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Asia’s consumer map is being redrawn

Asia is the world’s consumption growth engine—miss Asia and you could miss half the global picture, a $10 trillion consumption growth opportunity over…

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This article was originally published by Brookings

By Jeongmin Seong, Tiago Devesa

Asia is the world’s consumption growth engine—miss Asia and you could miss half the global picture, a $10 trillion consumption growth opportunity over the next decade. While sheer scale remains key to the story of the region’s consumer markets in the next 10 years and beyond, also vital is rising diversity amid significant social, demographic, and technological change. Asia’s consumer map is being redrawn.

A new McKinsey Global Institute report, “Beyond income: Redrawing Asia’s consumer map,” identifies three key changes of perspective to understand the new consumption paths being trailblazed by Asia’s consumers.

While the COVID-19 pandemic continues to affect economies in Asia and around the world in fall 2021, this research aims to look beyond the economic effects of the pandemic, focusing on the factors that may influence long-term consumption growth in Asia to 2030 and beyond.

First, we found that as incomes rise across Asia, more consumers will reach the highest tiers of the income pyramid, and movement within the consuming class is likely to be a larger driver of consumption growth than movement into it. In 2000, only 15 percent of Asia’s population was part of the consuming class; the incomes of the remaining 3 billion people were still insufficient to support discretionary spending. However, over the next decade, a significant reversal is likely. By 2030, 3 billion people, or 70 percent of Asia’s total population, may be part of the consuming class.

Members of the consuming class are expected to attain higher income levels than ever before, changing consumption patterns and shifting the center of gravity of the income pyramid sharply upward. Building on World Data Lab’s MarketPro, we found that in the past 20 years, 80 percent of Asia’s consumption growth came from lower-income tiers of the consuming class as new entrants joined. In the next decade, 80 percent of consumption growth could come from higher-income consumers (Figure 1).

Figure 1

Source: “Beyond income: Redrawing Asia’s consumer map,” McKinsey & Company.

Second, cities will continue to drive consumption growth, but promising sources of growth are increasingly diverse cohorts within cities. Key groups of consumers for growth include such disparate cohorts as, say, Insta-grannies in Seoul, Gen Z gamers in Surabaya, career moms in Manila, and lifestyle-indulging digital natives in Chengdu.

Our research identifies 10 demographic and behavior shifts playing out in Asian markets. One of these shifts is aging and its impact on consumption. The number of Asian seniors (aged over 60) is expected to grow by about 40 percent from 2020 to 2030. By then, almost all seniors in Japan and South Korea are expected to be online—the Insta-granny generation. Another shift is the fact that Asian households are shrinking. Single-person households, which already account for almost one-third of households in advanced Asian economies, are fueling new products and services catering to a growing singles economy.

Less certain, but possible, is more consumption coming from working women. If further progress were to be made on women’s economic empowerment in Asia, such as increased female participation in the labor force and access to financial service and digital technologies, we calculate that $3 trillion could be added to Asia’s consumption growth by 2030.

Consumer behavior is changing, too. For instance, Asian consumers are taking a different view of ownership by increasingly exploring renting, subscriptions, and buying secondhand and digital goods along with or instead of physical goods. When they do buy physical goods, they increasingly take sustainability into account. More than half of Asian consumers in one survey said that they were changing their purchasing habits due to concerns about climate, in a clear trend toward eco-responsible consumption. Previous McKinsey Global Institute research found that Asia accounts for two-thirds of the global risk of economic disruption resulting from changes in the natural world in the period to 2050; given this, eco-responsible consumption is only likely to grow.

Third, the relationship between income and consumption is breaking down in some categories as digital platforms and business innovation accelerate. In the old Asia, owning a car, having a credit card, or even gaming depended on having sufficient income. In the new Asia, you can hail a ride on an electric vehicle, have a digital wallet on an app, and game on your phone—affordably.

So the income-driven S-curves (Figure 2) that are so familiar to consumer-facing companies are changing. These curves may flatten as more people, even on lower incomes, can afford certain goods and services. We call these new curves “access curves” and see them already emerging in categories such as mobility, banking, and gaming.

In private vehicle-based mobility, for instance, the penetration of car ownership follows a well-established S-curve, experiencing a sharp increase when countries reach sufficiently high incomes. However, in the case of new mobility solutions such as ride-hailing, penetration is much less dependent on income.

Even in categories where a strong relationship with income continues, S-curves may shift due to cost innovation, with tipping points occurring at an earlier stage in economies’ development. Examples include smartphones and LED lights.

As a result of the shifts identified, a significant proportion of demand is migrating to dynamic consumption curves (i.e., market-specific curves), but the size of this shift is likely to differ by sector. In automotive, the shift could be as high as 65 percent of value. In financial services, 15 to 25 percent could shift.

Figure 2

The income-consumption relationship is being reshaped

Source: “Beyond income: Redrawing Asia’s consumer map,” McKinsey & Company.

There is still a lot of charge left in Asia’s consumption battery, and little doubt that its consumption landscape is being redrawn. Scale, certainly, remains a key factor in the contours of Asia’s consumer growth map, but increasingly it is diversification and segmentation that is redrawing the details.

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Marvel positioning itself as a major landowner in Exploits Subzone of Central Newfoundland

2021.10.16
Marvel Discovery Corp. (TSXV:MARV, Frankfurt:O4T1, MARVF:OTCQB) is a company on the move, with active projects in the Exploits Subzone of Central…

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2021.10.16

Marvel Discovery Corp. (TSXV:MARV, Frankfurt:O4T1, MARVF:OTCQB) is a company on the move, with active projects in the Exploits Subzone of Central Newfoundland and the Atikokan gold camp in northwestern Ontario where the junior has been reporting visible gold at its Blackfly project.

Marvel’s business strategy is fairly straightforward: identify virgin ground that has been “passed over” by larger companies, acquire the claims and begin exploring, first running geophysics to identify targets, then drilling them.

An example of this tactic is what Marvel has been doing in Central Newfoundland.

Exploits Subzone

The Vancouver-based company has assembled a sizeable land position, over 100,000 hectares, right in the thick of the Exploits Subzone of Central Newfoundland — potentially one of the world’s last easily accessible, district-scale gold camps. 

It is known to contain deep-seated gold-bearing structures of the Dog Bay-Appleton Fault — GRUB Line deformation corridor, and is home to the high-grade Keats Zone of New Found Gold (TSX:NFG).

See below for Marvel’s map of the area including the major faults shown as heavy black lines.

The Exploits Subzone of Central Newfoundland

This past summer, Marvel was busy snapping up claims and adding to its land package.

The Victoria Lake project is among the most prospective of Marvel Discovery Corp.’s seven Newfoundland properties.

Located within the Exploits Subzone, the property is bolted onto Marathon Gold’s 4-million-ounce Valentine gold project, which is Atlantic Canada’s largest undeveloped gold resource.

Victoria Lake and Valentine exhibit a similar style of gold-bearing veins and have structural and geological settings in common. Preliminary work on Victoria Lake identified several quartz-arsenopyrite veins returning grab samples ranging from 15.5 to 24.9 g/t gold and 18.6 to 139.3 g/t silver.

In 1995, grab samples from Vein #3 featured 162.7 g/t gold and 220 g/t silver.

Marvel’s Victoria Lake project is bolted onto Marathon Gold’s 4Moz Valentine gold deposit.

In mid-September Marvel acquired an additional 53 mining claims at Victoria Lake comprising 1,325 ha, increasing its land position to 7,650 ha. The company says the acquisition is located along the Exploits Subzone and covers a large, highly prospective structural zone proximal to the Valentine Lake Shear Zone hosting Marathon Gold’s (TSXV:MOZ) Valentine Gold Project with  resources of 4M oz. of gold…

Victoria Lake Gold Project is host to interpreted extensions of the Valentine Lake Shear Zone and two major thrust faults, a wide structural corridor interpreted to play an integral part in the Marathon Gold Deposit.

In fact the claims, acquired via an option agreement with a vendor, contain the highest regional gold-in-till sample — 785 parts per billion (ppb) Au. This high-grade surface gold area was never followed up with additional exploration, making it a juicy target for Marvel Discovery Corp.

“These claim additions were a strategic move, not only in expanding the size and potential, but tying up ground with the highest gold till-in-soil samples in the province of Newfoundland,” Marvel CEO Karim Rayani commented in the Sept. 14 news release. “This shows we are in the right place for a potential discovery adjacent to what will likely become Newfoundland’s next and largest gold mine.”

An important part of Marvel’s Newfoundland narrative is the ground it has acquired near Falcon Gold (TSXV:FG), a sister company to Marvel Discovery also headed by Rayani.

Combined, the two juniors are the largest landowner next to Marathon Gold’s monster 4Moz Valentine gold project, and they each have claims on the Hope Brook gold project.

At Hope Brook, Marvel’s land position straddles both the eastern and western extents of recent land acquisitions by the Sokoman/Benton JV partnership, with Marvel now controlling areas of considerable structural complexity marked by large-scale fold and fault structures, which provide important structural controls (traps) for gold mineralization.

Rock lithologies and structures on the property are also related to those associated with Marathon Gold’s Valentine gold deposit, Sokoman’s Moosehead gold project and New Found Gold’s Queensway gold project — the first mover in the highly prospective Central Newfoundland Gold Area Play.

Marvel’s Hope Brook gold property is contiguous to First Mining and the Sokoman-Benton joint venture.

The Hope Brook mine was in production from 1987 to 1997, producing 752,163 oz. Coastal Gold outlined 6.3Mt at an average grade of 4.68 g/t Au, for 954,000 oz in the indicated and inferred categories.

In a phone call with me on Thanksgiving Monday, Rayani positioned the expanded Hope Brook project (19,075 ha now owned by Marvel) in relation to its neighbors:

“To the north you have Matador which I believe is 800,000 oz, to the south you have another deposit by First Mining optioned to Big Ridge which is another million oz of identified [gold], and we have all of the ground right in the middle so we’re tied onto major structures, we’ve got ground at Valentine Lake, we’ve got ground on three of the largest systems out there.”

He emphasized, “Our objective is to cover off whatever is not covered by government mag [magnetic survey] and fly the rest of it ourselves, then package it up and see what we’re going to do. I would like to try and do as much of the work ourselves and then make a decision as to what we’re going to drill.”

Initial permits have been filed for a first phase of exploration at Hope Brook which includes high-resolution magnetic gradiometry surveys that help to sort structural complexities in geological terranes. The company will also be sending prospecting crews to begin baseline prospecting to determine if the magnetic trends highlighted in regional government surveys are due to similar mineralized structures as those hosting the nearby Sokoman/Benton lithium discovery — the first documented occurrence of lithium in the province of Newfoundland-Labrador.  

“Marvel and our sister company Falcon Gold have made a lot of noise as of late not only in acquiring sizable land positions tied on to major structures but also following the structures to find what we believe are hidden gems that have been overlooked and passed by. Sokoman-Benton’s new Lithium discovery is less than 10 km away and is a testament to our business model,” Rayani stated in the Sept. 20 news release.

Blackfly

The Atitokan gold camp in Ontario is one of the country’s most prolific, and the Blackfly project is one of the camp’s earliest gold occurrences, dating as far back as 1897.

The property is in a highly enriched gold neighborhood, located within the Marmion Lake fault zone about 14 kilometers from Agnico Eagle’s Hammond Reef gold deposit, which hosts an estimated 3.32 million ounces of gold in reserves.

Marvel’s Blackfly project is 14 km from Agnico Eagle’s Hammond Reef gold deposit, with 3.32Moz in gold reserves.

Marvel’s mission is to see whether the historical exploration around the Blackfly mine has more to offer. So far the results look promising.  

Drilling commenced on June 24, with nine diamond drill holes out of 16 completed to date for 1,116m. Drilling has concentrated around the historical shaft area with four holes drilled at the Blackfly Northeast Zone.

Visible gold has been discovered in a number of surface samples and in multiple drill holes, a very good sign that MARV may have hit upon a gold system of yet to be determined size. Four sub-parallel gold mineralization trends have been confirmed by drilling.

Specks of visible gold in hole BF21-19 drilled at the Blackfly Northeast Zone.

“We’re just waiting on the final numbers.” Rayani told me, adding that there is a new zone he expects will report better results than former operator Terra-X.

According to Terra-X’s assessment report, the lineament containing the Blackfly vein has alteration and mineralization traceable over a 4.4-km strike length, as shown by the distribution of samples collected along it.

The best gold values from this lineament occur within the historical work, where Terra-X’s grab samples included results of 167 g/t and 85.6 g/t Au.

Conclusion

Marvel represents an intriguing opportunity for investors looking for an undervalued junior in one of the most exciting gold plays on the planet, the Exploits Subzone of Central Newfoundland.

Larger players like New Found Gold and Marathon Gold have seen success at the drill bit and their market capitalizations have grown accordingly. NFG currently trades at $8.82 per share with a market cap of $1.3 billion while MOZ has a market value of $734 million @ a share price of $3.02. Most of the money here, imo, has already been made. Penny stocks like Marvel offer much better opportunity for share price appreciation.

Central Newfoundland is shaping up to be a classic area play, with over a dozen companies having established a presence there, either buying up claims around the big gold deposits, like Queensway and Valentine, conducting exploration programs or in the case of Marvel Discovery Corp., both. Marvel has applied for exploration permits at Hope Brook and has significantly expanded its land position at Victoria Lake.

I wouldn’t be surprised to see further consolidation in the Central Newfoundland Gold Area Play. If a company like NFG, backed by big money, with Eric Sprott and merchant bank Palisades Goldcorp owning a combined 51% of the shares, were to start making acquisitions, the boost to smaller juniors like Marvel could be dramatic.

Over at Blackfly, Marvel’s mission is to see whether the historical exploration around the Blackfly mine has more to offer. So far the results look promising.  

Nine diamond drill holes have been completed to date for 1,116m. Drilling has concentrated around the historical shaft area with four holes drilled at the Blackfly Northeast Zone.

Visible gold has been discovered in a number of surface samples and in multiple drill holes, a very good sign that MARV may have hit upon a gold system of yet to be determined size. 

Marvel Discovery Corp. has everything we like to see in a gold junior, starting with a great property in an established gold jurisdiction. However, the company understands it’s never a good idea to put all your eggs in one basket. Management has acquired claims close to the big players in the Exploits Subzone of Central Newfoundland. The company already has one of the best prospecting teams in the province, and from what I’ve seen so far, great management that understands the lifeblood of a junior is a steady flow of news. Rayani hinted there will be more announcements from MARV before the year is out. Stay tuned.

Marvel Discovery Corp.
TSXV:MARV, Frankfurt:O4T1, OTCQB:MARVF
Cdn$0.10, 2021.10.15
Shares Outstanding 73.8m
Market cap Cdn$7.9m
MARV website 

Richard (Rick) Mills
aheadoftheherd.com
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Octopus Energy to build co-located green hydrogen projects in UK

UK utility Octopus Energy is set to develop green hydrogen projects alongside the company’s 4 GW of renewable energy capacity in the UK.
The post Octopus…

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A new deal signed by Octopus Energy will enable the utility to develop green hydrogen projects alongside the company’s 4GW of renewable energy capacity in the UK.

Octopus Energy has partnered with Innova Renewables and Novus to design, implement and operate green hydrogen projects.

The utility’s arm Octopus Hydrogen will design and install electrolysers, compression and mobile hydrogen storage projects for Novus. The electrolysers will be between 2 and 20MW in scale and will be installed at Octopus Energy’s existing and new solar, wind and energy storage projects.

These combined renewable energy and hydrogen sites will be among the first co-located green hydrogen projects in the UK, helping to establish a green hydrogen market and the model for a decentralised production and distribution business.

The green hydrogen production facilities will be directly connected to on-site renewable energy generation which will be purchased via long-term power purchase agreements, producing between 500 and 2500kg of hydrogen per day.

Have you read?
Hydrogen valleys critical to achieving greener EU economy
Macron commits to SMR reactors and green hydrogen by 2030

Octopus Energy will provide software for optimal control of the electrolysers. The software will provide the utility with insights regarding the best times to divert renewable energy used to balance the grid for the production of green hydrogen, according to a statement. This will help reduce renewable energy curtailment.

Octopus Hydrogen will be combining the full value chain from production, optimisation and delivery to end-users in the transport sector. The projects will enable the three parties to play a key role in energy transition and help the UK move closer to its 2050 net-zero goal.

Will Rowe, Founder and CEO of Octopus Hydrogen, said: “This is an incredibly exciting step forward on the journey for Octopus Hydrogen. Partnering with Innova and Novus will allow us to develop and establish our decentralised model for green hydrogen production in the UK.

“Through this partnership, we will increase the amount of green hydrogen available in the UK by approximately 25 tonnes per day, enough to decarbonise over 500 long haul HGV’s.

“We need to see electrification wherever possible, for home heating and domestic cars, but we also need green hydrogen to help decarbonise the hard-to-abate parts of the transport sector.”

We can’t wait to see you in Milan

Enlit Europe will bring the energy community together during the live event in Milan (30 November – 2 December 2021). Register here

The post Octopus Energy to build co-located green hydrogen projects in UK appeared first on Power Engineering International.

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Japan’s New Prime Minister Admits Abenomics Was A Failure

Japan’s New Prime Minister Admits Abenomics Was A Failure

Sometimes it takes years, if not decades to be proven right in a world that has…

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Japan's New Prime Minister Admits Abenomics Was A Failure

Sometimes it takes years, if not decades to be proven right in a world that has been turned upside down.

Take Abenomics, the "radical" Japanese vision that was supposed to overhaul Japan's economy and society, push wages higher, boost Japanese exports, spark en economic renaissance and drag Japan out of its perpetual deflationary debt trap (but it's not targeting a weaker yen, it was never targeting a weaker yen) yet was nothing more than sanctioned money printing, and which we bashed from the very beginning, to wit:

... and so much more, it was just today, almost a decade after Abenomics first arrived on the scene, that we get the official verdict, that it was - as we said all along - a failure.

Speaking to the FT in his first interview with international media since taking over Japan’s leadership this month, Fumio Kishida, Japan's new prime minister pledged to move the country away from neoliberalism as he lambasted his own party’s failure to deliver broad-based growth under the Abenomics programme that defined the economy for almost a decade.

Kishida told the FT that while regulatory reform remained necessary, he would approach it with a focus on narrowing the gap between the rich and poor. The implication - Abenomics, like money printing everywhere else, was responsible for creating a staggering chasm between the rich and poor.

“Abenomics clearly delivered results in terms of gross domestic product, corporate earnings and employment. But it failed to reach the point of creating a ‘virtuous cycle’,” Kishida said, in his bluntest attack on a program embraced by his two predecessors that propelled the Tokyo stock market through a doubling in value.

“I want to achieve a virtuous economic cycle by raising the incomes of not just a certain segment, but a broader range of people to trigger consumption. I believe that’s the key to how the new form of capitalism is going to be different from the past,” he added, Kishida said sounding almost socialist.

In Japan, “neoliberalism” most often refers to the reforms of the 1990s and 2000s, including deregulation, privatization and labor market reform, rather than tight fiscal policy and cuts to public spending. By openly criticising his predecessor, Shinzo Abe, who failed not once but twice as Japan’s longest-serving prime minister and who resigned in September 2020, Kishida took a calculated risk according to the FT, as he prepares for a general election on October 31.

One reason for his assault on Abenomics is that recent polls have showed him with an average approval rating of just over 50 per cent, considerably lower than most of his predecessors when they came into office and a signal, said political analysts, that his honeymoon period for enacting meaningful reform may be short.

The former foreign minister was chosen to replace Yoshihide Suga as leader of the ruling Liberal Democratic party on the understanding that he would offer “status quo” stability and continuity. Despite attempts to remove that image, he has already backtracked on one of his major policy initiatives to raise capital gains tax after share prices fell sharply on concerns that such a move would kill a recent revival of interest by individual domestic investors.

Kishida stressed his new economic approach — involving tax incentives for companies to raise wages and pay increases for nurses and care workers — would attempt to reverse the failures of the “trickle-down” theories and market-led reforms that have guided Japanese policymaking from the mid-2000s.

“Everyone just considers regulatory reform in terms of market fundamentalism, competition and survival of the fittest. That’s the problem with our past thinking on regulatory reform,” Kishida said, calling on companies and the public to share a more holistic vision of the economy.

He also envisions deeper collaboration between the state and the private sector to secure strategic assets and technologies such as chips and rare earths that will be pivotal for economic security.

“It is important to ensure a self-sufficient economy when we are considering future growth,” Kishida said. “We need to make sure that Japan has technologies that are critical to complete global supply chains so we can achieve indispensability.”

Kishida publicly signaled for the first time that he may also take a new approach to the corporate governance reform that has been a pillar of the Abenomics programme alongside aggressive monetary easing and fiscal stimulus.While Japan introduced its first corporate governance code in 2015, Kishida said a separate code may be needed to address the needs of small and medium-sized companies. “It’s not realistic to apply the same rules. Corporate governance is important for small- and medium-sized enterprises but they can’t do it in the same way as big companies,” he explained.

Predictably, corporate executives who got egregiously rich thanks to money printing Abenomics have privately expressed scepticism about the new prime minister’s economic agenda, pointing to how Japan has failed to emerge from deflation and open up rigidly regulated markets even after nearly nine years of strong public support for Abenomics. Their solution: do more of what has failed, after all it makes them richer.

Kishida also faces a more complex geopolitical environment than his predecessors, with China’s increasing assertiveness and a global rush to secure national supply chains following the turmoil caused by the coronavirus pandemic.When asked about the new trilateral security partnership the US has launched with the UK and Australia to strengthen their ability to counter China, Kishida said Japan had no specific plans to join the framework.

But he added: “Considering the stability of the region, it is extremely important for European and US countries to be interested and involved in Asia’s security environment.”

Kishida heads an LDP faction with a historically dovish stance on China, but as prime minister, he has called for a strengthening of the country’s missile and other defense capabilities.

For the upcoming election, the ruling party for the first time included a manifesto pledge to double defence spending, in a break from the long-held tradition to keep its military budget within 1 per cent of GDP.

“On the economic front, it’s important to stabilize relations with China,” Kishida said, before noting recent “questionable behavior” from Beijing. “So on the political level, Japan must be able to firmly assert itself against China.”

Tyler Durden Fri, 10/15/2021 - 20:50
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