GLG News by Metallurgical Coal Experts

Gene PlavnikPresidentHeat Technologies Inc

Oil and Gas Exploration - It Is Not So Bad, After All

December 10, 2008

Analysis of:ABB Wins Offshore Contracts Worth $150M | www.oilandgasonline.com

1. There is global economic slowdown. 2. During the growth period a very strong equipment upgrade push/momentum was created. 3. This momentum eventually will be reduced, but it may take a while.

Thomas ShewskiOwnerHigh Energy Services

New Coal Demand from New Coal Plants Coming Online in 2009

December 8, 2008

Analysis of:Sector Snap: Coal Sector Falls on Weak Demand | money.cnn.com

    Despite U.S coal demand forecasted to be down in 2009 for thermal and metallurgical exports, new coal plants coming online will require incremental coal demand.

Thomas ShewskiOwnerHigh Energy Services

Fuel Switching from Coal- to Natural Gas-Fired Electricity Generation

December 8, 2008

Analysis of:Oil Price Drop Forces Big Energy to Retreat | www.time.com

    Current natural gas prices of approximately $6.00/MMBtu allow electricity generation on natural gas to be more economic compared to coal in certain areas of the U.S.  This is further favored by the time of the year.

Thomas ShewskiOwnerHigh Energy Services

U.S. Thermal Coal Exports for 2009

December 8, 2008

Analysis of:U.S. Coal Export Boom Over for Now | www.guardian.co.uk

U.S thermal coal exports will be down in 2009 versus 2008 since the U.S.’s coal is no longer competitive into Europe and other world locations.

Thomas ShewskiOwnerHigh Energy Services

CSX Tariff Rate for Export Steam Coal to Rise January 1, 2009

December 8, 2008

Analysis of:CSX Tariff for Export Bituminous Coal | www.csx.com

    The CSX is raising tariff rates for export steam coal on January 1, 2009

Bradford MillsChief Executive OfficerMANDALAY RESOURCES CORPORATION

Metal prices have more to fall before the correction is over

December 5, 2008

Analysis of:Metal prices fall further than during Great Depression | www.telegraph.co.uk

Despite the 50%+ falls in the prices of copper, nickel, zinc, lead, Pgms, and Aluminium since early 2008, most metal prices are only just now reaching the average cash cost of industry production. After the 9/11 event, demand destruction in the Western Economies was some 10% within 2 months and commodity prices fell, in most cases, below 90% of all producers cash costs. Since the third quarter of this year estimates of demand destruction are between 15-30% in the Western Economies. Supply in most cases has not yet adjusted anywhere near enough to rebalance this reduced demand. Expect inventories of raw metals to rise rapidly in the first half of 2009 and prices to fall another 25-50% forcing producers to take more decisive action to reduce supply. Comparisons with the Great Depression make interesting headlines but are highly misleading.

Sam TimpanoPresidentSam Timpano & Associates

Purchasing commodities to stimulate economies is not a solution to the current global downturn

December 5, 2008

Analysis of:Recovery starts with resources, Sprott says | www.financialpost.com

While Mr. Sprott makes a reasonable case for economic stimulus to be accomplished via commodity purchases by governments, it is not the means by which the current global crisis can be resolved nor should it. Commodity purchases could help in the short term but the root of the current crisis is not based in this sector. The real problems rest within the financial sectors of the world economy and the fallout onto the credit markets that is the root cause and what must be stabilized before any real economic upturn could be expected. In actual fact, if implemented, this plan would add to the future consequences that much of these current "bailout" plans and "stabilization" plans will produce, especially inflationary consequences which will (not may- WILL) result from all of this money being "printed" to avert the consequences of failed policy and business models.

Bradford MillsChief Executive OfficerMANDALAY RESOURCES CORPORATION

BHP/RIO Deal Collapse Should Be No Surprise.

December 1, 2008

Analysis of:ASIA-Death of a Megadeal: BHP Ends Its Pursuit of Rio | online.wsj.com

The BHP/Rio deal was always a long shot. Antitrust issues were formidable and the success of the deal was always going to be hugely dependant of regulator demanded asset sales requirements. Given the collapse in asset values in the last three months, any value for synergies would have been overwhelmed by the prospect of low realizations on assets sales over the next two years. Other factors were undoubtedly the proposed list of asset sales from the EU which apparently had a lot more Iron ore on it that BHP hoped. Finally, Rio's large debt and unfunded pension position look decidedly more risky in the current commodity price environment. The bottom line is that a difficult deal in good times became impossible in difficult times and BHPB rightly pulled the plug. Investors should be concerned that BHP ever pursued this as a hostile transaction given the enormous complexity and regulatory risks of the proposed transaction.

Craig MarstonManaging DirectorCEM Marine

Order Cancelations Will Not Approach Half of The Order Book

November 24, 2008

Analysis of:Half of dry bulk orders will ‘not be delivered’ | www.lloydslist.com

Navios' prediction that up to half of the dry bulk orderbook through 2010 will be canceled won't happen.

Bradford MillsChief Executive OfficerMANDALAY RESOURCES CORPORATION

Consolidation will Shorten Industry Price Cycle in Mining.

November 18, 2008

Analysis of:Freeport-McMoran Copper & Gold Inc. Announces Molybdenum Production Curtailment and Plans to Defer Restart of Climax Molybdenum Mine | www.fcx.com

     The recent announcement that FCX is significantly reducing molybdenum production is a rapid response to the recent price declines in Mo. This indicates that things are very different in the mining world than in past cycles. Historically companies have held on to production in down cycles for long periods with the hope that other producers would curtail production first. This became a war of attrition and often prolonged down cycles as large inventories of metals were built up that had to be worked off before prices responded. Consolidation in the mining industry has changed the production response behavior significantly with major producers rapidly curtailing production to rebalance supply and demand before massive inventories build up. In addition to FCX's move, Xstrata (XTA.L) and Norilsk (OTC:NILSY) have curtailed nickel production. Rio Tinto (RIO.L) and Fortescue Metals (ASX:FMG) have announced iron ore curtailments. Expect copper cuts soon.

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