2024-03-05 11:39

March 5 (Reuters) - Sibanye Stillwater (SSWJ.J) , opens new tab on Tuesday reported a $2 billion annual loss and scrapped its final dividend after taking a hit from a slump in metal prices that is forcing South African mining companies to restructure and cut jobs. The precious metals producer swung to the loss last year from a $1.2 billion profit the previous year and record earnings in 2021, when prices for rhodium and palladium, which are extracted alongside platinum, rallied. It reported impairments of $2.6 billion at its U.S. palladium mines, a nickel operation in France and a gold mine in South Africa due in part to the significant decline in metal prices and an uncertain outlook. The loss comes after CEO Neal Froneman embarked on a deal spree, buying battery metal assets in France, Finland, Australia and the U.S. Sibanye last year also attempted to buy a copper mine in Zambia, but was eventually outbid by a rival. Froneman said in a statement that more restructuring might be required, especially at its U.S. PGM operations and the Sandouville nickel refinery in France. "We recognize however that if low commodity prices persist, earnings are going to remain under pressure and, with ongoing inflationary cost pressure, there may be further restructuring required," Froneman said. Sibanye's peers Anglo American Platinum (AMSJ.J) , opens new tab and Impala Platinum (IMPJ.J) , opens new tab are also restructuring loss-making operations and cutting costs, a process which will cost thousands of jobs. https://www.reuters.com/markets/commodities/sibanye-falls-2-bln-loss-scraps-final-dividend-after-write-offs-2024-03-05/

2024-03-05 11:29

Temasek evaluates bids for Pavilion Energy -source Aramco seeks to kickstart LNG trade business -source SINGAPORE/LONDON, March 5 (Reuters) - Singapore's Temasek Holdings has shortlisted energy giants Shell and Saudi Aramco among a handful of companies to purchase most of the assets of liquefied natural gas (LNG) trading firm Pavilion Energy, sources with knowledge of the matter said. The sale process comes a decade after the state investment firm set up Pavilion Energy to focus on LNG-related investments, and takes place as spot Asian LNG prices have fallen more than 40% since mid-August, potentially weighing on the deal's valuation. Temasek is evaluating bids for the sale of Pavilion Energy's assets, excluding its gas pipeline business, one of the sources said, adding that a final bidding round was likely in coming weeks, before a winner is announced if the price is right. It was not immediately clear how many bids Temasek had received, or their financial terms. Bloomberg first reported on the sale process in August. Pavilion Energy directed enquiries to Temasek, which declined to comment. Shell declined to comment and Saudi Aramco did not respond to a request for comment. Barclays, which is advising Temasek on the sale, declined comment. "Pavilion Energy has a decent portfolio from a long-term volumes perspective, so it would be a good opportunity for Aramco to enter the LNG business. For Shell, it would further expand their massive portfolio," an industry source said. Saudi Aramco (2222.SE) , opens new tab, which trades in LNG, is seeking to become a leader in the market as it competes with Middle East rivals QatarEnergy and Abu Dhabi National Oil Co (ADNOC). It has been exploring different opportunities globally and the acquisition would help kickstart its LNG business, one of the sources said, adding: "Aramco is late to the LNG party, but they have the money to catch up.". Felix Booth, head of LNG at energy intelligence firm Vortexa, said: "This move demonstrates Aramco strategic interest in building an LNG portfolio and willingness to venture overseas for supply and import infrastructure. Scale is critical in LNG trading, hence other transactions are needed to complement Pavilions positions." For Shell (SHEL.L) , opens new tab, the world's top LNG trader by volume and the only other LNG importer in Singapore, the acquisition would expand its market share in the city state. Shell, which raked in $2.4 billion in LNG trading in the fourth quarter of 2023, has been importing LNG into Singapore since 2013, supplying a quarter of the country's natural gas needs. Pavilion Energy invested about $1.3 billion in three gas blocks in Tanzania in 2013, soon after it was set up. As one of four firms appointed by Singapore's Energy Market Authority to import LNG, Pavilion supplies one-third of the city state's power and industrial gas demand with LNG and piped natural gas, its website says. It also supplies LNG to ships in Singapore, the world's top bunkering port. In Europe, Pavilion Energy imports about a tenth of LNG volumes in Spain. It gained access to Europe with its 2019 purchase of Spanish energy company Iberdrola's LNG assets, including long-term regasification capacity of about 2 million metric tons a year (tpy) at Britain's Grain LNG terminal, access to regasification capacity in Spain and on a pipeline between Spain and France. Unlisted Pavilion Energy posted a profit after tax of $438 million for the year to March 2023 following a loss of $666 million, Temasek's website showed, while revenue rose 38% to $9.09 billion. Pavilion Energy's shareholder equity value was $3.63 billion as of March 2023, the website showed. https://www.reuters.com/business/energy/singapores-temasek-shortlists-saudi-aramco-shell-sale-pavilion-energy-assets-2024-03-05/

2024-03-05 11:24

MUMBAI/CHENNAI, March 5 (Reuters) - An executive at McDonald's (MCD.N) , opens new tab biggest Indian franchisee Westlife Foodworld (WEST.NS) , opens new tab said on Tuesday the country's top food standards authority had verified its claims of using real cheese in its products after a crackdown by Maharashtra state. The Western state of Maharashtra in November suspended the licence of a McDonald's outlet in the east of Mumbai for allegedly using cheese alternatives made of vegetable oil instead of real cheese, and misleading consumers. The state revoked the suspension after an appeal by Westlife, which dropped the word "cheese" from some of its products including burgers and nuggets in December. Following a decision by the Food Safety and Standards Authority of India (FSSAI), Westlife can use the word cheese in product names where it is one of the key ingredients, Managing Director Saurabh Kalra said at a press conference on Tuesday. The FSSAI and Maharashtra Food and Drug Administration did not immediately respond to requests for comment. "The verification confirms the brand’s assertion that it uses 100% real cheese and that it does not use any cheese analogues or substitutes in any of its products," Westlife said in a statement. Westlife, which operates McDonald's outlets in western and southern India, added that a nationally accredited independent lab had also confirmed it used real cheese in its products. Kalra said the FSSAI's decision was binding on all local authorities, including Maharashtra's, adding that Westlife was working with the state agency to close the issue. Shares in Westlife reversed an early fall of 1% to stand 9.4% higher after the press conference. They sank 6.7% on Feb. 27 when Reuters reported Maharashtra would inspect all its McDonald's outlets in the state. Kalra described the incident as a "bump" in Westlife's long-term plans. https://www.reuters.com/world/india/india-agency-verifies-mcdonalds-claim-real-cheese-use-franchisee-executive-says-2024-03-05/

2024-03-05 11:20

Fiscal deficit up four times from last year Debt-to-GDP increasing at federal govt level Economists say govt to miss its fiscal targets OTTAWA, March 5 (Reuters) - Canadian Prime Minister Justin Trudeau should rein in spending in his upcoming budget if he wants interest rates to come down quickly and alleviate the cost-of-living pressures slamming his polling numbers, economists said. "If (the government) did hold back its spending... that would help to provide more of a disinflationary impulse to the Canadian economy," Randall Bartlett, senior director of Canadian Economics with Desjardins Group. The government had expected direct program expenses to fall by 8% this year, but instead they have jumped by 6%, Bartlett said, adding that further increases in spending in the budget would mean "the (central) bank can't start cutting rates as early or as quickly as Canadians would prefer". Trudeau has expanded support of public health programs and social services over the past eight years. During the pandemic, spending expanded further and in 2020 Canada posted its biggest deficit since World War Two. Economists and analysts said time was running out for Trudeau to get his fiscal house in order. A delay would not only damage his credibility at a time when his poll numbers were abysmal but also could force the central bank to keep rates higher for longer. This year's budget will be presented to parliament on April 16, the Finance Ministry said on Monday. The Bank of Canada (BoC) has kept its key overnight rate at 5% in its last four meetings as housing costs, food prices and wages continue to stoke underlying inflation. The bank is again expected to keep rates on hold at its next rate announcement on Wednesday. The Liberals' spending habits have put it at odds with the central bank. BoC governor Tiff Macklem has repeatedly warned that the level of spending by the federal, provincial and municipal governments is not helping ease inflation and could slow rate cuts. Finance Minister Chrystia Freeland last month told lawmakers that the government's budget would create conditions for rates to come down and that the fiscal targets set last fall would be met. But she is also promising measures to get more homes built amid a housing crunch and to make life more affordable for Canadians. Spending on salaries of government employees, grants, subsidies and capital expenditure - direct program expenses - has risen to about 10% of the GDP currently from 5% in 2015. In the first nine months of the year, these expenses have already surpassed last year's number by a third. The federal deficit swelled by more than four times versus a year earlier to C$23.6 billion during the first nine months of the fiscal year, official data show. Freeland proposed new fiscal anchors in November's Fall Economic Statement capping the deficit at C$40.1 billion - or about 1.4% of GDP - in the current fiscal year. The government is expected to overshoot this deficit by around C$20 billion, which will further push up debt servicing costs, said Robert Asselin, vice president of trade international policy at Business Council of Canada, adding the government would miss its fiscal goals by a big margin. "If you want to get out of a hole, first stop digging it deeper," said John Manley, a former Liberal politician who served as Canada's finance minister between 2002 and 2003, on the government's spending binge. "I think they need to be held to account for what they're committing future governments to spend." ($1 = 1.3578 Canadian dollars) https://www.reuters.com/world/americas/trudeau-should-curb-spending-make-way-rate-cuts-economists-say-2024-03-05/

2024-03-05 11:16

March 5 (Reuters) - The Biden administration’s decision to exclude the existing U.S. fleet of natural gas power plants from upcoming carbon emissions regulations raises questions over the nation's ability to meet its climate goals, according to researchers. Cleaning up the U.S. power industry, source of about a quarter of the nation’s greenhouse gas emissions, has been a central plank of President Joe Biden’s strategy to decarbonize the nation’s economy by 2050 to counter global warming. But in an unusual move, the Environmental Protection Agency late last week said it would take existing gas plants, which account for over 40% of U.S. power sector carbon emissions, out of the plan before finalizing the rule – a decision made after months of intense industry opposition. Because the standards would not have kicked in until after 2030, the existing gas plant rule would have had a minimal contribution to near-term targets. But reducing emissions from those plants would be critical for U.S. climate goals beyond 2030, said Ben King, an associate director with Rhodium Group's energy and climate practice. "Once you retire or mitigate a bunch of emissions from the coal fleet, then what you are left with in the power sector is a bunch of gas that you need to figure out what to do with,” he said. "Utilities and grid operators need to really start planning for that now." The EPA has said it plans to write a separate rule to cover CO2 emissions from existing gas plants as well as other hazardous air pollutants after it finalizes the rest of the regulation later this spring, but did not give a specific timeline. The process of writing and finalizing a new rule often takes over a year and the agency faces the distraction of a looming general election in November. If President Joe Biden loses his bid for a second term to Republican rival Donald Trump, the effort would likely be abandoned. "The Trump administration displayed enormous hostility to environmental protections for American communities when they were in power," Trevor Higgins, senior vice president for energy and environment at the left-wing think tank Center for American Progress, said. "They intend to roll back and halt climate policy across the board." Natural gas plants account for 43% of power sector greenhouse gas emissions, according to EPA's latest figures, and are on track to replace coal as the industry's largest source of emissions in 2028, according to the Energy Information Administration. The proposal stripped from the power regulation would have required large gas-fired plants to install carbon capture equipment by 2035, or co-fire with 30% hydrogen by 2032. The power industry called the proposal unworkable. EPA estimated when it initially unveiled the plan that the portion of the regulation that covered existing gas plants would lead to a cut of between 214 million and 407 million metric tons of carbon dioxide between 2028 and 2042 – the equivalent of around 6% of total U.S. CO2 emissions in a year. UNUSUAL PROCESS The EPA’s proposal upset the U.S. power industry right from the start, in part because utilities had not expected existing gas plants would be included. EPA staff had worked for months on a proposed rule covering coal and new gas plants only, but existing gas plants were added following a White House review, weeks before the May release, according to regulatory documents. The White House and EPA declined to comment on the reason for the last-minute addition. Industry groups as well as some environmental justice advocates later argued the proposals for existing gas plants could backfire by leading utilities to rely on smaller, dirtier plants that fall outside the regulation in order to avoid costly upgrades to bigger generators. An EPA spokesperson acknowledged shortcomings of the rule. "The 2023 proposal for existing gas-fired power plants focused only on large baseload natural gas-fired power plants, considered a limited range of technology options, and initially included separate analyses of available technical information at the time to support different parts of the proposal," EPA spokesperson Tim Carroll said. https://www.reuters.com/sustainability/climate-energy/bidens-scaled-back-power-rule-raises-doubts-over-us-climate-target-2024-03-05/

2024-03-05 11:11

CAPE TOWN, March 5 (Reuters) - The Southern African Power Pool (SAPP) and investment advisers Climate Fund Managers on Tuesday launched a new $1.3 billion target fund to build high-voltage transmission lines linking countries in the region. The Regional Transmission Infrastructure Financing Facility (RTIFF) starts with $20 million in commitments from SAPP, and aims for a first close of $500 million in 2025 in a bid to overcome a key obstacle constraining growth in an evolving energy sector. Finance will be raised from public and private sector investors locally and internationally, a joint statement said. Despite an abundance of energy sources in Africa, a lack of connections between countries has hampered integration and trade among SAPP's 12 members, which include regional economic heavyweight South Africa and top copper exporter Zambia. "RTIFF dismantles this by enabling the private sector to work alongside public sector utilities to roll out new transmission lines at scale," Victor Mapani, chairperson of the SAPP executive committee, said in a statement. The facility, with a fund life of between 20 and 25 years, is expected to reach a final close of $1.3 billion within two years. A renewable energy push, including wind, solar and hydro, has highlighted the dearth of connections across the region where projects, often in remote areas, are unable to connect to national grids. A competitive electricity market with daily trades, SAPP is aiming to connect Angola, Malawi and Tanzania to the platform and has identified eight priority transmission projects, officials said at a press launch. "Since Malawi is already being connected to Mozambique and Tanzania is being connected to Zambia, the next key project is the connection of Angola to Namibia," Stephen Dihwa, executive director of SAPP told Reuters. The Angola-Namibia interconnector is estimated to cost $356 million, he said, around a tenth of the total investment needed for transmission lines by 2040 to enhance regional integration. South Africa's debt-ridden power utility Eskom, which requires around 350 billion rand ($18.41 billion) over the next decade to upgrade its transmission network, is wooing the private sector for investment to overcome the country’s worst electricity shortages on record. "The lack of investment in grid infrastructure is one of the reasons for ongoing blackouts in many parts of Southern Africa," Amit Mohan, head of private credit at CFM said. ($1 = 19.0136 rand) https://www.reuters.com/sustainability/sustainable-finance-reporting/new-13-bln-energy-fund-transmission-links-across-southern-africa-2024-03-05/