Which way? Energy

[themickey]

October 18, 2021
China
China coking coal, coke futures surge to record highs on supply woes
Reuters
2 minute read

A worker inspects a conveyor belt carrying coal at a coal coking plant in Yuncheng, Shanxi province, China January 31, 2018. Picture taken January 31, 2018. REUTERS/William Hong/Files

BEIJING, Oct 18 (Reuters) - China's coking coal and coke futures jumped about 9% on Monday to record highs, as supply remains tight even though Beijing has ramped up efforts to boost output.

The most-traded coking coal futures on the Dalian Commodity Exchange , for January delivery, surged as much as 9% to 3,869 yuan ($601.24) a tonne before closing up 8.4% at 3,847 yuan per tonne.

Coke futures hit their daily trading limit, up 9% at 4,344 yuan per tonne.

"Coke prices were mainly supported by raw material coking coal," said Tang Binghua, an analyst with Founder CIFCO Futures, adding there was still supply crunch for coking and thermal coal.


"The (tight supply) situation has not eased yet, especially as the government needs to ensure heating demand during winter."

China's coal production stood at 334.1 million tonnes in September, compared with 335.24 million tonnes in August and down 0.9% on an annual basis, according to data from the National Bureau of Statistics.

Coke output last month plunged 9.6% year-on-year to 37.18 million tonnes, data showed.

Peabody knows which side its bread is buttered on, just don't drop it on the (coal) floor.

 

[themickey]

https://stockhead.com.au/resources/...g-yellowcake-from-the-tightening-spot-market/

In August, the Sprott Physical Uranium Trust (SPUT) started buying up physical uranium, taking it out of market circulation.

It has been a proverbial “can of kerosene” on the spot price, which has since risen from ~$32/lb to about ~$US47/lb currently.

SPUT has stacked (removed) over 15.3m pounds of uranium since inception. A gigawatt-class reactor uses around 450,000 pounds per year, so this is no small amount, says 808s Online, a blog run by a US nuclear professional.

Now another fund has joined the party; ANU Energy OEIC, backed by the world’s largest uranium producer Kazatomprom.

Like SPUT, the fund will hold physical uranium as a long-term investment, with its initial purchases financed through the founders’ round investment totalling $US50m (48.5% from Kazatomprom, 48.5% from the National Investment Corporation of the National Bank of Kazakhstan (NIC), and 3% from fund manager Genchi Global).

The fund is then expected to raise capital of up to $US500 million from institutional and/or private investors, with the proceeds to be used for additional uranium purchases.

“The Fund will leverage the combination of Kazatomprom’s expertise in the uranium market and NIC’s proven track record, with the AIFC offering investors direct exposure to the attractive opportunity presented by the long-term fundamentals of the uranium market and nuclear industry,” said Mazhit Sharipov, CEO of Kazatomprom.

“The establishment of ANU Energy is a project that has been in development for almost four years as part of Kazatomprom’s broader value-focused strategy, and the Fund will be operating in an environment of tightening supply, driving positive benefits for its stakeholders.”

 

[themickey]

Thiel-backed Canadian lithium junior said to prepare Nasdaq listing
Bloomberg News | October 18, 2021 | Battery Metals Markets USA Lithium
https://www.mining.com/web/thiel-backed-lithium-miner-is-said-to-prepare-nasdaq-listing/

German-American entrepreneur Peter Thiel. Image: Dan Taylor | Wikimedia Commons

Rock Tech Lithium Inc. is preparing a Nasdaq listing to broaden its investor base and help finance a $545 million battery-metals plant in Germany near sites of key suppliers and customers including Tesla Inc. and BASF SE, according to people familiar with the matter.

The U.S. stock market presence would complement Rock Tech’s listings on the Toronto and Frankfurt exchanges and is linked to a planned equity raise next year, said the people, who asked not to be identified because the talks are private.

Rock Tech hasn’t made a final decision on the U.S. listing and its plans could still change, the people said.

A spokesman representing Vancouver-based Rock Tech declined to comment.

The company, backed by venture capitalist Peter Thiel, is betting on Germany playing a leading role for Europe’s electric-vehicle transition. Rock Tech announced a week ago that the processing plant would be built in Brandenburg, the German state outside Berlin where Tesla is completing its first vehicle factory in Europe.

Tesla’s plant in Gruenheide is slated to start producing vehicles this year even as it awaits final approval for the project, which has been delayed by legal challenges.

Rock Tech plans to start output at the plant as early as 2024. Europe’s first lithium converter will have a production capacity of 24,000 tons per year, which is equivalent to the volume needed to make lithium-ion batteries for about 500,000 electric cars, the company said last week.

Lithium has more than doubled in price from a year ago as automakers accelerate a push for electric vehicles. Global consumption of the key battery metal is projected to grow fivefold by 2030, according to BloombergNEF.

Rock Tech, whose investors include Christian Angermayer and hedge fund billionaire Alan Howard, recently hired former BMW AG and Deutsche Bank AG finance boss Stefan Krause as chief financial officer.

(By Christoph Rauwald and Eyk Henning)

 

[themickey]

https://www.afr.com/companies/minin...igger-more-deals-says-peabody-20211031-p594no
Record coal prices to trigger more deals, says Peabody
Peter Ker Resources reporter Nov 1, 2021

Multinational coal loyalist Peabody says booming commodity prices will make mergers and acquisitions more likely in an unfashionable sector where lender reluctance has made it hard to execute deals in recent years.

Peabody has been viewed as a likely suitor for the Australian mines that BHP is trying to sell in NSW and Queensland, and chief executive Jim Grech reiterated on Friday he is keener to grow in “seaborne” markets rather than North America, where he said coal was in “secular decline”.

“My belief is consolidation does need to occur ... even with these strong prices, there are too many different players out there,” he said.

BHP’s Mt Arthur mine in the Hunter Valley is on the market. Janie Barrett

“As an industry in general, as everyone’s liquidity is better and stock prices are improving versus where it was a year or two ago, all those things are tools to have more M&A [mergers and acquisitions] than there has been in the past.”

(Peabody tends to use the word “seaborne” as code for the sale of Australian coal to Asian power generators and steel mills, which Peabody views as the coal market segments most resilient in a decarbonising world.)
Mr Grech said deals had been hard to strike during the industry downturn in 2020 because lenders had been reluctant to fund transactions. “It has been elusive and one of the issues has been the availability of capital to do anything whether it is capital improvement or M&A,” he said.

BHP is trying to sell its Mt Arthur thermal coal mine in the Hunter Valley as well as the Queensland mines that produce intermediate and lower quality coking coal.

Vale’s impairment
The comments came as one of the multinationals trying to rid itself of coal’s bad reputation, Brazil’s Vale, reduced the carrying value of coal mines it wants to sell by $US1.95 billion to zero because bidders were refusing to value mines at the record coal prices currently on offer in daily markets.

Prices for both Australian thermal and coking coal have set record highs over the past two months on the back of multiple supply disruptions, including weak supply by the biggest exporters of those commodities; Glencore and BHP respectively.

Glencore revealed on Friday that it had shipped 6 per cent less thermal coal over the past nine months than in the same period of last year, while BHP’s coking coal exports slumped 26 per cent in the three months to September, giving the company its weakest quarterly output since mid-2017.

The price rally has complicated a wave of long-expected transactions that are expected to divide the world’s major coal basins between those, such as Peabody and Glencore, who are willing to have coal attached to their brands, and the rest of the world’s multinational miners, who have either exited or are trying to reduce their exposure to coal.

Investor pressure on multinationals to exit coal has emboldened bidders to lob lowball prices, with one major coal chief executive recently telling his investors that if rivals wanted to sell mines for “ESG reasons”, then he was happy to buy coal mines “at ESG prices”.

Vale has been trying to sell its Mozambique coking coal business and expects bids within the next month.

Vale executive Luciano Pires said on Saturday the Mozambique assets were generating $US100 million of earnings per month at current coal prices, but despite that lucrative situation the company had written down the division’s value from $US1.95 billion to zero ahead of a sale.

Mr Pires said Vale expected bidders to pay something for the mine, but the company couldn’t be confident. “The issue here is that no potential buyer will buy the coal assets based on today’s prices,” Mr Pires said.

“Probably we’ll have a sale for economic value. [But] we decided to be conservative and go all the way down to zero.”

Vale’s impairment comes after BHP took a $US1.7 billion impairment on Mt Arthur in August to “reflect the status of the divestment process”.

Coronado Global Resources, Whitehaven Coal, New Hope, Yancoal and ambitious microcap Bowen Coking Coal are among those on the ASX wanting or willing to grow their coal businesses if assets are available at good prices.

Whitehaven has long talked up plans to build new mines at Vickery in NSW and Winchester South in Queensland, but has more recently signalled it won’t start construction at either mine in the next 18 months at least.

Meanwhile, Whitehaven has an opportunity to grow its business through extremely low-risk acquisitions, by buying out the minority partners in the mines it already operates.

Whitehaven revealed last month it would pay at least $US21.6 million to buy a royalty on its Narrabri mine that had been owned by British royalty company Anglo Pacific.

In 2019, Whitehaven paid $US72 million for a 7.5 per cent stake in Narrabri that had been owned by EDF Trading. A further 22.5 per cent of the Narrabri mine remains owned by Asian power utilities.

Whitehaven is also expected to be the buyer of the 15 per cent stake in its Maules Creek mine that Japanese giant Itochu is trying to sell.

 

[vanzandt]

https://www.afr.com/companies/minin...igger-more-deals-says-peabody-20211031-p594no
Record coal prices to trigger more deals, says Peabody
Peter Ker Resources reporter Nov 1, 2021

Multinational coal loyalist Peabody says booming commodity prices will make mergers and acquisitions more likely in an unfashionable sector where lender reluctance has made it hard to execute deals in recent years.

Peabody has been viewed as a likely suitor for the Australian mines that BHP is trying to sell in NSW and Queensland, and chief executive Jim Grech reiterated on Friday he is keener to grow in “seaborne” markets rather than North America, where he said coal was in “secular decline”.

“My belief is consolidation does need to occur ... even with these strong prices, there are too many different players out there,” he said.

BHP’s Mt Arthur mine in the Hunter Valley is on the market. Janie Barrett

“As an industry in general, as everyone’s liquidity is better and stock prices are improving versus where it was a year or two ago, all those things are tools to have more M&A [mergers and acquisitions] than there has been in the past.”

(Peabody tends to use the word “seaborne” as code for the sale of Australian coal to Asian power generators and steel mills, which Peabody views as the coal market segments most resilient in a decarbonising world.)
Mr Grech said deals had been hard to strike during the industry downturn in 2020 because lenders had been reluctant to fund transactions. “It has been elusive and one of the issues has been the availability of capital to do anything whether it is capital improvement or M&A,” he said.

BHP is trying to sell its Mt Arthur thermal coal mine in the Hunter Valley as well as the Queensland mines that produce intermediate and lower quality coking coal.

Vale’s impairment
The comments came as one of the multinationals trying to rid itself of coal’s bad reputation, Brazil’s Vale, reduced the carrying value of coal mines it wants to sell by $US1.95 billion to zero because bidders were refusing to value mines at the record coal prices currently on offer in daily markets.

Prices for both Australian thermal and coking coal have set record highs over the past two months on the back of multiple supply disruptions, including weak supply by the biggest exporters of those commodities; Glencore and BHP respectively.

Glencore revealed on Friday that it had shipped 6 per cent less thermal coal over the past nine months than in the same period of last year, while BHP’s coking coal exports slumped 26 per cent in the three months to September, giving the company its weakest quarterly output since mid-2017.

The price rally has complicated a wave of long-expected transactions that are expected to divide the world’s major coal basins between those, such as Peabody and Glencore, who are willing to have coal attached to their brands, and the rest of the world’s multinational miners, who have either exited or are trying to reduce their exposure to coal.

Investor pressure on multinationals to exit coal has emboldened bidders to lob lowball prices, with one major coal chief executive recently telling his investors that if rivals wanted to sell mines for “ESG reasons”, then he was happy to buy coal mines “at ESG prices”.

Vale has been trying to sell its Mozambique coking coal business and expects bids within the next month.

Vale executive Luciano Pires said on Saturday the Mozambique assets were generating $US100 million of earnings per month at current coal prices, but despite that lucrative situation the company had written down the division’s value from $US1.95 billion to zero ahead of a sale.

Mr Pires said Vale expected bidders to pay something for the mine, but the company couldn’t be confident. “The issue here is that no potential buyer will buy the coal assets based on today’s prices,” Mr Pires said.

“Probably we’ll have a sale for economic value. [But] we decided to be conservative and go all the way down to zero.”

Vale’s impairment comes after BHP took a $US1.7 billion impairment on Mt Arthur in August to “reflect the status of the divestment process”.

Coronado Global Resources, Whitehaven Coal, New Hope, Yancoal and ambitious microcap Bowen Coking Coal are among those on the ASX wanting or willing to grow their coal businesses if assets are available at good prices.

Whitehaven has long talked up plans to build new mines at Vickery in NSW and Winchester South in Queensland, but has more recently signalled it won’t start construction at either mine in the next 18 months at least.

Meanwhile, Whitehaven has an opportunity to grow its business through extremely low-risk acquisitions, by buying out the minority partners in the mines it already operates.

Whitehaven revealed last month it would pay at least $US21.6 million to buy a royalty on its Narrabri mine that had been owned by British royalty company Anglo Pacific.

In 2019, Whitehaven paid $US72 million for a 7.5 per cent stake in Narrabri that had been owned by EDF Trading. A further 22.5 per cent of the Narrabri mine remains owned by Asian power utilities.

Whitehaven is also expected to be the buyer of the 15 per cent stake in its Maules Creek mine that Japanese giant Itochu is trying to sell.

40 days ago:

Have you looked at coal lately?
Its better than Uranium.

 

[themickey]

40 days ago:

My bad, sorry.

 

[themickey]

Have you looked at coal lately?
Its better than Uranium.

I've actually written off coal as a trade/investment a while back, and long term historically coal price it's not looking too good.
I think uranium going forward has more potential as a trade/investment, atm uranium is having a rest after running up hard, I hold 3 uranium positions and zero coal.

Coal I'm not writing off as a bad investment, just my opinion is it may get spooked a little too often with negative surprises, I view it as a bit too risky and speculative, plus it carries some negativity from the green brigade and fund managers may not give it as much support as possibly uranium.

 

[themickey]

coal as a trade/investment a while back, and long term historically coal price it's not looking too good.

Coal (black) & Uranium (green)

 

[vanzandt]

View attachment 270360
Coal (black) & Uranium (green)

Spot coal.

Uranium:

 

[themickey]

Go boy!