🕐21.01.13 - 09:54 Uhr

INVESTEC GLOBAL NATURAL RESOURCES DAILY - MINING - MONDAY 21 JANUARY 2013 - XTA
LN, GLEN LN, NYO LN, RIO,LN, OZL AU, RRS LN, 1733 HK, GUF AU,SLP LN



Monday, 21 January 2013
Snapshot � Company news highlights: Glenstrata clears another hurdle, AFR highlights a RIO "to do" list Nyota underground resource, OZ minerals lifts Carapateena resource, RIO Gove deadline draws nearer, Randgolds Tongon closer to normal operations, Winsway profit warning, Guildford MD resigns, new dividend policy from Sylvania, � Commodity review highlights: gold strong, iron ore under pressure, 2012 a good year for Australian coal volume growth. � African news highlights: New Anglo American CEO stepping into his role. FTSE up 12 points (7am) - Market update.

FTSE futures up 12 points (7am) - another solid move form the Dow on Friday up 54 points after pressure was put on both the House of Representatives and Senate in the US to pass a budget by the end of the proposed 3 month debt limit increase.

Today marks the first meeting of the Euro-area ministers to assess Spain, Cyrus and Greece and the mechanisms of the Europeans Stability Fund.

Company News � Glencore-Xstrata (GLEN.LN, XTA.LN) clears another hurdle.

South Africas electricity provider, Eskom, has withdrawn its official complaint to South Africas Competition Tribunal over the proposed merger.

This removes one of the last few significant hurdles to the merger.

The companies have already secured the backing of their shareholders and the European Union, but are still waiting for approval from competition authorities in South Africa and China.

The companies have agreed to extend the legal deadline for their merger by six weeks to March 15, in order to provide more time to secure those approvals.

Source: Dow Jones � Australian Financial Review highlights Rio Tinto (RIO LN, RIO AU) "to do" list.

The AFR today published its expectations of key focus areas for the new CEO, Sam Walsh, including the appointment of a new CFO, Head of Strategy and Head of Iron Ore, the commissioning of Oyu Tolgoi, making progress on Simandou without upsetting Chinalco, and returning cash to shareholders.

Source: AFR. Investec View: We dont believe returning cash to shareholders Is an option for RIO over the foreseeable future.

Otherwise, we agree with the list, but note that in addition to the points raised, we expect that management changes in the Aluminium division will also be a key area of focus.

� Nyota Minerals (NYO LN) reports final results of the Feeder Zone drilling programme at Tulu Kapi.

The Feeder Zone is situated beneath the planned open pit and was not included in the DFS announced in Dec12.

A successful drill program has demonstrated the potential for a high grade resource that could be developed via an underground mine.

New high grade include 15.04g/t over 9.5m, 10.55g/t Au over 14.0m, 5.34g/t Au over 12.3m and 5.24g/t Au over 26m.

NYO has developed an initial in-house Inferred Resource of 1.1mt at 5.4g/t containing 188koz.

Independent studies are expected to commence shortly, but NYO expect that the underground could lift annual gold production by 15-45koz/pa.

Source: Company Investec View: While the initial underground resource is relatively small, it is a significant positive as it is likely to improve the economics of the overall project. � OZ Minerals (OZL AU) have increased their Carapateena resource.

The resource has been increased by 90mt @ 0.96% to take the total resource to 292mt @1.39%Cu, 0.48g/t Au.

The expansion amounts to another ~864,000t of Cu, or around ~1.9b lbs, which could be valued (undeveloped) at about US$0.06/lb.

In addition, a regional exploration discovery was made at the Khamsin Prospect with results of 440m @ 0.43% Cu.

Source: Company. Investec View: We estimate net value added of about US$110m, A$0.36/share.

� Rio Tinto (RIO AU) Gove deadline draws nearer.

The "end of January" deadline set for Rio Tintos decision on the future of its Gove refinery is only 10 days away and no gas supply deal has yet been struck.

The NT Government has appealed to new RIO CEO Sam Walsh to extend the deadline, but a Company spokesman indicated no change to the existing timetable.

Source: AFR. Investec View: We expect the refinery to be closed and the Alumina required for RIO vertically integrated operations will be sourced from their current spot sales. � Randgolds (RRS LN) Tongon operation getting back to normal.

Normal production should return within two weeks, following a fire three weeks ago at the mill section of its plant.

Investec View: RRS reports that the mine produced 210koz in FY12, which is well short of the 285koz target set at the start of the year.

The fire was the last of a numbers of issues the operation faced in 2012, including grid power disruptions and high wear of plant equipment as mining progressed into harder sulphide ore.

RRS has been implementing measures to offset the unreliable grid power. � Winsway (1733 HK) profit warning.

Chinese coal trading company Winsway expects to record a loss for CY12 due to lower demand for coking coal in China and an increase in finance expense according to a filing with the Hong Kong Stock Exchange.

Source: Company � Guildford Coal (GUF AU) Managing Director resigns.

Michael Avery, the managing director of Guildford Coal, has resigned due to poor health.

Craig Ransley, the founder of Guildford Coal, has been appointed executive deputy chairman until the appointment of a new managing director.

Source: Company Investec View: GUF is targeting production of 3mtpa from its North Pit mine and 2mtpa from its East Pit mine.

We believe the economics of these projects are likely to be marginal given the current low pricing environment for unwashed hard coking coal product on the Mongolia/China border; c.

US$50-55/t. � Sylvania Platinum (SLP LN) announces a new dividend policy to be applied from 2H13.

The company has seven chrome tailings processing complexes, while longer dated projects have been put on hold pending an improvement in PGM prices.

As a result of the reduced planned capex and positive forecast free cash flows, the board is recommending paying a minimum of 25% of the previous half year earnings as a cash dividend.

Source: Company
Market Overview 21-Jan-13 1d chg 1w chg 1 y chg
World Indices 21-Jan-13 1d chg 1w chg 1 y chg Commodities 21-Jan-13 1d chg 1w chg 1 y chg Dow Jones Industrial Avg 13,650 0.4% 1.2% 7.3% Gold - NY (US$/oz) 1691 0.4% 0.6% 1.4% FTSE 6,178 0.4% 1.2% 7.9% Silver (US$/oz) 31.97 0.3% 1.6% -0.7% FTSE 350 Mining 19,812 0.8% -1.2% -10.4% Platinum (US$/oz) 1677 0.5% -0.7% 9.3% ASX/S&P300 Metals Index 3,642 0.2% 0.2% -11.8% Palladium (US$/oz) 718 -0.5% -0.6% 6.0% Aim Basic Resources 5,007 0.7% -1.4% -30.1% Copper 8069 0.1% 0.9% -1.8% Currencies
Aluminium 2047 0.3% -0.2% -7.7% A$/US$ 1.052 -0.2% -0.4% 0.0% Nickel 17500 -0.3% 1.4% -14.4% GBP/US$ 1.589 -0.6% -1.2% 2.1% Spot 62% Fines CFR China 145 -0.2% -6.3% 3.7% US$/ZAR 8.868 0.7% 2.0% 11.8% Oil - Brent 114 0.2% 1.2% 7.4% HK$/US$ 7.753 0.0% 0.0% -0.1% Newcastle Thermal Index 91.1 -0.7% -0.7% -20.2% RMB/US$ 6.222 0.1% 0.0% -1.8% Richards Bay API4 Spot 86.8 -0.3% -2.1% na Source: Bloomberg
Commodities News � Gold continues to look strong this morning up 0.36% to US$1,690.35/oz on expectations of more stimuli.

Source: Bloomberg � Iron ore may come under pressure as Steel rebar futures fell 0.8% to US$38/t (equiv) and construction activity begins to slow as we approach the Chinese New Year and the week long holiday.

Source: Bloomberg � Australian coal continues to expand.

Price-wise 2012 was not a great year for the global coal industry but it wasnt all bad news for Australian producers.

Australias coal export volume grew by 32mt in 2012 to 316mt.

Capacity expansions of two coal terminals at the Port of Newcastle allowed New South Wales (NSW) exports, primarily thermal coal, to increase by 17.2mt year-on-year to 148mt.

Source: Inside Coal
African Resources Update New Anglo CEO starting to step into the role.

New Anglo American (AAL LN) CEO, Mark Cutifani, has said that he would be prepared to adjust the strategic direction and business of Anglo American Platinum (Amplats, AMS SJ) if it was required.

"I will do the things I have to do...." referring to actions he may take over a period of time.

"If I need to make an adjustment to Amplats, I will do that.

I understand South Africa and I understand platinum".

While the National Union of Mineworkers (NUM) has described Cutifanis appointment at Anglo as proof that an "old boys club" continued to dominate world mining, Cutifani said the response from the South African government had been one of endorsement.

Source: MiningMX
Investec Global Natural Resources Research Team: UK Australia South Africa Hunter Hillcoat Tim Gerrard Albert Minassian Tel: +44 (0) 20 7597 5182 Tel: +61 (0) 2 9293 2168 Tel: +27 (0) 21 416 1454
Marc Elliott Colin McLelland Tel: +61 (0) 2 9293 2140
Tel: +44 (0) 20 7597 5189

Simon Haggarty Tel: +61 (0) 2 9293 2462
Investec Global Natural Resources Sales Team: UK Australia South Africa Jamie Campbell Rod Clarkson Hayden Smith Tel: +44 (0) 20 7597 5038 Tel: +61 (0) 2 9293 2278 Tel: +27 (0) 21 416 1401
Matt Martin USA
Tel: +61 (0) 2 9293 2168 Thomas Lawrence
Tel: + 1 212 2595604

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