Westcore Announces Filing of Financial Statements and Coal Asset Write-Down
Westcore Energy Ltd.
April 17, 2014 10:00 PM
CALGARY, ALBERTA–(Marketwired – Apr 17, 2014) – Westcore Energy Ltd. (“Westcore” or the “Copmany”) (TSX VENTURE:WTR) announces the filing of its annual audited financial statements as at and for the year ended December 31, 2013. In connection with such statements, the Company determined that as of December 31, 2013, there were indicators of impairment for its coal Exploration and Evaluation Assets. The indicators of impairment result from the current lack of investor interest in coal companies, downturn in the mining industry in particular, and the Company’s decision to significantly reduce future exploration expenditures until equity market conditions improve. As a result, the Company has recorded an impairment write-off of $7,125,490. After giving effect to this write-off, the Company’s coal assets have been valued at $1,985,676 as at December 31, 2013.
U.S. once again delays decision on Keystone XL pipeline
OTTAWA — The Globe and Mail
Published Friday, Apr. 18 2014, 3:07 PM EDT
Last updated Friday, Apr. 18 2014, 6:27 PM EDT
The Obama administration has once again punted the politically charged decision on the Keystone XL pipeline in a move that will likely delay a final ruling past November’s congressional elections.
The U.S. State Department said Friday it needs to assess the impact of a court battle in Nebraska that could force a change in the pipeline’s route. But the project’s supporters insisted the administration simply didn’t want to make the controversial decision in advance of the November vote. Republican Senator Lisa Murkowski of Alaska called the delay “a stunning act of political cowardice.”
In a conference call with reporters, State Department officials said they had no option but to extend the deadline for government agencies to comment on the anticipated environmental impacts of the Keystone XL project because there is no certainty as to what the actual route will be and what local ecosystems might be impacted.
“We are prudently recognizing that the facts that the agencies need to assess and analyze could change,” said one official, who spoke on condition he not be named. He would offer no estimate as to when a recommendation to the president would be forthcoming.
“We are trying to get a better understanding of what route might be and collecting information regarding the case and any other issues that might effect the final outcome in Nebraska. . . We are moving ahead very diligently with all other aspects of the review that are necessary for the national interest determination.”
TransCanada Corp.’s $5.4-billion pipeline would deliver some 830,000 barrels per day of crude from Canada and the northern United States to a massive refining complex on the U.S. Gulf Coast. The company filed for approval nearly six years ago and has faced several delays, including a requirement to change the pipeline route to avoid a sensitive ecological zone in Nebraska. Landowners won a lower court decision in February that ruled the state’s approval process violated Nebraska’s constitution. That ruling was immediately appealed to the state supreme court, and a final decision is not likely until early 2015.
“We are extremely disappointed and frustrated with yet another delay,” chief executive officer Russ Girling said. He suggested the lack of a Keystone XL would leave U.S. more dependent on “suspect and aggressive foreign leaders” for imported oil.
Keystone XL has become a cause célèbre in U.S. politics, with environmentalists arguing a rejection would demonstrate U.S. leadership on climate change by stifling growth in the oil sands. Proponents cite a State Department analysis that concluded the pipeline would not result in more greenhouse gas emissions because Canadian producers will find other ways to get the crude to market if it was turned down.
Prime Minister Stephen Harper – who once called an approval a “no brainer“ – has expressed frustration over the glacial pace of the administration’s decision-making. His communication’s director, Jason MacDonald, said the government was “disappointed” with the delay.
Canadian ambassador Gary Doer said the State Department should focus on the international crossing between Alberta and Montana and leave it to the state of Nebraska to figure out the precise route there. He noted that Mr. Obama did not block TransCanada’s construction of the southern portion of the Keystone XL pipeline, which runs from Oklahoma to Texas.
“We believe that every day they delay the pipeline approval, they will have less opportunity for employment for blue-collar workers, and more greenhouse gases and more safety risk and higher cost with rail and trucks,” Mr. Doer said in an interview from Washington. A growing amount of Canadian crude is reaching U.S. market by rail, though it has not reached the volumes that Keystone XL would carry to the Gulf Coast.
The pipeline project has supporters among members of both parties in Congress, but many liberal Democrats oppose it. Environmentalists applauded the delay, hoping it will be a prelude to an outright rejection.
“It’s disappointing President Obama doesn’t have the courage to reject Keystone XL right now,” said Jamie Henn, communications director for 350.org, which has rallied opposition to the project. “But this is clearly another win for pipeline opponents. We’re going to keep up the pressure on the president to make the right call and continue to expand our broader fight against the fossil fuel industry.”
Gold price to average $1 225/oz in 2014 – GFMS
By: Natalie Greve
17th April 2014
JOHANNESBURG (miningweekly.com) – Weighing up the factors impacting the gold market this year, 2014 looks set to be a second year of price decline for gold, with precious metals consultancy Thomson Reuters GFMS continuing to forecast an average of $1 225/oz for the year.
The organisation’s Gold Survey 2014 found gold’s core price drivers little changed since the beginning of the global financial crisis, noting that there was consensus that the gold price would continue to decline over the coming months and years.
A continued economic recovery that would see the tapering of the US Federal Reserve’s (Fed’s) “massive” quantitative easing (QE) programme, increases in US treasury yields and equity markets, and a stronger dollar – all of which were negative for gold – were expected to dampen the appetite for gold as an asset class.
This had seen some forecasters predicting that, based on recent correlations, gold would fall below the $1 000/oz level for a sustained period.
“Gold rarely sticks to the script for long; however, our base case view is that, as Western investor support continues to fall away from gold, physical buying will see prices supported,” the report noted.
It added that 2013 had revealed “major” increases in investment-grade jewellery demand, coin and bar purchases around the $1 200/oz level.
“What remains to be seen is whether this was a once-off surge of pent-up demand and pipeline stock build in China, or if these levels of demand, which led to temporary physical shortages of gold, are sustainable,” Thomson Reuters GFMS noted.
Assuming physical demand supported prices, the group expected a trading range in the $1 100/oz to $1 400/oz region dropping from the 2013 yearly average of $1 411/oz.
This came as the first quarter of the year demonstrated a drop off in physical demand above $1 300/oz, although this was somewhat distorted by the weakening of several emerging market currencies in early 2014 and by Indian import restrictions.
The market was yet to adjust to physical demand as a key driver, which could still lead the yellow metal to overshoot on the downside.
“Indeed, a substantial shock to the world market would be needed to see gold return to the price levels of 2011 and 2012. This would either imply a substantial flight to gold as a safe-haven asset or the undermining of confidence to the dollar,” the report noted.
2013 GOLD SUPPLY
Reviewing the movement of the gold market in 2013, Thomson Reuters GFMS found that global mine production posted strong growth in 2013, increasing by almost 6% year-on-year to an all-time high of 3 022 t.
Eight countries posted gains over 10 t, with increases in China, Canada and the Dominican Republic each greater than 20 t last year.
Major additions from projects entering production or ramping up included Pueblo Viejo, in the Dominican Republic, Blissa-Zandkom, in Burkina Faso, Martabe, in Indonesia, Detour Lake, in Canada, and Tucano-Martabe, in Brazil, adding more than 5 t apiece.
“The outcome of such [a] robust gain may seem surprising in the face of the sharp falls in the gold price over the year. However, the delivery of the projects in [the] commissioning phase has progressed.
“It has been a common theme for producers, where flexibility has allowed, to increase throughput rates, [improve the efficiency of] processing plants in pursuit of [better] recovery rates and increase processed grades in an attempt to reduce costs, with only a small number of assets marked for closure,” stated the report.
This strategy by producers to counter escalating costs and preserve margins amid a lower pricing environment led to global average total cash costs remaining essentially flat in 2013 at $767/oz.
Scrap supply in 2013 declined for the fourth year in succession, slumping 22% year-on-year to an estimated 1 280 t, a level last seen in 2007.
According to the report, last year’s 15% drop in the average yearly dollar price was the chief architect for the fall, with all major regions registering “sizeable” declines.
2013 GOLD DEMAND
The total physical demand for gold rose by 15% in 2013, as high jewellery offtake and retail investment countered a drop in industrial demand and was bolstered by net official sector buying.
Jewellery demand grew by a notable 18% in 2013, to a six-year high of 2 361 t, boosted by the lower gold price environment.
Industrial fabrication fell by a modest 2% owing to continued thrifting in the electronics sector, while physical bar investment jumped by 33% to a fresh record of 1 377 t, driven by a surge in demand in key Asian markets, in particular China and India.
Excluding scrap, full-year global demand for gold increased by 34%, reflecting a surge in demand and a notable fall in scrap supply.
“This outcome should not come as a great surprise, given the significant drop in the average gold price, which boosted demand for jewellery in many key consumer markets,” the report noted.
Meanwhile, investment demand remained weak in 2013, with total identifiable investment, which included physical bar investment, all coins and an exchange-traded funds (ETFs) inventory build, falling by 45% to just below 900 t – its lowest level in six years.
The 29% drop in the gold price on an intra-year basis led to an even more material decline in investment demand in value terms, from $88-billion in 2012 to $41-billion last year.
Key to this lacklustre investment demand was investors’ increasingly bearish sentiment towards gold, following weak price performance in late 2012 and growing expectations of the Fed’s QE tapering.
Last year marked the first year of negative outflows of ETFs since the launch of the first major ETF in 2003, while official sector purchases fell by 25% in 2013.
However, at 409 t, this still represented an elevated level compared with historic norms and was largely unaffected by the price slump.
“Underpinning much of the central bank buying is a continued desire to diversify emerging economies’ growing foreign exchange reserves,” noted the report.
Producer dehedging amounted to 48 t last year, a reduction to the outstanding hedge book of some 39% year-on-year.
Despite the “dramatic” falls in the gold price in 2013, the report found that few companies moved to hedge production, with investors remaining opposed to primary gold producers hedging production.
April 17, 2014
Per today’s data, In February 2014, there were 10,780 EI recipients in Saskatchewan – down 1.5% from February 2013. For comparison, there were 14,903 jobs posted on Saskjobs.ca alone on Feb 27., 2014 – thus in February 2014, there were 38% more jobs posted at one website than EI recipients in Saskatchewan. Today there are 15,791 jobs posted at SaskJobs.ca.
In February 2014, the number of recipients dropped in Saskatoon by 1.4% and in Regina by 2.8% from the year prior.
17 Apr 2014
National Post – (Latest Edition)
Financial Post firstname.lastname@example.org
Delays pushing up costs of transporting crude
We used to think cost per diametre inchmile was roughly $100,000
“There’s been a definite rampup, particularly in the last couple of years, in the degree of regulatory oversight and conditions,” said Glenn Booth, principal at Veracity Plus Consulting and a former chief economist with the NEB. “What you see on Northern Gateway is unprecedented.”
A panel of energy and environmental regulators last year placed 209 conditions on the edmonton-tokitimat oil pipeline. Enbridge must set aside nearly $1-billion in liability insurance to cover costs of a possible leak and fund oil-spill research. The company also has pledged to spend an extra $500-million on extra-thick pipe to safeguard against a rupture.
Company officials have warned such measures will contribute to a “significant” cost increase when a more detailed engineering assessment is completed later this year.
Commercial support for the project has not wavered, Janet Holder, Enbridge’s vice-president of western access, said in an interview this week. She said additional costs are being shared with the project’s original funding partners, which include Total SA, Suncor Energy Inc. and Cnooc Ltd.- owned Nexen Inc.
Those companies have yet to sign binding transportation service agreements to send crude on the line, however. They could balk if project costs climb too high, experts say.
By contrast, 13 energy companies have signed contracts in support of a proposed $5.4-billion expansion to Kinder Morgan Inc.’ s rival Trans Mountain pipeline, which would nearly triple oil exports through Vancouver.
In Canada, pipeline tolls are typically negotiated among oil companies then reviewed by the NEB. The fees have taken on new importance amid chronic shortages of space on existing networks. Higher tolls eat into producer revenues, a significant consideration in Alberta’s oil sands, which has some of the highest operating costs globally.
Suncor Energy Inc., Canada’s largest oil company, last year accused Kinder Morgan of trying to extract monopoly profits from shippers by jacking up the price of shipping crude to Canada’s West Coast on its proposed expansion project. Regulators ultimately rejected that view. But they found current pipeline constraints gave the Houston-based pipeline company an edge in negotiating shipping contracts with producers.
Delays are also pushing up the cost of transporting crude. TransCanada Corp., for one, has sunk at least $2-billion maintaining pipe in the field for its contentious Keystone XL project while it awaits a decision from the U.S. government. Company officials have said shippers would be on the hook for a “material” jump in expected costs, over and above the current estimate of $5.4-billion.
Most observers argue such increases pale in comparison to potential gains at the other end of the pipe. Much also depends on how commercial contracts are structured — not all cost increases necessarily flow through to shippers in equal measure, experts say.
Even so, the cost of transportation has jumped in step with volume increases. Last year Canada’s pipeline system transported more than $134-billion worth of energy products, at an estimated transportation cost to producers of $7.1-billion, according to NEB data published this month. In 2008, the last year for which the energy watchdog reviewed such data, pipelines moved $127-billion worth of energy products at a transportation cost of $4.4-billion.
“We used to think cost per diametre inch-mile for the [average] pipeline itself was roughly $100,000, and now we’re seeing closer to $200,000,” said Steven Paget, analyst at firstenergy Capital Corp. in Calgary, using a standard industry measure.
Regulatory costs have also crept up, he said. “It’s not impossible to see costs go to half a billion dollars on a major pipeline before sod is even turned.”
Putin Bank Trail Runs From Communist Cash to Billionaires
By Irina Reznik and Evgenia Pismennaya
Apr 16, 2014 2:00 PM CT
Present and past owners of OAO Bank Rossiya, the only company hit with sanctions for Russia’s takeover of Crimea, include three billionaires, two proteges of a Nobel Laureate and, according to a Spanish prosecutor, one possible mob boss.
Bank Rossiya’s rise from a Communist Party shell company to a conglomerate with $12.6 billion of assets dovetails with President Vladimir Putin’s own ascent to power. At least three of the lender’s early shareholders, including Yury Kovalchuk, who now has 40 percent, and OAO Russian Railways chief Vladimir Yakunin have homes at Putin’s lakeside dacha compound near St. Petersburg. Another stakeholder is one of Putin’s relatives.
“The idea was to deal a blow to Putin’s inner circle,” says Andrei Katkov, a former partner of billionaire oil trader Gennady Timchenko, referring to the U.S. decision to sanction the lender and more than two dozen Russians last month. Katkov, the bank’s chairman from 1998 to 2004, when he owned a 6.4 percent stake that he later sold, wasn’t on the U.S. list.
Putin, 61, opened an account at the bank a day after the U.S. Treasury sanctioned the company and Kovalchuk, who also runs one of Russia’s largest media groups, as well as Timchenko, 61, and Yakunin, 65. Putin said the lender, based near a St. Petersburg palace named in honor of Catherine the Great’s annexation of Crimea in 1783, had nothing to do with his decision to reacquire the Black Sea peninsula.
What Bank Rossiya does have, though, is a relationship with Putin that dates back to 1991, when the former KGB colonel was named head of St. Petersburg’s foreign relations committee, just six months before the collapse of the Soviet Union.
The decline of the command economy was giving way to an era of chaos and opportunity, forcing millions of people to adapt to the emerging form of capitalism. Just as Putin traded espionage for politics, Kovalchuk, 62, and fellow physicist Andrei Fursenko, proteges of future Nobel Prize winner Zhores Alferov, swapped physics for finance.
As research funding dried up, Kovalchuk and Fursenko, now an adviser to Putin, abandoned their scientific careers to try their luck in the free market. With funding from a shoe mogul, they bought Bank Rossiya, a little-used deposit holder for the Communist Party, partly because it had an office in city hall, according to “Young Russia,” a film about the new band of bankers that director Igor Shadkhan shot in 1994 to 1996.
“We didn’t run away from science, it ran away from us,” Viktor Myachin, who joined his fellow physicists in the venture and served as chief executive officer of the bank until 2004, said in an interview. “We did experimental physics, which required equipment and materials we could no longer afford.”
After a coup attempt against Mikhail Gorbachev by hardline Communists failed that summer, it was clear that the party’s grip on power was over, Myachin said. Russia had a new leader in Boris Yeltsin, who decried the plotters from atop a tank turret in central Moscow. Over the next five months, Yeltsin would disband the Soviet Union, free prices, raise taxes and slash spending, sending the economy into a tailspin.
“A shoemaker, a builder, a diplomat and two scientists” is how the Bank Rossiya entrepreneurs are described in “Young Russia.” The builder is Vitaly Savelyev, a former engineer who now runs OAO Aeroflot airlines. The diplomat is Yakunin, the Russian Railways boss who served in the Soviet mission to the United Nations from 1985 to 1991, when he quit the Foreign Ministry to go into business back home in St. Petersburg.
Bank Rossiya and Russian Railways declined to comment for this story. Savelyev, Kovalchuk, Fursenko and Alferov all declined interview requests.
“There was not a single table, no chairs in our office,” Kovalchuk tells Shadkhan in the film. “We were granted a loan and put the money into a small bank with a pretentious name. We had little money and a lot of ambition.”
Kovalchuk also had a lot of support from Putin and his boss, the late Mayor Anatoly Sobchak. A month after hiring him, Sobchak instructed Putin to open an account at Bank Rossiya, just down the hall from his office, according to documents from the city’s archives. That was the first of at least three accounts the city opened with the bank during Putin’s tenure.
One account held as much as 44 million rubles of former Communist Party funds, according to the archives. That was about $76 million at the time, based on the official rate of about 58 kopeks per dollar.
“My husband maintained both business and friendly ties with Kovalchuk,” said Lyudmila Narusova, Sobchak’s widow. “He’s an efficient, professional banker,” Narusova said by phone, adding that she still keeps money in Bank Rossiya.
In 1997, after Sobchak lost his re-election bid to one of his deputies, a challenge Putin later called a “betrayal,” the lender got a new injection of cash when Timchenko and partners bought a 25 percent stake, according to Katkov, Timchenko’s partner then in International Petroleum Products.
Sobchak and Putin, as head of foreign relations, had awarded Timchenko quotas to export oil back in 1993 on the condition that part of his profit be used to import food, according to city documents. Timchenko would go on to start Gunvor Group Ltd., which made him a billionaire.
“We contributed about $3 million to the bank’s authorized capital,” Katkov said by phone. “We needed to diversify our revenue by investing in manufacturing and banking.”
In 1998, the year Yeltsin defaulted on domestic debt and devalued the ruble, tipping the economy back into recession, Bank Rossiya got another new shareholder, Gennady Petrov, a local businessman who owned 2.2 percent of the company until at least the end of 1999, when Yeltsin stepped down in favor of Putin, according to company documents.
A decade later, Petrov was arrested in Spain during an organized-crime sting codenamed Troika and charged with trafficking arms and drugs and smuggling tobacco and cobalt. Spanish authorities in 2009 sent a letter to law-enforcement bodies in Moscow, a copy of which was seen by Bloomberg, asking for help in the case against Petrov, who they accused of running an organized-crime ring.
A Spanish judge, “in a surprise decision,” granted Petrov bail in 2010, the U.S. Embassy in Madrid said in a secret cable published by Wikileaks. He hasn’t been tried.
“Petrov, the chief target of Spain’s Operation Troika, was engaged in a ‘dangerously close’ level of contact with senior Russian officials,” the embassy said, citing Spanish prosecutors. The embassy’s press service declined to comment.
A Spanish lawyer for Petrov, Luis Fernando Granados, said he didn’t know where his client is and declined to comment on the case.
Even with the support of Timchenko, who now controls 7.9 percent of the bank, business didn’t really take off until after Putin became president, according to former Finance Minister Alexei Kudrin, who oversaw the city’s budget under Sobchak. Kudrin said in an interview that he doesn’t remember a single large deal made by the bank in the 1990s.
After Putin was elected in 2000, he vowed to eliminate “as a class” the Yeltsin-era insiders who got rich through their ties to the government. While Putin tightened his grip on power and gained popularity by reining in the oligarchs, oil output and prices surged, triggering an economic expansion that averaged 7 percent a year in his first two terms. That helped lay the groundwork for the emergence of a new class of billionaires, this one with ties to Putin himself, including Arkady Rotenberg, his former judo partner, and Timchenko.
Kovalchuk and Bank Rossiya were no exception. From 2000 through 2003, when OAO Severstal steel billionaire Alexei Mordashov bought an 8.8 percent stake, the lender’s assets surged 13-fold to 6.5 billion rubles ($180 million). Since then, after acquiring state-run OAO Gazprom’s pension fund and insurance arm, the lender’s assets have jumped another 69-fold to 449 billion rubles, making it the 14th largest bank in the country, central bank data show.
Bank Rossiya’s business depends on Gazprom, the former Soviet gas ministry and a minority shareholder in the lender, Standard & Poor’s said last August. Gazprom and the other of Bank Rossiya’s 20 largest depositors account for about 60 percent of the lender’s total liabilities, according to S&P.
In 2012, the bank loaned 319 billion rubles to corporate clients, financial institutions and government entities and just 4 billion rubles to individuals, the ratings company said. This “selective” policy has led to a ratio of non-performing loans to total lending of just 1.8 percent, which is one of the lowest in the country, S&P said.
After the blacklist prompted Visa Inc. and MasterCard Inc. to stop processing its cards, Bank Rossiya said it would create its own payment system. S&P cut its outlook for Bank Rossiya to “negative” from “stable” and then withdrew the BB-/B rating last month to comply with U.S. law.
Mordashov, Severstal’s billionaire CEO, bought Bank Rossiya shares a decade ago to gain “political risk insurance,” according to a banker close to the businessman, asking not to be identified because the information is private.
Being a stakeholder in a bank run by Putin confidants and a relative of the president provides “administrative resources” that are essential to doing business in Russia, the banker said. Mordashov, 48, who now controls 5.9 percent of the lender, declined to comment through his press service.
With Mordashov’s help, Bank Rossiya in 2004 acquired Gazprom’s insurance arm, Sogaz, a bigger company. As part of that deal, Mikhail Shelomov, the son of Putin’s cousin and a Bank Rossiya shareholder, gained 13.5 percent of the insurer, a stake that later fell to 12.5 percent, regulatory filings show. Shelomov couldn’t be reached for comment through Bank Rossiya. He holds 3.8 percent of the lender.
Two years later, Bank Rossiya gained management of Gazprom’s retirement savings, 168 billion rubles at the time, through Sogaz. The pension fund, Gazfond, is run by Yuri Shamalov, son of Nikolai Shamalov, who owns 10.4 percent of the bank and has a house in the same lakeside complex as Putin.
In an open letter to then-President Dmitry Medvedev in 2010 complaining about corruption, St. Petersburg businessman Sergei Kolesnikov said he had been compelled by former partner Nikolai Shamalov to help secretly finance and build a $1 billion palace for Putin on the Black Sea. Putin denied the claim through aides and Shamalov declined to comment.
Before the overthrow of Ukraine’s Kremlin-backed president, Viktor Yanukovych, during deadly riots in February, Sogaz sold the company that managed Gazprom’s pensions. Bank Rossiya then cut its stake in Sogaz to 48.5 percent from a controlling 51 percent one week before the blacklist was announced, effectively curbing the scope of the sanctions.
Now, with Russia locked in its worst conflict with the U.S. since the Cold War, Putin appears to be relying on his old Bank Rossiya ally, Kovalchuk, and other media outlets to help rally the country behind his policies in Ukraine.
Thanks in part to glowing coverage of Putin’s annexation of Crimea from media outlets owned outright or in part by Kovalchuk, Putin’s approval rating has surged to 80 percent, the highest since since 2008, from 65 percent in January, according to Levada Center, an independent polling company.
“Kovalchuk has replaced the Yeltsin-era media oligarchs Vladimir Gusinsky and Boris Berezovsky,” said Stanislav Belkovsky, a former Kremlin adviser who’s now a political analyst in Moscow. “This is a comfortable situation for Putin because he gets an owner that is formally independent from the state while still under the Kremlin’s control.”
Kovalchuk started acquiring media properties after OAO Surgutneftegas, the oil producer run by longtime Putin ally Vladimir Bogdanov, acquired 6.8 percent of Bank Rossiya in 2007.
After Surgutneftegas’s investment in the bank, Kovalchuk created National Media Group to unite the oil company’s media assets with those of Bank Rossiya, Sogaz and Mordashov. He bought the 97-year-old national daily Izvestia from Gazprom and 25 percent of state broadcaster Channel 1 from Chelsea soccer club billionaire Roman Abramovich, as well as 25 percent of U.S.-listed Russian network CTC Media Inc.
Though Kovalchuk was allowed to become a shareholder in Channel 1, the most influential network in the country, Putin doesn’t play favorites when it comes to business, his spokesman, Dmitry Peskov said by phone from Moscow.
“The sanctions against Bank Rossiya are an awkward attempt to single out people allegedly close to Putin,” Peskov said. “Being a friend of Putin is a rather abstract notion,” he said. “Many of Bank Rossiya’s shareholders, including Nikolai Shamalov, have indeed been acquainted with Putin for a long time, but the president has not had a hand in their business. He has not given their business careers a boost.”
Kommersant this week reported that Putin’s government decided to replace Alfa Bank with Bank Rossiya as the single settlement agent for the national wholesale power market.
With annual payments in the market of about 1.3 trillion rubles, or about 2 percent of Russia’s gross domestic product, Bank Rossiya stands to gain more than $110 million a year in fees alone, the newspaper said, citing people familiar with the matter who it didn’t identify. Both banks declined to comment.
To contact the reporters on this story: Irina Reznik in Moscow at email@example.com; Evgenia Pismennaya in Moscow at firstname.lastname@example.org
To contact the editors responsible for this story: Torrey Clark at email@example.com; Hellmuth Tromm at firstname.lastname@example.org Brad Cook
Will BHP try again for PotashCorp? No one will say
By Bloomberg News
April 17, 2014 8:41 AM
The business community continues to mull over speculation that BHP Billiton Ltd. may make another bid for PotashCorp of Saskatchewan Inc.
Tim Tiberio, an analyst at Miller Tabak & Co. LLC, said in a note to clients he was “skeptical” about the timing of speculation of a potential BHP-PotashCorp link-up, given that fertilizer groups are about to enter a seasonally weaker trading period.
The Globe and Mail said in an article that while no deal is underway, BHP is likely to consider the transaction.
PotashCorp spokesman Bill Johnson and BHP spokeswoman Bronwyn Wilkinson both said their respective companies would not comment on a news report.
“We don’t comment on rumours or speculation with regard to potential mergers and acquisition,” said Johnson.
“We don’t comment on rumours or market speculation,” Wilkinson said.
In August 2010, the Anglo-Australian mining giant BHP Billiton attempted a $39-billion hostile takeover of PotashCorp. In November 2010, the federal government announced that it was blocking the BHP bid because the deal was not a “net benefit” for Canada.
A spokesperson for the provincial government said they too would not comment on a speculative article, but added Energy and Resources
Minister Tim McMillan and the government are constantly monitoring the potash industry.
“We are confident Saskatchewan has a great resource and investment climate, as evidenced of the recent investment by K+S and BHP,” the spokesperson said.
© Copyright (c) The Regina Leader-Post
17 Apr 2014
Jansen project to cost less in 2014
BHP Billiton will spend about 25 per cent below its earlier guidance of $800 million during fiscal 2014 on the Jansen potash project east of Saskatoon, according to the world’s largest mining company’s operational review for the nine months ending March 31.
“While the shafts are no longer expected to be completed in the previously defined time frame, this does not affect our US$2.6 billion budget or longer-term development plans,” said Chris Ryder, vice-president of corporate affairs for BHP Billiton Potash.
Shaft excavation at the site resumed in March following a review of the activities completed to date, but the completion of the shafts will likely take longer than BHP first projected.
“With our investment premised on the attractive longer-term market fundamentals for potash, we will continue to modulate the pace of development as we seek to time our entrance to meet market demand, thereby maximizing shareholder returns,” Ryder said.
Work will continue to finish the excavation and lining of the production and service shafts, and to continue the installation of essential surface infrastructure and utilities.
Employment levels at Jansen will depend on what type of work is needed during the different stages of the project.
“As we have said before, it is the nature of project execution that levels of activity — and people — fluctuate,” Ryder said.
“We have seen this at Jansen and expect to continue to see that.”
The review said the overall project at Jansen is now 25 per cent complete.
“We believe that Jansen is the world’s best undeveloped potash resource and is likely to be one of the lowest-cost sources of supply once fully developed,” Ryder said.
“Investment in Jansen could underpin a potential fifth pillar of BHP Billiton, given the opportunity to develop a multi-decade, multimine basin in Saskatchewan.”
Based on current projections for market demand, “the Jansen mine could ramp-up to its design capacity of about 10 million tonnes per annum (Mtpa) in the decade beyond 2020,” the review stated.
17 Apr 2014
Downtown office vacancies jump
Colliers says rate should reach 8%
Saskatoon’s downtown office vacancy rate is expected to hit eight per cent this year, the highest in more than a decade, according to a recent study by Colliers International.
But Tom McClocklin, president and managing director of Colliers International Saskatchewan, said vacancy rates in that range are generally considered to be the point of equilibrium between supply and demand.
“Much of the vacancy that we are seeing is the result of some major office occupiers, like Saskatoon Police Services, Saskatoon Health Region and Affinity Credit Union, relocating to their own facilities or to the suburban markets,” McClocklin said.
For prospective tenants, that could mean more choice of locations and possibly incentives from landlords.
Just a couple of years ago, in 2011, the city’s core had one of the lowest vacancy rates in North America at just over two per cent.
McClocklin said lease rates will likely remain the same (class A, or $22 to $25 net per square foot), but landlords may need to offer incentives like a better budget for lease improvements or free rent while tenants move in.
“When vacancy rates were around two per cent, landlords didn’t need to offer any incentives,” he said.
According to the report, it is unlikely Saskatoon will see new office construction downtown until vacancy rates come down. But McClocklin said there is a lack of large contiguous space, so if a major tenant decides to move to the downtown, that could spur new construction.
And a couple of major tenants have moved downtown — Agra City moved from Innovation Place to the Sask Power building at 320 22nd St. E., and International Women of Saskatoon has leased 5,300 square feet of the former SGI building at 336 5th Ave. N.
While the downtown office market has suffered some loss in occupancy, the suburban market is booming, having added more than 120,000 square feet of new space while also absorbing more than 150,000 square feet over a three-year period.
The majority of the new development has been in the Stonebridge area, which now supports more than 200,000 square feet of office space. The total suburban office market, including Innovation Place, now totals 1.55 million square feet.
McClocklin said the suburban market offers specific advantages to some businesses, including free or subsidized parking and easy access to residential areas.
Recent tenants in the Stonebridge suburban office market include Genivar, leasing 16,000 square feet, and Farm Credit Canada, which relocated to a 9,400-squarefoot space at 510 Wellman Cres.
Overall, McClocklin said the office market is still in good shape.
“In Regina, we saw a significant bump in the vacancy rate there,” he said. “We haven’t seen that in Saskatoon, so I think that is a good sign that there is still good stability in the market.
“We just need a little bit more on the demand side right now.”