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Codelco, a Chilean lithium producer, has partnered with Rio Tinto to form a new major lithium partnership
Codelco, a Chilean state-owned miner, announced on Monday that it will be partnering with Rio Tinto, the global mining giant, for its new Maricunga Lithium project. This partnership brings a new major player to the lithium sector, which is the second largest producer in the world of this EV battery metal. After a selection procedure, Rio Tinto is now the third largest private company in Chile's Lithium sector. It joins Chile's SQM, and U.S.-based Albemarle who have been dominating production for years. Codelco, which holds a 49.99% stake in the project, said that Rio Tinto would contribute up to $900m to it. Codelco will be in charge of the rest, as it is the state miner that has been tasked to spearhead the recent push by the Chilean government into this sector. The funding will include $350m when the deal is closed, $500m when a decision on the final investment is made and $50m if commercial production can be achieved by the end 2030. Codelco announced that the board of the partnership would consist of two members nominated by Rio Tinto and three by Codelco. Daina Beth Solon is reporting.
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Brazil reforestation company re.green receives fresh funding in deal with BNDES and Bradesco
The Brazilian reforestation start-up re.green said it had received 80 million reais (about $14.13 million) from the state development bank BNDES. Bradesco was also a financial intermediary in this deal. The deal is similar in nature to the 160 million reals deal announced last month by Mombak, which was the first reforestation program backed by Brazil’s 10 billion reals "New Climate Fund", unveiled by 2023 for financing climate-related projects. As Brazil's new carbon market gains momentum, private investors and lenders like Bradesco and Santander are interested. Bradesco acted as Mombak's intermediary. Many investors still view restoration as a risky business, and some startups are having difficulty getting financing to finance their operations or reduce capital costs. Thiago Piccolo, re.green's Chief Executive, said in an Interview: "Our mantra is to de-risk. This is how, over time we will reduce uncertainty and increase confidence on our market." In our case, Bradesco is also involved for the first-time in the disbursement. It is a series steps to reduce uncertainty, boost confidence and facilitate fundraising. Re.green partners with farmers or ranchers to buy degraded land and replant native plants in the Amazon Rainforest and Brazil's Atlantic Coast rainforest. The company generates "carbon credits" by converting degraded land to forests that can be purchased to offset greenhouse gas emissions. The startup, which has a deal to restore forests with Microsoft, is backed both by Brazilian billionaire Joao Salles as well as asset managers like Dynamo and Gavea founded by former Brazilian Central Bank Governor Arminio Fraga. Aloizio Mercadante, the head of the state development banks, said that the BNDES financing was "a powerful tool for enabling investments in the rehabilitation of degraded regions in the country". He added, "This confirms the power of the fund provided by President Luiz inacio Lula to BNDES for them to fight against the effects of climate changes in our country." The program of the bank is part of Brazil’s 2015 commitment of restoring 12,000,000 hectares (29,7,000,000 acres) of native forests by 2030. Lula reiterated this commitment last year.
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Treasury yields are rising, stocks and the dollar are down, with focus on the tax bill and US downgrade
The yields on longer-dated Treasury bonds rose, while the global stock indexes fell and the dollar weakened Monday. This was due to concerns over a U.S. federal tax bill, the U.S. government's debt and Moody's decision to downgrade the U.S. sovereign rating. Moody's Investors Service lowered the United States' sovereign rating to "Aaa" late on Friday night, bringing attention to the country's worsening fiscal outlook. A key congressional committee approved the massive tax-cut legislation of U.S. president Donald Trump on Sunday. Republicans in the U.S. House of Representatives, who currently control it, will push for the bill's passage this week. Investors are concerned that tax bills will cause debt to increase more than expected. The 30-year bond rate was up 9.4 basis point at 4.992%, after reaching 5.037%. This is the highest level since November 2023. What Moody's has done is more symbolic than anything. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. "Yes, the yields are rising on news reports, and they could spike even higher. "But they're moving up also for other reasons," he said. "In general, the (stock market) is not reacting that much to Moody's." It's more of a market that has risen and is trying to consolidate recent moves. Scott Bessent, U.S. Treasury secretary, used Sunday's television interviews to dismiss Moody's downgrade while warning that trade partners would receive maximum tariffs if not they offered deals "in good faith". Bessent will attend a G7 summit this week to continue discussions. The Dow Jones Industrial Average dropped 59.42, or 0.15% to 42,592.31. The S&P 500 declined 24.46, or 0.41% to 5,933.92 and the Nasdaq Composite lost 119.50, or 0.62% to 19,091.89. On Friday, the S&P 500 posted its fifth consecutive day of gains. The MSCI index of global stocks fell by 1.73 points or 0.20% to 878.89. The pan-European STOXX 600 fell by 0.17% while Europe's FTSEurofirst 300 fell by 3.99 points or 0.18% The MSCI broadest Asia-Pacific index outside Japan fell by 0.5%. The Chinese economy is struggling, according to a mixed bag of data. Trump's tariffs war has weakened consumer confidence. Analysts will be reviewing Home Depot and Target earnings this week to get an update on trends in spending. Trump said that Walmart would be forced to raise prices because of the levies if it didn't "eat the tariffs". The U.S. Dollar weakened widely, reaching a low of more than a week against the safe haven currencies, including the Swiss Franc, yen and euro. The dollar fell 0.38% against the Japanese yen to 145.06. U.S. Rates Not Falling So Fast Raphael Bostic, president of the Atlanta Federal Reserve, told CNBC that the central bank might only be able reduce interest rates by one quarter point for the remainder of the year due to concerns over rising inflation caused by increased import taxes. In an interview that was published on the weekend, Christine Lagarde, President of the European Central Bank said that the recent decline in the dollar reflected a lack of confidence in U.S. policy. Brent crude reached $65.45 a barrel, an increase of 0.06% for the day. U.S. Crude rose by 0.24%, to $62.64 per barrel. Spot gold increased 1% to $3.234.34 per ounce. U.S. Gold Futures increased 1.54% to $3.231.10 per ounce.
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Andy Home: Bearish funds turn away from volatile copper and towards aluminium
Fund managers have been hit hard by the price volatility that has resulted from U.S. tariffs on imports of copper. Since February when U.S. president Donald Trump ordered a probe into copper imports, the copper market has been dominated by the premium that the CME U.S. price commands over the London Metal Exchange (LME)'s international price. The trade has been volatile and the price gap between the US and Europe has undermined the traditional investment role of Doctor Copper as a proxy to the state in global manufacturing. Many fund managers simply gave up. Investor positioning and open interest in the CME Copper contract has dropped dramatically over the past couple of months. Others have turned to aluminium in order to express their negative views of the global trade situation. HEADLINE TURBULENCE Money managers were evenly divided between long and shorter bets when they began the year. Fund positioning on CME copper contracts amounted 134,000 contracts. According to the latest Commitments of Traders Report, the total participation has decreased to 82,000 contracts. Investors are now net long at 24,780 contracts. Trading on the CME copper contract dropped 35% year-over-year in the period January-April, while the market open interest reached a new low of one year at the end last month. It's not surprising that copper is still in the news, given the fact that the investigation under Section 232 into U.S. Imports has been ongoing for a long time. The constant stream of headlines about the copper tariff as well as the wider tariff standoff with China have turned the trading of metals into a wild ride. This is especially true for the CME contract. Many investors have reduced exposure to risk, either voluntarily or involuntarily. Funds that expected copper prices to drop due to trade tariffs impacting global growth were particularly hard-hit. Money manager short positions are at their lowest level since November 2022. Bulls are also not raging. Since the middle of April, the collective investment's long position has flattened. ALUMINIUM UNDER THE HAMMER No indications exist that money from the CME is now on the London copper markets. Fund positioning for LME copper has also been reduced due to a decline in both bullish and bearish bets. Money managers who want to convey a negative macro-picture have instead focused their attention on aluminium. The CME aluminium contract does not reflect the LME international product but is instead a U.S.-cleared customs price. The CME's U.S. Midwest Physical Premium Contract is the only place where the trade in tariffs can be done. This has prompted funds to increase their short positions in LME aluminum to the highest level since July last year. Investors have also slashed their bets for higher aluminium prices. This has resulted in a net fund position that is now neutral, having been super-bullish just a few months ago. Divergent Fortunes Recent price differences between copper and aluminium can be explained by the rotation of funds from copper to aluminum. LME's three-month copper is now back to its previous $9,500/metric ton price after a 17% increase from the lows of April 7. LME aluminium, on the other hand, has recovered a modest 6% from April's sell-off. The price of three-month metal has fallen by 4% since the beginning of the year, and is now trading at around $2450. It is the second weakest performer in the LME base metals, after zinc. Bears may still have a rough time with aluminium. LME warehouse inventories are steadily decreasing, time-spreads were contracted in the last month and the benchmark cash to three-months period flirted with a backwardation. However, fund managers still feel that it's a lot safer than trying to ride a copper roller coaster. These are the opinions of a columnist who writes for.
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Republicans are hoping to push through Trump's tax cuts despite divisions
Republicans in the U.S. House of Representatives are trying to push President Donald Trump's tax bill through this week despite a long-running battle over tax breaks and spending cuts that threatens their fragile majority. The government continued to push ahead, even after Moody's stripped the U.S. Federal Government of its top credit rating. They said that Congress and multiple administrations had not shown any political will to deal with the nation's $36.2 trillion debt. U.S. Stock Futures indicated a lower trading day on Monday following Moody's decision. Four conservatives who were adamant about spending cuts demanded more in private discussions with Republican leaders and White House officials. They voted in favor of moving forward in an unusual Sunday night House Budget Committee meeting. The next test will come at 1 am ET (0500 GMT) on Wednesday when the House Rules Committee decides whether to allow it to be put up for a vote in the full chamber. The House Rules Committee will decide whether it can be put to a vote by the entire chamber on Wednesday at 1 a.m. ET (0500 GMT). Republicans were divided on major issues, such as Medicaid cuts and limitations to the deduction of state and local tax. We'll have to meet with other members of the conference this week. "This bill is important to everyone, from moderates to ultra-conservatives, and all in between," said No. CNBC reported on Monday that Louisiana's 2nd House Republican Representative Steve Scalise. Analysts who are not partisan say that the bill will also add between $3 trillion and $5 trillion in debt to the United States over the next 10 years. House Speaker Mike Johnson wants the chamber to pass legislation and send it to the Senate by the U.S. Memorial Day weekend on May 26. Trump's Republicans have a majority of 220-213 in the House, but they are divided on how much to cut spending to offset the costs of tax cuts. So far the Republican-controlled Congress has not rejected any of Trump's legislative requests. Hardline conservatives demand that the Medicaid program, which provides healthcare to low-income Americans, be cut deeply and that the green tax credit is repealed completely. Moderate Republicans oppose this because they believe it will harm working-class and farmer voters who will vote in 2026's midterm elections. According to the nonpartisan Congressional Budget Office, the cuts in spending already proposed by the legislation will kick 8,6 million people out of Medicaid. MEDICAID WORK REQUIREMENTS Republican lawmakers are considering new work requirements for Medicaid recipients, but their debate centers on the timing of these requirements, Republican leadership advisers told journalists on Monday. Republicans and Democrats are at odds on the issue of the deduction of state and local tax, also known as SALT. This is a critical issue for a few incumbents in states like New York and California, which are crucial to the narrow majority of the Republican Party in the House. Hardliners claim that spending cuts must be made to counter Trump's tax cut. "The bill is not ready yet," said Chip Roy, a prominent conservative who was one of four hardliner representatives that voted "present" to allow the bill to advance on Sunday night. The Texas Republican stated in a post on social media that "we can and must improve before we pass the end product." The measure would extend Trump’s 2017 tax cuts – his signature legislative achievement of his first term – reduce taxes on certain tips and overtime earnings, boost defense expenditures and provide more funding for his border and Immigration crackdown. In Sunday TV interviews, Johnson and Treasury Sec. Scott Bessent downplayed the significance of the rating reduction. The speaker pointed to the action by the credit rating agency as proof that Congress must pass the Trump Bill quickly. The Senate Republicans have said that they will alter the bill, if the bill is able to pass the lower chamber. (Reporting and editing by Scott Malone; Toby Chopra, Alistair Bell and Scott Malone)
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Official French says Berlin and Paris have resolved their differences over nuclear energy
A French official confirmed a previous report that the new German government had signaled France it would no longer object to the EU treating nuclear energy on an equal footing with renewable energies. EU's largest economies have been in disagreement for years over whether or not to promote nuclear power to meet CO2 emission targets. This has delayed policymaking to combat climate change. France, with its 70% atomic energy, is the main nuclear champion in Europe. Germany, which phased out all its nuclear power plants, has seen it as low carbon but not renewable. The new German Chancellor Friedrich Merz has pledged a reset of relations with France. He has called the exit from nuclear energy as a mistake. An official from France confirmed an earlier report in the Financial Times that Germany was signaling its intention to drop its long-held antipathy towards nuclear power. This is the first tangible sign of rapprochement between France and Germany. The official referred to a Le Figaro editorial written by Merz in conjunction with French President Emmanuel Macron, published earlier in the month, wherein both leaders stated that their countries "would realign their energy policy based on competitiveness, sovereignty, and climate neutrality". They said: "This includes applying the principle technological neutrality and ensuring nondiscriminatory treatments of all low-carbon energy sources within the EU." The German Economy Ministry spokesperson declined to comment. The nuclear energy industry is booming in Europe. Belgium has passed a law to stop a planned phase out, and Sweden, as well as some other countries, are planning on building more reactors. (Reporting from Sarah Marsh in Berlin, and Michel Rose in Paris. Additional Reporting by Ludwig Burger at Berlin. Editing by Thomas Seythal and Jan Harvey.
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World Court supports Equatorial Guinea on islands dispute with Gabon
The International Court of Justice (ICJ), which has been resolving a dispute between Gabon and Equatorial Guinea for decades, ruled Monday that Equatorial Guinea had a claim on a group of small islands located in waters potentially rich in oil in the Gulf of Guinea. The ICJ (also known as the World Court) sided with Equatorial Guinea in its final and binding decision. It said that its claim to the islands based upon a 1900 agreement dividing French and Spanish colonial properties in West Africa, should be respected. The court ruled that a 1974 accord on which Gabon had based its claim to the islands was not a legal treaty. The title "that has legal force in relation to sovereignty over islands is the title that the Kingdom of Spain held on 12 October 1968 and which the Republic of Equatorial Guinea followed" was stated. The ruling requires Gabon to remove all its soldiers from Mbanie Island, a tiny island less than one kilometer long off the coast. In 1972, the Gabonese army expelled Equatorial Guinean soldiers from Mbanie. Since then, Gabon has established its own military presence in the 74-acre (30-hectare) island that is virtually uninhabited. The dispute between Mbanie, Cocotiers Island and Conga Island was forgotten until the oil boom in the Gulf of Guinea rekindled the interest. In 2016, after years of UN mediation, the African neighbours - both major oil producers - signed an agreement which would let the World Court decide the issue. Reporting by Stephanie van den Berg and Charlotte Van Campenhout; Editing and production by Andrew Cawthorne, Hugh Lawson and Hugh Lawson.
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After Moody's US downgrade, gold firms are seeing a surge in demand for safe-havens.
Gold prices rose on Monday as a result of a weaker dollar and heightened demand for safe-haven assets after Moody's lowered the credit rating of the U.S. Government. Spot gold increased 1% to $3.234.70 per ounce at 1050 ET (1450 GMT). U.S. Gold Futures rose 1.6% to $3237.80. Moody's downgraded the United States' credit rating from "Aaa to "Aa1 on Friday, citing "significantly higher debt and interest rates than similar rated sovereigns". "Overall, I think that gold will be a safe investment over the next few weeks considering the downgrade of the United States. Bob Haberkorn is a senior market strategist with RJO Futures. Wall Street's major indexes fell, while the U.S. Dollar Index hit its lowest since May 8. Gold becomes cheaper for holders of other currencies when the U.S. dollar is weaker. The financial markets were also a little rattled when U.S. Treasury Sec. Scott Bessent announced on Sunday that Donald Trump would impose tariffs on the same rate as he had threatened on April 2, if trading partners failed to negotiate "in good faith". Gold has reached multiple records this year, and it is up by 23.2% this year. Goldman Sachs has maintained its gold forecast at $3,700/toz for the end of this year and $4,000/toz in mid-2026. This is due to a modest amount of diversification by the private sector into gold. Trump will also speak with Russian President Vladimir Putin on the subject of peace in Ukraine, while European leaders have demanded an immediate ceasefire from Moscow to end this over three-year old war. Palladium rose 0.9% to $969.38, and spot silver increased 0.2% to $32.33. The World Platinum Investment Council reported that the demand for platinum jewellery has rebounded in China after a decade of decline. This is contributing to an even greater global deficit than expected this year. Platinum rose 0.4% to $991.76. (Reporting by Sarah Qureshi in Bengaluru; Editing by Emelia Sithole-Matarise)
Sources say that Shanghai Exchange is looking to open up domestic nickel contracts to foreigners in this year.
Two sources familiar with the matter have confirmed that the Shanghai Futures Exchange is looking at opening its domestic nickel contract to foreign investors in this year instead of launching a new contract on its International Energy Exchange.
ShFE has been exploring a more internationally-accessible nickel contract since at least 2023 as part of broader plans to build its global presence and challenge the dominance of rival the London Metal Exchange (LME).
ShFE, according to industry sources, also wants to provide an alternative to LME Nickel after the trading disaster in March 2022. The LME contract had been suspended for eight consecutive days and left the industry without global benchmark pricing for the metal that is used in electric vehicle batteries and stainless steel.
Two other attendees, who spoke on the condition of anonymity, said that ShFE will hold a two-day metals industry meeting in Shanghai this Thursday and Friday where nickel contract plans as well as other topics will also be discussed.
The LME Asia Week, which concludes on Wednesday, is bringing together a large part of the global metals sector.
Sources with knowledge stated that plans are being considered to open ShFE's existing domestic nickel contract to foreign institutional investors registered in China under the Qualified Foreign Institutional Investor Programme (QFII).
QFII status allows the international market trade Chinese markets. A broker source told us that China has around 900 QFIIs. About 200-300 companies registered since September 2022 are primarily interested in commodities.
In February ShFE opened a number of futures products, including stainless steel and petroleum fuel oil, to QFII Investors.
When contacted by the reporter, a senior ShFE official refused to answer any questions about this topic. After hours, ShFE did't immediately answer questions sent by email.
China Securities Regulatory Commission would have to approve any launch of domestic exchanges. According to a source familiar with its thinking, the commission has been encouraging exchanges to introduce international futures contracts in order to attract foreign investors.
The market confidence was shaken by 2022, when the nickel price rocketed above $100,000 per metric ton. On March 8, the LME canceled all nickel trades for which the hedge fund Elliott Associates sued it.
CME and ICE are also looking at cash-settled nickel derivatives, while Abaxx Technologies has launched a nickel sulphate contract this year.
(source: Reuters)