2023-11-28 20:29

PANAMA CITY, Nov 28 (Reuters) - Panama's president said on Tuesday that Canadian miner First Quantum's lucrative copper mine Cobre Panama would be shut down, hours after the country's Supreme Court declared its contract unconstitutional. President Laurentino Cortizo said in a televised address on Tuesday evening that "the orderly and safe closure of the mine" would begin as soon as the Supreme Court's ruling was formerly published in the official gazette. Cobre Panama has sparked public anger in the country that has spilled into street protests. The protests began as small, environmental ones against the mine but have morphed into broader demonstrations against the government amid charges the contract was too generous. First Quantum said on Tuesday it had suspended commercial production at the mine and was putting in into care and maintenance. The ruling puts the company on the long and unpredictable road of international arbitration, although it has suggested it would seek to avoid the process if possible through pre-arbitration talks with the Panamanian government. The contract in dispute was agreed last month by Panama's government and provided First Quantum a 20-year mining right with an option to extend for another 20 years, in return for $375 million in annual revenue to Panama. "We have decided to unanimously declare unconstitutional the entire law 406 of October 20, 2023," Supreme Court President Maria Eugenia Lopez said on Tuesday. First Quantum acknowledged the ruling and affirmed its "unwavering commitment to regulatory compliance in all aspects of our operations within the country." Protester groups on social media said they would keep demonstrating until the ruling was published in the official gazette. First Quantum (FM.TO) shares closed down 0.8%. The company has lost more than C$10 billion ($7.4 billion) of its market value since the protests started in late October and the mine was later forced to suspend production. The ruling will also have consequences for the copper market, as Cobre Panama accounts for about 1% of global copper production. Benchmark copper on the London Metal Exchange was up 0.9% at $8,441 a metric ton. Dwindling copper supply from Panama and Peru could wipe out global surplus in 2024, analysts said. ELECTION FACTOR Cobre Panama is an equally significant business for the Central American nation, contributing about 5% of Panama's GDP. J.P. Morgan warned this month that the odds of Panama losing its investment-grade rating would rise significantly if the contract was revoked. The fierce opposition toward the deal was becoming a major factor in the country's May 2024 presidential election, with candidates pushing for more state control of the mine. The company's Panama unit in a statement on Tuesday said it would "remain attentive to constructive dialogue" on the mining contract before deciding its course of action. A spokesperson for Canada's foreign ministry said it respects the decision of Panama's Supreme Court of Justice and was closely following the contract negotiations. Former president, millionaire businessman and leading presidential candidate Ricardo Martinelli last week proposed that Panama renegotiate the contract with the Canadian firm to secure higher royalties and a stake in the project. But in response to the protests, Panama's government enacted a bill in November banning all new mining concessions and extensions that legal experts have said would prevent the two parties from negotiating a new deal. The country's top court ruled against First Quantum's previous contract in 2017. The decision was upheld in 2021, but the current government allowed the miner to keep operating while both parties negotiated a new deal. For First Quantum, the Panama ruling would be a repeat of its experience in the Democratic Republic Of Congo, where it exited in 2012 after filing an arbitration procedure against the African country for cancelling its mining contract. First Quantum sold its assets to Eurasian Natural Resources Corporation PLC for $1.25 billion and settled the dispute. The company has spent about $10 billion in developing the Cobre Panama mine over a decade. The mine produced 112,734 tonnes of copper in the third quarter and accounted for about 46% of its overall third-quarter revenue of $2.02 billion, according to the company. ($1 = 1.3590 Canadian dollars) https://www.reuters.com/markets/commodities/top-panama-court-rules-first-quantum-mining-contract-unconstitutional-2023-11-28/

2023-11-28 20:20

MONTREAL, Nov 28 (Reuters) - Northvolt is looking at the Canadian province of Quebec as a possible site to industrialize its Cuberg lithium metal battery system for electric planes, the Swedish company's co-founder said on Tuesday, adding that a decision was still years away. "We are looking at it," Paolo Cerruti, who heads the company's North American division, told reporters on the sidelines of an event at the Chamber of Commerce of Metropolitan Montreal. "It is very early on, we are a few years away. Probably second half of this decade," Cerruti said. While the aviation industry has sought to make more fuel-efficient designs, the heavy weight of traditional lithium-ion batteries has prevented aircraft makers from following in the footsteps of car companies in building electric engines. California-based Cuberg, a subsidiary of Northvolt, has begun testing its battery system which the company says is light enough to be installed on a plane to make electric flying safe and sustainable. "We are looking at reserving space on site if it makes sense to have the first industrial scale up here in Quebec," Cerruti said. Northvolt has also committed to building a $5.2 billion electric vehicle battery gigafactory in Quebec, the largest ever investment in the Canadian province. https://www.reuters.com/markets/commodities/swedens-northvolt-weighs-quebec-potential-electric-plane-battery-plant-2023-11-28/

2023-11-28 20:19

Nov 28 (Reuters) - Canadian miner First Quantum Minerals (FM.TO) suspended commercial production at its flagship Cobre Panama mine on Tuesday after the Panama Supreme Court ruled its contract to operate the mine as unconstitutional. The contested contract gave First Quantum a 20-year mining right with an option to extend for another 20 years in return for $375 million in annual revenue to Panama. Cobre Panama accounts for about 1% of global copper production and contributes to about 5% of Panama's gross domestic product. A look at the events since December last year as the ruling puts the company on the long and unpredictable road of international arbitration: 2022 Dec. 15: Panama orders First Quantum to pause operations at Cobre Panama after missing a deadline to finalize a deal that would have increased payments to the government. Dec. 24: First Quantum starts arbitration process against Panama. 2023 Feb 23: First Quantum suspends ore processing at the mine. March 8: Panama and First Quantum agree on the final text for a contract to operate the mine. March 15: First Quantum resumes operations at Cobre Panama. Sept. 9: First Quantum reaches a deal over wages with the workers union at Cobre Panama. Oct. 3: Panama's government authorizes the withdrawal of the proposed contract to regulate operations of First Quantum's local unit. Oct 10: Panama's cabinet approves a modified version of the government's contract. Oct 20: Panama's President Laurentino Cortizo gives final approval of a law authorizing a new long-term contract for the mine. Oct 24: Police arrest nearly 50 protesters in confrontations over the new contract. Oct 27: Cortizo says the country will reject all new mining projects after widespread protests against the deal. Oct 29: Cortizo says Panama will hold a referendum to decide whether to scrap the contract with the Canadian miner. Oct 30: Panama's electoral court says currently there are not "conditions" to hold a referendum on the disputed mining contract. Nov 2: Panama's lawmakers scratch provisions to cancel the contract with First Quantum from a proposed bill banning new mining concessions in the country. Nov. 7: Two people taking part in an anti-government protest in Panama are shot dead by an assailant. Nov. 13: First Quantum says reduced ore processing at mine as protesters block access to ports. Nov. 16: The company and workers at the mine reach an agreement guaranteeing salaries as protests continue. Nov. 24: Panama's top court starts deliberations to rule on several constitutional challenges to the contract. Nov. 27: The company says it hopes to avoid arbitration with Panama's government by resolving disagreements during a 90-day period for talks. Nov. 28: First Quantum says it was suspending commercial production at the Cobre Panama mine after the Panama Supreme Court ruled its contract to operate the copper mine as "unconstitutional". https://www.reuters.com/markets/commodities/panamas-top-court-ruling-mine-contract-latest-setback-first-quantum-2023-11-28/

2023-11-28 20:05

NEW YORK, Nov 28 (Reuters) - Federal Reserve Bank of New York President John Williams said Tuesday longer-term inflation expectations have been encouragingly steady, and he welcomed declining inflation pressures. "The recent news about the long-run anchoring of inflation expectations in the United States is mostly reassuring: available measures of longer-run inflation expectations in the United States have remained remarkably stable," Williams said in a chapter of a new Bank for International Settlements report. Williams did not make any forward-looking comments about monetary policy in the report, but he did note what he sees as an encouraging trend of falling inflation and an ongoing commitment by the central bank to hitting its 2% target. Williams also wrote that a rise in uncertainty over the future of inflation does not mean that the public expects higher price pressures. This rise in uncertainty "does not appear to be due to unmoored longer-run expectations, given that the measures do not suggest that uncertainty is increasing linearly with the forecast horizon," Williams wrote. "On the contrary, for many measures, uncertainty about longer-run inflation has increased by about the same degree or less than shorter-horizon measures," he said. https://www.reuters.com/markets/us/feds-williams-welcomes-stability-longer-run-inflation-expectations-2023-11-28/

2023-11-28 19:54

Nov 28 (Reuters) - The U.S. Coast Guard said on Tuesday that about 3% of the Gulf of Mexico's daily oil production remained shut in after a million-gallon oil spill, as it continued surveying Third Coast Infrastructure's pipeline to find the source of the leak. The pipeline was closed by Third Coast's Main Pass Oil Gathering Co (MPOG) on Nov. 16 after crude oil was spotted around 19 miles (30 km) offshore the Mississippi River delta, near Plaquemines Parish, southeast of New Orleans. The Coast Guard had not yet identified the source of the leak after surveying around 40 miles (64 km) of the 67-mile-long (108 km) underwater pipeline, as remote-controlled devices and divers scanned the rest along with other surrounding pipelines. No new oil had been spotted since Nov. 20 from the suspected release, the Coast Guard said while leading clean-up efforts. Initial calculations placed the volume of the leak at 1.1 million gallons, or 26,190 barrels, with the Bureau of Safety and Environmental Enforcement estimating that around 61,165 barrels of daily oil output from at least six producers was shut in. Operators whose facilities are impacted include W&T Energy VI (WTI.N), Occidental Petroleum (OXY.N), Walter Oil and Gas, Cantium, Arena Offshore and Talos Energy Ventures (TALO.N). https://www.reuters.com/markets/commodities/us-coast-guard-says-3-gulf-mexicos-daily-oil-output-remains-shut-2023-11-28/

2023-11-28 19:23

Consumer confidence index rises to 102.0 in November October index reading revised down to 99.1 from 102.6 Labor market differential up slightly to 23.9 from 23.8 Annual house price growth accelerates in September WASHINGTON, Nov 28 (Reuters) - U.S. consumer confidence rose in November after three straight monthly declines, with Americans planning big-ticket purchases like motor vehicles and houses over the next six months even as they continued to fret over higher prices and interest rates. Despite the rebound in morale, which was driven by an improvement in expectations, about two-thirds of consumers surveyed this month still perceived a recession to be "somewhat" or "very likely" to happen over the next year, the survey from the Conference Board showed on Tuesday. Most economists are, however, not forecasting a recession, but rather a period of very slow growth. Those expectations were strengthened by recent inflation-friendly data, including a moderation in job gains in October, that have led financial markets to believe that the Federal Reserve was probably done raising interest rates this cycle. "Overall, this data supports the idea of slower growth at the moment but the prospect of continued growth into next year," said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts. The Conference Board said its consumer confidence index increased to 102.0 this month from a downwardly revised 99.1 in October. Economists polled by Reuters had forecast the index dipping to 101.0. The improvement in confidence was concentrated mostly among households aged 55 and up. Consumers in the 35-54 age group were less optimistic about their prospects. The survey's present situation index, based on consumers' assessment of current business and labor market conditions, edged down to 138.2 from 138.6 in October. Its expectations index, based on consumers' short-term outlook for income, business and labor market conditions, rose to 77.8 from 72.7. It remains below 80, a level historically associated with a recession within the next year. "General improvements were seen across the spectrum of income groups," said Dana Peterson, chief economist at the Conference Board. "Nonetheless, write-in responses revealed consumers remain preoccupied with rising prices in general, followed by war/conflicts and higher interest rates." Consumers' 12-month inflation expectations fell to 5.7% from 5.9% in October, likely reflecting news this month that inflation subsided in October. This is welcome news for the U.S. central bank after the University of Michigan's consumer survey last week showed long-term inflation expectations rising in November to levels last seen in 2011. The share of consumers in the Conference Board survey expecting higher interest rates was the smallest since April 2021, while the proportion anticipating lower borrowing costs was the largest in nearly three years. The cooling inflation backdrop has left financial markets anticipating a rate cut from the Fed in mid-2024, according to CME Group's FedWatch Tool. Those expectations got a boost from comments by Fed Governor Christopher Waller on Tuesday that "if we see disinflation continuing for several more months ... you could then start lowering the policy rate just because inflation's lower." Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose. RISE IN BUYING PLANS Since March 2022, the Fed has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range. Amid signs that inflation was abating, consumers appeared more keen to step up spending over the next six months. The survey showed an increase in the share of consumers intending to buy motor vehicles and major household appliances like refrigerators, washing machines and televisions sets. While there is no strong correlation between confidence and consumer spending, the rise in buying intentions suggests that consumers should continue to underpin the economy. Data from Adobe Analytics suggest that online consumer spending jumped 7.8% during Cyber Week, or the five days from Thanksgiving through Cyber Monday, outstripping expectations for a  5.4% rise. Consumer spending remains supported by a resilient labor market. Though job growth has moderated, labor market conditions remain fairly tight by historical norms. The Conference Board's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, widened slightly to 23.9 this month from 23.8 in October. This measure correlates to the unemployment rate in the Labor Department's closely followed employment report. More people, however, reported that jobs were getting harder to find, a potential sign of looming labor market weakness. The survey also showed more consumers planned to buy a house over the next six months. They, however, could run into affordability challenges as rates above 7% on the popular 30-year mortgage and an acute shortage of properties for sale inflate the cost of buying a home. A second report from the Federal Housing Finance Agency on Tuesday showed annual home price growth accelerated again in September, largely reflecting the dearth of previously owned houses. House prices surged 6.1% on a year-on-year basis in September, the largest gain since December, after rising 5.8% in August. Prices increased a solid 0.6% month-on-month after advancing 0.7% in August. "We expect to see some weakness in home prices in fourth quarter and early next year, as sellers need to make some concessions to attract buyers," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York. "However, we expect that a limited supply of homes for sale will continue to keep a floor under prices." https://www.reuters.com/markets/us/us-consumer-confidence-rises-november-2023-11-28/