BHP hikes iron ore supply to oust China rivals |
- BHP hikes iron ore supply to oust China rivals
- Canadian oil sands economic impact highly overrated: poll
- Gold nudges up despite strong US jobs data
- Namibia advances plans of selling diamonds without De Beers
- Top South African miners leave the World Gold Council
- North River secures $12m to restart Namib mine, shares shoot up
| BHP hikes iron ore supply to oust China rivals Posted: 04 Jul 2014 12:54 PM PDT
 BHP Billiton (NYSE: BHP) (LON: BLT), the world's largest miner, is striving to increase its iron ore supply and so displace Chinese competitors, the company revealed this week as it announced having shipped its billionth tonne of the ore to Japan. The production hike, which comes despite iron ore prices having plunged earlier this year, is intended to solidify BHP's dominance by pushing higher-cost Chinese suppliers out of the market. The recent closing of a number of domestic Chinese producers suggests the Australian major's strategy is succeeding. Such high-cost producers have reacted slowly to the production ramp-up also being conducted by Rio Tinto (NYSE:RIO), Fortescue Metals (ASX:FMG) and Brazil's Vale (NYSE:VALE), Mike Henry, BHP's president of marketing, was quoted by The Sydney Morning Herald as saying. He described "a significant overhang of low-cost supply coming to market in the face of a slow but steady increase in demand," according to the daily. "So it's really important for the high-cost suppliers to shut in a reasonably efficient manner in the face of that – otherwise you just see a compounding of supply in the market." Iron ore prices are recovering as China, another key Asian market, shuts its high-cost mines and announces upbeat manufacturing data. After dipping to a two-year low of US$89 a tonne in June, the steel-making ingredient is now fetching $96 a tonne. While that still represents a 30% drop in value since the start of the year, it has many optimistic that the commodity may be entering a bullish phase. Billionth tonne The news came during a gathering of BHP's employees, customers and joint venture participants Wednesday at Western Australia's Port Hedland to celebrate the company's having shipped its billionth tonne of iron ore to Japan. "BHP Billiton shipped its first tonne of iron ore to Japan in 1966 and we are proud of the nation-building role we have helped play since that time," Jimmy Wilson, BHP president of iron ore, said in a statement. Since then, the Melbourne-based firm's iron ore production capacity has greatly expanded. It now stands at 220 million tonnes annually and is swelling, the company said. "We also owe much to Japan for their role in growing the iron ore industry in the Pilbara," Wilson said. Japanese demand for the metal, essential to the Asian country's high-tech steel industry, helped shape the manufacturing, technology and heavy industry sectors in the Western Australian region. Meanwhile, China is to receive its billionth tonne of iron ore from BHP later this year.  |
| Canadian oil sands economic impact highly overrated: poll Posted: 04 Jul 2014 10:06 AM PDT  Oil sands development in Northern Alberta. Most Canadians overvalue the contribution the oil sands industry make to the country's economy, finding it hard to believe it only contributes 2% to Canada's total Gross domestic Product (GDP), results of a recent poll published Friday show. According to the survey conducted by polling firm Environics for the environmental group Environmental Defence, 57% of Canadians think the industry's impact is larger than what Statistics Canada shows. The study found that 41% of Canadians think the oil sands contribution to the world's 11th largest economy is between 6 and 24 times higher than it actually is. Of those polled, 75% agree the country should shift its dependence on fossil fuels toward cleaner energy sources.  Source: Environmental Defence's poll, June 2014. "The numbers speak for themselves. Canadians are clearly ready for a safer, cleaner, more prosperous energy future," Tim Gray, executive director of Environmental Defence, said in a statement. "We are routinely told our economy will sputter, governments won't be able to balance budgets, and social services will have to be sacrificed if we don't triple the size of the tar sands as fast as possible," he added.  Source: Environmental Defence's poll, June 2014. The industry, expected to provide about $79 billion in government revenue over the next two decades, is possibly the most controversial subject in Canada these days. Companies trying to develop, transport and sell Alberta's crude have faced fierce opposition from environmental and aboriginal groups. Efforts to transport the oil to US markets through the proposed Keystone XL pipeline have been stalled by the US government, activists and the US Environmental Protection Agency. "The [oil sands] are not the primary driver of our economy," Gray insisted. "Their contribution is relatively small and certainly not sufficient to justify the risks of planned massive expansion," he said in the statement.  Source: Environmental Defence's poll, June 2014. Meanwhile, petroleum producers and Prime Minister Stephen Harper's Conservative government has been mounting a PR campaign —including its $24 million ad campaign in Washington— to build a better reputation for the billion dollar industry. According to the Federal government, companies plan to invest over US$610 billion (Cdn$650bn) in projects over the next decade. |
| Gold nudges up despite strong US jobs data Posted: 04 Jul 2014 10:05 AM PDT The price of gold rose on Friday, bolstered by mixed European shares and tensions in Iraq and Ukraine. But data indicating that the US economy is strengthening may soon reduce demand for the precious metal. US gold futures for August delivery gained 50 cents to $1,321.00 in London. Markets in the United States were closed for the Independence Day holiday. US jobs data released Thursday supplied evidence that the country's economy is growing, with the unemployment rate nearing a six-year low. The data, published a day earlier than usual due to the July 4 holiday, boosted the dollar and dampened investor interest in gold. Still, according to Reuters, gold appears poised to post its fifth straight weekly rise, albeit a small one. |
| Namibia advances plans of selling diamonds without De Beers Posted: 04 Jul 2014 07:36 AM PDT  A diamond polisher works on a gem in a diamond-polishing factory at NamCot Diamonds in Windhoek, Namibia. The government of Namibia confirmed Friday it is going ahead with its announced plans of setting up a company that will separately sell part of the diamonds mined by Namdeb Diamond Corp., the joint-venture it owns equally with Anglo American's (LON:AAL) De Beers. Speaking at the World Diamond Congress meeting last month, the country's Minister of Mines and Energy Isak Katali said the idea is to give diamond dealers and manufacturers the opportunity to buy directly from locals, Rapaport reported. The project follows the lead of neighbouring Botswana, which began trading 13% of the country's gems in December, and it depends on a deal with De Beers. Currently the precious rocks mined in Namibia by Namdeb, the 50-50 joint venture between the government and Anglo's unit, are sent to De Beers sorting facilities in Botswana and mixed with other De Beers goods. After that, only 10% of the total sent is returned to Namibia, where they are sold through the Namibia Diamond Trading Company (NDTC). Namibia is renowned for its gem quality placer diamonds that occur along the Orange River as well as onshore and offshore along its coastline. Image by erichon|Shutterstock.com |
| Top South African miners leave the World Gold Council Posted: 04 Jul 2014 06:27 AM PDT  The miners said the decision was purely "a cost issue." In a blow for the World Gold Council, the industry's market-development organization, South African miners AngloGold Ashanti (NYSE:AU) and Gold Fields (NYSE:GFI) have decided not to renew their membership citing fees issues. As members pay per ounce of metal produced, both companies said they had to look at the cost-benefits of staying in the organization, amid their efforts to adjust to a gold price that has dropped 21% since the beginning of 2013. The WGC counts among its members most producers of the precious metal, including Barrick Gold Corp. (TSE:ABX) and Newmont Mining Corp. (NYSE:NEM), the world's largest gold miners. South Africa produced more than two-thirds of the world's gold at its peak in the 1970s, but the sector has been in decline for years as shafts have matured. However, it remains a key global producer of platinum, with the country home to about 80% of the proven reserves. Image: XiXinXing |
| North River secures $12m to restart Namib mine, shares shoot up Posted: 04 Jul 2014 04:30 AM PDT
North River Resources (LON:NRRP) shares were up 28% at the market open Friday on the announcement it secured equity funding of up to US$12 million that will be used to re-open its Namib lead in zinc mine in Namibia and grow the business via acquisitions. The deal with Greenstone Resources, said Managing Director Martin French in a statement, will allow North River to fast-track the mine development and provides "a clear pathway to production," expected in 2015. Under the investment agreement, Greenstone has subscribed for an initial tranche of US$2.8 million worth of North River shares at 0.6 pence, and has agreed to provide up to US$8.9 million of equity in three further tranches at increasing prices to underpin growth in shareholder value.
Experts welcomed the news. Sheldon Modeland and Paul Renken, senior analysts at London investment bank specializing in natural resources, VSA Capital Ltd, qualified the addition of Greenstone as a "great endorsement of management, the business plan and the deposit," adding that it reduces the project funding risk. Earlier this week North River released a mine development plan, which put the capital expenditure required to bring Namib into production at $25 million. Image by mezzotint |
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