CRIMINAL CAPITALI$M
UK court fines Glencore $308 million for bribing its way across Africa
Bloomberg News | November 3, 2022 



Less than four weeks after South Sudan became an independent country in 2011, a delegation of Glencore Plc traders arrived by private jet in search of oil. They were carrying with them $800,000 in cash to pay bribes.


The revelation was among several detailed in a London courtroom this week that showed how, decades after Glencore founder Marc Rich created the popular image of commodity traders criss-crossing the globe to dispense bribes in exchange for lucrative contracts, remarkably little had changed in the way some traders at the company were doing business.

The UK Serious Fraud Office showed how Glencore paid more than $28 million in bribes across five African countries over five years to 2016, using methods that were in some cases carbon copies of deals that Rich had put in place in the 1970s and 1980s. On Thursday, a judge handed down a penalty of £276 million ($308 million) for Glencore’s conduct, on top of around $1.1 billion the company has already paid in related cases in the US and Brazil.

Glencore traders hand delivered large quantities of cash to government officials, they sought to profit from political turmoil, and they inserted themselves into government-to-government deals that had been negotiated at preferential rates.

In South Sudan, Glencore wasted little time. The east African country became independent on July 9, 2011. By July 21 a Glencore executive — identified by the SFO only as “GE7” and as the company’s Business Ethics Committee member for the London office — was on a plane “to persuade the President of South Sudan and others in government” to give Glencore’s joint venture there a contract to sell its oil.

Two other employees arrived in the capital Juba with $800,000 in cash a few days later. They said it was for “opening office in South Sudan, cash for office infrastructure, salaries, cars etc.,” but Glencore’s local agent in fact used some of it to pay bribes, the SFO said.

A few months later, the assistant to the President of South Sudan visited Glencore executives in Zurich and London. A Glencore executive withdrew a further $275,000 from the company’s “cash desk” at its Swiss headquarters, and the next day Glencore’s South Sudanese unit was offered an oil deal.

Commodity traders have spent years trying to distance themselves from the image of their industry forged in the days of characters like Marc Rich, instead presenting themselves as logistics businesses, moving oil, metals and grain from A to B in response to market signals.

But the revelations about Glencore’s trading in Africa come just six months after the London-listed company pleaded guilty in related US cases, while top oil trader Vitol Group admitted to paying bribes in three Latin American countries, and Brazilian prosecutors accused Trafigura Group of involvement in a kickback scheme, in a civil case. Trafigura has denied the allegations.

“The extremely sizeable cash sums that were permitted to be withdrawn from the offices in Switzerland, using such spurious descriptions as office expenses, demonstrates the most blatant of conduct,” Judge Peter Fraser said at the Southwark Crown Court on Thursday. “It demonstrates the number of people at Glencore who must have been complicit in this behavior.” An SFO prosecutor said Oct. 24 that as many as 11 former staff were under investigation for criminal wrongdoing.

“The corruption described is so brazen. This was less than 10 years ago,” said Alexandra Gillies, author of Crude Intentions, a book about corruption in the oil industry. “It’s critical that the executives and employees involved are held legally accountable. Bribery was clearly an embedded part of the company’s approach to maximizing profits in some of the poorest countries in the world.”

At the hearing attended by Glencore’s chair, Kalidas Madhavpeddi, the company’s lawyer said the company “unreservedly regrets the harm caused by these offenses.” Madhavpeddi declined to comment on the proceedings when approached by Bloomberg outside the court.

The SFO case outlined how in Nigeria, Glencore paid millions of dollars to an intermediary that were used to bribe officials at the state oil company, using sham contracts to disguise the true purpose of the payments. The Nigerian agent also transported cash by private jet to Cameroon. There a Glencore trader used it to bribe officials at the state oil and gas company and the state refinery.

In Malawi, Glencore used a playbook that Rich had pioneered 40 years earlier. In the 1980s, thanks to an enterprising employee who went by the pseudonym Monsieur Ndolo, the trading house inserted itself in a deal between the government of Iran and the government of Burundi, profiting from the interest-free payment terms that Tehran was willing to offer its poorer African ally.

In its case summary, the SFO detailed how Glencore had done something similar in a government-to-government oil deal between Nigeria and Malawi. Glencore traders and executives sanctioned bribes to officials at the Nigerian state oil company in order to take “take advantage of the ‘free credit’ benefit inherent in the joint venture agreement,” according to the SFO.

The SFO noted that Glencore had anti-corruption policies in place at the time of the wrongdoing, but said “these were largely ignored because corruption was condoned at a very senior level within the company.”

(By Jack Farchy and Jonathan Browning, with assistance from Thomas Biesheuvel)

Column: Unloved lead gets to join the Bloomberg commodity A-list

Reuters | November 3, 2022 | 

Stock image.

Lead will become the 24th commodity to be included in the Bloomberg Commodity Index (BCOM), joining its London Metal Exchange (LME) peers aluminum, copper, nickel, and zinc.


The London three-month lead price jumped almost 10% to $2,019.50 per tonne on Friday’s news, although it’s since pared its gains to a current $1,965.




The reaction is understandable if a little premature. Although lead will have only a 0.936% weighting in the index, the lowest of any of the base metals, it will still translate into fund buying at the start of next year as asset managers adjust to the new weightings.

Perhaps equally important is what inclusion says about a metal widely assumed to be heading for obsolescence as lead-acid batteries succumb to the relentless march of lithium-powered electric vehicles (EV).

The frequent reports of lead’s death, however, continue to be much exaggerated.
Lead’s not dead

It’s not easy being a lead market analyst.

“One of the frustrations (…) is people telling you constantly that lead is dead,” lamented Andrew Thomas, director for zinc and lead at Wood Mackenzie.

However, as he explained at the research house’s LME Week Seminar, what everyone forgets is that of the 80 million passenger vehicles produced last year “just about every single one had a lead-acid battery in them”.

And that includes the eight million electric vehicles produced. In the excitement around new battery metals such as lithium and cobalt, it’s easy to overlook the fact that EVs have a back-up lead battery for safety systems and to power in-car entertainment systems.

Lead-acid batteries need replacing every few years. Given an average vehicle life of 13-14 years, last year’s 80 million vehicles will still be requiring replacement batteries in the early part of the next decade.

Lead’s usage profile is one of unexciting but steady growth, driven by the need to meet demand for replacement batteries in an ever-growing global passenger fleet.
Economic significance

Supply has grown to match demand, global production of refined lead creeping up from under 10 million tonnes in 2010 to 12.38 million tonnes last year, according to the International Lead and Zinc Study Group (ILZSG).

The BCOM looks at five-year averages of exchange liquidity and production data to determine which commodities are included and at what weighting.

The idea is that selected commodities should be both important to the global economy and reflect the value placed on that role by financial markets.

Global lead production has grown sufficiently over the last five years to merit inclusion even though trading liquidity has decreased, according to a statement from Bloomberg.

BCOM determines base metals liquidity with reference to the LME lead contract, which saw volumes fall by 3.8% last year with a further 7.7% decline over the first nine months of this year.

Lead’s performance should be seen in the context of a 4.7% slide in total LME volumes last year and the broader drop in activity following the exchange’s nickel blow-out in March this year.

However, weak trading activity also reflects lead’s unloved status relative to sister metal zinc. LME zinc volumes are more than double those of lead, even though global production of refined zinc was only slightly higher at 13.85 million tonnes last year.
Bumpy ride

With replacement battery demand accounting for around half of global lead usage each year and recycled metal for around 60% of supply, lead’s market dynamics are quite different from the other industrial metals.

Batteries fail in boom times and bad, meaning lead is partly insulated from the economic cycle and has a history of shallower troughs but lower peaks than other LME metals.

The lead market, in other words, can be a bit boring.

But not right now. It’s ironically going through a bout of turbulence just as it’s about to be elevated to commodity A-list status.

An unusual sequence of smelter disruption will cause global refined output to slide by 0.3% in 2022, according to ILZSG, which was expecting a 1.3% rise as recently as April.

European supply has been hit by the year-long outage due to flooding of Germany’s Stolberg plant, the loss of Russian imports due to sanctions and, most recently, the shuttering of secondary capacity in Italy.

ILZSG also noted falling production in North America, Turkey, South Korea and Australia, where planned maintenance works at Nyrstar’s Port Pirie smelter will halt production for two months in the fourth quarter.

The Group is now forecasting a global supply deficit of 83,000 tonnes this year and another 42,000 tonnes in 2023 before smelters catch up with demand.

LME stocks are super low at 27,625 tonnes, equivalent to less than a day’s worth of global consumption. That’s feeding time-spread tension, the cash premium to three-month metal CMPB0-3 flexing out to $48.50 per tonne last month, the widest it’s been this year.

Physical premiums are at record highs, Fastmarkets assessing that for U.S. Midwest delivery at 22.5 cents per lb (US$496 per tonne) over the LME cash price.

Western shortfall is being met by Chinese exports. China was a consistent net importer over the 2017-2020 period but flipped to net exporter last year to the tune of 93,000 tonnes. Net exports in the first nine months of this year have already almost exceeded that figure at 92,000 tonnes.

The flow of Chinese metal is expected to continue until supply and demand rebalance in Western markets.

These are turbulent times for normally sleepy lead and set an interesting backdrop to the fund buying that will follow the January reweighting.

That buying will also coincide with the northern hemisphere winter, a peak demand season for lead as cold weather makes batteries more prone to failure.

It’s just another distinctive quirk of the metal that refuses to go away.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Jane Merriman)

Britishvolt says UK’s political turmoil has put off investors

Bloomberg News | November 3, 2022 | 

Credit: Britishvolt

Beleaguered battery startup Britishvolt Ltd. blamed the UK’s political chaos for putting off investors but said the cheap pound is now making it an attractive prospect for American investors.


“We’ve had lot of political change and that sort of instability,” said Chairman Peter Rolton, speaking at the site of the company’s proposed factory in Blyth, northern England.

“We lost many investors,” he added. “They were already nervous about the UK.”

Britishvolt was heralded as a key part of the country’s drive toward an electric car manufacturing boom. It planned to produce millions of batteries needed by carmakers ahead of a 2030 deadline for sales of new vehicles that run off fossil fuels.

However, this week it announced short-term bridging finance in a bid to avoid entering administration.

Former Prime Minister Liz Truss’s government triggered a rout on gilts and the pound in September after revealing extensive subsidies for families’ and businesses’ energy use, alongside sweeping, unfunded tax cuts.

Rolton was speaking alongside the opposition Labour Party’s Shadow Business Secretary Jonathan Reynolds who was visiting the site, north of Newcastle.

“It’s the government’s actions with the mini budget that’s made the situation harder for Britishvolt,” Reynolds said. “It’s had an impact on the investability of the UK and how people perceive the UK.”

However, Rolton said sterling’s drop against the dollar had its advantages. “The pound make us a cheap date,” he said. “Investors are thinking ‘hang on a minute we are getting more bang for our bucks’ — so there has definitely been an uptick in interest.”

The less than three-year-old business has the funds to keep it going until early December, while staff have taken a pay cut for November to help it stay afloat.

Rolton said that the company had sought £30 million from the UK government over the weekend, but its request had been rejected. Government funding was key to getting overseas investors to commit funding, Rolton said.

On Wednesday, Bloomberg News reported that Glencore Plc, one of the world’s biggest mining and commodity trading companies, was among lenders that provided less than £5 million in the form of a bridging loan, after the company said it’s pursuing “positive ongoing discussions” with potential funders and has received approaches from “several more international investors in the past few days.”

(By Eamon Akil Farhat and Siddharth Philip)

Equinox Partners launches website with aim to improve board governance in gold mining

Staff Writer | November 3, 2022

Image by Jo Johnston from Pixabay.

Equinox Partners, a long-term value investor, announced Thursday the launch of “Directors Without Stock” to amplify its investment stewardship policy.


The New York-based hedge fund, with over $700 million in total assets under management with more than half in gold and silver junior miners, announced its new investment stewardship policy toward directors of public companies last month. Equinox Partners will vote against directors who have served for two or more years but hold less than two years of director’s fees in the company’s stock.

It sets “a clear, lower-bound for director share ownership,” according to chief investment officer Sean Fieler.

The website lists directors of gold and silver mining companies in the MVIS Global Junior Miners Index (GDXJ) who fail the firm’s stewardship policy and includes the director’s photo, name, company, total shares owned, value of shares owned, annual compensation, ratio of value of shares to compensation, and years on board, Equinox said in a news release.

Key results on the website include:

• Of the 95 gold and silver mining companies in the index with readily available public filings, there were 590 directors, of which 125, or 21%, that failed the Equinox Partners stewardship policy;

• Of those 125 that failed, 37 owned no stock at all;

• Of those 37 that owned no stock, the average board tenure was 8 years; and

• By eliminating the two-year minimum tenure constraint, 311 directors, or 53%, would fail the Equinox Partners policy.

By adopting a clear, lower-bound for director share ownership, Equinox Partners said it is pushing back on the growing indifference of boards to non-executive director stock ownership and the decision of some companies to prohibit non-executive directors from owning stock all together.

Equinox said it believes financially aligned directors are more likely to prioritize returns on and of owners’ capital. In comparison, the Canadian E&P industry is an example of a similar capital-intensive industry that has incentivized more insider ownership and prioritized disciplined capital allocation.

“Directors who lack any meaningful financial alignment with shareholders are going to tend to things that aren’t in the financial best interest of shareholders,” Fieler said in a statement.

“Insider ownership amongst the gold miners is worsening, as passive investors push board turnover that does not always align with the interest of shareholders. We hope our policy and this new site can be a step in a different direction.”

British researchers come up with intelligent design process for furnaces
Staff Writer | November 4, 2022

Smelter. (Image courtesy of Mechatherm International Limited).

Researchers at England’s Aston University and Mechatherm International Limited (MIL) have developed a more intelligent design process for furnaces and ancillary equipment for the global aluminium industry.


According to the academic-industry team, the project has considerably reduced product development time and costs and has a projected annual sales turnover of more than £7.4 million over the next three years.

MIL is a leading provider of casthouse equipment for the aluminium industry. The company currently operates under the challenging circumstances imposed by Brexit and the covid-19 pandemic, which has seen its costs increase over a number of years.

To create further growth, the firm decided it was essential to streamline its engineering practices, resulting in reduced overheads.

Their collaboration with Aston University has allowed them to reach this objective, as it led to the optimization of the company’s automation techniques used in the design of its products.

Feeding an AI system with millions of records of data, the company was able to automate the process of advising furnace operators when action should be taken to maximize a machine’s efficiency. This is particularly useful when the time comes for a furnace to receive or transfer material, as reducing the delays associated with normal operation can increase efficiency.

A simple traffic light system was installed on a new screen giving operators an easy visual to make the choice to attend to the load.

” In technology terms, this would equate to using an offline brain watching and learning how the furnace operates, gauging energy use per cycle and suggesting when the optimum parameters have been met,” a media statement by MIL reads.

The joint project has also resulted in a high level of upfront detailed engineering, but at the fraction of the time and cost.

“This partnership has allowed us to produce a system which has saved time and resources, enabling us additional time to develop innovative solutions for the material recycling market and alternative hydrogen-fueled furnace concepts,” Owen Tollerfield, chief mechanical engineer at Mechatherm International Limited, said in the press brief.

Aguia Resources secures $2.9 million for Brazil mine

Cecilia Jamasmie | November 4, 2022 | 

Rio Grande do Sul is home to a large number of farmers and agronomists. 

(Image courtesy of Aguia Resources.)

Aguia Fertilizantes, a unit of Australia’s Aguia Resources (ASX: AGR), has secured financing for the first phase of its Três Estradas phosphate fertilizer project in southern Brazil.


The company will receive 15 million reais ($2.97m) from the southern regional development bank BRDE to build the initial phase of what it will be the first phosphate mine in Rio Grande do Sul state and in the country.

“This credit will allow us to proceed with the Três Estradas phosphate project, generating development and income for Lavras do Sul and strengthening the agribusiness of Rio Grande,” the company’s Brazil CEO Fernando Tallarico said in the statement.

Aguia’s goal is to explore the Lavras do Sul deposit, where an estimated 105 million tonnes of phosphate lie, for an initial 18 years. It is also developing a nearby copper project.

The company, which received a key construction permit for Três Estradas earlier this week, said developing the mine will cost 35 million reais (almost $7m).

The next phase in the permitting process will be obtaining an operation licence. There is also the project’s environmental permitting, which Aguia said is under discussion in a public civil action sponsored by the Brazilian Federal Public Prosecutor’s Office.

Although it had a first favourable decision, there is still an injunction request which could prevent the company from starting construction until the court makes a ruling.

The mine will produce organic phosphate fertilizer commonly known as direct application natural fertilizer.

Aguia expects that after the ramp-up period of the mine and processing plant, it will produce about 300,000 tonnes a year, over the 18-year mine life.

Scheduled to be completed in 12 months, the project will contribute to Brazil’s goal to reduce imports of overall fertilizer to 45% of total domestic consumption by 2050 from the existing 85%.

The nation’s phosphate consumption is 7 to 8 million tonnes per year, but it imports 72% of demand from countries like Morocco and Jordan.

Instead of phasing down coal the world is burning more than ever

Bloomberg News | November 4, 2022 |

An open pit coal mine. Credit: AdobeStock

Last November in Glasgow, the world’s climate leaders were locked in a fierce debate over whether the final draft of the summit’s agreement should include a pledge to “phase-out” or “phase-down” coal.


Since then, the more appropriate term would probably be “phase-up.”

Even as the globe is increasingly battered by floods, droughts and storms caused by climate change, the fuel that contributes most to planet-warming emissions is undergoing a renaissance. Global coal power generation could set a record for a second-straight year and remains the world’s biggest source of electricity. Consumption has surged in Europe to replace shortfalls in hydro, nuclear and Russian gas, while top producer China is extracting record volumes from mines to insulate itself from volatile global energy markets.

Prices of exported coal have skyrocketed to records and futures contracts suggest they’ll remain at historic highs for years to come. And while plans for spending on new mines and power plants are a fraction of what they were a few years ago, that companies are still investing in new projects at all is alarming to climate scientists who say the fuel needs to be phased out by 2040 to avoid the worst effects of climate change. As politicians and activists gather in the Egyptian resort of Sharm El-Sheikh this weekend to consolidate the work of Glasgow, Paris and other past COP summits, coal’s resilience demonstrates the mountain the world still need to climb.

“It’s very much hanging in the balance at the moment about whether coal will set a new record this year, whether gas will set a new record and whether power sector-emissions will set a a new record,” said Dave Jones, a lead analyst at the climate think tank Ember in London. “The power sector is the most important that you need to be seeing emissions reductions from this decade. That means that this is far more than a blip. This is a moment where governments have got to get serious.”

For coal titans who’ve grown accustomed to being a punching bag for environmentalists, this year has not only been profitable but also a rare and welcome chance to remind the world of the value of the cheap and reliable energy they provide.

“Decarbonization is necessary, but it must take place in a responsible and coordinated way and we continue to maintain that this is a journey that will take decades, not years,” Mark Vaile, chairman of Australian miner Whitehaven Coal Ltd. said at an Oct. 26 investor meeting, after the producer posted record annual earnings this year. “Traditional energy sources like coal are critical to providing a reliable baseload of energy.”


Coal has long been mired in controversy. Cheap to mine, easy to transport and simple to burn, it powered the world into the industrial age as it blackened skies and choked lungs. Even after technology reduced direct air pollution, coal continued to be the leading source of greenhouse gases in the atmosphere as it releases more carbon dioxide than oil or natural gas, and mining it unleashes torrents of even-more-potent methane.

In order for the world to reach net-zero emissions by 2050, the International Energy Agency says coal power plants need to be eliminated in developed nations by 2030 and in the rest of the world by 2040. And yet hundreds of billions of dollars are forecast to be invested in new coal assets through the middle of the century, and key nations like China and India are forging ahead with plans to roll-out vast new power plant capacity.

Last year was supposed to be the beginning of the end for the dirty fuel. Consumption had declined in both 2019 and 2020. Alok Sharma, president of the United Nations-led COP26 climate conference, spent the year urging world leaders to “consign coal to history” when they met in Glasgow in November.

Instead, a strong industrial rebound from the pandemic drove coal consumption to a record. Widespread power outages in the world’s top coal users China and India made leaders there double-down on ensuring supplies of the fuel were available to keep their economies humming. And in Scotland, a tearful Sharma apologized to delegates when a pledge to “phase-out” coal was changed to “phase-down” at the last-minute, on the insistence of Beijing and New Delhi.

Things haven’t gotten much better this year. Coal power generation rose about 1% over the previous year through August, according to data from Ember. In Europe, it’s been needed to replace Russian gas to help overcome lower output from nuclear and hydropower. In China, a historic drought in July and August sapped reservoirs of its massive dams, requiring a surge in coal consumption to fill the void. In the US, coal power plant retirements are being delayed and production of the fuel will increase 3.5% this year as miners seek to meet surging demand from around the world and take advantage of record prices.

One of the ironies of the rise in coal use this year is that it’s been tied to droughts that have reduced hydropower generation and left river levels too low for nuclear power plants to operate at full capacity.

And in the two countries that burn 70% of the world’s coal, work is underway on even more power plants that use the fuel. An executive from China’s top engineering firm said he expects the nation to approve more new coal plants through 2025 than the entire fleet of nations like the US. Meanwhile, India plans to expand its coal fleet by about a quarter through the end of the decade unless there’s a substantial drop in the cost of storing electricity.

The result is that even as investments in wind and solar generation jump to records, it’s very possible that emissions from the power sector rise to a new high this year, according to Ember. UN climate scientists have warned that they have to be cut in half by 2030 to be on path to limit rising temperatures to about 1.5 Celsius above pre-industrial times. Emissions from US power plants will increase 1.5% in 2022, according to the Energy Information Administration.

Surging demand has boosted prices for coal to record levels, with benchmark Newcastle coal futures trading around $360 a ton, about six times higher than they were two years ago. Forward contracts are currently trading at above $260 a ton through 2027. Not a single forward contract was above $75 just two years ago.

That’s meant a windfall for miners like commodities giant Glencore Plc, which reported first half earnings from its coal unit that surged almost 900% to $8.9 billion — more than Starbucks Corp. or Nike Inc. made in an entire year. Coal India Ltd., a top global producer, saw profit nearly triple. Chinese companies that extract more than half the world’s coal posted first-half earnings that more than doubled to a combined $80 billion.

Investors have paid attention. Shares for miners like Glencore and Australia-based New Hope Corp. have risen to records this year. Analysts have even suggested giving them a break on environmental-social-governance grounds, arguing they’re doing a social good by providing electricity that keeps families warm, businesses open and workers employed.

Even so, investments in coal have been dwindling as shareholders and banks increasingly refuse to approve new spending on projects either on ethical grounds or because of concerns they’ll be forced to shut long before they can generate a profitable return.


Urgewald, a German nonprofit environmental and human rights organization that tracks active coal projects, said about 473 gigawatts of new coal power plants are still in various stages of planning, compared to about 1,600 gigawatts in the pipeline as recently as 2017. Still, if all the operations still planned are built that would increase the global fleet by nearly a quarter.

“The point may be not so far away when retirements outweigh new additions and the fleet stops growing,” said Heffa Schuecking, director of Urgewald. “The real problem is if we want to cut emissions in half by 2030, then something like half the fleet would have to be retired.”

Plans to expand coal power generation in places like China and India may not make state-owned utilities there happy. With coal prices so high, companies that burn the fuel to generate electricity sold at regulated rates have seen profits ebb. New wind and solar power is far cheaper than coal in both countries, according to BloombergNEF data.

“Power firms are caught in the middle of deciding whether to take advantage of the brief window of looser coal power expansion rules, or focusing more on narrower profits on high costs,” said Zhang Mohan, an analyst with CITIC Futures.

Outside of China and India, plans for new production capacity are limited. Along with expectations that gas will remain costly after Russia’s invasion of Ukraine, that should keep prices high as supply won’t be able to catch up with demand.

“The world can’t just turn off all of its coal powered generation,” said Robert Bishop, chief executive officer of New Hope, which is aiming to lift production and studying potential coal sector acquisitions. “It’s going to take some time and there just isn’t enough supply response coming on, so we think prices will remain elevated.”

Still, the year hasn’t been devoid of hope for those working to reduce emissions. Even as China invests in new coal mines and power plants, it’s putting even more money into clean electricity and energy storage that could eventually crowd fossil fuels out of the grid. The US Inflation Reduction Act promises to speed investments in wind and solar in a market that’s been a laggard relative to its wealth and emissions profile.

And in Europe, the looming energy crisis and surging fossil fuel prices have boosted demand for renewables, with imports of solar panels from China on the continent more than doubling over the first half of the year. The risks of relying on Russian pipeline gas have accelerated plans to also reduce overall use of that fuel, a factor that could over the medium-term offset emissions from coal’s recent revival, academics at Princeton University wrote in a paper published last month. Germany’s top utility RWE AG said in October that while it would boost coal use in the short-term through the winter, it would bring forward by eight years to 2030 its exit from the fuel.

It all suggests only a brief reprieve for coal, as companies and nations keep a close watch on their emissions trajectory. “If we burn more now, we need a deeper dive afterward,” said Sebastian Roetters, an energy campaigner with Urgewald.

(By Dan Murtaugh and David Stringer, with assistance from Qian Chen, James Fernyhough, Will Wade and Todd Gillespie)

India’s massive silver demand cutting world’s warehouse stocks

Bloomberg News | November 4, 2022 |

Stock image.

Indian silver consumption is forecast to surge by around 80% to a record this year, as traders draw down inventories in warehouses from London to Hong Kong after two Covid-riddled years.


Indians bought historically low amounts of silver in 2020 and 2021 as supply chains and demand were hit by virus outbreaks. While consumers rushed to jewelry stores to buy gold in last year’s final quarter when pandemic restrictions eased, pushing sales to an all-time high, silver demand grew by less than 25%.


This year, silver sales are back on track. Local purchases may surpass 8,000 tons in 2022 from about 4,500 tons last year, said Chirag Sheth, principal consultant at Metals Focus Ltd. That’s up from an April estimate of 5,900 tons.

“We are seeing a jump in purchases among retail customers, similar to what we saw in gold last year, because of pent-up demand,” Sheth said.

Imports during the January to August period were 6,370 tons compared to just 153.4 tons during the year-before period, according to the latest data from the nation’s trade ministry. For 2021, the country shipped in only 2,803.4 tons.


India imports about half of its silver from the UK, mainland China and Hong Kong. Buying is mainly from London Bullion Market Association-accredited warehouses, with inventories in those vaults now falling, according to Sheth.

“While gold is brought into the country by air, silver is mostly by sea,” Sheth said. “But now because of the huge demand, everything is coming by air.” Wait times for sourcing the metal have also gone up, with suppliers taking about 20 days to dispatch an order, he said.

Silver holdings in London vaults fell to 27,101 tons at the end of September, the lowest since records began in 2016, according to the LBMA. Prices in India have fallen about 6% this year, while gold has risen around 5%. Futures of the white metal on local exchanges are trading at 58,869 rupees per kilogram, still well below the record of 77,949 rupees touched in 2020.

Jewelry demand comprises more than a third of total consumption in India, while nearly a quarter goes to the industrial sector and the rest is used in silverware and other applications. The metal is popular in rural areas where it’s viewed as “poor man’s gold,” because it’s many times cheaper than its fellow precious metal.

“Silver was relatively cheaply priced compared to gold, so that is probably one of the reasons why investors were buying” the metal, including in the US and Europe, Perth Mint Treasurer Sawan Tanna said. “In terms of institutional silver demand, we saw that in India there was huge demand in the form of silver large bars, purely because the spot price of silver was relatively low historically.”

Demand for silver in India may be strong for the next three to four months before stabilizing, Sheth said. Consumption in 2023 will not be as robust as this year, he said.

(By Swansy Afonso and Sing Yee Ong, with assistance from Eddie Spence)

Buying conflict-free tin and coltan out of Congo just got harder

Bloomberg News | November 4, 2022 

A miner from Kamatanda, one of the mining areas in the Katanga province in southeastern DRC. (Wikimedia Commons)

Buying tin, tantalum and tungsten that doesn’t support violence in central Africa has become more complicated after an industry-led program monitoring the supply chains downgraded its relationship with the region’s main mineral-tracking group.


The Responsible Minerals Initiative, which helps more than 400 of the world’s biggest corporations avoid purchasing metals that fuel or fund violence, said this week that its auditing process won’t recognize the findings of the International Tin Supply Chain Initiative without companies doing extra due diligence on the source of their minerals.

RMI, whose members include Apple Inc. and Walmart Inc., removed ITSCI from its list of “recognized upstream programs” that monitor mineral supply chains because it has not reapplied for recognition by the group, RMI said in an emailed response to questions.

ITSCI said RMI’s decision was “a surprise” and that it was “committed to constructive and open dialogue and engagement” with the program in a statement on its website Thursday.

ITSCI was developed more than a decade ago by tin and tantalum industry groups to stop mining from supporting conflict in the Democratic Republic of Congo by tagging minerals at mines and tracking them through the supply chain.

It has faced criticism regarding reliability, including from anti-corruption group Global Witness, which in April said it had “spectacularly failed in its original goal of ensuring traceability of ‘conflict-free’ minerals.”

After the decision, “any company that is serious about responsibly sourcing minerals and that is sourcing minerals from ITSCI supply chains must now pressure ITSCI to overhaul its governance and be more transparent,” the London-based group said in a new report Friday.

The illicit-mineral trade has long fueled eastern Congo’s conflicts, which began nearly three decades ago as violence from the Rwandan civil war and genocide spread over the border, igniting a series of wars. Despite a 2003 peace deal, fighting persists, with more than 100 armed groups active in the region and millions of people displaced.

Most of the minerals from eastern Congo are dug by hand, providing hundreds of thousands of jobs, and programs like RMI and ITSCI have tried to ensure that companies could still buy conflict-free minerals from the region.

RMI has given companies using the ITSCI system until July to adjust to the changes.

(By Michael J. Kavanagh)

Column: Canada slams the door on China in critical minerals race

Reuters | November 4, 2022 | 

Saskatchewan produces a large volume of lithium-enriched brine water. 

(Image courtesy of Prairie Lithium.)

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)


Canada has just upped the ante in the global competition to secure critical minerals.

The Canadian government this week ordered Chinese companies to divest their holdings in three Canadian-listed junior mining companies planning to develop lithium deposits.

The ban comes within days of Canada announcing a tougher policy on investment in the minerals sector by state-owned entities, particularly those from China, which dominates the processing of key energy transition metals such as lithium, cobalt and rare earths.

The order to divest follows what the government said was a “multi-step national security review process, which involves rigorous scrutiny by Canada’s national security and intelligence community.”

It promised to continue to “act decisively when investments threaten our national security and our critical minerals supply chains, both at home and abroad.”

The move marks a hardening of geopolitical battle-lines in the metals sector and raises the question of what Canada and its metallic allies might do next in the name of national security.

Protecting the pipeline

The three impacted Canadian companies – Power Metals Corp, Ultra Lithium Inc and Lithium Chile Inc – are sitting on lithium deposits in Canada, Argentina and Chile respectively.

Power Metals’ properties in Ontario also contain tantalum and caesium, both of which are also classified as critical minerals by Canada and the United States.

All are next-generation projects, part of a growing pipeline needed to feed the world’s hunger for lithium.

And all have recently announced strategic investments by Chinese players offering not just money but processing expertise and off-take commitments.

Sinomine, one of the world’s largest rare earth producers, took a 5.7% stake in Power Metals for C$1.5m in a January fund-raising round.

Zangge Mining Co, a major Chinese lithium and potash producer, lifted its interest in Ultra Lithium to 14.2% in May and in June entered into an agreement to finance development of the Laguna Verde lithium project in Argentina.

Chengxin Lithium used a private placement by Lithium Chile in May to boost its stake to 19.4% for C$28 million.

All three Chinese companies have fallen foul of Canada’s newly beefed-up Investment Canada Act and must now divest their holdings.

The three abandoned brides will have to find new partners with the government proviso that suitors “share our interests and values.”

Widening the net

Canada’s new policy on critical minerals investment is wide-ranging and far-reaching.

It’s not just China’s state-owned players that will come in for extra scrutiny, but also any private investors “assessed as being closely tied to, subject to influence from, or who could be compelled to comply with extrajudicial direction from foreign governments.”

The policy covers not just mining but all stages of the minerals processing chain.

It extends, most obviously in the case of Ultra Lithium and Lithium Chile, to overseas assets as well as domestic.

Canada’s critical minerals list, updated in March this year, is extensive, covering not just the esoteric rare earths family and energy-transition inputs such as lithium, cobalt and nickel but also mainstream industrial metals such as aluminium, copper and zinc.

These are currently highly globalised markets, pivoting around China as the world’s largest user of industrial metals.

Canada, for example, has for many years been a supplier of mined copper concentrates to China, shipping 430,000 tonnes last year.

Such mine off-take deals may not be immune from Canada’s national security considerations.

“We will need to be very thoughtful going forward about what we are willing to allow,” said Canadian Natural Resources Minister Jonathan Wilson in a June interview with the Globe and Mail. “It is not just true of ownership, but I think we also have to be looking at things like long-term off-take agreements,” he added.

Canada’s overriding priority, Wilson explained, is one of “protecting itself in an area that is clearly strategic and ensuring that those supply chains will be robust for our allies.”
Metal bloc

Canada’s clamp-down on Chinese investment in critical minerals should be seen in the context of an emerging metallic NATO of like-minded countries looking to reduce their dependence on the China and Russia.

The Minerals Security Partnership (MSP), launched in June this year, includes Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, Britain, the United States, and the European Commission.

The nascent alliance is still fractious.

The United States’ Inflation Reduction Act, linking electric vehicle subsidies to domestically produced metals, has infuriated both the European Union and South Korea.

Heated negotiations are currently taking place between US Trade Representative Katherine Tai and the European Commission, which is looking for some form of exemption for friendly countries.

Assuming the current spat can be smoothed out, there is the clear potential for other members to halt Chinese investment into their respective mineral sectors.

Australia is already doing so. In April it blocked an attempt by the Chinese state-owned Baogang Group to take a 13% share in Northern Minerals, which owns the Browns Range rare earths deposit in Western Australia.

In the same month it also blocked Yibin Tianyi Lithium Industry from taking a stake in AVZ Minerals, which has lithium projects, with associated tin and tantalum, in the Democratic Republic of Congo.

Canada’s definition of domestic critical resources to include any company listed on its stock exchange will resonate amongst both the heavyweight mining companies in Britain’s FTSE-100 and the many junior resource companies listed on London’s AIM market.

All will need to heed the Canadian government’s advice to its companies that they “carefully review their investment plans to identify any potential connections to (…) or entities linked to or subject to influence by hostile or non-likeminded regimes or states.”

The metallic uncoupling of China and the rest of the world has just entered a new, more aggressive phase as governments overrule free markets to defend their supply chains.

Canada’s three-pronged attack on Chinese investment is just the start of the next chapter in the great critical minerals game of nations.

($1 = 1.3736 Canadian dollars)

(Editing by David Evans)

Livent looks to Canada for lithium growth opportunities – CEO

Reuters | November 3, 2022 

Nemaska’s Whabouchi lithium deposit in Quebec’s James Bay region, 300 km northwest of Chibougamau. (Credit: Nemaska Lithium)

Lithium producer Livent Corp is eyeing acquisitions in Canada and other countries as it looks to boost its production and processing of the metal used to make electric vehicle batteries, its chief executive told Reuters.


Already one of the top global producers of the metal, Livent has expansions underway across the globe, including Canada, but wants to grow more to meet rising demand for the metal from the electric vehicle (EV) and renewable energy industries.


“We see Canada as a core part of our expansion capacity,” Paul Graves, Livent’s CEO, said in a Thursday interview. “We have to get bigger. We can’t just sit still.”

The Philadelphia-based company last month named Sarah Maryssael as its chief strategy officer to pursue potential lithium deals across the globe. Livent poached Maryssael from Tesla Inc, where she oversaw the automaker’s lithium, cobalt and nickel sourcing.

Related: Livent in deal to buy Nemaska, extend Tesla contract

Livent earlier this week posted better-than-expected quarterly earnings and raised the midpoint of its annual forecast, though the company trimmed the forecast’s top end due to inflation concerns.

Livent has been steadily growing in Canada since forming a joint venture in 2020 to buy Quebec’s Nemaska lithium project, which is now expected to open by 2025 and produce 34,000 tonnes of lithium. Graves said Nemaska could eventually produce 100,000 tonnes annually, but Livent would still seek other growth opportunities in Canada.

Graves, CEO since 2018, added that Livent is interested in deals in Argentina, where it operates a lithium brine project, and Australia. However, Livent would not buy a lithium mine without having adequate processing capacity nearby, he added.

Livent counts General Motors Co, BMW and Tesla as key customers.

Canada’s government has been generally supportive of EV minerals projects, although on Wednesday it ordered three Chinese companies to divest from Canadian critical mining projects, citing national security concerns.

(By Ernest Scheyder; Editing by Richard Pullin)

Industry groups welcome C$10 billion in Ottawa’s budget update
Staff Writer | November 4, 2022 | 

Mining Association of Canada president and CEO Pierre Gratton addressed the Greater Vancouver Board of Trade (GVBOT) on Wednesday, January 23 – 

Image courtesy of the Greater Vancouver Board of Trade

Canada’s major mining industry group and a green energy think tank are welcoming nearly C$10 billion spread over tax credits for clean technology, mining project approval improvements, innovation research and industry training announced in a federal budget update.


Ottawa is offering C$6.7 billion in tax credits over five years for up to 30% of investments in clean technologies such as battery storage, electric industrial vehicles and small nuclear reactors, according to the Liberal government’s fall economic statement issued Thursday.

It also gives C$1.28 billion over six years to several federal departments, including the Impact Assessment Agency, to speed the project approvals process; C$962.2 million over eight years to modernize the National Research Council; and C$802.1 million over three years for the Youth Employment and Skills Strategy.

“This investment tax credit will serve to benefit Canada’s mining industry in several ways as the deployment of zero emission vehicles and non-green-house gas emission solutions is accelerating across our sector,” Pierre Gratton, president and chief executive officer of the Mining Association of Canada, said in a news release. “This tax credit will support our sector in accomplishing its climate action priorities.”

Mark Zacharias, executive director at Vancouver-based Clean Energy Canada, a research group at Simon Fraser University, said the tax credit was a suitable response to the United States boosting its own clean energy industries with $1.7 billion in incentives in recent legislation by the Biden administration.

“Canada simply had to respond,” Zacharias said in a statement after the budget update. “It’s a recognition of a global reality in which our largest trading partners are mapping out their clean industrial futures and planting flags.”

Canada is among the Western nations trying to boost and protect the critical mineral industries it needs for a transition to clean energy that is estimated to cost trillions of dollars globally. Ottawa announced a national critical minerals strategy in April, which it plans to update by year’s end, and toughened foreign investment rules last month. This week it ordered three companies based in China, which controls some 80% of rare earth elements in global markets, to divest from Canadian projects.

Federal Natural Resources Minister Jonathan Wilkinson had said on Oct. 25 that Canada would respond to the US tax incentives in its Inflation Reduction Act. Wilkinson, who served on the board of Hydrogen and Fuel Cells Canada, also spoke about the need to promote the hydrogen fuel industry in Canada.

Zacharias and Gratton welcomed the budget update’s increase to 40% of a previously announced investment tax credit for clean hydrogen.

Wilkinson and provincial counterparts such as Ontario Mines Minister George Pirie have said how Canada must cut its mining approval times. Gratton criticized the federal Impact Assessment Agency for an “unsatisfactory job” reviewing projects.

“It is imperative that more knowledgeable subject-matter experts, rather than just more staff, be hired,” Gratton said. “Canada has had tremendous success attracting new investment into the battery value chain on the promise of a reliable supply of battery materials, and now we have to deliver.”

Zacharias said Ottawa’s increased clarity on its policies to foster clean energy innovation and improve training are needed to improve Canada’s competitiveness.

“The idea that climate action is also economic action has never been truer,” Zacharias said. “We’ve had climate plans with economic benefits. This is economic planning with climate benefits.”

Canada to set up tax credits for clean tech, launch growth fund

Reuters | November 3, 2022 |

Canada’s Foreign Minister Chrystia Freeland. Photo by Freeland’s press office

Canada will introduce tax credits for clean technologies worth up to 30% of investment costs in a bid to close competitive gaps with the United States in scaling up green technologies, the government said on Thursday.


It will also launch a growth fund, first announced in April, by the end of the year with a capitalization of C$15 billion ($10.92 billion) to help mitigate the risks private investors take on when investing in new technologies and infrastructure.

The clean-tech tax credits will be offered for investors in net-zero technologies, battery storage and clean hydrogen, according to the so-called fall economic statement (FES) presented to the House of Commons by Finance Minister Chrystia Freeland.

The new green transition measures are “a step in the right direction helping Canada compete with the US on advanced clean manufacturing,” said Scott MacDougall, a senior advisor at the Pembina Institute, a clean energy think-tank.

However, it “falls short of what’s needed to put Canada on track to achieve its climate goals, missing major increased funding to support net-zero electricity generation and infrastructure,” he added.

Freeland last month promised an initial “response” to the US Inflation Reduction Act (IRA), which was signed into law by US President Joe Biden earlier this year and contains generous incentives for consumers and businesses to make the low-carbon transition.

Canada on Thursday proposed a 2% tax on corporate stock buybacks, similar to a measure in the IRA, that is meant to “encourage corporations to reinvest their profits in their workers and business,” the FES said.

The tax will generate an estimated C$2.1 billion over five years and will come into force on Jan 1, 2024.

“In terms of trying to foster business investments, I don’t think it’s well targeted,” said Robert Asselin, senior vice president of policy at the Business Council of Canada.

The government also promised an investment tax credit for hydrogen in next year’s budget, saying the cleanest producers would qualify to get back at least 40% of their investment, and Freeland promised more action on the green transition.

“These investments represent only a down payment on the work that lies ahead,” Freeland told lawmakers after she presented the document.

One of the investment offerings foreseen by the growth fund are so-called “contracts for difference”, which could help investors in carbon capture and storage mitigate the risk that a future government eliminates Canada’s carbon pricing system.

In next year’s budget, Canada will introduce new measures to increase advanced manufacturing competitiveness, the document said.

($1 = 1.3736 Canadian dollars)

(By Steve Scherer and Julie Gordon; Editing by Deepa Babington)