CATL seals $1.4 billion deal to develop Bolivia lithium

Bolivia’s Uyuni salt flat. (Image by Diego Delso, Wikimedia Commons).

Reuters | June 19, 2023 |

Chinese battery giant CATL confirmed a $1.4 billion investment to help develop Bolivia’s huge but largely untapped reserves of lithium, cementing on Sunday a partnership with the government made in January.


The agreement connects CATL, the world’s largest manufacturer of electric vehicle batteries, with Bolivia’s salt flats that are home to the world’s largest lithium resources.

Following a meeting with CATL executives on Sunday, Bolivian President Luis Arce confirmed the commitment to build two lithium plants to extract minerals from the country’s Uyuni and Oruro salt flats.

“We met with Burton Roy (Yu Bo), CEO of the Investment Committee of CATL to confirm the investment of $1.4 billion,” the president said via Twitter, adding that as partners they would “evaluate the possibility” of increasing investments to 2028.

Construction of both plants could begin as soon as July, according to the country’s energy ministry, with overall investment climbing to around $9.9 billion during the project’s industrial process.

Sunday’s announcement follows a partnership deal signed on January 20 between Bolivia’s state-run lithium company, Yacimientos del Litio Bolivianos (YLB), and a Chinese consortium, in which CATL would invest over $1 billion in the project’s first stage in exchange for rights to develop the two lithium plants, which could each produce up to 25,000 metric tons of battery-grade lithium carbonate per year.

CATL does not currently produce any lithium, although it has invested in a number of Chinese projects.

Lithium resources in Bolivia’s iconic salt flats are estimated at 21 million metric tons, according to the US Geological Survey, but as yet has almost no industrial production or commercially viable reserves.

(By Daniel Ramos and Lucinda Elliott; Editing by Chizu Nomiyama)

Australia cautious on Chinese investment in vital lithium sector

Bloomberg News | June 20, 2023 

Greenbushes spodumene mine in Western Australia. Image: Talison Lithium.

Chinese investment in Australia’s minerals sector must be considered “strategically” as the countries compete directly in lithium refining, said Resources Minister Madeleine King.


She made the comments in an interview following the release of Australia’s long-awaited Critical Minerals Strategy, which includes a target to lure A$500 million ($340 million) of funds for projects that are vital to the energy transition.

The strategy calls for foreign investment from “like-minded partners” to boost domestic mining and refining of battery metals like lithium and cobalt. When asked if Chinese involvement would be welcomed, King said Australia had to take a strategic approach.

“We’re competing with China here,” she told Bloomberg. “We also want to be a producer of lithium hydroxide. It’s only natural that we would want to advance our ambitions in that space.”

Australia is the world’s biggest lithium producer, mining more than half of the metal used in electric vehicles, smartphones and grid-scale batteries, with the government forecasting output will double by 2028. But the vast majority of that is still shipped to China, which dominates downstream processing into battery-grade chemicals.

Canberra and Washington are trying to work with diplomatic and economic partners to build their critical minerals industries and break China’s monopoly in certain areas that produce materials vital to high-tech manufacturing in the defense, aerospace and green economy sectors.

Chinese firms have already invested in lithium hydroxide refineries in Western Australia and future decisions would be made by the Foreign Investment Review Board, King said. But Beijing had spent 30 years investing and building its critical minerals industry, and Australia was “behind the game” and needed to catch up, she said.

Australia’s gross domestic product could grow A$133 billion by 2040 and more than 260,000 jobs might be created if it builds more downstream processing capacity in critical minerals and secures a greater share of trade and investment, according to the strategy.

However, Canberra’s target for more investment is well below the billions of dollars the US will spend to boost its critical minerals industry under the Inflation Reduction Act. King said that while she understood calls for even greater funding, A$500 million was “nothing to sneeze at.”

“We can’t outspend the US,” she said. “Its investment in the Inflation Reduction Act is really important, but we don’t have an economy of that magnitude to spend that much money.”

(By Ben Westcott and James Fernyhough)

Column: Zinc price slide claims first victim as Irish mine closes

Reuters | June 20, 2023 | 

Tara mine, Ireland. Source: www.qbm.ie

The closure of the Tara zinc mine in Ireland tells you how far the price of the galvanizing metal has fallen over the last year.


London Metal Exchange (LME) three-month zinc hit an all-time high of $4,896 per tonne in March 2022. It has since more than halved, touching in May a nearly three-year low of $2,215.


Weighing on the market is a combination of weak demand and rising supply as refined production recovers from a year of smelter disruption.

The focus on the smelting segment of the supply chain seems to have blind-sided the market to the impact of the steep price slide on mine profitability.

London zinc jumped by 5% to $2,491 per tonne when Swedish producer Boliden announced on June 13 it was placing its Irish operations on care and maintenance with immediate effect.

The closure is unlikely to alleviate the immediate over-supply of zinc concentrates but it is a sharp reminder for the market that the zinc price is teetering on the edge of the mining production cost curve.

LME zinc price, stocks and spreads

Tara’s perfect storm

Tara Mines, based in County Meath, is “currently cash flow negative due to a combination of factors including operational challenges, a decline in the price of zinc, high energy prices and general cost inflation”, Boliden said.

The company’s chief executive Gunnar Nystrom told Ireland’s RTE radio it was “a perfect storm” leading to “tremendous unsustainable losses”.

“The zinc market seems to be very volatile at the moment,” Nystrom said, which is an understatement given the scale of the price collapse over the last 15 months.

It doesn’t help that smelters are also charging miners more for converting their concentrates into refined metal.

This year’s global benchmark treatment charges were set at $274 per tonne, up from $230 in 2022 and $159 in 2021.

Supply glut

The jump in processing fees reflected a build-up of raw material due to multiple smelter outages, particularly in Europe due to high energy prices.

Some European smelter capacity remains off-line but China’s producers are lifting production after soaking up surplus concentrates.

China’s imports of zinc concentrates rose by 13% last year and jumped by another 21% year-on-year to 1.54 million tonnes bulk weight in the first four months of 2023.

The country’s smelters appear to have so far avoided a repeat of last year’s energy-related constraints and refined zinc output was up by 8% at 2.674 million tonnes in January-May this year, according to local data provider Shanghai Metal Markets.

Spot smelter treatment terms in China are assessed by Fastmarkets at $195-230 per tonne, lower than the annual benchmark. Smelters are said to be comfortably stocked amid an abundance of raw material.

The loss of Tara, which last year produced 103,000 tonnes of zinc in concentrates, is unlikely to have much immediate physical impact on these dynamics.
Mind the cost curve

It is, however, a warning that zinc has fallen in super-fast time to the producer pain threshold.

Total production costs among tracked zinc mining companies averaged $2,179 per tonne in the first quarter of 2023, according to Refinitiv, an LSEG company.

That’s a weighted average calculation.

Every mine has its own unique cost dynamics and Tara’s financing challenges have been accentuated by operating challenges, most recently in the form of flooding late in 2021.

However, Tara is unlikely to be the only operator facing some hard choices as long as zinc trades at these depressed levels and energy prices remain elevated.

Investment fund positioning on LME zinc

The only way is down?

The Tara news is priced in, LME three-month metal giving back part of its gains and trading around $2,400 per tonne.

Pricing remains partly beholden to Shanghai, where zinc is being dragged down by a weak steel complex. The connectivity reflects zinc’s usage in galvanised steel, a sector that is in turn linked to China’s foundering commercial property market.

Funds are playing the London zinc contract from the short side to the tune of 10,295 contracts as of the latest Commitments of Trading Report.

It’s the largest collective bet on lower prices since early 2021, when markets were roiled by the first wave of Covid-19 lockdowns in China.

How much lower the price can fall, however, is a moot point, given the mounting producer pain.

A metal’s cost curve is not a hard price floor. But, to quote analysts at Morgan Stanley, “the 90th percentile of the global cost curve has proven to be a reliable floor, with rare ‘undershoots’ during periods of extensive economic stress (e.g. 2009)”. (“Zincking no more”, June 15, 2023).

Zinc’s price implosion since March last year may not be over. The Tara bounce has faded and the bears may be back.

But Tara’s suspension is a wake-up call that after a year of worrying about smelters, zinc traders need to start worrying about zinc mines as well.

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

(Editing by Barbara Lewi

GREENWASHING DEEP SEA MINING

Norway proposes opening its waters to deep sea mining, says minerals needed in green transition

Norway says it wants to open parts of the Norwegian continental shelf for commercial deep sea mining in line with the country’s strategy to seek new economic opportunities and reduce its reliance on the oil and gas industry

ByThe Associated Press

June 20, 2023, 2:08 PM

FILE - Norway's Oil and Energy Minister Terje Aasland, left, speaks during the opening of a Business Conference at Danish Industry (DI) in Copenhagen on Thursday June 15, 2023. Norway says it wants to open parts of the Norwegian continental shelf for com...

The Associated Press

HELSINKI -- Norway said Tuesday it wants to open parts of the Norwegian continental shelf for commercial deep sea mining in line with the country’s strategy to seek new economic opportunities and reduce its reliance on the oil and gas industry.

Terje Aasland, Norway's minister for petroleum and energy, said in a statement the country needs minerals to help transition to a more green economy. The Norwegian seabed is reportedly rich with minerals including copper, zinc, manganese and cobalt.

“Currently the resources are controlled by a few countries, which makes us vulnerable,” he said.

But the Norwegian government's plan is controversial and environmental groups are warning that mining the sea bed would threaten the biodiversity of the vulnerable ecosystems in the area.

Louisa Casson, global project leader for Greenpeace’s Stop Deep Sea Mining campaign, said that “to forge ahead and unleash deep sea mining in the Arctic would be criminal.”

“Norway talks about leading the world but they clearly didn’t get the memo of the growing opposition to this industry,” she said in a statement. “Companies at the forefront of the green transition are already calling for a halt to this destructive industry, as are citizens and governments from Europe to the Pacific.”

Norway, one of the world’s wealthiest countries due to its vast oil and gas reserves, has significant mineral resources on the seabed, and their extraction could become “a new and important industry" for the country, the petroleum and energy ministry said.

If proven to be profitable, and if extraction can be done sustainably, seabed mineral activities can strengthen the economy, including employment in Norway, while ensuring the supply of crucial metals for the world's transition to sustainable energy, the ministry added.

Norway’s move comes a month before a meeting of the International Seabed Authority in Kingston, Jamaica, that will address the thorny issue of whether there should be industrial-scale extraction of valuable minerals from the depths of the ocean.

LA REVUE GAUCHE - Left Comment: Search results for DEEP SEA MINING 

AUSTRALIA

PRICE WATERHOUSE COOPER (PwC)
Parliamentary report finds PwC engaged in 'calculated breach of trust', but won't release list of staff involved in tax leaks

By political reporter Tom Lowrey

The interim report finds that PwC engaged in a long-running effort to hide its actions.(ABC News: John Gunn)

A parliamentary committee has described the actions of consulting firm PwC in monetising confidential federal government information as "a calculated breach of trust".

Key points:An interim report recommends PwC publicly disclose further details about those involved in the leaking of confidential tax information

It also found no evidence "colleagues or leaders" called out this behaviour, up until it became publicly known in 2023

The parliamentary committee has not released the list of names in the emails out of concern that some are not substantially involved

But it has stopped short of publicly releasing a list of dozens of people who sent or received emails containing confidential information within the firm.

PwC has been under fire for months after revelations a former partner at the firm shared information taken from confidential Treasury briefings.

The Treasury was seeking the firm's input as it shaped new laws targeting multinational tax avoidance — information that PwC later used to help its clients work around the laws.

A trove of emails was publicly released through a Senate committee last month, revealing at times open discussion of confidential Treasury information on the new tax policies.

The matter is now the subject of a police investigation, and the parliamentary inquiry has been running alongside it.

A new interim report lays out what is now publicly known about the tax leaks, and strongly recommends PwC publicly discloses more information about who was involved and in what capacity.

"It is clear that the desire for personal gain trumped any obligations that PwC had to the Commonwealth of Australia and its citizens," it finds.

"This was a calculated breach of trust by PwC.

"There is no evidence that PwC colleagues or leaders called out this behaviour for years, up until it became publicly known in 2023."

It also finds the firm engaged in a long-running effort to hide its actions.

"PwC engaged in a deliberate strategy over many years to cover up the breach of confidentiality and the plan by PwC personnel to monetise it," it said.
List of names won't be released for now

The emails were produced by the Tax Practitioners Board (TPB), a somewhat-obscure agency that handed PwC and its former partner Peter-John Collins its first sanction over the tax leaks affair.

There has been a strong push from some within parliament to make public the names of dozens of people included on the emails released by the TPB.

PwC is starting to give off royal commission vibes

Daniel Ziffer explains why the PwC conflict-of-interest scandal is giving him banking royal commission vibes.

But the committee has stopped short of releasing a list of 63 names handed to it by PWC, primarily out of concern that some people named are not substantially involved in the matter.

It makes just two recommendations — that PwC cooperate fully with ongoing investigations, and it publish further details about those involved in the matter.

Committee chair senator Richard Colbeck said the committee was put in the "invidious position" of having names without context.

"We don't know whether they were active participants in what had occurred, or whether they were just on an email list," he said.

"It wasn't fair for us to be put in that position and we are pretty cheesed off, to put it lightly, with PwC."

"The committee considers the onus is on PwC to promptly publish accurate information about the involvement of PwC partners and personnel in the interest of the transparency and accountability it claims to be working towards," it finds.

The revelations have sparked significant blowback from PwC, including commitments from some agencies — like the Reserve Bank — that they won't be signing new contracts with the firm until it is confident of cultural change.

At a recent round of Senate estimates, government agencies were grilled as to the extent of their relationship with PwC, and whether they maintained confidence in the firm handling confidential information.

Senator Colbeck said the ramifications of PwC's conduct will be felt beyond Australian shores.

"The emails that have been released have email addresses that are in other jurisdictions," he said.

"[So] we think other jurisdictions should be looking at what's been happening in this case as well."

 US to consider kangaroo product ban as major brands Nike, Puma move to phase out use of K-Leather - ABC News 

SPECIAL MULTI MEDIA FEATURE

Rio Tinto Says Driverless Iron-Ore Train Derailed in Western Australia

Published: June 18, 2023

By Rhiannon Hoyle

Rio Tinto said an autonomous train carrying iron ore from its mining operations in remote northwest Australia to a port derailed late Saturday and that efforts to recover the derailed wagons are underway.

A spokesman for the miner, one of the world's top exporters of the steelmaking ingredient, declined to comment Monday on the impact to operations.

In a statement, Rio Tinto said it is investigating the incident and has notified regulatory authorities. "The regulator has approved recovery of the site, and work to recover the derailed wagons has commenced," the company said.

About 30 wagons derailed roughly 12 miles from the port town of Dampier in West Australia's Pilbara mining region, said Rio Tinto. The miner said no one was injured.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

Investigation underway after driverless train operated by Rio Tinto derails outside of Karratha - ABC News

WORKERS CAPITAL

Northvolt gets $400 million from Ontario fund for green battery

Bloomberg News | June 20, 2023 |

Credit: Northvolt AB

Ontario’s pension fund for government workers is investing $400 million in Northvolt AB, a Swedish sustainable battery company that’s exploring setting up shop in Canada.


The company, which already produces electric-vehicle batteries in Sweden, will use the money from Investment Management Corp. of Ontario to help fund its expansion in Europe, the fund said.

The investment is consistent with IMCO’s view of global trends it believes will persist, chief investment officer Rossitsa Stoyanova said in an interview. “Energy transition is happening and we want to capitalize on it,” she said.

Northvolt is currently in talks with the Canadian and Quebec governments on a potential multibillion-dollar plant near Montreal that could include a cathode factory, a battery cell assembly line and a recycling facility, according to people familiar with the matter. If that deal happens, it may follow a similar structure to a proposed Volkswagen AG battery plant in Ontario, which has been promised billions in government financial help.

Since its founding seven years ago by a pair of former Tesla Inc. executives, Stockholm-based Northvolt has raised money from dozens of investors including Goldman Sachs Group Inc. and Volkswagen. So far, the company has secured more than $55 billion worth of contracts and it has two more factories in the works in Europe — one in Gothenburg, Sweden and another in northern Germany.

The C$73.3 billion ($55.5 billion) Ontario pension fund is investing via convertible notes, said Matthew Mendes, its head of infrastructure. IMCO declined to comment on the potential for a factory near Montreal.

“We fundamentally believe that there’s lots of investor appetite. Their plan is to IPO the business in a number of years, so the convertible structure gives us downside protection, but also allows us to participate and convert into equity at our predefined milestones,” he said.

Northvolt’s aim is to produce a global supply of batteries using locally sourced renewable energy. By 2030, it says its batteries will contain 50% recycled material, and will have a carbon footprint that’s 80% lower than batteries made using coal-fired power.

(By Paula Sambo and Mathieu Dion, with assistance from Brian Platt)

 

COSCO’s Investment in Hamburg Terminal Finalized

Terms were finalized for COSCO to acquire under 25 percent of a Hamburg container terminal (COSCO file photo)

PUBLISHED JUN 19, 2023 5:18 PM BY THE MARITIME EXECUTIVE

 

COSCO Shipping Ports Limited and Hamburger Hafen und Logistik completed the terms of the investment to be made by the Chinese company into one of Hamburg’s largest container terminals. The deal first announced in September 2021 has been long delayed while Germany’s government debated the level of investment with political complaints that the Chinese would be taking control of a critical part of Germany’s supply chain.

The companies reported they signed the revised agreement today, June 19, after the decision from the German government that would permit an investment of less than 25 percent which was confirmed in May. COSCO reports following discussions with the German Federal Ministry of Economic Affairs and Climate Action, the agreement was completed. According to a stock exchange filing, COSCO will purchase more than 1.9 million shares, representing 24.99 percent for €46.4 million. In addition, there is the settlement of a loan valued at €24.4 million.

The operator of the terminal promoted that through the investment in Container Terminal Tollerort (CTT), it would become a preferred hub for Asian traffic in the North Sea and Baltic Sea regions. They highlighted that COSCO has been operating at the port of Hamburg for 40 years.

“In view of the competition between the ports in the North Range, it is crucial for Hamburg's positioning to secure cargo volumes. Every third container that is handled in Hamburg comes or goes to China,” HHLA said in presenting its argument for the approval of the investment. 

The proposed investment which called for COSCO to acquire a 35 percent stake, however, became a political issue. Under German law, since 2018 CTT and HHLA as its operator have been registered as an operator of critical infrastructure with regard to IT in Germany.  They however highlighted that the terminal was not deemed to be critical infrastructure according to the regulations in 2021. 

As part of the political debate, the rules were changed in 2022 adding a new category of critical infrastructure that includes port and inland terminals with a freight volume of 3.27 million tons or more per year. The German government ultimately agreed to the lower level of investment.

HHLA highlights that while the investment has strategic advantages as COSCO plans to increase volumes at the terminal, they will not have any direct input in the operations. They will not have access to the terminal’s technology and no involvement in port operations.

Globally Chinese investment has been called into question in the past few years. Critics of China’s growing influence cite these investments and question the role of the central government. 
 

 

Shipbuilder CSSC Builds Base for "National Defense" Sonar Testing

Location on Hainan Island is well-suited to South China Sea deployments

Bei Diao 996's SWATH hull design, highlighting her slender catamaran hull form at the waterline (CSSC)

PUBLISHED JUN 19, 2023 8:33 PM BY THE MARITIME EXECUTIVE

 

China State Shipbuilding Corporation (CSSC) is known in the West as the world's largest commercial shipbuilder, but it is also the world's largest naval shipbuilder by a wide margin, providing new destroyers and corvettes for the swiftly-growing People's Liberation Army - Navy (PLAN). Among its many other government vessel contracts, it has built a small waterplane hull area (SWATH) acoustic sensor research catamaran for the Chinese government, and it is now set to get its own base in the South China Sea to support the vessel's operations. 

CSSC's recently-built Bei Diao 996 is a civilian research vessel, and it wears plain white and blue livery, but its primary use will be for testing underwater acoustic sensors and electronics arrays. SWATH designs are less affected by roll and heave than conventional vessels, and are considered well suited for specific applications - in particular, the deployment of towed sonar gear for tracking submarines. The Japan Maritime Self-Defence Force (JMSDF) operates three similar ships for this purpose, and the U.S. Navy uses a SWATH design for its Impeccable-class (T-AGOS 23) ocean surveillance ship. Austal USA recently secured a contract to design a T-AGOS(X) ocean surveillance ship with a similar SWATH layout, and could build up to seven if all options are exercised. 

China is aware ot the design and function of USS Impeccable and similar SWATH vessels. In 2009, the Impeccable had one of the U.S. Navy's earliest encounters with China's maritime militia when a Chinese trawler attempted to snag her towed sonar array with a grappling hook. 

The Bei Diao 996 is China's largest "test ship for deep-sea equipment," according to China Classification Society. She is homeported in Nanshan, near Hong Kong, but soon she will be based even further to the south. CSSC is building a port specifically to support her operations in Sanya, the southernmost port on China's Hainan Island. The new CSSC test facility will support the "construction of an advanced national defense industry system," according to state news outlet Global Times. 

"In terms of national defense, the base could enable more complex and challenging tests in the deep sea," Chinese defense commentator Song Zhongping told Global Times. 

 

Italy Seizes Six Additional C&T Ferries During Fraud Investigation

Pietro Novelli is one of six additional ferries seized in the fraud probe (Caronte & Tourist file photo)

PUBLISHED JUN 20, 2023 3:11 PM BY THE MARITIME EXECUTIVE

 

Italian authorities yesterday expanded their seizure of ferries operated by Caronte & Tourist and its sister company Siremar as part of the ongoing allegations of fraud and profiteering from the fraud. The expansion of the seizures is disrupting critical ferry service from Sicily to the outlying islands, impacting both residents who depend on the vessels for transportation and the growing number of tourists during the summer season.

Officers from the Guardia di Finanza, which is responsible for dealing with financial crime, moved to impound six additional ferries on the orders of the court. According to media reports, the judge ruled that the three vessels detained on June 6 did not have sufficient financial value to cover the extent of the potential claims. The seizure is being called a “preventive action,” in response to the allegations of fraud by the company and four of its current and former directors.

Early in June, prosecutors in Palermo started a court action in response to allegations that the company misrepresented the capabilities of its vessels and has failed to meet the terms of a 2016 government contract to maintain the vital ferry service. According to the reports, the company attested to the fact that its ferries would be accessible for individuals with limited mobility, including the elderly, people with limited mobility, wheelchairs, and pregnant women, but prosecutors charge the vessels are not accessible and the company has not upgraded them to meet the requirements of the contract. Further, they allege the company is taking public funds and profiting from the contract while not meeting the requirement to ensure the service is fully accessible.

The court on June 6 ordered the seizure of three ferries along with cash valued at approximately €30 million. The company later asked the court to release the vessels saying it was creating a hardship due to the lack of service. The court refused to release the ferries Bridge, Helga, and Ulisse. The expanded order now also includes the ferries Vesta, Isola di Vulcano, Sansovino, Isola di Stromboli, Antonello da Messina, and Pietro Novelli, in service between the Aeolian and Egadi islands.

The company responded to the latest moves saying it was doing everything it could to guarantee service. They said they were using other ships and looking to other owners to provide vessels to maintain the routes. Despite that, reports surfaced in the media today that ferries especially on the route between Milazzo and the Aeolian Islands had been skipped yesterday. One of the vessels seized yesterday, the Vesta, had been used to replace the Bridge seized on June 6. Media reports said the routes between Milazzo to Vulcano and Lipari were suspended.

Mayors from eight of the municipalities impacted by the loss of service to the islands of Sicily joined in sending a letter to the national government citing the broad impact on the region. They are calling for an immediate operational solution to restore the services.

The company faced similar charges of fraud in 2020 in Messina. In addition, the company has been under investigation for reported ties to the Italian mafia. Management insisted in their response that they are innocent and will work to resolve the situation as quickly as possible.