http://www.economist.com/

A peak may be in sight for commodity prices

ASSIGNING analysts to cover the humdrum world of commodities and mining was once investment banking’s punishment for low-flyers or copybookblotters. Then China’s pulsating economy and appetite for raw materials sent the prices of industrial metals and bulk commodities soaring. It turned watching the dismal world of copper, zinc and nickel, and the mining firms that dug them up, from a role tantamount to constructive dismissal to glamour.
 
Can it last? Signs that China’s economy is coming off the boil—recent figures put annual growth in the second quarter at a mere 7.6% compared with the double-digit rates of the past few years—have led some to suggest the commodity boom is over and prices are likely to crumble. That prognosis looks premature.
 
The past decade has been a remarkable one for metals and bulk commodities—iron ore and coal. Consumers, desperate to get their hands on raw materials, paid well over the cost of production as demand outstripped supply, which was constrained by years of underinvestment by mining firms. Many analysts talked of a “supercycle”, a long-term surge in prices lasting for decades on the back of Chinese demand. Read the rest of this entry »

http://www.telegraph.co.uk/

Suppose a manager of a British mining company picked up a gun and opened fire on his African workforce? What if the company concerned paid its Zambian miners less than the legal minimum wage? Suppose relations on the shop floor became so poisonous that furious workers chose to crush a manager to death?
 
If a British-based mining house like Anglo American or Rio Tinto had experienced any of this, I strongly suspect that popular protest would have overwhelmed the company concerned, sending its share price into free-fall and casting its very future into doubt.
 
Yet all of the above has happened at a Chinese-owned mine in Zambia. When workers at Collum coal mine protested about poor wages and working conditions in 2010, their Chinese managers responded by opening fire with live rounds. In fairness, they were not shooting to kill: no one actually died, but 11 of the miners suffered bullet wounds.
 
The Chinese argued they were acting in self defence, and Beijing made clear that should charges be pressed against them, bilateral relations would suffer. Zambia, unable to stand up to its biggest foreign investor, duly caved in: no criminal case was ever brought against the managers. Read the rest of this entry »

www.mineweb.com

“Commodities have revived because they are real and really useful to the dynamic emerging economies,” says global commodities specialist Don Coxe.

RENO (MINEWEB) -  Copper miners and gold miners with high-quality reserves in the ground in politically secure regions are becoming more and more valuable, said BMO Capital Markets’ Don Coxe in his August edition of Basic Points.
 
“The commodity story is essentially a scarcity story,” said Coxe. As global living standards improve, the problem will be finding and producing enough metals and minerals to sustain economic progress.
 
Noting that gold was priced below $1,000 an ounce as recently as three years ago, Coxe observed that analysts “are agreed that nearly all gold companies now need at least $1,250 an ounce to make any money on current production when the costs of new capex are factored in.” Read the rest of this entry »

http://www.telegraph.co.uk/

With mining giant Xstrata set to reveal falling profits this week, questions are being asked whether its mega-deal with Glencore will ever happen.

All is not well in Mayfair. High above the streams of shoppers and tourists, the hedge fund managers are growing nervous as they sit in their quiet offices. The problem is the radio silence around the deal of the year, the planned tie-up of the FTSE 100’s Glencore and Xstrata, the commodity trading giant and the mining giant.

But could it be that all those carefully constructed trades, based on the premise that mining’s biggest deal yet – years in the making and expected by everyone – would take place, will in fact unravel? “We thought it was going to happen, it seemed pretty certain, and now… we’re not so sure,” was the nervous comment from one hedge-funder.

He and many others will be holding their breath on Tuesday, when Xstrata updates the markets on its trading for the first half of the year. The figures will reignite the debate around the company’s worth and the merits of Glencore’s offer. The results could shift the balance of power in negotiations around the deal of the year. Read the rest of this entry »

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Ottawa — The federal government has imposed a strict deadline on a review panel to conclude the work on Enbridge Inc.’s controversial Northern Gateway pipeline, even as it scrambles to rescue the $6-billion project from a political sinkhole.

In a notice released Friday, Ottawa has given a review panel until December 2013 to conclude its report, and cabinet will make the final decision by June 2014, roughly a year before Prime Minister Stephen Harper is due to face B.C. voters. A majority in the province, at this point, at least, are staunchly opposed to the Gateway project. The notice confirmed that the federal cabinet – not the National Energy Board – will have the final say as to whether the pipeline can proceed despite environmental concerns.

But the Conservative’s senior minister for British Columbia has fired a clear warning shot across the bow of Enbridge: If the company doesn’t improve its performance, it won’t win approval for the pipeline project that Mr. Harper and the Alberta-based oil industry see as an urgent priority. Read the rest of this entry »

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — It is a sunny Sunday and Vancouver is doing what it does best: looking pretty and post-industrial. Morning lights up the downtown’s glass horizon. A half-dozen scooters rip down the road in a platoon. Cyclists swish past Zipcar lots, kayakers and stand-up paddle surfers ply the waters.

But just a few kilometres away, an oil tanker is preparing to raise anchor and slide into port. Soon, it will open its holds, with a total capacity of 650,000-barrels, to a flush of Alberta oil. After 30 hours of pumping, it will slip away to Long Beach, Calif. Oil tankers are, for now, relatively rare here. A tanker sails into the Vancouver harbour about once a week, docking at the Kinder Morgan-owned Westridge Terminal to accept Alberta crude flowing across the Rockies in the Trans Mountain pipeline.

On this day, it is the 250-metre long Aqualegend that glides into place, smoothly manoeuvring alongside the Kinder Morgan dock. Its deck is spotless enough to eat off. The waters alongside the dock are clear and blue; a harbour patrol vessel has to ask crabbers to make way so the tanker can dock. Under blue skies and sunshine, exporting oil seems safe – even easy. Read the rest of this entry »