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Gold prices continue to rise as demand increases due to trade war fears
The gold price continued its record run on Tuesday, as investors sought out the safe-haven investment amid escalating fears about the U.S. - China trade war and the potential impact it could have on the economy. By 09:24 am, spot gold had risen 0.8% to $2,864 an ounce. After hitting a session high of $2.877, gold prices rose 0.8% to $2.864 per ounce by 09:24 a.m. ET (1424 GMT). U.S. Gold Futures rose 0.4% to $2.885.90 an ounce. "Gold is still influenced by the trade uncertainty... tariffs and retaliation with China have the market on edge. So safe-haven flows are the dominant factor," stated Peter Grant, senior metals analyst at Zaner Metals. China retaliated earlier this week by imposing tariffs against U.S. products in response to the new U.S. Tariffs, escalating trade war. Meanwhile, President Trump did not express urgency to speak with President Xi Jinping in order to ease tensions. The U.S. The U.S. Postal Service announced that it will resume receiving all inbound packages and mail from China on Wednesday after temporarily suspending the service. Three U.S. Federal Reserve officials have warned that Trump’s trade tariffs may drive inflation. One official suggested that the uncertainty surrounding price forecasts warrants a slower rate cut. ADP's National Employment Report showed that the U.S. private sector added 183,000 new jobs last month. This was higher than the economists' estimates of a 150,000 increase. Grant stated that "employment is going be an important topic this week... But I don't believe anything will materially affect the Fed's expectations on policy, unless the situation is really out of line." Investors will be looking for more clues about the future of rates in the U.S. Payrolls Report on Friday. Bullion is a good inflation hedge but higher interest rates may make it less attractive. Spot silver increased 0.4%, to $32.23 an ounce. Platinum gained 1.6%, to $979.40. Palladium rose 0.4%, to $994.75.
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Mexico plans to add 29 GW new capacity for power generation by 2030
The Mexican government is planning to invest $22,4 billion in new electricity generation capacity before the end of this administration, which will be 2030. This investment will come from the state-owned CFE. According to data collected by the government in 2023, the country's power sector has a total installed capacity of 95 GW. The majority of Mexico's power is generated by burning fuel oil and natural gas. According to a CFE Presentation, the government's expansion plan for 2030 is divided into 51 projects. However, half of these are generation projects initiated by the former government. The CFE's newly appointed director, Emilia Calleja noted that 16 wind and solar projects are included in the plan, which is scheduled to be completed by 2027 or 2028. Calleja was speaking at the morning press conference held by President Claudia Sheinbaum. Sheinbaum stressed that the CFE will lead the CFE's plan to expand the power sector with the majority of public funds. (Reporting and editing by David Alire Garcia)
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Gold mine CEOs claim that Mali's new mining law must be revised to attract investors.
Gold companies will have to loosen up the new Mali mining law that raises taxes, and aims to give large stakes of assets to local investors and the state. The new rules require companies in Africa's 2nd largest gold producer to give a 35% stake of their new projects to Malian Investors - an increase from the previous 20% - and to raise royalty tax to 10% from around 6%. Three gold mining CEOs from West Africa spoke on the sidelines at the African Mining Indaba, which was held in Cape Town. They said that the new rules made it uneconomical to buy or invest in new mines in the country. The state's interest rate and higher royalty tax is "too high" to encourage investment, according to a gold mining CEO. He said that he had spoken to some government officials who have come to the conclusion that the mining code was too strict. They need some easing of the tax requirements. A second CEO stated: "The danger is, that as taxes increase and affect the level of investment, gold companies can choose to take their money elsewhere, since we have options." The junta government of Mali has been aggressive in its implementation of the new rules. This has soured relations with investors including Barrick Gold, world's no. Barrick Gold, the world's No. 2 gold miner, has been adamant in implementing new rules. Barrick closed its Loulo-Gounkoto operations last month after authorities confiscated its gold reserves via helicopter and arrested several employees over a dispute relating to the new mining laws. Mark Bristow, Barrick's CEO, is facing an arrest warrant for Mali in addition to a number of executive arrests as well as the possible loss of $245 million worth of bullion. The Mali mines ministry refused to comment. When the review of the old code was announced in the year 2023, it said that an audit showed the ministry was not getting a fair share of the profits from the mining industry while giving too many tax incentives. "WE ARE TALKING" Jorge Ganoza, CEO of Fortuna Mining Corp., a Canadian mining company seeking to expand into West Africa, has said that he will not invest in Mali. He predicted that producers would shift their focus from Guinea to Ivory Coast to Senegal to Burkina Faso. He said that the lack of investment into new mines and exploration could reduce the life expectancy of existing mines. Do you think Resolute and Barrick are looking to increase their investments in Mali? No," Ganoza said. Resolute Mining's CEO, who was detained by Mali authorities in 2011 over disagreements about mining rules, announced on January 30 that the royalty tax would add approximately $250 per ounce to the total cost of the Syama mine. Both CEOs spoke separately and cited Robex as another Canadian company that was looking to leave Mali. Robex, a Canadian company that is having trouble finding buyers for its Nampala Mine in Mali, announced on its website that it would be shifting its focus to Guinea. Some mining groups continue to speak to Mali's ruling junta about how they can work in the country. Resolute has agreed to pay $160m for the release of the CEO and senior executives arrested in Bamako in Bamako, last year. The company said that it would continue to discuss the future of the mine and the migration of assets to the new code. Barrick CEO Bristow said to mining investors in Cape Town, on Monday, that the company had "challenges in Mali" because "certain individuals... promised more money to the junta led transitional government". He said that "the most important thing" is to talk. (Reporting and editing by Jan Harvey; Additional reporting provided by Wendell Roelf)
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Why does Trump want Ukraine's rare Earths?
U.S. president Donald Trump said Monday that he wants Ukraine to provide the country with rare Earths in exchange for financial support of Kyiv’s war effort against Russia. The comment appears to be a part of the war strategy known as "the victory plan" that President Volodymyr Zelenskiy, who is from Kyiv, presented to Kyiv’s allies including Donald Trump last autumn. The plan includes, among other things: reaching agreements with partners abroad to allow joint access to Ukraine’s strategic valuable resources. It wasn't immediately clear whether Trump was referring only to rare earths or to all critical minerals. He said that the United States wanted to make a deal with Ukraine in exchange for "their rare Earths and other stuff." Rare earths is a grouping of 17 metals, used in the production of magnets for electric cars, cell phones and missile systems, among other electronic devices. There is no substitute. China is the largest producer in the world of rare earths, as well as many other essential minerals. Since his reelection, Trump has expressed an interest in making Greenland a part the U.S., an autonomous territory owned by Denmark that also contains large deposits of rare earths. The U.S. Geological Survey has identified 50 minerals as critical, including nickel, lithium, rare earths and several types. According to data from the economy ministry, Ukraine has 22 of the 34 critical minerals that the European Union identified. These include industrial and construction materials as well as ferroalloys, precious and nonferrous metals, and rare earth elements. Ukraine has large coal reserves, but most are under Russian control in occupied territory. The following is a list of Ukraine's potential natural resources for the United States and other partners. What are the rare earths of Ukraine and what do they serve? Ukraine is known as the breadbasket of Europe. It also has vast mineral resources. Some of these critical raw materials are vital for industries like defence, high-tech appliance, aerospace, and green energy. According to the Institute of Geology of Ukraine, it has rare earth elements 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 energy and other applications. A study funded by the European Union also shows that Ukraine has scandium deposits. The data is classified. According to mining analysts and economists, Ukraine has no commercially-operating rare earth mines. According to the World Economic Forum (WEF), Ukraine is a major potential supplier of materials such as titanium, lithium beryllium manganese gallium uranium zirconium graphite apatite fluorite nickel. According to the Ukrainian State Geological Service, the country has the largest titanium deposits in Europe. This is about 7% the world's total reserves. It also boasts one of Europe's biggest confirmed lithium reserves, estimated at 500,000 tons. Lithium is vital for batteries and ceramics and glass. The majority of titanium reserves are located in central Ukraine. Lithium is found in the east, centre and southeast. The graphite reserves in Ukraine, which are used to make electric car batteries and nuclear power reactors, account for 20% of the global resource. Deposits are located in the west and centre of the country. Which Ukrainian resources are under Kyiv's control? The war in Ukraine has left a trail of destruction and Russia controls about a fifth the territory. The majority of coal deposits in Ukraine, which powered Ukraine’s steel industry prior to the war, is concentrated in the eastern part and has been lost. 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 mining outside of the city of Pokrovsk in the eastern Donetsk region, which Moscow is trying to seize. Russia occupied two Ukrainian lithium mines during the war, one in Donetsk in the southeast and the other in Zaporizhzhia in the east. Kyiv controls the lithium deposits of central Kyrovohrad. What are the opportunities and challenges for mining in Ukraine? 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 on projects related the exploitation of critical materials. The government estimates that the potential investment in this sector will be around $12-15 billion between 2033 and 2034. 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 in Ukraine, including the 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 and editing by Louise Heavens, Olena Hartmash)
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OPEC's oil production falls in Nigeria and Iran for the second consecutive month, according to a survey
A survey shows that OPEC's oil production fell for a second consecutive month in January. This was due to a decline in exports, primarily from Nigeria and Iran, which offset a recovery in the United Arab Emirates, where maintenance on fields had reduced output in December. According to a survey released on Wednesday, the Organization of the Petroleum Exporting Countries (OPEC) pumped 26,53 million barrels of oil per day in December, a decrease of 50,000 bpd compared with the revised December total. Nigeria and Iran saw the biggest drops. The modest drop in production came at a time when the OPEC+ group, as a whole, is still cutting back on production until the end March because of global concerns about demand and the rising output outside of the group. OPEC+ decided on Monday to continue with its plan to increase output in April. The survey revealed that Nigerian production fell by 60,000 barrels per day, mainly due to lower exports. However, domestic consumption is on the rise as Dangote refinery ramps-up. The survey also found that Iran's production, which had reached its highest level since 2018 despite U.S. sanction last year, fell by 60,000 Bpd. Goldman Sachs, among other analysts, predict that the tighter sanctions of President Donald Trump's administration may curtail it soon. The survey shows that output in Saudi Arabia and Iraq - the top two producers of OPEC - has decreased. The survey revealed that the UAE was responsible for the largest increase in OPEC, 90,000 bpd. Sources claim that partial field maintenance, which began in December, continued into January. While the survey shows that the UAE and Iraq pump below their target and the December data from OPEC secondary sources places them not too far above the targets, other estimates like those by the International Energy Agency show they pump significantly more. Libyan output increased by 40,000 barrels per day, continuing the recovery that began after a dispute over the control of the Central Bank led to production reductions. The country is not bound by OPEC+ production agreements. The survey aims at tracking the supply of oil to the market. It is based on data provided by LSEG (a financial group), information from companies that track flow, such as Kpler and information from sources in oil companies, OPEC, and consultants. Ahmad Ghaddar contributed additional reporting. Mark Potter edited the article.
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Bunge Q4 profits drop on weak oilseed processing margins
Bunge Global, a commodities trader in agriculture, posted a lower-than-expected fourth quarter profit on Wednesday. Weak oilseed processing margins across key markets affected the results of its core agribusiness division. The company's processing business will remain under pressure by 2025, due to low margins in a difficult economic environment. Global trade tensions as well as uncertainty over biofuel policies are also causing problems for crop traders. The struggles come as Bunge is working to close a deal to acquire grain handler Viterra, a merger that would create an agribusiness powerhouse closer in size to its peers Archer-Daniels-Midland and Cargill. Bunge stated that regulatory approvals were nearing completion for the deal. Bunge shares fell 4.3% in the minutes before the bell. Profits have been eroded as global surpluses of crops such as soybeans and corn drove prices down to four-year-lows in the past year, cutting into margins. ADM posted on Tuesday its lowest fourth quarter profit in six-years and announced that it would be cutting costs and jobs. It joined Cargill to tighten its belt. Bunge's agribusiness division, which accounts for over 80% its revenue, saw core earnings fall to $364m in the fourth quarter, from $639m a year ago. The adjusted earnings of the sub-segment processing fell by nearly 60% as a result of lower crushing results for soybeans in North and South America, and weak markets for softseeds in Europe. Bunge's unit for refined and specialty oils saw its adjusted profit drop by 25%, in part due to uncertainty over U.S. Biofuel Policy. Bunge's adjusted earnings per share for 2025 is $7.75, down from $9.19 in 2024. This misses analysts' expectations by $8.71. According to data compiled and analyzed by LSEG, the Missouri-based firm posted an adjusted profit per share of $2.13 in the quarter that ended December 31, down from $3.70 a year ago. This was also below the $2.24 consensus analyst estimate. Reporting by Karl Plume from Chicago and Vallari Shrivastava from Bengaluru. (Editing by Krishna Chandra Eluri, Mark Potter).
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Brazil's farmers are betting on solar energy to stabilize the power supply
According to experts and growers, Brazilian farmers are expanding their solar power capacity and testing battery storage solutions in an effort to increase electricity supply predictability and reduce diesel consumption. The increased use of alternative energies in Brazil, which is the largest exporter of food products, will result in greater business for equipment suppliers, a reduced dependency on fossil fuels and more efficient agriculture. WEG and other companies that offer energy solutions say that the interest of farmers in battery-based systems has increased in recent months. Projects are now being implemented after a dramatic drop in battery costs. Around 14% of the solar power installed in Brazil is generated by rural properties. 4.8 gigawatts are distributed through small photovoltaics, which are often constructed on roofs or undeveloped land. According to an analysis by the Brazilian Association of Photovoltaic Solar Energy, solar capacity in agriculture has increased more than sevenfold since 2020 when renewable energy projects began booming across the country. According to the association, the number of rural consumers using solar panels has risen from 54,000 in 2014 to 471,000 at the end of 2024. Solar power is used by Brazilian farmers for irrigation of crops, air conditioning, lighting, pumping up water in reservoirs, and powering cold-storage rooms. Batteries can also be used to reduce diesel consumption in farms where generators run on the fuel power irrigation and agricultural equipment on farms that are not connected to the grid. Farm group Bom Futuro in Mato Grosso invests in energy generation and is currently evaluating the use of batteries to reduce power outages. Livio Costa is Bom Futuro’s manager of Energy. He said that interruptions in electricity supply disrupt cotton machines and production causing material loss. He said that if the power went out for 15 minutes it could take two hours before production resumed. This doesn't happen just once. "It happens several times during harvest." Bom Futuro’s investments in energy generation reflect an increased demand on farms for grain drying, storage and cotton processing that is power intensive. (Reporting and writing by Leticia fucuchima, Ana Mano, and Paul Simao).
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Tax disputes between India and foreign companies
In India, foreign companies often face difficulties due to the high tax demands imposed on them by India. These include levies on large M&A deals or duty evasion. The following are the most important tax disputes that have occurred in the past and currently involving foreign companies. Kia, a South Korean car manufacturer, has been accused by officials of evading $155 million worth of taxes through misclassification. The company, however, is disputing this privately with the officials. Kia imports parts of a vehicle in separate shipments, assembling the vehicles in India. They pay a lower applicable tax, avoiding the higher tax when the parts are assembled as a CKD (completely knocked-down unit) of a automobile. VOLKSWAGEN Volkswagen, in a case similar to Kia's, has sued Indian authorities at a Mumbai court, after receiving a tax notice of $1.4 billion for importing parts that were related to 14 models including some Audi models instead of classifying the parts as CKD. In its court case, the German automaker argues that India's tax demands are "impossibly large" and will affect their investment in India as well as foreign investor sentiment. VODAFONE In one of the more controversial cases, Vodafone received a tax demand of $2 billion when it bought Indian assets from HutchisonWhampoa for $11 billion in 2007. In the dispute, there were years of litigation. The Indian top court ruled in favour of the company. This was followed by a law change that reimposed demand and international arbitration between both sides. Vodafone won the arbitration in 2020. CAIRN ENERGY Cairn Energy, a British company, was hit with a tax bill of more than $1.4billion in 2007 for the transfer shares that occurred during reorganization. Cairn sold its majority share of Cairn India in 2011 to Vedanta Ltd. This reduced its stake in the Indian firm to around 10%. In 2021, the Indian government and Cairn india finally settled their years-long dispute by offering to refund tax amounts. PERNOD RICHARD Indian authorities have accused the French liqueur giant Pernod Ricard of undervaluing some imports over a period of more than 10 years to avoid paying full duties. India has demanded roughly $250 million of back taxes, but Absolut and Chivas Regal have disputed the findings. The dispute is still pending. Pernod warned the Narendra Modi administration in 2022 that its tax disputes with authorities over the valuation of liquor imports had hampered new investment and its existing business. Indian authorities have accused BYD, a Chinese automaker, of not paying $8.37m for parts used in cars that it assembles and then sells in India. BYD deposited the request but the investigation is still underway and could result in additional tax charges and penalty, as has been reported previously. (Reporting and editing by Aditya K. Kalra; Arpan Chaturvedi)
India's UltraTech buys stake in Star Cement for as much as $100 million
India's UltraTech Cement will buy an 8.69% stake in Star Cement, it said on Friday, in an offer that could be valued at as much as 8.51 billion rupees ($ 100 million) and firm its leading position in the sector.
UltraTech stated it would pay not more than 235 rupees per Star Cement share, which is a 2% premium to the stock's closing price on Thursday.
There has actually been a wave of deals ever since billionaire Gautam Adani's ports-to-power conglomerate entered the cement market in 2022 to challenge Aditya Birla Group-owned UltraTech's pole position in the market.
UltraTech's newest offer comes weeks after local media had reported that the Adani Group was considering an acquisition of Star Cement, the biggest manufacturer in the country's north-east.
Star Cement's shares leapt 7% in early trading to 247 rupees, above the maximum deal rate, which typically indicates that financiers are expect a greater deal or a competing bid.
UltraTech's shares were up 0.7%.
Star Cement, like many little cement mills, has experienced larger competitors competing for market share. Its annual sales development anticipated to slow to 6.8% this , from 22% in 2023, according to a price quote by brokerage Nirmal Bang.
(source: Reuters)