China expands further into commodity trading with London bank buy |
- China expands further into commodity trading with London bank buy
- Keystone won't 'significantly' increase emissions, US State Department says
- Dr Doom: Be afraid, but not very afraid of emerging market crises
- Newmont Mining drops more than 10% after releasing 2014 guidance
- Taxes hurt cash flow at Canadian Oil Sands
- Australian billionaires no match for Gina Rinehart
| China expands further into commodity trading with London bank buy Posted: 31 Jan 2014 03:04 PM PST The world's largest bank in terms of market value and assets under management, Industrial and Commercial Bank of China is buying the London commodities-focused arm of South Africa's Standard Bank. ICBC is paying $765 million for 60% of the London unit of Johannesburg-based Standard Bank, gaining access to a well-established commodities, credit and forex trader with affiliates and operations in all the major trading hubs including New York, Hong Kong, Tokyo and Shanghai. The Chinese giant also received a five-year option to purchase another 20% of Standard Bank's global markets unit for up to $500 million in cash. Jianqing Jiang, the chairman of ICBC which is one of the big four Chinese state-owned banks, said: "The large amount of commodities trading and the consequential needs for hedging resulting from the development of the Chinese economy, as well as financial reforms such as the deregulation of interest rates and foreign exchange rates, along with the two-way opening-up of capital markets, have posed new demands for the transformation of the service capabilities and business model of Chinese banks." In October, the UK made it easier for Chinese banks and investors to trade inside the country and London is already responsible for the bulk of trading in renminbi outside China. The ICBC deal is expected to be first of many as Chinese banks make the most of liberalization of the financial sector by the communist country's leadership. In 2008 ICBC, which boasts more than four million business clients and services 410 million retail customers, bought 20% of the 150-year old Standard Bank group, Africa's largest bank, for $5.4 billion. Image by hoginwang  |
| Keystone won't 'significantly' increase emissions, US State Department says Posted: 31 Jan 2014 12:15 PM PST A new report from the US State Department will make Keystone pipeline proponents very happy: The pipeline will not greatly increase carbon emissions, according to report. Why? Because oil sands development in Alberta will continue with our without TransCanada's $5.4 billion pipeline; Keystone "is unlikely to significantly affect the rate of extration in oil sands areas," the State Department concluded. "The dominant drivers of oil sands development are more global than any single infrastructure project. Oil sands production and investment could slow or accelerate depending on oil price trends, regulations, and technological developments, but the potential effects of those factors on the industry's rate of expansion should not be conflated with the more limited effects of individual pipelines," the report reads. This final technical review by the US State Department – though not the final decision – will likely have a major impact on whether or not the Obama administration ultimately approves the project. President Obama has cited concerns over carbon emissions as a big reason why he's not eager to give his blessing. "The net effects of the pipeline's impact on our climate will be absolutely critical to determining whether this project is allowed to go forward," Obama said last summer.
But the report also validated one of the President's claims: The project will not contribute much to jobs. In fact, it will only add about 35 permanent jobs and 15 temporary jobs after the two-year construction phase – a point which many had already pointed out. The Keystone pipeline – which would transport Alberta's crude to Texas refineries – would add about 42,100 direct and indirect jobs during construction. Whether or not the project is in the US' national interest is the key question Obama and Secretary of State John Kerry must consider when deciding whether to grant the Presidential Permit – required in order to construct a pipeline on the border with Canada. TransCanada (NYSE:TRP) was up 1.5% on the New York exchange following the news on Friday, trading at $43.45 per share. The public immediately took to Twitter – some to air their grievances and others to celebrate. Photo featured on homepage by Andrew Ottoson |
| Dr Doom: Be afraid, but not very afraid of emerging market crises Posted: 31 Jan 2014 12:01 PM PST
 Nouriel Roubini is often referred to as Dr. Doom (or 'Permabear') because of the many pessimistic economic predictions he's made in the past. But ever since he accurately forecast the 2008 global financial crisis, people have tended to take the views of the Stern School of Business professor and IMF, World Bank and US Fed economist seriously. Roubini, who now heads his own global economics consulting business, writes on Friday at Project Syndicate that emerging markets "are facing strong headwinds" which was triggered by a "mini perfect storm" after:
But, says Roubini, these triggers should not be confused with the deeper causes of the problems in India, Indonesia, Brazil, Turkey and South Africa (dubbed the "fragile five") which include:
Structural problems in the less fragile but still "overhyped" BRICS countries are only adding to uncertainty, but if China experiences a hard landing, the crisis will be deep enough to spread to developed economies and the US. Despite these problems, Roubini is sanguine about the longer-term prospects of the fragile five and other vulnerable countries like Argentina, Venezuela, Ukraine, Hungary and Thailand: "Nonetheless, the threat of a full-fledged currency, sovereign-debt, and banking crisis remains low, even in the Fragile Five, for several reasons. All have flexible exchange rates, a large war chest of reserves to shield against a run on their currencies and banks, and fewer currency mismatches (for example, heavy foreign-currency borrowing to finance investment in local-currency assets). Many also have sounder banking systems, while their public and private debt ratios, though rising, are still low, with little risk of insolvency. "Over time, optimism about emerging markets is probably correct. Many have sound macroeconomic, financial, and policy fundamentals. Moreover, some of the medium-term fundamentals for most emerging markets, including the fragile ones, remain strong: urbanization, industrialization, catch-up growth from low per capita income, a demographic dividend, the emergence of a more stable middle class, the rise of a consumer society, and the opportunities for faster output gains once structural reforms are implemented. So it is not fair to lump all emerging markets into one basket; differentiation is needed." Read more at Project Syndicate Image by Blog do Panalto |
| Newmont Mining drops more than 10% after releasing 2014 guidance Posted: 31 Jan 2014 11:57 AM PST Newmont Mining (NYSE:NEM), the world's second biggest gold producer, was trading at $21.68 per share on Friday – a more than 10% drop – after releasing its 2013 production results, 2014 guidance and announcing that it might curtail operations in Indonesia. The news wasn't all bad. The company reported 2013 gold production at the top end of its guidance range of 5.1 million ounces of gold. In its 2013 reserve calculation and asset impairment testing, the comapny will apply a gold price assumption of $1,300 per ounce, down from $1,400 last year. For its resources, the gold price assumption will be $1,400, down from $1,600. These figures could result in non-cash impariment chargest in the company's financial filings due next month. Newmont's gold price assumption is more much more optimistic than the world's biggest gold producer Barrick, which said last week it would recalcualte its reserves under a gold price assumption of $1,100 per ounce. The company also reported average realized prices for the year of approximately $,1393 per ounce of gold and $2.96 per pound of copper, compared with $1,661 per ounce and $3.43 per pound in 2012. Throughout the year, Newmont divested more than $600 million of non-core assets. Cost-cutting measures included laying off about 300 employees at the company's Ghana operations. The company's Akyem mine in Ghana began commercial production in the last quarter of the year and exceeded guidance by producing 129,000 ounces of gold. 2013 has been anything but easy for the gold miner. The company lost more than 50% of is value throughout the year, earning the distinction of the second worst performing stock on the S&P 500. CEO Gary Goldberg told investors on Friday that his firm is reviewing its dividend policy which is linked to gold prices, Reuters reported. Looking ahead at 2014, Newmont sees a slight uptick in gold and copper output for total production of 5.3 million ounces and 175 thousand tonnes respectively, on the high end. The company also expects stable costs and a 20% reduction in overhead expenses. According to the AP, this is below the Sterne, Agee & Leach's gold forecast of 5.5 million ounces. Citigroup's Brian Yu wrote the following, as reported by Barron's Blog. "2014 Guidance Looks Lower on Production and Higher on Costs. [Newmont] is breaking from its historical reporting convention and guiding on a consolidated basis, expecting production of 5.0-5.4 mln ozs at a cash cost of $740-$790/oz compared to our prior estimate at 5.4 mln ozs at $685/oz. The midpoint of guidance would suggest equity gold production of ~4.7 mln ozs vs 5.1 mln ozs for 2013." Meanwhile, investment analysts at RBC Capital downgraded the gold miner from a a "sector perform" rating to an "underperform" rating. Also dragging down the company's share price was news on Friday that the miner might curtail its operations in Indonesia due to a dispute with the government over a new export tax, according to Reuters. "We're in a position in the next couple of months to look, if we aren't able to reach agreement – to have to curtail operations," Goldberg said. |
| Taxes hurt cash flow at Canadian Oil Sands Posted: 31 Jan 2014 10:19 AM PST  Mildred Lake Plant Site at Syncrude | Photo by Jason Woodhead Canadian Oil Sands says high taxes are to blame for its dwindling cash flow over the past year, which went from $1.6 billion in 2012 to $1.3 billion in 2013, though this was partially offset by a higher price. Lower sales volumes also contributed to weaker performance. The company posted net income of $834 million for the year compared with $973 million the year before. Current taxes increased in 2013 primarily because tax pools and the partnership structure sheltered the majority of 2012 income from current taxes, the company wrote. Also, taxes on a portion of income generated in 2012 were deferred to 2013. As expected, capital expenditures increased in order to execute major capital projects at Syncrude, of which Canadian Oil Sands is the biggest shareholder. "We achieved a key milestone during the quarter with the completion of two of Syncrude's major projects," CEO Ryan Kubik said in a statement. "We can now look forward to the completion of the remaining two projects and the potential for free cash flow expansion following the decline in capital expenditures after 2014. Syncrude operations performed largely as expected in the fourth quarter of 2013 and we remain focused on delivering more consistent production levels in 2014." Syncrude – a joint venture between Canadian Oil Sands, Imperial Oil, Suncor Energy and several other smaller stakeholders – bumped up production slightly during the last quarter of the year, though total output for the year of 97.5 million barrels was 7.4 million barrels shy of 2012 levels. Canadian Oil Sands doesn't anticipate any major production boosts in 2014. Estimated annual production for Syncrude ranges bewteen 95 million and 110 million barrels. The company estimates cash flow from operations of $1.2 billion and plans to settle an account of around $500 million for taxes and Crown royalties, though current taxes are estimated to decrease to $200 million in 2014. |
| Australian billionaires no match for Gina Rinehart Posted: 30 Jan 2014 04:35 PM PST Gina Rinehart increased the wealth gap with her fellow Australian billionaires growing her iron ore and coal empire by $700 million last year according to Forbes' latest rich list . Rinehart's bank account grew 4% to $17.7 billion (20.3 billion Australian dollars) last year, making her a cool $10 billion richer than her nearest rivals, the Pratt dynasty. At number four, South African-born Glencore CEO Ivan Glasenberg, who's also an Australian citizen and steers his commodity trading giant from Switzerland, saw his cash stack up to $6.3 billion. Iron giant Fortescue Metals founder Andrew Forrest at $5 billion rounded out the top five. The fall in the Australian dollar the past year flatter the country's billionaires, which saw their net worth jump higher in the local currency even as their greenback fortunes shrunk. Again Rinehart was the exception and in US dollar terms she's a bit better off than in 2012. |
| You are subscribed to email updates from MINING.com To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 Comment for "China expands further into commodity trading with London bank buy"