Articles in Category: Green

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This morning in metals news, copper prices were up slightly Monday, Tokyo Steel held prices steady for the fourth straight month and Rio Tinto responds to criticism about carbon emissions stemming from its customers’ operations.

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Copper Prices

LME copper traded up 0.4% on Monday, Reuters reported, reaching $6,458 per ton.

Citing Society Generale analyst Robin Bhar, the report notes the second quarter of the year typically features conditions conducive to price support for copper.

Holding Steady

Japan’s Tokyo Steel has announced it is holding prices steady for its steel products for the fourth straight month, according to another Reuters report.

Kiyoshi Imamura, managing director of Tokyo Steel, was quoted as saying that domestic construction demand was “sluggish due to higher inventories and delays in some projects because of shortage of labour and some materials.”

Rio Answers Emissions Criticism

Rio Tinto has faced some criticism from environmental activists, who have called for the iron ore miner to bear more responsibility for the emissions caused by the miner’s customers.

Rio, however, says it can’t be held responsible for what customers do with their iron ore, the Australian Financial Review reported.

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Rio Tinto Chairman Simon Thompson wrote a letter to shareholders in which he explained that responsibility lies “within the control of our customers, not Rio Tinto,” he was quoted as writing.

The Renewables Monthly Metals Index (MMI) fell one point this month for an MMI reading of 103.

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The Hunt for Cobalt

As noted routinely in this installment of the MMI series, cobalt is a coveted material for its use in a wide variety of high-tech applications, from cellphones to laptops and much more.

A majority of the world’s cobalt is mined in the Democratic Republic of the Congo, where political instability and the government’s revision of its mining code (increasing royalty rates for cobalt and other materials) have posed business challenges to miners.

As such, it’s not surprising that some are looking for new sources of cobalt.

According to a Bloomberg report, a new startup powered by a coalition of billionaires, including Bill Gates, is seeking to do just that.

The startup, KoBold Metals, aims to create a “Google Maps for the Earth’s crust,” according to the report, in an effort to locate new sources of cobalt.

“KoBold Metals applies statistical modeling, big data aggregation, and basic science to materially improve the pace and efficacy of natural resources exploration,” KoBold’s website states. “We are applying our proprietary platform, Machine Prospector, to explore for new sources of ethical cobalt from reliable jurisdictions.”

The approach would also offer more specific focus to cobalt, as opposed to mining of the material as a byproduct of copper or nickel, as is typically the case.

“People just haven’t looked for the stuff,” KoBold CEO Kurt House told Bloomberg. “There’s very limited history of exploration at all outside of piggybacking on nickel and copper deposits.”

Cobalt Price Slides

Sticking with the cobalt theme, the price of the coveted material plunged throughout the second half of 2018 — and a recovery is not expected in the near term.

According to Reuters, the cobalt price fell to a two-year low of $32,000 per ton, down from $100,000 per ton in the first half of 2018.

What contributed to the plunge? According to the report, high prices led to an uptick in supply. However, cobalt demand is expected to exceed supply in the long term, according to the report.

GOES Prices Fall

The price of grain-oriented electrical steel (GOES) fell 4.1% month over month to $2,360/mt as of March 1.

The GOES MMI fell 8.2% for a March value of 168.

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Actual Metal Prices and Trends

Japanese steel plate fell 2.3% month over month to $772.30/mt as of March 1. Korean steel plate rose 1.9% to $586.67/mt. Chinese steel plate increased 3.8% to $642.72/mt.

U.S. steel plate fell 1.8% to $997/st.

The Chinese neodymium price fell 1.8% to $58,29.10/mt. Chinese silicon rose 0.2% to $1,539.54/mt, while Chinese cobalt cathodes jumped 0.2% to $99,397.20/mt.

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This morning in metals news, the U.S.’s trade deficit with China reached an all-time high in 2018, one analyst says there’s a 35% chance U.S.-China trade talks will break down and aluminum maker Norsk Hydro’s technology pilot is up for a Green Award in the category of Innovation of the Year.

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U.S. Notches Record Trade Deficit with China

Among President Donald Trump’s oft-stated goals vis-a-vis trade talks with China is the reduction of the U.S. trade deficit with China.

However, despite a series of tariffs aimed at Chinese goods (the U.S. imposed a total of $250 billion worth of tariffs on goods from China last year), the deficit reached an all-time high in 2018.

According to U.S. Census Bureau data, the trade deficit rose from $375.6 billion in 2017 to $419.2 billion in 2018.

Communication Breakdown

Optimistic reports have come out of the White House of late with respect to the ongoing trade talks with China, with some media reports indicating a trade deal could be reached by the end of this month.

However, according to one analyst, there’s still a sizable chance talks could break down.

According to Eurasia Group analyst Jeff Wright, there is a 35% chance the talks will break down before a deal can be reached, Yahoo Finance reported.

“The current momentum behind a deal does not reduce the risk of major frictions once the two sides turn towards implementation,” Wright told Yahoo Finance.

In addition to the trade deficit, the U.S. has raised a bevy of allegations related to what it deems as China’s unfair trade practices, from intellectual property theft to forced technology transfer, among other complaints.

In August 2017, the United States Trade Representative, at the direction of the president, opened a Section 301 investigation into China’s trade practices; the investigation ultimately yielded the total $250 billion worth of tariffs imposed last year.

Norsk Hydro Nominated for Green Award

Aluminum maker Norsk Hydro was nominated for a Green Award in the category of innovation for its technology pilot in Karmøy, Norway.

“A lot of Hydro people have put so much effort into making the technology pilot a reality. They deserve this award,” said Thorvald Mellerud, head of technology in Hydro Primary Metal.

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The operation in Karmøy has been fully operational since June 2018 and “aims to verify at an industrial scale the world’s most energy and climate-efficient technology for aluminium production,” Norsk Hydro said in a release, adding that energy consumption will be reduced by 15%.

Cutting through the polarized hype on climate change is one of the toughest challenges for firms trying to position themselves and their enterprises for the future.

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On the one hand there is a broad green or environmental lobby, which rightly shouts out the risks of rising global temperatures and the link greenhouse gases play in that rise.

Unfortunately, at the same time, many in that lobby claim a switch to a zero-carbon future would be simple.

On the other hand there are complete naysayers who do not even accept there is a climate change issue to address, let alone have any interest in finding less environmentally polluting options.

Governments rarely help; in fact, the U.S. is actively rolling back previous legislation, apparently in a perverse belief that if you say something is fake news enough, it actually does become fake news.

In many other countries, governments act with varying degrees of commitment, but at times appear to promote one solution while still supporting another cause of pollution in a different part of the economy. As a result, policies are not joined up.

Oil majors can hardly be said to be neutral in this debate, but their periodic reports are the subject of so much scrutiny that they have to be reasoned and their assumptions have to be logical or they would suffer ridicule.

So, when Andy Brown, Shell’s upstream director, told The Telegraph that zero net emissions are technologically and economically possible by 2070, his comments at least bare scrutiny.

He went on to add electric power would have to jump fivefold by that time. Wind and solar would have to increase by 50 times. It would require 10,000 Carbon Capture Sequestration (CCS) projects able to sequester six gigatons of carbon each year, accompanied by sweeping reforestation for such a goal to be reached, even over such an extended timeframe.

In the intervening decades, global temperatures may well have risen past the point of no return.

Ranged against that goal is the relentless demand for autos around the world. The same article points out a chilling statistic: Americans have roughly 900 cars per thousand head of population, yet the current figure is closer to 150 for China and 25 for India — and these rising nations aspire to The American Dream as much as anyone.

However, we should not fall into the same trap as many when looking at global warming; automobiles plays their part, but it is a relatively small part. Transportation — trucks and ships — play a bigger role, and the agricultural industry is even larger. If humans were to switch to a plant-based diet, we would buy ourselves decades to combat climate change.

Even so, for the energy industry, transportation and petrochemicals remain the focus. In an industry that operates on decade-long investment planning, it is no surprise that firms are changing priorities with increasing speed.

Saudi Aramco plans to switch 2 million to 3 million barrels per day to petrochemical production over the next 10 years, and potentially 7 million barrels per day over two decades. This is a staggering amount, The Telegraph observes — Saudi Arabia’s entire oil exports in January were 7.2 million barrels per day.  The Kingdom is also launching a $150 billion dash for lower-polluting natural gas, with plans for production to reach 23 billion cubic feet per day within a decade, equal to 60% of today’s global market for liquefied natural gas.

The following graph, courtesy of The Telegraph, illustrates the motivation for the shift in priorities.

Source: The Telegraph

Rarely has the energy industry been at such a crossroads and never has the oil industry faced such an uncertain future. Even in the febrile market of the early 1970s following what was then deemed an energy crisis did oil companies seriously doubt there would be a need for their product in the decades to come.

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But today there are genuine questions facing planners about what product mix oil companies should optimize for by the middle of this century, let alone what the landscape will look like 10 years from now.

The Renewables Monthly Metals Index (MMI) fell two points this month, down to a November MMI reading of 101.

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Cobalt Mining

According to the head of commodities trader Trafigura, unregulated cobalt mining cannot be “wished away,” the Financial Times reported last month.

In 2017, nearly 60% of the world’s cobalt was mined in the Democratic Republic of the Congo (DRC), where smaller artisanal mines are often unregulated, leading to routinely unsafe working conditions and, according to reports by advocacy groups, the use of child labor.

According to the U.S. Geological Survey, 64,000 tons of cobalt were mined in the DRC last year out of a global total of 110,000 tons. Cobalt is coveted for its use in electric vehicle batteries.

According to Jeremy Weir, the head of Trafigura, cobalt demand is expected to at least triple by 2025.

“The reality is that there are hundreds of thousands of people in the DRC who earn a living through work in the ASM sector,” Weir was quoted as saying. “It’s illegal in many cases; it’s unregulated and can be very dangerous. But it can’t be wished away.”

Last November, Amnesty International released a report that offered criticism of a number of industry giants, including Microsoft, for a lack of progress with respect to assuring their cobalt supply chains are ethical and conflict-free. Apple and Samsung were listed among companies that had taken “adequate” steps toward that goal.

“Our initial investigations found that cobalt mined by children and adults in horrendous conditions in the DRC is entering the supply chains of some of the world’s biggest brands. When we approached these companies we were alarmed to find out that many were failing to ask basic questions about where their cobalt comes from,” Seema Joshi, head of business and human rights at Amnesty International, was quoted as saying last year.

Since then, the issue has remained on the international radar.

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Who would have thought wind’s transformation from subsidy-supported to self-financing power source would happen so quickly – not this publication, that’s for sure.

Apart from diehard environmentalists, most consumers have been opposed to renewables on the basis they cost significantly more and turbines are an eyesore on the landscape.

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But in the span of less than 10 years, public opposition has declined. Opposition has not gone away entirely, but it has softened as we have become more familiar with the sight of slowly rotating turbine blades on the horizon and with the realization that its costs are falling dramatically.

A recent article in The Telegraph reports on how the cost of power production from onshore wind farms has dropped so far it undercuts conventional coal, natural gas and nuclear options.

The below graph from 2015 shows onshore wind as the cheapest option; costs have come down further since then.

Source: Wikipedia

Calling it the “subsidy-free revolution,” the Telegraph article reflects our own surprise at how quickly the change has taken place.

To be fair, offshore power still requires some subsidy because of the greater cost of installation and maintenance. Even here, costs continue to fall and subsidy is a route the authorities prefer to entertain because of public opposition to what was seen as the blight of onshore turbines dotting the landscape.

In large part, this is because turbine sizes have increased and, as a result, efficiencies have increased.

Source: The Telegraph

The industry is seeing it as a major investment opportunity, generating jobs while at the same time reducing the country’s overall carbon emissions.

A figure of £20 billion covering both onshore wind and solar over the next 10 years is mooted, all of which would be subsidy-free.

The latest figures are sounding the death knell for nuclear power in the U.K., but as usual the government hasn’t caught up with the numbers.

Nuclear power is costing a massive £92.50 per megawatt hour and is partly justified on the basis that a base load of power is always required to fill in renewables variability.

However, battery parks like Glassenbury in Kent are springing up that can meet gaps in demand, but nothing like a 2 GW nuclear power plant; still, a few MW here and there is slowly adding up.

But, like renewables, costs will need to come down for investment to flow into battery parks. That is, they’ll need to come down to the extent required to negate the need for quick fireup of conventional power sources to fill in gaps during cold snaps or, as renewables rise, as a percentage of the whole to fill in for periods of low wind or at night for solar.

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Still, a low-carbon future, at lower power costs and with the benefit of economic growth from investments – what’s not to like?

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Full disclosure – I am an owner of an iPhone, iPad and Macbook — and I don’t mind admitting it, a  longtime fan of Apple’s products — but even I cringe when the firm claims to have “worked with other metal companies to develop the proprietary technique, which allows for the generation of ‘green’ aluminium for the first ever time.”

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The claim follows the announcement late last week that at its Pittsburgh research center, Alcoa has developed a replacement for the carbon anodes used in the smelting of alumina to aluminium.

The carbon anode has the important role of delivering a strong electric current through the melt, but in the process carbon is converted to carbon dioxide and considerable levels of greenhouse gas emissions are produced.

But although Apple is said to be investing C$13 million (U.S. $10 million) in the joint venture called Elysis, it is a drop in the ocean compared to the C$120 million of funding from the governments of Canada and Quebec and, further, the C$55 million invested by Alcoa and Rio Tinto in order to achieve commercialization of the technology over the next five years.

Indeed, Alcoa and Rio each have a 48% stake in the JV, with the rest owned by the government of Quebec, so quite how Apple can claim any fame in this venture is hard to see.

OK, Apple’s hubris aside: is this a step forward in lowering aluminum’s carbon footprint?

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There’s a new trend on the solar energy harnessing front in India.

Like in China and a few of the Southeast Asian nations, India is seeing a spurt in what are called “floating solar plants.”

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In late 2017, the country inaugurated its largest such floating plant, a 500 kw (kilowatt peak) by the Kerala State Electricity Board (KSEB). This one floats on 1.25 acres of water surface of a reservoir, and has 1,938 solar panels, which have been installed on 18 ferro cement floaters with hollow insides. The project uses high-efficiency solar panels and a floating substation has been set up on the reservoir itself to convert the output into 11 kV.

While the concept of floating solar plants in India is old — it was first mooted by Tata Power way back in 2011 – they caught the fancy of energy developers only now. The Tata plant is on the backwaters of a dam located close to Tata’s hydro-electricity plant.

A second pilot project was started on the banks of the Sabarmati river in the province of Gujarat in 2012. It was awarded to SunEdison at a cost of about U.S. $2.7 million. The pilot project was developed by Gujarat State Electricity Corporation (GSECL) with support from Sardar Sarovar Narmada Nigam Ltd. (SSNNL).

But it’s only in the last few months that the activity has picked up. The government has floated eight floating solar power projects of capacities ranging between 2 MW to 1,000 MW.

The floating plants tie in with the Indian Government’s overall, rather ambitious, renewable energy plan.

India and China are both leading in this race. In 2017, Asia accounted for nearly two-thirds of the worldwide increase in renewable energy generating capacity, according to a report published in April by the International Renewable Energy Agency. Renewable energy capacity has nearly doubled over the past five years, reaching 918GW in 2017.

According to media reports, renewable energy firm Avaada Power is now in talks with various provincial governments in India to set up floating solar projects.

The company wants to increase its installed solar capacity to 5,000 megawatts (MW) in the next four years, from 1,000 MW at present, and a major chunk will come from solar energy. The floating solar segment has a potential to generate 300 gigawatts (GW) of power across the country.

Many provincial governments are also expected to call for tenders in this space soon. Also, India’s National Hydroelectric Power Corporation (NHPC) has announced its plans to set up 600 MW of floating solar capacity at the 1,960-MW Koyna hydel power project in the State of Maharashtra.

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Experts are optimistic that with India’s large network of water bodies, this trend of floating solar plants will become the norm soon, though care has to be taken while setting them up so that they do not affect marine life.

The Renewables Monthly Metals Index (MMI) rose seven points on the month, hitting 107 for our April reading.

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Within the basket of metals, Korean, Chinese and U.S. steel plate posted price increases, while Japanese steel plate traced back slightly. U.S. steel plate jumped significantly, posting a 13.6% increase for the month.

U.S. grain-oriented electrical steel (GOES) coil fell on the month, while neodymium picked up by 0.7%.

The always volatile cobalt price shot up significantly last month, rising 10.6%.

Tesla Strategy Places Premium on Neodymium

As we mentioned earlier this week, growing demand for neodymium from electric vehicle (EV) maker Tesla will put even more pressure on what is already a constrained market.

In short, that means rising prices for the material, reflected in this month’s activity.

Tesla is looking to neodymium for magnetic motors in its Model 3 Long Range cars, as mentioned in the Reuters report we cited Tuesday. Last year, supply fell short of demand by 3,300 tons, according to that report.

DRC Looks to Shake Up 2002 Mining Charter

When it comes to anything cobalt, the Democratic Republic of Congo is typically at the center, being the source of the majority of the world’s cobalt.

Earlier this week, MetalMiner’s Stuart Burns wrote about President Joseph Kabila’s move to readjust the nation’s 2002 mining charter to, essentially, secure a bigger piece of the pie vis-a-vis the country’s vast mineral resources.

It comes as no surprise that the multinational miners doing business in the DRC aren’t exactly thrilled by the proposition of increased royalties and levies. However, as Burns noted, value of materials like cobalt and the demand they draw, combined with their relative scarcity, means such multinationals will continue to do business there, no matter what happens with the charter.

“If the state takes a little more of the pie, it will probably be reflected in prices,” Burns wrote. “But with limited alternatives for products like cobalt, it is unlikely to dent mining companies’ enthusiasm for investing in the DRC.”

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Actual Metal Prices and Trends

Within the basket of metals, Korean, Chinese and U.S. steel plate posted price increases, while Japanese steel plate traced back slightly. Korean plate rose 6.6% to $650.16/mt. Chinese plate ticked up only slightly, by 0.1%, to $716.64/mt.

U.S. steel plate jumped significantly, posting a 13.6% increase for the month, up to $920/st.

U.S. grain-oriented electrical steel (GOES) coil fell 1.9% to $2,597 on the month, while neodymium picked up by 0.7% to $71,265.50/mt.

The always volatile cobalt price shot up significantly last month, rising 10.6% to $98,274/mt.

The U.S. Department of Commerce. qingwa/Adobe Stock

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

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MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel