A late rally this week has filled investors stockings in the lead up to Christmas but it comes amid a rout in oil prices as well as falling iron ore and gold prices. Our story this week will focus on how gold is fitting into this volatility and how a range of monetary and fical policy moves are impacting on investors decisions.
Also, Newcrest Mining Limited has announced a new plan for its Wafi-Golpu copper gold project in Papua New Guinea while diversified miner BHP Billiton has shipped its one billionth tonne of iron ore to China.
Gold news
There was a late spike in the gold price this week but it came after a gradual decline in prices all week. The commodity responded to the US Federal Reserve’s monetary policy statement and continued lower as a lift in rates was held at arm's length. A tightening of monetary policy would add to an already strengthening US dollar which would further push bullion out of favour as a store of value.
This trend shifted somewhat today (Friday) on news the Swiss central bank would push its interest rate below zero. The move hopes to take the heat off the Swiss Franc which has seen a surge in demand as Russian investors seek safe havens. Switzerland will be effectively charging depositors for the right to park funds with their banks. It’s a move that has seen the price of gold push up $US15 late this week as Swiss investors look for their own safe haven options.
To further complicate investment decision there's speculation that Russia will soon move to selling their own gold stocks as its financial woes deepen. Such a move would depress global gold prices.
Reducing costs
BC Iron Limited
(ASX:BCI) is targeting more cost savings at its Nullagine mine in Western Australia, a joint venture with Fortescue Metals Group Limited
(ASX:FMG). Amid a declining price for iron ore the Pilbara focussed miners will implement a number of measures to deliver sustainable cost savings.
Collaborations
Newcrest Mining Limited
(ASX:NCM) has announced a new plan for its Wafi-Golpu copper gold project in Papua New Guinea. The 50/50 joint venture with South African miner Harmony Gold is now set to be split into two stages with both scheduled to be complete by the end of 2015 and first production slated for 2020.
Rio Tinto Limited (ASX:RIO) and the University of Sydney have announced a five year continuance of their multi-million dollar research partnership. The research partnership’s next phase will provide a step-change improvement in safety, predictability, precision and efficiency of typical surface mining operations through automation.
Strategy
Mount Gibson Iron Limited
(ASX:MGX) will close its Koolan Island iron ore mine in WA after the main pit was flooded when a seawall collapsed. The miner says the choice to repair and re-instate the mine will be considered in light of falling iron ore prices and exchange rates.
BHP Billiton Limited
(ASX:BHP) says the new company it intends to create through its
proposed demerger will be called South32. Australia’s largest miner unveiled plans for the proposed $17 billion ($US15 billion) spin-off in August which is expected to be listed next year. Export growth
Diversified miner BHP Billiton Limited
(ASX:BHP) has shipped its one billionth tonne of iron ore to China. The company says it took almost three decades to ship 100 million tonnes of iron ore to China and then only 12 more years to reach the one billion tonne milestone.
