John Lothian Newsletter Metals Edition

February 23, 2012 - Flourishing London Metal Exchange Is to Assess Its Suitors; Copper has biggest shortage in two years

2012-02-23T14:08:00.003-06:00

Yesterday's top stories were "Iron Giant" by Tim Heffernan for The Atlantic and "NFA considering proposal to restore money lost by MF Global" by Lynne Marek for Crain's Chicago Business. These were followed closely by "Chris Whalen: JPM and the Banks Have the MF Global Money And the Status Quo Is Protecting Them" on Jesse's Café Américain.

Quote of the Day:

“The London Metal Exchange can’t continue to exist as an independent entity. There’s a real business case for it to merge with a larger exchange.”

-Will Rhode, a senior analyst at the TABB Group in London, in "Flourishing London Metal Exchange Is to Assess Its Suitors" by Mark Scott for The New York Times

Observations - Statistics - Commentary

Gold Profits from World Turmoil: Carlos Andres
International Business Times via NASDAQ
Volatile markets. Natural disasters. Geopolitical turmoil. Last year was definitely one for the record books, according to Carlos Andres, managing editor and publisher of the Frontier Research Report. With the world in turmoil, is there any upside for mining investors? Andres believes there is for investors courageous enough to look past the perceived risk and snap up battered, but fundamentally sound, junior mining stocks. In this exclusive interview with The Gold Report , Andres talks about why historical data points to a breakout year for gold and perhaps gold shares.
http://jlne.ws/zqFQP3

Gold to rise much higher in this decade, do not sell it: Jim Rogers
The Economic Times
Throughout history when you have people printing money and debasing currency, the way to protect yourself and to make money is to own real assets. Silver, rice, natural gas, and those are not specific recommendations. I am just saying those are natural resources. You now have the Bank of Japan, the Bank of England, America, the Chinese apparently are loosening up. Everybody is now loosening the money supply, printing money. That's good for real assets.
http://jlne.ws/zxzUda

A Combined Glencore/Xstrata Should Buy Peabody Energy
Seeking Alpha
There's been a lot of discussion about a combined Glencore, (GLCNF.PK) and Xstrata, (XSRAY.PK) -- Glenstrata -- potentially acquiring iron ore assets. And a recent article on SeekingAlpha did a good job at throwing copper companies such as Teck Resources, (TCK) into the mix. Another speculation involves Glenstrata acquiring Anglo American, (AAL). However, that deal may be too large for Glenstrata to shoot for right away. Finally it's been suggested that Glenstrata acquire Walter Energy (WLT). A stronger case can be made for Glenstrata going after coal giant Peabody Energy, (BTU).
http://jlne.ws/zpdCFY

LME Fees an Untimely Distraction
WSJ.com
Today’s meeting of the London Metal Exchange board is likely to be a lively affair. On the agenda for discussion by the LME’s 12 board members are the bids received to buy the exchange–the largest of its kind globally for metals trading–and a proposal to increase fees that has caused uproar among several of its members. The two issues aren’t actually linked, although the exchange has been accused of seeking the fee hike in order to drive revenues higher and attract a better valuation during the bidding process.
http://jlne.ws/wmozHN

**More on the LME board meeting below. Members offering few comments following discussions.

From Dow Jones:

UPDATE: LME Says Sale Process Continues, But No Further Comment

--LME says sale process continues but declines to provide details
--LME comments follow board meeting to discuss bids
--No details on whether some bidders excluded now from process, and who remains

JLN Metals Scorecard	2/22/2012

NYSE LIFFE US Total Volume	84,133

100 oz. Gold Futures Volumes
NYSE LIFFE US	42
CME/NYMEX (Globex + PNT)	179,410
CME/NYMEX Open Auction	2,505
NYSE LIFFE market share	0.02%
NYSE LIFFE US Electronic market share	0.02%

100 oz. Gold Futures Open Interest
CME/NYMEX	465,922
NYSE LIFFE US	1602
NYSE LIFFE US market share	0.34%

Mini Gold Volume
NYSE LIFFE US	5,455
CME E-micro Gold (10 Troy oz)	1,740
CME/NYMEX miNY	322
NYSE Liffe market share (Contracts)	72.57%
NYSE Liffe market share (Notional)	84.39%

5,000 oz. Silver Futures Volume
NYSE LIFFE US	293
CME/NYMEX	90,097
NYSE LIFFE US market share	0.32%

Mini Silver Volume
NYSE LIFFE US	3,962
CME/NYMEX miNY	128
CME/NYMEX E-mini	0
NYSE LIFFE US market share	96.87%

Additional Metal Futures Volume statistics
EUREX Gold Futures (100 troy ounces)	0
TOCOM Gold Futures* (1 kg / 32.15 ounces)	76,793
TOCOM Mini Gold Futures* (100 grams / 3.215 ounces)	32,030
TOCOM Silver Futures* (10 kg / 321.51 ounces)	537
MCX India* (1 kg / 32.15 ounces)	35,575
Dubai Gold & Commodities Exchange (32 troy ounces / 1 kg)	1,365
*Today's date

METAL ETFS	METAL ETFS
ProShares Ultra Silver	429,023
Powershares DB Base Metals Fund	192,640
Market Vectors Gold Miners GG	3,041,325
MARKET VECTORS JUNIOR	704,518
ProShares UltraShort Gold	123,002
ETFS Precious Metals Baskets Trust	1,170
iShares COMEX Gold Trust	822,846
iShares Silver Trust (ETF) historical prices	3,551,325
ETFS PHSYICAL PALLADIUM SHARES	75,113
ETFS PHYSICAL PLATINUM SHARES	57,254
ETFS GOLD TRUST	25,967
ETFS SILVER TRUST	39,072
Market Vectors Steel	62,177
ProShares Ultra Gold	99,236
ProShares UltraShort Silver	511,579
SPDR Gold Trust	3,504,221

Lead Stories

Flourishing London Metal Exchange Is to Assess Its Suitors
New York Times
Martin Abbott, chief executive of the London Metal Exchange, has a lot on his plate. Along with running the world’s largest metal futures exchange, Mr. Abbott also is overseeing a bidding process that could lead to the £1 billion ($1.6 billion) takeover of the 135-year-old L.M.E. On Thursday, the exchange’s board will meet to discuss approximately eight takeover offers. The bidders include some of the world’s largest exchanges, including NYSE Euronext and IntercontinentalExchange, according to people with direct knowledge of the matter. Both companies declined to comment.
http://jlne.ws/A6PkS6

**The discussion regarding valuation and clearing potentially moving in-house (see second FT article below) could get interesting today. Tweeting out LME stories via @JLNMetals.

Valuing the London Metal Exchange
Financial Times
What price the London Metal Exchange? With the 135-year-old exchange’s board meeting on Thursday to judge the first round bids, that will be the question on everyone’s mind – particularly the shareholders of CME Group, ICE, NYSE Euronext and the other four or so companies that are bidding.
http://jlne.ws/Ay2jEI

Prospect of LME’s sale puts focus on clearing
Financial Times
When the London Metal Exchange saidlast autumn that it would consider a sale, the move kindled talk of booming investor interest in commodities and the metals price “super-cycle”. But much of the interest in the 135-year-old member-owned exchange is thanks to an altogether more prosaic boom – in the clearing industry.
http://jlne.ws/y6sOL1

LME Exchange User Fee
Press Release
The LME Board has considered points raised by members over the new Exchange User Fee and has, therefore, decided to make a number of amendments. The new fee will not apply to short-dated carries (anything from Tom to 15 days inclusive), which will remain unchanged. Implementation of the Exchange User Fee has been delayed until 2 July 2012 to allow for systems compliance.
http://jlne.ws/zuZZoS

LMEswaps Volumes Strong In First Month Of Trading
Press Release
The London Metal Exchange (LME) announces encouraging volumes in LMEswaps trading since launching the contracts on 23 January 2012. A total of 2,400 lots traded, of which 2,368 were in aluminium, 30 in copper and two in nickel.
http://jlne.ws/z4t4Ae

Copper has biggest shortage in two years
Bloomberg News via Financial Post
Copper had the biggest shortage in two years in November on imports into China, the world’s largest buyer, according to the International Copper Study Group. Refined production lagged behind demand by 119,000 metric tons, the most since 120,000 tons in March 2010, Ana Rebelo, ICSG chief statistician, said by phone today from Lisbon. China’s copper imports were “very low” in the first half of last year and then rebounded in November and December, she said.
http://jlne.ws/w1UGhB

ICSG says 119,000 mt refined copper production deficit in Nov
Platts
The refined copper market balance for November 2011 showed a production deficit of 119,000 mt largely attributable to China's strong net imports and resulting high apparent usage, according to preliminary International Copper Study Group data Thursday. When making seasonal adjustments for world refined production and usage, November showed a deficit of 156,000 mt, the report said.
http://jlne.ws/A76pVr

Gold Hits 2012 Highs
WSJ.com
Gold climbs in the last half hour of what had been a sleepy, near-unchanged type of trading day. Comex gold hits the highest intraday price since mid-November, a move traders attribute to supportive technical signals and demand for alternative assets due to the usual set of worries about a potential euro-zone crisis.
http://jlne.ws/xjutKK

Gold Falls In Asia As Investors Take Profits
WSJ.com
Gold prices slipped in Asian trading Thursday, as investors locked in profits from a technically driven rally during the previous session. Spot gold was trading at $1,773 a troy ounce at 0600 GMT, down $2.80 from its previous close and $8.70 off Wednesday's intraday high, due to profit-taking driven by selling in China and Hong Kong. "We are seeing a bit of selling interest," a trader in Hong Kong said. Physical demand had softened after gold rallied in the last few sessions but is likely to pick up if prices fall below $1,700/oz, he said.
http://jlne.ws/y0fXWu

Indian Gold Imports in 2012 Seen Down 20 pct
International Business Times
Indian gold imports in 2012 could fall by a fifth for the first time in three years to 770 tonnes as investors chase better accruals from equity markets and other financial instruments, possibly ceding the position of top consumer to China. Gold prices in Indian rupees have gained five percent so far in this calendar year as compared to 17.5 percent gains in stock markets in Asia's third largest economy which seems to be recovering after a dismal 2011.
http://jlne.ws/w7BCnT

Impala Platinum Mine Stoppage Not Fueled by AMCU, Union Says
Bloomberg Businessweek
The Association of Mineworkers and Construction Union denied it had any role in starting or encouraging an almost four-week stoppage at Impala Platinum Holdings Ltd.’s Rustenburg platinum mine, the world’s largest. The AMCU rejects such allegations as “baseless,” President Joseph Mathunjwa told reporters today in Witbank, in South Africa’s eastern Mpumalanga province.
http://jlne.ws/zoTBbn

Platinum Prices up 3% on Supply Disruption
International Business Times
Platinum prices shot up more than three percent Wednesday after Impala Platinum Holdings Ltd., the world's second largest platinum producer, told buyers April deliveries would be slashed in half because of a strike in South Africa. The strike at the Rustenberg mine, which began Jan. 20 and has been declared illegal by a South African court, idled 17,000 workers. Implats, as the owner is also known, fired the strikers but has been hiring back those willing to resume mining. To date, about 8,368 have been rehired, not enough to resume full production.
http://jlne.ws/A8ilxf

Exxaro Yet To Find Zincor Buyer, Considering Options
Dow Jones Newswires via Fox Business
South African mining company Exxaro Resources Ltd. (EXX.JO) said Thursday that in the next six months it will decide what to do with its Zincor zinc refinery business, which stopped production in December on account of it becoming uneconomical. The company tried to sell Zincor before stopping production, but didn't receive any offers. Exxaro said it was shutting the operation due to energy shortages in South Africa and because electricity cost increases made it too expensive to carry on.
http://jlne.ws/z0Cn6l

**More on Exxaro under Production News.

Goldman’s Luca Ferrari Retires
Bloomberg
Goldman Sachs Group Inc. (GS)’s Luca Ferrari, an investment banker to Xstrata Plc (XTA) on its proposed merger with Glencore International Plc, is leaving the company after 12 years. Ferrari, a managing director based in London and head of Northern European M&A at the firm, joined from UBS Warburg in 2000. He was named a partner in 2006, according to an internal memo seen by Bloomberg News and confirmed by a spokeswoman in London today.
http://jlne.ws/y7wjQt

Futures & ETF News

Comex Gold Higher on Safe-Haven Demand, Fresh Technical Buying
Kitco News via Forbes
Comex April gold futures prices are trading modestly higher and hovering near a three-month high in early U.S. dealings Thursday. The precious yellow metal is boosted by fresh safe-haven investment demand and on fresh upside near-term technical momentum gained by the bulls this week. The key “outside markets” are also in a mildly bullish daily posture for the precious metals so far Thursday, as the U.S. dollar index is lower and crude oil prices are steady to firmer. April gold last traded up $5.70 at $1,777.10 an ounce. Spot gold was last quoted down $0.10 an ounce at $1,776.25. March Comex silver last traded up $0.291 at $34.55 an ounce.
http://jlne.ws/AmqPTR

Gold futures edge higher as dollar pulls back
MarketWatch
Gold futures rose Thursday, boosted by a weaker dollar and expectations that central banks will maintain loose monetary policies for some time to come.
http://jlne.ws/xcCCpf

Gold Miner ETFs May be Nearing Turning Point
ETF Trends via Yahoo! Finance
Gold miner exchange traded funds may be gathering strength to finally outperform bullion on low valuations and a shift to gold-related stocks. Gold producers are heading for an “inflection point” triggering a rally, Barrick Gold Corp. (NYSE: ABX) CEO Aaron Regent told Bloomberg.
http://jlne.ws/w64b3U

Barrick Sees Gold Stocks ‘Inflection Point’ as ETFs Nab Funds
Bloomberg
Barrick Gold Corp. (ABX) and Goldcorp Inc. (G), the world’s largest producers of the metal, are poised to outperform bullion after gold-mining companies fell to their cheapest in at least a decade, executives said. Gold producers are heading for an “inflection point” triggering a rally, Barrick Chief Executive Officer Aaron Regent said in an interview. They have been punished as investors decided the shares should no longer trade as a proxy for physical gold, he said.
http://jlne.ws/xT4aAl

List of Top Commodity ETFs
ETF Trends via Yahoo! Finance
The demand for a finite natural resources and long-term weakness in the U.S. dollar are major market themes. Commodity exchange traded fund investors can take advantage of the daily price changes that reflect the tug-of-war between supply and demand or take on a long-term macroeconomic view.
http://jlne.ws/yNnW8K

Commodities

TSX Poised To Extend Gains On Commodities
NASDAQ
Canadian stocks may open higher Thursday amid firm commodities and varied cues from the global equity markets. Stocks in Asia and Europe were mixed as investors mulled whether Greece will keep itself afloat with the second emergency bailout announced Tuesday. U.S. stock futures were pointing to a marginally higher open.
http://jlne.ws/AioXlj

Euro denominated oil hits record
FT.com
Oil prices soared to a record high in euro terms, surpassing the peak touched in the 2008 price spike and posing a fresh problem for eurozone economies already struggling under the weight of the region’s debt crisis. The euro-denominated price of Brent crude, the global benchmark North Sea crude, rose to a peak of 93.63 pounds a barrel on Thursday, surpassing the previous high hit on July 3, 2008. The new euro record comes just a day after Brent hit a record in sterling terms.
http://jlne.ws/wzpKZO

Bulls on top at International Petroleum Week
FT.com
International Petroleum Week, the annual gathering of the oil industry in London, traditionally is a binary event for oil price sentiment: bullish or bearish, with little room for moderates. But this year, there was only one view. The cocktail parties and dinners in London’s upmarket Mayfair district were dominated by the bulls. “It is all about Iran. Full stop,” a veteran of many an IP Week told me, summing up the oil industry’s sentiment at the meeting.
http://jlne.ws/wKvTBG

Farmland goes for a premium as commodity prices tick up
USATODAY.com
In the last five years, Lon Frahm has bought 4,000 acres of farmland, expanding the size of his wheat and corn operation to more than 30 square miles of western Kansas. He's done so as farmland prices have roughly tripled in his swath of the Great Plains. But unlike some regulators and farmland investors, Frahm, 54, says he doesn't believe the United States is in danger of a farmland price bust similar to the one that devastated the housing industry in the past decade — or that crippled agriculture 30 years ago. He says he won't be surprised if farmland prices level off or even fall, but not in a catastrophic spiral like the one that left millions of homeowners owing more than their property is worth.
http://jlne.ws/zOyWF6

Investments

Precious Metals Takeovers Push Share Prices: James West
The Gold Report
We have seen all the consolidation we will see from the Q411 slump. The question now is whether the companies that are acquisition targets can evolve or grow their assets enough to warrant higher valuations in the eyes of an acquirer. I look at companies like Newstrike Capital Inc. (NES:TSX.V), my favorite gold company. It is well capitalized and has been drilling like crazy. It keeps coming up with great results. This would be a good acquisition target, except for one thing—it has not published an NI 43-101. There is no way to quantify the value of its resource, except through press releases, drill maps and back-of-napkin calculations.
http://jlne.ws/wGWQaE

Goldcorp Inc (GG) Shares Cross Above 200 DMA
DividendChannel.com via Forbes
In trading on Wednesday, shares of Goldcorp Inc (NYSE: GG) crossed above their 200 day moving average of $48.80, changing hands as high as $49.53 per share. Goldcorp Inc shares are currently trading up about 1.7% on the day. The chart below shows the one year performance of GG shares, versus its 200 day moving average:
http://jlne.ws/A7K80X

Production News

Exxaro-Coal terminal expansion to 100 mln T likely
Reuters
Major South African coal producers that own shares in the Richards Bay Coal Terminal (RBCT) may invest to expand the terminal to handle up to 100 million tonnes of coal a year, the head of Exxaro's coal unit said on Thursday. Mxolisi Mgojo said coal miners had been surprised by the improved rate at which logistics group Transnet transported their coal via rail to the port in the second half of last year.
http://jlne.ws/wiaXZN

Yamana Increases Mineral Reserves by 11%
Marketwire via Yahoo! Finance
Yamana Gold Inc. (TSX: YRI.TO) (NYSE: AUY) (LSE: YAU.L) ("Yamana" or "The Company") today announced its mineral reserves and resources for the year ended December 31, 2011. The Company's total gold equivalent ounces(1) (GEO) in the proven and probable mineral reserves category increased by 2.0 million ounces to 18.6 million ounces, which represents an 11% increase over the previous year. Total measured and indicated resources were replaced and inferred GEO mineral resources increased by 39% to over 10 million ounces. The increases are net of 2011 depletion due to production of 1.1 million GEO.
http://jlne.ws/xSF3Cs

Yamana Gold To Continue To Focus On Exploration To Drive Company's Growth
Kitco News
Yamana Gold (TSX:YRI, NYSE: AUY) will focus on exploration to drive the firm’s growth, with the goal to sustainably produce 1.75 million gold equivalent ounces by 2014, company officials said Thursday. This will include output from existing mines and development projects for which construction decisions have been made.
http://jlne.ws/yj2uj4

Paramount Gold and Silver Reports Silver Grades Up to 1,896 g/Tonne From New Drilling at San Miguel Project in Mexico
Marketwire
Paramount Gold and Silver Corp. (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount") today reported some of the highest silver grades yet discovered at its 100% owned San Miguel Project in Mexico. Nine new in-fill holes drilled into the fast-growing San Antonio silver deposit returned intercepts of 20.1 meters grading 201.89 g/T of silver and 11.45 meters grading 418.21 g/T of silver. Eight of the nine holes intersected significant values, continuing the high success rate of recent months on the San Miguel Project.
http://jlne.ws/yIkQUj

Petropavlovsk ups ore reserves
ShareCast
Petropavlovsk, the Russian gold miner, has announced a chunky increase in its gold ore reserves despite the company digging up and selling plenty of the yellow stuff in 2011. The company increased its proven and probable ore reserves by 11% , as at January 1st 2012. The reserves increased from around 9.1m ounces (oz) at an average grade of 1.17 grams per tonne (g/t0 gold to around 10.2m oz at an average grade of 1.13g/t gold.
http://jlne.ws/yKmQi8

Regulatory News

CFTC takes up swap compliance; rulemaking optimism waning
Futures Magazine
The Commodity Futures Trading Commission (CFTC) met to discuss rules related to swaps compliance and swap block trades today, Feb. 23. In the 24th meeting to discuss Dodd-Frank rules, the Commission took up one final rule and one proposed rule. The final rule discussed dealt with recordkeeping, reporting and compliance rules within a swaps office, particularly the role of a chief compliance officer and required firewalls between research and trading arms of a company. Once again, issue was taken that the definition of “swap” had not been finalized and therefore many of these rules could not be fully implemented until that takes place. Commissioner Bart Chilton particularly took exception to this as it relates to the delay of implementing position limits. Commissioners Scott O’Malia and Jill Sommers voted against the final rule.
http://jlne.ws/y1kBkl

**Editor-at-large Doug Ashburn has been covering the CFTC meeting today for MarketsReformWiki.

Goldline Agrees to Refund Millions to Customers
ABC News
The precious metals dealer Goldline will have to operate under a strict new set of rules as part of a California court settlement late Wednesday of a 19-count criminal fraud complaint brought against the company last year. "No one should have to suffer from predatory and deceitful sales practices," said Adam Radinsky, who heads the consumer protection division for the Santa Monica City Attorney. "Whether they are buying gold or anything else, consumers expect a fair deal. We insisted that Goldline give them just that."
http://jlne.ws/x0RklH

Legislators show support for metal theft bill
WKYT.com
It's become a huge issue for the state. Now, Kentucky leaders are showing their support for legislation aimed at cutting down on metal thefts. Lawmakers say they are putting their collective foot down on this issue, by proposing legislation that would prevent thieves from getting fast cash for stolen metals. The legislation would open new lines of communication between law enforcement and recycling centers. Supporters say the bill would make it harder for suspects to benefit.
http://jlne.ws/xPAA2a

Scrap metal dealers hit out at plans to ban cash deals
Birmingham Post
Metal dealers in the West Midlands have criticised Government proposals to ban cash payments for scrap. Britain’s £5 billion-a-year scrap industry is facing tougher regulation as part of a government crackdown on metal theft with people selling scrap being required to register and face identity checks.
http://jlne.ws/AalpsU

Reports, Macroeconomics & Inflation

Stocks Decline After Economic Reports; Gold Jumps, Yen Weakens
Bloomberg Businessweek
Stocks fell worldwide for a second day and U.S. Treasuries rose after reports on the European and Chinese economies spurred concern about growth. Gold jumped, and the yen fell to a seven-month low versus the dollar. The MSCI All-Country World Index of equities retreated 0.4 percent to 329.17 at 4:08 p.m. New York time. The Standard & Poor’s 500 Index decreased 0.3 percent to 1,357.66. Yields on 10-year U.S. Treasuries declined six basis points to 2 percent. Gold futures climbed to $1,783.40, the highest price since Nov. 16. The yen weakened to 80.40 per dollar.
http://jlne.ws/xO6Pqh

US Stock Futures Rise On Jobless Data
NASDAQ
The U.S. Labor Department reported initial jobless claims remained unchanged at a level of 351,000 during the week ended Feb. 18. The previous week's figure was revised up from 348,000. Economists surveyed by Dow Jones Newswires expected a slight increase to 355,000. Also on tap for later Thursday are data on December home prices at 10 a.m. EST and a February reading on manufacturing activity in the Kansas City region at 11 a.m. EST.
http://jlne.ws/wZxvpk

Metals Look to US Inflation Outlook, Dollar Action
Resource Investor
Gold prices jumped to their highest in three months yesterday on the back of a widely-circulatedFinancial Times article that claimed the Federal Reserve will extend the so-called “Operation Twist” stimulus program beyond June. The scheme has the Fed selling shorter-term assets on its balance sheet in exchange for further-dated ones to target a decline in the long-term borrowing costs. Bloomberg News also cited sources saying buying by automated trading systems buoyed prices.
http://jlne.ws/zp7fNB

US forecasts brake on food inflation
FT.com
The threat of a worldwide jump in food prices has receded after farmers planted record amounts of grain in response to soaring commodity markets, the US has predicted. The official government forecast may come as a relief for households struggling with bigger grocery bills, but could quickly unravel if weather in important farming regions turns harsh.
http://jlne.ws/yg7zgx

Atlanta Fed Survey Finds Long-Term Inflation Worry
WSJ.com
Most Federal Reserve officials are fond of observing that even as they pursue a very aggressive and unprecedented monetary-policy path, their actions aren’t stirring up inflation. In doing so, they’re countering critics who worry the central bank has gone too far in efforts to stimulate growth, and that current policies are running a significant risk of generating a future surge in price pressures. Fed officials have countered they have the tools to make sure their actions don’t fuel a break out in prices. They also note the data doesn’t show much worry about future inflation gains.
http://jlne.ws/wFrpmF

Mexico inflation eases in first half of February
Reuters
Mexican price pressures were muted in the first half of February, easing the annual inflation rate to a whisker above the central bank's target ceiling, helping to anchor expectations that the bank will keep interest rates steady. Inflation in the 12 months through mid-February rose 4.01 percent, a hair above the 4 percent annual inflation target ceiling and easing from the 4.05 percent rate in the year through end-January.
http://jlne.ws/zd1X3g

Physicals & Company News

Cookson Rises in London as Buffett’s Berkshire Buys Metals Unit
Bloomberg Businessweek
Cookson Group Plc advanced to the highest in more than seven months in London after Richline Group, owned by Warren Buffett’s Berkshire Hathaway Inc., agreed to buy its unprofitable U.S. precious metals business.
http://jlne.ws/z9Xrsy

Newmont Mining Expects Strong 4Q
International Business Times
Newmont Mining Corp. (NEM), one of the world's top gold producers, is expected to report record revenue and earnings per share for the fourth quarter as higher selling prices for gold offset decreased production and increased costs. The Englewood, Colo.-based miner reports its fourth-quarter and full-year results Friday before U.S. markets open.
http://jlne.ws/xpLSSd

Alcan wants Japan Q2 aluminium premium hiked to $132-sources
Reuters
Rio Tinto Alcan is asking Japanese buyers to increase the premium they pay on primary aluminium shipments to $132 per tonne for the April-June quarter, two sources involved in informal talks between the two sides said on Wednesday. That compares with premiums of $112-114 paid over the London Metal Exchange cash price in the current quarter. Buyers pay a premium in addition to the LME cash price to cover freight and insurance and to reflect regional supply and demand.
http://jlne.ws/x22RoL

Alamos profit up on higher gold prices
Reuters via MiningWeekly.com
Canadian miner Alamos Gold reported a 16% rise in fourth-quarter profit, helped mainly by robust gold prices, and raised its semi-annual dividend by 43%. This year the company expects to produce 200 000 to 220 000 oz, up from the 153 000 oz of gold produced in 2011. It sees 2012 cash cost at $365 to $390/oz. For the October-December quarter, net income was $21.3-million, or 18 cents a share, compared with $18.3-million, or 16 cents a share, a year ago.
http://jlne.ws/yLoQCO

Silver Bull Announces Two New Board Members
PR Newswire via Yahoo! Finance
Silver Bull Resources, Inc. (TSX: SVB, AMEX: SVBL) ("Silver Bull") is pleased to announce the appointment of Joshua Crumb and John McClintock to the Board of Directors (the "Board"). With the addition of Mr. Crumb and Mr. McClintock, Silver Bull increased the size of the Board from six to eight members.
http://jlne.ws/yYAG8S

Miscellaneous News

Brokers and RIAs Agree on the Role of Precious Metals Within a Portfolio
MarketWatch
In an online survey offered at the conference website, a vast majority (85 percent) of both Registered Representatives and Registered Investment Advisors (RIAs) said they invest in commodities, indicating that this asset class is a staple within a diversified portfolio. Further, as a subset of the commodity asset class, advisors have a similar view on how precious metals should be used within a portfolio. The survey found that 33 percent of RIAs and 35 percent of Registered Reps use precious metals as part of an asset allocation strategy. By comparison, 21 percent of RIAs and 20 percent of Registered Reps use precious metals as a tactical solution. Ten percent of each group said "both."
http://jlne.ws/wZqlkj

With a strong currency, you can buy more stuff.
Slate
A lot of the discussion around the U.S.-China currency valuation controversy can leave a person with the impression that what you want as a country is to have the cheapest possible currency. After all, that will make your goods very "competitive" and gain you lots of jobs, especially valorized export-oriented manufacturing jobs. The reality is that having an expensive currency can be a valuable thing indeed. Brazil has spent the past several years combining catch-up economic growth with a floating exchange rate that's made the real much more valuable and now Brazilians are buying up Manhattan.
http://jlne.ws/wMoHFE

February 22, 2012 - LME Set to Delay New Fees System; Platinum Climbs On Output Woes, Gold Slips; Implats says strike to cut April deliveries 50 pct

2012-02-22T13:55:00.006-06:00

Yesterday's top story was "NFA considering proposal to restore money lost by MF Global" by Lynne Marek for Crain's Chicago Business, followed by another MF Global post (popular for a week now) "Chris Whalen: JPM and the Banks Have the MF Global Money And the Status Quo Is Protecting Them" by Jesse's Café Américain. "Our new gold ETF lets investors buy gold at spot prices: Nitin Rakesh, Motilal Oswal AMC" for The Economic Times and "Are the LME bids self-inflicted?" by Trevor Tarring for AMM.com were also top stories.

Quote of the Day:

“We expect huge surpluses for nickel not only this year, but next year, and probably in 2014. It’s mainly due to an increase in supply, but on the other side the stainless steel industry is facing a tough time.”

-Daniel Briesemann, analyst at Commerzbank AG in Frankfurt, in "Record Nickel Supply Expanding Glut Thwarts Rally" by Jae Hur and Ichiro Suzuki for Bloomberg

Observations - Statistics - Commentary

Iron Giant
The Atlantic
Approaching Alcoa’s 50,000-ton forging press feels a bit like approaching an alp: it starts out incomprehensibly huge and keeps getting incomprehensibly huger. From a distance, the thing dominates the horizon of the hangar-like Cleveland Works facility; as you get nearer, catching glimpses through forests of girders and around cliffs of firebrick, it begins to dominate the air above. But even as you stand at its foot, being told that the eight steel bolts anchoring it are 40 inches thick, calculating in your head that that makes them 10 feet around—even then it’s still a bit out of reach. Only when you climb it, peer down from its sixth-floor summit, and realize that the puny machine next to it is, in fact, its 35,000-ton brother—well, then you finally appreciate the size of the thing. It’s big.
http://jlne.ws/wFKQ1t

**Doesn't this article make you feel like you're standing right there next to The Fifty? Amazing work by Tim Heffernan. Can't wait to read his book.

Popularity of gold has endured for thousands of years with many yet to come
Mineweb
The World Gold Council (WGC) reaffirmed the power of the Love Trade in its 2011 Gold Demand Trends report released this week. Gold demand grew 0.4 percent in 2011 despite a 28 percent year-over-year increase in bullion's average price. After flirting with the top spot for some time, China emerged as the world's largest gold market for jewelry and investment during the fourth quarter of 2011 as demand in India weakened.
http://jlne.ws/yDHf3U

Most Manufacturing Workers Want to Ban Shop Towels That Retain Toxic Heavy Metals After Laundering
MarketWatch
In a survey released today by Kimberly-Clark Professional, nearly four in five manufacturing workers agreed that shop towels should be banned if they are not 100 percent-free of hazardous materials after laundering. The survey exclusively targets production floor employees, and is representative of the millions of U.S. manufacturing workers who use shop towels every day, in industries such as automotive, aviation, printing, food and beverage processing, as well as metals and equipment manufacturing.
http://jlne.ws/wbQzwG

**File this under Really Fascinating Issues I Didn't Know Existed.

The Price of Gold
Foreign Policy Association
For thousands of years people have gone to extremes for the sake of gold, traveling the world in search of even a flake of the metal in the dirt, they risk their lives, spend all they have and most end with up with very little, if anything at all. Gold has been used to fuel armed conflicts and conquests, and has been the sole reason to level entire mountains and forests, forever changing the environmental landscape. So if gold causes so much death and destruction than why is it so highly valued? We do not need gold to survive, in reality it has little practical use for mankind, but gold continues to be one of the world’s most desired commodities.
http://jlne.ws/wjVjIq

Partying Like It's 1934
NYTimes.com
A while back I read Lionel Robbins’s 1934 book The Great Depression; as I pointed out, it was a Very Serious Person’s book for its era. Its solution was a return to the gold standard — which would have made things worse — and free trade, which was basically irrelevant to the problem of insufficient demand. So have the VSPs learned anything these past 78 years? No.
http://jlne.ws/xrbcSb

**Man, my reading list just keeps getting better and better.

JLN Metals Scorecard	2/21/2012

NYSE LIFFE US Total Volume	66,136

100 oz. Gold Futures Volumes
NYSE LIFFE US	44
CME/NYMEX (Globex + PNT)	204,640
CME/NYMEX Open Auction	1,102
NYSE LIFFE market share	0.02%
NYSE LIFFE US Electronic market share	0.02%

100 oz. Gold Futures Open Interest
CME/NYMEX	456,676
NYSE LIFFE US	1609
NYSE LIFFE US market share	0.35%

Mini Gold Volume
NYSE LIFFE US	5,876
CME E-micro Gold (10 Troy oz)	1,961
CME/NYMEX miNY	479
NYSE Liffe market share (Contracts)	70.66%
NYSE Liffe market share (Notional)	81.75%

5,000 oz. Silver Futures Volume
NYSE LIFFE US	35
CME/NYMEX	80,194
NYSE LIFFE US market share	0.04%

Mini Silver Volume
NYSE LIFFE US	3,205
CME/NYMEX miNY	142
CME/NYMEX E-mini	0
NYSE LIFFE US market share	95.76%

Additional Metal Futures Volume statistics
EUREX Gold Futures (100 troy ounces)	12
TOCOM Gold Futures* (1 kg / 32.15 ounces)	58,964
TOCOM Mini Gold Futures* (100 grams / 3.215 ounces)	29,168
TOCOM Silver Futures* (10 kg / 321.51 ounces)	500
MCX India* (1 kg / 32.15 ounces)	N/A
Dubai Gold & Commodities Exchange (32 troy ounces / 1 kg)	1,207
*Today's date

METAL ETFS	METAL ETFS
ProShares Ultra Silver	291,254
Powershares DB Base Metals Fund	31,805
Market Vectors Gold Miners GG	2,740,254
MARKET VECTORS JUNIOR	424,355
ProShares UltraShort Gold	94,018
ETFS Precious Metals Baskets Trust	3,364
iShares COMEX Gold Trust	966,252
iShares Silver Trust (ETF) historical prices	2,782,174
ETFS PHSYICAL PALLADIUM SHARES	19,319
ETFS PHYSICAL PLATINUM SHARES	26,270
ETFS GOLD TRUST	10,624
ETFS SILVER TRUST	11,153
Market Vectors Steel	30,059
ProShares Ultra Gold	83,727
ProShares UltraShort Silver	592,589
SPDR Gold Trust	2,861,366

Lead Stories

Valuing the London Metal Exchange
Financial Times
What price the London Metal Exchange? With the 135-year-old exchange’s board meeting on Thursday to judge the first round bids, that will be the question on everyone’s mind – particularly the shareholders of CME Group, ICE, NYSE Euronext and the other four or so companies that are bidding.
http://jlne.ws/wwjtWi

**This article suggests that the LME's current business goals are not profit-oriented, but that could change with a more commercial buyer. Is 1 billion (pounds) really an accurate estimate of the exchange's value? Could in-house clearing be a next profit-making step? So many questions.

LME Set to Delay New Fees System
WSJ.com
The London Metal Exchange is expected to delay a plan to increase its fees by several months following opposition from several members, people familiar with the matter said Wednesday. The fees, which would see the rates charged to use the exchange soar, were originally slated to kick in on March 1. A delay until June or July is now likely, the people said, giving the LME more time to talk with members.
http://jlne.ws/wF4udw

Record Open Interest In LME Cobalt Marks Two-Year Anniversary Of Minor Metals Contracts
High Frequency Trading Review
The London Metal Exchange (LME) announces record market open interest in LME Cobalt two years after the launch of its minor metals contracts. LME Cobalt volumes remained strong in 2011, with 14,574 lots traded since launch, the equivalent of $540 million. LME Molybdenum traded 1,103 lots (6,618 tonnes), the equivalent of $227 million over the same period. Brand registration for both metals has also been good, with a new application from Chinese cobalt producer Yhu 9995 awaiting approval. A total of 18 cobalt brands and eight molybdenum brands have been registered since launch, from 13 countries.
http://jlne.ws/wrdkYH

Gold Falls On Profit-Taking; Investors Still Cautious
WSJ.com
Gold prices slipped in Asian trading Wednesday as investors locked in profits from Tuesday's rally that followed a European agreement on Greece securing its second bailout package. Spot gold was trading at $1,755.70 a troy ounce at 0600 GMT, down $4.60 from its previous settlement. "You'd expect a little bit of profit-taking after [Tuesday's] deal," a Singapore-based analyst said. Gold rose 1.9% Tuesday amid broad-based gains in commodities markets after officials agreed to extend Greece a EUR130 billion bailout in a bid to avoid a disorderly default.
http://jlne.ws/zPBWoU

Copper falls on demand concerns, China data
Reuters
Copper prices fell on Wednesday, reversing the previous session's sharp gains, with confidence rattled by weak export data from top consumer China and doubt over Greece's ability to implement tough reforms aimed at cutting its debt. Benchmark copper on the London Metal Exchange (LME) was untraded in official rings, but was bid at $8,409 a tonne, from Tuesday's close of $8,449 a tonne.
http://jlne.ws/wT8U1h

Platinum Climbs On Output Woes, Gold Slips
WSJ.com
Platinum futures marched higher Wednesday on continued supply disruptions in main producer South Africa, while gold edged lower as elation over the Greek bailout cooled. The most actively traded platinum contract, for April delivery, was recently $29.70, or 1.8%, higher, at $1,714.60 a troy ounce on the New York Mercantile Exchange. Platinum prices have swelled due to supply disruptions at Impala Platinum Holdings, the world's second-largest producer of the metal. An ongoing labor dispute at Rustenburg, the company's largest mine, has already resulted in two deaths and accounted for the loss of about 80,000 troy ounces of platinum output.
http://jlne.ws/xyawhH

**I included a couple of stories about Impala yesterday. 17,200 workers initially fired, resulting in deadly riots.

Implats says strike to cut April deliveries 50 pct
Reuters
Impala Platinum, the world's second-largest platinum producer, has warned customers that its April platinum deliveries would be down about 50 percent due to labour problems at its Rustenburg mine. The resumption of normal operations has been further delayed, and April deliveries will be affected, Implats group executive for marketing, Derek Engelbrecht, said in a letter to end-users.
http://jlne.ws/wlDIbY

Record Nickel Supply Expanding Glut Thwarts Rally
Bloomberg Businessweek
Mining companies and refineries are producing more nickel than at any time in history, expanding a glut that threatens to reverse this year’s rally. Production will exceed demand by 45,000 metric tons, a 73 percent jump from 2011, Barclays Capital estimates. That’s equal to 46 percent of stockpiles tracked by the London Metal Exchange.
http://jlne.ws/zoqSZW

India 2012/13 gold imports may fall 35 pct-gov panel
Reuters
Easing inflation and a revival in stock markets could dent gold imports by India, the world's biggest consumer, pushing shipments down by about 35 percent in value terms in 2012/13, a government panel said on Wednesday. Indians found gold a better investment than stocks and an effective tool to hedge against inflation in the current fiscal year when imports are estimated to reach $58 billion.
http://jlne.ws/z8QuRg

Futures & ETF News

Futures Edge Lower as Traders Eye Gloomy Data
Fox Business
Data pointing to an economic slowdown in China and across Europe, combined with Fitch's warning that a Greek default is still likely despite a bailout deal from the EU, weighed on U.S. equity futures on Wednesday.
http://jlne.ws/yigDqb

Make Money in Copper's Bright Future the Easy Way
The Motley Fool
Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the copper industry to boom as the housing market eventually recovers and global infrastructure projects grow, the Global X Copper Miners ETF (NYSE: COPX ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.
http://jlne.ws/yZh6QL

Dion's Monday ETFs Winners and Losers
The Street
http://jlne.ws/x7AFJX

Wednesday’s ETF To Watch: Dow Jones U.S. Real Estate Index Fund (IYR)
Yahoo! Finance
Investors cheered as European leaders were able to come to a consensus on a Greek debt deal late yesterday to help the severely indebted nation. The terms will total to a 130 billion euro package marking the second relief funding that the country has received in the past two years. Some believe that this may help get Greece back on track, while others feel that the deal is simply prolonging the inevitable and only providing a temporary boost to markets until the same issue resurfaces down the road.
http://jlne.ws/xxhbTw

Commodities

Goldman Lowers Forecast Commodity Returns, Keeps Overweight Recommendation
Bloomberg
Goldman Sachs Group Inc. (GS) cut its 12- month prediction for commodity returns, while forecasting gains for crude oil and gold and keeping an “overweight” allocation in raw materials. The bank reduced its estimate for returns to 12 percent from 15 percent after prices rallied this year, analysts led by Jeffrey Currie said in a report today. They kept their predictions for Brent and gold at $127.50 a barrel and $1,940 an ounce compared with $121.23 and $1,755.30 today.
http://jlne.ws/yaQ1Y5

Oil prices in sterling hit record high
FT.com
The price of crude denominated in sterling hit a record high, pushed up by fears about Iranian oil supplies and the fall in the pound against the US dollar on expectations of further monetary easing. Brent rose to 77.71 (pounds) per barrel, above the all-time high set in April last year at the peak of the Libyan civil war supply disruption of 77.707 (pounds) per barrel. The rise in the price of oil in sterling comes at a delicate time for the UK economy, and is likely to affect growth and demand for refined oil products.
http://jlne.ws/yfJr9c

Asia’s oil users to cut Iranian imports
FT.com
Asia’s big oil importers are planning to implement significant cuts in their imports of Iranian crude oil, hoping to fend off the impact of tightening US sanctions that make it far harder for companies across the world to do business with Tehran. Japan, the world’s third-largest oil importer, is close to securing a deal with Washington under which it would avoid being penalized by US sanctions. The US measures, introduced at the start of this year, make it difficult for companies to do business with the Central Bank of Iran, which acts as the clearing house for all financial transactions relating to the country’s oil trade.
http://jlne.ws/wLWMMD

Halmarick Sees Value in Resources, Soft Commodities (Video)
Bloomberg via The Washington Post
Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, talks about global financial markets. Halmarick also discusses Europe's sovereign debt crisis and China's economy. He speaks in Hong Kong with John Dawson, Rishaad Salamat, Mia Saini and Zeb Eckert on Bloomberg Television's "Asia Edge."
http://jlne.ws/x7KNPP

Investments

Forbes Earnings Preview: Newmont Mining
Forbes
Leading up to Newmont Mining‘s (NEM) announcement of its fourth quarter earnings on Friday, February 24, 2012 analysts have become more wary as expectations have fallen over the past month to earnings of $1.23 per share from earnings of $1.26 per share.
http://jlne.ws/yee7Ij

Investors Should Cut Risk as Global Woes Add Up: El-Erian
CNBC
Investors are justified for viewing the Greek debt deal with skepticism and should reduce their risk allocation accordingly, Pimco's Mohamed El-Erian said. Problems in Greece are just the highest-profile set of geopolitical risks with which the market must deal — the others being Iran and Syria — which could cause disruptions sharply and quickly, said the co-CEO of the world's largest bond fund manager.
http://jlne.ws/wiSdHn

Gold Gets Nervous
Seeking Alpha
Is gold the biggest winner from the Greek bailout? It was certainly on a tear on Tuesday, rising to $1,757 (U.S.) an ounce, up $22 or 1.3 per cent – which glows next to slight gains among U.S. stocks, dips in European stocks, and shrugs in the European bond market. Gold producers are doing even better. The NYSE Arca Gold BUGS index of global producers is up 2.8 per cent in afternoon trading, marking its biggest one-day gain in nearly a month. Canadian gold producers, in particular, are shining: Barrick Gold Corp. (ABX) is up 2.9 per cent and Goldcorp Inc. (GG) is up 3 per cent, which is helping to deliver triple-digit gains for the broader S&P/TSX composite index.
http://jlne.ws/y198AY

‘Fantastic Opportunity’ in Silver: Gold Mining CEO
CNBC
Australian gold miner, Kingsgate Consolidated, reported an almost 200 percent jump in profits for the second half of 2011 on Wednesday, boosted by robust sales of the precious metal. But, the company is planning a bigger push into silver in the coming years, according to the CEO Gavin Thomas. “Silver is a fantastic opportunity... I see there’s a lot of upward price (for the metal), because of the lack of supply,” Thomas told CNBC on Wednesday, adding that silver could rise to $50 per ounce over the next 24 months.
http://jlne.ws/yXTB7Z

Trading Silver with Options to Earn 127% in 4 Months
Resource Investor
So, how can you position yourself to profit from silver's coming advance without exposing yourself to the excessive risk? One way is to use options – either on silver futures contracts or shares of silver-related stocks and exchange-traded funds (ETFs) – in a strategy that strictly defines and limits your risk while still offering short-term returns of 100% or more.
http://jlne.ws/ytl8PJ

Hecla Mining Shares Surged: What You Need to Know
The Motley Fool
What: Silver miner Hecla Mining (NYSE: HL) is looking extra shiny today, with its shares up 11% after reporting fourth-quarter results and boosting its spending outlook for 2012. So what: For the quarter, Hecla reported a profit of $0.07 versus a loss in the year-ago period of $0.05. Revenue fell by 23% to $102.9 million. The real story, though, is the company's 37% increase in capital expenditures to $140 million, which signifies the company's overall belief that silver prices are likely to rise substantially in fiscal 2012. The primary increase was seen at its Greens Creek mine in Alaska, where Hecla plans to spend $90 million.
http://jlne.ws/xPYrBa

Production News

Collahuasi Copper Mine in Chile Restarts After Accident
Bloomberg
Anglo American Plc (AAL) and Xstrata Plc’s (XTA) Collahuasi operation in Chile restarted today after a fatal accident shut the world’s third-largest copper mine. Both mining and plant operations were closed yesterday pending an investigation into the worker’s death at the mine’s sulfur plant that occurred Feb. 20, spokeswoman Bernardita Fernandez said in an e-mailed statement today. The investigation will continue even as mining restarts, she said.
http://jlne.ws/xliOGc

Brazilian Gold Up Almost 19% on Assay Results from Boa Vista Project
NASDAQ.com
Brazilian Gold Corporation (BGC.V) jumped almost 19% to 70 cents in the morning after reporting assay results for the first 5 holes of the Phase II drill program (approx. 2,500 m) on the VG1 target (Boa Vista project) in the Tapajos region of northern Brazil.
http://jlne.ws/x52cgq

Rambler Metals: Gold production exceeds projections; drilling finds new high grade potential
Proactiveinvestors (UK)
Rambler Metals and Mining (LON:RMM, CVE:RAB) today updated investors on activities at its flagship Ming mine, where it says 5,000 ounces of gold have been poured so far. Gold recovery through the plant is nearing 92 per cent and since the start of production last November, Rambler has poured 3,563 ounces for the quarter to January 31 this year - higher than projected due to higher head grades.
http://jlne.ws/x3H7ND

Iron Creek Reports Drilling Results from its Pampa Sur Precious Metals Project, Chile
PR Newswire via sacbee.com
Iron Creek Capital Corp. (TSX-V: IRN - "Iron Creek") is pleased to report results from the drilling program carried out at its wholly owned Pampa Sur silver-gold project in northern Chile (see news release dated November 7th, 2011). The principal targets of the program are low-sulphidation, epithermal precious metals quartz veins of a type similar to those found at Yamana's El Peñon mine located along trend some 40km to the north-northeast.
http://jlne.ws/x3ZaTJ

MAG Silver Announces Silver/Lead/Zinc Intercepts at La Esperanza
Yahoo! Finance
MAG Silver Corp. (TSX: MAG.TO) (AMEX: MVG) ("MAG" or the "Company") announces significant silver/lead/zinc vein intercepts in the first three holes drilled in an exploration drill program on its La Esperanza project in northern Zacatecas State, Mexico. MAG is earning a 60% interest in the project from Canasil Resources Inc. (TSX-V: CLZ.V) ("Canasil").
http://jlne.ws/zfFXUV

Regulatory News

CFTC delays vote on swap dealer designation
FT.com
A vote to draw a line under the biggest traders in US derivatives markets, subjecting them to extensive new rules, has been cancelled in the latest delay to reforms passed in response to the financial crisis. The US Commodity Futures Trading Commission said a final rule to define dealers and other major participants in the $300tn swaps market had fallen off the agenda of a meeting scheduled Thursday in Washington. The rule was proposed jointly with the Securities and Exchange Commission, which had not yet scheduled a public vote on the matter.
http://jlne.ws/x4tBOo

Ex-SEC Commissioner On Dodd-Frank: 'This Is Not A Recipe For Strong Regulation'
Bloomberg Law via The Huffington Post
"This is not a recipe for strong regulation," said Karmel, who is now a professor at Brooklyn Law School. "We not only did nothing to change the balkanization of the regulatory system; we actually made it a little bit worse by creating FSOC [the Financial Stability Oversight Council]."
http://jlne.ws/z4o725

**"What we've moved away from is holding people responsible for business failure." Great quotes from Karmel. Love her glasses.

New poll shows most oppose changes to mining regulations
JSOnline
A new poll of Wisconsin voters shows most of those queried in the survey say they are opposed to streamlining environmental regulations for mining. Public Policy Polling conducted the poll for the Wisconsin League of Conservation Voters. Thirty-four percent said they supported streamlining environmental regulations while 49% said they opposed changes affecting the regulation of iron ore mining.
http://jlne.ws/yUHWl1

Reports, Macroeconomics & Inflation

U.S. Stocks Decline Amid Disappointing Global Economic Reports
Bloomberg Businessweek
U.S. stocks fell, a day after the Standard & Poor's 500 Index failed to hold at an almost four- year high, as sales of previously owned houses missed estimates and data from Europe and China spurred economic concern.
http://jlne.ws/AriNbw

Oil edges lower on dollar, economic data
MarketWatch
Crude-oil futures edged lower on Wednesday amid a higher dollar, worrying European and Chinese data, and as questions about Iran’s nuclear program continued to cloud the global oil supply outlook.
http://jlne.ws/wKtmxe

Brazil Inflation Drop Shows Rate Cuts Are Right, Templeton Says
Bloomberg
Brazil’s falling inflation and slower economic activity since the start of the year show the central bank is correct in its policy of lowering the benchmark Selic interest rate, said Carlos Thadeu de Freitas Gomes Filho, senior economist at Franklin Templeton Investimentos Brasil. “After consecutive interest-rate cuts, inflation is falling, economic activity is falling,” Gomes Filho said in a telephone interview from São Paulo. “This shows the central bank has the correct strategy.”
http://jlne.ws/wydjBv

Chile Traders See Rates on Hold in March on Increased Inflation Forecasts
Bloomberg
Chilean traders and investors forecast the central bank will keep its key interest rate on hold in March for the second straight month as inflation estimates increase, according to a central bank survey. Policy makers last week kept the rate unchanged at 5 percent after unexpectedly reducing borrowing costs in January. Traders raised their 12-month annual inflation forecast in the survey to 3.2 percent from 3.09 percent on Feb. 7, according to the poll published on the central bank website today.
http://jlne.ws/AyMp8m

Physicals & Company News

Alcoa and CPI Finalize Agreement to Establish Joint Venture Company to Produce High-End Fabricated Aluminum Products
Yahoo! Finance
Alcoa (NYSE:AA) and China Power Investment Corporation (CPI) announced today they have finalized an agreement to establish a joint venture company to produce high-end fabricated aluminum products for the China market. Alcoa Chairman and CEO Klaus Kleinfeld and CPI President Lu Qizhou signed the agreement today in Beijing at the Great Hall of the People. Also attending the signing ceremony was U.S. ambassador to China Gary Locke. The new joint venture company, Alcoa CPI (China) Aluminum Investment Co. Ltd., will be majority owned and managed by Alcoa and based in Shanghai.
http://jlne.ws/zoj5hY

Pan African sticks to its SA knitting
MiningMX
PAN African Resources (Pan African) nearly doubled its attributable profit to 14.4m (previous interim profit - 7.6m) (pounds) in the six months to end-December and trebled its cash-on-hand since then to 16m (pounds) as of February 17. Reporting these results to investors in Johannesburg on Wednesday, CEO Jan Nelson said Pan African would remain focused on its operations in South Africa for the medium-term as it bedded down a number of new projects and acquisitions.
http://jlne.ws/Auyk51

Miscellaneous News

Mining Museum tips hat to amazing women
OurColoradoNews.com
While most prospectors, mine owners and miners were men, women also had a part in Colorado’s mining history. Celebrating that female contribution, the Western Museum of Mining & Industry is planning a Family Exploration Day called “The Amazing History of Women in Mining!” from 10 a.m.-3 p.m. on March 10. This will be a full day of re-enactments, storytelling and interactive activities for the entire family.
http://jlne.ws/y1K2lB

**Your resident feminist resisted putting this little gem at the top of the newsletter. Also, re-enactments (?!) Where do I sign up.

50,000 applications for mining stuck with States
The Hindu Business Line
India's mining sector is at a virtual standstill, with applications for mining and prospecting leases piling up with States. A staggering 50,000 applications for reconnaissance permits, prospecting licences and mining leases are currently pending with the States, according to data compiled by the Mines Ministry.
http://jlne.ws/wkf6ca

February 21, 2012 - LME Committee To Dissect Bids Ahead Of Board Meeting; U.S. Futures, Metals Gain as European Leaders Reach Greek Deal

2012-02-21T14:06:00.002-06:00

The top stories from Friday were "Chris Whalen: JPM and the BAnks Have the MF Global Money And the Status Quo Is Protecting Them" on Jesse's Café Américain (this story is really popular) and "Editorial: LME bidders face catch-22 over trading model" for Futures & Options World (a cool story about bidders having to stick to the LME's existing trading model as a part of a deal). Second place was tied by several stories, two of them being "Dr. Copper Begs To Differ" by Brendan Conway for Barron's and "Why Isn't There an ETF for Diamonds?" by Tom Lydon for ETF Trends.

Quote of the Day:

"You can't really go out and say that we've solved the whole euro-zone debt crisis and this won't come back to bother us again. These issues will still simmer over time."

-Manpreet Gill, senior investment strategist at Standard Chartered Plc on Greece's winning a second rescue package, in "U.S. Futures, Metals Gain as European Leaders Reach Greek Deal" by Lynn Thomasson and John Dawson for Bloomberg News

Observations - Statistics - Commentary

NFA considering proposal to restore money lost by MF Global
By Lynne Marek - Crain's
(Crain's) — Two new reform-minded National Futures Association board members are pressing the group to help restore money lost by MF Global Inc.'s futures-trading customers and require futures commission merchants to disclose daily where customer funds are held.
http://jlne.ws/yJk1bl

**Top MF Global story from the John Lothian Newsletter.

Balancing Business and Human Rights
New York Times
Angela Merkel rolled out the red carpet for the president of Kazakhstan, and German companies are eager to do business with China. Will talk of human rights be swept under the rug?
http://jlne.ws/wLyn9R

**Rare earth component to this story. Important for everyone to read about human rights being included in international business discussions.

The Love Affair With Gold
Forbes
Sometimes you can’t help but laugh at the markets. Remember the dark days of December when gold made its way down to below $1,550 per troy ounce? If you were following the market along with the analysts’ commentary, you remember the almost apocalyptic tone of the commentators. Sell your gold now, they said, because it’s in free fall. Others were saying that there was no floor to the price in sight and we could see another $500 come off in a relatively short amount of time.
http://jlne.ws/wzyrus

Are the LME bids self-inflicted?
AMM.com
So is the wave of really serious approaches now simply a result of the intensification of the merger mania in futures markets, or does it have specific triggers? For most of the 50-odd years I have been fascinated by the exchange, it woul dhave been fair to characterize it as conservative - even, at times, utra-conservative. But that is certainly not a charge that can be made against it in the era of current chief executive Martin Abbott.
http://jlne.ws/AA0Tvk

A Visit to the Only American Mine for Rare Earth Metals
The Atlantic
That big hole in the ground? It's a pit mine at the Molycorp Mountain Pass rare earth facility in California's Mojave Desert. Metals mined from pits like that were used to make the cell phone in your pocket and the computer screen you're staring at right now. I visited Molycorp two weeks ago, as part of our investigation into the sources and consequences of consumer electronics manufacturing.
http://jlne.ws/zCWS50

**One of my favorite publications. Rare earths + The Atlantic = a very happy metals editor.

Man shot dead in South Africa mining clash
Bloomberg via Vancouver Sun
man was shot dead in violent protests at the world’s biggest platinum mine owned by Impala Platinum Holdings Ltd. in South Africa on Sunday, a police spokesman said. Seven people were injured in clashes at the No. 6 Shaft of the company’s operations near Rustenburg, in the North West Province, Brigadier Thulani Ngubane said by mobile phone Monday. About 5,000 people have gathered for demonstrations on the road between the mine and the Freedom Park township, he said.
http://jlne.ws/zceMm3

**Impala fired 17,200 workers -- a whopping 12 percent of the global platinum mining workforce.

S Africa Cosatu Union To Demand 18% Pay Rise For Rustenburg Workers
Fox Business
South Africa's umbrella labor union said Tuesday it will intervene in a month-long strike at Impala Platinum Ltd.'s (IMP.JO) biggest mine to demand an 18% pay rise for all employees. COSATU, the country's biggest union, which includes the National Union of Mineworkers, told workers at Impala's Rustenburg mine that the company's management was wrong to raise wages for only one group of workers but not the whole mine.
http://jlne.ws/z6zYd1

JLN Metals Scorecard	2/17/2012

NYSE LIFFE US Total Volume	79,678

100 oz. Gold Futures Volumes
NYSE LIFFE US	86
CME/NYMEX (Globex + PNT)	122,814
CME/NYMEX Open Auction	1,850
NYSE LIFFE market share	0.07%
NYSE LIFFE US Electronic market share	0.07%

100 oz. Gold Futures Open Interest
CME/NYMEX	440,779
NYSE LIFFE US	1610
NYSE LIFFE US market share	0.36%

Mini Gold Volume
NYSE LIFFE US	4,632
CME E-micro Gold (10 Troy oz)	1,483
CME/NYMEX miNY	276
NYSE Liffe market share (Contracts)	72.48%
NYSE Liffe market share (Notional)	84.30%

5,000 oz. Silver Futures Volume
NYSE LIFFE US	20
CME/NYMEX	49,273
NYSE LIFFE US market share	0.04%

Mini Silver Volume
NYSE LIFFE US	2,356
CME/NYMEX miNY	66
CME/NYMEX E-mini	0
NYSE LIFFE US market share	97.27%

Additional Metal Futures Volume statistics
EUREX Gold Futures (100 troy ounces)	6
TOCOM Gold Futures* (1 kg / 32.15 ounces)	34,624
TOCOM Mini Gold Futures* (100 grams / 3.215 ounces)	12,415
TOCOM Silver Futures* (10 kg / 321.51 ounces)	317
MCX India* (1 kg / 32.15 ounces)	6,193
Dubai Gold & Commodities Exchange (32 troy ounces / 1 kg) (Mon 2/20)	913
*Today's date

Lead Stories

LME Committee To Dissect Bids Ahead Of Board Meeting - Source
By Andrea Hotter and Jacob Bunge Of DOW JONES NEWSWIRES
Leaders of the London Metal Exchange will weigh preliminary bids next week for the commodity market ahead of a Feb. 23 board meeting, a person familiar with the matter said Friday.
http://jlne.ws/wZB8at

London Metal Exchange gets "good number" of first-round bids
Reuters via Yahoo! News
The London Metal Exchange (LME) has received a good number of first-round bids for the 130-year-old bourse, the world's largest metals market place, an LME spokesman said on Friday. Separate sources familiar with the situation said the list includes NYSE/Euronext.
http://jlne.ws/z2N5bC

Swiss Global Companies Compete With U.S. for Lead in Deals
Businessweek
Switzerland is flexing its muscle. The Alpine nation, with about 2 percent of the U.S.’s population, is running neck-and-neck with the world’s biggest economy in global dealmaking this year with a combined $48 billion of takeovers, including the largest: Glencore International Plc’s $38 billion planned purchase of Xstrata Plc.
http://jlne.ws/yTsj0z

**Takeovers & consolidation. Really interesting Swiss company news.

Dow tops 13,000 for 1st time since 2008
MSN Money
Stocks were rallying modestly today, but the Dow Jones industrials topped 13,000 for the first time in nearly four years. The rally was set off by the announcement of a new Greek bailout and by decent earnings from Home Depot. Results from Wal-Mart Stores disappointed investors, and the stock's decline to $60.10 was the biggest reason why the blue chips have not stayed above 13,000. Meanwhile, energy and metals stocks were stronger as commodities moved higher. Crude oil was trading at $194,84, up $1.24 a barrel from Friday. Gold was trading at $1,755 an ounce, up $29.10. Markets had been closed Monday for President's Day.
http://jlne.ws/zoPe1U

U.S. Futures, Metals Gain as European Leaders Reach Greek Deal
Bloomberg via San Francisco Chronicle
U.S. equity futures and metals rose, while Treasuries declined after Greece won a second rescue package. European stocks retreated, led by energy producers. Standard & Poor's 500 Index futures added 0.3 percent as of 8:07 a.m. in London. The Stoxx Europe 600 Index lost 0.3 percent. Ten-year Treasury yields climbed three basis points to 2.03 percent. The euro was little changed at $1.3241, after strengthening as much 0.4 percent. Copper gained 1 percent and oil traded near a nine-month high.
http://jlne.ws/xGDg9j

Gold at highest since December on Greece deal
MarketWatch
Gold for April delivery advanced $26, or 1.5%, to $1,751.90 an ounce on the Comex division of the New York Mercantile Exchange. It had earlier traded as high as $1,752.50 an ounce. A close around these levels would be gold’s highest since early December. U.S. markets were closed Monday for the Presidents Day holiday, and Tuesday was the first floor trading day to react to the Greek news.
http://jlne.ws/wVuQWR

Copper rises with euro on Greece relief
Reuters
London copper futures rose more than 1 percent on Tuesday after Greece struck a deal for a second bailout package to avoid a default next month, fuelling appetite for riskier assets. Copper has gained a steep 10 percent so far this year, hitting a five-month top this month as Greece moved closer to securing rescue funds, calming worries about the euro zone debt crisis. But analysts say it may be hard to sustain a run-up in coppper unless demand from top consumer China picks up.
http://jlne.ws/y2ucxB

India Silver Imports May Top 5,000 Tons in 2012
WSJ.com
India's silver imports may top 5,000 metric tons in 2012 due to strong investment demand, Prithviraj Kothari, the president of the Bombay Bullion Association, said Tuesday. The country imported around 4,800 tons of silver last year, he said. "Silver demand is expected to rise on firm industrial and investment demand," he told reporters on the sidelines of a conference.
http://jlne.ws/xM8zeA

Bank of China moves closer to LME membership
International Business Times
Bank of China International (BOCI) is on track to become the first Chinese member of the London Metals Exchange - giving the bourse a boost while it is considering possible takeover bids - following authorization by the UK financial regulator. The addition of a Chinese member to the world's biggest metals market is expected to increase trading volumes, which would increase the LME's attraction as a takeover target. China is by far the world's largest consumer of metals and other industrial raw materials.
http://jlne.ws/z04vlH

**From Monday morning, but worth a read.

Futures & ETF News

What Silver ETFs are Saying About Precious Metals
ETF Trends
Gold and silver exchange traded funds are rallying in the wake of the second bailout for Greece. Fears of additional currency debasement and more financial aid from central banks to stem Europe’s debt crisis could keep a bid under precious metal ETFs this year. Gold ETFs rose nearly 2% on Tuesday while silver funds added about 3%.
http://jlne.ws/AouUez

Our new gold ETF lets investors buy gold at spot prices: Nitin Rakesh, Motilal Oswal AMC
The Economic Times
Keep in mind a couple of things. One, the gold ETFs that we are launching are actually first of their kind for a simple reason that we are creating a product that lets investors redeem their ETF units or physical gold at 22 cities in the country. So this is really a first of its kind gold ETF where the investors have the option of actually redeeming the units in lieu of physical gold. So it is really a consumption-cum-investment product. For us the idea is not to create a product that investors can only invest in.
http://jlne.ws/yS24qS

Corporate houses, SMEs flock to gold ETFs for better returns
The Economic Times
India's purchase of paper gold doubled last year as corporates and SMEs, seeking a safe haven for their investments, invested heavily in gold exchange-traded funds (ETFs), a traditional favourite of wealthy individuals and households. Companies now account for nearly 50% of all ETF purchases in the country and SMEs, too have climbed on to the bullion bandwagon.
http://jlne.ws/yn4oQU

Mangal Keshav's view on Gold, Silver, Copper, Crude
Moneycontrol.com
Gold prices traded positively on Monday, as the euro rallied on optimism that European leaders will sign off on a rescue deal for Greece and as China's central bank further loosened its monetary policy. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,281.28 tons, as on Feb 16. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 9,591.72 tons, as on Feb 15.
http://jlne.ws/yvqIdZ

Commodities

U.S. wheat, corn, soy inch up; await USDA data
Reuters
U.S. grains edged higher on Tuesday, the first day of trading after a long weekend, and traders expected prices to rise further as unfavorable weather limits supplies from the Black Sea region and South America. The market is also awaiting the U.S. Department of Agriculture's updated crop forecast, which will be announced at a Feb. 23-24 conference. The data is likely to confirm that farmers will plant 94 million acres with corn, the largest area since 1944, which could double stocks next year.
http://jlne.ws/xQS1rx

Crude Futures Rise Following 2nd Greek Bailout
WSJ.com
Crude-oil futures rose sharply Tuesday on optimism that the recently passed bailout of Greece will ease the continent's economic woes and boost oil demand. Euro-zone finance ministers agreed to a EUR130 billion rescue package for Greece after the country adopted a latest round of deep austerity measures. The agreement boosted market sentiment across the board and ended months of uncertainty over whether the country that has been at the center of the euro-zone's sovereign debt crisis would get a second bailout.
http://jlne.ws/xY5fOw

Q+A: How closed are China's commodity futures markets?
Reuters via Yahoo! Finance
Chinese authorities keep a tight grip on the country's commodity exchanges as part of efforts to deter speculators from driving up food and resource prices. The three commodity futures exchanges, in Shanghai, Dalian and Zhengzhou have only a small window to foreign participation. Financial institutions are barred from participating, and brokers cannot take positions. There is so far no over-the-counter derivatives market based on Shanghai Futures Exchange contracts, as exists for the London Metal Exchange and CME, although one is expected to develop over the next five years.
http://jlne.ws/wzVCUR

Investments

Four Ways To Invest In Gold (Slideshow)
Forbes
Investing part of your portfolio in the yellow metal is one thing, deciding how is quite another. These are four popular options.
http://jlne.ws/AAH8tc

Silver Stocks Surging in February -- Silver Wheaton and Silvercorp Metals Leading the Run
Yahoo! Finance
Silver stocks have been on a tremendous run in 2012 with precious metals demand showing no signs of slowing. The Global X Silver Miners ETF (SIL) is up more than 15 percent this year -- keeping pace with the iShares Silver Trust (SLV) which is up nearly 20 percent in 2012. Five Star Equities examines the outlook for companies in the Silver Industry and provides equity research on Silver Wheaton Corporation (NYSE: SLW) (TSX: SLW) and Silvercorp Metals Inc. (NYSE: SVM) (TSX: SVM).
http://jlne.ws/yJ6nva

Gold and Silver Stocks' Wild Ride Ahead
Gold Seek
Greg McCoach, publisher of The Mining Speculator, feels gold is ultimately headed above $6,000/oz and silver into the hundreds of dollars and those who aren't paying attention now are missing their best opportunity to buy before the frenzy begins in earnest. In this exclusive interview with The Gold Report, he spells out the reasons for his optimistic projections for the junior mining sector, which he believes is headed for much higher ground.
http://jlne.ws/xPuu0t

Production News

Philex CEO: Proposed Mining Order May Delay $1 Billion Silangan Copper-Gold Project
Fox Business
Philex Mining Corp. (PX.PH) Monday warned that the company's $1 billion Silangan copper-gold project could be interminably delayed if the government issues a moratorium on mining operations. "A total ban on mining will be rather draconian for the country as a whole," Chairman and Chief Executive Manuel Pangilinan told reporters in a briefing, where he discussed details of a draft executive order on the mining industry he had seen. He said the draft order indicates a possible moratorium on mining operations.
http://jlne.ws/wis6F3

Chile Collahuasi Copper Mine Halts Ops On Fatal Accident
Dow Jones Commodities News via TradingCharts.com
Operations at Chilean copper mine Dona Ines de Collahuasi were halted Tuesday following a fatal accident at the mine's concentrator plant, a company spokeswoman said. Extraction operations at the mine were previously halted over the weekend due to heavy snowstorms, but had resumed on Monday. Operations won't restart until an investigation into the accident is completed, said Collahuasi spokeswoman Bernardita Fernandez, adding it wasn't yet clear when the investigation would be concluded.
http://jlne.ws/wOa7nJ

Agnico-Eagle Granted Permission On Road Construction For Meliadine
Kitco News
Agnico-Eagle Mines Ltd. (NYSE:AEM) (TSX:AEM) reports that they have been granted permission by the Nunavut Impact Review Board (NIRB) to proceed to the next step of permitting for the construction of a 24 kilometer all-weather access road from Rankin Inlet, Nunavut, Canada to the Meliadine gold project. "The NIRB decision is a major milestone in the development of the Meliadine project as this will allow us to move to year-round operations,” Sean Boyd, President and Chief Executive Officer of Agnico-Eagle says. “We hope to begin construction later in March."
http://jlne.ws/yWx4oz

Metals Creek Resources Corp. Commences Drilling on the Ogden Gold Project-Timmins, Ontario
MarketWatch
Metals Creek Resources Corp. (the "Corporation") is pleased to announce the commencement of a 8 hole, 2000 meter diamond drill program on the Ogden Property in the Timmins Gold Camp, Ontario. The Ogden claims cover eight kilometers of strike length of the Porcupine-Destor Break between Goldcorp's Dome Mine and Lake Shore Gold's West Timmins development project.
http://jlne.ws/Av2iTL

Regulatory News

CFTC: Funds Trim Speculative Length In Gold But Add To Long Positioning In Other Metals
Forbes
Large speculative accounts trimmed their net long position in gold futures but extended their net length to multi-month highs in all of the other metals during the latest reporting week. In both the “legacy” and “disaggregated” reports released by the Commodity Futures Trading Commission late Friday, large speculators on balance exited from some of their long gold positions, in which they previously bought.
http://jlne.ws/wRZIeS

UK Government: Competition Issues On Anglo American-Lafarge UK JV
Fox Business
The U.K.'s Competition Commission Tuesday said it has provisionally decided that a joint venture between U.K.-listed Anglo American PLC (AAL.LN) and France's Lafarge S.A. (LG.FR) could damage competition in certain markets for construction materials. Anglo American, through its U.K. unit Tarmac Ltd., and Lafarge are both global firms that are active in the supply of construction materials in the U.K. The parties propose to establish a joint venture equally owned by each in which the two would contribute the bulk of their construction materials businesses in the U.K.
http://jlne.ws/zNEuTS

Reports, Macroeconomics & Inflation

Inflation Outpacing Compensation for U.S. Workers: Gas prices put the squeeze on Americans' wallets in January
Chicago Tribune
Friday's figures show wages were just keeping pace with prices in January. Hourly and weekly earnings, as well as the consumer price index, the government's measure of inflation, all increased by 0.2 percent last month. Data suggests that over the last year, the trend has been worse. The CPI grew by 2.9 percent on an annual basis through January 2012, barely changed from its 3 percent annual growth as of December.
http://jlne.ws/wEcfeQ

Denmark to Hold First Inflation-Linked Debt Sale Next Quarter
Businessweek
Denmark will sell its first inflation-linked government bonds next quarter as the country’s debt office seeks to broaden its funding base by offering securities it says investors are asking for.
http://jlne.ws/xY0393

Physicals & Company News

Vedanta eyes simpler structure
Reuters
India-focused miner Vedanta, responding to speculation it could merge two separately listed Indian subsidiaries, said on Tuesday it aimed to simplify and consolidate its structure as part of its strategy, but gave no specific detail. Vedanta -- a FTSE 100-listed miner which produces commodities including aluminium, copper, zinc, lead, iron ore, oil and gas -- trades at a discount to the sector, because of its gearing and because of a structure which means it finds it harder to repatriate cash from subsidiaries to service group debt.
http://jlne.ws/xoi9sZ

Quadra Shareholders Approve Polish KGHM Cash Offer
Morningstar
The required two-thirds majority of shareholders of Canada'sQuadra FNX Ltd. (QUX.T) agreed to a proposal under which the mining company will be acquired by Polish state-controlled copper and silver mining company KGHM Polska Miedz SA (KGH.WA) at a shareholder meeting Monday, KGHM said in a statement. In December, KGHM made a C$2.87 billion friendly cash offer for Quadra, taking advantage of a slump in copper valuations to secure mining projects in Canada, the U.S. and Chile.
http://jlne.ws/x3ePXo

Hecla Mining Reports Profit in Fourth Quarter, Record Revenues In 2011
Kitco News
Hecla Mining Co. (HL) Tuesday reported a profit in the fourth quarter, compared to a loss in the same period year ago, and announced record revenue and gross profit for full-year 2011. For the fourth quarter, the company said net income applicable to common shareholders was $18.431 million, or 7 cents a shares. This was a reversal from a loss of $13.144 million, or 5 cents a share, in the same quarter a year ago.
http://jlne.ws/ymxOPa

Patagonia Gold Plc Announces Grant Of Options
Yahoo! Finance
Patagonia Gold Plc (TSX:PAT, AIM:PGD) today announced that on January 31, 2012 the Company's Remuneration Committee agreed to grant options for over 4,000,000 ordinary shares of 1 pence each ("Ordinary Share") to certain Directors under the Company's share option arrangements.
http://jlne.ws/wJgBb8

Key Gold Holding Inc. Announces Proposed Business Combination With Pangolin Diamonds Corp.
Yahoo! Finance
Key Gold Holding Inc. (TSX VENTURE:KGH.V) (the "Company" or "Key Gold") is pleased to announce that it has entered into a letter of intent (the "LOI") with Pangolin Diamonds Corp. ("Pangolin"), an Ontario private company, which outlines the general terms and conditions pursuant to which Key Gold and Pangolin would complete a transaction resulting in a reverse take-over of Key Gold by the shareholders of Pangolin (the "Proposed Transaction"). The LOI was negotiated at arm's length and is effective as of February 20, 2012.
http://jlne.ws/x3wen3

NovaGold Updates Plan to Spin-Out Ambler Project Into NovaCopper; Shareholder Vote to Take Place March 28, 2012
Yahoo! Finance
NovaGold Resources Inc. (TSX: NG.TO)(AMEX: NG.TO) ("NovaGold" or "the Company") is pleased to provide an update on the previously announced spin-out transaction (the "Spin-Out") of NovaCopper Inc. ("NovaCopper"), a wholly-owned subsidiary of the Company. NovaCopper holds, through its wholly-owned subsidiary, NovaCopper US Inc., the Company's interest in the Ambler project located in Northwestern Alaska.
http://jlne.ws/zihZ9n

Miscellaneous News

Muthoot Finance May Sell Up to 10% Stake in Next 12 Months
WSJ.com
The founders of Muthoot Finance Ltd., India’s largest gold financing company by assets, may look at selling up to 10% of the company over the next 12 months if market conditions are stable. “We don’t mind bringing our promoter shareholding from 80% to 75%, or 70% also,” Managing Director George Alexander Muthoot said.
http://jlne.ws/ygPXMs

Elaine Harris: Copper thieves are endangering the public
Charleston Daily Mail
At least four West Virginians were electrocuted and killed in 2010 while trying to steal metal. A bill currently moving through our Legislature requires scrap metal dealers to implement better tracking of the sellers and sources of the metals they buy. The aim isn't to punish the recycling industry with more regulation, but to protect our businesses and communities, particularly the elderly and shut-ins, who depend on access to the phone and 911 services to be safe.
http://jlne.ws/xOUe8l

February 17, 2012 - NYSE Euronext and CME kick off race for LME; Glencore reveals more IPO rewards; Falling Risk Appetite Dents Copper Futures

2012-02-17T13:58:00.002-06:00

Yesterday's top story was again "Chris Whalen: JPM and the Banks Have the MF Global Money And the Status Quo Is Protecting Them" by Jesse's Café Américain. Second place was a tie by "Glencore Says Aluminum Director Fegel Owns $1 Billion Stake" by Jesse Riseborough for Bloomberg Businessweek (see below for more Glencore super-wealthy-exec news) and "Is Iran Dampening The Price Of Gold?" by Felix Pinhasov for Seeking Alpha.

Quote of the Day:

"CPI was mild, up slightly — [it] will certainly gain more in the next two months from energy inflation, so gold did not get the push from CPI inflation this month. But there is a high probability of contribution from the U.S. CPI [in the] next two months. We still see gold gaining on higher U.S. inflation in late spring early summer."

-Richard Hastings with Global Hunter Securities, in "Gold lower, poised to end week nearly flat" by Claudia Assis and Myra P. Saefong for MarketWatch

Observations - Statistics - Commentary

Editorial: LME bidders face catch-22 over trading model
FOW
FOWintelligence reported today that sources close to the London Metal Exchange have said that the race to buy the exchange will be run not only on price but also on showing “empathy” to the existing structure of trading. This injects and interesting dynamic into the bid.
http://jlne.ws/xG0mNk

*"Make new friends, but keep the old. One is silver, the other is gold." Sorry, there are Girl Scout cookies in the office today. Song from my 1992 Brownie days.

Reality check: who is still buying gold?
NASDAQ
Bullion-hungry Asian consumers are often touted as the fundamental support for gold prices. But India's demand for gold has weakened as the combination of high inflation and a weakening rupee sap the country's collective buying power. China seems to be stepping in to fill the gap.
http://jlne.ws/w67s8Z

Fool's Gold? Pakistan mine rift exposes investor risk
Yahoo! News
Set in one of the bleakest places on earth, a Baluchistan desert at the foot of an extinct volcano, Reko Diq was expected to yield revenues of at least $60 billion over the 56-year life of the mine. Tethyan Copper Company (TCC), a joint venture between Chile's Antofagasta and Canadian-based Barrick Gold, had sunk $220 million over the past five years into exploring the deposit in the ochre sand desert, where temperatures reach 130 degrees Fahrenheit in the summer. It was planning to invest a total of $3.3 billion when the provincial government abruptly refused to grant a mining license last year.
http://jlne.ws/xMHGPt

**This is an incredible story! Sneaky business going on here. Lots of "expected to" and "supposed to be" language.

Dr. Copper Begs To Differ
Barrons.com
The red-orange metal often gets called “Dr. Copper” because of its reputation as a predictor of future moves in the global economy. Despite the apparent rosy feeling about stocks and especially the riskiest corners of the stock market, copper’s been in a modest downtrend since closing Feb. 9 at $3.98.
http://jlne.ws/AxXcnG

China's Gold Imports: Grain Of Salt, Please
Forbes
China began deregulating its domestic gold market a decade ago. Gold has proved to be a handy way of diversifying the nation’s fast-swelling savings since. But like so much else in the world’s most populous and fastest-growing economy, off-the-charts growth in private gold demand now presents a problem for policymakers: China’s gold imports have overtaken its domestic mine output (the world’s largest, of course). So gold also risks denting the trade surplus, the central plank of Beijing’s economic model. Reconciling the two calls for a bureaucrat’s fudge.
http://jlne.ws/woEwGu

JLN Metals Scorecard	2/16/2012

NYSE LIFFE US Total Volume	141,019

100 oz. Gold Futures Volumes
NYSE LIFFE US	45
CME/NYMEX (Globex + PNT)	168,160
CME/NYMEX Open Auction	6,642
NYSE LIFFE market share	0.03%
NYSE LIFFE US Electronic market share	0.03%

100 oz. Gold Futures Open Interest
CME/NYMEX	440,676
NYSE LIFFE US	1610
NYSE LIFFE US market share	0.36%

Mini Gold Volume
NYSE LIFFE US	5,969
CME E-micro Gold (10 Troy oz)	1,604
CME/NYMEX miNY	467
NYSE Liffe market share (Contracts)	74.24%
NYSE Liffe market share (Notional)	83.42%

5,000 oz. Silver Futures Volume
NYSE LIFFE US	13
CME/NYMEX	58,972
NYSE LIFFE US market share	0.02%

Mini Silver Volume
NYSE LIFFE US	3,522
CME/NYMEX miNY	125
CME/NYMEX E-mini	0
NYSE LIFFE US market share	96.57%

Additional Metal Futures Volume statistics
EUREX Gold Futures (100 troy ounces)	5
TOCOM Gold Futures* (1 kg / 32.15 ounces)	48,129
TOCOM Mini Gold Futures* (100 grams / 3.215 ounces)	20,003
TOCOM Silver Futures* (10 kg / 321.51 ounces)	597
MCX India* (1 kg / 32.15 ounces)	N/A
Dubai Gold & Commodities Exchange (32 troy ounces / 1 kg)	1,354
*Today's date

METAL ETFS	METAL ETFS
ProShares Ultra Silver	351,617
Powershares DB Base Metals Fund	28,863
Market Vectors Gold Miners GG	3,784,911
MARKET VECTORS JUNIOR	523,384
ProShares UltraShort Gold	83,367
ETFS Precious Metals Baskets Trust	3,412
iShares COMEX Gold Trust	754,952
iShares Silver Trust (ETF) historical prices	2,076,085
ETFS PHSYICAL PALLADIUM SHARES	20,820
ETFS PHYSICAL PLATINUM SHARES	13,876
ETFS GOLD TRUST	14,925
ETFS SILVER TRUST	25,147
Market Vectors Steel	16,339
ProShares Ultra Gold	29,318
ProShares UltraShort Silver	693,448
SPDR Gold Trust	1,952,189

Lead Stories

NYSE Euronext and CME kick off race for LME
FT.com
NYSE Euronext and CME Group, the two US exchange groups, have submitted bids for the London Metal Exchange, valuing it at up to £1bn and kicking off a contest for the commodities business, according to people familiar with the matter. The 135-year-old exchange, which hosts futures contracts used as global industry benchmarks for base metals from copper to nickel, is one of the last member-owned exchanges in the world. It is home to Europe’s last trading pit – known at the LME as the ring – where traders shout orders to each other.
http://jlne.ws/xlJLD7

CME Said to Bid for London Metal Exchange as NYSE Explores Possible Offer
Bloomberg
CME Group Inc. (CME) has made a bid for the London Metal Exchange as the world’s largest metals futures market plans a meeting next week to consider offers, according to a person with knowledge of the situation. The price CME Group offered wasn’t disclosed, said the person, who declined to be identified because negotiations are private. A purchase of the LME by Chicago-based CME Group would add to its metals that trade through the Comex, where futures based on gold, silver and copper are traded.
http://jlne.ws/yWRwQN

**Feb. 23 meeting to include bid discussions by LME board.

Glencore reveals more IPO rewards
Financial Times
The extent of the wealth created by Glencore’s initial public offering has been highlighted afresh, with the company identifying a further seven executives each holding stakes of more than $500m. The world’s largest commodities trading house had disclosed the wealth of Ivan Glasenberg and his five most senior lieutenants ahead of the IPO last year. On Thursday, it revealed the identity of a further group of executives holding stakes of between 1 per cent and 3 per cent.
http://jlne.ws/yZG9ez

**Interesting details coming out about top Glencore executives' ownership of the company. Co-head of the aluminum business Steven Blumgart will be leaving, but currently holds a 1.25 percent stake or a current value of $575 million. And there are at least six more execs in a similar situation. Value of the group created by a Glencore/Xstrata merger would be around $90 billion.

Anglo American CEO Says Glencore-Xstrata Merger Won't Affect Anglo
Equities.com
The chief executive of globally diversified miner Anglo American PLC (AAL.LN) said Friday that the proposed merger of mining titans Glencore International PLC (GLEN.LN) and Xstrata PLC (XTA.LN) won't affect its business. "I don't think it's going to change anything," said Cynthia Carroll in a conference call with journalists. "We have the scale and we have the breadth of commodities" with a strong focus on growing tier one assets, she added. The company has a $98 billion organic growth pipeline of 85 approved and unapproved projects and expects to expand its production base 35% by 2014, and 50% once the purchase of an increased stake in diamond producer De Beers is taken into account, Carroll told journalists in a call, and then later on TV broadcaster CNBC Europe. http://jlne.ws/xcs4Yz

Global Stocks, Metals, Oil Advance on Greece, U.S. Optimism
San Francisco Chronicle
Global stocks, metals and crude oil advanced on improving U.S. data and optimism Greece will get a bailout. The yen weakened to the lowest level against the dollar in more than three months. The MSCI All-Country World Index gained 0.6 percent as of 8:06 a.m. in London. The Euro Stoxx 600 Index climbed 0.5 percent as Aker Solutions ASA posted higher earnings. Standard & Poor's 500 Index futures were little changed after the gauge rose 1.1 percent yesterday. The MSCI Asia Pacific Index added 1.1 percent. Copper increased 1.2 percent, rising for the first time in six days, and nickel advanced 1.4 percent. Oil gained for a third day.
http://jlne.ws/wSLuou

S&P GSCI Commodity Index Rises to 6-Month High; Metals Gain
Bloomberg
Commodities rose for a third day, climbing to a six-month high, as metals and energy futures advanced on improving U.S. economic data and optimism Greece will get a bailout. Americans last week filed the fewest claims for jobless benefits since 2008, less than the most optimistic estimate of 45 economists surveyed by Bloomberg News. The Standard & Poor’s GSCI Spot Index (SPGSCI) of 24 raw materials rose as much as 0.5 percent to 689.7, the highest intraday level since Aug. 1. The gauge was up 0.2 percent at 687.95 at 9:37 a.m. in London.
http://jlne.ws/yAPAN8

**Copper and gold were up early today and then slipped. See below.

Falling Risk Appetite Dents Copper Futures
WSJ.com
Copper futures slipped Friday as some investors moved to the sidelines ahead of a long weekend in the U.S., despite signs of progress in Greece and a weaker euro. The most actively traded contract, for March delivery, was recently down 2.15 cents, or 0.6%, at $3.7695 a pound on the Comex division of the New York Mercantile Exchange. A Greek government spokesman said at a briefing that euro-zone ministers are expected to approve the EUR130 billion bailout package. German officials said they dropped plans to delay the full bailout, and the European Central Bank plans to swap its Greek debt holdings for new bonds once the debt-restructuring deal is done.
http://jlne.ws/zloLz2

Gold lower, poised to end week nearly flat
MarketWatch
On the week, gold has retreated 0.3%, even with a gain of $10.70 over the past two sessions. Traders were waiting to see “if this European deal is done on Monday or not,” said Matt Zeman, with Kingsview Financial in Chicago. Markets were quiet in general and traders were also taking some risk off the table ahead of the three-day U.S. weekend, he added.
http://jlne.ws/xy9W1b

India's Gold Demand Drops Below China in Fourth Quarter
CNBC
Wild price swings caused by a volatile rupee sapped Indian buying interest in gold in the fourth quarter of 2011, with imports well short of expectations and no pick up expected this year, dropping it behind China for the first time. India's gold imports in the last quarter of 2011, traditionally peak consumption season, fell 44 percent to 157 tonnes, although total imports last year rose 1.1 percent to a record high of 969 tonnes, the World Gold Council said on Thursday.
http://jlne.ws/A3uvOU

TSX falls on gold miners, financials
Yahoo! News
Toronto's main stock index was lower at midday on Friday as earnings-related drops in gold-mining and financial shares offset optimism that Greece will seal a long-awaited bailout deal next week and avoid a messy debt default.
http://jlne.ws/A2AuWH

China's Minmetals wins $1.3 bln Anvil bid, eyes more
Reuters
China's Minmetals Resources sealed a C$1.3 billion ($1.3 billion) bid for Africa-focused copper miner Anvil Mining on Friday, and said it was on the lookout for copper, zinc and nickel acquisitions for up to $7 billion. Hong Kong-listed Minmetals (MMR), a unit of China's biggest metals trader, wanted Anvil for its Kinsevere copper project in the Democratic Republic of Congo (DRC), which is expected to produce 60,000 tonnes of copper cathode a year.
http://jlne.ws/zsadoG

Futures & ETF News

List of Silver ETFs
Yahoo! Finance
Silver exchange traded funds are up 20% this year to outperform gold prices. While often overshadowed by gold’s historic rise, silver and related ETFs provide traders with an alternative, and cheaper, precious metal investment option. Silver, like most commodities, has shown relatively low correlation with the stock and bond markets, making the asset a great portfolio diversifier. The precious metal is also viewed as a safe-haven asset, like gold. However, silver’s safe-haven status is slightly diluted due to its industrial applications and therefore connection with the global economy.
http://jlne.ws/zDVI3N

Why Isn’t There an ETF for Diamonds?
Yahoo! Finance
Exchange traded funds allow the average retail investor to gain direct exposure to price movements in commodities, such as agricultural products, industrial metals and precious metals. However, ETF investors are still unable to invest in precious gems, at least for now. Unlike most commodities, there is no futures market for diamonds.
http://jlne.ws/ys8RWQ

Notable ETF Inflow Detected
Forbes
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Russell 2000 Growth Index Fund (AMEX: IWO) where we have detected an approximate $138.4 million dollar inflow — that’s a 3.5% increase week over week in outstanding units (from 41,450,000 to 42,900,000).
http://jlne.ws/AC88wo

Commodities

Oil futures add to gains in Asia trade
MarketWatch
Benchmark U.S. crude-oil futures extended their recent gains in electronic trading during East Asian hours Friday, helped by a rally on Asia stock markets.
http://jlne.ws/y8APt4

Oil settles at six-week high
ShareCast
Oil settled at a six-week high on Thursday, buoyed by a lower dollar, positive US economic data and a big rally by equities. The March futures contract rose 0.5%, or $0.51, to finish the day at $102.31 per barrel on the New York Mercantile Stock Exchange. Natural gas also got a boost after a bigger-than-expected weekly fall in inventories revealed by a government report. The commodity soared 5.86% to settle at $2.57 per million British thermal units.
http://jlne.ws/xL0bhv

MCX awaits rules on trading in commodity options and indices
The Economic Times
Multi Commodity Exchange of India Ltd (MCX) on Friday said it hopes that the proposed amendments in Forward Contract Regulation Act (FCRA) for allowing trading of options and indices in commodities will be soon passed by Parliament. A Parliamentary Standing Committee, reviewing amendments to the FCRA, has already submitted its report, permitting index derivatives (futures and options) and options in individual commodities. It has also recommended independence and power to the regulator - Forward Markets Commission (FMC).
http://jlne.ws/wpij08

India and China Buying Farmland Means Commodities Set to Rise, According to Financial Web Site Penny Stock Detectives
Houston Chronicle
Danny Esposito, co-editor of financial web site and newsletter Penny Stock Detectives, believes India’s recent purchase of farmland in Africa and China’s recent purchase of 1.4 million acres in Venezuela are just the beginning of a rise in commodities, as both countries secure agricultural commodities for the future.
http://jlne.ws/A1ZerH

Friday's Commodity News To Trade On
Seeking Alpha
Markets were up impressively yesterday after a batch of good economic news. The job market appears to be getting healthier, consumer confidence continues to improve, and manufacturing plants are seeing rising utilization. This is all good news for the economy as a whole and commodities specifically.
http://jlne.ws/A4k9w1

Investments

Gold Bulls Expand as Paulson Says Buy
Bloomberg
Gold traders are getting more bullish after billionaire hedge-fund manager John Paulson told investors it’s time to buy the metal as protection against inflation caused by government spending... Speculators in U.S. gold futures are now their most bullish since September after the Bank of England and Bank of Japan said they will buy more assets and the Federal Reserve said it was considering purchasing more bonds. Central banks are also expanding their bullion reserves, adding 439.7 tons last year, the most in almost five decades. They may buy a similar amount in 2012, the London-based World Gold Council said yesterday.
http://jlne.ws/z5doX5

These Cold Stocks Are Heating Up
The Motley Fool
Whatever you might think about the alleged scurrilous accusations that were hurled at Chinese silver miner Silvercorp Metals, I shake my head at management using it as an excuse to explain why production at its Ying mine fell almost 12%. You mean miners couldn't dig because short sellers said bad things about the company? Fortunately, the "short and distort" attack didn't distract the workers at its GC project since that's moving forward towards development, nor did it affect the efforts at BYP, XBG, XHP, or Silvertip. Those Ying workers really need to focus.
http://jlne.ws/AjWrOG

Production News

China Armco Updates Metals Trading Activities, With Fulfillment Of 160,000 Metric Ton Iron Ore Order
MarketWatch
China Armco Metals, Inc. ("China Armco" or the "Company"), a distributor of imported metal ore and metal recycler with a new state-of-the-art scrap metal recycling facility in China, today provided an update on its trading business. By February 17, 2012, China Armco had completed the shipment of 160,000 metric tons of iron ore. The shipment of iron purchased from Brazil with a purchase contract value of approximately $17 million has already been sold to our customers in PRC upon favorable terms, representing an auspicious start for 2012.
http://jlne.ws/z2RdBg

Hecla Reports Record Silver Reserves & Resources and Advancement on Pre-Development Projects
Business Wire
Hecla Mining Company (“Hecla”) today reported the largest silver reserves and resources in the company’s history with 148 million ounces and 281 million ounces, respectively, as of December 31, 2011. Hecla reported exploration results from its four district-sized land packages in the U.S. and Mexico, as well as an update on its three pre-development projects.
http://jlne.ws/zITHI6

Reports, Macroeconomics & Inflation

CPI Hints At Some Inflation Pressures, Analysts React
WSJ.com
Consumer prices edged up last month amid spiking gasoline costs, hinting that new inflation pressures may be hitting the economy. The consumer-price index, or CPI, rose 0.2% in January from a month earlier and 2.9% from a year ago, according to the Labor Department. The monthly results fell shy of economists’ forecast of a 0.3% gain.
http://jlne.ws/xowrYw

US Dollar Shows Mixed Trading Amid Inflation Data
NASDAQ
The US dollar exhibited mixed performance against major opponents after the releasing of January inflation report during New York morning trading on Friday. The greenback edged down against the euro and the franc, while showed strength versus its British and Japanese counterparts. According to figures released by the Labor Department, U.S. consumer prices rose by less than expected in the month of January.
http://jlne.ws/xoIuH0

Gasoline pushes U.S. inflation up in January
Reuters
U.S. gasoline prices jumped in January, leading overall consumer prices higher and offering a reminder of the risks energy costs pose to the economic recovery. Despite the warning signal, overall consumer prices rose just 0.2 percent, the Labor Department said on Friday, which is unlikely to ring alarm bells at the Federal Reserve.
http://jlne.ws/ypIMTk

Brazil 12-month inflation tamest since 2010
Reuters
Inflation in Brazil weakened more than expected in the month to mid-February to the lowest annual level since December 2010, bolstering the likelihood that the central bank will cut interest rates deeper to single-digit levels. The data was tempered though by the strongest job figures for January since the series began in 2002, suggesting that prices will face increasing pressure in coming months.
http://jlne.ws/A4VXkc

Physicals & Company News

Vale moves to spot ore pricing; sees ship solution
Yahoo! Finance
Vale, the world's largest iron ore producer, said on Thursday it is selling 80 percent of its ore using spot prices, nearly completing a historic shift to market-based pricing for the principal raw material used in steel. The new system was prompted by Chinese steelmakers, Vale's largest client group, who wanted to benefit more quickly from falling iron ore prices. Iron ore averaged $141.80 a tonne in the fourth quarter, 11 percent less than a year earlier and 20 percent less than the previous quarter.
http://jlne.ws/zzU7JT

Higher Output Boosts Anglo American
WSJ.com
Globally-diversified miner Anglo American PLC on Friday confounded analysts' hopes of a special dividend, preferring instead to bump up its final dividend as it cast a positive light on its prospects. Anglo, the world's fourth-largest diversified miner by market capitalization, said that despite some short-term uncertainty, the longer term outlook for its commodities—which include iron ore, coal copper, platinum and diamonds—remains strong, with robust demand underpinned by growth in emerging economies.
http://jlne.ws/AaKAc4

Sims Metal vows to scrap it out after first-half loss
Herald Sun
Sims Metal says there are signs of a tentative recovery in the scrap metal recycling market but has not offered guidance for its full year after reporting a massive first-half loss. Sims handing down a $556.5 million first-half loss after weakness in the key North American market forced a $614 million writedown on acquisitions made before the global financial crisis. This compared with a $49 million net profit for the previous corresponding period to December 31.
http://jlne.ws/wNzX2a

Guyana Frontier Announces Granting of Incentive Stock Options
International Business Times
Guyana Frontier Mining Corp. ("Guyana Frontier") is pleased to announce, subject to regulatory approval, the issuance of an aggregate of 2,475,000 incentive stock options to directors, officers, consultants, and employees of the Company. Each option is exercisable to acquire one common share of the Company at an exercise price of $0.12 per share for a period of 3 years, expiring February 16, 2015.
http://jlne.ws/zuIWkY

February 16, 2012 - Metals prices fall as questions surface about Greek debt crisis; China set to become biggest gold market

2012-02-16T13:59:00.004-06:00

Yesterday's top story was "Is Iran Dampening The Price Of Gold?" by Felix Pinhasov for Seeking Alpha. The MF Global post titled "Chris Whalen: JPM and the Banks Have the MF Global Money And the Status Quo Is Protecting Them" on Jesse's Café Américain came in second place, followed by "Coal Miner Turns Dealmaker at London Metal Exchange" by Agnieszka Troszkiewicz for Bloomberg Businessweek, which was a favorite article of mine. It is my great hope to one day correctly pronounce the journalist's name.

Quote of the Day:

"We really hope that the second half [of 2012] will be much better. China continues to have huge infrastructure needs, mainly on housing - they have to build at least 10 million houses a year in order to cope with the deficit they have."

-Murillo Ferreira, CEO of Brazilian miner Vale S.A., on iron ore trading for 2012, in "Vale upbeat on iron ore prospects" by Joe Leahy for FT.com

Observations - Statistics - Commentary

India's love affair with gold (Video)
60 Minutes - CBS News
"No gold, no wedding," is a saying in India, indicating the importance of gold to Indian culture and tradition. Byron Pitts reports on India's obsession with gold.
http://jlne.ws/yg4oo5

**Jim Kharouf alerted me to this. It aired on Sunday night. Visually stunning footage, and I'm sorry, 10 million weddings take place in India each year?

China set to become biggest gold market
FT.com
China is set to overtake India this year as the world’s largest consumer of gold, the World Gold Council predicted, underscoring the surge in Chinese demand that has revolutionized the bullion market. India has for decades been the world’s largest gold market, but in the final quarter of 2011 demand tumbled by almost half from a year earlier as a collapse in the value of the rupee made gold more expensive for Indian buyers.
http://jlne.ws/xdw4dK

Record investment demand boosts global gold demand to an all time high in 2011
World Gold Council
Global demand for gold in 2011 rose to 4,067.1 tonnes (t) worth an estimated US$205.5 billion - the first time that global demand has exceeded US$200billion and the highest tonnage level since 1997, according to the World Gold Council’s Gold Demand Trends. The main driver for this increase was the investment sector where annual demand was 1,640.7t up 5% on the previous record set in 2010 and with a value of US$82.9 billion. The pre-eminent markets for investment demand in 2011 were India, China and Europe.
http://jlne.ws/wv6LwL

Unstoppable Demand for Rare Earths: Jeb Handwerger
Resource Investor
Not long after the New Year dawned, Gold Stock Trades Editor Jeb Handwerger noted certain rare earths emerging from their 2011 slumber to produce impressive gains. It's not yet March, but the good news keeps coming. Despite dire predictions that demand is drying up, Handwerger tells The Critical Metals Report in this exclusive interview that the world remains at risk of supply shortfalls. It's not strictly a rare earths story, either. Read on to see what he has to say about the nascent niobium space.
http://jlne.ws/zRB5wg

**The Glencore merger has been building up for people following natural resources and rare earths. According to this interview, we should be following these trends, as well as increased demand in Asia. Consolidation among mining companies in general is also something to watch. Take a look at the article below on rare earths.

"How To Buy Rare Earth Metals, As Stocks Or As Physical Rare Earth Metals" Is The Current Topic Of The Absolute Wealth Newsletter
San Francisco Chronicle
Rare earth metals will always be worth the investment, says the recent Absolute Wealth newsletter, because rare earth metals are used for the production of items that are in high demand, along with the production of a lot of military gear. Many investors think it is easier to buy the stocks, however, there are a lot of variables that come into play with the best rare earth stocks, explains the recent Absolute Wealth newsletter. The overhead and expenses of the company, cash flow, environmental issues, plus so much more, reveals the Absolute Wealth newsletter, that affects mining rare earth metals. So when investing in rare earths, advises the recent newsletter, investors can remove all those variables by purchasing the actual physical rare earth metals themselves.
http://jlne.ws/xtfiEv

Alcoa Joins A Billion + Change Campaign Mobilizing Companies to Increase Skills-Based Volunteerism
Business Wire
Alcoa (NYSE:AA) has joined A Billion + Change, a national campaign to mobilize billions of dollars in skills-based and pro bono volunteer services to help build the capacity of nonprofit organizations to meet community needs effectively. Alcoa committed to having 10 percent, or 100,000 of its employee volunteer hours, be skills-based volunteering. In 2011, Alcoa’s global workforce volunteered more than 900,000 hours, averaging more than 16 hours per employee. For 2012, Alcoa has a goal of reaching one million volunteer hours.
http://jlne.ws/x5XgHf

**Sorry I missed this yesterday! Cheers to Alcoa for very cool philanthropic goals.

AngloGold's perils of future promises
MiningMX
Did AngloGold’s Mark Cutifani open a Pandora’s Box on Wednesday by announcing that the company would work to address its low dividend yield profile, historically about 0.7%? You can understand why he would do this: in South Africa, gold companies offer leverage to the gold price and the rand. But if you think about it, that’s always, and only, predicating returns on some future event.
http://jlne.ws/yyojmw

**"It's like promising better weather tomorrow."

JLN Metals Scorecard	2/15/2012

NYSE LIFFE US Total Volume	132,230

100 oz. Gold Futures Volumes
NYSE LIFFE US	104
CME/NYMEX (Globex + PNT)	144,683
CME/NYMEX Open Auction	1,595
NYSE LIFFE market share	0.07%
NYSE LIFFE US Electronic market share	0.07%

100 oz. Gold Futures Open Interest
CME/NYMEX	438,174
NYSE LIFFE US	1623
NYSE LIFFE US market share	0.37%

Mini Gold Volume
NYSE LIFFE US	5,404
CME E-micro Gold (10 Troy oz)	1,715
CME/NYMEX miNY	455
NYSE Liffe market share (Contracts)	71.35%
NYSE Liffe market share (Notional)	81.81%

5,000 oz. Silver Futures Volume
NYSE LIFFE US	84
CME/NYMEX	65,746
NYSE LIFFE US market share	0.13%

Mini Silver Volume
NYSE LIFFE US	2,877
CME/NYMEX miNY	92
CME/NYMEX E-mini	0
NYSE LIFFE US market share	96.90%

Additional Metal Futures Volume statistics
EUREX Gold Futures (100 troy ounces)	0
TOCOM Gold Futures* (1 kg / 32.15 ounces)	37,497
TOCOM Mini Gold Futures* (100 grams / 3.215 ounces)	12,258
TOCOM Silver Futures* (10 kg / 321.51 ounces)	404
MCX India* (1 kg / 32.15 ounces)	N/A
Dubai Gold & Commodities Exchange (32 troy ounces / 1 kg)	954
*Today's date

METAL ETFS	METAL ETFS
ProShares Ultra Silver	378,869
Powershares DB Base Metals Fund	52,332
Market Vectors Gold Miners GG	2,378,302
MARKET VECTORS JUNIOR	548,299
ProShares UltraShort Gold	61,491
ETFS Precious Metals Baskets Trust	941
iShares COMEX Gold Trust	685,357
iShares Silver Trust (ETF) historical prices	2,192,442
ETFS PHSYICAL PALLADIUM SHARES	15,950
ETFS PHYSICAL PLATINUM SHARES	6,272
ETFS GOLD TRUST	42,283
ETFS SILVER TRUST	11,888
Market Vectors Steel	25,504
ProShares Ultra Gold	42,333
ProShares UltraShort Silver	445,438
SPDR Gold Trust	2,726,453

Lead Stories

Metals prices fall as questions surface about Greece’s ability to resolve massive debt crisis
The Washington Post
Metals prices fell Tuesday as questions surfaced about Greece’s ability to uphold new austerity measures and resolve its debt crisis. Greek lawmakers have approved a package of spending cuts to try to win approval of a second bailout package. But European finance ministers canceled a meeting to discuss that funding after Greece failed to comply with several of their demands.
http://jlne.ws/zEvoki

Copper prices fall to three-week low
Financial Post
Copper fell to a three-week low on Thursday, breaking below a key support level, as delays to securing a bailout package for highly indebted Greece undermined sentiment and pushed the euro lower against the dollar.
http://jlne.ws/yKZvEC

Comex Gold Slips With Euro On EU Worry
WSJ.com
Gold futures retreated on Thursday, as fears of a Greek default and further turmoil in Europe's financial system sent investors into the U.S. dollar at the expense of the precious metal...European finance ministers on Wednesday failed to reach an agreement on Greece's latest round of financial support, highlighting the prospect that delays in aid could push the country toward a default. Investors were also rattled Thursday after Moody's Investors Service placed its ratings of 114 financial institutions in 16 European countries on review for possible downgrade, a reminder of the strain in the continent's financial system almost two years after Greece first sought an international bailout.
http://jlne.ws/zQ4ug3

Shanghai Gold Exchange Cutting Margins
International Business Times
The Shanghai Futures Exchange (SHFE), China's biggest metals bourse, will lower trading margins for gold and revise its tiered margin system from March 1 to make it cheaper for investors to trade. The SHFE, which sets different margin requirements based on a tiered volume system, had raised the ceiling that qualifies for the lowest margin requirement of 7 percent to 160,000 lots, up from 80,000 lots, it said in a statement on its website.
http://jlne.ws/yi1dOk

Biggest Mining Deals No Promise of Xstrata Bonanza: Commodities
Bloomberg
Shareholders in Xstrata Plc (XTA) shouldn’t expect that a takeover by Glencore International Plc (GLEN) will deliver a windfall if the history of the deals that created two of its biggest rivals is any guide. Rio Tinto Group’s London shares gained 0.5 percent in dollar terms in the five years after the company was formed in 1995, a time when aluminum producer Alcoa Inc. (AA) more than doubled, data compiled by Bloomberg show. BHP Billiton Ltd. (BHP) climbed 270 percent in dollar terms in Melbourne in the five years after the largest mining company was created in 2001, trailing the quadrupling of Freeport McMoRan Copper & Gold Inc. and the sevenfold surge at Vancouver-based Teck Resources Ltd. (TCK/B)
http://jlne.ws/wKU1D2

Glencore Says Aluminum Director Fegel Owns $1 Billion Stake
Businessweek
Glencore International AG, the commodities trader seeking to buy Xstrata Plc for $37 billion, said the director of its aluminum and alumina unit Gary Fegel owns shares worth about 660 million pounds ($1 billion). Glencore detailed the holdings of all shareholders who own between 1 percent and 3 percent for the first time today in filings to the London Stock Exchange. Fegel joined in January 2001 and was 37 when Glencore published its initial public offering prospectus last May. He owns 154.8 million shares, or 2.24 percent, the company said.
http://jlne.ws/AtTc1J

Norsk Hydro Sees Stable Alumina Market In First Quarter 2012
Fox Business
The global alumina market is expected to stay fairly stable for the first quarter of 2012, Norwegian producer Norsk Hydro ASA (NHY.OS) said Thursday, with prices trading around $305 a metric ton by the end of 2011. The producer said the ramp-up of new primary metal production capacity was a key driver of a rise in fourth quarter global demand for alumina, the key ingredient used to make aluminum, although this excludes consumption in China.
http://jlne.ws/Ahrwka

Vale upbeat on iron ore trade prospects
FT.com
Vale has predicted that prices of iron ore will hold up this year thanks to a recovery in demand from Chinese construction in the second half and lower exports from Indian mines. The world’s largest exporter of iron ore by volume also outlined an ambitious logistics strategy for Asia, saying it expected to resolve a dispute in which Chinese ports are refusing access to Vale’s new fleet of large bulk carrier ships.
http://jlne.ws/ADxbN0

Futures & ETF News

Futures Fall as Moody's Threatens to Downgrade More Than 100 Banks
Forbes
Futures on the Dow Jones Industrial Average (DJIA) are trading broadly lower, after Moody’s Investors Service threatened to downgrade more than 100 global banks, including Morgan Stanley (MS), Goldman Sachs (GS), and J.P. Morgan Chase (JPM), citing exposure to the euro-zone debt crisis. Specifically, futures on the Dow Mini were last seen below fair value by 33 points, with futures on both the S&P 500 Index (SPX) and the Nasdaq Mini trading roughly 5 points below fair value.
http://jlne.ws/At2iDF

Japan Stock Futures Fall as Bailout Delay Revives Debt Concern
Bloomberg
Japanese stock futures and Australian equities fell after a decision on a second bailout for Greece was postponed, reviving concern about Europe’s sovereign-debt crisis.
http://jlne.ws/yjPGbH

ETF Fund Flows: XLI Pulls In $208.9 Million
Yahoo! Finance
Investors put $208.9 million into the Industrial Select Sector SPDR Fund, making it the No. 1 ETF on IndexUniverse’s “Top 10 Creations” list. Stocks edged higher on renewed hopes that Greece would be getting new bailout money. Net inflows totaled $534.6 million. However, total assets under management dipped to $1.177 trillion from $1.179 trillion on Monday, Feb. 13.
http://jlne.ws/xLK8aL

Commodities

Commodities Drop From Six-Month High as Greek Default Concerns Intensify
Bloomberg
Commodities fell from a six-month high, paced by declines in copper and crude, after European leaders delayed a decision on Greece’s bailout, boosting the dollar and eroding demand for raw materials. The Standard & Poor’s GSCI Spot Index lost as much as 0.3 percent to 680.79 after reaching 687.80 yesterday, the highest level since Aug. 2. The gauge was at 680.84 at 1:37 p.m. in Singapore. Three-month copper fell as much as 1.6 percent to $8,233 per metric ton in London, set for the longest losing run since Nov. 10. Crude dropped as much as 0.4 percent in New York. http://jlne.ws/x5AqvG

NYSE Liffe proposes position limits
FT.com
NYSE Liffe, the London-based derivatives market home of benchmark cocoa, coffee and sugar contracts, has proposed limits to the number of contracts that speculators and physical can hold, replicating measures already in place in US commodities markets. The proposals, published on Thursday and expected to be implemented in late 2012, come as the NYSE Liffe exchange has faced criticism because of volatile price movements in cocoa and coffee.
http://jlne.ws/x2F80W

China's Xi, U.S. officials talk food trade in Iowa meeting
Reuters
China's leader-in-waiting, Xi Jinping, and U.S. agricultural officials in a gathering in America's grainbelt on Thursday stressed their shared interests in fostering increased trade in farm goods. Extending his visit to the top U.S. soybean- and corn-growing state of Iowa, Xi and Chinese Minister of Agriculture Han Changfu met with U.S. Agriculture Secretary Tom Vilsack in Des Moines to kick off what was billed as the first-ever U.S.-China Agricultural Symposium.
http://jlne.ws/AjRtJC

**I'm totally moving forward with the hashtag #specialfeeling. This symposium sounds incredible - particularly in regards to the emphasis on research and education.

Tokyo Grain Bourse May Cease as Rice Trade Fails to Boost Volume
Businessweek
Tokyo Grain Exchange Inc., operator of Japan’s second-largest commodity bourse, is under pressure from shareholders to cease operation and transfer trading of farm futures to rivals because of declining volumes. The exchange may transfer trading of Japanese rice and azuki beans to the Kansai Commodities Exchange in Osaka, said Jitsuo Tatara, chairman of broker Yutaka Shoji Co., one of the Tokyo bourse’s 99 shareholders. Corn and soybean futures may be taken over by the Tokyo Commodity Exchange, which shares the same trading system, he said.
http://jlne.ws/zDodMk

Cocoa jumps on speculation about tighter supplies
Yahoo! News
Cocoa futures are jumping on speculation that hot weather in Africa may cause supplies of cocoa beans to shrink. Cocoa for May delivery rose $121, or 5.3 percent, to finish Wednesday at $2,391 per metric ton. The price has risen nearly 14 percent this year as investors anticipate that a spell of hot, dry weather may have hurt crops in West Africa and the Ivory Coast, a major cocoa producing region.
http://jlne.ws/A0jl63

Oil May Pull Back as Iran Tensions Ease, Gold Focus Remains on QE3 Bets
NASDAQ.com
Looking ahead, Iran-linked support for higher crude prices may begin to unwind. Private intelligence outfit Stratfor reported that Tehran conspicuously cancelled military exercises scheduled to take place in the Strait of Hormuz on February 19. The Strait is key sea lane ferrying close to 40 percent of global seaborne crude, so a move to cancel military operations there may be seen as conciliatory gesture hinting at behind-the-scenes efforts to reduce tension.
http://jlne.ws/xB9KsK

Iran buys more wheat, firms talk to Russia
Reuters
Iran bought almost half a million tonnes of wheat this week, traders said on Thursday, with private buyers also in talks to import further tonnage from Russia using roubles as payment, as the Islamic republic works around Western sanctions. Tehran has dramatically widened its footprint on international grain markets, having bought a total 1.1 million tonnes in the past two weeks, deploying non-dollar currencies with dealers also reporting talk of barter deals involving oil and gold.
http://jlne.ws/Aa4faA

Investments

Takeovers the Path to Golden Returns: Sascha Opel
NASDAQ.com
Sascha Opel, publisher of one of Germany's most popular commodity newsletters, looks at the economy with rose-colored glasses. He sees the end of the Euro crisis and sees Asian growth as the engine pulling the world out of its economic malaise. He finds the path to golden returns in gold and silver companies likely to be taken over and in this exclusive interview with The Gold Report , he's not afraid to name likely targets.
http://jlne.ws/xrqLye

The Most Promising Dividends in Metal Mining
The Motley Fool
Dividend payers deserve a berth in any long-term stock portfolio. But seemingly attractive dividend yields are not always as fetching as they may appear. Let's see which companies in the metal-mining industry offer the most promising dividends.
http://jlne.ws/AmeDmZ

Production News

Impala Platinum hit by safety stoppages
MiningMX
IMPALA Platinum (Implats) lost 33,000oz of platinum production due to Section 54 safety stoppages during the six months to end-December, which dropped underground mined production by more than 510,000t of ore. Despite this, Implats CEO David Brown has been muted in his response to the safety crack-down by the Department of Mineral Resources (DMR) which has triggered pointed criticisms from other platinum producers.
http://jlne.ws/wUd3f0

**Yeah, this would probably be the time to say something.

Mechel Reports Resumption of Work at Earlier Suspended Facilities at New-Olzherassk Mine
Yahoo! Finance
Mechel OAO, one of the leading Russian mining and metals companies, reports that work at several facilities at New-Olzherassk mine was resumed fully after a temporary suspension. Administrative suspension of work at several facilities at New-Olzherassk mine was lifted today ahead of schedule by order of the Mezhdurechensk city court as all grounds for the suspension have been eliminated.
http://jlne.ws/vZ3Pk5

Emgold Doubles Size of its Koegel Rawhide Gold-Silver Property, Nevada
Yahoo! Finance
The Koegel Rawhide Property is located approximately 40 miles southeast of Fallon in the Rawhide Mining District and five miles southwest of the Rawhide Mine, which is operated by Rawhide Mining Company. The Rawhide Mine, formerly operated by Kennecott Minerals, is reported by Kennecott to have produced 1.47 million ounces of gold and 11.7 million ounces of silver from the years 1988 to 2005. The Property is situated six miles south of the Pilot Gold Corporation's Regent Property and four miles south of Emgold's Buckskin Rawhide Property.
http://jlne.ws/yYc43O

Reports, Macroeconomics & Inflation

Wholesale Inflation Takes Biggest Jump Since July
Fox Business
Producer prices outside food and energy recorded their largest increase in six months in January, but are unlikely to ignite inflation pressures given the slack in the labor market. The Labor Department said on Thursday its seasonally adjusted core producer price index rose 0.4 percent last month, the largest gain since July, after increasing 0.3 percent in December.
http://jlne.ws/Abcjbo

Treasuries Decline After Jobless Claims Suggest Faster Growth
Businessweek
Treasuries fell for the first time in five days after claims for U.S. jobless benefits unexpectedly dropped last week to a four-year low, fueling speculation about faster economic growth and damping demand for haven assets.
http://jlne.ws/wOc20Z

Czech Inflation Rate Reaches 3-Year High as Economy Shrinks
Businessweek
Czech inflation accelerated to the fastest pace in three years in January, even after the economy entered recession, because of a sales-tax increase. The inflation rate rose to 3.5 percent, the highest since December 2008, from 2.4 percent the previous month, the Statistics Office in Prague said today on its website. That exceeded the 3.2 percent median forecast in a Bloomberg survey of 13 analysts. Prices advanced 1.8 percent from December.
http://jlne.ws/wRPbrs

Physicals & Company News

Russel Metals profit rises on higher sales
Reuters
Steel products maker Russel Metals reported an 87 percent rise in fourth-quarter profit, helped by strong performance across all its segments. The metals processing and distribution company earned C$28.5 million ($28.57 million), or 46 Canadian cents a share, compared with C$15.2 million, or 26 Canadian cents a share, a year ago. Revenue rose 26.6 percent to C$711.6 million.
http://jlne.ws/xoMzz2

GEPL Capital`s view on bullions, base-metals, energy
Moneycontrol.com
GEPL Capital has come out with its report on bullions, base-metals and energy updates.
http://jlne.ws/xAu9G9

Eramet profit hit by metal prices, aeronautic costs
Reuters
French mining and metals group Eramet's profits fell last year on flagging nickel and manganese prices and because of the extra cost of meeting a sudden recovery in demand from the aeronautics industry. The company warned a weaker economic climate could weigh on its markets this year in its results on Thursday. 2011 operating profit fell 25 percent to 554 million euros and net income dropped to 195 million euros from 328 million.
http://jlne.ws/vZDOcK

Barrick Reports Slight Dip In 4Q Net Earnings, Rise In Revenue
Kitco News
Barrick Gold Corp. (NYSE:ABX) (TSX:ABX) Thursday reported a slight decline in fourth quarter net earnings, which were affected by impairment charges, but a sharp increase in revenues.
http://jlne.ws/Aic6dY

Miscellaneous News

Barry Ritholtz Has the Main Theme Right, But Gets a Few Specifics Wrong About MF Global
Jesse's Café Américain
For the record, I am an admirer of Barry Ritholtz, and have been so for quite a long time. He is smart, honest, and what the old folks used to call a mensch. In a recent piece titled MF Global Reveals You Are a Bank Counter-Party he makes a very strong case that financial institutions that trade for their own accounts place everyone who has money with their firm at counter-party risk. He uses this to reinforce his opinion, with which I heartily agree, that when private speculation becomes mingled with public funds and government guarantees, a moral hazard results that quite often leads, some might say almost inevitably, to fraud, the mispricing of risk, and bailouts.
http://jlne.ws/AfRnzP

**I can't stay away from this blog! Love. Also, had to google "mensch" because I am not old. Person of integrity and honor.

Council votes to toughen scrap metal sales rules
Fox19.com
Cincinnati city council voted on Wednesday to add new restrictions on scrap metal sales. New rules for dealers include a new license fee based on how much revenue each seller makes. A license fee of $25 will apply to sales up to $10,000. Sales up to $25,000 will require a $100 license and for sales above $25,000 the license will cost $400. All scrap metal sellers would be required to undergo a background check.
http://jlne.ws/zujTxE