Economy

The writer is head of emerging markets economics at CitiDeveloping countries live their economic lives at the mercy of the US Federal Reserve. This may sound blunt, but that makes it no less true. When US monetary conditions are loose, capital is pushed towards emerging economies, making it easier for these countries to fund themselves. And when the Fed tightens, as it is doing these days, the wave reverses course as capital seeks higher yields back in the US.This cycle is usually understood as resulting from the impact of higher or lower US interest rates on capital flows to developing countries. Yet it’s not just the yield on US assets that affects these countries; the dollar exchange rate also plays a big role in this drama.Here are four ways in which a stronger dollar makes life tough for emerging economies.First, a stronger dollar tends to depress global trade growth. It is the dominant currency for invoicing and settling a huge swath of global trade transactions. Since the purchasing power of non-US currencies declines when the dollar strengthens, an appreciation of the US currency tends to make the world poorer and less engaged in trade.Since developing countries tend to be what economists call small, open economies that are especially dependent on global trade, anything that puts downward pressure on that is likely to be unhelpful for them.Second, a stronger dollar tends to erode the creditworthiness of developing countries that have debt denominated in the US currency. Dollar appreciation makes it more expensive for countries to buy the US currency they need to service their debts. This is likely to be most painful for lower-income countries that typically have only a constrained ability to borrow internationally in their own currencies even at the best of times.Third, a strong dollar is likely to be inconvenient for China these days, and what’s bad for that country is generally unhelpful for emerging economies given their linkages to Chinese supply chains and commodities demand.Although it is superficially attractive to think that a weakening renminbi might be a convenient way of boosting Chinese exports, there are two bigger forces at work in the opposite direction.One is that by driving up the cost of imported commodities, a weaker renminbi makes life tough for small- and medium-sized enterprises in China that in any case have been facing a prolonged squeeze on their profitability. And another is that a weakening renminbi tends to trigger capital outflows from China, something that authorities in Beijing prefer to avoid as they seek to keep expectations on its currency positive.Finally, a stronger dollar now is likely to be more inflationary for emerging economies than was the case in the past. Recent years have allowed us to forget that currency depreciation in a developing country can quickly lead to inflation. That’s because the so-called “pass-through” from the exchange rate to inflation has indeed tended to be relatively low in recent years.

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Yet the past may not be a good guide to the present. One big reason why exchange rate depreciations haven’t proved inflationary in recent years is simply that global inflation was stubbornly low. That’s no longer true. It is worth worrying that at a time when inflation is accelerating, a currency depreciation is more likely to add a kicker to domestic price pressures. Add combustible material to a fire and you get more fire.The world economy is a fairly hostile environment for developing countries these days: rising recession risks in the west; an uncomfortable slowdown in China; diminished availability and higher cost of funding as investors become more risk averse; accelerating inflation almost everywhere; and increasing concern about the availability of food in a number of countries.And that’s just in the foreground. In the background, the prospect of de-globalising efforts by policymakers in the US, in Europe and in China to achieve supply chain resilience will come at the expense of future flows of foreign direct investment to emerging economies.With all this going on, a strengthening dollar is the last thing developing countries need. Yet the problem may not go away soon. In the early 1980s — the last time the US had a truly stubborn inflation problem to deal with — the dollar went up by close to 80 per cent. History may not quite repeat itself, but if the dollar is going to keep strengthening with anything like the ferocity of 40 years ago, the ride will be bumpy for emerging economies.  More

Within months of his election last year, Zambia’s president Hakainde Hichilema had succeeded in negotiating a $1.4bn IMF bailout for the debt-stricken southern African country. But hammering out a deal with all its creditors, chief among them China, could take much longer. With Beijing now the biggest bilateral lender to low-income countries, Zambia’s travails are a test case of its willingness to take the lead in restructuring the debt obligations of defaulting states. Until now, Beijing has negotiated with its borrowers behind closed doors, one to one.At a time of rising economic stress when Sri Lanka is in default and Pakistan is close to it, other countries that are heavily indebted to Beijing are keeping a close eye on proceedings in Lusaka, as are its other creditors. The Zambian crisis also illustrates how Chinese loans come from a variety of government institutions whose interests often vary, adding extra complexity to efforts to reach a deal.“The composition of the debts of developing countries has shifted dramatically over the past 10 years toward China and the private sector,” David Malpass, president of the World Bank, told the Financial Times. “China recognises that [engaging with Zambia’s other creditors] is an important way to work with the global community. It’s an important step in that China is recognising its role in debt restructurings.”Zambia became the first country during the pandemic to default, missing payments on $17bn-worth of foreign debt in 2020. After negotiating the rescue package with the IMF, Zambia needs talks with creditors to move swiftly so it can reboot growth and development. Before the fund can release the cash, it wants “assurances” from other official creditors — of which the biggest is China with an estimated $6bn in loans — that they will agree to debt relief. Little is known about the terms on which China has lent and how Beijing will behave.China is not a member of the Paris Club, set up to restructure loans granted by western governments, and has voiced concerns about the austerity measures the IMF imposes on cash-strapped debtors. Different Chinese entities from policy banks to commercial lenders issue loans, each with their own priorities. Deborah Bräutigam, director of the China Africa Research Initiative (CARI) at Johns Hopkins University, said it was important to understand that “there is no single China” but rather a “fragmented authoritarianism”.In the case of Zambia, the lenders include the China International Development Cooperation Agency and others led by Eximbank of China and China Development Bank. According to CARI, the loans were made under widely varying terms. Zambia’s president Hakainde Hichilema. After negotiating a rescue package with the IMF, Zambia needs talks with creditors to move swiftly so it can reboot growth and development © Spencer Platt/Getty ImagesThe likely lengthy debt workout in Zambia also points to a wider flaw in global handling of sovereign defaults, which the World Bank has warned could soon surge to levels last seen in the 1980s. This month Lazard, the French group advising Zambia, said that a common framework, set up during the pandemic by the G20 group of large economies to ensure that debt restructurings could be done quickly, was too vague. Lack of guidance on co-ordination “creates a lot of frustrations for creditors — be they private or official — but also for debtor countries,” Lazard said. Malpass, a frequent critic of China’s obstinance, has called for a rethink of the framework. He said commercial creditors should sit alongside their sovereign counterparts during debt negotiations, rather than being presented later with a fait accompli. But with the $1tn Belt and Road Initiative making China the most significant bilateral lender so far this century, reform appears unthinkable without Beijing’s buy-in. “China has the leverage to delay or potentially prevent the common framework from proceeding,” said Kevin Daly, portfolio manager for emerging market debt at abrdn and a member of a committee representing Zambia’s bondholders. “It’s not a stretch to say its success or failure hangs on Zambia.”Chinese lenders have adopted an approach different from that of other commercial creditors. They have been willing to extend maturities and grant payment holidays to struggling debtors, but reluctant to accept any reduction in the amount of money they are owed over fears, observers say, of the political backlash in Beijing. This puts them at odds with commercial creditors such as bondholders.

The likely lengthy debt workout in Zambia points to a wider flaw in global handling of sovereign defaults, which the World Bank has warned could soon surge to levels last seen in the 1980s © Waldo Swiegers/Bloomberg

Beijing recognises that it is under a lot of pressure to figure out new solutions. “Existing methods, led by loan extensions and debt relief [mainly of interest-free loans] are harder to continue,” a government adviser said. Yet China’s finance ministry and central bank, the People’s Bank of China, are at odds over what the solutions might be. “The finance ministry is in general more cautious in giving concessions as doing so would exacerbate its fiscal burden. As the biggest shareholder of policy lenders like China Development Bank and the Exim Bank, it will bear the losses of restructuring of interest-free loans and other low-interest policy loans,” the adviser said. “In contrast, commercial lenders like ICBC, which are regulated by the PBoC, and [so] by extension the PBoC, are open to a variety of restructuring methods that could help shore up losses sooner but may force lenders to write off some of the bad loans,” she said, adding that they were keen to work together to minimise losses.

Others advise caution. “Is this China coming into the fold? Absolutely not,” said Douglas Rediker, senior fellow at the Brookings Institution, adding that it would be “naive to believe that any one instance of China being co-operative will be transferable to any other instance”.A recent call between Hichilema and China’s president Xi Jinping was seen as a breakthrough and enabled talks, co-led by Beijing, in Paris earlier this month. French officials said the talks went well and that discussions would continue. “It is a commitment they have made,” said Emmanuel Moulin, head of the French Treasury and chair of the Paris Club. “But now they need to deliver.”These glimmers of hope mean Zambian officials are optimistic that a deal can be reached. “In view of the fact that China is finally on board and is speaking out about the need for the IMF to act swiftly,” said one official in Lusaka. “This is the time to give the process a bit more patience.” More

The writer is a senior fellow at Harvard Kennedy School and chief economist at KrollIt has been 10 years since then European Central Bank president Mario Draghi made his famous promise to do “whatever it takes” to hold the eurozone together. How ironic that the same man is now at the helm of the country that might just bring the currency union back into crisis. Italian 10-year government bond yields jumped after the ECB announced it would end its bond-buying programme by July, and then consider raising interest rates. The spread to German Bund yields, a chief measure of financial stress in Europe, reached its widest since 2013. ECB officials calmed markets by holding a crisis meeting to announce they will create an anti-fragmentation tool that works better than the two it already has. Unfortunately for Italy, and the eurozone, the third time may not be the charm. At the June 15 emergency meeting, the ECB announced it will reinvest maturing bonds “flexibly” under its pandemic emergency purchase programme (Pepp). But the mechanism for reinvestment is unclear. If Pepp reinvestments can be withheld (shrinking the ECB’s balance sheet temporarily) and then deployed in a single country all at once, it could be an incredibly powerful tool. But it’s unclear this will be allowed. There are significant political constraints as well. I doubt the German Bundesbank would be happy to swap Bunds with BTPs on its balance sheet. The second existing tool is Outright Monetary Transactions (OMT). Created during the 2012 debt crisis, OMT involves the ECB buying a country’s sovereign debt in the secondary markets — as long as that country has agreed to strict conditionality. It has never been used, largely because countries have made it clear they would not agree to take fiscal marching orders from the European Stability Mechanism (ESM). While it still exists, it is in effect defunct. And so the ECB governing council has tasked staff with devising a new tool to address fragmentation. They hope to announce it at the next policy meeting on July 21. I fear it will come up short. The Pepp reinvestment scheme is limited in size and free from conditionality, while OMT is unlimited and has strict conditionality. The new anti-fragmentation tool will fall somewhere in between. To reassure investors, the new mechanism will need to be surprisingly large. But how large is that? And to what end? As fiscal policies diverge in the eurozone, spreads between government bond yields should widen. How will the ECB define what spreads are appropriate versus unacceptable? If the ECB announces the spreads it is targeting, investors will test it. To overcome opposition from northern European countries concerned about moral hazard and avoid legal challenges, the anti-fragmentation tool must have conditions. Clearly the conditionality of a full programme under the ESM is too much. One option is only to allow countries to access the anti-fragmentation tool if they are not in an excessive deficit procedure for deficits or debts that are too high, or if they meet their Recovery and Resilience fund milestones. But government bond yields can move swiftly, while EDP and RRF reviews are political processes that take time. What’s more, one reason Italy is inspiring the hurried creation of this anti-fragmentation tool is that it might not clear this lower bar for participation. Its primary budget deficit (not including debt servicing costs) was just under 4 per cent of gross domestic product in 2021 and it has a relatively poor record when it comes to absorbing EU funds. Time is also not on Italy’s side. It has about €200bn in debt to roll over later this year and an additional €305bn next year. The average weighted maturity of Italian government debt is roughly seven years. This compares with about 18 years for Greece. Furthermore, Italy is due to hold an election by June 2023. Italian debt will seem even riskier if Draghi exits and populists maintain momentum. In March 2020, ECB president Christine Lagarde (in)famously stated the central bank is “not here to close spreads . . . There are other tools for that and other actors to actually deal with those issues.” That is wrong. The other tools are ineffective and the other actors — namely fiscal authorities — are not stepping up. Markets are calm at the moment, but with tepid growth, high inflation and high deficits and debt burdens in the eurozone, a damp squib for an anti-fragmentation tool could spark another crisis. More

The UK is having an immensely confusing debate about the steel industry and rule-following. This is partly because, in the moral morass that is Downing Street, it was steel tariffs that reportedly prompted the resignation of Boris Johnson’s ethics adviser Lord Christopher Geidt. He has since said this was merely one example of a broader disregard for international law.And it is partly because the government’s approach to both trade and the steel industry is being reimagined for political reasons on the hoof.To recap: after the Trump administration imposed 25 per cent tariffs on steel in 2018, the EU took steps to stop metal shut out of the US from washing into Europe. After Brexit, a new body — the Trade Remedies Authority — was charged with looking at those safeguards to check they were suitable for buccaneering, free trade-loving Global Britain.The TRA was set up as an independent entity making evidence-based decisions. In other words, it was designed to be as divorced from political meddling as possible. This lasted until it delivered a finding the government didn’t much like. When the body last year suggested scrapping nine of 19 safeguards on steel products, the government took back control of the process, passing emergency legislation to allow it to extend five of those measures temporarily while four lapsed. It then asked the TRA to rerun its analysis and reconsider the work on a new, broader basis.Anyone attempting to read the 271-page result, released last week, would have some sympathy with Geidt in heading for the door. But, noted Sam Lowe, director of trade policy at Flint Global, the TRA effectively stood by the methodology and results of its original analysis. But with different questions come different answers: it said the new directions from the government did indeed produce results that justified keeping the tariffs in place. The only thing more inherently political than trade policy is steelmaking, particularly for a government elected on a promise of levelling up the areas that do it. Still, the disintegration of the post-Brexit commitment to lower trade barriers has been quick and definitive — and it involves staying more aligned with the EU than the original analysis (which the steel sector maintains was flawed) suggests is merited.Whether or not this constitutes a breach of World Trade Organization rules isn’t at all clear — and won’t be unless someone brings a lengthy case and wins. Turkey has already challenged the EU safeguards unsuccessfully. But it is, at the very least, unhelpful to have overhauled your rigorous process of analysis and decision-making midway through in order to get a different answer.Boris Johnson’s comments when asked about plans for tariffs (including a related issue about reassessing the exemptions offered to developing nations) have muddled things further. The industry, he said, needed “much cheaper energy and cheap electricity” and “until we can fix that” UK steelmakers should have the same protection as in other European countries. These are two separate issues. The steel industry has complained, with some justification, for years about high UK electricity prices compared with France and Germany. The disparity, with UK prices at £35 per MWh — or 60 per cent — higher than Germany’s on UK Steel’s latest numbers, has historically been down to domestic policy and network costs, according to the trade body. The government, having long resisted this kind of intervention, has lately taken action: it has increased the relief on carbon pricing for heavy energy users, currently worth a few pounds a megawatt hour, and pledged to review network costs. This pleases the sector immensely. But it falls short, argues David Bailey at the University of Birmingham, of the kind of comprehensive industrial policy that is needed to boost investment and decarbonise the industry.What it doesn’t do is justify tariffs to protect the steel sector while the UK attempts to get its domestic policy in order. No wonder everyone is [email protected]@helentbiz More

G7 members are to explore ways of curbing energy costs, including via possible caps on the price of oil and gas, at a summit that has been overshadowed by fears of a recession induced by rising inflation. Officials on Monday evening settled on summit conclusions that seek to develop solutions to reducing Russia’s hydrocarbon revenues while minimising the negative impacts of high energy prices, officials said.According to a draft text seen by the Financial Times, leaders will explore the “feasibility” of introducing temporary price caps on imports of energy — a reference to a US-led push for a ceiling on the Russian oil price. A G7 official said earlier that capitals agreed it was a good idea, but a “great deal of work” remained to be done to make it a reality. The G7 leaders were meeting four months into a war in Ukraine which has pushed up the price of food and hydrocarbons, triggering fears of a global recession. The summit, hosted by Germany in the Bavarian Alps, is due to conclude on Tuesday. The leaders condemned Monday’s “abominable attack” on a shopping mall in the Ukrainian city of Kremenchuk, in a statement soon afterwards, and warned that indiscriminate attacks on innocent civilians “constitute a war crime”. “Russian President Putin and those responsible will be held to account,” they said.The G7 leaders, who were addressed by Ukraine’s president Volodymyr Zelenskyy earlier in the day via video link, also said they would continue to provide financial, humanitarian and military support for Ukraine “for as long as it takes”. “We will not rest until Russia ends its cruel and senseless war on Ukraine,” their statement said.The move on price caps on Russian oil comes alongside a French proposal for higher global oil production, an idea that arose as G7 leaders sought ways to ease the looming energy crunch and alleviate the pressure on energy-importing economies. French officials focused during discussions on Monday on ways of moderating prices via higher oil output. In particular, France wants to explore ways of bringing production from Venezuela and Iran, both subject to US sanctions, back on the market. US president Joe Biden has already courted Nicolás Maduro’s authoritarian regime in Venezuela in an attempt to cool the market. The G7’s conclusions underscore the deep alarm among its members’ leaders about the toll the Ukraine war is wreaking on their economies. They are set to agree to have their ministers evaluate the feasibility of a price cap as a matter of urgency.

Officials say the cap could be enforced via limits on the availability of European services, including insurance for Russian oil shipments. Officials caution that the scheme is highly complex and will need intensive technical work. It could face challenges in the EU where sanctions require the consent of all 27 member states. “We are supportive of the basic structure,” said one G7 official about the ceiling on the Russian oil price. “But the details need to be hammered out.”Another said that all G7 states agreed with the “basic idea that we have to reduce the sources of revenue for Russian oil”.Macron’s calls for higher production came after Opec and its allies agreed earlier this month to accelerate oil production in July and August. The US has been putting pressure on the cartel’s linchpin, Saudi Arabia, to cool the crude price rally as it hangs over the global economy. Biden is undertaking a trip to the Middle East in July, including a planned stop in Saudi Arabia. Additional reporting by Victor Mallet in Paris More

A Russian missile hit a busy shopping mall in central Ukraine on Monday, triggering a blaze in which the number of dead may be “impossible to imagine”, said the country’s president, who described the attack as a “terrorist” act. Hours after Volodymyr Zelenskyy pleaded with G7 leaders for more missile defence systems following a series of attacks at the weekend, Ukraine’s president posted a video on Telegram of the missile attack in Kremenchuk, about 320km south-east of Kyiv on the Dnipro river, that showed the shopping mall ablaze. “The occupiers fired missiles at the mall, where there were more than a thousand civilians,” Zelenskyy said in the post. “The mall is on fire, rescuers are fighting the fire, the number of victims is impossible to imagine,” he added. In a speech on Monday night, Zelenskyy said the Russian state had “become the largest terrorist organisation in the world”, adding that buying Russian oil and maintaining ties with its financial institutions was “giving money to terrorists”.Dozens of strikes have rocked Ukrainian cities in recent days, including areas far from frontline battles, just as leaders of G7 countries started their summit in the German Alps. In Schloss Elmau, G7 leaders vowed to impose new sanctions on Russia’s ability to import technologies for its arms industry as they promised to step up their security commitments to Ukraine. The group of seven advanced economies said they would “align and expand targeted sanctions to further restrict Russia’s access to key industrial inputs, services and technologies”.More from the G7 summit: Energy: Emmanuel Macron wants to see a drive for higher global oil production as the French president seeks ways of bringing down the cost of energy.Climate change: Major global companies are pushing world leaders to step up action to tackle climate change at the G7 summit, calling for large-scale carbon pricing and measures to boost demand for clean technology.

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Thanks for reading FirstFT Asia and here’s the rest of the day’s news — Emily Five more stories in the news1. Japan tries to avert Tokyo blackout The Japanese government on Monday called on businesses and the public in the Tokyo area to cut electricity use, saying a lack of generating capacity risked plunging the capital into a power blackout. The blackout alert, the second this year, is likely to revive contentious debate about restarting Japan’s nuclear plants.2. Trump’s plans for Spac deal suffer blow after subpoenas Donald Trump’s plans to take his media business public have suffered a further blow after a federal grand jury issued subpoenas to a blank-cheque company that is set to merge with Trump Media and Technology Group.3. Credit Suisse found guilty over Bulgarian drug money failings Credit Suisse has become the first domestic bank to be found guilty of a corporate crime by Swiss authorities after a court found the lender failed to stop the laundering of Bulgarian drug money. The verdict was handed down in the southern Swiss city of Bellinzona by the country’s highest criminal court on Monday4. Naspers to sell more of Tencent stake in bid to revive shares The South African internet group Naspers, Tencent’s biggest shareholder, has abandoned a pledge not to sell stock in China’s most valuable company as it seeks to finance a buyback to help its struggling share price.5. Hajj flights from Israel to Saudi Arabia included in talks Discussions are under way on a deal that would allow Palestinians with Israeli citizenship to fly directly to Saudi Arabia to perform the hajj and umrah religious pilgrimages, according to people familiar with the matter. The initiative is one of several being discussed ahead of US president Joe Biden’s trip to Israel and Saudi Arabia next month.The day aheadAustralian foreign minister visits Malaysia Penny Wong will visit Malaysia to meet her counterpart Saifuddin Abdullah, defence minister Hishammuddin Hussein, and trade and industry minister Azmin Ali. (The Diplomat) Nato meeting Officials will gather in Madrid on Tuesday for three days of discussions, including Nato’s expansion in the wake of Russia’s invasion of Ukraine. Yesterday Nato announced it is increasing its forces on high alert by more than sevenfold to 300,000.Scottish first minister outlines independence plan Nicola Sturgeon is expected to set out in detail how she plans to hold a second independence referendum. Join the FT in partnership with Seismic at Strategies For Dealing With The Great Resignation on June 30 where we will discuss the challenges and opportunities presented by the Great Resignation, with a focus on training and coaching successful sales teams. Register for free today.What else we’re readingXi’s fraying relationship with the middle class After a return to gruelling lockdowns under President Xi Jinping’s zero-Covid policy, a new trend has emerged: runxue, the study of how to get out of China for good. Trapped in a web of unpredictable and chaotic lockdown rules, many Chinese are now dreaming of a permanent escape.

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What’s a good (and bad) way to leave your job? We too often fail to manage job endings well. The consequences not only affect the person leaving, but can also harm staff remaining — and the company itself. Naomi Shragai, a business psychotherapist and author, shares her top tips for amicable endings. ‘Sanctuary states’ for abortion as US legal battles loom The overturning of Roe vs Wade, triggered automatic abortion bans in 13 Republican states, with more expected. Meanwhile, pro-choice legislators have proposed or already passed legislation to codify abortion rights and legal protections. The moves add to an increasingly complex patchwork of abortion rules across the US based on party lines. Explainer: Our reporter parses the crucial passages from the ruling on abortion rights.Crypto and meme corporate bonds may follow their own path The crash of some of the flagbearers of the equity bubble has been painful for investors. Less noticed are the losses of their bonds. Such gaps illuminate differences in the ownership and returns for stocks versus bonds, writes Ellen Carr at Barksdale Investment Management.Can we avoid disasters, and should we even bother trying? In his book The Precipice, philosopher Toby Ord argues that humanity has reached a dangerous moment in its existence. One in which it has developed the means to subject itself to an existential catastrophe but not yet the wisdom or the knowledge to say for certain that we will avoid it.Summer reads Looking for a page-turner? Check our Laura Battle’s 10 top fiction recommendations.

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PHOENIX, Ariz. (Reuters) -Albemarle Corp plans to build a lithium processing plant in the United States that would produce as much of the electric vehicle battery metal as the entire company produces today, a bullish bet on America’s all-electric future, an executive said on Monday. The plan reflects Albemarle (NYSE:ALB)’s emerging strategy to lead the U.S. lithium renaissance, from mine development to processing to manufacturing types of the metal used to make high-end EV batteries.Eric Norris, head of Albemarle’s lithium division, said the company has seen a major shift in the last nine months in the United States with an “unprecedented” number of EV manufacturing plants announced, a harbinger the company believes will fuel a surge in lithium demand. The company as a result aims to build a processing plant with 100,000 tonnes of annual capacity in the U.S. Southeast somewhere within rail access of a major port, Norris said. “There isn’t enough (lithium) supply yet to supply the ambitions of the U.S.,” Norris told the Fastmarkets Lithium Supply and Battery Raw Materials conference in Phoenix, Arizona. “This (processing plant) will be essential for our success in the future.”Albemarle is in active discussions with automakers on buying supply from the facility, Norris said. Albemarle already supplies Tesla (NASDAQ:TSLA) Inc, as well as several other major automakers.While Albemarle had spoken vaguely in the past about building a U.S processing plant, it used Monday’s conference to announce the specific plan and said it will be key as the company aims to boost its overall lithium production capacity fivefold to 500,000 tonnes annually by 2030. The U.S. plant would be of a similar design to a processing plant Albemarle recently opened in Kemerton, Western Australia, though it would need to cost less than Kemerton, whose costs ballooned far above its initial target of $1.2 billion, Norris said. Albemarle plans to self-fund the facility, though it could apply for U.S. Department of Energy loans, he said. The plant would be supplied from lithium extracted from the company’s Kings Mountain mine in North Carolina, which is currently mothballed but may reopen as soon as 2027. The Kings Mountain facility would likely compete with a planned lithium mine and processing complex in a nearby North Carolina county from Piedmont Lithium Inc (O:PLL), which faces regulatory and local pushback. Unlike Piedmont’s mine, Kings Mountain would be a reopening of a facility that closed in the 1980s, a distinction that Norris said he expects to work in Albemarle’s favor.”This is an existing mine in a town that is very mining oriented,” Norris said. “We’re very present in the community.” More

U.S. bank Citi and pollsters YouGov said the expectations for inflation in five to 10 years fell to 4.0% in June from 4.2% in May, a move Citi described as encouraging.Inflation expectations for 12 months time were steady at 6.1%, the survey showed.BoE rate-setters are watching surveys for signs that high inflation – which hit a 40-year record of 9.1% last month – is becoming entrenched in the psychology of the British public, which would make it harder to bring inflation back to the BoE’s 2% target.Citi economist Benjamin Nabarro said inflation expectations were still elevated.”However, we see little in today’s data that should provide a further impetus for an outsized 50 basis point move (in interest rates) in August,” Nabarro added.Financial markets show a roughly 73% chance that the BoE will raise its Bank Rate to 1.75% from 1.25% at its next policy decision on Aug. 4. More