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UPDATE 3-Toronto stocks give up early gains to end flat

Reuters: [2008-05-14 23:04:00]

(Adds details, quotes)

*Index trims gains to close little changed

*Soft resource shares offset stronger in financials

*Royal Bank of Canada rises after says will take writedown

By Leah Schnurr

TORONTO, May 14 (Reuters) - The Toronto Stock Exchange's main index gave up nearly all its gains on Wednesday, as weak resources undermined a rally by financial issues after Royal Bank of Canada <RY.TO> said it would take a smaller second-quarter writedown than had been expected.

Miners were among the companies that led the retreat, including Inmet Mining <IMN.TO>, as the start date of its Las Cruces copper project was put in doubt after Spain's water authority suspended a water permit. Inmet gave up C$9.49, or 12.3 percent, at C$67.50.

The financial sector pushed higher, with shares of Royal up C$1.23, or 2.5 percent, at C$49.85 after Canada's largest bank said it will see a pretax writedown of C$855 million amid liquidity pressures on its assets.

"There's so many rumors floating around on what (banks') exposures are," said Sal Masionis, stockbroker at Brant Securities. "So obviously it's quite nice to have a rally."

The S&P/TSX composite index <.GSPTSE> closed up 9.61 points, or 0.07 percent, at 14,626.31 with half of the 10 main sectors higher.

The banking group, which has been battered by global losses and writedowns stemming from the credit crunch and deteriorating U.S. housing market, rose 1 percent.

The sector had earlier helped the benchmark jump to a record high of 14,737.18, surpassing the 14,695.75 mark that was reached on Monday.

Canadian Imperial Bank of Commerce <CM.TO> added 76 Canadian cents, or 1 percent, to C$74.01, and Toronto-Dominion Bank <TD.TO> rose 57 Canadian cents, or 0.9 percent, to C$67.57.

Gold producers fell 1.7 percent, while the price of bullion slid slightly. Agnico-Eagle Mines <AEM.TO> was down C$1.50, or 2.3 percent, at C$63.91, while the broader materials sector was off 0.9 percent.

"I would suggest on an intermediate trend, it looks like gold wants to rally," said Andrew Martyn, portfolio manager at Davis-Rea.

"So I think from an entry point of view, gold is looking extremely good, and you've got some quality stocks that have traded off here."

The small health care sector was down 1.1 percent, while Cardiome Pharma <COM.TO> lost 37 Canadian cents, or 3.8 percent, to C$9.30.

The industrials sector put on 1.3 percent, helped by a gain in plane and train maker Bombardier <BBDb.TO>, which was up 20 Canadian cents, or 3.1 percent, at C$6.67.

Economic data out of the United States had helped set an upbeat tone earlier in the day after consumer prices rose less than expected last month, which calmed fears of inflation.

Market volume was 405 million shares worth C$7.5 billion. Decliners outpaced advancers 817 to 776. The blue chip S&P/TSX 60 index <.TSE60> eked out a gain of 0.82 point, or 0.09 percent, at 871.59.

In New York, stocks were heartened by the tame inflation data, as well as stronger than expected results from retailers Macy's <M.N> and mortgage company Freddie Mac <FRE.N>.

The Dow Jones industrial average <.DJI> closed up 66.20 points, or 0.52 percent, at 12,898.38, while the Nasdaq composite index <.IXIC> inched up 1.58 points, or 0.06 percent, at 2,496.70. ($1=$1.00 Canadian) (Editing by Rob Wilson) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))

Keywords: MARKETS CANADA STOCKS

. Keywords: MARKETS CANADA STOCKS

UPDATE 2-Weak resources take gains out of Toronto stocks

Reuters: [2008-05-14 22:38:00]

(Updates official closing numbers, adds details, quotes)

*Index trims gains to close little changed

*Soft resource shares offset gains in financials

*Royal Bank of Canada rises after says will take writedown

TORONTO, May 14 (Reuters) - The Toronto Stock Exchange's main index gave up nearly all its gains on Wednesday, as weak resources undermined a rally by financial issues after Royal Bank of Canada <RY.TO> said it would take a smaller second-quarter writedown than had been expected.

Miners were among the companies that led the retreat, including Inmet Mining <IMN.TO>, as the start date of its Las Cruces copper project was put in doubt after Spain's water authority suspended a water permit. Inmet gave up C$9.49, or 12.3 percent, at C$67.50.

The financial sector pushed higher, with shares of Royal up C$1.23, or 2.5 percent, at C$49.85 after Canada's largest bank said it will see a pretax writedown of C$855 million amid liquidity pressures on its assets. "There's so many rumors floating around on what (banks') exposures are," said Sal Masionis, stockbroker at Brant Securities. "So obviously it's quite nice to have a rally."

The S&P/TSX composite index <.GSPTSE> closed up 9.61 points, or 0.07 percent, at 14,626.31 with half of the 10 main sectors higher.

The banking group, which has been battered by global losses and writedowns stemming from the credit crunch and deteriorating U.S. housing market, rose 1 percent.

The sector had earlier helped the benchmark jump to a record high of 14,737.18, surpassing the 14,695.75 mark that was reached on Monday.

Canadian Imperial Bank of Commerce <CM.TO> added 76 Canadian cents, or 1 percent, to C$74.01, and Toronto-Dominion Bank <TD.TO> rose 57 Canadian cents, or 0.9 percent, to C$67.57.

Gold producers fell 1.7 percent, while the price of bullion slid slightly. Agnico-Eagle Mines <AEM.TO> was down C$1.50, or 2.3 percent, at C$63.91, while the broader materials sector was off 0.9 percent.

Economic data out of the United States had helped set an upbeat tone earlier in the day after consumer prices rose less than expected last month, which calmed fears of inflation. ($1=$1.00 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))

Keywords: MARKETS CANADA STOCKS

S.Africa rand recovers vs dlr, stocks advance

Reuters: [2008-05-14 18:04:00]

JOHANNESBURG, May 14 (Reuters) - South Africa's rand slid against the dollar earlier on Wednesday before recouping some of its losses on the back of gains in global stocks which also buoyed the domestic equities market.

The JSE Securities Exchange's blue chip Top-40 index <.JTOPI> gained 1.34 percent at 30,402.99 points, while the broader All-Share index <.JALSH> climbed 1.21 percent to 32,387.01 points.

At 1540 GMT the rand <ZAR=D3> traded 0.53 percent weaker at 7.6250 versus the dollar, after closing at 7.5850 on Tuesday. The rand pulled back from a session low of 7.6915 touched earlier after the release of weak domestic retail sales data which pointed to a slowdown in economic growth.

"The rand was weakening with everything else earlier but has recovered a little bit and I think it's related to the recovery in the global equity market sentiment," said Lucy Bethell, a currency strategist at the Royal Bank of Scotland.

"Initially risk appetite was weak, we saw some profit-taking ... and the rand was caught up in that. Now in the afternoon we've had some reasonable data and equities have rallied. The rand is not back at where it was at the start of the day but it's recovered a little bit," she said.

Construction and engineering group Murray & Roberts Holdings Ltd <MURJ.J> starred on the local bourse, jumping 6.55 percent to 87.90 rand.

"We're seeing the Dow Jones market up quite nicely again ... that's pushed our market up," Ferdi Heyneke, portfolio manager at Afrifocus Securities said.

Traders said Murray and Roberts was also lifted by news that its project order book had increased to 44 billion rand at March 31, 2008 and its contract order book was up 16 percent in the third quarter, alomst 100 percent up since June 30, 2007.

Commodity stocks were also higher, with the world's biggest producer of platinum, Anglo Platinum <AMSJ.J>, up 4.88 percent to 1311 rand while bourse heavyweight BHP Billiton <BILJ.J> rose 4.49 percent to 314.50 rand.

Its shares also surged to a record high in London, fuelled by speculation that a state-controlled Chinese firm was building a stake in the world's biggest mining company.

"The strength in Billiton ... is clearly leading the market," Alex Murray, portfolio manager at Anglorand Securities said.

Kumba Iron Ore <KIOJ,J> was the biggest loser amongst the blue chips, falling 3 percent to 315 rand, while investment bank and asset management group Investec <INPJ.J> dropped 1.77 percent to 54.32 rand.

"The banks are just struggling to get going ... there's still a bit of worry around interest rate hikes," Heyneke said.

Government bond yields held firm in the aftermath of hawkish comments from Central Bank Governor Tito Mboweni on Wednesday that he favoured further monetary policy tightening in a continued battle against inflation.

The yield on the heavily traded 2010 bond <ZAR153=BZ>jumped 13.5 basis points to 10.525 percent while that for the 2015 note <ZAR157=BZ> rose by a more sedate 3.5 basis points to 9.525 perccent. (Reporting by Stella Mapenzauswa and Serena Chaudhry; Editing by David Christian-Edwards) ((stella.mapenzauswa@thomsonreuters.com; +27 11 775 3161; Reuters Messaging: stella.mapenzauswa.reuters.com@reuters.net))

Keywords: MARKETS SAFRICA/CLOSE

FACTBOX-Mining in the Democratic Republic of Congo

Reuters: [2008-05-14 13:41:00]

May 14 (Reuters) - Power shortages threaten to slow mining development in Congo and drive up project costs in one of the world's richest copper and cobalt regions. [ID:nL14775869]

Here are details of some of the main projects in Democratic Republic of Congo and the companies running them.

ANGLO AMERICAN <AAL.L> <AGLJ.J>

The world's fourth biggest mining group by market capitalisation has opened offices in the capital Kinshasa as well as the city of Lubumbashi in the country's copper belt.

Anglo will be exploring in Congo and at least seven other African nations to look for large base metals deposits. Chief Executive Cynthia Carroll said in February the company would jack up its exploration budget on the continent by 30 percent this year.

AFRICO RESOURCES <ARL.TO>

Canadian company Africo is seeking to develop the Kalukundi copper-cobalt project, but its ownership of the project has been disputed by Akam Mining.

In September, the firm said Congo's justice minister supported its ownership position and in November the IFC, the World Bank's private sector investment arm, said it planned to buy C$4 million in Africo shares to help finance the project.

ANGLOGOLD ASHANTI <ANGJ.J>

The world's third-biggest gold producer has been drilling for gold at Mongbwalu in northeastern Ituri since 2005.

AngloGold said in February that it had completed a conceptual economic study for the deposit, which has an initial inferred resource of 2.9 million ounces of gold.

ANVIL MINING <AVM.TO> <AVM.AX>

Anvil has majority stakes in three mines in Katanga province that produce copper and silver -- Kinsevere, Dikulushi and Kulu.

Anvil produced 47,633 tonnes of copper and a record 2.45 million ounces of silver in DRC in 2007.

Its 2008 production forecast for silver is almost half that, at 1.3 million ounces, though copper output is seen at 55,000 tonnes. The company has previously said it aims to increase output to 100,000 tonnes of copper by 2010.

BANRO CORPORATION <BAA.TO>

Toronto-listed Banro has four gold properties comprising 13 exploitation permits in the South Kivu and Maniema provinces.

Measured and indicated resources across the Twangiza, Kamituga, Lugushwa and Nomaya properties total 4.81 million ounces of gold.

BHP BILLITON <BLT.L><BHP.AX>

BHP, the world's largest diversified miner, is exploring for copper and diamonds in Congo.

Last year, it also said it was in the "early stages" of looking at an aluminium smelter project in the country.

CENTRAL AFRICAN MINING AND EXPLORATION CO (CAMEC) <CFM.L>

CAMEC restarted work in February at the Mukondo Mountain project, which it says is the richest cobalt mine in the world, after halting it in early 2007. CAMEC aims for initial output of 400 tonnes of cobalt per month, rising to 1,000 per month by end of the year.

In March, CAMEC said it had reached a deal to give state-run mining group Gecamines a 30 percent stake in the mine, retaining the remaining 70 percent.

The company targeted production of 40,000 tonnes copper and 6,000 tonnes cobalt from its Luita processing plant in the year to end-March 2008, rising to 100,000 tonnes of copper and 12,000 tonnes cobalt by the end of that year.

CHEMAF

The privately-owned Congolese company which owns the licence for the Etoile mine, estimated to hold 682,041 tonnes of copper and 108,951 tonnes of cobalt, and the yet unworked Makala deposit.

It also controls the Kananga concession in joint venture with state miner Gecamines and has said it wants to begin industrial mining operations at the Makala and Kananga mines.

It owns a cobalt processing plant in Lubumbashi and also plans a facility to produce copper cathode.

CHINA SUN GROUP <CSGH.OB>

The China Sun Group, formerly known as Capital Resource Funding Corp, signed a contract last year to buy the prospecting and mining rights to a cobalt mine in Lubumbashi.

It signed the deal through its subsidiary Dalian Xinyang High-Tech Development (DLX), one of the largest Chinese cobalt producers.

DLX will own 80 percent of the mined cobalt and Shengbao Group will own the remainder. DLX plans to launch construction of a processing plant in early 2008 to produce finished cobalt products from raw ore on-site, the firm said.

COPPER RESOURCES CORP <CRC.L>

Copper Resources holds a 75 percent stake in the three MMK deposits, which together contain an estimated 5.3 billion lbs of copper. South African Metorex <MTXJ.J> owns 45.6 percent of CRC.

The Kinsenda and Musoshi mines were first mined from 1968, but were abandoned and are flooded. A bankable feasibility study estimated that the Kinsenda project would cost $93 million in financing. Lubembe is a greenfields exploration property.

FIRST QUANTUM <FM.TO><FQM.L>

The company said in January it expects its new Frontier copper mine, which launched operations late in 2007, to produce 84,000 tonnes in 2008.

First Quantum plans to start production from its Kolwezi copper-cobalt tailings project in Katanga in early 2010 with initial output of 35,000 tonnes of copper and 7,000 tonnes of cobalt per year for capital expenditure of $593 million, rising later to 70,000 tonnes of copper and 14,000 tonnes of cobalt a year.

FREEPORT MCMORAN COPPER & GOLD <FCX.N>

Freeport acquired a 57.75 percent stake in the Tenke Fungurume copper and cobalt project, one of the world's largest, when it bought Phelps Dodge for $25.9 billion in 2007.

Lundin said in April the capital cost estimates had almost doubled to $1.75 billion from previous estimate of $900 million, made in October 2007.

Initial production of 115,000 tonnes of copper and 8,000 tonnes of cobalt per year is targeted to start in the second half of 2009, rising to 400,000 T copper and 30,000 T cobalt by 2015.

KATANGA MINING <KAT.TO>

Katanga agreed a friendly deal in November 2007 worth over $2.0 billion to buy rival Nikanor to create Africa's biggest copper producer by 2011, combining copper/cobalt projects the two firms had been developing in the same area of the copperbelt near the town of Kolwezi.

The combined company has revised down its projected output to "over 300,000 tonnes of refined copper and over 30,000 tonnes of cobalt" a year from initial targets of 400,000 tonnes of copper and 40,000 tonnes of cobalt.

LUNDIN MINING <LUN.TO>

Lundin owns a 24.75 percent stake in the Tenke Fungurume copper-cobalt deposit in the DRC, majority-owned by Freeport McMoRan.

METOREX <MTXJ.J>

Johannesburg-listed Metorex has an 80 percent stake in Ruashi Mining, which has the rights to process the ore stockpiles on the Ruashi and Etoile mines, and the right to exploit the Ruashi orebody. Gecamines owns 20 percent of the company.

Metorex said in April that the Ruashi II project had produced its first copper on March 31, and ramp-up was expected to take place in the 10 months from April 1. Capacity is 45,000 tonnes of copper and 3,500 tonnes of cobalt.

Metorex also has a 45.6 percent stake in Copper Resources Corp, which has projects in the DRC.

MOTO GOLDMINES <MGL.TO><MGLq.L>

The firm is seeking to develop the Moto gold project in a joint venture with Congo's state-owned gold company OKIMO, which has a 30 percent stake in the project and holds the mineral rights.

The project has indicated mineral resources of 10.3 million ounces of gold and a definitive feasibility study was completed in December 2007, which the firm said demonstrated the project's long life.

Moto said in February the government has requested a renegotiation of its mining contracts and that it would hold discussions with OKIMO.

MWANA AFRICA <MWA.L>

London-listed Mwana, formerly African Gold, owns 80 percent of Kilo Moto, an exploration licence for gold in the northeast of the country.

Last year, it took over Gravity Diamonds, which is exploring a large diamond concession in Kasai province.

In 2006, it bought Umicore <ACUMt.BR> subsidiary Sibeka, owner of a 20 percent stake in DRC diamond miner MIBA, which produces an average of 6 million carats of diamonds per year.

It also owns the Katanga copper concessions, which is subject to a joint venture exploration option agreement with Anglo American <AAL.L>.

OM GROUP <OMG.N>

U.S. based speciality chemicals maker OM Group is majority owner of the Big Hill cobalt smelter in Lubumbashi. After smelting in the Congo, cobalt is sent to OMG's refinery in Kokkola, Finland. Other partners in the smelter are Gecamines and George Forrest Group.

TEAL EXPLORATION AND MINING <TL.TO> <TELJ.J>

Teal is operating the Kalumines copper and cobalt mine, of which it has a 60 percent stake. In February it said the mine was targeting 24,500 tonnes per year of contained copper.

The firm plans a feasibility study late in 2008 to boost output to 40,000 tonnes a year. It also has a furnace that produces 5,000 tonnes a year of blister copper.

(Sources: Reuters, company websites, stock exchange announcements)

(Reporting by Eric Onstad and Daniel Magnowski in London and Joe Bavier in Kinshasa; editing by Chris Johnson) ((eric.onstad@reuters.com; +44 20 7542 7093; Reuters Messaging: eric.onstad.reuters.com@reuters.net))

Keywords: CONGO DEMOCRATIC MINING

Keywords: CONGO DEMOCRATIC MINING

Keywords: CONGO DEMOCRATIC MINING

UPDATE 2-S.African power supply still tight-Eskom

Reuters: [2008-05-14 13:41:00]

(Adds bank loan details, background, further comments)

By Paul Simao

JOHANNESBURG, May 14 (Reuters) - State-owned power utility Eskom warned South Africans on Wednesday to expect more power outages but said disruptions would likely be minor.

Eskom, which produces about 95 percent of South Africa's electricity, has rationed power through a process known as load-shedding since January in response to a supply crisis that has scared investors and clouded the economic outlook.

Mines, one of the cornerstones of South Africa's economy, have had their electricity supply reduced, and millions of homes and businesses are regularly plunged into darkness.

"The system is still tight and vulnerable," Eskom spokesman Andrew Etzinger said in a presentation outlining strategies before the start of winter, when electricity use tends to peak.

"I would fully expect that there will be days when our system will not be able to meet demand. There will be days of load-shedding," Etzinger said. Eskom expected disruptions to its system to be "minor" during the period.

He noted the utility was moving ahead with construction of coal-fired power stations as part of a $45.6 billion infrastructure expansion programme. There are also plans to build nuclear power plants.

The African Development Bank (AfDB) announced on Wednesday it had lent $500 million to Eskom to help fund the expansion, which is regarded as critical to ensuring South Africa's economy continues to grow.

"The bank's loan is intended to assist the government in achieving the GDP growth target of 6 percent per annum from 2010," AfDB said in its 2007 annual report, which was released at a conference in the Mozambican capital Maputo.

PRICE HIKE FURY

As part of its efforts to fund the infrastructure programme, Eskom has requested a revised 53 percent increase in electricity tariffs for 2008/2009. It had received approval for a 14.2 percent increase for the year.

The ruling African National Congress and its leftist allies have opposed the request. Critics argue the poor and workers will be unable to afford electricity.

Etzinger said Eskom was open to discussing its price hike proposal at an energy summit later this week and there were other "scenarios" on the table. But he stressed the utility needed to be financially stable.

Eskom's senior management has played down hopes the utility could increase its electricity reserves quickly and say reducing consumption is the only quick fix for the crisis.

Eskom has blamed its problems on a combination of factors, including the failure of the government to invest in electricity generating plants, maintenance problems at its existing facilities and wet weather that affected coal supplies.

All the utility's power generating stations have at least 11 days of coal supplies, Etzinger said.

Nationwide power cuts in January forced large gold and platinum mines to shut down operations for five days, pushing precious metal prices higher. The mines are now operating at 90 to 95 percent of their normal electricity supply.

Some observers worried the soccer World Cup, which South Africa hosts in 2010, could be affected despite official reassurances stadiums will have generators for the tournament. (Additional reporting by Wendell Roelf in Maputo; editing by Robert Woodward) ((paul.simao@thomsonreuters.com; +27 11 775 3152; Reuters Messaging: paul.simao.reuters.com@reuters.net))

Keywords: SAFRICA ESKOM/

Next: ANALYSIS-Power shortages could stifle Congo mines