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Investing Guides
Nova High Grade Gold Target Reached
October 15, 2024
Kaiser Reef Limited ("Kaiser" or "the Company") is pleased to announce that the decline at the high-grade A1 Gold Mine has successfully reached the Nova Zone at the extremities of the historic mining. This marks a milestone for Kaiser, signalling a new chapter in the Company’s operations with miners having focused on extracting “remnant” ore for the past 30 years.
The A1 Gold Mine, has operated almost continuously since 1861, and historically produced approximately 800 ounces of gold per vertical metre, with some levels exceeding 1,000 ounces per vertical metre, a benchmark for significant gold mines. Most of the ore was exploited in the first 100 year mining phase. Modern remnant mining over the past 30 years however has been limited to producing less than 237 ounces per vertical metre.
Kaiser has now reached a critical target, termed the "Nova Zone," which has never been mined before:
✓ Reached new previously unmined levels
✓ The best ore is now in-situ and not historically exploited
✓ Facilitates modern mine planning for increased production
✓ Power Systems Upgraded
✓ Ventilation Works Upgraded/Ongoing
✓ Mineralisation Open at Depth
✓ Diamond Drilling Imminent
Significant capital expenditure, estimated at over $24 million, including supporting infrastructure, has been invested to reach these new levels. The transition to mining the primary ore, with the best material not having been previously mined, and access to the potentially substantially higher “ounces per vertical meter” enjoyed historically is a major achievement (Figure 1 and 2). Additionally, substantial upgrades to the infrastructure— including enhanced ventilation and high-voltage power systems—have been implemented to support the development work at the mine
Click here for the full ASX Release
This article includes content from Kaiser Reef, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
KAU:AU
2h
Massive Antimony Sulphide Stibnite Confirmed
Bindi Metals Limited (ASX: BIM, “Bindi” or the “Company”) is pleased to announce an exploration update on the recently acquired Mutnica and Lisa Antimony Projects in Serbia.
Mutnica Antimony-Copper Project:
- Fieldwork commenced successfully locating antimony occurrences at the Kreva Prospect
- 5m wide zone of outcropping variable stibnite-arsenopyrite veins observed at Kreva, including a zone of 5-20% massive antimony stibnite minerals
- Surface rock chip and 2023 soil samples submitted to assay antimony and associated metals
Lisa Antimony-Gold Project:
- Engagement of legal team to facilitate fast tracking of licence grant
Figure 1 Photographs of recent Bindi samples at Kreva 1 (left) Sample DM014022 displaying 5-20% massive stibnite (antimony sulphide mineral; st); (right) Sample DM014024 displaying 1-2% disseminated stibnite (st)
NB: Visual estimates of mineral abundance should never be considered a proxy or substitute for laboratory analyses where concentrations or grades are the factor of principal economic interest. Visual estimates also potentially provide no information regarding impurities or deleterious physical properties relevant to valuations
Bindi Metals Director, Eddie King said:
“We are pleased to have hit the ground running confirming impressive antimony potential at Mutnica and to continue the work Apollo Minerals started on an interesting copper target. In addition, we have formally engaged with in-country advisors to facilitate granting of the Lisa Antimony-Gold Project which was the focus on the transaction with Apollo and considered our key focus in Serbia.”
Mutnica Antimony-Copper Project Update
A team of local Serbian geologists as well as Bindi’s Australian geologist team are undertaking a field campaign around the historical antimony occurrences at Kreva and regional prospecting on the Mutnica licence. The aim of the work was to relocate the historical antimony occurrences that were reported in 2014 (see ASX BIM announcement dated 19 September 2024) and assess the economic significance of these outcrops. Priority samples have been sent to the SGS laboratory in Bor for rush assay on antimony, multi-element and gold assay.
The results of this fieldwork are highly encouraging and the historical Kreva 1 antimony occurrence was successfully located. The area is characterised by intermittent outcrop of vuggy quartz breccia with visible variable 1-5% stibnite (antimony sulphide) together with arsenopyrite (1%) in places. The outcropping zone appears to be approximately 5m wide in thickness but evidence for further antimony sulphide was exposed over a 50m strike zone of intermittent outcrop and open undercover with a dominant northwest to north strike. A standout outcrop was observed in what appears to be a core area of massive stibnite where 5-20% stibnite was observed (Figure 1).
Click here for the full ASX Release
This article includes content from Bindi Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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13h
India ‘our most consequential energy relationship’: Geoffrey Pyatt
Assistant secretary at the US Department of State, Geoffrey Pyatt has signalled growing recognition of the need for urgency in busting through “regulatory and policy impediments on both sides” of the country’s nascent energy alliance with India – “overall … our most consequential energy relationship in the world” – as it seeks to counter China’s global strategic minerals dominance.
Indicating it’s “going to take … senior level government direction” to help speed the mobilisation of private capital to create and scale strategic mineral value chains in India and the US, Pyatt said India’s recent decision to join the Mineral Security Partnership (MSP), its Quadrilateral Security Dialogue (QUAD) connection and the longer-standing United States – India Initiative on Critical and Emerging Technology (iCET) pact were all means to enabling vital high-level “critical minerals … policy conversation, but [also] practical collaboration”.
“The whole idea behind the iCET framework was to create an initiative led from the White House and the [Indian] prime minister’s office … which would drive our bureaucracy and help to identify the regulatory and policy impediments on both sides,” Pyatt said on a webcast hosted by the Washington, DC-based Centre for Strategic and International Studies (CSIS).
“In the US-India context both bureaucracies often compete with each other to see who can be more difficult sometimes in dealing with these issues.
“But what’s happened now is you have a directive from the prime minister [India’s Narendra Modi], from [US] president Biden, driven by the two national security advisors, basically saying to the rest of us in the bureaucracy, you guys figure this out, because it’s really, really important to our national security interests.
“Everybody knows we’ve got to make permitting happen faster and we have to generate significantly increased volumes of these materials. The option of saying we’re just going to leave it in the ground really isn’t there anymore.
“We have to figure out how to do this in a way that’s sustainable, that meets the test of our democracies, but also delivers the outputs that we need in order to escape this dependency on China.”
Pyatt pointed to the example of QUAD country companies Lynas Rare Earths of Australia and Japan’s JOGMEC of what could be achieved in the strategically important rare earths business, where Chinese state-backed enterprises control about 90% of global RE processing.
“The fundamental issue is the concentration of processing,” Pyatt said.
“This is where we see a much greater role that India could play … because many of these rare earths are both energy minerals, which is what I’m responsible for, but also products with extensive defence applications.
“We’ve got to think about cobalt, lithium, nickel, zinc, copper [and] rare earths the same way we thought about crude oil and gas as being an essential attribute of US national security, where we need to ensure that we are not vulnerable to the instrumentalisation of those resources by our adversaries.
“That’s what MSP is all about. That’s why the partnership with India on these issues is so fundamental.
“You can look at the example with Lynas in Australia and the investments made by JOGMEC ... It took the kind of patient capital that JOGMEC brought to the table to help Lynas work its way through the valley of death in the investment cycle.
“We need to figure out how to crack that problem in the US-India context.
“I can’t tell you who’s going to be the company that’s going to figure out how to scale rare earths processing in India but in an environment … where we are very much behind the eight ball, with the concentration of processing capacity in China, it’s going to take … senior level government direction to make it happen.
“Most importantly, how do we lay track for our companies?
“Everything that I work on in ENR [Bureau of Energy Resources] is going to be driven by the private sector, or it’s not going to go.
“All of our countries depend on the market driven decisions that our companies are going to make in terms of allocating capital and then mobilising our private sectors to deliver a value proposition for their shareholders, but also to advance our national security interests.
“What we’ve tried to do as the US government, and especially my team at ENR, is provide an enabling environment for that private sector led investment and private sector led growth.”
Pyatt’s long government career included a stint at the US embassy in New Delhi when bilateral trade between the two countries was, according to former ambassador Robert Blackwell, as “flat as a chapati”.
“It’s really exciting to see how it’s all puffed up now like a big poori,” Pyatt said.
“One of the largest line items in that overall bilateral trade relationship is energy products.
“That says a lot about both the huge energy demand that is expanding very, very quickly in India, but also the leadership shown by American companies.
“You have Indian firms making significant investments here in the United States in the energy transition, critical minerals [and] battery space, [which] is a really revealing indicator of how this conversation is changing. We see India not just as a partner in terms of what it's doing at home, but also as a country that is ideally suited to partner with the United States globally, as we seek to grow those supply chains.
“I was saying to one of my State Department bosses the other day that any time I get challenged by the bureaucratic impediments that we manage to place on the US-India relationship, both in Washington and Delhi, the cure for that is to go out to the states and see how fast things are happening [in] ... Mumbai, Hyderabad, Chennai, Bangalore, Ahmedabad.
“The thing that has changed most about India [in the past 15-to-20 years] is the rise of global Indian companies [such as] Tata, Reliance, Adani, who are present across the developing world, who behave just like American multinationals and are fantastic partners for US companies looking to achieve that kind of supply chain diversification.
“What's really interesting is so many of these Indian companies … weren't even on the map when I was living in Delhi [up to 2007] and are now worth billions of dollars. Almost all of these companies have a CEO who went to school in the United States, who has an MBA from Wharton or Stanford or went to MIT, then went home to grow their business.
“There’s a fundamental alignment between our countries, which means I do not see a likely scenario where Indian companies are head-to-head competitors with Americans; much more likely as they are going to be collaborators.”
US investment bank Morgan Stanley says power demand in India that has been growing at circa-5% compound annual growth rate (CAGR) over the past two decades could now be growing at c8%pa and “is set to remain strong over the next decade or so”.
“Importantly, generation companies have seen significant government support in terms of policy making and ease of doing business, with commodity price pass through featuring in contracts allowing risk mitigation for generators,” bank analysts said on the bank of an India tour last month.
“For power generation growth targets there has been a strong tilt towards renewables.
“Though thermal power demand is set to stay robust there is more focus on renewables, supported by the government’s decarbonisation goals.
“From our feedback India’s share of renewables should increase from 43% in FY24 to 65% in FY32. As such, renewables feature in growth plans for key construction-led sectors, with some players targeting more than 50% of power needs to be met by green energy by the end of this decade.”
Morgan Stanley said India’s nuclear power demand could grow from c8GW to c20GW by 2032.
Meanwhile, the country’s target of reaching 300 million tonnes per annum of steel production capacity by 2030 “is both achievable and sensible given current rates of growth being experienced in the nation”.
“India aluminium demand is expected to remain strong at high single digits, driving demand at about 9Mt by 2033 versus c4.5Mt currently, based on our feedback,” the bank said.
“India has built about 100,000km of roads in the past 10 years and the government is targeting another c100,000km of highways to be constructed within the next 6-7 years.
“We understand that the government policies are now much more supportive for private players' participation, including risk mitigation measures built into the contracts.
“Feedback suggests port capacity could move from c2600Mtpa now to c10,000Mtpa by 2047.
“Though small, our feedback suggests focus remains on privatising port capacity in the country: 500Mtpa done [so far]; another 500Mtpa expected over the next decade.”
Hear more from
Geoffrey Pyatt
Assistant Secretary of State for Energy Resources
US Department of State
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13h
Achilles Launches MyAchilles App for Mining Suppliers
We are excited to share the latest news from Achilles with you. Today, we announced the launch of our new MyAchilles App, a powerful tool designed to help mining suppliers manage sustainability and compliance with greater ease and efficiency.
The MyAchilles App offers suppliers mobile access to their Achilles Sustainability Scores and key performance insights, empowering them to stay ahead of evolving sustainability standards while managing their profiles on the go. This innovative app provides real-time notifications, performance updates, and access to important documents and certificates, all from a mobile device.
In addition, more advanced features such as audit reports and improvement actions will be rolled out in the coming months to further support suppliers in managing compliance and driving improvements. You can find the full press release attached for more detailed information.
If you have any questions or would like to arrange an interview with a spokesperson from Achilles, please don't hesitate to reach out: arya.nair@achilles.com
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13h
Materials ‘green’ premia: Trends and outlook to 2030
‘By 2030 the buyers we surveyed expect demand for green materials to increase by 1.7-to-4.5-times current levels’
Christian Hoffmann, Michel Van Hoey and Oleksandr Kravchenko*
The supply of green commodities, as well as demand for them, has been growing significantly over recent years, although volumes of these premium-priced materials remain limited. Numerous producers of metals, plastics, glass, and other materials have launched low CO2 or recovered and recycled offerings for which they have been charging “green premia”.
In addition, information providers such as S&P Global Platts and Fastmarkets MB have defined criteria for green materials and introduced indexes that track green premia across various commodities. Long-term offtake contracts for green materials are also starting to emerge.
However, this growth has been facing headwinds since the second half of 2021. An uncertain macroeconomic outlook, high energy costs and interest rates and declining carbon costs, among other factors, have spurred fears of slowing demand for green materials and delays in decarbonisation projects.
What impact will these potential shifts have on green premia?
To answer this question we surveyed more than 100 buyers and suppliers of seven materials – steel, aluminium, copper, nickel, lithium, plastics, and glass – from around the world. Their responses suggest that despite the challenges the green momentum remains strong across commodities and regions.
Respondents report strong recent demand and premia for green materials
More than 90% of respondents, both buyers and sellers, report stable or growing demand for green materials over the past 12 months, with results largely consistent across regions and materials categories. More than 80% of respondents also observe stable or even increased green premia over that time.
By 2030, demand for green materials could increase by up to 4.5 times
While the volume of green commodities remains relatively small survey respondents have embraced sustainable offerings. The current share of green materials in respondents’ purchases ranges from 9% and 12% for battery-grade lithium and nickel, respectively, to 23% for plastics.
By 2030 the buyers we surveyed expect their demand for green materials to increase by between 1.7 and 4.5-times current levels, depending on the commodity, suggesting that they remain committed to decarbonisation in the medium to long term. This projected increase is fuelled by companies’ commitments to reducing Scope 3 emissions as well as rising demand from their end users. As a result we expect green materials’ share of total purchases to range from approximately one-quarter for copper to more than 40% for steel, plastics, and battery materials. Buyers in the automotive, construction, energy equipment, and consumer-packaged-goods (CPG) sectors account for the bulk of these increases.
Definitions of green materials are expected to become more stringent
In addition to higher future demand our survey suggests that definitions of what constitutes “green” offerings will become more stringent for all seven materials. By 2030, 57% of respondents expect to include suppliers’ Scope 3 emissions in their criteria for green materials, up from 48% today. The definitions of low-carbon footprint are also likely to change. For example, almost half of the steel producers and buyers we surveyed expect the definition to require less than 0.3 tonnes1 of total CO2 emissions per tonne of steel by 2030, up from 16% who view that as the criterion today. For aluminium, 29% expect less than 0.5t of total CO2 emissions per tonne of aluminium to qualify as green by 2030, up from 12% currently.
Green premia vary widely between sectors and regions
The majority of the buyers we surveyed are currently paying premia for green materials. However, there is high variation in the levels of the premia they report. These disparities may be because of limited information and benchmark data on green commodity prices that can guide buyer expectations and different levels of willingness to pay premia among sectors and companies. On a regional level, European markets have consistently higher green premia than North American ones, but the gap is expected to narrow by 2030 for most commodities. Nevertheless, most respondents don’t anticipate significant increases in green premia in the coming years. Notably, relatively few respondents expect no premia at all in 2030.
Price elasticity varies across commodities
Nearly 60% of survey respondents say that by 2030 they would be willing to pay additional premia to secure supplies of scarce green materials. Some segments of buyers report higher readiness to pay green premia than their overall industries. For example, CPG companies are willing to pay extra for green plastics and glass, while automotive and energy equipment producers will accept higher premia for green base metals. Such variation highlights the importance of laser-sharp customer segmentation when offering green materials.
Implications for commodities suppliers
Capitalising on green materials to gain higher revenue and market share requires focused strategies, as green premia are unlikely to be effective in every market and customer segment. Materials suppliers should develop their approaches from demand backward across four dimensions:
- Re-evaluate the business case for decarbonisation and its pace. This should include an assessment of the need for subsidies and external financing, as premia may not be enough to cover the high capital and operating costs associated with decarbonisation.
- Prioritise market segments and individual customers with the highest unmet demand, willingness to pay, and interest in offtake contracts, and address the demand in these segments with tailored offerings.
- Increase the transparency of operations and supply chains to prove the sustainability of your offerings by, for example, tracking and verifying emissions at a granular level, including Scope 3. Such a forward-looking approach can prepare you for potential future regulatory requirements.
- Secure the raw materials and energy supplies early to meet your decarbonisation goals as these supplies may become scarce. To do so producers should develop and implement sourcing strategies for sustainable raw materials, energy, and technology.
Our experience suggests that sustainability remains a business imperative and should be a C-suite priority for materials producers and customers alike.
The new survey supports this view.
Despite macroeconomic headwinds, buyers’ demand for green materials is steady or growing, as is their willingness to pay premia to secure those commodities. However, producers should prepare for a likely tightening of standards in the definitions of green materials. Collaboration across value chains will be essential to ensure that businesses are both environmentally and economically sustainable.
*Christian Hoffmann is a partner in McKinsey’s Dusseldorf office; Michel Van Hoey is senior partner in Luxembourg; and Oleksandr Kravchenko is managing partner in Kyiv.
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13h
Australia ‘a very important partner for us’: Bernhard Kluttig
‘Australia has significant deposits of raw materials which Germany and Europe urgently need for the transformation of our economies’
Bernhard Kluttig, director-general for industrial policy at Germany’s Ministry for Economic Affairs and Climate Action, is coming to IMARC 2024 and will speak on the development of closer economic ties with Australia and rising demand in Europe for the country’s critical minerals and energy.
Mining Beacon editor Richard Roberts caught up with him ahead of his arrival in Australia.
Richard Roberts: How many times to Australia/IMARC?
Bernhard Kluttig: This is my first visit to Australia. Australia is a beautiful country with unique nature and culture. I don't have time to see more of the continent this time, but I will definitely come back for some sightseeing.
IMARC is an excellent opportunity for me to learn about the latest developments in the mining and resources industry and to make valuable contacts. I am looking forward to the conference, to meeting the Australian government and companies, and to the German afternoon organised by our Competence Centre for Mining & Resources (CCMR) at the German-Australian Chamber of Industry and Commerce in Sydney.
Richard Roberts: What are your primary aims while here for IMARC/at the show?
Bernhard Kluttig: My goal is to facilitate dialogue and cooperation that will lead to mutual growth and success in both countries. At IMARC, I will engage in meaningful discussions with different stakeholders: government officials, industry representatives as well as with NGOs.
I'm interested in identifying potential synergies between Australian and German resource policies. By investigating these links we can identify opportunities for cooperation that could benefit both countries when it comes to the resources sector.
Moreover, I want to identify areas where we can better support each other and foster stronger partnerships. Understanding the dynamics between the Australian government and business is crucial, as it can provide insights into how policy is shaped and implemented and how we can benefit from and collaborate with each other.
Richard Roberts: What are your impressions of Australia’s mining industry?
Bernhard Kluttig: Australia's mining industry is indeed impressive and plays a central role in the global supply of resources. Australia is known for a large variety of mining projects, ranging from traditional metals such as gold, iron, bauxite to the critical minerals such as lithium, nickel and graphite. This demonstrates the sector's diversity and ability to adapt to the changing needs of industry.
Mining is not only an important part of the Australian economy, providing jobs and contributing significantly to the country's export balance. It also attracts significant investment and supports numerous supply and service companies. The industry is at the forefront of introducing new technologies and innovative practices to increase efficiency and improve environmental performance. In that case, German companies play an important role as system suppliers in the mining and extractive industries. There are more than 150 German companies active in the Australian Mining industry, ranging from large industry giants like Siemens, Bosch or BASF down to small and medium specialised providers of technology. The German-Australian Chamber of Industry & Commerce regularly receives enquiries from German mining suppliers looking to enter the Australian market. Some of these newcomers and "old hands" are exhibiting at this year's IMARC German Pavilion including:
- Bind-X GmbH: A Munich-based biotech company with pioneering solutions for dust control in the mining industry.
- Herrenknecht: Germany's Mittelstand hero supplies drilling/boring equipment crucial to the Australian mining industry.
- Dräger: Well-known in the Australian mining industry, improving health and safety products such as underground refuge chambers.
All these German companies continuously develop new and high-quality and environmental-friendly technologies. Therefore, they can assist in modernising sectors and/or building sustainable ways for production processes.
Richard Roberts: The German-Australian Critical Minerals Alliance was formed in 2022. How important is this alliance?
Bernhard Kluttig: Germany and Australia share close friendship and excellent bilateral economic relations.
Germany is Australia’s largest trading partner among the EU Member States. Bilateral trade between our two countries has been growing steadily over the last few years. In 2023, it was around €17 billion. Germany currently exports more goods to Australia but in the future the Australian economy will benefit from the export of raw materials to Germany through growing cooperation in critical raw materials.
We are united by common values and the commitment to multilateralism, and international cooperation. Especially the current geopolitical situation shows us how important it is to stand up for the same values.
In January 2023, the German Federal Government renewed its policy guidelines for critical raw materials. We want to diversify our economic relations in order to reduce dependencies on individual markets, sources of supply and suppliers.
Australia is a very important partner for us when it comes to diversifying external and trade relations and intensifying cooperation.
German companies are interested in Australia’s raw materials and need help to connect with Australian companies. The German-Australian Critical Minerals Alliance is therefore an important platform that facilitates exchange between German and Australian critical minerals stakeholders. Their engagement has enabled cooperation between companies in both countries.
For example, Siemens Gamesa Renewable Energy A/S has signed an offtake agreement with Arafura Rare Earths Ltd in 2023. For this project, the German government has issued a conditional approval for up to US$115 million in Untied Loan Guarantees over a 10-year tenor. These are excellent steps for a good future cooperation. I hope that the subsequent exchange will help to launch new cooperation projects between our companies. And this will also help to accelerate the green and digital transitions.
Richard Roberts: What would you say have been the most significant milestones to date and how do they affect Germany’s economic/industry goals?
Bernhard Kluttig: Australia has significant deposits of raw materials which Germany and Europe urgently need for the transformation of our economies and to achieve our climate targets. One of the milestones we therefore concluded together is a Joint Declaration of Intent in 2023 on the potential to create value in the field of critical raw materials. Together, we commissioned a study to identify ways to strengthen supply chains between our two countries.
The aim of this milestone is to provide even more support to companies in diversifying their supply of raw materials. The results will help companies gain a better understanding of the opportunities and barriers of critical minerals supply chains in both countries, each other's needs and demands as well as conditions and requirements.
The interim results of the study set an optimistic tune on the future of our companies' cooperation. Those results already prove a great potential for developing industry projects in the whole raw material chain: from mining over processing up to recycling and circular economy aspects. We expect the final study to be published in the middle of next year.
Richard Roberts: What does Germany’s critical minerals demand profile look like over the next years?
Bernhard Kluttig: German demand for critical raw materials will increase in the coming years. The level of demand will depend in particular on how quickly the transformation of our industry and the expansion of renewable energy technologies will be implemented in Germany. Technologies such as e-mobility (eg lithium, nickel, cobalt, graphite), wind power plants (primarily rare earth elements), photovoltaics (eg silicium, silver) and hydrogen technologies (eg iridium, scandium, titanium) will play important roles. In addition, the expansion of power grids in connection with the energy transition will increase demand for copper and aluminium.
According to German Resource Agency (DERA) calculations, planned net expansion of wind power plants in Germany from 2021 to 2030 (82GW in total) will require 5500 tonnes of rare earth elements. It should be noted that Germany currently imports semi-finished products as well as final products and components, which means that raw material demand arises also indirectly.
Richard Roberts: What will be the key drivers for the demand of critical minerals?
Bernhard Kluttig: The International Energy Agency (IEA) estimates that the demand for critical resources needed to achieve the goals of the Paris Agreement could increase by a factor of seven between 2020 and 2040 for rare earths and by a factor of 42 for lithium (IEA 2021). DERA makes similar predictions for the increase in global resource extraction. Depending on the scenario, up to six times more lithium will be needed compared to today's global production (DERA 2021).
The specific demand will largely depend on technological progress and the development of demand for the products in which the critical raw materials are used. I assume that the expansion of e-mobility, renewable energies such as wind turbines and solar panels, transformation technologies in industry and use in the defence industry will play a key role here.
Richard Roberts: How will sourcing evolve over that time horizon?
Bernhard Kluttig: In the short term, many industries will be highly dependent on primary raw materials, which can often lead to supply uncertainties and price fluctuations.
In the medium and long term, however, an increased focus on recycling and the circular economy can help reduce this dependency. Through innovative recycling technologies and processes, valuable materials can be recovered and reused, which not only protects the environment but also increases resource security.
Richard Roberts: What are the aims of Germany’s climate protection contracts, or carbon contracts for difference (CCfDs)?
Bernhard Kluttig: In an effort to decarbonise the industrial sector, the Federal Ministry for Economic Affairs and Climate Action is planning to conclude carbon contracts for difference with large industrial carbon emitters (eg in the paper, glass, chemical and steel sectors). Carbon contracts for difference reduce price risks and help companies offset the added cost of decarbonisation, which is currently keeping them from switching to climate-friendly manufacturing methods. Carbon contracts for difference are thus an upfront financing mechanism that seeks to drive forward the establishment and operation of novel types of industrial plants in Germany. This is to help establish transformative technologies on the market much more quickly (green lead markets) and in the medium term without the need for government funding – technologies which are urgently needed for combatting the climate crisis and rejuvenating Germany’s industrial base.
The first four-month bidding process ended on July 12, 2024. The bids submitted are now being evaluated. The aim is to conclude the first climate protection contracts in fall 2024. Due to the pilot nature of the first bidding round, the total funding volume was still limited to €4 billion, with the maximum funding amount for individual projects being €1 billion. The second round was initiated on July 29, 2024, with the start of the second preparatory procedure. Companies have until September 30, 2024, to register for the second bidding process. The second bidding process is also scheduled to start this year.
Richard Roberts: How have they been received by industry?
Bernhard Kluttig: We are receiving very positive feedback. More precisely, the preliminary evaluation of the first round shows good interest from the industry. Around 20 applications were submitted with an application volume well in excess of the €4 billion advertised. These include many innovative projects with novel technologies from various sectors that will make an important contribution on the road to climate neutrality. Bids were submitted from both large-scale industry and SMEs, including many hydrogen projects.
Hear more from
Bernhard Kluttig
Director-General for Industrial Policy
Ministry for Economic Affairs and Climate Action, Germany
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13h
Hold on to your hat, and your gold: WGC’s John Reade
Metal’s long sequence of all-time highs ‘probably tells you a lot about the geopolitical landscape that we’re in at the moment’
A sure winner from the rising global geopolitical heat and massive levels of uncertainty hanging over many commodity markets? John Reade says look no further than gold.
“The fact that it’s [gold price] hit 30 new all-time highs this year probably tells you a lot about the geopolitical landscape that we’re in at the moment,” the World Gold Council’s senior market strategist said in London amid escalating alarm at metals forums about volatile economic and trade conditions.
“Gold is, at its heart, a geopolitical mineral, and essentially something you could throw into the weather forecast as a barometer of what's going on in the world.
“I guess there's three ways I'd like to think about gold and geopolitics.
“The first is a recognition that central banks have doubled the amount of gold that they’ve purchased since 2022 and I think that is as a direct consequence of the transition that we’re going through from the US being the hegemonic power towards something which will be more shared around the world with China and potentially other economies.
“That’s having major stresses … and that’s been reflected in moves by central banks who want to add gold to their reserves.”
Reade said China’s pivot from property sector economic dependence to the next big thing – which may or may not be the green energy transition – was also radiating stresses that had gold highly attractive to Chinese investors.
“That is both investors onshore but also for the money that has exited China over the last few years with high-net-worth individuals, family offices throughout Asia, buying unprecedented quantities of gold,” Reade said.
“The final thing I would say is that people often see the gold price go up after a geopolitical event.
“I’m not talking about these longer-term stresses and strains that are taking place, but a war, an invasion, an explosion somewhere: something unexpected.
“And what I would say, after having sat up through lots of crises over the decades that I've been following the gold market, is that the first reaction of the gold price is to go up. By the time most investors realise what’s going on the price has probably gone up as much as it’s going to go and over the next few weeks and months, assuming the world doesn’t end, then the gold price comes down.
“So be very careful, from a short-term tactical perspective, in jumping on gold just because bad things have happened overnight because, to be frank, you have probably missed it.
“And if the world does end you’ve probably got more important things to worry about.
“We would absolutely say that that sort of reaction justifies why gold should be in your portfolio already, because it will help you as other asset classes come under pressure from that event.
“But just be careful about climbing in [late].”
Reade suggests, with a smile, that forecasting the gold price a week, a month, or year out, is a bit like trying to predict the weather: a mug’s game.
“What I can say, in general, is a declining interest rate environment in the United States is positive for gold. It’s particularly positive for gold if those declining interest rates are associated with a recession, which they're not so far. Let's see how that one plays out,” he said.
“But in general, lower interest rates and a weaker dollar is usually good for gold. And if I look at the forecasts from macro economists out there that can give numbers, then I think most people think the dollar will probably decline five-to-10% over the next year or two, and the rates will come down quite a lot as well.
“So that should be a positive environment for gold.
“If we think about the very long term – five, 10, 20 years – work that we’ve done shows that gold should deliver US inflation plus 2-to-3%, so 2-to-3% real returns, which is interesting if you think that gold was up 15% last year, and it's up 25% plus this year.
“Again, it fits into this environment [in which] the geopolitical temperature is rising.
“[But] I wouldn’t take the sort of gains that we’ve seen over the last two years and project them forward. Gold’s done really well over the last couple of years and that sort of pace of increase is unlikely going forward.”
*John Reade, who joined the World Gold Council in 2017, will provide a valuable gold market update and insights at this year’s IMARC 2024 conference in Sydney.
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