[cid:image001.png@01CE8132.ECC5B190] Monday, 15 July 2013 [cid:image006.jpg@01CE8132.ED0AD0E0]
Snapshot � Company news highlights: Rio Tinto sells two French Al plants, New World Resources business update, Hummingbird Resources update, Discovery Metals best quarterly, Angang Steel profit warning, Tawana Resources exploration update � Commodity review highlights: Australian port workers strike, China cancels plans to build uranium processing plant, gold prices hold onto gains, gold M&A transactions still taking place by Alamos Gold, Goldmans and JP Morgan may sell metal warehouse businesses. � Other Economic News: China Q2 growth, Chinese power consumption up 6.3% in June, Vietnam plans to stabilise currency through gold market restrictions � African Resources Update: Ethiopia to submit offer to WTO, Political issues in Egypt continue � FTSE futures up 20.5 points.

European markets set to open in positive territory this morning off the back of in line Chinese GDP data.

Whilst Q2 industrial production and investment growth was weaker, YoY GDP remained at 7.5%, in line with expectation, whilst industrial production actually grew in June by 8.9% annualised, albeit below the 9.1% expected.

In the US, a big week of data should keep markets on their toes, retail sales, industrial production, housing starts, consumer prices and comments from Bernanke when he testifies before the House Financial Services committee. � Commodities - Gold +0.17% (US$1,287.92), Silver flat (US$19.9373), platinum +0.58% (US$1,415.00), Copper -0.38% (US$3.143/lb), iron ore +1.28% (US$126.80/t), nickel +1.04% (SU$13,705/t), zinc +0.07 (US$1,869.25), WTI +0.21% (US$106.16/bbl), Brent +0.12% (US$108.94/bbl). � Economic data due today: US - empire manufacturing (forecast 5.00), advance retail sales (forecast 0.8%), business inventories (forecast 0.00%).
Company News � Rio Tinto (RIO LN) divests of two French aluminium Plants.

German aluminium group, Trimet, is to acquire a 65% interest, with French utility, Electricite de France (EDF FP), to buy the remaining 35%.

The price of the transaction has not been disclosed.

The companies have committed to invest EUR200m to modernise the facilities, which RIO had threatened to shut down.

The factories were once part of Pechiney, which was bought Alcan in 2003, which was taken over by RIO in 2007.

Source: DJ, AFR Investec view: The sale follows RIOs ongoing strategy of divesting of non-core assets.

In setting his target price for RIO, our analyst does not apply any value to RIOs aluminium business.

So any proceeds at all on this divestment would be a positive.

On the same track, we note that Barrick Gold (ABX US) has stepped up its campaign to divest of its Australian assets, with Barnicoat in a formal sales process, while it is reportedly in discussions to sell its 51% stake in East Kundana � New World Resources (NWR LN) business update.

NWR has updated the market on its business portfolio optimisation programme, stating that the divestment of its Paskov mine seems unlikely at the moment.

The group is evaluating other scenarios, including a temporary or permanent shutdown of the mine.

Source: Company. � Hummingbird Resources (HUM LN) update on consultants to advance feasibility work with MDM as lead consultant, SRK as Resource consultant and Coffee Mining to run geotechnical studies.

Front end engineering and design to be carried out alongside DFS for completion by end Q3 2014.

Drilling results from infill drilling programme also flags up some reasonable intercepts and grades.

Source: Company � Discovery Metals (DML AU) quarterly highlights production of 5kt Cu and 213koz Ag in its best quarterly to date with production of copper and silver up 20% and 15% qoq respectively.

Cash costs in the period were down 11% qoq to 345c/lb, and in June were 310c/lb.

At the end of the period DML had A$21.2m in cash and total interest bearing debt of US$153.9m.

Discussions continue with interested parties over a possible take-over.

Source: Company � Angang Steel (347 HK) positive profit warning.

Angang announced that under PRC accounting standards it expects to report a profit of approximately CNY702m for 1H13 versus a loss of CNY1.97bn in 1H12.

Source: Company Investec view: Angang has attributed its return to profitability to increased sales activities, adjusting the product mix, reduced procurement costs and reduced input costs through the optimisation of coal and iron ore blends. � Tawana Resources (TAW AU): further high-grade discovery at Mofe Creek iron ore project.

TAW has announced discovery of +45% Fe, outcropping itabirite mineralisation at the Zaway prospect, located within the 100% owned Mofe Creek Project.

In addition, the discovery includes boulder float of +65% Fe DSO magnetite at the base of the outcrops.

In conjunction with the recently announced metallurgical outcomes, todays announcement provides further encouragement to the potential discovery of "Bomi Hills" style blind DSO at the Project.

Source: Company
[cid:image007.png@01CE8132.ED0AD0E0] Commodities News � Australian port workers to hold week of rolling strikes.

Workers at Newcastle port, the worlds largest thermal coal facility, are planning to commence another round of rolling strikes next week, in response to proposed changes to their employment contract.

Strikes have occurred intermittently since May, coinciding with a lull in thermal coal demand, meaning any potential impact on export volumes has been minimal.

Source: Mining Weekly � China has cancelled plans to build its largest uranium processing plant in response to protests.

The plant was to be built in the heart of the Pearl River delta in Guangdong.

The plant had been expected to cost US$6bn and was designed to produce 1,000tpa of uranium by 2020, and was intended to supply the 60-70GW of nuclear power planned by 2020 from the current 12.6GW level.

China currently produces 800tpa of uranium.

Source: Mining Weekly � Gold prices hold onto gains this morning, although market commentary remains cautious with reports of a further correction back toward US$1100/oz.

Source: Bloomberg � Alamos Gold (AGI CN) takeover of Esperanza Resources (EPZ CN) for US$69.4m in a sign that despite weak market conditions, M&A transactions in the gold space remain possible.

Esperanzas open pit gold project holds 1.5moz Au M&I as well as 16moz Ag and would produce 100kozpa at all in cash costs below US$900/oz.

Source: Mining Weekly � Goldmans, JPMorgan, mull metal warehouse business sales: FT.

JPMorgan is reportedly following a move by Goldman Sachs to explore sales of its metal warehouse business.

A proposed rule change by the London Metal Exchange (LME) to relieve bottlenecks that slow metal delivery out of warehouses could cut into profits for the metal warehouse industry, the FT said.

Source: MineWeb
Other economic news � China 2Q GDP growth 7.5% YoY, in line with estimates.

Chinas GDP grew 7.5% YoY in 2Q13 according to Chinas National Bureau of Statistics, in line with the Bloomberg consensus estimate of 7.5% and slightly down from the 7.7% YoY growth in 1Q13.

Fixed asset investment grew 20.1% YoY in 1H13, down from 21.0% in 1H12.

Source: Bloomberg � Chinas power consumption up 6.3% in June.

Chinas electricity consumption increased 6.3% in June to 438bn kwh.

The State Electricity Regulatory Commission had said that power demand may increase by 9% in 2013.

Source: WSJ � Vietnam plans to stabilise currency through tighter controls on gold sales.

An estimated 400t of gold sits in private hands.

The central bank has made itself the sole importer of gold and legal producer of gold bars.

It has also banned banks from paying interest on gold deposits, and instead now charges fees on holding gold.

India has been another country trying to reduce individuals demand for gold in an effort to stabilise currencies.

Source: Bloomberg
African Resources update � Ethiopia to submit offer to WTO concerning access to services such as banking and telecommunications as part of a decade long process to join the WTO.

The countrys GDP has grown at an average of 9.1%pa over the past 10 years and plans to join the WTO by mid-2015.

Source: Bloomberg � Political issues in Egypt continue.

Egypts Muslim Brotherhood called for a mass rally today to demand the reinstatement of President Mohamed Mursi after he was deposed on 3 July.

Meanwhile, the US Deputy Secretary of State is due to hold talks with the new military-backed government later today.

Source: Bloomberg, BBC
Investec Global Natural Resources Research Team: UK Australia Hong Kong South Africa Hunter Hillcoat Tel: +44 (0) 20 7597 5182
Tim Gerrard Tel: +61 (0) 2 9293 2168
Matthew Whittall Tel: +852 3187 5075
Albert Minassian Tel: +27 (0) 21 416 1454
Marc Elliott Tel: +44 (0) 20 7597 5189
Colin McLelland Tel: +61 (0) 2 9293 2140
Leavitt Pope Tel: +852 3187 5074
Louise Collinge Tel: +44 (0) 20 7597 5779
Simon Haggarty Tel: +61 (0) 2 9293 2462
Investec Global Natural Resources Sales Team: UK Australia Hong Kong South Africa Jamie Campbell Tel: +44 (0) 20 7597 5038
Rod Clarkson Tel: +61 (0) 2 9293 2278
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Alistair Roberts Tel: +852 3187 5097
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