Total Eren launches construction of it's first solar PV plant in Australia

Paris/Melbourne, 17 October 2018 – Total Eren, a leading renewable energy Independent Power Producer (“IPP”) headquartered in Paris, is pleased to announce the start of construction of the Kiamal Solar Farm located in the state of Victoria, Australia. The 256.5 MWp solar power plant has already signed three Power Purchase Agreements (“PPAs”) with Mars Australia and the two Victorian-based energy retailers: Flow Power and Alinta Energy.

Kiamal Solar Farm is located 3 km North of Ouyen township in North-West Victoria and is approximately 100 km South of Mildura. Total Eren obtained Planning Consent for Kiamal Solar Farm from the Mildura Rural City Council in September 2017. With three PPAs secured and onsite works commencing shortly, Total Eren is pleased to announce that its first solar photovoltaic (PV) project in Australia has entered into its construction phase.

The 256.5 MWp Stage 1 of Kiamal solar PV power plant will be made up of over 720,000 PV panels with single-axis trackers covering over 500 hectares. The commencement of construction ceremony was celebrated on Wednesday 17th October 2018 in Melbourne with the presence of the Hon Lily D’Ambrosio MP, Minister for Energy, Environment and Climate Change.

The Project is expected to reach commercial operations in mid-2019 and when completed, the Kiamal Solar Farm will be Victoria’s largest solar power plant; producing enough electricity to meet the needs of more than 133,500 Victorian homes and displacing more than 610,000 tonnes of carbon dioxide emissions annually.

The construction will be led by a turnkey Consortium jointly led by Biosar Australia (“Biosar”), part of the Greek infrastructure group Aktor S.A., and Canadian Solar, one of the world’s leading solar PV technology suppliers. The project is expected to contribute to the local economy during the construction and operational phases through local investment in jobs (with an average of 200 workers on site during construction, 7 for the operational phase), accommodation and ongoing services.

Total Eren is working with TransGrid to deliver a new 220 kV Kiamal Terminal Station and Collector Substation, with transformers designed and manufactured locally by Wilsons Transformers in Victoria. The Kiamal Solar Farm is unique in that it has committed to install a more than 100MVAr synchronous condenser as part of the generating system in order to facilitate a timely connection to the Victorian Transmission System, in turn substantially strengthening the grid in the region and making it possible to connect even more renewables in NW Victoria.

Total Eren is also seeking to expand Kiamal Solar Farm with a second stage of up to 194 MWp, as well as exploring commercial options for the approved 380 MWh of energy storage.

The project has secured three Power Purchase Agreements (“PPAs”) with one corporate and two energy retailers for the supply of electricity and green certificates:

Mars Australia (“Mars”) has signed a PPA with Kiamal Solar Farm as part of their plan to generate the equivalent of 100% of Mars’ electricity consumption from renewable energy by 2020. Mars has contracted energy to cover the equivalent of the electricity requirements of its six Australian factories in Victoria and New South Wales: Asquith, Ballarat, Bathurst, Wacol, Wodonga & Wyong, and two sales offices (Melbourne & Sydney).

Flow Power, one of Australia’s fastest growing energy business retailers and Alinta Energy, a leading Australian energy generator and retailer will procure electricity and green certificates from Kiamal Solar Farm.

Total Eren alongside Biosar, Canadian Solar, Mars, Flow Power, and Alinta Energy, recognise the need to take an active role in reducing Australian’s reliance on fossil fuels with Kiamal Solar Farm contributing to increasing Australia’s renewable energy penetration and reduction of greenhouse gas emissions.

Fabienne Demol, Executive Vice-President – Global Head of Business Development of Total Eren stated: “The successful start of construction of Kiamal Solar Farm is an important milestone for us as this is not only our first project in Australia but also our largest solar project worldwide. I want to thank our best-in-class partners and excellent teams who made this project possible. Total Eren has an ambitious vision for the development of renewable energy in Australia, and partnering with major industry players ranging from manufacturing, utility and retail is an important lever in our strategy to becoming a significant player in the national renewable energy market. It also sends a strong message to the rest of the market that now is the time to capitalise on the opportunities offered by renewables and to drive positive change in the environment.”

Michael Vawser, Asia Pacific Regional Director of Total Eren, added: “Having the weight of Total Eren behind the team here in Australia has meant that we have been able to develop this site from scratch starting only in December 2016. The momentum behind this project grows every day and I will be genuinely delighted to watch the first solar panels go in just a few weeks.”

For more information, go to www.total-eren.com

De Beers eyes tech markets for synthetic diamonds future

TORONTO/LONDON, Oct 18 (Reuters) – Anglo American unit De Beers is going after lucrative, but elusive high-tech markets in quantum computing, as it aims to expand its lab-grown diamond business beyond drilling and cutting.

Element Six, De Beers' synthetic diamond arm, is building a $94 million factory in Portland, Oregon, an expansion that comes as scientists from Moscow to London push to develop diamonds for futuristic applications.

Researchers have long chased the synthetic 'holy grail' of diamond semiconductors, without commercial success.

Resilient to extreme temperatures with super-conductive properties, diamonds can withstand conditions that silicon cannot, but roadblocks around cost and production have thwarted developers.

Now coming of age after decades of experiments, technology called chemical vapor deposition, or CVD, offers a path to higher-quality, lower-cost production of synthetic diamonds and that opens the door to potential new computing markets.

Diamonds created by CVD anchor Element Six's fast-growing business for advanced laser, thermal and water applications, said CEO Walter Huhn.

"But there are other applications in the quantum field, including computing, sensors and magnetometry, that could become very exciting parts of the business in future," said Huhn. Magnetometers, sensors measuring magnetism, can be used in mobile phone networks."It's impossible to say at this stage just how big these could become, but it's an important area of research and development for us because the potential is so vast."

"It's impossible to say at this stage just how big these could become, but it's an important area of research and development for us because the potential is so vast."

The global synthetic diamond market, from jewelry to medical equipment, is forecast at $28.6 billion by 2023, up from around $15 billion in 2014, according to Crystal Market Research.

Other companies in the sector include Russia's New Diamond Technology, Singapore's IIa Technologies and U.S.-based Diamond Foundry.

While the wholesale replacement of silicon semiconductors by diamonds is unlikely, niche markets such as the thermal management of semiconductor packaging, which is worth tens of billions of dollars annually, are likelier applications, according to Dan Hutcheson, CEO of VLSI Research, a semiconductor research firm in California.

CVD technology brings that closer to reality, said Anirudha Sumant, a scientist at the U.S. Department of Energy's Argonne National Laboratory in Illinois.

This year, some 2 million carats of gem-quality synthetic diamonds will be produced, versus approximately 60 million carats of gem-quality natural stones from 148 million carats mined, said industry analyst Paul Zimnisky.

"To supply diamond processing chips to Apple, for example, would require much larger-scale production and higher consistency in quality," he said.

Element Six, which produced its first synthetic diamond in 1953, will also use CVD for the Lightbox line, jewelry with polished synthetic stones priced at $800 per carat. It targets annual production of 500,000 rough carats by 2020.

De Beers abandoned its policy of strictly selling natural diamonds for jewelry in May, a U-turn that it said reflected consumer demand.

The shift coincides with challenges for diamond mining. Prices for natural rough diamonds are about 20 percent below record 2011 highs, while synthetic production costs are dropping.

(Reporting by Susan Taylor and Barbara Lewis; Editing by Susan Thomas)

Alrosa test non-dollar deals to sidestep any US sanctions

MOSCOW, Oct 18 (Reuters) – Several major Russian companies are exploring ways to do deals abroad without using dollars, spurred on by a U.S. threat to broaden sanctions that have impeded access of some Russian firms to the international banking system.

The Kremlin has been pushing companies to conduct more deals using other currencies to reduce reliance on the dollar.

Russian Alrosa, the world's biggest producer of rough diamonds in carat terms, said it had completed a pilot deal with a Chinese client using yuan in the summer and another non-dollar transaction with an Indian client.

Other companies working on similar transactions include energy firm Surgutneftegaz, agricultural company Rusagro and miner Norilsk Nickel.

Russia's central bank said this week the amount of non-dollar dealings was growing, with the share of rouble settlements in the Russia-China and Russia-India goods trade now between 10 and 20 percent.

The share was higher in the service industry, it added.

But there are limits to how much business can be shifted. Major companies still rely heavily on dollar deals and most of Russia's foreign earnings come from oil sales priced in dollars.Major companies still rely heavily on dollar deals and most of Russia's foreign earnings come from oil sales priced in dollars.

In addition, foreign banks with major U.S. activities may still be wary of business with any entity under U.S. sanctions even if transactions are not in dollars, bankers say.

The United States and its allies imposed sanctions on Russia in 2014 over Moscow's annexation of Crimea. Washington said in August more measures could follow, after accusing Moscow of using a nerve agent against a former Russian agent and his daughter in Britain.

The new steps, which could be announced in November, may target dollar dealings, U.S. lawmakers have said.

Speed helps

One challenge facing companies dealing in the rouble is the Russian currency's volatility. Between April 6 and 11, after Washington imposed sanctions on Russian billionaire Oleg Deripaska and some of his companies, the rouble lost almost 13 percent of its value against the dollar.

Alrosa said it avoided the fluctuation risk by completing the Chinese deal in a day. U.S. dollar deals tend to take longer due to associated compliance checks required.

"An increase in the speed of operations is an advantage in such an operation," the company said in a emailed statement.

Alrosa did not give a value for its China and India deals but said the Chinese buyer had bought a lot at its auction of diamonds of 10.8 carats or larger in Hong Kong. Alrosa data indicates that its lots are on average worth about $100,000.

Alrosa said the banker for its Chinese deal was Shanghai office of VTB, Russia's second largest bank. An industry source, asking not to be named, said Russia's biggest bank lender Sberbank worked on the Indian deal.

VTB and Sberbank declined to comment.

The Chinese client settled its purchase in yuan, which VTB converted into roubles and transferred to Alrosa.

"We carried out the transaction itself in one day, in several hours," Alrosa said, adding that on this occasion the currency move was in the client's favour."We carried out the transaction itself in one day, in several hours."

No currency hedging was required because of the speed of the deal, the company said, but the client had to open an account in VTB's branch in Shanghai to complete the transaction.

Alrosa said it was also considering settlement for future deals in Hong Kong dollars, adding that other Chinese clients had shown interest in non-dollar transactions.

But there are limits on how much of Alrosa's business can switch to other currencies. China accounts for just 4 percent of its sales, while India accounts for 17 percent.

Among initiatives by other Russian firms, Surgutneftegaz has been pushing buyers to agree to pay for oil in euros instead of dollars, Reuters reported in September.

Russian farming conglomerate Rusagro told Reuters that some of its trading operations were in yuan and said this would increase with the expansion of business with China.

Russian nickel and palladium producer Norilsk Nickel said it was discussing the option of rouble payments with foreign customers which have rouble revenue, although it said it had not secured deals under those terms.

(Reporting by Polina Devitt, Polina Nikolskaya, Darya Korsunskaya, Diana Asonova, Elena Fabrichnaya, Olga Popova and Tatiana Voronova; Writing by Katya Golubkova Editing by Edmund Blair)

Norway, EU ask WTO to set up panel on US steel, aluminium tariffs

OSLO, Oct 18 (Reuters) – Norway, the European Union and several other countries asked the World Trade Organization (WTO) on Thursday to set up a dispute resolution panel to address U.S. tariffs on steel and aluminium.

The United States imposed a 25 percent duty on steel imports and a 10 percent tariff on aluminium imports, effective from March 23 in what U.S. President Donald Trump said was a move to protect U.S. metal makers.

"We believe that additional U.S. duty on steel and aluminium is contrary to WTO rules," Norwegian Foreign Minister Ine Eriksen Soereide said in a statement."We believe that additional U.S. duty on steel and aluminium is contrary to WTO rules."

"Therefore, together with the EU and several others, we asked today the WTO to establish a dispute resolution panel on the U.S. additional duty," she said.

Norway said initial consultations with the United States had not led to an agreeable solution, and therefore the Nordic country had joined others in asking the WTO to set up the panel to obtain an independent assessment of the matter.

Norwegian exports of steel and aluminium in the categories affected by additional duties were worth close to 36 billion Norwegian crowns ($4.36 billion) in 2017, according to the Foreign Ministry.

"Although our exports to the United States of steel and aluminium are modest, this case is fundamentally important," Soereide said. "An open economy such as Norway is dependent on the rule-based multilateral system functioning."

The European Union is by far the largest market for Norwegian steel and aluminium.

In Brussels, meanwhile, the EU, Norway and Switzerland sought Asian support for free trade, the Iran nuclear deal and fighting global warming at a regional summit that included China, Japan and Russia as a counterbalance to a more protectionist United States.

($1 = 8.2556 Norwegian crowns)

(Reporting by Nerijus Adomaitis; Editing by Mark Heinrich)

Rising iron ore prices seem to defy economics

(Bloomberg Opinion) — China’s switch from industrial-led to consumption-led growth seems to be showing up everywhere except the production numbers of iron-ore miners.Vale SA, Rio Tinto Group and BHP Billiton Ltd., which together produce close to half the iron ore dug up globally, have all reported figures for the September quarter that look remarkably robust. At Vale, quarterly output broke through 100 million tons for the first time on record with a 10 percent year-on-year increase. BHP managed the same production boost, with only Rio Tinto losing ground after a death at one of its pits in Australia’s northwest.

That confidence has been validated by prices for their key product. As we argued a couple of months ago, the trade tensions that have sunk LME copper in recent months actually proved rather benign for rust, which has risen about 10 percent over the past six months. The red metal, meanwhile, has fallen by the same amount.

The mystifying thing about this price action is that it’s confounded by China’s consumption data. Apparent demand – as measured by domestic production, plus net imports, plus drawdowns from port inventory – has slumped this year to its lowest level on a seasonal basis since 2010. August and September are traditionally the peak of the market, but the August figure this year has been lower than what we’ve seen around the Lunar New Year trough of late.

A look at finished-steel production data at first seem to ratify that conclusion. Screen out the swings of the annual-output cycles, and the market appears to have been standing still since 2016, with no significant year-on-year growth.

That seems to defy economic logic. If demand is flat or falling and supply is increasing, prices should be weak. So what gives?

The best explanation is that China’s notoriously sketchy data is finally starting to resemble reality a little more closely. Have another look at those steel production figures in the chart above, for instance: While finished steel is treading water, measures of the intermediate products of pig iron and crude steel have jumped over the past year to record levels.

It’s similar when you look at the iron-ore demand data. Shipments reported by China’s customs bureau and movements in port inventory show a remarkably stable pattern. The real trend break this year comes entirely from a collapse in reported domestic output figures:

What seems to be happening is that iron-ore output has been overreported while the figures for pig-iron and crude-steel have been underreported for many years. That’s probably a result of the way China’s statistics bureau leans on data sampling from larger operations, and how the country’s ongoing restructuring of its heavy industry has regularized and consolidated a lot of steel production previously happening off-the-books at small-scale furnaces.

There’s another problem, though. As Sanford C. Bernstein & Co. analyst Paul Gait pointed out in a note to clients earlier this year, finished-steel output should never be consistently greater than that for crude steel, since there tend to be production losses along the way. China also doesn’t import crude steel in any significant quantities.

How does this fit together with the miners’ production data? One argument in favor of Vale, Rio Tinto and BHP has always been that their ore is higher quality than that of China’s mines, with an average iron content of 62 percent or more compared with 40 percent or less in domestic pits. As such, it’s been able to displace costlier, lower-quality local product, especially as tightening pollution controls have increased the attraction of the better imported stuff.

The way China’s iron and steel data have been normalized over the past year suggests this process has further to run, especially as fixed-asset investment in the country’s steel industry has been booming this year. The world’s iron-ore miners have had a hell of a ride over the past decade. It ain’t over yet.

(By David Fickling)

Nucor profit miss, steel market oversupply worries dent shares

Oct 18 (Reuters) – Nucor Corp posted a quarterly profit short of analysts' forecasts on Thursday and investor concerns that the U.S. steel market may be grappling with oversupply, undermining President Donald Trump's tariffs on imported steel, sent the company's shares lower.

Shares of the largest steel producer in the United States fell as much as 3.7 percent to $56.91, as a dip in steel shipments from the second quarter put investors on alert that the market may be oversupplied.

"There appears to be too much inventory in the channel right now, and this has impacted mill orders and volumes in early fourth quarter,” Longbow Research analyst Chris Olins said.

Nucor posted a profit that nearly tripled in the third quarter as a strong economy and the 25-percent tariff imposed in March boosted shipments and drove prices for its steel 23 percent higher.

The imposition of the tariffs on steel imports raised futures prices for U.S. hot-rolled coil steel from $660 a ton in January to $924 at the start of June, but they have since fallen back to $834.

"Hot rolled coil prices continue to grind lower and our channel checks suggest large size orders at $800/ton or below," said Credit Suisse analyst Curt Woodworth, who has previously downgraded the sector on concern over a glut in U.S. supply.

Nucor, which makes and distributes sheet steel, beam blanks and bar steel for a wide range of industries, also warned that its fourth-quarter earnings may be lower than the third quarter because of seasonality, but said that it sees sustainable strength in end markets.

The Trump administration went ahead with tariffs on aluminum and steel imports on March 23, but exemptions for Canada, Mexico and the European Union were only removed in June, and should continue to boost U.S. producers.

But analysts worry that the Nucor's investments in new production plants, including a $240 million rebar mill in Florida, and other steelmakers' plans to ramp up capacity will exacerbate oversupply.

Net sales at the Charlotte, North Carolina company rose to $6.74 billion from $5.2 billion, beating estimates of $6.63 billion.

Net income attributable to shareholders rose to $676.66 million in the third quarter ended Sept. 29 from $254.85 million a year earlier.

Excluding items, the company earned $2.33 per share, short of estimates of $2.35, according to data from Refinitiv.

Nucor shares pared losses in afternoon trade and were down about 2 percent to $58.04. They are down 7.5 percent this year.

(Reporting by Rachit Vats; Editing by Anil D'Silva and Bernard Orr)

Caterpillar’s smallest rotary Blasthole Drill features flexibility, transportability and performance

The new Cat® MD6200 Rotary Blasthole Drill is designed as a production drill with the flexibility to do pre-split drilling—all in a package that is Caterpillar’s most transportable rotary drill yet. The versatile MD6200 is designed to perform rotary or DTH drilling in single-pass or multi-pass modes and can drill holes of 127 to 200 mm (5.0 to 7.87 inches) in diameter.

The MD6200 offers the ability to drill at a negative angle up to 15 degrees, which enables matching the slope of the highwall for pre-split drilling. The result is cleaner highwalls with less waste material going to downstream operations. For traditional production drilling, the mast can tilt from vertical out to 30 degrees. The operator can adjust the mast angle in increments of 5 degrees from the touch screen in the cab—with no special setup required.

Transportable and maneuverable

The MD6200 can be transported over the road with the mast on, so it can simply roll onto a truck when it’s time to move to another site. The new drill also has the smallest shipping envelope of any drill in its class. In some configurations, parts outside the shipping envelope can be removed without the use of lifting tools, allowing two people to prepare it by hand for shipping.

The drill also offers best-in-class maneuverability. Its compact working envelope and powerful undercarriage get it into position faster, reducing the time spent accessing drill patterns and moving between holes. The Cat 336 excavator-style undercarriage provides superior durability, tractive effort and drawbar pull.

Integrated Cat power train and electronics

A Cat C18 engine powers the drill and is rated to meet the needs of any mine site. It is available in US EPA Tier 4 Final configuration and in US EPA Tier 2 equivalent configuration to suit regional needs. The Cat power train delivers high efficiency and reliability.

Both high pressure and low-pressure compressor configurations offer variable volume air control, perfectly matching the compressor output to the drill tool and application needs. The system also lowers stand-by pressures while the machine is idle, further improving fuel efficiency.

Proven Cat electronics control the MD6200 and offer technicians the same architecture used on other Cat machines. Integrated machine protection features and interlocks help keep operators safe and the machine up and running by preventing potential failures and operating errors.

With Product Link™ Elite, drill health metrics are easy to download, and managers can track drill performance in real time. The MD6200 electronics also provide a platform for automated controls.

Ergonomic cab and automation options

The MD6200 is designed to promote operator comfort and productivity. The cab offers ergonomic controls, which help the operator remain productive and efficient through the entire shift. Optional upgrades, such as a heated, ventilated seat with heavy-duty suspension and dual-pane glass, help operators stay comfortable. Multifunction joystick controls and touchscreens are intuitive to use, and three standard cameras give the operator awareness of the work area.

Cat technology options make the MD6200 even more productive and efficient. Drill Assist offers a number of automated functions, including auto level, auto retract jacks, auto raise and lower mast, and auto drill. The drill depth monitoring system helps to reduce over- and under-drilling—to optimize productivity and fragmentation.

The MD6200 is also ready for Cat Terrain for drilling, which uses state-of-the-art guidance technologies to help operators drill holes in the exact location and specified by the plan, resulting in smoother, safer and more efficient blasting.

For more information, contact the local Cat dealer or go to: www.cat.com/drills

Rio Tinto announces support for North American employees affected by family and domestic abuse

18 October 2018 – Rio Tinto today announced a package of measures to protect and support employees in North America who are experiencing domestic and family abuse, or who have an immediate relative who is experiencing abuse.

Employees can now access up to 10 days of paid extra leave, flexible work hours, financial aid and emergency accommodation.

Rio Tinto will also provide training to equip leaders and human resources team members with the knowledge and skills to address family and domestic violence issues.

Rio Tinto Aluminium chief executive Alf Barrios said “The safety and wellbeing of the people who work with us is our number one priority at Rio Tinto and this extends to the home.

“Domestic abuse affects so many people throughout society and there is a clear role for employers to play in addressing this issue.

“For families affected by domestic or family abuse, having a supportive workplace can be a lifeline at a very difficult time.

“We hope taking this step will not only protect and support people in need, but help to educate and drive change in attitudes towards abuse.”

Rio Tinto is being supported in its roll-out of the measures by Michael Kaufman, co-founder of White Ribbon, a global campaign of men working to end violence against women.

Dr Kaufman said “This is a significant step to have Rio Tinto lead the way for companies in North America and really step up to play a role in addressing domestic and family abuse.

“This is an issue in communities around the world and we all must play a role in ending it.”

The package of measures include:

  • 10 days additional paid leave available to employees who are victims or employees with immediate
    family who are victims of family and/or domestic violence and abuse
  • Advice and services for implementing safety plans to protect at-risk employees at work including
    security, new telephone numbers, screening or blocking calls and email protection
  • Short-term financial assistance and emergency accommodation can also be provided as required to
    employees who need immediate help
  • Access to 24 hours support services and a range of specialised assistance
  • Training for leaders and human resources teams to equip them with the skills to recognise and respond
    to issues of family and domestic violence in the workplace.

The measures were implemented by Rio Tinto in Australia last year, where the company is now White Ribbon accredited.

Eurasian Resources prevents dumping of over 88 kt of waste in Kazakhstan in the first half of 2018

Through its programme ‘Turning Waste into Profit’, Eurasian Resources Group (“ERG” or “the Group”), a leading diversified natural resources group, uses up to twenty types of waste – generated from its activities – to manufacture new products, help address environmental issues and strengthen its bottom line. 

Launched in 2017, the initiative allowed ERG to sell over 150 kt of waste generated by its operations in Kazakhstan for subsequent processing into products such as noise insulation materials, refractory coating, polymers and substitutes for expensive coke and fluorspar. In doing so, the Group has helped mitigate the adverse impact of waste disposal into landfills and generated a profitin excess of $3m in 2017 alone.

In the first half of 2018, ERG has helped to prevent the dumping of over 88 kt of waste and already earned circa $2.6m from its sale.

Commenting on the programme, Ayan Bedelkhan, Head of Non-core Product Sales at ERG Commercial Centre LLP, a subsidiary of the Group that presides over the sale of waste, said: Addressing key environmental issues is a priority for ERG. Through ‘Turning Waste into Profit’, ERG is committed to managing waste in a responsible manner.”

He added: “At the same time, the sale of waste as recyclable materials has proved to be a profitable business. It also drives an increase in tax revenues in the regions that ERG sells waste to local companies which they sell as a processed, finished product.”

On top of having a positive economic impact, the initiative also helps to improve the environment of the towns and cities that are home to ERG’s operations.

Svetlana Mogilyuk, Chair of ECOM LLP and Director of the Aarhus Centre in Pavlodar, said:  The reduction of industrial waste accumulation is a key priority for Kazakhstan as it aims to transition into the ‘Green Economy’, as was set out in the Presidential Decree in 2013. Through ‘Turning Waste into Profit’, ERG demonstrates that companies can reduce their environmental footprint and obtain significant economic benefits at the same time. We are glad that the Group has found ways to reduce waste generation as well as the associated air, soil and water pollution and transform waste into useful products.”

China's Zijin sees 2018 gold output at about 37 tonnes

TIANJIN, Oct 18 (Reuters) –

* Zijin Mining Group Co Ltd, one of China's biggest gold miners, will produce around 37 tonnes of the precious metal in 2018, its chairman said on Thursday.

* The company's gold output will be flat or a little lower than last year, Zijin Chairman Chen Jinghe told Reuters on the sidelines of a conference in Tianjin.

* Zijin is "paying attention" to Tanzania but "not yet negotiating", he said, after Reuters reported earlier this year that it would set up a joint venture with Acacia Mining, a unit of Barrick Gold, to develop Tanzanian gold mines.

* Zijin, which last month agreed to acquire Canadian miner Nevsun Resources Ltd for C$1.86 billion, has already had some preliminary communication with Freeport McMoRan Inc over development of the Timok copper project in Serbia, Chen added.

* The lower zone of Timok is a joint venture between Nevsun and Freeport

(Reporting by Tom Daly; Editing by Sunil Nair)

Zinc, lead, other metals debut trading on Shanghai physical platform

BEIJING, Oct 18 (Reuters) –

* A total of 41 transactions were made on cash-settled lead, zinc, tin and nickel futures warrants in their trading debut on Thursday, the Shanghai Futures Exchange (ShFE) said in a statement

* Total volume reached 252 million yuan ($36.3 million), it said

* Chalco, Tongling Nonferrous Metals Group, Sinosteel , Trafigura and Mercuria were among the 44 companies that transacted using the platform

* The bourse said it will add more products into the standard warrants trading platform and will look into launching non-standard warrants trading and over-the-counter derivatives in order to meet market demand

* ShFE started trading copper and aluminium futures warrants in May ($1 = 6.9364 Chinese yuan)

(Reporting by Muyu Xu and Dominique Patton; Editing by Manolo Serapio Jr.)

Canada drops US-made aluminum-can tariff amid beer can shortage

TORONTO, Oct 18 (Reuters) – Canada's move to drop a 10 percent duty on U.S.-made aluminum cans is good news for Canadian beer makers battling a shortage of tall cans, according to brewing industry executives.

The aluminum products excluded from tariffs last week include cans that brewers have been struggling to keep in stock, said Luke Harford, president of trade association Beer Canada. Reuters reported in July that some Canadian breweries were scrambling to find aluminum cans.

"It's very positive for us," said Harford. "The 473 ml tall cans are all purchased from U.S. suppliers and that particular can is one of the fastest-growing cans… particularly amongst small brewers."

Canada announced tariff exemptions on a range a products last week after the domestic industry complained of shortages that could affect production of everything from cars to beer. The rollback underscores the unintended consequences of retaliatory tariffs.

The Canadian tariffs on cans were part of its response to U.S. President Donald Trump's steel and aluminum tariffs. But they hit a product already in short supply after the closure of a Crown Holdings Inc plant in Massachusetts in January.

At least one small brewery, Alberta's GP Brewing Co, was forced to halt production for two weeks in July after it ran out of cans. Harford said many other producers are still filling cans with beer as quickly as they can get them.

Steve Beauchesne, co-founder and chief executive of Beau's Brewing Co in Ottawa, said his brewery is waiting three to four months for orders to be filled, and has had to delay some product launches.

He said the tariffs had effectively benefited U.S. brewers, whose filled cans of beer were not subject to the tariff when they crossed the border into Canada: "By making us exempt, they're at least putting us on even footing."

While small breweries were most vocal about the shortage, Harford said all Canadian breweries selling beer in tall cans rely on U.S. producers. Tall cans are made by Ball Corp as well as Crown, according to Harford.

Major beer companies with operations in Canada include Molson Coors Brewing Co and Anheuser Busch Inbev's Labatt Breweries of Canada.

(Reporting by Allison Martell; Editing by Dan Grebler)

Hudbay investor is said to seek changes to miner's board

An investor in Hudbay Minerals Inc. wants to meet with the Toronto miner to discuss replacing members of its board, as well as to seek assurances it won’t pursue acquisitions or joint venture without consulting shareholders, according to a person familiar with the matter.

Waterton Global Resource Management has expressed its concerns to Hudbay Chairman Alan Hibben, telling him that it would reserve the right to do anything it deemed necessary to improve the company’s performance, said the person, who asked not to be identified because the matter isn’t public.

Waterton Global Resource Management — which has been building its position in Hudbay — now holds about 7 percent of its shares, up from 4.8 percent, a source said.

Waterton — which has been building its position in Hudbay — now holds about 7 percent of its shares, up from 4.8 percent, this person said.

Hudbay has invited Waterton to meet with some of its directors after management had a brief, first meeting with the firm on Aug. 31, a representative for Hudbay said in a statement.

"Hudbay’s management and board routinely engage with shareholders and carefully considers their input," the representative said. "To the company’s knowledge, the shareholder you mention has been invested in the company for a short time."

A representative for Waterton declined to comment.

Waterton is asking Hudbay to agree to a moratorium on acquisitions after news that the company is in talks to acquire Mantos Copper SA, a Chilean miner.

Waterton outlined its opposition to the deal in a public letter on Oct. 4. The private equity firm is concerned that Hudbay hasn’t given it assurances that it won’t pursue the transaction in any form, the person familiar with the matter said.

Hudbay mines for zinc and copper, primarily in Canada’s Manitoba province. Its shares have fallen about 45 percent this year amid a slide in copper and zinc prices.

Hudbay is the second Canadian miner to be pushed for changes this year by a activist shareholder. Detour Gold Corp. is in a proxy battle with Paulson & Co., which is seeking to replace its entire board.

China seen sustaining recovery in global mining M&A

TIANJIN, China Oct 18 (Reuters) – A rebound in mining mergers and acquisitions is set to continue into 2019, led by companies from top metals consumer China, as a dearth of exploration spending leaves the industry in need of fresh investment, delegates told a conference on Thursday.

Sector M&A in mining powerhouse Canada had its best quarter in more than seven years in July-September, spurred by Barrick Gold Corp's planned $6.5 billion acquisition of Randgold and Chinese firm Zijin Mining's C$1.86 billion ($1.43 billion) deal to buy Nevsun Resources .

"We think that this year and next year will be the years of consolidation," Keith Spence, president of Canada-based Global Mining Capital Corp, told the China Mining conference in Tianjin.

Spence, whose company co-invests in mining projects with Chinese firms, told Reuters he had been pushing them to buy assets three or four years ago when metal prices were low, to no avail. "Now the market is up and we're getting a lot of interest from the Chinese," he said.

When nobody is replenishing reserves, a round of M&A or consolidation to kickstart investment is the only answer, Spence explained. "People used to talk about peak oil. I think people are starting to talk about peak gold and in some ways peak copper." "People used to talk about peak oil. I think people are starting to talk about peak gold and in some ways peak copper."

Chinese investors are increasingly keen on battery metals such as lithium and cobalt, delegates said.

"We have more clients coming to us for consultancy services" on gold, lithium and copper projects, said Ken Su, a transaction services partner at PWC.

China's Tianqi Lithium in May agreed to buy a 24 percent stake in Chilean lithium miner SQM, for $4.1 billion, although that deal is currently being contested in Chile's courts.

Chinese firms are now "more willing to invest in projects that are in the early stage of exploration," Su said, adding that PWC was predicting a "huge wave of investment" in mining.

Trevor Hart, global head of mining at KPMG, noted that miners have been optimizing assets and reducing debt for more than a decade.

"There is very good and sound logic to that but it has had the effect that the mining sector now needs to invest for future growth," he said. "It needs to replace or add reserve inventories or it needs to develop new assets."

"We see an uptick in M&A activity globally and we also see the significant increases in exploration budgets … and these will be the themes of the coming few years," Hart said. ($1 = 1.3039 Canadian dollars)

(Reporting by Tom Daly; Editing by Keith Weir)

Freeport CEO may be ready to sell, but are there any buyers?

Freeport-McMoRan Inc.’s annual LME Week party is usually an opportunity for Chief Executive Officer Richard Adkerson to hobnob with the traders and consumers who buy copper from his mining company. At this year’s event, he was surrounded by investment bankers.We are probably not going to see massive M&A from the majors in the next 12 months.

With its biggest stock overhang — a deal around its flagship asset in Indonesia — close to being solved, the miner has said all options are open, even potentially a sale of the entire company. The comments will have everyone running the numbers. The question is, who would want to buy it?

Major miners, including Rio Tinto Group, have said they’re keen to boost production of copper, the industrial metal that’s benefiting from demand for new energy systems and rechargeable batteries. But with many companies still battle-scarred from previous debt-fueled acquisition sprees, and trade tensions threatening global growth, analysts say making a play for the world’s largest publicly traded copper producer would mean swimming against the tide.

‘$20 billion plus’

“I’m not sure there is a buyer for large-scale assets at premium in the market now,” Christopher LaFemina, an analyst at Jefferies LLC, said in a phone interview from New York. “Even though they all want copper, who’s going to spend $20 billion plus?”

Freeport is in the final stages of multi-year negotiations to divest a bigger stake of its copper-and-gold mine in Indonesia in exchange for a new contract to operate Grasberg into 2041. Years of uncertainty over ownership of the giant mine have made the company difficult to value and its stock volatile, leading to speculation about Freeport’s future once it’s resolved.

There are multiple ways buyers could approach Freeport with the aim of growing their copper portfolios, including forging partnerships, buying individual assets, or trying to swallow the entire company.

In a recent interview, Adkerson, 71, made it clear all options are open, and said if a full-takeover offer emerged that was good for shareholders, the Phoenix-based company would not try to block it.

But Jeremy Sussman, an analyst at Clarksons Platou Securities Inc., says it’s too soon for that kind of play. “Failed acquisitions of the past are still front and center in management’s eyes,” Sussman said by phone.

“The mentality among the major miners continues to be one of austerity,” LaFemina says. “If it’s not broke, don’t fix it.”

Freeport’s enterprise value to Ebitda ratio, a gauge of valuation, has fallen in the past year versus the comparable copper prices, suggesting the company is undervalued. LaFemina estimates fair value for the full company — which had a market capitalization of $18.4 billion at the end of trading on Tuesday — to be about $34 billion.

Of that, Freeport’s post-divestment share of Grasberg is worth about $10 billion, he said. Given the complexity of the Indonesian mine and it’s environmental footprint, LaFemina doesn’t think any other publicly traded company would want to own Grasberg — Rio is already divesting its own stake as part of the broader deal — though Chinese buyers might.

Freeport slipped 1.2 percent to $12.53 at 11:49 a.m. on Wednesday in New York.

‘Logical approach’

While Freeport has no plans to sell its Indonesian operations, it wouldn’t stand in the way of a deal that made sense for all parties, Adkerson said in the Oct. 4 interview. State-owned PT Indonesia Asahan Aluminium has a Right of First Offer for Grasberg if a buyer emerges who doesn’t have experience in underground mining. If that happens, Freeport would help establish a good relationship between the buyer and the Indonesian government to ensure everyone a smooth transition, he said.

“The logical approach would be to split the company between Grasberg and everything else,” LaFemina said of Freeport. “But even then, who buys everything else?”

Freeport’s remaining mines are all in the Americas. The most significant assets are a 54 percent stake in the Cerro Verde mine in Peru, a 51 percent stake in El Abra in Chile and a 72 percent stake in the Morenci mining complex in Arizona. Those operations already include, to varying degrees, partnerships with Sumitomo Metal Mining Co., Cia. de Minas Buenaventura SAA and Codelco.

Regularly approached

The company is regularly approached about partnerships, including by Chinese companies, and Rio is also interested in “looking for opportunities to partner with us,” Adkerson said in the interview.

Rio is keeping watch on a list of potential options to boost its copper portfolio and has the balance sheet strength to pay a premium if needed, CEO Jean-Sebastien Jacques said in an August interview. The producer made a thwarted approach to add the giant Collahuasi operation in Chile during the 2015 commodity slump, according to people familiar with those talks, and Jacques told investors on a February earnings call he keeps a “Christmas list” of four or five key assets.

Debt could also be an issue for a potential buyer. Like most of its peers, Freeport sold assets in the last downturn to slash debt. At the end of the second quarter, total debt was a little over half the level five years earlier, but still more than $11 billion.

Faced with that, there needs to be a clear reason to pull the trigger, LaFemina said.

“The industry has to be rewarded for growth before deals of this scale would happen, and that’s not the case in the market today,” he said.

(By Danielle Bochove)

Chilean govt to seek international arbitration over Albemarle contract

SANTIAGO, Oct 17 (Reuters) – The Chilean government said on Wednesday it would seek international arbitration over what it alleged was the failure of lithium miner Albemarle Corp to adhere to the terms of a contract drawn up in 2016.

The state development agency Corfo said U.S.-based Albemarle had failed to make a "serious" offer for as much as 25 percent of its annual production capacity to be provided at a discounted rate to companies seeking to produce battery materials within Chile.

The deal is intended to spur a value-added lithium industry within the Andean nation.

Corfo will refer the dispute to the Paris-based International Chamber of Commerce, it said.

Albemarle said in a statement last week that it had made several price offers. Corfo said it "firmly" believed that Albemarle's proposal did not meet with the terms of the contract.

"Corfo wants to find a solution as soon as possible that will allow it to invest… in the creation of a value-added lithium industry," it said in a statement.

In March, Corfo awarded contracts to Chile's Molymet, China's Sichuan Fulin Industrial Group and a joint venture between Samsung SDI Co Ltd and South Korea's POSCO to produce battery components in Chile using discounted lithium from the Atacama, for a total investment of $754 million.

(By Aislinn Laing; Editing by Peter Cooney)

Hedge funds reeling from gold jump have five charts to watch

Hedge funds that doubled down on bearish gold wagers are facing a gut check.The metal is in the middle of a surprise advance, posting the fastest rally since the Brexit vote as a surge in haven demand combines with seasonal buying. The sudden snap of its unlucky streak — bullion has declined every month since April — blindsided fast-money investors, but that could be good for gold bugs.

Here’s the bullish case for the yellow metal in charts as well as one big, fat caveat:

Speculators boosted their net-short position in bullion futures and options to the largest since at least 2006 in the week ended Oct. 9, according to government data released last week. That was just before gold’s biggest one-day jump since 2016.

ETFs have gone from sellers to buyers of the yellow metal

 

Record hedge fund shorts raise prospect of a short squeeze

Should these shorts find themselves on the wrong-side of a lasting rally, a squeeze may fuel the advance further. The last time hedge funds were net short for an extended period, prices soared almost 10 percent as the positions unwound. The metal edged up to $1,225.94 an ounce as of 12:12 p.m. in London on Wednesday.

Exchange-traded funds have been a source of gold supply from May through September as investors pared their holdings amid a price slump. The tide has turned: In the last week they have added 16.4 metric tons to their assets, the most since April, according to data compiled by Bloomberg.

Gold prices and fund flows are strongly correlated. In every year where holdings went up, gold has increased, and vice versa.

Gold gets new drivers as dollar releases its grip

Thursday’s 2.5 percent surge, which was the biggest jump since the U.K. voted to leave the European Union, blasted spot gold through its 50-day moving average. The momentum has continued into this week, pushing prices over the 100-day MA. For some chart watchers that’s a sign bullion could be set for further gains heading into 2019.

Meanwhile the dollar’s vice-like grip on the shiny metal, which has punished prices this year, is easing. The correlation between the greenback and gold has weakened in recent months, indicating other drivers — such as haven demand from investors fleeing equities — could continue to firm up bullion.

And yet, for all its attributes as a financial asset, gold is still a commodity, and therefore reliant on physical demand. And its key anchor — India — is flagging. The rupee is sliding and local prices of gold are soaring. That suggests demand from the world’s second-biggest buyer during the festival of Diwali next month may be weak for a third year running. Gold's break of 100-day moving average signals upward momentum.

Rupee's decline stokes Indian gold price, threatening demand

(By Eddie van der Walt and Ranjeetha Pakiam)

Glencore chair Tony Hayward latest to drop out of Saudi conference

Oct 17 (Reuters) – Glencore Plc said its chairman Tony Hayward will no longer be attending the Future Investment Initiative conference in Saudi Arabia, confirming a report in the Financial Times.

He is the latest top executive to pull out of next week's high profile conference, amid widespread concern about the fate of journalist Jamal Khashoggi.

Khashoggi, a U.S. resident and Washington Post columnist critical of Riyadh's policies, disappeared on Oct. 2 after entering the Saudi consulate in Istanbul. Turkey believes he was murdered and his body removed. Saudi Arabia has denied that.

The investment summit, dubbed "Davos in the Desert", in Riyadh typically attracts executives from some of the world's largest companies and media organizations.

(By Arathy S Nair, Lawrence White; Editing by Kirsten Donovan)

Zambia's finance minister says new mining taxes will not hit operations

LUSAKA, Oct 17 (Reuters) – Mining companies operating in Zambia will still meet their operational costs even after the government imposes higher taxes in Africa's No.2 copper producer, its finance minister said on Wednesday.Mwanakatwe told parliament that even with the proposed taxes, we are confident that mining companies will be able to meet their operational costs.

Zambia plans to introduce new mining duties, replace Value Added Tax with sales tax and increase royalties to help bring down mounting debt, Finance minister Margaret Mwanakatwe said while delivering the 2019 budget speech last month.

Speaking on Wednesday at the closure of the debate on the budget speech in parliament, Mwanakatwe said Zambia was aiming to boost revenue collection.

Her comment appeared to be a sign that Lusaka will not reverse the proposals to raise taxes in the sector.

"We must register an improved and steady flow of revenue from mining commensurate with the size of extraction."

Mining firms represented by Zambia's chamber of Mines have opposed the proposed tax, while the Association of Zambian Mineral Exploration Companies has said the higher taxes would hurt investment in finding new mines.

Foreign mining companies operating in Zambia include NFC Africa, majority owned by China Non-ferrous Metals Company Limited (CNMC), Canada’s First Quantum Minerals , Glencore, Barrick Gold and Vedanta Resources.

(By Chris Mfula; Editing by James Macharia)

World's top miner embracing the boom in electric car batteries

BHP Billiton Ltd. is boosting sales of the top-quality nickel that’s needed for electric vehicle batteries, another sign the world’s biggest miner is targeting more opportunities in the booming sector.

Sales of refined nickel, a category that includes the premium products used for battery production, jumped 18 percent in the three months to Sept. 30 from a year earlier, according to a statement Wednesday. The company has begun offering more detailed data on nickel and cobalt production amid investor interest in its exposure to the rise of EVs.

BHP’s Nickel West operation in Western Australia is aiming to sell 90 percent of output to the battery sector by the end of next year, switching away from a traditional customer base in the stainless-steel market. 

The nickel sector is becoming a two-tiered market, with a weaker outlook for materials bound for the stainless-steel industry and robust demand growth in the EV sector that’ll support prices, Goldman Sachs Group Inc. said in a note received Tuesday. In a note of caution, Russia’s nickel mining giant MMC Norilsk Nickel PJSC sees EV-related demand slowing in 2019 as some countries cut subsidies to the vehicles.

“The market hasn’t made its mind up about how big a deal battery will be for nickel, but there are a lot of bullish forecasts out there, so it is an area of interest for sure,” Mathew Hodge, an analyst at Morningstar Inc. in Sydney, said by phone.Laboratory tests are also developing methods to produce cobalt sulphate, another key material for rechargeable batteries.

BHP already supplies battery manufacturers including Panasonic Corp., the partner of Tesla Inc., and is studying an expansion plan that would make Nickel West the world’s biggest supplier of nickel sulphate, Asset President Eddy Haegel said in August. Longer-term options could see the unit combine cobalt and nickel materials to develop an intermediate product for the battery supply chain that would command a higher premium.

Existing cobalt production at the unit slipped 11 percent in the September quarter, BHP said. Operations at the division’s Kalgoorlie smelter are expected to return to full capacity by next month after a September fire that caused disruptions, it said.

Even though underlying profit at Nickel West surged in fiscal 2018 on higher prices, the unit’s future is uncertain as it contributes less than 2 percent of BHP’s total earnings. The producer is “happy to retain Nickel West for now, but it could go either way in the future” and the shift to service the battery sector is boosting the asset’s marketability, Chief Executive Officer Andrew Mackenzie said on an August earnings call.

(By David Stringer)

Chinese electric car makers, nurtured by state, now look for way out of glut

HANGZHOU, China, Oct 17 – Humming away in an industrial estate in the eastern Chinese resort city of Hangzhou, electric vehicle designer Automagic is one of hundreds of companies looking to ride the country's wave of investment in clean transportation.

The company wants to find a niche in a crowded sector that already includes renewable equipment manufacturers, battery makers and property developers like the Evergrande Group, as well as established auto giants.

20 enterprises will definitely not be able to develop the entire industry by themselves, and it probably needs everyone to come together, and then gradually get eliminated afterwards.

"This (large number of firms) is inevitable, because whenever there is an emerging technology or emerging industry, there must be a hundred schools of thought and a hundred flowers blooming," said Zhou Xuan, Automagic's general manager, referring to Chinese leader Mao Zedong's ill-fated 1956 "Hundred Flowers" campaign aimed at encouraging new ideas.

China is using preferential policies and brute manufacturing power to position itself at the forefront of global efforts to electrify transportation. By the end of 2017, ownership of new energy vehicles (NEV) – those powered by fuels other than petrol – reached 1.8 million in China, over half the world's total.

With market expectations high, Chinese EV maker NIO, a rival to Tesla, launched a high-profile IPO in New York last month.

In July, the industry ministry published a list of 428 recommended NEV designs built by 118 enterprises throughout the country. It included not only established carmakers like FAW Group and Geely Automobiles, but also small, new entrants with names like Greenwheel, Wuhu Bodge Automobiles and Jiangsu Friendly Cars.

But regulators are already concerned about overcapacity and "blind development." As subsidies are cut, smaller start-ups need to develop a competitive edge.

"After a period of intense competition, the rocks will appear, and the weak will be consolidated or eliminated,” Zhou said.

Strategic gluts

Overcapacity has been a persistent concern for many Chinese industries, with thousands of firms, backed by growth-hungry local governments and supported by risky loans, expanding quickly.

Over the years, China has been forced to take action against price-sapping supply gluts in steel, coal and solar panels, among others.Not all of these electric vehicle hopefuls will make it to the finish line.

Electric vehicles could be next, as local governments feel pressure to create champions while following state instructions to "upgrade" their heavy industrial economies.

Some executives say the market is already distorted by subsidies granted to inefficient and poorly performing firms.

"Right now, the rapid growth of NEVs is not a market choice but government-guided behaviour, with growth stimulated by subsidies," said Li Lei, deputy director of the new energy department of Jiangxi Dacheng Autos, a new joint venture carmaker in eastern China's Jiangxi province.

Though sales soared 88 percent in the first eight months of 2018, hitting 601,000 units, the National Development and Reform Commission (NDRC) has promised to tackle irrational growth in the sector.

In draft rules released this year, it said it would "plan and arrange the new energy vehicle industry scientifically," and block new production capacity in regions where the utilisation rate was less than 80 percent.

But China has often relied on "strategic" supply gluts to boost competitiveness. Excess production in solar power forced producers to reduce costs and compete, subsidy-free, with conventional energy sources.

Liu Xiaolu, sales manager with ICONIQ Motors, a Tianjin-based luxury electric vehicle maker, said the large number of companies could be a "necessary stage" of development for the sector.

"You cannot say that 20 enterprises will definitely be able to develop the entire industry by themselves, and it probably needs everyone to come together, and then gradually get eliminated afterwards," he said.

Competitive edge

Established automakers told Reuters they'd already had plenty of time to prepare for the shift towards electric transportation.

Xu Hongfei, general manager with Zotye Automobile , a mid-sized Chinese automaker, said it had been preparing for China's "exit schedule" from traditional vehicles for more than a decade and had developed core technologies such as batteries.

With a staff of 20, Automagic was founded in 2015 by former engineers from IBM and Geely. It is talking with partners to bring its models to the market.

The company is focusing on small, short-distance family vehicles rather than large-scale cars built by the likes of BYD . It is also seeking better ways to produce, recharge and recycle batteries.

"The most important point is that new energy vehicles need to be energy efficient, with low energy consumption, so we focus on cutting weight and making cars smaller so battery use can be reduced," said Zhong Jin, Automagic's co-founder and chief executive.

GCL, one of China's biggest renewable developers, plans to turn its "new energy town" at Jurong in Jiangsu province into a major manufacturing centre with its expertise in batteries and recycling expertise, and even create a battery rental system.

Although all the companies are trying to get an edge through innovation, Li of Jiangxi Dacheng said success could simply come down to market positioning.

"Our company doesn't have any very big advantages or very big disadvantages and competition is dependent first on branding, second on financing, and third on sales channels," he said.

(By David Stanway, Shanghai newsroom; Editing by Gerry Doyle)

Gold festival demand in top buyer hits hurdle as prices jump

Gold buyers in India, the biggest market after China, may give jewelry stores a miss in the run-up to the Diwali festival this year because of a surge in domestic prices to the highest level in more than two years. Shares of the country’s biggest listed jewelers tumbled on Wednesday.

Bullion has climbed in local markets because of a weak rupee, and rising prices just before the celebrations of Diwali and Dhanteras aren’t good for demand, said Chirag Sheth, an analyst with Metals Focus Ltd. in Mumbai. Plus, “overseas spot gold has, in the last two or three days, shown the first signs of breakout,” he said. “If this trend continues, then it’s going to be a dampener.”While people will make their customary purchases for the festival, the higher prices may trim the amount of gold being bought, he said

The most auspicious day of the year to buy gold is Dhanteras, which falls on Nov. 5, two days before the Hindu festival of Diwali. Wearing or gifting of jewelry is thought to bring good fortune during celebrations and weddings. The last quarter of the year is the season of peak demand, with Indians buying almost 240 metric tons on average in the past four years, according to data from the World Gold Council.

Gold futures on the Multi Commodity Exchange of India Ltd. have climbed about 10 percent this year to the highest since July 2016, while overseas gold fell 6 percent. Analysts expect the rupee to extend its worst run of losses in 16 years. The South Asian nation imports almost all the gold it consumes.

“Demand is very low this year,” said Nitin Khandelwal, chairman of the All India Gem & Jewellery Domestic Council. Still, he remains optimistic of a spurt in purchases around Diwali “as no marriages can happen without jewelry.”

Overseas spot gold climbs near highest since end-July on dollar, haven bid

Titan Co., the nation’s largest maker of branded jewelry by market value, lost as much as 2.2 percent, while Tribhovandas Bhimji Zaveri Ltd. tumbled 3.6 percent, far exceeding a decline of 0.6 percent in the benchmark index.

October through December is typically the strongest quarter for jewelry company earnings, but they will be muted this year, said A.K. Prabhakar, head of research at IDBI Capital Markets & Securities Ltd. Gold has been considered a haven among investors, compared with other asset classes, but rising domestic prices and the rupee depreciation have subdued buying, he said. That’ll cool some optimism among merchants who’d been encouraged by a doubling of gold imports from a year earlier in the past two months.

(By Swansy Afonso)

BHP says it has seen no material impact from trade tensions

Oct 17 (Reuters) – BHP has not seen a material impact from current global trade tensions on its business but remains cautious in the near term, the world's biggest miner said on Wednesday.

"We closely monitor the external environment, in particular the market volatility triggered by current global trade tensions. Though we have not seen a material impact on our business, we remain cautious in the near term," Chairman Ken MacKenzie said in prepared remarks released ahead of the company's annual general meeting in London.

BHP reported an 8 percent rise in first-quarter iron ore production on strong Chinese demand for high-grade ore but cut its fiscal 2019 guidance for copper production citing outages.

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(By Muvija M and Arathy S Nair; Editing by Jason Neely)

Hochschild Mining raises annual production target

Oct 17 – Gold and silver miner Hochschild Mining Plc on Wednesday raised its annual output target and forecast lower mining costs, as its Inmaculada mine in Peru produced higher grade ore.

The company, which operates three mines in southern Peru and one in southern Argentina, raised its full-year production target to 520,000 gold equivalent ounces from 514,000 gold equivalent ounces.

Hochschild also cut its full-year all-in sustaining cost target to $940-$970 per gold equivalent ounce, from $960-$990 per gold equivalent ounce.

Output at Inmaculada mine in Peru, which made up the lion's share of the total output, climbed 9 percent to 196,385 gold equivalent ounces in the first nine months of this year, the company said.

However, total gold production dropped 6.2 percent during the three months ended Sept. 30, albeit in line with the company's expectations, it said.

(By M Muvija, Samantha Machado; Editing by Amrutha Gayathri)

Alcoa to close two Spanish aluminium plants with job losses

MADRID, Oct 17 (Reuters) – Alcoa said on Wednesday it would close two of its three aluminium plants in Spain with a combined annual production of 180,000 metric tonnes, resulting in the lay off of almost 700 workers.

The U.S. company said it was starting a consultation process with workers' representatives and was committed to negotiating a social plan with unions.

Negotiations begin on Oct. 31 and will last a maximum of 30 days, a spokesman for the workers' union told Reuters. The closure plans would affect as many as 3,000 workers if indirect employment was taken into account.

The Aviles and La Coruna plants were two of the least productive due to intrinsic structural problems such as inefficient technology and high fixed costs, Alcoa said in a statement.

"Those problems, together with external market factors such as overproduction in China, high raw material prices and energy costs, have generated significant losses in these two plants in the last two years," the company said.

The Spanish industry ministry on Wednesday called on Alcoa for more information on the closures which it said were due to a lack of investment and structural problems since 2014 and has requested the company find a way to continue with production.

"The government is surprised and worried that, during contacts over the last three months, the company had never reported that it would take this decision," the ministry said in a statement.

The benchmark aluminium price on the London Metal Exchange erased losses after the news about the closure and was up 0.2 percent at $2,037.50 a tonne by 1240 GMT.

(By Robert Hetz, Paul Day; Editing by Sonya Dowsett and Emelia Sithole-Matarise)