ZURICH -Novartis said on Monday it was integrating its pharmaceuticals and oncology units into an innovative medicines (IM) business to simplify its structure, targeting savings of at least $1 billion by 2024.

“Integrating pharmaceuticals and oncology business units into an innovative medicines (IM) business with separate U.S. and international commercial organizations will increase focus, strengthen competitiveness and drive synergies,” the Swiss pharmaceutical company said in a statement.

It said it expects selling, general and administrative savings of at least $1 billion to be fully embedded by 2024 as a result of these changes.

The company based in Basel appointed Marie-France Tschudin as president of innovative medicines international and chief commercial officer, and Victor Bulto as president of innovative medicines in the United States.

Steffen Lang will take over as president operations, while

Shreeram Aradhye becomes president global drug development and chief medical officer. Susanne Schaffert, Robert Weltevreden and John Tsai are leaving Novartis, the company said.

Value creation through these operational improvements should ensure at least 4% sales growth in constant currency through 2026. Novartis also expects to deliver at the high end of its IM margin guidance of high 30s in the medium term and 40% or more in the mid- to long-term.

(Reporting by Silke Koltrowitz, Editing by Miranda Murray)

(Corrects and clarifies Bank of America forecast.)

By Chen Lin and Aradhana Aravindan

SINGAPORE -Singapore’s central bank is likely to tighten its policy settings at its review this month, the third time in a row, as inflationary pressures intensify due to global supply-side disruptions and an easing of the city-state’s border controls.

All 15 economists polled by Reuters forecast the Monetary Authority of Singapore to tighten its policy, but they are divided on how aggressive the central bank is likely to be and which of its various settings it will change.

Instead of interest rates, the MAS manages policy by letting the local dollar rise or fall against the currencies of its main trading partners within an undisclosed band, known as the Nominal Effective Exchange Rate.

It adjusts its policy via three levers: the slope, mid-point and width of the policy band.

Of the economists polled, three expect the MAS to only raise the slope of the band, while another five expect the MAS to raise the slope of the band along with an upward re-centering of its mid-point.

“Downside growth risks due to current geopolitical tensions are manageable, in our view,” ANZ economist Khoon Goh said in a research note. “Tightening resource pressures in the economy and upside inflation risks mean the MAS has to be more forceful in normalising monetary policy.”

Adjusting the mid-point is typically seen as a more “aggressive” tool than only adjusting the slope, while width is usually used to control how much the Singapore dollar can fluctuate.

Five forecast the MAS re-centering the mid-point higher, with no change to the width or the slop.

Morgan Stanley expects the slope to be steepened alongside a widening of the band — a move last made in 2010, while Barclays is predicting a change to all three parameters.

“With the heightened uncertainty from geopolitics, the upside risk to inflation, and the downside risk to growth, we now think that MAS could undertake both a slope steepening and a band widening,” Morgan Stanley analysts said.

While Bank of America only expects the slope to be adjusted, it said re-centreing is a “close call” and will “likely be calibrated”, while not ruling out a band widening as well.

The central bank is expected to release its next semi-annual monetary policy statement no later than April 14.

The MAS tightened monetary policy in January this year in an out-of-cycle move, which followed a tightening in October.

February headline prices rose at their fastest pace in nine years due to higher private transport costs, while core prices eased for the first time since June last year.

The MAS is expecting core inflation to come in within 2–3% this year, up from 0.9% last year, while headline inflation is projected to average between 2.5% and 3.5%.

The government had projected gross domestic product to expand 3-5% in 2022 in a forecast provided before Russia’s invasion of Ukraine.

Singapore’s finance minister Lawrence Wong said in March the city-state’s economy should continue to expand this year but that authorities were ready to deploy more fiscal and monetary policy measures if a worsening Russia-Ukraine crisis impacted growth and inflation.

Last month, Singapore made its biggest reopening moves from the COVID-19 pandemic, easing local restrictions and allowing vaccinated travellers from anywhere in the world to enter without having to quarantine.

(Reporting by Chen Lin and Aradhana Aravindan in Singapore; Editing by Sam Holmes)

By Kirsty Needham

SYDNEY -Digicel Group said it is considering legal options after Papua New Guinea (PNG) imposed a tax of almost $100 million that the telco said could affect its planned A$2.1 billion ($1.57 billion) sale of the Pacific’s biggest mobile network to Australia’s Telstra.

Telstra Corp Ltd said last October it would buy the Pacific operations of Jamaica-headquartered Digicel in a deal largely funded by the Australian government and seen by observers as a way to block China’s rising influence in the region. The operations include 2.5 million mobile phone subscribers across PNG, Fiji, Vanuatu, Tonga, Samoa and Nauru.

Digicel’s Irish founder, Denis O’Brien, met with PNG Prime Minister James Marape last week to try to resolve the matter, Digicel said in a statement emailed to Reuters on Monday.

“In parallel with these discussions, Digicel is also considering its legal options in the event that this discriminatory tax is not removed,” Digicel said.

Its statement said a “new arbitrary, company-specific tax” was introduced on March 25, which was “perplexing not just for Digicel, but also for the Papua New Guinea economy given the reputational and credit rating implications of this sudden, bizarre and unprecedented tax”.

The act imposes a one-time tax liability on Digicel of 350 million kina ($96.43 million) with a further penalty of 50 million kina for non-payment, the statement said.

“This matter requires urgent resolution given its implications for the sale of Digicel’s Pacific operations to Telstra but also given the knock-on consequences for all foreign direct investment exiting Papua New Guinea,” Digicel said.

The statement said the prime minister in the meeting assured Digicel the tax would not proceed and that “Digicel is now engaged in discussions with the Papua New Guinea Government and other relevant stakeholders.”

Marape’s office did not immediately respond to a request for comment.

Papua New Guinea treasurer Ian Ling-Stuckey told parliament last month it would impose a “fair tax” on Digicel Pacific as part of national budget repair measures, in recognition of the company’s high historic level of profitability. The tax was half the rate of an ongoing levy on the company proposed last year, he said.

An official in Ling-Stuckey’s office told Reuters on Monday there had been no announced change in this position, although “they have been deliberating over the past week on the tax”.

Telstra has not changed its business plan for the deal since the new tax was announced. A Telstra spokesperson said in an emailed statement that the PNG tax was a matter for the current owner of Digicel Pacific. In response to Reuters’ questions it said it was still awaiting PNG regulatory approvals for the deal.

“The acquisition of Digicel Pacific by Telstra in partnership with the Australian government has not yet received all of its regulatory approvals and has not (been) completed yet,” it said.

The ongoing levy on Digicel Pacific, flagged by the government last November, would be dropped if the sale to Telstra went ahead, Ling-Stuckey told parliament in March. Telstra had agreed to invest in infrastructure including 115 mobile towers in Papua New Guinea, and other taxes worth more annually, he said.

“Telstra is committed to investing to improve connectivity in the areas that Digicel Pacific operates in, including remote areas of PNG,” Telstra said in a statement.

($1 = 1.3358 Australian dollars)

($1 = 3.6298 kinas)

(Reporting by Kirsty Needham; Editing by Kenneth Maxwell and Sam Holmes)

By Nick Carey and Barbara Lewis

WASHINGTON, England – An electric car is a clean car, right? If only it were so simple.

From motor magnets with toxic histories to batteries made using copious fossil-fuel power, many challenges face carmakers seeking to purge dirtier materials from their supply chains to satisfy regulators and investors.

These obstacles represent opportunities for a growing group of companies in the electric vehicle (EV) ecosystem that bet they can capitalise on that demand.

They include Advanced Electric Machines (AEM) in northern England, which is working with Volkswagen luxury brand Bentley and others in the auto industry to develop recyclable electric motors free of rare earth metals, which are often produced using polluting chemicals.

“Our customers need ways to ditch internal combustion engines that are cost-effective and sustainable without putting tons of this nasty rare earth stuff into their cars,” CEO James Widmer said.

The increasing scrutiny of supply chains comes as the European Union, which announced draft laws last year to enforce net-zero emissions targets, considers charging for excess carbon on imports, as well as legislation requiring ethical sourcing and a recycling plan for EV batteries.

Globally, the prospect looms of national carbon taxes that could cost lagging automakers dearly, while investors and financiers increasingly favour companies with strong environmental, social and governance (ESG) credentials.

“The focus on ESG has become more intense,” said Moshiel Biton, CEO of Israeli battery technology company Addionics, which makes three-dimensional electrodes that Biton says are more efficient, making cleaner but less energy-dense battery chemistries commercially viable.

“But it’s nothing compared to what’s coming.”

Yet it remains to be seen how many of the companies looking to tap the market for cleaning up electric cars will succeed in a rapidly evolving EV technology arena; what’s cutting edge today could be obsolete tomorrow.

Given fierce competition, any projects not advanced enough at the right time will risk missing their chance, according to MacMurray Whale, environmental sustainability strategist at Cormark Securities in Toronto.

“You won’t be able to attract the investor interest because there’s a lot of them and they’re all trying to argue they’re the best,” he said.

‘ROAD MAP TO NET ZERO’

The demand is real, though, from carmakers who face a daunting task to navigate the challenges of making everything from steel to aluminium using cleaner processes, to finding less environmentally damaging battery chemistries.

“We only source new business with suppliers with a road map to net zero,” said Andy Palmer, an electric vehicle pioneer who is CEO of Switch Mobility, a British-based EV maker owned by Indian commercial vehicle maker Ashok Leyland.

Switch buys credits to offset the carbon used to make metal components and factors in that cost when assessing new parts, he added.

Squeezing carbon out of the supply chain is a “vital part” of BMW’s carbon-reduction strategy, sustainability vice president Thomas Becker said.

The German carmaker has negotiated with all its battery suppliers and many of its steel and aluminium suppliers that their materials are made using renewable energy, Becker told a conference in London in March.

The problem with EVs is they are so carbon intensive to make, they have to drive thousands of miles before they do less harm to the environment than a gas-guzzling saloon.

BMW has measured the CO2 footprint throughout its supply chain. If it took no action, its footprint per vehicle would be 18 tonnes of CO2 in 2030, versus 12 tonnes per vehicle in 2019, according to the carmaker. But its carbon reduction plans should cut that number to nine tonnes by 2030, it says.

The need for greener EVs has sent some carmakers back to the drawing board.

Pennsylvania-based engineering company Ansys, which develops modelling software for various industries, has seen surging demand from carmakers seeking to simulate cars and components with greener or lighter materials, such as aluminium instead of steel, said Pepi Maksimovic, director of application engineering.

“There’s an intensification of the effort to address these issues in terms of … bringing better cleaner, greener, meaner technology to the market faster, earlier,” she added.

‘CARBON TAX IS COMING’

Previous corporate sustainability efforts have often been derided as vague and as “greenwashing”.

Costa Caldis, chief operating officer of supply chain tracing company SAFE, said carmakers were moving in the right direction, but not fast enough.

“Stakeholders are demanding supply chain visibility and not just statements.”

Douglas Johnson-Poensgen, CEO of Circulor, which maps supply chains for the likes of BMW and Volvo, said financing from investors was increasingly tied to ESG targets.

“Everybody recognises they need to know where they’re sourcing things from and what they’re inheriting from their supply chain.”

Makram Azar, CEO of London-based investment group Full Circle Capital, said companies in the auto sector that “tick all the right ESG boxes” should find raising capital easier.

“Big asset managers who have allocated huge sums of money to invest in ESG compliant companies have found there aren’t enough of them,” said Azar.

More carbon levies could help to change that.

Full Circle has invested in Britishvolt, a British startup that’s building an EV battery plant that will run only using renewable energy.

Peter Rolton, Britishvolt’s executive chairman, said national governments would need alternatives to fuel taxes that raise vast sums, and taxing carbon would help to squeeze it out of supply chains.

“Carbon taxation is an inevitable part of a 2050 net-zero vision,” he added. “You can see that one coming.”

MINING IN MADAGASCAR

AEM, based in Washington, a city with roots in northeast England’s industrial history, has developed a recyclable motor for EVs using electrical steel and aluminium instead of copper and magnets, thus removing rare earth metals. CEO Widmer said AEM’s motors would be cheaper than conventional ones and in carmakers’ tests have been up to 15% more efficient.

As well as the environmental considerations, many carmakers and suppliers want to reduce reliance on China, which controls 90% of global rare earths metals supply.

China’s dominance extends to graphite, crucial for anodes for EV batteries, which is typically produced using electricity from coal.

Canadian-listed mine developer NextSource plans to start commercial production of graphite in Madagascar from 2023 to capitalise on demand from companies looking to diversify supplies.

Executive vice president Brent Nykoliation said contracts with carmakers should be lucrative and long as they seek to lock in supplies tailor-made to their requirements.

“The conversation has changed dramatically in the last 12 months,” Nykoliation said, referring to carmakers’ engagement with mineral production.

($1 = 0.7595 pounds)

(Reporting By Nick Carey and Barbara Lewis; Editing by Pravin Char)

By Yoruk Bahceli

(Reuters) -Companies raced to bond markets last month, undeterred by the Ukraine war as they tried to lock in relatively cheap borrowing, though the March rush did not prevent first-quarter sales in the euro market from slumping to a four-year low.

Bond markets globally endured immense volatility in the January-March quarter, stoked by hawkish turns from the U.S. Federal Reserve and European Central Bank, as well as Russia’s Feb. 23 invasion of Ukraine. That, coupled with lower funding needs, pushed bond issuance lower across all debt categories, with Refinitiv data showing it as the slowest first quarter in three years.

In the euro area, where debt markets froze for longer following the invasion, fundraising by investment-grade companies amounted to 93.6 billion euros, the worst first quarter since 2018, according to Refinitiv.

But March turned out to be the busiest month since September 2020 for euro investment-grade sales with some 43.5 billion euros raised.

The U.S. market enjoyed its highest monthly volume on record at any time except during the pandemic liquidity crunch in early 2020, with $130.6 billion of sales in March. First-quarter sales however dropped to a three-year low.

“None of the syndicates expected it to go quite as well, said Helene Jolly, head of EMEA investment-grade corporate syndicate at Deutsche Bank, citing volatility, some bond outflows and inflationary pressures.

The March issuance pickup came as credit markets stabilised and risk premia, the additional yield companies pay on top of government bonds, have slipped below levels seen at the start of the invasion.

Still, borrowing costs in the euro area have tripled for investment-grade companies this year, with the average yield on BofA’s index at 1.50%.

For issuers, “it’s that dynamic of saying: yes (borrowing costs) are higher… but on a historical basis it still looks good and anyone who has come this year has looked smart pretty much immediately in terms of what rates have done,” Jolly said.

Some companies have been bringing forward their near-term funding plans, she added.

But for companies with sub-investment grade credit ratings, the backdrop remains challenging. The euro area saw virtually no “junk” debt sales last month, while just $10.6 billion was raised by U.S. junk names.

Issuance slumped 70% compared to first-quarter 2021 in both markets, to the slowest since 2016 in the U.S. and 2019 in the euro area.

A positive sign for the European market waiting to reopen came in recent weeks as two companies carrying split ratings -investment-grade and high yield – managed to place bonds.

However, a third such company, shopping center owner IGD, postponed a deal after it received less demand than the amount it originally sought to raise, according to a lead manager.

Daniel Rudnicki Schlumberger, head of EMEA leveraged finance at JPMorgan, said based on client discussions, he expects the European high yield market to restart around Easter.

“If the current market conditions don’t worsen, we’re going to go through a period of slow issuance that will show gradual progress.”

Rudnicki Schlumberger said he expects most of the issuance to come from mergers and acquisitions financing, as the rise in borrowing costs and hefty issuance during the pandemic makes refinancing deals less likely.

(Reporting by Yoruk Bahceli; editing by Sujata Rao and Louise Heavens)

By Nina Chestney

LONDON -Europe and Russia will both lose heavily if President Vladimir Putin follows through on his threat to cut gas supplies to countries he judges “unfriendly” unless they pay in roubles.

Even at the height of the Cold War, Moscow never cut gas to Europe, but on Thursday, Putin signed a decree ordering foreign buyers to pay in roubles instead of euros from April 1 or face going without Russian supplies.

European capitals rejected the ultimatum and on Friday Kremlin spokesman Dmitry Peskov said it would not affect settlements until later this month.

Although the threat of shortages comes after the peak demand European winter season, Europe still has much to lose when its businesses and households are already reeling from record energy prices, while Moscow could be cutting off one of its main sources of revenue.

Russia exported around 155 billion cubic metres (bcm) of gas to Europe last year, providing more than a third of its gas supply.

Without it, Europe would have to buy more gas on the spot market where prices are already around 500% higher than last year.

Germany and Austria, both heavily reliant on Russian gas, have activated emergency plans, which include rationing if necessary, and other European countries have plans in place.

“Buyers’ unwillingness to abide by (Putin’s) order risks suspending supplies. Both buyers and Gazprom will face losses as a result,” said Dmitry Polevoy, analyst at Moscow-based brokerage Locko-Invest.

DASH FOR GAS

European countries will have to compete with Asia to attract additional liquefied natural gas (LNG) from Qatar or the United States, and even among themselves for alternative pipeline supplies from places such as Norway and Algeria.

U.S. LNG exporters have already emerged as big winners of Europe’s supply crisis, while Norway has also benefitted.

Greece said on Friday it could avoid gas supply problems if Russian flows are halted provided sufficient gas is available on the world market.

Last week, the United States said it will work to supply 15 bcm of LNG to the European Union this year but this would not fully replace what Russia sends to Europe via pipelines.

Apart from trying to get more in an already stretched global gas market, several European countries have also said they will have to use more coal, potentially extend the life of nuclear plants and increase renewables output.

“A disruption of Russian natural gas flows towards Europe remains a tail risk. Europe has more options for alternative supplies, and with demand seasonally low for the coming months, has no risk of running out of supplies this year,” said Norbert Rücker at Swiss private bank Julius Baer.

But that risk would increase towards the winter months when gas demand usually rises.

Gas in European storage might be enough for spring and summer without demand curtailment, but Europe will risk entering next winter with only around 10% of gas in store by the end of October without some energy conservation measures, said Kateryna Filippenko, principal analyst at Wood Mackenzie.

To attract more LNG from elsewhere, European wholesale gas prices would need to remain higher than the Asian benchmark LNG price. Rocketing gas prices are already hurting consumers and industries and governments have spent billions of euros on measures to try and shield them.

“We have to be aware that the companies who have signed long-term contracts with Gazprom do receive gas at significantly lower prices than we have to pay in the LNG market. So there will be impact on our energy prices,” EU energy commissioner Kadri Simson told EU lawmakers last month.

SELF SABOTAGE?

Russia faces the loss of an important revenue stream for its domestic finances.

In the first nine months of 2021, the latest data available from Russian gas producer Gazprom show its revenue from sales to Europe, Turkey and China was 2.5 trillion roubles ($31 billion) from exporting 176 bcm of gas between January and September.

“For Russia, a decision to restrict supply would be like shooting itself in the foot,” said analysts at SEB Research.

If the payment mechanism is designed to shore up the rouble, that could also be short-lived. Prior to the invasion, the Russian central bank required 80% of foreign currency from gas to be converted into roubles. Now it would all have to be switched into the Russian currency.

“The move will cut Russia off from a vital source of foreign exchange (FX) at a time when sanctions have already massively restricted the Russian Central Bank’s access to its FX reserves,” said analysts at Fitch Solutions.

European buyers have repeatedly said the move constitutes a breach of contract. Gazprom risks being involved in arbitration suits where it could be forced to pay large fines in the future.

Another question is what Russia can do with the gas it usually supplies to Europe. The speaker of Russia’s upper house of parliament, Valentina Matviyenko, said last week that Moscow could redirect supplies to Asian markets among others.

However, there is no pipeline that allows Russia to send the gas supplied to Europe to Asia. A pipeline from Russia to China sends gas from other fields that do not supply Europe and there is no interconnector to re-route those flows.

Asian markets might also be reluctant to buy more.

“You make yourself impossible as a gas supplier to other countries. How likely is it, for example, that China or India would choose to rely on Russian gas if Russia so clearly shows that it does not hesitate to use the gas as a weapon,” said SEB Research analysts.

Instead, Russia might be forced to pump the gas into domestic storage sites that can hold around 72 bcm. Gazprom-owned storage sites in Europe could hold another 9 bcm.

Gazprom expects domestic gas demand to increase to 260 bcm by 2026 from 238 bcm in 2020 and has plans to expand storage.

But in the short term, if European gas were re-directed to existing storage, it would be full in three to four months and some gas production could then be shut down, damaging long-term growth, analysts said.

($1 = 81.5210 roubles)

(Reporting by Nina Chestney, Reuters reporters; Editing by Veronica Brown and Barbara Lewis)

By Leika Kihara

TOKYO -Haruhiko Kuroda built a career battling a strong yen and the Bank of Japan governor is unlikely to change course in his final year at the helm, eight sources said, despite political pressure to acknowledge that the weak currency is now a problem.

Sources familiar with the bank’s thinking and people close to Kuroda, whose decade in charge ends next April, said he is likely to protect his legacy by avoiding tweaks to a monetary policy that continues to treat a strong yen as enemy No. 1.

The BOJ’s dovish signals may give markets a chance to drive down the yen further, as prospects of steady policy tightening by the Federal Reserve widen the Japan-U.S. interest rate gap.

“The BOJ looks at inflation, not yen moves, in guiding policy,” one of the sources said.

Kuroda’s career as a finance bureaucrat was marked by fighting rises in the yen that threatened Japan’s export-reliant economy.

After landing the BOJ top job in 2013, he maintained that stance and engineered a dramatic yen fall by pumping in massive monetary stimulus, a policy that is considered among the key successes of former premier Shinzo Abe’s pro-growth “Abenomics”.

Now, Kuroda is increasingly alone in repeating the benefits of a weak currency, as government officials escalate their warnings against excessive yen declines that help push up import costs and consumer prices for energy and food.

The weak yen has emerged as a political hot-button as lawmakers demand measures to cushion the blow from rising inflation ahead of upper house elections due in July.

The mood among companies is starting to change, too. Kengo Sakurada, head of business lobby Keizai Doyukai, said on Tuesday that current yen levels were hurting retailers and can “hardly be seen as appropriate”.

Even former finance ministry colleagues, most of whom like Kuroda struggled to combat a strong yen, are beginning to brand currency weakness as indicative of Japan’s waning economic might.

Kuroda appears unfazed, and continues to argue that while a weak yen may hurt households and retailers, the benefits to the economy outweigh the cost.

The BOJ is still relentless in defending its 0% cap for long-term interest rates, set under its ultra-easy policy.

Undeterred by the yen’s slide to a six-year low against the dollar on Monday, it offered unlimited, fixed-rate purchases of 10-year government bonds through Thursday and ramped up bond-buying for other maturities.

“In a sense, the BOJ is driving down the yen with unlimited bond buying,” said former top currency diplomat Naoyuki Shinohara, who was Kuroda’s colleague at the finance ministry. “It probably doesn’t see the yen’s current levels as dangerous.”

UNWAVERING AND PRAGMATIC

So far, there is little sign of discontent within the BOJ over Kuroda’s stance. Dovish board members, such as Goushi Kataoka, see the weak yen as a key channel through which the bank’s easy policy boosts growth.

A summary of opinions of a March meeting made no mention of the pros and cons of a weak yen.

Prime Minister Fumio Kishida’s administration meanwhile continues to defend the BOJ’s ultra-easy policy as a necessary support to a still-fragile economic recovery.

“It’s hard to tighten monetary policy to deal with cost-push inflation, which means monetary policy must remain loose,” said deputy chief cabinet secretary Seiji Kihara, who is considered among the premier’s closest aides.

Pressure to tweak the yield cap could become overwhelming if the yen, now hovering near 122 to the dollar, plunges to around 130, some analysts say.

But Eisuke Sakakibara, who is known as “Mr. Yen” for master-minding currency interventions in the 1990s, argues that hiking BOJ interest rates will do little to stop yen declines.

For now, Kuroda is expected to ensure the BOJ stays the course on ultra-easy policy. While political pressure may mount for him to budge, current law does not give the government power to fire the central bank governor. Kuroda is unlikely to be reappointed, having already served an unusually long term.

Kuroda’s predecessor, Masaaki Shirakawa, voluntarily left the job several weeks before his term ended, after facing a barrage of criticism for doing too little, too late to beat deflation.

Stepping down early, or hiking interest rates in the face of political pressure, is not in Kuroda’s nature, say people who have regular interactions with the governor.

“He may be under heat but that’s probably not a concern to him,” one of the people said. “He’s extremely pragmatic and unwavering, so I can’t see why he would choose to step down or tweak policy now.”

(Reporting by Leika Kihara; Additional reporting by Tetsushi Kajimoto, Kantaro Komiya and Daniel Leussink; Editing by Catherine Evans)

By Sudarshan Varadhan

NEW DELHI -India’s southern Andhra Pradesh has cancelled bids made for two separate tenders by India’s Adani Enterprises to supply imported coal as the prices quoted were too high, two state government officials told Reuters.

It is the first time in recent years that a major government tender for imported coal has been cancelled over high prices. Details on the cancellation have not been previously reported.

India has asked utilities to step up coal imports to address a domestic shortfall. However, expensive imports could add to the financial woes of state government-owned, debt-laden power distributors, which have overdue payments of nearly $15 billion to power generators.

Adani, India’s largest coal trader, offered to supply last month 500,000 tonnes of South African coal at 40,000 rupees ($526.50) per tonne and another 750,000 tonnes at 17,480 rupees ($230.08) in January, the officials said.

Benchmark South African coal prices started rising in January to hit a monthly high of $176.50 per tonne in the wake of an export ban by Indonesia, extending the rise to a record $441.65 per tonne in March due to the Russia-Ukraine war.

Both tenders were cancelled because the prices quoted were too high, the officials said. Adani was the only bidder for the 500,000 tonnes tender, while Agarwal Coal, which had also bid for the 750,000 tonnes tender, had quoted a higher price than Adani, they said.

Adani and Agarwal Coal did not immediately respond to emails and calls seeking comment on Sunday.

India has cut supplies to the non-power sector as it faced two of its worst power shortages in recent years in October and March, despite record production by state-run near-monopoly Coal India Ltd.

One of the officials, B Sreedhar, managing director at Andhra Pradesh Power Generation Corp Ltd, said the current power shortage was not as bad as the one in October, but said the state was living a “hand-to-mouth existence”.

“We have not been able to build up stocks. Even though coal is available locally because of more mining, transportation is an issue,” Sreedhar told Reuters.

Andhra Pradesh, which faced an electricity deficit of 7% during the last three days of March, floated a tender this week “for urgent procurement” of 100,000 tonnes of imported coal, the officials said.

Indian state government-owned utilities could import at least 2.6 million tonnes in the coming months to address summer power demand, equalling total buying in the last 24 months, other state government officials said.

The western Maharashtra state has floated a tender to procure 2 million tonnes of coal, while southern Tamil Nadu state could float tenders to procure 480,000 tonnes, senior officials there said.

Federal government-run NTPC Ltd floated a tender last month to import 1.25 million tonnes of coal.

($1 = 75.9731 Indian rupees)

(Reporting by Sudarshan Varadhan; Ediitng by Emelia Sithole-Matarise)

By Steve Scherer

OTTAWA -Canada on Monday will announce its support for General Motors Co’s multi-billion-dollar investment in two plants, including one that will produce electric commercial vehicles (EVs), a government source said.

Both the federal government and Ontario’s provincial government will invest in the two GM plants in Ingersoll and Oshawa, said the source, who provided no further details and was not authorized to speak on the record.

Scott Bell, GM’s Vice President Global Chevrolet, Canada’s federal Industry Minister Francois-Philippe Champagne and Ontario Premier Doug Ford will make an announcement about “an important investment in the future of Canada’s automotive manufacturing sector” at 11 a.m. EST (3 p.m. GMT) on Monday, according to a statement.

The announcement will take place at a GM vehicle test track in Oshawa, the company said. GM declined to comment further.

GM said early last year it would invest C$1 billion ($799 million) to convert its CAMI Assembly Plant in Ingersoll, Ontario, to produce its BrightDrop EV600 commercial delivery vans.

Toward the end of last year, GM reopened its Oshawa plant – after it had been shuttered for two years – to produce the Chevrolet Silverado pickup.

Canada is trying to safeguard the future of its manufacturing heartland in Ontario as the world seeks to cut emissions by investing in the electric vehicle (EV) supply chain.

Ontario is geographically close to U.S. automakers in Michigan and Ohio, including GM.

Last month GM and South Korea’s POSCO Chemical said they would build a $400 million facility to produce battery materials in Canada as the carmaker ramps up plans to produce mainly electric vehicles (EVs) in the future.

GM plans to have capacity to build 1 million electric vehicles in North America by the end of 2025.

($1 = 1.2518 Canadian dollars)

(Reporting by Steve Scherer; Editing by Daniel Wallis and Chizu Nomiyama)