Tuesday, May 07, 2024

 

Russian Fuel Cargos Pile Up at Sea as South Korean Buyers Grow Cautious

Russian oil product cargos are piling up at sea as their South Korean buyers grow reluctant to go through with their deals amid a government crackdown on sanction evasion, Bloomberg has reported, citing unnamed sources.

According to Kpler data, there are over 2 million barrels of Russian naphtha sitting off the coast of Oman, which is significantly higher than the weekly average for January and February, which came in at some 790,000 barrels.

The Bloomberg sources said that the buildup was caused by the South Korean government’s closer scrutiny of incoming fuel cargos, which has made local refiners and petrochemical producers wary of buying Russian naphtha.

The tightening sanctions on Russia's oil exports are raising freight costs for moving Russian crude. The estimated direct cost to deliver Russian cargoes now is around 6-8% of the price of a barrel of crude leaving the western ports in Russia for Asia, according to data from commodity price reporting agency Argus crunched by Bloomberg.

Argus estimated in March that shipping a barrel of Russian crude from a port in the Baltic Sea to China has cost around $14.50 since December, with more than half of this per-barrel cost attributable to the Western sanctions.

The likely directly related-to-sanction cost to hire tankers to transport Russian oil is estimated at about $773 million since the end of December 2023, based on shipments tracked by Bloomberg.

Before the war in the Ukraine Russia was the top supplier of naphtha for South Korean petrochemicals makers but the war has changed this, per the Bloomberg report. Now South Korean plastics producers are importing more naphtha from places such as the UAE, Malaysia, Singapore, and Tunisia. South Korean processors are also importing more naphtha from Kuwait and Oman.

Russia, for its part, is shipping more naphtha to China, according to Kpler, as well as Taiwan. Last month, Russian imports accounted for more than half of the total naphtha shipments that Taiwan took in.

    Biden Administration Bans Fossil Fuels in Federal Buildings
    By Robert Rapier - May 06, 2024,


  • The rule, mandated by the Energy Independence and Security Act of 2007, requires federal buildings to phase out fossil fuel usage by 2030.

  • The focus is on transitioning to cleaner electricity sources like wind and solar power to reduce greenhouse gas emissions.

  • Despite opposition from natural gas utilities, the rule is projected to significantly reduce carbon and methane emissions, equivalent to those of nearly 310,000 homes annually.

The U.S. Department of Energy has finalized a rule banning fossil fuels from new and renovated federal buildings. The Clean Energy for New Federal Buildings and Major Renovations of Federal Buildings Rule, mandated by the Energy Independence and Security Act (EISA) of 2007, mandates a phased reduction in fossil fuel usage in these buildings. The law requires federal buildings and major renovations to phase out fossil fuel-generated energy consumption by 2030. This provision had been pending due to regulatory delays until now.

Energy Secretary Jennifer Granholm highlighted the significance of this rule, emphasizing the federal government’s commitment to energy efficiency and cost savings: “The Biden-Harris Administration is practicing what we preach. Just as we are helping households and businesses across the nation save money by saving energy, we are doing the same in our own federal buildings.”

With commercial and residential buildings contributing 13% of direct greenhouse gas emissions in 2022, primarily from burning natural gas, the focus has shifted towards electrification. This entails transitioning from gas to cleaner electricity sources like wind and solar power.

Given the absence of regulations enforcing the removal of gas-fired appliances, some federal buildings continue to install them. For instance, Independence Hall in Philadelphia plans to switch to gas-fired boilers instead of remaining connected to a city-wide steam loop for heating.

While projects that are already underway, like Independence Hall, are exempt from the new rule, its implementation aims to accelerate the electrification of federal sites as envisioned in EISA’s Section 433. Advocated by the American Institute of Architects (AIA), this provision sought to leverage government leadership to drive technological advancements and cost reductions in climate-friendly measures.

Complemented by Executive Order 14057 and other Federal Sustainability Plan initiatives, the new rule is aimed at the goal of achieving net-zero emissions by 2045, supported by DOE’s Federal Energy Management Program (FEMP). Through supplemental guidance and resources, FEMP will assist agencies in achieving compliance, facilitating clean energy deployment and phasing out on-site fossil fuel usage. This milestone reflects extensive engagement with federal stakeholders, underscoring the collaborative effort to accelerate the adoption of clean energy within the federal building sector.

The Energy Department faced delays in implementing the rule, largely due to opposition from natural gas utilities concerned about potential business losses. The American Gas Association criticized the final rule, citing cost increases and lack of environmental benefits.

However, the Energy Department’s analysis countered that the rule is projected to reduce carbon emissions by 2 million metric tons and methane emissions by 16 thousand tons, equivalent to the emissions of nearly 310,000 homes annually.

By Robert Rapier

    Steel Producers Make Major Move to Improve Market Transparency
  • Nucor and Cliffs start publishing weekly and monthly HRC prices.
  • Mixed Q1 results for steel mills, with shipments up from Q4 but down from Q1 2023.

  • U.S. Steel acquisition by Nippon Steel faces political hurdles and potential antitrust scrutiny.

Via Metal Miner   May 06, 2024

The Raw Steels Monthly Metals Index (MMI) moved sideways, with a modest 1.86% decline from April to May. U.S. flat-rolled steel prices found a bottom at the close of March and proceeded to move sideways. HRC prices saw a modest increase but ultimately closed the month at $838 per short ton. Meanwhile, HRC Midwest Futures saw a strong decline throughout April, which saw the delta between MetalMiner HRC prices and futures narrow to a mere $1 per short ton as of May 1. This signals that markets expect the sideways steel price trend to continue near current levels.

raw steels MMI, May 2024

Nucor, Cliffs Publish Weekly HRC Prices

Two major steelmakers recently announced new initiatives to publish HRC spot prices. Nucor led the market, publishing weekly prices on Monday, April 8. Cleveland-Cliffs followed Nucor, releasing a monthly “Cliffs Hot Rolled Market Price” on Friday, April 26. According to reports from World Steel Dynamics, Steel Dynamics (SDI) does not intend to follow moves by Nucor or Cliffs.

By Friday, May 3, Nucor’s price stood at $825 per short ton, while Cliffs stood at $850 per short ton. Meanwhile, HRC prices currently stand at $826 per short ton. Both Nucor and Cliffs cited increased “market transparency” as the rationale for the moves. Nucor stated its published pricing aimed to reduce market volatility and they did not intend it to replace other HRC indexes. 

A few takeaways:

  • It remains safe to assume that Nucor and Cliffs do and will continue to operate in their own best interest. While both companies stated that their weekly published pricing would benefit customers, the mills likely hope to influence HRC indexes at the very least.
  • Nucor’s first published price ($825 per short ton) stood at the bottom of the market. Opening at a lower cost was likely part of a plan to boost the credibility of its newly published steel prices. However, this could shift over time as establishing an inflated market floor would benefit domestic mills.
  • Increased control over domestic prices may indeed help reduce volatility, which has been apparent over recent years. However, it is worth noting that Nucor’s decision came immediately following a nearly 26% quarterly decline in steel prices as mills lost control of the price trend. This suggests that mills appear primarily concerned with steel price volatility to the downside.
  • Other major domestic producers, particularly SDI and U.S. Steel, declined to publish their own prices. However, this will allow both to fall in line with Nucor and Cliffs without risking the legal implications of price fixing. 
  • It remains unclear to what extent negotiations will impact the prices buyers pay. Historically, larger buyers have greater bargaining power. Nonetheless, the ability of mills to influence market conditions will continue to require them to manage the supply-demand balance through capacity discipline. 

Mill Quarterly Reports Show Mixed Results

Q1 2024 saw mixed results among steel mills with steel prices. Overall, shipments from the four leading domestic producers trended up from the previous quarter. Both Nucor and SDI saw an increase in total shipments, which offset quarterly declines from both U.S. Steel and Cleveland-Cliffs.

Historically, Q1 typically sees an uptick in steel shipments, so the increase is unsurprising. However, shipments fell across all mills from Q1 2023. This suggests weaker conditions on an annual basis. Despite the nearly 3% decrease in shipments from Q1 2023 to Q1 2024, the average Q1 MetalMiner HRC price rose 8.62% year over year.

Quarterly

HRC steel prices.

Source: MetalMiner Insights,

Risks Mount for Nippon’s U.S. Steel Acquisition

The future of U.S. Steel remains in limbo as election-year politics continue to see Nippon’s potential acquisition draw ire from both sides of the aisle. Once the crown jewel of American manufacturing, U.S. Steel shrunk from its place as the world’s largest steel producer and corporation. By 2022, U.S. Steel’s position fell to the 24th-largest steel producer following years of underperformance. 

Trump promised to block the sale if elected, while President Biden vowed to keep U.S. Steel a “totally American company.” Although there is no guarantee that either candidate will fulfill their campaign promises, the mill remains a bargaining chip that could derail Nippon’s plans.

Recently, the U.S. Department of Justice opened an antitrust investigation into the takeover. By early May, the ongoing investigation triggered Nippon to delay the closing of the acquisition despite approval from U.S. Steel’s shareholders. The company now expects closing to occur in December, after previous expectations that it would be complete by September. However, this new timeline would push the deal beyond November’s presidential election.

Cliffs CEO Lourenco Goncalves Fires Shots at Nippon Steel

After losing the initial bidding war for U.S. Steel, Cliffs remains interested should the deal fall apart. In fact, Cliffs CEO Lourenco Goncalves continues to critique the sale. During the steelmaker’s Q1 earnings call, the outspoken CEO stated, “It still baffles me to this day that the clueless individuals representing Nippon Steel in this embarrassing event felt that they could do this without union support.” He noted later that the White House “has different ways to terminate the Nippon transaction, and we believe that will be done sooner rather than later.”

The sale’s blockage would seemingly guarantee a domestic buyer. This would increase mill consolidation in the U.S., which has historically given domestic producers greater control over prices. The ongoing challenges could also cause Nippon to look for a U.S. partner in the deal, although this remains merely speculative.

steel should-cost models, MetalMiner Insights

Want to know more about changing steel prices? MetalMiner should-cost models give your organization levers to pull for more price transparency from service centers, producers and part suppliers. Explore the models now.

By Nichole Bastin

    FTC's Attack on Pioneer Sends Ripples Through Shale Industry

  • The Federal Trade Commission last week gave the green light to Exxon’s acquisition of Pioneer Natural Resources.

  • The FTC alleged that Sheffield had colluded with OPEC and OPEC+ members to limit production and increase oil prices.

  • In a response to the FTC allegations, the company defended its founder, saying he had always had the U.S. oil industry’s best interest at heart.

The Federal Trade Commission last week gave the green light to Exxon’s acquisition of Pioneer Natural Resources. There was one condition attached to the approval of the $60-billion deal: that Scott Sheffield, the former CEO of Pioneer, does not join the combined company’s board.

The FTC alleged that Sheffield had colluded with OPEC and OPEC+ members to limit production and increase oil prices. The allegations shook the shale oil world, where several large consolidation deals are awaiting the trade watchdog’s approval. Now, the consolidation drive that has marked the last year in U.S. shale may have to slow down.

First, the allegations. According to a news release from last week, the Federal Trade Commission had informed Exxon that it would only approve the merger with Pioneer if Sheffield, who was going to become an Exxon board member as part of the deal, stayed out of it.

“Mr. Sheffield’s past conduct makes it crystal clear that he should be nowhere near Exxon’s boardroom. American consumers shouldn’t pay unfair prices at the pump simply to pad a corporate executive’s pocketbook,” the deputy director of the FTC’s Bureau of Competition, Kyle Mach, said in the release.

“Through public statements and private communications, Pioneer founder and former CEO Scott D. Sheffield has campaigned to organize anticompetitive coordinated output reductions between and among U.S. crude oil producers, and others, including the Organization of Petroleum Exporting Countries (“OPEC”), and a related cartel of other oil-producing countries known as OPEC+,” the Commission in a formal complaint.

The regulator then went on to motivate the attachment of its condition to the Exxon-Pioneer deal approval, saying that it sought “to prevent Pioneer’s Sheffield from engaging in collusive activity that would potentially raise crude oil prices, leading American consumers and businesses to pay higher prices for gasoline, diesel fuel, heating oil and jet fuel.”

Naturally, Pioneer had something to say about the allegations. In a response to the FTC allegations, the company defended its founder, saying he had always had the U.S. oil industry’s best interest at heart. The response also suggested that any communication Sheffield may have conducted with OPEC and OPEC+ members had been to the same end—to protect the U.S. shale industry.

“Mr. Sheffield and Pioneer believe that the FTC’s Complaint reflects a fundamental misunderstanding of the U.S. and global oil markets and misreads the nature and intent of Mr. Sheffield’s actions,” the response said.

The actions in question were conversations with OPEC and OPEC+ officials in 2020, when pandemic lockdowns decimated global oil demand, pushing U.S. oil prices briefly below zero. At the time, Sheffield was an advocate of production cuts in the shale patch as well, in a bid to minimize the damage that the demand drop was already causing the industry, Pioneer also said.

It didn’t make any difference, however. The FTC had already made up its mind and acted on it. As a result, Bloomberg and the Financial Times are reporting that shale executives are getting spooked about future mergers in case they get caught in the crosshairs of the regulator, which has not exactly been a fan of the oil industry since 2020.

“The implications go far beyond Sheffield,” James Lucier, an analyst at Capital Alpha Partners, said in a note to clients following the news, as quoted by the Financial Times. “The FTC has not to date taken an adversarial approach toward oil industry mergers . . . This relative hands-off policy is no more.”

In a sense, the FTC’s move against Sheffield is the other shoe dropping as far as the oil industry is concerned. The regulator has been looking for a way to interfere with the consolidation drive prompted by strong financial results and limited untapped inventory. Until recently, it has been unable to find one. But now, it seems, it has.

Not everyone agrees the FTC’s attack on Sheffield needs to be taken particularly seriously. “This is the government trying to save some face — it’s irrelevant to the whole issue of antitrust,” the managing director of investment bankers Roth MKM, Leo Mariani, told Bloomberg. “This whole thing is just politics ultimately. In an election year it helps to be tough on Big Oil.”

President Biden and his fellow Democrats have repeatedly made it clear that the anti-oil lobby is a key voter demographic and they have been busy tending to its needs. Earlier this year, Biden’s White House paused approval of new LNG export capacity as part of these efforts. Then, just this month, Democrats in Congress announced the completion of an investigation into Big Oil that, while it did not contain anything in the way of a revelation, sought to reinforce an image of the industry as the hydrocarbon equivalent of Big Tobacco, deserving of an identical treatment.

Whether any of this will help Biden win the November vote remains to be seen, but judging by the latest in his approval ratings, there may be a possibility that most Americans have bigger problems than climate change and oil.

By Irina Slav for Oilprice.com

    Deepwater Exploration Is Booming Again

The majors are investing more in deepwater exploration as they are doubling down on their pledge to continue delivering oil and gas to meet global demand. The high offshore drilling activity is already showing in the rising profits and backlogs of the world's top oilfield services providers and rig charterers.  

The oil and gas majors—ExxonMobil, Chevron, Shell, BP, TotalEnergies, and Eni—are winning more acreage in frontier basins for deepwater drilling in the Atlantic Margin, the Eastern Mediterranean, and Asia, with Namibia and South America standing out, according to estimates by consultancy Rystad Energy.

Next year, capital expenditure (capex) on new deepwater drilling is set to jump to the highest level in 12 years in 2025, Rystad Energy reckons. At the same time, capex on all-new and existing deepwater fields could surge by 30% in 2027 compared to 2023, to $130.7 billion, per the consultancy's estimates cited by Reuters.

here have been some major recent exploration successes in offshore areas. These include Guyana's Stabroek block, where Exxon and partners have already made discoveries estimated at a total of 11 billion barrels of oil equivalent in place, as well as Namibia, where Shell, TotalEnergies, and Portugal's Galp have announced major oil discoveries in the past two years, including one giant find just last month.

At the end of April, Galp Energia said that the first phase of its exploration in the Mopane field offshore Namibia could contain at least 10 billion barrels of oil.

Namibia is a key exploration target for Shell, TotalEnergies, and Portugal-based Galp.

TotalEnergies and Shell have already made large discoveries offshore Namibia, kicking off the Namibian oil rush in 2022.

TotalEnergies made a significant discovery of light oil with associated gas on the Venus prospect in the Orange Basin in early 2022. Venus in Namibia could be a "giant oil and gas discovery," the French supermajor said in an investor presentation in September 2022.

Over the past two years, Shell has made four oil and gas discoveries in the Orange Basin offshore Namibia.

TotalEnergies and QatarEnergy are also expanding their efforts to explore for oil and gas in the Orange Basin offshore Namibia by acquiring a nearby license in the basin in South African waters. 

"Following the Venus success in Namibia, TotalEnergies is continuing to progress its Exploration effort in the Orange Basin, by entering this promising exploration license in South Africa," Kevin McLachlan, Senior Vice-President Exploration of TotalEnergies, said in March.

Just last week, a BP-Eni joint venture, Azule Energy, announced an agreement to take 42.5% in an offshore block in Namibia, which Azule Energy CEO Adriano Mongini described as a "highly prospective hydrocarbon region."

Despite still uncertain development designs, timing, and production levels, Wood Mackenzie estimates that Namibia's oil economics could be robust, with net present value (NPV) remaining positive even at oil prices as low as $40 per barrel.

Namibia and other deepwater offshore drilling hotspots are pushing demand for offshore rigs and drilling services, as evidenced by the most recent financial results of major service providers.

A rebound in offshore drilling and continued demand for oil and gas helped SLB, the world's largest oilfield services provider, boost first-quarter earnings and offset a weaker North American market.

Valaris, a top offshore rig provider, raised its total contract backlog to more than $4.0 billion as of April 30, 2024—the sixth consecutive quarter of backlog growth and a 43% increase from twelve months ago.

"We see strong customer demand for work that is expected to commence in 2025 and 2026, highlighting the longevity of this upcycle," Valaris's president and CEO Anton Dibowitz said.

By Tsvetana Paraskova for Oilprice.com

Nickel 28 fires founders on ‘serious misconduct’ that they deny

Bloomberg News | May 6, 2024 | 

Anthony Milewski. Image TMX – The View from the C-Suite via YouTube

Nickel 28 Capital Corp. said it has fired its founders, including chief executive officer Anthony Milewski, after an investigation uncovered “serious misconduct” — claims the ousted management team says are untrue and part of a years-long battle for control at the Canadian mining firm.


The nickel and cobalt producer removed Milewski, along with president Justin Cochrane and chief financial officer Conor Kearns, with immediate effect, it said Monday, after the board reviewed findings made by an independent special committee. The investigation found evidence the management team had breached their duties and repeatedly lacked judgment, the board said.

Milewski, Cochrane and Kearns denied the allegations in a separate statement and said they believe their terminations are tied to a fight for control led by top shareholder Pelham Investment Partners LP, a New York-based hedge fund. Pelham didn’t immediately reply to a request for comment.

The upheaval at Nickel 28 comes at a time of turmoil in the wider battery-metal industry, as demand for electric vehicles stagnates in some key markets. The fits and starts of the sector are nothing new for commodities investors like Milewski, whose previous company owned the largest private cobalt stockpile on the planet right before prices crashed in 2018.

Undeterred, he then formed Nickel 28 to continue to invest in the battery-metal sector. The Toronto-based company owns interests and royalties in mining projects in Canada, Australia and Papua New Guinea, with a focus on nickel and cobalt mining.

In March 2023, Pelham launched a tender offer to grow its ownership of the company, citing concerns including a lack of “independent oversight and what we view as excessive executive compensation.” It then pushed to name new directors to the board. In August, Nickel 28 reconstituted its board of directors, including adding Pelham founder Ned Collery and Brett Richards, CEO of Goldshore Resources Inc. Since then, the board has been “second-guessing management decisions,” the founders said.

Shortly after joining the board, Collery and Richards “launched and conducted an investigation tainted by potential conflicts of interest, culminating in the unlawful withholding of earned compensation and these unlawful terminations,” the founders said in the statement, adding that they may pursue legal remedies if the parties can’t work it out amicably.

The special committee was formed in early December 2023 to investigate “historical compensation arrangements, including grants made under the company’s omnibus long-term incentive plan,” the board’s statement said. It also looked into compliance with company policies, including its insider trading and expense policies. It didn’t specify in the statement what specific policies had been violated.

Director Christopher Wallace will step in as interim CEO.

(By Jacob Lorinc)
Manara Minerals’ team in Pakistan for talks on Reko Diq stake


Reuters | May 6, 2024 | 

Barrick Gold has targeted 2028 as the year of first production for Pakistan’s Reko Diq copper-gold mine. Barrick Gold photo


Executives from Saudi Arabian mining company Manara Minerals are in Islamabad to continue talks about buying a stake in Pakistan’s Reko Diq gold and copper project, a Pakistan government document showed on Monday.


Located in Pakistan’s restive southwestern Balochistan province, it is considered one of the world’s largest underdeveloped copper-gold areas by global mining company Barrick Gold Corp, which owns the project jointly with Pakistan.


The Manara officials are part of a large delegation of Saudi investors and companies that arrived in Islamabad on Sunday, according to a document seen by Reuters listing officials in the delegation.

The document listed Manara Minerals’ general manager as wanting to “continue the negotiations on the Reko Diq project”.

Barrick has said it will invest up to $10 billion to develop the project.

Manara Minerals, a joint venture between state-owned Saudi miner Ma’aden and Saudi Arabia’s Public Investment Fund (PIF), declined to comment.

Pakistan’s Petroleum Minister Musadik Malik and Commerce Minister Jam Kamal said on Monday that the Saudi delegation, representing three dozen investors and companies, will meet Pakistani companies to explore investment in sectors including agriculture, mining, aviation and livestock.

They did not name the Saudi companies.

Manara’s acting CEO Robert Wilt told Reuters in an interview in January that the company was in talks to potentially buy a stake in the Reko Diq mine.

Bloomberg has reported that Manara was initially interested in investing $1 billion to take a minority share in the copper mine.

Malik, the petroleum minister, who was also appointed by Prime Minister Shehbaz Sharif as a focal person for Saudi investments, did not respond to a Reuters request for a comment.

The Saudi delegation’s trip to Islamabad follows Saudi Foreign Minister Prince Faisal bin Farhan bin Abdullah’s visit to Islamabad last month, when he was briefed by Pakistani authorities on various avenues to invest in the country.

Pakistan, which is trying to navigate a path to economic recovery after securing an IMF bailout, desperately needs foreign investment to help fight a chronic balance of payments crisis.

(By Asif Shahzad and Pesha Magid; Editing by Susan Fenton)
Colombia’s largest drug cartel extracting gold from protected area – governor

Staff Writer | May 5, 2024 | 

Santander Governor Juvenal Diaz. (Image by Díaz press team, Facebook.)

The governor of Colombia’s central-northern department of Santander, Juvenal Díaz, has denounced the presence of members of the Gulf Clan, also known as the Gaitanista Army of Colombia (EGC), in the Santurbán moor.


The EGC is a neo-paramilitary group and likely the country’s largest drug cartel, which was created after the demobilization of the United Self-Defense Forces of Colombia. Their presence in Santander is meant to control illegal gold mining operations.

According to Díaz – a retired army general turned politician – the criminals are not only taking over the area but also polluting water sources.

“We have asked the National Army to establish a presence there,” the governor said during an interview with local media. “Now, we have to raise people’s awareness so that they report any irregular activities because these groups start taking over the mines and create deaths and displacements. We don’t want that.”

Díaz also said he is committed to protecting the moor – known as páramo in Spanish – as mining has been forbidden in the area since 2011.

“As governor, I have said that I will be the first defender of the water and the moors in this department. There cannot be mining here. I am committed to the promise that helped me win the elections, which focused on prioritizing the environment in tandem with human well-being.”

The Santurbán moor is a protected area of the Andes mountains. It is covered with subalpine forests above the continuous tree line but below the permanent snow mark, where water is naturally stored during the rainy season and released during the dry season.

It is also the area surrounding the $1.2-billion Soto Norte gold project, presented by the Sociedad Minera de Santander (Minesa), a company owned by the government of Abu Dhabi through its investment arm Mubadala Investment Company. The proposal was shelved in 2020 by Colombia’s National Authority of Environmental Licences, under the argument that there were too many unanswered questions in Soto Norte’s environmental impact assessment and follow-up documentation submitted by Minesa.

The boundaries of Santurbán also needed to be reviewed. According to Colombia’s Constitutional Court, there wasn’t a clear and transparent consultation process with local communities when the boundaries were first established. Thus, their rights to a healthy environment and clean water could be at risk if mining and similar activities were allowed in surrounding areas.

In 2019, the Ministry of Environment was tasked with setting the boundaries, but according to the Attorney General’s Office and the Ombudsman’s Office, this process has been continuously delayed without explanation.

The lack of proper delimitation paired with the ban on industrial mining has allowed small-scale, generally irregular operations to sprout.
STOP DEEP SEA MINING
A leadership battle is brewing at deep sea mining’s regulatory body

Bloomberg News | May 6, 2024 | 

Miners plan to extract cobalt and other battery metals from the seabed. (Image courtesy of The Metals Co.)

The secretary-general of the International Seabed Authority is set to run for a third term leading the United Nations-affiliated organization that regulates deep sea mining, as control of mineral resources used to make electric car batteries becomes a focus of US-China rivalry.


The ISA’s 168 member nations and the European Union will elect the next secretary-general at what is expected to be a pivotal meeting in July. Secretary-General Michael Lodge, a UK lawyer, will be opposed by Brazilian marine scientist Leticia Carvalho in an election that will shape the future of deep sea mining. It comes as the ISA faces pressure to finish writing regulations that could allow mining to begin within the next two years.

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 operations of the organization’s administrative arm and the secretary-general negotiates contracts with mining companies.

Lodge’s candidacy emerged Sunday in a diplomatic note from ISA member state Kiribati, a small South Pacific island nation that announced it would sponsor Lodge’s nomination.

Candidates for secretary-general are usually sponsored by their country of citizenship: The UK sponsored Lodge’s first term as secretary-general (though his election to a second term, which happened under a “silent procedure” during the Covid-19 pandemic, is less clear). Carvalho, an official with UN Environment Programme in Nairobi, was likewise put forth by Brazil’s delegate in March.

Lodge’s second four-year term is set to end in December. An ISA spokesperson declined to confirm that Lodge is running for re-election. Officials from Kiribati did not respond to a request for comment.

“Kiribati considers Michael Lodge uniquely well-placed to continue the excellent work he has done to date,” according to the diplomatic note the country sent to UN member nations, which was obtained by Bloomberg Green. Kiribati controls a mining concession, meaning it would receive royalties and other payments if seabed mining proceeds.

If Carvalho is elected in July, she would likely represent a marked change from the administration of Lodge, who 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 UK in October called for a moratorium on deep sea mining, joining two dozen other ISA member nations that support a ban or pause until its environmental impacts are understood.

(By Todd Woody)
First Quantum hopes new Panamanian leader brings fresh look to disputed copper mine


Reuters | May 6, 2024 | 
Cobre Panama is the largest development ever undertaken by a private firm in Panama. Image courtesy of First Quantum Minerals

First Quantum Minerals said on Monday it is looking forward to talks with Panama’s new government to find a resolution to the Canadian company’s disputed Cobre Panama mine.


Panama on Sunday elected Jose Raul Mulino as its new president.

Analysts see the election result as a positive development for the Cobre Panama mine, which accounts for about 1% of global copper output. Panama’s outgoing government ordered the mine shut down last year after public protests over environmental damage from mining in the Central American country.

Mulino won the election with 34% of the vote, in a campaign mostly centered on his former boss, ex-President Ricardo Martinelli, who had strong popular support, but was barred from running in March due to a money laundering conviction.


While most of the other contenders for the presidency took a hard-line stance against mining, Mulino showed a less conflicted approach.

“We look forward to a dialogue with the new administration and to working together once it takes office to find a resolution that is in the best interests of Panama,” a First Quantum spokesperson said in an emailed statement.

Analysts are waiting to see what policy changes the new government will implement when it takes power in July.

“Mulino is viewed as pro-business and has been supportive of mining in the past; however, like all the candidates, he was careful with comments about mining in the election campaign,” RBC Capital Markets said in a research note.

But there is still uncertainty around the Cobre Panama mine, with work to be done to improve public sentiment towards mining and negotiations with the new government before contemplating a re-start, the report added.

Even if Mulino decides to take a different approach to mining, hurdles remain in the Panamanian Congress, where no party secured a majority. The group with the most seats is comprised of independent lawmakers, with many of them having participated and encouraged anti-mining protests last year.

Investment banking firm BancTrust & Co said the current political situation in Panama could make it difficult to revive the mining contract at least in the short-term.

First Quantum shares gave up early gains and were down 0.9% in midday trading. The stock is down about 50% from a 52-week high.

(By Divya Rajagopal and Valentine Hilarie; Editing by Sriraj Kalluvila, Emelia Sithole-Matarise and Paul Simao)