UK: Supermarkets respond to concerns over price pressures & working conditions on supplier farms as House Lords outlines exploitation risk for migrant workers

British Apples and Pears Ltd told us that despite a 17 per cent increase in the price of apples being charged to consumers, growers had received just 0.8 per cent increase in returns between 2021 and 2022.

House of Lords Horticultural Committee Report

In November 2023, The House of Lords’ Horticultural Sector Committee released a new report that analyses the challenges for both businesses and workers' welfare in the UK’s horticultural sector. It sheds light on the ‘erratic and confusing’ trade environment created through the country’s exit of the EU, COVID-19, and Russia’s war with Ukraine. These challenges, the report argues, have placed increasing pressure on the horticultural sector, catalysed further by the struggle to adapt to and mitigate climate change.

The report outlines downward price pressure resulting from competition between supermarkets, including loss-leader strategies, price-matching to the lowest bidder, and the imperative to over low prices to customers. This has led to a race to the bottom, squeezing growers’ returns amid increasing input costs, driven by the use of fixed contracts, often without provision for inflation clauses, that make it difficult to raise the price of produce. The committee reached out to Tesco, Sainsbury’s, Morrisons, Asda, Aldi, Lidl, Waitrose, and Marks and Spencer to discuss this. Tesco gave public evidence; Morrisons, Waitrose, and Asda accepted a separate invitation to speak to the committee in private, while M&S submitted written evidence to the inquiry. The report also notes the Groceries Code Adjudicator’s (which regulates relationships between the UK's retailers and direct suppliers) role is too limited to stand up for growers effectively and that the seasonal migrant worker scheme is ‘poorly planned and managed’.

The report discusses evidence heard by the committee alleging some workers on scheme experienced discrimination and abuse, including the non-payment of wages and over-crowded and unsuitable accommodation. The Committee heard from Clark McAllister, who told them this exploitation is linked to the low price paid to farmers for crops, leading to poor conditions and low pay for workers, who ‘bear the brunt of supermarket’s excessive purchasing power’. Business & Human Rights Resource Centre wrote to each of the UK's largest nine supermarkets to outline how they ensure purchasing practices do not lead to workers being underpaid and exploited in its supply chains. We received responses from Asda, the Co-Operative, Lidl, Marks and Spencer, Morrisons, Sainsbury's, Tesco, and Waitrose. Aldi did not respond to the Resource Centre's request for comment.

The report also alleges seasonal migrant workers employed on UK farms are being charged ‘extremely high, illegal’ recruitment fees and that workers are taking out loans to cover these fees and ‘can get stuck in debt bondage’. While some of these fees are charged by ‘scammers’ and ‘criminals’ abroad, the report notes overseas staff of scheme operators are also charging illegal fees. While the Committee itself only named one of the six Scheme Operators in the horticultural sector where this practice was uncovered - Fruitful Jobs - the Resource Centre invited all current Scheme Operators in the horticultural sector to respond to the allegations of recruitment fee charging and debt bondage, and to outline how they ensure the migrant workers they sponsor pay no illegal recruitment fees to brokers abroad or to their own staff overseas. We received responses from Pro-Force, AGRI-HR, Telpasc, and Concordia. Fruitful Jobs and HOPS Labour Solutions did not respond to the Resource Centre's request for comment.

ARTISANAL MINING
Illegal Gold Mine Collapse in Suriname: A Tragic Mishap

By: BNN Correspondents
6 hours ago


In a tragic turn of events, an unregulated gold mine in the Surinamese region of Kleine Saramacca collapsed, causing multiple fatalities. The exact number of casualties remains uncertain, with local media reporting between 18 and 21 deaths, though official confirmation is still pending.

Mine Collapse: A Grisly Picture

The catastrophe unfolded as the mine’s shaft gave way, trapping the miners who were in search of gold. The mine, once operated by Canadian firm Iamgold, was acquired by China’s Zijin Mining in February 2023. President Chan Santokhi apprised the parliament of the dire situation, stating that at least ten people were believed to be buried, with the possibility of more.

Illegal Mining: A Persistent Issue

Highlighting the persistent issue of illegal mining in regions rich in gold deposits, President Santokhi informed the parliament that the site had previously seen eviction of illegal miners. Despite the Zijin Mining Company’s request for security measures leading to the dismantling of miners’ camps by the military and police, small-scale miners tend to quickly return to such profitable sites.

Rescue and Recovery: A Daunting Task

At present, the focus is on locating survivors and initiating recovery operations. Vice President Ronnie Brunswijk has flown to the disaster area, while emergency services, including the military, police, and the National Coordination Center for Disaster Management, have been mobilized for assistance. The incident, reported to the President during parliamentary proceedings, underscores the urgent need for stringent regulation of mining activities in the region.

COLOMBIA

Crisis in Cali River Basin: Alarming Mercury and Lead Levels Threaten Public Health

By: María Alejandra Trujillo
November 21, 2023


The Cali River basin is currently facing an environmental crisis due to elevated levels of mercury and lead that have been discharged into its waters as a result of gold mining in the Farallones de Cali.

The investigation by the Public Prosecutor’s Office found that the Felidia River, a key tributary of the Cali River, has concentrations of mercury and lead that are 230 times higher than the international standards permit, according to local media. Specifically, the levels detected in the river were 23 parts per million (ppm), significantly surpassing the maximum limits set by Canadian and WHO regulations (CCME, 1999), which establish a reference range of 0.1 to 0.17 mg/kg. This indicates a severe environmental contamination issue in the Cali River basin, primarily attributed to gold mining activities in the Farallones de Cali.

The Threat Looms Large

The illegal mining operations have poisoned six of the seven rivers that supply water to Cali, the capital of Valle del Cauca. Despite warnings issued by the Procuraduría about the impacts of mining in the Farallones for over six months, the authorities have been accused of turning a blind eye to this escalating crisis.
Concerted Action to Address the Crisis

In response to the dire situation, a multi-agency response plan has been activated to combat the environmental devastation. Despite the alarming circumstances, the Municipal Companies of Cali (Emcali) have assured that heavy metals have not reached the lower part of the river, as per their monitoring systems. This offers a glimmer of hope in an otherwise dark scenario.

Cali River’s Toxic Metals: Severe Health Risks

Mercury and lead are notoriously toxic to human health, with potential symptoms and effects ranging from insomnia, tremors, memory loss, and headaches to cognitive dysfunction, hypertension, anemia, renal dysfunction, and irreversible neurological and behavioral effects.

Colombia: Attorney General’s Office alerts about high levels of mercury and lead in the Cali River caused by illegal mining

"Illegal mining causing high mercury levels in Colombia’s Cali River", 19 November 2023

...The Attorney General’s Office of Colombia issued a communiqué on Sunday alerting about high levels of mercury and lead in the Cali River, which supplies fresh water to Santiago de Cali, the capital of the western department of Valle del Cauca.

Illegal mining in the Farallones National Natural Park has been identified as the cause of the metal pollution, which was originally detected in the Felidia River, a tributary of the Cali River. 

According to a study carried out by the Public Prosecutor’s Office with the support of the Anti-Narcotics and Law Enforcement Affairs Section of the United States Embassy, toxic elements in the Felidia River have reached levels of 23 parts per million (ppm), exceeding the reference of the Canadian and WHO Regulations that establish a maximum limit of 0.1 to 0.17 mg/kg...

Fresh water sources in other departments such as Antioquia, Córdoba, Chocó, Cauca, Nariño, Bolívar and Santander, have also been identified as threatened by mercury contamination resulting from illegal mining...

Mercury and lead in the Cali river basin, find out what measures the authorities have taken

November 21, 2023



The Attorney General’s Office issued an alert about the alarming levels of mercury and lead in the Cali River, a crucial hydrographic basin for the water supply in the capital of Valle del Cauca.

This disturbing discovery emerged from a recent study conducted by the Attorney General’s Office, with the support of the Counternarcotics and Law Enforcement Affairs Section of the United States Embassy.

The study revealed the presence of these toxic elements in the Felidia River, a vital tributary of the Cali River, where levels of 23 parts per million, ppm, were detected, exceeding the limits established by Canadian Regulations and the WHO.

This excess is considered a direct consequence of illegal mining in the Farallones National Natural Park, an illicit activity that threatens both the park’s ecosystem and the quality of the water that feeds six of the seven rivers that supply the city.


Given these alarming results, the Attorney General’s Office has activated an Action Plan that seeks to effectively address this environmental crisis.

This plan involves close collaboration between various authorities, including the Attorney General’s Office, the National Police, the Ministry of the Environment, the Ministry of Defense, the Government of Valle del Cauca, the Mayor’s Office of Cali and EMCALI.

The monitoring and measurement were carried out within the framework of the surveillance commitments agreed upon in the National Mercury Table, convened by the Attorney General’s Office, to review with the competent authorities the severity of the findings and the ongoing environmental crisis.

In addition, it was reported that the Attorney General’s Office will issue a directive with field sampling and will soon publish a diagnostic report on the sites with the highest levels of mercury contamination due to mining activities in Colombia.

The Public Ministry warns that mercury contamination in water sources, a result of illegal mining, is not an exclusive problem in Valle del Cauca.
See also Ivrea, goodbye to Mussano merchant and entrepreneur

A similar increase has been observed in different regions of the country, including Antioquia, Córdoba, Chocó, Cauca, Nariño, Bolívar and Santander, with these territories being the most affected.

Councilors against illegal mining

The city faces growing concern about pollution in the Felidia and Pichinde tributaries, derived from illegal mining exploitation in the Farallones.

Councilors such as Roberto Rodríguez Zamudio, Ana Leidy Erazo Ruiz and Terry Hurtado Gómez expressed their alarm, pointing out the lack of government control at the national, departmental and local levels.

For the Councilors, the issue should be evaluated in greater depth and samples should be taken not only in the flat part but also in the mountainous area of ​​the towns of Felidía, Leonera, Andes and Pichinde.

The president of the Council, Carlos Hernán Rodríguez Naranjo, requested that the authorities that have influence in the control of illegal mining in the Farallones be consulted on the issue, to find out the progress in this matter.

Roberto Rodríguez Zamudio, for his part, highlighted the seriousness of the situation, emphasizing that the news is not only the contamination of rivers, but the destruction of ecosystems.

Illegal mining exploitation persists and has increased, with a significant increase in miners and 40 sinkholes that contribute to the destruction of the ecosystem, affecting water quality and local fauna.

“The irreparable damage to the environmental ecosystem of the Farallones should be considered environmental terrorism, because it puts the lives of the people of Cali and Valle del Cauca at risk,” added Rodríguez Zamudio.

Councilor Ana Leidy Erazo Ruiz indicated that the reports made by the Attorney General’s Office should generate an alarm to guarantee drinking water to the residents of the upper part of Felidia and Pichinde, who are those directly affected by this illegal mining exploitation.

“Although Emcali says that at the intake of the Río Cali treatment plant there are no samples or presence of lead or mercury, it surely does occur in those community aqueducts that supply water to the townships,” said Erazo Ruiz.

Councilor Erazo Ruiz recalled that Mayor Jorge Iván Ospina was warned of the burdensome situation that the presence of lead and mercury in local rivers creates for the health of Cali residents.

“We must continue with these technical studies to know which part of the Felidia or Pichinde basin is affected by these mercury and lead discharges,” said the Cabildante.

Councilor Terry Hurtado Gómez, in turn, said that lead, mercury and cyanide in Cali’s rivers is not a new issue.

“There is a message that leaves me concerned and it is what Emcali mentions, regarding the presence of mercury in the water consumed in the city, therefore, we must analyze a little deeper,” said Councilor Hurtado Gómez.
Emcali is pronounced

In a recent joint visit with the Attorney General’s Office and National Parks, encouraging results have been obtained in relation to the levels of mercury and arsenic in the Cali intake.

According to measurements, it has been verified that the levels are at 0 milligrams per kilogram, indicating the absence of problems in this regard.

The discovery has led Emcali to issue a statement of tranquility to the population. These results support the efforts and measures that Cali has implemented for several years to ensure water quality and food safety.

It is highlighted that the city is complying one hundred percent with the established regulations, and there are no indications of problems in this regard.

The call for tranquility is based on the satisfactory levels of regulatory compliance in Cali. The city has been taking preventive and corrective measures to maintain water purity, and these results are a validation of those continued efforts.

The levels of mercury and arsenic are within acceptable parameters, and the population can trust the quality of the water at the intake.

CHILE

Codelco to spend $720 million in Chuquicamata copper mine

Cecilia Jamasmie | November 21, 2023 

Chuquicamata is the world’s largest open pit copper mine in terms of excavated volume. (Image courtesy of Codelco | Flickr.)

Chile’s Codelco, the world’s top copper producer, plans to invest an additional $720 million revamping its century-old Chuquicamata copper mine, in an effort to stop the company’s overall production decline.


The state-owned miner already spent $5.7 billion to convert the open pit into an underground mine, as part of a 10-year, $39 billion-overhaul of its core assets currently in execution.

Codelco, which is also in the process of spending $1.3 billion in related infrastructure, is now seeking environmental approval for design adjustments and complementary works, according to a document posted on the Environmental Assessment Service (SEA) website.

The proposed operational changes, both underground and at the surface level, “will not alter the extraction and processing speeds originally authorized for the project”, according to the submission.

Codelco, which hands over all of its profits to the state, holds vast copper deposits, accounting for 10% of the world’s known proven and probable reserves.

The miner’s new chief executive officer, Ruben Alvarado, has been tasked with boosting production levels.

Last year, the company produced 1.45 million tonnes of copper, a decline from the 1.618 million tonnes it churned out in 2021. And it is expected to produce this year nearly 1.315 million tonnes of copper, which would be the lowest level in 25 years.

Alvarado has said that fresh plans already in motion, will boost output in 2024 to around 1.34 million tonnes.

Satellite image of Chuquicamata’s division. (Image courtesy of Codelco.| Click on it to see it full size)

GEMOLOGY

Kremlin, facing diamond ban, says EU sanctions have ‘boomerang effect’

Reuters | November 20, 2023 

Red Square in Moscow, Russia (Stock Image)

The Kremlin, facing the prospect of a European Union ban on imports of Russian diamonds, said on Monday that EU sanctions tended to have a “boomerang effect” on those who applied them.


Kremlin spokesman Dmitry Peskov was commenting on a proposed EU ban on diamond imports from Russia as part of a new sanctions package against Moscow over the conflict in Ukraine.

Russia is the world’s biggest producer of rough diamonds by volume. Peskov told reporters such a move had been anticipated for a long time, but was likely to backfire.

“As a rule, it turns out that a boomerang effect is partially triggered: the interests of the Europeans themselves suffer. So far, we have been able to find ways to minimize the negative consequences of sanctions,” he said.

EU diplomatic sources said last week the proposal under discussion was to ban direct diamond imports from Russia from Jan. 1, and from March to implement a traceability mechanism that would prevent imports of Russian gems processed in third countries.

(By Mark Trevelyan; Editing by Gareth Jones)

EU proposes to ban Russian diamonds from start of 2024

Reuters | November 17, 2023 |

Polymetal’s Dukat Gold Hub in Russia. Credit: Polymetal.

The European Commission is proposing to ban imports of Russian diamonds and diamond jewellery from the start of 2024 as part of a new sanctions package to curb Russia’s ability to finance its invasion of Ukraine, a Commission proposal showed.


The proposal, under discussion by ambassadors of the EU’s 27 governments on Friday, also calls for an import, purchase and transfer ban on diamonds transiting Russia and Russian diamonds cut and polished in third countries, such as India.

The proposal said the ban applied to non-industrial natural and synthetic diamonds and diamond jewellery from January 2024. There would also be a progressive phase-in – from March 1 to Sept 1 – of an import ban of Russian diamonds when processed in third countries, including jewellery with Russian diamonds.

“This phasing-in of indirect import bans takes into consideration the need to deploy an appropriate traceability mechanism that enables effective enforcement measures and minimizes disruptions for market players,” said the proposal, seen by Reuters.

(By Philip Blenkinsop and Jan Strupczewski)

Lucapa puts Merlin feasibility study on back burner
Cecilia Jamasmie | November 20, 2023 | 

Merlin diamond project with Excalibur (foreground), Luanfal, Palomides, and Sacramore pipes. (Image courtesy of Lucapa Diamond.)

Australia’s Lucapa Diamond (ASX: LOM) has put the feasibility study for its Merlin project in Australia’s Northern Territory on hold due to what it called “unfavourable capital market and diamond price environments”.


The company it will now focus on assessing a smaller scale, lower cost path to development of the mine, which was once thought to have the potential to become Australia’s biggest commercial diamond operation.

Lucapa had originally expected Merlin to yield 2.1 million carats over its 14-year mine life, or about 153,000 carats a year.

The company, debt-free since July, said the alternate study will examine using available resources, such as the trial mining plant and front-end scrubber, to get Merlin into production.

“For the next 12 months we will focus on further strengthening our balance sheet. Rather than raise capital to fund the original Merlin development, we will focus on a lower cost pathway to development using existing resources,” managing director Nick Selby said in the statement.

The diamond market was one of the great winners of the global pandemic, as stuck-at-home shoppers turned to diamond jewellery and other luxury purchases. Sales this year have declined on the back of inflation in the US, by far the sector’s most important market, and China’s slowdown.

The drop in demand for polished diamonds, down about 20% this year, has triggered an even bigger collapse in prices of rough diamonds, which plummeted up to 35%, especially in the late summer and early fall.

Diamond producers, including De Beers — the largest by value —, and Petra Diamonds (LON: PDL) have suffered the effects of high inventory in the midstream.

Selby, who joined Lucapa in 2014, was appointed MD last month following a stint as interim CEO in August and September, replacing Stephen Wetherall who announced his resignation in July. Selby was previously chief operating officer of the company,

Lucapa has two producing mines in Africa: the 40%-owned Lulo mine, in Angola, and the Mothae mine in Lesotho, in which it has a 70% interest.

Swiss-based ARCORE finds rich lithium deposit in Bosnia

Reuters | November 17, 2023 

Bosnia and Herzegovina. Stock image.

Swiss miner ARCORE said on Friday its exploration in eastern Bosnia had found mineral deposit rich in lithium carbonate, magnesium and other minerals that are in demand in Europe.


The company said it has a strategic partnership with Canadian-German company Rock Tech Lithium to secure a reliable and long-term supply of lithium products from the Lopare mine to Rock Tech Lithium´s European converter operations.


“ARCORE is confident that it will be able to mine the raw materials in an environmentally and socially responsible manner from the end of 2026,” it said in a statement.

“The Lopare project has the potential to become one of the largest mines of its kind in Europe,” it added.

The company said that after working with local and international authorities and mining and sustainability experts, it had completed the exploration that lasted since acquiring the licence in 2018.

It plans now to apply for a concession to mine the deposit, foreseeing investment of several hundred million euros over the next few years, it said.

The deposit, located about 140 km north of the Bosnian capital Sarajevo, in the country´s autonomous Serb Republic, was scientifically estimated and confirmed by expert reports in 2022, and also by the regional mining and energy ministry this year, the company said.

It said that several European raw materials institutes and the European Lithium Institute (eLi) supported the project, as well as the German Mineral Resources Agency (DERA).

ARCORE said that international estimates and technological tests showed the total mineral resource base of the Lopare project at 1.5 million metric tons of lithium carbonate equivalent, 14 million tonnes of boric acid, 35 million tons of potash and 94 million tons of magnesium sulphate.

It said that its partnership with Rock Tech Lithium will be an important building block in the development of a regional and domestic value chain for electric vehicle batteries in Europe.

It also said that it will use the latest technology and the highest safety standards to minimize the environmental impact on air, soil and water.

People living in the region of Lopare deposit are suspicious of the project after protests just across the border in Serbia succeeded in 2022 on environmental grounds to revoke the licence granted to Rio Tinto for the Jadar lithium project.

(By Daria Sito-Sucic; Editing by David Evans)

Israeli strikes on Lebanon kill 8 including 2 journalists: media


AFP
Tue, 21 November 2023 

A Lebanese rescuer holds the bullet proof vest of one of two journalists working for Al-Mayadeen television killed in Israeli bombardment of southern Lebanon (KAWNAT HAJU)

Israeli bombardment of south Lebanon on Tuesday killed eight people, official media said, including two journalists from Beirut-based Al-Mayadeen television, the broadcaster reported, in ongoing violence at the Lebanon-Israel border.

Since the Israel-Hamas war began on October 7, the frontier between Lebanon and Israel has seen escalating exchanges of fire, mainly between Israel and the Iran-backed Hezbollah movement, but also Palestinian groups, raising fears of a broader conflagration.

The state-run National News Agency (NNA) reported "the deaths of three citizens -- two journalists and another civilian -- in enemy bombing" of the Tair Harfa area.

Al-Mayadeen said its correspondent Farah Omar, 25, and cameraman Rabih Maamari, 40, were killed.

Lebanon's army also said the trio were killed in "enemy bombing".

Israel's military said "soldiers operated against a threat" from a Hezbollah "launching area" in the area of Jebbayn, near Tair Harfa.

"We are aware of a claim regarding journalists in the area who were killed as a result of IDF (army) fire. This is an area with active hostilities, where exchanges of fire occur... The incident is under review," it said.

Al-Mayadeen director Ghassan bin Jiddo said the third civilian killed with the journalists collaborated with the channel.

"It was a direct attack, it was not by chance," Bin Jiddo said in an interview, noting it came after an Israeli government decision this month to block access to the website of Al-Mayadeen, known for its pro-Iran stance.

- Car targeted -

Elsewhere in south Lebanon, the NNA said "enemy aircraft raided inhabited houses in Kfar Kila, leading to the death of citizen Laiqa Sarhan, 80, and the wounding of her granddaughter", a Syrian national.

Hezbollah, a Hamas ally, said that "in response" to the attacks, its fighters targeted Israeli forces with guided missiles and a "military base" with Grad-type Katyusha rockets.

The NNA also reported that "the Israeli enemy attacked" a car between Qlaileh and Shaaytiyeh in south Lebanon, killing four people.

An official from the nearby Rashidiyeh Palestinian refugee camp, requesting anonymity as they were not authorised to speak to the media, said one of the dead was Khalil al-Kharraz, a senior leader in Hamas's military wing in Lebanon.

Hamas official Khalil Hayya condemned the strike on the car, without elaborating on who was killed, and told a Beirut press conference the group would issue a detailed statement Wednesday after an investigation.

A security source told AFP on condition of anonymity that the bodies were badly charred.

- 'No limit' -

Lebanese Prime Minister Najib Mikati expressed his "strong condemnation of the Israeli attack" on the journalists.

"This attack proves once more that Israeli crimes know no limit and that (Israel's) aim is to silence the media who expose its crimes and its attacks," Mikati was quoted as saying in a statement.

US State Department spokesman Matthew Miller said that "we are concerned by the reports that civilians including two journalists were killed in Lebanon".

"We have made clear we don't want to see the conflict in Gaza spread to Lebanon. That has been one of our top priorities," he told reporters in Washington.

Since the cross-border exchanges began, at least 100 people have been killed on the Lebanese side, according to an AFP tally, most of them Hezbollah combatants but including at least 14 civilians, three of them journalists.

On the Israeli side, six soldiers and three civilians have been killed, according to authorities.

On October 13, Reuters journalist Issam Abdallah was killed and six other journalists from AFP, Al Jazeera and Reuters wounded while covering cross-border fire.

Lebanese authorities have accused Israel of responsibility. The Israeli army said it was looking into the circumstances of the fatal strike.

bur/lg/srm

Israel strikes Lebanese aluminum factory, says Lebanon media

LONG WAR ON LEBANONS ECONOMY
Bloomberg News | November 18, 2023 |

Nabatieh, Lebanon. (Reference image by Abdallah Makke, Wikimedia Commons.)

Israel’s military struck an aluminum factory located in southern Lebanon around 4 a.m. local time on Saturday, Lebanese state media said.


The factory was in Nabatieh, close to the border with Israel, the National News Agency reported. It’s the first time the region’s been attacked by Israel since its 2006 war with Hezbollah, according to NNA.


Earlier, Hezbollah, a Lebanese-based militant group backed by Iran, said it downed an Israeli drone. It also said its fighters attacked Israeli soldiers gathering near the Lebanon-Israel border.


Hezbollah is designated a terrorist group by the US and supports Hamas, the group fighting Israel in the Gaza Strip. Both organizations are committed to the destruction of Israel.

Israeli and Hezbollah forces have been exchanging fire on a daily basis since Oct. 7, when the Israel-Hamas war erupted. So far, Hezbollah has refrained from an all-out attack on Israel.

(By Omar Tamo and Paul Wallace)

AUSTRALIA

Fortescue approves $750 million investment for three green projects

Reuters | November 20, 2023 

Credit: Fortescue Future Industries

Australia’s Fortescue on Tuesday approved an estimated total investment of about $750 million over the next three years for two green energy projects and one green steel project as the iron ore miner seeks to become a top-tier clean energy producer.


Fortescue approved investments in the US hydrogen hub in Phoenix, Arizona; the Gladstone 50 megawatt green hydrogen project in Queensland, Australia; and the Christmas Creek green iron trial commercial plant in Western Australia.

About $550 million will be used for developing an electrolyser and liquefaction facility in Phoenix, where first production of liquid green hydrogen is targeted for 2026.

The world’s fourth-largest iron ore maker, which is expanding into production of hydrogen from renewable resources under its Fortescue Energy unit, said it had also decided to fast-track projects in Brazil, Kenya and Norway.

Fortescue is intensifying its push into the US markets.

In the past few days, it has announced plans to set up an advanced manufacturing centre in Michigan and an office in New York, Fortescue Capital, to attract more investment to its green energy companies.

Under a plan to ramp up its green energy business, Fortescue said in August it would stop allocating 10% of its net profit to that unit. Instead, projects and investments would compete for capital allocation, with additional flows from outside investors.

Fortescue expects to hold stakes of 25% to 50% in projects with outside investors.

More details are expected to be unveiled at Fortescue’s annual shareholder meeting later on Tuesday.

(By Himanshi Akhand; Editing by Subhranshu Sahu and Richard Chang)

Fortescue sets up investment platform to fund green energy projects

Reuters | November 16, 2023 |

Andrew Forrest, chairman of Fortescue Future Industries. tours the outdoor Hydrogen Fueling Station and Bioreactor at the National Renewable Energy Laboratory. (Image by Joe DelNero, courtesy of NREL).

Australia’s Fortescue said on Thursday it has launched a new investment platform to attract more investment in its green energy projects as the miner pivots towards establishing itself as a major global supplier of green energy.


New York-based Fortescue Capital will be led by Robert Tichio and act as a fiduciary for third-party capital to complement the company’s finance teams in its energy and metals division, Fortescue said.


“Fortescue is taking its global pipeline of green hydrogen and green ammonia projects to final investment decision and in doing so, has communicated our intention and desire to bring additional equity investors onboard,” Fortescue Energy CEO Mark Hutchinson said.

The funding model for projects will differ based on the project and Fortescue expects to hold stakes of between 25% and 50% stake in projects with outside investors, the company said.

Fortescue, in recent years, has significantly stepped up its investment in renewable projects to cash in on the global transition towards green energy and decarbonization, but that has led to an exodus of high-level management and raised investor concerns.

Tichio joins Fortescue after over 17 years at Riverstone Holdings, a New York-based private equity firm. He will be joined by a leadership team with backgrounds across sustainable infrastructure, climate technology, energy and private markets.

(By Roshan Thomas; Editing by Subhranshu Sahu and Savio D’Souza)

Vale Canada, Sumitomo sign initial deal to sell 14% stake in Indonesian nickel miner

Reuters | November 17, 2023 |

Credit: Vale Indonesia

Mining company Vale Base Metals said its unit Vale Canada Ltd and Japan’s Sumitomo Metal Mining Co. Ltd signed an initial agreement on Friday to sell a 14% stake in their Indonesian nickel mining unit to Indonesia’s state miner.


Vale Canada and Sumitomo signed a heads of agreement to sell the shares to PT Mineral Industri Indonesia (MIND ID), the country’s state mining holding company, Vale Base Metals said in a statement.

Share divestment is a condition required by Indonesia to extend Vale Indonesia’s mining permit, which is currently due to end in 2025. Foreign investors are required to divest 51% of their stake to local buyers after a certain period of operation.

Vale to sell 14% stake in Indonesia unit

Upon completion, MIND ID will become the largest shareholder of Vale Indonesia with 34% of shares, up from 20%. Vale Canada and Sumitomo will hold 33.9% and 11.5% respectively, according to the statement, down from 43.79% and 15.03%.

Around 20% of Vale Indonesia’s shares are publicly traded.

A “balanced” management structure will be set up to maintain operational stability at the Indonesian unit, the statement said.

“We look forward to working within the new shareholding structure with our partners to support the country’s downstreaming ambitions and deliver strong economic value to our stakeholders and communities over the long run,” said Deshnee Naidoo, chief executive of Vale Base Metals.

Indonesia, which has major nickel reserves, is keen to develop batteries and electric vehicles to take advantage of its rich nickel reserves.

Vale Base Metals is committing around $10 billion of investment in Indonesia over the next decade.

(By Fransiska Nangoy; Editing by Kirsten Donovan)

Teck’s deal to shed coal comes at a perfect time

David Berman - The Globe and Mail | November 17, 2023 | 

Fording River is one of Teck’s four steelmaking coal operations located in the Elk Valley of British Columbia. (Image courtesy of Teck Resources.)

Teck Resources Ltd. (TSX: TECK.B) is set to become a pure-play metals producer after announcing a deal to sell its steelmaking coal assets to a consortium led by Glencore PLC. Teck without coal could be an investor’s dream.


The Vancouver-based miner’s dramatic repositioning comes at a good time for investors: The United States and China this week declared their support for ramping up renewable energy capacity in a big way, which would drive global demand for the copper that Teck mines in British Columbia, Chile and Peru.

The No. 1 and No. 2 economic powerhouses – antagonists over just about everything but also the world’s largest polluters – made the announcement through a joint statement issued ahead of a meeting this week between U.S. President Joe Biden and Chinese leader Xi Jinping near San Francisco.

While their support merely puts the two countries in line with a previous declaration from G20 leaders and recent recommendations from the International Energy Agency, it nonetheless underscores the case for renewables and reinforces thebullish argument in favour of base metals.

Many observers already believed that the shift toward renewables assured long-term demand for the minerals required in wind turbines and solar installations, as well as battery electric vehicles. But the joint statement from the U.S. and China helped bolster their confidence.

If the world is successful in tripling its renewable energy capacity by 2030, an average of 1,089 gigawatts will be added to the global grid each year, for a combined total of 7,724 GW, according to Citigroup analysts.

That’s the equivalent of building more than 337,000 utility-scale wind turbines every year, according to the U.S. Department of Energy. Soaring demand will put a strain on the global supply of minerals – and that’s what investors are counting on.

In 2025, the demand from additional power generation under the G20 target scenario would amount to 2,650 kilotons of copper, or 15 per cent more than Citigroup’s base case estimate. By 2030, demand would require 5,400 kt, or 85 per cent more than the base case – even if newly built renewable projects use copper more efficiently.

Under this bullish scenario – which Citigroup analyst Tom Mulqueen pegs at a 20% probability of unfolding – copper prices could zoom to an average of $15,000 a ton by 2025, after oversupply issues in the near-term dissipate. That would mark an 81% increase from $8,265 a ton on the London Metal Exchange on Thursday.

Even Mr. Mulqueen’s base case, with a probability pegged at 60 per cent, sees copper prices rising 45% from current levels and gives investors a big reason for applauding Teck’s streamlined ambitions.

The stock’s valuation has often felt the drag of steelmaking coal. Though the fossil fuel provided about 60% of Teck’s annual revenue and nearly 75% of its gross profit in 2022, it has had less appeal to investors betting on cleaner sources of energy.

Consider that Teck shares currently trade at 9.4 times estimated earnings, according to Bloomberg. That’s cheap next to U.S.-based Freeport-McMoRan Inc., which is focused on copper, gold and molybdenum and trades at nearly 24 times estimated earnings.

Analysts expect that Teck’s valuation will rise as investors consider a company where copper will drive an estimated 87% of EBITDA (earnings before interest, taxes, depreciation and amortization) by 2025, assuming the Glencore deal meets regulatory approval next year. Zinc, another critical mineral that can be used in energy storage, will account for the other 13%.

“Given the prolonged uncertainty with respect to the future of the coal business, this transaction serves to remove a meaningful overhang from the shares,” Orest Wowkodaw, an analyst at Bank of Nova Scotia, said in a note.

Investors might also see an influx of cash from the US$8.9-billion deal. Even if Teck puts some of the proceeds toward debt repayment, Canaccord Genuity analyst Dalton Baretto estimates that there should be C$8.5-billion, or C$16.37 per share, remaining.

This money will be used for development projects and acquisitions, or returned to shareholders in the form of special dividends.

Investing in a stock that is exposed to strong growth in renewable energy looks like a sound long-term bet. And if the stock comes with a big payout after converting coal to cash? Even better.

Glencore bets on US love of coal with new fossil fuel giant

Bloomberg News | November 16, 2023 | 

The Elkview coal mine. Teck Resources photo.

Glencore Plc is preparing to unleash a new coal supermajor on the New York market that would – based on recent performance – churn out bigger profits than the current top 10 US listed coal miners combined.


The world’s No. 1 shipper of thermal coal on Tuesday unveiled the first step in the process, with a deal to buy control of Teck Resources Ltd.’s massive steelmaking coal business. Glencore plans to combine those mines with its own power-station coal assets into a new company it will spin off to its own shareholders within two years of the purchase closing.


The combined pure-play coal business will be far larger than anything US or European investors have seen before. Glencore made almost $18 billion last year mining coal, albeit during an unprecedented run in prices after Russia’s invasion of Ukraine created an energy crisis. Teck’s coal mines earned around $5 billion. In contrast, the US’s 10 biggest listed coal miners made less than $8.5 billion in combined profits in the same year.

The new company will produce almost 100 million tons of thermal coal every year — equal to roughly 10% of seaborne trade of that fuel — while churning out about 34 million tons of coking coal. The only peers of a similar size are Indian and Chinese producers, but they focus on providing supply for domestic power stations and steel mills, rather than trading into global markets.

“This big new coal thing that Glencore plans to spin into New York is now comparable with the mining monsters of China, and incomparable with anything in Western markets,” said Tom Price, head of commodities strategy at Liberum Capital.

Glencore’s choice of New York highlights a growing fault line between investors in the US and Europe. While many European institutions are increasingly shunning fossil fuels and the companies that produce them, Glencore is betting that American shareholders are still hungry for the dirtiest fuel.

“You have currents in the US that I haven’t noticed in Europe, where investors are still going, ‘Hey, I’ll take the other side of this bet. Coal will be a part of the energy mix for many years to come,’” said Lucas Pipes, an analyst at B. Riley Securities Inc. Appetite for coal is “probably the highest it’s been in many years.”

That thesis will be put to the test in the next few years. Glencore says it will make the move within two years of the deal completing, which is currently expected in the third quarter of next year. It said the strategy remains for the coal business to run its mines until they’re depleted by 2050.

While the US market currently seems receptive to coal, investors’ views on who should own and manage mines as they’re run down has changed in the past, and there remains a risk that attitudes could shift over the next couple of years.
Combined value

Earlier this year, RBC Capital Markets forecast the combined coal units were worth about $32.5 billion and would be valued at about $25 billion next year as prices normalize.

By comparison, the US’s current coal miners are tiny. The biggest listed coal company is currently Alpha Metallurgical Resources Inc., which has a market cap of just $3.3 billion. More famous coal names such as Peabody Energy Corp. and Arch Resources Inc. are both worth around or less than $3 billion.

A massive coal company like Glencore’s proposal would likely attract fund managers that have shunned the relatively small coal sector, Pipes said.

“What I often hear from investors on coal is, ‘Hey, Lucas, this is a small sector. Do I really want to spend the time to research if there’s only $15 billion of market capitalization to put to work?” he said. “Glencore would be much, much larger.”

(By Thomas Biesheuvel and Jacob Lorinc)

What investment experts are saying about the Teck-Glencore coal deal

Iva Poshnjari, BNN Bloomberg

Teck Resources Ltd. will sell its coal business to Glencore Plc. in a multibillion dollar deal which could offer great value to shareholders, according to an investment advisor.

Swiss miner Glencore will pay Vancouver-based Teck US$6.93 billion for a 77 per cent stake in its coal business while steelmakers Nippon Steel Corp. and Posco will hold the remainder of the company. The deal requires approval from Canada’s federal government to move forward.

“I think it’s a good deal for shareholders, perhaps shareholders might even get some of that money given back to them,” Allan Small, senior investment advisor at IA Private Wealth, told BNN Bloomberg in an interview on Tuesday.
Teck has considered selling its coal assets for some time and the news of Tuesday’s sale to Glencore could allow Teck to strengthen its business, Small added.

"They’re going to refocus, fix their balance sheet, improve their balance sheet, pay down some debt and … hopefully give some money back to shareholders,” Small said.

The deal will also allow Teck to focus its efforts on other commodities, such as copper, which is positioned to be in great demand amid the clean energy transition, he added.

The company's stock surged following the deal announcement, but Small noted that shares of Teck have been under pressure for some time due to a challenging economic environment.

"Strong dollar, higher interest rates (are) usually not good for commodities in general," Small explained.

Small sees this overall dip in Teck's stock performance as a buying opportunity, even more so now that company is set to receive an influx of proceeds from the sale of its coal business.

“I think the valuations are very reasonable,” he said.

‘IT ALL DEPENDS’

Another investment expert said he views the deal as a positive move for Teck depending on what the company does with the influx of cash.

“It’s probably not a bad move, of course it all depends on how they redeploy the cash they get,” Lorne Steinberg, president of Lorne Steinberg Wealth Management, told BNN Bloomberg in an interview on Tuesday.

He added that commodity stocks such as Teck should not be highly indebted, and he thinks it would be wise for the company to use the incoming funds to improve its balance sheet.

Steinberg expressed some caution over Teck’s future growth plans, which focus on producing copper as the next “big” mineral. 

“I’m always a little wary when the next mineral is going to be the big mineral, like lithium and everything else, because we’ve seen that game play out before,” he said.

Canada’s Lassonde ‘mystified’ by Teck choice of Glencore bid for coal unit

Reuters | November 15, 2023 | 

Pierre Lassonde – Image from YouTube

Canadian businessman Pierre Lassonde said on Wednesday that he is “mystified” by Teck Resources’ decision to sell its coal unit to a Glencore-led consortium for $9 billion because his group bid the same price.


“We put together an offer that was very, very competitive, it was in the best interest of Teck shareholders, Canada…the employees,” Lassonde said in an interview.

“And it was a holistic solution with the same price tag.”

On Tuesday, Teck agreed to sell its steelmaking coal unit to the group led by Switzerland-based Glencore.

Lassonde said his consortium included Fairfax Financial Holdings founder Prem Watsa and Stelco Holding Inc CEO Alan Kestenbaum, both in their individual capacities. Their offer was credible and comparable to what Teck’s board accepted from Glencore, he said.

Teck, Watsa and Kestenbaum did not immediately respond to requests for comments.

(By Divya Rajagopal; Editing by Denny Thomas and Cynthia Osterman)