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Italy warns EU that it could pull out of SAFE Defence Scheme without budget flexibility on energy
Italy may not be able to access the SAFE financing scheme of the European Union for defence if budget rules on energy spending aren't more lenient, said?Prime Minster Giorgia Meloni in a letter sent to EU Commission president Ursula von der Leyen. The Security Action for Europe instrument (SAFE), backed by EU budget, is a joint loan scheme that helps member states reach more ambitious NATO expenditure targets. Meloni escalated her diplomatic efforts with the EU by urging the Commission to give member states the same amount of budget flexibility to reduce the soaring energy costs that is currently permitted for defence expenditures. Meloni, in a letter sent late Sunday to the. It would be very difficult for the Italian government to justify the SAFE program to the public without this political consistency. The "escape clause" allows the European Union to allow countries to exceed their deficit limits, either to increase defence spending or to address advers economic conditions. The budget flexibility for defence spending would last four years, starting in 2025. However, any increase in deficits through 2028 must not be more than 1.5% of the national output each year. If the clause was extended to include energy expenditure, Italy could potentially fund aid measures worth over 30 billion euros (34.90 billion dollars) for firms and families. Rome would have to 'drop its current plans' in order to reduce its budget deficit under the EU ceiling of 3% GDP this year. According to the EU, energy crisis does not justify deviations from budget rules. Last month, Italy warned that it might not be able honour its commitments for boosting defence spending because of the need to combat surging energy costs. Meloni wrote von der Leyen: "We can't justify to our citizens the fact that the EU allows financial flexibility to secure and defend the country in the strictest of terms, but does not protect workers, families and businesses against a new energy crises that could deal a serious blow to the economy."
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Oil prices rise and global stocks fall as bonds falter
The global share market fell on Monday, as new drone attacks in the Gulf pushed oil prices and bonds yields higher. This stoked inflation concerns in a week where the tech bull will be tested with?earnings by Nvidia. The United Arab Emirates reported that a drone attack caused a fire at a nuclear plant. Saudi Arabia also reported intercepting three drones. The Strait of Hormuz, which is vital to the oil and gas industry in the world, remains closed for all but a small amount of shipping. This is because Tehran wants to formalise control of this waterway. George Lagarias is the chief economist of Forvis Mazars. He said, "Markets are currently panicking because they are pricing in the possibility of the Strait of Hormuz remaining closed." Brent crude was up about 1% to $110.50 per barrel. U.S. crude rose 1.2% to $106.72 per barrel. Importantly, September futures rose?above 100 and December reached a contract high. Markets were bracing for prolonged shortages. The G7 finance ministers will meet in Paris to discuss the Strait of Hormuz, and the critical raw materials supplies. Concerns that energy prices will continue to rise and drive inflation hit the global bond markets again on Monday. The yield on U.S. 10 year notes reached a 15-month high of 4.631% after soaring 23 basis points in the past week. The yield on 30-year bonds has reached 5.159%, after a jump of 18 basis points in the last week. The yield on Japan's 10-year bond reached a level not seen since 1996, as the government announced plans to issue new debt in order to "fund" a planned budget increase to help cushion the economic impact of the Iran War. Germany's 10-year yield has reached a level that it has not seen for 15 years. Lagarias of Forvis Mazars stated that "as long as it is not a credit-related event and we do not have any evidence to call it a credit-related event, I'd be surprised if this causes a large rout also in the equity market." It can be an opportunity for some investors who want to withdraw money from the market, but I would be surprised if there was a real correction as a result of the bond volatility. STOCKS SKID The major European markets, Frankfurt, Paris, and London, all fell between 0.5% and 1.1%. Nikkei, the Japanese stock market, fell 1% overnight, after falling 2% from its record highs last week. South Korean stocks increased 0.3% as Samsung Electronics gained nearly 4% following a partial court injunction against a strike. MSCI's broadest Asia-Pacific share index outside Japan fell 0.7%. Chinese blue-chips lost 0.6% as disappointing economic data weighed on the market. Retail sales in China rose 0.2%, when analysts expected growth of 2.0%. Industrial output also increased a slow 4.1%. S&P futures dropped 0.4%, while Nasdaq futures declined 0.2%. AI, RETAIL EARNINGS TO TEST FOR THE BULL RUSH The rising yields increase borrowing costs, and a discount is applied to future earnings of the company. This can affect stock valuations. Earnings from Nvidia, the world's largest company, are due to be released on Wednesday. Expectations for this company are sky-high. Nvidia's shares have risen 36% from a low in March, and the Philadelphia SE Semiconductor Index has soared over 60% amid a voracious demand for semiconductors as tech companies invest massively to create AI-related infrastructure. This week, Walmart and a number of other retailers will also release their results. These will give us an idea about how consumers are coping with the high cost of energy. The greenback has been the most liquid currency in forex markets due to risk aversion. The U.S. also exports energy, which gives it a relative advantage over Europe and most of Asia. The euro remained unchanged at $1.1630, after losing 1.4% the previous week. The pound remained at $1.3353 after a 2.3% drop last week due to political unrest in Britain. The dollar held steady against the yen, at 158.91. Only the threat of Japanese interference prevented another speculative attack on the 160.00 chart. Gold was almost flat on commodity markets at $4,544 per ounce, after attracting little support as a safe-haven or a hedge against inflation risk. (Reporting and editing by Gus Trompiz, Sonali Desai and Wayne Cole)
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Environmental concerns are a challenge for Equinix to Cape Town data centers
The plan of U.S. listed Equinix, to build two data centres in Cape Town, should not be approved unless its full water, power, and environmental impact is fully disclosed, according to an official objection filed with 'city planners. Housing Assembly (HA), a South African social movement that represents more than 20 communities, and UK non profit Foxglove claim the application can't be approved without key information for officials to evaluate the project. Technology firms are racing to increase computing power around the world, but they're facing local opposition as communities worry about rising electricity bills, water stress and pollution. Rosa Curling said that there was not enough information to make a decision about a project this size. There were no details on water usage, emissions, electricity demands, diesel generators or noise. According to the document, this project includes two large data centers in Cape Town that will use a total of up to 160 megawatts of power. However, there are still questions about how backup power generation for the site is going to be handled. Curling stated that the water requirements of the site were also important, given Cape Town's history with water scarcity. Cape Town experienced a severe water shortage in 2017-2018. This is known as 'Day Zero Crisis', where the city shut down most household taps due to dangerously low reservoirs. Saadiyah kwada, an lawyer at Legal Resources Centre, a non-profit organization in Cape Town, said: "There is a rush to build data centres, without properly considering the impacts." Equinix, which according to their website operates a 100% renewable energy site in Johannesburg, declined to comment about the objections lodged by HA 'and Foxglove. King David Golf Club and Equinix, owners of King Air Industrial (the development site on which the data centers are to be built), have 30 days in which to respond. After that, 'the City' has 180 days in which to decide. KAI refused to comment. The City of Cape Town has not responded to any requests for comments. South Africa's Government pledged on Wednesday to increase investment in digital infrastructure including data centers through tax incentives, policy reforms and regulatory barriers. (Editing by Simon Jessop and Kirsten Donovan).
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No one bids on the auction for Russia's stake in UGC, a gold miner.
The Russian state did not auction the seized stake in Uzhuralzoloto, a gold producer, that it had taken last year. A state auction website showed this on Monday. It said no one had bid. Last July, a Russian court decided that the majority of UGC owned by Konstantin Strukov should be confiscated and transferred to state. This was part of an 'overall pattern of nationalisations for Russian companies. The Russian federal property management agency Rosimushchestvo auctioned off Strukov’s assets earlier this month. They valued them at $2.22 billion (?162.02 bn roubles). His former 67.2% share in UGC, one of Russia's 10 largest gold miners, was valued at 140.4 billion roubles. The state auction website announced on Monday that the planned sale failed. The website stated that "the bid was declared invalid as no applications were received by the deadline to submit applications." It wasn't clear if there was a plan for a new auction. Last year, prosecutors moved to seize Strukov's stake after accusing him and "several other" of obtaining their properties "through corruption." Strukov is not in custody and hasn't been charged. The Russian Finance Ministry has put up for auction a number confiscated 'assets, in an attempt to replenish the 'federal treasury. In January, Russia sold one of its largest and modern airports, Moscow’s Domodedovo to a subsidiary of another Moscow Airport, Sheremetyevo for just 66 billion Rubbles. This is only half the price it was originally listed at, 132.3 billion Rubles. $1 = 72,9000 roubles (Reporting and writing by Anastasia Lyrchikova. Editing and proofreading by Mark Trevelyan).
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Estonian spy chief: Putin is faced with'very hard choices' in Ukraine, as sanctions bite
Estonia's chief of foreign intelligence said that Russian President Vladimir Putin is limited in his options for a victory in Ukraine, as his military forces are unable to make significant progress on the battlefield and Western sanctions are eroding his resources. Kaupo Rosin is a leading'spy' on NATO’s eastern flank. He told us that Russia was losing more men in its?fifth full-scale year of war than they were recruiting. A general mobilisation, he said, would be unpopular and could undermine stability. "All these factors are creating a scenario where some people, including those at the highest levels in Russia, understand that they have an enormous problem. In an interview with Tallinn, he stated that it is hard to know what Putin's thoughts are on the matter. However, I believe all of these factors have started to influence his decision making. In recent months, Russian forces have made some of the slowest advances in Ukraine since 2023 - one year after they invaded Ukraine. The economy of Russia, which is worth $3 trillion, contracted by 0.3% during the first quarter. Putin has said that government measures to boost Russia's economy are starting to yield positive results. He has also repeatedly stated that Russian forces will continue to fight until they achieve all of their goals. Rosin stated that the "real, real hurt" of sanctions against the financial sector was the primary reason for the "bad" financial situation in Russia. He also said that punitive measures taken on Russia's crude oil exports are also limiting the country's income. It's a very difficult choice for them right now. In this situation, it's difficult to predict what they will do. Estonia, which has a land border to Russia, is one of the most vocal supporters of Ukraine within NATO and in the European Union. It has also urged its allies repeatedly to increase pressure on Moscow. "My message is to push ahead with (sanctions). He said that now is not the right time to hesitate. No sign of a 'big breakthrough' towards peace Unidentified, another European intelligence chief said that there are clear signs of increasing pressure on Russia but that this has not yet changed Moscow's war calculus. The chief stated that it was difficult to imagine Russia abandoning its goal to take the entire Donbass area. Russia insisted that Ukraine withdraw from eastern Donbas as part of any agreement, but Kyiv rejected this proposal. The Donbas region includes the Russian-occupied Luhansk province and the Donetsk area, parts of which Ukraine was able to defend for years against the Russian offensive. The spy chief said that it did not appear as if Russia was attempting to change its war objectives or if there was going to be a "big breakthrough". The spy chief characterized Russian society as resilient. The official stated that it was "wishful thinking" to think that Russia's leadership is in some way diminishing or Putin has been challenged (domestically )..."). BIG MILITARY AMBITIONS The Estonian spy chief said that Russia would not abandon its goal of subjugating Ukraine as long as Putin was in power. They also predicted they would keep a large military force on the borders of Ukraine even after the war ended. He also said that once the fighting has ended, Moscow will expand its military along NATO's border and "achieve military dominance" from the Arctic to the Black Sea. He said that the Russians' military ambitions were "very, very large" and predicted they would continue to carry out a sabotage campaign in the West, regardless of the danger it poses to civilian lives. Russia has always denied involvement in any sabotage plans or attacks and dismisses these accusations as Western scaremongering. Rosin stated that "Russia views this (such attacks as) something which does not ignite a war." (Editing by Chizu Nomiyama).
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Australian shares fall to a record low of over a month as rising oil prices intensify inflationary concerns
The Australian share market closed Monday at its lowest level in over a month, with mining and gold stocks dragging it down. This was due to a fall in commodity prices. Meanwhile, the stagnation of Middle East peace negotiations boosted crude prices, fueling inflation fears. The benchmark S&P/ASX 200 ended 1.5% lower, at 8,505.30 point, its lowest close since March 31, As commodity prices fell, the number of miners dropped 2.8% to a new low. BHP and Rio Tinto fell between 2.8% to 3.6%. Gold miners fell 4% while real estate dropped about 3%, and financials fell 0.3%. Santos and Woodside Energy both reached a new high of 2.7% after the first oil was produced from the initial phase in Alaska. Oil prices increased after a drone attack set off a fire in a nuclear power station in the United Arab Emirates. This compounded global energy shocks that have caused central banks to reassess their growth and inflation outlooks. The Australian central bank has raised its inflation forecasts, downgraded the outlook of economic growth and increased its main cash rate to 4.35%. The market was already fragile prior to today. Mark Gardner, MPC Markets' founder and chief executive officer, said that the RBA has 'just revised' its inflation forecasts. Bond yields have also risen globally. Now, oil is spiking as a result of the Hormuz crisis, which won't be resolved any time soon. Tuas was the worst performing benchmark, falling as much as 68.7%, to its lowest level since September 2023, after Singapore suspended the review of the merger between Simba Telecom's M1 and Keppel. The benchmark S&P/NZX 50 Index in New Zealand fell 1.6%, to 12,762.92 - its lowest closing since March 30. (Reporting by Anjali Singh in Bengaluru; Editing by Nivedita Bhattacharjee)
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Anglo American sells Australian coal mines up to $3.88 Billion
Anglo American announced on Monday that it would sell its steelmaking mines in Australia for up to 3,88 billion pounds to UK-based Dhilmar. The move is part of Anglo American's strategy to exit the sector and reduce debt, as well as streamline assets, ahead of a planned merger between Teck Resources, Canada, and Anglo American. Anglo, listed in London, is selling the mines located in Queensland's Bowen Basin - the world's leading steel-making coal region - as part of its plan of divesting -or spinning off - non-core assets before completing the merger between Teck Resources and Anglo that will create a heavyweight focused on copper. The company stated that the deal includes $2.3 billion in cash up front and up to $1.58 Billion linked to coal prices. Proceeds will be used to reduce debt. Anglo CEO Duncan Wanblad stated?in a statement that "Through this deal, we will complete?our exit from steelmaking coal." Peabody retracted its $3.78billion bid for Anglo’s Australian coking coal assets last year after the companies couldn't agree on a lower price in the wake of a minefire. Anglo said that it will continue to pursue arbitration against 'Peabody for the failed deal' in parallel with Monday's deal.
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Anglo American sells Australian coal mines up to $3.88 Billion
Anglo American announced on Monday that it would sell its steelmaking mines in Australia for up to?to $3.88billion to UK-based Dhilmar. The move will exit the sector and reduce debt, as well as streamline assets ahead of an upcoming merger with Canada's Teck Resources. London-listed Anglo is selling mines in Queensland’s Bowen Basin - the world’s leading steelmaking coal region - as part of the company's plan to 'divest or spin-off' non-core assets before completing its merger with Teck Resources, which will create a heavyweight copper focused firm. The company stated that the deal includes $2.3 billion in cash upfront and up to 1,58 billion dollars linked to coal price, with a portion of the proceeds going to reduce debt. Anglo CEO Duncan Wanblad said in a?statement that "through this transaction we will complete our exit from steelmaking coal". Peabody retracted its $3.78billion bid for Anglo’s Australian coking coal assets last year after the companies couldn't agree to lower the price in the wake of a minefire. Anglo said that it will continue to pursue arbitration with Peabody in parallel to Monday's deal.
UN report: Major Rwandan coltan supplier bought smuggled Congolese mineral minerals
A forthcoming UN report claims that Rwandan-based Boss Mining purchased coltan from Congo.
Mineral trade is used to finance M23 rebels in eastern Congo
Boss, Rwanda and other countries deny any involvement in the smuggling of goods from Congo
Reade Levinson and David Lewis, Sonia Rolley
According to a report reviewed by the United Nations, a Rwandan company called Boss Mining Solution purchased minerals that were smuggled out of rebel-held areas in neighboring Congo. This helped fund an insurgency there. This is the first time that the U.N. has publicly named a company accused of being complicit in the trafficking of minerals looted in Congo after M23 insurgents took over a major mining area in the country last year. Boss Mining is named in a U.N. document that documents how recent territorial gains by M23 in Congo have further destabilized an area beset by decades-long conflict. U.N. accuses the heavily armed rebels of plundering Congo’s natural resources, and of committing atrocities on civilians. They are backed by Rwanda's government. The report stated that illegal mining and smuggling minerals into Rwanda from M23-controlled zones had "reached unprecedented heights". Diplomats said that the report, which was presented to the U.N. Security Council's sanctions committee for Congo at the beginning of May, will be published shortly. M23 has not responded to our requests for comment. Corporate records show that Eddy Habimana is a Rwandan entrepreneur who runs Boss Mining. U.N. investigators had identified Habimana as a minerals trafficker a decade earlier, with ties to rebels fighting in the eastern Congo. Habimana refused to comment on allegations made in an unpublished U.N. Report. According to Rwandan corporate records, two Russian-born mining executives also own Boss Mining. Yolande Makolo said on Wednesday that the U.N. Report "misrepresents Rwanda’s longstanding concerns about security" regarding Hutu groups who have attacked ethnic Tutsis both in Rwanda and Congo. This threat "requires a defense posture in our borders." The Congolese government spokesperson did not respond immediately to our questions, but officials in the Democratic Republic of Congo have accused Rwanda of fomenting conflict to plunder Congo’s mineral wealth. Mineral sales have been crucial to M23's funding. Insurgents swept through large areas of eastern DRC this year, including mines that produce gold, copper and tin, as well as the largest coltan mining operation in the world. An analysis of 2024 customs records revealed that Boss Mining was one of several Rwandan companies exporting significant volumes of coltan, despite the fact Rwanda produces very little of this metallic ore. Rubaya is the Congolese mine area, now controlled by the M23 group, which produces 15% of all the coltan in the world. The ore can be processed into tantalum, a heat resistant metal that is in demand by manufacturers of mobile phones, computer systems, and other electronics, aerospace, and medical applications. M23 insurgents took control of the two main crossings to Rwanda when they seized Bukavu, a border city located on the Congolese side, and Congo. According to a forthcoming U.N. Report, smuggled Congolese mineral are transported to Rwanda through these cities. They do so at night to "avoid detection." According to the report, 195 tons were discovered in just the last week of march. The report stated that Boss Mining purchased some of the minerals. Habimana responded to previous questions in June about Boss Mining operations by saying that his company had "never purchased coltan" from Rubaya. "All materials we purchase are in compliance with international guidelines designed to ensure mining doesn't fund armed group or contribute to abuses of human rights," he added. M23's rapid advance in eastern Congo has reignited a conflict that dates back to the Rwandan genocide of 1994 and has caused millions of people to be displaced. The rebels are determined to topple the Congolese Government. The Rwandan government has denied for years that it is involved in the trade of coltan looted by its neighbor, or that it supports M23. Rwanda's ruling Tutsi majority party shares the same concern as M23 about the alleged threat of rival Hutu groups in eastern Congo. According to a confidential U.N. document, Rwanda had 1,000 troops in Congo as of April. Rwanda and Congo signed on Friday a peace agreement mediated by the United States that will see Rwandan troops withdrawn from Congo. The agreement does not include the M23. The rebel group is a part of an independent, parallel mediation that Qatar leads to try and end hostilities. Success in these talks is crucial to any lasting peace.
MURKY SUPPLY CHAINS An analysis of customs data revealed that Boss Mining exported 150 metric tonnes of coltan in 2024, worth at least $6.6 million. This figure represented 6.5% of all Rwandan coltan exports in 2024. Boss Mining was the sixth largest exporter of ore for the year. According to a Boss Mining worker who requested anonymity because he wasn't authorized to speak with the media, Boss Mining doesn't mine its own coltan, but instead buys it from Speck Minerals and other sellers. According to an employee of Boss Mining and a database online from the Rwanda Mining Board, the company has a mining license in Rwanda's Burera District where they mine wolframite. According to maps and the mining industry press, there are no major coltan mines in that area. According to reports from the Rwanda Mining Association, and the Rwandan mining press, Habimana also represents Speck Minerals. According to a publication from the 2024 Rwanda Mining Association, Habimana also uses this number for Boss Mining. Boss Mining's employee said that Speck operated two mines, in the Gakenke district and Muhanga district of Rwanda. These mines produce a total of 18 tons of colltan per month. In a 2018 audit conducted by a Thai smelter of the Muhanga Mine, the site owner was listed as Eddy Habimana and the mine name was listed as Speck. According to the audit, the production was 2.3 tons per month at that time. Habimana, in response to questions last month about Boss Mining in text messages, described the two mines in Muhanga & Gakenke as being part of Boss Mining operations. Was unable to verify current production at either mine. Habimana refused to answer any questions regarding Speck, or the employee's claims about production. U.N. investigators as well as non-governmental organisations and sources from the mining industry have accused M23 and their Rwandan supporters of smuggling minerals from Congo illegally for more than a decade. According to a U.N. Report published in December 2024, the scale of the trade increased after M23 took Rubaya. The rebels established a parallel government that controlled mining, trade, transportation, and taxation on minerals produced in the area. U.N. 2024 report stated that the rebels had taken Rubaya and established a parallel administration to control mining activities, trade, transport, and taxation of the minerals produced there. U.N. experts said that the resulting mixing of Congolese coltan with Rwandan production is "the most significant contamination of supply chain" to date. According to the report 2024, M23 received $800,000 per month in taxes from the coltan mines in eastern Congo. Mining experts claim that official statistics on Rwanda's production of coltan are not reliable. In May 2024, the central bank of Rwanda suspended publishing export statistics shortly after M23 had seized Rubaya. An analysis of the customs records revealed that Rwanda exported 2,300 tons ore coltan last year. Eleven geologists and mining experts who are based in the area said that Rwanda exports much more coltan than it produces. They have all visited mines and found that the Congo has a much larger mine site and more miners. Bill Millman, a mineral consultant based in the UK, said that Rwanda's coltan exports for 2024 are "totally implausible". Rwanda's government has not commented on its coltan output. In January, the DRC cut diplomatic ties with Rwanda after M23 took over the Congolese capital of Goma. Congo's army has repeatedly struggled to quell Rwanda-backed revolts. Kigali, however, has benefited for years from the corruption in the Congolese minerals trade and the lack of regulation.
RUSSIAN CONNECTION Rwandan records of company show that Boss Mining, which was established in 2013, is owned by Habimana. The managing director denied buying Congolese colltan. These records reveal that Boss Mining also has two other owners, Yuriy tolmatchev (the managing director who denied purchasing Congolese coltan) and Alexander Konovalchik. According to UK and Russian company records, and Russian mining press reports, both men are dual citizens of the UK and Russia and have worked in the mining sector for decades. Now they live and work in Britain. According to corporate records, the two men own other companies which buy the coltan from Boss Mining. They are also directors of Metarex Ltd., according to Cyprus corporate records. According to corporate records from the United Arab Emirates provided by corporate intelligence firm Diligencia, Metarex is 100% owner of Novacore FZE. Tolmatchev manages Novacore, which according to corporate records and an analysis of customs data, purchases all the coltan produced by Boss Mining. Tolmatchev declined to comment on Novacore’s purchases. He stated that Boss Mining was the smallest exporter of coltan in Rwanda but refused to give more details. He said he had no idea what local traders were doing in North Kivu, the Congo province where the Rubaya mine is located. Tomaltchev responded that the company does not buy material from Congo. Konovalchik was not able to comment on the U.N. Report. He said that all minerals purchased by Boss Mining are "from Rwandan Sources". He then referred any further questions to Habimana. He said, "I don't control day-to-day operations." Reade Levinson reported from London, David Lewis from Nairobi, and Sonia Rolley from Paris. Filipp Lebedev contributed additional reporting from London. Marla Dickerson, Silvia Aloisi and Marla Dickerson edited the article.
(source: Reuters)