Energy & Resources Talking Points | 07/09/2017

In today’s talking points: Electric cars and the future of nickel and copper for Australian Miners; Commercial production of combustible ice on the horizon; CEFC China may invest in Russian oil giant Rosneft; New Development Bank loans RMB 5 billion for three Chinese green energy projects.

Electric cars and the future of nickel and copper for Australian Miners

A renaissance of Nickel and copper prices to its highest level in recent years has become the latest blessing for the Australian mining industry. Already strong demand, plus expected boost to demand from to the swiftly growing electric vehicles market, as well as a weaker US dollar have pushed the prices of both minerals up.

The ranks of core nickel miners in Australia remain lonesome, with Western Areas being the only core nickel miner listed on the ASX at this time. However rising prices could see idled nickel mines from Panoramic Resources and Mincor Resources coming back online.

A UBS study has found that newly built electric cars such as the Chevrolet Bolt contain substantially higher copper, nickel and cobalt than conventional cars, while shortage of cobalt could potentially be substituted with more nickel. This could signal further rises in the price of nickel.

Read more at: The Australian Business Review


Commercial production of combustible ice on the horizon

The mining of gas hydrate by China in the South China Sea is becoming increasingly successful, with implications comparable to that of the shale gas “revolution” happening in the United States. Gas hydrate, or combustible ice, is some 15 years away from commercial use. However, there is estimated to be around 100 billion metric tons in the Tibetan-Qinghai Plateau and the seas around China.

When combusted, one cubic meter of the hydrate can release about 160 cubic meters of gas, which would emit only half the amount of carbon dioxide produced by oil or coal, suggesting a potential breakthrough in the energy sector.

Successful trials in the recent years have caused estimations for commercial production to begin from 2030.

Read more at: China Daily


CEFC China may invest in Russian oil giant Rosneft

CEFC China is in talks to invest in Rosneft in a deal which could be announced as early as this week, according to an anonymous source. CEFC China and Rosneft had previously signed a strategic cooperation agreement in July, with discussions held regarding exploration, production, refinement, investment and trade. This cooperation is against the backdrop of continuing tensions between Russia and the west, with sanctions placed on Russian firms further facilitating a growing corporate relationship between China and Russia centred on cross-border energy deals.

Read more at: Financial Times


New Development Bank loans RMB 5 billion for three Chinese green energy projects

The New Development Bank (NDB) has recently signed loan agreements to fund three projects in Fujian, Jiangxi and Hunan, together worth over RMB 5 billion. The 250MW Fujian Putian Pinghai Bay offshore windpower project (RMB 2 billion) will generate 873,000kWh of electricity annually for the province, while the Jiangxi Industrial low-carbon restructuring and green development pilot projects (RMB 1.3 billion) will encourage energy conservation, resource recycling and pollutant reduction. The Ecological Development project in Hunan (RMB 2 billion) will improve flood control in the province’s Xiang River basin.

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