Archive for February, 2011

CHILE MINE RESCUE A DUD SCENE WITH DRAMAS EXCLUDED

Saturday, February 26th, 2011

Dramas cut from

Chile mine rescue

on TV, says author

February 15, 2011
Viewers "tricked" ... a miner is brought to the surface last year.
Viewers “tricked” … a miner is brought to the surface last year. Photo: AFP

THE ”live” televised rescue of 33 trapped miners in Chile, which appeared to the world as a flawless operation, was edited to disguise dangerous problems, a new book claims.

In a slick media operation the Chilean authorities covered up the fact that the rescue shaft had been destabilised and a rockfall had cut a cable between the surface and the chamber more than 600 metres underground.

The live TV feed was at one point interrupted and video clips from earlier on in the rescue recycled to allow emergency repairs to be carried out unseen during the 22-hour operation to haul the men up from the deep, which began on October 12.

The revelation comes in a book published today in Australia entitled Los 33, which charts the men’s entombment in the San Jose gold and copper mine deep below the Atacama Desert in northern Chile. ”A billion viewers around the world were … tricked,” said Jonathan Franklin, the author of the book, who gained special access to the rescue operation while most news media were excluded.

”They never realised that the image of perfection being broadcast was a rerun to cover up a dramatic chapter far too risky for the Chilean government to allow the world to see.”

The book provides an insight into the high-profile role played by the country’s President, Sebastian Pinera, who was at the surface of the mine and the first to greet the rescued men as they emerged from the Phoenix capsule into fresh air after more than nine weeks below ground.

But he had wanted to be the first man lowered down in the metal cage to join the miners underground, because he was ”enthralled” by the idea of personally vouching for its safety. ”Security aides to the President were apoplectic,” Franklin writes.

”Having already suffered in their attempt to protect a president who insisted on flying his own helicopter and scuba-diving, they knew he was serious. So did Cecilia Morel, the first lady. She immediately picked up the scent of a risky folly. Catching her husband’s eye, she told him to abandon the plan. ‘Don’t even think about it,’ she ordered. Though it ran against his instincts, Pinera obeyed.”

At one point during the rescue a heated argument broke out between the naval officers overseeing the extraction down below and a local official lowered down to help. The interloper was quickly forced to return to the surface under threat of force. But thanks to ”judicious editing … the world saw not a single second of this centre-stage drama”, Franklin writes.

The book also sheds light on the first 17 days following the mine collapse and before contact was made with the surface. During that time of extreme food rationing the men considered resorting to cannibalism.

Telegraph, London

Sourced & published by Henry Sapiecha


WIKILEAKS DOES IT AGAIN WITH CHINA, AMERICA & BHP BILLITON.READ ON…

Saturday, February 26th, 2011

BHP-Kloppers

‘offered secrets to the US’

Philip Dorling
February 15, 2011

BHP Billiton chief executive Marius Kloppers fears espionage from China, his business competitors and partners, and even the Australian government, but is eager to trade secrets with the United States, according to a secret cable released by WikiLeaks.

Mr Kloppers has also described doing business in Melbourne as being like ”playing poker when everyone can see your cards”, the cable says.

The comments were relayed to Washington after confidential discussions at BHP’s Melbourne headquarters between Mr Kloppers and US consul-general Michael Thurston.

Details of the meeting are among US diplomatic cables leaked to WikiLeaks and provided to The Age.

In a candid exchange with Mr Thurston, he also took personal credit for quashing what would have been the largest Chinese investment in Australia – state-owned Chinalco’s proposed $23.9 billion investment in Rio Tinto – a day before the deal collapsed.

He claimed BHP had won a strategic victory in encouraging the federal government to ”draw a line in the sand” against future large-scale Chinese investment in Australian resource companies and projects.

In his conversation with Mr Thurston on June 4, 2009 – the day before Rio walked away from a $23.9 billion deal with Chinalco – Mr Kloppers complained about covert surveillance against his company.

”Clearly frustrated, Kloppers noted that doing business in Melbourne is like ‘playing poker when everyone can see your cards’,” the consul-general reported to Washington. ”[Kloppers] complained that Chinese and industrial (Rio Tinto) surveillance is abundant and went so far as to ask consul-general several times about his insights into Chinese intentions, offering to trade confidences.”

He noted that Mr Kloppers also appeared concerned about surveillance by the Australian government. ”Kloppers even hinted about privacy concerns vis-a-vis the GOA [government of Australia],” Mr Thurston said.

After a further meeting between Mr Kloppers, Mr Thurston and then US charge d’ affairs Dan Clune in November 2009, the consul-general again reported that ”Kloppers has a keen interest in learning everything he can about the Chinese and is not shy about asking us for our impressions”.

After the June meeting, Mr Thurston reported to Washington that Mr Kloppers had confirmed that BHP ”had taken steps to derail” the proposed Chinalco investment in Rio.

”Despite Chinalco’s late May announcement that it would restructure its investment deal with Rio Tinto to allay [Australian government] concerns about the perceived Chinese influence on Rio Tinto, Kloppers confidently predicted on June 4 that the deal would fall through,” the cable reported.

Rio announced the next day, June 5, that it would not accept Chinalco’s bid to double its existing 9 per cent stake in the company by purchasing a convertible bond issue as well as purchasing minority stakes in a number of Rio assets. The proposed deal had been driven by Rio’s need to pay down massive debts resulting from its 2007 acquisition of Canadian aluminium producer ALCAN.

Describing himself as ”only nominally Australian”, the South African-born Mr Kloppers expressed the belief that Rio’s new chairman, Jan du Plessis, also a South African, would be ”more amenable” to a potential deal with BHP Billiton.

Immediately after pulling the plug on Chinalco, Rio announced a joint venture with BHP to combine their West Australian iron ore operations.

Other leaked US cables, reported by The Age in December, confirm BHP’s lobbying for Canberra to delay and if necessary block the Rio-Chinalco deal. Treasurer Wayne Swan’s chief of staff was reported as saying that ”BHP has played its cards with consummate skill”.

Speaking a day before the collapse of the Rio-Chinalco deal, Mr Kloppers said the federal government would be ”relieved if they did not have to turn down the Chinalco/Rio Tinto deal”. The US embassy in Canberra subsequently reported: ”BHP believes that it has scored a major victory by preventing a state-owned Chinese firm from influencing iron ore pricing negotiations from the producer side.

”BHP has been lobbying extensively to block the deal, highlighting concerns about Chinese investment and the possibility that seats on the Rio board would give the Chinese representatives important insights into the producer side of the annual iron ore price negotiations.”

Against the backdrop of intense lobbying of ministers and government officials over the proposed Rio-Chinalco deal, Mr Kloppers in the June meeting also expressed the view that the federal government ”would like to build up trade with China, but there is a ‘real fear’ of the Chinese government”.

”Australia does not want to become an open pit in the southernmost province of China,” he added.

Mr Thurston reported that ”Kloppers thinks the [Australian government] is drawing a line in the sand to keep Chinese state-owned firms from owning the larger mining companies such as Rio Tinto, BHP Billiton and Woodside”.

”He also believes Chinese state-owned firms would encounter heavy resistance should they make overtures at Australia’s telecommunications and banking giants.”

Last March, the Chinese government released a report on the collapse of the Chinalco-Rio deal, in which it cleared the Australian government of responsibility for killing it.

But the report singled out BHP for waging a behind-the-scenes campaign against Chinalco that helped fuel an Australian backlash and influence the federal government.

BHP Billiton  declined to comment.

Sourced & published by Henry Sapiecha

BHP BILLITON STRIKES GOLD IN AQUISITION FAILURE

Saturday, February 26th, 2011

BHP’s strategic success

from takeover failure

February 15, 2011

If there’s one thing the latest WikiLeaks missive reveals about BHP Billiton, it is that the company’s much derided takeover strategy hasn’t been the disaster that many large shareholders claim.

BHP supremo Marius Kloppers no doubt is smarting over the leaked cables from US consul general Michael Thurston back to his masters in Washington. They reveal the kind of candid comments one would expect in a meeting between a corporate heavyweight and a representative of the US government on sensitive issues regarding the world’s fastest-growing economy, China.

But the leaked cables also highlight just how successful BHP was in railroading the contentious tie-up between Rio Tinto and the Chinese government-owned Chinalco, a deal that would have been disastrous for Australia’s national interests and that would have seriously undermined BHP’s ability to operate in China.

BHP’s big institutional shareholders, particularly those in the UK, have made it clear that they have been underwhelmed by the vast millions of dollars spent on advisers and consultants since 2007 on three massive merger proposals that never eventuated. In recent months, they have called for a halt to the mega mergers and insisted the company return a large part of the cash being generated by the resources boom.

In particular, many questioned the wisdom of BHP’s much vaunted joint venture proposal with Rio Tinto’s West Australian iron ore operations. Why proceed down that path when it was clear European regulators raised objections about that very issue two years earlier when BHP launched its hostile takeover bid for Rio Tinto?

The answer is now clear. To stymie Chinalco, BHP needed to offer Rio Tinto an alternative. It needed to offer its great rival a compelling reason to dump the Chinese government, a legally binding, superior offer that Rio directors could not refuse.

At the time, Rio’s new chairman Jan du Plessis was looking for an exit strategy from the China deal. With commodity prices rebounding, the Chinalco deal – struck out of desperation by a debt-laden Rio – was looking even less attractive and Rio shareholders were in open revolt.

Kloppers handed him the perfect opportunity. And while much of the attention focused on the potential synergies of the iron ore merger, the real value rested in severing the link between the Chinese government and Rio Tinto, a link that would have delivered the world’s biggest consumer of iron ore control of the world’s primo deposits.

The value for BHP in successfully killing that deal? Immeasurable.

iverrender@smh.com.au

Sourced & published by Henry Sapiecha


COPPER PRODUCERS TO GAIN THE EDGE IN RECORD PRICES

Monday, February 21st, 2011

As good as gold?

Copper producers will lead the way

February 21, 2011

All punters are predicting that the copper market will be in (supply) deficit in 2011. So for the time being at least, the much used metal is what you might call scarce, giving it a ”store of value” hue usually reserved for gold.

It’s no wonder then that the price of the stuff marched to record levels earlier this month, to $US4.63 a pound. It’s backed off a little since, settling back at $US4.47 a pound on Friday.

So there has never been a better time to be a copper producer than now. As luck would have it, ASX-listed Tiger Resources (ASX: TGS) is but a couple of months off becoming a producer from its Kipoi project in the Democratic Republic of Congo (DRC).

Now the DRC is not everyone’s first choice as an investment destination. But it is fast recapturing its status as one of the major copper producers and unlike much of Africa, it has got a fair dinkum democratically elected government.

Kipoi’s economics are also proving hard for investors to ignore in the lead-up to its first production in April, and this has been reflected in the run-up in Tiger’s share price, from 25¢ five months ago, to 53.5¢ on Friday.

Tiger has not updated the economic indicators on Kipoi since November. Back then it said that after capital expenditure of $31.5 million and assuming a copper price of $US3.50 a pound, Kipoi would pay back its capital inside about four months.

With copper at near-on $US4.50 a pound, payback will be shorter still. All that means is that over the expected three-year life of ”Stage 1” mining at Kipoi (three years at 35,000 tonnes of contained copper annually from material grading a magical 7 per cent copper), Tiger is going to pull in one big chunk of cash.

The extra  free cash will support the push for a much longer mining life from a solvent extraction and electro-winning (SX-EW) operation that brings into play the rest of the (lower grade) resource that Tiger is outlining at Kipoi and its Sase prospect.

Tiger’s story in the DRC is very similar to that of Anvil Mining (ASX: AVM), now a $1 billion company. Anvil has been a DRC copper producer since 2002 and is now spending $US400 million on its Kinsevere project, a 60,000-tonne-a-year SX-EW operation.

Interesting thing is that both companies have commodities trader Trafigura as their major shareholder. In Tiger, Trafigura holds 28 per cent (fully diluted) and in Anvil, it sits at 35 per cent.

There have been whispers that it would make sense to bring Tiger and Anvil together. No action to report on that front just yet, but it could be a space worth watching as Tiger gets into production and as Anvil beds down the Kinsevere projects.

VICTORIA’S Ballarat-Bendigo gold corridor has yielded more than 33 million ounces of gold over time, making it one of the most prolific & consistant gold regions anywhere in the world.

But all that is old news, very old. To recapture its status as the place to be for gold as it was in gold rush days of yesteryear, the ”corridor” needs a modern-day discovery to fire up the imagination of investors. Only problem is, much of the corridor’s prospective rocks are hidden beneath thick sequences of Murray Basin sediments.

So there has been little, if any, in the way of new deposits being uncovered since Australia’s third gold production boom got going in the early 1980s. But there have been some promising finds, including the Lockington find by South Africa’s Gold Fields Ltd on the northern end of the Ballarat-Bendigo corridor.

The experts will tell you that it is the first significant discovery of gold mineralisation under the thick Murray Basin sediments. Significant all right, but not yet in the category of a discovery to maintain Gold Fields’ full attention after spending some $6 million on exploration.

That task is being handed to a new $10 million gold float called Timpetra Resources, using the model that Gold Fields has used previously of striking a strategic alliance with a focused junior explorer to pick up the running, while keeping its foot on the potential upside.

Timpetra is picking up Lockington in return for shares, enough to give Gold Fields a 22 per cent interest on Timpetra listing.

It has also an anti-dilution right under which it can maintain its cornerstone shareholding.

On listing, Timpetra will have 68.75 million shares on issue.

Of that, new shares from the float will account for an impressive 72.8 per cent. That’s compared with the usual 50 per cent that goes to the public after vendors and promoters have their fill from a float.

At the float price of 20¢ a share, Timpetra will have a market cap of $13.75 million.

Its board is filled by well-known mining types, including Tony Grey as chairman.

Grey is the Canadian lawyer who arrived in Australia in 1969 and got bitten by the mining bug after watching the craziness of the Poseidon nickel boom.

He went on to make his own fame and fortune when a company he founded, Pancontinental Mining, found one of the world’s biggest uranium deposits, Jabiluka.

It’s now owned by Rio Tinto’s listed uranium subsidiary Energy Resources of Australia.

Lockington lies some 50 kilometres north of Northgate’s Fosterville gold mine, currently Victoria’s biggest mine, with annual production of more than 100,000 ounces from a gold endowment of some 2.5 million ounces.

Mineralisation discovered by Gold Fields at Lockington is of the fine-grained type found at Fosterville, rather than the coarse (nuggety) stuff that makes grade estimation and reserve definition so difficult at places like Bendigo and Ballarat.

Work by Gold Fields since 2003 at the project has outlined eight separate mineralised trends, with strike lengths of up to 10 kilometres. Best drill results included 7.7 metres grading 4.2 grams of gold a tonne from a 166 metres depth and 4.1 metres grading 6.3 gram/tonne from 231 metres.

Timpetra’s future drilling will be attempting to zone in on the fault system where the gold activity lies. It could start in April. The share offer is fully underwritten by Ord Minnett.

Sourced & published by Henry Sapiecha

DIAMONDS & SILVER IN MEXICO TO BE DEVELOPED BY CLONCURRY METALS

Wednesday, February 9th, 2011
20 January 2011

Cloncurry Metals drilling to follow up high grade silver results at Espiritu Santo

Cloncurry Metals (ASX: CLU) has commenced a 2,000 metre diamond drilling program at its Espiritu Santo prospect to follow up on encouraging sampling results.

The prospect forms part of Cloncurry’s El Rodeo Project, in the south-western Mexican state of Michoacan.

The program is focused on intersecting veins below and along strike of very high grade silver (to 3,830 g/t) results from underground sampling received in early November 2010.

About 14 holes will be drilled from a limited six drill pads, which will drill fans of holes at different dips from each pad to test the veins, and give other information about the structures and geometry of the area.

Cloncurry Metals acquired the El-Rodeo project in early 2010, joining a host of foreign investors in the prosperous and mineral-rich area.

Sourced & published by Henry Sapiecha

UNREST IN NORTH AFRICA & THE PHOSPHATE ISSUE

Wednesday, February 9th, 2011

Turmoil in North Africa

puts heat on phosphate

Barry FitzGerald
February 7, 2011

The political turmoil in Egypt and Tunisia has raised the potential for the same sort of winds of change to start blowing in Morocco, the world’s dominant producer of phosphate.

THE political turmoil in Egypt and Tunisia has raised the potential for the same sort of winds of change to start blowing in Morocco, the world’s dominant producer of phosphate.

Fitch Ratings, for one, thinks that Morocco is unlikely to suffer contagion in the short term, even if it also suffers from the same sort of social inequality that is breeding unrest elsewhere on the Dark Continent.

There is a bunch of investors out there who are not so sure. They are the ones that last week chased Phosphate Australia (ASX: POZ) from 11.5¢ to 19.5¢ by the close of trade on Friday – a gain of 69 per cent, if you don’t mind.

Fellow Northern Territory phosphate developer, Minemakers (ASX: MAK), has also benefited from the question marks over Moroccan supplies. Its shares have bounced from below 40¢ a month ago, to 59¢ on Friday.

Those gains came as Stuart White from the Institute for Sustainable Futures at Sydney’s University of Technology was telling a US conference that political instability in North Africa and the Middle East was an additional component in a looming supply-demand gap in global phosphorus resources.

”Morocco alone controls the vast majority of the world’s remaining high quality phosphate rock. Even a temporary disruption to the supply of phosphate on the world market can have serious ramifications for nations’ food security,” the good professor said.

Sort of puts the high price of bananas in perspective.

GARIMPEIRO has been banging on about the market’s apparent undervaluation of Exco Resources (ASX: EXS) since before his hair went grey.

The last rant was back in August last year when Exco was a 33.5¢ stock. It is now a 58.5¢ stock, valuing the company at a little more than $200 million (undiluted). So the undervaluation has been at least partly addressed, not because anyone listens to Garimpeiro, mind you.

No, the reason has been the stellar performance at the group’s White Dam goldmine in South Australia. The project really hit its straps in the December quarter, producing its gold at a class best, for mines without the benefit of by-product credits, of $289 an ounce.

All that allowed Exco to pay off its gold loan. It now looks forward to generating a net cash flow of more than $5 million a month for the rest of the financial year. As good as the December quarter effort was, it is the group’s Cloncurry copper project in soggy north Queensland that remains its key asset.

Xstrata’s Ernest Henry treatment plant sits 8 kilometres away and is the obvious place for Exco’s resource to be processed. But after more than five years of shadow-boxing on the subject, no deal has been struck.

If a deal is not struck some time soon, you would have to think a stand-alone development is on the cards. Either way, there is good reason to value Exco’s Cloncurry project at upwards of $400 million (61 million tonnes containing 519,400 tonnes of copper and 500,000 ounces of gold).

That’s what Shaw Stockbroking did in its recent report on Exco that set a target price for the stock of $1.12. Fox-Davies Capital has a target price on the stock of 88¢ a share. Needless to say, both targets are well north of the current share price.

WHEN you’ve got Tony Sage’s Cape Lambert (ASX: CFE) on the share register with a 17 per cent stake, it is best to get on with things.

And so it is with last year’s float of Peruvian exploration specialist Latin Resources (ASX: LRS). It has not set the world on fire since raising $6 million in September. But it could be a different story in 2011, with last year’s float giving Latin the funds to do some serious work on the portfolio of coastal iron ore projects it has assembled over the three years in a country that relies more on its resources industry than does Australia, if that is possible.

Watch out for drilling programs to generate news in the months ahead at the Guadalupito, Ilo Norte, Ilo Sur and Mariela projects. Garimpeiro’s listing there is more than alphabetical; it is saying that Guadalupito in particular is the one to watch.

It is part of a large coastal placer deposit of magnetite and other heavy mineral-bearing sands in an uninhabited part of Peru, some 25 kilometres north of the port town of Chimbote, home to Peru’s biggest steel smelter.

Some smarter guys than Garimpeiro reckon it has got serious potential as a multi-commodity play covering magnetite, andalusite, monazite rare earths elements, mineral sands, wolframite and, for good measure, maybe gold.

What would make it even more interesting would be if Latin could secure a bigger ground position than it already has. On that score, Garimpeiro’s Peruvian cousins have passed on the tip that a deal that would allow Guadalupito to shape up as something potentially much bigger for Latin could be close at hand.

THE ability of junior explorers to re-invent themselves is a joy to behold. That’s just what TNG has been doing, switching its focus from its Manbarrum zinc-lead project in the Northern Territory to its Mount Peake iron-vanadium project, also in the Top End.

The change of focus has put some much needed pep into the group’s share price. It motored off to 12¢ a share on Friday, a gain of 3.1¢ or 34.8 per cent on the day. Still, Garimpeiro can remember writing up TNG when it was a 50¢ stock and more.

While TNG may well extract some value from Manbarrum before long, it’s the potentially large scale Mount Peake project that is going to provide the near-term interest. A scoping study into the project’s potential is likely to hit the ASX platform this week.

The market’s main interest will be in what the study says about a new hydrometallurgical process that TNG and the Perth-based metallurgical consultant, METS, have been working up for use at Mount Peake to extract the metal units of vanadium, titanium and iron.

The new process has the potential to deliver major capital and environmental advantages over the conventional pyrometallurgical processes (roasting), making it a possible game-changer for TNG and its Mount Peake ambitions.

Sourced & published by Henry Sapiecha

IRON ORE INVESTMENT BY RIO-TINTO OF YET ANOTHER $1B IN CANADA & AUSTRALIA

Wednesday, February 9th, 2011

Rio Tinto pumps $1b into iron ore

February 9, 2011 – 7:00AM

Mining giant Rio Tinto has announced that it will invest more than $US1 billion ($988.88 million) at the group’s existing iron ore operations in Australia and Canada.

“Rio Tinto has approved a $US933 million ($A922.62 million) investment to extend the life of the Marandoo iron ore mine by 16 years to 2030,” the London-based resources giant said in a statement.

The Marandoo mine is part of the Anglo-Australian miner’s large operations in Western Australia’s Pilbara region.

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At the same time, Rio Tinto said it has agreed to invest more cash in its Canadian iron ore joint venture.

“Rio Tinto has given the go-ahead to a further $US277 million ($273.92 million) investment (Rio Tinto share $US163 million ($161.19 million)) in the next phase of a project that will ultimately raise the Iron Ore Company of Canada’s concentrate production capacity by 40 per cent to 26 million tonnes per year.”

The Iron Ore Company of Canada is the nation’s biggest iron ore producer and is 58.7-per cent owned by Rio Tinto.

AFP

Sourced & published by Henry Sapiecha


INTEREST RATES IN CHINA HAVE GONE UP AGAIN TO BRAKE INFLATION

Wednesday, February 9th, 2011

China raises rates – again –

to dampen inflation

February 9, 2011 – 7:00AM

China’s central bank raised interest rates for the second time in just over a month in a bid to dampen high inflation and guide blistering economic growth to a sustainable level.

The People’s Bank of China announced Tuesday on its website that the benchmark one-year deposit rate would rise by a quarter percentage point to three per cent and the one-year lending rate would increase by a similar amount to 6.06 per cent. The increases are effective on Wednesday.

Its last rate rise came on Christmas Day, when the bank raised both benchmark rates by a quarter point. China’s leaders have sought to cool surging inflation that could pose a threat to political stability.

Rising prices are especially sensitive in a country where poor families can spend up to half their incomes on food. Higher incomes have helped to offset price rises, but inflation undercuts economic gains that help support the ruling Communist Party’s claim to power.

In January, the central bank signaled that fighting inflation would receive priority this year, stating in a report issued after an annual planning meeting that “stabilising price levels will receive more preffered status.”

Tuesday’s announcement, which is the third rate rise since last October, dragged European shares lower. Asian markets were already closed.

Investors worry that slower Chinese growth could affect the United States, Australia and other economies by cutting demand for their exports of iron ore, machinery and other goods & commodities.

Inflation jumped to a 28-month high of 5.1 per cent last November before moderating in December, but it has worried leaders who fear that a sharp rise in living costs could trigger unrest. Inflation has been sticking well above the government’s target of three per cent.

China’s battle with inflation marks a sharp contrast with the United States, Europe and Japan, where growth has been muted in the aftermath of the financial crisis.

China’s rapid rebound from the global recession saw its economy, the world’s second largest, growing at a double-digit rate – a blistering expansion that slowed by the end of last year.

Analysts expect growth to slow further this year from 2010’s expansion of 10.3 per cent as Beijing clamps down on credit and tries to prevent inflation, which has been largely confined to food and property, from spreading to other areas.

Chinese leaders ordered a shift from easy credit to a “prudent monetary policy” in 2011 in a planning report issued in December.

Last year’s rapid growth was driven by a flood of investment in property and other areas. Analysts have urged Chinese authorities to do more to rein in the lavish lending by state-run banks that is driving investment, a large chunk of which is believed to be in speculative property deals.

In January, the banking regulator again ordered banks to tighten risk controls after the country’s biggest state-run commercial banks splashed out nearly 240 billion yuan ($36.0 billion) in new loans in the first 10 days of the year.

Authorities are also considering ways to penalise banks for flouting orders to cut back lending.

Borrowing for real estate development and other projects is the lifeblood for the sales by local governments of land use rights that provide a huge share of their revenues. Such sales rose 70 per cent in 2010, helping push property prices 6.4 per cent higher compared with a year earlier.

A huge pool of nonbank financing nearly doubled the amount of money available for investment last year, much of it “off balance sheet” lending whose exact scale is unknown.

AP

Sourced & published by Henry Sapiecha


LATEST ON OIL & PRECIOUS METALS IN THE MARKET PLACE

Friday, February 4th, 2011

Precious metals & oil updates

February 4, 2011 – 10:17AM

The  market has opened higher after receiving mixed leads from offshore trading overnight, with Wall Street flat to slightly higher, European markets mixed, Asian markets mostly closed and precious metals higher. Oil was down a touch.

In early trade, the benchmark S&P/ASX200 index rose 15.2 points, or 0.3 per cent, to 4835.8 and the All Ordinaries gained 13.2 points, or 0.3 per cent, to 4932.5.

What’s out today

In economics news, the Reserve Bank of Australia releases its quarterly Statement on Monetary Policy.

The Australian Office of Financial Management conducts a tender process to issue $700 million of the November 2012 bond line.

In equities news, Aristocrat Leisure manager for Australia and NZ, Trevor Croker, appears before a public hearing in Sydney of the Joint Select Committee on Gambling Reform.

In the news this morning

Qantas chief Alan Joyce has questioned the viability of its full-service international operations without a change of direction.

Murdoch’s latest project is a US-only, iPad-only “newspaper of the 21st century” that takes the tablet bar to a new high.

The wealth contained within Lang Hancock’s discovery in Western Australia’s Pilbara has propelled his daughter to the top of Australia’s rich list.

And world food prices have hit a new high, the United Nations has said.

Plus, Malcolm Maiden asks whether wireless is the hair in the NBN soup, Ian Porter on industry policy and Harold Mitchelllooks ahead to a great year.

Offshore overnight

US stocks kicked up in late trading, after dipping as concerns over violent protests in Egypt weighed against better-than-expected economic news in the US, including retail sales data that gave Wall Street a late boost.

Clashes continued in Egypt between pro- and anti-government demonstrators, leaving some analysts worried about their impact on oil-rich countries throughout the Middle East like Saudi Arabia and the stability of the region.

But better-than-expected December sales figures sent retail companies higher. Consumer discretionary companies in the Standard and Poor’s 500-stock index gained 1 per cent after national chains reported that sales were nearly double what analysts had forecast despite heavy snowstorms in much of the nation. Costco Wholesale Corp, Limited Brands, Nordstrom and Gap all gained more than 4 per cent.

During afternoon trading, too, US Federal Reserve chairman Ben Bernanke, opened the door for more stimulus to the US economy if the bank judged it necessary.

The S&P 500 – the benchmark for most US mutual funds – rose 3.07 points, or 0.24 per cent, to 1307.1. The Dow Jones industrial average closed up 20.29 points higher, up 0.17 per cent, at 12,062.26. The Nasdaq composite rose 4.32 points, or 0.16 per cent, to 2753.88.

European stock markets retreated and the euro dropped lower against the US dollar on Thursday as the ECB kept interest rates on hold, better-than-expected US data and ongoing unrest in Egypt.

London’s FTSE 100 index of leading shares dipped 0.28 per cent to 5983.34 points, and in Paris the CAC 40 dropped 0.74 per cent to 4036.59 points.

In Frankfurt, the DAX bucked the trend to close up 0.14 per cent at 7193.68 points.

Elsewhere in Europe, Swiss stocks ended off 0.13 per cent, Brussels slipped 0.14 per cent, Lisbon dipped 0.41 per cent, Amsterdam shed 0.68 per cent, Milan dropped 0.93 per cent, and Madrid fell 1.36 per cent.

In foreign exchange trade, the euro ran into profit-taking ahead of an interest rate call from the European Central Bank, and fell further thereafter, suggesting markets had curbed expectations of a rate hike early this year.

The shared euro zone unit retreated to 1.3648 dollars, compared with 1.3808 dollars late in New York.

How we fared yesterday

The Australian stock market closed in the black following gains in the mining sector on the back of record copper prices overnight.

Insurance stocks rebounded amid relief that the impact of Cyclone Yasi was less devastating than expected.

The benchmark S&P/ASX200 index was up 24.1 points, or 0.5 per cent, at 4820.6 points, while the broader All Ordinaries index added 21.4 points, or 0.44 per cent, to 4919.3 points.

Commodities

At one point, Brent North Sea crude for delivery in March climbed to $US103.37 a barrel — the highest level since September 26, 2008.

It later stood at $US102.27 in London trade, down seven cents compared with Wednesday’s close.

New York’s main futures contract, light sweet crude for March, dipped 33 US cents to $US90.53 per barrel in late afternoon trade.

The oil market is jittery due to fears the crisis in Egypt could spill over to other countries in the crude-rich but politically volatile Middle East. Although Egypt is not a major crude producer, it controls the Suez Canal, which carries about 2.4 million barrels daily, roughly equal to Iraq’s output.

Hasegawa added that the spread in the price between Brent crude and the benchmark New York contract, also known as West Texas Intermediate (WTI), was likely to widen further because of oversupply in the US port of Cushing, Oklahoma.

The latest weekly stockpiles report from the US Department of Energy showed reserves had increased sharply for a third week in a row.

Crude oil stocks rose 2.6 million barrels to 343.2 million in the week ending January 28, in line with expectations, official data showed on Wednesday.

At the almost-full depot at Cushing, reserves rose 600,000 barrels to a record high of 38.3 million.

Gold rose over 1 per cent in volatile trade as strong buying by exchange traded funds and safe-haven demand driven by ongoing unrest in Egypt triggered large buy orders.

After trading lower in most of the morning session, gold rallied at midday in New York, just ahead of a speech by Federal Reserve Chairman Ben Bernanke and with financial markets already worried about escalating political tensions in Egypt and the Middle East.

Sizeable volume of buy-orders from ETFs — which were sellers earlier — hit the market once gold prices rose to $US1345 an ounce, Perez-Santalla said.

Gold also benefited from the latest remarks by Bernanke, who said that the US economic recovery still needs help from the Fed despite signs of improvement.

Bullion investors are paying close attention to Friday’s US January nonfarm payroll data. Traders said that gold prices could retreat sharply if the data promotes an optimistic view of the economy.

Spot gold rose 1.3 per cent to $US1353.55 an ounce after trading as low as $US1324.79.

US gold futures for April delivery settled up $US20.90, or 1.6 per cent, at $US1353. Volume was in line with its 30-day moving average after notching lower than usual turnover in the past three sessions.

Silver climbed 1.5 per cent to $US28.77 an ounce.

What you need to know

  • The $A was up at 101.58 US cents
  • In the US, the S&P500 was up 3.07 points to 1307.1
  • In Europe, the FTSE 100 fell 16.73 points to 5983.34
  • Gold was up $US20.90 an ounce to $US1353.00
  • Oil fell 8 US cents a barrel to $US90.78
  • The Reuters Jefferies CRB Indexfell 0.81%

AAP, with BusinessDay

Sourced & published by Henry Sapiecha


MINING GIANTS CRUSHED RUDDS PROPOSED NEW MINE TAX

Tuesday, February 1st, 2011

Mining firms spent more

than $20 million in Australia

to bury Rudd’s tax

February 1, 2011 – 2:21PM

Mining companies spent more than $20 million to sink a tax on profits, and Kevin Rudd’s Labor leadership in the process.

New figures released by the Australian Electoral Commission show the Minerals Council of Australia spent $17 million, BHP Billiton more than $4 million and Rio Tinto more than $537,000 in their battle against the Rudd government’s resource super profits tax.

The government wanted to impose a 40 per cent tax on the so-called “super profits” of the country’s mining companies. But Prime Minister Julia Gillard, who ousted Mr Rudd as the tax debate entered a stalemate, negotiated with the biggest companies for a 30 per cent mineral resources rent tax applying to coal and iron ore only.

However some miners still refuse to accept the tax.

Infrastructure Minister Anthony Albanese said the miners had waged a misleading campaign.

“We know in the lead-up to the last election there was a considerable amount of advertising done against the government, much of it very misleading,” he said.

The Australian Electoral Commission figures also showed the Liberal Party continued to benefit from large donations from tobacco companies and the hotels and gaming industry spent big on both major parties.

But trade unions remained Labor’s key financial backers. The Australian Workers Union and the Shop, Distributive and Allied Employees’ Association each gave $200,000 to the ALP’s federal branch, which received $7.75 million in total over the 2009/10 financial year.

Billionaire mining magnate Clive Palmer’s Mineralogy was the largest individual donor to the federal Liberals, contributing $500,000 out of a total $6.3 million.

Across all states the Liberals received $41.22 million, compared with Labor’s $36.22 million.

Tobacco companies Philip Morris and British American Tobacco gave donations totalling just over $300,000 to the Liberal and National parties, while Labor and the Greens have banned such donations.

NAB and ANZ bank donated $100,000 each to Labor and the Liberals.

The nation’s 60 political parties received $89.5 million over the financial year – down from $98 million the previous year.

AAP

Sourced & published by Henry Sapiecha


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