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GSK and gold miners share prices push Britain's FTSE 100 up
The UK's FTSE 100 rose on Wednesday, after two consecutive days of declines, boosted by gains made in the shares of gold and heavyweight GSK. Investors are now focused on this week's Bank of England rate decision. The blue-chip FTSE 100 closed 0.6% higher while the mid-cap FTSE 250, which is focused on domestic companies, rose 0.5%. GSK's share price jumped 7.6% following the launch of a 2-billion-pound ($2.5-billion) share buyback program and a boost in its long term sales target to almost $50 billion. Gold prices reached another record high, and precious metals miners surged by 3.6%. Fresnillo climbed by 5.8% after J.P.Morgan named it their "top pick." The Bank of England will announce its monetary policy on Thursday. Markets have already priced in a cut of 25 basis points. We expect the BoE will cut rates by 25bp, and we believe that their easing guidance is going to be stronger than what market expectations are. Geoff Yu is a senior market strategist with BNY. He said that at least one rate cut of 25bps per quarter would be necessary, as the growth risks are still heavily on the downside. Ferrexpo fell 8%, to the bottom of mid-cap index. The miner's losses extended to the second session. On Tuesday the miner announced that a civil suit worth 157 billion Hryvnias (3.77 billion dollars) had been filed against its Ukrainian subsidiary. (Reporting from Pranav Kashyap in Bangalore and Medha Singh; editing by David Gregorio.)
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Syrah Resources plans to restart production at its Mozambique plant in the first quarter
Syrah Resources' chief executive stated on Wednesday that the company hopes to resume production at its Balama project in Mozambique within the first quarter. This will eventually lead to the lifting force majeure. The company declared force majore in December, due to protests and civil unrest sparked by the Mozambique election results of October. This also caused it to default on U.S.-backed loan. The stability of the country has improved significantly. Shaun Verner, CEO and Managing Director of Syrah Resources, said that the last two to three weeks were much better than previous periods. We are working to resolve the dispute at the site, and we will try to resume production in this quarter. The outcome is not yet certain, but it's the goal. The company said that protests by farmers at the Balama Project began late in September, and they have been preventing the movement of supplies and people as well as disrupting operations. A clause called force majeure allows contracting parties to escape liability in the event of unexpected external circumstances which prevent them from fulfilling their obligations. Verner responded that any additional tariffs would be beneficial to the industry when asked about the impact of President Donald Trump's proposed 10% duty on all Chinese imports. He said that the 25% tariff on anode materials from China is a first attempt to help balance the increased volumes coming from China. He added, "But what we are seeking in the end is a level playing field that will allow us to compete as well as continue to diversify and increase the supply of products into the U.S. Syrah operates an anode material plant in Louisiana, United States. This material is a key component for battery and auto manufacturers. Syrah announced that its unit, Syrah Technology LLC, had filed a petition for anti-dumping duties and countervailing duties with the U.S. Department of Commerce as well as the International Trade Commission in December. The petition was submitted jointly with the North American Graphite Alliance and sought to investigate Chinese exports for natural and synthetic active anode materials used in lithium-ion battery batteries. China is the world's largest producer of graphite, which is used in the battery of electric vehicles.
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Anglo Platinum CEO anticipates spin-off investor interest
Amplats CEO Craig Miller stated on Wednesday that Anglo American Platinum has a lot of interest from investors as it prepares for its spin-off as a separate entity. The spin-off is part the group's restructuring plan, which aims to fight off a $49 Billion takeover bid by bigger rival BHP and focus on more lucrative copper and iron ore properties. Miller, without providing details, said that Amplats will be separated mid-year and the company's name will change. Amplats, the only PGMs producer in London will have a secondary listing on the London Stock Exchange, which could attract new investors. Miller said on the sidelines at the Mining Indaba Conference in Cape Town that there was a lot interest in the standalone business. "(London is) a lot simpler... Some fund managers may find it more appealing to invest through the London Stock Exchange." The price of white metals, used in autocatalysts, has dropped in the last two years. This is due to the increase in battery-electric vehicles that don't need them. Anglo American is selling its nickel assets in Brazil as part of a strategic reorganization. It plans to sell its De Beers diamond division. South Africa's Platinum Miners are among the largest earners of foreign currency in the country. However, the industry has reduced production and lost thousands of jobs due to lower demand. Amplats, which is the largest platinum miner in terms of value, says that the recent decline in demand for electric cars could be a factor in reviving interest. Miller stated that there is "a lot of interest" in PGMs due to their role in transportation. He said that a lack of investment in new platinum mines may limit the supply and support prices. Miller stated that there was no new supply of PGMs on the market. Reporting by Felix Njini in Cape Town and Clara Denina; editing by Veronica Brown, Elaine Hardcastle.
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USW union chief files motion for dismissal of lawsuit filed by US Steel and Nippon Steel
The United Steelworkers President David McCall has filed a motion for dismissal of a lawsuit brought against him by U.S. Steel & Nippon Steel. Last month, the two steelmakers sued McCall, Cleveland-Cliffs and its CEO Lourenco Goncalves "for their illegal, coordinated actions" to prevent the $14.9 billion transaction. Joe Biden, the former president of the United States, initially blocked this deal in January on grounds of national security. However, he delayed its implementation until June. The takeover of U.S. Steel by Japan's Nippon Steel has become highly political ahead of the U.S. Presidential Election in November. Both Biden and Donald Trump have pledged to end it. Under Biden's presidency, the deal was also subjected to a thorough antitrust investigation by the Committee on Foreign Investment in the United States. In a separate lawsuit, the companies also accused Biden of blocking a deal illegally. USW had opposed the deal for years due to concerns about job security and lack of transparency, despite Nippon’s numerous attempts to assuage their concerns. The USW has, however, shown its support for Cliffs. It was reported that Cliffs had partnered with Nucor, a peer, to prepare a possible all-cash offer for U.S. Steel. U.S. Steel, Nippon and Cliffs have accused Cliffs of colluding with Goncalves and McCall to allow Cliffs "monopolize domestic steel markets", by blocking any other attempts to purchase the 123-year old American steelmaker. McCall filed the motion with the Western District of Pennsylvania. USW called U.S. Steel's and Nippon Steel's lawsuit "frivolous, unsubstantiated" attack on the union because it exercised its rights under the first amendment.
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Sources say that financial industry groups are concerned about LME's OTC trading plans
Five sources familiar with the matter have confirmed that two financial industry groups raised concerns about the London Metal Exchange's (LME) plans to require members to conduct private transactions with clients on the LME platform. On its Select trading system, the LME wants to encourage its members to execute so-called OTC trades up to 10 lots. This is equivalent to, for example, 250 metric tonnes of copper. The LME also wants its members to hedge these trades using Select. COMEX is a part of the U.S. based CME Group, and it offers contracts for copper, aluminum, and other metals. COMEX doesn't require its members to conduct OTC trading on its system. In December, the Futures Industry Association and the Association for Financial Markets in Europe sent a letter together to the London Stock Exchange outlining the concerns of its members. This was an unusual move that followed a meeting of LME members who normally voiced their concerns and objections via working groups. LME brokers complain about a variety of revenue-raising measures, including trading and clearing fees and other costs such as reporting OTC transactions. In response to a comment request, AFME and FIA stated that they "recognize the LME's efforts to improve transparency and market structure" and were working constructively on these proposals. Three sources claimed that LME members also brought the matter to the attention of Britain's Financial Conduct Authority. The watchdog refused to comment or confirm whether it was consulted on the LME plans. The LME stated that it aims to increase transparency and liquidity and welcomed feedback from "all LME stakeholders" regarding a plan for modernising the market structure announced in September. The LME responded to a comment request by saying, "We are confident the planned measures will result in better outcomes for the entire market." The 148-year-old exchange said that "we expect some of our members will have to adapt their businesses models"... Full details of the proposed measures will be presented and formally discussed in the first half 2025. The LME initially published a "white paper" on its proposals. At the time, it was only planning to consult on necessary changes to its rulebook to implement these proposals. Sources in the industry say that members of the LME want to see the LME drop its plan to require its members to transact OTC for its most liquid monthly and three-month contracts up to 10 lots each on Select starting the second half 2025. LME members are also interested in how the number of 10 lots was calculated. They worry that it won't stop there, and the exchange may continue to raise the limit in order to attract more OTC trading. Some have suggested that the LME wants to stop brokers and banks from netting their buy and sale orders and hedging them on other exchanges such as COMEX. (Reporting and editing by Veronica Brown, Alexander Smith and Pratima Deai)
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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)
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.
(source: Reuters)