Gold and What Moves it.

They'll go from $340 to $5,400 beginning this month.

The Zambian government announced Friday it is increasing the cost of its mining licences to equal neighbouring countries’ rates and deter speculators from buying land in the country.

Zambia’s mining minister, Yamfwa Mukanga, said fees for large-scale mining will jump from $340 to $5,400 beginning this month, reports Reuters.

The country, which is Africa's top copper producer, made headlines on Wednesday, after revoking the mining license for Collum, a Chinese-owned coal company in the south of the country accused of violations of safety and environmental laws. ...

by Vladimir Basov:

The top 10 gold producing countries mined out 1,799 tonnes of the precious metal which is 2% more than in 2011.

In 2012, the top 10 gold producing countries slightly increased their gold output.

According to the United States Geological Survey (USGS) provisional data, estimated global gold production amounted to 2,659 tonnes in 2012, and was in line with 2011 totals (2,660 tonnes).

With updated data for China, announced by the China Gold Association after the USGS estimates became known, world gold output rose to 2,692 tonnes in 2012, or 1.2% growth compared to 2011. ...

South Africa seeks to extract greater tax revenues from its mining companies as they struggle to deal with rising costs and declining commodities prices.

South Africa seeks to extract greater tax revenues from its mining companies as they struggle to deal with the double burden of rising costs and declining commodities prices.

Bloomberg reports that while the incumbent African National Congress seeks to derive greater fiscal benefit from its mining companies, any measures to raise tax revenues will also risk further hampering a sector already burdened by ballooning costs and weak spot prices for key commodities.

The ANC announced at a conference in December that it would pursue a tax review for the mining sector in lieu of radical proposals to nationalize mines. Talk of a "resource-rent" tax ...

$1,170 vs $773.

The Australian (paywall) reports the actual cost of mining gold is over 50% higher than the cash costs gold producers disclose in financial statements.

Analyst Stephen Thomas of Bell Potter, an Australian brokerage, found that "the average total production cost was $1,170 an ounce, compared with an average reported cash cost of $773 an ounce." ...

A new asteroid-mining company launched Tuesday with the goal of helping humanity expand across the solar system by tapping the vast riches of space rocks.

The new firm, called Deep Space Industries, Inc., announced today (Jan. 22) that it plans to launch a fleet of prospecting spacecraft in 2015, then begin harvesting metals and water from near-Earth asteroidswithin a decade or so. Such work could make it possible to build and refuel spacecraft far above our planet's surface, thus helping our species get a foothold in the final frontier.

Is the bearish sentiment against gold miners warranted?

By Alena Mikhan, Casey Metals Team Researcher, and Andrey Dashkov, Research Analyst

Disenchanted with gold's lackadaisical performance over the last year, some investors are losing interest in the equities that are supposed to provide leverage to the metal's price movements. The press has added fuel to the fire by increasingly attacking gold-mining CEOs for rising production costs and weak stock prices. This has driven some investors to pursue ETFs or other vehicles as a replacement for gold stocks, while others have simply thrown their hands up and left the precious-metals space. Is this overreaction or rational decision-making?

In this article, we set out to objectively evaluate how gold-mining majors have been performing operationally in the current commodity bull market that started roughly at the beginning of 2002. We compare them against the S&P 500 – the mainstream "blue chip" index – to see if gold miners deserve the beating they've received. We also look at what may lie ahead for one of our favorite subsectors of the gold universe. ...

Tianjin China Mining Conference highlights overseas acquisitions rush

A recent mining industry conference held in the northern Chinese coastal city of Tianjin has highlighted the concerted effort amongst the country's miners to snap up gold mines abroad.

Caixin reports that conversations amongst gold mining executives at the recent China Mining Conference were abuzz with the topic of foreign acquisitions, with industry insiders anticipating a sustained rise in bullion prices.

Spearheading the overseas acquisitions drive is Fujian-based gold mining giant Zijin (SEHK:2899), which made its initial foray abroad eight years ago.

According to Zijin's president for international affairs, Li Zhilin, the company currently controls six mines in Russia, Mongolia, Tajikistan and Australia. ...

Marc Howe writes:

South Africa has become the third largest supplier of iron ore to China as rival exporter India struggles to overcome troubles in its mining sector.

Business Day Live reports that exports of iron ore from South Africa to China leapt a stunning 12% to 40.6 million tonnes in 2012 compared to 2011, while Indian exports plunged nearly 55% to 33 million tonnes.

India implemented a strict crackdown on illegal operations in its mining sector last year, stanching overseas sales of iron ore to the immense benefit of international competitors. ...

The group claims the Eritrean government has been using forced labour to construct a gold mine, in a joint venture with Canadian Nevsun Resources Ltd.

International group Human Rights Watch said Tuesdaythe Eritrean government has been using forced labour to construct a gold mine, in a joint venture with Canadian Nevsun Resources Ltd. (TSX: NSU).

According to the report, the Vancouver-based miner failed to ensure that forced labour was not used in the construction of its African Bisha gold project.

The 29-page document, Hear No Evil: Forced Labour and Corporate Responsibility in Eritrea’s Mining Sector, describes how mining companies working in Eritrea risk involvement with the government’s widespread exploitation of forced labour. It also documents how Nevsun – the first company to develop an operational mine in Eritrea – initially failed to take those risks seriously, and then struggled to address allegations of abuse connected to its operations. ...

High exploration costs are to blame.

The Australian Association of Mining and Exploration Companies (AMEC) warned Monday  the future of Western Australia's gold sector is uncertain as high exploration costs hamstring miners.

ABC News reports that several of the state's operating gold mines have declining reserves and lower ore quality as they dig deeper.

January 10 (King World News) - The bull market in gold remains intact.  The metal rose approximately 7.14% in 2012 in U.S. dollar terms and has increased in each of the last 12 years.  Negative real interest rates incentivize capital to move into gold.  

It is difficult to imagine a world of positive real interest rates, absent a significant shift in monetary and fiscal policy in the Western democracies.  Gold and gold shares historically have been positively correlated.  

However, during the past few years, gold mining stocks have underperformed the metal due a host of issues that we have discussed at length, including in our article A Golden Mulligan.  Although the article was published a few years ago, the issues afflicting gold mining stocks mentioned then still hold true. 

Gold mining stock valuations are at the low end of the historical range since the introduction of the gold ETF (GLD) in 2004, or roughly 10% (basis XAU/spot bullion.)  Significant rallies in gold mining shares have occurred in the past few years from this compressed valuation base. 

We see evidence of fundamental change within the gold mining industry, which ...