Gas and solar have brighter future than coal: broker

GOLDMAN Sachs has forecast the end of thermal coal’s reign at the top of the energy ladder, citing tax, production costs and environmental regulations as the reason.

News Ltd reports the broking house said the prospect of weaker demand growth would see seaborne trade in thermal coal peak in 2020.

The news will be a blow to the huge coal projects in Queensland, including the $6 billion Wandoan project, owned by Glencore-Xstrata, and the mega mines in the Galilee Basin owned by Indian companies GVK and Adani, as well as Clive Palmer’s Waratah Coal.

Goldman Sachs said companies were already moving their capital away from energy coal, and cited talks it held with equipment manufacturer Alstom to suggest the downside risk of future regulation could offset any cost advantage coal had to alternative sources.

Despite the poor outlook, Goldman Sachs is not suggesting the end of coal and pointed to the demand for the commodity in China and India.

But it said the energy sources with the most upside were gas and solar power.

 

Read more: Anglo American under fire for planned gold-copper mine in Alaska

The polemic Pebble Mine project in Alaska, a 50-50 partnership between Anglo American (LON: AAL) and Northern Dynasty Minerals (TSX: NDM) is one again the centre of attention, as BBC World News aired Monday an in-depth report on the proposed open-pit copper and gold mine.

The video comes barely a week after the US Environmental Protection Agency (EPA)admitted to have spent $2.4 million in reviewing the proposed project in southwest Alaska.

The deposit, which could be worth as much as half a trillion dollars, hosts 55 billion pounds of copper, 76 million ounces of gold, 3.3 billion pounds of molybdenum, and quantities of silver, palladium and rhenium.

RELATED: INFOGRAPHIC: Pebble Project economics and employment 

If approved, it would become the largest open pit copper and gold mine in the world, but it would also generate tons of potentially dangerous waste material, which would damage the area’s salmon population, one of the world’s most valuable habitats for the fish.

 

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Mixed reactions to state government’s proposed new regulations for mining projects

An anti-mine campaigner has accused the Premier Barry O’Farrell of running a totalitarian regime after the announcement of proposed changes to the way mining projects are assessed.

The state government wants to amend the planning laws to increase the importance given to the economic benefits of mining projects.

Australian Coal Alliance Campaign Director Alan Hayes says the economic benefits of projects such as Wallarah 2 on the Central Coast pale into insignificance when considering the risk to natural assets and human health.

Mr Hayes says Mr O’Farrell has a lot to answer for.

“He’s pandering to the mining companies at the expense of communities and natural resources,” he said.

“He promised the community prior to being elected that the community would have a decision in the planning or decision making of planning approvals and things like that but of course he’s reneged on that.”

Mr Hayes says it’s actually bad economics to give the Planning Assessment Commission the ability to put more weight on the financial benefit of a such a development.

“If you look at what the alleged economics of the mine would be against the loss of water and other amenity and subsidence and dust to the local community would far outweigh any economic value that is perceived from the mine,” he said.

But Wallarah 2 spokesman Patrick Southam says the proposed changes would provide a far more balanced approached to the assessment process.

“We do agree with the government that the economic and social benefits of projects like Wallarah 2 certainly deserve the same consideration as any potential environmental issues,” he said.

Public submissions on the changes are open for a fortnight.

Anti-fracking protesters halt Sussex shale gas operation

Anti-fracking campaigners claimed a surprise victory on Thursday against attempts to extract oil in the home counties.

Dozens of protesters blockaded a drill site outside the West Sussex village of Balcombe. The drill was operated by Cuadrilla, the energy company headed by former BP chief Lord Browne.

Earlier in the day, the Department for Energy granted a drilling permit for the site to Cuadrilla, which also operates hydraulic fracturing rigs in Lancashire. It is looking for oil in the Sussex shale and says it may need to use controversial high pressure hydraulic fracturing techniques to extract it.

After a seven hour stand-off between Cuadrilla and a group of environmentalists and local opponents – including several groups of parents and children from the village – a lorry that was carrying a generator essential for the drilling on the site was forced to move away, bringing cheers from the protesters. Drilling 3,000ft into the rock had been due to start on Monday.

Officers from Sussex Police earlier warned protesters they would bring in forces to remove anyone who would not make way for the lorry but they later reversed their decision.

Police alleged that the truck had been sabotaged with its air brake cables cut by protesters. Some had wrapped yellow and black “climate crime scene” tape around the equipment and hung a banner on it that read “no more dirty energy”.

A spokesman for Cuadrilla who said it was “disappointed” not to get its equipment on site added “but we are hopeful that deliveries will soon be able to continue”. It said safety of the public, including protestors, was a priority.

The setback for one of the UK’s highest profile potential fracking sites in the government’s electoral heartlands comes as the coalition said it will encourage fracking by bringing in tax cuts. Last week, the chancellor George Osborne announced tax on profits from fracking in Britain would be 30% compared to a top rate of 62% for North Sea oil. The British Geological Survey has estimated there could be enough shale gas in Britain to supply the country for 25 years and the campaign victory could galvanise opposition to proposed new sites, protesters said.

“People see the fracking industry as a direct threat to their health and environment,” said Josie Wiltshire, an anti-fracking activist. “The size of this blockade goes to show people feel the need to protect themselves. We’ll definitely be back tomorrow”.

But the village of Balcombe is not united against Cuadrilla and some protesters complained the turnout of up to 100 people was disappointing.

“There is mass hysteria in the village and the fears are ungrounded,” said Katherine Gunning, a local resident. “Most of the village is not anti-fracking.”

That is disputed by campaign leaders who said surveys showed a large majority are opposed to Cuadrilla’s operations. Many cite fears about damage to water courses from toxic chemicals used to fracture the rocks to release fuel, the impact of trucks rolling through the village and the possibility of earth tremors.

“I am horrified to discover what is happening on our doorstep,” said Louisa Delpy, a mother of two from Balcombe. “The pollution to the air and soil is unacceptable. I have lost faith in the agencies that are meant to protect us. I am going to stand here and stop this happening.”

Others said they felt government decisions to allow the exploratory drilling had moved too fast. “The speed at which the Environment Agency has considered hundreds of responses begs the question as to whether they are properly considering the impacts or rushing ahead,” said Friends of the Earth South East Regional campaigner Brenda Pollack.

The protest had a festive atmosphere with parents bringing children on their school holidays, picnics, musicians and a community singalong with the words to Row Your Boat substituted with “Blow, blow, blow your gas/ up into the sky;/ kill the birds and kill the bats/ and watch the rivers die”.

“I don’t want it to happen,” said Jack, aged nine. “I haven’t been to a protest before. It’s sort of scary sometimes. But this is poisoning the water and I want clean water and I don’t want the air polluted either.”

UPDATE 1-Russia ups gold reserves again in June, Turkey cuts -IMF

 

* Russia adds 0.3 tonnes for 9th consecutive monthly gain

* Ukraine, Kazakhstan, Azerbaijan boost gold holdings

* Turkey decreases by 3.8 tonnes for first drop since June 2012

By Frank Tang

NEW YORK, July 26 (Reuters) – Russia, Ukraine and Azerbaijan are among eight countries that increased their gold holdings in June, data from the International Monetary Fund shows, reflecting strong interest on the part of emerging economies to own gold as part of their reserves.

Turkey, Germany and seven other countries, however, shed some of their bullion holdings that month, according to IMF’s monthly International Financial statistics report, released late Thursday.

Investors are closely monitoring any possible shift in central bank attitudes toward gold after bullion prices plummeted to as low as $1,180 an ounce in late June, down from around $1,700 at the start of this year. Spot gold dropped 1 percent to $1,320 on Friday.

Fears of an imminent scaling back of the U.S. Federal Reserve bond-buyback stimulus and an improving global economic outlook have severely undermined gold’s investment appeal.

Data showed Russia’s gold reserves climbed 0.3 tonnes to a total of 996.4 tonnes in June for its ninth consecutive monthly increase. Russia has the world’s seventh-largest bullion holdings excluding the IMF’s.

Ukraine raised its gold by 2.5 tonnes to 38.9 tonnes, and Azerbaijan added by two tonnes for a total of eight tonnes.

The Central Asian countries continued to accumulate the yellow metal, with Kazakhstan increasing its holdings by 1.4 tonnes to 130.9 tonnes and Kyrgyzstan raising its stocks by less than 0.1 tonne to 3.3 tonnes.

Greece, Belarus and Bulgaria also reported small increases to their gold reserves.

 

BUYERS OR SELLERS?

Central banks as a group became net buyers in 2010 after they had been net sellers the previous two decades. The 2008 global economic crisis triggered resurgent official-sector interest in gold.

However, news in April that Cyprus could be forced to sell some of its gold reserves in return for IMF and European Commission financial lifelines stirred fears of a new wave of central bank gold sales.

Turkey, which has the world’s 11th-largest gold reserve, reported a 3.8 tonne decrease to 441.5 tonnes in June, the first monthly drop since June 2012.

Turkey’s gold holdings rose in the 12 months prior to June, partly due to a decision by the country’s central bank to allow commercial banks to hold a portion of their lira reserves in gold.

Germany, the world’s second-largest gold owner, reported a 0.8 tonne decrease to 3,390.6 tonnes in June.

Other countries that also reduced their gold holdings include Suriname, Guatemala, Mexico, Zimbabwe, Costa Rica, Czech Republic and Denmark.

Year to date, gold was down 21 percent, at risk of an annual loss after 12 straight years of gains.

Alacer adds to Çöpler resource

Gold miner Alacer Gold has increased the resource base at its Çöpler gold/silver/copper project, in Turkey, to some 8.5-million ounces of gold.

The project’s measured and indicated resource now stood at 194.2-million tonnes, grading 1.4 g/t gold.

“I am pleased to report that the measured and indicated resource at Çöpler has increased for both oxide and sulphide mineralisation since our last resource statement in December 2012,” said Alacer president and CEO David Quinlivan.

He noted that the resource update more than replaced the mine production during the period.

“It is also significant that the new resource model has under-estimated the ounces in the area mined to June 2013 by some 11%, identifying potential upside to this new resource estimate.”

Quinlivan said that the new resource update would form the basis of the ongoing Çöpler oxide and sulphide mine studies, and added that the ASX- and TSX-listed company had recently increased its regional exploration activities in the Çöpler district.

Alacer was of the impression that the Çöpler mine would likely be the first of several significant gold deposits to be discovered and mined in the district, and has recently increased its license holding in the area, as well as its regional geological, geochemical and geophysical survey activities.

Drilling had also started on high priority oxide-gold targets within a 20 km radius of the Çöpler deposit.

Anti-fracking protesters halt Sussex shale gas operation

Anti-fracking campaigners claimed a surprise victory on Thursday against attempts to extract oil in the home counties.

Dozens of protesters blockaded a drill site outside the West Sussex village of Balcombe. The drill was operated by Cuadrilla, the energy company headed by former BP chief Lord Browne.

Earlier in the day, the Department for Energy granted a drilling permit for the site to Cuadrilla, which also operates hydraulic fracturing rigs in Lancashire. It is looking for oil in the Sussex shale and says it may need to use controversial high pressure hydraulic fracturing techniques to extract it.

After a seven hour stand-off between Cuadrilla and a group of environmentalists and local opponents – including several groups of parents and children from the village – a lorry that was carrying a generator essential for the drilling on the site was forced to move away, bringing cheers from the protesters. Drilling 3,000ft into the rock had been due to start on Monday.

Officers from Sussex Police earlier warned protesters they would bring in forces to remove anyone who would not make way for the lorry but they later reversed their decision.

Police alleged that the truck had been sabotaged with its air brake cables cut by protesters. Some had wrapped yellow and black “climate crime scene” tape around the equipment and hung a banner on it that read “no more dirty energy”.

A spokesman for Cuadrilla who said it was “disappointed” not to get its equipment on site added “but we are hopeful that deliveries will soon be able to continue”. It said safety of the public, including protestors, was a priority.

The setback for one of the UK’s highest profile potential fracking sites in the government’s electoral heartlands comes as the coalition said it will encourage fracking by bringing in tax cuts. Last week, the chancellor George Osborne announced tax on profits from fracking in Britain would be 30% compared to a top rate of 62% for North Sea oil. The British Geological Survey has estimated there could be enough shale gas in Britain to supply the country for 25 years and the campaign victory could galvanise opposition to proposed new sites, protesters said.

“People see the fracking industry as a direct threat to their health and environment,” said Josie Wiltshire, an anti-fracking activist. “The size of this blockade goes to show people feel the need to protect themselves. We’ll definitely be back tomorrow”.

But the village of Balcombe is not united against Cuadrilla and some protesters complained the turnout of up to 100 people was disappointing.

“There is mass hysteria in the village and the fears are ungrounded,” said Katherine Gunning, a local resident. “Most of the village is not anti-fracking.”

That is disputed by campaign leaders who said surveys showed a large majority are opposed to Cuadrilla’s operations. Many cite fears about damage to water courses from toxic chemicals used to fracture the rocks to release fuel, the impact of trucks rolling through the village and the possibility of earth tremors.

“I am horrified to discover what is happening on our doorstep,” said Louisa Delpy, a mother of two from Balcombe. “The pollution to the air and soil is unacceptable. I have lost faith in the agencies that are meant to protect us. I am going to stand here and stop this happening.”

Others said they felt government decisions to allow the exploratory drilling had moved too fast. “The speed at which the Environment Agency has considered hundreds of responses begs the question as to whether they are properly considering the impacts or rushing ahead,” said Friends of the Earth South East Regional campaigner Brenda Pollack.

The protest had a festive atmosphere with parents bringing children on their school holidays, picnics, musicians and a community singalong with the words to Row Your Boat substituted with “Blow, blow, blow your gas/ up into the sky;/ kill the birds and kill the bats/ and watch the rivers die”.

“I don’t want it to happen,” said Jack, aged nine. “I haven’t been to a protest before. It’s sort of scary sometimes. But this is poisoning the water and I want clean water and I don’t want the air polluted either.”

Gold Price Rises from “Bearish Reversal” as China Tries “Mini-Stimulus”, Miners Cut Hedge Book Again

The GOLD PRICE rallied from a drop to $1310 per ounce Thursday lunchtime in London, gaining as world stock markets cut earlier losses 
 
Trading back above $1322 – a two-year low when hit by this spring’s first gold crash in April – gold also rallied 1.0% for Euro and Sterling investors.
 
The Pound regained half-a-cent after dropping to $1.5260 on news the UK economy grew 0.6% in the second quarter, in line with analyst forecasts.
 
“The selling gained speed after support at $1321 broke once again,” Reuters quotes gold trader Alexander Zumpfe at German refinery group Heraeus.
 
“While the [gold price] remains above key support at $1301,” says technical analysis from bullion and investment bank Scotia Mocatta, “it has now descended back below the downtrend that it had broken out of [Tuesday].
 
Wednesday’s action – opening higher but ending the day down – “formed a bearish reversal pattern called Key Reversal,” says gold price analysis from fellow London market-maker Societe Generale.
 
“Gold is therefore poised to correct lower to the previous congestion at $1303/1295.”
 
Commodities also reduced earlier losses in London trade Thursday, as did major government bond prices.
 
Ten-year US Treasury yields eased back from 1-week highs near 2.60%.
 
Silver bullion tracked and extended the gold price moves, rallying 1.9% from a 4-session low to trade at $20.18 per ounce.
 
After new data on Wednesday showed China’s manufacturing activity falling to an 11-month low, the State Council in Beijing last night unveiled what one analyst calls “a mini-stimulus.”
 
Aiming to “arouse the energy of the market,” the cabinet cut taxes on small business, reduced paper-work for exporters, and invited new investment in railway expansion.
 
“China’s leaders turned to credit-fueled investment…after export demand faded in the wake of the 2008 financial crisis,” says a Wall Street Journal report, noting that investment’s share of Chinese GDP rose from 42% to 48% in the six years to 2012.
 
“China’s world-renowned 8 to 12% growth rate is a myth,” writes financial author James Gorrie in London freesheet City AM today, “even as it now slips down towards 7%.
 
“China’s hard landing will…unfortunately be our hard landing as well.”
 
A cross-asset report from Societe Generale sees strong gold price volatility on a China hard landing, perhaps with “a sharp bounce from the initial sell-off if global central banks respond with further QE.”
 
Looking at US policy, “Recent communication by Fed officials has emphasized that the overall level of monetary accommodation will not be reduced significantly,” says a note from commodities analysts at investment bank Goldman Sachs.
 
Now forecasting an average gold price of more than $1400 per ounce for 2013 as a whole, the metal will average $1165 next year, the note says – repeating Goldman Sachs’ previous outlook – with a possible drop to $1050 by end-2014.
 
Dollar gold prices have so far averaged $1491 per ounce in 2013.
 
Gold mining companies took advantage of Jan-June’s drop in prices to reduce their gold hedge book, analysis from Thomson-Reuters GFMS said Thursday.
 
Building a total forward sale of nearly 3,000 tonnes by 2001, the gold mining industry then “de-hedged” that position as the gold price rose.
 
On top of the 11 tonnes bought back in the first 3 months of the 2013, “During the second quarter miners took the opportunity to reduce hedge cover further as the gold price fell sharply,” says theGlobal Hedge Book report, identifying another 17 tonnes of de-hedging.
 
Contrary to recent talk of a return to gold miner hedging by other analysts, “We forecast that producer activity will remain on the side of net de-hedging for the year,” GFMS adds, “despite the sharp fall in price.”