NASA will launch its Volatiles Investigating Polar Exploration Rover, or VIPER, in 2023 to get a closer view of the Moon’s South Pole and evaluate the concentration of water as well as other potential resources on its surface. The space agency is undertaking the mission to understand if it is possible for human life to sustain there, by using locally available resources. The VIPER mobile robot, NASA said, is the first resource mapping mission on any other celestial body.
NASA’s Commercial Lunar Payload Services (CLPS) will be providing the launch vehicle and lander for what’s going to be a 100-day mission. Similar to a golf cart, VIPER measures 5 feet by 5 feet and weighs 430 kilograms, said the agency. On its website, NASA said that the Moon rover will directly analyse the water ice on the surface and sub-surface of the celestial body. The VIPER will also evaluate the same at varying depths and temperatures within four main soil environments on the moon.
The Lunar rover will transmit the data to Earth which will then be utilised in the creation of resource maps. It will also help scientists determine the location and concentration of frozen water on the Moon and varied forms such as ice crystals or molecules chemically bound to other materials. NASA said that VIPER’s findings will inform “future landing sites under the Artemis program by helping to determine locations where water and other resources can be harvested” to sustain humans over extended stays.
The agency added that the findings could be a game-changer, especially because it’s not possible to bring everything to the Moon, Mars, and beyond for long-term exploration. It will use the data that VIPER collects to determine where the water ice is most likely to be found and the easiest to access. This is going to be a critical step forward in NASA’s Artemis programme to establish a sustainable human presence on the surface of the Moon by 2028, the agency said.
NASA said satellites orbiting the Moon as part of the past missions have helped us understand that there is water ice on its surface. However, in order to use it one day, they have to learn more about it — up close and personal. “VIPER will roam the Moon using its three instruments and a 3.28-foot (1m) drill to detect and analyze various lunar soil environments at a range of depths and temperatures,” the agency said. “The rover will venture into permanently shadowed craters, some of the coldest spots in the solar system, where water ice reserves have endured for billions of years.”
There are challenges, too, of extreme temperature conditions, dynamic lighting, and complex terrain. The near real-time driving of the rover will also pose new engineering and design challenges to the team.
tried to mine the sea floor, the company he backed lost a half-billion dollars of investor money, got crosswise with a South Pacific government, destroyed sensitive seabed habitat and ultimately went broke. Now he’s trying again, but with a twist: Mr. Barron is positioning his new seabed mining venture, The Metals Company, as green, to capitalize on a surge of environmentally minded investment.
TMC is set to receive nearly $600 million in investor cash in a deal slated to take the company public in July. If successful, that would value TMC at $2.9 billion—more than any mining company ever to go public in the U.S. with no revenue.
“We were positioning this incorrectly as a big mining, deep-sea mining project, which it was,” says Mr. Barron, who says the metallic nodules he hopes to bring up are crucial to building electric-vehicle batteries. “But it wasn’t the way that we were going to garner support from investors to make this industry a reality.”
Green investing has grown so fast that there is a flood of money chasing a limited number of viable companies that produce renewable energy, electric cars and the like.
Some money managers are stretching the definition of green in how they deploy investors’ funds. Now billions of dollars earmarked for sustainable investment are going to companies with questionable environmental credentials and, in some cases, huge business risks. They include a Chinese incinerator company, an animal-waste processor that recently settled a state lawsuit over its emissions and a self-driving-truck technology company.
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One way to stretch the definition is to fund companies that supply products for the green economy, even if they harm the environment to do so. Last year an investment company professing a “strong commitment to sustainability” merged with the operator of an open-pit rare-earth mine in California at a $1.5 billion valuation. Although the mine has a history of environmental problems and has to bury low-level radioactive uranium waste, the company says it qualifies as green because rare earths are important for electric cars and because it doesn’t do as much harm as overseas rivals operating under looser regulations.
The stretching has been true for special-purpose acquisition companies, one of the hottest investments on Wall Street. More than 45 SPACs that have declared themselves green have raised nearly $15 billion, according to data provider SPAC Track.
SPACs raise money on the stock market from investors who give them broad latitude to look for an existing private company to acquire. SPACs typically promise shareholders they will invest their cash within two years. With so much money looking for deals, they can’t be too picky. Sometimes multiple suitors converge on the same operating company, in a frenzy known as a “SPAC-off.”
A SPAC that is set to merge with TMC, the Sustainable Opportunities Acquisition Corp., or SOAC, went public on the New York Stock Exchange in 2020 and met more than 90 companies before deciding on the deep-sea miner. “It’s like speed dating,” says
the SPAC’s general counsel.
Even more money is coming from mutual funds and other big investment vehicles. Since the beginning of 2019, stock mutual funds and exchange-traded funds with ESG as part of their mandate—meaning they prefer to invest in companies with certain environmental, social and governance characteristics—have received a net $473 billion from investors; just $103 billion net has gone into all other stock funds, according to a Goldman Sachs Group compilation of data from fund tracker
When it comes to green companies, “there just isn’t enough” to absorb investor demand, says
a managing director at MSCI, a research company that compiles indexes of companies, including ESG indexes, that many fund managers follow to decide how to allocate green investment.
Cumulative value of sustainability-focused SPAC initial public offerings
SPACs have filed for
another $6 billion of IPOs
SPACs have filed for
another $6 billion of IPOs
SPACs have filed for
another $6 billion of IPOs
In response, MSCI has looked at other ways to rank companies for environmentally minded investors, for example ranking “the greenest within a dirty industry,” Ms. Nishikawa says. “If you were to be too purist about where you set these thresholds you would end up with a not-really-investable universe,” she says.
The second-biggest firm on MSCI’s Global Pollution Prevention Index is
an $11 billion animal-waste-rendering company. New Jersey’s attorney general sued the company in 2019 alleging rotting-animal odors from a Newark plant were so pervasive that neighbors suffered migraines. As of March, green-investment funds held more than $300 million in Darling stock, according to FactSet Research data.
The company settled the New Jersey suit last year without admitting to the allegations. “We continue to make investments. We continue to upgrade the air emissions of our plants,” a Darling spokesman says.
Ms. Nishikawa says MSCI decided to include Darling in the index despite its environmental issues because its business is “clearly tied to the circular economy theme,” since it takes waste products from other companies and turns them into usable goods. “There’s no such thing as a perfectly green company,” she says.
Of all the industries seeking green money, deep-sea mining may be facing the harshest environmental headwinds.
Biologists, oceanographers and the famous environmentalist
have been calling for a yearslong halt of all deep-sea mining projects. A World Bank report warned of the risk of “irreversible damage to the environment and harm to the public” from seabed mining and urged caution.
More than 200 deep-sea scientists are preparing to release a letter calling for a ban on all seabed mining until at least 2030. In late March, Google Inc., battery maker
and heavy truck maker Volvo Group announced that they wouldn’t buy metals from deep-sea mining.
TMC’s Mr. Barron says they’re misguided. Existing battery mineral miners dig up rainforests and sometimes use child labor, he argues, making deep-sea mining a better option.
Much of the world’s known deep-sea metal lies under international waters, where mining is regulated by the U.N.-created International Seabed Authority. The 168-member-country bureaucracy has never issued a mining permit—and in its nearly three decades of existence hasn’t yet even decided on mining rules.
TMC’s Mr. Barron has been trying to overcome such obstacles for two decades. A serial entrepreneur from rural Australia who once imported batteries from China, published a magazine and built a software company, Mr. Barron says he was introduced to deep-sea metals by his tennis partner,
around 2001. Mr. Barron decided to invest in Mr. Heydon’s Canadian startup,
Working through Pacific island nations including Tonga, Vanuatu and Nauru, Nautilus tried to get access to the seabed in international waters, but the process moved slowly.
The territorial waters of Papua New Guinea, where geothermal vents created vast mineral structures over thousands of years, seemed to offer a way forward outside the reach of international regulators. The local government there invested $120 million in Nautilus, which began grinding up the sea floor to test the viability of mining there.
Mr. Barron boosted his Nautilus stake in 2005. Months later the company went public via a reverse merger, similar to a SPAC listing. Mr. Barron cashed out in 2007 and 2008, making about $30 million in profit, he says. Mr. Heydon left around the same time.
Alarm bells were already sounding in Papua New Guinea. Villagers said Nautilus’s exploration was driving away sharks they lured in, killed and ate in traditional ceremonies. Government officials and environmental groups called for a halt in operations. “It became obvious that the destruction outweighed the very, very minimal benefits,” says
an activist from a nearby village.
Nautilus disputed that, but the company exhausted its funds before it could begin production. It lost its boat to creditors and Nautilus went broke, according to liquidation filings. The Papua New Guinea government lost its investment, and two other investors, one from Qatar and one from Russia, acquired Nautilus assets.
Messrs. Barron and Heydon had already started DeepGreen, later renamed The Metals Company, planning to reacquire old Nautilus holdings in international waters where metal nodules could be picked up “like golf balls,” Mr. Barron said, in an area he called “a desert.” Exploration work by TMC and prior research by others found a large number of the nodules, enough to produce high volumes of metals used in electric-car batteries, in areas more than 2 miles deep.
Oceanographers countered that, rather than a desert, the area roughly midway between Mexico and Hawaii, is actually a little-explored ecosystem where new species are still being discovered. Recent finds include a bright-yellow sea cucumber with a tail like a squirrel’s and a “walking squid” that traverses the bottom with spindly tentacles.
The metal nodules TMC wants to mine are located in some of the area’s only animal habitat, the scientists say. A recent study in the journal Scientific Reports showed that 26 years after a trial project sent a robot to a similar habitat, the seabed and its animals hadn’t recovered.
Hoping to assuage some of the environmental concerns—and to prepare studies necessary for mining permits—TMC granted $2.9 million to researchers to study the biology of the mining area. Many scientists signed on because it is a rare opportunity to explore one of the world’s most remote environments and to catalog what might be lost.
Among them was
a University of Hawaii biology professor and a leading authority on the area. After Mr. Drazen publicly criticized seabed mining, a TMC employee warned he might lose access to funding if he continued, say two people familiar with the matter. Mr. Drazen declined to comment on the conversation. A TMC spokesman says the scientists are free to speak their minds.
TMC decided to frame itself as green in 2017 around the time it tried and failed to go public on the Toronto Stock Exchange.
Mr. Barron took over as CEO and hired Erika Ilves, an executive at a space-mining company, to help steer strategy. Mr. Barron and Ms. Ilves are raising their twin daughters together.
The once clean-cut Mr. Barron now sports shaggy hair, a scruffy beard and leather bracelets coiled almost halfway to his elbow. He travels with a metal lump from the seafloor in his bomber-jacket pocket. When it sets off airport metal detectors, Ms. Ilves says, Mr. Barron offers security guards an opportunity to invest.
“I’m doing it for the planet and the planet’s children,” Mr. Barron said on a company-funded podcast. It hired a marketing firm that began promoting him as the Australian
While Mr. Barron is TMC’s public face, the business of securing mining rights—this time in international waters—was handled privately by co-founder Mr. Heydon and his son
now a TMC executive. Seabed Authority rules let any member nation sponsor projects in any international waters, and gives favored treatment to developing countries. The Heydons decided to seek an exploration license via a company based in Nauru, partly, they say, to help the struggling eight-square-mile Pacific island nation of 10,000 people.
“I’ve always been very dedicated to the fight for justice,” says Robert Heydon.
The Nauru company first was owned by Nautilus, then by an investor group that included the Heydons and later by two Nauru-government-controlled foundations formed to provide financial benefits to Nauruans. In 2012, the foundations’ directors gave the company to TMC for free.
Robert Heydon wouldn’t provide details of the ownership changes, calling them “a private sort of transaction.” He says the only money TMC has paid to Nauru is for public benefits including college scholarships for two students. One recipient is the niece of the Nauru official in charge of deep-sea mining when the government transferred ownership to TMC, former Trade Minister
Mr. Aroi, who is still a government official, says he didn’t believe his niece received the scholarship due to his position, but rather because she was one of a very few applicants—around 10—who qualified for a university education. He said he wasn’t involved in the Nauru foundations’ decision to transfer ownership to TMC, and that no one in government raised issues with TMC paying for his niece’s education. A government spokeswoman didn’t respond to requests for comment.
“It’s obviously misleading, false and patronizing” to imply Nauru officials could be bribed, Robert Heydon says. TMC didn’t pay the Nauru foundations for the company, Mr. Barron says, and in fact Nauru invested about $100,000 in TMC after the transfer. A TMC spokesman said the Journal’s reporting is “riddled with inaccuracies and misrepresentations.”
With the Heydons handling government relations, Mr. Barron set out to attract money to the venture.
As investor interest in green companies heated up, Mr. Barron says, would-be backers approached TMC with offers to invest or outright buy it. In the months leading up to the SPAC deal, Mr. Barron says he held negotiations with a large mining company and a large oil company that were looking to get into the electric-vehicle supply chain in addition to green-focused investors.
He said TMC negotiated term sheets with “several” SPACs before being approached by SOAC. Mr. Barron says he liked SOAC’s sustainability-focused mission—its founder
calls it “the first ESG SPAC,” though other ESG-focused SPACs preceded it—and signed a deal to stop negotiating with any other potential investors while SOAC and TMC worked out acquisition terms.
SOAC’s Ms. Stryker said she was initially skeptical that TMC would be a good fit. But after examining its business plan and weighing the environmental impact of deep-sea versus land-based mining, the firm was won over. The companies soon began seeking other investors with a presentation labeling seabed nodules an “EV battery in a rock.”
The deal gives TMC $570 million in cash and values it at $2.9 billion, much more than any other mining company that has gone public in the U.S. with no revenue, according to University of Florida business professor
TMC’s projections call for the company to raise more than $3 billion in additional funding before it turns profitable.
In a regulatory filing Wednesday, TMC added a new risk factor that warned the environmental impact of its mining techniques on seafloor life “could potentially be more significant than currently expected” and require further study.
Mr. Barron’s stake is now worth about $175 million.
One of the biggest names on Wall Street is getting into the timber business, and a big part of its plan to make money involves less logging.
J.P. Morgan Asset Management said Monday that it has acquired Campbell Global LLC, a Portland, Ore., firm that manages $5.3 billion worth of timberland on behalf of institutional investors, such as pensions and insurance companies.
The deal gives the $2.5 trillion asset manager a position in the booming market for forest-carbon offsets, tradable assets that are created by paying landowners to not cut down trees and leave them standing to sponge carbon from the atmosphere. Offsets are used by companies to scrub emissions from their internal carbon ledgers, which track progress toward pollution-reduction goals.
Campbell Global oversees about 1.7 million acres of forestland in the U.S., New Zealand, Australia and Chile. About two-thirds of its 150 employees are involved in managing the forests, while the others are investment professionals, said
the firm’s chief executive.
Campbell for more than three decades has managed timberland to produce logs for lumber and pulp mills. In recent years, it has moved into carbon markets, selling offsets in California’s regulated cap-and-trade market as well as in the unregulated voluntary markets that have boomed with the rise of green investing.
“We do believe this is the future for this asset,” Mr. Gilleland said.
Timberland investing became popular in the 1980s after the tax code was made more favorable to owners of income-producing real estate, Congress allowed pensions to diversify beyond stocks and bonds and Wall Street analysts convinced forest-products companies to sell off their timberlands.
Investors reasoned that trees would grow, and thus gain value, no matter what the stock market did. Timberland was viewed as a good hedge against inflation.
But it hasn’t always been a good investment: At the same time timberland investing was gaining momentum, the federal government was paying landowners in the South to plant pine trees on worn-out farmland to boost crop prices. Decades later, the resulting surfeit of pine has pushed log prices to their lowest levels in decades even as the resurgent housing market has lifted prices for lumber and other wood products to records.
Investors such as the California Public Employees’ Retirement System have suffered big losses on southern timberland in recent years. Though log prices in the West still move in unison with those of lumber, timberland there is threatened by fires and wood-boring beetles. In the North, mills have closed and rendered many wood lots uneconomical to log and worth more leased to companies as carbon sinks.
on Sunday reached an agreement for a 10% investment in Universal Music Group by William Ackman’s Pershing Square Tontine Holdings, valuing the world’s largest music company at about $40 billion.
Heavy options activity amplified last week’s investor retreat from bets on stronger economic growth. More than 116 million options contracts were expiring on Friday, according to Cboe Global Markets data, the second-highest level ever after Jan. 15, when more than 150 million contracts were expiring.
Natural-gas futures ended Friday at $3.215 per million British thermal units, up 96% from a year ago and the highest price headed into summer since 2017.
On this day in 1990, after decades of closure under communist rule, the Budapest Stock Exchange reopened for trading.
Stock futures are inching up, a day after the S&P 500 notched its 27th record close of the year amid the push-pull of rising inflation versus a healing job market. Here’s what we’re watching ahead of Friday’s trading start.
Futures tied to the S&P 500 added 0.1%. Dow Jones Industrial Average futures rose 0.2% and contracts tied to the Nasdaq-100 edged up 0.1%, putting the technology-heavy index on course to close out a fourth week of gains.
Some of the latest stocks to join the meme-stock frenzy,
are looking sickly premarket, with a 15% drop. It said it will stop developing an experimental drug after it was shown in a midstage study to be unlikely to provide a clinical benefit to people with a rare genetic disease.
jumped 6.6% premarket. Late in Thursday’s session, AMC’s credit rating was upgraded by two notches, to CCC+ from CCC- , by S&P Global Ratings, as it pointed to the movie theater operator’s recent equity capital raises.
shares climbed 5.2% premarket after the entertainment-venue chain reported a profit for its latest quarter as revenue picked up with consumers heading back into its locations.
Cruise lines caught the Covid blues. Two guests sharing a room on Royal Caribbean Group’s Celebrity Millennium tested positive for Covid-19 toward the end of the cruise, the company said. The ship was sailing out of the Caribbean island of St. Maarten, one of the company’s first voyages to restart out of the region.
is up 0.6% premarket. A Chinese competitor, Didi Chuxing Technology, made its IPO papers public on Thursday, and could fetch a valuation upward of $70 billion. Didi is known for successfully pushing Uber out of China, winning a bruising price war that ended in 2016. But Uber also stands to benefit from Didi’s success, as it now owns a 12.8% stake in Didi.
shares slipped 1.3% premarket after the pet-products retailer said it was facing labor shortages and supply problems that led it to run out of some items. Still, investors were tossed a bone when it also surprised Wall Street with a quarterly profit.
While the pandemic has hit India hard, its stock market has surged. The MSCI India index hit record highs this week and is now up 14% for the year to date.
Uranium this week traded at $32.05 a pound, according to UxC LLC, a nuclear-fuel data and research company. Prices reached an all-time high of $136 a pound in 2007, according to records going back to 1987.
On this day in 1930, trying to rebuild public confidence in the market, New York Stock Exchange President Richard Whitney had the press witness him making a bid, with his own money, of $160 a share for a 60,000-share block of U.S. Steel stock. Shortly thereafter the stock sank below $150, on its way to $21 in the market bottom of 1932.
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Money is pouring into stocks that get good grades on issues like building a diverse workforce and reducing carbon emissions. But figuring out how high- and low-rated companies perform is nearly impossible because of inconsistencies in the way they are rated.
-MGM Holdings Inc. deal has another trade up its sleeve: going big on uranium.
New York hedge fund Anchorage Capital Group LLC has amassed a holding of a few million pounds of uranium, people familiar with the matter say, in a bet that prices of the nuclear fuel will recover after a decade in the doldrums. It is buying and selling uranium alongside mining companies, specialist traders and utility firms with nuclear-power plants, turning the fund into a significant player in the market.
Venturing into the uranium market, which is much smaller than oil or gold markets, is unusual for a firm that typically invests in corporate debt. It is another example of money managers straying into esoteric markets in search of returns after a yearslong run-up in stocks and slide in a bond yields.
Anchorage’s physical uranium holdings are also a rarity because Wall Street firms don’t typically own physical uranium. Most investors bet on uranium prices by buying shares of mining firms, or through companies like
In the 2000s, investors piled into uranium trades, helping to power a run-up in prices that peaked in 2007. Most funds exited either during the 2008-09 financial crisis or after Japan’s 2011 Fukushima nuclear disaster sapped demand.
as the financial institution with the biggest presence.
The uranium that is usually traded takes the form of U3O8, a lightly processed ore. Prices for U3O8 have sagged since Fukushima knocked demand, leading to a glut that traders say has yet to be whittled down.
The material this week traded at $32.05 a pound, according to UxC LLC, a nuclear-fuel data and research company. Prices reached an all-time high of $136 a pound in 2007, according to records going back to 1987.
Anchorage is wagering on a reversal. Spearheaded by trader Jason Siegel, the fund began acquiring uranium a few years ago, because its analysis showed most miners were booking losses at prevailing prices, a person familiar with the fund’s thinking said. The fund bet that uranium prices would rise to encourage miners to produce enough material.
Mr. Siegel didn’t respond to requests seeking comment.
The entry of a financial firm has caused a stir in the uranium market. Anchorage buys and sells infrequently, but in large quantities that put it in the same league as big uranium merchants such as Traxys Group, participants say.
Anchorage hasn’t publicly disclosed its interest in the uranium market, the size of its holdings or the terms of any specific transactions. The exact size of Anchorage’s position—a topic of speculation in the market—couldn’t be learned. The person familiar with the fund’s thinking said it owned fewer than five million pounds of uranium. The overall spot market for the nuclear fuel turns over 60 million to 80 million pounds each year, according to UxC.
Due to strict rules about where uranium can be held, trading typically doesn’t involve moving the fuel around the world. Firms instead take ownership of U3O8 stored in drums at three processing facilities in France, Canada and the U.S. When they sell, buyers take ownership on the spot. The transactions aren’t reported publicly.
Anchorage’s wager relies on buying uranium and selling it to utility companies and others at a higher price for delivery several years in the future, in what is known as a carry trade. Doing so could generate annualized returns of roughly 5% for Anchorage, according to people familiar with the matter.
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The hedge fund embeds options into sale agreements with utilities and other firms, people familiar with the matter say. This can involve selling fuel to a utility company at a discount in return for the right to deliver more uranium at a set price at a later date.
Anchorage isn’t alone in betting that prices are primed to rebound.
Investment firms including Segra Capital Management LLC, Sachem Cove Partners LLC and Azarias Capital Management LP expect that efforts to wean the world off fossil fuels will require new nuclear-power stations, according to executives at the funds. They are seeking to profit by buying shares of uranium miners or firms like Yellow Cake, which is up 31% in London trading over the past year.
Some investors hesitate to own uranium outright because of the perception that it can cause dangerous accidents, according to Joe Kelly, chief executive of brokerage Uranium Markets LLC.
“There’s a deterrent that does not exist in other commodities,” said Mr. Kelly.
dropped 4.2% premarket, after losing more than 16% in the prior session. The electric-truck startup disclosed that it doesn’t have sufficient cash to start full commercial production and has doubts about whether it can continue as a going concern through the end of the year.
edged up 0.3% premarket. E-commerce entrepreneur Ryan Cohen is slated to become the videogame retailer’s chairman on Wednesday, cementing his oversight of a company that is searching for a chief executive and seeking to manage expectations of shareholders bullish on its turnaround potential.
edged up 0.3% premarket. The supply-chain management and software company reported record bookings in its fiscal fourth quarter, while total revenue for the fiscal year declined 4% from the year prior.
Nearly $3 of every $10 of global equity inflows have been in ESG funds so far in 2021, according to Bank of America. Assets under management in the 1,900-plus global ESG funds tracked by the firm hit a record $1.4 trillion in April, more than double the amount from a year ago.
is personally on the hook for nearly $700 million in loans his coal companies took out from now-defunct Greensill Capital, according to people familiar with the loans and documents described to The Wall Street Journal.
Mr. Justice’s personal guarantee of the loans, which hasn’t been reported, puts financial pressure on the popular Republican governor. He is also dealing with unrelated lawsuits alleging parts of his sprawling network of coal companies breached payment contracts or failed to deliver coal.
Greensill packaged the loans and sold them to investment funds managed by
The Swiss bank froze the investment funds in March and is in talks with Mr. Justice’s Bluestone Resources Inc. and other borrowers to recoup money to make investors whole, according to the people familiar with the discussions.
Bluestone hadn’t expected to begin repaying the Greensill loans until 2023 at the earliest, it said in a lawsuit brought in March in a New York federal court alleging Greensill committed fraud in its lending practices.
Bluestone’s general counsel and an outside lawyer representing Bluestone didn’t respond to requests for comment. Requests for comment from Mr. Justice’s spokesman weren’t returned.
Greensill was a once-hot private finance firm whose bankers said could have been worth $40 billion in a potential initial public offering. It attracted investment from
Credit Suisse in a recent notice to investors said Bluestone owes nearly $700 million in loans.
Mr. Justice’s companies own several coal-related businesses, and have settled a number of cases in recent years for alleged nonpayment of bills, according to court records published by the investigative journalism website ProPublica.
The guarantees were provided by Mr. Justice as well as his wife and covered unlimited amounts, some of the people familiar with the loans said. Mr. Justice’s son and Bluestone’s chief executive, James C. Justice III, guaranteed the loans up to a certain limit, one of the people said, though that figure couldn’t be learned. All three are listed as plaintiffs in the lawsuit against Greensill.
Borrowers make personal guarantees on business loans to give lenders additional comfort in the case of default.
Forbes this year dropped Mr. Justice from its billionaires list, owing to Greensill’s failure. It now pegs his net worth at $450 million, down from $1.2 billion in April 2020. His wealth stems from dozens of coal companies, farms and other businesses he and his family oversee, including the famed Greenbrier resort in White Sulphur Springs, W.Va.
Seen by supporters as a man of the people despite his wealth and political power, he still coaches the girls’ basketball team at Greenbrier East High School.
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West Virginia voters haven’t been deterred by reports about his companies’ financial entanglements, re-electing him in 2020 with 65% of the vote. His approval rating stands at 62%, according to intelligence company Morning Consult.
“The governor’s business interests don’t carry a lot of weight in this state, there’s just not a lot of concern,” said Marybeth Beller, associate professor of political science at Marshall University. “The former president had all kinds of business problems and it just didn’t seem to matter that much to West Virginians. Jim Justice follows suit.”
Bluestone and Greensill began their relationship in May 2018, when Greensill Vice Chairman
got in touch through a mutual business associate, according to the Bluestone lawsuit.
The Bluestone companies received financing over a three-year period. When the first set of loans matured, Greensill replaced them with new loans in a process that became known as a “cashless roll,” according to the Bluestone lawsuit.
Many of the loans were backed by “prospective receivables” that hadn’t yet been generated, from a list of “prospective buyers,” some of whom might not have ever become Bluestone customers, the lawsuit says. It couldn’t be learned exactly how Bluestone used the proceeds of the loans.
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Mr. Justice’s companies play a sizable role in the market for coal used in steelmaking. They mined more than 1 million tons of coal in 2018, primarily metallurgical, according to S&P Global Market Intelligence. The largest metallurgical coal miner in the U.S. produced 12 million tons in 2019.
Metallurgical coal prices dropped sharply last year but have recently rebounded to pre-pandemic levels as economies reopen.
Bluestone has a separate financial dispute with Caroleng Investments Ltd., a British Virgin Islands-incorporated company. Earlier this month, a federal judge in Delaware ordered Bluestone to post a $10 million security bond in relation to its 2015 purchase of coal assets from Caroleng. In January, Bluestone’s general counsel told the court that an earlier arbitration ruling in Caroleng’s favor would result in a hardship, according to a court filing.
In another case, a federal judge in Delaware in March found that a Justice company failed to deliver nearly 700,000 tons of coal to a Pennsylvania exporter between 2017 and 2018. He ordered the company and Mr. Justice to pay the exporter $6.8 million. Mr. Justice had personally guaranteed the coal deliveries.
Mr. Justice and the company have sought to pause the enforcement of the judgment.
British police got a shock when they raided a suspected illegal cannabis farm this week: Instead of halogen lamps and weed, they found about 100 computers mining bitcoin.
Officers from the West Midlands Police forced entry into the warehouse in an area west of the city of Birmingham known as the Black Country with a drug warrant, after intelligence suggested it was being used to grow the illegal crop.
Unusual amounts of wiring and ventilation were visible on the outside of the building and a drone had measured high levels of heat rising from it—classic signs of a cannabis factory. But the officers broke in to discover a huge bank of computers in what they now suspect was a cryptocurrency mine.
They also found that the computers used stolen electricity by tapping directly into the power supply outside of the warehouse’s circuits. Police said the mine consumed thousands of pounds worth of electricity (£1 is equivalent to around $1.40).
has become a lucrative business as its value has shot higher, peaking at about $60,000 per bitcoin in April. But mining the coins, where computers race to solve complex mathematical puzzles, is also hugely energy-intensive and very costly.
“My understanding is that mining for cryptocurrency is not itself illegal, but clearly abstracting electricity from the mains supply to power it is,” Sgt. Jennifer Griffin said in a statement on Thursday. She added that no arrests were made at the premises, but that the police would be making inquiries with the owner of the warehouse.
The British warehouse had “all the hallmarks of a cannabis cultivation setup,” Sgt. Griffin said. “It’s certainly not what we were expecting.”
Cryptocurrency mining has boomed as the value of bitcoins rocketed this year. When computers compete to harvest fresh coins by solving mathematical puzzles—a process known as mining—the new coins produced have fetched high prices.
On top of this, when a computer successfully solves the puzzle, it is able to process some bitcoin transactions on the network and can charge a fee for those services. Daily revenue from mining globally reached a record high of $77.8 million on April 15, according to CoinDesk, a research website that tracks cryptocurrencies. On that same day, bitcoin’s dollar value peaked at $63,381.20.
The process to obtain bitcoin is highly energy-intensive. As more people compete to harvest the cryptocurrency, the harder the mathematical puzzles get and the more energy is required to gain it. Bitcoin’s high energy use has drawn criticism in recent weeks from
Chinese officials have also recently indicated that they will be taking measures to curb bitcoin mining in China, one of the largest markets for it. Some mining services have already started banning mainland China internet addresses from accessing their platforms in the wake of those comments.
Iran this week banned crypto mining for four months after a series of unplanned blackouts in cities. President
told a cabinet meeting that crypto mining was draining 2 gigawatts of electricity from Iran’s power grid each day, according to the BBC.
The fictional DeLorean time machine in “Back to the Future” needed just 1.21 gigawatts to travel through time. And a single gigawatt is enough to power 110 million LED lights, or is equivalent to the power of 1.3 million horses, according to the U.S. Department of Energy.
Global crypto mining consumes about 114 terawatt-hours a year, which is more than the annual electricity needs of the Netherlands or the Philippines, according to a tool built by researchers at University of Cambridge Judge Business School’s Centre for Alternative Finance.
Indoor cannabis farms also use heavy amounts of electricity to power lights, fans, water pumps and heating systems. U.S. cannabis farms consumed about 1% of national electrical power in 2012, according to a study by the Lawrence Berkeley National Laboratory. Today, that would be equivalent to nearly 40 terawatt-hours a year.
and its relationship with crypto-miners, it also happens to be true.
Worries about the impact of crypto-mining have hung over the chip maker as the latest cryptocurrency craze began pushing ethereum prices skyward earlier this year. Nvidia’s graphics processors designed for videogaming are also used to “mine” ethereum, which involves matching and updating cryptocurrency transactions in return for rewards. Those rewards grow as ethereum prices rise, and this year has seen the cryptocurrency’s value soar nearly fourfold, even after a sharp correction over the past few weeks.
Nvidia got badly burned by a previous ethereum price jump and subsequent crash in 2018, which resulted in miners dumping their chips on the secondary market and thus hurting Nvidia’s sales. So investors are extra wary this time around, as evidenced by the reaction to the company’s fiscal first-quarter results late Wednesday. Revenue surged 84% year over year to about $5.7 billion, while the company projected $6.3 billion for the current period—14% above Wall Street’s expectations. But the company acknowledged that crypto demand will drive some of that upside. Nvidia’s share price slipped 1% Thursday morning.
Nvidia’s business with crypto-miners is hard to fully quantify. The company has started selling specialized graphics cards designed for mining, and it estimates that revenue from these products totaled $150 million in the recently ended quarter and will reach $400 million in the current period. That’s about 6% of Nvidia’s total projected revenue for the quarter. But the company also admits miners could still be snapping up its regular gaming cards as well, even though Nvidia has employed some technical measures to make those products less useful for mining.
Strength in Nvidia’s main businesses should better contain any risk from crypto exposure this time around. Its gaming chip revenue has grown 66% since the fiscal year ended January of 2020, which bore the brunt of the impact of the last ethereum spike, while its data center unit has more than doubled. The two are on track to do a little over $20 billion in combined revenue for the current fiscal year—up 43% from the previous year.
Miners this time around may also be a bit less enthusiastic given upcoming technical changes to the ethereum network that are expected to diminish the profitability of mining. Mark Lipacis of Jefferies estimates that crypto-mining sales of Nvidia’s gaming processors are about 10% of their level during the last price spike. Investors are right not to count on Nvidia’s crypto bubble continuing. But a pop this time is much less likely to leave the chip maker all wet.