Author: Victoria Curtis

25 May

Investor lawsuits stack up against Barrick Gold over ‘misleading statements’ on cyanide spill in Argentina

A number of class action lawsuits have been filed against Barrick Gold, alleging the world’s largest gold miner misled shareholders about the fallout of its most recent cyanide spill at a flagship mine in Argentina.

The class actions claim the company misled shareholders in public statements it made after a March rupture of a pipeline carrying a gold-cyanide solution at its Veladero mine in Argentina — the third spill at that mine’s leach pad in two years. Cyanide is used at mine sites to separate gold from the ore.

“Barrick Gold and certain of its senior executive officers made a series of materially false and misleading statements to investors about the Veladero mine and the company’s outlook and expected financial performance,” alleges the latest suit, filed Thursday by Kessler Topaz Meltzer & Check LLP.

In the immediate aftermath of the pipeline rupture the company said it did not expect the incident to have a material impact on its bottom line, despite the fact that provincial authorities in Argentina had placed restrictions on its operations.

25 May

2017 to be a positive year for mining sector following strong 2016: Citi analysts

The mining sector will enjoy a positive year of growth in 2017 following a strong performance in 2016, an industry analysis by Citi suggested Monday.

Mining stocks will have a strong 2017, thanks to industry-wide trends toward increased free cash flow, upward earnings momentum and the potential to return excess capital to shareholders, Citi said.

However, it added, they are unlikely to see the same percentage increases in share prices as they did in 2016. The odds of mining overperforming the rest of the market are weak.

24 May

Shine on Diamonds: Shine on

“I’VE seen grown men with tears in their eyes” in front of it, an auctioneer from Sotheby’s said as he opened bidding on June 29th on the 1,109-carat Lesedi La Rona, the biggest diamond to be discovered in over a century. Within minutes the tears were, if anything, of embarrassment. Bidding, which started at $50m, was desultory. A rough stone that Sotheby’s had put in the same league as the 3,107-carat Cullinan diamond, discovered in South Africa in 1905, failed to make its $70m reserve. “I’m a bit disappointed. There were no private buyers and the diamantaires stayed away,” said Lukas Lundin, chairman of Lucara Diamond, a Canadian firm that unearthed the stone in Botswana last year.

Oil majors seek survival in transition to low-carbon world

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Yet, increasingly, the oil companies that bestrode the global economy for the past century are assuming an air of vulnerability. In an era when Apple has a market capitalisation twice that of ExxonMobil, the “supermajors” risk becoming relics of a fossil-fuelled past in a digital world.

Squeezed on one side by the rise of low-cost US shale resources and on the other by the accelerating shift to renewable energy, international oil and gas groups are beginning to face up to the threats facing their businesses.

“In our 109-year history, it is unlikely that there has ever been as much change as there is now,” Carl-Henric Svanberg, chairman of BP, told shareholders at the UK group’s annual meeting last week, acknowledging that over the next 20 years “consumption of oil will slow and eventually peak”.

For all the looming risks, fossil fuels still dominate the global energy landscape. Oil, gas and coal together account for 86 per cent of energy used for transport, heat and power worldwide. The questions for companies and investors across the sector are how fast will this change and what should they do to prepare?

Deep disruption is already being felt in the power sector. The electricity generated from renewables, excluding hydro, doubled globally between 2010 and 2015 as political efforts to tackle climate change intensified and the cost of wind and solar plummeted. Today, renewables account for an average 23 per cent of global power output. Denmark has breezy days when all its power comes from wind and Germany hit a record 85 per cent share from renewables one day last month.

24 May

New technologies could slash the cost of steel production

ALTHOUGH he is best known for developing a way to mass-produce steel, Henry Bessemer was a prolific British inventor. In the 1850s in Sheffield his converters blasted air through molten iron to burn away impurities, making steel the material of the industrial revolution. But Bessemer knew he could do better, and in 1865 he filed a patent to cast strips of steel directly, rather than as large ingots which then had to be expensively reheated and shaped by giant rolling machines.

24 May

Podcast: The remarkable calmness of gold

Despite rising tensions and fears of inflation, gold prices have stayed relatively still. Our Buttonwood columnist explains why. Traditional carmakers look likely to band together in the face of technological disruption. Also, what Britain’s economists really think about the impacts of Brexit