Greenwashing Case Against Santos Could Set Global Precedent

By Felicity Bradstock - Nov 03, 2024

Israel's ban on UNRWA, the main aid provider in Gaza, could have catastrophic consequences for Palestinian refugees.

Experts believe Israel's move is politically motivated and aimed at undermining Palestinian refugee status.

The international community has condemned Israel's actions and Norway has called for a ruling from the International Court of Justice.


In the most recent in a long line of oil and gas companies to be accused of greenwashing, Australia’s second-largest independent oil firm is being sued by the Australasian Centre for Corporate Responsibility (ACCR) for misguiding consumers on its decarbonisation aims. The ACCR is a shareholder activist group that has purchased shares in several high-emissions companies to try to encourage them to pursue Paris Climate Agreement targets. It is not the first time that an activist organisation has accused an oil and gas company of greenwashing and misleading the public, but the outcome of the trial could have an impact on future legal action in the sector.

Monday marked the first day of the 13-day Santos trial in Australia’s federal court. The lawsuit, which was launched in 2021, claims that Santos did not have a proper basis for saying it had a clear strategy for reducing emissions by 26 percent, to 30 percent by 2030, and to achieve net-zero emissions by 2040. The ACCR says this constitutes misleading or deceptive conduct and puts the company in breach of Australian corporate and consumer laws. The case is the first of its kind and could provide the blueprint for lawsuits against oil and gas majors in other countries in the future.

The ACCR’s lawyer, Noel Hutley, stated, “We’ll be submitting that Santos lacked reasonable grounds for making these statements.” Hutley suggested that Santos’s climate strategy was “little more than a series of speculations … cobbled together in a matter of weeks”, rather than a comprehensive pathway to decarbonisation. The ACCR is using additional examples to support its argument that Santos was wilfully greenwashing its oil and gas activities, such as the company calling natural gas a “clean fuel”. Santos also referred to blue hydrogen, which is produced using fossil fuels, as “clean” and “zero emissions”.

Santos has often stated that its net-zero plans rely heavily on the deployment of carbon capture and storage (CCS) technology, to help decarbonise its operations. The company aims to expand its oil and gas production while reducing emissions by using CCS technology. However, ACCR argues that Santos made “a range of undisclosed qualifications and assumptions about CCS processes”. Dan Goucher, ACCR’s Director of Climate and Environment, stated, “We read annual reports and sustainability reports from a range of companies every day. And some of these claims are completely unjustified… The key point for us I guess is that it’s become very difficult for any investor to differentiate between companies making genuine claims and companies that are not genuine.”

Santos is worth approximately $22 billion and operates both onshore and offshore in Australia, the U.S., Papua New Guinea, and Timor-Leste. The court judgement is being watched closely by activist groups around the globe that hope it will put greater pressure on oil and gas companies to be more transparent about their environmental impact and climate efforts going forward. The ACCR hopes the court will forbid Santos from engaging in deceptive conduct in the future, as well as force the company to issue a corrective notice about the environmental impact of its activities.

Earlier in the year, Rob Bonta, the Attorney General of California, filed an amended complaint aimed at encouraging some of the biggest players in oil and gas to relinquish profits that were made while misleading consumers about their contribution to climate change. In June, Bonta filed a lawsuit against the American Petroleum Institute (API), as well as BP, Chevron, ConocoPhillips, ExxonMobil and Shell, for their deceptive conduct. Bonta accused the companies of false advertising and possible greenwashing. A press release said that the firms used words such as “clean” and “green” to make consumers believe their products were more environmentally friendly than they actually were.

Meanwhile, Italy’s oil major Eni was sued last year for alleged early knowledge of the climate crisis. It was the first climate lawsuit to be launched in Italy. Several environmental groups sought legal action, accusing Eni of “lobbying and greenwashing” to encourage higher levels of fossil fuel production despite having an awareness of the risks its products posed since 1970. The allegations are largely based on a study commissioned by Eni between 1969 and 1970 that determined rising fossil fuel use could result in a climate crisis within just a few decades.

The report by the Isvet research centre stated, “Carbon dioxide in the atmosphere, according to a recent report by the UN secretary, given the increased use of [fossil fuels], has increased over the last century by an average of 10 percent worldwide; around the year 2000 this increase could reach 25 percent, with ‘catastrophic’ consequences on climate.”

A new wave of lawsuits, aimed at forcing oil and gas majors to be more transparent about their environmental impact and climate efforts, is taking place in several countries around the globe. Environmental organisations and activists are no longer standing for greenwashing and are asking state and federal courts to impose restrictions on the use of misleading language, as well as force oil and gas companies to produce viable decarbonisation strategies with clear policies and mid-term targets to achieve their climate goals.

By Felicity Bradstock for Oilprice.com

BIDENOMICS

20 States See Gasoline Prices Fall Below $3 Ahead of Presidential Elections

By Charles Kennedy - Nov 04, 2024


A day before the presidential elections, U.S. national average prices per gallon at the pump have continued to fall, with both GasBuddy and AAA predicting a drop to under $3 “soon”.

On Monday, November 4, the national average price for a gallon of gasoline was $3.10, or three cents lower than a week ago and 32 cents lower than a year ago, according to AAA.

Last week, gasoline prices were given a further downward push by plummeting oil prices as a result of the market response to Israel’s decision to avoid targeting Iran’s oil and gas infrastructure. This combined with a regular decline in prices due to lowering seasonal demand, which is on track for this time of year, has kept both gasoline and diesel prices lower, with Gasbuddy noting that diesel “has not fallen to its lowest level in over three years”.

“While many Americans may incorrectly credit the upcoming election for the declines, politicians have little influence over the strong seasonal forces that drive prices lower in autumn,” Patrick De Haan, head of petroleum analysis at GasBuddy, said last week.

“With winter gasoline soon to reach the rest of California, and demand continuing to decline as Americans grapple with colder weather, the drop in demand is pushing gas prices down — not politicians on either side, as much as they might like to think they do. I expect the decline in gas prices will continue into and even beyond the upcoming election.”

Some 20 U.S. states are now enjoying gas prices under $3 per gallon, with the lowest prices in Texas, at $2.63 per gallon as of Monday. California continues to suffer the highest prices, at $4.548 per gallon.

Analysts largely believe that the presidential elections will have minimal impact on gas prices, with seasonal adjustments the main driver, despite the fact that American voters tend to perceive gas prices as a direct indicator of the health of the economy.

By Charles Kennedy for Oilprice.com

ABOUT TIME

Trudeau Government Orders Canadian Oil & Gas Firms To Cut Emissions

By Charles Kennedy - Nov 04, 2024, 12:30 PM CST


Canada is unveiling on Monday its plan to cap emissions from the most polluting sectors, including a requirement for oil and gas operators to reduce their greenhouse gas emissions by one-third by 2032.

At the end of last year, Canada’s federal government introduced a draft framework to cap pollution from the oil and gas sector to reduce emissions.

The plan proposes to cap 2030 emissions at 35% to 38% below 2019 levels while providing compliance flexibilities to emit up to a level about 20 to 23% below 2019 levels.

The government has said that it would publish the final version of the legislation by the end of 2024.

In the plan expected to be published in detail later on Monday, the government would be seeking to force oil and gas producers to have their emissions decline by 35% compared to 2019 levels sometime between 2030 and 2032.

“I think everyone should do their fair share,” Canada’s Environment Minister Steven Guilbeault told The Canadian Press in an interview ahead of the news conference to announce the plan.

“I think most Canadians — even those that aren’t my biggest fans — would agree that it’s not OK for a sector to not be doing its share, and that’s mostly what this regulation is about,” Guilbeault added.

The minister told The Canadian Press that the emissions reduction plan would face a backlash, but that the government is committed to advancing its climate goals.

The chief executives of Canadian oil sands producers have already spoken against plans by the federal government to impose a cap on emissions from oil and gas production.

Separately, the Business Council of Canada issued a statement on Monday, saying that “At a time when Canada’s economy is stalling, imposing an oil and gas emissions cap will only make Canadians poorer. Strong climate action requires a strong economy. This cap will leave us with neither.”

“Today’s announcement ahead of the U.S. presidential election also sends the wrong signal to our most important trading partner that looks to Canada as a secure and reliable source of energy,” the council added.

“A de facto cap on oil and gas production would restrict cross-border energy trade and harm our shared economic and security interests.”

By Charles Kennedy for Oilprice.com

COP29 to Shape the Future of Climate Finance

By City A.M - Nov 04, 2024

COP29, also known as the 'finance COP,' will focus on mobilizing private sector finance to support climate action in developing countries.

Key priorities for COP29 include formalizing the New Collective Quantified Goal on Climate Finance (NCQG) and discussing updated National Determined Contributions (NDCs).

The UK is leading efforts to mobilize private finance for net zero, with a focus on public-private collaboration and innovative financial solutions.



Policymakers are descending on Baku for COP29 to mobilise finance to support climate action in developing countries – and London is leading those efforts, says Chris Hayward

Hundreds of ministers, policymakers and financiers descending on Baku this month for COP29 will be met by an in-tray of crucial climate policy decisions. Dubbed the ‘finance COP’, this year’s conference puts the private sector at centre stage as governments debate who pays for the trillions of dollars required globally for the transition to net zero.

Key priorities for the negotiations include The New Collective Quantified Goal on Climate Finance (NCQG) which is set to be formalised at COP29. The outcomes of these discussions will be critical for mobilising finance to support climate action in developing countries. With the right outcome from the negotiations, the NCQG will provide a more ambitious financial framework for climate finance, foster global partnerships and generally strengthen the global response to climate change. Private sector support, with a particular focus on the mechanisms to deploy finance, will be critical to success.

In addition to this, governments will also discuss their updated National Determined Contributions (NDCs) which they have until February 2025 to submit outlining their plans for reducing emissions and adapting to climate change. More than ever, private finance will play a central role in the successful implementation of the plans put forward by companies.

Both within and beyond the formal negotiations, we are expecting a significant focus on the role of transition finance in reaching Net Zero. BloombergNEF estimates that to match their ‘economic transition’ scenario, annual investment must increase to $6.7 trillion per year. In the UK alone, a total of £2.7 trillion of investment is required between 2021 and 2035 to meet the nation’s net zero commitments – accounting for a five-fold growth in investments to approximately £50bn per year in 2030.

In the UK alone, a total of £2.7 trillion of investment is required between 2021 and 2035 to meet the nation’s net zero commitments

The world is still recovering from the economic shocks of Covid, the Ukraine war and subsequent high inflation. It is clear that government coffers alone will not be sufficient to fund the action needed to reach net zero. Private sector must be centre stage. The recently published Transition Finance Market Review which was co-sponsored by HM Treasury and the Department for Energy Security and Net Zero, with the secretariat being hosted and co-led by the City of London Corporation, highlights the need for innovative public-private sector collaboration. The Review recognises that governments must provide a level of certainty and clarity on climate action to drive private sector commitments. This includes calling for a new ‘Transition Finance Lab’ that will allow the development and testing of these financial solutions to ensure they are robust and market appropriate, and a Transition Finance Council – convened by the Corporation – which will monitor the UK’s progress on transition finance.

I will be attending COP29 representing the City of London Corporation as we continue to demonstrate the role of the UK as a one-stop shop for sustainable finance. Just last week Z/Yen’s latest Global Green Finance Index showed London retained its leading position for a third year running above New York, Paris and Singapore. We continue to champion the role of London as a leading finance centre in supporting ambitious outcomes to the negotiations at COP. For example, before the summer, Mansion House hosted the second High-Level Energy Transition Dialogue led by the COP29 Presidency and the International Energy Agency (IEA) discussing the role of private finance in the energy transition alongside international ministers and financial services leaders.

These debates and discussions are happening regularly with high engagement among financial services leaders in the Square Mile and the UK more broadly. This same zeal from the private sector must travel to Baku.

By City AM

CRIMINAL CAPITALI$M

Trafigura Facing $1.1B In Losses After Multi-Year Fraud

By Alex Kimani - Nov 04, 2024,

Trafigura is facing potential losses of up to $1.1 billion due to alleged fraud by employees tied to overdue debts in Mongolia.

This new scandal comes as Trafigura’s profits have dropped 73% compared to last year.
The recent financial hits signal the end of record profits seen during COVID-19 and the Ukraine war.


Back in June, we reported that Singapore-based oil and commodities trading powerhouse Trafigura Group was still dealing with the fallout of a massive nickel scam that rocked global metal markets in 2023, as well as the effects of past corruption scandals. Trafigura has grown into one of the biggest diversified commodities traders in the world: last year, the firm traded an average of 5.5 mn barrels of oil a day--the equivalent of the combined oil demand of the UK, France and Germany--and sold more than 100 million tonnes of metals and bulk commodities, including coal. Trafigura’s full FY 2023 revenue of $244 bn surpassed that of British oil major BP Plc. (NYSE:BP).

Well, it appears that scandals are not about to depart from the giant oil trader. Bloomberg has reported that Trafigura is facing a loss of up to $1.1 billion in Mongolia, linked in part to suspected fraud by its own employees.

According to Bloomberg, the company’s staff manipulated payments while concealing a mountain of overdue debts, a malpractice that continued for years without raising any red flags. Speaking privately, nine bankers have described the potential loss as ‘astounding’, considering Mongolia’s consumption of ~35,000 barrels a day is worth roughly $1 billion a year, or less than 0.3% of the oil traded by Trafigura.

“The key question, as always, is how quickly and effectively one learns from mistakes and implements corrective measures. Not merely by reshuffling or dismissing staff and launching a lengthy recovery process, but by strengthening the company’s governance, internal processes, and controls,” said Jean-Francois Lambert, a consultant and former commodity banker.


Mongolia does not issue import licenses to international companies such as Trafigura, making it impossible to directly supply the local market. This means that traders must rely on local distributors; Lex Oil LLC in Trafigura’s case.

The Mongolian company has been taking Trafigura’s oil products on credit and selling them on to fuel retailers, with an agreement that Lex Oil would pay in the future after making deductions for customs and freight duties.

Further complicating matters is the fact that Lex Oil has been providing credit to its own customers, while hedging transactions. Unfortunately, Trafigura’s accountants in Singapore and Geneva failed to recognize just how big Trafigura’s exposure in Mongolia had grown over the years, even as the bills hadn’t been paid when they were due.

Last year, Trafigura reported that it had found “deliberate concealment of overdue receivables” but said the alleged misconduct was not limited to hiding the debt. The company revealed that for years, its employees manipulated data and documents to misstate the calculations for charges like customs and freight.

Trafigura Profit Drops 73% As Oil Price Boom Fades

Trafigura is likely to take a big write-down for its latest scandal, which comes at a time when its profits are shrinking. Back in June, the company posted the smallest profit since the 2020 oil crisis as volatility in energy markets hit new lows. Trafigura’s net profit dropped to $1.47 billion in the six months through March, good for a 73% decline from a record $5.5 billion posted a year earlier. Trafigura’s revenue fell 5.4% to $124.2 billion, while group equity increased to $17.3 billion.

The company’s energy division saw operating profit before depreciation and amortization drop by half, to $3.35 billion while the metals division recorded a 11% increase from a year earlier thanks to easier comps after the company took a large impairment charge for an alleged nickel fraud. Trafigura is still dealing with the fallout of a massive alleged nickel scam that rocked global metal markets last year, as well as the effects of past corruption scandals, as detailed by the Financial Times.

“In a less stressed environment than the same period a year ago, demand for our services remained strong,” Chief Executive Officer Jeremy Weir said in the report published on Thursday. “In the near term, supply chain disruptions continue to persist, including due to ongoing threats in the Red Sea and commodity markets remain vulnerable to sudden shocks and price spikes.”

The latest set of results signals that a period of record profitability for the commodities trading industry fueled by Covid-19 and Russia’s war in Ukraine is coming to an end. The past three years have seen dramatic price swings that tend to favor commodities traders. For some time now, Trafigura and its peers have warned that the blowout profits they have been posting over the past couple of years are unlikely to be sustained over the long-term, although many industry experts believe that the baseline has been set higher.

By Alex Kimani for Oilprice.com

Australian rare earths developer ASM eyes US defence funding

Reuters | October 29, 2024

ASM is developing its Dubbo rare-earths project in New South Wales.

 (Image courtesy of Australian Strategic Materials .)

Rare earths developer Australian Strategic Materials (ASM) sees more funds becoming available for rare earths projects from the United States Department of Defence even if there is a change in administration, its CEO said on Tuesday.


Rare earths have strong magnetic qualities which make them key to applications from smart phones to laser guided missiles. Australia is classified as a domestic supplier to the United States for defence purposes.

“The magnet supply chain is actually in a really good position, regardless of which (US) government comes in,” CEO Rowena Smith told Reuters.

Smith said that Australian firms can potentially access US Department of Defence funding under the newly set up Office of Strategic Capital.

“When I met with them, they were… very confident that they had bipartisan support,” she told Reuters on the sidelines of the International Mining and Resources Conference (IMARC) conference in Melbourne.

“They’re expecting to come out of this calendar year with momentum. They asked me to come back February and talk to them again. So yeah, we’re feeling very optimistic of regardless of what the outcome is,” she said.
Context

ASM has been building funds to finance the development of its Dubbo rare earths project in Australia’s New South Wales state. It estimated in late 2021 that the project would cost A$1.678 billion ($1.10 billion).

ASM has already received a letter of interest for a debt funding package of up to $400 million from Canada’s official export credit agency and a promises for $600 million from the US Export-Import bank.

The Pentagon’s Office of Strategic Capital has recently been set up to distribute funds that are meant to seed investment in the defense industrial base’s supply chain.
What’s next

ASM is targeting a final investment decision for the first half of 2026 although a study is underway to potentially fast track production.

($1 = 1.5223 Australian dollars)

(By Melanie Burton; Editing by Michael Perry)

Brazil prepares to remove illegal Amazon gold miners from Munduruku land

Reuters | November 4, 2024  

Aerial view of Tapajos River (Credit: Shutterstock)

Brazilian authorities are preparing to remove illegal gold miners from an Indigenous reservation in the Amazon rainforest that has been criss-crossed with informal airstrips and contaminated with mercury, an official said.


The Munduruku territory covers nearly 24,000 square km (9,000 square miles), about the size of the US state of New Hampshire, and is home to 61 villages of Munduruku, Apiacas and other Indigenous groups in an area known for violent land disputes.

The Munduruku reservation has the second-most illegal mining in Brazil, according to a report seen by Reuters from government agency Censipam, which manages operations protecting the Amazon.

Brazilian President Luiz Inacio Lula da Silva has vowed to fight illegal mining on Indigenous lands after a surge under his predecessor Jair Bolsonaro.

Illegal gold miners have poisoned rivers and triggered public health crises on Indigenous reservations, which are the responsibility of the federal government.

The planned operation will involve federal bodies from the Defense Ministry to Indigenous affairs agency Funai, Nilton Tubino, who has been coordinating similar efforts in the Yanomami territory in far northern Brazil, told Reuters.

The Yanomani territory, where illegal miners have also been vectors for malaria and other contagious disease, has seen the most illegal mining, Censipam says.

Authorities have identified 21 informal airstrips in the Munduruku territory providing supplies for mining activity, the Censipam report showed. Turbino said the operation would aim to cut supplies for illegal activities in partnership with Brazil’s fuel and aviation regulators.

The Censipam report showed that 388 new illegal mining spots opened in the Munduruku territory in 2022, the last year of the Bolsonaro administration, falling to 128 last year and 23 so far this year.

Tubino said the government would avoid inflaming any conflicts with the operation.

(By Ricardo Brito and Andre Romani; Editing by Brad Haynes and Alison Williams)

JV Article: Wall of Water fire suppression system protects mines from raging forest fires

Northern Miner Staff | November 4, 2024 | 

The Wall of Water portable trailer contains either a 20 or 35 horsepower pump, complete with suction line, floating intake filter and supply hoses with a manual attack nozzle for extinguishing established fires. Credit: Wall of Water

An Ottawa-based company has developed a new fire prevention technology for mines and exploration camps susceptible to the increasing prevalence of forest fires. The patented fire prevention technology, described by Wall of Water (WOW) president David McKeen “as a sprinkler system on steroids,” is designed to propel a wall of water toward buildings and equipment to protect them from a raging wildfire.

“If a building in the path of a forest fire remains dry, there’s little chance of saving it from flying embers unless it’s soaking wet and that’s what my equipment does,” McKeen said.

The WOW product family consists of portable trailers that can be stored when not in use and moved into place at will; fixed mount tripods; roof mount guns; and ancillary support equipment such as self priming electric start pumps, hoses, manifolds, fittings and gun tips.

A Wall of Water fixed mount tripod can propel water 137 metres in diameter and up to 15.2 metres high. Credit: Wall of Water

Trailers, tripods and roof top units can be daisy chained and powered by pumps of up to 650 horsepower to protect the desired real estate.

McKeen describes the trailers as being equivalent to “mini fire pumper trucks.” Trailers are equipped with a pump, fuel tank, 4.3-metre-high sprayer mast, water intake/supply hoses and a gun. The sprayer will throw a wall of water up to 137 metres in diameter and up to 15.2 metres high, soaking the roof and sides of a building along with surrounding vulnerable fuel sources. Sprayer towers have a fully adjustable gun pitch angle and rotation sweep. Once deployed, the deluge of water will rotate autonomously for as long as fuel and the water supply are available.

Standard fully equipped trailers include either a 20 or 35 horsepower pump, complete with suction line, floating intake filter and supply hoses with a manual attack nozzle for extinguishing established fires. The complete system can be deployed within 15-20 minutes by two men, taken to a location by means of a pick-up truck, off road UTV, helicopter or watercraft to any remote location.

The Wall of Water fire suppression system can propel water 137 metres in diameter and up to 15.2 metres high. Credit: Wall of Water

Water can be sourced from a hydrant system, lake, river, ocean, or other water body using the suction line equipped with a floating filter that avoids intake of debris.

The pumps can be fuelled by gas, diesel or propane. To protect an unmanned exploration camp, systems can be started remotely via satellite or cellular connectivity. Fuel tanks are sized to operate for a minimum of 24 hours.

Permanent fixed mount tripods are anchored in the ground with one leg consisting of a water supply pipe and the attached water gun which is fully adjustable for pitch angle and rotation sweep.

McKeen came up with the idea while watching TV and witnessing the devastation of entire communities levelled to the ground and people losing their homes, businesses and livelihoods. “It really bothered me seeing so many people suffering from these disasters and losing absolutely everything,” he said.

A technically savvy entrepreneur with no background in firefighting, McKeen worked with Ontario fire truck manufacturer Battleshield Industries south of Ottawa to help design the initial system. Further refinements along with extensive testing continued with his current manufacturer Cadman Power Equipment in southern Ontario until performance goals were achieved and proven.

To succeed at bringing WOW to the masses, McKeen’s team has implemented a marketing strategy to introduce WOW to municipal first responders, private home and cottage owners, businesses, Indigenous communities and resorts located in forested areas.

A chance meeting with an employee from a large northern Ontario mining company at a Cottage Life trade show in Toronto introduced McKeen to the vulnerability of Canada’s mining operations, many of which are located in remote areas.

Canada’s 2023 wildfire season was the most destructive ever recorded with more than 6,000 fires torching a staggering 150,000 sq. km of forest. That’s an area larger than England and more than double the 1989 record, according to Natural Resources Canada.

Hecla Mining (NYSE: HL), Agnico Eagle Mines (TSX: AEM; NYSE: AEM), Eldorado Gold (TSX:ELD; NYSE: EGO) and Wesdome Gold Mines (TSX: WDO; US-OTC: WDOFF) were among more than a dozen Canadian mining operations that either shut down and evacuated their staff or forced the cancellation of some shifts in June 2023.

The 2024 wildfire season, according to Natural Resources Canada, consisted of more than 5,000 fires affecting more than five million 50,000 sq. km. In July, Champion Iron Mines (TSX: CIA; ASX: CIA; US-OTC: CIAFF) suspended operations at its Bloom Lake site in northeastern Quebec, and in August, SSR Mining (TSX: SSRM; NASDAQ: SSRM; ASX: SSR) evacuated its employees and shut down its Seabee gold mine 125 km northeast of La Ronge, Sask., resuming operations only in mid-October. While the mine itself wasn’t materially impacted by the fire, the company reported damage to power poles, piping and exploration equipment.

According to McKeen, WOW products have been delivered to a large remote mine in Ontario. The Ontario mine has opted to sole source several products to measure their effectiveness with a group of stationary fixed mount tripods to protect an essential building area using its own pumps and water supply infrastructure. Once the coverage area and optimum positioning of the tripods are verified, additional tripod units along with custom designed roof top sprayers will be added for further thorough encampment and work zone equipment protection.

Column: The US needs a clear, climate-focused mining strategy

Peter Bryant | November 4, 2024 

The White House. Stock image.

Both Presidential nominees Kamala Harris and Donald Trump have backed laws to promote minerals extraction and processing while in the White House. While conversations about critical minerals have been largely absent from the campaign trail, hard and fast decisions must be made whoever sits in the Oval Office in January.


Minerals such as copper, zinc and lithium — all of which comes from mining — and their security will need more than promises and good will to build affordable, reliable and secure energy systems.

When the United States and more than 140 countries pledged to get to net-zero carbon emissions by mid-century, they were committing themselves to deploying vast amounts of new solar panels, wind turbines, batteries and other infrastructure. This transition will dramatically increase demand for minerals and metals, which could lead to a minerals famine. The U.S. is particularly unprepared

Decades of offshoring have resulted in an over reliance on minerals supply from other countries. We need to reverse course to meet impending demand. No matter if you’re casting a vote for Harris or Trump, the U.S. needs a clear and aligned strategy for minerals development globally.

Reinvigorating the industry is a matter of national and energy security.

The U.S. government is taking some steps to address mineral security. The incentives in the Inflation Reduction Act of 2022 are designed to jump-start mining and processing minerals from both our country and our allies. In the bipartisan Infrastructure Investment and Jobs Act, signed into law in 2021, Congress supported programs to better characterize U.S. geological resources, showcase novel production technologies and get federal land managers to permit mining projects for critical minerals more expediently.

The Department of Energy and other agencies are working with companies to support new operations for recycling, refining and producing minerals from nontraditional sources, such as using plants to extract nickel from the soil.

While these efforts are worthwhile, they only chip away at the edges of a larger problem, failing to address its full scale and urgency. The lack of a comprehensive and climate-coherent strategy for mining – domestically and internationally – will hinder efforts to advance the global energy transition and prevent the U.S. from constructively engaging in the new mineral economy.

Stakeholders including investors, mining firms and governments in resource-rich states and countries know that the U.S. wants to develop new and more secure supplies of these minerals. The heart of the challenge is that government and industry players need to have more confidence in each other.

Domestically, a key source of uncertainty for developers is the prospect of being bounced between municipal, state and federal agencies in search of permits for new projects. These delays and regulatory uncertainties discourage investment. This uncertainty has made the U.S. as one of the worst countries in the world for permitting a new mine, forcing mining companies to focus on expanding production in existing operating mines rather than building new ones.

For instance, working with the state of Nevada, the federal Bureau of Land Management has approached this issue by opening up dialogue before a project application is filed. Simply by holding meetings with project developers and stakeholders at all levels of government, the process of hearing input and advancing projects has been made more direct. The Department of the Interior has recognized this need in a recent report, and it is critical that we see these practices adopted nationwide as soon as possible.

Abroad, the U.S. faces a separate set of challenges. When it comes to enabling resource development, the U.S. has developed the reputation for being quick to lecture and slow to deliver. China, by contrast, moves deliberately to establish diplomatic and economic ties that enable its companies, which are often state-backed, to develop projects and bring minerals to market. That results in projects that typically have greater negative impacts for Indigenous communities, the environment and labor.

Resource-rich countries want to see resource development contribute more significantly to their economic prosperity. The model of mineral development must evolve from the historical extract-and-ship model to one that is actually invested in the economic prosperity of countries and communities. It must prioritize financial and political sustainability as much as environmental sustainability.

This means the U.S. should focus on building broad support for projects, establishing trade and investment arrangements with resource-rich countries and directing federal money to project support where it pays off in new resources and local economic development. Such an approach will create a compelling value proposition to resource-rich nations that are looking for partners beyond China.
Lack of public trust

Still, a more active government will need a trustworthy partner. At present, the mining industry is the least trusted industry of any in meeting societal goals, according to GlobeScan’s 2023 global survey measuring public trust in different industries. Ironically, when we need this industry the most, it is least trusted. That lack of trust extends to its relationship with the government. Politicians hesitate to back projects or support initiatives that risk not being developed or may result in human or environmental damage.

To ensure long-term political and policy support, the industry will need to demonstrate its commitment to delivering both mineral products and high standards of development around the world. To accelerate progress, the industry needs to lean into its shift to become a development partner with governments and communities, build champions in civil society and political leadership, engage with indigenous communities and host governments in new ways.

With rising concern about climate change and the security of supply chains, this issue is gaining bipartisan attention in Washington. For those most interested in climate change, accessing minerals will reduce costs and speed of the energy transition.

When a country owns and controls a supply chain, it can better prepare for supply shocks when they occur. For those most interested in security, minerals access reduces dependence on the Chinese firms that have captured significant parts of the global industry. De-risking supply chains is front-of-mind for U.S. policymakers, who would like to see supply chains brought home or diversified amongst more friendly countries and firms without close connections to the Chinese Communist Party.

We need to move quickly to make this happen. Major mining projects in the US can take 10-plus years to permit. Without a new model, any new project today will only begin production in the 2040s. Accelerating that timeline will help prevent mineral shortages that pose huge risks to achieving the swift and secure energy transition that companies and governments seek.

Peter Bryant is a managing director and board chair of Clareo, an international strategy consulting firm focused on natural resources, energy and food industries.

MinRes’ founder Ellison to exit after internal misconduct probe

Kristie Batten | November 4, 2024 |

Chris Ellison. (Image courtesy of Macquarie Australia | MinRes.)

Following two weeks of scandal, Australia’s Mineral Resources (ASX: MIN) announced on Monday that its founder and managing director, Chris Ellison, will be fined and will leave the company within the next 12 to 18 months.


Shares in the embattled mining contractor fell more than 6% on the ASX at market open Monday, reaching an intraday drop of up to 10% as the release of an internal investigation uncovered serious governance issues within the company.

While the probe was initially believed to have been triggered by an exclusive report in The Australian Financial Review last month, which alleged Ellison’s involvement in tax evasion dating back to 2004, MinRes clarified that the executive had been under board investigation since 2022.

The AFR has since continued to publish allegations against Ellison, including reports on Monday stating that he and other senior executives had leased properties to MinRes at up to 70% above market rates since 2006.

MinRes responded by saying that its board had uncovered “a range of issues and shortcomings that demanded a strong and comprehensive governance response” and found that Ellison had not consistently acted with integrity.
The findings

The investigation confirmed that from 2003 to 2014, Ellison held an interest in Far East Equipment Holdings Limited (FEEHL), a company incorporated in the British Virgin Islands. In 2003 and 2004, FEEHL sold mining equipment to Crushing Services International (CSI), with payments outstanding at the time of CSI’s acquisition by MinRes in 2006.

MinRes listed on the ASX in 2006, but the liability to FEEHL was not disclosed in its prospectus or any subsequent report. The company later made two payments totaling A$3.79 million ($2.57 million) to FEEHL in 2006 and 2008 to settle the liability.


In 2021, Ellison voluntarily disclosed income earned from FEEHL to the Australian Taxation Office (ATO) and paid A$3.9 million in unpaid taxes in May 2023, though he did not inform MinRes of this disclosure until November 2023. MinRes found that certain emails relating to FEEHL were deleted in 2019 to prevent this information from becoming public.

The board also acknowledged that related-party financial benefits had been provided to Ellison’s associates, including rent paid to entities in which he held an interest, rent relief given to entities affiliated with his daughter, and indirect financial arrangements involving her.

While Ellison had disclosed these instances, the board determined he failed to grasp the importance of transparency and timely disclosure of potential or actual conflicts of interest.

Additional findings revealed that Ellison directed company employees to work on his boat and properties, manage his personal finances, and procure goods and services for his private use. The board, however, found these actions did not financially impact MinRes materially.
‘Deeply sorry’

Ellison, a New Zealander who left school at 15 and went on to become a self-made billionaire, founded MinRes in 1992. MinRes chairman James McClements described Ellison’s actions as serious, noting that they had severely impacted his reputation and, by extension, that of the company.

The scandal has wiped about 20% from MinRes’ share price since Oct. 21, underscoring the investment risk of having a company operating under the shadow of a single dominant corporate figure.

Ellison agreed to repay MinRes A$3.8 million, equivalent to the payments made to FEEHL in 2006 and 2008 without appropriate related-party disclosure. Additionally, he will donate A$5 million to charity over five years, forfeit up to A$6.5 million in unvested incentives, and withdraw a proposal for an additional A$3.1 million in incentives.

“There can be no doubt that Mr. Ellison’s actions, decisions, and behavior have been profoundly disappointing and demand sanction and penalty,” McClements stated.

Ellison, who has agreed to step down within 12 to 18 months to facilitate a smooth leadership transition, expressed remorse, saying he was “deeply sorry” for the events that have occurred and their impact on MinRes’ reputation. “I apologize to the board and our people, who expect and deserve better from me,” he said.
McClements to go

McClements, who has been the miner’s chairman since May 2015 and is also managing partner at Resource Capital Funds, announced he would also leave once a suitable successor for Ellison is found. He anticipates stepping down by the next AGM, marking his tenth year on the MinRes board and two years as chairman.


“There can be no doubt that Mr. Ellison’s actions, decisions, and behavior have been profoundly disappointing and demand sanction and penalty”MinRes chairman James McClements

The AFR also alleged that McClements’ predecessor, Peter Wade, had an interest in FEEHL and was involved in the tax evasion scheme. Spencer Stuart, an international recruitment firm, is aiding in the search for Ellison’s successor.

“The transition process has been underway for some time, and recent events have accelerated it. It’s appropriate that my successor is involved in appointing the next CEO, so we will fast-track recruitment of the next MinRes chair,” McClements noted.

An independent Ethics & Governance Committee, including MinRes directors Denise McComish, Susie Corlett, and Jacqui McGill, will be formed to oversee compliance.

McClements acknowledged the pressures that MinRes’ rapid growth in recent years had placed on its governance systems, saying, “The board faced a unique set of circumstances, with a high-performing managing director and a range of governance issues that required us to take action.”
‘Critical time’

This controversy comes at a pivotal moment for MinRes as it contends with weak lithium prices and ramps up operations on its largest project, Onslow Iron. As of June 2024, MinRes employed 8,500 people, up from 5,600 the previous year. However, the company has recently reduced its workforce, cutting 570 jobs since July.

Concerns over MinRes’ gross debt of A$5.3 billion, set to peak in the current half, were alleviated somewhat by the company’s recent sale of a 49% stake in the Onslow Iron haul road to Morgan Stanley Infrastructure Partners for A$1.1 billion and the sale of its Perth Basin gas interests to Gina Rinehart’s Hancock Prospecting for an additional A$1.1 billion.

Kaan Peker, an analyst at RBC Capital Markets, said that the board’s recent moves have eased short-term uncertainty regarding leadership. “This is a critical time for the company with the Onslow project ramping up and efforts to reduce debt,” he wrote.

Given Ellison’s history in the company, he may stay involved even after he steps down as managing director, Peker said.

Despite the governance challenges, Peker added that Ellison, who holds over 11% of MinRes, remains well-regarded in the market, noting that as the company matures, a transition to a less active role for Ellison aligns with its evolving strategic goals.

MinRes shares have declined from nearly A$80 in May to an intraday low of A$36.51 on Monday, though RBC has maintained an outperform rating with a price target of A$64.