Latest news with #SquawkBoxEurope
CNBC
9 hours ago
- Business
- CNBC
Mineral-rich Greenland says it doesn't want to become a great mining nation. Here's why
Greenland has little interest in harnessing its massive resource potential to become a top mining country. The world's largest island has been thrust into the geopolitical spotlight in recent months, with U.S. President Donald Trump repeatedly saying that Washington should control the autonomous Danish territory — even refusing to rule out the use of military or economic force. Trump's pursuit of Greenland comes as mining executives describe the race for the Arctic island's largely untapped extractable resources as an "enormous opportunity." However, Greenland's harsh climate, remote landscape and lack of infrastructure have all been cited as barriers to the island's strategic potential. Naaja Nathanielsen, Greenland's minister for business and mineral resources, told CNBC that exploiting some of the territory's highly prized minerals is "absolutely possible and viable," noting that several mining projects are already underway. "We do have projects underway that I think are very promising: graphite, gold, copper, nickel molybdenum and so on. Rare earths as well," Nathanielsen told CNBC's "Squawk Box Europe" on Friday. "But for Greenland, we are not necessarily interested in becoming a really great mining country. We just really want 5 or 10 active mines at any given time," Nathanielsen said. "We are a very small population so, for us, we don't need the entire country to be covered in mines. We are happy with managing a few and I think that is feasible," she added. Greenland has long pitched itself as a Western alternative to China's near monopoly on rare earth elements. Indeed, a 2023 survey by the Geological Survey of Denmark and Greenland (GEUS) found that 25 of the 34 minerals recognized as critical raw materials by the European Commission were found in Greenland. These minerals include graphite, molybdenum and titanium, all of which are expected to play a key role in the pivot to more sustainable energy sources. Earlier this week, mining development firm Critical Metals Corporation announced it had received a letter of interest from the Export-Import Bank of the United States for a loan worth up to $120 million to fund the firm's Tanbreez rare earths mine in southern Greenland. Notably, the funding package marked the Trump administration's first overseas investment in a mining project. Greenland authorities also recently approved a 30-year mining permit to a Danish-French mining group to exploit anorthosite, a rock rich in aluminum, at a site in western Greenland. Separately, Eldur Olafsson, CEO of Greenland-focused mining company Amaroq, described Greenland as "an amazing country" to operate in. "The geology is such that Greenland has traveled around the world through a geological time and gone everywhere — which means that it has an exposure to most mineral resources," Olafsson told CNBC's "Europe Early Edition" on Thursday. "It has a fantastic jurisdiction in relation to regulation. It is based on Nordic principles and law," he added. Asked how the prospect of the U.S. purchasing Greenland could impact the firm's operations and outlook, Olafsson said Greenland's destiny is for Greenlanders to choose. "In the end, I think Greenland will become most likely an independent state, supported by the Nordic countries and supported by the U.S., just like Iceland was," Olafsson said. Greenland's Nathanielsen said the territory has "very high" environmental, social and governance (ESG) standards, in part because of its previous issues with mining pollution. "I think the people of Greenland really support the mining industry, which is quite kind of rare when you look at other jurisdictions. But they do so because they have faith in us having a high environmental standard and taking care of local communities," Nathanielsen said. "And if we start to fold on that, we will also lose the people's support of this industry. For us it is really important. So, I think we have learned from the past," she added.
CNBC
a day ago
- Business
- CNBC
Bank of England holds rates steady, but a summer cut could still be in the cards
The Bank of England kept its key interest rate on hold at 4.25% during its Thursday meeting, with economists expecting the central bank to wait until August before it cuts again. Six out of nine of the BOE's monetary policy committee opted to hold rates with three opting for a cut. The policymakers' decision to hold rates comes after the latest data out Wednesday showed the U.K.'s annual inflation rate reached 3.4% in May, meeting analyst expectations but lingering far above the bank's target of 2%. Earlier this year, the Bank of England said that it expects inflation to rise to 3.7% in the third quarter, before starting to cool into next year. It nevertheless still doesn't know the outcome of U.S. President Donald Trump's global tariffs policy, and with conflict erupting in Middle East, inflationary pressures could rise. Those pressures, coupled with lackluster U.K. growth after a 0.3% economic contraction in April, put the central bank in a difficult position on whether — and when — to cut rates. "The bank last month divided 5 [MPC members] to 4 over the decision to cut rates a little, and the majority were very much seeing the economy slowing down and the threat of a faster slow down if tariffs and other U.S. policy seep through the economy, so that is the worry," John Gieve, former deputy governor of the Bank of England, told CNBC on Wednesday. "The question was, 'Should we cut now or wait a little bit?' That was the way they were looking at it [then]," he added. "The Middle East conflict complicates things further. Firstly, it could have an effect on oil prices which could push inflation up even further ... and, secondly, it could be disruptive to the world economy and to trade, which again would be a downward pressure on our growth, so that's precisely where the bank is right now," he told CNBC's "Squawk Box Europe." Economists polled by Reuters widely expect BOE policymakers to cut rates by 25 basis points (bps) at the next gathering in August, and to make a trim of another 25 bps in the fourth quarter. Grieve said the confluence of external, uncontrollable and potentially inflationary pressures — along with the domestic outlook for growth, taxation and spending — made it hard to predict the BOE's strategy. "What the bank and markets are expecting is that interest rates will edge down to 4% or perhaps a little bit lower the rest of the year unless there's a really big development on the world stage, but we don't know how this conflict in the Middle East will play out, and we don't know how tariffs ... are going to play out. So [Bank of England policymakers] are going to have watch things month by month," Grieve said.
CNBC
12-06-2025
- Business
- CNBC
UK Finance Minister Rachel Reeves' spending plans risk creating ‘a snowball effect' that pushes borrowing costs higher
Britain's government is planning to ramp up public spending — but market watchers warn the proposals risk sending jitters through the bond market further inflating the country's $143 billion-a-year interest payments. U.K. Finance Minister Rachel Reeves on Wednesday announced the government would inject billions of pounds into defense, healthcare, infrastructure, and other areas of the economy, in the coming years. A day later, however, official data showed the U.K. economy shrank by a greater-than-expected 0.3% in April. Funding public spending in the absence of a growing economy, leaves the government with two options: raise money through taxation, or take on more debt. One way it can borrow is to issue bonds, known as gilts in the U.K., into the public market. By purchasing gilts, investors are essentially lending money to the government, with the yield on the bond representing the return the investor can expect to receive. Gilt yields and prices move in opposite directions — so rising prices move yields lower, and vice versa. This year, gilt yields have seen volatile moves, with investors sensitive to geopolitical and macroeconomic instability. The U.K. government's long-term borrowing costs spiked to multi-decade highs in January, and the yield on 20- and 30-year gilts continues to hover firmly above 5%.Official estimates show the government is expected to spend more than £105 billion ($142.9 billion) paying interest on its national debt in the 2025 fiscal year — £9.4 billion higher than at the the time of the Autumn budget last year — and £111 billion in annual interest in 2026. The government did not say on Wednesday how its newly unveiled spending hikes will be funded, and did not respond to CNBC's request for comment about where the money will come from. However, in her Autumn Budget last year, Reeves outlined plans to hike both taxes and borrowing. Following the budget, the finance minister pledged not to raise taxes again during the current Labour government's term in office, saying that the government "won't have to do a budget like this ever again." Andrew Goodwin, chief U.K. economist at Oxford Economics, said Britain's government may be forced to go even further with its spending plans, with NATO poised to hike its defense spending target for member states to 5% of GDP, and once a U-turn on winter fuel payments for the elderly and other possible welfare reforms are factored in. Additionally, Goodwin said, the U.K.'s Office for Budget Responsibility is likely to make "unfavorable revisions" to its economic forecasts in July, which would lead to lower tax receipts and higher borrowing. "If recent movements in financial market pricing hold, debt servicing costs will be around £2.5bn ($3.4 billion) higher than they were at the time of the Spring Statement," Goodwin warned in a note on Wednesday. Mel Stride, who serves as the shadow Chancellor in the U.K.'s opposition government, told CNBC's "Squawk Box Europe" on Thursday that the Spending Review raised questions about whether "a huge amount of borrowing" will be involved in funding the government's fiscal strategies. "[Government] borrowing is having consequences in terms of higher inflation in the U.K. … and therefore interest rates [are] higher for longer," he said. "It's adding to the debt mountain, the servicing costs upon which are running at 100 billion [pounds] a year, that's twice what we spend on defense." "I'm afraid the overall economy is in a very weak position to withstand the kind of spending and borrowing that this government is announcing," Stride added. Stride argued that Reeves will "almost certainly" have to raise taxes again in her next budget announcement due in the autumn. "We've ended up in a very fragile situation, particularly when you've got the tariffs around the world," he said. Rufaro Chiriseri, head of fixed income for the British Isles at RBC Wealth Management, told CNBC that rising borrowing costs were putting Reeves' "already small fiscal headroom at risk." "This reduced headroom could create a snowball effect, as investors could potentially become nervous to hold UK debt, which could lead to a further selloff until fiscal stability is restored," he said. Iain Barnes, Chief Investment Officer at Netwealth, also told CNBC on Thursday that the U.K. was in "a state of fiscal fragility, so room for manoeuvre is limited." "The market knows that if growth disappoints, then this year's Budget may have to deliver higher taxes and increased borrowing to fund spending plans," Barnes said. However, April LaRusse, head of investment specialists at Insight Investment, argued there were ways for debt servicing burdens to be kept under control. The U.K.'s Debt Management Office, which issues gilts, has scope to reshape issuance patters — the maturity and type of gilts issued — to help the government get its borrowing costs under control, she said. "With the average yield on the 1-10 year gilts at c4% and the yield on the 15 year + gilts at 5.2% yield, there is scope to make the debt financing costs more affordable," she explained. However, LaRusse noted that debt interest payments for the U.K. government were estimated to reach the equivalent of around 3.5% of GDP this fiscal year, and that overspending could worsen the burden. "This increase is driven not only by higher interest rates, which gradually translate into higher coupon payments, but also by elevated levels of government spending, compounding the fiscal burden," she said.
CNBC
06-06-2025
- Business
- CNBC
Musk vs. Trump drama dominated in D.C., but Germany's Merz quietly walked away with a win
German Chancellor Friedrich Merz's meeting with U.S. President Donald Trump was dramatically overshadowed by the U.S. leader's spat with Elon Musk. But it was still seen as a win for Merz. "Being sidelined is not necessarily always a bad thing," Carsten Brzeski, global head of macro at ING, told CNBC on Friday. "In fact, it might have even helped Merz as the Musk distraction was also deviating attention away from more controversial topics. It was a high-stakes trip for Merz, who is just a few weeks into his chancellorship, especially given the treatment other leaders have gotten from Trump in the Oval Office in recent months. As such, Merz is unlikely to be disappointed about the outcome — especially given the potential downsides. "Having avoided an escalation in the Oval Office is already an achievement these days," Brzeski added. Merz arrived in D.C. with a full agenda that ranged from strengthening relations between the U.S. and Germany, to tariffs — which could significantly impact key German industries — as well as U.S. support for Ukraine in its war with Russia and higher NATO defense spending. While we don't know what was discussed behind closed doors, Merz was seemingly able to address most of these points with Trump, political strategist Julius van de Laar told CNBC's "Squawk Box Europe" on Friday. "I think what Friedrich Merz got across is that he hopes that the U.S. president will continue to support Ukraine," he said, noting that the issue had gathered momentum recently given several significant attacks. Merz was able to pick up on this, and draw links to the anniversary of D-Day a day after their meeting. "And he said the United States played a great role in ... freeing Europe from the Nazi regime back then, and so he's hoping that Donald Trump will ... say we're going to get engaged again and help Europe become free of dictatorship," van de Laar said. Merz making this point was important in the context of highlighting the U.S-German relationship, according to Jackson Janes, senior resident fellow at the German Marshall Fund. Speaking to CNBC's "Squawk Box Europe," he also pointed out that Trump was gifted his grandfather's birth certificate by Merz, "making the point 'you have a relationship with Germany in your own family.'" Janes also noted that Merz highlighting Germany's plans for higher defense spending would have marked a positive note in the discussion. Germany recently changed its fiscal rules to allow for higher defense spending, and Merz's government seems to be making it a priority. The chancellor has promised a financial push to boost the German military, and the country's foreign minister has suggested support for Trump's proposal that NATO members spend 5% of their gross domestic product on defense. Meanwhile, the sensitive topic of Germany's far-right party, the Alternative fuer Deutschland, was seemingly avoided. Officials in the Trump administration have in recent weeks come out in support of the party after German intelligence services classified it as a "proven right-wing extremist organization." This led to clapbacks from German politicians, with Merz himself warning the U.S. not to get involved. The classification of the AfD is currently on hold amid a legal challenge. All in all, Merz's visit to D.C. was seen as "a home run or a hole in one," van de Laar said. ING's Brzeski also suggested that the trip laid good foundations between the leaders. "There seems to be some common grounds between Trump and Merz, which could be the seeds for a more constructive relationship," he said. Merz even appeared to get some compliments from Trump, with the president commending him for his English skills and saying that while "difficult," the German leader was a "very good man to deal with." Following the meeting, Merz appeared satisfied, saying in a social media post that the atmosphere was "really good," and that the two have much in common. "I am coming back with the feeling that we can speak on the phone any time," he said, according to a CNBC translation. But even an in-person reunion might not be too far off: a Trump trip to Berlin is already being planned, Merz told German media.
CNBC
06-06-2025
- Business
- CNBC
What the Musk-Trump feud could mean for Tesla stock
The spat between U.S. President Donald Trump and Elon Musk, the world's richest person, entered new territory on Thursday — with Tesla getting caught up in the fallout. What began with Musk publicly slamming Trump's spending bill has evolved into a full-blown row between the two, with the president threatening to withdraw billions of dollars' worth of government contracts for Musk's companies. Musk, meanwhile, claimed Trump would never have won a second term in office without his input in the campaign, and said SpaceX would immediately decommission its Dragon spacecraft due to Trump's threats to cut funding. As the pair — who once enjoyed a friendly relationship that landed Musk a job in Trump's administration — publicly traded jibes, Tesla saw $152 billion wiped from its market cap on Thursday. That's the biggest hit to its valuation ever. Shares of the company have shed nearly 30% of their value so far this year, but were last 5% higher in pre-market trade on Friday. Overlook the 'schoolyard spat'? Market watchers said the falling out between Musk and Trump was adding renewed pressure to Tesla , which has already been battling poor car sales and questions over Musk's ability to lead the company given his other ventures, including SpaceX and xAI . Tom Hulick, CEO of Strategy Asset Managers, told CNBC's "Squawk Box Europe" on Friday that there would naturally be concern mounting in markets with "two people going at each other's throats just like Trump and Musk are right now." However, he urged investors to overlook what he labeled the "schoolyard spat" and focus on energy infrastructure developments in the U.S. and beyond, as well as data from the company on earnings, savings and investments. "We're really seeing more positive signs than negative, and whether there's a spat between Trump and Musk or between two different nations, I think people are going to settle down and cooler heads are going to prevail," Hulick, a Tesla bull, told CNBC. Strategy Asset Managers owns Tesla stock. Hulick added on Friday that although the EV giant was under a lot of pressure given the media attention on Musk. "You can't deny [Tesla is] an industry leader in a lot of things." "I think [this is] temporary," he added. "What happens to Tesla beyond this point … is really dependent on what the earnings outlook is for the company. I think down the road there's so much positive in there for the EV industry and for Tesla. We're not going to focus on that near-term stress." Rico Luman, a senior economist specializing in the transport, logistics and automotive sectors at ING Research, told CNBC on Friday that Musk's political career "hasn't done anything good for Tesla" — and the escalation of his row with Trump had only exacerbated the impact. "Tesla's market value is built largely on future growth expectations (unit sales growth but also software autonomous driving and adjacent fields like robotisation)," he explained in an email, noting that the stock price had already come under pressure due to disappointing production and delivery figures. Tesla missed estimates on its top and bottom lines when it reported its first-quarter earnings in April, with auto revenue dropping 20% from a year earlier. However, Luman argued, "slowing global demand for EVs is just part of this story." "The company is suffering headwinds in all three large regional blocks across the globe, including the U.S.," he told CNBC. "In order to deliver on its growth ambition, it requires regulatory accommodation in its home and most important market the US. Soured relations with the government may impact this negatively. Markets seem to price in higher regulatory risk." Tesla shareholders stuck in a 'battle zone' In a note on Thursday, Wedbush's Dan Ives, a longtime fan of Tesla, also likened the deterioration of Musk's relationship with Trump to a "high school friends feud." "This situation … must start to be calmed down on the Musk and Trump fronts and it's not good for either side," he said. "This feud does not change our bullish view of Tesla and the autonomous view but clearly does put a fly in the ointment of the Trump regulatory framework going forward. It's another Twilight Zone moment." Russ Mould, investment director at AJ Bell, noted the boost Tesla's shares got last year as Musk and Trump's relationship blossomed. "Investors thought Musk — and therefore Tesla by default —would get special treatment," he said in a note on Friday morning. However, Trump now seems to be on a mission to make Musk's life difficult, Mould added. "Tesla shareholders are stuck in the middle of the battle zone, as whatever happens to Musk will act as a proxy for the car company's share price." Labeling Musk's outspokenness a "liability" for Tesla shareholders, Mould suggested his position at the head of the firm could ultimately come into question. "[Musk] recently pledged to stay on as CEO for at least another five years, but if he cannot be restrained from stoking fires on the public stage, Tesla's board might have to think long and hard about his future with the business," he said. CNBC has contacted Musk and Tesla for comment.
