It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Tuesday, March 14, 2023
Port of Oakland Requires Tenant's Zero-Emission Cargo Handling Plans
Oakland is requiring tenants to develop a plan this year for converting to zero-emission cargo handling (Port of Oakland file photo)
To encourage the reduction of emissions for onshore operations and comply with increasing state regulations, the Port of Oakland, California approved an environmental ordinance requiring operators to develop zero-emission plans. The Oakland Board of Port Commissioners at their meeting on March 9 voted to approve the ordinary requiring tenants that operate cargo handling equipment to create a plan for converting to zero emissions.
“Our goal is to grow the port with operations, equipment, and vehicles fueled by energy that does not emit harmful pollutants into the air,” said Port of Oakland Executive Director Danny Wan. “The port’s environmental ordinance goes above and beyond state regulations and supports our path to zero emissions.”
Port of Oakland tenants will have until December 31, 2023, to create a cargo-handling equipment conversion plan. No deadline was announced for when they would be required to complete the transition, but the commission said as a public agency and tidelands trustee, they felt they have responsibilities to address public and worker health and safety.
“We recognize there are technical and financial challenges to make major changes in operations,” said Port of Oakland Maritime Director Bryan Brandes. “We will continue to partner with our maritime tenants to help them achieve success on getting to zero emissions.”
The ordinance will allow the port to work collaboratively with its business partners to support an efficient and timely transition to zero emissions. Port environmental staff will review the plans annually for accountability, transparency, and partnering in support of tenants as they implement their plans.
Since the first adoption of the Environmental Ordinance in 2015, federal, state, and local environmental liability laws and toxic clean-up standards have continued to evolve according to the commission. The updated ordinance they said reflects the adoption of new laws and regulations and new or updated plans adopted by the port board.
California requires its public entities to develop plans. The board previously approved the Port of Oakland Seaport Air Quality 2020 and Beyond Plan. They look to coordinate the tenants’ activities with the port’s master plan.
California has adopted increasingly stringent standards over the past few years for the maritime industry. They are beginning efforts that will phase in requiring nearly all ocean-going vessels to eliminate on-dock emissions. This expands existing ordinances requiring either the use of filtering technologies or shore power. Last year, the California Air Resources Board (CARB) also approved updates to its Commercial Harbor Craft Regulation designed to reduce diesel soot and nitrogen oxides emission from commercial harbor craft including tugboats and ferries. Nearly all commercial harbor crafts as well as the fishing industry will begin to face requirements to accelerate the move to Tier 2 and 3 engines for select categories while the new regulations expand the coverage, requiring zero-emission options where feasible, and cleaner combustion Tier 3 and 4 engines on all other vessels. In addition, they will require the use of diesel particulate filters.
Russia Finds Plenty of Tonnage for Crude and Refined Product Exports
Russia appears to be having little difficulty finding the tonnage it needs to support its petroleum exports, despite restrictive Western sanctions and price limits. In both crude and clean tanker segments, Russian energy exporters are loading and shipping as much as ever.
According to tanker shipbroker Gibson, Russia has been "relatively successful" in finding vessels to carry its refined products after the EU import ban in February. Thanks in part to "notable changes in ownership of the product tanker fleet" - for example, the shifting of Sovcomflot's foreign-flag fleet to a Dubai-based holding company - over 120 MRs and handysize tankers have been involved in Russian refined product exports since the ban took effect, along with at least 21 LR2s, according to Gibson.
Thanks to the willingness of these shipowners, with some help from a limited number of Western shipping service providers, Russia exported more clean products in February than its average volume last year, before the ban. Gibson is aware of more clean tankers heading for Russian load ports in the coming week.
Russian crude oil exports are about as voluminous as ever, thanks to booming sales to China and India. China is able to import some Russian crude oil by cross-border pipeline, but a large share comes by sea, including shipments from the Russian Pacific oil terminal at Kozmino. India is absorbing a massive share of the oil that Russia used to sell into the EU market - to the tune of some two million barrels per day, according to Kpler.
"In a sense, it's not much of a change, because it's only a reshuffling of what was flowing where initially. Europe was buying this. Now India is buying this," Kpler analyst Viktor Katona told Insider.
About half of the flow is carried aboard tankers tied either to Russia or to the "dark fleet" of gray-market tonnage. The growth of the lucrative "dark" segment has reached the point that fully one fifth of the world's 900 VLCCs are officially "up to no good," according TankerTrackers.com, a leading authority in the art of uncloaking tanker movements. Based on AIS tracking, satellite imaging and on-the-ground photography, the consultancy has identified 174 VLCCs that are engaged in carrying Russian, Venezuelan or Iranian oil in spite of U.S. and EU sanctions measures.
For the other half of Russia's export volume, sanctions-compliant Western tonnage provides much of the rest of the needed capacity. This is allowable under EU rules, so long as the oil is priced under $60 per barrel. - but the extent of compliance or non-compliance is challenging, since the price cap has no reporting requirements. A recent study led by researchers at Columbia University called for audits to determine whether Western insurers, shipowners, brokers and others are sticking with the rules, especially as market data indicates that the G7 price cap is routinely exceeded.
Squid Fishing on the High Seas Has Exploded Since 2017
Global squid fishery shows how important it is to strengthen regional management of high seas resources
Squid jiggers use powerful lamps to attract squid to the surface. Simon Ager, Author provided
Global squid fishing increased by 68% between 2017 and 2020, according to our international analysis, prompting concerns that much of the international fishing fleet is sidestepping necessary conservation and management.
Our study, carried out with colleagues in Australia, Japan, the United States, Chile and Canada, and published today in Science Advances, reveals that almost all of the increase in squid fishing has occurred in unregulated areas, with 86% of squid fishing now occurring in places with little or no scrutiny of catch sizes.
Unregulated fishing poses a significant challenge to fishery sustainability and raises substantial equity concerns. While attention has tended to focus on illegal fishing, the growth in legal but unregulated fishing may pose an even bigger threat, particularly to species such as squid, whose fisheries can cover entire oceans.
To estimate the scale of global squid fishing, we analysed satellite imagery and vessel tracking data to see how many vessels are fishing for squid, and where and how often they operate.
Squid fishing vessels are typically outfitted with powerful lamps to attract squid to the surface. These lamps are so powerful that they are visible from space. This means we can use satellite data to spot these lights at night, along with data from the ships’ Automatic Identification System (AIS), which allows authorities to monitor the location and course of registered vessels.
Using this data, we estimate that the amount of light-luring vessel effort increased from an estimated 149,000 vessel days in 2017, to 251,000 vessel days in 2020. Of these, 61-63% were by vessels not broadcasting their AIS, and thus only visible by the loom from their lamps. This light-luring vessel effort represents an estimated total of 801,000 vessel days over the period 2017–20.
Finally, we correlated these data with national and regional management bodies, and determine how much of this activity is unregulated.
A complex problem
Regulation and management of globalised squid fisheries is complex, because this fishing takes place both in waters that are under national jurisdiction and on the high seas. Consequently, cooperation is fundamental to ensure fisheries are regulated at sustainable levels and avoid gaps or loopholes.
Regional fisheries management organisations have been established through international treaties to provide the framework for such cooperation, and to regulate so-called “transboundary” fisheries. However, out of 17 such organisations in existence, only two – the North Pacific Fisheries Commission and the South Pacific Fisheries Management Organisation – have dealt with squid fisheries. This means there are still large gaps in the Indian and Atlantic oceans.
Furthermore, it is not enough to create a regional fisheries management organisations; parties must also ensure the organisation actually adopts regulations. The United Nations’ International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing defines unregulated fishing (among other things) as that which occurs “in areas or for fish stocks in relation to which there are no applicable conservation or management measures”. Regional fisheries management organisations must do more than simply exist or adopt general measures if their fisheries are to be considered regulated.
What we found
Our analysis defines “regulated” fisheries as those within the exclusive economic zones of coastal countries, or within regional fisheries management organisations that have implemented specific conservation and management measures for squid stocks. In contrast, we define “unregulated” fisheries as those on the high seas where there is no such organisation in place, or where the relevant organisation has failed to adopt regulations pertaining specifically to squid stocks.
Using satellite imagery, vessel tracking, and data monitoring, our study found that globalised light-luring squid fishing fleets are truly global in scope, fishing across multiple oceans within a given year, moving freely between regulated and unregulated spaces, and catching vast amounts of squid with little or no oversight. Often, there is no requirement to report their catches to anyone other than their flag nation, with little or no independent verification.
Globalized squid fishing vessel connectivity. The number and size of circles corresponds to the vessels that fished in each ocean region (NW Pacific Ocean- purple; SE Pacific Ocean- teal; SW Atlantic Ocean- green; NW Indian Ocean- pink). The width of white connecting lines and numbers correspond to the vessels that were observed in both regions connected. Citation forthcoming
Unregulated spaces are often directly adjacent to regulated ones, and different fleets often target the same fisheries. This creates equity concerns for coastal communities that rely on species targeted by large industrial fleets, and for the governments of developing nations that depend on revenue from stocks that move between regulated and unregulated areas.
Furthermore, many of the fishing vessels carrying out unregulated fishing stay at sea for exceptionally long periods (months to years), often refuelling and offloading their catches to other vessels while still at sea, and thus avoiding the oversight that accompanies port calls.
Like all activities that draw on global resources, fishing on transboundary stocks should be fully regulated. Yet the regional bodies with the competence to adopt management measures are often restrained by distant water fishing nations that stall or oppose conservation and management measures.
The global squid fishery shows how important it is to strengthen regional management of high seas resources and to continue international calls for states and regional bodies to take this challenge seriously. These fisheries are ultimately shared by us all, yet few receive any benefit, and nearby countries’ own fish stocks are sometimes unfairly depleted.
Furthermore, the trans-oceanic nature of these fisheries highlights the crucial importance of comprehensive data-sharing agreements between regional fisheries management organisations for improving understanding of the movements of these vessels, and quantifying their impacts on squid stocks.
Quentin Hanich is a Professor at University of Wollongong.
Katherine Seto is a Research Fellow at University of Wollongong.
Osvaldo Urrutia is an Associate professor at Pontificia Universidad Catolica de Valparaiso.
This article appears courtesy of The Conversation and may be found in its original form here.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
Trafigura CEO says tight metal supply threatens green transition
Looming supply shortages of several key metals like copper and lithium could threaten the global transition to clean energy, according to Trafigura CEO Jeremy Weir.
A dearth of battery metals including lithium and cobalt have underscored the challenges that automakers could face in boosting electric-vehicle output, while deficits in industrial metals like copper could become a problem without increased investment in new supply, the head of the commodities trading house told Bloomberg Television at CERAWeek by S&P Global in Houston. Trafigura — the world’s biggest copper trader — has been vocal in warning that higher prices will be needed to incentivize miners to bring new production online. But Weir also cautioned that protracted permitting processes could stymie new supply even if prices do move higher.
“It’s one of my biggest fears with this energy transition: Actually, can we transition, given the supply tightness?” he said. “We have to be more efficient in bringing things online.”
Getting to net zero could require almost $10 trillion of metals between now and 2050, according to BloombergNEF, with annual demand peaking at close to $450 billion in the mid-2030s. While steel and aluminum are expected to see the most demand growth in terms of absolute volume, copper is set to be the most valuable opportunity, with an estimated $3.4 trillion of the red metal needed to avert climate disaster.
The supply challenges extend beyond mining, and there are also risks that western economies will fall short in their efforts to boost local metals refining and processing, Weir said.
“Metal processing has been concentrated in China for the past three decades, and it now has to expand out of that footprint for many reasons,” Weir said. “The problem is there’s a long lead time for these things.”
(By Mark Burton and Alix Steel)
Europe loses another smelter as energy crisis leaves deep scars
Another European aluminum smelter is closing, in a fresh sign of the damage wrought by an energy crisis that’s hammered the region’s industrial economy and crimped supplies of critical raw materials.
While power prices have retreated sharply from last year’s peaks, Speira Gmbh will shut its Rheinwork plant in Germany this year due to challenges in the energy market, the company said Thursday. That follows a 50% cut in aluminum production announced in September as soaring power and gas prices plunged Europe’s energy-intensive metals industry into an existential crisis.
Some smelters have been ramping back up in recent weeks, but the Speira shutdown is the latest sign of the obstacles politicians face as they seek to prevent a further wave of deindustrialization. They are also looking to shore up local supplies of critical industrial raw materials as global supply chains become more fragile.
The European Commission will aim to produce at least 40% of its annual consumption of strategic raw materials by 2030, Bloomberg reported on Wednesday, citing draft legislation that’s due to be presented to politicians later this month.
The document didn’t detail the commodities it will target, but in 2020 the EU identified 30 strategically important raw materials, many of which play a critical role in renewable energy, electric vehicles, aerospace and defense. Bauxite — the mined ore that aluminum is derived from — was included in the list, although the metal itself wasn’t.
For decades, the global aluminum market has been plagued by oversupply, but events of the past few years — including the US-China trade war, the invasion of Ukraine and Europe’s energy crisis — have underscored the fragility of global supply chains. That’s highlighted the dangers of the West’s growing reliance on imported supplies from major producers such as China and Russia.
Aluminum is one of the most energy intensive metals to produce, and European production capacity has fallen by more than half since the start of the energy crisis. Many plants have dialed back production, but others including Norsk Hydro ASA’s Slovalco plant in Slovakia and Alcoa Corp.’s San Ciprian plant in Spain have stopped producing entirely.
Like those plants, the Speira smelter will be placed on long-term care and maintenance, and could reopen eventually if the economics improve, a spokesman for the company said by phone. Yet restarting a smelter is slow and costly, and some plants in the region that closed in prior downturns have never reopened.
In January, the European metals industry’s main lobbying group warned that further long-term financial support is needed to help the region keep control of raw materials that are critical to the green-energy transition. In addition to the ongoing threat posed by high energy prices, Europe is at risk of losing out to the US in attracting investment, due to the billions of dollars in subsidies available through President Joe Biden’s controversial Inflation Reduction Act, the group said.
Speira will now focus solely on recycling and processing aluminum into value-added products, it said. While the decision to close the smelter will affect about 300 employees, the company will deliver all contracted sales to its customers, replacing the curtailed production with external metal supplies.
(By Mark Burton)
Peru mining firms’ logistics at risk from extended protests, analyst says
Reuters | March 9, 2023 | Since leftist President Pedro Castillo took office, the number of social conflicts has increased. (Image courtesy of FrenteGuasu | Twitter.)
Mining companies operating in Peru face “material risk” amid extended protests and blockades in the world’s No. 2 copper-producing nation, Fitch Ratings said on Thursday, warning of possible lack of supplies and issues transporting ore to ports.
“We believe protests and blockades that extend beyond three months can pose a material risk to a mine’s operations, including logistics,” Fitch said in a report, highlighting uncertainty on when the conflicts will be resolved – particularly in areas with important copper deposits.
The South American nation has since December faced a political crisis driving extended protests and blockades which have left dozens dead, following the ouster of former leftist President Pedro Castillo, who had an important support base among impoverished areas of the southern Andean region.
Miners Buenaventura and Volcan, which operate only in Peru, could face especially high risk of disruption due to lack of supplies and problems transferring products to ports on the country’s Pacific coast, Fitch said.
However, companies with several commodity businesses and solid liquidity should be able to carry out shipments to the coast with limited difficulty, it said.
Earlier this week, Energy and Mines Minister Oscar Vera said the country’s key mining corridor was “practically unblocked,” and data early this month showed key copper mines cranking up activities again despite the uncertainty.
(By Marion Giraldo; Editing by Sarah Morland and Sandra Maler)
AUSTRALIA
Fortescue Metals to cut ‘few hundred’ jobs Reuters | March 10, 2023 | Ore processing facility at Iron Bridge. (Image courtesy of Fortescue Metals Group.)
Australia’s Fortescue Metals Group is cutting a “few hundred” jobs as part of its efforts to maintain cost position, a person familiar with the matter told Reuters on Friday.
Local media reported Fortescue, the world’s No.4 iron ore miner, had started laying off more than 100 workers as its ‘Iron Bridge’ magnetite project in the Pilbara region of Western Australia neared completion, calling it “business as usual”.
“Projects such as Iron Bridge are coming into production phase soon, while our work in Gabon is just kicking off. As this occurs project staffing naturally ebbs and flows,” the company said in an email response to Reuters.
The job cuts are significantly fewer than the 1,000 number local media had reported in February as part of a cost-cutting practice.
Fortescue, which is planning to develop a global green hydrogen business, had in mid-February, reported a drop in first-half profit due to higher operating costs that, it said, reflected significant demand for skilled labour demand across the sector.
The layoffs come at a time when major global miners have reported lower profits as iron ore prices slipped from elevated levels due to unprecedented lockdowns in China.
(By Rishav Chatterjee; Editing by Rashmi Aich and Savio D’Souza)
ArcWest shares jump on Freeport earn-in deal as majors eye British Columbia copper
Alicia Hiyate | March 10, 2023 | Todd Creek project in British Columbia. (Reference image by ArcWest Exploration).
Shares in junior explorer ArcWest Exploration (TSXV: AWX) jumped more than 80% in morning trading in Toronto after it announced an earn-in deal with Freeport-McMoRan (NYSE: FCX) on one of its copper-gold properties in BC’s Golden Triangle.
Under the agreement, Freeport will be able to earn up to 80% of ArcWest’s Todd Creek project which is next to Newcrest Mining’s (TSX: NCM; ASX: NCM) Brucejack mine. To earn an initial 51% interest, Freeport needs to fund C$20 million of work at ArcWest over five years, and make staged payments to the company totalling C$900,000. ArcWest will remain operator during this stage.
Once it earns its initial stake, Freeport can up its interest to 80% by funding C$30 million in work at Todd Creek over five years and making staged payments totalling C$750,000.
After Freeport has finalized its ownership level (whether at 51% or 80%), each party will be responsible for funding its proportionate share of work at Todd Creek.
ArcWest believes the project, which it says covers one of the fundamental north-south structural corridors in the Stikine terrane and is near multiple major projects and mines, could be an analogue to the Hod Maden gold-copper project in Turkey.
“ArcWest looks forward to advancing our Todd Creek project in partnership with Freeport, one of the world’s largest copper miners and a team with a track record of global copper-gold discoveries that have proceeded to mine development,” said Tyler Ruks, president and CEO of ArcWest, in a release.
“ArcWest’s Todd Creek project is host to one of the largest underexplored copper-gold systems in BC’s Golden Triangle, and Freeport’s endorsement of the project is a testament to its potential for hosting a world class copper-gold deposit.”
Ruks added that ArcWest is in discussions with other mining companies on potential earn-in agreements for its other copper-gold porphyry projects. The company has seven in BC.
ArcWest isn’t the only BC junior to attract the attention of copper majors recently.
Amarc Resources (TSXV: AHR), which already had a strategic exploration partnership with Freeport at its JOY project, also signed a deal with Sweden’s Boliden in November for its DUKE copper-gold district in the Babine region of BC.
ArcWest shares reached a new 52-week high of C$0.10, up 82% or C$0.045, at noon ET. The stock has traded between C$0.05 and C$0.10 over the last year and has a market cap of C$7.6 million.
Artemis Gold passes final regulatory hurdle to begin works at Blackwater mine
Staff Writer | March 9, 2023 Site of the Blackwater gold project in central B.C. (Image courtesy of Artemis Gold.)
Artemis Gold (TSXV: ARTG) has announced the approval of its BC Mines Act Permit for the Blackwater project in central British Columbia, which is the final step required to allow the company to begin major construction activities at the mine site with the expectation of an initial gold pour in the second half of 2024.
Located about 446 km northeast of Vancouver, the Blackwater project comprises the construction, operation and closure of an open-pit gold mine and ore processing facilities that will be developed in multiple stages.
“The approval of the BC Mines Act Permit is the culmination of a substantial amount of work completed by our team in collaboration with our First Nation partners and the provincial government,” Steven Dean, Artemis Gold CEO, said in a news release.
The Blackwater mine is estimated to be the largest gold mine development project in the Cariboo region of BC in more than a decade, supporting regional employment over multiple decades with the potential to be extended through further exploration.
In addition, the Blackwater mine “has been designed to have one of the smallest carbon footprints for an open pit gold project in the world, with a defined path forward to substantially reduce that footprint further and potentially achieve net zero carbon emissions through the integration of a zero-exhaust-emission haul fleet by 2029,” Dean said.
The mine will be connected to the BC Hydro grid, which is powered by hydroelectricity. This provides the foundation for Blackwater to be developed into one of the lowest greenhouse gas (GHG) emitting open pit mining operations in the world, according to Artemis. The company also invested in a fully electrified process plant with all diesel and propane components replaced with electric equipment.
Artemis is planning a 22-year mine life with open pit methods and using gravity and conventional cyanidation methods for gold recovery. Over that period, it is expected to produce an average of 339,000 oz. of gold per year. Life-of-mine capital costs are estimated at C$2.25 billion, beginning with C$645.2 million to be spent before production begins next year.
As part of the permitting process, Artemis said it also collaborated with the federal and provincial governments as well as First Nations communities on the development of environmental management plans related to caribou habitat offsetting, fish habitat offsetting, wetlands offsetting, and conservation and enhancement activities.
David Eby, Premier of British Columbia, also put out a statement on Thursday: “The Blackwater gold project will put lots of people to work and create a wide range of opportunities and benefits for local businesses, communities and First Nations while ensuring the highest standards of environmental protection, mitigation and sustainability.”
Josie Osborne, British Columbia’s Minister of Energy, Mines and Low Carbon Innovation, added: “British Columbians will benefit from hundreds of new jobs from this new mine, with both its construction and multiple decades of operation.”
An economic impact study completed by KPMG on the Blackwater project in November 2020 anticipates that it will create 457 direct full-time jobs per year over the operating life of the mine and with 825 direct full-time jobs per year created during the construction/expansion phases of mine development.
Additionally, the mine is expected to contribute C$13.2 billion ($9.5bn) to the provincial economy, over the life of the mine, including C$2.3 billion ($1.6bn) to provincial revenues, the report said.
CATL smashes profit estimate as EV sales soar Bloomberg News | March 10, 2023 |
Credit: CATL
China’s Contemporary Amperex Technology Co. Ltd. reported annual earnings that beat estimates on stronger demand for cleaner cars, underscoring its dominance as the world’s biggest maker of batteries for electric vehicles.
The Tesla Inc. supplier on Thursday reported net income for the 12 months ended Dec. 31 of 30.72 billion yuan ($4.4 billion), an increase of 92.9% from the previous year. That beat the median analyst estimate of 28.8 billion yuan, according to data compiled by Bloomberg, and was in line with CATL’s preliminary guidance in January for profit between 29.1 billion yuan to 31.5 billion yuan.
Revenue came in at 328.6 billion yuan, up 152% and in line with analysts’ forecasts. CATL’s core power battery business, which in 2021 accounted for the majority of the company’s sales, generated margins of 17.2%, matching market estimates. Shares in CATL surged as much as 3.3% Friday despite a broader EV rout sparked by a round of steep price cuts that have stirred worries about overcapacity.
CATL commanded a 37% share of the global market for EV batteries in 2022, testimony to the popularity of its cheaper-to-produce lithium-iron-phosphate (LFP) batteries. In joint second place, with 13.6% each, are South Korea’s LG Energy Solution Ltd. and China’s BYD Co., the Warren Buffett-backed company that also makes cars, according to SNE Research data.
The size and dominance of CATL — which recently sealed a deal to build a plant with Ford Motor Co. in the US — has caught the attention of Chinese President Xi Jinping, who in rare remarks offered at annual parliamentary meetings in Beijing earlier this week said he viewed its leading position with “joy and worry.”
CATL also reported a strong performance in its fast-growing energy storage segment, which generated revenue of 45 billion yuan, ahead of expectations. That’s an area of the business that billionaire Chairman Zeng Yuqun is taking a keener interest in, recently calling for stricter standards — a move that could benefit his firm at the expense of smaller rivals.
Based in Ningde, Fujian province, CATL is facing intensifying competition in the battery space. Those dynamics are in part being spurred by CATL itself, which reportedly has been offering discounts to some Chinese carmakers against the backdrop of tumbling prices for raw materials like lithium, where it has direct investments.
In comments to investors Friday, the battery maker clarified that recent rebates to some carmakers were aimed at sharing lithium mineral resources with long-term strategic clients.
What Bloomberg intelligence says:
CATL’s battery profitability can recover further in 2023 on falling materials costs and greater economies of scale. We expect CATL’s battery sales volume to surge another 40-50% after more than doubling last year, fueled by robust demand from EVs as China extends a zero-purchase tax after ending Covid-Zero.
– Steve Man and Joanna Chen, BI auto analysts
Citibank analysts led by Jack Shang, which maintains a buy rating on the stock, said CATL believed its competitive advantage versus peers were widening in comments during a post-earnings investor call. “We prefer battery leader CATL with strong pricing power and access to overseas customers,” said Shang in a note Friday.
Jefferies Financial Group Inc.’s Johnson Wan, which downgraded CATL, remained unimpressed with its battery business margins, and foresaw pressure ahead, he said in a note Friday.
Being the industry behemoth means CATL is particularly exposed to geopolitical risk, especially with the US seeking to limit reliance on Chinese companies in the EV supply chain and encouraging automakers to manufacture in North America.
CATL’s recent agreement with Ford to license its LFP battery technology for use in a new $3.5 billion EV battery plant that Ford will run and control in southwest Michigan has drawn scrutiny from Beijing, people familiar with the matter have told Bloomberg News, with officials concerned that competitive aspects of CATL’s technology could be given to or accessed by the American automaker.
Meanwhile, CATL is on a global expansion push, with 13 production bases around the world including in Germany and Hungary, according to its website, and five R&D centers. It’s mulling a Swiss GDR fundraise of up to $6 billion to fuel its many capital investments.
(By Danny Lee)
US Senator blasts Ford’s battery deal with China’s CATL Reuters | March 10, 2023 | West Virginia Senator Joe Manchin. Credit: Third Way Think Tank
US Senator Joe Manchin said on Friday he is “totally opposed” to allowing Chinese battery maker CATL to access US tax dollars that finance electric vehicle purchases as part of its partnership with Ford Motor Co.
The blunt statements from Manchin, who wrote the Inflation Reduction Act (IRA) in a bid to develop a domestic EV battery industry, come amid rising tension over how the landmark legislation is implemented and who can benefit.
Under the IRA, consumers can receive $7,500 in tax credits for purchasing an EV, although the new law also allows the rebate to be kept by the company involved if the vehicle is leased. A 12% royalty that is included in the Ford-CATL partnership would send $900 of the $7,500 tax credit to CATL, Manchin told the CERAWeek energy conference in Houston.
“I’ll be damned if I’m going to give them $900 out of $7,500, to let it go to China for basically a product we started,” said Manchin, a West Virginia Democrat who chairs the Senate Energy and Natural Resources Committee.
In response to Manchin’s comments, Ford defended the CATL deal and said it will own the US facility making the battery and no one else will get US tax dollars. “Making these batteries here at home is much better than continuing to rely exclusively on foreign imports, like other auto companies do,” said a company spokesperson.
CATL’s advanced and low-cost batteries could be reverse-engineered, Manchin said, arguing the technology may have originated in the United States. Manchin added he has talked extensively with Ford executives as well as Jon Huntsman, a member of Ford’s board of directors and former US ambassador to China, about the CATL deal.
“You’re telling me we don’t have the smart people and the technology, and we can’t get up to speed quick enough? That doesn’t make sense,” said Manchin, who did not specify what steps he might take to block CATL from accessing funds.
It was the first time that Manchin raised an objection to the Ford-CATL licensing agreement.
Ford’s agreement with CATL is part of the US automaker’s stated intent to boost annual EV production to 600,000 vehicles by late 2023 and more than 2 million by the end of 2026.
US Senator Marco Rubio, a Florida Republican, introduced legislation on Thursday that would block tax credits for EV batteries produced using Chinese technology. Rubio has also called for the Biden administration to review the Ford-CATL agreement. Oil and minerals
Manchin and Senator Lisa Murkowski, Republican of Alaska, told the CERAWeek conference that US permitting reform is needed to achieve the goals of the IRA and other recent legislation.
The Biden administration should greenlight a ConocoPhillips oil project in northern Alaska, Murkowski said, adding the project was needed for US energy security.
A decision is “imminent,” and could come at any hour, she said at the conference.
If the administration rejects the development or does not make it economically viable for ConocoPhillips to go through with the project, “legislation is always something we have to reckon with,” Murkowski told reporters.
Both senators said that while Africa and other parts of the globe may want to deepen trade ties with the United States to take advantage of the IRA, the legislation’s true aim is boosting American mining and EV supply chains.
“There are extraordinary mineral opportunities in many places around the globe,” said Murkowski. “But we are not focusing what we have here at home and what we’re doing to help facilitate that first. That’s part of my beef.”
Murkowski derided the US Department of Energy’s decision last summer to lend $102.1 million to Syrah Resources Ltd for a graphite processing plant in Louisiana that will source the metal from Mozambique.
“Tell me why we’re so eager to help facilitate that and why we’re not willing to kind of step it up and say, ‘Well, what do we have here at home?'” Energy security
After Iran and Saudi Arabia agreed on Friday to re-establish relations after seven years of hostility, Murkowski warned about a realignment of global energy alliances following Russia’s invasion of Ukraine last year. The invasion prompted US and other governments to impose sanctions on Russian oil.
“When you see alliances come together over energy that cause us concern, we need to wake up here in this country,” Murkowski said.
Manchin addressed President Joe Biden’s budget proposal this week that would scrap billions of dollars in oil and gas industry subsidies, saying a conversation is needed around what happens if the price of oil and gas falls and makes it uneconomical for companies to produce energy.
Manchin earlier on Friday said he would not support the nomination of Laura Daniel-Davis as assistant secretary of the Department of Interior, saying she supported higher royalty rates for Alaskan oil production.
(By Ernest Scheyder, Stephanie Kelly, Ben Klayman and Gary McWilliams; Editing by David Gregorio and Matthew Lewis)
Panama gives First Quantum go-ahead to operate port terminal Reuters | March 11, 2023 Punta Rincón. Credit: Autoridad MarÃtima de Panamá
Panama’s Maritime Authority has lifted a suspension on First Quantum Minerals’ operations at the port of Punta Rincon, which the Canadian company uses to export copper concentrate from its key Cobre Panama mine, company sources said late on Friday.
Two spokespersons for Minera Panama, First Quantum’s Panama unit, told Reuters the suspension dated Jan. 26 had been ended, which was confirmed by a source at the Maritime Authority.
The company, which spent weeks at loggerheads with Panama over Cobre Panama, had said that once the suspension ended, it would be able to resume activity at the port quickly.
The Panamanian government and First Quantum said on Wednesday they had agreed on the final text for a new contract on the operations of Cobre Panama, which accounts for about 3.5% of the country’s gross domestic product.
Because it could not work at Punta Rincon, First Quantum halted ore processing operations on Feb. 23 after reaching the maximum storage level of copper concentrate – about 100,000 tonnes – at the mine in Panama’s Donoso district.
About 60% of the copper concentrate exported through Punta Rincon is destined for factories in China. The rest is exported to other markets including Spain and Germany.
(By Milagro Vallecillos; Editing by Daniel Wallis) Panama minister expects contract with First Quantum will get green light
Reuters | March 10, 2023 | Cobre Panama mine is First Quantum Minerals’ largest copper operation. (Image courtesy of Cobre Panama.)
Panama’s trade minister expects the remaining authorities in the Central American nation will approve the text of an agreement reached with Canada’s First Quantum Minerals to regulate its operations at a major copper mine.
The contract meets “the best interests for the country,” Minister Federico Alfaro Boyd told Reuters on Friday, adding it limits the firm’s tax credits to a maximum of $35 million per year for the life of the 20-year contract, from a previous request of $1.2 billion.
A First Quantum spokesperson declined to comment on the remarks.
Panama’s government and the Canadian miner agreed on the final text for a contract to operate the Cobre Panama mine on Wednesday.
The minister said the contract could be terminated if there is proven corruption by the company, if it fails to make payments to the government or does not meet environmental agreements.
The proposed draft is subject to a 30-day public consultation process and approval by the Panamanian Cabinet, Comptroller General and the National Assembly.
Asked about the maritime authority of Panama’s decision to ban First Quantum’s cargo operations in a port, which prompted a halt in operations, the minister said it was a separate issue and that the new contract is solid enough to guarantee operational continuity.
First Quantum chief executive officer Tristan Pascall told Reuters on Wednesday he met with Panama’s president after finalizing the text and ensured it guarantees “stable and durable” operations.
Panama’s trade official said he is “optimistic” the contract will remain in place for the 20 years stipulated, with the option for a 20-year renewal.
(By Valentine Hilaire; Editing by Brendan O’Boyle and Matthew Lewis)
