World

LYNAS Rare Earths Ltd. is trying to secure a deal with the US Department of Defense to get government-backed price floors for its supplies, similar to those granted to a major US producer last year.

Discussions between the Pentagon and the Australian company were delayed by the US government shutdown last quarter, Chief Executive Officer Amanda Lacaze said in an interview. Price support is a key focus of the negotiations, she said.

“Our objective would be that no government ever actually has to sign a check, but that simply the government policy provides an environment in which the market becomes a properly functioning market,” Lacaze said.

The Pentagon and some private investors struck a deal with US rare earths producer MP Materials Corp last year — in the wake of Chinese export curbs — that offered a guaranteed price floor for its product, giving the firm protection against any market slumps driven by surges in cheaper Chinese supply. It also included a direct equity investment and an offtake arrangement.

Lynas is the only other major non-Chinese supplier besides MP Materials, and is seen as particularly important as it ramps up production of so-called heavy rare earths. Those are critical for defense applications, and are subject to Beijing’s export controls enforced last year. That’s led to some investors asking why Lynas hasn’t quickly secured a similar deal.

“The simple answer is because we’re not American,” said Lacaze, whose 12-year tenure as CEO at Lynas will end with her retirement this year. “No, we can’t get a deal like MP because we are not an American firm, notwithstanding that we are an ally.”

The Trump administration struck a deal with Australia last year that will see the US help finance some rare earths projects, not including Lynas. Lacaze said Lynas isn’t looking for funding. 

“What we want is a functioning market into which we can sell, because we know we can produce reliably on-spec material, and we know that technically we are many years ahead of anyone who might aspire to compete with us,” she said.

Lynas said output of heavy rare earths from its processing plants in Malaysia reached 26 tons last quarter. Some of that was delivered to its long-standing customers in Japan, where manufacturers are watching for any interference to flows from China amid heightened tensions between the two nations.

So far, there haven’t been any signs of major disruptions to Chinese exports after Beijing warned earlier this month there’d be greater scrutiny over applications, Lacaze said. –BLOOMBERG

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EUROPEAN Central Bank President Christine Lagarde (picture) abruptly walked out of an invitation-only sit-down dinner in Davos after US Commerce Secretary Howard Lutnick started laying into Europe, according to people familiar with the matter.

The VIP event on Tuesday evening was attended by more than 100 people and featured Lutnick as the final speaker, said the people, who declined to be identified discussing private matters.

Lutnick’s speech to the dinner guests belittled European economies and their lack of competitiveness compared to the US’s prowess. It made several Europeans in the room uncomfortable and as the criticism escalated, Lagarde was seen exiting, the people said. 

The US official was described as having a bad seat at the back of the room and his remarks were met with some booing, one person said. US Trade Representative Jamieson Greer was placed at the head table, which also featured Blackrock Inc. Chief Executive Officer Larry Fink.

The ECB president is a former French finance minister and also headed the International Monetary Fund for most of Trump’s first term. She started warning in early 2024 that his return to the White House could spell trouble for Europe.

The ECB declined to comment. A spokesperson for Lutnick didn’t immediately return a request for comment. 

One European CEO, speaking on condition of anonymity, said Lagarde was right to walk out of that dinner and that Europe needed to start standing up for itself.

New World Order

Lagarde on Wednesday morning spoke with RTL radio, highlighting that “we are seeing the curtain come up on a new world order.”

“Threatening to take a territory like Greenland that is not for sale, and brandishing tariffs and restrictions on global trade, isn’t really behaving like an ally,” she said. “This new world order must lead us to deeply revise the way we organize our economy in Europe, in the way we build ties with other countries in the world who play by the same rules as us.”

Speaking at the World Economic Forum on Wednesday, JPMorgan Chase & Co. CEO Jamie Dimon said he’d use a different tack than President Donald Trump in addressing US differences with Europe, with the goal of making the region stronger instead of more fragmented.

“I would be more polite about it, about the weaknesses of Europe,” he said.

The Davos dinner incident was first reported by the Wall Street Journal. –BLOOMBERG

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NETFLIX Inc. delivered fourth-quarter results that largely beat Wall Street estimates but issued a cautious forecast for the months ahead, citing higher program spending and the cost of closing its deal with Warner Bros. Discovery Inc.

The streaming leader said Tuesday it plans to increase spending on films and TV shows by 10% in 2026 while forging ahead with plans to buy the studio and streaming business of Warner Bros., a deal that would unite two of the world’s largest entertainment companies. Netflix spent about $18 billion on programming last year, with subscribers growing almost 8% to top 325 million.

On a call with investors Tuesday, Netflix executives said they are increasing spending to take advantage of “attractive investment opportunities.” The company has secured the streaming rights to movies from Universal and Sony, is expanding its portfolio of live events and video games and will introduce a new mobile user interface for the service later this year.

Closing the Warner Bros. deal will add $275 million in costs for this year, on top of the $60 million spent through year end. Netflix will pause share buybacks to accumulate cash for the acquisition, according to its quarterly letter to shareholders.

All that spending will weigh on the company’s profit in the short term. For the current quarter, Netflix forecasts earnings of 76 cents a share, below Wall Street estimates of 82 cents. Sales will be $12.2 billion, in line with estimates.

Shares of Netflix fell 7.3% in premarket trading on Wednessday to $80.91.  

Netflix is in a hotly contested pursuit of Warner Bros.’ streaming and studio businesses. On Tuesday, it announced an amended agreement to buy those divisions for $27.75 a share in cash after previously offering a mix of cash and stock. Warner Bros. plans to spin off its cable networks in a separate transaction. Paramount Skydance Corp., led by technology scion David Ellison, is offering $30 a share in cash for all of Warner Bros.

Netflix executives projected confidence that they would get their deal approved by regulators.

“We’ve already made progress towards securing necessary regulatory approval,” co-Chief Executive Officer Ted Sarandos said on the call. Sarandos described the deal as pro-consumer and pro-innovation.

Netflix is buying Warner Bros. to obtain one of the richest film and TV libraries in the world, content it can mine for new material and help the company expand newer businesses like consumer products, experiences and video games. Last year’s programming budget delivered a marginal increase in viewership for Netflix, with overall engagement growing about 2% in the second half.

The company had a particularly strong programming lineup to close the year, including the final episodes of Stranger Things, a documentary series about hip-hop mogul Sean Combs and a new Frankenstein film.

Even as growth in new users and viewing has slowed, Netflix has sustained double-digit sales growth by raising prices and introducing advertising. The company expects to increase prices in 2026 and predicts ad sales will double this year from $1.5 billion in 2025.

The streaming giant reported sales of $12.1 billion in the fourth quarter and earnings of 56 cents a share, both ahead of analysts’ expectations. Netflix reported sales of $45.2 billion for all of 2025, up 16% from the year before.

Netflix has stopped providing quarterly updates on its subscriber total, directing investors to focus on more traditional financial metrics. For all of 2026, Netflix forecasts sales to grow as much as 14% to $51.7 billion, with an operating margin of 31.5%. –BLOOMBERG

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A QUIET but telling shift is unfolding in the crypto derivatives market, as one of the most reliable money-making trades shows signs of breaking down.

The cash-and-carry trade — in which institutions bought spot Bitcoin and sold futures to capture pricing gaps — is collapsing and signaling a deeper shift in crypto’s market structure. Open interest in Bitcoin futures on the Chicago Mercantile Exchange has slipped below Binance’s for the first time since 2023, underscoring how tighter spreads and more efficient market access are eroding a once-lucrative arbitrage.

The CME Group Inc.’s exchange had been the venue of choice for Wall Street desks running these trades after spot Bitcoin ETFs launched in early 2024. The setup, mirroring the basis trade in traditional markets, was simple: buy spot Bitcoin via ETFs, sell futures, and collect the spread.

In the months following ETF approvals, annualized returns on the so-called delta-neutral strategy often hit double digits, drawing billions from funds that didn’t care about price direction — only yield. But the ETFs that supercharged the trade also sowed its demise: as more desks piled in, the arbitrage spread collapsed. Now, the trade barely clears the cost of capital.

One-month annualized yields are hovering around 5%, among the lowest in years, according to data compiled by Amberdata. Greg Magadini, director of derivatives at Amberdata said that the basis was closer to 17% this time last year and now sits near 4.7%, barely clearing the hurdle set by funding and execution costs. With one-year Treasuries yielding about 3.5%, the trade’s appeal is fading fast.

Amid the basis compression, CME Bitcoin futures open interest has fallen below $10 billion from a peak of over $21 billion, while Binance’s open interest has been steady at around $11 billion, according to data compiled by Coinglass. The shift reflects a pullback from hedge funds and larger US accounts rather than a wholesale retreat from crypto since prices peaked in October, according to James Harris, chief executive officer of digital asset management firm Tesseract. 

Crypto exchanges like Binance are the main venue for perpetual futures, a type of contract on which settlement, pricing, and calculation of margin is done on an ongoing basis, often multiple times a day. Perps, as they’re known, account for the largest trading volumes in the crypto market. Last year, CME also started smaller-sized, longer-dated futures contracts for cryptoassets and equity-index markets offer futures positions in spot-market terms, allowing investors to hold contracts for up to five years without rolling into a new contract.

“CME has historically been the venue of choice for institutions and cash and carry arbitrage,” Harris said, adding that the crossover with Binance “is a meaningful signal about how market participation is shifting.” He described the moment as a “tactical reset,” driven by muted yields and thinning liquidity rather than a loss of conviction. 

As per a note shared by the CME Group, 2025 was an inflection point in the market as growing regulatory clarity improved investor outlook in the space, which saw institutions diversifying beyond Bitcoin into tokens like Ether, Ripple’s XRP and Solana.

“We averaged around $1 billion in daily notional OI for Ether in 2024, and in 2025 that number increased to almost $5 billion,” CME Group said.

Even as Federal Reserve rate cuts have lowered funding costs, that has failed to spark a sustained rally in crypto ever since token prices crashed across the board on Oct. 10. Borrowing demand is softer, decentralized finance yields are low, and traders are favoring options and hedges over outright leverage.

Le Shi, Hong Kong managing director at market maker Auros, said that as markets mature, traditional players now have more avenues — from ETFs to direct exchange access — to express directional views. That choice narrows price gaps between venues and naturally squeezes the arbitrage that once inflated CME open interest.

“There’s a self-balancing effect,” Le said, arguing that as participants gravitate to the cheapest venue, the basis shrinks and the incentive to run carry trades diminishes.

The era of near-riskless high returns is likely over, pushing traders toward more complex strategies in decentralized markets, according to Bohumil Vosalik, CIO of 319 Capital. For high-frequency and arbitrage-focused firms, that means hunting elsewhere, he said. –BLOOMBERG

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LONDON – The UK government on Tuesday gave China the green light to build a “mega-embassy” in the heart of London eight years after Beijing bought the site, triggering fresh anger from residents and rights groups.

The 20,000-square-metre (235,000-square-foot) site is set to become the largest embassy complex in the UK by area, and one of the largest in the centre of a Western capital.

But it could still face legal challenges and residents vowed Tuesday to act.

Housing minister Steve Reed’s decision to grant planning permission came after several delays over national security concerns.

There have also been protests by activists who fear the sprawling site could be used to spy on and harass dissidents.

Reed said the decision was now final, barring a successful challenge in court.

A government spokesperson said intelligence agencies had helped to develop a “range of measures… to manage any risks”.

“Following extensive negotiations in recent months, the Chinese government has agreed to consolidate its seven current sites in London into one site, bringing clear security advantages,” the spokesperson said.

Security minister Dan Jarvis said China would continue to pose national security threats.

But he said after “detailed consideration of all possible risks around this new embassy… I am assured that the UK’s national security is protected”.

There was anger though among the MPs, local residents and campaigners who have opposed the plans.

The decision “means more interference, more influence operations and more intimidations of people like me”, said activist Chloe Chueng, from the Committee for Freedom in Hong Kong Foundation.

Mark Nygate, the treasurer of the Royal Mint Court Residents Association, told a press conference: “We have to study the decision but we think there are a number of grounds for review which we will develop.”

“This is a terrible decision that ignores the appalling brutality of the Chinese Communist Party,” said Conservative MP Iain Duncan Smith, highlighting allegations of forced labour and cyberattacks.

Really afraid

The right-wing Daily Telegraph newspaper said last week it had obtained unredacted plans showing the site would house 208 underground rooms, including a “hidden chamber”.

The newspaper said Beijing planned to demolish and rebuild a wall between the embassy and sensitive underground internet cables.

But the new embassy also appears to be a sticking point in bilateral ties.

China has voiced frustration at the delays and has raised the issue with Britain’s Prime Minister Keir Starmer.

Media reports say the Labour leader, who is seeking to reset ties with the economic powerhouse, will visit China later this month.

Starmer’s office has not confirmed the trip, which would be the first visit by a UK prime minister since 2018.

Ties between the two nations fell to new lows under the previous Conservative government, defeated by Labour in 2024.

While the embassy approval should help boost relations, other concerns over alleged Chinese espionage activity in Britain and a rights crackdown in Hong Kong could still complicate matters.

Last month, Starmer acknowledged that while China provided significant economic opportunities for the UK, it also posed “real national security threats”.

There have been multiple protests against the embassy plans in London, with hundreds gathering outside the proposed site at the weekend.

A protester who gave his name only as Brandon because he feared reprisals told AFP on Saturday he thought the plans raised a “lot of concerns”.

“I don’t think it’s good for anyone except the Chinese government,” said the 23-year-old bank employee, who moved to Britain from Hong Kong. –AFP

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KARIWA – The world’s biggest nuclear power plant was restarted Wednesday for the first time since the 2011 Fukushima disaster, its Japanese operator said, despite persistent safety concerns among residents.

The plant was “started at 19:02” (1002 GMT), Tokyo Electric Power Company (TEPCO) spokesman Tatsuya Matoba told AFP of the Kashiwazaki-Kariwa plant in Niigata prefecture.

The regional governor approved the resumption last month, although public opinion remains sharply divided.

On Tuesday, a few dozen protesters — mostly elderly — braved freezing temperatures to demonstrate in the snow near the plant’s entrance, whose buildings line the Sea of Japan coast.

“It’s Tokyo’s electricity that is produced in Kashiwazaki, so why should the people here be put at risk? That makes no sense,” Yumiko Abe, a 73-year-old resident, told AFP.

Around 60 percent of residents oppose the restart, while 37 percent support it, according to a survey conducted in September.

TEPCO said Wednesday it would “proceed with careful verification of each plant facility’s integrity” and address any issues appropriately and transparently.

Kashiwazaki-Kariwa is the world’s biggest nuclear power plant by potential capacity, although just one reactor of seven was restarted.

The facility was taken offline when Japan pulled the plug on nuclear power after a colossal earthquake and tsunami sent three reactors at the Fukushima atomic plant into meltdown in 2011.

However, resource-poor Japan now wants to revive atomic energy to reduce its reliance on fossil fuels, achieve carbon neutrality by 2050 and meet growing energy needs from artificial intelligence.

Prime Minister Sanae Takaichi has voiced support for the energy source.

Fourteen reactors, mostly in western and southern Japan, have resumed operation since the post-Fukushima shutdown under strict safety rules, with 13 running as of mid January.

Kashiwazaki-Kariwa is the first TEPCO-run unit to restart since 2011. The company also operates the stricken Fukushima Daiichi plant, now being decommissioned.

Nearly 15 years after the disaster, “the situation is still not under control in Fukushima, and TEPCO wants to revive a plant? For me, that’s absolutely unacceptable”, said Keisuke Abe, an 81-year-old demonstrator.

Anxious and fearful

The vast Kashiwazaki-Kariwa complex has been fitted with a 15-metre-high (50-foot) tsunami wall, elevated emergency power systems and other safety upgrades.

However, residents raised concerns about the risk of a serious accident, citing frequent cover-up scandals, minor accidents and evacuation plans they say are inadequate.

“I think it’s impossible to evacuate in an emergency,” Chie Takakuwa, a 79-year-old resident of Kariwa, told AFP.

On January 8, seven groups opposing the restart submitted a petition signed by nearly 40,000 people to TEPCO and Japan’s Nuclear Regulation Authority.

The petition said the plant sits on an active seismic fault zone and noted it was struck by a strong quake in 2007.

“We can’t remove the fear of being hit by another unforeseen earthquake,” it said.

“Making many people anxious and fearful so as to send electricity to Tokyo… is intolerable.”

Before the 2011 disaster — which killed around 18,000 people — nuclear power generated about a third of Japan’s electricity.

String of scandals

Japan’s nuclear industry has also faced a string of scandals and incidents in recent weeks, including data falsification by Chubu Electric Power to underestimate seismic risks.

At Kashiwazaki-Kariwa, TEPCO said Saturday that an alarm system failed during a test.

“Safety is an ongoing process, which means operators involved in nuclear power must never be arrogant or overconfident,” TEPCO President Tomoaki Kobayakawa said in an interview with the Asahi daily newspaper.

Japan is the world’s fifth-largest single-country emitter of carbon dioxide after China, the United States, India and Russia, and is heavily dependent on imported fossil fuels.

Nearly 70 percent of its electricity in 2023 came from coal, gas and oil — a share Tokyo wants to slash to 30-40 percent over the next 15 years as it expands renewable energy and nuclear power.

Under a plan approved by the government in February, nuclear power will account for around a fifth of Japan’s energy supply by 2040 — up from around 8.5 percent in the fiscal year 2023-24.

Meanwhile Japan still faces the daunting task of decommissioning the Fukushima plant, a project expected to take decades. –AFP

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SEOUL – A South Korean court sentenced former prime minister Han Duck‑soo to 23 years in prison on Wednesday for aiding and abetting a declaration of martial law that briefly suspended civilian rule.

The defendant “disregarded his duty and responsibility as prime minister until the very end”, said Judge Lee Jin-gwan, of the Seoul Central District Court.

“We sentence the defendant to 23 years in prison.”

The sentence is eight years longer than prosecutors’ demand.

The 76-year-old career technocrat was ordered to report to prison immediately after the ruling.

Judge Lee said the martial law decree — declared by Han’s boss Yoon Suk Yeol in December 2024 — was intended with the “aim of subverting the constitutional order” and amounted to insurrection.

Yoon’s stunning imposition of martial law saw armed troops deployed to the National Assembly and the National Election Commission before it was vetoed by the opposition‑led parliament.

In the aftermath, Yoon was impeached and removed by the Constitutional Court in April, triggering a by‑election two months later.

Han is one of many former officials — including Yoon — who have stood trial over their roles in the martial law attempt.

“The defendant is deemed to have played a significant role in the insurrectionary acts of Yoon and others by ensuring, at least formally, compliance with the procedural requirement,” Judge Lee said in a televised sentencing.

Lee pointed out that while Han “voiced concerns to Yoon” over the move, he failed to “explicitly oppose it” or urge other cabinet members to dissuade Yoon from it.

During the course of the trial, Han denied wrongdoing, insisting he had never supported or helped the martial law declaration.

After Yoon was removed from office in April, Han assumed his post as acting president and was at one point seen as a strong conservative contender in the snap election.

He resigned from the role in May to pursue a presidential bid, which soon collapsed when Yoon’s party refused to nominate him as its standard‑bearer.  –AFP

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