Rio Tinto reaches historic agreement with Juukan Gorge group

Reuters | November 28, 2022

Juukan Gorge cave sites seen before the destruction. 

(Screenshot via YouTube.)

Rio Tinto (NYSE, ASX: RIO) has reached a restitution agreement with an Aboriginal group whose rock shelters in Western Australia it destroyed two years ago for an iron ore mine, the groups said on Monday.


The destruction of the Juukan Gorge sites that showed evidence of human habitation stretching back into the last Ice Age 46,000 years ago caused deep distress to the traditional owners, the Puutu Kunti, Kurrama and Pinikura (PKKP) peoples.

It also fueled a global uproar, cost three senior leaders and two board members their jobs, a parliamentary inquiry, and an overhaul of the mining industry’s agreements with Indigenous Australians.

Financial terms were not disclosed by either party at the request of the PKKP, the parties said.

“Nothing can compensate for or replace the loss suffered at Juukan Gorge, so this is an outcome orientated legacy to ensure something positive will come from it for years to come,” PKKP Aboriginal Corp Chairperson Burchell Hayes said.

The Juukan Gorge Legacy Foundation will focus on education and training opportunities, financial independence through business development, preservation and an increased voice over heritage, culture and land, the PKKP said in a statement.

The two groups are in advanced talks about a co-management of mining agreement, the PKKP added.

“We fell far short of our values as a company and breached the trust placed in us by the PKKP people by allowing the destruction of the Juukan Gorge rock shelters,” Rio Tinto Chief Executive Jakob Stausholm said.

“As we work hard to rebuild our relationship, I would like to thank the PKKP people, their elders, and the Corporation for their guidance and leadership in forming this important agreement,” he said in a separate statement.

As well as the legacy foundation, remedy discussions have centred on ongoing rehabilitation of the rock shelters and their surrounds at Juukan Gorge, Rio said.

Australia said last week that it would strengthen laws to better protect Aboriginal cultural heritage following the enquiry, although it did not offer a time frame for completion.

(By Melanie Burton; Editing by Stephen Coates)

LME says it saved nickel market from $20 billion ‘death spiral’

Bloomberg News | November 28, 2022 | 

Image courtesy of LME.

The London Metal Exchange has defended its controversial decision to cancel billions of dollars of nickel trades in March as necessary to avoid a $20 billion margin call that would have sent the market into a “death spiral” and threatened the exchange’s own survival.


The LME on Monday provided its most detailed account yet of the historic short squeeze this year when prices soared 250% in little over 24 hours, in a filing outlining its defense against lawsuits from Elliott Investment Management and Jane Street.

The document — which describes a growing sense of panic and mounting defaults among members well before the worst of the spike — describes why the LME took the unprecedented decision to unwind hours worth of trading, but may also reignite questions from its critics about why it didn’t act sooner.

If the prices reached during the canceled trading on March 8 had been allowed to stand, the nickel market would have faced a margin call of $19.75 billion, ten times higher than the previous record level, the exchange said. At least seven clearing members would have gone into default, and the crisis had the potential to create a “death spiral,” according to Adrian Farnham, the chief executive officer of the LME’s clearinghouse at the time.

In that scenario, LME Clear would have incurred a loss of $2.6 billion, and would have had to seek contributions of at least $1.22 billion from the remaining clearing members. That in turn would probably have caused a further five clearing members to default, the LME said in the filing, “resulting in the LME being unable to function as a venue for non-ferrous metals markets, and posing a significant systemic risk to the wider financial system.”

Elliott and Jane Street are seeking a total of nearly $500 million in damages from the LME and its clearinghouse, arguing that the exchange acted improperly in its decision to cancel the March 8 trades.

“The LME maintains that Elliott’s and Jane Street’s grounds for complaint have no merit and are based on a fundamental misunderstanding of the situation on 8 March and the decisions taken by the LME,” an LME spokesperson said. “All the actions taken on 8 March were lawful and made in the interest of the market as a whole. The LME will continue to vigorously defend these proceedings.”

Missed calls

The LME’s defense reveals how much stress the market was under even on March 7, the day before the market was suspended, when prices rose 66%. Three members missed initial margin calls that were due for payment by 9 a.m. that day, and one remained unpaid, according to the LME.

By 1:15 p.m. in London on March 7, the LME had made nine intraday margin calls totaling about $7 billion, and LME Clear “was concerned that it would not be feasible for Members to meet further intraday margin calls”. As a result, LME Clear decided to stop making intraday margin calls — a decision that was “extremely unusual and a departure from internal policy,” according to the filing.

Yet when the LME’s special committee held a call at 4 p.m. on March 7, it concluded that the market was still orderly, and allowed it to reopen as usual the following night at 1 a.m.

At 5:53 a.m. on March 8, Farnham was informed that six members had not made overnight margin payments worth $2 billion — or one third of the total due — that were due by 9 a.m. Between 5:33 a.m. and 8:18 a.m., seven members approached the LME to say that they would have difficulty posting margin.

At about 7:30 a.m., LME and LME Clear executives held a call at which they agreed that the market had become disorderly and decided to suspend trading. At 9 a.m., a further call was held at which the decision was taken to cancel all trades that had taken place on March 8.

Responding to the suggestion that it had acted to favor Tsingshan Holding Group Co., whose massive short position was the focus of the nickel market squeeze, the LME said it had not known about the situation.

“It has emerged that underlying the unprecedented price convulsions on 8 March 2022 there very substantial short positions in the over-the-counter (“OTC”) market contributing to market disorder,” the LME said in the filing. “On 8 March, the LME was not aware of the large short positions in the OTC market.”

(By Jack Farchy and Mark Burton)

Las Bambas mine resumes copper output; transportation still halted

Reuters | November 28, 2022

(Reference image by the Peruvian Ministry of Energy and Mines, Twitter).

MMG Ltd resumed copper production at its Las Bambas mine in Peru after a protest was lifted, a source close to the company said on Monday, but added that transportation of the metal to port remained blocked by a separate conflict.


Las Bambas had reduced its operations to 30% of its usual capacity earlier this month due to the protests.

Protests against the Chinese-owned mine are recurrent and have often disrupted operations, amid complaints by nearby indigenous communities that the company’s huge mineral wealth has not translated into better living conditions for them.

The source said a protest in the town of Challhuahuacho had been lifted, which allowed production to resume.

But a separate protest blocking the road that Las Bambas uses to transport its copper onto a seaport for shipment to clients remained blocked along the Chumbivilcas province.

Peru is the world’s No. 2 copper producer and Las Bambas ranks among its largest producers of the red metal.

Since Las Bambas began operations in 2016, the miner has faced over 540 days of road blockades, according to statistics kept by the company.

(By Marco Aquino; Editing by Lisa Shumaker)

CRIMINAL CAPITALI$M

Russian tycoon to face new probe over Billionaire Bay villas
Bloomberg News | November 29, 2022 | 

Suleiman Kerimov, 56 (right), has been sanctioned by the US since 2018. Credit: Wikimedia Commons

Russian billionaire Suleiman Kerimov, 56, and his family are set to face a fresh probe in France, with a new team of prosecutors examining how his daughter came to own several luxury villas on the Riviera, and who the ultimate beneficiary is.


A Paris prosecution unit in charge of tackling organized crime known as Junalco is leading the investigation into the financial flows that enabled the acquisition by Gulnara Kerimova, 32, of the companies that own the four villas on the “Billionaire Bay” at Cap d’Antibes, according to people familiar with the matter. The ownership of the villas was the subject of a money laundering case opened several years ago in Nice, in southeastern France.

Junalco prosecutors are now drawing on a June report by France’s anti-money laundering body Tracfin, said the people. According to that document, Gulnara spent €268 million ($279 million) to take over the ownership structure, with funds provided for the most part by her brother Said, investigative news outlet Mediapart reported. In response to Bloomberg questions, Paris prosecutors confirmed that Junalco is taking the lead in investigating the Tracfin memo.

Nikita Sichov, an attorney representing Suleiman, Said and Gulnara, brushed aside any efforts to draw the family back under the French legal spotlight, suggesting that the change of ownership of the properties is well known to French authorities.

“The Tracfin report you refer to concerns a restructuring carried out in complete transparency with the competent bodies in order to comply with all the regulations in force,” Sichov said in response to Bloomberg questions.

The new probe caps a bad month for Kerimov’s family, which until earlier this year held a majority stake in Polyus PJSC, Russia’s largest gold miner. It fully exited the company in May.

Kerimov, who is a senator in Russia and whose net worth is $10.9 billion according to Bloomberg Billionaires Index, has been sanctioned by the US since 2018. Two weeks ago, the US sanctioned Said, Gulnara and the four French real estate firms she acquired as well as Alexander Studhalter, a Kerimov associate who had previously used a Swiss firm for ownership of the villas. The European Union and the UK added Kerimov to their sanctions lists following the invasion of Ukraine. Said has been sanctioned by the EU since April.

While Kerimov is on the EU sanctions list, the four villas don’t appear on France’s list of frozen properties, highlighting the difficulty local authorities have had in tying the luxury homes to him.
Nice case

Kerimov seemed to be in the clear in France following a 2020 settlement deal between prosecutors in Nice and the Swiss company run by Studhalter for €1.4 million.

That case made global headlines in November 2017 when the Russian billionaire was apprehended at the Nice airport and accused of money laundering. The arrest was dramatic. Kerimov had flown by private jet to Nice planning to head to Cap d’Antibes. Instead, he was met by French police officers. For months after that, he was under virtual house arrest on the French coast, required to check in with police weekly and allowed to return to Russia only with special permission for short visits.

Much of that probe had initially focused on secret payments worth €92 million during the acquisition of the “Villa Hier,” famously used as Michael Caine’s home in the 1988 film Dirty Rotten Scoundrels.

Sichov, Kerimov’s attorney, said the accusations against his client in the Nice case relating to the sale of the Villa Hier have been dismissed and that the billionaire isn’t facing any formal charges in any criminal proceedings.

The Nice prosecutors had stumbled onto Kerimov by accident as an investigation into drug dealers unexpectedly led French police to a secretary working for a Corsican lawyer. As investigators started to wiretap the lawyer’s entourage, they noticed suspicious transactions from one of his clients, the prior owner of Villa Hier. That trail then led them to Studhalter and Kerimov.

Throughout that probe, Kerimov claimed he never bought the villas but was merely renting them from Studhalter. The tycoon was reputed for being something of a Jay Gatsby-type figure because of his glitzy parties on the Riviera, including a bash where Beyonce sang.

Yet there were signs that Kerimov was more than just a renter. Blueprints from London-based architects MMM for renovations at Villa Medy Roc in 2009 showed plans for bedrooms with the names of Kerimov’s children — Said, Gula and Emina. A lawyer for Studhalter declined to comment.
Junalco’s probe

Now, the Tracfin report and the tasking of Junalco prosecutors to look into the villas’ ownership may put the Kerimov family back in French judicial cross-hairs. Junalco is an elite unit set up recently in Paris and charged with prosecuting “very complex” organized crime cases throughout France, from drug lords to cyber-criminals. It shares competence on certain matters with the Parquet National Financier, another prosecuting unit that operates in France and focuses on white-collar crimes.

Meanwhile, rich Russians, once a noticeable presence on the French Riviera, have all but disappeared since the invasion of Ukraine. They used to be seen vacationing in their vast sea-view villas or on superyachts from Saint-Tropez to Monaco. But many of their mansions are now frozen and their boats immobilized across Europe.

(By Gaspard Sebag, with assistance from Stephanie Baker)

New Australia coal projects to increase methane emissions by 19%

Bloomberg News | November 29, 2022

Open-cut coal mine in Australia’s Hunter Valley. (Reference image by Max Phillips, Wikimedia Commons.)

If 15 planned coal mining projects in Australia enter operation they would boost the country’s methane emissions from the dirtiest fossil fuel by nearly a fifth, according to an analysis from energy think tank Ember.


Australia’s coal mines already cause more planetary warming in a typical year than emissions from all the country’s cars. The new projects were previously approved but are facing fresh scrutiny under Prime Minister Anthony Albanese’s Labor coalition, which has joined the Global Methane Pledge that aims to cut global emissions of the potent greenhouse gas 30% by 2030.


Cutting emissions from coal mines is the cheapest way for Australia to significantly reduce the amount of methane it releases, a separate Ember analysis found last month. The nation’s coal mines already spew more than 1 million metric tons of methane each year, nearly a quarter of the country’s overall emissions of the gas, the group said in the new report.

The office of Environment Minister Tanya Plibersek did not respond to a request for comment.

Methane has 84 times the warming power of carbon dioxide during its first two decades in the atmosphere. Cutting emissions of the gas is a crucial test for Albanese’s Labor government, which campaigned on a promise to improve the nation’s climate standing on the world stage. In September, the government passed a law requiring a 43% cut in greenhouse gas emissions from 2005 levels by 2030 and setting a net zero goal by 2050, its first binding emissions-reduction target.

If the 15 projects being reviewed move forward they would increase Australian methane emissions from coal mines by roughly 190,000 metric tons a year, according to Ember.

In February, Australia disclosed it had revised how it calculates methane pollution from open-cut coal mines and said the change means total national emissions were on average 0.3% higher than previously stated for each year since 1990. That revision was prompted by the use of satellite data, which has improved the ability to estimate greenhouse gas emissions, the government said.

(By Aaron Clark, with assistance from James Fernyhough)

TANZANIA

Petra Diamonds to keep Williamson mine idled until mid-2023

Cecilia Jamasmie | November 30, 2022 | 

Dense media separation washing screen at Williamson mine plant. 

(Image courtesy of Petra Diamonds.)

Petra Diamonds (LON: PDL) said on Wednesday its Williamson mine in Tanzania would not resume production before the middle of 2023, following the partial collapse of tailings storage facility (TSF) earlier this month.


The company said the decision comes after an assessment by a team of experts that concluded there is a low risk of further failures of the mine’s TFS. They also warned of a possible breach of the New Alamasi water dam.

On November 7, part of the eastern wall of Williamson’s tailing dam collapsed, releasing a total of 12.8 million cubic metres of water and tailings material that flooded nearby areas.

There were no injuries or fatalities and the mine pit was unaffected, Petra said. It added that water and tailings material samples taken by the Tanzanian Government Chemist Laboratory Authority did not find dangerous chemicals and the ones detected were within normal parameters.

Petra, which also operates three diamond mines in South Africa, said its Tanzanian subsidiary, Williamson Diamonds (WDL), has built since an initial 6-metre-high wall to close the breached wall area.

As a precautionary measure, WDL has also put up containment walls upstream and downstream of the New Alamasi water dam, while support for facility’s new wall is under way.

Various diversion trenches are also being constructed to prevent any build-up of water and to enable rainwater to flow into the surrounding rivers and streams, Petra said.
Up to one-year wait

In a preliminary assessment, both Petra’s and independent external specialists concluded that the failure was the result of a subsidence of a portion of the TFS’ East wall measuring around 1.5 metres. This enabled water to crest the wall, initiating the breach.

“The root cause of the subsidence has not been determined and will require a forensic geotechnical investigation to be completed,” Petra said.

“This work will be undertaken by an independent company specializing in tailings dam design and management,” it added.

Cost and timing of the investigation will be available after a detailed scoping process is completed, but the miner said initial estimations point to between six and 12 months.

The company said that, in light of the failure of the existing facility, the design of the new TSF is currently under review, and is expected to be finalized in February 2023.

Petra warned the new TSF will take longer than initially anticipated to become operable. In parallel, an option of repairing and using the existing TSF is also being explored as a long-term solution, but this is subject to the outcome of the geotechnical investigation.
Financial support

Petra, which owns 75% of Williamson, said it was in talks with the government of Tanzania, which owns 25% of the diamond mine, on options for financial support during the production halt.

One of the options proposed by the company is the release and sale of a 71,654 carat diamond parcel seized by Tanzanian authorities in 2017.

At the time, Petra had to halt operations at Williamson, the source of the confiscated diamonds, as local authorities claimed the company was undervaluing its exports, which the miner has denied.

The Williamson mine has been the target of illegal artisanal miners in the past. 

(Image courtesy of RAID.)

The two parties reached an agreement in December 2021, with the Tanzania government agreeing to release the proceeds of the parcel sale to the company.

Operations at Williamson were halted for months last year due to a decline in diamond prices. During this time, the mine was subject to numerous incidences of illegal mining, and accusations of human rights abuses by security guards trying to keep intruders at bay.

Petra investigated the claims and end up reaching a $6 million settlement.

Common fungus turns out to be inexpensive, effective way to deal with mercury pollution

Staff Writer | November 22, 2022 | 

Mercury-polluted water at the New Idria mercury mine in the US.

 (Reference image by Joe.nehls, Wikimedia Commons.)

Researchers at Zhejiang University and the University of Maryland have discovered that the fungus Metarhizium robertsii removes mercury from the soil around plant roots, and from fresh and saltwater.


In a paper published in the journal Proceedings of the National Academy of Sciences, the scientists point out that their findings could provide an inexpensive and efficient way to protect crops grown in polluted areas and remediate mercury-laden waterways, such as those close to gold mining operations.

In detail, the study shows how Metarhizium stops plants from taking up mercury. “Despite being planted in polluted soil, the plant grows normally and is edible. What’s more, the fungus alone can quickly clear mercury from both fresh and saltwater,” UMD professor of entomology and co-author of the study, Raymond St. Leger, said in a media statement.

St. Leger explained that Metarhizium is a nearly ubiquitous fungus that colonizes plant roots and protects them from herbivorous insects.

Scientists have known that Metarhizium is often one of the only living things found in soils from toxic sites like mercury or artisanal gold mines. But no one had previously determined how the fungus survived in mercury-polluted soils, or if that had implications for the plants the fungus normally lives with.

A copycat

St. Leger and other colleagues had previously sequenced the genome of Metarhizium, and Weiguo Fang, lead author of the paper, noticed that it contains two genes that are very similar to genes present in a bacterium known to detoxify, or bioremediate, mercury.

For the current study, the researchers ran a variety of laboratory experiments and found that corn infected with Metarhizium grew just as well whether it was planted in clean soil or mercury-laden soil. Moreover, no mercury was found in the plant tissues of corn grown in polluted soil.

The researchers then genetically modified the fungi, removing the two genes that were similar to those in mercury-remediating bacteria. When they replicated their experiments, modified Metarhizium no longer protected corn plants from mercury-laden soil, and the corn died.

To verify that the genes were providing the detoxifying qualities, the researchers inserted them into another fungus that does not normally protect corn from mercury. The newly modified fungus performed like the Metarhizium, protecting the plants from mercury-laden soil.

Microbiological analyses revealed that the genes in question expressed enzymes that break down highly toxic organic forms of mercury into less toxic, inorganic mercury molecules.
Genetically engineered

Lastly, the researchers genetically engineered Metarhizium to express more of the detoxifying genes and increase its production of the detoxifying enzymes.

In their final experiment, the scientists found they could clear mercury from both fresh and saltwater in 48 hours by mixing in Metarhizium.

According to St. Leger, the next step will be to conduct experiments in the field in China to see if the fungus can turn toxic environments into productive fields for growing corn and other crops.

“Allowing plants to grow in mercury-rich environments is one of the ways this fungus protects its plant home,” St. Leger said. “It’s the only microbe we know of with the potential to be used like this because the bacteria with the same genetic capabilities to detoxify mercury don’t grow on plants. But you can imagine simply dipping seeds in Metarhizium, and planting crops that are now protected from mercury-rich soils.”

In addition to its potential as a cost-effective tool for reclaiming polluted lands for agriculture, the fungus may help clear mercury from wetlands and polluted waterways that are increasingly threatened by mercury pollution as climate change and melting permafrost accelerate the release of the toxic metal into soils and oceans.

Most Australian mine workers dissatisfied with their jobs – report

Staff Writer | November 30, 2022 

Mine workers. (Reference image by Pranshu Goyal, Pixahive.)

A recent report led by researchers at Curtin University has found that Australian mining companies have a stronger focus on employees’ physical health and safety than on their mental health and well-being.


The study examined employee welfare in the mining sector and found that only 22% of workers were very satisfied with their overall job, with employees experiencing poor job satisfaction, job security and job prospects compared to other industries.

By reviewing secondary evidence from the Australian Human Rights Commission, the authors of the report also found the mining sector is one of the worst five industries in the country in relation to sexual harassment issues, with 40% of workers and 74% of female workers reporting sexual harassment in the last five years.

The dossier develops a unique index to capture the prioritization of employee health and well-being based on mining companies’ public reports and found that many of them, particularly those that are larger or have women at the helm, are prioritizing well-being. However, only 33% refer to loneliness, social connection, or isolation in their reports, and only 50% of mining companies refer to sexual harassment, assault, and sexism.

(Graph from the “Towards a healthy and safe workforce in the mining industry: A review and mapping of current practice” report).

According to Astghik Mavisakalyan, co-author of the study and a professor at the Bankwest Curtin Economics Centre, all of these factors contribute to the mining industry rating the lowest among all Australian industries for job satisfaction.

“We found that while mining sector workers experienced good physical health and were more satisfied with their jobs now compared to 15 years ago, the number of very satisfied workers was the lowest of all industries,” Mavisakalyan said. “The report also showed that the levels of high distress of mining sector workers had risen considerably in the past decade, from 9% in 2009 to 15% in 2019.”

For Mavisakalyan and her colleagues, it is important to identify and support employees that are experiencing poor mental health and proactively create a healthy work environment.

“This means developing work cultures in which women are welcome and accepted, as well as, for all workers, having meaningful jobs with decent rosters, acceptable levels of job demands, and supportive managers,” Sharon Parker, a researcher at Curtin’s Future of Work Institute, said.

“Having anti-harassment and mental health policies is necessary but not sufficient. These policies need to be backed up by on-the-ground support, such as effective systems for reporting harassment, and education and training of managers to effectively implement the policies.”

Parker and Mavisakalyan also mentioned this report is the first contribution to a major project that is intended to promote positive and effective change for those working in the mining industry who might be experiencing poor mental health and well-being, as well as those subjected to sexual harassment in the workplace.

Australian battery metal players key to South Korea’s EV ambition

Reuters | November 30, 2022 |

POSCO processes lithium phosphate from SungEel to produce lithium carbonate for rechargeable battery makers LG and Samsung. (Image from archives)

Australia will play a big role in South Korea’s ambition to lead the electric vehicle batteries market and diversify from China for its battery metals needs, a top South Korean executive said on Wednesday.


Ben Bosung Kim, the managing director for steel giant POSCO in Australia, said the company has already invested around A$5 billion ($3.4 billion) in the country, which covers traditional raw material such as iron ore and coal, and more recently lithium, nickel, graphite and other minerals needed to manufacture electric car batteries.

“Australia and Korea are always complementary and interdependent in terms of Australia’s mining and Korea’s manufacturing,” Ben told Reuters at the sidelines of the Australia-Korea Business Council (AKBC) conference in Sydney.

“It was like that in the past in terms of steelmaking, and it will be for the battery materials in the future,” he said.

The Asian country controls a third of the $46 billion market for electric vehicle batteries but it relies heavily on China which is a key supplier to Korea for electric vehicles.

In recent years, US allies have moved to reduce their dependence on China amid heightened concern about Beijing’s control over the critical minerals sector.

South Korea needs critical mineral supplies, having pledged to become a battery manufacturing powerhouse by 2030 as part of a plan to be carbon-neutral by 2050.

POSCO last year entered into a joint venture deal with Pilbara Minerals Ltd to build a 43,000 tonne lithium hydroxide chemical facility in Gwangyang, South Korea. It also bought a 30% stake in First Quantum Minerals Ravensthorpe nickel mine in Western Australia.

POSCO executives at the conference said that Australia is going to be a critical target for the company for investment into hydrogen projects.

In a presentation, POSCO Executive Vice President and Head of Hydrogen Business, Juik Choo, said the company wants to become a global hydrogen provider with capacity to produce 7 million tonnes by 2050. Part of this plan is to build large-scale hydrogen production base in Australia that can deliver 1 million tonnes by 2040.

Choo said the global race to be the first and largest provider of hydrogen is gaining speed, with the US this year passing the Inflation Reduction Act (IRA) that offers big incentives for hydrogen production.

The Australian government should offer similar incentives so the country can be a leader in global hydrogen exports, he said.

($1 = 1.4923 Australian dollars)

(By Melanie Burton; Editing by Stephen Coates)

Barclays coal plan exposes reach of Biden’s Inflation Reduction Act

Bloomberg News | November 30, 2022 | 

Open pit coal mine. (Stock Image)

The Inflation Reduction Act is starting to change the way bankers view their climate targets.


Barclays Plc, one of Europe’s biggest coal financiers, said its analysis of the IRA has led it to commit to wind down its funding for coal in the US five years earlier than planned. Chief Executive Officer C.S. Venkatakrishnan told shareholders recently that the bank now expects to phase out its financing of thermal coal power in the US by 2030.

It’s a move that may well spread across more of the finance industry as executives digest the full effect of the IRA, according to sustainable investing veterans. The bill makes it “much easier for those in the finance sector to take a view on what can be backed and what can be profitable,” said Ian Simm, founder and CEO of sustainable investment firm Impax Asset Management.

Signed into law by President Joe Biden in August, the IRA includes $374 billion that’s earmarked to speed up the transition to clean energy, get more people to buy electric cars, and turbo-charge green technology. The effect will be to bring down the cost of capital for renewable power generation, and ultimately make the sector cheaper and more attractive than fossil fuels, Simm said.

Barclays’ decision to adjust its coal targets is a sign that climate legislation has the power to prevail in steering capital, despite efforts by the Republican Party to penalize firms seen as hostile toward the fossil-fuel industry.

UBS Group AG analysts predicted last month that the climate bill will rewrite the US investment landscape, providing “an enormous amount of money coming down the pipes that will move markets.” That coincided with research from Goldman Sachs Group Inc. showing that investors have yet to appreciate the full scope of the IRA’s reach.

The bill, which also includes money to help retire coal plants, puts the US on a path to slash its emissions and even helps keep alive a long-shot global goal of limiting warming to the critical threshold of 1.5C.

Barclays’ new coal target for the US, which Venkatakrishnan said he expects to become official at the end of the year, would match its commitments in the UK and the European Union. A Barclays spokeswoman declined to elaborate.

The London-based bank’s willingness to date to finance some of the world’s biggest polluters has made it the target of criticism by climate activists. Barclays has faced protests outside its offices and two shareholder resolutions pushing it to do more on phasing out fossil fuels. From the start of 2019 through last November, Barclays arranged roughly $50 billion of financing via loans and bond sales for fossil-fuel companies, more than any UK-based bank other than HSBC Holdings Plc, according to data compiled by Bloomberg.

Jeanne Martin, who heads the banking program at ShareAction, the nonprofit behind the first Barclays climate resolution in 2020, said the bank’s updated coal policy is “welcome.” However, the bank “can’t stop there,” she said. The reduction in financing of oil and gas projects is still needed to “save our chances of keeping warming to 1.5C.”

For now, there’s a possibility that Barclays’ decision to adopt more ambitious coal targets in the US may put pressure on other banks to do more, according to Alec Connon, co-director of the Stop the Money Pipeline coalition. US banks have an “abysmal record on coal,” he said. And most don’t have a plan to phase out coal while those that do utilize loopholes that allow financing to continue, he said.

(By Alastair Marsh)