Mining

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    Newmont Mining (NYSE: NEM) Stock Will Shine Again

    The Future of Gold Prices

    By , Money Morning -

    Owning some gold has long been a part of the Money Morning investing philosophy. After all, gold offers some insurance against the dollar-debasing policies of the U.S. Federal Reserve.

    One of the easiest ways to acquire the yellow metal is to buy a gold mining stock such as Newmont Mining Corp. (NYSE: NEM).

    At first glance, investing in any gold mining stock looks like a lousy idea. Over the past year, nearly all gold mining stocks have plummeted along with the gold prices - but much further.

    See how gold mining stocks will rebound here...

Article Index

Newmont Mining (NYSE: NEM) Stock Will Shine Again

By , Money Morning -

The Future of Gold Prices

Owning some gold has long been a part of the Money Morning investing philosophy. After all, gold offers some insurance against the dollar-debasing policies of the U.S. Federal Reserve.

One of the easiest ways to acquire the yellow metal is to buy a gold mining stock such as Newmont Mining Corp. (NYSE: NEM).

At first glance, investing in any gold mining stock looks like a lousy idea. Over the past year, nearly all gold mining stocks have plummeted along with the gold prices - but much further.

See how gold mining stocks will rebound here...

These Mining Companies Will Profit from China's Good News

By , Money Morning -

China announced industrial production data for October today (Friday), showing industrial value-added up 9.6% year-on-year, up from 9.2% in September and 8.9% in August.

This is great news for mining companies.

"Data out today provides convincing evidence that the modest macro recovery we've been anticipating is well underway," wrote Shanghai-based Andy Rothman, China Macro Strategist for CLSA Asia-Pacific Markets. "Industrial value-added, power generation, retail sales and new home sales all improved in October, while inflation remains so low that it is not a policy factor."

Infrastructure investment in October was up 24.9% year-on-year, continuing the rebound begun in September.

Rothman explained, "...this infrastructure rebound is the result of the government fixing approval and financing bottlenecks for projects originally scheduled to be built this year, not due to a stimulus."

Looking at prices, industrial input prices fell by 1.7% year-on-year in October, an improvement from the 4.1% decline seen in September.

"We are starting to see a bit of a bump up in both input and output prices, which is consistent with our view that the growth rate of industrial inventory levels has slowed and a modest macro recovery is underway," Rothman concluded.

This has led some economists to believe that this increase in industrial production in China will be positive for commodity prices, including Li-Gang Liu and Hao Zhou who work for Australian bank ANZ.

If this is the case, it'll benefit the global "mega miners" that have seen their share prices tumble since the slowdown in China began back in 2011.

Mining Companies That Benefit from China Demand

BHP Billiton (NYSE: BHP), based in Australia, is the world's largest mining company and sells iron ore, base metals, potash, aluminum, metallurgical coal, thermal coal, manganese and oil products to China.

BHP is China's third-largest supplier of iron ore where growing stockpiles in China due to sluggish production had undermined pricing.

But this is starting to change.

To continue reading, please click here...

Glencore International, Xstrata Could Make the Next Biggest Deal in Global Commodities

By , Associate Editor, Money Morning -

Commodities supplier Glencore International (PINK: GLCNF) could be on the cusp of a multibillion-dollar bet on commodities with mining company Xstrata PLC (PINK: XSRAF). Switzerland-based Xstrata announced today (Thursday) that Glencore approached the company for an all-share offer in a "merger of equals." Glencore already owns 34% of Xstrata and wants to buy the remaining […]

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Buy, Sell or Hold: Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) is a Mining Play with a Major Upside

By , Money Morning -

Sometimes the market offers investors a rare chance to buy shares of a great company on a dip. That's precisely the opportunity we're getting right now with Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX).

The current market volatility is giving investors with an eye toward long-term investments a great chance to buy shares in a world-class company.

FCX is one of the best-run global mining companies and a great way to gain exposure to gold and copper. So it's time to "Buy" Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) (**).

And if scooping up a top-notch commodities play on a pullback isn't reason enough, here are six other reasons to buy FCX.

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Hot Stocks: Caterpillar Moves Into Mining with $8.6 Billion Bid for Bucyrus

By , Associate Editor, Money Morning -

Caterpillar Inc. (NYSE: CAT), the world's leading manufacturer of construction equipment, yesterday (Monday) said it would pay $8.6 billion for Bucyrus International Inc. (Nasdaq: BUCY) – a maker of large-scale surface and underground mining machinery.

Caterpillar said in a statement the deal would allow the company to continue its expansion into mining and gain from the "robust long-term outlook for commodities." The company is betting that emerging markets' growth will "push demand" for coal and "everything that comes out of the ground."

Caterpillar will pay $7.6 billion for Bucyrus and assume another $1 billion of its debt. The deal values Bucyrus at $92 a share, which is a 32% premium to the company's Nov. 12 closing price of $69.92.

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As the Rescue of the Chilean Miners Shows, this South American Country is Superbly Managed and an Enticing Investment

By , Money Morning -

The efficient, well-managed rescue of the 33 Chilean miners was an affecting spectacle for the world. It also should remind us that Chile is a well-run country, and that in an era when commodities are ever more important to the global economy, it is becoming an essential part of investors' portfolios.

To find out how investors can cash in on this emerging economic powerhouse read on...

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Buy, Sell or Hold: Silver Wheaton Corp. (NYSE: SLW) Is Poised to Profit from the White Metal's Rally

By , Money Morning -

Have you ever wanted to invest in a company that owned the supply of a product at a nice fixed rate of cost, but was able to leverage the upside, but not have to take any risk in actually making the product?  How about if it's something inherently dangerous and expensive with bad margins like mining?

In the case of Silver Wheaton Corp. (NYSE: SLW) we have a very interesting investment vehicle, because the company does not have to take additional risks to grow its production numbers.  Silver Wheaton owns the rights to silver production from mines that produce it as a bi-product.  This allows the company to enjoy a growing supply curve, while protecting its balance sheet.

It has already purchased these rights upfront for cash, helping some miners with their capital costs to open a new mine.  As these mines ramp up production in whatever primary product they are producing, Silver Wheaton gets access to the silver produced as a bi-product.

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Special Report: How to Buy Gold

By , Money Morning -

As an analyst and editor who specializes in the natural-resources sector, I spend a lot of time writing about gold, gold mining, and gold investing. Those are popular - and even emotional - topics with investors, which means that the columns, essays and advisories I write tend to generate a lot of comments and questions.

I think that's great. After all, an engaged investor tends to be a successful investor.

Not surprisingly, one question dominates. And that's the question we're addressing in this special report.

The question: "How do I buy gold?"

As a service to the Money Morning readers who have asked that question, or who've had that same thought, I've put together this overview - or primer - that addresses the basic ins and outs of buying gold. In this feature, I address some of the more-common and more-timely questions that I've been getting.



To find out how to buy gold, please read on...

Buy, Sell or Hold: Joy Global Inc. (NYSE: JOYG) Could Be a Gold Mine for Investors

By , Contributing Editor, Money Morning -

Uncertainty and volatility have plagued the markets of late but there's reason enough to believe a short-term up-trend is in store.

For one thing, the speed of recovery has varied from country to country but emerging markets and commodity-producing nations continue to post strong growth. And while the global slowdown has brought about very high fiscal deficits, particularly in Europe, fears that the Eurozone economy is edging towards collapse are beginning to dissipate.

The European debt problem should be addressed at the end of this month, when the European Central Bank (ECB) publicizes the results of its stress tests.  I expect the results will bring renewed confidence in the system. It's likely that the largest financial institutions will most probably all be sound, while there will be some smaller institutions that need restructuring.  These smaller banks will either quickly recapitalize or be absorbed by larger institutions.

That means we could soon see a strong short-term bullish market trend.

Meanwhile, the International Monetary Fund's (IMF) recent World Economic Report Update showed global growth estimates for the next year and a half that were much stronger than expected.

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Australia Reduces Mining "Super Tax," Reviving Profitability of Resource Sector

By , Associate Editor, Money Morning -

Australian mining companies declared a huge win today (Friday) when the government announced the proposed mining "super tax" would be reduced, prompting some companies to reactivate shelved projects and reopen merger and acquisition talks.

Australia's Prime Minister Julia Gillard agreed on a compromise plan that would reduce the planned tax to 30% of profits from iron ore and coal, and 40% tax on oil and natural gas, down from the originally proposed 40% tax on all resources. The new plan, called the mineral resource rent tax, would also raise the tax's trigger level to profits that exceed a 12% rate of return instead of 6%.

"The reduction in the headline rate is an amazing concession," John Robinson, chairman of Global Mining Investments Ltd., told Bloomberg. "It's certainly better than I had expected."

Mining companies would be allowed to claim depreciation on their assets based on market value instead of book value.

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Australia Reduces Mining "Super Tax," Reviving Profitability of Resource Sector

By , Associate Editor, Money Morning -

Australian mining companies declared a huge win today (Friday) when the government announced the proposed mining "super tax" would be reduced, prompting some companies to reactivate shelved projects and reopen merger and acquisition talks.

Australia's Prime Minister Julia Gillard agreed on a compromise plan that would reduce the planned tax to 30% of profits from iron ore and coal, and 40% tax on oil and natural gas, down from the originally proposed 40% tax on all resources. The new plan, called the mineral resource rent tax, would also raise the tax's trigger level to profits that exceed a 12% rate of return instead of 6%.

"The reduction in the headline rate is an amazing concession," John Robinson, chairman of Global Mining Investments Ltd., told Bloomberg. "It's certainly better than I had expected."

Read More…

Question of the Week: Readers Respond to Money Morning's Afghanistan Mineral Wealth Query

By , Associate Editor, Money Morning -

The news that there is $1 trillion of Afghanistan mineral wealth hiding in the country's scarred and deserted landscape has global investors calculating how likely it would be for this incredibly poor country to transform itself into a natural-resources powerhouse.

It has also spawned debates about which nations should be given a piece of this vast apparent fortune.

The discovery - and its transformational potential - is mind-boggling: At $1 trillion, the estimated value of the mineral reserves is 100 times the size of Afghanistan's entire economy, estimated at $12 billion. And it's not just the dollar figures that could bring about change. Much of Afghanistan's economic activities involve drug-trafficking and terrorism. About 40% of the country's population lives below the poverty line, and 70% lives on $2 a day.

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We Want to Hear From You: Is Afghanistan's Mineral Wealth a Blessing or a Curse?

By , Associate Editor, Money Morning -

The news that there is $1 trillion of Afghanistan mineral wealth hiding in the country's scarred and deserted landscape has global investors calculating how likely it would be for this incredibly poor country to transform itself into a major global exporter.

It has also spawned debates about which nations should be given a piece of this potential fortune.

At $1 trillion, the estimated value of the mineral reserves is 100 times the size of Afghanistan's $12 billion economy. And it's not just the dollar figures that could bring about change. Much of Afghanistan's economic activities involve drug trafficking and terrorism. About 40% of the country's population lives below the poverty line, and 70% lives on $2 a day.

Read More…

Will Afghanistan's Mineral Wealth Bring the Nation's Rebirth or a Commodities Curse?

By , Money Morning -

Overnight, Afghanistan has gone from being a political pariah to one of the most significant, and potentially richest, countries on the globe. But can the rocky, war-torn desert - known mostly for harboring terrorists and exporting opium - be reborn as a major commodities exporter?

U.S. geologists have found some $1 trillion of untapped mineral deposits in Afghanistan, The New York Times reported Sunday. Afghanistan's mineral wealth includes large caches of iron, copper, gold and lithium that could turn the country into one of the most important mining centers in the world.

Think of Australia, Canada, and Latin America. That is the league into which these geographical revelations have thrust Afghanistan.

"There is stunning potential here," General David Petraeus, commander of the United States Central Command, told The Times. "There are a lot of ifs, of course, but I think potentially it is hugely significant."

Those "ifs" include ongoing warfare, a lack of infrastructure, and more than a little political corruption. But the upside for the country is enormous.

While U.S. officials estimate the potential value of Afghanistan's mineral wealth at $1 trillion, President Hamid Karzai said last month during a visit to Washington that his country's deposits could be worth three times as much.

So why did it take so long for this information to surface?

Read More…