U.S. Shale Giants Want In On The Global LNG Game

By Irina Slav - Feb 09, 2023

• U.S. gas producers are getting increasingly interested in LNG exports.
• 
  
• Producers such as Devon Energy and Chesapeake are looking to get exposure to international LNG markets.
• 
  
• Market observers expect demand from Asia to start climbing, now that prices are off their peak from last summer.

Over the course of just a few years, the United States became one of the top three exporters of liquefied natural gas. Last year, it was the biggest supplier of LNG to Europe. This was made possible by a handful of companies that invested billions in liquefaction plants along the Gulf Coast, with another handful coming in the next couple of years. But competition is intensifying.

Energy Intelligence reported this month that U.S. gas producers are getting increasingly interested in LNG exports. The report cited the chief executive of Devon Energy as saying the company was looking into diversifying with LNG exports to get some exposure to international markets.

"We're not going to be big LNG players like Cheniere or Freeport or anything like that," Rick Muncrief said at the NAPE conference in Houston last week. "I mean, from our perspective, it's how can we get some exposure in international markets and help our allies around the world. We do the same thing with oil."

The decision makes perfect sense. Demand for liquefied natural gas globally is on the rise, and strongly, after Europe joined the LNG party. Even though the EU's emission-cutting plans discourage European buyers from securing long-term LNG import deals, which U.S. producers find to be a problem, U.S. LNG will continue to flow to Europe.

At the same time, market observers expect demand from Asia to start climbing, too, now that prices are off their peak from last summer. Indeed, Bangladesh recently bought an LNG cargo after months of abstaining from such imports because of prices. It also plans to buy several more if prices remain where they are. And if more U.S. gas producers enter the LNG space, chances are that prices will get a ceiling once their facilities start operating.

Earlier this year, BloombergNEF predicted that U.S. LNG export capacity would soar to 169 million tons by 2027. That would make the United States the world's biggest LNG exporter, far ahead of Qatar, which plans to expand its capacity to 110 million tons by 2026.

"The US is in the lead because of its flexible contract terms and the competitive landscape of project developers," said BloombergNEF global LNG specialist Michael Yip. "Its aggressive but transparent pricing and reliability as an LNG supplier has made it easy for these new projects to secure contracts."

That's just the big guns in LNG exports. Add to that the smaller gas producers that are diversifying into LNG exports, and the potential future dominance of the U.S. on international LNG markets becomes even more pronounced. As long as the gas flows as it does now.

Earlier this year, two gas CEOs warned there might be a slowdown in drilling activity because of prices. At such prices, profitability is hard to come by, Adam Rozencwajg, the natural resources investor from Goehring & Rozencwajg, told Oilprice. And that may put a lid on the supply of gas.

"Companies with remaining core Tier 1 acreage can make a return at today's gas price—those are few and far between," Rozencwajg said. "More importantly, companies have come to realize just how difficult it is to maintain high-quality drilling inventory. In light of that, they are reluctant to increase activity and pull forward the inevitable moment they'll be short of high-quality drilling prospects."

What this means is that sooner or later, prices will go up. This will make LNG exports even more lucrative. And shareholders who mind increased drilling might change their minds.

"Most of our investors get it and they think it's a good idea," Chesapeake's Nick Dell'Osso, one of those CEOs who warned about lower drilling activity this year said at NAPE.

"At the end of the day, the way I describe it to our investors, is this is not arbitrage capture. This is diversification of market. The US gas is being sold in international markets. We should have exposure to that. That's diversification of your product sales points and ultimately like any other portfolio diversification."

Indeed, diversification has proven to be the optimal strategy both for producers and for consumers, as any European Union official is sure to tell you if you ask them.

By Irina Slav for Oilprice.com

Researchers Look To Turn Decommissioned Mines Into Batteries

By Brian Westenhaus - Feb 09, 2023

• Researchers are studying a new energy storage technique using decommissioned mines. 
• The technique called Underground Gravity Energy Storage aims to turn abandoned mines into long-term energy storage solutions.
• The deeper and broader the mineshaft, the more power can be extracted from the plant, and the larger the mine, the higher the plant’s energy storage capacity.

The International Institute for Applied Systems Analysis (IIASA) has offered a new technique called Underground Gravity Energy Storage that turns decommissioned mines into long-term energy storage solutions.

Renewable energy sources are central to the energy transition toward a more sustainable future. However, as sources like sunshine and wind are inherently variable and inconsistent, finding ways to store energy in an accessible and efficient way is crucial. While there are many effective solutions for daily energy storage, the most common being batteries, a cost-effective long-term solution is still lacking.

In a new IIASA-led study, an international team of researchers developed a novel way to store energy by transporting sand into abandoned underground mines. The new technique called Underground Gravity Energy Storage (UGES) proposes an effective long-term energy storage solution while also making use of now-defunct mining sites, which likely number in the millions globally. The study paper ‘Underground Gravity Energy Storage: A Solution for Long-Term Energy Storage.’ has been published in the journal Energies.

Underground Gravity Energy Storage system: A schematic of different system sections. Image Credit: © Hunt et al. International Institute for Applied Systems Analysis. More information and images at the study paper link.

UGES generates electricity when the price is high by lowering sand into an underground mine and converting the potential energy of the sand into electricity via regenerative braking and then lifting the sand from the mine to an upper reservoir using electric motors to store energy when electricity is cheap. The main components of UGES are the shaft, motor/generator, upper and lower storage sites, and mining equipment. The deeper and broader the mineshaft, the more power can be extracted from the plant, and the larger the mine, the higher the plant’s energy storage capacity.

Julian Hunt, a researcher in the IIASA Energy, Climate, and Environment Program and the lead author of the study explained, “When a mine closes, it lays off thousands of workers. This devastates communities that rely only on the mine for their economic output. UGES would create a few vacancies as the mine would provide energy storage services after it stops operations. Mines already have the basic infrastructure and are connected to the power grid, which significantly reduces the cost and facilitates the implementation of UGES plants.”

Other energy storage methods, like batteries, lose energy via self-discharge over long periods. The energy storage medium of UGES is sand, meaning that there is no energy lost to self-discharge, enabling ultra-long time energy storage ranging from weeks to several years.

The investment costs of UGES are about 1 to 10 USD/kWh and power capacity costs of 2,000 USD/kW. The technology is estimated to have a global potential of 7 to 70 TWh, with most of this potential concentrated in China, India, Russia, and the USA.

Behnam Zakeri, study coauthor and a researcher in the IIASA Energy, Climate, and Environment Program offered the conclusion, “To decarbonize the economy, we need to rethink the energy system based on innovative solutions using existing resources. Turning abandoned mines into energy storage is one example of many solutions that exist around us, and we only need to change the way we deploy them.”

***

This might be the furthest reach for the gravity method of storing electricity. Pumping water back above the generators has some merit as well. One might note that the mechanical losses are mentioned in the study paper for this idea, but hard to locate for the water method.

So far engineering hasn’t really started in on innovations to gain efficiency. That is a area in this field in dire need of attention.

The production costs are not covered in the press release. For those curious the study paper (Not behind a paywall at posting date.) offers much more information.

Both this type of idea and the hydro idea have yet to see a concerted effort in application. The tech isn’t at a high level and the “interesting” perspective isn’t terribly interesting.

This is simple, doable and fairly practical. One wonders why it isn’t being done. Oh, its not really needed, except where politics have cut the power supply. Good luck getting those places motivated to store some power at low cost. This is way cheaper than buying batteries even though the operation losses are noteworthy. Then getting personnel might be quite a problem as well.

It good to know it can be done. Maybe it will when politics pay more attention to practical needs than special interests’ hysterics and cash contributions.

By Brian Westenhaus via New Energy and Fuel

Permian Oil Production Could Surge By 500,000 Bpd This Year

By Alex Kimani - Feb 09, 2023

• The Permian Basin struggled to return to 2019 production levels last year, but a surprise spike in output in January pushed it over the threshold.
• 
  
• Plains All American Pipeline is predicting that Permian production could soar by 500,000 bpd this year.
• 
  
• Other U.S. basins have not seen the uptick in activity just yet, but outlook remains particularly bullish.

Houston, Texas-based pipeline company Plains All American Pipeline, L.P. (NASDAQ: PAA) has predicted that Permian crude output will surge by 500,000 barrels per day in the current year. The company revealed this during its latest earnings call whereby it reported that it’s been recording higher utilization for long-haul systems for its Cactus pipelines in Texas. PAA reported Q4 2022 revenue of $12.95 billion versus $12.98 billion a year earlier; unfortunately, fourth-quarter net income shrunk 42% to $263 million while net cash also contracted 47% to $335 million. 

Although U.S. production in the oil-and-gas-rich Permian Basin grew in 2022, it remained below 2019 levels for most of the year. But later in the year, the Permian suddenly came alive with production last month climbing 12% to a record 5.6 mb/d. Unfortunately, the same cannot be said of other U.S. oil fields, a big reason why overall U.S.  production has only been inching up slowly.

That said, the U.S. oil production outlook for the current year is generally bullish. The Energy Information Administration (EIA) has released its latest Short Term Energy Outlook (STEO) wherein it sees crude production clocking in at 12.49 and 12.65 million barrels of crude per day in 2023 and 2024, respectively, up from 11.90 mb/d in 2022. 

Commodity analysts at Standard Chartered are also bullish, and have predicted that U.S. crude supply and shale oil supply have both yet to peak. 

According to StanChart, total U.S. oil liquids supply surpassed the pre-pandemic high in July, with higher output of natural gas liquids (NGLs) and other liquids offsetting lower crude oil output. The analysts have further projected that U.S. crude output will exceed 13 mb/d by June 2024. StanChart has, however, not provided any insights into how they arrived at this decidedly bullish projection for the U.S. crude production.

Source: Standard Chartered

Other indicators are also bullish. 

According to Wood Mackenzie’s ‘Oil and gas exploration 2022 edition, exploration well numbers in 2022 were less than half the numbers during pre-pandemic years, yet the total volume of 20 billion barrels of oil equivalent matched was comparable to the average in the 2013 – 2019 period, creating at least $S33 billion of value. Another interesting development: Liquids accounted for 60% of new discoveries, marking just the third time in two decades that liquids made up the majority of new discoveries.

Previously, Rystad Energy had warned that proven oil and gas reserves by the Big Oil  companies namely ExxonMobil (NYSE: XOM), BP Plc. (NYSE: BP), Shell Plc (NYSE: SHEL), Chevron (NYSE: CVX) were rapidly falling due to produced volumes not being fully replaced with new discoveries. 

According to the energy expert, only TotalEnergies ( NYSE: TTE), and Eni S.p.A (NYSE: E) avoided reductions in proven reserves over the past decade. ExxonMobil, whose proven reserves shrank by 7 billion boe in 2020, or 30%, from 2019 levels, was the worst hit after major reductions in Canadian oil sands and US shale gas properties. Shell, meanwhile, saw its proven reserves fall by 20% to 9 billion boe; Chevron lost 2 billion boe of proven reserves due to impairment charges while BP lost 1 boe.  

Luckily, the latest exploration data suggests that the decline in reserves is likely to be arrested sooner rather than later.

U.S. Ramps Up Gas Output

Whereas U.S. crude production is expected to grow significantly over the next two years, the natural gas and LNG markets are where the real action will be. 

The EIA has predicted that the U.S. will export 11.8 and 12.6 billion cubic feet of LNG per day in 2023 and 2024, respectively, up from 10.6 billion cubic feet per day in 2022. However, natural gas prices are expected to remain muted, averaging $3.40 and 4.04/MMBtu in 2023 and 2024, down from $6.42/MMBtu in 2022.

Last year, the United States overtook Qatar and Australia to become the world’s top LNG exporter, and appears set to cement its lead. Once again, the Permian will play a pivotal role, with the basin preparing to unleash a torrent of gas and gas projects to meet exploding LNG and nat. gas demand

Also last year, a consortium of oil and natural gas firms namely WhiteWater Midstream LLC, EnLink Midstream (NYSE:ENLC), Devon Energy Corp. (NYSE:DVN) and MPLX LP (NYSE:MXLP) announced that they had reached a final investment decision (FID) to move forward with the construction of the Matterhorn Express Pipeline after having secured sufficient firm transportation agreements with shippers.

According to the press release, “The Matterhorn Express Pipeline has been designed to transport up to 2.5 billion cubic feet per day (Bcf/d) of natural gas through approximately 490 miles of 42-inch pipeline from Waha, Texas, to the Katy area near Houston, Texas. Supply for the Matterhorn Express Pipeline will be sourced from multiple upstream connections in the Permian Basin, including direct connections to processing facilities in the Midland Basin through an approximately 75-mile lateral, as well as a direct connection to the 3.2 Bcf/d Agua Blanca Pipeline, a joint venture between WhiteWater and MPLX.”

Matterhorn is expected to be in service in the second half of 2024, pending the regulatory approvals. 

WhiteWater CEO Christer Rundlof touted the company’s partnership with the three pipeline companies in developing “incremental gas transportation out of the Permian Basin as production continues to grow in West Texas.” Rundlof says Matterhorn will provide “premium market access with superior flexibility for Permian Basin shippers while playing a critical role in minimizing flared volumes.”

Matterhorn joins a growing list of pipeline projects designed to capture growing volumes of Permian supply to send to downstream markets. Earlier, WhiteWater revealed plans to expand the Whistler Pipeline’s capacity by about 0.5 Bcf/d, to 2.5 Bcf/d, with three new compressor stations. 

Meanwhile, KMI has already completed a binding open season for the Permian Highway Pipeline (PHP), with a foundation shipper already in place for half of the planned 650 MMcf/d expansion capacity.

By Alex Kimani for Oilprice.com 

NATURAL CAPITALI$M

https://rmi.org/wp-content/uploads/2017/06/RMI_Winning_the_Oil_Endgame_Book_2005.pdf

Winning the Oil Endgame - RMI 

Hydrogen fuel cells are at last becoming a viable alternative....One day, these new energy technologies will toss the OPEC cartel in the dustbin of history. 

Vale Indonesia breaks ground on $2.5 billion ferronickel smelter

Reuters | February 10, 2023 |

Image courtesy of PT Vale Indonesia.

Nickel miner PT Vale Indonesia broke ground on a 37.5 trillion rupiah ($2.48 billion) ferronickel smelter Sulawesi island on Friday, an Indonesian senior minister said.


The Bahodopi project will produce ferronickel with 73,000 to 80,000 tonnes of nickel content per year, Vale has said.

“I hope this will be followed by the laying of the next stones. God willing, it can be completed in 2.5 years,” Coordinating Minister of Economic Affairs Airlangga Hartarto said in a statement.

The smelter, which would employ up to 15,000 workers during construction phase is a joint project between Vale and its partners, China’s Shandong Xinhai Technology Co. Ltd and a unit of China Baowu Steel Group Corp. Ltd.

In Pomalaa, another area of Sulawesi island, Vale and its partners are developing a plant to produce 120,000 tonnes per year of mixed hydroxide precipitate, a material extracted from nickel ore that is used in batteries for electric vehicles.

($1 = 15,130.0000 rupiah)

(By Bernadette Christina; Editing by Jason Neely)

SO MUCH FOR Va. YOUNGKIN'S CHINA TANTRUM

Ford plans to build EV battery plant in Michigan with Chinese partner

Bloomberg News | February 12, 2023 

Credit: CATL

Ford Motor Co. and Contemporary Amperex Technology Co. Ltd. plan to build a battery plant in Michigan, according to people familiar with the matter, capping a months-long search that became mired in geopolitical tensions between the US and China.


The multibillion-dollar facility, to be located about 100 miles west of Detroit, is expected to create about 2,500 jobs, said the people, who asked not to be identified because the plans aren’t yet public. The agreement could be announced as soon as next week, they said.

Ford is moving ahead with the project despite uncertainty around how the US Treasury Department will interpret requirements in President Joe Biden’s signature climate package, the Inflation Reduction Act. The law is designed to withhold consumer tax credits for EVs made with a certain amount of China-linked materials in their batteries.

“We’ve said that we’re exploring batteries based on CATL’s technology for Ford vehicles and that we plan to localize” production in North America, Ford said in an emailed statement. The company didn’t specify whether it had picked a location or determined other details of the project’s scope.

CATL didn’t immediately respond to an emailed request for comment outside business hours in China.

Ford shares fell 5.6% in New York Friday to close at $12.73. They are up 9.5% this year.

The US carmaker and China’s CATL, the world’s biggest maker of batteries for electric vehicles, have been weighing a novel ownership structure under which Ford would own 100% of the plant, including the building and the infrastructure, Bloomberg reported last year. Ford workers would build the batteries, while CATL owns the technology to create the cells, according to the people familiar.

Such an arrangement may allow the facility to qualify for lucrative production tax credits under the Inflation Reduction Act while requiring no direct financial investment from CATL.

The site for the new factory, near the small town of Marshall in southwestern Michigan, has room to grow, potentially bringing more jobs and a larger investment, according to the people familiar.

The companies also considered Virginia as a possible home for the plant, Bloomberg has previously reported. That option was nixed when Virginia Governor Glenn Youngkin, a potential Republican contender for the White House in 2024, yanked his state out of the competition, calling CATL a “Trojan horse” for China that would undermine policy efforts to strengthen the US auto industry. Macaulay Porter, press secretary for Youngkin, declined to comment Friday.

Michigan Governor Gretchen Whitmer has staked out a different position from her counterpart, calling Youngkin’s move “a political determination,” the Detroit News reported last month. Whitmer has been fighting to attract more EV battery investment after losing out to Tennessee and Kentucky on Ford’s historic $11.4 billion Blue Oval City investment in 2021.

Ford announced in July it will begin using less expensive lithium iron phosphate battery packs from CATL on its Mustang Mach-E models this year and F-150 Lightning pickups in early 2024, which will boost output of those popular vehicles. Ford has said it has a plan to source 40 gigawatt hours of those batteries annually in North America in 2026, but would initially import them from China.

Ford is investing $50 billion broadly to develop and build electric vehicles and plans to produce 2 million a year by the end of 2026. The Dearborn, Michigan-based automaker was the No. 2 seller of EVs in the US last year, well behind Tesla Inc., which controls almost two-thirds of the American market.

(By Gabrielle Coppola, Keith Naughton and Ed Ludlow, with assistance from Craig Torres)

https://www.autonews.com/manufacturing/virginia-shuns-ford-plant-over-china-ties

Va. turns down Ford plant over China ties - Automotive News 

Jan 22, 2023 ... Virginia Gov. Glenn Youngkin has a message for as it reportedly searches for a site to build a $3.5 billion battery plant that would create ...

CRIMINAL CAPITALI$M
Trafigura tells its banks they aren’t exposed to nickel fraud

Bloomberg News | February 10, 2023 | 

Trafigura’s Singapore office. Credit: Trafigura via Flickr

Trafigura Group is briefing lenders that none of its banks have direct exposure to the nickel deals at the center of what the commodity trader is calling a systematic fraud perpetrated against it.


Trafigura has recorded a $577 million impairment after discovering that metal cargoes it bought didn’t contain the nickel they were supposed to, and has begun legal action against the companies involved, Bloomberg reported on Thursday.

The deals — which involved buying nickel in containers already on board ships, and then selling it on when the vessels reached their destination — were not financed by any letters of credit or other transactional financing from banks, according to people familiar with the matter.

Still, the saga serves as a reminder of the risks involved in financing commodities trading, which has a long and rich history of tricks and scams. In modern times, the industry’s continued dependence on physical documents that can be faked has made it particularly susceptible to fraud.

Trafigura is one of the largest among a group of mostly private companies responsible for buying, selling and shipping natural resources around the world. The industry is heavily reliant on bank credit to finance its activities: Trafigura had total credit lines of $73 billion at the end of its last financial year, with a network of about 140 banks around the world.

Traders use various different types of bank financing to fund their operations. In some types of transactional financing, banks guarantee individual payments or take security over individual cargoes, meaning they can be exposed to losses in cases of fraud.

Trafigura still expects its overall profit for the six months through March will be higher than the previous year even after the impairment, but the discovery of the fraud is an embarrassing setback for the company that has grown rapidly over the past decade to become a dominant force in trading both energy and metals.

(By Jack Farchy and Alfred Cang)

Trafigura’s nickel nemesis was already notorious in metal circles

Bloomberg News | February 11, 2023 |

Stock image.

When news broke that Trafigura Group faces more than half a billion dollars in losses from what it described as a “systematic fraud,” the biggest surprise for many market insiders wasn’t the commodity trader’s missing nickel cargoes. It was that one of the industry’s largest players was still doing business with a man that others had long since backed away from.


Indian businessman Prateek Gupta and his companies, against whom Trafigura secured a $625 million freezing order this week, have a checkered history in the trading world.

Merchant Gunvor Group and trade finance fund TransAsia Private Capital Ltd. lost money in earlier dealings with Gupta’s companies, public filings show. Others, including banks and counterparties, became uncomfortable at times with the group’s trading activities, according to several people who either worked at the group or did business with it. Last year, India’s federal police announced it’s investigating allegations of fraud against Gupta himself.

Ian Milne, a former commodity trade finance executive at Rabobank and HSBC Holdings Plc who worked at TransAsia for two years in 2018 to 2020 trying to recover debts from Gupta’s companies, said he “had to rub my eyes a couple of times” when he saw the news this week.

“It’s very well known in the market that these guys have a highly dubious reputation,” Milne said in an interview. “Most people haven’t dealt with them for many years.”

Trafigura’s losses have shocked the commodity trading world, demonstrating that even one of the largest companies isn’t able to avoid the kind of blowups and risks that have plagued the industry in recent years, and raising questions about the whole sector’s risk management.

Bloomberg made multiple attempts by phone and email to reach Gupta and companies owned by, or otherwise linked to him for comment on Friday but did not receive any response.

Trafigura said that it began investigating after identifying a number of red flags.

“This was a systematic fraud perpetrated after a long and legitimate business relationship dating back to 2015 that involved misrepresentation and widespread falsification of primary and supporting documentation,” a spokeswoman said. “Any fraud is an opportunity to review and tighten systems and procedures and a thorough review is underway.”

Gupta was born in 1979 into a commodity trading family. His father Vijay was a steel trader who represented Brazilian and Spanish companies importing iron and steel products into India in the 1980s and 1990s, according to a company obituary. When he died in 2009, Prateek took over the running of the family company, Mumbai-based Ushdev International Ltd., with his mother Suman as chair. At its peak in the early 2010s, the company had a market capitalization of about $250 million.

In person, Gupta is charming and rarely flustered, say several people who’ve done business with him.

“He has a very laid-back style. Whatever the problem is, he’ll say it’s not really a problem, it’s all going to be solved,” said Milne, who now works for MonetaGo, which builds technology to help banks and others avoid trade-finance frauds.

Over the years, Ushdev branched out into developing wind power assets, but it still focused on metal trading. Gupta added entities in Singapore, Malaysia, Dubai, the UK and Switzerland, including TMT Metals and companies under the banner of UD Trading Group.

In a 2011 interview published by Indiainfoline.com, he described his business as India’s third-largest metal trading company and said it had been doubling in size over the previous years.

“The metal business is back to back business,” he said. “We don’t face any kind of downside.”

For some in the industry, the Gupta companies’ trading activity raised question marks, said the people familiar with the matter. The companies would sometimes buy and sell large volumes of metal for little apparent commercial purpose, some of the people said.

‘Carousel fraud’

Jonas Rey, chief executive officer of Athena Intelligence, a corporate intelligence company in Geneva that provides support to trade finance entities, said he investigated entities including TMT on behalf of several clients.

“We provided intel to multiple clients on TMT’s involvement in what we called a carousel fraud,” he said. “You have one cargo in the middle, you create 10 companies around it, and they sell the cargo to one another. One cargo gets financed 10 times. It’s like a financial musical chair. Eventually everything comes crashing down.”

Several companies came to regret their dealings with Gupta. Gunvor was left with exposure to Ushdev in the tens of millions of dollars when it got into financial trouble, according to company filings and people familiar with the matter. The exposure only led to a relatively small loss for Gunvor as it claimed on its insurance. Still, it was a blow that coincided with Gunvor’s decision to close its metal-trading desk in 2016.

A list of creditors published when Ushdev went into insolvency in 2018 showed that Gunvor was its largest non-bank creditor with an exposure of 3 billion rupees (about $45 million at the time).

A Gunvor spokesman declined to comment.

TransAsia is still embroiled in legal disputes with Gupta companies over alleged unpaid debts linked to its financing of trade in metals including copper. In one instance that’s been made public in Singapore courts, the trade finance fund claims that Gupta’s UD Trading Group Holding owes it $63 million. UD Trading has in the past said it doesn’t believe it’s liable for the debt.

Last July, the Central Bureau of Investigation – India’s equivalent of the FBI – said it had opened an investigation into Prateek and Suman Gupta, as well as Ushdev, over alleged fraud after a complaint made by State Bank of India. The CBI said in a press release it had conducted searches in three locations which had led to the “recovery of incriminating documents/articles.”

For Trafigura, the saga will raise difficult questions over how it vets its business partners.

“The postmortem will probably be ruthless internally,” said Jean-Francois Lambert, a consultant and former trade finance banker. “Traders and risk management will be challenged.”

(By Jack Farchy and Archie Hunter, with assistance from Alfred Cang, Swansy Afonso, Shruti Srivastava, Joe Deaux and Mark Burton)

USE VALUE VS. EXCHANGE VALUE

Comparing the metal values of the world’s biggest sports trophies

Jackson Chen | February 10, 2023 

The famed Vince Lombardi trophy. Credit: Tiffany & Co.

The ultimate prize of any major sporting event — trophies — are widely regarded as the biggest (to some, maybe the only) barometer of success for an individual athlete or collective team.


This Sunday, all eyes will be on the Vince Lombardi Trophy, which is reproduced annually and awarded to the Super Bowl winner of each NFL season.

Despite its global recognition and prestige in North American sports, the Vince Lombardi Trophy may not be worth as much as we’d think in terms of melted value.

Produced by Tiffany & Co., the trophy uses 3.2 kg of solid sterling silver, equating to around $2,000 based on recent metals prices, according to analysis by Refinitiv Metals.

However, this value is meager compared to some of the other well-recognized trophies that some of the world’s greatest athletes have laid their hands on.

“While its widely recognized that the value of a trophy is derived from what it symbolizes in terms of achievement and success, those that follow the NFL may be surprised to learn of its relatively low melt-value compared to other iconic trophies,” said Federico Gay, analyst at Refinitiv Metals.

As some might expect, the “the most valuable trophy” title belongs to the world’s biggest sporting event: the FIFA World Cup. This trophy is made of 6.175 kg of 18-carat gold, which means it contains 4.93 kg of pure gold worth some $260,000 at recent prices, far exceeding any other trophy, based on Refinitiv calculations.

The UEFA Champions League, perhaps the most prestigious competition in club football (or soccer in North American parlance), awards its winner a trophy that contains 7.5 kg of sterling silver. This means the “Ol’ Big Ears” (the nickname for the Champions League trophy) is actually worth much less than its equivalent for the Europa League, a lower-tier competition.

Shifting back to American sports, the most expensive trophy in the US is awarded at the Indianapolis 500 car race, which is the largest single-day sporting event in the world. The Borg-Warner Trophy is made from 69 kg of pure silver sterling, with a melt value of over $40,537.

The next valuable US trophy is the Woodlawn Vase, which is awarded to the winning owner of the Preakness stakes at Pimlico Racecourse. This trophy is made of solid sterling silver weighing over 11 kg, with a melt value of over $10,633.

(Click here for a detailed analysis by Refinitiv Metals Research.)

Teck fined over $11 million for failing to build water treatment facility in British Columbia

Staff Writer | February 10, 2023 | 

Teck’s Fording River metallurgical coal operation in B.C. Credit: Teck Resources

The government of British Columbia has fined Teck Coal Limited C$15.4 million for exceeding pollution thresholds and failing to build an active water treatment facility on time at its Fording River Operations in southeastern BC.


The Ministry of Environment and Climate Change Strategy had ordered Teck Coal to design, construct and operate the active water treatment facilities (AWTF) or alternative water treatment technology as approved by the director, to be operational by the December 2018 deadline in its permit.

“The permittee must employ best achievable technology in the development of these treatment facilities. Phosphorus treatment must be included if necessary, to ensure BC Water Quality Guidelines for chlorophyll -a for freshwater aquatic life in streams is met,” the Ministry said.

“The permittee must ensure that all necessary active water treatment works or alternative water quality mitigation works are designed, constructed and operated insufficient time and at sufficient capacity to meet targets and timeframes for water quality consistent with the ABMP,” it noted.

This is the latest environmental infraction for Canada’s largest diversified miner at its operations in the Province.

Last month, Teck was fined C$2.2million ($1.6m) for an acid spill into Columbia River at its Trail smelter operations. A Rossland provincial court judge made the order after the company pleaded guilty to two charges laid under the federal Fisheries Act and one charge laid under the provincial Environmental Management Act. The charges resulted from an effluent release in February 2019.

ECCC enforcement officers investigated and determined the discharge of approximately 2.5 million litres of effluent into the river just north of the US border resulted from numerous operational errors.

In March 2021, Teck Coal Limited resolved charges under the Fisheries Act relating to 2012 discharges of selenium and calcite to a mine settling pond and to the Fording River from its Fording River and Greenhills steelmaking coal operations in the Elk Valley region of British Columbia. Teck Coal paid a penalty of C$30 million for each offence, totalling C$60 million.