Archive | Zinc, Lead and Tin

Zinc and nickel price upside ‘imminent’: Clarus – by Peter Koven (National Post – January 20, 2015)

The National Post is Canada’s second largest national paper.

There has been a lot of bullish talk in the metals community about zinc and nickel over the past couple of years, as many insiders believe those commodities are poised for a rally. You can include Clarus Securities analyst Mike Bandrowski in that group.

He published a detailed note on Tuesday that suggests zinc and nickel have “imminent” upside and will perform very strongly over the next two years as inventories disappear.

In the case of zinc, Mr. Bandrowski noted the market is already in deficit, and that deficit should get bigger following the closures of the Lisheen and Century mines this year. He said exchange inventories have fallen by more than half over the last two years and should be at “critical” levels later in 2015.

“We believe the lack of funding in zinc mine development and exploration has now caught up with the marketplace and zinc prices will respond in 2015,” he said in a note. “Despite the broad commodity sell-off, zinc has held up quite well, likely an indication of the favourable supply/demand fundamentals.”

Nickel has received more attention than zinc due to an Indonesian export ban on raw ore that was imposed a year ago, which removed about 25% to 30% of global nickel supply. Continue Reading →

COLUMN-Lead, a market desperately seeking a good story – by Andy Home (Reuters India – 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. Continue Reading →

Take Glencore’s bullish metal forecasts with a grain of salt – by Kip Keen (Mineweb.com – December 12, 2014)

http://www.mineweb.com/

Glencore makes some worthwhile points on impending metal deficits – but they’re aggressive.

HALIFAX, NS (MINEWEB) – Glencore summarized its particularly bullish outlook on both copper and zinc – two important commodities it mines and trades – in a rather thorough presentation it gave at a recent investors day. All 193 pages here. At the very least, it makes for good reading if you want an overview of multiple metal and energy sectors in terms of supply and demand. Among its predictions two metals stand out: copper and zinc supply deficits.

Copper first.

Glencore gets very bullish and opposes the big research organizations about their views of a coming surplus. A major copper deficit is in the cards instead, Glencore says.

That should be readily apparent in an equation it puts out there on slide 72. It cuts down surplus forecasts for 2015 from a slew of global mining operations – ones relied upon by the likes of Wood Makcenzie, among others such as Brookhunt and the International Copper Study Group (ICSG) – to revise a 390kt surplus (by the ICSG and Brookhunt) – to a 1.4 million to 1.6 million tonne deficit.

Now Glencore’s a bit vague in its equation and numbers and it’s surely aspirational. It tallies 1.8 mt in certain/likely/maybe copper market revisions in terms of supply from mines around the world to deduct from that predicted 390kt surplus. It announces, “=Deficit of 1.4 – 1.6 Mt for 2015?” Continue Reading →

Copper, zinc, pgms – Friedland’s got them all in mega quantities – by Lawrence Williams (Mineweb.com – December 3, 2014)

http://www.mineweb.com/

Robert Friedland’s latest take on his 3 megaprojects in Africa and his forecasts for likely markets are little changed.

LONDON (MINEWEB) – At yesterday’s well attended MineAfrica meeting in London, serial mining entrepreneur Robert Friedland was given virtually unlimited time to close out the day’s talks. He thus spent more than an hour talking delegates through the prospects for platinum group metals, copper and zinc, followed by why one should invest in his company to take advantage of what he sees as a rosy future ahead for the metals sector.

Most of what Friedland said about the metals and his three massive African projects he has said before but nonetheless they are interesting to recount again, with updates, given his remarkable track record in finding mega deposits.

As he is one to tell, his companies found Fort Knox (gold) and then more impressively Voiseys Bay (nickel) and Oyu Tolgoi (copper/gold) although his early near environmental disaster of Summitville (gold) is quietly forgotten. After all he was young then and has since grown older and perhaps wiser – and his almost evangelical speaking presentations have been well polished over the years.

On all the metals he points to global population growth and people’s aspirations to better themselves as being the key drivers for virtually all metals and minerals looking ahead, but particularly for those on which his Ivanhoe Mines company is concentrating. Continue Reading →

The 2015 Metals Outlook Series: Silver, Zinc, Lead – by Cole Latimer (Australian Mining – December 2, 2014)

http://www.miningaustralia.com.au/home

The market for base metals silver, lead, and zinc is finally seeing moderate action.

The period leading to the global financial crisis saw an explosion of growth, with the sector seeing a 30.9 per cent growth in revenue followed swiftly by a 56.2 per cent growth in revenues, creating a heady market.

However once the GFC hit the bottom swiftly fell out of the market, as prices retreated quickly, and inversely, to the rest of the mining sector.

A 13.2 per cent decline was chased by another period of plummeting revenue, with the sector recording a 43.5 per cent drop in revenue. It recovered briefly in 2010 before seeing another swift fall into negative territory in 2012 before the current lift into even pricing territory.

This, more than many real­ise, had a major effect on the Australian mining landscape as the nation is the largest lead exporter and one of the largest zinc concentrate exporters worldwide. So what lies ahead for the metals?

Much of it relies on the contin-ued weakness of the Australian dollar. IBISWorld research states that overall revenues and the price of the metals are “forecast to increase over the five years through 2018/19 due to the interplay of higher output, stronger US dollar prices for silver, lead, and zinc, and a weaker Australia dollar”. Continue Reading →

Progress seen in Coeur d’Alene River Basin cleanup efforts – by Becky Kramer (The Spokesman-Review – November 25, 2014)

http://www.spokesman.com/ [Spokane, Washington]

Cleaning up historic mine waste is paying dividends for water quality in the Coeur d’Alene River Basin, according to a new report published by the U.S. Geological Survey.

The report looked at two decades of water quality monitoring for the Coeur d’Alene River and its tributaries. Since the early 1990s, concentrations of lead, cadmium and zinc have dropped by 65 percent in the South Fork of the Coeur d’Alene River near Pinehurst, Idaho.

Other streams also showed water quality improvements, though most continue to exceed safe limits for heavy metals.

In addition, large amounts of mining waste continue to wash down the Coeur d’Alene River and into Lake Coeur d’Alene, the report said. About 400 tons of lead, 700 tons of zinc and 5 tons of cadmium flow into the lake each year, according to data collected from 2009 through 2013. Most of the metals settle at the bottom of the lake, with some flowing out of the lake and into the Spokane River.

Overall, the report is “good news for the people of the basin,” Rick Albright, the U.S. Environmental Protection Agency’s Superfund cleanup director in Seattle, said in a statement. “We still have a long way to go in our cleanup efforts, but it’s nice to have scientific confirmation that we’ve made solid, measurable progress in reducing metals loads and improving area water quality.” Continue Reading →

Callinex to target high-grade copper- and zinc-rich VMS deposits in Manitoba (MiningWeekly.com – November 21, 2014)

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

HANNESBURG (miningweekly.com) – TSX-listed CallinexMines has adopted an aggressive new strategy to discover and develop high-grade copper- and zinc-rich volcanogenic massive sulphide (VMS) deposits.

The company has identified its Flin Flon and Pine Bay projects as the focus of future exploration based on potential to host the Flin Flon mining district’s nextVMS deposit. Both projects are located within 20 km by road to Hudbay Minerals’ processing facility in Flin Flon, Manitoba, which is projected to require additional ore in the coming years.

President and CEO Max Porterfield said: “I am eager to lead the renewed exploration focus on VMS deposits within the Flin Flon mining camp. Prior to the 2011 spinout from Callinan Mines, the company has benefited from several VMS discoveries based in its project portfolio, including the Callinan and 777 mines.

“Additionally, existing infrastructure and Manitoba’s favourable permitting environment can be leveraged to significantly reduce capital costs and lead times to production.”

He added that the strategic shift in focus “comes at a time when the zinc market faces a medium-term supply deficit and copper continues to have positive long-term fundamentals”. Continue Reading →

Vedanta to build R8.7bn Gamsberg zinc project – by David McKay (Miningmx.com – November 13, 2014)

 http://www.miningmx.com/

[miningmx.com] – UK-listed mining group Vedanta Resources said it had approved an in principle investment of $782m (R8.7bn) in the Gamsberg zinc deposit in South Africa’s Northern Cape province with a view to producing first zinc during the group’s 2017/18 financial year.

In terms of the proposed investment, Vedanta will establish an open pit mine producing 250,000 tonnes/year of zinc and a refinery at the site of Skorpion, a mine first developed by Anglo American, producing 150,000 tonne/year of zinc concentrate. The Skorpion mine produced 13% less refined zinc, or 60,000 tonnes, in the first half of Vedanta’s financial year.

“The detailed feasibility study for the mining project was placed at the board meeting, while the work for setting up pilot plant for refinery conversion is underway,” said Vedanta today as part of its interim results presentation. “Preliminary work on financing options have also been commenced,” it said.

Vedanta has a positive view on the internationally traded zinc market saying in its interim results that it expected a supply deficit to remain in place until 2018. London Metal Exchange zinc prices averaged $2,196 per tonne compared to $1,850/t in the same period in 2013, it said.

The Gamsberg deposit and Skorpion mine were sold to Vedanta in 2010 as part of a package of zinc assets for about $1.3bn by Anglo American, then led by Cynthia Carroll who had embarked on a wave of non-core asset sales. Continue Reading →

Zinc bull Michelmore puts the case – by Lawrence Williams (Mineweb.com – October 24, 2014)

http://www.mineweb.com/

MMG CEO Andrew Michelmore is very bullish on zinc, in part resulting from the impending closure of his company’s Century mine next year with nothing of comparable size to replace it.

LONDON (MINEWEB) – At the tail end of a very interesting East meets West seminar put together by Bloomberg in London during LME Week, Andrew Michelmore, the CEO of MMG (the Australian-based subsidiary of China’s Minmetals), talked about his company and in particular about the massive Las Bambas copper property it is building in the Peruvian Andes.

But perhaps his most interesting comments came in a Q&A session at the end with his remarks on the global zinc market.

Michelmore is bullish on copper, but VERY bullish on zinc, and he is in a good position to understand the market as MMG is the operator of the massive Century zinc mine in Australia which is due to cease production next year. Century will produces some 400 000 tonnes of zinc this year, around 7% of global mined supply and is reckoned to be the world’s second largest zinc mine after Hindustan Zinc’s Rampura Agucha in Rajasthan, India.

Century is due to run out of open pittable ore by the end of the current year, but can probably continue processing material until Q3 2015. Beyond that production will cease said Michelmore in an answer to a direct question on the Century closure schedule. Continue Reading →

COLUMN-LME zinc stocks cancelled – signal or noise? – by Andy Home (Reuters U.S. – September 19, 2014)

 http://www.reuters.com/

(Reuters) – The zinc rally has run out of steam. The galvanising metal is still, just, the second-best performer among the base metals traded on the London Metal Exchange (LME) this year. But the benchmark LME three-month price has over the last couple of weeks retreated from above $2,400 per tonne to a current $2,260.

Some of the hot money that drove the price higher over June and July has left the market. The LME’s Commitments of Traders Report showed money managers trimming their net long position by 12,271 lots, or 306,775 tonnes, in the week to Sept. 12.

Given the likely preponderance of technical funds in that category, this collective rush for the exit may have been no more than a reaction to the loss of upside momentum and the subsequent price decline.

The real problem for zinc’s many bull followers is the gap between expectation and reality. The zinc story is one of looming supply crunch as some of the world’s biggest mines come to the end of their operating lives. But there is still scant evidence of any stress in the zinc supply chain.

Global mined and refined production are still rising and there are ample stocks of concentrate and metal to fill any emerging gap with demand. The rally, in other words, had got ahead of the story, leaving the London market vulnerable to precisely the sort of speculative blow-off experienced this month. Continue Reading →

Zinc Deficiency Gives Investors a Jolt – by Tatyana Shumsky (Wall Street Journal – September 8, 2014)

http://online.wsj.com/home-page

Prices for the Metal Have Soared to 3-Year Highs

The world is running low on zinc, sending some investors scurrying to buy mining-company shares and forcing the U.S. Mint to redouble cost-cutting efforts in search of a cheaper penny.

Prices for the metal have soared to three-year highs. Investors are betting prices will continue to climb as some of the world’s largest zinc mines run dry just as demand is ramping up.

Zinc is used in everything from steel coatings to car tires to sunscreen, and the metal has few substitutes. The U.S. Mint reduced manufacturing costs to offset higher prices for zinc, which makes up 97.5% of every penny. However, steelmakers, which buy about half the world’s zinc, are in a tougher bind. Zinc is one of several rust-resistant metals vital to the steelmaking process where costs have soared this year.

Zinc production is expected to fall short of demand this year for the first time since 2007, according to Goldman Sachs. Several large, aging mines are scheduled to close next year, and miners need higher prices to justify the cost of finding and developing new sources of metal. Miners may not produce enough zinc to meet the needs of steel companies and coin makers until 2018, analysts say. Meantime, a rebound in the U.S. property market and soaring global auto sales are creating new demand for galvanized steel. Continue Reading →

Red Dog lead, zinc mine marks 25 years, $1B in royalties – by Tim Bradner (Alaska Journal of Commerce – July 24, 2014)

http://www.alaskajournal.com/

The Red Dog Mine in Northwest Alaska turned 25 years old July 17 after producing since 1989 and paying about $1 billion in royalties to NANA Regional Corp., the landowner.

NANA paid $608 million of that to other Alaska Native corporations under revenue-sharing provisions of the Alaska Native Claims Settlement Act and $199 million in dividends to its own shareholders.

The remaining $103 million was retained by NANA to help pay operations and for investments in other business, which has now helped NANA grow a diversified portfolio of assets that earned the corporation $1.7 billion in revenues last year.

To celebrate the July 17 anniversary, NANA invited guests to the mine including including former Gov. Bill Sheffield and Willie Hensley, NANA leaders and former legislators who played key roles in the original mine development.

Teck president and CEO Don Lindsay also attended. The mine is operated by Teck Alaska Inc. Teck Alaska’s parent, Canada-based Teck Resources, purchased Cominco, the Canadian company that developed Red Dog with NANA in the mid-1980s.

Red Dog is a surface mine that is one of the world’s largest zinc mines, producing 551,300 tonnes of zinc concentrates in 2013 (a tonne is approximately 2,200 pounds). The mine earned $874 million in total revenues that year, according to Teck. Continue Reading →

Zinc Scales The $1 A Pound Barrier And Keeps Going – by Tim Treadgold (Forbes Magazine – July 8, 2014)

http://www.forbes.com/

Last week a 5% rise in the price of zinc over the previous two weeks was considered sufficiently newsworthy to earn a report into what seemed to be the start of a revival in a sector of the mining market known as base metals, which makes it hard to ignore the fact that zinc has just gone up by another 5%.

The latest rise takes zinc, which is largely used to galvanize (rust-proof) steel, over the $1 per pound mark to $1.03, its highest in three years.

Other base metals, including nickel and copper, are also performing strongly as global industrial production continues its slow recovery and mine development continues to suffer from a capital drought.

But, while many investors favor stories from the technology sector early-bird speculators playing the small end of the mining market are making a killing.

Thanks in part to heavy selling over the past three years which has trashed their share prices mineral exploration stocks have been consigned to the bargain basement, though it is getting hard to ignore stocks which double in a matter of days.

Continue Reading →

Zinc Springs Back To Life As It Nears A Three Year Price High Of $1 A Pound – by Tim Treadgold (Forbes Magazine – June 26, 2014)

http://www.forbes.com/

Any commodity which rises by 5% over just two weeks is worth a closer look, except when it is zinc, the ultimate industrial metal, which has disappointed for so long that even the prospect of an even stronger price recovery is being ignored.

Used almost exclusively in galvanizing steel to protect it from rusting zinc has been suffering from chronic over-supply and a depressed price which has seen it limp along at less than $1 a pound for the past three years.

That psychological barrier of $1/lb could be broken in a matter of days with the zinc price on the London Metal Exchange reaching 98.69c on Wednesday, up 5c since June 12.

What’s driving zinc is the simplest of all economic forces. The over-supply is fading,. Stockpiles are shrinking. Old mines are reaching their use-by dates, and no major new mines are planned.

Over the next three years an estimated 1.5 million tonnes-a-year of newly-mined zinc will disappear from the market thanks to mine closures, the equivalent to losing 11.5% from a market which consumes 13 million tonnes of zinc a year. Continue Reading →

Zinc Prices Surge as Supplies Shrink – by Tatyana Shumsky (Wall Street Journal – June 22, 2014)

http://online.wsj.com/home-page

Zinc is trading at its highest price in more than a year amid diminishing supplies of the metal.

Zinc for delivery in three months rose $24, or 1.1%, to $2,177 a metric ton Friday on the London Metal Exchange, the highest level since Feb. 14, 2013. Zinc prices gained 4.3% for the week.

The metal is primarily used to galvanize steel to make rust-resistant products. Zinc supplies are dwindling as construction demand is ramping up globally while mines shut down.

The amount of zinc held in the LME’s global warehouse network fell to a 3½-year low of 674,375 metric tons on Thursday. While the stockpiles increased by 1,900 tons on Friday, the amount of zinc in LME storage is still down 28% this year.

“That decline in stocks is helping to drive zinc higher, no question about it,” said Michael Turek, senior director of metals with Newedge in New York. “In the meantime, demand is quite good in the U.S., and Europe isn’t the basket case we expected it to be.”

Global demand for zinc is likely to grow 5.7% this year to 13.85 million metric tons and expand a further 5.2% in 2015, according to Morgan Stanley analysts. Continue Reading →