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The misery only gets worse for Barrick Gold – by Darcy Keith (Globe and Mail – June 26, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The misery at Barrick Gold Corp. is only getting worse, with the stock today sinking to its lowest level in more than two decades amid plunging bullion prices and as Credit Suisse backed away from an earlier gutsy recommendation to buy its beaten-down shares.

Analyst Anita Soni downgraded Barrick to “neutral” from “outperform,” and dramatically cut her price target, as Credit Suisse lowered its price forecasts for gold. It now sees bullion averaging $1,452 (U.S.) an ounce in 2013 and $1,390 in 2014, down from earlier forecasts of $1,580 from $1,500, respectively.

But Ms. Soni also made clear it’s not just the gold price that is hurting the outlook on Barrick, but rather a “confluence” of factors that also includes uncertainty over the Pascua-Lama project, high debt levels relative to peers, and potential write-downs. These “in isolation would likely have been weathered, but in combination reduces the risk/reward profile for the company.”

“We are reducing our rating until the company provides clarity on the path for Pascua and for handling asset sales and its financial leverage,” Ms. Soni said. She expects Barrick will provide some clarity on Pascua-Lama, located on the Chilean-Argentian border, before third-quarter results are released in late October.

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McGuinty’s green-energy ‘vision’ begins to fade – by Konrad Yakabuski (Globe and Mail – June 27, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Ontario Energy Minister Bob Chiarelli tried to put a happy face on last week’s rejigging of the province’s massive renewable energy contract with a Samsung-led Korean consortium. Scaling back the original $9.7-billion deal struck in 2010 to $6-billion was supposed to signal Premier Kathleen Wynne’s determination to inject a measure of sanity into the green energy policies she inherited from Dalton McGuinty and his overzealous electricity czar, George Smitherman.

“With this updated agreement, we’ll continue to create good jobs, while maintaining Ontario’s commitment to clean, renewable energy,” Mr. Chiarelli insisted.

He boasted that the downsized 20-year contract, under which Samsung will produce about 1,400 megawatts of wind and solar power instead of 2,500 MW, represents a $24 reduction on the average annual residential electricity bill. Considering that the average Ontario consumer paid more than $1,700 for electricity in 2012, this wouldn’t be much to get excited about, even if it actually resulted in a 1.4 per cent cut on their power bill.

But Ontarians have only begun to pay for the the green energy “vision” of Mr. McGuinty and Mr. Smitherman. Electricity rates are forecast to rise by nearly 50 per cent as the government moves toward its target of adding 10,700 MW of renewable power to the grid.

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Mining Interrupted: CBC Thunder Bay’s Lisa Laco interviews Northern Miner’s John Cummings about Ring of Fire (June 26, 2013)

http://www.cbc.ca/superiormorning/ Host Lisa Laco’s morning radio show Superior Morning highlights what’s happening now in Thunder Bay and Northwestern Ontario. We’ll find out what a mining analyst John Cumming, editor of the Northern Miner, has to say about Cliff’s announcement that it’s suspending work on its Ring of Fire project. And why he thinks the perceived …

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Interview: Commodity ‘Super-cycle’ Suspended, Not Ending: Head Of Global Mining Group Fasken Martineau – by Alex Létourneau (Kitco News – June 26, 2013)

http://www.kitco.com/

(Kitco News) – Another tough day at the office for metals continues to fuel questions about whether or not the “commodity super-cycle” over the last decade is coming to an end.

Driven largely by Chinese appetite for commodities, the 2000s saw a commodities boom with both precious and base metals prices rising to record highs.

With sharp drops across the metals board in the last three months, some analysts have begun to believe this commodities boom, dubbed the “commodities super-cycle,” is at an end.

John Turner, partner and head of Global Mining Group with international business law firm Fasken Martineau, does not believe the super-cycle is over, but simply stalled.

“I don’t think it’s come to an end — there’s obviously a big suspension but China’s still buying,” Turner said to Kitco News in a telephone interview. “In a sense you’re taking a view on China and a lot of the commodities, maybe slightly less so on the gold side, but I do think there’s still a lot of demand in China, India and other places.

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Bears ride end of commodities supercycle – by Jack Farchy and Javier Blas (Financial Times – June 26, 2013)

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

The commodities “supercycle” is dead. If anyone was still in doubt about whether the era of ever-rising prices driven by rapid Chinese growth was over, events of the past week have surely dispelled it.

The dollar rally after the Federal Reserve’s hints about tapering its “quantitative easing” programme, together with fears about a liquidity crunch in China, have sent a ripple of fear through the commodities industry.

So what should investors do about it? The answer may be less obvious than it seems. Most commodity prices have already fallen dramatically. Since their respective peaks in 2011, copper prices are down 35 per cent, iron ore prices have fallen 40 per cent, and gold has tumbled 36 per cent.

“People have generally been positioned for the slowdown in materials demand,” says Kamal Naqvi, head of commodity sales at Credit Suisse. “But we’re getting towards the end of that particular trade. For metals to be a conviction short from here, clients are waiting on confirmation that demand is worse and/or that supply is better than people have been factoring in.”
The shares of commodity producers have been under even more severe pressure. Anglo American shares are down 64 per cent from their 2011 peak; Vale is 45 per cent lower; and Kazakhmys has lost 85 per cent.

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Fugitive financier Marc Rich dies – by John Aglionby and James Shotter (Financial Times – June 26, 2013)

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

Marc Rich, the colourful and controversial commodities trader and founder of Glencore who fled the US to avoid federal indictments, has died in Switzerland aged 78.

“Marc Rich died in Lucerne in a hospital as a result of a brain stroke,” said Christian König of the Marc Rich Group in a statement. He is expected to be buried in Tel Aviv on Thursday.

Ivan Glasenberg, the chief executive of Glencore Xstrata, said: “We are saddened to hear of the death of Marc. He was a friend and one of the great pioneers of the commodities trading industry, founding the company that became Glencore. Our deepest sympathies and condolences are with his family at this time.”

Rich, born in Antwerp, Belgium, was an oil trader who fled to Switzerland in 1983 hours before being indicted on more than 50 charges of trading with Iran during an embargo, wire fraud, racketeering and evading more than $48m in income taxes – at the time the largest tax evasion case in US history.

He remained one of the US’s most wanted fugitives until Bill Clinton pardoned him on his last day as US president in January 2001. Mr Clinton said such cases should be settled in civil not criminal courts and also cited clemency pleas from Israeli officials, including Ehud Barak, the then prime minister.

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Mining’s damaging ‘blame game’ destroying South Africa – Xstrata Alloys – by Martin Creamer (MiningWeekly.com – June 26, 2013)

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

JOHANNESBURG (miningweekly.com) – The South African economy could no longer afford the damaging “blame game” under way in the crucial mining sector, which needed to take urgent steps to prepare for the inevitable next commodities boom, Xstrata Alloys executive director Mike Rossouw said on Wednesday.

Speaking during a national radio debate on SAfm’s AMLive, hosted by Dhashen Moodley, Rossouw described South Africa as being “100% dependent” on mining to grow and transform its economy in that the country’s secondary and tertiary sectors were totally mining dependent in some cases and largely dependent in all cases.

The current mining decline was worsening South Africa’s already negative balance of payments at a time when the country needed money to grow and transform.

“We really need to understand mining’s role as a dynamo of the South African economy,” Rossouw added, to support from former Anglo American South Africa head Kuseni Dlamini, who called for recognition to be given to the mining industry’s advances on virtually every single front.

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After Labor Strikes, What’s Next for Platinum? – Interview by Brian Sylvester (The Metals Report – June 25, 2013)

http://www.streetwisereports.com/

Violent South African mining labor strikes shocked the globe in 2012, but the resulting negotiations underway could create more stable supply flows in the long term—that’s how CPM Commodity Analyst Erica Rannestad sees it. In this interview with The Metals Report, Rannestad discusses the key developments that could signal a price rise and which producers could clean up big on high-priced PGMs.

The Metals Report: Erica, the platinum group metals (PGM) sector created a lot of buzz at the beginning of this year. What can investors expect in the coming 12 months?

Erica Rannestad: There’s going to be a lot of development in labor and wage negotiation structures in South Africa. It could potentially improve labor conditions in the platinum mining sector, which would provide more certainty about supply flows.

The PGM markets are highly concentrated, meaning that both supply and demand are heavily reliant on only a few sources. On the supply side, about 75% of platinum mine supply comes from South Africa.

These metals are primarily industrial commodities and their prices move in tandem with industrial activity, mostly in the auto sector. At present, there is weakness in platinum prices because demand from the European auto sector is weak and contracting. During the next 12–18 months, growth could improve in the European auto market, which would be positive for platinum prices.

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Insurgency threat may dim Mozambique’s shine for investors – by Marina Lopes and Pascal Fletcher (Reuters U.S. – June 20, 2013)

http://www.reuters.com/

MAPUTO/JOHANNESBURG – (Reuters) – An economic take-off in Mozambique driven by bumper coal and gas discoveries two decades after the end of a civil war is facing disruption from disgruntled former guerrillas who feel they have not benefited from the post-conflict dividend.

A public threat by the ex-rebel Renamo opposition party to paralyze central rail and road links has put the Frelimo government on alert and alarmed diplomats and investors.

A slide back into the kind of all-out war that crippled the former Portuguese southern African colony between 1975 and 1992 looks unlikely. Nevertheless, Mozambique’s rebirth as an attractive tourism and investment destination could lose some of its momentum after armed attacks in the last two months blamed on Renamo.

The raids in central Sofala province killed at least 11 soldiers and police and three civilians and came after Renamo leader Afonso Dhlakama returned with his civil war comrades to the Gorongosa jungle base where they operated in the 1980s.

“It does bring back all those fears of the war,” said Joseph Hanlon, a senior lecturer at Britain’s Open University and an expert on Mozambique.

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Dalton McGuinty was egregious, outlandish, disingenuous and outrageous – by Christie Blatchford (National Post – June 26, 2013)

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

In the immortal phrase of the fictional lawyer Jackie Chiles of Seinfeld fame, Dalton McGuinty was egregious, outlandish, disingenuous and outrageous.

The former Ontario premier was appearing for a second star turn Tuesday before the all-party legislative committee probing the gas plants fiasco of his government.

(The controversial plants in Oakville and Mississauga were abruptly cancelled, the latter announced as a Liberal party campaign promise, and the costs — at least $585-million is the best estimate — consistently downplayed and lowballed by the government.)

If possible, McGuinty the private citizen is more arrogant, less forthcoming and more hypocritical than the politician McGuinty. He was asked back in the wake of a withering report earlier this month from the province’s Information and Privacy Commissioner, Ann Cavoukian.

Sparked by a complaint from New Democrat MPP Peter Tabuns, who is also the most effective questioner on the committee, the probe revealed that senior political staff in Mr. McGuinty’s office were routinely deleting all emails in what she found was likely an attempt to avoid scrutiny.

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MINING’S ROLE IN SOCIETY – by Anglo American CEO Mark Cutifani (June 26, 2013)

http://www.angloamerican.com/

This speech was given to the Minerals Council of Australia, Canaberra on 26 June 2013.

Distinguished guests, Colleagues of the Minerals Council of Australia, Ladies and gentlemen. Good morning. Thank you for that introduction Mitch and for the opportunity to speak here today.

Now, some of you may be wondering about the photo behind me [see image below]. Before I explain, let me set a little bit of context.

Mining – In Our Global Context

In 2010 the global mining industry, including the quarrying and petroleum sectors, represented 11.5% of the world’s GDP, as measured by revenues from products sold. Based on experiences in mining jurisdictions, if we include payments to service and support industries, mining’s direct contribution to global economic activity is estimated to be around 21%. But we need to think about mining in a much broader context. We produce products that make the world work.

Fuel for energy generation, products that support construction and industrial processes and most other value creating activities, are simple examples of how we literally make the world go around. So, let me get back to that photo showing two cornfields, one using phosphate fertilisers and one without. Since the turn of the last century it is estimated that the products of mining have supported a more than 100% increase in agricultural production per area unit under cultivation.

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Mongolia risk to hurt growth even with Oyu Tolgoi start-up, election – by Terrence Edwards and Sonali Paul (Reuters India – June 26, 2013)

http://in.reuters.com/

ULAN BATOR/MELBOURNE, June 26 (Reuters) – Mongolia’s efforts to protect its mineral wealth have scared investors so much that not even the first exports from its biggest mine and the expected re-election this week of a president who wants foreign capital will turn sentiment around.

With the country’s economic growth heavily tied to its vast copper and coal resources, Mongolia should have been celebrating the first copper sales to China from the $6.2 billion Oyu Tolgoi mine.

Instead, the government twice this month told mine operator Rio Tinto to delay the first shipment, partly due to a dispute over the repatriation of profits. Some analysts said the holdup was also aimed at keeping a lid on nationalism ahead of the presidential vote on Wednesday.

Industry experts believe exports will start soon, but the delays follow a year in which Mongolia introduced draft legislation to tighten control over mining activity and limit foreign investment.

“Whilst the country has lots of resource potential and holds Oyu Tolgoi, a world-scale mine, there’s too much headline risk,” said Darko Kuzmanovic, a portfolio manager at Caledonia Investments, which holds global mining stocks but has steered clear of Mongolia-focused miners.

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Australia opposition says top priority to dump mine, carbon taxes – by Rob Taylor (Reuters India – June 26, 2013)

http://in.reuters.com/

CANBERRA – (Reuters) – Australia’s conservative opposition said its top priority if it wins elections in September will be to repeal taxes on mining profits and carbon, blaming both policies for stopping fresh investment in the vital resources sector.

Prime Minister Julia Gillard’s Labor government introduced a fixed carbon price about a year ago in a country with one of the world’s highest per capita levels of carbon emissions, with plans to transition to emissions trading from 2015.

The carbon scheme, along with a 30 percent tax on iron ore and coal mining profits, have been criticised by miners, who say it damages competitiveness and employment as Australia’s AAA-rated economy slows and China’s demand for minerals cools.

“Both the carbon tax and the mining tax are a drag on Australia’s energy and resources sector and make investments less attractive than investments in other countries,” opposition resources spokesman Ian Macfarlane told a mining conference.

Australian government data published last month said that A$150 billion ($139 billion) in planned resource projects had been delayed or cancelled since April 2012, as China’s economic slowdown weighs on decade-long mining boom.

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Quebec Environment Minister to refuse Strateco exploration permit – by Henry Lazenby (MiningWeekly.com – June 26, 2013)

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

TORONTO (miningweekly.com) – Explorer Strateco Resources on Tuesday said Quebec Sustainable Development, Environment, Wildlife and Parks Minister Yves-Francois Blanchet had served it with a notice indicating that he planned to “refuse to issue the permit for the Matoush underground exploration project” owing to “a lack of sufficient social acceptability”.

The notice gave Strateco 60 days in which to appeal the Minister’s intended refusal to issue the requested permit. The company in January filed a court order to force the Quebec government to make a decision on its exploration project in the province’s Otish Mountains.

On March 28, two months after Strateco filed the petition for mandamus, the Minister announced that no permits would be issued for uranium exploration and mining projects in Quebec until the Office of Public Hearings on the Environment, known by its French acronym Bape, had submitted its report on Quebec’s uranium industry.

The Minister specified, at the time, that the temporary moratorium, which could last for as long as 18 months or more, was applicable to Strateco. Strateco promptly reacted to what it termed an “illegal, abusive decision” taken by the Minister.

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The heat gets to Obama’s logic – by Terence Corcoran (National Post – June 26, 2013)

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

Baby, it’s hot out here.

With these unspoken words, President Barack Obama announced his climate action plan, a piece of political theatre as much as it was a stab at hard policy. In a sun-drenched space at Georgetown University, in typical 33 Celsius Washington summer temperatures, Mr. Obama played the scene for all it was worth.

Mr. Obama in fact opened his speech with these words: “And my first announcement today is that you should all take off your jackets. I’m going to do the same.” A century of presidential press conferences in typical steamy Washington conditions, and this may be the first in which a president took off his jacket and then, with painstakingly deliberate moves with a fat, white handkerchief, mopped his not-that-sweaty brow.

We’re down to our sleeves out here

Presidents don’t sweat, unless they’re under potential indictment, in a TV studio — or trying hard to beat out a propaganda theme on the perils of global warming and the need for dramatic policy action. Oddly, at 33 degrees and only 55% humidity, it wasn’t even that hot a day in the U.S. capitol, about average for June. It just needed to be seen to be really hot to make the president’s steamy policy rhetoric seem plausible, if not credible.

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