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25/11/2020
12:58 | gsg: Wondering if Jubilee would be up for snaffling KCM's Nchanga copper smelter with government support?
Vedanta, ZCCM to proceed to arbitration court.
Zambia’s Court of Appeal has ruled that Vedanta can proceed to arbitration with state mining firm ZCCM, in a dispute over the Indian mining major’s copper assets in the central south African nation.
Vedanta's 79.4% owned Konkola Copper Mines (KCM) in Zambia were seized and ordered to be liquidated in May 2019 over alleged mismanagement.
The assets at the heart of dispute are KCM's Nchanga copper smelter, the largest in Zambia, and the Konkola and Nchanga mines.
The Indian mining giant has invested more than $3 billion in the asset since acquiring it from Anglo American in 2004, according to Vedanta's website. The remaining stake is held by ZCCM.
KCM's provisional liquidator, Zambian lawyer Milingo Lungo, said the latest court ruling, in Ndola on Friday November 20, will let the parties proceed to arbitration to settle the dispute.
During the arbitration process, Lungo will remain in control of KCM operations as mandated by the Zambian High Court in May 2019.
In November 2019, Lungo told Fastmarkets that the best option was to increase the value of the disputed KCM assets and ready them for a new owner.
But the latest ruling comes at a time when Covid-19 uncertainties are making it more difficult for major miners and smelters around the world to attract investors to buy assets or to help with developmental and operational costs.
The Zambian government previously approached different parties, including China Non-Ferrous Metal Mining Group (CNMC) over sale of KCM's operations. However, legal risks, existing debts and operational issues have made KCM sale difficult.
When the Zambian government originally filed the liquidation order in May 2019, it sent shockwaves through the Zambian copper industry.
Liquidator Lungu said Vedanta’s deferral of a service fee payment to contractors and staff had led to output disruptions and that had prompted the government to step in at Nchanga and Konkola.
Since the liquidation order, Vedanta has been actively defending its rights under international law to proceed into arbitration with the Zambian state mining firm.
Zambia is the second-largest copper producing country in Africa and its copper exports are a major source of foreign income. One of its biggest export category is intermediate copper products - blister copper and anodes.
Fastmarkets' spot refining charge (RC) for 98-99% blister copper on a cif China basis stood at $150-160 per tonne at the end of October.
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24/11/2020
09:26 | plat hunter: Really?Well informed investors board lolLeon claimed gross margin of 40% when copper was at 2.3lb with a net margin of around 27%You're welcome
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23/11/2020
13:40 | aaspell: Old timers - ignore this post. Newer investors might find it slightly helpful?
"Conroast and Tjate ha ha ha"
One comment from Plat that not far off the mark..... but why?
Some simple facts, the platinum bearing reefs consist of the high PGM / low chrome Merinsky reef and the high chrome / low PGMs Upper Group 2 reef (UG2). It wasn't economically viable to mine Merinsky PGM's until the 1950's and it wasn't physically possible to get the PGM's out of the UG2 ores until the 1970's when advancements in metallurgy made it possible but still very difficult.
It was a simple economic equation whereby the Merinsky reef might contain 10g of PGM's per tonne with little chrome whilst the UG2 only contained 3g of PGM's per tonne and a lot of chrome. Of course the best returns would therefore be made on mining the Merinsky reef for every tonne and avoiding the UG2 (or simply digging it up and putting it straight into tailings with no processing) to get to the better grades.
This was coupled with the smelting problem of the UG2 ores which with a high chrome content. It is very difficult to smelt UG2 material in a smelter designed for Meninsky ore ( a brilliantly informative paper can be found at hxxp://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S2225-62532011001000006 relating to the Lonmin smelter 1).
So Jubilee (formerly Breamore) developed with Mintek an entirely different smelting system that involved a 'pre smelting "roasting" process finally resulting in:-
"ConRoast is a robust, clean and safe DC-arc smelting process for treating especially difficult high chrome-bearing platinum concentrates from UG2 reef ore. ConRoast offers increased metal recovery, low SO2 emissions and improved furnace reliability for chromite-bearing platinum concentrates; all being significant improvements over the matte smelting process currently employed in the Platinum mining industry."
It worked - but at the time no-one seemed to be interested. We purchased and upgraded our own smelters at Middleburg (in hindsight a huge mistake) but didn't secure feedstock to produce PGM's instead running them to smelt ferronickel on toll agreements. So spectacular was this failure that at one point we made money by selling our electricity back to the grid (Eskom) rather than run the smelters. In 2013 we sold the smelters and our stake in PowerAlt and walked away.
However we still held the exclusive right to the ConRoast process (which still no-one wanted) until oooooh lets see (end of the year).
"The ConRoast technology, developed and patented by Mintek (South Africa’s national mineral research organization). has been licensed (to year 2020) exclusively to Braemore Platinum Smelters SA (Pty) Ltd (a wholly owned subsidiary of Jubilee)."
So as of Jan 21 any man and his dog that wants it can approach Mintek for a licence - as we don't progress the PGM's past concentrate I'd consider it unlikely that we will attempt to extend or retain exclusivity of the process.
And on to Tjate. As per the last company suggestion packaging it sounds like the only way this will ever come into production. Whilst we hold a mining right over the 3 farms Jubilee doesn't currently have the cash, the expertise or probably the will to develop this itself and become a genuine miner. It's deep and deep makes it bloody expensive to get at. Rough guess $500 million to develop the mine and then the ongoing OPs costs, risk of strikes (happened before) mine interruptions (possible further closures) etc etc etc and all the issues that the real miners actually have. Far better to JV with a miner to mine the damn thing and retain the right to all unprocessed tailings arising for the life of the mine (we do seem to be good at extracting the Chrome, thus concentrating the PGM grade and then profiting from the recovery of the PGM's from the tailings). Maybe for once stick to what we are good at.
So what's it worth - well we couldn't shift part of it known as Quartzhill for $4 million US but the Tjate farm is where the proper grades are.
So what will someone pay for the best bit considering all the costs they face in developing and extracting its wealth particularly if we then retain rights to 20%+ of the PGM's via the tailings. based on grade of ore at 7g per tonne and grade left in tailings pre treatment of 1.5 - 2 g per tonne
Bring on the criticism
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20/11/2020
13:06 | robers98: Copper surges to fresh two-year high on virus vaccine hopes
Copper surged to a fresh two-year high on Friday, and is set for its longest run of weekly gains since September, as investors weighed concerns about rising coronavirus cases against promising news on vaccines that could hasten an economic recovery.
Base metals have climbed this month on signs of progress in developing a drug to combat Covid-19, which would help economies reopen and global growth recover. But there are still immediate fears that fresh lockdowns – especially in the US – could bring renewed pressure on economic activity. The Trump administration moved Thursday to end several emergency pandemic lending programmes at the Federal Reserve.
Nevertheless, materials including metals are heading for a prolonged bull market driven by structural changes including a shift to more commodity-intensive economic growth, Goldman Sachs said in a note earlier this week.
The gains in industrial materials, from iron-ore to copper, add to tailwinds from a recovery in China – copper’s biggest consumer. The LMEX Index hit the highest since June 2018 on Thursday. The rises come despite a resurgence in virus infections in some key Western states, and a warning from the International Monetary Fund about the fragility of the rebound.
“Generally a strong week for industrial metals with vaccine news driving recovery hopes outside China where demand is already robust,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by e-mail.
Copper surged as much as 1.6% to $7 207.50 a metric ton Friday on the London Metal Exchange, to the highest since June 2018. The metal was up 1.6% to $7 206.50 a metric ton at 10:48 a.m. and is on track for a 3.2% weekly advance. Zinc also rose 0.9%, to $2 783 a ton. Aluminum advanced 0.3%.
LME zinc orders have doubled – a potential sign demand is rising – reaching the highest since July, London Metal Exchange data show. Canceled warrants climbed the most since September on orders in Singapore.
Aluminum has gained about 8% so far this month on the LME, joining a rally in copper and other materials that benefit from rising construction and manufacturing activity in China.
The metal “has benefited from an uptick in car manufacturing in China, and the State Council is urging cities to increase the number of license plates,” Anna Stablum, a commodity analyst at Marex Spectron, wrote in a note on Friday. China is seen leading a global recovery in aluminum demand next year, according to Bloomberg Intelligence.
Rusal, the world’s largest aluminum producer outside China, sees the possibility of a balanced market next year and prices staying at about current levels, Chief of Sales Roman Andryushin said in an interview this week.
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19/11/2020
22:05 | marmar80: Great post EJFS1. Jubilee will be worth as much as EUA in a few months. Not many investors heard about JLP, so the share price is still undervalued."Key takeaways from the call:PGM cost target now 60k oz pa but post Inyoni expansion we should be looking at 75k * £1000/oz = £75m pa.Importantly this PGM output will be 80% generated through new post-chrome tailings following the expansion in chrome processing (Windsor 8 plus one other). This means Inyoni tailings life now extended to at least ten years. Moreover, the chrome is now 85% contracted at $15-18 per ton so at the 250k tonnes per quarter target post expansion equates to over £10m pa.The stated copper cost target of $4000 means that the margin per ton of copper should be well above £2000 at current prices (and the prospects are bullish for further gains going forward) so at 25k tons target output, we're on £50m pa from copper.Therefore ex anything else - cobalt, zinc, lead, vanadium e.t.c. - the company should be on track to generate £135m pa EBIT from 2022 (75+10+50). This will put the stock on 1.5x PE 2022. More importantly, once the company is proving the box economics of these projects at extremely high returns on capital (>50%) the opportunity to find opportunities to grow are immense. On ROIC - g/WACC - g (50% - 10%/15% - 10%) the stock should trade on 8x Invested Capital. IC is approx £100m so Enterprise Value (i.e. Market cap as it's pretty much debt neutral) is £800m. Tjate is just a crumb."
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19/11/2020
16:58 | robers98: President Cyril Ramaphosa used the platform of the third South Africa Investment Conference to underline the country’s potential to act a gateway to the African market, as he sought to reignite investor interest in an economy that has been underperforming for more than a decade and has been severely damaged since the onset of the Covid-19 pandemic.
In 2018, Ramaphosa set a five-year target of securing R1.2-trillion in new investment and in 2018 and 2019 combined investment pledges worth R664-billion across 102 projects had been made by domestic and foreign investors. To date, R172-billion of the committed amount had actually been invested.
The investment outlook had been severely hurt by the pandemic and Ramaphosa reported that 21 projects, representing about 10% of the total commitments, had been delayed or placed on hold as a result.
In an address designed to highlight the efforts under way, including the implementation of reforms in the areas of energy and the digital economy, to improve the investment climate, Ramaphosa argued that the African continent stood “on the cusp of a new era in its economic development”.
“In January next year, the African Continental Free Trade Area will take effect, establishing a continental market of some 1.3-billion people with a combined gross domestic product (GDP) in the region of $2.3-trillion dollars,” he said, describing it as one of the largest free trade areas globally.
“With its advanced infrastructure, diverse economy, sophisticated capital markets and developed manufacturing capacity, South Africa is the ideal location for any company wanting to reach the continental market with greater effectiveness from a cost and logistical point of view,” the President said.
The recently launched Economic Reconstruction and Recovery Plan also included the further integration of the Africa market as a key priority, alongside the other priorities of implementing a large-scale infrastructure roll-out, bolstering energy security and undertaking initiatives to stimulate job creation and localisation.
“The private sector is vital to the achievement of these priorities and shifting the economic trajectory of our country. This is particularly true of our infrastructure programme, which relies on private investment in new infrastructure projects to create efficient, world-class network infrastructure and boost aggregate demand.”
Ramaphosa added that the newly activated Infrastructure Fund would direct public funds in a way that could leverage private investment at a larger scale. Government has committed R100-billion for the fund for the coming ten years.
The President also used the occasion to showcase the Operation Vulindlela initiative set up jointly by the Presidency and the National Treasury to oversee the reforms required to improve the business and investment climate.
“Operation Vulindlela will ‘open the way’ for high-impact economic reforms in network industries such as energy, water, telecommunications and transport, as well as in attracting critical skills and streamlining the visa regime,” Ramaphosa said, adding that the team reported implementation progress directly to him.
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16/11/2020
13:03 | robers98: Seema Shah, chief strategist at Principal Global Investors, says Moderna’s vaccine trial results will boost hopes of an economic recovery from the pandemic next year, despite the alarming increase in Covid-19 cases in recent weeks.
“The global population couldn’t have asked for more from the Moderna vaccine. With an almost 95% efficacy and more acceptable logistical and storage dynamics, today’s news should solidify the market rally that has been in play since last week. Visibility towards a return to normality is increasing, and this should provide more fuel to the reflation rally, with small caps, value and cyclicals clear beneficiaries.
“Of course, there is still a tough winter to get through, and mobility numbers suggest that lockdowns in Europe are clearly taking their toll on economic activity. In the US, rising cases and even deaths suggests that mobility may soon also start to wane. Yet, today’s vaccine news should make investors more tolerant of the surging virus cases, permitting them to look through to the strong dynamics that seem to be taking shape for 2021. Easy monetary policy, fiscal stimulus, recovering economic growth – there are many reasons for investors to be optimistic as we move closer to the end of this awful year.”
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16/11/2020
08:58 | daocana: come on undertaker ..you must act and do the right thing..ban and report him..many investors would have read his posts and will not invest here and bad accusations like what he has been spreading will go through the network of possible future jlp investors...do the right thing ban and report him
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01/10/2020
16:31 | marmar80: Some small private investors (incl myself) are not able to buy any here as their brokers don't have illiquid instruments listed online. When I want want to buy JLP I have to call and pay £50 fee for a manual trade. I believe that some in Africa or even here in Europe need to do the same when it comes to buy Jubilee listed on aim in the UK. I know, I need to change a broker, right, but this is not the case. Some investors will not add here for this reason.
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22/9/2020
15:32 | plat hunter: Worth a read...
Https://www.bloomberg.com/news/articles/2020-09-22/shozrt-sellers-are-rushing-back-into-stocks-as-volatility-returns?srnd=premium-europe
One group of equity skeptics who faded out of view during the summer rally are making a comeback with the S&P 500 heading for its worst September in almost a decade.
Investors who sell borrowed shares in anticipation of price declines are back in force. Bearish wagers climbed to about 7% of total stocks available for lending this month, up from 2020’s low of a little above 6% reached in August, data compiled by JPMorgan Chase & Co. show. That’s poised for the biggest increase since March.
relates to Short Sellers Are Rushing Back Into Stocks as Volatility Returns
The spike of short sales coincided with an equity rout that, at Monday’s worst point, took the S&P 500 to within points of entering a 10% correction. While contrarians may view the rise of skepticism as something healthy in a market that until now had defied any bad news -- from plunging corporate profits to a lack of fiscal stimulus -- JPMorgan strategists led by Nikolaos Panigirtzoglou warned it may mark the start of an ominous trend for equities.
“The recent rise in the short base at individual stock levels is a worrying development, especially for U.S. stocks where the short base still stands at rather low levels,” Panigirtzoglou wrote in a note to clients.
Selling abated Tuesday as the S&P 500 rose 0.2% as of 10 a.m. in New York, halting a four-day decline.
PagerDuty Inc., nCino Inc. and Flowserve Corp. are among Russell 1000 stocks whose short interest has surged this month as a percentage of their total shares available for trading, according to IHS Markit data compiled by Bloomberg.
To see how dangerous a continuing buildup can be, consider how fast bears took control earlier this year. According to JPMorgan’s data, the short interest ratio among individual stocks started the year at around 8% and then jumped above 9% as equities sank into their fastest bear market ever in March.
To be sure, all the shorted shares ended up helping contribute to the subsequent recovery through a process known as a short squeeze, when rising prices compel investors who made bearish bets to reverse their positions. But there’s no denying that the most-hated stocks fared worse during the March turmoil, with short selling compounding the market’s pain.
Most-hated stocks fell more during March selloff before staging a faster recovery
For now, short bets are growing from a relatively subdued base. Even with the latest increase, the current ratio still trails levels prior to the March meltdown. But that also means there’s a lot of room for short sales to expand should sentiment keep souring.
There is no shortage of reasons for pessimism. Stock valuations have reached the highest level since the dot-com era. Another round of fiscal stimulus is now seen unlikely by the end of 2020. And the U.S. presidential race is looming in November amid concerns that final results could be delayed for weeks.
“The market is going to be very fragile going into the election,” said Mike Mullaney, director of global markets research at Boston Partners. “If you want to bring your portfolio beta down without selling and going to cash, it makes some sense” to short some stocks, especially for short/long hedge funds, he added.
Skeptics had been mostly driven into extinction after the S&P 500 staged a 60% rally over five months. In August, the median S&P 500 stock had outstanding short interest equating to just 1.8% of market capitalization, the lowest level since at least 2004, data from Goldman Sachs Group Inc. showed.
Now that the rally has shown signs of faltering, short sellers are quick to ramp up wagers. To Arthur Hogan, chief market strategist at National Securities Corp., that bodes well for the market because every bear today is tomorrow’s potential buyer.
“The tricky part about that is, when that trade starts, it tends to build up a pent-up demand for equities,” Hogan said. “The larger the short position, the more likely there will be a floor of demand.”
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PLUS1
