Mark Latham Commodity Equity Intelligence Service

Monday 27th June 2016
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    Overweight Resources.

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    Brexit: Reaction and Future?

    The messages come from everywhere, there is a disenchantment of the European people in Europe, we can understand. It seems like an incomprehensible bureaucratic machine, incapable of restoring growth and employment, powerless to control our borders" , did he declare. According to the election, "the biggest mistake we could make would be to suggest that 27 [member states of the European Union], we will continue as before," he said. "We can not continue as before. We must write a new page, a new chapter in Europe ."

    ~Alain Juppe, rightist candidate for the presidency. 

    You attended the shocks of the Union since 2008 and you understand that the Union could die under the weight of its contradictions, its paralysis, its compromises and mediocrity of its national leaders fueling skepticism more and stronger in respect of a European project made responsible for all national problems. So you decided to give us a big kick in the rear: 

    ~Jean Qatremer, La liberation.

    The continent has been too rigid in recent years, too narcissistic, too comfortable. Some Brexiteers even posed justifiable questions. What if, for example, the EU has already fulfilled its primary function of securing peace and prosperity in Europe? What if the citizens of Europe no longer want deeper ties between their countries? Must "more Europe" really always be the only answer to everything?

    The European Union now has the opportunity to reinvent itself. But it also needs to consider new, looser forms of memberships for countries like Britain or Turkey that want to conduct trade but either do not want to be or cannot be part of an ever-closer community. Next week, EU leaders will meet in Brussels for their first post-Brexit summit. It has to be the start of a new beginning. That's the only chance we have left.

    ~Der Speigel.

    "No Immigrants, No Trade"?

    ~Anon, American observer reading the sub text.

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    BHP lifts exploration spending by nearly 30 percent, targets copper and oil

    BHP lifts exploration spending by nearly 30 percent, targets copper and oil

    BHP Billiton said on Monday it plans to boost its exploration budget by 29 percent to around $900 million next year, as the global miner counts on new finds of oil and copper to drive growth in a tough market rather than mergers and acquisitions.

    The figure represents 18 percent of BHP's total capital budget of $5 billion over fiscal 2017 and comes amid efforts by big miners to maintain growth while tightening balance sheets.

    In December, BHP had projected total fiscal 2016 exploration spending of $700 million.

    The lift in exploration spending comes as a flurry of M&A deals earlier this year slows, with fewer assets than expected coming up for sale, leaving mining companies to rely on their own projects to grow.

    Petroleum exploration by BHP will focus on deepwater basins in the Gulf of Mexico, the Caribbean and the Northern Beagle basin, off the coast of Western Australia, the company's head of geoscience, Laura Tyler, told a Citigroup investors' briefing.

    Copper exploration is targeting deposits in Chile, Peru, the United States, Canada and South Australia, according to Tyler.

    "We are investing at a time when most in our sector continue to reduce discretionary spend," Tyler said.

    Earlier this year, BHP Chief Executive Andrew Mackenzie told investors he anticipated capital and exploration spending of around $7 billion in the financial year ending June 30 and no more than $5 billion in the 2017 financial year.

    "BHP is effectively letting the market know it will be spending more of a lower capex budget on exploration, emphasizing petroleum and copper," said Shaw and Partners mining analyst Peter O'Connor. "It's where they see the best growth."

    Big miners such as BHP and Rio Tinto haven't ruled out large acquisitions, but have noted few so-called tier-one assets up for sale by rival companies hit harder by a downturn in the sector.

    "M&A isn't off the agenda, but BHP isn't waiting around for the next big opportunity," O'Connor said.

    Separately, Rio Tinto group executive for growth & innovation, Stephen McIntosh, told the Citi briefing the company was seeing a renewed focus on greenfield projects and a bias toward copper.

    "However this is not our exclusive focus and we still have a significant proportion of our expenditure on other commodities," McIntosh said.
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    China May industrial profit growth slows to 3.7 percent year-on-year

    Profits of Chinese industrial companies rose 3.7 percent in May from a year earlier, slowing from April's pace and adding to concerns that the world's second-largest economy may be losing some momentum.

    A return to profit growth in the first quarter and a strong jump in March in particular had fueled hopes that China's economy was perking up, but data since then has suggested it may be stabilizing at best.

    "The continued slowdown in May profit growth further supports our view that growth momentum has remained weak or possibly weakened further," economists at Nomura said in a note.

    "We maintain our forecast for a slowing of real GDP growth to 6.3 percent year-on-year in Q2 from 6.7 percent in Q1."

    Profits in May rose to 537.2 billion yuan ($81.21 billion), the statistics bureau said on Monday.

    In the first five months of this year, profits rose 6.4 percent compared with the same period last year, the National Bureau of Statistics said on its website.

    But the performance was uneven across sectors, with profits in the mining sector falling 93.8 percent from a year earlier, the bureau said.

    Industrial profits in January-April rose 6.5 percent from a year earlier, with April up 4.2 percent.

    "Growth in industrial profits slowed down slightly in May compared with the previous month, but positive changes have emerged from the industrial sectors," NBS official He Ping said in a statement accompanying the data.

    He added that profits of energy and raw material sectors including coal, steel and non-ferrous industries saw a resumption of growth in May.

    In May, profits of the coal mining sector grew 2.5 times from a year earlier, snapping a falling streak over the past few years, the bureau said.

    The pick-up in profits in these sectors might be an indication that Beijing's efforts to remove excessive capacity, particularly in the coal and steel sectors, may be starting to have an effect.

    The central government will earmark 27.64 billion yuan to help local governments pay for capacity closures in these two sectors this year.

    China's top economic planner said on Sunday that it planned to cut steel capacity by 45 million tonnes and lower coal output capacity by 280 million tonnes.

    Chinese industrial firms' debt at the end of May was 4.9 percent higher than at the same point last year.

    The data covers large enterprises with annual revenue of more than 20 million yuan from their main operations.

    Profits at China's state-owned firms fell 9.6 percent in the first five months of 2016 from a year earlier, wider than the a 8.4 percent fall in the first four months, the Ministry of Finance said last week.

    Producer prices fell at their slowest rate in May since November 2014, supported by a government investment spree and higher commodity prices. On a monthly basis, producer prices rose 0.5 percent, the third increase in a row.
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    Oil and Gas

    EU Gas prices start financing US LNG Exports.

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    PetroChina to start new refinery in Oct, boost China crude imports

    PetroChina, China's second-largest state-run refiner, aims to start operating a new refinery in the country's southwest in October after several delays, boosting the nation's already-surging crude imports.

    The 260,000-barrels per day Anning plant in Yunnan province would be the first major Chinese refinery to come online in nearly two years, amid a scaleback by state energy firms in adding refining capacity as lower oil prices slashed earnings.

    Saudi state oil firm Aramco is looking to invest $1-1.5 billion in the refinery as well as the retail assets of PetroChina, sources told Reuters last year. Aramco was not immediately available for comment on Friday.

    "The latest schedule for the Yunnan refinery start-up is October," said a PetroChina spokesperson, without elaborating. The refinery has been delayed several times as tightening environmental regulations forced PetroChina to resubmit approvals for changes to plant configurations.

    Crude imports into China, the world's second-largest buyer, soared by 16 percent, or over 1 million bpd, in the first five months of 2016 from the same period last year, the fastest growth in more than a decade.

    That demand, which has helped push oil prices back near $50 a barrel, has been driven by Chinese oil firms building stockpiles and fresh appetite from a new group of importers, the independent plants allowed to import crude for first time since late last year.

    A PetroChina official with knowledge of the company's oil trade said that if a deal was finalised with Aramaco, the Saudis would supply at least part of the refinery's crude oil requirements. He declined to be identified as he was not authorised to speak with media.

    Saudi Arabia has for three straight months lost to Russia the spot as the top crude supplier to China.

    The plant is designed to process high sulfur crude oil that will be shipped in tankers and then pumped through a pipeline connecting the southwest coast of neighbouring Myanmar and Yunnan, said the industry sources. The last target for the start of operations was the middle of this year.

    PetroChina parent CNPC early this year started trial operations of the 2,400-kilometre (1491 miles), 440,000-bpd pipeline that runs parallel to an operating natural gas pipeline, but has to wait for the full completion of the refinery for commercial start-up.

    The refinery start-up had also been delayed as the new Myanmar government has been reviewing the deal on the pipeline, said the second PetroChina official.

    Local Chinese media have reported the company modified some of the 15 refining units, including adding a 1.2 million tonnes per year delayed coking unit, which allows for the processing of heavier crude oil.

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    Gazprom expects profit ‘to more than triple’

    Russian giant Gazprom is expecting last year’s profit to more than triple year-on-year despite the declining oil prices.

    Gazprom’s deputy chairman Andrey Kruglov said that, while “it is very hard to forecast net profit”, the company expects a boost.    

    “The decline in global energy prices is putting pressure on the financial results of all oil and gas companies across the world, and Gazprom is no exception,” Kruglov said.

    “Gazprom’s net profit for last year will largely depend on the still volatile dollar rate at the year-end. According to our estimates, the net profit margin will more than triple, exceeding 10%, in 2015 against 2014,” he said.

    “For the net income forecast, we expect it to considerably surpass last year’s figure, as in 2014 the net income collapsed mainly due to non-cash losses on currency differences as a result of a major weakening of the ruble.”

    “We estimate the company’s earnings before interest, tax depreciation and amortisation (Ebitda) to be around $30 billion in 2015,” he added.

    The state-run company posted a net profit of 159 billion roubles ($3.07 billion) in 2014, a 86% drop compared to 1139 billion roubles in the previous year, due to appreciation of the US dollar and the Euro against the rouble.
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    Police Confirm Attack On Shell Facility In Nigeria

    Police in the area of Imo in Nigeria have confirmed that there has been an attack on a Shell Petroleum Development Company (SPDC) facility there. The attack, which was in the Ohaji/Egbema Local Government area took place early Thursday.

    One source told the News Agency of Nigeria that the attack came at 5:30 in the morning and reported an explosion that created a great deal of flame. That source could not confirm if anyone was killed in the incident.

    Andrew Enwerem, who is the Public Relations Officer of police in the state, did not disclose any details about the incident, and it is still not known who is behind the attack, or the amount of damage done to the facility. SPDC spokesperson Precious Okolobo noted that the Trans Niger pipeline that runs through the area has been closed for repairs, but said that the company is investigating the Thursday attack.

    According to the Nigerian News Agency, no group has claimed responsibility for the incident.
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    Chevron Vaca Muerta Costs Drop 20% Nearing Goals, Moshiri Says

    The cost to drill wells at Argentina’s Vaca Muerta, site of the world’s second-biggest shale reserves, has dropped 20 percent this year, putting Chevron Corp. and its partners closer to meeting spending goals.

    Drilling costs at the Loma Campana field in Vaca Muerta have declined to $11.2 million per well from $14 million in the last three months of 2015, Ali Moshiri, president for Latin America and Africa, said in an interview with Bloomberg News in Buenos Aires on Thursday. That’s putting the joint venture with YPF SA closer to its goal of drilling wells at less than $10 million, he said.

    “There are a lot of companies watching Chevron and YPF in Argentina,” Moshiri said. “The performance of those wells are coming very close, very competitive to the United States.”

    Oil companies including Exxon Mobil Corp. are rushing to tap Argentina’s shale reserves, the largest after the U.S., as low oil prices put pressure on producers in the U.S. Output in the U.S. has dropped this year as prices plunged, while producers in Argentina have maintained production levels because of government subsidies to stimulate extraction.

    Chevron signed an agreement with state-owned YPF in 2013 to invest $1.6 billion in a pilot program to drill at Vaca Muerta in the Neuqen province. The joint venture, worth about $16 billion, has drilled about 400 wells, Moshiri said.

    The government of former President Kristina Fernandez de Kirchner raised the price of oil produced domestically to $75 a barrel from $45, gave drillers tax exemptions and capped royalties at 15 percent since 2012, creating a boom in the oil industry domestically as it struggled globally because of falling prices.

    “We are a long-term business; we don’t try to do anything for just a few years,” Moshiri said. “A few years ago no one knew about Chevron in Argentina. Now we are the largest investor in the oil industry.”
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    ChemChina to take 40 pct stake in Rosneft's petrochemical project

    Russia's biggest oil producer Rosneft said on Saturday that China National Chemical Corporation (ChemChina) would take a 40 percent stake in its planned petrochemical complex VNHK in Russia's Far East.

    "The participation of ChemChina will allow Rosneft to optimise the project financing and jointly organise sales of the high-margin products of the future complex on the premium markets of the Asia-Pacific region," Rosneft said in a statement.

    Rosneft and ChemChina also signed a new one-year oil supply contract, the Russian company said without providing volumes or financial details.
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    China suspends oil price adjustment

    China's top economic planner will not adjust domestic retail oil prices as global prices stayed below its official pricing mechanism, it was announced Thursday.

    Under the current mechanism, prices of refined oil products are adjusted when crude prices translate into a change of more than 50 yuan (over 7.5 U.S. dollars) per tonne for gasoline and diesel over a period of 10 working days.

    The National Development and Reform Commission (NDRC) announced in January that China will not cut its fuel prices when international oil prices fall below 40 U.S. dollars a barrel, which immediately triggered a suspension on Jan. 27.

    The limit aims to buffer the negative effects of price swings, the NDRC said.

    The NDRC is closely watching the current pricing mechanism and will continue to improve it based on market changes, according to an NDRC notice.
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    Nigeria Seeks $40-$50 Billion in Oil Investment as Output Rises

    Nigeria Seeks $40-$50 Billion in Oil Investment as Output Rises

    Nigeria is seeking $40 billion to $50 billion in investment in oil projects as the OPEC producer said it raised crude output to as much as 1.9 million barrels a day as of two days ago.

    The African producer signed a potential deal for $8.5 billion of investment with China North Industries Group Corp., Nigerian State Minister for Petroleum Resources Emmanuel Ibe Kachikwu said in a Bloomberg television interview in Beijing on Monday. The country’s crude output should rise to 2.2 million barrels a day next month if repairs to a pipeline are completed, he said.

    “We’re looking to raise about $40 to $50 billion,” Kachikwu said in the Bloomberg interview. “Going to places like China, which have a huge capacity to put money in the oil sector, is very helpful.”

    Low oil prices, which have fallen by more than half in the past two years, are forcing some of the world’s largest drillers to seek investment to maintain and expand output. Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said in April the government plans to list less than 5 percent of the state producer known as Saudi Aramco, which could turn the world’s biggest oil exporter into the largest publicly traded firm with a value in the trillions of dollars. Russia is seeking buyers for 19.5 percent of Rosneft PJSC.

    Militant attacks earlier this year reduced Nigeria’s oil production to 1.3 million barrels from from 2.2 million a day, and output was between 1.8 million and 1.9 million as of two days ago, Kachikwu said. Crude prices may end the year between $50 and $55, he said.
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    Chevron sets date for first Gorgon LNG cargo after shutdown

    Chevron’s Gorgon LNG project in Australia, one of the largest natural gas projects in the world, is expected to ship its first cargo of LNG on July 3 after the plant was shut down due to mechanical problems in March.

    The facility on Barrow Island halted production soon after the first cargo of the chilled fuel was shipped in March due to a mechanical issue in the propane refrigerant circuit on Train 1.

    The second cargo from the US$54 billion LNG project will be shipped onboard Teekay’s 165,500-cbm Marib Spirit, according to a shipping schedule posted on the Chevron Australia website.

    Energy giant Chevron expects to export in total 5 cargoes of the chilled fuel from the Gorgon plant in July.
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    Expanded Panama Canal open, first LNG transit in late July

    The opening of the expanded Panama Canal paves the way for transit of liquefied natural gas carriers transporting volumes from the emerging US Gulf Coast LNG export projects.

    Speaking at the opening on Sunday, Panama Canal Administrator and CEO Jorge L. Quijanosaid the reservation for the first LNG vessel, which will transit in late July, has been made.

    The inaugural transit of the expanded Panama Canal began with the passage of Neopanamax vessel COSCO Shipping Panama on its way to Asia, port authority said in a statement.

    The vessel set sail on June 11 from the Greek Port of Piraeus carrying 9,472 TEUs and measuring 299.98 meters in length and 48.25 meters in beam.

    It entered the Agua Clara Locks on the Atlantic side of the country and concluded its transit crossing through the Cocoli Locks on the Pacific side.

    The newly expanded canal has the capacity to accommodate LNG carriers with the capacity to transport 173,000 cbm to 180,000 cbm of liquefied natural gas.

    In 2015, ACP approved a tolling structure for LNG carriers, noting that tolls will be based on cubic meters.
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    Weekly U.S. Oil Rig Count: A Large Decline Of Low Quality Rigs

    A seemingly large decline in the domestic oil rig count although consisting mostly of vertical rigs. Whereas last week's increase in the oil rig count (nine rigs) was concentrated in the Permian and in shale producing regions, this week's decrease is concentrated in lower quality basins. The Permian basin, the quintessential oil producing basin in the country, actually increased four oil rigs, same as last week.

    Source: Baker Hughes

    * Total U.S. oil rig count decreased by seven almost eliminating the nine rig increase of the previous week. However, these are mostly vertical rigs and in less productive basins. Despite the large decrease in rig counts, the Permian still posted a relatively large increase in the count.

    * Horizontal rigs declined by one following a twelve rig increase during the last three weeks. Directional rigs declined by two.

    * Natural gas rigs increased by four taking advantage of the current rally (compared to the sub $2/mcf lows) in natural gas prices.

    Source: Baker Hughes, Orangutan Capital

    * Four new rigs in the Permian; the most established oil-producing basin in the country. The rig count in the Permian is now back to March levels (which are still very low by historical standards). This week's four rig increase follows a similar four rig increase during the previous week.

    * Two new rigs in the Williston basin. This is a shale play and follows last week's six rig increase in the Barnett and Haynesville basins.

    * Four rig decrease in Eagle Ford and Cana Woodford.

    * A very large nine rig decrease in the 'Others' region. This change accounted for most of the decline during the week and consists of rigs in Louisiana (onshore) and Oklahoma.

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    Court says ETE can walk away from $20 billion Williams takeover

    Energy Transfer Equity won a court ruling on Friday that would allow the pipeline operator to walk away from its more than $20 billion takeover of rival Williams Cos Inc, a deal that Energy Transfer agreed to in September but soured on in January.

    A Delaware judge ruled that Energy Transfer, or ETE, had not breached the merger agreement when in March it cited a tax problem that would prevent the deal from closing by the agreed upon termination date. Under the terms of the deal, if the deal is not completed by June 28, ETE can walk away without penalty.

    Williams said in a statement that it disagreed with the judge's ruling and will take "appropriate actions to enforce its right." It said in a brief filed with the court earlier this week that it would appeal any ruling in favor of ETE.

    Williams' shareholders are set to vote on Monday - a day before the deal's deadline. The company said its board still recommends shareholders vote for the deal.

    The two companies sued each other in Delaware Chancery Court in May after months of heated disagreement. ETE had been trying to back out of a deal that had become less attractive in the wake of oil price fluctuations and a decline in its share price.

    ETE argues that it is not able to close the deal because its tax advisers at Latham & Watkins could not determine that the deal would be tax-free, as anticipated when the agreement was originally signed.

    Delaware Vice Chancellor Sam Glasscock ruled that it was not material whether or not Energy Transfer and its chief executive, Dallas billionaire Kelcy Warren, had been trying to break the deal because he was persuaded that the tax issues uncovered by ETE were valid.

    "If a man formerly desperate for cash and without prospects is suddenly flush, that may arouse our suspicions. Nonetheless, even a desperate man can be an honest winner of the lottery," Glasscock wrote in a 59-page opinion.

    Energy Transfer units were up over 8 percent in after-the-bell trading following the ruling. Williams shares fell more than 6 percent.


    It is rare for judges to decide that a merger contract is unenforceable, said Brian Quinn, a professor at Boston College Law School.

    "Buyers don't get to walk often. In 2008, during the crisis, a rash of buyers tried to walk, but the courts wouldn't let them," Quinn said.

    He noted that the chief justice of Delaware's Supreme Court, which would hear any appeal filed by Williams, ordered Tyson Foods Inc to buy rival IBP Inc in 2001 after Tyson tried to back out of that deal.

    "If I were Williams I would be quoting that opinion liberally" in an appeal, Quinn said.

    Energy Transfer's Warren set his sights on Williams last year to transform ETE into one of the world's biggest pipeline networks. He launched an unsolicited bid last June and reached a deal in late September that was then worth $33 billion.

    The timing was poor. Oil and gas prices dropped significantly after the deal was announced, the companies' shares fell sharply and investors started to worry that the $6 billion cash portion of the deal would saddle ETE with too much debt.

    ETE made it clear that it no longer believed the deal was attractive. It slashed estimates for expected cost savings and said it would likely have to cut distributions to shareholders entirely next year if it had to complete the deal. It also said it would have to cut jobs substantially in Williams' home state of Oklahoma.

    The company also launched a convertible share offering that effectively shields Warren and other top ETE shareholders from a distribution cut.
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    TransCanada formally seeks NAFTA damages in Keystone XL rejection

    TransCanada Corp is formally requesting arbitration over U.S. President Barack Obama's rejection of the Keystone XL pipeline, seeking $15 billion in damages, the company said in legal papers dated Friday.

    TransCanada submitted a notice for an arbitration claim in January and had then tried to negotiate with the U.S. government to "reach an amicable settlement," the company said in files posted on the pipeline's website.

    "Unfortunately, the parties were unable to settle the dispute."

    TransCanada said it then filed its formal arbitration request under North American Free Trade Agreement (NAFTA) provisions, seeking to recover what it says are costs and damages.

    The Keystone XL was designed to link existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in Illinois and, eventually, the Gulf of Mexico coast.

    Obama rejected the cross-border crude oil pipeline last November, seven years after it was first proposed, saying it would not make a meaningful long-term contribution to the U.S. economy.

    TransCanada is suing the United States in federal court in a separate legal action, seeking to reverse the pipeline's rejection.

    NAFTA, whose arbitration provisions allow companies to challenge governments before international panels, has been a target of recent anti-free-trade sentiments in the United States.

    The heads of NAFTA members, Canada, the United States and Mexico, are expected to meet in Ottawa for a North American leaders' Summit on June 29.

    Canada was supposed to host the meeting early last year but canceled it amid tension between then Prime Minister Stephen Harper and Obama over the Keystone XL pipeline.

    TransCanada and the U.S. Department of Energy did not immediately respond to requests for comment.
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    Alternative Energy

    Shanxi's photovoltaic power generation projects go into production

    The Shanxi province, known for its abundant coal resources, will begin a new chapter of new energy power generation as 13 photovoltaic power generation projects were recently put into operation.

    The national photovoltaic demonstration base in Datong is the first 1 million-KW photovoltaic demonstration base in China, aiming to enhance the country's photovoltaic power generation technology and promote transformation of its regional economy.

    The use of photovoltaic power generation can help adjust the province's energy structure.

    With 1 million-KW of power planned, the base will ensure sufficient electricity supply in the Shanxi province. The 13 projects will be connected to the grid and will be put into operation by the end of July.

    As Shanxi prioritizes new energy through services, grid connection, scheduling and utilization, more clean energy will become available for local people.
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    Glyphosate decision kicked 'upstairs'

    Commission to decide

    EU health commissioner Vytenis Andriukaitis said the commission would meet on Monday (27 June) to discuss the next steps. The commission is expected to push through the temporary relicensing of glyphosate.

    EU farmers’ umbrella group Copa-Cogeca, which represents 23 million EU farmers and 22,000 agri-cooperatives, said it “regretted” that the appeal committee failed to give an opinion on the relicensing of glyphosate and it urged the commission to reapprove the product before 30 June.

    Copa-Cogeca secretary-general Pekka Pesonen highlighted the many environmental benefits of using glyphosate.

    “Farmers have been using for example no till – a sustainable agricultural practice – and it’s with the use of glyphosate that they can do this in a cost effective manner to ensure soils are in good condition.

    “It is an important tool together with catch crops to prevent soil erosion and reduce greenhouse gas emissions. Without glyphosate, farmers’ competitiveness would be put at risk and EU food production threatened as no alternatives exist.”

    The European Crop Protection Association said: “Failure to re-approve glyphosate would have significant negative repercussions for the competitiveness of European agriculture, the environment, and the ability of farmers to produce safe and affordable food.”

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    Precious Metals

    Russia-focused Nord Gold may consider Toronto listing after Brexit

    Russia-focused gold producer Nord Gold may consider a primary listing in Toronto instead of London after Britain's decision to leave the European Union, its Chief Executive Nikolai Zelenski said on Friday.

    Nord Gold, controlled by Russian steel tycoon Alexei Mordashov, is based in the Netherlands but said in January that it hopes to change its jurisdiction to Britain by the end of 2016 as a step toward a premium listing on the London Stock Exchange.

    Zelenski said Britons' vote on Thursday to leave the EU, or Brexit, may be a reason not to list in London but said it was too early to tell.

    "London may start to fade as a financial centre after Britain leaves the EU. However, it has never been the centre for global gold producers," he said in an emailed comment.

    "Therefore, Brexit may become a reason to explore alternative places for the placement. For example, the Toronto Stock Exchange is a centre for the mining industry," he added. "Brexit is an opaque and unprecedented case, it is necessary to study the legal nuances."

    Bloomberg news agency reported similar comments by Zelenski earlier on Friday.

    Nord Gold is a mid-sized gold producer with assets in Russia, Kazakhstan, Burkina Faso and Guinea.
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    Base Metals

    Anglo American advancing in wage talks at Chile copper mines

    Global mining company Anglo American said on Friday that it is progressing with wage negotiations at its flagship Los Bronces copper mine, in Chile, and is looking to finalise talks with workers at other operations in the country. 

    This year, Anglo American needs to negotiate contracts with seven unions in Chile amid low prices for the red metal. 

    "We're conversing within an early (wage negotiation) process with the two unions at our Los Bronces operation whose contracts expire at the end of August this year," a company spokesperson said. "Agreements have already been reached and signed with the supervisors' union and with the two unions at the Chagres (smelter)," the spokesman added. 

    Los Bronces produced 401 715 t of copper last year. Anglo American is also in negotiations with workers at the smaller El Soldado mine, where workers said on Friday that they would vote on a strike next week after receiving an offer from the company that they deem insufficient. El Soldado produced 35 840 t of the red metal in 2015.
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    Steel, Iron Ore and Coal

    India’s coal output increasing, coal imports to drop further this fiscal

    "Coal imports will continue to come down with increased availability of coal (domestic)," Coal Secretary Anil Swarup told reporters on the sidelines of an event in New Delhi.

    As per the data of first two months of this fiscal, the import of coal is likely to reduce, he said.

    "Quantities I cannot predict how much will come down. I have no doubts that coal imports will come down. Last fiscal, we saved Rs 24,000 crore and we are aiming Rs 40,000 crore of saving this year (2016-17)," Swarup said.

    Noting that the demand of coal is not going at the envisaged hope in the country, Swarup expressed hope that Uday scheme will help boost the demand for the dry fuel in the days to come.

    "We will continue to produce. We are not revising the (coal production) target," he stressed.

    He further stated that response to the ongoing auction of coal linkages for the non-regulated sector has been encouraging.

    When asked about Coal India's plans for acquiring coal mines overseas, the secretary said, "The ground work has been done in South Africa. Now final discussions are on."

    Registering a drop of 19.2%, coal imports stood at 16.38 million tonnes last month on the back of sufficient availability of domestic fuel.

    Last year, it was around 20.29 million tonnes.

    The import of coal came down by 15% to 15.9 million tonnes in April this year.

    In 2015-16, Coal India (CIL) which accounts for over 80% of domestic output, achieved a record production of 536 million tonnes, which was 42 million tonnes more than the previous fiscal.

    Its production grew 8.5% year-on-year. CIL was, however, eyeing 550 million tonnes output.

    CIL's output is fixed at 598 million tonnes for this fiscal.

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    Anglo American closes in on sales of Australian coal assets

    Anglo American is likely to conclude the sale of its Australian coking coal mines within weeks, said sources who have been close to the sales process.

    A sale of the Moranbah and Grosvenor mines would be a key component of Anglo’s debt reduction plans as it tries to persuade investors that it can stave off the consequences of lower commodity prices.

    The efforts by Anglo to sell the mines come in spite of global pressure on coal producers because of weak prices and concerns over the fuel’s role in increasing carbon emissions.

    Anglo stepped up its asset sale plans in February. It has sold a trio of smaller Australian coal mines in recent months, while it also sold niobium and phosphate deposits in Brazil for $1.5 billion in April, as part of plans for between $3 billion and $4 billion of asset disposals this year.

    Glencore was among the groups to consider a bid for the Anglo coal assets but sources said the Switzerland-based group was no longer in the process.

    Apollo, the private equity group, has also been considering a bid for the assets.

    BHP, the world’s largest mining group by market capitalisation, is seen as a potential buyer because of the synergies it could achieve with one of its own Australian coal businesses. BHP has a joint venture with Mitsubishi of Japan that owns several nearby mines in the same Bowen Basin coal district of Queensland.

    BHP has also insisted it sees a good long-term future for coal, in spite of the pressure on the fuel culminating in this year’s filing for bankruptcy protection from Peabody Energy, the world’s largest coal miner.

    Grosvenor, one of the mines that Anglo wants to sell, has only just gone into production after a five-year development. However Anglo has since decided to focus its entire portfolio on production of copper, diamonds and platinum.

    Seamus French, who runs Anglo’s coal business, said last month that while the Grosvenor mine may not fit Anglo American’s strategic portfolio choices, “its long-term commercial attractiveness is beyond question”.

    Anglo presents its interim results to investors in late July and while the company would like to conclude a sale before then, people aware of the process say no firm deadline has been set.

    Anglo’s shares plummeted last year, losing three-quarters of their value amid the commodities rout. But they have recovered strongly and are up 120% since the start of 2016.

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    Fortescue’s rating upgraded after debt reduction

    Ratings agency Moody’s Investors Service on Friday upgraded the outlook of Australian iron-ore company Fortescue Metals’ corporate family rating to stable and affirmed the rating at Ba3. 

    According to a Fortescue statement, Moody’s said that the company’s recent efforts to reduce its debt had lowered its breakeven costs and created a substantial buffer to maintain leverage metrics at adequate level for the miner’s rating, even under the lower iron-ore price scenarios. 

    “We are pleased that Moody’s has recognised Fortescue’s operating performance, significant progress in reducing costs and the generation of strong operating cash flows. This has enabled the company to continue to reduce debt levels while maintaining solid liquidity,” commented Fortescue CFO Stephen Pearce. 

    Fortescue had repaid $2.9-billion of its debt in the 2016 financial year, lowering its interest expenses by $186-million.
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    Baosteel, Wuhan Steel to announce restructuring plans

    Baoshan Iron and Steel Co and Wuhan Iron and Steel, two of China's largest steelmakers, announced on Sunday that they would suspend share trading on the Shanghai Stock Exchange amid ongoing strategic restructuring planned by their respective parent companies.

    The restructuring plans are still subject to regulatory approval, and due to uncertainties surrounding the matter, both companies have applied to halt trading of their shares on the Shanghai bourse from Monday (Jun 27), according to the filings of the two, which state that "after five trading days the companies will release a new development on the restructuring".

    According to the 2015 ranking of the world's major steel-makers by the World Steel Association, Shanghai-based Baosteel is China's second largest and the world's fifth largest steel-maker by output, producing 34.94 million metric tons last year, while Hubei-based Wuhan Steel was rated China's sixth and the world's 11th largest steel mill-producing 25.78 million tons.

    "The two parties are currently only at the very beginning of forming a restructuring intention, without any detailed work rolled out. So the process is full of uncertainties," said Sun Jin, director of public relations at Wuhan Steel.

    Rumours of a possible merger between the two steel plants, which would be the biggest in the history of China's steel industry, have been rife over the past 12 months.

    Analysts have said a merger could capitalize on Wuhan Iron and Steel's expertise and advanced technology in oriented silicon steel combined with the leading market position of Baosteel, which supplies about 50 percent of the steel sheet metal used by China's auto industry.

    Wang Guoqing, consultancy director at the Lange Steel Information Research Center, a Beijing-based industry think tank, said a merger would produce a new steel group that would be more competitive in both the domestic and overseas market.

    "The Chinese government has been working on increasing concentration in the steel industry," Wang said. "Any merger may trigger a round of mergers in the industry. Some companies with low profitability may be gobbled up."

    Xu Xiangchun, a senior analyst with Mysteel, a Shanghai-based steel information consultancy, said a merger would bring useful experience to an industry facing weak demand and severe overcapacity.

    "The two giant players would set an example for other steel companies on how to work together and integrate smoothly to survive the market.," said Xu.

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    US decide to levy punitive duties on corrosion-resistant steel products from China

    The US trade authority ruled Friday that the domestic industry is "materially injured" by imports of corrosion-resistant steel products from China, India, Italy and the Republic of Korea, which means the US government will impose punitive duties on the products.

    All six commissioners of the US International Trade Commission (USITC) voted in the affirmative, saying a US industry is materially injured by reason of imports of corrosion-resistant steel products from above countries that are allegedly subsidized and sold in the United States at less than fair value.

    "The US steel industry has been in a state of overprotection," said an official from the Chinese Ministry of Commerce on Thursday, pointing out the United States has conducted a total of 161 trade remedy rulings on various steel products worldwide by the end of April 2016.

    As a result of the Commission's affirmative determinations, the US Commerce Department will issue antidumping and countervailing duty orders on imports of these products from China.

    For products from China the antidumping duty rate is 209.97 percent and the countervailing duty rates are 39.05 percent and 241.07 percent, according to the Commerce Department's final determination in May 2016.

    This is the second final ruling made by the US trade authority against imports of China's steel products this week. On Wednesday the USITC made a final ruling to allow the Commerce Department to impose antidumping and countervailing duty on imports of cold-rolled steel flat products from China.

    In 2015, imports of these products from China under investigation were estimated at about $500.3 million, according to US official data.

    China has repeatedly urged the United States to abide by its commitment against trade protectionism and work together with China and other members of the international community to maintain a free, open and just international trade environment.

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