Japan to cap foreign investment in rare metals sector
Japan is tightening its grip on foreign investment in domestic industries related to exploration and mining of rare metals including rare earths, of which supplies are critical for the country in its energy transition push towards its 2050 decarbonisation goal.
The country's finance ministry, jointly with the ministries of industry, transport and education, yesterday placed for public consultation a draft amendment to foreign exchange and foreign trade legislation that proposes to add rare metals-related sectors to the list of the country's key industries that should be protected from foreign takeovers to ensure national security. The law's revision is targeted to minimise the vulnerability to the country's supply chain of a designated 34 critical rare metals including lithium, cobalt and rare earths.
Japan in June last year implemented an amended foreign exchange law that tightens control over foreign investment in some 500 firms that conduct business in 12 key sectors, including oil, power and gas utilities, as well as nuclear power. Foreign investors under the revised law acquiring a share of 1pc or more in such companies will be pre-screened compared with 10pc previously. Tokyo has since added drugs and medical equipment to the key sectors, boosting the number of firms under the law's control to more than 700.
The proposed amendment of the foreign exchange law is expected to be enforced later this year following a month-long public consultation period until 16 September.
The sectors to additionally fall under the law's protection include metals mining, including those that operate mineral exploration vessels and carry out onshore/offshore surveys, manufacturing of mining devices and their maintenance services, along with mineral component analysis services. The ministries have also proposed to add the construction services sector involving the maintenance of port facilities on the remote islands of Minamitorishima and Okinotorishima where major mineral deposits have been discovered.
The government wants to secure stable supplies of critical minerals, of which demand is growing globally as production of electric vehicles (EVs), renewable power generation equipment and electronic devices expand to enable energy transition and digitalisation. It is also vital for the country to maintain exploration capability of mineral resources in territorial waters in efforts to reduce the country's dependence on imports and enhance resource security, Tokyo said.
Japan is accelerating its energy transition process, pushing a shift to passenger EVs by 2035 as part of its green growth strategy action plan for 2050 carbon neutrality.
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Japan’s Mitsui lifts aluminium ingot offtake in Brazil
Japan’s Mitsui lifts aluminium ingot offtake in Brazil
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Mexican ag, LPG prices drive July inflation
Mexican ag, LPG prices drive July inflation
Houston, 8 August (Argus) — Gains in agriculture and LPG gas price helped drive Mexico's headline inflation in July to its highest level since May 2023, although core price gains continued to ease. The consumer price index (CPI) rose to an annual 5.57pc in July, up from 4.98pc in June and increasing for a fifth consecutive month, Mexico's statistics agency Inegi said today. A big driver behind the July reading are fruit and vegetable prices, which climbed by 24pc in July, compared with 18pc in June. Farm goods, and tomatoes in particular, have been hit by a double dip of bad weather with two months of extreme drought before flooding rains began to hit in late June at an active start to this year's hurricane season. Also hitting the consumer price index (CPI), energy inflation reached 9.2pc in July from the same month in 2023. The group was led by higher LPG prices, up 26pc over last year. Low-octane gasoline prices were next highest, up 6.9pc. Electricity prices followed, rising 5.35pc on an annual basis. Domestic natural gas was the only energy item to decline, dropping 3.4pc in July. Banorte, however, stressed that core inflation – which excludes volatile food and energy – did ease again in July, slowing to 4.05pc for the month from 4.13pc in June, marking 18 consecutive months of easing. In a note, Banorte said energy prices stand to benefit from base calendar effects in the coming months. Mexican bank Citibanamex noted the lower core as well in a note, adding how the recent rains are beginning to reach the most drought stricken areas, and this should help begin to contain non-core prices. "We expect annual headline inflation to resume a gradual downward trend starting in August, and we maintain our estimates for the end of 2024 at 4.4pc for headline inflation and 4.1pc for core inflation," the bank said. The CPI increased by 1.05pc in June from the prior month, when it posted a 0.38pc monthly gain, said Inegi. The central bank's monetary policy committee today lowered its reference interest rate to 10.75pc from 11pc, its first reduction since March. The central bank cited the continued drop in core prices, adding the inflationary environment might allow for further rate adjustments, considering "global shocks will continue fading and the effects of weakness in economic activity." By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia lithium companies positive despite low prices
Australia lithium companies positive despite low prices
London, 7 August (Argus) — Australian lithium mining firms remain positive that an upswing in prices towards the middle of the decade will support their operations going forward, even though lithium prices are at a five-year low. Lithium prices are bottoming out and should increase later in the decade, according to a number of speakers at the Diggers and Dealers mining forum in Kalgoorlie, Western Australia. "It's still a very bright blue sky, but there is a bit of cloud cover passing through. It's no surprise really, given that lows always follow periods of highs and the industry went through a strong period of highs," Australian mining firm Pilbara Minerals chief executive Dale Henderson said. Price volatility is common in new and rapidly growing industries, such as lithium. The lithium market is connected to the electric vehicle (EV) industry, which has grown from nothing in just a few years. The combination of government stimulus measures, technological developments and the different rates of consumer adoption are all coming together at the same time, Henderson said. "Businesses are rushing to capitalise on the opportunity… It has been volatile and it won't be a straight line and I don't expect it to be a straight line any time soon." Long-term demand picture unchanged Most mining companies remained resolute in their long-term goals, despite some industry cutbacks in the first half of this year, maintaining that long-term lithium demand will support their operations. Australian producer Core Lithium suspended operations at its Grants open pit mine in January. The company is looking for an opportunity to re-enter the market when prices rise, Core Lithium chief executive Paul Brown said. He cited multiple industry participants that have said a price of around $18/kg LCE is needed to support this. Argus assessed lithium carbonate prices at $9.70-10.20/kg cif China on 6 August, their lowest since 2021. "We can't, in an industry as immature as it is, constantly move our strategy from one thing to another," Australian lithium firm Liontown Resources chief executive Tony Ottaviano said. "When you see a 60pc price reduction in six months, there is only one response a company can do and it is blunt. We need to hold our heads while others are losing theirs and push through and look at the long term. Having very credible customers that are also strategic in their outlook is critical to getting that done." The EV market is maturing and despite slowing demand growth in the US and Europe, EV uptake is expected to continue as new models become competitive with internal combustion engine (ICE) vehicles, Ottaviano said. In China, EV prices are already competitive with those of ICE vehicles, he said. "We don't see that yet in North America and Europe, but that will come." To meet the expected rise in lithium demand from EV manufacturing, new investment is needed into lithium, which is being discouraged by current low prices, speakers at the conference said. "The question on supply is, can the industry turn up with 80 new projects by 2035 that aren't financed yet, by the next decade? Each of those on average is 20,000t LCE. The investment required for that at the moment is not going to be easy to come by," IGO chief executive Ivan Vella said. IGO owns 49pc of the world's largest lithium mine, Greenbushes, in Western Australia. Argus estimates global lithium demand will rise to 3.2mn t LCE by 2034 ( see grap h ) By Thomas Kavanagh Global lithium demand Global lithium reserves Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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