Production at Drone-Hit Kurdistan Gas Field Set to Resume

By Charles Kennedy - May 01, 2024

Production at the Khor Mor field in Kurdistan is set to resume less than a week after a drone attack suspended operations at the site, killing four.

An official from the company that distributes the gas produced at Khor Mor told local news publication Rudaw that production will resume at midnight today, adding that the companies involved in the field’s operation had taken steps to ensure safety.

Four Yemeni workers lost their lives, and two others sustained injuries in the drone attack on the Khor Mor field in Kurdistan last week.

The ramifications of the assault extend beyond casualties, impacting electricity generation in the region. Kurdistan's electricity ministry stated that the drone attack disrupted gas supplies to power plants, leading to an approximate 2,500 MW reduction in electricity output.

Pearl Petroleum—a consortium comprised of Dana Gas and Crescent Petroleum (operators of the Kurdistan Gas Project), along with OMV, MOL, and RWE holds the rights to develop Khor Mor and Chemchemal, two of Iraq's largest gas fields.

Emirati Dana Gas and Crescent Petroleum each hold a 35% stake in the field, while the European companies each have a 10% stake in the project. Production from the Khor Mor field averages some 106,000 barrels of oil equivalent daily, about 1,000 metric tons of liquefied petroleum gas, and 15,000 barrels daily of gas condensates. The reserves of the field are estimated at some 7 trillion cu ft of natural gas.

No one has yet claimed responsibility for the attack but the Kurdish government accused an Iraqi group of staging it. The group is called Iraq’s Popular Mobilization Forces, which is said to have ties with Iran.

"Good efforts have been made in the past to improve the energy sector and economic infrastructure in Iraq, especially in the Kurdistan Region, and while steps are being taken to resolve the disputed, evil and destructive hands once again targeted the Khor Mor gas field in a terrorist act. These repeated strikes must be stopped, and we urge the Iraqi government to find the perpetrators of this terrorist act and bring them to justice," the spokesman of the Kurdistan Regional Government said in the wake of the drone attack.

 

U.S. Sees New Egyptian Gas Fields As Key To Its New Middle Eastern Strategy

• By Simon Watkins - Apr 30, 2024
• 
  
• Egypt was chosen as the launching pad for the U.S.’s reassertion of power into the region because historically it holds a unique position in the Middle East and in the Arabic world.
• 
  
• Aside from its unique geopolitical significance, Egypt is uniquely positioned too in the global oil market.
• 
  
• Besides its important geo-strategic location, Egypt is the new potential gas hotspot in the potentially huge Eastern Mediterranean gas hub.

Arguably the two greatest military errors of the 100 years have been Japan’s attack on the U.S. naval base of Pearl Harbour on 7 December 1941 and Russia’s invasion of Ukraine on 24 February 2022. In both cases, they snapped the U.S. out of prolonged moments of introspection, and into the broader focused force for good that it and its key allies represent to many people around the world. In the Middle East, then-President Donald Trump’s comments encapsulated in his ‘Endless Wars’ commencement address to the United States Military Academy at West Point on 13 June 2020, had found resonance in the U.S.’s withdrawal from Syria (in 2019), Afghanistan (2021), and Iraq (2021), as analysed in depth in my new book on the new global oil market order. This allowed its key geopolitical rivals China and Russia to dramatically boost their presence across the region, as they had been itching to do for years without too much on-the-ground interference from Washington. Once President Vladimir Putin ordered his troops into Ukraine, though, it was obvious to the U.S. and other NATO members that this was just the first step in a bigger move westwards aimed at bringing all of Europe under Russian control. To stop this, not only did Ukraine need to be supplied with weapons from the U.S. and its European allies, but several of these countries needed to be provided with long-term sources of energy supplies to make up for those lost from Russia. As China and Russia at that point had significantly strengthened their alliances with the key Middle Eastern states - including Saudi Arabia, Iraq, Iran, Syria, and the UAE - the U.S. needed a new point of entry back into the heart of the Middle East. Egypt was the choice, and new developments in the past few weeks underline that the U.S.’s new Middle East strategy is proceeding apace.

Egypt was chosen as the launching pad for the U.S.’s reassertion of power into the region because historically it holds a unique position in the Middle East and in the Arabic world. For decades, Egypt has been seen by the Arab world as the leading proponent of the ‘Pan-Arab’ ideology that believes enduring strength can only be found in the political, cultural, and socioeconomic unity of Arabs across the different countries that emerged after the two World Wars. The philosophy’s most powerful recent proponent was Egypt’s president from 1954 to 1970, Gamal Nasser. Among the most palpable signs of this movement at the time was the formation of the United Arab Republic union formed between Egypt and Syria from 1958 to 1961, the formation of OPEC in 1960, the series of conflicts with neighbouring Israel over the period, and then the 1973/74 oil embargo, as also detailed in my new book on the new global oil market order. By bringing this leader of the Arab world on side, the U.S. hoped to offset the negative geopolitical impact of long-term ally Saudi Arabia having been lost to the China-Russia bloc. Politically and historically, Egypt is at least as much of a leader in the Arab world as Saudi Arabia has ever been.

Aside from its unique geopolitical significance, Egypt is uniquely positioned too in the global oil market. Over and above its official conservative estimate of around 1.8 trillion cubic metres of gas reserves, Egypt controls the major global shipping chokepoint of the Suez Canal, through which around 10 percent of the world’s oil and LNG is moved. It also controls the vital Suez-Mediterranean Pipeline, which runs from the Ain Sokhna terminal in the Gulf of Suez, near the Red Sea, to Sidi Kerir port, west of Alexandria in the Mediterranean Sea. This is a crucial alternative to the Suez Canal for transporting oil from the Persian Gulf to the Mediterranean. The Suez Canal is one of the very few major transit points that is not controlled by China. Specifically, China already has effective control over the Strait of Hormuz through the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article on the subject and also analysed in full in my new book. The same deal also gives China a hold over the Bab al-Mandab Strait, through which commodities are shipped upwards through the Red Sea towards the Suez Canal before moving into the Mediterranean and then westwards. This has been achieved as it lies between Yemen (the Houthis having long been supported by Iran) and Djibouti (over which China has also established a stranglehold through debts connected to its multi-generational power-grab project - the ‘Belt and Road Initiative’).

Crucially as well, Egypt had earlier been identified as a new potential gas hotspot in the potentially huge Eastern Mediterranean gas hub. The key for the U.S. was to get its own big oil and gas firms in there quickly, with similar firms from its key allies to follow shortly afterwards. Chevron was the key U.S. operator from the start, with an announcement in December 2022 that it had hit at least 99 billion cubic metres of gas with its Nargis-1 exploration well in the eastern Nile Delta, about 60 kilometres north of the Sinai Peninsula. Following that, an announcement came of the discovery with Italy’s Eni of a potentially huge offshore gas field in its concession area in the Red Sea focused on the Nargis-1 well. This augmented its already significant presence in the broader Eastern Mediterranean through its operation of the massive Leviathan and Tamar fields in Israel and the Aphrodite project in offshore Cyprus.

The U.S.’s beachhead has since been used by several other of its allies’ major international oil companies, most notably Great Britain’s Shell and BP.  The latter said recently that it will invest US$3.5 billion in the exploration and development of Egypt’s gas fields in the coming three years. This amount could be doubled if the exploration activity yields new discoveries. Meanwhile, Shell began that development of the tenth phase of Egypt’s Nile Delta offshore West Delta Deep Marine (WDDM) concession in the Mediterranean Sea. This came after the British firm and its partner had developed the previous nine development phases of the WDDM concession that comprises 17 gas fields, located at water depths ranging from 300 metres to 1,200 metres and spanning approximately 90-120 kilometres from the shore. News emerged last week, that the same Shell-led consortium have agreed to begin the 11^th phase of the WDDM.

The next phase of the U.S.’s new Middle Eastern strategy appears to be to tie-in big operators from those countries that it considered to have been lost in large part to China and Russia. A key case is the UAE, which had been identified by Donald Trump’s administration as a potential key ally for the roll-out of several ‘relationship normalisation’ deals with Israel across the Middle East during his tenure as President. Indeed, the UAE’s own deal with Israel was ratified by its parliament on 19 October 2020. Several developments after Trump left office – not least the extraordinary refusal of UAE leader Sheikh Mohammed bin Zayed al Nahyan to even take a telephone call from U.S. President Joe Biden as oil prices spiked after February 2022 – indicated to Washington that the Emirate was no friend. However, last week saw BP announce a new joint venture (JV) with the UAE’s flagship oil and gas firm – the Abu Dhabi National Oil Company (ADNOC) – to be centred in Egypt. The concessions included in the new Concessions included in the JV are Shorouk (which contains the producing Zohr field), North Damietta (containing the producing Atoll field), North El Burg (containing the undeveloped Satis field), and further exploration agreements for North El Tabya, Bellatrix-Seti East and North El Fayrouz.

By Simon Watkins for Oilprice.com

ECOCIDE; METHANE RELEASE

Texas Producers Boost Flaring as Natural Gas Prices Tumble

By Tsvetana Paraskova - Apr 30, 2024

Oil and gas producers in Texas have significantly increased in recent weeks the number of requests to the Railroad Commission of Texas (RRC) to allow flaring on some operations as low natural gas prices and a glut of supply present challenges to the drillers how to get rid of the unwanted gas.

RRC, the oil and gas industry regulator of Texas, approved last week as many as 21 requests from producers to be exempt from rules banning or limiting flaring, Reuters reported on Tuesday.

The U.S. natural gas benchmark, Henry Hub, has been depressed below $2.00 per million British thermal units (MMBtu) since early February, due to weak winter demand amid milder weather, record output at the end of 2023, and higher-than-average natural gas stocks. 

U.S. oil producers are not in a rush to significantly boost production despite oil prices hitting $85 earlier this month, as low natural gas prices are holding back drilling in parts of the Permian and costs have increased, analysts and industry executives told Reuters earlier this month.

As WTI crude prices moved above $80 per barrel, producers are keen to continue pumping oil. But weak natural gas prices, especially in Texas, have created a dilemma for the companies, and many would choose more flaring – if permitted – to shutting down oil-producing wells that have associated gas output, analysts say.  

So far, producers in America, where part of the natural gas is associated gas from oil drilling, are not jumping the gun. They are mindful of the investor demands for higher returns, not necessarily higher production.

Still, natural gas prices at the Waha hub in the Permian basin in Texas slumped to a negative value of -$2.00 per MMBtu earlier this month as the recent rise in oil prices prompted producers to bring drilled but uncompleted wells online.

“Natural gas is currently pricing at or below costs of production,” an executive at an exploration and production company said in comments in the latest quarterly Dallas Fed Energy Survey released at the end of March. 

India's Steel Industry Faces Challenges Despite Growing Demand

• By Metal Miner - Apr 29, 2024
• 
  
• India's finished steel imports increased by 38.1% in the last fiscal year, making it a net importer.
• 
  
• The Indian steel industry has called on the government to intervene and initiate safeguard measures to protect domestic producers.
• 
  
• India has announced ambitious targets to ramp up steel production capacity and reduce its environmental footprint.

India has ended the financial year 2023-2024 as a net importer of finished steel, which has sent the alarm bells ringing in industry circles throughout India. Mainly, insiders want to know how the changing import status might affect steel costs and India’s push for self reliance.

According to news agency Reuters, as per initial government data, India imported 8.3 million metric tons of finished steel in the last fiscal year. This represents an increase of 38.1% from a year earlier. Such high imports fly in the face of targets set by the Indian Government regarding self-reliance in steel manufacturing. 

Alarmed by the rising imports to feed the increasing consumption of steel in India, steel mills have now asked the Indian Government to intervene and initiate safeguard measures. The association representing the steel companies has also asked for similar interventions in the past. However, the Ministry of Steel has yet to act upon these demands. 

Indian Steel Industry Sounds the Alarm

A report in thehindu.com quoted the Secretary-General of the Indian Steel Association (ISA), Alok Sahay, as saying that the notable surge in predatory imports from China posed a substantial threat to India’s pursuit of self-reliance in the steel sector. Sahay claimed the country’s transition to a net importer serves as a clear warning sign in this regard. It also has the potential to affect steel costs.

Meanwhile, experts feel that having a lower or no import duty tax encourages importers to dump their steel into the Indian market. India’s steel companies now want this situation to change so that steel-surplus countries do not take advantage and use India’s growth momentum to aid their own steel mills.

The Hindu report also quoted Ranjan Dhar, the Chief Marketing Officer of ArcelorMittal Nippon Steel, as saying that “predatory imports” are a clear threat to India’s steel companies, and that it would serve the government well to confine steel imports for a robust GDP growth.

India’s Announces Fresh Steel Target

As if on cue, India recently announced ambitious targets for its steel industry, aiming to ramp up steel production capacity to an impressive 500 MTPA by 2047. According to this report in the Economic Times, this marks a significant leap from the targets outlined in the New Steel Policy (NSP) of 2017, which aimed for just 300 MT by 2030.

However, the focus isn’t solely on increasing production. India also renewed its dedication to reducing its environmental footprint. The country aims to lower its emission intensity to 2.25 tonnes of CO2 per tonne of crude steel produced by 2029, with further reductions anticipated by 2047. This goes to show that steel costs and industry independence are not on the only thing on India’s leaders’ minds.

According to the ET report, India is currently concentrating on reforming its mining sector to meet these environmental objectives. The government also plans to implement key reforms to enhance mineral availability, including innovative measures like hackathons to analyze geological data. These initiatives further underscore India’s commitment to both industrial expansion and environmental sustainability.

Consumption Keeps Growing, But What About Steel Costs?

India recently witnessed a significant surge in steel demand, increasing by approximately 15% year-on-year. This growth primarily stems from extensive government investments in infrastructure projects and accelerated construction activities in anticipation of the upcoming general elections.

However, despite the robust growth in steel demand, there are concerns that the approaching general elections may slow government spending. Consequently, analysts expect the projected demand growth rate to decrease from 15% to around 10% by the conclusion of FY24.

Furthermore, India’s transition into a net importer of steel continues to raise concerns among among industry insiders regarding the influx of substandard imports. In response, they continue to urge the government to take measures to address this issue and ensure fair competition for domestic steel producers.

By Sohrab Darabshaw

Azerbaijan Feels the Heat as U.S. House Considers Sanctions

• By Eurasianet - Apr 30, 2024, 
• 
  
• The threat of US sanctions has prompted Azerbaijan to release a prominent opposition figure, but concerns persist over crackdowns on journalists and activists.
• 
  
• US Secretary of State Antony Blinken discussed human rights concerns with Azerbaijani President Ilham Aliyev and urged adherence to international obligations.
• 
  
• The US House bill targets up to 40 Azerbaijani officials, including top aides to President Aliyev, amid deteriorating relations with the United States.
• 
  

Azerbaijan has spent much of the past half-year thumbing its nose at the United States and European Union over Western criticism of Baku’s authoritarian political practices. But it appears the West has at least one weapon in its arsenal capable of getting Azerbaijani leaders’ attention.

That tool is money. Or more specifically, the ability to hinder Azerbaijani officials from moving around the world and spending it.

Rights advocates in Baku and elsewhere say it is no surprise an Azerbaijani court released a prominent opposition figure, Gubad Ibadoglu, from jail shortly after a report started circulating on April 22 that the US Congress was moving to impose sanctions against top Azerbaijani officials. A few days later, the European Parliament too called for sanctions to be imposed against Azerbaijani officials.

“They [authorities] are even afraid of the first letter of the word ‘sanctions.’ No matter how loud they challenge the West,” lawyer and politician Samed Rahimli wrote on X. “Azerbaijani authorities showed today that they are afraid of sanctions.”

On April 28, US Secretary of State Antony Blinken had a phone discussion with Azerbaijani President Ilham Aliyev, aiming to put bilateral relations on a better footing. Blinken, according to a State Department statement, acknowledged recent progress in the Armenia-Azerbaijani peace process and reiterated Washington’s desire to “cooperate on mutual energy, climate, and connectivity goals.” He welcomed Ibadolgu’s release from jail while calling for his “expeditious” release. The statement concluded by noting Blinken “again urged Azerbaijan to adhere to its international human rights obligations and commitments and release those unjustly detained in Azerbaijan.”

The Baku court decision did not exonerate Ibadoglu, an economist who is a vocal opponent of Aliyev’s administration. Though out of jail, he will remain under house arrest as his case proceeds. Ibadoglu chairs Democracy and Prosperity Party and was a visiting professor at the London School of Economics at the time of his arrest in July 2023. Ibadoglu is accused of taking part in a scheme to profit from circulating “counterfeit money or securities by an organized group.” He denies the charge and says his case is politically motivated.

The Turan News Agency’s Washington correspondent, Alex Raufoglu, broke the news about brewing US sanctions against up to 40 political, law enforcement and military officials who “play active roles in violating the rule of law and human rights in the country.” Reportedly some of President Aliyev’s top lieutenants are on the list of those to be sanctioned, including the head of presidential administration, Samir Nuriyev, the chief of the State Security Service, Ali Nagiyev, and the commander of Special Forces, Hikmet Mirzayev. Dina Titus, a Nevada Democrat, is the primary sponsor of the sanctions bill in the House of Representatives.

According to the Turan report, the bill is a response to Azerbaijan’s recent crackdown on independent journalists and civil society activists amid a deterioration of relations with the United States. Since last fall, nearly 20 journalists and opposition activists have been arrested, many of them on smuggling charges. As with Ibadoglu’s case, the journalists and activists in custody insist the cases against them are bogus.

At a news conference during an official visit to Berlin, President Aliyev contended that all the cases against government critics conform with established laws. 

“Any country must defend its laws,” Aliyev said. “If a media representative who received illegal funding from abroad was investigated, it does not mean that our media is not free. Everyone should act within the law. We, like any other country, must protect our media space from external negative influence.”

The US sanctions bill reportedly also cites Azerbaijan’s allegedly harsh treatment of Armenian prisoners, captured during the last phase of the Nagorno-Karabakh conflict. “This calls into serious question the Azerbaijani government's commitment to human rights and its ability to negotiate a just and lasting peace [with Armenia],” the Turan report quotes the bill as stating.

Given that Republicans control the US House, the timetable for the Democrat-sponsored sanctions bill to come up for a vote is uncertain. European Parliament efforts to implement sanctions against Azerbaijan are far less advanced.

Also uncertain is whether Azerbaijan will take additional steps to tamp down the possibility of sanctions. The initial indications are not encouraging that Azerbaijan will change its ways. On April 29, the day after the Blinken-Aliyev phone discussion, law enforcement authorities in Baku detained a prominent activist, Anar Mammadli, who chairs the Election Monitoring and Democracy Studies Center, according to an opposition media report. Government critics are calling on Washington and Brussels to keep applying pressure. “There are still political prisoners in the prison. They need to be freed. There should be no compromise,” writer and blogger Samed Shikhi wrote on X.

By Eurasianet.org

Biden Aims to Bridge the Decarbonization Divide With $7 Billion Solar Initiative

• 
  

By Haley Zaremba - Apr 30, 2024

• Wealthy nations and individuals have greater capacity to transition to clean energy, leaving poorer communities more vulnerable to climate change.
• 
  
• Within wealthy nations, disparities exist in access to incentives for green technology adoption, such as rooftop solar panels.
• 
  
• President Biden's $7 billion Solar for All program aims to address the solar wealth gap and create union jobs in communities that need them most.

On a global level, rich nations have a greater capacity to transition toward clean technologies and leave cheap and abundant fossil fuels in the ground. Nevertheless, the richest countries are also responsible for the lion’s share of greenhouse gas emissions, while the poorest communities are left the most vulnerable to the impacts of climate change. Now, it’s more urgent than ever for all of humanity to jump on the clean energy bandwagon, but that’s much easier for those with the means to adopt often pricey green technologies.

Global leaders have long acknowledged that climate finance for poorer nations is an absolutely essential central tenet of global climate goals. But while the wealthiest nations have made lofty promises to finance the decarbonization trajectories of the poorest nations, so far they have broken those promises. In 2023, the United Nations estimated that funding to address climate disasters in developing nations had fallen several trillion dollars short. “While Western countries have started to mobilize vast sums for their own clean energy transitions,” the Washington Post reported last year, “government officials and other diplomats say poor and vulnerable nations — where the need is often greatest — are being left out.”

But even within wealthy nations where climate financing is more advanced, there are major disparities between who is securing those lines of finance and who is losing out. In England, for example, new research from Cardiff University shows that on the whole, households need greater financial support to transition to clean energy, but that “homeowners living in more affluent areas, who felt more financially secure, were more prepared to consider that households such as theirs might need to contribute towards the cost of retrofitting.” 

Meanwhile, in New York State, homeowners who earn more than $50,000 dollars a year are 2.5 times more likely to have rooftop solar panels than those who earn less, according to a study published last month by researchers from Columbia University and the think tank Win Climate. And while there are tax credits to ease the sticker shock of residential solar, the vast majority of those incentives are going to the wealthy as well. “The overwhelming majority of that money is going to wealthier people, but it's actually bypassing the people who need it most,” Win Climate’s Juan-Pablo Velez told Gothamist.

Last week President Joe Biden announced a new $7 billion expansion to the Solar for All program that aims to lessen this solar wealth gap on a national level. The initiative provides free or low-cost rooftop solar panels or access to community solar electricity, making residential solar accessible to those who could never otherwise afford it. “Essentially, the programs provide a share in the power provided by a nearby solar facility,” CNET reports.  

"This new Solar for All program means that 900,000 households will have solar on the rooftops for the first time, and soon," President Joe Biden said on Earth Day, when the expansion was announced. "Millions of families will save almost $400 a year on utility bills." Biden also promised that the initiative will “create 200,000 good-paying union jobs over five years in communities that need them most."

While the $7 billion endowment will certainly move the climate finance needle in the right direction within the United States, much more will need to be done to support climate justice nationwide. Lowering emissions in the United States is not just about putting solar panels on the roofs of poor people. It’s about the richest Americans lowering their own carbon emissions. 

The richest people in the U.S. are responsible for 40% of emissions due to a combination of carbon-heavy lifestyles and carbon-heavy investments. “It just seems morally and politically problematic to have one group of people reaping so much benefit from emissions while the poorer groups in society are asked to disproportionately deal with the harms of those emissions,” Jared Starr, a sustainability scientist at the University of Massachusetts at Amherst, told the Washington Post. At a global level, we have repeatedly seen that poorest people are the most vulnerable and least resilient to climate-related weather disasters and quieter climate-related issues like extreme heat in poor neighborhoods with more concrete and fewer trees than rich neighborhoods. 

By Haley Zaremba for Oilprice.com

MONOPOLY CAPITALI$M

Copper smelters in China wary of BHP-Anglo tie-up

Reuters | April 30, 2024 | 


Chinese smelters, the world’s biggest buyers of mined copper, are concerned they will lose power to negotiate prices if BHP Group, known locally as “the big miner”, succeeds in its bid for rival Anglo American.


BHP, the world’s largest listed mining group, is fine-tuning an offer that could make it the biggest producer of copper, a metal in high demand as the world seeks to shift towards electric vehicles and a lower carbon economy.

The proposed takeover would give BHP control of roughly 10% of global mined supplies, surpassing Chile’s Codelco and Freeport-McMoRan.

“This is not good news for China given the heavy reliance on external supply, and Chinese companies hold limited resources,” Zhang Weixin, a metal analyst at China Futures, said of the potential tie-up.

The China Smelters Purchase Team (CSPT), a group of top smelters that negotiates with miners on yearly prices to treat and refine copper, has no current plans to urge Beijing to investigate the deal, three sources familiar with the matter said.

CSPT’s head could not be reached for comment and BHP declined to comment.

China’s State Administration for Market Regulation also did not immediately respond to a request for comment.

There is a precedent of Chinese regulators getting involved in deals that impact copper supply.

In 2011, Glencore agreed to China’s demand that it sell its interest in Xstrata’s Las Bambas copper project in Peru to clinch their multi-billion dollar deal.

The world’s leading consumer of the metal, China imported 27.54 million metric tons of copper ore and concentrate in 2023, worth $60.1 billion, customs data showed, more than half of global supplies.
Tight market

In China, BHP is most active in the spot market, where it sells to domestic smelters using tenders, according to smelters and analysts, signing contracts for fixed volumes to be priced via an index provided by third parties.

By comparison, rival miners Freeport and Antofagasta agree an annual fixed sale price with China’s smelters that is widely used as an industry benchmark.

Chinese copper smelters said the prospect of more supply being sold under index pricing could increase uncertainty for costs and planning.

None of the smelter officials wished to be identified given the sensitivity of the matter.

One of them said index pricing meant smelters would be unable to estimate production costs and to draw up a full-year production plan.

Smelters are still recovering from supply shortages driven by the December closure of the First Quantum’s Cobre Panama mine, which drove down treatment charges (TCs) – their main source of income.

Treatment charges are fees paid by miners for converting raw materials into metal. They fall when mine output decreases as smelters have to compete for concentrate.


Adding to their difficulties, the concentrate market is expected to be in deficit for the next three years.

Last week, spot treatment charges (TCs) in China turned negative for the first time since pricing agency Fastmarkets started the index in 2013.

That compares with 2024 benchmark TCs settled between Chinese smelters and Freeport and Antofagasta at $80 per ton.

Much as consolidation raises concerns, however, William Adams, head of base metals research at Fastmarkets in London, said it could calm the market longer term by tackling the high cost and risk of developing mines.

“Look at the current tightness in spot treatment and refining charges, which is because there is insufficient mine supply to meeting smelter’s demand, highlights the need to invest more upstream,” he said.

(By Siyi Liu, Julian Luk, Mai Nguyen and Melanie Burton; Editing by Tony Munroe and Barbara Lewis)

Anglo spinoffs will ‘very likely’ need South Africa approval

Bloomberg News | April 30, 2024 | 

Loading hauled ore from the mine into the primary crusher at Kumba Iron Ore’s Kolomela. (Image courtesy of Anglo American | Flickr.)

BHP Group Ltd.’s proposal for Anglo American Plc to spin off platinum and iron ore units before a takeover would likely require approval from South African regulators, according to a government agency.


Under BHP’s offer, Anglo would need to first divest its controlling interests in Kumba Iron Ore Ltd. and Anglo American Platinum Ltd., both of which are listed in Johannesburg and operate assets in South Africa. Anglo rejected the initial $39 billion proposal from the Australian mining giant last week.

Analysts have pointed to South Africa as one of the biggest potential hurdles to a deal, even if Anglo’s board can be won over. Founded in 1917 by Ernest Oppenheimer, Anglo has long ties to South Africa and was built on the back of the country’s gold mines. The proposed spinoffs highlight the fragile state of the country’s critical mining industry, as the ruling African National Congress struggles to bolster its appeal before elections next month.

Even before BHP’s proposal, Anglo’s platinum subsidiary was weighing thousands of job cuts in a country with one of the world’s highest unemployment rates. The ANC’s national chairman has signaled his opposition to BHP’s proposed takeover.

Even though BHP doesn’t want to buy Kumba and Amplats, South Africa could have an important role to play if an eventual deal is structured in the manner originally outlined. The country’s Competition Commission not only evaluates antitrust impacts but also “public interest” factors, including how a proposed acquisition will affect employment levels and historically disadvantaged people.

“There are numerous and current merger reviews in which the agency has imposed stringent conditions on the basis of the transactions’ effect on the public interest criteria,” said John Oxenham, Johannesburg-based managing partner at Primerio, a law firm that specializes in competition cases.

BHP is considering making an improved proposal for London-listed Anglo, Bloomberg reported April 27, citing people familiar with the matter. The main prize for BHP is Anglo’s South American copper operations, while the non-South African iron ore business and coking coal mines in Australia would also fit well with its existing operations.

If Anglo shareholders accept an improved offer with the same conditions, spinning off Kumba and Amplats is “very likely to meet the mandatory thresholds” that would require approval from South Africa’s regulatory authorities, Competition Commission spokesman Siyabulela Makunga said in an emailed response to questions. The agency assesses each deal “based on its own merits” in accordance with the law, he said.

South Africa Mines Minister Gwede Mantashe has signaled his opposition to the takeover, telling Bloomberg last week that he “wouldn’t support” the proposal. “I don’t think Anglo will agree to that,” said Mantashe, who also chairs the ANC.

The country’s state pension fund – the Public Investment Corp. – is also Anglo’s second-largest shareholder, controlling an 8.4% stake, according to data compiled by Bloomberg.

(By William Clowes)

Data centers will likely provide boost to nuclear energy, says Cameco CEO

Chatbots like ChatGPT require about 10 times the energy as a Google search.

Reuters | April 30, 2024 |


Uranium miner Cameco Corp’s chief executive said on Tuesday projected demand from data centers powering technology like generative AI will likely be a boost for nuclear energy.


Over the past year, big technology companies have been racing to build data centers needed to power applications such as OpenAI’s viral chatbot, ChatGPT, as they try to capitalize on what is expected to be the industry’s next key growth driver.

Chatbots like ChatGPT require about 10 times the energy as a Google search.

“Gone are the days of rolling out new technology without worrying about future potential runway environmental impacts. Companies driving the technology forward are doing so while keeping carbon footprint and 24/7 reliability top of mind … nuclear is the clear winner,” CEO Timothy Gitzel said during a post-earnings call.

Many industrial power users and tech sector experts are signing agreements to ensure their facilities can access zero-carbon and reliable nuclear energy now and into the future, he said.

Overall, power use from the thousands of giant computing warehouses that comprise data centers is expected to triple globally from less than 15 terawatt-hours (TWh) in 2023 to 46 TWh this year, according to Morgan Stanley Research.

(By Mrinalika Roy; Editing by Shilpi Majumdar)