Mark Latham Commodity Equity Intelligence Service

Tuesday 30th June 2015
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    Rousseff slams graft informants, denies illegal donations

    Brazil's President Dilma Rousseff on Monday drew on her own experience as a political prisoner during the country's dictatorship to denounce informants in a corruption scandal that has pummeled her popularity.

    Rousseff also forcefully denied her campaign had received illegal donations originating from the scandal, which involves kickbacks allegedly paid by construction companies to politicians and former executives at state-run oil firm Petrobras.

    Speaking to journalists in New York, Rousseff contrasted her experience in jail in the early 1970s opposing Brazil's dictatorship with that of informants cooperating with prosecutors investigating the Petrobras scandal.

    "I do not respect informants because I know, I was jailed in the dictatorship and they tried to turn me into one," she said following a speech to investors focused on infrastructure projects. As a young Marxist, Rousseff was jailed, hung upside down and tortured with electric shocks.

    Many of the key informants in the Petrobras corruption scandal have turned state's witness after serving lengthy pre-trial jail terms.

    Rousseff spoke after Veja magazine reported on Friday that Ricardo Pessoa, an executive linked to the scandal, had said in plea bargain testimony that part of the money resulting from the overpricing of contracts was donated to the campaigns of several politicians, including for Rousseff's 2014 re-election.

    Pessoa, the head of Brazilian construction firm UTC Engenharia, is under house arrest. He was jailed last year and prosecutors say he may have led the cartel. Veja did not say how it obtained the details of his testimony.
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    China says thousands arrested suspected of environmental crimes

    Chinese police arrested thousands of people suspected of environmental crimes last year, a minister told parliament on Monday, as the world's most populous country vows to get serious on protecting the environment.

    Facing mounting public pressure, leaders in Beijing have declared a war on pollution, vowing to abandon a decades-old growth-at-all-costs economic model that has spoiled much of China's water, skies and soil.

    But forcing growth-obsessed local governments and powerful state-owned enterprises to comply with the new laws and standards has become one of its biggest challenges.

    Beijing has repeatedly promised to strengthen monitoring and law enforcement, and a new environmental law in force since Jan. 1 gives it the clout to impose unlimited fines and jail sentences on repeat offenders.

    Environment Minister Chen Jining told a bi-monthly session of the National People's Congress's standing committee that 3,400 companies and 3,700 construction sites were found to have violated laws last year, while more than 3,100 workshops were forced to shut down following inspections.

    According to a transcript of his address published on the parliament's official website (, he said the number of criminal cases handed over to the police by environmental protection departments in 2014 reached 2,080, twice the total number during the previous decade. More than 8,400 people were arrested.

    He added the central government had allocated 9.8 billion yuan ($1.58 billion) in special funds to control air pollution in 2014, which helped "leverage" additional private investment of 300 billion yuan.

    Chen said China would aim to cut key air pollutants sulphur dioxide and nitrogen oxide by 3 percent and 5 percent respectively this year, and would work to improve vehicle fuel standards nationwide.
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    U.S. Rails Skid Into Bear Market on Triple Whammy Cargo Slump

    U.S. railroads, Wall Street favorites for much of the past decade, are slumping into a bear market amid a three-way squeeze from plunging coal, crude-oil and grain shipments.

    An index of the four largest publicly traded U.S. carriers has dropped 20 percent from its peak in November, paced by Kansas City Southern, as the companies struggle to offset the loss of volumes. They haven’t tumbled this much since 2011.

    Those difficulties are likely to drag on, leading to the first annual industrywide earnings decline since 2009, as low natural gas prices sap coal demand, U.S. oil drilling slows and harvests return to normal after a record crop. That threatens to crimp a rally that made the group one of the top performers in the Standard & Poor’s 500 Index.

    “It’s going to be a tough year,” David Vernon, a Sanford C. Bernstein & Co. analyst, said in a telephone interview after publishing a note last week whose title predicted second-quarter profit reports that would be “Dark and Full of Terrors.”

    Earnings per share for the largest U.S. railroads -- the other three are Union Pacific Corp., CSX Corp. and Norfolk Southern Corp. -- will fall 0.6 percent in 2015, based on analysts’ estimates compiled by Bloomberg. Last year, they gained 19 percent. Analysts predict revenue will drop 2.8 percent this year after jumping 6.7 percent in 2014.
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    South African regulator rejects Eskom tariff hike request

    South Africa's energy regulator rejected on Monday a request from cash-strapped utility Eskom to raise tariffs, and the state-owned power company said it would consult with the government on alternative ways of funding.

    Eskom, which provides virtually all of South Africa's electricity, is scrambling to repair its aging power plants and grid, forcing it to impose almost daily power cuts that are hurting economic growth.

    Jacob Modise, chairman of the National Energy Regulator of South Africa (NERSA), said crucial information was missing in the application for an average 9.58 percent increase in tariffs.

    The utility wants to raise tariffs to pay for diesel to be used to run gas turbines, and to pay for power from independent electricity producers to help make up a shortfall in electricity while some of its coal-fired plants are undergoing maintenance.

    Eskom said it would consult with the government, its only shareholder, about whether to make a new application to raise tariffs or find new funding sources.

    "We are not blackmailing or making threats, we need diesel and we need to get some kind of assurance of where we can get the money," Eskom spokesman Khulu Phasiwe said.

    The energy regulator also said it was considering imposing penalties if plants did not function properly after maintenance was done. At a public hearing into Eskom's tariff application last week, NERSA said documents submitted by the utility showed that 50 percent of plants break down after Eskom conducts maintenance.

    Eskom has already raised its tariffs once this year, in April, and the requested price hike would bring the total increase this year to more than 22 percent.

    South Africa's public enterprises minister, Lynne Brown, has said the utility would have to tap debt markets if it failed to get the tariff increase.

    The power company is facing a funding gap to 2018 of up to 200 billion rand ($16 billion) as it struggles to keep its mostly coal-fired plants running. The government has pledged to inject 23 billion rand of capital into Eskom.
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    Oil and Gas

    Saudi Aramco spending becoming more sensitive to lower oil prices: analyst

    State-owned Saudi Aramco is becoming more sensitive to movements in international oil prices, with sharp effects on spending, analysts at Jadwa Investment said.

    In May, the government's Council for Economic and Development Affairs approved Aramco's restructure, with a clear separation of the company from the Ministry of Petroleum and Mineral Resources to which it was previously closely aligned.

    "We view Saudi Aramco's restructuring as a step towards making it a more commercially-driven organization with increased independence in financial matters," Jadwa said in a research.

    Whereas Aramco had previously taken orders from the petroleum ministry, it will now be overseen by a 10-member Supreme Council for Saudi Aramco, headed by Mohammed bin Salman, the son of king Salman. Some analysts see the move as likely to result in better governance of Aramco, as its management seeks to trim costs and improve operational efficiency.

    But the restructure also means Aramco will become more sensitive to movements in oil prices, with forecast prolonged periods of lower prices affecting spending more sharply, "much like other international oil companies," it said.

    The state-owned oil giant has spent the last five years spending heavily on infrastructure, in particular in downstream, with investments in three new refineries.

    Aramco said in its 2014 annual review, published in May, that it will continue to invest significant sums over the next decade, but with a greater emphasis on upstream as it seeks to maintain a crude oil production capacity of 12 million b/d -- to reinforce its position as the world's "pre-eminent" producer and supplier -- along with developing 5 Bcf/d of new non-associated gas processing capacity for domestic consumption.

    Aramco's 2014 crude exports totalled 2.5 billion barrels (6.85 million b/d).
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    Petrobras Forgoes Growth Plans in 37% Spending Cut to Ease Debt

    Petrobras is giving up a dream of becoming one of the world’s biggest oil producers by cutting spending and output targets under the strain of the industry’s heaviest debt load, development bottlenecks and a slump in crude prices.

    Capital expenditures through 2019 will be $130 billion, down 37 percent, while domestic oil production will average 2.8 million barrels a day in 2020, compared with a prior target of 4.2 million, the Rio de Janeiro-based company said in a statement Monday. The average spending estimate of three analysts surveyed by Bloomberg was $136 billion.

    Petroleo Brasileiro SA, as Brazil’s state-controlled producer is known formally, is focusing on exploration and production, scaling back investment in refineries that have become the subject of Brazil’s biggest corruption scandal. Investors have been waiting for clarity on how the company will fund development of giant fields in the South Atlantic without having to return to equity markets to raise cash. In 2010, it held a $70 billion share sale, the world’s largest, and failed to deliver on promised output growth.

    “No one can celebrate an almost 40% cut in investment and a slash in production, but for the first time in many years we see a business plan that fits the company’s reality and international scenario,’’ Adriano Pires, the head of Rio de Janeiro-based infrastructure consulting firm CBIE, said by telephone. ‘‘It shows this management has a mandate.’’

    ‘‘The plan’s investment portfolio prioritizes oil exploration and production projects in Brazil, mainly in pre-salt,” Petrobras said in the statement. The production targets “were updated, reflecting the postponement of projects of lower maturity and the delays in the delivery of production units.”

    Petrobras, whose total debt stands at $125 billion, joins other oil companies in cutting spending after Brent prices dropped by more than half in the past year.

    The plan is based on the company not losing money from selling imported fuel in Brazil, Petrobras said, after it lost about $40 billion between 2011 and 2014 because of rules requiring it to subsidize gasoline prices.

    The company expects Brent prices of $60 a barrel in 2015 and $70 a barrel from 2016 to 2019, it said in Monday’s filing.

    Petrobras is planning $42.6 billion in divestments and restructuring in 2017-2018 and boosted expected asset sales to $15.1 billion for this year and next.

    Attached Files
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    Sevan Marine appoints law firm to investigate Petrobras corruption claims

    Offshore drilling firm Sevan Marine has engaged the law firm Selmer to conduct an investigation into allegations of its involvement in the Petrobras graft scandal which has rocked the Brazilian oil and gas giant.

    The company said it is responding to a number of articles in the Brazilian press which refer to a former manager and agent of Sevan Marine being named in connection to the scandal. In a statement, Sevan Marine said that it has offered full co-operation and has been in contact with the relevant authorities on this matter.

    Among the well-known corporate names suspected of illegal payments are South Korea’s Samsung Heavy Industries Co Ltd, Swedish builder Skanska AB, Danish oil and shipping group Maersk and British engineer Rolls-Royce Holdings.

    The crux of the scandal involves construction and engineering firms paying hundreds of millions of dollars to win inflated contracts from Petrobras. Substantial swathes of money found their way into the coffers of the governing Workers Party and the pockets of other politicians.
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    Kurdistan ramps up independent oil sales

    Iraq's semi-autonomous Kurdistan region has ramped up independent oil sales since mid-June while cutting allocations to Iraq's state oil firm SOMO in an escalating dispute over export rights and budget payments.

    Kurdistan has sold at least 9 million barrels of oil in 11 tankers from the Turkish port of Ceyhan so far in June, according to shipping data and traders, compared to 5 million it allocated to SOMO in early June after which transfers largely stopped.

    June became the first month of large independent sales since December last year, when Kurdistan agreed a deal with Baghdad to transfer up to 550,000 barrels per day to SOMO in exchange for Baghdad allocating Arbil 17 percent of budget payments.

    The deal has faced troubles ever since with Baghdad accusing Arbil of allocating smaller-than-agreed amount of oil and Arbil saying Baghdad is paying less than a half of what is due. Neither side has yet called the deal dead but the blame game has continued for weeks.

    "Unfortunately the (Kurdistan) region has not complied with it until now," Iraqi Prime Minister Haider al-Abadi said in his weekly address on Sunday.

    That followed a statement from the government of Kurdistan (KRG) earlier in June in which is said it remained committed to oil transfers to SOMO but accused Baghdad of reneging on the deal.

    "If Iraq's federal government does not commit to the federal budget law, the KRG is obliged to consider other solutions to provide for the livelihoods of the Kurdistan region's people and to solve the financial and economic crisis," it said.

    The KRG said its need for money was especially acute given the fight against Islamic State militants and the sheltering of a large number of refugees from Syria and Iraq.

    Kurdistan's independent shipments have created havoc at Ceyhan where tankers - which were previous meant to be loading oil from SOMO - have been queuing for weeks.

    Last week, BP and Cepsa cancelled loadings due to a lack of oil in SOMO's tanks and this week Total, Kogas and Gazprom Neft cancelled their loadings.

    Meanwhile, Kurdish independent exports have returned to the patterns seen in 2014, when oil sailed in tankers of shipping company United mainly to the Israeli port of Ashkelon from where oil was resold back to the Mediterranean market.

    "The buyers are mainly those who don't have ties with SOMO," a trading source involved in the process said.
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    Netanyahu faces political crisis over Israel's natural gas monopoly

    Prime Minister Benjamin Netanyahu on Monday faced his first major coalition crisis since his re-election, with ministers withholding support for government plans for developing Israel's natural gas fields.

    At least three cabinet members cited conflicts of interest - personal or business-related - in seeking to be recused from a parliament vote later in the day meant to pave the way for a gas deal that would circumvent anti-trust regulation.

    Netanyahu, who has a one-seat majority in the 120-member parliament, held emergency meetings to try and resolve the impasse.

    Under the proposed deal, Texas-based Noble Energy and Israel's Delek Group would keep ownership of the massive offshore Leviathan field while stakes in smaller projects are put up for sale, industry officials said.

    The agreement has become the focus of national debate with critics saying Netanyahu was putting big oil profits above what could be a windfall for the state and citizens hoping to lower energy prices.

    Netanyahu says the more pressing issue is to get the gas out of the ground and fast-track the development of Israel's natural resources.

    Development of Leviathan, which could supply billions of dollars worth of gas to Egypt and Jordan, has been held up for a few years by regulatory issues. Israel's anti-trust authority objects to the monopoly arrangement.

    Facing possible defeat in parliament, Netanyahu could declare the vote a ballot of confidence in his government, political analysts said. That could effectively force recalcitrant ministers to back the measure.

    Netanyahu's original plan to push the deal through swiftly last week, was derailed by his economy minister, Aryeh Deri of the ultra-Orthodox Shas party, who declined to sign off on the agreement. He cited monopoly concerns.

    That in turn forced Netanyahu to go to parliament in order to give the government the required authorization to finalise the deal with Noble and Delek, which currently control a number of gas fields off Israel's shore.
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    U.S. light oil exports double in May, mostly to Europe

    The United States exported between 120,000 and 140,000 barrels per day (bpd) of condensate last month, according to  traders and ClipperData, which tracks ships and terminal loadings, up from about 60,000 bpd at the start of the year.

    The condensate is lightly processed through stabilizers due to rules banning crude exports in the United States, now the world's third-largest oil producer.

    The rise comes as more companies look to take advantage of the ability to ship the oil overseas, including to places like the Netherlands, France, South Korea and Brazil.

    "One of the main surprises is that the majority of the exports have been to Europe rather than anywhere else, when we thought the concentration would be to Asian markets," said Abudi Zein, chief operating officer at ClipperData, adding this was probably to do with the size of the cargoes and freight costs.
    Enterprise Products Partners led the pack with 1.8 million barrels of exports per month, or 60,000 bpd. It sold a year's supply to Mitsubishi Corp and Vitol at the start of this year.
    BHP Billiton has been selling a 700,000-barrel cargo every month, though has delayed a plan to double exports to two cargoes a month due to production issues, traders said.

    Meanwhile, in the first condensate shipment to Latin America, some 636,000 barrels reached Petrobras' San Sebastiao dock in May, according to data from ClipperData and trading sources.        
    The oil exported by Enterprise, BHP and BP is of a heavier grade with API gravity at 52-54 degrees, which goes to Europe, traders said. API gravity is an indicator of the crude's density and hence its quality.
    Asian refiners prefer lighter grades of API with a gravity of 61 degrees containing more petrochemical feedstock. This grade is exported by Royal Dutch Shell, Plains All American LP and Trafigura.
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    Alberta Oil & Gas Production Falls in Q1 2015

    Q1 2015 saw a significant fall in oil and gas production across Alberta, with many companies recording large declines in core operating areas compared to the end of 2014.

    Between Q3 2014 and Q1 2015, overall Alberta production - excluding oil sands - has fallen by 8% (56,880 boe/d) and between Q4 2014 and Q1 2015, overall production has fallen by 5% (34,165 boe/d). This is due to a number of factors; the fall in global commodity prices is perhaps the major reason for this decline, but companies have also suffered due to other external pressures such as pipeline difficulties or maintenance periods, for example. CanOils Assets is a powerful new tool that can identify both where production declined to the greatest degree and which companies recorded the biggest net decline.

    In Which Regions has Production Declined the Most?

    Alberta is divided into 7 regions by the Petroleum Services Association of Canada ('PSAC Regions' - see note 1) and the production from each for any given period can be quickly downloaded from the CanOils Webmap. The data shows that, excluding oil sands production, all PSAC regions in Alberta with the exception of the Foothills region have recorded declines in quarterly production since Q3 2014 when commodity prices began to fall.

    Source: CanOils Assets
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    Cheniere moving ahead with condensate export terminal in Texas

    Cheniere Energy Inc is moving ahead with a $550-million export terminal in Texas that will ship processed condensate to international markets, a top executive said on Monday. 

    In addition, the terminal will be able to export any type of domestic oil if the decades-old US crude export ban is ever lifted, said Nelson Lee, director of crude trading and origination at Cheniere. "The reason why we're going ahead with that project is we think that we will have unfettered crude oil exports in US at some point, and there aren't the sort of logistics for the crude to exit the US," Lee said at an energy conference in Houston. 

    Lee recently joined Cheniere from BHP Billiton, where he headed condensate exports. BHP was the first company to export condensate without waiting for approval from US regulators. Speaking at American Business Conferences' North American Crude Markets and Storage Summit, Lee said that the terminal, slated to start up in 2017, will have two-million barrels of oil storage and dock infrastructure that can accommodate Aframax-sized tankers. 

    Cheniere also is building liquefied natural gas (LNG) export terminals in Corpus Christi, Texas, and Cameron, Louisiana. The oil terminal will have storage and stabilisation at a hub in San Patricio near Corpus Christi, which will be connected via pipeline to Cheniere's operations in Ingleside, Texas, on the Corpus Christi Bay. There, processed condensate will ship out. 

    Cheniere axed plans to build a condensate splitter at the terminal, focusing instead on stabilisation capacity, he said. Splitters "split" condensate into various components including jet fuel, diesel and naphtha, a building block for gasoline. Stabilisers provide less sophisticated processing that removes natural gas liquids. In 2013, US regulators started telling companies that such minimal processing is enough to qualify super-light oil, prevalent in the nearby Eagle Ford shale in Texas, as an exportable refined product that does not violate the crude export ban.
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    Alternative Energy

    Scotland emergency summit on onshore wind.

    Scotland announced plans to hold an emergency summit in early July to discuss a British decision to end government support for the onshore wind industry.

    Scottish Energy Minister Fergus Ewing said British ministers need to "clarify the position regarding onshore wind projects already in the pipeline, and how many of them can expect to continue to receive investment during the grace period before funding is cut off."

    London said $1.2 billion in government support last year helped onshore wind power generate 5 percent of total British electricity and bring the region closer to its climate change goals. With momentum building, the government announced plans to end public subsidies for new onshore wind farms starting in April 2016.

    With 70 percent of the region's onshore wind situated in Scottish territory, Ewing said the government in Edinburgh "strongly disagrees" with the decision to end subsidies.

    Attached Files
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    SolarCity Announces Energy Storage and California Fixed-Rate Pricing

    SolarCity today announced energy storage for new homes and a special low, fixed-rate solar power offering for California homebuilders and their buyers.

    Founded in 2011, the SolarCity Homebuilder Program currently works with builders across the nation to give many new home buyers the option to add solar power systems without increasing the home's purchase price, and pay less for solar electricity than they would otherwise pay for utility power. SolarCity also handles everything from design and installation to monitoring and repairs.

    The SolarCity Homebuilder Program is now taking orders for solar and home energy storage systems. The new energy storage service, in conjunction with solar power, includes the Tesla Powerwall battery pack, advanced hybrid inverter, monitoring and control systems and a warranty and service agreement. While battery backup is the primary application, depending on utility service territory, SolarCity's management system may in the future enable the Powerwall to be configured for a broad range of uses including time-of-use shifting and grid response. The Powerwall is quiet and odorless, can be mounted indoors or outdoors and requires no fuel-all significant advantages over traditional backup generators.

    - See more at:
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    Australia tightens rules on foreign ownership of farmland

    Australia tightened rules on Monday requiring overseas investors to declare holdings of agricultural land in order to strengthen oversight, amid concerns that Australia is losing control of its own food security.

    Foreign ownership of Australian land has become a touchy issue. Official estimates put foreign ownership at 10 percent, but there are concerns that it is far higher.

    Australian Treasurer Joe Hockey said foreign owners should declare their interests with the country's tax office from July 1. The tax office will collect information on the location and size of property, size of interest acquired and country of origin of the foreign investor.

    The information will be entered in a national register that will be made available to the public.

    The move marks a further tightening in rules governing ownership of Australia's farmland. In March, Australia lowered the threshold for purchases of agricultural land by foreign entities requiring regulatory approval.

    Foreign purchases of agricultural land over A$15 million ($11.48 million) will be subject to regulatory approval from Australia's Foreign Investment Review Board.

    Previously, Australia had only required regulatory approval on foreign purchases of agricultural land of more than A$240 million.
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    Precious Metals

    IAMGOLD updates production guidance for 2015 Westwood Mine viable

    IAMGOLD Corporation announces that following an intensive review of the impact of a localized seismic event that took place on May 26, 2015 at the Company's Westwood Mine in Quebec, IAMGOLD remains confident in the long-term viability of the mine.  In the short-term, however, the Company's Q2 2015 production is expected to be slightly below the production of 208,000 ounces in Q1 2015 and this has led to a downward revision of the Company's production guidance to a range of 780,000 to 815,000 ounces for 2015.  Although the cost impact is still being assessed, the lower production guidance is expected to adversely impact Westwood's production costs.

    The review confirmed the Westwood mine's positive attributes of:

    a continued ability to operate following the May seismic event;
    an average grade of measured and indicated resources of over 11 g/t gold, as previously disclosed (see news release dated February 18, 2015);
    its anticipated long mine life of approximately 20 years;
    an exploration upside;
    location in the prolific Abitibi region of Quebec;
    the potential to be IAMGOLD's lowest cost mine when ramped up to full production;
    excellent reconciliation on grade, recovery and dilution; and
    a strong mine management and workforce with over 30 years of experience at Westwood's predecessor mines: Doyon and Mouska.

    IAMGOLD's President and CEO, Steve Letwin said, " Safety is our number one priority.   We and the other companies mining underground in the region know that this district is prone to seismic activity and we are taking the necessary measures to keep our excellent safety record intact.   Westwood is still in its infancy and similar to mines in the area, we expect it to have growing pains as we gain operational experience in this mining environment.
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    Base Metals

    China's 10 non-ferrous metal output up 8.74% in Jan-May to 20.7 mln tons

    The combined output of the ten non-ferrous metals gained 8.74% year on year to 20.7 million tons in the Jan-May period, according to the latest statistics released by the China Non-ferrous Metals Industry Association.

    The output of refined copper rose 9.51% year on year to 30.86 million tons in the five-month period, and the output of primary aluminium saw an increment of 10.25% year on year to 12.82 million tons.

    Meanwhile, the output of lead edged down 1.19% year on year to 1.67 million tons in the period, and the output of zinc went up 13.39% from a year earlier to 2.51 million tons in the first five months.

    In the month of May 2015, the country's average daily output of 10 non-ferrous metal products hit 139,800 tons, 11.26% higher than in the corresponding period of last year.
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    Abu Dhabi buys into Trafigura's Spanish mines as part of new venture

    Trading house Trafigura has sold half its stake in three Spanish copper and zinc mines to Abu Dhabi investment company Mubadala as part of a joint venture they are setting up to invest in base metals mining, the companies said on Monday.

    The deal marks yet another move by the Swiss oil-to-metals trader to grow via joint ventures and to raise money by selling stakes in subsidiaries rather than floating the parent company.

    Sources close to the deal said it valued the mines business at around $1.4 billion, meaning Mubadala would be paying around $700 million for its stake.

    For Mubadala, set up in 2002 by the Abu Dhabi government to help diversify the economy, the purchase is part of a push to invest in assets other than oil. It has a portfolio valued at more than $66 billion.

    Mubadala will buy 50 percent of Trafigura's mining operator Minas de Aguas Teñidas (MATSA) which owns the Agua Teñidas, Sotiel and Magdalena mines in southern Spain producing copper, zinc and lead concentrates. Trafigura will retain the other 50 percent stake, the two companies said in a statement.

    A number of private investors, such as the former boss of Xstrata Mick Davis, and private equity funds such as KKR, have earmarked capital to invest in the mining sector as prices hover near multi-year lows.

    "Investing in MATSA is a key step in growing and diversifying our existing metals and mining portfolio," Ahmed Yahia Al Idrissi, chief executive officer of Mubadala Technology and Industry, said in a statement.

    "This builds on our existing sector strategy and partnership with Mubadala. We are identifying new opportunities and investing thoughtfully together in ways that complement our existing portfolio," Trafigura CEO Jeremy Weir said.

    Trafigura is nearing completion of a two-year investment and expansion plan for MATSA which includes construction of a new treatment plant, which will double annual processing capacity to 4.4 million tonnes per year.
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    Steel, Iron Ore and Coal

    U.S. top court invalidates Obama administration mercury air pollution rule

    The U.S. Supreme Court on Monday invalidated a key Obama administration environmental regulation aimed at limiting emissions of mercury and other hazardous pollutants mainly from coal-fired power plants.

    The court ruled in a 5-4 decision, with its five conservative justices in the majority, that the U.S. Environmental Protection Agency should have weighed the cost of compliance in deciding whether to regulate the pollutants.

    The court sent the case back to the U.S. Court of Appeals for the District of Columbia Circuit, which will ask the EPA to reconsider its rule-making. In the meantime, the rule remains in effect, according to lawyers working on the case.

    Justice Antonin Scalia, writing on behalf of the court, said that a provision of the Clean Air Act that said the EPA can regulate power plants for mercury and other toxic pollutants if it deems it "appropriate and necessary" must be interpreted as including a consideration of costs. The EPA had decided it did not have to consider costs at that stage of the process.

    "The agency must consider cost - including, most importantly, cost of compliance - before deciding whether regulation is appropriate and necessary," Scalia wrote.

    Industry groups and 21 states appealed after an appeals court upheld the regulation in June 2014. The challengers said the EPA's refusal to consider the estimated $9.6 billion-a-year costs would lead to bigger electricity bills for Americans.

    When the EPA issued the regulation, it outlined what it saw as the rule's costs and benefits, including preventing up to 11,000 premature deaths annually. The agency also said the regulation could generate billions of dollars in benefits including a reduction in mercury poisoning, which can lead to developmental delays and abnormalities in children. Overall, the EPA said the benefits could be worth up to $90 billion a year.

    The EPA says the rule, which went into effect in April, applies to about 1,400 electricity-generating units at 600 power plants. Many are already in compliance, the U.S. Energy Information Administration said.

    Vickie Paton, general counsel of the Environmental Defense Fund, which backed the Obama administration, said the EPA should be able to address the concerns raised by the court because it has "already analyzed the economics showing that the health benefits for our nation far outweigh the costs."

    Attached Files
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    China May rail coal transport down 13.2 pct on yr

    China’s rail coal transport stood at 165.45 million tonnes in May, down 13.2% year on year but up 3.8% month on month, showed the latest data from the National Development and Reform Commission.

    Over January-May, China transported a total 859 million tonnes of coal through railways, down 10.6% year on year, data showed.

    Of this, 578.65 million tonnes or 67.4% of the total was railed to power plants, down 12.4% from a year ago, with May haulage sliding 9.6% year on year to 115.41 million tonnes.

    Coal-dedicated Daqin line transported 35.43 million tonnes of coal in May, down 12.8% on year but up 15.6% on month. Total haulage between January and May dropped 7.4% year on year to 172.06 million tonnes.
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    X2 in 'serious' talks for Rio Tinto's coal assets in Australia -FT

    Former Xstrata boss Mick Davis' X2 Resources is in "serious" talks to purchase some of Rio Tinto Plc's Australian coal assets, the Financial Times reported citing people familiar with the matter.

    The multibillion-dollar deal talks are at an early stage and have generated solid interest from both sides, the FT reported. 

    The discussions could also extend to include Rio's metallurgical coal assets in Queensland, the newspaper said.

    A sale of Rio's thermal coal assets in New South Wales would be the biggest divesture by the company under Chief Executive Sam Walsh, for the past two and a half years, the FT said.

    Earlier this month, Reuters reported that X2, which was long considered a front runner for Barrick Gold's Zaldivar copper mine in Chile, bowed out of the race after it was outbid in the first round of the sale process.

    More than a year after he launched his private fund, Davis has been coming under pressure to build a new mining empire with the $6 billion in capital he has raised.

    X2 has so far expressed interest in a number of assets in copper, coal and other commodities, but has yet to make its first acquisition.
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    Australia cuts 2015 iron ore price forecast by 10 pct

    Australia on Tuesday cut its price forecast for iron ore in 2015 by 10 percent to $54.40 a tonne, citing a weak outlook for the commodity's main market, China's steel sector.

    The forecast by the Department of Industry and Science is a sharp decrease from the $60.40 a tonne predicted three months ago and is way off the $94 a tonne touted in January.

    "China's steel production is forecast to contract in 2015 and 2016 as the seaborne supply of iron ore increases," the department said in its latest quarterly update. Iron ore is a key ingredient of steel.

    Since the last forecast on March 17, iron ore has tumbled as low as $46.70 a tonne, standing at $60.40 a tonne this week. .IO62-CNI=SI

    Australia & New Zealand Bank commodities analysts predict the price will fall to $53 over the next three months and stay under $60 a tonne in 2016.

    That's more bullish than Citi, which expects iron ore to fall to $48 a tonne in the third quarter and as low as $38 in the fourth quarter.

    Analysts blame the negative sentiment on a massive increase in production and over-estimates of China's appetite for imported ore by sector titans Vale of Brazil and Australians Rio Tinto and BHP Billiton which continue to expand.

    The department also cut its forecast for total Australian iron ore exports by 4 percent to 733.2 million tonnes in fiscal 2014/15 and by 3 percent to 795 million tonnes in 2015/16.

    Attached Files
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    Mr Obama signs trade bill strengthening US steel companies to fight steel imports

    President Mr Obama signed two significant trade initiatives - Trade Promotion Authority (TPA), and the extension of the Africa Growth and Opportunity Act and other trade preference programs, which includes renewal of Trade Adjustment Assistance (TAA) and trade remedy improvements.

    Trade legislation that includes the Leveling the Playing Field Act, a bill introduced by US Sen Sherrod Brown, D-Ohio, in March and co-sponsored by US Sen Rob Portman, R-Ohio, that will give US companies especially the US steel industry tools to fight against unfair trade practices.
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