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Lynas Rare Earths claims it was involved in takeover discussions earlier this year
A spokesperson for Australia's Lynas Rare Earths said that the company was involved in takeover talks earlier this year, but they did not proceed. Three people said that the talks led Lynas, through Chairman John Humphrey, to suspend its search to find a new CEO for Amanda Lacaze, who retired from her position in June. Lynas plays a major role in developing a Western supply network for metals that are crucial to electric cars, wind turbines and defence systems. It's also a big draw for?Australia. The country has committed to being a key mineral supplier to its allies. Any acquisition by a foreign company must be approved by the regulators of that country. The spokesperson responded in a written statement to a question regarding the takeover discussions that took place earlier this year. Lynas held post-results discussion with investors in Sydney, Melbourne and Brisbane this week. Lacaze left the company on January 13. Humphrey explained to investors why the CEO search took so long. The investors spoke on condition of anonymity due to the sensitive nature of the matter. Humphrey, according to one investor, told him that the CEO search was suspended for 4 1/2 months. How could they not disclose? Another investor agreed. "It is not a short time." Lynas didn't mention in its statement whether the CEO search was suspended. Because the search process had not been completed before Lacaze's retirement, Lynas appointed Pol Le Roux as interim CEO. It said that the CEO search is still ongoing. DIFFERENTIATING SUPPLY CHAINS Lynas had previously been in merger talks with MP Materials, based in the United States. The talks ended in 2024 when the companies couldn't agree on an appropriate valuation. It wasn't immediately clear which company had been involved in the discussions this year. The Australian takeover laws stipulate that an 'listed company' is not required to reveal that the CEO search was suspended. The company is required to disclose the suspension only if it constitutes "market-sensitive information." The news of the talks came as top-developed economies around the world scrambled to support the development and diversification of supply chains away from China, the dominant producer. Lacaze's shoes are likely to be hard to replace. Over her 12-year tenure, she oversaw the 12-fold increase in the?share prices of the company as it grew to a $16-billion company. Lynas reported last week a significant increase in its annual profit. This was aided by a record-high average selling price for?rare earth oxide and a strong demand. However, it fell short of?market expectations. The company also stated that it would expand its global supply chain. It is currently in discussions with mine suppliers from around the globe and will support the development of an American magnet supply chain.
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UK bond yields reach new 18-year high, increasing pressure on Healey
British government bond yields reached new 18-year-highs on Wednesday, following a global sell-off in response to the latest escalation of Iran's war. This added to the challenge faced by finance minister John Healey as he prepares his first budget. The yield on the 10-year gilts reached its highest level since June 2008. It hit 5,268% shortly after 7am GMT, an increase of about 4 basis point on?the day. This is on top of a 15-bps rise on Tuesday. Investors are worried about the inflationary effect of the rising oil prices due to the return of the Gulf conflict. The increase in debt servicing costs for the government comes at a delicate time for Britain's newly appointed Prime Ministers Andy Burnham and Healey, who are preparing their first budget for October 28. Pantheon Macroeconomics economists say that the increase in gilt yields has reduced Healey’s margin of error when it comes to meeting the government’s goals for improving public finances. In a client note, they told clients that "higher interest costs have reduced fiscal headroom to about PS13 billion (18 billion dollars) from PS23.6 in the Spring Statement." The Chancellor must either raise taxes or cut spending by PS11 billion a year to restore the margin of headroom. The markets will be nervous as the 'budget' approaches and the government continues to'make spending commitments. The cost of borrowing for shorter-term periods also rose on Wednesday, with the five-year gilt rate reaching its highest level since October 2023. It increased by 4 basis points to 4.7534%.
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China reopens highway to Tibet's disaster zone
China has fully reopened a road leading to the Gyirong Border?crossing?into Nepal, one week after sections?were washed out by catastrophic flooding. Heavy machinery can now reach the main disaster area for the first. China airdropped equipment and supplies for frontline rescuers who had trekked through mountains to reach the site. Chinese state broadcaster CCTV reported that a large number of heavy machines, as well as equipment to strengthen search operations, have now arrived in the area where an inspection complex for the Chinese border once stood. CCTV showed footage of rescue crews and excavators and said that they had deployed rescue crews with life-detection equipment and?search dog's. The crews are hampered in their progress by the persistent rain, and difficult terrain. They have to work within a narrow mountain canyon, which is hemmed between unstable cliffs, and a swift-flowing river. The authorities, who have been monitoring the upstream lakes that could cause flooding if they burst said these risks have decreased but landslides are still a concern. Authorities in Nepal said that the hope of finding any more survivors was fading. Nearly 4,000 people are still missing and at least 1,114 have died. Over 30 Latvian tourists believed to be missing China's official death toll in Tibet has remained at 16 since Sunday, with 546 people still missing. This includes 104 Indians and 49 Nepali nationals as well as 33 Latvians believed to have been part of two tour groups. Karlis Eihenbaums said that the Latvian ambassador to China was in constant contact with the Chinese Foreign Ministry and authorities in Tibet for updates. He said that embassy personnel had not visited the Tibetan disaster scene because information from Nepal indicated that the missing Latvians may have been swept away to the Nepali-side. Many of the details about the tragedy in Tibet are only available from specific sources, mostly China's state controlled media. The Foreign Ministry cited the loss of access to roads and communications in the area, as well as the major safety risks posed by secondary disasters as reasons why it had not allowed foreign journalists to enter the 'disaster zones'.
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The FOREX Dollar reaches a two-week high. Middle East conflict, rate paths and the Middle East are in focus
The dollar reached a two-week peak on Wednesday, as investors flocked to the U.S. dollar amid growing concerns over the impact of the energy crisis and diverging monetary policies?across major economies. After the largest exchange of fire for weeks, the U.S. and Iran were back in a war-like situation on Wednesday. The dollar tends to gain from higher oil costs because the U.S. is less vulnerable to energy shocks compared to other major economies. This attracts demand to the detriment of currencies like the euro and the yen. The Federal Reserve faces a growing threat of tightening policy in 2027, even though most economists believe the European Central Bank is nearing the end of their tightening cycle following next week's much-anticipated rate hike. George Brown, Schroders' senior economist, stated that the ECB will finish its rate-hiking cycle by the end of the year while the Federal Reserve is likely to just be beginning. He added that Schroders was positioned to take advantage of a weaker Euro and expected the single currency to drop to $1.10 per dollar by the end of the year. A sell-off of?U.S. Treasuries, which are influenced by inflation fears and concerns over the fiscal trajectory of the United States can have a negative impact on the dollar. Rising debt levels and persistent pressures to reduce prices may also weigh down the dollar. assets. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) rose by 0.11%, reaching 99.76 after having reached 99.808, which was its highest level since August 17. The euro fell 0.16% to $1.1575 after reaching $1.1570 - its lowest level since August 20. The yield on the benchmark 10-year U.S. note reached a high of 4.812% - its highest since November 2023 - before falling to 4.804%. Japan's benchmark yield on the 10-year note extended its rally on Wednesday to 3.01% after reaching a milestone of three decades on Tuesday. According to CME Group’s FedWatch tool, the markets now price in a 70% chance of a Fed hike for September, up from 40% just a week ago. DOLLAR SLAVES BELOW 160-YEN After falling to its lowest level since July 31, the Japanese yen gained 0.45% to 159.50 dollars per yen. The yen was just above the psychologically significant 160-per-dollar barrier as markets weigh up the Bank of Japan rate path. BOJ Governor Kazuo Ueda said consecutive rate increases could be a possibility. The Treasury Department reported that U.S. Treasury Sec. Scott Bessent expressed strong support for "decisive monetary measures" to combat the yen's weakness during a meeting held with BOJ Governor Kazuo Ueda. The U.S. and Japan's rare joint intervention at the end July lifted the yen from its 40-year-low of 163,99, but it has since lost around half the gains made by the joint action. Tony Sycamore is a market analyst with IG. He said, "There seems little chance of a second round of coordinated intervention until the 'Strait of Hormuz' de-escalation takes some heat off of?the oil prices." Even after the central bank of New Zealand raised the official cash rate to 2.75%, the New Zealand dollar fell 1.01% to $0.5844. This is its lowest level since August 13. Analysts say market participants saw the decision as less hawkish that expected.
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Gulf Stocks Fall after US-Iran Exchange Strike
Gulf equities fell in the early trade on Wednesday, after the United States and Iran exchanged strikes over night. This dampened hopes for a rapid easing of tensions?in?the Middle East. Washington claimed to have carried out airstrikes overnight on Iranian targets, provoking a reaction from Tehran. This is the most serious escalation of tensions between the two nations in recent weeks. Iran's Revolutionary Guards claimed to have?fired missiles at an American military base in Jordan and alleged that they?had inflicted severe casualties. Iranian state media reported that a drone attack was also carried out on a U.S. military base in Bahrain as a retaliation to the U.S. attacks. Dubai's main index fell 0.6% with the majority of constituents in negative territory. Blue-chip ?developer Emaar Properties lost 1.3%, ?while toll-road operator Salik declined 1.1%. Qatar's benchmark fell 0.5% with almost all stocks trading lower. Industries Qatar dropped 1.2% while Qatar National Bank was down 0.5%. Saudi Arabia's benchmark stock index fell 0.3% due to a decline in utilities, healthcare and materials stocks. Saudi Arabian mining fell by 1.4% and ACWA Power by 1.3%. The National Shipping Company of Saudi Arabia and Rabigh Refining and Petrochemical Co. bucked this trend, both?increasing 2.1%. IFR reported that Saudi Arabia also raised $3.25bn through a two tranche sale of U.S. Dollar sukuks, its "second debt market transaction" this year. Orders were in excess of $15 billion and proceeds will be used to fund general budgetary requirements. Abu Dhabi's benchmark indices fell?0.7% led by shares in telecom, technology and industrial companies. First Abu 'Dhabi Bank, the UAE’s largest lender, dropped 1.3% while conglomerate Alpha Dhabi Holding fell 2%.
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What are Iran's options for retaliation as the US and Iran resume open warfare?
The United States launched another wave of attacks against Iran on Tuesday evening, six months after the conflict was declared deadlocked. This prompted Iran to fire missiles at what it called U.S. assets located in Jordan, Bahrain Kuwait and Iraq. Iran could retaliate in other ways if the conflict escalates or a U.S. The campaign to choke Iran's economic system intensifies. IRAN COULD 'EXPAND' ATTACKS on GULF STATES Iran has struck its neighbours repeatedly in response to U.S. strikes and has threatened to retaliate to anyone who takes part in U.S. attempts to strangle the economy of the country with "earthquake force". Since the beginning of the war on February 28, it has repeatedly targeted Jordan and Gulf states, focusing mainly on U.S. military bases. However, they have also hit energy infrastructures and other targets. Attacks on upstream oil and gas facilities could cause energy prices to rise, causing political damage to the Trump administration. It may also be more difficult to reverse attacks against shipping. The targeting of power and desalination plant in this hot, parched area would pose a serious risk to the U.S.-aligned Gulf countries that serve as important?financial centers for the global economic. IRAN COULD STOP MORE ENERGY LEAVING THE MIDDLE ESTATE Mohsen Rezaei is the former Revolutionary Guards Chief and Secretary of Iran's Supreme?National Security Council. He has threatened to stop oil exports, which was one of Tehran's major strategic approaches during the conflict. He stated that if the economic war continues, no oil will be shipped through the Strait of Hormuz and from anywhere else in the Persian Gulf. Iranian attacks and threats against shipping have already halted most traffic through Strait of Hormuz. This waterway carried a fifth of the world's energy prior to the conflict. Although some oil tankers passed through the Strait in recent weeks there is still a very small volume. During the six-month conflict, tankers attempting to leave the Gulf were repeatedly targeted by missiles, drones or speedboats. This has led to a rise in oil prices. The Houthi allies of Tehran have also restricted Red Sea shipping by threatening to block all Saudi Arabian shipping that carries crude oil to Asia via the Bab el-Mandeb strait, past the group's Yemeni base. According to industry sources, while the initial attacks only stopped a few vessels, more than half were still passing through'mid-August. The situation is 'difficult' for shippers, as Chinese shipping companies are now rerouting their ships away from Bab el-Mandeb. Additional attacks, like the one which targeted a vessel near the main Saudi Red Sea oil terminal in Yanbu, last week, or the drone strike near Suez Canal, early August, could increase oil market anxiety and crude oil price. IRAN COULD ATTACK WESTERN NATIONS DIRECTLY The Revolutionary Guards are willing to use alternative methods of attack, even though they cannot reach the West. U.S. officials said that Tehran is likely responsible for cyber attacks against water plants in Minnesota. Iran has not responded to these allegations. Western security services have also accused Iran recruiting locals to stage attacks in the West or try assassinations. Iran denies that.
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Strong dollar weighs down on industrial metals, causing copper and zinc to fall
Copper and zinc declined?on Wednesday as a stronger dollar and concerns?of higher interest rates for longer weighed down on the wider industrial metals complex. This offset support from tight supply. The benchmark three-month copper price on the London Metal Exchange fell 0.86% to $14,152 per metric tonne by 0700 GMT. Shanghai Futures Exchange's most traded copper contract fell by 1.35%, to 108.040 yuan (16,069.97 dollars) per ton. The dollar held steady after overnight gains as renewed hostilities erupted in the Middle East, pushing oil prices higher. Inflation concerns were revived and the bond market was sparked by a sale. Analysts from Sucden Financial wrote in a report that "base metals were under pressure due to the strong dollar and U.S. 10 year yield around?4.8%, which outweighed the support of tight physical conditions." The stronger the greenback, the more expensive commodities are for buyers who use other currencies. Data showing the?U.S. The factory activity in August slowed due to high input prices. This also affected demand expectations. In recent months, copper and zinc prices have been boosted by the tightening of supply. Both metals recorded their best month in August since January. LME zinc dropped 0.82% Wednesday, while SHFE Zinc was down 1.46%. Zinc marked for withdrawal means material under cancelled?warrants The highest level in over a year was reached on Tuesday when the tally of 30,875 tonnes. Base metals were also affected by the rising rate-hike expectations. According to CME's Fedwatch, rate traders now price in a 70% chance that the U.S. Federal Reserve is likely to raise interest rates during its September meeting. This was up from 37% just a week earlier. Kevin Warsh's hawkish remarks last Friday raised expectations of rate hikes. The impact of higher interest rates on metal demand can be felt by economic activity. Nickel dipped by 0.09%, and tin fell by 1.09%. Aluminium, lead, nickel and tin all fell on the SHFE.
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Sources say that aluminium producers are offering Japanese buyers lower Q4 premiums.
Four sources said that the top?global aluminum producers offered Japanese buyers a premium of $310-$325 per metric tonne for primary metal shipments in October and December, down by 18%-22% on the current quarter. Japan is the largest importer of light metals, and the premiums it agrees to each quarter for primary metal shipments over the London Metal Exchange cash price are the benchmarks in the region. Japanese buyers had agreed to pay a premium of $395 per ton for the period July-September The increase was between 12% and 13% compared to the previous quarter. A source from a Japanese trading firm said that the lower offers for October-December are due to a positive report on Middle East production, and softening premiums in Europe. The opening offers, while closer to "realistic" levels than the previous round, remained too high, given the weak spot prices, said another source from a Japanese rolling-mill. They added that buyers would be looking for a price below $300, as Asia's supply-demand balances are improving, in part due to increased Indonesian shipments. Aluminium stocks still at Japan's major ports According to Marubeni, the number of tons produced fell to a record low of 201,000 at the end July. Concerns over shipment disruptions due to the Iran war, coupled with strong demand for semiconductor-related products in Japan, ?continue to support the market, a producer source said. Because the discussions were private, sources refused to be identified. According to the?International Aluminium Institute, global primary aluminium production fell by 1.7% in July compared to last year, and Gulf production was down by 44%. In March, two smelters located in the Gulf region, which accounted for?9% global primary aluminum capacity, were attacked by Iran. This prevented them from exporting metal via their usual?channels. The quarterly negotiations between Japanese purchasers?and global manufacturers including Rio Tinto South32 and others began last week and will continue until the end of this month.
Chilean copper miner Codelco and contractors fined following deadly mine collapse
According to public records requests, Codelco, a state-owned copper miner in Chile, was fined after a deadly mine collapse last year at El Teniente. Three contractors, whose employees were killed or hurt, were also sanctioned more severely.
Six contract workers were killed and others injured in the aftermath of the underground earthquake that occurred on July 31, triggering a rockburst at El Teniente - the world's biggest underground copper mine.
The files were obtained from the Chilean labor ministry by means of open-records request. In Chile, fines of this nature are communicated directly to the employers. They can be challenged administratively or reduced, but they are rarely made public.
At the time, the then-Labor minister Giorgio Boccardo announced that his office, along with the mining regulator Sernageomin would investigate whether there had been any violations of labor safety rules.
A quake measuring about 4.3 on the Richter scale halted all underground operations in the vast mine complex, causing rescue efforts and safety checks.
Codelco incurred a large production cost as a result of the collapse. The company said that the slow restart of underground operations and the shutting down of underground operations in El Teniente reduced copper production by tens thousands of tons. This disrupted shipments during a period of tight global supplies.
The accident also highlighted the?geotechnical risk facing Chile's old underground mines.
Contractors fined more than CODELCO
The records reveal that the three contractors received fines totaling about $87,000, while Codelco only paid out $20,000, reflecting Chile's system of split liability for subcontracted works.
Under Chile's labor law, while the principal company, Codelco, can be penalized for a wide range of safety violations, contractors are directly responsible for reporting accidents, risk assessments, assigning workers, and other compliance obligations.
Labor inspectors found that Codelco did not have a written procedure describing how seismic warnings are used to determine whether or not work should be halted or restricted.
According to a separate record of sanctions, after the accident, regulators found that Codelco had violated labor laws when workers were seen entering or preparing for entry into underground areas, while the mine suspension was still in effect.
According to Chilean labor laws, serious or fatal accidents can result in fines of up to 150 UTM, a Chilean tax unit linked to inflation, or approximately $11,000 today. In a 2007 case, the regulator imposed a penalty of 340 UTM, or roughly $26,000 today, on a construction company following a fatal accident.
Workers' safety specialists and labor advocates have questioned if such small penalties are enough to deter major employers.
In 2011, after a mining accident, a Chilean House of Representatives investigation commission reported that it was essential to increase the fines to deter mining companies from violating safety regulations.
Since then, proposals to increase fines for workplace accidents that are serious or deadly have failed.
CODELCO DETAILS CHANGES
Codelco said that since the collapse it has tightened safety procedures to restart work at El Teniente. This includes adding safety briefings before shifts begin, improving communication underground, increasing checks on worker's locations, and reviewing protective gear.
Later, it was revealed that an independent panel headed by a former Anglo American chief executive officer was investigating what caused the accident. They were also looking at whether management problems or workplace issues played a part.
Codelco stated in a press release that the seismic alert system was activated on the day of accident and that the Labor Ministry fine had been appealed.
The company said that a "legal proceeding is ongoing related to the supervision of worker entry during work stoppage", and it was waiting for a ruling from the authorities.
Codelco announced in August that Andres Musik, the El Teniente mine's manager, would be leaving his position. In February the company announced the departures of three senior executives after an internal audit revealed inconsistencies or concealment in the aftermath of a rock explosion at the mine a few years ago.
SUBCONTRACTORS WILL GET LARGER FINES
Zublin, a Strabag subsidiary, was among the three contracting companies fined. It was for "failing to report an employee's death in 24 hours." Inspectors discovered that the company was aware of the death within two hours but did not notify the labor authorities until evening the next day.
The report stated that it is important to immediately notify the authorities to ensure safety for remaining workers.
The Austrian company didn't immediately respond to our request for comment.
SalfaCorp, a Chilean construction company, was sanctioned for a death in the Andesita mine sector. Inspectors found that the company did not immediately notify authorities of the fatal accident, among other violations.
SalfaCorp stated in a press release that "internal protocol have been reviewed and strengthened to further strengthen safety standards and compliance in all of its operations."
The company said that the sanctions related to the reporting process and the labor requirements, and had nothing to do with the cause of the accident.
Chile's labor regulator fined Constructora Gardilcic as well, the unlisted contractor who was responsible for the deaths and injuries of workers in the Recursos North area of the mine.
Inspectors found that the company failed to report the accident on time, filed injury reports late and had a poor safety plan.
The authorities also found that Gardilcic failed to adequately account for the risks of violent rock explosions outside designated danger areas and placed some workers into jobs they weren't cleared to perform.
Gardilcic didn't immediately respond to an inquiry for comment.
LONG ROAD Ahead
Codelco said that the areas most affected by the accident would remain under strict restrictions as criminal, regulatory and technological investigations continue.
The company has promised a gradual restart that will be approved by the regulator, but it is unclear when normal operations can resume at the mine. (Reporting and editing by Christian Plumb, Aurora Ellis and Kylie Madry)
(source: Reuters)