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Zinc, Lead and Tin

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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Bathurst Mining Camp construction moves forward in New Brunswick – by DCN NEWS SERVICES (Daily Commerical News – May 13, 2015)

http://dailycommercialnews.com/

BATHURST, N.B.—A Vancouver-based company is moving forward with construction and re-start activities at its mine and mill complex located in the Bathurst Mining Camp of northeastern New Brunswick.

“As we are about to begin production at our Caribou Mine here in the Bathurst Mining Camp, we are very appreciative of the support for the new fiber-optic data and communications infrastructure,” said Mark Cruise, president and CEO of Trevali Mining Corp.

“The initiative allowed us to maintain our operational schedule for the mine where about 300 people are currently employed.”

Trevali is a zinc-focused, base metals mining company, which owns the Caribou mine and mill, the Halfmile mine and Stratmat deposit all located in the Bathurst Mining Camp.

The company is currently advancing its 3,000 tonne per day Caribou mill complex and mine, which is located 45 kilometres (km) west of Bathurst, in Restigouche County.

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Zinc bull story to keep rolling – by Kip Keen (Mineweb.com – April 22, 2015)

http://www.mineweb.com/

Base metal is full of surprises (and not always good).

Zinc has started to show signs of life again. In recent weeks the spot price of zinc crossed over $1/lb, up from a one-year low around 0.90/lb.

It seems the prospect of a growing zinc deficit is back in play. The notion of zinc deficit, long forecast by analysts and base metal miners, has already created one false dawn.

With such a deficit in mind, zinc fever caught the market in late 2013 and persisted to mid 2014, driving the price from near $0.80/lb to around C$1.10. LME zinc stocks had peaked after all and begun to fall. Yet eventually so did the price of zinc.

The market realised it may have gushed and rushed on zinc a little early. There was the fact that the stocks were really quite high to begin with, so they would take time to shrink.

Indeed they’re still shrinking and are about half the early 2013 peak. So zinc came back down to earth, plumbing $0.90 this year. Now, the question is, with zinc surging again is this time any different?

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Yukon Zinc granted creditor protection after mine closure (CBC News North – March 19, 2015)

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

Yukon Conservation Society concerned about $3 million environmental security owed by Wolverine Mine

Yukon Zinc has been granted creditor protection by the Supreme Court of British Columbia, nearly three months after closing the Wolverine Mine, located north of Watson Lake.

The company owes more than $646 million to hundreds of creditors, but documents listed with PricewaterhouseCoopers Inc. show that most of the debt is owed to its parent company, JinDui Cheng Canada Resource Corporation Limited, which has a head office in Vancouver.

About $50 million is owed to businesses in and outside Yukon including Alkan Air, Air North, P.S. Sidhu Trucking, Northern Industrial Sales and Small’s Expediting Services. The Companies’ Creditors Arrangement Act, which Yukon Zinc is protected under, is a federal law that basically gives a company time to try to work out its financial difficulties with its creditors.

In this situation, Yukon Zinc says its creditors are required to continuing providing goods and services to the mine in accordance with existing agreements. Invoices after March 13 will be paid in full by the company, but invoices before that date “cannot be paid.”

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PDAC 2015: Scotiabank’s Patricia Mohr predicts only ‘modest’ recovery (Northern Miner – March 17, 2015)

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

Zinc is Mohr’s number one pick, and she forecasts prices will move up to US$1.50 per lb. in 2016.
Copper, she says, will remain flat at about US$2.75 per lb. for the next two years, but longer
term should reach US$3.50 per lb. She estimates the nickel price will reach about US$10.55 per lb.
in 2016. “I think nickel will do exceptionally well,” she predicts, “and Sudbury is going to come
back into its own in 2016.” (Patricia Mohr, Scotiabank Vice President Economics)

Commodity prices as of January this year have fallen below the previous recessionary lows of early 2009, and are now at levels not seen since January 2007, Patricia Mohr, vice president economics at Scotiabank, said during a presentation at the recent Prospectors & Developers Association of Canada conference in Toronto.

China’s massive infrastructure spending program helped lift commodity prices in 2009, but the latest dip in prices, Mohr says, is mostly due to “a fight for market share” in a very lackluster global economy. The world is entering its fourth year when global GDP growth has been just a little over 3% per annum, she warns.

“I’m beginning to realize that 3% per annum — while it is enough to turn over the global economy — it’s not high enough to really put any momentum behind global commodity prices and markets,” she says. “And when you get some capacity expansion, for example, such as in copper, and massive expansion in iron ore, and huge expansion in oil production from U.S. shales, all of this is occurring in a very lackluster market around the world, and leading prices lower.”

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Anglo’s zinc loss now Vedanta’s sweet gain – by Martin Creamer (MiningWeekly.com – February 25, 2015)

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

JOHANNESBURG (miningweekly.com) – London-listed diversified mining company Vedanta Resources has found itself in a sweet spot as the owner of the zinc assets that Anglo American saw fit to sell off four years ago, when China seemed in perpetual oversupply mode and small operations abounded.

But China is no longer supplying as it did in the past and there have been anticipatory price improvements over the last eight months on the expectation that zinc supply is leaving the market.
The only other London Metal Exchange commodity that is approaching zinc’s current price firmness is aluminium, also because of market pessimism engulfing it for so long.

Meanwhile, the reserves of Anglo’s former zinc assets have been significantly extended under Vedanta’s management, to a point where the India-rooted company will have full payback of its original investment even before the deal’s key Gamsberg asset comes into play.

Vedanta bought Anglo Zinc for $1 338-million in May 2010 and has been investing in underground and near-pit development since 2012. The additional life it has given to the Black Mountain mine in South Africa’s Northern Cape and the Skorpion operations in Namibia has added significant value.

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Company shuts Ross River area mine, lays off workers – by Chuck Tobin (Whitehorse Daily Star – January 26, 2015)

http://www.whitehorsestar.com/

The Yukon Zinc Corp. has shut down its Wolverine Mine southeast of Ross River, resulting in layoff notices for most of its workforce.

The Yukon Zinc Corp. has shut down its Wolverine Mine southeast of Ross River, resulting in layoff notices for most of its workforce. Company spokesman Alex Wu told the Star today operations were terminated last Thursday because of instability in the mineral markets, particularly the price of silver.

Wu could not confirm the exact number of employees affected but expected Yukon Zinc would have an official statement in the next couple of days. The Chinese-owned company is calling it a temporary, three-month shutdown at this point, he said.

“We will see what the situation is in the next couple of months and make a decision to see if there is an opportunity to start up or keep it closed for a bit longer,” Wu said. “We were trying to keep it going longer, but it is down to the point where it is pretty difficult to keep things going.”

Wu said the company has been in contact with its suppliers and is working on new plans to raise the financing to address outstanding debt.

A crew has been kept on to look after care and maintenance of the mine site and mill during the shutdown, he said. Watson Lake Mayor Richard Durocher said this morning he’s already seeing the trickle-down effect in the Yukon’s third-largest community of approximately 1,500.

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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.

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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.

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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?”

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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.

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