News Archive

WA royalty foiled again

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South32 makes its parent blush

Children are expected to be more successful than their parents, if only because the alternative would mean perpetual decline into oblivion. Yet, when a child succeeds outrageously such as BHP (AU:BHP) spinoff South32 (AU:S32) it can become embarrassing.

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The Real Deal

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Mkango receives Chimimbe Hill licence

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Bitcoin tops $10,000, marks 10-fold increase in 2017

NEW YORK (Reuters) – Virtual currency bitcoin soared to an all-time high above $10,000 on Wednesday on major exchanges and digital currency indexes, including the widely followed Luxembourg-based trading platform BitStamp.

At 0600 GMT, it was quoted around $10,115 on BitStamp, coming sharply off a high of $10,743.61 BTC=BTSP, which was a rise of more than 5 percent on the day.

Created in 2009, bitcoin uses encryption and a blockchain database that enables the fast and anonymous transfer of funds outside of a traditional centralized payment system.

It has increased more than 10-fold in value so far this year, posting the largest gain of all asset classes, amid increased institutional demand for crypto-currencies as financial and mainstream use has expanded.

But skeptics say it a classic speculative bubble with no relation to real financial market activity or the economy, most famously JPMorgan boss Jamie Dimon who labeled it a fraud.

Bitcoin crossed $10,000 on smaller exchanges such as the CEX.IO exchange, and the crypto-currency index long before it hit the milestone on BitStamp.

“The price rise is a continuation of a long-term trend which has been driven by the speculative activity in Japan and also with institutional investors dipping their toes into the cryptocurrency market,” said Thomas Glucksmann, head of marketing at Hong Kong exchange Gatecoin.

“The recent surge is just part of that additional element of excitement amongst speculative traders and a growing contingent of liquid traders that have a long-term optimistic view on … this technology.” (

Sol Lederer, blockchain director at U.S. technology company LOOMIA, said this surge will help long-time bitcoiners finally feel vindicated that their currency, which had been ridiculed for years, was at last being taken seriously.

“Bitcoin’s future is still uncertain; it faces the same serious technical challenges it has for years and faces stiff competition from newer, more sophisticated blockchains. But even if it were to crash, it’s apparent that bitcoin is here to stay.”

In some emerging markets, bitcoin had hit well over $10,000 previously. In Zimbabwe, bitcoin traded at $17,875 on Monday. Tuesday’s price in Zimbabwe was not available.

In South Korean exchanges, bitcoin was already close to $11,000 or higher early this week.

It traded at nearly $12,000 on Tuesday on bithumb after hitting the $10,000 milestone on Monday. At Coinone, it traded at near $12,700, and it was up 10 percent in 24 hours at $12,792 on Korbit.

Bitcoin has been boosted as exchanges such as the CME Group Inc (CME.O) and the Chicago Board Options Exchange announced plans to launch futures contracts for the currency.

“I’m sure there will be a few dips over the next weeks and months as the cryptocurrency market is quite illiquid so there’s bound to be volatility,” Gatecoin’s Glucksmann said.

Mike Novogratz, a former macro hedge fund manager at Fortress Investment Group, said in a Reuters Investment Summit earlier this month that mainstream institutional investors were about six to eight months from adopting bitcoin.

But many leading bankers, including Credit Suisse Chief Executive Tidjane Thiam, have expressed scepticism about bitcoin.

“From what we can identify, the only reason today to buy or sell Bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble,” Thiam said earlier this month.

Additional reporting by Marius Zaharia in HONG KONG and Vidya Ranganathan in SINGAPORE; Editing by Rosalba O’Brien and Kim Coghill

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Exclusive: Daimler turns down Geely offer to take up to 5 percent stake via new share issue

HONG KONG/BEIJING (Reuters) – Daimler AG (DAIGn.DE) has rebuffed an offer from China’s Geely to take a stake of up to 5 percent via a discounted share placement due to long-held reluctance to see existing shareholdings diluted, people with knowledge of the discussions said.

A stake of that size would be worth as much as $4.5 billion at market prices.

The two automakers met in Beijing in recent weeks at Geely’s behest. There, the Chinese firm, formally known as Zhejiang Geely Holding Group [GEELY.UL], offered to take a stake of between 3 percent and 5 percent if Daimler would issue new shares at a discount, the people said.

The German group declined the offer but told Geely, which also owns Swedish car maker Volvo, it was welcome to buy shares in the open market, they said. It was not immediately clear if Geely is interested in that option.

People with knowledge of Geely’s thinking said the company’s plans for a tie-up with Daimler included establishing a joint venture to produce electric cars and that it was hopeful it could still secure a deal in some form over the coming weeks.

A spokesman for Geely declined to comment. A spokesman for Daimler said the company was “very happy with our shareholder structure at present” but added that it would welcome new investors with a long-term interest in the company.

A stake of 5 per cent would establish the Chinese group as Daimler’s third-largest shareholder behind the Kuwait Investment Authority and BlackRock, who hold 6.8 percent and 6 percent respectively, according to Reuters data.

Daimler has a long-established joint venture with Chinese carmaker BAIC Motor Corp (1958.HK), which its spokesman described as “our most important partner in China.” This month it announced plans to invest at least 5 billion yuan ($757 million) in electric battery and vehicle production with BAIC in China. It also has another tie-up with BYD, a Chinese automaker backed by Warren Buffett.

Reporting by Julie Zhu and Norihiko Shirouzu; Additional reporting by Edward Taylor in Frankfurt; Writing by Jennifer Hughes; Editing by Edwina Gibbs

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Build fast, fix later: speed hurts quality at Tesla, some workers say

SAN FRANCISCO (Reuters) – After Tesla’s Model S sedans and Model X SUVs roll off the company’s Fremont, California assembly line, the electric vehicles usually make another stop – for repairs, nine current and former employees have told Reuters.

The luxury cars regularly require fixes before they can leave the factory, according to the workers. Quality checks have routinely revealed defects in more than 90 percent of Model S and Model X vehicles inspected after assembly, these individuals said, citing figures from Tesla’s internal tracking system as recently as October. Some of these people told Reuters of seeing problems as far back as 2012.

Tesla Inc (TSLA.O) said its quality control process is unusually rigorous, designed to flag and correct the tiniest imperfections. It declined to provide post-assembly defect rates to Reuters or comment on those cited by employees.

The world’s most efficient automakers, such as Toyota (7203.T), average post-manufacturing fixes on fewer than 10 percent of their cars, according to industry experts. Getting quality right during initial assembly is crucial, they said, because repairs waste time and money.

At Tesla “so much goes into rework after the car is done … that’s where their money is being spent,” a former Tesla supervisor said.

The Silicon Valley automaker said the majority of its post-assembly defects are minor and resolved in a matter of minutes.

Tesla has enthralled consumers with sleek designs, clean technology and legendary acceleration on its pricey cars. A Consumer Reports survey found 91 percent of Tesla owners would buy again.

Still, the magazine and market researcher J.D. Power have dinged the company on quality, citing troubles such as faulty door handles and body panel gaps. Bernstein analyst A.M. (Toni) Sacconaghi, Jr. test-drove one of the company’s new Model 3 sedans earlier this month, writing that the fit and finish were “relatively poor.” Tesla owners have complained on web forums of annoying rattles, buggy software and poor seals that allow rainwater to seep into the interior or trunk.

Auto industry experts say the company’s survival now depends on its ability to crank out high-quality cars in volume as it begins to build its first mass-market car, the Model 3, which starts at $35,000.

Tesla has never turned an annual profit and is burning through $1 billion a quarter. That is unsustainable without fresh cash or a big increase in sales to mainstream customers who may prove less forgiving of potential defects.

“We’ve never doubted Tesla’s ability to make exciting products with top specifications, but there’s a difference between unveiling something and then actually making it perfectly in large volume. Tesla has not perfected the latter yet,” Morningstar analyst David Whiston wrote earlier this month.

Musk has vowed Tesla would become “the best manufacturer on Earth,” helped by a new, highly automated assembly line and a simpler design for the Model 3. However, production woes have slowed deliveries of the much-anticipated sedan.

Snags are normal with any new launch. But chronic defects with Tesla’s established Models S and X show a company still struggling to master basic manufacturing, workers said.

Known as “kickbacks” within Tesla, these vehicles have glitches as minor as dents and scratches to more complex troubles such as malfunctioning seats. Easy fixes are made swiftly on the factory floor, workers said.

Trickier cases head to one of Tesla’s outdoor parking lots to await repair. The backlog in one of those two lots, dubbed the “yard,” has exceeded 2,000 vehicles at times, workers told Reuters.

Tesla denied to Reuters that such “repair lots” exist.

Reuters interviewed nine current and former Tesla employees, including a former senior manager, with experience in assembly, quality control and repairs on Model S and Model X. All requested anonymity because the company required them to sign non-disclosure agreements. Four of the people were fired for cause, including two last month as part of a mass dismissal of hundreds of workers for what Tesla said was poor performance. Sacked workers who spoke with Reuters denied they were poor performers.

People with knowledge of Tesla’s internal quality data shared those figures with Reuters. The news agency was unable to confirm the information independently.

Defects included “doors not closing, material trim, missing parts, all kinds of stuff. Loose objects, water leaks, you name it,” another former supervisor said. “We’ve been building a Model S since 2012. How do we still have water leaks?”

For a graphic on Tesla’s losses, click:


Tesla disputed workers’ portrayal of the automaker as struggling to produce defect-free vehicles. A spokesperson described a rigorous process that requires all cars to pass more than 500 inspections and tests. Any reworking of cars after assembly reflects the company’s commitment to quality, the spokesperson said.

“Our goal is to produce perfect cars for every customer,” Tesla said in a statement. “Therefore, we review every vehicle for even the smallest refinement. Most customers would never notice the work that is done post production, but we care about even a fraction of a millimeter body gap difference or a slight paint gloss texture. We then feed these improvements back to production in a pursuit of perfection.”

Employees who worked on Model S and Model X described pressure to keep the assembly line moving, even when problems emerged. Some told of batches of cars being sent through with parts missing – windshields in one case, bumpers in another – because there were none on hand. The understanding, they said, was that these and other flaws would be fixed later.

Quality inspectors would sometimes find more defects than those reported by workers in the internal tracking system when a car came off the line. “We’d see two issues, that’s pretty good. But then we’d dig in and there would be like 15 or 20,” one person said.

One persistently tricky area was alignment, where body parts had to be “muscled,” in the words of the senior manager, to a certain degree of flushness. Not every team follows the same rule book, workers said, resulting in gaps of different size.

Tesla denied that its quality control is inconsistent and said its “extensive” process for locating and fixing errors was “very successful.”

Some workers traced the challenges to Musk’s determination to launch vehicles faster than the industry norm by shortening the design process, skipping some pre-production testing, then making improvements on the fly. Such improvisation leads to high repair rates, employees said.

For a March report called “Beyond the Hype,” J.D. Power found creaks, scratches and poor door alignment on new Model S and Model X vehicles, issues it blamed on the company’s lack of manufacturing experience. The overall quality of Tesla vehicles, it concluded, was “not competitive” within the luxury segment, lacking “precision and attention to detail.”

Such sloppiness is a rarity in luxury brands such as Mercedes-Benz (DAIGn.DE) and BMW (BMWG.DE), said Kathleen Rizk, director of global automotive consulting at J.D. Power.

“Those companies have been manufacturing forever,” she said. “They have stopgaps.”

Tesla said its high customer satisfaction proves it is building the “safest and best-performing cars available today.”

Reporting By Alexandria Sage; Editing by Peter Henderson and Marla Dickerson

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Markets more positive

Among gold equities, Australian-based miner St Barbara (AU:SBM) barely changed as it held its AGM – its stock remains near a one-year high.

In North America, Goldcorp (CN:G) closed down more than 1% while Newmont Mining (US:NEM) was up slightly in New York.

Southern Silver in sight of silver giants

Southern Silver in sight of silver giants

St Barbara: 'Ain't seen nothing yet'

St Barbara: ‘Ain’t seen nothing yet’

RESOURCEStocks QA: Thundelarra's Tony Lofthouse

RESOURCEStocks QA: Thundelarra’s Tony Lofthouse

Vic Gold sets the pace in Yukon

Vic Gold sets the pace in Yukon

Most market indices around the globe moved higher in the past 24 hours, with the SP500 higher and the FTSE 100 up more than 1% but the SP/TSX Composite Index closed slightly lower.

In Australia, the benchmark SP/ASX200 managed to surge back over the 6,000-point benchmark, helped by star performer Galaxy Resources (AU:GXY) gaining 8.64%.

The lithium miner shot up on news of signing long-term offtake agreements with multiple customers for 100% of its planned lithium concentrate production from Mt Cattlin from 2018, starting at higher headline pricing than in 2017.

Other lithium stocks also gained, with Pilbara Minerals (AU:PLS) rising more than 5% and Altura Mining up 2.5%.

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Shareholders agree to Columbus spin-out

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