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World

  • Country Risk - Where the political and economic stability of the host country is questionable, and abrupt changes in the business environment could adversely affect profits or the value of the company’s assets.

    Resource Nationalism - The tendency of people and governments to assert control, for strategic and economic reasons, over natural resources located on their territory.
  • As had been expected, China, already the world No. 1 gold producer, saw its output rise again last year.  The country produced a record 360.96 tonnes  of the yellow metal in 2011, a 5.9% increase, making it the world’s top gold producer for a fifth consecutive year, according to  the China Gold Association.

  • Prime Minister Vladimir Putin has decried the illicit use of offshore structures by Russian state businesses to spirit cash out of the country and ordered them to return from the “offshore shadows”. The comments  mark his clearest indication to date of concern that accelerating capital flight is being partly driven by corrupt schemes run by managers at state businesses.

  • Russian metals group Norilsk Nickel is in talks with banks for a loan of up to $3.5 billion to buy back shares, potentially marking its first international syndicated loan since 2008. The company’s board approved a buyback of 7.7 per cent of its shares at $306, a total of $4.5 billion. Negotiations are going on with six banks that are part of Norilsk’s primary lending group, which largely consists of European banks, a European banker has said.

  • China has extended a resource tax on domestic sales of crude oil and natural gas from some regions to the whole country and expanded the list of taxable resources to coking coal and rare earths from November 1. The move, billed as a way of conserving resources and limiting environmental damage, is part of a long-awaited tax reform that would enrich the coffers of local governments but slash the earnings of resource companies, such as PetroChina, China National Petroleum Corp and Baotou Steel Rare Earths by billions of dollars each year.

  • China’s Jinchuan Group Ltd has signed agreements to invest in two laterite mines in the Philippines. Jinchuan, China’s top nickel producer and third-biggest copper producer, will join Zamora Group and Macroasia Group to develop two laterite mines in Palawan Island in the Philippines. A statement on the Chinese firm’s website did not provide the details, including the size of the mines.

  • The board of Russian metals group Norilsk Nickel has approved a new share buyback and was swiftly criticised by aluminium group UC RUSAL for acting in the interest of long-time rival shareholder Interros. Norilsk has said it has yet to decide the number of shares to be purchased and their price.

  • Chinese smelters expect supplies of copper concentrate to rise as early as late 2012, paving the way for higher charges, as the Oyu Tolgoi copper and gold mine starts to come onstream. That may prompt Chinese smelters to raise term treatment and refining charges (TC/RCs). “The startup (of Oyu Tolgoi) may help improve the concentrate shortage in the Chinese domestic market,” Mr. Yang Changhua, senior analyst at state-backed research firm Antaike said. Higher charges, typically seen when supply rises or demand falls, cut concentrate import prices.

  • Gold makes the world go round. The price of gold continues to grow at a fantastic rate, reaching new heights. Not that long ago its price surpassed all expectations, and today gold is more expensive than platinum. Experts believe gold is the most reliable asset of the second half of 2011. They point out that under the conditions of instability in the U.S. gold grows as investors try to invest in safe assets whose range is constantly shrinking.

  • Last year, when Ukraine failed to pay $20 million it owed for gas, Russia threatened to cut off supply, leading to another fierce argument between the two countries. A year earlier, too, their disagreement over similar payments had resulted in supply to about 20 European nations being disrupted, or even completely cut off, as gas  from Russia reaches them through Ukraine. Russia’s usual response to any disagreement over price is to cut off supply. Mongolia knows this to its cost, as it is 100 per cent dependent on Russia for its petrol supply. This dependence has been there ever since Mongolians began using petrol 92 years ago.

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Do you agree with increasing state participation in the Draft New Mining Law?
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