Turkey Emerges as the Largest Coal-Fired Electricity Producer in Europe

By Tsvetana Paraskova - May 22, 2024,

Turkey has consumed more coal-fired electricity in 2024 than any country in Europe.

Falling coal prices and reliance on Russian imports drive Turkey's coal dependency.

This shift away from renewables raises concerns about Turkey's environmental impact and energy security.

Turkey has emerged as the largest coal-fired electricity producer in Europe as major EU economies have continued to shut down coal power plants and boost renewable energy generation.    

In the first four months of this year, Turkey was the top coal power producer in Europe, overtaking Germany, according to data from energy think tank Ember cited by Reuters columnist Gavin Maguire.

This development highlights the diverging paths the EU and Turkey have taken in securing electricity supply. While the EU bloc—including top coal power producer Germany—is looking to reduce reliance on coal as much as possible, Turkey is importing and using more coal to meet its rising electricity demand as coal has become more economically viable to burn in power plants than imported natural gas. 

In 2023, Turkey overtook Poland to become Europe’s second-largest coal-fired power generator, behind Germany, Ember said in its Türkiye Electricity Review 2024 in March. At the same time, Turkey’s dependence on imported coal for electricity generation continued to increase, Ember’s energy analyst Bahadir Gumus says.  

Coal’s share in Turkey’s total power generation hit a record high of 36% last year, compared to a 12% share in the European Union. Turkey is dependent on coal imports from Russia—with which Ankara has kept friendly diplomatic and trade relations after the Russian invasion of Ukraine—and Russian coal imports held a 73% share in Turkey’s electricity generation, according to Ember’s data. 

Unlike the EU, Turkey doesn’t have a ban on imports of Russian energy products. 

As coal prices fell more than natural gas prices after the 2022 spike, gas-fired power generation in Turkey fell for the second year in a row in 2023, marking its lowest generation over four years. 

“Türkiye’s growing reliance on fossil fuels in electricity generation pushes Türkiye further from the path of clean energy transition,” Ember’s Gumus said. 

This year, Turkey generated 36 terawatt hours (TWh) of coal-fired electricity between January and April, surpassing Germany’s coal power output of 34.6 TWh and Poland’s 31.3 TWh, per Ember’s data.  

Germany, until recently Europe’s top coal-fired power producer, shut down additional coal plants this spring. 

At the beginning of the 2023/2024 winter, Germany’s government said it was bringing back online several coal-fired units for the winter in an attempt to save natural gas and avoid power supply shortfalls. 

Without Russian gas supply, the recent energy and gas crisis in Germany—and in Europe—has been keeping utilities and governments on edge and ready to have mothballed coal-fired power plants on stand-by in the coldest winter days to ensure the security of electricity supply. 

After the end of the winter, German utility RWE shut down permanently five coal power plant units, removing 2,100 megawatts (MW) of lignite capacity permanently from the grid. RWE has already decommissioned 12 lignite-fired power plant units with a total output of 4,200 MW since the end of 2020 and is confident it would complete its coal phase-out by 2030. 

In total, Germany shut down permanently 15 coal-fired power plants last month. 

“Several coal-fired power plants that were still on the grid as a precautionary measure over the last two years are therefore now superfluous and can be taken off the grid for good,” Economy Minister Robert Habeck told German agency dpa in early April, adding these were “neither necessary nor economical.” 

In 2023, lignite-powered electricity production in Germany slumped to the lowest level since 1963, while hard coal-powered plants produced the lowest electricity volumes since 1955, according to data compiled by the Fraunhofer Institute for Solar Energy Systems ISE. 

In Germany’s neighbor to the east, Poland, the biggest state utilities are preparing for a surge in clean energy investments in 2025, hoping that the government would move ahead with a plan to spin off coal assets that have been restricting the companies’ access to financial markets. 

Poland’s power grid operator said in March that it would spend $16 billion on upgrading and expanding its power grid to accommodate additional renewable and nuclear capacity.

Coal Still Powers More U.S. Electricity Than Any Renewable Energy Source

Tsvetana Paraskova - May 20, 2024

Coal still holds about 16% share of electricity generation.

Coal is declining, but not at the fast pace environmental campaigners and enthusiasts would have liked to.

But coal-fired power generation could rise in the summer, especially if heatwaves hit areas where wind power cannot provide the additional power supply.

Despite a continuous decline in U.S. coal power generation, the share of coal in America’s electricity mix is still above 15%, more than any renewable energy source.   

All renewable energy sources combined—wind, solar, hydropower, biomass, and geothermal—surpassed coal-fired generation in the U.S. electric power sector for the first time in 2022. But coal still holds about 16% share of electricity generation, more than wind’s share of around 11%, hydropower’s 6%, or solar power’s 4% share of the electric generation mix.  

True, coal generation and share have been declining in recent years – thanks to a surge in renewables and a higher share of natural gas-powered electricity due to rising production and falling gas prices. But coal is still playing a role in providing reliable baseload electricity and while falling, its share and contribution to the U.S. power system isn’t negligible at all.

Coal is declining, but not at the fast pace environmental campaigners and enthusiasts would have liked to.

The Biden Administration aims to make the U.S. power grid zero-emission by 2035. But this would be difficult to achieve, considering that currently fossil fuels – mostly natural gas and coal – provide 60% of the total U.S. electricity generation. Last year, gas accounted for 43% and coal for more than 16%.

Early this year, coal’s share held above 15%, although coal power generation fell between January and April to the lowest level in four years, per LSEG data cited by Reuters columnist Gavin Maguire.

Coal consumption typically falls in the spring and autumn – the so-called ‘shoulder’ season – when demand for heating and cooling is at its lowest.

But coal-fired power generation could rise in the summer, especially if heatwaves hit areas where wind power cannot provide the additional power supply.

Moreover, operators have planned fewer coal capacity retirements this year, per EIA data. Operators plan to retire 5.2 gigawatts (GW) of U.S. electric generating capacity in 2024, with coal and natural gas jointly accounting for 91% of the planned capacity retirements in the United States this year. The total capacity planned for retirement would be 62% lower compared to last year, when 13.5 GW was retired, and the least in any year since 2008.

After 22.3 GW of U.S. coal-fired electric generating capacity retired over the past two years, coal retirements will slow down in 2024, the EIA said in February. The 2.3 GW of coal-fired capacity scheduled to retire accounts for 1.3% of the U.S. coal fleet that was in operation as of the end of 2023. Coal retirements are scheduled to rebound in 2025 when operators expect to retire 10.9 GW.

The U.S. is now retiring coal capacity every year, but some areas depend on coal for their power generation more than others, while the expected surge in electricity demand due to data centers to support AI technologies will also require a stable power supply.

Five U.S. states rely on coal for more than half of their electricity generation. These are North Dakota, Missouri, Kentucky, Wyoming, and West Virginia, Reuters’s Maguire notes.

Moreover, data centers have seen such explosive growth that they are taxing utilities beyond what soaring power demand is calling for. 

Some utilities in the eastern and southern parts of the U.S. are proposing build-outs of new natural gas-fired capacity alongside renewables to support the growth in electricity consumption coming from data centers. Others have planned to delay the timeline for retiring coal-fired capacity to ensure grid reliability.

For example, Kansas City-based utility Evergy said in June 2023 that it would retire coal operations at its Lawrence Energy Center only in 2028, compared to earlier plans for end-2023 retirement.

“Our service area is experiencing some of its most robust electricity demand growth in decades, including very large projects like the Panasonic electric vehicle battery manufacturing factory and the Meta datacenter, as well as broad-based economic development in both Kansas and Missouri,” Evergy’s president and CEO David Campbell said last year.

By Tsvetana Paraskova for Oilprice.com

SANCTION BUSTERS

Glencore, Rusal extend aluminum supply contract into 2025

Reuters | May 22, 2024 | 

Credit: Rusal

Swiss-based trading house Glencore and aluminum producer Rusal have extended their long-term supply contract into next year after the amount traded so far has amounted to a fraction of the agreement’s maximum volumes, a source with direct knowledge said on Wednesday.


Glencore’s contract with Russia’s Rusal, the world’s largest aluminum producer outside China, was due to expire this year unless extended.

Rusal and Glencore declined to comment.

Glencore is legally bound to continue the contract because Rusal has not been directly targeted by Western sanctions, the source, who declined to be identified, told Reuters.

Last month, the London Metal Exchange (LME) broadly banned Russian aluminum, copper and nickel produced from April 13 to comply with new US and UK sanctions imposed over Russia’s 2022 invasion of Ukraine.

During the first four years of the contract up to last year, Glencore bought about one-third of the maximum 5.24 million metric tons, calculations by Reuters based on regulatory filings show.

“The remaining volumes will be taken at a later date,” the source said.

In 2023, Glencore bought aluminum worth $1.06 billion under the contract compared to a maximum of $3.93 billion worth, Rusal said in its annual report last month.

Last year’s purchases by Glencore from Rusal would amount to around 459,000 tons, according to a Reuters calculation based on the average LME cash price of $2,307 per ton for 2023.

It is a rough estimate because the price would also include regional premiums that depend on the shipments’ destinations. Rusal’s total 2023 aluminum sales were 4.2 million tons.

Rusal aluminum sales to Glencore fall short of contract caps

(By Eric Onstad and Polina Devitt; Editing by Rod Nickel)

Record gold and copper prices are also a boon for illegal mining in Peru

PRIMITIVE ACCUMULATION OF CAPITAL

Bloomberg News | May 22, 2024 |

Madre de Dios is one of the areas in Peru affected by illegal mining. (Image courtesy of Peru’s Ministry of Defense, Flickr).

Record prices of gold and copper are buoying the spirits of mining leaders gathered in the Peruvian capital this week.


But surging metal markets are also stoking concerns that the windfall will accelerate growth in illegal production that will increasingly disrupt the operations of global mining companies.

Informal miners are encroaching on the sites of large legal mines in the Andean nation, with executives at the Lima conference telling Bloomberg News they fear confrontations will worsen as prices climb. It’s an example of how surging commodity prices can bolster shadow economies around the world, particularly in poorer nations with weaker institutions, in a challenge to large companies and authorities.

The situation has also led to dangerous confrontations: One of Peru’s top gold miners, Minera Poderosa, has had more than a dozen employees killed in what the industry is increasingly describing as an open conflict between the company and violent illegal miners.

While most illegal mines in Peru focus on gold, there are also cases of undocumented copper operators who have found ways to handle the much bigger volumes needed to extract the wiring metal. Southern Copper Corp. has been trying to clear illegal miners from one of its projects, while MMG Ltd.’s Las Bambas faces the challenge of clearing the site of what will become a planned third pit. First Quantum Minerals Ltd. said Wednesday that it’s also had illegal miners at its nearby Haquira project.

“Evidently, higher prices bring incentives,” Southern Copper chief financial officer Raul Jacob said in an interview. “And we know that if we leave things the way they are now, there will be more illegal mining.”

Energy and Mines Minister Romulo Mucho said this week that illegal mining had become a “huge challenge” and that the government was working on a bill to create a new framework for small miners. An existing scheme to bring informal miners into the system has been criticized as having the unintended consequence of providing illegal groups further shelter from regulatory scrutiny.
Gold destinations

The output of illicit gold in the Andean nation may have climbed to 2 million ounces, or about $4.5 billion, said Victor Gobitz, head of mining and energy society SNMPE, citing the gap between formal output and shipments last year.

While foundries in Europe and North America heavily scrutinize the origin of bullion, that’s not the case in places like India and the United Arab Emirates, Gobitz said.

Operators in Peru exploit legal loopholes and a lack of supervision to boost profit, he said. Processing plants are able to register as small miners at a regional level, thereby staying off the radar of national regulators. With gold prices up about 80% in the past five years, such plants are able to fund more illegal mines in remote border areas and the Amazon, Gobitz said.

The formal mining industry is urging authorities and parliamentarians to trace the entire productive chain, including who produces, trades and uses supplies like explosives — and where bullion is exported for final refining. There has been some push-back from those defending the as many as half a million people working in precarious conditions in Peru.

“Those profiting are people that have treatment plants, who more than likely fund small miners, and those that sell critical supplies,” Gobitz said. “With such high prices and a state that has limited reach in these remote areas, this activity emerges.”

(By James Attwood and Marcelo Rochabrun)

Peru’s 2024 copper target is realistic, mining magnates say

Reuters | May 21, 2024 |

Las Bambas copper mine. (Image by MMG Las Bambas, Facebook.)

The Peruvian government’s 2024 copper production goal of 3 million metric tons is realistic, senior industry executives said on Tuesday, as the country seeks to boost mining investments to help lift the economy out of recession.


The South American country produced 2.76 million tons of copper last year, dropping its rank from first to second for global production of the red metal. It still ranks first globally for export volumes


Mining is key to Peru’s economy, which fell into a recession in 2023 due to adverse climate effects, social conflicts and a drop in investments.

“The 3 million ton projection is realistic,” Carlos Castro, manager of corporate affairs and business development at Minera Las Bambas, told Reuters on Tuesday on the sidelines of a forum attended by global mining executives.

Las Bambas, owned by the China’s MMG Ltd, has seen production drop in the recent years in the midst of social protests by residents demanding greater benefits from the mine.

“It’s a reasonable projection,” said Raul Jacob, vice president of finance at Southern Copper, the country’s third-largest copper producer.

Southern Copper hopes to increase its copper production by 20% this year from 2023, when it extracted 374,149 tons of the metal, according to government figures.


Peru’s Mining and Energy Minister Romulo Mucho announced the 3-million-ton goal in March.

“We’re going to break the record this year, we can do it, the first three months of the year show that we’re growing,” Mucho said on Tuesday.

Miners’ confidence comes as copper prices hit two-year highs.

Victor Gobitz, president of Antamina, Peru’s second-largest copper producer, said the forecast is “very optimistic,” but still achievable. “I would estimate production will land in the 2.8 to 3 million tons range.”

Antamina, which is controlled by Glencore, BHP, Teck and Mitsubishi, produced 435,378 tons of copper last year, and hopes to maintain that level in 2024.

In the last year, Peru has granted environmental permits for the expansion of some key projects and expects the construction of others such as Southern Copper’s Tia Maria.

Southern Copper’s long-stalled $1.4 billion Tia Maria project in Peru is set to break ground by the end of the year or in the first half of 2025, according to a senior company executive.

(By Marco Aquino; Editing by David Gregorio)

STOP! SEABED MINING

At least two companies seek Norway seabed mining permits

Reuters | May 22, 2024 | 

Norway shore (Stock Image)

Two companies said on Wednesday they are seeking offshore seabed acreage on the Norwegian continental shelf where they hope to explore for minerals, in what could be the start of a controversial new mining industry.


The process puts Norway on track to become the first country to start commercial production from its continental shelf of metals useful in the transition from from oil and gas, such as copper, cobalt and zinc, as well as rare earth elements (REE).

Nominations for acreage submitted by a May 21 deadline will form the basis for announcing the country’s first seabed mineral exploration licensing round later this year, Norwegian authorities have said.

Norway’s energy ministry did not immediately respond to a request for comment.

Startup Loke, backed by TechnipFMC, Wilhelmsen and Kongsberg Gruppen, told Reuters it had nominated a substantial number of blocks focusing on areas with polymetallic crusts, rich in cobalt and rare earth elements.

“We are encouraged by the significant resource potential and are looking forward to the first licensing round,” chief executive Walter Sognnes told Reuters in an email.

Oslo-listed Green Minerals said it had nominated four areas, each comprising several blocks. The company expects first ore from pilot production in 2028, according to a recent investor presentation.

Environmental groups, including Greenpeace, have called for a global moratorium on mining for seabed minerals, arguing that it can cause irreversible harm to little researched life forms.

Norway approves deep sea mining in Arctic Ocean

The Norwegian government says the exploration phase should help to establish the potential impact of seabed mineral extraction, and also provide more knowledge about seabed organisms.

Norwegian oil firm Aker BP AKRBP declined to say whether it had submitted nominations, but has previously said it would be interested in exploring the resource potential.

The government aims to issue first licences in 2025, but companies will require separate approvals to start production.

The country’s parliament, which decided in January to open vast areas in the Norwegian and the Greenland Seas to the potential new industry, will also have to approve the first projects.

(By Nerijus Adomaitis; Editing by Terje Solsvik and Philippa Fletcher)

Six new large mines need to come online annually by 2050 to meet global copper demand – study

Staff Writer | May 22, 2024 | 

Bingham Canyon Mine, also known as the Kennecott Copper Mine, south of Salt Lake City, Utah. (Image by Farragutful, Wikimedia Commons.)

A study by researchers at the University of Michigan and Cornell University has found that copper cannot be mined quickly enough to keep up with current US policy guidelines to transition the country’s electricity and vehicle infrastructure to renewable energy.


The paper, published by the International Energy Forum, examined 120 years of global data from copper mining companies and calculated how much copper the US electricity infrastructure and car fleet would need to upgrade to renewable energy. It found that renewable energy’s copper needs would outstrip what copper mines can produce at the current rate.

This is particularly the case taking into account that the Inflation Reduction Act, signed into law in 2022, calls for 100% of cars manufactured to be electric vehicles by 2035. But an electric vehicle requires three to five times as much copper as an internal combustion engine vehicle — not to mention the copper required for upgrades to the electric grid.

“A normal Honda Accord needs about 40 pounds of copper. The same battery electric Honda Accord needs almost 200 pounds of copper. Onshore wind turbines require about 10 tons of copper, and in offshore wind turbines, that amount can more than double,” said Adam Simon, co-author of the study. “We show in the paper that the amount of copper needed is essentially impossible for mining companies to produce.”

(Graph by the International Energy Forum).

The shortfall is in part because of the permitting process for mining companies. The average time between discovering a new copper mineral deposit and getting a permit to build a mine is about 20 years.

Copper is mined by more than 100 companies operating mines on six continents. The researchers drew data for global copper production back to 1900, which told them the global amount of copper mining companies had produced over 120 years. They then modelled how much copper mining companies are likely to produce for the rest of the century.
What’s achievable

The researchers found that between 2018 and 2050, the world will need to mine 115% more copper than has been mined in all human history until 2018 just to meet “business as usual.” This would meet our current copper needs and support the developing world without considering the green energy transition.

To meet the copper needs of electrifying the global vehicle fleet, as many as six new large copper mines must be brought online annually over the next several decades. About 40% of the production from new mines will be required for electric vehicle-related grid upgrades.

“I’m fully on board with the energy transition. However, it needs to be done in a way that’s achievable,” Simon said.

Instead of fully electrifying the US fleet of vehicles, the researcher suggests focusing on manufacturing hybrid vehicles.

“We are hoping the study gets picked up by policymakers who should consider copper as the limiting factor for the energy transition, and to think about how copper is allocated,” Simon said. “We know, for example, that a Toyota Prius actually has a slightly better impact on climate than a Tesla. Instead of producing 20 million electric vehicles in the United States and globally, 100 million battery electric vehicles each year, would it be more feasible to focus on building 20 million hybrid vehicles?”

The researcher also points out that copper will be needed for developing countries to build infrastructure, such as building an electric grid for the approximately 1 billion people who don’t yet have access to electricity; to provide clean water drinking facilities for the approximately 2 billion people who don’t have access to clean water; and wastewater treatment for the 4 billion people who don’t have access to sanitation facilities.

“Renewable energy technologies, clean water, wastewater, electricity — it cannot exist without copper. So we then end up with tension between how much copper we need to build infrastructure in less developed countries versus how much copper we need for the energy transition,” Simon said.

“Our study highlights that significant progress can be made to reduce emissions in the United States. However, the current — almost singular — emphasis on downstream manufacture of renewable energy technologies cannot be met by upstream mine production of copper and other metals without a complete mindset change about mining among environmental groups and policymakers.”

Fortescue excluded from world’s biggest hydropower plant development

Bloomberg News | May 22, 2024 | 

Inga Dam. Image source: Britannica

A company owned by Australian mining billionaire Andrew Forrest will no longer develop the world’s biggest hydropower project in Democratic Republic of Congo, according to President Felix Tshisekedi’s office, which has replaced the firm with a Nigerian oil producer.


Natural Oilfield Services Ltd. signed a preliminary deal with Congo on May 9 to build a smaller version of Fortescue Ltd.’s proposed Grand Inga project, which would have generated around 40 gigawatts of hydropower.

The Lagos-based company has agreed to undertake feasibility studies for a 7-gigawatt facility on the Congo River, according to a statement from the presidential agency overseeing Inga’s development. The revised proposal – concluded at a ceremony in the capital, Kinshasa – includes the construction of an aluminum foundry and a refinery capable of processing 4 million tons and 8 million tons each year, respectively.

Natural Oilfield’s Indian owners have been accused by the authorities in New Delhi of absconding after defrauding public banks of about $1.7 billion. The company and a lawyer representing its founders didn’t respond to requests for comment.

If built to full capacity, Grand Inga would supplant the Three Gorges Dam as the world’s biggest source of hydropower. It’s long faced headwinds because of Congo’s history of corruption and the expected cost of the multiphase project – with some estimates topping $80 billion.

There are already two dams at the Inga site with about 1.8 gigawatts of installed capacity that were built more than 40 years ago. Most of that electricity is transmitted 1,000 miles across the country to power Congo’s copper and cobalt mines, which are run by the likes of CMOC Ltd., China Railway Group Ltd. and Glencore Plc.


Fortescue itself replaced a consortium of Spanish and Chinese companies, which failed to develop a $14 billion, 11-gigawatt version of the project known as Inga III.

Fortescue will no longer participate in the revised Inga plan, Congo’s presidency told Bloomberg.

“We have not been notified of any change to the deed of agreement we have in place with the DRC government, or about any other agreements that have been signed with other parties,” a spokesperson for Forrest’s firm said in an emailed response to questions on Thursday. “Fortescue remains open to continuing discussions about our future in the DRC.”

The Australian company planned to develop a green hydrogen project using Inga’s power. The webpage for the project is no longer operational.

Natural Oilfield is a subsidiary of Sterling Oil Exploration & Production Co., which pumps more crude in Nigeria than any company other than multinational giants like Shell Plc, Exxon Mobil Corp. and Chevron Corp. Sterling currently produces about 70,000 barrels per day, while Natural Oilfield this month commissioned a new oil block in the West African country, where it’s targeting an additional 40,000 barrels a day.

India’s top investigating agency charged Sterling’s founders – Nitin and Chetan Sandesara – in late 2019. The Central Bureau of Investigation has told the country’s Supreme Court that the brothers conducted a “well-calculated economic fraud” that left their Mumbai-headquartered conglomerate owing more than 140 billion rupees ($1.7 billion) to public lenders.

In a complaint, India’s Enforcement Directorate – another federal investigative agency – alleged that 60% of about $900 million raised between 2004 and 2013 for the Sandesaras’ Indian companies “was diverted and ultimately laundered” before being “taken to Nigeria to fund their oil business.” The brothers were declared fugitives by an Indian court almost four years ago.

The brothers deny cheating their banks and want to reach a financial settlement with creditors, according to filings they submitted to India’s Supreme Court.

Congo’s Inga agency did not respond to questions about the allegations against Natural Oilfield’s founders.

(By Michael J. Kavanagh and William Clowes)

First Quantum seeks to speed up Peru projects after Panama debacle

Reuters | May 22, 2024 | 

La Granja is located at high altitude in Cajamarca, a known mining jurisdiction in northern Peru. Credit: First Quantum Minerals

Canadian miner First Quantum Minerals, which lost the right to operate its copper mine in Panama last year following protests by environmental groups and a court ruling deeming its contract void, is seeking to speed its copper projects in Peru, a company executive said on Wednesday.


One of the three largest global copper producers, First Quantum in Peru controls the La Granja project, worth at least $2.5 billion, and the $1.86 billion Haquira project.

“These are projects that need to be accelerated,” said the mining company’s project development director, Steven Lewis, during a speech at a mining forum in Lima.

La Granja, where fellow miner Rio Tinto is a minority partner, is a project with a 40-year lifespan and forecasted output of 500,000 metric tons per year, according to government data. First Quantum’s Lewis said it has one of the largest undeveloped copper deposits in the world.

Meanwhile, the Haquira project, fully owned by First Quantum in the Apurimac region, is in the “pre-feasibility” stage. It could reach an annual output of 200,000 tons once at full capacity.

“We are very busy building more positive relationships with the communities (in Haquira) to allow it to come to light,” said Lewis, who did not offer a time frame for the construction of both mines in the South American country.

The company shifted focus toward Peru after Panama’s government decided last year to annul First Quantum’s contract to operate the Cobre Panama mine there, which accounted for about 40% of First Quantum’s revenue last year.

“We are now working with Panama’s government to ensure the environmental stability (of the project), the integrity of the copper assets, and, most importantly, the safety of our employees,” Lewis said.

Panama’s outgoing government of President Laurentino Cortizo ordered the closure of the mine, which is currently in maintenance mode while the formal closure process starts.

The incoming administration of President-elect Jose Raul Mulino, who is set to take office on July 1, will be tasked with setting guidelines for the process.

(By Marco Aquino; Editing by David Gregorio)

Read More: Panama president-elect rules out First Quantum talks until arbitration dropped

Copper frenzy draws mining giants to Argentina after Milei’s reforms

Bloomberg News | May 22, 2024 |

Javier Milei. Credit: Vox España | Wikimedia Commons

Global mining heavyweights including Lundin Mining Corp., Glencore Plc and First Quantum Minerals Ltd. are piling into Argentina as a new government intent on luring foreign investment propels the companies closer than ever to opening up vast copper deposits in the red-hued Andes.


It’s part of a colossal wave of spending needed worldwide to prevent a supply crunch for the metal, a critical component of the electrification push to slow climate change.

Argentina stands to get a good share of that money if President Javier Milei can convince companies based in Toronto, Melbourne and London that their projects are safe from the country’s notoriously volatile politics and rules for doing business — and if those companies can convince Argentines that the economic benefits outweigh the environmental risks.

As it stands, Argentina produces next to no copper despite sharing geology with its neighbor Chile, the world’s top exporter.

But should just six of the two-dozen-or-so copper projects being contemplated in Argentina come to pass, the nation could be a major supplier by 2035, churning out more than 1 million metric tons a year. Annual exports could top $8 billion, according to local mining group Caem.

“With the change of government, I think Argentina will now become a huge rival to Chile,” said Marcelo Awad, who was the chief executive of Antofagasta Plc from 2004 to 2012 when the Chilean miner tried and failed to start operations in Argentina. “The pro-business policies clearly make it a big competitor for attracting capital flows to copper projects.”

Milei, a libertarian in his first year in office, is trying to flip the fortunes of a country that’s on course for its sixth recession in a decade by curtailing government influence and freeing business from a slew of controls to — in theory, at least — tee up private-led growth. Former President Mauricio Macri tried something similar from 2015 to 2019, but the efforts didn’t make much progress and he was swiftly voted out.

To help avoid a repeat scenario, Milei needs to generate a surge in economic activity. Mining, one of just a handful of sectors with the muscle to stimulate business up and down Argentina, provides an obvious opportunity.

That’s why Milei has made a sweeping package of tax, currency and customs benefits for big-time investors — known locally by its Spanish acronym, RIGI — a hallmark of his proposed reforms. They’re being debated by lawmakers.

“The RIGI will be a jumper cable for infrastructure projects,” said Michael Meding, the general manager of Los Azules, a copper site run by Canada’s McEwen Copper Inc. Company officials estimate it will take $2.5 billion to build the mine, with construction slated to start midway through Milei’s four-year term if it can win the needed permits.


Prices of copper, a wiring metal, have surged in recent months, driven in part by concerns that demand from clean power, military equipment and data centers will outstrip supply. Miners need to spend about $130 billion over the next decade to avoid a projected annual shortfall in 2034 of some 7.7 million tons, according to the CRU Group, a research firm focused on mining and commodities.

While there’s plenty of copper still in the ground, deposits are getting pricier and trickier to develop at a time of heightened scrutiny of social and environmental issues. In Argentina, those issues have been a bigger hurdle than elsewhere — but the record prices and Milei’s pivot to a friendlier business climate are suddenly making it more feasible to unearth the nation’s resources.

Argentina has already had success with lithium, a mineral that’s key to making batteries for electric cars. Copper projects, though, tend to be bigger, more expensive and more destructive. And Argentina is a particularly precarious destination for prospectors since it is largely focused on farming and oil, not metals like regional peers Chile and Peru.

A scene last month offered a peek into this dilemma. In the mountain village of Calingasta, in San Juan province, Meding and other officials from McEwen Copper were pitching investors about their plans to dig the Los Azules pit, measuring 2.3 miles long and more than half as wide, just up the road in a pristine stretch of the Andes.

Company founder Rob McEwen, seated in the audience, didn’t like the rosy picture he was hearing from his underlings about the impact the mine would have on wetlands, oases at 12,000 feet called vegas in Spanish. They were suggesting that water could be rerouted to recreate the marshes elsewhere.

“Those vegas are disappearing,” McEwen, 74, interjected from across the room, taking the men aback. “They’re gone forever. Don’t try to coat it, as people will see through it.”

In addition to securing environmental permits, miners operating in remote corners of the developing world like Calingasta must win “social licenses” from communities and other groups. It’s a difficult task in a place like Argentina that hasn’t fully embraced the metals industry, but McEwen says it’s vital to avoid protests and disruptions down the line.

San Juan, a relatively poor province with an economy based on agriculture and solar power, has been opening its arms to miners in a way that others — unwilling to compromise on ecological issues — haven’t.

Beyond the wetlands, glaciers are another concern. A federal inventory lists 16,000 sites to protect in the Argentine Andes, many in San Juan. Glencore has tried to get one — an ice-rich rock glacier — struck off the list so it can proceed with its El Pachon copper project.

Earthquakes are another major threat: A big quake might damage a mine and release chemicals into river systems.

Already, leaders of a small anti-mining group from Jachal, a San Juan county close to Calingasta, have been warning people not to give their blessing to Los Azules. At community meetings hosted by McEwen Copper, they’ve highlighted the negative impacts of nearby gold mine Veladero, which suffered three cyanide leaks from 2015 to 2017, leading a federal judge to recommend it be shuttered. After making improvements, today Veladero operates normally.

“We went to Calingasta with our own truth — to tell them that because of the sheer scale of mines it’s impossible for them not to pollute,” said Faustino Esquivel, one of the leaders of the non-governmental organization called Don’t Touch Jachal.

Bill Shaver, chief operating officer of McEwen Copper’s parent company, said he’s heard similar arguments before during a career spanning 50 years. His strategy is to bring in outside specialists who are comfortable with the project, say professors from the provincial university, and get them to meet with locals to address their concerns.

“You have to work with the communities,” Shaver said. “Otherwise these NGOs could come in and you get in a p—ing match that lasts years.”

San Juan — which has the power to issue environmental permits for building mines, rather than federal authorities — wants the windfall of investment, jobs and tax revenue that copper can bring. Yet officials are only too aware that they must tread carefully when it comes to social and environmental considerations.

“Mining in San Juan is state policy,” Governor Marcelo Orrego said in an interview. “But we also know that we can’t make a mistake on environmental issues.”

There are risks at the national level, too: Milei’s proposed RIGI tax benefits for miners — part of his broader deregulation push — come after a similarly sweet deal recently fueled protests and the downfall of a huge copper pit in Panama.

For now, McEwen, like most wealthy investors, is fawning over the policies.

“Argentina has been a case of ‘nice deposit but wrong country,’” he said. “Milei is Prince Charming who’s given it the wake-up kiss.”

(By Jonathan Gilbert and James Attwood)

Argentina Is Positioning Itself as a Mining Giant

Irina Slav - May 21, 2024

• 
  
• Argentina has large reserves of copper and lithium, key minerals for electric vehicles and renewable energy.
• 
  
• The government is removing regulations and attracting investment to develop these resources.
• 
  
• Argentina could become a major supplier of transition metals if demand from the energy transition continues to grow.
• 
  

In commodity circles, Argentina is known for its agricultural produce and for the Vaca Muerta shale play. But the country has recently started drawing attention to other kinds of natural resources: copper and lithium. According to some, it has a bright future as one of the world’s biggest transition minerals suppliers.

Two weeks ago, a local investment company, Integra Capital, struck a deal with Glencore to acquire its stake in a company called Volcan Compania Minera. According to Bloomberg, this is the second Glencore project the company has acquired in recent years. It is part of a strategy: building a metals and minerals portfolio in Argentina in anticipation of a mining boom driven by transition efforts.

Integra Capital is an investment vehicle owned by Jose Luis Manzano, who told Bloomberg in an interview, “We believe we are positioning ourselves in things that will be necessary for the next 50 to 100 years.”

In that, the Argentinian commodity investor echoes a sentiment that has become rather popular in investment circles. Copper and lithium are the focus of much forecasting attention as key transition minerals, alongside elements such as nickel and cobalt, used in batteries for EVs and storage.

Argentina’s political circles have also been paying attention to the forecasts. Last year, Reuters reported that Argentina’s government had plans for copper mining projects that could produce 793,000 tons of the metal annually by the end of the decade. That would be quite something given that there is no copper production in Argentina at the moment—it would turn the country into one of the ten biggest copper producers in the world.

There are several copper projects in various, though early, development stages as miners stake their claims in the resource-rich country. Manzano’s buying spree now suggests there may well be something to it—as long as the forecasts materialize.

There are seven copper projects in progress in Argentina at the moment. According to BNAmericas, these could generate some $5 billion annually for the country’s budget once they start producing. The total output of the seven is seen at 1.2 million tons annually, per that report, which is considerably more than the estimate reported by Reuters. In total, Argentina’s copper reserves are estimated to be 44 million tons.

Yet copper is not the country’s only transition metal available in abundance. Argentina is also part of the so-called Lithium Triangle and is home to a third of the global reserves of the battery metal. Along with the other two “points” of the Triangle—Chile and Bolivia—Argentina accounts for as much as 70% of the world’s lithium, per Mining.com.

There are already a slew of companies developing Argentina’s lithium resources, with production last year hitting 9,600 tonnes. This appears set to grow in response to forecasts for growing demand, even though lately, these forecasts have become much less certain as demand for EVs weakens in many key markets. Even so, more lithium hopefuls are going to Argentina. Earlier this month, Reuters reported that an Emirati company planned to start producing battery-grade lithium at a rate of 5,000 tons in the country from 2027, raising this to 10,000 tons by the next year.

All these companies betting on Argentina’s mineral wealth got lucky last year when President Javier Milei came into power. The outspoken libertarian has eagerly promoted the country’s mineral wealth, and his policies should make it easier for miners to do business in the country by removing regulatory hurdles and establishing an investment-friendly environment. As long as demand lives up to forecast, Argentina could indeed become a major supplier for the energy transition.

By Irina Slav for Oilprice.com

Solaris ends plan to sell stake to Zijin Mining, cites government rules

Reuters | May 21, 2024 | 

Solaris Resources’ Warintza copper-gold project in Ecuador. Credit: Solaris Resources

Solaris Resources has scrapped plans to sell a minority stake to China’s Zijin Mining Group because it feared the deal was unlikely to meet Canada’s stringent foreign- investment standards in a timely manner, the Canadian company said on Tuesday.


In January, Solaris announced plans to sell a 15% stake in the company to state-owned Zijin for C$130 million ($95 million)to help develop its Warintza copper project in Ecuador. But the deal needed approval under the Investment Canada Act, which was revamped in late 2022 to bring additional scrutiny on foreign investments from state-owned enterprises in the critical minerals sector.

“That this transaction cannot be completed in a reasonable time frame signals that Canada’s critical minerals policy is counterproductive in relation to foreign assets,” said Solaris Resources’ CEO, Daniel Earle, in a statement.

The company’s share price had underperformed compared with its peers due to the overhang of Canadian regulatory uncertainty “in an environment of heightened domestic political sensitivity,” Earle added.

The stock was down 0.4% on the Toronto Stock Exchange late on Tuesday morning, compared with 0.3% rise in the benchmark Canadian share index.

In a research note, RBC Capital Markets said the scrapping of the deal removes regulatory uncertainty and the dilutive value of the transaction.

Canada’s government has taken a tough stance specifically on investments from China in critical minerals such as copper, graphite and lithium. Earlier this year, Canada asked SRG Mining, a graphite miner, to call off a planned investment from China’s Carbon One New Energy Group.

($1 = 1.3641 Canadian dollars)

(By Divya Rajagopal; Editing by Matthew Lewis)

 

Maritime Leaders Celebrate U.S. Shipping Heritage on National Maritime Day

National Maritime Day is an opportunity to celebrate America's maritime heritage, especially the contribution of its brave mariners to victory in World War II. At peak, American shipbuilders and mariners delivered and crewed 66 Liberty Ships every month,

PUBLISHED MAY 22, 2024 12:47 PM BY THE MARITIME EXECUTIVE

 

On Wednesday, the American maritime industry celebrated National Maritime Day, the annual opportunity to recognize maritime's contributions to the economy and to national defense. American mariners, shipbuilders and operators have kept the nation safe and prosperous "in peace and war" since the days of the Founding Fathers, and that tradition continues. 

Congress declared National Maritime Day in 1933, and selected May 22 to commemorate the voyage of the Savannah from the United States to the UK. It was the first steamship crossing of the Atlantic, and remains a symbol of American maritime ingenuity. 

In Washington, the White House issued a proclamation of recognition, and the Maritime Administration held a ceremony to celebrate American maritime's traditions and discuss its future. First on the agenda, organizers welcomed the attendance of a surviving member of the U.S. merchant marine of World War II. During the war, 243,000 American mariners braved Nazi U-boat attacks to deliver arms and supplies for the fight for freedom. More than 9,500 perished – four percent, a higher fatality rate than that of any U.S. armed service branch during the war. "Truly, they are the greatest generation," said Seafarers International Union President David W. Heindel. 

The focus of this year's National Maritime Day is on "safety first," starting with thorough training and continuing through lifelong safe work practices. Heindel put a new emphasis on work-life balance as an essential component of safety and employee retention, including "proper rest, sensible schedules, and time on the beach" - challenges that are familiar to all seafarers. Adequate work-life balance "makes mariners more efficient, more productive, and more likely to stick around in the industry . . . certainly for the next generation," he said. 

Gen. Jacqueline Van Ovost (USAF), head of U.S. Transportation Command, emphasized the need to recapitalize and properly man America's sealift fleet, "because we will need every one of these ships in a global conflict." Sealift is her command's highest-capacity asset by tonnage, but MARAD and TRANSCOM both warn that it will be difficult to "surge" the government-owned fleet in time of need - both because of the material condition of the ships, and because of the limited availability of professional mariners. 

"The linchpin is the American merchant mariner population that can man the RRF and meet our commercial demands," said Van Ovost. "Without these vital teammates, we cannot deliver at a time and place of our nation's choosing." 

Secretary of the Navy Carlos Del Toro noted the vital importance of civilian mariner-crewed sealift in supporting the national interest in the Red Sea, the Pacific and in Ukraine. At the strategic level, he noted the rise of a competing full-spectrum maritime power, and the need to revive America's comprehensive commercial and naval maritime strength. He said that thanks to multi-agency efforts to raise awareness of the problem, the White House is paying high-level attention to rebuilding American shipbuilding and U.S.-flag shipping capacity. "America has been a leading shipping and shipbuilding nation before, and as Secretary of the Navy, I am determined to work alongside you to restore this vital strategic industry," he said.  

Efforts to rebuild the national maritime workforce are under way in industry as well. Huntington Ingalls Industries has just released a new national hiring campaign, aimed at raising public awareness of maritime careers and the critical defense contributions of shipbuilders.

"I view this job as my way of serving our country," said Stan Brazell, manager of quality receipt and inspection at Ingalls Shipbuilding. "While I may not be wearing combat boots, I do wear work boots, and those boots have allowed me to contribute to building freedom."

The Port of Baltimore also held a National Maritime Day celebration at the Canton Marine Terminal, home of the Liberty Ship John W. Brown and the nuclear-powered NS Savannah. The port had much to celebrate this year: with the removal of the damaged boxship Dali this week, its economically-vital maritime businesses have regained access to seaborne trade for the first time since March.