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MASSIVE LIQUIFIED NATURAL GAS DEAL SIGNED BETWEEN JAPAN & CHEVRON IN WESTERN AUSTRALIA

Henry — Mon, 14 May 2012 10:04:59 +0000

LNG MASSIVE DEAL SIGNED WITH JAPAN BY CHEVRON IN WA

CHEVRON remains bullish on the outlook for conventional liquefied natural gas prices after signing a non-binding heads of agreement with the Japanese utility Tohoku to sell gas from its $US29 billion Wheatstone development near Onslow in Western Australia.

Chevron Australia’s managing director, Roy Krzywosinski, said the deal to sell Tohoku 1 million tonnes a year over 20 years was in line with traditional pricing for conventional LNG, adding ”we have not seen a degradation in prices”.

Mr Krzywosinski questioned whether low Henry Hub gas prices in the US, caused by a glut of shale gas, were sustainable and said while it was likely that LNG exports from North America would grow, he did not expect they would be ”of a volume that will have a material impact on what we believe will be the LNG demand coming out of the Asia-Pacific region”.

He said the Wheatstone project now under construction and the first LNG hub in Australia to accept third-party gas, was off to ”a flying start” and Chevron expected further gas discoveries would be made in the Carnarvon Basin.

”We estimate there is between 25 and 35 trillion cubic feet of gas of what we would call uncommitted or yet to be discovered gas in the Carnarvon Basin and much of that gas … will need a home, so we think the hub concept is going to be the right concept to support this gas.”

After yesterday’s deal, struck with partners Apache Energy and Kuwait Foreign Petroleum Exploration Company, Chevron has long-term contracts over 80 per cent of its gas to come from the two-train Wheatstone project. It expects to expand it, potentially up to 25 million tonnes a year.

Chevron is also developing the giant three-train, 15 million tonnes a year Gorgon LNG project at Barrow Island, where it is sticking to its $US43 billion budget and target of first LNG by 2014. The project – Australia’s largest – is 40 per cent complete. Mr Kryzwosinski said front end engineering and design on a $US10 billion-plus fourth train would begin later this year, before a final investment decision planned for next year.

Gorgon is running two years ahead of Wheatstone, which Mr Krzywosinski said was a ”sweet spot” offering significant synergies in terms of purchasing power and equipment from running the two projects as a portfolio.

Chevron is a partner in the Woodside-operated Browse project, where design work is under way on the controversial $US35 billion plan to build an LNG hub on the Kimberley coast. Chevron was supporting the design work, but Mr Krzywosinski said Browse ”does have a lot of challenges – technically, environmentally and from a heritage perspective”.

Sourced & published by Henry Sapiecha

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CHINA & THE RARE EARTH MINERALS DEBATE & CONTROL

Henry — Sun, 13 May 2012 09:02:43 +0000

RARE EARTH MINERALS ARE A QUESTIONABLE INVESTMENT SOME SAY

Platts reports Thursday China will start forcing rare earth producers out of business if they don’t qualify for new value-added tax permits being allocated from May 1.

Officially it’s China’s latest bid to curb resource plundering, dangerous artisanal mining and widespread pollution.

China produces over 95% of the world’s REEs used in a variety of industries including green technology, defence systems and consumer electronics.

Platts quotes one Chinese industry source as saying: “We believe it is a start that China will undertake to regulate the country’s rare earth production, however there is a long way to go.”

Cleaning up the notoriously dirty rare earth business in China is laudable, but the latest regulations are probably aimed more at trying to stop chronic overproduction of REEs in Sichuan and Inner Mongolia, which have recently led to an implosion in export prices.

Official output quotas in place since 2007 are readily exceeded by 40% – 50% each year. While prices have been moderating since the record levels of Q3 2011, in 2012 prices for many rare earths are close to collapsing.

Abundant, less valuable REEs such as lanthanum have experienced the sharpest reversals.

Lanthanum oxide – used in ceramics and fuel catalysts – for example rose from a price of just $8.71/kg in 2008 to $117/kg in the third quarter last. At the start of 2012 it had pulled back to $66/kg.

Now it has halved again – on Monday a kilogram of lanthanum could be picked up for $26. That’s a 77% collapse in less than nine months. And consider that inside China that same kilogram costs half $13.15.

When export prices of lanthanum were at record highs of $117/kg domestic Chinese prices were less than $20. That differential has gone from almost 10 times to less than double.

This price behaviour can be seen across the board.

Cerium oxide used to polish TV screens and lenses is now also trading at $26 from all-time highs of $118 in the September quarter last year and just under $60 in Q4. The price for cerium oxide was $4.56 in 2008.

Heavy and scarcer REEs have generally held up better, but many have experienced price declines of 50% or more.

Neodymium oxide used in windmills have seen a dramatic slump – from $338/kg in Q3 2011 to $120/kg as at 23 April.

A hybrid vehicle ingredient, dysprosium rocketed from a price of $118.49/kg in 2008 to $921.20/kg in the third quarter of 2011 and $2,262/kg by September last year.

Dysprosium, also used in conjunction with vanadium and other elements in making laser materials, has now given up more than $1,000 per kilogram and went for $1,170 this week. The price is also now much more in line with domestic Chinese prices of $729/kg.

The reversal in europium oxide – the priciest REE which is used in medical imaging and the nuclear and defence industries – has been most startling.

The price of europium increased almost 10-fold from $492 in 2009 to average $4,900 in the third quarter of 2011. Three months later it dropped $1,100 in price and is now worth $2,420 a kilogram. Chinese domestic europium is another $1,000 cheaper at $1,315/kg.

While producers of flat screen TVs, hospital scanners, jet fighter electronics and sophisticated laser systems must be rejoicing rare earth mining heavyweights like Molycorp and juniors like Quest and Avalon cannot be too thrilled by events.

Sourced & published by Henry Sapiecha

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INDIAN RUPEE DIPPED TO A NEW LOW AGAINST THE DOLLAR & RBI ISSUES DIRECTIVES TO GEM & JEWELLERY INDUSTRY

Henry — Fri, 11 May 2012 13:01:29 +0000

GEM & JEWELLERY TRADE IN INDIA AT CRISIS POINT

G & J Exporters hit by RBI Directive Already affected by the rising value of the rupee and slow demand from key markets like US and Europe, gem and jewellery exporters were further hit by the RBI’s directive to convert 50 per cent of foreign currency holdings in all types of Exchange Earner’s Foreign Currency (EEFC) accounts in to rupees.

The RBI move is part of its attempt to stabilise the rupee which dipped to a new low of 53.82 against the dollar this week, and will release an estimated $2.5 bn worth of foreign currency into the market.

While the RBI’s objective cannot be faulted, its methodology can be, particularly the lack of a differential approach towards the foreign currency balances held by different sectors.

Clearly industries dealing in commodities, like gems and jewellery, have different needs from sectors like IT that earn dollars through selling services overseas. Unlike the latter, the former need foreign currency to import fresh raw materials on a regular basis. This is all the more marked for g & j, since virtually all the raw materials are purchased overseas, and value addition is based on the skills of the people involved in the trade.

The exact modalities of ensuring payment flexibility for such sectors can be worked out, but a starting point could be the FIEO proposal, where the limit for sectors like gems and jewellery could be higher than the general limit, say 75 per cent as against 50 per cent for others.

Sourced & published by Henry Sapiecha

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PERUVIAN CONGA GOLD MINE PROJECT NEEDS TO PACIFY OBJECTORS FIRST

Henry — Mon, 16 Jan 2012 14:48:06 +0000

CONGA GOLD PROJECT IN PERU IN STALL MODE BUT HOPEFUL TO PROCEED

The Wall Street Journal reports Peru on Friday announced a programme of social and infrastructure investments in its poor Cajamarca region aimed at winning over local protesters who have brought to halt Newmont Mining’s $4.8 billion Conga project over environmental concerns.

Protestors, led by Cajamarca’s Maoist governor Gregorio Santos, say Conga will destroy the environment by transforming four high Andean lakes into reservoirs for mining operations.

In December the government was forced to declare a state of emergency after boulders were used to block exits from the regional capital of more than 200,000 inhabitants, schools, hospitals and business were closed and dozens injured in clashes with police.

The Wall Street Journal reports Peru’s new Prime Minister, Oscar Valdés, who was elevated to the position after a cabinet shake-up prompted by the Conga crisis said late Thursday that he thought work on the project which was stopped in November could restart by March:

On Friday, René Cornejo Diaz, the housing minister, was sent to Cajamarca to tout the federal government’s program to invest 4.3 billion soles, about $1.6 billion, in infrastructure and expanded antipoverty programs in Cajamarca.

But Cajamarca leaders, including the governor, Gregorio Santos, didn’t seem likely to be swayed by government largess. “The position of the regional government is clear, Conga is not going ahead,” Máximo Léon, a top adviser to Mr. Santos, said in a telephone interview.

Conga has gold deposits worth about $15 billion at current prices and would be the biggest investment ever in Peru mining.

Conga has turned into a political nightmare for President Ollanta Humala who took office last year and who has on many occasions publicly backed the project. The bitter dispute is seen as a test case for scores of conflicts triggered by mining investments in the country.

At least 200 communities nationwide in Peru have organized to stop mining or oil projects, usually over environmental concerns or to demand direct economic benefits in rural towns.

Sourced & published by Henry Sapiecha

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NEW ZEALND IS DRIPPING WITH OIL & GAS IT IS SAID

Henry — Sun, 15 Jan 2012 23:18:30 +0000

THE COUNTRY OF NEW ZEALAND EAST COAST LEAKING WITH OIL & GAS

The East Coast basin is “literally leaking oil and gas” and provides potential for thousands of wells, an oil company with exploration permits in the area says.

New Zealand’s main oil and gas producing region is at Taranaki on the west coast of the North Island but Tag Oil says the East Coast basin on the other side of the North Island has “world class upside potential”.

A presentation by the small Canadian-based company on its website says it has identified widespread oil and gas seeps over a large area.

The presentation says the “East Coast basin is literally leaking oil and gas”.

The Sunday Star Times newspaper reported that the company regarded the East Coast as a “Texas of the south” and wanted to pursue an aggressive program there.

Last September the company said it was undertaking seismic testing in the region, with first exploration drilling planned after that. The region is seen as having potential for so-called shale oil extracted from rock.

The company has a farmout deal with Apache for the region, under which Apache may spend up to $US100 million ($A97 million) to earn up to half of Tag’s present 100 per cent share of exploration prospects.

“This is not where New Zealand’s economic future lies. We need to be investing instead in renewable solutions,” says Moana Mackey, Labour’s Energy representative.

Sourced & published by Henry Sapiecha

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PERU –THE GOLD PRODUCER EXTRAORDINARE

Henry — Wed, 30 Nov 2011 14:04:51 +0000

PERU IS THE SLEEPING GIANT IN GOLD PRODUCTION

ASSESSMENT – Peru has a very rich precious metals background. This diverse nation in the Andes, once a victim of Spanish looting, is now the biggest silver producer in the world, the second largest copper and zinc producer and the sixth largest gold producer. The wealth of its mineral deposits stems from dramatic landscapes consisting of soaring mountains, winding valleys, stark deserts, mysterious jungles and isolated coastlines. More than 7% of global mining exploration occurs on this unforgiving terrain, where historical production collides with modern geological technology. The Peruvian mining industry represents about 60% of the country’s export earnings. Earnings from mining are expected to grow 6% annually through 2011-13.

But with a landscape as diverse as this, miners have to pick and choose locations carefully.

Ancash & Cajamarca Regions

Two regions which should be on the radar of eager gold and silver investors are the Ancash and Cajamarca in northern Peru. Both Ancash’s and Cajamarcas’ economies are largely made up of gold, silver, copper, zinc & precious metals mining.

Gold and silver production and exploration in these regions are a clear example of the investment and muscle needed to survive in the Peruvian Andes. This high-elevation, mineral rich area, which has been on the list of eager juniors for decades, currently persists mainly on the activity of the world’s two biggest gold miners:

Minera Yanacocha – Newmont Mining

Newmont Mining’s [NMC – TSX] legendary Yanacocha mine is a joint-venture project with Peruvian Company Buenaventura and the International Finance Corporation, which own 43.65% and 5%, respectively. Yanacocha is the largest gold mine in Latin America and is not only considered to be the second largest gold mine in the world, but also one of the most profitable.

The Yanacocha consists of three active open pit mines, with production having exceeded 26 million ounces (US$7 billion) since the mine opened in 1993. Located only 48 kilometres from city of Cajamarca, the mine produced 1.5 million ounces in 2010 and has reported 5 million ounces of gold reserves as of December 2010.

Considering Newmont’s recent stock rocketing in the past six months, buoyed by positive third-quarter results and ongoing production and exploration around the globe, the Company’s stock price may scare away smaller investors. Then again, the recent dip below $70 could also be seen as a gift by many who believe gold is about to go parabolic in the face of worldwide currency destruction.

Pierina – Barrick Gold

Not to be outdone by its competitor, the world’s largest gold producer, Barrick Gold Corp. [ABX – TSX], has two key mines in the regions: Alto Chicama & Pierina. Of the two, the Pierina’s mine life has recently been extended to the end of 2014 due to the rising gold price and increased interest in Peru’s gold possibilities. An open-pit operation, Pierina produced 191,000 ounces of gold at $434 per ounce in 2010 and recorded proven and probable mineral reserves as of December of 791,000 ounces of gold. Considering that Barrick recently reported record net earnings of 45% to CAD $1.37 billion for the 3^rd quarter, investors should look for future exploration and increased production in the Ancash region.

Much like Newmont, investors may hesitate on following such a high-priced stock. But judging from Barrick’s recent price volatility, a result of the volatile yet upward-moving gold price, there are plenty of opportunities to catch the stock on the dips.

Yanamina Gold Project – Coronet Metals

For those with shallower pockets and hopes for higher gains, Coronet Metals [CRF – TSX.V] offers an alternative to the nearby majors that may add another producing mine to the Ancash region. A junior gold exploration and development company, Coronet is presently developing its Yanamina Gold project, which Coronet recently purchased from Latin Gold Limited. Yanamina is an advanced-stage project with an initial inferred and indicated resource of approximately 286,000 ounces of gold grading between 1.6 and 2.0 grams/tonne and 1,400,000 ounces of silver grading on average of 8 grams/tonne.

The project represents an ideal opportunity to catch the attention of the two previously mentioned majors, as it is an open pit, heap leach gold operation. Exploration on the area has revealed a low sulphidation epithermal Au-Ag deposit, with indicated ounces mentioned above, and substantial upside potential. Coronet reports good existing infrastructure in the region, along with an proposed mine life estimate of 8+ years.

On top of the development of the Yanamina project, Coronet has also recently announced an agreement to evaluate re-processing up to 950,000 of gold tailings in Peru. The project is located 16 km below the Yanamina project and will give Coronet the opportunity to demonstrate its adherence to corporate social responsibility and best practices in the area. Mr Joel Dumaresq of Coronet says, “ This low-capital project could move Coronet into gold and silver production with the objective of generating sufficient free cash flow to cover the Company’s overhead. The contractors are already approved and completion of due diligence is targeted for Q1, 2012.”

2011 And Beyond

As the Yanamina gold project and the re-processing of gold tailings unfold, expect to hear a growing buzz of expectation from the Ancash region.

As the global gold hunt heats up in the face of financial calamity, well-placed juniors such as Coronet may deliver significant rewards to schrewd punters

Sourced & published by Henry Sapiecha

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ROUGH DIAMONDS.THE WORLDS LARGEST SUPPLIER IS RUSSIA

Henry — Wed, 02 Nov 2011 11:54:30 +0000

Russia is the world’s largest source of diamonds in the rough.

In 2010, it accounted for 23.5% of the total diamond production in terms of volume, and 25% in terms of value.

New assessments from Frost & Sullivan, Outlook of the Russian Diamond Market, find that the market earned revenue of $4.79 billion in 2010 and is estimated to reach $5.74 billion in 2015. Deployment of modern equipment will be essential for productive outcomes in mining low-grade ore.

Sourcd & published by Henry Sapiecha

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ZIMBABWE'S DIAMONDS NOW GOING AHEAD TO SELL TO THE WORLD OPEN MARKET

Henry — Wed, 02 Nov 2011 11:25:11 +0000

Zimbabwe allowed to sell diamonds again

Controversy continues to rage over mining in Zimbabwe’s Marange alluvial diamond fields, & Voice of America reports a deal has been reached to sell Marange diamonds.

According to the World Diamond Council, the agreement allows two Marange operations to sell diamonds on the international market and a third, run by Chinese interests, will be allowed to resume sales following third-party verification.

The agreement, reached in Kinshasa, Congo, was supported by members of the Kimberley Process, which is a system to prevent the sale of so-called “blood diamonds”.

The United States opposed the decision by abstaining from voting.

Sourced & published by Henry Sapiecha

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QUEENSLAND AUSTRALIA TO HAVE NEW COAL MINE BY BHP BILLITON

Henry — Tue, 01 Nov 2011 12:36:26 +0000

BHP Billiton Approves Caval Ridge Mine Project

November 01, 2011

BHP Billiton today approved development of the Caval Ridge Mine project and expansion of the Peak Downs Mine in the northern Bowen Basin in Central Queensland, Australia. The initial project will add 8 million tonnes per year capacity (100 per cent basis) in export metallurgical coal, with the expectation of a rapid, low cost expansion to 10 million tonnes per year. This additional 2 million tonnes per year will only require the addition of mining equipment. This expansion has not yet been permitted.

The total investment in the initial project is US$4.2 billion, of which BHP Billiton’s share is US$2.1 billion. The resource life of the initial project is expected to be greater than 60 years1. First coal is expected in calendar year 2014.

The new Caval Ridge Mine will have the capacity to produce 5.5 million tonnes per year. The Peak Downs Mine will expand production by 2.5 million tonnes per year. The investment will include construction of a new coal handling and preparation plant at Caval Ridge to process production from the Caval Ridge Mine and Peak Downs expansion. Coal from the Peak Downs expansion will be transported by conveyor to the new plant. The Peak Downs Mine lies to the immediate south of the new Caval Ridge Mine.

The Caval Ridge Mine will be an open cut dragline and truck and shovel operation, with coal railed to the BHP Billiton Mitsubishi Alliance (BMA) Hay Point Coal Terminal. The project has received all necessary regulatory approvals.

BHP Billiton Metallurgical Coal President, Hubie van Dalsen, said: “This investment in the Caval Ridge Mine was foreshadowed in March of this year when BHP Billiton announced investments in the new 4.5 million tonne per year Daunia mine, the life extension of the Broadmeadow mine and the 11 million tonne per year expansion of the Hay Point Coal Terminal.

“This is a continuation of BHP Billiton’s strategy of investing in large, low cost, expandable mines with long lives. Additional expansion projects are being advanced to follow this investment in due course,” he said.

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INTERESTING FACT ABOUT UKRAINE MANGANESE DEPOSITS

Henry — Tue, 27 Sep 2011 14:01:59 +0000

MANGANESE DEPOSITS IN THE UKRAINE LARGEST IN THE WORLD

8. Ukraine has the world’s largest reserves of manganese ore – 2.3 billion tons or about 11% of all deposits of the world.

Sourced & published by Henry Sapiecha