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Fitch gives a negative rating to India's Adani Energy due to US probe risk
Fitch Ratings assigned a negative outlook for the Indian energy infrastructure firm Adani Energy Solutions Limited. The rating agency cited concerns about corporate governance as well as potential risks due to ongoing U.S. investigation. The group called the charges "baseless" and said that they were taken months after U.S. officials accused billionaire Gautam Adani, and top Adani Group executives, of paying $265,000,000 in bribes to win Indian power contracts. They also accused them of misleading U.S. Investors during fundraising. Fitch stated on Sunday that the negative findings of the U.S. investigation could lead to a weakening of governance standards, and a possible downgrading of the rating for the company in the short-to-medium term. The rating agency warned that it could reduce the rating if investigations result in regulatory penalties, restrictions or a loss of confidence on the market. Fitch removed the firm from its "rating watch negatively" list. It said that risks related to its funding and liquidity had moderated. Fitch also affirmed their rating of Long-Term Issuer Default Rates in Foreign and Local Currency at 'BBB+'. Fitch stated that while Adani Energy is an independent company, the governance issues at Adani Group could still affect its access to capital markets and liquidity.
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Iron ore prices fall on fears about demand outlook
Iron ore futures prices fell on Monday, as concerns over U.S. Tariffs and China's promise to reduce crude steel production this year clouded the demand outlook. The May contract for iron ore on China's Dalian Commodity Exchange has erased gains and ended daytime trading 0.71% lower, at 769 Yuan ($105.92). As of 0735 GMT, the benchmark April iron ore traded on the Singapore Exchange had fallen below the psychologically important level of $100 per ton to $99.8. Investors, who hoped to see more support measures from Beijing after the latest disappointing inflation figures, calmed down and pared back their gains. China's consumer prices index fell in February at the fastest pace in 13 month, while producer prices continued to deflate. This has raised hopes that China will continue its stimulus program in order to reach its annual economic target for this year. The upcoming 25% tariffs for all steel imported to the U.S. have clouded the demand outlook and dampened sentiment. Iron ore prices are also under pressure due to the growing fear that Beijing may announce specific measures within the next few weeks, after promising to cut its crude steel production this year in order to combat the overcapacity plagued the industry. Iron ore consumption will decrease if steel production is reduced. Coking coal and coke, which are used to make steel, also fell in price, by 1.35% each and 1.97% respectively. The Shanghai Futures Exchange has seen a decline in most steel benchmarks. The rebar fell 1.35%; hot-rolled coil dropped 0.89%; wire rod was down 1.41%, while stainless steel gained 0.45%. ($1 = 7,2605 Chinese Yuan) (Reporting and editing by Sherry Jackson, Lewis Jackson and Amy Lv)
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Indonesia increases royalties for mining companies
The Indonesian mining ministry has said that it is looking at increasing the royalties mine companies pay for commodities such as nickel, copper, and coal. The proposal was made as Indonesia's newly formed government plans to make major budget changes, including the introduction of a free lunch program for schoolchildren. According to a YouTube video of a Saturday public consultation about the proposed changes, the ministry's Tri Winarno stated that the goal is to improve the governance of the industry. Indonesia is rich in natural resources. Mining is one of the major sources of income. The world's largest exporter of nickel and thermal coal products, Indonesia is also a major supplier of tin and cadmium for the global market. Officials at the public consultation proposed that royalty rates be raised by producers and miners of metal products, based on prices. They also suggested introducing progressive rates, such as nickel and copper. According to the public consultation document of the Ministry, the government proposes a nickel ore royalty rate ranging from 14% to 19%, depending on the benchmark price level, as opposed the the 10% flat rate currently charged. This document also contains proposals for nickel matte and Ferronickel at progressive rates. The government will raise coal royalty rates up to 13.5% if the benchmark price is at least $90 a metric tonne. The government charges progressive royalties for coal. The lowest rate is 8% when the price of a ton of coal is at least $90. The proposal proposed increasing the royalty rate on copper ore from 5% to 10%-17%. It also included increases for copper cathode and concentrate. The proposal included increases in royalties for tin as well as gold, platinum, and silver. (Reporting and editing by Jacqueline Wong, Aidan Lewis and Bernadette Christina Suroyo)
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JX Advanced Metals raises $ 2,97 billion by setting IPO price at the upper end of its marketed range
JX Advanced Metals (a unit wholly owned by Japan's Eneos Holdings) raised $438.6 billion through its initial public offering, after the shares were priced above their market range. The company valued its initial public offering (IPO) at 761.3 billion Japanese yen, or 820 yen each share. The Tokyo Stock Exchange will debut the shares on March 19. According to LSEG data, the offering is larger than Tokyo Metro's IPO from October and is Japan's largest listing since SoftBank's Telecoms Unit in 2018. JX Advanced Metals, a leader in the manufacture of sputtering target materials that are used to produce thin metal films for chip production. After suffering massive impairment losses due to its investment in and operation of Chile's Caserones copper mining, the metal company has changed its focus, from mining and smelting, to supplying advanced material, with a particular emphasis on semiconductor parts. It will continue to mine and smelt to ensure the availability of essential metals such as tantalum that are needed for advanced materials. Eneos Japan, the largest oil refinery company in Japan, intends to use the proceeds to increase shareholder returns and for growth investments.
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Palliser calls on Rio Tinto for unification of dual listed structure
Palliser Capital, a London-based hedge-fund, sent a letter to Rio Tinto's chairman on Monday. The letter urged Rio Tinto to take further steps towards unifying the dual-listed structure after an appraisal report. The letter highlighted findings from an appraisal report that concluded "the advantages of unification far outweigh" the disadvantages for the company and shareholders. Rio Tinto operates under a dual-listed company structure. It has separate shareholders in Australia (Limited) and the UK (Public Limited Company). The company must therefore hold two general meetings each year: one in London, on April 3, and one in Perth, on May 1. Shareholders will vote at these meetings on a resolution that was proposed by Palliser and over 100 shareholders. The resolution calls for a review of current structure which has been described by the fund as "value-destructive" and inefficient. The current listing of the company consists approximately 371.2 millions shares on Australia Stock Exchange, and 1.25 billion on London Stock Exchange. The move is similar to that of BHP Group, which under pressure from activists, ended its dual listing structure in 2022. It now lists primarily in Australia. Rio Tinto's future listing structure will depend on the votes that are cast at the annual general meeting.
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Indian slums receive 'cool roofs" to combat extreme heat
Over the past two months, hundreds of roofs have been coated with a white reflective coating in informal settlements in western Gujarat. This is to keep the inhabitants cool as the hot season approaches. This effort involves 400 Ahmedabad households as part of a scientific study to determine how indoor heat affects people's health, and their economic outcome in developing countries. Aditi Bunker is an epidemiologist from the University of Heidelberg, Switzerland, who leads the project. The Wellcome Trust, based in the UK, is funding the project. The thing that should have protected them actually increases their exposure to heat. Ahmedabad, which has experienced temperatures exceeding 46 C (115 F), in recent years, has been affected by climate change. Residents who are involved in the project such as Nehal Bhil have noticed an improvement. The slum has over 2,000 homes, the majority of which are one-room, airless dwellings. "My fridge doesn't heat any more, and my house feels cooler." My electricity bill has gone down and I'm sleeping better," said Bhil after his roof was painted. According to a study published in 2022 in the journal Environmental Research Letters, the likelihood of heatwaves occurring around the globe has increased by nearly threefold. Bunker's team can prevent the sun's rays from being absorbed by painting the roofs white with highly reflective pigments like titanium dioxide. Bunker stated that "in many of these homes with low socioeconomic status, there is nothing to stop heat transfer from coming down. There's no barrier insulation on the roof." Arti Chunara, who was to join Bunker's experimental group, said that she would cover the roof of her house with plastic sheets before joining Bunker. She and her family would sit outside most days of the day. They would only go inside for a couple of hours if the heat was too much. Scientists will collect data on health and indoor environments from both residents who live under a cool roofing system and those who don't. The study also includes Burkina Faso and Mexico, as well as the island of Niue, in the South Pacific. These sites cover a wide range of climates and building materials. Bunker stated that early results of the Burkina Faso study show that cool roofing reduced indoor temperatures by 1.2 C for tin and mud roofed homes and 1.7 C for tin roofed homes over a period of two years. This, in turn, lowered heart rates in residents. Reporting by Gloria Dickie, Amit Dave, and Shilpa jamkhandikar, in Mumbai, with editing by Barbara Lewis.
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Oil prices fall as investors remain on edge due to tariff uncertainty
Oil prices dropped on Monday, as investors' appetite for riskier assets was tempered by concerns about the impact of U.S. tariffs on global growth and fuel consumption, as well as the rising production from OPEC+ producers. Brent crude dropped 31 cents or 0.4% to $70.05 per barrel at 0445 GMT, after closing up 90 cents Friday. U.S. West Texas Intermediate Crude was $66.69 per barrel, down by 35 cents or 0.5% after closing the previous session 68 cents higher. WTI fell for the seventh consecutive week, which is the longest losing streak in 2023. Brent also dropped for a third week running after U.S. president Donald Trump delayed and then imposed tariffs on key oil suppliers Canada, Mexico, and raised taxes on Chinese products. China responded by imposing tariffs on agricultural goods against the U.S., Canada and other countries. In a recent note, ING analysts stated that "tariff uncertainty is a major driver of the weakness", adding that Saudi Arabia's oil price cuts and China's deflationary signal also hurt sentiment. IG analyst Tony Sycamore stated that other factors affecting oil prices are concerns over U.S. economic growth, a potential lifting of U.S. Sanctions on Russia and OPEC+'s decision to increase production. In a client letter, he stated that despite the fact that the WTI price has recovered to $72, the weekly support will remain at $65/$62. The oil prices recovered some of their losses on Friday, after Trump announced that the U.S. will increase sanctions against Russia if it fails to reach an agreement with Ukraine. Two people with knowledge of the situation said that the U.S. was also looking at ways to ease sanctions against Russia's energy industry if Russia agreed to end its conflict with Ukraine. OPEC+ (Organisation of Petroleum Exporting Countries, including Russia) has announced that it will increase oil production starting in April. Alexander Novak, the Russian Deputy Premier, said on Friday that OPEC+ might reverse its decision if the market is imbalanced. Saudi Arabia, which has been a major supplier of crude oil to Asia since March 2010, cut the price for the first three months. Trump stated last week that he was willing to negotiate a nuclear deal with OPEC-member Iran in order to stop the latter from acquiring such weapons, despite Iran's claim to not be interested. A spokesperson for the State Department said that Trump is conducting a campaign of "maximum press" against Iran, under which on Saturday the U.S. revoked a waiver allowing Iraq to pay Iran electricity. Ayatollah Khamenei, Iran's supreme leader, said on Saturday that his country would not be pushed into negotiations. Florence Tan, Christopher Cushing, Michael Perry and Florence Tan are reporting; Christopher Cushing is editing.
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BRICS' climate leadership aims hang on healing deep divides
The BRICS' ambitions to play a more prominent role in climate change, following the success of the United Nations' nature talks last month, will depend on how well the countries can overcome their fractious political differences and deep-seated disagreements about money. Brazil, Russia India China and South Africa – collectively known as BRICS – are well placed to influence the outcome of high-profile conferences this year. A dozen sources said that they established their credentials when they proposed a draft document which ensured agreement during the COP16 discussions in Rome in February. This could have unlocked billions of dollars for the protection of ecosystems. Narend Singh said that the BRICS will now influence discussions on other platforms. South Africa has a newfound profile this year as the G20 president, and another BRICS country, Brazil is preparing to host COP30 Climate talks in November. Maria Angelica Ikeda said that the BRICS countries can fill a gap in multilateral negotiations at this time. Susana Muhamad from Colombia, who is the president of the COP16 Nature Talks, stated that the BRICS countries are positioning themselves to be "bridge-builders". She said, "They're trying to create an balance to represent the Global South before the far-right governments emerging in the U.S.A., Italy and Argentina." "I know there are a lot countries that want to join BRICS because, if they have to face something like the U.S. then, at least, they're not alone." Unnamed British officials present at the meeting said that other countries should consider the impact of the BRICS's more aggressive approach on global institutions. DISPARATE GROUP If BRICS is to fill the vacuum created by President Donald Trump in the United States, then it must address its internal divisions on politics and finance. Timo Leiter, distinguished policy fellow at London School of Economics and a former UN official, warned that the group's refusal of taking on the financial obligations of donors could be a major obstacle. The BRICS countries with middle incomes have so far refused to share their financial liabilities, despite the demands of cash-strapped, developed nations. This has complicated the search for compromise in the U.N. climate negotiations and upcoming discussions on development financing in Seville, Spain. Data from the OECD revealed that nearly three quarters of the 25.8 billion dollars in funding for biodiversity in 2022 came from five different sources: European Union institutions (EU), France, Germany, Japan, and the United States. The BRICS may be divided by divergent national interests. For example, Russia wants to keep its fossil fuel sales, while Brazil is pushing countries to accelerate their decarbonisation at COP30. Li Shuo is the director of China Climate at Asia Society. He said that "they (the BRICS countries) are dramatically different in terms development stage and emission trajectory." The geopolitical ambitions of both countries are what binds them together, and this leads to the question: Can they agree on a positive agenda? Analysts said that a test of the group’s solidarity would be at a June meeting in Bonn, where countries will begin to present their COP30 negotiating position. The Financing for Development Conference in Seville, Spain in June will also be pivotal. Ministers are expected to discuss global sustainability and the ongoing reform of international financial systems. Leiter stated that "this will be a perfect entry point for BRICS in order to further their goal of changing the world order and having a greater say in the international financial system," he said. The new U.S. role is a kind of gift. In the short-term, it is likely that the BRICS will renew their demands for a greater say in the Global Environment Facility. The GEF distributes a large portion of biodiversity financing around the world. GEF reform has become a priority as richer nations cut their development budgets while demanding that nature-rich countries protect ecosystems like the Amazon. Ikeda, a Brazilian, said: "It is a serious problem that countries are updating their nuclear weapons or purchasing more armaments, instead of directing more money to nature and biodiversity." "At the Same Time, They Demand More and More Obligations from Us, The Mega-Diverse Countries."
London copper prices ease on US tariff worries, but dollar caps fall
London copper prices fell on Monday, despite some dollar weakness. This was due to uncertainty over U.S. trade policies.
The price of three-month copper at the London Metal Exchange slipped 0.3%, to $9.588 per metric ton as of 0223 GMT.
The Shanghai Futures Exchange's most active copper contract fell 0.5%, to 78290 yuan (10,797.73 dollars) per ton.
In a Fox News Sunday interview, U.S. president Donald Trump declined to say whether the U.S. might face a recession due to stock market worries about his tariffs on Mexico Canada and China for fentanyl.
Trump's trade policies have sparked fears of a trade war that could slow economic growth and increase prices for Americans who are still suffering from high inflation.
ANZ Research stated that "dramatic shifts in U.S. foreign and trade policy will likely cause further disruptions to metal markets."
"President Trump imposed a 25% tariff against imports of U.S. steel and aluminium. Copper is also likely to be taxed. In the short term, premiums will rise as the U.S. tries to adjust to dislocations in the physical markets."
The dollar started the day low after significant losses due to a possible weakening of the U.S. labor market. Meanwhile, investors fled to safe havens because they were worried about a trade war, which led them to the yen, and Swiss franc.
The greenback is less expensive to buyers of other currencies.
Other metals include LME aluminium, which fell by 0.5%, to $2.692.5 per ton. Zinc also declined, falling 0.5%, to $2.873.5, and nickel, which fell 0.6%, to $16,405. Lead rose 0.2% to 2,023 while tin fell 0.5% to $32,455.
SHFE aluminium fell 0.2%, to 20,845 Yuan per ton. Zinc dropped 0.9% to 23 845 Yuan. Lead slid by 0.3% to 17 430 Yuan. Nickel rose 1.3% to 131.970 yuan, and tin grew 0.08% to 262150 yuan. $1 = 7.2506 Chinese Yuan (Reporting and editing by Sumana Niandy).
(source: Reuters)