The Philippines' Berong Nickel Corp is in talks to double its long-term annual supply deal with BHP Billiton to 1 million tonnes of laterite nickel ore beginning March, a company official said on Friday.
Berong Nickel, in which Toledo Mining and Atlas Consolidated Mining Corp have stakes, currently has an agreement to supply BHP Billiton, the world's biggest mining group, with 500,000 tonnes of laterite nickel ore per year for five years, which can be extended by another five years.
"We're now looking at increasing that to a million tonnes a year, and that tides us away from relying on the Chinese market," said George Bujtor, chief executive of Berong Nickel.
"We want to start March next year for the supply of one million tons to BHP," he said.
Apart from BHP Billiton, the Berong project, potentially the world's fourth-largest nickel laterite resource, is shipping ore with an average grade of around 1.5 percent to Chinese clients.
The company is likely to export 600,000 tonnes laterite nickel ore this year, Bujtor said. The group earlier said it was unlikely to meet a shipment goal of 1.5 million tonnes of laterite ore this year due to shipping difficulties.
Source: Reuters
Friday, July 18, 2008
Thursday, July 17, 2008
China Steel Output Up 9.6%
China's crude steel output rose 9.6 per cent in the first half of 2008, to 263 million tonnes, industry website Umetal has said, implying that June output hit a fresh monthly record.
Umetal did not provide a breakdown for the monthly data, but the first half figure implies that June output topped May's record production of 46.01 million tonnes.
Production is likely to fall beginning in July, as closures for the Beijing Olympics dent national output.
Steel products output rose 12.5 per cent in the first half to 300 million tonnes, it said.
China produced 216.11 million tonnes of crude steel in the first five months of 2008, according to preliminary statistics released last month. Official statistics for June are due on Friday.
Many Chinese steel mills, especially in northern areas around Beijing, ran at high rates in the first half of this year to build stocks in case they were forced to close to reduce pollution during the Olympics in August.
Beijing has ordered heavy producers in provinces around Beijing to close plants that cannot meet emissions standards, to help clear the air.
Nineteen blast furnaces with a combined monthly output of 450,000 tonnes, or just over 1 per cent of national output, have already gone cold in Tangshan, an area east of Beijing that accounts for about 10 per cent of China's steel production.
As of the end of June, Tangshan identified 66 steel mills and 12 coking plants that would have to shut in early July, the China Securities Journal reported on Thursday.
Source: Business Spectator
Umetal did not provide a breakdown for the monthly data, but the first half figure implies that June output topped May's record production of 46.01 million tonnes.
Production is likely to fall beginning in July, as closures for the Beijing Olympics dent national output.
Steel products output rose 12.5 per cent in the first half to 300 million tonnes, it said.
China produced 216.11 million tonnes of crude steel in the first five months of 2008, according to preliminary statistics released last month. Official statistics for June are due on Friday.
Many Chinese steel mills, especially in northern areas around Beijing, ran at high rates in the first half of this year to build stocks in case they were forced to close to reduce pollution during the Olympics in August.
Beijing has ordered heavy producers in provinces around Beijing to close plants that cannot meet emissions standards, to help clear the air.
Nineteen blast furnaces with a combined monthly output of 450,000 tonnes, or just over 1 per cent of national output, have already gone cold in Tangshan, an area east of Beijing that accounts for about 10 per cent of China's steel production.
As of the end of June, Tangshan identified 66 steel mills and 12 coking plants that would have to shut in early July, the China Securities Journal reported on Thursday.
Source: Business Spectator
JSW May Look At United Coal
Sajjan Jindal-controlled JSW Steel may look at acquiring US-based United Coal Company, which has reserves in excess of 165 million tonnes.
Seshagiri Rao, director (finance), JSW Steel, declined to comment if the firm had submitted a bid for the US company saying: "There are many assets on sale, this is one of the assets available for sale now."
However, with or without United Coal, JSW Steel would achieve 50 per cent raw material security by 2011-12.
Rao said with the Mozambican licence, the company would get two million tonne (mt) of coking coal next year and then step it up to 4.5 mt in three years. Also, the company has been allotted 69 per cent in a Jharkhand coal block.
By 2011-12, group company Siscol would achieve a capacity of 11 mt and have a coking coal security of 50 per cent. At present, JSW imports 100 per cent of its coking coal needs.
If JSW decides to bid for United Coal, it would be in tandem with the strategy being pursued by most steel-makers to secure raw material sources.
Coking coal contracts for the new year have been sealed by most players at $305 a tonne, an increase of more than 200 per cent over the previous year.
Moreover, coking coal accounts for 50 per cent of the cost of steel production.
Also, the quality of coking coal in India is not suitable for steelmaking and, therefore, companies have to depend on imports.
JSW is stepping up iron ore security as well. The company will invest around Rs 5.5billion in its Chilean mining concessions, which would ensure a 50 per cent security by June 2009. The company plans to hedge the iron ore.
However, JSW would have to strengthen its raw material linkages in line with its capacity expansion. The company plans to enhance capacity to 31 mt by 2020. In FY08, JSW had a crude steel production of 3.6 mt.
Source: Business Standard
Seshagiri Rao, director (finance), JSW Steel, declined to comment if the firm had submitted a bid for the US company saying: "There are many assets on sale, this is one of the assets available for sale now."
However, with or without United Coal, JSW Steel would achieve 50 per cent raw material security by 2011-12.
Rao said with the Mozambican licence, the company would get two million tonne (mt) of coking coal next year and then step it up to 4.5 mt in three years. Also, the company has been allotted 69 per cent in a Jharkhand coal block.
By 2011-12, group company Siscol would achieve a capacity of 11 mt and have a coking coal security of 50 per cent. At present, JSW imports 100 per cent of its coking coal needs.
If JSW decides to bid for United Coal, it would be in tandem with the strategy being pursued by most steel-makers to secure raw material sources.
Coking coal contracts for the new year have been sealed by most players at $305 a tonne, an increase of more than 200 per cent over the previous year.
Moreover, coking coal accounts for 50 per cent of the cost of steel production.
Also, the quality of coking coal in India is not suitable for steelmaking and, therefore, companies have to depend on imports.
JSW is stepping up iron ore security as well. The company will invest around Rs 5.5billion in its Chilean mining concessions, which would ensure a 50 per cent security by June 2009. The company plans to hedge the iron ore.
However, JSW would have to strengthen its raw material linkages in line with its capacity expansion. The company plans to enhance capacity to 31 mt by 2020. In FY08, JSW had a crude steel production of 3.6 mt.
Source: Business Standard
China's Coke Exports To Top 14 Million Tonnes
China is expected to export 14 million to 15 million tonnes of coke each year to 2010, an executive at China's top coking coal producer has told a conference - roughly in line with recent export levels.
Liu Jianzhong, deputy general manager of Shanxi Coking Coal Group, also said the coke supply gap in the international market had reached 7.5 million tonnes in 2007, but there would be a surplus of 12 million tonnes by 2011, due to expected new supply from Australia.
Domestic coke prices will continue to rise in the third and fourth quarters of this year, by another 200 to 300 yuan ($US29 to $US44) a tonne, due to tight supply, Mr Liu said.
China's coke price has surged this year, with the export price for first-grade metallurgical coal jumping more than 50 per cent to over $US700 a tonne.
Source: Business Spectator
"Coke prices will definitely continue rising," he said, adding that the supply of coking coal, the key input for coke production, had been very unstable in Shanxi, China's top coal- and coke-producing province.
More than half of China's coking coal resources are controlled by small mines, many of which have been closed as the government pushes small and dangerous mines out of business in a safety campaign.
Beijing this week issued the second batch of coke export quotas for the year at 2.39 million tonnes, bringing the total so far this year to 12.01 million tonnes, just shy of last year's amount.
Shanxi Coking Coal Group is the parent of Shenzhen-listed Shanxi Xishan Coal and Electricity Power and Shanghai-listed Shanxi Coking Co .
Liu Jianzhong, deputy general manager of Shanxi Coking Coal Group, also said the coke supply gap in the international market had reached 7.5 million tonnes in 2007, but there would be a surplus of 12 million tonnes by 2011, due to expected new supply from Australia.
Domestic coke prices will continue to rise in the third and fourth quarters of this year, by another 200 to 300 yuan ($US29 to $US44) a tonne, due to tight supply, Mr Liu said.
China's coke price has surged this year, with the export price for first-grade metallurgical coal jumping more than 50 per cent to over $US700 a tonne.
Source: Business Spectator
"Coke prices will definitely continue rising," he said, adding that the supply of coking coal, the key input for coke production, had been very unstable in Shanxi, China's top coal- and coke-producing province.
More than half of China's coking coal resources are controlled by small mines, many of which have been closed as the government pushes small and dangerous mines out of business in a safety campaign.
Beijing this week issued the second batch of coke export quotas for the year at 2.39 million tonnes, bringing the total so far this year to 12.01 million tonnes, just shy of last year's amount.
Shanxi Coking Coal Group is the parent of Shenzhen-listed Shanxi Xishan Coal and Electricity Power and Shanghai-listed Shanxi Coking Co .
Rizhao Iron Ore Volume Tops 29Million Tonnes In H1
China Customs statistics shows that Chinese iron ore imports through Rizhao port reached 29.27 million tonne for January to June period, making it the number one port for iron ore imports in terms of volume.
The newly-built 250,000 tonne dock has provided more room for piling up iron ore. At the same time, it has strived to enlarge market share and tonnages have jumped by 19.3% year on year in the first half of 2008.
Rizhao port is now concentrating on the construction of key projects, including the second phase of the iron ore yard, which is expected to be put into force in H2. The new projects are expected to further sharpen its edge over its competitors.
Rizhao's throughput topped 100 million tonnes in 2006 and surged by 19% to 130 million tonne in 2007. It ranks number among sea ports in China.
Source: Steel Guru
The newly-built 250,000 tonne dock has provided more room for piling up iron ore. At the same time, it has strived to enlarge market share and tonnages have jumped by 19.3% year on year in the first half of 2008.
Rizhao port is now concentrating on the construction of key projects, including the second phase of the iron ore yard, which is expected to be put into force in H2. The new projects are expected to further sharpen its edge over its competitors.
Rizhao's throughput topped 100 million tonnes in 2006 and surged by 19% to 130 million tonne in 2007. It ranks number among sea ports in China.
Source: Steel Guru
SAIL To Pay Treble For Australian Coking Coal
Steel Authority of India Limited has agreed for a threefold increase in prices of imported coking coal from Australia, a move that is likely to increase the input cost and put pressure on its bottom line.
This comes on top of PSU assuring the government to hold the price line for three months till the first week of August at a time when international prices have firmed up.
"In view of the soaring international prices, which have almost trebled, SAIL has settled its annual contract with Australian miners at about USD 300 per tonne (FOB) of coking coal from July 1," a source said.
Previously, the steel major used to procure Australian coking coal for about USD 98 a tonne. In 2007-08, it imported about 10 mn tons of coking coal and procured 4 million tons from domestic market.
SAIL Chairman S K Roongta had earlier said that the company may have to import 12 mn tons of coking coal this year as its total requirement would increase to about 15.7 mn tons.
In a bid to help SAIL reduce its heavy dependence on coking coal imports, the Steel Ministry had recently sought the Coal Ministry's intervention in expediting the proposed strategic partnership between SAIL and BCCL for developing the Kapuria coal block in Jharkhand.
In view of its expansion plans and to reduce costly coking coal imports, SAIL has been into regular talks with Coal India's subsidiary Bharat Coking Coal Limited (BCCL) for floating a joint venture to develop the Kapuria coal block, which has an estimated reserves of about 150 mn tons.
Source: Economic Times
This comes on top of PSU assuring the government to hold the price line for three months till the first week of August at a time when international prices have firmed up.
"In view of the soaring international prices, which have almost trebled, SAIL has settled its annual contract with Australian miners at about USD 300 per tonne (FOB) of coking coal from July 1," a source said.
Previously, the steel major used to procure Australian coking coal for about USD 98 a tonne. In 2007-08, it imported about 10 mn tons of coking coal and procured 4 million tons from domestic market.
SAIL Chairman S K Roongta had earlier said that the company may have to import 12 mn tons of coking coal this year as its total requirement would increase to about 15.7 mn tons.
In a bid to help SAIL reduce its heavy dependence on coking coal imports, the Steel Ministry had recently sought the Coal Ministry's intervention in expediting the proposed strategic partnership between SAIL and BCCL for developing the Kapuria coal block in Jharkhand.
In view of its expansion plans and to reduce costly coking coal imports, SAIL has been into regular talks with Coal India's subsidiary Bharat Coking Coal Limited (BCCL) for floating a joint venture to develop the Kapuria coal block, which has an estimated reserves of about 150 mn tons.
Source: Economic Times
Tanshan Signs Coking Coal Supply Deal
According to the Assets Supervision & Administration of Hebei Province, Hebei Steel Group's Tangshan Iron & Steel Corp has signed a 15 year strategic cooperation pact with Shanxi Meijin Group and Shanxi Guangda Coking Co.
Meijin Group ranks No 1 in terms of output and assets in Shanxi's privately owned enterprises. It boasts output of 5.4 million tonnes of coke and 10 million tonnes of coal washing capacity per annum. The group possesses its own coking coal mines with workable reserves of 2 billion tonnes.
Guangda Coking Co boasts 1.7 million tonnes per year of coke output and 2 million tonnes per year of coal washing capacity. Both companies have a strong transport capacity, and will allocate a special train for Tangshan Steel to guarantee its coke and coal supply.
Tangshan Steel has sped up the development of high value added products amidst the escalating raw materials prices. Annual output will reach 16 million tonnes with output capacity hitting 18 million tonnes in the near future. Its first half profits gained 50% over the same period last year.
Source: Steel Guru
Meijin Group ranks No 1 in terms of output and assets in Shanxi's privately owned enterprises. It boasts output of 5.4 million tonnes of coke and 10 million tonnes of coal washing capacity per annum. The group possesses its own coking coal mines with workable reserves of 2 billion tonnes.
Guangda Coking Co boasts 1.7 million tonnes per year of coke output and 2 million tonnes per year of coal washing capacity. Both companies have a strong transport capacity, and will allocate a special train for Tangshan Steel to guarantee its coke and coal supply.
Tangshan Steel has sped up the development of high value added products amidst the escalating raw materials prices. Annual output will reach 16 million tonnes with output capacity hitting 18 million tonnes in the near future. Its first half profits gained 50% over the same period last year.
Source: Steel Guru
Lynas To Supply Rare Earth Products To Japan
Australian rare metal producer, Lynas Corporation is to supply rare earth products to the Japanese market in a three to five year contract which involves development of the Mt Weld mine in Western Australia.
Lynas already started construction on a concentration plant in Australia and a plant in Malaysia to process and refine concentrate from Australia.
Mr Nicholas Curtis, executive chairman of Lynas Corporation said the firm would start commercial production in July to September 2009 and sales to Japanese customers would represent more than half total sales.
Source: Steel Guru
Lynas already started construction on a concentration plant in Australia and a plant in Malaysia to process and refine concentrate from Australia.
Mr Nicholas Curtis, executive chairman of Lynas Corporation said the firm would start commercial production in July to September 2009 and sales to Japanese customers would represent more than half total sales.
Source: Steel Guru
Rio Tinto, BHP Agree Terms With European Steel Mills
Australia's two leading iron ore producers, BHP Billiton Ltd and Rio Tinto Ltd have settled on a 71 percent rise in iron ore contract prices with European steel mills, an Australian newspaper reported on Tuesday.
The reported price rises are less than the near doubling of prices agreed with Asian steel mills but are in line with prices agreed with Brazil's Vale in March.
BHP and Rio Tinto both declined to confirm the deals on Tuesday.
The Australian newspaper reported that BHP agreed to receive the same for its iron ore from steel giant ArcelorMittal that Vale had secured.
The two Australian producers earlier this month struck deals with Chinese and Japanese steel mills for a 96.5 percent increase in lump iron ore and a 79.88 percent increase for fine iron ore shipments in 2008/09.
BHP sends less than 2 percent of its iron ore to Europe. The Australian newspaper said the company is keen to show that it is a price taker in Europe where it is seeking European Commission approval for a $160 billion hostile takeover bid for Rio Tinto.
Rio Tinto said it had settled European iron ore contracts, but as the market made up only about 3 percent of its sales from Western Australia's Pilbara, it would not reveal the extent of its price rises.
Prices varied with customers' freight arrangements, a spokeswoman said.
Australian iron ore producers do not have the same freight advantage to Europe as they command over Vale with sales to Asia.
Source: Reuters
The reported price rises are less than the near doubling of prices agreed with Asian steel mills but are in line with prices agreed with Brazil's Vale in March.
BHP and Rio Tinto both declined to confirm the deals on Tuesday.
The Australian newspaper reported that BHP agreed to receive the same for its iron ore from steel giant ArcelorMittal that Vale had secured.
The two Australian producers earlier this month struck deals with Chinese and Japanese steel mills for a 96.5 percent increase in lump iron ore and a 79.88 percent increase for fine iron ore shipments in 2008/09.
BHP sends less than 2 percent of its iron ore to Europe. The Australian newspaper said the company is keen to show that it is a price taker in Europe where it is seeking European Commission approval for a $160 billion hostile takeover bid for Rio Tinto.
Rio Tinto said it had settled European iron ore contracts, but as the market made up only about 3 percent of its sales from Western Australia's Pilbara, it would not reveal the extent of its price rises.
Prices varied with customers' freight arrangements, a spokeswoman said.
Australian iron ore producers do not have the same freight advantage to Europe as they command over Vale with sales to Asia.
Source: Reuters
Monday, July 14, 2008
MMC Hopes For US Exemption
Manganese Metal Corporation (MMC), a Nelspruit-based subsidiary of BHP Billiton, is pinning its hopes on a US government exemption from import duties for electrolyte manganese metal powder, a key South African export, in a bid to retain its position in the US.
The firm, which supplies 19% of the US market, expected a decision in the first half of this year, but none came.
Securing duty-free status is critical for MMC . The US consumes as much as four-fifths of the product, used to add toughness and abrasion resistance to metal alloy products.
MMC has already had to reduce shipments to the US because of power cutbacks.
It is now also facing formidable competition in the US market from Chinese manufacturers, which produce a cheaper, but environmentally hazardous, product.
SA and China are the only suppliers to the US of manganese metal powder, currently subject to import duties of 14%.
MMC applied for duty-free status under the Generalised System of Preferences (GSP), a programme designed to promote economic growth in the developing world. The programme was upgraded for Africa through the African Growth and Opportunity Act (Agoa), which gives sub-Saharan countries, including SA, improved preferential access to US markets.
MMC’s petition for electrolytic manganese metal powder was the only petition from Africa under review for this round of considerations.
A decision was expected soon, said George Jungbluth of PBN Company, a public relations firm that represents MMC in Washington DC. “It is clear that without GSP status, MMC will have difficulty maintaining a presence in the US market,” Jungbluth said.
“This is a lose-lose scenario for SA and the US. For SA an important export market is lost and damage will be done to a company that provides several hundreds of quality jobs. The US will lose a reliable supplier and the only alternative to Chinese imports,” he said last week.
MMC’s product is more environmentally friendly than the Chinese product. It does not use selenium, an environmentally hazardous but less expensive means to produce the powder, developed in co-operation with the US Bureau of Mines.
However, the cost of production was higher than the Chinese product, largely because of the green technology that was used instead of selenium, Jungbluth said.
Ironically, the US is wholly dependent on imports, as no American firms produce the powder for commercial sale.
Manganese metal products were originally excluded from Agoa because of opposition from Kerr McGee, then a local producer. The company, however, ceased production of all electrolyte metal products in 2001 and does not oppose the exemption from duty.
Source: Business Day
The firm, which supplies 19% of the US market, expected a decision in the first half of this year, but none came.
Securing duty-free status is critical for MMC . The US consumes as much as four-fifths of the product, used to add toughness and abrasion resistance to metal alloy products.
MMC has already had to reduce shipments to the US because of power cutbacks.
It is now also facing formidable competition in the US market from Chinese manufacturers, which produce a cheaper, but environmentally hazardous, product.
SA and China are the only suppliers to the US of manganese metal powder, currently subject to import duties of 14%.
MMC applied for duty-free status under the Generalised System of Preferences (GSP), a programme designed to promote economic growth in the developing world. The programme was upgraded for Africa through the African Growth and Opportunity Act (Agoa), which gives sub-Saharan countries, including SA, improved preferential access to US markets.
MMC’s petition for electrolytic manganese metal powder was the only petition from Africa under review for this round of considerations.
A decision was expected soon, said George Jungbluth of PBN Company, a public relations firm that represents MMC in Washington DC. “It is clear that without GSP status, MMC will have difficulty maintaining a presence in the US market,” Jungbluth said.
“This is a lose-lose scenario for SA and the US. For SA an important export market is lost and damage will be done to a company that provides several hundreds of quality jobs. The US will lose a reliable supplier and the only alternative to Chinese imports,” he said last week.
MMC’s product is more environmentally friendly than the Chinese product. It does not use selenium, an environmentally hazardous but less expensive means to produce the powder, developed in co-operation with the US Bureau of Mines.
However, the cost of production was higher than the Chinese product, largely because of the green technology that was used instead of selenium, Jungbluth said.
Ironically, the US is wholly dependent on imports, as no American firms produce the powder for commercial sale.
Manganese metal products were originally excluded from Agoa because of opposition from Kerr McGee, then a local producer. The company, however, ceased production of all electrolyte metal products in 2001 and does not oppose the exemption from duty.
Source: Business Day
JSW Considers Chilean Iron Ore Import
JSW Steel, India's third largest steel maker, will explore the possibility of importing iron ore from its mine in Chile and sell it in the local market.
The Sajjan Jindal-controlled company had secured prospecting licences through its Netherlands-based subsidiary to explore and exploit magnetite iron ore deposits in northern Chile's Atacama region.
"We will explore the possibility of selling Chilean iron ore in India. The Chile plant will act as a natural hedge to iron ore selling in India," said a top company executive.
The company has paid $52 million for acquiring mining licences spread. The move was part of the company's efforts to augment captive sources of iron ore and coal for its local steelmaking operations.
Source: Business Standard
The Sajjan Jindal-controlled company had secured prospecting licences through its Netherlands-based subsidiary to explore and exploit magnetite iron ore deposits in northern Chile's Atacama region.
"We will explore the possibility of selling Chilean iron ore in India. The Chile plant will act as a natural hedge to iron ore selling in India," said a top company executive.
The company has paid $52 million for acquiring mining licences spread. The move was part of the company's efforts to augment captive sources of iron ore and coal for its local steelmaking operations.
Source: Business Standard
Jindal To Buy West Asia Chrome Ore, Manganese Mines
Jindal Stainless (JSL), the country's largest stainless steel manufacturer, is close to acquiring chrome ore and manganese mines in West Asia to cater to its project in Orissa.
The move comes in the backdrop of the Orissa government's failure in allocating mines for the Ratan Jindal-controlled company's ferrochrome project, for which the memorandum of understanding (MoU) was signed five years ago.
Arvind Parakh, director (business development and strategy), Jindal Stainless, said that the company was in the process of acquiring two mines, which should be finalised over the next two-three months.
He said the company would have a significant cost advantage after the acquisition as the steel maker is currently procuring the raw material from the state government-controlled Orissa Mining Corporation (OMC) at market rates.
"The MoU for the ferrochrome project was signed around five years back and captive mine allocation was part of the agreement. However, after failing to allocate mines, the state government chalked out an alternative strategy of linkages from OMC at market rates," Parekh said.
The output from the assets would cater to the company's 150,000-tonne per annum ferrochrome and ferroalloys project in Orissa. "We have already committed Rs 7,000-8,000 crore in the first and second phases of the project but are yet to get the mines," he said. Parakh said the cost of acquisition would not be much because they were not explored.
"We do not have to go through a bidding process and its privately held so it should be quick."
Jindal Stainless is looking at an outright acquisition of the mines. However, it also open to buying a 30-50 per cent stake with an offtake agreement.
Industry sources said that the captive mines would improve Jindal Stainless' margins significantly. At present, its margins stand at 18-22 per cent, which could go up to 35 per cent. Chrome ore prices have increased hugely over the past few years.
"When we finalised the project, chrome ore was at Rs 3,000 a tonne and ferro chrome at Rs 28,000-30,000 a tonne. Today, chrome ore costs Rs 30,000 a tonne while ferrochrome is priced at Rs 85,000-90,000 a tonne," said Parakh.
Jindal Stainless has a chrome ore mine in Orissa, which is used to feed the Vizag plant. "We have around eight to nine hectares but it is not enough for the Orissa project," said Parakh.
Mine allocation and land acquisition are the two stumbling blocks for most steel projects in the country. None of the mega steel projects, including that of Tata Steel and Posco, have been allocated mines.
Source: Business Standard
The move comes in the backdrop of the Orissa government's failure in allocating mines for the Ratan Jindal-controlled company's ferrochrome project, for which the memorandum of understanding (MoU) was signed five years ago.
Arvind Parakh, director (business development and strategy), Jindal Stainless, said that the company was in the process of acquiring two mines, which should be finalised over the next two-three months.
He said the company would have a significant cost advantage after the acquisition as the steel maker is currently procuring the raw material from the state government-controlled Orissa Mining Corporation (OMC) at market rates.
"The MoU for the ferrochrome project was signed around five years back and captive mine allocation was part of the agreement. However, after failing to allocate mines, the state government chalked out an alternative strategy of linkages from OMC at market rates," Parekh said.
The output from the assets would cater to the company's 150,000-tonne per annum ferrochrome and ferroalloys project in Orissa. "We have already committed Rs 7,000-8,000 crore in the first and second phases of the project but are yet to get the mines," he said. Parakh said the cost of acquisition would not be much because they were not explored.
"We do not have to go through a bidding process and its privately held so it should be quick."
Jindal Stainless is looking at an outright acquisition of the mines. However, it also open to buying a 30-50 per cent stake with an offtake agreement.
Industry sources said that the captive mines would improve Jindal Stainless' margins significantly. At present, its margins stand at 18-22 per cent, which could go up to 35 per cent. Chrome ore prices have increased hugely over the past few years.
"When we finalised the project, chrome ore was at Rs 3,000 a tonne and ferro chrome at Rs 28,000-30,000 a tonne. Today, chrome ore costs Rs 30,000 a tonne while ferrochrome is priced at Rs 85,000-90,000 a tonne," said Parakh.
Jindal Stainless has a chrome ore mine in Orissa, which is used to feed the Vizag plant. "We have around eight to nine hectares but it is not enough for the Orissa project," said Parakh.
Mine allocation and land acquisition are the two stumbling blocks for most steel projects in the country. None of the mega steel projects, including that of Tata Steel and Posco, have been allocated mines.
Source: Business Standard
Japanese Company Signs South Australia Exploration Deal
The Japan Oil, Gas and Metals National Corp. said on Friday that the independent administrative agency has signed a contract with Minotaur Exploration Ltd. of Australia to jointly explore mines in South Australia.
The Japanese agency will provide A$2 million over three years for the exploration of rare earth and copper mines in the Mabel Creek region and acquire a 51 percent stake in the exploration project.
It said it expects to discover large rare earth and copper deposits because the region is close to mines producing these resources.
Source: Trading Markets
The Japanese agency will provide A$2 million over three years for the exploration of rare earth and copper mines in the Mabel Creek region and acquire a 51 percent stake in the exploration project.
It said it expects to discover large rare earth and copper deposits because the region is close to mines producing these resources.
Source: Trading Markets
Friday, July 11, 2008
Chinese Government Considers Manganese Metal Tariff Increase
Reports from China suggest that the central government is considering a further increase in the export duty on electrolytic manganese metal from China although the matter has been carried over to August or later. The move is to prevent environmental pollution and to save energy consumption.
Domestic demand for Electrolytic manganese metal comes mainly from the stainless steel and aluminium alloy industries and is estimated to be 300,000 tons per annum but, as the capacity in China is thought to be 1,000,000 to 1,200,000 tonnes per annum there is an overcapacity. Therefore, China has to export a large quantity of the metal and China exported 320,000 tonnes of electrolytic manganese metal in the calendar year of 2007.
The imposition of the higher export duty will be a substantial blow to Chinese producers. Increases in the cost of electric power in China and in the world price of manganese ore have meant that the cost to produce electrolytic manganese metal in China has increased to over USD 3,750 per tonne FOB.
Source: Steel Prices
Domestic demand for Electrolytic manganese metal comes mainly from the stainless steel and aluminium alloy industries and is estimated to be 300,000 tons per annum but, as the capacity in China is thought to be 1,000,000 to 1,200,000 tonnes per annum there is an overcapacity. Therefore, China has to export a large quantity of the metal and China exported 320,000 tonnes of electrolytic manganese metal in the calendar year of 2007.
The imposition of the higher export duty will be a substantial blow to Chinese producers. Increases in the cost of electric power in China and in the world price of manganese ore have meant that the cost to produce electrolytic manganese metal in China has increased to over USD 3,750 per tonne FOB.
Source: Steel Prices
Manganese Mines In Hunan To Cease Production
Steel Guru reports that medium and small scale manganese mines in Hunan will stop production for a time for environmental protection.
With the Olympic Games in Beijing coming, control policies on ore mines have become more and more strict and will be carried out directly by provincial departments. Medium and small manganese ore enterprises have to stop production for at least two years.
At present, manganese ore supply is tense in Hunan, with small stock held in factories. As there are relatively large amounts of imported manganese ores, the stock held in ports will be increased, which will lessen the difference between domestic manganese ore supply and demand. It is also predicted that the price of manganese ore will remain firm.
Source: Steel Guru
With the Olympic Games in Beijing coming, control policies on ore mines have become more and more strict and will be carried out directly by provincial departments. Medium and small manganese ore enterprises have to stop production for at least two years.
At present, manganese ore supply is tense in Hunan, with small stock held in factories. As there are relatively large amounts of imported manganese ores, the stock held in ports will be increased, which will lessen the difference between domestic manganese ore supply and demand. It is also predicted that the price of manganese ore will remain firm.
Source: Steel Guru
Thursday, July 10, 2008
Kalagadi Manganese Plant Due By End-2010
Kalagadi Manganese, in which Arcelor Mittal has a 50% stake, plans to produce sintered manganese and high grade ferro-manganese by the end of 2010.
"We want to have all the plants, sinster and smelter going by 2010. The mine shaft is to be completed towards the end of the second quarter of 2010," said David Wellbeloved Kalagadi's technical director. He was speaking at Metal Bulletins Ferroalloys conference in Johannesburg.
The R4.3bn project is in bankable feasibility study stage and work on the sinking of a vertical shaft on the company's Umtu farm, one of three farms, in the Kalahari in the Northern Cape is about to begin. Kalagadi has a number of prospects containing, 9.8 million tonnes of manganese ore, said Mr Wellbeloved.
Source: MiningMx
"We want to have all the plants, sinster and smelter going by 2010. The mine shaft is to be completed towards the end of the second quarter of 2010," said David Wellbeloved Kalagadi's technical director. He was speaking at Metal Bulletins Ferroalloys conference in Johannesburg.
The R4.3bn project is in bankable feasibility study stage and work on the sinking of a vertical shaft on the company's Umtu farm, one of three farms, in the Kalahari in the Northern Cape is about to begin. Kalagadi has a number of prospects containing, 9.8 million tonnes of manganese ore, said Mr Wellbeloved.
Source: MiningMx
Iron Ore Supply Deals For Metalloinvest
Metalloinvest, the Russian miner half-owned by billionaire Alisher Usmanov, said on Wednesday it has signed several new contracts to supply iron ore to leading iron and steel mills in Russia and Ukraine. Metalloinvest, which produces about 40 percent of Russia's iron ore, said in a statement it would supply 100,000 tonnes a month of iron concentrate to Magnitogorsk Iron and Steel Works at an unspecified fixed price to the end of 2008.
The ore would be supplied by Metalloinvest subsidiary Lebedinsky GOK, Russia's largest iron ore mine.
Benchmark iron ore prices have almost doubled this year after leading miners BHP Billiton and Rio Tinto each secured massive increases from their Chinese customers.
Metalloinvest has also agreed to supply iron producer Tulachermet with 130,000 tonnes a month -- 50,000 tonnes of concentrate from Lebedinsky and 80,000 tonnes of pellets from its other mine, Mikhailovsky GOK.
This contract will run for three years, with prices fixed annually.
Metalloinvest said it would also supply 100,000 tonnes a month of concentrate from Lebedinsky to the Ilyich steel works in the Ukrainian port city of Mariupol. The three-year contract will also see prices fixed annually.
Metalloinvest already supplies iron ore to other Russian mills, including Novolipetsk Steel and Evraz Group's Zapsib plant, as well as exporting raw materials to ArcelorMittal and U.S. Steel's plant in Slovakia.
Russia is the world's fifth-largest iron ore miner, with a 6 percent share of global production.
Source: Reuters
The ore would be supplied by Metalloinvest subsidiary Lebedinsky GOK, Russia's largest iron ore mine.
Benchmark iron ore prices have almost doubled this year after leading miners BHP Billiton and Rio Tinto each secured massive increases from their Chinese customers.
Metalloinvest has also agreed to supply iron producer Tulachermet with 130,000 tonnes a month -- 50,000 tonnes of concentrate from Lebedinsky and 80,000 tonnes of pellets from its other mine, Mikhailovsky GOK.
This contract will run for three years, with prices fixed annually.
Metalloinvest said it would also supply 100,000 tonnes a month of concentrate from Lebedinsky to the Ilyich steel works in the Ukrainian port city of Mariupol. The three-year contract will also see prices fixed annually.
Metalloinvest already supplies iron ore to other Russian mills, including Novolipetsk Steel and Evraz Group's Zapsib plant, as well as exporting raw materials to ArcelorMittal and U.S. Steel's plant in Slovakia.
Russia is the world's fifth-largest iron ore miner, with a 6 percent share of global production.
Source: Reuters
Baffinland To Ship Less Iron Ore Than Expected
Baffinland Iron Mines Corp. has scaled back its target for shipping iron ore bulk samples from its Mary River deposits on Baffin Island by about half, blaming an early spring melt and heavy rain.
The company said Wednesday it now expects to ship between 120,000 and 150,000 tonnes of iron ore to European steelmakers in three trial cargoes, down from a previous target of 250,000 tonnes.
The reduction "is primarily due to the advent of an earlier than anticipated spring melt combined with severe rainfall in the later part of June resulting in a need for extensive construction and maintenance work along the full length of the 100-kilometre tote road to the shipping site at Milne Inlet," Baffinland stated.
"Haulage of the bulk sample on this road has been interrupted for approximately six weeks."
The company added that recent dry weather has expedited work, and haulage is expected to resume by the end of this month.
To date 166,956 tonnes of ore has been blasted, with 98,400 tonnes crushed and 39,048 tonnes moved to Milne Inlet.
Source: Canadian Press
The company said Wednesday it now expects to ship between 120,000 and 150,000 tonnes of iron ore to European steelmakers in three trial cargoes, down from a previous target of 250,000 tonnes.
The reduction "is primarily due to the advent of an earlier than anticipated spring melt combined with severe rainfall in the later part of June resulting in a need for extensive construction and maintenance work along the full length of the 100-kilometre tote road to the shipping site at Milne Inlet," Baffinland stated.
"Haulage of the bulk sample on this road has been interrupted for approximately six weeks."
The company added that recent dry weather has expedited work, and haulage is expected to resume by the end of this month.
To date 166,956 tonnes of ore has been blasted, with 98,400 tonnes crushed and 39,048 tonnes moved to Milne Inlet.
Source: Canadian Press
Wednesday, July 9, 2008
South Aricans See Higher Ferrochrome Prices
South African ferrochrome producers are expecting prices for the metal to rise more than 10% in the fourth quarter.
Mr Jasper Pieters operations director of Hernic Ferrochrome told Reuters at a ferroalloy meeting in Johannesburg that input prices were soaring and ferrochrome may follow suit. He said that "We see almost a monthly increase in various input costs: fuel, coking coal, coal, mining costs.”
He added that "I see ferrochrome prices increasing more than 10% or higher depending on the input costs."Benchmark ferrochrome prices, rose in Europe by 6.8% for the third quarter, to a record level of USD 2.05 per pound, up from USD 1.92 per pound in the second quarter of 2008. Analysts had hoped for a jump of 15% to 20% to USD 2.20 to USD 2.30 per short ton.
Source: Steel Guru
Mr Jasper Pieters operations director of Hernic Ferrochrome told Reuters at a ferroalloy meeting in Johannesburg that input prices were soaring and ferrochrome may follow suit. He said that "We see almost a monthly increase in various input costs: fuel, coking coal, coal, mining costs.”
He added that "I see ferrochrome prices increasing more than 10% or higher depending on the input costs."Benchmark ferrochrome prices, rose in Europe by 6.8% for the third quarter, to a record level of USD 2.05 per pound, up from USD 1.92 per pound in the second quarter of 2008. Analysts had hoped for a jump of 15% to 20% to USD 2.20 to USD 2.30 per short ton.
Source: Steel Guru
Chinese Firm Signs Gabon Iron Ore Deal
China National Machinery and Equipment Import and Export Corporation (CMEC) said it has signed an agreement on mineral rights of the Belinga iron ore reserves with the Gabonese government.
A joint venture company will run the Belinga mine and its supporting infrastructure for 25 years, and is expected to have access to 30 million tons annually.
The exploration and construction costs will be more than $790 million, including the construction of 500 km railways, dams and deepwater ports, according to a report by Shanghai Securities News.
So far, the Belinga iron ore project is China's largest resource investment in Africa.
The mineral right agreement is part of a pact, which was reached in 2006 between CMEC and the Gabonese government to construct and run the Belinga iron ore reserves.
Under the agreement, Chinese enterprises headed by CMEC will further exploit the Belinga iron ore deposit and construct railways, ports and hydropower plants in cooperation with the Gabonese government.
The Export-Import Bank of China will finance the whole project.
Experts said once completed, the ratio of iron ore imports from Africa in China's total imports will be largely increased. It not only can diversify the country's iron ore import channels, but also crucial to its strategic reserves of iron ore.
With China's booming economy, its iron ore imports reached 380 million tons last year. In 2006 it reached 326 million tons and 275 million tons in 2005.
China's iron ore imports may exceed 625 million tons by 2012, accounting for about 67 percent of the world's cross-continent trade, said Zhu Kai, China president of Vale, a global mining company headquartered in Brazil.
"Chinese enterprises have to seek opportunities to exploit iron ore overseas, since it might be a way to obtain overseas resources and escape the impacts of the soaring prices," said Xu Yingchun, director of Lange Steel Information Research Center.
"Chinese enterprises can invest in foreign resources by setting up joint venture companies," said Jeremy South, steel specialist of Deloitte.
Belinga iron ore reserves was discovered in 1955 at Belinga, which lies in remote forest hills 500 km east of Libreville, the capital and port on Gabon's Atlantic coast. It has proven reserves of more than 500 million tons.
Source: China Daily
A joint venture company will run the Belinga mine and its supporting infrastructure for 25 years, and is expected to have access to 30 million tons annually.
The exploration and construction costs will be more than $790 million, including the construction of 500 km railways, dams and deepwater ports, according to a report by Shanghai Securities News.
So far, the Belinga iron ore project is China's largest resource investment in Africa.
The mineral right agreement is part of a pact, which was reached in 2006 between CMEC and the Gabonese government to construct and run the Belinga iron ore reserves.
Under the agreement, Chinese enterprises headed by CMEC will further exploit the Belinga iron ore deposit and construct railways, ports and hydropower plants in cooperation with the Gabonese government.
The Export-Import Bank of China will finance the whole project.
Experts said once completed, the ratio of iron ore imports from Africa in China's total imports will be largely increased. It not only can diversify the country's iron ore import channels, but also crucial to its strategic reserves of iron ore.
With China's booming economy, its iron ore imports reached 380 million tons last year. In 2006 it reached 326 million tons and 275 million tons in 2005.
China's iron ore imports may exceed 625 million tons by 2012, accounting for about 67 percent of the world's cross-continent trade, said Zhu Kai, China president of Vale, a global mining company headquartered in Brazil.
"Chinese enterprises have to seek opportunities to exploit iron ore overseas, since it might be a way to obtain overseas resources and escape the impacts of the soaring prices," said Xu Yingchun, director of Lange Steel Information Research Center.
"Chinese enterprises can invest in foreign resources by setting up joint venture companies," said Jeremy South, steel specialist of Deloitte.
Belinga iron ore reserves was discovered in 1955 at Belinga, which lies in remote forest hills 500 km east of Libreville, the capital and port on Gabon's Atlantic coast. It has proven reserves of more than 500 million tons.
Source: China Daily
NMDC May Acquire Armenia Iron Ore Mines
India’s state-run National Mineral Development Corp.'s (NMDC) proposed joint venture with Spice Minerals and Metals may acquire two iron-ore deposits in Armenia with an investment of $500 million (21.73 billion rupees), the Business Standard reported quoting NMDC's chairman and managing director, Rana Som.
The report quoted Som as saying, 'Two iron ore deposits had been identified with reserves of 300 million tonnes and 75 million tonnes and the final discussion over the acquisition will be held by the weekend.'
The investment will be equally shared between NMDC and its joint venture partner, the paper added.
'We will make pellets and bring them to India through the Poti port in Georgia on the Black Sea. The project also has rail links,' the report quoted Som as saying.
The project could help bridge an anticipated shortage in the light of India's target of a steel capacity of 300 million tonnes by 2020, which would require iron ore reserves of about 14 billion tonnes over 30 years.
NMDC supplies iron ore to Japan's Nippon Steel and JFE Steel Corp. as well as local companies such as JSW Steel, Essar Steel, Ispat Industries.
Source: Hemscott
The report quoted Som as saying, 'Two iron ore deposits had been identified with reserves of 300 million tonnes and 75 million tonnes and the final discussion over the acquisition will be held by the weekend.'
The investment will be equally shared between NMDC and its joint venture partner, the paper added.
'We will make pellets and bring them to India through the Poti port in Georgia on the Black Sea. The project also has rail links,' the report quoted Som as saying.
The project could help bridge an anticipated shortage in the light of India's target of a steel capacity of 300 million tonnes by 2020, which would require iron ore reserves of about 14 billion tonnes over 30 years.
NMDC supplies iron ore to Japan's Nippon Steel and JFE Steel Corp. as well as local companies such as JSW Steel, Essar Steel, Ispat Industries.
Source: Hemscott
Tuesday, July 8, 2008
SA Ferrochrome Producers Hit By Power Crisis
South Africa's power crisis is expected to cut output in the world's top supplier of ferrochrome by 5-10 percent yearly, hurting world supply and ensuring that prices remain firm, officials said on Tuesday.
South Africa has the majority of global reserves for the ferro-alloys manganese and chrome ore, and analysts and markets have kept a close eye on power shortages that have left producers operating at only 90 percent capacity since January.
State-owned power utility Eskom is battling to meet demand in Africa's biggest economy.
Steve Phiri, chief executive officer at South Africa's Merafe Resources said output in the sector would be hit until 2012 when full power is restored once Eskom's planned new generation capacity comes on-stream.
"This will create opportunities for rival producers like Kazakhstan, India and China to step in and take advantage," he said. "South Africa is also losing credibility as a reliable supplier of ferrochrome and hurting investor confidence."
Phiri, who spoke on behalf of South African producers, including rivals Hernic Ferrochrome and Samancor, said: "Will market supply be met? The power crisis will put pressure on the supply of ferrochrome globally. People will celebrate having strong prices, but we know this is artificial."
Dankor Konchar, chairman of Samancor said the biggest threat to South Africa's status at the helm of the ferrochrome output would come from Kazakhstan, which can already produce at much cheaper cost than South Africa.
"If they take this chance and take over as a global leader and take up our customers, it will be very difficult four years down the road to try to win customers back," he said.
The power crunch, coupled with the growth in the Chinese stainless steel sector has sent ferro-chrome prices soaring.
Similarly strong demand from the end user sector and short supply has also contributed to record prices for manganese ore.
"We are in serious trouble, and we are going to be in this mess for a long time to come," Algie Kiewitz, Eskom's acting general manager for transmission and customer service.
"The country does not have enough sufficient generation capacity to meet demand at all times; this is the reality we have to face."
He told the ferrochrome sector that Eskom has taken into consideration about 99 percent of the industry's power needs under its plans for a 5-year, 350 billion rand ($44 billion) programme to add new power capacity.
He said Eskom has set aside some 1,000 megwatts for the ferrochrome and the manganese sectors' future growth plans, to come on stream by around 2012. At the moment, he urged the sector and other big power users to cut demand by 10 percent.
"The system is still extremely vulnerable," he said.
The country's gold and platinum mines were shut for five days in January as the power crisis worsened, curbing output and sending precious metal prices soaring.
Andre Wilkens, the chief executive of African Rainbow Minerals (ARM) said ferrochrome smelters at the diversified mining firm had been hit by the power crisis.
"We have seen a 10 percent reduction in output from our smelters, but our coal and platinum mines are shallow and we have coped better," Wilkens said.
Worried participants said the big question was whether South Africa is still offering competitive advantages in the sector.
Kiewitz said that despite the crisis, and even with a power tariff increase of 27.5 percent by Eskom for the 2008/09, South Africa was still a competitive destination for investment.
Source: Reuters
South Africa has the majority of global reserves for the ferro-alloys manganese and chrome ore, and analysts and markets have kept a close eye on power shortages that have left producers operating at only 90 percent capacity since January.
State-owned power utility Eskom is battling to meet demand in Africa's biggest economy.
Steve Phiri, chief executive officer at South Africa's Merafe Resources said output in the sector would be hit until 2012 when full power is restored once Eskom's planned new generation capacity comes on-stream.
"This will create opportunities for rival producers like Kazakhstan, India and China to step in and take advantage," he said. "South Africa is also losing credibility as a reliable supplier of ferrochrome and hurting investor confidence."
Phiri, who spoke on behalf of South African producers, including rivals Hernic Ferrochrome and Samancor, said: "Will market supply be met? The power crisis will put pressure on the supply of ferrochrome globally. People will celebrate having strong prices, but we know this is artificial."
Dankor Konchar, chairman of Samancor said the biggest threat to South Africa's status at the helm of the ferrochrome output would come from Kazakhstan, which can already produce at much cheaper cost than South Africa.
"If they take this chance and take over as a global leader and take up our customers, it will be very difficult four years down the road to try to win customers back," he said.
The power crunch, coupled with the growth in the Chinese stainless steel sector has sent ferro-chrome prices soaring.
Similarly strong demand from the end user sector and short supply has also contributed to record prices for manganese ore.
"We are in serious trouble, and we are going to be in this mess for a long time to come," Algie Kiewitz, Eskom's acting general manager for transmission and customer service.
"The country does not have enough sufficient generation capacity to meet demand at all times; this is the reality we have to face."
He told the ferrochrome sector that Eskom has taken into consideration about 99 percent of the industry's power needs under its plans for a 5-year, 350 billion rand ($44 billion) programme to add new power capacity.
He said Eskom has set aside some 1,000 megwatts for the ferrochrome and the manganese sectors' future growth plans, to come on stream by around 2012. At the moment, he urged the sector and other big power users to cut demand by 10 percent.
"The system is still extremely vulnerable," he said.
The country's gold and platinum mines were shut for five days in January as the power crisis worsened, curbing output and sending precious metal prices soaring.
Andre Wilkens, the chief executive of African Rainbow Minerals (ARM) said ferrochrome smelters at the diversified mining firm had been hit by the power crisis.
"We have seen a 10 percent reduction in output from our smelters, but our coal and platinum mines are shallow and we have coped better," Wilkens said.
Worried participants said the big question was whether South Africa is still offering competitive advantages in the sector.
Kiewitz said that despite the crisis, and even with a power tariff increase of 27.5 percent by Eskom for the 2008/09, South Africa was still a competitive destination for investment.
Source: Reuters
Construction To Commence At Thai Steel Smelter
Sahaviriya Iron and Steel Co (SIS), the operator of a 500-billion-baht smelting plant, expects to start construction by the fourth quarter of this year once it receives the green light on environmental assessment, financing and investment privileges, says acting president Win Viriyaprapaikit.
The subsidiary of the Sahaviriya Group is now waiting for the approval of its environmental impact assessment (EIA) report and plans to submit an application for investment privileges to the Board of Investment (BoI) soon.
''I hope we will wrap up all legal documents within the third quarter. Once we get all the papers done, the construction will begin immediately,'' said Mr Win, also the president of SET-listed Sahaviriya Steel Industry Plc, the country's largest hot-rolled steel coil manufacturer.
The smelting project has been delayed by two years due to strong opposition by activists and local communities who fear the project's impact on their neighbourhoods.
While appeasing local communities and stakeholders, SIS has made a big stride by securing an equipment and procurement contract (EPC) for the project with Sino-International Heavy Industry Technology (Sino-HIT), which leads a consortium of Chinese equipment and technology suppliers.
The contract was signed on July 1 in a ceremony attended by Prime Minister Samak Sundaravej during his Beijing visit, which was viewed by the company as a gesture of full government support.
The contract, valued at 10 billion renminbi, covers the project's first phase with a total production capacity of five million tonnes per year.
The contract also allows the same Chinese suppliers to work on the remaining phases.
The five-phase project aims to produce 33 million tonnes of steel and is scheduled to be fully completed in 15 years. The strong baht, however, might help lower the cost of the project from the original 500 billion baht.
The Chinese consortium is responsible for providing turnkey services, from plant construction and equipment procurement to production preparation. The entire process is expected to be completed within 24 months.
SIS's contract with the Chinese has helped improve its chances of securing more loans from Chinese state and private financial institutions.
''We expect to gain a syndicated loan covering the total cost of 10 billion renminbi and a seven-year repayment term,'' Mr Win said.
For its part, SIS has spent several billion baht over the last three years on engineering and ground work at the site in Bang Saphan, Prachuap Khiri Khan.
SIS hopes to soon conclude financing deals, along with purchasing contracts for ore with world exporters. World ore prices have risen by 65-80% over the past year on average in line with oil and other commodity goods.
For its initial production capacity of five million tonnes, SIS would need around eight million tonnes of ore.
Due to the high costs of raw materials, steel prices doubled in the first half of 2008. SSI expects to record sales of nearly 50 billion baht this year, up from 30 billion baht a year earlier, on the back of higher prices.
Its sales rise would also come from a higher utilisation rate, which increased slightly to half of its full capacity of four million tonnes from below two million last year.
Mr Win, however, declined to discuss margins but said he planned to run at full capacity when the smelter started operation. The smelter would help reduce SSI's costs by 35% as it would no longer need to import materials such as slab, scrap and billet.
Source: Bangkok Post
See Also
The subsidiary of the Sahaviriya Group is now waiting for the approval of its environmental impact assessment (EIA) report and plans to submit an application for investment privileges to the Board of Investment (BoI) soon.
''I hope we will wrap up all legal documents within the third quarter. Once we get all the papers done, the construction will begin immediately,'' said Mr Win, also the president of SET-listed Sahaviriya Steel Industry Plc, the country's largest hot-rolled steel coil manufacturer.
The smelting project has been delayed by two years due to strong opposition by activists and local communities who fear the project's impact on their neighbourhoods.
While appeasing local communities and stakeholders, SIS has made a big stride by securing an equipment and procurement contract (EPC) for the project with Sino-International Heavy Industry Technology (Sino-HIT), which leads a consortium of Chinese equipment and technology suppliers.
The contract was signed on July 1 in a ceremony attended by Prime Minister Samak Sundaravej during his Beijing visit, which was viewed by the company as a gesture of full government support.
The contract, valued at 10 billion renminbi, covers the project's first phase with a total production capacity of five million tonnes per year.
The contract also allows the same Chinese suppliers to work on the remaining phases.
The five-phase project aims to produce 33 million tonnes of steel and is scheduled to be fully completed in 15 years. The strong baht, however, might help lower the cost of the project from the original 500 billion baht.
The Chinese consortium is responsible for providing turnkey services, from plant construction and equipment procurement to production preparation. The entire process is expected to be completed within 24 months.
SIS's contract with the Chinese has helped improve its chances of securing more loans from Chinese state and private financial institutions.
''We expect to gain a syndicated loan covering the total cost of 10 billion renminbi and a seven-year repayment term,'' Mr Win said.
For its part, SIS has spent several billion baht over the last three years on engineering and ground work at the site in Bang Saphan, Prachuap Khiri Khan.
SIS hopes to soon conclude financing deals, along with purchasing contracts for ore with world exporters. World ore prices have risen by 65-80% over the past year on average in line with oil and other commodity goods.
For its initial production capacity of five million tonnes, SIS would need around eight million tonnes of ore.
Due to the high costs of raw materials, steel prices doubled in the first half of 2008. SSI expects to record sales of nearly 50 billion baht this year, up from 30 billion baht a year earlier, on the back of higher prices.
Its sales rise would also come from a higher utilisation rate, which increased slightly to half of its full capacity of four million tonnes from below two million last year.
Mr Win, however, declined to discuss margins but said he planned to run at full capacity when the smelter started operation. The smelter would help reduce SSI's costs by 35% as it would no longer need to import materials such as slab, scrap and billet.
Source: Bangkok Post
See Also
Sinosteel On Brink Of Midwest Takeover
Sinosteel Corp is on the cusp of gaining control of Midwest Corporation after four of the company's directors decided to tend their own shareholding into the $1.36 billion takeover offer.
Midwest chairman Jesse Taylor and directors Francis Ng, Steven Chong and Stephen de Belle, have decided to accept the $6.38 cash per share bid offer for their collective 4.1 per cent holding in the company.
This will give Sinosteel, China's second largest iron ore trader, a 49.68 per cent holding in iron ore miner, Midwest.
The decision by Midwest directors to accept the Sinosteel takeover bid comes after the Chinese group upped its stake in the company to 45.58 per cent and Murchison Metals shelved a merger proposal with the iron ore miner.
Murchison terminated the merger proposal after failing to gain support from Sinosteel, Midwest's largest shareholder.
However, Murchison has vowed to stifle Sinosteel's takeover by not accepting the bid for its 10 per cent holding in Midwest, which effectively blocks a compulsory takeover of the company.
Sinosteel's takeover attempt could be further frustrated by Murchison's largest shareholder - Harbinger Capital Partners - which holds a 9.11 per cent stake in Midwest.
Midwest directors Dato David Law and Datuk Roger Tan, which hold about 13.1 per cent of the company between them, are yet to decide whether to accept the Sinosteel offer.
Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.
Source: News.com.au
Midwest chairman Jesse Taylor and directors Francis Ng, Steven Chong and Stephen de Belle, have decided to accept the $6.38 cash per share bid offer for their collective 4.1 per cent holding in the company.
This will give Sinosteel, China's second largest iron ore trader, a 49.68 per cent holding in iron ore miner, Midwest.
The decision by Midwest directors to accept the Sinosteel takeover bid comes after the Chinese group upped its stake in the company to 45.58 per cent and Murchison Metals shelved a merger proposal with the iron ore miner.
Murchison terminated the merger proposal after failing to gain support from Sinosteel, Midwest's largest shareholder.
However, Murchison has vowed to stifle Sinosteel's takeover by not accepting the bid for its 10 per cent holding in Midwest, which effectively blocks a compulsory takeover of the company.
Sinosteel's takeover attempt could be further frustrated by Murchison's largest shareholder - Harbinger Capital Partners - which holds a 9.11 per cent stake in Midwest.
Midwest directors Dato David Law and Datuk Roger Tan, which hold about 13.1 per cent of the company between them, are yet to decide whether to accept the Sinosteel offer.
Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.
Source: News.com.au
Posco Faces Delay In Iron Ore Supplies To Indian Plant
Posco, Asia's third-biggest steelmaker, may be forced to buy iron ore to feed its $12 billion steel plant in India should the government fail to award it a license to mine ore.
``There is a possibility of iron ore requirement coming ahead of our captive mining operations,'' S. K. Mahapatra, general manager at Posco India said today in an interview. ``In this situation, the state government has agreed to make the iron ore required available.''
Land disputes and delays in allocating mining licenses have stopped South Korea-based Posco from proceeding with potentially the biggest overseas investment in India. The company is yet to begin building the 12 million metric ton steel plant in Orissa state. Work was scheduled to start in April 2007.
``This decision to begin work as soon as they can and not wait for iron ore mines is a positive step since they are keen to set up this plant to tap India's demand,'' A.S. Firoz, an independent steel strategy analyst and former chief economist at India's steel ministry, said.
Posco joins ArcelorMittal in seeking to expand in Asia, where steel usage is growing faster than in Europe and the U.S. Posco faces opposition in Orissa as locals and political parties want the plant to move to non-arable areas from farmlands.
Indian Prime Minister Manmohan Singh pledged in a summit with South Korean President Lee Myung Bak in Japan that he will do his best to help Posco start construction work on the plant in August, according to a statement posted today on the Web site of South Korea's presidential office.
Initially, Posco will build a 4 million metric ton steel plant and set up a 400-megawatt power plant.
Source: Bloomberg
``There is a possibility of iron ore requirement coming ahead of our captive mining operations,'' S. K. Mahapatra, general manager at Posco India said today in an interview. ``In this situation, the state government has agreed to make the iron ore required available.''
Land disputes and delays in allocating mining licenses have stopped South Korea-based Posco from proceeding with potentially the biggest overseas investment in India. The company is yet to begin building the 12 million metric ton steel plant in Orissa state. Work was scheduled to start in April 2007.
``This decision to begin work as soon as they can and not wait for iron ore mines is a positive step since they are keen to set up this plant to tap India's demand,'' A.S. Firoz, an independent steel strategy analyst and former chief economist at India's steel ministry, said.
Posco joins ArcelorMittal in seeking to expand in Asia, where steel usage is growing faster than in Europe and the U.S. Posco faces opposition in Orissa as locals and political parties want the plant to move to non-arable areas from farmlands.
Indian Prime Minister Manmohan Singh pledged in a summit with South Korean President Lee Myung Bak in Japan that he will do his best to help Posco start construction work on the plant in August, according to a statement posted today on the Web site of South Korea's presidential office.
Initially, Posco will build a 4 million metric ton steel plant and set up a 400-megawatt power plant.
Source: Bloomberg
BHP Agrees Iron Ore Prices With Japanese Steelmakers
Nippon Steel Corp., the world's second-biggest steelmaker has accepted a record increase in iron ore prices from BHP Billiton Ltd., matching a doubling of prices agreed last month with Rio Tinto Group.
The steelmaker, which in April said higher costs would pare annual profit 41 percent, will pay BHP as much as 97 percent more for ore, Masato Suzuki, a spokesman for the Tokyo-based company said today by phone. JFE Holdings Inc., Japan's second-biggest mill, also accepted the BHP increase, said an official for the company's steelmaking unit, who asked not to be identified.
The BHP contracts, the last to be settled among Asian steelmakers and the world's three biggest suppliers of iron ore, marked the first year in which miners in Australia gained bigger price increases than rivals in Brazil. Nippon Steel and its largest Asian rivals in February agreed to increases of as much as 71 percent from Cia. Vale do Rio Doce, the world's biggest iron-ore producer.
Iron ore prices have gained almost fourfold since 2001 to a record, increasing costs for Japanese steelmakers, which rely exclusively on imported materials. It's the first time the year's initial agreement on ore price wasn't accepted as the benchmark.
Baosteel Group Corp., China's biggest mill, last week accepted an increase of as much as 97 percent for ore from BHP, the world's biggest mining company. This matched an increase won last month from Asian steelmakers by Rio Tinto Group, the world's second-biggest iron-ore supplier.
``We can confirm we have settled with all our Japanese customers,'' Emma Meade, a spokeswoman for Melbourne-based BHP said today. She confirmed the contract price agreements were for the same price as last week's with Baosteel.
Source: Bloomberg
The steelmaker, which in April said higher costs would pare annual profit 41 percent, will pay BHP as much as 97 percent more for ore, Masato Suzuki, a spokesman for the Tokyo-based company said today by phone. JFE Holdings Inc., Japan's second-biggest mill, also accepted the BHP increase, said an official for the company's steelmaking unit, who asked not to be identified.
The BHP contracts, the last to be settled among Asian steelmakers and the world's three biggest suppliers of iron ore, marked the first year in which miners in Australia gained bigger price increases than rivals in Brazil. Nippon Steel and its largest Asian rivals in February agreed to increases of as much as 71 percent from Cia. Vale do Rio Doce, the world's biggest iron-ore producer.
Iron ore prices have gained almost fourfold since 2001 to a record, increasing costs for Japanese steelmakers, which rely exclusively on imported materials. It's the first time the year's initial agreement on ore price wasn't accepted as the benchmark.
Baosteel Group Corp., China's biggest mill, last week accepted an increase of as much as 97 percent for ore from BHP, the world's biggest mining company. This matched an increase won last month from Asian steelmakers by Rio Tinto Group, the world's second-biggest iron-ore supplier.
``We can confirm we have settled with all our Japanese customers,'' Emma Meade, a spokeswoman for Melbourne-based BHP said today. She confirmed the contract price agreements were for the same price as last week's with Baosteel.
Source: Bloomberg
Monday, July 7, 2008
POSCO To Develop New Caledonia Nickel Mines
South Korean steelmaker POSCO said on Monday that it has received approval to develop five nickel mines in New Caledonia and export the ore to South Korea over the next 30 years.
The world's fourth-largest steelmaker said the deal approved by the government and parliament in Noumea would ensure a supply of 30,000 tons of nickel a year and raise cost competitiveness.
In 2006 POSCO spent $350 million to set up two joint ventures -- NMC, a nickel mine development company, and SNNC, a nickel processing company -- with SMSP, the largest exporter of nickel ore in the French-controlled island.
POSCO said SNNC's plant at the south coast port of Gwangyang would start commercial production in September.
The world's fourth-largest steelmaker said the deal approved by the government and parliament in Noumea would ensure a supply of 30,000 tons of nickel a year and raise cost competitiveness.
In 2006 POSCO spent $350 million to set up two joint ventures -- NMC, a nickel mine development company, and SNNC, a nickel processing company -- with SMSP, the largest exporter of nickel ore in the French-controlled island.
POSCO said SNNC's plant at the south coast port of Gwangyang would start commercial production in September.
EU Fears Over Rio Tinto-BHP Merger
The insistence of BHP Billiton's chief executive, Marius Kloppers, that his company's bid for Rio Tinto is about "more volume, more quickly" rather than increased pricing power faces a potentially deal-breaking test by Europe's competition regulator.
On Friday the European Commission started a "phase two" investigation into the proposed $US170 billion ($176.5 billion) deal. The inquiry could scupper the merger, depending on the extent of remedies required for approval.
The investigation is due to conclude on December 9 but the commission could extend it.
BHP has long prepared for the second-stage process, having admitted the deal was unlikely to be cleared in the first.
The commission said concerns had arisen regarding the markets for iron ore, coal, uranium, aluminium and mineral sands, but its statement appeared to focus particularly on the steel-making materials of iron ore and coking coal.
Analysts believe BHP is most concerned about maintaining control of Rio Tinto's Pilbara iron ore operations because their combination would represent the greatest opportunity for cost savings. When BHP launched its formal bid for Rio in February - conditional on commission approval - it maintained its right to drop the bid if Rio disposed of any material iron ore assets in the context of that division.
For all other divisions, BHP reserved the right only to withdraw its offer if the disposal or acquisition was material in the context of Rio as a whole. The commission is expected to release its objections by September. BHP could use this as the basis for offering specific remedies.
Last week, the steel producer ArcelorMittal expressed interest in buying Rio's Canadian iron ore business if it was sold as part of the merger. But given the Canadian business supplies a different type of ore to a different market from the Australian business, it is unclear whether the commission would accept this as an appropriate remedy. In a statement that was unlikely to surprise the market, based on objections already voiced by steel makers, the commission said the merged company's market power in iron ore and coking coal meant there was a serious risk that the takeover could have a negative effect on the outcome of pricing negotiations with steel customers.
But the commission also took issue with Mr Kloppers' claim that the merger would benefit customers by providing BHP with the ability to increase volume more quickly.
"There is a serious risk that the merged entity might have the incentive to reduce the scale of its investment projects or slow down such investment, and so reduce supplies available on the market and increase prices," the commission said.
A BHP spokeswoman did not clarify whether the company could give undertakings that it would proceed with both companies' planned development pipelines in order to assuage those concerns.
In addition to iron ore and coking coal, the commission said nuclear power plant operators had raised questions over the increased concentration in the uranium industry.
In a brief statement, it added that there were also concerns over aluminium and mineral sands. It did not raise questions over the copper and diamond markets.
Source: Sydney Morning Herald
On Friday the European Commission started a "phase two" investigation into the proposed $US170 billion ($176.5 billion) deal. The inquiry could scupper the merger, depending on the extent of remedies required for approval.
The investigation is due to conclude on December 9 but the commission could extend it.
BHP has long prepared for the second-stage process, having admitted the deal was unlikely to be cleared in the first.
The commission said concerns had arisen regarding the markets for iron ore, coal, uranium, aluminium and mineral sands, but its statement appeared to focus particularly on the steel-making materials of iron ore and coking coal.
Analysts believe BHP is most concerned about maintaining control of Rio Tinto's Pilbara iron ore operations because their combination would represent the greatest opportunity for cost savings. When BHP launched its formal bid for Rio in February - conditional on commission approval - it maintained its right to drop the bid if Rio disposed of any material iron ore assets in the context of that division.
For all other divisions, BHP reserved the right only to withdraw its offer if the disposal or acquisition was material in the context of Rio as a whole. The commission is expected to release its objections by September. BHP could use this as the basis for offering specific remedies.
Last week, the steel producer ArcelorMittal expressed interest in buying Rio's Canadian iron ore business if it was sold as part of the merger. But given the Canadian business supplies a different type of ore to a different market from the Australian business, it is unclear whether the commission would accept this as an appropriate remedy. In a statement that was unlikely to surprise the market, based on objections already voiced by steel makers, the commission said the merged company's market power in iron ore and coking coal meant there was a serious risk that the takeover could have a negative effect on the outcome of pricing negotiations with steel customers.
But the commission also took issue with Mr Kloppers' claim that the merger would benefit customers by providing BHP with the ability to increase volume more quickly.
"There is a serious risk that the merged entity might have the incentive to reduce the scale of its investment projects or slow down such investment, and so reduce supplies available on the market and increase prices," the commission said.
A BHP spokeswoman did not clarify whether the company could give undertakings that it would proceed with both companies' planned development pipelines in order to assuage those concerns.
In addition to iron ore and coking coal, the commission said nuclear power plant operators had raised questions over the increased concentration in the uranium industry.
In a brief statement, it added that there were also concerns over aluminium and mineral sands. It did not raise questions over the copper and diamond markets.
Source: Sydney Morning Herald
Indian Government Allocates 23 Coal Blocks
The Indian government is understood to have approved the allocation of 23 coking and non-coking coal blocks to leading steel, cement and power producers, including Essar, JSPL, Grasim, Monnet and Ispat.
While four coking coal blocks have been allocated in Madhya Pradesh, the other 19 non-coking blocks are in West Bengal, Madhya Pradesh, Chhatisgarh, Jharkhand, Maharashtra and Andhra Pradesh, according to the Press Trust of India.
In its meeting held last week, the Screening Committee of the Coal Ministry, headed by Coal Secretary H C Gupta, decided to allocate the Behrabandh coking coal block to Vinod Mittal-led Ispat Industries on a sharing basis with Essar, Mukund Steel and Ind Synergy.
Of the total 170 million tons reserves, Ispat Industries was allocated 70 million tons, while Essar and Mukund 53 and 25 million tons respectively. Orissa's Ind Synergy got the rest.
Coking coal is a major raw material for steel making in addition to iron ore.
The committee has also approved the Urtan coking coal block, which has an estimated reserves of about 42 million tons, to Jindal Steel and Power Ltd and Monnet Ispat on a sharing basis.
The Urtan North coking coal block with estimated reserves of about 54 million tons was approved for Bhushan Steel and Prakash Industries.
Of the major non-coking coal blocks, Moira and Madhujore (North and South) in West Bengal were allocated to Adhunik Group on a sharing basis with Uttam Galva, ACC, Vikas Metal and Power Ltd, Mideast Integrated and Ramsarup Lohh Udyog.
The block has a reserve of over 685 million tons, of which Adhunik Group was allocated the maximum 30 per cent of the total reserves.
Source: Press Trust Of India
While four coking coal blocks have been allocated in Madhya Pradesh, the other 19 non-coking blocks are in West Bengal, Madhya Pradesh, Chhatisgarh, Jharkhand, Maharashtra and Andhra Pradesh, according to the Press Trust of India.
In its meeting held last week, the Screening Committee of the Coal Ministry, headed by Coal Secretary H C Gupta, decided to allocate the Behrabandh coking coal block to Vinod Mittal-led Ispat Industries on a sharing basis with Essar, Mukund Steel and Ind Synergy.
Of the total 170 million tons reserves, Ispat Industries was allocated 70 million tons, while Essar and Mukund 53 and 25 million tons respectively. Orissa's Ind Synergy got the rest.
Coking coal is a major raw material for steel making in addition to iron ore.
The committee has also approved the Urtan coking coal block, which has an estimated reserves of about 42 million tons, to Jindal Steel and Power Ltd and Monnet Ispat on a sharing basis.
The Urtan North coking coal block with estimated reserves of about 54 million tons was approved for Bhushan Steel and Prakash Industries.
Of the major non-coking coal blocks, Moira and Madhujore (North and South) in West Bengal were allocated to Adhunik Group on a sharing basis with Uttam Galva, ACC, Vikas Metal and Power Ltd, Mideast Integrated and Ramsarup Lohh Udyog.
The block has a reserve of over 685 million tons, of which Adhunik Group was allocated the maximum 30 per cent of the total reserves.
Source: Press Trust Of India
Murchison Aims To Block Midwest Takeover
Murchison Metals Ltd has vowed to stifle Sinosteel Corp's $A1.36 billion takeover bid for Midwest Corporation after the Chinese commodity trader refused to support a merger of the two iron ore companies.
Murchison on Monday terminated the planned merger with Midwest after failing to gain support from the iron ore company's major shareholder Sinosteel, China's second largest iron ore trader.
"We believe that there is potential for there to be greater value in remaining a shareholder of Midwest than accepting the Sinosteel offer," Murchison executive chairman Paul Kopejtka said in a statement.
The refusal by Murchison to accept the $6.38 cash per share bid for its 10 per cent stake will effectively block a compulsory takeover of Midwest.
Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.
Sinosteel holds 45.58 per cent of Midwest, while Murchison's largest shareholder, Harbinger Capital Partners, has a 9.11 per cent stake.
Murchison proposed in May a reverse takeover for Midwest that was engineered to prevent Sinosteel, which at the time held 19.89 per cent of Midwest, from blocking the merger deal.
The reverse takeover was structured so that Midwest only required 50.1 per cent of votes cast in favour of the merger to approve the deal.
However, Sinosteel declared its takeover free of conditions and proceeded to raise its stake in Midwest.
Sinosteel launched a hostile bid for Midwest in March, valued originally at $1.2 billion, or $5.60 per share, after the two companies were unable to agree to terms on an earlier takeover proposal, also pitched at $5.60 a share, which Midwest said undervalued the company.
The Chinese trader, which has a 2.4 per cent stake in Murchison, sweetened the bid in April to $6.38 cash per share and declared the takeover offer unconditional last month.
Midwest shares closed unchanged at $6.38, while Murchison lost 10 cents to $2.90.
Source: The Melbourne Age
Murchison on Monday terminated the planned merger with Midwest after failing to gain support from the iron ore company's major shareholder Sinosteel, China's second largest iron ore trader.
"We believe that there is potential for there to be greater value in remaining a shareholder of Midwest than accepting the Sinosteel offer," Murchison executive chairman Paul Kopejtka said in a statement.
The refusal by Murchison to accept the $6.38 cash per share bid for its 10 per cent stake will effectively block a compulsory takeover of Midwest.
Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.
Sinosteel holds 45.58 per cent of Midwest, while Murchison's largest shareholder, Harbinger Capital Partners, has a 9.11 per cent stake.
Murchison proposed in May a reverse takeover for Midwest that was engineered to prevent Sinosteel, which at the time held 19.89 per cent of Midwest, from blocking the merger deal.
The reverse takeover was structured so that Midwest only required 50.1 per cent of votes cast in favour of the merger to approve the deal.
However, Sinosteel declared its takeover free of conditions and proceeded to raise its stake in Midwest.
Sinosteel launched a hostile bid for Midwest in March, valued originally at $1.2 billion, or $5.60 per share, after the two companies were unable to agree to terms on an earlier takeover proposal, also pitched at $5.60 a share, which Midwest said undervalued the company.
The Chinese trader, which has a 2.4 per cent stake in Murchison, sweetened the bid in April to $6.38 cash per share and declared the takeover offer unconditional last month.
Midwest shares closed unchanged at $6.38, while Murchison lost 10 cents to $2.90.
Source: The Melbourne Age
Shandong Steel Mills Face CNY8 Billion Cost Increase
According China’s provincial Economics & Trade Committee, BaoSteel’s agreement to pay 85% more for Rio Tinto's iron ore this year would lead to an increase of CNY 7.96 billion for steelmaking costs for steel mills in Shandong, where iron ore imports have hit 58.96 million tonnes last year.
It's the sixth year of steep contract ore price rise, which would push up input costs for domestic steel mills further higher. And statistics show that China has imported 145.6 million tonnes of iron ore from Australia last year, accounting for 38% of the country's total ore imports, out of which 80% is from Rio and BHP.
Shandong has become more dependent on overseas important resources and local iron ore imports have jumped 7.2 times to 58.96 million tonnes last year from 7.15 million tonnes in 2000. Local iron ore imports have hit 32.58 million tonnes in the first five months of this year with import values of USD 4.26 billion up by 23.5% year-on-year and 80% year-on-year.
Of the total ore imports last year, 21.44 million tonnes of 36.4% are from Australia, and the overall 85% ore price rise this year will add input costs of CNY 7.96 billion for steel mills in the province.
Source: Steel Prices India
It's the sixth year of steep contract ore price rise, which would push up input costs for domestic steel mills further higher. And statistics show that China has imported 145.6 million tonnes of iron ore from Australia last year, accounting for 38% of the country's total ore imports, out of which 80% is from Rio and BHP.
Shandong has become more dependent on overseas important resources and local iron ore imports have jumped 7.2 times to 58.96 million tonnes last year from 7.15 million tonnes in 2000. Local iron ore imports have hit 32.58 million tonnes in the first five months of this year with import values of USD 4.26 billion up by 23.5% year-on-year and 80% year-on-year.
Of the total ore imports last year, 21.44 million tonnes of 36.4% are from Australia, and the overall 85% ore price rise this year will add input costs of CNY 7.96 billion for steel mills in the province.
Source: Steel Prices India
Sahaviriya To Sign Iron Ore Agreements
Sahaviriya Group, a Thai steel maker, said it expects to sign iron ore purchase agreements with three major producers in the third quarter of this year to secure raw material supply for its planned THB90 billion ($1.5 billion) smelter.
Rio Tinto Ltd. and BHP Billiton Ltd. and Brazil's Vale do Rio Doce will supply a total of eight million tons of iron ore a year to Sahaviriya Iron & Steel Co. for at least seven years, the company's acting president Win Viriyaprapaikit said Monday.
Australian iron ore producers will provide around 70% of the total, with the balance from Vale. The iron ore price will be negotiated on a year-on-year basis, Win said.
Sahaviriya Iron & Steel plans to build Thailand's first smelter, with an annual capacity of 5 million tons a year.
The plant, which will take two years to build, is expected to start construction in the fourth quarter of this year, said Win.
The company also expects to sign seven year loan agreements with Chinese banks in the third quarter of this year. It recently signed a THB50 billion agreement with Sino-International Heavy Industry Technology for the Chinese company to supply machinery and provide installation services for its planned smelter.
Over 15 years, Sahaviriya Iron & Steel plans to spend about THB500 billion to increase annual smelter production to 33 million tons
Under the agreement, Sino-International Heavy Industry Technology will also supply machinery and provide services for the smelter's expansion at a cost of about $10 billion.
Rio Tinto Ltd. and BHP Billiton Ltd. and Brazil's Vale do Rio Doce will supply a total of eight million tons of iron ore a year to Sahaviriya Iron & Steel Co. for at least seven years, the company's acting president Win Viriyaprapaikit said Monday.
Australian iron ore producers will provide around 70% of the total, with the balance from Vale. The iron ore price will be negotiated on a year-on-year basis, Win said.
Sahaviriya Iron & Steel plans to build Thailand's first smelter, with an annual capacity of 5 million tons a year.
The plant, which will take two years to build, is expected to start construction in the fourth quarter of this year, said Win.
The company also expects to sign seven year loan agreements with Chinese banks in the third quarter of this year. It recently signed a THB50 billion agreement with Sino-International Heavy Industry Technology for the Chinese company to supply machinery and provide installation services for its planned smelter.
Over 15 years, Sahaviriya Iron & Steel plans to spend about THB500 billion to increase annual smelter production to 33 million tons
Under the agreement, Sino-International Heavy Industry Technology will also supply machinery and provide services for the smelter's expansion at a cost of about $10 billion.
Sunday, July 6, 2008
Taurian Exploring For Manganese Ore In Ivory Coast
Bloomberg has reported that Indian mining company Taurian Resources is exploring for manganese ore in Ivory Coast and is considering building a ferromanganese plant there.
Mr Ansu Bajla director of projects for Africa in an interview in the commercial capital Abidjan said that they began shipping manganese ore earlier this year on a pilot project basis from the eastern Bondoukou region, while feasibility studies are being conducted for two other sites.
Mr Bajla said that they expect to produce at least 1 million tonnes of manganese a year once the mines are fully developed.
Source: Steel Guru
Mr Ansu Bajla director of projects for Africa in an interview in the commercial capital Abidjan said that they began shipping manganese ore earlier this year on a pilot project basis from the eastern Bondoukou region, while feasibility studies are being conducted for two other sites.
Mr Bajla said that they expect to produce at least 1 million tonnes of manganese a year once the mines are fully developed.
Source: Steel Guru
Saturday, July 5, 2008
EU Raises Doubts Over Rio Tinto Takeover
A proposed $170bn takeover of miner Rio Tinto by Australia's BHP Billiton hit a roadblock on Friday when European competition regulators announced an in-depth inquiry into the deal after initial investigations raised "serious doubts".
Neelie Kroes, the EU competition commissioner, warned that a recent surge in commodity prices had significantly affected industries buying commodities produced by the two companies.
"In this very sensitive context, any change making the situation worse could be extremely harmful," she said.
"Therefore the [European] Commission will pay particular attention to ensure that this takeover does not adversely affect competition in Europe."
The Commission said the main commodities at stake in its investigation - which can now run until November 11 - were iron ore, coal, uranium, aluminium and mineral sands.
It said a preliminary investigation found that, after the takeover, the merged company would hold "a significant share" of iron ore supplies and that its share, plus that of its next competitor, would amount to a "very large part of iron ore supplies".
Steelmakers opposed to the deal argue that the merger would mean up to80 per cent of the world seaborne trade in iron ore could be in just two companies' hand - with significant potential implications for pricing power.
The Commission also said that the proposed deal would reinforce BHP Billiton's position in metallurgical coal, "with smaller competitors far behind".
"By increasing the new entity's market power in iron ore and metallurgical coal, there is a serious risk that the planned takeover could have a negative impact on the outcome of price negotiations with steel customers," the Commission said.
"Furthermore, there is a serious risk that the merged entity might have the incentive to reduce the scale of its investment projects or slow down such investment and so reduce supplies available on the market and increase prices," it added.
News that the European regulator is moving to a full-blown investigation comes just a couple of days after the deal obtained effective clearance in the US.
However, the proposed merger is likely to have a much smaller effect there than in Asia and Europe.
In Brussels, the European commission has had a large team working on the matter since early this year.
It has already received submissions from opponents of the deal, including European steelmakers. A longer, in-depth investigation was thought to be a near-certainty in Brussels.
Some advisers and lawyers admit privately that they expect the European inquiry effectively to give a lead to other international regulators who are investigating the deal.
Marius Kloppers, BHP Billiton chief executive, expressed confidence last month that the deal would eventually be cleared but would not say whether assets would need to be sold to obtain approval.
Sourc: Financial Times
Neelie Kroes, the EU competition commissioner, warned that a recent surge in commodity prices had significantly affected industries buying commodities produced by the two companies.
"In this very sensitive context, any change making the situation worse could be extremely harmful," she said.
"Therefore the [European] Commission will pay particular attention to ensure that this takeover does not adversely affect competition in Europe."
The Commission said the main commodities at stake in its investigation - which can now run until November 11 - were iron ore, coal, uranium, aluminium and mineral sands.
It said a preliminary investigation found that, after the takeover, the merged company would hold "a significant share" of iron ore supplies and that its share, plus that of its next competitor, would amount to a "very large part of iron ore supplies".
Steelmakers opposed to the deal argue that the merger would mean up to80 per cent of the world seaborne trade in iron ore could be in just two companies' hand - with significant potential implications for pricing power.
The Commission also said that the proposed deal would reinforce BHP Billiton's position in metallurgical coal, "with smaller competitors far behind".
"By increasing the new entity's market power in iron ore and metallurgical coal, there is a serious risk that the planned takeover could have a negative impact on the outcome of price negotiations with steel customers," the Commission said.
"Furthermore, there is a serious risk that the merged entity might have the incentive to reduce the scale of its investment projects or slow down such investment and so reduce supplies available on the market and increase prices," it added.
News that the European regulator is moving to a full-blown investigation comes just a couple of days after the deal obtained effective clearance in the US.
However, the proposed merger is likely to have a much smaller effect there than in Asia and Europe.
In Brussels, the European commission has had a large team working on the matter since early this year.
It has already received submissions from opponents of the deal, including European steelmakers. A longer, in-depth investigation was thought to be a near-certainty in Brussels.
Some advisers and lawyers admit privately that they expect the European inquiry effectively to give a lead to other international regulators who are investigating the deal.
Marius Kloppers, BHP Billiton chief executive, expressed confidence last month that the deal would eventually be cleared but would not say whether assets would need to be sold to obtain approval.
Sourc: Financial Times
Hungarian Company To Invest In Indian Titanium Mine
A Hungarian company has secured permission from Indian Finance Minister P. Chidambaram to invest Rs.240 million ($6 million) for a 74 percent stake in a company that will mine and separate titanium-bearing minerals. The approval to Global Energy Mining and Minerals KFT of Hungary was given, based on a recommendations of the Foreign Investment Promotion Board (FIPB), said an official statement Friday.
This was part of Chidambaram’s approvals to 28 proposals for foreign direct investment, involving a new inflow of foreign exchange to the tune of Rs.13 billion ($325 million).
Other proposals that have secured the finance minister’s approval include Britain’s Marks and Spencer and Belgium’s Pearle for single-brand retail chains, Macmillian for publishing speciality magazine, and Mikuni of Japan for auto components.
Source: Thaindian
This was part of Chidambaram’s approvals to 28 proposals for foreign direct investment, involving a new inflow of foreign exchange to the tune of Rs.13 billion ($325 million).
Other proposals that have secured the finance minister’s approval include Britain’s Marks and Spencer and Belgium’s Pearle for single-brand retail chains, Macmillian for publishing speciality magazine, and Mikuni of Japan for auto components.
Source: Thaindian
Meteorex Aims To Quadruple Copper Production
Diversified minerals company Metorex could quadruple copper production in the next three years as its Ruashi II mine comes into full production and new projects at Kinsenda and Musonoi are developed, CEO Charles Needham says.
By 2011, Metorex expected to produce 100 000 tons of copper a year, he said this week. There would be additional contributions to the group from growth in its cobalt, gold, platinum and fluorspar operations.
Although production would be dominated by copper in a few years , the company was interested in other commodities in sub-Saharan countries.
Metorex produces 15000 tons of copper a year from its Chibuluma mine in Zambia and 10000 tons a year of copper from the first phase of the Ruashi mine in the Democratic Republic of Congo . The second phase of Ruashi, which is ramping up, will produce 45000 tons a year of copper metal. The company is also producing 500 tons a year of cobalt from Ruashi I, and Ruashi II will produce 3500 tons of cobalt a year.
Since buying 50,3% of AIM-listed Copper Resources Corporation (CRC) this year, Metorex has begun reopening CRC’s Kinsenda underground copper mine in Congo . Kinsenda will produce 35000 tons a year of copper at full production, starting next year.
Metorex has two promising early-stage copper properties in Congo at Musonoi and Lubembe. Needham said Musonoi’s drill results indicated it would be a mine, but management was still studying costs and design.
Metorex planned to release more information about the size of the Musonoi resource at its year-end results presentation next month or sooner. If Metorex decided to proceed with a mine at Musonoi, production could start in 2011.
Metorex planned to boost fluorspar output at its Vergenoegd mine in SA to about 300000 tons a year to service the joint venture Alfluorco project, a hydrofluoric acid processing plant. Needham said the Alfluorco project was progressing through feasibility studies and environmental approvals for a Richards Bay site.Metorex’s 55%-held Pan African Resources was busy with a bankable feasibility study on developing a gold mine at Manica in Mozambique, which could start contributing in 2010 if the board gave it the go-ahead. Metorex was building a concentrator at Phoenix Platinum Mining, a new venture to process dumps for platinum, which would come on stream in 2010.
Source: Business Day, South Africa
By 2011, Metorex expected to produce 100 000 tons of copper a year, he said this week. There would be additional contributions to the group from growth in its cobalt, gold, platinum and fluorspar operations.
Although production would be dominated by copper in a few years , the company was interested in other commodities in sub-Saharan countries.
Metorex produces 15000 tons of copper a year from its Chibuluma mine in Zambia and 10000 tons a year of copper from the first phase of the Ruashi mine in the Democratic Republic of Congo . The second phase of Ruashi, which is ramping up, will produce 45000 tons a year of copper metal. The company is also producing 500 tons a year of cobalt from Ruashi I, and Ruashi II will produce 3500 tons of cobalt a year.
Since buying 50,3% of AIM-listed Copper Resources Corporation (CRC) this year, Metorex has begun reopening CRC’s Kinsenda underground copper mine in Congo . Kinsenda will produce 35000 tons a year of copper at full production, starting next year.
Metorex has two promising early-stage copper properties in Congo at Musonoi and Lubembe. Needham said Musonoi’s drill results indicated it would be a mine, but management was still studying costs and design.
Metorex planned to release more information about the size of the Musonoi resource at its year-end results presentation next month or sooner. If Metorex decided to proceed with a mine at Musonoi, production could start in 2011.
Metorex planned to boost fluorspar output at its Vergenoegd mine in SA to about 300000 tons a year to service the joint venture Alfluorco project, a hydrofluoric acid processing plant. Needham said the Alfluorco project was progressing through feasibility studies and environmental approvals for a Richards Bay site.Metorex’s 55%-held Pan African Resources was busy with a bankable feasibility study on developing a gold mine at Manica in Mozambique, which could start contributing in 2010 if the board gave it the go-ahead. Metorex was building a concentrator at Phoenix Platinum Mining, a new venture to process dumps for platinum, which would come on stream in 2010.
Source: Business Day, South Africa
US Steel Imports Remain Steady
Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute (AISI) reported today that steel import permit applications for the month of June totalled 2,533,000 net tons (NT). This was a 1 percent increase from the 2,514,000 permit tons recorded in May 2008, and a 3 percent increase from the May preliminary imports total of 2,451,000 NT.
Import permit tonnage for finished steel in June was 2,075,000 NT, an increase of 4 percent from the preliminary imports total of 1,998,000 NT in May. For the first six months of 2008 (including June SIMA and May preliminary), total steel imports were 15,684,000 NT, down 12 percent from the 17,822,000 NT imported in the first half of last year. Total steel imports for 2008 would annualize at 31.4 million NT, or 6 percent below the 2007 12-month total.
Source: The Cable Directory
Import permit tonnage for finished steel in June was 2,075,000 NT, an increase of 4 percent from the preliminary imports total of 1,998,000 NT in May. For the first six months of 2008 (including June SIMA and May preliminary), total steel imports were 15,684,000 NT, down 12 percent from the 17,822,000 NT imported in the first half of last year. Total steel imports for 2008 would annualize at 31.4 million NT, or 6 percent below the 2007 12-month total.
Source: The Cable Directory
BHP Agrees Price Increase
BHP Billiton has matched takeover target Rio Tinto with a near doubling in contract iron ore prices, ending months of talks and speculation it may get more.
BHP said on Friday it had secured a 96.5 percent increase for iron ore lumps and a 79.88 percent increase for fines from China's Baosteel for 2008-09, and would roll these out to other customers in Asia.
It indicated the protracted talks were unlikely to tarnish its relations with customers, whom it is trying to persuade to support its hostile bid for Rio.
"At the end of what has been a long process, we believe our relationship with our customers remains as positive and strong as ever," BHP's chief executive for ferrous and coal operations, Marcus Randolph, said in a statement.
Baosteel and other steelmakers have told BHP Chief Executive Marius Kloppers they are worried that a combination of BHP and Rio would have too much power in setting the price of iron ore, the main feedstock for steel.
China already takes half of all the ore that BHP mines. BHP, Rio and Brazil's Vale control about 70 percent of the iron ore that China buys.
"For the industry from mills to iron ore producers, everyone wins," Judy Zhu, analyst at Standard Chartered Bank, said earlier on Friday as word of an agreement started to leak out.
"Iron ore producers will make more money and the steel makers, although they are paying more for their raw materials, will be able to pass these higher costs to their customers. It will be downstream users who will have to bear higher prices."
It is the sixth year in a row iron ore prices have gone up, for a seven-fold increase since 2000.
Vale agreed to a 65-71 percent rise in February, but Rio and BHP had argued that soaring freight rates made Australian ore much cheaper relative to Brazilian grades.
The rare divergence in Australian and Brazilian deals comes at a time when BHP is also pushing to price more of its iron ore on the basis of spot market prices, irking customers such as Baosteel, Nippon Steel Corp and South Korea's POSCO , which are already fuming over its plans to buy Rio and gain more sway over resource supplies.
BHP is offering $152 billion (77 billion pounds) in shares in an unsolicited bid to buy Rio, in part to combine both companies' iron ore mines in Australia.
"Nobody can tell right now exactly how things will be next year. This year it's a new story for everything," said Li Xinchuang, vice president of the China Metallurgical Industry Planning & Research Institute.
The benchmark price each year is closely watched because it also determines what smaller iron ore miners and steel mills worldwide can expect to pay during the 12 month shipping year ending every March 31.
Source: International Herald Tribune
BHP said on Friday it had secured a 96.5 percent increase for iron ore lumps and a 79.88 percent increase for fines from China's Baosteel for 2008-09, and would roll these out to other customers in Asia.
It indicated the protracted talks were unlikely to tarnish its relations with customers, whom it is trying to persuade to support its hostile bid for Rio.
"At the end of what has been a long process, we believe our relationship with our customers remains as positive and strong as ever," BHP's chief executive for ferrous and coal operations, Marcus Randolph, said in a statement.
Baosteel and other steelmakers have told BHP Chief Executive Marius Kloppers they are worried that a combination of BHP and Rio would have too much power in setting the price of iron ore, the main feedstock for steel.
China already takes half of all the ore that BHP mines. BHP, Rio and Brazil's Vale control about 70 percent of the iron ore that China buys.
"For the industry from mills to iron ore producers, everyone wins," Judy Zhu, analyst at Standard Chartered Bank, said earlier on Friday as word of an agreement started to leak out.
"Iron ore producers will make more money and the steel makers, although they are paying more for their raw materials, will be able to pass these higher costs to their customers. It will be downstream users who will have to bear higher prices."
It is the sixth year in a row iron ore prices have gone up, for a seven-fold increase since 2000.
Vale agreed to a 65-71 percent rise in February, but Rio and BHP had argued that soaring freight rates made Australian ore much cheaper relative to Brazilian grades.
The rare divergence in Australian and Brazilian deals comes at a time when BHP is also pushing to price more of its iron ore on the basis of spot market prices, irking customers such as Baosteel, Nippon Steel Corp and South Korea's POSCO , which are already fuming over its plans to buy Rio and gain more sway over resource supplies.
BHP is offering $152 billion (77 billion pounds) in shares in an unsolicited bid to buy Rio, in part to combine both companies' iron ore mines in Australia.
"Nobody can tell right now exactly how things will be next year. This year it's a new story for everything," said Li Xinchuang, vice president of the China Metallurgical Industry Planning & Research Institute.
The benchmark price each year is closely watched because it also determines what smaller iron ore miners and steel mills worldwide can expect to pay during the 12 month shipping year ending every March 31.
Source: International Herald Tribune
Chromex Awarded Chromite Rights At Mecklenburg
Shares in Aim-listed Chromex Mining gained 14.3% on Wednesday, after the firm announced it had been awarded a new-order mining right for its Mecklenburg chromite deposit, in South Africa's Limpopo province.
The project contains a 9.6-million ton underground resource, which Chromex plans to mine over a ten-year period.
The mining right "allows us to accelerate the development of this exciting project and take advantage of the robust chrome market and buoyant prices", said CEO Russell Lamming.
The company plans to tap into water, electricity and tailings infrastructure from Anglo Platinum's Twickenham mine for the operation at Mecklenburg.
The firm's other project, the 15-million ton Stellite chrome deposit, is located on the Western Limb of the Bushveld Complex, and is targeted to produce 30 000 t/m of beneficiated chrome ore by the end of this year, Chromex said on Wednesday.
South Africa is the world's biggest producer of ferrochrome.
Source: Mining Weekly
The project contains a 9.6-million ton underground resource, which Chromex plans to mine over a ten-year period.
The mining right "allows us to accelerate the development of this exciting project and take advantage of the robust chrome market and buoyant prices", said CEO Russell Lamming.
The company plans to tap into water, electricity and tailings infrastructure from Anglo Platinum's Twickenham mine for the operation at Mecklenburg.
The firm's other project, the 15-million ton Stellite chrome deposit, is located on the Western Limb of the Bushveld Complex, and is targeted to produce 30 000 t/m of beneficiated chrome ore by the end of this year, Chromex said on Wednesday.
South Africa is the world's biggest producer of ferrochrome.
Source: Mining Weekly
Eramet Claims That Millions Of Tonnes Of Nickel Ore Are In Chinese Ports
French miner Eramet said on Thursday that it estimates nickel ore stocks amounting to 8.5 million tonnes could be found in warehouses in Chinese ports because of poor profit margins to produce the metal.
Bertrand Madelin, managing director for Eramet's nickel division said: "At the price of today, a lot of nickel pig iron producers are not able to have good results."
Nickel pig iron is used to produce low-grade stainless steel.
Key three-month nickel on the London Metal Exchange MNI3 closed at $21,150 per tonne on Wednesday, down about 20 percent from the beginning of the year and down nearly 60 percent from a record high of $51,800 reached in May 2007.
"Today, we have more than 8.5 million tonnes of nickel ore in the harbours in China, which means we have 100,000 tonnes of nickel but it is only left in the harbour," he told reporters.
Nickel is essential in the production of stainless steel and other corrosion-resistant alloys.
At same news conference, Eramet Chief Executive Patrick Buffet said the company aims to boost its manganese ore production in Gabon to 4 million tonnes by 2010.
This is up 14 percent from its outlook to produce 3.5 million tonnes this year.
The company operates mines in New Caledonia, Gabon and Indonesia. Buffet also said that while Gabon would remain an important asset for the company where a lot of profitable work could still be done, the company was also looking elsewhere for future mining prospects.
He named South Africa, Australia and Namibia as possible candidates.
Eramet officials were in Tokyo for a regular visit to meet Japanese customers.
Source: Reuters
Bertrand Madelin, managing director for Eramet's nickel division said: "At the price of today, a lot of nickel pig iron producers are not able to have good results."
Nickel pig iron is used to produce low-grade stainless steel.
Key three-month nickel on the London Metal Exchange MNI3 closed at $21,150 per tonne on Wednesday, down about 20 percent from the beginning of the year and down nearly 60 percent from a record high of $51,800 reached in May 2007.
"Today, we have more than 8.5 million tonnes of nickel ore in the harbours in China, which means we have 100,000 tonnes of nickel but it is only left in the harbour," he told reporters.
Nickel is essential in the production of stainless steel and other corrosion-resistant alloys.
At same news conference, Eramet Chief Executive Patrick Buffet said the company aims to boost its manganese ore production in Gabon to 4 million tonnes by 2010.
This is up 14 percent from its outlook to produce 3.5 million tonnes this year.
The company operates mines in New Caledonia, Gabon and Indonesia. Buffet also said that while Gabon would remain an important asset for the company where a lot of profitable work could still be done, the company was also looking elsewhere for future mining prospects.
He named South Africa, Australia and Namibia as possible candidates.
Eramet officials were in Tokyo for a regular visit to meet Japanese customers.
Source: Reuters
Australian Coal Price Strong Despite Correction
A sharp pullback in benchmark Australian thermal coal prices is a natural correction after a recent surge, according to analysts.
Market commentators also said prices in Asia were set to stay high with all the indicators pointing to ongoing tightness in the market.
The Newcastle spot coal price fell sharply today, following on from a 20 per cent drop in spot thermal coal prices in Europe overnight, sparking heavy selling in Australian coal stocks.
However the price drop is only a partial re-tracement of gains seen in recent weeks when the spot coal price surged ahead of the recently agreed contract prices for Asian buyers of $US125 a metric tonne, and appears to be a temporary reversal.
Brendan Harris, mining analyst at Macquarie, said the coal market remains tight with prices set to stay high and the pullback overnight would not be prompting him to downgrade earnings for the Australian miners he covers.
"People have got to keep the coal move in perspective and have a look at where the spot price is relative to the recent (contract) settlements that have been struck," he said.
"The reality is that we have a long way to fall before we get at all worried about our forecasts."
Alan Heap, commodity analyst at Citi, said the Newcastle spot price for thermal coal has fallen by about $US13 to $US185 a tonne from $US198 a tonne.
This was still above last week's average of $US172 and much higher than in mid-May when it was about $US135, he said.
"The spot price has been running very hot and an intriguing issue is that we are seeing a new level of volatility introduced into these markets, which begs the question, does this reflect increased speculative activity?" he said.
Heap said the driver of the fall was Europe, with Asian prices experiencing a knock-on effect, and that the fundamentals of the coal market in Asia remain very robust.
All the indicators in Asia certainly point to ongoing tightness in the thermal coal market.
In May, China reverted to being a net coal importer, with imports exceeding exports by 250,000 metric tonnes, as local output failed to keep pace with demand.
Between January 2008 and May 2008, China's coal exports fell 4.1 per cent on year, to 18.5 million tonnes, the General Administration of Customs said on June 23.
Vietnam said today it will reduce its coal exports by 10 million tonnes or 31 per cent this year to meet growing domestic demand.
Currently a major coal exporter in the region, Vietnam has said it plans to progressively reduce its exports until 2015 when it plans to halt them altogether, as it redirects coal to domestic electricity generation to power its booming economy.
Macquarie's Harris said that while the spot price may have gotten ahead of itself recently, the thermal coal market remains tight, the coking coal market is particularly stressed and the outlook for prices is strong.
"It is not surprising to see volatility, but we believe the fundamentals will support prices at very strong levels into 2009," he said.
In a recent note, ANZ analysts said spot coal prices could ease in coming months, but infrastructure constraints in Australia and rising demand in Asia were likely to keep a high floor on prices.
Analysts' confidence in the fundamentals of the coal market did not stop investors savaging Australian coal stocks today, amid a broader sell off of resource stocks.
In late afternoon trading, Macarthur Coal shares had tumbled 12 per cent, Gloucester Coal sank 13 per cent, Centennial Coal Company dropped 12 per cent, Felix Resources 9.1 per cent and New Hope Corp dipped 10 per cent in an Australian market down 2.2 per cent.
Coal stocks have been running hard on higher prices and the pullback today has seen most of them return to the levels seen in May.
Australia is the world's largest supplier of sea-borne coal and Newcastle, in the state of New South Wales, is the world's biggest thermal coal shipping port.
Source: The Australian
Market commentators also said prices in Asia were set to stay high with all the indicators pointing to ongoing tightness in the market.
The Newcastle spot coal price fell sharply today, following on from a 20 per cent drop in spot thermal coal prices in Europe overnight, sparking heavy selling in Australian coal stocks.
However the price drop is only a partial re-tracement of gains seen in recent weeks when the spot coal price surged ahead of the recently agreed contract prices for Asian buyers of $US125 a metric tonne, and appears to be a temporary reversal.
Brendan Harris, mining analyst at Macquarie, said the coal market remains tight with prices set to stay high and the pullback overnight would not be prompting him to downgrade earnings for the Australian miners he covers.
"People have got to keep the coal move in perspective and have a look at where the spot price is relative to the recent (contract) settlements that have been struck," he said.
"The reality is that we have a long way to fall before we get at all worried about our forecasts."
Alan Heap, commodity analyst at Citi, said the Newcastle spot price for thermal coal has fallen by about $US13 to $US185 a tonne from $US198 a tonne.
This was still above last week's average of $US172 and much higher than in mid-May when it was about $US135, he said.
"The spot price has been running very hot and an intriguing issue is that we are seeing a new level of volatility introduced into these markets, which begs the question, does this reflect increased speculative activity?" he said.
Heap said the driver of the fall was Europe, with Asian prices experiencing a knock-on effect, and that the fundamentals of the coal market in Asia remain very robust.
All the indicators in Asia certainly point to ongoing tightness in the thermal coal market.
In May, China reverted to being a net coal importer, with imports exceeding exports by 250,000 metric tonnes, as local output failed to keep pace with demand.
Between January 2008 and May 2008, China's coal exports fell 4.1 per cent on year, to 18.5 million tonnes, the General Administration of Customs said on June 23.
Vietnam said today it will reduce its coal exports by 10 million tonnes or 31 per cent this year to meet growing domestic demand.
Currently a major coal exporter in the region, Vietnam has said it plans to progressively reduce its exports until 2015 when it plans to halt them altogether, as it redirects coal to domestic electricity generation to power its booming economy.
Macquarie's Harris said that while the spot price may have gotten ahead of itself recently, the thermal coal market remains tight, the coking coal market is particularly stressed and the outlook for prices is strong.
"It is not surprising to see volatility, but we believe the fundamentals will support prices at very strong levels into 2009," he said.
In a recent note, ANZ analysts said spot coal prices could ease in coming months, but infrastructure constraints in Australia and rising demand in Asia were likely to keep a high floor on prices.
Analysts' confidence in the fundamentals of the coal market did not stop investors savaging Australian coal stocks today, amid a broader sell off of resource stocks.
In late afternoon trading, Macarthur Coal shares had tumbled 12 per cent, Gloucester Coal sank 13 per cent, Centennial Coal Company dropped 12 per cent, Felix Resources 9.1 per cent and New Hope Corp dipped 10 per cent in an Australian market down 2.2 per cent.
Coal stocks have been running hard on higher prices and the pullback today has seen most of them return to the levels seen in May.
Australia is the world's largest supplier of sea-borne coal and Newcastle, in the state of New South Wales, is the world's biggest thermal coal shipping port.
Source: The Australian
ArcelorMittal Shows Interest In Canada Iron Ore Business
ArcelorMittal, the world's largest steelmaker, said it would be interested in acquiring Rio Tinto Group's Iron Ore Co. of Canada unit because the business fits with its operations in eastern Canada.
``If that kind of opportunity arose, I'm sure we'd take a look at it,'' Lou Schorsch, head of Luxembourg-based ArcelorMittal's flat-rolled business in the Americas, said yesterday in an interview in Chicago. ``That would kind of be a natural fit. We share a lot of infrastructure.''
ArcelorMittal is buying iron-ore plants in Canada and Liberia to counter the market power of BHP Billiton Ltd., Rio Tinto and Cia. Vale do Rio Doce. The three companies control about 80 percent of the world's seaborne iron ore and are raising prices to records. London-based Rio Tinto has said it plans to sell as much as $10 billion of assets this year.
Iron Ore Co. of Canada, also known as IOC, is ``a good operation and not on our short list of possible disposals,'' Rio spokesman Nick Cobban said today.
ArcelorMittal said in September it would buy the more than two-thirds of the Wabush Mines iron-ore venture in Canada that it doesn't already own from U.S. Steel Corp. and Cleveland-Cliffs Inc. for about $67 million. U.S. Steel and Cleveland-Cliffs ended talks to sell the stake in March, and ArcelorMittal has asked the Ontario Superior Court to force the transaction. ArcelorMittal is ``very confident'' it will complete the purchase, Schorsch said.
Wabush produces iron-ore concentrate in Newfoundland and Labrador and has port facilities on the St. Lawrence River's north shore, close to the operations of ArcelorMittal's QCM unit.
``Part of why we are interested in Wabush is because QCM is more or less right down the road,'' Schorsch said. ``Also right down the road is IOC that Rio Tinto owns.''
Rio holds a 59 percent stake in Iron Ore Co. and operates the business. Rio is spending about $475 million to expand mining and processing facilities in Labrador West and transportation capacity on the railway linking the mine with the port of Sept- Iles, Quebec.
Source: Bloomberg
``If that kind of opportunity arose, I'm sure we'd take a look at it,'' Lou Schorsch, head of Luxembourg-based ArcelorMittal's flat-rolled business in the Americas, said yesterday in an interview in Chicago. ``That would kind of be a natural fit. We share a lot of infrastructure.''
ArcelorMittal is buying iron-ore plants in Canada and Liberia to counter the market power of BHP Billiton Ltd., Rio Tinto and Cia. Vale do Rio Doce. The three companies control about 80 percent of the world's seaborne iron ore and are raising prices to records. London-based Rio Tinto has said it plans to sell as much as $10 billion of assets this year.
Iron Ore Co. of Canada, also known as IOC, is ``a good operation and not on our short list of possible disposals,'' Rio spokesman Nick Cobban said today.
ArcelorMittal said in September it would buy the more than two-thirds of the Wabush Mines iron-ore venture in Canada that it doesn't already own from U.S. Steel Corp. and Cleveland-Cliffs Inc. for about $67 million. U.S. Steel and Cleveland-Cliffs ended talks to sell the stake in March, and ArcelorMittal has asked the Ontario Superior Court to force the transaction. ArcelorMittal is ``very confident'' it will complete the purchase, Schorsch said.
Wabush produces iron-ore concentrate in Newfoundland and Labrador and has port facilities on the St. Lawrence River's north shore, close to the operations of ArcelorMittal's QCM unit.
``Part of why we are interested in Wabush is because QCM is more or less right down the road,'' Schorsch said. ``Also right down the road is IOC that Rio Tinto owns.''
Rio holds a 59 percent stake in Iron Ore Co. and operates the business. Rio is spending about $475 million to expand mining and processing facilities in Labrador West and transportation capacity on the railway linking the mine with the port of Sept- Iles, Quebec.
Source: Bloomberg
Chinese Steel Maker In Kazakhstan Deal
Facing price increases of several multiples for iron ore, and amid ongoing restructuring of the domestic steel sector, northwestern China's largest steel maker, Jiuquan Iron and Steel Group, also known as Jiugang, took steps to secure a stable supply of iron ore. It formed a partnership with a Kazakhstan mining company to gain access to Central Asian sources of the essential component of steel.
Jiugang has committed assets worth 30 billion yuan ($4.37 billion) to taking a majority stake in a joint venture deal with International Mineral Resources, which is registered in the Netherlands, to mine in Kazakhstan for iron ore, the steel producer announced today. IMR agreed to supply iron ore at the prevailing market price to Jiugang in the future.
The parties agreed to the joint venture last August and have now won approval from authorities in western Gansu province, where Jiugang is based.
The world's biggest producer and consumer of steel, China has encouraged its steel producers to cooperate with foreign firms to obtain supplies of iron ore abroad. Other iron mining hotspots for Chinese steel producers include regions of Australia, Brazil and India, said Shanghai-based analyst Yukun Le, who tracks steel for Boci Research.
"China is short of iron ore, so the government encourages the domestic steel companies to invest in other companies," Le observed. Mergers and acquisitions have also been increasingly common within the domestic sector, he said, as part of a government-led effort to create big Chinese steel players to negotiate on an equal footing with the mining giants in the global market.
For its 51% stake in the deal, Jiugang, the country's 16th-ranked steel maker, will put up its entire steel production assets and mines, as well as its holdings in its Shanghai-listed unit, Gansu Jiu Steel Group Hongxing Iron and Steel Co., and in another firm, Yuzhong Iron and Steel Co. IMR paid cash for the remaining stake.
Source: Forbes
Jiugang has committed assets worth 30 billion yuan ($4.37 billion) to taking a majority stake in a joint venture deal with International Mineral Resources, which is registered in the Netherlands, to mine in Kazakhstan for iron ore, the steel producer announced today. IMR agreed to supply iron ore at the prevailing market price to Jiugang in the future.
The parties agreed to the joint venture last August and have now won approval from authorities in western Gansu province, where Jiugang is based.
The world's biggest producer and consumer of steel, China has encouraged its steel producers to cooperate with foreign firms to obtain supplies of iron ore abroad. Other iron mining hotspots for Chinese steel producers include regions of Australia, Brazil and India, said Shanghai-based analyst Yukun Le, who tracks steel for Boci Research.
"China is short of iron ore, so the government encourages the domestic steel companies to invest in other companies," Le observed. Mergers and acquisitions have also been increasingly common within the domestic sector, he said, as part of a government-led effort to create big Chinese steel players to negotiate on an equal footing with the mining giants in the global market.
For its 51% stake in the deal, Jiugang, the country's 16th-ranked steel maker, will put up its entire steel production assets and mines, as well as its holdings in its Shanghai-listed unit, Gansu Jiu Steel Group Hongxing Iron and Steel Co., and in another firm, Yuzhong Iron and Steel Co. IMR paid cash for the remaining stake.
Source: Forbes
Iron Ore, Coal Boost Australia's Exports
Australian exports rose to a record in May as prices for iron ore and coal surged, suggesting overseas shipments will underpin economic growth this year.
Exports climbed 1 percent to A$21.9 billion ($21.1 billion) in May, the statistics bureau said in Sydney today. The April trade balance was revised from a deficit to a A$12 million surplus, the first in six years, as mining companies led by Rio Tinto Group negotiated higher iron ore prices with China.
Rising sales abroad underscore central bank Governor Glenn Stevens' view that exports will buoy Australia's $1 trillion economy, even as 12-year high interest rates and record gasoline costs buffet domestic spending. Today's report showed the trade deficit was A$965 million in May, close to the A$900 million median estimate of 24 economists surveyed by Bloomberg News.
``The huge stimulus from booming iron ore and coal prices is finally showing up in the trade data,'' said Riki Polygenis, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne.
``There will be large upward revisions to export values in coming months'' as more contracts are negotiated, and ``we may find Australia achieved a trade surplus in May,'' she added.
The Australian dollar traded at 96.20 U.S. cents at 1:10 p.m. in Sydney from 96.29 cents before the report was released. The two-year government bond yield was little changed at 6.86 percent.
Prior to April, Australia's trade balance had been in deficit since March 2002, and widened to a record shortfall of A$3.22 billion in February as exporters battled bottlenecks at mines and congestion at ports and railways.
The April 2008 balance was revised in today's report to a surplus after having been previously reported as a deficit of A$957 million. The adjustment was made to reflect an increase in contract prices for iron ore that were backdated to April 1.
Rio Tinto, the world's third-largest miner, won a price increase of as much as 97 percent for Western Australian iron ore from Asian steelmaker customers. The agreements for the 12 months that began April 1 match prices agreed on June 23 with Baosteel Group Corp., China's biggest mill, London-based Rio said yesterday.
BHP Billiton Ltd., the third-largest exporter of the ore, hasn't concluded price talks.
Today's figures ``point to the underlying growth in the Australian economy,'' said Rob Henderson, a senior economist at National Australia Bank Ltd. in Sydney. ``The Reserve Bank has been expecting the strong terms of trade to push the economy, and we're seeing that in these numbers.''
Export earnings will rise 20 percent this year, and ``add substantially to national income and ability to spend'' by households, Stevens said on July 1.
Prices of the 19 commodities in the Reuters/Jefferies CRB Index jumped 29 percent in the six months through June 30, the most since 1973 and more than any second-half gain in at least five years, data compiled by Bloomberg shows.
Today's report also showed that imports rose 6 percent to A$22.8 billion in May, driven higher by a 17 percent jump in the price of gasoline and consumer goods such as cars, which climbed 8 percent.
That adds to evidence Australian household are weathering the central bank's interest-rate increases. Policy makers boosted the cash target in March, February, November and August by 100 basis point to cool the fastest inflation in almost 17 years.
Retail sales unexpectedly climbed in May at the fastest pace in six months amid a pickup in spending on food, recreational goods, cosmetics and jewelry, a report published yesterday shows.
The jump in imports ``suggests that consumer spending and domestic demand may not be as weak as suggested by the Reserve Bank when it left rates unchanged on Tuesday,'' ANZ's Polygenis said. Given the ``numerous inflation risks both globally and domestically, further monetary policy tightening this year cannot be ruled out,'' she added.
Stevens and his board left the overnight cash rate at 7.25 percent this week, saying ``demand growth will moderate this year.'' The economy expanded at the slowest pace in almost two years in the first quarter.
Source: Bloomberg
Exports climbed 1 percent to A$21.9 billion ($21.1 billion) in May, the statistics bureau said in Sydney today. The April trade balance was revised from a deficit to a A$12 million surplus, the first in six years, as mining companies led by Rio Tinto Group negotiated higher iron ore prices with China.
Rising sales abroad underscore central bank Governor Glenn Stevens' view that exports will buoy Australia's $1 trillion economy, even as 12-year high interest rates and record gasoline costs buffet domestic spending. Today's report showed the trade deficit was A$965 million in May, close to the A$900 million median estimate of 24 economists surveyed by Bloomberg News.
``The huge stimulus from booming iron ore and coal prices is finally showing up in the trade data,'' said Riki Polygenis, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne.
``There will be large upward revisions to export values in coming months'' as more contracts are negotiated, and ``we may find Australia achieved a trade surplus in May,'' she added.
The Australian dollar traded at 96.20 U.S. cents at 1:10 p.m. in Sydney from 96.29 cents before the report was released. The two-year government bond yield was little changed at 6.86 percent.
Prior to April, Australia's trade balance had been in deficit since March 2002, and widened to a record shortfall of A$3.22 billion in February as exporters battled bottlenecks at mines and congestion at ports and railways.
The April 2008 balance was revised in today's report to a surplus after having been previously reported as a deficit of A$957 million. The adjustment was made to reflect an increase in contract prices for iron ore that were backdated to April 1.
Rio Tinto, the world's third-largest miner, won a price increase of as much as 97 percent for Western Australian iron ore from Asian steelmaker customers. The agreements for the 12 months that began April 1 match prices agreed on June 23 with Baosteel Group Corp., China's biggest mill, London-based Rio said yesterday.
BHP Billiton Ltd., the third-largest exporter of the ore, hasn't concluded price talks.
Today's figures ``point to the underlying growth in the Australian economy,'' said Rob Henderson, a senior economist at National Australia Bank Ltd. in Sydney. ``The Reserve Bank has been expecting the strong terms of trade to push the economy, and we're seeing that in these numbers.''
Export earnings will rise 20 percent this year, and ``add substantially to national income and ability to spend'' by households, Stevens said on July 1.
Prices of the 19 commodities in the Reuters/Jefferies CRB Index jumped 29 percent in the six months through June 30, the most since 1973 and more than any second-half gain in at least five years, data compiled by Bloomberg shows.
Today's report also showed that imports rose 6 percent to A$22.8 billion in May, driven higher by a 17 percent jump in the price of gasoline and consumer goods such as cars, which climbed 8 percent.
That adds to evidence Australian household are weathering the central bank's interest-rate increases. Policy makers boosted the cash target in March, February, November and August by 100 basis point to cool the fastest inflation in almost 17 years.
Retail sales unexpectedly climbed in May at the fastest pace in six months amid a pickup in spending on food, recreational goods, cosmetics and jewelry, a report published yesterday shows.
The jump in imports ``suggests that consumer spending and domestic demand may not be as weak as suggested by the Reserve Bank when it left rates unchanged on Tuesday,'' ANZ's Polygenis said. Given the ``numerous inflation risks both globally and domestically, further monetary policy tightening this year cannot be ruled out,'' she added.
Stevens and his board left the overnight cash rate at 7.25 percent this week, saying ``demand growth will moderate this year.'' The economy expanded at the slowest pace in almost two years in the first quarter.
Source: Bloomberg
Fortescue To Use Rio Tinto Iron Ore Prices
Australia's Fortescue Metals Group will temporarily use iron prices set by rival Rio Tinto until an industry-wide price that includes settlements by BHP Billiton is formalised, Fortescue said on Thursday.
Fortescue said it was unable to conclude its benchmark reference price since BHP had yet to agree a price with customers for the current trading year.
In the meantime, it will invoice its customers at the Rio-set price, the company said.
Steel mills across Asia followed their peers in China in bowing to a near doubling in iron ore prices from Rio Tinto this year, leaving BHP Billiton the lone hold-out for higher rates as annual talks go into overtime.
Rio Tinto said on Tuesday all its Asian customers had now agreed to an up-to 96.5 percent price hike for ore delivered between April 1, 2008 and March 31, 2009.
That deal was a significant improvement on the first round of price rises agreed by Brazil's Vale at 65-71 percent back in February.
BHP has refused to comment while it is still in negotiations with Baosteel of China and other Asian mills like Nippon Steel Corp and South Korea's POSCO.
BHP's refusal to pre-set the price of its ore has raised the ire of customers already fuming over its plans to acquire Rio and create a super mining house with even more sway over the supply of raw materials.
Fortescue in May made its first shipment of iron ore from west Australia's Pilbara iron belt bound for China. This year it expects to ship around 55 million tonnes of ore, all to China.
Source: Reuters
Fortescue said it was unable to conclude its benchmark reference price since BHP had yet to agree a price with customers for the current trading year.
In the meantime, it will invoice its customers at the Rio-set price, the company said.
Steel mills across Asia followed their peers in China in bowing to a near doubling in iron ore prices from Rio Tinto this year, leaving BHP Billiton the lone hold-out for higher rates as annual talks go into overtime.
Rio Tinto said on Tuesday all its Asian customers had now agreed to an up-to 96.5 percent price hike for ore delivered between April 1, 2008 and March 31, 2009.
That deal was a significant improvement on the first round of price rises agreed by Brazil's Vale at 65-71 percent back in February.
BHP has refused to comment while it is still in negotiations with Baosteel of China and other Asian mills like Nippon Steel Corp and South Korea's POSCO.
BHP's refusal to pre-set the price of its ore has raised the ire of customers already fuming over its plans to acquire Rio and create a super mining house with even more sway over the supply of raw materials.
Fortescue in May made its first shipment of iron ore from west Australia's Pilbara iron belt bound for China. This year it expects to ship around 55 million tonnes of ore, all to China.
Source: Reuters
Albidon Producing At Munali Nickel Mine
Albidon has hit its target of generating quick cashflow at its Munali Nickel project in Zambia by rapidly getting the project into production and delivering first nickel concentrate this month.
The company's Managing Director, Dale Rogers said that the company's focus has always been to get sizeable production at Munali in a short space of three years as rapid cash flow was in all stakeholders' interest.
Albidon is ramping up production at Munali over the second half of this year to full production of between 10,000 to 10,500 tonnes of nickel in ni-cu-co-pgm concentrate annually by the start of next year.
This comes after the company completed a feasibility study on the project in mid-2006 and started building the mine in September that year.
Rogers said the company had an offtake agreement with the Jinchuan Group at "gate" point, which meant Albidon was not responsible for freight and logistics outside its property, minimising risk for shareholders.
The company expected "very strong" margins of between 350-400% from the low cost project, he said.
Albidon will continue drilling in areas around the existing project, while it has already found indications of nickel sulphide here. Rogers indicated that the cash flow that will start coming through next month will enable the company to accelerate drilling work.
The MD said Albidon was focused on adding value for shareholders and growing its business during the current "cashflow stage". In the next stage, the company would turn its head around corporate action to add projects to its pipeline. Albidon was largely looking at nickel resources in Africa as the unexplored continent still held much potential.
Rogers said Albidon was the only new nickel sulphide producer coming online in this part of the year and one of few companies in the world with a new nickel sulphide development.
The company started producing nickel ore from the Enterprise ore body at Munali in January this year and has stockpiled sufficient ore for three months of processing.
Albidon has stated its objective as building an African metal mining and exploration company with an emphasis on nickel.
Beyond the Munali Nickel project, the company has the Njame Uranium deposit in southern Zambia in a joint venture with African Energy Resources, uranium prospects in Zambia, extensive nickel exploration properties in Botswana and Tanzania, including a joint venture with BHP Billiton and zinc exploration programmes in Tunisia.
Source: Mineweb
The company's Managing Director, Dale Rogers said that the company's focus has always been to get sizeable production at Munali in a short space of three years as rapid cash flow was in all stakeholders' interest.
Albidon is ramping up production at Munali over the second half of this year to full production of between 10,000 to 10,500 tonnes of nickel in ni-cu-co-pgm concentrate annually by the start of next year.
This comes after the company completed a feasibility study on the project in mid-2006 and started building the mine in September that year.
Rogers said the company had an offtake agreement with the Jinchuan Group at "gate" point, which meant Albidon was not responsible for freight and logistics outside its property, minimising risk for shareholders.
The company expected "very strong" margins of between 350-400% from the low cost project, he said.
Albidon will continue drilling in areas around the existing project, while it has already found indications of nickel sulphide here. Rogers indicated that the cash flow that will start coming through next month will enable the company to accelerate drilling work.
The MD said Albidon was focused on adding value for shareholders and growing its business during the current "cashflow stage". In the next stage, the company would turn its head around corporate action to add projects to its pipeline. Albidon was largely looking at nickel resources in Africa as the unexplored continent still held much potential.
Rogers said Albidon was the only new nickel sulphide producer coming online in this part of the year and one of few companies in the world with a new nickel sulphide development.
The company started producing nickel ore from the Enterprise ore body at Munali in January this year and has stockpiled sufficient ore for three months of processing.
Albidon has stated its objective as building an African metal mining and exploration company with an emphasis on nickel.
Beyond the Munali Nickel project, the company has the Njame Uranium deposit in southern Zambia in a joint venture with African Energy Resources, uranium prospects in Zambia, extensive nickel exploration properties in Botswana and Tanzania, including a joint venture with BHP Billiton and zinc exploration programmes in Tunisia.
Source: Mineweb
Friday, July 4, 2008
Russia May Curb Coking Coal Exports
Russia may demand its coking coal companies supply a large part of their output to the domestic market in a move that could limit exports of the steelmaking raw material, Russian newspaper Vedomosti reported on Wednesday.
Under the plan, Russian miners would be required between them to supply a minimum 50 million tonnes of coking coal concentrate a year to the domestic market, Vedomosti reported. This is equivalent to 93 percent of its production last year.
Vedomosti cited a source within a coal company who had attended a recent panel discussion with Russia's influential Deputy Prime Minister Igor Sechin, whose brief in the government includes overseeing the energy and industrial sectors.
Analysts, however, said such a plan would be difficult to enforce and that Russian steel makers who use the coal were already protected by a booming domestic steel market and a high degree of vertical integration.
"Restrictions in coal and the broader steel-related commodity segment will be hard to implement," Deutsche Bank analysts Mikhail Seleznyov and Olga Okuneva said in a note.
"The steel sector is almost entirely privately held and generally well-managed. The government would have to abandon market mechanisms to even partially succeed, and we believe this is not on the government's agenda," they said.
Russia is the world's third-largest coal exporter behind Australia and Indonesia and ranks fifth in terms of production.
It produced 74.9 million tonnes of coking coal in 2007, said Anatoly Skryl, general director of independent coal information agency Rosinformugol.
From this, Russia produced 54 million tonnes of coking coal concentrate and consumed 42.4 million tonnes domestically. Approximately 10 million tonnes was exported, said Skryl.
Analysts said coking coal export quotas would be vulnerable to corruption as officials would have to distinguish between coking coal and steam coal, which would not be subject to restrictions.
"The government would find itself moving backward many years to the times of the central planning system, trying to somehow predict and coordinate production and supply," Troika Dialog mining analysts said in a note.
"Should it fail to perform this task efficiently, which it most surely would, the ultimate outcome of the new system would discourage investment in capacity expansion," they said.
Russia's largest coking coal miners are Mechel which is listed in New York, and Raspadskaya, which is part-owned by steel maker Evraz Group.
Mechel last year acquired the rights to develop the Elga field, Russia's largest untapped coal deposit, and plans to spend $3 billion bringing it into production.
Source: Reuters
Under the plan, Russian miners would be required between them to supply a minimum 50 million tonnes of coking coal concentrate a year to the domestic market, Vedomosti reported. This is equivalent to 93 percent of its production last year.
Vedomosti cited a source within a coal company who had attended a recent panel discussion with Russia's influential Deputy Prime Minister Igor Sechin, whose brief in the government includes overseeing the energy and industrial sectors.
Analysts, however, said such a plan would be difficult to enforce and that Russian steel makers who use the coal were already protected by a booming domestic steel market and a high degree of vertical integration.
"Restrictions in coal and the broader steel-related commodity segment will be hard to implement," Deutsche Bank analysts Mikhail Seleznyov and Olga Okuneva said in a note.
"The steel sector is almost entirely privately held and generally well-managed. The government would have to abandon market mechanisms to even partially succeed, and we believe this is not on the government's agenda," they said.
Russia is the world's third-largest coal exporter behind Australia and Indonesia and ranks fifth in terms of production.
It produced 74.9 million tonnes of coking coal in 2007, said Anatoly Skryl, general director of independent coal information agency Rosinformugol.
From this, Russia produced 54 million tonnes of coking coal concentrate and consumed 42.4 million tonnes domestically. Approximately 10 million tonnes was exported, said Skryl.
Analysts said coking coal export quotas would be vulnerable to corruption as officials would have to distinguish between coking coal and steam coal, which would not be subject to restrictions.
"The government would find itself moving backward many years to the times of the central planning system, trying to somehow predict and coordinate production and supply," Troika Dialog mining analysts said in a note.
"Should it fail to perform this task efficiently, which it most surely would, the ultimate outcome of the new system would discourage investment in capacity expansion," they said.
Russia's largest coking coal miners are Mechel which is listed in New York, and Raspadskaya, which is part-owned by steel maker Evraz Group.
Mechel last year acquired the rights to develop the Elga field, Russia's largest untapped coal deposit, and plans to spend $3 billion bringing it into production.
Source: Reuters
Feasibility Study At Nullagine For BC Iron
Australian iron ore explorer BC Iron Ltd has completed a scoping study for its wholly-owned Nullagine project in Western Australia and has committed to the commencement of a feasibility study.
The study envisaged a three to five million tonne per annum direct shipping ore operation, situated 140km north of the town of Newman in the iron-rich Pilbara region.
The Perth-based company said the project had the potential to be a high-value, long-life iron ore business.
The project is likely to involve simple open pit mining, crushing and screening to a fines product.
Ore would be hauled by road to Fortescue Metal Group Ltd's planned Christmas Creek operation.
BC Iron has a memorandum of understanding with Fortescue to negotiate rail and port access.
The scoping study estimated capital costs of $85 million and the current resource would underpin a mine life of about six years
Source: The West Australian
The study envisaged a three to five million tonne per annum direct shipping ore operation, situated 140km north of the town of Newman in the iron-rich Pilbara region.
The Perth-based company said the project had the potential to be a high-value, long-life iron ore business.
The project is likely to involve simple open pit mining, crushing and screening to a fines product.
Ore would be hauled by road to Fortescue Metal Group Ltd's planned Christmas Creek operation.
BC Iron has a memorandum of understanding with Fortescue to negotiate rail and port access.
The scoping study estimated capital costs of $85 million and the current resource would underpin a mine life of about six years
Source: The West Australian
Tuesday, July 1, 2008
Goan Mine Owners Fearful For Economy
The recent increase in ad valorem export duty on iron ore to 15 per cent could have cascading negative multiplier effects on Goan economy in general and the mining industry in particular besides causing various social problems, if no respite is given to state’s mining industry, which exports low grade iron ore.
Disclosing this to the reporters at a press conference on Monday evening, the president of Goa Mineral Ore Exporters̢۪ Association, Mr Shivanand Salgaocar said that if the export duty was not withdrawn then it would make the exports economically unviable forcing iron ore producers to reduce or stop production and exports of low grades, leading to various social and economic problems.
He further said that miners would have to store low grade ore at various sites in the state which could lead to environmental issues also, adding that most of Goa̢۪s ore was of lower grade and that it does not have any demand in the domestic market.
The Centre should immediately withdraw the duty and help the mining industry in the state he said.
Mr Salgaocar also said that Goan mining industry has invested heavily in facilities for beneficiation (mineral dressing process) technologies to upgrade the domestic ore deposits for export, which other would not have had any market. He also said that only in recent years there was demand for low-grade ore especially in China, which otherwise remained unconsumed.
Stating that the increase in export duty was aimed at conserving natural resources and making available the ore to Indian steel industry, he went on to add that domestic steel industry mainly used high grade lumps and fines, that were not mined in Goa and as such Goan ore had no domestic market and the only option before the miners was to export the product.
The Centre’s initiatives at conservation were meaningless as far as Goa was concerned,he added.
He said that mining industry has already been hit hard by increase in the cost of production and handling and transportation of iron ore, due to increase in fuel costs, steep increase in logistic costs and spiraling inflation. He also said that there was already an impending hike in royalty, due to be announced shortly and that the hike in export duty was unwarranted.
The GMOEA president also said that any effort to curb export of iron ore without matching domestic consumption for the ore currently produced would severely affect the industry and employment and economic activity dependent on it. He also said that increased duty would make export of lower grade of iron ore unviable.
The chairman of Dempo group of companies, Mr Shrinivas Dempo, who was also present on the occasion, said that the Goa mining industry was ready to provide iron ore to the domestic steel industry, as country’s needs came first but lamented that there were no takers for Goa’s low grade iron ore. He also said that all domestic steel plants had their own captive mines to meet their ore requirements.
The managing director of Sesa Goa Ltd wondered why the iron ore industry was being singled out for taxation and burdened with additional duty every now and then. He also said that regulatory atmosphere could create problems for the mining industry, which had toiled to enter into long contracts to ensure exports of otherwise rejected ore.
Later replying to a question on the recent agitations against the mining firms, the GMOEA president said that established players in the mining field were carrying out their corporate social responsibilities well and working towards the welfare of the people along with their business activity. He, however, lamented that the traders were involved in wrong-doings and were responsible for various problems.
In reply to another question on how many people could be affected due to increase in export duty, he said that about 10 per cent of Goa’s population could be affected. He further said that 12,000 people were directly employed in the industry while 30,000 others were indirectly employed in it. Besides, a large number were also employed in ancillary units.
Source: Navhind Times
Disclosing this to the reporters at a press conference on Monday evening, the president of Goa Mineral Ore Exporters̢۪ Association, Mr Shivanand Salgaocar said that if the export duty was not withdrawn then it would make the exports economically unviable forcing iron ore producers to reduce or stop production and exports of low grades, leading to various social and economic problems.
He further said that miners would have to store low grade ore at various sites in the state which could lead to environmental issues also, adding that most of Goa̢۪s ore was of lower grade and that it does not have any demand in the domestic market.
The Centre should immediately withdraw the duty and help the mining industry in the state he said.
Mr Salgaocar also said that Goan mining industry has invested heavily in facilities for beneficiation (mineral dressing process) technologies to upgrade the domestic ore deposits for export, which other would not have had any market. He also said that only in recent years there was demand for low-grade ore especially in China, which otherwise remained unconsumed.
Stating that the increase in export duty was aimed at conserving natural resources and making available the ore to Indian steel industry, he went on to add that domestic steel industry mainly used high grade lumps and fines, that were not mined in Goa and as such Goan ore had no domestic market and the only option before the miners was to export the product.
The Centre’s initiatives at conservation were meaningless as far as Goa was concerned,he added.
He said that mining industry has already been hit hard by increase in the cost of production and handling and transportation of iron ore, due to increase in fuel costs, steep increase in logistic costs and spiraling inflation. He also said that there was already an impending hike in royalty, due to be announced shortly and that the hike in export duty was unwarranted.
The GMOEA president also said that any effort to curb export of iron ore without matching domestic consumption for the ore currently produced would severely affect the industry and employment and economic activity dependent on it. He also said that increased duty would make export of lower grade of iron ore unviable.
The chairman of Dempo group of companies, Mr Shrinivas Dempo, who was also present on the occasion, said that the Goa mining industry was ready to provide iron ore to the domestic steel industry, as country’s needs came first but lamented that there were no takers for Goa’s low grade iron ore. He also said that all domestic steel plants had their own captive mines to meet their ore requirements.
The managing director of Sesa Goa Ltd wondered why the iron ore industry was being singled out for taxation and burdened with additional duty every now and then. He also said that regulatory atmosphere could create problems for the mining industry, which had toiled to enter into long contracts to ensure exports of otherwise rejected ore.
Later replying to a question on the recent agitations against the mining firms, the GMOEA president said that established players in the mining field were carrying out their corporate social responsibilities well and working towards the welfare of the people along with their business activity. He, however, lamented that the traders were involved in wrong-doings and were responsible for various problems.
In reply to another question on how many people could be affected due to increase in export duty, he said that about 10 per cent of Goa’s population could be affected. He further said that 12,000 people were directly employed in the industry while 30,000 others were indirectly employed in it. Besides, a large number were also employed in ancillary units.
Source: Navhind Times
Rio TInto Announces New Price Settlements
Rio Tinto announces that it has reached agreement with all of its customers in Asia for iron ore deliveries from Hamersley Iron, Robe River and Hope Downs for the contract year commencing 1 April 2008.
The new settlements are in line with Hamersley Iron’s Baosteel settlement, which saw lump prices increase by 96.5% and fines prices increase by 79.88%.
Sam Walsh, chief executive of Rio Tinto’s Iron Ore group, said: “These agreements are a strong endorsement of the settlement reached last week and reflect the very strong demand for our products across the world’s fastest growing markets”.
“The agreements throughout Asia will provide an important platform as we embark on the largest expansion in Rio Tinto Iron Ore’s history, increasing production from the Pilbara to 320 million tonnes of iron ore per annum in 2012 and 420 million tonnes per annum beyond that.”
Source: politics.co.uk
The new settlements are in line with Hamersley Iron’s Baosteel settlement, which saw lump prices increase by 96.5% and fines prices increase by 79.88%.
Sam Walsh, chief executive of Rio Tinto’s Iron Ore group, said: “These agreements are a strong endorsement of the settlement reached last week and reflect the very strong demand for our products across the world’s fastest growing markets”.
“The agreements throughout Asia will provide an important platform as we embark on the largest expansion in Rio Tinto Iron Ore’s history, increasing production from the Pilbara to 320 million tonnes of iron ore per annum in 2012 and 420 million tonnes per annum beyond that.”
Source: politics.co.uk
Sino Hua-An Defers Steel Plant Acquisition
Metallurgical coke producer Sino Hua-An International Bhd is deferring the acquisition of a steel plant until next year.
Source: The Star, Kuala Lumpur
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