Prices in Euros per ounce and per kilo in 8 and 24 hour intervals
The MasterMetals Blog
Prices in Euros per ounce and per kilo in 8 and 24 hour intervals
The MasterMetals Blog
>Canadian Miners Don’t Love the London Stock Exchange
– Deal Journal – WSJ:
“By Phred Dvorak and Edward Welsch
When the London Stock Exchange Group Ltd. announced its proposed takeover of Toronto’s bourse, one of the supposed benefits was access–for Toronto-listed firms–to London’s deep pools of capital.
That’s a topic dear to the hearts of roughly 1,500 cash-hungry start-up miners that populate the Toronto bourse and its venture affiliate. Those “junior miners”–and their constant need for money to drill, test and explore — have made the Toronto Stock Exchange, operated by TMX Group Inc., the mining-finance market of choice.
So what do those juniors think about the proposed deal? Not much, according to some of the attendees Deal Journal interviewed at the Prospectors & Developers Association of Canada conference in Toronto, the world’s largest gathering of small-cap miners.
Kerry Knoll, chairman of Canada Lithium Corp., with some $140 million in market cap, looked into listing on the LSE’s AIM market for smaller firms a few years ago and found it a much more expensive proposition than going public on the Toronto bourse. If London controlled the Toronto exchanges as well, the combined entity could raise the cost of listing in Canada, Knoll worries: “I would fear they’d bring that (higher-cost model) here and really put a crimp in our incubator.”
LSE and TMX executives selling the deal in recent weeks have said the Toronto exchange would remain Canadian-operated and regulated, and would benefit capital-seeking firms by offering truly global scale.
But David McPherson, president of Pure Nickel Inc., at some $14 million market cap, said he’d worry the interests of small, Canadian firms like his may get lost in a bigger exchange.
Pure Nickel raised money on the Toronto Venture Exchange, TSE’s junior market, in 2007 to buy land. It moved up to Toronto’s big board later that year. It’s already raised money from London institutional investors, but it doesn’t expect any additional U.K. retail-investment opportunities from a TSX-LSE combination.
“All I see is the risk that we could become insignificant in a much larger exchange,” he said.
But there are some fans, including Graham Downs, the CEO of ATAC Resources Ltd., market cap north of $600 million, thanks in part to a new discovery of gold in the Yukon.
“There’s a big resource component of the London Stock Exchange, but they are so focused on Africa and all these other places that they know,” Downs says. “They don’t have a lot of access to us, so I think it’ll open more pockets [of money] to Canadian ventures.”
Even though money may initially flow more toward London than Canada while the market finds its equilibrium, Downs says, in the end there will be a bigger pool of capital available to the best companies.
“If you’ve got good projects, if you’ve got a quality team, the money will find you,” he says.
Ian Henderson, chairman of JP Morgan Global Resources, has strong convictions about the copper market. He confirmed on Tuesday morning in a meeting for investors in Paris that “JP Morgan had bought more than half of stocks of copper on the London Metal Exchange to $ 1.1 billion. A dominant position which has fueled speculation on the red metal, since it makes the physical metal CCAEC more difficult. In total, the bank now owns about 122,222 tonnes of copper.
For two weeks the market questioned the idendity the holder of these stocks. According to figures published by the London Metal Exchange, a player had between 50 and 79% of reserves in the marketplace, which has warehouses all over the world. Among the potential holders of the metal, the BlackRock fund and ETF Securities, working in prevalence of Exchange Traded Funds on copper, had been cited.The name of JP Morgan also circulated. This is the first time that the bank recognizes.
The manager explained this decision by solid fundamental reasons. “We met there is little the leaders of Codelco, the largest copper producer in the world with 12% market share. They explained that their production would have to be halved in five years,” says the specialist, who has over thirty-five years of experience in commodities. With $ 70 billion of assets under management, JPMorgan Global Resources is the first strike force in the world for raw materials.
Author: David Levenstein
Posted: Tuesday , 07 Dec 2010
Mineweb.com – The world’s premier mining and mining investment website
One major reason investors look to gold as an asset class is because it will always maintain an intrinsic value. Gold will not get lost in an accounting scandal or a market collapse. Economist Stephen Harmston of Bannock Consulting had this to say in a 1998 report for the World Gold Council, “…although the gold price may fluctuate, over the very long run gold has consistently reverted to its historic purchasing power parity against other commodities and intermediate products. Historically, gold has proved to be an effective preserver of wealth. It has also proved to be a safe haven in times of economic and social instability. In a period of a long bull run in equities, with low inflation and relative stability in foreign exchange markets, it is tempting for investors to expect continual high rates of return on investments. It sometimes takes a period of falling stock prices and market turmoil to focus the mind on the fact that it may be important to invest part of one’s portfolio in an asset that will, at least, hold its value.”
Today is the scenario that the World Gold Council report was referring to in 1998.
A bad economy can sink poorly run banks. Bad banks can sink an entire economy. And, perhaps most importantly to the rest of the world, the integration of the global economy has made it possible for banking and economic failures to destabilize the world economy. As banking crises occur, the public begins to distrust paper assets and turns to gold for a safe haven. When all else fails, governments rescue themselves with the printing press, making their currency worth less and gold worth more. Gold has always increased in value when confidence in government is at its lowest. Isn’t this the current scenario in the world?
And, although not evident as yet, but soon to become apparent, a number of factors are conspiring to create the perfect inflationary storm: extremely expansionary monetary policies of the major Western governments, a long term decline in the dollar and the euro, higher oil prices, a mammoth trade deficit in the US, and America’s status as the world’s biggest debtor nation.
The early 1980s presented an once-in-a-lifetime opportunity to buy stocks. Today, economic and political conditions appear to offer a similar opportunity in tangible assets. The macroeconomic and political landscape has not looked like this since the hard asset bull markets of the 1970s. The global economic and financial market climate looks increasingly precarious. Financial imbalances have never been greater. Many countries have experienced housing bubbles and now have huge budget deficits as well as burgeoning national debt. Global trade imbalances are at unprecedented levels. The U.S. has no ability whatsoever to pay back its enormous debt, which has been stated at around $50 trillion plus dollars and not the $14 trillion the government state. If this is true, then the interest payments alone on the US debt are unsustainable. To make matters worse the biggest buyers of US debt no longer want this paper and instead are trying to cut their exposure.
The US national debt has grown so huge that the only way to pay for it is to borrow more, just like a huge Ponzi scheme. In the coming decade, we may witness one the greatest meltdowns in monetary history, as the dollar and euro decline in value. And, as this happens gold will become an important component in the global financial system.
The recent $600 billion quantitative easing plan is simply hiding the fact the US economy doesn’t have the economic base to grow its way out of this mess. And, as far as I am concerned it is not going to help reduce the high rate of unemployment either. If the latest non-farm payroll figures are anything to go by, then one can clearly see how ineffective the Fed’s program of quantitative easing has been regarding the reduction of the high level of unemployment in the US. The latest figures that were released on Friday, showed an expansion in employment of only 39,000 in November compared to markets expectations of 142,000. And, overall unemployment also jumped sharply from 9.6% to 9.8%. Even if the US economy was able to add say 50,000 new jobs per month, it would take around 15 years to get back to the levels that were last seen before this financial crisis that began in August 2007.
Furthermore as the U.S. maintains its low interest rate policy and billions of dollars flow to other countries around the world for higher returns, we will see a wave of reactive monetary policies from other countries in order to protect their currencies from increasing in value as the dollar continues to weaken. This chain reaction will send the dollar lower, but it will also make gold’s $1,400 an ounce price look like a bargain by the end of next year.
If you think this scenario is bad, think again. It gets worse when we consider the conditions prevailing in the Eurozone. Only last week the European Union warned that the turmoil over Eurozone debt is now a threat to growth, which will slow next year. The EU Commission said growth in the 16-nation Eurozone economy will slow to 1.5% next year from 1.7% this year but then pick up to 1.8% in 2012. It also adjusted radically downwards Ireland’s growth forecast, to 0.9% next year, from 3%.
Last week as borrowing costs for Ireland, Portugal and Spain soared, spreads on Italian and Belgian bonds jumped to a post-EMU high as the selloff extended beyond Ireland, Portugal, and Spain, raising concerns that the crisis could start to turn systemic.
While I do not want to appear as a doctor of gloom, the reality of the current situation is not good. We have massive government budget deficits, burgeoning national debt, expansionary monetary policies that will not rectify the high levels of unemployment but will debase the value of the US dollar and euro, and slow GDP growth in most western countries. We also have governments falsifying economic data, and price manipulation in gold and silver. We also have bank bailouts as well as country bailouts. And, we have politicians who are not trustworthy, corrupt bankers, traders and government officials, not to mention geopolitical tensions. In such a scenario, one would be well advised not to be hoodwinked by the usual political rhetoric and take precautionary measures to protect your wealth. The one sure way to do this is to own gold and silver.
Since October, the price of gold has held above $1325 an ounce. Now, it is testing the resistance at $1425. A beak above this level could establish a new trading zone for the yellow metal.
About the author
David Levenstein began trading silver through the LME in 1980, over the years he has dealt with gold, silver, platinum and palladium. He has traded and invested in bullion, bullion coins, mining shares, exchange traded funds, as well as futures for his personal account as well as for clients. www.lakeshoretrading.co.za
Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice.
(BN) Copper Faces 2-Year Shortage, Peak Over $10,000, Trafigura Says
2010-12-07 09:29:56.282 GMT
By Claudia Carpenter
Dec. 7 (Bloomberg) — Copper supplies will lag demand for
at least the next two years, with prices peaking over $10,000 a
metric ton in the second quarter next year, according to
Trafigura Beheer BV, which considers itself the world’s second-
largest trader of industrial metals.
Copper will move from a balanced market this year to
shortages of 800,000 tons in both 2011 and 2012 at current
prices, Simon Collins, head of refined metals at Trafigura in
Lucerne, Switzerland, said in an interview yesterday. That’s
even before demand climbs as exchange-traded funds backed by the
metal are introduced, he said.
Such funds “will result in higher prices, which in turn
will affect price-sensitive demand and price-sensitive supply,”
Collins said. “Consumers are concerned about an ETF.
Inventories are already relatively low.”
Copper prices are up 21 percent this year, and reached a
record $8,973.50 a ton today, partly as manufacturers and other
buyers who anticipate shortages build inventories to meet demand
for next year, Collins said. Imports into China, the world’s
largest consumer, typically are strongest in the second quarter,
helping to boost copper prices and leading gains in lead, nickel
and aluminum, he said. Copper stockpiles tracked by the London
Metal Exchange have slid 30 percent this year.
In 2006, the copper market was also forecast to have a
large deficit when higher prices brought the market further into
balance than originally estimated, Collins said. If prices rise,
next year’s deficit may be only 400,000 tons, he said.
Trafigura trades about 1 million tons of copper a year,
Collins said. Glencore International AG is the largest trader of
industrial metals, according to Trafigura estimates.
Trafigura is preparing for more metals demand by customers
and increasing its warehouse capabilities through its subsidiary
NEMS, with plans to expand in the U.S. next year for the first
time with storage facilities in Baltimore and New Orleans, as
well as in China, Collins said. He declined to give an estimate
of the investment.
Copper demand may rise if JPMorgan Chase & Co., BlackRock
Inc. and ETF Securities Ltd. start ETPs backed by the metal, in
line with plans announced by all three companies in October.
For Related News and Information:
Top commodities: CTOP <GO>
Top shipping: SHIP <GO>
Searches: NSE <GO>
Commodity curves: CCRV <GO>
–Editors: Dan Weeks, John Deane.
To contact the reporter on this story:
Claudia Carpenter in London at +44-20-7330-7304 or
To contact the editor responsible for this story:
Claudia Carpenter at +44-20-7330-7304 or
For reference, here are the gold miners with operations in the Ivory Coast:
Cluff Gold (Market Perform, no target, CLF LN, mkt cap £150mm)- A producing mine in the Ivory Coast that accounts for approx. 25% of our NPV. Key asset is in Burkina Faso and an exploration play in Sierra Leone
Newcrest (Outperform, A$52.50, NCM AU, mkt cap A$31.1bn) – The Ivory Coast assets are only 4% of our project NPV, but the exploration upset
La Mancha (not rated. LMA CN, mkt cap C$368mm) – Highly levered to the Ivory Coast, with existing production from the country and many exploration targets.
Perseus (not rated. PRU AU, mkt cap A$1.3bn) – Main development project is Tengrela in the Ivory Coast, with a feasibility expected by year-end and production possible in late-2012
Randgold (Outperform, target US$125, RRS LN, mkt cap £5.5bn) – Growth asset Tongon is in the Ivory coast and is ramping towards production by the end of the year. The mine is 30% of our project NPV
Please see attached map from our West Africa gold analyst, to see locations of each asset in the country.
ABIDJAN, Ivory Coast, Dec. 3 (UPI) — The United Nations
has urged Ivory Coast election rivals to refrain from violence
while officials try to determine who won a presidential runoff.
The Army sealed borders after Ivory Coast’s electoral
commission announced that opposition candidate Alassane
Ouattara defeated incumbent Laurent Gbagbo, the BBC reported.
However, the Constitutional Council said the announcement
is invalid, alleging voter fraud by Ouattara.
The army announced it closed Ivory Coast borders. It also
said it would suspend foreign news organizations from reporting
The election, the first presidential election in a decade,
was intended to reunify the nation, which was torn by a civil
war in 2002.
The United Nations received reports of violence in parts
of the west and north during recent voting but said overall the
election seemed peaceful.
“Our job is to remind them of their promises and
commitments and especially not to use violence,” said U.N.
spokesman Hamadoun Toure.
“They have to abide by electoral law, they have to keep
their promise during the campaigning that they won’t use
violence to settle disputes and they also said they’d abide by
the results,” Toure said.
The Constitutional Council has one week to publish
official results of the election.
Ivory Coast is the world’s largest producer of cocoa.
Copyright 2010 United Press International, Inc. (UPI). Any
reproduction, republication, redistribution and/or modification
of any UPI content is expressly prohibited without UPI’s prior
All rights reserved.
-0- Dec/03/2010 14:49 GMT
GlobalPost featured this article in “Great Weekend Reads,” a free compilation of the week’s most colorful stories. To receive Great WeekendReads by email, let us know at firstname.lastname@example.org .
RIO DE JANEIRO, Brazil — They’ve snapped up iron mines in the south, bought into oil fields off the coast, and they may be trolling for 850,000 acres of farmland, too.
While Chinese investors spent the last decade buying up natural resources across Africa, this year they’ve begun an unprecedented shopping spree in Brazil. In less than 12 months, Chinese investment has jumped by orders of magnitude — from a registered $82 million in 2009 to more than $25 billion in planned projects reported so far this year.
“It’s the first year where big, big investments — tens of billions of dollars — have been announced,” said Kevin Tang, a director at the Brazil-China Chamber of Commerce and Industry. “This decade will be one where we see an investment boom between China and Brazil.”
Chinese companies have announced more than $25 billion in Brazilian investment deals to date in 2010, according to a tally of deals tracked by the government and reported in the press. Billions more are reportedly in negotiations.
Experts say China’s interest in resource-rich Brazil could be a boon, but only if the government ensures the bulk of the money goes toward Brazilian industrial production rather than raw materials. Others call China’s move a wake-up call to the United States and other developed nations. In the global race for natural resources like oil, analysts say, finding renewable sources of energy is the only way to win in the long run.
“China’s needs for resources, especially energy, are going to grow exponentially in the decades ahead. And the fact is the world doesn’t have all that much more to give,” said Michael Klare, a professor of peace and world security studies at Hampshire College in Massachusetts and author of the book “Rising Powers, Shrinking Planet.” 
“There will be greater competition for what remains of the world’s resources.” Klare said. “And this will lead inevitably to friction until and unless we in the West, and China and India move very rapidly to more energy-efficient, more resource-efficient modes of living. And there’s a lot of talk about that but not a lot of real progress.”
Instability, corruption and oppression in many of the world’s biggest oil-producing nations are oft-cited reasons for America’s need to find renewable energy sources. But China’s seemingly insatiable appetite for resources should be another motivation, said Charles Wolf, senior economic adviser at the non-profit think tank The RAND Corporation. Wolf says the search for alternatives is well underway.
“We should be moving and we are,” he said. In that sense, China’s ever-growing demand for natural resources “may be a problem, it may be an opportunity.”
Many Brazilian analysts agree. This year’s investment surge is just the latest demonstration of the increasingly close relationship between Brazil and China, which surpassed the United States last year to become Brazil’s biggest trading partner.
“The expansion of trade and of investment is very beneficial for the country, with one qualification,” said Sergio Amaral, chairman of the China-Brazil Business Council. “Sometimes you don’t know whether the investments are looking for Brazil as a market or whether they correspond to strategic purposes of the Chinese government.”
Amaral, a former minister of development, industry and foreign trade, notes that even private Chinese companies have very close ties to the Chinese government, and some of the investments here have been undertaken by state-owned Chinese companies.
“The economic exchanges between the two countries are increasing fast,” Amaral said. “Sometimes I have the impression that the Brazilian government is not as well prepared as it will need to be to cope with the new situation — a new nature and a new magnitude of investments.”
He says the government needs to ensure the various agencies in charge confirm the Chinese are investing on the merits, and not for strategic purposes like fixing prices of raw materials.
The government also must try to channel the Chinese cash into sectors that will help the Brazilian economy grow, he said. Selling manufactured goods tends to provide more jobs and economic growth for the country making those products. They make up about 90 percent of what Brazil imports from China, while Brazil chiefly sends back raw materials like iron ore, oil and soy.
Chinese manufacturers are hard to compete with because they operate with advantages — low-interest loans, low taxes, new infrastructure, a devalued currency — which simply don’t exist in Brazil. Brazil’s roads are crumbling, its interest rates soaring and its real ranks among the most overvalued currencies in the world. And so it’s little surprise Chinese imports often out-compete locally manufactured goods.
It’s a dynamic repeated across Latin America, but “in the case of Brazil it’s even worse,” said economist Alexandre Barbosa, a professor at the University of Sao Paulo.
“Brazil is the country that has the most developed industry on the continent,” Barbosa said. “So China is displacing some of our exports in other countries of the region.”
This is bad for some manufacturers, and could be bad for the country as a whole if the manufacturing industry starts to shrink. Barbosa says Brazil can protect itself by directing investment to the right places, particularly high-technology industries.
“The Chinese are sitting on a tremendous amount of foreign reserves,” he said. “So why don’t they use their banks to establish a semi-conductor company here in Brazil. We don’t produce semiconductors here, so that would be amazing.”
But making this happen will require an aggressive effort by the Brazilian government to negotiate favorable trade and investment.
Brazil’s foreign trade secretary at the Ministry of Development, Industry and Foreign Trade, Welber Barral, said efforts to do so are underway.
“We have an investment policy that is very focused on bringing innovation and adding value to the Brazilian companies,” Barral said.
He cited the highest profile example — a multi-billion-dollar steel mill under construction in the state of Rio de Janeiro — along with other, smaller investments. The Chinese company H-Buster announced this year a $225 million expansion in Brazilian factories to make LCD screens. At least two companies are spending tens of millions to increase production of motorcycles, Barral said, and others are building auto factories.
Nevertheless, most of China’s biggest Brazil deals announced this year have been for commodities — the $1.2 billion purchase of an iron mine in the state of Minas Gerais; $7.1 billion to buy the Brazilian oil operations of the Spanish company Repsol, another $3.1 million for shares in an offshore oil field owned by the Norwegian company Statoil.
The most contentious investments appear to be in farmland. Several reports in the press regarding Chinese plans to buy hundreds of thousands of acres of farmland have sparked worries that China’s investment amounts to a land grab.
The newspaper O Estado de Sao Paulo ran an editorial in August that raised the specter of neocolonialism. It said that foreign investment is generally welcome, “but ‘business’ takes on another meaning when investments are subject to the strategic rationale of a foreign power.”
And the government seems to have responded. Secretary Barral pointed to a recent reinterpretation of Brazilian law, declaring that government approval will be required for large purchases of land by foreigners.
The Chinese government has shown a willingness to try other options. This month the governor of Goias announced a deal for up to $7.5 billion in Chinese investment for agriculture in the state of Goias. Early reports indicated the money will be used to turn 6 million acres of pasture into soy farms, and everything they produce will go directly to China.
When the deal was announced, the Goias secretary of planning and development, Oton Nascimento Junior, made a point of saying that China won’t own the land. The money will instead go to local producers to build roads, buy equipment, improve the soil and finance production.
“There is nothing here involving land purchases,” the secretary emphasized. “This is purely a partnership.”