December 31, 2012

#China now world`s largest market for #silver investment - Mineweb.com

China now world`s largest market for silver investment - SILVER NEWS - Mineweb.com Mineweb


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Opec cartel to reap record $1tn - FT.com

Opec cartel to reap record $1tn

The Opec oil cartel, led by Saudi Arabia, will pocket a record of more than US$1tn in net oil revenues in 2012 as the annual average price for Brent, the benchmark, heads to an all-time high in spite of weak economic growth.

The windfall will provide fresh capital to some of the world's largest sovereign wealth funds. United Arab Emirates, Saudi Arabia and Kuwait, the most influential members of the cartel, are home to three of the world's 10 largest SWFs by assets under management, according to estimates by the SWF Institute.

With one trading day left before the year-end, Brent oil prices are on the point of seeing an average for the year of about $111.5 a barrel, higher than the previous all-time high set in 2011 of $110.9.

The benchmark closed at or above $100 every trading day in 2012, bar 24 in June and early July.

In January, Ali Naimi, the Saudi oil minister, said that the world's largest oil producer aimed to keep oil prices at the triple-digit level throughout 2012. "If we are able as producers and consumers to average $100 I think the world economy would be in better shape," Mr Naimi told CNN at the time.

The record run of $100-plus oil prices, coupled with strong production in the first half of the year, lifted Opec's net oil export revenues to a peak of $1,052bn in nominal terms, up 2.5 per cent from last year, according to the US Energy Information Administration, the statistical arm of the US Department of Energy. A decade ago, Opec countries made just under $200bn selling their oil.

In real terms, adjusted for inflation, Opec's revenues in 2012 were also the highest ever, surpassing the peaks set during the oil crises of 1973-74 and 1979-81.

The huge revenue windfall has been unevenly distributed among the members of the cartel, which controls roughly 40 per cent of the world's oil supplies. Iran took a smaller-than-usual share of the pot as US and European sanctions crippled its energy industry, pushing down its oil production to a 32-year low. Between January and November, Iran earned only 6.5 per cent of Opec's total net revenues, down from a a share of 9-10 per cent during most of the 2000s.

The shortage of Iranian oil helped Saudi Arabia, Iraq, Kuwait and the UAE to pump more, profiting from record annual prices. Also, Libya's oil earnings recovered in 2012 from the slump triggered by the 2011 civil war.

The huge inflows will shore up the finances of the 12-member group, particularly as some Middle East countries lift social spending on the wake of the Arab Spring.

The International Monetary Fund estimates that Riyadh and Abu Dhabi both need oil prices at about $80 a barrel to balance their budgets. Only a decade ago they were able to balance their budgets with oil prices averaging $25.

Read the article online here: http://www.ft.com/intl/cms/s/0/eedc5b56-50da-11e2-9623-00144feab49a.html#axzz2GdW0ysM6


December 24, 2012

Will the Sukhoi Log #gold project in #Russia ever be developed?


Sukhoi Log gold development could propel Russia to world No.1 - Mineweb.com

GOLD NEWS

Russia's Sukhoi Log gold deposit could well be the world's largest but there still seems no rush by the government to develop its riches. It may well be worth even more remaining in the ground.
Author: Clara Ferreira-Marques
Posted: Thursday , 20 Dec 2012 
BODAIBO, Russia (Reuters) -
It looks like any one of remote eastern Siberia's low-lying, peat-coloured hills: only the thin trenches that scar Sukhoi Log hint at the work of generations of geologists to measure the riches beneath.
This bleak expanse, uninviting against a steel grey sky, is probably the world's largest virgin gold deposit, with mineral wealth to rival the world's largest, at Grasberg in Indonesia.
Yet it has remained untapped for half a century, held back by its remoteness, state restrictions and, in recent years, a lack of interest on the part of a Moscow government riding the wave of energy profits and holding out for higher gold prices.
"(The government) would love more gold, but they have no time to think about these issues at the top level," said Sergei Guriev, rector of the New Economic School in Moscow.
"At the lower level, people are happy with the status quo."
Soviet geologists surveyed Sukhoi Log intensively in the 1970s yet little came of it. But now the Russian government has stirred long-dormant interest, suggesting it might invite bids to mine the gold. While such talk has come and gone in the past - and no details of any tender have been given - there is new debate on how, and at what cost, the ore might be exploited.
Beyond the future of Sukhoi Log itself, the outcome could be a litmus test for Moscow’s willingness to embrace changes some have been lobbying for in the mining sector - whether lifting a bar to foreigners' involvement in strategic assets or simply showing any appetite at all for turning earth into bullion.
For all the gold fever of pioneers who claimed Russia’s wild east for the tsars in the 19th century, Sukhoi Log - the name means Dry Gully - remains a symbol of a more recent lack of drive to mine the riches beneath the world's biggest country.
Analysts say the latest study on that single deposit indicates it could produce 1.6-1.9 million ounces of gold a year over three or four decades - worth an annual $3 billion or so at today's gold price near $1,700 per ounce. Initial development costs are forecast at upwards of $2.5 billion.
There are traces of Soviet ambitions in this distant corner of Siberia, 1,000 km northeast of Irkutsk: half-built bridges are scattered along the cratered road out of the gold rush town of Bodaibo, concrete pillars sticking out among the fir trees.
Nearby, a handful of five-storey apartment blocks, the start of a miners' colony, stand forlorn in the taiga, close to where, in 1912, soldiers shot dozens of striking gold miners from the Lena river fields in a massacre that helped foment revolution.
In Bodaibo, few expect a new rush to develop Sukhoi Log.
"For now, it is worth more in the ground," says Alexander Tuluptsov, a senior engineer at GV Gold, a private firm that is mining the neighbouring Golets Vysochaishy deposit. A local man whose wife's father was among the geologists who first charted Sukhoi Log, he does not expect to see it worked in his lifetime.
There is little pressure locally for work to start. Gold prices are riding high, bringing jobs and money to the sparse population. In Bodaibo, home to about 15,000, shiny SUVs are testimony to work at other mines and along historic riverbed deposits of the Lena basin. So too are prices in shops, where basic produce can cost three times what it does in even Moscow.
Irkutsk Region is bigger than France but has less than 2.5 million people. Anyone wanting to mine Sukhoi Log would probably have to fly in workers from further afield.
Speaking in London, where his mining firm is listed, Vitaly Nesis, U.S.-trained chief executive of Polymetal, said the Kremlin sees no haste in doing anything with the deposit:
"It is an asset that is a natural hedge against global inflation. Why does the government need to turn a real asset into a pile of dollars or euros that could be inflated away?"
However, Russia's leadership should foster more probing digs across its territory: "What the government should do," he said, "Is promote investment in exploration to find new assets."
Yet that, too, has lagged in Russia. Exploration alone could bring development to its farthest reaches - metalled roads, modern airports, rail, power, not to mention training and jobs.
But, say mining entrepreneurs, encouraging pioneering, small outfits and attracting foreign prospectors will need an overhaul of red tape and changes to laws, notably limits on foreigners' rights to exploit any big, new seams they discover.
Lou Naumovski, who runs the Moscow office of Canadian mining firm Kinross, estimated more investment in exploration could bring the Russian economy an additional $1.6 billion a year - but only if the government improves the regulatory framework:
Prospectors "take huge risks for high returns", he said. "If you have so many barriers, it simply doesn't work.
"You need huge political courage to say 'we need to really work to diversify, even within natural resources'."
GOLDEN AMBITION
Russia has gold deposits second only to South Africa and major deposits of copper, coal, diamonds, nickel, palladium and much else. But it has remained underdeveloped and underexplored since the collapse of the Soviet Union, as the state has focused on profiting from oil and gas reserves that account for 70 percent of Russia's exports. Where in Canada, say, an average of $178 was spent on exploration per 100 square kilometres of its vast territory in the last five years, Russians spent just $28.
"In other countries, there is a lot more interest in developing their mining industry," said Nikolai Zelenski, chief executive of Nord Gold, one of the few Russian mining companies to operate beyond the former Soviet Union.
He compared his own country unfavourably with Burkina Faso: "It is not a very rich country in mineral resources," he said. "But since 2005 they have built six mines, and I am not sure that many more mines have been built in Russia since then."
Foreign-owned miners have been the engine of development in much of the emerging world but have had little success in Russia, with the notable exception of Kinross. The world's biggest producer, Barrick Gold, pulled out this year.
Most have preferred to tap resources elsewhere - even in countries as challenging as the Democratic Republic of Congo - than tackle Russia’s climate, restrictions and red tape.
However, easy pickings are running out in Africa, which may push miners to look again at Russia, while Moscow’s leaders may also see more reason to encourage them; official figures suggest Russia's viable reserves may run out in 15 to 30 years. And a lower oil price may spur the Kremlin to exploit other resources.
Mark Bristow, chief executive at London-listed Randgold Resources, said his Africa-focused firm could look east in five or 10 years - "Russia's incredibly important" - and he expected Moscow in time to pay more attention to encouraging gold production - "I think it will eventually matter," he said.
FROM SCRATCH
There is already a range of companies ready to expand.
Unlike other sectors in Russia, gold mining has not become dominated by the fabulously rich and politically influential "oligarchs" who took over other industries privatised in the 1990s. Arguably, there were few existing gold assets to grab.
"Whatever we did, we did from scratch. That is what is special about gold mining," said German Pikhoya, chief executive of Polyus Gold, Russia's largest producer, which has spent billions in exploration and works on the fringes of Sukhoi Log. It is seen as a top contender to develop the deposit.
Russia is not without success in gold mining, even in areas where nature is at its toughest. Operators have tackled complex projects, building operations like Polyus’s Olimpiada mine or Polymetal's Amursk processing hub for complex, refractory ore or Kinross's Kupol mine in hostile, Arctic Chukotka.
Some 30 km (20 miles) from the swelling outline of Sukhoi Log, tapping a satellite deposit, GV Gold has gone from start-up to mid-ranking producer in just over a decade. It aims to produce 5.2 tonnes (some 167,200 ounces) of gold this year, has fund manager BlackRock as an investor and ambitions to list its shares. It could reap the benefits of development at Sukhoi Log.
Its director for corporate development, Maxim Gorlachev, stressed GV Gold would not over-reach itself in talking about potentially the world's biggest deposit, but it was willing to take advantage of opportunities if the conditions were right:
"We understand our place in the food chain," he said. "But if there was an opportunity to participate, we would evaluate. And if cost-efficient for us, why not?"
Getting conditions right for investment in gold exploration may take some time yet, however. There is no sign the government will move soon to lift a limit on foreign ownership of strategic assets; legislation scheduled for this year has not appeared.
Russia has overtaken South Africa as South African output has slowed and it is now the world's fourth largest producer of gold, according to data from Thomson Reuters GFMS. With Sukhoi Log, Russia could rival top producer China. But its exploration - key to securing a future for Russian gold mining - still lags.
Legislation is not the only problem. Lack of labour and skilled contractors in remote Siberia is another, as is funding, especially tough at the moment. Poor infrastructure is a barrier too. Bodaibo's airstrip, for example, is served by only small, ageing turboprops. And they cannot land in heavy rain.
Some mining firms adopt a go-it-alone strategy, building infrastructure themselves rather than rely on local officials. But without a clear political signal in Moscow that it wants to develop Sukhoi Log, none is rushing to build the new highways, airport and water and power plants a major deposit requires.
"Is there going to be a gold rush in the next five years?" asked Kinross's Naumovski. "I would like to believe there will.
"But not unless the government undertakes those reforms that we and other mining companies are recommending."


Sukhoi Log gold development could propel Russia to world No.1 - GOLD NEWS - Mineweb.com Mineweb


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December 14, 2012

#Gold. Big correction below 1800. If gold breaks out of this correction on the upside, we should see fireworks

Below we see five years of gold. Big correction below 1800. If gold breaks out of this correction on the upside, we should see fireworks.

#Centamin getting fuel again. Should trade up today!

Centamin Says Chevron Has Been Told Fuel Supplies May be Resumed
2012-12-14 07:42:07.804 GMT


By Tim Barwell
Dec. 14 (Bloomberg) -- Chevron is Centamin's fuel supplier, has been notified by Egyptian General Petroleum Corporation that fuel supply to Sukari may be resumed and that no retrospective payment is currently due.
* Centamin says further update on the status of gold exports
will be provided in due course as this will determine when
operations at Sukari may resume
* NOTE: Centamin dropped 47% in London yesterday after halting
its mining operations

Link to Statement:{NSN MF0FUZ3HBS3K <GO>} Link to Company News:{95678Z EY <Equity> CN <GO>} Link to Company News:{CVX US <Equity> CN <GO>} Link to Company News:{CEY LN <Equity> CN <GO>}

For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}

To contact the editor responsible for this story:
Tim Barwell at +44-20-7073-3512 or
tbarwell@bloomberg.net

December 13, 2012

Egypt: #Centamin Operations suspended

Bad news for Centamin shareholders. Operations halted. This note from Canaccord Research 

Centamin



UK and European Research | Hold | Target 40p | 13 December 2012

Basic Resources - Mining - Gold Mining

Operations suspended

What's new?

Centamin has suspended operations following an inability to export gold and a lack of fuel supplies, combined with a claim for $65m to back-pay fuel subsidies from 2009.

Impact on the Canaccord Genuity view

The squeeze on working capital and the apparent rapidly deteriorating business environment has forced the company to suspend operations. The mine has been placed on care and maintenance until the gold sales and fuel supply issues are resolved.

(1) We note that the group was relatively well funded at the end of September, holding cash of $125m, gold sales receivables of $27m and bullion on hand of $22m, totalling $174m or 10p per share. While there would have been major movements in these levels during Q4, given recent issues, we see this 10p level as a floor, suggesting maximum downside is around the c. 80% mark.

 (2) We expect that due to the requirement for government to endeavour to sustain conditions to attract foreign investment, it is possible that the export and supply issues may be quickly resolved, but confidence in Egypt continues to edge lower.

Valuation

Centamin traded at 0.43x NAV (spot, 5%) yesterday comparing to the global junior producers average of 0.66x (and intermediate producers at 0.85x). However with limited marginal buyers, we think it is possible that the share price could move down by up to 80% today, with 40% being the mid point and most likely scenario, which would represent a P/NAV of 0.25x (spot gold).  
Given uncertainty we downgrade to a Hold (from Spec Buy) and reduce our target price to 40p share (from 110p) by reducing our target price multiple to 0.25x from 0.65x (at peak gold price of US$2,000/oz).

Share performance catalyst

Restart of operations and gold exports.

December 6, 2012

#Gold and #silver the ‘go-to’ assets for capital preservation – Mylchreest - Mineweb.com


On the path of the global economy and the role of gold and silver in preserving wealth.

Gold and silver the ‘go-to’ assets for capital preservation – Mylchreest

Paul Mylchreest’s latest 75 page long Thunder Road report makes for fascinating and disturbing reading on the path of the global economy and the role of gold and silver in preserving wealth.
Paul Mylchreest’s occasionally-produced Thunder Road Report always makes for fascinating reading and delivers insights into the markets which most mainstream analysts miss – or choose to ignore. He’s now producing his unique view on the markets under the auspices of London broker, Seymour Pierce, which one hopes does not cramp his style too much!
The latest report, which he put out today, suggests that the insights are still incisive – and often worrying, for those looking to their financial futures, but there is the advantage that under the Seymour Pierce banner it is now available to those who may want it in hard copy, as well as online.
Mylchreest is a believer in the Kondratieff, or Long Wave economic theory. Wikipedia describes this as sinusoidal-like cycles in the modern capitalist world economy. Averaging fifty and ranging from approximately forty to sixty years, the cycles consist of alternating periods between high sectoral growth and periods of relatively slow growth. Unlike the short-term business cycle, the long wave of this theory is not accepted by current mainstream economics – which puts Mylchreest somewhat out on a limb, as he accepts himself. However to set against this the theory does support the ‘supercycle’ idea which gained a certain amount of mainstream acceptance during the recent commodities boom.
Mylchreest titles the Executive summary of his latest report - Inflationary Deflation: creating a new bubble in money and looks at the way excessive monetary stimulus, coupled with low interest rates, creates financial bubbles and reckons that Central Banks are now creating the ultimate bubble – in Money – in an attempt to counter what he sees as the downward leg in most recent Long Wave cycle. He notes “first it was NASDAQ, then it was real estate and now it is money” (He describes the “Inflationary Deflation” paradox as referring to the rise in price of almost everything in conventional money and simultaneous fall in terms of gold.)
“This”, Mylchreest notes referring to the QE policies being followed by most major governments and Central Banks “is the biggest debt bubble in history. Each time deflationary forces re-assert themselves, offsetting inflationary forces (monetary stimulus in some form) have to be correspondingly more aggressive to keep systemic failure at bay. The avoidance of a typical deflationary resolution of this long wave is incubating a coming wave of inflation. This will not be the conventional “demand pull” inflation understood by most economists.
“The end game is an inflationary/currency crisis, dislocation across credit and derivative markets, and the transition to a new monetary system, with a new reserve currency replacing the dollar. This makes gold and silver the “go-to”assets for capital preservation.”
As Mylchreest sees it physical gold is the ONLY financial asset with no counterparty risk and a several thousand year track record as a store of wealth par excellence. Furthermore, gold is the only asset which outperforms during both inflation and deflation and he reckons we are seeing a battle to the death in these opposing forces.
While he comments that some commentators doubt gold’s outperformance during deflations, he draws attention to Roy Jastram’s 1977 classic book on the subject – The Golden Constant – with its 500+ years of data (updated and re-issued in 2009 with support from the World Gold Council) which actually shows that gold performs better in major deflations than perhaps it does in inflation – somewhat contrary to generally accepted monetary thinking these days. What Jastram’s research does suggest is that gold retains its purchasing power across a wide range of scenarios and that, in effect, its performance in perhaps countering inflation is probably more due to it retaining purchasing power as currencies themselves depreciate – and that gold will ultimately counter the loss in currency values caused by the kind of excessive money printing which we are seeing now. Thus Mylchreest reckons that this will lead to an eventual victory for inflationary forces – over deflation – as currency crises erupt which makes physical gold (and silver hanging on its coattails) the best assets to hold in this scenario – but also perhaps that if deflation should win out over inflation, then gold is the best asset to hold in this scenario too.
Jastram’s Golden Constant tells us that since the 14th Century, gold’s purchasing power has maintained a broadly constant level. To put this in practical terms, an ounce of gold has repeatedly bought a mid-range outfit of clothing. This was true in the fourteenth century, when an ounce of gold was worth £1.25 to £1.33; it was true in the late 18th century and it remained true at the beginning of this century (2000 to 2008), when an ounce of gold averaged £269 or $472. Even the exchange rate between gold and commodities has been relatively constant over the centuries.
On the other hand, the US dollar that bought 14.5 loaves of bread in 1900 buys only 3/4 of a loaf today. While inflation and other forces have ravaged the value of the world’s currencies, gold has emerged with its capacity for wealth preservation firmly intact. Being no-one’s liability, gold exhibits the same wealth preserving qualities in the face of financial turmoil, earning a reputation as a crisis hedge in addition to its credentials as an inflation hedge.
But back to Mylchreest’s Thunder Road report, and its comments on gold. He notes that some potential gold investors may feel they have missed the boat given the 11-12 year bull market in gold, but he reckons that in the end game the gold price will reflect the reciprocal of the purchasing power of existing currencies and that these are being debased at an ever-increasing rate. He reiterates something that has been noted by other commentators that there is evidence that, contrary again to some economic theory, gold is seeing increased demand as the price rises, rather than the reverse with ETF holdings at an all time high and Central Banks turning to being buyers rather than sellers. He also notes the view, often expressed by Mineweb in these pages, that China is actually at the forefront of gold purchasing despite it not reporting such changes in its official reserve figures.
There are a number of very interesting – indeed worrying –pieces of research in this 75 page report which the writer has to admit he has only had time to skim through so far. Among these are the view that we are now entering the fourth great inflation phase in history – and that the prior ones were brought on by factors which seem awfully familiar today: Excessive population growth putting increasing pressure on available resources; Governments – or rulers – running large deficits; and expansion of the money supply leading to currency debasement.
What is perhaps most worrying is the way these great inflation phases ended. That of 1180-1317 ended with banking collapse and the Black Death with known world population sinking by 20%. The second great inflation of 1496 to 1650 ended with plague (again) and wars with consequent population reduction– coupled with a decline in silver supply, which was then the world’s money. The third of 1733-1814 ended rather less unpleasantly with the Great re-coinage of 1816 and Britain adopting the gold standard – i.e. going on to a hard money backing for what was then the world’s strongest economy.
Mylchreest reckons we are in the fourth great inflation –which started back in 1897 – but with no evidence that the world’s now dominant economy, the U.S, is likely to adopt sound money principles, although one supposes the position could be usurped by China which many believe to have more strong money ideals.
And this leads us, to a final section of the Mylchreest report which is looking at the likelihood (inevitability) of a new global reserve currency emerging to replace the US dollar. He reckons that China is taking the role of France, which effectively brought down the old Bretton Woods agreement through its distrust of the dollar leading it to converting its dollars to gold, which was unsustainable. Key Chinese figures have publicly been commenting on their dissatisfaction with U.S. monetary policy and the country is believed, as we noted above, to be buying large quantities of gold to help give its own currency a better negotiating position in possibly participating in the most likely future reserve currency which is surmised to likely be an expanded version of the IMF’s Special Drawing Rights.
Mylchreest’s latest Thunder Road Report is some 75 pages in length so there is no way we can cover it in detail – however much of it is devoted to explaining his views on the various phases of the Long Wave economic theory. To download the full report as a pdf click here.



The MasterMetals Blog

Annual #Energy Outlook #AEO2013 Early Release Overview @eia

#AEO2013 Early Release Overview

ANNUAL ENERGY OUTLOOK 2013 EARLY RELEASE OVERVIEW - December 5, 2012

ANNUAL ENERGY OUTLOOK 2013 EARLY RELEASE OVERVIEW
The Annual Energy Outlook 2013 (AEO2013) Reference case released today by the U.S. Energy Information Administration (EIA) presents updated projections for U.S. energy markets through 2040. The Reference case projetions include only the effects of policies that have been implemented in law or final regulations. 

See the report at:
http://www.eia.gov/forecasts/aeo/er/

 

Contact: 
Paul Holtberg
202-586-1284

December 5, 2012

#ENI Announces Major #Gas Find Off #Mozambique - NYTimes.com #Energy

One of the wells ENI drilled, called Coral 2 found gas-bearing rock 140 meters, or almost 460 feet, thick — an exceptional amount
The total amount discovered is equivalent to about 12 billion barrels of oil. A high proportion is likely to be recoverable, ENI said.
According to industry estimates, ENI’s share of the Mozambique discoveries could be worth around $15 billion.

ENI Announces Major Gas Find Off Mozambique

LONDON — The Italian oil company ENI said Wednesday that it had made new natural gas discoveries in the waters off Mozambique, a find that will help consolidate ENI’s position as one of the leaders in the hot new East Africa region.
Offshore Mozambique, where ENI’s discovery is located, ranked third in the world in terms of oil and gas discovered last year, after the Santos Basin in Brazil and Iraqi Kurdistan, according to Mansur Mohammed, an analyst at Wood Mackenzie in Edinburgh.
The finds — from the sixth and seventh wells that ENI has drilled — add an additional 6 trillion cubic feet of gas to what ENI has already found. That is a large amount of gas but is dwarfed by the 68 trillion cubic feet that ENI now says it has found in its exploration concession called Block 4, where ENI has a 70 percent shareholding.
Three other shareholders — Galp Energia of Portugal, Kogas of South Korea and ENH, the Mozambican national oil company — each hold 10 percent.
The total amount discovered is equivalent to about 12 billion barrels of oil. A high proportion is likely to be recoverable, ENI said.
According to industry estimates, ENI’s share of the Mozambique discoveries could be worth around $15 billion.
The ENI finds coincide with an effort by the company’s chief executive, Paulo Scaroni, to focus more on exploration and production. In an interview, Mr. Scaroni said that ENI’s exploration activities in Mozambique would come to about $700 million. When you make a business of exploration and are “successful you make a huge amount of money,” he said.
ENI first found gas in Mozambique last year, closely following a discovery by Anadarko Petroleum of the United States.
The two companies are now negotiating with the government on a development plan. The biggest money earner is likely to be exporting gas to Asia as liquefied natural gas. The Web site of the Mozambique Instituto Nacional de Petroleo, the energy ministry, has a presentation that indicates that as many as 10 LNG plants or trains could be built, which would make Mozambique a very large player in the world gas market.
Mr. Scaroni said there could also be a role for a floating LNG facility, a technology that Royal Dutch Shell is now developing for use off western Australia. Shell recently tried to buy Cove Energy, which had a small position in the Mozambique discoveries, but was outbid by Thailand’s PTT Exploration and Production.
ENI is not a major player in LNG and may need help with the huge capital costs for developing the gas, which Mr. Scaroni put in the “tens of billions” of dollars.
Anadarko is also not an LNG specialist. It is widely thought in the industry that the companies will bring in partners.
Mr. Scaroni said he had been talking to potential partners “but we are fairly reluctant to strike a deal with anybody until we finish our exploration.”
A recent report by Bernstein Research says that Mozambique will be “ENI’s most significant project, although we do not expect production until 2019 at the earliest.” Bernstein estimates that the internal rate of return for Mozambique LNG will be a substantial 27 percent.
The gas discoveries off Mozambique are contained in sandstone deposits in what were ancient river beds, similar to those off West Africa and elsewhere.
What makes the Mozambique discoveries particularly rich is that the sandstone layers containing the gas are particularly thick. One of the wells ENI drilled, called Coral 2 found gas-bearing rock 140 meters, or almost 460 feet, thick — an exceptional amount. 

Read the article here:  ENI Announces Major Gas Find Off Mozambique - NYTimes.com

December 4, 2012

Jim Rogers: Short US #Bonds, Likes #Russia, Hold #Gold, doubts Shale #Gas & #Oil

Jim Rogers takes no prisoners in the way he makes the case for commodities. The author of “Hot Commodities” is so bullish—particularly on agriculture these days—that hearing what he has to say can leave you a bit unsettled. When IndexUniverse.com Managing Editor Olly Ludwig caught up with Rogers recently, he said new RBS’ lineup of commodity ETNs that have his name on them are so far superior to the competition.

Surveying the world of agriculture, Rogers talked about the growing shortage of farmers around the world at a time of tight food supplies. He also reaffirmed his bullishness on gold—and his bearishness on bonds—both of which are closely tied to his skepticism that the U.S. and the rest of the industrialized world will ever get out from under all its indebtedness without some additional crisis.

His most surprising revelation? After dismissing Russia for years as a dangerous investment destination, where losing money was almost guaranteed, he said Russian President Vladimir Putin has changed his approach to foreign investment. That means Rogers is poking around the commodities-rich country looking for ways to profit.

On Gold:


Rogers: I own gold and I own silver. I own all the precious metals, especially gold and silver. I'm not sure I would buy right now. Gold has gone up 12 years in a row, which is extremely unusual for any asset, at least in my experience. I don’t know any asset that’s gone up 12 years without a down year except gold. Gold has had only one decline over 30 percent in those 12 years. That, too, is extremely unusual.
Plus, if you look at the open interest from the CFTC, the speculators have been piling into gold. The number of call options is more than twice the put options. All the signs are that there's too much speculation in gold right now.
I’m not selling, by any stretch. I own it. If it goes down, I’ll buy more. If America bombs Iran, I’ll probably buy more going up. But I own it and, over the longer term, gold is going to go much higher because the world is doing nothing but printing money. And when the world economies get bad again, they're going to print even more money. But I'm not buying now.
Ludwig: As far as gold and silver right now, which do you see as the more prospective of the two precious metals?
Rogers: On a historic basis, silver is cheaper than gold. Gold is down 10 or 15 percent from its all-time high. Silver is down 30 or 40 percent. So I guess I’d rather buy silver than gold. I’m buying neither at the moment. But if I had to, I’d probably buy silver today rather than gold. But again, I’m not buying or selling either.

Read the article online here:  Jim Rogers: Short US Bonds, Likes Russia

December 3, 2012

China Moves Forward in Opening #Gold Market - WSJ

#China will allow over-the-counter gold trading between banks for the first time Monday, a significant financial reform for the world’s second-largest buyer of the precious metal.

China Moves Forward in Opening Gold Market - MarketBeat - WSJ

By Clementine Wallop


Bloomberg
China will allow over-the-counter gold trading between banks for the first time Monday, a significant financial reform for the world’s second-largest buyer of the precious metal.
The move reflects the Chinese government’s latest effort to develop Shanghai into a major gold trading center, and mirrors similar developments in the country’s currency and oil markets.
The introduction of interbank trading is intended to develop China into a liquid and market such as London, and demonstrates the government’s readiness to open the market to greater participation by international banks, said Jeremy East, global head of metals trading at Standard Chartered PLC STAN.LN +1.37%(STAN.LN).
“From a government perspective, gold is seen as currency, and the government is slowly releasing the controls on currency. We expect the [gold] market will be opened up to more foreign banks,” he said.
Given their trading volumes, Chinese banks already play a significant role in determining international gold prices, so the move will have a limited impact on prices, Mr. East said.
China offers a massive gold market, albeit one that is tightly controlled. The country is the world’s biggest gold producer and ranked as the No. 2 gold consumer in the third quarter of this year. It has official gold reserves of 1,054 metric tons, the world’s sixth-largest, World Gold Council data show. But gold exports are banned and only a handful of banks hold import licenses.
Until now, member banks have been able to trade physical gold between themselves on the Shanghai Gold Exchange, but the absence of an over-the-counter market restricted them from becoming market makers in gold. In an over-the-counter market, transactions are quoted and conducted between parties on a principal-to-principal basis rather than being traded through a broker on an exchange.
Chinese gold demand has surged in recent years. The People’s Bank of China 601988.SH -0.72% has encouraged people to buy gold while it has added to its own stockpile to diversify its foreign reserves. The Shanghai Gold Exchange is the world’s biggest platform for trading physical gold.
The introduction of interbank trading represents only a “small step” in the government’s long-term plan for its gold market, but the initial stages of interbank trading are likely to be “very limited,” said Xie Duo, director-general of the central bank’s financial market department.
“We’re trying to test the market,” Mr. Xie said.
Standard Chartered is one of the banks that will participate in interbank trading when it begins next week. Others include Chinese banks such as Industrial & Commercial Bank of China Ltd. 601398.SH -0.52% (601398.SH) China Construction Bank Corp. 601939.SH 0.00% (601939.SH) and Bank of China Ltd. (601988.SH), as well as Chinese units of foreign banks such as HSBC Holdings PLC HSBA.LN +0.24%(HBC).
Mr. East noted that the gold market will remain tightly regulated.
“Ultimately the gold market will open up to more banks, but it’s not going to be carte blanche,” he said. “It’s unlikely the floodgates will be opened and every foreign bank will be able to import everything they want.”
The Shanghai Gold Exchange said late Thursday that the interbank gold trading will be cleared and delivered by the bourse and will be conducted via the China Foreign Exchange Trading System, a central bank subsidiary that oversees onshore currency trading. The SGE is directly supervised by the PBOC.
The gold exchange currently offers spot and deferred prices to more than 3 million individual clients, a senior PBOC official said this month.
The opening up of the gold market comes as China is seeking to increase foreign investors’ participation in the nation’s crude-oil market. Chinese regulators said this month that they will allow qualified foreign institutional investors to trade crude-oil futures contracts planned for the Shanghai Futures Exchange.
Gold exchange-traded funds, hugely popular in Western markets, are widely expected to be the next precious metals product launched in China.
The Shanghai Stock Exchange could launch gold ETFs early next year if it receives government approval by the end of this year, the state-run China Securities Journal said last week, citing an exchange official.
ETFs have been a major source of demand for physical gold since the first gold ETF was launched in 2003. In the third quarter of this year, global gold demand from ETFs rose 56% from the same period a year earlier, WGC data showed.


China Moves Forward in Opening Gold Market - MarketBeat - WSJ

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#MuddyWaters weighs on #commodities traders

Short seller's allegations surrounding #Olam are hitting investor appetite for the sector as a whole

Muddy Waters weighs on commodities traders
Financial Times, 8:22am Monday December 3rd, 2012--
By Javier Blas, Commodities Editor
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Industry executives worry that the US short seller's allegations surrounding Olam are hitting investor appetite for the sector as a whole

Read the full article at: http://www.ft.com/cms/s/0/ee2cf2e8-3d10-11e2-9e13-00144feabdc0.html