look-see fnv slw rgld
and in the mean time we watch & brief, and maintain sense of humor even as we discover why miner use a lot of four-letters word, the same word over and again, then once more and twice again ... :0)
From: J
Sent: Wednesday, July 24, 2013 6:23 AM
Subject: Re: Comments - Week of July 15
under the circumstance, ideally
gold rises,
silver goes ballistic,
economies go dire,
cities on fire,
south africa goes revolutionary
platinum goes scarce
confiscation commences in earnest everywhere where english common law is absent
australian dollar dives
to find mates, women of all ages decide they need to fix the slightest bit of imperfection in their dental structure
and they all come to hk island to mingle amongst the refugees imbibing in lang kwai fong after getting teeth fixed
then china announces the start of construction of the first of 50 singapore-dimensioned mega cities
ideally
and so we wait
as socially unconscionable as above scenario may seem, am of the belief that after the initial pain, the world shall give rise to a better future
amen
statement disclosing conflict of interest: ... oh, never mind, yes, am conflicted in some serious ways
separately from the above e-mail, some good news ...
online.wsj.com
Australian Dollar's Drop Boosts Miners
SYDNEY—Australia's iron-ore producers have staggered in the face of weaker prices, rising costs and anxiety over China's slowdown, but the recent sharp drop in the Australian dollar is helping them recover some swagger.
The longest slide for the country's currency since the financial crisis is boosting the bottom lines of large miners, such as BHP Billiton BHP.AU +0.97% and Rio Tinto, RIO.AU +0.37% as well as of smaller players, including Atlas Iron Ltd. AGO.AU -6.18% and Mount Gibson Iron MGX.AU -0.85% Ltd.. Many are expected to report earnings next month.
The Aussie has slid 11% in the past three months to around 92 U.S. cents after soaring above parity with the U.S. dollar in 2010 and trading near historical highs for much of the past three years.
The larger iron-ore producers, who tend to report results in U.S. dollars, are benefiting from the resulting sharp drop in Australian costs, such as wages and taxes. Their smaller rivals, meanwhile, are getting a boost when repatriating their U.S.-denominated earnings.
"We've had a period where the Aussie held up very strongly and really took some time to catch up with what commodities have done, so this is no doubt a positive," said Matt Riordan, a Sydney-based money manager at Paradice Investment Management. "The question is where the currency and commodity prices go from here."
Once the engine of Australia's economy, helping the nation stave off recession during the global financial crisis, the mining industry has been hurt by a sharp slowdown in prices of many commodities. That partly reflects cooling economic growth in China, Australia's biggest trading partner and the biggest buyer of its raw materials.
At the height of worries about a hard landing in China last year, iron ore's price fell below US$87 a metric ton. That was less than half the record of US$191.90 reached in early 2011 for the steel ingredient. Despite an uptick in recent weeks, iron ore's price is still about 17% below its high this year, which was reached in February. But in Australian dollars, the price has dropped just 7%. Iron ore currently is trading around US$131 a ton, according to the Steel Index.
"With today's exchange rate, it is 143 Australian dollars a ton" compared with around A$127 a ton three months ago, said Mount Gibson Chief Executive Jim Beyer. "The drop in the Aussie dollar is effectively giving us a A$16-a-ton free kick. That's very good news for us."
In recent months, global investors anticipating a pullback in monetary stimulus from Washington drove the U.S. dollar up against other currencies, but the gain against the Aussie was particularly sharp. UBS AG UBSN.VX -0.72% recently lowered its estimate for the Australian dollar to an average of 97 U.S. cents this year from an earlier forecast of US$1.04. Several big producers, including BHP, have canceled or delayed projects, closed mines and placed assets for sale in recent months as commodity prices fell.
For the smaller players, the main benefit from the Aussie's weakness has been to revenue.
"It goes straight to our bottom line," Mr. Beyer said. "Apart from diesel fuel, the majority of our costs are Australian-dollar based."
Mount Gibson last year estimated that a 10% drop in the Aussie could add as much as A$1 million to profit.
BC Iron Ltd. BCI.AU +3.09% Managing Director Morgan Ball said the softer currency helped the company pay lenders almost triple what was required last month.
BHP this year estimated that its annual profit could be bolstered by as much as US$110 million for each one-cent gain in the U.S. currency against the Aussie. That should ensure a significant boost to its earnings, given that the Australian currency has fallen from as high as US$1.06 this year. BHP and Rio Tinto announced record iron-ore production from their Australian mines last week.
There is no guarantee that the Aussie will remain near its current level or fall further, however, and iron-ore prices are vulnerable to further declines after a bumpy year so far.
Some commodity analysts have said they see iron ore slumping to US$90 a ton or lower as supply increases and China's growth continues to soften. UBS analysts have said they expect iron ore to average US$100 a ton between July and September, down from an average US$118 in the preceding three months. |
