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Automakers rush in where miners fear to tread



The race for electric vehicle (EV) battery metals is heating up.

Automakers can’t go green without having sufficient quantities of the lithium, nickel and cobalt that make the batteries work.

Fear of missing out, quite literally, is generating an industry-wide shift to investing directly in the mining sector to ensure future supplies of the battery inputs.

General Motors Co has announced a $650-million investment in Lithium Americas Corp to help fund development of the Thacker Pass project in Nevada.


GM gets exclusive rights to 40,000 tonnes per year of lithium from a domestic mine, which is key to qualifying for the EV subsidies available under the Inflation Reduction Act.

Carmakers have already been busy tying up supplies of battery metals under direct off-take agreements with existing metals producers.

Now they are getting into the business of actually digging the mines, or at least helping with the finance.

The investment rush has until now largely played out in the lithium sector but French-Italian carmaker Stellantis has just pivoted into copper with an investment in an Argentinian project.


Stellantis, the third largest automotive group by sales, will pay $155 million for a 14.2% stake in McEwen Copper, a subsidiary of Canada’s McEwen Mining, which owns the Los Azules project in Argentina.

The deposit, ranked in the top 10 global undeveloped copper resources by Mining Intelligence, is expected to yield 100,000 tonnes per year of refined cathode from its anticipated start date in 2027.

The automaker’s investment comes with an option to purchase the mine’s output at a ratio equivalent to its equity ownership.

With the help of existing shareholder Nuton, a subsidiary of Rio Tinto, and its copper leaching technology, McEwen is aiming to make the mine carbon-neutral by 2038, adding to the project’s green credentials.

Copper is an often forgotten component of EV batteries, but it plays a critical role as a current collector. All battery chemistries require copper, albeit to varying degrees. Lithium-iron-phosphate batteries, a burgeoning part of the EV market, need around 50% more copper than nickel-manganese-cobalt, according to the International Energy Agency (IEA).

Outside of the battery pack copper is also used in the electric motor, the busbar and in what can be up to a mile of internal wiring.

The amount of copper used in a typical battery electric vehicle is 83 kilograms, compared with just 23 kilograms in an internal combustion vehicle, according to the International Copper Association.


Stellantis’ leap upstream in the copper processing chain follows similar deals with Germany’s Vulcan Energy for lithium and Australia’s Element 25 for manganese.

The copper investment has the same strategic rationale, one of “ensuring strategic supplies of raw materials necessary for the success of the Company’s global electrification plans”, to quote Stellantis.

Automakers’ collective move into the mining sector has so far largely prioritized the lithium sector, where Western companies have been playing catch-up with Chinese investors.

Lithium supply is struggling to scale up at the speed required to meet accelerating demand from battery-makers. Even with a recent pullback in the spot Chinese market, the price of lithium carbonate has risen seven-fold since the start of 2021.

Where lithium is today, copper could be tomorrow, if you believe Glencore, which has warned of a cumulative shortfall of 50 million tonnes by 2030 under the IEA’s net zero emissions pathway.

Imminent shortfall has been part and parcel of the copper narrative for many years, largely due to poor visibility on future project time-lines.

However, this time could be different given the sector’s chronic under-investment in new mine capacity. Producers have been collectively scarred by the experience of the 2000s, when they spent heavily on new mines only to see the copper price slide steadily lower over the first half of the 2010s.

Capital expenditure in the sector slumped, miners opting to return cash to shareholders rather than dig more big copper mines. It hasn’t recovered despite the pick-up in the copper price from a cycle low of $4,318 per tonne in 2016 to $9,000.

Current guidance “points toward 34% less growth capex deployed in nominal terms between 2022-2026 than was deployed over the same time frame during the early-mid 2000′s,” according to Goldman Sachs.

If copper producers remain too wary of investing in future supply growth, automotive capital may be the answer. It is already a key enabler in the build-out of lithium, nickel and manganese production capacity.


The automotive sector is driving back to the future, the new rush to take control of supply chains an echo of Henry Ford, who famously bought iron and steel operations to supply the iconic River Rouge complex in Dearborn, Michigan.

Ford’s ambition to own the full automotive supply chain from mine to product was driven by the raw material shortages created by the first world war.

The company’s modern-day successors are faced with the same raw materials shortfall across the battery metals spectrum. If they could have sourced their metals using their favoured horizontal supply chain model, they would have done.

But so intense is the competition for battery metals and so entrenched the dominant Chinese operators that Western automotive companies have little choice but to invest directly in the next generation of supply projects.

However, the move upstream comes with plenty of potential pitfalls.

Greenfield mines have a history of running late and over budget, particularly when they are experimenting with new processing technology such as is being deployed at many lithium projects.

It’s worth remembering that Henry Ford’s vertical integration model wasn’t always successful.

The Brazilian rubber plantations, intended to supply latex for tire production, were plagued by poor yields and bad relations with the local workforce. It didn’t help that Ford initially insisted on a Midwestern diet and participation in events such as square-dancing.

However, even after the rules were relaxed and the operations transferred to a more promising site, Ford’s Brazilian dreams were overtaken by the invention of synthetic rubber.

Ford ended up selling the assets back to the Brazilian government for just $250,000 without having achieved a commercially viable operation.

It’s a useful reminder that going upstream can be a high-risk business for even the biggest automotive companies.


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Exclusive-Credit Suisse tells staff plans for investment banking to be informed later -memo – Yahoo Canada Finance



By Engen Tham and Julie Zhu

SHANGHAI/HONG KONG (Reuters) -Credit Suisse told staff its wealth assets are operationally separate from UBS for now, but once they merged clients might want to consider moving some assets to another bank if concentration was a concern, according to an internal memo.

The memo, dated Sunday and seen by Reuters, gave talking points to Credit Suisse staff for client conversations after a historic Swiss-backed acquisition of the troubled bank by UBS Group.


“For now, assets are still legally separated. Once that changes, you (clients) may of course want to consider moving some of your assets to another bank if concentration is a concern,” the memo said.

That response was suggested to Credit Suisse staff if they were asked by clients what they should do if they were also a UBS client and wanted to avoid too much asset concentration, which can be a concern for wealthy customers.

In a package orchestrated by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses.

UBS will become the undisputed global leader in managing money for the wealthy through the takeover of its main rival, triggering some concerns about concentration risks for clients.

Credit Suisse also told staff to inform clients that plans for its investment banking business will be communicated in due course as details of its acquisition by UBS were still being worked out, according to the memo.

“We do not expect there to be any disruption to client services. We are fully focused on ensuring a smooth transition and seamless experience for our valued clients and customers,” a Credit Suisse spokesperson said.

Credit Suisse is also going ahead with its annual Asia Investment Conference in Hong Kong, starting on Tuesday, the spokesperson said, adding the event, however, would now be closed to media.

In a separate memo on Sunday, the bank told employees that its day-to-day operations were unaffected after it agreed to the UBS takeover.

“Our branches and our global offices will remain open, and all colleagues are expected to and should continue to come to work,” Credit Suisse said in the memo sent globally and seen by Reuters.

Reuters reported on Friday, citing sources, that a number of major banks including Societe Generale SA and Deutsche Bank AG were restricting new trades involving Credit Suisse or its securities.

Regarding counterparties having stopped business with Credit Suisse, the bank said in the client talking points memo that it believed the transaction “will help to restore confidence to the financial markets more broadly.”

Market players remain concerned about the next moves at Credit Suisse and the impact on employees, investors and clients.

UBS Chairman Colm Kelleher told a media conference that it would wind down Credit Suisse’s investment bank, which has thousands of employees worldwide. UBS said it expected annual cost savings of some $7 billion by 2027.

(Reporting by Engen Tham in Shgnghai and Julie Zhu in Hong Kong; Additional reporting by Scott Murdoch in Sydney; Editing by Sumeet Chatterjee, Himani Sarkar and Jamie Freed)

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Enbridge: Investment Grade Company Offering 7.6% Bond (NYSE:ENB)



Mongkol Onnuan

Author’s note: All financial data in this article is presented in Canadian dollars.

Enbridge Inc. (NYSE:ENB), a North American energy transportation and distribution giant is currently finding itself near a 52-week low. Income investors may see the rising

Enbridge 2083 Bond Data


Enbridge Statement of Earnings

SEC 10-K

Enbridge Balance Sheet

SEC 10-K

Enbridge Cash Flow Statement

SEC 10-K

Enbridge Cash Flow Statement

SEC 10-K

An Enbridge Preferred Share Price Quote

Seeking Alpha

Enbridge Debt Maturities

SEC 10-K

Enbridge Liquidity

SEC 10-K

Enbridge Notes Automatic Conversion Covenant

2083 Notes 424B Filing


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Warren Buffett May Invest in Regional Banks



The U.S. has reportedly turned to Warren Buffett once more for help in a financial crisis.

The billionaire investor offered lifelines to Goldman Sachs in 2008 following the collapse of Lehman Brothers, and to Bank of America in 2011.

Now, Buffett has been in contact with the White House amid this year’s regional banking crisis, offering advice and guidance but also discussing an investment in the sector, Bloomberg News reported Sunday (March 19), citing unnamed sources.

Federal officials have sought to reassure the public over the past week after two high-profile banking failures: the collapse of Silicon Valley Bank on March 10, followed by the failure of Signature Bank two days later.


In a speech March 13, President Joe Biden told Americans they “can rest assured our banking system is safe. Your deposits are safe.”

That hasn’t kept politicians from both sides of the aisle for proposing tougher action against the banking sector. In that same speech, Biden called for a “full accounting” of what led to the two bank failures.

Later in the week, the top Republican and Democrat on the House Financial Services Committee said they’d scheduled a hearing for later this month to question top officials from the Federal Reserve and Federal Deposit Insurance Corp.

“The House Financial Services Committee is committed to getting to the bottom of the failures of Silicon Valley Bank and Signature Bank,” Republican Patrick McHenry and Democrat Maxine Waters said in a news release. “This hearing will allow us to begin to understand why and how these banks failed.”

Worries about the industry continued late into the week, with a group of 11 large banks banding together to help another regional bank — First Republic of California — with a $30 billion injection.

“Last weekend felt like the wild, wild West,” Charlie Youakim, CEO of payments startup Sezzle, told PYMNTS CEO Karen Webster soon after the SVB failure. “SVB had been around forever, they had a great brand. [Its collapse] is a big shock to me.

Now, he added, there’s a conversation happening across the ecosystem about the future of banking, as they begin to be more diligent about where they keep their money.

“We’ve got a board meeting later this week to go over the set of banks that [Sezzle] works with,” said Youakim. “We’re putting together a report of what these banks look like, their financial stability … because it’s not the case anymore that you can just trust your bank, trust that your money will be safe.”


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