Member Info for extrader

Hmmm..

(a) Wouldn't one or other have to recuse themselves , because of a possible conflict....unless 'Chinese wall' apply..which rather negates the association value ? and

(b) Won't the opposition (try to) make hay out of said 'conflict' ?

Speaking as devil's advocate.

I once worked in a country where the chair of the national oilco was also the chair of the gazco AND chair of one of the national(ised) banks...+ on the board of several other strategic co. The justification was (a) he was competent ; (b) a 'safe' pair of hands ; (c) honest ; and (d) there was a scarcity of other folk meeting criteria (a) to (c).

Surely not the case in Argentina?

GLA

🔴Attestor Master and other funds are requesting a hearing with Judge Preska before seeking the seizure of Argentine sovereign assets, which, when it takes place, will be done confidentially. They are also seeking to prevent another fund, Bainbridge Fund, from interfering with the seizure of USD 310 million."

Bunfight starts.

ATB

From CAPD RNS

..'Mining revenues were strong in Q3 2024, particularly driven by the extended activity at Sukari. At Belinga, however, Fortescue Metals Group (FMG) has now decided to pivot its development strategy from pre-production mining to resource development and, consequently, given the very limited mining activity at Belinga, has made the decision to conclude our mining contract early...'

ATB

Hi MM

I based my understanding that FMG (and ATIF) had cooled on Belinga on this from Africa Intelligence

..'Gabon

Egyptian-South African team in pole position for Belinga-Mayumba rail contract

A consortium led by South Africa's Thelo Group and including Egypt's EGAAD is poised to win a contract with the Gabonese government to build a 972km railway linking the Bélinga mining site to Mayumba's future deepwater port. The project will cost more than $10bn...'

This in Nov.

Goalfore Advisory announced the bid details some 6 months earlier.

This has been promoted locally as part of a 'nation-building' exercise, the map shows it running diagonally from one end of country to the other, a considerably longer route than the test export by truck/rail via Owendo.

Recall that FMG's Simandou bid excluded the logistics element.

I believe FMG has got cold feet at the prospect of being 'invited' to contribute to this new venture.

CAPD's Oct 24 RNS also suggests that its demobilisation at Belinga wasn't part of the plan..

Maybe I've added 2 + 2 and got 5 or 6?

Open to pushback!

Cheers

Per Seb, 2 hrs ago:

At 5:00 PM (ARG), the Second Circuit Court of Appeals lifted the stay of the seizure of the Brady Bonds collateral. Starting tomorrow, judgment creditors may request Judge Preska to order the Federal Reserve of New York to release USD 310 million in sovereign assets.

GLA

And Big Den's visit to the Energy Summit in DarEsSalam gives him an opportunity to talk about the hydro and solar potential of the Congo Basin....100,000Mw (of which 44,000 Mw Inga in DRC).....

Tweet :

.."Minister Denis @ChristelSassou Nguesso visited Pointe-Noire on January 28, 2025 for a field visit to the construction site of an 800-meter-long multimodal quay at the Autonomous Port of Pointe-Noire. This project, led by Abu Dhabi Ports Group, stems from a contract signed on March 13, 2023 between this Emirati group and Congo.

During this visit, in the presence of the Director General of the Port and the technical teams, the Minister noted the positive progress of the construction site. The first phase involves the construction of a 400-meter quay, followed by a second similar phase with an extension option.

AD Ports Group experts presented the Minister with reassuring elements and indicated that a controlled planning of earthworks, drainage and infrastructure has been carried out. The Minister insisted on the fact that the government will ensure rigorous and regular monitoring, to guarantee the smooth running of the project..."

His first visit, AFAIAA.

GLA

Oh look!

.."Forrest seems caught between an existing business that has an increasingly apparent finite shelf life and a future business that equally apparently isn't going to arrive in time, WHILE IGNORING A TRNSITION COMPROMISE IN FRONT OF HIM.

Maybe he isn't.

It turns out that FMG's 20% partner in Belinga is ATIF...the same Africa Transformation and Industrialization Fund (ATIF) that is part-owner of ARISE Integrated Industrial Platforms (ARISE IIP).....our MoU partners in the potential PN SEZ port development.

ATIF acquired its equity stake in ARISE IIP from Olam International

https://www.comunicaffe.com/olam-international-announces-signing-of-definitive-agreements-to-divest-remaining-equity-stakes-in-arise-iip-and-arise-is/

So ATIF - which had an interest in developing Belinga in Gabon (which seems to have recently been put on hold) - has also recently (courtesy Arise IIP) acquired an indirect interest (at MoU level) in another iron ore project 'in progress'....ZIOC.

I wonder if ATIF's apparent set-back at Belinga played a part in ZIOC's breakthrough at PN with Arise...which seems to have come a bit 'out of left field'?

As Elpck commented .." ZIOC's partnership with Arise provides a pathway forward for the Zanaga Project.."

Now, if the 20% stakeholder in Belinga is looking for - and has found - a substitute, some might wonder if it's a pathfinder for the 70% stakeholder - FMG.

MinorMiner wrote : .."For me Fortescue are an interesting outsider, and one who could add a bit of competitive tension and keep those Big 2 [Rio and Vale] honest..."

Perhaps -unbeknownst to us - FMG's doing that already?

Hmmm...

GLA and ATB

Hi MM,

Thanks for this nuance.

FWLIW, copilot confirmed your recollection re Gaines/ West Africa. ;->

Perhaps more intriguingly, it also led me to something I for one hadn't appreciated :

It turns out that FMG's 20% partner in Belinga is ATIF...the same Africa Transformation and Industrialization Fund (ATIF) that is part-owner of ARISE Integrated Industrial Platforms (ARISE IIP).....our MoU partners in the potential PN SEZ port development.

ATIF acquired its equity stake in ARISE IIP from Olam International

https://www.comunicaffe.com/olam-international-announces-signing-of-definitive-agreements-to-divest-remaining-equity-stakes-in-arise-iip-and-arise-is/

So ATIF - which had an interest in developing Belinga in Gabon (which seems to have recently been put on hold) - has also recently (courtesy Arise IIP) acquired an indirect interest (at MoU level) in another iron ore project 'in progress'....ZIOC.

I wonder if ATIF's apparent set-back at Belinga played a part in ZIOC's breakthrough at PN with Arise...which seems to have come a bit 'out of left field'?

As Elpck commented .." ZIOC's partnership with Arise provides a pathway forward for the Zanaga Project.."

And if the 20% stakeholder in Belinga is looking for - and has found - a substitute, some might wonder if it's a pathfinder for the 70% stakeholder - FMG.

You wrote : .."For me Fortescue are an interesting outsider, and one who could add a bit of competitive tension and keep those Big 2 honest..."

Perhaps -unbeknownst to us - it's doing that already?!

Hmmm...

GLA

A bit technical, for me, I'm not an economist, but looks OK

Argentina: Yesterday, the government announced a cut in export duties until 30 June. The objective is to enhance producers’ margins, which have been declining due to lower prices, amid a potential mild drought. It would also incentivise producers to sell the harvest sooner, allowing the central bank to buy Dollars in the official FX market. Rates will be trimmed as below:

• Soybean from 33% to 26%, the lowest since November 2019. Soy oil from 31% to 24.5%.

• Corn, wheat, barley, sorghum, and sunflower to 9.5%, the lowest since August 2018.

• Eliminated export taxes on sugar, cotton, tobacco, rice, leather, and others.

The government estimates the fiscal cost would be around USD 800m (0.1% of GDP) and retain significant margin after reaching a 1.8% primary surplus in 2024.

Moody’s raised Argentina’s sovereign credit for the first time in five years, from Ca to Caa3, citing the ongoing success of the government’s macroeconomic stabilisation programme.

Steady as she goes...

GLA

Meanwhile, this side of Fortescue seems to be recognising that its bet on hydrogen as the future for green steel hasn't paid off...and in today's 'Trumpian' environment is unlikely to.

https://www.kitco.com/news/off-the-wire/2025-01-27/fortescue-energy-ceo-says-green-hydrogen-cost-key-demand-drops

.."Replacing fossil fuels with green hydrogen depends on creating demand by making it price competitive, as buyers are unwilling to pay “green premiums”, Fortescue Energy CEO Mark Hutchinson told Reuters in Davos...

..“If you’re waiting for someone to pay you extra because it’s green, forget it … at the end of the day, the economics have to work,” he added..

..it is up to the industry to make it an economic discussion, not just “about saving the planet”.

However, the company’s focus on “green iron” has risen significantly over the past year, despite the demand worries.

Green iron is produced by reducing iron ore using hydrogen gas, which is then converted into steel in an electric arc furnace..."

To a hammer, everything looks like a nail.

Green iron isn't just hydrogen/EAF, most production (AND emissions) are coal > oil/gas > 'renewables' for blast furnace use, where the key input is high grade ore.

Forrest seems caught between an existing business that has an increasingly apparent finite shelf life and a future business that equally apparently isn't going to arrive in time, while ignoring a transition compromise in front of him.

AFAICS

Hi yogiananda,

The price Fortescue paid for RedHawk is also lowered by consideration that it's 'worth' more to FMG than anyone else, because it already owns 3 x mines around it and achieves greater 'economies of scale ' by adding it to its existing logistics system.

The mine itself doesn't address the 'Pilbara rust' issue that FMG still has...as reported here :

https://www.afr.com/companies/mining/fortescue-offers-254m-for-nearby-pilbara-iron-ore-deposit-20250128-p5l7o5

.."Red Hawk’s Blacksmith iron ore deposit is estimated at 243 million tonnes with an average iron grade of 59.3 per cent, slightly [Ed.: well actually nearly 3% ....] below the 62 per cent benchmark typical for Pilbara operations.

While the lower grade poses pricing challenges, the deposit reinforces Fortescue’s iron ore portfolio in the Pilbara and can link up with its infrastructure..."

I read this as a 'holding' measure - extending the life of its existing ops- while it seeks a more radical longterm solution.

It could also be a ploy to show commitment to Australia/its current workforce whilst planning something bigger elsewhere (which it could rationalise as a Belinga replacement 'blending' source to further extend the viability of its Aussie operations....).

Forrest may be keen on the environment but he's no 'bleeding heart liberal' and is known for his 'assertive and strategic negotiation style, with a reputation for being a tough negotiator'.

See https://kooriweb.org/foley/news/2000s/2017/wa20may2017.pdf

'Behind every great fortune lies a great crime'. Balzac.

ATB

This side of Fortescue seems to be recognising that its bet on hydrogen as the future for green steel hasn't paid off...and in today's environment is unlikely to.

https://www.kitco.com/news/off-the-wire/2025-01-27/fortescue-energy-ceo-says-green-hydrogen-cost-key-demand-drops

.."Replacing fossil fuels with green hydrogen depends on creating demand by making it price competitive, as buyers are unwilling to pay “green premiums”, Fortescue Energy CEO Mark Hutchinson told Reuters in Davos...

..“If you’re waiting for someone to pay you extra because it’s green, forget it … at the end of the day, the economics have to work,” he added..

..it is up to the industry to make it an economic discussion, not just “about saving the planet”.

However, the company’s focus on “green iron” has risen significantly over the past year, despite the demand worries.

Green iron is produced by reducing iron ore using hydrogen gas, which is then converted into steel in an electric arc furnace..."

To a hammer, everything looks like a nail.

Green iron isn't just hydrogen/EAF, most production (AND emissions) are coal > oil/gas > 'renewables' for blast furnace use, where the key input is high grade ore.

Forrest seems caught between an existing business that has an increasingly apparent finite shelf life and a future business that equally apparently isn't go to arrive in time, while ignoring a transition compromise in front of him.

AFAICS

Hi yogiananda,

The price Fortescue paid for RedHawk is also lowered by consideration that it's 'worth' more to FMG than anyone else, because it already owns 3 x mines around it and achieves greater 'economies of scale ' by adding it to its existing logistics system.

The mine itself doesn't address the 'Pilbara rust' issue that FMG still has...as reported here :

https://www.afr.com/companies/mining/fortescue-offers-254m-for-nearby-pilbara-iron-ore-deposit-20250128-p5l7o5

.."Red Hawk’s Blacksmith iron ore deposit is estimated at 243 million tonnes with an average iron grade of 59.3 per cent, slightly [Ed.: well actually nearly 3% ....] below the 62 per cent benchmark typical for Pilbara operations.

While the lower grade poses pricing challenges, the deposit reinforces Fortescue’s iron ore portfolio in the Pilbara and can link up with its infrastructure..."

I read this as a 'holding' measure - extending the life of its existing ops- while it seeks a more radical longterm solution.

ATB

Peterfal, more significantly, that s/p was for 1/2 the asset....one that ZIOC now owns 100%.

Hxxps://buenosairesherald.com/economics/ypf-case-argentina-to-reveal-gold-reserve-data-to-hedge-fund

Argentina has agreed to provide hedge fund Burford Capital with information on the Central Bank’s gold reserves and other assets following an order from New York Judge Loretta Preska.

The hedge fund is claiming some of the country’s assets as partial payment of the US$16.1 billion Argentina was ordered to pay after losing a lawsuit in 2023 over the expropriation of energy company YPF.

Argentina has repeatedly refused to hand over the data, but Preska’s order last week put an end to the delays. On Wednesday, the judge kickstarted a discovery process, ordering Argentina to produce information on its potential assets. Burford will review the data and decide whether the country has goods it could demand as partial payment.

Among the documents Argentina has been required to turn over so far are CASE FILES FROM A SEPARATE CASE that the country also lost in 2023. In that lawsuit, the Bahamas-based Bainbridge Fund won a claim against Argentina regarding US$95 million of defaulted debt securities. Earlier this month, PRESKA SAID the documents might contain information on Argentine assets that Burford could claim.

Preska also ordered Argentina to GATHER SWIFT (the main messaging network for international payments) DATA for “diplomatic, consular, and military accounts outside of Argentina and the United States from third-party financial institutions” and documents about the country’s accounts in the U.S. by February 7, and to compile information based on that data within two weeks of receiving it.

Argentina had argued that the Central Bank and the Republic are legally separate entities, meaning that the GOLD RESERVES do not belong to the government and their details are confidential. Preska said that Argentina “shall produce its own documents concerning the reserves” nonetheless.

Burford had pushed back against this contention. They argued that, last July, Economy Minister Luis Caputo confirmed during a television interview that the Central Bank had moved some of its gold overseas. This, they said, SHOWED THAT HE HAD INFORMATION ABOUT THE RESERVES , WHILE ALSO REPRESENTING ARGENTINA'S GOVERNMENT.

[NB : This is evidence that THE 'ALTER EGO' ARGUMENT (also being used against YPF) 'has legs']

All good stuff, AFAICS.

GLA

And this, from last June :

https://totalnewsagency.com/2024/05/17/quien-es-el-banquero-argentino-que-mediara-en-el-juicio-de-burford-por-ypf/

Mato's a player.

.."The lawsuit of the Burford Capital fund against Argentina for the expropriation of YPF is entering decisive stages. In the next few hours it will be reported that the Argentine Gerardo ‘Gerry’ Mato will act as ‘mediator’ or ‘facilitator’ between the parties to reach an agreement as quickly as possible and to avoid the high cost that this lawsuit could have for the tax coffers.

Mato is one of the highest-ranking Argentines on Wall Street. He was the CEO and Chairman of HSBC for the Americas. He also served as Chairman of the Atlantic Council for Latin America, a non-partisan organisation of leaders in the United States that seeks solutions to global challenges.

He was an active participant in international financing for Argentina and also assisted in the 2020 debt restructuring under Alberto Fernandez.

IN 2023, MATO HOSTED THE MAIN CANDIDATES AND THEIR TEAMS, OF DIFFERENT POLITICAL COLOURS, AT HIS HOME IN CONNECTICUT AND MET WITH INTERNATIONAL INVESTORS'.

GLA and ATB

Hi StarBright,

Thanks for the NPV discount numbers .

I particularly appreciated seeing :

Country Risk Premium: 10% to 15% out of total estimated Discount Rate: 23.23% to 31.23%

Or : roughly HALF the risk premium/discount is down to the country risk (some aspects of which eg technical competence/experience also feed into the 'mining sector' risk).

Cheers

GLA

Hi BlueWiley,

Snap!

I was just about to post this.

Copilot gave this excellent summary of the case :

https://www.lawfaremedia.org/article/petersen-v.-argentina-unpacking-a-16-billion-judgment

and pointed me to the Burford Mato appointment story:

https://www.perfil.com/noticias/politica/gerado-gerry-mato-el-tiburon-argentino-de-wall-street-que-contrato-un-buffete-negociar-con-el-gobierno-por-ypf.phtml

.."The ruling by the US judge, Loretta Preska, obliged the country to pay compensation of more than US$16 billion, an impossible figure in times of the official slogan ‘there is no money’. The British know this and have therefore taken a decision: to hire former Argentine banker Gerardo ‘Gerry’ Mato, a kind of Wall Street ‘shark’, whose mission will be to ‘mediate’ between the parties and, if possible, reach an out-of-court settlement.

The man does not have an easy mission. The first step to achieve mediation and eventually reach an unofficial agreement is being taken while the case is progressing in the US courts. In February 2024, Milei's government appealed Preska's ruling before the New York courts with a line of argument similar to those used by the administrations of Cristina Fernández de Kirchner, Mauricio Macri and Alberto Fernández.

Mato is well known in the finance and business universe. His strong influence in New York will be a key element for him to lobby in favour of Burford Capital from the United States and he has already communicated with Argentine companies to understand the details of the national situation and to know what decisions Javier Milei has in mind, particularly in the YPF case.

Mato became the chairman of Global Banking at HSBC. He spent most of his career in the United States and prior to HSBC he worked at Merrill Lynch. He was also a member of the Atlantic Council, the US Chambers of Commerce and the Council of the Americas.

Currently, Mato is the CEO of the consulting firm BluePearl Capital, where he is a partner of other former Argentine bankers. The executives will visit Argentina in early June...."

GLA

Logging co's [major silent partner allegedly BigDen, cf previous coverage] don't pay their dues...

FORESTRY SECTOR

More than FCFA 16 billion in unpaid taxes

The State was able to collect only FCFA 6.629 billion in 2024, compared to the FCFA 16.3 billion still owed by forestry companies. At a meeting on 22 January in Brazzaville, Forest Economy Minister Rosalie Matondo condemned the ‘lethargy’ of the forestry sector.

At a meeting with her staff and supervisory bodies in Brazzaville, Forest Economy Minister Rosalie Matondo criticised the ‘lethargy’ of the forestry administration, before setting out guidelines for 2025..."

No mention of ACTUALLY collecting the already overdue CFA 16.3 billion....approx $ 25 million.

This is about 5% of revenues collected by the C-B Treasury, the other 95% is from hydrocarbons sector.

The news here is somewhat better :

https://apanews.net/congo-aims-to-double-oil-production-with-new-projects-and-revitalization-efforts/

.."The Republic of Congo is poised for significant growth in oil production, with ambitious plans to double output to 500,000 barrels per day by 2025. This ambitious target is being driven by a series of new projects and revitalization efforts in existing oil fields..."

GLA