Major International Business Headlines Brief::: 20 September 2021

Mon Sep 20 09:04:03 CAT 2021

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Major International Business Headlines Brief::: 20 September 2021

 <https://www.nedbank.co.zw/> 

ü  Sibanye-Stillwater rejects claim it made “big mistake” agreeing JV in US lithium project

ü  Harmony Gold says critics must see wage pact in context of three year output plan

ü  Size of gold production still a critical factor in valuation, says Gold Fields’ Griffith

ü  Gas price rise: Government considering loans for energy firms

ü  Gas price rise: US boss holds crisis gas talks with UK

ü  Why the Fed might welcome a bond market tantrum

ü  China Evergrande shares plummet to 11-year low on default risks

ü  Investors call for governments to toughen climate accounting -letter

ü  U.S. opens probe into 30 million vehicles over air bag inflators

ü  U.S. Treasury's Yellen: Debt default would 'permanently' weaken America

ü  Honda targets annual sales of 70,000 Prologue electric vehicles in U.S. from 2024

ü  Oil giant Shell sets sights on sustainable aviation fuel take-off

ü  American Airlines, Microsoft join Gates-backed program to boost clean energy

ü  Universal Studios Beijing to draw eager throngs amid uneasy U.S.-China ties

ü  Cathay Pacific lowers Q4 capacity forecast as travel restrictions linger

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Sibanye-Stillwater rejects claim it made “big mistake” agreeing JV in US lithium project

SIBANYE-Stillwater’s proposed $490m investment in the Rhyolite Ridge Lithium-Boron Project was termed a “a mistake” by a US non-government organisation which claimed the enterprise would not get off the ground.

Patrick Donnelly, Nevada state director for the Center for Biological Diversity was quoted by the Washington Times that building the project would endanger Tiehm’s buckwheat, a flowering plant that grows only on a 10-acre stretch of federal land in western Nevada.

In June, the US Fish and Wildlife Service proposed protecting the Tiehm’s buckwheat under the Endangered Species Act in response to a lawsuit filed by Donnelly’s organisation, said the Washington Times.

“There’s only one way forward, and that’s to protect Tiehm’s buckwheat and stop this destructive mine from driving a species to extinction,” said Donnelly. “Sibanye-Stillwater made a big mistake here, because this mine is unlikely to ever get built.”

James Wellsted, spokesman for the South African miner said its financial commitment was conditional on the project receiving full approvals. “We definitely haven’t made a mistake,” he told Miningmx.

According to a report in May, Bloomberg Law said the Rhyolite Ridge Lithium-Boron Project could cost a total of $800m to develop.

Sibanye-Stillwater has embarked on an aggressive growth strategy aiming to build a presence in so-called battery metals such as lithium which are likely to see an increase in demand as government’s push for greater use of electric vehicles (EV).

US President Joe Biden’s administration has called for an electric vehicle revolution. In May, Reuters cited Ali Zaidi, the deputy White House national climate adviser as saying: “President Biden is focused on seizing the EV market, sourcing and manufacturing the supply chain here in America, and creating good-paying, union jobs.”

The Washington Times said the US government’s take on the Rhyolite Lithium-Boron mine would “… soon show whether his administration intends to walk the talk”.

“Just this week, President Joe Biden is travelling across America’s West, pushing for immediate climate action and for obvious reasons,” James Calaway, executive chairman of ioneer said in a press call.

“A big part of his plan is focused on ramping up production of electric vehicles as quickly as possible,” said Calaway. “Our project here at Rhyolite Ridge is absolutely critical to meeting those objectives.”

Ioneer, an Australian company, owns the Rhyolite Lithium-Boron Project but on September 16 it agreed to form a joint venture with Sibanye-Stillwater which would give the South African company a 50% stake in the mine.

The transaction represents Sibanye-Stillwater’s third investment in its quick-fire battery metals strategy having already in February invested €40m for a 30% stake in the Keliber lithium project in Finland with the country’s government, and then in July buying the Sandouville nickel processing facilities in France from Eramet for €65m.-miningmx

Harmony Gold says critics must see wage pact in context of three year output plan

HARMONY Gold’s three-year wage deal signed with unions on Thursday was absent any of the pyrotechnics of previous wage negotiations. There wasn’t a single threat of strike action while the Association of Mineworkers & Construction Union (AMCU) – normally a refractory presence –  was low key throughout winter.

Another positive is that with the wage agreement behind it, Harmony can knuckle down to a 2022 financial of elevated capital expenditure. It said in August at its 2021 full year presentation it would spend R2.3bn this year as part of a R8bn+ programme maintaining production at 1.4 million ounces annually for the next seven years.

The negative of the wage deal is that it entrenches Harmony’s reputation as a high cost gold producer. At a total increase of between 7% and 7.8% over the three years, the agreement is more expensive than the 6.5% average increase negotiated by Gold Fields and Pan African Resources’ 5.4% three-year wage settlement concluded earlier.

“Although the agreement is in line with management expectations, above inflationary increases in 50% to 60% of the cash cost base contributes to its 99th percentile ranking on the global AISC (all-in sustaining cost) curve in FY22,” said RMB Morgan Stanley analysts Jared Hoover, Christopher Nicholson and Brian Morgan in a report.

Harmony spokesman Jared Coetzer said over a three year view the company is significantly improving its cost profile. The production replacement programme maintains production and codes in cheaper ounces as the group phases out the ageing mines. “Our guidance has gone up (in terms of AISC) but we are confident the catalysts will come through,” he said. “There will be a reversal in the cost trend.”

There is, of course, another factor at play in the wage debate.

Mining in South Africa comes with social responsibilities that preclude mine closure, especially if the motivation is short-term wish fulfilment of investment analytical society. Harmony mines in the Carletonville and Welkom areas where mining remains the largest single employer.-miningmx

Size of gold production still a critical factor in valuation, says Gold Fields’ Griffith

FORMER Gold Fields CEO Nick Holland won plaudits for having invested in new gold production, especially at a time when the gold price was relatively low.

He established a base of about two million ounces in gold annually for 10 years, a development which was all the more notable because the sector had been reticent to invest in new gold resources. Securing future production was to some extent reflected in Gold Fields’ share price which gained 43% compare to a slim 3.5% gain for rival AngloGold Ashanti over the course of 2020.

Today, however, that’s not enough.

Chris Griffith, Gold Fields CEO, is keen to arrest the decline in the firm’s production from a peak of 2.7 million oz in 2024. He hopes to achieve this through a combination of acquisitions and organic growth. The plans are strategic at this stage.

Whilst Griffith is keen to talk about chasing ‘value over volume’ – a popular mining principle since the collapse of the commodity super-cycle in 2013 – his interest in avoiding a slide in production off historically high levels for Gold Fields, sounds like keeping up appearances.

Griffith responds that the key to maintaining a share price premium is first and foremost having quality assets, management credibility, and a quality in the jurisdiction of the asset. Beyond that, however, size does seem to matter, he says.

“There is some correlation to size as long as you’ve got those other things in place,” Griffith said in an interview with Miningmx shortly after the group reported its interim numbers in August. “If you’ve just got size but have some other challenges, then you don’t get to ‘base two'” of how investment analysts rate the share, he says.

“With the jurisdictions we have got, and where we are growing, and having created value of 2.7 million oz … to let that slip off the other side of the hill doesn’t feel like the right long-term solution.”

Buying mines, not companies

What’s not planned, however, is the takeover of companies which would appear to rule out a bid for the other half of Ghana assets held in joint venture with Toronto listed Asanko Gold. “We’ve been good at buying assets rather than companies,” he says. Gold Fields’ Australian mines will be operating for 20 years even though they had a life of less than 10 years when they were first bought.

Griffith is ambitious by nature so it’s no surprise the high water mark of 2.7 million oz is one he wants to maintain for Gold Fields. Given his former role as CEO of Anglo American Platinum, the market also speculated he could push Gold Fields into metal diversification. That is not on the radar at the present time.

“At the moment there’s no focus on other commodities. It doesn’t mean we’ll never do it, but it’s not what the market or shareholders want,” he said in response to an analyst question.

Gold Fields is also sticking with its South African mine South Deep instead of selling it, as had been speculated. The theory is that South Deep, a mine bought in 2006 for R22bn, was Holland’s pet project and that Griffith would be tempted to sell it, partly to dispense with the jurisdictional albatross of South Africa.

“It has all the hallmarks of a Gold Fields franchise asset,” said Griffith. It’s a logical conclusion: South Deep has now made money for the last two years, and it’s safer to keep the mine ticking over rather than risk someone else capitalising on Gold Fields work of the last 15 years.-miningmx

Gas price rise: Government considering loans for energy firms

The government is considering offering emergency state-backed loans to energy companies as firms battle to stay afloat amid surging gas prices.

Smaller suppliers face ruin as price hikes have made their price promises to customers undeliverable.

The process for dealing with failing firms is under pressure as adopting customers has become unattractive for surviving companies due to price rises.

The loans are expected to be offered to encourage firms to take on customers.

Wholesale gas prices have risen by 250% since January after a cold winter put pressure on Europe's supplies, running down levels of stored gas.

Increased competition for liquefied natural gas, particularly from countries in Asia which also experienced cold weather, has added to the pressure on prices.

Boris Johnson, who is in New York for a UN General Assembly meeting, told reporters: "We've got to try and fix it as fast as we can, make sure that we have the supplies that we want, make sure that we don't allow the companies we rely on to go under.

"We'll have to do everything we can, but this will get better as the market starts to sort itself out as the world economy gets back on its feet."

Mr Johnson said he was "very confident" in the UK's supply chains.

The prime minister said the supply problems stemmed from the economy around the world waking up after pandemic lockdowns, "like everybody going back to put the kettle on at the end of the TV programme".

But a senior executive at one of the UK's largest energy companies described an estimate that 10 energy companies would survive this as "optimistic".

Several energy suppliers are batting to stay in business, with the UK's sixth largest energy company Bulb seeking a bailout to stay afloat.

Four other smaller firms have ceased trading in recent weeks, and four more are expected to go out of business next week.

The proliferation of new energy retailers, set up to challenge the bigger players, had been considered by past and present governments as a triumph of competition in a competitive market.

The bigger energy providers have the financial resources to take out insurance - or hedge - against the risk of a spike in energy prices. Smaller players have been unable or unwilling to spend the money to guard against a price shock.

Customers will still continue to receive gas or electricity even if the energy supplier goes bust. Ofgem will move your account to a new supplier but it may take a few weeks. Your new supplier should then contact you to explain what is happening with your account

While you wait to hear from your new supplier: check your current balance and - if possible - download any bills; take a photo of your meter reading

If you pay by direct debit, there is no need to cancel it straight away, Citizens Advice says. Wait until your new account is set up before you cancel it

If you are in credit on your account, your money is protected and you'll be paid back. If you were in debt to the old supplier, you'll still have to pay the money back. The new supplier should contact you to arrange a payment plan

Once you have been informed of your new supplier, make sure you're on the best tariff for you. You can switch if you're not happy with your new supplier or tariff without any penalties, but don't do this until the account has been moved over.

Industry sources have told the BBC that the insuring positions or "hedges" - the right to buy energy at historic fixed prices - taken out by the bigger players, are now worth as much or more than the big companies themselves.

Senior executives at some of the largest companies said the energy price cap - supported by both Labour and Conservative politicians - had played a part in bringing about the current crisis.

"You can legislate to protect the consumer - but that can bankrupt the supplier," said one senior industry source.

"The price cap is now the cheapest deal in the market and providing new customers with energy at that price is loss making."

The BBC also understands that levies on customers' energy bills intended to fund green initiatives will be maintained as the sums involved will not significantly address the scale of the current problem.

A reduction or removal would send "the wrong signal", three months before a landmark climate change conference, known as COP 26, which the UK is hosting in Glasgow in November.

Business Secretary Kwasi Kwarteng has been in intensive talks with energy providers over the weekend and will chair an industry meeting on Monday to explore solutions to a crisis, which is reaching far and wide into the UK economy.

Energy intensive fertiliser producers have shut down which has created a shortage of the by product of production, carbon dioxide - widely used in the production and storage of food products.-BBC

Gas price rise: US boss holds crisis gas talks with UK

The boss of a US company that supplies 60% of the UK's food-grade carbon dioxide supply has held crisis talks with the government over shortages.

Tony Will, chief executive of CF Industries, arrived in the UK earlier after the firm stopped production at its two fertiliser plants because of soaring wholesale gas prices.

Food firms are warning a shortage of CO2 is threatening produce supplies.

High global demand for gas has been blamed for the recent surge in prices.

Carbon dioxide is used to stun animals prior to slaughter and in dry ice form to keep food fresh for storage and transport. It is a by-product of fertiliser manufacturing.

Last week, CF Industries, the UK's biggest CO2 producer, stopped production at its Teesside and Cheshire fertiliser plants "due to high natural gas prices". Wholesale gas prices have jumped by 250% since January, according to Oil & Gas UK, the industry group.

Carbon dioxide 'threatens food security'

Gas prices: Are energy bills going up and what can I do?

CF Industries said it did not "have an estimate for when production will resume".

The BBC has also been told that officials from the Department for Business, Energy and Industrial Strategy have been "working with" the company in recent days.

Business Secretary Kwasi Kwarteng tweeted that he had met Mr Will and "discussed the pressures the business is facing and explored possible ways forward to secure vital supplies, including to our food and energy industries".

Food producers and supermarkets have warned of the impact CO2 shortages are having on the industry.

'Tipping point'

Ranjit Singh Boparan, owner of UK poultry giant 2 Sisters Food Group, said the decision by CT Industries to halt operations, was a "massive body blow" for the food sector and placed it "at breaking point".

Adam Couch, the boss of pork producer Cranswick said the industry was "already at tipping point ahead of the demanding Christmas period".

"We have worked tirelessly throughout the pandemic to keep food on the shelves, but there is a real risk of product shortages across the country if the government does not act immediately to address these issues," he added.

Supermarket Ocado said it had "limited stock" of some frozen items due to gas shortages, while another supermarket told the BBC the situation was "escalating quickly".

One supermarket executive told the BBC the CO2 issue is "escalating quickly" and was causing a "big supply issue".

"The big meat suppliers are saying they have two to three days' supply and are now having to prioritise how they use what they have," he said.

He said the problem "compounds" supply issues the food, drink and supermarket industries are already facing due to shortages of HGV drivers in the UK, caused partly by the pandemic and Brexit.

'Continuity of supply'

The British Poultry Council said that the supply chains will "inevitably slow down" if CO2 supplies become tighter and more unpredictable in the next five to seven days.

A spokeswoman said product types might be reduced as meat companies streamline production to try to cut down the impact of shortages.

Ian Wright, chief executive of the Food and Drink Federation, stressed that the UK was not going to run out of food, but said there would be "major concerns" over supply to supermarkets and other food outlets.

He suggested the government would need to take an "innovative" approach to dealing with the shortage of CO2, such as perhaps subsidising companies who produce the gas over the next four or five weeks.

"Or the knock-on effects of this may well be felt right the way through to the end of the year and particularly over the key Christmas trading period," said Mr Wright.

Wholesale gas prices

Mr Kwarteng has been in talks with energy suppliers as well as the energy regulator Ofgem over the weekend amid fears more small companies could go bust in the coming days.

COP26 president Alok Sharma told BBC's Andrew Marr Show that people should not be concerned about the risk to the supply of gas. And he said the energy price cap and warm homes discount - two cost-limiting measures - would protect people.

An Ofgem spokesperson said: "Ofgem continues to work closely with government and industry to ensure consumers continue to be protected while global gas prices are high and will speak further on these issues at the industry roundtable [on Monday]."-BBC

Why the Fed might welcome a bond market tantrum

(Reuters) - A bond market tantrum that drives up yields can be a fearsome prospect for central banks but the U.S. Federal Reserve might just welcome a sell-off that lifts Treasury yields towards levels that better reflect the robust state of the economy.

Persistently low yields are a feature of bond markets across the developed world, with central banks mostly in no hurry to raise interest rates and a global savings glut that keeps debt securities in constant demand.

But it is in the United States that the contradiction between economic recovery and bond yields is starkest.

Even with growth tipped to surpass 6% this year and a "taper" in sight for the Fed's bond-buying programme at the end of this year, 10-year yields are still stuck at just above 1.3%. . read more

The Fed probably rejoiced at low yields in the initial stages of the economic recovery, but now needs bonds to respond to the end of pandemic-linked recession, said Padhraic Garvey, head of research for the Americas at ING Bank.

Current pricing, analysts say, looks more consistent with heightened economic uncertainty, whereas higher yields would align markets more with the signals coming from central banks.

"To facilitate that, we argue that there needs to be a tantrum. If the Fed has a taper announcement ... and there is no tantrum at all, that in fact is a problem for the Fed," ING's Garvey said.

Analysts say a bond market tantrum would involve yields rising 75-100 basis points (bps) within a couple of months.

The original "taper tantrum" in 2013 boosted U.S. yields just over 100 bps in the four months after then Fed boss Ben Bernanke hinted at an unwinding of stimulus measures.

But that kind of sudden jump in yields looks unlikely right now, given how clearly the Fed has telegraphed its plans to taper its bond-buying. And as 2013 showed, bond market tantrums carry nasty side-effects including equity sell-offs and higher borrowing costs worldwide.

A happy medium, analysts say, might be for benchmark yields to rise 30-40 bps to 1.6-1.8%.

Besides wanting higher yields to better reflect the pace of economic growth, the Fed also needs to recoup some ammunition to counter future economic reversals.

The Fed funds rate - the overnight rate which guides U.S. borrowing costs - is at zero to 0.25%, and U.S. policymakers, unlike the Bank of Japan and the European Central Bank, are disinclined to take interest rates negative.

The Fed won't want to find itself in the position of the ECB and BOJ, whose stimulus options at the moment are limited to cutting rates further into negative territory or buying more bonds to underwrite government spending.

Jim Leaviss, chief investment officer at M&G Investments for public fixed income, said policymakers would probably like the Fed fund rate to be at 2%, "so, when we end up in the next downturn, the Fed will have some space to cut interest rates without hitting the lower bound of zero quickly".

Another reason higher yields might be welcomed is because banks would like steeper yield curves to boost the attractiveness of making longer-term loans funded with short-term borrowing from depositors or markets.

Thomas Costerg, senior economist at Pictet Wealth Management, notes that the gap between the Fed funds rate and 10-year yields of about 125 bps now is well below the average 200 bps seen during previous peaks in economic expansion.

He believes the Fed would favour a 200 bps yield slope, "not only because it would validate their view that the economic cycle is fine but also because a slope of 200 bps is healthy for the banking sector's maturity transformation."

GRAVITATIONAL FORCE

But even a tantrum might not bring a lasting rise in yields.

First, while the Fed may look with envy at Norway and New Zealand where yields have risen in expectation of rate rises, it has stressed that its own official rates won't rise for a while.

Structural factors are at play too, not least global demand for the only large AAA-rated bond market with positive yields.

The Fed also, in theory at least, guides rates towards the natural rate of interest, the level where full employment coincides with stable inflation.

But this rate has shrunk steadily. Adjusted for projected inflation, the "longer-run" funds rate - the Fed's proxy for the natural rate - has fallen to 0.5% from 2.4% in 2007. If correct, it leaves the Fed with little leeway.

Demographics and slower trend growth are cited as reasons for the decline in the natural rate though a paper presented last month at the Jackson Hole symposium also blamed a rise in income inequality since the 1980s.

The paper said the rich, who are more likely to save, were taking a bigger slice of overall income and the resulting savings glut was weighing on the natural rate of interest.

"One lesson from this year is that there is massive gravitational force, a price-insensitive demand which is pressing down on Treasury yields," Pictet's Costerg said.

The Thomson Reuters Trust Principles.

China Evergrande shares plummet to 11-year low on default risks

(Reuters) - Shares of Evergrande on Monday plunged as much as 19% to their lowest in over 11 years, extending losses as investors take a dim view of its business prospects with a fast approaching deadline for payment obligations this week.

By noon, the stock had touched HK$2.06, the weakest level since May 2010.

The company's property management unit (6666.HK) dropped over 12%, while its electrics car unit (0708.HK) declined 8%. Movie streaming company Hengten Net (0136.HK), majority-owned by Evergrande, plummeted 14%.

Evergrande has been scrambling to raise funds to pay its many lenders, suppliers and investors, with regulators warning that its $305 billion of liabilities could spark broader risks to the country's financial system if not stabilised.

One of Evergrande's main lenders has made provisions for losses on a portion of its loans to the embattled developer, while some creditors are planning to give it more time to repay, four bank executives told Reuters. read more

The developer said on Sunday it has begun repaying investors in its wealth management products with real estate. read more

Policymakers are telling Evergrande's major lenders to extend interest payments or rollover loans, and market watchers are largely of the view that a direct bailout from the government is unlikely.

Evergrande is due to pay $83.5 million interest on Sept 23 for its March 2022 bond . It has another $47.5 million interest payment due on Sept 29 for the March 2024 notes . Both bonds would default if Evergrande fails to settle the interest within 30 days of the scheduled payment dates.

In any default scenario, Evergrande will need to restructure the bonds but analysts expect a low recovery ratio for investors. Trading of the company's bonds underscored just how dramatically investor expectations of its prospects have deteriorated this year.

The 8.25% March 2022 dollar bond was traded at 29.156 on Monday afternoon, yielding over 500%, compared to around 13.7% at the beginning of year. The 9.5% March 2024 bond was at 26.4, yielding over 80%, compared to 14.6% at the start of 2021.

Goldman Sachs said last week that because Evergrande has dollar bonds issued by both the parent company and a special purpose vehicle, recoveries in a potential restructuring could differ between the two sets of bonds, and any potential restructuring process may be prolonged.

The company's woes also pressured the broader property sector as well as the yuan, which fell to a three-week low of 6.4831 per dollar in offshore trade .

Shares of Sunac (1918.HK), China's No.4 property developer, dropped over 10%, while state-backed Greentown China (3900.HK) shed over 9%.

Hong Kong's Heng Seng Index (.HSI) was down over 4%.

The Thomson Reuters Trust Principles.

Investors call for governments to toughen climate accounting -letter

(Reuters) - Investors managing more than $2.5 trillion have called on governments to compel companies and auditors to file financial accounts aligned with the world's net zero emissions target, a letter seen by Reuters showed.

Writing to UK climate czar Alok Sharma ahead of the next round of global climate talks in Glasgow in November, the group said doing so was crucial to clarify the financial impact of climate change and give an incentive to invest accordingly.

Governments should mandate a requirement for companies to make clear the financial consequences of a net-zero pathway and for auditors to call out where companies have failed to do so, the investor group said in the Sept. 14 letter.

It follows a recent study by Carbon Tracker and the Climate Accounting Project that found more than 70% of the world's heaviest-emitting companies did not disclose the full risks in their 2020 disclosures, with 80% of audits showing no evidence the risk had been assessed. read more

"Most (companies) continue to use assumptions that presume little or no decarbonisation, and thus report financial results predicated on governments failing to implement their stated commitments and, in some cases, legal targets," the letter said.

Sharma's office did not immediately respond to a request for comment.

The upcoming climate conference, dubbed COP26, is seen as the most important since governments originally struck a deal to limit global warming in Paris in 2015, with all parties now being asked to accelerate their efforts. read more

Britain's accounting watchdog has already warned companies and auditors to do a better job, while global accounting and auditing standard setters have restated the need to assess material risks, which can include climate risk.

Despite investor bodies representing $100 trillion in assets calling in September for Paris-aligned accounts, the inaction from companies and auditors meant government action was needed, the investor group said.

"If we choose to wait for companies to respond to investor pressure, it could take years to deliver the numbers we require to invest in a way that is aligned with the Paris goals," the investors' letter said.

Signatories to the letter include a body representing British local government pensions, Sweden's AP2 pension scheme and investors including Sarasin & Partners, which coordinated the letter and an accompanying position paper, as well as Candriam and Federated Hermes.

For countries like Britain, which have made reaching net-zero emissions a legal obligation, changing the law around accounting and auditing would be "entirely consistent" with other government efforts, the investor group said.

The stakes are high. Companies such as BP (BP.L) wrote off billions of dollars last year after they lowered long-term oil price assumptions. Without proper accounting, money needed to fund the transition to a low-carbon economy could end up in the wrong place.

"Accounts that leave out material climate impacts misinform executives, shareholders and creditors and, thus, result in misdirected capital," the investor group said.

The Thomson Reuters Trust Principles.

U.S. opens probe into 30 million vehicles over air bag inflators

(Reuters) - U.S. auto safety investigators have opened a new probe into 30 million vehicles built by nearly two dozen automakers with potentially defective Takata air bag inflators, a government document seen by Reuters on Sunday showed.

The National Highway Traffic Safety Administration (NHTSA) on Friday opened an engineering analysis into an estimated 30 million U.S. vehicles from the 2001 through 2019 model years. Automakers were alerted to the investigation, which is not yet public.

The new investigation includes vehicles assembled by Honda Motor Co (7267.T), Ford Motor Co (F.N), Toyota Motor Corp (7203.T), General Motors Co (GM.N), Nissan Motor (7201.T), Subaru (7270.T), Tesla (TSLA.O), Ferrari NV , Nissan Motor (TAMO.NS), Mazda (7261.T), Daimler AG (DAIGn.DE), BMW (BMWG.DE) Chrysler (now part of Stellantis NV (STLA.MI)), Porsche Cars (PSHG_p.DE), Jaguar Land Rover (owned by Tata Motors (TAMO.NS)) and others.

The automakers on Sunday either declined to comment before NHTSA's expected public announcement on Monday, or did not immediately respond to requests for comment. NHTSA declined to comment.

The 30 million vehicles include both vehicles that had the inflators installed when they were manufactured as well as some inflators that were used in prior recall repairs, NHTSA said in the document.

Over the last decade, more than 67 million Takata air bag inflators have been recalled in the United States -- and more than 100 million worldwide -- in the biggest auto safety callback in history because inflators can send deadly metal fragments flying in rare instances.

There have been at least 28 deaths worldwide, including 19 in the United States tied to faulty Takata inflators and more than 400 injuries.

The 30 million vehicles that are part of the new investigation have inflators with a "desiccant" or drying agent. According to the document, NHTSA said there have been no reported ruptures of vehicles on the roads with air bag inflators with the drying agent.

"While no present safety risk has been identified, further work is needed to evaluate the future risk of non-recalled desiccated inflators," NHTSA said in opening its engineering analysis seen by Reuters. "Further study is needed to assess the long-term safety of desiccated inflators."

NHTSA has said the cause of the inflator explosions tied to the recall of 67 million inflators that can emit deadly fragments is propellant breaking down after long-term exposure to high temperature fluctuations and humidity. The agency has required all similar Takata without a drying agent to be recalled.

In the United States, 16 deaths in Honda vehicles have been reported, two in Ford vehicles and one in a BMW, while 9 other Honda deaths occurred in Malaysia, Brazil and Mexico.

NHTSA did not immediately release a breakdown of how many vehicles per manufacturer are covered by the probe.

The safety agency said the investigation "will require extensive information on Takata production processes and surveys of inflators in the field."

Earlier this year, NHTSA said of the 67 million recalled inflators, approximately 50 million have been repaired or are otherwise accounted for.

The Thomson Reuters Trust Principles.

U.S. Treasury's Yellen: Debt default would 'permanently' weaken America

(Reuters) - U.S. Treasury Secretary Janet Yellen issued a fresh plea for Congress to raise the federal debt ceiling on Sunday, arguing a default on U.S. debt would trigger a historic financial crisis.

In a Wall Street Journal opinion piece, Yellen said that the crisis triggered by a default would compound the damage from the continuing coronavirus pandemic, roiling markets and plunging the U.S. economy back into recession at the cost of millions of jobs and a lasting hike in interest rates.

"We would emerge from this crisis a permanently weaker nation," Yellen said, noting that U.S. creditworthiness has been a strategic advantage.

Yellen did not offer a new timeline for a possible default, but described economic damage that would fall on consumers through higher borrowing costs and lower asset prices.

She has said previously that a default could come during October when the Treasury exhausts its cash reserves and extraordinary borrowing capacity under the $28.4 trillion debt limit.

"We can borrow more cheaply than almost any other country, and defaulting would jeopardize this enviable fiscal position. It would also make America a more expensive place to live, as the higher cost of borrowing would fall on consumers," Yellen wrote. "Mortgage payments, car loans, credit card bills—everything that is purchased with credit would be costlier after default."

Republicans have refused to support raising or suspending the $28.4 billion. U.S. Senator Bill Cassidy from Louisiana said earlier on NBC's "Meet the Press" program that Democrats want to increase the borrowing cap to fund trillions of dollars in "Democratic wish list" spending.

Yellen argued the debt ceiling is about paying for past spending obligations, and said waiting too long to lift the debt ceiling can still cause damage, citing a 2011 debt ceiling crisis that pushed the federal government to the brink of default that prompted a credit rating downgrade.

"This led to financial-market disruptions that persisted for months. Time is money here, potentially billions of dollars. Neither delay nor default is tolerable."

House of Representatives Speaker Nancy Pelosi, in a statement, cited Yellen's past remarks on the issue and noted that Congress addressed the debt ceiling on a bipartisan basis three times during the Trump administration.

"When we take up the debt limit this month, we expect it to be bipartisan once more," Pelosi said.

Still, House Majority Whip Jim Clyburn on Sunday that Democrats may have to pass the debt ceiling hike without Republican support.

"I think we ought to do what’s necessary and message to the American people exactly who is trying to destroy this great democracy that we hope to keep in place," he told CNN.

Honda targets annual sales of 70,000 Prologue electric vehicles in U.S. from 2024

(Reuters) - Honda Motor Co's (7267.T) U.S. unit said on Monday it is targeting initial annual sales of 70,000 for its planned electric Prologue sport utility vehicle when it goes to market in 2024.

Honda plans to add additional electric vehicle models as it aims to have sold a total of 500,000 electric vehicles in the United States by 2030, and to achieve 100% zero emission vehicles sales in North America by 2040.

It comes as President Joe Biden signed an executive order last month setting a target to make half of all new passenger vehicles sold in 2030 zero-emissions vehicles.

The Honda Prologue is being co-developed with General Motors Co (GM.N) and is based on the Detroit automaker's Ultium platform, a modular platform and battery system. Honda and GM are also co-developing an electric Acura-brand SUV.

GM will assemble the Prologue and the Acura SUV -- both of which will go on sale in 2024 -- but Honda has not disclosed which plant will build the vehicles or the name or volume targets for the Acura.

Following the GM-built models, Honda will introduce a series of electrified vehicles through 2030 based on the Honda developed e-Architecture, a new EV platform led by Honda, and will assemble electric vehicles at Honda plants in North America.

Dave Gardner, executive vice president of national operations at American Honda Motor Co, said in a statement Honda will initially focus Prologue sales on California and other states like Texas and Florida.

He said Honda plans to add hybrid-electric systems to more U.S. models.

"Our strategy is focused on introducing a higher percentage of hybrids in core models in the near term, making a committed effort to achieve higher volume leading to the introduction of our Honda Prologue," Gardner said.

The Thomson Reuters Trust Principles.

Oil giant Shell sets sights on sustainable aviation fuel take-off

(Reuters) - Royal Dutch Shell (RDSa.L) plans to start producing low-carbon jet fuel at scale by 2025, in an attempt to encourage the world's airlines to reduce greenhouse gas emissions.

Aviation, accounting for 3% of the world's carbon emissions, is considered one of the toughest sectors to tackle due to a lack of alternative technologies to jet fueled-engines.

Shell, one of the world's largest oil traders, said it aims to produce 2 million tonnes of sustainable aviation fuel (SAF) by 2025, a ten-fold increase from today's total global output.

Produced from waste cooking oil, plants and animal fats, SAF could cut up to 80% of aviation emissions, Shell said.

Shell, which at present only supplies SAF produced by others, including Finnish refiner Neste (NESTE.HE), said on Monday it wants green jet fuel, which can be blended with regular aviation fuel with little need to change plane engines, to make up 10% of its global aviation fuel sales by 2030.

SAF accounts for less than 0.1% of today's global aviation fuel demand, which reached around 330 million tonnes in 2019, investment bank Jefferies said.

Growing the market faces several hurdles, primarily due to the cost of SAF, which is currently up to 8 times higher than regular jet fuel, and the limited availability of feedstock.

Shell said it wants others to follow its lead.

"We also expect other companies to add to it with their own production plants," Anna Mascolo, head of Shell Aviation, told Reuters.

The United States said last week it wants to cut aircraft greenhouse-gas emissions by 20% by the end of the decade by significantly boosting SAF usage.

Anglo-Dutch shell, which aims to reduce emissions from fuels it sells to net zero by 2050, is in the midst of a large overhaul aimed at producing more low-carbon fuels such as biodiesel and SAF, as well as hydrogen.

Shell plans to build a biofuels processing plant at its Rotterdam refinery with an annual capacity of 820,000 tonnes, with SAF set to make up more than half of the output. The plant is expected to start production in 2024. read more

In a new report on the decarbonisation of aviation published together with Deloitte, Shell called for the sector to cut its emissions to net zero by 2050.

The International Air Transport Association, representing most of the world's airlines, aims to halve emissions by then.

Reducing emissions to net zero can be achieved by using more low-carbon fuel and offsetting the remaining emissions through carbon credits.

Shell is also developing synthetic aviation fuel made from hydrogen and recycled carbon.

"Sustainable aviation fuel, whether bio SAF or synthetic SAF, remains the single biggest solution," Mascolo said.

The Thomson Reuters Trust Principles.

American Airlines, Microsoft join Gates-backed program to boost clean energy

(Reuters) - Several U.S. companies, including American Airlines Group Inc (AAL.O), General Motors (GM.N) and Microsoft Corp (MSFT.O), on Monday build on their commitment to clean energy by joining billionaire and Microsoft co-founder Bill Gates' Breakthrough Energy program.

The initiative aims to boost development of technologies to achieve the target of net-zero carbon emissions by 2050.

Its catalyst program aims to raise money from governments, philanthropists and companies to make capital investments to bring down the cost of clean technology.

Bank of America Corp (BAC.N), steelmaker ArcelorMittal SA(MT.LU), Boston Consulting Group (BAC.N) and the philanthropic arm of asset manager BlackRock Inc (BLK.N) have also joined the program, Breakthrough Energy said on Monday.

American Airlines said in a statement it has invested $100 million. The program will initially focus on four key areas: direct air capture, green hydrogen, long-duration energy storage and sustainable aviation fuel.

The support from U.S. companies comes against the backdrop of President Joe Biden's plans to accelerate carbon cutting. Earlier this month, the White House said it was targeting 20% lower aviation emissions by 2030. read more

The Thomson Reuters Trust Principles.

Universal Studios Beijing to draw eager throngs amid uneasy U.S.-China ties

(Reuters) - Universal Studios' Beijing resort was set to open its doors to the public on Monday after a two-decade wait, including delays because of COVID-19.

The highly-anticipated opening takes place amid U.S.-China relations that have deeply deteriorated in recent years.

The park will be U.S.-based Universal's largest and its fifth globally. It is also a first for Beijing, which lacks a big branded theme park to rival the Disney resorts in Shanghai and Hong Kong.

And, it will be the first Universal park with a section dedicated to the movie "Kung Fu Panda" and includes an area based on the Harry Potter franchise, which is popular in China.

All 10,000 tickets for the opening available in a pre-sale on Sept. 14 sold out in three minutes, according to Trip.com Group.

However, many complained on social media about ticket costs, which range from 418 yuan ($64.76) in the low season to 748 yuan during peak periods.

"This is a rare time in a long while when an America-themed topic has attracted such obvious and widespread praise in China," the Global Times, a nationalistic tabloid published by the ruling Communist Party's People's Daily, wrote last week.

The resort was proposed 20 years ago by the Beijing Tourism Group, according to the official China Daily, and is 30% owned by Comcast Corp's (CMCSA.O) Universal Parks & Resorts and 70% by state-owned Beijing Shouhuan Cultural Tourism Investment.

The new Chinese ambassador to Washington, Qin Gang, likened its roller coaster ride to ties between the two countries.

"After all the tumbling and shakes, the roller coaster came to a soft landing in the end," he tweeted on Tuesday.

Universal Studios announced the development of the resort in 2014, saying at the time it would cost $3.3 billion. In 2017, Comcast Chief Executive Brian Roberts said the park could provide $1 billion of operating cash flow per year when it opened.

($1 = 6.4549 Chinese yuan renminbi)

The Thomson Reuters Trust Principles.

Cathay Pacific lowers Q4 capacity forecast as travel restrictions linger

(Reuters) - Hong Kong's Cathay Pacific Airways Ltd (0293.HK) said on Monday it had lowered its passenger capacity forecast for the remainder of the year to 13% of pre-COVID levels, down from an earlier 30% target for the fourth quarter as travel restrictions linger.

The airline said it continued to target cash burn of less than HK$1 billion ($130 million) a month for the rest of the year. read more

Hong Kong lacks a domestic aviation market and has some of the world's toughest pandemic-related travel restrictions.

The city requires fully vaccinated travellers from destinations considered "high-risk", including the United States and Britain, to spend three weeks in hotel quarantine.

Cathay last month said its target of reaching 30% of pre-COVID passenger capacity in the fourth quarter hinged on quarantine rules for passengers and crew being relaxed. read more

Passenger numbers in August were better than in previous months because of strong student traffic from China to the United States and Britain but were 95.3% below the same month in 2019, the airline said.

Cathay said the cargo market strengthened in August, with freighter demand ramping up to peak season levels.

Air cargo accounted for 80% of the airline's revenue in the first half of the year due to the pandemic-related hit to passenger demand.

($1 = 7.7875 Hong Kong dollars)

The Thomson Reuters Trust Principles.

Invest Wisely!

Bulls n Bears 

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INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

Hippo

AGM

virtual

September 17 -  (9am)

Star Africa

AGM

virtual

September 23 -11am

National Unity Day

December 22

Christmas Day

December 25

Boxing Day

December 26

Public Holiday in lieu of Boxing Day falling on a Sunday

December 27

Companies under Cautionary

ART

PPC

Starafrica

Fidelity

Turnall

Medtech

Zimre

Nampak Zimbabwe

 <mailto:info at bulls.co.zw> 

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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