Canada says working to ease permitting process for mining companies

Reuters | March 6, 2023 | 

Canada’s Minister of Natural Resources Jonathan Wilkinson. (Image courtesy of Province of British Columbia.)

Canada is working toward easing permitting process for mining companies so that the permitting does not take several years, Natural Resources Minister Jonathan Wilkinson said at the Prospectors and Developers Association of Canada (PDAC) conference in Toronto on Monday.


Canada could consider tax reform offering incentives for investment in clean energy – similar to what the United States has done – in its upcoming budget in an attempt to attract investment to its critical minerals sector, Wilkinson said.

“We are reviewing Canada’s regulatory process for clean energy projects including critical minerals,” Wilkinson said.

Canada and its allies, in an attempt to rely less on China, have been looking to diversify their supply chains and find local sources for mining and processing critical metals such as lithium.

Citing the incentives for clean energy investments in the $430 billion Inflation Reduction Act in the United States, Wilkinson said Canada needed a similarly competitive tax environment.

At PDAC, one of the largest mining conferences in North America, mining companies are looking for clues on policy, especially as Prime Minister Justin Trudeau’s administration adopts a hawkish stance on China, one of the largest investors in mines around the world.

Some junior mining companies have expressed concerns that Canada’s move to restrict investments from certain countries such as China could hurt their plans.

Industry Minister Francois Philippe Champagne, who was also in attendance, responded that he was not concerned and that a record number of companies were interested in investing in Canada.

“The decision to block the Chinese lithium investments has been well received by our partners and allies around the world.” Champagne said.

(Reporting by Divya Rajagopal in Toronto; writing by Ismail Shakil –Editing by Deepa Babington)

Scientists work on solid-state battery that uses fewer ‘problem’ metals
Staff Writer | March 7, 2023 | 

EV charging station. (Reference image by C-CarTom, Wikimedia Commons).

A team from Florida State University and the Lawrence Berkeley National Laboratory has developed a new strategy to build solid-state batteries that are less dependent on specific chemical elements, particularly expensive metals with supply chain issues.


In a paper published in the journal Science, the researchers demonstrated that a mix of various solid-state molecules could result in a more conductive battery that was less dependent on a large quantity of an individual element.

“There’s no hero element here,” lead researcher Bin Ouyang said. “It’s a collective of diverse elements that make things work. What we found is that we can get this highly conductive material as long as different elements can assemble in a way that atoms can move around quickly. And there are many situations that can lead to these so-called atom diffusion highways, regardless of which elements it may contain.”

Solid-state batteries operate almost the same way as other batteries—they store energy and then release it to power devices. But rather than liquid or polymer gel electrolytes found in lithium-ion batteries, they use solid electrodes and a solid electrolyte. This means that a higher energy density can occur in the battery because lithium metal can be used as the anode.

Additionally, they have lower fire risk and potentially increase the mileage of electric vehicles.

However, many of the batteries constructed thus far are based on critical metals that are not available in large quantities.

The research team considered the straightforward path of using one element to replace commonly used ones, but that approach raised its own supply chain issues. Instead, the team addressed the problem by designing materials that weren’t beholden to one specific element. For example, instead of creating a battery made with germanium, which rarely appears naturally in high concentrations, the team created a mixture of titanium, zirconium, tin, and hafnium.

“With such a feature, we need to assemble those elements in a way so that we have many ‘good’ local configurations which can form a network for the fast transport of atoms or energy,” Ouyang said. “Think of it as a highway. As long as there is a connected highway for atom diffusion, the atoms can move quickly.”

The scientist noted that this study opened a new area of research for him and his colleagues as they work to build more efficient solid-state batteries.

Major copper producers unveil plan to reach net zero emissions by 2050

Reuters | March 7, 2023 | 

Credit: Codelco

A group of the world’s biggest copper producers said it aimed to slash direct and indirect greenhouse gas emissions to zero by 2050, in a move that could make the sector more attractive to environmentally-conscious investment funds.


With copper demand forecast to double to 50 million tonnes by 2050 from 2020 levels, the International Copper Association’s (ICA) roadmap released on Tuesday set a target for members to cut direct and indirect emissions by 30% to 40% by 2030, and by 70% to 80% by 2040, before reaching zero by 2050, it said.

Members include BHP Group, Chile’s Codelco, Glencore, Freeport-McMoRan, Japan’s JX Nippon Mining & Metals Corporation, and Poland’s KGHM.

There are no members from China, the world’s biggest producer of refined copper.

The copper producers plan to reduce direct and indirect emissions by decarbonising power supply, improving efficiency and scrap collection. Copper production from scrap metal can typically be done via electricity so is easier to decarbonise.

The ICA’s members will also work with customers to reduce their “scope 3” emissions by 10% by 2030, by 30% to 40% by 2040, and by 60% to 70% by 2050, it said.

“These collective ambitions show a clear trajectory to achieving defined emissions reductions of up to 85% by 2050, with the balance to be addressed through advanced technologies and enhanced collaboration,” the ICA said.

Emissions produced by the copper industry as a whole represent 0.2% of global greenhouse gas emissions. In 2018, the average emission intensity of refined copper production was 4.6 tonnes of carbon dioxide equivalent (CO2e) per tonne of copper, down by 13.4% from 5.4 tonnes of CO2e in 1990.

Given copper’s key role in the energy transition and the “ambitious” decarbonisation plans, the sector should be an attractive investment for funds that use environmental, social and governance (ESG) criteria, the ICA said.

(By Melanie Burton; Editing by Jamie Freed)

Argentina moves to stop wetlands bill from foiling lithium boom
Bloomberg News | March 7, 2023 | 

Stock image.

Argentina is in talks with policy makers and companies to prevent drafted wetlands-protection legislation from slamming the breaks on exploration as the world looks for more environmentally friendly energy sources.


Argentina is on course to become one of the biggest suppliers of lithium needed for the move to cleaner energy and transportation. The country has been working on legislation, pushed by its president in a major speech last week, to protect its wetlands amid sprawling fires often blamed on farmers. But such a law could grind lithium exploration to a halt.

“We’re all convinced that looking after the environment is a central pillar of development,” federal Mining Undersecretary Fernanda Avila said in an interview at a mining conference in Toronto. “What we’re debating and discussing is how the wetlands law can go through without putting mining projects at risk.”

Some versions of the legislation classify Argentina’s lithium-rich Andean salt flats, a growing magnet for international miners and battery makers, as wetland areas because of the vast saline pools beneath the surface. Governors of the country’s three main lithium provinces have voiced strong concerns that a law would therefore impede exploration for the metal.

The federal government is working with the provinces and an industry group representing miners to make sure that doesn’t happen, Avila said.

The government is also trying to convince miners that Argentina is ripe for long-term investments after piecemeal policies to address the country’s restrictions on money flows and export taxes fell short.

“We’re talking with companies, which are generally investing no less than $4 billion, to give them better assurances through an agreement encompassing several issues,” Avila said.

(By Jonathan Gilbert and James Attwood)

Peru to unleash stranded copper with roadblocks largely cleared
Bloomberg News | March 7, 2023 | 

Protesters in Lima draped with Peruvian flags and waving Wiphalas. Credit: Wikipedia

The government of Peru, the second-biggest producer of copper and zinc, expects that shipments of the commodities will begin to normalize within days as the nation’s worst street protests in decades ease.


“The issue of protests has been reduced to a minimum at this time,” Oscar Vera, newly-appointed energy and mines minister, said in an interview. “The mining corridor is now open and in the coming days, mineral will begin to be taken out.”

The full resumption of shipments will come as a relief to tight global metal markets, which were roiled by a surge of protests prompted by the impeachment of former President Pedro Castillo. The months of unrest — which constrained the transport of metal to ports and supplies to mines — embroiled operations by companies including Glencore Plc and Freeport-McMoRan Inc., while highlighting risks to commodity output from emerging markets.

Speaking on the sidelines of a conference in Toronto on Monday, Vera said authorities eased tensions by establishing lines of communication with communities and understanding their concerns. In many cases, conflicts related to stalled investments in local water and health projects, he said, adding that the government has stepped up efforts to ensure public works get done.

To be sure, unrest lingers in some areas. In Puno, home to some of the worst protests, roadblocks have continued even after those in other mining regions were lifted. While Minsur SA’s giant San Rafael tin mine has restarted operations after a 45-day halt, it’s still a long way from full capacity.

Minister Vera said direct and ongoing communication and concrete action to address demands were paying off — even at MMG Ltd.’s Las Bambas mine, which has endured more than 400 days of roadblocks in its seven-year history.

With blockades at a minimum, Las Bambas will probably resume copper transport “between today and tomorrow,” Vera said. He said he’s hoping there’ll be a lasting solution with a military presence along roads and authorities on the ground to make sure mine commitments are met. There are also proposals to change the route used to transport ore to port.

Peru’s copper production is likely to have taken a hit from the protests, but Vera said he was “very optimistic that in the coming days everything starts to normalize,” with output recovering over the rest of the year.

The government has identified a total of $6.9 billion in mining investments this year and next, made up of seven likely projects. Still, there are some projects, such as Southern Copper Corp.’s Tia Maria, that while technically sound, require further work to convince local communities of the benefits, he said.
Oil reentry

Vera defended state-owned Petroleos del Peru SA’s plans to resume drilling in the Amazon rainforest at what was once the nation’s largest and leakiest oil field.

Petroperu’s move back into the highly profitable oil-producing industry carries little risk because it’s doing so in a field that only requires reactivation rather than a capital intensive development, he said.

For Lot 192, in a remote area near Ecuador, Petroperu is seeking an operating partner and is “negotiating with a company, I understand,” the minister said.

(By James Attwood and Marcelo Rochabrun)

British Columbia exploration spending hits 10-year high in 2022

Staff Writer | March 7, 2023 |

Northwest British Columbia. Stock image.

Exploration for copper was the driving force behind a record-setting year for provincial spending in British Columbia, according to a new report from EY.


Fueled by favourable market conditions and demand, copper exploration spending jumped 84% year over year in 2022, rising from C$128 million in 2021 to C$235 million, EY’s Insights from the BC Mineral and Coal Exploration Survey revealed. 2022 Similarly, critical metals exploration in BC jumped 77% year-over-year, while precious metals spend saw a 91% increase from 2020.

Gold spending retained the record-high levels seen in 2021, decreasing by a marginal 2% year over year from C$431 million in 2021 to C$422 million in 2022. Despite this downturn, survey responses indicate interest in gold has not dwindled. Approximately 46% of survey respondents indicated gold as the primary commodity of exploration.

The survey found that exploration in BC is shifting towards discovery after years of focus on advancing economics of existing projects. Grassroots and early-stage exploration accounted for 39% of total exploration spending in 2022, receiving 78% more funding year over year, while later stage-projects – those in the advanced, mine evaluation and mine lease stages – received 10% less funding.

Of the C$740 million invested into the exploration and evaluation of mineral deposits, C$42 million was spent on First Nations community consultation and exploration agreements. Additionally, survey respondents indicated a 32% increase in employment within the sector.

The full report is available here.

Rio Tinto keeps working to build Indigenous support for Resolution mine

CAREFUL THEY BLEW UP AN ABORIGINAL SITE IN AUSTRALIA

Reuters | March 7, 2023 |

Credit: Resolution Copper

Rio Tinto Plc said it remains committed to building more support from an Indigenous group that opposes its Resolution mine project in Arizona, which could supply a quarter of America’s copper needs depending on the outcome of a court case.


Resolution is key to the Anglo-Australian mining giant’s future as the project would produce more than 40 billion pounds of copper for the green energy transition. But that copper sits below the federally owned Oak Flat Campground, a place some Apache consider home to deities


The mine would create a crater 2 miles (3 km) wide and 1,000 feet (304 m) deep that would destroy that worship site, which the San Carlos Apache tribe strongly opposes.

The tribe has refused to meet with Rio, saying it prefers to negotiate directly with the US government, which in 2014 approved a complex process to give Rio the land containing the copper in exchange for acreage that Rio owns nearby. President Joe Biden put that land swap on hold in 2021.

Some other Apache tribes in the area support Rio’s project, but the San Carlos Apache have vowed to block it. Rio said it will continue to try to win the San Carlos Apache’s approval.

“We have to have broad-based support, for sure,” Bold Baatar, Rio’s chief executive of copper, told Reuters on the sidelines of the CERAWeek energy conference in Houston this week. “If there are going to be opposing voices, we’re going to continue trying to engage.”

Several courts have ruled against the San Carlos Apache and their allies, which have appealed to the full 9th US Circuit Court of Appeals. That court plans to hold a hearing to consider the case on March 21.

Rio does not plan to attend the court hearing in Pasadena, California. US government attorneys have defended the land swap in court.

The company said it may be able to prevent the large crater, but will not know if that is possible until it controls the land. “When you get through mine planning and start touching rock, we will looking for areas of improvement to try to mitigate the impact as much as possible,” Baatar said.

US Representative Raul Grijalva, an Arizona Democrat, introduced legislation on Monday to reverse the 2014 legislation approving the land swap.

“Turning Oak Flat into a political bargaining chip was an assault against tribal sovereignty that never should have happened,” said Grijalva, the ranking member of the US House Natural Resources Committee.

The project would involve digging into a new rock deposit using a mine shaft that closed in the 1990s and related electrical infrastructure. Rio has begun positioning the project as the expansion of an old mine, which tend to be more palatable for regulators and local communities.

“Resolution is not a greenfield mine,” said Baatar. “It’s a revival of old, proud US copper history and an old mine that was there. It’s just deeper.”

(By Ernest Scheyder; Editing by David Gregorio)

Canada’s crackdown on Chinese funding is hurting miners, Friedland says

Bloomberg News | March 5, 2023 | 

Robert Friedland speaks to attendees at the PDAC convention in Toronto. Credit: PDAC.

Canada’s crackdown on Chinese investment in critical minerals will make it harder for miners to produce the metals needed for the global energy transition, according to Ivanhoe Mines Ltd. founder Robert Friedland.


“We’re going to be deprived of all this Chinese capital in all these junior mining companies,” the billionaire mining magnate told a packed auditorium in Toronto on Sunday. “It’s really getting harder out there to be a miner.”

The Canadian government tightened its foreign investment laws in November to clamp down on foreign state-owned enterprises pursuing takeovers or investing in the mining industry. That same month, the government ordered three Chinese firms to divest from a trio of junior lithium explorers.

The new rules create a financial quandary for Canadian miners who’ve relied on China as a reliable source of funding. China has built up stakes in more than two dozen Canadian mining companies, including some of the industry’s biggest names, according to a Bloomberg analysis.

Citic Metal Africa and Zijin Mining Group, two firms closely linked to the Chinese government, hold a combined 39.5% stake in Friedland’s Ivanhoe Mines. Jiangxi Copper Co. owns 18.3% of Vancouver-based copper producer First Quantum Minerals Ltd.

Friedland, speaking at an industry conference hosted by the Prospectors & Developers Association of Canada, said the rules make it “even harder” to produce metals like lithium, copper and nickel when demand for the metals is set to soar.

“We’re going to need a lot more money coming to junior mining. I mean, orders of magnitude more,” he said.

Canada’s new rules don’t identify countries, but the updates are part of a new policy approach toward China, which Prime Minister Justin Trudeau’s government has described as an “increasingly disruptive global power” that disregards international rules and norms.

(By Jacob Lorinc)

Tesla, GM follow own shareholders with push into lithium miners

Bloomberg News | March 7, 2023 | 

Stock image.

As automakers seek stakes in lithium miners to lock in supplies for electric-vehicle batteries, they’re following a path already forged by their shareholders.


Take Tesla Inc., which is reportedly interested in buying Toronto-listed Sigma Lithium Corp. If Tesla succeeds, it would follow prominent funds including Manulife Financial Corp., 1832 Asset Management, Maven Securities, DZ Bank and several others that have been snapping up Sigma shares, even as they cut exposure to the electric-vehicle maker.

It’s not hard to see the attraction. Policymakers and governments around the globe have ratcheted up calls to move toward cleaner transportation and poured billions into developing EV infrastructure, which has caused the price of lithium — used in the batteries that power electric cars, buses and trucks — to skyrocket. In fact, lithium has been the top performing commodity in the past two years.

“Lithium offers investors an opportunity to get an exposure to the EV expansion at much lower valuations, and without ancillary exposure to a CEO selling billions of dollars in stock,” said Will McDonough, the chief executive officer of EMG Advisors, which runs the Element EV & Solar Battery Materials Futures ETF (ticker: CHRG) that invests in the futures of lithium, cobalt, copper, and nickel.

“The underlying technology of all EV batteries requires lithium,” he said. “There is yet to be a prominent player that does not require lithium as the cornerstone metal.”

General Motors Co. sent Lithium Americas Corp. shares flying when it became the Canadian headquartered miner’s largest investor, which helped the company break ground on a new mine this week. Other car makers stalk mining conferences in an effort to secure supply.

“You’re only as strong as the weak point in your supply chain, which is lithium,” Sprott Asset Management CEO John Ciampaglia said in an interview, adding that a supply crunch has led investors playing the electric vehicle transition to move their capital upstream, buying up undervalued lithium producers. Sprott launched a lithium miners ETF in February in an effort to capitalize on investor interest.

Despite the surging price of the metal, the stock prices don’t necessarily reflect the booming demand. Albemarle Corp. — the largest producer of the metal — has seen sales and income surge. Still, the stock trades at a roughly 11-times price to earnings multiple — below the 14.8-times multiple of the S&P 500 Materials Index and just a fraction of Tesla’s 56-times multiple.

In addition to their cheap valuations, fund managers and analysts see a catalyst for the stocks as new buyers for the equities emerge, including US auto giants. “These are probably not the last deals that we’re going to see in the space,” Pedro Palandrani, head of research for Global X ETFs, said in an interview, referring to carmakers buying lithium-mining stocks.

Palandrani anticipates that more auto companies will take stakes in miners because the market for lithium is expected to quintuple to 3.7 million metric tons per year over the next decade from the current 800,000 metric tons.

“Lithium miners have margins of a software as a service company,” Palandrani said, adding that EV investors are taking notice as the outlook for most EV-making startups flounder, and the legacy carmakers’ gas-fueled auto businesses make the opportunity from battery-driven cars murky.

Even so, investing in early-stage mining companies is fraught with a different type of risk than car manufacturers — and their shareholders — generally face, including the potential that a proposed mine doesn’t produce at the expected rate or mineral grade. Goldman Sachs Group Inc.’s commodities research head, Jeff Currie, recently warned carmakers against buying lithium miners by saying “it always ends in tears” when commodity consumers move upstream.

Still, investors and car makers continue to bet on lithium miners, wagering that a shift toward EVs will become a permanent trend that will boost demand for the metal. “Lithium is today the common denominator across all battery technology and it’s likely going to stay that way for the next 10 to 15 years,” Global X’s Palandrani said, adding that he expects lithium producers to outperform.

(By Geoffrey Morgan and Esha Dey)

Battery metals projects catch eye of pension funds and carmakers

Bloomberg News | March 6, 2023 | 


Critical minerals projects are attracting newfound interest from pension funds and automakers to help tackle a looming shortage of battery metals, say some of Canada’s top investment bankers.


The rush for metals like lithium, copper and nickel needed to power electric vehicles has “clearly brought the sector into a spotlight that it wasn’t in a few years ago,” Ilan Bahar, global mining co-head at BMO Capital Markets, said during a Monday panel discussion at a mining conference in Toronto.

Bank of Montreal’s investment banking business has seen more interest from the auto industry wanting to buy stakes in miners as the US Inflation Reduction Act encourages manufacturers to source material on North American soil, according to Bahar.

Governments worldwide pushing for EVs “really, really quickly” to meet emissions targets are discovering supply constraints for key metals, Bahar said. “What everybody quickly realized is, one, that the supply is not fully available here, and two, that it’s controlled by a certain country that has a 15-year head start.”

Governments and companies around the world have been pushing to accelerate a shift from fossil fuels into cleaner energy sources, with battery metals like lithium, cobalt and nickel underpinning the transition. The issue has gained more urgency in recent months due to rising competition among automakers for the metals and wild swings in raw material costs.

Pension funds are starting to consider investing in the battery metals industry, though some have expressed concerns tied to environmental, social and governance issues and bureaucracy, said Navdeep Bains, vice-chair of global investment banking at Canadian Imperial Bank of Commerce.

“I’ve talked to pension funds, and they’ve been like: ‘We’ll invest in this space, we’ve heard of the OEMs investing directly, but we have to see Indigenous issues resolved and permitting issues resolved’,” Bains said.

BMO’s Bahar said the sector will need more outside investment to meet future demand.

“We need a certain amount of supply that doesn’t yet exist, and we need investment beyond the amount of dollars in institutional investment funds,” he said.

(By Jacob Lorinc)

Shortage of metals for EVs is rising up the agenda in automakers’ C-suites

Bloomberg News | March 5, 2023 | 

Credit: BMO Metals and Mining

The merry-go-round of private meetings at an annual mining industry conference at Florida’s Hollywood Beach had a cast of new faces this year: auto sector executives increasingly anxious about surging prices and tighter supply of metals used in electric vehicle batteries.


Tesla Inc., Ford Motor Co. and Mercedes-Benz Group AG were among automakers which sent senior staff to mingle with about 1,500 delegates at the BMO Global Metals & Mining Conference, an event normally attended mainly by iron ore and aluminum producers. Their presence underscores the growing popularity of battery-powered cars, helped by a global push toward clean energy, which is estimated to require $10 trillion worth of metals through 2050, according to BloombergNEF.

Car producers “had room-to-room meetings with a lot of companies, like ourselves, trying to understand how to address their own supply chain,” said Trent Mell, an attendee and chief executive officer of Electra Battery Materials Corp., a Toronto-based developer of mining and refining projects. Auto companies have recently expanded their teams and are now filling rooms with specialists in metals like lithium — the metal that’s ubiquitous in electric car batteries — and manganese, or in battery recycling, he said. “Once you might have had one or two people dealing with raw materials procurement.”

Availability and costs of crucial battery materials like lithium, cobalt and nickel have been key concerns for years among EV makers trying to build out their electric lineups. The issue has gained more urgency in recent months due to rising competition to strike supply pacts with miners and project developers and by wild swings in raw material costs. The spot value of lithium consumption alone surged to about $35 billion in 2022, from $3 billion in 2020, according to Bloomberg calculations.

Lithium “was a meaningful source of cost increase,” for Tesla in the final quarter of 2022, CFO Zachary Kirkhorn said in January. While a key lithium benchmark has tumbled almost a third this year, prices remain 590% higher than at the start of 2021.

Volvo Car AB, Nio Inc. and Jeep-maker Stellantis NV have also said they’re being affected by the impact of higher raw material prices, and some are looking for new deals with suppliers to tie-up potential sources of metals. Like others, EV maker Rivian Automotive Inc. is spending a lot of time examining potential new deal structures with suppliers, and this “could involve ownership positions” in mining assets, CEO RJ Scaringe said on a Feb. 28 earnings call.

General Motors Co. last year struck a prepayment deal for lithium, while Ford Motor Co. offered a loan to help fund a mine project.

“Investing in these raw materials provides a way for automakers to control margins along the supply chain and ensure they remain competitive,” said Andrew Miller, chief operating officer at Benchmark Mineral Intelligence, an industry data provider. “Raw materials are now the largest cost driver for a battery.”

Automakers are also getting involved in the development of new mining projects.

GM added a $650 million stake in Lithium Americas Corp. to help deliver a mine in Nevada, and has considered buying an interest in Brazilian giant Vale SA’s base metals unit. Tesla, which is constructing a metal refinery in Corpus Cristi, Texas, has studied a takeover of miner Sigma Lithium Corp. The world’s No. 2 miner Rio Tinto Group is hunting for lithium deals, but expects to be outbid by car producers, CEO Jakob Stausholm said last month.

Car manufacturers are also putting more senior managers, rather than junior procurement executives, in charge of discussions over metals, according to Kent Masters, CEO of Charlotte, North Carolina-based Albemarle Corp., one of the world’s top lithium suppliers.

“It’s obviously become a more critical issue for OEMs,” Masters told the Florida conference, organized by Bank of Montreal. “We’ve been able to change the level at which we interact with those customers, and they’re investing significant amounts of money in electric vehicles.”

Volkswagen AG has pledged to boost cooperation with Canada’s mining sector, formed a joint venture with Belgium-based materials supplier Umicore SA and has a deal with would-be lithium supplier Vulcan Energy Resources Ltd. which aims to develop an operation in Germany.

VW is “sounding out the market” and is in talks with “many potential partners” on strategic raw materials, according to a spokesperson. “Various instruments are possible, from long-term agreements to streaming deals and equity investments,” the person said. Hedging of commodities prices is likely an important tool to cope with rising raw material costs, according to the group’s CFO Arno Antlitz.

About $265.5 billion has been invested in developing EVs since 2018 but only $40 billion on raw materials, according to Battery Materials Review, which tracks investment in the sector.

Even so, some said moves by car manufacturers to buy directly into metals could be doomed by their lack of expertise in mining and dismal record on acquisitions, according to Jeff Currie, Goldman Sachs Group Inc.’s head of commodities.

“It always ends in tears,” he told Bloomberg Radio. “It requires an expertise that is very different than producing cars.”

(By Danny Lee, David Stringer and Jacob Lorinc, with assistance from Yvonne Yue Li, Monica Raymunt, Annie Lee, Mark Burton and Keith Naughton)

 CRIMINAL CAPITALI$M

LME faces further legal action in London court

Reuters | March 7, 2023 |

Court in London. Credit: Adobe Stock

The London Metal Exchange (LME) faces further legal action in London, court filings showed on Tuesday, without giving further details of the move by a company called Double Eight Ltd.


The LME faced two fresh lawsuits, filings showed on Monday, from ten hedge funds and asset managers after it enraged investors last year by cancelling nickel trades.

The world’s largest and oldest metals market annulled billions of dollars of trades after chaotic price action, and suspended trading for the first time since 1988.

The nickel cancellations took place on March 8, 2022 and the wave of legal filings was due to a one-year time limit approaching for claims that allege the LME violated the Human Rights Act, a source close to the situation told Reuters.

Double Eight is a private financial company based in England that deals in securities, according to UK company filings.

No court documents were immediately available showing why Double Eight was taking action against the LME, which is owned by Hong Kong Exchanges and Clearing Ltd.

There was no immediate comment from the LME.

(By Eric Onstad; Editing by Louise Heavens and Alexander Smith)

AQR leads 10 hedge funds suing LME over nickel trade debacle

Bloomberg News | March 6, 2023 | 

The London Metal Exchange floor (Image: HM Treasury – Flickr)

AQR Capital Management formally filed a London lawsuit against the London Metal Exchange, joining nine other hedge funds in a series of claims targeting the exchange’s decision to cancel billions of dollars in nickel trades last year.


AQR and DRW Commodities previously sought key documents from the exchange in court and alongside Flow Traders BV, Capstone Investment Advisors LLC and Winton Capital Management Ltd. are seeking around £80 million ($96.3 million), according to the LME.

The fresh legal action adds to troubles for the world’s biggest metals exchange flowing from its move on March 8 last year to suspend nickel trading and cancel contracts amid a runaway short squeeze. The LME has argued the action was necessary to avoid a $20 billion margin call that could have threatened the bourse’s own survival.

Pala Investments Ltd. and other funds including Commodity Asset Management LLC also filed a suit in London on Monday.

The LME said in a Hong Kong Stock Exhange filing that the AQR lawsuit is “without merit.” The statement didn’t refer to the Pala claim.

The move effectively bailed out top nickel producer Tsingshan Holding Group Co., which had positioned itself for a fall in prices, as well several LME brokers who were facing huge margin calls. On the other side of the trade were hedge funds and algorithmic investors, many of whom reacted with fury as their hugely profitable contracts were torn up.

The new claim follows judicial review proceedings brought by Elliott Investment Management and Jane Street last year. LME said in the filing in its statement that the AQR claims will be on hold pending the outcome of those.

The UK’s market regulator last week opened a rare enforcement investigation into the LME’s conduct during the crisis, in a move that could potentially lead to large fines and formal criticism. The Bank of England also said it will appoint an independent monitor to oversee an overhaul of the LME’s clearinghouse.

A year on from the squeeze, the LME nickel market remains plagued by low liquidity that’s contributing to erratic price swings and undermining confidence in its role as a global benchmark. The bourse is planning to finally reopen the market during Asian trading hours later this month, which it hopes will provide a significant boost to liquidity.

Commodity Asset Management, Pala Investments Ltd., Welton Investment Partners and Sunrise Capital Partners were all contacted for comment. Pentimon Ltd. couldn’t be reached for comment.

(By Upmanyu Trivedi and Mark Burton, with assistance from Jonathan Browning and Eddie Spence)