Posts tagged 'Resources'

Stevens and the RBA hold the line

So Glenn Stevens likes the nags after all.

Well, sort of.

For the first time since he took the helm of the RBA in 2006, the governor did not tinker with interest rates on Melbourne Cup day (a public holiday across parts of the country). Read more

Resources hit hard by market slump

Even by the standards of the recent financial crisis, Thursday’s sell-off in stock markets was sizeable, the FT says. The growing nervousness over the debt crisis in Europe, the risk of a “double-dip” recession in America and a view among investors that policymakers, including the Japanese government and European Central Bank, had failed to shore up confidence accelerated this week’s sell-off. The worst hit stocks were those of the world’s big natural resources groups, including miners, oil companies and traders. Despite the prices of many commodities remaining near recent highs, their shares prices tumbled, sending valuations to the lowest levels of the year. Even gold started selling off like any other risky asset on Thursday, reports the WSJ. In Sydney on Friday, resources stocks continued to be pounded with BHP Billiton off 4.1 per cent and Fortescue Metals Group down 6 per cent.

Grantham on looming peak dirt

Jeremy Grantham has returned to the subject of finite resources. In his latest quarterly letter, he says he didn’t intend to get quite so doomy on us back in April:

With hindsight, there are a few additions and qualifications I would like to make regarding my letter on resources of last quarter. I will start with an overview of the prospects for our collective well-being: there is nothing about the resource limitation problem that we cannot resolve.  We have the brain power and, especially, the inventiveness.  We have some nearly infinite resources: the sun’s energy and the water in the oceans.  We have some critically fi nite resources, but they can be rationed and stretched by sensible, far-sighted behavior to fi ll the gap between today, when we live far beyond a sustainable level, and, say, 200 years from now, when we may have achieved true long-term sustainability.  Such sustainability would require improved energy and agricultural technologies and, probably, a substantially reduced population.  With intelligent planning, all of this could be reasonably expected.  A population reduction could be arrived at by a slow and voluntary decline (perhaps with some encouragement of smaller family size achieved, for example, through greater education). Read more

LSE/TMX – a defensive merger?

The London Stock Exchange does not have a great track record of consummating deals (remember the proposed Deutsche Borse transaction of the 2001?) or grabbing big strategic opportunities.

So will its’s proposed merger with TMX Group, Canada’s largest exchange company, go the way of Northern Foods/Greencore or British Airways/Iberia? Read more

Global resources spending soars

Global spending on mining, energy resources and commodities will surpass pre-crisis levels next year, according to an emerging industry consensus, indicating rising confidence in an economic recovery led by China and other fast-growing markets, reports the FT. The boom in capital expenditures, across oil, natural gas and agribusinesses, comes as prices jump for commodities such as copper, iron ore, crude oil and wheat. It also raises the prospect of short-term bottlenecks in the already stretched supply of equipment and services, and project delays as costs rise. Global mining expenditure is set to hit a record $115bn-$120bn next year, above the peak of $110bn set in 2008, according to a survey of industry executives and consultants.

Xstrata threatens Australia projects

Global miner Xstrata threatened on Thursday to scrap $5.4bn in coal and copper projects in Australia, blaming Canberra’s new 40% resources profits tax and bringing to more than $20bn the value of shelved new developments, reports Reuters. Xstrata, which last month halted some copper exploration in Queensland, said it was also suspending A$586m ($496m) of spending on its Wandoan thermal coal project and also a A$600m expansion of its Ernest Henry copper mine.