Savannah to speed up Portugal lithium project, dismisses doubts over price and demand
The company will accelerate its lithium mine project to ensure first commercial output in 2027.
None of mining’s top companies escaped the carnage on Thursday after a survey of manufacturing in China showed the sector contracted in March.
Investment bank HSBC’s preliminary Purchasing Manager’s Index (PMI) dropped to 48.1 from 49.6 in February, the fifth straight monthly decline. A reading below 50 indicates shrinking activity.
“Growth momentum could slow down further amid a combination of sluggish export new orders and softening domestic demand. This calls for further easing steps,” Qu Hongbin, HSBC’s chief economist for China said in a statement.
China, the world’s second largest economy, dominates the global trade in iron ore (representing 60% world trade) and base metals including copper (38%), coal (47%), nickel (36%), lead (44%) and zinc (41%).
By early afternoon on Thursday in New York, BHP Billiton’s ADRs were down 2.6%, bringing losses at the number one miner over the last three trading days to 6.7% representing more than $10 billion in lost value. BHP was ranked the 6th most valuable corporation across all sectors in 2011 with a market worth above $200 billion.
Stock in Brazil’s Vale and Australia-based Rio Tinto, number two and three diversified resources companies, were also pushed down. Rio Tinto lost 3.9% on Thursday and now trades a whopping 8% lower than at the start of the week. Vale shed 2.4% on Thursday. Both Vale and Rio are worth more than $100 billion.
$51 billion Anglo-American lost 2.3% in New York, while Swiss-based met coal giant Xstrata were 3.7% cheaper in New York after its London-listed shares closed down 3%. Swiss commodities trading giant Glencore, currently locked in talks about a possible takeover of Xstrata, gave up 2.9%
The manufacturing activity numbers were the latest in a string of bad news from China.
On Tuesday, billions were hacked off the globe’s biggest mining companies on comments by BHP Billiton over weakening demand for iron ore from the Middle Kingdom.
Earlier this month trade data from China showed a deficit that was the largest in 12 years and the country’s GDP growth is expected to fall to an 8-year low.
China recorded GDP growth of 9.2% in 2011 and annual growth has averaged 10.4% since 2001, peaking in 2007 at 13%, but the latest government target calls for economic expansion of 7.5% this year.
Comments
Bill Jackson
People think this is bad, but it is not. Growth in the base of China makes 7.5% this year larger than 10% 5 years ago in absolute terms. We need to get used to these smaller annual % growth numbers and be encouraged by the larger volumes.