Video: Wind Turbine Vessel Knocks Over Crane at Navantia Shipyard

Brave Tern in normal operations (Fred. Olsen Windcarrier)

Published Nov 25, 2024 10:21 PM by The Maritime Executive

 

The wind turbine installation vessel Brave Tern is wrapping up a big upgrade project at the Navantia Ferrol shipyard, but has run into a hitch. During the last stages of final testing, it appears to have knocked over a 25-tonne crane on the quayside.  

Brave Tern is a jackup WTIV built in 2012, when turbines were much smaller than today. To get ready for a market with ever-growing nacelles and blades, operator Fred. Olsen Windcarrier contracted with Navantia to give the ship a major upgrade. Brave Tern received a new crane rated at 1,600 tonnes, with enough reach to install turbines of 15 MW-plus capacity.

At about 0800 on Saturday morning, Brave Tern prepared to get under way from the quay at Navantia Ferrol. While pulling away from the pier, the Tern's gigantic boom hung up on one of the quay's mobile cranes, tipping it over onto a small barge. Miraculously, the crane cab and pedestal base remained out of the water, and no one was injured. The vessel returned to the pier after a brief period at anchor, and she remained alongside as of Tuesday morning. 

Navantia executive Carlos Diaz told local paper La Voz de Galicia that a "calculation error in the maneuver" was responsible, not wind or any other factors. The company emphasized that the situation was contained and did not pose any further risk to life or property.

Salvage plans for the toppled crane have not yet been announced, but a vessel with abundant heavy-lift capacity - Brave Tern - is located nearby if a hoist is needed.   

 

China is Negotiating Over Access to Bulker Suspected of Subsea Sabotage

Yi Peng 3 passes under the Great Belt Bridge (Storebaelt Bridge webcam)

Published Nov 25, 2024 11:44 PM by The Maritime Executive

 

 

A legal standoff appears to have developed around the Chinese bulker Yi Peng 3, which is suspected of involvement in the severing of two subsea cables in the Baltic on Nov. 17-18. Based on AIS data, local authorities know that the bulker was maneuvering in suspicious locations when the cables were severed, and photos of the ship's bow show that one of its anchors is badly twisted - a rare type of damage that would require unusual forces. Despite circumstantial evidence, and the national-security implications of suspected sabotage, it appears that the coastal states have not yet boarded Yi Peng 3 for an inspection and are negotiating with China for permission.

The problem, according to Scandinavian legal experts, appears to be one of location. Yi Peng 3 is anchored just barely outside of Denmark's territorial seas, though inside the Danish exclusive economic zone. Unless there is evidence of a specific kind of environmental crime - like unlicensed fishing - Denmark lacks the legal authority to conduct an opposed boarding outside of the 12-mile line.

"If the ship is in the Danish economic zone, then it could just as well be in the middle of the Atlantic Ocean in relation to the specific case," maritime law expert Kristina Siig told DR. 

Denmark could board if the vessel's flag state gave permission for a law enforcement investigation to proceed. However, the flag state in this case is China, and China has been negotiating the details of its cooperation with Denmark through "diplomatic contacts" for the past week, according to Swedish outlet SVT. "China has had smooth communication with all parties involved in the incident through diplomatic channels. Beyond that I have no further information to share regarding the Chinese vessel," Chinese foreign ministry spokeswoman Mao Ning said Monday. 

Denmark's defense ministry has declined to comment on the Yi Peng's status, beyond noting that there are multiple assets on scene to monitor the ship. While the discussion continues, the bulker remains at anchor in the Kattegat.

"If China says no, and we do it anyway, we risk having to explain it in the Maritime Court in Hamburg, because the ship is in principle seen as a small piece of China," Siig said. 

The cable breaks are being investigated as acts of potential sabotage, given recent tensions with Russia and a nearly-identical subsea cable incident involving a Chinese vessel last year. 

On Tuesday, Swedish Prime Minister Ulf Kristersson told media that he would like to see the Yi Peng 3 relocated to Swedish waters, where at least one of the cable breaks occurred. This would address jurisdictional issues, since Sweden - not Denmark - was directly affected by the cable breaks.  

"From the Swedish side, we have had contact with the ship and China and stated that we want the ship to move towards Swedish waters," he said. 
 

Chinese Ship Suspected of Subsea Cable Sabotage Has a Twisted Anchor

Published Nov 24, 2024 5:22 PM by The Maritime Executive

 

A Chinese bulker happened to be maneuvering near two subsea cables at the time they were severed last weekend, and it appears to have a damaged anchor, according to Danish public radio outlet DR. 

The bulker Yi Peng 3 was outbound from St. Petersburg in the Baltic during the timeframe of two back-to-back cable breaks on November 17-18. Its AIS record shows that it exhibited unusual course and speed changes at suspicious locations, attracting scrutiny from the authorities. "The ship has been near the two places at certain times when the incidents have taken place," police inspector Per Engstrom told SVT.

A Danish Navy patrol vessel intercepted and shadowed the Yi Peng 3 as it transited towards the Great Belt, and the bulker decided to interrupt its voyage to go to anchor in the Kattegat shortly after. Denmark stopped short of saying that the Yi Peng 3 had been detained, but a Danish patrol vessel has been monitoring it closely. Two other NATO vessels - German and Swedish - have joined to create a growing government flotilla near the Yi Peng 3.

Engstrom told SVT that the authorities would need evidence of a crime in Swedish waters to justify a detention or a boarding, and the available information does not yet rise to that standard. 

"Everything points to the Chinese ship. It has slowed from 6.9 to 3.4 knots around the damaged cables and was in a Russian port before sailing out into the Baltic," former chief Danish defense intelligence analyst Jacob Kaarsbo told outlet TT over the weekend.

Yi Peng 3 (green) accompanied by the NATO government vessels HDMS Hvidbjoernen, Bad Deuben and Poseidon (blue) (Pole Star)

DR obtained a photo of the Yi Peng 3's port side anchor, and the news outlet showed the image to several maritime experts for their thoughts. The photo shows that the anchor's flukes are clearly twisted at the tips.

"They are twisted in different directions, which may very well indicate that one side of the anchor has become stuck in something down on the bottom or in some rocks," mariner Capt. Lars Bo Nielsen told DR. "I have never seen such a bent anchor before." 

The last serious cable break in the Baltic was caused by the Chinese boxship NewNew Polar Bear, Chinese authorities confirmed earlier this year. Half of the Polar Bear's anchor was recovered near a ruptured gas pipeline between Finland and Estonia: it had been dragged for hundreds of miles, its stock had torn in two, and one fluke had broken off. An investigation into the NewNew Polar Bear incident is still under way, and investigators have not yet concluded whether the anchor damage was accidental or an act of sabotage. 

This time, governments around the Baltic are working on the assumption that the cable damage was intentional. "No one believes that these cables were accidentally damaged. And I don't want to believe in the versions that anchors are to blame," said German Defense Minister Boris Pistorius last Tuesday. "So we have to conclude, without knowing who did that, that this is a hybrid action. And we also have to assume, without knowing, of course, that this is sabotage."

Bulker Remains Stuck on St. Lawrence After Grounding Two Days Ago

Tim S. Dool has been stuck since midday on Saturday (Roger Beaupre / Facebook)

Published Nov 25, 2024 5:02 PM by The Maritime Executive

 

The St. Lawrence Seaway and Canada’s Algoma Central are working on a plan to refloat a bulker that has remained stuck on the St. Lawrence River for the past two days. The bulker grounded midday on Saturday, November 23 but is outside the shipping channel so vessel traffic is continuing as shippers rush to complete the last weeks of the 2024 season before the seaway closes for the winter.

The bulker Tim S. Dool (28,471 dwt) loaded a cargo of Canadian wheat at Port Weller on Lake Ontario just above Welland and one of the critical locks on the waterway. The vessel had departed on Friday and was making its way along the St. Lawrence River.

There is speculation that the vessel built in 1967 experienced a mechanical failure that resulted in it leaving the channel and grounding near Morrisburg, Ontario at around 1230 on November 23. It is stuck in the mud in the river but because it is outside the channel there are no reports that traffic has been interrupted.

The St. Lawrence Seaway Management Corporation issued a statement that there were no injuries to the crew and no reports of pollution or water ingress. They said the vessel was in a stable condition and that a plan was being finalized to refloat the bulker.

That however did not stop residents from flocking to the waterway to see the grounded vessel. News media is saying it has become a local tourist attraction.

It is not the first time that a vessel has gone aground in the area. In August, a Dutch cargo ship lost power in another section of the waterway and blocked traffic. It remained stuck for two days till tugs were able to pull it free and reopen the waterway.

This incident comes during the final leg of the 2024 season and a challenging time for the seaway. A year ago, it was closed by a strike and the 2024 season has seen a slight decrease in the number of vessels using the waterway. As of the end of October, just under 3,000 transits have been recorded in 2024. They reported that 28 million metric tons had been shipped on the seaway so far in 2024.

Management announced the plan is to close the navigation season on January 5, 2025, in the Montreal-Lake Ontario section and on January 10 in the Welland Canal. They reported that volume was up in October and expected a positive finish to the year.

California’s Newsom Sets Himself Up as a Foil to Musk and Trump

By Eliyahu Kamisher and Kara Carlson

November 26, 2024 

Gavin Newsom and Elon Musk Photographer: David Swanson and Allison Robbert/AFP/Bloomberg (David Swanson and Allison Robber/Photographer: David Swanson and )

(Bloomberg) -- As Elon Musk prepares to wield more power in Washington, the state where he built his fortune is girding for a fight.

Gavin Newsom is positioning California as a foil to Donald Trump’s policies, laying the groundwork for resistance on everything from deportations to regulation rollbacks. On Monday, the Democrat governor delivered a plan that squarely touches on Musk’s Tesla Inc.: a rebate for electric-vehicle buyers if the president-elect repeals a federal subsidy.

Notably, the proposal includes market-share limitations that would leave out popular Tesla models.

The exclusion marks another turn in the fraught relationship between Newsom and Musk, a key member of Trump’s inner circle who has been tapped to co-lead an effort to slash federal spending. The governor’s office said the policy is designed so more carmakers can “take root” — that’s a blow for Tesla, a company started in Silicon Valley and nurtured by California’s climate goals and incentives.

Musk has made no secret of his disdain for deep-blue California and its policies. He relocated Tesla’s headquarters to Austin from Palo Alto in 2021 after clashing with Newsom over pandemic lockdowns.


In July, as his shift into Republican politics deepened, he announced that his companies X and SpaceX would also leave the state for Texas, saying the “final straw” was a new law signed by Newsom that bans school districts from requiring teachers to notify parents of changes to a student’s gender identity.

Yet just last year, Musk and Newsom struck a cooperative tone by announcing a Tesla global engineering headquarters in Palo Alto. The car company also maintains a huge presence with a factory in Fremont — a point Musk made in an X post Monday, calling Newsom’s policy “insane.”

“Think of the relationship between Newsom and Musk as love-hate, love-hate, love-hate-hate,” said Dan Schnur, a political analyst who teaches at University of Southern California and the University of California at Berkeley. “As Musk gets closer to Trump, he becomes a more lucrative political target for Newsom.”

Newsom, who’s widely seen as having presidential ambitions, is stepping up potential roadblocks to the Trump administration. He called a special legislative session to be held next week aimed at providing money for the state’s department of justice to potentially sue the administration or defend against federal lawsuits. He’s also touring Republican strongholds in the state, promoting his economic message and offering reassurances that their concerns are heard.

In a statement Monday, Newsom said California would be “doubling down” on its commitment to clean air and green jobs.

“We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute,” he said.

Details of the EV proposal — including Tesla’s possible omission from the credits — will be negotiated with the state legislature and could change, Newsom’s office said. Leading lawmakers haven’t indicated their support for the measure, especially as California faces challenging budget talks in the new year.

“We will review this proposal and all others as part of the larger budget negotiations,” the office of Mike McGuire, the senate president pro tempore, said in a statement. A representative for Robert Rivas, who heads the state assembly, didn’t return a request for comment.

Ro Khanna, a Democratic congressman whose district includes Fremont, said it would be “foolish” to exclude Tesla. He alluded to President Joe Biden’s decision not to invite the company to a summit for EV makers early in his tenure — a move that rankled Musk and contributed to his contentious relationship with the administration.

“Let’s not play politics with keeping manufacturing in California,” Khanna said on X. “Have we learned nothing from snubbing @elonmusk at the Biden EV summit?”

Dominant Share


For Tesla, the limits on rebates would mean the company “will still be a big fish, but the pond will grow,” said Jessica Caldwell, executive director of insights at Edmunds. She said it’s unclear why Tesla should be excluded.

“If the goal is ‘let’s sell more EVs,’ it seems a bit misdefined,” Caldwell said, pointing to Tesla’s significant market share and name recognition. The company made up 54.5% of all EVs registered in the state during the first three quarters of this year, down from 63% during the same period last year. Hyundai Motor Co. holds a distant second place with 5.6% share.

While its dominance has ebbed, Tesla still has enough market heft in California and the US to lessen the impact of purchase subsidies on its business. It’s also turned an adjusted profit every year since 2020, while the EV businesses of rivals such as Rivian Automotive Inc. and legacy carmakers including Ford Motor Co. continue to lose money.

As manufacturers introduce more EV models — including at lower price points — the market is beginning to open up to more buyers. California’s potential move could break Tesla’s longtime stranglehold on the market and boost smaller players that have struggled to break through.

Excluding Tesla from the state’s credit would be a “net negative” for the company, because doing so would put it at a disadvantage to fossil-fueled vehicles, RBC Capital Markets analyst Tom Narayan said in a note to clients.

“We do wonder how the governor’s office will justify such a policy,” he said, noting that the state has issued a mandate for all new cars to be zero-emissions by 2035.

Gil Tal, director of the Electric Vehicle Research Center at the University of California at Davis, said Tesla has less of a need for the buyer incentive than smaller carmakers. Yet he also said the company’s exclusion probably isn’t necessary to spur competition.

Schnur, the political consultant, said it’s hard not to see Newsom’s move as punitive.

“There is no evidence that the Newsom administration has penalized large-scale renewable energy companies in their previous efforts to get the state off of fossil fuels,” he said. “It is more than a little bit suspicious.”

--With assistance from Ryan Beene and Keith Laing.

©2024 Bloomberg L.P.

‘Drill, Baby, Drill’ Is Unlikely Under Trump, Exxon Says

By Mitchell Ferman

November 26, 2024 

(Bloomberg) -- Oil and gas producers in the US will not raise output significantly in the coming years despite calls from President-Elect Donald Trump to “drill, baby, drill,” said Exxon Mobil Corp.’s Upstream President Liam Mallon.

“I think a radical change is unlikely because the vast majority, if not everybody, is primarily focused on the economics of what they’re doing,” Mallon said on Tuesday at a conference in London.

Trump is expected to open up federal lands for more oil and gas drilling, but much of the land in the country’s largest oil and gas producing state, Texas, is private. Still, there’s plentiful federal land in neighboring New Mexico which includes the oil- and gas-rich Permian Basin.

“If those rules were substantially changed, you would be able to drill more, assuming you have the quality and met your economic threshold,” Mallon said. “But I don’t think we’re going to see anybody in the drill, baby, drill mode. I really don’t.”

The US is pumping more than 13 million barrels of crude a day, exceeding every other nation and up almost 45% in the past decade. With a surplus looming next year, the global oil market is watching to see at what rate American explorers drill new wells. Many of the biggest US operators are taking a long-term approach to production, weighing when to bring certain wells online against their overall inventory.

Mallon’s comments mark the second time since the election that the largest US oil company has diverged from Trump’s policies. Chief Executive Officer Darren Woods discouraged the president-elect from withdrawing the US from the Paris climate pact, arguing that it’s better to participate and push for “common sense” carbon-cutting policy.

Mallon reinforced Woods’s recent remarks supporting the US Inflation Reduction Act, which Trump has characterized as Washington’s “green new scam.” Some IRA incentives — including tax credits for capturing carbon, producing hydrogen and making sustainable aviation fuel — are particularly popular with oil companies.

“Our position on the IRA is very good,” Mallon said. “We strongly believe in what it is, what it stands for and the incentives it’s providing.”

©2024 Bloomberg L.P.

Oil Glut Set to Thwart Trump’s Call to ‘Frack, Frack, Frack’

By Lucia Kassai, Kevin Crowley, and David Wethe

November 19, 2024 

(Bloomberg) -- President-elect Donald Trump’s vows to “frack, frack, frack” are about to collide with a global crude glut that’s set to, finally, temper record shale production.

Trump has said he’ll push America’s shale companies to ramp up output – telling supporters pump prices would fall even if it meant producers “drill themselves out of business” — but his second term follows two straight years of record US output. Against that backdrop, analysts and traders surveyed by Bloomberg see the US adding just 251,000 barrels a day from the end of this year through 2025, the slowest pace since the pandemic-driven drop in 2020.

There are few levers Trump can pull to change that. Opening new federal lands to exploration would take time, and some of his other proposals – such as a trade war with China – are widely seen as bearish for oil because they would erode demand for the commodity.

“There’s a delay between freeing up federal lands, offering it for auction, having companies bid on it, doing exploration, discovering oil and putting the infrastructure for it,” said Ed Morse, a senior adviser at commodities trading firm Hartree Partners LP. The bulk of any production increases stemming from Trump policies would come after his term, Morse said.

So far, the independent oil producers responsible for most of the shale boom over the past decade have no plans to radically alter their drilling after the election. Diamondback Energy Inc. and Devon Energy Corp. indicated growth of 2% or less in 2025, while EOG Resources Inc. and Occidental Petroleum Corp. expect to keep activity flat. Occidental CEO Vicki Hollub has warned of “declining growth rates” in the US over the medium term.


There is cause for skepticism, of course. Last year, the shale patch surprised the market by adding 1 million barrels a day of output, despite independent producers vowing limited growth. And heavyweight producers including Exxon Mobil Corp., Chevron Corp. and ConocoPhillips are expanding rapidly, posting increases of more than 8% in the past year.

Macquarie Group Ltd., which correctly predicted last year’s stunning growth, sees output reaching an unprecedented 13.9 million barrels a day by the end of this year, 5% above current Department of Energy estimates.

That growth, combined with new barrels from Guyana, Brazil and Canada, have set the stage for a massive crude glut in 2025, with the International Energy Agency warning of a 1 million barrel-a-day global supply surplus. Macquarie sees supply outpacing demand by 2.4 million barrels a day in the first quarter, when Trump will be sworn in. And traders are already pricing in a surplus, with West Texas Intermediate retreating by more than 3% this year.

READ: World Oil Market Faces Million-Barrel Glut in 2025, IEA Says

It’s a much different landscape than when Trump first took the White House. In 2017, new investment from private equity and the supermajors was flowing into the oil patch — prompting producers to grow as fast as possible and burning $300 billion of cash in the process.

The pandemic tanked prices, caused labor shortages in the shale patch, stranded imports of equipment in ports and prompted banks to dial back lending to the sector. Dozens of bankruptcies followed. But those that survived were forced to lower costs and become more efficient, positioning them to begin growing again when oil prices rallied in late 2020.

READ: Most Productive US Industry Is One That Wall Street Wrote Off

Under Biden, the US solidified its position as the world’s top oil producer, now pumping 50% more barrels each day than Saudi Arabia.

That pace will be hard to maintain. A $290 billion wave of mergers and acquisitions in the past two years means many of the independent producers that were driving production growth during Trump’s first time in office were bought or merged into larger entities that reined in capital spending and boosted shareholder returns.

Among the deals, Pioneer Natural Resources Co. was bought by Exxon, Endeavor Energy Resources LP was taken out by Diamondback, and CrownRock LP was acquired by Occidental.

Ultimately, though, oil prices could be the biggest obstacle to US growth, according Raoul LeBlanc, vice president for North American unconventionals at S&P Global Commodity Insights.

“At $70, shale independents can both grow and generate free cash flow,” he said. “But at $60 they have to make a choice — and we believe they’ll choose cash for the shareholders.”

©2024 Bloomberg L.P.

Oil markets facing ‘profound sentiment challenge,’ Eric Nuttall says

By Jordan Fleguel

November 20, 2024

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, says oil prices are climbing as the markets weigh geopolitical risks.

Energy investor Eric Nuttall says global oil markets continue to struggle with a sentiment problem that’s keeping benchmark crude prices lower than they should be.

Nuttall, a partner and senior portfolio manager at Ninepoint Partners, told BNN Bloomberg in a Wednesday interview that the issue mainly revolves around concerns about 2025 inventory levels, which many expect to rise on the back of new builds from oil producers.

But he said that based on current inventory levels, oil is mispriced.

“What we’ve seen is a complete breakdown between historical relationships, meaning if you look at where global oil inventories sit today, they’re at their lowest levels on record,” Nuttall said.

“If you look at where the price should be relative to where inventories are, we’re mispriced by about $12 to $13, so that is reflective of a profound sentiment challenge.”


He added that he believes the general consensus around global demand growth for oil next year is too bearish – another factor putting downward pressure on prices.

West Texas Intermediate crude prices were hovering below US$70 a barrel in midday trading on Wednesday – little changed from Tuesday, as traders weighed escalations in Russia’s war in Ukraine against U.S. stockpile data showing inventories increased last week, Bloomberg reported.

Nuttall said he expects prices to rise and trade within a $70 to $80 bend next year as demand grows in China and other markets.

“We’ve seen major oil traders just in recent weeks point to improvements in China… we see refining margins increasing so that’s reflective of improvement in user demand, and really our thesis on U.S. shale is that we’ve entered its twilight,” he said.

“We think growth next year will be much more modest than consensus, and its not just us thinking that, it’s actually the producers saying that… and so, we think the market is simply far too bearish.”
Trump’s impact

Nuttall said that U.S. president-elect Donald Trump’s “drill baby, drill” approach to energy production is “completely toothless,” and unlikely to meaningfully impact oil and gas prices.

“There’s nothing a U.S. president can do to influence meaningful shale growth when investors don’t want it and the rocks won’t allow it,” he said.

Nuttall did, however, praise Trump’s pick for energy secretary: oil and gas executive Chris Wright.

“As a Canadian I’m very envious… they now have a gentleman that is actually energy literate, who recognizes that there is no energy transition going on, and that depriving the majority of the planet from hydrocarbons keeps them in mass levels of poverty and energy scarcity,” he said.

Wright, the CEO of Colorado-based Liberty Energy Inc., is a vocal proponent of fossil fuels who has said they are crucial for lifting people out of poverty across the world, and that the threat of global warming from their continued production is exaggerated, Bloomberg reported Saturday.

Nuttall said that one way Trump’s administration could influence oil markets next year is by being more hawkish on Iranian oil exports – something he said the current U.S. administration has not made a priority.

“We think that enforcing their sanctions, that have been in place but (the Joe Biden administration) has just been completely turning a willful blind eye, could see about a million barrels per day removed from the market,” he said.

“So that’s yet another bullish possibility that a market which is just so stuck in the mud of negativity is just unwilling to give any potential for.”

With files from Bloomberg News

Column: Trump 2.0 won’t reverse Biden’s critical minerals push

Reuters | November 23, 2024 | 

Image source: Donald Trump’s official X account

Donald Trump has described the Inflation Reduction Act (IRA) as a “green scam” and vowed to repeal it after he returns to the White House in January.


This is bad news for sectors such as electric vehicles (EV) and wind power, which have been major recipients of the Biden administration’s signature $369 billion energy transition legislation.


But some of the “new green deal” money has also been channeled to the US industrial base, such as the $75 million allocated for an upgrade of Constellium’s aluminum rolling mill in West Virginia.

Will this too be clawed back? It seems unlikely because when it comes to rebuilding US industrial capacity and cutting the country’s critical minerals dependency on China, there is remarkable cross-party consensus.


Indeed, it was then-President Trump who in 2020 declared the country’s “undue reliance” on “foreign adversaries” for critical minerals a national emergency.

Trump in his second presidency is unlikely to reverse the drive to metallic self-sufficiency. He may even prove to be an accelerator.
Investing in America

Both the Department of Energy (DOE) and the Department of Defense (DOD) have pumped billions of dollars into rebuilding US metals capacity.

The DOE has largely channeled funds to EV battery inputs such as lithium, manganese and graphite.

The DOD has sprinkled the cash far more widely, targeting a spectrum of esoteric elements ranging from antimony to zirconium, including an unidentified “critical material” incongruously described as essential both for “the protection of human lives” and ammunition packaging.

The Biden administration boasts that thanks to government largesse companies have announced $120 billion in investment in domestic battery and critical minerals capacity.

Yet most of that investment has been concentrated on the downstream part of the supply chain.

Seventeen new US battery plants have been announced since the IRA came into effect in July 2022, boosting pipeline capacity by 68% through 2030, according to research house Benchmark Mineral Intelligence.

When it comes to investing in the metals needed to supply those gigafactories, most of the projects receiving federal funds are those looking to enhance existing recycling capacity.

New primary smelting projects remain conspicuous by their absence. Century Aluminum has been awarded a potential $500 million to build a new aluminum smelter but there has been no update since the original announcement in March.

Even the DOD’s high-priority rare earths processing venture with Australia’s Lynas Rare Earths has run into trouble. Earthworks at the Seadrift site in Texas have been put on hold due to problems getting a wastewater permit, Lynas said in its latest quarterly report.
Stuck in the ground

New smelting capacity needs new mines to supply it and that’s where the US minerals investment boom is still struggling to build momentum.


Most of the funds committed to the mining sector have been directed at lithium, both for new mines such as Lithium Americas’ Thacker Pass and multiple projects experimenting with direct extraction technology.

South32’s Hermosa zinc-manganese project in Arizona is a non-lithium stand-out, qualifying for both DOD and DOE funds and the first mine to qualify for the Fast-41 accelerated permitting process.

Many others, however, remain mired in the country’s tortuous permitting process.

The Biden administration has struggled to reconcile its desire to produce the metals needed for the green energy transition with its environmental credentials.

Big copper projects such as the Pebble mine in Alaska and the Twin Metals project in Minnesota have been killed off.

Trump has already promised to reverse Biden’s 20-year ban on mining in the Superior National Forest in Minnesota in “about 10 to 15 minutes” of taking office.

That in itself won’t be a green light for the Twin Metals project, which would still have to get state permitting sign-off, but it’s a sign that the Trump administration won’t be hobbled by the green-on-green cabinet conflict that characterized the last four years.
Focus on China

A new Trump administration is also likely to take a much tougher line on critical metal imports from entities linked to China.

Talon Metals has been allocated funds by both the DOD and DOE to progress its Tamarack nickel project in Minnesota and explore for more resource in the state.

It’s a tough time to be in the nickel business, though, as a mining boom in Indonesia has crushed prices and forced many existing operators out of business.

Most of Indonesia’s nickel capacity is controlled either directly or indirectly by Chinese entities, which has not stopped US carmakers such as Ford from joining the Indonesian nickel rush.

Price has trumped politics when it comes to securing a key metal for EV batteries.

Depending on the structure of the joint venture between Ford, Vale and China’s Zhejiang Huayou Cobalt, the nickel from the new plant in Indonesia could even count as IRA-compliant and qualify for federal EV subsidies.

Such sourcing ambiguity seems unlikely to survive the Make America Great Again focus of a new Republican administration.

Indeed, every sign so far is that Trump 2.0 will double down on the US minerals self-sufficiency drive, even if it means accepting that not all of the IRA funds are a “green scam”.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Mark Potter)

Why Via Rail wants an overhaul of the conditions for using CN’s rail tracks

By Christopher Reynolds, 

The Canadian Press

November 26, 2024 

Documents supporting Via Rail’s ongoing attempt to secure better access to tracks owned by Canadian National Railway Co. shed new light on an increasingly strained relationship between the carriers.

The Crown corporation has been trying to overhaul its contract with CN for years, finally asking the country’s transportation regulator in 2023 to impose a new track-access agreement that sets their relationship on a fair footing.

In a submission to the Canadian Transportation Agency, Via proposed changes that would help boost the number of trains on its key Quebec City-to-Windsor corridor, improve its poor on-time performance and pay more “reasonable” rates to CN.

The request has borne no fruit since it was filed 18 months ago, in part because of a procedural delay related to CN’s response. A request for confidentiality on some documents is still being considered, so CN’s submission is not publicly available.

The vast majority of Via trains run on CN-owned tracks, which the Crown corporation pays to access. Via warns that its “captive client” status and CN’s “quasi-monopolistic position” mean the country’s largest railway can prioritize its own locomotives over passenger trains.

“This is by far the most significant cause of train delays experienced by Via over CN’s infrastructure,” the filing states.

Meanwhile, busier freight routes, longer trains — which also move more slowly — and limited space on the tracks mean Via faces strict limits on its ability to ramp up trip volumes and get travellers to the terminal on time.

Via says that several decades ago the Montreal-Toronto train could make the trip in four hours flat. In 2022, the voyage took five hours and 33 minutes on average — nearly a half-hour longer than in 2014.

Similar delays played out on other routes between Quebec City and Windsor, Ont. Via’s overall on-time percentage in the corridor dropped from 84 per cent in 2011 to an all-time low of 56 per cent in 2022, according to the filing.

In a statement, CN said it is in full compliance with its latest agreement with Via, which includes no provisions on speedy travel.

“The pending dispute is the result of Via looking for improved performance at a lower cost to them, with increased costs to CN to maintain those dedicated track routes to meet their passenger rail needs,” said spokeswoman Ashley Michnowski in an email.

“CN recognizes the importance of passenger services and continues to support the development of dedicated rail infrastructure that would address those needs while preserving freight railways' ability to support the growing needs of the Canadian economy.”

Greg Gormick, who heads On Track Consulting, says the tensions between the two outfits are natural given their competing priorities and finite amount of track.

“There are always problems when you mix freight and passenger,” he said.

However, improved service often comes at a cost, he added.

“When Amtrak and its state partners want improvements, they have to pay for them,” Gormick said, referring to Via’s passenger rail counterpart in the U.S.


“Somebody needs to broker this. There needs to be a peace agreement, but it needs that higher authority to do it.”

The standoff speaks to long-simmering frictions between the two parties, potentially aggravated by fresh ones.

Earlier this month, Via filed a lawsuit in Federal Court against CN over speed restrictions that affect Via’s new passenger trains. It said the caps are causing further delays on the Quebec City-Windsor corridor, affecting thousands of passengers daily and damaging its reputation.

CN said it imposed the restrictions at rail crossings “given the industry’s experience and the well-known risks” associated with trains similar to the 32 brand new Siemen’s Venture trainsets that Via will have put into service on the corridor by this summer.

Via’s earlier request to the regulator amounts to a test of the Canada Transportation Act. In contract disputes between a public passenger service and a railway, the legislation allows the agency “to decide the matter” after reasonable efforts to resolve it.

“Continued attempts at negotiating with CN appear doomed to fail,” Via argued in its submission, which has sat before the transport agency since June 2, 2023.

Until now, the process has played out behind closed doors. It followed drawn-out negotiations and eight temporary extensions to the contract, which expired in 2018.

Terry Johnson, president of the Transport Action Canada advocacy group, framed Via’s application as a last-resort countermeasure to CN’s trying to negotiate a “significant downgrade” in Via’s level of service — the term refers generally to train speed and trip volume.

“Via is massively dependent on CN,” he said. “That makes for a complicated relationship, and not one that’s really amenable to a commercial contract.”

Via claims the money CN charges it for track access has diminishing returns for the passenger service, with the freight railway having less incentive than its partner to keep the tracks in top shape. To hit their higher speeds, which can top 150 km/h, passenger trains must run on routes maintained to higher standards than those required for slower freight trains.

“Via and CN have now reached a crossroads in their relationship,” Via stated.

This report by The Canadian Press was first published Nov. 26, 2024.

CANADA
Consumer debt continues to grow, reaching record $2.5T, credit bureaus say

By The Canadian Press

November 26, 2024

TORONTO — Consumer debt rose to a record $2.5 trillion in the third quarter as many Canadians continue to struggle with high living costs and rising unemployment, new surveys from two credit bureaus say.

Equifax’s report says newcomers and consumers who borrowed money for the first time in the past 12 to 36 months saw the biggest rise in missed payments, compared with the same consumer group last year.

However, it says the pace of missed payments has slowed following recent interest rate cuts.

Another credit bureau, TransUnion, says total consumer credit debt rose 4.1 per cent in the third quarter year-over-year as more gen-Z consumers entered the credit market — making them the fastest-growing segment to carry an outstanding balance.

Equifax adds auto loans were one of the biggest drivers of rising consumer debt, with non-bank auto loans up 12 per cent and bank auto loans up 2.7 per cent year-over-year in the third quarter.

Rebecca Oakes of Equifax Canada says small affordability improvements in the auto market such as moderating car prices and easing financing rates are leading to increased demand for vehicle purchases.

TransUnion forecasts auto loan sizes in 2025 to remain flat as lower interest rates will offset high average vehicle costs, while overall auto delinquencies are expected to improve slightly next year.

This report by The Canadian Press was first published Nov. 26, 2024.

Canada Post strike enters 12th day as negotiations continue

By The Canadian Press

November 26, 2024 

Canada Post says it’s missed out on delivering an estimated 10 million parcels as a strike by more than 55,000 workers across the country continues ahead of Black Friday.

Company spokeswoman Lisa Liu said in a statement Monday that talks with the union over the weekend resulted in limited progress, with Canada Post trying to “move forward with urgency” on discussing changes to its delivery model.

Meanwhile, a union spokesperson said talks were focused on protecting jobs, saying the Crown corporation wants to claw back rights and benefits achieved over decades.

A key issue in bargaining has been a push to expand parcel deliveries into the weekend, but the union and Canada Post are at odds over how to make it work.

Canada Post has been struggling to compete with other delivery providers and posted a $315-million loss before tax in its third quarter. It has pitched weekend deliveries as a way to boost revenue.

Ottawa has appointed a special mediator to assist with negotiations between Canada Post and the union.

This report by The Canadian Press was first published Nov. 26, 2024.

Trudeau, cabinet to face fresh questions about Trump’s major Canadian tariff threat

By Rachel Aiello, CTV News

November 26, 2024 

Prime Minister Justin Trudeau and members of his cabinet are expected to face fresh questions today about Donald Trump vowing to impose a 25 per cent tariff on all products from Canada and Mexico on his first day in office, if border issues aren’t addressed.

According to a senior government source, Trudeau and Trump spoke on Monday night after the news broke.

The official described the conversation as “good,” and said on the call trade and border security were discussed, with Trudeau noting that the number of migrants who cross from Canada to the U.S. is far smaller than those who come through Mexico.

The two men vowed to stay in touch, the source said.

In a longer statement issued Monday night the chairs of the recently-revived Canada-U.S. relations cabinet committee, Deputy Prime Minister and Finance Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc, said that Canada “places the highest priority on border security and the integrity of our shared border.”


The pair also noted that Canada is “essential” to U.S. energy supply, saying last year 60 per cent of crude oil imports came from Canada, and touting work already underway to “disrupt the scourge of the fentanyl coming from China and other countries.”

Trudeau re-formed the special cabinet committee in response to Trump’s win and it has been meeting for a few weeks to navigate top issues as flagged by the incoming administration, such as trade and the border.

Ministers who make up this panel have also spoken about the need for a renewed “Team Canada” approach, in the face of what could be a fresh round of high-stakes trade talks, and the prospect of retaliatory tariffs, as seen during the Trump-sparked NAFTA renegotiation.

Trudeau and his front bench are meeting for their weekly closed-door cabinet meeting on Parliament Hill Tuesday morning and are set to be asked a series of questions from reporters about next steps as they arrive.

The looming tariff imposition is also likely to be a leading issue raised in question period later this afternoon.
What did Trump say last night?

Trump posted on social media platform Truth Social Monday night that as of Jan. 20, “as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders.”

The president-elect said the tariffs would stay, until the two border countries address what he called the “long simmering problem” of drugs and illegal immigrants crossing into the United States.

“We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!” Trump said.

This comes after Trump’s pick for border czar called the northern border “an extreme national security vulnerability,” and after the top Republican campaigned on the threat of a blanket 10 per cent or more import tariff.

Major economic impact concerns

The Canadian Chamber of Commerce had estimated based on the initial 10 per cent tariff prospect, that “if other countries retaliated with tariffs of their own, the ensuing trade war would result in roughly US$800 (C$1,100) in foregone income annually for people on both sides of the border.”

Author of that report University of Calgary economics professor Trevor Tombe posted on X Monday night that if Trump does impose a 25 per cent tariff next year, the Canadian economy could enter a recession.

Hours before Trump declared his intent to hit Canada with this sizeable trade action, Canada’s premiers penned a letter to the prime minister asking him to hold an urgent first ministers' meeting before Trump re-takes office.

Reacting to the news, Quebec Premier Francois Legault, Ontario Premier Doug Ford and Alberta Premier Danielle Smith were among those warning of the major impacts such a move would have on sectors across the country, and calling on the federal government to make a plan fast.

With files from CTV News' Vassy Kapelos, Brennan MacDonald and Mike Le Couteur

Trump’s tariff threat to top U.S. trading partners roils markets

By Nancy Cook and Brian Platt

November 25, 2024 

(Bloomberg) -- President-elect Donald Trump vowed additional tariffs on Mexico, Canada and China, shaking markets with his first specific threats to the U.S.’s top trading partners since his election win three weeks ago.

Trump said he would impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada, in posts to his Truth Social network on Monday.

The US dollar staged a broad advance Tuesday, with the Mexican peso and the Canadian dollar among the worst performers. US Treasuries fell, with the yield on 10-year notes rising two basis points to 4.3%, partially reversing the reaction to Scott Bessent’s nomination last week as Treasury secretary, which weighed on the dollar and boosted US bonds amid optimism of a more measured approach to trade relations.

Trump’s market-moving threats were a stark reminder that he plans to wield tariff authority, or at least threaten to use it, as leverage against allies and adversaries alike. It’s another sign of his break from the international order where low tariffs are the goal and rules exist to discourage overreach of punitive trade actions.

In his Truth Social posts, Trump cast the new import taxes as necessary to clamp down on migrants and illegal drugs flowing across borders.


He accused China of failing to follow through on promises to institute the death penalty for traffickers of fentanyl, writing that “drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”

“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” Trump said.

In another post, the incoming president also vowed to hit Mexico and Canada with a 25% tariff on “ALL products,” saying he would sign an executive order to that effect on his first day in office.

“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before,” he said. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

Shortly after Trump’s post, Canadian Prime Minister Justin Trudeau contacted the president-elect and the two leaders had a phone call to discuss border security and trade, according to a government official with knowledge of the matter.
Immigration response

Trudeau pointed out to Trump that the number of migrants who cross the Canadian border into the US is minuscule compared to those who cross from Mexico, said the official, who spoke on condition of anonymity.

Canada said it’s working closely with US law enforcement agencies every day to disrupt the “scourge of the fentanyl coming from China and other countries,” according to a statement by Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc.

Liu Pengyu, spokesman for the Chinese embassy in the US, said economic and trade cooperation between both countries is mutually beneficial. “No one will win a trade war or a tariff war,” he wrote in an X post.

The Foreign Ministry in Beijing said in a statement Tuesday that China has provided support to America’s fight against fentanyl which is “US’s problem,” though it stopped short of mentioning any planned trade retaliation.

Representatives for the Mexican Foreign Affairs Ministry and Economy Ministry, as well as China’s Commerce Ministry, didn’t immediately respond to requests to comment. Spokespeople for Trump didn’t immediately answer a question about whether there would be exemptions from the duties.


Trump campaigned on pledges to implement sweeping tariffs, vowing to hike tariffs to 60% for all goods imported from China and as high as 20% for those brought in from the rest of the world — policies he says will help pressure companies to re-shore manufacturing jobs in the US and raise revenue for the federal government.

President Joe Biden has already hiked tariffs on a variety of Chinese imports this year, including semiconductors, solar cells and critical minerals, with rates ranging from 25% for batteries to 100% for electric vehicles. The move was the culmination of a review of Trump’s tariff increases in his first term — none of which were rolled back.

While it was unclear how Trump’s 10% tariff threat on China fit in with his previous statements calling for even higher duties, analysts saw this as an opening gambit aimed at the drug problem.
China’s response

This “does not necessarily mean that Trump’s promised 60% tariffs on all Chinese imports are off the table,” said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. “China will register its opposition and consider limited retaliation but is likely to respond cautiously at first to Trump’s threats, until it gets a better sense of the balance between confrontation and deal-making in his second term.”

While public health experts say fentanyl overdoses remain a major issue, provisional data released earlier this month by the Centers for Disease Control and Prevention showed a 14% drop in drug overdose deaths from June 2023 to June 2024. President Biden hailed US-China cooperation on counter-narcotics this month during a meeting with counterpart Xi Jinping in Peru.

Higher North American tariffs would upend the auto industry and other consumer sectors, including food, in which the three countries are highly integrated.

Mexico’s auto sector is particularly exposed to a trade conflict with the US, along with factories that export electronics, plastics and other manufactured goods to US consumers. Mexico became the US’s largest trading partner as China’s import share declined in recent years. The Mexican government estimates there’s now $800 billion annually in total trade between the nations.
‘Stir the debate’

The Canadian and US auto industries are so intertwined, and work on such thin profit margins, that a 25% tariff is “not a real conversation,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, a Canadian industry group.

“The president-elect has done what he’s famous for, which is try to stir the debate. The only surprise is how early he’s done it,” Volpe said. “What we learned in the first term was he uses strong rhetoric, public rhetoric. But the negotiations are always tough, but reasonable — and I’m just telling everybody to be patient.”

(

Statistics Canada, Bloomberg cal)

A 25% tariff applied to all imports from Canada would put pressure on energy costs. Oil, gas and other energy products are Canada’s largest export to its southern neighbor; it’s by far the largest external supplier of crude to the US. Wilbur Ross, Trump’s former Commerce secretary, said earlier this month it would make no sense to place tariffs on Canadian energy.

The move on Mexico and Canada would reignite a trade feud that simmered across the continental bloc during Trump’s first term, where he forced a renegotiation of the North American Free Trade Agreement and imposed tariffs on certain sectors, including steel.

Currently, the re-branded trade pact, known as the United States-Mexico-Canada Agreement, allows for duty-free trade across a wide range of sectors. It’s not clear what recourse American importers, who would pay the duties, would have under the pact to head off any levy.

Beyond Bessent, Trump still has a number of top economic roles to fill in his administration. One of the chief architects of Trump’s tariff agenda, former United States Trade Representative Robert Lighthizer has yet to land a role in the second term