The decision on the Anti-Corruption Court in Ukraine will significantly affect the stability of investment projects

The Verkhovna Rada, Ukraine's parliament, will vote for the law on the High Anti-Corruption Court this week. The decision of the parliamentarians on the implementation of the High Anti-Corruption Court will have two scenarios for the economy: either the country will be in a state of default if the decision is not supported, or will receive the next tranche of the IMF and the favor of the internati...

The Verkhovna Rada, Ukraine's parliament, will vote for the law on the High Anti-Corruption Court this week. The decision of the parliamentarians on the implementation of the High Anti-Corruption Court will have two scenarios for the economy: either the country will be in a state of default if the decision is not supported, or will receive the next tranche of the IMF and the favor of the international community.

The IMF has demanded to create an anti-corruption court, which will include independent experts approved by international organizations, as a condition for further lending to Ukraine and implementation of the reform program. It is expected that the law will be voted on Thursday, June 7.

If Ukraine fails to launch the Anti-Corruption Court and will not implement the IMF program, it will face serious economic consequences and outflow of foreign investment.

"The point is not even at risk of a collapse of the national currency, which everyone fears of and which preserves stability at the expense of Ukrainian workers. More scaring are populist statements that IMF money does not affect the exchange rate and that the default is not so terrible. In fact, this is not true. And the example of our company can say that the impact is very painful, - said Andrіі Smolin, the Head of Ukrainian representative office of Avellana Gold Ltd.

“The fact is that no long-term investment project can do without a leverage, which can range from 30 to 90% of the project's investment. First of all, it is about purchasing equipment through export credit agencies, which may simply not give out insurance, referring to growing credit risks. Or even with insurance, credit limits on Ukrainian banks can be reduced or closed. Moreover, this solution is not a directive, and there will be no one to complain to, as a risk manager of a foreign bank deems it necessary to optimize their credit risks geographically. And he will be right and will receive his deserved award at the end of the quarter, while a dozen investment projects in Ukraine will be frozen for several years. And those investors who were ready to provide share capital without a leverage will simply switch to other projects, the prices on the Commodity market will pass their peak and it will be impossible to return them, "- said Andrii Smolin.

“Such complicated logic will be difficult to explain to people in Transcarpathia who simply want to receive new jobs and salaries. Therefore, we sincerely hope that the authorities are well aware of it”.

Re-estimation of Reserves of Natural Resources Every 5 Years Should Be Cancelled

The Cabinet of Ministers of Ukraine discussed Draft Resolution on cancellation of the requirement for re-estimation of natural resources reserves every 5 years. The American Chamber of Commerce in Ukraine emphasized on the necessity to cancel this requirement, since it leads to additional financial and bureaucratic burden on production companies. Moreover, re-estimation of reserves of natural r...

The Cabinet of Ministers of Ukraine discussed Draft Resolution on cancellation of the requirement for re-estimation of natural resources reserves every 5 years.

The American Chamber of Commerce in Ukraine emphasized on the necessity to cancel this requirement, since it leads to additional financial and bureaucratic burden on production companies. Moreover, re-estimation of reserves of natural resources increases the production cost of subsoil exploitation, blocking new investments in upstream sector.

The Cabinet of Ministers of Ukraine supported the offer to cancel the requirement for re-estimation of natural resources reserves every 5 years.

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Zinc Price Outlook – 2018

Analysts predict another great year for zinc, which reached multi-year highs in 2017. In 2016, zinc was the best-performing LME metal, jumping more than 64% in 12 months. In 2017, zinc continued to climb, but at a slower pace: it’s gained over 21% since January. Zinc’s highest point of the year came in October ($3,369.50). Supply worries and a strong Chinese demand outlook supported the base m...

Analysts predict another great year for zinc, which reached multi-year highs in 2017.

In 2016, zinc was the best-performing LME metal, jumping more than 64% in 12 months. In 2017, zinc continued to climb, but at a slower pace: it’s gained over 21% since January.
Zinc’s highest point of the year came in October ($3,369.50). Supply worries and a strong Chinese demand outlook supported the base metal’s rapid price rally. The lowest point of the year for zinc came in June ($2,435). A stronger US dollar and risk aversion due to geopolitical tensions turned investors away from the base metal.

One of the key zinc trends this year has been the depletion of zinc stocks built up over the past 10 years; they have run out due to mine closures and cutbacks.

According to CRU Group, that led to a deeper refined zinc metal deficit and to a drawdown in global stocks. For his part, Junior Stock Review founder Brian Leni said that while he was expecting higher zinc prices in 2017, that didn’t translate into gains for the junior zinc stocks as he had estimated.

Supply and demand dynamics

According to the International Lead and Zinc Study Group, global refined zinc metal production is forecast to fall by 1.4 percent this year, to 13.53 million tonnes. However, next year the group predicts an increase of 3.9 percent, to 14.06 million tonnes.

That said, CRU Group analysts expect around 775,000 tonnes of new zinc mine supply to come onstream next year, with MMG’s Dugald River mine and Vedanta’s Gamsberg mine being notable contributors to production.

Despite those additions, CRU Group analysts believe global zinc stocks will continue to be rapidly drawn down in the first half of 2018, although this depletion will slow down in the second half of the year.

Similarly, CRU Group analysts expect Chinese zinc demand to grow next year, but at a slower rate. High prices will also begin to constrain demand growth next year in China and elsewhere. Outside of China, Li expects demand in the US and Europe to increase next year as industrial activities in both economies continue to gather pace.
With all that in mind, analysts forecast that the refined zinc market will remain in deficit in 2018. CRU Group estimates that the deficit will moderate from this year’s 750,000 tonnes to around 200,000 tonnes.

Key factors to watch

As the new year starts, investors should keep an eye on several catalysts that could impact the zinc market. CRU Group analysts mentioned Glencore’s mine output and the price-related response of Chinese mine supply as major factors that could potentially impact the market. Similarly, investors are suggested that watch winter capacity cuts in China, which depend on pollution levels and how local governments carry out the winter cuts. Looking ahead, zinc prices are on track to climb even higher in 2018 than they were this year. Experts said, on an annual average, basis zinc prices could rise to $3,154 in 2018.

Leni also remains very bullish on zinc, and expects the metal to continue to head toward $2 per pound, supported by falling global inventories, Chinese mine closures and stable steel market demand. For investors interested in zinc stocks, there are many zinc-focused companies to keep an eye on next year: e.g. Adventus Zinc, Solitario Zinc, Tinka Resources and Vendetta Mining.

However, investors should know that in a rising zinc price environment, many junior companies will boast a focus or exposure to zinc. More than ever, it will be paramount to do your due diligence.

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SMM Zinc Price Forecast for 2018

SHANGHAI, Oct. 27 (SMM) – Zinc price will remain strong in early 2018 but fall slightly in the latter half of the year as supply and demand are expected to be balanced, SMM predicts. LME 3-month zinc will move between $2,450-3,500 per tonne in 2018. SHFE zinc should fluctuate between 20,500-29,700 yuan per tonne.

SHANGHAI, Oct. 27 (SMM) – Zinc price will remain strong in early 2018 but fall slightly in the latter half of the year as supply and demand are expected to be balanced, SMM predicts.

LME 3-month zinc will move between $2,450-3,500 per tonne in 2018. SHFE zinc should fluctuate between 20,500-29,700 yuan per tonne.

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New Zinc Battery Breakthrough Could Compete with Lithium-Ion Batteries

Lithium has been the dominant battery material for some time, but it's an imperfect one. Such batteries are not without disadvantages. The cobalt and lithium used in them aren’t particularly abundant and there is a risk of fire or explosion because lithium batteries contain a flammable organic electrolyte. In an effort to resolve these issues, scientists have been conducting research to find a dif...

Lithium has been the dominant battery material for some time, but it's an imperfect one. Such batteries are not without disadvantages. The cobalt and lithium used in them aren’t particularly abundant and there is a risk of fire or explosion because lithium batteries contain a flammable organic electrolyte. In an effort to resolve these issues, scientists have been conducting research to find a different element that could replace lithium. One of them is zinc, because it has had the most advances in testing.

Zinc has been used in most standard alkaline batteries as an anode. While zinc is fairly abundant, it unfortunately doesn’t perform so well as a rechargeable battery—though it is fairly safe as it uses a water-based electrolyte compared to the flammable organic electrolytes in lithium batteries. Zinc battery anodes are commonly created by adhering zinc particles together. If the battery goes through multiple periods of recharging, it will typically start forming a coat of zinc oxide, which is less effective at conducting and encases some of the zinc. Dendrites can form due to the difference in charge distribution and, due to this, the battery poses a risk of short circuiting as these dendrites can perforate the anode barrier.

But now a group of researchers from the United States Naval Research Laboratory has potentially created a safe version of a zinc battery that can suppress the formation of zinc dendrites.

The dendrite formation issue was resolved by redesigning the zinc electrode. The initial problem resulting in dendrite formation was due to the behavior of zinc during cycling. The zinc electrodes are typically made by binding together and drying zinc emulsions to create a powder, which lacks the surface area and capability to distribute charge uniformly enough to prevent dendrite formation.

The redesign came in the form of a 3-D sponge-like structure that is capable of distributing charge uniformly during charge cycles.

The redesigned battery was tested in combination with a nickel electrode and yielded some promising results. The researchers demonstrated the battery by charging and discharging a 12-volt version more than 50,000 times, all the while retaining its porous architecture.

On top of the remarkable charge cycle results, the researcher did some math and showed that the battery was capable of holding more charge, was lighter, and smaller than a typical lead-acid battery. Additional calculations were made showing that the battery could even potentially outperform Li-ion batteries in electric cars in terms of space and weight.

The researchers are currently focused on zinc configuration and further development as the zinc batteries are less expensive to produce than our current lithium-ion batteries containing cobalt.

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