Wednesday, March 27, 2024

Investigators To Examine Whether Dirty Fuel Caused Baltimore Bridge Crash

A safety probe into a Baltimore bridge collapse will determine whether contaminated fuel played a part in the accident whereby a giant ship lost power and crashed into the bridge forcing it to collapse. 

Early investigations suggest that the Singapore-flagged Dali cargo ship was setting off from the Port of Baltimore to Colombo, Sri Lanka, when it apparently lost power and crashed into a support pillar of the Francis Scott Key Bridge. 

The lights on the Dali, a 948-foot-long container ship capable of carrying 95,000 tonnes of cargo, began to flicker about an hour into the trip, prompting a harbor pilot and assistant to report power issues and a loss of propulsion. 

The bridge collapsed on impact and tumbled into the Patapsco River, with the crew managing to send a last-minute mayday call to the police just in time to stop traffic. Emergency responders rescued two people from the water while another six remain missing.

An oil executive has told Fox News there’s some validity to reports that contaminated fuel potentially caused the ship’s engine failure and triggered the accident.

"It's just stealing money, the companies selling them. If nobody's watching closely enough, they'll give them contaminated fuel,United Refining Company CEO John Catsimatidis said in response to a contributor asking how the dirty fuel could get onto the ship. 

"Contaminated fuel is being sold to the [New York] schools and sold to the MTA when the MTA or the schools are not watching closely enough. You know, you give them 80 percent real fuel and 20 percent garbage. And the FBI should be looking into that," he added. 

Supply chain management company Flexport has warned of a vicious feedback loop and supply chain disruptions following the collapse of the Baltimore Bridge.

“It’s not just the port of Baltimore that’s going to be impacted,” Ryan Petersen, the company’s CEO has said. According to Petersen, the port’s closure in Baltimore, Maryland, was just one factor that will contribute to shipping delays.

By Alex Kimani for Oilprice.com


Baltimore's freak bridge collapse reverberates from cars to coal

The Dali container vessel after it struck the Francis Scott Key Bridge that collapsed into the Patapsco River in Baltimore, on March 26.

The 1.6 mile-long bridge collapsed in a matter of seconds. The catastrophic consequences are set to stretch out for weeks. 

As much as 2.5 million tons of coal, hundreds of cars made by Ford Motor Co. and General Motors Co., and lumber and gypsum are threatened with disruption after the container ship Dali slammed into and brought down Baltimore’s Francis Scott Key Bridge in the early hours of Tuesday. 

Six people were presumed dead after a search in the Patapsco River, officials said Tuesday evening. The toll could have been worse except for a mayday call from the Singaporean-flagged vessel as it lost power. 

U.S. National Transportation Safety Board Chair Jennifer Homendy said investigators were able to board the Dali Tuesday night to inspect the ship’s bridge, electronics and documentation.

“We do have the data record, which is essentially the ‘black box,’” Homendy said in an interview with CNN. “We’ve sent that back to our lab to evaluate and begin to develop a timeline of events that led up to the strike on the bridge.” 


She added that investigators should have information from the vessel’s black box later on Wednesday.

The aftermath of the bridge’s collapse throws another spotlight on the fragile nature of global supply chains that have already been strained by drought in Panama and missile attacks on Red Sea shipping by Yemen-based Houthi militants. Docks in New Jersey and Virginia face the threat of being overwhelmed by traffic that’s being forced away from Baltimore, one of the busiest ports on the U.S. East Coast. 

“It’s a large port with a lot of flow through it, so it’s going to have an impact,” John Lawler, Ford’s chief financial officer, told Bloomberg TV. “We’ll work on the workarounds. We’ll have to divert parts to other ports along the East Coast or elsewhere in the country.”

Baltimore only handled about three per cent of all East Coast and Gulf Coast imports in the year through Jan. 31, said S&P Global Market Intelligence. But it’s crucial to cars and light trucks, with European carmakers such as Mercedes-Benz Group AG, Volkswagen AG and BMW operating facilities in and around the port. It’s also the second-largest terminal for U.S. exports of coal, with a shutdown potentially hitting shipments to India.   

About a dozen large vessels are stuck inside Baltimore’s harbour as well as a similar number of tug boats, according to IHS Markit and Wood Mackenzie’s Genscape. The list includes cargo ships, automobile carriers and a tanker named the Palanca Rio. 

Embedded Image

That’s just the impact on the port. 

About 35,000 people used the bridge every day. The annual value of goods going over is about US$28 billion, according to the American Trucking Associations. 

“We rely on our infrastructure systems for our daily needs, for a huge amount of the goods that we get in the United States from overseas and to have it cut off so suddenly, it’s a huge crisis,” said Yonah Freemark, a researcher at the Urban Institute.

The Francis Scott Key Bridge, named for the man who wrote the text of the Star-Spangled Banner, took five years to build and was completed in 1977. The cost at the time was around $141 million, according to one estimate. A rebuild today is likely to cost “several billion dollars,” said Freemark. 

President Joe Biden said he wants the federal government to pay and vowed “to move heaven and earth to reopen the port and rebuild the bridge.” 


But Baltimore is in for a lengthy reconstruction. It could be weeks before any port operations resume as officials need to remove bridge debris and the 984-foot Dali from the river. 

That’s expected to accelerate a shift of cargo to the U.S. West Coast to avoid bottlenecks from Boston to Miami. A sudden 10 to 20 per cent increase in volumes through a port is enough to cause massive backlogs and congestion, according to Ryan Petersen, the founder and chief executive officer of Flexport Inc., a digital freight platform based in San Francisco.

Trade hub

Traversing Maryland, meanwhile, threatens to create headaches for motorists and truckers. A trip from Edgemere heading south to Glen Burnie was about 15 miles (24 kilometers) over the bridge. It’s 20 miles via the Baltimore Harbor Tunnel. The trip will be even tougher for truckers hauling hazardous materials, which are barred from the tunnel. They’d have to travel 45 miles on the Baltimore Beltway.

The biggest hit though could be to Baltimore itself, a city of close to 600,000 people whose stagnation and high-poverty neighborhoods were made famous by television show The Wire.

The bridge helped connect major parts of Baltimore and was key to its renaissance as a logistics and e-commerce hub after the shuttering of its steel industry. With its deep-water port, shortline railway and well-located interstate highway, the city attracted investors who have been pouring money into redevelopment. 

One of the largest projects, Tradepoint Atlantic, has leased millions of square feet in warehouse space to some of the world’s biggest businesses, including Amazon.com Inc. and FedEx Corp.

Facing months of uncertainty, Baltimore and Maryland both declared a state of emergency. 

Throughout the morning on Tuesday, crowds gathered in east Baltimore County, camping out in grassy spots or climbing highway guardrails to get a better look of the bridge and snap photos. Across the street from a Dollar General on Dundalk Avenue, residents discussed the roar of the structure collapsing, comparing it to a jet engine during takeoff.

Not far from the collapsed bridge, police changed shifts at the dock of the Hard Yacht Cafe in Dundalk. Officers getting off their boat had been circling the waters as part of the rescue effort for more than 10 hours, they said, adding that divers were searching for remaining victims in the water when they left the scene. 

“This is one of the cathedrals of American infrastructure,” said U.S. Transportation Secretary Pete Buttigieg. “The path to normalcy will not be easy, it will not be quick, it will not be inexpensive, but we will rebuild together.”


After Bridge Tragedy, One Baltimore Cargo Terminal is Still Open

Tradepoint atlantic
File image courtesy Tradepoint Atlantic

PUBLISHED MAR 27, 2024 3:02 PM BY THE MARITIME EXECUTIVE

 

The tragic collapse of Baltimore's Key Bridge has put a new spotlight on Tradepoint Atlantic, the logistics complex located on the former Bethlehem Steel site. Unlike Baltimore's inner harbor, Tradepoint is seaward of the bridge's wreckage, and it is one of the few parts of the city's waterfront still open to deep-sea traffic. 

In a statement, the terminal's operator said that it was working closely with officials as the emergency response proceeds. 

"Tradepoint Atlantic has been in constant contact with emergency response officials and leaders from Baltimore City, Baltimore County, and the State of Maryland and will continue to coordinate during this extremely challenging situation," the company said. "As part of the Port of Baltimore, we are committed to helping our state and local partners and the entire port community recover and rebuild from this tragedy."

Tradepoint is a receiving terminal for ro/ro vessels in the Baltimore area, and this is a core part of the Port of Baltimore's trade. The port vies with Brunswick, Georgia for the title of biggest ro/ro port in America - but the vast car terminals and parking lots on the far side of the bridge are currently inaccessible. Carmakers Volkswagen and BMW, which both have receiving facilities at Tradepoint Atlantic, have both said that their Baltimore operations are unaffected by the bridge collapse. 

The site's importance is only set to grow in years to come. Tradepoint is working with MSC and TIL to build a container terminal at Sparrows Point, which would increase Baltimore's capacity to handle containerized cargo by 70 percent. Subject to federal approval for dredging, it could be open as soon as 2027. 

In the meantime, multiple seaports up and down the East Coast have said that they stand ready to absorb the extra cargo volume from Baltimore. The additional cargo per port is not expected to rival the peak surge levels seen during the late-pandemic import boom. The Port of Virginia, which is just 125 nautical miles to the south of Baltimore, has been investing heavily in expansion and is expected to pick up a substantial share of the slack.  

“I don’t think we’ll have a large impact in terms of logistics and shipping moving forward. There might be snafus over the next couple days while issues are being worked through, but I think they’ll be able to overcome that pretty quickly,” said Brent Howard, president of the Baltimore County Chamber of Commerce, speaking to The Hill. 


Bill Doyle Comments on Cargo Ship M/V Dali Allision in Port of Baltimore

William Doyle

PUBLISHED MAR 27, 2024 3:15 PM BY THE MARITIME EXECUTIVE

 

Special News Feature: Bill Doyle provides insight into the M/V Dali's allision with the Francis Scott Key Bridge. While federal, state and local authorities are on the scene, there is growing speculation about the vessel’s condition and fuel supply.

 

The 984-foot container ship was transiting the harbor at nine knots when it struck the bridge, and the circumstances of the accident are still under investigation. The ship is owned by Grace Ocean and is registered in Singapore and managed by Synergy Marine.

 

Six people who were on the bridge are missing and presumed dead. Two others were rescued from the water. Authorities say the eight construction workers were repairing potholes on the bridge. There were 22 Indian nationals and two local pilots aboard the cargo ship. 

 



Multiple Vessels Trapped in Baltimore, Including Sealift Ships

SS Denebola and SS Antares, Baltimore, 2013 (EllenM1 / CC BY)
Fast Sealift Ships SS Denebola and SS Antares, Baltimore, 2013 (EllenM1 / CC BY)

PUBLISHED MAR 27, 2024 5:26 PM BY THE MARITIME EXECUTIVE

 

As federal and local authorities focus on the emergency response to the collapse of Baltimore's Francis Scott Key Bridge, Port of Baltimore's inner harbor remains cut off from the rest of the world. No vessels can get in to deliver Baltimore's core cargoes - containers, cars, gypsum and sugar - and no vessels can get out. 

The latter fact will be of particular interest for shipowners who have vessels inside the harbor. These include one car carrier, the Swedish-flagged Carmen; four bulkers, the Klara Oldendorff, Balsa 94, Saimaagracht and JY River; and four laid-up ships belonging to the Maritime Administration's Ready Reserve (RRF), the Cape Washington, Gary I. Gordon, SS Antares and SS Denebola. 

The Biden administration has restoration of the navigation channel at the top of its list of priorities, Secretary of Transportation Pete Buttigieg said Wednesday. 

"We can't wait for the bridge work to be complete to see that channel reopened. There are vessels that are stuck inside right now and there's an enormous amount of traffic that goes through there. That's really important to the entire economy," he told NPR in an interview. 

The closure's effect on four RRF vessels could have potential implications for emergency sealift preparedness. The RRF's vessels are kept in reduced operating status at multiple sites around the nation, and the shutdown of any one port would not affect the service's ability to mobilize transport options for most overseas contingencies. 

However, two of the vessels in Baltimore are high-value assets - the steamships SS Antares and SS Denebola. These are two out of eight Fast Sealift Ships - a class of SeaLand boxships that were converted for military ro/ro service in the 1980s. They are among the fastest cargo ships in operation today, and their peak speed tops out at 33 knots. 

The eight FSS vessels have delivered goods for every major U.S. conflict since the First Gulf War; however, these powerful steamships are 50 years old, and each ship's ability to get under way is not known. The RRF has acknowledged issues with its aging tonnage, and commercially-obsolete steam plants are particularly challenging for MARAD to man and maintain.


Old Lessons May Haunt Baltimore Bridge Tragedy

Two standards for bridge protection: the missing span of the old Sunshine Skyway Bridge, left, and the new span with dolphins, right (Apelbaum / CC BY)
Two standards for bridge protection: the missing span of the old Sunshine Skyway Bridge, left, and the new span with dolphins, right (Apelbaum / CC BY)

PUBLISHED MAR 26, 2024 8:49 PM BY THE MARITIME EXECUTIVE

 

 

For observers who have been in shipping long enough, Wednesday's disastrous bridge collapse in Baltimore brought to mind lessons learned in 1980, when the freighter Summit Venture struck and destroyed half of Tampa's Sunshine Skyway bridge. 35 people died in that disaster, prompting a decade-long rethink of highway bridge design. The Skyway Bridge was rebuilt with a fortress of protective concrete dolphins - but it is unclear whether Baltimore's Francis Scott Key Bridge was updated to meet a similar standard before it was hit by the boxship Dali on Wednesday morning.

Baltimore's Key Bridge opened in 1977, three years before the Skyway Bridge disaster (and two years after a similar casualty in Tasmania). Based on visual evidence, the Key Bridge had one small dolphin on each side of the central span's piers, intended either for scour protection or for defending against allisions. When the container ship Dali approached early Wednesday morning, the vessel appeared to pass by the dolphin and strike the pier directly with her starboard bow. 

“Maybe [the dolphin] would stop a ferry or something like that,” consulting engineer Donald Dusenberry told the New York Times. “Not a massive, oceangoing cargo ship.”

Tampa-area attorney Steven Yerrid was involved in the response to the Skyway Bridge disaster in 1980, and he told local media that when he saw the fendering system on the Key Bridge, it looked all too familiar.  "I felt not only shock, but extreme sadness, because I knew other people had to unnecessarily lose their lives to learn a lesson that was taught 44 years ago," Yarrid told Tampa's Fox 13.  

The Skyway Bridge's lessons were written down and codified by AASHTO, America's highway standards body, in 1991. The rules laid out protection requirements for newly-built bridges and guidance for retrofitting old structures. Risks still remained: in 2002, a barge tow hit a pier on the I-40 bridge in Webbers Falls, Oklahoma, destroying the span and killing 14 people. Only the upstream side of the I-40 bridge had structures to protect it from barge traffic - but the casualty vessel approached from the other direction. 

For many engineers, the fact that a landmark structure like the Key Bridge could still be felled by marine traffic is a call to action. "As a matter of principle, when there is a bridge pier in a shipping channel we should expect the bridge to be strong enough to withstand impact or to be protected from impact," structural engineer Shankar Nair told the Baltimore Banner. 

If the Key Bridge incident ends up in court - as it almost certainly will - the degree of protection around the bridge pier could come up, says José R. Cot, an experienced maritime litigation and insurance attorney at McGlinchey Stafford. Admiralty law presumes that the moving vessel is at fault in an allision, but this can be contested, and the shipowner could argue that the damage would not have been as serious if the pier had had better protection. 

"Yes, it could be raised whether it should have been better protected," Cot says. "There has been a historical interest in making fender systems a lot more robust, such that if you have these types of allisions - which are bound to happen - that they do not damage the bridge structure itself. I do think that those representing the vessel interest would probably raise that."

Top image: Sunshine Skyway Bridge, 2007 (Apelbaum / CC BY SA 3.0)

IRONY

PetroChina Aims to Power All Its Output With Clean Energy by 2033

Chinese state oil and gas giant PetroChina plans to power all its drilling and refining activities with clean power by 2033 and to install massive renewable energy capacity this year.    

The Chinese firm is pledging to boost renewables operations just when international oil majors have started to walk back on some of their clean energy ambitions.

Shell, for example, reaffirmed earlier this month its ambitions to be a net-zero energy business by 2050 but eased its carbon intensity target for 2030 as it has shifted away from clean power sales to retail customers.

In contrast, PetroChina pledges to install as much as 30 gigawatts (GW) of renewable energy capacity this year, company executives said in an earnings press briefing on Wednesday, as carried by Bloomberg.

PetroChina also plans to invest in hydrogen production, carbon capture, and geothermal energy, executives said.

The state energy giant’s target now is that “all drilling and refining activities will be powered by clean energy” by 2033, chairman Dai Houliang said at the briefing. That’s much earlier than initial plans to have green energy power all operations by 2050.

Earlier this week, PetroChina reported a record-high profit for 2023, despite the drop in international oil and gas prices. The oil and gas giant benefited from a rebound in Chinese natural gas demand and rising domestic fuel sales. PetroChina’s natural gas sales in China rose by 6.1% year-on-year, while the operating profit from the natural gas business tripled.

Last year, Chinese natural gas and LNG demand rebounded from 2022, when the world’s top LNG importer was still under COVID-related lockdowns that were weighing on household and business consumption of all energy products. 

Total revenues for PetroChina, however, slumped by 7% in 2023 compared to 2022, amid lower international oil and gas prices, which affected the upstream earnings. But in terms of company net profit, the downstream business more than offset the impact of the weaker oil and gas prices.

By Charles Kennedy for Oilprice.com

WORKERS KAPITAL

Netherlands’ $900 Billion Pension Funds Ready to Invest Big in Renewables

The Netherlands' five largest pension funds have said they are willing to invest billions in the country’s renewable energy sector and the electricity grid. The funds, with a combined 900 billion euros ($975 billion) in assets, have offered to help with finances and expertise in the nation’s electric grid expansion and sustainable heating projects.

"We want to make a bigger impact, we can and want to invest more in the Dutch energy transition," the funds said in a letter addressed to the country’s political parties looking to form the next government.

Pension funds across the globe are becoming increasingly engaged in the clean energy transition and frequently oppose the fossil fuel sector. 

Four years ago, New York City’s Mayor Bill de Blasio and former Comptroller Scott M. Stringer announced that the city’s $226B pension fund would divest the majority of its fossil fuel investments and cut ties with other companies that have been contributing to global warming. 

New York State officials are yet to make a final decision whether to sell their $1 billion in investments in major U.S. oil and gas companies, including Exxon Mobil Corp. (NYSE:XOM) and Chevron Corp. (NYSE:CVX) in what could be one of the biggest divestment drives by a pension fund. The fund has already sold off most assets in coal and Canada’s oil sands, although it still holds its  $1.5 million investment in Arch Resources (NYSE:ARCH), the second largest U.S. coal producer.

Last year, Norway’s largest pensions manager, KLP,  blacklisted Gulf companies listed in the United Arab Emirates, Saudi Arabia, Qatar and Kuwait due to  human rights violations and also divested from Saudi Aramco due to climate risks

Meanwhile, last year, Norway’s giant sovereign wealth fund supported proposals by ExxonMobil and Chevron shareholders at their annual general meeting to introduce emissions targets.

With $1.4 trillion in assets, Norway's wealth fund is the largest in the world, and the sixth-largest investor in Exxon with a nearly 1.2% stake.

By Alex Kimani for Oilprice.com


EU Banks shying away from fossil fuels bolster private credit deals

Bloomberg News | March 26, 2024 |

Stock image.

Private credit managers are doing significantly more fossil-fuel deals now than just a few years ago, as they step into a void left by banks exiting assets they worry pose too big a climate risk.


The value of private credit deals in the oil and gas industry topped $9 billion in the 24 months through 2023, up from $450 million arranged in the preceding two years, according to data provided by Preqin, an analytics company that tracks the alternative investment industry. That’s based on the limited pool of deals reported publicly or disclosed directly to Preqin.

The figures offer the clearest signal yet that fossil-fuel exclusion policies among banks — driven by regulatory and reputational concerns — are shifting some oil, gas and coal assets to less transparent corners of the market. It’s a trend that investors say is only going to increase in the coming years.

The expectation is that some banks “will just exit” the loans market for coal, oil and even gas, said Ryan Dunfield, chief executive officer of SAF Group, one of the largest alternative lenders in Canada’s energy sector.

The shift is particularly pronounced among banks based in Europe, where climate regulations are stricter than in other jurisdictions. Lenders stepping up restrictions on fossil-fuel loans include BNP Paribas SA and ING Group NV. The trend is hardest felt by less diversified mid-sized companies with weaker environmental, social and governance policies, according to Dunfield.

European banks that used to be involved in financing oil and gas in SAF’s home market of Canada “have backed out over the past five years,” Dunfield said. Combined with a partial retreat by some US banks, the development has left a financing gap, he said.

Canada is “a very progressive country,” but “a big part of our GDP comes from energy,” Dunfield said. As a result, the “economic engine conflicts with public policy in that sense.”

For companies shifting from banks to private credit, the cost can be considerable. Sydney-based Whitehaven Coal Ltd., whose recent efforts to secure a $1.1 billion loan attracted 17 private credit lenders and just one bank, is paying 650 basis points, or 6.5 percentage points, over the so-called secured overnight financing rate, Bloomberg News reported last week.

The wider development has meaningful implications for everything from credit risk to climate change. From a climate perspective, the riskiest assets are becoming harder to track because their owners aren’t subject to the same disclosure requirements as banks. From a credit perspective, it’s not clear how tougher climate regulations will affect the valuations of high-carbon assets in the years ahead.

Some banks are looking into models that might allow them to shoehorn high-carbon assets into their ESG strategies. HSBC Holdings Plc and Standard Chartered Plc are among lenders currently exploring so-called transition credits. Such financial instruments would be issued by the owners of coal plants to generate the funds needed to cover the cost of closing down operations early.



Other models currently being explored include capital-relief products. Both SAF and Newmarket Capital, a Philadelphia-based alternative asset manager that specializes in structured credit, are pitching so-called emissions-weighted risk transfers to banks. These would see banks packaging and offloading the emissions associated with their loans to third-party investors who aren’t subject to the same climate regulations or scrutiny.

However, such examples of financial engineering have already drawn skepticism from climate activists, who warn they’d do little to actually cut greenhouse gas emissions. Others drew parallels to the kinds of products that are now associated with financial meltdowns.

“Surely the world has learned something” from the global financial crisis of 2008, Simone Utermarck, senior director of sustainable finance at the International Capital Market Association, said in a post on Linkedin.

In the meantime, private credit investors are positioning for more banks to back away from high-carbon clients. A few years ago, SAF launched a C$750 million direct-lending fund for energy companies in Canada. It now has about C$2 billion in capital allocated to the sector, with loan commitments typically ranging from C$20 million to C$250 million for maturities ranging from two to five years.

“We come in and provide incremental capital,” Dunfield said. If banks drop out of group-lending vehicles, SAF can “come in and plug a hole.”

(By Natasha White)
Ferrexpo hit with corporate rights restrictions for Ukraine subsidiaries

Reuters | March 26, 2024 | 

Ferrexpo’s FPM mine. (Image courtesy of Ferrexpo)

Iron ore pellet producer Ferrexpo said a court has prohibited the transfer of ownership and other shares-related corporate rights of the company’s subsidiaries in Ukraine.


“It is understood that the restrictions are part of an ongoing series of legal proceedings against Kostyantin Zhevago relating to Bank Finance & Credit and are not related to the Ferrexpo Group,” the London-listed miner said on Tuesday.


Why it’s important


Ukrainian billionaire Zhevago, Ferrexpo’s biggest shareholder, has been facing legal challenges amid Ukraine’s efforts to clamp down on corruption, which is vital to meet the conditions for joining the European Union, despite Russia’s full-scale invasion.

Context

Zhevago in January won a bid to throw out a London lawsuit over allegations he embezzled money from the now bankrupt lender Finance & Credit Bank.

Ukrainian prosecutors have also taken action in the Ukrainian courts against Zhevago and frozen shares held by Ferrexpo, in its three Ukrainian subsidiaries.

The restrictions announced on Tuesday are separate to those under the share freezes, Ferrexpo said.

The response

Ukraine-focussed Ferrexpo said it has “no intention, and never has had any intention of transferring shares in its subsidiaries”.

Zhevago, who is also facing legal proceedings related to Finance & Credit Bank in which he had a 95% indirect shareholding before its 2015 collapse, has repeatedly denied any wrongdoing.

What’s next


Ferrexpo said it was currently analyzing the potential legal and other remedies available and intends to “vigorously defend its rights”.

(By Yadarisa Shabong; Editing by Shounak Dasgupta)


Dynasty Gold used slave labour in China, Canada watchdog says

A Canadian watchdog is calling for penalties against Dynasty Gold Corp. after it concluded the company used forced labor at its Chinese mine, which the miner denies. 

The Canada Ombudsperson for Responsible Enterprise, an arm of the federal government that investigates possible human rights abuses by companies, conducted a review of the Hatu mine in the Xinjiang region after a coalition of 28 Canadian organizations filed complaints alleging human rights abuses. 

China has come under international pressure for subjecting Uyghurs, a Muslim minority, to forced labor in detention centers and transfer programs that remove Uyghurs from their homes in rural areas to work in factories in urban areas.

The watchdog said it has evidence based of pervasive use of forced labor among Uyghurs as well as an admission by Dynasty’s joint venture partners of their involvement. Dynasty owns a majority stake in the mine through a subsidiary, according to the watchdog. 

In an email, Dynasty Chief Executive Officer Ivy Chong said the report is “full of errors and inaccuracies” and is “totally absurd.”


“Dynasty has no operation in China since 2008,” said Chong. “Dynasty has never conducted mining in the Hatu mine. It was an exploration operation from 2004 to 2008, there was no report of forced labor at that time.” 

Sheri Meyerhoffer, the ombudsman, is calling on Canada’s trade minister to refrain from supporting the company in international disputes and ban it from receiving financial support from the country’s export-credit agency. 

“There is clear evidence that Uyghur forced labor was used at the Hatu gold mine,” said Meyerhoffer. “Like all Canadian companies operating outside Canada, Dynasty has a responsibility to respect human rights. In this case, Dynasty failed to operate responsibly.”

The watchdog said Dynasty and its senior officers declined to participate in the investigation


Canada watchdog says human rights abuses

likely occurred at a Dynasty Gold mine in

China


Reuters | March 26, 2024 | 

Credit: Dynasty Gold Corp.

Canada’s corporate ethics watchdog on Tuesday said it was likely that human rights abuses of using Uyghur forced labor had occurred at a mine in China operated by Vancouver-based firm Dynasty Gold.


In a report, the Canadian Ombudsperson for Responsible Enterprise (CORE) recommended the federal government refuse to provide any future financial support to Dynasty until it implemented recommendations to combat abuse.

Dynasty Gold told Reuters that the report is full of errors and inaccuracies.

The report by CORE is a result of an investigation over complaints filed by 28 Canadian organizations who alleged that Dynasty Gold used or benefited from Uyghur forced labor at the Hatu mining operations that took place in 2017, 2019 and 2020.

In its final report the watchdog concluded that Dynasty contributed to the use of forced labor through its relationship with its joint venture partners Xinjiang Non-Ferrous Metal and Western Region Gold. These two companies had relationship with another company called Terraxin in which CORE said Dynasty is a majority shareholder.

Ivy Chong, CEO of Dynasty Gold, told Reuters that CORE decided to publish the report without providing any evidence to support the claims, even though the company repeatedly explained the situation and the timeline of the events.

However, Chong said the joint venture company (Terraxin) in Xinjiang lost its exploration license in 2008 and business license shortly thereafter. And there has not been any relationship between Dynasty and the State-owned Xinjiang companies since 2008.

A report by the UN human rights chief in 2022 said that China’s treatment of Uyghurs, a mainly Muslim ethnic minority that numbers around 10 million in Xinjiang, in the country’s far west, may constitute crimes against humanity.

Beijing has denied these allegations.

CORE said Dynasty Gold did nothing to identify, assess, and mitigate the risk of Uyghur forced labor at the mine, which led to the watchdog to reach its conclusion.

The watchdog has asked Dynasty to make significant financial donations to organizations working to combat Uyghur forced labour, assess its leverage to prevent or mitigate use of forced labour at Hatu mine and determine whether it should exit responsibly from its business relationships in the Xinjiang region.

Dynasty shares were up 3.7%.

(By Divya Rajagopal and David Ljunggren; Editing by Sandra Maler)

Chinese miners eye overseas deals after battery metals slump

Bloomberg News | March 26, 2024 |  

Workers at Zijin facility (Credit: Metso)

Battery metal prices are on the floor, and massive expansions by Chinese miners have been instrumental in driving them lower. Now, with many Western rivals cutting output or shutting down entirely, they want to get even bigger.


Zijin Mining Group Co., China’s most valuable producer, said this week it’s planning acquisitions of “ultra-large mines or mining companies with global influence” to boost business in lithium and other metals.

CMOC Group, which last year overtook Glencore as the world’s top cobalt producer, said the return of “rational” pricing in battery metals opened a window for global acquisitions.

Attention will now turn to what Tianqi Lithium Corp. and Ganfeng Lithium Corp., which report results in coming days, say on the matter.

The miners’ opportunistic growth plans should give pause to traders, investors and rival producers hoping for an imminent rebound in battery-metal prices. They also may add to the alarms in Western capitals about China’s stranglehold on many critical minerals.

Even with landmark spending packages rolled out by the US and European Union, there’s a strong chance China’s dominance in cobalt, nickel and lithium will be greater in a few years. Tsingshan Holding Group Co., the world’s top nickel producer, is also pushing ahead with expansion.

Zijin, for one, expects resistance. Chairman Chen Jinghe said the company “will be targeted for sure” as geopolitical tensions become “increasingly grim.”

Even so, these are raw materials that will be needed in ever-greater volumes as the energy transition gathers pace, regardless of who mines them.

Efforts to curb China’s expansion through diplomatic and legal means will likely continue, but for the good of the planet, politicians’ time might be better spent focusing on efforts to keep pace.

(By Mark Burton)
Tsingshan unit plans Indonesian battery plant as trade frictions mount

Bloomberg News | March 26, 2024 

Tsingshan’s industrial park in Indonesia. Credit: Tsingshan Holding Group

The battery unit of Tsingshan Holding Group Co., the world’s top nickel producer, plans to build a plant in Indonesia, the latest in a series of Chinese investments that will help the Southeast Asian nation step up from commodities production to more lucrative processing and manufacturing.


REPT BATTERO Energy Co.’s first overseas battery factory could be housed alongside Tsingshan’s existing operations in Weda Bay and may begin operating as soon as next year. The intention is to steal a march on rivals planning new capacity elsewhere in the world, and take advantage of its parent for raw materials and infrastructure. Locating in Indonesia could also head off concerns over trade frictions that threaten to disrupt exports from China.

“Many battery manufacturers are building factories and ramping up in Europe and North America, but we expect their capacity will only operate from around 2026 or after,” Jason Hong, US general manager of REPT, said in an interview. “We want to get ahead of them with the factory in Indonesia.”

China is one of Indonesia’s top investors, spending more than $7 billion there last year, with much of the cash deployed on building out processing facilities for the nation’s abundant reserves of raw materials. Jakarta has ambitions to develop as a hub for electric vehicles, a sector in which China leads in terms of sales. Indonesia is the world’s biggest miner of nickel and No. 2 for cobalt, ingredients crucial to the production of EV batteries.

REPT began by selling batteries for energy storage systems, but has since expanded to carmakers including Stellantis NV, Li Auto Inc. and SAIC Motor Corp. It ranked as China’s No. 9 in terms of EV battery installations in the first two months of 2024, up from No. 11 last year, according to China Automotive Battery Innovation Alliance.
New listing

The company listed in Hong Kong in December, at a time when EV sales growth has slowed after a period of rapid expansion. REPT warned last month that its net loss in 2023 could be as much as 2 billion yuan ($277 million), or four times worse than the previous year, due to lower prices, delayed payments from customers and the costs of expansion.

China’s dominance in EVs and the processing of many critical minerals has drawn scrutiny from trade officials in the US and European Union. Hong said policy uncertainty is potentially an issue for the company, and putting a factory in Indonesia could help mitigate the threat. But no final agreements have been reached, and REPT could consider other Southeast Asian locations too, the company added.

The US is keen to develop supply chains that don’t rely on China, while Jakarta is lobbying for closer trade ties with Washington to ensure its exports can benefit from the green subsidies available in the Biden administration’s Inflation Reduction Act. The two countries are also partners in a landmark climate finance pact.

“Labor and power costs in Indonesia are similar to China,” said Hong. “Tsingshan has comprehensive infrastructure built, and its extensive experience in the country would help with budget estimates,” he said. “We also have a good relationship with the Indonesian government, which is supportive of new energy sectors.”

Still, Indonesia isn’t without risks. For one, the nation’s power supply is heavily reliant on coal, the dirtiest fossil fuel, which could raise environmental concerns among buyers and investors. A deadly explosion at a Tsingshan nickel plant in January has also unnerved some of REPT’s customers.

“We did have clients concerned about how we can prevent this from happening again,” Hong said. “They are attaching great importance to this matter.”