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Malaysia is seeking foreign partners to develop the rare earth sector. State media reports
Malaysia welcomes foreign companies to form joint ventures to develop rare Earths in the nation, according to state media on Wednesday. The report was based on the Trade Minister. According to estimates by the government, Malaysia has 16.1 million tons of rare earths, but does not have the technology to mine or process them. Malaysia wants to build midstream processing capability in a market dominated by China. China tightened export restrictions earlier this month. Exclusively, earlier this month, it was reported that the government is in talks with China about rare earths processing. The Malaysian sovereign fund Khazanah Nasional will partner with a Chinese company to build a Malaysian refinery. Anwar Ibrahim, Prime Minister of Malaysia, announced in his budget speech for 2026 to the parliament on 10 October that 10 million ringgit (2.37 million dollars) would be allocated by the government to continue mapping rare earth resources. Khazanah will also look to develop downstream activities through international collaborations. Bernama, the state news agency, reported that Tengku Aziz Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengkul Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengkku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tengku Tenzafrul Teng He was quoted saying, "We would like to invite more Malaysians to invest in Malaysia, both in terms the supply chain and in terms economic interests. This means having equity and shares in this venture." Tengku Zafrul said that Malaysia's ban against companies exporting rare earths will force them to establish operations within the country. He said that the ministry of trade had not yet received any proposals for the establishment of new processing plants in the country. Tengku Zafrul said that the government would not stop Lynas Rare Earths of Australia, which operates a processing facility in Malaysia's central Pahang state, from exporting its products to any market of their choice.
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Sources say that the new Japanese PM is planning a large-scale economic stimulus in order to combat inflation.
Sanae Takaichi, the new Japanese Prime Minister, is working on an economic stimulus package which is expected to be larger than last year's $92billion to help families combat inflation. Government sources familiar with this plan told Reuters that it is being prepared to surpass last year's $92billion. Takaichi, who advocates big fiscal expenditures, took office Tuesday. This is her first major economic initiative. It reflects her commitment to "responsible fiscal policy". Sources declined to identify themselves because it was a private matter. They said that the plan will be built on three main pillars - measures to combat inflation, investments in industries of growth, and national safety. The Nikkei 225 index of Japan's shares reversed its losses on Wednesday after the report. Meanwhile, the yen was barely changed from the morning. Investors closely monitor her spending plans, as Japan is among the most indebted countries. The Takaichi government plans to quickly abolish the provisional gas tax rate as part of its core measures for inflation relief. The program also aims at expanding local government grants with an emphasis on small and medium-sized businesses that cannot benefit from the existing tax incentives to increase wages. As the government concentrates on economic development, it will include investments in sectors of growth such as artificial Intelligence and semiconductors. Sources said that the exact size of the package was still being finalised. The announcement could come as soon as next month. In order to fund these measures, the government has begun drafting the supplementary budget that will cover the current fiscal year up until March. It is hoped it will be passed during the next extraordinary session of parliament. If the additional spending exceeds expectations, it may be necessary for the government to issue bonds to cover deficits, which raises questions about how best to balance economic growth and fiscal discipline. Shigeto Nakai, Oxford Economics' head of Japan Economics, said that the plan is "consistent with Takaichi’s policy list (during the campaign for the ruling party’s leadership race)." Nagai said that it's no different than previous administrations who used the extra tax revenue generated by higher inflation to fund large supplementary budgets for vulnerable households rather than aiming to achieve a primary surplus. Takaichi became Japan's first woman prime minister Tuesday. The parliament vote pushed down the yen, and bond yields as investors hoped Takaichi would delay any further interest rate increases by the Bank of Japan. Takaichi, a longtime supporter of the "Abenomics", or stimulus policies of Shinzo Abe, has called for increased spending and tax reductions. He also pledged to assert government control over the central banks, which are weighing further interest rate increases and will be holding their next policy meeting October 29-30. She said that monetary policy is a part of an economic policy broader than the one for which the government has final responsibility. A news conference was held on Tuesday. The BOJ decided the specifics of the monetary policy.
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Miner Boliden's Q3 earnings beat market estimates
Boliden reported that its core earnings for the third quarter were lower than expected due to higher precious metal prices. The Swedish miner also reiterated its investment plans through 2025. Boliden’s operating profit for the quarter, excluding revaluation costs of its process inventories, dropped to 2.75 billion Swedish crowns (US$292.07million) from 3.0 million in the previous period. The average consensus estimate of 2,48 billion crowns provided by the company was beaten by this figure. In a statement, Chief Executive Mikael Stas stated that "despite the fact that there is still much uncertainty in the global situation, I believe the situation has become more stable." Boliden stated that the quarter's performance was aided by higher metals prices, particularly gold and silver. This was coupled with a higher volume of milled ore in the mines, and less planned maintenance at smelters. The price of Gold reaches $4,000 per ounce Investors sought cover in October for the first ever time, amid geopolitical unrest. In a statement, the company, which is primarily known for its copper and zinc outputs, stated that gold and other metals were now its third and forth most important metals in terms of its earnings. The group has maintained its forecast of capital expenditure for 2025 at 15.5 billion crowns.
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Norway's wealth fund increases net zero emissions pressure amid US climate rollback
Norway's $2 trillion fund, which invests in companies, is increasing pressure to reduce greenhouse gas emissions by net zero in 2050. This stands in stark contrast to the U.S. growing backlash against climate friendly policies. In 2022, the fund set out its first goal to bring all 8,500 companies under its portfolio into line with the Paris Agreement targets. It will include more companies in its updated climate plan that it considers to be the most polluting. These will be targeted for a more focused discussion. It said that "Climate Risk is Financial Risk." The fund has an interest in a smooth transition to net zero global emissions. NORWAY FUND CONTRASTS TO INTENSIFY US CLIMATE BACKLASH The updated guidelines of the fund come at a moment when international investors are moving away from ESG policies in climate change. The Trump administration, led by President Donald Trump, is boosting the production of fossil fuels, rolling back climate policy at home and working against climate initiatives overseas, including withdrawal from the Paris Climate Agreement. About half of the fund's value or $1 trillion has been invested in bonds, stocks and real estate. The fund previously focused mainly on emissions that come from sources controlled or owned by a business, and those from electricity and heat purchased. In its new plan it will also concentrate on Scope 3 or value chain emission, produced anywhere in the supply chain of a company. These emissions are the majority of those produced by many companies. Discussions on Climate Change with Company Boards The plan stated that companies "with the highest Scope 3 emission" would be added to a list of targeted companies for a direct, more focused dialogue on climate changes. The plan stated that "We will focus board-level interaction on climate with companies listed on the Climate Focus List." The fund didn't name the companies that might be affected, and it wasn't immediately clear if its management would take punitive actions against laggards. In general, the fund prioritizes dialogue with companies. The plan that was presented on Wednesday differs from the separate ethical guidelines established by Parliament, which led to regular divestments of the fund. Norges Bank Investment Management, the fund's operator does not decide on many of these divestments, even though they have often been made for environmental reasons.
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Sweden's SSAB exceeds earnings expectations in the third quarter
SSAB, a Swedish steelmaker, reported a higher-than-expected rise in its operating profit for the third quarter on Wednesday. This was despite a cautious atmosphere on the European steel markets and the limited impact of U.S. steel tariffs. Operating earnings increased to 1.87 billion Swedish Crowns ($198.61m) from 1.25 billion crowns in the period July-September, compared with 1.25 billion crowns one year ago. A consensus poll by SSAB revealed that analysts were expecting an average of 1.75 billion Swedish crowns. SSAB's US sales are largely based on local production, limiting the impact of President Donald Trump's new import duties. CEO Johnny Sjostrom explained this in a press release. He added that certain products, such as high-strength alloy steels for the automobile industry, were exported from the Nordics. Trump's first trade measures targeted steel and aluminum. In March, tariffs were imposed of 25% on the majority of imports. This was increased to 50% in June for most countries.
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Gold prices rise on bargain-hunting and a weaker dollar
Gold prices rose Wednesday due to a weaker US dollar, bargain hunting and a rebound from a steep loss the day before. Investors are now focusing on the delayed Friday release of U.S. September inflation data. As of 0521 GMT, spot gold was up by 0.5% to $4,145.35 an ounce. Bullion dropped more than 5% Tuesday, its steepest decline since August 2020. U.S. Gold Futures for December Delivery climbed 1.2%, to $4.159.60 an ounce. Gold is now cheaper for holders of other currencies due to the dollar index's 0.1% decline. The Federal Reserve will use the September U.S. Consumer Price Report, which is expected to be released on Friday, as a guideline for its interest rate reduction path. Due to the U.S. shutdown, this report is delayed. Matt Simpson, senior analyst at StoneX, said that the "simmering" tensions in trade between the U.S. This is a simple technical repositioning of a market which clearly needed a pullback following an extended move over $4,000. I believe we have seen the worst day-to-day fluctuations as dips are still likely to be purchased." U.S. president Donald Trump said he expects to reach a fair deal with Chinese president Xi Jinping next week when they meet in South Korea. He also played down the risk of a conflict over Taiwan. The Mint newspaper in India reported that New Delhi and Washington were close to completing a long-stalled agreement to reduce U.S. import tariffs from 50% to 15% or 16%. The gold price has risen by 56% in the past year. It reached a record high of $4,381.21 yesterday, thanks to geopolitical, economic, and central bank uncertainty, as well as rate-cut betting and sustained central bank purchases. According to a survey of economists, the Fed will cut its key interest rate next week by 25 basis points and again in December. However, opinions are still divided about where rates will end up by next year. Silver spot edged up 0.5% to $49.95 an ounce. Platinum fell 1.1% to 1,534.20, and palladium rose 1.4% to $1427.13. (Reporting and editing by Subhranshu sahu, Ronojoy Mazumdar and Brijesh patel in Bengaluru)
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Sources say that the new Japanese PM is planning a large-scale economic stimulus in order to combat inflation.
Sanae Takaichi, the new Japanese Prime Minister, is working on an economic stimulus package which will likely exceed last year's $82 billion in order to help families combat inflation. Government sources familiar with this plan told Reuters that it is expected to be more than double what was spent by households to fight inflation. Takaichi, who advocates big fiscal expenditures, took office Tuesday. This is her first major economic initiative. It reflects her commitment to "responsible fiscal policy". Sources declined to identify themselves because it was a private matter. They said that the plan will be built on three pillars - measures to combat inflation, investments in industries of growth, and national safety. The Nikkei 225 index of Japan's shares reversed its losses on Wednesday after the report and rose. Meanwhile, the yen was unchanged and had only made gains in the morning. The Takaichi government plans to quickly abolish the provisional gas tax rate as part of its core measures for inflation relief. The program also aims at expanding local government grants with an emphasis on small and medium-sized businesses that cannot benefit from the existing tax incentives to increase wages. As the government concentrates on economic development, it will include investments in sectors of growth such as artificial Intelligence and semiconductors. Sources said that the exact size of the package was still being finalised. The announcement could come as soon as next month. In order to fund these measures, the government has begun drafting the supplementary budget that will cover the current fiscal year up until March. It is hoped it will be passed during the next extraordinary session of parliament. If the additional spending exceeds expectations, it may be necessary for the government to issue bonds to cover deficits, which raises questions about how best to balance economic growth and fiscal discipline.
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Morning bid Europe-Inflation will wipe out UK's rate-cutting bets
Rae Wee gives us a look at what the European and global markets will be like tomorrow. The Bank of England's (BoE), which is expected to cut rates again this year, will likely be disappointed if the consumer prices in Britain are higher than expected. The BoE expects the inflation rate in September to be 4%, which is the highest of all the big economies around the world and twice the BoE target. The markets currently price in a chance of nearly 15% that the central banks will ease rates by 25 basis point at their November meeting. A positive surprise in the Wednesday figures will almost certainly wipe out these bets. This would also cloud the central bank's rate outlook into the end of the year, as policymakers are divided between those who wish to take aggressive action in order to counter the slowing down of the job market and others who are concerned about the persistent inflation pressure. A majority, however, is in favour a gradual rate cut. The rapid pace of UK price increases, which continue to put pressure on households and raise borrowing costs, adds to the challenges facing Finance Minister Rachel Reeves. She has promised to ease cost-of living pressures and accelerate economic growth. Reeves, who is trying to reach her fiscal goals and avoid disappointing investors that have already driven up borrowing costs in Britain sharply, has indicated she will increase taxes and reduce spending as part of her budget plan for November 26. Investors were also reeling in other markets from the sudden drop in gold prices that has stopped the metal's explosive rally, despite the lack of an obvious cause. Asian shares also declined, but Japan's Nikkei recovered from its early losses and traded higher following a report that Sanae Takaichi is preparing a stimulus package for the economy that will likely exceed last year’s 13.9 trillion ($92.19) billion yen to help consumers tackle inflation. Money managers from around the world are returning to Japan's debt and stock markets because of its reflationist promises and to diversify away from more expensive U.S. or European markets. The following are key developments that may influence the markets on Wednesday. UK Inflation (September) - Barclays, Tesla earnings
Sources say that Rio Tinto is considering an asset-for equity swap with Chinalco in order to resolve the governance gridlock.
Rio Tinto has been exploring the possibility of an asset-for equity swap with Chinalco, which would reduce the Chinese investor's stake from 11% to 9%, allowing Rio to resume its buybacks, and pursue new deals.
Sources said that the state-owned mining giant Aluminium Corporation of China Limited would exchange a part of its holding in return for partnerships with some of Rio’s mining assets. This would end governance restrictions which have hindered the flexibility of the Anglo Australian company for more than 15 years.
The swap could enable Rio to allocate more capital and pursue mergers, acquisitions, and other strategic initiatives. This would align Rio with the broader trends in the industry, where global miners are using consolidation and new projects as a way to attract investors who focus on long-term prospects for supply.
RIO ASSETS INTERESTING CHINALCO
Beijing's expansion into the copper market is gaining attention as Western governments try to catch up to China's dominance of critical mineral supply chain.
Fourth source: The Simandou iron-ore project in Guinea is of particular interest to Chinalco, as it's already 75% Chinese owned and was the target of Chinalco’s failed 2016 purchase attempt. Also, the Oyu Tolgoi Copper Mine in Mongolia would also be of interest.
One source said that Rio's Titanium business could be a possible candidate for a swap. The company is currently undergoing restructured as part of the new chief executive Simon Trott's strategic review.
China, the top consumer and producer of titanium dioxide (used in paints, cosmetics, and military hardware) in the world, has increased its output in the last decade to dominate more than half the global market.
Chinalco declined to respond to our request for comment.
Fourth source: The swap could reduce Chinalco's share by 2 to 3 percentages points. This would allow Rio to pursue buybacks and large M&A transactions, as well as restructure capital, without diluting the largest shareholder.
GOVERNANCE CONSTRAINTS
Chinalco purchased a nearly 15% stake in Rio Tinto Plc in 2008, under Canberra's conditions, which included no increase in stake without approval, and no seat on the board. Its share in the company is approximately 11%.
Chinalco then proposed an investment of $19.5 billion to reduce Rio's debt of $39 billion, in exchange for which it would receive minority stakes in the global portfolio. Other shareholders and regulators blocked the deal over concerns that China would control strategic assets.
Today, activists are pushing Rio to drop its dual Anglo/Australian listing. They argue that this creates conflicts of governance between UK and Australian investors, and complicates the mergers with firms in states which have restrictions on strategic ownership by Chinese companies.
Update on RIO Reorganization is expected soon
Trott is pushing for tighter control of costs across the group.
After taking over the presidency on August 25, he announced that Rio would reduce its business structure from four to three core units, focusing on profitable assets.
Two sources have said that a further update regarding the reorganisation may come in the next two to three weeks, before Rio's Investor Day scheduled for December 4.
Two sources say that Trott, in addition to reviewing Rio's borates and iron businesses, is also considering divestments. This includes pausing the early work on the Jadar lithium project, which is located in Serbia. Environmental groups have opposed the project for years, despite it being deemed strategic by the European Union.
The sources stated that no further cuts are expected to the leadership team of Rio after Trott reduced its executive committee from 11 to nine members. One source said that the number of managing director is likely to decrease, as each will be asked to outline their department's cost-cutting measures rather than meeting a company-wide fixed target. (Reporting from Clara Denina Melanie Burton Ernest Scheyder. Amy Lv contributed additional reporting. Mark Potter and Veronica Brown edited the article.
(source: Reuters)