Fortune Minerals : Cobalt News

Reuters - July 21, 2023

Major brands, including the investment arm of the IKEA group, are following automakers' lead in snapping up stakes in suppliers of raw materials and energy, seeking greater control over their production to meet emissions targets and limit disruptions.

Major brands, including the investment arm of the IKEA group, are following automakers' lead in snapping up stakes in suppliers of raw materials and energy, seeking greater control over their production to meet emissions targets and limit disruptions…After global supply chains buckled under pressure from the coronavirus pandemic and the war in Ukraine, a wider array of companies are embracing vertical integration and investing in suppliers of renewable energy, metals, agricultural products and many more…While global supply networks recover from the pandemic shock, fresh impetus is coming from tougher environmental standards, which drive companies to invest in new technologies to reduce their and their suppliers' emissions…Efforts to reduce reliance on China and Russia also play a role, even though for many buying into their supply chains could be a big and costly leap into the unknown…"The events of the last three years have taught businesses a lot about the fragility of supply chains. Vertical integration is first and foremost a strategy that minimizes risk of disruptions," said Rebecca Campbell a partner at White & Case law firm that advises companies on such deals…Export controls Beijing is due to impose next month on gallium and germanium, used in the semiconductor and defence industries, are a case in point…China's move took end-users in multiple sectors by surprise, with some fearing more curbs could follow from the world's largest producer of many raw materials…Although not a new phenomenon, control and ownership of key aspects of production have made a comeback since the pandemic's outbreak in 2020, with global automakers, including GM and Stellantis, under added pressure to go electric fast, investing in lithium, copper and nickel mines…The IMAS Foundation, the investment arm of furniture retailer IKEA's owner, spent over 1 billion euros ($1.12 billion) on "decarbonisation assets and strategies", including stakes in steelmaker H2 Green Steel (H2GS) and battery manufacturer Northvolt…"In times of de-globalisation and higher geopolitical risks, the security of supply has become more important," it said in an email…In the aviation industry, airlines have started to invest in fuel production, concerned about insufficient supply of biofuels which several countries, including Norway, Germany, Indonesia and Britain, will require to be part of jet fuel mix…Supply chain investments are inherently risky, partly due to the cyclical nature of commodity markets, and might only work as temporarily to resolve bottlenecks and polish environmental credentials, say auditors and lawyers who assist companies on such transactions.