BHP's potash priority

BHP's potash priority
Green activist fights for BHP board seat against management's will
Suncor to splash out on capital spending in 2014
UK to stop funding coal power in developing countries
We won't let the Iranians pull a fast one: John Kerry
Gold price caught in taper tantrum

Posted: 20 Nov 2013 10:50 PM PST

Potash is to become the 'fifth pillar' of BHP's operations as global demand is expected to increase 2%-3% each year until 2030, CEO Andrew Mackenzie told shareholders at the company's AGM in Perth on Thursday.

"The growth will be driven by a rising population and greater economic prosperity, which will change the patterns of food consumption, requiring higher yields from increasingly constrained arable land."

"Our continued investment in potash, at an average annual spend of $800-million, will make sure we are ready to take advantage of this opportunity to add to shareholder returns."

BHP's massive Jansen project in the Canadian province of Saskatchewan has an expected output of 8 million tonnes a year of potash and a 70-year mine life.

The other four pillars of BHP's business are coal, copper, iron ore and petroleum.

Green activist fights for BHP board seat against management's will

Posted: 20 Nov 2013 05:44 PM PST

Former coal industry executive and current environmental activist Ian Dunlop will find out Thursday if his bid to become a board member of the world's largest miner was successful.

BHP Billiton's AGM meeting Thursday in Perth includes a vote by shareholders on whether or not Dunlop may serve on the company's executive.

Dunlop wants to tackle climate change, and he thinks influencing BHP policy from within is one effective way of doing this.

"The sort of strategic understanding and perspectives on [climate change] on the current board are not adequate to handle this problem," said Dunlop.

"Therefore I think some wider perspectives are needed and I think I can provide that."

Dunlop was formerly the head of the Australian Coal Association and a long-time Shell employee.

Last month BHP urged shareholders to vote against Dunlop's ascension to the board.

Suncor to splash out on capital spending in 2014

Posted: 20 Nov 2013 05:16 PM PST

Canada's oil giant Suncor Energy has allocated $7.8 billion for capital spending in 2014, the company announced on Wednesday. Approximately $4.2 billion of that will go towards growth projects.

That's a half-billion dollar increase on last year's budget and $1.1 billion increase since 2010.

Suncor, Canada's largest energy company, says $1.9 billion has been earmarked for the Fort Hills joint venture and expansion initiatives including the MacKay River phase two.

The company approved the $13.5 billion Fort Hills project last month and holds a 40% interest in the bitumen mine.

"Our 2014 capital plan demonstrates our continued commitment to capital discipline," CEO Steve Williams noted in a statement. "As evidenced by our debottlenecking initiatives and the recent Fort Hills project sanction, we will be diligent in pursuing only those projects we believe will deliver long-term shareholder value. This approach applies not only to how we view oil sands investments, but also to other opportunities in our rich suite of growth projects."

Suncor also announced its 2014 production plans: Between 565,000 and 610,000 barrels of oil per day. Total oil production year-over-year is expected to rise by 10%.

UK to stop funding coal power in developing countries

Posted: 20 Nov 2013 03:56 PM PST

The UK has announced that it will not be funding any new coal-fired power plants in developing countries. Speaking at the United Nations climate talks in Warsaw on Wednesday, energy secretary Ed Davey said that it was "illogical" for developed countries to decarbonize their energy sectors while funding coal power abroad.

"It undermines global efforts to prevent dangerous climate change and stores up a future financial time bomb for those countries [where they are built]," Davey said as reported earlier by MINING.com.

The UK is not alone in taking money out of coal. The US and several other European countries have also made the pledge; Germany and Japan have not.

It's been a tough couple of weeks for the coal industry as talks in Warsaw progressed. On Monday UN climate chief Christina Figueres said that that "most existing coal reserves will have to stay in the ground."

According to the Phys.org, coal accounted for 44% of CO2 emissions in 2011. The International Energy Agency says it provides 40% of the world's electricity.

We won't let the Iranians pull a fast one: John Kerry

Posted: 20 Nov 2013 03:43 PM PST

In a bid to appease his foreign and domestic critics, US Secretary of State John Kerry promised not to let a deal with Iran become a time-buying cover for Iran's nuclear ambitions.

"We will not allow this agreement, should it be reached … to buy time or to allow for the acceptance of an agreement that does not properly address our core, fundamental concerns," said Kerry on Wednesday in Geneva.

The diplomatic talks are part of an ongoing effort by Western powers to limit Iran's domestic uranium enrichment capabilities. In return for Iranian cooperation, the West would relax the heavy economic sanctions that have crippled Iran's economy in recent years.

Kerry said that the negotiations, which may be nearing conclusion, are the "best chance in a decade … to halt progress and roll back Iran's program."

US 'allies' Saudi Arabia and Israeli, however, remain sharply opposed to the current deal, claiming that Iranian domestic uranium enrichment must be terminated, not only limited.

Israeli Prime Minister Benjamin Netanyahu has said that his country will consider a preemptive strike on Iranian nuclear facilities if diplomacy fails to prevent Iran from developing nukes.

A number of US lawmakers also fear that the diplomatic solution currently on offer would return Iran's economy to health without sufficiently limiting Iran's enrichment capability.

Gold price caught in taper tantrum

Posted: 20 Nov 2013 03:30 PM PST

The gold price on Wednesday slumped to levels last seen in July, dropping more than $30 an ounce or 2.5% to a day low of $1,240.20 after comments from members of the the US Federal Reserve put a quick end to the central bank's monetary stimulus program back on the table.

Minutes from the US Federal Open Market Committee's end-October meeting released on Wednesday coupled with comments made by Fed Chairman Ben Bernanke and St. Louis Fed President James Bullard indicated that cuts to the quantitative easing program could come as soon as December.

The minutes showed that nominee chair Janet Yellen, who during nomination hearings last week was broadly supportive of the Fed's quantitative easing (QE) program, may be in a minority when it comes to deferring any tapering of the $85 billion being pumped into financial markets each month.

Gold was also hurt by data showing US consumer price inflation falling to 1.0% year over year in October from September's 1.2% rate, well below the level the Fed considers a problem.

Apart from the relatively brief deflationary period in the aftermath of the 2008-2009 financial crisis, US inflation is now the lowest in more than 45 years.

The money printing to the tune of more than $9 trillion in the US and similar action in Japan, Europe and elsewhere following the financial crisis have been a massive boost for gold.

Gold was trading around $830 an ounce before Bernanke announced Q1 in November 2008.

All the easy money sloshing around on financial markets burnished bullion's reputation as a hedge against inflation and as a storer of wealth amid the debasement of paper currencies.

But with inflation showing few signs of re-emerging in developed economies and the dollar strengthening, important factors stopping the gold price from sliding lower have now been removed from the equation.

Gold is down 26% since the start of the year and looks set to end its unbroken 12-year bull run in 2013.

Image by Javier Cabrio.

BHP's potash priority

BHP's potash priority

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