International Media Resource Articles – Page 624

Gold Falls on Janet Yellen Speech, Palladium Gains on Emissions Scandal – by Ese Erheriene and Christian Berthelsen (Wall Street Journal – September 25, 2015)

September 25, 2015

http://www.wsj.com/

Looking ahead, seasonal demand from China is seen lifting the price of gold

Gold edged lower Friday after U.S. growth estimates were nudged higher and Federal Reserve Chairwoman Janet Yellen said a rise in U.S. interest rates is likely to happen later this year.

The tandem developments sent signals of an improving U.S. economy, and stocks and the dollar rose. Gold, a defensive investment that people look to in times of turbulence, loses appeal under improving conditions. Gold futures for the most-actively traded December contract fell $6.70 or 0.6% to $1,147.10 an ounce on the Comex division of the New York Mercantile Exchange.

Ms. Yellen told an audience at the University of Massachusetts that a rate increase could happen before the end of the year. The FOMC has two more scheduled meetings left in 2015 to make its move, one in October and one in December.

As a result, “the dollar strengthened and some selling was noted in gold,” David Govett, head of precious metals trading at Marex Spectron, said in a note.

Coal prices turn off investors – by Amanda Saunders (Sydney Morning Herald – September 25, 2015)

September 25, 2015

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

First it was tobacco, then alcohol, gambling, then asbestos. Sugar might also be on the nose for investors. But right now it is hard to find a more loathed sector than coal.

Not only are the forces of environmentalists lining up against the commodity. But there seems to be no end in sight for depressed prices.

The gas industry turned rogue on their counterparts in coal a few months ago too, attacking the industry in a bid to position itself as a cleaner source of energy.

And in a fresh kick in the guts, news broke out from the United States on Friday that Chinese President Xi Jinping was preparing to announce a cap-and-trade scheme to curb emissions as part of a climate deal with the US, ahead of climate talks in Paris in December.

China is Australia’s biggest coal customer and as China and US face off in a climate change battle, the commodity is likely to be a victim.

Surveying the ‘golden’ landscape – by David Levenstein (Mineweb.com – September 25, 2015)

September 25, 2015

http://www.mineweb.com/

To see what this means for the ultimate store of wealth.

Gold prices retreated on Monday after a strong rebound last week after the US Federal Reserve announced that it will not be raising interest rates.

In what has become the most highly anticipated meeting of the Federal Open Market Committee (FOMC), the Fed announced that it was going to maintain its current policies, and left the policy rate at 0.125%. Yet, the accompanying statement and the economic projections came in more dovish than expected. The Fed showed concerns over the negative impacts of the recent global financial market volatility, as well as rapid slowdown in China and other emerging markets, on growth and inflation outlook.

In her press conference, Fed Chairwoman Janet Yellen made it clear that the U.S labour market is close to full employment, and that she’s reasonably confident that the inflation rate will drift back up to around 2% eventually.

While gold prices were given a boost on Thursday and Friday, after the Fed announced that it will not be raising interest rates, the U.S dollar tumbled but later staged a strong recovery towards the weekly close. However the greenback still closed the week as the second weakest major currency, after Euro. The dollar index dipped to as low as 94.06 last week but recovered to close at 94.86.

Copper comparison to iron ore neglects high-tech demand, OZ Minerals CEO Cole says – by Simon Evans(Sydney Morning Post – September 25, 2015)

September 25, 2015

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

Copper has been unfairly maligned by being lumped in with iron ore as the mining boom quickly evaporated, in what has been characterised too simply as a global resources rout, OZ Minerals chief executive Andrew Cole says.

Copper was a commodity of the future, which benefited from rising demand in electronics, electric cars, battery storage and industrial machinery, whereas iron ore was almost entirely dependent on Chinese demand, Mr Cole said.

“China drives iron ore and the correlation is almost one to one,” he said. But the sheer diversity of different uses for copper and the number of countries around the globe seeking it to drive hi-tech advances wasn’t being factored in by investors, he said.

“The more electric cars that are made, the higher the demand for copper.” Copper’s strong underlying fundamentals weren’t being reflected in the share prices of copper miners like the $1 billion, Adelaide-based OZ, he said.

BHP Billiton in climate caucus as China joins carbon war – by Matthew Stevens (Australian Financial Review – September 25, 2015)

September 25, 2015

http://www.afr.com/business/

BHP Billiton’s membership of a new coalition of high powered commerce with the lofty aim of assisting the transformation of emerging nations into low carbon economies says much about the gathering pressures of climate change on those who make money in the fossil fuel cycle and just as much about the Global Australian’s radically changed view of its place in the world.

BHP was formally invited to become a foundation member of an “energy transitions commission” in a letter to chief executive Andrew Mackenzie penned by Royal Dutch Shell boss Ben van Beurden.

The Shell initiative, which will be formally announced in Houston on Monday, has been made all the more timely by China’s confirmation that it is contemplating the imminent introduction of a cap-and-trade carbon trading scheme and of stricter limits on the level of public funding for “high carbon projects”.

This is patently a deeply worrying development for big coal. China’s economic development is powered by electricity and that means it sits front and centre to any and all the optimism that the miners can muster about the medium and long-term outlook for coal.

Aluminum Isn’t the Answer – by Adam Minter (Blomberg View – September 25, 2015)

September 25, 2015

http://www.bloombergview.com/

Some of the world’s top manufacturers have seized upon a simple way to reduce the carbon footprint of their products: Use more aluminum. Ford is now cladding its best-selling F-150 pickup in the lightweight metal to achieve better fuel efficiency; Apple is going a step further and switching to aluminum produced using – among other means – low-carbon hydropower.

Several big aluminum manufacturers are discussing a “green” aluminum certification to encourage such low-carbon manufacturing and charge a premium for it, according to Bloomberg News.

All this is laudable, of course. But it ignores something important. The true test of how “green” a product is can only be decided once it completes its life cycle and the materials used to produce it are recycled or thrown away. Unfortunately, the focus on the front end often obscures what happens to these trucks, mobile phones and even beer cans over the long run.

Apple offers a textbook case. The most interesting feature of its new iPhone 6s isn’t the better selfie camera, 3D touch technology, or even the pink aluminum case. Rather, it’s the 15 percent reduction in greenhouse-gas emissions expected to be produced over the life cycle of the phone compared to the iPhone 6.

Francis: Mining industry in need of ‘a radical paradigm change’ – by Brian Roewe (National Catholic Reporter – July 17, 2015)

September 25, 2015

http://ncronline.org/

The global mining sector is called to “a radical paradigm change” to make improvements in how the industry impacts the planet and the poor, said Pope Francis ahead of a Vatican meeting on the topic.

The pope’s message was sent Friday to representatives from Africa, Asia and the Americas gathering at the Vatican this weekend to discuss their experiences living within mining communities.

“You come from difficult situations and in various ways you experience the repercussions of mining activities, whether they be conducted by large industrial companies, small enterprises or informal operators,” he said.

Francis described minerals as “a precious gift from God” that humanity has used for thousands of years and that are fundamental to many aspects of human life and activity. He then repeated an appeal from his environmental encyclical, “Laudato Si’: on Care for Our Common Home,” that people collaboratively work toward “countering the dramatic consequences of environmental degradation in the life of the poorest and the excluded.”

Alcoa completes $300 million expansion to boost aluminum output for auto industry – by Dave Flessner(Chattanooga Times Free Press – Septmeber 24, 2015)

September 25, 2015

http://www.timesfreepress.com/

Lightweight metals leader Alcoa announced today it has completed its $300 million expansion at its Tennessee facility dedicated to supplying aluminum sheet to the automotive industry.

The plant will provide aluminum sheet to automakers that include Ford Motor Company, Fiat Chrysler Automobiles and General Motors. The expansion is projected to add about 200 full-time jobs.

Tennessee Governor Bill Haslam and other state and local officials will celebrate the expansion with a ribbon cutting event this afternoon.

The project in Blount County, Tenn., which began customer shipments earlier this month, is Alcoa’s second major automotive expansion in North America backed by long-term customer contracts. The first, in Davenport, Iowa, reported record volume of automotive sheet shipments in the second quarter of 2015, up approximately 200 percent from the second quarter 2014.

“Automakers are demanding lighter, stronger materials that improve the performance of their vehicles and Alcoa is at the forefront of capturing that demand,” Alcoa CEO Klaus Kleinfeld said.

[Dubai] The New Diamond Capital – by Stian Overdahl (Bloomberg Businessweek – April 1, 2015)

September 25, 2015

http://www.businessweekme.com/

Dubai closes in on rival centres such as Mumbai and Antwerp

When India’s diamond manufacturing industry began to grow quickly in the 1960s, members of its family-run businesses had to travel to Antwerp, Belgium to buy the rough stones from diamond traders. Since the 15th century, Antwerp had been the centre of the diamond world, its Diamond Quarter bustling with buyers and sellers of rough and polished stones, conducting their trade among a host of cutting and polishing workshops.

With cheaper manpower than the traditional manufacturing centres of Antwerp and New York, and new machines that made the process easier, India’s cutting and polishing industry boomed. By cutting smaller stones that hadn’t been considered profitable previously, Indian manufacturers made greater returns.

Over time, Indian buyers moved higher up the ladder, able to buy directly from producers, rather than from wholesalers or dealers. Today, India dominates the manufacturing sector, responsible for more than 80 per cent of the world’s output of polished stones. But nowadays there’s less need for India’s diamantaires to make the long journey to Antwerp. Dubai—a new global hub for diamond trading—is only three hours away.

Tesla Battery Push Spurs ENRC Owner to Target Cobalt Mining – by Yuliya Fedorinova (Bloomberg News – September 24, 2015)

September 24, 2015

http://www.bloomberg.com/

Eurasian Resources Group S.a.r.l. plans to use a $2.2 billion project in the Democratic Republic of Congo to become the world’s top cobalt producer and tap growing demand for batteries from companies including Tesla Motors Inc.

ERG, which earlier this month agreed on $700 million of Chinese funding for the project, has started construction and aims to complete it within 20 months, according to Chief Executive Officer Benedikt Sobotka.

He sees the company becoming the largest cobalt producer when full capacity is reached. Chinese producers currently vie with each other for the top spot.

Cobalt prices should advance “significantly” in the next two years as demand for the metal used in rechargeable batteries increases, Sobotka said. The battery market is expanding as more consumers turn to electric and hybrid cars and look to store renewable energy to power appliances when there’s little wind or sunshine. Daimler AG and Tesla said they plan to sell batteries storing energy to homeowners and businesses.

Barrick’s cyanide spill five times larger – by Herald Staff (Buenos Aires Herald – September 24, 2015)

September 24, 2015

http://www.buenosairesherald.com/

Company’s own new figures show leak had been massively underestimated

The amount of cyanide solution that spilled from Barrick Gold’s Veladero mine in San Juan province is almost five times more than previously believed, the company acknowledged yesterday as a second federal prosecutor moved to investigate national and provincial officials and mining executives amid growing environmental concerns.

By Barrick’s own estimates, approximately 1,072 cubic metres (1.072 million litres) of cyanide solution made it into the Potrerillos River, due to a valve failure and a sluice gate being left open on September 12.

Previous upper estimates of the spill had been in the realm of 224,000 litres. The Canadian multinational chalked up the revised number to the pinpointing of the approximate time of the valve failure, believed to be around 8pm. The cyanide solution is used to leach gold from processed rocks, a common method for the extraction of gold from ore.

Despite the revised estimate, Barrick insists the spill will not lead to any health risks for area residents.

COLUMN-Coal isn’t amazing – how to lose the PR war, and why it may not matter – by Clyde Russell (Reuters U.K. – September 24, 2015)

September 24, 2015

http://uk.reuters.com/

(Reuters) – – Can the coal industry win a public relations battle, and does it even matter if it can’t?

There’s no shortage of people and organisations claiming that coal is increasingly embattled and is about to go the way of whale oil and wood as a fuel of the past.

Does this mean that the Minerals Council of Australia’s new, and seemingly costly, campaign in support of the fuel is simply raging against the inevitable, or does it herald a new front in the war between coal miners and anti-coal environmentalists?

There’s little doubt that coal has an image problem, increasingly so in developed countries where the fuel’s major contribution to climate change is well-publicised and understood by the majority of the public.

One of the top producers has even gone so far as to say coal is on the losing side, and not just because prices have dropped by almost two-thirds in the current four-year losing streak.

Potash Corp.’s K+S Bid Helped by Commodity Slide, Analysts Say – by Scott Deveau and Jack Kaskey (Bloomberg News – September 24, 2015)

September 24, 2015

http://www.bloomberg.com/

Potash Corp. of Saskatchewan’s 7.85 billion-euro ($8.77 billion) proposal to acquire its largest European competitor is more attractive after price declines in the Canadian company’s namesake crop nutrient, according to two analysts.

Potash Corp.’s cash offer made in June was rejected by K+S AG of Germany as too low. Since then, spot prices for potash in the U.S. have dropped 12 percent and there have been forecasts for further declines on the export market. On Monday, Mosaic Co., the largest U.S. producer, said it was cutting output and blamed weaker demand.

Share prices of potash miners have fallen accordingly. K+S is down 9.3 percent this month and closed at 30.22 euros in Frankfurt on Wednesday. That makes Potash Corp.’s 41-euros-a-share bid attractive, said Nils-Peter Gehrmann, an analyst with Hauck & Aufhauser, and Jeffrey Stafford at Morningstar Equity Research.

“While we’re certain management believes EUR 41 per share undervalues K+S, we think the offer considerably overvalues the company,” Chicago-based Stafford said in a note Tuesday. He said his fair value estimate for K+S is 24 euros a share.

Copper’s bust-boom-slump-boom cycle continues in region (Arizona Daily Star – September 24, 2015)

September 24, 2015

http://tucson.com/

The sometimes dizzying bust-boom-slump-boom history of copper is especially well-known in Arizona, a region that — combined with New Mexico and Sonora — is the world’s second-richest source of the metal after Chile.

This historical cycle is documented by Arizona Daily Star archives in the 2000s alone — much less the decades before that.

(With credit to former Star reporter Richard Ducote, current Star reporters Gabriela Rico and Tony Davis and Assistant Business Editor David Wichner, Bloomberg News and The Associated Press for the reporting excerpted here):

Oct. 23, 2001: Phoenix-based Phelps Dodge Corp. announces it will cut 1,400 jobs, trim copper production, and kill its stock dividend to deal with weak copper prices and a sliding economy. Copper price: 63 cents a pound.

Dec. 11, 2002: The long-awaited improvement in copper prices has not materialized. For the first three quarters of 2002, Tucson-based Asarco lost $38 million. In the same period of 2001, Asarco lost $81 million. Copper price: Just shy of 74 cents a pound. Prices would have to approach $1 a pound for happy days to return for Arizona producers.

Vale offers contrarian view of China steel output (Bloomberg/Sydney Morning Herald – September 24, 2015)

September 24, 2015

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

Vale reacted to claims steel consumption in China has peaked and, in a view that contrasts with a rising number of global banks, says demand in the top user still has some way to go.

“China’s steel consumption peak is still ahead of us but of course the growth will be much more gradual,” said Claudio Alves, Vale’s global director of ferrous marketing and sales. Vale aimed to boost its market share, he said.

The largest miners are seeking to figure out the implications of slowing growth on China’s demand for everything from iron to copper. While Vale’s view echoes outlooks from Rio Tinto and BHP Billiton, ANZ Bank brought forward its peak-steel estimate to 2014 from 2020 and Credit Suisse Group said local consumption will shrink 10 per cent by 2018. Citigroup warned on Tuesday commodities may see further losses amid excess supplies and a sluggish global economy.

“Despite the slowdown of the growth speed, China still remains the economic engine of the world,” Mr Alves said before the start of a conference in Qingdao. Further urbanisation and infrastructure projects will underpin demand for iron ore, steel, copper and other base metals, according to Alves.