March Newsletter – 29.03.16
ANNOUNCEMENTS
Behre Dolbear are sponsoring the SME’s 4th Current Trends in Mining Finance Conference on April 24-27th in New York City.
Behre Dolbear are sponsoring the 121 Mining Investment, London, 14-15th April 2016.
TOP NEWS
Rising prices, equities suggest end of mining bear market near
Business in Vancouver – Nelson Bennett
A 2016 rally in commodity prices and mining stocks has analysts guardedly optimistic.
Recent stock charts are making it tempting to declare a five-year-long bear market for mining finally over.
Since mid-January, mining stocks have rallied, key commodity prices appear to be making their way up from a bottom, a number of financing and acquisition deals have been struck and, for the first time in years, the mood at the recent Prospectors & Developers Association of Canada (PDAC) convention in Toronto was buoyant.
“We’re certainly in a rally,” said Ivan Lo, founder of Equedia.com. “Whether the rally will sustain itself is another question. There does seem to be some excitement in the market. It’s a different type of excitement than we’ve seen in previous years.”
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The end of the global diversified miner?
Frik Els
New report predicts narrower focus for mining’s majors
Driven by low commodity prices, large mining companies will shift away from diversification strategies to concentrate on increasing competitiveness in specific sectors, predicts research firm BMI.
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Turkish Investor Yildirim Pauses Africa Plans on Slump
Andres R Martinez March 22, 2016 Bloomberg
- Financing for ports, mining difficult with economic slowdown
- Yildirim looking for existing Africa projects for investment
Turkish investor Robert Yuksel Yildirim says it’s getting harder for foreign companies like his Yildirim Holding AS to expand in Africa because of the collapse in commodity prices.
Many large-scale infrastructure and mining projects in sub-Saharan Africa require companies to commit to more than a decade of investing and financiers are reluctant to engage for longer than five to 10 years, Yildirim, who is chairman of the Istanbul-based company, said in an interview on March 21 in Abidjan, Ivory Coast’s commercial capital.
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Low prices, focus on competitiveness prompt majors to abandon diversification strategies
Anine Kilian,Mining Weekly 22nd March 2016
JOHANNESBURG (miningweekly.com) – Global miners will increasingly shift away from a diversification strategy as low mineral prices will drive them to concentrate on increasing competitiveness in specific commodities to improve earnings, predicts research firm BMI. According to a report published last week by the firm titled ‘Global Mining – Diversification Era Over, Focus on Core Assets and Mergers and Acquisitions’, BMI forecast that while miners’ divestments would continue, this would only be a temporary measure to improve the companies’ cost structures and increase operational margins in the short term.It is our preference that if you wish to share this article with others you should please use the following link:http://www.miningweekly.com/article/bmi-releases-new-mining-report-2016-03-22
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COMMODITIES
Beware iron ore complacency
Daniel Gleeson Mining Journal 23 Mar 2016
The iron ore market is going through quite a change. Already this year’s best performing major commodity, the steel raw material has been getting positive reviews of late. This comes as light relief to a sector that has struggled to come to terms with its fall from grace over the past two years.
Even after the market got over a 19.5% jump in one single day on March 7 – eight days later it had fully retraced its steps – the price had risen again to just under US$58 per tonne as Mining Journal went to press.
Unfortunately this is likely to be short lived, and here’s why.
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Gold Declines to One-Month Low as Resurgent Dollar Hurts Demand
Ranjeetha March 24, 2016
- Bullion on track for worst weekly performance since November
- Holdings in ETFs backed by gold expand to two-year high
Gold fell to the lowest level in a month as the outlook for higher U.S. interest rates strengthened the dollar, hurting demand for the metal as an alternative investment.
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Pipes to Wi-Fi Show Why Copper’s Troubles Go Beyond China Slump
Luzi-Ann Javier, March 23, 2016
Lower prices fail to spur demand as buyers seek alternatives
Judging by the pipes and plumbing fixtures inside the E.W. Berger & Bros. warehouse in New Jersey, the slumping global copper market has more to worry about than just weakening demand from China.
E.W. Berger has cut monthly purchases of copper products to 5,000 pounds (2.3 metric tons) from 20,000 pounds a decade ago. While the cost of the metal has dropped, more clients prefer plastic, which is even cheaper, said owner Jay Richman. Demand for copper in the U.S., the second-largest user, has plunged by more than a quarter in the 10 years through 2014, including a 55 percent plunge in tubes and pipes, the Copper Development Association estimates.
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LEGAL AND REGULATORY
Canada Renews Investment in Programs That Benefit Mining
By E&MJ News 23 March 2016
The Mining Association of Canada (MAC) expressed satisfaction with the federal government’s renewal of funding for key areas such as environmental assessment, the Major Projects Management Office, Aboriginal education and training, and geoscience.
“Given the current financial situation and the need for fiscal discipline, I am pleased to see the federal government renew investment in critical areas,” said Pierre Gratton, MAC’s president and CEO. “The government has also made some strategic investments in innovation, marine safety and infrastructure that should pay dividends over time.”
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Kinross Gold Corp to fight shut-down of Chilean mine, says it didn’t cause low water level
The Canadian Press Financial Post
TORONTO — Kinross Gold Corp. says it will mount a legal defence of its Maricunga mine in Chile, which faces the loss of its water source in a drought-ridden part of the country if an environmental regulator gets its way.
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FINANCIAL
Indonesian Group Seeks $1 Billion Debt for Newmont Mine Deal
Cathy Kit Ching Chan, Bloomberg, March 18, 2016
- Financing would include $750 million loan, rest in mezzanine
- Maybank, Societe Generale among lenders in advanced talks
An Indonesian consortium led by veteran investment banker Agus Projosasmito is in talks to raise $1 billion of debt to back its bid for control of Newmont Mining Corp.’s copper operations in the country, according to the group’s financial adviser.
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Mitsubishi books almost $4bn in commodities-related write-downs
Cecilia Jamasmie March 24, 2016
Commodities giant Mitsubishi Corp became Thursday the second Japanese trading house this week to report huge write-downs and a likely first annual loss ever, echoing Mitsui & Co’s warning on the effect of weak commodity prices.
Japan’s biggest trader said it expected to book an impairment charge of $3.8 billion (430 billion yen) mainly on its metals and energy businesses, which will lead to a net loss of $1.3 billion (150bn yen) in fiscal 2015.
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PROJECTS
Rubicon Minerals Corp warns ‘significant doubt’ it can survive after breaching loan covenant
Peter Koven, Financial Post March 22, 2016
TORONTO — Rubicon Minerals Corp. is at risk of collapse after breaching a debt covenant and halting its high-profile Ontario gold project due to technical problems.
The junior miner announced Tuesday that there is “significant doubt” it can continue as a going concern because of its debt, and may have to seek creditor protection.
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Botswana Diamonds, Alrosa begin exploration in Orapa
Cecilia Jamasmie
Shares in London-listed Botswana Diamonds (LON:BOD) climbed nearly 7.5% Tuesday after the company announced that it has begun exploration in the country’s Orapa region.
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TECHNOLOGY AND INNOVATION
These bacteria can help you find rich platinum deposits
Cecilia Jamasmie
Australian scientists from the University of Adelaide have discovered a new role played by certain bacteria in cycling platinum group metals in soils and sediments, which could potentially be applied in the search of rich deposits of such metals.
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Investment in drones, wearables to expand across African mines
By: Creamer Media Reporter 22nd March 2016
JOHANNESBURG (miningweekly.com) – The use of drones, wearable technology and real-time video training are expected to gain traction in mines across Africa over the next two years, as a new survey by online data, analysis and advisory services firm Timetric’s Mining Intelligence Center (MIC) shows growing interest in next-generation technologies. The ‘Technology Investment Priorities in African Mining 2016’ report revealed that, while only a handful of operations in Africa made use of these types of equipment, “sharp increases” in the implementation of the latest technologies were expected over the next few years. In a survey of over 100 mine managers and senior decision-makers at mines throughout Africa, the report showed that 29% of the companies that had not yet invested, but planned to do so, would inject capital into drone, wearable and real-time video training technologies over the next two years.It is our preference that if you wish to share this article with others you should please use the following link
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A Dynamic Underwater Mining Solution
23.03.16
Soil Machine Dynamics (SMD) and Underwater Mining Solutions (UMS) are teaming up to offer customers the full scope of mining equipment required for underwater mining projects, both offshore and inland, and in all territories.
Their combined expertise, and the strength of each of their parent companies, enable SMD and UMS to provide customers with proven, de-risked solutions to deep-sea, near-shore and inland underwater exploration, mining and processing.
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