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Lower emissions require more metals investment: BHP

  • Market: Emissions, Metals
  • 06/04/22

Limiting global warming in line with the 2015 Paris climate agreement will require a significant lift in investments in new metals production capacity, although minerals mining can be emissions intensive, according to Australian resources firm BHP.

The 2015 Paris climate agreement aims to limit the rise in global average temperatures to below 2°C, and preferably to 1.5°C. Action to reduce greenhouse gas (GHG) emissions must be taken as soon as possible, as delayed action will be significantly more costly in monetary and socio-environmental terms, BHP vice-president for market analysis and economics Huw McKay said.

Policies on emissions reduction must address all fundamental elements of the energy transition to allow the demand and supply sides of the system to adjust as required, he added. Carbon pricing is a core ingredient of any effective policy framework to reduce emissions, McKay said.

"None of the [actions required] will be feasible if the supply of metals does not keep pace with the spectacular demands expected to be created by the needs of the energy transition," said McKay.

The dilemma for investors is that metals are essential inputs for the hardware of decarbonisation, and there will be no energy transition without a significant increase in the production of critical minerals, but the production of minerals can itself be a GHG emission-intensive process, according to McKay.

The energy transition will require a vast capital reallocation and will generate material risks and opportunities, placing investors and global capital markets at the very centre of the challenge, he added. Under the International Energy Agency's (IEA) net zero 2050 scenario, annual average energy capital investments would rise from around $2 trillion at present, or 2.5pc of gross domestic product (GDP), to around $5 trillion for the period from 2021-50, or 4.5pc of GDP in 2030 and falling to 2.5pc of GDP by 2050, McKay said.

All low emissions energy technologies require metals, from the nickel used in electric batteries, steel used in wind turbines, silver and silicon used in solar panels, to the copper that will enable further electrification, he added.

Challenges also remain for the development of many metal deposits. The discovery, appraisal and development of new metal deposits is a time and capital-intensive process, where a decade from start to first production would be regarded as "incredibly swift", according to McKay.

"Exploration success has been only modest over the last decade, and in the case of copper, the bellwether for both the base metal complex and the electrification mega-trend, grade decline is expected to become a material headwind for primary supply over the course of this decade," said McKay.

The industry does not currently have an abundance of high-quality development opportunities ready to go, and scrap supply is insufficient to fill the gap, according to BHP.


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18/06/25

Banks increased fossil fuel financing in 2024: Report

Banks increased fossil fuel financing in 2024: Report

London, 18 June (Argus) — Banks "significantly increased" their fossil fuel financing in 2024, reversing a trend of steadily declining fossil fuel financing since 2021, a report from a group of non-profit organisations found this week. The 65 biggest banks globally committed $869bn in 2024 to "companies conducting business in fossil fuels", the report — Banking on Climate Chaos — found. Those banks committed $429bn last year to companies expanding fossil fuel production and infrastructure. The report assesses lending and underwriting in 2024 from the world's top 65 banks to more than 2,700 fossil fuel companies. Figures are not directly comparable year-on-year, as the previous report, which assessed 2023, covered financing from 60 banks. The 60 biggest banks globally committed $705bn in 2023 to companies with fossil fuel business, last year's report found. Those banks committed $347bn in 2023 to companies with fossil fuel expansion plans. Of the five banks providing the most fossil fuel finance in 2024, four were US banks — JP Morgan Chase, Bank of America, Citigroup and Wells Fargo. The 65 banks assessed in this year's report have committed $7.9 trillion in fossil fuel financing since 2016, when the Paris climate agreement took effect, the report found. Finance is at the core of climate negotiations like UN Cop summits. Developed countries are typically called upon at such events to provide more public climate finance to developing nations, but the focus is also shifting to private finance, as overseas development finance looks set to drop . But fossil fuel financing banks are increasingly facing the risk of targeted and more complex climate-related litigation, according to a recent report by the London School of Economics' centre for economic transition expertise (Cetex). Climate litigation is not currently adequately accounted for in financial risk assessment, with case filing and decisions negatively impacting carbon financiers, it said. "While early climate cases primarily targeted governments and big-emitting ‘carbon majors', cases against other firms have proliferated quickly," Cetex said. The report also showed that, based on a review of disclosures from 20 banks supervised by the European Central Bank, many banks across Europe recognise litigation risks as material in the context of climate and environmental factors but tend to not be specific about the risks incurred. By Georgia Gratton and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Eurofer calls for 50pc quota tariff post safeguard


18/06/25
News
18/06/25

Eurofer calls for 50pc quota tariff post safeguard

New York, 18 June (Argus) — European steel association Eurofer has asked the European Commission to implement an out-of-quota tariff of 50pc in its post safeguard measure, while reducing duty-free volumes by 50pc, Italian steelmaker Arvedi chief executive Mario Arvedi Caldonazzo told the Global Steel Dynamics Forum in New York late yesterday. "We need to adopt a strict and severe trade defence measure," Caldonazzo said, adding that discussions with the commission were ongoing, and that it would publish a proposal on the measures that would replace the safeguard in mid-July. Eurofer, of which Caldonazzo is vice-president, wants these measures to come into play in January 2026, earlier than the planned lapse of the current safeguard mechanism in June 2026. Imports have reached as much as 30pc of total supply on some products, at much lower prices than domestic production. "The commission is aware this is the move that will determine the future of the European industry," he said. Eurofer hopes the commission will make its proposal regarding a melt-and-pour clause in September-October, and that scrap will be recognised as a critical raw material. Caldonazzo said the EU exports 20mn t of scrap that is transformed into steel products then sold back to Europe, and that more material being retained could help mills increase scrap usage and reduce their carbon footprint. The EU's carbon border adjustment mechanism (CBAM) also needs to be extended downstream to address the risk of circumvention, and also that "resource shuffling" is addressed. This is where mills use a portion of greener production to sell into the EU at a lower payable tax, while retaining more carbon intensive sales into other markets. "Without these measures the future will be very sad," Caldonazzo said, adding that the EU could just end up importing and re-rolling semi-finished steel. Lourenco Goncalves, the outspoken head of Cleveland-Cliffs, said in another presentation that the EU would eliminate its carbon emissions by ceasing to produce steel. Talks over the Global Arrangement on Sustainable Steel and Aluminum (GASA) should be restarted, building a free trade agreement between the US and EU, allowing both to expand trade on a duty and quota free basis, Caldonazzo said. This would be possible should the EU have similar trade defence measures to the US, such as a melt and pour. On the sidelines of the conference he told Argus there will be no recovery in the EU market this year, given the disparity between imports and domestic prices, and the very low level of demand. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Adding credits, CO2 removals to EU ETS ‘fatal’: Study


18/06/25
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18/06/25

Adding credits, CO2 removals to EU ETS ‘fatal’: Study

London, 18 June (Argus) — Allowing the use of international carbon credits or carbon removals for compliance under the EU emissions trading system (ETS) risks undermining the environmental integrity of the scheme and hindering the bloc's achievement of its climate targets, warned a study by research body the Oeko-Institut published today. Under the three scenarios examined in the study, which was commissioned by non-governmental organisation Carbon Market Watch, the EU ETS's supply-demand balance does not need to be artificially adjusted before 2035. But beyond this date the total number of allowances in circulation could fall below zero, meaning sectors under the scheme would either need to be fully decarbonised by this date or shut down unless flexibility is introduced to the system. Any reforms to increase ETS supply should focus on the system's market stability reserve, the study found, a mechanism which absorbs a percentage of excess supply from circulation each year but can also release permits if supply falls too low. Changes to the scheme's linear reduction factor — the amount by which its supply cap falls annually — would achieve the same thing but risk weakening the system's ambition, and is more likely to be politically challenging, the study said. Some EU member states have expressed interest in allowing the use of international carbon credits issued under Article 6 of the Paris climate agreement for ETS compliance for this purpose, and the European Commission said last week it is taking the option into consideration , although any such use would entail only "very high integrity" credits representing a "very small proportion" of the bloc's climate action. But introducing Article 6 credits to the ETS "poses significant risks to the functioning and environmental integrity of the system", the study found, pointing to the past use of Clean Development Mechanism credits to offset some ETS obligations to which it attributed the "collapse" of the carbon price. Including carbon removals in the scheme would pose a similar risk, the study found, concluding it is "crucial" they remain in a separate framework. The European Commission is expected to publish a report next year examining their potential inclusion. The commission will also assess in 2031 the feasibility of linking the existing ETS to the EU ETS 2 for road transport and buildings, scheduled for launch in 2027, which could increase the liquidity of the two schemes. But such a link "cannot ease tension in the [ETS] market with certainty, and administrative barriers to the merger are high", the study warned. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia's Lynas produces terbium oxide in Malaysia


18/06/25
News
18/06/25

Australia's Lynas produces terbium oxide in Malaysia

Sydney, 18 June (Argus) — Australian mineral producer Lynas Rare Earths has produced terbium oxide at its Malaysian rare earth plant, adding to its line of rare earth products, the firm announced today. The company produced the oxide using 1,500 t/yr heavy rare earth separation circuits it built in January-March. It previously used the circuits to produce separated dysprosium at the plant in May, becoming the first producer of separated heavy rare earths outside China. Lynas plans to eventually expand its rare earth product line to include dysprosium, terbium, and holmium concentrate, alongside unseparated samarium/europium/gadolinium and unseparated mixed heavy rare earths. Lynas supplies its Malaysian plant with rare earth feedstock from its Mount Weld mine and Kalgoorlie processing plant in Western Australia (WA). But it may expand its feedstock sources in the future. The company signed an initial agreement with Malaysian investment agency Menteri Besar in late May to buy mixed rare earth carbonates from developing Malaysian ionic clay deposits. It did not disclose supply volumes. Lynas' product line expansion comes soon after US and European automakers warned that rare earth export controls could lead to assembly line shutdowns. Lynas is developing a rare earth production plant in the US with the same capabilities as its Malaysian plant. Lynas plans to produce 2,500-3,000 t/yr of heavy rare earth products and 5,000 t/yr of light rare earth products at the site when it opens. The US government helped fund the project in 2019 through a presidential directive under the Defence Production Act . By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US Supreme Court asked to rule on tariffs


17/06/25
News
17/06/25

US Supreme Court asked to rule on tariffs

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