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Ukraine and the U.S. discuss ways to make a minerals fund operational within a year
Ukraine's Yulia Shvyrydenko said that the United States and Ukraine have discussed ways to make the minerals fund operational before the end of this year. The fund's initial meeting is scheduled for July. Svyrydenko signed the agreement in Washington, after months of hard negotiations, which made the terms more favorable for Kyiv. The agreement was heavily promoted by U.S. president Donald Trump. The Ukrainian parliament then ratified this agreement. Svyrydenko met with U.S. Treasury Sec. Scott Bessent on Wednesday and the Development Finance Corporation which will be the partner of the Minerals Fund. "We discussed very concrete steps to make this fund functional during this year," Svyrydenko told reporters. We will have our first board meeting in July to discuss the seed capital needed to operate this fund. We should also adopt the investment strategies for this fund over the next few decades. Negotiations leading to the signing of the Mineral Fund deal were preceded by a heated discussion between Trump and Ukrainian president Volodymyr Zelenskiy at the White House about how to end Ukraine's war with Russia, which has lasted for three years. Zelenskiy's ability to repair his relationship with Trump was dependent on the agreement. In April, the two men briefly met at the Vatican during the funeral for Pope Francis in order to get their relationship back on track. Reporting by Gram Slattery, Costas Pitas and SonaliPaul; Editing by Ron Popeski & SonaliPaul
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UN: Southwest Pacific to be hit by unprecedented marine heatwaves in 2024
The UN's weather agency said that in 2024, unprecedented heat waves in Southwest Pacific will affect more than 10% the surface of the ocean, damaging coral reefs, and placing the last tropical glacier in the region at risk of extinction. In an annual report, the World Meteorological Organization stated that the average 2024 temperature in the region (which includes Australia and New Zealand and southeast Asian island countries like Indonesia and the Philippines) was nearly half a degree Celsius higher than the mean temperatures between 1991 and 2020. Blair Trewin of WMO, who is one of the authors of the report, said that "much of the region experienced at least severe conditions of marine heat waves at some point in 2024," particularly near and south the equator. The report stated that extreme heat in 2014 affected 40 million square kilometers (15.4 million sq miles) of ocean and new temperatures were recorded in Australia and the Philippines. Ocean surface temperatures broke records as well, and the total heat content of the ocean was second highest on average behind 2022. In October and November, the Philippines was also hit by an unprecedented number of cyclones that experts attribute to climate change. The report also noted that sea levels are continuing to rise faster than the global average. This is an urgent issue in a region with more than half of its population living within 500 metres (547 yards), or less, from the coast. Satellite data also showed that the only tropical glacier in the region, located on the western side of New Guinea island, Indonesia, shrank up to 50% during the past year. Thea Turkington of the WMO, one of the authors of the report, said: "Unfortunately, the rate of glacier loss is so high that this glacier may disappear by 2026, or soon thereafter." (Reporting and editing by Stephen Coates; David Stanway)
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Peru restarts mining operations in the violence-hit North
Walter Astudillo, the Defense Minister, said that Peru has resumed formal mining operations for parts of northern Peru affected by violence. Dina Boluarte, the president of Colombia, suspended mining operations in her country last month after illegal miners kidnapped 13 gold workers and killed them. The incident occurred in the district of Pataz located to its north. Peru is the third largest copper producer in the world. Most of its red metal deposits are found in the southern part of the Andean country, while gold and other precious metals are mined to the north. Astudillo stated that the decision to resume operation was made after discussions with Pataz authorities and formal mining companies. He also noted the importance of the sector to the local economy. He said that the public was demanding mining activities at a post-cabinet meeting press conference. The minister said that the government has extended the state-of-emergency in Pataz by another 60 days. This will allow the armed forces take control of the region. Companies and small-scale or artisanal miners who have valid permits will be able to resume mining operations. The REINFO program allows temporary activities while formalization is completed. He added that activities will be allowed from 5 am to 10 pm local time. (Reporting and writing by Marco Aquino, editing by Sarah Morland, Alistair Bell and Sarah Morland)
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China's new tracking system increases scrutiny of rare earth magnets
Three sources confirmed that China has implemented a tracking system in its rare earth magnet industry, as export restrictions are beginning to isolate customers from around the globe. Two sources briefed on the issue and two others familiar with it said that the national tracking system went into effect this week and requires producers to provide extra information online, including trading volume and client names. China, the world's biggest rare earth magnet exporter and supplier, in April, placed export restrictions on several magnets and seven medium-to-heavy rare earth elements. Exporters were required to obtain licenses. The delays in getting approvals has disrupted supply chains, affecting automakers, semiconductor firms and others. Global automakers have already begun to shut down some production lines, as they run out of reserves. Beijing announced high-level plans in June to create an information tracking system for rare earths products. However, the subject was not mentioned again until this week, according to a source familiar with the issue. China's export restrictions on rare earths, magnets, and other products - in which it has a near monopoly - may become permanent. In the U.S., and elsewhere, there was hope that this would be eliminated as part of the trade truce reached in Geneva last week. Exports tend to gradually rebound in cases where China has placed export restrictions on metals. This is because exporters have applied for and received licences. Tim Zhang, the founder of Edge Research in Singapore, said: "Our current hypotheses is that China will continue to control its exports on rare earths as it's an ace card China can hold." Beijing's goal is to strengthen its control of the sector and crackdown on illegal mining, smuggling and tax evasion. A fourth source, who was also briefed about the issue, said that Beijing has a long-term plan to track all rare earth production chains, not just magnets.
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US stock market ends mixed as Treasury yields fall amid trade negotiations and jobs data
Wall Street was a little shaky and U.S. Treasury rates dropped on Wednesday, as investors watched the U.S. Trade Negotiations and looked forward to Friday's important employment report. The Nasdaq was modestly boosted by tech, while S&P 500 closed the session basically flat and the Dow ended slightly lower. The dollar dropped and gold rose. Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. He said that the big rate move has provided some relief, if not directly for stocks, then at least to those who have been trying to explain why rates are moving higher. The equity markets are relieved that rates still seem to have a limit in this type of environment. The U.S. and European trade talks are moving forward, Europe's chief negotiator stated. He noted that the doubling in U.S. tariffs on metals, which took effect Wednesday, does not help negotiations. China's restrictions on vital mineral exports has upset global automakers who claim shortages could halt global supply chain. Trump, who is expected to meet with Chinese President Xi Jinping soon, called Xi "extremely difficult to deal with" in a post on social media. This suggests that a quick resolution of the trade dispute between the two world's largest economies may prove elusive. Investors remain confident or as confident as possible that the administration will not let things go too far. Mayfield said that the administration would not return to its April 8 low. Mayfield stated that "I do not necessarily believe that the TACO trade (Trump Always Chickens Out), is wrong. It's obviously a joke. But there are enough signs that suggest that if the Trump administration reverts to their worst tendencies in trade and tariffs then the market would react accordingly." ADP, a payroll processor, reported that the U.S. Private Sector added 37,000 new jobs in the last month. This is 69.2% less than what analysts expected to see on Friday from the Labor Department, which will release a more comprehensive report. Survey data also showed that the U.S. service sector contracted last month. Prices paid, an inflation indicator, reached their highest level since November 20,22. The Dow Jones Industrial Average dropped 91.90, or 0.22 %, to 42 427.74. The S&P 500 rose by 0.44, or just 0.01% to 5,970.81 while the Nasdaq Composite increased 61.53, or 3.32 %, to 19,460.49. After Berlin approved a tax relief package for corporations, European stocks rose and Germany’s benchmark index reached a new record high. This was despite survey data showing that euro zone business activity is stagnating and Germany’s services sector has posted its biggest contraction in over two years. The MSCI index of global stocks rose by 2.85 points or 0.32% to 888.75. The pan-European STOXX 600 Index rose by 0.47% while Europe's broad FTSEurofirst 300 Index rose by 9.84 points or 0.45% Emerging market stocks increased 14.71 points or 1.27% to 1,172.84. MSCI's broadest Asia-Pacific share index outside Japan closed up 1.3% at 618.16. Japan's Nikkei gained 300.64 or 0.80% to 37,747.45. Dollars fell across the board, as a series of downbeat economic reports suggested a softening in labor market conditions. The services sector also showed signs of contraction. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.29%, falling to 98.87. Meanwhile, the euro rose 0.36%, reaching $1.1411. The dollar fell 0.78% against the Japanese yen to 142.87. The yields on longer-dated U.S. Treasury bonds fell after the weaker-than-expected data. Investors looked for signs of progress with tariff negotiations, and were looking ahead to the payrolls reports. The yield on the benchmark 10-year U.S. notes dropped 10.1 basis points from 4.46% at late Tuesday to 4.359%. The 30-year bond rate fell by 10.2 basis points, from 4.983% to 4.8806% late on Tuesday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve fell by 8.6 basis points, to 3.871% from 3.957% at late Tuesday. Crude oil prices fell as U.S. inventories were higher than expected, adding to the supply concerns amid tensions in trade and OPEC+ production increases. U.S. crude fell 0.88%, settling at $62.85 per barrel. Brent closed at $64.86 a barrel, down by 1.17% for the day. The gold price rose, supported by a soft dollar. Investors waited for employment and trade data. Spot gold increased by 0.62%, to $3372.86 per ounce. U.S. Gold Futures rose by 0.64% to an ounce of $3,371.50.
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The Nazca Lines in Peru are now at risk of mining after a protected area was slashed
The Peruvian government has reduced the area of protected land around the famed Nazca Lines. Critics and archaeologists are concerned that this could make the ancient geoglyphs more vulnerable to nearby informal mining operations. The Peruvian Culture Ministry reduced the protected area from 5,600 square kilometers to 3,200 last week. It attributed the decision to topographical studies and archeological investigations that better delineated areas of "real patrimonial values." Over 800 large desert etchings depicting animals, geometric figures, and plants were created over 1,500 years ago. UNESCO designated them a World Heritage Site in 1994. According to the Energy and Mines Ministry, 362 small scale gold miners are operating in the Nazca District as part of the program to regularize the status. The authorities have conducted previous operations to combat illegal mining. Pieter Van Dalen is the head of Peru's archaeological association. He said that the main threat to the Nazca Lines was informal mining in the surrounding area and within the protected zone. He described the reduction as "very regrettable" and questioned the claim that the original area had been too large to be controlled. Police and industry sources claim that with gold prices at record highs, the government's program to regulate small-scale mining (known as REINFO) is riddled with irregularities. Illegal miners are also accused of exploiting REINFO in collusion with criminal groups. Congress and the Administration are scrambling to come up with a new program that will close operating loopholes. The small-scale miners protested against an earlier deadline because they feared that there would be little time for them to normalize their operations. According to the government, illegal mining in Peru generates revenue of more than $3 billion per year, which is greater than that generated by drug trafficking. On Tuesday, Energy and Mines minister Jorge Montero confirmed that small-scale mining takes place in Nazca. He said that the government was "evaluating the impact of this (reduction) on the status of small scale and artisanal miners working in the area which used to be part of Nazca’s (protected zone) but is now not." Peru's gold exported in 2024 will be $15.5 billion, up from the $11 billion of the previous year. According to data from the industry and Peru's financial regulator, around 40% of Peruvian gold exports come from illegal sources. (Reporting and editing by Aurora Ellis; Marco Aquino)
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US stocks rise, Treasury yields fall as investors focus on tariff talks and jobs data
Investors watched the U.S. Trade Negotiations and awaited Friday's important employment report. The dollar fell and gold remained unchanged. Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. He said that the big rate move has provided some relief, if not directly for stocks, then at least to those who have been trying to explain why rates are moving up. The equity markets are relieved that rates still seem to have a range of possible increases in this type of environment. U.S.-European The top European negotiator noted that trade talks were progressing. He also pointed out that the U.S. tariffs on metals have doubled since Wednesday. This is not helping negotiations. China's restrictions on vital mineral exports has caused concern among global automakers. They warn that shortages could disrupt global supply chains. Trump, who is expected to meet with Chinese President Xi Jinping soon, called Xi "extremely difficult to deal with" in a post on social media. This suggests that a quick resolution to trade disputes between the two world's largest economies may prove elusive. Investors remain confident, or as confident as possible that the administration will not let things go too far. Mayfield said that the administration would not return to its low point of April 8. I don't think that it is necessary to believe in the existence of God. (Trump always chickens out) trade is wrong. Obviously, it's just a joke. But there are enough signs that suggest if the Trump administration returns to their worst tendencies in terms of trade and tariffs then the market would react accordingly," Mayfield said. ADP, a payroll processor, reported that the U.S. Private Sector added 37,000 new jobs in the last month. This is 69.2% less than what analysts expected to see on Friday from the Labor Department, which will release a more comprehensive report. Survey data also showed that the U.S. service sector contracted last month. Prices paid, an inflation indicator, reached their highest level since November 20,22. The Dow Jones Industrial Average increased 18.57 points or 0.04% to 42,537.23. The S&P 500 gained 12.69 points or 0.21% to 5,982.97, and the Nasdaq Composite rose 84.52 or 0.44% to 19,483.48. After Berlin approved a tax relief package for corporations, European stocks rose and Germany’s benchmark index reached a new record high. This was despite survey data showing that euro zone business activity is stagnating and Germany’s services sector has posted its biggest contraction in over two years. The MSCI index of global stocks rose by 4.25 points or 0.48 percent to 890.15. The pan-European STOXX 600 Index rose by 0.47% while Europe's broad FTSEurofirst 300 Index rose by 9.84 points or 0.45%. Emerging market stocks increased 14.85 points or 1.28% to 1,172.98. MSCI's broadest Asia-Pacific share index outside Japan closed up 1.33% at 618.30. Japan's Nikkei gained 300.64 points or 0.80% to 37,747.45. Dollars fell across the board, as a series of downbeat economic reports suggested a softening in labor market conditions. The services sector also showed signs of contraction. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, euro and pound sterling) fell by 0.38%, falling to 98.79. At $1.1421, the euro rose 0.45%. The dollar fell 0.82% against the Japanese yen to 142.82. The yields on longer-dated U.S. Treasury bonds fell after the weaker-than-expected data. Investors waited for any signs of progress with tariff negotiations, and also looked forward to the payrolls report. The yield on the benchmark 10-year U.S. notes dropped 9.5 basis points from 4.46% to 4.365% late on Tuesday. The 30-year bond rate fell by 9.5 basis points, from 4.983% to 4.8877% late on Tuesday. The yield on the 2-year note, which is usually in line with expectations of interest rates for the Federal Reserve fell by 8.2 basis points, from 3.957% to 3.875%, late Tuesday. Crude oil prices fell as U.S. inventories were higher than expected, adding to the supply concerns amid tensions in trade and OPEC+ production increases. U.S. crude fell 0.88%, settling at $62.85, while Brent closed at $64.86 a barrel, down by 1.17% for the day. The gold price rose, supported by a soft dollar. Investors waited for employment and trade data. Spot gold increased 0.7% to $3.375.59 per ounce. U.S. Gold Futures increased 0.64% to an ounce of $3,371.50.
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Rio Tinto reduces cost of Serbia Lithium project
Rio Tinto is revising the cost of its Serbian lithium project that the European Commission identified as one of 13 strategic new critical material projects, Chad Blewitt, managing director of the Jadar lithium mine, said on Wednesday. The project is contested by green groups and many Serbs on environmental grounds, and sparked massive street protests in 2022 which led the government to revoke all Rio Tinto's exploration licences. The Constitutional Court overturned the decision last year and reinstated the licences. "The last time we went out to market and looked at the budget, it was over 2.55 billion euros ($2.91 billion). So we are currently in the midst of updating that capital cost," Blewitt told . "The strategic project status that we received today requires us to meet European Union environmental and human rights standards, and that will be reflected in the final capital cost." He could not be drawn into an estimate of the revised cost or timeline for the project - which was initially forecast to start production in 2027 - saying the Anglo-Australian giant also needed to obtain a field exploitation licence. "Once we... get the licence, we can then go and update the project schedules and have a look at costing. So I don't want to give a definitive date." Rio is the only major mining company to bet heavily on lithium - used in electric vehicle batteries - accelerating its push over the past six months with three new deals: its $6.7 billion buy of U.S.-based Arcadium Lithium and two projects in Chile for more than $1 billion. With the lithium market in the doldrums as a wave of new supply overwhelms weaker-than-expected demand for EV batteries, it will take years to know whether this bet will have paid off, although demand projections for the metal are more positive into the next decade. If implemented, Rio Tinto's Jadar project could meet 90% of Europe's current lithium needs. But protesters in Serbia have threatened to block roads and railways if the project goes ahead. "Whatever happens next will involve multiple stages of scrutiny and public consultation," Blewitt said. "It (the project) positions Serbia at the forefront of the green and digital revolution." ($1 = 0.8748 euros) (Reporting by Ivana Sekularac; Additional reporting by Clara Denina; Editing by Emelia Sithole-Matarise)
Higher margins for global oil refiners provide a short-term boost
In recent weeks, refiners around the world have made unexpected profits by producing fuels that are essential to summer demand. This is a welcome respite for a sector in trouble, before a predicted weakening of this year.
Fuel markets are strong in contrast to crude oil prices that fell in May to a 4-year low after OPEC+ increased output faster than expected. This also indicates that demand has remained resilient despite concerns over tariffs.
Neil Crosby, analyst at Sparta Commodities, said that margins are high because supply and demand balance is tight.
The refining margin is the profit a refinery makes by converting crude oil into fuels like gasoline or diesel.
Only a few short months ago, the oil majors warned that 2025 would be a difficult year for refinery. TotalEnergies reported lower profits in the first quarter due to weaker fuel earnings.
Refiners are struggling with the waning of demand due to economic slowdowns. They also face increased competition from newer plants from Asia and Africa.
According to Wood Mackenzie consultancy, global composite refining margins in May 2025 reached $8.37 a barrel, the highest level since March 2024. However, this is still lower than the average of $33.50 in June 2022, when demand recovered after the pandemic and Russia invaded Ukraine.
Closures of refineries in the United States, Europe and Asia have helped to slow global net refinery growth below demand growth. This has made operational refineries more profitable.
According to FGE, the global diesel supply is expected to decline by 100,000 barrels a day (bpd), while demand will fall by 40,000 bpd. Demand will increase by 28,000 barrels per day, while gasoline supply will decrease by 180,000 barrels per day.
"We're seeing a tighter market for transport fuels, which is putting upward pressure on margins. This is much to the joy and relief of regional refiners," said FGE head of refined products Eugene Lindell.
Qilin Tam, FGE’s head of refinery, said that all fuel-producing configurations benefit from the current margins. This is because both light fuels like gasoline and heavier products like fuel oils have increased recently.
Shell's Wesseling plant and Petroineos Grangemouth refinery, both in Scotland, were closed this year. BP's Gelsenkirchen refining plant was also partially shut down.
The refineries of Phillips 66 in Los Angeles and Valero in Benicia are scheduled to shut down in October 2025, respectively, in April 2026.
The impact of refinery closures has also been compounded by unplanned shutdowns.
JPMorgan reported that a power outage on the Iberian Peninsula on April 28 knocked down around 1.5 million barrels per day of refinery production. 400,000 barrels per day of this capacity were still offline two weeks later.
In April, two of the world's largest new refinery projects - Nigeria's Dangote Refinery and Mexico's Olmeca Refinery - experienced unplanned shutdowns on their gasoline-producing units.
TIGHTER BALANCES
Fuel inventories in key hubs are down this year, causing an increase in demand for refinery production as we head into peak summer.
JPMorgan analysts report that stocks in the OECD area, which includes the U.S. EU and Singapore, have fallen by 50 million barrels between January-May.
Analysts said that the "significant reduction in product stock has highlighted the resilience of product prices."
In the northern hemisphere, fuel demand is at its highest during summer due to an increase in motoring and aviation. Heavy fuel oil is most in demand during the summer months to cool down when temperatures are high.
Janiv Shah, Rystad analyst, said that margins are supported by the strength of summer demand in northern hemisphere.
Executives in the U.S. refinery industry are optimistic about demand while pointing out that stocks are relatively low.
Brian Mandell, executive vice president of Phillips 66's first quarter earnings call, said that the company's current outlook for gasoline supplies is that inventories will continue to tighten.
Maryann Mannen, CEO of Marathon Petroleum, said that the company's domestic and international businesses saw steady demand for gasoline and growth in diesel and jet fuel compared to 2020.
Analysts warn that current strength could soon be eroded as trade wars hit demand and fuel production increases as plants seek to profit from higher profits.
Austin Lin, Wood Mackenzie's analyst, said: "We think there will be a slight short-term bump."
According to the International Energy Agency, the growth in global oil demand is expected to be 650,000 barrels per day (bpd) for the rest of 2025. This is down from 1 million bpd during the first quarter, as trade uncertainty has weighed on the world economy.
A veteran oil trader who requested anonymity said, "I think that this is the best thing for refining companies."
(source: Reuters)