Articles in Category: Environment

We have covered the precious metals and palladium, in particular, a few times over recent months, not because we have suddenly become PGM investors (although looking at price performance, that would have been a fortunate move) but simply because they are the only metals sector showing any real dynamism.

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The base metals have at best been lackluster. Aluminum has been range-bound for much of the last nine months, as has most of the base metals complex.

Copper has perked up since about November on the back of expectations of a thaw in U.S.-China trade relations. Nickel got interesting toward the back end of August when the market reacted to news of an Indonesian export ban but has since sunk back.

Only the precious metals have risen and sustained their rises during the period — albeit for differing reasons.

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Environmental damage caused by mining and refining processes like smelting are not uncommon.

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In the last two years alone, one site lists 10 major tailings dam failures alone; environmental damage from tailing ponds is only the thin end of the wedge when it comes to the wider remit of potential environmental consequences arising from mineral extraction.

Yet not one of those events listed was in China, despite half the world’s metals being refined and produced there, and a sizable proportion of the world’s mines being in China.

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This morning in metals news, Tata Steel is making job cuts across its European operations, U.S. Steel announced it plans to reduce its greenhouse gas emissions by 20% by 2030 and copper ticked up again Monday.

Job Cuts Coming to Tata Steel’s European Operations

Steelmaker Tata Steel will cut jobs throughout its European operations, Reuters reported, where the company employs approximately 20,000 people.

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According to the report, Tata says there won’t be any plant closures.

U.S. Steel Announces Emissions Target

U.S. Steel announced last week it plans to cut emissions by 20% by 2030.

“The company has set a goal to reduce its global greenhouse gas emissions intensity by 20 percent, as measured by the rate of carbon dioxide (CO2) equivalents emitted per ton of finished steel shipped, by 2030 based on 2018 baseline levels,” the company said. “This target will apply to U. S. Steel’s global operations.”

The steelmaker also outlined initiatives toward that goal.

“U.S. Steel’s greenhouse gas emissions intensity reduction goal will be achieved through execution of multiple initiatives,” the company said. “These include the development of electric arc furnace steelmaking at U.S. Steel’s Fairfield Works and at Big River Steel, the first LEED-certified steel mill in the nation, in which U.S. Steel recently acquired a minority interest with an option to acquire the remainder over the next four years. Electric arc furnace steelmaking relies on scrap recycling to produce new steel products, capitalizing on steel’s status as the most recycled material on earth.  Further carbon intensity reductions are expected to come from the company’s introduction of state-of-the-art endless rolling and casting technology and construction of a cogeneration facility at its Mon Valley Works announced in May, as well as implementation of ongoing energy efficiency measures, continued use of renewable energy sources and other process improvements.”

Copper Makes Gains

Copper prices rose for the second straight session Monday, Reuters reported.

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LME three-month copper ticked up 0.1%, while SHFE copper rose 0.3%, according to the report.

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This morning in metals news, the United States Trade Representative will soon consider whether to extend tariff exclusions granted last year for imports of certain products from China, the GFG Alliance is aiming to consolidate its steel operations and make the new consolidated entity carbon-neutral by 2030, and LME copper prices continue to make gains this month.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

USTR to Consider Tariff Exclusion Extensions

Last December, the USTR granted tariff exclusions on $34 billion worth of imports from China.

With those exclusions set to expire later this year, the USTR will soon initiate a process to consider whether or not to extend them.

“The United States Trade Representative (USTR) will commence on November 1, 2019 a process for considering extending for up to twelve months certain exclusions from additional tariffs on Chinese imports that were granted last December and are set to expire on December 28, 2019,” the USTR said.

“In a Federal Register notice to be published this week, USTR will provide details on the process for submitting comments favoring or opposing specified tariff exclusions. The period for submitting comments will run from November 1, 2019 to November 30, 2019.”

GFG Alliance Eyes Carbon-Neutral Future

The GFG Alliance, which includes Liberty House steel plants around the world, is aiming to consolidate its steel production into a single global company: the Liberty Steel Group.

“A single global company with 18 million tonnes of rolled steel capacity annually is to be launched through a consolidation of GFG Alliance’s steel businesses, with an ambition to lead the industry towards a carbon-neutral future,” Liberty House announced Tuesday.

“The family-owned alliance led by Sanjeev Gupta today announces that Liberty Steel Group, which altogether employs 30,000 people in 10 countries, will be incorporated by the end of this year through a merger of GFG’s upstream and downstream steel manufacturing, mining and distribution businesses around the world.”

The new group will aim to be carbon-neutral by 2030.

“At the heart of the group’s mission will be an ambition to build on GFG’s existing GREENSTEEL strategy to aim for net carbon neutral status by 2030 – placing Liberty Steel Group on a pathway to become the first carbon neutral steel company in the world,” the company said. “This will include exploration of the best use of new technologies such as hydrogen generated from renewable power to produce steel.”

LME Copper Rises

The LME three-month copper price, after approaching MetalMiner’s short-term support price in early October, has since made incremental gains throughout the month.

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As of Monday, the LME three-month price rose to $5,910/mt, marking a 2.91% month-over-month increase, according to MetalMiner IndX data.

The Renewables Monthly Metals Index (MMI) slipped one point for an October MMI reading of 98.

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Glencore Signs Cobalt Supply Deal with China’s GEM

Mining giant Glencore has entered into a cobalt supply agreement with China’s GEM Co. Ltd. 

According to the miner, the five-year cobalt hydroxide deal calls for it to supply a minimum of 61,200 tons of cobalt between 2020 and 2024.

“GEM is very pleased to announce this long-term strategic co-operation with Glencore,” GEM Chairman Kaihua Xu said. “This agreement represents a major cornerstone in GEM’s cobalt sourcing strategy as it will support GEM’s continued contribution to the Chinese New Energy Market.

“In an ever-changing and fast evolving cobalt environment, GEM and Glencore have managed to maintain a very strong working relationship.

“By securing a key battery raw material, GEM clearly demonstrates its ability to implement and deliver its vision for an electrified, carbon-free transportation system.”

Nico Paraskevas, Glencore’s head of marketing for copper and cobalt, touted the partnership with the Chinese firm.

“The extension of our long established partnership with GEM further endorses Glencore’s important role in supplying the materials that enable the energy and mobility transition,” Paraskevas said. “Furthermore, this long term partnership provides Glencore with a stable outlet for a significant portion of its expected future Cobalt Hydroxide production.”

Earlier this year, Glencore announced a long-term cobalt supply agreement with the Brussels-based Umicore.

GOES

The GOES MMI, the index tracking grain-oriented electrical steel, fell 13 points for an October reading of 185.

The U.S. GOES price fell 6.6% month over month to $2,565/mt as of Oct. 1.

German steelmaker Thyssenkrupp, a producer of electrical steel, recently announced the mutual termination of the mandate of CEO Guido Kerkhoff, effective Oct. 1. Kerkhoff’s tenure ended after just over a year, having been appointed to the role in July 2018.

The news comes in what has been a challenging year for the German firm, which recently was relegated from the German blue-chip DAX index.

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Actual Metal Prices and Trends

U.S. steel plate fell 7.7% month over month to $736/st as of Oct. 1. Chinese steel plate fell 0.6% to $573.56/mt.

Korean steel plate fell 3.5% to $548.78/mt. Japanese steel plate fell 1.4% to $798.23/mt.

Chinese silicon rose 0.3% to $1,440.89/mt.

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Indian Prime Minister Narendra Modi’s doubling of India’s renewable energy target by 2022 has made global headlines.

At the United Nations Climate Action Summit earlier this week, the Modi said India was now aiming to install 450 GW of renewable energy by 2022, more than double the previously promised 175 GW, The Hindu reported.

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India had committed to creating 175 GW of green energy capacity under the Paris Climate Agreement in 2015. The country has about 77 GW of installed renewable energy capacity, more than double its capacity as of five years ago; projects in the pipeline will add about 60 GW in renewable energy capacity.

Addressing the UN Summit last Monday, Modi reiterated India’s seriousness about doing something concrete on the renewable energy front. He highlighted other promises, including India’s plans to spend about U.S. $50 billion “in the next few years” on the Jal Jeevan Mission to conserve water, harvest rainwater and develop water resources.

In addition, he announced two international initiatives, the first being a platform with Sweden and other countries, for governments and the private sector to work together to develop low0carbon pathways for industry, plus a second initiative called the Coalition for Disaster Resilient Infrastructure. The U.K., Australia and island nations such as Fiji and the Maldives will be part of this coalition.

The Paris Climate Agreement is aimed at strengthening the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.

Modi added that India had a capacity of 4 GW and that the country is well on its way of adding 100 GW of solar power by 2022.

India is the world’s third-largest source of greenhouse gases after China and the United States. Experts here point out that while the Indian prime minister’s aims are laudable, there still was a question mark on whether they could be practically achieved or not.

The country has moved on to renewable power over the last five years, banking on solar power to lead the transformation.

A recent report by the International Energy Agency on worldwide energy investment noted renewable power investments in India were much ahead of those for fossil fuel-based power for the third year in a row. Spending on solar energy had also surpassed spending on coal-fired power generation for the first time in 2018.

But India still relies heavily on coal-powered energy and a large chunk of investments are still being made in that sector. There are reports that coal demand in India will nearly double from 2020 to 2040.

The Hindu Business Line newspaper reported environmentalists and experts in India had mixed feelings about the prime minister’s target. The report quoted environmentalist Chandra Bhushan as saying Modi had given a “positive roadmap” for India. He said the promise of increasing renewable energy capacity to 450 GW showed Modi’s seriousness about reducing the carbon emissions.

Others quoted in the report, though, were not so sure, arguing that renewable energy was costly and achieving the target may not be easy to achieve. NGO Social Action for Forests and Environment founder Vikrant Tongad expressed support for the move, but expressed reservations about how money will be raised to actualize the goal.

Environmental activist Gaurav Bansal told the Hindu Business Line that instead of blindly setting a target of increasing renewable energy, the Indian government must look into the concern that it does not harm the environment.

Meanwhile, showing its determination to go ahead with the renewables plan, Modi remotely inaugurated the Gandhi Solar Park at the UN headquarters in New York, the Hindustan Times reported.

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The inauguration came as part of the Gandhi@150 commemorative event marking the 150th birth anniversary of Mahatma Gandhi. The 50 kilowatt hour (kWh) rooftop solar park was built at a cost of U.S. $1 million. Each panel is powered to reach the max of 50 kWh of generation power, which will take the park’s annual output up to 86,244 kWh.

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This morning in metals news, China’s trade activity with respect to aluminum and copper slowed in August, Nucor announced Chairman and CEO John Ferriola will be retiring at the end of the calendar year and residents of an Arizona town expressed staunch opposition to a proposed aluminum recycling plant.

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China’s Aluminum Exports, Copper Imports Fall

China’s imports of copper and exports of aluminum fell in August as the trade war with the U.S. escalated with the most recent exchange of tariffs.

China’s copper imports fell 3.8% in August compared with the previous month, Reuters reported, while aluminum exports fell 4.3% compared with July totals.

Nucor CEO to Retire

Nucor Chairman and CEO John Ferriola will retire at the end of this year, the company reported.

Ferriola has served as chairman since 2014 and CEO since 2013.

Nucor’s Board of Directors elected Leon J. Topalian, 51, to be president and chief operating officer, effective Sept. 5, 2019. Topalian will succeed Ferriola as CEO on Jan. 1, 2020.

Residents Oppose Proposed Arizona Aluminum Recycling Plant

Locals in the Arizona farming town of Wenden have come out in opposition to an aluminum recycling plant proposed for the town, azcentral.com reported.

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According to the report, residents urged officials from the Arizona Department of Environmental Quality not to grant an air-quality permit for the proposed Alliance Metals plant.

Before we head into the Labor Day weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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The U.K.’s Department for Business, Energy and Industrial Strategy (BEIS) has issued a call for evidence to help inform a planned £250 million Clean Steel Fund.

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According to the BEIS, the fund will “support the UK steel sector to move to a decarbonisation pathway compatible with net zero.”

The government is seeking evidence to help it develop the “detailed design” of the fund, including feedback regarding potential “barriers to realising clean steel ambitions” and “the opportunities to be gained in overcoming these.”

The U.K. has set a target to reduce greenhouse gas emissions by 100% — compared with 1990 levels — by 2050, pursuant to the Climate Change Act of 2008.

According to the BEIS, the primary goals of the proposed Clean Steel Fund are to help facilitate the transition to “lower carbon iron and steel production” to help the sector reach net zero emissions (per the Climate Change Act) and to maximize “longevity and resilience” in the sector by “building on longstanding expertise and skills and harnessing clean growth opportunities.”

“We also intend to establish a new £100 million Low Carbon Hydrogen Production Fund, to support the deployment of low carbon hydrogen production at scale,” the BEIS said. “This could enable a pathway to lower carbon steel production and support broader efforts to decarbonise industry.”

UK Steel, an industry group that champions U.K. steelmaking, responded positively to the call for evidence.

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“Today’s announcement of the Clean Steel Fund is extremely positive news for UK steelmakers and the whole of the UK’s decarbonisation efforts,” UK Steel Director General Gareth Stace said. “The fund is a vital step towards further reducing our carbon footprint here in the UK and will cement our position in a future low-carbon world.”

The BEIS’s 22-page call for evidence document can be found here.

Following a decade of hype, there remains huge debate about the viability of carbon capture as a solution to carbon emissions from coal-fired power stations.

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A recent article in the Financial Times lays out both sides of the argument. On the one hand, there is the one put forward by the coal lobby, broadly drawing on the work of coal miners in the form of Coal21, an industry body in Australia backed by 26 mining groups (including BHP, Anglo American and Glencore). On the other hand, there is a more disparate group of academics, research bodies and NGOs who rubbish the miners’ position as untenable.

Coal21, however, is pouring a considerable amount of money into research, lobbying and, most controversially, marketing in an effort to influence the debate in its favor.

The industry club has invested $4 million in advertising to promote the prospects for carbon capture and sequestration (CCS) as a solution to coal’s carbon emissions. That comes in addition to some $400 million BHP has pledged over five years to reduce its emissions and those of its customers.

Meanwhile, Glencore, the world’s largest coal exporter, is building a pilot plant to capture and store carbon emissions from a nearby coal-fired power station in the Surat basin in Australia, funded in part by Coal21. The plan is to capture some 200,000 tons a year of carbon, but commercial projects in Canada and the U.S. are said to be running at 50% efficiency, at best (in one case, little more than 5%). Glencore will need new technology if it hopes to reach the 90% efficiency CCS plants are headlined to achieve.

Even then, grave doubts remain as to their economic viability for coal-fired power generation.

Source: Financial Times

CRU research is cited by the FT estimates the technology is only viable if the carbon dioxide (CO2) can be sold to other industries as a commercial source of CO2. Generally, it is either simply stored underground or used to boost oil field production by pumping sequestered CO2 back into oil reservoirs.

Without the value generated by selling CO2 to other industries, the cost of the technology needs to fall by 50% to make pure CO2 storage economical, the Financial Times reports. Cynics suggest miners’ focus on CCS as a solution has more to do with countering what they see as an increasingly negative view of coal use as the consequences of rising CO2 levels is more widely accepted.

Coal miners may be facing a losing battle, regardless of public perceptions.

The article reports that in many parts of the world, solar, wind and battery storage produces electricity at lower cost than coal, not to mention the advantages of lower CO2 producing natural gas and the latter’s greater flexibility to provide swing production to balance renewables’ lower predictability.

Although huge sums have been poured into CCS research and multiple pilot plants have been set up around the world, the technology is still less efficient than necessary and more expensive to operate than required if it is to be economical (certainly for coal-fired power generation).

But there are other industries where large quantities of CO2 are generated. The arguments for CCS may be on a firmer footing for industries like cement, steel, and oil and gas.

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If the technology can be further refined to reduce emission from these industries, that would be a huge gain — but for coal-fired power stations, CCS looks like a lost cause.