Teck cuts Highland copper production forecast June 28, 2009
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Teck Resources Ltd. has cut its 2009 and 2010 copper production estimate from Highland Valley by millions of pounds because of geotechnical issues, the company said Thursday.
The cuts will amount to about 35 million pounds in the second half of 2009 and 115 million pounds in 2010, reducing total production from all sources to less than 700 million pounds in 2009 and 755 million in 2010.
The cut in 2010 is about 13 per cent.
The problems were only identified recently, the company said in a news release. Outside consultants hired to study the issues are expected to report in the fourth quarter.
Teck’s revised forecast for Highland Valley, near Kamloops, B.C., is 258 million pounds. The 2010 production figure is now 187 million pounds.
With copper currently trading at about $2.30 US a pound, the value of the lost production is about $80 million this year and $265 million in 2010.
Highland accounted for about 11 per cent of Teck’s first quarter revenue of $1.71 billion (Cdn).
Teck Class B shares slid 3 cents to $18.47 in TSX trading. It was the only issue in the diversified metals sub-index to drop.
Magna deal for Opel stake could face problems: Russian report June 28, 2009
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Magna International Inc.’s plan to buy part of the European Opel car company with a Russian bank could face problems, executives with the bank said Friday.
Denis Bugrov of Sberbank, which is to take a 35 per cent stake in Opel, said at the bank’s annual meeting that he “did not exclude the possibility” the deal could fail, Russian media reported.
Magna — which is to take 20 per cent of Opel — and Sberbank reportedly have a July 15 deadline to decide whether to continue with the transaction.
It’s a complicated situation:
Opel seller General Motors is expected to keep 35 per cent of the company.Opel workers will get 10 per cent.The German government is lending $2.31 billion to keep the company afloat while it restructures.Bidders, other than Magna-Sberbank, are hovering in the wings.
On Friday, the head of one of those competitors said the Magna-Sberbank deal “is not doing too well.”
Sergio Marchionne, CEO of Fiat, also said the company is still interested in buying Opel. “We have confirmed our interest,” he said.
Magna and Sberbank have a non-binding agreement to buy their stakes in Opel, but the exact relationship between the government-owned bank and the Aurora, Ont.-based auto parts company is not clear.
German Gref, Sberbank’s CEO, said conditions set by the bank and Russia have to be met before the deal can go ahead.
“If the conditions suit us, then we can close this deal,” the RIA-Novosti news agency reported Gref saying.
Executives with both Magna and Sberbank have said it will probably be September before the deal can be signed.
Magna Class B shares fell 96 cents to $46.48 in TSX trading.
With files from The Canadian Press
Auto lending shows signs of improving: economist June 28, 2009
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Auto sales are expected to rise in the second half of this year as conditions in the lending market thaw out, a Scotiabank economist said Thursday.
In the bank’s latest global auto report, senior economist Carlos Gomes said the key to the shift is a rise in the loan-to-value ratio for new U.S. auto loans. It has risen to 89.1 per cent — the highest it has been since August 2008 — from 86.4 per cent in February.
“The increase in the loan-to-value ratio indicates buyers need a smaller down payment to purchase a new vehicle, and points to an easing in credit conditions,” said Gomes.
Scotiabank also said that auto loan approvals have reached their highest point since April of this year.
“Asset-backed security issuance had virtually disappeared through April, while the withdrawal of some major lenders from the auto-loan business over the past year had dampened credit availability,” Gomes said.
“However, the Bank of Canada indicates that auto loans at chartered banks in Canada have remained readily available, providing some offset.”
Another sign of a turnaround in the auto sector is in the prices of used cars, said the bank. In Canada, used car prices — while still below year-ago levels — saw a two per cent drop in May, which was the smallest decrease since mid-2006.
In the United States, used car prices went up for the fifth month in a row in May. Scotiabank said that year-over-year prices last month were up for the first time since October 2007.
Gander aerospace company lays off 120 June 28, 2009
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An aerospace company in central Newfoundland is shedding dozens of jobs as it copes with slumping demand in the global aviation industry.
Although Gander-based Heli-One, a subsidiary of CHC Helicopter Corp., had brokered a deal to share jobs in order to avoid layoffs, it told employees on Wednesday afternoon that it must drop 120 employees.
Only about 40 employees will be left at the plant, which makes parts for helicopters. A worker told CBC News the layoffs start next week and the process could take a couple of weeks to complete.
Canadian Auto Workers representative Bill King said Heli-One’s problems are part and parcel of the downturn in the aerospace industry.
“A vast majority of the work with CHC is Sikorsky, and Sikorsky, of course, is running apparently on a bit of hard times,” he said, referring to the U.S. manufacturer.
The laid-off workers include about 100 unionized employees.
Plant manager Troy Freeborn said that with manufacturers selling fewer aircraft, orders for parts have dropped.
Freeborn said the situation is not permanent, and that the company is looking for other markets. He said it could start rehiring as early as September.
The Newfoundland and Labrador government invested almost $10 million in the company, formerly known as CHC Composites, when it was launched by late helicopter magnate Craig Dobbin in the 1990s. It was sold to a U.S. company last year.
Alberta government extends drilling incentives June 28, 2009
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The Alberta government has announced a one-year extension of two incentive programs introduced last March to help prop up the province’s energy sector during the global economic slowdown.
“Producers need to begin setting budgets for the upcoming drilling season, and we need to provide timely assurance that these programs will be extended,” Energy Minister Mel Knight said Thursday. Both programs were set to expire in March 2010.
This extension provides the certainty needed for oil and gas producers to plan new drilling programs, Knight said.
“Additional drilling results in new, ongoing royalty revenues for the province, keeps businesses going and people employed,” he said.
The new well incentive program will be extended. It offers a maximum five-per cent royalty rate for the first year of production from new oil or gas wells.
The drilling royalty credit for qualifying wells will also be extended. That program provides a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from 2008.
“This extension responds to market challenges facing oil and gas exploration in Alberta,” Knight said.
A review of Alberta’s overall competitiveness in the energy sector will be completed by fall, the energy minister said.
Auto lending shows signs of improving: economist June 25, 2009
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Auto sales are expected to rise in the second half of this year as conditions in the lending market thaw out, a Scotiabank economist said Thursday.
In the bank’s latest global auto report, senior economist Carlos Gomes said the key to the shift is a rise in the loan-to-value ratio for new U.S. auto loans. It has risen to 89.1 per cent — the highest it has been since August 2008 — from 86.4 per cent in February.
“The increase in the loan-to-value ratio indicates buyers need a smaller down payment to purchase a new vehicle, and points to an easing in credit conditions,” said Gomes.
Scotiabank also said that auto loan approvals have reached their highest point since April of this year.
“Asset-backed security issuance had virtually disappeared through April, while the withdrawal of some major lenders from the auto-loan business over the past year had dampened credit availability,” Gomes said.
“However, the Bank of Canada indicates that auto loans at chartered banks in Canada have remained readily available, providing some offset.”
Another sign of a turnaround in the auto sector is in the prices of used cars, said the bank. In Canada, used car prices — while still below year-ago levels — saw a two per cent drop in May, which was the smallest decrease since mid-2006.
In the United States, used car prices went up for the fifth month in a row in May. Scotiabank said that year-over-year prices last month were up for the first time since October 2007.
Gander aerospace company lays off 120 June 25, 2009
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An aerospace company in central Newfoundland is shedding dozens of jobs as it copes with slumping demand in the global aviation industry.
Although Gander-based Heli-One, a subsidiary of CHC Helicopter Corp., had brokered a deal to share jobs in order to avoid layoffs, it told employees on Wednesday afternoon that it must drop 120 employees.
Only about 40 employees will be left at the plant, which makes parts for helicopters. A worker told CBC News the layoffs start next week and the process could take a couple of weeks to complete.
Canadian Auto Workers representative Bill King said Heli-One’s problems are part and parcel of the downturn in the aerospace industry.
“A vast majority of the work with CHC is Sikorsky, and Sikorsky, of course, is running apparently on a bit of hard times,” he said, referring to the U.S. manufacturer.
The laid-off workers include about 100 unionized employees.
Plant manager Troy Freeborn said that with manufacturers selling fewer aircraft, orders for parts have dropped.
Freeborn said the situation is not permanent, and that the company is looking for other markets. He said it could start rehiring as early as September.
The Newfoundland and Labrador government invested almost $10 million in the company, formerly known as CHC Composites, when it was launched by late helicopter magnate Craig Dobbin in the 1990s. It was sold to a U.S. company last year.
Alberta government extends drilling incentives June 25, 2009
Posted by businessnewss in businessnewss.wordpress.com.Tags: Alberta, Drilling, extends, Government, Incentives
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The Alberta government has announced a one-year extension of two incentive programs introduced last March to help prop up the province’s energy sector during the global economic slowdown.
“Producers need to begin setting budgets for the upcoming drilling season, and we need to provide timely assurance that these programs will be extended,” Energy Minister Mel Knight said Thursday. Both programs were set to expire in March 2010.
This extension provides the certainty needed for oil and gas producers to plan new drilling programs, Knight said.
“Additional drilling results in new, ongoing royalty revenues for the province, keeps businesses going and people employed,” he said.
The new well incentive program will be extended. It offers a maximum five-per cent royalty rate for the first year of production from new oil or gas wells.
The drilling royalty credit for qualifying wells will also be extended. That program provides a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from 2008.
“This extension responds to market challenges facing oil and gas exploration in Alberta,” Knight said.
A review of Alberta’s overall competitiveness in the energy sector will be completed by fall, the energy minister said.
Markets surge on bullish U.S. statistic June 24, 2009
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The TSX over the past month
North American markets roared ahead Wednesday morning after the U.S. government reported that orders for durable goods were much stronger in May than expected.
The statistic is a key indicator of business investment and a bullish signal.
Toronto received an extra boost as shares in Addax Petroleum surged on news that a Chinese company was buying Addax for $8.27 billion.
The S&P/TSX composite index was up 223 points at 10,121 in noon trading.
All the TSX sub-indexes were up, with energy and diversified metals posting the biggest percentage gains.
In New York, the Dow Jones industrial index was up 71 points to 8,394, and the Nasdaq index had gained 38 points to 1,803.
The U.S. Commerce Department said Wednesday that demand for durable goods rose 1.8 per cent last month, far better than the 0.6 per cent decline that economists expected. It also matched the rise in April, with both months posting the best performance since December 2007, when the recession began.
The stock market’s gains Wednesday reclaimed some of the ground lost Monday, when Toronto fell 453 points, dragged down by falling commodity prices and a World Bank report warning that the international economy will shrink further this year than the bank forecast in March.
“Look, there are no fundamentals to this market — it’s all trading on sentiment,” said John Stephenson, portfolio manager at First Asset Funds Inc.
With files from The Canadian Press
