Caracas seeks N Korea help with sanctions, coltan
Venezuela is stepping up relations with North Korea to gain sanctions-busting advice and explore metals marketing routes in Asia, according to Venezuelan government officials consulted by Argus.
President Nicolas Maduro said this week he plans to visit North Korea "very soon". The visit would form part of an Asian tour that also could include stops in Vietnam and China, according to presidential palace and foreign ministry officials.
Close Maduro ally Diosdado Cabello, who presides a rubber-stamp constituent assembly, returned to Caracas from North Korea and Vietnam last week to prepare for the presidential visit.
During Maduro's official sojourn, several agreements will be signed in strategic areas including mining, agriculture and "general trade," a palace official said. Bilateral security also figures in a tentative agenda that is being developed jointly by presidential and foreign ministry aides.
The palace official noted that both countries "have much in common including the US empire's constant aggression against our sovereign independence and national interests."
A defense ministry official in Caracas said Maduro wants to forge a security alliance between Venezuela, Cuba and North Korea.
Caracas and Pyongyang have maintained distant bilateral diplomatic relations since 1965.
A foreign ministry official said the Maduro government is seeking advice from North Korea on how to evade global US sanctions that have hamstrung the state-owned oil industry and choked off Venezuela's access to international financial markets. "North Korea has decades of experience evading international sanctions," the official said.
A US government official dismissed the significance of the warming ties between Caracas and Pyongyang. Maduro is "grasping at straws" and "posturing" in the face of international pressure to remove him, the official said.
Late Venezuelan president Hugo Chavez prioritized efforts to strengthen relations with North Korea after he first assumed power in January 1999, but the effort did not gain momentum until Maduro replaced Chavez in April 2013, according to the foreign ministry.
North Korea opened its embassy in Caracas in 2014. The Maduro government did not inaugurate Venezuela's embassy in Pyongyang until 21 August 2019 in a joint ceremony presided by Maduro's deputy foreign minister Ruben Dario Molina and North Korean deputy foreign minister Pak Myong Guk.
Coltan king
The Venezuelan delegation to Pyongyang in August was led by Maduro's son, Nicolas Maduro Guerra. Nicknamed Nicolasito, Maduro Guerra controls coltan and gold-mining projects in Bolivar state near Venezuela's border with Colombia. His partners include senior army and national guard officers in Maduro's government, two mining ministry officials tell Argus.
During Nicolasito's week-long stay in Pyongyang, he discussed mining, agricultural and financial issues with senior North Korean government officials, according to a Venezuelan official who formed part of his delegation.
Nicolasito is Venezuela's "untouchable coltan king" and is "seeking new routes to smuggle out coltan and gold from Venezuela" following a recent smuggling bust in Italy, a disgruntled official with the Sebin national intelligence service tells Argus.
During his Asian visits last week, Cabello was tasked by Maduro with proposing potential bilateral agricultural and oil ventures with Vietnamese investors, the palace official said.
Maduro is seeking Vietnamese technical advice and investment to resuscitate Venezuela's rice farming industry which has shrunk from about 1.2mn t/yr in 2014 to only about 400,000 tons in 2018, the palace official said.
The palace official said Maduro also hopes to persuade state-owned PetroVietnam to restart development of PetroMacareo, a 200,000 b/d Orinoco extra-heavy crude joint venture from which the Vietnamese company withdrew in 2013.
According to state-owned Vietnamese media, national assembly chair Nguyen Thi Kim Ngan "affirmed that Vietnam is willing to share experience in socio-economic development, especially in agricultural production, with Venezuela."
Related news posts
Baltimore to temporarily open 4th shipping channel
Baltimore to temporarily open 4th shipping channel
Cheyenne, 24 April (Argus) — The Port of Baltimore is preparing to open another, deeper temporary shipping channel this week so at least some of the vessels that have been stranded at the port can depart. The new 35-ft deep Fort McHenry Limited Access Channel is scheduled to be open to commercially essential vessels from 25 April until 6am ET on 29 April or 30 April "if weather adversely impacts vessel transits," according to a US Coast Guard Marine Safety Information Bulletin. The channel will then be closed again until 10 May. The channel also will have a 300-ft horizontal clearance and 214-ft vertical clearance. This will be the fourth and largest channel opened since the 26 March collapse of the Francis Scott Key Bridge. The Unified Command has said that the new limited access channel should allow passage of about 75pc of the types of vessels that typically move through the waterway. Vessels that have greater than 60,000 long tons (60,963 metric tonnes) of displacement will likely not be able to move through the channel and those between 50,000-60,000 long tons of displacement "will be closely evaluated" for transit. There were seven vessels blocked from exiting the port as of 27 March, including three dry bulk carriers, one vehicle carrier and one tanker, according to the US Department of Transportation. Two of the bulk carriers at berth in Baltimore are Kamsarmax-sized coal vessels, data from analytics firm Kpler show. The US Army Corps of Engineers still expects to reopen the Port of Baltimore's permanent 700-foot wide, 50-foot deep channel by the end of May. The Key Bridge collapsed into the water late last month when the 116,851dwt container ship Dali lost power and crashed into a bridge support column. Salvage teams have been working to remove debris from the water and containers from the ship in order to clear the main channel. By Courtney Schlisserman Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iraq to keep 3.3mn b/d crude export cap until year end
Iraq to keep 3.3mn b/d crude export cap until year end
Dubai, 24 April (Argus) — Iraq will stick to its pledge to cap crude exports at 3.3mn b/d until the end of the year, regardless of what the Opec+ coalition decides at its June meeting, sources with knowledge of the matter told Argus. Baghdad announced the 3.3mn b/d export limit last month , representing a 100,000 b/d cut compared with the first-quarter average. April's exports will be in line with recent months, according to the sources, indicating that Iraq has yet to adhere to the cap. The self-imposed limit on exports is part of Iraq's commitment to compensate for exceeding its 4mn b/d Opec+ production target in the first three months of 2024. It produced 211,000 b/d above target in January, then overshot by 217,000 b/d and 194,000 b/d in February and March, respectively, according to an average of secondary sources including Argus . Prior to that, Iraq exceeded its then 4.22mn b/d output ceiling in each of the last six months of 2023. The persistent overproduction has drawn scrutiny within Opec+, prompting repeated reassurances from Baghdad in recent months that it is committed to its output pledges. Iraq blames it on its inability to oversee production in the semi-autonomous Kurdistan region in the north of the country. Most Iraqi Kurdish crude output is being directed to local refineries or sold on the black market following the closure of the export pipeline that links oil fields in northern Iraq to the Turkish port of Ceyhan just over a year ago. Iraq's federal oil ministry says its Kurdish counterpart has stopped providing production data. Baghdad recently sent the Kurdistan Regional Government (KRG) an official request to hand over oil produced in the region to federal marketer Somo in order to resume Kurdish exports through Turkey, the sources said. Baghdad also urged the KRG back in January to curb output to help Iraq adhere to its lower Opec+ production quota. Ever-widening gap The Association of the Petroleum Industry of Kurdistan (Apikur) said international oil companies (IOCs) operating in the region were hoping that a long-awaited visit to Baghdad by Turkish president Recep Tayyip Erdogan on 22 April might help pave the way for a restart in exports. "We definitely believe the Iraqi government seems more serious about resolving the issues after prime minister [Mohammed Shia] al-Sudani's visit to the US," an IOC source told Argus. But differences between the KRG and Baghdad, mainly over contracts that the former signed with international oil companies (IOCs) in Kurdistan, continue to delay the restart. And tensions between the two sides show little sign of easing. In a statement on 22 April, the KRG's ministry of natural resources accused Baghdad of misleading statements by seeking to blame the KRG for the export shut-in, adding that there is no provision in Iraq's constitution that gives power to the federal government to approve contracts issued by the KRG. With the help of multiple federal court rulings, Baghdad has been attempting to downgrade the KRG's autonomy over its finances and energy sector. A court ruling in February 2022 overturned a law governing Kurdish oil and gas exports and upheld Baghdad's request that all KRG production-sharing contracts be placed under federal oil ministry oversight. The judgment rendered the KRG's 2007 oil and gas law unconstitutional, raising questions over the future of the KRG's active contracts. The KRG's natural resources ministry has dismissed the February 2022 court order, saying it was delivered by a "committee of political appointees in Baghdad". While the federal Iraqi oil ministry "publicly refers to that committee as the 'Federal Supreme Court', everyone knows that it is no such thing", the ministry said. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU adopts sustainability due diligence rules
EU adopts sustainability due diligence rules
Brussels, 24 April (Argus) — The European parliament has formally approved a Corporate Sustainability Due Diligence Directive (CSDDD), which will require large EU companies to make "best efforts" for climate change mitigation. The law will mean that relevant companies will have to adopt a transition plan to make their business model compatible with the 1.5°C temperature limit set by the Paris climate agreement. It will apply to EU firms with over 1,000 employees and turnover above €450mn ($481mn). It will also apply to some companies with franchising or licensing agreements in the EU. The directive requires transposition into different EU national laws. It obliges member states to ensure relevant firms adopt and put into effect a transition plan for climate change mitigation. Transition plans must aim to "ensure, through best efforts" that business models and company strategies are compatible with transition to a sustainable economy, limiting global warming to 1.5°C and achieving climate neutrality by 2050. Where "relevant", the plans should limit "exposure of the company to coal-, oil- and gas-related activities". Despite a provisional agreement, EU states initially failed to formally approve the provisional agreement reached with parliament in December, after some member states blocked the deal. Parliament's adoption — at its last session before breaking for EU elections — paves the way for entry into force later in the year. Industry has obtained clarification, in the non-legal introduction, that the directive's requirements are an "obligation of means and not of results" with "due account" being given to progress that firms make as well as the "complexity and evolving" nature of climate transitioning. Still, firms' climate transition plans need to contain "time-bound" targets for 2030 and in five-year intervals until 2050 based on "conclusive scientific" evidence and, where appropriate, absolute reduction targets for greenhouse gas (GHG) for direct scope 1 emissions as well as scope 2 and scope 3 emissions. Scope 1 refers to emissions directly stemming from an organisation's activity, while scope 2 refers to indirect emissions from purchased energy. Scope 3 refers to end-use emissions. "It is alarming to see how member states weakened the law in the final negotiations. And the law lacks an effective mechanism to force companies to reduce their climate emissions," said Paul de Clerck, campaigner at non-governmental organisation Friends of the Earth Europe, pointing to "gaping" loopholes in the adopted text. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Critical battery metal supply meets today's demand: IEA
Critical battery metal supply meets today's demand: IEA
Singapore, 24 April (Argus) — Supply of critical battery metals such as lithium, nickel and cobalt can "comfortably" meet current demand after major mining and refining investment over the past five years, according to IEA's latest Global EV Outlook 2024 . Global supply of lithium, nickel and cobalt in 2023 exceeded demand by 10pc, 8pc and 6.5pc, respectively, said IEA. Lithium demand for battery rose by 30pc on the year to around 140,000t, that of cobalt increased by 15pc to 150,000t, and nickel rose by 30pc to 370,000t. Continued rapid growth in mining and refining is needed to meet future demand and avoid supply chain bottlenecks, but battery technology advancements can potentially mitigate the demand, IEA said. IEA noted overcapacity has brought critical minerals prices and battery costs down but is also squeezing mining firms' cash flows and margins, with many companies struggling to stay afloat. Australia's nickel industry has been hit hard this year, with multiple producers ceasing operations following a sharp nickel market downturn, having to compete with rising nickel supply from Indonesia. Western Australia had to resort to providing royalty rebates to struggling nickel producers. Low lithium prices are threatening the survival of greenfield lithium project developers , and also affecting some established participants. Major Chinese lithium producer Tianqi Lithium on 23 April issued a profit warning to its shareholders, citing a significant fall in lithium product sales price. Tianqi warned of a net loss of 3.6bn-4.3bn yuan ($497-593mn) in January-March, drastically below a net profit of 4.88bn yuan for the same period a year earlier. Global lithium firm Arcadium Lithium earlier this year warned that current market prices will weigh on future supply . Cobalt prices in China are also under pressure, with market participants forecasting the downtrend to continue at least until the end of this year. "Everyone's mentally prepared that this year's a tough year, even 2025 [can be tough]," said a lithium market participant, noting the adverse effects from this year's global economic downturn. Battery EV battery demand rose by 40pc on the year to 750GWh in 2023, but at a lower rate as EV demand growth also slows down . Among major markets, US and Europe grew the fastest by 40pc on the year, while China — the largest market — grew by 35pc. Battery demand in the rest of the world grew by 70pc, but was still lower than 100GWh. China's battery demand reached 415GWh in 2023, while Europe and US trailed behind at 185GWh and 100GWh, respectively. Battery output in Europe and US were 110GWh and 70GWh, respectively. Lithium-ion battery output in China was 940GWh in 2023 , according to data from the country's Ministry of Industry and Information Technology (MIIT). China is leading the way, but it comes at the cost of "high levels of overcapacity", IEA noted. China used less than 40pc of its maximum cell output, with its installed manufacturing capacity of cathode active material and anode active material at almost four and nine times greater than global EV cell demand in 2023. Homegrown current and additional EV battery manufacturing capacity in Europe and US are scarce. South Korean firms account for over 350GWh of manufacturing capacity outside of South Korea, with around 75pc of existing manufacturing capacity in Europe owned by South Korean firms. Japanese and Chinese firms have 57GWh and 30GWh of capacity, respectively, outside of their own countries. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more