Friday, September 24, 2021

Lebanon takes first gasoil cargo under Iraq supply deal

 https://annobunnik.files.wordpress.com/2013/11/sil.gif

https://www.argusmedia.com/en/news/2255469-lebanon-takes-first-gasoil-cargo-under-iraq-supply-deal 

Lebanon has received a first cargo of gasoil under a fuel supply deal struck with Iraq in late-July to help alleviate a growing fuel-supply crisis in the cash-strapped state.

The tanker laden with 31,000t (231,000 bl) of gasoil began to discharge on 17 September in Lebanon, according to Lebanon's ministry of energy and water. 15,000t of the fuel was unloaded into the tanks of Lebanon's Deir Ammar power plant in the north on that day, with the remaining 16,000t unloading yesterday at the Zahrani plant in the south.

The energy ministry did not give the name of the vessel. But the Kriti Episkopi, which according to Vortexa loaded 32,200t of gasoil from Georgia, departed on 6 September and arrived at Deir Ammar on 17 September, is likely that tanker. Vortexa shows the vessel now moored off the Zahrani power plant.

According to the ministry, the gasoil cargo began to unload after Lebanon's General Directorate of Oil and the concerned monitoring companies validated the conformity of the gasoil specifications. Argus has not yet been able to confirm the specifications of the gasoil typically used at the Deir Ammar plant, but the Zahrani plant normally takes gasoil with a maximum sulphur content of 0.2pc.

Under the supply deal signed with Iraq, the Lebanese government will buy and resell 1mn t of heavy fuel oil from Iraq through monthly spot tenders - in cargoes of 75,000-85,000t - for one year on behalf of Lebanon's main power provider Electricite du Liban (EDL). Lebanon said the deal should cover around one third of EDL's annual fuel needs, therefore tying the country over for around four months.

This first cargo came as part of a tender that was awarded to Dubai's state-owned Enoc in late August to swap 84,000t (542,000 bl) of Iraqi fuel oil with 30,000t of a specific grade of fuel and 33,000t (246,000 bl) of gasoil for use at Lebanon's power plants. Market sources said Lebanon has awarded its second tender under this scheme, again to Enoc, to swap the same amount and products, but this could not be confirmed.

Lebanon's energy ministry said a "Grade B" fuel oil vessel will arrive in Lebanon before the end of September.

Separately, the energy ministry issued a spot tender on 17 September to buy a total of 60,000t 10ppm sulphur gasoil to be delivered to the oil installations in Tripoli and Zahrani on a DAP basis. According to the tender, the product should be delivered into two equal lots, one for 10-15 October delivery and another for 20-25 October delivery. Offers must be submitted by 27 September and 5 October, respectively.

Wednesday, September 22, 2021

Soaring gas prices ripple through heavy industry, supply chains

The logo of the Nord Stream 2 gas pipeline project is seen on a pipe at the Chelyabinsk pipe rolling plant in Chelyabinsk, Russia, February 26, 2020. REUTERS/Maxim Shemetov

The logo of the Nord Stream 2 gas pipeline project is seen on a pipe at the Chelyabinsk pipe rolling plant in Chelyabinsk, Russia, February 26, 2020. REUTERS/Maxim Shemetov

https://www.reuters.com/business/energy/soaring-gas-prices-ripple-through-heavy-industry-supply-chains-2021-09-22/

LONDON, Sept 22 (Reuters) - Global record high natural gas prices are pushing some energy-intensive companies to curtail production in a trend that is adding to disruptions to global supply chains in some sectors such as food and could result in higher costs being passed on to their customers.

Some companies, including steel producers, fertiliser manufacturers and glass makers, have had to suspend or reduce production in Europe and Asia as a result of spiking energy prices. That includes two of the world’s largest fertiliser makers, which said they would cut production in Europe. The UK on Tuesday said it agreed to provide state support to one of the companies to restart production of by-product carbon dioxide, which is used in food production, to avert a supply crunch. read more

Natural gas prices have risen sharply around the globe in recent months. That has been due to a combination of factors: including increased demand particularly from Asia due to a post-pandemic recovery; low gas inventories; and tighter-than-usual gas supplies from Russia.

Gas prices in Europe have risen more than 250% this year, while Asia has seen about a 175% increase since late January. In the United States, prices have surged to multi-year highs and are about double where they were at the start of the year. Electricity prices have also risen sharply as many power plants are gas-fired.

Industrial Energy Consumers of America, a trade group representing chemical, food and materials manufacturers, has in recent days called on the U.S. Department of Energy to stop the country's liquefied natural gas producers from exporting gas to help keep the energy costs down for industry. read more

Additional supplies of gas could alleviate pressure. Norway has allowed increased gas exports. More supply could flow from Russia by the end of the year with the country’s new Nord Stream 2 pipeline awaiting approval from Germany’s energy regulator. The pipeline project has drawn criticism from the United States, which says it will increase Europe’s reliance on Russian energy supplies. read more

PRODUCTION DISRUPTIONS

The pressures so far have been particularly acute in Europe, where gas stocks are much lower than usual heading into winter. Norway’s Yara International ASA (YAR.OL), one of the world’s largest fertiliser makers, on Friday said it would cut about 40% of its European ammonia production due to high gas prices. That came after U.S.-based CF Industries Holdings Inc (CF.N) said gas prices were prompting it to halt operations at two of its British plants. Natural gas is the most important cost input for nitrogen-based chemicals and fertilizers. read more

Yara’s chief executive, Svein Tore Holsether, told Reuters in an interview Monday that the company was bringing ammonia to Europe from production facilities elsewhere, including the United States and Australia. "Instead of using European gas, we are essentially using gas from other parts of the world to make that product and bring it into Europe," he said. read more CF Industries didn’t respond to requests for comment.

Some industries are calling on governments to intervene on their behalf. These pleas come as some countries have acted to protect consumers from soaring energy bills, such as Spain, which last week approved a package of measures including price caps.

Among those asking for help is the food industry following a shortage of carbon dioxide (CO2) caused by the suspension of production in some fertiliser plants. CO2 is used in the vacuum packing of food products to extend their shelf life, to stun animals before slaughter and to put the fizz in soft drinks and beer.

In the UK, meat processors had warned they will run out of CO2 within five days, forcing them to halt production. Soft drink manufacturers, who rely on the gas to make carbonated drinks, said supplies were running low. read more

On Tuesday, the British government said it struck a three-week deal with CF Industries for the American company to restart the production of carbon dioxide in the UK. Britain’s environment minister, who said the state support could run into tens of millions of pounds, also warned the food industry that carbon dioxide prices would rise sharply.

CF Industries said in a statement it is immediately restarting ammonia production at its Billingham plant following the agreement.

WEATHERING THE STORM

Other energy-intensive sectors such as steel and cement are also feeling the pinch.

Soaring gas prices have in the past couple of weeks "forced some steelmakers to suspend operations during those periods of the night and day when the cost of energy rockets," said Gareth Stace, director general at industry group UK Steel. He declined to identify which companies.

British Steel, the country’s second-largest steel producer, said it was maintaining normal levels of production but that the “colossal” energy-price increases made “it impossible to profitably make steel at certain times of the day.”

Some manufacturers say they are able to cope, so far.

Germany’s Thyssenkrupp AG, (TKAG.DE) Europe’s second-largest steelmaker, said hedging mechanisms it had in place against energy price increases, especially gas, meant it was not curbing production. But it said it was indirectly affected because the industrial gases it used are linked to electricity prices.

HeidelbergCement AG (HEIG.DE) of Germany, the world’s second-largest cement maker, said higher energy prices were driving up production costs but that operations had not been halted as a result.

In China, several steel, ceramic and glass makers have reduced production to avoid losses, according to Li Ruipeng, a local supplier of liquefied natural gas in the northern province of Hebei. And, China’s southwestern province of Yunnan this month imposed limits on production of some heavy industries, including producers of fertilisers, cement, chemicals, and aluminium smelters due to energy shortages, a move that analysts said could reduce exports.

To weather the storm, some energy-intensive industries and utility firms in Asia and the Middle East have temporarily switched from gas to fuel oil, crude, naphtha or coal, analysts and traders said. That trend is expected to continue for the rest of the year and into the beginning of next, according to the International Energy Agency, the Paris-based energy watchdog.

In Europe, demand for coal as an alternative power source has also risen significantly. But options for switching to alternative sources of energy are limited in the region largely due to government policies aimed at encouraging the use of gas over more polluting fuels such as coal.

The glass industry was historically run on fuel oil, but almost all sites in the United Kingdom have now transitioned to natural gas, according to Paul Pearcy, federation coordinator at British Glass, a UK trade association. Only a few sites have fuel oil tanks that enable them to switch energy source if prices skyrocket, he added.

Reporting by Bozorgmehr Sharafedin and Susanna Twidale in London, Roslan Khasawneh in Singapore Additional reporting by Guy Faulconbridge, Nigel Hunt, Eric Onstad and Ahmad Ghaddar in London, Jessica Jaganathan and Chen Aizhu in Singapore, Yuka Obayashi in Tokyo, Nidhi Verma in Delhi, Scott DiSavino in New York, Heekyong Yang in Seoul, and Christoph Steitz in Frankfurt, Tom Kaeckenhoff in Düsseldorf, Polina Devitt in Moscow, Arathy S Nair in Houston Editing by Cassell Bryan-Low

Our Standards: The Thomson Reuters Trust Principles.

OPEC Nations Warn of Oil Market Turbulence From Gas Crisis

Iraq expects higher demand for crude as consumers look to alternative fuels.

Iraq expects higher demand for crude as consumers look to alternative fuels. Photographer: Ahmad Al-Rubaye/AFP/Getty Image

https://www.bloomberg.com/news/articles/2021-09-22/opec-nations-warn-of-oil-market-turbulence-from-gas-crisis 

  • Iraq and Nigeria say gas may need to be replaced with oil
  • OPEC and its allies have plentiful spare capacity to tap

 As the global natural gas crunch hits suppliers and consumers alike, OPEC nations are warning of the knock-on impact for oil markets. 

Iraq expects higher demand for crude as the shortfall of gas forces consumers to look for alternative fuels, Oil Minister Ihsan Abdul Jabbar said on Wednesday. The head of Nigeria’s state oil firm, Mele Kyari, predicted that petroleum demand could be boosted by 1 million barrels a day, with prices potentially gaining $10 a barrel over the next six months. 

While the two exporters are hardly neutral observers of the situation, their views echo thinking that’s increasingly widespread in the market. Brent futures are already at $75 a barrel, approaching this year’s peak. 

Goldman Sachs Group Inc. says that a cold winter could overwhelm the oil market’s capacity to make up for missing gas supplies, resulting in a price spike with repercussions for the economy. Almost 2 million barrels of oil a day could be needed for a mixture of power generation and industrial purposes, the bank said. 

In such an extreme scenario, the Organization of Petroleum Exporting Countries and its partners could benefit handsomely, as they still have plenty of crude supplies shuttered when the pandemic struck last year. It could be a particularly golden opportunity for Baghdad, which is eager to maximize sales after being hobbled by years of conflict.

“If there is agreement within OPEC, we will be ready,” Iraq’s Jabbar said.

— With assistance by Manus Cranny

Monday, September 20, 2021

Iron ore price collapses below $100 as China extends environment curbs

Iron ore price collapses under $100 as China extends environmental curbs

https://www.mining.com/iron-ore-price-collapses-under-100-as-china-extends-environmental-curbs/?utm_source=Daily_Digest&utm_medium=email&utm_campaign=MNG-DIGESTS&utm_content=iron-ore-price-collapses-under-100-as-china-extends-environmental-curbs 

The iron ore price sank below $100 a tonne on Friday for the first time since July 2020, as China’s moves to clean up its heavy-polluting industrial sector spurred a swift and brutal collapse.

The Ministry of Ecology and Environment said in a draft guideline on Thursday that it planned to involve 64 regions under key monitoring during winter air pollution campaign.

The regulator said steel mills in those regions would be urged to cut production based on their emission levels during the campaign from October until the end of March.

“Stringent production controls have driven market prices lower recently, and pessimistic outlook for demand have intensified,” analysts with SinoSteel Futures wrote in a note.

Prices have more than halved since peaking in May as the world’s biggest steelmaker intensifies production curbs to meet a target for lower volumes this year, and a sharp downturn in China’s property sector impacts demand. 

Iron ore’s slump makes it one of the worst-performing major commodities and a notable outlier in a broader boom that’s seen aluminum soar to a 13-year high, gas prices jump and coal futures surge to unprecedented levels.

Iron ore futures have slumped more than 20% this week and were trading at $99.55 a tonne Friday morning in New York.

The decline “has played out faster than expected,”, said UBS Group AG. UBS predicts prices will average $89 next year, a 12% cut to its previous forecast.

Iron ore producers Rio Tinto Group, BHP Group, Vale SA and Fortescue Metals Group Ltd. have seen their shares tumble.

Meanwhile, steel prices are still elevated. The market remains tight of supplies as China’s production cuts significantly outpace declining demand, according to Citigroup Inc.

Spot rebar is near the highest since May, albeit 12% below that month’s high, and nationwide inventories have shrunk for eight weeks.

China has repeatedly urged steel mills to reduce output this year to curb carbon emissions. Now, winter curbs are looming to ensure blue skies for the Winter Olympics.

(With files from Reuters and Bloomberg)

Friday, September 17, 2021

Iron ore price dives 7% on China’s lower steel output data

Iron ore price dives 7% on China’s lower steel output data

China produced 83.24 million tonnes of crude steel in August, a 13.2% drop from the same period a year ago. (Stock Image) 

https://www.mining.com/iron-ore-price-dives-7-on-chinas-lower-steel-output-data/?utm_source=IronOre_Digest&utm_medium=email&utm_campaign=MNG-DIGESTS&utm_content=httpswwwminingcomironorepricedives7onchinaslowersteeloutputdata 

The iron ore price fell on Thursday after China reported a drop in the country’s steel production in August.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $107.21 a tonne, down 7.7% from Wednesday’s closing.

The high-grade Brazilian index (65% Fe fines) also fell 4.3% to $133.10 a tonne.

Mining stocks also slid, with BHP Group down more than 6% from the previous week, Rio Tinto Group down 5.3%, and Vale down 7%.

China produced 83.24 million tonnes of crude steel in August, a 13.2% drop from the same period a year ago, according to data released by China’s National Bureau of Statistics on Wednesday, as the country curbed its steel industry to cut emissions. 

According to analysts at ANZ Research, it was the lowest level since March 2020.

“These constraints are expected to remain through the end of the year as provinces look to hit targets on emission.”

“With China’s plans to limit production to last year’s level, we see output falling by 11% y/y in the second half of 2021,” ANZ Research wrote, adding that it may result in loss of 87 million tonnes of iron ore demand.

“Markets remain highly sensitive to news of new curbs because iron ore prices are still well above the cost of production.” senior economist at Westpac, Justin Smirk, told the Financial Review.

China’s southwest Yunnan province asked local producers on Monday to restrict output on steel, aluminum and other materials. Part of the planned production in September would be postponed to the last two months of the year.

The province, which produces about 2.3% of the nation’s total crude steel, is the latest to be targeted as the country steps up its blue skies campaign aimed at reducing air pollution for the Beijing Winter Olympic Games in February next year.

(With files from Reuters)

Tuesday, September 14, 2021

Oil drilling bans advance in House with climate change assault

 

Photo: Mandel Ngan/AFP via Getty Images

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A House committee on Thursday advanced sweeping legislation to combat climate change, with plans to block oil drilling in most U.S. offshore waters, thwart potential mining in the western part of the country and invest billions of dollars in conservation.

The $31.7 billion measure, approved 24-13 by the House Natural Resources Committee, would also slap new fees on oil and mining companies while funding drought relief, conservation and other programs. It is now set to be folded into a broader multi-trillion-dollar social reform and climate change bill taking shape in the House.
The approval comes amid “a once-in-a-generation opportunity to advance a bold, ambitious investment in the people of the United States,” said committee Chairman Raul Grijalva, a Democrat from Arizona. The legislation “will confront the damage being done by climate change, put our country on a more sustainable and equitable economic and environmental path, and create millions of jobs.”

Republicans made clear they didn’t share that view. Over the course of two days — and more than 17 hours — of panel debate and votes on the measure, they took turns lambasting it as a “delusional” package of Democratic “pet projects” and “green pork.” 

The Democrats’ package is “partisan government overreach” that will “hamstring the economy, cripple domestic energy production and make the U.S. dependent on foreign adversaries,”said Bruce Westerman of Arkansas, the panel’s top Republican.

Democrats turned back more than two dozen amendments from Republicans seeking to eliminate proposed limitations on drilling and mining, with sometimes heated exchanges that presaged further clashes when the plan is debated by the full House and moves to the evenly divided Senate. 

Provisions that drew GOP scorn included the measure’s ban on the sale of new drilling rights in Pacific and Atlantic waters as well as the eastern Gulf of Mexico. Central and western Gulf tracts could still be leased.

The bill also would reverse a mandate to sell drilling rights in the Arctic National Wildlife Refuge’s coastal plain and void nine leases issued in that northeast Alaska region earlier this year. Congress previously required two auctions of refuge leases by Dec. 22, 2024 to help pay for the 2017 tax cuts.

Congressional leaders need unanimous support from Senate Democrats to pass the bill, but the oil leasing provisions could draw opposition from some of them, including Joe Manchin of West Virginia, who has highlighted past support for Arctic refuge oil development as evidence of his bipartisan bona fides. 

Some of the planned spending has drawn broader support. The bill’s proposed funding for environmental analysis and conservation would benefit existing government programs “that need to be funded, bolstered and prioritized in this fight against climate change,” said Athan Manuel, director of the Sierra Club’s Lands Protection Program.

The bill also would:

  • repeal a 2014 measure that authorized the transfer of roughly 2,400 acres of land for the Resolution Copper mining project in Arizona involving Rio Tinto Plc and BHP Group Ltd.
  • rule out new uranium mining claims on more than 1 million acres around the Grand Canyon
  • impose fees on mining on federal land, including royalties of as much as 8% and a new seven-cent-per-ton fee on displaced material
  • increase rental rates for onshore oil and gas leases, shorten the duration of them, impose a new $4-per-acre “conservation of resources fee” on the tracts, require companies to pay a royalty on vented or flared methane and boost overall royalty rates from 12.5% to 20%
  • create annual fees of as much as $10,000 per mile on offshore pipelines — including the Gulf of Mexico’s existing 8,600-mile network of them
  • spend $25 million each to conserve endangered and threatened butterflies, desert fish and freshwater mussels
  • dedicate at least $1.7 billion to establish a Civilian Climate Corps that would put Americans to work building clean energy infrastructure, capping inactive wells and conserving land.

(By Jennifer A. Dlouhy)

Monday, September 13, 2021

Harvard’s $42bn fund to end investment in fossil fuels

 John F. Kennedy is seen during his graduation from Harvard in 1940.  (John F. Kennedy Presidential Library)

John F. Kennedy is seen during his graduation from Harvard in 1940. (John F. Kennedy Presidential Library)

https://www.mining.com/harvards-42bn-fund-to-end-investment-in-fossil-fuels/?utm_source=Daily_Digest&utm_medium=email&utm_campaign=MNG-DIGESTS&utm_content=harvards-42bn-fund-to-end-investment-in-fossil-fuels 

Harvard University has announced it will no longer invest in fossil fuels and will instead use its $42 billion endowment to support the world’s transition to green energy, drawing praise from stakeholders that had long pressed the educational institution to exit such holdings. 

President Lawrence Bacow, who for years publicly opposed divesting, said in a letter that the university’s endowment had no direct investments in fossil fuel exploration or development companies as of June and will not invest in them in the future. 

The university does have indirect investments in the fossil fuel industry but, according to Bacow, they are “in runoff mode.” These investments, made through private equity funds, make up less than 2% of the endowment, he said. 

Harvard had announced last year it would work with its investment managers to reach “net zero” greenhouse gas emissions by 2050, but that wasn’t fast enough for its students

The move marks a sharp twist in the university’s position on the matter in the last ten years, which pitted student activists against administrators and dominated campus politics. 

In a September 2019 letter published in Harvard Magazine, Bacow wrote that he believed working with fossil fuel companies was a “sounder and more effective approach” to fossil fuels for Harvard to take. 

“We may differ on means,” Bacow told students in the letter. “[But we] share the belief that action is required. We just happen to have an honest difference of opinion over what the appropriate action is.” 

The university had announced last year it would begin working with its investment managers to reach net-zero greenhouse gas emissions by 2050. That wasn’t fast enough for its students. A group filed in March a complaint with the Massachusetts attorney general to try forcing Harvard to sell its estimated $838 million fossil fuel holdings, The Harvard Crimson reported

Butterfly effect?

Divest Harvard, one of the activist groups, described the announcement on Twitter as “a massive victory for our community, the climate movement, and the world — and a strike against the power of the fossil fuel industry.” 

The Ivy League college, the richest in the US, will be following in the footsteps of other institutions, such as the University of California and the UK’s Cambridge University, which have committed to divesting their endowments from the fossil fuel industry. 

The decision is expected to motivate other educational institutions to withdraw their support of businesses contributing to man-made climate change. 

The university will also be joining a growing group of big institutional investors and governments that are responding to consumer pressure to accelerate de-carbonization efforts. 

The United Nation’s authoritative Intergovernmental Panel on Climate Change (IPCC) released last month a report deemed as “code red for humanity.” 

The review of a 2013 report predicts that temperatures on Earth will rise by about 1.5 degrees Celsius in two decades and warns that a near-2m rise in sea levels by the end of this century “cannot be ruled out.”

 

Friday, September 10, 2021

China notifies new rules to regulate foreign ships in its waters

 The fourth session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC) opens at the Great Hall of the People in Beijing, capital of China, March 4, 2021. Photo: Xinhua

The fourth session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC) opens at the Great Hall of the People in Beijing, capital of China, March 4, 2021. Photo: Xinhua

https://www.tankeroperator.com/ViewNews.aspx?NewsID=12585 

In a bid to regulate foreign ships, China notified new maritime rules warranting vessels carrying radioactive materials, bulk oil, chemicals and a host of other supplies to report the details of the cargos upon their entry into Chinese waters.

The new rules are expected to increase tensions if China strictly enforces them in the disputed South China Sea and the Taiwan straits where the US and its allies have been conducting naval expeditions, challenging Beijing's claims to assert the freedom of navigation.

Beijing claims almost all of the 1.3 million square-mile South China Sea as its sovereign territory. China has been building military bases on artificial islands in the region also claimed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

According to a notice from China's maritime safety authorities issued last weekend, operators of submersibles, nuclear vessels, ships carrying radioactive materials and ships carrying bulk oil, chemicals, liquefied gas and other toxic and harmful substances are required to report their detailed information upon their visits to Chinese territorial waters.

In addition to these types of vessels, vessels that may endanger the maritime traffic safety of China prescribed by laws should also follow the new regulation which took effect from September 1st, the state-run Global Times quoted the notice from Maritime Safety Administration.

Those vessels should report the name, call sign, current position and next port of call and estimated time of arrival. The name of shipborne dangerous goods and cargo deadweight are also required in the report, the report said.

Chinese experts told the Global Times they view the rollout of such maritime regulations as a sign of stepped-up efforts to safeguard China's national security at sea by implementing strict rules to boost maritime identification capability.

The reference to submersible reportedly refers to unmanned spy devices found by the Chinese fishermen in China's coastline.

Song Zhongping, a military expert and TV commentator, said the new announcement showcases China's determination to regulate the foreign vessels' right of use within the country's territorial waters, which should be based on proper identification.

Tensions between China and the US over Taiwan and the South China Sea coupled with growing discord between the two countries over the origin of coronavirus, Tibet, Xinjiang and Hong Kong have remained high after Joe Biden took over as the President of America in January this year.

On August 27th, the Chinese Defence Ministry termed as provocative the crossing of two US naval ships through the Taiwan Strait, in what the US Pacific Fleet described as a routine operation.

This was the eighth time the US naval ships passed through the channel after Biden became the president.

The frequent provocative moves [the passage of American vessels] are of a very bad nature and show the US is the biggest destroyer of peace and stability and the biggest maker of security risks across the Taiwan Strait, Chinese defence ministry spokesman Tan Kefei said.

The US Navy and Air Force also conducted such missions in the disputed South China Sea to assert freedom of navigation challenging China's claims of sovereignty over the area.

Thursday, September 9, 2021

Guinea junta plans unity government, reassures mining firms

 

On national television, coup leader Mamady Doumbouya says the borders are closed and the constitution dissolved. Image: screenshot via Al Jazeera’s YouTube channel.

https://www.mining.com/web/guinea-junta-plans-unity-government-reassures-mining-firms/?utm_source=Daily_Digest&utm_medium=email&utm_campaign=MNG-DIGESTS&utm_content=guinea-junta-plans-unity-government-reassures-mining-firms 

A military junta that seized power in Guinea said it plans to establish a unity government pending a transition to civilian rule, urged mining companies to keep operating and reassured them that their existing agreements with the state will be honored.  

“A government of national unity will be set up to lead the transition,” coup leader Colonel Mamady Doumbouya said in an address to members of the toppled administration on Monday. “The curfew in mining zones has been lifted to ensure continuity of production, and ports remain open for exports,” he said. Air links have also been restored.
Special forces led by Doumbouya seized power on Sunday after detaining President Alpha Conde, who’d held power since late 2010. The 83-year-old leader has so far resisted pressure to resign, according to two people familiar with the matter who asked not to be identified because they aren’t authorized to speak to the media.

Doumbouya will present himself as the leader of the transition, the people said. 

The coup leader has ordered members of a presidential security unit to confine themselves to a barracks outside the capital city of Conakry, and banned former officials from leaving the country. He also instructed the secretaries-general of Guinea’s ministries to take over the role of ministers, and the governors of the regions to be replaced by military commanders. 

There were no signs of unrest in Conakry overnight in response to the military takeover by the junta.

Guinea is a key global supplier of bauxite, an ore that’s processed into alumina and then aluminum, which is used in cars and cans. The bulk of the West African nation’s bauxite exports are sent to smelters in China, the biggest producer of the metal. Guinea shipped 82.4 million tons of the mineral globally last year, according to government data. 

China and Russia on Monday joined the United Nations and the U.S. in condemning the coup. 

“China opposes coup attempts to seize power and calls for the immediate release of President Conde,” Chinese Foreign Ministry spokesman Wang Wenbin told reporters in Beijing on Monday. “We hope all parties can be cool headed and exercise restraint, keep in mind the fundamental interests of the nation and people, address the relevant issue through dialog and consultation and safeguard peace and stability in the country.”

Leaders of two African blocs have also pushed for Conde’s release. The Economic Community of West African States threatened sanctions against Guinea, while the African Union called for its Peace and Security Council to meet urgently over the matter.

Financial mismanagement

Conde’s overthrow was necessary to address financial mismanagement and corruption in Guinea, and the deposed leader is safe and has been in contact with his doctors, Doumbouya said on Sunday. 

The coup has upended a decade of stability in Guinea, and will be of concern to other African leaders, according to Eric Humphery-Smith, Africa analyst at risk intelligence company Verisk Maplecroft. 

“While the feeling among many Guineans is jubilation, make no mistake that this is two steps backwards for both the country’s democracy and economy,” he said in emailed comments. “Recovering what until now was a stable and predictable operating environment is anything but a given.”

(By Ougna Camara and Baudelaire Mieu, with assistance from Leanne de Bassompierre, Katarina Hoije, Yinka Ibukun and Colum Murphy)

Thursday, September 2, 2021

Iron ore price plunges on steel production curbs in China

Iron ore futures plunge over 8% on lacklustre demand outlook

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Iron ore prices fell sharply on Wednesday amid more expectations for crude steel production curbs in China for the remainder of the year.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $143.43 a tonne, down 6.5% from Tuesday’s closing.
Fastmarkets MB Iron Ore Indices

“The September delivery (of iron ore) remains wide contango,” analysts with SinoSteel Futures wrote in a report, noting that the price for the deliverable product Super Special Fine has been recently lowered to 723 yuan ($111.88) per tonne.

The September iron ore contract was traded around 880 yuan a tonne in the morning session.

While China has not relaxed steel production curbs as of yet, mills are not supported to increase inventories in the short term and that could affect price gain in a far-month contract, SinoSteel Futures added.

Benchmark iron ore futures on the Dalian Commodity Exchange for January delivery were down 8.1% at 763 yuan ($118.07) per tonne, as of 0255 GMT, the biggest percentage loss since July 30.

Steel prices on the Shanghai Futures Exchange were also undermined by a drop in raw materials and tepid economic data.

Earlier in the week, Baoshan Iron & Steel Co., the listed unit of China’s biggest producer, flagged the potential for renewed price declines in iron ore.

“We expect China’s steel curtailments to be targeted in 4Q when demand slows seasonally and air pollution is in focus (especially ahead of the Winter Olympics in Feb-22) and as a result we expect prices to stabilize in Sept/Oct before continuing to fall back below $100/tonne in 2022,” UBS analysts wrote in a recent note.

China’s factory activity slipped into contraction in August for the first time in nearly 1-1/2 years as covid-19 containment measures, supply bottlenecks and high raw material prices weighed on output in a blow to the economy.

Related read: Global iron ore production to accelerate until 2025 – report

(With files from Reuters and Bloomberg)

Wednesday, September 1, 2021

Copper royalty bill clears another hurdle in Chile

 

 Copper royalty bill clears another hurdle in Chile

 Chilean Senate / Wikpedia

https://www.mining.com/web/copper-royalty-bill-clears-another-hurdle-in-chile/?utm_source=Daily_Digest&utm_medium=email&utm_campaign=MNG-DIGESTS&utm_content=copper-royalty-bill-clears-another-hurdle-in-chile 

A bill that would create the heaviest tax burden among major copper-producing nations was approved by a Chilean senate mining committee on Tuesday. 

The royalty proposal passed by three votes to two and now goes to the senate floor for debate, with modifications likely to be presented in a bid to soften a version passed in the lower house in May.
Chile, like other host nations, is looking for a bigger share of mining profits to help resolve inequalities exacerbated by the pandemic. At the same time, the country is drafting a new constitution that may lead to tougher rules on water, mineral and community rights ahead of presidential elections in November.

The industry has warned that the bill as it stands — with sales tax brackets that increase as copper prices rise — would derail investments and undermine competitiveness in a nation that accounts for more than a quarter of global copper. In June, the center-right ruling coalition said it was confident of tempering the opposition-backed bill.

“As always, the right-wing voted against it, seeking to block a greater contribution from mining to a new model of society,” committee member and presidential candidate Yasna Provoste wrote on her Twitter account.

While proponents of the new royalty system say it would replace current taxes on profit, that isn’t written into the bill, leading government officials to suggest the two systems could run together. The bulk of large mining companies in Chile have tax stability agreements until 2023.

On the same day as the committee passed the bill, the government unveiled a road map for the sector over the next three decades. Goals include lifting copper output by 57% while maximizing social benefits through “fair and competitive” taxes.

(By James Attwood and Valentina Fuentes)

Tuesday, August 31, 2021

U.S. to Auction 20MM Barrels of Oil from Strategic Petroleum Reserve

 

 US SPR Gulf Petroleum Reserves

https://tankterminals.com/news/u-s-to-auction-20mm-barrels-of-oil-from-strategic-petroleum-reserve/?utm_source=ActiveCampaign&utm_medium=email&utm_content=U+S++to+Auction+20MM+Barrels%2C+South+America+Is+Big+Oil+s+New+Favorite%2C+Bakken+Energy+Buys+Dakota+Gas%2C+Fujairah+Oil+Terminal+To+Upgrade%2C++Pin+Oak+Commissions+Interconnections+with+EPIC+-+Week+35&utm_campaign=TankTerminals+com+Newsletter+-+Week+35+-+%28OTHER%29

The U.S. is holding its largest sale of oil from strategic reserves this year at a time when the outlook for fuel demand is darkening amid the resurgent Covid-19 virus.

The Energy Department plans to auction off 20 million barrels of crude, twice as much as it offered for sale 3 1/2 months ago. The oil will be delivered during the fourth quarter, when U.S. demand for gasoline and other fuels typically falters and refineries slow down oil purchases while they shut down equipment for repairs and maintenance.

The sale also comes after crude prices have dropped 15% since touching a 6 1/2-year high in early July as the spread of the delta variant threatens to derail the economic recovery and return to business as usual. Companies including BlackRock Inc. and Jefferies Financial Group Inc. are postponing plans to return workers to offices.

The reserve, created in 1975 to serve as an emergency stockpile, held 621 million barrels in four underground caverns as of Aug. 13, Energy Department figures showed.

Benchmark American crude futures rose almost 6% on Monday in New York amid a broader rally in commodities and equity markets.

Monday, August 30, 2021

How Afghanistan’s $1 trillion mining wealth sold the war

 A map of Afghanistan’s resources

A map of Afghanistan’s resources (USGS)

https://www.mining.com/how-afghanistans-1-trillion-mining-wealth-sold-the-war/?utm_source=Daily_Digest&utm_medium=email&utm_campaign=MNG-DIGESTS&utm_content=how-afghanistans-1-trillion-mining-wealth-sold-the-war 

After the fall of Kabul, US media regurgitates a 2010 New York Times frontpage story on Afghanistan’s mineral riches based on a secret Pentagon memo and a 1977 Soviet geologic map.

Search for Afghanistan minerals and you get dozens of articles written in the last few days quoting a magical $1 trillion number including gems like The Taliban are sitting on $1 trillion worth of minerals the world desperately needs (CNN), Afghanistan: Taliban to reap $1 trillion mineral wealth (Deutsche Welle),  Biden Just Handed Afghanistan’s Mineral Wealth to China (Newsweek), China Eyes Afghanistan’s $1 Trillion of Minerals With Risky Bet on Taliban (Bloomberg) and so on.

All the one trillion dollar articles are derived from a breathless June 2010 New York Times front-page story and interview with General David H Petraeus during which the commander of US forces in Afghanistan referenced a US Dept of Defense “internal memo”. 

The story of how “the vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists” by the Pulitzer prize-winning journalist James Risen’s opens with a bang (emphasis added):   

“The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.”

“​​The previously unknown deposits including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.”

The tale of the $1 trillion treasure trove – which has more than a whiff of Indiana Jones about it as told by the New York Times – begins three years after the US invaded Afghanistan:

“In 2004, American geologists, sent to Afghanistan as part of a broader reconstruction effort, stumbled across an intriguing series of old charts and data at the library of the Afghan [sic] Geological Survey in Kabul that hinted at major mineral deposits in the country.”  

“Technoexport” 

At first the American geologists only found hints of these huge big veins, but “they soon learned that the data had been collected by Soviet mining experts during the Soviet occupation in the 1980s.”

How soon did the American geologists learn it was a Soviet study? Perhaps when they looked at the author page of the intriguing charts and data and saw this:

Abdullah, Sh., Chmyriov, V.M., Stazhilo-Alekseev, K.F, Dronov, V.I., Gannon, P.J., Lubemov, B.K., Kafarskiy, A.Kh. and Malyarov, E.P., 1977, Mineral resources of Afghanistan (2 ed.) 419 p. and Abdullah, Sh., Chmyriov, V.M. Map of mineral resources of Afghanistan V/O “Technoexport” USSR, scale: 1:500,000. 

Contrary to the article, it was two years before the Soviet army invaded (hmm… what did Breshnev know about Afghan minerals and when did he know it?) and it was done under the auspices of the United Nations Development Programme (AFG/74/12). 

Details. Let’s not get sidetracked. 

Risen, also the recipient of the 2015 Ridenhour Courage Prize, continues:  

“Armed with the old Russian charts, the United States Geological Survey began a series of aerial surveys of Afghanistan’s mineral resources in 2006 using advanced gravity and magnetic measuring equipment attached to an old Navy Orion P-3 aircraft that flew over about 70 percent of the country.”

The legend 

If you have such advanced tech (Shuttle Radar Topography Mission, SRTM, digital elevation model, DEM) why would you need Mineral resources of Afghanistan 2nd ed., and Technoexport? 

The reason is printed on the legend of the map the USGS produced after the SRTM DEM survey:

“The geologic and mineral resource information shown on this map is derived from digitization of the original data from Abdullah and Chmyriov (1977) and Abdullah and others (1977). 

“The classification of mineral deposit types is based on the authors’ interpretation of existing descriptive information (Abdullah and others, 1977) […] and on limited field investigations by the authors.”  

Promising before, astonishing ASTER

“The data from those flights was so promising that in 2007, the geologists returned for an even more sophisticated study” the article continues:

“The handful of American geologists who pored over the new data said the results were astonishing.”

This even more sophisticated study used Advanced Spaceborne Thermal Emission and Reflection Radiometer (ASTER) data from Nasa’s flagship Terra satellite and the astonishing results are summarized in the USGS-Afghanistan Ministry of Mines Joint Mineral Resource Assessment Team Preliminary Assessment of Non-Fuel Mineral Resources of Afghanistan prepared in cooperation with the Afghanistan Geological Survey under the auspices of the US Agency for International Development, October 2007. (Download here)

One can understand that the New York Times would not want to confuse readers with mining jargon but what the paper calls “untapped mineral deposits far beyond any previously known reserves” the USGS report defines as “mean expected values of quantitative probabilistic estimates of undiscovered deposits”. 

Close enough, it’s the New York Times.

Abdullah et al 

That said, there were some pretty mean expected values gleaned from the ASTER and SRTM DEM non-discoveries and the report (the full 810 page study – Open-File Report 2007–1214 available on 1 CD-ROM and 1 DVD – appears now to be off limits to the public) outlines 34 orebodies across 27 metals and minerals.

However, of the 34 deposits outlined in the three-page summary, only four were newly identified: mercury, potash, asbestos and rare earth. 

A further four were revised (upwards). 

That is, revised from Abdullah, Sh., Chmyriov and others. Mineral resources of Afghanistan (2 ed.) 1977. 

The 26 deposit estimates from the Soviet scientists were simply copied over and “further study recommended”. 

Astonished but ignored

At this point in the article Risen injects some tension into the story:

“The results gathered dust for two more years, ignored by officials in both the American and Afghan governments.” 

But the story doesn’t end in a dusty library in Kabul or the CD-ROM/DVD storeroom of the USGS: 

“In 2009, a Pentagon task force that had created business development programs in Iraq was transferred to Afghanistan, and came upon the geological data.”

“Until then, no one besides the geologists had bothered to look at the information and no one had sought to translate the technical data to measure the potential economic value of the mineral deposits.”

“Soon, the Pentagon business development task force brought in teams of American mining experts to validate the survey’s findings, and then briefed Defense Secretary Robert M. Gates and Mr. Karzai.”

In these three truly stupefying paragraphs Risen makes it sound that if it was not for the task force coming upon the data after they were transferred (no access to the USGS website from Iraq?) and more importantly, bothered, the world would never have found out about the value of Afghanistan’s mineral wealth.  

Send in the Excel cavalry 

The only reason the geologists – on who The New York Times heaps so much responsibility to give the article a patina of science – did not bother is because that’s not how mining works. 

Not that it’s much of a bother to multiply tonnes and ounces of “probabilistic estimates of undiscovered deposits” with prices. 

To the Abdullah et al copper deposits, the USGS report added 32 million contained tonnes (nice!) to bring overall Cu resources in the country to 60 million tonnes. That’s $453 billion right there at the average price for copper of $7,562/tonne in 2010. 

Some 600,000 tonnes of cobalt ($27 billion at 2010 prices) and 724,000 tonnes of molybdenum ($18 billion) were also put in the copper basket and the 27 million tonnes of potash would’ve fetched just under $10 billion at 2010’s average price.

Rare earth as seen from space 

The global trade in rare earths was before the WTO for arbitration in 2010 and not only were prices volatile (dysprosium went up 12-fold between 2008 and 2011), the 17 elements also trade at very different price points – samarium could be had for $3.40/kg in 2009 but europium would set you back $492/kg that year. 

That would have made it more difficult to assign a dollar value to the 1.4 million tonnes of rare earths as seen from space. Although the Pentagon task force probably found a way. 

The sulfur tonnage was upwardly adjusted to 5.5 million tonnes, but at a ruling price of some $50 a tonne it doesn’t really smell like money. Neither does the newly non-discovered graphite deposit – not too flaky at 1.05 million tonnes but worth only a billion in 2010. 

SRTM DEM and ASTER also zoomed in on 13.4 million tonnes of Afghan asbestos. Asbestos fibre remains a thriving global trade and if you need to get to 12 zeros you can’t just leave it in the ground. At ruling prices of around $1,500 a tonne, that’s $20 billion someone other than the Afghans would have to cough up. 

The world in a grain of sand   

Only 2.7 tonnes or 86,743 troy ounces of gold were identified in 1977. The USGS recommended further study of the primary gold deposits but did associate 682 tonnes gold ($26.8 billion at the average 2010 gold price of $1,226 per troy ounce) and 9,067 tonnes of silver ($5.9 billion) with the igneous copper deposits. 

If the gold non-discoveries seem like an underestimation consider that neither SRTM or ASTER  added to the 36 million cubic metres of sand in the Soviet data. Sand is the world’s number one mining endeavour as per Yale School of the Environment and prices have long been on an upward trajectory. 

Who knows? The task force probably found more sand, but the Pentagon would’ve realized the jokes write themselves if the New York Times article proclaimed that the US military –   ten years into the occupation – discovered vast reserves of sand in Afghanistan.

Don’t be fooled by the rocks that I got 

Afghanistan’s endowment of lead, zinc, tin, tungsten, barite, talc, lazurite, fluorite, halite and celestite et cetera were not estimated by the USGS, and since the task force data is secret, only the Pentagon could put a price on those. Whether the task force incorporated the 32,000 tonnes of hot spring mercury in the $1 trillion would also remain a mystery. 

Not that those treasures are needed – with iron ore 12 zeroes is more than doable. 

The 2007 study did not add rocks to the 2.438 billion tonnes Abdullah et al found thirty years earlier, it didn’t have to – 62% Fe ore was trading at $120 in 2010 putting a price of $292 billion on Afghan steelmaking stuff.

Lithium nirvana

The task force did find ways to warm up the Soviet studies, which likely ignored lithium because commercialisation of the lithium-ion battery only happened more than a decade later. The 2007 USGS report also glossed over the world’s softest metal.

But the Pentagon and the New York Times saw an opportunity to show Afghanistan’s potential in the age of the smart phone and the laptop computer:

“An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys.” (Blackberrys… chuckle – Ed.)

And the work was ongoing, according to the article:

“Just this month [June 2010], American geologists working with the Pentagon team have been conducting ground surveys on dry salt lakes in western Afghanistan where they believe there are large deposits of lithium. 

“Pentagon officials said that their initial analysis at one location in Ghazni Province showed the potential for lithium deposits as large of [sic] those of Bolivia, which now has the world’s largest known lithium reserves.”

Finding lithium (15th most abundant element, although scarcer than rare earth) in a dry salt lake as large as those of Bolivia which measures 10,000 square kilometres? Maybe the Pentagon team just got lucky. 

Besides if you calculate the value of lithium reserves the way the task force did – and how Elon Musk does it – Nevada also has as much of the battery metal as Afghanistan and Bolivia. 

Round up to the nearest trillion 

The transcript of a Pentagon press briefing a few days later is not accessible due to website maintenance, but contemporaneous reporting suggests the call did not add much besides clarifying that the $1 trillion was actually $908 billion, but then adding that “a lot of people think that is a conservative number”. 

Officials also assured reporters that the task force (Task Force for Business and Stability Operations to give its full name which was never mentioned in the article) just used the USGS as a reference point to conduct more “detailed field work” or as The New York Times described it:

“For the geologists who are now scouring some of the most remote stretches of Afghanistan to complete the technical studies necessary before the international bidding process is begun, there is a growing sense that they are in the midst of one of the great discoveries of their careers.”

What the detailed field work and scouring entailed is never stated and once again the geologists are required to do all the heavy lifting to get the article over the low bar of credibility Risen has set.

Whatever technical studies were completed were never considered in any international bidding process and the “growing sense” of career making discoveries Risen thought he detected among the geologists is, not to put too fine a point on it, growing nonsense.

Scientific boots on the ground 

The most well known copper deposit in Afghanistan is Mes Aynak, which translates to “little source of copper” in Pashto/Persian. Copper workings at Mes Aynak date back to the bronze age.

The scientists at the American Association for the Advancement of Science in Science magazine in 2014 in an article titled “Mother of all lodes” wrote that after the USGS and the Pentagon “put scientific boots on the ground“ in Afghanistan they found a “vivid panoply of nonferrous mineral formations”.

Of these, Mes Aynak is surely the vividest. 

Could Mes Aynak – which did go through a real world tender process – prove that the Pentagon was right all along and $1 trillion – a sum even quoted by the World Bank, responsible for drafting Afghanistan’s mining laws – is on the money?

After a bidding process that included Phelps Dodge (now part of Freeport McMoRan) and Canada’s Hunter Dickinson, state-owned Metallurgical Corporation of China and its minority partner Jiangxi Copper struck a $2.83 billion deal in 2007 for a 30-year lease at Mes Aynak. (Only $997,170,000,000 to go – Ed.) 

A stretch

The nine bidders, selected in November 2006, had to rely on a dusty copy of Akocdzhanyan et al., 1974 V/O “Technoexport” Contract 55-184/17500 translated from the Russian.  

In the tender information package about Mes Aynak compiled by the Afghanistan and British Geological Survey, the “systematic exploration” of the Soviet Geological Mission “Technoexport” is praised as “exceedingly thorough and well documented”. (Soviet geologist please let us know why it is called Technoexport – Ed.) 

The work “included the drilling of several hundred exploration, geotechnical and hydrogeological boreholes, nine underground adits, 70 trenches, and geophysical and topographic surveys.” It was also carried out over 13 years and the geologists only pulled out when the Soviet army did in 1989. 

That’s in contrast to the work of “a small team of Pentagon officials and American geologists”, who, according to New York Times’ timeline, were busy for only about a year before the article, and were working in the fields of 24 deposits scattered across the entire country. 

Whether the task force scouring the “remote stretches” of Afghanistan (Mes Aynak is only 30km (19mi) south of Kabul, btw) also included drillholes, trenches and adits is impossible to say. Rather than attracting international bidders and making careers, the Pentagon technical reports remain buried secrets. 

Non-refundable deposit   

The Mes Anyak deal was billed as the largest foreign investment in Afghanistan in its modern history. 

Perplexingly, this May 2008 press release from Jiangxi Copper put the figure paid to the Afghan government for the mining rights not at $2.83 billion but $808 million, a figure not quoted in any media story. 

There were also allegations that the then mines minister Mohammed Ibrahim Adel took some $30 million in bribes related to the tender. (It’s Afghanistan. Don’t get so hung up about missing dollars – Ed.)

The copper project, also the site of an ancient buddhist city, never got off the ground (neither has Hajigak iron ore, the only other deposit which had any prospect of becoming a mine). 

MCC blamed the costs of building a smelter, power plant and railway and the steep royalties for halting work. Mention of Mes Aynak disappeared from Jiangxi’s annual reports after 2013 wherein the company blamed the “relocation of historical relics” as the reason for the delay in the project.     

Now that the Taliban are in charge that could change – they do not exactly care for Buddhist statues.  

Sitting around in pajamas 

There was some criticism of the New York Times frontpage story at the time saying that it wasn’t the scoop it was made out to be because of Abdullah and others’ work in the 1970s the 2007 USGS study. Some questioned the timing of the article when the war was going badly in Afghanistan. 

Risen was irked by the skepticism telling Yahoo News “bloggers” who are “sitting around in their pajamas” instead of doing real reporting — shouldn’t “deconstruct other people’s stories.” (Go put some pants on – Ed.)

Dean Baquet, who edited the piece and was the Washington bureau chief for the New York Times then (now executive editor) said Risen “is the last person the government would try to get to carry their water,” attributed the criticism to sour grapes for not getting the story first, and that the Pentagon holding a briefing was proof of the article’s newsworthiness.

Task Force for BS Ops

The Task Force for Business and Stability Operations (Task Force for BS Ops) also came under scrutiny – albeit only in 2016 – in a 136 page report by the RAND Corporation titled Lessons from the Task Force for Business and Stability Operations in Afghanistan.

To their credit (and I don’t know how much credit, I only know that the US military, air force and Secretary of Defense stuffed $147.1 million in RAND’s coffers in 2020) RAND said the $908 billion “is notional only; it does not reflect the value of commercially exploitable deposits. Therefore, it is misleading.” (p.22)

It also fell to the think tank to address the biggest elephant in the room full of elephants that was the New York Times and Task Force for BS Ops stitch-up, and with admirable succinctness:

“Challenges impede the extraction of this natural wealth. Security concerns aside, most of the mineral rich provinces lack road, rail, or electric power infrastructure, and the nascent mining industry would have to compete with agriculture, an economic mainstay, and municipalities for limited water supplies.”

Let x = x

The manner in which the task force and its teams of mining experts calculated (tonnes x price = x,xxx,xxx,xxx,xxx) the $1 trillion value – or $3 trillion as successive mines & petroleum ministers, and President Karzai was fond of quoting – is not the biggest problem with the New York Times story. 

While the number has no real world meaning, it certainly attracts attention – by the paper’s own reporting it led to greater violence in Afghanistan. 

To focus only on non-fuel resources in the article also smacks of marketing. Afghanistan also has vast oil and reserves but “No war for oil” protesters had grown in ranks seven years into the Iraq occupation and trotting out a crude message would likely have misfired. 

$34,482.76 

That all US and most international media outlets continue to parrot the $1 trillion tale a decade later also makes its propaganda value clear.

How easily the Western armchair media swallowed the story is inexcusable, but the way Afghans were duped into believing in their country’s mineral wealth seems cruel. 

The New York Times followed up the big scoop a few days later with a piece headlined Afghan Officials Elated by Minerals Report

“As they waited to hear Mr. Karzai’s spokesman, some Afghan reporters excitedly calculated among themselves how much each Afghan would theoretically get if the mineral treasure trove were divided equally. 

“Assuming the $1 trillion valuation and Afghanistan’s population of 29 million, that would give each Afghan man, woman and child $34,482.76.”

If not in scope then in tenor, U.S. Identifies Vast Mineral Riches in Afghanistan was not dissimilar to the paper’s weapons of mass destruction coverage of a few years earlier. 

At least the New York Times has taken some responsibility for boosting the case for the Iraq invasion. 

But there’s been no such soul searching by the paper for cheerleading the extension of the US occupation of Afghanistan.