Raphael Stevens

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    U.S. government researchers visit a Korean mine as the race against China for critical minerals heats up

    U.S. government researchers recently visited a South Korean mine to assess progress towards boosting supply of a critical metal called tungsten from areas outside China, the mine operator said Wednesday.
    The Sangdong Mine, owned by a subsidiary of Canada-based Almonty Industries, is set to resume operations this year.
    With China dominating over 80% of the metal’s supply chain, Almonty claims the mine could potentially produce 50% of the rest of the world’s supply of tungsten — an extremely hard metal used for making weapons, semiconductors and industrial cutting machines.

    Workers in July 2019 expand a mine in Germany intended to increase supplies of tungsten and fluorspar. 
    Picture Alliance | Picture Alliance | Getty Images

    BEIJING — U.S. government researchers recently visited a South Korean mine to assess progress towards boosting supply of a critical metal called tungsten from areas outside China, the mine operator said Wednesday.
    The Sangdong Mine, owned by a subsidiary of Canada-based Almonty Industries, is set to resume operations this year. Tungsten is an extremely hard metal used for making weapons, semiconductors and industrial cutting machines.

    With China dominating over 80% of the metal’s supply chain, Almonty claims the mine could potentially produce 50% of the rest of the world’s tungsten supply.
    The U.S. has not commercially mined tungsten since 2015, according to the latest annual report from the U.S. Geological Survey, a government agency that analyzes the availability of natural resources.
    Four mineral resource scholars visited the Sangdong Mine in a trip led by Sean Xun, assistant chief at the agency’s National Minerals Information Center, the report said.
    The U.S. Geological Survey would make a “significant update” on its assessment of the mine in its 2025 report due out in the first three months of next year, it added.

    The agency did not immediately respond to a request for comment made outside of U.S. business hours.

    The Biden administration has identified critical minerals and announced tariffs on tungsten and others as part of a broader effort to bolster national security.
    “Of the 35 mineral commodities deemed critical by the Department of the Interior, the United States was 100 percent reliant on foreign sources for 13 in 2019,” according to the U.S. Geological Survey.
    Almonty has said it’s spending at least $125 million to reopen the Sangdong Mine, which closed in the 1990s.
    China, in the past year and a half, has started to use its leverage in parts of the global critical mineral supply chain to control exports.
    Beijing has so far avoided any restrictions on tungsten. But forthcoming rules to limit exports of a similar metal called antimony have raised expectations that tungsten will soon be subject to more Chinese export restrictions.
    “If Donald Trump wins the US presidency and follows through on his threat to dramatically hike tariffs on China, Beijing might respond with new export controls on critical minerals or deploy existing controls more forcefully,” Gabriel Wildau, managing director at consulting firm Teneo, said in a note Tuesday.
    “Chinese regulators may also apply controls selectively, denying minerals to specific foreign companies that are viewed as supporting Washington’s technological containment agenda.”
    He added that the U.S. Energy Department has already awarded $151 million in grants to encourage domestic mining and processing of critical minerals, and western nations are expected to respond to Beijing’s “calibrated weaponization of critical minerals by accelerating efforts to reduce dependence on China.” More

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    Lego revenue jumps 13% in first half of 2024, boosted by Lego Fortnite and diverse brick sets

    Lego said revenue during the first six months of the year jumped 13%, reaching 31 billion Danish krone, or about $4.65 billion.
    The company is seeing strength across its portfolio, especially with Lego Icons and Lego Creator, and through its partnership with Epic Games’ Fortnite.
    While consumers in China are spending less frequently and less on big-ticket items, Lego still sees “long-term potential” in the area.

    Customers at a Lego store in Shanghai, China, on Feb. 3, 2024.
    Costfoto | Nurphoto | Getty Images

    An inflation-fueled sales slump hit the toy industry in the first half of 2024, but one company is gaining market share brick by brick.
    On Wednesday, Lego said revenue during the first six months of the year jumped 13%, reaching 31 billion Danish krone, or about $4.65 billion.

    Niels Christiansen, CEO of the privately held Danish toymaker, told CNBC that the company is seeing strength across its portfolio, especially with Lego Icons and Lego Creator, and through its partnership with Epic Games’ Fortnite.
    Last year, Lego saw a trend of consumers “trading down” or opting for lower-priced sets, while still buying the same volume as the year before. This year, volume is up, Christiansen said.
    “To the extent they traded down last year, they’re not trading further down,” he said. “So that has stabilized. And we see almost all of the growth is actually growth in volume.”

    Meanwhile, publicly traded rival Mattel saw net sales fall 1% in the first six months of 2024 and Hasbro reported that its net revenue fell 21% between January and the end of June. Mattel is facing tough comparisons from toy sales fueled by “Barbie” in 2023, and Hasbro is still reeling from its divestment of eOne.
    Lego has continued to build on pandemic-era growth with a diverse slate of products that cater to kids and adults alike. In addition to sets tied to popular franchises such as Harry Potter and Star Wars, Lego also has innovative design options for consumers to build flowers and succulents, famous works of art and animals.

    Sales in the U.S. and Europe remain strong, Christiansen noted, while China sales are flat. He said consumers in the region are spending less on bigger-ticket items, and their frequency of purchasing is down.
    However, Lego is not giving up on expansion in China. Christiansen said there is still “long-term potential” in the area.
    Of the 40 Lego stores that opened in the first quarter, 20 were in China. Similarly, of the 60 planned openings in the second half of the year, 20 are set for China.

    Sustainability

    Christiansen also touted Lego’s sustainability efforts. So far this year, the company has nearly doubled the amount of renewable and recyclable materials it uses in its bricks compared to full-year 2023.
    “That’s a good milestone,” he said. “That’s a good step forward. [We are] spending quite significantly on that in a couple of ways, primarily in buying material that is more expensive, because mass balance material is more expensive than just standard.”
    Christiansen noted that Lego is not passing that cost on to consumers.
    “By actually being willing to pay a premium to get to this product, we also created an incentive for [suppliers] to actually develop the kind of products and to establish more production capacity for these type of products. We are working really as an industry need to try to put more speed on that entire process.”
    Over the next few years, Lego hopes to source half its raw materials from sustainable sources.

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    JD.com shares climb after announcing $5 billion share buyback, outperforming decline in Hang Seng

    Shares of JD.com inched up about 1.2%, outperforming the Hang Seng Index’s decline of 0.82% on Wednesday.
    The announcement is JD.com’s second buyback this year, after announcing a $3 billion buyback in March.

    JD.com set up an Innovative Retail division that houses its grocery business 7Fresh.
    Bloomberg | Bloomberg | Getty Images

    Hong Kong-listed shares of Chinese online retailer JD.com climbed 1.2% on Wednesday, outperforming the decline on the Hang Seng index after the firm announced a $5 billion buyback late Tuesday.
    U.S. listed shares of the firm rose 2.24% on Tuesday after the announcement. Both JD.com’s Hong Kong and U.S. shares have dropped about 20% year to date.

    In comparison, Hong Kong’s benchmark Hang Seng index was down about 0.82% Wednesday, but is up about 4% for the year so far.

    Stock chart icon

    The announcement is JD.com’s second buyback this year, after announcing a $3 billion buyback in March.
    In response to the move, Chelsey Tam, senior equity analyst at Morningstar, said that the decision to announce the share buyback is “not surprising.” She explained, “It is a common theme in China when share prices and growth are low.”
    Tam also pointed to Vipshop, another Chinese e-commerce player that has increased its own share buyback program last week.
    China’s e-commerce sector has been dogged by a slow domestic economy.

    Earlier this month, Alibaba’s second-quarter results missed expectations on both the top and bottom lines. On Monday, Temu-owner Pinduoduo saw its worst ever session after its second-quarter results missed both revenue and earnings per share expectations.
    Back in February, Alibaba announced a $25 billion share buyback after it missed revenue targets for the fourth quarter of 2023. More

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    Chinese EV company Xpeng sees shares pop 6% after it launches mass-market car

    Xpeng shares rose after the Chinese electric car company said prices for its new mass-market Mona brand would start as low as $16,812, far below that of Tesla’s Model 3.
    The Chinese automaker said orders for the Mona M03 electric coupe exceeded 10,000 just 52 minutes after the car’s formal launch Tuesday evening in Beijing.
    Xpeng shares remain more than 45% lower for the year so far.

    He Xiaopeng, founder of Chinese EV company Xpeng, said on Aug. 27 that the startup’s next ten years will focus on integrating artificial intelligence.
    CNBC | Evelyn Cheng

    BEIJING — Xpeng shares rose after the Chinese electric car company launched its new mass-market Mona brand on Tuesday with prices starting as low as $16,812, far below that of Tesla’s Model 3.
    The Chinese automaker said orders for the Mona M03 electric coupe exceeded 10,000 just 52 minutes after the car’s formal launch in Beijing.

    Xpeng’s U.S.-listed shares closed up 6.5% in New York trading on Tuesday, while its Hong Kong-traded shares rose nearly 2% early Wednesday morning.
    “With cars priced under $20,000, China is further cementing its new position as the world center for automotive manufacturing,” Michael Dunne, founder and CEO of consulting firm Dunne Insights, said Wednesday on CNBC’s “Squawk Box Asia.”
    “China can produce cars more cheaply than anyone else in the world,” he said.

    Stock chart icon

    Xpeng shares extended gains from Monday after a filing showed the company’s founder and CEO, He Xiaopeng, bought at least 1 million shares each of the company’s stock traded in the U.S. and Hong Kong.
    The total U.S. purchase was worth nearly $10 million, according to the filing, giving He about 18.8% of the company’s total issued share capital.

    Xpeng shares have lost more than 45% so far this year.
    Tesla shares closed nearly 2% lower on Tuesday. Shares of Chinese electric car companies Zeekr and Li Auto rose, while those of Nio closed mildly lower.
    — CNBC’s Sheila Chiang contributed to this report. More

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    Nordstrom shares climb 5% as earnings top estimates, but retailer issues cautious guidance

    Nordstrom handily beat Wall Street’s earnings estimates as its efforts to cut costs and boost efficiencies begin to bear fruit.
    Despite the strong earnings beat, the company issued tepid guidance for the full year as it contends with softening demand for luxury goods.
    The department store operator has been leaning on its off-price banner Nordstrom Rack for growth.

    Signage outside a Nordstrom Rack retail store in New York on Aug. 25, 2022.
    Gabby Jones | Bloomberg | Getty Images

    Nordstrom on Tuesday posted earnings that blew past Wall Street’s expectations, indicating the department store is making strides in its efforts to cut costs and boost efficiencies. 
    Though the Seattle-based retailer posted earnings per share that were 25 cents higher than expected, it issued tepid guidance for the full year. 

    Nordstrom now expects adjusted earnings per share to be between $1.75 and $2.05, compared to a previous range of $1.65 to $2.05. It anticipates sales will be in a range of a 1% decline to 1% growth from the prior year, compared to previous guidance of down 2% to up 1%. 
    In a news release, Nordstrom CEO Erik Nordstrom said the company is optimistic about the second half of the year despite the cautious guidance.
    “Our second quarter results were solid, and we’re encouraged by the continued topline strength in both banners and the progress we’re making to expand gross margin and increase profitability,” said Nordstrom. “We’re confident in our outlook for the remainder of the year and look forward to sustaining the momentum we’ve built.”
    Shares rose about 5% in extended trading.
    Here is how the department store did in its second fiscal quarter compared to what Wall Street was anticipating, based on a survey of analysts by LSEG:

    Earnings per share: 96 cents adjusted vs. 71 cents expected
    Revenue: $3.89 billion vs. $3.90 billion expected

    The company’s reported net income for the three-month period that ended Aug. 3 was $122 million, or 72 cents per share, compared to $137 million, or 84 cents per share, a year earlier. Excluding one-time items related to supply chain impairments, the retailer posted adjusted earnings of 96 cents per share. 
    Sales rose to $3.89 billion, up about 3.4% from $3.77 billion a year earlier. Revenue came in just shy of analysts’ expectations.  
    Across the company, comparable sales increased 1.9%, while gross merchandise value jumped 3.5%. It is unclear how much of that GMV uptick was related to price increases versus volume.
    As consumers continue to pull back on discretionary spending in the face of persistent inflation and high interest rates, retailers have been working to improve operations and cut costs to protect profits against softening demand. 
    During the quarter, Nordstrom’s profits fell compared to the same period a year ago, but earnings grew over the past six months. Last year, Nordstrom reported a net loss of $67 million in the six months that ended July 29, 2023, but during the same period this year, it posted a profit of $83 million. 
    Nordstrom has said it is working to improve its supply chain. Last quarter, it said the time it takes for online orders to arrive was more than 5% faster. It has also improved the way merchandise is making its way to customers and stores, which it said has helped drive higher conversion and lower return rates. 
    Another key focus area for the company has been growing its off-price banner, Nordstrom Rack. Over the past couple of quarters, momentum has been growing at Nordstrom Rack and has helped prop up the company’s overall results. During the quarter, sales at Nordstrom Rack were up 8.8%, while comparable sales increased 4.1% compared to the same period a year ago.
    That compares to Nordstrom’s mainline banner, which saw net sales and comparable sales each increase just 0.9%. 
    Nordstrom has been working to build more Rack locations and has opened 11 new locations so far this fiscal year, with a goal of opening at least 22 by the end of the year. The focus on Rack has been critical for Nordstrom’s ability to compete with off-price giant TJX Cos., the owner of TJ Maxx and Marshall’s, and capture consumers who are still spending but eager for cheaper options and deals.
    The off-price sector has seen explosive growth for more than a year, but Rack missed out on the beginning of that trend. To reverse the slump, the company has focused on opening more locations, hiring off-price veterans and sharpening its focus on well-known brands.

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    NFL wants a cut of private equity investment profits

    The NFL informally told owners and private equity firms it wants to take a percentage of potential private equity profits on sales of ownership stakes if the league votes to allow the firms to own pieces of teams.
    It is unclear if the NFL’s decision will deter future private equity investment.
    The league voted Tuesday to allow private equity ownership of up to 10% of teams.

    Brock Purdy, #13 of the San Francisco 49ers, prepares to take a snap in the first quarter against the Kansas City Chiefs during Super Bowl LVIII at Allegiant Stadium in Las Vegas on Feb. 11, 2024.
    Michael Reaves | Getty Images

    The National Football League has informed owners and investment firms that it intends to take a percentage of private equity profits on any future sales of ownership stakes, according to people familiar with the matter.
    NFL owners voted Tuesday to allow private equity firms to take a maximum 10% stake in teams.

    The league has never allowed private equity investment before. Major League Baseball, the National Basketball Association and the National Hockey League already allow up to 30% of teams to be owned by investment firms, though the cap for individual funds is between 15% and 20%.
    No other league takes a percentage of the so-called carry — the percentage of a fund’s investment profits that managers typically receive as compensation — for all private equity firms. It was unclear heading into the owners’ meeting if the NFL plan would apply to all or only some firms, or what percentage of the profits the league wanted to take.
    The NFL has informally told investment firms that if they make a return on an investment, it wants a portion of the profits to be returned to the league.
    It was also unclear if the NFL’s plans to take a piece of profits would deter future investment from private equity. The initial approved firms include Ares Management, Sixth Street Partners and Arctos Partners, and a consortium of investors including Dynasty Equity, Blackstone, Carlyle Group, CVC Capital Partners and Ludis, a platform founded by investor and former NFL running back Curtis Martin.
    The NFL declined to comment.
    Over the past 20 years, the league’s total value has risen from $23.46 billion to $190 billion, a 710% gain, according to Sportico. The S&P 500 index has risen about 660% during the same time span.

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    Dollar General, Dollar Tree and Kroger customers pay over $90 million a year in cash-back fees, federal agency finds

    Dollar General, Dollar Tree and Kroger have charged customers who ask for cash back in recent years.
    Their cash-back fees amount to more than $90 million a year, Consumer Financial Protection Bureau reports.
    Such fees may disadvantage those in banking deserts, where they don’t have easy access to cash for free. Retailers say they offer a lifeline to such consumers, who may not otherwise be able to get cash.

    A Dollar General store in Germantown, New York, on Nov. 30, 2023.
    Angus Mordant/Bloomberg via Getty Images

    Three of the nation’s largest retailers — Dollar General, Dollar Tree and Kroger — charge fees to customers who ask for “cash back” at check-out, amounting to more than $90 million a year, according to the Consumer Financial Protection Bureau.
    Many retailers offer a cash-back option to consumers who pay for purchases with a debit or pre-paid card.

    But levying a fee for the service may be “exploiting” certain customers, especially those who live in so-called banking deserts without easy access to a bank branch or free cash withdrawals, according to a CFPB analysis issued Tuesday.
    That dynamic tends to disproportionately impact rural communities, lower earners and people of color, CFPB said.
    Not all retailers charge cash-back fees, which can range from $0.50 to upwards of $3 per transaction, according to the agency, which has cracked down on financial institutions in recent years for charging so-called “junk fees.”
    More from Personal Finance:The IRS method of ‘last resort’ to collect overdue taxesHow investors can prepare for lower interest ratesWhy remote work has staying power
    Five of the eight companies that the CFPB sampled offer cash back for free.

    They include Albertsons, a grocer; the drugstore chains CVS and Walgreens; and discount retailers Target and Walmart. (Kroger proposed a $25 billion merger with Albertsons in 2022, but that deal is pending in court.)
    “Fees to get cash back are just one more nickel and dime that all starts to add up,” said Adam Rust, director of financial services at the Consumer Federation of America, an advocacy group.
    “It just makes it harder and harder to get by,” he said. “It’s thousands of little cuts at a time.”

    Luis Alvarez | Digitalvision | Getty Images

    A spokesperson for Dollar General said cash back can help save customers money relative to “alternative, non-retail options” like check cashing or ATM fees.
    “While not a financial institution, Dollar General provides cashback options at our more than 20,000 stores across the country as a service to customers who may not have convenient access to their primary financial institution,” the spokesperson said.
    Spokespeople for Kroger and Dollar Tree (which operates Family Dollar and Dollar Tree stores) didn’t respond to requests for comment from CNBC.
    Kroger, Dollar General and Dollar Tree were respectively the No. 4, 17 and 19 largest U.S. retailers by sales in 2023, according to the National Retail Federation, a trade group.

    Cash back is popular

    The practice of charging for cash back is relatively new, Rust explained.
    For example, in 2019, Kroger Co. rolled out a $0.50 fee on cash back of $100 or less and $3.50 for amounts between $100 and $300, according to CFPB.
    This applied across brands like Kroger, Fred Meyers, Ralph’s, QFC and Pick ‘N Save, among others.
    However, Kroger Co. began charging for cash back at its Harris Teeter brand in January 2024: $0.75 for amounts of $100 or less and $3 for larger amounts up to $200, CFPB said.

    Cash withdrawals from retail locations is the second most popular way to access cash, representing 17% of transactions over 2017-22, according to a CFPB analysis of the Diary and Survey of Consumer Payment Choice.
    ATMs were the most popular, at 61%.
    But there are some key differences between retail and ATM withdrawals, according to CFPB and consumer advocates.
    For instance, relatively low caps on cash-back amounts make it challenging to limit the impact of fees by spreading them over larger withdrawals, they said.
    The average retail cash withdrawal was $34 from 2017-22, while it was $126 at ATMs, CFPB said.

    Banking deserts are growing

    However, retailers may be the only reasonable way to get cash for consumers who live in banking deserts, experts say.
    More than 12 million people — about 3.8% of the U.S. population — lived in a banking desert in 2023, according to the Federal Reserve Bank of Philadelphia.
    That figure is up from 11.5 million, or 3.5% of the population, in 2019, it found.
    Generally speaking, a banking desert constitutes any geographic area without a local bank branch. Such people don’t live within 10 miles of a physical bank branch. The rise of digital banking, accelerated by the Covid-19 pandemic, has led many banks to close their brick-and-mortar store fronts, according to Lali Shaffer, a payments risk expert at the Federal Reserve Bank of Atlanta.
    These deserts “may hurt vulnerable populations” who are already less likely to have access to online and mobile banking, she wrote recently.

    Retailers blame banks

    Retail advocates say banks are to blame for cash-back fees.
    Merchants must pay fees to banks whenever customers swipe a debit card or credit card for purchases. Those fees might be 2% to 4% of a transaction, for example.
    Since cash-back totals are included in the total transaction price, merchants also pay fees to banks on any cash that consumers request.

    The “vast majority” of retailers don’t charge for cash back, and therefore take a financial loss to offer this service to customers for free, said Doug Kantor, general counsel at the National Association of Convenience Stores and a member of the Merchants Payments Coalition Executive Committee.
    “Banks have abandoned many of these communities and they’re gouging retailers just for taking people’s cards or giving people cash,” he said.
    But consumer advocates say this calculus overlooks the benefit that retailers get by offering cash back,
    “You’d think they’d see this as a free way to get customers: coming into [the] store because the bank branch isn’t there,” Rust said. “Instead they’re going ahead and charging another junk fee.” More

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    Washington Commanders strike stadium naming rights deal with Northwest Federal Credit Union

    The Washington Commanders’ stadium will be named Northwest Stadium, per a new agreement with Northwest Federal Credit Union that runs through the 2030-31 season.
    The home of the Washington, D.C., NFL team has been without a naming rights partner since FedEx ended its deal with the Commanders in February, two years early. 
    The Commanders are looking to build a new stadium in either Washington, D.C., or Virginia.

    Washington Commanders fans celebrate after NFL team owners unanimously approved Josh Harris’ purchase of the team from Daniel Snyder, at The Bullpen’s “Burgundy and Sold” party on July 20, 2023.
    Julia Nikhinson | The Washington Post | Getty Images

    The home of the Washington Commanders just got a new name.
    The team’s stadium will be renamed Northwest Stadium, per a new agreement with Northwest Federal Credit Union that runs through the 2030-31 season, according to a person familiar with the matter. The deal is worth an average annual value in the low $8 million range, according to the person.

    The home of the Washington, D.C., NFL team has been without a naming rights partner since FedEx ended its deal with the Commanders in February, two years early. The shipping giant had a deal with the football team that ran from 1999 through the 2025 season.
    “As we continue to work toward our goal of building the Commanders into an elite franchise that consistently competes for championships, we are excited to welcome our team and fans to Northwest Stadium and look forward to creating incredible memories together on the field and in the communities we serve,” said Washington Commanders Managing Partner Josh Harris in a statement.
    The new agreement with the Northwest Federal Credit Union adds to an existing stadium sponsorship deal that came in at around $2 million per year, according to the person familiar with the matter. That deal did not include naming rights.
    The expanded partnership includes Northwest branding across the stadium, including a new stadium logo. Northwest will also serve as the team’s jersey patch partner for off-season and in-season practices. The partnership will also extend new benefits to Commanders fans who are members of Northwest Federal Credit Union, including discounts on tickets and merchandise.
    Last year, Northwest Federal Credit Union became the Commanders’ official credit union partner.

    The Commanders are looking to build a new stadium in either Washington, D.C., or Virginia. Should the team move into a new stadium before the 2030-31 season ends, the Commanders have the right under the new agreement to seek a new naming rights partner for the new stadium, the person familiar with the matter said. The credit union does not have the rights to the new stadium or right of first refusal for those rights, the person added.
    The Los Angeles Rams currently have the most valuable stadium naming rights deal in the NFL. That deal, with SoFi, is for $625 million over 20 years, according to a person familiar with that agreement. SoFi Stadium is also home to the NFL’s Chargers, but Rams owner Stanley Kroenke owns the stadium, so the Rams collect 85% of stadium sponsorship revenue.

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