Mineral rights war in S.A.I found this on another BB. Yes, it does pertain to gold and precious metals, but what caught my interest was the talk about the mineral rights war in South Africa. It starts from the middle of the 3rd paragragh including the 4th and 5th paragraph.
Again, nothing but problems in S.A. The future of Canadian diamond mining just looks better every day.
The World Gold Fantasy Council's president Haruk Fukuda has
resigned in haste. The council is searching for a replacement
and Ms. Fukuda will hang around until one is found. We believe
Fukuda resigned because the new council chairman is to be
Chris Thompson, and their ideas are very different on how gold
should be marketed. What we have had is an organization in
chaos, which has been almost totally ineffective - we believe by
design.
Istanbul gold imports rose last week 155% versus the previous
week to 3.45 tonnes, well above this year's average of 2.42
tonnes a week. Turkey functions as an intermediary for Middle
Eastern buyers.
The FBI has arrested four people in connection with a
metals-trading scam that involves over $1 billion in trades and
losses. The victims were JP Morgan Chase, Fleet Boston
Financial, PNC Financial and a number of other banks. The
mineral rights' war has resumed in South Africa that seeks to
restore all minerals' rights to the state and to introduce the
controversial "use it or lose it" land rights policy.
The government wants to take mineral rights away from white
businesses and give them to the blacks. The battle between the
government and the Chamber of Mines is coming to a head and
the government says there is no room for compromise. Minister
of Minerals and Energy, Phumzile Mlomba - Ngcuka says that
white domination of the mining industry was simply not
sustainable in the "new South Africa." She criticized the fact that
one white company, whose chief executive is the head of the
Chamber of Mines owns 63% of the country's platinum reserves.
Another white company owns 95% of diamond production and
two hold 83% of total manganese reserves and others own 51%
of all the country's gold. Black economic empowerment has
taken precedence over foreign investors concerns or the local
industry's reactions. At the end of the day the government must
govern, and we shall do that.
There you have it investors. We have written over and over since
1994 that the ANC would not be happy until they have taken
control of the mineral rights in South Africa. This and the
financial, social, political and criminal problems do not bode well
for the future. It is obvious that now since all the assets of the
former white government have been dissipated, that new
sources of easy income must be found. You invest in South
Africa at your own risk. We refuse to invest there.
Johnson Matthey predicts continued strong demand for the
precious white metal this year,
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although palladium is likely to remain subdued. They expect
platinum to trade between $480 to $580 an ounce over the next
six months. Demand exceeded six million ounces for the first
time last year, increasing by 8% to 6.15 million ounces. Motor
vehicle usage rose 33% and in Europe it surged by 55%. In
jewelry, China increased consumption by 18%. This year's first
quarter in China was very strong. The Chinese sales did not
offset the drop of usage in Japan and overall jewelry demand fell
10%. Our favorite platinum/palladium stock is *Starfield
Resources (SRN-CONX).
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Quoting a technical strategist research note, JP Morgan Chase
recommended some of its customers "close all longs in gold."
We wonder what they are smoking over there or are they just
protecting their short position?
The relentless rumors regarding whether Dinsa Mehta will stay
at JP Morgan Chase persist. First he is leaving, now he isn't, but
he will be. Morgan was forced to keep him on board whether they
liked it or not due to the widespread coverage of his leaving and
that event meant Morgan's gold derivative program was in
trouble. It is in trouble, but Morgan can't show weakness. Many
top people have already left the firm and that usually is an
indication that trouble is brewing. Mehta has been at Morgan 26
years and he was head of global commodity risk management
and global foreign exchange. His departure definitely means
something is amiss in the bank?s precious metals department.
They have lost control of the gold market that they have been
suppressing since 1994 and that they are facing monstrous gold
derivative losses. The conspiracy guys, which mean us, were
right all along. When Mehta was asked about foreign countries
interfering in the gold market he refused to discuss it, which
means they have been doing so. Not only is Morgan offside on
gold trades but also they are under investigation by the House
Committee on Energy and Commerce, which has requested
tons of documents related to the Enron collapse. Those papers
probably will reveal that Morgan was involved with gold leading
and derivatives in the gold market, which included central banks
and money laundering.
The court fight being waged between First Rand Bank and AIG,
American International Group a top CFR firm for $300 million
relates to gold hedging going back to 1996. We won't bore you
with the details. It doesn?t matter to us which one of the
connected fat cats wins.
The World Gold Fantasy Council says global demand for gold
fell 10% to 749.5 tons in the first quarter versus the first quarter
of 2001. There was strong Japanese demand and faltering
jewelry demand. Retail investment demand rose 31.6% with
Japanese investment demand rising 156% to the highest since
the second quarter of 1995. Investment demand in Turkey, which
purchases for other nearby countries, rose 153%, the highest
since 1966. Overall jewelry demand was off 15% to 623.9 tons
due to the world economic slowdown.
The Conference Boards leading Economic Indicators declined
0.4% in April to 111.7 after being up 0.1% in March. This reflects
continued layoffs, slower growth in wages, and the completion
of most mortgage refinancing, which will bring lower household
consumption in the months ahead. Thus far this year the federal
budget deficit is up to $66 billion for seven months, it's expected
to be over $100 billion by 9/31/02. The Treasury raised another
$9 billion in cash in an $18 billion four-week note sale on
5/20/02.
Spokane-based Gold Reserve (GLDR) has been told by the
Venezuelan government to drop the concession for the
LasBrisas project, near the massive Las Cristinas gold deposit
in Bolivar state, and close its offices in the country because of
"repeated violation of environmental regulations," according to
an unconfirmed report circulating in Caracas.
Rising gold prices means less hedging-analysts
SYDNEY, May 21 (Reuters) - A rising gold price meant Australian
producers will continue to reduce their forward sold hedge
positions, analysts said on Tuesday. Gold jumped about US$5
to nearly $317 an ounce overnight, the highest in 27 months,
leaving more of Australia's estimated 24.3 million ounces of
hedges outside the money, the analysts said.
Gold has risen 14 percent since the start of the year when the
price was $278 an ounce. Australia is the world's third largest
gold producer, mining some 300 tonnes a year Hedging --
selling as yet unmined nuggets at fixed prices to lock in revenue
and protect against a dropping bullion market -- has fallen out of
favour among the world's biggest mining houses, who claim it
stymies upward price moves. Also, rising markets in the past
have punished some heavily hedged companies, which actually
lost money when they were forced to buy gold at higher prices
than they were able to sell under options agreements.
May 27, 2002
THE INTERNATIONAL FORECASTER
An international financial, economic, political and social
commentary.
Published and Edited by: Bob Chapman
FOR A FREE INTRODUCTORY COPY GO TO:
Robert Chapman bif4653@comcast.net