Chinalco Yunnan Copper Resources Discovers New Copper-Gold Zone in Mt Isa Region

Chinalco Yunnan Copper Resources Ltd has discovery a new copper-gold zone at Jubilee and made a further confirmation of a potentially large mineralized system at Millenium. The Millenium prospect is Chinalco Yunnan Copper Resources’ major drill target for 2014. The prospects are at the Mt Isa region in Queensland

They explored a significant zone of high grade primary copper sulphide and gold at Jubilee. The discovery highlighted with a 4 meter at 4.29 percent copper, .17 g/t gold intersection from 80 meters, which also includes 1 meter at 10.7% copper and 1.37 g/t gold.

It also found out a wide and strong anomalous zone of around 50 to 60 meters which includes 5 meters 0.98% copper, 0.5g/t gold and 5 g/t silver and this added a further confirmation on the existence of high end mineralization at Millenium prospects.

These exploration results provide validation of the CYU model at Blue Caesar that mineralization of primary copper sulphate extends to the north of prior drilling process. In addition of these findings, it also found out reconnaissance rock chip assays up to 20% copper, 1.7g/t gold and 3.2g/t silver at the King Solomon project.
Further exploration would be done in these key targets regions in the next few months. 

ECB Decision-Day Guide (In 5 Simple Questions)

As we have heard numerous times this year already, tomorrow may be 'another' most important day of the year/cycle as Mario Draghi and his band of merry men at the ECB appear to be finally cornered (by market exuberance, macro weakness, and excess positioning) into "doing" something as opposed to just talking about it. While we have discussed the ins and outs of the potential for a small focused ABS bailout QE,negative rates, and why whatever Draghi does tomorrow will have minimal impact on the real economy; Bloomberg provides a quick and easy guide to the five things to watch for from Mario Draghi today.

1. Which interest rates will Draghi cut, and how far?

While all but two of 60 economists surveyed by Bloomberg News predict a cut in the main refinancing rate from the current record-low 0.25 percent, they’re divided over the size of the reduction. Twenty one economists predict the ECB will lower its benchmark by 10 basis points to 0.15 percent; 34 analysts forecast a cut by 15 basis points to 0.10 percent. Three expect the rate to fall even further.

The majority of economists in a separate survey predict the ECB will become the first major central bank to introduce a negative deposit rate, with 32 of 50 analysts saying the rate will be cut to minus 0.10 percent and 12 forecasting a reduction to minus 0.15 percent. Such a move would weaken the euro, which has appreciated 4 percent against the dollar in the past 12 months. Only six economists see the ECB keeping the deposit rate at zero.

2. Which non-standard measures is Draghi debating?

Policy makers are contemplating a package of measures, and analysts from Goldman Sachs Group Inc. to Nomura International Plc expect a rate cut to be complemented by tools aimed at reigniting credit supply. “The combined use of several monetary-policy instruments is conceivable,” Executive Board member Peter Praet said in an interview with Die Zeit.

Longer-term loans to banks conditional on increased lending to companies may take center stage, with a program modeled on the Bank of England’s Funding for Lending Scheme being one option officials have discussed. Other measures up for debate include the suspension of sterilizing crisis-era bond purchases, changes in reserve requirements and collateral policy and an extension of the fixed-rate, full-allotment regime currently scheduled to be in place until July 2015, under which banks can borrow as much cash as they like against eligible collateral.

3. How serious is the threat of deflation in the euro area?

Inflation, which the ECB aims to keep just under 2 percent, has remained below 1 percent since October and slowed to 0.5 percent last month. In March, the ECB predicted it won’t return toward its goal until the end of 2016. Draghi is set to unveil new staff projections on prices, growth and unemployment that may force the ECB further into uncharted territory.

4. What can the ECB do later in the year if the situation worsens?

Draghi said on April 24 that large-scale asset purchases would be justified if the medium-term outlook for inflation worsens. Any program would target a mix of assets to reduce “term premia across markets and jurisdictions,” Executive Board member Benoit Coeure said on April 13.

The ECB and Bank of England have called on regulators to ease rules on asset-backed securities in Europe. That would provide a broader range of funding options for companies and create assets the ECB could buy to supply liquidity.

5. What else is on the ECB’s agenda?

Draghi may be quizzed on the progress the ECB has made on minutes. Officials started drafting trial versions earlier this year and are debating a reduction in the frequency of rate-setting meetings once they start publishing the accounts.

Developments in the ECB’s comprehensive assessment of the banking system may also be a topic in the press conference, in particular in how it may take account of rising legal costs after U.S. authorities threatened to levy a $10 billion dollar fine on BNP Paribas SA for breaching trade sanctions. In addition, the place of Dexia SA, the bailed-out French-Belgian lender, in the Comprehensive Assessment may be raised, after the ECB supervisors decided to exempt it from a stress test.

*  *  *

And so while they are the key five questions... here is what the world is hoping for / expecting...

"Copper's Long-Term Bear Trend Is Resuming" BofAML Warns

"Copper is breaking down," warns MacNeil Curry as BofA's technical strategist ignores the hyped hopes of newsletter-peddlers who see Dr. Copper's recent rise as indicative of a Chinese renaissance.

As Mike Tyson so philosophically noted, "everyone has a plan until they get punched in the mouth," and that 1-2 punch just hit Copper square in the jaw as macro data disappoints and the reality of a vicious circle of unwinding a rehypothecated commodity financing ponzi comes to bear. How much of copper's rise was artificially-created by CCFDs is unknown but as Curry notes, "the downtrend is resuming" and we will soon find out.

Get ready to sell Copper

Copper is breaking down. The completed 3wk Head-and-Shoulders Top and break of 2.5m trendline support (now 6801) says that the larger downtrend is resuming. A closing break of trendline support confirms, targeting 6321 (Mar-19 low and below).

LME Aluminum prices may rise by 30% to as high as $2,300 a ton in 2015

The recent rise in aluminum prices would prove unsustainable due to limited room for speculation and oversupply pressures, said Yang Xiaowu, General Manager at the Futures Department of China Aluminum International Trading in a statement made on May 29. 

LME aluminum prices rose from $1,754 per ton on May 21 to $ 1,848 per ton on May 28. Some market players attributed the sharp gain to market speculation that the Indonesian ban on exports would continue, with speculators now believing prices would rise by 30% in 2015 to as high as $2,300 per ton.

Yang, however, held a different view, believing the rise in aluminum prices would be unsustainable.  
 
Thanks to plentiful resources around the globe, Chinese aluminum smelters can increase bauxite imports from Australia, Guinea, and other countries to make up for the shortfall from Indonesia’s ban on bauxite exports, Yang said.  
 
If the ban did depress bauxite imports from Indonesia, Chinese smelters, which integrate bauxite, alumina and aluminum fabrication, mainly in Shandong, should purchase alumina directly from overseas suppliers, especially from Australia which has abundant alumina supply. Alumina inventories in China are also considered sufficient for the time being, he added. 
 
In addition, Chinese companies had already planned to build alumina plants in Indonesia long before the country’s export ban came into force. Since it takes less time to build alumina plants than to build aluminum smelters, Chinese companies will be able to ship alumina from Indonesia to China in the future, Mr. Yang said. 
 
Yang noted that rising aluminum prices may prompt smelters to expand capacity or bring idled capacity back online, which would also increase supply and weigh on aluminum prices.  

Tight supply likely to push aluminum premiums to record highs

 Rusal-world’s largest aluminum company foresees sharp jump in aluminum premiums during the coming quarters of the year. The company forecasts supply deficit for aluminum market owing to large scale production cuts by Chinese producers. The tight supply situation may push the aluminum premiums to new record highs during 2014, Rusal noted.

According to Oleg Mukhamedshin, Deputy CEO, Rusal, Chinese aluminium makers are likely to cut 3.5 million tonnes of aluminum smelter capacity this year, which can possibly lead to shortage of the metal in international market. The premiums that are currently around $400 may spike by 50% to $600 towards third quarter of the year.

The Indonesian ban on export of unprocessed ore may weigh on Chinese mills. The domestic bauxite prices have surged higher by $20 to reach $70-$85 since the start of the year. The higher raw material costs may force many aluminum producers to idle capacities. The country has already cut 2.1 million tonnes of production capacities so far this year. Rusal expects further cut of 1.3 million tonnes before year end.

Sources indicate that millions of tonnes of aluminum inventories are tied as backlogs with LME warehouses. Rusal had won a court order against cutting queues to 50 days. Mr. Mukhamedshin declined to comment on LME moves to appeal against the court ruling.

Nifty 7504 or 7261

Indonesian minister spearheads drive to restart copper exports

Indonesia's chief economics minister is spearheading a series of high-level government and industry meetings on Wednesday, aiming to broker a deal with foreign miners to restart copper concentrate exports that were halted nearly five months ago over a controversial tax.

Billionaire businessman Chairul Tanjung, who was appointed to the role last month, has made restarting copper exports a top priority amid a widening trade deficit, a slowdown in first-quarter economic growth and the prospect of job layoffs at mines.

Tanjung was due to attend a cabinet meeting on Wednesday morning to thrash out a new tax deal that could potentially be put before miners, including Freeport-McMoran Copper & Gold Inc and Newmont Mining Corp.

"After the cabinet meeting I will receive a report from the negotiating team at the coordinating economic ministry," Tanjung said on Wednesday, speaking ahead of the cabinet meeting in the capital Jakarta.

"Let's see the result. If the results are finalized, I will officially receive the Freeport and Vale CEOs," he said.

Indonesia on Jan. 12 introduced a ban on ore exports and levied an escalating tax on concentrate exports as part of efforts to force miners to build smelters and processing plants in Southeast Asia's largest economy.

The new tax halted about $500 million worth of monthly mineral ore and concentrate exports and led Freeport and Newmont Mining, who account for 97 percent of the country's copper output, to slash output as both say the rules conflict with their contracts.

Freeport chief executive Richard Adkerson was due in Jakarta this week for talks. Adkerson had been scheduled to meet Tanjung on Tuesday, but the meeting did not take place, Freeport spokeswoman Daisy Primayanti said, without giving details.

The two miners argue they should be exempt from the new export tax, which kicks in at 25 percent and rises to 60 percent in the second half of 2016, before a total concentrate export ban in 2017. They say their current contracts prohibit any extra taxes.

With the mining export stoppage about to enter its sixth month and the country's current account deficit still at a dangerous level, the credibility of Indonesian President Susilo Bambang Yudhoyono's outgoing government is also at stake. A fresh administration is widely expected to take government after July elections.

Details on what changes may be made to the export tax are not known, but late on Tuesday Tanjung reiterated that the government would look to draft a new regulation with separate incentives for miners making progress in the construction of smelters.

Both companies have questioned the economic viability of building new copper smelters in Indonesia, but have agreed to study the possibility of building a copper smelter with state-owned miner Aneka Tambang.

In addition to a breakthrough on the export tax, Tanjung, who is ranked as Indonesia's fifth richest man by Forbes with a net wealth of $4 billion, is looking to resolve long-running contract renegotiations for both Freeport and Newmont, whose current contracts are due to expire in the next few years.

Nickel producer PT Vale Indonesia is also up for a contract renegotiation.