Shale Firms Stick to Discipline Despite Trump’s Drilling Plans

By Tsvetana Paraskova - Jan 02, 2025

U.S. shale companies are prioritizing shareholder returns and financial stability over explosive production growth.

Technological advancements and operational efficiency have allowed producers to maintain robust output even with fewer active rigs.

Consolidation has concentrated Permian assets among larger public firms.


The U.S. shale patch is unlikely to follow President-elect Donald Trump’s campaign highlight “drill, baby, drill” as the industry is far more consolidated and disciplined than when Trump was first president at the end of the 2010s.

While welcoming a second Trump term, American oil and gas producers are expected to stick to their disciplined approach to capital expenditure and drilling operations.

Consolidation Keeps Drilling in Check

After the Permian saw several large mergers and acquisitions (M&A) waves during President Biden’s term in office, the start of the second Trump presidency comes at a time when many of the private producers have already sold their operations to the large publicly traded companies.

These public firms have realigned their priorities after the 2020 crash in demand and prices, and now prefer higher earnings and shareholder returns to high growth rates in production.

As more drilling locations in the Permian are now in the hands of large listed firms, investor demands for high returns trump the high growth rates of oil production.

The U.S. shale patch is drilling, but it is drilling because it wants to distribute more of the profits to shareholders. It has made huge progress in capital discipline and efficiency gains and is getting more bang for its buck. Priorities are now returns to investors and financial frames capable of withstanding oil price volatility.

As producers become bigger, they focus on shareholder returns and wouldn't be inclined to respond to every price spike with a major boost in drilling that ultimately floods the market with oil and depresses prices.

This relentless drilling for higher production has been the shale industry's modus operandi for a decade before Covid and the demand and market crash. Until 2020, many smaller producers sought to maximize output and price realizations whenever oil was heading higher.

But as the industry matured and balance sheets and market valuations strengthened after the record-high earnings of 2022, a wave of consolidation began in 2023. The big companies, which now control a much larger part of the U.S. shale patch, are looking to become bigger by adding premier assets of the takeover targets to their portfolios.

However, the key driver of the industry now is returning more to shareholders and preparing for inventory stacked up for years of production ahead, without the need to grow organically by investing too much cash flow into the drilling of new locations and wells.

Gone are the days of “drill, baby, drill” and producers “drilling themselves into oblivion,” as shale pioneer and tycoon Harold Hamm warned during Trump’s first term in office, say companies and analysts alike.

No More ‘Explosive Growth’

“We’re not going to have the explosive growth that we’ve seen,” Richard Dealy, who oversees the Permian business of ExxonMobil, told The Wall Street Journal last week.

This is not the first acknowledgment from the U.S. supermajor that “drill, baby, drill” is not on the minds of the top producers despite the imminent inauguration of a President who is openly and strongly supportive of America’s oil, gas, and coal sectors.

“We're not going to see anybody in 'drill, baby, drill' mode," ExxonMobil Upstream President Liam Mallon said at the end of November.

“A radical change (in production) is unlikely because the vast majority, if not everybody, is focused on the economics of what they're doing,” Mallon added.

The other U.S. supermajor, Chevron, announced last month that its 2025 capital expenditure (capex) would be lower than in 2024.

Chevron expects its upstream spending next year to be about $13 billion, of which roughly two-thirds will go to develop its U.S. portfolio.

“Permian Basin spend is lower than the 2024 budget and anticipated to be between $4.5 and $5.0 billion as production growth is reduced in favor of free cash flow,” Chevron said.

After years of perfecting operations and expertise in drilling, the public companies operating in the Permian have boosted productivity and efficiency and are doing more with less.

Despite a decline in active drilling rigs over the past two years, “increased rates of production from new completions are offsetting existing wells’ production declines and leading to higher crude oil and natural gas output,” the U.S. Energy Information Administration (EIA) says.

“These productivity increases indicate significant efficiency gains and technological advancements in the drilling and completion process.”

The Permian is headed for growth, albeit at lower rates compared to the recent past, according to Goldman Sachs.

Permian crude production growth is expected to have slowed to 6% in 2024 and is set to slow to 4% in 2026, analysts at Goldman Sachs Research said in July 2024.

Still, the growth of Permian production will remain robust through 2026 due to increased efficiency, the investment bank noted.

Efficiency and technological advancements will support growth in the U.S. shale patch in the near term.

However, for most producers, “drill, baby, drill” will depend on the oil price signals, drilling economics, and market fundamentals of supply and demand.

A friendly Administration that would ease energy infrastructure permitting would surely help U.S. producers. But this will not be enough to make companies abandon the discipline in production, capital allocation, and investor returns—the new priorities they have learned the hard way.

By Tsvetana Paraskova for Oilprice.com

De Beers sitting on largest diamond inventory since 2008, FT reports

CAPITALI$T CRISIS IS OVERPRODUCTION

Staff Writer | December 31, 2024 | 

De Beers store on Bond Street, London. (Image courtesy of William | stock.adobe.com.)

De Beers has reportedly built up its largest stockpile of diamonds since the 2008 financial crisis, with an inventory valued now at roughly $2 billion, according the Financial Times.


“It’s been a bad year for rough diamond sales,” De Beers chief executive Al Cook told the FT, though he did not provide additional details on its inventory.

The diamond giant has faced multiple headwinds in recent years. A slumping Chinese economy, in particular, has been a major drag on demand. Cheaper lab-grown diamonds are also adding pressure.

In a briefing to Bloomberg last year, Cook said his company has been building its stock on the assumption that diamond prices will recover, and that it will be able to sell that supply.

At the end of 2024, that hasn’t materialized. For the first half of this year, De Beers’ sales were down about 20% compared to the same time a year ago.

Still, Cook remains upbeat about a turnaround. “As we go independent, we have the freedom to focus on marketing as hard as we focused on mining,” he told the FT.

“This feels to me like the right time to be driving marketing and getting behind our brands and retail, even as we cut the capital and the spend on the mining side.”

However, a new report from McKinsey gave a less optimistic outlook for diamond miners, suggesting that lab-grown alternatives could one day take over the market.

Earlier this year, De Beers’ parent company Anglo American announced plans to spin off the diamond business either through a sale or an initial public offering.

Cobalt miner Jervois in rescue deal after struggle to compete with China

Reuters | January 2, 2025 

Image courtesy of Jervois Mining

Cobalt miner Jervois Global said on Thursday that one of its lenders will take the company private as part of a pre-packaged bankruptcy, the latest Western miner scrambling to survive as competition from China intensifies.


US fund manager Millstreet Capital Management will take control of Jervois as part of the pre-packaged Chapter 11 filing, inject $145 million into the company and convert more than $100 million of loans into equity.

Western miners and policymakers are in a precarious position as Chinese-linked companies boost production using safety and environmental practices that are often looser than those expected by many governments and manufacturers.

The deal will wipe out all existing shareholders in Jervois, which has not turned a profit in seven years. The company idled its Idaho cobalt mine in 2023, laying off 250 workers, weeks before it was set to open. That site was the only US source of cobalt, used to make electric vehicle batteries, electronics and a range of weapons.

“It’s been a difficult few years for us,” Jervois CEO Bryce Crocker told Reuters. “We needed to restructure.” The company has said the Idaho mine would not be viable until cobalt prices rise to about double their current level.

Jervois, which has received financial support from the US Department of Defense, began to struggle after China’s CMOC Group opened a mine in the Democratic Republic of Congo in 2023, pushing global production of the metal to an all-time high even as electric vehicle sales have failed to meet bullish forecasts.

Cobalt prices have plunged 72% since hitting a peak in April 2022, and shares in Australia-based Jervois have slid.

The price of another Jervois product, nickel, has fallen by more than half over the past two years.

Millstreet, which loaned $100 million for the Idaho project and $25 million to the company, will convert that debt into equity. That and the injection of $145 million into Jervois will allow the fund manager to take full control of its assets, which include a cobalt refinery in Finland and nickel refinery in Brazil.

Jervois had been working with an investment bank on potential funding arrangements since the Idaho site was mothballed. It hosted Millstreet at all three of its sites, Crocker said.

Ultimately, Millstreet decided it did not want to partner with other potential investors, a step that helped make negotiations straightforward, he added.

“Millstreet didn’t want to have other investors in there,” said Crocker, a former Glencore executive who joined Jervois in 2017. “There was a willingness on their part to equitize the debt.”

Representatives for Boston-based Millstreet were not immediately available to comment.

The company’s top two shareholders are Australia’s largest pension fund, AustralianSuper, and commodity trader Mercuria, with stakes of 23% and 7.6%, LSEG data showed.

AustralianSuper’s holding in Jervois almost tripled to roughly 400 million shares between June 2022 and June 2024, according to holdings data for its largest fund. Over the same period, the value of that shareholding fell to A$6 million from A$170 million.

AustralianSuper and Mercuria both declined to comment.

It was not immediately clear if Millstreet intends to re-domicile Jervois as a US-based company or if Millstreet will keep the existing Jervois management.

A $15 million grant from the Pentagon will be unaffected by the bankruptcy and continue to fund a study on whether Jervois should build a cobalt refinery in the US, Crocker said.


Jervois will continue to operate as normal during the bankruptcy, which is expected to be completed before the end of April.

The Idaho mine site is likely to remain mothballed until prices for the metal hit at least $20 per pound, roughly double current levels.

Jervois said last month US President-elect Donald Trump should eschew broad-based metals tariffs and instead encourage or even require manufacturers to buy cobalt from Western miners.

“These markets aren’t free, and governments need to decide if they want to rebalance the playing field,” said Crocker.

“The key message for the US government and others, is that while the shareholders of Jervois may be changing, the strategy to protect national security supply chains for cobalt has not.”

(By Ernest Scheyder, Eric Onstad, Clara Denina and Lewis Jackson; Editing by Jason Neely and David Gregorio)

US Steel jumps most in a year on Nippon Steel offer to Biden

Bloomberg News | December 31, 2024 |

Credit: US Steel

Nippon Steel Corp. offered to give the US government a veto over any reduction in US Steel Corp.’s production capacity in a proposal that marks a last-ditch effort to win President Joe Biden’s approval for its takeover of the iconic American company, according to a person familiar with the matter. Shares of US Steel surged by the most in a year.


The proposal is aimed at addressing concerns raised by the Committee on Foreign Investment in the US, or Cfius, which said last week that the Japanese company’s takeover of US Steel would lead to a decline in American steel output, said the person who asked not to be named because the information is private. The Washington Post reported on theproposal earlier.


Shares of US Steel rose as much as 14% Tuesday in New York after the report, the biggest intraday jump since December 2023. The shares were trading at $34.19 as of 3:59 p.m. in New York, still well below Nippon Steel’s $55-a-share offer.

Nippon Steel and US Steel didn’t respond to requests for comment.

The White House referred to an earlier statement, saying it was reviewing the CFIUS report and declining further comment.

Nippon Steel’s proposed $14.1 billion acquisition of US Steel moved a step closer to being blocked last week after the US national security panel deadlocked on its review and left the final decision with Biden, who has repeatedly indicated his opposition to the deal.

The president is said to still be planning on blocking it, though the White House has never said flatly that he would. He has 15 days from the referral to announce a decision and has repeatedly said US Steel should remain domestically owned and operated.

President-elect Donald Trump has said he would block the acquisition, but the timeline means it will be resolved before he takes office.

The agreement, first announced in December 2023, became an issue in the US presidential election because of opposition from the influential United Steelworkers union. Yet some local union officials, mayors and federal lawmakers have signaled support and called on Biden to allow the deal to proceed.

(By Joe Deaux and Doug Alexander)

Biden to ban more offshore oil drilling before Trump arrives

Bloomberg News | January 2, 2025 |

Shenzi Petroleum development in the Gulf of Mexico. (Image courtesy of BHP.)

President Joe Biden is preparing to issue a decree permanently banning new offshore oil and gas development in some US coastal waters, locking in difficult-to-revoke protections during his final weeks in the White House.


Biden is set within days to issue the executive order barring the sale of new drilling rights in portions of the country’s outer continental shelf, according to people familiar with the effort who asked not to be named because the decision isn’t public.

The move is certain to complicate President-elect Donald Trump’s ambitions to drive more domestic energy production. Unlike other executive actions that can be easily undone, Biden’s planned declaration is rooted in a 72-year-old law that gives the White House wide discretion to permanently protect US waters from oil and gas leasing without explicitly empowering presidents to revoke the designations.

The move responds to pressure from congressional Democrats and environmental groups who have lobbied Biden to “maximize permanent protections” against offshore drilling, arguing the action is essential to safeguard vulnerable coastal communities, protect marine ecosystems from oil spills and fight climate change.

White House spokespeople didn’t respond to requests for comment, and the Interior Department declined to comment on the matter.

The move responds to pressure from congressional Democrats and environmental groups who have lobbied Biden to “maximize permanent protections” against offshore drilling

Biden administration officials have been considering the approach for more than two years, though efforts intensified after Trump’s victory, as the outgoing president sought to enshrine new environmental measures before the end of his term. The fresh offshore protections are in line with recent Biden actions to protect areas from industrial mining and energy development, including a formal proposal issued Monday to thwart the sale of new oil, gas and geothermal leases in Nevada’s Ruby Mountains.

The move would further burnish Biden’s green bona fides, deepening his record prioritizing conservation and fighting climate change while in office.Biden is already on track to protect more US lands and waters than any other president, even as he faces mounting calls to expand that record with new national monuments safeguarding culturally significant land in California. By contrast,Trump has vowed to unleash domestic production of oil and gas while rolling back environmental regulations that curb their consumption.

The full scope of Biden’s coming offshore protections wasn’t clear Thursday, but the designation is set to include waters considered critical to coastal resilience and the effort is meant to be targeted, said people familiar with the decision. Congressional Democrats and scores of environmental groups have urged Biden to make a sweeping declaration, though some recent deliberations have focused on parts of the Pacific Ocean near California and eastern Gulf of Mexico waters by Florida.

The declaration would not affect drilling and other activity on existing leases.
Trump challenge

Trump is expected to order a reversal of the protections, but it’s not clear he will be successful. During his first term in office, Trump sought to revoke former President Barack Obama’s order to protect more than 125 million acres (50.6 million hectares) of the Arctic and Atlantic Oceans, but that move was rejected by a federal district court in 2019.

Trump, himself, has actually used the same statute to block oil and gas leasing in waters near Florida and along the Southeast US in a bid to appeal to voters in the final weeks of the 2020 presidential campaign.

Supporters of the 1953 Outer Continental Shelf Lands Act, which governs offshore oil and gas development, note that Congress included a provision giving presidents wide discretion to permanently protect waters from leasing, but it didn’t explicitly grant them the authority to undo those designations.

For decades, presidents have invoked the law’s withdrawal provision to preserve walrus feeding grounds, US Arctic waters and other sensitive marine resources, beginning with former President Dwight Eisenhower, who in 1960 created the Key Largo Coral Reef Preserve that remains protected today. Former President George H.W. Bush also invoked the provision to block oil leasing along the West Coast, Northeast US and southern Florida for a decade.

Though presidents have modified decisions from their predecessors to exempt areas from oil leasing, courts have never validated a complete reversal — and until Trump, no president had even attempted one.
Industry reaction

Conservationists said the move allows the US to meet its future energy needs without jeopardizing areas important for national security, coastal communities and marine life.

“President Biden has a historic opportunity to build on the legacy of former Democratic and Republican presidents who protected our coasts from new offshore drilling,” said Joseph Gordon, campaign director with the advocacy group Oceana. “Our coastlines are home to millions of Americans and support billions of dollars of economic activity that depend on a healthy coast, abundant wildlife and thriving fisheries.”

Biden has already curtailed opportunities for new offshore oil and gas development using potentially less enduring measures. His administration designed a program for selling offshore leases that allows just three auctions over the next five years, a record low. However, Trump is expected to rewrite that leasing plan using an administrative process that could take at least a year, and Republican lawmakers are considering ordering more offshore oil lease sales as a way to raise revenue to offset the cost of extending tax cuts.

Oil industry advocates have warned against new restrictions, arguing the world will need fossil fuels for decades to come — and the US produces them more cleanly than other countries. Nearly a century after it was first drilled, the Gulf of Mexico remains a key source of US oil and gas, providing about 14% of domestic output today — enough that if it were a country, it would rank among the world’s top 12 oil producers.

New restrictions would represent an attack on American energy, said Daniel Turner, founder of the Power The Future group that supports workers in the oil, coal and natural gas industries. “President Trump should overturn this order on the first day,” he said, “and quickly usher Biden’s green agenda into the dustbin of history.”

Offshore drilling remains a politically divisive topic. Though Republicans tend to be more supportive, the Pew Research Center last May found fewer than half of survey respondents backed more offshore oil and gas drilling. The prospect is particularly controversial in some coastal states, where leaders from both parties have warned that oil spills could cripple tourism-based economies.

LME nickel hits four-year low as 2025 opens with eyes on China

Bloomberg News | January 2, 2025 |

Credit: LME

Nickel hit the lowest level since 2020 and copper steadied near a nine-month low on the first trading day of the year, with investors weighing the impact of a rallying dollar and the scope for additional Chinese stimulus.


Prices for nickel, used in stainless steel and batteries, dropped towards $15,000 a ton on the London Metal Exchange, as the dollar added pressure on industrial metals toward the end of the trading day.


The greenback’s rally came as a weekly reading of US jobless claims dropped to an eight-month low, signaling the ongoing resilience of the nation’s economy. A stronger dollar could hurt buying power for manufacturers in countries like China, where there are already worries about the strength of metals demand.

For the year to come, the market is focused on whether there will be a recovery in China’s embattled property sector, a key demand pillar for metals, as well as the potential impact of trade frictions from Donald Trump’s US presidency. Officials have pledged to use greater public borrowing and spending as well as monetary easing to spur growth in 2025.

Investors are “waiting to see if and when Chinese support measures will feed their way into metals markets in the form of stronger demand,” said Ewa Manthey, a commodities strategist at ING, said by email. “Trump’s tariffs could also trigger bigger stimulus from China, capping the downside for copper prices this year.”

Chinese President Xi Jinping acknowledged new challenges from the external environment in a New Year’s Eve speech on Tuesday. Earlier that day, he said China is on track to meet its official growth target of about 5% for 2024 and the economy is “overall stable.”

The LMEX Index of six metals on the London Metal Exchange closed out 2024 with a modest gain of about 4%, as softer Chinese demand was offset by flashes of supply stress on falling inventories and mine supply shortages.

Nickel was 1.6% lower at $15,090 a ton as of 4:48 p.m. local time on the LME, after earlier hitting $15,055 a ton, the lowest level since November 2020. Copper was 0.4% higher at $8,801.50 a ton, having closed out 2024 at a nine-month low.

Brazilian miner boosts rare earths output in challenge to China’s grip

Bloomberg News | January 2, 2025 | 

Pela Ema ionic clay rare earths mine. (Image courtesy of Serra Verde Group.)

Brazilian miner Serra Verde Group is boosting production of rare earth metals at a time of growing trade friction between the US and China, the world’s dominant supplier of minerals critical to technology.


The company, which started commercially producing concentrate in Brazil’s Goias state about a year ago, plans to deliver 5,000 tons of rare earth oxide annually in 2026, chief operating officer Ricardo Grossi said in an interview. The higher output will come alongside increased capacity, he said Monday, without disclosing numbers.

Serra Verde is also mulling strategic partnerships with companies and countries to expand in rare earth metals production and processing, said Grossi, whose closely held firm produces neodymium, praseodymium, terbium and dysprosium. He sees a chance for the miner to become an alternative supplier to the West for such critical minerals, especially if China expands export controls against the US to more metals.

China has a dominant role as a producer and processor of the 17 rare earth elements used in magnets needed for electric vehicles, wind turbines and solar panels, as well as in critical military hardware. The Asian nation, which controls 70% of the mined material and 90% of refining capacity, produced 240,000 tons of rare earth oxide equivalent in 2023, according to the US Geological Survey. Such dominance has the US and allies scouring the globe for alternative sources to reduce dependence on China.


Serra Verde is backed by Denham Capital and has drawn support from Energy and Minerals Group in the US and the UK’s Vision Blue Resources Ltd., including a $150 million investment in October. Negotiations for another funding round are ongoing.

“The investment can be made by a new partner or by our current investors,” said Grossi, a mining engineer who has worked for companies such as Vale SA and Anglo American Plc.

The company is also assessing the potential for an expansion of its Brazilian operations, which could double output before 2030. Serra Verde’s efforts have been recognized by the Minerals Security Partnership — a collaboration of 14 countries including the US plus the European Union, which aims to accelerate development of sustainable, secure and diverse supply chains for these critical minerals.


While prices for rare earth metals have been hurt by a glut in supplies, Serra Verde is banking on continued appetite for the elements to produce more magnets. Grossi said Asia is currently the main destination for its output. The company sees demand for its products increasing by 8.5% a year until 2035. And that’s expected to be a boost to the company’s balance sheet.

“We began showing revenue for the first time after 15 years, which is already a win,” Grossi said. “The company’s financial dynamics are set to change completely from 2026 onwards.”

(By Mariana Durao)

Oman makes first copper export in 30 years

Staff Writer | January 2, 2025 | 

Image: Minerals Development Oman.

Oman has announced a significant milestone with the first shipment of copper concentrates, marking the resumption of copper export from the sultanate after a 30-year hiatus.


Approximately 900 tonnes of copper concentrates were shipped from the Lasail mine in Sohar, being developed by Minerals Development Oman (MDO).

This landmark achievement, said MDO, not only revives copper mining in Oman after nearly 30 years but also underscores its commitment to economic diversification and sustainability.

Matar bin Salem Al-Badi, CEO of MDO, noted the historical significance and emphasized the region’s 3,000-year history of copper mining, including the work of the Oman Mining Company since 1983.

“The export of the first shipment from the Lasail mine is a testament to our ability to transform challenges into tangible opportunities for growth,” Al-Badi said in a press release.

The processed ore at Lasail is expected to yield high-quality copper concentrates with purity levels ranging between 18% and 22%. Its average annual production is estimated at around 500,000 tonnes of copper ore.

MDO said it also has plans to start the Al-Baydha mine in Liwa by 2025-2026. Together, these mines have a combined reserve of approximately 2.78 million tons of copper ore. The first phase of the redevelopment project is expected to span 4 to 5 years.

The company said its vision extends beyond the redevelopment of the Lasail and Al-Baydha mines, and that it is actively conducting exploratory studies in nearby regions to boost copper reserves. Its plans include the Mazoon project, Oman’s largest integrated copper concentrate production initiative.

Gates, Bezos-backed KoBold Metals raises $537 million in race for critical minerals

Staff Writer | January 2, 2025 |

KoBold Metals is involved in nearly 60 explorations projects across three continents. (Image courtesy of KoBold Metals.)

KoBold Metals has raised $537 million in its latest funding round as it seeks to become a key player in the race for critical minerals needed for the energy transition.


Backed by investors such as Microsoft’s Bill Gates and Amazon’s Jeff Bezos, the company said its Series C funding round valued KoBold at $2.96 billion.

The round was co-led by new investor Durable Capital Partners LP and a pair of T. Rowe Price funds making their first investment in the company.

The financing included participation from existing KoBold investors Andreessen Horowitz Growth, BOND, Gates’ Breakthrough Energy, Earthshot Ventures, Equinor, July Fund, Mitsubishi Corporation, and Standard Investments, as well as new investors StepStone Group and WCM Investment Management.

The Berkeley, California-based KoBold uses artificial intelligence to find deposits of minerals such as copper, lithium and nickel.

According to the company, the investment will fund new exploration, help bring “high-potential” projects to production, and bolster research and development. To date, it has raised $1 billion.

In February, KoBold teamed up with Canada’s Midnight Sun Mining (TSXV: MMA) to explore the Zambian Copperbelt. Midnight Sun’s project lies just a few kilometers from First Quantum Minerals’ (TSX: FM) Kansanshi mine, Africa’s largest copper mining complex.

The Dumbwa target KoBold will be exploring sits in the southern portion of the Solwezi project and features a 20-km-long soil anomaly with a peak grade of 0.73% copper.

Drill highlights from Dumbwa include:13 metres of 0.63% copper, including 3 metres of 1.3% copper, starting from 85 metres downhole;
12 metres of 0.65% copper, including 6 metres of 1.06% copper, starting from surface;
13.5 metres of 0.77% copper from 5 metres;
16 metres of 1.24% copper from 164 metres; and
15 metres of 0.71% copper from 34 metres.

KoBold aims to produce at least 300,000 tonnes per year by 2030 at its $2 billion Mingomba flagship project, making it the country’s largest copper operation. The company said it will begin sinking the mining shaft in the first half of 2026.

KoBold’s co-founder and chief executive Kurt House said about 40% of the new capital would be spent on developing existing projects into mines, with the Zambian copper project taking “the lion’s share of that.”
Quest for battery metals

KoBold began its quest for battery metals almost five years ago in Canada, after it acquired rights to an area in northern Quebec, just south of Glencore’s Raglan nickel mine, where it detected lithium.

The startup is now advancing 60 active projects spanning four continents: Africa, North America, Australia, and Asia. Using artificial intelligence, KoBold aims to create a “Google Maps” of the Earth’s crust, focusing on finding copper, cobalt, nickel, and lithium deposits.

It collects and analyzes multiple data streams — from old drilling results to satellite imagery — to better understand where new deposits might be found. Algorithms applied to the data collected determine the geological patterns that indicate a potential deposit of cobalt, which occurs naturally alongside nickel and copper.

KoBold said the technology can locate resources that may have eluded more traditional geologists and can help miners decide where to acquire land and drill.

Critical Minerals Race Heats Up as Battery Demand Wanes

By Irina Slav - Jan 02, 2025, 

KoBold has discovered a massive copper deposit in Zambia and aims to contribute 300,000 tons to global copper output by 2030.

KoBold plans to use AI to locate and develop critical mineral deposits like lithium, cobalt, copper, and nickel.

The company plans to partner with actual mining companies for the physical extraction of the resources.

Just a couple of years ago, electric vehicles were among the hottest industries out there. Listings sent their shares through the roof. Everyone wanted in on the electrification of transport. Now, EV makers are going bust left and right, and battery makers are in distress as demand for their product slumps. Yet miners are doing well—at least some of them.

A mining startup called KoBold Metals recently raised $537 million from investors including Bill Gates and Jeff Bezos. That latest funding round valued the company at a respectable $2.96 billion, the Financial Times reported this week, adding that KoBold eyed a key position in the critical minerals industry.

What the company does that sets it apart from the crowd is using artificial intelligence to local deposits of metals such as lithium and cobalt, as well as copper and nickel—all critical for the energy transition. The company has already made a discovery, too. Earlier this year, KoBold said it had found a massive copper deposit in Zambia. Developing the deposit would cost $2 billion, and it would add some 300,000 tons to global copper production starting in 2030, the company also said.

There has been no news about the project since June this year when Zambian officials said KoBold may spend as much as $2.3 billion on developing what reports were dubbing the biggest copper mine in Zambia. That was the case until early December when the White House said it would help finance the construction of a transport corridor across Tanzania, the Democratic Republic of the Congo, and Zambia. The plan aims to facilitate the extraction of transition-related natural resources from African countries as the West seeks to get an edge in the critical minerals race with China.

KoBold seems to be, at least according to its financial backers, a key player in this race. It is not really a traditional mining company, but interest is high, and it plans to go public in two to three years. It also has plans to partner with actual mining companies for the physical extraction of the resources, according to the Financial Times report.

Some would argue that the race is doomed. China is years ahead with critical minerals mining and processing. It has pretty much cornered this market, and challenging its position would take a lot of time and money that most investors might not be willing to spend. Yet the ambition is strong with governments in the European Union and the Biden administration in the U.S.—and according to the FT, the incoming administration is far from opposed to the idea.

“We’ve had plenty of conversations with people who will be associated with the next administration who are very enthusiastic about KoBold’s mission,” the founder and chief executive of KoBold Metals told the Financial Times. Kurt House added there was broad bipartisan support for the company’s activities based on the perception of critical mineral supply as a matter of national security.

Indeed, it is a matter of national security for nations that have made a bet on the electrification of everything. Currently, these nations are completely dependent on China, either directly or indirectly. Diversifying away from the dominant critical mineral market player would make sense—as in, better late than never.

The problem is that this diversification would be difficult to achieve soon enough to make financial sense for most backers of the transition. Indeed, some investors have realized they will not be making fast profits from the transition and are adopting a longer-term perspective. Yet it seems that lately even the long-term profitability of the transition has grown increasingly uncertain, what with failed EV expectations and battery booms not materializing. KoBold Metals and its peers may prove to be key for the transition. Then again, they may be the next EV industry.

By Irina Slav for Oilprice.com

 

WII Sub Needs $1.5M For Overhaul at Bay Shipbuilding

USS Cobia at the Wisconsin Maritime Museum, 2023 (Michael Barera / CC BY SA 4.0)

Published Jan 1, 2025 10:00 PM by The Maritime Executive

 

 

A U.S Navy submarine that played a central role in World War II is scheduled for dry docking for preservation works in order to continue attracting visitors as a historic museum boat. The Wisconsin Maritime Museum (WMM), the custodian of USS Cobia, is seeking to raise $1.5 million for comprehensive inspection and essential preventative maintenance at Fincantieri Bay Shipbuilding in Wisconsin. 

A National Historic Landmark vessel, Cobia has been a museum ship in Manitowoc, Wisconsin, since 1970. The boat is set to be towed to Fincantieri in September for extensive preservation works, which are expected to last up to six weeks. It will be the second time in her post-service career that the ship enters drydock. 

The Gato-class submarine has historic value from its role in WWII. Launched in November 1943, the 312-foot boat completed six war patrols and sank 13 Japanese vessels. One of her notable achievements was attacking an enemy convoy bound for Japanese-held Iwo Jima. Cobia sank two vessels, including a troop transport carrying a Japanese tank battalion of 28 tanks. The sinking was critical to the U.S. Marines' success in capturing Iwo Jima six months later.

Cobia was one of 70 diesel-powered Gato-class submarines that the U.S Navy built en masse. They represented cutting-edge technology at the outset of the war, but they were quickly superseded by upgraded designs with deeper diving capability and longer range. The majority of the surviving Gato-class boats were placed in reserve or scrapped after the war's end. 

Cobia was decommissioned a year after the end of WWII, then recommissioned eight years later to train reservists and Submarine School students at New London, Connecticut. In 1959, the Navy considered Cobia obsolete as a deployable warship and transferred her to the Milwaukee, Wisconsin Naval Reserve Center. In 1986, the boat was incorporated as a part of the Manitowoc Maritime Museum, declared a National Historic Landmark, and placed on the National Register of Historic Places.

WMM wants to ensure that Cobia continues to be a living memory attracting visitors. The museum reckons that while it takes more than $150,000 annually to keep Cobia “ship-shape," it needs donations from well-wishers to raise the $1.5 million required for the upcoming dry docking.

The funds will go towards preparing the boat for the trip to Sturgeon Bay, towage, and time in dry dock. The scheduled works will include inspection of the underwater hull and cleaning and repairing free-flood areas, including spaces around the torpedo tubes. Other works include tank inspections to ensure watertight integrity.

“Part of our obligation to our veterans is to preserve national treasures like USS Cobia so that future generations can acknowledge the debt we owe to the fallen,” stated WMM.

Top image: USS Cobia at the Wisconsin Maritime Museum, 2023 (Michael Barera / CC BY SA 4.0)