Good morning, nice people. It’s a considerably slower morning but we have an development on Mubadala’s investment activities and whispers of a new sustainability-linked sukuk issuance coming our way.

THE BIG CLIMATE STORY OUTSIDE THE REGION- There’s no single story dominating the headlines this morning, but a couple of stories pinging on international headlines caught our eye. Mexico’s threatened howler monkeys — classified as vulnerable on the International Union for Conservation of Nature Red List — are dropping dead from trees recently on the back of climate change-driven drought and heat waves, Reuters reports. 85 deaths have been recorded in recent weeks due to "heat stroke, dehydration, malnutrition or the spraying of crops with toxic agro-chemicals," Mexico’s environment ministry said in a statement.

ON THE FINANCE SIDE- Thunderstorm damage carrying a USD 1 bn ticket has ins. companies considering a switch in perspective on how climate change is shaping the industry, Bloomberg writes. Companies used to consider these storms as “secondary perils” due to damage being more contained versus earthquakes or hurricanes, but the label is shifting as damage caused by thunderstorms increases.

WATCH THIS SPACE-

#1- Egypt’sEnara plans to go public: Cairo-based renewables group Enara is planning to go public on the Egyptian stock exchange and one of the Gulf stock exchanges next year, CEO Sherif El Gabaly told Al Arabiya. To prepare for the IPO, Enara is restructuring and working on completing investment projects in Egypt such as green ammonia production and solar energy developments. The Financial Times ranked the Enara Group as the seventh fastest growing African company in 2024 and the company has plans to expand into even more renewable energy projects in Egypt with a focus on the industrial and agricultural sectors.

Enara is growing its pipeline: Enara was amongst several private companies in Egypt that expressed interest in implementing renewable energy projects using the P2P (Private to Private) system — an initiative that is part of the first phase of involving the private sector in Egypt's transition to a competitive electricity market. French energy producer TotalEren and SME investor Enara Capital — a subsidiary of Enara Group — signed an agreement for a 300k-ton green ammonia facility in Ain Sokhna. Enara’s Libra Capital also partnered with the EGX and the Agricultural Bank of Egypt to launch Libra Carbon, an Egyptian company that will develop, manage, and issue carbon certificates in Africa’s first voluntary carbon market.

#2- Lithium miners auction supplies to survive sector slump: The US’s minerals manufacturer Albemarle — and one the world’s top lithium suppliers — is planning three auctions this month to sell its lithium supplies, marking a major shift away from the traditional method of selling the critical mineral through long-term fixed-price contracts, Bloomberg reports. Lithium is now increasingly being traded via open auctions in efforts to promote more transparent and market-driven pricing, according to Bloomberg. This comes in efforts to allow market participants to respond more quickly to changes in supply and demand as the market grapples with inflated inventories and low prices after a period where the price of lithium was about 80% higher than current levels.

Albermarle is not the first: The company’s move to organize more auctions is part of a broader trend in the lithium industry towards auction-based sales, Bloomberg writes. Australian lithium producer Pilbara Minerals pioneered this approach with a digital auction platform launched in 2021, and Australia’s Mineral Resources is planning to introduce its own. Futures trading in lithium has also gained momentum in China since last year.

ON A RELATED NOTE- South Korea is allocating KRW 233.1 bn won (USD 171 mn) to secure critical minerals as the country develops green tech, Bloomberg reports citing a source familiar with the matter. The budget will mainly target lithium inventories to ensure supplies for its battery and auto manufacturing industries. The new budget will be active this year and marks a 526% jump from 2023. The country has already purchased lithium carbonate this year from Chile through the state-controlled Korea Mine Rehabilitation and Mineral Resources company. This comes in an effort to counter potential shortages amidst heightened geopolitical tensions.

REMEMBER- Investment in lithium continues to rise globally, including in our region: Australia’s biggest pension fund AustralianSuper has grown its critical minerals portfolio to AUD 12 bn (USD 7.9 bn) and plans to expand further in the next five years, pledging to more than double its lithium investments, from AUD 1 bn to around AUD 2.5-3 bn in January. Dubai-based United Mining Projects Cooperation invested USD 550 mn in a lithium project in Argentina’s Catamarca province through its subsidiary, Marhen Lithium in April. Abu Dhabi’s Khalifa Economic Zone (Kezad) also inked an agreement with Dubai-based manufacturer Titan Lithium in February to establish a lithium processing facility with a total investment of AED 5 bn in the Khalifa Industrial Area.

DANGER ZONE-

Critical energy minerals shortage looms: Minerals critical to the energy transition — such as copper, cobalt, nickel, and lithium used in EVs, wind turbines, and solar panels — have seen a steep drop in prices which is expected to deter necessary investment and lead to a shortage, according to a recent International Energy Agency report(pdf). Prices have fallen to pre-pandemic levels as supply overtakes demand for the minerals but demand is set to eventually surpass supply as more countries transition away from polluting cars and conventional energy sources.

The results: In a scenario in which countries worldwide meet their national climate goals, announced mining projects will only be able to meet 70% and 50% of the world’s copper and lithium needs in 2035, respectively. While the market size of these key energy transition minerals is expected to double to USD 770 mn by 2040, the supply sources may not have been diversified enough to grow sufficiently.

Political tension has plagued the minerals supply chain: Some companies have turned to Africa for critical minerals, but the tussle over the minerals is causing increased regional instability which in the case of the Democratic Republic of Congo — which holds two-thirds of the world's cobalt — has led to a deadly war that continues on today. Tanzania is also amongst the countries in Africa that have been digging up manganese and graphite but are not reaping much economic benefit as it does not produce any of the green tech the minerals would be needed for.

We’ve been warned: Rio Tinto chairman Dominic Barton told us that mining investment was too low to achieve the global energy transition last month. Investment in the mining and processing of these critical minerals must triple by 2050 to USD 331.5 bn annually to meet Paris Agreement goals. Consumption of these minerals by the energy sector is expected to increase 6x by 2040.

Mass bleaching hits nearly two-thirds of world's coral reefs amid record heat: About 60.5% of the world's coral reefs have experienced significant heat stress leading to bleaching over the past year, Reuters reported last week, citing the US National Oceanic and Atmospheric Administration (NOAA)’s Coral Reef Watch Program coordinator Derek Manzello in a monthly briefing. Manzello’s statement comes in response to NOAA’s reports on the fourth mass bleaching event recorded last April, driven by record-high ocean temperatures from climate change and the El Niño pattern.

Which areas have been affected? Mass bleaching has been documented in 62 countries and territories, with recent reports from India and Sri Lanka, the news outlet notes. Corals in the Atlantic have been especially impacted, with 99.7% of the basin's reefs experiencing bleaching-level heat stress within the last year, according to NOAA.

REMEMBER- The world is experiencing one of the worst bleaching events in history: Rising ocean temperatures are causing the biggest bleaching event of the world’s corals ever seen, NOAA reported last month. The phenomenon is the fourth and most extensive event of its kind the world has ever seen. Over 54% of corals have already experienced bleaching in the past year and the number is going up by 1% weekly, the report found.

The story also grabbed ink in Bloomberg and The New York Times.

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CIRCLE YOUR CALENDAR-

The UAE will host the Bonds, Loans & Sukuk Middle East event from Tuesday, 4 June to Wednesday, 5 June in Dubai. Billed as the Middle East's largest corporate and investment banking event, it serves as a key meeting point for those active in the region's capital markets. Over 1.4k governments, corporates, investors, banks, law firms, regulators and service providers as well as more than 75 expert speakers will be in attendance.

Turkey will host the International Conference on European Energy Market, from Monday, 10 June to Wednesday, 12 June in Istanbul. The three-day event will gather experts from scientific, industry, and policy sectors for discussions on various energy market-related topics. The conference covers themes including energy modeling, market design, regulatory policies, and climate change.

Morocco will host the Morocco Energy Week Summit, from Tuesday, 11 June to Thursday, 12 June in Marrakech. The event will gather Morocco's leading energy players, companies and developers alongside financiers and implementation experts to discuss the country’s green transition.

Spain will host the Connecting Green Hydrogen Europe conference, from Tuesday, 25 June to Thursday, 27 June in Madrid. The event will see around 5k attendees including industry leaders, energy ministers, and executives to explore solutions, new technologies, and transformative advancements to advance the hydrogen industry.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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