Author Archives: Sohrab Darabshaw

The Atlanta-based aluminum firm Novelis announced it is partnering with China’s leading universities to conduct research into the innovative use of aluminum.

The partnership between Novelis’ Shanghai Customer Solution Center (CSC) and the Tsinghua University Suzhou Automotive Research Institute (TSARI), confirmed by way of a memorandum of understanding (MoU) will drive research and development of aluminum products to promote a “low carbon, sustainable future.”

Novelis is a subsidiary of India’s Hindalco Industries Ltd. The company accounts for almost half of Hindalco’s consolidated revenue.

Furthermore, with operations in 10 countries, Novelis is one of the largest aluminum recyclers in the world. It reported U.S. $11.2 billion in net sales for the most recent fiscal year.

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Novelis in China

aluminum sheet

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However, Novelis already has a significant presence in China.

Back in May, for example, the aluminum major announced that it would supply Nissan with a sustainable, lightweight aluminum body sheet for the all-new Qashqai SUV and create a closed-loop recycling system in Europe.

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China’s increased appetite for iron ore has become a problem for neighbor India.

In the first four months of 2021, ore exports from India increased by 66% to 22.42 million tons (MT). As much as 90% of this went to China, according to Business Today.

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India’s iron ore problem

India iron ore barge

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China is the largest consumer of iron ore. The country imports about 70% of the world’s production. Last year, it imported a record 1.17 billion tons.

The spike in iron ore exports is becoming a problem for Indian steelmakers, as they are struggling to get this critical raw material. Some have now demanded that the government ban iron ore exports from India.

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China’s “zero tolerance” warning to commodity speculators over the weekend sent prices of some metals and iron ore tumbling.

A meeting held on Sunday between at least five government departments, including the the National Development and Reform Commission (NDRC), concluded that the fight against hoarders and speculators leading to soaring commodities prices would be taken to the next level.

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Beijing aims to control runaway prices, warns commodity speculators

China map

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Bloomberg reported the government had also threatened severe punishment for violators indulging in excessive speculation and fake news in the trading of commodities including iron ore, steel and copper.

The NDRC summoned top metals producers to the meeting in Beijing.

Let’s not forget that China is the largest consumer of some of these commodities, like iron ore and copper. The prices of these commodities have surged this year, as the global economy partially recovered from the COVID-19 pandemic. In turn, that has led to renewed demand for manufactured goods.

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electric vehicle charging

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Clean energy vehicles, such as electric vehicles (EV), are not really 100% “clean.”

That is mostly because of the environmental toll of mining.

Such mining generates incredible amounts of waste. Furthermore, it leads to damage of nearby flora and fauna.

By 2040, mineral demand for clean energy technologies will likely quadruple. That’s a cause for worry for environmentalists because of the likely impact on the ecosystem.

But now, two companies, the Vancouver-based The Metals Company and the Danish company Bjarke Ingels Group (BIG) have got together to mine the deep seas for these resources, a lesser destructive alternative to surface mining.

Together, these companies recently unveiled designs for seafloor mineral collector robots and carbon-neutral vessels.

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Deep sea mining

The Metals Company is a seafloor polymetallic nodules exploration firm. With BIG, it aims to design a next-gen processing plants to supply battery metals.

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After a better-than-expected performance by India’s Tata Steel in the fourth quarter and the full year, the company has put its plan to sell off its Southeast Asian business on the backburner for now.

In both earnings and cash flows, Tata Steel reported one of its best performances, despite the COVID-19 pandemic.

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Tata Steel profit jumps 79.7%

The steelmaker’s consolidated net profit rose 79.7% over the preceding quarter, while operating profit rose 48% sequentially.

Its consolidated sales volumes rose 0.43% quarter over quarter to 4.67 million tons. For the full year, it reported 17.31 million tons, up from 16.97 million tons in fiscal year 2020.

The company also managed to reduce its debt by 28% compared to the previous fiscal year.

While presenting its results, Tata Steel said its Southeast Asia business is performing much better now. As such, instead of going ahead with the plan announced in 2019 to spin it off, it had decided to focus on running it.

That portion of the business includes NatSteel Singapore, NatSteel Vietnam, and Millennium Steel Thailand.

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rare earths

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The Biden administration taken another step to ease China’s current stranglehold on the rare earth element (REE) sector.

These elements are a crucial ingredient in the manufacture of products for both civilians and the defense sector. Rare earths make their way into smartphones, computer hard drives, medical imaging equipment, electric vehicles, and missiles, aircraft guidance and control systems, radars, and more.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

DOE awards $19M toward rare earths, critical minerals production

The US Department of Energy (DOE) recently earmarked US $19 million to fund 13 projects to produce REEs and critical minerals.

Sen. Mitt Romney cited China’s “near monopoly” on the sector and his state’s role in the US’s attempts to boost its own production.

“With this funding, Utah will continue to play a vital role in United States’ production of rare earth metals and critical minerals, which will help rebuild our supply chain and decrease our dependence on China,” Romney said.

Furthermore, China produces almost 70% of the world’s total supply of rare earth metals.

Those who will receive the funding include: Pennsylvania State University; Virginia Polytechnic Institute and State University; Collaborative Composite Solutions; and New Mexico Institute of Mining and Technology.

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China aluminum

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When the largest aluminum producer on earth keeps reporting high import figures, the world sits up and takes note.

According to figures released by the Chinese General Administration of Customs a few days ago, China recorded a new high for aluminum imports in March 2021.

Stop obsessing about the actual forecasted aluminum price. It’s more important to spot the trend

China aluminum imports surge in March

Imports went up 40.8% from February 2021, taking first quarter imports to a total of 661,517 tons. The quarterly total marked an increase of 118.8% from the same period in 2020.

China has been on this aluminum importing spree since July 2020. China’s aluminum imports last year, including primary aluminum and unwrought alloy, surpassed the previous annual record set in 2009.

What’s more, Shanghai aluminum prices last week were at their highest since 2010. China had bought in record volumes of the metal in 2020, riding on an uptick in domestic demand. Strong demand pushed the Shanghai prices higher than London prices, opening an arbitrage window for cheaper overseas metal.

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Social network Facebook recently announced an agreement with a Mumbai-based clean energy firm CleanMax for a 32 MW wind power project in India’s southern province of Karnataka.

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Facebook to purchase energy from Indian wind power project

wind power and solar power installations generation

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CleanMax will own and manage the plant. Meanwhile, Facebook will purchase the power produced.

Indian financial paper Mint quoted Urvi Parekh, head of renewable energy at Facebook, as saying the partnership will enable new solar and wind power to be generated in the near future. As such, it would contribute to the decarbonization of the Indian electrical grid.

Incidentally, nearly 50% of the project capacity has already been commissioned and is generating power.

This is not the first such project in Asia involving Facebook.

In October 2020, the social media giant signed a Power Purchase Agreement with a Singaporean energy company, Sunseap Group. The deal would see it utilize solar panels on the rooftops of 1,200 public housing blocks and 49 government buildings.

In turn, Facebook will receive Renewable Energy Credits (REC) produced by the project once it’s done next year. Facebook will buy up to 100 MW of power at a previously agreed upon price.

Last week, Facebook CEO Mark Zuckerberg announced his company’s global operations are now wholly supported by renewable energy and that Facebook had reached net-zero emissions. Furthermore, Facebook said it had reduced its greenhouse gas emissions by 94% over the last three years.

Facebook’s journey started back in 2011 with a wind project in Iowa.

Big Tech going green

Facebook and other data-center-reliant tech companies use up as much as 1% of the world’s total energy, according to the International Energy Agency.

It’s not just Facebook. Big Tech companies like Apple, Microsoft and Google have set net-zero emissions targets for their global operations.

Last July, Apple unveiled a plan to become carbon neutral for its supply chain and products by 2030.

That means even Apple’s manufacturers in India will be moving to 100% renewable energy. In addition, the company’s partners have 8 GW of planned clean energy set to come online by 2030.

Last week, Apple also announced that its US $4.7 billion green bond spend helped generate 1.2 gigawatts of renewable energy. In February 2016 the company issued its first US $1.5 billion Green Bond. It followed it up with another round of $1 billion in June 2017.

In November 2019, the company issued its third set of Green Bonds and its first in Europe. The bonds came in at 1 billion euros each (totaling nearly US $2.2 billion). In fact, Apple’s global corporate operations are already carbon neutral.

“Apple is dedicated to protecting the planet we all share with solutions that are supporting the communities where we work,” said Lisa Jackson, Apple’s vice president of environment, policy and social initiatives. “We all have a responsibility to do everything we can to fight against the impacts of climate change, and our $4.7 billion investment of the proceeds from our Green Bond sales is an important driver in our efforts. Ultimately, clean power is good business.”

While turning green themselves, these companies are also hastening the transformation of entire electricity systems in many parts of the world.

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The Vedanta copper plant in India remains shut three years after local residents protested against pollution stemming from the plant’s operation.

That, however, has not fazed the Vedanta Group.

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Vedanta to set up new copper smelter

Vedanta now plans to set up yet another plant in the country. The proposed copper smelter plant will have a capacity of 500,000 tons per year.

copper smelter

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Vedanta Ltd, the subsidiary of Vedanta Resources, has called for expressions of interest from provincial governments in India regarding a new copper smelter unit.

A Vedanta spokesperson told the Business Standard India’s copper requirements will grow. Furthermore, the spokesperson emphasized ample supply of copper is critical for implementation of new-generation technologies.

Three years later

It’s been about three years since Vedanta’s Tamil Nadu smelter was shut down, causing it losses that are already running into millions of dollars.

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Tangshan steel plant

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The recent curbs on steel making by the local government in one of China’s largest steel-producing cities, Tangshan, may have a cascading effect on steel procurement & demand, as well on iron ore supplies, some experts believe.

The Tangshan restrictions are in effect from March 20 to Dec. 31, 2021. Among other things, the restrictions penalize steel mills there that fail to meet emission control regulations.

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Tangshan part of countrywide effort

The curbs are in line with China’s fresh efforts to cut emissions meet carbon-neutrality targets. China aims to reach carbon neutrality by 2060.

Already, iron ore prices felt effects from the restrictions. Meanwhile, the long-term effect on the import-export of steel from China remains to be seen.

Daily iron ore consumption in Tangshan is also likely to drop drastically. The restrictions had led to the drop in iron ore futures but boosted hot-rolled coil (HRC) futures.

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