Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Long article in today's FT
..."How Germany’s steelmakers plan to go green
Europe’s biggest producer is moving away from carbon-intensive blast furnaces and towards hydrogen-powered processing..."
The gist :
- steel production is 7% of global CO2 emissions, 25% of Germany's;
- carbon credit offset (currently free/subsidized) will be phased out, therefore production > more expensive;
- historically, BFO was most popular route (1,400 units worldwide), because coal was a cheaper input than the electricity needed for EAF , feedstock scrap iron;
- solution ? switch to DRI, using sustainable hydrogen. Ta - dah !
- problem (for Germany) - how to produce H cheaply and at scale - so far unresolved;
- side-comment : DRI works with blue/grey hudrogen (ex natural gas) as well as 'green ' hydrogen (ex renewables), that's why most existing DRI plants (2022) are in gas-rich countries :
mtpa : India 40, Iran 35, Russia 8, Saudi 7, Egypt 6 , Mexico 5, US 5, Qatar 2, Trinidad 2.
[Ed.: India / Iran lead the pack because they have an historic local industrial base/demand; note all these DRI users total barely 110 mtpa];
- for Germany, there's an issue over availability/cost of its 'mandated/proposed' green hydrogen : Thyssen Krupp points out that its tender for 143K tonnes hydrogen feedstock alone would = 15% of all planned H production by 2030, which itself needs 500 x wind turbines;
- current H production (2022) meets only 2% of Europe's energy consumption....and 96% of that 2% is blue/grey ie from natural gas.....;-<
- forecasters estimate that 7% of Germany electricity would need to be dedicated/diverted to hydrogen production...so (ironically), the target of ending (dirty) coal for electricity is quietly being pushed back from 2030 to 2038...
- Germany's under more pressure to resolve this quandary , because it (still) has a sizeable manufacturing base (20% of economy), vs barely 10% in e.g. US, France or the UK [Ed.: we've offshored to China, so we have offshored this particular problem, but face the same self-inflicted immiseration in the long run, IMO...;-< ;
- article concludes that the solution (for Germany and maybe others in the Western consuming nations) is tariff barriers to make ITS steel still commercially viable. 'Going green' is desirable, the problem is 'how to get from here to there' ?
The article is specifically about Germany's problems and a (possible) solution for Germany, but it throws useful light/info on issues facing others.
The biggest unaddressed elephant in the room is the emergence of a 'cleaner, greener, objectively cheaper' solution elsewhere (mainly in the M East).
A second unaddressed elephant in the room is that wherever DRI is seen as the solution, the other key feedstock that will AIUI improve metrics (cost/quality/price premium/emissions) is iron ore....
GLA and ATB
Long article in today's FT
..."How Germany’s steelmakers plan to go green
Europe’s biggest producer is moving away from carbon-intensive blast furnaces and towards hydrogen-powered processing..."
The gist :
- steel production is 7% of global CO2 emissions, 25% of Germany's;
- carbon credit offset (currently free/subsidized) will be phased out, therefore production > more expensive;
- historically, BFO was most popular route (1,400 units worldwide), because coal was a cheaper input than the electricity needed for EAF , feedstock scrap iron;
- solution ? switch to DRI, using sustainable hydrogen. Ta - dah !
- problem (for Germany) - how to produce H cheaply and at scale - so far unresolved;
- side-comment : DRI works with blue/grey hudrogen (ex natural gas) as well as 'green ' hydrogen (ex renewables), that's why most existing DRI plants (2022) are in gas-rich countries :
mtpa : India 40, Iran 35, Russia 8, Saudi 7, Egypt 6 , Mexico 5, US 5, Qatar 2, Trinidad 2.
[Ed.: India / Iran lead the pack because they have an historic local industrial base/demand; note all these DRI users total barely 110 mtpa];
- for Germany, there's an issue over availability/cost of its 'mandated/proposed' green hydrogen : Thyssen Krupp points out that its tender for 143K tonnes hydrogen feedstock alone would = 15% of all planned H production by 2030, which itself needs 500 x wind turbines;
- current H production (2022) meets only 2% of Europe's energy consumption....and 96% of that 2% is blue/grey ie from natural gas.....;-<
- forecasters estimate that 7% of Germany electricity would need to be dedicated/diverted to hydrogen production...so (ironically), the target of ending (dirty) coal for electricity is quietly being pushed back from 2030 to 2038...
- Germany's under more pressure to resolve this quandary , because it (still) has a sizeable manufacturing base (20% of economy), vs barely 10% in e.g. US, France or the UK [Ed.: we've offshored to China, so we have offshored this particular problem, but face the same self-inflicted immiseration in the long run, IMO...;-< ;
- article concludes that the solution (for Germany and maybe others in the Western consuming nations) is tariff barriers to make ITS steel still commercially viable. 'Going green' is desirable, the problem is 'how to get from here to there' ?
The article is specifically about Germany's problems and a (possible) solution for Germany, but it throws useful light/info on issues facing others.
The biggest unaddressed elephant in the room is the emergence of a 'cleaner, greener, objectively cheaper' solution elsewhere (mainly in the M East).
A second unaddressed elephant in the room is that wherever DRI is seen as the solution, the other key feedstock that will AIUI improve metrics (cost/quality/price premium/emissions) is iron ore....
GLA and ATB
(1) There appears to have been some kind of breakdown in comms surrounding Big Den's recent (result-light) visit to the UAE, suggesting that the visit may not have gone totally to plan. Senior heads have rolled as a result.
Per Brazzanews :
.." diplomatic sleuths do not hesitate to speak of a dysfunction within the Ministry of Foreign Affairs, the Presidency of the Republic and the Ministry of International Cooperation and promoting Public-Private Partnership. What's more, a lack of communication and sharing of information, particularly between four key figures, Bienvenu Okiemy, Françoise Joly, Denis Christel Sassou and Jean-Claude Gakosso, respectively diplomatic advisor to the President of the Republic, advisor and personal representative of the President of the Republic for international affairs, minister of international cooperation and the promotion of public-private partnership, and finally minister of Foreign Affairs, Francophonie and Congolese Abroad. According to some, "no form of coherent communication seems to exist and each of them acts more or less autonomously." #Chezmoiaucongo
2 x senior diplomats have reportedly been sacked (perhaps by 'the Chief' - Big Den) and Min of Foreign Affairs is rumoured to be in the line of fire....
(2) Meanwhile, Little Den trumpets this recent visit, by a party led by the Vice-Governor (CCP representative) of Jiangsu province, as part of his promotion of inward investments.
May mean nothing, but Jiangsu province is home to China's biggest private sector steel group, Shagang Group, with a $ 47 Bn turnover.
Things usually happen when inclination coincides with opportunity. As ever with ZIOC, it's hard to figure out how far down the road we are....
GLA
From today's Brazzanews, unusually detailed/pointed criticism , starting with 'big picture' stuff :
https://twitter.com/brazzanews/status/1760242981825573127
.."The fiasco of President Denis Sassou Nguesso's last trip to the United Arab Emirates, the silence of parliament and the two-speed justice system on the inextricable situations experienced by the Congolese speaks volumes. The Congolese waited in vain for their head of state's trip to the United Arab Emirates to benefit from an exhaustive report. The national media in particular, the written press and online channels have remained silent. They did not echo any agreement whatsoever. The president's bag came back empty, one must believe.
A 7-day stay without convincing results from the point of view of the profits that the Congolese can draw from it suggests that it was for a check-up and secret financial transactions that Mr. Sassou went to Abu Dhabi, like this is done often. The unease is still palpable. The clan no longer knows which way to turn. ..."
then on to various bits of local malfeasance/poor governance.
(Mind you, folks overseas probably say much the same about the UK, these days ;-
Well....
- it's interesting to me that despite a 17% shareholding AND offtake arrangement, GLEN's stake in HZM doesn't appear to figure in its Resources statement, discussed a few days back
https://www.glencore.com/.rest/api/v1/documents/static/a53e27b1-6025-4ef2-9be8-f3be543dfb26/GLENCORE-Resources-and-Reserves-report-2023.pdf
where there was discussion about the significance (if any) of the earlier comment
'Glencore is no longer an active participant in the previously-disclosed Zanaga project'...
It would seem that GLEN can be actively involved in a project under development and not feel obliged to disclose it, AFAICS.
So, why the change , for Zanaga, now?
HTH
MBS and MBZ may (or may not) get along locally, but they (and other Gulf SWFs) can clearly co-operate when it suits....
https://www.breakingtravelnews.com/news/article/abu-dhabi-sovereign-wealth-fund-in-talks-for-heathrow-airport-stake-alongsi/
.."Reports suggest that the Abu Dhabi sovereign wealth fund is considering an investment in London’s Heathrow Airport, potentially joining forces with Saudi and Qatari investors.
The potential deal, as reported by Bloomberg, could see the UAE’s Mubadala Investment Company partnering with Saudi Arabia’s Public Investment Fund and Qatar’s Investment Authority to acquire stakes in the West London Hub..."
GLA
Meawhile, this development elsewhere may be something of a negative for GLEN's interest (or otherwise) in being involved with a greenfield project .
"Glencore-backed nickel miner Horizonte issues finance warning"
I don't follow HZM, but there seems to have been a serious blow-out on project development costs (doubling to $ 1 Bn) and first production - already postponed to Q3 2024 - has now been pushed back to Q 1 2026.
"The mismanaged budgeting is a blow to Glencore, which holds 17.7 per cent of the company’s shares and is entitled to future supply from the mine for 10 years."
It's not clear from the article what the causes of the delay/over-runs are, hopefully there's no read-across to ZIOC's greenfield site.
If the ultimate cause of the go-slow is prospective over-supply of nickel, the same cannot be said AFAICS for 'green ore',
quite 'au contraire' in fact.
GLA
Meawhile, this development elsewhere may be something of a negative for GLEN's interest (or otherwise) in being involved with a greenfield project .
"Glencore-backed nickel miner Horizonte issues finance warning"
I don't follow HZM, but there seems to have been a serious blow-out on project development costs (doubling to $ 1 Bn) and first production - already postponed to Q3 2024 - has now been pushed back to Q 1 2026.
"The mismanaged budgeting is a blow to Glencore, which holds 17.7 per cent of the company’s shares and is entitled to future supply from the mine for 10 years."
It's not clear from the article what the causes of the delay/over-runs are, hopefully there's no read-across to ZIOC's greenfield site.
If the ultimate cause of the go-slow is prospective over-supply of nickel, the same cannot be said AFAICS for 'green ore',
quite 'au contraire' in fact.
GLA
.."detractors ( TW, EX,TA,L, etc etc) which have contributed..."
Can't speak for anyone else you've mentioned, but I fail to see how my pointing out discrepancies, inconsistencies, falsehoods or implications of things SYME/AZ has done, said or RNS'd is a 'contribution' to the present situation people find themselves in.
GLA
From today's FT
‘Strings attached’: Saudi Arabia steps up demands in tech deals with China"
..... There is a hidden motivation for the increased investment relationship between China and Saudi Arabia,” said Chris Vassallo, a researcher at the Asia Society Policy Institute’s Center for China Analysis. “The kingdom is maybe sitting on a large pile of renminbi from selling oil to China, the uses of which are not manifold. One way is to spend on Chinese goods and services.”
'Every little helps'.
GLA
From today's FT
‘Strings attached’: Saudi Arabia steps up demands in tech deals with China"
..... There is a hidden motivation for the increased investment relationship between China and Saudi Arabia,” said Chris Vassallo, a researcher at the Asia Society Policy Institute’s Center for China Analysis. “The kingdom is maybe sitting on a large pile of renminbi from selling oil to China, the uses of which are not manifold. One way is to spend on Chinese goods and services.”
'Every little helps'.
GLA
Ashmore on Argentina
"Argentina: The Treasury reached an ARS 2trn primary surplus in January, the first monthly surplus excluding interest payments since 2011, a sign that the country is moving forward with its aggressive fiscal consolidation despite political challenges. Argentinian Eurobonds rallied last week after reports that Milei was considering breaking down the omnibus bill into several “digestible” bits and deepen its alliance with Macri’s Juntos por Cambio, a pragmatic turn. CPI inflation increased to 254% yoy in January, from 211% in December, slightly less than expected. In mom terms, CPI inflation fell from 25.5% to 20.6%."
GLA
.."Its AZ and some investors investing €1.5 million so the Stock Company can buy the inventory..."
It may be semantics, but surely its more a case of AZ and some investors putting up a security margin to encourage the lender to provide finance so the Stock Company can buy the inventory...?
Priming the pump, to coin a phrase.
AFAICS
Let's see if history rhymes.
Remember this article ?
https://www.sciencedirect.com/science/article/pii/S2214790X22001113
"The South–South investment that never happened: Vale in Guinea"
.."In Agnelli's strive to convince shareholders about the importance of investing in Africa, President Lula (2003–2010) turned out to be an unexpected ally for the pursuit and operationalization of Vale's ambitions. The Brazilian President not only supported Agnelli's international aspirations, but he also put the state apparatus at Vale's service. “Everyone was mesmerized with the velocity with which Brazil expanded its outreach in the region where Vale planned to expand its business”, according to a source.9 Along with the wave of new cooperation projects in Mozambique, discussed in greater detail in other articles of this special issue, the Brazilian government also announced the opening of a network of embassies in West Africa, from Guinea to Liberia and Sierra Leone, countries where Vale would need strong diplomatic support from Brasília. In the process, Lula and Agnelli forged a personal relationship based on a shared vision of Brazil as a global player and on their complementary personalities. Agnelli's personal yet aggressive negotiating style paired well with Lula's union leader skills based on dialog and concertation. Inside Vale, the symbiosis between Agnelli and Lula created the impression that the company's fate was tied to that of the Brazilian foreign policy..."
Tick tock.
Big Den and Lula go back a long way.
Asperbras Angola was allegedly the source of a lot of the Lula presidential campaign advertising money. After his election victory, Brazil rescheduled/forgave a chunk of C-B's trade debt (some $ 280m?) within the IMF Paris Club commercial debts restructuring.
It's easy to be generous with 'other people's money'!
Ho hum.
Of only tangential interest here, BUR's largest (10.5%) shareholder, Saudi's entrepreneurial Mithaq Capital has just swooped on a distressed US retail company :
hxxps://www.msn.com/en-us/money/companies/children-s-place-s-stock-pops-21-after-investor-group-takes-majority-stake/ar-BB1ijZ9S
Market comment highlights aggressive, contrarian and opportunistic approach to business.
Mithaq is the family investment co of the principal shareholders of AlRajhi Bank, the largest Islamic bank in the world by capital and one of the largest joint stock co's in Saudi Arabia.
GLA
And, from your first link :
Total - 1002 Mt @ 66.63% Fe, 1.21% Al2O3, 2.32% SiO2,1.17% LOI, 0.030% P
Mbalam Nabeba
- Silica 4.4% vs. ZIOC 3.5>3.0% Simandou 2.32%
- Alumina 2.6% vs. ZIOC 0.8 > 0.4% Simandou 1.21%
- Phos 0.09% vs. ZIOC 0.04% Simandou 0.03%
ZIOC better than Simandou on alumina, not so on silica, AFAICS.
Is one (low impurity level) more attractive than the other ?
From your link, Zanaga gets the barest of mentions, under 'Other' p32-33.
After running through various 'contenders/outliers' in Brazil, Canada and Australia, we see, right at conclusion:
..."In Africa, Glencore owns 50%100 of the Zanaga Iron Ore Project in Congo-Brazzaville,
and proposes to mine up to 30Mtpa of 66% Fe hematite and 68.5% magnetite...."
taken from the Zioc Mar 2019 Investor Presentation.
The authors seem to share the Wood Mackenzie blind spot re Africa...
WM are the people, remember, more confident re Mbalam-Nabeba than re ZIOC . And yet, there we see
Mbalam-Nabeba isn't even close.
Not only half (maybe less) of ZIOC volume, but also lower quality - 62.6% Fe (cf ZIOC Stage 1 66% > Stage2 68.5%) with LOTS of impurities (see p.13 of the recent presentation):
- Silica 4.4%, ZIOC 3.5>3.0%
- Alumina 2.6%, ZIOC 0.8 > 0.4%
- Phos 0.09% , ZIOC 0.04%
Maybe the penny will drop before long...
GLA and ATB
It seems to me that we have here a replay of the 'transition arrangements' question facing the climate change issue as a whole, ie the pace and direction of the migration from the old to the new.
The starry-eyed climate changers are forcing the pace on 'renewables' whilst ignoring the practicalities of costs/possible complications, whilst ignoring the vast investments sunk into existing (working) arrangements.
This is replicated in the 'narrow' green ore debate : everyone's agreed it's 'desirable', the question is - at what cost to the existing 'world order'- and who will pay ?
China isn't going to mothball serviceable steel mills until it makes economic sense - it's certainly not doing that with its expansive coal-power plans : it's twin/multi-tracking its energy supply arrangements.
Australia - facing a potential double whammy threat to its 2 x major exports - coal and iron ore - will be even keener to postpone even what may eventually be 'the inevitable'.
Something similar seems likely to be the future of 'green ore' : less rapid adoption than the advocates would like, commensurate with 'affordability'.
I've already pointed to the article re Simandou - 'a bet on decarbonisation' - link originally provided by MM, ironically, which acknowledges this underlying dynamic/tension.
The Gulfies are investing for the future, not defending the past / present and don't have the 'legacy capital' issues facing others.
Being 'unencumbered' gives them a different outlook, hopefully more favourable to Zanaga.
All AFAICS.
GLA
Hi atg,
I was aware of the Falcon, that was seized in Toulouse (there for maintenance), when someone switched the AISC back on...that was many years ago.
My question was more as to whether BigDen still had access to the Sheikh's 757 VP-CAL as reported a while back (which would be definitely 'interesting' in itself) or has acquired some other benefactor (ditto).
Eddsy ?
TIA