AP : U.S. Acknowledges Iran Satellite Successfully Reached Orbit Amid Heightened

U.S. Acknowledges Iran Satellite Successfully Reached Orbit Amid Heightened Tensions
U.S. intelligence community’s worldwide threat assessment says the development of satellite launch vehicles 'shortens the timeline' for Iran to develop an intercontinental ballistic missile

The United States has quietly acknowledged that Iran's paramilitary Revolutionary Guard successfully put an imaging satellite into orbit this week in a launch that resembled others previously criticized by Washington as helping Tehran's ballistic missile program.

The U.S. military has not responded to repeated requests for comment from The Associated Press since Iran announced the launch of the Noor-3 satellite on Wednesday, the latest successful launch by the Revolutionary Guard after Iran's civilian space program faced a series of failed launches in recent years.

Early Friday, however, data published by the website space-track.org listed a launch Wednesday by Iran that put the Noor-3 satellite into orbit.

Information for the website is supplied by the 18th Space Defense Squadron of the U.S. Space Force, the newest arm of the American military.

It put the satellite at over 450 kilometers (280 miles) above the Earth’s surface, which corresponds to Iranian state media reports regarding the launch. It also identified the rocket carrying the satellite as a Qased, a three-stage rocket fueled by both liquid and solid fuels first launched by the Guard in 2020 when it unveiled its up-to-then-secret space program.
“Noor” means “light” in Farsi, while “Qased” means “messenger.”

Authorities released a video of a rocket taking off from a mobile launcher without saying where it occurred. Details in the video earlier analyzed by the AP corresponded with a Guard base near Shahroud, about 330 kilometers (205 miles) northeast of the capital, Tehran. The base is in Semnan province, which hosts the Imam Khomeini Spaceport from which Iran’s civilian space program operates.

The website space-track.org also listed the missile as having been launched from the Guard base at Shahroud.

Speaking Thursday night to Iranian state television, Guard space commander Gen. Ali Jafarabadi described the Noor-3 satellite as having “image accuracy that is two and a half times that of the Noor-2 satellite.” Noor-2, launched in March 2022, remains in orbit. Noor-1, launched in 2020, fell back to Earth last year.

Jafarabadi said Noor-3 has thrusters for the first time that allow it to maneuver in orbit. He also offered a wider description of Iran's hopes for its satellite program, including potentially controlling drones. That could raise further concerns for the West and Ukraine, which Russia has bombarded with Iranian-made bomb-carrying drones for over a year.

“If you look at the recent wars in the world, you will see that success on the battlefield is very dependent on the use of satellite technologies,” Jafarabadi said. “Now the armed forces in all the progressive countries are trying to make all their equipment remote control, it means that to make it steerable, when a vessel or any other equipment takes a long distance from us, it is no longer possible to see and guide it, except through satellite.”

The image-taking capabilities of the Noor-3 remain unclear. International sanctions on Iran have locked it out of accessing commercially available imagery, forcing it to develop its own homegrown satellites. The head of the U.S. Space Command dismissed the Noor-1 as a “tumbling webcam in space” that would not provide vital intelligence.

The United States says Iran’s satellite launches defy a U.N. Security Council resolution and has called on Tehran to undertake no activity involving ballistic missiles capable of delivering nuclear weapons. U.N. sanctions related to Iran's ballistic missile program are due to expire Oct. 18.

The U.S. intelligence community’s 2023 worldwide threat assessment says the development of satellite launch vehicles “shortens the timeline” for Iran to develop an intercontinental ballistic missile because it uses similar technology.

“Iran’s continued advancement of its ballistic missile capabilities poses a serious threat to regional and international security and remains a significant nonproliferation concern,” U.S. State Department spokesperson Matthew Miller said Thursday. “We continue to use a variety of nonproliferation tools, including sanctions, to counter the further advancement of Iran’s ballistic missile program and its ability to proliferate missiles and related technology to others.”

Iran has always denied seeking nuclear weapons and says its space program, like its nuclear activities, is for purely civilian purposes. However, U.S. intelligence agencies and the International Atomic Energy Agency say Iran abandoned an organized military nuclear program in 2003. The involvement of the Guard in the launches, as well as it being able to launch the rocket from a mobile launcher, also raise concerns for the West.

Over the past decade, Iran has sent several short-lived satellites into orbit and in 2013 launched a monkey into space. The program has seen recent troubles, however. There have been five failed launches in a row for the Simorgh program, another satellite-carrying rocket.

A fire at the Imam Khomeini Spaceport in February 2019 killed three researchers, authorities said at the time. A launchpad rocket explosion later that year drew the attention of then-President Donald Trump, who taunted Iran with a tweet showing what appeared to be a U.S. surveillance photo of the site.

Tensions are already high with Western nations over Iran’s nuclear program, which has steadily advanced since Trump five years ago withdrew the U.S. from the 2015 nuclear agreement with world powers and restored crippling sanctions on Iran.

Efforts to revive the agreement reached an impasse more than a year ago. Since then, the IAEA has said Iran has enough uranium enriched to near-weapons grade levels to build “several” nuclear weapons if it chooses to do so. Iran is also building a new underground nuclear facility that would likely be impervious to U.S. or Israeli airstrikes. Both countries have said they would take military action if necessary to prevent Iran from developing a nuclear weapon.

Iran and the U.S. just conducted a prisoner swap in which South Korea released just under $6 billion in frozen Iranian assets. However, both countries have signaled publicly that they are no closer to any wider diplomatic deals.

>>> Europe : Brokers Upgrades & Downgrades - 29th of September 2023

>>> Up
* BioMerieux Raised to Buy at HSBC; PT 110 euros
* Brunello Cucinelli Raised to Buy at Goldman; PT 87 euros
* Equinor Raised to Buy at ABG; PT 420 kroner
* Inficon Raised to Buy at Berenberg; PT 1,325 Swiss francs
* OCI Raised to Buy at Jefferies; PT 34 euros
* Sartorius Raised to Buy at SocGen; PT 382 euros
* Terna Raised to Outperform at Grupo Santander; PT 8.20 euros
* VAT Raised to Buy at Berenberg

>>> Down
* Balder Cut to Hold at ABG; PT 50 kronor
* Bystronic Cut to Hold at Stifel; PT 615 Swiss francs
* Detection Tech Oy Cut to Hold at SEB Equities; PT 13 euros
* Eurofins Scientific Cut to Hold at HSBC; PT 60 euros
* OKEA Cut to Hold at ABG; PT 40 kroner
* WPP Cut to Neutral at Goldman; PT 885 pence

>>> Initiation
* FedEx Rated New Buy at HSBC; PT $330
* Lundin Mining Rated New Buy at Jefferies; PT C$13
* Medigene Reinstated Buy at Baader Helvea; PT 2.35 euros
* UPS Rated New Hold at HSBC; PT $170

>>> Call
* Inficon Back to Buy at Berenberg, Valuation Now Seen Attractive
* OCI a Rare Growth Story in Chemicals Sector, Jefferies Upgrades

>>> What to look at today - 29th of Septembert 2023

Stocks rose in Asia on the last trading day of the quarter amid optimism over spending during China’s Golden Week holiday and on talks of a possible meeting between US and China leaders. Treasuries and the dollar declined. Hong Kong shares led equity gains, while benchmarks also advanced in Australia and New Zealand. Mainland markets are shut for a holiday through the end of next week. China’s Vice Premier He Lifeng and Foreign Minister Wang Yi are discussing possible visits to the US to prepare for a potential summit between Xi Jinping and Joe Biden, the Wall Street Journal reported, citing people it did not identify. The MSCI Asia Pacific Index has still fallen almost 4% since the end of June, the biggest quarterly decline since September 2022. Sentiment toward equities has been sapped due the prospect that global interest rates will stay elevated for longer, while inflation is being supported by rising oil prices. Futures for the S&P 500 and Nasdaq 100 were little changed after the US indexes gained Thursday on the back of a rally in tech behemoths including Nvidia Corp. and Meta Platforms Inc.  September is still shaping up to be the worst month this year for US stock benchmarks and the poorest month for global bonds since February after the Federal Reserve left interest rates at the highest in 22 years at its most recent meeting.  Treasury yields rose in Asia after slipping from 16-year highs in New York following weaker-than-expected consumer spending data and dovish Fed comments. The US 30-year yield is on track for the largest quarterly increase since 2009. The dollar weakened against all except one of the Group-of-10 peers Friday, but Bloomberg’s index of the US currency has still gained 2.6% this quarter. The yen briefly extended losses after the central bank announced an unscheduled bond-buying operation. The country’s 30-year bond yield climbed to the highest since 2013 amid upward pressure on global yields. Meanwhile, oil climbed, with Brent set for its best quarter since March 2022, following production cuts by OPEC+ linchpins Saudi Arabia and Russia. US After Hours NKE +8.3% higher on earnings; Ackman provides views on range of topics, see rates going higher.

Nikkei -0.45% Hang Seng +2.71% CSI Closed Shanghai Closed Shenzen Closed

Eur$ 1.0581 CNH 7.2932 CNY 7.2980 JPY 149.38 GBP 1.2224 CHF 0.9133 RUB 96.6188 TRY 27.4656 WTI$ 91.76 Gold 1,865 BTC 26,975 -0.42% ETH 1,645 -0.13%

S&P -0.01% Nasdaq +0.08% EuroStoxx +0.17% FTSE +0.06% Dax +0.28% SMI

Macro :
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- TIT IM : Italy’s State Lender Names Giuseppe Gola as Open Fiber CEO
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- TRI FP : Trigano FY Revenue Misses Estimates
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- VOLVB SS : UAW Mac Truck Members in 3 States Vote to Authorize Strike
- VONN SW : Vontobel Places New $400M AT1 Bonds, Calls Outstanding 2018 AT1
- FTON SW : Ypsomed Says Samuel Künzli Succeeds Niklaus Ramseier as CFO
- XXL NO : XXL Has Signed Exit Agreements for Last Three Stores in Austria

WSJ : Another Worrisome Inflation Indicator: Surging Mining Costs

Another Worrisome Inflation Indicator: Surging Mining Costs
Higher expenses threaten to increase prices for consumers and complicate central banks’ inflation fight

ADELAIDE, Australia—Two years ago, Liontown Resources LTR -1.34%decrease; red down pointing triangle talked up its plan for a $300 million lithium mine to help power the world’s energy transition.

Today the cost of the Kathleen Valley project in the red dirt of the Australian Outback is estimated at more than $600 million.

Liontown, which is a takeover target of Charlotte, N.C.-based chemical company Albemarle, says contractors are charging 30% more than previously estimated. Some engineering groups sat out tenders, reducing competition. A continuing shortage of workers in Australia’s mining heartland that dates to the Covid-19 pandemic is driving up wages and forcing companies to hire less-skilled people.

“It is very challenging,” said Tony Ottaviano, chief executive of Liontown, which has agreed to supply lithium to buyers including automakers Ford Motor and Tesla.

Inflationary bubbles haven’t popped as readily in mining as in some industries. Cost blowouts on new projects have become a theme, and running existing operations has also grown more costly as labor markets remain tight while energy prices resume climbing.

Analysts warn these forces could push commodity prices—including for metals essential to the energy transition—higher for longer, and complicate central banks’ efforts to contain inflation in the years to come. If manufacturers can’t absorb potential price gains, households could end up paying more for metals-intensive products such as electric cars and air conditioners.

“I think you are seeing capital costs to build new projects permanently get adjusted,” said Graham Kerr, chief executive of South32, a $10 billion miner of commodities ranging from coal to silver.

In July, Rio Tinto said it now expects to spend $335 million on a small plant at its Rincon lithium project in Argentina that carried an original budget of $140 million. Lynas Rare Earths last month said inflationary pressures have helped drive up the cost of an Australian plant by more than 25% in less than a year.

On Monday, Australia’s Allkem—which has agreed to merge with Philadelphia-based Livent—raised development-cost estimates for lithium projects in Argentina and Canada and said they would also likely cost more to run. One project’s cost came in 38% higher than a March 2022 estimate.

In some cases, higher costs partly reflect the increasing size of a project. But executives say the biggest engine for budget overruns is inflation.

How miners deal with cost pressures has implications for customers including automakers and construction companies. Commodity prices typically have a theoretical floor that reflects mining costs, as operations risk closure when they become unprofitable.

Since the start of June, prices of coal used in steelmaking are up as much as 45% while iron-ore prices have risen by more than 10%. Oil prices are bearing down on $100 a barrel, raising the cost of operating miners’ typically large fleets of diesel-powered trucks.

Higher commodity prices tend to stoke inflation and choke off growth in countries that rely on imports, economists at the Bank for International Settlements cautioned in a report this year.

“The cost of mining is only a small part of the overall cost of commodity prices, but it all adds up,” said Shane Oliver, Sydney-based chief economist at AMP Capital. “Particularly when increased military spending and decarbonization are increasing the demand for metals at a time when supply is constrained by years of low investment in new mines.”

Record amounts of metals such as copper and lithium will be needed for an energy transition that consulting firm Wood Mackenzie this month estimated will cost $1.9 trillion annually to limit global warming to 2.5 degrees Celsius above preindustrial levels. Limiting it to 1.5 degrees would cost $2.7 trillion a year, mostly in metals-intensive clean-energy infrastructure, the U.K.-based firm said.

BHP Group, the world’s largest miner by market value, said last month that the cost of producing commodities is now higher than before the pandemic. In the 12 months through June alone, BHP’s output costs rose by roughly 9%.

“This implies that price support is also expected to be higher than in previous cycles,” BHP said of commodity markets.

Rivals including Rio Tinto, Glencore and Anglo American have also recently reported increased production costs. Last week, Morgan Stanley analysts raised their real long-run price forecasts for a bunch of mined commodities, including copper and lithium, to reflect continued increases in project costs and rising wages.

When a China-led investment boom lifted mining costs in the 2000s, it didn’t have a big impact on inflation. Rising globalization and China’s entry into the global trading system helped keep a lid on prices of many goods, including for U.S. imports, said AMP Capital’s Oliver.

However, those trends are showing signs of reversing. The U.S. has sought to persuade countries to reduce their dependence on China, and Washington is among governments using subsidies to encourage companies to shift some elements of their production lines back home.

To be sure, miners have found technological fixes to cost problems before. And some metals can be swapped out for cheaper alternatives. Also, for some commodities, the prices of key raw materials used during the production process—such as caustic soda in making aluminum—have eased significantly.

Still, miners and analysts point out that multiple pressure points remain, suggesting the overall cost of mining metals won’t fall far, if at all.

The royalties that miners owe to governments where they operate have been increasing in some parts of the world, as communities demand a greater share of natural-resources wealth.

Carbon-pricing policies, such as carbon taxes and emissions-trading systems, have the potential to accelerate cost increases across metals and other mined commodities, many of which require large amounts of energy to produce, according to Wood Mackenzie.

“Low metal inventories, higher production costs, geopolitical uncertainty and energy-transition demand are all supportive of above-average real-term prices through the cycle and into the longer term,” said Gary Nagle, Glencore’s chief executive.

FT : Probe of Evergrande founder adds to pressure on Chinese developer

Probe of Evergrande founder adds to pressure on Chinese developer
Company embodies excesses of country’s property boom and its unravelling

Thursday’s announcement by Evergrande was as ominous as it was curt. Hui Ka Yan, the billionaire chair behind the indebted Chinese property group, was under unspecified “mandatory measures” for suspicion of “illegal crimes”.

The one-page release was typically short on details from a company that has been locked in an opaque restructuring process since it defaulted on its international debts two years ago. But between the lines, it captured a wider shift in mood.

This was intended to be the moment when after two years of fractious negotiations, investors were getting closer to a deal. Instead, the uncertainty over Hui is just one of a series of indicators that seem to make the fate of Evergrande more difficult to determine.

Employees of its wealth management subsidiary were also detained this month, police in Shenzhen said. Its restructuring plan was this week derailed by an official investigation and it also missed payments on onshore bonds.

More than ever, the future of the developer, which with more than $300bn in liabilities has come to embody both the excesses of a Chinese multi-decade property boom and its recent unravelling, appears tied to Beijing.

Policymakers are under pressure to tackle a property slowdown that shows few signs of ending. Since Evergrande’s default, the sector, which typically accounts for more than a quarter of economic activity, has weighed on growth alongside the impact of a three-year zero-Covid policy.

The investigation into Hui was part of the “standard playbook”, said one person involved in property projects in the Chinese mainland. “The thing has collapsed and people are held to account,” he said.

In this context, the debt restructuring of the world’s most indebted property developer has attracted even more scrutiny.

“It’s very clear to us what will happen if there isn’t a restructuring,” said one person familiar with the restructuring discussions. “This will be a gigantic liquidation that will have far-reaching consequences for everyone involved in the history of this company: directors, advisers, auditors.”

Investors in Evergrande’s billions of dollars of offshore debt were this week supposed to vote on a plan that would have led to their receiving new notes linked to the equity of the group’s Hong Kong-listed subsidiaries. Evergrande shares, suspended since March 2022, resumed trading in late August in anticipation of the plan’s approval.

But the scheme was derailed at the last minute. In a filing to the Hong Kong stock exchange, the company cited an official “investigation” as a reason for the delay. It did not say who was conducting the investigation. In August, it said there was a China Securities Regulatory Commission investigation into information disclosure.

People familiar with the matter said they had been told the CSRC had rejected an application to issue the new equity-linked instruments. It is unclear why this application was rejected.

Evergrande has hired US firm Houlihan Lokey and law firm Sidley Austin to represent it in its talks over the offshore restructuring.

Investors, which had about $20bn in international debt at the time of its default and are represented by law firm Kirkland & Ellis and investment bank Moelis, threatened legal action in 2022 and complained over a lack of engagement. The tone improved when the now-derailed plan emerged in March.

One person involved said there had this week been a lot of “strategising” to try to “reconstruct” the plan in a way that avoided any conflict with the CSRC.

Brock Silvers, chief investment officer at private equity firm Kaiyuan Capital in Hong Kong, said the restructuring had suffered a “setback” but suggested that “all parties were anxious to avoid a wind-up”.

Investors in dollar bonds are “not in a strong position” but “could still dramatically worsen the company’s situation” because of their legal claims, he said, while regulators “need Evergrande to survive to bolster the economy and placate domestic investors and suppliers”.

A wipeout of dollar bonds “would also ruin the outlook for offshore debt issuance at a time when China is desperately seeking foreign investment”.


Evergrande, which in July disclosed losses of $81bn over 2021 and 2022, this week missed Rmb4bn ($548mn) in payments on a mainland bond, according to a Shenzhen filing. Silvers noted authorities are “very sensitive to such domestic market turbulence”.

Early in the pandemic, Beijing introduced limits on leverage at developers, as well as other policies designed to stop the housing market overheating. But, as sales at major developers have slumped, it is now showing signs of easing its approach. City authorities have in recent weeks removed some purchase constraints on first-time buyers.

Fitch, the rating agency, on Thursday said that stress in China’s property sector would “continue to pose cross-sector credit risks in the near term”, and that “the government’s modest policy easing to date is unlikely to drive a sharp turnaround in homebuyers’ sentiment”.

While the government’s position on Evergrande and its restructuring is unclear, the new announcement related to Hui hints at consequences for the individuals involved.

Hui, who was born in 1958 and launched Evergrande in the 1990s, was once known for his political connections but was excluded from the Chinese People’s Political Consultative Conference, an advisory body to the government, in 2022.

Uncertainties over his whereabouts only adds to the doubts over the restructuring. “No one wants to be publicly responsible for this name in any shape or form,” the person familiar with the restructuring said.

“You don’t really know who’s controlling the company,” the person added, pointing to the presence of a company board, an executive management team and risk committee involved in the restructuring. “Trying to understand who is the relevant decision maker is very difficult.”

FT : Sunak’s electricity network plans aim to break the gridlock

Sunak’s electricity network plans aim to break the gridlock
The current approach to designing, approving and building the UK’s grid is too fragmented

The one piece of infrastructure that is absolutely critical to the UK’s net zero ambitions is the electricity grid. Yet the process through which it is designed, approved and built is astonishingly circuitous. While there was much to dislike in prime minister Rishi Sunak’s net zero U-turn last week, new commitments to reform the network should be welcomed.

Sunak’s approach is three-pronged. He wants to reform the way the grid is designed and to streamline planning consent. He also wants to cut the 14-year waiting list for generators to connect to the network. These are helpful ideas. Implementing them, however, will require steely determination against the inevitable opposition.

The problem is clear. As a report published last month by the government’s electricity networks commissioner, Nick Winser, points out, developing the UK power grid is a complex and fragmented process. It starts with transmission owners such as National Grid identifying needs and drawing up a list of projects that might meet them. The regulator approves projects whose expected benefits outweigh investment costs.

That is when the planning nightmare starts. Each application is presented to individuals, communities, the Planning Inspectorate, local authorities and national governments. The process is lengthy and unpredictable. Projects that succeed then order scarce materials such as high-voltage direct current (HVDC) cables, and try to get lines built, despite a chronic shortage of engineers. 

As a result, it takes 12 to 14 years to build strategic transmission infrastructure. Meanwhile, wind farms take less than half the time to complete. The connection process is snarled up too. With almost 300GW of renewables projects stuck in a queue, projects applying now for a date to connect to the electricity network are told to wait beyond 2035.

Slow grid investment is already constraining wind power availability. Today, we have 11GW of wind capacity in Scotland — set to rise to 15GW by 2025 — and only 7GW of capacity to bring power from Scotland to England, says Ashutosh Padelkar at Aurora Energy Research. Such bottlenecks have cost bill payers almost £2bn since 2022. That is because we collectively pay for wind farms not to produce if they cannot shift electricity. We also have to fork out to get another generator, nearer demand, to start up.

This is only going to get worse, given the size of the investments needed to electrify the UK economy. “The grid is not correctly sized, or even in the right place for net zero” says Tom Edwards of Cornwall Insights, an energy research firm. Electricity use in the UK is expected to roughly double from the current 300TWh, according to National Grid scenarios. Peak demand will rise faster. Add everything together and the UK might need to invest £200bn in its network by 2050. 

Quite clearly, we are in no way equipped to deliver this revamp in time. Enter Sunak’s commitment to present a “Spatial Plan”, one of the recommendations in the Winser report. It appears to be an exercise in which the system operator — a function that is being carved out of National Grid — pencils in where it expects demand to be, where it expects supply to be, and connects the dots with infrastructure that it reckons needs to be built.

A long-term centralised plan has a lot of advantages over the current incremental ad hoc approach. For one thing, it enables co-ordination between the grid, the Crown Estate leasing seabeds for wind auctions, and operators looking at complementary solutions such as hydrogen or carbon capture.

Moreover, this kind of planning should speed up the delivery of individual power lines. The hope is that if a broad blueprint were approved by politicians and regulators and explained to local communities, its constituent projects might get less bogged down. Big schemes might even be treated as strategic national infrastructure and benefit from a streamlined authorisation process. 

With an approved strategic plan, the grid might even be able to adopt a “build it and they will come” approach, investing before demand materialises. That is risky, of course. But it is a risk we should be prepared to take. In the past, the regulator’s focus has been about minimising regrettable investment. Now, it should be about trying to break through the gridlock. 

FT : UK streamlines planning for £20bn plan to bring power from Morocco

UK streamlines planning for £20bn plan to bring power from Morocco
Xlinks project seeks 25-year contract with government to guarantee a fixed electricity price

A £20bn plan to bring solar and wind power from the Sahara to Britain via the world’s longest sub-sea cable has been declared a project of “national significance” by Claire Coutinho, the new energy secretary.

The designation will streamline the planning process for the scheme, whose backers claim it could bring enough electricity from Morocco to supply more than 7mn homes, or 8 per cent of Britain’s power needs.

Sir Dave Lewis, former boss of Tesco and executive chair of the project, Xlinks, told the Financial Times the move was a “significant milestone” and said the Morocco energy scheme was “progressing well”.

Under the plan, electricity from the Guelmim Oued Noun region of southern Morocco would be supplied via cables running 3,800km under the sea to the tiny North Devon village of Alverdiscott, where it would be connected to the national grid.

Lewis said the project would have generation capacity of 10.5 gigawatts, of which 7GW would come from solar and 3.5GW from wind. “The sun shines every day there and the wind blows every evening,” he added.

Lewis said the costs for the entire project were now estimated at between £20bn and £22bn but insisted the British start-up could build the scheme with “no government subsidy or handout” and that the project would be transformational.

The Department for Energy Security and Net Zero said in a statement that Coutinho thought the project “could play an important role in enabling an energy system that meets the UK’s commitment to reduce carbon emissions and the government’s objectives to create a secure, reliable and affordable energy supply for consumers”.

Her designation of the scheme as one of “national significance” means a planning application for a converter station at Alverdiscott, which would be needed to transfer power into the grid, and other infrastructure work would go straight to the government, not Torridge District Council in Devon.

The department said the decision to designate the project as nationally significant would “provide the certainty of a single, unified consenting process and fixed timescales”.

The project’s viability depends on Xlinks negotiating a contract with the government to guarantee a fixed electricity price, known as a “contract for difference”.

Such contracts are widely used to support renewable energy projects in the UK, helping to get the offshore wind industry off the ground.

Xlinks said it is seeking a contract for 25 years guaranteeing a price of £56-£64 per MWh in 2012 prices. That is equivalent to about £77-£87 per MWh in today’s prices and is lower than the current wholesale price of about £96 per MWh.

However, prices in Britain may well fall as more renewable power comes online. Before the recent energy crisis, prices were about £50 per MWh.

Xlinks is seeking a higher guaranteed price than that awarded to onshore wind and solar in the UK government’s latest auction round for contracts, of £52 per MWh and £47 per MWh respectively, in 2012 prices. The contract length sought is also a decade longer than the typical 15 years.

Under the contracts for difference scheme, if the wholesale price falls below the price agreed between the developer and the government, the government pays the developer the difference, funded by a levy on consumer bills.

Even with the contract in place, enabling the project to secure financing, it would still face practical challenges ranging from the length and depths over which it needs to lay cable and transport electricity, and potential bureaucratic hurdles because of the number of jurisdictions it needs to cross.

“The distance is a challenge,” said Tom Edwards, senior modeller at Cornwall Insight, the consultancy. “You’ve got to go through Moroccan, Spanish, French waters.”

Lewis said a new generation of high voltage cables for the project would be built by a separate business, XLCC, with plans for a new factory at Hunterston in Ayrshire.

FT : Why are white Britons dying at higher rates than other ethnic groups?

Why are white Britons dying at higher rates than other ethnic groups?
New mortality data could help create targeted policy to reduce the UK’s large and growing disease burden

Britons die at higher rates than any other ethnic group, according to new data from the Office for National Statistics. This finding comes despite the disproportionate impact of Covid on ethnic minorities and the negative effect that racism has on health outcomes.

Understanding inequalities in mortality — defined as the number of deaths per 100,000 people if followed for a year — is crucial for designing effective health and economic policies. But assembling the required data is complicated. The UK does not record ethnicity on death certificates, so to produce these new estimates statisticians linked self-reported ethnicity from the latest census data to death records using NHS numbers, capturing just under 92 per cent of England’s usual resident population.

The results are not perfect. For various reasons, records for ethnic minorities are less likely to be linked successfully, but Veena Raleigh, epidemiologist and senior fellow at think-tank The King’s Fund, says it is “as comprehensive, up to date and representative” a profile of ethnic differences in mortality as we are likely to get.

“We should be acting on this data,” she adds. “It’s really important that policy interventions and services are evidence-based and tailored to reflect the specific issues affecting each community.”

The data shows that mortality rates for white Britons, when adjusted for age differences in the population, were 50 per cent higher between March 2021 and January 2023 than for the group with the lowest rates, Chinese people.


One of the key reasons for lower death rates for ethnic minorities is that a larger share are migrants, who tend to be healthier than the population as a whole. Academic research has found this to be the case in a range of developed countries, including the UK and US.

The so-called “healthy migrant effect” is believed to be driven by self selection — for instance, better educated people are likely to be both better off and more likely to migrate — and lifestyle choices. According to the Commission on Race and Ethnic Disparities, white Britons are more likely than most other ethnic groups to smoke and to drink to excess, which are big risk factors for common killers like cancer.

However, as migrants assimilate, many adopt these unhealthy behaviours, with adverse health consequences. Previous ONS research has found that, between 2012 and 2014, migrants who had arrived in the UK from 1991 onwards had lower death rates in England and Wales than both UK natives and those migrants who arrived before 1991. This was true for all ethnic groups except Pakistanis.


The latest release marks the first time this data has been produced and it is still classed as “experimental” by the ONS. But while it is subject to more uncertainty than other national statistics, the findings are consistent with existing research. Mortality rates from diabetes and cardiovascular diseases like hypertension are known to be higher for South Asian and Black people, while common cancers like lung cancer kill white Britons at a higher rate.

Raleigh says it is important not to treat ethnic minorities “as if they are one homogenous group”. Even among the South Asian groups living in England there are notable differences, with death rates for diabetes almost twice as high among Bangladeshis as Indians, for example.

Understanding the complex relationship between ethnicity and health is increasingly important given the shift in demographics. In 2021, one in four people in England and Wales belonged to an ethnic group other than white British, compared to just one in eight in 2001.


Deprivation and geography are also key determinants of health that need to be considered alongside ethnicity.

Death rates among the most deprived 10 per cent of the population are almost twice as high as in the least deprived 10 per cent, according to the ONS data. But while the worst health outcomes are in the poorest parts of the country, different conditions and communities need to be targeted in each place.

For example, Blackpool and Manchester have some of the highest age-standardised death rates in the country. Both are in the North West and have high levels of deprivation, but very different demographics. The share of the population that is non-white is eight times higher in Manchester, with Pakistanis accounting for more than one in every ten people, according to the 2021 census.

This is reflected in health outcomes. For Mancunians, coronary heart disease, which disproportionately affects South Asians, has the highest death rate of all diseases. Pneumonia, a disease linked to poverty, is the biggest killer in Blackpool.


Despite the strong link between deprivation and health, some minority groups like Pakistanis and Bangladeshis have better outcomes than their white peers despite being on average more financially vulnerable. Experts suggest this may be explained by differences in lifestyle and more supportive family and community networks, but more work needs to be done to understand the complex interplay of factors behind health inequalities.

Raleigh says that there is an urgent need to address the large and growing disease burden across all ethnic groups.

“The growing mountain of [the] long-term sick is having a huge negative effect on population health and the economy. The NHS is firefighting long waiting lists but what we also need to focus on is reducing the demand for healthcare,” she says.

“That will put the NHS and the economy on a more sustainable footing and above all it will make individuals and communities healthier.”

FT : How UK inheritance tax compares internationally

How UK inheritance tax compares internationally
Conservatives reported to be considering scrapping estates levy

The prospect of a Conservative plan to shake up the inheritance tax regime emerged this week as the FT reported that Downing Street aides had debated reducing or scrapping the levy to shore up voter support ahead of next year’s general election. FT Money looks at how the UK’s inheritance tax system compares with other advanced economies.

Low proportion pay IHT
Inheritance tax is often selected as the “most unfair” tax in opinion surveys. Dawn Register, head of tax dispute resolution at BDO, an accountancy firm, thinks this is because “there’s a lot of emotion around [IHT] as it’s linked to someone’s death”.

Nevertheless, very few people in the UK will ever pay it. Latest figures show that less than 4 per cent of estates will be liable for IHT. According to OECD data, the UK has one of the highest IHT exemption thresholds, with only Italy and the US — where 0.2 per cent of estates pay tax — higher. In contrast, in Belgium, 48 per cent of inheritances attracted taxes, the OECD found.


The UK is also one of only three countries, along with Denmark and the US, that tax the estates of deceased donors. Other countries tax the recipients.

Several OECD countries do not have inheritance taxes, including Australia, Austria, the Czech Republic, Canada, Israel, New Zealand, Norway, Slovak Republic and Sweden. They mostly abolished their inheritance taxes decades ago — in an era when lowering taxes was popular — with several ditching the levies before the financial crisis hit. Only Czech Republic and Norway abandoned the taxes more recently, in 2014.

Countries that do tax inheritances only collect a small portion of total tax revenues from the levies. OECD research showed that revenues from inheritance, estate and gift taxes exceeded 1 per cent of total tax in only four OECD countries: Belgium, France, Japan and South Korea.

In the UK, inheritance tax receipts are forecast to be around £7bn this tax year, representing just 0.7 per cent of tax collected, according to a report by the Institute for Fiscal Studies this week. This puts the UK at the middle to higher end in terms of revenue collected as a share of total tax receipts, though revenue is just one of the ways of assessing how effective the tax is.


“Curiously we don’t sit badly in terms of how much money we raise [from IHT] compared with other countries although it is still not a lot,” says Emma Chamberlain, a barrister specialising in inheritance tax and trusts. “But there’s no doubt in my mind that it’s an unfair, arbitrary and over-complex tax. People whose main wealth is tied up in their house can effectively give far less away in practice than those whose wealth is more liquid.”

She argues there are many reasons for this. “I think the absolute killer on IHT is the flat rate, it’s high at 40 per cent,” she says. “As soon as you have high rates, you have lots of reliefs and then you get unfairness, avoidance and lobbying [for more exemptions].”

High rate
The UK’s headline rate of 40 per cent on inheritance tax is high internationally.

OECD research also reveals the UK is unusual in applying flat rates to inheritance taxes. Fifteen OECD countries it surveyed applied progressive rates — where the tax rate rises with the value of the inheritance — up to 80 per cent in the case of Belgium. In contrast, seven countries, including the UK, levy flat rates. The UK had the joint highest flat rate of tax of 40 per cent, shared with the US.

In practice, the ability to claim allowances and reliefs means the average effective tax rate — the rate that estates actually pay — is much lower, at 13 per cent, according to data from HM Revenue & Customs. But Chamberlain says people “don’t see it that way”, even when the difference is explained to them. People “resent” a 40 per cent rate and are more likely to try and avoid it than if it were around 20 per cent, she believes.

Dan Neidle, a tax lawyer and founder of Tax Policy Associates, says the UK’s inheritance tax system suffers from an “unfortunate combination” of a high rate “which makes it unpopular and motivates avoidance” and “overly generous exemptions (which enable avoidance)”.

“Denmark, the Netherlands and Germany all collect about the same amount of tax as us, but with markedly lower rates,” he adds.


‘Not progressive’
By tightening reliefs and exemptions, Neidle argues the UK could create “a fairer, more effective” inheritance tax system by using the money collected from a less generous relief regime to lower the rate.

The Institute for Fiscal Studies this week recommended the UK government abolish the “special treatment” given to business assets, certain types of shares, agricultural assets, pensions and homes passed to direct descendants.

David Sturrock, a senior research economist at the IFS, says: “These exemptions and reliefs open up channels to avoid inheritance tax. This is costly, unfair and distorts economic decisions. Reforming them could raise as much as £4.5bn in additional revenue.”

Neidle adds that the IHT exemption for the foreign property of UK residents who are non-domiciled should be tightened. This exemption is supposed to lapse after 15 years, when the person becomes domiciled in the UK. However, if individuals put non-UK assets in a trust before that point the assets can remain permanently free of IHT for their descendants.

Other advisers told FT Money they had seen the exemption used so that huge sums were transferred with no inheritance tax charged.

“A tax that’s very progressive in theory, turns out to be only progressive for the upper middle class — who are rich enough to get taxed, but not rich enough to avoid it,” says Neidle.

“The middle class pay nothing (unlike much of the Continent). The seriously wealthy pay (relatively speaking) considerably less than the upper middle class.”