INFOGRAPHIC: The world's largest diggers |
- INFOGRAPHIC: The world's largest diggers
- Gold price: This year September may bring fall
- Copper price rally evaporates on Chinese factory data
- Executive changes at Antofagasta Minerals, chairman stepping back
- London Mining says Ebola now impacting output, costs
- Gold price drops as safe haven buying dries up again
| INFOGRAPHIC: The world's largest diggers Posted: 21 Aug 2014 05:27 AM PDT  Gold price: This year September may bring fallSeptember is gold's best performing month historically, but a new research note from investment bank UBS says 2014 is unlikely...  |
| Gold price: This year September may bring fall Posted: 21 Aug 2014 05:12 AM PDT On the Comex division of the New York Mercantile Exchange, gold futures for December delivery – the most active contract – came under heavy selling pressure losing more than $20 to $1,274.90 an ounce in pre-open trade Thursday, a two month low. The gold price failed to consolidate above the psychologically important $1,300 level on the back of safe haven buying spurred by the turmoil in Ukraine and Iraq, giving up more than half the gains of the June-July rally and falling below its 200-day moving average – a bearish technical sign. A note from investment bank analysts at UBS out yesterday (before today's pullback) argues that unlike the historical trend of an up September, this year September may turn out to be a particularly weak period for the gold price: "July, August and September are typically gold's strongest performing months. But gold dropped 2.74% in July, and while it's currently up 1.05% in August, its grasp on those price gains looks very tentative […] [B]arring a move to $1200, physical demand from China is likely to remain quite subdued in the months ahead. This means that gold is lacking physical support from its biggest physical market, implying that the seasonality trade for September – gold's best performing month historically – is unlikely to follow its long-term trend." |
| Copper price rally evaporates on Chinese factory data Posted: 21 Aug 2014 04:11 AM PDT In early New York trade on Thursday, December copper came under renewed pressure, diving to a low of $3.1715 a pound after weak data out of China hurt sentiment. The nearly 1% pullback is undoing a recovery in the price of the red metal from 2-month lows hit a week ago and comes after a gauge of economic activity in China slowed sharply in August. Growth in China's manufacturing sector slumped to a three month low according to an HSBC survey of purchasing managers, falling to just above expansionary level at 50.3 from 51.7 in July. Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said both domestic and external new orders rose at slower rates and disinflationary pressure returned as input and output prices contracted. The manufacturing outlook is just the latest indicator with warning signs for the the Chinese economy. Growth in China's services sector slowed sharply in July to its lowest level in nearly nine years, while central bank data released last week showed Chinese banks' extension of new credit slumped in the same month to the lowest level since the global financial crisis. Conditions in the already struggling property sector were also bleaker than expected with home sales dropping 18% and developers' inventories of unsold properties rising 25% compared to last year. China's property sector which has enjoyed years of red-hot growth, is a key component of its economy and also accounts for a big chunk of copper demand. China consumers some 45% of the world's refined copper, but the country's imports fell 3% in July, the third straight month of losses, to 340,000 tonnes. However, year to date China is still importing refined copper at a record setting pace – up more than 20% over 2013 to 2.84 million tonnes. The copper market is expected to be in a 226,000 tonne surplus by the end of 2014, a Reuters poll in July showed, with the surplus seen rising to 285,000 tonnes in 2015. |
| Executive changes at Antofagasta Minerals, chairman stepping back Posted: 21 Aug 2014 03:27 AM PDT  Los Pelambres remains Antofagasta's flagship mine, producing over 55% of the total group output. Chile-focused copper miner Antofagasta (LON: ANTO) has promoted mining division head Diego Hernández as its new chief executive officer (CEO) and announced the group's executive chairman is set to take step back from operations. Jean-Paul Luksic, who was appointed in 2004, will now take a non-executive role with effect from Sep. 1st. His family owns 65% of Antofagasta, which began life as a London-incorporated South American railway operator in the 1880s. Hernández' promotion to the top helm comes as Antofagasta embarks on a $3 billion expansion of mining operations expected to increase its copper output from 700,000 tonnes this year to almost 900,000 tonnes in 2018. A mine at Antucoya, the first part of the expansion, is scheduled to start production next year. The Luksic family —one of Chile's richest— owns more than 60% of the company, which has exploration and mining ventures in Europe, Turkey, Australia, Africa and across the Americas and annual revenues of $4.5 billion. |
| London Mining says Ebola now impacting output, costs Posted: 21 Aug 2014 03:19 AM PDT
 London Mining's (LON:LOND) announced Thursday production volumes at its Marampa Mine in Sierra Leone jumped 24% to 2.1 million tonnes in the six months to end-June, but warned the outbreak of the Ebola virus in the West African country is beginning to impact operations. Graeme Hossie Chief Executive of London Mining said in a statement the company has "begun to experience disruption to the supply chain and to a number of services" due to the epidemic. As a result of a slower than expected ramp-up of its plant to 5.4 million tonnes per year and Ebola, the company narrowed its 2014 production guidance to the lower end of the range. Based on the current expected level of Ebola-related impact output of between 4.9 million tonnes and 5.1 million tonnes is now expected for the full year. The company predicts operating cost of around $50 a tonne, with $1 a tonne in Ebola related costs. Revenue of $110.6 million for the six months were down 22% as 5% increase in sales volumes was offset by lower market prices. Weak iron ore prices have also forced the company to defer for two years a $175 million "Life of Mine" extension capital programme. Marampa, which boasts a billion tonne resource, is about 120 km from Freetown, the capital of the West African nation. The Marampa mine is a brownfields site formerly operated by the Sierra Leone Development Company (DELCO) and William Baird between 1933 and 1975. Marampa reached a peak production of 2.5mtpa before low iron ore prices forced its closure. Continuing weak market economics and civil war prevented redevelopment of the mine until the mining licence was acquired by London Mining in 2006. London Mining is also developing projects in Greenland and Saudi Arabia. London Mining acquired Marampa Mine in 2006. Image by Mohand Yahiaoui |
| Gold price drops as safe haven buying dries up again Posted: 21 Aug 2014 12:55 AM PDT On the Comex division of the New York Mercantile Exchange, gold futures for December delivery – the most active contract – came under heavy selling pressure losing more than $20 to $1,274.90 an ounce in pre-open trade Thursday, a two month low. The slide in the price of gold came after minutes of the last US Federal Reserve meeting released yesterday showed the US central bank opting for a more hawkish tone as the country's job picture continues to improve. Short term bond yields – negatively correlated with the gold price as the metal is not income producing – jumped the most since March on expectations that the bank might raise rates a bit sooner than expected. The dollar strengthened further following a 11-month high against a basket of currencies reached yesterday thank to a subdued US inflation outlook as the central bank continues to withdraw stimulus for the US economy. Gold and the US dollar usually move in opposite directions. Chairman Janet Yellen may shed more light on the future of US monetary policy on Friday during a speech at the Fed's annual gathering in Jackson Hole. The oil price has not benefitted much from the turmoil in the Middle-East and Eastern Europe sliding to fresh lows below $95, down from more than $106 a barrel at the end of June. Looking at the ratio between the gold price and the oil price which usually rise in tandem (rising oil prices pushes up inflation increasing demand for gold as a hedge), gold still looks undervalued by comparison. Since 1970 the average ratio – how many barrels of oil can be bought with one ounce of gold – is 15 compared with under 14 now, which suggests that despite the fall in crude and gold's over 6% rise in 2014, the metal remains relatively cheap compared to oil. |
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