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Sources say that Lukoil wants to extend the grace period for US Treasury sanctions.
Three sources with knowledge of the situation said that the Russian energy giant Lukoil had requested an extension of the U.S. Treasury deadline, which prevents transactions with Russian companies after November 21. Last month, the U.S. Treasury Office of Foreign Assets Control announced new sanctions against Rosneft and Lukoil. This increased pressure on Russian president Vladimir Putin to end Moscow’s war in Ukraine. OFAC issued a license to all companies that allowed them until the 21st of November to finalize their deals with Lukoil. This included any purchases of international assets owned by the oil company headquartered in Moscow. Sources said that Lukoil wants an extension because it needs time to complete existing commitments, and study offers, for its vast global network of oil, gas, and trading assets. Lukoil and OFAC didn't immediately respond to comments. Lukoil - which is responsible for 2% of world oil production - confirmed on October 27 it was looking for buyers for its foreign assets. It could also seek an extension to the OFAC licence if needed. Gunvor, a Swiss commodities trader, had been approached by the Russian company to sell its international assets. However, this deal fell through earlier in the month when Washington signaled their opposition. Lukoil has faced increasing disruptions in its international operations since then. The company was forced to declare force majeure on Iraq's West Qurna 2 Oilfield, which is the largest asset it owns internationally.
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Carbon tax and Iceland's outage threaten to cause panic among EU aluminium buyers
After an outage in Iceland at a major smelter, European importers of aluminium are scrambling to secure supplies before the new carbon tax is implemented. This has pushed premiums up to their highest level in nine months. The European Aluminium Duty-paid Premium, which buyers pay on the physical market over the London Metal Exchange to cover taxes and freight, is currently $324 per ton. On November 3, it reached $330, the highest level since late January. Due to electrical failure, the 320,000-ton per year Grundartangi Smelter, owned by Century Aluminum in Iceland, reduced production by two thirds at the end of October. Century CEO Jesse Gary stated on a recent earnings call that it will take approximately 11-12 months to manufacture, ship and install replacement transformers. He also said the potline can be restarted earlier if the transformers are repaired. Iceland, with 241,412 tonnes of aluminum shipped in the first eight-month period of the year, was the second largest supplier of the EU. Mozambique was the top supplier, supplying 337.670 tons of aluminium to the EU. Importers of aluminum into the European Economic Area will begin paying a carbon tax under the EU’s Carbon Border Adjustment Method (CBAM), after a two-year period. However, they won't have to pay until 2027. IMPORTERS FRONT-LOADING ALUMINIUM AHEAD OF CBAM Edgardo Gelsomino of Wood Mackenzie Aluminium Research, in a conversation with traders, stated that importers were front-loading aluminum ahead of CBAM. He added that "along with avoiding carbon costs they also aim to reduce the burden of administrative work associated with the new regulations." CBAM charges, which are based on emissions from the aluminium smelter that produces the metal behind it, aim to set a fair price for carbon released during production. The CBAM charge will be applied to EU imports for iron and steel as well as cement, electricity and hydrogen. The metal produced by Norsk Hydro and Icelandic smelters, both part of the EEA region, will be exempt from the tax. Nick Ogilvie is the CBAM Lead at CarbonChain, a software provider that provides carbon accounting. He said that aluminium produced by Middle Eastern and Canadian Smelters will have a low cost per ton of between 10 euros ($11.66), to 50 euros, because they emit fewer direct emissions. Ogilvie continued, "But there are smelters that are using old technology and their products will not be entering the EU any time soon." ($1 = 0.8575 euros)
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Solvay signs two contracts to supply rare Earths to US magnet manufacturers
Solvay, a French chemical company, announced on Wednesday that it has signed two agreements to supply rare-earths to U.S. magnetic makers in order to expand its processing facility. Solvay is one of only a handful of companies outside China that can perform the difficult rare earths separation. In April, it began processing minerals for permanent magnets in its French facility. However, commercial production will depend on government and customer support. Separate statements stated that Solvay has concluded agreements to supply rare-earth oxides with U.S. firms Noveon Magnetics & Permag. In order to reduce dependence on China, the United States, Europe, and their allies are racing to develop domestic industries that can produce super-strong rare earth magnetic materials, which are vital to defence, electronic devices, wind turbines and electric vehicles. The private-held Noveon company has agreed to purchase elements NdPr, DyTb, and praseodymium from the privately-held firm. These are four of the key rare earths required for permanent magnets. An Nuyttens said that this collaboration was part of Solvay’s commitment to secure and sustainable rare earth supply chains in Europe and beyond. Texas-based Noveon started selling sintered neodymium, iron-boron (NdFeB), magnets in 2023. DEAL WITH PERMAG TO SUPPLY SAMARIUM OXIDE Less Common Metals, a British company, will convert the samarium oxide supplied by Permag into samarium alloy. Samarium can be used to create a magnet that is resistant to high temperatures and retains its magnetic properties. It is commonly used in nuclear reactor components and defence applications. Solvay CEO Philippe Kehren stated that although the agreements concerned "limited quantities", the plant at La Rochelle, where the company is located, could quickly increase production levels. Solvay is already able to produce NdPr, and will begin supplying these materials very soon. The CEO stated this on a conference call with journalists. "DyTb will take a few more months but we'll start around 2026," the CEO said. Kehren stated last week that Solvay was interested in building an ultra-rare earths processing facility in the United States where financial support would be stronger than in Europe. From our perspective, we can see that customers in the U.S. are ready to sign contracts today. Kehren, a reporter on Wednesday, said that Europe is not yet complete. "We're working to make it happen," he added. Customers in Europe understand the need for a long-term independent supply chain of rare earths in Europe. Nuyttens continued, "How and when this will happen will also be determined by the European Commission." (Reporting and editing by Ed Osmond; Tom Daly contributed additional reporting).
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Nigerian Dangote invests $1 billion in Zimbabwe
Aliko Dangote, the founder and CEO of Nigeria's Dangote Group, said that his company will invest at least one billion dollars in a pipeline in Zimbabwe as well as a power plant and cement factory. On Wednesday, Dangote, Africa’s richest man met Zimbabwe President Emmerson Munagwa, and signed an agreement for investment with the government. Dangote, speaking to reporters in Harare, said: "We just signed an agreement with Zimbabwe and the Dangote Group for various investments in different sectors. Some of these are cement production, power generation and pipelines to transport petroleum products." The pipeline will complement plans by the Dangote Group to build the largest oil refinery in world, he said. The industrialist visited Zimbabwe previously in 2015 under Robert Mugabe, who was then replaced by Mnangagwa following a coup in 2017. However, he abandoned plans to invest there for unknown reasons. When asked what had changed since his arrival, Dangote replied: "There have been quite a few changes." The government is stable, and there is much transparency. The Dangote Group operates in 17 African nations and Dangote Cement is one of the leading cement manufacturers on the continent.
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Alpine skiing-Frozen In Time: Levi's farmed Snow sets the stage for Shiffrin
Mikaela shiffrin, the American slalom champion who won Saturday's first World Cup race in Finland will be using recycled snow to win. Levi in Finland, located high up inside the Arctic Circle hosts World Cup races every year since 2004. The resort goes to great lengths to make sure that conditions are perfect. Finns are well-known for their reindeer farming, but what's more surprising is how they've mastered the art and science of snow farming. This technique could help ski resorts reduce the impact of climate change. The temperatures in Levi have dropped dramatically and the mountains and forests are now covered with snow. Levi was prepared even without the first big snowfall of the year, thanks to an automated system that had been tested in 2016 as a response to the 2015 cancellation of races. Snow is piled in large storage areas before spring thaws, and then covered with geotextile and Finnfoam insulation material to prevent it from melting in summer heat. This means that 70% of the snow farmed survives. In October, the snow is then pushed onto the slopes before it has a chance to freeze. This will form the base for the ski runs used on the weekends. Marko Mustonen told me by phone that the winter could arrive anytime between early October and mid-November. "Without the snow, a resort cannot function. To be ready for World Cup races we decided to harvest 15,000 cubic meters of snow 10 years ago. It worked well and we were able to prepare a good foundation. We now farm about 40,000 cubic meters, which allows us to build the base as well as secure the racecourse. We're getting better every year at reducing the amount of snow that we lose. Mustonen, who is a Levi employee, says that Levi has made significant investments in the most energy efficient snow-making equipment. By reusing snow from previous years, Levi can save energy and water, which are both high when producing man-made snow. It's snowing in Levi, but the base for the course this weekend will be made from 100% recycled snow. It could be older than that. Shiffrin is the skier who has most enjoyed the conditions in Levi. She has won eight World Cup races there, and each win has earned her another reindeer. The first one, Rudolph, still lives on a farm near the resort. They are Sven, Mr. Gru. Ingemar. Sunny. Lorax. Grogu. She may have to come up with another name on Saturday, as she aims for her 102nd World Cup win and 65th overall in the slalom, which is her specialty. Mustonen added, "She visits her friends every year. Let's see if there is a new one this weekend." (Reporting and editing by Andrew Cawthorne; Martyn Herman)
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China's Vice Premier attends the launch of Simandou Iron Ore Project in Guinea
China's official Xinhua News Agency reported that Vice Premier Liu Guozhong visited the Simandou Iron Ore Mine Project in Guinea this past week. The project, which is 75% owned by China, will be the largest iron ore mine in the world, with a production capacity of 120 million tons per year. It will also be key to the green transformation in the global steel industry. Xinhua reported that the Chinese vice-premier called the project a result of the friendship and cooperation of China with Guinea and Africa for nearly 70 years. He added that the project would contribute to Guinea’s economic growth and its implementation of the "Simandou 2040” strategy. Two of Simandou’s four mining blocs are controlled by the Singapore-Chinese Winning Consortium Simandou consortium, and the remainder by Rio Tinto SimFer. This joint venture is a partnership between global mining giant Rio Tinto and Chalco Iron Ore Holdings, as well as the government of Guinea. The state-owned China Baowu Steel Group is the largest steel producer in the world by production. Key shareholder Rio Tinto SimFer is indirectly owned by WCS, and Rio Tinto SimFer shares are held directly by WCS. Simandou ore with a 65% iron grade targets the premium segment for green steels that are less carbon intensive. According to a post on the company's Facebook page on Tuesday, Baowu Chairman Hu Wangming stated that the project will provide green raw materials to the steel industry globally and in China, as well as give Guinea a boost.
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Gold prices edge up as traders wait for US House vote on ending federal shutdown
Gold prices rose on Wednesday ahead of a vote in the U.S. House of Representatives to reopen government, which could resume the flow of economic information and pave the way for the Federal Reserve's decision to lower interest rates by December. As of 09:41 am (1158 GMT), spot gold was up by 0.3%, at $4,137.95 an ounce. U.S. Gold Futures for December Delivery rose by 0.7%, to $4.143.30 an ounce. Gold is still holding its recent gains, as the House votes today to end the shutdown of the federal government. Recent price movement would suggest that any delays in House approval would cause stocks and precious metals both to tumble quickly," said Tai Wong an independent metals dealer. Wall Street opened with the Dow reaching a new record, as investors cheered the likely end of the longest U.S. Government shutdown. The Republican-controlled House of Representatives is due to vote later in the day on a deal to end the longest government shutdown in U.S. history. The 42-day government shutdown has had a negative impact on the economy, and the government's data is no longer available. This has led policymakers and the markets to use private indicators to assess the state of the U.S. economy. ADP's latest weekly data on jobs showed that private employers lost an average of 11,250 positions per week over the last four weeks, ending October 25. This indicates a continued weakening in the labor market. According to CME Group’s FedWatch tool, traders now expect a rate cut of 25 basis points at the Fed’s December meeting. Gold that does not yield tends to perform well when interest rates are low and economic uncertainty is present. Analysts at SEB Research wrote in a report that "Gold has been consolidating for a while around $4,000/oz, but the trend is still up." The path of least resistence for gold is higher levels, unless global liquidity tightens suddenly or the dollar breaks higher for a sustained period. Other than that, silver spot gained 1.8%, to $52.16 an ounce. Platinum rose 0.3%, to $1.589.18, and palladium increased 0.1%, to $1.445.70. (Reporting and editing by Leroy Leo in Bengaluru. Noel John is based in Bengaluru.
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Guinea plans to launch a Simandou-backed Wealth Fund in the second quarter of 2026
Guinea's planning minister announced that the country plans to launch a sovereign wealth fund in the second quarter 2026, with a $1 billion initial investment. The West African nation is leveraging influx of revenue from its massive Simandou Iron Ore Mine. The fund will invest long-term income from resource projects, such as the Simandou Project launched this week, in education, infrastructure, agricultural and industrial sectors, protecting the economy against commodity price fluctuations. Ismael Nabo told journalists in Conakry's capital that he would put a portion of the revenue he received into the sovereign wealth fund. This will help him raise more money to invest and increase his investment. Use mining windfall to smooth out the volatility Guinea is the largest bauxite supplier in the world and has been growing its gold and lithium exports. According to the International Monetary Fund, Simandou's annual production is projected to reach 120,000,000 metric tons high-grade ore between 2030 and 2039. This would add government revenues equal to 3,4% of GDP. This compares to total mining revenue equivalent to 2.2% GDP in 2022. Nabe says that despite the growing dependency on natural resource incomes, investing the windfall in a wealth fund can help Guinea reduce fiscal volatility associated with erratic commodity price fluctuations. He said that the fund would be modeled after global models such as Singapore's Temasek or Malaysia's Khazanah. Good governance, he added, will also be crucial. Guinea is currently governed by a military government and has consistently been ranked in the bottom third on Transparency International’s Corruption Perception Index. The legal framework is crucial. "We've received advice from Saudi Arabia, Singapore and other countries to ensure robust governance," Nabe stated. He added that Guinea is currently hiring a CEO for its fund. PLANS TO ISSUE SUKUKS, DIVERSIFY ECONOMY Funds backed by natural resources in African nations such as Botswana, Angola, and others have helped stabilize budgets and finance the infrastructure of these countries. Nabe stated that Guinea's fund would be supported by reforms to plug fiscal leakages and boost domestic revenue streams. The mine is part of "Simandou 2040", a 15-year plan to use the mine as a catalyst for progress in infrastructure and finance, while also enhancing human capital. Nabe stated that the government is also looking at Islamic finance instruments such as sukuks, as well as partnerships between sovereign funds and other financial institutions to raise market funding. S&P Global Ratings gave Guinea its first sovereign rating in September - B+, with a stable outlook. Nabe stated that Guinea's goal is to increase the share of tourism and fisheries in its GDP from less than 1 percent to 4% within six years. It also aims to boost telecoms by 8%. Nabe stated that if we managed to implement reforms properly, our GDP could reach a level similar to South Africa or Morocco. Maxwell Akalaare Adombila reported; Veronica Brown, Joe Bavier and Joe Bavier edited.
Lukoil attracts buyers for its foreign assets
The foreign assets of Russian oil giant Lukoil, which are located in Egypt and Kazakhstan, are attracting bidders. Time is running out for the deals to be completed before U.S. sanctions can be enforced. As part of their efforts to get the Kremlin into peace talks on Ukraine, the U.S. has imposed sanctions on Lukoil. They have already blocked Lukoil’s attempts to sell foreign assets before the deadline of November 21, sanctions. Lukoil has also been affected by the sanctions in Iraq, Finland at pump stations and Bulgaria in a refinery. Governments and partners want to buy its foreign assets cheaply as its empire crumbles. Lukoil did not respond to comments.
CIRCLE OF BIDDERS
KazMunayGas, the state-owned firm of Kazakhstan, is examining a bid to acquire Lukoil assets in the country. Two sources with knowledge of the matter confirmed this.
Lukoil, Eni, Shell, Chevron, and KazMunayGas all have a stake at Karachaganak - one of the largest gas and condensate field in the world.
Kazakhstan's Energy Ministry said that any new partnership would be decided by project participants taking into consideration the sanctions.
Two other sources have confirmed that Shell is interested Lukoil’s deepwater blocks located in Ghana and Nigeria. Shell has declined to comment.
A fifth source with knowledge of the situation reported that Lukoil had indicated to the Egyptian government its potential plans to sell. Lukoil has three concessions in Egypt. Egypt's Petroleum Ministry did not respond to a comment request.
Serdgiu Spoiala, director of the Chisinau Airport, said that the government of Moldova had begun talks to nationalize Lukoil’s infrastructure. Bulgaria is getting ready to take over Lukoil’s Burgas Refinery. Azerbaijani state company Socar and Cengiz Holding from Turkey bid jointly for the refinery prior to the sanctions.
Turkish media this week reported that Cengiz intends to move forward with the deal. Cengiz did not immediately respond to an inquiry for comment.
LUKOIL'S OPTIONS
Lukoil is faced with difficult decisions, according to Sergey Vakulenko. He was a former director of strategy for Russian oil company Gazprom and a senior fellow in the Carnegie Russia Eurasia Center.
The U.S. Treasury could freeze the proceeds if the company sold its assets.
Vakulenko and Igor Yushkov, from the Financial University of Russian Government, both said that delaying action could result in the state taking over some assets or freezing them.
"There is no need for Lukoil's to hurry," said Yushkov. If assets are frozen then they will remain frozen. Wait until the conflict in Ukraine is over, then perhaps sanctions will be lowered. "That's probably the lesser of two evils."
Lukoil could try to copy the strategy of Rosneft - a Russian oil company whose three refineries were placed under German trusteeship by 2022. Berlin controls the plants, but Rosneft owns them.
Vakulenko explained: "Either sell the item yourself and hope to get the proceeds or try to keep ownership." Reporting by Anna Hirtenstein in London and Enes Tunagur in Moscow. Mohamed Ezz is Cairo. Shariq Khan is New York. Isaac Anyaogu is Lagos. Alexander Tanas, Chisinau. Tamara Vaal, Astana. Dmitry Zhdannikov, Mark Potter and Dmitry Zhdannikov edited the article.
(source: Reuters)