London Gold Market Report

Ben Traynor

BullionVault

Gold "Now in Consolidation Phase", US Markets Prepare to Open Again

WHOLESALE gold bullion prices rallied to a one-week high at $1720 an ounce Wednesday morning in London, though they still looked set to record a loss on the month, while European stocks opened higher before losing some ground and US markets prepared to re-open after being closed for two days.

Silver bullion climbed to $32.37 an ounce, also up on the week, while oil and copper ticked higher and US Treasury bonds fell.

By Wednesday lunchtime in London, gold bullion looked set to record its first monthly loss since May, with spot gold trading nearly 3% below where it started October.

"There are those who are still looking for another dip, perhaps one that offers an opportunity to jump in sub-$1700, between now and year-end," says a note from UBS.

Growing role for Africa in the “Golden Age of Gas” – Report

Elias Pungong

With open access and attractive leasing terms, Africa’s oil and natural gas resources continue to attract a broad spectrum of investors, according to a new report from Ernst & Young Natural gas in Africa – The frontiers of the Golden Age launched at Africa Oil & Gas Week.

Elias Pungong, Ernst & Young’s Oil & Gas Leader for Africa says, “Natural gas development holds tremendous opportunity for Africa. It can be a primary driver of economic growth and broader social development, as well as a major spur for local employment growth and infrastructure development.”

London Gold Market Report

Ben Traynor BullionVault  

THE SPOT MARKET gold price traded just below $1715 an ounce during Tuesday morning's London session, little changed from last week's close, while European stock markets recovered their losses from a day earlier and UK and German government bond prices fell.

"Downside targets will be in focus while the gold price stays below the 17 October high at $1753.86," says Commerzbank senior technical analyst Axel Rudolph.

The silver price climbed above $32 an ounce shortly after London opened, holding above that level for most of the morning, while other commodities were broadly flat.

Markets in the US are due to remain closed for the second day running as a result of Hurricane Sandy. Monday's trading saw gold futures volumes "far below normal", one analyst said, with another adding the market remained "pretty quiet" on Tuesday morning.

Press reports suggest that this Friday's US nonfarm payroll report could be delayed as a result of the storm.

Nigeria To Launch Mining Road Map By December

Chris Cooter, Canadian High Commissioner to Nigeria

VENTURES AFRICA –  In a move that will boost investment in mining operations in Africa’s most populous nation, Nigeria, the country’s Minister of Mines and Steel Development, Musa Mohammed Sada, has hinted that the road map for the country’s solid mineral development will be released by the end of the year 2102.

Speaking during a during a meeting with a delegation of mining investors from Canada led by the Canadian High Commissioner to Nigeria, Chris Cooter, the minister said: ” with the recent discussion on the road map for solid mineral development, we are  going to have lots of activities in the sector .The  roadmap for solid minerals development will give greater opportunities for local and foreign investors to explore the enormous potentials of Nigeria’s  minerals and metals  sector”

Rest of Africa laps up investment

miningmx by David McKay -- LOOK up from the dire reports about strikes, regulatory uncertainty, the leadership vacuum in SA and turn you attention to what’s happening north of our borders. While the Farlam Commission sets about understanding the Marikana atrocity, billions of dollars are flooding into Africa’s resources industry.

In the past week, Chinese company Sinchaun Hanlong said it had received government blessing for a $1bn investment in Sundance Resources, a large iron ore deposit in Cameron. Discovery Metals, meanwhile, an Australian company that owns the Boseto copper project in Botswana, has attracted a $850m hostile bid from China’s billionaire investor Yu Yong of CF Investments.

Investment in Mozambique’s coal and gas discoveries is now entering its tens of billions of dollars while Exxaro Resources recently passed up an opportunity to investment in SA’s Soutpansberg coalfields preferring instead its exposure to Central African Republic’s iron ore industry - a commodity that is also turning the head of Jindal Steel & Power.

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In South Africa, the majority of striking workers in the gold mining sector returned to work yesterday, Reuters reports, after unions agreed a wage deal with mine operators.

Anglo American Platinum meantime said Thursday it lost an estimated 138,000 ounces of platinum output, equivalent to over $200 million, as a result of South African strikes. The chief executive of Anglo American, which owns an 80% stake in Amplats, resigned Friday after leading the company for nearly six years.

In other mining news, African Barrick Gold lowered its 2012 production forecast Friday, when it also reported a 1.6% rise in cash costs per ounce as part of its third quarter results. China Gold is currently doing due diligence as part of its bid to buy Barrick Gold's 74% stake in African Barrick.

BHP questions West Africa's iron ore ambitions

Fri, 10/26/2012 - 02:44 EDT story from Business News Headlines - Yahoo! News  in 

• YahooBizNews

LONDON (Reuters) - BHP Billiton, the world's largest miner, cast doubt on the fate of dozens of West African iron ore projects on Thursday, arguing Australia and Brazil alone can feed global demand for the steelmaking ingredient.

The remarks come hot on the heels of a decision on Wednesday by Brazil's Vale, the world's top iron ore miner, to put on hold plans for its $5 billion Simandou project in Guinea, a move analysts have blamed on weaker iron ore prices and an uncertain political situation in the country.

Though not unexpected given its focus on the $19.5 billion Serra Sul project in Brazil and the slow pace of development in Guinea, Vale's decision is a blow for Conakry and for a broader West African region battling to break in to the iron ore market.

"We believe the production in Brazil and in Australia will be sufficient to meet demand and there is increasing consensus, and a recognition by investors and the market, that this is indeed the case," BHP Chief Executive Marius Kloppers told reporters on the sidelines of a shareholder meeting.

"Progressively, you have seen other companies come to a conclusion that is closer to our position."

BHP, whose own iron ore production is concentrated in Australia's Pilbara region, told Guinea in July that it planned to pull out of its Mount Nimba project there.

Read more here 

Africa’s oil sector to surpass Brazil’s, says Ashburton

By 2016, the offshore oil industry in Africa will have accelerated past that in Brazil, a fund manager has forecast.

What Investment Trader by Rob St George -- According to Richard Robinson, an investment manager at Ashburton, Braziliandeepwater drilling will expand by 100 per cent over the next four years. But the development of oil basins off Africa’s east and west coasts is set to grow by 135 per cent in that time.

But Robinson has tipped oil-services companies to profit most from this, rather than riskier wildcat oil explorers.

‘By 2016, the offshore oil-service industry is set to see a significant ramp-up in activity,’ he argued. ‘Mid-water drilling is set to double, with deepwater and ultra-deepwater drilling set to climb by over 200 per cent.’

IMF urges African oil producers to avoid exploration ‘white elephants’

The International Monetary Fund has urged African oil and gas producing nations to direct their revenues to infrastructure and education rather than on “white elephants.”

Exploration in east and southern Africa has been high in recent months as a result of big oil and gas discoveries in Tanzania, Mozambique, Kenya and other regional countries.

Antoinette Sayeh, the IMF’s director for Africa, said on Monday the oil and gas sector does not create as many jobs as other sectors of the economy, but if the revenues were directed to education and transport links they would help create jobs.

Ms. Sayeh said nations could set up sovereign wealth funds to invest for future generations and to provide cash, which could be used to help their economies navigate times of volatility in the global economy.

Barrick exploring gold in Rorya

African Barrick Gold (ABG) is searching for gold deposits in Rorya District of Mara Region, an official said.

“ABG has been exploring at Dett Village for a long time now and today they are scheduled to meet with local leaders to discuss how best they can continue with exploration,”  Rorya District Council Acting Executive Director Mr Sebastian Masanja told the ‘Daily News’.

The meeting was among other things expected to address challenges that might hinder the smooth execution of the exercise, the official revealed. “They have tipped us that there might be gold deposits at Dett Village and this is good news to us if all goes well,” Mr Masanja said, underscoring the  need of the mining company to  conduct  the exercise openly in a bid to avoid unnecessary conflicts with the local communities.

It is however still not clear how long it will take for the Canadian giant gold mining company to give final results on whether there are sufficient gold deposits to enable them invest in the district that is situated close to Lake Victoria, the world’s second largest water body.

Jindal Steel Nears $2 Billion Mine Purchase in West Africa

Naveen Jindal of Jindal Steel & Power

Bloomberg Businessweek -- Jindal Steel & Power Ltd. (JSP), India’s second-biggest steelmaker by value, is approaching an iron ore mine acquisition in West Africa for at least $2 billion as it seeks raw material to feed its factories at home and in Oman.

The investment will secure deposits of at least 1 billion metric tons and include building a transport line, Executive Director Manish Kharbanda said in an interview, without identifying the seller. The New Delhi-based company has looked exhaustively for reserves in Sierra Leone, Ghana, Mauritania, Sudan, Gabon and Liberia, he said.

Jindal Steel, which plans to more than quadruple capacity by spending as much as 350 billion rupees ($6.5 billion) in the next two years, is looking to secure raw material sources following curbs on iron ore mining at home. The New Delhi-based company, run by billionaire lawmaker Naveen Jindal, ended a $2.1 billion contract with the Bolivian government in July to develop the El Mutun iron ore mines following a dispute.

Tanzania: Ministry - Not Anyone Can Announce Oil, Gas Finds

George Simbachawene

AllAfrica -- The  government has announced that all new oil and gas discoveries will be declared in public by the government and not by investors or any other party.

Deputy Minister for Energy and Minerals, George Simbachawene said in Dar es Salaam that the move was taken in order to protect the rights of the country in the light of a move by the government to put in place a gas policy.

He was speaking during the Media Editors Roundtable Dialogue hosted by the city-based NGO Agenda Participation 2000 which dwelled on the theme "Natural Resource Boom, Corruption and State Capture in Africa a case of Tanzania. How can Tanzania unleash its potential growth as a Pole for East Africa's growth."

"While we aim to ensure maximum transparency and accountability, we have moved a step ahead where we have to ensure the country benefits fully from these treasures especially gas. In doing so investors are not allowed to publicize their exploration findings. It is the government that will do so," he said.

Small oil companies blazing a trail in Africa says Artemis Investment Management | What Investment

Specialist oil producers operating in east Africa can look ahead to a strong year, according to Artemis Investment Management.

The firm argues that the combination of improved technology and greater political stability is set to deliver the next oil boom in the region.

‘Africa is blowing the socks off everyone,’ comments Richard Hulf, a fund manager at Artemis, ‘and small oil companies are blazing a trail in Africa.’

Read more

Small oil companies blazing a trail in Africa says Artemis Investment Management | What Investment

Ethiopia Charts a Chinese Course

allAfrica-- Addis Ababa — The death of Ethiopia's leader of 21 years has raised fears of instability in one of Africa's fastest-growing non-oil producing nations, which could potentially slow investment activity.

Former Prime Minister Meles Zenawi, who passed away in August, saw foreign direct investment (FDI) as key to his development plan for Ethiopia. This attitude helped shift Ethiopia's economy from being wholly reliant on the export of agricultural commodities to, for example, utilising abundant labour and cheap power to begin developing a manufacturing industry.

"Without Meles, Ethiopia will struggle to control unrest (ethnic/religious) that could easily spill across regional borders," a recent International Crisis Group report said.

According to the National Bank of Ethiopia, FDI in this country climbed from 150 million dollars in 2005 to 1.1 billion dollars in 2010. To bring in scarce foreign exchange, Meles channeled investment to export-oriented sectors like floriculture, horticulture, textiles, and leather.

Window closing on mining investment

The country has a limited period in which to convince international banks and rating agencies that South Africa is still a premier mining investment destination, or capital flows might go elsewhere because of the labour crisis enveloping the sector, says AngloGold Ashanti CEO Mark Cutifani.

His warning comes days after Moody’s Investor Services lowered South Africa’s sovereign credit rating, saying the government had "diminished capacity" to handle its political and economic challenges and due to the increasingly negative investment climate.

Marginal mines could be shut if the wave of wildcat strikes in the platinum, gold, and coal sectors continued, Mr Cutifani said at a press briefing yesterday.

Those minerals, along with iron ore, chrome, manganese and others, generate more than half of South Africa’s foreign exchange revenue.

Oil and Gas: East Africa’s race to get ready

The Africa Report -- The reserves already discovered will make East Africa one of the next gas frontiers. Companies are waiting for policymakers to determine priorities and incentives before they can settle on investment plans.

Fast forward to 2020. The deep waters off the coasts of Tanzania and Mozambique are teeming with rigs: drilling, extracting and transporting gas from the Mafia and Rovuma basins. Shiny new liquefied natural gas (LNG) plants, where the gas is cooled before being shipped to markets in Asia, are dotted up and down the coast.

But just as oil majors such as Royal Dutch Shell, BG Group and Petrobras are looking to buy stakes in the gas fields, the region's governments are still un- decided about the policy regimes they want. Nothing is set in stone. Final investment decisions, even for the most advanced of the new developments – such as US firm Anadarko's planned LNG plant in Mozambique – are due next year. Political wrangles could derail those plans at any time.