[cid:image001.png@01CEDAC7.16F057C0] Wednesday, 06 November 2013 [cid:image006.jpg@01CEDAC7.172C0130]
Snapshot � Company news highlights: First Quantum initiation of coverage published, Kumba Iron Ore research published, Centamin solid Q3 results, New World Resources Q3 poor results, AngloGold Ashanti lifts Q3 earnings, Gold Plat Y/E results highlight tough market conditions, SNR receives funding option, Coal of India to increase coking coal production. � Commodity review highlights: Gold prices drift sideways, Chinese major sees flat copper and rising zinc prices, Norways Sovereign Wealth Fund faces ban from coal investments if Labour Party gets in � Other Economic News: China Premier indicates countrys need to maintain 7.2% growth, Indonesian court rules that English language contracts post July 2009 are void � African Resources Update: Ghana should regulate artisanal gold miners, BSGR has one month to respond to Guinean allegations of bribery. � FTSE futures up 23.5 points, US markets closed down (Dow -0.13%, S&P -0.28%) as investors took profits ahead of GDP and non-farm payrolls data later in the week and tapering concerns are raised thanks to a better services sector data print than expected.

Asian markets are mixed (Nikkei +0.79%, Hang Seng -0.12%, ASX 200 +0.03%).

European markets are set to move forward as investors expect the ECB to take more action to boost economic growth and cut interest rates at tomorrows policy meeting.

Shanghai is down 0.82% ahead of the Communist party meeting this weekend. � Commodity markets - gold -0.02% (US$1,311.35/oz), silver -0.05% (US$21.693/oz), copper +0.00% (US$3.2585/lb), iron ore +0.74% (US$136.80/t), platinum +0.49% (US$1,457.10/oz), WTI +0.46% (US$93.80/bbl), and Brent +0.59% (US$105.95/bbl).

Dual listed - BHP AU +0.63% (A$38.09), RIO AU +1.39% (A$65.60).

Iron ore rebar futures in China fell for the 1st time in 3 days on concern that the government may step up property curbs, after the 21st Century Business Herald reported that the government wont approve requests to raise prices for housing developments before FY13.

Spot iron ore actually rose overnight though on expectations of continued robust demand in Q4 after data showed that iron ore shipments from Port Hedland to China jumped 10% QoQ in October to a record 25.2Mt and up 43% YoY.

Gold slumped to its lowest price in more than 2 weeks on the better US data and the expectation that the Fed will taper soon.

December futures fell to US$1,308/oz and stocks are reacting reasonably negatively in Asia Pac over the day as a result. � Economic data due today:- US - MBA mortgage applications, leading index (forecast 0.6%).

Eurozone - October PMI services data - forecasts: Germany (52.3), France (50.2), Italy (51.2), EC (50.9), EC retail sales MoM (-0.4%), German factory orders MoM (0.5%).

UK - September industrial production (0.6), Sept manufacturing production (0.8%).
Company News � First Quantum Minerals (FQM LN) initiation of coverage.

We have initiated coverage of FQM this morning.

We believe that FQM offers investors exceptional copper exposure, with copper production growth of almost 200% expected by FY16E to over 750ktpa.

The company would offer almost 400% growth in copper output if and when Cobre Panama and Haquira are brought on stream.

FQMs management team has an excellent track record in building its own mines and we believe that the groups approach to geographical diversification is very sensible.

Source: Investec � Kumba Iron Ore (KIO SJ) note released.

We believe that the KIO arrangement with Arcelor Mittal South Africa potentially ends the dispute over the pricing and supply of iron ore.

It continues with a pricing arrangement that is not too different from the interim agreement on our estimates and moves the risks and rewards towards KIO as it takes ownership of Thabazimbi and seeks to optimise sales channels.

Source: Investec � Centamin (CEY LN) 3Q13 results - no major surprises.

CEY had already reported 3Q production of 84,757oz (in line with Investec 85koz) and now reports cash costs of $693/oz (Investec $762/oz FY).

3Q financials today illustrated EBITDA of $43.1m (down 36% YoY) and EPS of 2.72cps (down 51% YoY).

CEY is writing down $11.9m investment in Nyota Minerals (NYO LN) and has reduced its holding from 19.4% to 14.4%.

Stage 4 expansion, doubling the plant to 10mtpa, remains on track for completion in 4Q.

Source: Company Investec view: Nothing out of line, given previously reported production and the +$300/oz fall in gold price YoY.

CEY reiterates its expectation that it will exceed FY13 guidance of 320koz (at under US$700/oz) - we were already at 329koz and $700/oz, so have not changed our numbers in this regard.

The key driver for CEY, in our view, will be successful commissioning of the Stage 4 expansion and delivering on its targeted ramp up to 450-500koz in 2015, including setting a target for FY14E and delivering on it.

FY13s performance so far provides confidence. � New World Resources (NWR LN) results for the first 9 months of FY13E.

During the 9 month period, NWR generated revenue of EUR634m.

Cost of sales was EUR664m, leading to a gross loss of EUR30m.

The company posted a EUR310m impairment charge, and reported a loss for the period of EUR528m after including the loss from discontinued operations of EUR448m.

Source: Company Investec view: These results make for unpleasant reading although the impairments had already been previously reported and reflect the groups decision to close its uncompetitive Paskov mine.

The company remains committed to its strategy of becoming Europes leading miner and marketer of coking coal by 2017. � AngloGold Ashanti (ANG SJ) lifts 3Q earnings.

Normalised adjusted earnings were $110m compared with $9m in the 2Q, following a 12% lift in gold production to 1.043moz and a 10% drop in cash costs to $809/oz.

AISC (all-in sustaining costs) improved by 11% to $1,155/oz from $1,302/oz the previous quarter.

Guidance for the year is of 950koz to 1moz at $860/oz to $890/oz cash costs.

The new CEO is making significant progress in driving the production optimisation and cost reduction initiatives, in response to the fall in the gold price, which includes targeting a $460m reduction from corporate and exploration costs and $500m in direct operating cost savings.

Tropicana in Australia and Kibali mine in the DRC, both produced their first gold in the last week of September, and these operations are expected to contribute 550-600koz in FY14E at cash costs below the current average.

Source: MiningWeekly � Goldplat (GLDP LN) preliminary results to June indicates production of 35koz Au generating gross profit of GBP5.3m leading to operating profit of GBP2.6m, PBT of GBP207k following took an impairment charge of GBP2.36m on its Kilimapesa gold mine in Kenya that is on care and maintenance.

At the end of the period the company had net cash of GBP2.36m and is proposing 0.12p dividend down from 0.6p a year ago.

The company also intends a share buyback.

Source: Company � Strategic Natural Resources (SNR LN) 74% owned subsidiary, Elitheni Coal has been offered short term funding of GB915k at 1% per month repayable by 12th December 2013 from Rapitrade that could convert into a 10% shareholding in Elitheni to be taken from SNRs share of the subsidiary.

Source: Company � Coal India Ltd (COAL IN) increasing coking coal production.

COAL will reportedly construct four new coking coal mines in Jharkhand province to produce up 12mtpa run-of-mine coal and 4mtpa of coking coal.

COAL produced 43.7mt of coking coal in the twelve months ended 31 March 2013.

Source: Business Standard, WSJ Investec view: The Indian government has a fairly strong incentive to help support the COAL share price as it is trying to divest a 5% interest by November/December as part of its plan to raise up to Rs40,000 crore (c.

US$6.5bn)through divestments in the current financial year.

The government currently holds a 90% interest in COAL.
[cid:image007.png@01CEDAC7.172C0130] Commodities News � Gold prices drifting sideways with upside potential undermined by speculation over US Fed scaling back stimulus measures.

Physical demand has also been subdued, with gold premiums in India halving despite the festival season.

Supply in India is expected to improve after some importing agencies purchased gold for domestic use.

Source: Thomson Reuters � Chinese metals producer MMG sees copper prices steady at current levels, although zinc is expected to face pressures as older mines outside China.

The country may have the domestic capacity required to meet potential shortfalls in Zinc, however, environmental restrictions are likely to impact the cost effectiveness of these operations as the company tightens up on environmental standards.

Many of the domestic mines need prices well over US$1/lb ahead of current price levels of c.

US$87/lb.

Source: Thomson Reuters � Spot iron ore prices approaching US$140/t with steel prices in China climbing encouraging producers to pick up cargoes of iron ore.

Cargoes for immediate delivery have been reported u US$136.7/t.

Source: Thomson Reuters � Norways major sovereign wealth fund managing some US$800bn may be banned from investing in coal producers if the domestic Labour Party gets its way as it raises concerns over climate change from the coal industry.

The policy appears to receive sympathy from other parties.

The fund cannot invest in companies that produce nuclear weapons, landmines, cluster bombs, tobacco or those involved in severe environmental damage or systematic human rights violations.

Two major miners that it cant invest in include Rio Tinto and Potash Corp of Canada.

The fund is estimated to hold around US$10bn in coal miners.

Source: Thomson Reuters Investec View: This is a concerning development if the Labour Party comes to power as unwinding a possible US$10bn of holdings could be challenging.

The policy would rule out investments in any of the major UK listed diversified miners, BHP, Anglo American and Glencore Xstrata.
Other economic news � China needs to sustain economic growth of 7.2%.

Chinese Premier Li Keqiang has said that China needs to sustain economic growth of 7.2% annually to create 10m jobs a year and to maintain an urban jobless rate below 4%.

The comments were made at a meeting two weeks ago but were only published this week.

Source: Reuters � Indonesian court rules English language contracts void.

The West Jakarta District Court has ruled that any contracts entered into after 9 July 2009 that are not written in Bahasa Indonesia are in violation of Law 24/2009 and therefore void.

Source: Herbert Smith Freehills Investec view: The court ruling is subject to appeal but could cause problems for foreign companies as it is common practice in Indonesia for contracts to be written in English and informal guidance given by the Indonesian government suggested that English language contracts would be enforceable.
African Resources update � Ghana should regulate operations of artisanal miners: While Ghana is clamping down on illegal miners, the Precious Metal Marketing Company (PMMC), has stated that its actually has the potential to contribute to the countrys economy, citing the success that Brazil has had in properly managing small scale mining.

It stated that small miners should ultimately be able to contribute its 30% of gold output for the country.

PMMC predicted that in 2013 Ghana will see a reduction in gold production YOY as a result of the difficulties faced by the small scale miners.

Ghana is the 2nd largest gold producer in Africa, with gold accounting for 90% it mineral output and mining making up 27% of 2012 tax revenues.

Source: The Africa Report � Guinea has given BSGR a month to respond to a further string of allegations that it paid bribes to secure the right to develop half of the giant Simandou deposit.

A December hearing is unlikely to be definative.

A recent letter from the independent technical committee reviewing mining deals has said that BSGRs responses have not been enough to dismiss the accusations.

Source: Thomson Reuters
Investec Global Natural Resources Research Team: UK Hong Kong South Africa Hunter Hillcoat Tel: +44 (0) 20 7597 5182
Matthew Whittall Tel: +852 3187 5075
Albert Minassian Tel: +27 (0) 21 416 1454
Marc Elliott Tel: +44 (0) 20 7597 5189
Leavitt Pope Tel: +852 3187 5074
Louise Collinge Tel: +44 (0) 20 7597 5779
Investec Global Natural Resources Sales Team: UK Hong Kong South Africa Jamie Campbell Tel: +44 (0) 20 7597 5038
Will Robbins Tel: +852 3187 5098
Hayden Smith Tel: +27 (0) 21 416 1401
USA Thomas Lawrence Tel: +1 212 2595604
Alistair Roberts Tel: +852 3187 5097
Investec Commodity Hedging Team: http://treasury.investec.co.uk/products-and-services/commodities.html UK Callum Macpherson Tel: +44 (0) 20 7597 5070
_____________________________________________________________________ Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales (No.

489604).

Registered office at 2 Gresham St, London EC2V 7QP. Investec Asset Finance Plc is a subsidiary of Investec Bank plc.

Registered in England and Wales (No.

2179313).

Registered office at Reading International Business Park, Reading RG2 6AA. We may monitor e-mail traffic data and the content of email.

Calls may be monitored and recorded. This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed.

If you have received this email in error please notify the sender.

This e-mail is subject to terms available at the following link: www.investec.co.uk/emaildisclaimer.

By communicating electronically with us, you consent to these terms. _____________________________________________________________________ _____________________________________________________________________ This email has been scanned by the Symantec Email Security.cloud service. For more information please visit http://www.symanteccloud.com Private & Confidential / Disclaimer: This document is private and confidential and remains the property of Bell Pottinger.

Its contents may not be copied, forwarded or duplicated in any form or by any means without the permission of Bell Pottinger.

Bell Pottinger is made up of Bell Pottinger Private Limited, a limited company registered in England & Wales with registered number 08024999 and Bell Pottinger LLP, a limited liability partnership registered in England & Wales with registered number OC380478, together with their subsidiaries.

Our registered office is at 6th Floor, Holborn Gate, London WC1V 7QD.

A list of the members of Bell Pottinger LLP is open for inspection at our registered office.