August Newsletter – 28.08.18


China’s Tianqi Lithium Files For $1 Billion Hong Kong Listing: Sources

HONG KONG (Reuters/IFR) – China’s Tianqi Lithium Corp (002466.SZ) is looking to raise up to $1 billion in its Hong Kong stock market flotation, despite this year’s fall in lithium prices, two people close to the deal told Reuters.

The company, the world’s second-largest lithium producer by sales, on Friday filed plans for Hong Kong’s second lithium listing this year. The draft prospectus was put on the Hong Kong exchange website late on Monday.

Tianqi, which is based in China’s southwestern province of Sichuan and is building the world’s biggest lithium processor in Western Australia, will list on the stock market later this year, the sources told Reuters.

The final deal size could be smaller than $1 billion due to a steep drop in lithium carbonate prices, said the people, who declined to be named as the deal details are not public yet.

Tianqi declined to comment.

On Tuesday, its shares were 0.38 per cent lower in Shenzhen at 38.90 yuan.

Lithium is a key ingredient in rechargeable batteries and China has aggressively promoted electric vehicles to combat air pollution and help domestic carmakers leapfrog the combustion engine to build global brands.

POSCO buys lithium mining rights in Argentina from Australia’s Galaxy

SEOUL/MELBOURNE (Reuters) – South Korean steelmaker POSCO has sealed a deal to buy lithium mining rights in Argentina from Galaxy Resources for $280 million, beefing up the Australian miner’s funds to dig a lithium mine on neighbouring ground.

POSCO said in a statement on Monday that it would also build a lithium plant in Argentina, planning to produce 25,000 tonnes of the commodity per year for 20 years starting from 2021.

Demand for lithium, a critical ingredient for batteries used in electric vehicles, has grown in recent years as some consumers shift away from cars powered by fossil fuels.

POSCO said the move would secure stable lithium supplies for its battery material manufacturing affiliate POSCO ES Materials.

Over the past two to three years, China’s electric vehicle production has been much stronger in the second half of the year than the first half, driving up demand for battery materials later in the year.

Demand is also expected to rise in Japan and South Korea, Tse said.


China’s net gold imports via Hong Kong plunge 45 percent month-on-month in July

(Reuters) – China’s net gold imports via main conduit Hong Kong dived 45 percent in July from the previous month, data showed on Monday.

Imports via Hong Kong, the world’s top consumer of the metal, decreased to 44.802 tonnes in July from 80.867 tonnes in June, according to data mailed to Reuters by the Hong Kong Census and Statistics Department.

Total gold imports via Hong Kong plunged to 48.635 tonnes in July from 88.608 tonnes in June.

Indian Coal Imports Surge

August 23, 2018

India’s coal imports appear to be headed for another strong month in August, raising the question as to why the usually cost-sensitive market hasn’t scaled back purchases given a surge in prices to the highest in nearly seven years. According to vessel-tracking and port data compiled by Thomson Reuters, total coal imports may reach 17.7 million metric tons (mt) in August.

This figure may be revised as it becomes clearer when ships will arrive and discharge their cargoes, but the August imports are likely to be more or less in line with the 17.4 million mt imported in July, which was the strongest monthly outcome so far in 2018.

India’s coal imports have been exceptionally strong despite prices for thermal coal rising to the highest in 6.5 years, with the Australian benchmark Newcastle cargoes trading above AUD 120/mt recently, taking the year-to-date gain to around 18%. The gain in prices has been largely driven by strong Chinese imports.


Resurgence Of Crippling Black Lung Disease Seen In U.S. Coal Miners

(Reuters Health) – Since the 1990s, annual numbers of U.S. coal miners with new, confirmed cases of an advanced form of so-called black lung disease known as progressive massive fibrosis have been steadily rising, according to a new study.

The resurgence is particularly strong among central Appalachian miners in Kentucky, Pennsylvania, Virginia and West Virginia, the study authors note.

“It’s an entirely preventable disease, and every case is an important representation of a failure to prevent this disease,” said lead study author Kirsten Almberg of the University of Illinois at Chicago and the National Institute for Occupational Safety and Health (NIOSH) in Morgantown, West Virginia.

Progressive massive fibrosis is the most severe form of pneumoconiosis, which is also known as black lung disease and is caused by overexposure to coal mine dust. The symptoms are debilitating and can lead to respiratory distress.

“Many people think black lung is a relic of the past,” she told Reuters Health in a phone interview. “But it shouldn’t fade from our attention.”

Almberg and colleagues looked at the number of progressive massive fibrosis cases among former U.S. coal miners applying for Federal Black Lung Program benefits between 1970 and 2016. Miners can apply for financial help and medical coverage if facing disabling lung impairment, and claims are accepted when medical tests and imaging verify the presence of disabling pulmonary impairment.

Progressive massive fibrosis is “by definition” considered totally disabling, the authors note in the Annals of the American Thoracic Society.

Among 314,000 miners who applied for benefits during the 46-year period, the research team found 4,679 cases of confirmed progressive massive fibrosis, with 2,474 of these representing claims filed since 1996.

The yearly number of cases fell from 404 in 1978 to 18 in 1988 but then began increasing each year, with 383 confirmed cases in 2014, the study found. At the same time, employment has declined from 250,000 miners in 1979 to 81,000 in 2016, the authors note.

SOURCE: Annals of the American Thoracic Society, online August 17, 2018.

Epa To Replace Cpp With Affordable Clean Energy Rule

August 22, 2018

By Jennifer Jensen

On August 21, the U.S. Environmental Protection Agency (EPA) published a new rule to reduce greenhouse gas emissions from existing coal-fired plants that would replace former President Barack Obama’s Clean Power Plan (CPP). The proposal, the Affordable Clean Energy Rule (ACE), would establish emissions guidelines for states to use.

According to the EPA, this rule will empower states, promote energy independence, and facilitate economic growth and job creation.

President Donald Trump issued an executive order back in March 2017 to have federal agencies review potential “burdensome” regulations. Following this order, the EPA announced it was proposing a repeal of the CPP after a thorough review. When the CPP was announced, 27 states, 24 trade associations, 37 rural electric co-ops, and three labor unions challenged the rule. Additionally, the Supreme Court issued a stay of the rule.

“The ACE Rule would restore the rule of law and empower states to reduce greenhouse gas emissions and provide modern, reliable and affordable energy for all Americans,” said EPA Acting Administrator Andrew Wheeler. “Today’s proposal provides the states and regulated community the certainty they need to continue environmental progress while fulfilling President Trump’s goal of energy dominance.”

The proposal defines the “best system of emission reduction” (BSER) for existing power plants as on-site, heat-rate efficiency improvements; provides states with a list of “candidate technologies” that can be used to establish standards of performance and be incorporated into their state plans; updates the New Source Review (NSR) permitting program to further encourage efficiency improvements at existing power plants; and aligns regulations under Clean Air Act section 111(d) to give states adequate time and flexibility to develop their state plans.

In regard to the new rule, Trump said, “We’re ending intrusive EPA regulations that kill jobs … and raise the price of energy so quickly and so substantially.”

The EPA projected that replacing the CPP with the proposal could reduce the compliance burden by up to $400 million a year. The EPA also estimated that the rule would reduce 2030 CO emissions by up to 1.5% from projected levels. When states have fully implemented the proposal, CO emissions could be 33% to 34% below 2005 levels, the EPA said. The CPP required states to reduce emissions by 32% below 2005 levels by 2030.

Citgo Seeks to Delay Auction of Shares

August 20, 2018

By Julie Wernau

Citgo Petroleum Corp. is asking a federal judge to wait out a higher court ruling before auctioning off its assets to satisfy Venezuela’s creditors.

The request, filed in federal court, is the first time Citgo has commented on longstanding litigation from unpaid creditors seeking to seize the oil refiner in lieu of payment for debts owed by its embattled parent, the government of Venezuela.

The company is asking for time to weigh in on the scramble to seize the Citgo, Venezuela’s largest U.S.-based asset.

“Citgo just showed up for its own funeral,” said Jay Auslander, a partner at Wilk Auslander, whose practice focuses on judgment enforcement and distressed debt litigation.

Earlier this month, Judge Leonard P. Stark of the U.S. District Court in Wilmington, Del., authorized one of Venezuela’s creditors to take control of shares of Citgo’s U.S.-based parent company, the first step toward a sale of the company. Citgo is the only asset of its U.S.-based parent company PDVH, a subsidiary of Venezuela’s state oil company Petróleos de Venezuela SA.

On Monday, Citgo asked that the judge delay the sale, pending the appeal and that he “hold a hearing on how to structure the process before asking the U.S. Marshals to wade into uncharted territory.”

“Ascertaining the proper number of shares to be sold and the proper manner in which the sale should go forward so as to maximize value is a complicated task,” Citgo wrote in a court filing, calling the magnitude of such a court-ordered sale “unprecedented.”

Crystallex International Corp., a defunct Canadian gold miner, has moved in on Citgo in an attempt to collect on a judgment over lost mining rights involving Venezuela’s government. Venezuela’s state oil company has appealed the ruling, the result of years of international litigation.