International Media Resource Articles – Page 620

The good, bad and ugly: China’s economic rebalancing and commodity demand – by Prinesha Naidoo (Mineweb.com – October 9, 2015)

October 9, 2015

http://www.mineweb.com/

Not all commodities are equal. Some will bounce off and others will take a beating from China’s shift to consumption.

JOHANNESBURG – Fears of a significant slowdown in China’s economy, the second largest in the world, have whipped markets into a frenzy this year. As global equity markets opened on August 23, one by one and region by region, key indices flashed red.

This, as the after-effects of China’s Black Monday – in which the country’s benchmark Shanghai Composite Index extended its losses to post its steepest one-day decline of 8.5% since the 2007 financial crisis – was ripping through world markets and prompting historic single-day sell-offs across the board.

Since then, continued volatility in Chinese markets, tempered somewhat by state intervention, which Goldman Sachs values at $236 billion over three months, has left investors across the globe uneasy.

Last year, the country’s economic growth slowed to 7.4%, its lowest level in more than 20 years. The extent to which the economy will slow this year remains a mystery –

Lithium Market Set To Explode – All Eyes Are On Nevada – by James Stafford (Oil Price – October 6, 2015)

May 13, 2016October 9, 2015

http://oilprice.com/

While other commodities are floundering or completely collapsing in this market, lithium—the critical mineral in the emerging battery gigafactory war—is poised to explode, and going forward Nevada is emerging as the front line in this pending American lithium boom.

Most of the world’s lithium comes from Argentina, Chile, Bolivia, Australia and China, but American resources being developed by new entrants into this market have set up the state of Nevada to become the key venue and proving ground for game-changing trade in this everyday mineral. Nevada is about to get a boost first from Tesla’s (NASDAQ:TSLA) upcoming battery gigafactory, and then from all of its rivals.

For several years, experts have been predicting a lithium revolution, and while investors were being coy at first, the reality of the battery gigafactories is now clear, and nothing has hit this home more poignantly than Tesla’s recent supply agreements with lithium providers who will be the first beneficiaries of this boom, followed by a second round of lithium brine developers that are climbing quickly to the forefront.

As Jeb Handwerger—founder of Gold Stock Trades—recently told the Resource Investor: “This is just the beginning. We’re in the early stages of a revolution in powering transportation and homes.

Glencore Cutbacks Shift to Zinc in Metal Rout – by Rhiannon Hoyle (Wall Street Journal – October 8, 2015)

October 9, 2015

http://www.wsj.com/

The commodities giant will close two mines and cut up to 1,600 jobs globally as zinc prices slump

SYDNEY—Commodities trader Glencore PLC, which has faced intense pressure from investors over its debt pile, said it would cut global zinc production by a third after a collapse in prices of the industrial metal.

The Switzerland-headquartered commodities group said it would cut annual zinc production by roughly a third, or 500,000 metric tons, including closing its Lady Loretta mine in Australia and Iscaycruz mine in Peru. The changes will also reduce its annual output of lead, also produced at those mines, by about 100,000 tons, it said.

Shares in Glencore, the world’s biggest miner of the industrial metal, rose more than 6% in response to the move.

They are the latest in a string of mine closures for Glencore, from coal to platinum deposits, as sliding commodity prices make it harder for the resources giant to turn a profit. It comes at a time when the company has been under scrutiny by investors, concerned that falling raw-material prices could strain the mining and commodity-trading group’s finances. Glencore has already raised equity and suspended its dividend to help fireproof its balance sheet.

BHP Billiton exec talks up Nickel West prospects – by Barry Fitzgerald (The Australian – October 9, 2015)

October 9, 2015

http://www.theaustralian.com.au/

BHP Billiton has served up a surprise by talking up the prospects of its Nickel West division in the face of depressed prices for the stainless steel ingredient.

Nickel West is the price-challenged division BHP withdrew from sale last year after failing to attract reasonable offers, and it is the division that was not good enough to be included with the other non-core assets spun off by BHP into South32 earlier this year.

Because Nickel West was seen internally as doubly non-core to BHP, it was to be run for cash and would not receive new investment, raising fears that the once proud business — spawned during the Poseidon nickel boom and a cornerstone of BHP’s 2005 acquisition, WMC — would be left to wither on the vine.

But at the Australian Nickel conference in Perth, Nickel West’s new asset president, Eddy Haegel, said there was a now sense of “nervous excitement’’ in the division. He said Nickel West had embarked on a journey to reinvent itself by adopting a junior miner mindset, while remaining inside the world’s biggest mining company.

Bank of England checks commodity exposures of financial institutions – by Neil Hume, Martin Arnold and David Sheppard (Financial Times – October 8, 2015)

October 9, 2015

http://www.ft.com/

The Bank of England has asked British financial institutions to reveal their full exposure to commodity traders and falling prices of raw materials amid concerns over the impact of the oil and metals slump.

The Bank of England’s Prudential Regulation Authority, which was set up in 2012 to ensure the “safety and soundness” of banks in the wake of the financial crisis, sent the requests to the UK’s big banks in the past week, according to three people with direct knowledge of the matter.

The PRA move that mirrors similar inquiries it made earlier this year about the banks’ exposure to Greece and to China, was prompted by a sharp drop in the shares of Glencore, the biggest publicly listed trading-house-cum-miner at the start of last week.

It was not provoked by any immediate concerns of a default, a person familiar with the matter said, but it was checking that banks knew what their exposures were to individual commodity houses and that they had examined the wider knock-on effects if a large commodity trader was to collapse.

[Alaska] Polls show concern over transboundary mining, desire for action – by (Juneau Empire – October 9, 2015)

October 9, 2015

http://juneauempire.com/

Salmon Beyond Borders and SkeenaWild, groups from Alaska and British Columbia that have opposed mining in BC and Alaska’s transboundary river watersheds, recently received the results of two polls they say show a clear desire for action on both sides of the border.

The two polls, one in Alaska and one in B.C., were commissioned by the groups and conducted by Greenberg Quinlan Rosner Research. Some highlights from a press release include:

• Nearly three-quarters of Alaska respondents expressed concern about a mining waste spill in B.C. affecting shared watersheds that drain into Alaska, with the number jumping to 86 percent for Southeast Alaska respondents.

• Seventy-six percent of Alaska respondents want Alaska to have a seat at an international table to address concerns about upstream B.C. mining in shared transboundary watersheds. Forty-five percent said their vote for a member of Congress hinges on elected officials pushing for this seat at the table.

Russia prepares for large-scale rare earth metals production – by Eugene Gerden (Investorintel.com – October 8, 2015)

October 9, 2015

http://investorintel.com/

The government of Russia’s Murmansk region, a region, located in the northwestern part of Russia, has started a search of an investor for the development of the local Afrikandovsky field of rare-earth metals, according to Alexei Tyukavin, first deputy-governor of the region.

According to Murmansk regional government, successfull development of the field will allow to establish a full-scale production of titanium dioxide, as well as rare-earth metals.

Estimated volume of investments in the project is 8 billion rubles (US$200 million). Ore reserves of the field will ensure continous operation of a mine and processing complex, that will be built later during the next 100 years.

The tender is expected to be completed by the end October of the current year. The license for an investor will be granted for 25 years. In addition to rare earth metals, titanium, iron, tantalum, niobium and other metals.

The Russian government puts big hopes on the implementation of the project, considering the Murmansk region as a new center of Russia’s rare-earth metals production.

Analysts say major U.S. banks on hook to Glencore – by Kate Kelly (CNBC.com – October 7, 2015)

October 8, 2015

http://www.cnbc.com/

A new report estimates that Bank of America, Citigroup, JPMorgan Chase, and Morgan Stanley have lent $350 million apiece to the troubled commodity giant Glencore PLC — meaning they will be on the hook for potential losses if things deteriorate at the trading and mining company.

In a note issued late Wednesday afternoon, analysts at CreditSights used accountings of bank loans prepared by the data firm Dealogic to estimate who had lent what to Glencore as part of its $15.3 billion revolving credit facility.

The analysts deduced that “North American banks accounted for 20 percent” of the revolver, according to the note, with four major U.S. banks taking the lead and four Canadian banks in similar positions. Goldman Sachs and Wells Fargo were notably absent.

Of the 60 or so lenders reportedly part of the revolving credit facility, which is broken up in to a one-year and a five-year tranche, about 34 banks are in lead positions, said someone familiar with the credit structure, with equal dollar exposure to Glencore.

Glencore’s pursuit of Rio Tinto has come full circle – by Peter Kerr (Sydney Morning Herald – October 8, 2015)

October 8, 2015

http://www.smh.com.au/

It was supposed to be the year that advanced Ivan Glasenberg’s plans for global domination of the commodities sector.

But the year since Rio Tinto rebuffed merger overtures from Glasenberg’s Glencore, which was marked on Thursday, has become the South African entrepreneur’s annus horribilis.

Not only did the merger, seen by some as inevitable and by others as unlikely, not come to fruition, but the process prompted the market to compare the two companies thoroughly. That comparison has not flattered Glencore.

The merger approach came amid the peak of the iron ore crisis – prices had fallen by 44 per cent in 12 months, and Glasenberg had whipped up a debate about both Rio Tinto’s reliance on the bulk commodity and its controversial strategy of continuing to expand exports into weak markets.

Glasenberg, on the other hand, portrayed himself as the commodities guru with the better-placed, more-diversified portfolio that had an oil hedge and exposure to the base metals that most predicted would shine in 2015.

Aluminum premium bubble over? Just don’t tell the LME – by Andy Home (Reuters U.S. – October 7, 2015)

October 8, 2015

http://www.reuters.com/

LONDON – So is the aluminum premium bubble well and truly over? It certainly feels that way.

Japanese buyers have just secured a premium of $90 per metric tons over London Metal Exchange (LME) cash metal for their fourth-quarter shipments.

As recently as the first quarter of this year, Japanese premiums were at a record high of $425 per metric tons (468 tons).

Moreover, these Q4 2015 premiums are the lowest since the third quarter of 2009, marking a return to historical norms.

The scale of the collapse in Japanese premiums is partly down to specific local drivers but even that statement reflects a return to normality, where physical premiums don’t move in global lock-step but rather mirror regional supply-demand dynamics.

U.S. and European premiums are higher at around $155 and $120 per metric tons respectively but have fallen a long, long way since the start of this year.

Mining operator convicted of 2 misdemeanors for polluting Southwest Alaska river – by Jerzy Shedlock (Alaska Dispatch News – October 7, 2015)

October 8, 2015

http://www.adn.com/

A Southwest Alaska mine operator from Canada was convicted of two misdemeanor violations of the federal Clean Water Act on Wednesday in Anchorage for allowing muddy water to seep into a salmon stream over the course of two mining seasons.

The government charged James Slade — a mining consultant from Calgary, Alberta, who became chief operating officer for XS Platinum Inc. in 2010 — with six felonies. The charges included conspiracy, various violations of the Clean Water Act and submission of a false report.

Jurors could have found that Slade violated the regulations knowingly or negligently. They decided Slade’s actions were irresponsible but could not reach a unanimous decision about whether he knew he was breaking the law on two of the charges. What could have been felony convictions were instead found to be misdemeanors.

The jury deliberated for two days, finding Slade not guilty of half of his alleged crimes. The government will decide next week whether or not to retry Slade for three charges on which jurors were deadlocked, said First Assistant U.S. Attorney Kevin Feldis.

Copper’s outlook may be rosier than you thought – by Andy Home (Reuters U.S. – October 7, 2015)

October 8, 2015

http://www.reuters.com/

German copper producer Aurubis has just rung the bell on the start of the “mating season”, the annual negotiation of term contracts for shipments in the following year.

It has announced it will be reducing its copper cathode premium from $110 per tonne over LME cash metal this year to $92 next year.

Aurubis’ preemptive move will raise expectations of a similar-sized reduction in the annual premium from Chile’s Codelco, the world’s largest producer. Its European premium has been higher than that of Aurubis in both 2014 and 2015 at $112 per tonne.

The case for cutting copper premiums seems obvious. Everyone’s worried about the state of demand, particularly in China, which accounts for around 45 percent of global copper usage.

The price itself looks wobbly. Currently trading around $5,250 per tonne, basis LME three-month metal, it is already down by around 16 percent so far this year with plenty of bears calling for lower prices still.

Gold Grade is King at Kirkland Lake – by Lawrie Williams (Lawrieongold.com – October 8, 2015)

October 8, 2015

http://lawrieongold.com/

In general gold mining and exploration juniors have been having a horrendous three or four years since the gold price started its decline from its peak at the end of Q3 2011, but high grade, profitable operations like Kirkland Lake Gold (TSX: KGI) have tended to buck the overall trend – and here it is indeed the gold grade which is the key.

In short, Kirkland Lake gold is one of the highest grade operating gold mines in Canada – or indeed in the world. And it is being very successful in maintaining mill grade at very close to reserve grade – achieved by current management under George Ogilvie, former CEO of Rambler Metals and Mining, in not chasing tonnage, but rather putting the emphasis on grades to the mill.

It is thus running well under mill throughput capacity of over 2,000 tonnes a day, but generating excellent returns as a result – and leaves it with scope for expansion from existing operations, let alone from the excellent exploration potential across its land holdings. LawrieOnGold interviewed Ogilvie yesterday in London and these are the impressions gained.

Nickel to rise above $20,000/tonne by 2017 – Alto Capital (Mineweb.com – October 8, 2015)

October 8, 2015

http://www.mineweb.com/

A longer-term perspective supports price appreciation.

A bullish outlook that will see nickel climb out of its current price slump and double in value to in excess of US$20,000 a tonne before March 2017, has been forecast today by market observer, Alto Capital.

Addressing the Paydirt 2015 Australian Nickel Conference in Perth today, Alto Capital research analyst, Mr Carey Smith, said that while the sector was under substantial cost and price pain, nonetheless the trend factors and outlook were far more substantial than they appeared.

“The nickel market has been dismal due to a recipe of stockpiles are up, production is up and demand is down,” Mr Smith said.

“However, going forward, stockpiled Indonesian high grade laterite nickel in China has all been consumed, China Nickel Pig Iron (NPI) production is in decline, global nickel supply is decreasing with only Independence Group’s Nova Bollinger project on the horizon and most producers/miners are losing money – so they will minimise their operations and/or get out of the game,” he said.

Obama’s ozone rules won’t prove to be platinum’s saviour – by Prinesha Naidoo (Mineweb.com – October 7, 2015)

October 7, 2015

http://www.mineweb.com/

The precious metal’s future remains in the hands of consumers.

JOHANNESBURG – The Obama administration’s move to decrease smog pollution in the United States (US) by tightening federal ozone standards is unlikely to have a material impact on the platinum market.

Citing “extensive scientific evidence” on the effects of ground-level ozone pollution or smog on public health and welfare, the country’s Environmental Protection Agency (EPA) has reduced the amount of ground-level ozone to 70 parts per billion (ppb) from the 75ppb limit set by the Bush administration in 2008.

Under the new rules, the EPA will give states until 2017 to collate air quality data and devise plans to meet the limits by 2025. However, some areas, depending on the severity of their smog pollution, will have until 2037 to meet the standards.

In anticipation of tighter ozone regulations, the non-profit International Precious Metals Institute (IPMI) ran a public policy advertisement in a Washington newspaper, stating “precious metals help turn dangerous ozone into harmless oxygen” and “platinum group metals provide the critical spark that makes catalytic converters work to reduce smog and harmful emissions.”