Former Goldman commodities chief joins Canadian firm planning to launch transition-focused futures

The former head of commodities at Goldman Sachs Group Inc. GS-N, known for his aggressive forecasts during a nearly three-decade career there, is joining a Canadian firm set to launch a linked futures market to the needs of the energy transition.

Jeff Currie signs with Toronto-based Abaxx Technologies Inc. ABXXF as a non-executive director effective Oct. 1, the company says in a new filing. Mr Currie announced his retirement in August as global head of commodities research at the Wall Street investment banking giant.

Abaxx, which counts mining financier Robert Friedland among its backers, is close to obtaining regulatory approval to begin commercial operations in Singapore, where it creates futures contracts for liquefied natural gas, carbon offsets and nickel sulfate, a material used in the manufacture of batteries.

Josh Crumb, CEO of Abaxx, said in an interview that Mr Currie would offer executives unique insight as the exchange pursues its goal of creating a market for commodities critical to the transition to a low-carbon economy .

“Having the world’s most influential commodity economist on our board gives our stakeholders a better path to achieving this mission, providing guidance and strategic oversight as we decide to influence and disrupt entrenched market practices,” Crumb said.

Mr. Currie is best known for predicting the commodities supercycle, driven largely by the massive expansion of China’s economy in the first decade of this century. It was marked by an unprecedented rise in oil prices, to more than $147 per barrel in 2008. His team also predicted the slowdown in crude prices that began in 2015, but overestimated the duration of the trough prices. Mr. Currie declined to comment for this article, citing his employment contract with Goldman.

Mr. Crumb said several Abaxx executives have known and worked with the closely followed economist over the years. “His academic background, market experience and practical, intuitive knowledge of commodity markets and supply chains will be invaluable,” he said.

The Abaxx exchange would give project developers the price certainty needed for the billions of dollars of infrastructure needed to meet the global goal of net zero greenhouse gas emissions by 2050, he said. Gas producers have traditionally been able to finance new projects relatively quickly through gas hedging contracts, but LNG plants, for example, often require multi-year purchase contracts to allow developers to obtain financing to get started construction, he explained.

Abaxx envisions mining companies selling nickel contracts on exchanges and automakers buying them to de-risk their supply prices before speculators step in to start trading and arbitrage, as they do today on major futures exchanges.

Last month, the company’s Singapore-based operating subsidiary submitted the terms of its initial nickel sulfate contract and is awaiting regulatory approval.

Mr. Crumb, who has worked with well-known names in the mining sector such as Mr. Friedland and the Lundin family, noted that the nickel market currently serves different supply chains: one each for pig iron and stainless steel. , and another for highly refined and highly refined nickel. purified for batteries. Abaxx’s contracts will focus on nickel sulfate used in batteries, a major growth area for the metal.

Nickel has been a volatile commodity in recent years. Last year, the London Metal Exchange was rocked by a massive rise in nickel prices and the exchange’s decision to cancel contracts. This decision gave rise to legal action by two financial companies which held such contracts in order to hedge against market risk.

Meanwhile, in Canada, the concept of LNG being a bridge to net zero emissions is controversial. Supporters say exports could replace coal as a fuel for electricity in other countries, while environmental campaigners say it will only boost gas production at a time when the country should wean itself off fossil fuels .

Mr Crumb said Russia’s invasion of Ukraine highlighted the need for LNG as a secure source of energy supply, while carbon offsets can help reduce overall emissions. Regulated markets, meanwhile, will increase transparency of raw materials and how they are produced to help guard against greenwashing, he said.

Abaxx shares are listed on the Canadian Chicago Board Options Exchange (CBOE), formerly known as the NEO Exchange, and the company is seeking to list on the CBOE global U.S. stock listing exchange. Mr Friedland was an early backer of Abaxx and holds a 7 per cent stake. Mr. Crumb is the largest shareholder with 15 percent.