Chile's Codelco copper output dips but company posts profit

Date Nov 24 2017 16:34:31 Source:Reuters

     SANTIAGO, Nov 23 (Reuters) - Chilean state copper company Codelco  COBRE.UL  said on Thursday it produced slightly less copper from January to September 2017 than it did in the same period a year ago but rebounded from a year-earlier loss as prices for the metal improved.

    Codelco Chief Executive Nelson Pizarro said the company produced 1.24 million tonnes of copper in the January-to-September period, a 3 percent decline from the same

    He added the company posted more than $1.6 billion in pretax profit for the first nine months of 2017 versus an $18 million pretax loss in the year-earlier period.

    Direct cash costs through September rose to $1.32 per pound of copper from $1.27 in 2016 as declining ore grades - a problem in Chile for years - continued to take their toll.

    Codelco, which transfers all its profits to the state and relies on capitalization and some debt issuance to fund its operations, is emerging from a prolonged rough patch after a collapse in copper prices in 2016 ate into earnings and scuttled near-term investment plans.

    The price of copper  CMCU3  has risen dramatically in recent months on strong Chinese demand and supply disruptions, among other issues. Codelco, like other copper miners, is reinstating projects that were earlier put on ice. {nL1N1KX15S}

    At a news conference announcing the results, Pizarro said  the state miner was in a strong position for 2018 following the refinancing of billions of dollars in debt earlier this year.

    "Today, we are comfortable as we look forward to the coming year, knowing that it will not be necessary to tap debt markets," Pizarro said. 

    Codelco, which ships about two-thirds of its copper to Asia, was the world's top copper producer based on its annual output to June 2017, according to rating agency Moody's.

    The company says it plans to invest $4 billion annually to revamp its aging mines, expand abroad and keep output flowing.


Edited by SHMET

PRECIOUS-Gold edges higher as Fed inflation concerns weigh on dollar

Date Nov 24 2017 16:33:30 Source:Reuters

    Nov 24 (Reuters) - Gold prices inched up on Friday as the dollar remained under pressure after minutes of the U.S. Federal Reserve's meeting revealed that some policymakers were concerned

about lower inflation.     

    Spot gold  XAU=  was up 0.1 percent at $1,291.50 per ounce, as of 0419 GMT. Bullion was down about 0.2 percent for the week.

    U.S. gold futures  GCcv1  for December delivery dipped 0.1 percent to $1,291.10.

    "Investor appetite (for gold) is low even after slightly more dovish-than-expected Fed minutes. There just has not been enough to entice investors back into the market in great amounts," ANZ analyst Daniel Hynes said.

    "Investors are still a bit cautious even though the December rate hike is well expected. They aren't willing to put any aggressive decisions in place before that hike comes through," he added.

    Many Fed policymakers expect interest rates to be raised in the "near term," according to the minutes of the U.S. central bank's last policy meeting released on Wednesday.  

    However, some members expressed concern over the inflation outlook and emphasized they would be looking at upcoming economic data before deciding the timing of future rate rises.

    Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

    Spot gold has aborted a bearish target at $1,283 per ounce as it seems to have found a support at $1,288 and is biased to break above a resistance at $1,296, according to Reuters

technical analyst Wang Tao.

    "Gold is moving in a very tight range with no clear driver for gold - either up or down," Argonaut Securities analyst Helen Lau said. 

    "So far we don't see any driver in the short-term and it is likely to stay range-bound for some time."     

    The dollar index, which tracks the U.S. unit against a basket of six major rival currencies .DXY , was down 0.1 percent.  USD/ 

    Among other precious metals, silver XAG= rose 0.5 percent to $17.14 an ounce, and platinum XPT= gained 0.2 percent to $934.74 an ounce. 

    Palladium  XPD=  dipped 0.1 percent to $1,010.75 an ounce after hitting a two-week high of $1,013.70 in the previous session.

    Silver slipped 1.1 percent for the week, poised for its first weekly decline in three. Platinum lost 1.3 percent, on track for its first weekly falls in four.  Palladium climbed as much as 1.8 percent. 




Edited by SHMET

Vale says Brazil iron royalty hike could hurt high-cost mines

Date Nov 24 2017 16:32:35 Source:Reuters
    RIO DE JANEIRO/BRASILIA, Nov 23 (Reuters) - Brazil's Vale SA VALE5.SA , the world's largest iron ore producer, said on Thursday that a hike in the country's royalty rates for the mineral could compromise its ability to maintain high-cost mines and would hurt its ability to compete.

    Congress passed the higher royalties in votes on Wednesday with the bill now moving to President Michel Temer for signature. Vale said in a statement that it hoped Temer would

veto some of the changes to the proposal made by Congress.

    "Congress has made profound changes to the original text, resulting in a model that affects our competitiveness, especially at a time of depressed prices, as well as compromises

the maintenance and operation of high-cost mines," Vale said in a statement. 

    The higher royalties are one of three planks of Temer's reform proposal for the sector aimed at boosting the economy, even as Vale praised separately the proposed creation of a new mining regulator to speed up approvals.

    Proponents argue that the new regulator, along with a third proposal to streamline the mining code, offset the impact of higher royalties with greater efficiency. Congress has yet to fully approve those other measures.

    Vale said that although it was not the right time to increase costs for the domestic industry, Temer's original proposal for iron ore royalties to rise and fall with market prices was in line with what the company is able to pay.

    However, Congress amended the bill to eliminate that sliding scale and replace it with a flat 3.5 percent rate, up from the 2 percent rate currently.

    A provision does allow for lesser profitable mines to apply for a rate as low as 2 percent, with the criteria including scale and ore quality, in a move seen favoring smaller miners over companies like Vale.

    The miner also said that some parts of the proposal were unconstitutional, adding mining companies could question them in the country's courts.

    Vale's common stock  VALE3.SA  was up 1.2 percent to 35.15 reais in Sao Paulo, amid thin trading on Thursday due to the Thanksgiving holiday in the United States.


Edited by SHMET

Workers at Chile's BHP copper mine strike to protest layoffs

Date Nov 24 2017 16:31:28 Source:Reuters

    SANTIAGO, Nov 23 (Reuters) - Unionized workers at Chile's Escondida copper mine, the world's largest, on Thursday started a 24-hour strike to protest recent layoffs, according to a union statement.

    BHP  BHP.AX , which operates the mine, had said Wednesday that it would lay off 120 workers, or approximately 3 percent of the mine's workforce amid adjustments to its workflow.

    The union said the workers had been laid off without a "legitimate reason." BHP had no immediate comment.

    "The strike has been massively backed by our members, resulting in total work stoppage," the union said in a statement.

    The union added that it would go on strike again the following week should its demand not be met, calling the layoffs a "reprisal" for a stoppage earlier in the year, and an "intimidation" tactic employed by the company ahead of pending negotiations. 

    In February, workers at the mine walked off the job for a month and a half, putting a dent in Chile's economy and sending shockwaves through the market. 

    The union extended the strike by invoking a legal provision that allows it to extend its old contract by 18 months, pushing forward a new round of talks to 2018.

    Chile is the world's biggest copper exporter.


Edited by SHMET

INTERVIEW-S.Korea says could boost metal stockpiles amid drive to electric cars

Date Nov 24 2017 16:28:58 Source:Reuters

    SEOUL, Nov 24 (Reuters) - The South Korean agency that manages state stockpiles of commodities says it could ramp up its inventories of non-ferrous metals next year amid growing demand for such materials in churning out products like electric vehicles.

    The Public Procurement Service (PPS) has stockpiled raw materials for around 50 years, using them to help local companies in times of shortage or when prices spiral upwards.

    "We can't confirm our plan next year, but think (non-ferrous metal stockpiles) will be higher than this year," Park Chun-sup, the newly-appointed administrator of the PPS, told Reuters in an interview on Thursday.

    The agency typically keeps total non-ferrous and rare metal stockpiles at around 250,000 tonnes, with aluminium accounting for over half of that. 

    Park added that companies involved in producing electric vehicles or other new technologies were helping to drive up appetite for metals.

    Benchmark prices for nickel CMNI3, which is used in electric car batteries, earlier this month touched their highest in over two years.

    Park noted that the agency was currently stockpiling non-ferrous metals equivalent to nearly 58 days of national consumption, above the 56 days it is required to hold.

    He said that the PPS would likely buy more zinc in 2018 as stockpiles of the base metals are lower-than-usual this year, without giving details. 

    The PPS has cancelled several zinc tenders so far in 2017, mainly due to a lack of bidders.  MET/TEND 

    But Park said the agency would not rush into any decisions on buying for next year.

    "The stockpiling policy should take a long-term approach - it's easy to fail with a short-term strategy," he said.

South Korea, Asia's fourth-largest economy, has imported about 1.7 million tonnes of six non-ferrous metals each year over the past three years, according to a PPS estimate based on data from the Korea Nonferrous Metal Association and customs office. 


Edited by SHMET