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Alcoa's Q2 order book is strong despite tariffs and assessing Spain power risk
Alcoa, the aluminium producer, said that its order book was robust for the second quarter and it had not seen any drop in orders due to U.S. Tariffs. It also noted that Spain's power failure this week posed a risk to its business in Spain. Since his election, U.S. president Donald Trump has imposed an aluminum import tariff of 25% "without any exceptions or exclusions", in a bid for the U.S. to increase its production. Our first quarter order books were strong. The second quarter order books remain strong. We have not seen a drop in orders due to tariffs," CEO William Oplinger told a mining conference in Melbourne. When we talk to our customers about the future, they are uncertain. We don't really have a good idea of what the future holds. Alcoa, in its earnings call for the first quarter of last year, said that the tariffs imposed by the United States on aluminum imports from Canada will cost the company approximately $90 million during the second quarter. Oplinger stated that Alcoa supports Trump's vision for a competitive manufacturing climate in the U.S., and that the best way to accomplish this would be by ensuring Canadian aluminium reaches the United States. He added that the U.S. lacks bauxite, which is a raw material used to make aluminium and about 4 million tonnes of it each year. Alcoa has no immediate plans to build smelters within the U.S., which can take up to 5-7 years. He said it would cost $35 billion to build seven new U.S. aluminum smelters. Alcoa is the biggest aluminium producer in America, with a market worth of $6.5 billion. The primary aluminum industry is not going to be able to meet the demand for manufacturing in the near future. Oplinger stated that the power outage in Spain and Portugal, which is still not fully understood, has increased the risk for Alcoa’s San Ciprian aluminum complex. He said, "At the moment, we do not know what happened with the energy in Spain. I think we should take a few days to assess the risks of further power losses." "It is difficult to run an electro-intensive company in a location that cannot guarantee the power will be on if the grid does not understand what happened." Alcoa has begun a review of the damage to the plant. Oplinger stated that the facility's plant was restarting its smelter, which is 8-10% completed. The plant's production was curtailed due to high electricity prices in 2021. It is currently in the process of restarting with a full ramp up expected by October. (Reporting from Melanie Burton in Melbourne, and Renju José in Sydney; editing by Edwina Gibbs).
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Rio Tinto reports that 19.35% of its shareholders voted in favor of dual listing review
Rio Tinto announced on Thursday that 19,35% of shareholders voted in favor of a review of their dual-listed company structure. According to UK regulations, the company would have been required to consult with more shareholders if a vote was cast of more than 20%. Palliser Capital, an activist investor, has been campaigning for Rio Tinto to merge the London-listed and Sydney-listed companies into one holding company in Australia. Palliser claims that removing the current structure would unlock value of $28 billion for Rio Tinto London shareholders. The AGM in London on April 3 was a vote by British shareholders of the world's biggest iron ore mining company. About 77% of Rio Tinto investors are listed in London, but Australian-listed shares trade at a 25% premium, largely due to the tax benefits available to Australian shareholders. Rio Tinto’s board unanimously recommended that the company vote against the resolution. They cited tax concerns and said a unified list is not necessary to give it strategic flexibility. Palliser’s motion received the support of influential proxy advisory firms Institutional Shareholder Services and Glass Lewis, as well as more than 100 shareholders, including Norway’s sovereign wealth fund Norges Bank Investment Management. BHP, the rival company, ended a dual-listed structure similar to that of BHP in 2022. It now has an Australian primary listing six years after activist Elliott started its campaign for one listing.
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Wall Street Journal, May 1,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. Tesla board members reached out to executive search firms about a week ago in order to find a successor to CEO Elon Musk. A federal judge has ruled that Apple violated willfully an antitrust injunction regarding App Store restrictions. The case was referred to federal prosecutors who are now conducting a criminal contempt investigation. The Trump Administration is allocating $500,000,000 to a project that will be led by two scientists who were recently promoted to high-ranking positions at the National Institutes of Health. This move away from Covid-19 next-generation vaccines. Sundar Pichai, Google CEO, urged U.S. district judge Amit Mehta on Wednesday to reject "extraordinary proposals" from the Justice Department, such as forcing the sale Chrome and sharing search data between rivals to curb Google's dominance in online search. The Trump administration has finalized an agreement with Ukraine that grants the U.S. access its mineral resources. It resolved last-minute disagreements to achieve an agreement aimed to offset U.S. defense support for Ukraine against Russia. House Republicans are considering plans to increase restrictions on tax deductions that apply to the highest-paid worker's compensation of companies. The proposals could be included in a tax and spending bill worth billions.
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Sources say that India's JSW Steel has difficulties importing coal from Mongolia.
Three sources with knowledge of the situation said that JSW Steel, India’s largest steelmaker in terms of capacity, had hit a roadblock when sourcing coal from Mongolia because suppliers were unresponsive and there was a bottleneck on transport. The company had planned to import 2,500 tons of steel from Mongolia while the Steel Authority of India hoped to import 75,000 tons. India, which is the second largest producer of crude iron and steel in the world, imports 85% of coking coal, with Australia providing more than half. The country's steel demand has soared due to rapid economic growth and increased infrastructure spending. India is exploring partnership opportunities with Mongolia to diversify the supply chain of coking coal, a key ingredient in steelmaking. Industry officials identified Mongolia as a source for high-grade coal at lower prices. One source, who declined to be named due to the sensitive nature the discussions, said: "There has been no response from Mongolian side and we find it difficult." The source stated that "on the one hand, the transport from Russia has become backed up and on the opposite, it might not be possible to get the product from China in a sustainable manner." Sandeep Poundrik, the Steel Secretary, said that sourcing materials from Mongolia was difficult due to its landlocked status. JSW Steel and the Mongolian Prime Minister's Office did not reply to requests for comment. Since the clash of troops in 2020 along their Himalayan borders, where at least 20 Indian and four Chinese soldiers were killed, relations between India and China have deteriorated. There have been signs of thawing, with neighbours agreeing to resolve their trade and economic disputes in January. Source: JSW Steel does not plan to increase its imports of coking coal from Russia. They said, "We do not want to increase our exposure in a single geography." The company sources its coking coal also from Australia, United States of America and Mozambique. Last week, Chief Executive Jayant Acharya said that JSW Steel would consider buying assets of coking coal based on their commercial and strategic viability. The steel secretary stated last week that India's imports of coking coal will increase due to the limited supply of this key ingredient in steelmaking, as the country ramps up its steel production capacity. (Reporting and editing by Saad Saeed; Neha Arora)
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Oil prices steady after US economic contraction and possible Saudi supply increase
The oil prices stabilized on Thursday, a day following a sharp decline caused by the signs that Saudi Arabia may increase its output, and data showing the contraction of the U.S. economy, the largest oil consumer in the world. Brent crude futures dropped 6 cents or 0.1% to $61 per barrel at 0730 GMT. U.S. West Texas Intermediate Crude Futures fell 12 Cents, or 0.2% to $58.09. WTI reached its lowest level since March 2021. Sugandha Sasdeva, founder and CEO of SS WealthStreet in New Delhi, said that the "path of least resistance" remains to the downside. Sachdeva stated that "the dual impact of deteriorating oil demand and looming expansion in supply has created a negative outlook for crude. Brent crude appears vulnerable to testing $55 per barrel." Sources say that Saudi Arabia has told allies and experts in the industry that it does not want to support the oil market by cutting supply and is able to manage a long period of low prices. Three people familiar with OPEC+ discussions have reported that several OPEC+ countries will propose the group increase output in June by a significant amount for a second month running. Eight OPEC+ nations will meet on 5 May to decide a plan for June's output. Sachdeva stated that "any surprise in the speed or scale of adjustments to production could have a significant impact on volatility in sessions ahead." The U.S. economic contraction contracted for the 1st time in 3 years during the first quarter. Businesses rushed to import goods in order to avoid tariffs, which would have increased costs. This underscored the chaotic nature of President Donald Trump’s trade policy. A poll suggests that Trump's tariffs make it likely the global economy will enter recession this year. An oil price drop is expected this year due to a demand outlook that's clouded by trade conflicts and OPEC+ increasing supply. This was revealed in a Wednesday poll. Kpler, an analytics firm, has revised their 2025 global oil consumption growth forecast from 800,000 barrels per day to 640,000 bpd. They cited rising Sino-U.S. tensions and weak Indian demand. In April, 40 economists and analyst predicted that Brent crude would average $68.98 per barrel in 2025 compared to the estimate of $72.94 in March. The analysts expect U.S. oil to average $65.08 per barrel, rather than the $69.16 last month. The Energy Information Administration reported on Wednesday that U.S. crude stockpiles dropped by 2.7 millions barrels due to higher demand for exports and refineries. This was compared to analysts' expectations, which were based on a poll. They expected a 429,000-barrel increase. Reporting by Mohi Narayan from New Delhi, and Arathy Sommesekhar from Houston; editing by Shri Navaratnam & Christopher Cushing
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What is the status of Ukraine's essential minerals?
Ukraine and the United States signed a deal on Wednesday that was heavily promoted by U.S. president Donald Trump. The agreement will grant the United States access to new Ukrainian mineral deals and funding for investment in Ukraine's rebuilding. Here is a list of critical minerals in Ukraine, including rare Earths and other natural resources: What are rare earths and what do they serve for? Rare earths is a grouping of 17 metals, used in the production of magnets for electric cars, cell phones and missile systems. There is no substitute. The U.S. Geological Survey considers rare earths, such as nickel and lithium, to be crucial. Minerals are vital for industries like defence, high-tech appliances and aerospace, as well as green energy. What mineral resources does Ukraine have? According to Ukrainian data, Ukraine has 22 of the 34 critical minerals that the European Union identified. These include ferro-alloy, industrial and construction materials as well as precious and nonferrous metals and rare earth elements. According to the Institute of Geology of Ukraine, the country has rare earths like lanthanum, cerium and neodymium. These are used for wind turbines, electric vehicles and batteries. Erbium and yttrium can be used to produce lasers, nuclear power and other applications. EU-funded research indicates that Ukraine also has scandium deposits. The data is not classified. World Economic Forum said that Ukraine is a major potential supplier of lithium as well as beryllium and other metals such as gallium, zirconium. State Geological Service of Ukraine said that Ukraine has one Europe's largest lithium reserves estimated at 500,000 tons - essential for batteries, ceramics and glass. Titanium reserves are located mainly in the northwestern and central parts of the country, whereas lithium deposits are found in the east, centre and southeast. The graphite reserves in Ukraine, which are used to make electric vehicles batteries and nuclear power reactors, account for 20% of the global resource. Deposits are located in the west and centre. Ukraine has also significant coal reserves. However, most of them are under Russian control in the occupied territories. According to mining analysts and economists, Ukraine does not currently have any rare earth mines that are commercially active. China is the largest producer in the world of rare earths, as well as many other essential minerals. WHAT DO WE KNOW OF THE DEAL After months of often fraught negotiations and uncertainty, the two countries signed an accord in Washington. The agreement establishes a fund of joint investments for Ukraine's rebuilding as Trump attempts to achieve a peaceful settlement in the three-year old war between Russia and Ukraine. In a photo published on X, U.S. Treasury Sec. Scott Bessent was shown with Ukrainian First Deputy Premier Yulia Shvyrydenko signing the agreement. The Treasury said that the deal "clearly signaled the Trump Administration's dedication to a sovereign, free and prosperous Ukraine." Svyrydenko stated on X, that Washington will contribute to the fund. She said that the accord also provides new assistance such as air defense systems for Ukraine. The U.S. didn't directly respond to that suggestion. Svyrydenko stated that the agreement allowed Ukraine to "determine where and what to extract" as well as that Ukraine's subsoil remained its property. Svyrydenko stated that Ukraine does not have any debt obligations towards the United States as a result of the agreement. This was a crucial point in the long negotiations between the countries. She said that the agreement was also in line with Ukraine's Constitution and its campaign to join Europe. The draft failed to provide any concrete U.S. guarantees of security for Ukraine as one of its original goals. Which Ukrainian resources are under Kyiv's control? The war in Ukraine has left a lot of damage, and Russia controls about a fifth. The majority of Ukraine's coal reserves, which powered the steel industry in Ukraine before the war, is concentrated to the east. According to We Build Ukraine, and the National Institute of Strategic Studies in Ukraine, data from the first half of the year 2024 shows that about 40% of Ukraine's metallic resources are under Russian occupation. The think-tanks did not provide a detailed breakdown. Since then, Russian troops continue to make steady progress in eastern Donetsk. In January, Ukraine shut down its sole coking coal mine near the city of Pokrovsk that Moscow is trying to seize. Russia has taken over at least two Ukrainian deposits of lithium during the war. One in Donetsk, and the other in Zaporizhzhia in the southeast. Kyiv controls the lithium deposits of central Kyrovohrad. What opportunities does Ukraine offer? Oleksiy Solovev, the first deputy minister of economy, stated in January that the Government was negotiating with Western allies, including the United States and Britain, France, and Italy, on projects related the exploitation of critical materials. The government estimates that the total investment potential in this sector will be around $12-15 billion between 2033 and 2033. The State Geological Service stated that the government is preparing 100 sites for joint licensing and development but did not provide any further details. Investors have highlighted a number barriers to investment, despite the fact that Ukraine has an extremely qualified and inexpensive workforce and developed infrastructure. These include complex and inefficient regulatory processes, as well as difficulties obtaining geological data or land plots. They said that such projects would require years of development and a large upfront investment. Reporting by Olena Hartmash, Editing by Kirsty Donovan and Neil Fullick
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IMF lowers its 2025 Middle East and North Africa growth forecast by 2.6% due to global risks
The International Monetary Fund announced on Thursday that it expects the Middle East and North Africa economy to grow only 2.6% by 2025, as uncertainty stemming a trade war in the world and lower oil prices are weighing on this region. The new projection was a significant downgrade from the October projection, which predicted 4% growth. This comes at a time when the region is grappling with geopolitical tensions and a softer external market. In an interview, Jihad Azour said, "Uncertainty can impact real economy, consumption and investment... All these elements have led to a softerening of projections." The direct impact of tariffs is limited due to the limited integration of trade between the U.S. and the region. In its latest Regional Economic Outlook released in Dubai, the IMF pointed out a gradual improvement in oil production as well as protracted regional conflict and delayed structural reforms in Egypt. The report stated that "the ongoing conflicts in MENA have left profound economic scars and deep humanitarian costs," adding that it has had a severe impact on the region's oil-importing economies. In 2025, the MENA non oil importers will see a real GDP increase of 3.4%, compared to an earlier forecast that predicted 3.6%. DIVERGING OUTLOOKS The growth of non-Gulf Cooperation Council (non-GCC) oil exporters will slow down by one percentage point - a sharply downward revision – before staging a modest rebound in 2026. The GCC economy is projected to grow, but at a slower rate than in October. This is due to the extended OPEC+ production cuts that will continue through April. There will also be a gradual phase out by 2026 and a weaker non-oil sector. Azour stated that "with all these changes and obstacles, it is important to also seek new trade partners," referring to GCC. The GCC comprises Bahrain, Kuwait Oman, Qatar Saudi Arabia, and United Arab Emirates. IMF predicts GCC GDP growth of 3.2% for 2025, down from the 4.2% it predicted in October. GCC countries are stepping up their efforts to diversify economies. Initiatives like Saudi Arabia’s Vision 2030, and the UAE’s push in tourism, logistics, and manufacturing aim to reduce reliance on hydrocarbons. Azour stated that "trade diversification, structural reforms accelerated, and productivity improvement are all elements which will help non-oil sectors to maintain a high level of growth." (Reporting by Manya Saini in Dubai Editing by Shri Navaratnam)
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Sumitomo Corp eyes record profit, creates loss buffer against US tariffs
Sumitomo Corp, a Japanese trading company, forecasted a record-breaking net profit of $4 billion for the current fiscal period and set aside financial buffers to protect against any negative effects of U.S. Tariffs. Sumitomo reported a net profit of 562 billion yen for the fiscal year ending in March. This was up 45.4% compared to a year ago and beat analysts' expectations, which were 554.2 billion. The strong performance in non-mineral resource segments, including real estate, is credited with this. Berkshire Hathaway, Warren Buffett’s company, is a major minority shareholder of Sumitomo, as well as other Japanese trading companies, such Mitsui. It has been increasing its ownership in recent years. The company has set aside a buffer of 40 billion Japanese yen for losses, saying that although the direct impact from U.S. Tariffs will be limited, there may still be an indirect impact. Sumitomo will increase its annual dividend from 130 yen to 140 yen in the fiscal year that ends next March. It also plans to buy up to 2,9% of its 80 billion yen worth shares. It expects to increase nickel production at its Ambatovy Nickel project in Madagascar from less than 30,000 tons last year as several issues are resolved, including the pipeline.
Rio Tinto has failed to fulfill core commitment five years after Juukan, Aboriginal groups says
Rio Tinto failed to modernise its agreement with the Aboriginal group on whose land it mines iron ore. The group claimed that Rio Tinto had not fulfilled a five-year-old commitment when it destroyed a significant Aboriginal heritage site.
Rio Tinto has pledged to reform their business practices following the destruction of 46,000 year old rock shelters at Juukan Gorge in Western Australia for an iron ore mining in 2020. The destruction led to a public outcry and investor anger, a government investigation and the eventual departure of its CEO and Chair.
Deanna McGowan, of the Robe River Kuruma Aboriginal Corporation, said that at Rio Tinto’s annual general meeting held in Perth, the Mesa J Mine, the largest mine on the group’s land, has been operational for 30 years.
She said, "You've paid us for three-years." Rio Tinto executives said that when they negotiated with the elders of the group twenty years ago there was no reason to include the mine as it would close soon, she explained.
She said, "And now we are at... 17 years that Rio has defrauded us at Mesa J."
The Robe River Kuruma group does not include Juukan Gorge, but is located in the same Pilbara area.
Dominic Barton, the Rio Tinto chairperson, said that the company is committed to finding a solution for the issues raised McGowan.
"We are committed to working with you to reach an agreement and resolution. Barton stated that they have had several conversations, and will continue to do so after the meeting. "There is a strong commitment from us to work with you on these issues," he said.
Barton had said earlier in the AGM that the mining giant has relationships with over 60 Indigenous groups and land-related groups around the world.
He said that "many of these relationships are positive, but a few remain challenging."
After the Juukan Gorge disaster, inquiries revealed that agreements made between mining companies and Aboriginal groups prevented them from publicly speaking about the damage they had done to their heritage. They also underpaid them for mining on their land.
Rio Tinto, along with other major mining companies such as BHP or Fortescue, have pledged to update land-use agreements they had signed with traditional groups.
Rio Tinto's production schedule could be disrupted if it fails to reach these agreements.
In its quarterly report, the miner warns that it is "subject to approvals of planned mining areas and clearance of heritage".
(source: Reuters)