|Day's Range||2.5850 - 2.5965|
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On...
Investing.com - Gold prices dropped on Friday, giving back a small portion of August’s gains, as sovereign debt yields pulled away from historic lows and signs of economic stimulus boosted risk sentiment.
The Zacks Analyst Blog Highlights: Equity Lifestyle Properties, Equity Residential, Kinross Gold, Barrick Gold and Kirkland Lake Gold
Zambia's leader on Wednesday held talks with the chairman of Vedanta Resources after the copper mining giant faced expulsion from the country for allegedly failing to pay taxes, the presidency announced. London-based Vedanta is the majority owner of Zambia's largest copper mining firm, Konkola Copper Mines (KCM), which has been at the centre of a standoff with government. The state-owned ZCCM-IH is a minority shareholder in KCM.
The incoming chief executive of Chile's state copper miner Codelco said he was "optimistic" about the long-term market price of copper despite the global volatility caused by the U.S.-China trade war. "There is a lot of volatility at this moment because of everything that's happening in the world, but we remain optimistic about the long-term outlook (of the copper price)," Octavio Araneda told journalists on Wednesday. In April, Chile's state copper commission Cochilco held its estimate for the price of copper at $3.05 per pound, rising to $3.08 for 2020 on improving prospects for growth in China.
(Bloomberg) -- Machines are taking over a giant Chilean copper mine, replacing about a third of the workforce as owner Codelco struggles to keep its title as the world’s largest producer of the metal.Codelco officially inaugurated underground operations at its century-old Chuquicamata mine on Wednesday. The $5.5 billion project is the first of the state company’s multi-billion dollar effort to upgrade mining activities in order to boost productivity. The miner’s output fell to 1.68 million tons last year, from 1.73 million a year earlier as its higher-grade ore reserves decline.About 1,700 jobs will be cut at the Chuquicamata project as operations shift to underground mining, from open pit. The switch is necessary as the state-run company aims to access higher grade ore through tunnels underneath the pit to avoid a production slump in the coming years.“Reforms have never been painless, but we must do them,” Codelco Chief Executive Officer Nelson Pizarro said in a speech during the inauguration. “Digital transformation is our ally, the only thing that can help us satisfy environmental requirements, lower costs and empathize with communities.”The underground mine will use conveyor belts to transport the mineral. It will need fewer truck drivers, and workers with different skills. The open pit will be shut at the end of 2020.Workers won’t go without a fight. In July, about 3,200 Chuquicamata machine operators and maintenance workers staged a 14-day strike. Unions demanded to have a bigger say in the transition underground and retirement benefits for the people who won’t be employed in the new mine. The agreement reached at the end of the labor dispute included guarantees that Codelco will provide health coverage for miners after they retire.Chuquicamata underground is a mine that will use the block-caving method to extract the mineral. Also implemented by Freeport-McMoRan Inc. at its Grasberg mine in Indonesia, it’s more efficient and cheaper than traditional underground mining. The method will reduce fuel consumption by 80% and automation will increase workers’ productivity by 40%.“Mining will be a great business only for those willing to change,” Pizarro said. “After 104 years of uninterrupted activity, the world’s largest open pit mine is transformed today into one of the most modern underground mines in the world.”To contact the reporters on this story: Laura Millan Lombrana in Santiago at email@example.com;Daniela Guzman in Santiago at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Joe RichterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- As automation reshapes financial markets around the world, there’s still one place where handshake deals are the norm and using technology means bcc-ing bids and offers over email.The complex and antiquated world of steel -- among the oldest industries in America -- is one of the last lines of defense against the bots. Instead of a computerized market where orders ping-pong back and forth in milliseconds, a large bulk of the industry’s transactions are done in annual contract deals, with agreed-upon prices and volumes. Unlike most commodities, there’s hardly a futures market and when steel does trade, it’s by phone or email.The situation in the $900 billion steel market has almost no parallels. On the plus side, there’s more price stability, which saves producers like U.S. Steel Corp., ArcelorMittal and Nucor Corp. from having to spend billions hedging future output. Customers with cozy relationships can get sweetheart deals. But to critics, the status quo is inefficient and lacks transparency, which means buyers can end up paying too much. That could lead to higher costs for consumers on everything from cars to refrigerators, at a time they’re shouldering part of the burden of President Donald Trump’s steel tariffs.“The reality is something needs to change,” said Todd Leebow, chief executive officer of Majestic Steel USA, which buys steel from mills and processes it for sale to end users. Steel is “not really an efficient marketplace.”There are plenty of explanations for why “financialization” has yet to gain a foothold in the steel industry. Myriad products -- reinforcing bar, hot-rolled coil, stainless steel, etc. -- have made it hard for standardized contracts to gain much traction. Steel mills also have a history of prioritizing relationships over economics. But you could also argue a key reason the industry has been so slow, and maybe even hostile, to updating how it trades is that big producers have long had a stranglehold on setting prices.Modern steel production in the U.S. can be traced back to the Bessemer Process from the mid-1800s, which converted heated iron into molten metal and was key to the industrial revolution. These days, the steel industry is one of the largest in the world of commodities, with production of over 1.8 billion tons a year. Output for copper and aluminum is just a tiny fraction of that.Yet there’s nothing modern about how the market trades. Once a year, or sometimes every month or quarter, the largest U.S. steel mills determine how much they’re willing to sell various products at what price. The majority of these bilateral deals are based off the Midwest hot-rolled contract, using an index from research firm CRU Group. These types of deals accounted for roughly 60% of sales at the five biggest U.S. producers last year, data compiled by Bloomberg show.What’s bought the rest of the year is usually done on an as-needed basis, often between service centers, which warehouse and process steel purchased from mills, and users. Price depends on volume, delivery point and relationships.Attempts to drag steel into the 21st century have largely flopped. In 2008, the London Metal Exchange, the largest market for industrial metals derivatives, launched its futures contract for steel billet. (Billets are essentially long bars.) Hopes were high, but demand never materialized. Martin Abbott, the CEO at the time, says the industry often just absorbed price changes rather than hedging its risk. Trading in the physically settled contract was suspended in 2017.When LME started a program to attract algorithmic trading firms -- which use computers to take quick advantage of small changes in price and volume -- to steel and other lesser known metals, it “caused a lot of consternation from our more traditional traders who don’t have the same speed advantage,” current CEO Matthew Chamberlain said. A big concern was that algos were “jumping in front” of certain orders and artificially driving prices higher or lower. The exchange ultimately wound down that program, too.Last month, open interest in hot-rolled coil futures was just 19,031 contracts in New York, versus roughly 273,000 contracts for copper and 2.1 million for oil. Even fewer futures contracts actually traded, where volume remains minuscule.“It’s one of the biggest commodities but it’s got the smallest percentage relative to its futures market,” said Massar Capital Management’s Marwan Younes. His $235 million global macro fund trades metals like aluminum, zinc, copper and nickel, but stays away from steel.Another issue is that there’s no central hub for delivering steel, like Cushing, Oklahoma, for crude oil. Deliveries are fragmented regionally so producers exert greater control over supply, which lessens the need for them to protect themselves against price fluctuations.The U.S. steel industry has, in any case, often turned elsewhere to hedge its risks: Washington D.C.In March 2018, Trump issued a broad tariff on steel imports that threaten U.S. producers and endanger national security. It was the latest chapter in the long history of protectionist policies involving American steel and comes as the industry ramped up lobbying last year to a more than two-decade high.All of which means Big Steel has little incentive to change. In aluminum, pricing power wielded by Alcoa and other large producers kept widespread adoption of futures at bay for over a decade after the contract was introduced in 1978. It wasn’t until the early ’90s -- when the breakup of the Soviet Union caused a glut of supply to hit global markets and prices plunged -- that the industry embraced derivatives.“The inertia from people in the trade is that they don’t want to see their product as a commodity,” said Shan Islam, head of ferrous trading at Amalgamated Metal Trading, a London-based market maker. Not only do they lack an understanding of how hedging works, “they’re pushing back against that because they want to command a premium.”The problem is a lack of transparency. Bilateral deals are negotiated privately and discounts can vary by buyer. That gives mills a degree of pricing power over contracts as well as in the spot market. Moreover, higher costs often get passed along down the supply chain, inflating the cost paid by consumers.In recent years, the LME has even tried to boost trading in steel futures by paying firms to make markets on its electronic platform. Rebates, which are commonplace in equities, aren’t offered for any other contract. The model has been hotly contested, though it has helped steel volume slowly pick up. Even so, the numbers remain a far cry from what’s typical in other commodities.“Until you get a mechanism that’s trade-able, hedge-able and transparent, plenty of folks will say this is a business or market that’s more risky than we want to get involved with,” said Tai Wong, the head of metals derivatives trading at BMO Capital Markets.To contact the reporters on this story: Catherine Ngai in New York at firstname.lastname@example.org;Joe Deaux in New York at email@example.comTo contact the editors responsible for this story: David Marino at firstname.lastname@example.org, ;Luzi Ann Javier at email@example.com, Michael Tsang, Joe RichterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Government geologist Gino Casassa steps down from the helicopter and looks around in dismay.Casassa is standing at the foot of a glacier, 4,200 meters (13,800 feet) above sea level. The sky over the Andes is a deep blue, but something is not right: It’s July—mid-winter in South America—and yet it’s mild for the time of year, above 0 degrees Centigrade. He takes off his orange ski jacket and walks on the bare rock.“This should all be covered by snow this time of year,” he says, pointing to Olivares Alfa, one of the largest glaciers in central Chile, just a few meters away. “There used to be one single glacier system covering this whole valley; now it’s pulled back so much that it’s divided into four or five smaller glaciers.”Chile has one of the world’s largest reserves of fresh water outside the north and south poles, but the abundant glaciers that are the source of that precious commodity are melting fast. That’s not just an ecological disaster in the making, it’s rapidly becoming an economic and political dilemma for the government of Latin America’s richest nation. A toxic cocktail of rising temperatures, the driest nine-year period on record and human activity, including mining, is proving lethal for the ice of Chile’s central region. Built up over thousands of years, the ice mass is now retreating one meter per year on average. Less than two decades from now, some glaciers will have disappeared, while the total volume of all glaciers in Chile will have shrunk by half by the end of the century, says Casassa. That’s an acute problem since Chile, which has 80% of South America’s glaciers, is also the Americas country most at risk of extremely high water stress, according to the World Resources Institute. More than 7 million people living in and around the capital, Santiago, rely on the glaciers to feed most of their water supply in times of drought.Chile’s government is well aware of the issue. A glacier unit was established in 2008 and tasked with producing an inventory of glaciers with the aim of protecting them and raising awareness of their importance. But its resources are limited: it had a staff of just seven last year—Casassa is the unit’s director—and has so far published a single register of glaciers, in 2014, using decade-old data. The unit is due to issue a second inventory later this year allowing the first ever comparison of all Chile’s glaciers. Not everyone is content to wait. An opposition bill now before parliament aims to lock in legal protection for glaciers. But President Sebastian Pinera’s center-right government has come out against it, arguing that if implemented, the measures would harm Chile’s economic development, and specifically its lucrative mining industry.Glaciers happen to cover some of the massive copper deposits that make Chile the world’s largest producer of the metal, with about a third of the world’s copper output coming from its mines each year. Mining is key to Chile’s economy, making up 10% of its gross domestic product and comprising just over half its exports. That economic reality is at the heart of the government’s quandary, evaluating the trade-offs required to protect the environment while supporting an industry worth some $19 billion to the economy. Chile’s minister for mining, Baldo Prokurica, insists the twin aims are not mutually exclusive.“Mining can be done without damaging the environment and that’s what we want to do,” Prokurica said in an interview in Santiago, pointing out that countries with similar challenges such as Canada, Norway and the U.S. have higher environmental standards and still manage to mine without a glacier law. The bill proposes all glaciers and their surroundings become protected areas, bans non-scientific interventions and considers any violations of the rules to be crimes. That’s too broad brush for Chile’s government, which plans its own environmental legislation. “I believe in preserving the glaciers, but also in mining,” said Prokurica.Pinera’s minority government is still on the back foot over the bill in the same year that it’s due to host the United Nations COP25 climate change summit, making it an easy target for charges of hypocrisy by opponents. “If they don’t support the glacier bill, it will show their bid for COP was playing to the gallery,” says Guido Girardi, the opposition senator who sponsored the legislation. “We’re facing a catastrophe and not protecting glaciers is not an option anymore.”Glaciers have long been the bane of the mining industry. During the 1970s, state-owned copper miner Codelco removed glaciers covering a rich deposit in the mountains northwest of the capital to allow development of its Andina mine. At a time when Chile had almost no environmental protections, the act was celebrated as a great feat of engineering. Scientific advances mean that it’s now known glaciers help lower temperatures and increase air humidity for a 50-kilometer (30-mile) radius. They’re also the reason that rivers in central Chile carry about the same volume of water during the current extreme drought as in normal conditions. In a dry year, as much as two-thirds of the water in river systems feeding Santiago comes from the glaciers high up in the Andes.The upshot is that as drought conditions become more prevalent from Cape Town to Chennai in India, Chile remains relatively sheltered. Some 70% of the country’s population of 18 million lives in areas where glaciers make the difference.But that natural safety net is coming under increasing strain. While most mines in Chile are in the country’s northern Atacama desert, miners are moving south in search of newer and richer deposits—and encountering glaciers on the way. “Requests to explore and mine in areas with a large presence of glaciers are only increasing,” said Francisco Ferrando, a glaciologist and professor at Universidad de Chile in Santiago.Most of Chile’s glaciers are in the southern Patagonia region, and while a few are located inside national parks and hence protected, the majority aren’t, meaning that any intervention is treated on a case-by-case basis. White glaciers, where the ice is in direct contact with air, enjoy wider protection than less well-known rock glaciers—masses of frozen water that have sat beneath layers of rock for millennia.An academic paper from 2010 found that a third of all rock glaciers in central Chile had been directly impacted by mining activities such as road building, drilling platforms and depositing waste on top of the ice. In addition, dust from trucks and explosions in pits as well as vibrations from heavy machinery accelerate the melting. Mining itself is water intensive since it’s needed in each step to produce copper, with usage forecast to rise.Almost every large mining company operating in Chile has impacted glaciers, including Anglo American Plc. at its Los Bronces mine and Antofagasta Plc. at Los Pelambres, according to the paper.Anglo American’s Los Bronces operation and Codelco’s Andina mine are exploiting the world’s largest copper deposit in the Andes, about 40 miles from Santiago. Only a rock ridge separates them from the Olivares Alfa glacier. The two giant pits, the mining trucks and dust from the explosions are clearly visible from a helicopter. With both companies planning new billion-dollar projects to maintain production at current levels, alarm bells have been set off among environmentalists, who say that mining is hastening the process of desertification.It’s a charge miners reject. Joaquin Villarino, the president of industry group, Mining Council, has said that glaciers are shrinking because of climate change, and that pollution from transport and other industrial activities in Santiago are also having an impact. The glacier bill contains “serious errors,” he said. All the same, miners are taking action. While Codelco is doing early engineering work on an expansion of its open-cast Andina mine, its sister mine, Los Bronces, will go partly underground in a $3 billion plan to avoid impact on the surface. Owner Anglo American “acknowledges the importance of glaciers and has the conviction that mining activity and the preservation of the environment can coexist,” the company said in an emailed response to questions. Codelco declined to comment on its plans for Andina.Pinera’s administration is going on the offensive. Approval of the glacier bill would force four mines including Andina and Los Bronces to halt operations, costing billions of dollars and more than 34,500 jobs, according to a report by the government’s copper commission Cochilco. Copper output would fall by 11% through 2030, impacting global metals markets, it said. Casassa, the geologist, sees the impact of climate change accelerating but shares the government’s assessment that there is no need for specific glacier legislation. The government may be powerless to stop the bill, however, since it lacks a majority in either chamber of parliament. Lawmaker Girardi says it could clear both the senate and chamber of deputies by early next year, an outcome he sees as of global significance. “All the changes we are seeing, all the climate catastrophes across the world are just the beginning,” Girardi said. “Chile’s glaciers are strategic, not just for our country, but for all humanity.” \--With assistance from Maria Jose Campano and Samuel Dodge.To contact the author of this story: Laura Millan Lombrana in Santiago at firstname.lastname@example.orgTo contact the editor responsible for this story: Alan Crawford at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Copper exports from the port of Matarani have resumed after anti-mining protests that had blocked key infrastructure in the country's southern copper belt eased over the weekend, a spokeswoman for the port operator said on Tuesday. Shipments from four mines that produce about half of Peru's copper - Freeport-McMoRan Inc's Cerro Verde deposit, MMG Ltd's Las Bambas, Glencore PLC's Antapaccay and Hudbay Mineral's Constancia - had been suspended for nearly three weeks due to the unrest. The protests started after the government issued a construction permit for a new mine in the region - Southern Copper Corp's $1.4 billion Tia Maria project - that local farmers have opposed for nearly a decade.
Iron is back on the rise, creating jobs not only in mining operations but also in recycling efforts and transportation. The iron and steel industry relies heavily on railroads to transport materials between each step, from mining to the final product. This relationship will continue as long as iron and steel are being used because of their mass and the amount that needs to be hauled at one time.
Technical studies suggest that gold is ready for more gains, but a period of consolidation is needed due to overbought conditions. To the upside, resistance is at the mentioned 1,510. Then, check the 1,530, and the 1,560 for selling zones.
Mexico's President Andres Manuel Lopez Obrador said on Monday that his administration will not cancel any current mining concessions, but added that no new mining concessions will be handed out either. "Firstly, we're going to keep the current concessions and not hand out new concessions because they aren't needed," Lopez Obrador said at his daily press conference. Mexico is the world's top silver producer and one of the largest producers of copper and gold.
"We don't have a for-sale sign" at Tongon and Massawa, Bristow said in an interview in Toronto. While Barrick has said it will focus on its best-performing assets and look to divest the rest, it is also trying to extract more from its mines by stepping up exploration around them. The company is open to acquiring assets around Tongon from junior miners to extend its life, or selling the mine as part of a bigger transaction, possibly with Massawa, Bristow said.
Barrick Gold’s production rose 27 per cent in the second quarter as the world’s second-biggest gold miner edged closer to ending a tax dispute with the Tanzanian government. “That’s a lot of boxes ticked in a short time,” said Mark Bristow, Barrick’s chief executive, who took over the top job in January.
Peru on Friday suspended a recently issued construction permit for Southern Copper's Tia Maria mine, a project that has triggered violent protests by nearby residents. The permit will be suspended until government officials evaluate its legality along with objections from local authorities in the Arequipa region where Tia Maria, a $1.4 billion project, would be built, Energy and Mines Minister Francisco Ismodes told local broadcaster RPP.
The recent slide in copper prices threatens to limit investment in new mines, which could lead in coming years to sizable shortages of the material critical to manufacturing and renewable-energy projects.
Rio Tinto on Friday said it had moved a step closer to the development of a new copper project in Arizona, one of the few new major known deposits of the metal, with the potential to meet around a quarter of U.S. demand. Miners have been scouring the globe for sources of copper - a mineral they predict will be in high demand as the world shifts toward renewable power and electric vehicles. Resolution Copper, 55% owned by Rio Tinto and 45% by BHP, has spent years waiting for clearance from U.S. authorities to develop the underground mine.
Barrick Gold plans to start a formal sale process in the near term for all or a part of its stake, the report said, citing people familiar with the matter. The Tongon mine, located north of the Ivory Coast's port city of Abidjan, is expected to produce 250,000 ounces to 270,000 ounces of gold in 2019. The company is also working with Scotiabank to sell its Massawa gold project in Senegal and plans to divest its Lumwana copper mine in Zambia, according to the report.
Hong Kong Exchanges and Clearing will introduce its third new product in less than two months amid falling trading turnover and fewer IPOs.HKEX, which operates Asia's second-largest stock market will introduce a weekly options contracts based on the Hang Seng Index and Hang Seng China Enterprises Index from September 16."The introduction of these two options, which are plain vanilla options contracts that expire every week, will enhance the trading needs of investors, optimising their risk management capabilities," HKEX said in a statement."The contracts can be used to manage positions in response to short-term or specific events, such as economic figure announcements and have a short time to maturity and relatively low option premium." Hong Kong's finance chief says record currency reserves give it enough fire power to ward off any attack on currency, recession possibleOn Monday, the exchange launched US dollar-denominated "mini" futures for six base metals to track prices of aluminium, zinc, copper, nickel, tin, and lead. The size of these contracts is 5 tonnes compared with 25 tonnes traded on the London Metal Exchange.This was preceded by the introduction of in-line warrants on July 18, which was the first structured product launched in 13 years.These products are part of the three-year strategic programme announced by HKEX chief executive Charles Li Xiaojia in February to diversify the bourse's reliance on stock trading and include new assets classes to trade.Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing, announced a three-year diversification plan in February. Photo: Jonathan Wong alt=Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing, announced a three-year diversification plan in February. Photo: Jonathan WongThe stock market's turnover and funds raised via initial public offerings have been hit hard since the protests opposing the now-suspended extradition bill started on June 9.The average daily turnover in July fell 23 per cent to HK$68.7 billion (US$8.76 billion) compared with HK$89.6 billion a year earlier.Funds raised by IPOs in the first seven months of the year fell 30 per cent to HK$83.95 billion, down from HK$119.5 billion a year earlier.The exchange lost two mega IPOs in the past two months worth a combined US$11.04 billion after ESR Cayman and brewing giant Budweiser Brewing Company APAC shelved plans."Although two mega listings were cancelled for commercial reasons recently, we believe Hong Kong's stock market and IPO [scene] remain resilient and continue to be competitive," Financial Secretary Paul Chan Mo-po told a media briefing on Wednesday, after chairing the first meeting of the Financial Leaders Forum since the protests started in June.Julia Leung, deputy chief executive of Securities and Futures Commission, said at the same press conference that the regulator had conducted a thorough check of stockbrokers and the stock exchange's operations during the recent bout of market volatility, and found it to be working smoothly.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.