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Yahoo
21-05-2025
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Energy storage boom drives battery shift, leaving nickel, cobalt behind
By Eric Onstad LONDON (Reuters) -When Fidra Energy acquired a 55-acre (22-hectare) patch of northern England countryside in 2023, its plan to transform it into a 1.45 gigawatt energy storage facility - Europe's largest once completed - was far from a done deal. "We were struggling to make the economics work," Chris Elder, the Edinburgh-based company's CEO, told Reuters. But that was before the lithium iron phosphate (LFP) batteries being used in the project, which were already recording significant improvements in performance, roughly halved in cost in a period of just 18 months. Fidra now plans to start installing battery units for its 600-million pound ($800-million) Thorpe Marsh project next year. LFP batteries are fuelling a boom in energy storage projects that - in percentage terms - now outpaces electric vehicle sales growth. UBS bank estimates total storage capacity must grow eight-fold by the end of this decade and 34-fold by 2050 to keep up with the renewable power expansion. While EVs still dominate battery demand, energy storage will make up about a fifth of the market by 2030, according to a forecast by energy transition consultancy Rho Motion. Growth in the U.S. - the world's second-biggest energy storage market, still dependent upon Chinese imports - will face headwinds in the next few years due to tariff uncertainty, analysts say. But long-term growth is intact. That's good news for the renewables sector and should help national grids maintain balanced power supply as they transition to cleaner energy sources, avoiding the kind of massive blackout that briefly crippled Spain last month. The rapid uptake in the use of LFPs, which are much cheaper than traditional batteries and do not use cobalt and nickel, is sending shockwaves through the already depressed markets for those metals. "You've seen a truly monumental shift lower for nickel and cobalt in the intensity of commodity use in battery demand," said Martin Jackson at commodities consultancy CRU. NICKEL, COBALT IN DECLINE For years, analysts expected the battery sector would need huge amounts of nickel and cobalt for high-powered batteries allowing EVs to travel long distances between charges, a forecast that, for a time, sent their prices soaring. Anticipating a demand surge, production ramped up - particularly in top nickel miner Indonesia and leading cobalt exporter Democratic Republic of Congo. But a lack of affordable EV models and the slow roll-out of charging infrastructure have slowed EV uptake among consumers outside China, leading some carmakers to scale back their electrification plans. Benchmark nickel prices, burdened by oversupply, have halved over the past three years while cobalt has slumped by 60%. Global EV sales still grew 23% last year. But demand for storage batteries surged 51%, according to Rho Motion, and is on track to expand by 40% this year. Energy storage - crucial for the greener national power grids needed to meet governments' net-zero climate goals - is dominated by LFP batteries. They are also increasingly being used by Chinese EV makers - including BYD, which surpassed Tesla last year to become the world's biggest seller of EVs. As a result, the intensity of nickel use for batteries used in EVs, storage and consumer electronics batteries fell by almost a third over the four years to 2024 and by two-thirds for cobalt, according to data from CRU. The gathering pace of the shift to LFPs is likely to further weigh on prices for the two metals. Lithium, on the other hand, could get a boost. "The share of stationary storage within the battery demand picture is growing very significantly and is increasingly important for lithium players at a time of slower than anticipated EV demand," said Rho Motion's Iola Hughes. That has not translated into a firmer market so far, with oversupply helping push already weak lithium carbonate prices down a further 20% this year. BEYOND PRICE Yet price is not the only factor helping drive the LFP battery storage boom. Fidra's Elder said recent technological advances in LFP batteries mean that those being used at Thorpe Marsh will have a lifespan of 20 years, up from 10-15 years previously. And concerns over the carbon intensity of nickel production and rights issues related to cobalt mining in Congo are also propelling the shift, said Lars Christian Bacher, CEO of Norway's Morrow Batteries. "There are expectations on the battery suppliers and the traceability over where all of this comes from," he said. "Some of these minerals have historically been associated with ... countries that have some question marks related to human rights issues, child labour." Lithium is also facing increasing scrutiny over indigenous rights and environmental concerns in major producing countries Chile, Argentina and China, but the criticism has not garnered the same level of public attention as cobalt and nickel. Morrow, which will launch production in the second quarter, plans to manufacture 3 million cells - or one gigawatt hour of capacity - annually. Fully charged, that's roughly enough to power 1 million homes for an hour, according to the British government's energy regulator. Existing battery makers are also piling in. South Korea's LG Energy Solution is expanding its energy storage business to mitigate the impact of slowing EV demand in North America. It plans to stop making EV batteries containing nickel at one U.S. plant and repurpose it for LFP battery production, an industry source in Asia told Reuters. However, while U.S. President Donald Trump is pushing to break China's battery dominance, analysts expect the pivot to LFPs to only tighten its grip on the industry. Battery production in the United States does not meet demand, with 90% of its energy storage batteries imported from China. And ramping up U.S. energy storage capacity now faces the challenge of Washington's tariffs on Chinese battery imports - currently at 41% during the current 90-day trade war truce - with uncertainty over the levies likely to hit short-term demand, according to analysts. While Europe is also seeking to reduce its dependence on China, Fidra's Elder, whose Thorpe Marsh project uses batteries produced by China's Sungrow Power Supply, said governments would need to be practical. "If the (British) government wants to hit its net-zero targets for the UK, and I think it's pretty committed to doing that, it's going to have to work with China pragmatically," he said. 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Yahoo
01-05-2025
- Business
- Yahoo
Analysis-US, Ukraine may wait decade or more to see revenue from minerals deal
By Eric Onstad and Pavel Polityuk LONDON/KYIV (Reuters) -The financial payoff from a new minerals deal between Ukraine and the U.S. is likely to take a decade or longer as investors face many hurdles to getting new mines into production in the war-ravaged country. Developing mines that produce strategically important minerals in countries with established mining sectors such as Canada and Australia can take 10 to 20 years, mining consultants said on Thursday. But most mineral deposits in Ukraine have scant data to confirm they are economically viable. Investors may also baulk at funnelling money into a country where infrastructure such as power and transport has been devastated by Russia's three-year-old full-scale invasion and future security is not guaranteed. "If anyone's thinking suddenly all these minerals are going to be flying out of Ukraine, they're dreaming," said Adam Webb, head of minerals at consultancy Benchmark Minerals Intelligence. "The reality is it's going to be difficult for people to justify investing money there when there are options to invest in critical minerals in countries that are not at war." While the financial benefits from the deal are uncertain, officials in Ukraine hailed it as a political breakthrough: They believe it will help shore up U.S. support for Kyiv that has faltered under President Donald Trump. Ukraine needs U.S. support - especially weapons and cash - to withstand Russia's military invasion. On the U.S. side, Trump heavily promoted the deal, especially the access it provides to Ukraine's deposits of rare earth elements which are used in everything from cellphones to cars. So government policy could hasten investment. The U.S. does not produce significant amounts of rare earths and has ramped up a trade war with China, the world's top supplier. The text of the deal signed in Washington showed that revenues for the reconstruction fund would come from royalties, licence fees and production-sharing agreements. The text mentions no financial terms, saying that the two sides still have to hammer out a limited partnership agreement between the U.S. International Development Finance Corp and Ukraine's State Organization Agency on Support for Public-Private Partnership. The text details 55 minerals plus oil, natural gas and other hydrocarbons. According to Ukrainian data, the country has deposits of 22 of the 34 minerals identified by the European Union as critical, including rare earths, lithium and nickel. "The transition from a discovered resource to an economically viable reserve requires significant time and investment, both of which have been constrained, not only since the onset of the war but even prior to it," said Willis Thomas at consultancy CRU. Ukrainian finance ministry data showed that in 2024, the Ukrainian state earned 47.7 billion hryvnias, or around $1 billion, in royalties and other fees related to natural resources exploitation. But the joint fund created under the deal will only get revenue from new licences, permits and production-sharing agreements concluded after the accord comes into force. SLOW PACE OF MINING LICENSES Ukraine was slow to issue new natural resources licenses before Russia's 2022 full-scale invasion. From 2012 to 2020, about 20 licences were issued for oil and gas, one for graphite, one for gold, two for manganese and one for copper, according to the Ukrainian geological service. There are 3,482 existing licenses in total. Since the agreement creates a limited partnership, the two countries may be looking at direct government investment in a mining company, analysts said. Chile, the world's biggest copper producer and owner of state mining company Codelco, could be an example they follow, Webb said. Another hurdle is that some potentially lucrative projects are on land occupied by Russia, and the agreement does not include any security guarantees. Washington has said the presence of U.S. interests would deter aggressors. Seven of 24 potential mining projects identified by Benchmark are in Russian-occupied parts of Ukraine and include lithium, graphite, rare earth elements, nickel and manganese. An official of a small Ukrainian company that holds the licence for the Polokhivske lithium deposit, one of the largest in Europe, told Reuters in February it would be tough to develop without Western security guarantees. "The deal ties the U.S. more closely into Ukraine in that now they've got a bit more of a vested interest in this war coming to an end so that they can develop those assets," Webb said.
Yahoo
01-05-2025
- Business
- Yahoo
Analysis-US, Ukraine may wait decade or more to see revenue from minerals deal
By Eric Onstad and Pavel Polityuk LONDON/KYIV (Reuters) -The financial payoff from a new minerals deal between Ukraine and the U.S. is likely to take a decade or longer as investors face many hurdles to getting new mines into production in the war-ravaged country. Developing mines that produce strategically important minerals in countries with established mining sectors such as Canada and Australia can take 10 to 20 years, mining consultants said on Thursday. But most mineral deposits in Ukraine have scant data to confirm they are economically viable. Investors may also baulk at funnelling money into a country where infrastructure such as power and transport has been devastated by Russia's three-year-old full-scale invasion and future security is not guaranteed. "If anyone's thinking suddenly all these minerals are going to be flying out of Ukraine, they're dreaming," said Adam Webb, head of minerals at consultancy Benchmark Minerals Intelligence. "The reality is it's going to be difficult for people to justify investing money there when there are options to invest in critical minerals in countries that are not at war." While the financial benefits from the deal are uncertain, officials in Ukraine hailed it as a political breakthrough: They believe it will help shore up U.S. support for Kyiv that has faltered under President Donald Trump. Ukraine needs U.S. support - especially weapons and cash - to withstand Russia's military invasion. On the U.S. side, Trump heavily promoted the deal, especially the access it provides to Ukraine's deposits of rare earth elements which are used in everything from cellphones to cars. So government policy could hasten investment. The U.S. does not produce significant amounts of rare earths and has ramped up a trade war with China, the world's top supplier. The text of the deal signed in Washington showed that revenues for the reconstruction fund would come from royalties, licence fees and production-sharing agreements. The text mentions no financial terms, saying that the two sides still have to hammer out a limited partnership agreement between the U.S. International Development Finance Corp and Ukraine's State Organization Agency on Support for Public-Private Partnership. The text details 55 minerals plus oil, natural gas and other hydrocarbons. According to Ukrainian data, the country has deposits of 22 of the 34 minerals identified by the European Union as critical, including rare earths, lithium and nickel. "The transition from a discovered resource to an economically viable reserve requires significant time and investment, both of which have been constrained, not only since the onset of the war but even prior to it," said Willis Thomas at consultancy CRU. Ukrainian finance ministry data showed that in 2024, the Ukrainian state earned 47.7 billion hryvnias, or around $1 billion, in royalties and other fees related to natural resources exploitation. But the joint fund created under the deal will only get revenue from new licences, permits and production-sharing agreements concluded after the accord comes into force. SLOW PACE OF MINING LICENSES Ukraine was slow to issue new natural resources licenses before Russia's 2022 full-scale invasion. From 2012 to 2020, about 20 licences were issued for oil and gas, one for graphite, one for gold, two for manganese and one for copper, according to the Ukrainian geological service. There are 3,482 existing licenses in total. Since the agreement creates a limited partnership, the two countries may be looking at direct government investment in a mining company, analysts said. Chile, the world's biggest copper producer and owner of state mining company Codelco, could be an example they follow, Webb said. Another hurdle is that some potentially lucrative projects are on land occupied by Russia, and the agreement does not include any security guarantees. Washington has said the presence of U.S. interests would deter aggressors. Seven of 24 potential mining projects identified by Benchmark are in Russian-occupied parts of Ukraine and include lithium, graphite, rare earth elements, nickel and manganese. An official of a small Ukrainian company that holds the licence for the Polokhivske lithium deposit, one of the largest in Europe, told Reuters in February it would be tough to develop without Western security guarantees. "The deal ties the U.S. more closely into Ukraine in that now they've got a bit more of a vested interest in this war coming to an end so that they can develop those assets," Webb said. Sign in to access your portfolio
Yahoo
19-03-2025
- Business
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European steelmakers weigh in on EU Steel Action Plan
By Anna Peverieri and Eric Onstad (Reuters) - The European Commission announced on Wednesday an action plan to make Europe's ailing steel sector more competitive and to shield it from the impact of U.S. tariffs on imports of steel and aluminium, prompting reactions from major industrial actors, analysts, and think tanks. The Steel and Metals action plan, a key component of the EU's Clean Industrial Deal, aims at reviving its industries to stay competitive with Chinese and U.S. rivals. European steelmakers, which have long complained about cheap Chinese imports, are also warning about a possible flood of surplus steel into the region, as exports destined for the U.S. could be diverted to Europe due to U.S. tariffs. REACTIONS TO THE EU 'STEEL ACTION PLAN' STEELMAKER ARCELORMITTAL ( are encouraged by the direction outlined in the Steel and Metals Action plan, published today," said the group's CEO Aditya Mittal. "Details published in the Steel and Metals Action Plan show they understand the urgency of the situation and are ready to tackle some of the critical structural issues, including trade defence, loopholes in the Carbon Border Adjustment Mechanism, and the lack of regulation to drive demand for low-carbon steel. This now needs to be supported with rapid action that can put a stop to unfair trade, dumping and resource shuffling." "Additionally, it remains vital to tackle the high energy costs which make it very difficult for the industry to move forward with significant decarbonization projects.' GERMANY STEELMAKER THYSSENKRUPP STEEL EUROPE ( "The Steel Action Plan represents a groundbreaking step towards securing the competitiveness and decarbonization of the European steel industry." "Particularly noteworthy is the clear prioritization of trade protection, which is crucial for ensuring the competitiveness of the European steel industry." "In the face of global overcapacity and unfair trade practices, effective protection is essential to safeguard jobs and ensure a level playing field." LUXEMBOURG-BASED STEEL GROUP APERAM ( "Aperam strongly supports any initiative to introduce long-term measures that ensure robust protection for the EU's steel sector against the negative impacts of excess steel production from Asia once the current safeguard measures expire in June 2026." "The key point is how the European Commission will translate this high-level action plan into concrete legal measures: urgent action is needed and therefore proposed measures must be implemented swiftly and effectively." "In particular, as regards trade defense, we believe that concrete actions can and should be implemented already now, without awaiting the future post-safeguards instrument that would enter into force from July 2026." FINNISH STAINLESS STEELMAKER OUTOKUMPU ( "Outokumpu is pleased that the European Commission recognizes steel as one of Europe's key industries and is taking decisive actions to strengthen its competitiveness." "The Steel & Metals Action Plan clearly identifies the challenges that European steel industry faces, but still lacks solutions to some of the challenges." "The industry remains threatened by global excess capacities and by global distortions from China and other countries. [...] These challenges need to be mitigated with more assertive solutions including replacing current safeguards with more effective measures from July 2026", Outokumpu said. NORWEGIAN ALUMINIUM PRODUCER HYDRO ( increasing tariffs on aluminium, there is a risk Europe may become a dumping ground for aluminium producers looking for other markets. This could in turn lead to EU implementing safeguard measures for aluminium." "Norway produces approximately 40% of the aluminium needed in the EU, and is among the largest suppliers of a critical raw material for European industry." EUROPEAN STEEL ASSOCIATION EUROFER: "With today's Steel and Metals Action Plan, the European Commission is sending a clear message: a strong European Union needs a strong European steel industry", said Dr Henrik Adam, President of the European Steel Association (EUROFER). "From addressing unfair trade to closing loopholes in the Carbon Border Adjustment Mechanism to recognising the strategic and environmental value of steel scrap, the Action Plan identifies crucial areas for our sector. Now it's time to implement meaningful solutions through ambitious measures." "Despite the positive proposals from the Commission, energy remains the elephant in the room. High energy prices affect not only steel and metals production, but they are dragging down entire European industrial value chains. Further work to reduce energy costs is crucial." MAXIME KOGGE, ANALYST AT ODDO BHF: "After a disappointing outcome from the safeguard review published last week it is encouraging to see the EU goes further in tackling import pressure by introducing the melt and poured rule and committing to substitute the safeguard by another similar mechanism beyond 2026 despite the WTO rules theoretically prohibiting such a scheme. "The proposed changes to CBAM are also positive as the Commission seems intent to address the structural loopholes in the current mechanism." "However, the concrete actions will only be announced at a later stage in 2025 and implementation is largely in the hands of member states which may have other priorities in the current context."
Yahoo
19-03-2025
- Business
- Yahoo
European steelmakers weigh in on EU Steel Action Plan
By Anna Peverieri and Eric Onstad (Reuters) - The European Commission announced on Wednesday an action plan to make Europe's ailing steel sector more competitive and to shield it from the impact of U.S. tariffs on imports of steel and aluminium, prompting reactions from major industrial actors, analysts, and think tanks. The Steel and Metals action plan, a key component of the EU's Clean Industrial Deal, aims at reviving its industries to stay competitive with Chinese and U.S. rivals. European steelmakers, which have long complained about cheap Chinese imports, are also warning about a possible flood of surplus steel into the region, as exports destined for the U.S. could be diverted to Europe due to U.S. tariffs. REACTIONS TO THE EU 'STEEL ACTION PLAN' STEELMAKER ARCELORMITTAL:"We are encouraged by the direction outlined in the Steel and Metals Action plan, published today," said the group's CEO Aditya Mittal. "Details published in the Steel and Metals Action Plan show they understand the urgency of the situation and are ready to tackle some of the critical structural issues, including trade defence, loopholes in the Carbon Border Adjustment Mechanism, and the lack of regulation to drive demand for low-carbon steel. This now needs to be supported with rapid action that can put a stop to unfair trade, dumping and resource shuffling." "Additionally, it remains vital to tackle the high energy costs which make it very difficult for the industry to move forward with significant decarbonization projects.' GERMANY STEELMAKER THYSSENKRUPP STEEL EUROPE : "The Steel Action Plan represents a groundbreaking step towards securing the competitiveness and decarbonization of the European steel industry." "Particularly noteworthy is the clear prioritization of trade protection, which is crucial for ensuring the competitiveness of the European steel industry." "In the face of global overcapacity and unfair trade practices, effective protection is essential to safeguard jobs and ensure a level playing field." LUXEMBOURG-BASED STEEL GROUP APERAM: "Aperam strongly supports any initiative to introduce long-term measures that ensure robust protection for the EU's steel sector against the negative impacts of excess steel production from Asia once the current safeguard measures expire in June 2026." "The key point is how the European Commission will translate this high-level action plan into concrete legal measures: urgent action is needed and therefore proposed measures must be implemented swiftly and effectively." "In particular, as regards trade defense, we believe that concrete actions can and should be implemented already now, without awaiting the future post-safeguards instrument that would enter into force from July 2026." FINNISH STAINLESS STEELMAKER OUTOKUMPU: "Outokumpu is pleased that the European Commission recognizes steel as one of Europe's key industries and is taking decisive actions to strengthen its competitiveness." "The Steel & Metals Action Plan clearly identifies the challenges that European steel industry faces, but still lacks solutions to some of the challenges." "The industry remains threatened by global excess capacities and by global distortions from China and other countries. [...] These challenges need to be mitigated with more assertive solutions including replacing current safeguards with more effective measures from July 2026", Outokumpu said. NORWEGIAN ALUMINIUM PRODUCER HYDRO:"With increasing tariffs on aluminium, there is a risk Europe may become a dumping ground for aluminium producers looking for other markets. This could in turn lead to EU implementing safeguard measures for aluminium." "Norway produces approximately 40% of the aluminium needed in the EU, and is among the largest suppliers of a critical raw material for European industry." EUROPEAN STEEL ASSOCIATION EUROFER: "With today's Steel and Metals Action Plan, the European Commission is sending a clear message: a strong European Union needs a strong European steel industry", said Dr Henrik Adam, President of the European Steel Association (EUROFER). "From addressing unfair trade to closing loopholes in the Carbon Border Adjustment Mechanism to recognising the strategic and environmental value of steel scrap, the Action Plan identifies crucial areas for our sector. Now it's time to implement meaningful solutions through ambitious measures." "Despite the positive proposals from the Commission, energy remains the elephant in the room. High energy prices affect not only steel and metals production, but they are dragging down entire European industrial value chains. Further work to reduce energy costs is crucial." MAXIME KOGGE, ANALYST AT ODDO BHF: "After a disappointing outcome from the safeguard review published last week it is encouraging to see the EU goes further in tackling import pressure by introducing the melt and poured rule and committing to substitute the safeguard by another similar mechanism beyond 2026 despite the WTO rules theoretically prohibiting such a scheme. "The proposed changes to CBAM are also positive as the Commission seems intent to address the structural loopholes in the current mechanism." "However, the concrete actions will only be announced at a later stage in 2025 and implementation is largely in the hands of member states which may have other priorities in the current context." Sign in to access your portfolio
