gold & water
[this one’s going out to Patrick Bond, since it’s about two of his =
favorite commodities - from Merrill Lynch chief economist David =
Rosenberg’s weekly top 10 list, this is #8]
Two secular themes we have highlighted for the past two years has =
been gold and water. As far as gold is concerned, the annual GFMS =
report concluded that gold could well top the Jan/80 peak of $850/oz =
in the next twelve months. Investment demand rose 8% in the past year =
to a record 640 million tons (double the 2003 level), with ETFs =
providing a big lift, at a time when global mined output fell 3% to =
2,471 tons, which was a 10-year low. Moreover, average production =
costs continue to rise and establish a rising floor under the gold =
price =96 rising $45/oz last year to $317/oz. And opportunities for the =
world’s water companies are rising inexorably =96 a conference on =
underinvestment in water resources took place in Barcelona last week. =
Fully 40% of the world’s population will suffer from acute water =
shortages by 2050 (according to UN estimates). China intends to =
tender water services for 100 cities by 2010 and it is unveiling a =
$125 billion program aimed at improving water treatment capacity and =
recycling facilities. Saudi Arabia is embarking on a privatization =
program. Even in the U.S., the EPA estimates that over the next 12 =
years, $122 billion in will be needed for waste water treatment and =
an additional $100 bln for drinking water safety. This could be the =
1 growth industry worldwide with estimated investment needs near =
$1.2 trillion over the next two decades. Great piece in the April 9th =
FT on this file worth looking at.