Could a joint venture for Hartree Partners and Wanxiang Resources be on the cards?
According to sources from Reuters...
Are privately owned Hartree Partners and Wanxiang Resources setting up a commodities trading joint venture in China?
According to sources from Reuters, that’s exactly what’s happening.
Based in Shanghai and expected to be up and running this year, the venture would represent a further step in Hartree’s bid to branch out from its core energy markets into base and ferrous metals, coal and agricultural commodities.
With neither company confirming or denying the JV, we are left to wonder.
But here’s what we know about Hartree Partners and Wanxiang Resources.
Joint venture at the heart of Hartree
Hartree was established in 1997 as Hess Energy Trading Company (HETCO) which in turn was a joint venture between Hess Corporation and Stephen Hendal and Stephen Semlitz – the founding partners of the company.
It wasn’t until 2014, in which Oaktree Capital acquired Hess Corporation’s interests in HETCO and the new company took on the name Hartree Partners, LP.
The company is a global merchant commodities firm specialising in energy and its associated industries – hence the JV into the metals and coal industries.
Hartree has a global reach spanning 10 offices and approximately 85 traders and originators.
Th growing influence of Wanxiang
Established in 1969, Wanxiang was one of the 120 experimental enterprises chosen by the Chinese State Council.
The company is part of the Wanxiang Group, which focuses on the sustainable development of enterprises. Aiming at developing its information-based management, marketable capital, global service network, world-wide cooperation, and international brand, the Wanxiang Resources trades Base metals and Ferrous Metals in various fields including automobile parts manufacturing, high-tech agriculture, aquaculture as well as supplying new energy, promising to supply high-quality services to customers through a global network.
Wanxiang Resources is one of the major participants in the flow of natural resources in and out of China. It provides logistics, financing and other supply chain services to producers and consumers of commodities.
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Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.