It's interesting the spin major media puts on events in the resource sector. Like this week -- when one of the big discussion points was a report from the World Platinum Investment Council (WPIC) discussing the current state of the platinum market, as well as supply and demand fundamentals for the metal going forward. Most news services seized on one fact: that the WPIC is forecasting a platinum supply deficit of 445,000 ounces for 2015. And that's considerably lower than the 785,000-ounce deficit the market saw during 2014. Related: Does Selling Oil From The Strategic Petroleum Reserve Make Sense? There was…
I've written over the past year of my high hopes for one of the world's most under-explored -- and high potential -- nations. Madagascar. This African island has some of the most prospective geology anywhere on Earth. And the little bit of work conducted to date across the country has unearthed world-class nickel, graphite, and titanium mines -- as well as strong potential for gold, coal, vanadium, and rare earths. But news last week suggests an exploration boom isn't in the cards here anytime soon. In fact, this may be a spot for project developers to actively avoid. Related: Is Apple…
While oil prices in the U.S. plummeted below $39, Canadian explorer Madalena Energy has forged ahead with a strong Q2 showing and preparations for its first horizontal multi-stage frack in Argentina, where oil prices defy the market at an amazing U.S.$77.Madalena’s strong showing is not only spurred by high oil prices in Argentina and the country’s U.S. $11 million-plus incremental incentivized oil programs, but the company has a strong balance sheet, has kicked off a three-well, back-to back horizontal program and is now preparing to launch a new high-impact well to test two major resource plays. It’s also planning its…
How long will it take before metals prices start to rebound? No one knows for sure -- but one of the indicators to watch is when the world's biggest mines begin to shut down because of poor economics. And we got not one, but two, examples this week of mine closures from some of the world's largest metals producers. The first was base metal major Glencore. With the company saying Monday it will close two of its largest copper mines in Africa -- for at least 18 months. Related: Desperate Putin Not Giving Up On Asia Just Yet The company said…
Big news this week in the platinum sector. Confirming that this space is seeing some of the most critical shifts anywhere in the natural resources world. As has been the case over the last few weeks, the developments center on the world's largest platinum producing nation, South Africa. Where industry is contemplating a unique strategy to save the embattled sector. As reported by Reuters, a sweeping new accord has been drafted between South African platinum mining companies, labor unions, and the government. With one of the key points being a plan to increase central bank holdings of platinum as a…
I wrote earlier this month about speculation that investment funds were circling mining operations in Chile. And this week, the rumours were confirmed. As reported by local Chilean press, the buyer of Anglo American's for-sale copper assets in the country was confirmed as the U.K.'s Audley Capital. A billion-dollar hedge fund specializing in natural resources. Audley will now take control of the Mantoverde and Mantos Blancos mines. In partnership with Orion Mine Finance Group. Related: Midweek Sector Update: As China Disappoints All Eyes Are Turning To Riyadh The buy confirms a trend that's been shaping up of late -- namely, the…
One of the biggest legal shifts in the mining business recently has been conflict minerals law in the U.S. And this week, the rules took another major turn. That's because of a ruling from the Washington, D.C. Circuit court on Tuesday. Which struck down large swathes of new rules that the Securities and Exchange Commission (SEC) has been trying to impose around conflict minerals. Those rules have been evolving since 2010 -- when Dodd-Frank legislation mandated the SEC to take a harder line on conflict materials. With the backbone being forced disclosure about the sources for minerals produced and processed…
And the last two days we got a flurry of news confirming this trend in motion. First from the world's largest producing nation, South Africa. Where another mine looks about to shutter -- perhaps permanently. Glencore Plc will close its Eland platinum mine, according to reports from Bloomberg yesterday. With officials from local labor unions saying the operation could be "lost forever." Eland is one of two platinum operations owned by Glencore in South Africa. Which together produce about 157,000 ounces per year -- suggesting that the production losses from Eland's closure will be significant. Related: A Key Tool For Energy…
Return on average capital employed has emerged as a key measure of efficiency in capital-intensive industries, especially in the energy sector. However, what initially seems to be a relatively easy measure becomes complicated given the differences in how various companies calculate these returns. After a perusal of the annual reports of the major integrated oil and gas firms, this becomes apparent with some firms giving quite different results for their return on (average) capital employed (ROACE). So, finding the ROACE on company balance sheets, and directly comparing these figures, will not give you an accurate understanding of capital efficiency between…
I wrote two weeks ago about substantial production cuts coming in platinum. And now it looks like the situation is about to get more dire. That's according to a report released this week by industry watchdog World Platinum Investment Council (WPIC). Which shows that the 100,000 ounce/year production cuts announced by Lonmin last month are just the tip of the iceberg for this sector in crisis. The WPIC report shows that platinum production in South Africa -- the world's largest producing nation -- is likely to fall by 600,000 ounces, or 16%, next year. Touching 3.4 million ounces for 2016…
