Central Asia Metals Share Discussion Threads

[return_of_the_apeman] 13/9/2018 22:42

Thanks King Suarez

Much appreciated

[coxsmn] 13/9/2018 18:51

Mount, can't wait for results next Wed and divi announcement!

[mount teide] 13/9/2018 16:44

America's most populous state California has just signed into law a Bill that requires the State to reach totally CARBON FREE ELECTRICITY BY 2045 - this will be another huge boost for copper demand over the decades ahead as where 'Green' Calafornia goes the rest of the USA and West soon follows!



California Just Signed The World’s Most Aggressive Climate Bill - Oilprice.com

'California just passed one of the most aggressive climate bills in history, making it the first large economy to mandate carbon-free electricity by 2045.

The bill that Governor Jerry Brown signed into law, SB 100, requires the state to reach 100 percent clean electricity in less than 30 years, with interim goals along the way, including 60 percent by 2030.

Yet, Governor Brown took an even bolder step, not only signing the legislation but also issuing an executive order calling on the entire economy to become carbon neutral by 2045, not just utilities generating electricity.

Electricity only makes up about 40 percent of California’s greenhouse gas emissions, so the executive order would target a whole host of other sectors, including building, heating, industry, not to mention transportation. It’s astounding in its ambition, and there are plenty of reasons to be skeptical, including the lack of a detailed plan and the fact that as an executive order it is vulnerable to change from future governors.

Still, taken together, the SB 100 legislation and the executive order sent a powerful message. “SB 100 sends a clear signal to folks in laboratories, folks in board rooms to have the security of knowing that the fifth-largest economy in the world is moving toward clean energy,” Assemblyman Todd Gloria (D-San Diego) said, according to the LA Times.

The roadmap to actually achieve these ambitious goals necessitates follow up legislation in the relatively near future.

Nevertheless, the 100 percent clean electricity target alone will have a transformative effect, and not just on California, but perhaps the rest of the country and beyond. The massive volumes of renewable energy and energy storage that will be required to achieve 100 percent carbon-free electricity will accelerate cost declines of the various technologies involved, including solar, wind and batteries.

The scaling up of renewable energy deployment will also continuously chip away at the soft costs involved: sales, financing, administration, permitting and installation. As the cost of manufacturing solar panels, for instance, have fallen dramatically, these soft costs have remained as a much larger share of the overall cost picture.

One of the challenges will be how to integrate renewables and energy storage at such high levels, which presents problems for grid operators. Already, California sees depressed electricity prices at midday when large volumes of solar are generating electricity. Batteries will have to play a major role, but as of now, energy storage is still in its early stages.

One of Governor Brown’s ideas was to link California’s electricity grid with that of other Western states, a proposal that has been controversial and does not divide along familiar political factions. Some environmentalists support the idea, arguing it would help drive down the cost of renewable energy and allow for much greater portions of clean energy to be integrated into the grid, including coordination on long distance transmission lines. Others argue it would give more power to coal states in the West as well as the federal government, at the expense of California. The plan did not garner enough support this time around, but ultimately, many argue it might be necessary in the years ahead.

Getting to 100 percent clean electricity, in the end, will require eliminating a lot of natural gas from the state’s electricity mix.

If integrating renewables to achieve 100 percent carbon-free power is a tough nut to crack, zeroing out emissions in the transportation sector is another problem entirely.

But while reasonable people can argue over how realistic it is to eliminate gasoline and diesel from the transportation sector, a lot of disruption will occur well before that point. As the Carbon Tracker Initiative noted in a recent report, the havoc for incumbent technologies starts growing quickly as the peak approaches, which, as it happens, occurs early on in the transition phase. Peak oil demand, for instance, may occur when alternatives gain just 5 to 10 percent of the market.

As BNEF and Bloomberg point out, inflection points come on suddenly, and adoption accelerates at an increasing rate. This echoes the conclusion from the Carbon Tracker report, which argued that renewable energy and EV adoption will follow “s-curves,R21; which is to say, a period of slow growth that suddenly gives way to explosive growth.

In the first half of this year, hybrid and fully electric vehicles captured more than 10 percent of total sales in California, according to Bloomberg New Energy Finance. EVs accounted for 6 percent of sales. California has a long road ahead, but it is on its way.

[king suarez] 13/9/2018 16:41

Zinc cash cost quoted as $0.44/lb.
Copper cash cost quoted as $0.52lb
And copper equivalent cash costs quoted as $0.76/lb

See page 7

hxxps://www.centralasiametals.com/wp-content/uploads/2018/05/2018-AGM-presentation-pdf.pdf

[return_of_the_apeman] 13/9/2018 16:29

Does anyone know the AISC for SASA's metals?

Tia

[mount teide] 13/9/2018 16:03

kt - the fall in share price as a result of lower industrial metal pricing should impact the high cost operators far more than a company which generated a CAGR of 24.9% during the longest sector recession in decades, and has paid out in dividends and share buy backs more than twice the $60million raised at IPO in 2010.

I continue to add to a company that is now a top three portfolio holding.

[coxsmn] 13/9/2018 12:31

www.proactiveinvestors.co.uk/companies/amp/news/204752

[eeza] 13/9/2018 11:23

Retail is buying but the Bots are selling.

[zebbo] 13/9/2018 10:34

CU 2.7070 and still on the up. Thought the share volumes would have been higher along with the SP, could sentiment be changing slightly

[shieldbug] 13/9/2018 10:23

MrTenPercent - Quite possibly future generations will loll about in a cloud of virtual reality without owning anything. But seriously just because we have lived through a period of energy from fossil fuels it doesn't follow that future generations cannot sort this stuff out for themselves. The grid based supply of electricity from centralised generating stations will undoubtedly need to change as PV becomes cheaper than the cost of centralised generation + the cost of grid. Not far off. Similarly the cost of energy storage is falling quickly. The future will be organised differently than it is today. The supposed premium cost of clean energy is disappearing - mainly due to Chinese focus. I know, I bet against the Chinese 10 years ago and lost. Chinese focus on AVs and energy storage should not be underestimated.

A long term investment in commodities like copper, lead and zinc must be based on your best estimate of probable outcomes. It is only ever going to be a guess.

[mrtenpercent] 13/9/2018 08:34

Not sure if this directly affects CAML, but in reply to MT's post FWIW I think the next generation is going to be poorer than we currently expect because of the big shift in energy. If we do nothing we will be poorer because the EROEI (energy return on energy invested) is decreasing and the depletion rate of known and projected oil reserves is increasing - and perhaps climate change will bite us in the bum. If we have a major shift to "cleaner" energies we will collectively have to make a massive investment in new forms of electrical generation, storage, and distribution - and as MT keeps pointing out the easy sources of metals have all gone. Where I live there was a time when you could scratch iron ore out of the ground with hand tools and wooden ladders - those sorts of resources have pretty much all been used up around the world. Of course that means even more energy will be needed to extract and refine the metals we need. In the past when the world has made massive collective investments (industrialisation, transportation, communications for example) there has been an increase in productivity which has led to prosperity (and supported increases in population). This time round we will be investing heavily just to maintain what we already have.

[zebbo] 13/9/2018 08:28

Hmmm, BP buy Tesla and CU mining assets...

[zangdook] 13/9/2018 07:34

I'd be interested to see that report.

[mount teide] 12/9/2018 23:22

Big Big Oil Faces ‘Monumental217; Costs to Reach Climate Goals, JPMorgan Says _ Bloomberg today.

'Europe’s largest oil companies must roughly double the amount of money they’re now dedicating to “new energies”(Renewables) by the end of the decade to meet key climate targets, according to a report from JPMorgan that suggests the challenge facing the fossil fuel industry has been vastly underestimated.

In some cases, to achieve emission reduction goals, or protect their portfolios against future declines in oil demand, companies such as Total SA will have to raise their overall capital expenditure budgets. If the sector does double what it dedicates to clean fuels by 2020, it will still need to double it again within five years, or risk losing credibility in discussions about climate change.

Using a model built on public statements from the eight largest European oil companies and industry “best practices”, the report paints a picture of a sector not fully prepared for a rapidly approaching, and enormous change. Spending more on clean fuels will help in climate discussions, but could cause them to miss oil and gas production targets or return less cash to shareholders that expect a rebound in crude prices to fatten their pockets.

“We’re not really bracing ourselves enough,” said Chrystian Malek, head of European, Middle East and African oil and gas research at JPMorgan, in an interview. “If they’re really going to lower their carbon footprint, the dollars that they have to spend are monumental.”

Malek said he created the report partly to “hold their feet to the fire”. Oil companies have stated goals related to cutting their own operational emissions, reducing flaring and shifting their portfolios so the products they sell emit fewer greenhouse gases. JPMorgan cataloged those targets while adding in its own forecasts for upcoming emissions rules globally to determine how much companies should spend.

The largest European oil companies spend about 5 percent of their capital expenditure budgets on “new energies” -- low carbon energy fuels and systems. That needs to rise to 9 percent by 2020 and then 17 percent by 2025, according to the analysis. The largest company in the study, Royal Dutch Shell Plc, will more than double its spending on clean fuels in 2025 to $4.5 billion a year. That’s up from $1 billion to $2 billion now, the report said.

For some companies, such as Shell, that’s affordable. The Anglo-Dutch oil major will have a $27 billion capital expenditure budget for all energy in 2025, and can afford to reduce what it dedicates to traditional fossil fuels in favor of low-carbon investments. Spain’s Repsol SA, which already dedicates 15 percent of its capital expenditure budget to new energies, and Norway’s Equinor ASA are also relatively well-placed to face the change.

Other companies, such as Total, aren’t able to spend less on oil and gas without missing production growth targets. The French oil major will have to roughly quintuple new energy spending to $2.8 billion by 2025, but can’t afford to cut its spending on traditional fuels. It will need to raise total spending in order to keep all its promises, which could hurt shareholder returns.

The scope of the challenge -- and the difficulty of quantifying it -- may factor into why shares of the largest oil companies haven’t rebounded along with a surge in crude prices. The Stoxx Europe 600 Oil & Price Index is up 7.5 percent so far this year versus a 17 percent rise in Brent crude.

The industry is set to deliver record cash flows, can meet its production targets within its existing capital framework and has kept a tight leash on spending. But the chorus of critics arguing against fossil fuel use is growing stronger, which means it’s unlikely the biggest oil companies will still be able to acknowledge climate change without dedicating enough capital to address it, Malek said.

“They could kick the can down the road; they could all possibly do that,” said Malek. But “customers are breathing down their necks, and when they’re walking to investor meetings, I think it’s now a real problem.” '

[ken tennis] 12/9/2018 19:51

ZEBBO if you track back I know everyone associates CAML with CU but look at the ZN chart in comparison to he CAML price chart and they almost correlate like a hand in a glove.
I know CAML deal in CU ZN and PB as their main source of income but find they track the ZN chart almost exact.
This is a good company and produce at such low AISC.
ATB Ken

[zebbo] 12/9/2018 19:03

Copper still performing well, even with Dow pull back

[eeza] 12/9/2018 16:58

Dow surged up by 165pts but has now dropped back down to 55pts.

[zebbo] 12/9/2018 16:44

Cause of spike I believe
The U.S. is reaching out to China for a new round of trade talks, The Wall Street Journal reported Wednesday. The move is an effort to give Beijing another opportunity to address Washington's trade concerns before the Trump administration puts more tariffs on Chinese imports, people briefed on the matter told the Journal. The U.S. has proposed to have talks in the coming weeks.

[zebbo] 12/9/2018 16:41

Any mathematicians able to work out divi sustainability at current copper rates Vs dept repayment Vs production costs Vs divi cover etc

[zebbo] 12/9/2018 16:38

Short squeeze as I type, not sure what is triggering at the mo

In summary, we have loads of funds shorting under the guise of a "trade war", a self-feeding cycle until broken. When broken expect short squeeze and spike before prices normalise.
Today physical copper prices are high and physical stockpile is around half of what it usually is. IMHO this tells the true story....
Then as MT has posted, long term underinvestment will soon lead to a deficit and drive prices higher, possibly quite a lot higher.
Then we have a very big support pillar long term as the world, in particular, China moves from fossil fuel to electrification

[mount teide] 11/9/2018 23:25

Oil and Copper prices have had a very close correlation over the past two decades - moving almost in lockstep; largely because they are affected by the same economic factors.

Oil today is at a 4 year high, while copper would need to be around $3.20(where it was before the recent pullback) to get back into lockstep with oil.

As the World's swing producer the Saudi's are determined to maintain the oil price in its present range $70-80 until the US Mid Terms are over and then look to push it a little higher - this suggests for the decades long correlation between copper and oil to continue, copper will likely need to push back above $3 over the next 3-4 months or so.

If the trade war fears are as significant as many economic commentators suggest why relatively speaking is the POO so high/strong when logic suggests its demand like copper would likely fall with the threat of reduced economic activity. This pricing anomaly is further compounded by the fact that the copper market is currently tighter than the oil market. Their very different recent price movement simply does not make sense based on the fundamentals and price correlation history.

[melody9999] 11/9/2018 22:16

SP of the miners is a reflection of reduced commodity prices .... this is due to market being concerned about the impact of a tariff war.

Results will bring the focus back on CAML's low cost of production and fact it is less sensitivity to metals prices than others producing at lower margins.

[mount teide] 11/9/2018 20:40

bb - the valuations of the miners severely lagged the price of the metals for most of the first three years of the recovery stage of the previous industrial metal market cycle(2000-2008), before rapidly accelerating once the supply deficit started to bite - this led to a huge increase in capital investment for production development over the next decade.

Short of a global recession within the next year or so, copper demand will likely continue its long term 2-2.5% growth as a minimum, while production will increasingly fail to meet this demand as a result of a half decade of savage investment cuts by the industry to survive many years of decade low metal pricing - industry capital expenditure is still 65% below the 2013 level.

Since 2010 the average ore grade of the top 10 copper mines has fallen from over 1% to 0.59% and is still falling. Consequently, over a two year outlook its probably an odds on bet that copper will be at a higher price than today, probably much higher if it is to drive the level of investment needed to offset some of the estimated 5 million tonne deficit forecast for 2025, based on just a 2% annual growth rate which is very much at the lower end of the range of growth forecasts.

As alluded to previously - this first price weakness since the H1/2016 recession lows has been largely triggered by Trump's trade war rhetoric and is being exploited for self serving purposes by hedge funds aided and abetted by the World's largest industrial metal importers. They all see it as a win win win situation - Trump believes his approach of getting tough with China and Germany will help fight off the Democrats in the November mid term elections; the hedge funds are exploiting the uncertainty to scalp 10-20%, and the Chinese are taking advantage of the lower prices to import record tonnages.

In the run-in to the mid term elections this price weakness will likely be all over bar the shouting - and the outstanding industrial metal market fundamentals will again take centre stage and drive pricing.

AIMHO/DYOR

[coxsmn] 11/9/2018 19:35

Mount, close to or at the bottom, £2 and 8% yield. Results here next week unlikely to disappoint.