March Newsletter – 04.03.16
TOP NEWS
Western Australia named as world’s most attractive mining investment destination.
ABC News March 2, 2016
Western Australia has returned to the top spot in a key global survey of attractive mining investment destinations, after slipping down the ranking in 2014.
Canadian think-tank the Fraser Institute conducts the survey each year and found WA was the most attractive jurisdiction in the world for investing in 2015, after falling to fourth in 2014.
Saskatchewan in Canada came in at second spot while the US state of Nevada slipped to third.
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Warning of another string of mining bankruptcies in 2016.
Frik Els March 2, 2016
Rate of corporate defaults could be double historical average going back to 1920
Already high bankruptcy and default rates in mining & metals and oil & gas will only accelerate this year as the prolonged downturn in commodities begin to spill over into other sectors.
Overall, global speculative-grade corporate defaults will increase by more than 30% in 2016 and reach the highest level since 2009, says Moody’s Investors Service in a new report.
And 2015 already saw close to a doubling of companies defaulting on corporate bonds or loans compared to 2014 with the total jumping to $97.9 billion according to the ratings agency’s “Corporate Default and Recovery Rates, 1920–2015” report which covers more than 20,000 corporate issuer, released today.
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COMMODITIES
Precious-Gold still in vogue as fund flows counter risk appetite revival.
By Manolo Serapio Jr Thu Mar 3, 2016 Reuters
Gold has risen 17 pct this year, not far below 1-year peak.
MANILA, March 3 Gold edged higher on Thursday as strong inflows into gold-backed funds increased optimism the metal could extend this year’s rally despite a revival in risk appetite that lifted Asian equities to a two-month high.
Gold, which has gained nearly 17 percent this year to be among the top performing commodities, was trading not far below a one-year peak.
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Few copper bargains as top assets hoarded, Antofagasta says.
Danielle Bochove Millie Munshi March 1, 2016 Bloomberg
- Miner wants to stay “pure-copper play,” CEO Hernandez says
- There’s more speculation than there are opportunities”
Antofagasta Plc, the miner controlled by Chile’s richest family, would be interested in expanding its copper footprint. But right now, there’s nothing on the market that meets the bar.
Chief Executive Officer Diego Hernandez said it may take several months and as long as two years before attractive copper mines are sold as owners try to endure a commodities rout by selling other assets. With some of the lowest debt metrics in the business,
Antofagasta wants to remain a “pure copper play,” he said in an interview Tuesday. Any acquisition would need to be high quality, already in production and available at the right price, he said.
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When you find yourself in a hole, stop digging part 1: copper supply.
Jesse Moore Mar. 3, 2016 Seeking Alpha
- Copper production is set to decline or flatten in all major copper producing countries except Peru
- Peru has consistently overstated production estimates, and will only produce 1.9 million tonnes this year
- Global copper supply estimates do not take proper account for project ramp up, outages, shutdowns, and reduced capital expenditure
- Copper supply will likely end the year lower than currently projected
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India scraps tax on lower-grade iron ore exports as sales slump.
Swansy Afonso February 29, 2016 Bloomberg
- Tariff removal may boost shipments and add to global glut.
- Low prices mean Indian shippers may not benefit: Emkay Global
India will scrap an export duty on lower-grade iron ore shipments in a move that may add to a global glut that’s pummeled prices. Shares of Vedanta Ltd. and NMDC Ltd. surged.
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Platinum market to record 5th deficit in a row this year.
Mining supply returns to pre-strike level but recycling falls
The World Platinum Investment Council
The World Platinum Investment Council (WPIC) announces the publication of its sixth Platinum Quarterly.
The global platinum market ended year 2015 in deficit by 380 koz (2014: 725 koz)
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LEGAL AND REGULATORY
Less bureaucracy, more technology.
Chris Cann, Mining Journal
Governments in mature mineral jurisdictions must facilitate a smoother, cheaper administrative process for companies if they expect them to invest in the necessary technologies to make large greenfields discoveries, according to Rio Tinto head of exploration Stephen McIntosh.
Expanding on one of the better presentations from December’s Mines and Money London conference, McIntosh told Mining Journal the cost of doing business in Australia in particular needed to come down as the technical cost of discovery increased.
“Time equates to money,” he said. “If we’re having to spend more money on technologies and larger programmes to find deposits in mature locations, then we need to save money elsewhere.
“Regulatory process is one obvious area where things can improve.
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Indonesian lawmakers hope to revise mining law by September.
By Wilda Asmarini and Randy Fabi Mon Feb 29, 2016 Reuters
- Revised law may include easing of export curbs on minerals
- May push back Jan 2017 ban on concentrates by two years
- Some say changing regulations will spark legal uncertainty
JAKARTA, Feb 29 Indonesian lawmakers hope to revise the country’s resource rules by September in a move that could include easing of export curbs on minerals, such as nickel and copper, giving Freeport McMoRan Inc and other miners time and money to build smelters
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FINANCIAL
Central banks extend longest gold-buying spree since 1965: chart.
Eddie Van Der Walt March 1, 2016 Bloomberg
Central banks have been net buyers of gold for eight years, with Russia, China and Kazakhstan among the biggest hoarders, International Monetary Fund data show. Countries purchased almost 590 metric tons last year, accounting for 14 percent of annual global bullion demand, the World Gold Council estimates. Central bankers are using the metal to diversify from currencies, particularly the dollar, said Stefan Wieler, a Toronto-based vice president at GoldMoney Inc., a financial bullion services firm
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European shares rise as China’s stimulus helps mining stocks gain.
By Sudip Kar-Gupta Wed Mar 2, 2016 Reuters
European shares rose on Wednesday as gains by mining companies helped stock markets to recover further from their losses earlier in the year.
The pan-European FTSEurofirst 300 index .FTEU3, which had risen in the last four sessions, advanced 0.7 percent. The euro zone’s Euro STOXX 50 index .STOXX50E and Germany’s DAX .GDAXI also both rose 0.9 percent.
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New frontiers in mining finance.
Northern Miner
See the results of our new study and sit in on a round table discussion between 13 of the heaviest hitters on Bay and Howe streets.
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TECHNOLOGY AND INNOVATION
Here are the energy miracles bill gates is hoping for U.S. energy futurist’s fire up their thinking turbines for a once-a-year brain fest.
Eric Roston March 1, 2016 Bloomberg
Microsoft founder Bill Gates made news last week when he called for an “energy miracle” that would halt climate change and reduce the cost of energy. “I don’t mean something that’s impossible,” he wrote in his annual letter. Gates wants a miracle akin to the polio vaccine or the personal computer.
Hundreds of potential minor miracles are on display this week at the annual confab of the Advanced Research Projects Agency-Energy (ARPA-E), a part of the U.S. Department of Energy. The event features keynote speakers including Senator Lisa Murkowski (R-Alaska); Victor Abate, General Electric’s chief technology officer; and Jim Yong Kim, president of the World Bank.
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PROJECTS
Ivanhoe mines releases positive Kamoa PFS.
Published by Resource World on March 3, 2016
Robert Friedland, Executive Chairman, Ivanhoe Mines Ltd. [IVN-TSX; IVPAF-OTC] has released an independent Prefeasibility Study for the first phase of development of the Kamoa copper project in the Democratic Republic of the Congo.
The Kamoa copper project — a joint venture between Ivanhoe Mines and Zijin Mining Group Co. Ltd. — has been independently ranked as the world’s largest, undeveloped, high-grade copper discovery by international mining consultant Wood Mackenzie.
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Congo’s war-torn east earmarked for $123 million tin mine.
Thomas Wilson March 1, 2016 Bloomberg
- Project may be first industrial mine in restive eastern Congo
- Alphamin targeting half of funds from investors, rest debtShare on Linked
Alphamin Resources Corp., a mining company backed by Denham Capital Management LP, plans to raise $123 million to dig the first industrial mine in Congo’s North Kivu province, where the army has fought rebels on the nation’s eastern border for two decades.
The company, based in Grand Baie, Mauritius, will seek half the money for the tin mine from its investors and the rest in debt, Chief Executive Officer Boris Kamstra said Feb. 25 in an interview in Congo’s capital, Kinshasa. Output is expected to begin at the end of 2018, according to a feasibility study released Feb. 23.
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ENRC to cut over 2,000 mining jobs in Congo – union.
Kinshasa, March 2, 2016 Reuters
Kazakh group Eurasian Natural Resources Corporation is cutting more than 2,000 jobs at two mining companies it controls in Democratic Republic of Congo, a union representative said on Wednesday.
The company, owned by Eurasian Resources Group, plans to shed 996 jobs at its Boss Mining unit and 1,300 at Congo Cobalt Corporation (CCC) in the country’s copper-rich southeast, said Dieudonne Shimbi, the provincial coordinator for TUMEC, one of the unions negotiating on behalf of the workers.
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