Seeking Alpha

Sufiy's  Instablog

Sufiy
Send Message
Sufiy is a Seeking Alpha contributor.
My blog:
Sufiy
View Sufiy's Instablogs on:
  • Las Bambas Purchase Shows China Is Still In The Hunt For Copper MUX TNR.v LCC.v CU

    We have narrowed it down from the Wall Street headline: the best Copper projects are going to those who can think about the economic development with the long term view. We have been discussing Las Bambas Sale for quite a while here and other our stories could be coming to fruition now as well. Security of supply is the major issue during the next stage of the Rising Power and Chinese companies are scooping the Globe for the best projects available.

     

    Copper M&A: Glencore Xstrata Close to Sale of Its Las Bambas Peruvian Copper Project MUX TNR.v LCC.v

    According to the report China is closing the next mega deal in the resource sector in order to secure the supply of strategic commodities. This time it is copper. Another Chinese company - China National Gold is reported to be in talks with Ivanhoe on DRC Copper mine. We guess that the end of the world will be postponed again and China is using any opportunity to buy the real assets at the cheapest price possible. China is executing the state-level plan to diversify its reserves out of US Dollar and is buying assets in Gold, Copper and Lithium. We have mentioned before the rumours about Barrick Gold being in talks over its huge Pascua Lama with CITIC from China and are monitoring the sector for the conformation.

     

    Rumour Mill: "CITIC Buying Into Pascua Lama" - Can Argentina Mining Really Make Its Come Back? TNR.v MUX ABX LCC.v

    "Is this rumour too good to be true for the proud people of Argentina? Can Argentina ever make its come back in mining? On the one hand we have still the very strong perception of the high political risk and on another hand we have reports from the ground about the changing environment in the country:

    "Situation in Argentina is changing for the better with recent developments on Repsol compensation. Goldcorp was talking about "Argentina issues easing" and Pan American Silver CEO has recently sated:
    "Meanwhile, when asked by an analyst to comment on the future of the Navidad project, PanAm CEO Geoff Burns said he sees signs of noted improvement "in our operating environment and in the attractiveness of making investments" in Argentina.

    "There was a new chief of cabinet installed…now a couple of months ago," he observed. "And he certainly seems to be driving a more business-friendly environment, or at least, pushing for a more business-friendly environment."

    "I was down there [in Argentina] just a couple of weeks ago, and I would say I am more optimistic than I have been in the last couple of years about the future of Argentina and the future of mining investment in Argentina," Burns advised."

    Rob has mentioned as well that Argentina is changing for the better now: "Profits are coming out of the country now and political change will happen within next one and a half years. We have very large Los Azules Copper project in Argentina. Last year large projects went out of favour, we are sitting on it now. Copper prices are above 3 dollars now and we had the new PEA last Fall. It is our source of liquidity in the future."

    The reports provided on the links below are suggesting that this particular move by Barrick Gold could not be so far fetched: company has confirmed that it is working on strategic partnerships on Pascua Lama and that partners from China are of a particular interest for the company. Argentinean government has even organised negotiations with Chile in order to bring Pascua Lama project back to life. We will not rush ahead to the conclusions and will wait for the official confirmations about these talks, but the trend is quite apparent for the industry insiders and we had discussed it before.

    After the bidding war for Las Bambas Copper in Peru there are not so many world class copper assets left. M&A activity in Copper sector is heating up with ongoing deals on Glencore's Las Bambas, Hudbay's acquisition and OZ Minerals talks with potential partners. Now the projects like Los Azules copper will get more industry attention. We are following McEwen Mining and TNR Gold involved in this project, please read carefully all our disclaimers and do your own DD, as usual.

     

    "TNR Gold is still the sleeping beauty: company holds shares in McEwen Mining after the settlement on Los Azules and Back-In right into Los Azules Copper project in Argentina. Among other assets TNR Gold holds 100% of Shotgun Gold project in Alaska with first resources announced last year and strategic stake in International Lithium."

    TNR Gold Insiders report: CEO And CFO Buying Shares.

    Among other beneficiaries of improved investment climate in Argentina we should name Lumina Copper with its Taca Taca copper deposit and International Lithium developing Mariana Lithium brine project with its strategic partner Ganfeng Lithium.
    We will closely monitor the situation with these developments around Pascua Lama and you can find additional information for your research on the links below.
    More."

    Wall Street Journal:

     

    Las Bambas Purchase Shows China Is Still in the Hunt for Commodities

    By

    CHUIN-WEI YAP

    China accounts for 40% of the world's copper consumption, thanks to continuing investment in urban electricity grids. Associated Press

    BEIJING-China's $5.85 billion purchase of Peru's Las Bambas copper mine signals that the world's largest buyer of industrial metals remains squarely in the market for big strategic plays on global commodity assets despite a string of costly stumbles.

    Unlike some of China's delay-ridden ventures, particularly in overseas iron ore, the Las Bambas project is widely viewed as a high-quality asset, underpinned by a partially developed infrastructure and forecasts of resilient copper demand from the Asian giant itself, analysts say.

    Glencore Xstrata GLNCY +0.57% PLC on Sunday said it had agreed to sell its entire interest in Las Bambas to a consortium led by MMG Ltd. 1208.HK +2.04% , a unit of state-controlled China Minmetals Corp.

    China Minmetals said Monday the long-flagged deal with Glencore would catapult the Chinese metal trading giant past Jiangxi Copper Co. 600362.SH -0.78% to become China's largest copper miner and among the world's top 10 copper producers. It said the deal marks China's largest acquisition of an overseas mining project.

    Its Las Bambas purchase is coming at a time when slumping global copper prices complicate the market's outlook. A prolonged slump could leave China with another overpaid asset. However, most analysts say the quality of Las Bambas's copper ore and the copper market's longer-term prognosis outweigh the risk. "The agreed price is in line with market expectations," Barclays Research analyst Ephrem Ravi said.

    "This is not a short-term consideration for China. It's hard to find a mine of such good quality and it's a rare opportunity," said North Square Blue Oak metal analyst Frank Tang.

    China hasn't fared well in some big mining deals. A state-led shopping spree has plowed $226 billion into overseas purchases of global resources since 1995, according to Dealogic. But in several high-profile ventures, Chinese state companies failed to foresee cost overruns and anticipate project complications.

    In three cases in 2012, Chinese steel-related projects in Australia and Brazil worth a combined $10 billion had to be shelved because of runaway costs. And another flagship iron-ore development in western Australia-Citic Pacific's Sino Iron project-went more than three times over its original budget and took seven years before exporting its first shipment of ore in December. The project missed out on the steelmaking ingredient's multiyear boom, coming just in time to catch a prolonged price slump.

    That has left China with a spotty record for striking a balance between securing supplies and making smart investments. In 2012, a senior economic planning official noted that massive Chinese spending hadn't resulted in major new iron-ore supplies for the country. Early this year, the government told its steel companies to keep buying overseas iron-ore assets, urging smarter-but no less needed-investments in the sector.

    China is spending heavily on other natural resources despite a slowdown in commodities markets. More than half of the country's $69.07 billion in overseas acquisitions last year went to oil and gas deals, according to Dealogic. And so far this year, state-controlled Cofco Corp. has struck two deals to bolster its position in global grain trading.

    The Las Bambas copper purchase may have been easier to pull off than in other sectors. China already has a robust relationship with Peru, China's second-largest supplier of copper concentrate after Chile. The search for suitable assets was also served when China's commerce ministry was able to effectively force Glencore to make a sale as a precondition for the Switzerland-based trading company's merger with Xstrata, sparing China from having to sift through greenfield propositions of dubious quality.

    Chinese strategic planners may have felt less pressure to rush into a deal because the country already gets its copper supplies from a broader number of countries than it does with iron ore, which is dependent on trade with Australia and Brazil. China's sources for copper concentrate include Canada, Mexico, Chile, Brazil, the U.S., Australia, Turkey, Philippines and Indonesia.

    The Chinese government has often turned to Minmetals when it needed a state company to lead strategic ventures to buy metals overseas. In 2008, the Beijing-based trader was among the first to develop foreign metal resources-in that instance, an iron-ore mine in the West African country of Mauritania-at a time when Beijing had just begun canvassing its companies to head offshore. Minmetals also paid $1.4 billion for Australian zinc producer OZ Minerals in 2009.

    A broad economic slowdown in China, which consumes 40% of the world's copper, has sent global copper prices tumbling 10% since February last year. But China's demand for copper, primarily driven by its continuing investment in urban electricity grids, remains robust over the longer term, analysts say.

    "Strong year-over-year growth of 22% for Chinese grid spending in the first two months of 2014 has reinforced the momentum in demand, while supply faces renewed disruption risks in key producing countries such as Indonesia," Barclays said in a note.

    State analysts at metals consulting firm Beijing Antaike Information Development Co. project a 7% uptick in copper demand this year in China, with prices likely to turn around in the second half of this year. Some private-sector analysts are more conservative, with North Square Blue Oak forecasting an overall 3% rise in Chinese copper consumption, about half of last year's growth.

    Las Bambas is expected to produce 450,000 metric tons of high-quality copper annually when it is commissioned next year, Minmetals said. The project was already about 56% complete at the end of last year, Glencore said.

    Besides Minmetals' MMG unit, the Chinese consortium for the Las Bambas deal included state-backed Guoxin International Investment Corp. and Citic Metal Co. Ltd. MMG has a 62.5% stake in the consortium, while Guoxin has 22.5% and Citic Metal has 15%, Minmetals said.

    Write to Chuin-Wei Yap at chuin-wei.yap@wsj.com"

    Please Note our Legal Disclaimer on the Blog, including, but Not limited to:

    There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

    We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

    Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advice on this blog and there is no solicitation to buy or sell any particular company.

    Apr 20 3:21 PM | Link | Comment!
  • Michael Lewis Hits Back "Flash Boys": “This Time I Punched Wall Street In The Balls”

    Michael Lewis has provided the brilliant account of the real life on the Wall Street in his "Flash Boys". The more presstidutes are bashing it, the more we like it. Everybody was "front run" on all accounts for years. All "conspiracy theories" are coming to the spotlight one by one now.

     

    Jon Stewart And Matt Taibbi: Banksters, Presstitutes And Why Nobody Should Shed a Tear for JP Morgan Chase


    "Matt Taibbi continues his brilliant work as one of the last real investigative journalists left at his best. Jon Stewart is on par translating the situation for those who has difficulties with concentration and reading.

    We will ask our rhetorical question again: after LIBOR fraud, FOREX manipulations, Mortgage scam and Pension looting - Is The Gold Manipulation To Be Admitted Next?"

    Greg Hunter: Dr Jim Willie - Dollar Mortally Wounded, Treasury Bond Toxic Paper And Gold


    "Filter this interview with your own understanding of what is too far stretched and what has already happen. Jim Willie provides his Big Picture View, which definitely stimulates imagination. A lot of former conspiracy theories have happen to be true:Private FED, Rigged LIBOR, Manipulated FOREX, HFT, Manipulations in Gold and Silver. Some others will be coming into the spotlight from the heat of the Financial Wars played around Ukraine now."

    Salon:

    Michael Lewis hits back: "There's been a lot of people mouthing off without actually thinking about the book"THE BESTSELLING AUTHOR EXPLAINS THE UPROAR CAUSED BY HIS NEW BOOK: "THIS TIME I PUNCHED WALL STREET IN THE BALLS"

    ANDREW LEONARD

    (click to enlarge)Michael Lewis (Credit: Reuters/Lucas Jackson)

    Michael Lewis sits down for lunch at the Claremont Hotel in Oakland, Calif., looking like a man who is well-satisfied with the state of his current affairs. It's easy to understand why. Lewis has an impressive publishing history, dating back to "Liar's Poker" in 1989 and including "Moneyball," "The Blind Side" and "The Big Short." But right off the bat he tells me that that in its very first week, his new book, "Flash Boys," has already sold more than 130,000 copies. That's more than twice the sales, he says, of his previous high mark, "The Big Short."

    It's the "biggest week in the history of my publishing firm," he boasts.

    Oh, and during that same week the FBI, the New York state attorney general's office and the U.S. Department of Justice all coincidentally announced investigations into the potential improprieties and fraud associated with the topic of Lewis' book, "high-frequency trading." When Michael Lewis appears on "60 Minutes" and declares that the U.S. stock market "is rigged," people pay attention.

    Sure, there's been a lot of "noise" around "Flash Boys," a lot of chatter out there on the Internet both from name-brand journalists and people you've never heard of, picking nits and ankle-biting. Lewis has been accused of acting as a shill for big investors, of sensationalism, of getting his facts wrong.

    "There's been a lot of people mouthing off without actually thinking about the book," says Lewis. Yes, he may have gotten a few facts wrong: "It's impossible to write 100,000 words, and not make mistakes." Anything substantive will be corrected for the next edition, but none of it, he says - and for a moment his bonhomie becomes icy - "will have any effect on the truth of the overall story, at all."

    You get the sense that as far as Lewis is concerned, the blowback is merely a positive indicator that he has successfully hit a nerve. Lewis went through a similar experience, he says, after the publication of "Moneyball," a book that seriously upset the sports establishment with its embrace of analytics over old-school scouting.

    "Billy Beane" - the general manager of the Oakland A's and the protagonist of "Moneyball" - "has been laughing on the phone with me about it," says Lewis. "The journalists are all lining up against 'Flash Boys' the way you'd expect given their position in the industry. People in the industry are lining up the way you expect. The level of hostility is very similar with what happened with 'Moneyball,' but the noise is 10 times greater, because it's about Wall Street instead of professional sports."

    Michael Lewis has gone after Wall Street before, of course. "Liar's Poker" was a delirious romp through the farcical world of Wall Street's bond traders. "The Big Short" delivered an exquisite postmortem on the subprime mortgage fiasco. But this is different, he says.

    "Previously I feel like I punched Wall Street in places where the nerves were insensitive. This time I punched Wall Street in the balls," he says, grinning. "And then the beast reared up, and the beast went-" and then Lewis makes a sound that sounds vaguely like the squeal of a Tyrannosaurus Rex after having been impaled by a redwood tree.

    The bottom line, says Lewis, is that the story he tells in "Flash Boys" threatens to materially impact how Wall Street does business, by constraining the activities of high-frequency traders.

    As he explains it, high-frequency traders are taking advantage of superior technology - faster telecommunications infrastructure, smarter computer trading algorithms, physical proximity to the computers that operate stock market exchanges - to insert themselves between buyers and sellers on the market and skim off a piece of the action for themselves. The HFT guys serve no necessary economic function, argues Lewis. They're parasites who are profiting from a self-administered tax on stock market transactions.

    In any given trade, the slice pocketed by HFT might be a penny or less, but taken together, it adds up to billions and billions of dollars. No one knows exactly how much - and, in fact, some defenders of HFT say overall revenues are in actual decline, an argument that provokes some major eye rolling from Lewis. If the industry is in decline, he asks, then why are HFT firms continuing to staff up, planning IPOs, and poaching talent from each other at astronomical rates. One trader, says Lewis, recently left a company because he felt his $80 million salary wasn't enough compensation. And his colleagues agreed he was probably right!

    "What is true," says Lewis, "is that the sums of money involved - if you spread it across the market - are trivial, it's a penny a trade. But it's offensive as hell that rich people are stealing from middle-class people - even if it's just a penny. There's also the issue of what HFT does to the stability of the marketplace as a whole. And then there's the question of the whole screwed-up model it creates for success in life, when the guys who get rich do so by skimming on the market, so all of a sudden the young people at the best schools want to go skimming in the market - like that's a noble career path."

    But what makes "Flash Boys" interesting - and threatening - is that it isn't just a tract explaining what high-frequency trading is and decrying it as evil. That kind of book would be boring, says Lewis. So boring that he wouldn't even have been able to muster enough interest to write a "magazine piece" about it.

    (Lewis says "magazine piece" in a way that makes you feel like he considers cover stories in the Sunday New York Time Magazine the same way the rest of us feel about blog posts.)

    Lewis got excited about HFT because he found a story to tell that he thinks brings a measure of hope to the more-or-less permanent morass of greed and double dealing that is Wall Street. "Flash Boys" is the tale of a group of Wall Street veterans, led by Canadian "boy scout" Brad Katsuyama, who become personally outraged at how HFT operators were screwing with the system. The government can't or won't deal with the problem, so they decide to solve it themselves, by putting together their own stock market exchange, IEX. IEX is explicitly designed to defeat HFT strategies and give investors a fair shake. Only Wall Street, it seems, can cure Wall Street's ills.

    "Another reason why 'Flash Boys' is like 'Moneyball,'" says Lewis, "is that it is a story about a disruptive entrepreneur. In both cases, the entrepreneur is holding up a mirror to his industry and it is not a flattering picture. I think Katsuyama is going to change the industry. He is going to have a big effect. He is going to suck billions of dollars out of Wall Street. I think that's part of what is going on and why it is so loud. A lot of money is involved. Stocks are falling. Investigations are being launched."

    Critics have accused Lewis of basically writing a big advertisement for Katsuyama and IEX. He's also been charged with hypocrisy, because IEX is backed by some of the biggest investors in the United States. As far as the first criticism, Lewis could not care less. He actively wants IEX to succeed, because he personally believes in the integrity of Katsuyama's team. If his ability to tell a story that gets media and law enforcement attention helps IEX get traction, well, hell, that's exactly the point.

    Want to know why there is so much noise, and the HFT guys are so hopping mad? It's because Lewis is a player in this game, not an ankle-biter. His books move markets.

    I asked him if IEX, which is not even a year old, and has to this point been effectively blacklisted by some of Wall Street's biggest banks, had seen an uptick in business over the last nine days.

    "I can tell you what I've heard. I think they've gotten 1,000 résumés from people who want to work with them. They've gotten inundated with whistle-blowers from exchanges and banks who they've directed to the FBI or the attorney general's office, dozens of people from inside of the HFT industry. In terms of trading volume, I think before the book came out they were averaging around 35-, 40 million shares a day, and yesterday they did almost 70."

    As for the accusation that he's serving the interests of the big investors, which is often accompanied by the argument that the "little guy" isn't getting hurt by HFT - he or she can go make a trade at any time and won't ever notice a negative impact - Lewis furrows his brow.

    "I don't understand that argument. The little guy is the big guy. The little guy is not the day trader on eTrade; it's all the money packed up in pension funds and college endowment funds and mutual funds. The savings of the country is in big institutions."

    And it's those big institutions that are paying an unnecessary tax to high-frequency traders who have figured out how to game the system. The money they are extracting belongs to all of us.

    As I read "Flash Boys" I found myself thinking that it was Lewis' angriest book. There was something really outrageous about the fact that even as the rest of the country was picking itself up from the wreckage of the mortgage crisis, a massive economic disruption inflicted by Wall Street greed on the rest of the world, Wall Street has already moved on to a new scam, without taking a breath. I sensed a seething irritation behind every line.

    But in person, Lewis is brimming with glee, and not just because of his sales number. The positive reaction he has gotten, he says, is "10 times, 20 times, 100 times" the negative. "The hostility is overwhelmed by the love notes." The fact that there were "these guys at IEX willing to take personal risks and sacrifice their short-term interests is incredibly hopeful.

    "I feel like they are the little rock at the top of the hill that creates the avalanche. I can see how what they are doing can ripple right through the system. And I can see the forces that might line up behind them and force real change.

    "So I think it's a happy book."

    Apr 20 3:15 PM | Link | Comment!
  • Powered By Lithium: BMW I3 - First Drive, Test Drive And Review ILC.v TNR.v LIT

    Watch the Video:

     

    Powered By Lithium: BMW i3 - First Drive, Test Drive and Review ILC.v TNR.v LIT

    Will BMW i3 be able to unlock the huge market for Electric Urban Mobility? Pricing point will be the most crucial consideration here. BMW has a few short years before Elon Musk will be bringing the competition heat with his Tesla Model E - 200 miles range and 35k dollars price-tag will be very tough to beat. China and India are destined for Electric Urban Mobility, but price and utility will be even more crucial in those markets.

     

    Powered By Lithium: China Considers More Electric-Car Incentives TSLA ILC.v TNR.v KNDI BYDDY

    "We can see more concrete steps implemented in China towards cleaner economy and electrification of transportation. New Energy Cars is one of the strategic industries and Chinese government provides full support to the domestic companies in order to secure strategic commodities like Lithium and technology for this transformation."

     

    Strategic Partner, Ganfeng Lithium, Receives Approval to Purchase Interest in International Lithium's Mariana Brine Project, Argentina ILC.v TNR.v

     

    International Lithium: Ganfeng Lithium Is Halted Pending Major Acquisition ILC.v TNR.v LIT TSLA KNDI


    "We are following International Lithium here with its strategic partner from China Ganfeng Lithium. Elon Musk with his Tesla Gigafactory has brought a lot of attention to the Lithium strategic commodity story and Asian companies are coming into the spotlight as well now. LG Chem is talking about building major Lithium battery plant in China and Lithium Materials Industry is getting the green light from the Chinese government in its efforts to curb the horrible pollution.

    "Kirill Klip, president of International Lithium (TSXV:ILC), views the announcement of Tesla's Gigafactory as a "groundbreaking development."

    Tesla "brought attention to what Elon Musk has accomplished," Klip told Lithium Investing News. "He showed to everyone that electric cars are not toys anymore - they are for real."

    International Lithium's Strategic Partner, Ganfeng Lithium, Takes Large Stake in Mariana and a $10 million Option on the Blackstairs Projects ILC.v TNR.v LIT

    "Mar 19, 2014 (ACCESSWIRE via COMTEX) -- Vancouver, B.C. / ACCESSWIRE / March - 2014 / International Lithium Corp. (the "Company" or "ILC") announces several major transactions with strategic partner GFL International Co., Ltd. ("Ganfeng Lithium" or "GFL")."

    Apr 20 3:13 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.