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Credit: Commodity traders have built up large cash reserves. Credit: BHP

Commodity traders had their second-best year on record in 2023, with profits of around $100bn and large cash accumulations. 

Although not all results are public yet, profits at the largest independent trading houses are expected to have fallen by 33% from the record level of $150bn in 2022. However, 2023 still marked a continuation of the positive trend in the industry that began in 2018, according to consultancy Oliver Wyman. Industry cash reserves are estimated at between $70bn and $120bn. 

The consultancy’s latest report on commodity trading said: “2022 was a year dominated by idiosyncratic events, and record margins were not sustainable. But the structural factors that drive commodity trading profitability remain in place”. 

Speaking to Bloomberg, Adam Perkins, consultant at Oliver Wyman and co-author of the report, said: “We saw pretty good margins overall and that is practically because things continue to be a little bit tight on the supply-demand side.” 

Profits in the metals and mining sector fell the most from the highs of 2022 as the price of coal dropped by 50%.

The EU Council has given final approval to its Critical Raw Materials Act as it looks to diversify away from Chinese supply chain dominance.

The final text, officially adopted on Monday, identifies two lists of materials – 34 critical and 17 strategic – that are crucial for the green and digital transitions, as well as the defence and space industries, the Council said in a press statement.

The act, first proposed at the end of 2022 and part of the EU’s bigger Green Deal legislation, will also establish three benchmarks for the supply and processing of critical minerals used in the bloc. It stipulates that 10% of supply should come from local extraction, with 40% to be processed in the EU and 25% to come from recycled materials.

The New South Wales (NSW) Labour Government has banned forms of seabed mining in an effort to protect its beaches and coastal environment. 

Having received support across the NSW Parliament to implement the ban, the Environmental Planning and Assessment Amendment (Seabed Mining and Exploration) Bill 2024 amends the Environmental Planning and Assessment Act 1979 to prohibit seabed petroleum and mineral exploration and recovery in NSW coastal waters. NSW is the first Australian state to ban such activities. 

The ban will only apply in state-controlled waters, which only stretch three nautical miles from the shoreline. Waters beyond, up to the limit of Australia’s exclusive economic zone, are controlled by the federal government.

At least 13 people are currently trapped under rubble following a rock collapse at Russia’s Pioneer gold mine.  

In a statement on Telegram, governor of the Amur region Vasily Orlov said that rescue work had begun in the first minutes of the emergency, and emergency services “are mobilizing all forces and means to help the victims”. Orlov added that mechanised clearing of the transport slope is under way, as well as efforts to restore communications.  

He stated: “A regional emergency regime has been introduced in the Amur region. Mine rescue teams from the Russian Ministry of Emergency Situations from Neryungri and Khabarovsk arrived to help the mine specialists” 

The cause of the rock collapse remains unknown and the likelihood of a successful rescue has not yet been made public.

China’s ambassador to Canada, Cong Peiwu, has said that his country will continue to do business in Canada’s critical minerals sector despite increased scrutiny placed on Chinese investments. 

The Canadian Government recently signalled its concern about Chinese control of its critical mineral supplies. Ottawa will now consider how to handle offtake agreements that function as loans or investments by China in Canadian mining companies. 

Reacting to the measures, Cong said the Trudeau administration is “wrong” to prevent Chinese investors from buying majority stakes in domestic mining companies.  

The move comes after Prime Minister Justin Trudeau announced his intention to limit Chinese investment more than a year ago. In 2022, his administration forced Chinese investors to withdraw from three lithium companies under the critical mineral divestment strategy.