Business

Wildcat gold mining in Death Valley threatens to contaminate its alluvial sands with cyanide open pits; native tribes mount opposition

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A BLM-approved mine operating nonstop as an open pit on the mesas above the Lone Pine community of the Paiute Shoshone Tribe would leach gold from heaps of crushed ore using tons of cyanide each day in the process, according to a description of Vancouver, Canada-based K2 Gold Group’s outline of the project by the LA Times. The company has been drilling eastern flanks of the Sierra Nevada range, seeking results that would excite investors and make the plans a reality.

However, “K2 is in for a hell of a fight,” says Bryan Hatchell, a desert policy associate with one of the non-profits that have lined up a resolute coalition of environmentalists and tribal nations opposing the project that include the Sierra Club, Friends of the Inyo, the Center for Biological Diversity, the Lone Pine Paiute Shoshone Tribe and the Timbisha Shoshone Tribe. “Mining here is off the table,” said Hatchell.

Opponents say they are concerned about destruction of historic remains and Native American cultural sites as well as impact on wildlife and the environment.

By Milan Sime Martinic

Turkish currency dips as much as 17% in Monday trading on diverging views on interest rates

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Financial markets reacted to the firing of the country’s respected Central Bank chief by running away from the Lira on early Monday trading, and the currency was near its all-time low against the dollar, slicing through key resistance levels.

President Recep Tayyip Erdoğan holds that high interest rates cause inflation, whereas the Quantity Theory of money that led fired governor Naci Agbal to raise interest rates - a fundamental of inflation control around the world -  holds that a growing money supply, which is increased by lower rates, increases inflation.

By Milan Sime Martinic

Merger to create first Canada-US-Mexico railroad

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A $29billion purchase of Kansas City Southern, KCS, by Canadian Pacific Railway Ltd., CP, will create a new entity called Canadian Pacific Kansas City and the first rail network connecting the three countries from Vancouver to Veracruz.

“Joining seamlessly in Kansas City, Mo., in America’s heartland, CP and KCS together will connect customers via single-network transportation offerings between points on CP’s system throughout Canada, the U.S. Midwest, and the U.S. Northeast and points on KCS’ system throughout Mexico and the South Central U.S.,” said CP and KCS in a joint statement announcing the acquisition.

By Milan Sime Martinic

Latin American projected GDP growth held back by Brazilian problems

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Projected Gross Domestic Product growth for Latin America and the Caribbean is put at 3.2% for 2021-2023, according to projections of the Inter-American Development Bank, while Brazil’s expected growth is 2.7%. When Brazil is excluded, projected growth for the Southern Cone countries–Argentina, Chile, Paraguay, and Uruguay –is 3.5%.

“Brazil has significant challenges –it needs to enact a set of pro-growth reforms, as well as adopt a fiscal policy that maintains confidence and ensures fiscal sustainability, stabilizes rising public sector debt, and gradually reduces debt levels,” said IDB’s Chief Economic Adviser Andrew Powell, speaking about the lackluster expectations for Latin America’s largest country.

By Milan Sime Martinic

Brazil becomes first country in Latin America to approve a cryptocoin-based EFT

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SAO PAOLO, Brazil – The Comissão de Valores Mobiliários do Brasil has approved blockchain investment EFTs to trade the Sao Paulo-based B3 exchange. The move follows the approval of 3 similar funds in Canada in the last months. Rio-based QR Asset Management will make its first offering of $100m for qualified investors in June.

By Milan Sime Martinic

Prices of cars double in Argentina in just 2 years

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The Association of Automotive Dealerships in Argentina (ACARA) reported that their survey shows that the amount of money needed to buy a car has almost doubled, projecting an increase of 80% over 2018 prices by the end of 2021.

ACARA says inflation, wage delays, and rising prices for new cars make it difficult for car buyers in the country. A comparable VW costs 30% more in Argentina than it does in next-door Brazil.

By Milan Sime Martinic

British trade with the EU has collapsed

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In the first month after Brexit, Great Britain posted heavy foreign trade losses, collapsing by 41% in exports to the EU in January, coupled by a loss of 29% in imports. According to the British Statistical Authority, the foreign trade numbers are dramatically bad as the transition is problematic for many companies trading with the economic zone. It cited the export of fresh food such as fish to the EU which fell by two thirds in January. The new bureaucracy and the regulations brought about by Brexit are complex for many fishermen, noted the authority.

By Milan Sime Martinic

Swiss frank is no longer in demand and no longer the central player on the currency markets

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Flailing under pressure from the outsize economic influence of the US and EU in moving markets, the CHF’s role as a safe heaven is in much less demand, leaving it out of many major currency transactions, according to foreign exchange analysts.

The CHF has been losing favor with investors for some time as the global economic situation has increased a willingness to take risks lowering demand and driving a continued weakening against both the euro and the dollar that has reached levels vis-à-vis both currencies not seen since 2019 and during peaks in 2020.

By Milan Sime Martinic

 

Curbing planned obsolescence: March brings new rules to EU that will make electronics last longer, easier to repair

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Consumers in the 27-nation bloc now will have the right to expect that their consumer electronics will have parts available and be able to be repaired for up to 10 years. New rules take effect this month following legislation passed last November by the European Parliament aiming to reduce electronic waste, monitor energy use, and protect consumers means.

“To be sustainable, products must be repairable, so that they can remain on the market for as long as possible. It is time to stamp out practices which prevent or hinder product repairs,” says the legislation in addressing premature obsolescence.

Europeans can now rely on their Ecological Design Directive’s “Right to Repair Rules” that require manufacturers include repair manuals with their products, and that standard tools can be used for repair and dismantling, including easier battery replacement and easier recycling. The directive also requires consumers have easier access to how much electricity household devices consume.

By Milan Sime Martinic

Brazilian rainforest land for sale on Facebook’s Marketplace

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Plots as large as 2000 acres are being sold on the hyperlocal Marketplace section of the platform.

The Bolsonaro administration has taken criticism for looking the other way on encroachment into protected areas and deforestation, and indigenous groups have told the BBC that it is unwilling to stop these sales. “A common strategy is to deforest the land and then plead with politicians to abolish its protected status, on the basis it no longer serves its original purpose,” said the BBC report.

Illegal deforestation for timber often clears the land for cattle grazing, increasing its value as much as three-fold, and the practice is creating a growing land rush investment opportunity with Marketplace as its platform.

Facebook, for its part, says that its policies require users to follow the law, and reportedly said it is “willing to work with authorities,” but that it would not take unilateral action to take down the ads.

By Milan Sime Martinic

Commodity demand growth will go up, due to low-income households and green energy – Goldman Sachs

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Global head of commodities research at Goldman, Jeff Currie, stated his position on the future of the sector this week, citing two big factors why commodities would continue to go up.

One was that while historically stimulus benefited high-income households, current stimulus benefits low-income, who spend a lot more on commodities.

The second factor was the future prospects of oil. Because oil will be less in demand in the future, companies won’t be investing in bringing more oil to the market, even if oil prices rise.

Demand growth for oil, Currie said, would start to slow in 2024-2025 and after 2030 would decline. “What that means, the stimulus effect of all this green spending actually amplifies oil demand,” Curry posited, but, “If we know we have a blueprint for energy transition in the U.S., Europe and China, and the clock is ticking on oil, are you going to invest in long-lived oil production? The answer is ‘no.’ So the only thing you’re going to invest in is short cycle production in the U.S., Middle East and Russia. Everything else is too risky to make investments. The hurdle rate to get investment in this sector is substantially higher than what it was historically.”

Currie saw some potential inflation risk accompanying the demand-pull factors that are driving commodity prices. Commodities prices increases, he said, are in part due to the hedging of bond-holding portfolio managers dealing with inflation possibly creeping up into the 2% range.

By Sid Douglas

There is now a blueprint for energy transition in the US, Europe, and China

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Something that didn’t exist eight weeks ago.

With U.S. President Joe Biden rejoining 190 other countries in the Paris Climate Agreement, basically all countries on Earth are participating in a unified movement to combat global warming.

Under the agreement the U.S. plans to cut carbon emissions 25% from it’s 2005 levels by 2025 and contribute $3b to the cause. The U.S. is the world’s second biggest polluter after China, which last October announced a net-zero target for 2060. The EU is aiming at climate neutrality by 2050.

Biden’s election, as well as the stated goals of other world powers, have caused green energy companies to see significantly increased investment over the past months, a trend investors see continuing.

Global Sachs head of commodities research, Jeff Currie, spoke on the subject this week and said Goldman believed the green capex is going to be worth around $16t over the next decade. He compared that figure with the $10t China spent on green capex in its boom 2000’s, which in real terms is about the same amount.

By Sid Douglas