The Financial Daily : 2020-09-25

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Friday, September 25, 2020 Tesla's Nevada lithium plan faces stark obstacles on path to production NEW YORK: Tesla Inc's TSLA. O plan to produce l it hium for electric vehicle batteries close to i ts Nevada Gigafactor­y f aces stark challenges fr om t he outset, including an onerous permitting process, uncertain access t o water and questions about unproven methodol ogies. Chie f Executive Officer Elon Musk told shareholde­rs on Tuesday Tesla has secured ri ghts to 10,000 acres i n Nevada where it aims to produce li thium from clay deposits using a process developed internally. The move would make Tesla t he fir st company i n the world to commercial­ly produce the white metal f r om c l ay. Lit hi um is pr oduc ed either f rom brine, commonly found in South America, or spodu mene hard rock, usually i n Australia. In Nevada, Tesla plans t o mix clay with t able salt and then add water, whi ch i t s ays ca us es a r eac t i on where the salt would l each out with li thium, which can then be extracted. The l eftover clay would be put back in the earth t o mitigate environmen­tal damage. "It ' s a very sustainabl­e way of obtaining li thium," said Musk, who did not say where in Nevada t he company had obtained t he li thium rights or whether developmen­t has started. The plan drew backlash almost immediatel­y, with critics describing Musk's plan as to o simplistic and li ght on details. Returning rock t o the earth after minerals are extracted, f or instance, is alr eady common industry practice through t he use of tailings dams. "This plan fr om Tesla brings up a lot more questions than it answers," said Chris Berry, an i ndependent li thium i ndustry consultant. "Are we just supposed t o take Elon Musk's word for i t that t he cost will be lo wer t han existing l it hium proj - ects?" Palo Alto, Calif.- based Tesla did not immediatel­y r espond t o a request for comment. Nevada alr eady has several li thium clay projects under developmen­t, i nclu din g one f r om Li t hium Americas Corp LAC. TO that has bee n s eek i n g f eder al per mit approval f or more than a decade and another fr om i oneer Ltd INR. AX. Lithium Americas has said i t is confident i t can successful­ly extract li th ium fr om clay throug h a process that involves acid leaching. Tesla said it s process won't i nvolve acid, fuelin g f urther questions. "I f producing l it hium in commerci al a mounts at batt ery q ua li t y grades f rom clay was feasible, why isn't it alr eady being done?" said Berry. Any l it hium project fr om Tesla would require an i ntensive applicati on process for necessary permits that could stretch on f or years. Sterling edges higher after Sunak announces new job support scheme Poland should not phase out coal before 2060 Gold continues slide on strong dollar, low rates and European COVID- 19 LONDON: Gold continued its slide down on Thursday morning in Asia with a further strengthen­ing dollar assisting its fall. The greenback was supported by a strong U. S. housing market, and concerns over risk in other markets. The metal has hit its lowest price in two months. Gold futures were down 0.37% at $ 1,860.50 by 11: 47 AM ET ( 3: 47 AM GMT). A general slowdown in Europe, alongside concerns expressed by U. S. state and U. S. Federal Reserve officials about the need for further stimulus measures, pushed gold prices down overnight to a two- month low. Gold fell through the $ 1,900 mark as risk- averse investors sought stability in the greenback instead. Stocks across the globe also felt the pressure, with all markets down as the uncertaint­y over global economic recovery from the COVID- 19 grows. The latest European purchasing manager indexes ( PMI) gave rise to serious worries about the region's recovery prospects, with the services index falling through the 50- mark separating growth from contractio­n. COVID- 19 cases continue to rise in Europe, with concerns that some E. U. countries are now seeing the beginning of the second wave coinciding with the onset of the flu season. Germany's Ifo survey will be released later in the day, giving some insight into how the E. U.' s largest economy is faring. LONDON: Sterling edged higher on Thursday after British finance minister Rishi Sunak announced a new job support scheme, but said the government won't save every job. Versus the dollar, sterling was up 0.2% at $ 1.2751 by 1240 GMT, after hitting a two- month low of $ 1.2676 on Wednesday. Against the euro, sterling was up 0.3% at 91.28 pence. In a choppy session, th e pound remained above $ 1.27 on the overall picture of more government support to rescue businesses and jobs, but fears unemployme­nt will rise when the furlough scheme ends next month kept investors nervous. As Sunak said the British government will support only viable jobs, "the main question is who is going to determine what is the definition of a viable job," said Naeem Aslam, chief market analyst at AvaTrade. Investors are also keen for clues as to whether the Bank of England intends to cut interest rates to below zero. BoE governor Andrew Bailey is due to speak later on Thursday. Sterling has lost 4.4% against the dollar in September so far, and is on course for its worst month since October 2016, as talks of negative rates, the looming risk of a no- deal Brexit and new lockdown measures weigh down the currency. Earlier this week, Prime Minister Boris Johnson told British people to work from home where possible and ordered restaurant­s and bars to close early. The new measures could last for six months, he said. Sterling gained some support from renewed hope the European Union and Britain can reach a Brexit trade agreement by the end of a transition period in December after two of the most powerful players in the negotiatio­ns said they were determined to strike a deal. WARSAW: Poland should not phase out coal before 2060, mining trade unions said on Thursday, as talks with the government continued on the restructur­ing of the industry, which generates most of the country's electricit­y. Poland is the only European Union state to refuse to pledge climate neutrality by 2050, with the ruling Law and Justice ( PiS) party saying that it needs more time and money to shift its economy from coal to cleaner energy sources. The powerful coal trade unions have usually been successful in stopping the government from making deep cuts to the sector. Mindful of violent miners' protests in the past, PiS has been cautious in dealing with the unions in the past few years. But the coronaviru­s crisis and EU climate policies, which have added to the cost of burning fossil fuels rather than using cleaner energy sources, have pushed Warsaw into more decisive steps to tackle the loss- making sector. The government and management at Poland's biggest coal producer PGG had planned to close at least two mines, which have been hit by falling demand for coal, rising costs and a rapid spread of coronaviru­s cases. The plan was rejected by the unions in July and the parties have since been trying to work out a new scheme. But with progress slow and the unions angered by a climate ministry proposal to phase out coal more quickly, miners started an undergroun­d prot est on Monday. "Some elements of these talks have made progress today... we have decided that the transforma­tion of the sector will follow a similar pattern as it did in Germany," Dominik Kolorz, the head of the Solidarity union in southern Poland said in a statement. He said the unions see 2060 as Poland's cut- off date for coal, while the government is targeting 2050. "We have 10 years of discrepanc­y. Maybe we'll meet halfway," Kolorz said. Dollar consolidat­es gains at 2- month highs on economic concerns Global climate goals ' virtually impossible' without carbon capture LONDON: The U. S. dollar held at a twomonth high on Thursday as investors sought its safe- haven appeal on growing concerns over the resilience of an economic recovery in the United States and Europe amid a second wave of coronaviru­s infections. Federal Reserve policymake­rs called on the U. S. government to provide more fiscal support, fuelling a bout of sel lin g i n risky assets overnight, while European economic data has worsened in recent days prompting investors to lighten their positions after a rally in August. "Safe haven demand and higher inflation adjusted yields is leading to a mini dollar revival," said Kenneth Broux, a strategist at Societe Generale in London. Against a basket of six other currencies = USD, the dollar edged up 0.1% to a twomonth high at 94.56. It is up nearly 2% so far this week as economic momentum shows signs of fading. It fell to an April 2018 low of 91.8 at the end of August. Appetite for riskier assets soured after data on Wednesday showed U. S. business activity slowed in September and new restrictio­ns to stem a surge in coronaviru­s infections in Europe hit the services industry. The Norwegian and the Swedish crown came under particul ar selling pressure in London trading hours after the former trimmed its inflation forecasts for the next year and said no rate hikes are planned for now. The crown weakened 0.8% versus the euro to a 4- 1/ 2 month lo w of 11.15 crowns EURNOK= D3, and 0.9% versus the U. S. dollar to a near three- month low of 9.6 crowns, before trimming some losses. OSLO: A sharp rise in the deployment of carbon capture, utilisatio­n and storage ( CCUS) technology is needed globally if countries are to meet net- zero emissions targets designed to slow climate change, the Internatio­nal Energy Agency ( IEA) said on Thursday. A growing number of countries and companies are targeting net zero carbon dioxide ( CO2) emissions by around the middle of the century in the wake of the 2015 Paris climate agreement. To reach that, the amount of CO2 captured must rocket to 800 million tonnes in 2030 from around 40 million tonnes today, the IEA, which advises industrial­ised nations on energy policies, said in a report. Up to $ 160 billion needs to be invested in the technology by 2030, a ten- fold increase from the previous decade, it added. "Without it, our energy and climate goals will become virtually impossible to reach," IEA head Fatih Birol said in a statement. While the story of CCUS has largely been "one of unmet expectatio­ns" due to lack of commercial incentives, large capital costs and public opposition to storage, especially onshore, it was having "significan­t momentum" this year, the IEA said. There have been more than 30 new projects announced recently, with government­s and in dustries committing almost $ 4 billion only this year, Birol told a webinar. Oil- rich Norway alone has pledged to spend 16.8 billion crowns ($ 1.76 billion) to build two carbon capture plants and an open access offshore storage, a project dubbed Longship after the vessels used by Vikings. "While capture and storage i n the Viking era generally meant looting, we are trying to bring home what you don't want to keep, the CO2," Norway's Prime Minister Erna Solberg told the webinar. Birol said the IEA hoped CCUS could become "commercial­ly v iable t his decade" as buildi ng more facilities around the world would help to drive down the costs. The Swedish crown SEK= D3 fell 1% against the greenback to 9.07 crowns per dollar. A surge in COVID- 19 cases in Europe risks becoming a deadly double epidemic of flu and coronaviru­s infections, EU health officials warned on Thursday as they urged Europeans and their government­s not to let their guard down. Also puncturing market optimism are growing concerns that U. S. policymake­rs might struggle to reach an agreement to push for more fiscal stimulus after the November elections. "Optimism on the recovery, optimism on the virus, and bets on stimulus were keeping markets well bid, and on all three of these issues, there has been a degree of disappoint­ment this month," said John Velis, an FX and macro strategist at BNY Mellon. U. S. Federal Reserve Vice Chair Richard Clarida said on Wednesday that the U. S. economy remained in a "deep hole" of joblessnes­s and weak demand and called for more f i scal stimulus, adding t hat policymake­rs "are not even going to begin thinking" about raising interest rates until inflation hits 2% Some i nvestors ar e als o watching th e Australian and New Zealand dollars, which have come under pressure on growing expectatio­ns their central banks could deliver more monetary stimulus. A decline in commodity prices is expected to increase downside risks for both currencies. Daily opening & closing rates Metals, Energy, COTS/ FX and US Indices On Wednesd ay, PMEX tr ad ed value of Metals, Energy, COTS/ FX and in dices was recorded at PKR 10.692 billio n and t he number of lots traded 16,847. Major business was contribute­d by Gold amounting t o PKR 6.552 billion, followed by Silver ( PKR 1.249 billion), NSDQ 100 ( PKR 698.681 million), Nat ur al Gas ( PKR 698.5 66 millio n) , Currencies through COTS ( PKR 683.998 million), Platinum ( PKR 382.268 million), Crude Oil ( PKR 140.141 million), Copper ( PKR 129.175 million), DJ ( PKR 120.293 million) and SP500 ( PKR 37.045 million). In agricultur­e commoditie­s, 2 lo ts of Wheat amounting t o PKR 9. 186 milli on wer e traded. PMEX Index 4,942 Total Volume ( Lots): 16,847 Traded Value ( Rs): 10,692,037,211 Commodity Price Quotation Open Close Commodity Price Quotation Open Close GOLDEURJPY ( COTS) GOLDGBPJPY ( COTS) GOLDCHFJPY ( COTS) GOLDAUDJPY ( COTS) GOLDEURCAD ( COTS) GOLDEURAUD ( COTS) GOLDEURCHF ( COTS) GOLDGBPCHF ( COTS) GOLDAUDCAD ( COTS) DJ NSDQ100 SP500 JPYEQTY ICOTTON ICORN IWHEAT ISOYBEAN JPY ¥ JPY ¥ JPY ¥ JPY ¥ CAD$ AUD$ CHF CHF CAD$ Index Value Index Value Index Value Index Value US Cents per pound US Cents per bushel US Cents per bushel US Cents per bushel 122.921 133.705 114.148 75.27 1.5580 1.633 1.0770 1.171 0.9540 27172 11,149.75 3299.75 22940 65.36 369.5 558.25 1021 122.869 134.019 114.083 74.507 1.5600 1.6490 1.0770 1.1750 0.9460 26682 10,819.50 3230.50 23135 65.20 368.00 550.25 1,018.75 WTI CRUDE OIL BRENT CRUDE OIL NATURAL GAS SILVER GOLD GOLD MTOLAGOLD TOLAGOLD PLATINUM COPPER PALLADIUM GOLDEURUSD ( COTS) GOLDGBPUSD ( COTS) GOLDUSDJPY ( COTS) GOLDAUDUSD ( COTS) GOLDUSDCAD ( COTS) GOLDUSDCHF ( COTS) GOLDEURGBP ( COTS) $ Per Barrel $ Per Barrel US $ Per mmbtu $ Per Ounce $ Per Ounce Rs Per 10 gms Rs Per Tola Rs Per Tola $ Per Ounce US $ per pound $ Per Ounce US$ US$ JPY ¥ US$ CAD$ CHF GBP 39.82 41.78 1.845 24.562 1,905.5 101,732 115,671 115,671 864.7 3.072 2,235.2 1.1710 1.2740 104.965 0.7170 1.3300 0.9200 0.9190 39.52 41.42 2.196 22.908 1,865.2 99,491 112,897 112,897 832.6 2.956 2,233.5 1.1660 1.2720 105.390 0.7070 1.3380 0.9240 0.9170 PRINTED AND DISTRIBUTE­D BY PRESSREADE­R PressReade­r. com + 1 604 278 4604 O R I G I N A L C O P Y . 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