Australia billionaire mutual admiration society reaches new heights |
- Australia billionaire mutual admiration society reaches new heights
- Columbus Gold drops on new Montagne d'Or resource estimate
- Iron ore price: It's all about grade now
- Sibanye Gold fine-tunes details for Anglo’s platinum assets buyout
- Gold set for 2nd quarterly gain amid global tensions
- Venezuelan army said to have trespassed Guyanese border, attacked miners
| Australia billionaire mutual admiration society reaches new heights Posted: 30 Jun 2014 03:41 PM PDT These pages have given up on trying to follow the riches to riches rise of Gina Rinehart, Australia's wealthiest person and supreme queen of coal and iron ore. These days I pass on stories about the bitter family feud, the various lawsuits over royalties (is there an iron deposit in Western Australia that Rinehart does not believe belongs to Hancock?) or the campaign to split the country in two. My interest reached a high point (or nadir if you look at it that way) when the larger-than-life personality pissed off people on two continents with one sentence with her wish that Aussies would become more competitive and be happy with $2-a-day like those hardworking Africans. The fact that those weren't just off the cuff remarks, but part of a 10-minute prepared speech to the Sydney Mining Club, made me decide to let this ultra-rich pageant pass me by. But then I was alerted by a colleague in Australia to this little nugget. It's about mining innovation. Nothing controversial about that. In 2012 Rinehart set up a $50,000 prize for someone who "stands up for mining" and combats "far Left media attacks" on the industry. Australia must possess many worthy candidates for such a prize who could use the money to further the cause ($20k is for personal use, but the rest must be put to work the rules say). Not quite. The Telegraph reported this week that the lucky winner was Len Buckeridge, Australia's 17th richest person, with a family-controlled construction empire worth north of $2 billion. Mr Buckeridge received the award (and the cheque) late last year amid "stiff competition" during a special ceremony where he was praised for his "long-term contribution to the sector". He died from a suspected heart attack in March this year. Attached to an iron boulder in a square in her beloved Perth, is Rinehart's famous ode to mining; or temporary foreign workers or special economic zones or something. I leave you with her words (mine are failing me) Our Future The globe is sadly groaning with debt, poverty and strife  |
| Columbus Gold drops on new Montagne d'Or resource estimate Posted: 30 Jun 2014 03:34 PM PDT Columbus Gold (CVE:CGT) shares fell Monday after the company released a revised resource estimate for its Montagne d'Or gold deposit in French Guiana. The news disappointed investors, who actively dumped the Vancouver-based junior's stock. Shares in the company finished the day at 48 cents, down about 8%, after plunging to a low of 45 cents in heavy volumes during late afternoon trading. Columbus Gold commissioned the update for the deposit after saying in May that it suspected the initial resource estimate was materially overstated in terms of both grade and contained ounces. The company said at the time that the initial estimate, compiled by Coffey Mining in 2012, was found to contain "issues with respect to certain estimation methods" related to the inferred gold resource. The initial report used a cut-off grade of 0.3 grams per tonne yielding a total 5.37 million ounces of gold. The revised estimate, also prepared by Coffey Mining, shows a smaller inferred gold resource of 4.31 million inferred ounces of gold at a cut-off grade of 0.4 grams per tonne. |
| Iron ore price: It's all about grade now Posted: 30 Jun 2014 01:44 PM PDT Domestic supply can't be cut much further and Chinese steelmakers are demanding deeper discounts for lower grade imports
 Iron ore is down 30% this year and after a relatively quiet 2013, market volatility is back with a vengeance. The market was jolted on March 10 this year, when iron ore suffered the worst one-day decline since the 2008-2009 financial crisis, cratering 8.3% in a single session. The recovery from there was swift, but two months later the market was back in panic mode with a quick decline to double digits. Attempts to breach $100 have been unconvincing. On Monday benchmark Northern China 62% Fe imports gave up more than a percent, falling back to $93.80. That's down from a high of $158.90 in February. Long held assumptions about the direction and dynamics of the iron ore market are being tested. The rule of thumb for the industry was for a long time that $120 constitutes a price floor, because if the price stays below this level for too long Chinese miners drop out of the market. This floor has been regularly marked down and $100 seems to be the new consensus. Iron ore has never traded below $100 on a quarterly basis since 2009. So far that floor has held – the Q2 2014 average is $102.70. The outlook for the rest of the year is much murkier however. The wildcard again is domestic Chinese supply. China been trying to lessen its dependence on foreign ore for the years, artificially boosting domestic production of iron ore by restricting small blast furnaces' access to high-quality imports. Domestic output had grown at an almost as fast a rate as imports to peak at some 1.4 billion tonnes or roughly 600 million tonnes on a 62% basis. China's active program of shutting down excess steel capacity (60 million tonnes by end-2015) and consolidating miners have altered this picture considerably. Between 20% – 30% of mines in China have closed down, according to the China Metallurgical Mining Enterprise Association. According to Credit Suisse 62%-equivalent domestic production will decline 16% to 310 million tonnes this year and drop again in 2015 to 275 million tonnes. On the face of it a decline of that magnitude should create gaps for exporters from Africa, Brazil and Australia. But the Swiss investment bank has a number of caveats reports investment site Barron's and higher-cost Chinese iron ore producers are closing shop slower than expected Not all production is at "the top of the cost curve," some mines are captive to mills and state-owned mines "have an incentive structure that rests on more than short-term commercial conditions." On top of that says Credit Suisse, Chinese miners enjoy flexible costs with some local governments already reducing taxes for some miners. Despite the downturn domestic expansions are still proceeding with fixed asset investment in Chinese iron ore mining is up 15% this year. If local production is staying relatively robust supply would have to be cut somewhere else. But Chinese steelmakers prefer imports for other reasons. Because the ore is of such a low quality – falling from an average above 30% to a only 21.5% iron content – the bulk of Chinese fines require a process called sintering before being fed into blast furnaces. Sintering adds to the environmental impact and costs which does not fit well with Beijing's war on pollution and plans to eliminate overproduction in the steel sector. China's steelmakers have been substituting domestic supply with so-called "lump" ore from Australian, South African and South American producers that lower costs and cut pollution by reducing the need for sintering. Premiums for high-quality lump and pellets over fines reached as much as $17–$18 a tonne and $42 a tonne respectively earlier this year. A more recent development is the widening gap between different quality fines: 65% fines at Qingdao fetches $103 while Tianjin 58% goes for $26 a tonne less. The discount to 62% has doubled from around $8 at the start of the year to $16 today. MVS, a research house, is quoted in the FT as saying the "quality spread" has appeared because "there is currently a lot of lower grade product in the market due to the aggressive expansion plans of Fortescue Metals Group." World number four producer FMG will hit its target capacity of 155 million tonnes per year in 2014, delivering an additional 51 million tonnes in 2014. Another factor is a lack of high-grade Chinese concentrate to mix with lower quality supply, which has forced steelmakers to move to opt for high grade ore. The move to higher grade ore may also explain the interest in Guinea's giant Simandou north deposit despite the eye-watering capex required. Simandou is as easily exploitable as Australia's Pilbara region and top producer Vale's Brazilian home base. Better still, grades are 65%-plus. |
| Sibanye Gold fine-tunes details for Anglo’s platinum assets buyout Posted: 30 Jun 2014 11:58 AM PDT
South Africa's top gold producer, Sibanye Gold (NYSE:SBGL) is going ahead with plans to expand into the country's platinum sector before the end of the year, especially now that Anglo American Platinum (Amplats) has officially put up its mines for sale. Chief executive, Neal Froneman, told Ft.com Monday (subs. required) the company is "positive and bullish" about platinum as a commodity, and its supply and demand fundamentals. While he declined to be explicit about which assets Sibanye is interested in, market speculation about the miner buying off the three mines in the platinum belt operated by Anglo, has been mounting since early this year. Back in April, the gold firm's spokesperson James Wellsted acknolewged the company had interest in the commodity, but added there wasn't anything specific on the table at that moment. Froneman sees similarities between platinum operations and mature gold mines he has turned round since Sibanye was formed in late 2012, by Gold Fields. The company has thrived relative to its competitors. Over the last year the company has increased 64% to about $9.14 per share.
But Sibanye has its own challenges. The gold miner recently warned over its earnings, saying that it expects at least 20% decline in its earnings per share in the six months ending June 2014. The company has taken aging mines and restructured operations to make them more cost efficient. It has also negotiated wage agreements to limit disruption. Sibanye operates the Kloof, Driefontein and Beatrix gold mines as well as various service companies. |
| Gold set for 2nd quarterly gain amid global tensions Posted: 30 Jun 2014 11:10 AM PDT Gold, having risen three straight weeks, appears set for a second consecutive quarterly gain with violence in Iraq and Ukraine continuing to buttress demand. U.S. jobs data and a European Central Bank meeting this week may offer hints about future monetary stimulus strategy, which could affect investor sentiment. "The geopolitical factor is one that it's not easy to predict," Societe Generale analyst Robin Bhar said, "and that could keep gold above $1,300 just on its own." On Sunday, Iraqi army tanks and armoured vehicles arrived in the northern city of Tikrit, Reuters reported. It was the second day of fighting to retake the city from Sunni militants occupying large parts of the country. In Ukraine the same day, forces loyal to Kiev battled pro-Russian separatists around the city of Slaviansk, Reuters said. The fighting dashed a truce that was supposed to last until Monday night. Meanwhile, the US dollar struggled to rise relative to a basket of other currencies early Monday, ahead of US employment data including June non-farm payrolls due out Thursday. That is a day earlier than usual owing to the July 4 holiday. Gold futures for August delivery traded Monday morning at $1,320.80 per ounce on the Comex division of the New York Mercantile Exchange, roughly on par with $1,320 seen Friday. According to Commodity Futures Trading Commission data released after the market closed Friday, hedge funds and other large gold investors added a record amount of ounces to their bullish positions in the week to June 24. Amid political or financial turmoil, market participants tend to buy gold, seen as a safe-haven investment. Precious metals have outperformed other commodities this year with double digit gains for gold and palladium and a strong performance for silver and platinum. |
| Venezuelan army said to have trespassed Guyanese border, attacked miners Posted: 30 Jun 2014 10:18 AM PDT  Venezuelan soldiers stand guard over illegal gold prospectors. Members of the Venezuelan army allegedly crossed over to Guyana on Friday afternoon and assaulted a group of illegal local miners operating by the Yarakita River, near the border between the countries. According to Stabroek News the civilians attacked, which are part of an illicit gold mining and smuggling network, failed to pay the soldiers a periodical fee in exchange for them turning a blind eye to illegal mining on Venezuelan territory. This is not the first time local press reports clashes between Venezuelans and Guyanese people. In 2007, Venezuelan soldiers were accused of blowing up two Guyanese gold-mining dredges on a river near the border between the two countries. Illegal gold mining is a longstanding problem in the Amazon that increased in recent years when gold prices were soaring. Sadly, the illicit activity has become the "new cocaine" of Latin America, with several neighbouring countries, including Brazil and Colombia, known to have miners frequently crossing into Venezuela. Nationwide, illegal mining in Venezuela is thought to produce about 12 tons a year of gold, or roughly double the amount produced by legal, regulated miners in 2013. Foreign and local groups estimate that there are as many as 4,000 illegal miners working in Venezuela, which often clash with indigenous groups and are knocking the government's efforts to stop deforestation. Image: Screenshot from Al Jazeera's documentary via YouTube. |
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