founder of the Clean Energy Technologies Research Institute University of Regina, tells CNBC by email. "These include novel solvents (and their mixtures) as well as new process hardware items (e.g. new columns, catalysts, etc.)."

Smit is also working on how to use a kind of sponge "with a strong affinity for carbon dioxide," he says. "Hence if we flow air through the sponge, the CO2 gets removed. Once the material is saturated with CO2, we need to heat it, pure CO2 comes out, which we can then store. The sponge is empty and we can start over again."

© Provided by CNBC An artist's impression of a mechanical tree farm.

Lackner has developed a free-standing device to take carbon dioxide out of the air. "Everybody's a machine out there right now, they are sucking carbon dioxide or pushing carbon dioxide with fans and blowers ... we think that the wind alone is good enough to move the air around and our design aims to just be passively standing in the wind, just like a tree." While the technology has been demonstrated on campus, it's still in its infancy.

Fundamentally, it all comes down to money. "You need regulatory frameworks where basically if you want to dig up carbon, you better show that you put an equal amount away," Lackner says. "If you have a cheaper way by all means do it first. if you don't have a cheaper way, you have no excuse because this one will work."

 USask professor creates pig plotted map for locating wild boars on Google Earth

Duration: 01:59 

Using GPS tracking systems, trail cams, and first-person sightings, Ryan Brook and the Canadian Wild Pig Research Project have developed a virtual wild pig population map.

 

GameStop saga makes

Wall Street an issue for Biden team

Updated Mon., February 1, 2021

WASHINGTON — The drama surrounding the trading in shares of GameStop, AMC Entertainment, Blackberry and other beaten-down companies has suddenly thrust Wall Street near the top of a crowded list of issues that President Joe Biden's regulatory team needs to tackle early in its term.

A number of wealthy institutions on Wall Street bet the stocks of these companies would fall, only to be thwarted by small investors who banded together on social media and sent the prices higher. Many of the small investors trade on online platforms such as Robinhood, which suddenly restricted the buying of shares of GameStop and other companies, sparking outrage from the social media crowd and politicians alike.

Biden's financial regulators — especially the Securities and Exchange Commission — will likely have to address questions about a number of Wall Street practices, such as short-selling and whether the business model of online trading platforms is as investor-friendly as the companies say it is. The airing of complex issues will come in addition to anticipated efforts by regulators at the SEC, the Consumer Financial Protection Bureau and other agencies to overturn Trump-era rules deemed more favourable to the financial industry than to consumers or retail investors.

Biden is naming as the new SEC chairman Gary Gensler, who set a record as a tough regulator heading the Commodity Futures Trading Commission during the financial crisis. The SEC took a deregulatory tilt under chair Jay Clayton, a former Wall Street lawyer appointed by President Donald Trump.

The GameStop saga has drawn expressions of outrage over Wall Street's treatment of the “little guy" from lawmakers from both parties. The populist strain recalls the anger fueling the Occupy Wall Street movement over the big bank bailouts that Congress brought in response to the financial crisis.

The uproar is occurring at a time when the small investor appears to be winning. Some prominent hedge funds are reeling with losses due to the collective efforts of the online community. At least two of them have closed out January's trading with losses of more than 40%, according to reports by The Wall Street Journal and Bloomberg News.

Even so, when Robinhood took the step of preventing investors from buying shares of GameStop and a dozen other companies last week, some in Washington immediately called for action by regulators. Robinhood said it acted to meet regulatory capital requirements. Politicians and critics said Robinhood changed the rules of the road midway through, in favour of Wall Street firms who were still able to trade these shares.

Both the Senate Banking Committee and the House Financial Services Committee plan to hold hearings on the GameStop controversy.

Rep. Brad Sherman, D-Calif., who heads the Financial Services subcommittee on investor protection, entrepreneurship and capital markets, said lawmakers will examine, for example, whether Robinhood may have blocked customers from buying the stocks at the behest of other market players with competing interests — who are also Robinhood clients.

Another issue to be aired is that of short-selling, where firms bet that a company's stock price will drop. Lawmakers could look at the need for fuller disclosure requirements for short sellers, as now prevail in Europe and Britain, Sherman suggested.

“There is a casino. To the extent there’s a casino, it ought to be fair,” he said in a telephone interview. “The capital markets need to be less of a casino and more of a place where people ... can invest in companies that are leading the new economy.”

Also under Washington’s microscope will be the business model of companies like Robinhood. At issue is the common practice in the securities markets of payment for order flow, in which Wall Street trading firms pay companies like Robinhood to send their customers' orders to those firms for execution.

In addition, much as Facebook and other tech giants provide users' personal data to online advertisers, platforms like Robinhood give the trading firms data on stocks its users are buying and selling.

Last year, Robinhood agreed to pay $65 to settle SEC charges of providing misleading or incomplete information on its order-flow payments, its largest revenue source.

The practice of firms like Robinhood lending money to customers to make trades, which can fuel trading frenzies by small investors, also will be scrutinized. Questions also will be raised on whether the SEC's existing rules on market manipulation are sufficient.

Wall Street brokerages, big banks and other financial companies were already expecting the Biden administration to be tougher on them than the Trump regime.

Regulators largely took a hands-off approach to the financial industry under the Trump administration, with some exceptions like Wells Fargo. Fines became a fraction of what they used to be, and rules and regulations designed to curtail abusive practices like payday lending or lending discrimination were repealed or significantly rolled back, to the dismay of consumer advocates.

There were already signs that Biden was planning to do more to look out for consumers. He fired Trump's head of the Consumer Financial Protection Bureau, Kathy Kraninger, and nominated consumer advocate Rohit Chopra to replace her.

Chopra, appointed by Trump to the Federal Trade Commission, was one of two Democrats on the five-member commission. While in the minority, Chopra used his perch to try to push the FTC to be more aggressive in going after bad behaviour , particularly in the technology industry.

"I think his purpose (as CFPB Director) will be two-fold: more deterrence and to make consumers whole,” said Ori Lev, a partner at Mayer Brown and a former official at the CFPB.

“I think the people the president has nominated ... will have a more pro-consumer attitude, and a bit more antagonistic toward Wall Street,” said Sen. Sherrod Brown, D-Ohio, who is set to become chairman of the Senate Banking Committee.

____

Sweet reported from Charlotte

ESG Risks Top the List of Near-Term Concerns for Bank Executives

Yalman Onaran
Updated Mon, February 1, 2021

ESG Risks Top the List of Near-Term Concerns for Bank Executives

(Bloomberg) -- Risks related to climate change and social issues will intensify the most in the next two years, finance executives predicted in a survey, and firms will have to find ways to cope.

Environmental, social and governance issues topped the list of risk managers’ concerns in a Deloitte poll to be released on Monday, followed by cybersecurity and credit matters. More than half of the 57 firms surveyed were banks while the rest were in insurers, asset managers and other financial-services providers.

“For financial firms, it’s harder to adapt to changes in the ESG environment because it’s not only about their own carbon footprint or other impact, they also have to look at their clients’ footprint, social impact,” said J.H. Caldwell, head of the financial services risk advisory group at Deloitte.

Among the first things new U.S. President Joe Biden did was rejoin the Paris climate agreement. Last week, the main banking regulator froze a rule that would require firms to do business with companies such as oil drillers and gun manufacturers that they might avoid because of perceived reputational risk. The largest banks have committed billions of dollars to help racial minorities after nationwide protests last year rekindled awareness of systemic oppression.

Looking at the potential impact of regulatory and supervisory changes in the next two years, risk managers predicted cybersecurity rules are most concerning, with ESG coming in fourth. That probably indicates regulators are closer to coming up with stronger rules on cybersecurity than on environmental issues, especially in the U.S., said Caldwell.

U.K. and France supervisors are already including climate-change scenarios in their big-bank stress tests this year. The European Banking Authority is working on a dedicated climate-related test. The U.S. Federal Reserve has just formed a committee to supervise banks on climate matters.

A global financial crisis and further pandemics could emerge as macro trends affecting the industry in the next two years, risk managers also predicted in Deloitte’s survey, which was conducted between March and September last year. Credit-quality deterioration followed those two trends closely.

“Especially in the first half of last year, there was a lot of uncertainty about the economy, which still lingers somewhat,” said Caldwell. “And the pandemic has made people realize we might get other pandemics in the future.”

©2021 Bloomberg L.P.

Originally published Mon, February 1, 2021

Tesla, Charles Schwab — Stocks NYSRTS, One Of US' 10 Largest Pension Funds, Purchased In Q4

Shivdeep Dhaliwal
Updated Mon, February 1, 2021


The New York State Teachers’ Retirement System, one of the largest public pension funds in the United States, has piled on shares of Tesla Inc (NASDAQ: TSLA) and Charles Schwab Corporation (NYSE: SCHW), according to filings made with the U.S. Securities and Exchange Commission.

What Happened: The pension fund added 999,948 shares of the Elon Musk-led company in the fourth quarter, while it did not own any at the end of the third quarter.

The fund added 382,987 Schwab shares to bring its holdings up to approx. 1.82 million shares.


At the same time, the pension fund shed shares of Intel Corporation (NYSE: INTC) and Oracle Corporation (NYSE: ORCL).

The teacher’s pension held almost 5.68 million shares of Intel at the end of the fourth quarter, while it had nearly 6.08 million shares at the end of the preceding quarter, having sold 404,751 shares.

NYSTRS sold 289,217 shares of Oracle between the third and fourth quarters to bring its total holdings to nearly 2.6 million shares.

Why It Matters: Wedbush analyst Dan Ives maintained his ,250 bull case target on Tesla in January, ahead of the company’s fourth-quarter earnings.

See Also: Tesla Reports Record Quarterly Revenue Of .74B, Semi Deliveries Will Begin This Year

Charles Schwab reported Q4 earnings per share of 74 cents, which beat analyst expectations of 71 cents per share.

Schwab and TD Ameritrade merged in a billion all-stock deal in November last year.

Intel, which is facing stiff competition from Advanced Micro Devices Inc (NASDAQ: AMD) and Nvidia Corporation (NASDAQ: NVDA), reported fourth-quarter adjusted EPS of .52 beating a .10 cents estimate.

Price Action: On Friday in the regular session, Tesla shares closed nearly 5% lower at $793.53, Oracle shares closed almost 1.3% lower at $60.43, Intel shares closed almost 1% lower at $55.51, and Charles Schwab shares closed 4.09% lower at $51.54.

THAT'S BULLSHIT

Kroger says it must close two Long Beach stores due to hazard pay ordinance

Suhauna Hussain
Updated Mon, February 1, 2021,

Kroger blamed the pending closure of two Long Beach locations — a Ralphs on Los Coyotes Diagonal and a Food 4 Less store on South Street — on rules requiring extra pay for grocery workers during the coronavirus crisis. (Kroger)

As cities across the state look to require hazard pay for grocery workers, California's grocery industry is pushing back.

Kroger, which owns several supermarket chains, said Monday it would close two stores in Long Beach in response to city rules mandating an extra $4 an hour in “hero pay” for grocery workers during the COVID-19 pandemic. The stores slated for closure are a Ralphs on Los Coyotes Diagonal and a Food 4 Less store on South Street, affecting 200 workers.

“This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city," Kroger said in a statement. “The irreparable harm that will come to employees and local citizens as a direct result of the City of Long Beach’s attempt to pick winners and losers, is deeply unfortunate. We are truly saddened that our associates and customers will ultimately be the real victims of the city council’s actions.”

The announcement comes just as the Los Angeles City Council plans to vote Tuesday on whether to pursue a similar ordinance requiring a $5 an hour boost for workers at grocery stores.

Long Beach has served as a sort of test case for hazard pay, as several cities in California, including San Jose and Oakland, consider boosts for front-line workers as well. Santa Monica's City Council voted last month to require “hero pay” for grocery workers, and the Los Angeles County Board of Supervisors has moved forward with a similar proposal.

Kroger spokeswoman Vanessa Rosales said in an email the approval of hazard pay mandates for grocery workers in other cities could lead to more store closures. Rosales said she couldn't share specifics about how additional pay affected profit margins at the two stores but said both were already "underperforming" even before the Long Beach ordinance went into effect Jan. 19.

The Ohio chain said it has spent $1.3 billion to reward workers and to implement safety measures throughout the pandemic.

"Kroger’s decision is unfortunate for workers, shoppers and the company," Long Beach spokesman Kevin Lee said in a statement. Lee acknowledged that the two stores were "long-struggling" and said the city's workforce arm would assist affected employees in accessing unemployment insurance benefits, emergency healthcare coverage, funding for retraining, skill development and job placement.

The California Grocers Assn., which represents about 6,000 grocery stores across the state, has opposed Long Beach's efforts to boost wages, filing a lawsuit against the city in federal court last month. Last week, U.S. District Judge Dolly M. Gee denied the trade group's request for a temporary restraining order to stop enforcement of the ordinance before a court could hear the case, and set a hearing for Feb. 19 on the association's request for a preliminary injunction to halt the law while the case is pending.

The ordinance, which will last at least 120 days, applies to chain stores with 300 or more workers nationally and with 15 employees per store within the city, that devote 70% or more of its business to retailing food products.

Ronald Fong, president of the California Grocers Assn., has argued the measure is selective, singling out grocery workers for a pay increase even as others — including nurses, EMTs, restaurant workers and public safety officers — work on the front lines. Fong also said the ordinance failed to mandate that the largest grocery retailers, including Target and Walmart, pay the extra $4. Target confirmed that based on its grocery sales, the Long Beach proposal does not include its three stores in the area.

"You are mandating a 30% raise essentially, putting grocers in a position to make some difficult decisions," Fong said. "Every single company is worried about this."

Fong said the association would pursue legal action against the city of Los Angeles and other local governments, should they enact similar rules.

Long Beach Councilwoman Mary Zendejas, who sponsored the Long Beach hazard pay ordinance, said in a statement Monday that she was "incredibly disappointed" to learn Kroger planned to close two Long Beach stores, particularly given that the Food 4 Less store serves low-income residents.

"It is unconscionable that, instead of doing the right thing, Ralphs and Food 4 Less would respond with litigation and retaliation against Long Beach heroes," she said in the statement.

It's "especially jarring," Zendejas said, that Kroger is insisting it cannot afford Long Beach's temporary hazard pay ordinance considering the company's third quarter revenue jumped nearly $2 billion from 2019 to 2020.

Zendejas said she had been encouraged at the onset of the pandemic when grocery stores provided hero pay to employees. Many have since ended these programs, even as the health crisis has gotten worse, she said.

"Grocery workers are going in every single day and risking their life being exposed to the virus," Zendejas said in an interview last week. "Grocery businesses are experiencing a boom in their industry, they are making profits, record profits, on the shoulders of their employees, and they are not willing to share the profits with them."

Neil Saunders, an analyst at GlobalData Retail, said that locations performing well should be able to absorb an extra $4 in pay for its workers, but for weak stores, a company like Kroger could easily point to hazard pay as the "final nail in the coffin." Because the grocery industry operates on thin margins, a significant pay increase is "certainly something that's going to erode profitability," he said.

"Businesses resent being told what they have to pay, and that can easily lead to conflict between politicians who make these rules and the companies who have to pay," Saunders said.

This story originally appeared in Los Angeles Times.
Originally published Mon, February 1, 2021, 7:16 PM

Africa's pandemic-hit mining sector faces exploration challenge

By Tanisha Heiberg and Helen Reid

JOHANNESBURG, Feb 2 - Travel restrictions, supply chain disruptions and risk aversion since the start of the COVID-19 pandemic have slammed the brakes on mining exploration in Africa, jeopardising the minerals supply pipeline.

Inward investment will be a key focus at the annual Investing in African Mining Indaba virtual conference to be held on Tuesday and Wednesday, with companies looking to capitalise on higher metals prices and the transition to green energy.


Without exploration, the continent's rich mineral resources are at risk of being unutilised as older mines become unviable.

Mining companies' exploration budgets for Africa fell 10% to a four-year low in 2020, according to S&P Global Market Intelligence.

"COVID-19 has had an impact on all aspects of the mining value chain, and exploration is no exception," said Alex Khumalo, head of social performance at the Minerals Council, South Africa, an industry trade group.

While Africa did not fare as badly as Latin America, where budgets fell by 21%, the sharp decline was in marked contrast to the 1.5% dip in the United States and Canada.

In many cases companies have been turning more towards their home jurisdictions and what they see as their safe-haven investments, said Chris Galbraith, senior metals and mining analyst at S&P Global.

"With many of these companies based in Canada, the U.S. and Australia, more of their exploration has been focused on domestic exploration ... and oftentimes that has come at the expense of African development," he said.

For junior explorers and miners, raising capital on public markets has been a challenge while the pandemic has made it even more difficult to access private equity capital.

SOUTH AFRICAN GLOOM

South Africa - a leading producer of platinum, palladium, chrome and gold - was the worst-hit African nation, with overall mining exploration budgets at a 17-year low. The Democratic Republic of Congo, Burkina Faso and Ghana also had sharp falls.

"I've seen 20 or 30 projects that have probably collectively cut 200 million to 300 million rand (about $13 million to $20 million) worth of exploration spending this year," said Errol Smart, CEO of Orion Minerals.

Investors have been unable to visit projects during the pandemic while restrictions on borders have delayed equipment deliveries.

"Nobody invests in something unless they can go there and see it, touch it, kick the tyres. They want to visit the site," said Smart.

Orion, which last month said it had discovered further significant copper, zinc and nickel deposits around its flagship Prieska Project in South Africa's Northern Cape province, has been waiting for equipment from Australia to conduct geophysical surveys.

"We still have uncertainty over when they can get to site to be used," said Smart.

With less exploration activity, African mineral resources might not be developed fast enough to replace older mines as they become depleted.

There is hope, however, that COVID-19 vaccination programmes will speed the world's recovery from the pandemic and boost the mining sector. Post-pandemic economic recovery could drive higher metals demand and prices, potentially encouraging increased exploration spending this year, particularly in gold.

Exploration budget increases in Ivory Coast, Guinea and Senegal have indicated continued interest in gold-rich West African countries despite the pandemic.

(Reporting by Tanisha Heiberg and Helen Reid Editing by David Goodman)
Originally published Mon, February 1, 2021

Sudden price surge linked to social media posts helps boost Canadian mining stocks

Updated Mon., February 1, 2021




CALGARY — Shares in some Canadian silver mining companies posted double-digit increases on Monday as the price of the shiny white metal surged to eight-year highs with some crediting promotional discussions on social media sites like Reddit.

Mining company CEOs said they don't expect the price rally over the past few days to last long -- but they're OK with that because prices have been increasing for more than a year due to rising demand and limited new supply.

"It's nice to see this brief rally — I think it's going to be brief because squeezing shorts is not really an investment strategy, it's speculation and I don't see it having much legs," said Brad Cooke, CEO of Vancouver-based Endeavour Silver Corp., whose shares rose almost 21 per cent on Monday.

"The good news is that, if I'm right, silver simply reverts to its long-term trend, which is up."

Michael Steinmann, CEO of Pan American Silver Corp., said commodity price volatility is something silver miners have become accustomed to over the years because the market is much smaller than it is for gold. His Vancouver-based company's shares rose more than 13 per cent on Monday.

Industrial demand for silver is expected to increase as the COVID-19 pandemic wanes and thanks to the its use in solar panels, electric cars and electronic communications, he said.

Demand for silver as a precious metal and hedge against inflation, meanwhile, is also strengthening.

"There's a lot of pressure on the industrial demand at the same time that people are really worried about the loose monetary policies all across the world so there's a lot of investment demand as well. So it's kind of the perfect storm for silver right now," said Steinmann.

Silver rose above US$30 per ounce on Monday morning, the highest level since 2013. The March contract increased US$2.50 or 9.3 per cent to settle at US$29.42 an ounce by day's end.

For comparison, Pan American uses a silver price assumption of about US18.50 an ounce for long-term planning, said Steinmann. It's current all-in sustaining cost per ounce is about US$11.

In trading on the Toronto Stock Exchange on Monday, First Majestic Silver Corp. closed up 23.5 per cent, Silvercorp Metals Inc. was up 25.7 per cent and Fortuna Silver Mines Inc. closed 18.7 per cent higher.

The jump in silver's fortunes follows intense interest over the weekend in the media and on Reddit over whether it will become the next active market in the wake of GameStop’s big move last week, said Colin Cieszynski, chief market strategist for SIA Wealth Management.

Reddit traders banded together for the past week to snap up thousands of shares of GameStop, AMC and other struggling chains, stocks that have been heavily shorted (bets that the stock will fall) by a number of hedge funds, thus causing heavy damage to those funds.

But the rush into silver futures created confusion, with some retail traders on Reddit calling the surge in commodity prices a "false flag.''

"IT'S A TRAP!'' one Redditor warned.

Some accused the hedge funds that were pillaged last week of joining Reddit anonymously to drive them out of GameStop bets and into silver, but only after hedge funds had taken huge positions.

RBC Capital Markets analysts in a report pointed out that silver prices have increased over the past few days with no "normal" reason to justify the action.

"The potential for a sharp move to cause tumult in various markets including options markets should not be discounted, similar to some of the knock-on effects from GameStop," they warned.

"World precious metals markets have developed over millennia which makes this market more robust in our view than a small cap company with deteriorating prospects. (The) gold/silver ratio gives room for silver to run."

-- With a file from The Associated Press

This report by The Canadian Press was first published Feb. 1, 2021.

Companies in this story: (TSX:EDR, TSX:FR, TSX:SVM, TSX:FVI, TSX:PAAS)

Dan Healing, The Canadian Press
Originally published Mon., February 1, 2021, 2:51 p.m.



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Air Canada, Rogers and Suncor part of consortium piloting rapid COVID-19 testing




TORONTO — Canadian space technology and robotics giant MDA will begin offering its workers rapid COVID-19 testing at its Brampton, Ont., headquarters starting Tuesday, the latest company in a consortium of some of the country's biggest firms testing workplace screening.

The pilot is being run by the University of Toronto's Creative Destruction Lab, which has partnered with 12 companies including some of Canada's top airlines, banks and sports teams to experiment with antigen tests that take about 15 minutes to deliver results.

Those behind the project believe it could give Canada's corporate world a road map to quelling the spread of COVID-19 in workplaces that have had to close or have struggled to contain outbreaks.

"It's a tool to be able to reopen parts of the economy and not have these broad range closures," Holly Johnson, MDA's director of business operations, said in an interview.

"The advantage of this kind of screening – if you can roll it out at scale and get mass screening across a wide range of workplaces and facilities – is that you can imagine wide areas of the economy being able to be opened up again."

The company's Brampton facility – which normally has a complement of about 450 employees – currently has between 85 to 100 workers on-site daily. So far, about 60 of those workers have signed up for the testing, she said.

The rapid testing at MDA is a voluntary program and is offered on top of mandatory COVID-19 protocols that are already in place, such as symptom screening, temperature testing, physical distancing and masks, Johnson said.

Workers at the space technology company register for the rapid test pilot program and sign a consent form using an app developed by Microsoft Canada Inc.

The app is also used to schedule the COVID-19 appointment and to check in when they arrive.

The test itself is a nasal swab – not the "deep brain tickler" of the polymerase chain reaction (PCR) test, Johnson said.

After the test, employees return to the workplace and are notified of the results within about 15 minutes through the app, she said.

If the worker tests positive, the employee is asked to leave the workplace to obtain a PCR test from a provincial testing site, a deep cleaning occurs and contact tracing takes place, Johnson said.

If the PCR test is positive, the worker is required to complete the necessary quarantine and can transition to working from home.

"The employee will still get paid," Johnson said.

She added that she's hopeful more workers will sign up in the coming days.

"What we are trying to do is break the chain of transmission," said Ajay Agrawal, the founder of the Creative Destruction Lab, a non-profit helping science and tech firms.

"We are using screening to stop one infected person from infecting other people in the workplace."

Rogers Communications Inc. and Air Canada were the first two companies to begin the testing and in late January were joined by Suncor Energy Inc. and Maple Leaf Sports and Entertainment, Agrawal said.

Bank of Nova Scotia, Loblaw Companies Ltd., Shoppers Drug Mart, Magna International Inc., Nutrien Ltd. and Canada Pension Plan Investments are expected to begin testing soon.

It wasn't hard to get the companies on board, said Agrawal, because everyone is eager to reduce the spread of the virus and lift severe lockdown measures that have closed businesses across Canada and forced others into bankruptcy.

"I think they look across the country and all they see is carnage. Economic carnage," said Agrawal.

Suncor joined the consortium with the aim of developing “a cost-effective system for reopening the economy during the COVID-19 pandemic in the absence of widely available vaccines or treatments,” spokesman Paul Newmarch said in an email.

The company has started piloting rapid testing with a targeted group of essential workers at Suncor’s base plant in the Wood Buffalo region of northeastern Alberta, he said.

“Our focus right now is to pilot rapid screening for our essential workers,” Newmarch said, adding that the company is working towards getting additional pilots up and running in other areas across the country.

Loblaw spokeswoman Catherine Thomas said a handful of Shoppers Drug Mart locations and one of the pharmacy’s distribution centres in the Toronto area are participating in the rapid testing program.

“We’ve already been conducting asymptomatic PCR tests at pharmacies in Ontario and Alberta, and believe expanding to rapid tests will complement the ongoing testing work and help reopen our country safely,” she said in an email.

Meanwhile, the lab got executives from the companies together at the start of the pandemic when he realized that a "novel" health crisis would also need novel solutions.

They formed a "vision council" and convinced Mark Little from Suncor, Galen G. Weston of Loblaw and Shoppers Drug Mart and Don Walker from Magna to join.

Former Bank of Canada governor Mark Carney and author Margaret Atwood took part as "thought leaders."

After presentations and poring over plenty of numbers, they decided to put up their money and time and agree to share data as they experiment with rapid testing.

Two retired military generals with experience in Afghanistan were called in, and they began rehearsing how to make the testing as efficient as possible.

They reduced the entire screening process from seven minutes per person to 90 seconds.

"They keep trying to chisel down the time and expense," Agrawal said.

"For example they had a medical professional doing Step 1, 2 and 3 and they realized we don't need a medical professional doing step two and that brings the cost down."

The pilot tests workers twice a week and makes use of millions of rapid tests obtained by the federal government and dispersed across provinces, who were allowed to allocate them for businesses.

Agrawal considers the PCR tests the "gold standard" because they're considered to be more accurate than rapid tests and are being used by most provincial COVID-19 assessment centers.

He expects the rapid tests will generate some false positives, but not many.

"So far, there's only been a few cases and they've all been confirmed by the PCRs," he said.

Once the kinks are all worked out, Agrawal hopes to scale the system quickly, but he warns rapid antigen tests can't work alone.

"They're not going to solve (COVID) alone, but when we combine them with other things like PCRs and rolling out the vaccines, they're just one piece of the puzzle, but a critical one."

This report by The Canadian Press was first published Feb. 1, 2021.

Companies in this story: (TSX:AC, TSX:L, TSX:BNS, TSX:RCI, TSX:MG, TSX:SU, TSX:NTR)

Tara Deschamps and Brett Bundale, The Canadian Press
Originally published Mon., February 1, 20