Hello RI subscribers, we’re going to be sending out a brief weekly update about what we are seeing in the news.
We know you already have enough going on during the week, and don’t want to bog down your brain any more before heading into the weekend. So, we promise to keep it short and sweet with only a few lines of commentary surrounding each piece.
Here is what we found exciting this week and some thoughts it stirred up.
This is an interesting development and could imply that much of the “easy” gold is being mined in areas that would not otherwise be legal or acceptable in the West, such as parts of Africa, Venezuela, and North Korea. The gold is real, but it is not ethically sourced, and if it has entered the market through gold laundering, then it is already accounted for in the financial system. This only creates more scarcity in the earth’s crust.
Saudi Arabia is currently abiding by its agreement to cut oil production, Nigeria and Iraq, on the other hand, have boosted production by 80,000 BPD and 60,000 BPD respectively. This may not mean much for the price of oil right now, but it could have significant implications. Historically, The Kingdom does not like to lose market share and if they see other OPEC nations as a threat, expect changes to come.
Maybe instead of spending time and money trying to force already environmentally conscious developed nations into further “green new deals“, the West should turn the focus externally. As billions rise out of poverty globally, their appetite to consume hydrocarbons is going to increase dramatically. How are we going to solve this issue? If we, as a human race, don’t find a solution then mother nature may.
As these trade wars heat up, keep an eye out for where the new allegiances will be built or if many countries look to further exploit their own resources. The US has already started to exploit some of its own rare earth deposits.
This last bit is old news but warrants a few comments. We know it is not interesting to hear that RCF, one of the largest mining Private Equity firms, raised a new fund. It is intriguing to note that they only raised $540.5 million out of the $2 billion target. While I never wish ill on anyone or their business, this really just goes to show you how starved this market is for capital.
Have a wonderful weekend.
The Resource Insider team