Litigation from fossil fuel companies threatens climate action

BY FRENCH PRESS AGENCY - AFP GLASGOW, SCOTLAND ENERGY
NOV 12, 2021

A protester holds a placard displaying a "Stop Climate Crime" slogan during a climate change demonstration outside of the COP26 Climate Change Conference in Glasgow, Scotland on Nov. 12, 2021. (AFP)


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Governments seeking to cut emissions could face trillion-dollar lawsuits from fossil fuel companies looking to regain stranded assets or lost revenue, a hidden cost of climate action that threatens to "make a mockery" of commitments made at the recent COP26 summit.

Energy experts predict that more ambitious climate action from world leaders will significantly increase companies' use of a tribunal mechanism that has already awarded billions to heavy industry.

Trade agreements such as the Energy Charter Treaty and NAFTA contain investor arbitration clauses, known as investor-state dispute settlement (ISDS), that allow foreign companies to sue governments over actions they say hit profits or investments.

Campaigners say that energy companies are increasingly turning to this type of arbitration to recoup investments as governments accelerate the shift away from fossil fuels.

Jean Blaylock, trade campaigner at Global Justice Now, tells Agence France-Presse (AFP) these corporate courts – "the global trade system's dirty little secret" – could "make a mockery" of commitments generated at the COP26 summit.

"We're seeing the fossil fuel sector use investor-state dispute settlement to hold climate action to ransom," she says.

"These companies have made unfathomable profits from fueling the climate crisis, we cannot let them demand even bigger pay-outs."

AFP has obtained excerpts from a presentation given at a September trade event by consultancy firm Berkeley Research Group (BRG), which predicted that climate legislation would lead to a rise in private lawsuits.

"Increased climate policy ambition (e.g. CAT Ratings) will drive the policies behind climate-related disputes," said an excerpt.

CAT refers to Climate Action Tracker, which ranks national emissions plans on their compatibility with the Paris climate deal.

The presentation suggested that the "scale of energy transition policy" could "unleash a wave of international investment and/or commercial arbitration to adjudicate claims."

Responding to a request to comment, Christopher Goncalves, chair of BRG's Energy and Climate practice, told AFP that dispute resolution was "likely to remain a critical component of the energy transition process."

"It is not possible to make any generic conclusion as to whether such legal disputes accelerate or impede the energy transition," he added.
History of awards

The BRG presentation said if governments legislate to limit heating to 2C by 2050, $3.3-6.5 trillion in upstream fossil fuel assets would be at risk, as well as $650-700 billion in coal power assets and $900 billion in oil reserve write-offs in a 1.5C scenario.

Blaylock said $9 trillion in upstream fossil fuel and oil reserve write-offs are at risk of litigation – a little over a tenth of the global economy.

Energy and mining firms have a long history in winning large settlements. In 2006, Occidental Energy sued the government of Ecuador for terminating an oil contract. It was awarded $1.77 billion, which was later reduced to $1bn.

In 2012 Tethyan Copper sued the government of Pakistan over a gold mine, and in 2019 was awarded $5.9 billion – roughly 2% of the country's GDP.

ISDS decisions are internationally binding and courts have in the past ordered the seizure of state assets when countries have refused to pay.

Five current cases, brought by energy firms identified by Global Justice Now, are seeking $18 billion from governments.

These include a dispute involving the cancellation of the Keystone Pipeline in North America, where the complainant, TC Energy, is seeking a reported $15 billion in lost revenue.

A TC Energy spokesperson told AFP that it would "not comment on speculative claims."

German energy firm Uniper is one of two companies reportedly seeking more than $1 billion from the Netherlands after it decided to phase out coal.

A Uniper spokesperson did not comment on the amount in question but said government policy had cut 15 years off the lifespan of its MPP3 power plant near Rotterdam, "however understandable that change in itself may be."
'Ordinary people will pay'

British company Rockhopper is suing Italy for a reported $324 million over a ban on offshore oil drilling close to the country's coast. Italy signed the Energy Charter Treaty (ECT) but then withdrew in 2016.

Companies can resort to ISDS for 20 years after a country leaves the ECT.

A spokesperson for Rockhopper rejected the idea that the suit was linked to climate change.

"The Italian government issued licenses and encouraged significant investment in oil and gas exploration, based on this platform. Clearly it is not equitable to change the rules halfway through," she told AFP.

Most of the governments wrapping up COP26 plan to slash their emissions to net-zero by 2050.

That will cost the global economy as much as $100 trillion, according to International Energy Agency estimates.

Nations are also pledging billions to help countries adapt to climate-driven extreme weather and crop failures.

Campaigners say that litigation represents a looming, hidden cost of climate action.

"The science is clear. The vast majority of fossil fuels must stay in the ground to avoid catastrophic global heating," Leah Sullivan, trade campaigner at the War on Want pressure group, told AFP.

Since ISDS awards are taken from public money, "It's ordinary people who will have to pay for this," she said.

Auto industry’s challenges hold up net-zero progress despite growing EV sales

Bloomberg News 

Stock image.

Picture James Bond strapped to a doomsday device while a countdown clock ticks toward zero. That’s the situation the Earth faces when it comes to climate change, according to U.K. Prime Minister Boris Johnson.


“The tragedy is that this is not a movie and the doomsday device is real,” Johnson said Monday in Glasgow at the 26th COP climate conference, the annual meeting that’s supposed to set out plans to rein in global warming.

The transport sector is a big part of the problem. It accounts for about 10% of global greenhouse gas emissions and will face special scrutiny at COP26 because of how much it pollutes. The European Union in July proposed that member states stop selling combustion cars no later than 2035 as the region tries to cut transport emissions that have climbed by a third since 1990.

The auto industry may well be phasing out the internal combustion engine and EV sales are taking off, but that doesn’t mean the path to zero-emission driving will be easy. There are a few key roadblocks holding up progress that are likely to come up at the conference over the coming days:

Dirty production

Building an EV emits significantly more carbon dioxide than producing combustion models, researchers have found. That’s mainly because EVs are made with a resource-intensive battery and greater amounts of aluminum. Battery metals including lithium, cobalt and nickel are mined in Australia, South America and Africa and then shipped around the world for refining, resulting in massive carbon emissions. Carmakers are acutely aware of the issue’s potential to cause PR problems and have started exploring alternative sourcing methods, but the projects are still in their infancy.

Clean electricity

While EVs are dirtier than regular cars coming out of the factory, they’re supposed to make up for that big time during their driving years because they have no tailpipe emissions. Another factor in this equation, though, is the juice that powers the battery. The problem is that the world still produces electricity mostly from fossil-fired sources, with coal and natural gas accounting for almost 60% of the global power mix in 2020, according to International Energy Agency data. In China, where EV sales are surging, coal — the dirtiest fossil fuel — remains the dominant electricity source by far.

Charger anxiety

Numerous people I know are open to buying an EV but are put off by what they perceive as sub-par charging convenience. A Sky News colleague driving an electric SUV from London to the COP venue in Glasgow struggled with some patchy charging infrastructure along the way. Carmakers and politicians have identified a lack of charging spots as a key hurdle to wider EV adoption. In China, where EV adoption is outpacing infrastructure upgrades, the issues may well fuel buyer’s remorse after drivers there had to queue for hours to recharge their vehicle during last month’s Golden Week holiday. Europe has billions of euros earmarked for more charging spots, but especially in larger cities — where people tend to live in apartment buildings instead of free-standing homes — coming up with convenient charging options will remain a challenge.

Transitioning trucks

While passenger cars are fairly well on their way toward electrification, trucks are still far off from meeting the EU’s net-zero climate target for 2050, according to a new report from Transport & Environment. The Brussels-based NGO says the EU’s CO2 emission standards for trucks, introduced in 2019, should be tightened because they lack the ambition to spur real change. Almost 98% of the roughly 170,000 trucks and vans registered in Europe between July 2019 and June 2020 had a diesel engine, according to the report.

“The European Commission is addressing car emissions with plans to phase out petrol and diesel cars, yet it is still miles away from bringing trucking in line with its Green Deal ambition,” said Lucien Mathieu, acting director for freight at T&E. “With trade rebounding, now is the time to raise the ambition for truck emissions targets.”

(By Stefan Nicola)

Toyota, Yamaha, Mazda, Subaru to develop alternate fuels for combustion engines

FILE PHOTO: A Toyota logo is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland. (REUTERS)

 Updated: 14 Nov 2021, 10:10 AM ISTHT Auto Desk

Toyota currently has plans to develop 15 EV models by 2025 and is investing $13.5 billion over the next decade to expand battery production capacity.
Meanwhile, it is also working on developing vehicles powered by hydrogen.

Toyota Motor Corp has announced that will partner with four other Japanese vehicle makers to explore the feasibility of developing alternative green motor fuels for internal combustion engine such as hydrogen fuel and synthetic fuels derived from biomass.

The companies that Toyota is partnering with include Mazda, Subaru, Yamaha Motor and Kawasaki Heavy Industries.

All the five companies made the announcement of partnership at a race track in Okayama, western Japan.

Toyota is of the belief that though transforming internal combustion engines to green fuels such as hydrogen is technologically difficult, but achieving this goal would allow the companies to support ages-old existing supply chain systems. These include hundreds of thousands of workers who may otherwise have to leave their jobs as the industry switches to producing electric vehicles (EV).

(Also read | Toyota CEO defends combustion engines, says the enemy is carbon)

As countries around the world tighten environmental regulations in order to cut down carbon emissions, various automakers including Toyota are working on ramping up the production of EVs. Toyota is also under pressure as the Japan government has said that it aims to be a carbon neutral nation by 2050 and is also promoting the use of hydrogen fuel.

Toyota currently has plans to develop 15 EV models by 2025 and is investing $13.5 billion over the next decade to expand battery production capacity. Meanwhile, it is also working on developing vehicles powered by hydrogen.

(Also read | Toyota ranked one of worst major automakers for emissions efforts)

Toyota president Akio Toyoda spent the weekend swerving around the racetrack in western Japan in a Toyota Corolla. The version he drove was equipped with in-house hydrogen engine, which propels the vehicle by burning the fuel much like traditional engines use gasoline.

The company also showcased other vehicles running on carbon-neutral propellants in a three-hour road race, along with Mazda. "The enemy is carbon, not internal combustion engines," Toyoda said.

(with inputs from Reuters)

Global carmakers now target $515 billion for EVs, batteries

Reuters | November 10, 2021 

Stock image.

Global automakers are planning to spend more than half a trillion dollars on electric vehicles and batteries through 2030, according to a Reuters analysis, amping up investments aimed at weaning car buyers away from fossil fuels and meeting increasingly tough decarbonization targets.


Less than three years ago, a similar analysis by Reuters found car companies planned to spend $300 billion on EVs and related technologies. But looming zero-carbon mandates in cities such as London and Paris and countries from Norway to China have lent additional urgency to the industry’s EV-related investment commitments.

The most recent analysis shows carmakers planning to spend an estimated $515 billion over the next five to 10 years to develop and build new battery-powered vehicles and shift away from combustion engines.

Source: Reuters

But industry executives and forecasters remain concerned that consumer demand for EVs could fall well short of aggressive targets without substantial additional incentives and even greater spending on charging infrastructure and grid capacity.

Brian Maxim, head of global powertrain forecasting at AutoForecast Solutions, likens the growing investment commitments in vehicle electrification to the Cold War: “Once a few manufacturers announced EV programs, everyone else had to announce their own or be viewed as being left behind.”

However, he added, “this leaves a lot of vehicle manufacturers planning significant volumes for a vehicle category that has unknown consumer acceptance, and will have minimal to no profit” for years.

Reuters compiled the investment data from company statements, investor presentations and regulatory filings.

Other surveys have come up with different spending projections. In June, consulting firm AlixPartners said auto industry investments in electric vehicles would reach $330 billion by 2025. In 2020, all global automakers combined spent nearly $225 billion on capital expenditures and research and development, according to AlixPartners.

Tesla Inc, the world’s largest EV manufacturer, appears to be the one company that is selling virtually every vehicle it can build and is readying new multibillion-dollar “gigafactories” near Berlin and Austin that will significantly boost its annual production capacity. In early November, the company was valued at $1.2 trillion, more than twice the combined value of Volkswagen AG, Toyota Motor Corp, Ford Motor Co and General Motors Co.

Meanwhile, political and regulatory pressure is building on the world’s carmakers to begin phasing out production of fossil-fueled vehicles, including gasoline-electric hybrids, over the next 10-15 years, while ramping up output of full electric models.

A number of countries, from Singapore to Sweden, have said they will ban sales of new combustion engine vehicles by 2030. U.S. President Joseph Biden has said he wants 40% to 50% of sales to be electric vehicles by 2030.

Germany’s VW Group, which is still recovering financially from the 2016 Dieselgate emissions cheating scandal, continues to lead the rest of the industry, with more than $110 billion in EV and battery investment commitments through 2030. Those commitments, which represent more than 20% of the industry total, underpin VW’s aggressive rollout plans for millions of EVs in Europe, China and North America over the next decade.

VW’s investments, like those of many of its rivals, are aimed at improving the range and performance of batteries and lowering the cost of EVs, as well as expanding battery and EV production across the globe, according to public data released by the companies.

VW and fellow German automakers Daimler AG and BMW AG are planning to spend a combined $185 billion through 2030, while U.S. automakers GM and Ford expect to spend nearly $60 billion through 2025.

Chinese automakers, led by VW and GM local partner SAIC Motor, have announced well over $100 billion in investment targets over the next decade. Japanese automakers lag far behind, with Honda Motor, Toyota Motor and Nissan Motor so far publicly committing less than $40 billion combined.

These investments do not include the tens of billions of dollars being invested in additional production capacity by the world’s largest battery companies, many in cooperation with their automaker partners.

(By Paul Lienert and Tina Bellon; Editing by Dan Grebler)

The race to produce higher performing batteries

Bloomberg News | November 9, 2021 

Credit: Solid Power

Last week battery startup SES announced it had developed the world’s largest lithium metal cell. The cell itself is still a prototype, but the company expects to be producing them commercially for use in EVs by 2025. Off the back of this announcement, I want to talk about batteries using lithium metal anodes, and the differences between SES and its peers QuantumScape and Solid Power.


Lithium metal anodes are sought after in the battery industry, because they promise to create lightweight cells enabling EVs with longer driving ranges. Not only are companies trying to improve performance, they also are trying to make batteries safer and with a lower price tag. But they are taking different approaches to achieve this, the benefits and drawbacks of which can be understandably difficult to pick apart.

There are three key components in a lithium battery: two electrodes — the anode and the cathode — which are separated by an electrolyte. The batteries in your cell phone or EV today use a graphite for the anode and a liquid electrolyte. These are the components that most startups are working to improve, as they haven’t really changed in 30 years. Cathode development is less of a focus, as these materials have experienced steady but gradual improvements over the last decade.

Taking a step back, SES’s announcement is big news because it’s the first demonstration of a battery that could be used in an EV using a lithium metal anode with a liquid electrolyte. Using a liquid electrolyte with a lithium metal is exciting because it could almost be a ‘drop-in’ process that utilizes existing manufacturing facilities. This could lead to quick scale up and a high market penetration, while also preserving the billions of dollars of investment in current manufacturing plants.

In the past it hasn’t been possible to use lithium metal anodes with liquid electrolytes because it leads to a low-cycle life – the number of times the battery can be charged and discharged – and can cause failures leading to battery fires. SES’s secret sauce is in getting these two critical components to work together. It has achieved this by adding so much salt to its electrolyte that the properties of the liquids change, from flammable to a substance that won’t catch fire. By using a liquid SES creates good contact between all of the layers in the battery – this is essential to having a battery that can perform lots of cycles.

By sticking to a liquid-based electrolyte, SES’ approach differs from its peers Solid Power and QuantumScape. In contrast, Solid Power and QuantumScape have been targeting the use of lithium metal anodes in combination with a solid electrolytes, in place of liquids, to create solid-state batteries. Solid electrolytes have been the main focus of companies developing cells that use lithium metal anodes as it is easier to control the reactions between the two components, and removes the liquid electrolyte as a possible accelerant in the event of a fire.

Solid Power uses an electrolyte material called lithium sulfide, which promises to be relatively easy to integrate with existing manufacturing processes. As its cells only use solid components it is important to make sure all of the layers have good contact to ensure high performance over the lifetime of the system. Before it commercializes batteries with lithium metal anodes, Solid Power is also aiming to develop a cell with a silicon anode. But we’ll leave silicon anodes for a future column.

QuantumScape on the other hand will use a ceramic material for its cells. These will require the company to develop new manufacturing processes and equipment. However, its technology has the advantage of not using lithium metal, which is difficult to handle, during the manufacturing process. Instead, QuantumScape forms its lithium metal anode in-situ in the manufactured cell. It also adds a little gel electrolyte to help maintain contact between the cathode material and the solid electrolyte.

The eventual performance of each company’s cells promises to be fairly similar, all should be safer and with a higher energy density, but the routes to getting there are markedly different. Each company has its own unique set of challenges when it comes to scaling the production of the technology, but nothing that appears insurmountable. From an industry perspective, the more routes we have to achieving high performing cells the better, as it creates more resiliency and makes me confident safer high performance batteries are just around the corner.

(By James Frith)

Gemfields finds largest emerald ever at Zambia mine

Cecilia Jamasmie | November 8, 2021

The 7,525-carat emerald named Chipembele, which means “rhino” in the local dialect of Bemba. (Image courtesy of Gemfields.)

Africa-focused Gemfields (LON: GEM) (JSE: GML) has found the largest emerald ever mined at its Kagem mine in Zambia — a 7,525-carat (1,505g) gemstone named Chipembele, which means “rhino” in the local dialect of Bemba.


While no official record exists, it is extremely unusual to encounter a gemstone weighing more than 1,000 carats and only a couple of dozen unique enough to deserve their own name.

The last time a comparable emerald was found was in 2018, when Gemfields unearthed the 5,655-carat Inkalamu, meaning “lion”. Prior to that, the company had dug up a 6,225-carat emerald in 2010, which was named Insofu – Bemba for “elephant”.

The company said the three gemstones were formed within relatively close proximity at the Kagem mine, which is the world’s single largest producing emerald mine – owned by Gemfields in partnership with the Zambian government’s Industrial Development Corporation.

Chipembele was discovered in July by geologists Manas Banerjee and Richard Kapeta, who exclaimed “look at this rhino horn!” when they first saw the emerald, Gemstone said.

The gemstone is due to be sold at the company’s next emerald auction, with viewing expected to begin in the next few days.

The company’s last sales event, in August, generated $23.1 million in revenue – an all-time record for commercial-quality emerald sold at auctions.

Eyes on Asia

Gemfields, which has operations in both Mozambique and Zambia, has stepped up efforts to market its emeralds and rubies in China after a report highlighted the “huge potential” for ethically sourced gems in that market.

Top diamond miners are already stepping up efforts in that direction. The Natural Diamond Council (NDC), which groups the world’s seven leading producers, launched in May its first advertising campaign targeting the Asian and US markets.

NDC also inked a deal with China’s top jewellery retailer Chow Tai Fook to boost demand for mined rocks.

Coal mines seen belching worst Australia methane cloud this year

Bloomberg News | November 11, 2021 | 

Most of Australia’s coal mines are in the Hunter Valley (pictured), Bowen Basin and Surat Basin regions. (Image: Max Phillips (Jeremy Buckingham MLC) | Flickr.)

The most severe cloud of methane detected in Australia in more than a year was spotted last month by satellite over one of the country’s top coal producing regions.

The Oct. 17 plume was observed over the Bowen Basin in Queensland state and had an estimated emissions rate of 76 metric tons of methane an hour, according to Kayrros SAS, which analyzed observations from the European Space Agency’s Sentinel-5P satellite. The geoanalytics company said that given the high concentration of mines in the plume’s vicinity and its shape, it could have originated from multiple sources.

“Intermittent methane releases from underground mines, such as the ones mentioned, are a part of normal operations,’’ Australia’s Department of Industry, Science, Energy and Resources said in an emailed response to questions. The agency is implementing a methane accounting system using Sentinel data “to assess the implications of methane releases, such as the one observed in the picture provided,’’ to help track emissions.

The nation is facing growing global criticism from climate activists who say it isn’t doing enough to cut emissions. Australia won’t join a global effort led by the U.S. and European Union to curb methane emissions, Energy Minister Angus Taylor said before the start of the COP26 global climate conference now underway in Glasgow. The initiative, which includes 100 nations, aims to curb methane emissions at least 30% from 2020 levels by the end of the decade.


Methane has more than 80 times the warming impact of carbon dioxide over the short term. Halting intentional releases and accidental leaks could do more to slow climate change than almost any other single measure. Cheap technologies to mitigate coal mine emissions are widely available, according to climate research group Ember, while oil and gas companies can often profit from emissions reductions by selling the corralled methane as natural gas.

Higher methane emissions can result in part due to a region’s geography, and older and deeper coal seams typically emit more gas.

For every ton of coal produced in the Bowen Basin region, an average of 7.5 kilograms of methane is released, a Kayrros analysis found earlier this year. That’s 47% higher than the average global methane intensity estimated by the International Energy Agency, the company said at the time.

“The Department of Industry, Science, Energy and Resources accepts that the Sentinel satellite data is a useful source of information that needs careful consideration,” the Australian agency said in its statement. But the department said that it believes “it is premature to use the satellite data to quantify emissions in a reliable way. ”

If the October release lasted an hour at the rate estimated by Kayrros, it would have the same short-term climate impact as the annual average emissions from more than 3,700 U.K. cars. The plume was the most severe in Australia since a release detected in August last year, that was about 170 kilometers (106 miles) to the north, according to the Kayrros analysis of ESA data.

Scientists are just beginning to pinpoint the biggest sources of methane and existing satellite observations aren’t globally comprehensive. Cloud cover, precipitation and varying light can impact observations and the orbitals also have difficulty tracking releases over water.

(By Aaron Clark)

Investors pushed mining giants to quit coal. Now it’s backfiring
Bloomberg News | November 9, 2021 

Anglo spinned off its South Africa coal mines into South Africa’s Thungela Resources. (Image: Isibonelo Colliery by Philip Mostert. ©Anglo American 2019)

It was supposed to be a big win for climate activists: another of the world’s most powerful mining companies had caved to investor demands that it stop digging up coal.


Instead, Anglo American Plc’s strategy reversal has become a case study for unintended consequences. Its exit has transformed mines that were scheduled for eventual closure into the engine room for a growth-hungry coal business.

And while it’s a particularly stark example, it’s not the only one. When rival BHP Group was struggling to sell an Australian colliery this year, the company surprised investors by applying to extend mining at the site by another two decades — an apparent attempt to sweeten its appeal to potential buyers.

Now, after years of lobbying blue-chip companies to stop mining the most-polluting fuel, there’s a growing unease among climate activists and some investors that the policy many of them championed could lead to more coal being produced for longer. Senior mining executives say the message from their shareholders is evolving to acknowledge that risk, and they’re no longer pushing as hard for blanket withdrawals.

BHP may end up holding on to the Australian mine it was battling to sell, Bloomberg reported last week. Earlier this year, Glencore Plc sounded out a major climate investor group before announcing it would increase its ownership of a big Colombian coal mine, according to people familiar with the matter.

“Everyone in the industry is starting to be more sophisticated, more nuanced and more careful on the way they think these issues through,” said Nick Stansbury, head of climate solutions at Legal & General Group Plc.

THE PEOPLE OWN THE RESOURCES EXPROPRIATE

Who should own the world’s coal mines is a question that resources giants and their investors may be grappling with for years to come. At the global climate talks in Glasgow, world leaders have fallen short on the U.K. host’s ambition to “consign coal to history.” It continues to dominate the world’s electricity mix and energy shortages in Europe and China this year have only reinforced the message that the world remains deeply dependent on coal.

The campaign to force coal out of the hands of the biggest diversified miners kicked off about a decade ago, with limited success. That changed after some of the world’s most powerful investors, including Norway’s $1 trillion wealth fund and BlackRock Inc., began introducing policies to limit their exposure to coal.

By early 2020, pressure was mounting on Anglo American boss Mark Cutifani. He’d already watched rival Rio Tinto Group sell its last coal mines. BHP was looking at options to get out and even Glencore, coal’s biggest champion, had agreed to cap its production.

Cutifani’s original plan had been simple: it was increasingly unlikely that Anglo would invest more in its seven South African mines — which accounted for a fraction of its overall profits — and the company would ultimately close them when they ran out of coal over the next decade or so.

But for some investors that wasn’t soon enough.

The solution Anglo came up with was a spinoff company — Thungela Resources Ltd. — to be run by a senior Anglo executive, and handed over to its own shareholders.

The plan meant Anglo could get out of coal without having to cut any jobs in a country facing massive unemployment, and leave the mines in trusted hands until they were depleted. Anglo investors could decide for themselves whether to hold or sell the shares they received.

Yet within days, Chief Executive Officer July Ndlovu was laying out big ambitions for the company and its mines. Thungela was looking to grow, not shrink coal production, he said.

“I didn’t take up this role to close these mines, to close this business,” Ndlovu told Bloomberg at the time.

The company’s Zibulo, Mafube and Khwezela mines have the potential for extension to add at least another decade of mining and perhaps much longer, producing more than 10 million tons of coal a year.

Thungela’s creation has come at a time of great flux for the industry. As the global economy recovers from the pandemic, demand for electricity and the fuels used to produce it surged around the world, sending thermal coal prices to the highest on record.

That’s meant windfall profits for producers and their investors, making it more lucrative to keep digging as much as possible. Thungela’s shares have soared since its June initial public offering, although they’ve pulled back recently as coal prices eased.

With billions of dollars and hundreds of thousands of jobs at stake, the question has always been who — f not the publicly traded mining companies — should be running their collieries?

Companies like Anglo and BHP have long argued they are the most responsible operators, with deep pockets and sophisticated approaches to climate, the environmental impact of their operations and worker welfare. There is no guarantee new owners will act in the same way, or have the financial muscle to ride our volatile swings in commodity prices.

“Selling the problem to a third party has unintended consequences,” said Ashley Hamilton Claxton, the head of responsible investment at Royal London Asset Management, who argues that mining companies should hold onto fossil fuel assets and manage their decline. “We need to shift the debate in the investment industry about being more sophisticated around these things.”

It’s a theme that has played out elsewhere. Some observers of the oil industry say campaigns by activists to have oil majors divest from fossil fuels could end up accelerating a shift to government owners who operate with less transparency and, occasionally, worse environmental records.

In an attempt to fill the gap, other ventures have sprung up. Citigroup Inc. and Trafigura Group were one, pitching a coal-focused company to investors early this year, with the idea that it could snap up cheap mines and run them for cash — not growth — before eventually closing them.

But there’s also growing evidence that investors are changing their approach.

When BHP and Anglo wanted to sell their stakes in a big Colombian coal mine earlier this year, the third partner, Glencore, was the obvious buyer. In the past, a move to increase its exposure to coal might have drawn criticism from climate-focused investors. The company already agreed in 2019 to cap its coal production, under pressure from Climate Action 100+, an investor group with 545 members managing a combined $52 trillion of assets.

As Anglo and BHP pushed to sell the mine, Climate Action became a surprising behind-the-scenes sounding board for Glencore, according to people familiar with the matter. The group saw the transaction as a way of preventing any mine extensions or the asset being passed to a less responsible owner. Glencore agreed to further tighten its emissions-reduction goals as part of the deal.

While Climate Action has not spoken out publicly, the Colombian purchase was seen by many in the industry as further proof that investors’ positions have fundamentally changed.

Meanwhile, BHP, which has been planning an exit from thermal coal since at least mid-2019, has rejected multiple approaches for its Mt Arthur mine in Australia. The sale has dragged on as the pool of potential buyers dwindled and the offers it got were either too low or rejected because the company didn’t consider them responsible new owners.

Earlier this year, it emerged that BHP had applied to extend the mine’s life by almost 20 years. It didn’t take long for concerned investors to start asking why the company was preparing the mine to keep digging coal for longer.

Since then, pressure has mounted on BHP to u-turn on its exit strategy. Market Forces, which coordinates groups of shareholders on climate issues, has called on the company to abandon plans to sell out of fossil fuels, and instead responsibly close down the operations.

“The big push from investors is around ensuring that any divestment that occurs is to parties that are responsible,” BHP CEO Mike Henry said at the company’s shareholder meeting in October.

Now, the sale process appears to have stalled and the company could end up keeping Mr Arthur, after coal’s rally made the asset more valuable, and it’s no longer under as much pressure from some investors to sell, people familiar with the matter said.

Glencore, meanwhile, has promised to run its coal business to closure by 2050, which received overwhelming support from its shareholders, but it’s also prepared contingency plans to exit should investors force it. The developments of the past six months suggest that’s looking less likely.

“Divestment is convenient and easy to communicate,” said Hamilton Claxton. “Helping companies manage decline is difficult to do from an investment perspective and showing our customers that we’ve been effective is difficult to do.”

(By Thomas Biesheuvel, with assistance from David Stringer and Felix Njini)

Rio Tinto partners with nonprofit to support habitat restoration

MINING.com Editor | November 9, 2021 

Yandicoogina, the Pilbara, Western Australia. Image from Rio Tinto.

Rio Tinto has announced Tuesday it is partnering with RESOLVE, a Washington-based nonprofit, to launch Regeneration, a start-up that will use the re-mining and processing of waste from legacy mine sites to support rehabilitation activities and restore natural environments.


Regeneration will extract valuable minerals and metals from mine tailings, waste rock and water. Earnings from the sale of these responsibly-sourced materials will be reinvested to help fund habitat restoration and closure activities, including at legacy and former mine sites, Rio said in the media statement. Regeneration will also seek to create and trade biodiversity and carbon credits through the rehabilitation of land and the generation of environmental offsets.

The world’s second-largest miner has entered into a memorandum of understanding with RESOLVE to make an equity investment of $2 million in Regeneration and will also analyse its portfolio to identify potential opportunities for the first Regeneration project. The start-up has formed a founding board of directors and site review and selection is about to commence.

Regeneration will look to offer additional partnership, investment, and site-based opportunities for ethical investment companies and philanthropists, mining companies, mining and environmental professionals, downstream manufacturers and brands, technology innovators, governments, and communities.

“Regeneration aims to turn ores and waste from previously mined areas into positive outcomes both economically and environmentally,” said Rio’s global head of closure, Peter Harvey.

“It is an innovative and collaborative new vehicle to help effectively restore legacy mine sites and meet our closure commitments.”

Newmont, Caterpillar team up to reach zero emissions

Canadian Mining Journal Staff | November 10, 2021 

The control room for automated haulage at the Boddington gold-copper mine in Western Australia. Credit: Newmont.

Newmont (TSX: NGT; NYSE: NEM) and Caterpillar have teamed up to deliver a fully connected, automated, zero carbon emitting, end-to-end mining system. Together, they will collaborate to create a safer, more productive mine, and substantially support Newmont in reaching its 2030 greenhouse gas (GHG) emissions reduction targets of more than 30%, with an ultimate goal of being net zero carbon by 2050.


Building pathways to decarbonization is essential for the future of mining. Newmont’s surface and underground mining fleets are responsible for approximately 40% of the company’s carbon emissions. Building a new model for surface and underground mining is critical to delivering on Newmont’s emissions reduction targets.

Newmont will also be supporting Caterpillar’s validation of evolving features and functionality within the MineStar suite to be deployed across Newmont’s surface and underground assets globally. This deployment facilitates centralized production and asset management.

Under the agreement, Newmont plans to provide a preliminary investment of $100 million as the companies set initial automation and electrification goals for surface and underground mining infrastructures and haulage fleets at Newmont’s Cripple Creek and Victor mine in Colorado and the Tanami mine in Northern Territory, Australia.

An automated haulage fleet of up to 16 vehicles at Cripple Creek is planned through 2023, with a transition to haulage fleet electrification and implementation of Caterpillar’s advanced electrification and infrastructure system with delivery of a test fleet in 2026.

At Tanami, Caterpillar will develop its first battery electric zero emissions underground truck to be deployed by 2026. The deployment includes a fleet of up to 10 battery electric underground haul trucks, supported by Caterpillar’s advanced electrification and infrastructure system.

The new alliance sets the stage for the rapid development and deployment of the technologies, ultimately improving safety, productivity and energy efficiency across the mining industry.

(This article first appeared in the Canadian Mining Journal)

Greenland bans uranium mining, blocking vast rare earths project

Cecilia Jamasmie | November 10, 2021

The new government wants to promote Greenland as environmentally responsible. (Image courtesy of Greenland Travel.)

Greenland’s parliament has passed a bill to ban uranium mining and exploration in the Danish territory, effectively blocking the development of the vast Kvanefjeld rare earths project, one of the world’s biggest.


The project was being developed by Australia’s Greenland Minerals (ASX: GGG). It was granted preliminary approval in 2020 and was on track to gain the previous government’s final endorsement.

While the miner hasn’t issued a statement on the matter, its shares were placed on a trading halt on Wednesday, pending “the release of an announcement”. Trading will remain suspended until Friday morning or the publication of the company’s statement”, it said in a notice to the Australian Stock Exchange.

The decision to ban uranium mining and exploration follows through on a campaign promise from the ruling left-wing party elected in April, which had publicly stated its intention to block Kvanefjeld’s development, due to the presence of the silvery-gray, radioactive metal as a by-product.

The law, passed by parliament late on Tuesday, lines up with the new coalition government’s strategy to focus efforts on promoting Greenland as environmentally responsible.

It bans exploration of deposits with a uranium concentration higher than 100 parts per million (ppm), which is considered very low-grade by the World Nuclear Association.

The new regulation also includes the option of prohibiting exploration of other radioactive minerals, such as thorium.
Beyond fishing

Greenland, a vast autonomous arctic territory that belongs to Denmark, bases its economy on fishing and subsidies from the Danish government.

As a result of melting ice in the poles, miners have become increasingly interested in the mineral-rich island, which has become a hot prospect for miners. They are seeking anything from copper and titanium to platinum and rare earths, which are needed for electric vehicle motors and the so-called green revolution.

Greenland is currently home to two mines: one for anorthosite, whose deposits contain titanium, and one for rubies and pink sapphires.

Before the April election, the island had issued several exploration and mining licenses in a bid to diversify its economy and eventually realize its long-term goal of independence from Denmark.

Project location. (Image courtesy of Greenland Minerals.)

The US government recently extended an economic aid package to Greenland as part of the Joe Biden administration’s efforts to ensure the supply of critical minerals, particularly rare earths, from outside China.

Former president Donald Trump offered to buy the Arctic island to help address Chinese dominance of the rare earths market.

China accounts for almost 80% of the global mined supply of the elements used in everything from hi-tech electronics to military equipment.

AUSTRALIAN MINERS IN ONTARIO

BHP extends Noront bid deadline amid talks with Wyloo

Cecilia Jamasmie | November 10, 2021 |
The Eagle’s Nest nickel-copper-PGM project in northern Ontario’s Ring of Fire region.

 (Image courtesy of Noront Resources.)

BHP (ASX, LON, NYSE: BHP) has extended the deadline for Noront Resources’ (TSX-V: NOT) investors to accept or refuse its bid from November 16 to the end of the month, as talks with rival Wyloo Metals regarding the imminent takeover of the Canadian miner progress.


“BHP and Wyloo Metals have continued their conversations and are considering a mutually beneficial arrangement regarding the acquisition of Noront by BHP,” the world’s largest miner said in the statement.

It noted there is no guarantee at the time that an agreement with Australian billionaire Andrew Forrest’s Wyloo will be reached.

BHP last month sweetened its all-cash offer for Noront to C$0.75 per share, overtaking Wyloo’s C$0.70, which granted it the Toronto-based miner’s support.

At stake is Noront’s early-stage Eagle’s Nest nickel and copper deposit in the ‘Ring of Fire’ in northern Ontario. The asset has been billed by Wyloo as the largest high-grade nickel discovery in Canada since the Voisey’s Bay nickel find in the eastern province of Newfoundland and Labrador.

Eagle’s Nest is expected to begin commercial production in 2026 with the mine running initially for 11 years.

The mine’s start date has repeatedly been pushed back by Noront due to successive federal and provincial governments’ inability to consult and reach a unanimous agreement with First Nations in the area.
Nickel fever

The tug of war between the two Australian companies is the latest evidence of the rush global miners are in to secure supply of battery metals ahead of an imminent surge in demand for electric vehicles.

Nickel production would need to increase nearly fourfold to meet expected demand for electric and hybrid vehicles, the company estimates. Likewise, copper output would also need to grow exponentially to meet demand from renewable power generation, battery storage, electric vehicles, charging stations and related grid infrastructure.

Tesla boss Elon Musk has expressed worries about a looming nickel shortage. He pleaded with miners last year to produce more nickel, promising a “giant contract” for supply produced efficiently and in an “environmentally sensitive way.”

Last month, the US EV giant inked a multi-year nickel supply deal with New Caledonia’s Prony Resources. The contract guarantees it about 42,000 tonnes of the metal needed to produce the batteries that power its EVs.

Tesla also has a similar agreement with BHP.

King sinks Impala plan to create world’s no. 1 platinum firm

Bloomberg News | November 10, 2021 

King Kgosi Leruo Molotlegi. Credit: Facebook

Impala Platinum Holdings Ltd.’s decade-long quest to buy a smaller rival that owns assets key to prolonging the life of its own mines in South Africa came to a shuddering halt on Tuesday.


Chief Executive Officer Nico Muller thought he finally had a deal to acquire 100% of Royal Bafokeng Platinum Ltd., after gaining the backing of the company’s management and board. Implats, as the miner is known, was preparing to make an offer this week after announcing it was in talks on Oct. 27, according to people familiar with the matter.

But a 4.1% gain on Monday in RBPlat — which was until then mirroring Implats’ share moves since the announcement — aroused suspicions that a rival was circling, the people said, asking not to be identified as the details are private.

The company’s fears were realized on Tuesday morning, when Northam Platinum Holdings Ltd. said it was buying a 32.8% stake in RBPlat, potentially blocking Implats’ at least sixth attempt to acquire the company. RBPlat’s biggest shareholder Royal Bafokeng Holdings — the investment arm of the Bafokeng nation that’s led by King Kgosi Leruo Molotlegi and his advisers — switched sides at the last minute to back a bid for its stake from Northam.

While Northam’s 17 billion-rand ($1.1 billion) offer is a 90% premium to where RBPlat was trading when Implats announced talks last month, it excludes minority investors.

“The tragedy of this outcome is that just about everyone is a loser,” said Shane Watkins, chief investment officer for All Weather Capital Ltd., which holds shares in all three companies. “RBPlat minorities are losers because there is now no offer for the minorities. Even the seller, the Royal Bafokeng Holdings might be losers in time because a large part of the consideration is in Northam shares, the price of which are falling quickly.”

Northam edged 1.4% lower in Johannesburg on Wednesday, after plunging 15% yesterday. RBPlat gained 2.1%, erasing most of Tuesday’s loss.

Since being thwarted in its 2010 attempt to acquire RBPlat by rival Anglo American Platinum Ltd. — a key shareholder at the time — Implats has been patient in its pursuit. The prize was worth waiting for: low-cost, mechanized assets that offered synergies with its nearby but aging deep-level mines in Rustenburg. Two weeks ago Implats was finally nearing a deal that would have seen it overtake both Anglo Platinum and Sibanye Stillwater Ltd. to become the No. 1 platinum miner.

King switch

Muller was preparing a cash and share offer with a 35% to 37% premium to where RBPlat shares were trading before the talks were announced, said the people. That equates to about 130 rand a share, significantly below Northam’s last-minute bid of 180.50 rand in cash and shares.

While initially supporting the Implats approach, the Bafokeng king and supreme council agreed on Monday to back the bid from Northam. That deal was completed in a day, two of the people said.

Royal Bafokeng Holdings wanted to maximize value “both in terms of the price and cash consideration,” CEO Albertinah Kekana said. “This transaction both advances and accelerates the Royal Bafokeng Holding’s economic ambitions, but also supports direct community interventions,” she said.

The Bafokeng nation, a community of people in South Africa’s North West Province, owned about 29 billion rand of assets in 2020, including some of the world’s richest platinum deposits.
Unexpected turn

RBPlat was blindsided. This turn of events is “unexpected” and “the reasons are best known to” Royal Bafokeng Holding, said spokeswoman Lindiwe Montshiwagae, who declined to speculate on why the company’s biggest investor changed tack.

The deal furthers the growth ambitions of Northam CEO Paul Dunne, with the company saying the RBPlat stake provides a “strategic platform” for a possible combination of the two miners in the medium term.

However, Dominic O’Kane, an analyst at JPMorgan Chase & Co., said the mining synergies with RBPlat are “negligible,” and Northam’s deal has less compelling strategic merits than an Implats-RBPlats merger. “Given the lack of tangible value creation opportunities for Northam shareholders, this optically appears to be expensive portfolio management,” he said.

Leon Van Schalkwyk, a spokesman for Northam, didn’t respond to calls and an email seeking comment. Implats will no longer be “pursuing the transaction,” the company said in a statement on Tuesday.

(By Felix Njini and Loni Prinsloo, with assistance from Sanjit Das)

First Cobalt to expand Ontario refinery and widen focus, plans name change

Canadian Mining Journal Staff | November 10, 2021

Filter presses installed at the First Cobalt refinery. Credit: Electra Battery Materials (First Cobalt)

First Cobalt (TSXV: FCC) wants to increase the design capacity of its hydrometallurgical cobalt refinery in Cobalt, Ontario, to 6,500 tonnes of cobalt annually from 5,000 tonnes. The decision was made due to a strong demand for battery-grade cobalt and client feedback, the company said.


The company has also announced a name change to Electra Battery Materials — pending shareholder approval — reflecting its plan to deliver nickel sulphate to the battery market and to recycle lithium-ion batteries, in addition to producing cobalt.

To reach the targeted cobalt refinery capacity, the company will invest in additional capacity for the crystallizer circuit. The extra equipment will raise the capital budget to C$67 million from C$60 million. Ground work has begun on the new solvent extraction facility and contracts have been awarded for the foundations and building construction. First Cobalt says construction remains on schedule for commissioning in the fourth quarter of 2022.

The refinery expansion is part of the company’s four-phase strategy to create a Battery Materials Park in the region. The completion of the refinery will mark the end of the first phase.

The second phase involves the recycling of material from the anode and cathode of batteries to recovery lithium, nickel, cobalt, copper and graphite. A scoping study is nearing completion on how to accomplish this using the existing equipment in the plant from historic operations. A demonstration plant could be commissioned in 2022 and a commercial facility in 2023.

For phase three, First Cobalt plants to build a modular nickel sulphate plant with an initial capacity of 60,000 tonnes of nickel. A study is underway to evaluate the opportunities for such a plant in North America. The company could source its nickel from northern Ontario producers.

The fourth phase involves building a battery precursor materials plant in 2025, likely with a joint venture partner says Electra. Locating this plant near regional nickel and cobalt sulphate production could be a major saving in the battery value chain.

There would no longer be a need to crystallize the nickel sulphate prior to shipment, an operational cost saving of between 4% and 5%. More saving would be realized through reduced logistics costs, which also lowers the carbon footprint of cathode materials.

(This article first appeared in the Canadian Mining Journal)