October 28, 2014 – Republic of Mining

The not so great debate – Is gold manipulated or not? – by Bill Holter (Mineweb.com – October 28, 2014)

October 28, 2014

http://www.mineweb.com/

Holter expresses his disappointment with the quality of the debate on gold manipulation at the New Orleans Investment Conference.

NEW ORLEANS – I attended the New Orleans Investment Conference this past week as the guest of Gold Anti-Trust Action Committee’s (GATA) Bill Murphy and Chris Powell for which I am highly grateful. There were many good and thoughtful speakers. I specifically wanted to attend this conference for two reasons; Alan Greenspan (Mr. Magoo) was a keynote speaker and I not so much wanted to hear what he had to say but, more importantly, how he answered audience questions.

What piqued my interest most about this conference, though, was the proposed debate between GATA’s Powell and Doug Casey of Casey Research. The topic was: “Is gold manipulated or not?” I had such high expectations for this but unfortunately was left disappointed.

The format was not much of a debate; each speaker was allowed seven minutes to lay out their case followed by a four minute rebuttal period each. The problem was, they did not interact nor did they debunk the other’s position. The debate, if you can call it that, was one-sided where Powell laid out documentation and fact while Casey gave us his opinion.

Powell started off and was pretty much 100% factual as he laid out printed documentation from the Federal Reserve and the BIS which confirms central bank activity in the gold market.

Botswana, Africa’s diamond, risks losing its sparkle – by Tiisetso Motsoeneng and Joe Brock (Globe and Mail – October 27, 2014)

October 28, 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.

Reuters – When environmental scientist Bakang Bogopa graduated first in his class from the University of Botswana two years ago he did not expect that his first job would be moving furniture or that he would still be living off handouts from his mother.

Bogopa, who studied on a government scholarship, is among thousands of unemployed graduates in Botswana who exemplify both the country’s swift economic progress in the five decades since independence from Britain, and the challenges it now faces.

One of the world’s poorest countries in the 1970s, Botswana transformed into one of its fastest-growing economies by harnessing around $3-billion a year in diamond sales, to become the world’s biggest producer, and gained middle-income status.

The landlocked country of just two million has also been heralded as a beacon for African democracy, avoiding the conflict and corruption that has ravaged resource-rich countries across the continent.

But dependence on its wealth from the diamond industry is catching up with the southern African country.

Crude prices dive on Goldman Sachs forecast of $70 oil – by Shawn McCarthy, Carrie Tait and Jeffrey Jones (Globe and Mail – October 28, 2014)

October 28, 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 and CALGARY — Crude prices dove below $80 (U.S.) a barrel in trading Monday after Goldman Sachs Group Inc. released a grim forecast that argued prices have further to fall and won’t recover until some U.S. unconventional oil producers are squeezed out of the market.

The United States has been the world’s fastest growing crude producer thanks to the shale oil boom on North Dakota and Texas, but Goldman said the pace will slow as North American crude prices plunge as low as $70 a barrel by next spring. They forecast West Texas Intermediate will average $75 a barrel in the second half of 2015, and $80 in 2016.

“We are lowering our oil price forecast to reflect the required slowdown in U.S. production growth,” Goldman analysts wrote. They rejected any suggestion that top producers from the Organization of Petroleum Exporting Countries, led by Saudi Arabia, would come to the rescue of global producers.

“We believe that OPEC will no longer act as the first-mover swing producer and that U.S. shale oil output will be called upon to fill this role,” they said.

Cliffs Turnaround Plan Derailed by Iron Ore at 5-Year Low – by Sonja Elmquist (Bloomberg News – October 27, 2014)

October 28, 2014

http://www.bloomberg.com/

Other assets are being sold off quickly. The sale of a minority holding in a graphite
mining company was completed in August. Goncalves said he’s trying to sell a chromite
project in Canada’s Ring of Fire mining region “as soon as I can.”

Activist investor Casablanca Capital LLC’s plan to revive the fortunes of the largest iron ore producer in the U.S. is crumbling as the price of the commodity drops to a five-year low.

Casablanca went public in January with demands for Cliffs Natural Resources Inc. (CLF) to spin off or sell foreign mines and return more cash to investors. Casablanca won a proxy contest in July with the election of its slate of directors on the Cliffs board, one of whom was appointed chief executive officer.

With the iron ore market now in a worse state than it was at the start of the year, Cliffs may struggle to sell mines for a satisfactory price. Instead of raising its dividend, the Cleveland-based miner may have to eliminate the payout entirely, analysts at Citigroup Inc. and Nomura Holdings Inc. say.

A higher dividend “was something Casablanca promised before I joined,” Chairman and CEO Lourenco Goncalves said by phone in an Oct. 14 interview. “I’m not Casablanca.”

COLUMN-Why China blurs the global aluminium picture – by Andy Home (Reuters U.S. – October 27, 2014)

October 28, 2014

http://www.reuters.com/

Oct 27 (Reuters) – Is the world aluminium market in a supply-demand deficit or surplus? It’s a simple enough question but an extraordinarily difficult one to answer.

That much was clear at last week’s LME Seminar. Two respected bank analysts, Citi’s David Wilson and Natixis’ Nic Brown, offered diametrically different views.

Deficit, according to Brown, and one that will steadily increase over the next two years. Surplus, according to Wilson, with no sign of deficit until 2017 at the earliest.

Calculating supply-demand balances in any industrial metal is a tricky business, but the problems are compounded in aluminium.

There is, for example, no aluminium equivalent to the International Study Groups that do so much of the statistical leg-work in the copper, zinc, lead and nickel markets. The International Aluminium Institute (IAI) releases monthly production figures but only for primary metal, leaving the secondary scrap component of the supply chain shrouded in statistical darkness.

Ontario Premier Wynne’s China visit seeks to reduce U.S. reliance – by Adrian Morrow (Globe and Mail – October 25, 2014)

October 28, 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.

Mr. Fang suggested the two countries also work together on the Ring of Fire, a large
chromite deposit north of Thunder Bay. China could use the minerals, he said, if
Ontario can get the necessary rail line built to haul the ore out of the Ring’s
remote location.

TORONTO — Ontario Premier Kathleen Wynne will make a full-court press for trade in China next week as she seeks to expand her province’s sluggish economy and wean it off its long-standing dependence on the American market.

The trip unfolds against a backdrop of heightened tension in Sino-Canadian relations. Ottawa and Beijing have accused each other of espionage in recent months, while China continues to grapple with lingering pro-democracy protests in Hong Kong. And Ms. Wynne, who is making her first overseas trip as Premier, is pledging not to shy away from raising thorny human-rights issues during her visit.

“I absolutely support peoples’ right to freedom of speech and the right to gather peacefully. I’ve said that to Chinese representatives here, I will say that in China,” she said in an interview at her Queen’s Park office.

Cliffs books $5.9bn loss on iron-ore, coal asset write-downs – by Henry Lazenby (MiningWeekly.com – October 28, 2014)

October 28, 2014

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – US miner Cliffs Natural Resources reported a third-quarter net loss of $5.9-billion, or $38.49 a share, after booking a $5.7-billion write-down of its iron-ore and coal assets.

The Cleveland, Ohio-based company, who came under new management in July, following activist shareholder Casablanca Capital’s victory in a proxy contest, wrote down $4.5-billion related to the Bloom Lake iron-ore project, in Quebec, $28-million related to the shuttered Wabush iron-ore mine, in Labrador, $390-million related to its Asia Pacific Iron Ore (APIO) business segment and $539-million related to its North American Coal assets.

The company also booked a $254-million charge on its chromite assets, after indefinitely pulling out of Ontario’s Ring of Fire earlier this year.

Excluding the one-off charges, the company reported an adjusted profit of $33-million, or $0.21 a share, compared with an adjusted net income of $144-million, or $0.88 a share, in the same three-month period ended October 30 a year earlier.

Consolidated revenues of $1.3-billion were 16% lower year-on-year, mainly owing to iron-ore pricing sliding 32% in the past year, while metallurgical coal pricing declined 17%.

Innu want say in Plan Nord – by Geoffrey Vendeville (Montreal Gazette – October 26, 2014)

October 28, 2014

http://montrealgazette.com/

For Quebec’s Innu First Nations, the provincial government’s lucrative northern development plan represents a “golden opportunity,” under the right circumstances, said chief Gilbert Dominique.

“We’ve said it many times: We’re not against development. We just want it to be done in a way that is respectful of our way of life and the environment, and that there be economic benefits for First Nations,” he said.

The traditional territory of the province’s nine Innu bands covers one-third of the land slated for development under Quebec’s Plan Nord, Innu leaders said in a parliamentary commission Friday.

Seven Innu villages are located on the Côte-Nord, two on Lac-St-Jean and two more across the border in Labrador. Numbering about 16,000, the Innu are the second largest native group in Quebec.

Dominique said his community of Mashteuiatsh isn’t immune to the social ills that afflict other disadvantaged First Nations including higher levels of unemployment, addiction and violence. The Plan Nord may be a way to improve their situation and give younger generations more hope for the future, he said.

Mali eyes $9.5bn rail projects to unlock iron ore, bauxite deposits – by Tiemoko Diallo and Bate Felix (Reuters/The Africa Report – October 27, 2014)

October 28, 2014

http://www.theafricareport.com/

Bamako – Landlocked Mali aims to diversify its mining sector away from gold with Chinese-built rail projects worth $9.5 billion that would link it to the Atlantic coast, even as slowing Chinese growth and falling commodity prices cool investment.

The West African nation – the continent’s third-largest gold producer – said last month it had signed a string of investment deals with China totalling $11 billion, with most of this going to finance the rail deals.

Chinese authorities, however, have not confirmed the investment. Mali said $8 billion would finance a 900-km (560-mile) railway to Guinea’s port capital Conakry and $1.5 billion would renovate a rail link to Senegal’s capital Dakar, Mali’s main gateway port.

The improved transport links would attract investors to under-explored resources such as iron ore, bauxite and uranium that are bulkier and more costly to transport than gold. “The infrastructure will enable Mali to end its dependency on gold,” said Lassana Guindo, an adviser at the mines ministry.

President Ibrahim Boubacar Keita is striving to kick start Mali’s economy after a brief French-led war in early 2013 against northern Islamist rebels dragged it into recession.