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Russell's mining wish list is dominated by decarbonisation, critical minerals and derisking for government.
The global mining industry is most concerned about three things: critical minerals and rare earths in particular, the need to continue decarbonising, and the role of governments. These are the main takeaways of this week's IMARC conference in Sydney. This event brings together over 10,000 industry participants at one of the largest mining conferences in the world. IMARC events are a great way for companies to meet and network, and to generate business. But they also give participants the opportunity to voice their concerns, and to share where they think the industry is headed. Participants range from buyers, governments, and suppliers to miners. This year's event was dominated by three broad themes. 1. The main buzz is about rare earths and critical minerals. The stalls at IMARC, which resemble a farmer's marketplace, are promoting mining projects instead of organic vegetables or artisanal cheese. The booths are mainly occupied by junior explorers who want to raise money from investors to further their projects. The event this year was dominated mostly by companies that are developing mines of critical minerals, including several rare earths and speciality mineral projects. There were also some more conventional energy transition materials such as lithium, as well as a few other specialty minerals. Investor marketplaces are a good indication of where hot money is heading to chase the next big thing. IMARC was a favourite five years ago when gold was the metal of choice, and ten years ago it became battery metals like cobalt, Nickel, and Lithium. The supply of minerals outside China is expected to grow in the coming years, even though not all projects will be mined. 2. Decarbonisation is important, but it must be economically viable. The IMARC conference agenda was packed with presentations and panels that addressed the need to decarbonise the mining industry. This may come as a surprise to some, given Donald Trump's return to power in the United States and the rise of the far-right in certain European countries. One panelist, who is the director of a junior miner, said that many of the companies he knew had reduced their efforts in decarbonisation to only what was required by law. Most mining companies are eager to tout their green credentials, and how they plan to move to a net-zero emissions operation. The focus shifted, however, as mining service companies that work in the decarbonisation area emphasized the lower operating costs of the switch, while the reduction in emissions was a welcomed side benefit. The focus on cost savings may actually be a positive for decarbonisation as every miner wants to save money. 3. The government has a key role to play when it comes to mining. IMARC began this week, just hours after Trump signed an agreement with the Australian Prime Minister Anthony Albanese to invest in vital mineral mining and processing. The agreement will see $8.5 billion invested into a range of projects that aim to increase the supply of essential minerals. A common theme is to reduce reliance on China as the dominant player in the sector. The two governments have de-risked investment in the mining industry. While the agreement at IMARC was widely welcomed, many felt that it was only a first step. Much more work is needed. The cost of building a supply network outside China is high, and the metals refined will likely be more expensive than those that can be purchased from China. Western governments and businesses that use these metals must answer the question: How much are they willing to pay to have a supply line that is not controlled by Beijing? The answer to this question will likely determine the future investment in mining and manufacturing in the coming years. IMARC's final thoughts: Sometimes what is not visible is just as important as the obvious. The absence of anti-mining protests was notable this year. In previous years, IMARC attracted loud but peaceful protests from activists opposing the industry. The absence of the mining industry this year has been interpreted as an indication that environmentalists are now aware that energy transition is dependent on mining and that the oil and gas sector will be the new bogeyman. You like this column? Open Interest (ROI) is 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, who is also an author. (Editing by Lincoln Feast.
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Oil Futures Return to Structure Signaling Tight Supply on Russia Sanctions
The Brent crude futures contract for the immediate period on Thursday traded at a higher price than the six-month contract, after the new U.S. Sanctions on Russia revived concerns of a tighter market in the short term. This erased earlier signs of fear of a glut. Brent's first-month contract trades at a price of around $2 per barrel higher than the contract for delivery within six months Backwardation is a term used to describe a tight supply in the near future. The global oil price rose by more than 5% after U.S. president Donald Trump imposed sanctions on Russia's biggest oil companies, Lukoil & Rosneft. The EU has added two Chinese refiners, a trader and other sanctions to its list of Russia sanctions. Giovanni Staunovo, an analyst at UBS, said that market participants' concerns are now shifting from oversupplied markets towards disruptions in supply. He said that Lukoil, and Rosneft, accounted for between 50-55% (of Russian oil output) of the country's third largest oil producer. Brent prompt traded at a discount of up to 56 cents per barrel earlier this week. This was the first time in May that Brent had been discounted since October 16. This structure is a reflection of the perception that the market will be well-supplied in near term, as prompt barrels are trading at a discount compared to later supplies. The spread between the WTI Crude Futures Contract and its major U.S. counterpart Also, trading ended in backwardation Thursday after a brief time in contango. Reporting by Seher dareen, London. Editing by Alex Lawler & Chizu Nomiyama.
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Japan Nuclear Sector seeks more support for new reactor construction, says lobby leader
A lobby leader said that the nuclear industry in Japan wants more support for building new reactors under the newly elected pronuclear prime minister Sanae Takaichi. This includes state-run auctions of capacity, according to a Thursday statement. Only 14 of the 54 reactors that operated in Japan prior to the Fukushima nuclear disaster in 2011 have been brought online. Takaichi said reviving the nuclear power was key to Japan's security. Japan has focused on restarting reactors that have been shut down - the government extended the operating life from 40 to 60 year - and only one new plant is currently in the planning stages. Hideki Masui said that the LTDA scheme, which is a long-term auction of decarbonised capacities, could be used to provide more funding for the construction of new reactors in Japan. This process takes about two decades. Masui said, "We should add a scheme to the LTDA that allows for some sort of fund recovery during construction even at an early stage." Masui stated that there are no safety regulations in place for the next-generation reactors. Operators are also seeking "financial support" and predictability from regulators. Kansai, Japan's largest nuclear power company, announced in July that it was conducting surveys for a new reactor to be built in western Japan. This is the first concrete step since Fukushima towards building a reactor. Data centres are bringing back years of decline in power consumption. By 2040, Japan wants nuclear power to account for 20% of the electricity mix, up from 10% today. Masui stated that the authorities have granted initial restart permits to four more idled reactors. Eight others are currently undergoing safety tests and another 10 could request restarts. Masui stated, "Theoretically I believe Japan can reach its nuclear goal by 2040 with over 30 reactors running." (Reporting and editing by Tony Munroe and William Maclean.)
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The spot crude premium is rising as US sanctions against Russian producers are driving China and India demand
Trade sources and analysts reported that spot premiums on crude markets rose on Thursday, as traders and analysts expected the U.S. sanctions against top Russian producers to spur China and India’s demand for supplies coming from the Middle East and Africa, and South America. Washington imposed sanctions on major oil suppliers Lukoil and Rosneft over the Ukraine conflict, causing concern over a tighter supply from Russia. Russia is the largest supplier of crude oil to China and India. Brent oil futures, the global benchmark for crude oil, rose more than 4% Thursday. Sources said that Indian refiners, as well as some Chinese companies who are among the top buyers of oil in the world, will curtail their Russian oil imports, to comply with new sanctions. They'll turn to alternative suppliers. This prompted a surge in spot premiums Thursday for the key Middle Eastern benchmarks after they had fallen earlier this month due to an abundance of supply, as the Organization of the Petroleum Exporting Countries (OPEC) and its allies increased output. Data showed that Cash Dubai's premium reached a high of $2.71 a barrel for the third consecutive session. This is more than twice the $1.26 compared to the previous session. On October 2, it hit a low of 22 months. The data also showed that spot premiums for benchmark grades GME Oman, IFAD Murban, and IFAD Murban, both rose to new one-month highs of $3.12 a barrel and $2.86 a barrel, respectively. Two sources who have direct knowledge of this matter confirmed on Thursday that Reliance Industries, a privately-owned company, will cease importing crude oil as part of a long-term agreement to purchase nearly 500,000 barrels of crude oil per day from Rosneft. Sources with direct knowledge said that Indian state refiners, including Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp., are also reviewing their Russian trade documents in order to ensure that no oil will come directly from Rosneft or Lukoil following the U.S. sanctions against the oil companies. Reliance purchased crude oil cargoes in recent days from Brazil and Middle East. These included Qatari al-Shaheen, Land grades and Iraqi Basra Medium. The crude could be used as a partial replacement for Russian supplies. Reliance was seen Thursday in the market scouting out supplies, according to a Middle Eastern merchant approached by Reliance. We expect that most of the substitute crudes will come from the Middle East. Richard Jones, an Energy Aspects crude analyst, said that the urgent need for sour-barrels will allow the current Basra surplus to be cleared faster than previously expected. The Brent-Dubai swap has fallen further into negative territory as a result of today's rally, which supports Atlantic basin arbs. Brent's premium to Dubai quotes LSEG data show that the price of a barrel was 1 cent on Thursday. It had been negative since this week's start. Brent-linked grades of oil from the Atlantic Basin are more attractive to buyers in Asia as the price difference narrows. Last week, Britain also sanctioned Rosneft (Russian oil company) and Lukoil (Russian oil company). Reporting by Florence Tan in Singapore and Siyi Luu in New Delhi, with additional reporting by Nidhi verma; editing by Harikrishnan Nair
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PG&E 2026 profit forecast beats expectations amid strong power demand
PG&E, the utility firm, forecast its 2026 full-year profit on Thursday. This was a little above Wall Street's expectations due to a surge in power demand. According to the U.S. Energy Information Administration, U.S. electricity consumption is expected to reach record levels in 2026, as data centers for artificial intelligence, cryptocurrency, and household and commercial use consume huge amounts of energy. The California-based utility announced in September that it will spend $73 billion between now and 2030 on transmission upgrades, to keep up with the surge in demand for electricity due to data centers. According to LSEG data, the company expects 2026 core earnings adjusted between $1.62-$1.66 per share. The midpoint is expected to exceed analysts' average estimates by one cent per share. The outlook for 2025 was also reduced to $1.49 to $1.51 per common share, from $1.48 to $1.52. The company reported an adjusted profit per share of 50 cents in the third quarter. This was above the 42 cents expected by analysts, due to the higher demand and lower operating expenses. The wildfire fund is a pool of money that covers the costs utilities incur due to such events. In the third quarter, the company spent $86 million, which was down 38% compared to a year ago. PG&E is investing in its grid to improve reliability, and has built underground power lines. This comes after it was blamed for causing a number of wildfires including the most deadly ones in California. The utility reported that at the end of the third quarter it had liabilities totaling $1,33 billion in relation to the Kincade Fire in 2019, $2,13 billion in relation to the Dixie Fire in 2021 and 250 million in relation the Mosquito Fire in 2022. PG&E, the parent company of Pacific Gas and Electric Company (PG&E), is an energy provider that provides service to 16 million Californians in a 70,000 square-mile area. (Reporting from Pranav Mathur, Bengaluru. Editing by Vijay Kishore.
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Stocks surge on positive earnings; sanctions against Russia boost oil
The global stock market got a boost Thursday thanks to a series of positive earnings reports that helped offset some of the gloom in Wall Street due to a lacklustre performance by tech megacaps. Oil prices also rose following U.S. sanction against Russia. Oil prices rose 5% following Washington's sanctions against major Russian companies Rosneft, and Lukoil for the Ukraine conflict. The STOXX 600 index rose 0.3% for the day, as positive earnings helped to boost the domestic indices. The MSCI All-World Index, however, fell 0.1% and is now heading towards its third consecutive day of decline. Chinese stocks recovered from a drop of 1.1% to close at 0.3%. Sources said that the White House is considering a plan of reducing software exports to China as a retaliation to Beijing's recent round of export restrictions on rare earths. Investors are on the defensive as Trump's Asia trip (next Monday) is causing geopolitical tensions, according to Charu Chanana of Saxo Bank, Singapore. Positive Earnings Surprises As earnings season begins, global equity markets are beginning to ease off their record highs. Although there have been some disappointing results or outlooks for megacaps, the majority of companies have so far surpassed analysts' expectations. Futures for the S&P 500 index and Nasdaq lost 0.1% of their gains, reversing previous gains. Tesla, the first company of the Magnificent Seven to announce earnings, saw its shares drop around 3% on Thursday in premarket trade after it missed profit expectations despite record revenue for the third quarter. There was still plenty of tech to be excited about. Shares of IonQ Computing, Rigetti Computing, and D-Wave Quantum jumped more than 20% after a report in the Wall Street Journal stating that the U.S. Government is in negotiations with several quantum-computing firms to exchange stakes for federal funding. After Donald Trump imposed sanctions on Ukraine, oil rose up to 5.5% and reached a two-week-high of $66.04 per barrel. The EU approved the 19th set of sanctions against Moscow, which included a ban on Russian gas imports. Last week, Britain imposed sanctions on Rosneft and Lukoil. DO NOT UNDERESTIMATE THE MAGIC OF RATE CUTS Investors' firm belief that the Federal Reserve will soon be on a rate-cutting frenzy helps to ease some of the anxiety over geopolitical tensions and trade conflicts. The markets show that traders expect U.S. interest rates to fall from 4% now to 3% in June. "Never underestimate a Fed which cuts rates, and also the magic word: ending QT," IG Chief Market Analyst Chris Beauchamp, referring the central bank's programme of quantitative tightening, in which it reduces its holdings of Government Bonds to tighten up credit conditions. The dollar index which compares the U.S. dollar to six other currencies, rose 0.1% last week. It has been steadily rising since August when it hit a three-and-a half year low. Investors are more confident that the Fed will protect the economy. Gold, on its way to its largest weekly decline since May, rose 0.5% in the last 24 hours at $4,114 per ounce. Overnight, the price briefly approached $4,000 as investors took profits before this week's U.S. inflation report.
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Russia's Nornickel maintains 2025 nickel production forecast
Nornickel (Russia), one of the largest nickel producers in the world and the biggest palladium producer, maintained on Thursday its nickel production forecast for 2025, which is 196,000-204,000 tons. Nornickel reported that nickel production rose 18% in the third quarter compared to the previous three month period, when the company reduced shipments from its Dudinka Port in the Arctic because of seasonal flooding. Nornickel explained that the increase in raw material processing was due to the higher volume of materials processed during second quarter. The company also said that palladium production fell 6% to 617,00 ounces in the third quarter. This was due to a halt in navigation at Dudinka Port because palladium is a metal with a longer cycle of production. The company blamed the decline of nickel and palladium in the first nine month of the year of 4% and 6 % respectively on the need to upgrade Western mining equipment. Evgeniy Fedorov, Nornickel's Chief Operation Officer said that the adjustment was a result of a temporary drop in ore production due to the gradual switch to new mining equipment by Polar Division under the program for import substitution. (Reporting and writing by Anastasia Lyrchikova, editing by Andrew Osborn and Kirsten Donovan).
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Asia Diesel Spot Premiums Hit Two-Year High on Firm Fundamentals
Asia's 10ppm sulphur diesel spot premiums LSEG data on Thursday showed that oil prices surged to a 2-year high. This was boosted by a strong first-month market and a reaction from the markets to new U.S. sanctions against two Russian oil exporters. The data revealed that spot market premiums were around $2.22 per barrel. This was an increase of more than $1.60 from September 1. However, there were few deals on the window for cargoes with a 10ppm quality. Last seen at these levels was in early October of 2023. Multiple trade sources reported that the 10ppm diesel premiums are on an upward trend since early September. This is due to limited supplies in the first month, which coincide with planned refinery maintenance, and regional production problems. The traders also said that several procurement tenders held by Southeast Asia-based buyers in early October were supportive. LSEG data also showed that front-month spreads had reached a slightly higher level than a 3-month high, of almost $2 a barrel. Traders say that the 6% increase in ICE Gasoil Futures today afternoon was also a positive factor for Asian markets. The east-west spreads have widened back to a discount of slightly over $41 per metric tonne, which is a month-wide discount. (Reporting and editing by Tomasz Janovski and Harikrishnan Nair.)
India's Reliance launches its own-grown cola brand "Campa" in UAE
Reliance Consumer products, an Indian company, launched Campa Cola in the United Arab Emirates on Tuesday. This was the first time the brand had entered the global market, which is dominated by the U.S. beverage companies PepsiCo, and Coca-Cola.
The FMCG arm Mukesh Ambani’s Reliance Group announced that it had partnered with UAE food and beverage company Agthia Group to launch the product, but refused to disclose any financial details.
This is the first international expansion for Campa Cola since Reliance Industries revived it in 2023. In the 1970s and 80s, it was a popular brand. However, its popularity waned when PepsiCo entered India in 1992 and gained in prominence.
Agthia CEO Alan Smith stated that "we believe (Campa will) strongly resonate with both the Indian expatriate population in the UAE and local consumers alike."
Campa Cola will be competing directly with Coca-Cola, Pepsi and other local brands when it enters the rapidly expanding soft drink market in the UAE. Statista estimates that the market is worth around $1 billion.
Reliance Consumer announced that the Campa portfolio will include Campa Cola and Campa Lemon in the UAE, as well as Campa Orange, Campa Zero, and the sugar-free version. The original red and purple packaging will be used. (Reporting by Kashish Tandon in Bengaluru; Editing by Shinjini Ganguli)
(source: Reuters)