Connect with us

Commodities

Freeport does a balancing act as world’s biggest gold mine grapples with COVID-19 By Reuters

Published

on


© Reuters. FILE PHOTO: Freeport workers gather around security gate at at Grasberg mine area in Tembagapura

By Fathin Ungku and Ernest Scheyder

SINGAPORE/HOUSTON (Reuters) – When miners at Indonesia’s giant Grasberg gold and mine started testing positive for coronavirus early in the pandemic, the mountain-top mining complex was quickly locked down with a skeletal staff left in place to maintain production.

But as months of travel curbs dragged on, angry workers blockaded the mine for four days in August until the operator – a unit of U.S. miner Freeport McMoRan Inc – relented and let them resume weekly rotations out of the site via a four-hour trek by cable car and bus to towns below.

Now the workers are happier, but health experts fear the greater risk of a new outbreak.

The tensions expose the balancing act to maintain output at full blast, while containing COVID-19 in mines like Grasberg, the world’s largest gold mine and second-largest copper mine.

“We’ve put the priority and the health of our workers and community at the top of our list,” Freeport McMoRan Chief Executive Richard Adkerson told Reuters. “From the outset, we recognized that (Grasberg) was a particularly vulnerable place due to the size of the workforce” of nearly 30,000 people.

While Freeport has halted some global operations due to the pandemic, production has continued at the 14,000 foot (4,267 metre) -high Grasberg mine despite Indonesia facing one of the worst coronavirus outbreaks in Southeast Asia.

In May, Freeport said it would operate with a “skeletal team” because of a rise in coronavirus cases in the area, including at the workers’ living quarters. Freeport said at the time it was limiting contractors and removing “high-risk” workers but did not specify how many people would be working at the mine.

But the lockdown took a psychological toll on the workers stuck above the clouds at the site since April, some of whom said that they were unable to attend funerals of family members.

“We were frustrated, we wanted to see our families. So we had to protest,” said a worker, speaking from a dormitory shared with four others. He asked not to be named due to fears of losing his job.

Workers who were kept from working the mine were also unhappy because of lost wages.

RISK OF SECOND WAVE?

Grasberg is located in Papua province’s Mimika regency, which has seen a steady rise in coronavirus cases. As of Oct. 8, there had been 1,902 cases in a population of about 224,000, the second-most infected area in Indonesia’s easternmost province.

Five people have died of COVID-19 at the mine with 724 confirmed cases as of Sept. 29, according to Mining Industry Indonesia, the state company holding a majority stake in Freeport Indonesia.

Since the protests, workers have returned to a weekly crew-change roster, the local company PT Freeport Indonesia said, with about 400-500 workers leaving and entering the mine daily after temperatures checks and a rapid COVID-19 test.

If a rapid test is positive, this would be followed up by a Polymerase Chain Reaction (PCR) test, which experts consider far more accurate.

Before the pandemic, twice as many workers would enter and leave the mine daily, Freeport Indonesia said.

Adkerson said Freeport is treating its employees for coronavirus free of charge at its own medical facilities.

Tri Yunis Miko Wahyono, an epidemiologist at the University of Indonesia, said crew changes should be less frequent to limit the risk of spreading the virus.

“The shortest crew change should be two weeks unless a company is willing to pay for PCR tests for every worker every week,” he said.

But that strategy keeps workers on site longer, adding to potential friction with the company.

“EVERYONE WANTS US TO KEEP WORKING”

To help resolve the protests, Freeport Indonesia paid workers compensation of up to 15 million rupiah ($1,010) for working longer than usual, although it said it did not have responsibility for contractors, who make up nearly three quarters of the 29,201 workers.

A Freeport contractor said by telephone he had not received any payment yet, but the issue was being discussed with management and there were no plans for more protests.

Freeport is one of Indonesia’s biggest taxpayers, with direct contributions of more than $16 billion in taxes, royalties, dividends and other payments between 1992 and 2015, according to company data.

The mine is also crucial for Freeport McMoRan, the world’s largest publicly traded copper producer, which made a profit in the second quarter partly due to higher production at Grasberg.Operations at the Indonesian mine are expected to ramp up even further as it transitions from open pit to underground mining.

“Everyone wants us to keep working. The government does, the community does, it’s important for all stakeholders. Even, in the U.S., mining is considered essential,” said Adkerson.





Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Commodities

Gold Up, Poised for $1,900, on US Election Jitters, New Stimulus Hope By Investing.com

Published

on

By


© Reuters.

By Barani Krishnan

Investing.com – Gold prices rose Friday, appearing poised to return to the key $1,900 level, as the safe haven crowd leveraged on uncertainty over next week’s U.S. election and that the winner will attempt to undertake a new major Covid-19 stimulus for the economy.

New York-traded settled at $1,879.90, up $11.90, or 0.6% on the day. For the month, however, the benchmark U.S. gold contract was down 1.3%, accounting for losses occurring mostly in mid-October as a surge in risk appetite then had weighed on safe-havens.

, which reflects real-time trades in bullion, was up $10.26, or 0.6%, at $1,878.12 by 4:00 PM ET (20:00 GMT).

“Haven buying is expected to increase in the coming days,” Jeffrey Halley, analyst for OANDA in New York, said, adding that gold could attempt to try and get over $1,900. “It should be enough to at least, temporarily, stop the rot until the U.S. election passes.”

Democrat Joe Biden is attempting to wrest the U.S. presidency from Republican Donald Trump in the Nov. 3 election, with polls showing the challenger in the lead. Both Biden and Trump have promised to issue an economic stimulus as quickly as possible after the election to help the country deal with the threat of Covid-19.

Gold is a hedge against fiscal expansion and political uncertainty and typically rises in such circumstances.

Democrats, who control Congress, reached agreement with the Trump administration in March to pass the Coronavirus Aid, Relief and Economic Security (CARES) stimulus, dispensing roughly $3 trillion as paycheck protection for workers, loans and grants for businesses and other personal aid for qualifying citizens and residents.

Since then, the two sides have been locked in a stalemate on a successive relief plan to CARES. The dispute has basically been over the size of the next stimulus as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading

Commodities

Consequences of Trump’s steel tariffs hurt two Pennsylvania mills

Published

on

By


The same fire that melts the butter hardens the egg.

That “same fire” in Western Pennsylvania, the birthplace of American steel, was President Trump’s Section 232 tariffs. They hardened the barrier against steel imports while melting the aspirations of steelmakers who were relying on imports.

Western Pennsylvania is home to US Steel, the iconic steelmaker that in its early years was known simply as “The Corporation.” It was America’s biggest steel producer for virtually the entire 20th century.

USS and other large integrated steelmakers welcomed Trump’s 25% across-the-board tariffs in March 2018, which would serve to tighten domestic supply, paving the way for higher steel prices and improved profit margins.

Two other Western Pennsylvania steelmakers didn’t fare so well. Allegheny Technologies Inc. (ATI), once America’s largest stainless steel producer, and NLMK USA’s Pennsylvania mill, the former Sharon Steel.

Both made strategic plans to use imported slabs – semi-finished steel – to roll into sheet steel, and had foreign partners to do so. ATI teamed up with China’s Tsingshan Group in 2017 for a Pennsylvania rolling mill project dependent on stainless steel slabs from a Tsingshan mill in Indonesia.

NLMK’s offshore slab supplier was its Russian owner.

Trump’s tariffs made it uneconomical for them to import slabs. There was an appeal process for exceptions to the tariffs, but despite their critical needs – and the fact that they also employed American steelworkers who the tariffs were expected to help – they got the cold shoulder.

Commerce rebuffs exemption requests

Ironically, mills that benefited from steel imports being effectively blocked were still able to get the foreign-produced slabs they needed despite the tariffs, via government exceptions. Importing slabs was not as essential to their business models as it was for ATI and NLMK, but was a great help to mills trying to balance their own production with market demand.

Sometimes it’s better to import semi-finished steel in instead of melting your own – like buying a cake mix instead of making the cake from scratch. It gives large integrated mills flexibility and convenience. Availability of foreign slabs also helps US mills weather their expected and unexpected mill outages.

US section 232 steel tariffs timeline

Semi-finished steel, mostly slab, comprises roughly 30% of all US steel imports and the importers are US mills themselves. It may be a little-known fact in Washington DC that US steelmakers as a group are likely the largest importers of steel.

So while USS and its large mill peers were having their cake and eating it too, fellow Keystone Staters, NLMK USA and ATI, got the proverbial pie in the face.

In March, ATI announced plans to idle operations at its 50% owned A&T Stainless joint venture with its Chinese partner in Midland, Pennsylvania, as the Section 232 tariffs made the operation unsustainable. The Department of Commerce denied the company’s first round of tariff exemption requests in April 2019, even though its two-year old venture was required to source its slabs exclusively from Tsingshan’s Indonesian mill under the terms of their JV agreement.

Since March 2018, A&T Stainless has paid over $37 million in tariffs. An ATI spokeswoman told S&P Global Platts that operations at Midland’s Direct Roll Anneal and Pickle (DRAP) Line have been idled since July. “I am not aware of any plans to file another request for exclusion,” she said on Oct. 28.

US hot rolled coil steel prices

While announcing the closure, ATI CEO Robert Wetherbee said in a statement: “While we firmly believe we meet the criteria for an exclusion, we cannot wait any longer. Without a tariff exclusion, we have no choice but to idle the Midland operations.”

NLMK USA filed a complaint with the US Court of International Trade (CIT) against Commerce’s refusal to exclude its slab imports from the Section 232 tariffs. NLMK said US steelmakers AK Steel, Nucor and US Steel filed objections to NLMK’s exemption requests, despite their inability or unwillingness to supply the volumes and types of slabs needed by NLMK’s US mills.

NLMK asked the CIT to find Commerce’s denials of slab exclusions unlawful and recognize NLMK’s right for a refund of the tariffs. NLMK owns and operates three steel mills in Indiana and Pennsylvania. The company said it has invested over $800 million in the facilities following their acquisition and employs 1,200 workers in the US.

NLMK is expecting a CIT ruling before the end of the year.

Steel and politics

Pennsylvania’s status as a battleground state, meanwhile, has only strengthened this election cycle, with speculation that the results of the presidential election could come down to voters in Pennsylvania and Florida. Western Pennsylvania was a stronghold of support for Trump during his 2016 presidential campaign, however the region is still seen as being in play this time around, with almost daily campaign stops from both candidates’ campaigns in the last days leading up to the Nov. 3 election.

Polling of likely voters in Pennsylvania has been tight, with the outlook for the race uncertain, just days away from the election.

As of Oct. 27, democratic nominee Joe Biden was showing a lead of 5.1 points in Pennsylvania, according to FiveThirtyEight, which noted that polls in 2016 were off by 4.4 points in the state, with Trump winning Pennsylvania by only 0.7 points.

“So with a 2016-style polling error in Pennsylvania, Biden would be cutting it awfully close, perhaps even so close that court rulings on factors like ‘naked ballots’ swing the outcome,” FiveThirtyEight said.

In late September, US steelmakers participating in a “virtual town hall” event hosted by the Association for Iron and Steel Technology said they expect continued bipartisan support for their industry regardless of who is elected president.



Source link

Continue Reading

Commodities

Ethanol Looks Beyond Trump-Biden Bluster to Biofuel Reset By Bloomberg

Published

on

By


© Reuters Ethanol Looks Beyond Trump-Biden Bluster to Biofuel Reset

(Bloomberg) — Donald Trump and Joe Biden are scrambling to secure Farm Belt victories with sweeping promises to protect corn-based ethanol’s place in the U.S. fuel mix.

The industry has reasons to be wary of both presidential candidates.

The winner will oversee a “reset” of the congressional mandate to blend biofuels with gasoline. This new phase of the Renewable Fuel Standard, created in 2005 to curb oil consumption and greenhouse gases, could determine ethanol’s role alongside oil in a low-carbon energy economy.

“The RFS is at a critical point,” said Neelesh Nerurkar, a ClearView Energy Partners analyst and former energy adviser to the Obama administration. “Whoever is in power and making the rules two years from now matters a lot.”

Unless lawmakers come up with new policy, the Environmental Protection Agency will begin calling the shots on yearly biofuel-gasoline blend quotas in 2023. The law outlines annual targets only through 2022.

The RFS, which will fall far short of its original goal of requiring 36 billion gallons of biofuels blended with gasoline in 2022, has taken on an almost mythic quality as an economic engine for Iowa and other Midwest states that produce corn, soybeans and the renewable fuels made from them.

‘Peak Ethanol’?

Yet the law’s benefits increasingly flow away from the Heartland, as refineries nationwide are converted to renewable diesel plants and some oil companies get in the business of selling biogas harvested at landfills and wastewater-treatment facilities. And even as they battle Big Oil for share of a shrinking gasoline market, biofuels producers also face the threat of electric vehicles eating into fuel demand.

“The U.S. has basically reached peak ethanol demand,” Iowa State University rural economist David Swenson said. “We are driving more energy-efficient automobiles, we are using electric vehicles and some of our younger generation doesn’t bother to drive at all.”

Biden, who is scheduled to campaign in Iowa on Friday, has promised to accelerate that trend and put more electric cars on the road — a vow that spooks some farmers and ethanol makers. Biden leads Trump by 1.2 points on average in Iowa polls, according to RealClearPolitics.

“We’ve got big concerns about Biden’s focus on electric vehicles,” National Corn Growers Association Chairman Kevin Ross said.

Former Iowa Governor Tom Vilsack, who served as Obama’s agriculture secretary, says worrying about electric cars filling up the highways anytime soon is not realistic.“We’re talking about generations that will pass before we have a vehicle fleet that is even remotely close to being all electric,” Vilsack said in an interview, adding that he sees opportunity to expand ethanol to ships and planes.

Big Unknown

Still, Biden is seen as “a big unknown,” according to Todd Becker, chief executive officer of ethanol producer Green Plains (NASDAQ:) Inc.

Biden has touted “advanced” biofuels on the campaign trail, a phrasing that feeds fears his focus is on next-generation alternatives that are still being developed, rather than traditional corn starch-based ethanol.

How aggressively Biden might get behind a call for a national low-carbon fuel standard is also a question.

A push in Congress for a low-carbon fuel policy is likely if Democrats win back control of the U.S. Senate. Some Democrats want to use the RFS reset as a chance to replace explicit biofuel-usage targets with a broader low-carbon fuel standard, using California as a guide. The state’s program brings together renewable fuel and electricity stakeholders in its goal to reduce vehicle emissions 20% by 2030.

The policy has gained acceptance among ethanol producers in recent years.

“If one is truly technology- and feedstock-neutral and doesn’t favor one technology or vehicle system over another, we feel very good about ethanol’s ability to compete in that sort of policy framework,” Renewable Fuels Association President Geoff Cooper said in an interview.

Waiver Requests

Trump earns points in the Corn Belt for pro-biofuel rhetoric and fulfilling some key promises, such as allowing year-round sales of 15% ethanol fuel blends, or E15. But even the president’s fans are critical of EPA over its handling of waivers that would exempt some oil refineries from biofuel quotas.

“The president delivers on his promise and his EPA undermines him at every turn,” Green Plains CEO Becker said, adding that “there has not been a president in modern times with more love for the U.S. farmer.” Becker said he’s hopeful Trump would be “more forceful with the EPA” if re-elected.

The EPA recently rejected many refinery petitions after months of outcry from the industry and a push by Iowa Republican Senator Joni Ernst. The agency still hasn’t ruled on all waiver requests, nor has it followed through on some ethanol policy goals. Ernst has used her tough re-election contest to extract pro-ethanol commitments from Trump.

“So many ethanol promises — promises to do right by this industry — have collected dust,” Brian Jennings, chief executive of the American Coalition for , said on a call with reporters last month.

Ethanol prices, which plunged earlier this year as pandemic lockdowns across the U.S. kept cars off the road, slipped 2.2% in Chicago this week, according to data compiled by Bloomberg.

Meanwhile, corn futures in Chicago are heading for the biggest weekly slump since June as the coronavirus outbreak worsens. More than a third of U.S. corn goes into making ethanol fuel.

No Returns

Trump in Des Moines, Iowa, earlier this month ribbed the crowd about never returning to Iowa if he doesn’t win its six electoral votes November 3.While he appeared to be joking, Trump said out loud what some have been silently wondering.

“There are a lot of people in our industry that are concerned about what would happen after the election if Trump is re-elected and he doesn’t have to campaign in Iowa again,” Iowa Renewable Fuels Association Executive Director Monte Shaw said.

Regardless of who wins next week, the industry will continue to have “bipartisan champions” as well as “detractors from the far fringes of both parties,” Shaw said.

“No matter which party is in charge of the House, Senate, or White House, we have our work cut out for us.”

(Adds background in 14th paragraph; ethanol and corn prices starting in 23rd.)

©2020 Bloomberg L.P.

 





Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme.