February Newsletter – 14.02.2022
- Coal shortage crisis in non-power sector escalates; Trade bodies move from appeals to agitation
- Goldman sees copper price “breakout”, risk of “extreme scarcity episode”
- Republican US senator presses Energy Department on seabed mining
- Lithium’s feast-or-famine future keeps EV makers guessing
- Glencore in battery metal offtake deal with Missouri Cobalt
- Gates, Bezos-backed firm gets cash injection to find battery metals
- From ancient pups to warships – miners find more than just ore
- Coal India has enough stock for non-power sector, ministry says
Coal shortage crisis in non-power sector escalates; Trade bodies move from appeals to agitation
At a time when the Indian economy is striving to emerge from the setbacks inflicted by the Covid pandemic, the short supply of coal to non-power industries including steel, cement and paper since August 2021 is steadily turning fears of massive economic losses and unemployment into an ugly reality.
New Delhi: At a time when the Indian economy is striving to emerge from the setbacks inflicted by the Covid pandemic, the short supply of coal to non-power industries including steel, cement and paper since August 2021 is steadily turning fears of massive economic losses and unemployment into an ugly reality.
After repeated appeals by trade and worker bodies, such as the Indian Captive Power Producers Association (ICPPA), the Federation of Indian Mineral Industries (FIMI), among many others, the distressed stakeholders in the non-power sector have now resorted to agitation against the production and supply anomalies, and Coal India Limited’s (CIL) continued prioritization of the power sector.
Goldman sees copper price “breakout”, risk of “extreme scarcity episode”
Copper’s just so hot right now.
After a 26% rise in 2021, copper prices have struggled for direction this year. On Thursday, March futures made another attempt to find higher ground, jumping to $4.7085 a pound ($10,380 a tonne) the highest since October’s spike. But on Friday, the bellwether metal was once again under siege, dropping nearly 4%.
In a new research report, Goldman Sachs says the copper price is “building towards a breakout” as worries about the global economy, particularly China’s engine of growth – property, begin to ease:
“With a diversified set of demand drivers – from EVs to electrical grids – sustaining a very tight micro into 2022, we believe that copper will reprice once these broader macro concerns abate.”
Goldman says the limited seasonal build-up of copper inventories from record low levels – currently at just over 200,000 tonnes – scarcely enough to cover three days of global consumption is “entirely insufficient to tackle” its expected deficit of 197,000 tonnes for this year.
“The longer this continues, the higher the risk of extreme scarcity episode by the end of the year,” Goldman says in its report released Tuesday.
Mid-October copper futures jumped to an intra-day high of $4.82 a pound or $10,633 a tonne in New York after available LME inventories fell to its lowest since 1974.
Republican US senator presses Energy Department on seabed mining
A top Republican U.S. senator urged the U.S. energy secretary this week to provide information on the Biden administration’s strategy for domestic mining of minerals for electric vehicle batteries on the seabed floor.
Seabed mining is a new industry that backers say can supply many of the metals including nickel, copper, cobalt, and manganese for advanced batteries and other components in electric vehicles.
The Biden administration’s strategy to fight emissions blamed for climate change includes boosting batteries and electric vehicles.
But the United States has not ratified the United Nations Convention on the Law of the Sea, which means it is not a member of the International Seabed Authority (ISA), a U.N. body in charge of drawing up regulations before any mining can start. The United States has participated as an observer state in ISA negotiations over these regulations.
“Taking into account the uptick in demand one might expect as a result of your Administration’s goals to advance vehicle electrification, it is vital that domestic supply for these minerals be enhanced,” said the letter from Senator Lisa Murkowski to Energy Secretary Jennifer Granholm.
Lithium’s feast-or-famine future keeps EV makers guessing
Lithium’s vital role in electric-vehicle batteries means automakers, miners and investors are racing to figure out how much supply the world will need in the coming years — and also how much it’s going to get.
The problem is the predictions vary wildly.
The metal’s price has surged fivefold in the past year, reflecting mounting worries about availability. For years, batteries and EVs have become cheaper to make as the technology improved and production stepped up. But now there’s a risk that rising costs of raw materials — and lithium in particular — could hobble the transition just as momentum picks up.
The stakes are high for carmakers that are spending billions of dollars betting on a battery-powered future. Mining companies and governments are responding with ambitious plans to boost production. But demand is growing at such a breathtaking pace that it’s not clear whether it will be enough.
In a survey of six leading lithium forecasters, estimates for how the market will look in 2025 range from a deficit equal to 13% of demand to a 17% surplus. Projections for the market’s size diverge sharply too, with demand forecasts ranging from as little as 502,000 tons to as much as 1.3 million tons.
Glencore in battery metal offtake deal with Missouri Cobalt
Glencore Plc agreed to an offtake deal with Missouri Cobalt LLC, giving the world’s biggest commodity trader more exposure to the crucial battery ingredient.
The agreement follows a steep rise in the price of battery metals over the past year amid surging sales of electric vehicles. The spike in costs has threatened carmakers’ margins, while rising demand has sparked fears of a shortage of mined raw materials such as lithium, cobalt and nickel.
Glencore will buy all of Missouri Cobalt’s production of those three metals, the trading house said Wednesday in a statement. It gave no details of the offtake terms, saying only there’s “significant embedded pre-payment.” It also said the two companies will explore other joint opportunities, including recycling.
Glencore, already the leading cobalt producer from its mines in the Democratic Republic of Congo, has struck a series of deals in recent weeks to secure more metals by recycling old batteries.
Missouri Cobalt, which operates the Madison mine in the U.S. state, said in a separate statement that it was changing its name to United States Strategic Metals LLC. The company hired Goldman Sachs Group Inc. last year to assess the possibility of a public listing, Reuters reported in June.
Gates, Bezos-backed firm gets cash injection to find battery metals
KoBold is using data-crunching algorithms to build what’s been described as a Google Maps for the Earth’s crust.
KoBold Metals, a start-up backed by a coalition of billionaires including Bill Gates and Jeff Bezos, has raised $192.5 million in its latest financing round, which will allow it to speed up efforts to find new deposits of critical metals needed for batteries and clean energy.
Investors in the Series B funding round for the company included Sam Altman’s Apollo Projects and Mary Meeker’s Bond Capital as well as BHP (ASX: BHP) and the Canada Pension Plan Investment Board, Canada’s largest pension fund, two people familiar with the matter told The Wall Street Journal.
Previous backers include big names such as Venture capital firm Andreessen Horowitz and Breakthrough Energy Ventures.
The Silicon Valley-based firm, founded in November 2018, plans to use artificial intelligence to create a “Google Maps” of the Earth’s crust, with a special focus on finding cobalt deposits. It collects and analyzes multiple streams of data — from old drilling results to satellite imagery — to better understand where new deposits might be found.
From ancient pups to warships – miners find more than just ore
In their search for precious metals, gemstones, sources of fuel, and even the trendy battery metals, miners have come across treasures that even though have nothing to do with what they were initially looking for, are still invaluable.
From Canada to Serbia, these treasures are linked by a unifying feature: they connect us with our ancestors and help us build a higher resolution picture of what our planet looked like thousands of years ago.
Roman-era warships in a coal mine
In 2012, archeologists working at the Kostolac coal mine in eastern Serbia, found bones corresponding to at least five woolly mammoths, which disappeared about 10,000 years ago.
Eight years later, Kostolac made headlines again due to an archeological discovery dating back to the Roman era. This time, it was three shipwrecks estimated to have been buried for at least 1,300 years and which were discovered by a group of mineworkers.
The vessels were considered to be part of a warship fleet operating near what was Viminacium city, a base for Roman warships on the Danube River.
Buried in an ancient riverbed under several metres of mud and clay, the largest ship was nearly 50 feet long and had an estimated capacity of 30 to 35 crewmembers. The two smaller vessels, on the other hand, match descriptions of boats used by Slavic groups to ferry across the Danube and attack the Roman frontier.
Coal India has enough stock for non-power sector, ministry says
Coal India Ltd. has sufficient stock to boost supply to the country’s non-power sector, the government said in a statement Saturday, assuaging fears of any shortage given rising demand for electricity from domestic producers.
As the economy recovers from the pandemic, the company’s despatch to the non-power sector during the April to January period was at 101.7 million tonnes (MTs) — down 3% from a year earlier. It was, however, up 8.2% compared to the corresponding period of a Covid-free financial year to March 2020.
“CIL has sufficient buffer stock to further increase supply to the non-power sector,” the government said, adding that unusually high international coal prices had proved to be a hindrance for importing the requisite quantity leading to scarcity of coal.
Some Indian power producers had sought to secure coal imports after supply disruptions and rising demand for coal left India grappling with shortages last year.
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