EU mulls tougher stance on foreign investments

  • Spanish Market: Crude oil, Electricity, Metals, Natural gas
  • 17/06/20

The European Parliament's largest political group today called for a "temporary ban" on Chinese takeovers of European companies. The centre-right European People's Party (EPP) group made the call as the European Commission unveiled plans to regulate acquisitions of EU companies by third-country firms if the latter have received subsidies.

The commission wants to ensure that foreign subsidies do not confer an "unfair" benefit on firms from third-country countries when acquiring EU companies, whether by directly linking a subsidy to a given acquisition or by indirectly increasing the financial strength of the acquirer.

It is seeking powers as a competent supervisory authority over foreign direct investment (FDI) so that it could propose legally binding commitments to a foreign acquirer to remedy competition distortion or prohibit a takeover. Transactions could not be finalised when under a commission review.

"As a last resort, if we could not agree on suitable commitments, we'd have the power to block a harmful merger altogether," EU competition commissioner Margrethe Vestager said. She indicated that the measures should not look at subsidies for previous acquisitions, but at current third-country support for EU-based firms.

The commission did not today present legislative proposals, but indicated that it could do so in 2021. The proposals would require approval from EU member states and the European Parliament, following public consultation until 23 September 2020.

The commission's paper does not specifically mention China. But the EPP, criticising the commission's white paper on foreign takeovers as "not enough", today called for the EU to impose a "temporary ban" on Chinese takeovers of European companies made vulnerable by the Covid-19 pandemic.

"China will not be impressed by a discussion paper," EPP chair Manfred Weber said. "What we urgently need is legislative proposals to prevent outsiders from buying our strategic companies and know-how at a bargain price."

Other countries have recently moved to impose restrictions on foreign investment, with [Japan tightening control of its oil sector](https://direct.argusmedia.com/newsandanalysis/article/2087145) while Australia plans to tighten its foreign investment laws amid increased tensions with China. And the US is working on greater scrutiny of more than 150 Chinese publicly traded companies on US stock exchanges, including state-controlled Sinopec and PetroChina. The UK is also considering increased scrutiny of foreign investment.

The EU adopted a regulation in March 2019 establishing the first EU-level mechanism to co-ordinate existing foreign investment screening by member states, although it does not mandate that all EU countries have screening schemes.

Supply of critical inputs, such as energy or raw materials, is one of the criteria that the commission and member states will consider when determining whether an investment might affect security or public order.


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23/05/24

Richmond City Council proposes Chevron refinery tax

Richmond City Council proposes Chevron refinery tax

Houston, 23 May (Argus) — The Richmond City Council in California's Bay Area has paved the way for a tax on Chevron's 245,000 b/d refinery, voting unanimously at a 21 May meeting for the city's attorney to prepare a ballot initiative. The newly proposed excise tax would be based on the Richmond refinery's feedstock throughputs, according to a presentation given by Communities for a Better Environment (CBE) at the meeting. It is a "…legally defensible strategy to generate new revenue for the city," CBE attorney Kerry Guerin said. The city has previously looked to tax the refinery, with voters passing ‘Measure T' in 2008 before it was struck down in court in 2009. This led to a 15-year settlement agreement freezing any new taxes on Chevron's refinery, but the agreement expires on 30 June 2025. The city is projecting a $34mn budget shortfall for the 2024 to 2025 fiscal year and is seeking to shore up its finances with additional revenue. Ballot initiatives allow Californian citizens to bring laws to a vote without the support of the state's governor or legislature, and the tax proposal could go to voters as early as November this year, according to CBE's Guerin. "Richmond has been the refinery town for more than 100 years, but it won't be 100 years from now," Richmond Mayor Eduardo Martinez said during the meeting. Chevron reiterates risk to renewables A tax on the refinery is the "wrong approach to encourage investment in our facility and in the city that could lead to new energy solutions and reductions in emissions from the refinery," Chevron senior public affairs representative Brian Hubinger said during the meeting's public comments. Hubinger's comment echoes prior warnings from Chevron that a potential cap on California refining profit in the process of being implemented by the California Energy Commission (CEC) would make the company less willing to investment in renewable energy . "An additional punitive tax burden reduces our ability to make investments in our facility to provide the affordable, reliable and ever-cleaner energy our community depends on every day, along with the job opportunities and emission reductions that go with these investments," Chevron said in an emailed statement. The Richmond refinery tax is a "hasty proposal, brought forward by activist interests," the company said. The company last year finished converting a hydrotreating unit at its 269,000 b/d El Segundo, California, refinery to process both renewable and crude feedstocks. The facility was processing 2,000 b/d of bio feedstock to produce renewable diesel (RD) and sustainable aviation fuel (SAF) and said it expected to up production to 10,000 b/d last year. But Chevron has so far lagged its California refining peers in terms of RD volumes with Marathon's Martinez plant running at about 24,000 b/d in the first quarter — half of its nameplate capacity — and Phillips 66's Rodeo refinery producing 30,000 b/d with plans to up runs to over 50,000 b/d by the end of the second quarter . Chevron did not immediately respond to a request for current RD volumes at its California refineries. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US poised to back New Jersey offshore wind farms


23/05/24
23/05/24

US poised to back New Jersey offshore wind farms

Houston, 23 May (Argus) — US regulators could soon approve two offshore wind projects near New Jersey, but with stipulations that would slightly reduce the number of turbines installed in the Atlantic Ocean. The US Bureau of Ocean Energy Management (BOEM) favors a design for the Atlantic Shores South system that would result in up to 195 turbines, as many as 10 offshore substations and eight transmission cables to ferry electricity ashore to New Jersey, the agency said today in its final environmental impact statement for the project. Atlantic Shores South comprises two separate projects, Atlantic Shores 1 and Atlantic Shores 2, which are 50:50 partnerships between Shell and EDF Renewables. The pair's overall capacity is tentatively set at 2,837MW, with the first phase targeting 1,510MW and a size for the second to be determined. Atlantic Shores 1 has a contract to deliver up to 6.18mn offshore renewable energy certificates each year to New Jersey, with first power expected in 2027. The state selected the project through its second offshore wind solicitation, with the 20-year contract scheduled to begin in 2028. The developers had proposed installing up to 200 turbines, but BOEM decided to favor a modified plan, adopting alternatives put forward by the companies in the name of mitigating impacts on local habitats while limiting turbine height and their proximity to the shore to reduce the project's "visual impacts," a point of contention among New Jersey residents who fear damage to tourism in oceanside communities. The BOEM-endorsed design would have mostly "minor" to "moderate" effects on the surrounding environment, with exceptions including consequences for North Atlantic right whales, commercial and for-hire fisheries and local scenery, which could be "major." The areas potentially hit hardest by the projects would be open to "major" consequences regardless of the project design, according to BOEM's analysis. The preference is not BOEM's final ruling, but it does herald the path the agency is likely to take. Regulators will publish the review in a "coming" edition of the Federal Register, starting a mandatory 30-day waiting period before BOEM can publish its final decision on the project. By Patrick Zemanek Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

RE monazite demand shifts mineral sands supply chain


23/05/24
23/05/24

RE monazite demand shifts mineral sands supply chain

London, 23 May (Argus) — Interest in monazite as a feedstock for rare earth (RE) processing is rising as producers look for sources outside China, bringing mineral sands projects into the RE supply chain. Deposits of RE elements are typically found in rock formations including carbonatites and granites, in calc-silicate sequences and ionic adsorption clay deposits — primarily in China and surrounding countries. But as downstream consumers and governments increasingly look to diversify their supply chains, monazite is becoming attractive as an alternative source. Monazite is a phosphate mineral that contains about 55-60pc RE oxides. It contains 17 RE elements, including cerium, neodymium, lanthanum, thorium and yttrium. Reflecting this, US-based uranium and rare earths producer Energy Fuels is acquiring Australia-based mineral sands developer Base Resources to gain access to the monazite stream from its Toliara project in Africa as an RE feedstock. The Toliara heavy mineral sands project in Madagascar plans to produce monazite as a by-product of its primary titanium and zirconium output. The acquisition marks Energy Fuels' entry into the mineral sands business as it invests in operations in Australia, Brazil and Madagascar to supply RE concentrate. Toliara's monazite stream will provide the feedstock Energy Fuels needs for RE oxide production at its White Mesa uranium and vanadium mill in Utah. The facility will also process the uranium content from the feed and if needed, it can recover thorium. The mill has been processing monazite to produce a mixed RE carbonate, which it has been selling commercially since 2021. "We're putting together two pieces of the puzzle that nobody has put together," Energy Fuels president and chief executive Mark Chalmers said at the recent Metal Events Rare Earths conference in Singapore. "We're putting together the physical metallurgy and the hydrometallurgy." White Mesa has been processing monazite supplied by US titanium dioxide producer Chemours. But its output has been limited as there is not enough monazite in the feed, Chalmers said, whereas Toliara contains more than 1mn t of monazite and has about 1.5mn t of existing tailings capacity. Energy Fuels is in the process of commissioning its Phase 1 neodymium-praseodymium (NdPr) separation facility, which is scheduled to start production by the end of the first half of 2024. It plans to produce 35t of NdPr oxalate in 2024. Phase 1 will have the capacity to process 8,000-10,000 t/yr of monazite to produce up to 800-1,000 t/yr of NdPr oxide. The company plans to increase its NdPr capacity to 3,000 t/yr in 2026-27 and add heavy RE processing in 2027-28. It is starting to pilot heavy RE separation and is exploring moving downstream into metal and alloy production. The first stage of Base's Toliara project, scheduled for September 2027, aims to produce an average of 17,400 t/yr of monazite. The second stage would ramp up to 26,100 t/yr. Energy Fuels also owns the Bahia project in Brazil, which could supply 4,000-5,000 t/yr of monazite to White Mesa Mill to produce 400-500 t/yr of NdPr oxide and 20-25 t/yr of dysprosium and terbium oxides. Energy Fuels has the potential to produce 4,000-6,000 t/yr of NdPr oxide, 150-225 t/yr of dysprosium oxide and 50-75 t/yr of terbium oxide, which would supply enough magnetic RE oxides to supply 3mn-6mn electric vehicles (EVs) per year. RE oxides are in demand from US, European and Asian EV, wind energy and other clean energy manufacturers, as well as emerging commercial metal-making, alloying and magnet-making facilities that are under development in the US. The US defence industry could include offtake of other non-magnetic oxides contained in monazite. Developments at other mineral sands producers outside China also indicate that demand for concentrate for its monazite content rather than zircon or titanium is on the rise. Indonesia-focused zircon producer PYX Resources said last week that it has made its first shipment of monazite-rich zircon concentrate to a customer in Hainan, China, exporting 750t. PYX expects to report further exports in the future. Mineral sands producer Iluka is also moving into the RE market using its monazite by-product. The company has stockpiled monazite since the 1990s at its Narngulu Mineral Separation Plant in Eneabba, Western Australia. Iluka is now developing RE production at Eneabba, commissioning a concentrator plant to process the stockpiled material. It will separate the monazite and additional zircon to produce a 90pc concentrate to feed its RE refinery. The company aims to produce neodymium, praseodymium, dysprosium and terbium oxides from 2026. It holds other mineral sands deposits that could feed the RE refinery, and it will be able to handle third-party deposits if it requires additional feedstock. Companies had stopped processing monazite owing to the high cost of disposing radioactive thorium. But thorium is now becoming attractive for advanced nuclear reactor design and medical isotopes, which could drive offtake. By Nicole Willing Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Record-high EU antimony prices in 'uncharted territory'


23/05/24
23/05/24

Record-high EU antimony prices in 'uncharted territory'

London, 23 May (Argus) — European antimony prices hit fresh record highs this week after a prolonged period of supply constraints, and the latest hikes are drawing concern from even the most experienced traders as they navigate an increasingly opaque and speculative spot market. Prices for regulus grade II and trioxide in Europe were assessed at $18,500-19,500/t today, up by 14pc from a week ago and 55pc higher than this time last year, when prices were $12,000-12,400/t. Higher price indications are emerging daily, with some offers heard as high as $20,000/t in Rotterdam this week. The upswing has gathered pace significantly since 9 April, underpinned by depleting domestic resources in China and limited concentrate coming into Europe from various parts of the world. The continuing war in Myanmar (Burma) — a major source of antimony ore, most of which is exported to China — is exacerbating the supply tightness. Meanwhile, Oman-based strategic and precious metals firm SPMP suspended production at its Oman Antimony Roaster plant at the start of 2024 and is still not offering material, chief executive Joel Montgomery told Argus this week. The reasons for the suspension have not been disclosed. The status of Russian producer Polyus remains unclear, but the firm is not delivering as much raw material as in the past, Argus understands. And Tajikstan is currently producing more antimony ingot and selling less ore, according to market participants. "The market is becoming more opaque, with less information on the largest players," consultancy firm Hallgarten's principal and mining strategist, Christopher Ecclestone, told Argus . He added that supply of ore — or concentrate — is inelastic, as artisanal producers are currently operating at maximum capacity. On the demand side, China is directing significant volumes of antimony trioxide and antimony selenide toward its manufacturers of solar photovoltaic glass. With a container to Europe now costing around half a million dollars, traders have largely stepped back from the spot market, waiting for the current volatility to ease, and minimal stocks are available in Rotterdam for spot bookings. A significant volume of antimony arrived in Rotterdam recently and has already been locked into long-term contracts, but this has not stunted the rally, a market source told Argus . "Antimony is becoming a crazy dangerous market," a trader told Argus . It is hurting the industry, causing irreparable damage," he added, noting that consumers are getting hit by the higher prices and reduced availability. Antimony is largely used as a flame retardant in electrical and electronic equipment and textiles, alloys (lead-acid batteries), wires and cables, ceramics, and glass. With prices at record highs, market participants are looking for ways to ease the supply crunch or their consumption rates, but there are no easy options available. On the supply side, recycling streams are already heavily utilised after a major push in 2011, when prices hit their previous record high of around $17,100/t. Around a quarter of global antimony supply is currently produced through the recycling of antimony-bearing metal alloys. On the consumption side, demand from the flame-retardant sector fell by around 20pc in 2023 because of the weak macroeconomic environment, according to one buyer. It is difficult to develop alternative materials that can act as a substitute. Zinc borates and zinc stannates can sometimes substitute antimony trioxide, but only in specific formulations. Antimony substitutes can run into performance issues in various applications, especially in flame retardants because of the weakening of the polymer, sources said. "Antimony could be replaced in solar uses, but that is still a small portion of the market, even though it is growing," Ecclestone said. For now, speculation remains rife as to how high prices are likely to go before hitting a ceiling. "When the increase is supply driven, there is a moment when it falls [...] It cannot stick for too much longer," a trader said. Some sources expect the price rally to run out of steam in July-August because of the summer demand lull. Producers of flame-retardant products typically pause operations in June-July, and there could be a two-week period of maintenance, Argus understands. "The bubble is going to burst once it reaches $20,000/t," another trader estimated. By Cristina Belda Antimony trioxide Europe vs China $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India’s AMNS signs 10-year LNG supply deal with Shell


23/05/24
23/05/24

India’s AMNS signs 10-year LNG supply deal with Shell

Mumbai, 23 May (Argus) — Indian steel manufacturer ArcelorMittal Nippon Steel (AMNS) has signed a 10-year deal to buy LNG from Shell, with deliveries to start from 2027, people with direct knowledge of the matter have said. Under the terms of the deal, the steelmaker's direct reduced iron (DRI) plant in the western Gujarat state of Hazira will receive 500,000 t/yr of LNG, Argus understands. The Hazira plant has crude steel production capacity of 8.8mn t/yr, according to ArcelorMittal's 2023 annual report. As much as 65pc of the capacity is based on DRI. AMNS also has a deal with TotalEnergies for 500,000 t/yr that is scheduled to expire in 2026 . This deal comes at a time when AMNS plans to expand its steel capacity to 20mn t/yr in the long run . This supply pact also underscores a trend in the global steel industry to use cleaner energy sources to produce the so-called 'green steel'. The firm imports up to 75pc of its 1.72mn t in natural gas requirements on an annualised basis, a source said. The deal was signed at a 11.5pc percentage of Brent crude prices, trading firms said, adding that this is so far the lowest-heard slope for an Indian term LNG supply contract. AMNS sought LNG supply for a period of 5-10 years starting in 2027 under a tender that closed in mid-March. The firm last sought long-term LNG in 2022 through a tender for 400,000 t/yr of LNG to be delivered across 2025-30. Indian importers will continue to seek term supply despite softening spot prices, mostly to hedge their risks in a market that can still be volatile, trading companies said. The Argus front-month price for LNG deliveries to India was assessed at $11.50/mn Btu today, up from $10.16/mn Btu a week earlier. The price reached as high as $48.30/mn Btu in August 2022. The firm has lowered its carbon emissions by 32pc in calendar year 2022 from 2015 levels, it said. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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