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Making deals in Nevada..........
i think silver is right about a bounce and ive been trying to bring my cost down to around 7 cents a share. that seems to be a good target for a bounce if we get one.
with any news from chris we will get a bounce out in a V type pattern maybe back to 5-7 cents which would be pretty good from current levels. i dont think it will happen until next year though and you must realize liquidity is nil.
its cool, my guess is that if we had good news we would of had a PR about it so i expect nothing until next year. so we will see tax loss selling and subzero share price. its not going to be fun but there is always hope. paydirt
good morning mike.......
i always seem to be the one getting blamed for selling if its not LTT. its funny, the entire time ive been here ive never seen you buy 1 share of this stock. ofcourse that was a very wise move in retrospect. no at this point one either dies here with it or chris comes out of the shadows and does something to make things better. its really a bad bet at this point but its all we have now. oh and have a great TURKEY DAY !!!!!
The #1 question as of right now is...
will chris step up to the plate and turn SGGV into something?? thats the gamble all of us have left here. its going to be interesting to see what happens. the old man gave him the tools to do it...will he though??
Good morning mike........
its trading just about at whats in the bank. its not accounting for the mine or the corp shell or anything else right now. as far as hearing from the company or anyone else.. no emails or phone calls answered for me.
Gee wiz guys i didnt mean to stir up a chit storm.......
this has been a huge disapointment to me and im sure everyone owning shares including the family up north. i still think this will be ok (maybe not what we thought as far as huge but some) and call me crazy but i added some of those shares around a penny. its all up to a young man thats been working under his dads shadow for years and could make this his mark on the world. its all here to do it, clean, reporting, money in the bank, contacts and not alot of shares out. i still holdout hope and not ready to give it up yet. good night all, paydirt
G spark tell us what you really think :) i guess this could all be blamed on the price of phosphate but really what bothered me was the retraction of the amount of phosphate in the deposit from 58 mil tons down to 2 mil tons. that guy signed off on that report. i think if someone wanted to contact a lawyer they would have a good case for class action on that alone. now if they didnt get the permit for the mine then all that cost went down the poop shoot and all is lost there too. this really has been a disaster. no wonder roul said fk it...
It seems to me we should be hearing about the mining permit which was due to expire nov 10 2014. I wonder what direction we will be headed and what they plan on doing with that 1.7 mil sitting there? gla paydirt
MORE GAS...........
China Moves To Ramp Up Shale Gas Production: Fracking; Chinese Natural Gas Demand and Projections; Chinese Gas Imports
Project Finance NewsWire
The National Energy Administration published a set of guidelines for the shale gas industry in late October. The guidelines follow publication of a five-year plan for development of shale gas last year.
China considers shale gas development of national strategic importance, and more financial support for exploration and development of shale gas is expected from governments on both the local and national levels.
Environmental pressures are forcing large Chinese cities to switch from coal and oil to natural gas for heating and generating electricity. Beijing has already completed most of its transformation. However, this has put strains on gas supply. The three main gas suppliers in China — CNPC, Sinopec and CNOOC —lack the production capacity to meet the skyrocketing demand. China is expected to face a gas shortage this coming winter of more than 10 billion cubic meters.
The Chinese authorities are now blocking any further fuel switching to gas without first obtaining approval and sourcing the gas supply. The supply to some industrial users has been limited and even terminated in areas with the worst shortages, such as northern and eastern China. This is one reason why there is such strong interest in shale gas. The Chinese have watched the shale gas boom in the United States with great interest. China has the largest technically recoverable shale gas reserves in the world.
Output Figures
There have been two rounds of public tenders for shale gas. CNPC and Sinopec have already reached production targets in their respective blocks.
CNPC has built two national shale gas demonstration areas in its blocks in Changning, Weiyuan and Zhaotong. Its total investment to date is above RMB4 billion. Well #201 in the Changning block is the first commercial horizontal shale gas well in China.
CNPC had completed 44 wells by the end of August, 20 of which are horizontal wells. Of the 44 wells, only five of them can reach production levels of 100,000 cubic meters per day. The total annual commercial gas production in these blocks is around 60 million cubic meters. According to CNPC’s plan, gas production in the two demonstration areas will be 2 to 3 billion cubic meters a year, of which 1.5 billion cubic meters will be commercial gas.
Sinopec has increased its production estimate dramatically to 4 billion cubic meters a year by 2015 from its blocks in Fuling in Sichuan province and the blocks have been approved as a national shale gas demonstration area. The 30 test wells in the Fuling block should produce 500 million cubic meters in 2013. The daily production of one of the wells reaches 547,000 cubic meters, which is the highest output of all 150 existing shale gas wells in China as of September. These output figures should help
Sinopec greatly out distance the other major players in shale gas such as CNPC, CNOOC and Yanchang Oil.
China has set a goal of producing shale gas at a rate of 6.5 billion cubic meters a year by 2015.
Impediments
Most winners in the first two rounds have not begun their drilling work yet due to funding or technology limitations.
Funding and technology are still big barriers to entry. The new national guidelines require that anyone engaging in exploration and development of shale gas in China must have the financial capability to do so, sound financial standing and a sound accounting system. One of the reasons that winners in the first two rounds of tenders have not moved quickly is that they are mostly local state-owned enterprises without strong financial capability. They do not have the financial means to support high-risk exploration. It will be difficult for them to find a financial footing in the short term since China does not have a well-developed project finance market. Many are trying to raise money by transferring part of their interests in exploration blocks or by making other arrangements such as joint ventures or production sharing arrangements.
The new guidelines emphasize that the government encourages multiple investors, including private enterprises, to invest in shale gas exploration. In the second round tender, two private companies were granted blocks in Guizhou province that have the most difficult geographic conditions among all the offered blocks that round. One of the two private companies has been trying to transfer its rights due to lack of funding and exit the industry, but no buyer wants to take on the challenge. The company faces a potential loss of all its investment if it cannot find a buyer. The government will get the blocks back for free if the holders breach their investment commitments.
No private companies are allowed to do conventional oil and gas exploration in China. The technology related to conventional gas exploration is controlled by state-owned oil and gas companies. These companies have developed technologies that are specially adapted to the geology in China. Although private companies can obtain the rights to shale gas blocks, they have to rely on state-owned companies for access to technology, and the state-owned companies charge as much as foreign technology owners for licenses. Foreign technology holders have not been interested in licensing to private companies, preferring instead to partner with the major state-owned oil and gas companies.
The technology and equipment to be used in shale gas exploration receives a lot of attention in the new guidelines. China is interested in developing technologies that are suited for Chinese geological conditions and then keeping the intellectual property rights in the hands of Chinese companies. However, it is also interested in using advanced new technologies from places like the United States to increase the success rate in exploration.
The new guidelines encourage local manufacturing of equipment in order to save on cost and reduce dependence on foreign companies. Due to the limited research and development budgets of Chinese companies, the government established a National
Energy Shale Gas R&D Center in 2010 as a department under CNPC’s research institution in Langfang in Hebei province. The center needs to be made independent from CNPC. Otherwise, CNPC might be the only beneficiary of the center.
Foreign companies that possess advanced shale gas technologies are encouraged to cooperate with Chinese companies so that the Chinese companies can learn about the technologies and gain operational experience. At a China mining conference in November, officials from the Ministry of Land and Resources welcomed foreign investors who can enter the industry through cooperation with Chinese companies.
In the short term, there are not likely to be many private players in shale gas. Although shale gas is a new and open industry, it is still bound by the old regimes in oil and gas. Private participation may rise along with the energy industry reforms in China, but the reforms will take a while. Compared to foreign investors, private companies are in a much weaker position in terms of funding and access to technology.
Gas Shortage
Gas consumption is increasing by around 15% a year in China. China has been a net importer of gas since 2007. Gas imports accounted for 28.9% of Chinese gas consumption in 2012 and are expected to account for 35% by 2015 when 18% of the population, equal to 250 million people, will use gas. Currently, gas is only 5% of energy usage compared to the average international standard of 23.8%. Chinese gas consumption increased to 107.5 billion cubic meters in 2010 from 24.5 billion cubic meters in 2000. Gas consumption is growing currently by 20 billion cubic meters a year. At this rate, total consumption will be 230 billion cubic meters by 2015 and 350 to 400 billion cubic meters by 2020.
By 2015, domestic gas supply will be around 176 billion cubic meters, of which conventional gas will be 138.5 billion cubic meters, coal-to-gas 15 to 18 billion cubic meters and coal-bed methane 16 billion cubic meters.
China is planning to build 39 coal-to-gas projects with total production of around 176.5 billion cubic meters per year. This plan has come in for criticism because of the carbon emissions, high water consumption and pollution.
New rules for coal-bed methane were published in September. The estimated annual grant to this industry will be RMB7.5 billion. Despite this level of government support, most of the coal-bed methane producers have not achieved their production goals this year.
The rest of the 6.5 billion cubic meters will be filled in by shale gas, according to the national shale gas plan released last year.
The shortfall between demand and domestic supply will be filled in part by importing gas through pipelines between China and central Asian countries, Russia and Burma, as well as by sea shipment. China has signed import contracts for gas that will deliver 93.5 billion cubic meters in 2015. Russia will supply another 38 billion cubic meters of gas to China annually beginning in 2018 for 30 years. During Chairman Xi’s visit to Turkmenistan in September, the two countries signed an agreement for Turkmenistan to supply 65 billion cubic meters of gas a year starting in 2020.The China-Burma gas pipeline was completed in late October. The third central Asia-China pipeline C will be completed at the end of this year and pipeline D is in design now.
Matching supply to demand will remain not only a challenge, but also a risk to domestic shale gas producers. Considering the increase in other alternative energy supplies (such as wind and solar) and projected rate of growth in the Chinese economy, the oversupply of gas like in the United States might happen in China in 10 to 15 years. According to the new shale gas guidelines, shale gas prices at the well will be determined by the market. However, the retail price is still regulated. Gas prices for residential users are expected to remain stable. Retail prices for industrial users can be increased by 0.4RMB per cubic meter.
Shale gas has to compete with conventional gas. The shale gas extraction cost is around RMB1.40 per cubic meter, which is more than the costs to produce conventional gas of RMB1.28 per cubic meter in Sichuan province and RMB1.00 per cubic meter in Xinjiang. How to reduce the extraction cost will be a challenge for shale gas to be competitive.
Another big cost in moving shale gas to market is the cost of connecting to pipelines. CNPC has built and controls 70% of oil pipelines and 90% of gas pipelines in China. Recent corruption scandals involving CNPC have led to a debate on whether the pipelines should be removed from CNPC. The National Energy Administration published draft opinions for public comment in late October proposing that the pipelines should remain with CNPC. However, the pipelines and other related infrastructure are supposed to be open to third parties on a non-discriminatory basis, and the National Energy Administration will enhance its regulation of pipelines.
It is hard to establish a forward price curve for gas. Shale gas producers will not have a predictable and transparent price until gas pricing reforms are completed in a couple years.
Environmental Challenges
Air, soil and water pollution are a major concern for the shale gas regulators. The new guidelines require that equal stress be placed on shale gas exploration and ecological protection. During drilling, fracturing and other processes, and in the construction of ground works, land occupation should be kept as minimal as possible.
Drillers have to recycle the drilling and fracturing fluid and any gas that escapes during production must be flared.
An environmental impact assessment must be conducted in accordance with the environmental law.
Chinese environmental laws are weak, as the deterioration of the environment in the past 35 years proves. China lacks the assessment technologies it needs to evaluate the effects of shale gas exploration on the environment. It will be difficult for the environmental authorities to implement the new guidelines formulated by the National Energy Administration.
Shale gas exploration is forbidden in natural preserves, scenic spots, areas that provide drinking water and geologic-disaster-prone areas.
Opportunities
Investors should keep an eye on the full industrial chain related to shale gas.
Equipment is one of the reasons that drilling wells costs so much in China. China has no ability to manufacture most of the equipment or its own equipment cannot meet the technical and environmental requirements. CNPC and Sinopec have some alternative equipment used in conventional gas or oil exploration that could be adapted for use in shale gas exploration. Some equipment cannot physically be transported to sites due to road and other geographic limitations. China has set a goal of developing shale gas equipment that is suitable for the geological conditions in China and that is light, can be carried by vehicles, is easy to transport and is low in pollution and cost.
By 2020, assuming that shale gas production reaches 60 billion cubic meters a year, 40,000 wells will need to have been drilled and the total equipment demand will be around RMB200 billion. In the following nine years, the demand for shale gas equipment is expected increase by 50% annually. By 2020, demand for shale gas equipment will account for one fifth of total oil and gas equipment needs.
Foreign investors need to move quickly if they want to build market share. The Hong Kong-based TSC Group, a one-stop solutions service provider to the oil and gas sector and a highly-respected manufacturer of drilling equipment, has committed to start its third marine and shale gas industrial base of 100,050 square meters in Qingdao in Shandong province soon. TSC aims to achieve US$1 billion in revenue by the end of 2016.
The third round public tender for shale gas is expected to be announced in 2014. The tender procedure and requirements for participants are expected to be revised dramatically with the goal of encouraging more private and foreign investor participation in the bidding.
Due to environmental concerns, the proposed shale gas blocks will be limited to Sichuan, Chongqing and Hubei. The shale gas rich areas such as the Erdos basin may not be included in the proposed blocks list due to its weak ecological condition and shortage of infrastructure.
New measures, such as new tax subsidies, are expected to be issued in the near future for shale gas. The new measures will be aimed at increasing foreign investor interest in the sector.
There are multiple potential points of entry for foreign investors. They need not limit themselves to exploration. Shale gas will be a test laboratory for experiments with market pricing. The Chinese government is trying to withdraw its “visible hand” from the economy as quickly as possible.
IT SEEMS OUR NEW CEO IS VERY.........
active in oil and gas in china and this could be a new area of investment for us.....
Chistopher J. Tsakok, B.Com., MBA,CFA
Chris has been working in the investment and corporate finance industry. He has conducted research in numerous industries and companies involved in the oil and gas, mining, technology, alternative energy, biotech, and other industries, many of which are based in China. He is also a Director of Richco Investors Inc. He holds a Bachelor of Commerce, with a specialization in Marketing, from the University of British Columbia and an MBA in Investments, Finance, and Global Asset Management from Simon Fraser University. He has obtained the Chartered Financial Analyst (CFA) from the CFA Institute located at the University of Virginia.
*****NATIONAL SECURITY*****
you have a very good point here. if this proves to be an attack by folks trying to keep this tech from being used this case will be fast tracked to the head of the investigative channels!!! looks like a few folks on this board will be investigated too!!!
in the immortal words of "John Malkovich" ****LOVE YOUR WORK****
sent three today. touching on update, shareholder base and float, only public message board is here. anyhow im kinda excited again i sure hope this guy wants to crank this company up making it his flagship money shaking booty call.....its all here to bake the cake with and from his resume it looks like he is just the guy to do it... paydirt
i think i get it... i had to google it :) anyhow look what that email you sent did!!!! paydirt
gm jazzpa, lets hope this guy wants to make some money with this nice clean reporting, money in the bank, asset holding, strongly held company!!!!!! i guess mr.R was getting abit old and had alot of things going on besides this so i welcome the change. gl everyone, paydirt
we may see some action now......
Chris has been working in the investment and corporate finance industry. He has conducted research in numerous industries and companies involved in the oil and gas, mining, technology, alternative energy, biotech, and other industries, many of which are based in China. He is also a Director of Richco Investors Inc. He holds a Bachelor of Commerce, with a specialization in Marketing, from the University of British Columbia and an MBA in Investments, Finance, and Global Asset Management from Simon Fraser University. He has obtained the Chartered Financial Analyst (CFA) from the CFA Institute located at the University of Virginia.
hi mike, yeah when ever I see a story about fert i post it for chits and giggles. I can understand everyones frustration with the waiting game, the best I can say is if prices of phosphate held up we would all be rich now but instead we wait!! I wish whats his nuts would just sell all his stock at once instead of the slow drip bs!! I wonder if anyone has had any contact with mr R??? I have to think that he isn't very happy sitting on his thumb like we are. owell better times ahead I hope, take good care, paydirt
Fertilizer Demand Fuels M&A as OCP Buys Stake: Corporate Brazil
By Gerson Freitas Jr. Jul 9, 2014 4:00 PM PT
Fertilizantes Heringer SA, the Brazilian crop-nutrients maker posting the best earnings growth among producers worldwide, is planning an investment spree to protect its market share from larger competitor Mosaic Co. and Yara International ASA.
Heringer is selling as much as 10.5 percent of the company to OCP Group for up to 145 million reais ($65 million), representing a premium of about 250 percent, the Brazilian company said last month. The deal will give Heringer part of the capital it needs to invest in new plants and increased access to the commodity made by Casablanca-based OCP, the world’s biggest phosphate exporter.
OCP is claiming a stake in Brazil to take advantage of booming demand for fertilizers at a time when Mosaic and Yara are also snapping up assets, driving a consolidation in the industry. Brazilian farmers, which import about two-thirds of their supplies, are buying crop nutrients at a record pace after prices fell and local currency strengthened.
“Brazil is the world’s fastest growing market for fertilizers,” Heringer Chief Executive Officer Dalton Carlos Heringer said in a interview by phone. “The deal will give us a safe channel with a supplier who is also interested in taking part in it.”
Ebitda Growth
Heringer’s earnings before interest, taxes, depreciation and amortization more than tripled in the first quarter from a year earlier, the most among 70 peers with annual sales above $1 billion compiled by Bloomberg. Its shares have rallied 21 percent since the OCP deal was announced on June 11, compared with a 1.8 percent drop for the benchmark Ibovespa index.
Fertilizer sales in Brazil rose to a record in the first five months of 2014 as international prices fell because of rising global supply combined with a stronger Brazilian currency. Soybean farmers, who buy about a third of the fertilizers used in Brazil, are expected to grow a record crop this year as Chinese demand for animal feed remains strong.
Fertilizer sales in Brazil are expected to end the year at a record, Morgan Stanley analyst Javier Martinez Cerdan, who rates Heringer the equivalent of a buy, said in a research note on July 2. He said he sees “a positive trend in prices and a more rational market following recent consolidation.”
More Deals
Plymouth, Minnesota-based Mosaic CEO Jim Prokopanko said in May he’s considering more acquisitions after agreeing to buy Archer-Daniels-Midland’s fertilizer distribution business in Brazil and Paraguay for $350 million a month earlier. Oslo-based Yara bought Bunge Ltd.’s operations in December 2012 for $750 million.
OCP agreed to pay 27 reais a share for the stake in Heringer, more than three times the closing price the day before the deal was announced. OCP offer implies an enterprise value of 7.4 times Ebitda, Morgan Stanley said. That compares with a ratio of 9.9 for Mosaic and 8 times for Yara.
Heringer is investing about 50 million reais in two new mixing plants in Rio Grande do Sul and Bahia states that will start in early 2015, the CEO said.
“We expect to increase our participation in the soybean market through these plants,” Heringer said. The company controls about 17 percent of Brazil’s fertilizers market, in line with Mosaic and behind Yara’s 25 percent stake, according to Morgan Stanley.
Heringer said the cycle of consolidation is almost over as four companies now account for about three-quarters of the domestic market.
“The best bet is Brazil’s market will continue to be supplied by four or five companies,” he said.
Historical Short Selling Data For IMSC
Date
VolShorted
High
Low
Close
ShortVol
RegularVol
Jul 03 78.92% 1.17 1.09 1.15 422,401 535,235
Jul 02 53.39% 1.10 1.03 1.10 58,948 110,400
Jul 01 46.07% 1.09 1.04 1.05 84,122 182,592
Jun 30 36.21% 1.07 0.99 1.04 140,337 387,512
Jun 27 52.87% 1.00 0.95 1.00 60,309 114,063
Jun 26 57.79% 0.97 0.95 0.97 62,455 108,073
Jun 25 40.97% 0.98 0.93 0.96 24,300 59,310
Jun 24 55.57% 0.94 0.92 0.93 18,950 34,100
Jun 23 29.56% 0.95 0.92 0.93 15,366 51,991
Jun 20 28.37% 0.95 0.93 0.95 8,200 28,900
Jun 19 59.31% 0.93 0.90 0.93 20,046 33,796
Jun 18 40.90% 0.95 0.92 0.95 19,100 46,700
Jun 17 23.02% 0.94 0.92 0.94 15,800 68,630
Jun 16 67.12% 0.99 0.94 0.94 38,728 57,703
Jun 13 53.73% 0.99 0.92 0.99 54,517 101,468
http://otcshortreport.com/index.php?index=imsc&action=view#.U7X318JOX5A
at this point mike I think I would tickle raouls nuts if it would make the stock go up:)~
hey Mike, do you think L2T is done selling? there really hasn't been any volume to speak of. find some money in the seat cushions and double down ;)......
Hi "E", ive been there already. very cool site and informative. I know you run money and are pretty deep here. I followed you into that bomb outfit, not a lot but it looks pretty good there. this one takes a heart of gold and a cast iron gut, but I think we are going to be just fine. anyhow TC for now, paydirt
Hi Fred, ask him if they are looking at any other investments or projects? maybe they could just start a good weed crop there :)...... lotsa good fertilizer...
I agree totally..... this is pretty much a turn key operation so they can come in a start up at the drop of a hat. also it doesn't hurt to have close to 2 mil. in da bank either... and remember we have a stock pile of ore at they ready with a new wash plant also. so all things considered.... we are looking good when the price goes up, which should not be too much longer...as always...gla...paydirt
Meat is the new coal — and what that means for potash and phosphate
Posted on June 9, 2014 by Robin Bromby
Last week, according to the Friday June 6 Commodities Weekly bulletin from Deutsche Bank, all commodity sectors posted negative returns. With one exception: livestock.
Then, on Saturday, The Financial Times printed this sentence” “Meat is the new coal”. They were reporting how China is buying anything connected with pork production (including, last year, the biggest U.S. pork producer Smithfield Foods for $7 billion) and, thanks also to China, Australian beef exports quintupled in 2013. In other words, food supply to China is going to figure as critically as mineral exports.
China’s enormous appetite for food is the subject of a special section in the World Bank’s latest China update, which showed that between 1980 and 2009 fat intake in China nearly tripled from 34 grams per person to 96g. And this was due to greater consumption of livestock products.
But what the World Bank report does not do is examine the implications of this for fertilizer, and potash and phosphate in particular. The report does mention in passing that “production of livestock-based food requires far greater resources”, but, in essence, what is required is that more grain is produced to feed the animals or better grass is grown. That requires fertilizer, and as the years go on even greater amounts of it.
Some sceptics question just how much grain needs to be produced to help animals develop, but the evidence is impressive. In 1997, researchers at Cornell University estimated that if the grain fed to livestock in the U.S. were be consumed directly by people then it could feed 800 million folks. In 2003 the American Journal of Clinical Nutrition published a study showing that 2 billion people had a meat-based diet, and 4 billion did not, mainly because the latter could not afford it or did not have the resources to raise livestock. (And, of course, more of those people relying now on non-meat food, will make the switch as their living standards rise.) The study showed that U.S.livestock consumes seven times the amount of grain than does the country’s human population. And the Washington-based International Food Policy Research Institute says is takes 8kg of grain to produce 1kg of beef, 2kg for 1 kg of poultry meat.
(This is just not about livestock, though. According to the World Bank Chinese vegetable production is projected to grow from 308 million tons in 2012 to 349 million tonnes in 2020; fruit output will rise from 162 million tons to 193 million tons over the same period. Some of those vegetables and fruit lines will require special fertilizer in the form of sulphate of potash.)
From 1978 to the present day total calorie intake in China has gone up almost 50%, a rise faster than the world average. Calorie consumption per capita in China is about the same as in Japan and South Korea, but still lower than in the U.S. and the European Union. Protein intake has also nearly doubled with 75% of that increase ascribed to consumption of meat.
Producing meat costs. The bank shows that China’s cereal consumption expanded three-fold between 1980 and 2009, two-thirds of that attributed to rising meat production.
You can see why imports into China are growing. Self-sufficiency in grain has dropped from 92% in 2010 to 88% in 2012. China has shifted from being a net exporter of corn to a net importer. In 2012, 6.2 million tons of fresh milk in 2012 and 700,000 tons of meat (pork, beef and mutton) were purchased from abroad. “Growing demand for higher value meat, eggs and dairy products present challenges to the domestic supply of animal feed, in particular feed grains, rising demand for which will pressure China’s overall food demand and supply balance,” says the World Bank report. It predicts that domestic production shortfalls will widen further, particularly as they relate to soybean, corn, edible oils, sugar and dairy products.
For both Chinese farmers, and foreign ones who will be filling the shortfalls in Chinese domestic production, this poses a challenge at a time when increasing urbanisation and dwindling arable land means yields are going to need to rise substantially. As we never tire if pointing out on Investor Intel, all roads will lead back to fertilisers. Eventually.
BHP to change tack on China
June 6, 2014 (Source: The Australian) — BHP Billiton chief executive Andrew Mackenzie has flagged that the major miner could “reshape” its key commodities portfolio to take advantage of the changing Chinese economy.
In a briefing in Beijing, Mr Mackenzie also admitted the company had not focused sharply enough on its underlying cost base during the iron ore boom over the past five years.
Mr Mackenzie concluded a 10-day trip to China, South Korea, India and Japan this week, meeting BHP’s major customers in the region, which are primarily steel mills.
The mining giant has forecast that China’s steel production will peak at 1.1 billion tonnes a year in the next decade, despite the current economic volatility. Crude steel production in the past year was almost 780 million tonnes.
China makes up 30 per cent of BHP’s global sales, and is its largest market outside of Australia.
Mr Mackenzie said he was keen for the company to remain in a strong position to take advantage of China’s future industrialisation and the ongoing urbanisation rate, which stands at a generational high.
However, he admitted BHP may have to make some changes to its asset portfolio to benefit as China switches from being a construction-led to a consumption-driven nation.
Its economy grew by 7.7 per cent last year, its slowest rate in more than a decade. The government has an official growth target of 7.5 per cent this year.
The World Bank said yesterday that it was confident China would reach its growth target this year, especially if the government was ready to order stimulus measures to ensure the target was met. “The prospect of growth falling below the government targetwill likely trigger accommodative fiscal and monetary policies,” it said.
“These measures should help the authorities to reach the indicative growth target of around 7.5 per cent in 2014, but will likely add to current imbalances and vulnerabilities.”
Mr Mackenzie said: “We see a Chinese economy gradually shifting from construction to consumption and so will we transition.
“We imagine we will continue to creep our exports of steelmaking materials like metallurgical coal and iron ore, but we’re much more likely to make major investments in what we feel are the next phase of China’s growth in energy and in food.”
He highlighted BHP’s potash division as one area of likely future growth, to take advantage of China’s growing food and agricultural demand.
However, Mr Mackenzie said acquiring new assets to add to the current “futuristic” commodity portfolio would not occur. “Buying other companies is not in my strategy,” he said.
“We are continuing to drive this company in the direction ofincreased productivity, shareholder value, and have the right diversity.”
BHP Billiton last month flagged that its Nickel West operations in Western Australia were “under review”, hinting that it was keen to offload the asset, which analysts have valued at $US450 million ($484m) at least. It said the review of the business would include the potential for a full or part sale.
Mr Mackenzie said that BHP Billiton would strip out $US5.5 billion worth of productivity gains across each of its businesses, after admitting that costs had spiralled during the iron ore boom.
my gosh "LOL" we have a monster on our hands with all them coming in!!! heheheheheh, paydirt
my thoughts exactly. it says right there that its sterling and if its true and they bought some shares its a positive. i guess ya just never know now in the land of oz trading and the group is from jersey so take that for what its worth, paydirt
Heres the whole filing....
http://ih.advfn.com/p.php?pid=nmona&article=59004285
Not much to go on with that 10k, sure hope we get a PR now, Cheers, paydirt
Hi Mike, can you explain whats up with this fund SEC gobbledegook?
Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (n-q)
Date : 08/29/2013 @ 3:17PM
Source : Edgar (US Regulatory)
Stock : Sterling Group Ventures, Inc. (QB) (SGGV)
Quote : 0.08 0.0 (0.00%) @ 10:12AM
Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (n-q)
Print
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-22310
FactorShares Trust
_______________________________________
(Exact name of registrant as specified in charter)
25 Deforest Ave., Suite 203
Summitt, NJ 07901
___________________
Good morning Mike, well that is true but I always get some comfort knowing that the same guy in control of China Gold is in control of us and that is worth its weight in GOLD!!! anyhow with this one you have to get something from somewhere to keep you going when things are quiet and no word is out there. Cheers, paydirt
Nice wright up today on China Gold...
http://seekingalpha.com/article/1575402-copper-bulls-should-consider-china-gold-international?source=email_rt_article_title
Hope everyone is having a good summer, TC all, paydirt
Hi Just, I looked at the chart and in 2010 they were exactly where we are now then it shot up to 2 bucks and change in about 4 months. I am hoping for that kind of move here. Gl, paydirt
Hi Mike, yeah it cant happen fast enuff.... I am getting a little tired of waiting myself :(~~~~
The Big Picture.............
Potash investors should focus more on global population than market trends
Posted on July 19, 2013 by Alessandro Bruno
food-crisis-worldThere are few commodities that have been as volatile and as ripe with contradictory reports as potash over the past year. The problem is that potash investors have been spoiled and perhaps too greedy as its price rose to USD$ 900/ton from averages of USD$ 100/ton merely ten years ago only to settle at above USD$ 400/ton in the past year. The highs were reached as a result of significant commodity speculation in 2007/2008 and fast rising oil prices, which prompted a veritable food crisis in many parts of the world. The potash high prices were simply unsustainable; indeed, they became unaffordable in many of the areas of the world where potash demand has been rising fastest. The lower price is actually a good thing.
The North American and Russian potash ‘cartels’ have been adding their own pressure on potash pricing to discourage new players such as BHP Billiton from coming in to disrupt their market. Nevertheless, the most important result of the potash ‘rollercoaster’ of the past decade is that the potash industry itself has become more important. The potash market itself has also expanded and many areas of the world where the use of potash and mineral fertilizer was virtually inexistent now represent some of the best long term opportunities.
Potash has risen to such a prominent position as a commodity that its fortunes can prompt market rallies and market drops in key stock markets such as the Toronto Stock Exchange (TSX). This is precisely what happened over the past week as BNN blamed the drop in shares of PotashCorp (TSX:POT, NYSE:POT) on July 17 for the overall drop in the TSX as “investors raised new concern over supply and demand globally for potash.” The PotashCorp drop was not even prompted by its own good or bad results. PotashCorp suffered a reflected negative sentiment as its rival (but fellow CANPOTEX member) Mosaic Co announced lower than expected earnings. This fickleness has worked both ways. Last January, higher than expected earnings from Agrium Inc prompted a major rally at the TSX.
Investors who have been following potash may rightly feel confused. Indeed, the monthly – if not weekly – escapades of potash prices should be ignored. The focus should be on the wider phenomenon of population growth, as reminded by World Population Day last July 11. That occasion served to remind us that the current world population of 7.2 billion could add another one billion people by 2025 and reach 9.6 billion by 2050. Given that evolution that not work that fast, there is a very good chances that such dramatic population increases will require equally dramatic food production increases. Indeed, rapid population growth and increasing wealth in emerging markets has been fueling consumer demand worldwide. Potash investors should take advantage of the major trends in the global population development.
Rapid population growth will take place in emerging markets mainly where, says the World Bank, the middle class will almost triple with an income of at least U.S. $ 10 per day between 2000 and 2030. A consumer revolution has already started in the so called emerging markets, one that is no longer conceivable in Western industrialized societies. Agricultural commodity such as potash companies are in the frontline of his new demand trend and in the next few years they can expect tremendous growth and earnings opportunities, from which patient investors will benefit. The consumer revolution in China is not only desirable; it has become a matter of political necessity to promote as rising incomes and awareness levels are prompting people to put pressure on the government to curb corruption, toughen environmental standards and increase salaries. But it’s not just China. By 2030, the World Bank estimates, global demand for food will increase 50%.
The increase is not just from population growth; it is a result of the middle class phenomenon, which has already been altering eating habits to diets requiring a more fertilizer intensive agriculture. Evidently, this offers great opportunities for fertilizer producers such as Potash Corp, Uralkali, Mosaic and the juniors that are emerging to meet specialized niche markets based on geographic advantages such as Allana Potash (TSX: AAA | OTCQX: ALLRF) in Ethiopia and with easy access to address African demand and India or IC Potash (TSX: ICP |OTCQX: ICPTF) with its low cost Sulfate of Potash product, while companies such as Potash Minerals (ASX: POK) or Magna Resources (CNSX: MNA) operating in Utah will be able to address gaps in demand the still enormous US market. The main advice to potash investors is to be patient.
"Widespread Panic"
I nearly fell off my paint bucket over that one!!! G.L.A paydirt
Hi Refill, yes its hard to wait for news and I wish things moved faster but we are in good shape. I think the biggest reason for Mr R. being so quiet is because he got in hot water once before and is very careful what he does as far as PR's and such. I just hope everyone is enjoying summer and having lots of BBQ's and stuff. Good luck to you too, paydirt