Bolivian authorities investigate tailings pond collapse near Potosí
Valentina Ruiz Leotaud | July 31, 2022 | 

Mud and mine residue flowing through a Potosí river. 

(Image by Reyna Menacho, Facebook).

Bolivian authorities are investigating the causes behind the collapse of a tailings facility near the southern town of Potosí, an accident that took place a week ago and that caused a mix of mud and mine residue to reach at least four rivers that drain into the Pilcomayo River.


Pilcomayo is an international, 1,100-kilometre-long river that passes through Bolivia, Argentina and Paraguay and that defines most of the border between the latter two before it joins the Paraguay River near Asunción.

The tailings pond that failed belonged to the Departmental Federation of Mining Cooperatives whose members extract silver and zinc through artisanal means in the nearby areas.

Following a visit to the site where the accident took place, Potosí city councillor Reyna Menacho published a series of videos on social media pointing out that the residues are starting to sediment, which means that it may take about 10 years for the ecosystem to fully recover.

Together with Menacho were representatives from the Mining Administrative Jurisdictional Authority (AJAM), the governor’s office of the Potosí Department, the Bolivian Mining Corporation, and the Mining and Forestry Environment Commission, among others. They carried out a full inspection that allowed them to find clandestine mining work in the vicinity of the Mazuni Lagoon, something the AJAM had been reporting since 2017.

According to the councillor, the illegal mineshafts, some of them over 80 metres in depth, were destroyed and authorities made a commitment to monitor the area and dismantle similar operations that “that threaten the environment and public health.”

This is not the first time this type of accident has occurred in Bolivia, a situation that has been criticized by its neighbours to the south.

Los Pelambres’ desalination plant 86% complete

Valentina Ruiz Leotaud | July 31, 2022 | 

Los Pelambres miner. (Image by Antofagasta, Flickr).

Chilean miner Antofagasta (LON: ANTO) announced that the desalination plant that is part of the $2.2-billion expansion of Los Pelambres is 86% complete while the offshore infrastructure that is meant to bring in the seawater is 87% complete.


According to the miner, this project will turn Los Pelambres into the first mining operation that uses seawater to produce copper in Chile’s central region, and it will benefit both the existing and expanded operation in cases of prolonged or severe drought.

Construction is slated to be finished by the end of the year, and the plant is expected to provide 400 litres per second of industrial-quality desalinated water.

“This desalination plant will allow us to start incorporating desalinated water into our processes, with which we not only move forward in creating a sustainable operation but also adapt to the long drought caused by climate change,” Alejandro Vásquez, general manager of Minera Los Pelambres, said in a media statement.

“This is the first of many investments that we are putting forward to be able to use mainly desalinated and recycled water starting in 2025.”
How it works

Vásquez explained that a gravitational capture system that doesn’t employ a motor or suction will feed the plant with seawater using an 800-metre-long pipe that is topped with a filter.

The executive also said that of every 10 litres of seawater that enter this desalination plant, five will be returned without any change in temperature or additional chemical components but will have twice the regular salt content.

To deal with the extra salty water, a discharge system will be set up, including a pipeline that will be located one kilometre offshore and 26 metres deep. The submarine pipe is 1.2 metres in diameter and will have 10 diffusers to facilitate the dilution of salt in the sea aided by sea currents.

“According to the studies we’ve performed, seven metres from this diffuser, there will no longer be any difference between the discharge and normal seawater,” Vásquez said. “Feedback regarding the operation of hundreds of similar desalination plants around the world, some of them in northern Chile, shows that they have no negative impact on the marine environment.”

The manager of Los Pelambres said that regardless of the evidence from elsewhere, his team will carry out continuous monitoring of the marine environment, in accordance with the provisions of the Environmental Qualification Resolution that authorized the construction and operation of the plant.

The mine’s expansion project is ongoing and expected to add 60,000 tonnes of copper a year over the first 15 years to Antofagasta’s overall production and boost throughput at the plant from 175,000 tonnes of ore a day to an average of 190,000 tonnes a day, and plans for further expansion are also underway.

If Antofagasta can secure the required environmental and regulatory approvals for that second project, the company is considering doubling the capacity of the desalination plant. This means that the facility will allow for 90% of the operation to run using desalinated and recycled water starting in 2025.

“This way, we can stop using water from the Choapa River,” Vásquez said.

Toyota-Panasonic battery JV to buy lithium from ioneer’s Nevada mine

Reuters | July 31, 2022 | 

Credit: Prime Planet Energy & Solutions

A joint battery venture of Toyota Motor Corp and Panasonic Corp will buy lithium from ioneer Ltd’s Rhyolite Ridge mining project and use the metal to build electric vehicle batteries in the United States.


The binding supply deal, announced on Sunday, is the second in less than a month for ioneer and a strong vote of confidence in a project that is racing to be the first new US source of the battery metal in decades.

Under the terms of the deal, ioneer will supply 4,000 tonnes of lithium carbonate annually for five years to Prime Planet Energy & Solutions (PPES), which was formed by Toyota and Panasonic in 2020 to better compete with battery market leader Contemporary Amperex Technology Co Ltd (CATL).

Supplies are slated to begin in 2025, a timeline that depends in part on ioneer obtaining financing and permitting.

The deal includes a commitment from PPES that ioneer’s lithium will be used to build EV battery parts inside the United States for the US EV market. PPES, which is based in Japan, has reportedly been considering building a battery plant in western North Carolina.

“The whole purpose of this agreement is for this lithium to be used in the United States,” James Calaway, ioneer’s executive chairman, told Reuters.

A proposed expansion of the US EV tax credit would require that lithium and other EV minerals be sourced domestically or from allies starting as soon as next year. That potential change, which is under debate in Congress, has shown a spotlight on the nascent US development plans of battery and automakers.

“Having an agreement with ioneer provides PPES a first step in securing a US supply of lithium,” said PPES President Hiroaki Koda, who added he has “confidence in ioneer’s technology.”

The amount of lithium that ioneer will supply PPES is enough to make batteries for about 150,000 EVs annually, though that figure would vary depending on design and other factors.

Australia-based ioneer aims to produce about 21,000 tonnes of lithium in Nevada annually starting in 2025. It signed a supply deal with Ford Motor Co in mid-July and last year with South Korea’s Ecopro Co.

The Rhyolite Ridge project has faced push back from some conservationists who worry it could harm a rare flower known as Tiehm’s buckwheat, though ioneer has said it believes it can safely extract lithium while also protecting the plant.

“We’ve figured out how we can build the mine and not touch the Tiehm’s buckwheat,” said Calaway.

(By Ernest Scheyder; Editing by Daniel Wallis)

GM prepaying Livent $198 million for guaranteed lithium supply

Reuters | August 2, 2022 |

GM is launching at least 20 new all-electric vehicles by 2023. (Image courtesy of General Motors.)

General Motors Co is prepaying Livent Corp $198 million for a guaranteed six-year supply of lithium, a deal that reflects the auto industry’s rising worry about a tightening market for the electric vehicle battery metal.


Prepaying cash for a guaranteed metal supply is unusual in the mining industry. The deal shows GM’s eagerness to ensure it has sufficient raw materials to meet its goal of producing 1 million EVs annually in North America by 2025.


Both companies announced the broad brushstrokes of the deal last week, but Livent announced financial terms on Tuesday as it posted a better-than-expected profit and raised its forecast for the year.

“GM is certainly thinking for the long term here,” Paul Graves, Livent’s chief executive, told investors on a Tuesday conference call. “By making the advanced payment, they are clearly giving us the commitment that we were looking for.”

Graves has long prodded automakers to work closer with lithium producers. In an interview with Reuters last fall, Graves warned that unless the auto industry signed long-term deals, “there may be periods where there is just insufficient lithium.”

Livent produces lithium in Argentina and has processing facilities in the United States.

Livent, which also supplies BMW, expects to receive the GM prepayment later this year. The company is set to start supplying GM in 2025 at a contractual price per tonne, though neither company disclosed volume.

Philadelphia-based Livent reported second-quarter net income of $60 million, or 31 cents per share, compared with $6.5 million, or 4 cents per share, a year ago.

Excluding one-time items, Livent earned 37 cents per share. By that measure, analysts expected earnings of 29 cents per share, according to IBES data from Refinitiv.

Livent said expansion of its Argentina site is on schedule. The company’s stock rose slightly in after-hours trading.

(By Ernest Scheyder; Editing by Jonathan Oatis, Bill Berkrot and David Gregorio)

CRIMINAL CAPITALI$M; GOLDBUGS

From profits to pay, JPMorgan’s gold secrets spill out in court
Bloomberg News | August 1, 2022 |

JPMorgan Chase Tower. Credit: Wikimedia Commons

The trial of JPMorgan Chase & Co.’s former head of precious metals has offered unprecedented insights into the trading desk that dominates the global gold market.


Michael Nowak, who ran precious metals trading at JPMorgan for over a decade, is being tried in Chicago along with colleagues Gregg Smith and Jeffrey Ruffo for conspiring to manipulate gold and silver markets. The focus now is on the jury, which began deliberations late Friday, but the proceedings have already shone a new light on the inner workings of the business, from its profitability and market share to its largest clients.

Annual profits

The court was shown internal figures detailing the bank’s annual profits from precious metals, the first time such detailed information has ever been made public. JPMorgan’s earnings reports don’t break out the results from the precious metals desk, or even its broader commodities unit. A spokesperson declined to comment on the disclosures in the trial.

In summary: the business is a consistent moneymaker for JPMorgan, notching up annual profits between $109 million and $234 million a year between 2008 and 2018. The lion’s share of that comes from trading in financial markets, but the bank does plenty of physical business as well. Trading and transporting physical precious metals makes the bank about $30 million a year on average.

Still, the profits disclosed in the trial have been overshadowed more recently: in 2020, JPMorgan made $1 billion in precious metals as the pandemic created unprecedented arbitrage opportunities, according to people familiar with the matter.

Market share

JPMorgan holds tens of billions of dollars in gold in vaults in London, New York and Singapore. It is one of four clearing members of the London market, where global gold prices are set by buying and selling metal held in a few London vaults — including JPMorgan’s and the Bank of England’s.

JPMorgan is the biggest player among a small group of “bullion banks” that dominate the precious metals markets, and internal documents presented by prosecutors provided a glimpse of just how dominant a role the bank has played.

In 2010, for example, 40% of all transactions in the gold market were cleared by JPMorgan.

Big bonuses

JPMorgan’s top precious metals employees on the desk were remunerated handsomely, and some jurors audibly gasped when the court was told how much the defendants had earned.

Ruffo, the bank’s hedge fund salesman, was paid $10.5 million from 2008 to 2016. Smith, the top gold trader, got $9.9 million. Nowak, their boss, made the most of all: $23.7 million over the same period.

Their pay was linked to the profits they made for the bank. FBI agent Marc Troiano, citing internal JPMorgan data, told the court that the total profit allocated to Ruffo from 2008 to 2016 was $70.3 million. Smith generated about $117 million over the same period, while Nowak made the bank $186 million, including $44 million in 2016.

Key clients

Hedge funds like Moore Capital, Tudor Investment Corp and George Soros’s eponymous firm were some of the desk’s most important clients. Getting access to those clients was the main reason for retaining Ruffo after the bank’s acquisition of Bear Stearns, according to ex-trader Christian Trunz, who testified against his former bosses and referred to Ruffo as the best salesman on Wall Street. Being a top client of JPMorgan came with perks: employees at the funds could be provided with free tickets to the US Open, according to messages involving Nowak shown during the trial.

Another set of important clients were central banks, which trade gold for their reserves and are among the biggest players in the bullion market. At least ten central banks held their metal in vaults run by JPMorgan in 2010, according to documents disclosed in court.

(By Eddie Spence and Jack Farchy)

Canadian government sued by environmental groups over 20 oil and gas “sleeper” permits

Stefan Labbé - Business in Vancouver | August 1, 2022 |

Flock of Seagulls and a lone Tufted Puffin. Near Tofino, Vancouver Island, Canada.  

Two environmental groups are suing the Canadian federal government over 20 oil and gas “sleeper” exploration permits originally granted off the coast of British Columbia in the late 1960s and 1970s.


The application for judicial review, filed in a federal court on behalf of the World Wildlife Fund Canada and David Suzuki Foundation, claims the federal government has unlawfully extended the permits in violation of the Canada Petroleum Resources Act.

“The central argument that we’re advancing is that those permits are expired and the federal government has unlawfully kept them alive and on the books for more than 40 years,” said Ecojustice staff attorney Ian Miron, who is repressing the two plaintiffs.

“We certainly think that the threat of oil and gas exploration… is not an abstract one.”

Miron pointed to the Bay du Nord offshore oil project approved this year off the coast of Newfoundland and Labrador as an example of how the government is still approving major extraction projects despite its climate commitments.

The permits cover an area spreading out over 5,840 square kilometres in the Hecate Strait Glass Sponge Reefs Marine Protected Area and the Scott Islands Marine National Wildlife Area off the northwest coast of Vancouver Island.

Chevron and ExxonMobil’s oil and gas exploration permits cover 5,840 square kilometres of the Hecate Strait Glass Sponge Reefs Marine Protected Area and the Scott Islands Marine National Wildlife Area – WWF Canada

The Scott Islands attract five to 10 million migrating birds every year.

The coastal sanctuary has the highest concentration of breeding seabirds on Canada’s Pacific coast, and the islands provide habitat for 40% of all B.C.’s seabirds.

That includes several species listed as “at risk” by the federal government, including marbled murrelets, short-tailed albatross and the sooty shearwater.

Four of the Hecate Strait glass sponge reefs, meanwhile, are thought to be 9,000 years old. Before they were discovered, they were thought to be extinct worldwide, only surviving in the fossil record dating back to the late Jurassic period.

Described as “exceptionally fragile” and vulnerable to human activity, the glass sponges “play an important role in marine carbon and nitrogen processing,” according to the Ministry of Environment and Climate Change.

“In a nutshell, these two ecosystems support a thriving biodiversity but also contribute to thriving culture and livelihoods for the communities along the coast,” said Miron.

Miron said the environmental groups are taking the matter the court as a last resort after questions to the federal government and the two companies that hold the permits — Chevron Canada and ExxonMobil Canada — “fell on deaf ears.”

“We do think there is some urgency to taking these permits off the books,” said the attorney. “Our clients believe that the mere existence of these permits in these protected areas is actually hampering efforts to fully protect and manage the areas.”

Glacier Media reached out to the Ministry of Natural Resources and ExxonMobil Canada, but neither responded to a request for comment by the time of publication.

A spokesperson for Chevron Canada declined to comment, citing pending litigation.

If the defendants choose to fight the application for judicial review, a case could reach a federal court within a year, says Miron.

(This article first appeared in Business in Vancouver)

Not enough women: miners meet in Australia under a cloud after sexism report

Reuters | August 2, 2022 

Eight-month independent review of Rio Tinto’s workplace culture uncovered shocking reality. 

Global investor and economist Dambisa Moyo this week became the first woman ever to deliver the keynote speech at the mining industry’s annual conference in Western Australia, a boost for the sector as it faces scrutiny over perceived sexism.


Yet while Moyo had top billing, she is one of only five women out of 71 speakers due to address this year’s event in Kalgoorlie-Boulder, a fact that has not gone down well with some delegates.

“There are more speakers who have the name Peter, Mark, and James than there are women at the whole event,” Fortescue Metals Group Chief Executive Elizabeth Gaines, who addressed the conference on Tuesday, told Reuters.

A bombshell report published in June by the state government of Western Australia, home to the bulk of the country’s iron ore industry, detailed cases of “horrifying” behavior against women and criticized mining firms including BHP and Rio Tinto for overlooking criminal behavior.

“If you had asked me at the start of my professional career whether I thought I would still be talking about gender diversity in 2022, I would have thought that we would be living it by now,” Gaines said in her conference speech.

“Unfortunately, the reality is that we are still having the same conversations about equality that we had 30, 20, and 10 years ago,” added Gaines, who was forced to appear at the event virtually after her flight was canceled due to bad weather.

In February Rio Tinto published its own report which found that nearly 30% of women employed by the global mining giant had experienced sexual harassment at work, with 21 women reporting actual or attempted rape or sexual assault.

The mining conference is the first major industry event that international visitors and regional executives have been able to attend since the pandemic began, with a record of over 2600 delegates in attendance.

Jessica Farrell, asset president at BHP Nickel West and another speaker at the conference, also criticized the lack of female participation at the event.

“The onus for that is on both the conference itself, but also on the members,” she told Reuters.

Farrell gave evidence on behalf of BHP in the West Australia parliamentary inquiry into sexual harassment in the industry.

“You look at the information there and it’s just simply got to stop. And we are the ones that can make that change,” she said.

“We want our industry to be one where all people can come together and feel safe and respected at all times, and perform at their very best.”

BHP said its senior leadership team is balanced, and over the past year the percentage of women reporting to the executive has grown to 38% from 25%. Since 2016, the company has increased the number of women working at BHP from 17% to 32%.

Australia accounts for about half of the world’s iron ore exports, and women have long complained of sexual harassment in mining camps and offices.

The recent findings led top miners to set diversity targets, regulate alcohol consumption in camps, and increase safety checks at camps and sites.

But the sector’s Australian workforce of 150,000 is still predominantly – five-sixths – male, a gender mix that’s little improved since the industry’s beginnings over a century ago.

Top miners last month identified labor shortages in Australia as one of the key reasons affecting production and revenue.

There’s intense demand for people with skills in statistics, analytics, robotics and artificial intelligence, Gaines said.

“Which is why it’s more important than ever that we equip the workforce of the future for these types of jobs and attract the best and the brightest minds from across the diversity of our population,” she said.

(By Praveen Menon; Editing by Susan Fenton)

Climate bill would put US back in global race for EV leadership

Bloomberg News | August 2, 2022 |

Electric vehicle. (Image by bixusas, Pixabay).

This week, everyone working on energy and climate issues in the US is intensely focused on the Inflation Reduction Act, looking for smoke signals as to whether it will pass and if any modifications will be made.


The bill is a potential boon to many sectors of the green economy, including electric vehicles. Here are my team’s takeaways on some of the important EV-related aspects of the bill:


Tax credit extension

The revival of the $7,500 tax credit is a big deal, especially for Tesla, General Motors and Toyota. All three have sold at least 200,000 vehicles that were eligible for the incentive as the system is set up now. Once manufacturers cross that threshold, buyers of their cars start to receive reduced credits, and eventually none at all. Ford and Nissan are nearing this point, as well.

The bill would make the full incentive available again starting next year, and importantly, would allow consumers to access the perk at the point of sale instead of during tax season.

Automakers that have had sold fewer EVs might, in theory, be upset to see the 200,000-vehicle cap lifted, since it was bound to give them an advantage in the near term. But in practice, most should be happy to see the additional purchase support, since fuel economy regulations are set to tighten in the years ahead. This change will make it much easier to sell EVs and hit their targets.

While tax credits are important, it’s worth noting that Tesla buyers haven’t been eligible for federal tax credits for well over two years, and that hasn’t stopped the company from dominating the EV segment by accounting for more than 70% of battery-electric models sold in the US last year. Making products that consumers actually want is still more important than making products that qualify for tax credits.

Content requirements

As my Bloomberg News colleagues have pointed out, the requirement that battery materials are sourced locally could be challenging for carmakers to navigate. There’s also a requirement that a share of other components are manufactured in North America.

In auto board rooms across the country this week, there are likely requests flowing down the organization and out to suppliers to determine which models will qualify and how quickly sourcing can be localized. BNEF’s analysis indicates mid-stream refining capacity for battery metals is more likely to be an issue than raw material supply.

A boost for commercial EVs

New commercial EV provisions allow vehicles weighing less than 14,000 pounds to claim the $7,500 clean car tax credit. Heavier vehicles can have the lesser of two amounts: 30% of the differential between the clean vehicle and a comparable internal combustion engine vehicle, or a $40,000 incentive.

This would fully cover the cost of a 150 to 250 kilowatt-hour battery pack today, and will do more in the future as prices come down. It would be an immediate and significant boost to the nascent commercial EV market in the US, which lags Europe and China in most segments.

The bill also includes $3 billion to help the US Postal Service decarbonize its fleet and shift to EVs. The Postal Service recently announced it was increasing the portion of its initial 50,000 mail-truck purchase from Wisconsin-based Oshkosh that will be electric to 50%, a major win for activists who fought against the initial decision to go almost exclusively with combustion vehicles.

Loan programs

The package also includes $2 billion to help automakers retool and convert existing facilities to manufacture clean vehicles, and allows for as much as $20 billion in loans to help auto companies build new clean-vehicle facilities across the country. Ford, GM and Stellantis are likely to benefit from the conversion portion going into a contract-bargaining year with the United Auto Workers union. EV manufacturing in the US is already ramping up quickly, and this provision — which has largely flown under the radar — will further accelerate progress.

Importantly, many plants being built or retooled for EVs are in Republican states. For example, VW invested $800 million in its plant in Chattanooga, Tennessee, and just announced last week it has started producing the first ID.4 electric sport utility vehicles there. Having a strong EV manufacturing base in red states should help prevent EVs from being a political football as the next federal election cycle rolls around.

Outlook

A sense of scale is important here. The bill would extend EV tax credit availability out to 2032. Over that period, BNEF expects around 175 million light-duty vehicles will be sold in the US. As it stands now, a sizable and growing portion of those will be eligible for a tax credit.

There’s lots more to process — BNEF clients can access our full initial take here — but my initial feeling is that the bill, coupled with the stricter fuel-economy regulations the Biden administration is putting in place, should put the US right back in the race for EV leadership. China is off to a very strong head start, but these are still early days. Don’t count the US out.

(By Colin McKerracher, with assistance from Corey Cantor and Ethan Zindler)

First mover New Pacific, other juniors make headway in once off-limits Bolivia

Tom Azzopardi | August 1, 2022 

Silver Elephant’s Pulacayo silver-lead-zinc project in Bolivia. 

Credit: Silver Elephant Mining Corp.

Once considered a pariah, Bolivia is quickly gaining a reputation as an exciting jurisdiction for mineral exploration.


First in was New Pacific Metals (TSXV: NUAG) which acquired the Silver Sand project in 2017 and signed a first-of-its-kind mining production contract with state mining firm Comibol for the surrounding 56-sq.-km land package. The company is now advancing the project in central Bolivia’s silver-tin belt to production and exploring several promising satellite targets.

But since New Pacific Metals pushed the door open five years ago, half a dozen more listed companies have entered Bolivia, attracted by its huge and largely untapped geological potential.

Backed by Yamana Gold (NYSE: AUY) chairman Peter Marrone, among others, Eloro Resources (TSXV: ELO) is exploring the Iska Iska polymetallic deposit, close to Pan American Silver’s (TSX: PAAS; NASDAQ: PAAS) San Vicente mine. Silver Elephant (TSX: ELEF) is also exploring the Pulacayo project, 139 km north of San Vicente.

Related: Lithium mining: ‘A new Bolivia’, says EnergyX CEO

As multinationals pull out of the country, juniors are seeing opportunities in operating assets which could then provide a platform for exploration.

Last March, Santacruz Mining (TSXV: SCZ) completed its acquisition of three mines from Glencore (LSE: GLEN), which announced plans to sell the mines after beginning arbitration proceedings in 2019 against Bolivia over the 2007 nationalization of the Vinto smelter). and is preparing to explore its largely ignored claims portfolio. Andean Precious Metals (TSXV: APM) is exploring a couple of sites after buying the San Bartolome silver mine in 2017 from Coeur Mining (NYSE: CDE), which pivoted to a focus on North America.

More juniors are jostling to come in.

NOCs, Not Big Oil, Are Responsible For Most Emissions

THE OLD STATE CAPITALI$M VS MONOPOLY CAPITALI$M TROPE

By Haley Zaremba 

- Jul 31, 2022

Big Oil has caught a lot of flack for its slow decarbonization efforts, but much of the criticism may be misguided.

Emissions from National Oil Companies far outpace those of Big Oil.

Not only do National Oil Companies emit more, but they also rake in more profit and receive much less attention than their private counterparts.


While much of the global pressure toward decarbonization has been directed toward privately owned and operated oil supermajors like BP, ExxonMobil, and Shell, a new report from the Economist suggests that much of this pressure and blame is misguided. It’s not that Big Oil doesn’t need to change its focus, strategy, and commitments in order to cut greenhouse gas emissions quickly and significantly enough to avoid the worst impacts of climate change – it does. The thing is, the emissions of privately owned oil companies pale in comparison to the enormity of state-owned oil enterprises, which are producing most of the oil, emitting most of the greenhouse gases, raking in most of the profits, and receiving much less attention. In fact, the Economist article, titled “State-run oil giants will make or break the energy transition,” says that in comparison to Big Oil, national oil companies (NOCs) are “enormous oil.” Together, NOCs represent three-fifths of the world’s crude oil production, half of global natural gas production, and two-thirds of the world’s remaining proven oil and gas reserves. “Four—Adnoc of the United Arab Emirates (UAE), Saudi Aramco, pdvsa of Venezuela and QatarEnergy—possess enough hydrocarbons to continue producing at current rates for over four decades.”

Taking into consideration the sheer scale of NOCs’ production power, it does make the global attention to these institutions’ climate actions (or rather non-actions) particularly stark and worrying. Especially when you take a look at just how bad most NOCs’ track records are when it comes to going green. To be clear, Big Oil’s track record isn’t stellar either, especially west of the Atlantic, but the greenhouse gas emissions of most supermajors have already stabilized or peaked. By contrast, just two NOCs can say the same: Brazil’s Petrobras and Colombia’s Ecopetrol.

So why aren’t we going after the big fish? The answer, of course, is complicated. Decarbonization is political no matter how you slice it, but pressuring governments themselves to divest of the very industry keeping their state economies afloat and their politicians in office is tricky and divisive business. Many countries with state-run oil companies are volatile nations with monopolized economies and no contingency plan if oil was to go the way of the dodo. What’s more, all too often, petrostates make for oil autocrats with itchy trigger fingers. “No matter how you define a petrostate – whether you look at a state’s oil-derived wealth, its dependence on oil revenues, or its exports and relative importance to world markets – there is strong evidence that petrostates are more likely than other countries to start wars,” Foreign Policy reported last month.

Not all NOCs are created equal, of course. They are as diverse as the nations that house them. Unsurprisingly, richer countries tend to have better run, more ecologically responsible outfits. They also often happen to have more geologically advantageous oil reserves – part of what made them rich in the first place. By contrast, many poor nations’ NOCs are poorly run, with tendencies toward inefficient and dirty practices. “The Algerian and Venezuelan companies emit three to four times as much carbon in oil production as do the more geologically blessed and better-managed firms such as [the United Arab Emirates’] Adnoc and Saudi Aramco, and flare seven to ten times as much methane, another potent greenhouse gas, per barrel as does QatarEnergy,” the Economist reports.

Ultimately, the “easy” tactics of boycotting, protesting, and naming and shaming that have some impact in the private sphere are effectively toothless strategies when it comes to state-run oil companies. Again, many of the NOCs with the dirtiest operations are operating in some of the world’s poorest countries, and no amount of public pressure will change their economic reality. Ultimately, it comes down to climate finance and holding the world’s richest nations accountable for their pledges to financially support the costly decarbonization efforts of the world’s poorest countries – a promise which has so far proven to be an empty one.

By Haley Zaremba for Oilprice.com

Globally more is being spent on coal than copper mining

Frik Els | August 1, 2022 

Coal mining is back in the black. Stock Image.

New data from Industrial Info Resources show 4,790 metals and minerals capital projects (including mining, processing and refining) with a combined investment value of $443 billion are currently under construction around the world. A further 10,586 projects are under active planning and engineering – for a combined total of $1.11 trillion.


Joe Govreau, VP of Research at Industrial Info Resources, says that is an 8% increase from the preceding period as projects delayed by the pandemic are being restarted. Mining projects – from early exploration through to construction – make up half the global total.

The top seven miners have now upped capital outlays by more than 50% from the depths of the industry downturn in 2017. Govreau sees “no reason why expenditures won’t continue to be elevated for the next several years or more as companies look to increase production to meet expected demand growth from the energy transition.”

Red metal goes green

The decarbonisation revolution is not off to a great start though, not if you compare investments in the worst of the fossil fuels in terms of emissions – coal – with that of copper, without which there simply is no green energy transition.

Copper’s metal intensity – kilograms required per MW produced – of renewable energy sources like solar and wind is nowhere near that of coal or gas. To generate 1MW of offshore wind energy around 8.2 tonnes of copper have to be installed. The same figure for coal is 882kg.

According to one study, in order to reach net-zero by 2050, 19 million tonnes of additional copper need to be delivered. That implies a new La Escondida – the world’s largest copper operation by a wide margin – must be discovered and enter production every year for the next 20 years.

IIR tracks 708 active copper projects with construction kickoff in 2022/2023 around the globe. The combined value of these projects, which includes mining, processing and smelting, is $68.5 billion.


Unsurprisingly, Chile, the world’s largest copper producer and reserves holder, leads the way with 123 projects worth $18.3 billion followed by China boasting 119 projects with a combined value of $13 billion and Russia which is spending $12.7 billion on 24 new copper projects.

In contrast, the US is spending $3.8 billion while Canadian spending on new copper ventures is a paltry $484 million, behind Iran and Vietnam. Govreau also points to Peru, the world’s number two producer, which is spending only $602 million after pandemic lockdowns and social unrest brought development to a standstill.

Back in black

In contrast to copper, coal has a pipeline of 1,863 projects around the globe with a value of $80.8 billion.

Govreau says coal consumption and production jumped over the past year on the back of increased demand for power generation and steelmaking. Consumption of metallurgical coal is expected to be strong again this year.

The Chinese ban on Australian coal is a boost for swing suppliers – US coal exports were up 26% last year, says Govreau. Asian nations are also upping investment in coal mining, and in contrast to Europe and the US, more coal-fired plants are being built than are being retired.

China derives 65% of its electricity from coal, has vast amounts of reserves and is heavily investing in consolidating and automating its coal mines to supply its massive power generation fleet. Coal mining is also attracting investment in the near term because soaring gas prices makes it a cheaper alternative for electricity generation.

Glencore is cashing in on coal to dodge big mining’s slowdown

Bloomberg News | August 2, 2022 

Mount Owen thermal and coking coal mine in Australia. Image: Glencore

The world’s biggest miners have spent the past two weeks reporting lower profits, shrinking dividends and a worsening outlook as the year rolls on. Next up: Glencore Plc looks set to buck the trend.


While commodities like iron ore and copper have retreated as gloom settles over the global economy, Glencore is enjoying two key advantages over its mining rivals — a powerful trading business that thrives in volatile markets, and a suite of coal mines now churning out previously unimaginable earnings thanks to the global energy crunch.

As a result, analysts are forecasting record profits and returns when Glencore reports on Thursday, with first-half earnings seen more than doubling from a year ago.

It’s a sharp reversal from previous years. The company had lagged its biggest rivals, largely because it doesn’t mine any iron ore, a commodity that helped supercharge earnings for mega miners BHP Group and Rio Tinto Group. But China’s Covid controls have sapped demand for the steelmaking ingredient as investor worries about a global recession weigh on commodity prices more broadly.

Rio Tinto last week reported a sharp decline in first-half profit and cut its dividend in half, while Anglo American Plc announced lower earnings and shareholder returns. Other miners from Vale SA to Lundin Mining Corp. also disappointed.

For now, the companies are still making good money, if not at last year’s record levels. It was Anglo’s second-best first half on record, while Rio paid its second-biggest interim dividend. But the increasingly uncertain outlook and weakening prices have cast a shadow over the underlying numbers, particularly as relentlessly rising costs across the industry add to profit-margin pressures.

“Prices have sharply declined from first-half averages, so these reported results do not reflect the reality of the markets today,” said Christopher LaFemina, an analyst at Jefferies Group LLC. “We are in a stage of the cycle during which prices are falling and costs are still rising. Not a good combination.”

Against this backdrop, Glencore is expected to deliver its best-ever results. The company has already said that its trading profit will exceed the top end of its guidance range, after it cashed in on volatile markets.

But it’s coal — the dirtiest fuel — that is seen as the really big earner.

Prices have soared to records this year as a global energy crisis boosts demand for fossil fuels around the world. Utilities are curbing imports from Russia due to the war in Ukraine, tightening the amount of available supply, while surging natural gas prices are also increasing demand for coal.

That’s put Glencore in a position to return cash to shareholders on a scale that was previously the reserve of the iron-ore majors, with some analysts forecasting payouts could exceed $10 billion in total this year.

The current dividend policy is to pay $1 billion from its trading unit, plus 25% of free cash flows from the sprawling mining business.

Still, some of those expectations — at least for the half year — have been tempered after Glencore flagged that its profitable bets on volatile commodity markets have tied up more working capital than normal.

“The underlying result will be very strong, and when markets return to lower volatility this working capital will be released making it a temporary impact,” said Tyler Broda, an analyst at RBC Capital Markets. “For now, however, this could temper the cash returns expected at the half-year results.”

(By Thomas Biesheuvel)