BHP Billiton (BHP) CEO Marius Kloppers announced the company has written down 3.3 billion on its gas and nickel assets.
Its gas assets in the Fayetteville shale-gas holdings of the company had a charge of $2.84 billion against it, while its Western Australia nickel sites were written down by $450 million.
The company said Klopper and petroleum business CEO Mike Yeager won't receive bonuses this year as a consequence of the writedowns. Both men requested that those actions be taken.
Companies jumping onto the shale gas bonanza have taken hard hits after the abundance of natural gas has driven the price down to 10-year lows recently.
BHP will continue to struggle with this because of the high price it paid for the gas assets, which will require a significant rebound in gas prices before it turns a profit.
The good news for BHP is the writedown was not as much as most had been looking for, coming in at the lower end of analysts' estimates, which were in a range of $3 billion to $5 billion.
Kloppers and Yeager are now moving drilling operations primarily to the Eagle Ford and Permian fields.
It is thought the company may seek to divest itself of its nickel business, but that would probably not work out well for them in a weak economic environment.
On the NYSE, BHP was trading at $67.8, up $1.78, or 2.69 percent, as of 10:33 AM EST.
Showing posts with label Nickel. Show all posts
Showing posts with label Nickel. Show all posts
Friday, August 3, 2012
Monday, October 25, 2010
Teck Resources (NYSE:TCK) Investment in Horizonte About to Pay Off?
In July Teck Resources (NYSE:TCK) sold its Araguaia nickel mine in Brazil to Horizonte in return for a 50 percent stake in the company. Now Horizonte is preparing a share sale in Toronto to raise capital to fund the project.
Other financing options include offtake agreements with nickel refiners and bank financing.
The Araguaia project has an initial resource of 60 to 70 million tons, and should produce a minimum annual volume of about 25,000 tons.
Nickel demand has shot up recently, with supply not being able to meet demand for the first time in five months, according to the International Nickel Study Group. The mine should be ready to produce in about 4 years. Drilling began on October 18.
Official numbers concerning actual resources will be determined in 2011, where at that time production costs and more accurate volumes will be known.
Once Horizonte has Araguaia ready for construction, Teck has an option to acquire the remaining shares in the company.
Other financing options include offtake agreements with nickel refiners and bank financing.
The Araguaia project has an initial resource of 60 to 70 million tons, and should produce a minimum annual volume of about 25,000 tons.
Nickel demand has shot up recently, with supply not being able to meet demand for the first time in five months, according to the International Nickel Study Group. The mine should be ready to produce in about 4 years. Drilling began on October 18.
Official numbers concerning actual resources will be determined in 2011, where at that time production costs and more accurate volumes will be known.
Once Horizonte has Araguaia ready for construction, Teck has an option to acquire the remaining shares in the company.
Tuesday, July 27, 2010
Teck (NYSE:TCK) Gets Half of Horizonte (LON:HZM), Horizonte Gets Araguaia
Teck Resources (NYSE:TCK) (TSE:TCK) did something it had hoped it didn't have to, and that was to offload its Araguaia nickel project in Brazil.
They've done that now, as Horizonte Minerals (LON:HZM) acquired the nickel project for an extremely cheap 50 percent stake in the company by Teck. Tecks' stake includes the deal for Araguaia, but still a great deal for Horizonte.
Debts from the global recession and crisis brought Teck to a place where they've had difficulty paying off gigantic debts they owe, and which they couldn't attain refinancing for after acquiring Fording Canadian Coal Trust a couple of years ago.
Their loss is Horizonte's gain, as they are getting the assets at a price of 0.7 cents a pound of nickel in the ground, far below the average 3 cents a pound usually asked for.
There will be at least 100 million tons of resource in the deal, and a high probability of it reaching 150 million tons, and at the high end could even reach 200 million tons.
With a 50 percent stake in Horizonte, as least Teck is able to retain a position in nickel, something they wanted to be sure to do, and the reason they've held back on selling the promising asset.
They've done that now, as Horizonte Minerals (LON:HZM) acquired the nickel project for an extremely cheap 50 percent stake in the company by Teck. Tecks' stake includes the deal for Araguaia, but still a great deal for Horizonte.
Debts from the global recession and crisis brought Teck to a place where they've had difficulty paying off gigantic debts they owe, and which they couldn't attain refinancing for after acquiring Fording Canadian Coal Trust a couple of years ago.
Their loss is Horizonte's gain, as they are getting the assets at a price of 0.7 cents a pound of nickel in the ground, far below the average 3 cents a pound usually asked for.
There will be at least 100 million tons of resource in the deal, and a high probability of it reaching 150 million tons, and at the high end could even reach 200 million tons.
With a 50 percent stake in Horizonte, as least Teck is able to retain a position in nickel, something they wanted to be sure to do, and the reason they've held back on selling the promising asset.
Thursday, July 15, 2010
Goldman (NYSE:GS) Raises Base Metal Forecasts for All Except Zinc
Goldman Sachs (NYSE:GS) increased its 12-month estimates for all base metals except zinc.
Zinc was dropped to $2,225 a metric ton, a plunge of 18 percent, because of demand falling in China and Europe. China especially has a robust domestic zinc industry, and that will keep them supplied longer than originally expected by Goldman.
Goldman maintained their preference for copper, continuing to say it's their favorite metal for the long term, based on declining inventory and what they believe will be a lower supply deficit throughout the next couple of years. They see copper prices rising to $8,050 a ton, a gain of 1.4 percent.
Nickel looks really good to the financial giant, as they see it surging to about $20,00 a ton, an amazing 167 percent gain if it happens. Nickel is primarily used in stainless steel to stop corrosion, and demand largely comes from property construction, so that will be a challenge in my mind to even come close to the gains they're talking about.
Aluminum price estimates were modest, with expectations they could rise to $2,225 a ton, a 2.5 percent increase.
Silver estimates for the next twelve months were to grow by 1.3 percent, to $22.60 an ounce, mostly on their belief gold will continue to rise, looking at $1,355 an ounce there.
Zinc was dropped to $2,225 a metric ton, a plunge of 18 percent, because of demand falling in China and Europe. China especially has a robust domestic zinc industry, and that will keep them supplied longer than originally expected by Goldman.
Goldman maintained their preference for copper, continuing to say it's their favorite metal for the long term, based on declining inventory and what they believe will be a lower supply deficit throughout the next couple of years. They see copper prices rising to $8,050 a ton, a gain of 1.4 percent.
Nickel looks really good to the financial giant, as they see it surging to about $20,00 a ton, an amazing 167 percent gain if it happens. Nickel is primarily used in stainless steel to stop corrosion, and demand largely comes from property construction, so that will be a challenge in my mind to even come close to the gains they're talking about.
Aluminum price estimates were modest, with expectations they could rise to $2,225 a ton, a 2.5 percent increase.
Silver estimates for the next twelve months were to grow by 1.3 percent, to $22.60 an ounce, mostly on their belief gold will continue to rise, looking at $1,355 an ounce there.
Wednesday, July 14, 2010
Nickel Prices Could Soar on Strong Demand, Low Supply
Prices for nickel could explode this year as demand may exceed supply by up to 40,000 metric tons in 2010, according to Sumitomo Metal Mining Co. of Japan.
Sumitomo's estimate is based, as with most other raw materials, on the demand from China, which is anything but certain at this time, especially with their efforts to cool their hot, urban property markets, which would have an impact on nickel demand.
Nickel is important in housing because about two-thirds of it is used as an anti-corrosion element in making stainless steel, which is used heavily in buildings and homes.
The question is how much demand from China falls, and how that differs in relationship to supply issues. Sumitomo believes the supply won't be able to keep up with demand, and that could raise the price of nickel substantially.
Supply disruptions in Canada have been another factor, but strike by workers in Canada is over against Vale SA, and that should ramp up supply, but it's questionable as to how much for the remainder of the year.
Toru Higo, general manager of the company’s nickel sales, noted China demand could surge by as much as 18.6 percent to about 510,000 tons.
Sumitomo's estimate is based, as with most other raw materials, on the demand from China, which is anything but certain at this time, especially with their efforts to cool their hot, urban property markets, which would have an impact on nickel demand.
Nickel is important in housing because about two-thirds of it is used as an anti-corrosion element in making stainless steel, which is used heavily in buildings and homes.
The question is how much demand from China falls, and how that differs in relationship to supply issues. Sumitomo believes the supply won't be able to keep up with demand, and that could raise the price of nickel substantially.
Supply disruptions in Canada have been another factor, but strike by workers in Canada is over against Vale SA, and that should ramp up supply, but it's questionable as to how much for the remainder of the year.
Toru Higo, general manager of the company’s nickel sales, noted China demand could surge by as much as 18.6 percent to about 510,000 tons.
Thursday, July 1, 2010
Industrial Metals Lead Commodities Down for Quarter
Commodities experienced their worst quarter in over a year, as industrial metals plummeted in price on an extremely weak U.S. economy, China urban property inflation concerns, and the sovereign debt crisis in Europe.
The worst of the industrial metals was zinc, which fell 25 percent for the quarter, its worst performance since the latter part of 2008. Nickel was much better, dropping 22 percent for the quarter, followed by lead, which was down 19 percent, copper declining 17 percent, and aluminum falling 15 percent.
Heading into the fourth quarter doesn't look much better for commodities, as estimates from Barclays Capital have prices dropping even more, according to a recent report, especially copper and aluminum, which are used heavily in building homes.
With the bottom falling out from the U.S. housing market after the tax break was ended, along with the Chinese battling property inflation in their urban areas, the demand for industrial commodities are under extreme pressure until those situations turn around, which they don't look likely to any time soon.
Gold will continue to be a strong performer, and silver will probably shine when measured against other industrial metals.
The worst of the industrial metals was zinc, which fell 25 percent for the quarter, its worst performance since the latter part of 2008. Nickel was much better, dropping 22 percent for the quarter, followed by lead, which was down 19 percent, copper declining 17 percent, and aluminum falling 15 percent.
Heading into the fourth quarter doesn't look much better for commodities, as estimates from Barclays Capital have prices dropping even more, according to a recent report, especially copper and aluminum, which are used heavily in building homes.
With the bottom falling out from the U.S. housing market after the tax break was ended, along with the Chinese battling property inflation in their urban areas, the demand for industrial commodities are under extreme pressure until those situations turn around, which they don't look likely to any time soon.
Gold will continue to be a strong performer, and silver will probably shine when measured against other industrial metals.
Monday, May 17, 2010
Citigroup (NYSE:C) Says Weak Economic Data Putting Downward Pressure on Funds
Citigroup (NYSE:C) analyst David Thurtell said the ongoing crisis in Europe, along with weak economic data is putting downward pressure on funds.
That has also resulted in commodities getting hammered, as zinc, aluminum, tin, copper and lead all fell on the London Metal Exchange, as fears over major cutbacks in spending by Europe and China is affecting the commodity prices.
Lead went as low as 10 percent to $1,740, it's largest fall since July 2009, tin was down 2 percent to $17,200 a ton. For zinc, it fell 10 percent to $1,840 a metric ton, a 10 percent decline, the worst fall since September 2009. Aluminum also too a plunge, down to $1,983 a ton, a 5.6 percent drop.
Europe is a major consumer of metals, accounting for 15 to 25 percent of all consumption of zinc, aluminum, lead and nickel produced in the world, and 20 percent of all copper.
That has also resulted in commodities getting hammered, as zinc, aluminum, tin, copper and lead all fell on the London Metal Exchange, as fears over major cutbacks in spending by Europe and China is affecting the commodity prices.
Lead went as low as 10 percent to $1,740, it's largest fall since July 2009, tin was down 2 percent to $17,200 a ton. For zinc, it fell 10 percent to $1,840 a metric ton, a 10 percent decline, the worst fall since September 2009. Aluminum also too a plunge, down to $1,983 a ton, a 5.6 percent drop.
Europe is a major consumer of metals, accounting for 15 to 25 percent of all consumption of zinc, aluminum, lead and nickel produced in the world, and 20 percent of all copper.
Wednesday, March 3, 2010
Rio Tinto (LON:RIO) Lands Indonesia Nickel Permit
Rio Tinto Sulawesi Nickel Mine
Rio Tinto (LON:RIO) has landed a nickel mining permit in Indonesia, the first approval under the new mining laws instituted by the country last year.
The permit is for the Sulawesi site, which holds an estimated 162 million tons of laterite nickel. Rio Tinto is expecting to spend around $2 billion to develop the mine site.
By about 2015, the company estimates it could produce 46,000 tons of nickel a year, and by a couple of years after that, nickel production at Sulawesi could go as high as 100,000 tons a year.
Rio Tinto Sulawesi Nickel Mine
Rio Tinto (LON:RIO) has landed a nickel mining permit in Indonesia, the first approval under the new mining laws instituted by the country last year.
The permit is for the Sulawesi site, which holds an estimated 162 million tons of laterite nickel. Rio Tinto is expecting to spend around $2 billion to develop the mine site.
By about 2015, the company estimates it could produce 46,000 tons of nickel a year, and by a couple of years after that, nickel production at Sulawesi could go as high as 100,000 tons a year.
Rio Tinto Sulawesi Nickel Mine
Wednesday, October 8, 2008
Commodities Drop to Lowest Levels in Year or More
Commodities remain bullish as a number of them hit their lowest level in a little over a year, while some dropped to levels that haven't been seen for about three and a half years.
Copper, which other base metals usually mirror, fell to its lowest levels since March 2006, falling to $5,250 a ton. Oil also continued its plunge as it almost leveled at $86 a barrel, falling as low as $86.05 a barrel.
Other base metals didn't even fare as well, with aluminum, zinc and nickel declining to levels not seen in over three years.
After the interest rate cuts corn did rebound settling at $4.275 a bushel on the CBOT, a 10.5 cent or 2.52 percent gain.
With a number of central banks cutting interest rates Wednesday, officials were glad to see prices fall, as concern about inflation have also been rearing its head.
Now that demand for oil has been dropping, Opec is said to be considering an emergency meeting to decide if it wants to cut back on production, possibly meeting in November instead of the scheduled late December date.
Even with low price levels, the bull run for commodities isn't over, and price levels will start to move again as nations and businesses start spending again.
Copper, which other base metals usually mirror, fell to its lowest levels since March 2006, falling to $5,250 a ton. Oil also continued its plunge as it almost leveled at $86 a barrel, falling as low as $86.05 a barrel.
Other base metals didn't even fare as well, with aluminum, zinc and nickel declining to levels not seen in over three years.
After the interest rate cuts corn did rebound settling at $4.275 a bushel on the CBOT, a 10.5 cent or 2.52 percent gain.
With a number of central banks cutting interest rates Wednesday, officials were glad to see prices fall, as concern about inflation have also been rearing its head.
Now that demand for oil has been dropping, Opec is said to be considering an emergency meeting to decide if it wants to cut back on production, possibly meeting in November instead of the scheduled late December date.
Even with low price levels, the bull run for commodities isn't over, and price levels will start to move again as nations and businesses start spending again.
Tuesday, March 4, 2008
Investors take Profits on Base Metals
Base metals dropped today on the London Metal Exchange, as investors took profits, with the majority of the commodity markets participating in a sell-off.
A number of metals ended up at close to the record range before cutting back later in the session.
“Supply disruptions made the fundamentals for some metals (gold, platinum, aluminium and zinc) look much better, which combined with the poor equity, property market and corporate paper market, convinced funds to go into commodities,” said BNP Paribas analyst David Thurtell.
Tin reached a new high before dropping again, reaching $19,375 a ton before fears on what Indonesia's response in battling against illegal tin mining would affect the metal. It ended the day at $19,050, an increase of $100 over what it closed at yesterday.
With most of the world's tin exports coming out of Indonesia, MF Global analyst Edward Meir said, “Tin's fundamentals look solid to us.
“The bulk of the world's tin exports come from Indonesia, and so the complex has a good chunk of its eggs in only one basket.”
Most dealers believe the sell-off was long overdue, and a correction was needed. They also said that this will be a short-term event, and prices should continue on an upward climb. Even so, with many turning to commodities as an inflation hedge, some are starting to think some metals are reaching a potential bubble, and will have to be watched carefully.
Most say we can't overly react and read into the cutback, as metals overall should be strong for some time.
Some metals shedding some of their weight were nickel, which dropped by $405, to finish at $32,845; aluminum decreased by $23, to end at $3115 a ton; lead fell by $70 to come in at $3365 a ton; and zinc declined by $45 to finish the session at $2780.
A number of metals ended up at close to the record range before cutting back later in the session.
“Supply disruptions made the fundamentals for some metals (gold, platinum, aluminium and zinc) look much better, which combined with the poor equity, property market and corporate paper market, convinced funds to go into commodities,” said BNP Paribas analyst David Thurtell.
Tin reached a new high before dropping again, reaching $19,375 a ton before fears on what Indonesia's response in battling against illegal tin mining would affect the metal. It ended the day at $19,050, an increase of $100 over what it closed at yesterday.
With most of the world's tin exports coming out of Indonesia, MF Global analyst Edward Meir said, “Tin's fundamentals look solid to us.
“The bulk of the world's tin exports come from Indonesia, and so the complex has a good chunk of its eggs in only one basket.”
Most dealers believe the sell-off was long overdue, and a correction was needed. They also said that this will be a short-term event, and prices should continue on an upward climb. Even so, with many turning to commodities as an inflation hedge, some are starting to think some metals are reaching a potential bubble, and will have to be watched carefully.
Most say we can't overly react and read into the cutback, as metals overall should be strong for some time.
Some metals shedding some of their weight were nickel, which dropped by $405, to finish at $32,845; aluminum decreased by $23, to end at $3115 a ton; lead fell by $70 to come in at $3365 a ton; and zinc declined by $45 to finish the session at $2780.
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