Central Asia Metals Share Discussion Threads

[zho] 07/9/2022 14:02

China Puts Cement Shoes on Metals: Elements by David Fickling

Peak concrete production this year will have knock-on effects throughout the universe of hard commodities.

[mount teide] 04/9/2022 00:42

Chilean Copper Industry, the worlds largest, has spent $25bn over the last 5 years trying to maintain output at 5.8m tonnes/yr - it failed.

Production has actually fallen by 400k tonnes/yr - a 400ktpa mine would be the world’s fifth largest according to 2021 production tables. Water scarcity, declining grades, depletion rates, skinny project pipelines, industrial action, taxation increases and regulatory uncertainty and ever-expanding capex budgets have extracted a heavy toll on the industry over the last 5 years - with a recent report by BMO Capital Markets suggesting Chile will experience more of the same over the decade ahead.

Copper price: Chile, Codelco face another lost decade of output growth - Mining 2 Sept 2022

'Amid all the economic gloom and doom, a bombshell announcement this week by the world’s number one copper producer appears to have gone largely unnoticed or ignored by large-scale speculators on futures markets who’ve been net short on copper for the last seven weeks.

Chile’s state-owned Codelco last week said it expects output to reach between 1.49 million and 1.51 million tonnes this year, down from a previous forecast of 1.61 million tonnes.

On Wednesday, Codelco chairman Maximo Pacheco told a newspaper 2023 guidance is 1.45m tonnes, but significantly, there is no prospect of an improvement.

“For the five-year period between 2023 and 2027, the best forecast we have is 1.5 million tonnes on average.
“Structural projects [to maintain output levels] are effectively behind schedule and over budget.”

The “best forecast” would constitute the lowest output in at least a decade and compares to average attributable output of 1.74m since 2010 according to data from sister company Miningintelligence.

Codelco’s output next year, would more than 400,000 tonnes below its 2015 peak. A 400ktpa mine would be the world’s fifth largest according to 2021 production tables.

Two lost decades
Codelco’s struggles are Chile’s struggles: water scarcity, declining grades, depletion rates, skinny project pipelines, industrial action, taxation increases and regulatory uncertainty and ever-expanding capex budgets.

In 2021 Chile produced a quarter of the world’s primary copper output of 21m tonnes, according to the US Geological Survey. On a proportional basis that makes Chile’s position in the world of copper on par not with Saudi Arabia’s in crude oil, but the combined output of the 13 members of Opec.

Chilean Copper Output back to 2004 Levels


In a recent report, BMO Capital Markets says Chile is now heading towards two “lost decades” in terms of copper output growth:

“Following the steady ramp-up in the 1990s and early 2000s, output levels have stagnated, with the projections of 6Mtpa-plus of output never coming to pass.

“And this is not for a lack of investment, with a number of large new mines coming to market over this period. Rather, it is a function of decline at existing assets.”
BMO notes that in particular, SX-EW production in Chile “continues to trend inexorably lower” and is now roughly 500,000 tonnes below peak levels seen in 2009.'

[bozzy_s] 02/9/2022 16:03

No buyback please. Increase the dividend above the current 20p/pa - say 22p for starters, with a note that it will grow every year going forwards, all being well. A starting yield of 10% would surely bring in buyers.

That said, GKP is yielding 36% and growing, debt-free, and is overlooked due to some red flags.

I'd much rather be in these high-paying established profitable companies than loss-making newbies.

[spoole5] 02/9/2022 04:16

Dollar strength has to be helping considerably here.

[yawn1971] 01/9/2022 09:31

Hey Rio Tinto .... we are over here !

[cthompso] 01/9/2022 07:12

Interesting read - thanks.

[zho] 31/8/2022 13:44

I've just got around to reading GoRozen's latest quarterly report, published a couple of weeks ago. The section on copper starts at page 30:

S&P Global Admits We Have a Copper Problem

[mondex] 31/8/2022 08:22

The money will be used in M&A activity surely (+increased dividend)

[zangdook] 31/8/2022 01:46

see PHSC for a good buyback (two in fact). A significant buyback in a dividend-paying company can be a great benefit to shareholders because once it's done dividends should grow (not the case with PHSC so far, it just put the share price through the roof).

[lauders] 30/8/2022 23:56

The big dividend option would be better than the buy back one IMHO. Lots of discussion on various company BBs about the benefits of buy backs for the average Jo shareholder and I have never seen a good one. Benefits management more than shareholders from what I have read!

[spoole5] 30/8/2022 20:58

Surely about time for a buyback with that growing cashpile

[yawn1971] 24/8/2022 13:04

Bout time this share did something ..... Big divi would be very nice in sept

[zho] 19/8/2022 07:35

WHY RESOURCES DURING A RECESSION

We strongly discourage investors from using recessionary fears as a reason to sell commodities. Commodity markets today bear no resemblance to 2008. Investors using the 2008 GFC playbook risk selling commodities right at the bottom, missing the huge potential returns embedded in these markets over the coming decade.

[zho] 17/8/2022 09:38

Perhaps badly, but if some production of metals goes offline because of high energy costs, won't that tend to boost prices, other things being equal, as was the case with zinc yesterday?

[gotabsirius] 17/8/2022 09:13

Question is how will our opps/costs be impacted in Macedonia?

[zho] 16/8/2022 12:39

Zinc surged after one of Europe’s largest smelters announced it would halt production next month as the continent’s energy crisis threatens to hobble heavy industries.

The Budel smelter in the Netherlands -- controlled by Trafigura Group’s Nyrstar -- will be placed on care and maintenance from Sept. 1 “until further notice,” according to a company statement. Zinc jumped as much as 7.2% on the London Metal Exchange as traders priced in even tighter supply....

[schmally] 11/8/2022 11:21

Whilst geo/political risks in CAML's Kazakhstan operations look to be under control and not of significant concern at present, I'm certain that when they are debt free next month with an increasing cash mountain, they will look to further de-risk the business with an acquisition in safer territory, whilst maintaining existing operations.

[melton john] 10/8/2022 18:09

They don't need Russia https://news.yahoo.com/kazakhstan-defies-putin-234700423.html

[v11slr] 10/8/2022 16:59

Being in Kazakhstan do they use Russian oil and gas?

[loafingchard] 10/8/2022 16:41

Anyone care to have a stab at what CAML cost increases may amount to?

[zho] 10/8/2022 08:02

ATYM have dropped 9% this morning, presumably as a result of this:

"However, as a result of the ongoing conflict in Ukraine and the inflationary environment globally, our costs have increased materially since last year and it is likely that current conditions will persist for some time. High electricity prices are having a notable adverse impact, along with consumables linked to the price of energy, such as explosives and diesel. "

[schmally] 08/8/2022 12:35

Looking forward to CAML being debt free within the next 1-2 months with a potential acquisition then on the cards and/or a chunky special dividend. This is just a cash machine at present and a perfect income generator as part of a diversified portfolio. Holding strong and may look to add further on any dips around the 220p level

[yawn1971] 29/7/2022 08:28

Back to 280 ?

[spawny100] 14/7/2022 07:55

Damn I'm looking silly selling these for ATYM right now!