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South Africa banks curb lending over climate-related default risks, study finds
Colleen Goko JOHANNESBURG - 18 August A study released by the South African Reserve Bank on Monday showed that South African banks are more reluctant to make loans as extreme weather events have increased the risk of default. The study, which looked at 38 banks from 2009 to 2024, showed that credit growth slowed down after climate shocks like floods and droughts as well as the introduction of carbon taxes in 2019. These findings are in line with global trends, such as those observed in Europe, Brazil and the United States where banks are struggling with the financial impact and regulatory efforts of reducing carbon emissions. Credit is tightening as businesses need more funding to meet climate-related challenges, and to shift to a low-carbon economic system. The authors of the study noted that "this could delay progress towards a low-carbon economic system and increase the exposure of companies to future climate related disruptions." The study included South Africa's biggest banks including Standard Bank FirstRand Absa Nedbank Capitec as well as foreign bank operating locally such as Citi, HSBC and Bank of China. The study concluded that banks reduced lending due to climate shocks, which increased the risk of defaults while reducing the value of collateral. Carbon tax measures, for example, impacted corporate profits. The report coincides this year with South Africa's G20 Presidency, where climate financing has become a major focus. Officials have called for greater international support to assist emerging markets in managing climate shocks while not stifling their economic growth. The report concluded that "Achieving an appropriate balance between prudential supervision and credit provision will be crucial to ensure climate resilience and economic development go hand in hand. This is especially true in emerging economies like South Africa." Reporting by Colleen Goko; Editing and proofreading by Olivia Kumwenda Mtambo, Christina Fincher
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Gold prices rise on lower yields and the focus on Trump-Zelenskiy summit and Jackson Hole summit
Gold prices rose on Monday as a result of lower U.S. Treasury rates. Investors also focused on the Federal Reserve annual symposium and Donald Trump's meetings with Ukrainian and European leaders. At 9:56 am, spot gold was up 0.1% at $3383.20 an ounce. ET (1355 GMT) after it hit its lowest level in August 1. U.S. Gold futures for delivery in December rose 0.2% to $ 3,388,80. Gold that does not yield is less appealing as the benchmark 10-year U.S. Treasury has fallen from its two-week-high. Investors will be focused on a White House summit between Trump and Ukrainian president Volodymyr Zelenskiy. They will also be joined by European leaders as Washington seeks a quick peace agreement to end Europe's most deadly conflict in 80 years. It follows Trump's Friday meeting with Russian President Vladimir Putin, in which the two leaders agreed that they would pursue a peace agreement without implementing any ceasefire. Gold did not react much to the Putin-Trump summit. I believe we will continue to trade in this range. "The Federal Reserve is next inflection point," said Marex analyst Edward Meir. The minutes of the July policy meeting of the U.S. Central bank are due Wednesday, just before the annual Fed conference, which will be held in Jackson Hole (Wyoming) from August 21-23. The event is expected to feature a speech by Fed Chair Jerome Powell. Meir says that the markets will be closely watching Powell's comments on interest rates. A 25 basis point reduction is already priced in but an outside chance exists of a 50-basis point cut, which would drive gold prices up. Gold tends perform well in an environment with low interest rates, and increased uncertainty. Silver spot rose 0.2% to $38.07 an ounce while platinum dropped 0.5% to $1.328.40. Palladium spot rose 0.3% to $1.115.68, after earlier falling to its lowest price since July 10. Noel John, Bengalur; Arun Koyyur, editing.
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Jackson Hole: Global stock markets fall as traders wait for Ukraine talks
The U.S. shares and European stocks started the week cautiously, ahead of an eventful week in U.S. rate policy. Attention turned to Washington, where Volodymyr Zelenskiy from Ukraine and European leaders would meet Donald Trump. S&P 500 remained near its Friday high in the early trading on Monday. The MSCI All Country World Index was also down 0.15% and within touching distance of Friday's record high. In the Asian session earlier, indexes in Japan, Taiwan, and China reached record highs, while an indicator of Chinese stocks hit its highest level for a decade. After Trump's Friday summit with Russian president Vladimir Putin, investors were preparing for the meeting between U.S. Presiden Trump and Zelenskiy as well as European leaders on Monday. The two will discuss the next steps in ending the war in Ukraine. Trump appeared to be more in line with Moscow after the summit, even though there was no agreement. Instead of first seeking a ceasefire with Ukraine, Trump wanted a peace deal that included all aspects. After the Russia-U.S. discussions on Friday, Lars Skovgaard said, "It's going to be a quiet start to the new week." Skovgaard said that, whether or not an agreement is reached, the focus is already shifting to the Federal Reserve’s Jackson Hole Symposium, which will take place from August 21-23. Chair Jerome Powell will be speaking on the economy outlook and central bank’s policy framework. The markets are pricing in a 25% rate cut during the Fed meeting on September 17 and a further reduction by December. Mark Matthews is the head of Asia research at Bank Julius Baer, Singapore. He said that he saw three rate cuts this year in the U.S., a slower GDP but no recession. The combination of these two factors should allow the rally continue. Stock markets have been buoyed by the prospect of lower borrowing rates globally. Japan's Nikkei has reached a new record high. MSCI's broadest Asia-Pacific share index outside Japan gained 0.1% after reaching a record high of four years last week. In Europe, the DAX in Germany fell by 0.2%. The FTSE in Britain was down by 0.1%. Stocks are rallying due to a strong earnings season. The S&P 500's EPS increased 11% over the past year, and 58% of companies have raised their guidance for the full-year. Goldman Sachs analysts said that the results of mega-cap technology companies have been exceptional. While Nvidia is yet to release its earnings, Magnificent Seven grew their EPS in 2Q by 26% over the previous year, which was a 12% improvement relative to expectations going into earnings season. Home Depot, Target Lowe's, Walmart and Lowe's all report this week. A FED POLICY that is a concern The possibility of Fed easing keeps short-term Treasury rates down, while the longer end of the curve is under pressure from the threat of stagflation, and huge budget deficits. This has led to the steepest yield curvature since 2021. The prospect of higher borrowing for increased defence spending has also pushed German and French long term yields to the highest levels since 2011. The dollar has been impacted by bets that the Fed will ease further. It dropped 0.4% last week against a basket currency to end at 97.858. The dollar rose slightly against the yen to 147.85 while the euro fell to $1.1673, after adding 0.5% the previous week. Gold, the most important commodity, rose 0.1%, to $3,340 per ounce, after falling 1.9% in the previous week. Trump has backed down from his threats to impose more restrictions on Russian crude oil exports. Brent crude was just 0.1% lower at $65.79 per barrel while U.S. oil stood at $62.71.
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IKAR, a Russian consultancy, raises its 2025 wheat export and crop forecasts.
IKAR, a Russian consultancy, raised its forecast for 2025 wheat production to 85.5 millions metric tons from 84.5 previously. This is the second time this month that IKAR has revised its estimate upwards. Dmitry Rylko said that the rise was due to improved assessments of the central part of the country, the Volga Region, the Urals, and Siberia. The forecast of wheat exports for the new season was also increased to 42.5 millions tons, up from 41.5million tons. IKAR has increased its 2025 total grain crop forecast from 130.5 to 132 millions metric tons. It also increased its grain export forecast from 53.0 to 54.5million tons. According to local authorities, the main grain-producing areas in southern Russia are finished harvesting barley and wheat. Stavropol Krasnodar, and Rostov produced in total around 28 million tons. On Wednesday, the Ministry of Agriculture announced that almost half of all Russian growing areas had already been harvested in preparation for 2025. The Ministry of Agriculture reported that grain production reached 75 million tonnes, with yields higher than in 2017. Current ministry forecasts for 2025 are 135 million tonnes. Forecasts for the grain exports of 2025/26 include 53-55 millions tons, including 43 to 44 million tons wheat. Reporting by Olga Popova, Editing by Mark Trevelyan
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Bayer settles Sky Valley chemical PCB cases
Bayer announced on Monday that it had reached agreements in principal with over 200 plaintiffs in the Sky Valley Education Center cases relating to PCB. However, the company said the payments have already been reflected in the recent financial reports. Bayer stated in its statement the terms of agreements made by its Monsanto division over environmental pollution caused by PCBs (polychlorinated bisphenyls), were confidential and would be subject to the approval of final settlement agreement between the parties. It added that the cost of additional settlements is covered by the PCB litigation provisions taken in the second-quarter. Bayer shares continued to rise after the news, and reached a new two-week high of 2.7% at 1305 GMT. Bayer said that the agreement did not cover previous adverse verdicts related to litigation involving the Sky Valley Education Center in Seattle, and they remain on appeal. In January, a jury in Washington ordered Bayer Inc. to pay $100,000,000 to four people who claimed they had suffered various health issues from PCB in the school. However, the jury found that the company was not responsible for the injuries alleged by eleven other individuals. The plaintiffs claim that their health issues are due to the PCBs leaked from light fixtures in schools. These chemicals were manufactured by Monsanto which Bayer purchased in 2018 for $63 Billion. Since the acquisition, the shares have been heavily impacted by lawsuits involving PCBs and, more importantly, claims that Roundup, a weedkiller, causes cancer. In the past, PCBs were used to insulate electrical appliances. They were also found in products such as caulking and floor finish, and in paint. In 1979, the U.S. Government banned them after they were linked to cancers and other health issues. Monsanto manufactured PCBs between 1935 and 1977. Bayer announced in July that it had added 1.7 billion euro ($2 billion) to its provisions and liabilities in the U.S., of which 1.2 billion euro was related to Roundup.
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Wildfires in Spain disrupt Camino de Santiago routes and spread to the mountains
Spain's worst wildfire wave in at least 20 years spread on the southern slopes Picos de Europa Mountain range Monday, prompting authorities to close a popular part of the Camino de Santiago pilgrimage. Margarita Robles, Minister of Defence, told Cadena SER radio: "This is a situation that we have not experienced in the last 20 years." She added that "the fires have unique characteristics due to climate change and the huge heat wave" that lasted 16 days. This was one of the longest summer heat waves in 50 years, with temperatures reaching 45 degrees Celsius over the weekend. The weather is expected to ease off on Monday night or Tuesday. Spain and Portugal, two of the worst-hit countries in southern Europe, are experiencing one of their worst wildfire seasons for 20 years. According to the European Forest Fire Information System, Spain has burned an estimated 344.400 hectares (851.031 acres) so far this year. This is the largest area recorded in its records dating back to 2006. It's also more than four-times the average from 2006-2024. Robles stated that thick smoke hindered the waterbombing of aircraft. The Spanish army has sent 1,900 soldiers to assist firefighters. About 20 wildfires destroyed thousands of hectares of land in Galicia, Castile and Leon and forced authorities to suspend rail services. They also cut a 50 km (31 mile) stretch of "Camino de Santiago", a pilgrimage route that is walked by thousands every summer. The route links France with the Spanish city of Santiago de Compostela, located on the westernmost tip of Spain. It is believed that the remains of St James the apostle are buried there. 'TERRIBLE THING' Patrice Lepettre (75), a pilgrim from Astorga told reporters that the inconvenience hikers faced was only temporary and couldn't be compared with the locals. "It is a terrible thing to do for the local population." "It's terrible for the local population," he said. The death toll has now reached four after a firefighter was killed in a truck crash near the village Espinoso de Compludo. Leaders from regions controlled by the main opposition People's Party have criticized the central government's poor planning, and demanded more resources to combat the wildfires. Robles claimed that all available means had been deployed. Ester Munoz, PP spokesperson on Monday, dismissed the Prime Minister Pedro Sanchez's Sunday call for a "State Pact", which he had urged with all major political parties to address climate change. Since June, the Interior Ministry reported that 27 people had been arrested for arson and 92 others were being investigated. According to EFFIS, wildfires in Portugal have burned 216,200 acres so far this season - four times more than the average of 2006-2024 for this time period. Two people have also died. Inti Landauro, Andrei Khalip, and Bernadettebaum edited this article.
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Miners in Indonesia are looking to farming as an alternative to the poisoned gold mines of Indonesia
Illegal gold mining in Indonesia is a threat to human life and the environment Indigenous villagers are encouraged to return traditional farming Megadiverse Indonesia accounts for 3% of the global gold output By Leo Galuh Illegal gold mining has left a scar on the mountainous region. Workers risk their lives by digging deep into caves and hillsides. Tempted to mine gold from the traces left by a state-run Aneka Tambang Mine (ANTAM), villagers are now engaging in small-scale, illegal mining. This has led to deforestation, and toxic chemicals such as mercury and cyanide have been used, which pollutes water and kills wildlife. Critics and environmentalists called for more strict measures to end the practice, and to encourage a return of traditional and less destructive lifestyles like farming. The recent crackdown by the police and other signs of change such as several former miners switching to farming have given rise to hope that this could be a turning point. Sukmadi Rukmana is a local agricultural officer who helps miners to transition from traditional livelihoods. He warned that uncontrolled mining could increase the risk for deadly landslides. Rukmana said, "The green vegetation surrounding the mountains has been stripped away leaving rainwater to flow downhill without a natural buffer." Supriadi was compelled to abandon mining after such threats. "I would rather stay in small-scale agriculture like this, than return to mines." "I'm afraid of being buried, particularly during the rainy seasons," he said. Citorek Kidul is a town of 1,800 people located 130 km (81 mi) south of Jakarta, on the ancestral land of the Kasepuhan Kidul traditional community. Residents are digging for gold and leaving deep tunnels and pits that can't be repaired. This threatens the culture of protecting sacred forests and rice harvests. According to U.S. Geological Survey statistics, Indonesia, which is one of the megadiverse nations with large rainforests, accounts for about 3% global gold production, along with South Africa and Peru. ANTAM mined gold in Citorek kidul in the 1980s. The site was abandoned shortly after operations ceased. After ANTAM's withdrawal, villagers were pushed by economic hardships and a lack state oversight to revisit the drilling sites using artisanal techniques without formal monitoring or reclamation. As word spread, illegal mining increased. According to local media reports, Banten Regional Police detained 10 suspects in February for mining gold without a permit. This can result in five years of imprisonment and a fine as high as 100 billion Indonesian Rupiah (about $6 million). Local authorities are challenged to encourage less destructive methods of earning money, such as sustainable agriculture. Jajang Kurniawan is the head of Banten Kidul Regional Indigenous Council. He said that Citorek villagers have relied for centuries on inland fishing for carp, as well as farming with rice and other types of crops. He said that the region had no mining tradition, as it was only large mining companies such as ANTAM who began mining in the area. The Indigenous Council also never set clear mining rules. "It has been happening for a while, and the people won't accept an outright ban." Kurniawan stated that if we tried to enforce a ban, we would end up in conflict with our own people. He said that "customary leaders have recommended against mining but this is only a suggestion." According to a study published in Media Ekonomi in 2022, mining is associated with the destruction of forests, the erosion of waterways, and the degradation of soil. Digging Deep Sumantri, a stone carver from India, chisels in depths up to 150 metres (492 feet) without wearing protective gear. He is searching for gold-bearing rocks. He said, "It is dangerous down there. It's prone to collapsing." "We brought in timber to brace up the walls." He earns only 100,000 Indonesian Rupiah per day. Supriadi said that he led a team of 15 people who used to dig and chisel rocks, carry sacks weighing over 50 kg (110 pounds) and use dynamite in caves up to 100 meters (328 feet) deep. Miners who work in deep shafts rely on air hoses made of plastic that are connected to generators powered by fuel above ground. The air is dense and oppressive. He said that many of his friends had developed lung and tuberculosis problems, probably due to the dust they inhaled while chiseling or the air from the machines. RETURNING to the Fields Plantations for palm oil, commercial crops, and other commercial crops are being built in many parts of Indonesia. Communities could practice small-scale farming that respects forest areas and natural cycles if they are guided by their customary laws. Rezki Syahrir is the CEO of Indonesian Initiative for Sustainable Mining, an independent nongovernmental organization. He said that diversification of the economy into other areas such as agriculture, plantations, or inland fishing was needed. Rice is considered sacred in local culture and therefore cannot be sold or bought. They still need money for their children to go to school and to pay electricity. You can't pay your electricity bill with a bag of rice can you? Rukmana said. He said that 10 illegal miners have recently switched to traditional farming and could produce an excess of vegetables for the local economy. Supriadi says he's been able earn a steady - and safer-income since he quit mining in 2016. He runs a motorcycle shop. Gold mining is a demanding job. Your body will be pushed to its limit. He said, "It just drains you."
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China still stores crude oil despite refinery run-up: Russell
China's refiners increased their processing rates in the month of July. However, strong crude oil imports from abroad and domestic production meant that there was still an excess of over half a million barrels a day (bpd). Calculations based on data from the official sources show that crude oil surplus in July dropped to 530,000 barrels per day (bpd) from 1.42million bpd. The key is that despite the drop in oil surplus, refiners will likely continue to add to their stockpiles. This will allow them the ability to reduce imports if prices increase to levels they feel are not justified. China does not reveal the volume of crude oil flowing in or out of its strategic and commercial stockspiles. However, an estimate can still be made by subtracting the amount processed from the total crude available through imports and domestic production. Refiners in July processed 14.85 millions bpd crude, an increase of 8.9% over the same period last year. However, this was a decrease of 2% compared to June, which had been the highest month since September 2023. According to data released by the government on August 15, the utilisation rate increased to 71.84%, an increase of 1.02 percentages points from June, and 3.56 percentages points from July 2024. In July, China's crude imports were 11.11 million barrels per day (bpd), while its domestic production was only 4.27 million. The refiners had a total of 15,38 million bpd available. Subtracting the 14,85 million bpd processed, leaves an excess of 530,000. The surplus crude in China for the first seven month of the year was 980,000 bpd. This is mainly due to the fact that crude imports, domestic production and refinery processing increased at a higher rate from March. Not all this excess crude has likely been stored, as some is processed in plants that are not included in the official data. Even if you ignore the gaps in official data, there is no doubt that since March China has imported crude oil at a rate far greater than what it requires to meet its own domestic fuel needs. CRUDE IMPORTS The market will be looking to see if the recent strength of crude imports is going to continue or if it will decrease in the coming months, as refiners begin using more oil from their stocks. Prices are the key. China's refiners tend to increase imports when prices seem reasonable but reduce them when prices have increased too much or too fast. The rise in crude imports since March coincided with the decline in prices. Brent crude, the global benchmark, fell from an all-time high of $82.63 per barrel on January 15, to a low of just $58.50 a barrel by May 5. Brent crude oil prices have been volatile since then. The conflict between Israel, Iran and the United States - later joined by other countries - sent Brent to an all time high of $81.40 per barrel on June 23. Prices then dropped to $65.57 a barrel in the early Asian trading on Monday. China may reduce imports of cargoes due to arrive in late August or early September because the prices have risen from their low in May to the high in June. This is the period when they were planned. China may buy less cargo if Saudi Arabia, the world's largest exporter, increases its official selling price for August- and September loading cargoes. Imports of crude oil may be held up in the coming months if refinery rates continue to increase and Chinese refiners keep up their recent trend of selling more fuels, such as gasoline and diesel. You like this column? Check out Open Interest, your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
The wooden church takes a slow Swedish road trip in order to avoid mining subsidence
The landmark Kiruna Church in Sweden will start a two-day journey to a new residence on Tuesday. It will be a slow, arduous trip down a polar road to protect its wooden walls against ground subsidence as well as the expansion of the largest underground iron ore mining.
Workers have already lifted the 600-ton 113-year old church off its foundations, and loaded it onto a trailer. This is part of a 30 year project to move thousands of people from the Lapland City.
The mine-operator LKAB spent the past year widening roads for the journey that will take the red painted church - often voted Sweden's most beautiful wooden structure - down a 5km (3 mile) winding route towards a brand-new Kiruna City Centre.
The journey will not only save the church but also remove it from its site of more than 100 years.
Lena Tjarnberg is the vicar in Kiruna. She said, "The church represents Kiruna in some ways, and it's also a place of safety."
"It's a day full of joy for me." I believe that people are also sad about leaving this place.
The feelings of many indigenous Sami people, who have herded their reindeer in the area for thousands of year, are not mixed. This move reminds us of the wider changes that have been brought about by mining expansion.
Lars-Marcus Kuhmunen is the chair of local Gabna Sami. This area was used as grazing and also where reindeer calves were born.
He said that if plans to build another mine near the current one go forward, it would block the path between the reindeer’s winter and summer pastures. This, in turn, would make herding “impossible” for the future.
"Fifty-five years ago, my great grandfather said that the mine would eat away at our way of living, our reindeer-herding. He was right."
TRANSFORMATION SYMBOL
The relocation project is not just about the church.
LKAB estimates that around 3,000 houses and 6,000 people will need to be relocated. Several public and commercial structures are being demolished, while others, such as the church, will be moved intact.
Around the new centre of the city, other buildings are being demolished and rebuilt. A new city hall, hundreds of new shops, and new homes have been built.
This shift will allow LKAB to continue operating in Kiruna, where it produces 80% the iron ore that is mined in Europe for many decades.
Since the 1890s the state-owned company has produced around 2 billion tons of ore, mostly from the Kiruna Mine. Another 6 billion tonnes of mineral resources are estimated in Kiruna, Svappavaara, and Malmberget.
LKAB plans to build a new mine near the existing Kiruna site.
The proposed Per Geijer iron ore mine also contains significant deposits in rare earth elements. This group of 17 metals is critical for products ranging from iPhones to lasers, and it's vital to meet Europe's climate targets.
Europe and most of the rest is dependent on China to supply and process rare earths. The EU has designated Per Geijer a Strategic Project in March of this year. This could speed up the process to get the new mine into operation.
Kiruna’s new city center will be forming around 5km away.
Mayor Mats Taaveniku said: "The church... is a statement or symbol for this transformation of the city."
We are already half way there. "We have 10 more years to move the rest." Reporting by Tom Little; writing by Simon Johnson; editing by Andrew Heavens
(source: Reuters)