Business

US IRA is ‘cream on top’ as Arcadium eyes lithium growth

Published

5 months ago

December 7, 2023

admin

US IRA is 'cream on top' as Arcadium eyes lithium growth

US subsidies for critical minerals development will support growth for top 3 lithium producer Arcadium Lithium if the $10.6 billion Livent (LTHM.N) and Allkem (AKE.AX) merger creating the new company goes ahead, Allkem’s chairman said Thursday.

The US Inflation Reduction Act (IRA) has refocused global supply chains for minerals critical to the energy transition toward the US The tie-up is expected to close by Jan. 4 if Allkem shareholders approve it at a Dec. 19 meeting.

Allkem chairman Peter Coleman said the companies are considering post-merger growth options for Arcadium in Canada and North America, where Livent has half ownership of miner Nemaska Lithium shared with the Quebec government. The IRA represented an opportunity for additional “cream on the cake,” he told reporters in Melbourne.

“As we look at building out our Canada operations, for example, it’s natural that processing be done either in Canada or North America at the moment, and that’s good for us,” he said.

“They don’t have their own IRA,” he added, referring to Canada. “But they’re highly competitive and they know our option is to go 150 kilometres (93 miles) across the border. They understand that they need to compete to be able to get that value-added product.”

Coleman will continue as chairman of the new company, which will produce the metal in Canada, Argentina, and Australia, behind only US-based Albemarle (ALB.N) and Chile’s SQM (SQMA.SN). Allkem is listed in Australia; Livent is listed in the United States.

SUBMERGED PRICES

Coleman also said he sees current low lithium prices extending for the near term, forcing companies to look at cost-cutting and pushing back investment decisions on new projects. But he said it would not squeeze any firms out while prices are still at relatively “healthy” levels for the metal, which is crucial for electric vehicle batteries.

Lithium prices shot too high last year because of China’s stimulus and the impact of COVID-19 on global supply chains, but this year fresh supplies, including from Africa, have led to a collapse in prices, Coleman said.

Prices for the lithium ore spodumene, of which Australia produces about half of the global supply, soared to above $6,100 a metric tonne late last year. It traded on Thursday at $1,380.

“That’s natural. You get a price signal in the market and everyone runs off to the bank and their investors and says it’s time to build a mine,” he said. “That price signal arrived a few years ago. Now we have to work that (excess supply) out of the market. We’re going to be here for a little while.”

Lithium prices have fallen amid slowing demand growth for electric vehicles, which has led to a price war among makers in China.

GATECRASHERS

Coleman, who ran Australian gas producer Woodside Energy (WDS.AX) for a decade, also said he had never seen Australian investment coming into any sector on the scale it is flowing into lithium.

Mining moguls Gina Rinehart and Chris Ellison have spent more than A$2 billion ($1.30 billion) between them snapping up stakes in lithium developers this year, spoiling deals underway by the world’s biggest lithium chemicals makers.

That could potentially hamstring any future purchases by Arcadium, which has targeted Australia for growth. But Coleman said it was a “real positive.”

“It’s people who understand the business well, understand Australia well, taking a very long-term view,” he said.

Post Views: 51

Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

2 days ago

May 17, 2024

admin

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

Post Views: 10

Business

Govt jacks up power price by Rs1.47 per unit

Published

2 days ago

May 17, 2024

admin

Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

Post Views: 17

Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

2 days ago

May 17, 2024

admin

Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

Post Views: 13