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Community and environmental advocates recently won two legal challenges against fossil fuel polluters in South Africa. These resounding victories show that despite setbacks in places like the United States, international leadership and common sense can still prevail in the global fight to curb climate change.  

Earthjustice partnered with Natural Justice and the Green Connection on behalf of coastal communities fighting a plan from Total Energy and Shell to drill multiple oil and gas exploration wells off the West Coast of South Africa, roughly between Cape Town and Cape Agulhas. This region’s unique, ecologically rich, and diverse marine and coastal ecosystems not only provide habitat for numerous species but also support the cultural traditions and livelihoods of the many communities living along the coast. These communities are deeply concerned about the risks of oil spills from the exploration wells, which could reach the shoreline in as little as half a day, depending on weather conditions and the season. 

In a landmark decision in August, the Western Cape High Court set aside the project’s environmental authorization, effectively halting the project and protecting 10,000 square-kilometers (3,861 square-mi) of open ocean from the risk of catastrophic oil spills and habitat destruction that would devastate marine species.  This case has had an immediate impact because the Minister paused consideration of all other oil and gas projects until the government’s appeal of this case is decided, which could take up to six to eight months.  And if this case is upheld on appeal, it is likely that it will send all the pending oil and gas applications back to the drawing board. 

The court’s decision was a powerful rebuke to the companies and the government. First, it found that the project proposal failed to assess the cultural and economic impacts of a catastrophic oil spill on communities, which violated South Africa’s environmental review law and regulations. The court also ruled that the company’s proposal failed to consider transboundary impacts on Namibia from an oil spill.  

And importantly, the Court held that only considering the climate impacts of exploratory drilling, without considering the impacts of full-scale production drilling, was unlawful. The court agreed with our partners that exploration and production are inherently intertwined, noting, “[t]here would be no point in conducting an exploration activity unless an entity hoped to proceed to the next phase of production.”  

Another decision took the government to task for failing to adequately account for the harms caused by fossil fuels: the Supreme Court of Appeal of South Africa, the country’s second highest court, handed our partners Natural Justice, South Durban Community Environmental Alliance, and groundWork a critical victory rejecting a proposal to build a massive 3000 MW gas power plant in Richards Bay. In South Africa’s first ever legal challenge against a gas power plant, the court set aside the power plant’s environmental permit. This requires Eskom, South Africa’s state-run utility monopoly, to start from scratch if it wants to advance this ill-conceived project.  

The court found that the government and Eskom should have considered renewable energy alternatives to the proposed power plant and that “the preferred alternative must be the final choice after comparing the social, environmental, technical, and economic impacts of all the considered options” with sustainable development remaining the goal. The court also found that the government and Eskom failed to assess the cumulative impacts of extraction and transportation of the gas supplying the power plant, and that the public was denied adequate opportunities to participate in the environmental authorization process.  

This case could not have come at a more opportune time, as there are more than a dozen gas plants proposed across South Africa, and we plan to support our partners to hold the government and Eskom accountable the impacts of this gas build-out. 

Earthjustice proudly supported our partners in developing their legal arguments and look forward to continuing our work together to guarantee the right to a healthy and safe environment in South Africa, including the right to safe, clean, and affordable energy.

By Emily Bary

Third Point looked overseas to find a cheaper way to play the memory-chip boom

Third Point cheered SK Hynix’s market-leading status.

Daniel Loeb’s Third Point LLC made a bet on SK Hynix in the third quarter as it saw a way to play the artificial-intelligence trade in a cheaper way than U.S. options afforded.

His third-quarter investor letter mentioned new investments in SK Hynix (KR:000660), a South Korean memory player, and Ebara (JP:6361), a Japanese maker of semiconductor-production equipment. “We believe both companies are leaders in their respective industries, significant beneficiaries of the AI buildout, and trade at undemanding absolute valuations and meaningful discounts to their U.S. peers,” he wrote.

See also: 10 stocks that let you invest like Nvidia in the next hot AI trade

Loeb continues to see opportunities for SK Hynix, which has seen its stock surge more than 250% so far this year. The company competes against Micron Technology (MU) and Samsung Electronics (KR:005930) in the oligopolistic memory market that’s “in the early innings of de-commoditization.”

“AI workloads have been driving substantial growth in high bandwidth memory…where Hynix is the market leader with over 50% market share,” he wrote. And high-bandwidth memory confers various benefits, such as “design stickiness,” that Loeb thinks can reduce earnings volatility in the traditionally cyclical memory industry.

See also: The surprising stocks leading the tech sector this year thanks to an AI renaissance

He noted that SK Hynix is trading “at a mere 7x” estimated 2026 earnings, whereas Micron commands a 10x multiple and Samsung has a 12x multiple. Loeb also invested in SK Square (KR:402340), a “related holding company,” which has a 20% stake in SK Hynix and thereby lets investors “buy SK Hynix at a nearly 60% discount.”

Loeb also discussed the investment in Ebara, which makes chip-production equipment. The company is “a major beneficiary of the advanced packaging structures critical in AI semiconductors across both logic and memory,” he wrote, but he noted that shares trade at a “substantial discount” to rivals.

That discount reflects “an overextended cost structure as well as unnecessarily discounted pricing,” which Loeb said has hurt margins, but Third Point is “in active dialogue with Ebara’s new management team.”

U.S. artificial-intelligence investments served Third Point well in the third quarter, according to the letter, as Taiwan Semiconductor Manufacturing (TSM) (TW:2330) and Nvidia (NVDA) were its two biggest winners.

Loeb commented that OpenAI is expanding its computing capacity at a scale “difficult to comprehend” – but one nonetheless emphasizing “a compute-constrained world…that has benefited our existing investments in TSMC and Nvidia as two integral pieces in this buildout.”

Third Point’s flagship Offshore Fund returned 3.2% in the third quarter, trailing the S&P 500’s SPX 8.1% return and the MSCI World Index’s XX:990100 7.4% return.

“Our performance for the quarter and year has been below our expectations due to the weak performance of several of our largest event-driven positions including Kenvue,” the letter noted.

That stock stands to be less of a detractor in the fourth quarter, as Kimberly-Clark (KMB) announced Monday plans to purchase Kenvue (KVUE) at a 46% premium to the stock’s Friday close.

See: Could Huggies and Tylenol be a good fit? Kimberly-Clark is buying Kenvue for $48 billion

-Emily Bary

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