There are a few white Knights listed in this article!

Metals Oversupply

The influx of private equity follows criticism of mining executives for swamping the world with an oversupply of raw materials from copper to coal. Almost a year ago, Ivan Glasenberg, the billionaire coal trader turned CEO of Glencore Xstrata, said his CEO peers had “screwed up” up through years of over-investing in mines that eroded prices and profits.

“There is a general hope that deal flow from these private-equity houses will start to be seen in the second half of this year,” Alexander Keepin, global co-head of mining at Berwin Leighton Paisner LLP in London, said in an interview.

So, we have a situation where “over-investing in mines”, have caused mining companies to cut cost, sell non-profitable mines.

What I believe we could see then, in the not so distant future now, is allot of existing mining companies know that only the riches, largest resources will be profitable. So, they will sell all the border line mines, to new investors & let then struggle keeping a float. While they tune-a-round & buy the riches, lower production cost mines. Work them to put the borderline mines out of business, & buy them back in the next down turn.

The ROF is just the ticket to put their money into hard assets. Control the market by offering the higher quality metals at cost effective operating costs, putting the border line mines out of business. While preparing for inevitable USA dollar crash. When it happens, their investment will be backed by gold, silver, copper & all the high quality base metals the ROF holds.

When you think about it. We will sell when the stocks run. Get our paper “I-O-U” money. Watch as the USA falters & then buy gold & silver to burry in our back yards, because if it is left in the bank it will be worthless.

If you were the owner on a rich mine, you may just cut out all the work & leave it in the ground, wait to sell high & buy low…. It seems to be safest in the ground?

Have a great day,

Hebe