CRIMINAL CRYPTO CAPITALI$M
Celsius founder Alex Mashinsky arrested, pleads not guilty to fraud

Danny Park
Thu, July 13, 2023

Alex Mashinsky, founder and CEO of bankrupt cryptocurrency lender Celsius Network Limited, pleaded not guilty after being arrested in the U.S. Thursday for seven criminal charges including securities fraud, commodities fraud and wire fraud, Reuters reports.

See related article: Celsius misled investors, spent customer funds, bankruptcy examiner claims

Fast facts

• U.S. federal prosecutors say Mashinsky defrauded customers. According to the indictment released Thursday by the U.S. Attorney for the Southern District of New York, Mashinsky led customers to believe that Celsius was an air-tight storage space for their assets, obscuring associated risks.

• Additionally, prosecutors accuse Mashinsky and Celsius’ former chief revenue officer Roni Cohen-Pavon of manipulating the value of CEL, the company’s native cryptocurrency token. The two allegedly arranged the purchase of hundreds of millions of dollars of CEL in the open market with the objective of artificially supporting and inflating the token’s price.

• Prosecutors allege that Mashinsky made approximately US$42 million in proceeds from his sales of CEL tokens, with Cohen-Pavon making over US$3.6 million.

• In the lead up to June 12, 2022, when Celsius froze customer withdrawals, prosecutors say Mashinsky continued to assure customers that the company was in a strong financial position. He also informed them that the company had sufficient liquidity to meet all customer withdrawal demands. However, he had by that time allegedly removed approximately $8 million-worth of his own crypto assets from Celsius.

• The U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission and the Federal Trade Commission all sued Mashinsky and Celsius earlier on Thursday.

• Celsius filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York in July 2022 after the spiraling crypto market forced the lender to freeze withdrawals.

‘Extremely vulnerable to abuse’: Token grants back in the spotlight after former Celsius CEO allegedly pocketed $42 million

Marco Quiroz-Gutierrez
Fri, July 14, 2023 

Yuki Iwamura—Bloomberg via Getty Images

Alex Mashinsky, the ex-CEO of bankrupt crypto lender Celsius, insisted publicly that he was clinging to his share of the company’s CEL tokens. But according to the Justice Department, he netted millions of dollars by offloading coins at inflated prices.

The DOJ claims that Mashinsky, with the help of the company's former chief revenue officer, Roni Cohen-Pavon, manipulated the price of CEL by buying millions of dollars worth of the tokens—to help keep it afloat—without revealing it publicly. In some cases, Mashinsky and Cohen-Pavon also caused Celsius to dip into its customer deposits to buy CEL and prop up its price, the DOJ alleges.

At one point, Cohen-Pavon admitted to Mashinsky that the company made up most of the purchases of CEL. “[T]he issue is that people are selling [CEL] and no one is buying except for us,” he said in a private message to Mashinsky, according to the DOJ. “[T]he main problem was that the value was fake and was based on us spending millions (~8M a week and even more until February 2020) just to keep it where it is.”

By selling tokens at inflated prices, Mashinsky took home about $42 million, while Cohen-Pavon reaped $3.6 million. Mashinsky was arrested Thursday and charged with seven counts that include wire fraud and securities fraud. He could face up to 65 years in prison if convicted.

“It's such a flagrant abuse,” said Steven Lubka, head of Swan Private at Swan Bitcoin, a financial services firm.

But a company manipulating its own cryptocurrency isn't a new idea. In December, the Securities and Exchange Commission accused Caroline Ellison, the former CEO of FTX’s trading arm, Alameda Research, of fixing the price of the now-bankrupt crypto exchange’s native coin, FTT. Ellison, at the direction of ex-FTX CEO Sam Bankman-Fried, allegedly purchased large quantities of FTT on the open market to help it maintain its price. FTT was important for FTX because it accepted the coin as collateral for loans of customer funds provided to Alameda Research, and the inflated value of FTT made it seem like the company’s exposure to risk was less than it was, according to the SEC.

The fact that Celsius and Mashinsky were manipulating CEL was not surprising to Lubka. Releasing a crypto token is an effective way for crypto firms to raise money and reward executives and investors, but these coins are also prone to manipulation.

“It's just extremely vulnerable to abuse,” Lubka told Fortune. “All the incentives line up in favor of these companies abusing the unaccountable issuance of tokens.”

Yet these types of tokens remain common. Crypto companies often provide coins to investors or executives in a manner similar to awarding stock options or equity grants in the traditional business world.

The motivation behind sharing TradFi securities is to incentivize employees to work hard to create a viable business, which in theory would increase the value of their shares. With crypto markets, Lubka continued, token grants don’t create the same type of incentive. And tokens, unlike an equity stake, can be offloaded immediately in the open market, generating massive windfalls regardless of that crypto company's success.

“The incentive," Lubka added, "is just to drive a bunch of f****** marketing hype and pump up the value of the token, and then just start selling your tokens as fast as you can."

This story was originally featured on Fortune.com

AT&T Falls to 29-Year Low Amid Concerns of Cleanup Costs

Scott Moritz
Fri, July 14, 2023 



(Bloomberg) -- AT&T Inc. shares hit an almost three-decade low Friday amid growing concerns of the potentially high costs the phone giant faces if it must clean up contamination due to lead-clad wiring throughout parts of its nationwide network.

The issue was exposed earlier this week in a Wall Street Journal story that pointed to leaching lead cables that were part of early landline networks built by phone companies in the first half of the 20th century. Those networks are now owned by several national carriers including AT&T, Verizon Communications Inc. and Lumen Technologies Inc.

AT&T shares fell 4.1% to $14.50 at the close in New York, their lowest price since February 1994. Verizon declined 1.8% and Lumen dropped 10%.

Industry analysts have been trying to calculate the potential costs and risks that may await the carriers.

With a service area that covers about 40% of US homes plus an extensive long distance network, “AT&T will have the largest exposure,” JPMorgan analyst Phil Cusick wrote in a note Friday. Citing the uncertainty around the outcome, Cusick cut his AT&T target price to $17 from $22.

The lead concerns add to an already challenging year for the largest US phone company. In April, AT&T reported $1 billion in free cash flow, missing analysts’ $3 billion target and setting off alarms for the second year in a row about dividend payments. Last month, the company warned that wireless subscriber growth was less than anticipated. The company also clumsily obscured a massive restructuring and job reduction effort behind a new return-to-work policy.

AT&T declined to comment. The company has referred questions about the lead situation to USTelecom, an industry group, which has created a website featuring several statements including a claim disputing the charge that phone cables are a leading cause of lead exposure. The group, which represents most US phone companies, says it’s “ready to engage constructively on the issue.”

Hollywood strikes put pressure on streaming companies: 'The stakes are high'

Alexandra Canal
·Senior Reporter
Fri, July 14, 2023

Hollywood's double strike will likely pressure major media companies as the production pipeline grinds to a complete halt.

SAG-AFTRA — the union that represents approximately 160,000 actors, announcers, recording artists, and other media professionals around the world — joined writers on the picket lines early Friday after the guild failed to negotiate a deal with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of studios including Disney (DIS), Netflix (NLFX), Amazon (AMZN), Apple (AAPL), and NBCUniversal (CMCSA).

It is the first time SAG-AFTRA has gone on strike in over four decades and the first time since 1960 that both actors and writers are striking concurrently. The Writers Guild of America (WGA) strike is currently in its third month with no end in sight.

Third Bridge analyst Jamie Lumley, who interviewed a number of executives in the entertainment and streaming space, wrote that the two strikes come "amid the increasing pressure on traditional linear distribution models and the ongoing rise of streaming, which continues to change how content is consumed and monetized."

"We’ve been hearing that most streaming companies won’t feel the pain from strikes until 2024 given the pipeline of content that has already been locked in. However, streamers could be in trouble as soon as the velocity of content slows," he warned. "Our experts emphasize that content is still king and if streamers want subscribers to keep coming back, they need to have a steady feed of new movies and shows being released on their platforms."

SAG-AFTRA is fighting for more protections surrounding the role of artificial intelligence in media and entertainment, in addition to higher streaming residuals as more movies and TV shows go direct to streaming. These demands are similar to those posed by the writers guild.

"We had no choice," SAG-AFTRA President Fran Drescher said on Thursday following the strike announcement. "We are the victims here, being victimized by a very greedy entity. They stand on the wrong side of history. We stand in unprecedented unity. At some point the jig is up, you can’t keep being marginalized and disrespected. The business model has been changed by streaming and AI. If we don’t stand tall right now, we’ll all be in jeopardy."

Michael Pachter, managing director of equity research at Wedbush, said he agreed with Drescher's sentiments, telling Yahoo Finance Live, "I think the studios are just completely wrong on this one. I'm not suggesting that they cave, but I'm suggesting that they compromise and they just haven't even begun discussions with the writers. ... Content is their lifeblood. They're being really foolish about this."

He warned studio heads, such as Disney CEO Bob Iger, who called the unions' demands "unrealistic," risk creating "permanent damage" with the actors and writers they closely work with: "[Iger] is just completely wrong," he said.

'The stakes are high for everyone'

SAG-AFTRA president Fran Drescher from left, Duncan Crabtree-Ireland, SAG-AFTRA national executive director and chief negotiator, and actor Frances Fisher, right, take part in a rally by striking writers and actors outside Netflix studio in Los Angeles on Friday, July 14, 2023. (AP Photo/Chris Pizzello)

The media and entertainment industry today is being dramatically reshaped by the impact of streaming services. Streaming shows often have fewer episodes and less residual income compared to traditional network television, which often means less money in the pockets of both actors and writers.

At the same time, the majority of studios are no longer just "pure play" production houses. Rather, they have their own streaming divisions, which have brought on a new set of challenges as direct-to-consumer losses mount.

"Streaming companies have been feeling the heat from Wall Street to push towards profitability," Third Bridge's Lumley said. "This has put a number of players on challenging footing as they weigh content costs, strategic decisions, and the growth of their audience. With actors and writers seeing contracts and royalties heavily impacted by streaming, the stakes are high for everyone at the negotiating table."

Insider Intelligence principal analyst Paul Verna added, "While video advertising and subscription revenues are expected to grow by double digits this year and next, the dual strikes could threaten that economy, especially if the standoffs run deep into the fall season."

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Thames Water Crisis Fragments Industry’s $60 Billion Bond Market

LARGEST INVESTOR IS CANADA'S OMERS PENSION FUND

Tasos Vossos
Fri, July 14, 2023 


(Bloomberg) -- The crisis at Thames Water Ltd. has left the $60 billion market for UK water utility bonds deeply divided.

A measure of the dispersion in spreads in the sector has surged over the past few weeks as investors try to separate companies they see as well run, with manageable debt loads, from those that face the most operational and balance sheet issues. The standard deviation almost tripled after reports of a possible temporary nationalization of Thames Water, before settling at around double typical levels, according to data compiled by Bloomberg.

“Going forward we should see more differentiation in spread terms among various water companies, driven by an increasing focus on operational performance, gearing and amount of inflation linked debt,” said Kshitij Sinha, a portfolio manager at Canada Life Asset Management.

Bonds issued by Southern Water Ltd. and the holding company of Anglian Water — along with Thames Water’s Kemble bonds — saw the biggest spread widening over the past few weeks. Debt issued by Severn Trent Plc had one of the mildest reactions, with only a single-digit increase in the risk premium.

Representatives at Thames Water and Anglian Water didn’t respond to requests for comment. A representative at Severn Trent said they had no comment to add, while a spokesperson for Southern Water also declined to comment on bond spreads.

Thames Water has been engulfed in a crisis as it’s had to borrow more to fund investments in its ailing infrastructure, while soaring inflation in the UK has driven up the cost of servicing its £8 billion ($10.5 billion) of index-linked debt. The company — which serves about a quarter of the UK population — said this week that it is confident of raising further funds after investors agreed to a £750 million equity injection, but UK regulator Ofwat said that there are still “significant issues” to deal with.

And in a sign of industry issues going beyond Thames Water, Southern Water was downgraded by Fitch Ratings last week, triggering clauses in bond documents that forced it to suspend dividend payments.

To be sure, avoiding losses in water company bonds since Thames Water made the headlines in late June would have been difficult, with spreads on the vast majority of issuers widening, based on data compiled by Bloomberg.


Still, the dispersion indicates that investors are starting to pick which companies they see as winners and losers in the group.

“Investors are not going to abandon the sector: these companies are still high-quality, offering attractive returns,” said Canada Life’s Sinha. “However, spreads will start reflecting the risk in the sector, penalizing the constant underperformers.”

Most Read from Bloomberg Businessweek

DANIELLE SMITH'S TALKING POINTS

Will Canada's oil & gas industry join Europe's 'green retreat?'

"Impractical time frames" for emissions cuts could drive investment away from the industry

Jeff Lagerquist
Tue, July 11, 2023 

The International Energy Agency sees annual oil demand growing marginally over the next few years, before hitting a peak in 2030.

 (THE CANADIAN PRESS/Jeff McIntosh)

As the world's largest oil and gas companies shrink from climate goals, Canada's fossil fuel industry continues to seek wiggle-room on its own fast-approaching emissions target.

European supermajors BP (BP) and Shell (SHEL) are top fossil fuel players in the energy transition. But recent actions have been dubbed a "green retreat" from the forceful plans they announced a few years ago to embrace renewables and slash emissions.

In February, BP backed off a pledge to cut emissions by 2030, lowering its target from a 35-to-40 per cent reduction, to between 20 and 30 per cent. At the same time, the company deepened its investments in oil and gas.

At Shell, the company's head of renewable generation recently left his role as CEO Wael Sawan pares back green spending. Last month, Shell scrapped its plan to cut oil output by 20 per cent by 2030, opting to keep production steady until the end of the decade, as the company defends its turf as the world's largest LNG firm.

"Oil demand is a really hard thing to make a dent in," said Kevin Krausert, CEO and co-founder of Calgary-based Avatar Innovations, in an interview. "Investors are not going to be happy with oil and gas companies that are basically giving up market share to other players."

Money talks and bullsh** walks. I think that’s what you’re seeing.Canadian public policy consultant Ed Whittingham

The International Energy Agency sees annual oil demand growing marginally over the next few years, before hitting a peak in 2030.

Krausert is an oil field services executive turned venture capitalist who pairs Canadian energy transition startups with some of the biggest firms in the oil and gas sector. He says Canadian producers will struggle to meet Ottawa's industry goal of cutting emissions from operations 42 per cent below 2019 levels by 2030, before hitting net-zero by 2050.

"I think you might see some recalibration. Is it 2030? Is it 2032? Is it 2035?" he said of the interim target. "If it takes us three years to get regulatory approval to build a major [carbon capture] project, and another three years to build it, and we still don't have the fiscal structure in Canada to get some of these projects across the line, you're starting to bump up against 2030."

Kendall Dilling, president of the Pathways Alliance, warns "impractical time frames" for emissions cuts could drive investment away from the industry, reducing production in Canada, while increasing output and emissions in other countries.

The Pathways Alliance, a partnership between Canadian Natural Resources (CNQ.TO)(CNQ), Cenovus (CVE.TO)(CVE), ConocoPhillips Canada, Imperial Oil (IMO.TO)(IMO), MEG Energy (MEG.TO), and Suncor Energy (SU.TO)(SU), is calling for more government financial support for its $16.5 billion carbon capture and storage network. The project, if completed, would be among the largest in the world.

"We can reduce our emissions by 42 per cent from 2019 levels. We have set a goal of net-zero by 2050 from operations. But reaching that as early as 2030 is simply not realistic given current technology, construction and regulatory requirements," he told Yahoo Finance Canada in a statement.

Alex Pourbaix, executive chair of Cenovus' board of directors, calls Shell's shift from green energy to producing more oil a "microcosm" of trends playing out across the industry. Meanwhile, BP is "throttling back their ambition to coincide with the actual ability to decarbonize," he said.

"It's going to be way more challenging, and take a much longer time than I think a lot of people had any idea," Pourbaix said on a July 5 promotional podcast from the right-leaning Canadian news and commentary website, The Hub. "I think a lot of companies and a lot of countries are starting to realize that."

In March, Pourbaix told Yahoo Finance Canada that Ottawa's aim for a 42 per cent drop in operational oil and gas emissions by 2030 is "not feasible by any stretch."

Canadian public policy consultant Ed Whittingham says oil and gas executives are stuck between a rock and a hard place, responding to continued demand for fossil fuels, as well as calls to pivot away from their profitable core business.

"I have a lot of sympathy for these oil and gas CEOs. Investors speak out of both sides of their mouths, saying we want good ESG performance and net-zero, but we want those high returns," he told Yahoo Finance Canada.

"Some of the adjustments you're seeing, especially with the European oil and gas supermajors, are because they made bold statements and promises around diversification from oil and gas, and getting into renewables. They're discovering that's really hard, and they're trying to walk some of that back. But we haven't seen that to the same degree with the Canadian players," Whittingham added.

"Money talks and bullsh** walks. I think that's what you're seeing."

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

SCI FI TEK
California Shows Off New $25 Million Carbon Capture Technology Project

David R. Baker
Fri, July 14, 2023 

(Bloomberg) -- A $25 million project at a Calpine Corp. power plant near San Francisco will test a technology that could capture 95% of a plant’s carbon emissions, a process California officials say is critical to the state’s climate fight.

Carbon capture technology provokes fierce criticism from many environmentalists who consider it a license to keep burning fossil fuels rather than switch to cleaner energy sources. But at the unveiling of the Calpine project Friday, California’s top climate change regulator said some fossil fuel plants will still be needed to keep electricity service reliable as the state moves to eliminate its net carbon emissions by 2045.

“Capturing that carbon, starting as soon as possible, will allow us to stop emitting in situations where we absolutely need these plants for reliability,” said Liane Randolph, chair of the California Air Resources Board.

The pilot project at Calpine’s Los Medanos Energy Center in Pittsburg, California, will use a chemical solvent developed by ION Clean Energy Inc. to bind with carbon dioxide in the plant’s flue gas. ION, based in Colorado, says its process should be both more effective and cheaper than previous carbon capture technologies. Funded in part with a $19 million federal grant, the project will not store the captured carbon, instead releasing it back into atmosphere. In future plants, the carbon dioxide could be pumped underground for permanent storage.

Calpine bills itself as the nation’s largest generator of electricity from natural gas and Chief Executive Officer Thad Hill said carbon capture will be critical for the company. “For us, it represents the energy transition and natural gas’s role in it,” he said.

Protests swell in Tel Aviv for 28th week as anti-government movement vows more 'days of disruption'





 Tel Aviv, Israel, Saturday, July 15, 2023. (AP Photo/Ariel Schalit)


JULIA FRANKEL
Sat, July 15, 2023 

JERUSALEM (AP) — Tens of thousands of protesters packed the streets of Tel Aviv on Saturday night, marking the 28th straight week of demonstrations against Prime Minister Benjamin Netanyahu's plan to overhaul the country's judiciary. Protest leaders promised further “days of disruption” lie ahead.

Netanyahu’s government gave initial approval to a key portion of the overhaul earlier this week, breathing new life into the grassroots movement. The bill still needs to be approved in two more votes, expected by the end of the month, before it becomes law.

Saturday night protests have become a mainstay of the grassroots movement — but this week's was larger than usual.

In Tel Aviv, protesters unrolled a massive banner reading “SOS." They threw paint powder into the sky, streaking it pink and orange. “Handmaids” — women dressed in red robes as characters from the dystopian novel and TV series “The Handmaid's Tale” — once again took to the streets. Their jarring appearance is meant to drive home the notion that, if the overhaul passes, women could be stripped of their rights.

On Tuesday, protesters blocked major highways and disrupted operations at the country's main international airport after Netanyahu's parliamentary coalition advanced a bill that is part of the overhaul. Organizers said they would hold another “day of disruption” on Tuesday if he continues to move ahead with the plan.

The Israeli leader was hospitalized on Saturday for dehydration after suffering a dizzy spell and having spent the previous day in the sun without drinking water. He later released a video from the Tel Aviv hospital, saying he felt good. However, Netanyahu was to spend the night in the hospital, according to his office, and a weekly Cabinet meeting scheduled for Sunday was pushed to Monday.

Saturday’s protest in Tel Aviv was joined by others across the country. Protesters brandished lit torches outside Netanyahu’s home in Jerusalem and demonstrated in the coastal cities of Herzliya and Netanya.

After more than six months of protests, the movement shows little sign of abating. Israel's national labor union and its medical association have joined a long list of groups speaking out against the bill. Military reservists, fighter pilots and business leaders have all urged the government to halt the plan.

Arnon Bar-David, head of the country’s national labor union, the Histadrut, threatened a possible general strike that could paralyze the country’s economy.

“If the situation reaches an extreme, we will intervene and employ our strength,” Bar-David said, calling on Netanyahu to “stop the chaos.”

The Histadrut called a general strike in March as the government pushed the judicial overhaul legislation through parliament after weeks of protest. The move shut down large swaths of Israel’s economy and helped contribute to Netanyahu’s decision to suspend the legislation.

The Israeli Medical Association, which represents 90% of Israeli physicians, joined the Histadrut Friday, voting to “employ all available means, including significant organizational measures” to oppose the reasonableness bill.

The law will “devastate the healthcare system,” the chairman of the association, professor Zion Hagay, said.

The mass protests have taken place since Netanyahu’s far-right government presented the overhaul plan in January, days after taking office. The protests led Netanyahu to suspend the overhaul in March, but he decided to revive the plan last month after compromise talks with the political opposition collapsed.

The overhaul calls for giving Netanyahu’s allies control over the appointment of judges and giving parliament power to overturn court decisions. The Netanyahu government is the most hard-line ultranationalist and ultra-Orthodox in Israel’s 75-year history. His allies proposed the sweeping changes to the judiciary after the country held its fifth elections in under four years, all of them seen as a referendum on Netanyahu’s fitness to serve as prime minister while on trial for corruption.

Critics of the judicial overhaul say it will upset the country’s fragile system of checks and balances and concentrate power in the hands of Netanyahu and his allies. They also say Netanyahu has a conflict of interest because he is on trial for charges of fraud, breach of trust and accepting bribes.

NOTE THEIR PRIORITIES

Glencore, Anglo Join South Africa in $1.5 Billion Water Plan to Supply Mines and Communities



Loni Prinsloo and Antony Sguazzin
Fri, July 14, 2023 

(Bloomberg) -- Some of the world’s biggest mining companies are working with South Africa’s government on a 27 billion rand ($1.5 billion) water project to supply major platinum and chrome operations and several hundred thousand people with drinking water.

Glencore Plc and Anglo American Platinum Ltd. are among the companies attempting to secure half of that amount in financing by the end of the year with the rest of the funds to be sourced by municipalities and the government.

The companies involved in Lebalelo Water Users Association are in talks with about 10 local and international banks for funding, according to Bertus Bierman, its chief executive officer. The project stretches for about 170 kilometers (106 miles) across Limpopo province in northeast South Africa and is expected to be completed by 2030.

The plan is unprecedented in South Africa where almost all water infrastructure, especially initiatives of this scale, have been led by the state. Now, after years of neglect and mismanagement, the government is seeking investment in infrastructure and help in running operations from power plants to rail routes and water facilities.

“This could get a new model into South Africa where government is acting as the regulator and the private entities in partnerships with governmental institutions do more of the work on the ground,” said Bierman in an interview in Pretoria, the capital, this week. “We would like to get construction started early next year.”

Glencore, which operates a chrome smelter in the area, is a global coal and metals mining and trading company, while Anglo Platinum, controlled by Anglo American Plc, is the world’s biggest platinum producer.

Lebalelo plans to build 400 kilometers of pipelines and will supply 250 million liters (66 million gallons) of water a day, about a third of the consumption of Cape Town, which has more than four million inhabitants.

Water will also be supplied to people in the city of Polokwane and Mookgophong, a town north of Johannesburg. Lebalelo’s 16 members also include Impala Platinum Holdings Ltd. and Northam Platinum Ltd. as well as the Department of Water and Sanitation, the Sekhukhune District Municipality and the Mogalakwena Local Municipality.

The project will be rolled out in phases and PricewaterhouseCoopers LLP will arrange the funding, Bierman said, declining to identify the banks that the group is in talks with as the negotiations are confidential.

The project is just one of the initiatives being pushed by South Africa’s government to try and improve the country’s dilapidated water infrastructure.

The state-owned Development Bank of Southern Africa is separately setting up a $1.4 billion facility that will include private investors to fund water reuse projects. State-run companies from the Netherlands and Spain are working with South African counterparts to fund construction in the country.

If the association’s plan is successful the model may be replicated elsewhere in the country, Bierman said. Some of the companies involved in Lebalelo are beginning to discuss a similar energy initiative to generate electricity for mines and communities that could cost about 40 billion rand, he said.

Flipkart makes $700 million payout to employees following PhonePe split


Image Credits: Manish Singh / 

Manish Singh

TechCrunch
Updated Fri, July 14, 2023 


Flipkart commenced a $700 million "one-time discretionary" cash payout to employees on Friday, the single-largest such compensation in the Indian startup ecosystem.

The Walmart-backed Bengaluru-headquartered startup is compensating employees for the separation of fintech PhonePe from the e-commerce group, a move that devalued Flipkart's shares.

The two firms completed a full ownership separation late last year in a deal that was structured to allow shareholders in the Singapore entities of both firms to purchase shares directly in PhonePe’s India entity. PhonePe, in addition to separating from Flipkart, has also moved its headquarters to India and raised $850 million in recent quarters as it bulks its war chest and enters new categories, including e-commerce.

In an email to employees earlier Friday, Flipkart Group CEO Kalyan Krishnamurthy said the "much-awaited compensation will be made today." He added: "We have exciting times ahead, and as we continue to grow across businesses, I look forward to your continued dedication and determination to bring about the future that we envision and scale new heights together."

A Flipkart spokesperson told TechCrunch that the payout had been made. More than 20,000 current and former employees are receiving the payout.

The payout comes at a time when Flipkart has contemplated another round of financing from investors. The firm, which competes against Amazon in India, raised $3.6 billion at a valuation of $37.6 billion in mid-2021. Flipkart, which also counts Tiger Global and SoftBank among its backers, has already exhausted most of that capital, according to a person familiar with the matter.

Flipkart has also been looking to file for an initial public offering for several years, but has deferred the plan due to the ongoing poor market conditions.

The firm's chief rival, in the meantime, is slowing down its growth in India and shutting down some business lines. Amazon said last month that it intends to invest $15 billion in India by 2030 -- $12.7 billion of which it has earmarked for AWS.

Both the firms are facing competition from Reliance, the Indian conglomerate that also runs the nation's largest retail chain. The firm, run by Asia's richest man, Mukesh Ambani, is poised to eventually outpace Amazon and Flipkart in the race for the country’s $150 billion e-commerce market, brokerage firm Bernstein projected in May this year.

Bernstein’s projection hinges on a quartet of compelling advantages that they argue will propel Reliance to the top: a robust retail network, a sweeping mobile network, a holistic digital ecosystem and a “home field advantage” in a notoriously challenging regulatory landscape. These factors should help Reliance seize the majority of the massive e-commerce market in the longer run, the brokerage firm said.

Chinese-Owned Mine Hit by More Delays in Key Peru Copper Expansion Project

Marcelo Rochabrun
Thu, July 13, 2023 


(Bloomberg) -- A unit of state-owned China Minmetals Corp. is bracing for further delays in building a second pit at its troubled Las Bambas copper mine in Peru, while the military there continues to buffer the operation from protest disruptions.

A long-delayed project to mitigate depletion at the current pit was slated to begin in the second half of the year. That’s looking increasingly unlikely due to delays in negotiations with an indigenous community.

“We hope we can finish negotiations this year, but it’s too early in the process yet to know how fast it will go,” Troy Hey, who heads corporate relations at Hong Kong-listed MMG Ltd, said in an interview from Lima. “Once we get an agreement, it’s probably up to three months to get to mining.”

Las Bambas, located in a remote part of the Peruvian Andes, is one of the world’s biggest and most troubled mines. It’s faced recurrent protests from indigenous communities since opening in 2016 at a cost of $10 billion. Blockades and other disruptions have exceeded 600 days in that span, interrupting shipments to smelters in China.

The mine, previously owned by Glencore Plc through its acquisition of Xstrata, can produce as much as 400,000 metric tons a year. But it’s repeatedly underperformed because of protests and declining ore quality. Opening the second pit would see Las Bambas run at full capacity. Without it, the mine will produce about 300,000 tons next year, assuming no disruptions, Hey said.

It’s currently operating with military protection. Tensions reached a peak a year ago when the Huancuire community entered Las Bambas and built a camp on land they had sold to the company for the second pit. Hey said Huancuire members had finally left the area, but that talks were not done yet. MMG is encouraged by new community leadership and is overhauling its approach to community relations, Hey said.

“We are in the best place we have been for a long time in terms of negotiations but it’s tough to see what time-frame it will be,” he said. Huancuire leadership turnover had stalled talks for more than six weeks but MMG hopes to restart negotiations next week, Hey said.

Transporting semi-processed copper from Las Bambas to a seaport has long been the company’s biggest challenge. It uses a mostly unpaved road that traverses about 70 indigenous communities, many of which have long complained about insufficient financial benefit from mining.

President Dina Boluarte has managed to keep copper flowing since March by deploying military to the area. Her administration plans to keep soldiers there until further notice.

“Having police and military presence to keep things calm is not a long-term solution, though I think at the moment we greatly appreciate the support of the government to do that,” Hey said.

Without the military, Las Bambas probably would have seen renewed blockades, he said. “It’s a chronic problem, and so if we do nothing differently we should expect to see the same outcome.”