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Silver’s new fix
After 117 years of intrigue silver’s secretive price-setting system, closed to all but a few powerful players, came to an end. In its place a new system began in August, closed to all but…
Well this time, at least, there are more observers. But even they have to be quite well-heeled to buy into a proprietary online system where they can watch trades take place. And they take place anonymously.
Critics remain dissatisfied but supporters commend the system for greater transparency and inclusiveness. The fix’s backer, the London Bullion Market Association, plans to implement similar reforms for the gold fix in early 2015. Other prospects include platinum and palladium.
Swiss gold bugs trounced in central bank referendum
Polls predicted a much closer result but 77% of Swiss voters rejected a proposal to strengthen the country’s gold reserves. The referendum called for Switzerland’s central bank to hold at least 20% of its assets in gold and to repatriate its nearly 30% stash held overseas, about 20% in England and 10% in Canada.
The initiative also called for an outright ban on selling central bank gold, a requirement that some critics said would render the bullion worthless.
The Axis of Iron
There was a time when China wanted to shake off its dependency on iron ore’s Big Three of BHP Billiton NYSE:BHP, Rio Tinto NYSE:RIO and Vale NYSE:VALE. That was before those companies started driving out smaller competitors by working the world’s lowest-cost mines to capacity. While Chinese steelmakers enjoy bargain prices, the axis threatens China’s domestic iron ore producers.
With prices now at a five-year low of around $70 a tonne, BHP president of iron ore Jimmy Wilson told media in December that $100 iron ore likely won’t come back. But should the price recover, his company’s poised to be one of the few to thrive.
Meanwhile BHP and Rio, “separately and in joint ventures,” stand accused of similar designs on copper.
From industrial to luxurious, some bright lights of exploration
Precious metals languished for another year while analysts guesstimated their predictions right across the spectrum. But some of the commodities that attracted investor interest ranged from industrial to luxurious. The shale gas boom brought an influx of explorers in pursuit of frac sand, in Canada an endeavour formerly dominated by private companies.
Energy metals got a boost by Tesla Motors’ dramatic announcement of a $5-billion Gigafactory that would turn out lithium-ion batteries for electric vehicles. Should Elon Musk bring his dream into creation, some six to nine new graphite mines would be needed, according to one estimate, along with heightened supplies of lithium. Chris Berry cautioned that the Gigafactory’s success would depend “less on a secure supply of raw materials and more on the long-term price of a gallon of gas.” The historic oil and gas price plunge persisted through the year, but with no discernible effect on Musk’s public persona.
Diamond forecasts continued to show rising prices with medium and long-term demand outpacing supply. As jewellers showed increasing concern about security of supply—and supply that’s ethically sourced—juniors renewed the search for Canadian kimberlites. Most of that activity centred on the Northwest Territories’ Lac de Gras region, the world’s third-largest diamond producer by value.
Another typical Ring of Fire year
Canadian mining’s biggest no-news newsmaker continued to be Ontario’s Ring of Fire region. Now seemingly more the object of competing bureaucracies than active exploration, the issue has prompted at least one call for exceptional initiative and creative thinking. But, as reported in a ResourceClips.com world exclusive, the outstanding degree of stakeholder cooperation can only inspire confidence in human nature.
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