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Falling Gasoline Prices Keep Inflation In Check

By Charles Kennedy - Aug 10, 2022,

The U.S. Consumer Price Index (CPI) saw no real change in July, suggesting that inflation is easing as a result of falling gasoline prices, according to the latest data from the Bureau of Labor Statistics released Wednesday. 

Overall, the CPI that tracks gasoline prices dropped by 7.7%, while other indexes, including food, saw increases. Used vehicles and airline tickets saw decreases along with gasoline. 

It could mean we’ve already suffered peak inflation, with inflation slowing as a direct result of falling gasoline prices. 

Consumer prices saw a 8.5% increase in July, year-on-year, but down from the 9.1% increase year-on-year recorded in June. June’s figures represented a forty-year high. 

Wells Fargo predicts that inflation in the U.S. could fall to 5% over the next few months due to steep drops in energy prices. 

"We would not be surprised to see the headline 12-month consumer price inflation reading post a sudden, large drop, maybe from 9.1% for June to 5% or 6% in the next two or three months," the bank's investment institute team said in a note to clients Monday, as reported by MSN. 

Gasoline prices in the United States have fallen for 57 consecutive days, reaching down to a national average per gallon of $4.010 on Wednesday, according to AAA. The month-ago average price per gallon was $4.684. On Tuesday, at locations tracked by GasBuddy, the average price per gallon was $3.99. 

The CPI numbers follow a promising jobs report last week. 

President Joe Biden on Wednesday said the zero rise in inflation from June to July “underscores the kind of economy we’ve been building”. Speaking at the White House, Biden said there were “some signs” that inflation is beginning to “moderate”. 

By Charles Kennedy for Oilprice.com

French Nuclear Giant Sues Government For $8 Billion

By Charles Hugh Smith - Aug 10, 2022, 

French nuclear giant EDF, forced to sell power to competitors below market value, is now suing the French government for over $8 billion in compensation. 

EDF says it has lost 8.3 billion euros (nearly $8.6 billion at today’s exchange rate) as of the date of filing the claim against the government, and anticipates losing more than 15 billion euros for the full year.

The French power company, which is already 84% owned by the government and is in the process of being fully nationalized, is forced to sell electricity it produces to rival power plants to increase competition as EDF holds a monopoly. 

The initial government decree states that suppliers can purchase up to 25% of EDF’s annual nuclear output between July 2011 and December 2025 at a fixed, discounted price of about $47 per MWh. However, in January this year, the government implemented a larger cap at one-fifth in order to reduce consumer energy bills for this year. Then, in March, the government issued additional decrees, further increasing the volume and reducing the price for EDF. 

The losses cited by EDF stem from this time period. 

In June, EDF reported earnings showing its largest ever half-year loss. EDF lost 5.3 billion euros in the first half of this year, compared to 4.2 billion euros in profit for the same period of 2021. 

EDF’s power stations account for 70-75% of France’s power consumption, and the government is keen on nationalizing the giant in order to ensure energy supplies amid a looming crisis that began when Russia invaded Ukraine. 

Losses are mounting for EDF in other areas, as well. 

Last week, EDF was forced to slash output at nuclear power stations on two rivers as a heatwave spreading across Europe has rendered the rivers too hot to cool the units. 

By Charles Kennedy for Oilprice.com

Alberta Oil Output Hits Record High

By Irina Slav - Aug 11, 2022

Crude oil production in Alberta reached a record high in the first half of the year, at 3.6 million bpd, which was 100,000 bpd higher than the average output for the first half of 2021.

CBC noted in a report on the news that production from oil sands accounted for some 85 percent of the total output during the period, according to ATB Financial. Yet the financial services provider noted that while most of the total came from the oil sands, production from conventional resources increased more substantially.

Oil sands accounted for 24,000 bpd in the overall output increase, while conventional oil accounted for 62,000 bpd.

"You can incrementally respond quicker because it's about taking a rig, putting it out there and drilling it," market analyst Kevin Birn said, as quoted by CBC. He said he expected production to rise even further in the second half of the year.

Over the longer term, however, the outlook is more vague, not least because of government efforts to enforce a cap on emissions from the industry, which accounts for the biggest part of Canada's total emissions.

Ottawa is planning to make the oil and gas industry reduce its emissions by 40 percent by 2030, with the most recent tactics discussed involving a cap-and-trade system or a new carbon pricing system.

Meanwhile, Rystad Energy has forecast that Alberta could turn into Canada's biggest renewable energy producer, thanks to its unregulated market, natural resource wealth, and a skilled energy workforce.

"Canada is no stranger to renewables, but Alberta has been a minor player until now. That's about to change. The region's unregulated power market, minimal regulatory hurdles and abundant natural resources make it an attractive prospect for developers, in addition to an existing workforce of industry professionals increasingly eager to adapt to green energy. Other provinces may want to follow suit if they have ambitions to attract lucrative green investments," said Rystad analyst Geoff Hebertson.

Former UK PM Calls For Energy Utility Nationalization

Aug 11, 2022, 

A former British Prime Minister has called for the nationalization of energy utilities that cannot offer their customers lower electricity prices.

In an op-ed for The Guardian, Gordon Brown wrote that the energy cap on electricity bills needs to be removed before it is updated later this month, and energy firms’ “windfall profits and bonuses have to be properly taxed now before the money flees the country.”

The “government should pause any further increase in the cap; assess the actual costs of the energy supplies being sold to consumers by the major companies; and, after reviewing the profit margins, and examining how to make standing charges and social tariffs more progressive, negotiate separate company agreements to keep prices down,” Brown argued.

If any energy companies failed to comply with these requirements, he continued, they had to be nationalized, as a last resort, “until the crisis is over”.

A growing number of Britons are facing energy poverty as the price of electricity continues climbing. CNN reported earlier this week that annual bills could before long hit the equivalent of $5,000, or over $400 per month.

This would be a threefold increase in prices from the start of this year, which would push a third of the UK’s population into energy poverty. That’s about 10.5 million households.

Meanwhile, British energy companies are being pressured into using their windfall profits from higher electricity prices to invest in more low-carbon energy, the Financial Times reported.

Indeed, Chancellor Nadhim Zahawi threatened to level more windfall taxes on the energy sector if companies do not pour more money into wind and solar instead of using it to return cash to investors.

“The government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take,” a government spokesman said earlier this week.

By Irina Slav for Oilprice.com

New ways to deal with arsenic in Chile’s copper mines

Staff Writer | August 4, 2022 | 

Chuquicamata copper mine in Chile. (Reference image by Diego Delso, Wikimedia Commons).

German and Chilean researchers are working on a project aimed at optimizing and advancing copper production processes with a particular focus on addressing the problems posed by sulfur-based ores that contain arsenic.


In Chile – the world’s top copper producer – the red metal is extracted mostly from open-pit mines. Ore is blasted from holes with diameters of up to two kilometers. This ore has a copper content of around 2%, which is extracted in several stages: The ore is first ground and then subjected to flotation, which involves the wet chemical foaming of the material, in order to separate the high-copper ore from the low-copper ore. This results in copper concentrate, which Chile also sells. It contains around 20 to 30% copper. The concentrate is then smelted in blast furnaces and finally purified in electrochemical electrolysis processes in order to obtain pure copper.

Together with copper, the excavated ore layers often also contain arsenic, which, due to its toxicity, needs to be extracted from the ore. This takes place almost automatically when the ore is heated: The arsenic turns into gas. In Chile, the current procedure is to capture the gas, dissolve it in sulfuric acid and then transform it into solid calcium arsenate or calcium arsenite through precipitation. These calcium compounds are then deposited in the Atacama Desert.

The fact that these compounds are water-soluble hasn’t been a problem since the Atacama Desert is one of the driest regions in the world. However, in recent years, climate change has caused an increase in rainfall, which now raises the issue of environmental contamination. At the same time, some mines are penetrating layers that are no longer oxygen-based but sulfur-based and thus contain more arsenic. As a result, the amount of arsenic to be deposited will increase in the future, particularly given that there are currently no industrial uses for arsenic.

“These two developments are now making Chilean mine operators rethink the way in which they previously disposed of arsenic and adapt to these new circumstances without delay,” Anna-Lisa Bachmann, who coordinates the ‘ReAK—Reduction of Arsenic in Copper Concentrates’ project, said in a media statement. “We are investigating new ways of separating and depositing the arsenic as part of this project so that the environmental impact is minimized as much as possible.”
Looking at different options

Since 2019, Bachmann and her team have looked into several different potential process steps, starting with the further processing of arsenic-rich copper concentrate and including arsenic-selective flotation, sulfation roasting, and microbial and sulfidic leaching.

Alternative oxidation processes resulting in more stable and less toxic arsenic5+ compounds instead of unstable and water-soluble arsenic3+ compounds are also being considered.

“One option for this oxidation step could be the use of hydrogen peroxide, but this is very expensive,” Bachmann said. “This is why we at Fraunhofer IWKS are investigating electrochemical oxidation with diamond electrodes as a viable alternative in the course of this project. They feature a particularly large electrochemical window, resulting in the formation of hydroxyl radicals in aqueous solutions. These then oxidize the dissolved arsenic efficiently and reliably without the need for additional chemicals.”

Other project partners are also evaluating UV- and ozone-assisted as well as microbial oxidation processes.

The first step of all work packages is to test whether the method in question actually works and whether it delivers the desired result. Fraunhofer IWKS will compare their cost-effectiveness and environmental impact in the context of life cycle assessment and life cycle costing analyses as soon as all of the individual results are available.

“We will use this to develop a new concept for landfilling that will provide recommended actions to the Chilean government, considering both governmental requirements and the available financial resources,” Bachmann noted.

This is particularly relevant given that much of Chile’s copper industry, including one of the mines participating in the project, is state-owned.

Albemarle studying ways to recycle lithium in North America
Reuters | August 4, 2022 | 

E-waste recycling facility in Rwanda. (Reference image by Rwanda Green Fund, Flickr).

Albemarle Corp on Thursday said it is studying ways to develop a battery recycling business in North America and believes there would be many similarities with its current lithium operations.


“We’re evaluating just how we partner, invest and develop that supply chain,” Eric Norris, head of Albemarle’s lithium division, said on a Thursday conference call after the company posted better-than-expected quarterly results. “Many of the technologies are practiced in our existing operations.”

Albemarle aims to build a lithium processing facility in the US Southeast later this decade to process and recycle lithium. Li-cycle Holdings Corp and privately-held Redwood Materials Inc are among the existing North America battery recyclers.

(By Ernest Scheyder; Editing by Daniel Wallis)

Lithium miner ioneer finds workaround for wildflower that’s stalling US project

Bloomberg News | August 4, 2022 | 

Tiehm’s Buckwheat flower. (Credit: Flickr – Jim Morefield)

A prospective lithium supplier to Ford Motor Co. and Toyota Motor Corp. expects to clear an environmental hurdle involving a rare flower next year, paving the way for deliveries to electric-vehicle makers ahead of looming shortages of the battery metal.


Ioneer Ltd. seeks to build its Rhyolite Ridge lithium-boron project in Nevada, but the Australian company has been unable to get federal permits because public lands near the site are home to the endangered wildflower Tiehm’s buckwheat. The US Fish and Wildlife Service said in February it planned to designate about 910 acres near the project as a critical habitat for the pale yellow flower.

Ioneer submitted a revised plan of operations for the project that will protect the wildflower while the mine is being built, Executive Chairman James Calaway said in an interview.

“We’ve figured out how not to touch the plants and build the mine,” Calaway said. “There’s a consensus building that our plan of operations should be moving forward into the public review process.”

Ioneer expects to get US approvals that will allow them to start building the project next year, he said. The company aims to start producing lithium in 2025, with an annual capacity of 21,000 metric tons.

Getting federal permits is crucial for Ioneer’s lithium mine to fulfill supply pacts with automakers. Ioneer signed a supply deal in July with Prime Planet Energy & Solutions, a battery joint venture between Toyota and Panasonic Corp., to provide 4,000 tons of lithium carbonate per year in the first five years of production. Ioneer also signed a deal last month with Ford.

“These agreements we have just signed are to support US domestic supply chain. America needs this,” Calaway said. “We’re going to need a ton of it.”

The operations would also help ensure supply of the metal for EV makers and large-scale battery factories in the US while also reducing dependence on China. There are growing concerns on China’s dominance of refining and manufacturing capacity of battery materials, and reliance on the Asian nation is now seen as a vulnerability as trade and political tensions spur a rethink of global supply lines.

“The crisis in my opinion is coming on in around 2025,” Calaway said. “That’s when everybody is really worried about having enough production to keep these mega-factories running.”

(By Yvonne Yue Li)

Rio Tinto attracts several proposals to build 4 GW of wind, solar power

Reuters | August 4, 2022 | 

Yarwun alumina refinery. Credit: Rio Tinto

Global miner Rio Tinto has received several offers to build 4 gigawatts (GW) of wind and solar farms to power its alumina and aluminum operations in Australia’s Queensland state, the company’s Australia head said on Friday.


Rio Tinto Chief Executive Officer Australia Kellie Parker said the company, the country’s biggest single power user, had received proposals for “a lot more than the 4 GW” that it asked for in its call for proposals key to slashing its carbon emissions.

Rio Tinto said in June its Boyne aluminum smelter, Yarwun alumina refinery and Queensland Alumina refinery need a combined 1,140 megawatts (MW) of reliable power, and was seeking offers to build at least 4,000 MW, or 4 GW, of wind and solar power backed up by energy storage which would be required to supply steady power.

Parker, however, gave no cost estimate for the projects on Friday.

“All of us understand that Australia remains an expensive location to build, so it won’t be easy,” she said in a speech to the Melbourne Mining Club.

Several issues need to be sorted out before the massive build of renewables – equal to more than a third of the total wind and solar capacity Australia already has – could go ahead.

“A coordinated grid solution in Queensland will be critical and requires the collaboration of suppliers, users, regulators, transmission providers and policymakers. Technology will also play an important role,” Parker said.

The company had yet to decide what role it would play in the generation or supply of renewable energy as the proposals it had received involved it being owner, operator, partner, investor and customer for the projects, she said.

(By Sonali Paul; Editing by Rashmi Aich)

One of mining’s top female leaders vows change after abuse shame

Bloomberg News | August 5, 2022 |

Kellie Parker, Rio Tinto Chief Executive, Australia. Credit: Rio Tinto.

Complaints about workplace conduct at Rio Tinto Group have almost doubled in the wake of inquiries that exposed a mining industry rife with sexual abuse, harassment and racism, according to one of the sector’s highest profile female executives.


“It has encouraged our people to speak up about poor conduct on our sites or in our offices, with the number of reports up by 95%,” Kellie Parker, chief executive for Australia at Rio, the world’s No. 2 miner, said in a speech Friday. “The process of publicly airing these matters has built trust and accelerated the momentum for change.”

A landmark report on Australia’s mining sector published in June detailed a shocking catalog of abuse and violence against women working for top miner BHP Group, Rio and other major companies. That investigation — by the Western Australia government — followed Rio’s own earlier inquiry which found more than a quarter of its female staff had experienced sexual harassment, and more than half of all employees had been bullied.

Rio’s report “sent an immediate and unmistakable message to our people that we were treating the matter seriously,” Parker, who joined the company in 2001, said in Melbourne. The company is implementing recommendations that include greater accountability and efforts to encourage individuals to report abuse.

The industry’s toxic workplace culture is now a focus for legislators and investors who’ve pushed commodities giants to improve their environmental and social governance. Areas of concern span relations with indigenous communities to gender diversity and timid progress on climate issues.

Those who are skeptical on the industry’s willingness to reform point to events like the annual Diggers and Dealers conference held this week in Kalgoorlie, Western Australia. Male speakers vastly outnumbered women, and delegates mingled outside the conference venue at bars that employ topless bartenders, known locally as skimpies.

“If you had asked me at the start of my professional career whether I thought I would still be talking about gender diversity in 2022, I would have thought that we would be living it by now,” Fortescue Metals Group Ltd. CEO Elizabeth Gaines said in a speech Tuesday via videolink to the Kalgoorlie forum. Gaines, stepping down this month as one of the industry’s few female leaders, was the only woman among 26 presenters on Tuesday, she said.

The sector’s C-suites need to do more to understand the challenges faced by women and employees from diverse backgrounds, Lynas Rare Earths Ltd. CEO Amanda Lacaze told the same conference Wednesday. “It breaks my heart, really, that our industry is still not making significant progress in this area,” Lacaze said. “I talked to a lot of my peers and none of them are in denial about the challenges we need to address.”

Rio is also seeking to repair relations with Australia’s indigenous communities and the wider public after revulsion over its decision in 2020 to blast for iron ore at Juukan Gorge in Western Australia, decimating two ancient Aboriginal heritage sites. Artifacts found at the cave-like shelters had indicated the locations were used by people as many as 46,000 years ago.

“We had focused too much on our short-term needs and transactional dealings, and neglected the connections and rapports that we spent so long building over the previous generation,” Rio’s Parker said in her speech. The miner is currently working with traditional owner groups across its operations to improve the co-management of sites, she said.

(By David Stringer, with assistance from Liz Ng and Annie Lee)

Nutrien says potash will remain tight even as Russia ships more

Bloomberg News | August 5, 2022

Image courtesy of Nutrien.

Global potash will remain tight even as more buyers shed their fear of buying from Russia and Belarus, according to a top fertilizer maker’s chief executive officer.


Supplies from Russia may remain as much as 20% below 2021 levels even as access to export markets grow into the coming year, Ken Seitz, interim CEO of Nutrien Ltd. said in a Thursday interview. Shipments from Belarus may lag as the nation doesn’t have port access. Its production could fall by as much as half, he said. The two nations are among the top-three largest producers of the crop nutrient.

“We’re going to have pent-up demand,” Setiz said in an a telephone interview. “We’re going to have soils craving potash.”

Prices soared earlier this year to multiyear highs after Russia’s invasion of Ukraine roiled markets. Many potash buyers avoided Russian supplies for fear of getting wrapped up in international sanctions. However, fertilizer sales have so far escaped the types of bans levied against other commodities. Wholesale prices are dipping as Russian product finds its way into global markets.

Weekly wholesale US Cornbelt potash prices and Brazil potash prices both fell to the lowest since March for the week ending July 29, according to Bloomberg’s Green Markets.

Nutrien has said it will ramp up potash production capability to 18 million tons by 2025, a 40% increase compared to 2020. Farmers will buy more potash if it’s available, Seitz said.

(By Jen Skerritt and Elizabeth Elkin)

CRIMINAL CAPITALI$M
British Columbia lithium junior fined for misleading advertising

Nelson Bennett - Business in Vancouver | August 5, 2022 |

Rugged Atacama Landscape, Chile – Image courtesy of Wikimedia Commons

A Vancouver-based junior mining company focused on a lithium salar mine project in Chile and a former CEO of the company have agreed to pay C$35,000 ($27,000) in penalties for misleading advertising.


According to the British Columbia Securities Commission (BCSC), Bearing Lithium Corp. (TSX-V:BRZ) misled potential investors through an advertorial promoting the company and its lithium project without properly disclosing that Bearing had paid for the promotion.

The company had hired Stock Social Inc. to write an advertorial that was published and posted on newswires, and on Twitter, LinkedIn, Facebook, investFeed and iHub, according to the BCSC.

“The advertorial was written to look and read like objective journalistic content, but did not disclose that it was issued on behalf of Bearing, nor did any of the social media posts make such disclosures,” the BCSC says in a press release.

That is a violation of the Securities Act, which requires anyone engaged in investor relations on behalf of a publicly traded company “to clearly and conspicuously disclose when promotional materials are issued by them or on their behalf.”

Bearing admitted it had violated the Securities Act by failing to disclose promotional materials had been issued on Bearing’s behalf. Former Bearing CEO Jeremy Arthur William Poirier admitted his involvement in the misleading promotion.

In a settlement with the BCSC, Bearing agreed to pay C$25,000 in fines. Poirier was ordered to pay a C$10,000 fine.

Bearing owns a 17% stake in the Maricunga project in Chile, a lithium brine salar. Australia’s Lithium Power International owns 51%. At the end of June, Lithium Power and Bearing announced an agreement in which Lithium Power will acquire 100% of the Maricunga project from Bearing and MSB SpA, a Chilean company that owns 31% of the project.

(This article first appeared in Business in Vancouver)