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Peru restarts mining operations in the violence-hit North
Walter Astudillo, the Defense Minister, said that Peru has resumed formal mining operations for parts of northern Peru affected by violence. Dina Boluarte, the president of Colombia, suspended mining operations in her country last month after illegal miners kidnapped 13 gold workers and killed them. The incident occurred in the district of Pataz located to its north. Peru is the third largest copper producer in the world. Most of its red metal deposits are found in the southern part of the Andean country, while gold and other precious metals are mined to the north. Astudillo stated that the decision to resume operation was made after discussions with Pataz authorities and formal mining companies. He also noted the importance of the sector to the local economy. He said that the public was demanding mining activities at a post-cabinet meeting press conference. The minister said that the government has extended the state-of-emergency in Pataz by another 60 days. This will allow the armed forces take control of the region. Companies and small-scale or artisanal miners who have valid permits will be able to resume mining operations. The REINFO program allows temporary activities while formalization is completed. He added that activities will be allowed from 5 am to 10 pm local time. (Reporting and writing by Marco Aquino, editing by Sarah Morland, Alistair Bell and Sarah Morland)
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China's new tracking system increases scrutiny of rare earth magnets
Three sources confirmed that China has implemented a tracking system in its rare earth magnet industry, as export restrictions are beginning to isolate customers from around the globe. Two sources briefed on the issue and two others familiar with it said that the national tracking system went into effect this week and requires producers to provide extra information online, including trading volume and client names. China, the world's biggest rare earth magnet exporter and supplier, in April, placed export restrictions on several magnets and seven medium-to-heavy rare earth elements. Exporters were required to obtain licenses. The delays in getting approvals has disrupted supply chains, affecting automakers, semiconductor firms and others. Global automakers have already begun to shut down some production lines, as they run out of reserves. Beijing announced high-level plans in June to create an information tracking system for rare earths products. However, the subject was not mentioned again until this week, according to a source familiar with the issue. China's export restrictions on rare earths, magnets, and other products - in which it has a near monopoly - may become permanent. In the U.S., and elsewhere, there was hope that this would be eliminated as part of the trade truce reached in Geneva last week. Exports tend to gradually rebound in cases where China has placed export restrictions on metals. This is because exporters have applied for and received licences. Tim Zhang, the founder of Edge Research in Singapore, said: "Our current hypotheses is that China will continue to control its exports on rare earths as it's an ace card China can hold." Beijing's goal is to strengthen its control of the sector and crackdown on illegal mining, smuggling and tax evasion. A fourth source, who was also briefed about the issue, said that Beijing has a long-term plan to track all rare earth production chains, not just magnets.
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US stock market ends mixed as Treasury yields fall amid trade negotiations and jobs data
Wall Street was a little shaky and U.S. Treasury rates dropped on Wednesday, as investors watched the U.S. Trade Negotiations and looked forward to Friday's important employment report. The Nasdaq was modestly boosted by tech, while S&P 500 closed the session basically flat and the Dow ended slightly lower. The dollar dropped and gold rose. Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. He said that the big rate move has provided some relief, if not directly for stocks, then at least to those who have been trying to explain why rates are moving higher. The equity markets are relieved that rates still seem to have a limit in this type of environment. The U.S. and European trade talks are moving forward, Europe's chief negotiator stated. He noted that the doubling in U.S. tariffs on metals, which took effect Wednesday, does not help negotiations. China's restrictions on vital mineral exports has upset global automakers who claim shortages could halt global supply chain. Trump, who is expected to meet with Chinese President Xi Jinping soon, called Xi "extremely difficult to deal with" in a post on social media. This suggests that a quick resolution of the trade dispute between the two world's largest economies may prove elusive. Investors remain confident or as confident as possible that the administration will not let things go too far. Mayfield said that the administration would not return to its April 8 low. Mayfield stated that "I do not necessarily believe that the TACO trade (Trump Always Chickens Out), is wrong. It's obviously a joke. But there are enough signs that suggest that if the Trump administration reverts to their worst tendencies in trade and tariffs then the market would react accordingly." ADP, a payroll processor, reported that the U.S. Private Sector added 37,000 new jobs in the last month. This is 69.2% less than what analysts expected to see on Friday from the Labor Department, which will release a more comprehensive report. Survey data also showed that the U.S. service sector contracted last month. Prices paid, an inflation indicator, reached their highest level since November 20,22. The Dow Jones Industrial Average dropped 91.90, or 0.22 %, to 42 427.74. The S&P 500 rose by 0.44, or just 0.01% to 5,970.81 while the Nasdaq Composite increased 61.53, or 3.32 %, to 19,460.49. After Berlin approved a tax relief package for corporations, European stocks rose and Germany’s benchmark index reached a new record high. This was despite survey data showing that euro zone business activity is stagnating and Germany’s services sector has posted its biggest contraction in over two years. The MSCI index of global stocks rose by 2.85 points or 0.32% to 888.75. The pan-European STOXX 600 Index rose by 0.47% while Europe's broad FTSEurofirst 300 Index rose by 9.84 points or 0.45% Emerging market stocks increased 14.71 points or 1.27% to 1,172.84. MSCI's broadest Asia-Pacific share index outside Japan closed up 1.3% at 618.16. Japan's Nikkei gained 300.64 or 0.80% to 37,747.45. Dollars fell across the board, as a series of downbeat economic reports suggested a softening in labor market conditions. The services sector also showed signs of contraction. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.29%, falling to 98.87. Meanwhile, the euro rose 0.36%, reaching $1.1411. The dollar fell 0.78% against the Japanese yen to 142.87. The yields on longer-dated U.S. Treasury bonds fell after the weaker-than-expected data. Investors looked for signs of progress with tariff negotiations, and were looking ahead to the payrolls reports. The yield on the benchmark 10-year U.S. notes dropped 10.1 basis points from 4.46% at late Tuesday to 4.359%. The 30-year bond rate fell by 10.2 basis points, from 4.983% to 4.8806% late on Tuesday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve fell by 8.6 basis points, to 3.871% from 3.957% at late Tuesday. Crude oil prices fell as U.S. inventories were higher than expected, adding to the supply concerns amid tensions in trade and OPEC+ production increases. U.S. crude fell 0.88%, settling at $62.85 per barrel. Brent closed at $64.86 a barrel, down by 1.17% for the day. The gold price rose, supported by a soft dollar. Investors waited for employment and trade data. Spot gold increased by 0.62%, to $3372.86 per ounce. U.S. Gold Futures rose by 0.64% to an ounce of $3,371.50.
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The Nazca Lines in Peru are now at risk of mining after a protected area was slashed
The Peruvian government has reduced the area of protected land around the famed Nazca Lines. Critics and archaeologists are concerned that this could make the ancient geoglyphs more vulnerable to nearby informal mining operations. The Peruvian Culture Ministry reduced the protected area from 5,600 square kilometers to 3,200 last week. It attributed the decision to topographical studies and archeological investigations that better delineated areas of "real patrimonial values." Over 800 large desert etchings depicting animals, geometric figures, and plants were created over 1,500 years ago. UNESCO designated them a World Heritage Site in 1994. According to the Energy and Mines Ministry, 362 small scale gold miners are operating in the Nazca District as part of the program to regularize the status. The authorities have conducted previous operations to combat illegal mining. Pieter Van Dalen is the head of Peru's archaeological association. He said that the main threat to the Nazca Lines was informal mining in the surrounding area and within the protected zone. He described the reduction as "very regrettable" and questioned the claim that the original area had been too large to be controlled. Police and industry sources claim that with gold prices at record highs, the government's program to regulate small-scale mining (known as REINFO) is riddled with irregularities. Illegal miners are also accused of exploiting REINFO in collusion with criminal groups. Congress and the Administration are scrambling to come up with a new program that will close operating loopholes. The small-scale miners protested against an earlier deadline because they feared that there would be little time for them to normalize their operations. According to the government, illegal mining in Peru generates revenue of more than $3 billion per year, which is greater than that generated by drug trafficking. On Tuesday, Energy and Mines minister Jorge Montero confirmed that small-scale mining takes place in Nazca. He said that the government was "evaluating the impact of this (reduction) on the status of small scale and artisanal miners working in the area which used to be part of Nazca’s (protected zone) but is now not." Peru's gold exported in 2024 will be $15.5 billion, up from the $11 billion of the previous year. According to data from the industry and Peru's financial regulator, around 40% of Peruvian gold exports come from illegal sources. (Reporting and editing by Aurora Ellis; Marco Aquino)
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US stocks rise, Treasury yields fall as investors focus on tariff talks and jobs data
Investors watched the U.S. Trade Negotiations and awaited Friday's important employment report. The dollar fell and gold remained unchanged. Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. He said that the big rate move has provided some relief, if not directly for stocks, then at least to those who have been trying to explain why rates are moving up. The equity markets are relieved that rates still seem to have a range of possible increases in this type of environment. U.S.-European The top European negotiator noted that trade talks were progressing. He also pointed out that the U.S. tariffs on metals have doubled since Wednesday. This is not helping negotiations. China's restrictions on vital mineral exports has caused concern among global automakers. They warn that shortages could disrupt global supply chains. Trump, who is expected to meet with Chinese President Xi Jinping soon, called Xi "extremely difficult to deal with" in a post on social media. This suggests that a quick resolution to trade disputes between the two world's largest economies may prove elusive. Investors remain confident, or as confident as possible that the administration will not let things go too far. Mayfield said that the administration would not return to its low point of April 8. I don't think that it is necessary to believe in the existence of God. (Trump always chickens out) trade is wrong. Obviously, it's just a joke. But there are enough signs that suggest if the Trump administration returns to their worst tendencies in terms of trade and tariffs then the market would react accordingly," Mayfield said. ADP, a payroll processor, reported that the U.S. Private Sector added 37,000 new jobs in the last month. This is 69.2% less than what analysts expected to see on Friday from the Labor Department, which will release a more comprehensive report. Survey data also showed that the U.S. service sector contracted last month. Prices paid, an inflation indicator, reached their highest level since November 20,22. The Dow Jones Industrial Average increased 18.57 points or 0.04% to 42,537.23. The S&P 500 gained 12.69 points or 0.21% to 5,982.97, and the Nasdaq Composite rose 84.52 or 0.44% to 19,483.48. After Berlin approved a tax relief package for corporations, European stocks rose and Germany’s benchmark index reached a new record high. This was despite survey data showing that euro zone business activity is stagnating and Germany’s services sector has posted its biggest contraction in over two years. The MSCI index of global stocks rose by 4.25 points or 0.48 percent to 890.15. The pan-European STOXX 600 Index rose by 0.47% while Europe's broad FTSEurofirst 300 Index rose by 9.84 points or 0.45%. Emerging market stocks increased 14.85 points or 1.28% to 1,172.98. MSCI's broadest Asia-Pacific share index outside Japan closed up 1.33% at 618.30. Japan's Nikkei gained 300.64 points or 0.80% to 37,747.45. Dollars fell across the board, as a series of downbeat economic reports suggested a softening in labor market conditions. The services sector also showed signs of contraction. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, euro and pound sterling) fell by 0.38%, falling to 98.79. At $1.1421, the euro rose 0.45%. The dollar fell 0.82% against the Japanese yen to 142.82. The yields on longer-dated U.S. Treasury bonds fell after the weaker-than-expected data. Investors waited for any signs of progress with tariff negotiations, and also looked forward to the payrolls report. The yield on the benchmark 10-year U.S. notes dropped 9.5 basis points from 4.46% to 4.365% late on Tuesday. The 30-year bond rate fell by 9.5 basis points, from 4.983% to 4.8877% late on Tuesday. The yield on the 2-year note, which is usually in line with expectations of interest rates for the Federal Reserve fell by 8.2 basis points, from 3.957% to 3.875%, late Tuesday. Crude oil prices fell as U.S. inventories were higher than expected, adding to the supply concerns amid tensions in trade and OPEC+ production increases. U.S. crude fell 0.88%, settling at $62.85, while Brent closed at $64.86 a barrel, down by 1.17% for the day. The gold price rose, supported by a soft dollar. Investors waited for employment and trade data. Spot gold increased 0.7% to $3.375.59 per ounce. U.S. Gold Futures increased 0.64% to an ounce of $3,371.50.
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Rio Tinto reduces cost of Serbia Lithium project
Rio Tinto is revising the cost of its Serbian lithium project that the European Commission identified as one of 13 strategic new critical material projects, Chad Blewitt, managing director of the Jadar lithium mine, said on Wednesday. The project is contested by green groups and many Serbs on environmental grounds, and sparked massive street protests in 2022 which led the government to revoke all Rio Tinto's exploration licences. The Constitutional Court overturned the decision last year and reinstated the licences. "The last time we went out to market and looked at the budget, it was over 2.55 billion euros ($2.91 billion). So we are currently in the midst of updating that capital cost," Blewitt told . "The strategic project status that we received today requires us to meet European Union environmental and human rights standards, and that will be reflected in the final capital cost." He could not be drawn into an estimate of the revised cost or timeline for the project - which was initially forecast to start production in 2027 - saying the Anglo-Australian giant also needed to obtain a field exploitation licence. "Once we... get the licence, we can then go and update the project schedules and have a look at costing. So I don't want to give a definitive date." Rio is the only major mining company to bet heavily on lithium - used in electric vehicle batteries - accelerating its push over the past six months with three new deals: its $6.7 billion buy of U.S.-based Arcadium Lithium and two projects in Chile for more than $1 billion. With the lithium market in the doldrums as a wave of new supply overwhelms weaker-than-expected demand for EV batteries, it will take years to know whether this bet will have paid off, although demand projections for the metal are more positive into the next decade. If implemented, Rio Tinto's Jadar project could meet 90% of Europe's current lithium needs. But protesters in Serbia have threatened to block roads and railways if the project goes ahead. "Whatever happens next will involve multiple stages of scrutiny and public consultation," Blewitt said. "It (the project) positions Serbia at the forefront of the green and digital revolution." ($1 = 0.8748 euros) (Reporting by Ivana Sekularac; Additional reporting by Clara Denina; Editing by Emelia Sithole-Matarise)
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Sources say that Mexico renewed its approval of the Nippon Steel and US Steel merger on Thursday.
Mexico's antitrust regulator is expected to renew approval of Nippon Steel’s fraught $14.9 billion bid for U.S. Steel by Thursday, according three people with knowledge of the matter. This will remove one of the final remaining obstacles to the tie-up. The people declined to name the source as it was not public. Mexican approval for the acquisition first announced in December of 2023 has expired. It must now be renewed to allow the merger to go ahead. Cofece has not responded to our requests for comment. U.S. Steel, Nippon Steel, and U.S. Steel all declined to comment. Investors are anxiously awaiting President Donald Trump's final approval of a deal to ease any U.S. National Security concerns. Trump has technically until Thursday to sign the bill. Both former President Joe Biden, and Trump, who both sought to win over voters in Pennsylvania before the 2016 presidential election, asserted that U.S. Steel must remain American-owned. Biden blocked this deal in January, citing national security concerns. This led to lawsuits from the companies who claimed that the review of their national security was biased. The Biden White House denied the claim. Steel companies saw an opportunity with the Trump administration. The Trump administration began its tenure on January 20, and in April, opened a 45-day review of national security for the proposed merger. Trump's public remarks, which ranged from welcoming the Japanese company to "invest" in U.S. Steel to float a minority stake, caused confusion. At a rally on Friday in Pennsylvania, Trump applauded the agreement between the two companies, saying that Nippon Steel was a "great" partner for U.S. Steel. He later told reporters that the deal was still subject to his approval and he had not yet decided whether Nippon Steel would be allowed to acquire ownership. Reporting by Alexandra Alper, Diego Ore and Rod Nickel. Editing by Franklin Paul & Rod Nickel.
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Thyssenkrupp will spin-off 49% of its defence division TKMS as a dividend to shareholders
Thyssenkrupp will spin off 49% its defence division TKMS as part of a listing in the second half of this year. These comments were made during a press conference in Kiel, Germany where Thyssenkrupp unveiled the new branding of the division. TKMS's order book has reached a record of 18 billion euros, or $20.5 billion. This is due to the strong demand for military products. Volkmar Dinstuhl is responsible for M&A at Thyssenkrupp Automotive. He revealed that the shareholders of the conglomerate "will own a 49% share as part of this spin-off". This was the first time that the size of the stake would be disclosed. Thyssenkrupp, in its divestment plan for 2025, has only stated that it will keep a majority stake in TKMS. TKMS manufactures frigates, subs, sensor and mine hunting technology. Thyssenkrupp continues its strategy of selling stakes in main business lines to become a holding firm. The German company sold a 20 percent stake in its steel business last year after listing Thyssenkrupp Nucera, its hydrogen division in 2023. Reporting by Fabian Bimmer & Christoph Steitz. Editing by Jane Merriman
The price of oil is rising due to supply concerns and a weaker dollar
The oil prices rose on Tuesday due to concerns over supply. Iran is set to reject the U.S. proposal for a nuclear deal that would ease sanctions on the country's largest oil producer. A weaker dollar also helped to support prices.
Brent crude futures rose 21 cents or 0.32% to $64.84 per barrel at 0437 GMT. U.S. West Texas Intermediate Crude was up 27 cents or 0.43% to $62.79 per barrel after rising by about 1% in the previous session.
In a report, ING analysts said that the oil market gained on Monday due to rising geopolitical risk and a lower-than-expected supply increase from OPEC+.
ING stated on Tuesday that "the strength continued in the early morning trading today."
Both contracts rose by nearly 3% the previous session, after the Organization of the Petroleum Exporting Countries (OPEC+) agreed to limit the increase in production in July to 411,000 barrels a day. This was lower than many market participants had feared, and the same as the two previous months.
Analysts at ANZ said that investors have unwound the bearish positions built up before the weekend meeting.
The dollar index, which measures the performance of the US currency against six major currencies, was near its six-week low as the markets assessed the impact that President Donald Trump's proposed tariffs could have on the economy and inflation.
Oil, for example, becomes cheaper when the dollar value of commodities is weaker.
"Crude Oil Prices Continue to Rise, Supported by the Weakening Dollar," said Priyanka Sackdeva, Senior Market Analyst at Phillip Nova.
Prices were also supported by geopolitical tensions. Iran is set to reject the U.S. proposal for settling a decades-old dispute over nuclear energy, a diplomat from Iran said on Monday. He claimed that it did not address Tehran's concerns or soften Washington’s stance towards uranium enrichment.
If the nuclear talks between Iran and the U.S. fail, this could lead to continued sanctions against Iran. This would limit Iranian oil supply and support oil prices.
A wildfire in Alberta, Canada, has caused a temporary shut-down of oil and gas production. This could lead to a reduction in supply.
Wildfires have affected the production of crude oil in Canada by more than 344,000 barrels per day (bpd). This is about 7%. (Reporting and editing by Sonali Freed and Jamie Freed; Anjana Anil and Michele Pek)
(source: Reuters)