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[KGHM] Poland studies energy sector mergers, copper concerns (Reuters U.S. – January 11, 2016)

http://www.reuters.com/

WARSAW – Poland surprised the markets on Monday with plans to merge its biggest oil and gas firms to forge central Europe’s No.1 energy company and prevent any hostile takeover threat.

Treasury minister Dawid Jackiewicz is considering tie-ups between the state-run oil refiners PKN Orlen PKN.WA and Lotos LTSP.WA, and gas firm PGNiG PGN.WA, with the analysis to be ready by the end of this quarter.

Put together their joint market value would stand at 60 billion zlotys ($15 billion), almost twice as much as Austria’s OMV (OMVV.VI) and three times the market cap of Hungary’s MOL MOLB.BU.

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KGHM seeks global status amid commodities downturn – by Henry Foy (Financial Times – December 30, 2015)

http://www.ft.com/

Lubin – A kilometre below the rolling countryside of south-west Poland, scores of men labour in hot, cramped tunnels mining copper that has made KGHM Europe’s second-largest producer of the red metal.

Yet the future of the Polish miner lies halfway around the world, in the rocky hills of Ontario, Canada, and the Atacama Desert of northern Chile.

There, the success of two big investments will determine whether KGHM becomes Poland’s first truly global company, or an overambitious regional player that failed to achieve international status.

The state-controlled group has already spent more than $7bn on acquiring and developing the Canadian and Chilean mines, assets that give it control of the world’s fourth-largest copper deposits.

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The Final Lump of Coal in Britain’s Stocking – by Steffan Morgan (Foreign Policy – December 23, 2015)

http://foreignpolicy.com/

Within a few years, there will be no visible reminder that coal was once dug out of the ground at the Kellingley Colliery.

As it has gone with so many other towns in Britain — Creswell in Derbyshire, Rhodesia in Nottinghamshire, Mardy in South Wales — so it will go with Beal, in North Yorkshire, the town where Kellingley was located. Today, these are small towns and villages — some with only one street, one pub, and one shop — but once they were places of international importance, whose coal powered the Industrial Revolution, drove the steam trains on Victorian railways, and fueled the ships that fought World Wars I and II.

The coal industry — a business that once defined Britain — ended in any meaningful sense with the closure of Kellingley, the last deep pit mine in the United Kingdom, on Dec. 18, though, realistically, the industry has been on life support since 1990. When the workers at Kellingley finished their final shift, surrounded by members of the media, it was with feelings of dejection and anger, but also with a calm resilience.

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 Kellingley Colliery: Miners Weep After Working Final Shift At Britain’s Last Remaining Deep Coal Mine – by Aubrey Allegretti (Huffington Post UK – December 18, 2015)

http://www.huffingtonpost.co.uk/

Coal mining in Britain fuelled the industrial revolution, provided millions of jobs after the Second World War and defined Maggie Thatcher’s premiership. This morning, it ended with a cup of tea and a polite “salute” to the men whose way of life vanished forever.

Kellingley Colliery, the last underground coal mine which has served countless communities in North Yorkshire since 1965, wound down operations on Friday, with workers offering stories of careers there that spanned decades.

The 450 miners who work at the pit – known locally as the Big K – will receive severance packages at 12 weeks of average pay.

A group of them posed for photos, donning worn orange overalls and hard-hats, proudly cheering on their industry in front of a Union Jack Flag, their photographer calling for mugs of tea to be raised in honour of their legacy.

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Boliden, Lundin Said to Weigh Final Bids for First Quantum Mine – by Dinesh Nair and Brett Foley (Bloomberg News – December 17, 2015)

http://www.bloomberg.com/

Boliden AB and Lundin Mining Corp. are among companies considering final bids for First Quantum Minerals Ltd.’s Kevitsa mine as the Canadian explorer looks for ways to cut debt, people with knowledge of the matter said.

Kevitsa, one of the largest nickel reserves in Finland, may fetch at least $1 billion in a sale, the people said, asking not to be identified as the negotiations are private. First Quantum expects to receive final bids by early next year, one of the people said.

Mining companies globally are slashing costs and selling assets to counter a drop in commodity prices. First Quantum said in October that it plans to reduce debt by $1 billion through measures such as asset sales, as well as job and capital-spending cuts.

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A Belarus Wildcard Is Shaking Up the Global Market for Potash – by Alistair MacDonald and Vibhuti Agarwal (Wall Street Journal – December 14, 2015)

http://www.wsj.com/

SOLIGORSK, BELARUS—In the massive Soligorsk mine, workers 2,000 feet below ground are drilling at seams of pinkish rock and rattling a $20 billion commodity market.

That pink rock is potash. The mine’s operator is a state-owned producer that has been outcompeting rival suppliers of the crucial fertilizer in a business that many who follow it say was long shaped by cartels.

JSC Belaruskali’s output was once constrained by its membership in one of those groupings. But when it broke up two years ago, Belaruskali ramped up production and pushed into new markets. It now fills almost 17% of global potash demand and has become a major wild card for analysts and rivals alike.

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End of an Era: England Closes its Last Deep-Pit Coal Mine – by Scott Patterson (Wall Street Journal – December 11, 2015)

http://www.wsj.com/

KNOTTINGLEY, England—The last deep-pit coal mine in the U.K. plans to shut its doors here next week, heralding the end of a centuries-old industry that helped fuel the industrial revolution and build the British Empire.

The shutdown, targeted for next Friday, represents a victory for advocates of reducing carbon emissions after world leaders gathered in Paris to discuss how to combat global warming, with coal in the cross hairs. It also reflects a glut of energy on world markets, from crude oil to natural gas and coal itself.

Coal mines have been closing around the world in the past year, from the U.S. to South Africa to the U.K. as prices plunged. But in no country has the industry witnessed such a dramatic fall from grace as in the U.K., where coal production was once seen as the backbone of the nation’s industrial economy, the fuel for everything from steamboats to power plants.

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As World Debates Climate, Czechs Embrace Heavy Pollutant (Associated Press/New York Times – December 7, 2015)

http://www.nytimes.com/

CSA MINE, Czech Republic — While world leaders try to reach a deal to limit climate change, one of the most polluting fossil fuels, brown coal, is enjoying a revival in the Czech Republic, where entire villages are threatened by new plans for mining.

The Czech Republic is one of a group of countries that is turning to coal, a cheap but dirty energy source, as its economy slows. Neighboring Poland, which has big deposits, is doing so, as is China, the world’s biggest energy consumer.

The Czech variety of the coal, called brown coal or lignite, is a particularly bad source of greenhouse gases and pollutants.

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Kellingley colliery: The pit that survived Margaret Thatcher prepares for closure – by Dean Kirby (Independent – December 6, 2015)

http://www.independent.co.uk/

The North Yorkshire colliery, Britain’s last deep coal mine, will close on 18 December

The miners look almost otherworldly as they burst from the cage that has carried them from deep under ground – their white eyes shining from faces black with coal dust.

The 40 men are shouting and swearing and appear euphoric at being back in the daylight after eight hours working nearly seven miles from the surface in the dark.

But their only welcome, as they march quickly into the lamp room and remove their lanterns and turn into a cavernous changing room to scrub themselves human again, is a grey December fog that has fallen on the world outside like a shroud.

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Europe’s Coal Curtain Is Complicating the Climate Fight – by Ladka Mortkowitz Bauerova (Bloomberg News – November 30, 2015)

http://www.bloomberg.com/

At the Bilina mine 50 miles north of Prague, excavators the size of 10-story buildings claw at the earth and scoop out 2,700 tons of brown coal a day to feed the smoke-belching power station on the horizon. After the Czech government relaxed environmental regulations this fall, they’ll be able to keep going for another 40 years.

Some 130 miles away, in eastern Germany, Vattenfall AB’s Jaenschwalde coal pit is preparing to scale back production as the country shifts away from coal and the oldest units of the adjacent power station are scheduled to shut down by 2019.

The two mines highlight Europe’s growing divide on cutting greenhouse gases as global leaders descend on Paris for the biggest climate conference in history.

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An Interview with Sir Mick Davis – by by Adam Treger (Tregernomics.com – November 23, 2015)

http://www.tregernomics.com/

Mick Davis was the CEO of mining company Xstrata, which merged with Glencore in 2013. He is now CEO of a new company, X2 Resources. For services to Holocaust Commemoration and Education, he was knighted as part of 2015 Queen’s Birthday Honours.

Q: Which emerging markets are you most optimistic about?

A: Well, I think emerging markets are generally not in great shape, for a whole range of reasons. This is partly because they are experiencing a decline of their large export markets, as world growth has not been stellar.

Clearly the most dominant emerging market, China, is going through a very important structural adjustment that is impacting its growth rates and is compounded by the anti-corruption drive, which I think is stultifying economic activity in that country.

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End of Russian palladium exports may result in world market shortage – by Eugene Gerden (InvestorIntel.com – November 18, 2015)

http://investorintel.com/

Russia may significantly reduce exports of strategic rare earth elements to foreign markets during the next several years, despite the recently announced state plans for a significant expansion of their domestic production.

It is planned that at the initial stage such restrictions will apply to palladium, huge reserves of which were accumulated by the country during the Soviet era, which allowed Russia to become one of its world’s largest exporters of the metal in recent years.

In recent years exports of palladium from the reserves of Russian State Precious Metals and Gems Repository (Gokhran) has been varied in the range of 14-15 tonnes, however there is possibility that they might be completely stopped already starting from 2016.

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UPDATE 1- Falling copper forces Poland’s KGHM to scale back – by Adrian Krajewski (Reuters U.S. – November 13, 2015)

http://www.reuters.com/

Nov 13 Europe’s No. 2 copper producer, Poland’s KGHM, cut 2015 production targets for its main overseas mine and flagged lower spending as well as mining asset write-downs on Friday, as copper prices hit a six-year low.

“The situation on the commodity market is getting worse and there are reasons to presume the possibility of testing our mining assets for value loss,” KGHM’s Chief Financial Officer Jaroslaw Romanowski said.

“We see 2016 as a turnaround year, but we presume that this crisis may continue into next year,” he added. “Our capital expenditures will surely go down or be postponed.”

Worries over growth in China, which consumes half of global copper production, have pushed copper prices below $5,000 a tonne, seen as a stress-test level for KGHM.

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The melting Arctic is like ‘discovering a new Africa’ – by Leslie Shaffer (CNBC – November 12, 2015)

http://www.cnbc.com/

Governments and the private sector are positioning to develop the Arctic, where the wealth of resources is akin to a “new Africa,” according to Iceland’s president.

The melting of the Arctic is an ongoing phenomenon: In October, about 7.7 million square kilometers (about 3 million square miles) of Arctic sea ice remained, around 1.2 million square kilometers less than the average from 1981-2010, according to calculations by Arctic Sea Ice News & Analysis that was published by researchers at the National Snow and Ice Data Center.

One effect of the melting ice has been newly opened sea passages and fresh access to resources.

“Until 20 or so years ago, (the Arctic) was completely unknown and unmarked territory,” Iceland’s President Olafur Grimsson told an Arctic Circle Forum in Singapore on Thursday. “It is as if Africa suddenly appeared on our radar screen.”

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[Jacob Fugger] Banking history: Goldenballs (The Economist – August 1, 2015)

http://www.economist.com/

Not for nothing was Jacob Fugger known as “Jacob the Rich”

ALBRECHT DÜRER’S portrait of Jacob Fugger shows a man with thin lips and unforgiving eyes. He wears a fine fur tippet about his shoulders and a brown cap; for the time, his dress is strikingly plain. Greg Steinmetz, formerly a journalist with the Wall Street Journal and now a securities analyst in New York, declares that he was the most influential businessman who ever lived. He makes a better case for this extravagant claim than for his assertion that Fugger was also the richest man in history.

A late-medieval banker from Augsburg in southern Germany, Fugger has never been as celebrated as Cosimo de Medici and his Florentine sons and cousins, whose reputation as bankers was burnished by their excellent taste in Renaissance art.

But Fugger was the better banker. Were he alive today, he would have cut a swathe through Wall Street and the City, and yet his remarkable history is still little known. Mr Steinmetz’s prose does not always sparkle and some arcane details of banking history are fuzzy, but the tale of Fugger’s aspiration, ruthlessness and greed is riveting.

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