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BHP names Ross McEwan as the new chairman to replace Ken MacKenzie
BHP, world's largest listed mining company, announced on Wednesday that Ross McEwan, former CEO of National Australia Bank, will be its new Chairman, replacing Ken MacKenzie who is stepping down on March 31, 2019. McEwan's new position will include overseeing BHP’s selection of the next CEO. He may also be asked to decide whether BHP should revive plans to purchase rival Anglo American following a failed $49 billion bid last year. McEwan is a nonexecutive director of BHP, since April 2024, after spending five years as the CEO of NAB, Australia’s second largest bank and its largest business lender. He was also the head of Royal Bank of Scotland. After a damaging Royal Commission inquiry into poor business practice in 2019, the New Zealand-born NAB CEO was appointed. He was widely credited with revitalizing NAB's reputation with investors through a simplification program. He is currently the director of QinetiQ Group, a defence technology company. McEwan will likely oversee the process to find a successor for BHP CEO Mike Henry, who is about to enter his fifth year in that position. The average tenure of the top job is six years. MacKenzie has been with BHP since 2009 and chair of the company for eight years. He was responsible for BHP's failed bid to acquire Anglo, BHP’s recovery from the Samarco Dam disaster in Brazil, unification of the structure into a single Australian listing and the approval of major investment in Canadian Potash. Andy Forster, of Argo Investments Sydney said: "I think he has done a great job in that time." "He brought a lot of operating discipline, and was really focused on capital allocation and returns." Two other investors, who weren't authorized to speak with the media, believe that MacKenzie stepping down has probably reduced the likelihood of BHP launching another attack on Anglo. MacKenzie said at the annual general meeting of BHP on 30 October that the company had "moved forward" in its pursuit of Anglo. However, the company later retracted this statement when it filed a regulatory filing. (Reporting by Melanie Burton in Melbourne. (Byron Kaye and Rishav chatterjee contributed additional reporting from Sydney and Bengaluru, respectively; editing by Savio D’Souza and Jamie Freed).
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Stocks are upbeat and US yields continue to rise ahead of the inflation test
Investors reacted to the latest U.S. trade war and Federal Reserve Chairman Jerome Powell's message of a gradual path towards rate cuts. The financial markets waited for the U.S. consumer price index to be released later that day, which could provide a clue as to the direction of the monetary policy in the country. Investors were also watching any developments in tariffs. According to reports, advisers of U.S. president Donald Trump are finalising plans to implement reciprocal tariffs on all countries that charge duties on U.S. imported goods. Trump raised the tariffs on imports of steel and aluminum to 25%, up from 10%. He also eliminated product-specific exemptions as well as country exclusions. However, he said that he would consider an exception for Australia. Japan's Industry Minister Yoji Muto stated on Wednesday that the Government has also Requested The United States has exempted Japan. Mexico, Canada, and the European Union condemned the move. The EU said that the bloc of 27 nations would take "firm, proportionate countermeasures". Stock futures indicated a positive opening in Europe despite all the uncertainty. Investors focused on corporate earnings, and the possibility that threatened U.S. duty could be used instead as a negotiation tool, with punitive measures being watered down. The futures of the EUROSTOXX50 index rose by 0.2%, while those of the DAX Index gained 0.27%. FTSE Futures were flat. The benchmark STOXX Index has logged gains of almost 8% this year. Chris Weston is the head of research for Pepperstone. He said: "Solid earnings and a view we may be closer to trough European economic growth offer tailwinds. Funds are switching from U.S. stocks due to frustrations about the U.S. tech/AI trade lacking buzz. Questions have also been raised regarding continued U.S. exceptionalalism." Nasdaq Futures were barely changed while S&P500 futures dropped 0.08%. The broadest MSCI index of Asia-Pacific stocks outside Japan increased by 0.55%. However, gains were limited as traders awaited U.S. inflation data. Shier Lee Lim is the lead FX and macrostrategist for APAC, at Convera. "Tariff developments are notable but have not yet significantly shifted sentiment as markets continue to be anchored by macroeconomic data and central bank guidance." The Shanghai Composite Index and China's CSI300 blue chip index both rose by 0.3%. Hong Kong's Hang Seng Index rose 1.83%. Alibaba shares listed in Hong Kong surged to their highest level in four months after media reports that the company is working with Apple to bring artificial intelligence to iPhone users across China. Japan's Nikkei rose 0.4%. Investors' attention is now focused on the latest consumer price reading, which was released Wednesday. The yield on the benchmark 10-year U.S. notes reached a high of 4.5560% in a week, while that for two-year U.S. notes remained steady at 4.3023%. The markets have slowly reduced expectations of a Fed rate cut this year. They expect the U.S. Central Bank to keep rates unchanged at its meetings in March and May. Powell said on Tuesday: "We're in a good place in this economy". He noted that the Fed is not in a hurry to cut interest rates, but stands ready to do so in the event of further inflation or deterioration in the job market. The dollar's tariff-driven rise in currencies halted on Wednesday. The euro remained steady at $1.0359 while sterling last traded for $1.2446. Helen Given, FX Trader at Monex USA Washington said: "We have seen a lot volatility in the headlines about tariffs over the past two weeks." But what we are seeing is that headlines and announcements do not necessarily indicate that tariffs will be levied at the time we thought they would. The yen dropped more than 0.7%, to 153.65 dollars. Brent crude fell 0.38% to $75.71 per barrel, a drop from the recent highs. U.S. crude also fell 0.42% to $73.01. Spot gold was nearing a record-high at $2,888.25 per ounce.
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Minister says Australia will not reduce 'green aluminium' exports to the US in order to avoid tariff
Australia's Industry Minister said on Wednesday that the threat of U.S. Tariffs will not derail the nation's plans to boost "green' aluminium exports. He added that American customers would end up paying more than they would for a product which is in high demand globally. Peter Navarro, a Trump adviser who spoke to CNN after Donald Trump announced that he was considering an exemption for Australia on a 25% flat tariff on imports of steel and aluminum, said in the interview: "Australia just kills our aluminium market." The executive order imposing the tariffs stated that the volume of Australian aluminium had surged since it was granted an exemption from tariffs by Trump in 2018. It was 103% more in 2024 than its average volume between 2015 and 2017. The order stated that "Australia has ignored its verbal agreement to reduce its aluminum exports by a reasonable amount." Ed Husic, the Industry Minister, said that Australia, as a strong ally and a country with close defence ties, would vigorously advocate for a new exception for its aluminum. He also stated that Australia will not reduce aluminium exports into the United States where the West Coast is in high demand. He told reporters in Canberra's National Press Club that the world is a big consumer of aluminium. "We need it to transition to net zero," said Mr. Smith. "Our American friends, do you want to pay more money for a product you have a high demand for?" he asked reporters at the National Press Club in Canberra. The center-left Labor Government of Anthony Albanese, Prime Minister, faces national elections in May. Last month it announced a plan to spend A$2 Billion for aluminium smelters switch to renewable energy to secure up 75,000 direct jobs and indirect ones. Labor has ties with the Metal Workers Union, one of Australia’s largest unions. Husic, a son of an Australian metal worker, claimed that aluminium exports supported thousands of rural jobs. Australia, the sixth largest aluminium producer in the world, contributed 1% to the U.S. steel imports and 2% to its aluminum imports. Reporting by Kirsty Wantham. Gerry Doyle edited the article.
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Trump Administration prepares reciprocal US tariffs amid trade war fears
Donald Trump's advisers on trade were finalizing plans for the reciprocal duties that the U.S. President has promised to impose against every country that imposes duties on U.S. imported goods, raising fears of an expanding global trade war. Trump shocked the markets on Monday with his decision to impose tariffs starting March 12 on all imports of steel and aluminum. Mexico, Canada, and the European Union condemned the plans, while Japan, Australia, and other countries said they wanted exemptions. Industries that depend on imports of steel and aluminum scrambled to reduce the expected cost increase. Last week, Trump imposed an additional 10% tariff for Chinese goods. This was effective on February 4. Chinese countermeasures took effect this week. He delayed the 25% tariff on goods coming from Mexico and Canada by a month, until March 4, to allow for negotiations about steps to secure U.S. border security and stop the flow of fentanyl. Many U.S. workers were pleased with the metal tariffs imposed on Monday, but manufacturing-heavy companies agonized about the next steps. They warned that the tariff increase would have a ripple effect across the supply chain, affecting businesses who rely upon the materials. White House officials are being tight-lipped regarding the timing or structure of the next tariffs. One source has said that the announcement could come later this week. Trump announced on Monday that he will announce reciprocal tariffs within the next two business days for all countries who impose duties on U.S. products. He also said he is looking into separate tariffs for cars, semiconductors, and pharmaceuticals. Experts in trade say that structuring the reciprocal duties Trump wants presents big challenges to his team. This may explain why the latest tariffs were not announced Tuesday. William Reinsch said Trump officials can choose between a simple 10% or 20% flat tariff rate or a messier option that requires separate tariff schedules that match U.S. rates to those of other countries. A source who tracks the work on tariffs reported that details are still being worked out as late as Tuesday. Damon Pike is a principal and trade specialist with BDO International's U.S. division. He said that the reciprocal tariffs Trump envisaged would be a massive undertaking given that the 186 member countries of the World Customs Organization have different duty rates. "At an international level, you'll find 5,000 different product subheadings at the 6-digit level. That's 5,000 times 186 countries. "It's like an artificial intelligence project," said he. Experts believe that Trump could use several statutes. These include Section 122 of Trade Act of 1974 which only allows a maximum flat rate of 15% for a period of six months or Section 338 of Tariff Act of 1929, which gives authority to take action against unfair trade practices that harm U.S. Commerce, but which has never been used. Trump could also use the International Emergency Economic Powers Act to justify tariffs on China, and those pending against Canada and Mexico. Pike added that, without IEEPA's help, it would take some sort of agency action before trade remedies could be imposed. "But everything seems to move quickly," he said. Reinsch stated that imposing reciprocal tariffs also ceded the control of U.S. tariff rates to other countries. "For instance, if Colombia had a high coffee tariff to protect their industry, we'd put a similar high tariff on Colombian Coffee, even though we do not grow coffee. "The only ones who would suffer are the U.S. consumer," he said.
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US Report: Palm oil jumps on rival oil that is stronger
Malaysian palm futures rose by more than 2% in the past 24 hours, following gains made by rival edible oils. A positive U.S. report about world agricultural demand and supply estimates also helped. By midday, the benchmark contract for palm oil delivery in April on the Bursa Derivatives exchange had risen 102 ringgit or 2.22% to 4,695 Ringgit ($1,051.28) per metric ton. The Malaysian market was closed for a holiday on Tuesday. A Kuala Lumpur based trader reported that the Crude Palm Oil Futures were lifted due to a stronger oilseeds rival market and a positive World Agricultural Supply and Demand Estimates Report (WASDE), oilseeds from the U.S Department of Agriculture. Dalian's palm oil contract, which is the most active contract in Dalian, increased by 1.19%. Chicago Board of Trade soyoil prices were up by 0.67%. As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils. By February 9, 2024/25 soybean imports from the European Union, which began in the summer, had reached 8.36 million tons, a 10% rise compared to the previous season. According to the European Commission, imports of palm oil reached 1,73 million metric tons in the first quarter, which is a decline of 21% from the same time last year. In its February outlook, China's Agriculture Ministry kept its forecasts largely unchanged for corn, soya beans and other crops in the crop year 2024/25. However, there was a small revision in soybean planted acres from 10,321 million to 10,325 million. The oil price fell after an industry report revealed an increase in U.S. stockpiles of crude and as tariff fears weighed on sentiment. The palm ringgit's currency traded unchanged in relation to the U.S. dollar. Technical analyst Wang Tao suggested that the price of palm oil could retrace to between 4,494 and 4,523 ringgit a ton based on its wave pattern.
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Australia's Evolution Mining reaches a four-year profit high after beating estimates
The shares of Australia's Evolution Mining rose to a record high Wednesday, after the company's profit for half a year exceeded market expectations. The stock reached its highest level in November 2020, when it rose by 2.4% to A$6.370. The benchmark ASX200 closed 0.6% higher. Evolution, owned by AustralianSuper (the country's largest retirement fund), reported a net profit that more than doubled from the previous year to A$385,000,000 ($242.3million) for the six-month period ended December 31, 2009. Citi analysts said that the miner's profits were 11% higher than their expectations, and 20% higher than Visible Alpha consensus estimations. Lawrie Conway said, "We've seen the benefits of the Foundations laid in FY24...with record-breaking financial results and significant Cash Flow Generation achieved in the First Half," Evolution's CEO. Morningstar analysts stated that higher gold and copper price and increased sales volumes by Evolution more than offset a modest increase in costs. The firm based in Sydney's EBITDA doubled from A$917 to A$985.3 for the same period, exceeding Jefferies' estimate. Evolution, which operates six mines in Australia and Canada, has said that it is on schedule to meet its production forecast for fiscal year 2025 of 710,000-780,000 gold ounces and 70,000-80,000 tons of copper. Morningstar analysts wrote in a report that they "continue to forecast" gold sales volume to rise to 840,000 ounces by fiscal 2029. This is due to increased production at Red Lake, Mungari and other mines.
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Russell: The term critical minerals is meaningless and needs a new strategy.
It is now so common to use the term critical mineral that its original meaning has been lost. It is time to create a new definition of what is truly vital for a nation and what is simply important. The Mining Indaba conference held in Cape Town last week also made it clear that what's important to one country may not be as critical to another. What is a better way to define a critical mineral than by its name? It's simply a mineral you don't possess and worry you will not be able get it in the future. You need a certain mineral, but don't possess any domestic reserves. Your strong allies don't also have enough deposits, and you do not have control over the supply chain. This is a different mineral from what commodity analysts CRU call a core ore, which you may need now but are confident you can source in the future. Why is it important to distinguish between the two? Westerners tend to view core minerals as ones that can be left to the market to supply. They rely on private mining firms to explore, develop, and produce them on commercial terms. A truly critical mineral will require a different acquisition strategy, including direct funding of new mines, strategic relationships with the host country, and offtake agreements not dependent on market prices. China has shown that it is much better at focusing on minerals they deem critical. It invests in mines, infrastructure and processing plants in other countries, and also in its own country. China is the largest importer of commodities in the world. It dominates the global supply chain of minerals essential to the energy transformation, including lithium, cobalt and nickel. These four minerals are no surprise to China, but are they still important for China, given that China dominates the production and supply of these minerals? Beijing's approach to ensuring supply was more strategic than commercial. Copper, aluminium and graphite are also included on the list of critical minerals for the United States as well as the European Union. Iron ore, gold potash, and uranium are among the critical minerals on China's list. One could argue that these minerals are critical to China's economy, and are also ones in which Beijing has little influence on the supply chain. Consider iron ore as an example. China imports over 80% of what it needs. Of those imports, more than 90% are from Australia, Brazil, and South Africa. Beijing has no control over these resources, despite its ownership of some companies that mine iron ore. It is a price taker and has been for the last two decades. NEW TACTICS NEEDED The United States and Europe could be asked why copper is included on their list of critical minerals, when there is no threat to the supply. This is because most of the copper mined in the world is controlled by Western firms, which are located in countries with a strong Western alignment. Aluminium and lithium are also important, but cobalt's importance for energy transition is still being questioned. Nickel is a fascinating case. Both the United States and European Union consider it critical but have not done anything to guarantee supply. They have instead allowed Chinese-controlled mining and processing plants to dominate the Indonesian market, while others in countries such as Australia, a strong ally of China's, are closed due to low prices. It would make sense to continue to supply nickel from allies, even if the cost was higher. If Western countries are truly concerned about the security of minerals like graphite and tungsten, they must change their approach to developing mines. Western mining companies have difficulty securing long-term financing because they cannot guarantee the price that will be paid in several years, when a new mine is built and operational. They lose out to Chinese firms that are less concerned about commercial results. Western governments must also become more proactive when it comes to engaging countries in resource-based relationships, utilizing both soft power like aid programmes and direct benefits like market access to foster stronger resource relationships. It appears, however, that U.S. president Donald Trump has adopted the exact opposite strategy, abandoning all aid and threatening to impose widespread tariffs against both allies and enemy alike. The European Union appears to be moving at a snail's pace. It produces policies and reports about critical minerals, but does not seem to do much to develop the supply chains that it controls. These are the views of the columnist, an author for.
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Norway to Offer New Acreage Only for Floating Wind
Norway will not offer acreage suitable for bottom-fixed offshore wind farm development when it next announces new tenders, and will instead focus on floating wind options, it said on Monday.The government had previously said it would offer new areas in its North Sea bordering Denmark suitable for turbines fixed to the seabed, that may also connect to other countries via so-called hybrid cables."We believe that it is not the time to proceed with planning hybrid cables now," Energy Minister Terje Aasland said in a statement, citing high cost levels and the lack of a European framework for hybrid connections.A study by grid operator Statnett had shown that building out the area known as Soervest F would require government support regardless of whether the wind farms connected to Norway only or also other markets, he added.Aasland also said he was sceptical of further exposing the Norwegian power system to the challenges in other markets such as Germany.Instead, the government will prioritise floating offshore wind projects with single-point connections to Norway, the minister said.Norway, whose domestic power generation is dominated by cheap, abundant hydropower has some of the lowest electricity prices in Europe, but also saw an increase in the wake of the European energy crisis in 2022.A net exporter of power through subsea cables linking it with Germany, Britain, Denmark and the Netherlands, these connections have been blamed for lifting prices domestically.Last year, the country tendered its first offshore wind farm, Soerlige Nordsjoe II, located in the area now being scrapped for immediate further development.(Reuters - Reporting by Nora Buli, editing by Terje Solsvik)
Aluminum tariffs eased by Trump
The price of aluminium fell on Wednesday, amid fears of a global trade war after U.S. president Donald Trump imposed 25% tariffs on imports of steel and aluminum.
As of 0219 GMT on Monday, the London Metal Exchange's (LME) three-month aluminium was down 0.6% at $2,627.5 per metric ton. This is down 1.3% compared to a high of $2.662.50, reached on Monday, when tariffs were announced.
Morgan Stanley estimates that the biggest impact will be felt on aluminum, which is used for transport, construction, and packaging. Net imports account for 82% of U.S. needs.
Since Trump's election, the U.S. premium on aluminium over the benchmark global price at the London Metal Exchange is up by 25%. The current rate of 35 cents a pound has risen by 60%.
After Trump announced tariffs against US imports, volatility in the aluminum market is expected remain high. ANZ Research stated that the U.S. aluminum industries are expected to struggle in the short-term to avoid tariffs, putting upward pressures on prices.
Trump has not yet imposed tariffs on the copper but he threatened duties last week, without providing any further details.
The LME copper benchmark rose by 0.2%, to $9373.5 per metric ton.
The expectation of a copper tarrif pushed the premium between U.S. Futures traded on Comex and the global benchmark at the London Metal Exchange up to a new record on Monday.
Lead increased by 0.3% at $1,985.5, while zinc fell 0.9% to $2,838, and tin rose by 0.1% to $30,200.
The aluminum contract at the Shanghai Futures Exchange fell by 0.5%, to 20,570 Yuan ($2,814.76) per ton. This is its highest level since early December.
SHFE copper fell 0.4% to 76950 yuan. Nickel lost 0.8% at 124450 yuan. Zinc was flat at 23715 yuan. Lead shed 0.2% at 17,105 yuan. Tin was unchanged at 257,000 yuan.
(source: Reuters)