Commodity prices ended 2011 mostly lower, falling on fears of a global economic slowdown. Resources and mining companies dominating the headlines this past week include Murchison’s plans to divide the proceeds from the sale of its stakes in the Oakajee port and rail project and Jack Hills iron ore projects, Rio Tinto declares a force majeure in Canada, Lynas says it has completed all requirements for a temporary licence in Malaysia, Alcoa is set to cut production and BlueScope Steel’s emissions reach record highs.
We speak exclusively with American investor and author, Jim Rogers about why he’s investing in gold.
Resources newsCommodity prices ended 2011 mostly lower, falling on fears of a global economic slowdown. Base metals fell about 20 per cent. Crude oil and gold were the only raw materials registering significant gains. Oil prices rose around nine per cent in New York and 13 per cent in London. Unrest in North Africa and the Middle East caused price gains earlier in the year. Gold set a record price in September above $1900 an ounce, the precious metal considered to be a safe haven.
Questions raised over Murchison cashQuestions have been raised over how Murchison Metals Limited
(ASX:MMX) plans to divide the proceeds from the $325 million sale of its stakes in the Oakajee port and rail project and Jack Hills iron ore projects. Hedge funds are believed to be calling for a payout to shareholders, a request that is understood to be opposed by the company’s largest investors who instead want the money to go into new projects. Murchison agreed to the sale at the end of last year and the deal will be put to a shareholder vote on February 13, 2012. KPMG says the deal is in the best interests of Murchison shareholders in the absence of a superior offer.
Rio force majeureRio Tinto Limited
(ASX:RIO) has declared a force majeure on shipments from two smelters in Canada. Rio Tinto Alcan had slashed production at its Alma smelter following the lockout of 755 workers on new year’s day after the breakdown of contract discussions. Production at the Shawinigan plant, also in Quebec was stopped after two of four potlines went offline due to a circuit-breaker failure.
Lynas completes temporary licence requirementsLynas Corporation Limited
(ASX:LYC) says it has completed all requirements for the application to Malaysian regulatory authorities for a temporary licence for its Advanced Materials Plant in Malaysia. A decision on the application, which also includes a detailed waste management plan and safety case, is expected from the Malaysian Atomic Energy Licensing Board at the end of this month. Lynas Executive Director, Nicholas Curtis, told the Finance News Network at the end of last year he is confident the rare earths developer will ramp up production at the rare earths refinery in the first half of this year.
Alumina Alcoa production cutsUS company Alcoa will cut production by an undisclosed amount at the Alcoa World Alumina & Chemicals refining joint venture part owned by Alumina Limited
(ASX:AWC). Speaking with The Australian Financial Review, Alumina chief executive John Bevan, had said that production cuts were likely if low prices continued. In a statement, Alcoa announced it will close 12 per cent of its global smelting capacity to lower the company’s position on the global aluminium cost curve and improve competitiveness.
BlueScope emissions reach record highs BlueScope Steel Limited
(ASX:BSL) has released its community, safety and environment report, revealing emissions for the financial year rose to 15.9 million tonnes, reaching record highs. The steel maker says emissions will fall following the closure of furnaces at Port Kembla and Western Port last year. The Australian Financial Review reports that Greens leader Bob Brown has questioned why the company has been allowed to use its payment of $100 million from the federal government under the Steel Transformation Plan to pay down debt rather than investing in the reduction of emissions.
CommoditiesFinance News Network spoke with American investor and author, Jim Rogers about why he chooses to invest in gold.
“Gold is up 11 years in a row which is very unusual for any asset, throughout history that’s very rare. So gold has been correcting for three or four months, it’s going to continue to correct in my view ... It would not surprise me at all to see gold at $US1,200 or $US1,300 an ounce, sometime in the next year or so,” said Mr Rogers.
Mr Rogers added, “Gold will certainly go over $US2,000 sometime in the next few years, there’s no question about that - maybe go much, much, much higher if they continue to print money in the developed world the way they have been. Just in the meantime, I would not be surprised at a correction as I say, it is correcting.”
To watch the full interview with Jim Rogers click here. http://www.finnewsnetwork.com.au/archives/finance_news_network19793.html
Melissa Beaumont Lee
