Indonesia proposes critical minerals trade deal with US
Reuters | September 7, 2023 |

Statue of President Jokowi at Mandalika International Street Circuit. 

Indonesia has asked the United States to begin talks on a trade deal for critical minerals so that exports from the Southeast Asian country can be covered under the US Inflation Reduction Act, an Indonesian ministry said on Thursday.


The request was made when Indonesian President Joko Widodo met with US Vice President Kamala Harris on the sidelines of meetings hosted by the Association of Southeast Asian Nations (ASEAN) in Jakarta on Wednesday.

Under guidelines for the US law issued in March, Washington has required that a certain amount of critical minerals in electric vehicle (EV) batteries be produced or assembled in North America or a free trade partner, for EVs sold in the United States to be eligible for tax credits.

Indonesia does not have a free trade agreement with the United States, but the resource-rich country has ambitions to become a major player in the manufacturing of EVs and their batteries, leveraging its vast nickel reserves.

“Indonesia is a producer and holder of the world’s biggest nickel reserves amounting to 21 million metric tons, so Indonesia can become a supplier for … batteries and EVs in the US,” Jokowi, as the president is popularly known, was quoted as saying by the Indonesian ministry of economic affairs.

“Indonesia invites the US to discuss the formation of the Critical Mineral Agreement,” Jokowi added.

The president also hoped that Indonesia’s involvement in the US-led Indo-Pacific Economic Framework (IPEF) could allow its mineral exports to be recognized for “green subsidies” under the inflation act, according to the ministry’s statement.

The plan to propose a limited free trade deal with the United States was first brought up in April by senior Indonesian minister Luhut Pandjaitan, who said Jakarta wanted to offer Washington an agreement akin to the March deal between Japan and the Western power for EV battery minerals.

Harris, during the opening speech of the bilateral meeting, said she would continue to work with Indonesia to build supply chains that included “critical minerals required to expand our clean energy economies” and to boost trade between the two countries through IPEF.

(By Gayatri Suroyo; Editing by Kanupriya Kapoor)

Vale Base Metals to invest $10 billion in Indonesia over next decade

Reuters | September 7, 2023 | 

Image courtesy of PT Vale Indonesia.

Vale Base Metals is committing $10 billion for investment in Indonesia over the next decade to capture demand for metals such as nickel and copper for electric vehicle production, its chief executive said on Thursday.


The investment is part of the company’s plan to spend $25 billion to $30 billion in new projects in Brazil, Canada and Indonesia over the next decade.

It will also further Indonesia’s ambition to be a global hub for the battery materials for EVs and even the vehicles themselves. The country, Southeast Asia’s largest economy, has the world’s largest reserves of nickel ore and large amounts of copper and bauxite for aluminum.

Through subsidiary PT Vale Indonesia, Vale Base Metals is developing two high-pressure acid leaching (HPAL) plants with China’s Zhejiang Huayou Cobalt Co and other partners.

The facilities will produce mixed hydroxide precipitate (MHP) from nickel, a material used to make electric vehicle batteries.

Vale is also partnering with China’s Shandong Xinhai Technology Co. Ltd and a unit of China Baowu Steel Group Corp. Ltd to build a ferro-nickel plant.

These projects would take the refining capacity of Vale Indonesia from around 75,000 metric tons per year to close to 300,000 tons, said Vale Base Metals CEO Deshnee Naidoo.

“If all the plans come right, this will happen in the next five to eight years. This is serious investment and we are committed,” Naidoo said in an interview on the sidelines of Indonesia Sustainability Forum in Jakarta.

In Vale’s Pomalaa project, the company is investing $1 billion for the mines alone and has started initial work for the HPAL facility. The $3.5 billion HPAL plant will be co-developed with Huayou, with US car-maker Ford Motors taking a 17% stake and arranging financing, Naidoo said.

Vale has also started works at the Sorowako HPAL project, which will produce 60,000 tons of nickel in MHP annually.

“We are now looking at partnerships to further go downstream with these projects,” Naido said, adding that she is open to partner with carmakers for Vale’s Indonesian projects following the collaboration with Ford.

Vale is also conducting exploration at a copper mine in Indonesia’s West Nusa Tenggara which could potentially be comparable to the Grasberg copper mine in eastern Indonesia in size.

Grasberg is the world’s second-biggest copper mine, operated by a unit of Freeport McMoran.

An investment decision for the copper project is expected around 2026.

(By Fransiska Nangoy)

Chinese rare earth prices hit 20-month high on Myanmar supply worry

Reuters | September 7, 2023 | 

Crystallized rare earth sediments. (Stock Image)

Chinese rare earth prices jumped to their highest in 20 months, as mining suspension in major producer Myanmar sparked stockpiling ahead of the peak consumption season, analysts said on Thursday.


Prices of dysprosium oxide leapt to 2,610 yuan ($356) per kilogram on Wednesday, the highest since May 2022, latest data provided by Shanghai Metals Market (SMM) on LSEG Eikon showed.

Terbium oxide prices rose to 8,600 yuan a kilogram, a level unseen since July 3.

Mines in Myanmar’s Pangwa region in Kachin State, the country’s biggest source of rare earth, have been closed from Monday in preparation for inspections during Sept. 6-7, consultancy SMM said in a report on Thursday.

“A local miner said they have not resumed production and are waiting for a notice on the next step from the inspection team,” said Yang Jiawen, an analyst at SMM.

Rare earth is a prized group of 17 minerals used in consumer electronics and military equipment.

Myanmar accounted for 38% of rare earth imports into China in January-July, Chinese trade data showed, while the Southeast Asian country was the fourth biggest source of rare earth mining in 2022, data by the US Geological Survey showed.

A local resident in the town of Chipwi told Reuters she saw workers from nearby Pangwa coming to her town as mining activities have been paused.

Chinese processors are expecting one to three weeks of disruption of Myanmar feedstock supply, which is unlikely to impact the supply demand balance for 2023, said analyst David Merriman at Project Blue.

However, Merriman expected short-term upward pricing movements due to uncertainty and suppliers holding back material in anticipation of higher prices.

“Any extended shutdown of mining in Kachin could be quite damaging for Chinese refineries in Southern China which are reliant upon feedstock from Myanmar, though the increase in imports from Laos could relieve this somewhat,” Merriman added.

Some rare earth consumers are stockpiling cargoes for use during China’s Sept. 29 – Oct. 6 public holiday, fearing higher prices which are also boosted by expectation of better demand in peak consuming months of September and October, SMM’s Yang said.

Worry of possible supply disruptions amid environmental inspections in late August in Jiangxi province, one of China’s major rare earth production hubs, also added to the price hike, she added.

China’s imports of rare earths surged 76% year-on-year to 12,673 metric tons in August, and volumes in the first eight months jumped 54.4% to 118,426 tons, Chinese trade data showed.

($1 = 7.3275 Chinese yuan renminbi)

(Reporting by Amy Lv in Beijing, Reuters staff in Myanmar bureau and Mai Nguyen in Hanoi; Editing by Emelia Sithole-Matarise)

SASKATCHEWAN
JV Article: F3 advances Athabasca’s latest uranium find
MINING.COM and F3 Uranium | September 6, 2023 

F3 Uranium’s president, Raymond Ashley, at the discovery hole at the PLN project in Saskatchewan. Credit: F3 Uranium

F3 Uranium (TSX: FUU) has made the latest high-grade uranium discovery in Canada’s prolific Athabasca Basin.

The company struck paydirt last November when it drilled an intersection of 15 metres grading 6.97% U3O8 on the JR Zone of its PLN property on the western part of the basin.

Since then, the project’s potential has only got bigger. Combined with a rally in uranium prices since early 2022, the discovery has turned F3 into one of the best-performing stocks of the Toronto Stock Exchange over the last year.

But given the size of its discovery compared to other deposits in the region, F3 is hopeful that this is just the beginning.

Located in northern Saskatchewan, the Athabasca basin is known around the world for its high-grade uranium resources. Mines in the region account for around 15% of the global supply of uranium.

President Raymond Ashley and CEO and chairman Dev Randhawa are veterans of the Athabasca scene, having already made two major discoveries in the area over the last 15 years.

Their first company Fission Energy discovered the J-Zone deposit (indicated resources of 209,000 tonnes of 2.0% U3O8) in 2008 and was later acquired by Denison Mines (TSX: DML; NYSE: DNN), a leading uranium developer.

Six years later, their second company Fission Uranium (TSX: FCU) discovered the Triple R deposit (indicated resources of 2.7 million tonnes at 1.94% U3O8). A positive feasibility for the project was completed in January.

Created from exploration properties spun off from Fission Uranium, F3 Uranium is their third bet on the region’s potential.

Drill core from F3 Uranium's PLN project in Saskatchewan. Credit: F3 Uranium

The exploration team, led by Ashley, first found evidence of uranium on the PLN property shortly after the Triple R discovery in 2014 and went back again in 2019.

“We recognized early on that the geology and the alteration in that structure was quite similar to the Triple R deposit itself,” said Ashley, then VP Exploration.

But the vagaries of the volatile uranium market meant that it was not until last year that the company could raise enough money to resume drilling. The company organized ground geophysics over the northern untested 900-metre of the structure, coined the A1 Main Shear Zone, to define drill targets. The team was able to prove their hypothesis with one of their first holes in the zone and at a scale which suggested that they could be on the edge of something big.

For example, the widths are comparable with those at Fission Uranium’s Triple R, and NexGen Energy’s (TSX: NXE) Arrow deposit (measured and indicated resources of 3.8 million tonnes at 3.1% U3O8) 25 km to the southeast.

And as well as width, the drill hole hit a high-grade core of five metres grading 18.18% U3O8, a sign that it could be in the middle of a significant hydrothermal fluid system.

“We’ve got the width, it’s shallow and it’s got super-high grades. Now the question is how big is this thing?” posits Ashley.

The discovery comes at a critical moment for the global uranium market.

After 10 years in the doldrums, triggered by the Fukushima accident in Japan, interest in the nuclear fuel is heating up again, driven by the higher energy caused by Russia’s invasion of Ukraine and the potential for nuclear energy to reduce carbon emissions.

Spot uranium prices have risen around 15% since the start of the year, bolstered most recently by concern that a military coup in Niger, a major supplier to Europe’s nuclear industry, could hit production.

With increased interest from investors in nuclear power, F3 has been able to return to the market several times since last year’s discovery to fund additional exploration.

An C$8 million drill program over last winter allowed them to extend the strike length to 105 metres.

“The fact that we hit another beautiful intersection 60 metres away from the discovery hole again with that super strong high-grade core allows us to get a handle for the shape and orientation of the mineralization,” Ashley notes.

The team has not only been drilling to expand the known JR zone but also along the strike in the search of more mineralized zones.

Other uranium finds in the basin frequently consist of several areas of mineralization spread out over a relatively wide area. Fission Uranium’s Triple R project consists of five separate zones of uranium mineralization spread over a strike length of 3.2 kilometres.

With this in mind, F3 has begun looking for additional mineralization along the A1 conductor and the recently discovered adjacent and parallel A1B conductor, which together stretch for a total of 3.7 km kilometres.

“There’s clearly potential for other mineralized pods along this conductor complex, and for an unconformity or sandstone component,” Ashley says.

As it has stepped up exploration, F3 has experimented with new drilling techniques that give it more bang for its buck. This summer, the company has deployed a sonic drill to advance casing through the Athabasca’s difficult overburden of sand and gravel before a diamond drill is used to extract core. With one sonic drill blazing the trail for two diamond drills, the company is set to drill a total of 40 holes this summer instead of the 30 originally planned in its C$12 million summer budget. Drilling so far this summer has extended the JR Zone in strike length by a further 50% to 156 metres. Hole 68, updip from hole 60, intersected 18 metres of 8.8% U3O8, the highest grade-thickness intercept to date.

A sonic drill at the JR Zone at F3 Uranium's PLN project. Credit: F3 Uranium

The discovery has transformed its profile in the eyes of investors, lifting its market capitalization from around C$20 million to C$140 million over the last year.

The company has now announced a further C$20 million financing which will fund exploration through 2024. Planned work includes expansion drilling to define the size of the JR Zone and exploration drilling for new areas of mineralization along the A1 and A1 B shear zones.

Ashley attributes the team’s success to its winning track record and an ambition to keep making new finds.

“It’s the experience we had with the two uranium discoveries and the persistence to go back when we saw the right signs,” the executive notes.

The preceding Joint Venture Article is PROMOTED CONTENT sponsored by F3 Uranium and produced in co-operation with Mining.com. Visit: www.f3uranium.com for more information.

Simplified geologic map of the Athabasca basin in northern... | Download Scientific Diagram (researchgate.net)

Antofagasta loses bid to revive Minnesota copper-nickel project

Reuters | September 7, 2023 | 

Credit: Twin Metals

A US judge has rejected a bid by a subsidiary of Chilean mining company Antofagasta Plc to restore canceled mineral leases for a proposed $1.7 billion Minnesota copper and nickel mine, which the Biden administration had blocked over concerns it could pollute a major recreational waterway.


US District Judge Christopher Cooper in Washington, DC, on Wednesday dismissed Twin Metals’ 2022 lawsuit, which challenged the US Interior Department’s decision earlier that year to cancel leases for an underground mine near the Boundary Waters Canoe Area Wilderness. The project would have been one of the biggest US sources of metals needed to build electric vehicle batteries and other clean energy technologies.

The Interior Department canceled the leases and other mining approvals after determining they were illegally renewed despite US Forest Service objections related to concerns that mining could pollute the wilderness’s streams and lakes with potentially toxic waste.

Cooper said his court lacks jurisdiction over Twin Metals’ claims under the Administrative Procedure Act, because the rights allegedly violated by the government stem from the terms of its leasing contract with the US government – not procedural legal rights outlined in that law. He said the claims should have been brought under the Tucker Act, which allows parties to sue the US over contractual disputes involving the government.

An Interior Department spokesperson on Thursday declined to comment, and a spokesperson for Twin Metals did not immediately respond to a request for comment.

The company said in its August 2022 lawsuit that it had spent hundreds of millions of dollars to develop a “state-of-the-art, environmentally sound mine.” It said the Biden administration’s decision to cancel the leases was arbitrary and capricious, and ignored the need to carefully balance environmental concerns with the need for critical mineral development.

Stephen Safranski, an attorney who represented the environmental group Friends of the Boundary Waters Wilderness – which intervened to defend the government’s decision alongside more than a dozen environmental groups and recreational businesses – said the “decision is a victory for Minnesota’s ecological crown jewel and an important milestone in ending a grave threat to the Boundary Waters.”

The leases were first granted in 1966 and have been passed along to successor companies over the years, though no mining has taken place on the site.

Twin Metals acquired the leases in 2011 and sought to renew them in 2012 but that request was denied in 2016 after the Obama administration determined it had discretion to deny the renewal since no mining had actually started.

The Trump administration reversed course and renewed the leases in 2019, which the Biden administration canceled in 2022.

(By Clark Mindock)

Decarbonization in mining still a long way off

Reuters | September 7, 2023 

Stock image.

A lack of consistent data to measure emissions down the supply chain of mining companies and through to customers makes it difficult to monitor and meet targets for decarbonizing the sector, industry executives and investors said on Thursday.


The mining industry is a key focus for policymakers and investors because it provides the critical raw materials needed for electric vehicles and renewable energy infrastructure, but is also responsible for 4% to 7% of greenhouse-gas (GHG) global emissions.

Virginia Dundas, acting chief sustainability officer at Orsted, the world’s largest offshore wind farm developer, said she sees different levels of transparency from suppliers of the metals her company needs to build things like turbines.

“We try to engage in different ways to procure materials. We are putting in place some pilots to trace where they come from…but we are still seeing that for some (suppliers) it is very difficult to do that,” Dundas said, speaking at  the  Reuters IMPACT conference in London.

As metals are used across many different industries that serve customers across various geographies, it is difficult for mining companies to account for the whole supply chain.

The International Council on Mining and Metals , whose members include around 25 mining companies, on Thursday published guidance for all mining companies on how to account and report their Scope 3 – or indirect – emissions “to try and answer the problem of patchy data to make companies report consistently,” its CEO Rohitesh Dhawan said at the conference.

Scope 1 refers to a company’s direct emissions, Scope 2 to indirect emissions from purchased energy while Scope 3 refers to all other indirect emissions, for example from a company’s third-party suppliers.

Mining companies have set targets to decarbonize and mostly aim to reach net zero by 2040 and 2050, but some are struggling to keep up. The world’s second largest miner Rio Tinto said in July that it would miss its 2025 target unless it resorted to buying carbon offsets – credits to reduce emissions through projects such as tree planting.

“You can publish your data on Scope 3, but where investors have clear expectations is to see the companies’ targets aligned to net zero across Scope 1, 2 and 3…setting the targets short, medium and long term is absolutely critical to know that the company is walking down that path,” said Adam Matthews, chief responsible investment officer for the Church of England Pensions Board, which invests in mining companies.

(By Clara Denina; Editing by Elaine Hardcastle)

CHILE

Codelco seals early contract deal with El Teniente supervisors’ union

Reuters | September 7, 2023 

Workers at El Teniente, Chile. Image from Codelco.

Chile’s Codelco, the world’s largest copper producer, said on Thursday it had reached an early collective bargaining agreement with the supervisors’ union at its flagship El Teniente mine, avoiding the possibility of production stoppages.


Codelco said in a statement that the proposal was approved by 97% of the votes cast and will take effect from November, valid until 2026.

“The early closing of this negotiation … paves the way for this work center to focus on meeting safety, sustainability, production, cost and surplus goals, as well as commissioning progress of the projects that extend the operation of the deposit for 50 years,” the firm said.

Codelco did not specify the financial details of the 36-month contract.

El Teniente mine produced 405,400 metric tons of copper in 2022, representing 28% of Codelco’s total copper production last year.

(By Fabian Andres Cambero and Carolina Pulice; Editing by Sandra Maler)

Portugal’s Lusorecursos gets final environmental OK for lithium mine

Reuters | September 7, 2023 |

Aerial view of the traditional village of Pitoes das Junias and the surrounding agricultural fields, in the Norhern Region of Portugal. Stock image.

Portugal’s environment agency APA has given its final approval for local company Lusorecursos to extract battery-grade lithium in what would be the country’s first such mine, expected to start producing by end-2027, APA said on Thursday.


That puts the project in the northern Montalegre area near the Spanish border and with a planned investment of 650 million euros ($696 million), ahead in the lithium mining race in Portugal. London-based Savannah Resources has so far received a conditional go-ahead for its own Barroso open-pit mine.

With more than 60,000 tonnes of known lithium reserves, Portugal has been seen central to Europe’s efforts to secure more of the battery value chain and cut reliance on imports.

However concerns about the environmental and social impact of lithium mining from nature preservation groups and local communities have led to multiple delays in approving lithium mining projects as well as a mega-auction of new concessions that the government initially planned for 2018.

Lusorecursos was awarded a mining concession in March 2019 but the start of the project was dependent on the final approval of the environmental impact assessment.

In a statement, APA said that it authorized mining in Montalegre, “with the issuance of a favourable environmental impact assessment”, despite the public consultation being “mostly negative regarding the implementation of the project”.

“Similar to what has already occurred in other projects, the assessment developed (by APA) took into account the strategic interest of lithium,” it said, adding that the municipality of Montalegre will receive 75% of the royalties.

A Lusorecursos spokesman said the project, which was approved “without any relevant conditions”, would also include an ore refinery in the vicinity of the mine that will require a separate EIA for its exact location.

Total investment in the mine and refinery is expected to reach around 650 million euros. Lusorecursos plans to start construction in the beginning of 2025 and start producing lithium hydroxide in late 2027.

Most of the Lusorecursos project is underground, but it also involves open-pit mining.

($1 = 0.9345 euros)

(By Sergio Goncalves; Editing by Andrei Khalip and Frances Kerry)

Ghana sovereign wealth fund invests in nation’s first lithium mine

Reuters | September 7, 2023 |

Ewoyaa lithium project. (Image courtesy of IronRidge Resources)

Ghana’s sovereign wealth fund will invest almost $33 million in a lithium mine in the country and take a minority stake in its developer Atlantic Lithium, the company said on Friday.


Ghana’s Minerals Income Investment Fund (MIIF) will buy a 6% stake in Atlantic Lithium’s projects in the country, including Ewoyaa, which is set to be the West African country’s first lithium producing mine, for $27.9 million, Atlantic Lithium said in a statement.

The investment is another example of a surge in interest in companies producing the key electric vehicle battery metal amid the clean energy transition.

In 2021, Piedmont Lithium took a 9% stake in Atlantic Lithium to secure spodumene, or high-purity lithium ore, for which it has a supply contract with electric vehicle maker Tesla Inc.

MIIF will also buy a 3.05% stake in Atlantic Lithium for $5 million, it said. The deal gives it an option to bid for the Ewoyaa project’s available supply contract of the lithium produced, through a competitive process.

“There is a competitive process (for the offtake) which MIIF will also participate in, but on a commercial level,” said Atlantic Lithium chairman Neil Herbert.

“There is an open field of chemical converters, OEMs and major trading groups,” he said.

(By Clara Denina and Felix Njini; Editing by Sharon Singleton)

Alberta enters global lithium race with opening of first extraction pilot project

Amanda Stephenson, The Canadian Press

Alberta got out of the starting gates in the global critical minerals race Thursday with the opening of the province's first lithium extraction pilot project.

At his company's site just east of the town of Olds in central Alberta, E3 Lithium CEO Chris Doornbos called the occasion the start of a "new era" for the province's traditionally oil-and-gas-dominated economy.

"Without forsaking our past, the lithium industry opens up a whole new industry, using our existing skill set," Doornbos said.

"The opportunity to be a global leader, and to make Alberta a lithium jurisdiction, is really and truly here.”

Lithium, a light metal, is in demand around the globe right now because it is a key component in electric vehicle batteries.

Currently, the world's biggest lithium producers are Australia, Chile and China. However, it has long been known that Alberta is home to one of the world's largest lithium deposits, located deep underground in the Leduc geological formation, which is also a major oil-and-gas producing area.

Until recently, there has been little interest in developing this deposit, but the growth in electric vehicles and exponential demand for lithium-ion batteries has changed that. Lithium is now a key focus of the government of Canada's $3.8-billion, eight-year critical minerals strategy, which aims to increase domestic extraction and production of the metal along with other previously under-developed resources such as cobalt, copper, titanium and zinc.

E3, a publicly traded junior resource company headquartered in Calgary, has quickly become a leader in the space. It holds the mineral rights to an estimated 16 million tonnes of lithium resource, and it has developed a made-in-Alberta technology that extracts the lithium that occurs naturally within oilfield brines.

The company plans to pilot its technology over the course of this fall, with the goal of opening a full-scale commercial plant in the same area by late 2026.

That facility could process up to 150,000 tonnes per year of battery-grade lithium product, Doornbos said, ready to be sold directly to battery producers and EV companies.

While Alberta's lithium industry is still in its infancy, proponents say it's a natural fit for the province. Its lithium resource is located in the same oilfield formation as Leduc No. 1, the historic gusher that kick-started the province's oil-and-gas industry in 1947.

And the extraction process for lithium is not that technically different from oil and gas extraction, meaning the province's oil-and-gas engineers and geologists "fundamentally understand" what it's all about, Doornbos said.

In fact, Doornbos said he expects to see traditional oil-and-gas companies increasingly looking to lithium as another potential revenue source. Imperial Oil Ltd., for example, is already one of E3's investors, and U.S. oil giant Exxon Mobil is developing its own lithium project in Arkansas.

 “I think the oil and gas companies are very closely watching the lithium space," Doornbos said. 

"I could see them partnering (with lithium companies), but I could also see them, as Exxon is already doing, doing it themselves and creating a business unit and making lithium.”

While E3 is the first lithium company to get an extraction project up and running in Alberta, there are a handful of others with projects still in the planning phases. 

Brian Jean, Alberta's Minister of Energy and Minerals, said his government wants to see the province become a "preferred producer and supplier" of industrial minerals and critical metals. 

“Increased global demand for electric vehicles and battery storage are going to lead to Alberta having another resource – not just oil, not just natural gas – but another resource to sell to the world,” he said.

Both the Alberta and federal governments have provided funding to E3 Lithium, and the federal government has also announced the creation of a 30 per cent tax credit for critical mineral exploration projects.

The federal government has also announced hundreds of millions in government subsidies in an effort to attract battery production and EV manufacturing to Canada. (One example is the federally subsidized electric vehicle battery plant that is currently under construction by Stellantis near Windsor, Ont.)

Doornbos said Canada will need to be "extremely aggressive" if it wishes to compete with the United States on electric vehicle and battery production going forward. He said the incentives and subsidies that country is dishing out to support the build-out of an American EV supply chain have put it ahead of the game.

But he said when it comes to the natural resources themselves, he's confident Canada, and Alberta in particular, can win.

"The critical minerals industry will build off the oil and gas industry we're so well known for," Doornbos said.

"I think from the broader Alberta perspective, it's going to be a lot more than just E3. It (critical minerals) is going to be an industry to itself."

Enbridge to buy three Dominion utilities in deal valued at US$14B

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Canadian pipeline operator Enbridge Inc. agreed to buy three utilities from Dominion Energy Inc. in a US$9.4 billion deal to create North America’s largest natural gas provider.

The acquisition of the East Ohio Gas Co., Questar Gas Co. and Public Service Co. of North Carolina will double the Calgary-based company’s gas utility business, Enbridge said in a statement Tuesday.

The deal is a massive bet that gas will remain a transition fuel for the foreseeable future even as much of the world tries to phase out fossil fuels to fight climate change. While there’s a strong push to deploy more renewable energy, there’s also a growing recognition that the green transition will take time, ensuring gas will be in demand for years.

“The assets we are acquiring have long useful lives and natural gas utilities are ‘must-have’ infrastructure for providing safe, reliable and affordable energy,” Enbridge Chief Executive Officer Greg Ebel said in the statement.

The move comes as Enbridge, North America’s largest pipeline company, is pushing to position itself for the transition toward cleaner energy. The three companies it’s buying serve customers in Ohio, Utah, Wyoming and North Carolina, where revenue from utility bills is forecast to grow faster than the national average.

“They’re going for that very fixed cash flow,” Bloomberg Intelligence analyst Talon Custer said in an interview.

The transaction is valued at $14 billion including debt. It will be Enbridge’s largest since its acquisition of Spectra Energy Corp. for about $28 billion in 2017, according to data compiled by Bloomberg.

Enbridge shares fell 6.2 per cent as of 9:09 p.m. in after-hours trading in New York while Dominion was 0.3 per cent lower. To help finance the transaction, Enbridge said separately that it plans to raise C$4 billion (US$2.9 billion) in a share sale underwritten by a group of institutions led by RBC Capital Markets and Morgan Stanley.

The deal to buy the companies, which serve seven million homes and businesses across multiple states, will require approvals from regulators, including the Federal Trade Commission to ensure it doesn’t violate antitrust laws. Enbridge said it would start pushing forward to secure the approvals immediately. It expects the deal to close in 2024.

The transaction is also the latest to arise from Dominion’s corporate review launched by CEO Bob Blue late last year to reverse a slumping stock price. Dominion executives said they wanted to focus on the company’s growing electric utility business and pay down debt.

The deal with Enbridge comes nearly two months after the Richmond, Virginia-based Dominion agreed to sell a US$3.3 billion stake in a Maryland liquefied natural gas export project to Berkshire Hathaway Energy.

Dominion said Tuesday the sale of its gas distribution utilities would help it improve the company’s funds from operations to debt ratio by 3.4 per cent. Blue said the company will provide an update on its review during the fourth quarter.

Morgan Stanley and RBC were Enbridge’s financial advisers on the deal while Sullivan & Cromwell LLP and McCarthy Tétrault LLP were its legal advisers. Dominion’s financial advisers were Citigroup Inc. and Goldman Sachs Group Inc., and its legal adviser was McGuireWoods LLP.

The group of underwriters for the equity sale also includes BMO Capital Markets, CIBC Capital Markets, National Bank Financial Markets, Scotiabank, and TD Securities.

With assistance from Ruth Liao.

Health agency probing Air Canada vomit incident that echoes broader customer woes

Christopher Reynolds, The Canadian Press

The outrage sparked by a passenger incident involving a vomit-smeared airplane seat reflects a broader frustration with flight operations in Canada, travel experts say — as the country's public health agency says it's investigating the recent episode.

On Tuesday, Air Canada said it apologized to two passengers who were escorted off the plane by security after protesting that their seats were soiled — and still damp — ahead of an Aug. 26 flight from Las Vegas to Montreal.

"They clearly did not receive the standard of care to which they were entitled," the airline said in a statement emailed to The Canadian Press. "Our operating procedures were not followed correctly in this instance."

The Public Health Agency of Canada said it is in contact with Air Canada. It cited its mandate to ensure that anything brought into the country on conveyances ranging from planes to trains does not risk transmission of illnesses that can be spread via contact with body fluids.

"Blood, vomit and diarrhea may contain microorganisms that can cause disease. These fluids, and the surfaces that come in contact with them, should always be considered as contaminated," the agency said in a statement.

In a Facebook post that has since gone viral, Susan Benson of New Brunswick said she was in the row behind the two women when she detected "a bit of a foul smell but we didn’t know at first what the problem was."

The cabin crew had "placed coffee grinds in the seat pouch and sprayed perfume to mask" the odour, she said in the Aug. 29 post, which had garnered a combined 8,100 reposts and comments as of Wednesday evening.

"When the clearly upset passengers tried to explain to the flight attendant that the seat and seatbelt were wet and there was still visible vomit residue in their area, the flight attendant was very apologetic but explained that the flight was full and there was nothing they could do," Benson wrote.

After a "back-and-forth" argument with cabin crew, the pair asked for blankets and wipes to clean the area themselves before a pilot told them they could either leave the plane voluntarily or be escorted off by security and placed on a no-fly list due to rude behaviour — a characterization Benson rejected.

"They were upset and firm, but not rude."

John Gradek, who teaches aviation management at McGill University, says the aircraft never should have been dispatched, given the "biological hazard" on board.

"What the heck are you doing?" he asked of the carrier. "Totally out to lunch."

The outcry on social media sparked by the incident speaks to a degraded level of service perceived by Canadians after a year marred by frequent flight delays and lost luggage, said former Air Canada chief operating officer Duncan Dee.

"People’s patience is likely wearing thin," he said.

"I think travellers can relate to those two travellers' experience out of Las Vegas, because they feel they’ve had their travels disrupted to a much greater degree than prior to (the pandemic).”

While photos of snaking lines and posts of passenger frustrations at Toronto's Pearson airport popped up on social media over the summer, the chaos of overflowing terminals and luggage-clogged arrival areas that marked the 2022 travel season did not come to pass, due in part to more prepared players and fully staffed agencies and security contractors.

Nonetheless, Air Canada ranked last in on-time performance among the 10 largest airlines in North America in July, a report found. Canada's biggest carrier landed 51 per cent of its flights on time that month, according to figures from aviation data firm Cirium.

"Last summer you had the three (largest) Canadian airports top the global charts for cancellations. This summer saw significant delays due to air traffic control," Dee said. "The system simply has let travellers down."

Of the latest incident, he added: "These seat cushions are removable."

Most airlines contract third-party "groomers" that clean the seats and aisles between flights and have access to spare cushions to replace soiled ones "in relatively short order," Dee said.

"You've got toddlers, infants, even adults who have certain accidents ... It doesn't happen every flight, but it certainly happens every day."

But experts said that tight-packed schedules and flight delays squeezing turnaround times can put more pressure on crews to get back in the air as soon as possible.

"You'd be extending the ground time on the airplane to do the clean-up," Gradek said, noting that crews have strict rules on their shift time, or "duty period."

Last month's incident wasn't the first of the summer to involve seats and bodily fluids.

On June 30, a passenger on an Air France flight from Paris to Toronto said he sat amid the uncleaned remnants of a previous passenger’s hemorrhage, prompting a probe by the public health agency.

Of the latest incident, the agency said that if a complaint is determined to relate to a communicable disease "and the operator has not met the requirements of the Quarantine Act," it could conduct an inspection and ultimately issue a fine to the operator.