Anglo says commodity prices stabilising, Rio sees Chinese steel rise in second half, De Beers sees diamond improvement signs

The prices of most commodities appear to have stabilised, says Anglo American CEO Cynthia Carroll. Read on page 5 of this edition of Mining Weekly of the copper price increasing by more than 50% off its December low, platinum going above $1 200/oz from its sub-$800/oz October lows, nickel going to $12 000/t and zinc to $1 455/t.

Anglo expects the economic recovery of the industrialised countries and the ongoing industrialisation of the major developing countries to drive long-term demand for commodities, stimulated by government spending programmes in many major economies, including the US and China. The company says that commodities supply is likely to be hit later by the lack of new projects coming through.

Rio Tinto sees Chinese demand for steel recovering in the second half of 2009. Rio CE Tom Albanese is keeping his global iron-ore guidance for 2009 at 200-million tons. He has also kept Rio’s iron-ore production in Q1 2009 at the level of Q4 2008. Also, Rio’s net debt position is stable and Anglo says it is able to manage sustainably with an ongoing net debt of $11-billion.

Diamond-miner De Beers sees “signs of improvement” in the market, and expects the trend to continue for the rest of this year. Read on page 14 of this edition of Mining Weekly of Debswana’s Jwaneng, Orapa and Letlhakane mines restarting operations, while the smaller Damtshaa mine and the Orapa Plant 2 remain suspended until the end of 2009.

De Beers Botswana chairperson Stephen Lussier expects the market improvement to continue as the year unfolds. Canadian diamond-miner and high-end jewellery retailer Harry Winston concurs, noting some improvement in the pricing and demand for the diamonds produced at the Diavik mine, in Canada’s Northwest Territories, which it owns with Rio.

Harry Winston CEO Robert Gannicott believes that the market may have bottomed. In February, Anglo, the Oppenheimer family and the Botswana government extended a $500-million loan to De Beers to help it get through the difficult economic climate.

To watch a video on comments by the liquidator of the stricken Pamodzi Gold, go to www.miningweekly.com and click on ‘Multimedia’ and then on ‘Video Clips’. Also note the new Creamer Media TV weekly series called Second Take.