International Media Resource Articles – Page 696

BRICs Will Be Cut to ICs if Brazil and Russia Don’t Shape Up, Warns Phrasemaker (Bloomberg News – January 9, 2015)

January 9, 2015

http://www.bloomberg.com/

Brazil and Russia’s membership of the BRICs may expire by the end of this decade if they fail to revive their flagging economies, according to Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the acronym.

Asked if he would still group Brazil, Russia, India and China together as emerging market powerhouses as he did in 2001, O’Neill said in an e-mail “I might be tempted to call it just ’IC’ or if the next three years are the same as the last for Brazil and Russia I might in 2019!!”

The BRIC grouping will be dragged down by a 1.8 percent contraction in Russia and less than 1 percent expansion in Brazil, according to the median estimate of economists surveyed by Bloomberg News. China is seen growing 7 percent and India 5.5 percent.

The BRICs were still booming as recently as 2007 with Russia expanding 8.5 percent and Brazil in excess of 6 percent that year. The bull market in commodities that helped propel growth in those nations has since ended, while Russia has been battered by sanctions linked to the crisis in Ukraine and Brazil has grappled with an unprecedented corruption scandal involving its state-owned oil company.

“It is tough for the BRIC countries to all repeat their remarkable growth rates” of the first decade of this century, said O’Neill, a Bloomberg View columnist and former chairman of Goldman Sachs Asset Management International.

COLUMN-Lead, a market desperately seeking a good story – by Andy Home (Reuters India – January 9, 2015)

January 9, 2015

http://in.reuters.com/

Jan 9 (Reuters) – Lead was the second worst performer among the major industrial metals traded on the London Metal Exchange (LME) last year. It was close but copper, which came under sustained bear attack over the closing weeks of 2014, just pipped it for the booby prize.

Unglamorous lead is now trading consistently below the $1,900-per tonne level, its weakest performance since the third quarter of 2012.

It’s also trading at a discount of more than $300 per tonne to “sister metal” zinc, so called because both have historically been produced at the same mines.

Trading lead and zinc as a relative value pair is a favoured past-time on the LME “Street” but the gap between the two is now as wide as it’s been since the end of 2008.

APATHY RULES, OK?

Lead’s relative under-performance has caused a good deal of head-scratching among analysts. Or at least those analysts who still care, because this market’s real stand-out feature over the last year or so has been collective apathy.

What’s wrong with BHP Billiton? – by Amanda Saunders (Australian Financial Review – January 7, 2015)

January 9, 2015

http://www.afr.com/

What is wrong with BHP Billiton? Well, a lot, according to Bernstein’s senior mining analyst, Paul Gait. London-based Mr Gait says the Big Australian is “a colossus with feet of clay” in a 54-page note that puts BHP through the wringer.

His views are understood to be in line with those held by pockets of the market in London. BHP shares have taken a hammering there in the past five weeks, falling 13 per cent since the start of December to 1324.50 pence on Tuesday. In Australia, BHP has plunged 29 per cent since August to $28.11.

BHP does not deserve the valuation premium it enjoys over its “high-quality” peers, particularly arch-rival in iron ore, Rio Tinto, Mr Gait said.

And he said it is doubtful BHP is ¬willing to take responsibility for capital discipline, including withholding supply. He accuses the mining giant of “hubris” over its potash strategy.

BHP has a set of some of the highest quality, best-run assets in the game across its four pillar commodities – iron ore, copper, coal and petroleum. That quality, combined with low operating costs and broad diversification have made BHP a “must-own” mining stock.

Commodities conundrum a hard one to puzzle out – by Hilary Joffe (Business Day Live – January 7, 2015)

January 9, 2015

http://www.bdlive.co.za/

WILL the positives for SA’s economy of a lower oil price outweigh the negatives of lower commodity prices all round? It’s hard to get economists to agree on the question, let alone the answer.

The new year’s collapse in the oil price has fuelled a raging debate on how low it will go and for how long. What will happen to other commodity prices is the subject of almost as much debate, however, and the balance matters a great deal for SA.

In oil, the fall has been sudden and steep and, at not much more than $51 a barrel yesterday, the Brent crude oil price was about 55% down on its June 2014 level. But the 40% slide in iron-ore prices over the past year or so has been almost as sharp, if more gradual, as was a 40% decline in thermal coal prices since 2011.

The common factor is weak global growth, and in particular the slowdown in China’s economic growth rate and the shift in the composition of China’s growth away from the heavy investment and infrastructure-led pattern of the past. That’s the underlying factor in what most would agree is a structural shift in global commodity markets over the past couple of years — some would call it the popping of the commodity supercycle bubble.

SA and other emerging market commodity exporters benefited hugely from that supercycle in the years leading up to the crisis.

China challenges India’s polished diamond throne – by Tanya Ashreena (Reuters U.S. – December 25, 2015)

January 9, 2015

http://www.reuters.com/

NEW DELHI, Dec 26 (Reuters) – India’s long-held position as the world’s top diamond polisher is being challenged by soaring output from China, compelling the south Asian country to seek help from ally and top rough diamond supplier Russia to defend its market share.

India has traditionally relied on the middlemen in trading hubs of Antwerp, Tel Aviv and Dubai for its supply of rough diamonds, which mainly come from Russia or Africa. Most of the world’s diamond output is sent to India for cutting and polishing before being retailed around the world.

But China has managed to break the established trade route by getting diamonds directly from African mines in which Chinese companies have a stake. This has boosted the value of China’s net exports of polished diamonds by 72 percent in the past five years to $8.9 billion.

While India’s exports, supplied by firms such as Asian Star , Gitanjali Gems Ltd and Venus Jewel, rose 49 percent to $14 billion over that time, shipments have seen a sharp drop this year.

“China’s active procurement of rough supply from African countries was reducing the supply available to Indian manufacturers,” said Sandeep Varia, an executive of Indian industry body Assocham. “Many units across the country had to lay off workers due to losses.”

Rare earths and China’s self-correcting folly – Alan Beattie (Financial Time – January 8, 2015)

January 8, 2015

http://blogs.ft.com/beyond-brics/

This week, a trade war that was supposed to tear the world of high-tech manufacturing apart ended peacefully, quietly and with few casualties.

China announced plans that would comply with a WTO decision from last year by removing export quotas and other restrictions on rare earth elements (REEs), the minerals used widely in the manufacture of electronics, computers and cars. It was another success for the US, which has not only chalked up a series of impressive wins against China in the WTO’s dispute settlement process but also (by no means a given) often succeeded in getting Beijing to implement the decisions.

So, a big victory for global governance? Huzzah for the international rule of law, and a celebratory round of Dan Drezners? Sort of. In reality, it was the free market as much as trade rules that did for China’s attempt to corner global commerce in rare earths. Moreover, in a rather choice irony, Chinese companies employed the very tricks that they use to sidestep trade restrictions by other governments to sabotage the export quotas set by their own.

By 2010, China produced 97 per cent of the world’s basic rare earth oxide production and much of the processing business. In its submission to the WTO, Beijing laughably argued that a complex system of export restrictions it had placed on its REE companies since the mid-2000s was aimed at protecting the environment by controlling mining.

Platreef PFS underpins ‘excellent’ economics – Ivanhoe – by Natasha Odendaal (Mining Weekly.com – January 8, 2015)

January 8, 2015

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

JOHANNESBURG (miningweekly.com) – The prefeasibility study (PFS) of TSX-listed Ivanhoe Mines’ Platreef project had demonstrated the robust nature of the latest major new underground, mechanised platinum mine, near Mokopane, in Limpopo, executive chairperson Robert Friedland said on Thursday.

Ivanhoe aimed to develop the Platreef platinum, palladium, rhodium, gold, nickel and copper mine in three phases, with an initial production rate of four-million tonnes a year to establish an operating platform to support future expansions.

The latest study confirmed the “excellent” economics and technical viability of the low-cost operation, Friedland said of the mine that would eventually expand production to eight-million tonnes a year, before reaching a steady-state 12-million-tonne-a-year operation in the third phase.

The PFS – an important milestone in Ivanhoe’s planned transformation of the Platreef discovery into one of the pre-eminent South African platinum-group metals producers – covered the first phase of development, including the construction of an underground mine, concentrator and other associated infrastructure to support initial concentrate production by 2019.

Iron ore bounce likely to be shortlived – by Neil Hume (Financial Times – January 6, 2015)

January 8, 2015

http://www.ft.com/home/us

Few in the iron ore industry will remember 2014 with any fondness. The steelmaking ingredient was the worst performing major commodity, plummeting 50 per cent as a flood of new supply hit the market and swamped demand.

But it has started 2015 on the front foot with benchmark Australian ore advancing almost 8 per cent since Christmas. The question for the industry is whether this is a dead cat bounce or the start of a recovery in prices, which recently hit a five-and-a-half-year low of $65.60 a tonne.

So far few are convinced the rally will last. Analysts believe the bounce in prices is being driven by restocking at steel mills ahead of the Chinese new year and changes to reserve requirements for Chinese banks. With more supply set to come on line and demand in China weak, many believe prices will come under further pressure this year, even trading into the $50s.

This would be bad news for big mining houses such as BHP Billiton, Rio Tinto and Vale, which have spent billions of dollars expanding operations and generate most of their profits from iron ore.

“We view the upward correction as a similar experience to that recently encountered while climbing Skiddaw (the fourth highest mountain in England) . . . in a gale,” said analysts at Investec Securities in a report.

2015 Black Swans – or another BRIC in the wall – by Lawrence Williams (Mineweb.com – January 8, 2015)

January 8, 2015

http://www.mineweb.com/

A New Year newsletter offers some fascinating interpretations of current geopolitical issues and a positive view on gold as the best currency at such a time of uncertainty.

China set to play leading role in setting up and financing financial entities which will be strong rivals to the IMF and the World Bank.

As Mineweb’s principal commentator on precious metals matters I tend to be in receipt of various emails virtually everyday or so from precious metals and geopolitical analysts and commentators – some of whom provide some really good and interesting new material, while others provide views and thoughts which, quite frankly, are not worth taking the time to scan them.

Some of these analysts are somewhat trapped in a groove saying the same things over and over again. Eventually they may well turn out to be right – what goes around comes around – but sometimes this can take an awful long time eventuating. And of course, there are a number out there trying to promote their own premium services, which is fair enough as people need to make a living, but the problem here is that too many of them preach entirely to their own vested interests.

While there is often much that is good in what they have to say it is sometimes difficult to separate the wheat from the chaff.

China’s Big Year Ahead – by Jim O’Neill (Bloomberg News – January 7, 2015)

January 8, 2015

http://www.bloombergview.com/

Halfway through a decade in which China set out to rebalance its economy, it is poised to drastically enlarge its role in the world. Let me explain why.

Back at the start of the decade, I made certain assumptions about how the so-called BRIC economies — Brazil, Russia, India and China — would perform in the 10 years ahead. Five years on, China is the only one of the four to have either met or possibly slightly surpassed my expectations.

Assuming that China’s soon-to-be-published fourth-quarter gross domestic product number will come in at or close to 7.3 percent, as many experts assume, then from 2011 to 2014, China will have averaged real GDP growth of just less than 8 percent. I had assumed it would be 7.5 percent for the full decade (as did Chinese leaders back in 2011), and China could achieve this if its economy continues to grow by 7 percent for the next five years.

If so, it will have become a $10 trillion economy in current nominal U.S. dollars, well more than half the size of the U.S. (probably even bigger, adjusting for purchasing power), twice the size of Japan, bigger than Germany, France and Italy put together and not far off one and half times the size of the other three BRIC economies put together.

Brazil and Russia, for their part, have significantly disappointed my expectations. Indeed, their economic performance supports skeptics of their long-term potential, who attributed earlier growth primarily to high commodity prices. India also disappointed, but its growth rate accelerated in 2014.

Miners face challenge tapping copper opportunities – by James Wilson (Financial Times – January 6, 2015)

January 7, 2015

http://www.ft.com/intl/companies/mining

The giant Chilean Escondida mine produces more copper than anywhere on earth. Some 1.2m tonnes emerge from the BHP Billiton-run facility each year. For the largest miners, Escondida also serves as a key measure for world copper output.

To meet global demand over the next decade, the industry “will have to add the equivalent of a new Escondida every 15 months”, says Jean-Sebastien Jacques, head of copper at Rio Tinto, which owns a minority stake in the mine. First Quantum, a mid-tier copper miner, says that if China, India and Brazil were to reach EU levels of copper use by 2020, it would imply nine new Escondidas.

Such predictions explain why big UK miners are talking up their growth potential in copper, even though worries over Chinese demand have driven the price of the metal to its lowest since 2010.

Both Rio and BHP believe the copper market is oversupplied now but will tighten from 2018, with growing deficits. “The copper story remains very strong,” says Mike Henry, BHP’s president for marketing.

Some of the UK’s pure-play copper miners are investing heavily in growth. Antofagasta expects to lift annual output from its Chilean mines from 700,000 tonnes last year to 900,000 tonnes by 2018. Kaz Minerals is building two mines in Kazakhstan.

Minnesota couple who canoed from Boundary Waters to nation’s capital ponder next adventures – by Steve Karnowski (The Associated Press/Winnipeg Free Press – January 5, 2015)

January 7, 2015

http://www.winnipegfreepress.com/

MINNEAPOLIS – Two experienced adventurers who paddled, portaged and sailed 2,000 miles from northern Minnesota to Washington, D.C., say they plan to keep up the fight in the new year to protect the Boundary Waters Canoe Area Wilderness from copper-nickel mining.

Amy and Dave Freeman set out Aug. 24 from Ely. They canoed 180 miles through the BWCA, then portaged to Lake Superior. They strapped their canoe to a sailboat for the next 600 miles to Lake Huron, then switched back to the canoe for the final 1,300 miles, travelling mostly by rivers and canals across parts of Canada and the eastern states. They reached the Potomac waterfront in Washington on Dec. 2 — 101 days after they set out.

The Freemans wanted to call attention to the threat they say copper-nickel mining poses to the Boundary Waters and to mark the 50th anniversary of the federal Wilderness Act, which protects pristine areas such as the BWCA. Their next plan is a bike ride across Minnesota in 2015 hauling another canoe to press their message.

But it won’t be the same signature-covered “petition canoe” they paddled to Washington. They gave that to the U.S. Forest Service, the agency that oversees the BWCA. Dave Freeman said the bike tour, which is being organized by the Ely-based group Save The Boundary Waters, will last about six weeks and a large group of people will participate for a week or two at a time.

“I think it’s going to be a lot of fun. We’re going to try and hit as many of the college campuses in Minnesota as possible,” he said.

Polish farmers threaten uprising over opencast coalmine – by Arthur Neslen (The Guardian – December 31, 2014)

January 6, 2015

http://www.theguardian.com/uk

Heinz unites with farmers in rebellion against plan to build a vast lignite mine and power plant on farming land in western Poland

Krobia, Miejska and Poniec, Poland – Farmers in western Poland are warning of civil unrest if a vast coalmine and power plant are given the go-ahead, with thousands of people at risk of being forcibly relocated.

At risk are the food exports for which the Krobia and Miejska Górka region is known – including tomatoes, and sugar beet destined for Heinz Ketchup on UK supermarket shelves – and a windfarm which campaigners say would have to be demolished to make way for the brown lignite mine.

Experts say that 22 villages could be destroyed by the opencast mine proposed by Polish energy company PAK. The mine would cover 11,900 hectares of land (29,400 acres) and include a 1,000MW coal plant, leaving up to 5,800 people subject to compulsory purchase orders of their land.

Many farmers in the area have ties to the land stretching back several generations, and say they will not leave without a fight. Sitting in his farm with friends and family, Janusz Mackowiak, a moustachioed former MP for Poland’s Agricultural party, told the Guardian that thousands of local people had already protested against the mining project, and more would join in if plans are escalated next year.

Coal India Workers Strike to Fight Modi’s Privatization Plans – by Rajesh Kumar Singh and Abhishek Shanker (Bloomberg News – January 6, 2015)

January 6, 2015

http://www.bloomberg.com/

A strike by coal miners in India has shut down some mines and disrupted supply at others as unions vowed the biggest walkout in decades to halt plans by Prime Minister Narendra Modi to privatize the industry.

“The strike is on,” said R. Mohan Das, a personnel director at state-run Coal India Ltd. (COAL), the world’s biggest miner of the fuel. It’s too early to assess supply losses, he said, adding that all workers have walked out at some mines, while others are partially closed.

Unions called a five-day strike starting today after rejecting an offer to meet management this morning. Hundreds of union members protested outside Coal India’s Kolkata office denouncing the privatization plans.

“If this strike intensifies there will be a severe coal shortage,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. “With many power utilities being hand to mouth as far as coal supplies are concerned, the problem may be severe.”

Of the 100 power plants that run on local coal, 42 had supplies for less than seven days as of Jan. 1, according to the power ministry’s Central Electricity Authority. Twenty of these plants had less than four days of stock.