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EXCLUSIVE Major buyers of Russian oil struggle with bank guarantees -sources

Models of oil barrels and a pump jack are displayed in front of Ukrainian and Russian flag colors in this illustration taken, February 24, 2022. REUTERS/Dado Ruvic

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  • Russian oil importers cannot open letters of credit
  • Ship owners refuse to load in Russia
  • Shipping rates for Russia jump
  • More sanctions awaited, all eyes on SWIFT

LONDON, Feb 24 (Reuters) – The global oil market was thrown into chaos on Thursday after Russia invaded Ukraine, with top buyers of Russian oil struggling to secure guarantees at Western banks or find ships to take crude from one of the world’s largest producers.

At least three major buyers of Russian oil have been unable to open letters of credit from Western banks to cover purchases on Thursday, four trading sources said, citing market uncertainty after the Russian invasion.

Russia produces every tenth barrel in the world and oil prices jumped to above $105 per barrel on Thursday, their highest since 2014, due to fears of disruptions.

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In the Black Sea, a Turkish-owned ship was hit by a bomb off the coast of Ukraine’s port city Odessa, prompting shipping companies to avoid calling at Black Sea ports. read more

Greece urgently recommended all Greek ships immediately leave Ukraine and Russia territorial waters in the Black Sea, ship brokers and a senior Greek maritime ministry official said on Thursday.

The oil market is already suffering from tight supplies due to years of low investment and amid booming demand as pandemic-linked restrictions ease around the world.

“Banks are not willing to open LCs for the moment so it is a bit of a standoff,” one of the sources said. He asked not to be named due to the sensitivity of the issue.

Letters of credit from the bank of the buyer are standard practice in commodities trading and guarantee the seller’s bank that payment will be made in full and on time.

Top Russian oil buyers include Western oil majors such as BP and Shell, ENI, TotalEnergies, Equinor, Chevron and Exxon Mobil and trading houses such as Vitol, Glencore, Trafigura, Gunvor and Mercuria.

The sources did not name which banks refused to issue LCs.

The West has pledged tough sanctions against Russia for the invasion, which could potentially include cutting Russia off the SWIFT financial transaction system.

But it would also have severe implications for the western economy as it could disrupt exports of much-needed commodities amid galloping inflation.

Russia exports around 4-5 million barrels per day (bpd) of crude and another 2-3 million bpd of refined products. China, the EU, South Korea, India and Japan are its main buyers.

Some traders spoke of the Iranian syndrome, when major western institutions exercised restraint and caution before sanctions have been even imposed for the fear of transactions potentially breaching future regulations.

“We look at all deals case by case. But no hard stop,” a senior executive at a major European bank said, indicating a slowdown for Russian oil and commodity deals.

Most top Western banks are active in financing oil and commodities and issue LCs.

It was unclear to what extent the lack of letters of credit could disrupt Russian exports, with some traders saying it would take at least several days for companies and banks to figure out the new legal environment.

Meanwhile, shipping rates to load at Russian ports and discharge in northern Europe have tripled in one day to World Scale 300, or about $2.3 million per ship, from World Scale 100, as many ship owners now refuse to call at Russian ports.

“Some 90% of ship owners are telling us they will sit and assess the situation,” a ship broker said.

“We’ve had one owner saying they will not work with Russian counterparts.”

One tanker, the Delta Sailor, was fixed at World Scale 300 to load at Russian Baltic oil ports on Feb. 28 to March 1 to sail to northwest Europe. Earlier in the day, the Minerva Helen was similarly booked at short notice to load from the same area at over World Scale 200.

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Reporting by Dmitry Zhdannikov and Julia Payne, additional reporting by Ahmad Ghaddar and Rowena Edwards; editing by Jason Neely, Bernadette Baum and Diane Craft

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Report on Rio Tinto finds ‘disturbing’ culture of sexual harassment, racism, bullying

  • Rio releases external review of its workplace culture
  • Report finds widespread bullying, sexual harassment, racism
  • Rio CEO says findings “extremely disturbing”
  • Company says accepts all 26 recommendations

Feb 1 (Reuters) – A report released by Rio Tinto (RIO.AX), (RIO.L) on Tuesday outlined a culture of bullying, harassment and racism at the global mining giant, including 21 complaints of actual or attempted rape or sexual assault over the past five years.

Nearly half of all employees who responded to an external review of the miner’s workplace culture commissioned by Rio said they had been bullied, while racism was found to be common across a number of areas.

Rio Tinto Chief Executive Jakob Stausholm said the results were “disturbing” and the company would implement all 26 recommendations from the report by former Australian sex discrimination commissioner Elizabeth Broderick.

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“The eye opener for me was two-fold,” Stausholm told Reuters. “I hadn’t realised how much bullying exists in the company and secondly that it’s quite systemic – the three issues of bullying, sexual harassment and racism … that’s extremely disturbing.”

Rio Tinto launched the review in March last year, not long after Stausholm took over the top job in the wake of a widespread backlash against the company after it blasted the 46,000-year-old Juukan Gorge rock shelters to expand an iron ore mine.

More than 10,000 employees, nearly a quarter of its 45,000-strong workplace shared their experiences and views for the study.

The report found nearly 30% women and about 7% of men have experienced sexual harassment at work, with 21 women reporting actual or attempted rape or sexual assault.

Racism was a “significant challenge” for employees at many locations. People working in a country different to their birth experienced high rates of racism while nearly 40% of men who identify as Aboriginal or Torres Strait Islander in Australia had experienced racism.

“I have copped racism in every single corner of this company,” one employee was anonymously quoted as saying.

Rio said reforms will focus on a commitment from the company’s leadership to create a safe and inclusive working environment, including by increasing diversity within the company. It would also ensure the company’s remote mine site facilities are safe, and make it easier for staff to call out unacceptable behaviours.

“Clearly much more needs to be done to ensure the safety of workers in the resources sector,” said Owen Whittle, Secretary for UnionsWA, which represents over 30 workers groups which have over 150,000 members in Western Australia.

“With nearly half of the workforce reporting bullying, it is clear that they have failed workers over a long period of time and need to do far more to prevent harassment and bullying in workplaces,” he said.

SEXISM, RACISM

The Rio report comes ahead of the release of another report by the West Australia state government later this year on sexual harassment at mining camps in the state, which provides more than half of the world’s supply of iron ore.

Submissions to the inquiry last year said sexual harassment was rife at mining camps in Western Australia, which is home to mines of global firms including BHP Group (BHP.AX), Rio Tinto and Fortescue (FMG.AX).

A Western Australia state minister, Rita Saffioti, told Australia’s ABC News that she was very disturbed by the number of allegations.

“You want everyone to be able to feel safe in their workplace. Also in particular in those areas where you’re a bit more isolated from friends and family and you want to have the utmost protection from having that type of behaviour,” she said.

In a 2020 report, an Australian Human Rights Commission inquiry into sexual harassment found that 74% of women in the mining industry had experienced some form of sexual harassment in the past five years, partly due to a gender imbalance.

Nearly 80% of Rio Tinto’s workforce is male.

“Creating a safe, respectful work culture will encourage people of all backgrounds and diversity to thrive in our organisations,” Kellie Parker, the Australian CEO for Rio Tinto told Reuters.

Male and female employees in South Africa experienced the highest rates of racism. Employees spoke of the frequency of racism and its impacts on their confidence, self-esteem and work performance.

“Rio is a Caucasian oriented company,” one employee said in the report.

Rio said the report came at a pivotal time as workplace cultures shift against the backdrop of #MeToo, Black Lives Matter and other global movements, as well as an Australian inquiry into Rio’s destruction of Juukan Gorge, culturally significant rock shelters.

Stausholm said Juukan Gorge had triggered the biggest management change in the history of Rio and the new team wanted to drive more change.

“Its a matter of using the momentum of the moment now and try to move these actions forward fast because we cannot change these from one day to another.”

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Reporting by Praveen Menon; editing by Richard Pullin

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Rio Tinto shares slump as Serbia pulls plug on its $2.4 bln lithium project

  • Serbia revokes Rio’s lithium exploration licences
  • Share prices drop as cancellation seen as major setback
  • Cancellation will mean greater shortage of lithium – analyst

MELBOURNE, Jan 21 (Reuters) – Shares in Rio Tinto tumbled on Friday after Serbia revoked its lithium exploration licences over environmental concerns, hurting the Anglo-Australian miner’s ambition to become Europe’s largest supplier of the metal used in electric vehicles.

The decision by Serbia comes as it approaches a general election in April, and as relations between Belgrade and Canberra have soured after Sunday’s deportation of tennis star Novak Djokovic from Australia over its COVID-19 entry rules.

It is also a major setback for Rio (RIO.L), (RIO.AX), which was hoping the project would help make it one of the world’s 10 biggest producers of lithium, a key ingredient in batteries.

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The mine is Rio’s only lithium project and the company announced just a month ago a deal to buy a second lithium asset for $825 million, as it looks to build its battery materials business.

Rio’s shares in Australia closed down 4.1% after falling as much as 5.1% in the Australian stock market, its worst intra-day drop since August 2021. The benchmark index ended down 2.3%.

In London, Rio’s shares were down more than 3% by 0855 GMT, slightly underperforming their peers.

Serbian Prime Minister Ana Brnabic told a news conference in Belgrade that the decision came after requests by various green groups to halt the $2.4 billion Jadar lithium project that had planned to start production in 2027.

Thousands of people blocked roads last year in a protest against the government’s backing of the project, demanding Rio Tinto leave the country and forcing the local municipality to scrap a plan to allocate land for the facility.

The decision came days after ties between Australia and Serbia hit rock bottom as tennis star Djokovic was deported before he could play in the Australian Open.

Djokovic spoke out in support of “clean air” in a December Instagram story post captioning a picture of the anti-mining protests, which was published by digital sports platform The Bridge.

Twitter users were quick to joke about Rio being deported from Serbia.

Rio said it was “extremely concerned” by Serbia’s decision and was reviewing the legal basis for it.

The Australian government said it regrets Serbia’s decision to revoke Rio’s licences.

“We note the strong economic benefits of the significant investment by Rio Tinto in Serbia. Australian resources companies have an outstanding reputation around the world, particularly when it comes to their expertise,” the government said in a statement to Reuters.

Rio has already spent US$450 million in pre-feasibility, feasibility and other studies on Jadar to understand the nature of the deposit, the company said in a project fact sheet in July.

“The level of opposition to it has really ratcheted up over the last six months,” Credit Suisse analyst Saul Kavonic said of the Jadar mine.

“We’ve been highlighting for a while now there would be about $2 a share at risk if the government cancels it,” Kavonic said.

This week, Rio pushed back the timeline for first production from Jadar by one year to 2027, citing delays in approvals. read more

‘EVEN GREATER SHORTAGE’

At full capacity, the Jadar mine was expected to produce 58,000 tonnes of refined battery-grade lithium carbonate a year, making it Europe’s biggest lithium mine by output.

Experts said the world’s shortage of lithium had been forecast to last for another three years at least, but with the cancellation of the Jadar project, the shortfall would now last for several years. read more

“We’re at the point now where lithium supply is going to set the pace of electric vehicle rollout,” Kavonic said.

Robust global demand for the metal far outstripping supply growth has pushed lithium prices to a record in recent years.

Lithium futures , which started trading on the CME in May last year, have jumped 171% to a record $38/kg on Thursday, according to Refinitiv data.

In China, cash prices of lithium hydroxide monohydrate are trading around a record 262,500 yuan ($41,387.47) per tonne, up by more than 400% from a year ago.

Its state planner said on Friday that restrictions on purchases of new energy vehicles including EVs will be gradually removed in a “vigorous” push to promote “green consumption”, a plan likely to further increase demand for lithium. read more

($1 = 6.3425 Chinese yuan)

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Benchmark lithium hydroxide prices surge to record highs on global demand boom

Reporting by Sonali Paul in Melbourne; additional reporting by Florence Tan in Singapore; writing by Praveen Menon; editing by Kenneth Maxwell and Raju Gopalakrishnan

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‘This is an end’: Serbia revokes Rio Tinto’s lithium project licences

BELGRADE, Jan 20 (Reuters) – Serbia revoked Rio Tinto’s (RIO.L) lithium exploration licences on Thursday, bowing to protesters who opposed the development of the project by the Anglo-Australian mining giant on environmental grounds.

Serbian Prime Minister Ana Brnabic said the government’s decision came after requests by various green groups to halt the$2.4 billion Jadar lithium project which, if completed, would help make Rio a top 10 lithium producer.

“All decisions (linked to the lithium project) and all licences have been annulled,” Brnabic told reporters after a government session. “As far as project Jadar is concerned, this is an end.”

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Earlier this week, Rio had pushed back the timeline for first production from Jadar by one year to 2027, citing delays in key approvals. read more

Rio Tinto said it was “extremely concerned” by Serbia’s decision and was reviewing the legal basis for it.

The company committed to the project just last year, as global miners pushed into the metals needed for the green energy transition, including lithium, which is used to make electric vehicle batteries.

Brnabic accused Rio Tinto of providing insufficient information to communities about the project. In a statement, Rio said “it had always operated in compliance” with Serbian laws.

Thousands of people blocked roads last year in protest against the government’s backing of the project, demanding Rio Tinto leave the country and forcing the local municipality to scrap a plan to allocate land for the facility. read more

Thursday’s decision comes as Serbia approaches a general election in April and as relations between Belgrade and Australia have soured after the high-profile deportation of tennis star Novak Djokovic from Australia over the country’s COVID-19 entry rules. read more

Djokovic himself spoke out in support of “clean air” in a December Instagram story post captioning a picture of the protests, which was published by digital sports platform The Bridge.

Twitter users were quick to make jokes about Rio being deported from Serbia.

Serbia’s populist ruling coalition, led by the Serbian Progressive Party (SNS), had initially showed support for lithium and copper mining, a stance that made it come under fire, helping erode the comfortable majority the party enjoyed in a 2020 vote.

Sasa Djogovic of the Belgrade-based Institute for Market Research said that the ruling elite “is losing popularity and because of that it is forced to fulfil the demands by activists.”

The SNS-led coalition is expected to hold parliamentary and presidential elections on April 3, although the date is yet to be officially confirmed by President Aleksandar Vucic.

“We are listening to our people and it is our job to protect their interests even when we think differently,” Brnabic said on Thursday.

Earlier this month, Brnabic said Rio’s Jadar development would be likely paused at least until after the elections.

“A compromise will be probably reached after the elections, so that there could be a renegotiation of royalties or value-sharing,” said a Rio Tinto shareholder, who declined to be named.

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Reporting by Ivana Sekularac, additional reporting by Clara Denina; editing by David Evans, Amran Abocar and Jonathan Oatis

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Thousands block roads across Serbia in anti-government protest

BELGRADE, Dec 4 (Reuters) – Thousands of people blocked roads across Serbia in an anti-government protest against two new laws that environmentalists say will let foreign companies exploit local resources.

Serbia’s government has offered mineral resources to companies including China’s Zijin copper miner (601899.SS) and Rio Tinto (RIO.L). Green activists say the projects will pollute land and water in the Balkan nation.

The protest is a headache for the ruling Peoples’ Progressive Party led by the President Aleksandar Vucic ahead of parliamentary and presidential election next year.

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Thousands gathered on the main bridge in the capital Belgrade chanting “Rio Tinto go away from the Drina River.”

They held banners reading: “Stop investors, save the nature,” “We are not giving away the nature in Serbia,” and “For the land, the water and the air”.

Roadblocks have been set up all over Serbia including the second largest city of Novi Sad, in Western Serbia in Sabac, Uzice, and Nis in the South, in Zajecar in the East.

Anti-government protesters wear masks during a protest in Belgrade, Serbia, December 4, 2021. REUTERS/Goran Tomasevic

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“The reason (for the protest) is to protect our land, water and air. We do not want it to be sold cheaply,” said Stefan, a student protesting in Belgrade.

Rio has promised to adhere to all domestic and EU environmental standards, but environmentalists say its planned $2.4 billion lithium mine would irreversibly pollute drinking water in the area.

The protesters are angry about a referendum law passed last month which will make it harder for people to protest against polluting projects, as well as a new expropriation law, which makes it easier for the state to acquire private land.

President Aleksandar Vucic on his Instagram profile published a picture from the village of Gornje Nedeljice where Rio Tinto have already started buying land for its future lithium project.

Vucic said once the environmental study on the project is complete, he would call a referendum to allow people to decide whether the project should go through.

“Everything we build today we are leaving to our children,” Vucic wrote on Instagram.

(This story corrects figure in paragraph 8 to $2.4 billion instead of 2.4 million)

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Reporting by Aleksandar Vasovic and Ivana Sekularac; Editing by Christina Fincher

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Coal stocks lose ground after Glasgow climate deal

Smoke billows from a chimney at a coking factory in Hefei, Anhui province October 2, 2010. REUTERS/Stringer/File Photo

  • Coal miner stocks fall in China, elsewhere
  • Selling crimps long rally amid energy squeeze
  • Oil down, gas steady
  • China coal futures sink amid output surge

SYDNEY, Nov 15 (Reuters) – An international agreement to reduce coal use dragged miners’ shares lower on Monday, but tight supply of the commodity provided a floor for a sector that has chalked up huge gains this year.

U.N. climate talks in Glasgow ended on Saturday with a deal targeting fossil fuel use. Wording was softened to call for a “phase down” rather than “phase out” of coal after lobbying from India, among others.

Big miners China Shenhua Energy and Yanzhou Coal fell 1% and 2.4% respectively in Hong Kong, where the broader stock market (.HSI)edged up slightly. An index of mainland-listed miners (.CSI000820) fell about 1%. Coal stocks in other regions also came under pressure.

“Climate activists will undoubtedly frame COP26 as failing on coal (and fossil fuels). We look past this frustration (and current energy market conditions) and see ongoing incremental consensus in the need to reduce demand for fossil fuel,” said Cowen analyst John Miller. .

In Indonesia, the world’s biggest coal exporter, declines were exacerbated by surging production in China, a top customer. No. 1 miner Bumi Resources (BUMI.JK)fell 5.7%, while Adaro Energy (ADRO.JK) and Indika Energy (INDY.JK) tumbled 4.5% and 7% respectively.

Shares in Australia-listed thermal coal miner Whitehaven Coal (WHC.AX) fell about 1.6% and rival New Hope (NHC.AX) about 1% in a slightly firmer broad market.

‘CASH GENERATOR’

Metallurgical coal miners South32 (S32.AX) and Coronado Global Resources (CRN.AX) dropped some 1.4% and 4% respectively. The moves extend a recent pullback that has taken the edge off huge year-to-date gains for Whitehaven, South32 and New Hope amid a global energy crunch. They are each up more than 40%.

“The reality is that coal is going to be used during the next decade or so. It’s still going to be a cash generator,” said Mathan Somasundaram, chief executive officer at Sydney-based research firm Deep Data Analytics.

China, the world’s biggest producer and consumer of coal, churned out its highest tonnage in more than six years last month, official data showed, which helped to knock near-term spot prices , on Monday. read more

The Glasgow deal has elicited promises of future cuts to use, resolved rules for carbon markets and also takes aim at fossil fuel subsidies – all of which could speed up the transition to other energy sources. read more

Elsewhere in Asia, Seoul-listed mine owners and suppliers KEPCO (015760.KS), LX International (001120.KS) and Doosan Heavy (034020.KS)traded between a fall of 2.5% and a gain of 0.6% in a broader market that was up 1%. Thai miner Banpu (BANPU.BK) fell 2.7%. Shares in Coal India (COAL.NS) slid 4.3%, also weighed down by soft quarterly results. NTPC (NTPC.NS)edge up.

Among other mining stocks, Anglo American (AAL.L), the world’s third largest exporter of metallurgical coal, fell around 1% in London, while Sasol (SOLJ.J), which operates coal mines in South Africa, was steady.

George Boubouras, head of research at K2 Asset Management in Melbourne, said under-investment in coal projects would probably keep spot prices elevated from a historical perspective but the fuel’s likely eventual demise might limit gains for stocks.

“High thermal coal prices… will not necessarily translate into higher share prices to the same degree,” he said. Oil fell around 1% and gas a touch firmer in European hours and stocks in the sector were broadly steady.

Some investors see uranium filling some of the gap left as energy firms retreat from coal. This hashelped uranium futures to soar along with other commodities in recent weeks.

Large miners have rallied, lifting Canada’s Cameco (CCO.TO) to a decade high last week and Kazakhstan’s Kazatomprom (KZAP.KZ) to a record.

Reporting by Tom Westbrook; Additional reporting Joori Roh in Seoul, Muyu Xu in Beijing, Chandini Monnappa in Bengaluru and Melanie Burton in Melbourne and Danilo Masoni in Milan; Editing by Edwina Gibbs

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U.S. gives 1.5 million more COVID-19 vaccine doses to Taiwan

Walmart pharmacist holds a vial of the Moderna coronavirus disease (COVID-19) vaccine inside a Walmart department store in West Haven, Connecticut, U.S., February 17, 2021. REUTERS/Mike Segar/File Photo

WASHINGTON, Oct 31 (Reuters) – The United States is delivering an additional 1.5 million COVID-19 vaccine doses to Taiwan, a senior U.S. administration official told Reuters, increasing to 4 million the total number of shots donated by Washington to the self-ruled island, which is under increasing pressure from China.

The new delivery of Moderna Inc (MRNA.O) doses will depart from Louisville, Kentucky, on Sunday aboard a flight belonging to Taiwan’s China Airlines, the official said.

“Our vaccines do not come with strings attached” and were not donated to “secure favors or extract concessions,” the Biden administration official said, in an apparent reference to criticism that Beijing is trying to strengthen its geopolitical clout through so-called vaccine diplomacy.

The official added that Taiwan was a “vital partner” on global health issues.

Taiwan President Tsai Ing-wen thanked the United States and said the donation showed that the U.S. support for Taiwan was “rock-solid.”

“Based on the solid foundation of this friendship, Taiwan will continue to deepen partnership with the United States on all fronts,” she said in a Facebook post late on Sunday

The United States gave 2.5 million doses to the island claimed by China in June, making it among the first international recipients of U.S. vaccines. read more

At the time, U.S. officials said China was attempting to block vaccine purchases by Taiwan for political reasons, which Beijing denied.

Japan, the Czech Republic, Slovakia, Poland and Lithuania also have donated COVID-19 vaccines to Taiwan, where about 70% of the population has received at least one dose, according to Taiwan media. Only about 30% of the country’s 24 million people have been fully vaccinated.

Under pressure to share its coronavirus vaccine supply with the rest of the world, the United States has donated 200 million doses to more than 100 countries, the White House said earlier in October. read more

Taiwan, a key hub in the straining global technology supply chain, grew at its slowest pace since the second quarter of 2020 in the July-September period as coronavirus curbs to contain a local outbreak hit consumption. read more

The United States, which like most countries has no formal diplomatic relations with Taiwan, has watched its rising tensions with Beijing with alarm. President Joe Biden’s administration has vowed to boost ties with the island, which under U.S. law Washington is required to supply with the means of defense.

Reporting by Michael Martina; additional reporting by Yimou Lee; Editing by Sonya Hepinstall and Diane Craft

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U.S. judge declines to stop J&J from splitting talc liabilities from main business

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Aug 26 (Reuters) – A U.S. judge declined to stop Johnson & Johnson (JNJ.N) from taking steps to offload widespread Baby Powder liabilities from the rest of its business, preserving the option for the healthcare company to move thousands of claims from people who used its talc products to a unit that would file for bankruptcy.

U.S. Bankruptcy Judge Laurie Selber Silverstein denied a request from plaintiffs’ lawyers to block the move late Thursday. Lawyers for cancer victims wanted her to issue a restraining order against J&J as part of her role overseeing the bankruptcy proceedings of one of the company’s former talc suppliers.

J&J is exploring a plan to move its liabilities from widespread Baby Powder and other talc-related litigation into a newly created business that would later seek bankruptcy protection, Reuters previously reported. The company’s talc products are currently housed in a subsidiary called Johnson & Johnson Consumer Inc. read more

“The court rightly denied the plaintiffs’ motion aimed at preventing J&J from engaging in legitimate business transactions, in the event that it chooses to do so,” said Diane Sullivan, a Weil, Gotshal & Manges LLP lawyer representing J&J, in a statement.

The legal skirmish was unusual in that plaintiffs’ lawyers were asking the judge to forbid J&J from taking steps the company’s lawyers said it had not yet decided whether to pursue. Johnson & Johnson Consumer Inc has previously said it has “not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate.”

The judge is overseeing the bankruptcy case of Imerys Talc America, which once supplied talc to J&J and filed for Chapter 11 court protection amid mounting litigation. Imerys and J&J have since been battling one another over whether J&J is required to cover the former supplier’s legal costs under indemnification agreements. Plaintiffs’ lawyers argued that allowing J&J to offload its talc liabilities to a unit that would file for bankruptcy would harm Imerys’ reorganization.

The judge decided it would be improper as part of Imerys’ bankruptcy case for her to legally bar J&J from undertaking a hypothetical future restructuring that might result in separating the talc liabilities. She said Imerys could take legal action against J&J should J&J decide to separate its talc liabilities in a way Imerys deems harmful or unlawful.

TEXAS TWO-STEP BANKRUPTCY

J&J faces legal actions from tens of thousands of plaintiffs alleging its Baby Powder and other talc products contained asbestos and caused cancer. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.

J&J is considering using Texas’ “divisive merger” law, which allows a company to split into at least two entities, Reuters previously reported. For J&J, that could create a new entity housing talc liabilities that would then file for bankruptcy to halt litigation.

The maneuver is known among legal experts as a Texas two-step bankruptcy, a strategy other companies facing asbestos litigation have used in recent years.

Should J&J proceed, plaintiffs who have not settled could find themselves in protracted bankruptcy proceedings with a likely much smaller company. Future payouts to plaintiffs would be dependent on how J&J decides to fund the entity housing its talc liabilities.

A 2018 Reuters investigation found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. The company stopped selling Baby Powder in the U.S. and Canada in May 2020, in part due to what it called “misinformation” and “unfounded allegations” about the talc-based product. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.

The blue-chip company, which boasts a market value exceeding $450 billion, faces legal actions from more than 30,000 plaintiffs alleging its talc products were unsafe. In June, the U.S. Supreme Court declined to hear J&J’s appeal of a Missouri court ruling that resulted in $2 billion of damages awarded to women alleging the company’s talc caused their ovarian cancer. read more

Separately, plaintiffs lawyers are seeking a similar restraining order against J&J in a Missouri court. One of those lawyers, Andy Birchfield, said in a statement that he and other lawyers would study the Imerys ruling and continue attempts to prevent J&J from using the Texas law to separate its talc liabilities and steer them toward bankruptcy.

Reporting by Mike Spector, Maria Chutchian and Jonathan Stempel in New York; Editing by Chris Reese, Marguerita Choy and Karishma Singh

Maria Chutchian

Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.

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Exclusive: Exxon launches U.S. shale gas sale to kick-start stalled divestitures

HOUSTON, Aug 10 (Reuters) – Exxon Mobil Corp (XOM.N) has begun marketing U.S. shale gas properties as it ramps up a long-stalled program that aims to raise billions of dollars to shed unwanted assets and reduce debt taken on last year.

Three years ago, the top U.S. oil producer set a goal of raising $15 billion from sales by December 2021. More recently, it promised to accelerate lagging sales to whittle a record $70 billion debt pile.

The company’s XTO Energy shale unit is seeking buyers for almost 5,000 natural gas wells in the Fayetteville Shale in Arkansas, spokeswoman Julie King confirmed.

The assets are among gas projects with declining production and market value Exxon is selling as it focus on newer ventures in Guyana, offshore Brazil and Texas’s Permian Basin.

Exxon is marketing the properties itself and aims to receive bids by Sept. 16 and close any sale by year-end.

“We are providing information to third parties that may have an interest in the assets,” King said. No buyers have been identified, she said, declining to confirm the due date for bids or the company’s anticipated value on the wells.

DECLINING PRODUCTION

The company has achieved about a third of its three-year, $15 billion sales target.This year, it has received sales proceeds of $557 million through June, and has deals pending valued at more than $2.15 billion. read more

Exxon acquired the Fayetteville assets in 2010 for $650 million during a shale boom that would change the U.S. energy landscape, leading to an oversupply of gas that pushed prices to record lows and last year. This led Exxon to reduce the value of its U.S. oil and gas holdings by $17.1 billion. read more

Output in the assets on offer fell by more than half since 2016 to about 160 million cubic feet per day last year, according to Exxon marketing materials seen by Reuters.

The Arkansas properties cover some 416,000 net acres (1,680 square kilometers) and are some of the North American natural gas resources cut last year from Exxon’s development plan. The sale includes 844 operated and 4,104 non-operated wells, King said.

Dallas-based Merit Energy is evaluating the properties, one person familiar with the matter said. Merit in 2018 purchased about 258,000 acres in the same area from BHP for $300 million.

Merit did not reply to requests for comment by phone, e-mail and LinkedIn. Exxon declined to comment on potential bidders.

WORLDWIDE DIVESTMENTS

Exxon, which suffered a historic $22.4 billion loss in 2020, is selling dozens of properties in Asia, Africa, the United States and Europe.

The company is prioritizing debt reduction and its shareholder dividend, officials said last month. After total debt last year doubled to almost $70 billion since 2018, Exxon paid off more than $7 billion this year, to reduce its burden to $60.6 billion.

This year, it has held talks with Britain’s Savannah Energy (SAVES.L) over properties in Chad and Cameroon and sold stakes in two deep water oilfields to Occidental Petroleum (OXY.N) and others. read more

Exxon is seeing new interest in its properties with this year’s rebound in oil and gas prices, said Exxon Senior Vice President Jack Williams on July 30.

“That whole divestment discussion that we’ve had in the past continues,” Williams said.

By Sabrina Valle in Houston, Liz Hampton in Denver and Shariq Khan in Bengaluru; editing by Gary McWilliams, Marguerita Choy and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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