While Trafigura's metals business accounted for an average of 40% of the company's total profit in the period 2012 to 2019, that share fell to 23% between 2020 and 2022, and in the 12 months to March 2023 it has been just
Coming labor precipice in mining sector as shortage of skilled engineering and geo's risks crimping output of critical #metals.
#AI and automation may further reduce the sector's reliance on skilled labor.
The flip side? Drop in mining graduates means those who do choose to go into the industry have a lucrative career ahead.
From Bloomberg:
It's getting harder to find the Mining engineers the world needs.
Fewer students want to be geologists or engineers, partly due to mining's negative image regarding pollution, human rights and gender equality. That's leaving the industry with an aging workforce:
Some 80% of the 1,250 mining engineers registered with the UK's Engineering Council are over 50, and 40% are at least 60!
Hundreds of pages of legal filings describe how the LME sleepwalked into a crisis, "that the LME was largely in the dark about Tsingshan's role as the major driver of the price spike until after it had decided to cancel billions of dollars of nickel trades; that the exchange's top decision makers were asleep as the market spiraled out of control; and that Chamberlain made the key decision that the market was disorderly in about 20 minutes after he woke up on March 8 – unaware until much later that the LME's staff had allowed prices to move more rapidly by disabling its own automatic volatility controls."
…
Jane Street alleges the very fact that the LME's key decision makers were asleep was a breach of the exchange's regulatory duties, since it meant that "no-one had been monitoring transactions in order to assess whether there were disorderly trading conditions." The LME disputes that it was in breach.
What oversight there was came from the exchange's trading operations team. They were in charge of operating the LME's price bands, a form of speed bump designed to limit extreme price moves, such as in the case of "fat finger" trades.
But in the early hours of March 8, the operations team received numerous complaints from market participants that the price bands were preventing them from booking trades. At 4:49 a.m., they suspended them altogether.
Dizzying Ascent
It was soon after this that nickel prices started the most dizzying part of their ascent. By the time Chamberlain woke up, at 5:30 a.m., the price was already $60,000 a ton. In the next 38 minutes, it rose another $40,000.
"The abandonment of price bands caused or at least materially contributed to the speed and scale of the increase in prices," Jane Street said in its court filing. "Without price bands in place, the LME could not control price volatility at all."
Chamberlain wasn't aware that his operations team had suspended the price bands, as he made his pivotal decision to suspend the nickel market.
The exchange still didn't have a handle on the scale or the importance of Tsingshan's position — the real reason behind the runaway rally.
…
Brokers on the LME would normally need to pay their first margin call of the day by 9 a.m., based on prices prevailing at around 7 a.m. If that had happened on March 8, the LME would have needed to request $19.75 billion from 28 banks and brokers – an unprecedented sum that was more than 10 times the previous daily record before March 2022.
How Latin America wastes billions of dollars worth of valuable metals - MINING.COM
E-Waste in 13 LatAm countries rose by 49% between 2010 and 2019, roughly the world average. The issue is that just 3% was collected and safely managed, a fraction of the 17.4% global average.
According toa new reportproduced by the Sustainable Cycles Programme, co-hosted by the UN University and the UN Institute for Training and Research, Latin America has a big opportunity to recover valuable materials from e-wastethat it has been throwing it into the garbage.
Data compiled for the report show that the e-waste generated regionally in 2019 contained 7000 kilos of gold, 310 kilos of rare-earth metals, 591 million kilos of iron, 54 million kilos of copper, and 91 million kilos of aluminum, representing a total value of roughly $1.7 billion of secondary raw materials.
Gains for commodity exporters will easily outweigh their losses last year as the pandemic spread and crushed demand for raw materials:
Bloomberg Economics estimates that $550 billion will shift from importers to exporters in 2021, nearly double the $280 billion reverse transfer last year when prices collapsed.
In absolute terms, Russia will benefit the most. China's net exports will drop by around $218 billion — far higher than the figures of around $55 billion for the next-worst off countries, India and Japan.
"I used to go with 500,000 pounds to London," said former Glencore exec.
"In those days paying so-called "commissions" was both legal and even tax-deductible for a Swiss company…"
"The old-style traders, the Marc Rich diehard breed, some of them don't quite get it. Until they're sitting and talking with the FBI. Then they get it."
Excerpts from The World for Sale, a book on the history of the commodity trading industry by Javier Blas and Jack Farchy from Bloomberg.
See the article online here:
Former Glencore Exec Details Suitcase of Cash He Used to Seal Deals - Bloomberg
London-based private equity group Appian Capital Advisory has raised $775m for its second mining fund, as it taps into a wave of investor interest in hard assets and efforts to combat climate change.
“We’ve been able to attracta lot of investors that didn’t have metals or mining exposure previously,” including Endowments, SWF, Family Offices and other Institutional Investors, adding it had benefited from cash exiting oil & gas funds.
Appian already lined up five investments for 40% of the capital committed. These include equity investments in Mineração Vale Verde’s copper-gold asset in Brazil and the Fingerboards mineral sands project in Australia.
It plans to target additional investments in countries including Brazil, Australia, Mexico, Peru, Chile and Canada, and where Appian has existing operations. The second fund will run for 10 years.
See the whole article on the Financial Times here:
Junior mining stocks - small publicly-traded companies looking to hit the jackpot with a big discovery - are well-known for offering both extremely High Returns, with the correspondinglyHigh Risk.
In order to help the investor separate the wheat from the chaff among the universe of thousands of available companies out there, Visual Capitalist, in partnership withEclipse Gold Mining, is putting together a five-part series on themistakes investors commonly make when evaluating mining exploration stocks.
The first instalment covers the Management Team, focusing on what to look for, including the characters you’ll want to avoid!
The second part covers the Business Plan, or lack thereof! The upcoming parts in the series will cover jurisdiction, project quality, and more.
From Visual Capitalist:
Management Team Checklist
If you’ve ever researched mining exploration stocks before, it doesn’t take long to realize that every company will talk about how “great” their team is.
Here’s a few steps to ensure that the team is actually great — and not filled with pretenders.
Step 1: Avoid the Bad Characters
The mining stock universe can be filled with interesting and amusing characters, but many of them are not there to generate you a return. Here are the personas you should aim to avoid:
The Pump n’ Dumper
Accumulates stock at insanely low prices, raises money, and then uses gray-area promotional strategies. Sells stock as soon as price is high enough to make a profit.
#Gold had a rough day along with the rest of the market. That's still better than the S&P which HAS LOST TWO AND A HALF YEARS' WORTH OF GAINS IN LESS THAN ONE MONTH!!
In times of coronavirus panic, even havens can be unreliable.
Gold closed off February on a tarnished note, ending last week with its steepest daily decline since 2013. As financial markets panicked over the spread of the pneumonia-like illness, stocks tumbled and dragged gold and other precious metals lower. That's a rare phenomenon for a metal that tends to shine brighter when everything else looks gloomy. It will also be a brief one.
Back in 2008, spot gold fell by more than a quarter between July and late October, before embarking on an unprecedented run toward $1,900 an ounce, once global rate cuts began in earnest.
"The price increase, combined with capital discipline among the larger miners, is generating a bonanza of free cash flow while mergers could spark share gains among smaller players, according to five precious metals fund managers interviewed by Bloomberg.
"After more than $20 billion in mergers and acquisitions among large-cap miners last year, small and medium-sized companies could be next, providing another reason to buy."
The world's rich are hoarding gold – this according to data buried in a recent Goldman Sachs note to clients.
In the note published over the weekend, Goldman recommended diversifying long-term bond holdings with gold, citing "fear-driven demand" for the yellow metal.
The Goldman note cited political uncertainty and recession fears as the catalyst for the move toward gold. It also mentioned worries about a wealth tax, increasing interest in Modern Monetary Theory (essentially money-printing) and the current loose central bank monetary policy.
Data buried in the note also revealed that owning physical gold appears to be the preferred method to "hedge against tail events" by the rich.
"Since the end of 2016 the implied build in non-transparent gold investment has been much larger than the build in visible gold ETFs."
Digbee is on the cusp of launching a ground-breaking accredited independent peer review system for complex mining projects
Founder Jamie Strauss is bringing to bear his years of experience in the mining industry
Founder Jamie Strauss is bringing to bear his years of experience in the mining industry
Jamie Strauss, the founder of Digbee, frames the process of making investment decisions in the mining sector in a remarkably simple way.
"People just want to know if the science has been done properly," he says.
"Or alternatively, are you trying to con me?"
It's a conundrum that has vexed mining company investment decision-makers for years, but one which is about to be solved by new products that are being launched by Digbee, Strauss's new company that aims, according to the strapline on its website [www.thedigbee.com], to bring "transparency and clarity to the mining sector."
Digbee is unique because it provides on-demand, cost-effective and easy-to-digest technical mining analysis using an expert network of accredited mining professionals that helps improve critical decisions and mitigate risk
More precisely, says Strauss, "Digbee offers accredited peer reviews of complex mining projects, with a specific focus on geology, metallurgy, mine engineering and project infrastructure."
As Strauss tells it, the demand for this sort of product can only grow.
In our article, we explain that Agarwal has made about $500m in gross profits on the trade. BUT, that is before the substantial costs required to service the instruments involved in making the stake happen. Coupon costs alone will have totalled about $300m since he first put on the two legs of the trade.
And we've learned that Agarwal is likely to reveal that he is up about $100m from the overall project. We assume that means a hefty chunk of the remaining $100m will be headed to the folks at JPMorgan.
Agarwal's trade strongly resembles an equity collar, which DD's Rob Smith and Arash Massoudi explained last year has become a hot money spinner for Wall Street banks looking to make money from deep pocketed clients. In short: collars do not come cheap.
In short:
Agarwal just spent an insane amount of time and energy to correctly pick a stock that soared 80 per cent in two years, but due to the use of an exotic structure may have only made profits equal to his bank fees . . . yikes!
Finding a new deposit is tough, but here's how to better your odds. This infographic shows the steps of mineral exploration, from prospecting to production.
Spending forecast to rise more than 75% through 2025: MinEx
Discovery of world-class deposits has slowed in past decade
A rebound in exploration by global miners could see spending hit $18 billion by 2025 with China the front runner in the search for a new generation of giant discoveries.
Exploration budgets are rising after they plunged to an 11-year low of about $10 billion last year as mining companies slashed costs in the wake of a collapse in prices, according to Richard Schodde, managing director of Melbourne-based MinEx Consulting Pty, an industry adviser.
"We are coming out of the bottom of the cycle. I actually see the opportunity for the exploration sector to regain its mojo and quickly deliver a pipeline of good discoveries," Schodde said in an e-mailed response to questions. "It's catch-up time for the industry."
China, the top spender on exploration, is likely to continue to dominate in the hunt for new deposits, while Canada and Ecuador are currently among hot targets for more investment by miners, according to Schodde. The U.S. could be poised for a rise in exploration with President Donald Trump regarded as likely to be more favorable toward resource development, S&P Global Market Intelligence said in a report published in January.
Discoveries of so-called tier one projects, deposits with a net present value of more than $1 billion, have stalled. Only 12 were uncovered in the past decade compared to an average of two to three a year since 1950, according to MinEx. The average cost of finding a significant mineral deposit has tripled in the last 10 years to about $238 million, the consultancy said in a March 6 presentation.
China, the target of more than a quarter of global exploration spending in 2016, is yet to reap major rewards. An estimated $42 billion spent on the nation's hunt for new mines since 2007 has seen only two large discoveries announced and found a total slate of projects worth about $13 billion, according to MinEx. Global exploration budgets peaked in 2012 at $33 billion, the data show.
Global gold demand in Q1 2012 was 1,097.6 tonnes (t), down 5% from the high demand levels seen in Q1 2011 (1,150.7t)
World Gold Council
China, central banks and ETFs underpin demand for gold
17 May, 2012
Global gold demand in Q1 2012 was 1,097.6 tonnes (t), down 5% from the high demand levels seen in Q1 2011 (1,150.7t), according to the World Gold Council’s Gold Demand Trends report. This decrease was largely to be expected given the introduction of import taxes in India and high gold prices. Gold demand value however, showed a 16% increase year on year to an estimated US$59.7 billion. The average price of gold for the quarter was US$1,690.57, 22% higher than the average for Q1 2011. Demand for the quarter was underpinned by increased demand in China, continued central bank purchasing and inflows into exchange-traded funds (ETFs).
The main highlights from the report are as follows:
China’s investment and jewellery demand reached 255.2t up 10% on the previous year’s levels. Investment demand recorded strong growth with a quarterly record of 98.6t, up 13% from Q1 2011, demonstrating investors’ continued need to preserve wealth amidst ongoing concerns over inflation. Jewellery demand in China also increased significantly to 156.6t, accounting for 30% of global jewellery demand making China the largest jewellery market for the third consecutive quarter.
Gold demand in India was affected in Q1 2012 by a number of factors; a new tax on gold jewellery, two increases in the import duty for gold and weakness and volatility in the rupee. Jewellery demand fell 19% to 152.0t from Q1 2011. Investment demand was down 46% from the previous year at 55.6t. In May, the government withdrew the new tax on jewellery and the market is already responding positively.
Central banks across the globe continued the now established trend of net purchasing with demand in Q1 2012 reaching 80.8t. Demand was driven by Eastern Europe with Russia and Kazakhstan adding to their holdings and accounting for a substantial amount of the purchasing. Mexico’s central bank made the largest single purchase of 16.8t. The main driver for this demand by emerging market central banks is the need to diversify their holdings.
First quarter demand for ETFs and similar products totalled 51.4t, equivalent to a value of US$2.8bn; in stark contrast to the first quarter of 2011, when the sector witnessed net outflows.
Marcus Grubb, Managing Director, Investment at the World Gold Council said,
“China and India have seen continuing economic growth and whilst China’s economy is expected to slow, it will nonetheless surpass the rates of growth in the West. As we previously forecast it is likely China will become the largest source of demand for gold in 2012.
This growth story also extends to other emerging market economies and is reinforced by central banks’ continued buying of gold, as a diversifier and a preserver of national wealth. The current picture of the gold market is diverse and not withstanding a flight into US dollars and treasuries near term, we believe the fundamental reasons for investing in gold today remain very strong and compelling.”
Gold demand and supply statistics for Q1 2012:
First quarter gold demand of 1,097.6t was down 5% in comparison to Q1 2011 though in line with the average of the preceding eight quarters.
The value measure of gold demand was 16% higher year-on-year at US$59.7bn.
Demand in the jewellery sector of 519.8t was down 6% year-on-year, which when considered against a rise in prices of 22% shows resilience in jewellery demand. Increasing prices are leading to a re-premiumisation of gold, as it becomes even more exclusive. In US$ terms, the value of jewellery demand grew by 14% to a record US$28.3 billion.
The average gold price of US$1,690.57 was 22% higher than the average of Q1 2011. As a result, in value terms, virtually all sectors of gold demand posted year-on-year increases, with the exception of physical bar demand, which was broadly flat, and the official sector, where purchasing activity was below Q1 2011’s exceptional levels.
First quarter gold investment demand (including gold bars, coins, ETFs and similar products) grew by 13% year-on-year to 389.3t. In US$ terms, this equated to a demand value of US$21.2bn, 38% higher year-on-year. Increases in demand for ETFs and medals/imitation coins meant that demand reached 389.3t, 45.8t above Q1 2011 despite declines in demand for physical bars and coins.
At 107.7t, demand for gold used in the technology and industrial sectors was down by 7% compared with year-earlier levels.
The Q1 2012 Gold Demand Trends report, which includes comprehensive data provided by Thomson Reuters GFMS, can be viewed here.
Accumulates stock at insanely low prices, raises money, and then uses gray-area promotional strategies. Sells stock as soon as price is high enough to make a profit.
Exploration Spending forecast to rise more than 75% through 2025 to $18 Billion: MinEx
