2024-12-06 15:50

Biggest bank to leave the Net-Zero Banking Alliance Says it is focused on 'elevated' regulatory requirements Will continue to report on progress LONDON, Dec 6 (Reuters) - Goldman Sachs (GS.N) , opens new tab said it has quit a sector coalition aimed at aligning bank lending and investment activities with global efforts to fight climate change, becoming the most high-profile member to leave the group. The U.S. investment bank's decision comes against a backdrop of pressure from some Republican politicians who have suggested that membership of the Net-Zero Banking Alliance (NZBA) could breach anti-trust rules. Goldman Sachs gave no explicit reason for its departure, but focused on its strategy for the future and a growing push by regulators to make sustainability efforts mandatory. "We have the capabilities to achieve our goals and to support the sustainability objectives of our clients. Goldman Sachs is also very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world," it said in a statement on Friday. While it remains unclear what will happen to U.S. rules around climate-related company disclosures under President-elect Donald Trump, many large U.S. firms including Goldman Sachs will have to disclose under European Union rules. Banks joining the voluntary NZBA agree to align with the world's aim of reaching net-zero emissions by 2050, set targets to help get them there and publish progress on their efforts each year, something Goldman Sachs said it would continue to do. "We have made significant progress in recent years on the firm's net zero goals and we look forward to making further progress, including by expanding to additional sectors in the coming months," it said. "Our priorities remain to help our clients achieve their sustainability goals and to measure and report on our progress." A spokesperson for the NZBA declined to comment when contacted by Reuters. The bank said in 2019 it would deliver $750 billion of sustainable financing by 2030, and noted it had reached about 75% of this target in its 2023 sustainability report. CEO David Solomon reiterated Goldman's commitment to the energy sector in this report, saying the bank will continue to finance and advise clients in the sector, as well as invest in decarbonisation technologies. "We need to do both. It’s not an or, it’s an and," he wrote. The bank said it would align its financing activities to support a net zero target by 2050 and has set interim targets to help clients reduce carbon emissions in the energy, power and automotive sectors. Earlier this year, a number of U.S. investors, including the fund management arm of Goldman Sachs, left a global coalition pushing companies to rein in climate-damaging emissions. Investors including BlackRock (BLK.N) , opens new tab are currently being sued by Texas and 10 other Republican-led states over alleged violations of anti-trust law. Sign up here. https://www.reuters.com/sustainability/sustainable-finance-reporting/goldman-sachs-quits-global-climate-coalition-banks-2024-12-06/

2024-12-06 13:07

BUENOS AIRES, Dec 6 (Reuters) - The Brazilian central bank will step up its campaign to raise interest rates with a big 75 basis point hike on Dec. 11, possibly also hinting at more restrictive monetary policy next year, a Reuters poll showed. That would be the third increase in a row as inflation gathers pace, following two smaller rises of 25 basis points in September and 50 basis points last month, and would leave the Selic benchmark rate at 12%. Banco Central do Brasil (BCB)'s rate hike acceleration coincides with the U.S. Federal Reserve's recent caution on its cutting push in the face of the risk of a resurgence in consumer prices in 2025. A majority of analysts, 31 of 40, predicted a 75 basis points increase on Dec. 11 to 12% from the current 11.25%. Five called for a more moderate 50 basis points increment, while four anticipated a steeper full percentage-point hike. The survey was taken Dec. 2-6. On Monday, BCB's incoming chief said current conditions pointed to "higher interest rates for longer" and that the bank would not intervene in foreign exchange markets in spite of turbulence there that has stoked imported inflation pressure. Brazil's consumer prices rose more than estimated in the month to mid-November, with annual inflation accelerating to 4.77%, above the upper end of the central bank's 1.5%-4.5% target range. All 25 respondents who answered a separate extra question on the BCB's next action forecast another rate increase in January. Among them, 19 saw a 75 basis point move, four a 50 basis point increase, and two envisaged one full percentage point. Looking ahead, the Selic rate is forecast to peak at 13.50% in the second quarter of next year and stay there until the last three months of 2025. Median forecasts from a smaller sample predict it will be lowered then by a half-percentage point to 13.00%. The overall forecasts were more hawkish than a November poll, which predicted the Selic reaching a high of 12% in the first quarter, before reductions of 25 basis points in the July-September period and 75 basis points later, to end 2025 at 11.00%. "Currency depreciation, unanchored inflation expectations, unsustainable debt dynamics, and overheating across goods and labor markets underpin real rates considerably above neutral," Deutsche Bank analysts wrote in a report this week. "The cycle remains open-ended, and conditional on FX and inflation expectations yielding to hikes. Although we pencil in 14.5% at the end of the cycle, risks are skewed to even higher rates and on hold for most of the year (2025)." (Other stories from the Reuters global economic poll) Sign up here. https://www.reuters.com/markets/brazil-central-bank-step-up-rate-hike-campaign-dec-11-2024-12-06/

2024-12-06 12:50

LONDON, Dec 6 (Reuters) - Dealmaker Ian Hannam is suing Randgold Resources for up to $18 million he says he is owed for work on its acquisition by Canada's Barrick Gold (ABX.TO) , opens new tab, telling a London court on Friday that the gold miner reneged on their agreement. Hannam was formerly one of JPMorgan's top rainmakers and nicknamed the "king of mining" for his record of brokering deals in the resources sector, including the merger of BHP Billiton in 2001 and the 2012 merger of Glencore and Xstrata. His reputation was, however, dented more than a decade ago when he was fined 450,000 pounds (now roughly $574,000) for improperly disclosing information, though his actions were not found to lack integrity. Hannam entered the witness box this week to give evidence for his advisory boutique Hannam & Partners' case over an agreement he says was reached shortly before Barrick's 2018 acquisition of Randgold, which says the lawsuit is baseless. Hannam & Partners says it was promised a minimum of $10 million, with the figure to increase if the deal was worth more than $10 billion. Its lawyers say Hannam brokered discussions involving Randgold's then CEO Mark Bristow and Barrick's then executive chairman John Thornton, which led to the merger. After Barrick and Randgold agreed a deal ultimately worth some $18 billion, Hannam asked for $18 million but was rebuffed. "The Barrick-Randgold merger has been hugely successful," Hannam & Partners' lawyer Matthew Hardwick said on the first day of the trial on Wednesday, adding: "But for Ian Hannam's vision, it would not have happened." Randgold's lawyer George Spalton, however, said there was no written evidence of the alleged agreement and that $18 million was roughly what Randgold paid its financial advisors, Barclays and Canadian Imperial Bank of Commerce. Spalton played Hannam a voicemail left by Bristow, now Barrick's CEO, shortly after Hannam & Partners sent an $18 million invoice, which Bristow said was "completely unprofessional". Spalton also referenced Hannam's 2012 fine for sending two emails on a client's behalf, suggesting Hannam had a reputation he "could not be trusted with confidential information" which meant Barrick did not want him involved. Hannam denied that, adding he had accepted his fine and been permitted to open Hannam & Partners by Britain's Financial Conduct Authority. "I have apologised and I have taken my punishment," he said. The trial is due to conclude next week with a ruling expected at a later date. Sign up here. https://www.reuters.com/markets/commodities/dealmaker-hannam-sues-randgold-up-18-mln-over-barrick-merger-work-2024-12-06/

2024-12-06 12:46

BRUSSELS, Dec 6 (Reuters) - EU antitrust regulators are asking Nvidia (NVDA.O) , opens new tab rivals and customers if the U.S. artificial intelligence chipmaker bundles its products that may give it an unfair advantage, people with direct knowledge of the matter said, in a move that may lead to a formal investigation. Nvidia, which has a near-monopoly with an 84% market share, far ahead of rivals Intel (INTC.O) , opens new tab and AMD (AMD.O) , opens new tab, has in recent years attracted regulatory scrutiny from regulators in the European Union, the United States, the UK, China and South Korea. The company has seen high demand from customers involved in generative AI and accelerated computing for its chips. The European Commission recently sent out questionnaires asking if there is any commercial and technical tying of graphics processing unit (GPU) products by Nvidia, the sources said. The document is separate from another related to Nvidia's proposed buy of artificial intelligence startup Run:ai. The EU competition enforcer wants to know how Nvidia sells its GPU products to various customers and whether the contracts require them to buy networking equipment with GPU, the sources said. The Commission declined to comment. Nvidia said: "We support customer choice and compete on merit across the board. Our products are best-in-class and able to stand on their own. We support open industry standards, enabling our partners and customers to use our products in a wide variety of configurations and system designs." Such questionnaires are usually part of the watchdog's fact-finding procedures which could beef up initial concerns. EU antitrust violations can cause companies fines as much as 10% of their global annual turnover. The French antitrust regulator is already investigating Nvidia and is preparing to hit the company with charges, other sources told Reuters earlier this year. Sign up here. https://www.reuters.com/technology/nvidias-business-practices-eu-antitrust-spotlight-sources-say-2024-12-06/

2024-12-06 12:40

Rouble is heading for best week in four months Putin's decree opens payment options for European buyers of gas Finance Minister sees rouble volatility disappearing in one week Sberbank CEO sees rouble's fair value at 100-105 MOSCOW, Dec 6 (Reuters) - The Russian rouble rebounded past 100 to the U.S. dollar, trading at 99.50 on Friday, after a decree by President Vladimir Putin which opened new payment options for European buyers of Russian gas, allowing foreign currency flows to resume. The rouble strengthened by 1.5% against the dollar, according to over-the-counter data from banks. It was also up by 2.4% at 13.57, rebounding past 14, against China's yuan in trade on the Moscow stock exchange. Putin's decree meant that European buyers of Russian gas, including Hungary and Slovakia, who previously used Gazprombank for their transactions, could now convert their currency into roubles in other banks that are not under sanctions. U.S. sanctions imposed on Gazprombank on Nov. 22 disrupted Russia's foreign currency market, leading to a 15% fall in the rouble exchange rate against the dollar. The Russian currency now is on track for its best week in four months, suggesting the market has adjusted to the sanctions. The rouble has been weakening since Aug. 6, the first day of Ukraine's incursion into Russia's Kursk region. Russia's Finance Minister Anton Siluanov directly linked problems with energy payments and U.S. sanctions against Gazprombank to the rouble's weakness, saying the volatility will disappear as soon as a solution for payments is found. "Our foreign trade participants are finding ways to settle accounts with their counterparts abroad, so I think that one more week and everything will be fine," Siluanov was quoted by the Russian media as saying on Dec. 5. Analysts and traders shared this view, saying that Putin's decree has unlocked energy payments, giving a boost to the Russian currency. "Previously stalled large export revenues, which were stuck due to new banking sanctions, may have been 'unblocked' and have now hit the market, which is already very thin," a forex trader in a large Russian bank, who declined to be identified, told Reuters, explaining the reasons for the rouble's rise. Putin said this week that up to 90% of Russia's foreign trade was now in roubles and currencies of 'friendly' nations such as China's yuan. However, some importers still needed dollars and euros, creating domestic demand for both currencies. Russia's sanctioned largest lenders, including state-controlled Sberbank, can no longer hold and trade dollars in euros since they cannot have correspondent accounts in the U.S. and Europe and are cut off from the international SWIFT system. Many Russian banks have been importing large volumes of dollar and euro cash from third countries at least throughout 2023 in order to service their clients in case they want to buy foreign currency. However, many Russian banks, including local subsidiaries of Austria's Raiffeisen, Hungary's OTP and Italy's UniCredit, were not under sanctions and could use SWIFT. Such banks formed the core of the Russian market in dollars and euros, which became entirely over-the-counter following sanctions against Moscow Stock Exchange in June, which made yuan the most traded foreign currency in Russia. Sberbank's CEO German Gref said the fair value of the rouble is in a range of 100-105 to the U.S. dollar, adding that he did not expect more surprise exchange rate fluctuations for now. "Today we do not expect any surprises with this. It will fluctuate depending on the situation. And currently, we do not see any room for a significant weakening of the rouble," Gref said at the bank's investor day. Sign up here. https://www.reuters.com/markets/currencies/rouble-rebounds-past-100-vs-us-dollar-after-putins-gas-payments-decree-2024-12-06/

2024-12-06 12:37

Henkel halts delivery of some products due to lack of antimony - letter to clients Chinese restrictions have prompted a surge in prices of strategic metals Western industrial players seek alternative sources to reduce reliance on China Some North American antimony, graphite players ramped up output BEIJING/TORONTO/LONDON, Dec 6 (Reuters) - China's trade restrictions on strategic minerals are starting to hit Western companies where it hurts. Blaming Beijing's curbs on antimony exports announced in August, German chemicals and consumer goods heavyweight Henkel (HNKG.DE) , opens new tab told customers last month it had declared force majeure and suspended deliveries of four types of adhesives and lubricants widely used by automakers, according to a Nov. 8 letter to clients reviewed by Reuters. Henkel uses the silvery metal to make its Bonderite and Teroson-branded products, core parts of the company's adhesive technologies division, which brought in 10.79 billion euros ($11.4 billion) in revenue last year. "We have been notified by our suppliers that the importation of these raw materials has been delayed pending the Chinese government accepting license applications," according to the letter, which was signed by two senior executives. "As a result, Henkel is hereby declaring force majeure in connection with its deliveries of these products," the German company also said, adding it was unable to predict the duration of the situation. The letter from Henkel, which had not been reported previously, and conversations with more than two dozen traders, miners, processors, end-users, and industry experts in North America, Europe and China underscore the severe disruption caused by Beijing's trade restrictions and highlight how Western players' struggle to replace China-based supply chains. Contacted by Reuters about the letter, Henkel said it was working to support its customers and find alternative supplies: "We are monitoring the global supply situation of antimony very closely and aim to restore solutions to fulfill our customers’ orders." The price of antimony, scarce in nature but essential for military equipment such as ammunition, infrared missiles, nuclear weapons, and night vision goggles, rallied nearly 230% this year to about $39,000 per metric ton in Rotterdam's busy spot market, according to market intelligence provider Argus. China is the world's largest antimony producer and dominates the production of many strategic materials. Last year, Beijing also limited exports of gallium and germanium - used for semiconductors, solar panels and weapons - as well as certain types of graphite - a key component in EV batteries. Responding to a fresh U.S. crackdown on China's chip industry, Beijing this week further ratcheted up pressure, imposing an outright ban on exports of gallium, germanium and antimony to the United States, where Henkel makes Bonderite in Michigan. LOOKING FOR ALTERNATIVES Beijing's restrictions bring added urgency for Western players to cut their reliance on minerals from China. Miner Perpetua Resources (PPTA.O) , opens new tab, for instance, is developing an antimony mine in Idaho with U.S. government funding. But new mines can take years to develop, leaving players like Henkel scrambling to find alternatives, which are often more costly. "Please note that we are in close contact with our suppliers and using all commercially reasonable means to leverage our global supply chain to address this situation and support our customers," Henkel also wrote in the letter. Meanwhile, some Western miners and processors have started to build up capacity. United States Antimony (UAMY.A) , opens new tab (USAC), the only North American processor of the metal, made plans to lift output at its Montana smelter, which was running at 50% of capacity after China announced curbs on antimony exports in August. "Our decision to ramp up production was predominantly triggered by the more than tripling of worldwide Rotterdam antimony prices," the company's chairman, Gary Evans, told Reuters. China's restrictions "created significantly more demand for our finished products," he added. Mining at the Montana site was halted in 1983, when it was cheaper to source antimony from mines outside the United States, and environmental curbs now prevent extraction there, according to the company. USAC, which does not rely on China, is in talks to receive the material from four other countries and one domestic supplier as early as December, Evans said, declining to name them for competitive reasons. Orders at Ottawa-based Northern Graphite (NGC.V) , opens new tab, which touts itself as North America's only producer of natural flake graphite, jumped 50% in the aftermath of China's graphite curbs announced in October 2023, CEO Hugues Jacquemin told Reuters. "When the export controls came into effect in December last year, there was quite a surge in demand. We started ramping up capacity," said Jacquemin, whose firm is developing projects in Namibia and Ontario to add to its mine in Lac des Iles, Quebec. China accounts for over 70% of supply of both natural mined graphite and its synthetic variety. Mark Jensen, CEO of ReElement Technologies, an arm of American Resources (AREC.O) , opens new tab that specialises in recycling and refining rare earths, said China's most recent export ban means the company has this week fielded at least 10 calls from U.S. miners offering zinc ore, which can be a source of germanium during processing. Those shipments had previously gone to China for processing given lower labour cost and different environmental standards, he said. "We have been reaching out to U.S. suppliers of these feedstock to sell these byproducts to us instead of sending it to China as we are now an alternative to China," Jensen told Reuters. Canadian miner Teck Resources (TECKb.TO) , opens new tab, which produces germanium as a byproduct at its Red Dog zinc mine in Alaska and is the only supplier of the metal in North America, told Reuters it was studying whether to boost output of the critical material there now that China has blocked exports to the United States. DISRUPTED MARKETS China's export squeeze has triggered a surge in prices for many strategic minerals. Gallium sold outside of China was 30% to 40% more expensive than in the People's Republic in the first half of 2024 from a year before, according to Toronto-based Neo Performance Materials (NEO.TO) , opens new tab, which produces gallium by recycling manufacturing scrap, said in August. In China, the restrictions have forced some weaker players out of the market, traders and analysts told Reuters. Two Chinese germanium traders told Reuters they had given up on exports as they were unable to secure licenses either because overseas clients were unwilling to provide specific details on end-users or because they are from the United States. Even before Beijing's latest curbs singling out the United States, no Chinese germanium or gallium was shipped there this year through October, Chinese customs data show. Over the same period in 2023, the U.S. ranked as the fourth- and fifth-largest export market for the minerals. For end-users, China's restrictions underscore the importance of supply diversification. "When you de-risk, you need to de-risk with different levers," said Maxime Picat, chief purchasing officer at automaker Stellantis (STLAM.MI) , opens new tab. "If you are a one-solution company, knowing that your battery suppliers are all Chinese or all Korean, then you are at risk." ($1 = 0.9465 euros) Sign up here. https://www.reuters.com/markets/commodities/rattled-by-china-west-scrambles-rejig-critical-minerals-supply-chains-2024-12-06/