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Worldwide
depression? Maybe for those over-leveraged in the auto industry,
housing, and other fixed assets with huge debt loads but definitely not for
those involved in worldwide industrial projects from what I read and see
happening. Many investors are obviously running scared and you can’t
blame them with the endless media fear-mongering going on and especially from
the new U.S. President and his so-
called dream team. What I see is possibly the greatest opportunity in our
lifetimes for base metals mining investment and at unbelievable over-sold,
fire-sale conditions. There’s a lot more for people to consider
than just all the fearsome media and political commentary at work. Please
bear with me and read on.
Consider These
‘Few’ Pertinent & Recent News Facts:
*Advanced Stage 2009
Industrial Project Activity For East Coast States
Exceeds $85 Billion,
accounting for only 28% of total US Industrial Project Activity. Mar. 03/09
Source: www.Industrialinfo.com
*KBR Posts $88
Million Fourth-Quarter Profit:
SUGAR LAND--March 3, 2009--Researched by Industrial Info Resources (Sugar
Land, Texas)--Engineering and construction firm KBR Incorporated (NYSE:KBR)
(Houston, Texas) has reported a fourth-quarter 2008 net income of $88
million, up 23.9% year over year, on strong revenue across the board,
especially in the Services business unit. Net income for the year totaled
$319 million, compared with $302 million in 2007. As part of our International
Industrial Database, Industrial Info is tracking 43 active projects worth
$42.1 billion involving KBR. The largest of the projects is a $12 billion
grassroot refinery in Saudi Arabia that Industrial
Info has been monitoring since March 2006. Source: www.industrialinfo.com
*Welspun Gujarat
Commissions Tubular Steel Pipe Facility in Arkansas:
BANGALORE, INDIA--March 3, 2009--Researched by Industrial Info Resources
(Sugar Land, Texas)--Indian steel-pipe manufacturer Welspun Gujarat Stahl
Rohren Limited (BSE:532144) (WGSRL)(Bharuch, Gujarat) recently commissioned
an API-certified state-of-the-art tubular steel pipe mill in Little Rock,
Arkansas. The new facility's pipe mill has the capacity to produce 300,000
tons of helically submerged arc-welded pipes. Source: www.Industrialinfo.com
*Bahia Mineracao
Plans $1.6 Billion Iron Ore Project in Brazil:
CORDOBA, ARGENTINA--February 3, 2009--Researched by Industrial Info Resources
(Sugar Land, Texas)--Brazilian mining company Bahia Mineracao Limitada
(Salvador) is planning to develop a $1.6 billion iron ore project in the
state of Bahia in northeastern Brazil. The Pedra de Ferro project, to be
located about 32 kilometers south of the city of Caetite, entails the construction of an open
pit mine and concentrator to process 25 million tons of iron ore per year.
Source: www.Industrialinfo.com
*Gazprom and Total Show Interest In Nigeria's Trans-Sahara Gas
Pipeline Network:
GALWAY, IRELAND--March 3, 2009--Researched by Industrial Info Resources
(Sugar Land, Texas)--Nigeria's Trans-Sahara proposed gas pipeline project
linking the African continent with the European Union is garnering
unprecedented attention from leading global energy companies. Total SA
(NYSE:TOT) (Paris, France) and OAO
Gazprom (OTC:OGZPY) (Moscow, Russia) recently expressed interest in
being associated with the 4,128-kilometer gas pipeline network that will
connect Europe with Nigeria through Niger and Algeria. Source:
www.Industrialinfo.com
*MTA Pushes Forward
with Phase I of $16 Billion Subway Project in New York
City Creating Hundreds of Long-Term Construction Jobs:
SUGAR LAND--February
27, 2009--Researched by Industrial Info Resources (Sugar Land,
Texas)--During
a time of almost daily announcements of banks failing, industrial giants
begging for federal financial aid and major companies initiating layoffs and
job cuts of epic proportions, finding places where long-term employment is
virtually guaranteed is a rarity. However, in downtown New York City, such a place
exists thanks to the Metropolitan Transportation Authority (MTA) (New York, New York) and its
construction arm, MTA Capital Construction (New York)
Source: www.Industrialinfo.com
.
*Planned U.S.
Industrial Project Starts at $301 Billion in 2009:
SUGAR LAND--February 25, 2009--Industrial Info Resources (Sugar Land, Texas)
is currently tracking more than 5,300 industrial projects totaling $301
billion in the U.S. scheduled to begin construction in 2009. This number,
while high, represents a 1.3% decrease in planned project starts that were
measured for a similar study in 2008. Project fallout in 2009 is expected to
be high as economic conditions force project owners to hold on to cash and
defer projects out between six and 12 months. Source: www.Industrialinfo.com
*Northwest China's Shaanxi Province Nails
Down 309 Key Construction Projects:
BEIJING--February 9, 2009--Researched by
Industrial Info Resources (Sugar Land, Texas)--In order to promote economic
development, Northwest China's Shaanxi province
has nailed down 309 key construction projects with a total estimated
investment of $160 billion
Source: www.Industrialinfo.com
.
*Construction of
CGNPC's $10.2 Billion Yangjiang Nuclear Power Project Progresses Smoothly:
BEIJING--February 9, 2009--Researched by Industrial Info Resources (Sugar
Land, Texas)--Following the official kickoff on December 16, 2008,
construction of the Yangjiang nuclear power project, the largest nuclear
power project in China, has been progressing smoothly in southern China's
Guangdong province. The majority of the civil work construction is complete,
according to China Guangdong Nuclear Power Corporation (CGNPC) (Shenzhen). Source:
www.Industrialinfo.com
*Vibrant Gujarat
Summit Attracts Investments of $152.8 Billion Through 444 Commitments on Day
One:
BANGALORE, INDIA--January 19, 2009--Researched by Industrial Info Resources
(Sugar Land, Texas)--The prevalent worldwide financial crisis
notwithstanding, the ongoing 4th Vibrant Gujarat Global Investors' Summit
2009 in Ahmedabad, Gujarat, saw 444 memorandums of understanding being signed
on day one, with the nation's industrial movers and shakers pledging to
invest $152.8 billion across several sectors in the state. The total value of
investment commitments made on the first day exceeds what was pledged during
the 3rd summit in January 2007, when 363 memorandums were signed for projects
worth $94 billion. Source: www.Industrialinfo.com
*China Power
Investment Signs Agreement with Hunan Province to Develop $8.76 Billion in Power
Projects:
BEIJING--January 16, 2009--Researched by
Industrial Info Resources (Sugar Land, Texas)--China Power Investment Corporation
(CPIC) (Beijing) and the government
of Hunan province have
signed a strategic-cooperation framework agreement for power projects in Hunan. According to the agreement, CPIC
will invest $8.76 billion to promote the construction of power projects in
the province. Source: www.Industrialinfo.com
*Note: You can
receive free daily alerts from Industrial Info.com by subscription on
their website.
This is an
invaluable tool when you try to guage the economic pulse of the world in
general.
*Worldwide Pipeline
Report:
P&GJ's latest
worldwide figures that indicate 160,136 miles of new and planned oil and gas
pipelines are under construction and planned.
North American
pipeline companies are planning and constructing 35,217 miles of oil and gas
pipelines. The remaining 124,919 miles represent new and planned pipelines
worldwide. (Source:) http://www.allbusiness.com/transportation/pipeline-transportation-oil-gas/11766171-1.html
*New Nuclear
Reactors Worldwide:
-In the United States, the Nuclear
Regulatory Commission has now received combined licence applications for 26
new reactors
-Rising demand for
electricity and the need to reduce greenhouse gas emissions could drive an
almost fourfold jump in nuclear power reactors under operation worldwide by
2050, the Paris-based Nuclear Energy Agency said last year.
-The agency forecast
the number of functioning nuclear reactors in the world could rise to 1,400
by 2050, from 439 now, while nuclear power's share of total electricity
production worldwide could grow to 22 percent, from 16 percent today
-China- Following
the roll out of the State Council’s stimulus package, the National
Energy Administration announced large sets of projects including power
plants, oil refineries and a second west-east gas pipeline. Construction on
the eastern section of the RMB142.2 billion pipeline began in February in
Shenzhen. Construction on the western segment began last year and is expected
to be completed by the end of 2009. When operational in 2011, the 8,704
kilometer pipeline will cross 15 regions and carry 30 billion cubic meters of
natural gas every year to Zhejiang, Shanghai, Guangdong and Hong Kong.
-The government has
already approved the construction of 10 nuclear power reactors with a
capacity of 1,000 megawatts each according to statements released by the NDRC
last November. In addition, China plans to
"start building eight more nuclear power plants in the next three years,
with 16 reactors whose total installed capacity will surpass 10 GW," NEA
officials told state media in early February.
*Infrastructure
Spending to Jump Worldwide:
This year
governments around the world will spend 2.9% of world GDP on infrastructure,
up from 2.2% in 20087according to Infrastructure Investor, citing
projections for 2009 compiled by consultancy CG/LA. Norman Anderson.
Washington D.C. based
consulting firm, CG/LA. Norman Anderson, predicts global infrastructure
spending will jump 0.7% this year (or increase by an additional $280
billion),according to Infrastructure Investor. The firm says the push for
renewed infrastructure will be led by developed countries, although China (which unveiled plans in November
2008 to spend $586 billion on infrastructure investment over the next two
years) will be a notable exception to this trend.
Right here at home, CG/LA foresees that the U.S. will
carry out roughly $190 billion in infrastructure spending, notes
Infrastructure Investor. The firm also believes that President Obama’s
proposed Infrastructure Bank will become a reality.
China’s
Infrastructure Spending:
As I write
this and was about to give a figure of the previously stated $600 Billion
spending package that China had planned for 2009, I’m told they are
going to update that figure publicly tomorrow. I’d bet odds money
that $600 B will be increased substantially. We’ll see.
Ok! Enough of
that for now. Considering that we have not even covered many of the
Canadian, Russian, Brazilian, Indian, Saudi, African (etc.) mega projects in
the works as there are so many more examples of billions being spent in
worldwide Industrial Projects thru and beyond 2009 that I could go on for
pages.
The point is that
all these projects and many, many others not mentioned herein (ie: Railroads
in China, Bridge Construction projects, Refineries, Ship building, Military,
etc etc) are going to weigh heavily on base metal demand this year and for
years to come and current base metal supply has been curtailed big time over
the last few months with mine closures and new mines dead in the water
because they are unable to obtain Capex funding. This is fast becoming
a huge set-up for rapid gains in Metals prices going forward. Keep in mind it
isn’t just low metals prices that are spurring this growth. Most
were in planning stages long before the down-turn and now with depressed
metal prices there will likely be an onslaught of new ones coming to light.
Now Consider The
Smart Money:
So where has the
so-called “Smart Money” been moving over the 3-4 months?
Contrary to many
retail investors knowledge it’s been flowing quite substantially into
Private Placements and “bought” financings in Junior &
Mid-Cap mining companies. Consider that roughly speaking, over $400 M
has been laid out in this sector over the recent 4 months, much of which has
gone into the Jr’s with Gold & Base Metal projects of merit. Why is
this happening when the mining sector is at what “appears” to be
an all time low in terms of confidence & interest to the general
investor? Because it ‘IS’ smart money and not unlike the
continued investment in the Oil/Gas exploration sector, those who are quietly
investing this money in Base Metal miners see what many don’t, and are
just too nervous because of all the negativity out there.
I could give a long
list of some of the company’s that have completed P/P’s and
bought deals since Sept /08 up to the end of Feb/09 for those who want names
but this editorial would become far to long. Let’s just say there
are over 30 Jr’s in the mining sector that I found with little effort,
all of whom have completed their Financings & P/P’s with no
difficulty.
Most of these recent
Jr financings have been in the range of $100K to $300-$400K and even a few
whom garnered much more.
Bought Financings:
I
myself had no realization that there were any “bought” financings
currently being done until a little bird spoke to me and I started doing some
research. We all know that when a financing is done as a
“Bought” deal that somebody either knows something or they think
they do and consequently the public doesn’t even have the opportunity
to participate before it’s already done. To me this is a big
confidence signal that things are not nearly as bad as many would have us
believe. From all the data I can find the total amount of bought deals
over the last 4 months is well over $5 Billion to a possible $7 or $8B if one
digs deep enough. All this is being done with little to no fan-fare by
mining media.
Related News:
Another fact
just released by BNN.com today states that Canadians invested $1.8 Billion in
Mutual Funds in Feb /09 alone. We all know that money goes straight
into the stockmarket. Sounds to me like another sign of market confidence out
there somewhere.
MetalBulletin.com 04
March 2009 11:29
LME: prices are well supported at present, with LMEX rising 2.8% day-on-day
to 1,728. The appreciation is heavily influenced by expectations that China's stimulus packages will boost
metals demand.
Signs of a recovery of the nation's economy persist, with the February PMI
(which is a proxy for metals demand) rebounding to 49.0, from 45.3 (values
below 50 still reflect a contraction). The production sub-index rose to 51.2,
showing expansion for the first time since June 2008.
Copper Today: Up
$0.11 @ $1.70 p/lb. Stark contrast to price over the last few months. Copper
is always considered the bell weather metal for growth, but then the Auto,
Housing. & Commercial Const industry are the key end users of Copper, so
maybe the Copper price may not give sufficient warning for higher Base Metal
prices this time around.
More
Infrastructure/Copper News Just Out:
Copper Jumps to
3-Month High; China May Boost Stimulus
Spending
By Millie Munshi
March 4 (Bloomberg)
-- Copper prices surged to the highest in three months on signs that China will boost government spending to
revive its economy, increasing metal demand.
Premier Wen Jiabao will
announce a new stimulus package tomorrow, adding to an earlier 4 trillion
yuan ($585 billion) spending plan, said Li Deshui, a former central
bank policy maker. China is the
world’s biggest metal consumer. Copper prices jumped 5.8 percent
yesterday on speculation China’s
consumption will climb.
US, China Economic Projects To Increase International
Copper Demand
www.chinaview.cn 2009-03-04 18:20:43
Special
Report: Global Financial Crisis
LUSAKA, March 4 (Xinhua) -- Zambia's Standard Chartered Bank has said
the stimulus package in the United States and China will increase demand for copper and
prices should appreciate, Zambia Daily Mail reported on Wednesday.
The
787 billion U.S. dollars stimulus package in the United States will include
expenditure on copper-intensive projects such as public transport and school
buildings while China has a stimulus package of 568 billion dollars to boost
the infrastructure market, which is copper-intensive, the newspaper said.
China's
Spending Spree Likely To Include
Canadian Companies
Duncan Mavin,
Financial Post Published: Wednesday, March 04, 20
HONG KONG - Asia's dealmakers say a Chinese resource
spending spree will accelerate throughout the next 12 months, with Canadian
mining and energy companies likely on the shopping list.
Chinese buyers have
already scooped up US$70-billion worth of global resource assets so far this
year, as Beijing looks to secure its energy and resource future by spending
some of its US$2-trillion in foreign exchange reserves.
The overseas buying
trend will pick up steam in the months ahead, according to China and Hong Kong-based corporate
dealmakers, investment bankers and private equity players surveyed by Royal
Bank of Scotland and Mergermarket. (Excerpt)
In summation,
I’d say for any investor looking to regain some of the massive stock
market losses we’ve all had, one should take a much broader look at
fundamentals of worldwide industrial growth and quit dwelling on the
financial turmoil & negativity caused by Wall Street and bankers'
greed, politicians' endless posturing, as well as the turmoil caused by the
mortgage crisis and keep your eyes focused on how and why growth in all the
varied industrial sectors of the World will be the main factor for renewed
and possible rapid & sharp increases in the demand and pricing of Base
Metals in the months ahead. There are exceptional Jr Miners with base
metal projects out there trading for mere pennies compared to last two years
highs.
Some predict wars,
others predict the end of Fiat money, the banking system and worldwide
depression or even worse. Well folks, “Chicken Little” is a
children’s fictional character and the Sky isn’t falling from my
contrarian viewpoint, but Base Metals are finite and the world grows and
moves steadily onward regardless of anyone’s prognostications,
including my own.
As always, thanks for
reading and best of luck in your investments.
Ken Reser
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