South Korea to expand investment tax credit for EVs, H2

Market: Battery materials, Hydrogen, Metals
10/05/23

South Korea plans to further extend its national strategic technology investment tax credit to certain investments in electric vehicle (EV) and hydrogen technology and facilities, in a bid to encourage greater investment in these sectors.

It previously said it is expanding the scope to be eligible for the tax credit to all mineral processing for secondary batteries. This may now also include certain investments in EV and hydrogen technology and infrastructure.

The scope is now to include five future mobility technologies and three facility types, including EV production facilities, as well as EV charging technology and facilities. A further five hydrogen technologies and facilities are also poised to be included.

The country previously raised the investment tax credit rate from 8pc to 15pc for larger companies and 16pc to 25pc for small- and medium-size firms to stimulate domestic investments in national strategic technology. A temporary 10pc of additional investment tax credit for incremental investment expenditure in 2023 was also offered, according to a Korean tax update published by PricewaterhouseCoopers in April. This brings the potential investment tax credit for investments in national strategic technology up to 25pc for larger firms and up to 35pc for small- and medium-size firms.

This proposed amendment is scheduled to be implemented in early June, according to the announcement, but it will likely depend on the progress of the required legislative procedures.

The government more recently announced its plan to quadruple domestic production capacity of secondary battery cathode material from 380,000t to 1.58mn t, as well as to invest 20 trillion won ($15bn) by 2030 to commercialise solid-state batteries.

Global EV sales are forecast by Argus to grow to more than 40mn units/yr by 2030, which will drive up lithium demand. Argus forecasts global lithium consumption to be 2.78mn t/yr by 2030, which will outstrip total lithium supplies from expected capacity and recycling by almost 530,000t.

Multiple support measures and initiatives have been pushed out by South Korea's government in a bid to advance its domestic EV and battery industries, with a public-private joint strategy announced on 7 April and multiple new budgets announced in February.

The Korea Automobile Industry Association called for greater government support in March, asking for "ground-breaking investment support measures" in the face of trade protectionism to support the domestic EV industry.

The country in March imported 4,490t of lithium carbonate, down by 6.3pc from a year earlier. But its imports of lithium hydroxide more than doubled to 11,905t.

By Joseph Ho

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27/11/24

Australia's BOM forecasts severe cyclone season

Sydney, 27 November (Argus) — Australia's Bureau of Meteorology (BOM) expects the country to experience 11 tropical storms over the next few months, threatening the country's mineral-rich Pilbara region and coal infrastructure in Queensland. The number of storms is in line with historical averages, but BOM warns that rising ocean temperatures could increase their severity. The state weather agency believes that four of these storms will make landfall from late December, and that a La Nina event could start later this year, although it may not last very long. La Nina events are associated with high levels of cyclonic activity. BOM's forecasts suggest that five of the storms are likely to form around Western Australia's mineral-rich Pilbara region, which houses more than 40 operating iron ore mines and two lithium mines. Over the last three months, sea surface temperatures around Pilbara have exceeded historical averages by 1.2–2°C, warming more than in any of the country's other cyclone-prone regions. On the other side of the country, four tropical storms could form around Queensland's cattle and coking coal producing regions, although these are likely to be less severe than the Pilbara storms. Temperatures across most of Queensland are forecast to exceed historical averages by 0.4–1.2°C in October-December. Cyclonic weather in Pilbara could disrupt iron shipping and mining activity in the region. Australia's three largest iron export ports sit along the region's coast. In 2019, Cyclone Veronica forced the closure of Pilbara's three major ports and multiple mines operated by mining company Rio Tinto, prompting the firm to cut its production forecasts for the year. Harsh storms in Queensland have previously damaged vital coal transport links in the state, hampering exports. In 2017, Cyclone Debbie damaged rail lines linking coal mines to the ports of Gladstone, Hay Point, Dalrymple Bay, and Abbott Point, which handle most of the state's coking coal exports. More recently, severe weather also halted deliveries to Mackay port . Queensland and Pilbara are also home to major LNG terminals at Dampier and Gladstone ports that sit within cyclone-prone zones. The two terminals together export over 3mn t/month of LNG . By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Q&A: Boston Metal Brazil’s sales to start in early 2025

26/11/24

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26/11/24

Q&A: Boston Metal Brazil’s sales to start in early 2025

Sao Paulo, 26 November (Argus) — Metals technology company Boston Metal expects to start commercialisation in Brazil in early 2025. The company, which has developed molten oxide electrolysis (MOE) technology to improve metals extractions, initially will focus on extracting so-called "high-value" metals from tin slags at its plant in Minas Gerais state. The move is part of the company's effort to offer greener metals to the market and comes at the time when the company is developing MOE technology in the US to produce green steel. Metals reporter Carolina Pulice talked with Boston Metal's Brazil commercial director Gustavo Macedo about MOE technology and the company's plans for the future. The interview has been translated from Portuguese. Can you explain what MOE technology is? MOE technology was developed at the Massachusetts Institute of Technology in the 1980s. It uses the electrolysis process on metals, a process that has been known for a long time. What is different about MOE is that its platform can be used to separate an infinite number of metals. Our company started to use MOE technology in iron ore to make it greener. After it has gone through the electrolysis process, iron is practically pure and releases only oxygen and then [you have] green steel. The great advantage of this process on iron ore is that you can use the metal with any grade, different from the hydrogen route that demands high contents of iron ore. And what will the operation in Brazil be like? Our focus in Brazil is to extract three metals from local tin slags — tantalum, niobium and tin — from our plant in Minas Gerais state. It is a rich region and has plenty of cassiterite, with a lot of mining waste available. At our new plant in Minas Gerais, we will start producing ferro-tin and a ferro-tantalum niobium alloy. We are already operating our pilot and demonstration plants. We plan the first commercialisation at the beginning of 2025. Our main market is likely to be China, where we will export our material to be used in the electronics industry. The move comes at a time when more consumers are demanding greener supply chains. And this is an advantage for us because Minas Gerais state can already secure 100pc renewable electric energy. The global tantalum chain is very complex because more than half of this metal comes from conflict regions in Africa. Can you tell us a bit more about Boston Metal's operations in the US? Our goal there is to develop MOE technology for the production of green steel. Steelmakers would add this process to their operations by replacing their blast furnaces with MOE technology, allowing them to produce pure iron by utilising electricity instead of coking coal. Our headquarters in the US is already at the stage where they are building our first demonstration plant. MOE technology at present demands 4MWh of energy per tonne of steel. Electric arc furnaces that process scrap currently have consumption of 0.5-0.8MWh/t. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Uruguay's left-wing candidate wins presidency

25/11/24

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25/11/24

Uruguay's left-wing candidate wins presidency

Montevideo, 25 November (Argus) — The left-wing opposition Frente Amplio will return to power in Uruguay after winning a hard-fought run-off election on 24 November. Yamandu Orsi, former mayor of the Canalones department, was elected president with close to 51pc of valid votes. He defeated Alvaro Delgado, of the ruling Partido Nacional. The Frente will control the senate, but will have a minority in the lower chamber. It last governed from 2015-2020. Orsi will take office on 1 March in one of Latin America's most stable economies, with the World Bank forecasting growth at 3.2pc for this year, much higher than the 1.9pc regional average. He will also inherit a country that has been making strides to implement a second energy transition geared toward continued decarbonization and new technologies, such as SAF and low-carbon hydrogen. He will also have to decide on future oil and natural gas exploration. Uruguay does not produce oil or gas, but has hopes that its offshore mimics that of Nambia, because of similar geology. TotalEnergies has made a major find there. The Frente's government plan states that it "will deepen the energy transition, focusing on the use of renewable energy, and decarbonization of the economy and transportation … gradually regulating so that public and cargo transportation can operate with hydrogen." On to hydrogen Uruguay is already the regional leader with renewable energy, with renewables covering 100pc of power demand on 24 November, according to the state-run power company, UTE. Wind accounted for 49pc, hydro 35pc, biomass 10pc and solar 6pc. Orsi will need to make decisions regarding high-profile projects for low-carbon hydrogen, as well as a push by the state-run Ancap to get private companies to ramp up oil and gas exploration on seven offshore blocks. The industry, energy and mining ministry lists four planned low-carbon hydrogen projects, including one between Chile's HIF and Ancap subsidiary Alur that would have a 1GW electrolyzer. Germany's Enertrag is working on an e-methanol project with a 150MW electrolyzer, while two Uruguayan groups are working on small projects with 2MW and 5MW electrolyzers, respectively. The Orsi government will also need to decide if it continues with Ancap's planned bidding process for four offshore blocks, each between 600-800km² (232-309 mi²), to generate up to 3.2GW of wind power to produce 200,000 t/yr of green hydrogen on floating platforms. The Frente has been noncommittal about the future of seven offshore oil and gas blocks, including three held by Shell, two by the UK's Challenger — which recently farmed in Chevron — and one each by Argentina's state-owned YPF and US-based APA Corporation. The Frente's government plan states that "a national dialogue will be called to analyze the impacts and alternatives to exploration and extraction of fossil fuels." By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Clean NH3 integration needs CoC methods: Hinicio

25/11/24

News

25/11/24

Clean NH3 integration needs CoC methods: Hinicio

London, 25 November (Argus) — Some ammonia producers are implementing their own chain of custody (CoC) approaches in order to incorporate upcoming reduced carbon tonnes into existing ammonia supply chains, ahead of unified regulation, certification or wide-scale clean ammonia availability. But approaches will vary, depending on whether producers are targeting regulatory or voluntary markets, Belgian-headquartered consulting firm Hinicio told Argus ahead of the Clean Ammonia Europe Conference in Rotterdam this month. Hinicio is consulting on three different ammonia certification schemes currently under development. The schemes are being developed in partnership with Fertilizers Europe, the Fertilizer Institute in the US and the Ammonia Energy Association, which is developing a global scheme. The schemes have a mix of both mass balance or book and claim CoC methods, as producers and buyers seek to optimise on cost and carbon intensity (CI) when clean ammonia tonnes become available. Clean ammonia includes renewable ammonia produced with electrolysis and renewable electricity, or ammonia produced with a natural gas feedstock that uses carbon capture and storage (CCS) to reduce carbon emissions. The mass balance approach is well established in other values chains and has been set forth by the EU as the regulatory standard in the Renewable Energy Directive, FuelEU Maritime and the Gas Directive. And the CoC method has already been adopted by ammonia producers such as Yara and OCI. In a mass balance approach, the ratio of sustainable material incorporated into the value chain is tracked and reflected in the products produced and sold to customers. Physical trade flow is accounted for and a defined time (reconciliation) period is assigned. "When talking about chain of custody, the European regulation really dictates to use mass balance for everything you want to call RFNBO or low-carbon in Europe, or for anything that you want to bring to Europe," Hinicio manager Thomas Winkel said. But a ‘book-and-claim' system grants significantly more flexibility for economic operators that are looking to trade in voluntary markets — where companies buying reduced carbon ammonia are looking to reduce scope 3 emissions or EU ETS obligations. Book and claim allows for physical flow of a product to be completely decoupled from attributes like CI. Characteristics are ‘booked' into a central registry to be ‘claimed' by consumers, without a connection to the physical material, like renewable electricity certificates. "The voluntary market is going towards a combination of mass balance and book and claim," Winkel said. Elements of book and claim can be employed if required, within geographic or other constrictions. But Europe's stance on CoC could force companies to employ mass balancing. "I think many players around the world are looking at Europe as their main export market and they are starting to understand their criteria well," Winkel said. Europe currently accounts for around one-fifth of global ammonia imports, or around 4mn-5mn t/yr, according to Argus line-up data. And at least a quarter of the 40-plus offtake agreements Argus is tracking from clean ammonia projects are likely to supply the European market. Renewable ammonia projects in India and Canada have received pre-certification of RFNBO compliance from certification body Certifhy, with European offtakers already lined up. Under currently announced agreements alone, at least 500,000t of renewable ammonia will be shipping to Europe from 2027, pending project delivery, with the potential for a substantial scale-up in volume as the decade draws to a close. That is excluding large-scale ammonia projects with CCS that are scheduled for start-up in the US in 2025-26 and are also eyeing the European market for export opportunities. "Mass balance is the standard — the schemes that are being developed that are for voluntary purposes allow a bit more flexibility otherwise," Winkle said. For most jurisdictions, the regulatory playbook is still being written. Australia, Japan, South Korea, the US and the UK are still developing regulations surrounding low-carbon fuels. But in the meantime, fledgling supply agreements for voluntary markets may opt for book and claim where possible. But regulatory markets in Europe have declared mass balance as the standard. The development of regulatory and certification schemes in other regions will determine global standards moving forward. By Lizzy Lancaster Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US’ Peabody to buy Anglo’s Australian met coal assets

25/11/24

News

25/11/24

US’ Peabody to buy Anglo’s Australian met coal assets

Singapore, 25 November (Argus) — US coal producer Peabody Energy has agreed to acquire the bulk of coking coal assets that UK-South African mining firm Anglo American is seeking to divest as it exits the coal sector. Peabody plans to buy Anglo's majority stakes, at up to $3.8bn, in four metallurgical coal mines — Moranbah North, Grosvenor, Aquila and Capcoal — located in Australia's Bowen Basin, with the transaction expected to close by mid-2025 and subject to customary closing conditions, the producer said in a statement. With the acquisition of coal mines, Peabody's combined US-Australia production will rise from 10.6mn short tons/yr at present, to an estimate of 11.3mn st/yr (10.25mn t) by 2026, according to Peabody, strengthening the producer's position in the premium hard coking coal (PHCC) market. Moranbah North, Grosvenor and Aquila are PHCC mines, while Capcoal produces a combination of PHCC, pulverised coal injection (PCI) and other coal grades. At present, Australian low volatile hard coking coal, or tier-2 coking coal, accounts for 55pc of Peabody's 7.4mn st in coking coal sales, but the acquisition of new assets will bring PHCC's share up to 51pc and reduce its tier 2 coal to 24pc. Peabody also produces high volatile A coal in the US, accounting for 12pc of sales this year. In addition to the sale of assets to Peabody, Anglo has agreed to sell the Dawson mine in Central Queensland to Indonesian mining company PT Bukit Makmur Mandiri Utama (BUMA) for $455mn. Earlier this month, Anglo agreed the sale of its 33pc share of the Jellinbah Group coking coal joint venture to partner Australia-based Zashvin at $A1.6bn ($1.04bn). In May, Anglo announced plans to exit its coal, platinum, nickel and diamond businesses shortly after rejecting repeated takeover bids from Australian resources firm BHP. These deals come against a backdrop of a challenging price environment for steel making and subsequent weakness in coking coal prices, implying tight margins for coal producers. After reaching a high of $336.50/t fob Australia, the premium low volatile coking coal fell steadily throughout this year to reach $176.50/t in September, before recovering to remain in the $201-208/t range for most of November. In addition to a less than friendly investment climate for coal projects, Australia's Queensland state and New South Wales (NSW) state governments increased royalties on coal sales in 2023 and 2024 respectively, putting further strain on Australian miners already facing inflationary pressure from wages, equipment and fuel costs. Lower coking coal prices this year have translated to reduced royalty payments, but have yet to stem the tide of consolidations and asset sales as mining companies exit the sector. In August, Australia-based diversified metals producer South32 completed the sale of its Illawarra coking coal operations in NSW to an entity owned by Singapore-based Golden Energy and Resources (Gear) and Australia's M Resources for $1.65bn. In the US, rising mining costs and weak seaborne prices for most of this year led to the closure of smaller high-cost operations and mergers such as that of Arch Resources and Consol Energy to form Core Natural Resources , expected to close by the first quarter of 2025. In July, trading firm Glencore completed its acquisition of a majority stake in Elk Valley Resources, the coking coal division of Canadian mining firm Teck Resources, growing the former's thermal and coking coal production to 130mn t/yr. By Siew Hua Seah Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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