Archive for the ‘INVESTMENTS’ Category

World’s largest, newest diamond mine to inject $5.2bn into Canada’s economy

Friday, September 9th, 2016


Gahcho Kué, co-owned by De Beers Canada and Mountain Province Diamonds, is located at Kennady Lake, about 280 km northeast of Yellowknife. (Image courtesy of De Beers Group)

Gahcho Kué, the world’s largest new diamond mine due to begin production later this month, is expected to contribute $5.2 billion (Cdn$6.7 billion) to Canada’s economy and provide 1,200 new jobs, a report released Thursday by majority owner De Beers shows.

Gahcho Kué is expected to contribute $5.2 billion (Cdn$6.7 billion) to Canada’s economy and provide 1,200 new jobs.

Situated almost 300 kilometres east of Yellowknife, in Canada’s Northwest Territories, the mine — a joint venture between De Beers Canada (51%) and Mountain Province Diamonds (49%) — has so far provided a $341 million (Cdn$440 million) boost to the NWT economy, the reports says. It has also contributed a further $272 million (Cdn$350 million) to the rest of Canada, according to the figures released by De Beers.

But what makes the mine especially important is the fact that two of Canada’s major diamond mines — Diavik and Ekati — are approaching the end of their productive lives, and —although it’s smaller— Gahcho Kué would be able to offset the production drop-off.

debeers-diamond-mines-map image

Courtesy of De Beers Group.

The report, which looks into the socio-economic impact of the Anglo American-owned diamond company in Canada, also highlights De Beer’s contribution to the country’s economy over the past 10 years:

  • More than Cdn$7 billion to Canada’s gross value added (GVA), with exports supported by DeBeers mining operations bringing Cdn$4 billion in foreign currency into the country’s economy. In 2015, they represented 28% of Canada’s export earnings from diamonds.
  • Cdn$55 million in support to First Nations through Impact Benefit Agreements (2006-2015).
  • An expected Cdn$24 million contribution to Alberta’s economy by the recent move of headquarters from Toronto to Calgary.
  • Cdn$750 million in exploration across Canada since 1961, supporting almost 100 jobs each year on average.
  • Responsible for the discovery of more than 170 kimberlites to date.

“In the 50 years we have been in Canada, we have seen how our business can be a catalyst for delivering both economic and social value, locally, regionally and across the country,” De Beers Canada’s chief executive Kim Truter said in a statement.

He noted that, only last year, De Beers’ activities contributed Cdn$1.2 billion ($930 million) to the Canadian economy.


Henry Sapiecha

Luxembourg invests big time $$$ in space mining

Friday, June 24th, 2016

luxembourg-invests-heavily-in-space-mining image

Luxembourg is stepping up efforts to become Europe’s centre for space mining by agreeing to buy a major stake in US-based asteroid miner Planetary Resources.

While it was not immediately clear what the government’s initial investment in Planetary Resources Luxembourg would be, the parties said in a statement that the agreement seeks to speed up the development of technologies and lines of business toward the exploration and utilization of resources from asteroids.

The government has also opened a $225 million (€200 million) line of credit for entrepreneurial space companies to set up their European headquarters in Luxembourg.The tiny European nation is one of the euro zone’s wealthiest countries and already has a long-standing space industry, playing a significant role in the development of satellite communications.

While its drive to become a significant actor in the asteroid mining industry is rather new, the country has already taken major steps towards achieving that goal.

On Friday, it announced the opening of a €200 million (US$225 million) line of credit for entrepreneurial space companies to set up their European headquarters within its borders.

And last month, the government reached an agreement with another US-based company, Deep Space Industries, which will be conducting missions to prospect for water and minerals in outer space. Both parties are currently developing Prospector-X, a small and experimental spacecraft that test technologies for prospecting and mining near Earth asteroids after 2020.

Legal frame

Luxembourg’s administration is also working on a legal frame for exploiting space resources so that private companies can be entitled to the resources they mine from asteroids, but not to own the celestial bodies themselves.

Luxembourg invests heavily in space mining

Digital rendition of a robotic asteroid mining equipment. (Image courtesy of Deep Space Industries)

The only international legal body available dates back to 1967. The Outer Space Treaty, signed by the US, Russia and a number of other countries, says that nations can’t occupy nor own territory in space.

“Outer space shall be free for exploration and use by all States,” the treaty says, adding that “outer space is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”

And while a discussion on the matter is bound to happen, countries such as the US, have decided to make their own rules. In November, President Barack Obama signed a law granting American citizens rights to own resources mined in space.

The ground-breaking rule was touted as a major boost to asteroid mining because it encourages the commercial exploration and utilization of resources from asteroids obtained by US firms.

Such law does include a very important clause, as it clarifies that US citizens are not granted “sovereignty or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body.”

Geologists believe asteroids are packed with iron ore, nickel and precious metals at much higher concentrations than those found on Earth, making up a market valued in the trillions of dollars.


Henry Sapiecha

Over 240 mining and energy projects waiting for investors in Cuba

Wednesday, April 22nd, 2015

cuba waiting for investors image

Cuba, the world’s sixth largest nickel producers and one of the top 10 nickel mining countries, is experiencing a sudden, but still modest, investment rush triggered by an ongoing reconciliation between the Caribbean nation and the U.S.

The country, which also holds significant deposits of other minerals as well as oil, has 246 projects hoping to attract capital and be developed, according to a new U.S. Geological Survey report published earlier this month.

“Cuba’s geology is complex, and the country has a variety of mineral commodity and energy resources,” said Steven Fortier, Director of the USGS National Minerals Information Centre.

While mineral production is largely state-controlled, the government has taken steps to change its old mining laws.

As a result, Canadians companies already have a presence in Cuba’s mining sector. One of them is Calgary-based miner Sherritt International (TSX: S), the Latin American country’s largest foreign investor, with nickel mining, oil-and-gas and electricity interests.

The ore the Toronto-based firm extracts there — under a joint venture with the country’s government — is refined in Fort Saskatchewan, Alberta, but because of the U.S. embargo, none of that refined nickel is allowed south of the border. Nickel remains one of the country’s main sources of foreign income, along with tourism.

Despite such barrier, the USGS report shows that nickel remains one of the country’s main sources of foreign income, along with tourism.

It also highlights a value increase for the country’s industrial manufacturing sector, which jumped 88% between 1993 and 2013. However, the sector’s share in the GDP decreased by 3% percent during the same period reflecting economic growth in other sectors of the economy.

Oil and industrial minerals

Industrial minerals and manufactured industrial mineral products produced in Cuba include ammonia and ammonia by-products, bentonite, cement, feldspar, high-purity zeolite minerals, gypsum, kaolin (a type of clay), lime, high-grade limestone, marble, sand, sulphuric acid, steel and urea. In 2013, an estimated 4,500 metric tons of zeolites was exported neighbouring Latin American countries and Europe. Last year Cuba exported the majority of its ammonium nitrate, the USGS report shows.

In terms of oil reserves, the body released an assessment in 2004 that estimated the total amount of undiscovered technically recoverable resources at 9.8 trillion cubic feet of undiscovered natural gas, 4.6 billion barrels of crude oil, and 0.9 billion barrels of natural gas liquids.

The full report “Recent trends in Cuba’s mining and petroleum extraction industries” is available here.

Figure from the U.S. Geological Survey report.

Canadian miners the world’s top asset buyers in 2014

Tuesday, March 3rd, 2015

Canadian miners the world’s top buyers of assets in 2014

Canada led the acquisition of mining and metals assets in terms of volume last year, and it was a close contender in terms of value, a study released Monday shows.

Despite the deals boom, overall mergers and acquisitions globally continued to decline on both a volume and value basis in the sector compared to 2013, according to EY’s Mergers, acquisitions and capital raising in mining and metals: 2014 trends, 2015 outlook.

“A few big deals in Canada in 2014 put us at the top in terms of deal volume,” says Bruce Sprague, EY’s Canadian Mining & Metals Leader. “But the reality is that the majority of the deals were junior-level strategic mergers aimed at conserving cash.”

Canada scored the top gold deal in 2014, with the joint acquisition of Osisko Mining Corp by Yamana Gold and Agnico Eagle Mines for $3.6 billion. The next largest gold deal was the UK’s Polymetal International’s acquisition of Kazakhstan’s Altynalmas Gold (Kyzyl gold project) for $619m.

“Gold remains the most-targeted commodity by volume,” says Sprague. “We saw that play out right here in Canada. The majority (88%) of gold deals, however, were valued at less than $50m, reflecting distress among gold juniors on the back of squeezed margins.”


EY says current market conditions are putting mining companies in a quandary – investing for the next stage of growth is potentially unpopular with shareholders, but it could prove to be a masterstroke if they want to fully capitalize on the next uplift in the cycle.

“For the past few years, companies have been focused on cost-reduction programs, internal capital allocation and productivity measures,” notes Sprague. “Moving forward, they need to have a broader focus on total shareholder return and make capital decisions that will support long-term value creation.”

Companies in a quandary

Still, in its outlook EY says long-awaited funding from private capital funds should begin to deploy across the sector as sellers align their value expectations with the market, and assets continue to be sold by the large cap producers in search of optimum portfolios.

“The deals we’re seeing now are a lot of mergers between equals and consolidation opportunities benefiting both parties,” explains Sprague. “The large cap producers are more focused on looking to either sell or spin off non-core assets.”


Henry Sapiecha

The full report is available here.

Investment mining in Kazakhstan to reach $30billion by the year 2017

Friday, October 24th, 2014












Kazakhstan, the second largest energy producer in the ex-Soviet Union after Russia, is seeking to spur growth by drawing in overseas investors to its resources sector.

The country, in the midst of fine-tuning details of a new mining law that will make it easier for foreigners to tap the nation’s riches, plans to award 50 to 100 exploration licenses beginning next year

The country, in the midst of fine-tuning details of a new mining law that will make it easier for foreigners to tap the nation’s riches, plans to award 50 to 100 exploration licenses beginning next year, Bloomberg reported.

Growth, shows a study by Business Monitor published last month, will be led by the coal, gold and copper sectors, which together account for the majority of the value of the Central Asian nation’s mining industry, expected to reach close to $30 billion by 2017.

Despite the slump in prices, coal remains one of the core industries for Kazakhstan, employing around 40,000 people only in the mineral-rich province of Karaganda.

Kazakhstan, the world’s largest landlocked country by land area, is also said to rank in the top ten for iron ore, and gold, it’s a well-known diamonds exporter and holds the 11th largest proven reserves of both petroleum and natural gas.

Henry Sapiecha


Wednesday, January 23rd, 2013


According to the National Bureau of Statistics of China the country’s fixed-asset investment in the mining industry reached $211 billion (CNY 1,312.9 billion) in 2012, an increase of 11.8% over 2011.

Fixed-asset investment in coal mining – China is the world’s number one producer and importer of the commodity – was up 7.7% year on year to $85 billion.

Capital expenditure in the ferrous metal mining industry raced ahead 23.7% last year to $24.6 billion.

This figure is in contrast to a 2% contraction in the steelmaking industry – the only sector in the country showing a decline in fixed asset investment.

The growth in steelmaking raw material projects were only outpaced by an increase in non-metal mining of 26.3% to $26.2 billion.

Investment in nonferrous metals mining in 2012 also experienced robust growth – up 19% to $23.7 billion.

Sourced & published by Henry Sapiecha


Tuesday, December 11th, 2012


In the wake of widespread reports pointing at central banks rushing to restock their coffers ever since the German government submitted gold demands to London and New York bankers, Latin American countries seem to also be catching the gold bug.
Gold Company

Mexico leads the way, buying  close to 100 tonnes in a couple of months last year. Now Brazil has increased its gold reserves for the second straight month, reaching the highest level in 11 years, as data from the International Monetary Fund shows.

Brazil, home Latin America’s largest economy, seems to have much further to go, as gold still accounts for a mere 0.8% of its reserves.

In addition to Brazil, others nations including Colombia, Mexico, Argentina and Paraguay have recently been adding to their bullion holdings. And this might be only the beginning.

“A wave of gold-buying among Latin American central banks is likely to be of less significance to the market than the trend in Asia has been, simply because a larger proportion of the world’s reserves are held by Asian countries,” writes Financial Times columnist Jack Farchy (subs. required).
Ka Gold Jewelry

He adds that fresh acquisitions coming from Latin America could help keep the current pace of roughly 500 tonnes a year – equivalent to the jewellery consumption of Europe and North America combined.

The outlook for the region is not clear, as some of the biggest regional economies, remain cautious. Peru for instance, which holds the third-largest international reserves in Latin America at $61 billion, has not bought any bullion since 2001. And Chile, which reserves are estimated in $40 billion, holds less than one tonne of the precious yellow metal.

Central banks bullion purchasing has become a pillar of the gold market today. Only a few years ago, these financial institutions were net sellers of gold under a long-standing inter-bank agreement. But lately they have been among the biggest buyers mainly because of weaker currencies and the potential for faster inflation.

According to data compiled by the World Gold Council, gold buying by the global central banks will hit a new high this year, reaching over the 500 tons mark, compared to the 465 tons bought in 2011.
Ka Gold Jewelry

Sourced & published by Henry Sapiecha


Tuesday, November 27th, 2012


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Lima daily Gestion reports Chinese mining companies Minmetals, Chinalco, Shougang and Zijing Mining Group are planning to invest $7.4 billion in Peru over the next five years, making up a substantial part of overall mining investment projects expected through 2017.

Shougang already works an iron mine in Marcona and recently announced an investment of $1.2 billion over the next five years to expand operations.

Zijing Mining Group, which is advancing the Rio Blanco copper project in Piura, will spend $1.5 billion for the same period, while Minmetals will invest around $2.5 billion in the gold and copper project El Galeno, located in the Cajamarca region.

Aluminum Corporation of China (Chinalco) has also announced an investment of $2.2 billion in the Toromocho copper project in the region of Junin.

China’s positive stance is in contrast to other foreign investors – Peru’s mining, oil and energy society (SNMPE) said in early September that, as a result of almost a year of non-stop anti-mining protests in different regions of the country, mining investment in the South American nation is expected to fall 33% next year.

The delays to Newmont Mining’s (NYSE:NEM) controversial $4.8 billion copper-gold Conga project in the Cajamarca region is only one of the factors investors are taking into account when rethinking their portfolios. Mostly they worry over the large number of mining projects dealing with social conflicts, such as Swiss based-Xstrata’s Tintaya copper mine, near Cuzco, in Southeastern Peru.

Behind Chile, Peru is the world’s second biggest producer of copper and silver and a major producer of gold, zinc, lead and other mineral

Sourced & published by Henry Sapiecha


Wednesday, August 15th, 2012


Burma [Myanmar]  is slowly but steadily starting to attract foreign investment, driven mainly by international resource firms eager to tap into the mineral-rich South East Asia’s country.
Ka Gold Jewelry

After more than half a century of military ruling, Burma has started benefitting from the recent suspension of sanctions by Canada, the United States and the European Union. As a consequence, big players are rushing to establish a presence in the market as  the welcome mat is out.

Oil giants Total and Chevron are already in Burma, also known as Myanmar, as are companies from China, the country’s largest foreign investor. Coca-Cola and Pepsi have announced plans to re-enter the country, while General Electric has also shown interest in the nation.

Although undeveloped, the country is home for vast and untouched reserves of highly demanded minerals and metals, such as gold, tungsten, copper and even some oil. It is also known by its precious stones and lithium reserves.

Another advantage of the still impoverished nation is to be conveniently located between China and India, which are international economic growth’s engines and hungry consumers of raw materials.
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Gold rush anyone?

Mining experts say the lack of multinational mining firms active in Burma makes it an ideal playground for small-scale miners. And, according to Saturday’s edition of the Sydney Morning Herald, gold is what the juniors are looking for.

One of those companies is Canadian exploration firm Northquest, which aims to lead the way once it is granted an exploration permit, which it submitted in June.

“There have been no big gold discoveries in this country, ever,” Jon North, chief executive and president of Northquest was quoted as saying.

However, the country’s strict regulations, including an export ban on raw ore and select mineral commodities such as gold and coal, combined with poor infrastructure, might force interested companies to adopt a “wait and see” approach, reports the Democratic Voice of Burma:

One of the major bones of contention involves the 30-70 profit sharing ratio, stipulated under the country’s 1994 mining law, between a foreign company and the Burmese government, which does not act as an equity partner but takes a hefty percentage of the total resource extracted on top of royalties and income tax.

Besides, Burma’s precious stones industry, particularly famous for its ruby, sapphire and jade production, is closed to foreign investment.

“The legal system is a mess (…) Corruption is still endemic, and little is being done to control it (…) Enter now, and risk running afoul of laws and entrenched customs. Stay away, and risk giving away first-mover advantage to your competition. The choice is yours,” writes The Nation’s columnist, Eric Rosenkranz.
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Despite the known risks, says Rosenkranz, multinationals are flooding into the country:

A hotel room cannot be had for love or money. A hotel that used to charge US$75 per night is now $150 and is over- booked. Everyone and his brother is queuing up for visas. People are deliberately flying from Phnom Penh to Yangon on Myanmar Air because it is the only flight where you can get a visa onboard.

Recent reports seem to indicate that junior mining exploration companies from Australia are to blame for the overblown prices.

According to Stephen Everett, chairman of Brisbane-based exploration company Global Resources Corp., small Aussie mining firms are in a good position to entry the Myanmar market, as they seem willing to operate in remote areas and have a strong reputation with respect to environmental and social responsibility.

Despite the enticing opportunities and the latest developments, only China, India and South Korea have invested in the country from the major economies. A situation that, judging by the enthusiastic reports on Burma’s mining outlook is about to change.
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Sourced & published by Henry Sapiecha


Wednesday, August 15th, 2012


Burma, the south-east Asian country, officially titled the Republic of the Union of Myanmar hosts 7 regional dialects, has two major military conglomerates that dominate the economy and is rife with political turmoil.

In the 1990 general election the Nobel Peace Prize recipient Aung San Suu Kyi, despite winning 59% of votes, was detained in her until home 2010.

Early in 2012 the National League for Democarcy (NLD), Suu Kyi`s opposition party, announced she had been elected into a lower house of the Burmese parliament; the NLD won 43 of the 45 seats in the lower house.

Investors have been eyeing the emerging energy, timber and mining possibilities in the region.  Exclusive Analysis has a few pointers for investors to look at before they leap.
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A Military State

Despite many countries, the United States included, opening up trade with Myanmar, there is considerable political concern over dealing with any military owned companies.

The US has barred all transactions with military companies, which is a major problem as economic transactions in the Asian region are dominated by the military based corporations Union of Myanmar Economic Holding Limited and the Myanmar Economic Corporation.

The economy is not the only thing heavily influenced by the military.  Burmese constitution ensures that the military is guaranteed at least 25% of all parliamentary seats.  In the past, in opposition of the Burmese state has led to

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Ethnic Separations

Though the last census was run in 1983 by a military junta, it is estimated that Burma is home to over 130 different ethnic groups.  These groups, however small, are represented in part by ethnicity-based parties.  So, even though the Bamar, Shan and Kayin are the three dominant ethnicities, any planning and negotiating would likely be done on state and local levels.

Violence Between Sects

Instability is still a major concern within the country.  One of the most notable areas of investor interest, a gas field located in the Rakhine state worth billions of dollars, has been hit with a curfew in an attempt to stem the violence between Muslim and Buddhist communities.

Obviously any widespread violence or humanitarian problems results in a severing of investor confidence – at the moment nearby Bangleadesh is home to hundreds of thousands of Burmese refugees due to the widespread violence in the region.

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Sourced & published by Henry Sapiecha