The West’s Nuclear Power Revival Could Be Slower Than Hoped

By Tsvetana Paraskova - Mar 21, 2024

• At the COP28 climate summit at the end of last year, the United States and 21 other countries pledged to triple nuclear energy capacities by 2050.
• 
  
• Most Western governments – with the notable exception of Germany – are now betting on nuclear power to help them with the carbon emission targets.
• 
  
• The West has seen in recent years several cautionary tales of huge delays and cost overruns in looking to boost nuclear capacity.

Western nations may be getting ahead of themselves in their ambition to swiftly roll out new nuclear power capacity in the current push to reduce dependence on Russian uranium and meet net-zero targets with more nuclear-generated electricity.   

At the COP28 climate summit at the end of last year, the United States and 21 other countries pledged to triple nuclear energy capacities by 2050, saying that incorporating more nuclear power in their energy mix is critical for achieving their net zero goals in the coming decades.   

The United States, alongside Britain, France, Canada, Sweden, South Korea, Ghana, and the United Arab Emirates (UAE), among others, signed the declaration at the COP28 climate summit in Dubai.

“The Declaration recognizes the key role of nuclear energy in achieving global net-zero greenhouse gas emissions by 2050 and keeping the 1.5-degree Celsius goal within reach,” the U.S. Department of State said

John Kerry, President Joe Biden’s climate envoy, says there are “trillions of dollars” available that could be used for investment in nuclear energy.

“We are not making the argument to anybody that this is absolutely going to be the sweeping alternative to every other energy source — no, that’s not what brings us here. But you can’t get to net-zero 2050 without some nuclear power,” he told reporters at the time.

“Too Optimistic”

Most Western governments – with the notable exception of Germany – are now betting on nuclear power to help them with the carbon emission targets.

But many may have become too optimistic they would see a fast rollout of nuclear reactors and capacities in an industry notoriously known for years of delays and huge cost overruns.  

“Clients, governments and ourselves as the industry players . . . we all become too optimistic,” Ian Edwards, chief executive of Canada’s engineering giant AtkinsRéalis, told the Financial Times.

“We have this optimism bias towards being able to deliver faster.

The stakeholders need to plan better and get the execution phase done right, according to the executive of the company, which manufactures the CANDU reactor, the only nuclear reactor that doesn’t need enriched uranium.

The CANDU technology stands for Canada deuterium uranium because it uses deuterium oxide, or heavy water, as a moderator and coolant and uses natural – not enriched – uranium as a fuel.

The West has seen in recent years several cautionary tales of huge delays and cost overruns in looking to boost nuclear capacity. Two of the glaring examples are the UK’s Hinkley Point C project by French energy giant EDF and the Vogtle nuclear power plant in the U.S. state of Georgia.

Early this year, EDF pushed back – again – the probable operational start at Hinkley Point C to 2029-2031, depending on various scenarios, compared to the original intention to have the first unit at the plan running in 2025. The costs have gone through the roof – to an estimated $43.5 billion (£34 billion), from $23 billion (£18 billion) budgeted initially.

In Georgia, a new reactor at the Vogtle nuclear power plant began commercial operation last summer in what was the first new nuclear reactor to start up in the United States since 2016. Construction at the two new reactor sites at Vogtle began in 2009. Originally expected to cost $14 billion and begin commercial operation in 2016 (Vogtle 3) and 2017 (Vogtle 4), the project ran into significant construction delays and cost overruns. The total cost of the project is now estimated at more than $30 billion.  

New Technology Promises Revival of Nuclear Power

AtkinsRéalis, whose natural-uranium reactor design differentiates it from the competition, has a sales pitch advantage because of the Russian dominance in enriched uranium supply, Edwards told FT.

But he warned that demand for AtkinsRéalis’s technology is likely to exceed the company’s capacity to meet it.

Last year, AtkinsRéalis’s revenues from its nuclear division rose by 16.5% compared to 2022, thanks to higher sales volumes from Europe, Asia, and the United States.

Despite the West’s attempts to reduce its reliance on Russian uranium, the EU doubled its imports of Russian nuclear fuel last year, mostly due to former Soviet bloc countries such as the Czech Republic and Slovakia importing Russian fuel for their Soviet-era nuclear plants, NGO Bellona said in an analysis last week, citing data from Eurostat and the UN’s international trade service Comtrade.

The United States is doubling down on its own supply of nuclear fuel and technology, including innovative reactor designs

Soaring uranium prices and a supply squeeze on the global uranium market have prompted U.S. uranium producers to revive abandoned mines that haven’t been operational in more than a decade.

Early this year, Uranium Energy Corp said it would restart uranium production at its fully permitted site in Wyoming as the resurgence in nuclear power has led to a new bull market in uranium.

“Uranium market fundamentals are the best the industry has witnessed,” Uranium Energy president and CEO Amir Adnani said in January.

The U.S. is also backing advanced nuclear technology and small-scale reactors, hyped to be the future of nuclear energy.

This week, TerraPower, a company working on small-scale nuclear reactor development backed by Bill Gates, said it would begin construction on its next-generation nuclear reactor in the United States as soon as June.

TerraPower has been developing the Natrium technology for advanced reactors, which features a sodium-cooled fast reactor with a molten salt-based energy storage system. The Natrium demonstration plant will be built near a retiring coal facility in Kemmerer, Wyoming.

By Tsvetana Paraskova for Oilprice.com

Uranium’s 22% price plunge is bottoming out on nuclear future

Bloomberg News | March 21, 2024 |

Uranium yellowcake. (Image: Energy Fuels Inc.)

Uranium may have lost some sizzle after an electrifying 10-month rally, but analysts and investors aren’t losing faith in the long-term prospects of the nuclear fuel.


After a 22% decline over six weeks, industry experts and analysts say that the uranium market has likely set a new floor thanks to a strong demand outlook.

“We have reached a bottom,” said Jonathan Hinze, president of UxC, a nuclear industry research firm. “The fundamentals are still strong, with increased demand and supply that hasn’t fully responded.”


Uranium futures are trading at $88.50 a pound in New York — down from the 16-year high reached in February, but still well above last year’s average price of $66.60 a pound.

There are indicators uranium’s new floor is at around current levels, Cantor Fitzgerald analyst Mike Kozak said in an interview, predicting that fundamental buyers will come back into the market and drive up prices again.

Bullish investors are betting on the long-term prospects of the radioactive metal due to a growing supply gap and increased demand as governments worldwide turn to nuclear power to counter climate change. Such demand comes as Canada’s Cameco Corp. and Kazakhstan’s Kazatomprom, which together account for half of global supply, warned of supply setbacks in the coming years.

Kazatomprom, the No. 1 producer, said during its March 15 earnings call that it is projecting a 21 million pound supply deficit in 2030 — a shortfall that would multiply to 147 million pounds by 2040.

Geopolitics may also affect the supply outlook. The US introduced a bill in December that would ban imports of enriched Russian uranium — the kind used to fuel nuclear reactors and weapons. The bill needs to be passed by the US Senate and signed by President Joe Biden to be enacted.

Still, with other uranium miners looking to dust off mothballed operations in response to higher prices, there are risks a rally could fizzle out quickly, much in the same way that a boom in battery metals markets turned to bust over the past couple years.

Treva Klingbiel, president of uranium price provider TradeTech, said she doesn’t see demand for nuclear fuel easing any time soon.

“We have a number of geopolitical factors that have a really significant influence on buyer behavior, even though fundamentally nothing has changed” she said. “Buyers can use the spot to tell them the sentiment of the day, but must look at the long-term market to see that it is marching steadily up, it hasn’t taken a hiccup at all.”

(By Maria Clara Cobo)

ECOCIDE

Mexico’s Oil Giant Delays Platform Repairs Despite Methane Leaks

By Charles Kennedy - Mar 22, 2024

Pemex, Mexico’s state-owned oil firm, has been putting off urgent equipment repairs on a major producing platform in the Gulf of Mexico, despite being aware of the faulty components and despite methane leaks from the facility being detected by third parties, Reuters reported exclusively on Friday, citing engineers and internal company documents.

Pemex has struggled financially for years and has run up huge debts, while its safety and environment-protection record has been terrible in recent years.  

Last summer, a fire on an offshore platform operated by Pemex led to the shut-in of 700,000 barrels of oil. Two years earlier, during maintenance season, the company had a fire erupt in an offshore gas-processing plant in the Bay of Campeche. The fire killed five people and shut in some 400,000 barrels per day (bpd) in production.

Now Pemex’s Zaap-C platform could be a disaster waiting to happen. The platform needs urgent repairs amid leaking methane in the atmosphere.

However, engineers have told Reuters that the Mexican state oil firm hasn’t undertaken repairs yet and the faulty equipment remains at the platform, more than six months after an internal report seen by Reuters assessed the need for repairs in June 2023. 

That’s despite the fact that data from the United Nations Environment Programme’s (UNEP) International Methane Emissions Observatory showed methane leaks at the end of last year.

The same platform, Zaap-C, was found to have leaked methane plumes in 2022 when a team of scientists used satellite data to detect methane plumes. This was the first time that individual methane plumes from offshore platforms were mapped from space, the European Space Agency said in 2022.

Meanwhile, Pemex said earlier this month that it plans to reduce its emissions and turn into a net-zero company by 2050, starting with a 30% reduction over the next six years.

The target is part of a new sustainability report that Pemex released this week that “establishes the company’s commitment toward ethical and sustainable production, and reinforces Pemex’s role as an agent of change in the nation’s energy sector when it comes to climate action,” according to chief executive Octavio Romero, as quoted by Bloomberg.  

By Charles Kennedy for Oilprice.com

Venezuelan Oil Refinery Halts Units After Fire

By Julianne Geiger - Mar 22, 2024, 

Venezuela's Cardon refinery halted its distillation units on Friday following a fire, anonymous sources told Reuters.

A fire that began with a bang following a gasoline leak has been put out, but not before reaching a power substation in the refinery complex. This triggered a power outage and the subsequent shutdown of three crude distillation units.

The Cardon refinery is part of the Paraguana refining center—the single largest refining center in the region with a processing capacity of nearly 2 million barrels. The complex also includes the Amuay refinery, which was subject to an explosion sparked by a water leak in 2020—and that was just the latest major incident.

Refinery operators are attempting to bring the crude distillation units back online at Cardon, the sources said.

"(The leak) occurred after 4 in the morning and was reported immediately. The firefighters arrived to control it. The staff proceeded to shut down the plant and, while the plant was being stopped (...) the fire broke."

Venezuela's refining glory days are squarely behind them, crippled by corruption, lack of maintenance, and insufficient investments for more than two decades. The lack of attention to its refineries has resulted in accident after accident and working capacity that is just a fraction of the nameplate capacity.

The result of Venezuela's refining industry mismanagement is an end to cheap, abundant retail fuel for its citizens in favor of high fuel imports. It also resulted in a 2020 agreement with Iran to get its help with restoring its refining capacity to its former glory. That deal was largely scuppered, however, when Venezuela was unable to live up to its end of the bargain.

Venezuela's refining industry has also been hampered by U.S. sanctions, which have been given a temporary reprieve that is set to expire in April.

By Julianne Geiger for Oilprice.com

PetroChina Buys Venezuelan Crude for New Mega Refinery

By Tsvetana Paraskova - Mar 22, 2024

PetroChina is welcoming this weekend a cargo of Venezuela’s Merey crude for use at a new huge refinery after the U.S. eased sanctions on Venezuelan oil exports a few months ago.

A cargo of Merey is due to arrive in China for the state Chinese energy giant on Saturday, according to Bloomberg’s ship-tracking data and sources.  

Merey is currently being offered at a discount of around $10 per barrel to Brent, trade sources told Bloomberg.

PetroChina will use the Venezuelan heavy crude at its newly commissioned Guangdong refinery, in which Venezuela’s state oil firm PDVSA was a joint venture partner. The Merey grade was expected to be half of the crude supply, but PetroChina dropped PDVSA as a partner in 2019 due to the grave financial troubles of the Venezuelan company.

Since the refinery was commissioned in 2023, PetroChina has bought heavy crude from Canada, Ecuador, and Colombia to replace previously expected Venezuelan volumes.

The eased U.S. sanctions now give PetroChina the chance to buy Venezuela’s Merey, at a reported discount of around $10 a barrel to ICE Brent.

However, if the U.S. were to re-impose sanctions on Venezuela’s oil exports, PetroChina is unlikely to continue buying Venezuelan crude, sources with knowledge of the matter told Bloomberg.

At the end of last year, the U.S. introduced a temporary sanctions relief from October 2023 to April 2024 now allows the production, lifting, sale, and exportation of oil or gas from Venezuela, and the provision of related goods and services, as well as payment of invoices for goods or services related to oil or gas sector operations in Venezuela.

As a result, the top international oil trading houses are back in the business of trading with oil from Venezuela.

China’s state oil and chemicals giant Sinochem has also bought a rare cargo of Venezuelan crude, trade sources told Reuters in December, as Chinese state-owned firms look to acquire cheaper crudes without fear of secondary sanctions now that the U.S. has eased the restrictions on Venezuela.

By Tsvetana Paraskova for Oilprice.com

MAGA Alaska governor calls on Biden to update mine permit process

"DRILL BABY, DRILL"

Reuters | March 20, 2024 |

(Image courtesy of Pebble Partnership.)

Alaska Governor Mike Dunleavy called on President Joe Biden on Wednesday to update and streamline the US mine permitting process in order to boost domestic production of critical minerals and reduce dependence on foreign nations.


The push echoes calls from the mining industry for clarity on how permits can be obtained for mines that produce copper, lithium and other energy transition minerals. Executives have long complained the US process can be complex, expensive and opaque due in part to a federal mining law enacted in 1872.

“Our message to the Biden administration is, ‘Do everything you can to do everything here in America. Get your permitting processes streamlined,'” Dunleavy told Reuters on the sidelines of the CERAWeek energy conference in Houston.

It is “somewhat nonsensical,” the governor said, that Biden has pushed for greater adoption of electric vehicles – which require far more critical minerals to build than internal combustion engines – but has blocked Northern Dynasty’s Pebble copper and gold mining project.

“If we don’t get our permitting processes together, if we don’t start to use data and science again instead of emotion, this chaos is going to continue,” he said.

Dunleavy sued Biden last week for the president’s 2023 decision to block Pebble. The suit seeks more than $700 billion, an amount that the governor says the state will lose in economic development without the mine. Dunleavy tried unsuccessfully last year to have the US Supreme Court overturn Biden.

Vancouver-based Northern Dynasty itself sued Biden on Monday.

The proposed Pebble mine would have “unacceptable and adverse effects on certain salmon fishery areas” in Alaska’s Bristol Bay, the US Environmental Protection Agency said last year.

Dunleavy said he believes the mine and the state’s salmon fishers can co-exist.

“The science is there to be able to develop the mine responsibly,” he said. “We can put the safeguards in, and that’s why I’m a supporter.”

Lisa Murkowski and Dan Sullivan, Alaska’s two Republican US Senators, oppose Pebble, which Dunleavy acknowledged is a hindrance.

“However, my job as the governor is to advocate for our state, advocate for the development of our state lands or minerals, and advocate for the prosperity of our people,” he said.

Ambler road

Dunleavy, who has endorsed his fellow Republican Donald Trump against Democrat Biden in the 2024 US presidential election, is also pushing Biden to approve the construction of an access road to the prospective Ambler mining district in northern Alaska.

The Ambler project seeks to open a remote area rich in copper, zinc and lead and could yield deposits of rare earths used in weapons manufacturing. Trilogy Metals is one of the region’s potential developers.

“I hope it’s approved this year. But if it’s a post-election decision and there’s a new administration, I hope it’s approved immediately,” Dunleavy said.

(By Ernest Scheyder; Editing by David Gregorio)

France sets end March deadline for New Caledonia nickel deal

Reuters | March 21, 2024 | 

Coast of New Caledonia. Stock image.

French Finance Minister Bruno Le Maire on Thursday set an end of month deadline for New Caledonia to back a state bailout deal for the French territory’s nickel industry, ruling out an improved offer.


The French government has been holding talks to salvage the South Pacific territory’s loss-making nickel industry and has drawn up a deal to continue providing support.

“I’m calling for the nickel pact to be signed by the end of March … as it was drafted,” Le Maire told journalists. “Let there be no ambiguities, there is no question of changes.”

New Caledonia President Louis Mapou has criticized the deal as being insufficient, but has nonetheless put it to the territory’s congress for a vote on March 28.

Under the proposed deal, the French state would in particular subsidize energy prices alongside local authorities up to 200 million euros a year and invest in electricity production benefiting local nickel plants.

With local producers facing cheaper competition from Indonesia, the state aid would help lower their production costs and allow them to become profitable, Le Maire said.

The nickel firms would also commit to supplying more of their output to Europe, Le Maire said, as the region tries to secure minerals such as nickel to make electric vehicle batteries.

New Caledonia has three nickel processors – KNS, Prony Resources and SLN – that have been on the verge of collapse due to high costs, political tensions and weak international prices linked to Indonesian competition.

Mining group Eramet, the majority shareholder of SLN, this month reached an agreement with Paris to remove from its balance sheet hundreds of million of euros of debt related to SLN.

Paris had been seeking to finalize a deal with the nickel companies and local authorities in January to overhaul the industry but an agreement has proved elusive, partly due to parallel negotiations over constitutional reform.

France has offered loans to help avert the collapse of the nickel processing firms. But Eramet has refused to inject more funds into SLN while KNS co-owner Glencore last month suspended output at the KNS processing plant while it seeks a buyer for its stake.

(By Gus Trompiz and Leigh Thomas; Editing by Alison Williams)

India’s Jindal takes on operations at Venezuela’s largest iron ore mill

Bloomberg News | March 21, 2024

Credit: Ferrominera Orinoco

India’s Jindal Steel & Power Ltd. has taken over operations at Venezuela’s largest iron-ore complex, the first for a private-run firm in the South American country’s heavy industry in over a decade, just months after striking a deal with the Nicolás Maduro government.


Jindal officials are carrying out inspections at iron-ore plants of CVG Ferrominera Orinoco, according to two people familiar with the process, who asked not to be named as the information isn’t public. The company, which is controlled by state-owned conglomerate Corporacion Venezolana de Guayana, has five plants that produce iron-ore pellets and briquettes that serve as raw material for steelmaking.

Jindal aims to export 600,000 metric tons of the raw material per month by the end of the year, investing an initial $800,000 to upgrade existing equipment, according to one of the people. Terms of the deal aren’t clear since neither the Venezuelan government nor New Delhi-based Jindal have confirmed the arrangement.

Venezuela’s information ministry and Jindal didn’t respond to repeated requests for comment.

Venezuela’s partnership with Jindal is a departure from the government’s longstanding reluctance to involve private firms into its tightly held, impoverished mining industry.

In the mid-2000s the late president Hugo Chavez reversed a privatization process started by previous governments for state-owned gold, steel and cement companies. The measure saw the exit of Luxembourg’s Ternium SA, Switzerland’s Holcim AG, Mexico’s Cemex SAB and Canada’s Crystallex International Corp. among others.

After 18 years, Maduro now seeks to reinstate foreign partnerships.

Ferrominera has an annual installed capacity of 25,000 tons of iron ore and proven reserves of 4.2 million tons. Its plants have been running below capacity after years of lack of investment and a power crisis that in 2009 forced the company to cut production to save energy.

The company’s output has fallen over the years, from 15.6 million metric tons in 2001 to 5.7 million tons in 2017, according to the latest figures by the Venezuela Iron and Steel Institute.

The country’s metallurgy sector has suffered setbacks due to expropriations and underinvestment to the point that it has “practically disappeared,” according to a 2023 report by the Venezuela mine engineering association. Since 2000, the number of private companies in the sector has fallen from 1,200 to 70.

(By Fabiola Zerpa)

Glencore halts major zinc-lead mine in Australia after heavy rainfall

Reuters | March 21, 2024 |

Glencore’s McArthur River zinc-lead mine in the Northern Territories, Australia. 

Image: Glencore

Glencore Plc has halted operations at its McArthur River zinc and lead mine (MRM) in Australia following heavy rainfall this week, the company said on Thursday.


The suspension could exacerbate a tightened supply of zinc concentrates, feedstock to make refined zinc, which is mainly used to galvanise steel to protect it from corrosion.

“MRM has temporarily ceased operations as we monitor flooding in the region and assess impacts onsite at our operations,” Glencore said in a statement.

McArthur River mine is one of the world’s biggest zinc and lead operations. It produced 262,200 tonnes of zinc in concentrates and 50,400 tonnes of lead in concentrates last year, according to Glencore’s production report.

The site experienced rainfall this week which exceeded the previous record dating back about 50 years to 1974.

Also backed by Glencore, Peruvian zinc, lead and silver miner Volcan suspended three of its mines in the country earlier this week as it works on updating an operating permit for its Rumichaca tailings dam.

Delay in the start of major Russian zinc mine Ozernoye, suspension of Europe’s biggest zinc mine Tara, also led to a lower supply of mined zinc.

(By Julian Luk; Editing by David Evans)

NO! DEEP SEA MINING

EU to keep tabs on Norway deep sea mining efforts

Bloomberg News | March 21, 2024 |

The area opened to exploration covers about 280,000 square kilometres (108,000 sq. miles), about the size of Ecuador or the state of Nevada. (Image courtesy of Empetre | Flickr Commons.)

The European Union will monitor Norway’s progress in exploring the deep sea bed for potential mining of critical raw materials as the bloc seeks to reduce its dependence on China.


Norway is one of the first countries to formally authorize seabed mining activities in its waters after its parliament backed plans in January to prospect for minerals across 280,000 square kilometers (108,000 square miles) of its Arctic continental shelf.

“We will be attentive to the developments of deep sea mining in Norway and also around the world,” Maros Sefcovic, the bloc’s green deal chief, said at a press briefing. “Norway is one of the countries which is very careful when it comes to the protection of the environment.”

The nation meanwhile signed a memorandum of understanding with the EU on Thursday to develop land-based raw materials and Sefcovic didn’t rule out potential further collaboration in the future.

Deep-sea mining may be inevitable, says UN regulator

Sefcovic added that in May the EU would open a call for proposals for prospective mining projects for key raw materials from friendly countries as part of its plans to protect its supply chains during the transition to net zero by the middle of the century.

In trying to shift away from Russia for fossil fuels and China for key raw materials, the EU has boosted its reliance on Norway, which has an abundance of both.

But scientists have condemned sea bed mining and caused for a moratorium, citing a lack of data on its environmental and climate impacts. Jan Christian Vestre, Norway’s trade minister, defended the move.

“We need to extract more minerals for the green and digital transition,” he said. “We’re also talking about our resilience and strategic autonomy. We don’t want to be so dependent on countries from other parts of the world.”

(By John Ainger)

Seabed mining regulator meets as critical minerals drive heats up

JUST SAY NO!

Bloomberg News | March 22, 2024 | 

Credit: UN Environment Programme

A marine scientist has emerged as a new candidate to lead the International Seabed Authority. If elected, she could represent a shift in how the UN-affiliated organization that regulates deep sea mining operates. It’s a high-stakes year for the nascent industry, as pressure mounts on the ISA to finalize mining regulations and as more countries focus on shoring up their supply of critical minerals used to make electric vehicle batteries and other technologies.


During a two-week meeting of the ISA’s policymaking Council that kicked off on Monday, Brazil’s delegate — speaking on behalf of 29 Latin American and Caribbean member nations — announced the candidacy of Brazilian oceanographer Leticia Carvalho for the position of secretary-general of the organization’s administrative arm, known as the Secretariat. The ISA’s 168 member nations and the European Union will decide on the next secretary-general at what is expected to be a pivotal meeting in July.

“I do believe that this is the most important year for the Authority,” said Olav Myklebust of Norway upon his election Thursday as the president of the ISA Council for 2024.

If elected, Carvalho would likely represent a marked change from the administration of current Secretary-General Michael Lodge, whose second four-year term ends in December. A UK lawyer, Lodge has disparaged environmental opposition to mining deep ocean ecosystems for valuable minerals and drawn criticism for his closeness to mining contractors the ISA regulates.

The choice of the next secretary-general could have significant economic and environmental consequences for deep sea mining, if regulations are ultimately approved. The ISA’s charter gives the person in that role authority over the Secretariat’s operations and its dealings with mining companies. Since member states usually only meet twice a year, the secretary-general would handle day-to-day decisions about how to respond to a mining accident, for example. The secretary-general also personally negotiates the terms of confidential contracts with mining companies.

Pressure is mounting on the ISA to finish its decade-long effort to enact regulations amid growing opposition to mining fragile and biodiverse deep sea habitats for cobalt, nickel and other metals. Lodge, who has worked at the ISA since its establishment in 1994, has not yet indicated whether he’ll seek re-election.

Carvalho runs the marine and freshwater branch of the UN Environment Programme in Nairobi and previously served as a Brazilian federal environmental official.

Greenpeace and other accredited ISA observers haven’t taken a position on Carvalho’s candidacy. “As the regulator of deep sea mining, the head of the ISA — as well as all its members — need to focus on what is threatening the oceans and take action to stop these threats,” Louisa Casson, a Greenpeace deep sea mining campaigner, said from ISA headquarters in Kingston, Jamaica.

The 36-member-state Council is meeting this month amid a flurry of recent developments around seabed mining. On the first day of the gathering, Denmark became the 25th ISA member nation to call for a pause or moratorium on mining due to a lack of scientific knowledge about seafloor ecosystems.

While the US only attends ISA meetings as an observer — it declined to ratify the 1982 UN treaty that gives the ISA jurisdiction over the seabed in international waters — US interest in deep sea mining is growing. The Metals Company (TMC), an ISA mining contractor, has been lobbying US politicians, some of whom are in turn framing deep sea mining as necessary to reduce reliance on China for critical minerals. China controls five ISA exploration contracts that allow it to prospect for minerals, the most of any nation.

There are already signs that the US may be keen to follow in the footsteps of countries like Norway, which in January approved seabed mining exploration in its territorial waters to lessen dependence on China, contravening the advice of government scientists. In the US, Congress included a provision in its most recent defense budget that requires the Pentagon to issue a report on the nation’s capacity to process seabed minerals.

In November, seven Republican congressmen from Texas wrote a letter to Assistant Secretary of Defense Laura Taylor-Kale expressing support for TMC’s proposal to build a seabed minerals facility in the state. A month later, 31 Republican representatives sent a letter urging Defense Secretary Lloyd Austin “to develop a plan to address the national security ramifications of the Chinese Communist Party’s (CCP) interest and investment in seabed mining.”

On March 11, more than 300 former political and military leaders, including Hillary Clinton and three former chairmen of the joint chiefs of staff, signed a letter to the Senate Committee on Foreign Relations urging ratification of the UN treaty that established the ISA so that “American businesses can harvest the strategic critical minerals of the deep ocean floor.” A day after that, two Republican congresspeople introduced the Responsible Use of Seafloor Resources Act of 2024, which would require the federal government to support domestic seabed minerals processing.

At the ISA’s meeting this month, tensions may flare with another accredited observer: Greenpeace, whose activists last year boarded and occupied a ship conducting scientific research for a TMC subsidiary in the Pacific Ocean. After that subsidiary sued Greenpeace, a Dutch judge ultimately ordered the activists to leave the vessel, but preserved their right to protest alongside it.

UN deep-sea mining body considering expelling Greenpeace

The incident underscores the role of the secretary-general in handling disputes. Lodge responded to the protest by ordering Greenpeace to stay 500 meters (1,640 feet) from the TMC vessel, but the Dutch judge ruled that the ISA lacked jurisdiction over Greenpeace. Lodge nonetheless doubled down on his claim of authority over protesters in the Pacific in a report to the Council ahead of this month’s meeting.

In a video message shown Tuesday at an ISA side event organized by Greenpeace, UN Rapporteur for Environmental Defenders Michel Forst said international law protects the right to protest seabed mining. “The ISA Secretary General seeking to prevent Greenpeace activists from protesting at sea is yet again another example of the ongoing crackdown on environmental defenders,” he said. “But what is even more shocking is that this happens in an international organization.”

The March Council meeting is the last ISA gathering before the organization’s annual meeting in July, at which the next secretary-general will be elected. At that gathering, all eyes will be on TMC, which has aggressively pushed for the completion of regulations and mounted a global campaign to gain support for deep sea mining.

If regulations are greenlit, TMC would likely be the first company to mine the seabed. One of the company’s ISA contracts is sponsored by the tiny Pacific island nation of Nauru, which in 2021 triggered a provision requiring the ISA to enact mining regulations by 2023. The ISA missed that deadline, and so must start accepting applications.

TMC has said it reserves the right to apply for a mining license after the July meeting, even in the absence of regulations. But any application will require analyzing enormous volumes of scientific data on potential environmental impacts. TMC only recently completed its latest scientific expedition to the area targeted for mining; processing all that data will take time.

“The real goal is to ensure that the mining code and final rules, regulations and procedures are in place before mining would begin,” Craig Shesky, TMC’s chief financial officer, said Tuesday during a company presentation.

(By Todd Woody)

STATE CAPITALI$M

Indian government rejects Hindustan Zinc’s plan to split company

Reuters | March 22, 2024 | 

Credit: Hindustan Zinc

The Indian government, Hindustan Zinc’s largest minority shareholder, has rejected the miner’s proposal to split into different units as it is not convinced such a move would boost shareholder value, a government official said on Friday.


“Whatever report we have in front of us, we are not convinced by it,” said VL Kantha Rao, secretary at the Ministry of Mines, which administers Hindustan Zinc.

Last September, the company said it plans to create separate entities for its zinc, lead, silver and recycling businesses to unlock potential shareholder value.

But it did not consult the government, which has a 29.54% stake in the company, on the planned move, another government official told Reuters on the condition of anonymity.

The official also said the government was not convinced by Hindustan Zinc’s rationale for the split and that the Ministry of Mines has lodged its objection with the company.

Hindustan Zinc CEO Arun Misra told Reuters the company had received the ministry’s communication, which will be discussed with the board along with the management’s observations.

However, Misra said he believes demerging the company to create a separate silver and zinc entity will help improve its market capitalization, based on a report by a consultant.

A year back, the government had opposed Hindustan Zinc’s proposal to buy two entities of Vedanta — which has a 64.9% stake in Hindustan Zinc — and forced the company to drop the plan.

(By Neha Arora and Nikunj Ohri; Editing by Shounak Dasgupta and Savio D’Souza)

Column: China, decarbonization present Australia’s iron ore miners with costly choices

Reuters | March 22, 2024 

South Flank, part of the Western Australia Iron Ore complex. (Image courtesy of BHP).

Australia’s vast iron ore mining sector is facing stark choices as its biggest customer China has likely hit a peak in its steel production and global pressures mount to decarbonize one the world’s most polluting industries.


The scale of these challenges are massive, but they are far from insurmountable, and there are an array of options that Australia’s iron ore miners can pursue.

The trick is choosing a path that maximizes profits, or at least minimizes costs, while ensuring that the industry continues to prosper.

Australia is the world’s largest exporter of iron ore, the key raw material used to make steel, and it shipped out about 930 million metric tons last year, which at current prices would be worth about $93 billion.

Australia is also the world’s largest exporter of metallurgical coal, used to make steel, ranks second in thermal coal and in liquefied natural gas, while also being the biggest exporter of lithium and the largest net exporter of gold.

But the exports of all these commodities together barely exceed the value of iron ore shipments, underscoring the outsized role of the ore, which is mainly produced in the state of Western Australia.

Just over 80% of iron ore exports head to China, which buys about 70% of the total global seaborne volumes and produces about half of the world’s total steel.

Putting these numbers together gives a picture of a dominant producer and a dominant buyer in the iron ore market.

The rise of China since the late nineties allowed Australia’s iron ore miners to massively ramp up output, reap economies of scale and become hugely profitable.

But the nature of both China’s demand and the process of making steel are likely to change in the next few years, threatening the current model whereby Australia produces vast quantities of iron ore that is turned into steel in blast furnaces and basic oxygen furnaces, processes that require the use of coking coal.

China’s steel output has flatlined for the past five years around the 1 billion ton per annum level, and most analysts presenting at this week’s Global Iron Ore and Steel Outlook Conference in Perth predicted that production will gradually decline in the next few years.

This is partly because China’s infrastructure and housing construction will ease, but also because China will increasingly use scrap steel in electric arc furnaces to produce new steel products.

While Australia’s iron ore miners may be able to offset the loss of some of China’s demand by selling to newer steel producers in Southeast Asia, it’s likely that the overall market for iron ore will soon decline.

It’s also likely to change in composition, with higher grades of iron ore preferred as these can be more easily used as a feedstock along with scrap in electric arc furnaces.

Higher grades of iron ore can also more easily be upgraded into direct reduction iron (DRI), which in turn can be turned into steel without using coal as a fuel.

Making steel using DRI produced with green hydrogen and renewable energy is one of the ways the industry is thinking of reducing carbon emissions.

Even using natural gas to make DRI can reduce emissions by up to 75%.

The problem is that DRI is tricky to export given it can be volatile, so it tends to be made at the same location as the steel furnaces.
Value chains

So, if Australia’s iron ore miners are thinking of moving up the steel value chain, they would have to find ways of producing DRI and turning it into steel in Australia, using renewable energy.

Another path is upgrading the iron ore into hot briquetted iron (HBI), which is an upgraded form of DRI, whereby the DRI is converted into a compact form using heat.

HBI can be shipped, and can be used in either an electric arc furnace or a basic oxygen unit.

Should Australia’s iron ore miners move to upgrade their product, they will need significant investment, and there is no certainty that the upgraded products will deliver sufficiently higher margins.

For example, if an iron ore miner agreed with its customers in China, Japan and South Korea to supply HBI instead of iron ore fines, this would require significant investment in a clean energy system.

The iron ore miners have been successful in running complex operations at low costs, but setting up a wind/solar power plants, a green hydrogen electrolyser and possibly battery storage as well would be a totally different challenge.

There is also the possibility of exporting iron ore to a third country for processing into HBI, with Gulf countries such as Saudi Arabia a potential destination.

These countries have large quantities of natural gas which could be used to turn iron ore into HBI in a process that would still be more environmentally friendly than using coking coal.

The HBI could then be shipped from the Middle East to customers in Asia.

However, there are several other factors that would come into play, such as steel nationalism.

Many countries see steel as a key commodity and want to retain their own industries. It’s unlikely Japan would want to buy green steel from Australia, but it might be prepared to buy HBI and keep the final process of making steel inside its borders.

The problem for Australia’s iron ore sector is that it has a plethora of options in adjusting to decarbonization and peak steel in China.

But all involve risks and costs, and this is trouble for an industry that has spent the last decade de-risking itself and concentrating on improving shareholder returns.

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

(Editing by Miral Fahmy)