New working group to monitor truce between Las Bambas, Peruvian Indigenous communities

Valentina Ruiz Leotaud | June 12, 2022 | 

The signing of the 30-day truce between the Indigenous communities of the Cotabambas province, the Peruvian government and Las Bambas. (Image by the Presidency of the Ministers’ Council).

Peru’s executive power launched a temporary working group to keep track of the commitments agreed upon by Chinese miner MMG and the Indigenous communities protesting against its Las Bambas copper mine.


The announcement, published in the official gazette El Peruano, follows a decision regarding a 30-day truce made public on Thursday by representatives from the six communities involved in the conflict ​​that forced MMG to halt operations for more than 50 days, the longest in the mine’s history.

The protest was started in mid-April by the communities of Fuerabamba and Huancuire, who say Las Bambas had not honoured all of its commitments to them. Both communities sold land to the company to make way for the mine, which opened in 2016.

The Chila, Choaquere, Chuicuni and Pumamarca communities joined later and all six of them will now be part of the new committee, which will operate under the umbrella of the Presidency of the Ministers’ Council (PCM). A representative from Las Bambas will also be part of the group, as will a representative from the Cusco ombudsman office and the ministers of energy and mines, environment, justice and human rights, women and vulnerable populations, agricultural development and irrigation, health and education.

According to ministerial resolution N° 182-2022-PCM, the committee will be in charge of establishing the procedures and schedule for each party to fulfill the commitments they’ve subscribed to and assessing the results of the actions carried out to honour such commitments.

Among the issues agreed upon is a promise by the Huancuire community to no longer protest inside mine property, while Las Bambas said it will halt the construction of its new Chalcobamba open-pit mine, set to be located in land formerly owned by Huancuire.

The company also said that it will evaluate and restructure the executive positions in charge of negotiations with the local communities, as community leaders say they are spurring social conflicts.

The working group has to be set up within the next 10 days, will be active for 60 days from the day it is installed and will also have to establish six subgroups that will be in charge of implementing the specific agreements related to each of the communities involved in the negotiations.

The initial 60-day period can be extended for another two months but once the set time has expired, the working group only has 30 days to present a final report to the PCM.

Peru is the world’s no. 2 copper producer and Chinese-owned Las Bambas is one of the world’s largest producers of the red metal, accounting for 1% of the Andean country’s gross domestic product.

OMG THAT'S YUGE 

Gem Diamonds unearths 245-carat stone in Lesotho

Staff Writer | June 13, 2022 

Letšeng is the world’s highest dollar per carat diamond mine. 

(Image from: Gem Diamonds’ presentation.)

Gem Diamonds (LSE: GEMD) announced on Monday the recovery of an exceptional quality 245 carat white Type II diamond from the Letšeng mine in Lesotho on June 11.


Following the recovery of a 129 carat diamond on 23 May, and a 125 carat diamond on 31 May, the 245 carat diamond represents the third diamond of over 100 carats recovered from the Letšeng mine within the past three weeks.

In 2021, Gem Diamonds found only six diamonds over 100 carats at Letšeng. This compares to 16 rocks of more than 100 carats discovered in 2020.

245-carat stone recovered June 11 at Letšeng

The find comes as prices for small diamonds have jumped about 20% since the start of March, as cutters, polishers and traders struggle to source stones outside Russia.

State-owned Alrosa (MCX: ALRS), the world’s top diamond producer by output, was hit with US sanctions following Moscow’s invasion of Ukraine.

Since acquiring Letšeng in 2006, Gem Diamonds has found more than 60 white gem quality diamonds over 100 carats each.

Rio Tinto unveils changes following workplace survey that uncovered racism, harassment

 
Naimul Karim | June 13, 2022 |

(Stock Image)

Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) is designing new reporting mechanisms for its employees and training modules for top leaders to spot “unacceptable” behaviours in the workplace, the company said four months after the release of a report that revealed patterns of racism, sexism and harassment among its global workforce.


Carolyn Chisholm, director of Rio Tinto’s external affairs, said that the company made a “conscious effort” to assess the situation before beginning to fix the issues brought out by the report.

“As a company made up of engineers, we want to get stuff done…but it was conscious on part of the team that we take our time and that we are uncomfortable with the uncomfortable because that’s when we are going to do something about it,” said Chisholm in a session at PDAC 2022 on June 13.

“We are in the process of really trying to figure out a thoughtful, comprehensive, and inclusive way on how we act on the 26 recommendations (from the report),” she added. “It’s like designing engagements on projects with First Nations and making sure you do it right and it takes time. We are trying to co-design those elements right now.”

Rio Tinto launched a survey in March of last year that was answered by about 10,000 employees. Released in February, the results showed that about 30% of women and 7% of men at the company had been sexually harassed at work. Of them, 21 female workers also reported cases of actual or attempted rape or sexual assault. 

Nearly half of all employees who responded to the Rio Tinto-commissioned external review of the miner’s workplace culture said they had been bullied, while racism was found to be a common issue across several areas. 

The move was part of an ongoing effort to clean up the company’s tainted image following its destruction of two 46,000-year-old sacred rock shelters in Western Australia in 2020 while working to expand an iron ore mine. 

Chisolm said that the company plans to make changes through three pillars, the first of which will require the company’s leaders to go through an “extensive leadership program.”

“They pull us apart and put us back together again… to make that cultural change you have to have leaders that have the skills to pick out the behaviours that are unacceptable and to be in a position to create that sense of trust and safe space to have those difficult conversations,” she said.

(Continue reading at The Northern Miner)

Centrica Looks To Reopen Britain’s Biggest Natural Gas Facility

By City A.M - Jun 10, 2022

Centrica has filed a formal application to reopen Britain’s biggest natural gas storage site after the site was closed five years ago for “economic” reasons.

The Windsor-headquartered utility company has submitted a formal application to the North Sea energy regulator to reopen the Rough facility off the east coast of Yorkshire.

Centrica previously closed its gas storage facility in 2017, after the government refused to subsidise the cost of repairs to the North Sea facility.

The application comes as the government pushes forwards with plans to increase the UK’s gas storage capacity as a means of limiting the impacts of the energy crisis ahead of the coming winter.

The plans come as global natural gas prices have soared in recent months as demand has outstripped supply, due to rebounding global demand following Covid and Russia’s invasion of Ukraine.

The Rough facility consists of a depleted natural gas field, which lies 2.7km below the seabed, 18 miles off the coast of Yorkshire.

HOW'S THAT NATO NATION BUILDING COMING ALONG 

Libya Loses 1.1 Million Bpd As It Shuts Down Nearly All Its Oil Fields

By Irina Slav - Jun 13, 2022,

Libya is losing oil production at the rate of 1.1 million barrels daily, the country’s oil minister Mohammed Aoun has said, adding that almost all of the country’s oil fields were shut down.

Libya’s largest field, El Sharara, was shut down last month along with El Feel, with reports saying that it was groups affiliated with the eastern parliament that shut down oil production, among them the Libyan National Army of Halifa Khaftar.

According to Aoun, however, “it appears that the closure instructions were issued by an official body, the Petroleum Facilities Guard in the closure areas.”

Libya is currently in the throes of yet another flare-up of violence as two politicians vie for the post of Prime Minister: interim PM Abdul Hamid Dbeibah and eastern-affiliated Fathi Bashaga. According to reports, the groups shutting down fields and export terminals are affiliated with the Bashaga camp.

Bashaga has been sworn in as the new prime minister of the country, but Dbeibah has refused to step down.

According to the oil minister, the only functioning fields right now in Libya are Hamada and the Mellitah complex, with the Wafa field producing from time to time.

This means that Libya is producing almost no oil, putting further strain on an already undersupplied oil market. The North African country was already producing about 600,000 bpd in May due to the large field and export terminal closures, and now, based on Aoun’s comments, its output rate is close to about 100,000 bpd.The impact of such outages on international prices could have been significant were it not for the fact that outages in Libya are frequent and the latest news from China, which is mass-testing citizens in a Beijing district after an outbreak of Covid. The latter sparked concern about China’s demand prospect in case it decides to impose more lockdowns to stem the spread of the virus.

Oilprice.com

The UK Goes After Fuel Retailers Over Price Gouging

By Tsvetana Paraskova - Jun 13, 2022

• UK Competition and Markets Authority to look into the implementation of the government's fuel duty cut.
• 
  
• The UK government cut fuel duty by the equivalent of $0.062 per liter in March.
• 
  
• The average UK gasoline price last week was the equivalent of more than $8.60 per U.S. gallon.

The UK is launching an urgent review into the retail fuel market to see whether retailers have passed on the government's fuel duty cut from March to filling stations, UK Business and Energy Secretary Kwasi Kwarteng said this weekend.  

Kwarteng asked the Competition and Markets Authority to conduct an urgent review of the retail fuel market, as well as a longer-term investigation under the Enterprise Act, to explore whether the retail fuel market has adversely affected consumer interests.

"Fuel prices are always quick to go up but slow to come down - let's see why," Kwarteng said.

"The British people are rightly frustrated that the £5 billion package does not always appear to have been passed through to forecourt prices and that in some towns, prices remain higher than in similar, nearby towns," the energy secretary said in a letter to the Competition and Markets Authority dated June 11.

The investigation comes as the average price of filling up the tank of a typical family car last week exceeded triple digits in UK currency for the first time ever.

The UK government cut fuel duty by the equivalent of $0.062 per liter in March, but prices have jumped by a lot more since then.  

Wholesale gasoline costs in the UK have already jumped fivefold the amount of the fuel duty cut, Simon Williams, fuel spokesperson at the UK's motoring organization RAC, said last week.

Gasoline prices in the UK—where total taxes on gasoline account for an average 46% of the retail price, per RAC—saw last week the highest daily price jump in 17 years. The average UK gasoline price last week was the equivalent of more than $8.60 per U.S. gallon.

Records continued to be broken in the following days until the average cost of filling a 55-liter family car passed the £100 ($125) mark, the first time in history that drivers are paying triple digits for a full tank. 

 Oilprice.com

Natural Gas Prices Tank Again As Freeport LNG Remains Shut For Almost A Month

By Irina Slav - Jun 09, 2022

• Natural gas prices fell another 7.5% percent on Thursday morning.
• 
  
• Freeport LNG outage to lead to drop in exports to Europe and Asia
• .
• The cause of the explosion on Wednesday remains unclear.

Amid robust demand for U.S. LNG, one  biggest liquefaction facilities on the Gulf Coast, Freeport LNG, will be out of commission for at least three weeks following an explosion yesterday.

An explosion rocked the Freeport LNG liquefaction plant yesterday morning, with its cause as of yet unclear. An investigation is ongoing, but according to the operator of the facility, Freeport LNG, the facility will remain shut down for weeks. It accounts for a fifth of total U.S. liquefaction capacity.

The Freeport facility has three liquefaction trains, and a fourth is being constructed. Its current gas processing capacity is 2.1 billion cu ft daily. With the outage, the situation with U.S. LNG exports will become problematic, as evidenced by the gas market’s reaction to the news of the explosion.

Initially, prices fell as traders worried that the outage would reduce American LNG’s market share, per a Financial Times report from earlier today. Bloomberg noted that the fire means a lot of gas will remain stranded at the fields amid surging demand for gas overseas.

Yet prices on international LNG markets might react differently because the Freeport LNG outage effectively means there will be less natural gas for export, especially to energy-thirty Europe and Asia.

In Europe, gas prices have been on the decline for the past few days as an early start of summer reduced immediate demand. An ample supply of LNG has also contributed to the price trend. With the outage, this trend might at some point reverse.

Asian demand, however, is on a strong rise as buyers seek to build inventory for the winter season, Bloomberg reported this week, which is lending further upward support to prices.

“LNG prices remain well above where they normally are, even adjusting for higher crude oil prices,” Sanford C. Bernstein analysts said in a note, as quoted by Bloomberg. “We expect this to be a lull before what looks like a tough winter ahead for consumers.”

Oilprice.com

U.S. SPR Release Is Creating A Problem For Canada’s Heavy Crude Oil

By Julianne Geiger - Jun 09, 2022

• Heavy crude released from the U.S. SPR is competing with Canadian heavy crude.
• 
  
• WCS discount to WTI has increased to $20 per barrel.
• 
  
• Steep discount of WCS to WTI isn't bringing down crude prices in general.

The Strategic Petroleum Reserve release in the United States—a large one designed to release a million barrels per day from storage into the commercial markets—is creating a bit of a problem for the Canadian oil industry.

All crude oil grades aren’t equal, and a large share of what the SPR is releasing into the Gulf Coast area is heavy sour crude—a similar grade to the oil shipped down from Canada.

The heavy Mars and Poseidon grades—both hailing from the GoM area and both heavy grades—are getting lost in the sea of heavy crude flooding the market from the SPR. So is Western Canadian Select (WCS)—the Canadian crude oil that traverses pipelines from Hardisty, Alberta, to the U.S. Gulf Coast.

The WCS discount to the U.S. crude benchmark West Texas Intermediate (WTI) is now the steepest in years at $20 per barrel.

“It’s not great timing,” Rory Johnston, founder of the Commodity Context newsletter based in Toronto, told Reuters. “The vast majority of what’s coming out of the SPR is medium sour crude. It’s hitting directly at that marginal pricing point for WCS.”

Canada is no stranger to battling steep discounts—also referred to as wide spreads—compared to U.S. crude oil. For several years, their lack of pipeline capacity into the United States created a situation where all their pipelines were full, and the bottlenecking in this midstream segment created a pricing situation most unfavorable to Canada.

By 2020, Canada had increased its storage capacity and slacked crude oil production, which dragged up the price of WCS—and shrunk the gap between WCS and WTI. Compared to today’s steep $20 discount, June 2020 contract pricing for WCS was just $3.80 per barrel.

For those thinking that the steep discount to WTI means the SPR is working to bring down crude oil prices, that is not the case. As of Thursday morning, WCS was trading at $108.01—nearly double what it was trading this time last year.

By Julianne Geiger for Oilprice.com

 BP Quits Canada’s Oil Sands

By Tsvetana Paraskova - Jun 13, 2022

BP is divesting its last interest in Canada’s oil sands to Canadian firm Cenovus Energy as part of a portfolio reshaping that will see it buy into an offshore oil project in eastern Canada.

BP has agreed to sell its 50-percent interest in the Sunrise oil sands project in Alberta to Cenovus Energy, the UK supermajor said in a statement on Monday.

BP’s exit from Canada’s oil sands follows other divestments from one of the most carbon-intensive oil production types, such as the ones that Shell and Equinor have made in recent years, as international oil majors look to lower their emissions profile under intense pressure from investors and campaigners.

As part of its net-zero plan, BP has said its oil and gas production would decline by 40% by 2030 through active portfolio management.

After the oil sands exit, BP is not abandoning the Canadian oil sector and is shifting its focus to future potential offshore growth. As part of the deal with Cenovus, the UK major will buy the Canadian firm’s 35-percent interest in the undeveloped Bay du Nord project offshore Newfoundland and Labrador. The deal includes 467 million (C$600 million) in cash, a contingent payment with a maximum aggregate value of C$600 million expiring after two years, and Cenovus’s 35-percent position in Bay du Nord.

The project Bay du Nord is led by Norway’s Equinor and received in April this year a positive environmental assessment by the Government of Canada. The project has yet to take a final investment decision, with first oil expected to be produced in the late 2020s.

“This is an important step in our plans to create a more focused, resilient and competitive business in Canada. Bay du Nord will add sizeable acreage and a discovered resource to our existing portfolio offshore Newfoundland and Labrador,” said Starlee Sykes, bp senior vice president, Gulf of Mexico & Canada. 

Currently, BP holds an interest in six exploration licenses in the offshore Eastern Newfoundland Region.

By Tsvetana Paraskova for Oilprice.com