South African Gold Miners in trouble.

 The gold mining industry that gave rise to one of Africa's biggest cities is now in crisis.

Costs, including wages, have escalated over the past two decades and the gold itself is getting harder to get to.

Some analysts describe the gold sector as in terminal decline - a sunset industry.

Turbulent times

Crucial wage negotiations start in South Africa's gold mining sector on Thursday, the outcome of which, some analysts say, will determine the future of the whole industry.

Billions of dollars in exports and tens of thousands of jobs are at stake.

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It's been a turbulent 18 months for South Africa's entire mining industry, not just gold, with workers across several sectors staging wildcat strikes.

The tensions over the mines has often boiled over into violence, including the most infamous day in South Africa's post-apartheid history last August, when 34 miners were shot dead by police near Lonmin's Marikana platinum mine.

The South African government is so concerned that it tasked Deputy President Kgalema Motlanthe to try to broker a stability pact for the industry. The ruling ANC faces elections next year and is keen to avoid another flare-up of violence.

While mining only contributes about 6% of South Africa's GDP (financial services and manufacturing command larger slices), it generates nearly 60% of the country's exports.

Portugal: Opposition Demand to renegotiate bailout terms raises borrowing costs

Portugal's borrowing costs rose to a seven-month high as political tensions grow over the country's bailout terms.

Yields on 10-year bonds hit an intraday high of 7.9% before easing back, while the Lisbon stock market closed down by 1.6%.

On Friday, the opposition Socialists demanded a renegotiation of Portugal's bailout terms.

Investors fear disagreements over the bailout will weaken Portugal's commitment to economic reform.

Socialist leader Antonio Jose Seguro told parliament: "We have to abandon austerity politics. We have to renegotiate the terms of our adjustment programme. The prime minister has to recognise publicly that his austerity policies have failed."

Divisions over the bailout have already forced Lisbon to request a delay in a review of the bailout by its creditors - initially due to start on Monday - until the end of August or early September.

Kazakhstan Government will sell an 8.4% of Kashagan oilfield to China National Petroleum Corporation

Kazakhstan's government announced on July 2 that it will sell an 8.4% stake in Kashagan, the supergiant oilfield development project, to China National Petroleum Corporation (CNPC). CNPC has prevailed against India's Videsh, the external operations branch of Indian state-controlled Oil & Natural Gas Corporation, in the contest over this stake in Kashagan. The stake's owner, Texas-based ConocoPhillips, is selling it as part of Conoco's three-year, worldwide asset divestment program (by which Conoco has already sold its 20% stake in Russian Lukoil). 

The North Caspian Operating Company (NCOC), which is developing the Kashagan field, includes Kazakhstan's KazMunaiGaz, ExxonMobil, Royal Dutch Shell, Total of France, and Italian Agip (ENI's subsidiary), each with 16.8% of the shares; ConocoPhillips with 8.4%, and the Japanese Inpex with 7.56%. Kazakhstan's government expects commercial production at Kashagan to start by September this year or shortly thereafter. 

Under the consortium agreement, should any shareholder decide to sell its stake in Kashagan, the five large shareholders enjoy preemptive rights to buy that stake, subject to Kazakhstan's approval. In November 2012, Conoco announced that it would sell its stake to India's Videsh for US$5 billion. In January this year, the four major Western stakeholders in Kashagan waived their rights of preemption. Kazakhstan took five more months to deliberate on its decision. 

On July 2, the Oil and Gas Ministry notified Conoco that Kazakhstan has decided to exercise its right of preemption, authorizing KazMunaiGaz to buy Conoco's stake in Kashagan for the same price of $5 billion. In a back-to-back transaction, Kazakhstan will sell Conoco's stake to China's CNPC, for a likely price of $5.4 billion. Conoco has announced that it welcomes this outcome. 

CNPC's entry brings synergies with the oil export pipeline to China, the onshore inception point of which in Atyrau is the closest to the offshore Kashagan field. The pipeline's capacity is being expanded, and certain Kashagan shareholders are considering using it to initiate oil sales to China. 

The Indian company, had it won the contest, seemed likely to ship its share of oil from Kazakhstan via Russia. By contrast, Chinese oil companies in Kazakhstan (CNPC's subsidiaries) are using the Atyrau-Alashankou pipeline from Kazakhstan to China.

The route to China brings at least a degree of diversification to Kazakhstan's oil export options, which otherwise depend heavily on transit through Russian pipelines and ports to international markets. 

Chinese companies operating through joint ventures in Kazakhstan account for 22% of Kazakhstan's oil output, according to Kazakhstan's Oil and Gas Ministry. Some Western companies operating in Kazakhstan, including Total and ENI, are said to be holding talks with China about possible oil supplies to that country from Kashagan's future production. China and Kazakhstan plan to double the capacity of the Atyrau-Alashankou pipeline, from approximately 12 million tons annually at present to 20 million tons annually (or from some 240,000 barrels per day to 400,000 bpd) by 2015. Moreover, with CNPC's entry into the Kashagan project, China's intake of oil from Kazakhstan looks certain to increase in the years ahead.

However, the Caspian Pipeline Consortium (CPC) plans to boost the capacity of its pipeline, Tengiz (Kazakhstan)-Novorossiysk (Russia), from 34 million tons annually as of 2012 to 65 million tons annually by 2016 and thereafter (or from nearly 700,000 barrels per day as of 2011 to 1.4 million bpd by 2016) . So that this pipeline will transport a 

disproportionately large share of oil production from Kazakhstan.

Source Asia Times

Brazilian Central Bank raises interest rates

"In another step to combat high inflation, yesterday the Brazilian Central Bank raised interest rates for the third time in a row, this time by 0.50%, taking the benchmark Selic rate to 8.5% per year.

COPOM, the Monetary Policy Committee of the Central Bank, in a unanimous decision, kept the same open intensity demonstrated at the previous meeting in May. But unlike the last decision, which came out higher than expected, this was entirely within the market's expectation.

For the former director of the Central Bank, Carlos Thadeu de Freitas, the bank's next steps will depend on the behavior of the dollar. If the value of the currency returns to R$2.10 or thereabouts, he believes that just one more increase of half a percentage point will be sufficient to reduce inflation. But if the dollar continues to rise, Freitas says the rate could reach 10%.

the number of economists who project a higher rate has been increasing. They expect further increases in interest rates because, while monthly inflation is weaker, the cumulative rate for 12 months is 6.7%, well above the goals of the CB.

The official target is 4.5%, with a maximum limit of up to 6.5%. The promise of the President of the CB, Alexander Tombini, is to deliver inflation this year below last year's index (5.84%) and that of 2014 below 5%.

To help control inflation, the Finance Ministry has pledged to cut spending and create a public sector primary surplus of 2.3% of GDP this year. The market, however, continues to be skeptical and projects a surplus of only 1.7% of GDP".

Source Folha de Sao Paulo

Precious Metals Quotes

Gold Price          3months Futures         US$ 1,277.11

Silver Price        3months Futures          US$     19.82

London's Heathrow airport closed Boeing 787 jet on fire

Runways at London's Heathrow airport have closed after a fire on a parked Ethiopian Airlines Boeing 787 Dreamliner jet.

Arrivals and departures were suspended after the incident at 16:30 BST, a spokesman for the airport said. No passengers were aboard at the time.

Fifty Dreamliners worldwide were grounded in January because of battery malfunctions.

Boeing later modified the jets with new batteries and flight resumed in April.

An Ethiopian Airlines Dreamliner named the Queen of Sheba - the same plane involved in the Heathrow incident - flew from Addis Ababa to Nairobi on the first commercial flight since the grounding.

Pictures of the Heathrow fire on Twitter show an aircraft close to a building and surrounded by fire vehicles. London Fire Brigade said its crews were standing by to assist Heathrow staff.

Fire-retardant foam appeared to have been sprayed at the airliner, but no damage to the aircraft was immediately apparent.

Source  BBC

Government Bonds Quotes

Goverment Bonds			Price Change	YIELD %
U.S. 5 Year			-2/32	1.409
U.S. 10 Year			0/32	2.577
U.S. 30 Year			1/32	3.625
Germany 2 Year			1/32	0.104
Germany 10 Year			21/32	1.564
Italy 2 Year			-3/32	2.140
Italy 10 Year			0/32	4.482
Japan 2 Year			0/32	0.132
Japan 10 Year			-1/32	0.822
Spain 2 Year			1/32	2.074
Spain 10 Year			18/32	4.741
U.K. 2 Year			0/32	0.360
U.K. 10 Year			14/32	2.329

Source   WSJ

From WSJ; U.S. Real Estate developers presale before constructing

Spurred by tight inventory and plenty of interest from foreign buyers, real-estate developers in cities such as New York and Miami are reviving the boom-era practice of pitching new buildings months—and even years—ahead of completion. Miami's Faena House, a planned 18-story tower, is still pouring concrete at the condo's basement level. Yet the project, part of a newly developed strip that will include a five-star hotel and an arts center by Rem Koolhaas's OMA design firm, already has 50% of its 47 units under contract, according to Alicia Goldstein of Faena Group. Buyers are required to put down a 50% cash deposit on the apartments, which range from $2.5 million for a one-bedroom to $50 million for the full-floor duplex penthouse.
Buyers are returning to the market, finding historically low levels of inventories. So once again
presales offerings are increasing,and fixing prices for bidders.

From WSJ; Well's Fargo Mortgage Business weakening

Wells Fargo's  mortgage banking business is starting to show signs of weakening, a potentially worrisome trend for the U.S. housing industry.

Total mortgage banking income at the nation’s biggest mortgage originator slips 3% to $2.8 billion from the year earlier period.

Income from servicing loans was down 42% to $393 million, in part due to the bank’s recent sales of mortgage-servicing rights over the last year.

Meanwhile, the refinancing boom that helped bolster home-loan income in previous quarters has clearly taken a hit. Refinances as a percentage of applications were 54% in the second quarter, down from 69% in the year earlier period.

Total mortgage applications were down nearly 30% from the year earlier period.

China´s mania for english learning

A Chinese professor's blunt criticism of what he believes is an excessive craze for learning English has sparked heated debate among the public.

People's mania for English learning has wasted education resources and threatened the study of Chinese, said Zhang Shuhua, dean of the information and intelligence institute at the Chinese Academy of Social Sciences.

Zhang made the remarks at a meeting during the annual session of the 12th National Committee of the Chinese People's Political Consultative Conference, the top political advisory body, which closed on Tuesday.

His outspoken words have triggered intense online discussion, with nearly 90,000 comments posted on the topic by 9 p.m. Thursday on Sina Weibo, the Chinese equivalent of Twitter.

The subject of English has been listed as indispensable by college and postgraduate entrance exams in China, no matter what majors candidates are applying for.

"The learning of English, a compulsory course for college students, has distracted much of their attention from specialized subjects," said Zhang, adding that many applicants have been denied access to postgraduate education only because of their failed English test.

Source Xinhua

Mexico low interest on Oil and Gas Blocks of Pemex

According to a Wall Sreet Journal Article, State-owned oil monopoly Petróleos Mexicanos failed to attract much interest for an important round of production contracts Thursday, bolstering calls for a profound overhaul of Mexico's energy laws to attract international oil majors capable of unlocking huge oil and gas reserves.

Pemex, as the company is known, assigned service contracts for just three of six blocks at the geologically difficult Chicontepec onshore fields near the Gulf of Mexico. The company was forced to cancel tenders for three other sites, which were the largest of the six in terms of estimated oil reserves.

The bidding was watched closely here because Pemex was offering a new contract model created after a 2008 energy reform, in which contractors are paid on a per-barrel basis plus some of their costs, and offered bonuses for production above a set limit.

213 Overseas Companies set up or expanded in Hong Kong H1 2013

 A record of 213 Chinese mainland and overseas companies have been set up or expanded in Hong Kong in the first half of this year, Invest Hong Kong said Thursday.

Invest Hong Kong's Investment Promotion Director-General Simon Galpin finds the interim results encouraging, saying the department is optimistic to meet the annual target of 330 projects this year as several markets show good growth.

"Our pipeline of prospects is strong, in particular from companies in Chinese mainland and the U.S. which have signaled their intent to set up or expand in Hong Kong," he said.

The department will roll out a global marketing program, called "startmeup.hk", this month to encourage entrepreneur-led businesses to consider Hong Kong as the platform from which they can expand globally.

The 213 companies are from 33 countries. The mainland was the largest source of investment with 51 completed projects, followed by Japan with 26, the U.S. and UK with 24 projects each, and France with 13.

Source  Xinhua

Hong Kong Foreign Currency Reserves

Hong Kong's official foreign currency reserve assets amounted to 303.5 billion U.S. dollars at the end of June, compared to 305.7 billion U.S. dollars at the end of May, the city's Monetary Authority announced Friday.

The total foreign currency reserve assets of 303.5 billion U.S. dollars represent more than seven times the currency in circulation or about 51 percent of Hong Kong dollar M3.

China's Yuan lending increased in June to 860.5 billion

 China's new yuan-denominated lending in June stood at 860.5 billion yuan (139.62 billion U.S. dollars), up from 667.4 billion yuan in May, the central bank said Friday.

The June figure was down 59.3 billion yuan from the same period of last year, the People's Bank of China (PBOC) said in a statement on its website.

In the first half, new yuan-denominated loans reached 5.08 trillion yuan, 221.7 billion yuan higher than a year ago, the statement said.

The country's social financing, a measure of funds raised by entities through bank credit and other ways, amounted to 1.04 trillion yuan in June, down 742.7 billion yuan from last year.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 14 percent year on year to 105.45 trillion yuan at the end of June.

China's Investment Quota for Foreign Insitutions raised to US 150 Billions

The China Securities Regulatory Commission (CSRC) announced Friday that the investment quota of Qualified Foreign Institutional Investors (QFII) has been raised to 150 billion U.S. dollars.

The People's Bank of China, the State Administration of Foreign Exchange (SAFE) and the CSRC all agreed that the trial of RMB Qualified Foreign Institutional Investors will expand to Singapore, London and other places after Hong Kong.

The rise of the QFII investment quota will attract more foreign investors and promote the reform and development of China's capital market,said the CSRC.

Latest statistics from the SAFE showed that it has newly granted 6.02 billion U.S. dollars of QFII quotas to 22 foreign institutional investors so far this year, bringing the total QFII quota up to 43.46 billion U.S. dollars with 229 overseas institutions granted licenses.

All overseas investment funds will be approved under the scheme of the QFII, which was launched in 2002 by the Chinese government to allow licensed foreign investors to buy and sell A-shares when capital accounts are still controlled in the country.

Source  Xinhua

Canada's Economy will benefit from U.S.Recovery

Canada's economy will gather pace from a sluggish second quarter as it benefits from rebounding U.S. growth, but subdued domestic demand will still be a drag, a Reuters poll of economists showed on Thursday.

After surprising forecasters by growing at a much faster-than expected 2.5 percent annualized rate in the first quarter of the year, growth is seen slipping to 1.6 percent in the second quarter, then rising steadily.

The quarterly poll of 31 economists taken over the past week pegged Canada's 2013 growth rate at 1.7 percent, up from the 1.6 percent predicted in a similar survey taken three months ago.

Analysts slightly upgraded their forecasts due to the strong first quarter and expectations the improving U.S. economy will boost exports.

"We do anticipate ... a speeding up in growth for Canada starting in the latter part of this year and moving into 2014, and much of that will have to do with rebounding U.S. demand," said Emanuella Enenajor, an economist at CIBC World Markets.

Recent U.S. data releases, particularly stronger employment numbers, have painted a brighter outlook for the world's biggest economy and Canada's largest trading partner.

Economic growth across the border will average a higher 1.8 percent this year and quicken further to 2.7 percent next year, the July quarterly U.S. poll showed on Thursday.

By contrast, economists revised their 2014 Canada growth forecasts, projecting a smaller rebound. Canada's economy is expected to grow 2.3 percent in 2014, down from April's 2.4 percent forecast.

Source: BNN

Precious Metals Prices

Gold Price      3months    Futures                  U.S.$   1,271.70

Silver Price    3months    Futures                  U.S.          19.77

China and U.S.: EcoPartners

China and the United Sates on Thursday expanded their EcoPartnership program with the signing of six new partnerships to reduce greenhouse gases emissions and improve energy efficiency as well as create jobs.

The new agreements will add six partnerships to the original group of 18, said Chinese State Councilor Yang Jiechi at a signing ceremony during the fifth round of China-U.S. Strategic and Economic Dialogue in Washington.

"Today, another six pairs of Chinese and American institutes will join the partnerships, please accept my warm welcome and hearty congratulations," Yang said.

"I'm hopeful and confident that the 24 pairs of EcoPartners will draw on their respective needs and comparative advantages, fully tap into their cooperation potential and constantly innovate on their model of cooperation to maximize the outcomes of the partnerships," he said.

At the signing ceremony, U.S. Deputy Secretary of State William Burns said: "The six new EcoPartnerships we are committing to today are the best of the best. Some of you will be working on energy efficiency while others will be creating cutting-edge technologies to use landfill gas, conserve our groundwater resources and create plant-based plastic bottles. Whatever your project, I wish you the vest best in your work together."

Source: Xinhua