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Day: July 8, 2014

Zinc Scales The $1 A Pound Barrier And Keeps Going – by Tim Treadgold (Forbes Magazine – July 8, 2014)

http://www.forbes.com/

Last week a 5% rise in the price of zinc over the previous two weeks was considered sufficiently newsworthy to earn a report into what seemed to be the start of a revival in a sector of the mining market known as base metals, which makes it hard to ignore the fact that zinc has just gone up by another 5%.

The latest rise takes zinc, which is largely used to galvanize (rust-proof) steel, over the $1 per pound mark to $1.03, its highest in three years.

Other base metals, including nickel and copper, are also performing strongly as global industrial production continues its slow recovery and mine development continues to suffer from a capital drought.

But, while many investors favor stories from the technology sector early-bird speculators playing the small end of the mining market are making a killing.

Thanks in part to heavy selling over the past three years which has trashed their share prices mineral exploration stocks have been consigned to the bargain basement, though it is getting hard to ignore stocks which double in a matter of days.

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Gold Shines Again as Hedge Funds Boost Wagers on Advance – by Marvin G. Perez (Bloomberg News – July 8, 2014)

http://www.bloomberg.com/

Gold is precious again. After investors sent bullion tumbling in 2013 by the most in three decades and kept dumping the metal earlier this year, demand is now up and prices are defying bearish forecasts. Money managers increased net-long positions for a fourth straight week through July 1 and holdings in exchange-traded products are climbing at the fastest pace since 2012.

“Gold’s performance has proven the bears wrong so far this year,” John Kinsey, who helps manage about C$1 billion ($935 million) at Caldwell Securities Ltd. in Toronto, said in a telephone interview yesterday. “We look for further strength through the balance of the year.”

While the latest government data point to an improved U.S. economy and Goldman Sachs Group Inc. and Societe Generale SA predict prices will retreat by year-end, inflation concerns and pockets of unrest are sending investors into gold as a haven. Prices extended gains after the Federal Reserve signaled earlier this month that it will keep interest rates near record lows and violence spread in Iraq and Ukraine.

The bulls are being rewarded. The value of the gold funds rose by $4.6 billion this year as prices rallied 9.5 percent. The metal has rebounded from last year’s 28 percent plunge that was triggered by muted inflation and as investors shunned the metal in favor of equities.

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SAMSSA: Sudbury lagging in business development – by Jonathan Migneault (Sudbury Northern Life – July 05, 2014)

http://www.northernlife.ca/

Sudbury is lagging behind other Northeastern Ontario cities when it comes to attracting new business in the mining supply and services sector, said the executive director of the Sudbury Area Mining Supply and Service Association.

Dick DeStefano said North Bay, in particular, has done more to attract small and medium sized mining businesses through tax incentives and new municipal industrial parks.

In a recent column, he challenged Sudbury’s municipal politicians – both current and upcoming – to develop a strategy to open the city for business. “What’s the political strategy to attract new business?” he asked.

North Bay, he said, reduced its industrial taxes by 66 per cent a few years ago, and eliminated its industrial development charges.

“I think it’s one of the tools we keep in our toolbox in terms of remaining competitive,” said Erin Richmond, North Bay’s manager of economic development. “We have to always think about different ways we can incent development.”

Last year, the City of North Bay took an extra step to encourage business development, and opened its new 600-acre Airport Industrial Business Park.

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Copper miners’ paths diverge over Indonesia export tax – by Michael Taylor and Allison Martell (Reuters India – July 8, 2014)

http://in.reuters.com/

JAKARTA/TORONTO – (Reuters) – Six months into a dispute with Indonesia’s government that has halted copper exports, two U.S. mining giants are using very different tactics in a bid to resume shipments – behind the scenes talks or raising the stakes with an arbitration claim.

Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp account for 97 percent of Indonesia’s copper production, exporting tens of thousands of tonnes of concentrate a month before a row over a new export tax halted shipments.

As the latest bid to broker a deal runs up against Indonesia’s presidential election, Freeport is pushing on with government-led talks, with chief executive Richard Adkerson in Jakarta again last week.

Newmont, however, has filed for international arbitration, pushing to uphold the letter of the law on its contract but drawing a rebuke from the government which has questioned its “good will” in talks.

“Freeport is using the carrot and I guess Newmont is using the stick,” said Chris Mancini, analyst at Gabelli Gold Fund. Gabelli Funds holds stakes in both companies.

In an effort to push miners to build domestic smelters and processing plants, Indonesia introduced new mining export rules in January.

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Amplats’ Griffith convinced of Rustenburg sale – by Allan Seccombe (Miningmx.com – July 8, 2014)

http://www.miningmx.com/

[miningmx.com] – THE longest mining strike in South Africa’s history has forced the country’s platinum producers to consider accelerating plans to move to smaller, more productive workforces.

According to them, there’s simply no other way of coping with a volatile, unpredictable labour environment, a business restraint which is compounded by the increasingly complicated market for their metals.

Anglo American Platinum (Amplats), the world’s largest primary producer of platinum, has been the most outspoken on its plans. After spending most of 2012/13 trying to restructure its Rustenburg assets, it is now in the throes of a company-changing review.

The outcome is largely expected to see it cast off the deep-level, labour-intensive mines where the sweetest parts of the orebody have been mined out.

“Amplats’ non-core Western Limb assets, Union, and some of its marginal Rustenburg shafts may well be divested by the group in time,” JP Morgan Cazenove’s Allan Cooke and Steve Shepherd said in a recent report.

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Australian nickel projects on sale – by Lawrence Williams (Mineweb.com – July 7, 2014)

http://www.mineweb.com/

Western Australian nickel assets owned by two of the world’s largest producers of the metal have been sold or are currently up for sale and attracting much interest.

LONDON (MINEWEB) – Australian nickel projects, presumably deemed non-core businesses, by mining majors BHP Billiton, and Norilsk Nickel are either reportedly up for sale, or sales have been agreed, which will see some of the country’s nickel production, or potential output move into the hands of new ownership. Australia was the world’s fourth largest nickel producer (after the Philippines, Indonesia and Russia) in 2012.

BHP Billiton, which had previously sold off its Ravensthorpe nickel mine and metallurgical plant to First Quantum back in December 2009 for $340 million – having cost over $2 billion to build – is now looking to sell the rest of its Western Australian nickel operations which come under its Nickel West banner, comprising the Mount Keith Nickel mine, Leinster Nickel mine, Kambalda Nickel concentrator, Kalgoorlie Nickel rmelter and Kwinana Nickel refinery.

There are reportedly six major potential suitors for the package, including Mick Davis’ X2 Resources. BHP inherited its nickel mining operations through the take-over of Western Mining in 2005.

Simultaneously, Norilsk Nickel the world’s largest nickel producer, has announced that through its Australian subsidiaries, MPI Nickel and Black Swan Nickel it has agreed to sell its Black Swan/Silver Swan assets, also located in Western Australia and currently under care and maintenance, to Poseidon Nickel. Norilsk had been reported as planning to sell all of its Australian assets back in May.

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Mining for the truth in Guatemala – by Melinda Maldonado (MACLEAN’S Magazine – July 8, 2014)

http://www.macleans.ca/

What lawsuits claiming rape and murder in a Guatemalan jungle mean for Canadian companies abroad

Rosa Elbira Coc Ich was warming tortillas when the men came. Their trucks rumbled down the dirt road toward her home, a shack she’d rebuilt in eastern Guatemala after a forced eviction 12 days earlier. It was Jan. 17, 2007, and as hundreds of police, military and private security workers returned, she heard their voices pierce the thick tropical brush as they called out for the leaders of the community.

Nine of the men pushed their way into her home.

“Where’s your husband?” a policeman asked, pressing a gun to her temple, according to documents filed as part of a lawsuit in an Ontario court. When she couldn’t answer, the officer said he was going to kill her. Then the men pushed her to the floor, ripped off her clothes and covered her mouth. Ich claims all nine of them raped her.

Nearby 10 other women from the Mayan Q’eqchi’ community say they experienced the same ordeal—gang rapes at the hands of police, military and private security from the Fenix nickel mine, 300 km northeast of Guatemala City—during evictions from the homes they’d built on the mine’s property.

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NEWS RELEASE: Cliffs Natural Resources Inc. Issues Open Letter to Shareholders

July 07, 2014

  • Casablanca’s Nominees, Including Proposed Executive Chairman Lourenco Goncalves, Lack Crucial Industry Experience Needed to Navigate Today’s Volatile Pricing Environment
  • Cliffs’ Nominees Have the Right Experience to Drive Long-term, Sustainable Growth and Shareholder Value
  • Recommends Shareholders Vote WHITE Proxy Card Today

CLEVELAND – July 7, 2014 – Cliffs Natural Resources Inc. (NYSE: CLF) today issued the following letter to shareholders in connection with its upcoming 2014 Annual Meeting of Shareholders scheduled to be held on July 29, 2014:
Dear Fellow Cliffs Shareholder,

Cliffs’ Annual Meeting of Shareholders is fast approaching and your vote is extremely important. Your Board of Directors is focused on driving value for all shareholders and continuing to position Cliffs for long-term, sustainable growth.

Your Board urges you to vote the enclosed WHITE proxy card “FOR” Cliffs’ nine highly qualified and experienced nominees: Gary B. Halverson, Barry J. Eldridge, Mark E. Gaumond, Susan M. Green, Janice K. Henry, Stephen M. Johnson, James F. Kirsch, Richard K. Riederer and Timothy W. Sullivan.

By using the WHITE proxy card and voting as recommended by your Board, you will help prevent Casablanca from electing a majority slate and breaking up your Company.

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Why gold looks set to lose its shine – by Scott Barlow (Globe and Mail – July 8, 2014)

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.

The price of gold, the value of the U.S. dollar and inflation are all closely tied, and this can make it difficult to figure out whether the current bullion price is high or low based on history.

The good news is that this problem can be solved by adjusting the gold price for inflation. The bad news is that once this is done, the future does not look bright for gold investors.

Monday’s closing gold spot price was $1,317.11 (U.S.) per ounce. To pick an example from history, the closing gold price for July 7, 1980, was $667.50. The nominal dollar difference is big, but that doesn’t mean much until we adjust for the difference in spending power of the U.S. dollar caused by rising prices.

Because of inflation, the spending power of one U.S. dollar has been more than halved since 1980. So just comparing the nominal price of gold then and now makes no sense. In effect, these are different currencies.

To assess whether gold is more or less expensive now, it is necessary to calculate an inflation-adjusted gold price using the same currency.

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U.S. Seen as Biggest Oil Producer After Overtaking Saudi Arabia – by Grant Smith (Bloomberg News – July 4, 2014)

http://www.bloomberg.com/

The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery, Bank of America Corp. said.

U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report today. The country became the world’s largest natural gas producer in 2010. The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids.

“The U.S. increase in supply is a very meaningful chunk of oil,” Francisco Blanch, the bank’s head of commodities research, said by phone from New York. “The shale boom is playing a key role in the U.S. recovery. If the U.S. didn’t have this energy supply, prices at the pump would be completely unaffordable.”

Oil extraction is soaring at shale formations in Texas and North Dakota as companies split rocks using high-pressure liquid, a process known as hydraulic fracturing, or fracking. The surge in supply combined with restrictions on exporting crude is curbing the price of West Texas Intermediate, America’s oil benchmark. The U.S., the world’s largest oil consumer, still imported an average of 7.5 million barrels a day of crude in April, according to the Department of Energy’s statistical arm.

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Environmental group uses poll to battle oil sands PR – by Shawn McCarthy (Globe and Mail – July 4, 2014)

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 – A Toronto-based environmental group is challenging the aggressive messaging from the federal government and industry on the economic benefits of the oil sands with the release of a poll that suggests Canadians are ill-informed about the impact of the sector.

In a survey released Friday, Environmental Defence said 57 per cent of respondents overestimated the contribution of the oil sands to the national economy. According to Statistics Canada, oil sands production accounts for 2 per cent of the country’s gross domestic product, but more than 40 per cent of respondents pegged the figure at 12 per cent of GDP or higher.

The environmental group focused on the value of production from existing oil sands projects, but it did not account for current growth and new jobs that result from the construction of new projects or the pipelines and other infrastructure needed to get higher volumes of crude to market.

Prime Minister Stephen Harper and his ministers have routinely characterized the oil sands specifically – the the resource sector generally – as the engine of economic growth for Canada, and warn against any action that would slow down development.

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