Thursday, December 19, 2024

China’s coal output hits record, fueling oversupply concerns

Bloomberg News | December 16, 2024 | 

A coal mine near Hailar, Inner Mongolia. (Image by Herry Lawford, Flickr).

China’s coal production hit an all-time high last month, adding to concerns of an oversupply of the nation’s mainstay fuel.


China mined 428 million tons of raw coal above ground in November, up 1.8% from a year earlier, according to data released by the National Bureau of Statistics on Monday. Its domestic output output is poised to rise for the eighth straight year in 2024.




The record-breaking month comes on the back of Beijing’s energy-security push. The government reopened shuttered mines and accelerated approvals to new mines after Russia’s invasion of Ukraine in 2022 boosted the cost of fuel imports.

The surge in domestic supply is colliding with weak coal demand as China’s economic recovery falters. Coal prices in the Asian country fell to the lowest level in over a year on Monday, while the nation’s power generation growth slowed last month.
Barrick Gold seeks arbitration over Mali mines dispute

Staff Writer | December 18, 2024 |

The Loulo-Gounkoto complex in Mali. Credit: Barrick Gold

Barrick Gold (NYSE:GOLD; TSX:ABX) announced on Wednesday that it had submitted a request for arbitration to the International Centre for the Settlement of Investment Disputes (ICSID) to resolve disagreements with Mali.


On Monday, the world’s second-largest gold miner had said it would suspend operations in Mali if gold shipments remain blocked and disputes over a new mining code persist.

The Canadian mining giant has been locked in a months-long dispute with the Malian government over dividing economic benefits from the Loulo-Gounkoto complex, which produced nearly 700,000 ounces of gold last year.

In a statement on Wednesday, Barrick said the request for arbitration reflects its commitment to “adhering to established processes for resolving disputes in a fair and transparent manner.”

“Over its nearly three decades of operating in Mali, Barrick has consistently demonstrated its long-term commitment to the country and its people. While this process is ongoing, Barrick remains open to continued dialogue with the government to resolve these issues amicably and ensure the long-term success of the Loulo-Gounkoto complex,” said Mark Bristow, Barrick’s CEO.
Staff arrests and warrant for Bristow

Mali, Africa’s second-largest gold producer, has been under military rule since 2021, following the country’s third coup in less than ten years. The junta has prioritized restructuring the mining industry, rolling out a new mining code and conducting audits of operations. These changes have led to tense negotiations with foreign operators like Barrick, particularly over tax disputes and the terms of new agreements.

Arrests of staff from Australia’s Resolute Mining (ASX: RSG) and Barrick by military authorities have gathered pace since September. The situation escalated further last week when Malian authorities issued an arrest warrant for Barrick CEO Mark Bristow, citing tax disputes.

Barrick’s Loulo-Gounkoto complex, developed during Bristow’s tenure as CEO of Randgold before its acquisition by Barrick in 2018, is a cornerstone of Mali’s economy. Over the past 29 years, the company has invested more than $10 billion in the country, contributing between 5% and 10% of Mali’s GDP annually. Last year alone, Barrick injected over $1 billion into the local economy.

The mine complex is also one of Mali’s largest taxpayers and employers, with 97% of its 8,000-strong workforce being Malian nationals. According to Barrick, more than 70% of the economic benefits from the complex have gone directly to the Malian state.

Barrick shares fell as much as 1.4% as of 9:39 a.m. in New York. The company has a market capitalization of $28.25 billion.
Volkswagen buys 9.9% of Patriot Battery Metals for $48 million

Cecilia Jamasmie | December 18, 2024 | 

Lithium sample from Shaakichiuwaanaan project in Quebec, Canada. (Image courtesy of Patriot Battery Metals.)

German automaker Volkswagen (ETR: VOW3) announced on Wednesday its acquisition of a 9.9% stake in Canadian lithium company Patriot Battery Metals (TSX: PMET) (ASX: PMT) for $48 million.


This marks the first time Volkswagen and its battery subsidiary, PowerCo, have directly invested in the lithium supply chain, as the company aims to secure raw material supplies from North America.

The agreement includes a binding commitment for Volkswagen to receive 100,000 tonnes of spodumene concentrate annually for 10 years, starting when Patriot’s Shaakichiuwaanaan lithium project in Quebec begins production.

The Vancouver-based company also signed a memorandum of understanding with PowerCo to explore joint development opportunities for the Quebec project, previously known as Corvette.

The Shaakichiuwaanaan project, currently under development, will supply VW’s battery company PowerCo in Europe and North America

Spodumene concentrate, a lithium-rich mineral, serves as a raw material for lithium-ion batteries. PowerCo plans to utilize this supply for producing battery cells in Europe and North America. Additionally, the lithium will be used in PowerCo’s cell factory currently under construction in St. Thomas, Canada, which is projected to achieve an annual production capacity of 90 GWh at full scale.

“This investment represents a milestone in our journey toward a fully electric future,” said Thomas Schmall, Volkswagen Group board member for Technology, in a statement. “By collaborating with Patriot Battery Metals, we are not only securing key raw materials for cutting-edge, sustainable battery technology but also reinforcing our commitment to North America.”

Ken Brinsden, Patriot’s president, chief executive and managing director, described Volkswagen’s investment as a “pivotal milestone” for the company. “We are bringing in a long-term strategic partner who is already a major player in the European and North American battery supply chain,” Brinsden said in a separate statement.
Largest resource in the Americas

Patriot Battery Metals is targeting an initial production capacity of 400,000 tonnes of spodumene concentrate annually. According to a preliminary economic assessment (PEA) published in August, the company plans to develop its flagship Quebec project in phases, employing both open-pit and underground mining methods.

This phased approach aims to prioritize access to high-grade zones while minimizing the project’s environmental footprint.

The Shaakichiuwaanaan project is the largest known lithium pegmatite mineral resource in the Americas. Its vast spodumene crystals enhance processing efficiency and recovery rates, according to Patriot.

The company expects to make a final investment decision by 2027, paving the way for construction through 2028 and initial production in early 2029.

 

Navantia Set to Bail Out Harland & Wolff in Deal with UK Government

Harland & Wolff shipyard
Reports indicate Navantia will acquire the shipyards in a deal with the UK government (H&W)

Published Dec 18, 2024 1:12 PM by The Maritime Executive

 

 

The famed UK shipbuilder Harland & Wolff is set to be saved for a second time from bankruptcy as reports indicate Spain’s Navantia and the UK Government have reached terms on a bailout for the shipbuilder’s parent group. Reports from the British media including The Financial Times and Sky News said the announcement could come as early as tomorrow, Thursday, December 19, and would certainly happen within the week.

The reports indicate that the Spanish shipbuilding group which had partnered with Harland & Wolff to win a lucrative UK government contract will now acquire the parent group which consists of four UK shipyards. Navantia is set to pay £70 million ($89 million) and provide job guarantees for the approximately 1,000 employees at the four shipyards.

Navantia is reported to have in turn won critical concessions from the UK government on the contract to build three Fleet Solid Support ships for the Royal Fleet Auxiliary (RFA). Navantia and Harland & Wolff partnered along with UK design firm BMT and in 2022 were named the preferred bidder for the contract, which when finalized in 2023, was valued at £1.6 billion. Known as Team Resolute, they promised to invest around £100 million into UK shipyards, including £77 million of infrastructure at Harland & Wolff’s Belfast and Appledore shipyards, and a further £21 million in skills and technology transfer from Navantia UK.

The vessels were reported to be the first new constructions planned from the H&W shipyards since 2002. Navantia was set to build the vessels with final assembly for all three of the 216-meter (708-foot) long ships to be completed at Harland & Wolff’s Belfast yard and components from the Appledore yard.

The Belfast yard delivered barges built for the Thames and investments were being made in the infrastructure and training at the yard when the company ran into financial difficulties in 2024. The parent group sought UK government loan guarantees to refinance, but that deal was rejected shortly after the government of Prime Minister Keir Starmer came to office last summer. The parent company, Harland & Wolff Group, was seeking to refinance approximately $200 million in loans from U.S. private investment group Riverstone.

The parent group went into financial administration in September with Rothschilds seeking interest from potential acquirers for the assets. Navantia stepped in to save the UK contract by financing the shipyards which continued to operate while negotiating terms of the bailout with the UK government. The individual shipyards were not part of the bankruptcy proceedings.

It will be the second time that Harland & Wolff is saved from administration. In 2019, a London-based energy company Infrastrata acquired the Belfast shipyard for £6 million and later transformed into the Harland & Wolff Group. It acquired the dormant Appledore shipyard and two small facilities, Arnish and Methil, which were being used as fabricators. Speculation centered on the sale of the Belfast and Appledore yards but according to the reports Navantia will take over all four and guarantee the jobs for a period of time.

The Belfast shipyard dates to 1861 and was a builder of many famous ships including the ocean liner Titanic and her sisters and many passenger ships through the P&O Canberra in 1960. Recently, it has been operating as a repair yard.
 

 

NYK to Buy Carbon Credits From Direct Air Capture Plant

1PointFive's first DAC plant in Texas (NYK / 1PointFive)
1PointFive's first DAC plant in Texas (NYK / 1PointFive)

Published Dec 18, 2024 3:23 PM by The Maritime Executive

 

 

Japanese shipowner NYK has reached a deal with Eneos to buy conventional bunker fuel with attached carbon credits, or offsets. This will reduce NYK's net emissions in years to come. 

Under the agreement, Eneos will purchase carbon credits from 1PointFive, an initiative of Occidental Petroleum and BlackRock. Each credit represents an equivalent amount of carbon that 1PointFive removes from the atmosphere using direct air capture (DAC) technology and stores underground. Eneos will then sell the bunker fuel and the attached carbon credits to NYK.  

1PointFive is building its first direct air capture plant in Ector County, Texas. It is designed to recover up to 500,000 tonnes of CO2 from the atmosphere every year, and the company says that future plant designs will be able to capture twice as much. The captured gas will be pumped into stable, secure underground geologic formations for long-term storage. Prominent clients include Airbus, Shopify and airline ANA, and the startup expects lots of demand in the decades to come. 

The company's first DAC plant will begin operating in 2025, and the Eneos fuel delivery contract begins in 2028. 

The carbon credits from Eneos are part of NYK's plan to address the last hard-to-abate elements of its carbon footprint. It will focus first on maximum energy efficiency, then on transitioning to new green fuels like ammonia and methanol (and LNG). For the remaining emissions that cannot be eliminated, NYK will buy carbon offsets to achieve net-zero. 

It is the two companies' second major agreement this year. In July, NYK absorbed about 80 percent of Eneos' in-house shipping fleet, including 18 LPG carriers, 19 chemical and product tankers, 12 dry bulk carriers and a ship management company in Singapore. Eneos retained its crude oil tankers. 

 

Norway Awards $100 Million to Advance Ammonia, Hydrogen, and Electric Ships

Green Ammonia bunker vessel
Green Ammonia, a bunker and distribution vessel for ammonia, was among those receiving awards (Greig Edge)

Published Dec 18, 2024 6:07 PM by The Maritime Executive

 


The Norwegian government through its Enova SF project designed to accelerate environmental-friendly technologies awarded a total of approximately $108 million in funding to 14 projects for ammonia, hydrogen, and battery-powered ships and the supporting technologies. The awards were part of the latest round in ongoing programs conducted by Enova designed to ensure the shipping industry is focusing on and accelerating the shift to future fuels.

The government strongly supports these programs. Enova highlights its funding has nearly tripled from $290 million to over $800 million annually since Jonas Gahr Støre became Prime Minister in October 2021. In 2024, Enova supported a total of 24 vessels that will use hydrogen (11 vessels) or ammonia (13 vessels) as their fuel. Further, the organization reports it will run its next round in March 2025 and plans calls for two rounds each in 2025 and 2026 focusing on ammonia and hydrogen programs.

There was a strong response to the just completed round with Enova reporting it received a total of 31 applications split between the calls for hydrogen and ammonia. Nine applications were granted for those programs and a further five for electric vessels.

Nearly $83 million was awarded for ammonia and hydrogen projects to companies. Among the ammonia projects were Eidesvik Shipping (supply vessel), Norbjørn (cargo vessel), DOF Group (supply vessel), Aurora Offshore (supply vessel) and Grieg Ammonia (bunkering and distribution vessel). Cruise Service AS was awarded nearly $15 million for two hydrogen-powered passenger vessels.

MS Green Ammonia under development by Greig Edge was awarded approximately $7 million of the total of $68 million awarded to ammonia projects. Greig highlights it continues to make progress on the project which started in 2021 and would be able to carry up to 5,000 tons of ammonia per trip acting as both a distribution and bunkering vessel.  It is designed to operate either ship-to-ship or ship-to-terminal and would be powered by ammonia for up to 85 percent of the ship’s energy needs. It will also use batteries and shore power along with wind-assisted propulsion. Green ammonia is projected for delivery in 2028.

Aurora Offshore said the more than $20 million it was awarded is a significant step towards the realization of the newbuilds. It is working to secure commercial commitments and support a newbuild project for ammonia-powered platform supply vessels.

Ennova highlights these projects are part of its goal to demonstrate hydrogen and ammonia as zero-emission solutions for the maritime industry. It is working to support establishing the first functioning value chains for hydrogen and ammonia in Norway. To that end, in November it also awarded support to five projects of hydrogen production. They said this will help to ensure hydrogen becomes available as a fuel along the Norwegian coast.

Norway is also supporting elect vessels awarded five projects a total of approximately $25 million in this round. Enova reports it received 29 applications for electric projects and issued awards to Salten Shipping, K Saetre Rederi, and Nidarø each for bulk shipping vessels. The Fjords also received an award for a passenger vessel and Nova Sea for a workboat. To support the development of electric charging facilities, Enova also awarded approximately $3 million to Plug for stations in Austvika and Tomma.

In addition to the next round for ammonia and hydrogen, Enova also plans another round for electric vessels. It will have a deadline of March 2025 and the organization says it will be working with all the applicants from this round to encourage them to continue to submit in future rounds.

 

Report: IRGC Now Handles Half of Iran's Oil Exports

IRGC oil sales underpin the financing for the Houthi militant group's terrorist campaign against shipping in the Red Sea (Houthi Military Media)
IRGC oil sales underpin the financing for the Houthi militant group's terrorist campaign against shipping in the Red Sea (Houthi Military Media)

Published Dec 18, 2024 6:55 PM by The Maritime Executive

 

Iran's oil exports are intimately linked to the Islamic Revolutionary Guard Corps' military training and assistance programs in the Middle East, including the weapons transfers that enable Houthi attacks on Red Sea shipping. The IRGC's share of Iran's oil export volume now exceeds 50 percent, according to Reuters - even as the isolated nation's oil sales have declined.

Under Western sanctions, Tehran is highly dependent on oil exports to keep government functions running. Iran's oil sector is state-run, and it was once a vertically-integrated enterprise under the National Iranian Oil Company (NIOC), which handled everything from exploration to production, marketing, terminal operations and tanker transport. When the Obama administration imposed sanctions on the Iranian economy in 2011-12, ordinary commercial channels for Iran's oil shipments began to shut down, and the IRGC stepped in to provide covert means of marketing and transport. “The IRGC guys were much, much better at smuggling," explained Richard Nephew, a researcher and former deputy special envoy for Iran, speaking to Reuters. 

That pattern intensified when the Trump administration reimposed sanctions on Iran in 2018, and the IRGC has come to dominate Iran's oil export trade, underwriting the organization's influence at home and abroad. Security sources told Reuters that the IRGC sells its oil at an extra discount because of the risk of doing business with a U.S.-listed terrorist organization. China's teapot refiners buy the overwhelming majority of this black-market oil, leveraging its low cost to improve their narrow margins.

Iran's oil sales to China have slackened in recent months. According to TankerTrackers.com, which closely monitors tanker movements to determine real trade volumes, Iranian exports dropped to 1.2 million barrels per day in the first half of December, a decline of 500,000 bpd compared to the same period in the last three months. Iran's floating oil storage volume - unsold inventory stored on laden tankers, primarily near Singapore - has risen from 36 million barrels to 48 million barrels since September, according to Vortexa and Iran International. 

The cuts in Iranian sales volume coincide with a contraction in the teapot refinery sector. China's oil demand has been sluggish, imposing economic stress on independent refiners. Refinery output fell for six months through October, and two of Shandong's small refineries folded in September. 

U.S. sanctions on the Iranian "dark fleet" may also have helped reduce sales. The U.S. Treasury blacklisted 45 tankers with ties to Iranian oil earlier this month - though countless other vessels remain involved in the trade. 

 

U.S. Conducts Airstrike on Houthis as Truman Strike Group Arrives in Region

Harry S Truman aircraft carrier
Truman Strike Group arrived in the region over the weekend (USN)

Published Dec 16, 2024 8:01 PM by The Maritime Executive

 


U.S. Central Command confirmed tonight, December 17, new attacks on Houthi command and control facilities just hours after reports of Houthi missiles aimed at Israel. Earlier, Central Command also confirmed the arrival of the carrier Harry S. Turman strike force in the region after transiting from the Mediterranean.

“CENTCOM forces conducted a precision airstrike against a key command and control facility operated by Iran-backed Houthis within Houthi-controlled territory in Sana’a, Yemen,” they reported in a brief update. No additional details were provided on the strike.

The strike came just three days after the Truman Carrier Strike Group entered the U.S. Central Command’s area of responsibility for the first time since March 2020. The group is taking up the role after the Eisenhower Strike Group started the mission in late 2023 in response to the Houthi’s attacks. 

The Eisenhower was on duty for approximately nine months along with the guided-missile destroyers USS Laboon and USS Carney which were in the thick of the fight. Returning to the U.S. in July 2024, the U.S. Navy reported the group had launched 155 standard missiles and 135 Tomahawk missiles as well as aircraft in the group expended nearly 60 air-to-air missiles and released 420 air-to-surface weapons. The USS Abraham Lincoln and USS Theodore Roosevelt also did shorter tours in the region.

The Truman carrier strike group is reported to include the Ticonderoga-class guided-missile cruiser USS Gettysburg, and two Arleigh Burke-class guided-missile destroyers, USS Stout and USS Jason Dunham.

 

Hary S Truman transeting the Suez Canal on December 15 (USN)

 

Centcom reports the target struck tonight was “a hub for coordinating Houthi operations, such as attacks against U.S. Navy warships and merchant vessels in the Southern Red Sea and Gulf of Aden.”

The Houthis in recent weeks have mostly focused their attacks on Israel, although the Pentagon did confirm that U.S. destroyers had been targeted twice in December as they were escorting civilian supply ships in the region. The Houthis today briefly claimed an attack on Ben Gurion Airport but later said they had launched a hypersonic missile into Haifa and targeted a military site in Ashkelon.

The Jerusalem Post reports sirens were sounded in Tel Aviv and that flights in and out of Ben Gurion were briefly stopped. The Israeli Defense Force is saying the attacks were intercepted and did not enter Israel but there are reports of possible debris falling on a building in Jerusalem. Last week, however, a Houthi drone did enter Israel hitting a residential building in Yavne, a central town north of Ashdod. There were no reports of injuries. 

The Jerusalem Post says the Houthis have fired six ballistic missiles and five drones at Israel since November.

Centcom said the Harry S. Truman Carrier Strike Group is ready, if called upon, to execute the full spectrum of carrier operations including the defense of U.S. and partner forces.
 

 

Somali Pirates Up Demand to $10 Million for Release of Chinese Fishing Boat

Hijacked Chinese fishing vessel
Pirates in 2008 seized another Chinese fishing vessel (USN photo from 2008)

Published Dec 18, 2024 2:11 PM by The Maritime Executive

 

 

Negotiations are reportedly underway between a local representative for a Chinese fishing vessel and tribal elders representing the pirates that seized a Chinese-owned fishing boat off the coast of Somalia. Associated Press is confirming local reports that said the demand is set at $10 million for the 18 crewmembers aboard the unnamed vessel after lower offers from the owner’s representatives.

A local representative of the police in the Puntland region of Somalia told the media 10 days ago that they believed the vessel was seized in late November. They said the pirates had continued to move the vessel between various locations to avoid detection by the coast guard.

Unconfirmed reports indicate it might be an inside job with the vessel reported to have two locals aboard as security guards. The ship, which is reported to be registered in Taiwan, is said to have had a fishing license from the local government, but the license might have expired. The same reports said the security guards turned on the crew siding with the pirates.

The EU operation Atalanta reported on December 5 that it had been informed and investigated. The incident was labeled an alleged hijacking and later an armed robbery because the vessel was remaining within Somali coastal waters according to Atalanta. Its forces confirmed the presence of armed individuals with AK-47s aboard the fishing boat but said no crew had been harmed. Atalanta was monitoring the vessel but since it was in Somalia’s territorial waters it was being handled by the local forces.

Unconfirmed media reports said the initial ransom demand was for $5 million. The same stories said an initial offer of $300,000 was made and later raised to $1 million. The pirates are said to have increased their demand from $5 million to $10 million during the negotiations.

Atalanta reports that it has documented reports of 20 attacks in 2024 including ones that were not successful in seizing vessels. It however notes that there is an unknown number of unreported/unconfirmed incidents involving dhows and smaller vessels. Atalanta’s forces from the EU nations patrol the regional waters and have a proactive program of visiting the smaller vessels to encourage safety practices.

 CAPITALI$T EFFICIENCY

Vineyard Resumes Blade Installation Five Months After Fracture

Vineyard Wind blade installation
Vineyard Wind resumed blade installation after a five-month suspension (Avangrid image of earleir installations)

Published Dec 18, 2024 7:48 PM by The Maritime Executive

 

 

The Vineyard Wind offshore wind farm being developed by Avangrid and Copenhagen Infrastructure Partners resumed blade installation last weekend five months after it was forced to suspend operations due to one blade fracturing. The project which is working with GE Vernova received permission from federal regulators for the work to proceed on a “case-by-case” basis and notified Nantucket’s elected official of the plans to resume blade installation.

A spokesperson for the wind farm developer confirmed to the local media in Massachusetts that it had received initial permission from the Bureau of Safety and Environmental Enforcement which is responsible for oversight of the construction and operation of offshore wind farms. Previously, the regulators were only permitting cabling work, and then in late October permission was received to resume installing the additional monopile foundations with the DEME’s vessel Orion expected to resume work on or about October 28.

The initial clear was given for three blades after they completed intensive inspections which were also verified by an independent certified verification agent. Each turbine has three 351-foot-long blades. BSEE indicated to the local media around Martha’s Vineyard that it was requiring stringent safety and operation conditions before the work could proceed. The wind farm is located about 14 miles south of the Vineyard.

The notification to Nantucket was reported on December 13. The following day, Saturday, reports said offshore work started for the installation of the next three blades.

The fracture was initially reported on July 13 forcing the wind farm and installation efforts to be suspended. Parts of the blade landed on the tower while other debris landed in the ocean and began washing up on area beaches. Additional parts of the blade failed creating widespread concern as more fiberglass and other composite material washed ashore. 

GE Vernova latest said the failure was due to a bonding problem in the manufacturing process which should have been detected by quality control. It was forced to launch a survey and review the quality surveys for all the blades while saying it believed the problem was limited in scope.

Shortly before the failure, Vineyard Wind had reported the wind farm while still under construction had already become the largest operating offshore wind farm in the United States. As of early July, the report said 10 turbines had been commissioned with the wind farm sending 136 MW of energy onto the Massachusetts power grid. 

Status updates said 21 turbines in total were in place or preparing for commissioning out of a planned 62-turbine project. As of early July, a total of 47 foundations with transition pieces were reported to be in place. 

The company declined earlier this week to provide updates to the local media on the status of the construction. Further blade installations will proceed only after each one has completed the verification process.