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Rosneft has taken control of Russia's biggest rare earth deposit.
Rosneft, the country's biggest rare earth metal deposit and largest oil company, acquired Tomtor on Wednesday after President Vladimir Putin urged the development of this field to be accelerated last year. Tomtor is located in the northern part of Siberian Yakutia region. It's a major project for Russia to increase production of metals used in the defense industry, mobile phones, and electric cars. Rosneft, according to the official Russian state registry, took control of Vostok engineering, the project operator, on May 20, 2018. Rosneft didn't immediately respond to a comment request. In November, Putin accused Tomtor's operator of delaying its development and suggested that it either raise investments or seek assistance from third parties including the government. Prior to the Ukraine conflict, Russia had planned to invest $1.5 Billion in rare earth minerals to become the second largest producer of rare earth minerals after China by 2030. Other countries such as the United States are also trying their best to reduce their dependence on China. China controls 95% global production and supply for rare earth metals. Through his IST group, Alexander Nesis was a former shareholder of Polymetal, a large producer of gold, silver and other metals. He owned a 75% share in ThreeArc Mining. Polymetal owned a 9.1% stake of ThreeArc Mining. After the Russian military intervention in Ukraine and the subsequent Western sanctions against Russian companies, Vladislav Resin's former manager at IST was given control of the project before Rosneft took it over. (Reporting and editing by Guy Faulconbridge; Anastasia Lyrchikova, Vladimir Soldatkin)
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Nyrstar, a company in Australia, seeks government funding to produce antimony
Matt Howell, CEO of Nyrstar (owned by Trafigura), said that the company, which is owned by a global commodity trader, could produce antimony in its South Australian plant, but it would require government assistance to do so. After China, the largest antimony producer in the world, implemented export controls in 2013, there is a high demand for new supplies of this strategic metal. It's used in the production of night-vision goggles and infrared sensor, among other things. The company stated that as part of Trafigura's strategic review of Nyrstar Australia operations, Nyrstar discovered it could produce up to 5, 000 tonnes of antimony or trioxide per year at its Port Pirie multi-metals plant by adding a second processing step after lead smelting. Matt Howell, Nyrstar's CEO, said: "We are able to produce critical minerals such as antimony in order to meet the global demand." "However, significant investments and assistance will be required to address the unsustainable pressures on the market that Australian smelters face," he stated in a May 5 statement. Howell didn't specify how much funding the government would need to support production at the Port Pirie facility or when it could start producing antimony metal. The smelters in Australia are suffering from high power costs at home and a surplus of processing capacity available in China, which has pushed down the prices they can charge for material. The Australian Government is offering billions in funding for critical mineral processing. A spokesperson for the South Australian government said, "Antimony has been defined by the Australian Government as a critical mine. This provides a path to access substantial support from government." He said that complex refineries are key to the economy of South Australia.
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Iran and the U.S. face each other without a Plan B when nuclear redlines collide
While rising U.S.-Iran tensions over Tehran's uranium enrichment jeopardize nuclear talks, three Iranian sources said on Tuesday that the clerical leadership lacks a clear fallback plan if efforts to resolve a decades-long dispute collapse. With negotiations faltering over clashing red lines, Iran may turn to China and Russia as a "Plan B", the sources said, but with Beijing's trade war with Washington and Moscow distracted with its war in Ukraine, Tehran's backup plan appears shaky. "The plan B is to continue the strategy before the start of talks. Iran will avoid escalating tensions, it is ready to defend itself," a senior Iranian official said. "The strategy also includes strengthening ties with allies like Russia and China." On Tuesday, Iran's Supreme Leader Ayatollah Ali Khamenei rejected U.S. demands to halt uranium enrichment as "excessive and outrageous", warning that the talks are unlikely to yield results. After four rounds of talks aimed at curbing Iran's nuclear programme in return for sanctions relief, multiple stumbling blocks remain. Tehran refuses to ship all of its highly enriched uranium stockpile abroad or engage in discussions over its ballistic missile programme, two of the Iranian officials and a European diplomat said. The lack of trust on both sides and President Donald Trump's decision to pull out of a 2015 accord with world powers has also raised the importance for Iran of getting guarantees that Washington will not renege on a future accord. Compounding Tehran's challenges, Iran's clerical establishment is grappling with mounting crises - energy and water shortages, a plummeting currency, military losses among regional allies, and rising fears of an Israeli attack on its nuclear sites - all exacerbated by Trump's hardline policies. With Trump's speedy revival of a "maximum pressure" campaign on Tehran since February, including tightened sanctions and military threats, the sources said, Iran's leadership "has no better option" than a new deal to avert economic chaos at home that could threaten its rule. Nationwide protests over social repression and economic hardship in recent years, met with harsh crackdowns, have exposed the Islamic Republic's vulnerability to public anger and triggered sets of Western human rights sanctions. "Without lifting sanctions to enable free oil sales and access to funds, Iran's economy cannot recover," said the second official, who like others asked not to be identified due to sensitivity of matter. Iran's foreign ministry was not immediately available for comment. A THORNY PATH Wendy Sherman, former U.S. Undersecretary for Political Affairs who led the U.S. negotiating team that reached the 2015 accord between Tehran and six world powers, said it was impossible to convince Tehran to "dismantle its nuclear programme and give up their enrichment even though that would be ideal". "So that means they will come to an impasse, and that we will face the potential for war, which I don't think, quite frankly, President Trump looks forward to because he has campaigned as a peace president," she said. Even if enrichment disputes narrow, lifting sanctions remains fraught. The U.S. favours phasing out nuclear-related sanctions, while Tehran demands immediate removal of all restrictions. Dozens of Iranian institutions vital to Iran's economy, including its central bank and national oil company, have been sanctioned since 2018 for "supporting terrorism or weapons proliferation". When asked about Iran's options if talks fail, Sherman said Tehran would likely "continue to circumvent sanctions and sell oil, largely to China, perhaps India and others". China, Iran's primary oil buyer despite sanctions, has helped stave off economic collapse, but Trump's intensified pressure on Chinese trade entities and tankers threatens these exports. Analysts warn that China and Russia's support has limits. China insists on steep discounts for Iranian oil and may push for lower prices as global oil demand weakens. If talks collapse - a scenario both Tehran and Washington hope to avoid - neither Beijing nor Moscow can shield Iran from unilateral U.S. and EU sanctions. France, Britain and Germany, though not part of the U.S.-Iran talks, have warned they would reimpose U.N. sanctions if no deal emerged quickly. Under the 2015 nuclear pact's U.N. resolution, the E3 have until October 18 to trigger the so-called "snapback mechanism" before the resolution expires. According to diplomats and a document seen by , the E3 countries may do this by August if no substantial deal can be found by then. Diplomats warn that getting a deal before then would mean, in the best case scenario, an initial political framework like in 2013 whereby both sides offer some immediate concrete concessions giving time for a more detailed negotiation. "There is no reason to think it will take less time than the 18 months in 2013 especially when the parameters and the geopolitical situation is more complicated now," a senior European official said. (Writing by Parisa Hafezi and John Irish; Editing by Stephen Coates)
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Dollar slips, stocks fall as Trump's tax cuts fuel fiscal concerns
Investors worried about the fiscal outlook of major developed economies, and the lack progress in trade agreements. The result was a muted stock market and a weaker dollar on Wednesday. After a CNN report that Israel was planning a strike against Iranian nuclear facilities, oil prices increased by more than 1%. This raised supply concerns outside of the Middle East's key producing region. It also brought geopolitical issues back into focus. Investor sentiment is fragile after Moody's downgraded United States' credit ratings last week, fueling concerns about the country's debt pile of $36 trillion. U.S. president Donald Trump has proposed tax cuts which could increase the debt by up to $5 trillion. The lack of progress in U.S. Trade Talks is also a concern, as trading partners are pressing Washington to reduce or eliminate tariffs. Early trading saw the STOXX index of major European stocks fall by 0.2%, while U.S. futures showed a lower opening on Wall Street. Treasury yields are still high, and the 30-year Treasury bond yield has reached 5%. The dollar was not spared as investors fled to safer currencies such as the Swiss franc and the Japanese yen. "People are considering moving capital outside the U.S., and while it is not a mass-exodus, people are once again looking at opportunities in other markets," said Chris Weston. Investors looked for these opportunities in Asia. MSCI's broadest region index outside Japan rose 0.8% to a new seven-month high. Dollar selling in Asia accelerated, pushing the yen and euro to their highest levels in two week. The pound reached a new high of three weeks and bought $1.3428 at the last exchange rate. The British inflation rate jumped from 2.6% to 3.5%, a higher than expected annual rate. The markets were also watching the Group of Seven Finance Ministers' meeting currently taking place in Canada, for any indications that a weaker currency could help advance trade discussions. Investors on the Japanese bond markets remained nervous after the steep drop in super-long debts during the previous session. The yields on longer-dated debt hovered at record highs Wednesday. Questions were raised about how the country would fund new fiscal stimuli, as the central bank tried to normalise its monetary policy. Data released on Wednesday revealed that Japanese exports to the U.S. rose in April, even though shipments fell. This highlights the impact President Donald Trump's new tariffs may have on Japan's fragile economic recovery. Analysts say that any progress in trade deals between the U.S. with its trading partners could increase risk appetite. However, there are concerns Trump’s policies may still harm the global economy. Officials from the U.S. Federal Reserve said on Tuesday that prices are rising due to higher U.S. tariffs. They advised patience before making interest rate decisions. The dollar fell on Wednesday, and investors moved to safer assets. Gold spot was up 0.7% to $3,311 an ounce. This is the highest price in over a week. (Reporting from Lawrence White in London and Johann M Cherian in Singapore. Editing by Jamie Freed and Sonali Paul. Sharon Singleton).
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Iron ore prices rise on the back of a softer US Dollar and steady demand
Iron ore futures were up on Wednesday due to a weaker dollar and a resilient demand for this steelmaking ingredient. However, weakness in China's real estate sector limited gains. The daytime trading price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 728.5 yuan (US$101.10) per metric ton. As of 0704 GMT, the benchmark June iron ore traded on Singapore Exchange was trading at $99.85 per ton. Hexun Futures, a broker, said that the demand for iron ore exceeded expectations. This is due to the fact that steel mills are still operating at a high level. According to Mysteel a consultancy, the number of blast-furnace mills that are profitable is increasing. 60% of them reported profits last week. The U.S. Dollar, which has been falling for the past two days, also helped to support iron ore prices. The greenback is cheaper to those who hold other currencies. The market was also weighed down by China’s disappointing retail sales and slowing manufacturing output, as well as the stagnation of new home prices. "While a sustained rebound looks unlikely on the medium-term, the sharp contraction of the Chinese property market seems to have slowed," stated ANZ. It said: "This bodes very well for steel demand in peak construction season." In China, spring is the peak season for construction. This is before rains begin in June. Mysteel reported that the volume of iron ore shipped from mines in Australia and Brazil increased by 11.7% on a weekly basis to 27.1 millions tons. Coking coal and coke, which are both steelmaking ingredients, fell by 0.36% and 0.14 %, respectively, on the DCE. The Shanghai Futures Exchange saw a rise in most steel benchmarks. The Shanghai Futures Exchange saw a 0.2% increase in hot-rolled coil, 0.08% for stainless steel, and 0.07% for rebar.
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Battery shifts to nickel and cobalt as a result of the energy storage boom
Fidra Energy's plan to convert a 55-acre patch of countryside in northern England into Europe's biggest energy storage facility, a 1,45 gigawatt one once complete, was far from finalized when it acquired the land in 2023. Chris Elder, CEO of the Edinburgh-based firm, said, "We struggled to make economics work." The cost of the batteries used in this project has been roughly halved over the last 18 months. Fidra plans to begin installing battery units in its Thorpe Marsh 600-million-pound ($800 million) project next year. LFP batteries have fueled a boom in energy-storage projects, which - in terms of percentage - has now surpassed the growth in electric vehicle sales. UBS estimates that total storage capacity will have to grow eight-fold before the end of the decade, and 34-fold until 2050 in order to keep pace with the growth of renewable energy. According to an energy transition consultancy, Rho Motion, while EVs will still dominate the battery market, energy storage is expected to make up a fifth of it by 2030. Analysts say that tariff uncertainty will cause growth in the U.S. to slow down in the coming years. The U.S. is the second largest energy storage market in the world, and it's still dependent on Chinese imports. But the long-term growth remains intact. This is good news for renewables and should help national power grids maintain a balanced supply of electricity as they transition to cleaner sources of energy, avoiding the type massive blackouts that briefly crippled Spain in the last month. LFPs are a much more affordable alternative to traditional batteries, and they do not contain cobalt or nickel. This rapid adoption is sending shockwaves throughout the markets that already have a depressed state. Martin Jackson, a commodities consultant at CRU, said: "You have seen a truly massive shift in the intensity of use for nickel and cobalt as compared to battery demand." NICKEL AND COBALT DECLINE Analysts predicted for years that the battery industry would require huge amounts of cobalt and nickel to make high-powered batteries that allow EVs travel long distances without charging. This forecast sent EV prices soaring for a while. Production increased in anticipation of a surge in demand, especially for the top nickel exporter Indonesia and cobalt-exporting Democratic Republic of Congo. The lack of affordable EVs and the slow deployment of charging infrastructure has slowed EV adoption among consumers outside China. This has led some automakers to scale back on their electrification plan. Oversupply has caused nickel prices to fall by half over the last three years, while cobalt prices have fallen by 60%. Global EV sales grew by 23% in 2018. According to Rho Motion the demand for storage battery has risen by 51% and is expected to grow by 40% in 2019. LFP batteries are the most common type of energy storage. They're essential for greener power grids, which will help governments achieve their net-zero goals. These batteries are increasingly used by Chinese EV manufacturers, including BYD - which last year surpassed Tesla to become the largest seller of EVs in the world. According to CRU data, as a result of this, the use of nickel in batteries for EVs, consumer electronics and storage batteries has decreased by nearly a third during the next four years, and by about two-thirds with cobalt. Prices for both metals are likely to be further impacted by the increasing pace of LFP adoption. Lithium could, however, see a rise. Iola Hughes, from Rho Motion, said: "The share that stationary storage plays in the battery demand picture has grown very significantly. It is becoming increasingly important to lithium players as EV demand is slower than expected." This has not yet translated into a stronger market, as the oversupply is pushing down already low lithium carbonate prices by another 20% this year. Beyond Price LFP batteries are not just about price. Fidra's Elder stated that recent technological advancements in LFP batteries have resulted in Thorpe Marsh LFP batteries having a life expectancy of 20 years. This is up from the previous 10-15 years. Lars Christian Bacher CEO of Norway's Morrow Batteries said that the change is also driven by concerns about the carbon intensity and rights issues relating to the cobalt mined in Congo. He said that there are high expectations for battery suppliers to be able to trace the origins of their products. "Some of these mineral have been historically associated with... countries which have some questions related to human right issues, child labor." Lithium also faces increasing scrutiny due to indigenous rights and environmental concerns, although this hasn't garnered as much attention from the public as nickel and cobalt. Morrow plans to produce 3 million cells, or 1 gigawatt-hour of capacity, per year. According to the British energy regulator, fully charged, this is roughly enough to run 1 million homes an hour. Batteries are being produced by existing manufacturers. LG Energy Solution, a South Korean company, is expanding its business in energy storage to offset the slowdown of EV demand across North America. An industry source in Asia said that the company plans to stop producing EV batteries containing Nickel at one U.S. facility and repurpose them for LFP battery manufacturing. Analysts expect that the shift to LFPs will only strengthen China's grip on the sector. 90 percent of the energy storage batteries in the United States are imported from China. Analysts say that Washington's tariffs against Chinese batteries - which are currently 41% during this 90-day truce in the trade war - will likely affect short-term demand. Fidra's Elder said that while Europe also wants to reduce its dependency on China, governments must be pragmatic. His Thorpe Marsh project, which uses batteries manufactured by China's Sungrow Power Supply company, relies on Sungrow Power Supply's Sungrow Power Supply batteries. He said that if the British government is serious about achieving its net-zero target for the UK – and I believe it is – it will have to work pragmatically with China.
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ONS: UK inflation jumps higher than expected to 3.5% in April
Official figures released on Wednesday showed that British inflation rose to 3.5% annually in April, up from 2.6%. In a poll of economists, a reading of 3,3% was predicted for April. The Bank of England had projected an inflation rate of 3.4% earlier in the month. Gas, water, and electricity prices all increased in April, along with taxes for employers. In a recent statement, the BoE stated that inflation will peak at 3,5% in this year. Some central bank officials disagree with the key assumption, that the rise in inflation won't have long-term effects on pricing behavior. Huw Pill, BoE's Chief Economist, said that the rate of interest rate reductions had been too rapid given the still high wage pressures and inflation. However his vote to hold borrowing costs this month was more likely to be a "skip" than a stop. Interest rate futures indicate that there is an 85% probability that the BoE won't cut interest rates next month. By the end of the year, less than two 0.25-percentage-point cuts are priced in. In a split vote on May 8, the BoE cut interest rates by one quarter point, to 4.25%. Two members of its Monetary Policy Committee voted for a larger cut and two, including Pill, voted against it. (Reporting and editing by MuvijaM; Andy Bruce)
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IEA: Low diversity of critical mineral markets can hurt the industry
The IEA warned in a Wednesday report that the concentration of the mineral market, especially in the refining, processing and export restrictions sectors, could lead to painful disruptions. In recent years, the use of critical mineral has increased due to energy transition projects, such as electric cars, battery storage, renewables, and grid networks. The industry has also consolidated into a few large players. Fatih Bibil, Executive Director of the IEA, said: "Even if a market is well-supplied, supply shocks can still be a problem, whether they are caused by extreme weather conditions, a failure in technology or trade disruptions." He said that a supply-shock can have a far-reaching impact, leading to higher prices for consumers as well as a reduction in industrial competitiveness. The IEA stated that the average share of top three suppliers will decline marginally to 82% by 2035, returning effectively to the levels of concentration seen in 2020. China, which is the dominant player in the industry, will continue to expand its refining capability at a faster rate than the rest the world until 2035. It has also added to the global battery recycling capacities by two thirds since 2020. The IEA stated that this high concentration of minerals increases the supply shock risk on the global market, particularly with the increasing number of export controls on critical mineral. The mining industry is also expected to follow a similar trend. Copper, nickel, and cobalt are likely to be less diverse, while lithium, graphite, and rare earths will see fewer concentrations. The IEA stated that the current copper mine project pipeline could lead to a 30% shortfall in supply by 2035, due to declining ore grade, increasing capital costs, limited resources discoveries, and long lead time. The rapidly increasing demand for lithium as part of the energy transformation is expected to push market deficits by 2030. However, the prospects for developing new projects are better than those for copper.
Sources say that RPT-China’s CMOC has called on Congo to lift the cobalt export prohibition.
Three sources said that China's CMOC group, the world's largest cobalt mining firm, called on the Democratic Republic of Congo to lift a current export ban for battery metal due to expire in the next month.
Congo, which is the world's largest cobalt producer, implemented the four-month-long ban in February to try to reduce surpluses after cobalt prices reached a nine-year low of around $10 per lb or $22,000 per metric ton.
Sources said that CMOC Vice President Kenny Ives, during a closed session at an industry conference in Singapore, told delegates that Congo should remove the export restrictions on metals, which are an important component in batteries for electric vehicles.
Sources who heard Ives speak said that Kizito Pakabomba, the Congo Mines Minister, was present at the session. Congo kept the market guessing about its next move when the ban expires on June 22, according to sources. Sources told the media in February that the government might extend the suspension, and also consider export quotas.
Sources who requested anonymity due to the sensitive nature of the issue said that Ives had said China's inventory of pipelines was running low and Congo should allow its miners to export cobalt freely.
Ives said that Congo's restrictions of cobalt exports could accelerate automakers' shift to lithium iron phosphate batteries (LFP), which do not require cobalt.
BYD and other Chinese electric vehicle manufacturers have already adopted LFP battery technology, which is also used in utility-scale energy storage.
Two sources claim that Congolese officials who were present at the event perceived Ives' mention of LFPs as an act of threat. One source said that the remarks reinforced officials' fears that China was trying to lower cobalt prices to build strategic stockpiles.
Officials from the Congo, including Pakabomba did not reply to phone calls or emails asking for comments.
CMOC's spokesperson Vincent Zhou refused to comment on Ives remarks or questions about Congo's fears of stockpiling but stated that the company is in favor of a "healthy marketplace environment".
According to LSEG, Chinese electric vehicle batteries maker CATL has a 30% stake at CMOC.
CMOC is expecting to produce between 100,000 and 112,000 metric tons of Cobalt in 2019, which is roughly twice the amount produced in 2023. This will be due to its increased activity at its Tenke Fungurume copper and cobalt mining operations in Congo.
GLENCORE BACKS EXPORT CURBS Traders from Glencore, another major cobalt miner said that the market needed a stable price to lift the export ban and producers like Congo and Indonesia had to manage the oversupply.
Glencore has declined to comment.
Sources said that Glencore traders in Singapore stated the company would accept an quota system if the Congo government chose to implement it. Shirley Wang, General Manager of Shanghai Metals Market said that Chinese smelters had built up stocks to last for between two weeks and 6 months.
One source said that Congo is currently evaluating and considering the impact of this ban, and proposals from mining companies, and other players in the market. She added that the negative side of stopped exports would be a loss of revenue for the government.
Benchmark Mineral Intelligence stated in a press release that the most likely scenario is either an extension of this ban, followed by an introduction of export quotas or a transition directly to export quotas starting late June.
Both scenarios will likely support pricing. Reporting by Felix Njini from Johannesburg and Pratima Dasai from London; editing by Veronica Brown, Joe Bavier and Joe Bavier
(source: Reuters)