The former commodities chief at Goldman Sachs Group Inc. GS-N, known for his aggressive forecasts over a nearly three-decade career there, is joining a Canadian company that is set to launch a futures market tied to the needs of the energy transition.
Jeff Currie is signing on with Toronto-based Abaxx Technologies Inc. ABXXF as a non-executive director starting Oct. 1, the company says in a new filing. Mr. Currie announced his retirement as global head of commodities research at the Wall Street investment banking giant in August.
Abaxx, which counts mining financier Robert Friedland as a backer, is nearing regulatory approval to begin its trading operations in Singapore, where it is creating futures contracts for liquefied natural gas, carbon offsets and nickel sulphate, a material used in the manufacture of batteries.
Josh Crumb, Abaxx’s chief executive officer, said in an interview that Mr. Currie will offer executives unique insight as the exchange goes about its goal to create a market for commodities that are essential 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 toward achieving that mission, bringing guidance and strategy oversight as we set out to influence and disrupt entrenched market practices,” Mr. Crumb said.
Mr. Currie is best known for predicting the commodities supercycle that was driven in large part by the massive expansion of the Chinese economy in the first decade of this century. It was marked by an unprecedented runup in oil prices to more than US$147 a barrel in 2008. His team also predicted the downturn in crude that took hold in 2015, but overestimated the length of the price trough. Mr. Currie declined to comment for this article, citing his employment agreement with Goldman.
Mr. Crumb said several Abaxx executives have known and worked with the closely followed economist over the years. “His academic background, experience in markets, and his practical and intuitive knowledge of commodity markets and supply chains will be invaluable,” he said.
The Abaxx exchange would give project developers price certainty necessary for the trillions of dollars in infrastructure needed to achieve the global goal of net-zero greenhouse gas emissions by 2050, he said. Gas producers have traditionally been able to fund new projects relatively quickly through hedging gas contracts, but LNG plants, for example, often require multiyear purchase agreements to allow developers to obtain financing to start construction, he said.
Abaxx envisions miners selling nickel contracts on the exchange, and automakers buying them to reduce price risks in their supply before speculators jump in to begin trading and arbitraging, as they do in today’s major futures exchanges.
Last month, the company’s Singapore-based operating subsidiary submitted the terms for its initial nickel sulphate contract and is awaiting regulatory approval.
Mr. Crumb, who has worked with well-known names in mining such as Mr. Friedland and the Lundin family, noted the nickel market currently serves different supply chains: one for pig iron and stainless steel, and another for nickel that’s highly refined and purified for batteries. Abaxx contracts will be for the nickel sulphate used in batteries, a major area of growth for the metal.
Nickel has been a volatile commodity in recent years. Last year, the London Metal Exchange was rocked by a massive run-up in nickel prices and a decision by the exchange to void contracts. The move prompted a lawsuit by two financial firms 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 contentious. Supporters say exports could displace coal as a fuel for electricity in other countries, while environmental activists argue it will only spur more gas production at a time when the country should be weaning itself off fossil fuels.
Mr. Crumb said Russia’s invasion of Ukraine has underscored the need for LNG as a secure source of energy supply, while carbon offsets can help reduce overall emissions. Regulated markets, meanwhile, will bolster the transparency of the commodities and how they are produced to help guard against greenwashing, he said.
Abaxx shares are listed on the Chicago Board Options Exchange’s (CBOE) Canada Exchange, formerly known as the NEO Exchange, and the company is pursuing a listing on the CBOE’s U.S. equities global listings exchange. Mr. Friedland was an early backer of Abaxx and has a 7-per-cent stake. Mr. Crumb is the largest shareholder with 15 per cent.