By Paul Carsten

LONDON (Reuters) -Oil prices extended gains on Monday, with Brent nearing $80 to build on last week’s steepest weekly jump since early 2023, driven by fears of a wider Middle East conflict and potential disruption to exports from the major oil-producing region.

futures rose $1.30, or 1.7%, to $79.35 a barrel by 1201 GMT. U.S. West Texas Intermediate (WTI) crude futures jumped $1.40, or 1.9%, to $75.78. WTI had earlier risen by more than $2.

Brent climbed by more than 8% last week while WTI soared by 9.1% on the possibility that Israel could strike Iranian oil infrastructure in response to an Iran’s Oct. 1 missile attack on Israel.

The potential escalation of the conflict has countered mounting demand-side pressures, said Priyanka Sachdeva, analyst at Phillip Nova.

Rockets fired by Iran-backed Hezbollah hit Israel’s third-largest city, Haifa, early on Monday. Israel, meanwhile, looked poised to expand ground incursions into southern Lebanon on the first anniversary of the Gaza war, which has spread conflict across the Middle East.

That spread has raised fears that the United States, Israel’s superpower ally, and arch-foe Iran will be sucked into a wider war.

ANZ Research, however, expects any immediate on supply to be relatively small.

“We see a direct attack on Iran’s oil facilities as the least likely response among Israel’s options,” it said, noting the buffer provided by producer group OPEC’s 7 million barrels per day of spare capacity.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known collectively as OPEC+, are due to start raising production from December after cutting in recent years to support prices because of weak global demand. 

OPEC+ has enough spare oil capacity to offset Israel knocking out Iranian supply, but it would struggle if Iran retaliates by attacking installations of neighbouring Gulf nations, analysts have said.

When the Middle East conflict began a year ago, Brent stood at $88.15, but prices are now about $10 lower.

“While nothing can touch the emotion that the conflict has brought to the oil community, it has been well and truly smothered by macroeconomic considerations that have thwarted any idea of an increase in global demand,” said John Evans of oil broker PVM.

By Pratima Desai

London (Reuters) – The uptrend in demand for metals such as used in electric vehicles is intact despite doubts raised by the slowdown in EV sales, but estimating numbers is difficult as the market is evolving, commodity trader IXM’s head of refined metal said.

Sales of electric vehicles have slowed for reasons including a lack of charging infrastructure and concerns about resale values.

“The electric vehicle industry is new. There are a lot of variables including penetration rates and battery chemistries which makes forecasting demand a guessing game,” Tom Mackay said.

“Growth in electric vehicle sales is slowing, but sales are still increasing. It varies from region to region, but overall growth is strong and the demand story for metals is healthy.”

According to consultancy Rho Motion, sales of battery EVs and plug-in hybrid EVs rose 32% last year to 13.63 million units, while in the first and second quarters of this year sales were down 25% and up 22% respectively from the previous quarters.

Copper is used in electric vehicle wiring. It is also used in the batteries, which typically contain lithium and depending on the chemistry nickel and cobalt.

“There have been some impressive technological advances in LFP (lithium ion phosphate) chemistry. Some LFP batteries can go for 1,000 kilometres and some can charge up to 80% in 10 minutes,” said Mackay, who manages the copper cathode, zinc, lead nickel, cobalt and lithium books at the Swiss-based trader.

LFP batteries were developed for the Chinese market to provide a cheaper alternative to nickel cobalt manganese (NCM). But earlier LFP batteries could not be used for long distances.

“People still believe Western world battery demand will still be predominantly NCM, if only because of the higher value of recycling NCM batteries,” Mackay said.

“Recyclability is a very important factor for automakers when deciding what chemistries to use.”

Mackay added that the number of people working at IXM globally is lower than before, around 440.

“Focus has been on the quality of people. We exited the aluminium business because it wasn’t providing the return we require from the resources.”

By Maxwell Akalaare Adombila

PRESTEA-HUNI VALLEY, Ghana (Reuters) – At an unlicensed gold mine in Ghana, men in t-shirts, shorts and rubber boots wade through pools of muddy water laced with mercury, pull out rocks with bare hands and operate a rickety sluice as they search for the precious ore.

The ramshackle mine is part of a booming business that is generating livelihoods and informal revenue streams for Ghana’s economy, even as it harms miners’ health, pollutes waterways, destroys forests and cocoa farms, and fuels crime.

“It’s risky but I just want to survive,” said one of the men at the wildcat site visited by Reuters in the Prestea-Huni Valley district in western Ghana.

The 24-year-old accounting student, who asked not to be named because he was involved in illegal activities, said he had been skipping classes to prospect for gold because he needed the money, having lost his father as a teenager.

There was no professional protective equipment at the mine. Men wore flimsy plastic shopping bags on their heads. One had swimming goggles and another a rice bag covering his torso.

The unlicensed gold mining industry, known in Ghana as “galamsey”, has grown at a breakneck pace this year as global gold prices have risen by almost 30%, enticing new entrants.

Small-scale mines produced 1.2 million ounces of gold in the first seven months of this year, more than in the whole of 2023, according to data from Ghana’s mining sector regulator.

About 40% of Ghana’s total gold output comes from small mines, as opposed to concessions operated by multi-national firms. Some 70-80% of the small mines are unlicensed.

POISONED PROFITS

Martin Ayisi, head of Ghana’s Minerals Commission, the mining industry regulator, said most galamsey gold was smuggled out of the country and was therefore not contributing to national gold export revenues.

For Ayisi, the rise in gold prices is good for Ghana, helping it recover from a severe economic crisis in 2022 that required a $3-billion IMF bailout.

“We should be able to get a lot of money and probably exit the IMF programme earlier,” he said, forecasting national gold export revenues would more than double to $10 billion this year.

But industry experts say the lines between legal mining and galamsey are blurred, and gold from informal mines represents a larger proportion of revenues than the authorities acknowledge.  

The dangers of galamsey, however, are not in dispute.

Dozens of miners have been killed in collapsing pits in recent years, according to news reports and human rights groups, while hospitals and health centres report high numbers of early deaths from pulmonary diseases of miners and residents of towns and villages near mines. 

These are caused by inhaling dust that contains heavy metals such as lead, as well as poisonous fumes from the mercury and nitric acid the miners use to leach gold out of sediment. 

The chemicals are then dumped on the ground or in rivers. Ghana’s water authority says mercury and heavy metals from mining have contaminated about 65% of water sources. 

Meanwhile, thousands of hectares (acres) of cocoa plantations and virgin forest have been destroyed by illegal miners, according to data from Global Forest Watch, an online monitoring platform.

Protesters have taken to the streets in Accra in recent weeks to criticise President Nana Akufo-Addo’s government over what they saw as its failure to tackle these problems. “Leaders, you’ve failed us!” read some of the placards.

“Galamsey has to stop. We want to live long. We don’t want to fall sick. We don’t want to go to the hospital,” said Aboubacar Sadekh, who was taking part in a march on Sept. 22, draped in a Ghanaian flag.

The government denies that it is failing to act on galamsey. When he came to power in 2017, Akufo-Addo pledged to take action on the issue, and during his time in office the government has launched crackdowns, deploying soldiers to arrest illegal miners. In some cases, mining equipment was seized and destroyed.

ORGANISED CRIME

Opinion polls suggest galamsey is one of the top five issues for voters ahead of a Dec. 7 general election.

The main candidates to replace outgoing Akufo-Addo as president, Vice President Mahamudu Bawumia and former President John Mahama, have pledged to formalise galamsey, for example by funding a state agency to explore for gold and map areas for locals to mine.

But successive governments have been promising for years to tackle the problem without making much headway, partly because powerful people are benefitting from the industry, experts say.

Chris Aston, head of a British-backed programme aimed at regulating small-scale gold mining in Ghana, said artisanal miners were vulnerable to organised crime gangs, who provide them with funding for equipment up-front, unlike other lenders.

“Miner pre-financing is one way that organised crime groups can penetrate the gold supply chain,” he said. Funders then “require miners to sell the gold they mine back to them at a subsidised rate”.

Emmanuel Kwesi Anning, a security consultant based in Accra, said galamsey was fuelling an increase in gun-trafficking because those overseeing illegal mines sought armed protection against rivals or thieves.

He also said politicians and traditional rulers in some areas were taking a cut of galamsey profits, further entrenching the problem.

“It has become an elite consensus that they’ll not touch this business.”

Ghana’s information minister did not respond to requests for comments on the allegations of organised crime involvement, gun running and corruption.

A top official in the National Security Ministry, who did not wish to be named because they were not authorised to speak about the issue in public, said authorities were working to address the links between illegal mining, money laundering and gun trafficking.