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Category: News

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“Mr. Xi…I’m ready for my close-up!”

New images that were reportedly taken on February 3, 2023 of the Chinese spy balloon that threw the nation into a frenzy have been released by the United States Department of Defense.

The images were from when the balloon was flying at 60,000 over the American Midwest, according to Breaking 911. They were captured by a U.S. U-2 spy plane that was trailing the balloon across the country, the report says.

The report says the balloon’s payload – consisting of reconnaissance sensors, antennae, and solar power panels – can be seen the photo, along with the shadow of the U-2 plane that was following it.

Recall, last week we wrote about how Republican senators had “raised concerns that U.S. manufacturing might have assisted in the construction of the Chinese spy balloon…”.

The Epoch Times noted that Sens. Josh Hawley (R-Mo.) and Dan Sullivan (R-Alaska) took part in an all-senators classified briefing on Feb. 9, held by officials from the Office of the Director of National Intelligence, the Pentagon, and the State Department. The agencies held a separate classified briefing for House lawmakers on the same day.

After the briefing, Sullivan told reporters that the question of whether American companies helped build the Chinese balloon was raised, but officials didn’t provide a conclusive response.

 

As we reported last week, the balloon was eventually shot down over the Atlantic on February 5, 2023. A US F-22 stealth jet was responsible for downing it off the Carolina coast.

The recovery mission of the balloon is ongoing and little new information about what it contained has been released over the past week. Several U.S. Navy and Coast Guard vessels established a security perimeter where the balloon hit the water, about six nautical miles off the coast of South Carolina, The Epoch Times reported the day after it was shot down.

 

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The post New Hi-Res Images Of Chinese Spy Balloon Released appeared first on Energy News Beat.

 

Thomas H. Lee, the billionaire who pioneered the private-equity industry and leveraged buyouts through a firm that bore his name, has died of a self-inflicted gunshot wound at his Manhattan office on Thursday morning, police sources told the NY Post. He was 78.

Thomas H. Lee, 78; Credit: Bloomberg via Getty Images

Cops responded to a 911 call at 767 Fifth Avenue, where Thomas H. Lee Capital, LLC is located on the sixth floor, at around 11:10 a.m., the Post sources said adding that EMTs pronounced the 78-year-old businessman dead at the scene.

“The family is extremely saddened by Tom’s death. While the world knew him as one of the pioneers in the private equity business and a successful businessman, we knew him as a devoted husband, father, grandfather, sibling, friend and philanthropist who always put others’ needs before his own,” Lee spokesperson Michael Sitrick said in a statement. “Our hearts are broken. We ask that our privacy be respected and that we be allowed to grieve.”

The Office of the Chief Medical Examiner will determine the official cause of death.

A front desk worker at Lee’s office building was told there was an “emergency,” on the sixth floor, but was unaware of Lee’s death. “They don’t want anyone going to that space right now, not even the building staff,” the man said.

Lee ran Boston-based Thomas H. Lee Partners from 1974 until 2006, when the firm had $12 billion to invest after producing triple-digit returns on some of its deals. Lee quit and formed New York-based Lee Equity Partners, which created funds that focused on smaller deals for fast-growing companies.

Through both firms, Lee invested more than $15 billion in hundreds of transactions as of 2020. That included his best-known transaction, the 1992 purchase of Snapple Beverage Corp. After his firm bought Snapple for $135 million, investing only $28 million of its own money, Lee sold it to Quaker Oats Co. for $1.7 billion two years later after boosting revenue from $95 million a year to $750 million, Bloomberg reports.

His Snapple return on equity was 334% after his firm took out $927 million from the sale, according to a 1997 Forbes profile. With profits like that, by 2022, Lee was worth $2 billion, according to Forbes.

There were some notable mistakes along the way: besides a $500 million investment in 1999 in insurer Conseco which soured after the company sought bankruptcy protection three years later, Lee’s firm was also rattled by its $507 million investment in Refco, the futures and commodities brokerage firm. Refco filed for bankruptcy protection after it disclosed in 2005 that its chief executive had hidden $430 million in debt for years. In 1999, Lee led a deal for what would become Vertis Communications, the fifth largest North American printer. Vertis filed for bankruptcy in 2008.

Lee was often seen chewing a cigar around the office, and he sometimes drew comparisons to the fictional private-equity banker Thomas Crown portrayed in the 1999 movie “The Thomas Crown Affair,” Businessweek reported in 2005.

An avid art collector, Lee owned works by artists including Willem de Kooning and Jackson Pollock and was a trustee of Lincoln Center and the Museum of Modern Art, according to Forbes.

“I’ve been lucky to make some money. I’m more than happy to give some of it back,” Lee said in 1996 after donating $22 million to his alma mater Harvard University, one of the school’s largest gifts ever from a living alumnus.

Lee leaves behind his wife of 27 years, Ann Tennenbaum. He is survived by his children Jesse, Zach, Nathan, Robbie, and Rosalie, as well as two grandchildren.

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The post Billionaire Private Equity Financier Thomas H. Lee Dies Of Self-Inflicted Gunshot Wound appeared first on Energy News Beat.

 

It has become impossible to be an economist or data-watcher (and thus strategist, investor, pundit or analyst) in the US: the reason is that seasonal adjustments have made virtually every data set a load of garbage, with little relevance to the real world.

Consider the latest nonfarm payroll number, where the seasonally adjusted print came at a shocking 517K, but only thanks to a near record seasonal adjustment factor which transformed a 2.5 million decline into a blowout gain which had a profound impact on market – and Fed psychology.

 

Or what about the latest retail sales, which also shocked to the upside, but only after generous seasonal adjustments – which are based on just some excel modeling (and a few political taps on the shoulder) converted the traditionally weak January into a blowout month.

 

It’s not just plain vanilla economic data: it now appears that arbitrary – and massive – seasonal adjustments are also hitting the weekly DOE oil inventory report: the past two weeks, when we saw near record inventory builds, were nothing more than the figment of some excel spreadsheet’s imagination because as the chart below shows, that’s when the DOE Crude Oil supply “adjustment” factor was one of the highest on record.

 

Which brings us to today’s weekly initial jobless claims report, which once again surprised to the downside, and despite wave after wave of mass layoffs (and severance), it magically dropped to four-week lows, once again underscoring just how “wonderful” Biden’s economic policies are as they translate into such a great labor market.

 

Which of course is horseshit only this time, it’s not zero hedge, or even UBS, but the largest US bank that is calling the bullshit on the increasingly ridiculous, politicized GIGO that comes out of the admin.

In a note from JPM’s Dan Silver, the bank’s economist points to the stubbornly, laughably low initial jobless claims, especially when considering directly tabulated reports of layoffs which in January just hit a multiyear high (according to Layoffs.fyi)…

 

… and politely says that “some alternative seasonal adjustments of the initial claims data show some less favorable changes in filings from recent weeks than the official figures.”

 

Here, JPM is merely echoing Goldman, which several weeks ago also found that initial claims are unrealistic, and that when looking at credible, state-level WARN mass layoff notices initial claims are far higher.

 

It’s not just JPM and Goldman, however: three weeks ago, UBS also joined the fray, and showed that yet another data series – Job Openings – is either intentionally or accidentally inflated, and that when look at third party data, the real number of job openings is about a third of what the monthly JOLTS report indicates.

 

What is especially funny is that banks no longer merely observe how the data no longer fits, but are making it into a type of personal crusade to expose the grotesque levels of BS emanating from the Biden admin. Case in point, another UBS economist just a few days ago published a report asking (rhetorically) if the NFP report is overestimating job gains.

 

But it’s not just the sellside: both the Philadelphia Fed and the BLS itself (!) recently found that the monthly NFP data is useless. Here is UBS economist Jonathan Pringle explaining why:

he Bureau of Labor Statistics reported last week that the net change in private sector jobs in 2022Q2 was -287K. In contrast, in the monthly employment report, private nonfarm payroll employment (NFP) is estimated to have risen 1.045 million! The former estimate comes from the BLS’s Business Employment Dynamics (BED) data. The latter comes from the monthly establishment survey data, NFP, the data series that usually makes the first Friday of every month an exciting one for financial markets and economists (in good ways and bad). Plus, the Federal Reserve Bank of Philadelphia staff published a paper last month estimating NFP overstated the employment gains in 2022Q2 by more than 1 million (link here). If BLS and Fed researchers say NFP was wrong, could there be some truth to that? We think so…

 

And here’s why:

In late September, the Bureau of Economic Analysis (BEA) revised down estimates of private wage and salaries sharply. The initial estimates are based on NFP and average hourly earnings. Those monthly estimates are replaced with a 1 to 2 quarter lag as more accurate tax records become available. The tax records are also the source data to which NFP is eventually benchmarked. The Q1 wage and salary estimates based on NFP were too strong. That large downward revision to Q1 income data was a signal that NFP might be overstating the strength of job gains. The Q2 tax records then revised down wage and salary estimates further.

 

How big is the data discrepancy between the real data and the published monthly NFP report? Here’s the answer to that too:

QCEW data then showed more weakness than NFP too: The Quarterly Census of Employment and Wages (QCEW) is also derived from those tax records, generally assumed to be an accurate assessment of payroll employment due to the fines employers incur for failure to properly report to the states’ unemployment insurance systems. The data covers roughly 95% of employees in the US. It is the NFP source data, in a sense. However, the data is released with a lag.

The QCEW data shows that in the 12 months ending on June 2022, job growth was 5.7 million. The current published change in NFP is 6.2 million. Plus, NFP is set to revise up by roughly 500K as of March 2022 at the annual revision to be reported next week. We expect that the upward revision reflects the strength in 2021. We expect that NFP went from understating employment strength in 2021 to overstating it in 2022.

And this is where the seasonal adjustments come in:

If the BED and QCEW point to Q2 weakness, why alter that story? Because of what we see in the BEA data and seasonal adjustment. The BEA revisions to the wage and salary data point to more overstatement in 2022Q1. In addition, the QCEW data is difficult to adequately seasonally adjust. Consider the detailed, disaggregated seasonal adjustment for the monthly employment report, and still there are periodic problems. Our guess is the estimates of 400K to 1 million jobs too many, or overstatement, in the monthly NFP data, were likely spread over 6 to 9 months. We’ll know better when we get the QCEW Q3 data in a month.

 

Of course, if UBS knows this, and JPM knows this, and Goldman knows this, why not just call out the BS? Simple: the Biden admin has until February 2024 to come clean, which is when the official corrections to all the data errors will be revealed, as UBS concludes:

… Unfortunately, what we, the BLS, and the Philly Fed staff see as overstatement in 2022, will not be corrected until February 2024.

In other words, there will be another 12 months of randomly fabricated data meant to serve just one narrative – a political one – instead of representing the true (sad) state of the economy. The problem is that the Fed, and the market, are both using this flawed, seasonally manipulated adjusted data to make monetary policy and capital allocation decisions; decisions which in retrospect one year from today will be proved to have been dead wrong.

By then, Powell will be long gone, Biden – having collected the big guy’s share for another 12 months – will be on his drooling way out to some tropical island paradise, but since the BLS continues to misrepresent the true state of the labor market, Fed funds may be in the double digits, leading to a historic implosion of the US economy. The only question then will be whether said gutting, like the global covid emergency and economic lockdowns, was orchestrated and by whom.

The full UBS report on payroll “ovestatement” can be found here for pro users.

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The post Even JPMorgan Is Lashing Out At Ridiculous Seasonal Adjustments In Key US Data appeared first on Energy News Beat.

 

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Crazy Optimism About China’s Economy – What markets will get hit the hardest? Energy or consumers?

 

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The world’s biggest miner, BHP (NYSE, ASX: BHP) said Thursday it is trialling the use of Hydrotreated Vegetable Oil (HVO) to help power mining equipment at its Yandi iron ore operations in Western Australia.

Supplied through a collaboration with bp, the renewable diesel made from HVO will be used in haul trucks and other mining equipment over an initial three-month trial period.

“About 40% of BHP’s operational greenhouse gas emissions come from using diesel fuel, and this is a core focus of our decarbonisation strategy,” BHP Western Australia Iron Ore asset president Brandon Craig said in the statement.

“Ultimately, our aim is to have fully electric trucking fleets at our sites, but alternative fuels like HVO may help us reduce our emissions in the meantime while the electrification transition takes place,” Craig said. “This collaboration with the teams at Yandi and bp is really exciting to see, given the potential application in our WAIO business and BHP’s operations globally.”

Bp president, Australia and SVP fuels and low carbon solutions, Asia Pacific, Frederic Baudry said bp plans to increase its investment in low carbon energy globally. “Forging strategic partnerships with companies like BHP enables bp to create solutions that satisfy the increasing demand for lower carbon fuels in sectors like mining and transport,” Baudry said.

BHP has a medium-term target to reduce operational greenhouse gas emissions by at least 30% by FY2030, from an FY2020 baseline. Approximately 40% of BHP’s operational emissions in its FY2020 baseline year came from diesel-powered equipment.

 

The post BHP trials renewable fuel at Yandi iron ore operations in Western Australia appeared first on Energy News Beat.

 

The world’s biggest miner, BHP (NYSE, ASX: BHP) said Thursday it is trialling the use of Hydrotreated Vegetable Oil (HVO) to help power mining equipment at its Yandi iron ore operations in Western Australia.

Supplied through a collaboration with bp, the renewable diesel made from HVO will be used in haul trucks and other mining equipment over an initial three-month trial period.

“About 40% of BHP’s operational greenhouse gas emissions come from using diesel fuel, and this is a core focus of our decarbonisation strategy,” BHP Western Australia Iron Ore asset president Brandon Craig said in the statement.

“Ultimately, our aim is to have fully electric trucking fleets at our sites, but alternative fuels like HVO may help us reduce our emissions in the meantime while the electrification transition takes place,” Craig said. “This collaboration with the teams at Yandi and bp is really exciting to see, given the potential application in our WAIO business and BHP’s operations globally.”

Bp president, Australia and SVP fuels and low carbon solutions, Asia Pacific, Frederic Baudry said bp plans to increase its investment in low carbon energy globally. “Forging strategic partnerships with companies like BHP enables bp to create solutions that satisfy the increasing demand for lower carbon fuels in sectors like mining and transport,” Baudry said.

BHP has a medium-term target to reduce operational greenhouse gas emissions by at least 30% by FY2030, from an FY2020 baseline. Approximately 40% of BHP’s operational emissions in its FY2020 baseline year came from diesel-powered equipment.

The post BHP trials renewable fuel at Yandi iron ore operations in Western Australia appeared first on Energy News Beat.

 

A handful of Arizona-focused copper juniors are making steady progress delineating resources and fine-tuning potential development plans towards feeding an independent, western supply chain.

Near the semi-desert town of Casa Grande, Arizona Sonoran Copper (TSX: ASCU; US-OTC: ASCUF) is outlining a scalable redevelopment of its brownfields Cactus mine project. The company is working to expand mineralization at Cactus, and hopes to complete a rescoped preliminary economic assessment (PEA) results will feed into the upcoming prefeasibility study (PFS), where ASCU is rescoping the Cactus base case PEA to include the Parks Salyer project’s oxide and enriched material.

While several high-profile copper projects in Arizona have been stalled by myriad permitting issues, Cactus’s brownfields status and its location on federal lands should make for shorter permitting timelines.

“Arizona has a mining pedigree,” project director Dan Johnson tells The Northern Miner during a February site visit, while pointing towards notable features in the Arizona desert that constitute the former mining operation or where the new developments will occur. He adds that permitting would not involve the federally mandated Environmental Protection Agency.

While permitting might still be some time into the future, VP for exploration Douglas Bowden says the company is currently looking to build scale. He believes the company could build a compliant resource base of more than 4 million lb. of copper.

To get there, the company is working on upgrading inferred resources at the Parks Salyer deposit with a 46-hole, 32,000-metre drill program at Cactus, located 64 km southeast of Phoenix. So far 35 infill  holes for 23,689 metres have been completed.

On February 21, Arizona Sonoran released assays from seven infill drill holes at Parks Salyer, which  is located on contiguous land 2 km southwest of Cactus.

 

The post Site visits: Arizona copper juniors shaping up in support of future US supplies appeared first on Energy News Beat.

 

 

Los Andes Copper (TSXV: LA) has announced the results of a positive pre-feasibility study (PFS) for its 100% owned Vizcachitas project in Chile, highlighted by a $2.8 billion post-tax net present value using an 8% discount rate and an internal rate of return of 24%.

The economics are calculated using metals prices of $3.68/lb. for copper, $12.9/lb. for molybdenum and $21.79/oz. for silver.

Pre-production capital cost for the Vizcachitas project is pegged at $2.4 billion, with a construction period of 3.25 years. This is expected to be paid back 2.5 years from initial production.

The initial life of mine is 26 years, during which Vizcachitas is expected to produce 8.8 billion lb. copper, 273.3 million lb. molybdenum and 32.7 million oz. silver, with average annual copper production of approximately 183,000 tonnes for the first eight years.

The production is based on updated proven and probable reserves of 1.22 billion tonnes grading at 0.36% copper, 136 ppm molybdenum and 1.1 g/t silver, which equates to a copper-equivalent grade of 0.41%.

Santiago Montt, Los Andes Copper’s CEO, said the FPS results show that Vizcachitas is “clearly a Tier 1 asset that has the potential to join the ranks as one of the largest and most profitable copper mines in Chile.”

“The new mine design incorporates a number of optimizations including expanding access works, allowing for a faster ramp-up of production and minimizing uphill material movement and haulage distances,” Montt said in a news release. “This has reduced the OPEX and led to a shorter payback further strengthening the economics of the project.”

Located within the Andes Mountains in the province of San Felipe, approximately 150 km northeast of Santiago, the Vizcachitas project represents a world-class porphyry copper deposit and one of the largest of its kind not controlled by the majors in the Americas.

The project contains a measured resource of 2.6 billion lb. copper, 84 million lb. molybdenum and 11 million oz. silver, and an indicated resource of 10.4 billion lb. copper, 442 million lb. molybdenum and 43 million oz. silver, for a total M+I resource of 14.8 billion lb. copper-equivalent, representing a 16% increase over the previous estimate.

The inferred resource also increased by 130% over the 2019 preliminary economic assessment to 15.4 billion lb. copper-equivalent (13.7 billion lb. copper, 495 million lb. molybdenum, 55 million oz. silver).

According to Montt, the project is “economically robust with the potential for considerable upside through further drilling to upgrade this inferred resource to measured and indicated, thereby bringing them into the mine plan.”

 

The post Los Andes Copper PFS puts $2.8bn NPV on Vizcachitas project appeared first on Energy News Beat.

 

 

Rio Tinto (ASX, LON: RIO) is going ahead with a $40 million expansion of its iconic Diavik diamond mine in the Northwest Territories of Canada, which will extend the operation’s life to at least early 2026.

The approved first phase of the project will expand diamond extraction underground, below the existing A21 open pit. Mining of that area, opened in 2018, recently concluded.

A second phase an additional cost will be put forward for approval in 2024, Rio said.

Phase one below A21 is slated to produce an extra 1.4 million carats, with phase two adding another 800,000 carats.

“This is good news for our employees, partners, suppliers and local communities in the Northwest Territories,” Sinead Kaufman, Rio Tinto Minerals’ chief executive, said in a statement.

Rio Tinto became in 2021 the sole owner of the operation, after buying the 40% share held until then by Dominion Diamond Mines.

The company has operated Diavik since production began in 2003. Located approximately 300 km north-east of Yellowknife, the mine employs over 1,100, of which 17% are Northern Indigenous people. 

Diavik is Canada’s largest diamond mine in terms of production with between 6 and 7 million carats of rough diamonds produced each year. Since mining began in 2003 Diavik has produced over 100 million carats of diamonds. 

The Northwest Territories’ two other diamond mines – Ekati, operated by Arctic Canadian Diamond and De Beers-Mountain Province’s Gahcho Kué  – are expected to close in 2024 and 2028, respectively.

Diavik is about 30 km southeast of Ekati, and Gahcho Kué is 125 km southeast of Diavik. 

 

The post Rio Tinto to spend $40m on Diavik diamond mine expansion appeared first on Energy News Beat.

 

 

Anglo American (LON:AAL) said Thursday it would take a $1.7 billion charge due higher costs and delays at its Woodsmith fertilizer project, which is being built beneath the North Yorks Moors national park in England.

The company, which acquired Woodsmith two years ago with the acquisition of British junior Sirius Minerals said it now expects first product from the mine in 2027.

By then, Anglo American would have spent about $1 billion a year on top of the $1.35 billion it has already invested developing the world’s largest known deposit of polyhalite fertilizer, totalling $6.1 billion.

Woodsmith’s previous owner estimated the project required about $3.3 billion for completion, with first production slated for 2024. Sirius had spent $1.4 billion on the project when Anglo American took over.

The mine, with an estimate productive life of more than 50 years, could become one of the world’s largest in terms of the amount of resources extracted. Woodsmith will generate an initial 13 million tonnes per year of polyhalite, a multi-nutrient fertilizer, containing four of the six key elements needed for plant growth — potassium, sulphur, magnesium and calcium.

Anglo American believes the mine could achieve such output levels in the early 2030s if demand for its product is sufficient. 

“Be in no doubt that we are setting Woodsmith up to generate significant cashflows for many, many decades, we’ll be building it out now until 2027,” CEO Executive Duncan Wanblad said in a statement.

While polyhalite is a new product to the fertilizer market, Wanblad said the company was modelling the project economics on a price of $190 per tonne, versus more than $300 per tonne for similar products on the market.

Profit down 47%

The writedown, flagged in December by chief financial officer Stephen Pearce is part of Anglo’s year-end 2022 results.

The global miner posted a full-year net profit of $4.51 billion, 47% less than $8.56 billion it earned in 2021.
It attributed the results to inflationary pressure, higher energy prices and lower production volumes for the results, which lifted production costs even as commodity prices fell.

Full-year revenues fell 15% to $35.12 billion from $41.55 billion in the previous year, below the company-provided consensus of $36.88 billion.

Anglo American kept its 2023 copper production guidance unchanged at between 840,000 and 930,000 tonnes.

 

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