Archive for the ‘Platinum’ Category

Paul Wilson, CEO, World Platinum Investment Council: “We will help investors by providing better data on platinum”

Sunday, November 23rd, 2014

silver bullion bars image www.www-globalcommodities.com

Paul Wilson recently took up the role of Chief Executive Officer at the newly created World Platinum Investment Council (WPIC). The Council was launched by a group of six platinum producers in South Africa, in order to further develop the global market for platinum investment.

Readers may know that our affiliate Sprott Asset Management LP manages one of the largest above-ground stockpiles of platinum in the world, in the form of the Sprott Platinum and Palladium Trust (NYSE: SPPP). For more information, click here.

What will the World Platinum Investment Council do? Their CEO Paul Wilson was kind enough to call me up and tell me what it’s all about:

“We are launching a new organization called the World Platinum Investment Council – an entity focused on helping investors. Platinum is already a serious investment asset but we don’t think it has been fully considered by many investors as it should have been. Part of the reason has, to date, been a lack of high quality market data and a perception of opacity. The purpose of WPIC is to shine a light on the market, giving investors access to high quality information that will help them make more informed decisions while increasing their understanding of platinum’s investment potential.

The purpose of WPIC is two-fold, to provide much better market data on platinum and, in due course, help facilitate new routes to invest in the metal.

We will provide data on supply and demand, as well as above-ground inventory information, on a quarterly basis – this is a first for the metal. Significantly, we will be presenting a much better analysis of above ground stocks than has been done previously. We are working with SFA Oxford in the UK, who are finalizing the first, independent quarterly analysis, which will be available on December 3rd 2014. Crucially, WPIC is opening up this data to anyone; it’s free and you will be able to sign up to receive it by visiting our website (www.platinuminvestment.com).

Currently, 36 percent of demand comes from automobile usage in catalytic converters. 34 percent comes from jewelry. Another 20 percent is used in industrial applications. Finally, 10 percent comes from investment. Demand has been rising by around 2 percent per year over the last 5 years, principally because of increased usage in jewelry and investment.

How do we get our data? We look at the basis for consumption in each category. We go to people who are working with platinum buyers, and we try to understand how much platinum they are using, how they use it, and how they plan on using it in the future. On the supply side, we will be talking to the miners and trying to get as much information as possible about how much platinum they produce, how much metal there is, and what they’ll be putting out in the future. It’s a detailed research task but one that will be a game changer in terms of market information for investors.

The information that will come out each quarter will be an analysis of supply and demand, and the above-ground stocks of platinum. We will also provide a next year forecast starting from mid-2015. We will then be looking at the investment performance for platinum – how it has appreciated in value over the years and served as an effective store of value. Platinum has appreciated over 20 years at a similar rate to gold and silver, and more quickly than global equities and equities and real-estate in the UK. Over the last 30 years, platinum1 has appreciated more than gold2, and a lot more than silver (ed. note: taking 1984 average prices to today November 20, platinum has risen from $357 an ounce to $1213, a 240% rise1. Gold has gone from $361 to $1,190, a 230% rise2. Silver has gone from $8.14 to $16.13, a 98% increase3)

I think that platinum has been treated as a niche product by investors in the past. Our improved data and perspective will broaden its appeal and will be of use to existing and new, sophisticated and regular investors.

On the sophisticated investor side of the equation, we’re looking to attract mutual funds, insurance companies, and others of that nature to invest in platinum. I think platinum is an asset that should be considered by high net-worth individuals in North America, Europe, and Asia.

Platinum should also be of interest to retail investors. The products that investors might be interested in are broad – they could be physical bars and coins, or exchange-traded products like the Sprott Physical Platinum & Palladium Trust. In China, for instance, we will look to set up ‘accumulation funds’ so that individuals can contribute an amount per month which would go towards the purchase of physical platinum bars which they could eventually take away and store.

We will also be looking at whether or not worldwide markets have suitable exchange-traded funds set up to help investors purchase exposure to platinum and, often, help hedge against their weak domestic currencies. If in some countries, more sophisticated products are needed for family offices or institutional customers, we will look to work with existing financial institutions to try to fill those gaps.

For all these types of investors, whether retail, institutional, or family office, we think we will provide a benefit with improved information on platinum.

Our group is backed and funded by the six largest platinum miners in South Africa. The idea is that more transparent numbers on world production, usage, and available supply will benefit all investors in platinum.”

As readers may know, platinum supplies have threatened to decline for some time now. Mines are not making enough money to stay open. For Rick Rule, this is the real underlying cause of the violent protests that occurred at platinum mines in the last year. Workers need to get paid a decent salary, but platinum mines aren’t generating enough cash to give them a raise.

Nick Holland, CEO of South African gold mining firm Gold Fields Ltd., echoed the same conclusion, saying that the prospects for higher salaries for the 280,000 mine workers was dim without higher platinum and gold prices.

Because platinum mines are becoming deeper and less economic (our in-house geologist Andy Jackson has explained why), commodity experts have been calling for higher platinum prices this year. They’ve been wrong. Platinum prices have remained low. This raises questions about how much supply is really out there and whether demand can outstrip available inventory. The new Platinum Council’s upcoming report is meant to shed some light on this question. Stay tuned for what we find out.

P.S.: Sign up here to subscribe to Sprott’s Thoughts for free and hear more about this issue.

By Henry Bonner 

1 http://minerals.usgs.gov/minerals/pubs/commodity/platinum/550798.pdf

2 http://www.nma.org/pdf/gold/his_gold_prices.pdf

3 http://minerals.usgs.gov/minerals/pubs/commodity/silver/880798.pdf

________________________________________

This information is for information purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination by Sprott Global Resource Investments Ltd. that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on the objectives of the investor, financial situation, investment horizon, and their particular needs. This information is not intended to provide financial, tax, legal, accounting or other professional advice since such advice always requires consideration of individual circumstances. The products discussed herein are not insured by the FDIC or any other governmental agency, are subject to risks, including a possible loss of the principal amount invested.

Generally, natural resources investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Natural resource investments are influenced by the price of underlying commodities like oil, gas, metals, coal, etc.; several of which trade on various exchanges and have price fluctuations based on short-term dynamics partly driven by demand/supply and nowadays also by investment flows. Natural resource investments tend to react more sensitively to global events and economic data than other sectors, whether it is a natural disaster like an earthquake, political upheaval in the Middle East or release of employment data in the U.S. Low priced securities can be very risky and may result in the loss of part or all of your investment. Because of significant volatility, large dealer spreads and very limited market liquidity, typically you will not be able to sell a low priced security immediately back to the dealer at the same price it sold the stock to you. In some cases, the stock may fall quickly in value. Investing in foreign markets may entail greater risks than those normally associated with domestic markets, such as political, currency, economic and market risks. You should carefully consider whether trading in low priced and international securities is suitable for you in light of your circumstances and financial resources. Past performance is no guarantee of future returns. Sprott Global, entities that it controls, family, friends, employees, associates, and others may hold positions in the securities it recommends to clients, and may sell the same at any time.

Henry Sapiecha

ANGLO AMERICA SHOWS SIGNS OF DUMPING ITS PLATINUM HOLDINGS & INTERESTS

Saturday, May 24th, 2014

AMPLATS INDICATES AN OFFLOADING OF ITS PLATINUM HOLDINGS

anglos-cutifani-wont-take-unacceptably-poor-performances-any-longer-heads-may-roll-www.www-globalcommodities.com

Anglo American’s (LON:AAL) platinum unit, Amplats, is a step closer to selling its mines in South Africa as a now three-month strike over pay in the sector has forced the firm to dig into reserves, hitting its bottom line.

In an interview with Business Day, chief executive officer Mark Cutifani said the Rustenburg operations were no longer considered one of the company’s core assets.

I don’t think [our operations in South Africa’s platinum belt] is where our best skills set sits. That’s why I’ve been quite vocal saying we should consider taking a back step from Rustenburg,” he was quoted as saying.

While the region holds the world’s largest platinum deposits, the mines are labour-intensive and often deep, making mechanization costly and politically fraught, added Cutifani.

About 80,000 miners are on strike and have vowed not to return to the shafts until their minimum monthly wage is doubled to around $1,200.

platinum

Anglo has repeatedly said that demand, if met, would wreck its platinum subsidiary.

Earlier this month Sibanye Gold (NYSE:SBGL), the country’s top gold producer, said it was considering the acquisition of some platinum mines once the strike is resolved.

Amplats and the two other top world’s platinum producers Impala Platinum (JSE:IMP) and Lonmin (LON:LMI) said in joint statement the ongoing strike in the platinum belt was “unprecedented,” and at a stage where some of its impacts are becoming irreparable. To date, they have lost over a billion dollars in revenue.

Amplats is still producing about 60% of its platinum capacity from a few mines not affected by the strikes.

South Africa, Africa’s largest economy, holds about 80% of the world’s known platinum reserves, accounting for about 70% of global output, used for jewellery, catalytic converters in vehicles, and as a key source of hard currency for the country, among other applications.

Henry Sapiecha

SPACE ASTEROID MINING MAKES SENSE SAY THE EXPERTS

Tuesday, December 11th, 2012

MINING GOLD & PLATINUM IN SPACE ASTEROIDS
Planet Bid

911 Metallurgist explains why asteroid mining is needed: many metals that underpin our modern economy are quickly being depleted.

Without any new technological advances, metals like zinc and gold are expected to run out in 100 years.


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Sourced & published by Henry Sapiecha

LESS WORK & MORE PAY SAY AFRICAN WORKERS TO WORLDS LARGEST PLATINUM MINERS

Saturday, August 20th, 2011

World No. 1 platinum miner

raises pay offer

as union threatens strike

Anglo American Platinum has, according to South Africa’s National union of Mineworkers, raised its pay offer to workers in attempt to ward off possible threatened strike action

Author: Agnieszka Flak and Olivia Kumwenda
Posted:  Saturday , 20 Aug 2011

JOHANNESBURG (Reuters)

South Africa’s National Union of Mineworkers said Anglo American Platinum (Amplats), the world’s largest platinum producer, again raised its wage offer on Friday, trying to head off a strike that could cause a jump in global prices of the precious metal.

The platinum sector is the latest to be affected by a wave of disputes in the country’s mid-year “strike season” after stoppages in other mines, steel and fuel threatened to dent growth in Africa’s biggest economy.

“There is an improved offer …it will be taken to members for consideration,” NUM spokesman Lesiba Seshoka told Reuters. He expects a vote to start on Monday and would not disclose details of the offer.

The union will meet Amplats again on August 31.

The company on Thursday offered raises of between 7.5 percent and 8 percent, up from a previous offer of 6 percent to 7 percent.

NUM lowered its demand to between 11 percent and 12.5 percent from 15 percent, which is triple the inflation rate.

The union has said its members at Impala Platinum rejected a revised offer from the world’s second largest producer of the metal and will refer the dispute to arbitration.

“We insist on a double-digit increase across the board,” said Eddie Majadibodu, the NUM’s chief negotiator at Implats.

Implats had raised its offer to between 8 and 10 percent, while the union has been asking for 14 percent.

NUM workers in the gold and coal sectors have already reached deals for 7 to 10 percent increases, which could serve as benchmarks in the platinum talks.

The labour disputes are likely to unnerve investors already wary about putting money into the country due to steep power tariff hikes and a debate around mining nationalisation.

Implats and Amplats account for two-thirds of global platinum supply and any strike could push prices higher.

Platinum rose to its highest since early May on Friday, up 1.4 percent at $1,861.49 an ounce, partly inspired by a rise in gold, widely seen as a safe-haven for investors.

UTILITY ESKOM RISKS STRIKE

In a separate dispute, more than 200,000 water, sanitation and refuse workers seeking 18 percent wage increases marched without major incident in Johannesburg on Friday after setting fires and looting vendors at rallies in Cape Town this week.

The NUM, with more than a quarter million members in various sectors, has also threatened a strike at state utility Eskom, which supplies almost all of the country’s power, after rejecting a 7 percent pay rise offer.

Any significant pay rises would affect the utility’s strained balance sheet and could lead to further steep rises in electricity tariffs.

Further wage hikes will make it more costly to hire the workers needed to bring power by 2014 to the 25 percent of the country’s households that still have no access to electricity.

Wage deals over the past years of double to triple the inflation rate have made the country less competitive by driving up the cost of a workforce that is already more expensive and less efficient than those in emerging market peers.

But the ruling African National Congress, which is in an alliance with organised labour, does not want to antagonise a group that has supplied it with millions of votes by pushing workers to accept more modest pay increases.

© Thomson Reuters 2011 All rights reserved

Sourced & published by Henry Sapiecha

JAPAN TO INVEST HEAVILY IN SOUTH AFRICAN PLATINUM MINE

Saturday, June 4th, 2011

Itochu to Invest 22 Billion Yen

in Ivanhoe Platinum Mine

June 03, 2011, 1:29 AM EDT

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June 3 (Bloomberg) — Itochu Corp. said it has agreed to acquire an 8 percent stake from Ivanhoe Nickel & Platinum Ltd. in a mine project in South Africa for exploration and development of nickel and platinum-group metals.

The Tokyo-based company will invest 22.4 billion yen ($277 million) for the stake, it said in a statement today. The company now holds an aggregated stake of 10 percent in the Platreef project after it invested $10 million to buy 2 percent in September 2010.

Mining at the project located in the Northern Limb of the Bushveld Complex is expected to start in 2017, Itochu spokesman Yasuhiro Terashita said earlier by phone. Platinum-group metals, which include palladium and rhodium, are used as catalysts to clean exhaust gas from automobiles.

The project is expected to produce 20 metric tons of platinum-group metals each year, Satoshi Kondo, president of Itochu Mineral Resources Development Corp., a unit of Itochu, told reporters today.

–Editors: Jarrett Banks, Matthew Oakley

To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.net; Ichiro Suzuki in Tokyo at isuzuki@bloomberg.net

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net

Sourced & published by Henry Sapiecha

AUSTRALIAS MINERAL WEALTH LOCATIONS HERE

Friday, July 30th, 2010

PROFILE OF MAJOR MINERALS, OIL AND GAS

This section is based on information contributed by Geoscience Australia and the Australian Bureau of Agricultural and Resource Economics (ABARE) (September 2006).

Note: Values are given in Australian currency unless otherwise stated.

MINERALS

Maps 16.23, 16.24 and 16.25 show selected mines and deposits – map 16.23 covers gold and diamonds; map 16.24 covers bauxite, coal, iron ore, manganese ore and uranium; map 16.25 covers base metals and mineral sands.

16.23 SELECTED MINES AND DEPOSITS OF GOLD AND DIAMONDS – 2005
16.23   SELECTED=
16.24 SELECTED MINES AND DEPOSITS OF BAUXITE, COAL, IRON ORE, MANGANESE AND URANIUM – 2005
16.24 SELECTED=
16.25 SELECTED MINES AND DEPOSITS OF BASE METALS AND MINERAL SANDS – 2005

16.25 SELECTED=

Bauxite, alumina and aluminium

Bauxite is a heterogeneous naturally occurring material from which alumina and aluminium are produced. The principal minerals in bauxite are gibbsite, boehmite and diaspore (which has the same composition as boehmite but is denser and harder). Bauxite is the ore from which alumina (aluminium oxide) is extracted while aluminium is produced from smelting alumina.

Australia’s aluminium industry is a large integrated industry of mining, refining, smelting and semi-fabrication, which is of major economic importance nationally and globally. Its EDR of bauxite (5.8 gigatonnes (Gt)) provide a world class resource base for the industry, which comprises five bauxite mines, seven alumina refineries, six primary aluminium smelters, twelve extrusion and two rolled product (sheet, plate and foil) mills. In 2005 Australia was the largest producer of bauxite and alumina. The Australian aluminium industry directly employs over 12,000 people.

Production in 2005 totalled 60.0 Mt of bauxite, 17.7 Mt of alumina and 1.9 Mt of aluminium (ingot metal). Compared with 2004 these represented an increase of 6.0% for bauxite, 7.3% for alumina and no change for aluminium.

In 2005, the Queensland Government called for expressions of interest in the development of the Aurukun Bauxite Project. The objectives for the development of the Aurukun resource include its development as a source of bauxite for a new alumina refinery in Queensland. The $US1.3b expansion plans for the Gove alumina refinery in the Northern Territory are progressing. The project is scheduled to be completed by 2007 and will lift the refinery’s capacity from 2.1 Mt to around 3.8 Mt per year.

Coal

Black coal is a solid rock formed from brown coal after greater heat and pressure have been applied. Black coals are distinguished by rank and may be sub-bituminous, bituminous or anthracite. Black coal is primarily used for electricity generation and the production of coke, which is integral to the production of iron and steel. Black coal is also used as a source of heat in the manufacture of cement and food processing. Brown coal is a less matured form of coal. It has a high ‘in situ’ moisture content (up to 60%) with a correspondingly low heating value. It is highly susceptible to spontaneous combustion. Brown coal is used widely for power generation, is made into briquettes, and can be converted to liquid or gaseous fuels.

Although coal mining occurred in all states in 2005, New South Wales and Queensland produced over 96% of all black coal (anthracite, bituminous and sub-bituminous coals) and Victoria produced all the brown coal (lignite). Australia’s EDR of recoverable black coal is 39.2 Gt, which is about 5% of total world EDR making Australia’s holdings the sixth largest in the world. EDR of recoverable brown coal is 37.4 Gt, which gives Australia the largest holding in the world and accounts for 24% of world EDR. All EDR is located in Victoria and about 89% is located in the La Trobe Valley.

Australia’s coal production and exports have risen strongly over the last two decades. Production of black coal increased in 2005. Output of saleable black coal at 303.0 Mt was 1.7% higher than in 2004 and made Australia the world’s fourth largest producer. Brown coal production reached 67.2 Mt in 2004-05. Australia was the world’s fifth largest producer of brown coal with about 8% of production.

Copper

Copper occurs in various forms. It can occur naturally in its pure state (native copper) but is principally mined as chalcopyrite. Copper is one of the most important and widely used metals of modern society due to its properties of:

  • high electrical and heat conductivity
  • ductile and malleable
  • resistant to corrosion
  • ability to form alloys with other metals.

These properties enable copper to be used in a wide range of applications. The largest use of copper is in the electrical industry where copper wire and cable account for about half of the world’s copper production. Other major markets are the motor vehicle and construction sectors. Copper is also an integral part of the expanding information technology sector and is used in the manufacture of computers, mobile phones, fax machines and televisions.

Major Australian copper mining and smelting operations are at Olympic Dam (South Australia) and Mt Isa (Queensland), with smaller projects in New South Wales, Queensland, Western Australia and Tasmania. Australia’s EDR of copper is 41.4 Mt giving it the world’s second largest holding of copper EDR with 8% of the total.

Mine production of copper in 2005 was 921 kt of contained copper, 7% higher than in 2004 (860 kt). Queensland dominates Australian production with 399 kt (largely from Mt Isa) followed by South Australia with 213 kt (all from Olympic Dam). The remaining production occurred in New South Wales (190 kt), Western Australia (90 kt) and Tasmania (30 kt). As a producer, Australia ranks fifth, with 6% of world output, after Chile (36%), the United States of America (8%) and Indonesia and Peru (both 7%).

Diamond

Diamond is composed of carbon, and is the hardest known natural substance, but a sharp blow can shatter it. Diamonds occur naturally but are extremely rare compared with other minerals. Diamonds are thought to form deep in the earth at high temperatures and pressures and are carried to the surface or near surface by volcanic rocks in narrow cylinder-like bodies called ‘pipes’. A large proportion of industrial diamonds are manufactured, and it is also possible to produce synthetic diamonds of gem quality. Uses for diamond include jewellery, computer chip manufacture, drill bit facing, and stone cutting and polishing.

Australia produced 30.7 million carats (Mc) of diamond in 2005, making it the world’s second largest producer of diamond by weight after Russia, with Botswana and Congo (Kinshasa) ranked third and fourth respectively. It is the second largest producer of industrial-grade diamond and the third largest producer of gem/near gem diamond after Botswana and Russia.

Australia’s EDR of gem/near gem diamonds is 124.2 Mc and industrial diamonds 129.2 Mc. These are both more than double the EDRs for 2004 as a result of the decision to proceed with underground mining at Argyle and a related upgrade of around half of the mineral resource to ore reserves based on the results of a comprehensive feasibility study. Australia’s EDR of industrial diamond is ranked third in the world, with 21% of world EDR.

The majority of Australian production was from the Argyle mine in the Kimberley region of Western Australia which produced 30.5 Mc of mostly industrial and near gem diamonds in 2005. Argyle production was 48% higher than in 2004 despite mining constraints within the deepening open pit.

Gold

Gold has a range of uses but the two principal applications are as an investment instrument and in the manufacture of jewellery. Secondary uses, in terms of the amount of gold consumed, are in electronic and dental applications.

Gold resources occur and are mined in all Australian states and the Northern Territory. Australia’s EDR of gold is 5,225 tonnes, the second largest in the world after South Africa.

Australian gold production in 2005 (reported by ABARE) was 263 tonnes. This level of production makes Australia the second largest producer in the world after South Africa. The Super Pit at Kalgoorlie in Western Australia was the largest producer with an output of nearly 26 tonnes (just over 0.8 million ounces).

Iron ore

Iron ore is the source of primary iron for the world’s steel industries. Over 97% of iron ore production occurs in the Hamersley Basin (Western Australia). Small production also comes from elsewhere in Western Australia, Tasmania, South Australia and New South Wales. Australia’s EDR of iron ore is 16.4 Gt which is about 10% of world EDR. Western Australia has almost all of Australia’s EDR with about 92% occurring in the Pilbara district. Australia has the fifth largest iron ore holding in the world.

Australia’s production of iron ore in 2005 (reported by ABARE) was 261.4 Mt, which was 17% of world output, making Australia the world’s third largest producer after China and Brazil.

Manganese ore

About 90% of the world’s production of manganese is used in the desulphurisation and strengthening of steel. Other uses include the manufacture of dry batteries, as a colorant, and as an ingredient in plant fertilisers and animal feed. Manganese ore was mined in the Northern Territory and Western Australia in 2005. Production reached 3.9 Mt, 14% of world output, making Australia the third largest producer in the world. Australian production is from three mines – Woodie Woodie (Western Australia) and Groote Eylandt and Bootu Creek (both in the Northern Territory). Australia’s EDR of manganese ore, at 143 Mt, is 12% of world EDR, fourth largest in the world.

Mineral sands

The three main minerals mined from Australian mineral sands deposits are the titanium-bearing minerals rutile and ilmenite and the zirconium-bearing mineral zircon. Rutile and ilmenite are used mainly in the production of titanium dioxide pigment. A small portion, less than 4% of total titanium mineral production and typically rutile, is used in making titanium sponge metal. Zircon is used as an opacifier for glazes on ceramic tiles, and is used in refractories and the foundry industry. Production in 2005 was from Western Australia, Queensland, Victoria and New South Wales.

Australia’s EDR of ilmenite is 214.9 Mt of which 59% is in Western Australia, 25% in Queensland and the rest in New South Wales (7%), Victoria (6%) and South Australia (3%). Australia accounts for 19% (the second largest holding behind China at 35%) of the world’s EDR of ilmenite. Queensland, New South Wales, Western Australia and Victoria together hold over 97% of Australia’s 20.5 Mt EDR of rutile, which, at 40% of world EDR, is the world’s largest.

EDR of zircon is 32.9 Mt, with Western Australia and Queensland holding just over 68%. In world terms, Australia’s EDR is 43% of the total and is the largest holding by any country.

Although Australia has substantial EDR of mineral sands, Geoscience Australia estimates that some 17% of ilmenite, 28% of rutile and 25% of zircon EDR is unavailable for mining. They are in areas quarantined from mining that are largely incorporated into national parks. Deposits in this category include Moreton Island, Bribie Island and Fraser Island, Cooloola sand mass, Byfield sand mass and Shoalwater Bay area (Queensland) and Yuraygir, Bundjalung, Hat Head and Myall Lakes National Parks (New South Wales).

In 2005 Australia produced 2.03 Mt of ilmenite, 177,000 tonnes of rutile, 55,000 tonnes of leucoxene and 426,000 tonnes of zircon. The bulk of Australia’s rutile and zircon production is exported compared with about 35% for ilmenite. The remaining ilmenite is upgraded to synthetic rutile. Australia was the world’s largest producer of ilmenite, rutile and zircon (with 23%, 47% and 40% of world output respectively) in 2005.

Nickel

Australia’s EDR of nickel increased by 6% to 23.9 Mt in 2005. Western Australia has the largest nickel resources, with over 90% of total Australian EDR. Australia holds the largest share of the world’s EDR, with 37%.

Australian mine production of nickel in 2005 increased by 1% to 189,000 tonnes, all from Western Australia. The value of all nickel products exported was $3.5b. Australia was the world’s third largest producer, accounting for 13% of estimated world nickel output.

Tantalum

Australia is the world’s largest producer of tantalum in the form of tantalum concentrates. Australia also has the world’s largest stock of tantalum resources, principally in its deposits at Greenbushes and Wodgina in Western Australia.

Australia has the world’s largest EDR of tantalum at 52,000 tonnes. This is approximately 95% of world EDR.

Uranium

Australia has 716,000 tonnes of uranium in Reasonably Assured Resources recoverable at costs of less than US$40/kilogram of uranium – this is the world’s largest resource and represents 37% of world resources in this category (OECD Nuclear Energy Agency & International Atomic Energy Agency, 2005). Almost all of Australia’s total resources are in six deposits:

  • Olympic Dam (South Australia) which is the world’s largest uranium deposit
  • Ranger, Jabiluka and Koongarra in the Alligator River region (Northern Territory)
  • Kintyre and Yeelirrie (Western Australia).

Three uranium mines operated in 2005 – Ranger open cut, Olympic Dam underground mine, and the Beverley (South Australia) in situ leach operations. In 2005 Ranger produced 5,906 tonnes of uranium oxide, Olympic Dam 4,335 tonnes and Beverley 977 tonnes for a total of 11,218 tonnes, 6% higher than for 2004. Australia, with approximately 23% of world uranium production in 2005, is the world’s second largest producer after Canada (28%). While there are a number of undeveloped deposits in Western Australia, Northern Territory, South Australia and Queensland, uranium mining is only allowed to occur in the current three mines in the Northern Territory and South Australia.

Exports of uranium oxide in 2005 were a record 12,360 tonnes, valued at $573m. Exports are controlled by Australian Government bilateral safeguards agreements, which are designed to ensure that Australia’s uranium is used only for electricity generation and is not diverted to any military purposes. Importing countries must be signatories to the International Atomic Energy Agency’s safeguards arrangements and have entered into an agreement with the Australian Government to adhere to safeguard obligations for exporting uranium.

Australian mining companies supply uranium under long-term contracts to electricity utilities in the United States of America, Japan, European Union (United Kingdom, France, Germany, Spain, Sweden, Belgium and Finland), Republic of (South) Korea and Canada.

Zinc, lead, silver

Zinc is the 23rd most abundant element in the earth’s crust. The construction, appliance and vehicle manufacturing industries use large amounts of zinc, mainly as coatings on steel beams, sheet steel and vehicle panels in the automotive industry.

The widespread occurrence, relatively simple extraction, and combination of desirable properties have made lead useful to humans since at least 5000 BC. In deposits mined today, lead (in the form of galena) is usually associated with zinc, silver and sometimes copper, and is extracted as a co-product of these metals. More than half of the lead used comes from recycling, rather than mining. The largest use is in batteries for vehicles and communications.

The relative scarcity, attractive appearance and malleability of silver has made it suitable for use in jewellery, ornaments and silverware. Its extensive use in coins throughout history has declined over the past 40 years. In Australia, the 1966 fifty-cent piece was the last coin in general use to contain silver (80% silver, 20% copper). Silver is mined and produced mainly as a co-product of copper, lead, zinc, and to a lesser extent, gold. Today, photographic paper and film, followed by the electronics and jewellery/tableware industries are the most important users of silver.

Australian EDR of zinc is close to 42 Mt, with Queensland holding 62%. The Northern Territory, New South Wales, Western Australia and Tasmania also have zinc EDR.

Australia’s EDR of 23.8 Mt of lead is 32% of world EDR. Queensland has 60% of total Australian EDR. Other holdings are in the Northern Territory, New South Wales, Western Australia and Tasmania.

EDR for silver in 2005 was 44 Kt, with Queensland having the largest share at 67.5%. Other holdings occur in South Australia (12.5%), Northern Territory (11.3%), New South Wales (5.0%), and Western Australia (2.5%) with the remainder in Tasmania and Victoria.

Australia has the world’s largest EDR of zinc (18% of the world) and lead (32%), and the second largest EDR of silver (16%).

Mine production of zinc, lead and silver in 2005 was 1.37 Mt, 767,000 tonnes and 2,407 tonnes respectively. Production was higher for each commodity compared with 2004, with zinc up 33,000 tonnes, lead up 90,000 tonnes and silver up 170 tonnes. In production, Australia ranks second for lead and zinc after China and fourth for silver after Peru, Mexico and China. Cannington (Queensland) is the world’s largest and lowest cost silver and lead operation and produced almost 288,000 tonnes of lead and 43.9 million ounces of silver in 2005. Century (Queensland) had the largest zinc output at 501,000 tonnes.

OIL AND GAS

Map 16.26 shows significant locations of oil and gas production and includes oil and gas production locations, oil and gas pipelines and oil refineries.

16.26 LOCATIONS OF OIL AND GAS PRODUCTION AND PIPELINES – 2005
16.26   LOCATIONS OF OIL AND GAS PRODUCTION AND PIPELINES - 2005

Crude oil and condensate

In 2005-06 production of total crude oil and condensate from the North West Shelf (off Western Australia) and the Gippsland Basin (Victoria) accounted for 41% and 19% respectively of total Australian crude oil and condensate production. The North West Shelf was the major producer of condensate during 2005-06 with 79% of total Australian production sourced from that region.

Liquefied natural gas (LNG)

LNG production has in previous years been solely from the North West Shelf Venture but in February 2006 production commenced from the LNG plant in Darwin (Northern Territory). Australian LNG production in 2005-06 was 12.38 Mt. Export earnings from LNG in 2005-06 were $4.4b, an increase of $1.2b on 2004-05.

Liquefied petroleum gas (LPG)

LPG is a valuable co-product of oil and gas production and petroleum refining. The major constituents of LPG are propane and iso and normal-butane, which are gaseous at normal temperatures and pressures, and are easily liquefied at moderate pressures or reduced temperatures. Operations involving LPG are expensive in relation to other liquid fuels because LPG has to be refrigerated or pressurised when transported and stored. LPG is an alternative transport fuel for high mileage vehicles in urban areas, as well as a petrochemical feedstock and domestic fuel.

In 2005-06 the major producers were the Gippsland Basin and the North West Shelf accounting for 41% and 46% of total production respectively.

Sourced & published by Henry Sapiecha

CHINESE TAKEOVER OF AUSSIE RESOURCES PLANNED

Thursday, July 29th, 2010

Chinese likely to be circling

Aussie targets

KATE EMERY, The West Australian June 1, 2010, 7:21 am

Paladin Energy is a company likely to be on China's radar because its biggest assets are overseas. Pictured is the company's Langer Heinrich uranium project in Namibia.NO COPYRIGHT / Paladin Energy ©

A sinking Australian dollar, global equity jitters and a surge in Chinese foreign reserves have put Australian acquisitions back on China’s agenda, analysts say.

Paladin Energy, PanAust and Aquarius Platinum top the list of takeover targets, according to Citigroup analysts. They say miners with offshore assets will be sought after because those with local projects could be hurt by the resource super profits tax and or adverse Foreign Investment Review Board rulings.

“Just as the GFC gave China an opportunity to bid for mining assets with little competition, we expect the global risk reduction sell-off and collapse in the Australian dollar to once again provide an opportunity,” Citi analysts said in a note to clients.

The Citi report echoes industry speculation that the proposed tax could hand Chinese interests a greater slice of Australian resources as other sources of funding dry up.

Chinese foreign exchange reserves surged to $US2.4 trillion in March, up 25 per cent year-on-year. On Citi’s numbers, it is estimated about 70 per cent of that is in US dollars, with the balance mostly in euros and Japanese yen.

The Australian dollar has fallen more than 9 per cent from this year’s high of US93.51¢. It closed yesterday at US84.78¢, down from Friday’s close of US85.09¢.

Paladin, PanAust and Aquarius were named at Citi’s top targets because they all own overseas assets, have no major potential blocking shareholder and are mining commodities that China is expected to be seeking: uranium, copper and platinum respectively.
Sourced & published by Henry Sapiecha

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