Shougang Hierro strike approaching its end as an agreement is reached

Progress is being made down in Peru between Chinese miner Shougang Hierro and the workers who have been protesting for weeks now against unfair wages and treatment by their Chinese owners. Nothing new… for the record, there are few international companies which invest in the Peruvian mining industry and thereafter roll out the red carpet for their workers. It’s mining, not investment banking…

The 1200 striking workers have begin working again according to manager Julio Ortiz, who said they returned to work because the company said it would commit to some of the workers demands.

Currently workers earn a salary of 1,770 ($614) Peruvian soles a month and the company has released a statement saying Shougang is willing to raise the daily salary by 5.50, or 165 soles a month—bringing the new total to 1935 soles ($677).

According to this Reuters article (in Spanish), Shougang earned a solid 417 million soles last year ($144.7 million dollars), a increase over the year before of 50%.

All in all, it seems Shougang won this battle… CSA will continue to bring you updates on this matter in the weeks to come.

Read Full Post »

Commodity Boom Will Thrive on Shortages, Rogers Says

Newswire: Jim Rogers

“I don’t see any adequate-supply situation in any commodity market over the next decade or two,” Rogers, the chairman of Singapore-based Rogers Holdings, said today in an interview in New York. “The commodities boom is not over and the bull market has several years to go.”

“I own some cotton,” Rogers said. “I own some sugar,” he said. “Sugar will go much, much higher over the course of the bull market.”

“Oil could reach between $150 and $200 a barrel,” because known reserves of crude are declining, Rogers said. He said international relations, particularly between the U.S. and Iran, will help guide prices.

“Natural gas is very cheap,” he said in the interview between sessions at an ETF Securities Ltd. investor conference.

Commodities ‘Best Place’

“Commodities are the best place to be, if you ask me, based on supply and demand,” Rogers said. He said he hasn’t invested in equities outside of China in two years.

“Everything has gone through the roof,” Rogers said of equities prices, adding that he may consider buying stocks “if something collapses.”

Click here to read the complete Bloomberg article

Read Full Post »

Newswire: Commodities

China Nurtures Futures Markets in Bid to Sway Commodity Prices – WSJ

ZHENGZHOU, China — Chinese leaders are concerned that their nation’s enormous economic expansion is becoming an excuse for foreign suppliers to inflate commodity costs. So, they hope to use their three futures exchanges to fight back.

“It is true we have a long-term goal of increasing our influence in terms of pricing, but to do that we have to create conditions and do it step by step,” Jiang Yang, chief futures-industry policy maker and assistant chairman of the China Securities Regulatory Commission, said in an interview. “But as the Westerners say: ‘Rome was not built in a day.’

But Beijing believes hosting big futures markets will enhance the country’s economic security by essentially advertising what the world’s biggest customer for some commodities considers a fair price. For the rest of the world, the exchanges could mean less guesswork about China’s buying habits, possibly reducing volatility in the global market.

Silver Lining: Jim Rogers Talks Up Commodities – Time Magazine

Jim Rogers’ daughters may not have been born with silver spoons in their mouths, but they’ve got them now. Not silver spoons, exactly, but silver bullion. “My little girls don’t own stocks — they own commodities,” he says, “and that’s why they’ll be able to take care of me in retirement.”

Rogers sees three big secular trends now, and he’s acting on all of them. First, America’s role as the dominant economic power is declining, so why own American stocks? (He doesn’t.) Second, China is emerging, and even though it may have crises from time to time, it is a good place to invest. (He does.) Third — and this is the biggie — emerging nations including China are greatly increasing the future demand for commodities such as oil. (He’s in with both feet.)

“Thirty years ago, 3 billion people were not even participating in the world economy, and now they are trying to live like we do,” he notes. That emerging megaforce, says Rogers, will put a supertight squeeze on commodity prices across the board, from beef to bullion.

Oil Climbs Above $73, Nat. Gas Rallies as Equities Fly High – Rigzone

Jumping toward $74 a barrel on an American holiday, crude oil rallied more than $1 from last week’s closing price, bolstered by a weaker dollar and a rise in the equities market. Also gaining today, natural gas closed 12 cents below $5 as the energy commodity continues to strengthen despite bearish fundamentals.

After rallying to an intra-day high of $73.84, the price of crude oil settled slightly lower to $73.27 on the NYMEX Monday, a gain of $1.50 from Friday’s close. Additionally, the US dollar eased against a basket of foreign currencies, helping to spur a rally in today’s commodity prices.

China Iron Ore Imports Exceed Real Demand, CISA Says – Bloomberg via Chinamining.org

Iron ore imports by China, the world’s largest buyer, have exceeded real demand by 50 million metric tons this year, the country’s steel association said.

China’s iron ore imports surged to a record this year, hurting the group’s bid to negotiate a contract price cut bigger than the 33 percent offered by Rio Tinto Group and BHP Billiton Ltd. The nation is looking at cutting the number of licensed importers, industry minister Li Yizhong reiterated today.

Read Full Post »

China’s Sinohydro to build hydroelectric project in Ecuador

Ecuadorian President Rafael Correa signed a contract today with Chinese company Sinohydro Corportation.  The company will be in charge of building the Coca-Codo-Sinclair hydroelectric project along Ecuador’s Amazon river.

The project is valued at $2 billion usd and will become Ecuadors largest hydroelectric facility.  Once completed, the hydroelectric facility will be capable of meeting 75% of the country’s total power supply, reports Xinhua.

According to this Xinhua article, the Export-Import Bank of China will cover 85 percent of the project’s total cost, with the remaining 15 percent covered by the Ecuadorian government.

President Correa said that “the launching of this project would be a historical event as it represents one of the biggest foreign investments in Ecuador and will create about 4,000 direct jobs and 15,000 indirect jobs in Ecuador.”

Read Full Post »

Jim Rogers Investment strategy in time of crisis CNBC

Words of wisdom, as usual, from my man Jim Rogers.

“Protectionism is getting worse and worse. I’m terribly worried about because protectionism lead to the Great Depression… I’m worried about a lot of things. A 50% rise in 6-9 months is something to worry about. You usually have corrections after that.

Read Full Post »

Use it or lose it!

BEIJING, Sept 14 (Reuters) – China’s finance ministry on Monday ordered local governments to use money allotted to them under a 4 trillion yuan ($585 billion) stimulus package quickly and efficiently, or else risk losing out on future spending.

The central government could “delay or cut” further allocations of money to those provincial governments that do not use their existing stimulus funds appropriately or do not raise enough of their own funds to complete the projects, the ministry said in a statement on its website (www.mof.gov.cn).

The move aimed to “ensure that projects backed by the central government get started in time and that budgeting for them is accelerated, in order to achieve our strategic goal of expanding domestic demand and promoting economic growth,” it said.

Click here to access the full article from Reuters

Read Full Post »

Newswire: China and Mongolia

1) Wen Signals Unprecedented Spending Will Drive Chinese Rebound – Bloomberg

China’s Premier Wen Jiabao signaled he will maintain unprecedented
government spending to drive a recovery from the slowest expansion in
almost a decade.

“China’s economic rebound is unstable, unbalanced and not yet solid,”
Wen said yesterday in a speech at the World Economic Forum in Dalian,
a city in northeastern China. “We cannot and will not change the
direction of our policies when the conditions aren’t appropriate.”

To read the full article please visit –
http://www.bloomberg.com/apps/news?pid=20601080&sid=aF3.IaUQ.JEo

2) Standard Bank Borrows $1 Billion From Chinese Banks

Standard Bank Group Ltd., Africa’s largest lender, said the $1 billion
loan facility it signed with four Chinese banks will be mainly used
for clients developing projects on the continent.

“The money will be used mainly to support our Africa business, for
clients wanting to do business in Africa and this would include
Chinese clients,” said Chief Executive Officer Jacko Maree, after
signing the five-year facility in Macau. It will be used mainly to
fund projects, he added.

To read the full article please visit –
http://www.bloomberg.com/apps/news?pid=20601116&sid=aLPkKY95BnaY

3) Mongolia Fund to Manage $30 Billion Mining Jackpot

The Mongolian government will set up a sovereign wealth fund using
mining royalties and tax revenue, and distribute part of the income to
citizens to alleviate poverty, said Finance Minister Sangajav
Bayartsogt.

The fund, to be run by professional managers from 2013, will disburse
part of its annual income to every Mongolian in cash or non-cash
securities to let them own stakes in the country’s mining wealth,
Bayartsogt said. Initial capital will be drawn from Ivanhoe Mines
Ltd.’s $4 billion Oyu Tolgoi copper- gold mine project, estimated to
generate $30 billion in tax revenue over 50 years, he said.

“We’re drafting the idea to implement the proposal, and we’re
studying examples like the Alaskan Permanent Fund,” Bayartsogt said in
a Sept. 9 interview in the capital Ulaanbaatar, declining to specify
the size of the proposed fund.

To read the full article please visit –
http://www.bloomberg.com/apps/news?pid=20601109&sid=aWm8u8kb0R5E

—
Sent from my mobile device

Read Full Post »

World Bank discusses investing in Africa with China Investment Fund

BEIJING — World Bank President Robert Zoellick said he is talking to Chinese government officials about cooperating on investments in Africa, which he said could help boost the continent’s economic growth.

Mr. Zoellick told reporters Wednesday during a visit to the Chinese capital that China Investment Corp., the nation’s sovereign-wealth fund, has expressed interest in investing in the World Bank’s recently launched asset management company, which invests private-sector funds into places like sub-Saharan Africa and Latin America.

World Bank President Robert Zoellick
On Wed, stated he will press Group of 20
for more aid to developing countries [WSJ]

“CIC expressed interest in this as a commercial investment vehicle, but obviously there is no decision yet on their part,” Mr. Zoellick said. Other sovereign-wealth funds and pension funds are also interested in the new investment vehicle, he said, which manages some $4 billion in funds.

Click here to read J.R. Wu and Andrew Batson’s complete article at the WSJ

Read Full Post »

China Mobile’s OPhone debuts in Beijing

Can anyone else catch that intense aroma of bootleg in the air? I don’t mean to point fingers at China because hey… all the major mobile company’s around the world have made Iphone / smart phones that are comparable to the Iphone.

These phones are China’s homegrown challenge to the Iphone which has finally reached a “non-exclusive” agreement with China Unicom, which will be the initial carrier Apple works with in the mainland.

Employees of China Mobile show off different designs of OPhone
handsets at the first-issuing ceremony in Beijing, China, August 31, 2009.
(Xinhua/Yuan Zhou)

(Xinhua/Yuan Zhou)

I say… Let the competition begin. I just wonder if something shady is going going on behind the scenes because China Mobile and China Unicom are more like reflections of one another in terms of their company structure and place in the Chinese economy. Yes, China Mobile is bigger and has far great market share, and yes both company’s have separate management and are traded on different tickers on various stock exchanges.

Nonetheless, the government has a heavy hand in both and I wonder how Apple is dealing. A friend of mine who is quite observant and logical once told me

“Government wants two big company’s to make illusion of real competition, but read story is two company’s mean more important jobs for people with connections and image of fair market.”

I personally own shares of China Unicom ADR here in the states. Meaning… despite what people tell me about the real situation with telecoms in China, officially, I buy into the hype.

China Unicom (CHU) –
Year to date performance Aug 31, 2009

Read Full Post »

Sinopec’s profit soars; announces plans to boost oversea expansion

Sinopec’s (a.k.a China Petroleum & Chemical Corp.) net income rose at least tenfold to 22 billion yuan ($3.22 billion usd) in the second quarter according to this Bloomberg article.

The company has also announced it is planning a “rapid” overseas expansion in order to secure energy supply adequate to feed Chinese demand.

[Sinopec I passed on a bus ride to Shanxi, October – 2006]

The announcement, along with the company’s record gains in profit come as other global giants in the energy industry such as Royal Dutch Shell and Exxon Mobil have seen their earnings decline as prices plummeted and demand waned when the global slowdown ensued at the end of 2008.

According to Bloomberg, Sinopec supplies 80% of China’s fuel needs and is China’s largest refiner of crude oil. The company is looking for new foreign partners, expand its refining capacity and reduce operational costs. The company expects demand will remain strong in China and that oil prices will continue to rise throughout the second half of the year.

Here are a few highlights from the Bloomberg article, “Sinopec to Boost Expansion Abroad After Profit Surges to Record,” which you can access in full by clicking here.

“Sinopec’s main business is refining and it needs to increase its oil reserves and reduce its reliance on other oil producers,” said Larry Grace, an independent oil analyst based in Hong Kong. “There’s a government directive to increase overseas oil and gas assets.”

…

Sinopec gets almost all its revenue from refining and the sale and distribution of fuels. Oil production accounted for just over 2 percent of sales, according to its 2008 annual report. The company imports about 80 percent of the crude it processes.

…

Su said the company will accelerate its “go global” strategy.

Parent company China Petrochemical Corp. said on Aug. 18 it had concluded the C$8.3 billion ($7.7 billion) acquisition of Addax Petroleum Corp. to secure reserves in Iraq and Africa. China Petrochemical has assets in Russia, Angola, Ecuador, Australia, Canada, Kazakhstan and Myanmar.

Sinopec’s parent completed the purchase of Tanganyika Oil Co. for about $1.8 billion in December. Vancouver-based Tanganyika holds stakes in two Syrian production-sharing agreements covering the Oudeh and Tishrine/Sheikh Mansour blocks after expanding from Tanzania in 1996.

Read Full Post »