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PLS CEO says government support can boost lithium supply chains
Dale Henderson said that collaboration between governments could improve global supply chains of lithium, but any intervention in prices must be carefully handled, he added. China is the world's largest producer of lithium, a key component in batteries for electric vehicles and renewable energy storage. Prices have fallen from their peak in 2022 due to weaker demand and slower growth than expected for the EV sector. Henderson stated that the futures market, which is a trading mechanism, should help to regulate the prices of the industry. Australia is the top lithium producer in the world, followed by Chile, China and Australia. In an interview, he stated that if the government were to intervene in the market and support prices, it would be important to carefully consider the implications, as this could support the wrong projects. He urged governments to increase support for supply chains that are not in China. "It's about the government-to-government collaboration to support industrial parks and other trade agreements to bring forth and accelerate these new supply chains," he said. PLS (formerly Pilbara Minerals) expects to release its exploration studies for the Colina Lithium project in Brazil by the second quarter next year. Henderson explained that the company will then make an investment decision "depending on where the market is at the time", Henderson.
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US purchases 900,000 barrels for strategic oil reserve
The U.S. Energy Department announced on Wednesday that they had purchased 900,000 crude oil barrels for almost $56 million. This is a small step towards replenishing the Strategic Petroleum Reserve. Energy Department documents stated that Trafigura Trading would supply 600,000 bbls and Energy Transfer Crude Marketing would supply 300,000 bbls. An Energy Department document stated that the solicitation for up to one million barrels was made in October. Energy Department announced that the oil would be delivered to Bryan Mound SPR in Texas in December and early January. The SPR is a reserve that has been hollowed out in salt caverns along the Texas and Louisiana coastlines. Pumps, pipes, and other SPR infrastructure above ground are continuously exposed to corrosive air. Trump's tax bill and spending bill included $171 million in order to purchase and maintain SPR oil, a much smaller amount than the original $1.3 billion. New legislation will be needed to purchase more oil for SPR. Former President Joe Biden's administration sold record quantities of oil from SPR. This included a 180 million barrel sale in 2022, after Russia invaded Ukraine, one of world's largest oil producers. The reserve has a capacity of 700 million barrels, but now holds more than 410 millions. (Reporting and editing by Ismail Shakil, Timothy Gardner)
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US criticises Britain over nuclear reactor proposals
The U.S. Ambassador to London attacked Britain's nuclear policy on Wednesday in a rare and strong criticism, just before a decision is expected on the development of the site in North Wales. The UK is expected to announce on Thursday that its first small modular reactor nuclear power plant will be located on Anglesey Island, a North Wales island, where an old nuclear station closed in 2015. The United States was pushing for an extensive nuclear project. On Wednesday, Ambassador Warren Stephens made a strong rebuke to Britain's decision. Stephens stated that he was "extremely disappointed" by the decision. "There are already approved, cheaper, faster and more efficient options for providing clean, safe energy in this location," he said. He added that while wishing to make Britain the strongest ally of the United States, the "high energy prices are a hindrance to that." "If you're looking to put shovels into the ground and make a major step to address energy prices and availability there are other options. We look forward to making decisions on large-scale nuclear projects soon." Keir starmer, British Prime Minister, has said that his close relationship with U.S. president Donald Trump helped on many fronts. From securing the deal to reduce some U.S. Tariffs to working on conflicts in Ukraine or the Middle East together. Trump has criticised Britain's energy policies and its efforts to achieve net zero by the year 2050. He has called on the government for more drilling in the North Sea, and criticized the country's wind farms. (Reporting and editing by Nick Zieminski, Alistair Smout)
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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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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.
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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.
Trump imposes tariffs on Brazil of 50%, but excludes aircraft, OJ and energy
Donald Trump, the U.S. president, imposed a 50% tariff Wednesday on Brazilian goods in response to what he called a witch hunt against former President Jairbolsonaro. However, he softened his blow by exempting sectors like aircraft, energy, and orange juice from higher levies. This came as a welcome relief to many in Brasilia who, since Trump announced his tariff earlier in the month, had been calling for protections for major Brazilian exporters caught up in the crossfire. The shares of Embraer, a plane manufacturer, and Suzano, a pulp maker rose.
The Brazilian Treasury Secretary Rogerio Ceron said to reporters that "we're not in the worst case scenario." It's a better outcome than could have been.
The new tariffs are set to go into effect August 6, and not August 1, as Trump originally announced. The White House linked the tariffs in a Wednesday factsheet on Trump's executive orders to Brazil's prosecution against Trump ally Bolsonaro. Bolsonaro is currently on trial for allegedly plotting to overturn the 2022 election loss. The U.S. announced sanctions against a Brazilian Supreme Court judge overseeing Bolsonaro’s trial. They accused the judge of authorizing pre-trial detentions that were arbitrary and of suppressing freedoms of expression.
Trump's executive orders formalizing a tariff of 50% excluded dozens key Brazilian exports into the United States. These included civil aircraft, pig-iron, precious metals and wood pulp as well as energy and fertilizers. Embraer stated that an initial review indicated a 10% tariff, imposed by Trump back in April, remains in effect. The exclusion applies to the additional 40 percent.
Rafael Favetti is a partner in the political consultancy Fatto Inteligencia Politica, located in Brasilia. He believes that these exceptions may be a response to U.S. company concerns, and not a retreat from Trump's attempts to influence Brazilian politics.
He said that "this also shows Brazilian diplomacy has done its job correctly in raising awareness among U.S. businesses."
Mauro Vieira, Brazilian Minister of External Affairs, said he had met with U.S. Sec. of State Marco Rubio to reaffirm his country's willingness for negotiations on tariffs. This is a sign of a possible restart of the negotiations which stalled back in June.
Vieira said that Bolsonaro’s legal problems cannot be considered in negotiations. The State Department didn't immediately respond to a comment request.
A SMALLER EFFECT
Welber Baral, former Brazilian Trade Secretary, estimated that Brazil exports around 3,000 different types of products to the United States.
Barral stated that "there will be an effect." According to an analysis by the American Chamber of Commerce for Brazil, almost 700 products are exempt from the new tariffs. This represents 43.4% of Brazil’s total exports by value. Embraer, which exports 70% of its executive aircraft to the United States, and 45% of commercial aircraft, was a major concern for Bolsonaro’s leftist opponent, President Luiz inacio da Silva.
Analysts also warned that Suzano could suffer a severe impact, as it is one of the largest wood pulp producers in the world.
In Sao Paulo, Embraer's shares rose by 11% and Suzano's gained more than 1% during afternoon trading.
IBP, a lobbying group for oil, said that after oil products are listed as exempted from the new tariffs, oil shipments will resume to the U.S. Ibram, the mining lobby, stated that exemptions covered 75% of all mining exports. The executive order of Wednesday did not include any exemptions for coffee or beef, two important exports to the United States. Roberto Perosa is the head of Brazilian meatpacking group Abiec. The group represents producers of beef, including JBS, Marfrig and Marfrig.
Cecafe, a group of Brazilian coffee exporters, said in a press release that it would continue to work for coffee being included as an exemption. The battle over tariffs will continue as the political motivations behind them provide ammunition to the plaintiffs who have filed a lawsuit.
Alex Jacquez who worked at the White House National Economic Council for former President Joe Biden said that the new tariffs are a violation of "both the law and Trump’s stated trade policy." He said that the tariffs would only increase coffee prices. "We have a large trade surplus with Brazil. These punitive duties will not rebalance unfair trade. Reporting by Luciana Magialhaes and Gabriel Araujo in Sao Paulo; Lisandra Paraguassu, Marcela Ayres and Ismail Shakil, in Brasilia; Kanishka Singh, in Washington; Manuela Andreoni, in Ottawa; Brad Haynes, Rosalba o'Brien, in Washington.
(source: Reuters)