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After a drop in approval, Brazilian leader Lula supports the autonomy of Petrobras and the central bank
Luiz Inacio Lula Da Silva, Brazilian President, on Thursday expressed support for non-interference by the government in monetary policies and pricing strategies of Petrobras (the state-owned oil giant), in remarks market-friendly that followed a decline in his approval rating. Lula said at a recent press conference that, if any additional fiscal measures were needed, "we would consider them" in light of the growing concerns on the market about Brazil's increasing public debt. Leftist leader says central bank chief Gabriel Galipolo did "what he felt was necessary" following policymakers raised The key interest rate was raised by 100 basis points on Wednesday to 13.25%. Lula said Galipolo would be able to set conditions for interest rate reductions "at the right time" in his new role as the head of the central bank. Petrobras has been accused of being a terrorist organization. Consideration Lula stressed the fact that it is the company's decision, and not the president, to decide on a hike in diesel prices. Petrobras doesn't have to inform me about fuel price changes. "If Petrobras feels it's important to make a change, they can," he said. A Genial/Quaest poll Released This week, Lula's approval rating fell, with disapproval exceeding approval for the very first time in over two years. The reasons were rising food prices and concerns about increased taxes, as well as volatility on financial markets. Lula, when asked what steps could be taken to reduce food inflation, ruled out any that would lead to a black-market. He said that the best thing to do was to increase production. The Brazilian real recovered some of its earlier losses following Lula's comments, trading down 0.4% against U.S. dollars, while the benchmark Bovespa index continued to gain, rising by 1.8%. (Reporting and writing by Lisandra paraguassu, Marcela Ayres, editing by Gabriel Araujo & Paul Simao).
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Continental's ContiTech Division to close four factories in Germany
ContiTech, a division of German auto parts supplier Continental, will close four plants, and reduce the size of two more, according to a company announcement on Thursday. This will affect 570 employees. The group is aiming for more than 7,000 cuts in its restructuring plan, which it has been working on since over a month. It aims to save 400 million euro ($417 million), a dollar a day by 2025. ContiTech will close its factories in Bad Blankenburg and Stolzenau, as well the combined sites of Frohburg & Geithain in Germany. The company also said that production at its Hannover-Vahrenwald facility will end in the first quarter of 2026, and the plant will be moved to the Czech Republic. Meanwhile, activities at the site in Hamburg would be reduced. As they battle with low demand, high costs and competition from China, as well as a slower-than-expected transition to electric cars, automotive companies in Europe have announced the closure of plants and large layoffs. Philip Nelles is a member Continental's executive committee and the head of ContiTech. He said: "Developments within the automotive industry as well as in lignite mines in Europe present us with challenges."
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Eskom tariffs will rise less than the requested 12.7%
South Africa's Energy Regulator granted Eskom a 12.7% average increase in tariff for 2025/26. This is a third less than the company requested. Eskom's request for increases of 36% in April, 12% by 2026, and 9% by 2027 prompted opposition during public consultations. Political parties and consumers blamed the poor economy and cost-of-living crises. Eskom must be sustainable in the short-term and long-term. Thembani Bukula is the chairman of Nersa. He said that we must ensure that Eskom's electricity services are affordable. Eskom's request for tens or even hundreds of millions of rands to cover coal contracts, an increased carbon tax and increasing municipal debt is effectively denied by the regulator. Nersa has agreed to increase its rates by 5.36% for the 2026/27 financial year and 6.19% for 2027/28. The Minister of Energy said that the government would work with Eskom in order to increase efficiency and to compensate for the lower-than-requested tariff increases. In a press release, Kgosientsho RAMOKGOPA, the energy minister said that he was pleased with the fact these tariff adjustments took into consideration the need to reduce inflationary pressures for communities and businesses. Eskom announced last month that they expected to report their first annual profit for eight years. This was due to an improved performance in the field and state-funded relief. The company announced earlier on Thursday that it had generated 183.7 billion rand (about $9.9 billion) in revenue during the six-month period ending Sept. 30, an increase of 15.8% on the previous year. Profit after tax increased to 17.8 billion rand, up from a restated loss of 1.6 billion a year ago. $1 = 18.4647 rand (Reporting and editing by Jason Neely, David Goodman and Wendell Roelf)
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Andy Home: Uranium revival brings it back to the forefront of critical issues
Is Uranium a Critical Mineral? The U.S. Geological Survey has decided that it is not a critical mineral. It was removed from the list of critical minerals in 2022 because it wasn't a "fuel-mineral". Donald Trump, the president of the United States, wants you to reconsider. In one of Trump's "Unleashing America's Energy" directives, the Secretary of Interior is required to instruct the Director of the USGS "to consider updating the survey list of critical mineral including the possibility of including uranium." Included on the list, domestic uranium project funding and approvals would be expedited. It is curious that uranium slipped through the legal loophole in the Energy Act of 2020 which states only "non-fuel minerals" can be classified as critical minerals. Uranium checks off many criticality boxes. Uranium is experiencing a dramatic increase in demand. The global supply is highly concentrated, and the United States imports almost all of its uranium. These changing dynamics are reflected in the uranium prices. The frothy rally of last year to a 16-year peak of $106 per lb is over. At $71 per lb today, the price of uranium remains higher than it was in any decade following the Fukushima nuclear disaster in Japan in 2011. NUCLEAR COMBAT Fukushima forced many countries to reconsider the role nuclear energy plays in their energy mix, but the threat of climate change has brought nuclear back into the spotlight. This affirmation was made at the COP28 Summit in December 2023 when more than twenty countries released the "Declaration to Triple Nuclear Power". The official recognition was that "nuclear energy plays a key role in achieving net-zero global greenhouse gas emissions by the year 2050, and maintaining the 1.5 degree goal within reach." Trump's administration may not be impressed by such green credentials, but Republicans see nuclear energy as an important component of national defense, which is why it has bipartisan support, even if for different reasons. The big tech companies are also excited as they search for more and more power to fuel their data centers. Microsoft signed an agreement with Constellation Energy to help revive a unit at the Three Mile Island Nuclear Plant in Pennsylvania in September. Re-embrace nuclear power is an international trend. According to the International Energy Agency, the generation from nearly 420 nuclear reactors around the world is set to reach new levels in 2025. The IEA reported that 63 reactors were currently being built, which is the most since 1990. Over 60 reactors' lifetimes will also be extended. SHORTAGE OF SUPPLIES As nuclear power is on the rise, uranium is in high demand. The supply of uranium is not keeping up with the rising demand. According to the IEA, a decade of low oil prices has had a negative impact on production, especially in the United States. Production fell from nearly five million lb per year in 2014 to only 21,000 lb by 2021. The global uranium industry is heavily concentrated. According to the World Nuclear Association, Kazakhstan, Canada, and Australia will account for two-thirds or more of the global production in 2022. One of the factors that triggered the price spike in January 2024 was the warning by Kazatomprom of Kazakhstan, the largest producer of sulphuric acids, that it may not be able to meet its production targets because of a lack of sulphuric. Political stress and market stress are often combined. The United States wants to reduce its dependency on Russia in terms of enriched uranium. In 2023, Russian material will account for 27% of enriched uranium supplies to U.S. commercial nuclear reactors. The Joe Biden Administration banned Russian imports. However, there were waivers until 2027. Russia responded by placing restrictions on shipments into the United States. Trump's threats to impose tariffs against Canada, the biggest supplier of uranium for the U.S. Market, further complicates the situation. Going Critical After a decade of hibernation, the uranium markets are re-energized. Last year's price surge was driven by a lot speculative frenzy, with institutional investors like Goldman Sachs as well as retail investment vehicles like Sprott Physical Uranium Trust following the rally. The uranium prices remain historically high. The market has priced in a shortfall of supply relative to the demand from an expanding global fleet nuclear reactors. Many of these projects use leach technology to help fill the gap. The difference between a mineral that is critical and one called a "fuel-mineral" which is becoming increasingly critical will determine how quickly they can activate. The author is a columnist at
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Native Filipinos are hoping carbon credits will protect their forests
Indigenous communities are aiming to reduce deforestation Leaders sign a carbon credit deal protect forests Illegal mining and logging are the main threats By Mariejo Ramos Some Indigenous leaders from the Western Archipelagic Province want to change this by getting investors to buy carbon credits to reduce deforestation. Last month, two ancestral domains in Palawan's Mount Mantalingahan protected landscape of 97,000 acres signed an agreement with Conservation International (CI) and the National Commission on Indigenous Peoples to develop a carbon finance project within their region and reduce deforestation. Panglima Silnay is the leader of the Pala'wan Indigenous Group. He hopes that the long-term conservation efforts can be managed by the members of the community without interference from businesses or individuals who want to exploit the resources. Silnay, a Silnay representative, said that the Pala'wan Indigenous Peoples depend directly on nature to provide food and income. However, Silnay also warned of threats from illegal mining, logging and palm oil plantations, which destroy agriculture and threaten land, as well as climate risk and land grabs. Conservation International reported that despite its protected status, Mount Mantalingahan has lost over 20% of its mangrove and upland forests in the past two decades due to illegal clearing. The Legal Rights and Natural Resources Center, a local conservation group, says that indigenous Filipinos are the main protectors of forests. However, the global boom in energy transition minerals is increasing pressure on Indigenous lands. INDIGENOUS OWNERSHIP The Philippines recognizes Indigenous Filipinos' rights to natural resources on their land, but they struggle to obtain ancestral domain titles which acknowledge their ownership. The new agreement stipulates that the two ancestral domains of Palawan will work together to create a project to measure and verify the amount planet-warming carbon stored and captured by conservation efforts. Wilson Barbon said that the Philippines director of Conservation International stated that the project, the first carbon project in the country owned by Indigenous Peoples, would act as a catalyst for other programmes. He said that the agreement recognized Palawan's Indigenous group as the rightful beneficiaries of the carbon captured by their forests. Barbon stated that "we will only assist them in developing their carbon assets if they build their capacity to manage their own carbon projects on a long-term basis." CARBON CREDITS Carbon trading is still a work in progress and the Philippines has not yet formalised a system for issuing credits to businesses who emit carbon dioxide. The issue of verifying which projects reduce greenhouse gases and how much is a major source of debate around the world. Some activists argue that credits are a way for polluters to continue polluting. Barbon said, "We acknowledge that there are concerns." "Our position is to try and improve the system instead of shutting it down." He hopes that the new Indigenous enterprise will set the standard in carbon credits projects that are strong on biodiversity and community engagement. He said that the project "shows government an example of community-led initiative". It is difficult, but can be done. This can also force the government to create the framework for more community-led initiatives in the future. Silnay took eight years to come up with an agreement on a project for carbon trading. The community must maintain their forest for the next 25-years through forest protection, carbon inventories, land zoning, and other alternatives to destructive slash and burn farming. The carbon credits generated will not generate revenue for the community until next year. However, they will be invested directly in conservation. Conservation International will continue to pay the minimum wage for community members who participate in conservation activities. Indigenous representatives will be responsible for managing the funds generated by the carbon project. The ancestral domain management office of the government will create an annual budget that outlines how carbon credits can spent. Romel Ligo is a pastor who leads the Palawan Indigenous Community. He said that the project can help to resolve the divide among Indigenous leaders about how they should better protect their natural resources. He said that some were lured in by private companies offering short-term work in exchange for the resources.
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Valero Energy's profit beats expectations on lower costs
Valero Energy, a refiner, beat its fourth-quarter revenue and profit estimates on Thursday thanks to lower costs and stable output. The company's shares rose by 1.4% during premarket trading, after it announced that profits in its renewable-diesel division had doubled and costs were down 10.2% compared to a year ago. Analysts at JP Morgan said that Valero’s operational expenses fell in every segment compared to their estimates, except for the Gulf Coast. Analysts noted also that the segments of refining and Renewable Diesel performed better than expected. Analysts at Scotiabank said that the outperformance in refining was due to a combination of increased throughput and higher margins, noting that this was despite an environment with challenging margins during the quarter. Fuel demand is expected to be lower in 2024, as it has decreased across the globe. Valero’s net income dropped by nearly 77% to $281m, or 88c per share. The refinery margins fell by 34.5%. LSEG data shows that the company's throughput was steady at 3 million barrels a day. This helped it to report an adjusted profit of 64 cents a share, exceeding analysts' estimates of 7 cents - a penny per share. The revenue of $30.75 Billion also exceeded expectations of $30.2 Billion. The company announced that it is progressing on its FCC Unit Optimization Project at the St. Charles Refinery, which will allow it to increase the yields of high-valued products. The project will cost approximately $230 million, and it is anticipated to be completed by 2026.
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UK submits plans for cutting emissions to UN climate body
On Thursday, Britain provided further details about its plan to reduce carbon emissions to United Nations Climate Body. It outlined the actions it was taking to reach the ambitious targets set by Prime Minister Keir starmer last year. Starmer announced Britain's climate goals at the UN COP29 summit last year, promising to reduce greenhouse gas emissions by 81 percent by 2035. He did not explain how he would achieve these goals. The UN Framework Convention on Climate Change, or UNFCCC, submission announced by Britain’s climate minister Ed Miliband to Parliament is the official paperwork required by this UN body that keeps track of the targets for each country. The document did not include new policies or sector-by-sector detailed plans. Instead, it summarized the work done by the government to reduce emissions. The submission promised to provide more information in the future. The document stated that "we will provide an updated cross-economy climate plan in due time, detailing all the policy packages for each sector." Many saw the announcement by Britain of more ambitious goals as one of few positives at the COP29 in November, which was overshadowed due to concerns that Donald Trump’s election in the United States might damage international efforts to stop a rise of global temperatures. In a response to the submission, UNFCCC chief Simon Stiell stated that the UK's new bold climate plan puts it in an even better position to capitalize on the boom in climate action. The G20 and other countries around the globe should also follow suit. "No one can afford not to participate." Reporting by William James, edited by Sarah Young and Sachin Ravikumar
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The role of billionaire Caltagirone in the Italian banking M&A boom
A surge in M&A has led to the emergence of Francesco Gaetano Caltagirone as a key player in a reshaping in Italy's financial industry. BATTLES GENERALI & MEDIOBANCA Caltagirone expanded his financial investments in Italy last year, becoming a major shareholder in the bailed out bank Monte dei Paschi di Siena and fund manager Anima Holding. Since 2021, he has become the second largest shareholder of the Milanese bank. The bank in Milan is now the second largest investor. Mediobanca, the largest shareholder in Generali, has had disagreements with Caltagirone over the leadership of the insurer in the past. Caltagirone, Leonardo Del Vecchio and the late Ray Ban billionaire Leonardo Del Vecchio failed to remove Generali CEO Philippe Donnet in 2022. Donnet's term of three years expires on May. The conservative government of Prime Minister Giorgia Mello has approved changes to corporate governance championed and criticized by Caltagirone. These changes make it difficult for the outgoing board of a company to suggest a successor. Generali's board has stated that it will not nominate any candidates, including a candidate for CEO, when Generali retires due to the new rules. Donnet has agreed to serve another term as CEO. WHAT IS CALTAGIRONE'S ROLE IN ITALIAN BANKING CONSOLIDATION? Caltagirone is a conservative Italian government ally who has long said that it wanted to re-privatise MPS bailed out to help create a large third banking player. The surprise offer of 13.3 billion euros for Mediobanca was rejected on Jan. 24. Treasury had been promoting the merger of MPS and Banco BPM for some time, but an aggressive buyout bid by UniCredit for BPM derailed this plan. BPM bought a 5% share in MPS prior to UniCredit's move, which raised the possibility of a future tie-up. Caltagirone's network of shares seemed to indicate that he would play a part in this tie-up. Caltagirone's network of shareholdings was expected to play a role in that tie-up. Caltagirone's expected support of MPS's bid to acquire Mediobanca could help UniCredit in its pursuit of BPM, as it removes BPM's potential defence. Caltagirone, in December, named two representatives on the MPS Board. One of them was his son Alessandro. Who is CALTAGIRONE and what does it do? Caltagirone is an Italian entrepreneur who has interests in the construction industry, cement, real estate, publishing, and finance. He was born 1943 in Rome to a Sicilian family. Caltagirone, according to Forbes 2024's wealth ranking is Italy's 10th wealthiest person with a wealth estimated at 5.6 billion euro. He is the owner of several regional newspapers and Rome's daily Il Messaggero. Il Messaggero is Italy's eighth largest newspaper in terms of circulation. It supports Meloni's administration. Caltagirone, despite his wealth and power, keeps a low profile and gives few media interviews. In the beginning, he revived his father's construction business with his two brothers and cousin. In the 1980s, he expanded his business by acquiring the cement and infrastructure company Vianini Group. Cementir, his Milan-listed company, employs 3,000 people in 18 different countries. According to its website, it is the biggest cement producer in Denmark and the third largest in Belgium. It also ranks among the top international grey cement operators of Turkey. Caltagirone is survived by three children who are all active in his business, but there is no successor. (Reporting and editing by Kirby Donovan, Jane Merrill and Gianluca Smeraro)
Oil prices steady while markets wait for clarity on Trump's tariffs on Canada and Mexico
Early trading on Thursday saw little change in crude oil prices as the markets awaited tariffs from U.S. president Donald Trump against Mexico and Canada, two of the largest suppliers of crude to United States.
Brent crude futures were up 7 cents or 0.1% at $76.71 per barrel as of 0122 GMT. U.S. Crude Futures rose 17 cents or 0.2% to $72.79 On Wednesday, U.S. Crude Futures settled at the lowest price of this year.
Karoline Leavitt, White House spokesperson, told reporters Tuesday that President Donald Trump plans to fulfill his promise on Saturday to impose tariffs on Canada & Mexico.
Howard Lutnick is Trump's nominee for the Commerce Department. He said that Canada and Mexico could avoid tariffs by closing their borders quickly to fentanyl. Lutnick also promised to slow China's artificial intelligence advancement.
The U.S. crude oil stocks rose 3.46 million barrels during the week ending January 29, roughly in line analysts' estimates of a 3.19 million-barrel rise, due to the winter storms which ravaged the country.
Jerome Powell, Federal Reserve chairperson, said that the U.S. Central Bank held interest rates at their current level on Wednesday. He added that there was no rush to reduce them until new data indicated a return of falling inflation or a rise in risks in employment. Lower borrowing costs increase economic activity and fuel demand.
Investors are also looking forward to a meeting of the Organization of the Petroleum Exporting Countries (OPEC+) and its allies scheduled for February 3.
Kazakhstan announced on Wednesday that the OPEC+ group, which includes leading oil producers, will discuss Trump's attempts to increase U.S. production of oil and adopt a common stance.
Trump also publicly urged OPEC, and its largest member Saudi Arabia, lower oil prices to end the conflict in Ukraine.
The group has already drafted a plan to gradually undo previous cuts and start increasing oil production in April. This plan was delayed multiple times due to weak demand. (Reporting and editing by Sonali Paul in Houston, Arathy Smasekhar)
(source: Reuters)