Resource Market Weekly Recap – Feb 11, 2010

- February 11th, 2010

By Melissa Pistilli-Exclusive to Resource Investing News Coal Investing News Arch Coal [NYSE: ACI] may be interested in picking up the Otter Creek Valley coal mine for sale by the Montana land board, if the price were right. For now, Arch’s subsidiary, Ark Land Co has said the bid for 25 cents per tonne, with … Continued

By Melissa Pistilli-Exclusive to Resource Investing News

Coal Investing News

Arch Coal [NYSE: ACI] may be interested in picking up the Otter Creek Valley coal mine for sale by the Montana land board, if the price were right.

For now, Arch’s subsidiary, Ark Land Co has said the bid for 25 cents per tonne, with royalties, was too high. Reportedly, the property holds as much as 500 million tonnes of mineable coal and at 25 cents a tonne it would fetch $142.5 million.

Australia-based Resourcehouse recently announced that it has closed a A$69.4 billion deal to supply coal to China Power International over 20 years. The agreement has created controversy with the town of Alpha, from where the coal would be shipped to China, putting up resistance. Even stranger, China Power has released a statement denying it had agreed to the plan at all.

Lithium Investing News

The government of Brazil has announced it will invest US$ 350 million on an industrial plant that will produce between 20,000 and 30,000 MT of lithium carbonate beginning 2015. International companies are keen to take advantage of Brazil’s vast lithium resources, but the government is closely guarding its country’s rich reserves.

Russian Corporation of Nanotechnologies is moving to build its first lithium ion battery production plant with the help of China’s Thunder Sky Energy Group. The batteries will be for all types of electric vehicles.

Toyota has joined forces with an Australia-based Orocobre Ltd, the largest lithium miner in Argentina, to develop the Olaroz lithium project. The deal follows a $10.5 million equity investment by Magna International Inc and Mitsubishi Corp in Toronto-based Lithium Americas Corp. that is also developing a lithium deposit in Argentina.

Other companies making news include Reno-based Lithium Corp, Pan American Lithium Corp, and Galaxy Resources Ltd.

Nickel Investing News

Positive economic indicators are nurturing hope recovery is on the horizon. US job reports for January showed improvement the fifth month in a row with the unemployment rate dropping to 9.7 per cent. Consumer borrowing declined less than expected in December and pending sales of existing US homes were also up last month. However, consumer spending is expected to remain curbed by cautious sentiments.

Economic revival is crucial to the global commodities sector and commodities like oil, aluminum and tin are trading up this month.  There are also reports that Brazilian industrial production is picking up. Metal producers like Alcoa Inc and Rio Tinto are seeing rising share prices as well.

Nickel demand is forecasted to rebound this year, although slowly, after dropping more than 80 per cent early last year bringing production to a halt. However, there are reports that copper prices may come under pressure as Vale brings its nickel-copper mine in Ontario toward full production despite the seven-month long workers strike.

Potash Investing News

The potash market is on the verge of revival and the most recent news sparking optimism in the sector is Canpotex’s freshly inked 350,000 tonne deal with China’s largest fertilizer enterprise Sinofert. While there are no reports as to how much, it is thought to be above the recent bargain price of $350 a tonne Belarusian Potash Co (BPC) agreed to in a deal  with Chinese buyers in December. Another indication potash is looking up is BPC’s recent deal with Brazilian and Asian clients for $410 per tonne.

Investors are catching on to potash’s potential as global investment firms like China Investment Corporation (CIC) add the crop nutrient to their portfolios. India’s fertilizer manufacturer IFFCO has also decided to invest in overseas potash.

Potash companies making news include Agrium Inc, MagIndustries Corporation and Mosaic Co.

Silver Investing News

Confusion surrounding Greece’s financial crisis and the rest of Europe’s’ possible response is sending schizophrenic shockwaves through the global currency and precious metals markets this past week.

First, we hear Germany, Europe’s biggest economy, is willing to help Greece climb out if its financial hole. Then those rumors are quashed by European leaders who sternly insist Greece should handle its own problems. Now, reports are coming in that France and Germany may be forming a coalition to help Greece.

What’s going on is that Europe’s leaders are coming to terms with the sobering reality that living in a global economy means when one nation suffers, every nation suffers. If Greece goes down, its spells trouble for Europe’s other teetering economies like Spain, Portugal and even the UK, derailing economic recovery in the Eurozone.

We should expect the current volatility in silver and gold prices to continue in the coming weeks as Europe’s latest financial crisis plays itself out. Expect the dollar’s movements, and hence that of gold and silver, to be directly tied to any decisions coming out Thursday and beyond.

Vanadium Investing News

Supply shortages pushed the price of ferrovanadium up US$6 for the month of January; however prices have stabilized moving into February.

A political movement to nationalize South Africa’s mines has Anglo American Plc seriously concerned. The African nation is the world’s biggest producer of platinum, ferrochrome, manganese and vanadium as well as the third-biggest gold supplier. However, there are those in the industry and the government who are not so worried.

Vanadium companies making news include: Energizer Resources Inc [OTCBB: URST], Southern Uranium Limited [ASX: SNU], Cardero Resources Corp [TSX: CDU], Apella Resources Inc [TSX Venture APA], and Largo Resources LTd [TSX.V: LGO].

Energizer Resources has filed its compliance technical report for the explored portion of its Green Giant Vanadium Project in Madagascar. Southern Uranium has reported positive drill results on its Calvert Hills joint venture project in the Northern Territory. Cardero Resource is beginning a drill program on its TiTac Iron-Titanium-Vanadium deposit in Minnesota. Apella Resources has commenced 1000 metres of diamond drilling on its Iron-t project where recent drill intersects were suggestive of a significantly enriched Vanadium-Iron-Titanium system. Largo Resources is looking to obtain financing for the development of its Maracas Vanadium Project in Brazil.

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