#China Bank Regulator Said to Issue Alert on #Coal Mine #Loans @ Bloomberg

China's banking regulator ordered its regional offices to increase scrutiny of credit risks in the coal-mining industry, said two people with knowledge of the matter, signaling government concern about possible defaults.

To read the entire article, go to http://bloom.bg/19RxIQi

Citi goes bullish on miners for the first time in three years @MarketWatch

analysts seeing better bottom-up fundamentals, notably from big diversified miners. Citi’s top picks are $BHP $RIO $GLEN

Citi goes bullish on miners for the first time in three years - The Tell - MarketWatch

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“We would rather be too early than too late in making this call.”
And with that, analysts at Citi moved their 12-month view on the mining sector to bullish for the first time in three years.

Sure, they’re concerned about the potential for long-term structural demand for commodities in China, and yes they’re aware there could be a seasonal slowdown in the first quarter of this year (as they pointed out in December), but analysts are seeing better bottom-up fundamentals, notably from big diversified miners. Citi’s top picks are BHP Billiton BHP +0.73% UK:BLT +1.16% , Rio Tinto RIO +0.94% UK:RIO +0.89% and Glencore-Xstrata UK:GLEN +3.42% .
“Investor sentiment has hit rock bottom. The mining sector has moved through five stages of grief, namely Denial, Anger, Bargaining, Depression, and now we think we are in Acceptance that the sector has moved into a new norm,” said lead analyst Heath Jansen, in a note out Thursday.
Amid a clutter of metals-price calls, Jansen foresees a flat commodity-price environment ahead and a reduction in volatility. An improvement in U.S. and European growth will help boost commodities, while weakening commodity currencies — the currencies of major exporters like Australia, New Zealand and South Africa — are boosting miners, he said. On top of all this, miners are cutting costs, improving balance sheets and aligning with shareholders’ interests. Because of this, earnings momentum has become positive.
But Citi’s advice to stay underweight on gold and base-metal stocks diverged from the opinions of other big investors. DoubleLine Capital founder Jeffrey Gundlach said earlier this week that not only is gold looking good technically — calling for $1,350 an ounce on gold “sooner rather than later” –  but he likes those miners as well. Most major gold companies lost at least half their value last year on the gold price plunge.
“Sentiment is as black as night on gold, so I’m actually long on some gold miners,” said Gundlach.
His gold call is more bullish than the average investment bank so far this year. Recent forecasts from six big banks (not including Citi) see the metal sinking to $1,209 an ounce this year, an average drop of 14.5% from the 2013 average. The gold-mining sector has a fan in hedge-fund manager John Paulson, who was reportedly telling clients last year that he won’t add more to his hard-hit gold fund, but still likes the miners.
For its part, Citi said its least-favored big-cap miner is Anglo American UK:AAL -0.43% . The investment bank parted company with UBS, whose analysts lifted the stock to buy from neutral, saying valuations are looking attractive after a recent underperformance (by more than 18% over the past three months compared to buy-rated Rio Tinto and BHP Billiton).
Writing for Benzinga on Wednesday, William Briat said now isn’t a bad time to go hunting gold mining stocks, which are nearing lows not seen since the fall of 2008. He advises looking for stocks that “are able to produce at an all-in sustaining cost that is below the current price of gold bullion, which means they remain profitable.”
While Citi’s note is focused on Europe’s mining stocks, Briat outpointed NYSE-listed Primero Mining  PPP +1.54% . “If a company still has strong assets, a solid balance sheet, and is able to create positive cash flow, this type of firm is of interest to me, especially when market sentiment is so negative,” he said.
Marc Faber extolled the virtues of mining stocks at the close of 2013. The author of the Gloom, Boom and Doom report said that given the extremely bearish views out there on gold, silver, platinum and palladium, mining companies are at “relatively good values.” Not a new call here for Faber, he’s been touting miners for a while.
– Barbara Kollmeyer covers markets for MarketWatch. Follow her @bkollmeyer. Follow The Tell @thetell.



Citi goes bullish on miners for the first time in three years - The Tell - MarketWatch

#Chinese Consortium Frontrunner to Buy #Glencore Xstrata's Peruvian #Copper Mine --

Looks like it all worked out just as they wanted...

A group comprising affiliates of state-controlled outfits China Minmetals Corp., Citic Group Corp. and Guoxin Group is the only bidder currently left in an auction that Glencore Xstrata agreed to run to win China's approval for the merger

DJ Chinese Consortium Frontrunner to Buy Glencore Xstrata's Peruvian Copper Mine -- Sources
Wednesday, January 15, 2014 06:39:00 PM (GMT)

 By Gillian Tan, Alex MacDonald and Cynthia Koons 

  A Chinese consortium is the frontrunner to buy Glencore Xstrata PLC's (GLNCY, 0805.HK) Las Bambas copper mine in Peru, according to people familiar with the matter, setting up a takeover that, at $5 billion or more, would be one of the largest foreign acquisitions by a Chinese company.

  A group comprising affiliates of state-controlled outfits China Minmetals Corp., Citic Group Corp. and Guoxin Group is the only bidder currently left in an auction that Glencore Xstrata agreed to run to win China's approval for the merger that gave rise to the natural-resource giant. It's not clear when a deal may be struck, and another competitor could still reappear and win the auction.

  The massive Las Bambas project, which was about 45% complete as of June and is scheduled to start production in the second half of 2015, will be able to produce 450,000 metric tons of copper a year for the first five years and 300,000 during its remaining operating life, Glencore Xstrata has said. It's expected to cost a total of $5.9 billion to develop. A Chinese purchase of Las Bambas would be the latest takeover deal engineered by the world's most populous nation as part of an effort to secure raw materials for its vast and growing industrial machinery. China is the world's largest consumer of copper, which is used in products ranging from cabling for electricity to cars.

  A purchase of Las Bambas could trump in size the $4.7 billion acquisition of U.S. pork processor Smithfield Foods Inc. by Shuanghui International Holdings Ltd. (SIHL.YY), the largest-ever acquisition of a U.S. company by a Chinese company, which closed in September.

  Glencore Xstrata agreed to sell Las Bambas to win approval from China's Ministry of Commerce, known as Mofcom, for Glencore International PLC's acquisition of Xstrata PLC. The takeover, which closed in May, valued Xstrata at $44.6 billion.

  The Chinese consortium has discussed financing options with banks, according to some of the people. While talks between Glencore Xstrata and the group are not exclusive, the list of potential buyers for Las Bambas has dwindled. A consortium comprising Teck Resources Ltd. (TCK, TCK.A.T), Newmont Mining Corp. (NEM), Magris Resources Inc. and Blackstone Group LP (BX) that had examined a Las Bambas purchase is not currently pursuing the deal, some of the people said.

  Separate groups--one led by Chinalco, the copper unit of Aluminum Corp. of China (2600.HK, ACH), and the other including Jiangxi Copper Co. (0358.HK), China's largest copper producer--also considered a purchase of the project, but are no longer in the running, the people said.

  Glencore Xstrata promised to provide Mofcom with a list of potential buyers for Las Bambas by Aug. 31, with a view to entering a binding sale agreement by Sept. 30 and completing the deal by June 30, 2015. Las Bambas's buyer must be approved by Mofcom.