Nickel Gains Most in Week on Signs Producers Are Cutting Output

Nickel climbed, leading increases in industrial metals, amid signs the slump in prices is forcing some producers to curtail production.

Global nickel output is likely to fall as some producers hit a “pain threshold” on lower prices, Dan Lougher, chief executive officer of Western Areas Ltd., said in an interview on Tuesday. Standard Chartered Plc estimates as much as 65 percent of nickel production is unprofitable at current prices. Metals also rallied as China planned a bond program for construction stimulus, which may improve prospects for raw-material demand.

“I still expect a lift in nickel prices from this level going forward,” Casper Burgering, an analyst at ABN Amro Bank NV in Amsterdam, said by phone. “The second half should be better.”


Nickel for delivery in three months advanced 1.3 percent to $10,885 a metric ton by 12:31 p.m. on the London Metal Exchange after rising as much as 1.9 percent, the most since July 28. It’s down 28 percent in 2015 and is this year’s worst performer among the main industrial metals on the LME.

Copper rose for the first day in four after sliding to a six-year low on Monday. The metal is close to a bear market after falling 19 percent from a peak on May 5. Zinc climbed as much as 1.6 percent after orders to remove the metal from warehouses tracked by the LME surged 54 percent.
Bond Stimulus

China is planning at least 1 trillion yuan ($161 billion) in bonds, and potentially a multiple of that, to fund construction projects to address the struggling economy, according to people familiar with the matter. The bond program is taking shape amid fresh signs that growth is running at less than an official target of about 7 percent for this year.

“Prices have lifted for all base metals this morning quite steeply,” Burgering said. “It could be that the market is hoping for some economic stimulus.”

Metals have declined to the lowest since 2009 amid the commodity rout. Oil is in a bear market, while platinum sank 1.7 percent on Tuesday to a six-year low and palladium dropped to an October 2012 low. On the LME, tin and lead increased Tuesday, while aluminum was little changed.

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MRL Heads of Agreement to Pursue Graphene Commercialisation Outcomes

Heads of Agreement (“HoA”) signed with Imagine Intelligent Materials Pty Ltd (“IMAGINE”), an Australian graphene enhanced advanced materials solutions company. 

The agreement will identify commercial applications for MRL’s graphite and graphene. 

Access to graphene testing and characterisation through IMAGINE’s Certification Program

Collaboration with leading Australian universities with whom IMAGINE has existing relationships, for up-scaling of graphene testing and characterisation of graphene products.

Working with IMAGINE’s certified partners and customers pursuing a strategy to access the full spectrum of the graphene value chain through.

Following on from the ASX release of 13 May 2015, in which the Company disclosed that the University of Adelaide had achieved outstanding results on the recovery of graphene from MRL’s highgrade graphite ore, the directors are pleased to announce a significant step in the process to maximise the return on its Sri Lankan Graphite Projects. 

The signing of the HoA between MRL and IMAGINE will give the Company access to a network of advanced manufacturing enterprises and scientific expertise that would not normally be available to a junior mining company. MRL’s graphite projects in Sri Lanka have very high grade vein ore. 

The key challenge in the generation of commercially valuable graphene is the ability to produce consistent and replicable graphene functionalised to meet the requirements of industrial customers. IMAGINE brings knowledge of high volume market applications the understanding of solutions development processes and its own intellectual property. 

The proposed Co-operative agreements between MRL and Imagine are intended to maximise revenue opportunities for both parties through develop premium price graphene solutions for high volume industrial markets.

#Graphene #Graphite #MRL #MRF #ASX #IMAGINE #GRAPHINESOLUTIONS

Buru Energy Looks to Brighter Future with Ungani

Almost four years since it first made the discovery, Buru Energy, and partner Mitsubishi, officially opened the Ungani oil field 100km east of Broome today.

In what the company hopes will be the trigger in a change of fortunes after a tough 12-month period, Buru will produce of 1250 barrels of oil a day at the site with the aim rising to 3000.

Buru received production licences from the Department of Mines and Petroleum in May, following on from the green light it received from traditional owners in April.

However the collapsing oil price put a serious dent in its ambitions for a big-ticket exploration program in the largely untapped onshore Canning Basin, where Ungani sits.

Ungani has produced about 450,000 barrels during two extended production tests spanning two years, with oil trucked to Wyndham for export to refineries. Production flow rates have been capped at 1250 barrels a day.

Buru chairman Eric Streitberg said Ungani was the first oil development in the Canning Basin in over 30 years.

“There was no modern precedent for the development and it took perseverance and co-operation between all the parties to make the transition from a greenfields oil discovery to the current production system,” Mr Streitberg.

Chinese Nickel Imports Jump to 6-Year High as Shortage Looms

Chinese Nickel Imports Jump to 6-Year High as Shortage Looms

China imported the most refined nickel in six years in a further sign that the world’s biggest consumer is drawing on global supply. Futures rose 2.4 percent in London.

Inbound shipments of the metal used to produce stainless steel surged 67 percent to 38,545 tons in June from the previous month, the highest since July 2009, and were more than three times the level a year earlier, Chinese customs data show.

Goldman Sachs Group Inc. and Citigroup Inc. are bullish on prices amid prospects for rising Chinese demand. Macquarie Group Ltd. sees a global shortage which may cut inventories further from a record. Stockpiles in London Metal Exchange sheds have already fallen to the lowest in almost two months. Some imports may have been for delivery against the first nickel contract to expire on the Shanghai bourse, said Celia Wang from Tianjin Zhongwei Group’s investment department.


“Huge imports arrived in China from LME warehouses as traders seek profits by delivering against the first settlement of a Shanghai nickel futures contract,” said Wang, the general manager. “Refined nickel imports are expected to remain at a high level into July.”

The Shanghai Futures Exchange started nickel trading in March and the July contract was the first expiry. The bourse is accepting metal from Moscow-based OAO GMK Norilsk Nickel, the top supplier, for settlement to ease concern about shortages.
Goldman, Citigroup

Prices climbed 2.4 percent to $11,980 a ton in London on Tuesday, the highest level since July 6, before trading at $11,875. Goldman expects rates to increase to $14,000 as the market heads toward a deficit next year, analysts including Yubin Fu wrote in a report dated July 6. Citigroup predicts a 2015 average price of $13,960 and maintains a bullish outlook.

Imports of ferronickel rose more than threefold on year to 62,511 tons, another sign China is seeking foreign supply.

An Indonesian ban on exports of nickel ore at the start of 2014 spurred China to stockpile the material and boost supplies from the Philippines, the only other major source. Inventories of nickel ore in China are now at their lowest since September 2011, according to data from Beijing Custeel E-Commerce Co.

China imported more than 100,000 tons of refined nickel in the first half for the first time since 2009 when buyers took advantage of a slump in demand after the financial crisis.

Buru and Mitsubushi Start Commercial Production at Ungani Oil Field

The cash flow from Ungani marks the next chapter in Buru Energy's growth

Australian oil and gas firm Buru Energy and Japanese Mitsubishi have started commercial oil production at Ungani oilfield in the western parts of the country with the spudding of the Praslin-1 conventional well.

Praslin-1 is located at a 15km from the existing Ungani field and is in the Jackaroo 3D seismic data grid.

Ungani oilfield is a 50:50 joint venture between Buru Energy and Mitsubishi.

Initial production rate for Ungani oilfield is 1,250 barrels of oil per day (bopd). It is expected to be raised to 2,500bopd, and then to a further 3,000bopd within the year.

Buru Energy executive chairman Eric Streitberg said: "The cash flow from Ungani marks the next chapter in Buru Energy's growth.

"Combined with our strong cash position ($41.9m at 30 June 2015), we have the financial strength to fund our aggressive exploration programme and create further growth for shareholders.

"We have the strong support of government and traditional owners for our programmes and an extensive and diverse prospect portfolio to drill. This is a privileged position for a company of our size."

Facilities at the field have been upgraded, which are expected to boost its operations and productions while reduce its costs.

Buru and Mitsubishi intend to expand its hydrocarbon reserves through further explorations near the Ungani field.

The owners have signed a contract with Fuel Trans for cost-effective transportation of oil to the port of Wyndham

Grigor Says Talga and MRL are ‘Catalysts for Disruption in the Graphene Sector’

He says MRL is a new player in the graphene space with the ability to use the same single step, low cost graphene recovery technology

First he singled out Talga, now Warwick Grigor says he has found the other key player in the low cost graphene space.

The Sydney-based resources analyst who runs Far East Capital made headlines in Australian newspapers earlier this year when he proclaimed that he was putting his money where his mouth was and investing a large chunk of his own cash into Talga Resources (ASX:TLG) because of its single-step graphene process.

Now he has picked out another Australian company, MRL Corporation (ASX:MRF) and – again – invested his own money. He says there is room for both in an investor’s portfolio as they are operating in different fields. Talga is looking at a European hub (it is building a pilot plant in Germany and plans to supply European companies from its Swedish project) while MRL (whose deposit is in Sri Lanka) is looking to Asia and Australia as its markets.

As I have said before, Grigor is one of the most experienced Australian analysts of mining companies and, also this year, issued a detailed paper on graphene.

He says MRL is a new player in the graphene space with the ability to use the same single step, low cost graphene recovery technology that Talga “has been holding close to its chest”. His client note is advising taking up shares in MRL because of the differences in valuation: Talga’s market capitalization is A$54 million while that of MRL is A$12.2 million.

There are other differences: Talga’s orebody is much larger and wider, offering long life and technically simple mining conditions. MRL’s orebodies are narrow vein and underground with less amenability to drilling out to prove the size of the resource, but this is offset by the lower costs of working in Sri Lanka.

Another difference is the grade, says Grigor. Talga’s is around 25% whereas MRL’s is over 90%. According to his figure, Talga will need about A$30 million to get into production, MRL less than A$10 million.

He says at this junction Talga is knocking on the door of becoming an institutional-grade stock but has to kick a few more goals to get there, the obvious one being the successful commissioning of the pilot plant. “I don’t think there is much risk here, but the box still needs to be ticked,” write Grigor. By contrast, at A$10 million, MRL is still a private client stock at present; it is difficult to deploy sizeable sums of money into a company with such small capitalization.

Grigor’s second point, arguing that Talga needs to beef up its management team with respect to commercial operations, seems to have been satisfied. Last week Talga signed a non-binding term sheet with Haydale Graphite Industries, based in Britain, which would see the two companies collaborate on the development of finished graphene composite and ink products. [As Roger Bade, at London brokers Whitman Howard noted, “although there is no certainty that this collaboration will come to anything, it could give credibility that both companies – although going along separate routes – are amongst the best graphene plays out there”.]

Grigor draws comfort from the fact that his two picks are essentially non-competitive because of their separate regional focus.

“As each of these companies make progress, sentiment will rub off on other players in the sector as the graphene story becomes more credible,” he says. “Both companies will offer the lowest cost, purest forms of graphene available, so they will both be catalysts for disruption in the graphene sector.”

Perth Mint Gold and Silver Bullion Sales Jump in June

Demand for Australian bullion coins surged in June, the latest Perth Mint figures show. Gold sales scored their highest level since March and silver sales moved the quickest since April. Bullion sales did retreat from a year earlier, however.

Perth Mint sales of gold coins and gold bars advanced 31,019 ounces last month, rallying 43.1% from the 21,671 ounces sold in May but down 21.3% from the 39,405 ounces delivered in June 2014. Gold sales through the first half of the year tally to 168,650 ounces, off 30% from last year’s starting six-month total of 240,991 ounces.

Perth Mint silver coins at 384,586 ounces in June jumped 13.9% from the prior month’s 337,511 ounces yet slipped 34.4% from sales of 586,358 ounces in June of last year. For the first half of 2015, silver sales combine to 2,810,994 ounces for a drop of 18% from the same six-month start in 2014 when sales reached 3,428,336 ounces.

Perth Mint Gold and Silver Sales by Month

Below is a monthly breakdown of Perth Mint bullion sales from June 2014 to June 2015.

Perth Mint Bullion Sales (in troy ounces)
	Silver	Gold
June 2015	384,586	31,019
May 2015	337,511	21,671
April 2015	472,273	26,545
March 2015	638,557	34,260
February 2015	392,114	31,981
January 2015	585,953	23,174
December 2014	477,731	40,211
November 2014	851,836	49,904
October 2014	655,881	55,350
September 2014	756,839	68,781
August 2014	818,856	36,369
July 2014	577,988	25,103
June 2014	586,358	39,405

United States Mint Bullion Sales in June

U.S. Mint bullion sales in June soared over the prior month and the year ago levels. The agency’s core American Gold Eagles at 76,000 ounces leapt 253.5% higher than May sales and jumped 56.7% higher than sales in June 2014. Its flagship American Silver Eagles at 4,840,000 ounces in June surged 139.2% from the prior month and rallied 79.8% from a year ago.

Pacfico Minerals Surges on Copper Hits

Core from Coppermine Creek

Three holes drilled at the Coppermine Creek prospect intersected significant intervals of disseminated chalcopyrite and bands of semi-massive chalcopyrite.

One of the holes returned veins and disseminated chalcopyrite from 38-67m, with the interval from 67-73m corresponding to the Gordons Fault and containing bands of semi-massive chalcopyrite, as well as chalcopyrite fracture fill and disseminations.

The company said the chalcopyrite was associated with only minor pyrite and returned values of more than 25% using a hand-held XRF over widths of up to 30cm.

Assays are expected within a fortnight.

Airborne electromagnetics indicate a 3km by 1km alteration and mineralisation system extending away from the Gordons Fault to the southwest, with further drilling planned to test it.

Pacifico has also started drilling the Bing Bong prospect with the assistance of a NT government grant.

Borroloola West was one of the projects Sandfire floated on in 2004 but the company farmed it out to Pacifico in 2013.

Pacifico expects to earn 51% of the project by the end of the year by spending $A1.5 million under the first phase of the agreement.

The company can earn an additional 19% by spending a further $2.5 million and can get to 80% by sole-funding a bankable feasibility study or spending another $3 million.

Shares in Pacifico jumped 130% to 3.2c, while Sandfire shares gained 1.4% to $5.71

- See more at: http://commoditiesaustralia.blogspot.com.au/2015/07/pacfico-minerals-surges-on-copper-hits.html#sthash.mFOBhgc9.dpuf

The Shanghai Stock Market Crash and China Gold Demand

What Does it mean for the future of the gold market?

At present, up to 12 trillion yuan stays in domestic residents' saving accounts. The launch of individual gold investment, therefore, will allow residents to change currency assets into gold assets. At the macro level, it will expand channels for changing savings into investment, thus adjusting the money supply; in the micro aspect, allowing citizens to trade and keep gold can improve social welfare, benefiting both the country and the population.

Moreover, with the dual attributes of common commodity and currency commodity, gold is a desirable instrument for hedging. Therefore, developing gold trade for individuals is practical." – Zhou Xiaochuan, Governor, the People's Bank of China.

Shanghai stocks have fallen over 30% since mid-June. The equivalent in U.S. terms would be for the DJIA to fall 6000 points to the 11,000 level – a crash by any definition. Most of the commentary on this important subject has centered around the potential contagion effect for stock markets in the rest of Asia and beyond. There is another aspect to the crash worth considering though, and that has to do with the effect it will have on Chinese gold demand.

The Chinese people, it is well known, already have a cultural affinity to gold. That attachment just received a shot of adrenaline. Prior to June, trading volumes on the Shanghai Gold Exchange (SGE) were already running 20% higher than the previous year. Now, with crash psychology affecting thinking up and down the spectrum of investors, SGE is reporting volumes off the charts. In early July, Want China Times reported that "SGE posted a record trading volume of 48.33 million grams in a single day in late June." (48.3 metric tonnes, a big number.)



Typically stock market crashes inspire gold demand. In the case of China, where the government and central bank encourage citizen gold ownership as a matter of public policy, that lesson could become enshrined in the national psyche. The important consideration for investors elsewhere around the globe is what effect even stronger gold demand from China will have on the gold price both now and in the future.

Flow of physical metal between buyers and sellers will govern prices in China not paper trades

Ever since 2011 when China's demand began to ratchet up, clients have asked how the price of gold could be stagnant to down under the circumstances. The short answer to that question is that price discovery for gold does not occur in the physical market, but in the multi-trillion dollar leveraged paper trade in London and New York – a volume that dwarfs the physical delivery market. Now China is about to challenge that price discovery mechanism through significant infrastructure changes slated to take effect by the end of the year.

This new construct has as its base China's fundamental understanding and goals with respect to gold as summarized by Peoples Bank of China governor Zhou Xiaochuan in our masthead quote above; its affinity for delivered physical ownership, as opposed to paper-based metal; and, the official measures it has undertaken to make inroads into the international gold market's price discovery mechanism.

To gain a better understanding of how China is likely to affect price discovery in the gold market, let's start with something of interest that surfaced as a result of the recent Shanghai crash. Financial Times reported rumors floating the markets that Goldman Sachs was responsible for manipulating stocks downward. Officials denied those rumors and a spokesman for the exchange stated that "foreign investors with access to the futures market via theQualified Foreign Institutional Investor (QFII) program were only permitted to use futures for hedging operations and are not allowed to make directional bets. 

All recent trades by QFIIs complied with regulations." Of course if any manipulation of stocks were to occur, it would be executed in the leveraged futures market where bets can be placed at pennies on the dollar.

Up until I read that quote I was unaware of the strict procedures governing foreign trading on the Shanghai Futures Exchange (SHFE), China's only futures trading venue. A further investigation, helped along with some links from Koos Jansen, the Netherlands based expert on China's burgeoning gold market, revealed stringent rules governing trade on the SHFE for domestic participants as well, though not quite as stringent as the rules for foreigners. 

At the heart of those rules, SHFE imposes strict position limitations and margin requirements on traders in order to keep price speculation (or directional bets to use its term) to a minimum. Futures trading in China, clearly is meant to serve as an adjunct to the physical market instead of the other way around as it is in western gold trading centers. 

Hedging is maximized. Speculation is minimized. Leverage is controlled within reasonable parameters.

Link SHFE "Operational Manual for Gold Futures Contract Trading"

As Silver Prices Fall, U.S. Mint’s Silver Bullion Coins Sell Out

Investors still like silver—so much so that the U.S. Mint sold out of its American Eagle Silver Bullion Coins.

The Mint announced the temporary sellout on Tuesday. It said that the U.S. Mint facility at West Point, N.Y., continues to produce the coins and resumption of sales is expected in about two weeks.

The shortages comes at a time when silver futures prices SIU5, +1.49% are falling.On Tuesday, they sank 5% to $14.969 an ounce, the lowest settlement for a most-active contract since 2009. They recovered a bit on Wednesday, though year to date prices have lost more than 3%.

“Silver demand has really come back in the last two weeks, on the break below $16 per ounce,” Adrian Ash, head of research at BullionVault, told MarketWatch.

BullionVault’s Silver Investor Index released Tuesday rose to 56.7 in June from below 50 in May, as the number of private investors buying silver climbed to its highest level in 9 months, while the number of sellers fell to its lowest level in 3 years. The index shows the balance of net buyers over net sellers.

In a note Wednesday, Capital Economics’s Julian Jessop, pointed out that silver has been a “notable casualty of the selloff in commodity markets in the last few days.”

That usually happens when prices of other metals, especially gold but also industrials, are falling, he said. But “assuming metals in general recovery over the remainder of the year, as we expect, silver could now be set to shine.”

Silver Prices About to Hit $50.00 Per Ounce?

Silver is one of the most under appreciated commodities around. Back in 2011, an ounce of gold was worth 32 ounces of silver. Today, that same ounce of gold translates to 74 ounces of the grey metal. Does that mean gold has gotten more valuable or that silver has gotten cheaper? 

Since its peak a few years ago, silver prices have dropped nearly 70%. Gold prices have also fallen by an astonishing 35% during the same period, which convinces me that investors got overly pessimistic about silver during the pullback. 

So, what should the true price of silver be? 

In order to properly value silver, we need the silver-to-gold ratio. Historically, silver shadows the movement of gold prices. When gold drops, silver prices are close behind. 

Over the last 40 years, the conversion averages out to 42.8 ounces of silver for one ounce of gold. But the relationship fluctuates and sometimes one of the metals will become significantly undervalued.

When the ratio drifts too far from the historical average, it usually foreshadows a big run. This has happened three times in the last 20 years; in 1995, 2003, and 2011. The respective gains for silver prices were 70%, 200%, and 420%. 

If we assume the same gold price and use the 2011 conversion rate, silver should be around $36.60. Right now, the price of silver is hovering around $15.90, with a conversion rate of 74.0. 

That being said, how can silver possibly go to $50.00? 

Well, despite its apparent cheapness, silver is simply not as abundant a metal as investors seem to think. When you compare the actual deposits of silver and gold in the earth, the natural multiple is 17.0. Ideally, the physical relationship between silver and gold deposits should dictate the price relationship. 

In order for silver to hit $50.00, the ratio would have to drop to 23.0, assuming that gold stays at its current price of $1,170. 

However, if the stock market bubble finally bursts, investors may flee to gold and silver as a safe haven. Under those circumstances, silver could rise to $50.00 much quicker. 
Follow the Smart Money 

I’m not the first person to notice this amazing buying opportunity. 

In the first quarter of 2015, billionaire investor Ray Dalio loaded up on more shares of Silver Wheaton Corp. (NYSE/SLW). The hedge fund manager now owns 510,000 shares valued at roughly $9.0 million. 

If you want to cash in on a huge silver run, but are hesitant to own silver directly, Silver Wheaton may be a wise choice. The company finances smaller mining firms and pays for any silver they find, thus limiting the downside risks associated with managing a mine. 

The stock is down almost 34% over the last year because of depressed commodity prices, but Ray Dalio and I both think that will change. 

Low interest rates from the Federal Reserve have been propping up the stock market, but a rate hike later this year is virtually guaranteed. And when the market loses support from the Fed, a flight to safety will mean huge gains for silver.

China's Revenge Serves Body Blows to BHP and Rio

China's revenge serves body blows to BHP and Rio

It's taken six years, but China is slowly turning the tables on the heavyweight iron ore miners.

In 2009, iron ore giants BHP Billiton and Rio Tinto decided they wanted to take advantage of China's soaring demand for iron ore, which was pushing prices ever higher. So they ditched the 40-year old system of setting annual contract prices in favour of using spot pricing for the majority of their iron ore shipped to China from 2010.

Needless to say, China's steel mills weren't very happy about that. BHP's previous CEO Marius Kloppers is widely acknowledged as the man most responsible for bringing about the change. With BHP and Rio filling a huge amount of China's demand, the steelmakers had little choice but to acquiesce. 

The changes, and China's thirst for iron ore, saw the iron ore price soar as high as US$191 per tonne in February 2011, from around US$60 per tonne in 2008. Rio Tinto produced record underlying earnings of US$15.5 billion in the 2011 financial year, with iron ore contributing US$12.9 billion. BHP, for its part, saw net profit rise 74 per cent to US$21.7 billion as revenues rose 36 per cent.

China may also still be sore over aluminium giant Chinalco's aborted US$19.5 billion investment in Rio Tinto back in 2010, which was aimed at gaining resource security. At the time, reports suggest Chinese officials feared that China was too vulnerable to both Rio and BHP, even separately. Rio's board canned the deal, and announced that it was instead forming an iron ore joint venture with BHP. That deal never went ahead – much to the relief of China.

The giant (re)awakens

But China has never forgotten, and appears unlikely to forgive. Now the sleeping giant has awakened, and looks set to turn the tables on Rio and BHP.

Firstly, China needed to loosen its dependence on the two Australian iron ore miners, so it has turned to Brazil's Vale. For many years Vale was snubbed by the Chinese. The iron ore giant had built a number of very large ore carriers to ship ore to China, but they have been banned from docking at Chinese ports since 2012.

Now, China hasn't just removed the restrictions but Vale has also sold 4 of the ore carriers to two of China's biggest shipping companies. Each carrier can transport up to 400,000 tonnes of iron ore, and could reduce Vale's production costs by as much as 25 per cent, according to some estimates. That would bring Vale's landed costs around the same as BHP and Rio's.

Vale also has a 25-year shipping agreement with China Cosco to transport iron ore from Brazil to China. China has gone another step further too, loaning Vale US$4 billion to help fund a US$16.5 billion project, known as S11D.

S11D is expected to produce 90 million tonnes of very high quality iron ore each year, taking Vale's production to 450 million tonnes of iron ore within the next few years.

In two moves, China has decreased its dependence on BHP and Rio, loosening their control over the iron ore market, and thanks to the increase supply of iron ore, achieved lower prices.

One last dance? 

Fairfax Media reports today that Chinese-linked companies have applied to the Foreign Investment Review Board seeking permission for an investment with Australia's self-styled 'new force in iron ore' Fortescue Metals Group.

Fortescue, with its US$7.7 billion in net debt, could strengthen its balance sheet with a capital injection, either to pay down debt in return for an equity stake, or refinance existing debt at lower rates. The miner recently issued US$2.3 billion in senior secured notes, but is paying a whopping 9.75 pe cent interest rate, at a time when interest rates around the world are at record low levels.

Fortescue could struggle to repay its debt load if iron ore prices continue to trade at or under US$60 per tonne, with some estimates putting the miner's breakeven price around US$70 per tonne. The company may well be amenable to a deal with the Chinese, particularly after the recent kerfuffle over the iron ore inquiry that was going ahead, but was cancelled.

Australian Households Chase Sun to Lead World on Solar Adoption

Australian Households Chase Sun to Lead World on Solar Adoption

Australian households are world leaders in solar power installation, according to new figures from Australia's peak industry body representing the fossil fuel and renewable energy sector.

The Energy Supply Association of Australia, representing the fossil fuel and renewable energy sector, has sourced data from around the world revealing household solar photovoltaic (PV) penetration in Australia is way out in front of any other nation.

The report shows almost 15 per cent of Australian households have adopted the technology to power their homes.

This is more than triple that of Germans, who are second on the world stage and typically thought of as the most prolific solar adopters.

The report breaks the data down to countries and jurisdictions illustrating where the world's most enthusiastic installers of small-scale solar energy are located.

"Germany, the US, Spain and others are held up as being at the forefront of solar power, but it is Australia, where households have taken it upon themselves to install solar PV, that easily lead the world when it comes to solar penetration," the ESAA report states.

The ACT had 15,637 household installations as of September last year, according to ActewAGL figures. Based on 2011 census data this put the ACT at about 10 per cent of households connected to solar – South Australia leads the way with almost 25 per cent of households connected to solar PV.

Although Australia leads the charge on small-scale installations, Germany is out front with utility-scale solar installations.

In terms of total solar energy produced per million people, Germany's capacity is about triple that of Australia's.

Australian Solar Council chief executive John Grimes said that was due to policies that had focused on domestic solar systems.

"The economics are compelling," Mr Grimes said. "The cost of the technology continues to fall at such a rate that it is already much cheaper to install solar than it is to buy electricity from the grid. And with the advent of cheap energy storage technology – battery technology – that really closes the loop.

"People like the Energy Supply Association and others should rightly be thinking about this. If they don't start to embrace the technology as opposed to resist it, their members companies – the big utilities – are set to become the Kodaks of the future."



See more at: http://australiasolar.blogspot.com.au/2015/05/australian-households-chase-sun-to-lead.html#sthash.248JT0Dp.dpuf

Andrew Forrest Makes Surprise Investment in Atlas Iron (AGO)

Andrew Forrest Makes Surprise Investment in Atlas Iron (AGO)

Mining billionaire Andrew Forrest has emerged as a new investor in rival Atlas Iron, despite continuing to serve as the chairman and major shareholder in Fortescue Metals Group.

Speaking after Atlas announced a strategy to restart mining through lower contracting fees and an equity raising of up to $180 million, the miner's chairman David Flanagan revealed that Mr Forrest had promised to participate in the raising.

"I am just so pleased to be able to announce that Andrew Forrest was the first person to put his hand up and say he was going to invest personally in that raising," he said.

"It is through one of his holding companies, whichever it will be ... we are not going to be sort of a subsidiary of Andrew Forrest Holdings, but it is meaningful in the extent of what we are doing going forward and that is all I can say.

"Thanks again to Andrew for backing Atlas."

Mr Forrest does not currently own shares in Atlas according to Bloomberg records, and the move continues a recent string of investments made by Mr Forrest in small miners.

Mr Forrest last week invested in small Victorian gold producer A1 Consolidated via his private company Minderoo Resources, and also has exposure to uranium play Vimy Resources and nickel junior Poseidon.

Mr Forrest declared earlier this year that he was setting up a new company designed to buy assets during the commodity price downturn, and some believe that company is Minderoo Resources.

Upon launching that new company in March, Mr Forrest vowed it would not compete with Fortescue's current or future strategies.

"A process has been put in place to ensure that if any possibility of doubt regarding conflicting interest arises, the matter will be resolved independently and quickly. I have written to the FMG board asking them to approve this process, and they have returned with their full support for our venture and its governance procedures," said Mr Forrest in March. 

When asked about Mr Forrest's investment in Atlas on Sunday, Fortescue chief financial officer Steve Pearce said he had "nothing to add".

"It is not a Fortescue investment," he said.

Mr Flanagan has announced his support for a federal government inquiry into iron ore, which Prime Minister Tony Abbott announced on Friday after listening to the thoughts of Mr Forrest.

BC Iron chairman Tony Kiernan and Cliffs Natural Resources chief executive Lourenco Goncalves also threw their support behind the inquiry on Sunday, along with Queensland University associate professor of regulator economics, Flavio Menezes.