Hungarian Government Announces Public Tender for the Recsk Cu-Au Deposits & Assets

Hungarian National Asset Management Inc., (“MNV”) has announced the public tender for the Recsk Deposit and assets in Hungary.

The Recsk Cu-Au-Pb-Zn-Ag-Mo property in Hungary hosts arguably one of the largest and highest-grade undeveloped copper-gold porphyry and skarn systems in Europe.  With 240,000 metres of drilling, two 8 metre internal diameter, 1,200-metre-deep, concrete lined shafts and 9 kilometres of underground development, the Recsk deposit is estimated to contain 5.6 million tonnes (12 billion pounds) of copper and 4 million ounces of gold. 

Distribution of Copper and Molybdenum on the 700mRL, showing surface drillholes (black), development (blue) over intrusion thickness and thickness of volcanics. Copper grades of greater than 0.2% have been mapped over a strike of 2 kilometres and a width of 800
Recsk_Tender_Review_20180927.1

Cmi Capital Limited

Cmi Capital is available to assist a suitable party to participate in the tender.  Cmi Capital held extended discussions with the Government of Hungary prior to the announcement of the tender and as such has a unique understanding of the deposit and the political and economic environment.  Cmi Capital or an associated corporation seeks a long-term concentrate offtake agreement on commercial terms and may at its sole discretion provide up to US$250 million in an offtake pre-payment repaid from production with the usual customary terms and conditions following completion of an advanced economic & technical study.

 

Sn-W-Critical Metals & Associated Magmatic Systems

Southern Atherton Tablelands. Credit: Cairns Tours

An EGRU conference with a session in honour of Dr Roger Taylor

24 – 28 June 2019

Tinaroo Lake Resort

Tinaroo, Atherton Tablelands, tropical north Queensland, Australia

The conference will address advances and breakthroughs in understanding the setting, genesis and  characteristics of magmatic systems  related to Sn-W-Critical Metal mineralisation, including Rare Metal Pegmatites.   The program will feature presentations from world-class researchers in the field, including:

  • Rolf Romer (GFZ, Potsdam, Germany)
  • Jingwen Mao (Chinese Academy of Geological Sciences, Beijing, China)
  • Shao-Yong Jiang (China University of Geosciences, Wuhan, China)
  • Dr Phillip Blevin (Mineral Systems, Geological Survey of NSW, Maitland, Australia)
  • Zhaoshan Chang (Colorado School of Mines, Denver, USA)
  • David Cooke (CODES, Hobart, University of Tasmania)
  • Dr Peter Pollard (Pollard Geological Services, Brisbane, Australia)
  • Dr Yanbo Cheng (EGRU, James Cook University, Townsville, Australia)

See you at the event –  should be well worth attending.  If anyone is interested in a little pre-confernece rainforest hiking for 2-3 days before the event –  message me.

Sn-W-Critical Metals Conference FF 2018-08-21 LR

Dickinsonia was an animal!

A recent paper in Science authored Ilya Bobrovskiy, Janet Hope and colleagues from ANU, the Russian Academy and European institutions has remarkably (and convincingly) discovered molecules of fat in Dickinsonia, a marine genus of the Ediacaran biota.

Dikinsonia samples from Quantitative study of developmental biology confirms Dickinsonia as a metazoan , Renee S. Hoekzema, Martin D. Brasier, Frances S. Dunn, Alexander G. Liu proceedings of The Royal Society. Published 13 September 2017.DOI: 10.1098/rspb.2017.1348

This has confirmed that the 558 million year old Dickinsonia is the earliest animal in the geological record and maybe a presursor to –  you!

Organically preserved Dickinsonia fossil from the White Sea area of Russia. A Dickinsonia fossilILYA BOBROVSKIY / AUSTRALIAN NATIONAL UNIVERSITY

The strange creature called Dickinsonia, which grew up to 1.4 metres in length and was oval shaped with rib-like segments running along its body, was part of the Ediacara Biota that lived on Earth 20 million years prior to the ‘Cambrian explosion’ of modern animal life.  The Ediacara biota are a diverse assemblage of macroscopic body forms that appear in the sedimentary rock record between 570 million and 541 million years ago. First recognized in Namibia and Australia, these remarkable organisms have since been found in Russia, China, Canada, Great Britain, and other regions. Although they immediately preceded the rapid appearance and diversification of animals in the Cambrian (541 million to 485 million years ago), their position within the tree of life has long been a puzzle. Some Ediacaran fossils appear segmented, but most lack obvious characters such as appendages, a mouth, or a gut that might link them to animal clades.

Dickinsonia costata (~7.7 cm long), SAM P13750/P40679 (South Australian Museum, Adelaide, Australia)

Prior to this study  Dikinsonia affinities were unknown and while its  mode of growth is consistent with a bilaterian affinity some thought that it belong to to the fungi, or even an “extinct kingdom”

Dickinsonia costata (centimeter scale), YPM 35467 (Yale University’s Peabody Museum, New Haven, Connecticut, USA)

Bobrovskiy et al. conducted an analysis using lipid biomarkers obtained from Dickinsonia fossils and found that the fossils contained almost exclusively cholesteroids, a marker found only in animals.  Thus, Dickinsoniawere basal animals. This supports the idea that the Ediacaran biota may have been a precursor to the explosion of animal forms later observed in the Cambrian, about 500 million years ago.

Obtaining evidence of cholesteroids first involved finding exceptionally well preserved fossils.  The Dikinsonia fossils used in this study came from a narrow strata in the remote White Sea are of Russia.

Lead senior researcher Associate Professor Jochen Brocks said the ‘Cambrian explosion’ was when complex  and other macroscopic organisms—such as molluscs, worms, arthropods and sponges—began to dominate the fossil record.

“The fossil fat molecules that we’ve found prove that animals were large and abundant 558 million years ago, millions of years earlier than previously thought,” said Associate Professor Jochen Brocks from the ANU Research School of Earth Sciences.

“Scientists have been fighting for more than 75 years over what Dickinsonia and other bizarre fossils of the Edicaran Biota were: giant single-celled amoeba, lichen, failed experiments of evolution or the earliest animals on Earth. The fossil fat now confirms Dickinsonia as the oldest known animal fossil, solving a decades-old mystery that has been the Holy Grail of palaeontology.”

Abstract

The enigmatic Ediacara biota (571 million to 541 million years ago) represents the first macroscopic complex organisms in the geological record and may hold the key to our understanding of the origin of animals. Ediacaran macrofossils are as “strange as life on another planet” and have evaded taxonomic classification, with interpretations ranging from marine animals or giant single-celled protists to terrestrial lichens. Here, we show that lipid biomarkers extracted from organically preserved Ediacaran macrofossils unambiguously clarify their phylogeny. Dickinsonia and its relatives solely produced cholesteroids, a hallmark of animals. Our results make these iconic members of the Ediacara biota the oldest confirmed macroscopic animals in the rock record, indicating that the appearance of the Ediacara biota was indeed a prelude to the Cambrian explosion of animal life.

Read the Paper Here

 

Low Carbon Policy to Harm Global Forests

Europe’s decision to promote the use of wood as a “renewable fuel” will likely greatly increase Europe’s greenhouse gas emissions and cause severe harm to the world’s forests, according to a new comment paper published in Nature Communications. The authors posit that this new directive “will lead to a vast new cutting of the world’s forests” as additional wood equal to all of Europe’s existing wood harvests will be needed just to supply 5 percent of Europe’s energy.

Forest clearing: Hamilton Urban Forest Coalition. http://tinyurl.com/y7x8sgxg

European officials agreed on final language for a renewable energy directive earlier this summer that will almost double Europe’s use of renewable energy by 2030. Against the advice of 800 scientists, the directive now treats wood as a low-carbon fuel, meaning that whole trees or large portions of trees can be cut down deliberately to burn. Such uses go beyond papermaking wastes and other wood wastes, which have long been used for bioenergy.

The paper also estimates that using wood for energy will likely result in an increase of 10 to 15 percent in emissions from Europe’s energy use by 2050. This could occur by turning a 5 percent decrease in emissions required under the directive using solar energy or wind energy into a 5 to 10 percent increase by using wood.

Europe’s increased wood demand will require additional cutting in forests around the world, but the researchers explain the global impact is likely to be even greater by encouraging other countries to do the same. Already, tropical forest countries like Brazil and Indonesia have announced they, too, will try to reduce the effect of climate change by increasing their use of wood for bioenergy.

Forest clearing Indonesia, Laudato ‘si: http://tinyurl.com/y8u7ftjv

Although wood is renewable, cutting down and burning wood for energy increases carbon in the atmosphere for decades to hundreds of years depending on a number of factors, the researchers explained. Bioenergy use in this form takes carbon that would otherwise remain stored in a forest and puts it into the atmosphere. Because of various inefficiencies in both the harvesting and burning process, the result is that far more carbon is emitted up smokestacks and into the air per kilowatt hour of electricity or heat than burning fossil fuels, the authors explained.

While regrowing trees can eventually reabsorb the carbon, they do so slowly and, for years, may not absorb more carbon than the original forests would have continued to absorb. This results in long periods of time before bioenergy pays off the “carbon debt” of burning wood compared to fossil fuels.

The paper also explains why the European directive’s sustainability conditions would have little consequence. Even if trees are cut down “sustainably,” that does not make the wood carbon free or low carbon because of added carbon in the atmosphere for such long periods of time.

The directive also misapplies accounting rules for bioenergy originally created for the U.N. Framework Convention Climate Change(UNFCCC). Under the rules of that treaty, countries that burn wood for energy can ignore emissions, but countries where the trees were chopped must count the carbon lost from the forest. Although this rule allows countries switching from coal to wood to ignore true emissions figures, it balances out global accounting, which is the sole purpose of those rules, and does not make bioenergy carbon free.

Stephen Croft Wood fired Power Station. The plant is fuelled entirely by biomass material. Over 480,000 tonnes of fuel is needed to power the station every year. http://tinyurl.com/y7rg3oq4

The system does not work for national energy laws, which will be required by the directive. If power plants have strong incentives to switch from coal to carbon-neutral wood, they will burn wood regardless of any real environmental consequences. Even if countries supplying the wood report emissions through UNFCCC, those emissions are not the power plants’ problem.

Finally, the paper highlights how the policy undermines years of efforts to save trees by recycling used paper instead of burning it for energy. Also, as the prices companies are required to pay for emitting carbon dioxide increases over time, the incorrect accounting of forest biomass Europe has adopted will make it more profitable to cut down trees to burn.

Original Research

This comment raises concerns regarding the way in which a new European directive, aimed at reaching higher renewable energy targets, treats wood harvested directly for bioenergy use as a carbon-free fuel. The result could consume quantities of wood equal to all Europe’s wood harvests, greatly increase carbon in the air for decades, and set a dangerous global example.

In January of this year, even as the Parliament of the European Union admirably voted to double Europe’s 2015 renewable energy levels by 2030, it also voted to allow countries, power plants and factories to claim that cutting down trees just to burn them for energy fully qualifies as low-carbon, renewable energy. It did so against the written advice of almost 800 scientists that this policy would accelerate climate change1. This Renewable Energy Directive (RED) is now finalized. Because meeting a small quantity of Europe’s energy use requires a large quantity of wood, and because of the example it sets for the world, the RED profoundly threatens the world’s forests.

Makers of wood products have for decades generated electricity and heat from wood process wastes, which still supply the bulk of Europe’s forest-based bioenergy2,3. Although burning these wastes emits carbon dioxide, it benefits the climate because the wastes would quickly decompose and release their carbon anyway. Yet nearly all such wastes have long been used4.

Over the last decade, however, due to similar flaws in the 2008 RED, Europe has expanded its use of wood harvested to burn directly for energy, much from U.S. and Canadian forests in the form of wood pellets. Contrary to repeated claims, almost 90% of these wood pellets come from the main stems of trees, mostly of pulpwood quality, or from sawdust otherwise used for wood products5.

Comments from the Authors

Tim Beringer, Humboldt-Universität zu Berlin
“The directive reverses the global strategy of trying to subsidize countries to protect their forests and their carbon. Instead of rewarding countries and landowners to preserve forests and the carbon they store, this directive encourages companies to pay them for the carbon in their forests, but only on the condition that they cut the trees down and ship them to Europe to be burned.” 

Bjart Holtsmark, Statistics Norway
“Although the directive encourages countries to harvest wood to burn, it does not require that they do. Countries should follow alternative strategies, focusing on solar in meeting European requirements for more renewable energy.”

Dan Kammen, University of California-Berkeley 
“Compared with the vast majority of what counts as ‘bioenergy by harvesting wood,’ solar and wind have large advantages in land-use efficiency and lower and lower and lower costs. The focus on wood is not only counterproductive for climate change but unnecessary.” 

Eric Lambin, Stanford University and Université catholique de Louvain
“Treating wood as a carbon-neutral fuel is a simple policy decision with complex cascading effects on forest use, energy systems, wood trade and biodiversity worldwide. Clearly, many of these effects have not received due attention.”

Wolfgang Lucht, Potsdam Institute for Climate Impact Research and Humboldt-Universität zu Berlin
“It makes no sense at all to save trees through recycling and then turn around to burn them for energy. There is nothing green, renewable, or environmentally friendly about that. Global forests are not disposable. The European Union should wake up and limit the role of bioenergy in the transition to renewable energies.”

Peter Raven, Missouri Botanical Society
“Any increased demand for wood as fuel will have huge negative impacts on global biodiversity because many kinds of forests throughout the world, including the most biodiverse, will also end up being cut to satisfy the endless demand locally and to send to rich countries as they exhaust their own managed forests.”

Jean-Pascal van Ypersele, Université catholique de Louvain
“European citizens once more experienced the harsh effects of global warming this summer. In the name of reversing climate change, this counterproductive policy will increase deforestation and carbon emissions rather than contribute to decreasing them. More emissions will only make the summers even hotter for decades to centuries.”

Before the Big Bang & Conformal Cyclic Cosmology

What was there before the Big Bang?  This is one of the most perplexing contemplations in physics and astronomy.  There are number of theories to glimpse this distant past, however data is likely very scant, but maybe them is evidence of a prior universe in clear sight.

Here is a series of quite remarkable videos to help you contemplate what went before, before the oldest observable photons, 13.5 GA.

While I strongly recommend that you simply watch these videos in series, the last in the series is likely the most remarkable and my opening comments alluded to this.

Conformal Cyclic Cosmology(CCC) is a scheme whereby the universe is seen to be cyclic even though it never recollapse and bounces back out. Instead it undergoes whats called a conformal rescaling. What’s that ? Watch the film, all will be explained. CCC promises to solve many deep mysteries in cosmology such as why was the entropy of the big bang so low? What happened before the big bang? Where does the dark matter in our universe come from? This film addresses both the theory of CCC and the possibility of experimental verification.

Below you will recognise the image of the Cosmic Background Radiation gathered from the COBE Satellite over a  9 year period.

NINE YEAR MICROWAVE SKY http://map.gsfc.nasa.gov/media/121238/index.html Nine Year Microwave Sky The detailed, all-sky picture of the infant universe created from nine years of WMAP data. The image reveals 13.77 billion year old temperature fluctuations (shown as color differences) that correspond to the seeds that grew to become the galaxies. The signal from our galaxy was subtracted using the multi-frequency data. This image shows a temperature range of ± 200 microKelvin. Credit: NASA / WMAP Science Team WMAP # 121238 Image Caption 9 year WMAP image of background cosmic radiation (2012)

While much was made of the homogeneity of the data and the implications of this there are obvious patters in the data and various researchers have found concentric low variance circles in the CMB as can be seen in the image below.

Concentric low variance circles in the CMB data, Adam DeAbreua et al, Journal of Cosmology and Astroparticle Physics

Penrose and Meisner suggest that Conformal Cyclic Cosmology implies that these structures are the product of the collision of supermassive black holes which occurred towards the end (or indeed the infinity) of an earlier universe.  This is a most remarkable suggestion.  In a future universe a similar pattern may be all that is residual from our universe. Conformal Rescaling of gravity at the scale of the singularity could reconcile gravity and quantum mechanics.

Enjoy, I most certainly have.

Free Carried Interests in Mining Projects, States Need to Rethink the Strategy

Natural Resource Governance Institute has issued a report on revenues received from listed mining companies in Ghana.  As many who have done the cashflow analysis have long known that a free carried interest, funded out of cashflow is a less than effective tool for garnering rent from resource projects. Projects can often take many years to repay capital and if this period corresponds with low or stagnant commodity prices then dividend payments may be low.  In effect the state is fully exposed to commodity price and operational risks.  A better solution is a competitive royalty, fee and taxation environment which is adequately regulated. 

One of the issues with a carried interest is that this often involves representation on the board of the operating entity and as such creates immediate conflicts of interest for directors and heated domestic competition for these positions.   That said, there are often political arguments for a carried interest, arguments about national interest.  In addition it has been argued that being represented on the board of the operating entity allows governments to “keep an eye on” the operator.  A better solution is robust oversight by a suitably trained and funded Department of Mines.

ghana-gold-mining-revenue-analysis-company-disclosures

In Ghana the majority of international mining companies, including Asanko Gold, Golden Star Resources, Endeavour Mining, Kinross Gold, Perseus Mining and Xtra-Gold Resources, have disclosed payments-to-governments reports under the Extractive Sector Transparency Measures Act (ESTMA) in Canada. In addition Gold Fields, AngloGold Ashanti and Newmont Mining have made voluntary disclosures regarding the payments they make to the Ghanaian government.

Data were sourced from companies complying with the Canadian, Extractive Sector Transparency Measures Act (ESTMA).

In 2017 nearly three quarters of the payments to Ghanaian government entities by ESTMA companies in the gold sector arose from royalties, with five companies paying a total of USD 57 million. A further 22 percent of the payments from these ESTMA companies were in the form of corporate income tax. While six operating companies paid royalties in 2017, only two, Kinross Gold Corporation and Endeavour Mining paid corporate taxes.

2017 gold mining payments to governments by payment type from ESTMA companies (USD in millions)

Ghana’s Vice President Mahamudu Bawumia has questioned the utility of the government’s 10 percent equity interest in mining operations, stating at the IMF’s Regional Economic Outlook for sub-Saharan Africa, that the lack of revenue generated from the government’s equity share was because “many of the mining companies say they are not making profits to pay dividends but they keep mining, notwithstanding the fact that they are unprofitable.”3

The government of Ghana holds these shares and the non-tax revenue unit of the Ministry of Finance collects the revenues. The government is provided this equity interest without having to make financial contributions to the development or operations of the project. The government has equity share interests in every gold mining operation in the country bar those owned by Newmont Mining or AngloGold Ashanti following the signing of updated mining development agreements. In the case of AngloGold Ashanti, the government has a stake of 1.55 percent in the global company AngloGold Ashanti Limited.

The NRGI report concludes that “the payments-to-governments disclosures made by international mining companies operating in the country suggest that if revenue generation is the primary purpose of this state equity participation, then the government may want to reconsider this approach”.  This has been evident to many in the industry for a very long time.  

Madagascar announces 2018-19 offshore licensing round

OMNIS, in partnership with TGS and BGP, announce a licensing round in Madagascar, to be launched at Africa Oil Week, 5-9th November 2018.

Exploration in Madagascar began in the early 20th century with the discovery of heavy oil-rich sedimentary basins in the west, however this frontier region remains relatively under-explored. The Island shares a maritime boundary with Mozambique, which is in the same oil province where large quantities of natural gas have been discovered. Studies conducted in collaboration with TGS and BGP have resulted in new data that suggest there is significant potential for future discoveries both on and offshore.

“With the aim of intensifying offshore exploration activities, we are delighted to announce that OMNIS will be inviting investment from interested parties, during a licensing round to start in November 2018. We are working together with TGS and BGP to create an attractive environment for exploration in the offshore, and we are confident that this will signal the start of renewed investment for the upstream oil sector in Madagascar,” Voahangy Nirina Radarson, General Manager of OMNIS, commented.

We are looking for an industry partner who can leverage our local knowledge and presence in Madagascar to secure some of the most prospective offshore acreage in East Africa.  Email:  admin.mdg@cmi-capital.com 

Jupiter Has Two Magnetic South Poles

Jupiter as seen from the Juno spacecraft.
NASA/JPL-Caltech/SwRI/MSSS/Gabriel Fiset

A complex dynamo inferred from the hemispheric dichotomy of Jupiter’s magnetic field

The Juno spacecraft, which is in a polar orbit around Jupiter, is providing direct measurements of the planet’s magnetic field close to its surface. A recent analysis of observations of Jupiter’s magnetic field from eight (of the first nine) Juno orbits has provided a spherical-harmonic reference model (JRM09) of Jupiter’s magnetic field outside the planet.

The non-dipolar nature of the magnetic field in the northern hemisphere and the dipolar nature in the southern hemisphere is apparent. The equatorial view is centred near the Great Blue Spot and shows the linkage of magnetic field lines that enter through the Great Blue Spot. The contoured surface on which the field lines shown start and end is at r = 0.85RJ, where the density of field lines is proportional to the radial magnetic field strength and is depicted by the colour scale (red outward flux, blue inward flux).

This model is of particular interest for understanding processes in Jupiter’s magnetosphere, but to study the field within the planet and thus the dynamo mechanism that is responsible for generating Jupiter’s main magnetic field, alternative models are preferred.

The authors report maps of the magnetic field at a range of depths within Jupiter. They find that Jupiter’s magnetic field is different from all other known planetary magnetic fields. Within Jupiter, most of the flux emerges from the dynamo region in a narrow band in the northern hemisphere, some of which returns through an intense, isolated flux patch near the equator. Elsewhere, the field is much weaker. The non-dipolar part of the field is confined almost entirely to the northern hemisphere, so there the field is strongly non-dipolar and in the southern hemisphere it is predominantly dipolar. The authors that Jupiter’s dynamo, unlike Earth’s, does not operate in a thick, homogeneous shell, and we propose that this unexpected field morphology arises from radial variations, possibly including layering, in density or electrical conductivity, or both.

Original Research

Full Text

Geological Belts, Plate Boundaries, and Mineral Deposits in Myanmar

Geological Belts, Plate Boundaries and Mineral Deposits in Myanmar

 

Just received the above titled book from Elsevier for review.  I had the great pleasure of spending some time in the field in Myanmar with Andrew Mitchell in 2017 and this important contribution by him is a remarkable testament to  his life’s work.  He has enormous knowledge of the geology and mineral deposits of Myanmar and that is obvious in this text.

I will be undertaking a chapter-by-chapter review of the text over the coming 6 weeks or so and posting here.  A quick review:  The text is well written, beautifully presented and the numerous maps provide new geological insights.  As a largely personal contribution this is an unusual work and will be important to minerals industry professionals and researchers and importantly, geoscience educators in Myanmar.

Geological Belts, Plate Boundaries, and Mineral Deposits in Myanmar, Mitchell, A., Elsevier, pp 524, ISBN 978-0-12-803382-1 , https://doi.org/10.1016/C2014-0-00978-1, 2018

Description

Geological Belts, Plate Boundaries and Mineral Deposits in Myanmar arms readers with a comprehensive overview of the geography, geology, mineral potential and tectonic plate activity of Myanmar. The book focuses on the nature and history of the structural belts and terranes of Myanmar, with particular emphasis on the mineral deposits and their relationship to stratigraphy and structure. The country has a long history of plate tectonic activity, and the most recent plate movements relate to the northward movement of the India plate as it collides with Asia. Both of these are responsible for the earthquakes which frequently occur, making the country a geologically dynamic region. Additionally, Myanmar is rich in mineral and petroleum potential and the site of some of Southeast Asia’s largest faults. However, many geoscientists are only recently becoming familiar with Myanmar due to previous political issues. Some of these barriers have been removed and there is emerging international interest in the geology and mineral deposits of Myanmar. This book collates this essential information in one complete resource. Geological Belts, Plate Boundaries and Mineral Deposits in Myanmar is an essential reference for economic geologists, mineralogists, petroleum geologists, and seismologists, as well as geoscience instructors and students taking related coursework.

renewables struggle without subsidies

Without subsidies and the ongoing presence of backup power based on fossil-fuel generation, the outlook for more renewable energy in Australia is extremely uncertain. Indeed, without the intervention of governments, the salad days for renewable energy will quickly fade.

The Australian 1st September, 2018

Judith Sloan

One of the most astute investors in the world is Warren Buffett. Since 2004 his company, Berkshire Hathaway, has invested more than $US17 billion in renewable energy, predominantly wind farms. In case you think Buffett is some bleeding-heart global warming believer, here is his explana­tion for the investment: “I will do any­thing that is basically covered by the law to reduce Berkshire’s tax rate … We get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

Under the US production tax credit scheme, American taxpayers forked out more than $US14bn to renewable energy operators between 2014 and last year. The scheme provides for a tax credit of $US23 per megawatt hour and each project can claim this credit for 10 years. Unfortunately for the renewable energy sector, the scheme is being phased out.

Moreover, with the dramatic cut to the federal company tax rate (from 35 per cent to 21 per cent) implemented by the Trump administration, the value of tax credits for existing renewable energy schemes suddenly has dropped.

Just recently the plan to construct the largest wind farm in the US, to be located in Oklahoma, has been shelved. The business case for the project just didn’t stack up without the tax credits. Its loca­tion in a remote, albeit windy, part of the country meant that close to 900km of transmission lines would need to be built. The cost of and local opposition to the erection of the pylons were further factors killing the project.
It’s early days, but there are indications that investment in renewable energy worldwide may have peaked and is trending down.

To be sure, there is the left-wing Californian government proposing that the state’s electricity generation should be carbon-free by 2045, although electricity still will be sourced from interstate generators using fossil fuels.

By contrast, the recent election of a conservative government in Ontario — Canada’s most populous province — and the wipe-out of the previous progressive Liberal government has meant a rapid reversal of fortune for renewable energy there. The Liberals had held power since 2003, implementing a radical green agenda. Coal-fired electricity plants were closed, albeit with significant delays, and incentives were put in place for investment in renewable energy projects, particularly wind farms.

Ontario joined a limited cap-and-trade scheme with California and several US eastern states, thereby imposing a form of carbon tax in Ontario. Interestingly, the emissions reduction targets set by the Liberal government still were not achieved, notwithstanding these interventions. The election of Progressive Conservative Premier Doug Ford has taken a big stick to most of these policies. The latest cap-and-trade auction has been cancelled and approvals for new wind farms have been withdrawn. The $C14,000 ($14,863) subsidy to the purchasers of electric vehicles has been cancelled.

At a federal level in Canada, the Trudeau government has run into difficulties with its plan to impose an escalating carbon tax. The original idea was that the tax would be levied in all provinces deemed to be acting inadequately to reduce emissions. Some provincial governments are threatening to sue the federal government. And the Trudeau government has needed to tweak its carbon tax plans to deal with the commercial threats to energy-intensive, trade-exposed firms operating in Canada. This situation has been made more difficult by the recently imposed tariffs on some Canadian exports by the US administration.

In Germany, the solar industry basically has collapsed in line with sharply reduced subsidies from the government. Subsidies to wind turbines have oper­ated since 2000 but are due to run out in 2020. Some older turbines will need to be decommissioned, raising several thorny issues, including the lack of provisioning for the costs by the operators. The blades are incapable of being recycled and the turbines are anchored to the ground using hundreds of tonnes of concrete, making the decommissioning process problem­atic. One estimate puts a potential loss of existing turbines in Germany at 5 per cent of the stock by 2022.

German Chancellor Angela Merkel is under pressure to extend the life of coal-fired power stations. And recently she rejected the proposal of several EU countries to lift the shared emissions reduction target by 2030 from 40 per cent to 45 per cent. This is notwithstanding her earlier support for the higher target.

China often is cited as an example of a country that has invested heavily in renewable energy. What is less often cited is China’s substantial investments in new coal-fired and nuclear power stations. Providing affordable and reliable electricity across the country while shutting down old coal-fired power stations with damaging particulate emissions has been the top priority in China for some time.

A major event occurred in June with the decision of the Chinese government to slash the subsidies paid to solar power operators. In the future, there will be no subsidies and the incentives for existing projects are being cut to 10c per kilowatt hour. As a result of this change, the price of solar stocks has fallen significantly. (We should note here the dominance of China in the production of solar panels. Of the 10 largest firms, seven are China-based and another is based in Hong Kong. There is a large supplier in Canada but the firm has Chinese links.)

So what does this mean for Australia? The renewable energy sector is keen to spruik its economic case. It notes that about 7200MW of capacity has been added in the past few years, although this is nameplate capacity rather than actual 24/7 generation capacity. It also notes that the cost of renewable energy is falling, more so for solar than wind.

The combination of the dying days of the renewable energy target and active subsidisation of renewable energy projects by state and territory governments, mainly through the reverse auction process, has driven this latest burst of investment in wind and solar farms. However, no new projects are proceeding in which operators are taking the merchant risk. (A possible exception could be Chinese-backed projects.) Without power purchasing agreements from users, no new projects are likely to proceed.

The World Around Us!