International Media Resource Articles – Page 647

Let’s Be Honest About Gold: It’s a Pet Rock – by Jason Zweig (Wall Street Joural – July 17, 2015)

July 22, 2015

http://www.wsj.com/

Gold is supposed to be a haven amid hard times and soft money. So why, even as Greece has defaulted, the euro has sunk against the dollar, and the Chinese stock market has stumbled, has gold been sitting there like a pet rock?

Trading this week below $1,150 an ounce, the yellow metal has fallen more than 39% since it peaked at nearly $1,900 in August 2011. Since June 2014, investors have yanked $3 billion out of funds investing in precious metals, estimates Morningstar, the financial-research firm; total assets at precious-metal funds have shrunk 20% in 12 months.

“A lot of investors have become disillusioned with gold,” says Suki Cooper, head of metals research at Barclays in New York. “Safe-haven demand hasn’t been strong enough to lift prices, but has only been strong enough to keep them from falling.”

Many people may have bought gold for the wrong reasons: because of its glittering 18.7% average annual return between 2002 and 2011, because of its purportedly magical inflation-fighting properties, because it is supposed to shine in the darkest of days.

India Looks to Central Asia for Uranium Mining – by John C. K. Daly (Silk Road Reporters – July 21, 2015)

July 21, 2015

http://www.silkroadreporters.com/

While attending back-to-back BRICS and Shanghai Cooperation Organization (SCO) summits in Ufa, Russia on July 8-10, Indian Prime Minister Narendra Modi also took the time to visit Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan. The significance of the visit is that ever since the former Soviet Central Asia states became independent in 1991, no Indian Prime Minister has visited all five Central Asian countries simultaneously.

Not surprisingly, the visits focused on increasing bilateral trade, with energy being a significant component of the talks. But while significant hydrocarbon exports remain in the future due to costs and infrastructure development, Modi scored significant successes in both Kazakhstan and Uzbekistan over a portable “cash and carry” energy source – uranium.

In Astana Modi signed five agreements covering defense, railways and uranium supplies. After talks with Kazakh president Nursultan Nazarbayev Modi said, “We are pleased to have a much larger second contract for purchase of uranium with Kazakhstan and expanding our civil nuclear cooperation. Kazakhstan is our biggest economic partner in the region. We will work together to take economic ties to a new level.” The agreement provides for Kazakhstan’s state-owned NAC Kazatomprom nuclear company to deliver 5,000 tons of uranium between 2015 and 2019.

After China dumps gold, don’t count on India to come to the rescue – by MANOLO SERAPIO JR AND RAJENDRA JADHAV (Reuters India – July 21, 2015)

July 21, 2015

http://in.reuters.com/

MANILA/MUMBAI – Blame poor rains or a lack of weddings, but Indians, for whom gold is the investment of choice, aren’t rushing to buy bullion after this week’s sharp sell-off.

India and China are the world’s top gold buyers and, after massive selling on the Shanghai Gold Exchange on Monday helped drive down gold prices by 4 percent to a 5-year low, traders hoped demand would perk up in India, or elsewhere in Asia.

The last big slide in gold prices – a 13 percent drop in just two consecutive trading days in April 2013 – prompted weeks of long queues of Indians outside gold showrooms.

Not this time. India’s gold appetite – it accounts for more than a fifth of global demand – remains sluggish, with only modest local premiums to the global spot benchmark.

“That’s really a bearish sign, when the main consuming region remains on the sidelines after such a price drop to a multi-year low,” Commerzbank senior oil analyst Carsten Fritsch told the Reuters Global Gold Forum on Tuesday.

Chinese Nickel Imports Jump to 6-Year High as Shortage Looms (Bloomberg News – July 21, 2015)

July 21, 2015

http://www.bloomberg.com/

China imported the most refined nickel in six years in a further sign that the world’s biggest consumer is drawing on global supply. Futures rose 2.4 percent in London.

Inbound shipments of the metal used to produce stainless steel surged 67 percent to 38,545 tons in June from the previous month, the highest since July 2009, and were more than three times the level a year earlier, Chinese customs data show.

Goldman Sachs Group Inc. and Citigroup Inc. are bullish on prices amid prospects for rising Chinese demand. Macquarie Group Ltd. sees a global shortage which may cut inventories further from a record. Stockpiles in London Metal Exchange sheds have already fallen to the lowest in almost two months. Some imports may have been for delivery against the first nickel contract to expire on the Shanghai bourse, said Celia Wang from Tianjin Zhongwei Group’s investment department.

“Huge imports arrived in China from LME warehouses as traders seek profits by delivering against the first settlement of a Shanghai nickel futures contract,” said Wang, the general manager. “Refined nickel imports are expected to remain at a high level into July.”

COLUMN-Gold mining cost-cutting shows price can fall further – by Clyde Russell (Reuters U.S. – July 21, 2015)

July 21, 2015

http://www.reuters.com/

LAUNCESTON, Australia, July 21 (Reuters) – What does gold have in common with iron ore and coal? All three are travelling down the same road of structural oversupply, softer demand growth and severe cost-cutting by their producers.

While exciting for gold watchers, Monday’s mini flash crash, which sent the most-active U.S. gold futures contract to a five-year low of $1,088 an ounce in thin early Asian trade, is largely irrelevant, unless viewed against a wider backdrop.

The broad picture for gold is that since the spot price reached its peak of $1,920.30 an ounce in September 2011, demand has dropped as supply has risen.

More than anything else this simple dynamic explains why gold has now given up about half the gains of the decade long rally between 2001 and 2011.

Figures from Thomson Reuters GFMS show that in 2011 there was an overall deficit of 154.1 tonnes in the gold market, which fell to a deficit of 77.9 tonnes in 2012, then rose to a surplus of 248.7 tonnes in 2013 and 358.1 tonnes last year.

Iron Ore Supply to Overwhelm Weak China Demand, Goldman Predicts – by Jake Lloyd-Smith (Bloomberg News – July 20, 2015)

July 21, 2015

http://www.bloomberg.com/

Rising seaborne iron ore supplies over the next two quarters will probably overwhelm weak demand from mills in China, according to Goldman Sachs Group Inc., which said that a global glut was entering its second year.

While housing starts in China have recovered and infrastructure has overtaken property to become the largest market for steel, an improvement this half may not be strong enough to support iron ore, the bank said in a report. Prices are seen dropping over the next four quarters, from $49 a metric ton through September to $44 by the April-to-June period of 2016, according to analysts Christian Lelong and Amber Cai.

Iron ore sank to the lowest since 2009 this month amid concern that the biggest mining companies including Rio Tinto Group, BHP Billiton Ltd. and Vale SA are intent on boosting low-cost supply even as demand falters.

Imports by China fell in the first six months of the year, while local mills sold a record amount of output overseas. BHP, which is set to report quarterly production data tomorrow, said on Tuesday it’s spending $240 million to upgrade tug-boat operations at Port Hedland.

Gold’s fall threatens to cool temperature of mining M&As – by James Regan and Denny Thomas (Reuters U.S. – July 21, 2015)

July 21, 2015

http://www.reuters.com/

SYDNEY/HONG KONG – A dramatic slide in gold prices this week threatens to squash a run of mining mergers and acquisitions just as momentum in the sector was picking up.

Mining executives and fund managers warn predators will turn more cautious before splashing out cash or approving capital raisings, at least until bullion shows signs of stabilising.

The value of completed gold mining mergers and acquisitions so far this year has reached $3.2 billion, compared with $4.4 billion for all of 2014, according to Reuters data.

Gold this week took its sharpest dive since September 2013, landing at $1,088 per ounce, a five-year low. That sent key indices measuring the health of gold mining companies crashing in its wake.

The Australian and Canadian indices fell 11 percent each, while the Johannesburg Stock Exchange gold index dropped 12 percent.

More resources write-downs expected as commodities slump – by Amanda Saunders (Australian Financial Review – July 21, 2015)

July 21, 2015

http://www.afr.com/

A steady flow of write-downs across most metals and oil and gas is tipped over the next year, as many of the mining majors tweak their medium-term price forecasts and try to offload non-core assets in a depressed market.

The big miners are facing profit falls of between 30 and 60 per cent in their next round of results, with their impressive cost cutting not enough to offset the commodity price rout.

Glencore is a candidate to take hits in nickel and possibly other base metals at its interim results, analysts say.

If thermal coal prices continue to languish at $US60 a tonne, Glencore could also write down its Australian coal holdings over the next year, and Anglo American could impair some of its South African coal assets, but probably at the full year.

Ahead of its interim results on Friday, Anglo flagged a writedown of up to $US4 billion ($5.42 billion) post-tax on its Brazilian iron ore mine and some Australian coal assets, two days after BHP Billiton took a $US2.8 billion (pre-tax) impairment on its US shale gas business.

Podcast: The cavalry is not coming – by Warren Dick (Mineweb.com – July 20, 2015)

July 20, 2015

http://www.mineweb.com/

There’s fear and panic in the market and the commodity super-cycle is over, according to Bloomberg Intelligence’s Global Head of Metal and Mining, Ken Hoffman.

WARREN DICK: Good day, everyone. My name is Warren Dick, the editor of Mineweb.com. And joining me on the podcast today is Ken Hoffman, the global head of metal and mining research from Bloomberg Intelligence, and he is joining us from New York. How are you, Ken?

KEN HOFFMAN: I’m doing very well. How are you?

WARREN DICK: Very good, thanks. I think it might be as cold today in Johannesburg as it is in New York. I don’t know what the weather is like there.

KEN HOFFMAN: Oh, it’s absolutely perfect today, actually. Finally we are getting a little bit of summer here.

WARREN DICK: Well, I think, Ken, what we really wanted to do is just pick your brains. You guys are looking at trends in the market, and you’ve obviously seen the massive sell-off in commodity prices. That’s been pretty much indiscriminate. I think everything from iron ore to some of the precious metals we’ve seen. We’ve just seen platinum going below $1000/oz.

Gold price crashes as Chinese offload – by Stephen Cauchi (Australian Financial Review – July 20, 2015)

July 20, 2015

http://www.afr.com/

Nearly $1.5 billion was wiped off the value of Australian gold shares on Monday – including $1 billion from the biggest local gold miner Newcrest – after a price crash sparked by the surprise unloading of tonnes of bullion on the Chinese market.

Australian gold miners suffered huge losses in a market that was already suffering a number of stiff headwinds. Evolution Mining lost 14.5 per cent while Northern Star Resources, Regis and Newcrest Mining were all down between 7 and 10 per cent.

Gold plummeted from $US1132 an ounce to $US1092 in the space of minutes just after 11.30am after 5 tonnes of bullion was unloaded on the Chinese market.

However, the price rebounded to $US1109 shortly after and it stayed around that level for the remainder of the day.

“There was some heavy selling on the Shanghai Gold Exchange this morning,” said Victor Thianpiriya, ANZ precious metals analyst.

Gold Rout Sends Global Miners Lower as Commodity Slump Worsens – by Stephen Kirkland and Jeremy Herron (Bloomberg News – July 20, 2015)

July 20, 2015

http://www.bloomberg.com/

The rout in commodities worsened as the prospect for higher U.S. interest rates sent gold to the lowest level in more than five years. Miners posted the steepest losses in benchmark stock indexes around the world, with selling heaviest among resource producers in emerging markets.

Bullion slid 2.4 percent to $1,105 an ounce at 11:40 a.m. in New York, sending the Bloomberg Commodity Index to its lowest since 2002. The euro traded at $1.0854, near a two-month low. The MSCI Emerging Markets Index fell 0.8 percent.

Investors have soured on precious metals as the dollar has emerged as the champion currency with the Federal Reserve closer to raising rates for the first time since 2006. AngloGold Ashanti Ltd. sank to a record in Johannesburg, while Canada’s Barrick Gold Corp. dropped to the lowest since 1990. Better-than-forecast corporate earnings took the Standard & Poor’s 500 Index within one point of a record.

“We’ve seen a resumption of a rally in the dollar and if you do the math, that’s bad for commodity prices,” said Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors Inc., which oversees $1.8 billion. “The implications there for the hard asset part of the global economy is pretty abysmal looking out to the rest of the year.”

Asteroid with platinum core worth £3.5 trillion set to pass Earth (The Independent – July 18, 2015)

July 20, 2015

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

An asteroid believed to contain a platinum core worth £3.5 trillion is expected to pass Earth at around 10pm on Sunday, attracting the interest of asteroid-mining companies.

The platinum-filled space rock which is also thought to contain other precious materials is only around half a mile wide, but its metallic core is estimated to weigh 100 million tonnes making it hugely valuable.

Asteroid 2011 UW-158 will pass 1.5 million miles away from Earth, meaning it will be 30 times closer than our nearest planet, according to Slooh Community Observatory.

However, it will be six times further away than the moon’s orbit meaning it will be impossible to see with the naked eye.

Mitsubishi Materials apologizes for using U.S. POWs as slave labor – by Mariko Lochridge (Reuters U.S. – July 20, 2015)

July 14, 2016July 20, 2015

http://www.reuters.com/

LOS ANGELES – Construction company Mitsubishi Materials Corp (5711.T) became the first major Japanese company to apologize for using captured American soldiers as slave laborers during World War Two, offering remorse on Sunday for “the tragic events in our past.”

A company representative offered the apology on behalf of its predecessor, Mitsubishi Mining Co, at a special ceremony at a Los Angeles museum.

“Today we apologize remorsefully for the tragic events in our past,” Mitsubishi Materials Senior Executive Officer Hikaru Kimura told an audience at the Simon Wiesenthal Center’s Museum of Tolerance in Los Angeles.

In all, about 12,000 American prisoners of war were put into forced labor by the Japanese government and private companies seeking to fill a wartime labor shortage, of whom more than 1,100 died, said Rabbi Abraham Cooper, an associate dean at the Simon Wiesenthal Center.

Six prisoner-of-war camps in Japan were linked to the Mitsubishi conglomerate during the war, and they held 2,041 prisoners, more than 1,000 of whom were American, according to nonprofit research center Asia Policy Point.

Commodities crash could turn Australia into a new Greece – by Andrew Critchlow (The Telegraph – July 19, 2015)

July 20, 2015

http://www.telegraph.co.uk/

The commodities boom made Australia the lucky country but rising debt and a slump in Chinese demand for resources signal tough times ahead Down Under

Last month Gina Rinehart, Australia’s richest woman and matriarch of Perth’s Hancock mining dynasty delivered an unwelcome shock to her workers in Western Australia: accept a possible 10pc pay cut or face the risk of future redundancies.

Ms Rinehart, whose family have accumulated vast wealth from iron ore mining, has seen her fortune dwindle since commodity prices began their inexorable slide last year. The Australian mining mogul has seen her estimated wealth collapse to around $11bn (£7bn) from a fortune that was thought to be worth around $30bn just three years ago.

This colossal collapse in wealth is symptomatic of the wider economic problem now facing Australia, which for years has been known as the lucky country due to its preponderance in natural resources such as iron ore, coal and gold. During the boom years of the so-called commodities “super cycle” when China couldn’t buy enough of everything that Australia dug out of the ground, the country’s economy resembled oil-rich Saudi Arabia.

BHP Billiton’s coal king Mike Henry digs in for a challenging time – by Matt Chambers (The Australian – July 18, 2015)

July 20, 2015

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

After 25 years working in and around the mining industry, Mike Henry has been given his first major role managing operations. And it’s a beauty.

In January, the former BHP Billiton marketing boss was made coal president, heading the mining giant’s lowest-margin business at a time when forecasts and prices for the commodity seem to be getting relentlessly worse and in which chief executive Andrew Mackenzie says he will not allocate capital.

But the 48-year-old Henry, who is regarded by company-watchers as a potential internal candidate to succeed Mackenzie, sees plenty of positives.

“I like a challenge and there’s lots to like here,” Henry tells The Weekend Australian from BHP’s coal headquarters on the Brisbane River. “In the first half (of 2014-15), we generated a 2 per cent return on capital and 2 per cent of BHP’s earnings before interest and tax,” he says, explaining coal’s current limited prospects for investment funds.

“My job is to take what we have and make sure that we’re getting the most we possibly can out of it.