Archive for Mining companies

Coal Industry Seeks Unusual Partner in the UN Green Climate Fund for poorer nations’ energy needs

If you cannot beat them, try to join them… …in order to help the poor nations achieve desperately needed energy supply.

Yes, from environmentally harmful coal.

The coal industry, viewed as a key contributor to global warming, is seeking a once-improbable collaborator They are trying to work with a fund set up under United Nations climate negotiations.

With more than 2,000 new coal power stations planned or being built in Asia to Africa, the UN Green Climate Fund should help finance making the plants more efficient, according to Mick Buffier, the chairman of the World Coal Association.

New coal technology can cut climate-warming gases by about a third per unit of power, though it adds about 50 percent to the $315 million cost of a 500-megawatt plant in China, the group said.

The Green Climate Fund is meant to channel climate-related aid from industrial nations to developing countries. Bangladesh alone said it needs $16.5 billion in the 20 years through 2030 to ensure its plants will use so-called “super-critical” clean technology.

At the same time, older funding sources like Citigroup Inc. announced on Monday that it will cut back on financing for coal projects.

To read the entire article, go to bloom.bg/1N1eoA3

Mining stocks // Valuation strategic drop is huge

The Big Three iron ore producers havebbeen particularly hard hit.

World number one BHP Billiton (NYSE:BHP) fell again in New York, bringing its losses since Friday to more than 8% before some late buying limited some of the damage. Melbourne-based BHP stock value is down 45% over the last year.

BHP total market worth dipped briefly below $100 billion last Tuesday. BHP peaked at a market cap of $280 billion in 2011.

The cumulative $180 billion loss in that one company’s value is almost impossible to comprehend.

HOW MUCH? In railroad terms that is about the equivalent as a loss in value to the total current value of about two BNSF railroads.

The BHP loss in value is about three to four times the assumed infrastructure investment that all of Africa says that it needs over the next two decades.

In South Africa the recently spun off by BHP named South32 is trading nearly 20% below its May 2015 listing value.

The drop in the shares of Vale continued with the Brazilian company tanking 4% to a decade low on Tuesday. Vale as the world’s top iron ore miner has lost 34% of its market value in 2015.

The globe’s second largest miner based on revenue Rio Tinto (which relies on copper and iron for nearly 80% of its earnings) dropped 4% in heavy volume. The Anglo-Australian giant’s stock is down more than 18% since February.

For more, read http://www.mining.com/china-panic-crushes-mining-stocks/

Miners’ focus shifts from investor returns to maybe survival

July 10 (Reuters) –

Hit hard by the accelerated downturn in metal prices, most global mining companies preparing to report results are likely to announce another round of austerity measures to cut costs and thereby convince investors to remain committed to the mining sector.

Outside of BHP and Rio Tinto, credit ratings and dividends are being pressured by a rout in prices on any commodity from iron ore to platinum. Directors are pressured by major stock holders to force reductions in capital expenditure, operational costs and jobs. Firing top managers is not out of the question.

Collectively, miners have been among the worst performers on London’s FTSE 100 index of blue-chip companies so far this year. The FTSE 350 mining index has fallen by about 15 percent since the start of the year. That is after a bad year in 2014.

“The picture has shifted to survival”… says Nik Stanojevic at British wealth manager Brewin Dolphin. High dividend yields and a boom in metal prices boosted mining shares from the turn of the century (2001 to 2011 with one interruption…

The downturn in prices since 2011 has exposed companies’ failure to allocate capital effectively and to shore up balance sheets, prompting many investors to take flight. Planners for ports and railways to support the old boom year should take note. New strategies need to emerge “or more heads may role” and investors walk away.

http://www.reuters.com/article/2015/07/10/mining-results-preview-idUSL8N0ZM22720150710