March Newsletter – 12.03.18
ANNOUNCEMENTS
- PDAC attendance best since 2013
- Mining Exploration Is Making Comeback After Four-Year Slump
- Mining’s Main Event Shows Good Times Are Back—Just Not for All
- Ignore February weakness, China’s commodity imports are robust: Russell
- Congo President Set to Approve Law Changes Despite Miners’ Pleas
- Chile’s Pinera, at inauguration, vows to end ‘stagnation’
- Abramovich Allowed to Sell $1.5 Billion Nornickel Stake, for Now
- Gearing up with Barrick for the BattleBorn hackathon in Las Vegas
- Sirius seeks $2bn in government-backed debt for Britain’s biggest fertilizer mine
TOP NEWS
PDAC attendance best since 2013
Michael Allan McCrae
The Prospectors & Developers Association of Canada said 2018’s convention attendance hit 25,606, the best turn out since 2013.
Attendance was still marginally better than last year, just up six percent from 24,161.
The PDAC Convention in Toronto, arguably the world’s largest annual mining convention, is a bellwether of the industry’s health. Participants from 125 countries attend.
Organizers said the improved numbers is proof that “mining industry has regained its swagger and is building momentum.” With the prices for zinc, copper and battery-related metals all up from last year, miners are enjoying a better top line. This time last year spot copper was US$2.60/lb. Today it is at US$3.10. Zinc is also up 25% to US$1.50/lb and cobalt is up over 50% to US$37.50/lb from a year ago. Money is also flowing into the junior sector.
According to PWC, the aggregate market capitalization of the top 100 junior miners hit CA$12.2 billion at the end of June, 2017—up 7% from 12 months earlier.
Note that PDAC enthusiasm is tightly linked to the direction of metal prices. Here’s a chart so year-on-year change in spot gold prices versus change in PDAC attendance. Note that gold was at US$1,240/oz a year ago. It is now at around US$1,330/oz.
http://www.mining.com/pdac-attendance-best-since-2013/
Mining Exploration Is Making Comeback After Four-Year Slump
Bloomberg
- Non-ferrous exploration budgets seen rising for second year
- Spending driven by gold, base metals and electric vehicles
After a four-year slump, mining companies are spending on exploration again as interest in base metals rebounds and clean technologies boost demand for niche battery ingredients.
Miners spent $8.4 billion searching for new metal deposits last year, about 15 percent more than in 2016, according to a report published Monday by S&P Global Market Intelligence. That exploration spending, which doesn’t include money used searching for iron ore, could increase again by as much as 20 percent this year, S&P said.
Mining’s Main Event Shows Good Times Are Back—Just Not for All
Bloomberg
- More than 25,000 attend Toronto’s PDAC from 125 countries
- Capital for juniors still tight; seniors seen poised for M&A
If attendance at the world’s biggest mining conference is any indication, the industry has all but fully recovered from a painful downturn — although capital is still tight, especially for juniors.
More than 25,000 mining executives, investors, prospectors, government officials and analysts from 125 countries poured into this year’s PDAC conference in Toronto, the most in five years.
https://www.bloomberg.com/news/articles/2018-03-06/mining-s-main-event-shows-good-times-are-back-just-not-for-all
COMMODITIES
Ignore February weakness, China’s commodity imports are robust: Russell
Reuters Staff
LAUNCESTON, Australia, March 8 (Reuters) – It’s safe to dismiss any impression that China’s imports of major commodities such as crude oil and iron ore were weak in February, despite the numbers suggesting as much.
The timing of the Lunar New Year holiday usually affects when imports are counted as having arrived in the world’s largest buyer of commodities.
This year the week-long holiday fell entirely in February, likely resulting in a pull-forward of the counting of imports into January, meaning February’s arrivals appear weaker than they should.
Crude oil imports in February were 32.26 million tonnes, China customs said on Thursday, equivalent to about 8.41 million barrels per day (bpd).
That looks like a massive drop from January’s 9.57 million bpd, which was the strongest month on record.
Putting the first two months of 2018 together, however, gives an import rate of about 9.02 million bpd, up a fairly strong 10.8 percent from the same period last year.
LEGAL AND REGULATORY
Congo President Set to Approve Law Changes Despite Miners’ Pleas
Bloomberg
- Revised code will raise cost of doing business for miners
- President held five hours of talks with executives Wednesday
Congolese President Joseph Kabila will sign off on changes to the country’s mining code but left the door open to further talks after a lengthy meeting with senior industry executives who oppose the legal reform.
Glencore Plc Chief Executive Officer Ivan Glasenberg, Randgold Resources Ltd.’s Mark Bristow and other top officials met Kabila for five hours Wednesday in the capital, Kinshasa, to discuss the new rules. The changes will raise taxes and other costs for operators in Congo, which is Africa’s top copper producer and the world’s main source of cobalt, a critical ingredient in rechargeable batteries.
Chile’s Pinera, at inauguration, vows to end ‘stagnation’
Antonio De la Jara, Fabian Cambero
SANTIAGO (Reuters) – Conservative billionaire Sebastian Pinera vowed to combat economic “stagnation” from years of centre-left rule as he started a new term as Chile’s president on Sunday, calling for austerity and support for the shrinking middle class in one of Latin America’s wealthiest nations.
After receiving the presidential sash from outgoing socialist President Michelle Bachelet, Pinera, who served as president for four years before Bachelet, promised to help eradicate poverty and transform Chile into a developed nation within a decade.
Pinera, 68, was elected in December with a strong mandate, becoming the newest member of a group of conservative leaders who have risen to power in South America in recent years – all of whom attended his inauguration.
A Harvard-trained economist and the son of a prominent centrist politician, Pinera made his fortune introducing credit cards to Chile in the 1980s.
POPULAR OPPOSITION
As a candidate, Pinera said he would gradually balance the budget over six to eight years.
To revive growth in the world’s top copper producer, incoming Mines Minister Baldo Prokurica said Pinera’s government would seek to rescue $50 billion in mining investments from bureaucratic red tape.
But Pinera will have to govern with a divided Congress and a prickly leftist coalition that has vowed to fight his plans to lower taxes and “correct” Bachelet’s progressive policies.
“The left may have lost the election, but I think they still feel like they own the streets, the popular opinion,” said Kenneth Bunker, a Chilean political scientist. “Pinera will feel that if he does anything too extreme, people will mobilize.”
But Pinera’s timing is good. Rising copper prices have boosted Chile’s exports, helping shore up government revenues and revive growth in the country’s $250 billion economy.
FINANCIAL
Abramovich Allowed to Sell $1.5 Billion Nornickel Stake, for Now
Bloomberg
- Soccer team owner will undo sale if later found impermissible
- Challenge to Abramovich’s sale to be settled in May trial
United Co. Rusal’s Oleg Deripaska agreed to let rival Russian billionaire Roman Abramovich sell a $1.5 billion stake in MMC Norilsk Nickel PJSC, providing that the sale is reversed if a London judge later finds that a shareholder agreement doesn’t allow it.
Judge Christopher Butcher on Thursday approved the agreement, which includes Vladimir Potanin, a third Russian billionaire who has agreed to buy Abramovich’s stake. Whether the sale is permissible under the terms of a shareholder agreement will now be debated at a trial set for May 14.
The agreement brings a brief hiatus in a decade-old battle of wills between Deripaska, the outgoing president of Rusal, and Potanin for control of the company known as Nornickel. The two came to a truce in 2012 after the intervention of Russian President Vladimir Putin and with the introduction of Abramovich as a mediating shareholder. The soccer club owner’s aim of selling most of his stake back to the feuding billionaires has inflamed tensions once more.
INNOVATION AND TECHNOLOGY
Gearing up with Barrick for the BattleBorn hackathon in Las Vegas
Paul Moore, International Mining
The BattleBorn hackathon starts Friday March 9 and is a 54 hour, weekend-long open innovation event to be held at Rob Roy’s Innevation Center in Las Vegas, featuring real data and challenges direct from Barrick’s mining operations. Participants will be presented with four challenges and tasked with the opportunity of identifying inefficiencies and developing technical solutions to a selected challenge. In teams, participants will brainstorm solutions and develop an MVP over the course of the weekend, then pitch that solution to a distinguished judging panel of venture capitalists, technologists and industry leaders. Mentors from Barrick, Cisco, AWS and Unearthed will support participants all weekend and there is $20,000 in cash prizes up for grabs.
https://im-mining.com/2018/03/08/gearing-barrick-battleborn-hackathon-las-vegas/
PROJECTS
Sirius seeks $2bn in government-backed debt for Britain’s biggest fertilizer mine
Cecilia Jamasmie
British company Sirius Minerals (LON:SXX), the company building a huge polyhalite mine beneath a national park, is looking to raise up to $2 billion in government-backed debt to finish building its fertilizer project in North Yorkshire.
Delivering preliminary results for 2017, the company said its main focus this year will be securing up to $3bn from banks, including roughly $2bn under the government’s Infrastructure and Projects Authority, where discussions are ongoing.
Sirius, which plans to sink two 1,500m deep shafts in the Yorkshire moors this year, expects to close those agreements in the second half of 2018.
British company Sirius Minerals (LON:SXX), the company building a huge polyhalite mine beneath a national park, is looking to raise up to $2 billion in government-backed debt to finish building its fertilizer project in North Yorkshire.
Delivering preliminary results for 2017, the company said its main focus this year will be securing up to $3bn from banks, including roughly $2bn under the government’s Infrastructure and Projects Authority, where discussions are ongoing.
Sirius, which plans to sink two 1,500m deep shafts in the Yorkshire moors this year, expects to close those agreements in the second half of 2018.
Chief executive Chris Fraser said the company already has deals to sell 4.4 million tonnes of the fertilizer a year and is seeking “similar arrangements” with northwest Europe and Brazil. The goal to increase that figure to between 6 million and 7 million tonnes this year.
COMMODITY PRICES
