Replies to post #4971 on The Rising Influence of Rising Affluence

[DewDiligence]

VALE sells thermal-coal assets in Colombia to GS consortium for $407M, but is keeping all of its met-coal assets:

http://www.reuters.com/article/2012/05/29/us-vale-coal-idUSBRE84S00N20120529

http://www.sec.gov/Archives/edgar/data/917851/000110465912040194/a12-11329_76k.htm

[DewDiligence]

HES is getting clocked today, but I don’t think it’s related to the transaction below, which seems rather neutral:

http://www.bloomberg.com/news/2012-05-30/shell-will-buy-hess-stake-in-field-off-scottish-coast.html

Royal Dutch Shell Plc will buy Hess Corp.’s 15.67 percent stake in the Schiehallion oil field and associated equipment, making it the largest holder of the project off the Scottish coast.

The deal is expected to close this year after it gets regulatory approval, New York-based Hess said in a statement today. Terms of the sale, which includes a stake in a floating production, storage and offloading vessel and the West of Shetland pipeline system, weren’t disclosed.

Comments?

[DewDiligence]

I added again to HES and CLF today.

Yes, I've heard the adage about trying to catch a falling knife, but these stocks are priced as though the world is coming to an end, and these are the times when one can step up to the plate and stake out some nice long-term gains. JMHO, FWIW

[DewDiligence]

VALE, CLF each up about 4% today. Maybe the world needs iron ore after all, LOL.

[DewDiligence]

HES, Petronas ink deal to develop North Malay NG Basin:

http://finance.yahoo.com/news/hess-petronas-sign-partnership-agreements-132400055.html

Hess will have a 50 percent working interest and become operator of the project, which is expected to add discovered net resources of 80 million to 100 million barrels of oil equivalent to Hess’ portfolio.

First production is forecast to commence in 2013 at a net rate of approximately 40 million cubic feet of natural gas per day and increase in 2015 to an estimated 125 million cubic feet per day. The project will require a net investment for Hess of approximately $250 million in 2012 and an estimated $400 million per year between 2013 and 2015 [i.e. a cumulative $1.45B in 2012-2015].

This news wasn’t enough to stop HES from falling today in line with the broad market and oil stocks in particular; to the contrary, the projected expenditures of $1.45B in a politically risky area may have exacerbated the sell-off. I added more shares, FWIW.

[DewDiligence]

VALE Passes Initial Regulatory Hurdle on Carajás Expansion

http://www.sec.gov/Archives/edgar/data/917851/000110465912046062/a12-15521_16k.htm

›Vale obtains environmental license for S11D

Rio de Janeiro, June 27, 2012 — Vale S.A. (Vale) informs that it has obtained the preliminary environmental license (LP) to the iron ore project Carajás S11D (S11D), issued by the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (IBAMA). The LP is part of the project’s first phase of licensing and attests its environmental feasibility.

The dimensions of S11D

S11D is the largest project in Vale’s history and also in the iron ore industry, being our major lever for production capacity growth and for maintaining Vale’s undisputed leadership in the global market in terms of volume, cost and quality.

Located in the southern range of Carajás, in the state of Pará, Brazil, with an estimated capex of US$ 8.039 billion for the development of mine and processing plant, the project has a nominal capacity of 90 million metric tons per year (Mtpy) of iron ore with an average ferrous content of 66.48% [VALE’s average is 65-66% and the industry’s average is much lower] and low concentration of impurities. Operations are expected to start in the second half of 2016.

S11D will require investments in logistics infrastructure — in the Carajás railroad and the Ponta da Madeira maritime terminal — estimated at US$ 11.4 billion, which will allow them, after the conclusion, to handle 230 Mtpy of iron ore.

For illustrative purposes, Carajás reached annual production of 90 Mt in 2007, 22 years after the beginning of operations.

Technology innovation and sustainability

Consistent with the objective with long-term sustainable value creation, we developed technological solutions focused on environmental protection, with more efficient use of natural resources and reduction of pollutants emission.

With the use of the truckless mining concept, off-the-road trucks will be replaced by a structure composed of excavators and mobile crushers that will extract the iron ore and feed the conveyor belts that will transport it to the beneficiation plant.

The processing of iron ore using its natural moisture (dry process) is another technology that will mitigate the environmental impacts. This technique eliminates the generation of tailings with the maximum use of ore, since the finest feeds, which would be lost in the conventional process, are within the final product.

Once the S11D mine and plant are operating, there will be decreases of 93% and 77% of water and fuel consumption, respectively, allowing for a 50% cut in greenhouse gases emissions, when compared to conventional methods. The dry process will also reduce electricity consumption of 18,000 MW per year and eliminate the need of tailings dam, minimizing the interference in native environments.‹

[DewDiligence]

CLF is back over $50 and VALE is back over $20. Time to celebrate, LOL?