Author Archives: Sohrab Darabshaw

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.

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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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lithium-ion battery

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A development at an Indian lithium-ion battery plant could begin to challenge China’s dominance of the graphite anode market.

A lithium-ion battery manufacturing plant in one of India’s southern provinces that came online recently will become the world’s first and only 100% backward-integrated facilities producing synthetic graphite (Syn-G) when fully operational.

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Lithium-ion battery components

Such high-grade graphite anode material is a key component in the lithium-ion battery, something China has monopolized the production of for a long time.

Epsilon Advanced Materials, the company behind the new plant, is a subsidiary of Epsilon Carbon. Epsilon Carbon is India’s leading coal carbon company that recently diversified into the battery material business. Specifically, it has moved to develop and manufacture high-performance carbon products for anode components for lithium-ion batteries. Industries in China currently produce over 80% of the world’s supply of these anodes.

Epsilon Carbon took over two years to develop a new, environmentally friendly process to produce the graphite anode material.

Managing Director Vikram Handa is the son-in-law of none other than steel tycoon and entrepreneur Sajjan Jindal, chairman and managing director of JSW Group of companies diversified in steel, mining, energy, sports, infrastructure and software business.

Handa set up Epsilon Advanced Materials Pvt — India’s first manufacturer of lithium-ion battery parts — in the southern state of Karnataka last August. He is sourcing the raw material from the largest steel mill in the country, owned by Jindal.

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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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India

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ArcelorMittal Nippon Steel India Ltd (AM/NS) signed an agreement with the provincial government of Odisha in eastern India to build a US $6.88 billion steel mill.

The proposed plant is a joint venture between ArcelorMittal and Nippon Steel, and will have a production capacity of 12 million tons per year.

ArcelorMittal had to drop its original plan for a 12 million ton per annum steel plant after the company failed to acquire the required land and the necessary permissions for an iron ore mine, VCCircle reported.

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ArcelorMittal Nippon Steel expands

The steelmaker is one of the largest in the world, combining the might of the LN Mittal Group and the technological prowess of Japanese company Nippon Steel.

ArcelorMittal has recently hit some rough times.

In 2020, as a result of the COVID-19 pandemic, its sales went down by 24.6% to US $53.3 billion as compared to US $70.6 billion in 2019. For 2020, the company reported a net loss of US $733 million. Meanwhile, it tallied net income of US $2,454 million in 2019.

In Q4 2020, however, ArcelorMittal posted US $1,207 million net income. The steelmaker posted a net loss of US $1,882 million in the year-ago quarter.

In fact, during that time, the son of steel baron Lakshmi Mittal, Aditya Mittal, the company’s CFO, got the nod to be the next CEO.

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Japan map

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Japan’s steel sector is facing tumultuous times.

But, in the short term, there are initial signs of it pulling through in 2021.

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Pandemic impacts on Japan’s steel sector

The COVID-19 pandemic contributed to the weakening of domestic needs. Furthermore, tepid global demand, cheaper exports by China and an ambitious net-zero emission target to develop cleaner steel have all come together to negatively affect the country’s steel sector.

According to an S&P Global Platts report, Japan’s iron and steel product exports fell 4.9% year over year to 32.14 million metric tons (MT) in 2020.

Quoting from data from the Japan Iron & Steel Federation, the report noted total exports to the US fell 30.5% year over year to 890,000 MT. That marked the fourth straight year of decline since reaching 2.06 million MT in 2016.

A slight recovery in December saw exports rise by 5% from November to 2.56 million MT. Hot-rolled wide strip steel accounted for the bulk of the ordinary steel products exported.

In fact, for the first time since 2009, as the S&P Global Platts report noted, Japan’s crude steel production fell below the 100 million MT mark.

Production fell 16.2% year over year to 83.19 million MT in 2020, according to the World Steel Association.

The country’s crude steel output fell 3.9% in January this year from a year earlier.

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Rusal logo

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One of the world’s leading producers of low-carbon aluminum, UC Rusal, announced a new collaboration with Japanese automotive component manufacturer Kosei, signifying yet another step in its over 30-year journey.

Last week, the Russian aluminum giant Rusal said Kosei had selected it to be its global supplier of high-quality aluminum alloys.

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Rusal-Kosei aluminum supply deal

Kosei, set up in 1950, designs and manufactures vehicle wheels and autoparts. The firm operates from seven countries.

In the last 30 years, Rusal has proved to be a key partner of Kosei. Rusal has supplied the Japanese company with primary foundry aluminum alloys. Kosei uses in the material in factories in India, Japan, Thailand, and the US.

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Indonesia on a globe

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Electric vehicle manufacturers are wooing Indonesia to create a nickel-based battery supply chain in that country.

Elon Musk’s Tesla and China’s Contemporary Amperex Technology, otherwise known as CATL, and South Korea’s LG Chem are in the fray. 

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Firms look to secure Indonesian nickel supply

A senior Indonesian government official told news agency Reuters the government had recently received Tesla’s investment proposal. 

Since early last year, Tesla has been courting Indonesia because for the value of its strategic commodities, including nickel. Nickel is a critical metal used in batteries for EVs due to its properties enabling mass energy storage capabilities. Furthermore, nickel reduces the overall cost of batteries by limiting the amount of cobalt required. 

Tesla seems to have come back to the Indonesian government with a reworked proposal to the one it had submitted in May 2020. The latter had shown reluctance in just signing a raw material supply agreement. 

The minister told reporters, while acknowledging Tesla had sent its proposal, that Tesla’s engagement in Indonesia would extend past raw materials. If Tesla only wants to take raw materials, then the government was not too keen in pursuing a partnership.

Indonesia is also talking to CATL and LG Chem regarding their plans to create an EV battery supply chain, the Nikkei Asia reported. 

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