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Zinc, Lead and Tin

Glencore’s Zinc Rationale Defies History – by Liam Denning (Bloomberg News – October 15, 2015)

http://www.bloomberg.com/

“You shut up!/No, YOU shut up!” is how schoolyard scuffles kick off. Miners tweak it slightly to: “You shut down!/No, YOU shut down!”

Ivan Glasenberg, the chief executive of Glencore, has long bemoaned miners’ tendency to literally dig themselves into a hole with too much supply. As concern about Glencore’s swollen debt has hit the stock price, Glasenberg has recently taken himself at his word, ordering a temporary shutdown of some of the company’s zinc output. That caused the price of the metal to jump 10 percent last Friday.

But history suggests Glencore’s fight to raise zinc prices sustainably could be a tough one. Taking yourself out of the market in order to reduce excess supply can be a great strategy— but primarily for those rivals who keep producing and benefit from higher prices while your own reserves stay in the ground.

Sure enough, this week the marketing chief at one of said rivals, BHP Billiton, confessed himself “quite intrigued” about all the talk of cutting production, as he hadn’t seen any capacity being shut-in that was making cash.

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COLUMN-Glencore changes the debate, but can it change the zinc market? – by Andy Home (Reuters U.S. – October 15, 2015)

http://www.reuters.com/

Oct 15 (Reuters) – Everyone’s talking about Glencore. The Swiss trading and mining giant is the hot topic of conversation in the myriad meetings and cocktail parties taking place in London for LME Week.

And, Glencore executives will be pleased to note, this isn’t speculation as to whether the company is about to go bust. That particular panic seems to have passed for now after a flurry of announcements intended to shore up its balance sheet, most recently the proposed sale of two copper mines.

Rather, it was Glencore’s announcement on Friday of massive cuts to its zinc and lead production portfolio that has been exercising the minds of the thousands of metal executives meeting in London this week.

The London zinc price went on a super-charged rally on the news, exploding from its opening at $1,701 per tonne to $1,875 in a matter of hours. As with last month’s announcement of 400,000 tonnes of copper cutbacks, the timing was exquisite, catching off guard a market that had been grinding steadily lower for months under the weight of relentless short selling.

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Zinc turning bull? – by Kip Keen (Mineweb.com – October 13, 2015)

http://www.mineweb.com/

We look at the question of how much Glencore’s zinc cuts matter.

HALIFAX, NS – There’s no doubt that Glencore, in planning to axe some 500 000 tonnes zinc output, is throwing it’s weight around in the zinc market. The cut amounts to nearly 4% of world supply from mines. Indeed, zinc is a market where Glencore can, acting alone, make a difference to the big picture by curtailing operations.

But with demand growth for zinc and other metals waning in China somewhat, with a notable downturn in new construction there among other things, you wonder if, or to what degree, Glencore is chasing down a declining market (in growth terms).

With this question in mind, we asked BMO analyst Jessica Fung her view on how much of a difference Glencore’s zinc cuts make to the zinc market. She responds, “Glencore’s cuts do matter.”

To give perspective, she puts the zinc cut in copper terms. “Another way I have been explaining the impact of these cuts is that if this were announced in the copper market, it would be equivalent to 1 million tonnes of mine supply, which would be a very big cut from a copper miner.”

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RPT-COLUMN-A role reversal for the ugly sisters, lead and zinc – by Andy Home (Reuters U.S. – October 2, 2015)

http://www.reuters.com/

Oct 2 (Reuters) – The commodities “supercycle”, it is now generally accepted, is over.

Slowdown in China, the lynchpin of the whole concept, is turning out to be a lot harder than anyone expected with industrial metal prices sliding across the board. But for some of them the “supercycle” was arguably over many years ago.

Consider the example of lead and zinc, often called sister metals because they tend to be found in the same deposits and are as often as not mined in tandem.

Zinc’s “supercycle” price peak of $4,580 per tonne, basis three-month metal on the London Metal Exchange (LME), came in November 2006 while lead’s peak of $3,890 followed a year later in October 2007.

Neither made it back to those lofty heights in the Chinese infrastructure-fuelled boom that followed the Global Financial Crisis of 2008-2009. And since then the two sisters have done little more than trudge sideways in well-worn ranges until joining in this year’s broader sell-off.

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Glencore inventory sale could sink world zinc prices further – by Eric Onstad (Reuter U.S. – September 18, 2015)

http://www.reuters.com/

LONDON, Sept 18 (Reuters) – Substantial amounts of base metal zinc could be released onto world markets, weighing further on fast falling prices, as major producer Glencore implements a plan to liquidate some of its commodity inventories to help pay off debt.

The overhang of inventories in London Metal Exchange (LME) storage facilities, which has surged more than 40 percent since early August, has wrong-footed investors who had earlier this year targeted zinc as a top bet in metals due to closures of big mines that would create shortages.

Zinc, mainly used to galvanize steel to protect against rust in autos and construction, has slumped from being one of the best performing industrial metals earlier in the year to one of the worst due to the inventory change.

“It’s been a big shock to the market, this massive flood into the LME warehouses,” said Stephen Briggs, metals strategist at BNP Paribas.

But mining and trading company Glencore may add further to a plentiful supply situation after announcing a raft of measures to slash its net debt of $30 billion.

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Friedland: Mining companies ‘priced for Armageddon’ – by Lesley Stokes (Northern Miner – August 18, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

VANCOUVER — The vanguard executive chairman of Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF), Robert Friedland, took to the stage at the Sprott Natural Resource Symposium in Vancouver in late July, and delivered a relaxed speech discussing why he believes copper is set to rebound in two to three years.

“The further you push the price down, the higher it’ll bounce,” he said, predicting that higher environmental standards in China may strengthen the demand for copper, in tow with other “green” metals such as zinc, platinum and palladium.

He said that China will “try very hard” to double its growth to 6% or 7% through sustainable development, but he’s dubious whether the current world supply will match the metal needed to clean China’s air and fertilize its soils.

He describes many of the great copper mines as “little old ladies, kept on life support and waiting to die,” whereas others are so low grade “they’re practically mining air” and kept alive by favourable currency exchange rates.

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Zinc, nickel add a little lustre to Diggers – by Tess Ingram (Sydney Morning Herald – August 4, 2015)

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

As Diggers and Dealers delegates rolled in for day two of the annual mining conference, heavy heads from a late night in Kalgoorlie’s famous watering holes were unlikely to be relieved by an injection of optimism.

Commodity prices are down across the board. Since last year’s conference, base metals are down between 20 and 40 per cent, while gold is down about 15 per cent and iron ore has plummeted nearly 50 per cent during the year.

Australian domiciled gold producers, buoyed by the falling local currency, are a shining centre of attention at the conference but there are some other bright spots.

Despite a recent price slide that has forced some analysts to downgrade their price forecasts, zinc-focused companies at the conference attracted a considerable level of interest from analysts and investors at their marquee booths.

Zinc for delivery in three months has fallen to around $US1893 a metric ton on the London Metal Exchange.

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Some Robert Friedland riffs: The “miner’s miner” talks commodities, jurisdictions, markets and majors – by Greg Klein (Resource Clips – July 29, 2015)

http://resourceclips.com/

Getting back to commodities, he argues that Saudis killed the Alberta oilsands
and devastated U.S. shale “but no one can do that to copper.” Friedland
dismisses some copper miners as “little old ladies waiting to die,” saying
some grades fall so low that companies are “practically mining air.”
(Robert Freidland)

A “miner’s miner” was how Rick Rule introduced Robert Friedland. The founder and executive chairperson of Ivanhoe Mines TSX:IVN also serves as executive chair of the Sprott-Stansberry Natural Resource Symposium in Vancouver, where he delivered the opening day’s keynote speech on July 28. That was the original plan, anyway. Instead, a relaxed-looking Friedland eschewed a script to sit back and, in response to questions posed by Rule, discuss commodities, jurisdictional risk, markets and the problem with the majors.

Friedland’s favourite metals? They’re currently copper, platinum, palladium and zinc—stuff for which he sees bright futures and, not surprisingly, the stuff he’s currently pursuing. He also likes diamonds but considers himself “an agnostic on gold.”

“Copper is the metal if you believe in human advancement,” Friedland says. “Gold is the opposite.” Meanwhile this market has either hit bottom “or it’s the end of the world.” He says he’s never seen such a severe devaluation, with stocks “priced for Armageddon.”

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Selwyn-Chihong Mining eyes upgrade to N.W.T. road to Yukon mine – by Guy Quenneville (CBC News North – July 7, 2015)

http://www.cbc.ca/news/canada/north

‘It’s our only viable access route into the mine site,’ says Doug Reeve

A Chinese-owned company that’s developing a Yukon lead-zinc mining project wants to spend between $35 million and $45 million upgrading a crucial N.W.T. access road to the mine.

Selwyn-Chihong Mining, a Canadian subsidiary of Yunnan Chihong Zinc and Germanium Co., is applying to the Mackenzie Valley Land and Water Board for permits that would allow the company to convert a narrow and windy access road cutting through multiple areas of the N.W.T. into a two-lane service road capable of handling regular and heavy truckloads during the mine’s construction and operation.

“It’s our only viable access route into the mine site,” said Doug Reeve, Selwyn-Chihong’s manager of permitting. “If we don’t have that permitted, it will be very difficult, of course, to develop a mine site.”

The 79-kilometre gravel road was originally built in the late 1970s to access mineral deposits but fell into disrepair until Selwyn-Chihong spent around $13.5 million in 2014 to install bridges and convert the road into a single-lane all-season road.

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Building permit approved for $50M underground mine in B.C. – by Dirk Meissner (Canadian Press/CTV News – June 29, 2015)

http://vancouverisland.ctvnews.ca/

VICTORIA – British Columbia has approved a construction permit for a proposed $50-million silver, lead and zinc mine just south of the Yukon border after the project’s economic and environmental plans helped win support from an area First Nation.

Mines Minister Bill Bennett said Monday that the underground Silvertip mine could create up to 200 jobs and could be in operation for more than 20 years. Vancouver-based JDS Silver Inc., said once it receives the necessary permits, it plans to operate about 150 days a year and shut down in the winter months.

The mine, located about 90 kilometres southwest of Watson Lake, Yukon, has been of interest to several mining proposals since the 1950s due to the high-grade lead-silver-zinc deposit.

Bennett said the company can immediately start building and that the operation will produce a smaller environmental footprint than other larger mines in B.C.’s northwest.

He said it will be an underground operation so much of its ore tailings will be stored below ground.

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RPT-COLUMN-Zinc’s infinitely stretchable deficit deadline – by Andy Home (Reuters U.S. – June 12, 2015)

http://www.reuters.com/

(Reuters) – All mining activities at the giant Century zinc mine in Australia will have ceased by the end of this month.

News that will be greeted with relief by believers in the zinc deficit story, who have had to watch Century’s operator MMG push back the fateful closure date many times in the past.

Century has become totemic of zinc’s bull narrative of looming shortfall as some of the world’s biggest mines come to the end of their natural lives without obvious like-for-like replacements.

The resulting raw materials crunch, the bull argument runs, will force prices up to a level needed to incentivise new supply.

It’s a tantalising prospect for a market that has seen only fleeting rallies based on the unreliable signals coming from stock movements on the London Metal Exchange (LME).

Right now the price for three-month delivery on the LME is trading just above $2,100 per tonne, bang in the middle of the broad $1,800-2,400 range in which zinc has been trapped for the last three years.

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Belgium’s ‘mining Monaco’ looks fondly on anarchic past after Waterloo – by Barbara Lewis (Reuters U.S. – June 11, 2015)

http://www.reuters.com/

KELMIS, BELGIUM – As the field of Waterloo is dressed in battle colors to mark next week’s 200th anniversary, another corner of Belgium is preparing for a less warlike bicentenary.

In one of the more arcane consequences of the new European borders that followed Napoleon’s defeat outside Brussels, a tiny statelet was born. For a century after Waterloo, the square mile that diplomats named Neutral Moresnet, on the present-day Belgian-German border, thrived in a state of virtual anarchy.

Today’s inhabitants of what is now part of the Belgian town of Kelmis fondly recount a largely lawless but prosperous history of freewheeling independence and are gearing up for their own bicentenary celebrations next year.

“We are very proud of the town’s past, particularly its ability to manage its own economy,” said alderman Erik Janssen. “The history of Kelmis is a fundamental part of the history of Belgium.”

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Zinc price to struggle as more output, stocks expected – by Eric Onstad (Reuters Africa – June 4, 2015)

http://af.reuters.com/

LONDON, June 4 (Reuters) – Zinc prices are likely to struggle in the short term, weighed down by a more plentiful supply situation than forecast.

More inventories are due to move into LME warehouses while two mine operations will produce more than expected despite well-flagged closures, analysts and industry sources said.

Zinc is one of the best performing metals on the London Metal Exchange (LME) and has been a favourite of investors in recent years due to the prospect of shortages developing because of the shutdowns of major mines.

Benchmark LME zinc surged by a fifth during the six weeks to May 5, when it hit an eight-month peak of $2,404.50 a tonne, but has since given up about half of those gains.

Some analysts are concerned about more flows of inventories into LME warehouses after 36,400 tonnes arrived in Malaysian depots on May 19, the biggest one-day inflow in over a year.

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Nothing dull about zinc if supply falls – by Trevor Sykes (Australian Financial Review – June 1, 2015)

http://www.afr.com/

Zinc was the hot tip at the Resources Investment Symposium held in Broken Hill last week.

Probably a natural call given that Broken Hill is home to the greatest silver-lead-zinc mine the world has ever known.

In its 130-year life Broken Hill has produced total of 50 million tonnes of lead and zinc combined plus 100 million ounces of silver. It has been mined almost continuously over that time and still has a long life ahead at deeper levels and in exploiting remnant ore.

In his opening address at the symposium, Emeritus Professor Ian Plimer of the University of Melbourne noted that the market for mining shares had been slow and sluggish for the past four years.

He said: “This market will turn around when there is a fundamental commodity shortage and I think that commodity will be zinc. I think we will go into shortage in the first quarter of next year.” It was a big call, because as far as investors are concerned, zinc is the least sexy of all the major metals.

At various times, investors have been excited about diamonds, gold, copper, oil and nickel, but some minerals just don’t seem capable of arousing them. Mineral sands are a good example. Australia is rich in them, but the market is never much better than lukewarm.

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Dig Into New Jersey’s Mining History at Sterling Hill – by Brian Glaser (May 18, 2015)

http://baristanet.com/

http://sterlinghillminingmuseum.org/

New Jersey is famously The Garden State, but as far back as its Colonial days it also was a major North American mining center. The Sterling Hill Mining Museum, about an hour north of Essex County, lets families to dig into this important part of the state’s history.

Located in Ogdensburg, Sterling Hill is the site of a zinc mine that is one of the oldest in the U.S., operating from the early 1700’s until it closed in 1986. It was converted into a museum in 1990, and the good news is that it’s not just an abandoned hole in the ground you can walk through—the Sterling Hill folks converted the mine into a real museum and offer an experience that’s fun and educational.

Most days at 1pm, Sterling Hill offers a guided tour that’s 2-plus hours long and includes an exhibit of vintage mining equipment equipment and minerals from around the world, followed by a walk inside the actual mine—where it’s always a cool and comfy 56 degrees! (Group tours can be booked, too.)

The entrance to the mine immerses you in the sights, sounds and overall feel of NJ’s mining days, and the museum has historical equipment and mannequin miners set up in key points throughout the tunnels.

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