America's First Cobalt Mine // Biden's Saudi Woes // Cameco, Brookfield Acquire Westinghouse

America's First Cobalt Mine

The first cobalt mine in America opened in Idaho last Friday. It's also the only cobalt mine in America. Cobalt is a vital material for making electric vehicle batteries.

"We're talking about building a world-class clean energy economy, and this mine, this project ... is key to that vision," the U.S. Department of Energy's Geri Richmond told workers and dignitaries at the mine's opening ceremony.

"The opening of Australia-based Jervois Global's Idaho facility, near the site of a defunct cobalt open pit mine, is being hailed by state and federal officials pushing to fast track development of minerals that support domestic and national security," NPR reports.

The mine sits near the Salmon river, a tributary of the Columbia river. The mine was originally shuttered in part for polluting nearby trout streams. But this new mine has better environmental safeguards and $44 million set aside for environmental cleanup. Once the mine is closed it will be capped rather than left as an open pit like it was in the 1980s.

"The cobalt from the Idaho mine will be shipped to a refinery Jervois is refurbishing in São Paulo, Brazil, to be processed. The company projects an initial seven-year run," reports NPR. "That makes building a U.S. refinery too costly for now, but company officials are eying new federal funds aimed at boosting domestic mineral production that might help extend the mine's life cycle."

Biden's Saudi Woes

The Biden administration has decided to pursue a reckless path of OPEC+ antagonism. The White House is now "re-evaluating" America's relationships with the Saudis.

“Certainly in light of recent developments and OPEC+’s decision about oil production, the president believes that we should review the bilateral relationship with Saudi Arabia and to take a look to see if that relationship is where it needs to be and that it is serving our national security interests,” the strategic communications coordinator for the National Security Council John F. Kirby said.

Some Democrats see the production cut, made less significant by the underperformance of OPEC+ members anyway, as siding with Putin. Russia is, of course, a member of the oil cartel. Put another way, there appears to be great anger within the administration that OPEC+ has sided with its own members rather than the Democrats up for re-election in next month's mid-terms.

What does this re-evaluation look like? No one's quite sure. "No special team of aides was established to conduct a formal review; no deadline was set for a conclusion; and no options were mentioned for consideration," reports the New York Times.

Whatever the case, the administration's new posture towards the Saudis showed just how far it will go to avoid helping the American oil and gas industry. Rather than expanding domestic production, the Biden administration appears more willing to ditch decades of foreign policy precedent without improving oil supply problems at all.

Cameco, Brookfield Acquire Westinghouse

Canadian uranium mining company Cameco and Brookfield Renewables have teamed up to acquire Westinghouse Electric Company.

"Westinghouse was acquired out of bankruptcy by Brookfield Business Partners in 2018. Since then it has refocused on core nuclear services, reduced its operating cost base and strengthened its in-house expertise," reports World Nuclear News.

Since then it has just about doubled its profitability and, according to Brookfield, is currently "ideally positioned to benefit from strong industry tailwinds driven by increased recognition of nuclear power as a reliable source of clean energy to achieve global decarbonization goals."

Brookfield Business Partners anticipates generating about $1.8 billion in proceeds from the sale of its 44% stake in the company.

"Coupled with our more than 30-year proven track record of providing secure and reliable fuel supplies to a global customer base, this transaction fits perfectly within Cameco's strategy and is expected to increase our ability to meet the growing needs of existing and new customers at a time when origin and security of supply is of significant concern. At the same time, we expect the recurring demand for Westinghouse's operating plant services and nuclear fuel will generate a strong revenue stream and add stable cash flow to complement Cameco's existing uranium and fuel services business," Cameco CEO Tim Gitzel said.

All in all, this acquisition signals a bullish shift in the nuclear sector. "Cameco is attempting to build the first Western nuclear Exxon Mobil. But future-proof and minus the carbon emissions. The world's better off if they succeed. I'm rooting for them," Mark Nelson, the president of the Radiant Energy Fund, told Grid Brief.

"Cameco will own the top Western nuclear tech company, the top uranium mines and reserves, and the top enrichment technology. A fearsome combination," he added.

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Conversation Starters

1. Glencore will sell coal to Japan at the highest price the nation has ever seen. "Global coal miner Glencore and Japanese power utility Tohoku Electric have entered into a long-term contract for supplies of thermal coal from Australia at a record high price of $395/mt FOB, basis 6,322 kcal/kg GAR for delivery between October 2022-September 2023," reports S&P Global.

2. The world's longest offshore oil pipeline might get the go-ahead next year. "The pipeline, expected to cost between $20 billion and $25 billion, is planned to run for 3,840 miles (5,600 kilometers) from Nigeria along the West African coast to Morocco before connecting with pipelines in Italy and Spain and potentially delivering more non-Russian gas to Europe," reports Oilprice.com.

3. America set a natural gas production record last year. "Driven by elevated natural gas prices, U.S. production in the largest resource basins has been increasing," reports the Energy Information Administration. "Texas and Pennsylvania have driven this increase; production grew by nearly 1.5 billion cubic feet per day (Bcf/d) in both states between 2020 and 2021. Texas overlays the Permian Basin and Haynesville Basin, which were both major sources of production growth in 2021. Similarly, Pennsylvania overlays the Appalachian Basin, which now accounts for nearly one-third of all U.S. dry natural gas production."

Crom's Blessing