Venezuelan President Hugo Chavez reopened the country's biggest iron ore mine on Friday in a nationally-broadcast ceremony in Bolivar state, 850 kilometres (528 miles) southeast of Caracas.
China will contribute $70 million toward the cost of reactivating the Cerro Bolivar mine, which is to be operated with technical advice and cooperation from Swiss-based Commodities and Minerals Enterprise Ltd.
The mine is expected to be producing at a rate of 3 million tons of iron ore per annum by the end of 2010. The whole of the output will be exported to Chinese steel mills.
After inaugurating the reopened mine, President Chavez oversaw the signing of an agreement to pay a $120 million advance to the Brazilian firm, Andrade Gutierrez, for the construction of a new steel mill in Ciudad Piar that is expected to open by late 2011.
Saturday, January 31, 2009
ArcelorMittal Posts Ukrainian Coal Update
Reports from the Ukraine have cited Ms Elena Trofimova, press secretary of the Berezovskaya mine, as saying that in 2008 at Berezovskaya, Pervomayskaya and Anzherskoe mines mined 2.698 million tonnes of coal were extracted totally. This was 90% of the company's plan for the year. In 2007 these mines extracted 3.140 million tonnes of coal. In April 2008 ArcelorMittal purchased the assets from Severstal: 97.59% of Berezovskaya mine and 99.35% of Pervomayskaya mine. Severstal also sold the Severnaya coal concentrating plant, 100% of the Zhernovskaya-3 area and a controlling stake in three accessory enterprises.
Ms Trofimova said that the mines prepared 16.140 million tonnes of mine works. Severnaya concentrating plant processed 2.200 million tonnes of coking coal and produced 1.319 million tonnes of coke concentrate. The volume of products shipped to customers decreased in 2008 by more than 30% and made 1.793 million tonnes.
She said that “This is due to shipments volume slump caused by coal concentrate demand drop from metallurgical plants.”
Source: Steel Guru
Ms Trofimova said that the mines prepared 16.140 million tonnes of mine works. Severnaya concentrating plant processed 2.200 million tonnes of coking coal and produced 1.319 million tonnes of coke concentrate. The volume of products shipped to customers decreased in 2008 by more than 30% and made 1.793 million tonnes.
She said that “This is due to shipments volume slump caused by coal concentrate demand drop from metallurgical plants.”
Source: Steel Guru
Glebe Wins Fluorspar Mine Permission
UK mining firm Glebe Mines has been granted permission to blast a new 45-metre-deep quarry in a Dales hillside – despite protests from residents, walkers and conservationists. Peak Park council members narrowly backed the bid to extract 660,000 tonnes of fluorspar from Tearsall Quarry near Wensley in Derbyshire after a five-hour meeting at the Bakewell Agricultural Business Centre on Friday.
Glebe will stop mining at Longstone Edge near Calver for four years, in exchange for being allowed to open a new 10.4 hectare open pit near Wensley.
Several villagers, an independent ecologist, Friends of the Peak District, Save Longstone Edge and Save Wensley Hillside pleaded with members to block the unusual deal – which officers and members admitted broke conservation guidelines.
Fears included noise, vibrations, pollution, dust, safety, access issues, impact on livestock, threat to tourism and visual and archaeological harm.
Henry Folkard, from the British Mountaineering Council, said: "The company's economic convenience isn't a valid argument for destroying the national park along the way.
"Mineral operators have to start looking to dig underground and should be encouraged to so as soon as possible."
Peak District National Park Authority chairman Narendra Bajaria objected to the new quarry, which he said threatened the park's position as a "national treasure."
Mr Bajaria said: "We are going to set aside our own well-considered policies. That is the price we are being asked to pay for a four year stay of execution and that's all it would be, let's make no bones about it.
"Are we not paying a high price for what we are getting from it? The community benefit is far less than I would have expected."
But Glebe Mines bosses said the new mine was vital to keeping 1,500 workers – including 67 in the Dales – in their jobs.
And general manager Gary Goodyear said refusal of the plans could have knock-on effects at Longstone Edge.
"I believe we have the right to mine at Peak Pasture (Longstone Edge) right now.
"We're not sure what that would remove and there's been quite a bit of limestone removed to get fluorspar already. But we could move quite quickly if we needed to," Mr Goodyear added.
Members approved officers' recommendation to back the plans, by ten votes to eight.
The Peak District National Park Authority received 435 letters backing Glebe's proposals, and 2,269 against before Friday's meeting.
Source: Matlock Mercury
Glebe will stop mining at Longstone Edge near Calver for four years, in exchange for being allowed to open a new 10.4 hectare open pit near Wensley.
Several villagers, an independent ecologist, Friends of the Peak District, Save Longstone Edge and Save Wensley Hillside pleaded with members to block the unusual deal – which officers and members admitted broke conservation guidelines.
Fears included noise, vibrations, pollution, dust, safety, access issues, impact on livestock, threat to tourism and visual and archaeological harm.
Henry Folkard, from the British Mountaineering Council, said: "The company's economic convenience isn't a valid argument for destroying the national park along the way.
"Mineral operators have to start looking to dig underground and should be encouraged to so as soon as possible."
Peak District National Park Authority chairman Narendra Bajaria objected to the new quarry, which he said threatened the park's position as a "national treasure."
Mr Bajaria said: "We are going to set aside our own well-considered policies. That is the price we are being asked to pay for a four year stay of execution and that's all it would be, let's make no bones about it.
"Are we not paying a high price for what we are getting from it? The community benefit is far less than I would have expected."
But Glebe Mines bosses said the new mine was vital to keeping 1,500 workers – including 67 in the Dales – in their jobs.
And general manager Gary Goodyear said refusal of the plans could have knock-on effects at Longstone Edge.
"I believe we have the right to mine at Peak Pasture (Longstone Edge) right now.
"We're not sure what that would remove and there's been quite a bit of limestone removed to get fluorspar already. But we could move quite quickly if we needed to," Mr Goodyear added.
Members approved officers' recommendation to back the plans, by ten votes to eight.
The Peak District National Park Authority received 435 letters backing Glebe's proposals, and 2,269 against before Friday's meeting.
Source: Matlock Mercury
Codelco Won't Take Up Sur Option
Chilean state copper giant Corporacion Nacional del Cobre, or Codelco, has said in a statement that it won't be exercising its option over a 49% stake in Anglo American's Sur complex at this time. The option is valid until 2027 and Codelco plans to reevalute it when it comes up again in January 2012.
Codelco purchased the option for $175million from a smaller state mining company Empresa Nacional de La Minera, (Enami). Anglo acquired the Sur complex, formerly known as La Disputada de Las Condes, in 2002 from Exxon Mobil Corp, who had bought La Disputada from Enami in 1978. That transaction included the option that Enami has the right to exercise every three years over a 49% stake. The Sur complex includes the Los Bronces and El Soldado copper mines and the Chagres smelter.
Codelco was one of the leading contenders to buy the property when it was put up for sale in the early 2000s, however the Finance Ministry didn't authorize the expenditure.
Both Los Bronces and Codelco's Andina copper mines are located on the same copper vein.
"Codelco expressed its interest to Anglo American as well as its disposition to continue deeping cooperation and operations between Los Bronces and Andina, which can bring added value to both companies," the company said in a statement.
Codelco purchased the option for $175million from a smaller state mining company Empresa Nacional de La Minera, (Enami). Anglo acquired the Sur complex, formerly known as La Disputada de Las Condes, in 2002 from Exxon Mobil Corp, who had bought La Disputada from Enami in 1978. That transaction included the option that Enami has the right to exercise every three years over a 49% stake. The Sur complex includes the Los Bronces and El Soldado copper mines and the Chagres smelter.
Codelco was one of the leading contenders to buy the property when it was put up for sale in the early 2000s, however the Finance Ministry didn't authorize the expenditure.
Both Los Bronces and Codelco's Andina copper mines are located on the same copper vein.
"Codelco expressed its interest to Anglo American as well as its disposition to continue deeping cooperation and operations between Los Bronces and Andina, which can bring added value to both companies," the company said in a statement.
Zambia Braced For Copper Job Losses
Zambia's finance minister, Situmbeko Musokotwane, says the copper-rich country must brace for job losses.
At his annual budget speech on Friday Mr Musokotwane said the country was "also vulnerable" to the global financial meltdown.
Trade unions have voiced fears that nearly 12,000 jobs will be lost by March, most of them in the southern town of Luanshya where Luanshya Copper Mines has halted operations.
Copper exports account for more than 70 percent of hard currency earnings and Mr Musokotwane said Zambia must strengthen agriculture, manufacturing and tourism.
At his annual budget speech on Friday Mr Musokotwane said the country was "also vulnerable" to the global financial meltdown.
Trade unions have voiced fears that nearly 12,000 jobs will be lost by March, most of them in the southern town of Luanshya where Luanshya Copper Mines has halted operations.
Copper exports account for more than 70 percent of hard currency earnings and Mr Musokotwane said Zambia must strengthen agriculture, manufacturing and tourism.
Southern Copper Posts Fourth Quarter Loss
Southern Copper Corp, the Grupo Mexico unit that is one of the world's largest copper producers, posted a fourth-quarter net loss on Friday and slashed its 2009 capital and exploration budget amid plummeting metals prices.
The company reported a net loss of $124.7 million, compared with a profit of $310.9 million a year earlier on net sales down to $449.7 million from $1.294 billion.
For the full year, Southern Copper said net profit totalled $1.406 billion, down from $2.216 billion in 2007.
Profit fell on lower copper prices, which have plummeted in the global financial crisis. The company said the crisis has caused it to scrutinise or stop new projects.
For 2009, Southern Copper slashed its capital and exploration budget to $415.3 million from a prior estimate of $1.07 billion.
The company is currently evaluating putting on hold or stopping its Tia Maria project and has delayed spending at its Toquepala mine expansion project. Its metals projects at El Arco, Los Chancas and Angangeo remain under evaluation.
The company reported a net loss of $124.7 million, compared with a profit of $310.9 million a year earlier on net sales down to $449.7 million from $1.294 billion.
For the full year, Southern Copper said net profit totalled $1.406 billion, down from $2.216 billion in 2007.
Profit fell on lower copper prices, which have plummeted in the global financial crisis. The company said the crisis has caused it to scrutinise or stop new projects.
For 2009, Southern Copper slashed its capital and exploration budget to $415.3 million from a prior estimate of $1.07 billion.
The company is currently evaluating putting on hold or stopping its Tia Maria project and has delayed spending at its Toquepala mine expansion project. Its metals projects at El Arco, Los Chancas and Angangeo remain under evaluation.
Friday, January 30, 2009
Zambia Scraps Copper Windfall Tax
Zambia, Africa’s biggest copper producer, is to scrap a windfall tax on mining companies from 1 April following opposition to the duty from miners.
The move was announced by Finance Minister Situmbeko Musokotwane in his annual budget speech today. A variable-profit tax will be retained which will still capture any windfall gains that may arise in the sector.
Copper accounts for about 70 percent of Zambia’s export income. The country introduced the windfall and variable-profit taxes last year, raising the effective tax rate on miners to 47 percent from 31 percent. On June 10, former Finance Minister Ng’Andu Magande said the country was renegotiating the new code with some mining companies in order to boost mineral production.
Copper prices last year dropped 54 percent last year on the London Metal Exchange - the biggest drop in over 20 years - as recessions in the U.S., Japan and Germany curbed demand for industrial metals.
Revenue collection from the mining industry in 2008 was 319.3 billion kwacha ($62.3 million), compared with a target of 917.3 billion kwacha, according to the Economic Intelligence Unit.
The windfall tax required miners to pay a levy on sales of copper when the price rose above $2.50 per pound. A charge of 25 percent applied to the surplus amount above $2.50 to a maximum of $3.00 per pound, while the rate increased to 50 percent at between $3.00 and $3.50 and 75 percent above $3.50.
In addition, a tax on profits of up to 15 percent was imposed on companies that earned a return in excess of 8 percent on their investments.
The move was announced by Finance Minister Situmbeko Musokotwane in his annual budget speech today. A variable-profit tax will be retained which will still capture any windfall gains that may arise in the sector.
Copper accounts for about 70 percent of Zambia’s export income. The country introduced the windfall and variable-profit taxes last year, raising the effective tax rate on miners to 47 percent from 31 percent. On June 10, former Finance Minister Ng’Andu Magande said the country was renegotiating the new code with some mining companies in order to boost mineral production.
Copper prices last year dropped 54 percent last year on the London Metal Exchange - the biggest drop in over 20 years - as recessions in the U.S., Japan and Germany curbed demand for industrial metals.
Revenue collection from the mining industry in 2008 was 319.3 billion kwacha ($62.3 million), compared with a target of 917.3 billion kwacha, according to the Economic Intelligence Unit.
The windfall tax required miners to pay a levy on sales of copper when the price rose above $2.50 per pound. A charge of 25 percent applied to the surplus amount above $2.50 to a maximum of $3.00 per pound, while the rate increased to 50 percent at between $3.00 and $3.50 and 75 percent above $3.50.
In addition, a tax on profits of up to 15 percent was imposed on companies that earned a return in excess of 8 percent on their investments.
Arch Cuts Production Outlook
One of the world's biggest coal producer, Arch Coal Inc. says fourth-quarter earnings slid but still managed to beat Wall Street's expectations. However, the company is lowering its production outlook for this year, citing continued weakness in the U.S. coal markets.
The company reported net income of $62.3 million, or 44 cents per share, compared with $81.4 million, or 56 cents per share, a year ago.
Revenue rose to $729.8 million from $644.4 million.
Analysts surveyed by Thomson Reuters had expected, on average, earnings per share of 39 cents and revenue of $713.9 million.
For 2008, Arch earned $354.3 million, or $2.45 per share, compared to $174.9 million, or $1.21 per share, in 2007. Analysts on average expected earnings of $2.42 per share.
The company reported net income of $62.3 million, or 44 cents per share, compared with $81.4 million, or 56 cents per share, a year ago.
Revenue rose to $729.8 million from $644.4 million.
Analysts surveyed by Thomson Reuters had expected, on average, earnings per share of 39 cents and revenue of $713.9 million.
For 2008, Arch earned $354.3 million, or $2.45 per share, compared to $174.9 million, or $1.21 per share, in 2007. Analysts on average expected earnings of $2.42 per share.
Foundation Coal To Mothball Three Mines
US coal miner, Foundation Coal Holdings, says it's idling three high-cost West Virginia mines and a preparation plant.
The company says it is stopping work at the Mingo County operations immediately. Foundation says the stoppage will lead to a pre-tax impairment charge to write down up to $36.5 million for the value of the operations.
The company blames high costs, poor market conditions and difficult mining conditions.
The operations are the latest in a string of U.S. coal mines to be idled in recent weeks. Despite high prices, mine operators are bracing for low demand, especially for coking coal used to fire steel blast furnaces.
Foundation produces approximately 70 million tons of coal annually in West Virginia, Pennsylvania and Wyoming.
Source: Daily Press, West Virginia
The company says it is stopping work at the Mingo County operations immediately. Foundation says the stoppage will lead to a pre-tax impairment charge to write down up to $36.5 million for the value of the operations.
The company blames high costs, poor market conditions and difficult mining conditions.
The operations are the latest in a string of U.S. coal mines to be idled in recent weeks. Despite high prices, mine operators are bracing for low demand, especially for coking coal used to fire steel blast furnaces.
Foundation produces approximately 70 million tons of coal annually in West Virginia, Pennsylvania and Wyoming.
Source: Daily Press, West Virginia
Lower Profits Expected At China Armco
China Armco Metals, Inc, a leading ore trading and distribution company in China, today announced its preliminary net income for the year ending December 31st, 2008.
The Company now anticipates its full year net income for the year ended December 31, 2008 will range between $4.4 and $4.7 million. This revised guidance from the previous estimate of $6 million reflects lower than expected revenues due to a global economic slowdown which softened aggregate demand, and created an oversupply of ore in the market. Estimated fourth quarter 2008 net income is now estimated to be approximately $400,000 to $700,000. Based on 8.2 million shares outstanding, full year EPS estimates for 2008 are $0.54 to $0.57 per share.
Mr. Kexuan Yao, CEO of the Company, commented, "The third and fourth quarter can be characterized as the most volatile in both our Company's history and my business career. A combination of decreasing ore prices and a sharp decline in the average cost per ton of steel created an oversupply of ore in the fourth quarter which is still being worked through the system. We were pleased to see the business respond when pricing of ore finally stabilized in December 2008, although this was too late to make a meaningful difference to our fourth quarter financial results. While these results fell short of our expectations, we are pleased with our ability to maintain profitability during such a tumultuous time. We believe this period of price volatility and weak demand will give way to a more stable environment in the coming quarters allowing the Company to deliver measurable growth and profitability during 2009."
The Company remains steadfast in its strategy to capitalize on the recycling demand of producers who have installed arc furnaces and others who have been incentivized by Beijing to modernize operations. The Company expects to launch its one million ton capacity scrap metal facility in the third quarter of 2009. "We are cautiously optimistic about the prospects for iron ore demand, the steel market and China's continued focus on recycling efforts in 2009. We believe the Company is well capitalized and positioned to emerge as a stronger industry player when global markets rebound," added Chairman Yao. Additional details related to industry and business prospects will be included in the Company's 2008 year-end conference call which is expected to be held in March 2009.
The Company now anticipates its full year net income for the year ended December 31, 2008 will range between $4.4 and $4.7 million. This revised guidance from the previous estimate of $6 million reflects lower than expected revenues due to a global economic slowdown which softened aggregate demand, and created an oversupply of ore in the market. Estimated fourth quarter 2008 net income is now estimated to be approximately $400,000 to $700,000. Based on 8.2 million shares outstanding, full year EPS estimates for 2008 are $0.54 to $0.57 per share.
Mr. Kexuan Yao, CEO of the Company, commented, "The third and fourth quarter can be characterized as the most volatile in both our Company's history and my business career. A combination of decreasing ore prices and a sharp decline in the average cost per ton of steel created an oversupply of ore in the fourth quarter which is still being worked through the system. We were pleased to see the business respond when pricing of ore finally stabilized in December 2008, although this was too late to make a meaningful difference to our fourth quarter financial results. While these results fell short of our expectations, we are pleased with our ability to maintain profitability during such a tumultuous time. We believe this period of price volatility and weak demand will give way to a more stable environment in the coming quarters allowing the Company to deliver measurable growth and profitability during 2009."
The Company remains steadfast in its strategy to capitalize on the recycling demand of producers who have installed arc furnaces and others who have been incentivized by Beijing to modernize operations. The Company expects to launch its one million ton capacity scrap metal facility in the third quarter of 2009. "We are cautiously optimistic about the prospects for iron ore demand, the steel market and China's continued focus on recycling efforts in 2009. We believe the Company is well capitalized and positioned to emerge as a stronger industry player when global markets rebound," added Chairman Yao. Additional details related to industry and business prospects will be included in the Company's 2008 year-end conference call which is expected to be held in March 2009.
OMH Achieves Record Annual Production
Diversified commodity marketing, metals and mining house OM Holdings Limited has announced the resumption of manganese export shipments during January 2009 after delivering another strong production performance for the December 2008 Quarter, resulting in record production and shipments for calendar 2008.
OMH said today (Friday) that Q1 2009 export shipments had commenced and Chinese contract shipments are expected to resume in earnest following the Chinese New Year holiday. Shipments were suspended during the December 2008 Quarter in response to weak market conditions arising from the short-term impact of the global financial and economic crisis.
The Company's 100%-owned Bootu Creek Manganese Mine in the Northern Territory posted production for the December 2008 Quarter of 143,465 tonnes at an average grade of 42.2% Mn, taking total production for calendar 2008 to a record 672,580 tonnes at 41.9% Mn.
This was just below the market guidance of 700,000 tonnes after taking into account implementation of the revised production and marketing program announced last year, including the planned cessation of processing activities at Bootu Creek for a two-week period over Christmas and New Year.
The 2009 production strategy is being executed based on production of 500,000tpa, in line with prevailing market conditions. However, measures are in place to respond proactively with increased production once market conditions strengthen. Process plant performance during the year has demonstrated that an annualised production rate of 700,000 tonnes is achievable.
The Company's 100%-owned Qinzhou Smelter in Guangxi, China produced 9,951 tonnes of High Carbon Ferro Manganese (HCFeMn) during the December Quarter, bringing total annual output to a record 45,511 tonnes for calendar 2008.
"After a period of slow ore and alloy market activity during the December Quarter, steel mills in China have begun to re-stock their manganese alloy inventories in preparation for post Chinese New Year steel production, and purchasing and contracting activities have increased considerably during January 2009," said OMH CEO, Peter Toth.
"We have seen emerging signs of a stronger rebound in silico-manganese demand in China, driven by improving long steel product demand and production," he said. "This development has the potential to assist both the short and longer term demand fundamentals for siliceous high-grade manganese ores, which are produced by only a handful of major producers, including Bootu Creek."
Mr Toth said the outlook for the steel industry and steelmaking raw material market remained volatile and uncertain for 2009, with the return of market confidence in manganese ore and alloy markets expected depending on the interaction of a number of key factors including the speed and extent of recovery of the Chinese steel industry, the speed of depletion of remaining ore stockpiles and the full impact of the recently announced production cuts.
"From a medium to longer-term demand perspective, we remain optimistic that China will continue to achieve growth and strong economic performance as its industrialisation and urbanisation continues," he said.
"We remain confident that our focused production strategy, world class resource base, flexible marketing and trading strategies, and strong financial position - with group cash reserves of A$119 million and negligible debt at the end of the December Quarter - places us in a strong position to deliver the best possible operating and commercial performance in 2009 and preparation for the execution of growth options upon market recovery," he continued.
"Our growth strategy for 2009 and beyond will focus on preparing the Company for the execution of the organic expansion opportunities at our Australian and Chinese operations, while continuing to seek out new business development, geographical and commodity diversification opportunities in the steelmaking raw materials sector."
In this regard, the Company's A$10 million exploration program at Bootu Creek successfully concluded during the Quarter, with over 94,000 metres of RC and diamond drilling completed. Preliminary assay results have supported the potential for a substantial increase to the Company's December 2007 Mineral Resource base of 17.75 million tonnes at 25.7% Mn. The updated resource inventory is expected to be released during Q1 2009.
OMH said today (Friday) that Q1 2009 export shipments had commenced and Chinese contract shipments are expected to resume in earnest following the Chinese New Year holiday. Shipments were suspended during the December 2008 Quarter in response to weak market conditions arising from the short-term impact of the global financial and economic crisis.
The Company's 100%-owned Bootu Creek Manganese Mine in the Northern Territory posted production for the December 2008 Quarter of 143,465 tonnes at an average grade of 42.2% Mn, taking total production for calendar 2008 to a record 672,580 tonnes at 41.9% Mn.
This was just below the market guidance of 700,000 tonnes after taking into account implementation of the revised production and marketing program announced last year, including the planned cessation of processing activities at Bootu Creek for a two-week period over Christmas and New Year.
The 2009 production strategy is being executed based on production of 500,000tpa, in line with prevailing market conditions. However, measures are in place to respond proactively with increased production once market conditions strengthen. Process plant performance during the year has demonstrated that an annualised production rate of 700,000 tonnes is achievable.
The Company's 100%-owned Qinzhou Smelter in Guangxi, China produced 9,951 tonnes of High Carbon Ferro Manganese (HCFeMn) during the December Quarter, bringing total annual output to a record 45,511 tonnes for calendar 2008.
"After a period of slow ore and alloy market activity during the December Quarter, steel mills in China have begun to re-stock their manganese alloy inventories in preparation for post Chinese New Year steel production, and purchasing and contracting activities have increased considerably during January 2009," said OMH CEO, Peter Toth.
"We have seen emerging signs of a stronger rebound in silico-manganese demand in China, driven by improving long steel product demand and production," he said. "This development has the potential to assist both the short and longer term demand fundamentals for siliceous high-grade manganese ores, which are produced by only a handful of major producers, including Bootu Creek."
Mr Toth said the outlook for the steel industry and steelmaking raw material market remained volatile and uncertain for 2009, with the return of market confidence in manganese ore and alloy markets expected depending on the interaction of a number of key factors including the speed and extent of recovery of the Chinese steel industry, the speed of depletion of remaining ore stockpiles and the full impact of the recently announced production cuts.
"From a medium to longer-term demand perspective, we remain optimistic that China will continue to achieve growth and strong economic performance as its industrialisation and urbanisation continues," he said.
"We remain confident that our focused production strategy, world class resource base, flexible marketing and trading strategies, and strong financial position - with group cash reserves of A$119 million and negligible debt at the end of the December Quarter - places us in a strong position to deliver the best possible operating and commercial performance in 2009 and preparation for the execution of growth options upon market recovery," he continued.
"Our growth strategy for 2009 and beyond will focus on preparing the Company for the execution of the organic expansion opportunities at our Australian and Chinese operations, while continuing to seek out new business development, geographical and commodity diversification opportunities in the steelmaking raw materials sector."
In this regard, the Company's A$10 million exploration program at Bootu Creek successfully concluded during the Quarter, with over 94,000 metres of RC and diamond drilling completed. Preliminary assay results have supported the potential for a substantial increase to the Company's December 2007 Mineral Resource base of 17.75 million tonnes at 25.7% Mn. The updated resource inventory is expected to be released during Q1 2009.
Norilsk Raises Output For Nickel And Copper
OJSC MMC Norilsk Nickel the world’s largest nickel and palladium producer, announces preliminary consolidated production results for the fourth quarter of 2008 and full year 2008 at its Polar and Kola Divisions in Russia and international operations in Finland, Australia, Botswana and South Africa.
• Overall saleable nickel production for 12 months 2008 amounted to 299.7 thousand metric tonnes comparing to 276 thousand metric tonnes for 12 months 2007.
• Overall saleable copper production for 12 months 2008 increased to 419 thousand metric tonnes from 415 thousand metric tonnes for the same period in 2007.
• The Company has produced 2,821 thousand ounces of palladium and 659 thousand ounces of platinum for 12 months 2008.
The Polar and Kola Divisions in Russia produced 63.4 thousand metric tonnes of nickel and 99.4 thousand metric tonnes of copper in fourth quarter in line with production plan. As expected, full year nickel production totaled 232.3 thousand metric tonnes, copper – 400.4 thousand metric tonnes.
Palladium production in fourth quarter of 2008 amounted to 641.0 thousand troy ounces and platinum production reached 152.4 thousand troy ounces. Polar and Kola Divisions produced 2,701.5 thousand troy ounces of palladium and 632.3 thousand troy ounces of platinum in 2008. As previously announced, the decrease of PGM production in 2008 was due to the scheduled maintenance & repair works at Nadezhda Metallurgical Plant and deliveries of nickel concentrate to Harjavalta refinery in Finland for test runs. We also note that there was certain decrease of base and precious metals grades in ores mined.
Production of saleable nickel by Tati Nickel and Nkomati in 2008 totaled 23,410 metric tonnes (Nkomati production at 50% corresponding to Norilsk Nickel’s ownership). The underproduction of Tati Nickel in fourth quarter of 2008 is due to 8 days suspension of operations in December 2008 following the unforeseen furnace breakdown at BCL Smelter in Botswana, where 90% of the concentrate produced at Tati Nickel is processed.
In Western Australia, total production for the Lake Johnston, Waterloo and Black Swan operations for the fourth quarter of 2008 were in line with the production plans. The Lake Johnston and Waterloo operations produced 4,940 metric tonnes of saleable nickel in the fourth quarter of 2008 and 14,664 metric tonnes of saleable nickel for the full year 2008. During fourth quarter of 2008 Cawse, Waterloo and Silver Swan operations were put on indefinite care & maintenance as part of a reassessment program for international nickel assets of the Company.
The Harjavalta refinery in Finland produced 13,827 metric tonnes of nickel in fourth quarter of 2008, including 7,807 metric tonnes of own saleable nickel (comprising feed from Black Swan and Western Areas treated at the Lake Johnston concentrator, as well as purchased intermediaries) and 6,020 metric tonnes of tolled nickel. Full year production at Harjavalta refinery totaled 51,112 metric tonnes of nickel, including 29,344 metric tonnes of own metal.
The stated production volumes do not include the production figures of Stillwater Mining Company.
ABOUT MMC NORILSK NICKEL:
MMC Norilsk Nickel, a company incorporated under the laws of the Russian Federation, is the largest diversified mining and metals company in Russia, the world's largest producer of nickel and palladium and one of the world's largest producers of platinum, rhodium, copper and cobalt. In addition to this, MMC Norilsk Nickel produces a large number of other by-products, including gold, silver, tellurium, selenium, iridium and ruthenium.
The key production units of the Company’s group in Russia are the Polar Division and OJSC Kola Mining and Metallurgical Company. MMC Norilsk Nickel international assets include operations in Finland, Australia, Botswana and South Africa. MMC Norilsk Nickel is the majority shareholder in Stillwater Mining Company, the largest producer of platinum group metals in North America, whose shares are traded on the New York Stock Exchange.
• Overall saleable nickel production for 12 months 2008 amounted to 299.7 thousand metric tonnes comparing to 276 thousand metric tonnes for 12 months 2007.
• Overall saleable copper production for 12 months 2008 increased to 419 thousand metric tonnes from 415 thousand metric tonnes for the same period in 2007.
• The Company has produced 2,821 thousand ounces of palladium and 659 thousand ounces of platinum for 12 months 2008.
The Polar and Kola Divisions in Russia produced 63.4 thousand metric tonnes of nickel and 99.4 thousand metric tonnes of copper in fourth quarter in line with production plan. As expected, full year nickel production totaled 232.3 thousand metric tonnes, copper – 400.4 thousand metric tonnes.
Palladium production in fourth quarter of 2008 amounted to 641.0 thousand troy ounces and platinum production reached 152.4 thousand troy ounces. Polar and Kola Divisions produced 2,701.5 thousand troy ounces of palladium and 632.3 thousand troy ounces of platinum in 2008. As previously announced, the decrease of PGM production in 2008 was due to the scheduled maintenance & repair works at Nadezhda Metallurgical Plant and deliveries of nickel concentrate to Harjavalta refinery in Finland for test runs. We also note that there was certain decrease of base and precious metals grades in ores mined.
Production of saleable nickel by Tati Nickel and Nkomati in 2008 totaled 23,410 metric tonnes (Nkomati production at 50% corresponding to Norilsk Nickel’s ownership). The underproduction of Tati Nickel in fourth quarter of 2008 is due to 8 days suspension of operations in December 2008 following the unforeseen furnace breakdown at BCL Smelter in Botswana, where 90% of the concentrate produced at Tati Nickel is processed.
In Western Australia, total production for the Lake Johnston, Waterloo and Black Swan operations for the fourth quarter of 2008 were in line with the production plans. The Lake Johnston and Waterloo operations produced 4,940 metric tonnes of saleable nickel in the fourth quarter of 2008 and 14,664 metric tonnes of saleable nickel for the full year 2008. During fourth quarter of 2008 Cawse, Waterloo and Silver Swan operations were put on indefinite care & maintenance as part of a reassessment program for international nickel assets of the Company.
The Harjavalta refinery in Finland produced 13,827 metric tonnes of nickel in fourth quarter of 2008, including 7,807 metric tonnes of own saleable nickel (comprising feed from Black Swan and Western Areas treated at the Lake Johnston concentrator, as well as purchased intermediaries) and 6,020 metric tonnes of tolled nickel. Full year production at Harjavalta refinery totaled 51,112 metric tonnes of nickel, including 29,344 metric tonnes of own metal.
The stated production volumes do not include the production figures of Stillwater Mining Company.
ABOUT MMC NORILSK NICKEL:
MMC Norilsk Nickel, a company incorporated under the laws of the Russian Federation, is the largest diversified mining and metals company in Russia, the world's largest producer of nickel and palladium and one of the world's largest producers of platinum, rhodium, copper and cobalt. In addition to this, MMC Norilsk Nickel produces a large number of other by-products, including gold, silver, tellurium, selenium, iridium and ruthenium.
The key production units of the Company’s group in Russia are the Polar Division and OJSC Kola Mining and Metallurgical Company. MMC Norilsk Nickel international assets include operations in Finland, Australia, Botswana and South Africa. MMC Norilsk Nickel is the majority shareholder in Stillwater Mining Company, the largest producer of platinum group metals in North America, whose shares are traded on the New York Stock Exchange.
Thor Focussed On Molyhill Project
Thor Mining PLC said developing the Molyhill tungsten-molybdenum project in Australia remains its main focus and that it has met with many potential financiers and partners with a view to getting the project into operation.
“The discussions have been very positive to date, however the mood is cautious in the current financial climate, “ the group said in an update for the quarter to end-December 2008.
Investigation of alternatives to reduce capital and operating costs for the project continue.
The quarter saw a fall in the selling price of molybdenum roasted concentrates from US$32 per pound to the steady state of US$10/lb. The selling prices of tungsten ammonium paratungstate (APT) have remained steady between US$235 and US$245 per metric ton unit during the same period. The outlook for both commodities continues to be optimistic with increased demand expected in the coming year, Thor said.
The metallurgical test work on the suitability of the magnetite concentrate for various applications is ongoing with positive early results and encouraging feedback from potential customers.
Source: Proactive Investor
“The discussions have been very positive to date, however the mood is cautious in the current financial climate, “ the group said in an update for the quarter to end-December 2008.
Investigation of alternatives to reduce capital and operating costs for the project continue.
The quarter saw a fall in the selling price of molybdenum roasted concentrates from US$32 per pound to the steady state of US$10/lb. The selling prices of tungsten ammonium paratungstate (APT) have remained steady between US$235 and US$245 per metric ton unit during the same period. The outlook for both commodities continues to be optimistic with increased demand expected in the coming year, Thor said.
The metallurgical test work on the suitability of the magnetite concentrate for various applications is ongoing with positive early results and encouraging feedback from potential customers.
Source: Proactive Investor
Russia To Remove Scrap Copper Import Duty
The Russian government's committee on protective measures in foreign trade and customs and taxes policy has recommended removing the import duty on scrap copper for nine months in order to provide raw materials base for Russian copper manufacturing.
The decision was made in order to enlarge the raw materials base for copper production in the light of the decrease in resources in Moldova and Kazakhstan which are the main suppliers of copper raw materials.
At the end of this week new export duties for nickel, copper, and copper alloys come in to force.
In January the Russian government made the decision to remove export duties for non-alloyed nickel and copper cathodes. (Export duties before were 5% and 10% respectively). Duties for refined copper and copper alloys remain at 10%.
The biggest Russian cooper producers are “Nornickel” and UGMK (Ural Mining an Metallurgical company).
Source: Rusmet
The decision was made in order to enlarge the raw materials base for copper production in the light of the decrease in resources in Moldova and Kazakhstan which are the main suppliers of copper raw materials.
At the end of this week new export duties for nickel, copper, and copper alloys come in to force.
In January the Russian government made the decision to remove export duties for non-alloyed nickel and copper cathodes. (Export duties before were 5% and 10% respectively). Duties for refined copper and copper alloys remain at 10%.
The biggest Russian cooper producers are “Nornickel” and UGMK (Ural Mining an Metallurgical company).
Source: Rusmet
Rio Tinto To Sell South American Potash Interests
Rio Tinto has signed definitive agreements to sell its undeveloped potash assets, largely comprising the Potasio Rio Colorado (PRC) potash project in Argentina, and its Corumbá iron ore mine in Brazil and the associated river logistics operations in Paraguay to Vale, the Brazilian mining company, for a total cash consideration of US$1.6 billion. Completion of the Corumbá transaction remains subject to receipt of the relevant regulatory approvals, whilst no approvals are required in order to complete the potash transaction.
"This transaction demonstrates the depth and quality of our asset portfolio and our ability to unlock value for shareholders despite tough credit markets and economic conditions,” said Guy Elliott, chief financial officer, Rio Tinto. "This is a very positive step towards meeting our commitment to reduce debt by US$10 billion in 2009.”
In December 2008, Rio Tinto announced a detailed package of measures in response to the rapidity and severity of the global economic downturn. One aspect of those measures included expanding the scope of the Group’s existing asset divestment programme.
During 2008, Rio Tinto realised almost US$3 billion from asset sales, comprising the Greens Creek mine in Alaska for US$750 million, its interest in the Cortez operation in Nevada for US$1.695 billion and the Kintyre uranium project in Western Australia for US$495 million. In January 2009, the Group announced the divestment of its interest in the Ningxia aluminum smelter in China for US$125 million.
The potash transaction, comprising PRC and the Regina exploration asset in Canada, is targeting completion and receipt of the cash proceeds in February. The Corumbá transaction will complete when appropriate consents are received, and completion is expected in the second half of 2009. The sales proceeds are allocated US$850 million to the potash assets and US$750 million to the Corumbá assets.
The earnings of the Corumbá iron ore mine were US$6 million for the six months ending 30 June 2008 and US$(12) million for the year ended 31 December 2007. There were no earnings for the potash assets, which are undeveloped. Evaluation expenditure on the potash projects in the first half of 2008 was US$18 million. The gross assets of the Corumbá operations as at 30 June 2008 were US$263 million. Gross assets of the PRC assets were US$33 million as at 30 June 2008. The proceeds from these divestments will be used for the repayment of debt.
About Potasio Rio Colorado
Potasio Rio Colorado – Argentina’s first potash project – is a tier 1 asset located in the Malargüe department in the province of Mendoza. The project is in the feasibility stage and if fully developed will allow Argentina to become one of the world’s major producers of potash, an essential crop nutrient. The life of the mine is projected to last more than 50 years.
About Regina Potash
Regina Potash is a large 1,200km2 property east of the Belle Plaine mine in Saskatchewan, Canada. The project is currently at early evaluation stage and is located close to existing infrastructure.
About Corumbá Operations
Corumbá mine operations are located in western Brazil, in the state of Mato Grosso do Sul. The iron ore is mined from an open pit, processed on site then barged by Transbarge Navegación (Rio Tinto 100%) along the Paraguay River for onward delivery to South American and European customers. Corumbá currently has an annual capacity of 2 million tonnes.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.
"This transaction demonstrates the depth and quality of our asset portfolio and our ability to unlock value for shareholders despite tough credit markets and economic conditions,” said Guy Elliott, chief financial officer, Rio Tinto. "This is a very positive step towards meeting our commitment to reduce debt by US$10 billion in 2009.”
In December 2008, Rio Tinto announced a detailed package of measures in response to the rapidity and severity of the global economic downturn. One aspect of those measures included expanding the scope of the Group’s existing asset divestment programme.
During 2008, Rio Tinto realised almost US$3 billion from asset sales, comprising the Greens Creek mine in Alaska for US$750 million, its interest in the Cortez operation in Nevada for US$1.695 billion and the Kintyre uranium project in Western Australia for US$495 million. In January 2009, the Group announced the divestment of its interest in the Ningxia aluminum smelter in China for US$125 million.
The potash transaction, comprising PRC and the Regina exploration asset in Canada, is targeting completion and receipt of the cash proceeds in February. The Corumbá transaction will complete when appropriate consents are received, and completion is expected in the second half of 2009. The sales proceeds are allocated US$850 million to the potash assets and US$750 million to the Corumbá assets.
The earnings of the Corumbá iron ore mine were US$6 million for the six months ending 30 June 2008 and US$(12) million for the year ended 31 December 2007. There were no earnings for the potash assets, which are undeveloped. Evaluation expenditure on the potash projects in the first half of 2008 was US$18 million. The gross assets of the Corumbá operations as at 30 June 2008 were US$263 million. Gross assets of the PRC assets were US$33 million as at 30 June 2008. The proceeds from these divestments will be used for the repayment of debt.
About Potasio Rio Colorado
Potasio Rio Colorado – Argentina’s first potash project – is a tier 1 asset located in the Malargüe department in the province of Mendoza. The project is in the feasibility stage and if fully developed will allow Argentina to become one of the world’s major producers of potash, an essential crop nutrient. The life of the mine is projected to last more than 50 years.
About Regina Potash
Regina Potash is a large 1,200km2 property east of the Belle Plaine mine in Saskatchewan, Canada. The project is currently at early evaluation stage and is located close to existing infrastructure.
About Corumbá Operations
Corumbá mine operations are located in western Brazil, in the state of Mato Grosso do Sul. The iron ore is mined from an open pit, processed on site then barged by Transbarge Navegación (Rio Tinto 100%) along the Paraguay River for onward delivery to South American and European customers. Corumbá currently has an annual capacity of 2 million tonnes.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.
Fortescue Posts $1 Billion Profit
West Australian iron ore miner Fortescue Metals Group has booked a $1.097 billion net profit in its first full half year of mining. It also says it is aiming to increase production from its flagship Cloudbreak mine in the Pilbara to 23.8 million tonnes (mt) in the second half, giving it full year production of 39 Mt.
The profit for the six months ended December 31 followed a $1.058 billion loss in the previous corresponding period.
Revenue for the first half of 2008/09 was $1.464 billion, compared to nil previously.
Earnings before interest, tax, depreciation and amortisation, excluding a shipping loss of $74 million was $715 million.
Executive director Graeme Rowley said the company had $439 million cash on hand at the end of December.
“The key driver for this improved production rate will be the flow on benefits from the extensive overburden removal program during the last quarter,” the company said in a statement on Friday. Overburden is the ground cover above an ore deposit.
The company said the volume of ore processed during the December quarter was 6.112 Mt, down from 6.682 Mt for the previous quarter.
The forecast volume of processed material for the second half was 18 Mt, which would provide a full financial year result of about 31 Mt. The discrepancy between the volume of mined ore and that of processed ore was due to a loss of material through the plant while ultra-fines are washed to reduce alumina levels. It was also due to a build-up of stockpiled material at the mine site, which is part of a plan to reduce moisture within the feedstock for the ore processing facility.
Fortescue exported 15 Mt of iron one between May 15, when the mine started production, and January 8.
It said in mid-November it would produce 19.8 Mt during calendar 2008, down from previous estimates of 22 Mt.
Source: The West Australian
The profit for the six months ended December 31 followed a $1.058 billion loss in the previous corresponding period.
Revenue for the first half of 2008/09 was $1.464 billion, compared to nil previously.
Earnings before interest, tax, depreciation and amortisation, excluding a shipping loss of $74 million was $715 million.
Executive director Graeme Rowley said the company had $439 million cash on hand at the end of December.
“The key driver for this improved production rate will be the flow on benefits from the extensive overburden removal program during the last quarter,” the company said in a statement on Friday. Overburden is the ground cover above an ore deposit.
The company said the volume of ore processed during the December quarter was 6.112 Mt, down from 6.682 Mt for the previous quarter.
The forecast volume of processed material for the second half was 18 Mt, which would provide a full financial year result of about 31 Mt. The discrepancy between the volume of mined ore and that of processed ore was due to a loss of material through the plant while ultra-fines are washed to reduce alumina levels. It was also due to a build-up of stockpiled material at the mine site, which is part of a plan to reduce moisture within the feedstock for the ore processing facility.
Fortescue exported 15 Mt of iron one between May 15, when the mine started production, and January 8.
It said in mid-November it would produce 19.8 Mt during calendar 2008, down from previous estimates of 22 Mt.
Source: The West Australian
Rusina Leaves Expenditure To Its JVs
Rusina Mining NL said it had a cash balance of A$4.9 million at the end of the third quarter to October 31 2008 and noted the majority of expenditure and operating activities are now being undertaken by its joint venture partners European Nickel PLC and DMCI Mining.
It has implemented a revised budget that limits and/or defers all non-essential expenditure.
In addition to cash on hand there are receivables of A$2.2m payable from its joint venture partners.
A trial shipment under the nickel laterite mining agreement with DMCI Mining of the Plilippines took place to a Japanese customer in the quarter which was successful. DMCI is reviewing mine plans for possible future cargos. The new year has shown some renewed interest in Direct Ship Ore cargos, particularly in high iron content but margins remain low.
Regarding the Acoje nickel project, in which Rusina Mining holds a 40 percent interest, the third quarter saw the release of the pre feasibility study being conducted by European Nickel PLC. The companies anticipate that the resources will be upgraded at by infill drilling during 2009 which should significantly increase the net present value and the rate of return of the project in the future through greater mine life, Rusina said.
The project has now moved into the definitive feasibility study phase with the construction of the trial leach facility to demonstrate the large scale permeability and recovery of the Acoje ore. First leaching is on schedule for April 2009, it added.
Source: Proactive Investors
It has implemented a revised budget that limits and/or defers all non-essential expenditure.
In addition to cash on hand there are receivables of A$2.2m payable from its joint venture partners.
A trial shipment under the nickel laterite mining agreement with DMCI Mining of the Plilippines took place to a Japanese customer in the quarter which was successful. DMCI is reviewing mine plans for possible future cargos. The new year has shown some renewed interest in Direct Ship Ore cargos, particularly in high iron content but margins remain low.
Regarding the Acoje nickel project, in which Rusina Mining holds a 40 percent interest, the third quarter saw the release of the pre feasibility study being conducted by European Nickel PLC. The companies anticipate that the resources will be upgraded at by infill drilling during 2009 which should significantly increase the net present value and the rate of return of the project in the future through greater mine life, Rusina said.
The project has now moved into the definitive feasibility study phase with the construction of the trial leach facility to demonstrate the large scale permeability and recovery of the Acoje ore. First leaching is on schedule for April 2009, it added.
Source: Proactive Investors
Electrolytic Manganese Metal Prices Rising
The market price of Chinese electrolytic manganese metal is continuing to rebound and many Chinese plants are resuming production.
According to a market source, 10 to 20 plants have recently returned to production. as steel mills in China to seek to replenish their stocks.
The export price of electrolytic manganese metal reached USD 2,750 to USD 2,800 per tonne FOB China, having risen by USD 700 per tonne compared with the price in early November.
However, with production resuming, supply has loosened, nevertheless, some Chinese producers are offering electrolytic manganese metal at higher prices of USD 2,800 to USD 3,000 per tonne FOB China.
According to a market source, 10 to 20 plants have recently returned to production. as steel mills in China to seek to replenish their stocks.
The export price of electrolytic manganese metal reached USD 2,750 to USD 2,800 per tonne FOB China, having risen by USD 700 per tonne compared with the price in early November.
However, with production resuming, supply has loosened, nevertheless, some Chinese producers are offering electrolytic manganese metal at higher prices of USD 2,800 to USD 3,000 per tonne FOB China.
Oz Minerals To Take A$100 Million Hit
Oz Minerals Ltd, the world's No. 2 zinc miner, will take a A$100 million ($65.5 million) charge for the second half due to price adjustments caused by falling metals prices.
It said zinc output from its flagship Century zinc mine in eastern Australia, where production costs are higher than selling prices, slipped 3 percent to 125,333 tonnes in the fourth quarter versus the previous quarter.
Copper output from its Sepon mine in Laos fell 8 percent to 16,156 tonnes over the previous quarter.
Oz Minerals was created last year with the merger of Oxiana and Zinifex.
The A$100 million charge stems from negative adjustments to prices on 83,440 tonnes of zinc and 4,920 tonnes of copper sold in 2008 but scheduled to be delivered in the first quarter of 2009. Prices of commodities are typically adjusted to previaling market prices just prior to delivery.
Zinc and copper prices on the London Metal Exchange have each fallen more than 50 percent since the start of last year.
Source: Reuters
Full article
It said zinc output from its flagship Century zinc mine in eastern Australia, where production costs are higher than selling prices, slipped 3 percent to 125,333 tonnes in the fourth quarter versus the previous quarter.
Copper output from its Sepon mine in Laos fell 8 percent to 16,156 tonnes over the previous quarter.
Oz Minerals was created last year with the merger of Oxiana and Zinifex.
The A$100 million charge stems from negative adjustments to prices on 83,440 tonnes of zinc and 4,920 tonnes of copper sold in 2008 but scheduled to be delivered in the first quarter of 2009. Prices of commodities are typically adjusted to previaling market prices just prior to delivery.
Zinc and copper prices on the London Metal Exchange have each fallen more than 50 percent since the start of last year.
Source: Reuters
Full article
Bolivia To Take Controlling Stake In Glencore Zinc Smelter
Bolivia expects to take a controlling stake in a unit of Glencore International AG within weeks as it seeks to boost ownership over the country’s natural resources, Mining Minister Luis Alberto Echazu said.
Bolivia expects to conclude talks with Glencore over its Sinchi Wayra zinc and lead unit amid a drop in metals prices. He didn’t give more details on the size of the stake.
Bolivia's zinc output is expected to drop this year from about 345,000 tons in 2008. Bolivian revenue from all of its metals exports also will decline.
Sinchi Wayra has the capacity to produce 240,000 metric tons of zinc concentrate and 15,000 metric tons of lead concentrate annually, Glencore says on its Web site.
In 2007, Bolivia seized control of Glencore’s Vinto smelter. At the time, the government said it didn’t get a high enough sale price when it sold the smelter in 1996. The smelter was purchased by Glencore in 2005.
Source: Bloomberg
Full article
Bolivia expects to conclude talks with Glencore over its Sinchi Wayra zinc and lead unit amid a drop in metals prices. He didn’t give more details on the size of the stake.
Bolivia's zinc output is expected to drop this year from about 345,000 tons in 2008. Bolivian revenue from all of its metals exports also will decline.
Sinchi Wayra has the capacity to produce 240,000 metric tons of zinc concentrate and 15,000 metric tons of lead concentrate annually, Glencore says on its Web site.
In 2007, Bolivia seized control of Glencore’s Vinto smelter. At the time, the government said it didn’t get a high enough sale price when it sold the smelter in 1996. The smelter was purchased by Glencore in 2005.
Source: Bloomberg
Full article
Thursday, January 29, 2009
Illawarra Coke Suspends Production
Australian coke producer, Illawarra Coke Company, has requested that employees from its two cokeworks take indefinite leave from next week.
The company will suspend coke production from February 6 at its cokeworks at Coalcliff and Corrimal, New South Wales where 49 permanent workers and two contractors are employed.
Employees were called into a meeting on Thursday morning and told the news. The company said all were prepared to take leave.
District vice-president of the United Mine Workers Union, Graham White, said he was optimistic the stoppage would not be long term.
"We are not looking at redundancies," he said.
The company was losing money on its coking process but a major European customer - ArcelorMittal - recently defaulted on a large order.
The price per tonne price the company was receiving from Asian and European coke buyers had fallen below what it paid mining companies, including Illawarra Coal, for coking coal.
Managing director Rex Wright said both plants would be placed on care and maintenance at the end of production next week. Ongoing environmental requirements would be met.
He said the company was "guardedly optimistic" there would be no need for job losses or redundancies.
Directors had already met suppliers to try to renegotiate the price paid for coal, but until any deals were finalised, just how long coke production would cease was the "$64,000 question employees are asking".
"We have a stockpile of coal which we will use to keep the commitments to our customers," Mr Wright said.
Illawarra Coke Company is a major supplier of metallurgical and foundry coke to Australian and overseas base metals producers for lead and zinc smelting and iron production for steel making.
For the past five years it has exported three-quarters of its coke.
Metallurgical and foundry coke has been produced for nearly 100 years on the two sites it now owns.
Source: Illawarra Mercury
The company will suspend coke production from February 6 at its cokeworks at Coalcliff and Corrimal, New South Wales where 49 permanent workers and two contractors are employed.
Employees were called into a meeting on Thursday morning and told the news. The company said all were prepared to take leave.
District vice-president of the United Mine Workers Union, Graham White, said he was optimistic the stoppage would not be long term.
"We are not looking at redundancies," he said.
The company was losing money on its coking process but a major European customer - ArcelorMittal - recently defaulted on a large order.
The price per tonne price the company was receiving from Asian and European coke buyers had fallen below what it paid mining companies, including Illawarra Coal, for coking coal.
Managing director Rex Wright said both plants would be placed on care and maintenance at the end of production next week. Ongoing environmental requirements would be met.
He said the company was "guardedly optimistic" there would be no need for job losses or redundancies.
Directors had already met suppliers to try to renegotiate the price paid for coal, but until any deals were finalised, just how long coke production would cease was the "$64,000 question employees are asking".
"We have a stockpile of coal which we will use to keep the commitments to our customers," Mr Wright said.
Illawarra Coke Company is a major supplier of metallurgical and foundry coke to Australian and overseas base metals producers for lead and zinc smelting and iron production for steel making.
For the past five years it has exported three-quarters of its coke.
Metallurgical and foundry coke has been produced for nearly 100 years on the two sites it now owns.
Source: Illawarra Mercury
Belon Refinances Debt
Belon Group said on Thursday that it has repaid 4.8 billion roubles ($144.5 million) of debt in Q4 2008, largely by refinancing 3.8 billion roubles of its borrowings.
In a statement Belon said that state-controlled bank VTB refinanced 1.8 billion roubles of the debt.
Total debt fell by 800 million roubles in the fourth quarter due to currency movements.
Source: Reuters
Full article
In a statement Belon said that state-controlled bank VTB refinanced 1.8 billion roubles of the debt.
Total debt fell by 800 million roubles in the fourth quarter due to currency movements.
Source: Reuters
Full article
Corus To Sell Teesside Plant
UK steelmaker Corus has confirmed that it is to sell its plant at Redcar in the north east of England to an Italian-led partnership made up of two of Teesside Cast Products’ (TCP) five key customers.
Family-owned Marcegaglia, based in Northern Italy, will become the majority stakeholder in the plant, along with South Korean-based Dongkuk. Corus will retain a minority share of around 25%.
The transfer of ownership will effectively mean the end of the consortium of buyers - made up of Marcegaglia, Dongkuk, Duferco , Imsa (now Ternium), and Corus’ own downstream plants - brought together in 2004 to guarantee TCP’s future.
Last week, it emerged that the plant, which employs around 2,000 staff, had escaped swingeing job cuts as Indian-owned Corus scaled back its UK production.
TCP MD Jon Bolton said the plant would continue to supply all five of the former consortium members but the consortium deal had been torn up.
“It’s a different arrangement. The two members will have an equity share and we will continue to supply all of them - it’s very positive.”
The impact on local management of the plant is still unclear.
“Any change of ownership will have an impact but it’s difficult to say what that will be at the moment,” said Mr Bolton.
“As far as investment goes, they are aware of our plans.”
Last year, TCP reopened negotiations with the consortium on extending the supply deal beyond 2014.
Discussions revolved around major investment in the plant’s blast furnace.
The new deal, reportedly worth, $450m, will guarantee steelmaking stays on Teesside, Mr Bolton said earlier this week.
It relieves Tata-owned Corus of a large plant and helps restore stability to its balance sheet after a massive slump in world steel demand.
Source: Newcastle Journal
Family-owned Marcegaglia, based in Northern Italy, will become the majority stakeholder in the plant, along with South Korean-based Dongkuk. Corus will retain a minority share of around 25%.
The transfer of ownership will effectively mean the end of the consortium of buyers - made up of Marcegaglia, Dongkuk, Duferco , Imsa (now Ternium), and Corus’ own downstream plants - brought together in 2004 to guarantee TCP’s future.
Last week, it emerged that the plant, which employs around 2,000 staff, had escaped swingeing job cuts as Indian-owned Corus scaled back its UK production.
TCP MD Jon Bolton said the plant would continue to supply all five of the former consortium members but the consortium deal had been torn up.
“It’s a different arrangement. The two members will have an equity share and we will continue to supply all of them - it’s very positive.”
The impact on local management of the plant is still unclear.
“Any change of ownership will have an impact but it’s difficult to say what that will be at the moment,” said Mr Bolton.
“As far as investment goes, they are aware of our plans.”
Last year, TCP reopened negotiations with the consortium on extending the supply deal beyond 2014.
Discussions revolved around major investment in the plant’s blast furnace.
The new deal, reportedly worth, $450m, will guarantee steelmaking stays on Teesside, Mr Bolton said earlier this week.
It relieves Tata-owned Corus of a large plant and helps restore stability to its balance sheet after a massive slump in world steel demand.
Source: Newcastle Journal
Zlatoust Profits Slide On Decreasing Metals Prices
Profits at ETAR subsidiary, the Zlatoust Metallurgical Works in Russia's Chelyabinsk region, fell by 75.6 percent in 2008 as the world price of metals fell.
Sales for the 2008 fiscal year increased by 8 percent to just over 12 billion roubles but profits slumped from 703 million roubles to 172 million.
The company invested 260 million roubles in technology during the year, bringing to over 1 billion roubles the total amount invested between 2006 and 2008.
The company employs over 8600 people.
Source: Rusmet; Uralpress
Sales for the 2008 fiscal year increased by 8 percent to just over 12 billion roubles but profits slumped from 703 million roubles to 172 million.
The company invested 260 million roubles in technology during the year, bringing to over 1 billion roubles the total amount invested between 2006 and 2008.
The company employs over 8600 people.
Source: Rusmet; Uralpress
Chinese Steel Mills Expect Price Increases This Year
A survey of 24 Chinese steel mills reveals that most expect steel prices to rise this year in spite of faultering domestic demand and exports.
According to the survey by Steel Business Briefing, a majority of the mills expect average steel prices to rise, even though half of them expect domestic steel demand to fall and two-thirds expect exports to decline.
Baosteel, China's largest steelmaker, has already decided to raise product prices by 6 to 10 percent from February after the Chinese government announced it would likely spend 10 to 15 billion yuan to establish a reserve of 3 to 5 million tons late last December.
Many steelmakers have released their prediction for their 2008 annuan reports. Most of them are predicting net profits will drop by more than 50 percent. Profits at Anshan Steel are expected to drop 55 percent, and Liuzhou Steel 98 percent.
Source: Proactive Investor
According to the survey by Steel Business Briefing, a majority of the mills expect average steel prices to rise, even though half of them expect domestic steel demand to fall and two-thirds expect exports to decline.
Baosteel, China's largest steelmaker, has already decided to raise product prices by 6 to 10 percent from February after the Chinese government announced it would likely spend 10 to 15 billion yuan to establish a reserve of 3 to 5 million tons late last December.
Many steelmakers have released their prediction for their 2008 annuan reports. Most of them are predicting net profits will drop by more than 50 percent. Profits at Anshan Steel are expected to drop 55 percent, and Liuzhou Steel 98 percent.
Source: Proactive Investor
RT Slashes JSW Coal Price By 43 Percent
Rio Tinto Group has agreed to cut coking coal prices for India’s JSW Steel Ltd. by 43 percent for the last three months of an annual contract after a slump in global demand.
Prices will be slashed to $175 a metric ton for the three months ending March 31, from $305 a ton, JSW Finance Director Seshagiri Rao said today in a telephone interview in Mumbai. JSW is India’s third-largest steelmaker.
Source: Bloomberg
See also: Rio Tinto Coal Price Cut May Signal Reduction for Brazil Mills
Prices will be slashed to $175 a metric ton for the three months ending March 31, from $305 a ton, JSW Finance Director Seshagiri Rao said today in a telephone interview in Mumbai. JSW is India’s third-largest steelmaker.
Source: Bloomberg
See also: Rio Tinto Coal Price Cut May Signal Reduction for Brazil Mills
Gabon Urges Development Of Iron Ore Mine
Gabon has urged China to accelerate the development of an iron-ore project at Belinga, some 500km east of Libreville, the capital of the Central African country.
The project has been delayed by the global financial crisis, .
“We need to finalize this project because we expect the creation of 20,000 jobs for the country,” Mining and Oil Minister Casimir Oye Mba said in remarks broadcast on state-owned Radio Television Gabonaise yesterday.
China’s Ambassador to Gabon, Xue Wei Jin, held talks last week with Georgette Koko, Gabon’s deputy prime minister in charge of the environment, to review the progress of an environmental study before work starts on the site.
China National Machinery and Equipment Import and Export Corp. announced in July that it had signed a 25-year accord with Gabon’s government to build and operate the mine producing as much as 30 million metric tons a year of iron ore. The state-owned contracting company, known as Sinomach, will also build a 500-kilometre railway, a port and a water power station.
The total cost of the mine will exceed $790 million, according to China Daily.
Source: Bloomberg
The project has been delayed by the global financial crisis, .
“We need to finalize this project because we expect the creation of 20,000 jobs for the country,” Mining and Oil Minister Casimir Oye Mba said in remarks broadcast on state-owned Radio Television Gabonaise yesterday.
China’s Ambassador to Gabon, Xue Wei Jin, held talks last week with Georgette Koko, Gabon’s deputy prime minister in charge of the environment, to review the progress of an environmental study before work starts on the site.
China National Machinery and Equipment Import and Export Corp. announced in July that it had signed a 25-year accord with Gabon’s government to build and operate the mine producing as much as 30 million metric tons a year of iron ore. The state-owned contracting company, known as Sinomach, will also build a 500-kilometre railway, a port and a water power station.
The total cost of the mine will exceed $790 million, according to China Daily.
Source: Bloomberg
Merrex Gold Seeks $3 Billion for Zinc Exploration
A Nova Scotia mineral exploration company wants to raise $3.2 million for more zinc exploration in Cape Breton.
Despite the tight credit crunch, Merrex Gold announced in its latest financial report that it will go out to the capital markets to raise money for its exploration plans in 2009.
"We’re in a better position than others with a good partner and the Mali (gold) project," company spokesman Jamie MacNeil said Wednesday.
Merrex recently partnered with Toronto’s Iamgold, one of the world’s top gold producers, which invested $12 million in further exploration at Merrex’s gold discovery in Mali, West Africa, he said.
The junior exploration company announced last October it plans to spin off its Cape Breton zinc project at Little Narrows known as the Jubilee project into its own company, but that hasn’t happened yet, Mr. MacNeil said.
Company president Greg Isenor, who has been developing the deposit of lead and zinc for the past 30 years, has previously said that if the Jubilee project formed its own company, the resource could expand and eventually go into production.
Merrex spent almost $5 million in exploration until the end of November on the Jubilee project, in Inverness and Victoria counties, the company reported in its quarterly statements with securities regulators Wednesday.
The company also reported a loss of $345,062 for the three months ended Nov. 30, 2008, compared with a net loss of $515,085 for the same period in 2007. The decrease in the loss was attributed to a drop of $256,803 in administrative costs.
Besides the zinc project in Cape Breton, Merrex also explores for gold in West Africa and Turkey and in Red Lake, Ont.
Source: Chronicle Herald, Nova Scotia, Canada
Despite the tight credit crunch, Merrex Gold announced in its latest financial report that it will go out to the capital markets to raise money for its exploration plans in 2009.
"We’re in a better position than others with a good partner and the Mali (gold) project," company spokesman Jamie MacNeil said Wednesday.
Merrex recently partnered with Toronto’s Iamgold, one of the world’s top gold producers, which invested $12 million in further exploration at Merrex’s gold discovery in Mali, West Africa, he said.
The junior exploration company announced last October it plans to spin off its Cape Breton zinc project at Little Narrows known as the Jubilee project into its own company, but that hasn’t happened yet, Mr. MacNeil said.
Company president Greg Isenor, who has been developing the deposit of lead and zinc for the past 30 years, has previously said that if the Jubilee project formed its own company, the resource could expand and eventually go into production.
Merrex spent almost $5 million in exploration until the end of November on the Jubilee project, in Inverness and Victoria counties, the company reported in its quarterly statements with securities regulators Wednesday.
The company also reported a loss of $345,062 for the three months ended Nov. 30, 2008, compared with a net loss of $515,085 for the same period in 2007. The decrease in the loss was attributed to a drop of $256,803 in administrative costs.
Besides the zinc project in Cape Breton, Merrex also explores for gold in West Africa and Turkey and in Red Lake, Ont.
Source: Chronicle Herald, Nova Scotia, Canada
Merafe Expecting R1 Billion Profit For 2008
Ferrochrome producer Merafe Resources’ net profit for 2008 is expected increase by between 317% and 358%, on the back of record ferrochrome prices in the financial year, the JSE-listed company said on Thursday.
Merafe, which produces ferrochrome in a joint-venture with Zug-based Xstrata, said it expected to post net profit of between R1-billion and R1,1-billion, resulting in earnings a share and headline earnings a share of between 41c and 45c a share.
“2008 was a record year for Merafe, mainly due to record ferrochrome prices and strong cost control,” the company said, adding that the first half of the year was characterised by “robust” supply demand fundamentals.
Ferrochrome base prices remained strong throughout the year, with the average European benchmark price of $1,76/lb, climbing 97% on the previous year’s price.
In the first half of 2008, most ferrochrome producers deferred or scrapped plans to expand, owing to electricity constraints in South Africa, which is the world’s largest ferrochrome producer. And, with the current global economic slowdown, the deferral of planned expansions was expected to continue.
Merafe said that this would put upward pressure on pricing, when the global demand recovered, as these decisions would lead to ferrochrome supply constraints.
In the financial year ended December 31, the company reported attributable saleable production of 223 000 t of ferrochrome, mainly used mainly in the production of stainless steel.
However, output was lower than the previous year, following significant production cuts in the final quarter of 2008, in response to the worldwide economic slowdown.
The Xstrata-Merafe chrome JV has suspended 80% of its yearly output. First, it had suspended production at 11 of its furnaces, and early this month, the venture had suspended a further six furnaces, leaving only three out of 20 ferrochrome furnaces operating.
The total suspended output capacity represented 1,37-million tons of the annual operating capacity.
However, despite the cutback, Merafe had decided to hold on to its operations personnel, to enable the company to snap back into action when the demand for ferrochrome picks up.
The outlook for ferrochrome remained robust in the medium term, as stainless steel production was expected to rise from the current low levels, supported by major economic stimulus plans, which included significant investment in infrastructure.
But for 2009, global stainless steel production was expected to be lower than 2008’s output, which was already 11% lower than 2007’s production.
Stainless steel production dropped during the 2008 Olympic Games in China, and that was followed by a dramatic slump in demand in the fourth quarter, owing to global financial turmoil, affecting most commodity markets.
The company will release its results on March 3.
Source: Mining Weekly
Merafe, which produces ferrochrome in a joint-venture with Zug-based Xstrata, said it expected to post net profit of between R1-billion and R1,1-billion, resulting in earnings a share and headline earnings a share of between 41c and 45c a share.
“2008 was a record year for Merafe, mainly due to record ferrochrome prices and strong cost control,” the company said, adding that the first half of the year was characterised by “robust” supply demand fundamentals.
Ferrochrome base prices remained strong throughout the year, with the average European benchmark price of $1,76/lb, climbing 97% on the previous year’s price.
In the first half of 2008, most ferrochrome producers deferred or scrapped plans to expand, owing to electricity constraints in South Africa, which is the world’s largest ferrochrome producer. And, with the current global economic slowdown, the deferral of planned expansions was expected to continue.
Merafe said that this would put upward pressure on pricing, when the global demand recovered, as these decisions would lead to ferrochrome supply constraints.
In the financial year ended December 31, the company reported attributable saleable production of 223 000 t of ferrochrome, mainly used mainly in the production of stainless steel.
However, output was lower than the previous year, following significant production cuts in the final quarter of 2008, in response to the worldwide economic slowdown.
The Xstrata-Merafe chrome JV has suspended 80% of its yearly output. First, it had suspended production at 11 of its furnaces, and early this month, the venture had suspended a further six furnaces, leaving only three out of 20 ferrochrome furnaces operating.
The total suspended output capacity represented 1,37-million tons of the annual operating capacity.
However, despite the cutback, Merafe had decided to hold on to its operations personnel, to enable the company to snap back into action when the demand for ferrochrome picks up.
The outlook for ferrochrome remained robust in the medium term, as stainless steel production was expected to rise from the current low levels, supported by major economic stimulus plans, which included significant investment in infrastructure.
But for 2009, global stainless steel production was expected to be lower than 2008’s output, which was already 11% lower than 2007’s production.
Stainless steel production dropped during the 2008 Olympic Games in China, and that was followed by a dramatic slump in demand in the fourth quarter, owing to global financial turmoil, affecting most commodity markets.
The company will release its results on March 3.
Source: Mining Weekly
Kazakhmys To Cut Copper Output
Kazakhstan-focused copper producer Kazakhmys said annual copper production was slightly ahead of expectations, however the company is to cut back on production in 2009. Annual output for 2008 was 340.1 kilotonnes (kt) of cathode from Kazakhmys’s own material plus 3.5 kt of copper sold in concentrate.
By-product output over the year was generally positive with production of zinc in concentrate up 3% to 137.3 kt and gold production up 9% to 123.4 kilo-ounces (koz). Silver production declined by 12% to 16,710 koz.
The company has announced capital expenditure reductions in its copper operations of $250m and has identified efficiency savings of $200m. Copper cathode output in 2009 is to be cut back to around 300 kt.
Net debt was $1.66bn at the end of 2008.
“With the suspension of selected higher cost operations and a significant reduction in discretionary capex, we believe we are better placed to continue to operate through the downturn and to maintain our flexibility to increase capacity when market conditions improve,” said Oleg Novachuk, chief executive officer of Kazakhmys.
By-product output over the year was generally positive with production of zinc in concentrate up 3% to 137.3 kt and gold production up 9% to 123.4 kilo-ounces (koz). Silver production declined by 12% to 16,710 koz.
The company has announced capital expenditure reductions in its copper operations of $250m and has identified efficiency savings of $200m. Copper cathode output in 2009 is to be cut back to around 300 kt.
Net debt was $1.66bn at the end of 2008.
“With the suspension of selected higher cost operations and a significant reduction in discretionary capex, we believe we are better placed to continue to operate through the downturn and to maintain our flexibility to increase capacity when market conditions improve,” said Oleg Novachuk, chief executive officer of Kazakhmys.
HZL Cuts Zinc Price, Raises Lead
India's Hindustan Zinc Ltd has cut its zinc price by INR1,300 a metric ton to INR69,700/ton with immediate effect, the company said on Thursday.
The company, a subsidiary of London-listed Vedanta Resources Plc, raised its lead price by INR1,200/ton to INR70,200/ton.
The company, a subsidiary of London-listed Vedanta Resources Plc, raised its lead price by INR1,200/ton to INR70,200/ton.
Xstrata Pays $2 Billion For Colombian Coal Assets
Xstrata is to pay $2bn in cash for the Prodeco coal assets in Colombia from Glencore, its largest shareholder, as a result of a rights issue announced today.
The London-listed mining group is to raise $5.8bn (£4.1bn) as it looks to reduce its debt burden in the wake of a slump in ferrochrome prices. Chinese mills cut the price they pay for the alloy by 55pc. Xstrata operates the world's largest ferrochrome producer jointly with South Africa's Merafe.
The company will offer about 1.96 billion shares at 210 pence each. Net debt will fall to about $12.6 billion after the offer, down from $16.3 billion as of Dec. 31.
Glencore is to take up its 34 percent share of the stock, which will be at a discount of about 40 percent to the so-called theoretical ex-rights price based on yesterday’s close.
Global commodity companies are under growing pressure as the credit crisis has limited the availability of new funds and the creeping global recession has cut demand for metals, with production of products from white goods to cars falling sharply.
Mining rival Rio Tinto yesterday confirmed that it "did not rule out the potential to issue equity as one of the options it has available".
The company, which is reported to be looking at a rights issue of as much as $7bn, has almost $40bn of debts following its $38bn acquisition of Canadian aluminium producer Alcan in July 2007.
Analysts have been predicting that Xstrata would need to raise new capital for at least a month, arguing the company could have to renegotiate the terms of its bank loans if metal prices do not recover.
Xstrata has expanded rapidly in recent years, racking up more than $14bn of debts as of June last year after spending $17bn on Falconbridge, the Canadian copper, nickel and zinc miner, and £515m acquiring South African platinum miner Eland.
The mining company - which has seen its market value slump from £43bn in May last year to just £6.1bn at yesterday's close - also acquired a 25pc stake in platinum producer Lonmin.
Source: Daily Telegraph, London; Bloomberg
The London-listed mining group is to raise $5.8bn (£4.1bn) as it looks to reduce its debt burden in the wake of a slump in ferrochrome prices. Chinese mills cut the price they pay for the alloy by 55pc. Xstrata operates the world's largest ferrochrome producer jointly with South Africa's Merafe.
The company will offer about 1.96 billion shares at 210 pence each. Net debt will fall to about $12.6 billion after the offer, down from $16.3 billion as of Dec. 31.
Glencore is to take up its 34 percent share of the stock, which will be at a discount of about 40 percent to the so-called theoretical ex-rights price based on yesterday’s close.
Global commodity companies are under growing pressure as the credit crisis has limited the availability of new funds and the creeping global recession has cut demand for metals, with production of products from white goods to cars falling sharply.
Mining rival Rio Tinto yesterday confirmed that it "did not rule out the potential to issue equity as one of the options it has available".
The company, which is reported to be looking at a rights issue of as much as $7bn, has almost $40bn of debts following its $38bn acquisition of Canadian aluminium producer Alcan in July 2007.
Analysts have been predicting that Xstrata would need to raise new capital for at least a month, arguing the company could have to renegotiate the terms of its bank loans if metal prices do not recover.
Xstrata has expanded rapidly in recent years, racking up more than $14bn of debts as of June last year after spending $17bn on Falconbridge, the Canadian copper, nickel and zinc miner, and £515m acquiring South African platinum miner Eland.
The mining company - which has seen its market value slump from £43bn in May last year to just £6.1bn at yesterday's close - also acquired a 25pc stake in platinum producer Lonmin.
Source: Daily Telegraph, London; Bloomberg
Coal And Allied Forecasts Weaker Coal Market
Australian company, Coal & Allied Industries, which is majority owned by Rio Tinto, has announced profits for the 2008 calendar year up 631% to $804 million on the back of higher commodity prices and a weaker Australian dollar. However, the company is forecasting a weaker coal market this year.
Revenue during the 12 months to December 31 increased by 94% to $2.67 billion due to higher coal prices and a change in the sales mix, with a greater proportion of sales of semi-soft coking coal to maximise returns.
The company said higher input costs had adversely impacted the 2008 full year result with the company paying $166 million in government royalties in the year compared with $67 million in 2007.
Thermal and coking coal prices have increased amid infrastructure constraints on the east coast of Australia and increased demand from China, but a cutback in demand due to the global economic crisis is putting pressure on commodity prices.
Coal & Allied managing director Bill Champion said the company had benefited from record thermal coal prices and a weaker dollar but warned of tougher market conditions ahead.
''We will see more subdued markets in 2009 with thermal coal prices likely to soften compared with 2008,'' said managing director Bill Champion in a statement. ''As well, the premium for semi-soft coking coal over thermal prices also is likely to narrow.''
Coal & Allied has three operations in the Hunter Valley of New South Wales producing thermal coal, semi-soft coking coal and pulverised injection coal.
In terms of volume sales for 2008 were 1.4% lower than the previous year at 18.67 million tonnes, while full year output rose 5.1% to 18.61 million tonnes.
Revenue during the 12 months to December 31 increased by 94% to $2.67 billion due to higher coal prices and a change in the sales mix, with a greater proportion of sales of semi-soft coking coal to maximise returns.
The company said higher input costs had adversely impacted the 2008 full year result with the company paying $166 million in government royalties in the year compared with $67 million in 2007.
Thermal and coking coal prices have increased amid infrastructure constraints on the east coast of Australia and increased demand from China, but a cutback in demand due to the global economic crisis is putting pressure on commodity prices.
Coal & Allied managing director Bill Champion said the company had benefited from record thermal coal prices and a weaker dollar but warned of tougher market conditions ahead.
''We will see more subdued markets in 2009 with thermal coal prices likely to soften compared with 2008,'' said managing director Bill Champion in a statement. ''As well, the premium for semi-soft coking coal over thermal prices also is likely to narrow.''
Coal & Allied has three operations in the Hunter Valley of New South Wales producing thermal coal, semi-soft coking coal and pulverised injection coal.
In terms of volume sales for 2008 were 1.4% lower than the previous year at 18.67 million tonnes, while full year output rose 5.1% to 18.61 million tonnes.
MMK Secures 41 Percent Iron Ore Reduction
Russian steelmaker MMK claims it has secured a 41 percent decrease in its iron ore price for 2009.
Company chairman Mr V Rashnikov said that the company managed to agree a reduction in price from USD85 to USD 50 per tonne from January 2009 despite a long term contract till April 1st 2009.
The main iron ore supplier to MMK is ENRC of Kazakhstan. Both sides concluded a 10 year contract in 2007 with the price to be revised yearly according to global iron ore prices.
Company chairman Mr V Rashnikov said that the company managed to agree a reduction in price from USD85 to USD 50 per tonne from January 2009 despite a long term contract till April 1st 2009.
The main iron ore supplier to MMK is ENRC of Kazakhstan. Both sides concluded a 10 year contract in 2007 with the price to be revised yearly according to global iron ore prices.
Gabanintha To Yield Australia's Highest Grade Vanadium
Yellow Rock Resources has announced the increase and upgrade in the mineral resource at the Gabanintha vanadium-iron-titanium project in Western Australia.
The completed resource statement report on the vanadium-iron-titanium deposit at the Gabanintha project defines it as the Australia’s highest grade massive magnetite hosted vanadium deposit.
The main points of the report are:
1. An increase in the total Mineral Resource to 151.5 million tonnes from 90 million tonnes to 100 meters depth
2. The total contained Vanadium metal has increased by 30%
3. The total high grade Resource is now 70 million tonnes at 0.87% V2O5
4. The identification of shallow scree resource of 12 million tonnes at 0.43% V2O5 and low grade hanging wall resource of 70 million tonnes at 0.39% V2O5
5. The Vanadium Mineral Resource is also rich in iron and titanium
This unique ore type stacking would allow the exploitation of a low grade feed to an onsite ferrovanadium plant similar to that at Windimurra as well as the direct shipping of a lump or fine Balla Balla style iron rich feedstock on the single site.
New drilling will confirm mineralization types and grades to the current depth of 100 meters and will also test the depth of the ore body to 300 meters to include both high grade magnetite ilmenite vanadium as well as the lower grade hanging wall resource.
Source: Proactive Investor
The completed resource statement report on the vanadium-iron-titanium deposit at the Gabanintha project defines it as the Australia’s highest grade massive magnetite hosted vanadium deposit.
The main points of the report are:
1. An increase in the total Mineral Resource to 151.5 million tonnes from 90 million tonnes to 100 meters depth
2. The total contained Vanadium metal has increased by 30%
3. The total high grade Resource is now 70 million tonnes at 0.87% V2O5
4. The identification of shallow scree resource of 12 million tonnes at 0.43% V2O5 and low grade hanging wall resource of 70 million tonnes at 0.39% V2O5
5. The Vanadium Mineral Resource is also rich in iron and titanium
This unique ore type stacking would allow the exploitation of a low grade feed to an onsite ferrovanadium plant similar to that at Windimurra as well as the direct shipping of a lump or fine Balla Balla style iron rich feedstock on the single site.
New drilling will confirm mineralization types and grades to the current depth of 100 meters and will also test the depth of the ore body to 300 meters to include both high grade magnetite ilmenite vanadium as well as the lower grade hanging wall resource.
Source: Proactive Investor
Slight Drop In Profits At Sesa Goa
Sesa Goa has declared its third quarter results. The company's Q3 net profit down 7.3% at Rs 4.7 billion (Rs 470 crore) versus Rs 5.056 billion (Rs 505.6 crore). Net sales were up 14.9% at Rs 13.74 billion (Rs 1,374 crore) versus Rs 12.18 billion (Rs 1,218 crore).
Despite the fall in profits, Managing Director PK Mukherjee still maintains the company’s FY09 guidance of 25-30% volume growth. He sees strong signs of recovery and prices bottoming out soon.
He said December cash and cash equivalents stood at Rs32 billion (Rs 3200 crore). "To this, we would add Rs 1000 crore cash in Q4 FY09."
Mukherjee said pig iron and met-coke division has been hit by domestic demand. "Though the demand for pig iron is moving up there has been no recovery in prices."
Source: Moneycontrol
Despite the fall in profits, Managing Director PK Mukherjee still maintains the company’s FY09 guidance of 25-30% volume growth. He sees strong signs of recovery and prices bottoming out soon.
He said December cash and cash equivalents stood at Rs32 billion (Rs 3200 crore). "To this, we would add Rs 1000 crore cash in Q4 FY09."
Mukherjee said pig iron and met-coke division has been hit by domestic demand. "Though the demand for pig iron is moving up there has been no recovery in prices."
Source: Moneycontrol
Wednesday, January 28, 2009
Donner, Xstrata Announce Bracemac-McLeod Results
Donner Metals of Vancouver and Xstrata Zinc of Toronto have announced numbers for their Bracemac-McLeod discovery near Matagami, Quebec.
The 43-101-compliant indicated resource 3.65 million tonnes averaging 11.09% Zn, 1.55% Cu, 31.34 g/t Ag and 0.48 g/t Au. Mineralisation is said to be typical of the Matagami Camp, and Donner added that there is the potential to discovery additional high-grade sulphides.
Xstrata Zinc is conducting a scoping study that includes metallurgical testing, preliminary engineering for an underground mine with ramp access, and preliminary capital costs. Ore from a new mine could be processed at Xstrata's concentrator in Matagami.
A total of 90,185 metres of diamond drilling in 180 drill holes has been completed on the Matagami project since the joint venture was formed in late 2006. Approximately 80,000 metres of diamond drilling have been focused on, and in the vicinity of, the Bracemac-McLeod discovery.
Source: Canadian Mining Journal
The 43-101-compliant indicated resource 3.65 million tonnes averaging 11.09% Zn, 1.55% Cu, 31.34 g/t Ag and 0.48 g/t Au. Mineralisation is said to be typical of the Matagami Camp, and Donner added that there is the potential to discovery additional high-grade sulphides.
Xstrata Zinc is conducting a scoping study that includes metallurgical testing, preliminary engineering for an underground mine with ramp access, and preliminary capital costs. Ore from a new mine could be processed at Xstrata's concentrator in Matagami.
A total of 90,185 metres of diamond drilling in 180 drill holes has been completed on the Matagami project since the joint venture was formed in late 2006. Approximately 80,000 metres of diamond drilling have been focused on, and in the vicinity of, the Bracemac-McLeod discovery.
Source: Canadian Mining Journal
Portage Buys Ontario Iron Ore Properties
Portage Minerals Inc. has announced an agreement to buy the Cotton and Minnitaki Lake iron ore properties in Ontario.
The Cotton property is located in Cotton Township, 90 kilometres north of Sudbury and comprises seven contiguous unpatented mining claims totaling 74 claim units covering approximately 1,264 hectares. The Minnitaki Lake Property is located 13 kilometres south of Sioux Lookout and comprises 38 contiguous unpatented mining claims totaling 450 claim units covering approximately 7,769 hectares.
Under the terms of the agreement Portage will acquire a 100% interest in each of the properties in exchange for: $150,000 in cash; 15,000,000 common shares; and a 2% net smelter return royalty, 1% of the royalty can be purchased by Portage for $1,000,000. The cash component of the purchase price is payable upon Portage completing a financing (or financings) sufficient to complete the recommendations in the 43-101 technical report relating to the properties.
The Cotton property is located in Cotton Township, 90 kilometres north of Sudbury and comprises seven contiguous unpatented mining claims totaling 74 claim units covering approximately 1,264 hectares. The Minnitaki Lake Property is located 13 kilometres south of Sioux Lookout and comprises 38 contiguous unpatented mining claims totaling 450 claim units covering approximately 7,769 hectares.
Under the terms of the agreement Portage will acquire a 100% interest in each of the properties in exchange for: $150,000 in cash; 15,000,000 common shares; and a 2% net smelter return royalty, 1% of the royalty can be purchased by Portage for $1,000,000. The cash component of the purchase price is payable upon Portage completing a financing (or financings) sufficient to complete the recommendations in the 43-101 technical report relating to the properties.
Alliance Resource Partners Reports Q4 Profit Fall
US coal producer Alliance Resource Partners has reported a fall in fourth-quarter income of 36 percent on the loss of a tax credit and expenses that outstripped revenue growth.
Profits stood at $25.2 million in the quarter compared to $39.9 million in the corresponding quarter of 2007.
Revenue for the quarter increased 23 percent to $310.9 million, compared with $252.4 million in Q4 2007.
Operating expenses jumped 33.9 percent to $218.6 million in the quarter, up from $163.3 million in Q4 2007. The expiration of a tax credit for synfuel in 2007 reduced the quarter's profit by around $3.6 million as well, Alliance said.
The company said it expects production to increase to 28.5-29 million tons of coal in 2009 compared with 26.4 million tons last year and plans to go forward with the development of two large underground mines at River View in western Kentucky and Tunnel Ridge on the Ohio/Pennsylvania border
Tunnel Ridge is expected to produce up to 6 million tons of coal annually at full production in 2012 while River View will produce this year 6.4 million tonnes at full capacity. Mining at River View will commence later this year.
Work on new mines in southern Indiana and southwestern Pennsylvania is continuing, though no timing has been put on their operation.
Profits stood at $25.2 million in the quarter compared to $39.9 million in the corresponding quarter of 2007.
Revenue for the quarter increased 23 percent to $310.9 million, compared with $252.4 million in Q4 2007.
Operating expenses jumped 33.9 percent to $218.6 million in the quarter, up from $163.3 million in Q4 2007. The expiration of a tax credit for synfuel in 2007 reduced the quarter's profit by around $3.6 million as well, Alliance said.
The company said it expects production to increase to 28.5-29 million tons of coal in 2009 compared with 26.4 million tons last year and plans to go forward with the development of two large underground mines at River View in western Kentucky and Tunnel Ridge on the Ohio/Pennsylvania border
Tunnel Ridge is expected to produce up to 6 million tons of coal annually at full production in 2012 while River View will produce this year 6.4 million tonnes at full capacity. Mining at River View will commence later this year.
Work on new mines in southern Indiana and southwestern Pennsylvania is continuing, though no timing has been put on their operation.
National Coal Corp Signs Three-Year Coal Contract
East Tennessee coal miner, National Coal Corp. has signed a three-year coal contract to supply 560,000 tons of coal at $95 a ton, the company said on Wednesday.
Deliveries “will have a significant impact on both the Company’s average selling price and its committed tons through 2011,” and will begin during the second quarter. The company has not named the other party or parties to the contract.
With the addition of the new contract, National Coal commitments for 2009 have increased to 2.2 million tons of coal, up from 2 million. The average selling price for 2009 has increased to $73.94 per ton, up from $70.40; for 2010 have increased from 0.7MT to 0.9MT with an increase in the average selling price from
$77.35/t to $81.03/t; and for 2011, tons committed stand at about 0.2MT at $95.00/t.
“The new contract reflects our ongoing commitment to closing new, long-term sales agreements. Part of our plan has always been securing such agreements at a higher price per ton, and this is no exception,” President and CEO Daniel Roling said in a statement.
Deliveries “will have a significant impact on both the Company’s average selling price and its committed tons through 2011,” and will begin during the second quarter. The company has not named the other party or parties to the contract.
With the addition of the new contract, National Coal commitments for 2009 have increased to 2.2 million tons of coal, up from 2 million. The average selling price for 2009 has increased to $73.94 per ton, up from $70.40; for 2010 have increased from 0.7MT to 0.9MT with an increase in the average selling price from
$77.35/t to $81.03/t; and for 2011, tons committed stand at about 0.2MT at $95.00/t.
“The new contract reflects our ongoing commitment to closing new, long-term sales agreements. Part of our plan has always been securing such agreements at a higher price per ton, and this is no exception,” President and CEO Daniel Roling said in a statement.
Ambatovy Partners Looking To Restructure
The owners of the Ambatovy nickel and cobalt mine in Madagascar will likely reach an agreement in the next few weeks on a plan to restructure the project, Sherritt International chairperson and CEO Ian Delaney said on Wednesday.
Sherritt owns 40% and partners Sumitomo and Korea Resources each have stake of 27.5% stake in the mine, which is currently designed to produce 60,000 tonnes a year of nickel and 5,600 tonnes a year of cobalt over 27 years.
However, Delaney indicated that the capital cost of the project was likely to exceed the last estimate of $3.4 billion, and warned that the company would, and could, not finance anything “much in excess” of the approved capital budget.
He said he would not consider tapping into the group's cash reserves to fund cost overruns.
"'I am not going to bet this company's balance sheet on the required metal prices to amortise this project," he said on a conference call with analysts and investors. An updated cost figure would be available once an agreement is reached on restructuring the project.
The Ambatovy project was initially expected to start producing as early as 2010, but Sherritt CEO Jowdat Waheed, who stepped down earlier this week to deal with a family health matter and has been replaced by Delaney, indicated in October that it would likely be delayed.
The company acquired its stake in the large laterite project when it bought Dynatec Corp in 2007.
Nickel prices and rising input costs have had a negative impact on the economics of the project and Sherritt said in November last year that it was looking for ways to renegotiate contracts for construction materials, freight and labour indicating that the partners would also defer some capital spending, and would study changing the construction methods.
Source: Mining Weekly
Sherritt owns 40% and partners Sumitomo and Korea Resources each have stake of 27.5% stake in the mine, which is currently designed to produce 60,000 tonnes a year of nickel and 5,600 tonnes a year of cobalt over 27 years.
However, Delaney indicated that the capital cost of the project was likely to exceed the last estimate of $3.4 billion, and warned that the company would, and could, not finance anything “much in excess” of the approved capital budget.
He said he would not consider tapping into the group's cash reserves to fund cost overruns.
"'I am not going to bet this company's balance sheet on the required metal prices to amortise this project," he said on a conference call with analysts and investors. An updated cost figure would be available once an agreement is reached on restructuring the project.
The Ambatovy project was initially expected to start producing as early as 2010, but Sherritt CEO Jowdat Waheed, who stepped down earlier this week to deal with a family health matter and has been replaced by Delaney, indicated in October that it would likely be delayed.
The company acquired its stake in the large laterite project when it bought Dynatec Corp in 2007.
Nickel prices and rising input costs have had a negative impact on the economics of the project and Sherritt said in November last year that it was looking for ways to renegotiate contracts for construction materials, freight and labour indicating that the partners would also defer some capital spending, and would study changing the construction methods.
Source: Mining Weekly
Closure Threat Lifted At Irish Zinc Mine
The immediate threat of up to 700 job losses at Tara Mines at Navan, Ireland, has been lifted with the acceptance by all sides of a cost-cutting package aimed at preventing the closure of the huge complex, Europe's biggest zinc mine.
However, mine owner Boliden has indicated the continuing operation of the mine depends on the price of zinc and lead and the euro/dollar exchange rate.
New work practices will come into effect on Monday morning next. The Swedish owners have lifted a protective notice served on workers earlier this month.
Three hundred and fifty member's of the trade union, SIPTU, voted by a 60/40 margin last week to accept new terms providing for continuous, four-cycle shift working. The Unite and TEEU unions also voted to accept the deal over the weekend.
Tara’s human resources manager, John Kelly, said this week there was a great air of relief in the mines. “Hopefully, the price of zinc and lead and the exchange rate will hold so we can stay open,” he said.
“At least now we have done what we can do. The negotiations were tough and a lot of hard work went into it on all sides,” he said. “We are delighted with the outcome.”
Management and employees will be meeting this week to discuss the new arrangements.
SIPTU’s Meath branch organiser John Regan said following his union’s ballot: “The tightness of the vote, especially on pay, shows that a lot still needs to be done by the company on how it implements the new terms.”
The deal, which will come into effect on Monday 2nd February, was put forward by facilitator Janet Hughes who had warned that if either side rejected the proposals, there would be an immediate loss of employment at Tara.
Under the new plan, the mine will move from a 5½-day to a continuous seven-day operation on a four-shift cycle, and will operate every day of the year, except 25th and 26th December, with payment for public holidays at the same rate as general rates of pay.
The shift premium paid to workers for operating the new system will be increased from 26 per cent to 29 per cent.
There will be no wage increases this year but all workers at Tara who have to change shift patterns will receive a bonus of €1,400 and there are proposals for workers to receive further bonuses in September 2009, April 2010 and January 2011, if mine production targets have been met.
The owner of the mine says it will invest €56 million in the operation this year, and it plans to recruit 10 additional mine labourers and three additional storemen. A total of eight voluntary redundancy packages will be made available at the end of 2009 and a further eight at the end of 2010 under the terms of the agreement reached.
Source: Meath Chronicle, Ireland
However, mine owner Boliden has indicated the continuing operation of the mine depends on the price of zinc and lead and the euro/dollar exchange rate.
New work practices will come into effect on Monday morning next. The Swedish owners have lifted a protective notice served on workers earlier this month.
Three hundred and fifty member's of the trade union, SIPTU, voted by a 60/40 margin last week to accept new terms providing for continuous, four-cycle shift working. The Unite and TEEU unions also voted to accept the deal over the weekend.
Tara’s human resources manager, John Kelly, said this week there was a great air of relief in the mines. “Hopefully, the price of zinc and lead and the exchange rate will hold so we can stay open,” he said.
“At least now we have done what we can do. The negotiations were tough and a lot of hard work went into it on all sides,” he said. “We are delighted with the outcome.”
Management and employees will be meeting this week to discuss the new arrangements.
SIPTU’s Meath branch organiser John Regan said following his union’s ballot: “The tightness of the vote, especially on pay, shows that a lot still needs to be done by the company on how it implements the new terms.”
The deal, which will come into effect on Monday 2nd February, was put forward by facilitator Janet Hughes who had warned that if either side rejected the proposals, there would be an immediate loss of employment at Tara.
Under the new plan, the mine will move from a 5½-day to a continuous seven-day operation on a four-shift cycle, and will operate every day of the year, except 25th and 26th December, with payment for public holidays at the same rate as general rates of pay.
The shift premium paid to workers for operating the new system will be increased from 26 per cent to 29 per cent.
There will be no wage increases this year but all workers at Tara who have to change shift patterns will receive a bonus of €1,400 and there are proposals for workers to receive further bonuses in September 2009, April 2010 and January 2011, if mine production targets have been met.
The owner of the mine says it will invest €56 million in the operation this year, and it plans to recruit 10 additional mine labourers and three additional storemen. A total of eight voluntary redundancy packages will be made available at the end of 2009 and a further eight at the end of 2010 under the terms of the agreement reached.
Source: Meath Chronicle, Ireland
Sometra To Cut 80 Percent Of Staff
Romanian lead and zinc producer, Sometra Copsa Mica, has announced a temporary and partial shut down of activity, leaving 80% of its 1050 employees without a job.
The decision is being blamed on the current international economic situation which has led to a fall in demand and prices for the two commodities.
It is expected that the company will use take the opportunity to carry out maintenance at the plant.
Company officials have announced that they would offer financial help for those to be dismissed.
Sometra Copsa Mica is part of the Mytilineos group which owns companies in the mining, energy and defence industries. Mytilineos was founded in Greece in 1990 and has over 3000 employees.
Last year, Sometra produced 65,000 tonnes of zinc and 20,000 tonnes of lead.
The decision is being blamed on the current international economic situation which has led to a fall in demand and prices for the two commodities.
It is expected that the company will use take the opportunity to carry out maintenance at the plant.
Company officials have announced that they would offer financial help for those to be dismissed.
Sometra Copsa Mica is part of the Mytilineos group which owns companies in the mining, energy and defence industries. Mytilineos was founded in Greece in 1990 and has over 3000 employees.
Last year, Sometra produced 65,000 tonnes of zinc and 20,000 tonnes of lead.
MMK To Ramp Up Production
Magnitogorsk Metal & Steel Works - MMK- is to increase production by 18.7 percent this month and by as much as 42 percent in February after a revival in demand, Interfax reported on Monday, citing company chairman Viktor Rashnikov.
"Metals traders have run out of their stocks," Rashnikov said at an industry meeting in Chelyabinsk on Saturday.
MMK produced 421,000 tons of steel in December, working at half production capacity as demand faded and metals prices plummeted last year.
The company has been unprofitable for the last three months, Rashnikov said, adding that he expected it would break even in March.
Rashnikov gave details to previously announced cuts to MMK's investment program. "We will decrease the program from the planned 40 billion roubles to 15 billion roubles," he said.
Russia's biggest metals, pipe and machine producers have asked the government to assist debt-ridden state-run companies, Rashnikov said.
"Our main debtors are companies with direct or indirect state participation," Rashnikov said, adding that if Gazprom paid the 10 billion roubles it owed pipe producers, "the whole production chain would be in good order."
The Chelyabinsk meeting also called on the Russian government to guarantee their obligations to banks, freeze tariffs on rail transportation and increase state orders, Interfax reported.
Source: Moscow Times
"Metals traders have run out of their stocks," Rashnikov said at an industry meeting in Chelyabinsk on Saturday.
MMK produced 421,000 tons of steel in December, working at half production capacity as demand faded and metals prices plummeted last year.
The company has been unprofitable for the last three months, Rashnikov said, adding that he expected it would break even in March.
Rashnikov gave details to previously announced cuts to MMK's investment program. "We will decrease the program from the planned 40 billion roubles to 15 billion roubles," he said.
Russia's biggest metals, pipe and machine producers have asked the government to assist debt-ridden state-run companies, Rashnikov said.
"Our main debtors are companies with direct or indirect state participation," Rashnikov said, adding that if Gazprom paid the 10 billion roubles it owed pipe producers, "the whole production chain would be in good order."
The Chelyabinsk meeting also called on the Russian government to guarantee their obligations to banks, freeze tariffs on rail transportation and increase state orders, Interfax reported.
Source: Moscow Times
One-off Charge Pushes Freeport McMoran Into Loss
A one-off charge of $14 billion related to the acquisition of Phelps Dodge, has pushed Freeport-McMoRan Copper & Gold into a fourth-quarter 2008 net loss of $13.9 billion, the company announced on Wednesday
Stripping out those special charges, the company made a profit of about $23 million.
In response to weak market conditions, the company is deferring most of its project development activities, including the $500 million Climax molybdenum mine restart in Colorado and the $450 million El Abra sulphide-deposit development in Chile.
Stripping out those special charges, the company made a profit of about $23 million.
In response to weak market conditions, the company is deferring most of its project development activities, including the $500 million Climax molybdenum mine restart in Colorado and the $450 million El Abra sulphide-deposit development in Chile.
Profits Down 56 Percent At Tata Steel
Tata Steel Ltd the world's sixth-largest steel maker, has reported a 56.4 percent fall in December quarter profits from its Indian operations as volumes dropped.
The company, which earlier in the week shed 3500 jobs at its Corus subsidiary in Europe, said standalone net profits fell to 4.66 billion rupees ($95.5 million) for the fiscal third quarter ended December, down from 10.7 billion reported a year earlier.
Net sales fell to 47.36 billion rupees from 49.28 billion.
Tata Steel mines its own iron ore and buys a third of its coking coal needs; but long-term coking coal prices surged to $300 a ton, while iron-ore prices almost doubled in the year started April 1.
Deepening concerns about the economic slump are lowering demand for steel worldwide and analysts suggest that this is unlikely to improve this quarter with prices showing no signs of improvement.
The company, which earlier in the week shed 3500 jobs at its Corus subsidiary in Europe, said standalone net profits fell to 4.66 billion rupees ($95.5 million) for the fiscal third quarter ended December, down from 10.7 billion reported a year earlier.
Net sales fell to 47.36 billion rupees from 49.28 billion.
Tata Steel mines its own iron ore and buys a third of its coking coal needs; but long-term coking coal prices surged to $300 a ton, while iron-ore prices almost doubled in the year started April 1.
Deepening concerns about the economic slump are lowering demand for steel worldwide and analysts suggest that this is unlikely to improve this quarter with prices showing no signs of improvement.
Vedanta To Carry Silver Prices As Expansion Proceeds
Vedanta Resources group firm Hindustan Zinc has said it will now be listing silver prices on its website each day. The company currently carries zinc and lead prices updated every Thursday and Saturday, and cadmium prices updated every Monday, however silver prices will now be added.
At present HZL produces about 100 tonnes of silver per annum, however expansion at its Sindesar Khurd Mine in Rajasthan and at other mines is expected to raise annual output to around 500 tonnes.
The company's metal production capacity is 754,000 tonnes per annum -- 669,000 tonnes of zinc and 85,000 tonnes of lead. Mining capacity stands at 7.1 million tonnes per annum.
At present HZL produces about 100 tonnes of silver per annum, however expansion at its Sindesar Khurd Mine in Rajasthan and at other mines is expected to raise annual output to around 500 tonnes.
The company's metal production capacity is 754,000 tonnes per annum -- 669,000 tonnes of zinc and 85,000 tonnes of lead. Mining capacity stands at 7.1 million tonnes per annum.
Hargreaves Takes Control Of Coal4Energy
British business support group Hargreaves Services Plc has bought the remaining 50 percent stake in Coal4Energy Ltd from UK Coal Plc for £9 million, the companies said on Wednesday.
Coal4Energy will now be a wholly-owned subsidiary of the group and will relocate to Hargreaves' Yorkshire regional office in Glasshoughton, Castleford. The company is the largest supplier of coal to the UK domestic and industrial markets and Hargreaves said that the purchase will have a significant impact on its second-half profit.
UK Coal said the net profit from the disposal of its half of the Coal4Energy joint venture is estimated to be about £7.0 million and the proceeds will be used to reduce borrowings and fund investment.
Coal4Energy will now be a wholly-owned subsidiary of the group and will relocate to Hargreaves' Yorkshire regional office in Glasshoughton, Castleford. The company is the largest supplier of coal to the UK domestic and industrial markets and Hargreaves said that the purchase will have a significant impact on its second-half profit.
UK Coal said the net profit from the disposal of its half of the Coal4Energy joint venture is estimated to be about £7.0 million and the proceeds will be used to reduce borrowings and fund investment.
Vedanta Takes $100 Million Hit On Metal Price Fall
India's largest copper producer, Vedanta Resources, revealed a 98% slump in its third quarter profits as it took a $104m writedown on inventory as metal prices tumbled.
Earnings before interest, tax, depreciation and amortisation fell to $10.1m for the three months to end December compared to $671.5m the same time a year earlier.
As well as the inventory writedowns, Vedanta said earnings were hit by negative pricing adjustments of $47m and currency losses of around $34m.
In a statement Vedanta said, "Record production volumes of zinc and aluminium and record sales of iron ore were primarily offset by steep falls in commodity prices as well as negative provisional pricing adjustments and writedown of inventories."
Vedanta also has interests in Tanzania and Australia as well as a 51 percent stake in Konkola Copper Mines, Zambia's largest copper miner.
Earnings before interest, tax, depreciation and amortisation fell to $10.1m for the three months to end December compared to $671.5m the same time a year earlier.
As well as the inventory writedowns, Vedanta said earnings were hit by negative pricing adjustments of $47m and currency losses of around $34m.
In a statement Vedanta said, "Record production volumes of zinc and aluminium and record sales of iron ore were primarily offset by steep falls in commodity prices as well as negative provisional pricing adjustments and writedown of inventories."
Vedanta also has interests in Tanzania and Australia as well as a 51 percent stake in Konkola Copper Mines, Zambia's largest copper miner.
CoAL Secures Maputo Rail Deal
Coal of Africa (CoAL) announced on Wednesday that it has agreed a deal with Transnet Freight Rail to transport one million tonnes a year of coal to the Matola dry-bulk terminal in Maputo, Mozambique.
CoAL, which has rights of up to 100 percent of any increased capacity at the Matola Terminal, also said it would provide funding for the proposed expansion to a capacity of 3 million tonnes per annum (Mtpa). The expansion is due to be completed by August 2010.
In addition, a feasibility study for a further 10 Mtpa increase in capacity is now underway.
"Given that the company also has the rights to this additional capacity, CoAL may secure a total of 13 Mtpa export capacity via the Matola Terminal" said CoAL MD Simon Farrell.
This would enable CoAL to deliver significant volumes of coking coal to global and domestic markets, he said.
CoAL, which has rights of up to 100 percent of any increased capacity at the Matola Terminal, also said it would provide funding for the proposed expansion to a capacity of 3 million tonnes per annum (Mtpa). The expansion is due to be completed by August 2010.
In addition, a feasibility study for a further 10 Mtpa increase in capacity is now underway.
"Given that the company also has the rights to this additional capacity, CoAL may secure a total of 13 Mtpa export capacity via the Matola Terminal" said CoAL MD Simon Farrell.
This would enable CoAL to deliver significant volumes of coking coal to global and domestic markets, he said.
Mt Thirsty Could Be Among Top Five Cobalt Producers
Australian miner Barra Resources has announced new study findings for the Mt Thirsty cobalt-nickel project in West Australia, in which it has a 50 percent stake. As a result of the findings the company suggests that Mt Thirsty now has the potential to rank among the top five global cobalt producers.
During the first three years of production Mt Thirsty is expected to deliver 3,700 tonnes of cobalt, 10,300 tonnes of nickel and 27,000 tonnes of manganese per annum.
Atmospheric leach extractions of 99% cobalt, 78% nickel and 98% manganese were achieved during recent metallurgical test-work.
During the first three years of production Mt Thirsty is expected to deliver 3,700 tonnes of cobalt, 10,300 tonnes of nickel and 27,000 tonnes of manganese per annum.
Atmospheric leach extractions of 99% cobalt, 78% nickel and 98% manganese were achieved during recent metallurgical test-work.
Evraz To Appeal Against Coal Monopoly Decision Next Week
Reports from Russia suggest that the Evraz Group is challenging a decision by the Russian Federal Antimonopoly Service to fine a number of its coal mining units and force them to lower coking coal prices.
Evraz will appeal the ruling at the Moscow Arbitration Court on February 6th.
Russian Prime Minister Mr Vladimir Putin and the Deputy Prime Minister, Mr Igor Sechin, ordered the FAS to analyse the market for coking coal concentrates. The FAS opened cases against major coking coal producers Mechel, Evraz, Raspadsky Ugol and Sibuglemet for breaking anti-monopoly law, fining the first three companies RUB 789 million (US$23.9 million), RUB 149 million (US$4.5 million) and RUB 117 million (US$3.5 million) respectively.
The companies have paid the fines, lowered their coking coal prices and signed long term coal supply agreements with their main customers.
Evraz will appeal the ruling at the Moscow Arbitration Court on February 6th.
Russian Prime Minister Mr Vladimir Putin and the Deputy Prime Minister, Mr Igor Sechin, ordered the FAS to analyse the market for coking coal concentrates. The FAS opened cases against major coking coal producers Mechel, Evraz, Raspadsky Ugol and Sibuglemet for breaking anti-monopoly law, fining the first three companies RUB 789 million (US$23.9 million), RUB 149 million (US$4.5 million) and RUB 117 million (US$3.5 million) respectively.
The companies have paid the fines, lowered their coking coal prices and signed long term coal supply agreements with their main customers.
Tuesday, January 27, 2009
Grupo Mexico To Take Hit On Copper Price Plunge
Mexico's largest mining company, Grupo Mexico SAB, looks set to reduce the value of its booked copper sales in the fourth quarter after a plunge in copper prices.
The company records sales under a method known as provisional pricing, where sales on copper concentrate are booked at the time of shipment but are altered to reflect market prices when payment is received. Copper prices have fallen by almost two-thirds since hitting a high of $4.2605/lb.
“There will be an impact and it will be considerable,” said Juan Rebolledo, a spokesman for Grupo Mexico said.
However, Mr Rebolledo also said that the adjustment may be offset by hedges and exchange-rate fluctuations, Rebolledo said. The company is set to report fourth-quarter earnings on 30 January.
Rodrigo Heredia, an analyst with Ixe Casa de Bolsa SA, estimates the pricing adjustment could cause net income to fall 62 percent to $80 million in the quarter. with the price of recorded sales of copper and molybdenum cut by $231 million. The adjustments are limited to the fourth quarter and are unlikely to be repeated, he said.
The company records sales under a method known as provisional pricing, where sales on copper concentrate are booked at the time of shipment but are altered to reflect market prices when payment is received. Copper prices have fallen by almost two-thirds since hitting a high of $4.2605/lb.
“There will be an impact and it will be considerable,” said Juan Rebolledo, a spokesman for Grupo Mexico said.
However, Mr Rebolledo also said that the adjustment may be offset by hedges and exchange-rate fluctuations, Rebolledo said. The company is set to report fourth-quarter earnings on 30 January.
Rodrigo Heredia, an analyst with Ixe Casa de Bolsa SA, estimates the pricing adjustment could cause net income to fall 62 percent to $80 million in the quarter. with the price of recorded sales of copper and molybdenum cut by $231 million. The adjustments are limited to the fourth quarter and are unlikely to be repeated, he said.
Japanese Steelmakers To Press For Steep Coal, Iron Ore Price Cuts
Reports from Japan suggest that the country's large Japanese steelmakers will press for cuts of 40 percent in iron ore prices and 60 to 70 percent in coal prices for the 2009 fiscal year due to the falling costs of natural resources according to the Nikkei business daily. This would put prices at their 2007 levels.
Steel companies will be looking for prices of about $50 per ton for iron ore and $100 per ton for coal.
The paper said the steelmakers could make their requests as early as next week to iron ore suppliers Companhia Vale do Rio Doce of Brazil, BHP Billiton and Rio Tinto and will also negotiate coal prices with the latter two companies.
Source: Nikkei Business Daily
Steel companies will be looking for prices of about $50 per ton for iron ore and $100 per ton for coal.
The paper said the steelmakers could make their requests as early as next week to iron ore suppliers Companhia Vale do Rio Doce of Brazil, BHP Billiton and Rio Tinto and will also negotiate coal prices with the latter two companies.
Source: Nikkei Business Daily
Brockman Feasibility To Be Completed In June
Australian iron-ore miner Brockman Resources has reported that the Stage 2 pre-feasibilty study at its Marillana iron-ore project in Western Australia, will be completed by June this year.
Stage 2 was expected to increase the project’s estimated iron-ore output from two-million tons a year, to between 15-million tons and 25-million tons a year.
The company has contracted Ausenco to conduct the prefeasiblity study in conjunction with Coffey Mining. Work started in December.
Meanwhile, the company, in its quarterly report, says uncommitted cash reserves now stand at $102million.
Stage 2 was expected to increase the project’s estimated iron-ore output from two-million tons a year, to between 15-million tons and 25-million tons a year.
The company has contracted Ausenco to conduct the prefeasiblity study in conjunction with Coffey Mining. Work started in December.
Meanwhile, the company, in its quarterly report, says uncommitted cash reserves now stand at $102million.
Eagle Eye Returns To Gold Prospecting
Eagle Eye Metals, a diversified explorer listed on the Australian bourse, has stated that it had not shifted its exploration and development policies, despite the world’s financial crisis.
However the company, prospecting in Western Australia, would continue to research and assess its projects before implementing expensive exploration work.
“The widely publicised financial crisis gripping the world’s economies has only acted to reinforce the importance of Eagle Eye’s long standing exploration strategy of ensuring that any exploration activity funded by the company is undertaken in the most cost-effective manner possible. This strategy has seen Eagle Eye maintain a sound financial position, while advancing its most prospective projects,” the company said.
In its quarterly report, for the period ending December, Eagle Eye stated that total cash expenditure for the quarter had been kept down to A$140,000, saving an estimated A$50,000 a month. These savings were partly due to the company’s Waite Kauri nickel and cobalt project which is now in a joint venture with nickel producer Poseidon Nickel.
Eagle Eye was initially intended as a primarily gold search float, however the search was shifted to nickel and cobalt owing to an increase in world demand and price for these products.
But the company is returning its focus to gold prospects and said that it was working on exploration and drilling programmes for implementation on its Western Australian gold exploration projects.
“The financial crisis has also placed Eagle Eye in a good position for 2009, from an exploration perspective. While the gold price continues to maintain its high level, owing in large part to the world embracing gold as a safe haven, the cost of most exploration activities has fallen considerably. Therefore, at no time in the recent past has gold exploration been on a more attractive cost basis,” Eagle Eye noted.
In keeping with this, Eagle Eye undertook a review of into the gold prospectivity of all its projects, including preparation of cost, and budgets required to advance the project offering the highest potential of hosting economic gold mineralisation.
The results of the review confirmed the attractiveness of the Apollo Hill, Erlistoun, and Little Doris gold projects. These targets would form the basis of the initial exploration for 2009, that would include target drilling campaigns.
Source: Mining Weekly
However the company, prospecting in Western Australia, would continue to research and assess its projects before implementing expensive exploration work.
“The widely publicised financial crisis gripping the world’s economies has only acted to reinforce the importance of Eagle Eye’s long standing exploration strategy of ensuring that any exploration activity funded by the company is undertaken in the most cost-effective manner possible. This strategy has seen Eagle Eye maintain a sound financial position, while advancing its most prospective projects,” the company said.
In its quarterly report, for the period ending December, Eagle Eye stated that total cash expenditure for the quarter had been kept down to A$140,000, saving an estimated A$50,000 a month. These savings were partly due to the company’s Waite Kauri nickel and cobalt project which is now in a joint venture with nickel producer Poseidon Nickel.
Eagle Eye was initially intended as a primarily gold search float, however the search was shifted to nickel and cobalt owing to an increase in world demand and price for these products.
But the company is returning its focus to gold prospects and said that it was working on exploration and drilling programmes for implementation on its Western Australian gold exploration projects.
“The financial crisis has also placed Eagle Eye in a good position for 2009, from an exploration perspective. While the gold price continues to maintain its high level, owing in large part to the world embracing gold as a safe haven, the cost of most exploration activities has fallen considerably. Therefore, at no time in the recent past has gold exploration been on a more attractive cost basis,” Eagle Eye noted.
In keeping with this, Eagle Eye undertook a review of into the gold prospectivity of all its projects, including preparation of cost, and budgets required to advance the project offering the highest potential of hosting economic gold mineralisation.
The results of the review confirmed the attractiveness of the Apollo Hill, Erlistoun, and Little Doris gold projects. These targets would form the basis of the initial exploration for 2009, that would include target drilling campaigns.
Source: Mining Weekly
PGM Production Down At Crocodile River
Eastern Platinum confirmed yesterday (26th January) that production of platinum group metals (PGM) at its Crocodile River Mine in South Africa's North West Province decreased by around six per cent in the fourth quarter of 2008.
Statistics released by the company show that a total of 298,514 tonnes were processed for an output of 29,015 oz, compared to figures of 317,602 tonnes and 30,755 oz for the previous quarter.
The decline is being attributed to the fact that the number of milling and hoisting shifts between Q3 and Q4 fell by 12 per cent, mainly as a result of the statutory worker holiday period.
In addition, Eastern revealed that development meters were down by 18 per cent on a quarterly basis after the reduction in shifts and the planned cut in reserve development, which commenced in late November.
The latter includes suspending operations temporarily at the Crocette mine as the company looks to slash its costs and preserve cash against a backdrop of falling prices in PGM markets.
Eastern Platinum, which is based in Canada, was founded in 2003 and became South Africa's country's largest PGM producer in 2006.
Full report
Statistics released by the company show that a total of 298,514 tonnes were processed for an output of 29,015 oz, compared to figures of 317,602 tonnes and 30,755 oz for the previous quarter.
The decline is being attributed to the fact that the number of milling and hoisting shifts between Q3 and Q4 fell by 12 per cent, mainly as a result of the statutory worker holiday period.
In addition, Eastern revealed that development meters were down by 18 per cent on a quarterly basis after the reduction in shifts and the planned cut in reserve development, which commenced in late November.
The latter includes suspending operations temporarily at the Crocette mine as the company looks to slash its costs and preserve cash against a backdrop of falling prices in PGM markets.
Eastern Platinum, which is based in Canada, was founded in 2003 and became South Africa's country's largest PGM producer in 2006.
Full report
Significant Uranium Find At Namibian Prospect
Uranium miner Kalahari Minerals Plc said on Tuesday that the Australia-based uranium explorer Extract Resources, in which Kalahari subsidiary Kalahari Uranium holds a 39.50 percent stake, had discovered significant uranium deposits at its Namibian prospect.
Kalahari Minerals said that the 108 million pounds of uranium oxide, at a grade of 430 parts per million confirms Rossing South as the highest grade uranium deposit in Namibia.
It gives the uranium explorer, Extract, a total resource estimate of 133.1 million pounds, Kalahari Minerals said.
Kalahari chairman Mark Hohnen said the deposit has become the highest grade granite-hosted uranium deposit in Namibia, and that future upgrades to the estimate could propel it into the top 10 global uranium deposits.
Hohnen said that with the location of Rossing South deposit, which is adjacent to Rio Tinto's Rossing Mine, Paladin Resources' Langer Heinrich Mine and Toronto-listed Forsys Metals Corp, the Rossing South deposit could be developed into a highly profitable project.
Kalahari Minerals said that the 108 million pounds of uranium oxide, at a grade of 430 parts per million confirms Rossing South as the highest grade uranium deposit in Namibia.
It gives the uranium explorer, Extract, a total resource estimate of 133.1 million pounds, Kalahari Minerals said.
Kalahari chairman Mark Hohnen said the deposit has become the highest grade granite-hosted uranium deposit in Namibia, and that future upgrades to the estimate could propel it into the top 10 global uranium deposits.
Hohnen said that with the location of Rossing South deposit, which is adjacent to Rio Tinto's Rossing Mine, Paladin Resources' Langer Heinrich Mine and Toronto-listed Forsys Metals Corp, the Rossing South deposit could be developed into a highly profitable project.
Q4 Profits Up Sharply At Peabody Energy
Fourth-quarter profits at US-based coal miner, Peabody Energy, grew more than eight times, largely due to increased revenues from its Australian operations. Net income for the quarter was $293.3 million, compared with $35.8 million the previous year.
Full-year 2008 revenues grew 45 percent to a record $6.59 billion on 256 million tons. Higher revenues reflect increased volumes and improved prices throughout the United States and Australia. Revenues per ton in the United States grew 15 percent, and Australian revenues per ton rose 76 percent, reflecting the higher-priced metallurgical and thermal coal associated with annual contracts that commenced April 1, 2008.
The company has reported record full-year 2008 EBITDA from continuing operations of $1.85 billion, nearly doubling prior-year levels. 2008 earnings from continuing operations totalled $3.63 per share on income of $984.8 million, significantly exceeding comparable 2007 levels of $1.63 per share and $440.0 million, respectively. The company also set a new mark for revenues of $6.59 billion on coal sales of 256 million tons.
"Peabody delivered record financial results, driven by a series of strategic actions taken in recent years to expand access to high-margin global markets and increase the productivity and reliability of the operating base," said Peabody Chairman and Chief Executive Officer Gregory H. Boyce. "We have performed very well and are in an excellent position to unlock the full benefits of our global platform when world economies rebound and high growth in energy demand resumes. Amid challenging near-term markets, we enter 2009 with a sound financial position and will pursue opportunities to further strengthen the portfolio."
Full-year EBITDA totalled $1.85 billion compared with $968.6 million in 2007. Contributions from U.S. operations increased 8 percent to $858.6 million on improved pricing and volume. Full-year Australian EBITDA was $1,017.0 million, more than six times higher than the prior year's $166.1 million on a combination of increased volumes related to new and expanded mines and higher prices. Trading and Brokerage and Resource Management activities added $274.3 million of EBITDA.
Operating cash flows totaled $1.41 billion, significantly exceeding prior- year levels. Income from continuing operations of $984.8 million more than doubled year-ago levels, with earnings per share of $3.63. Full-year net income totaled $953.5 million.
"Our results demonstrate the capability of our operating platform to deliver substantial cash flows," said Executive Vice President and Chief Financial Officer Michael C. Crews. "We are positioned to weather the global economic downturn with nearly $2 billion of available liquidity from our cash balances and lines of credit."
"We are seeing a sharp global supply response to temporarily reduced demand, through voluntary coal supply and capital spending reductions," said Peabody President and Chief Commercial Officer Richard A. Navarre. "Peabody has trimmed production targets in both the United States and Australia and now enters 2009 with a highly committed book of business. We believe the ultimate recovery could be strong, as global economic and electricity generation growth resumes, at the same time that geologic and regulatory hurdles and lack of available capital limit a supply response."
Global coal demand increased 2.0 percent in 2008 to meet growth in electricity demand, primarily in emerging economies. 2009 coal demand will be impacted by the global pullback in steel production and moderate softness in global electricity generation, offset by growth from new generation and increased market share for coal. In response to current economic conditions, global coal production cuts have been accelerating, with more than 70 million tons of known thermal and metallurgical production reductions already announced.
Full report
Full-year 2008 revenues grew 45 percent to a record $6.59 billion on 256 million tons. Higher revenues reflect increased volumes and improved prices throughout the United States and Australia. Revenues per ton in the United States grew 15 percent, and Australian revenues per ton rose 76 percent, reflecting the higher-priced metallurgical and thermal coal associated with annual contracts that commenced April 1, 2008.
The company has reported record full-year 2008 EBITDA from continuing operations of $1.85 billion, nearly doubling prior-year levels. 2008 earnings from continuing operations totalled $3.63 per share on income of $984.8 million, significantly exceeding comparable 2007 levels of $1.63 per share and $440.0 million, respectively. The company also set a new mark for revenues of $6.59 billion on coal sales of 256 million tons.
"Peabody delivered record financial results, driven by a series of strategic actions taken in recent years to expand access to high-margin global markets and increase the productivity and reliability of the operating base," said Peabody Chairman and Chief Executive Officer Gregory H. Boyce. "We have performed very well and are in an excellent position to unlock the full benefits of our global platform when world economies rebound and high growth in energy demand resumes. Amid challenging near-term markets, we enter 2009 with a sound financial position and will pursue opportunities to further strengthen the portfolio."
Full-year EBITDA totalled $1.85 billion compared with $968.6 million in 2007. Contributions from U.S. operations increased 8 percent to $858.6 million on improved pricing and volume. Full-year Australian EBITDA was $1,017.0 million, more than six times higher than the prior year's $166.1 million on a combination of increased volumes related to new and expanded mines and higher prices. Trading and Brokerage and Resource Management activities added $274.3 million of EBITDA.
Operating cash flows totaled $1.41 billion, significantly exceeding prior- year levels. Income from continuing operations of $984.8 million more than doubled year-ago levels, with earnings per share of $3.63. Full-year net income totaled $953.5 million.
"Our results demonstrate the capability of our operating platform to deliver substantial cash flows," said Executive Vice President and Chief Financial Officer Michael C. Crews. "We are positioned to weather the global economic downturn with nearly $2 billion of available liquidity from our cash balances and lines of credit."
"We are seeing a sharp global supply response to temporarily reduced demand, through voluntary coal supply and capital spending reductions," said Peabody President and Chief Commercial Officer Richard A. Navarre. "Peabody has trimmed production targets in both the United States and Australia and now enters 2009 with a highly committed book of business. We believe the ultimate recovery could be strong, as global economic and electricity generation growth resumes, at the same time that geologic and regulatory hurdles and lack of available capital limit a supply response."
Global coal demand increased 2.0 percent in 2008 to meet growth in electricity demand, primarily in emerging economies. 2009 coal demand will be impacted by the global pullback in steel production and moderate softness in global electricity generation, offset by growth from new generation and increased market share for coal. In response to current economic conditions, global coal production cuts have been accelerating, with more than 70 million tons of known thermal and metallurgical production reductions already announced.
Full report
Production Up At Caledon's Cook Mine
Caledon Resources has reported a 67 percent year-on-year rise in raw coal production in the fourth quarter at its Cook mine in the Bowen Basin, Queensland. This translates to a 115 percent rise for the full-year to end-December, to 159,000 tonnes and 548,000 tonnes, respectively.
Coking coal production rose by 58 percent year-on-year to 106,000 tonnes, while the figure for the year rose by 122 percent to 378,000 tonnes.
Thermal coal production rose by 36 percent year-on-year to 17,000 tonnes for the quarter and 66,000 tonnes for the year - a rise of 103 percent.
Coal sales for the quarter also showed healthy year-on-year gains. Coking coal sales were up by 72 percent to 105,000 tonnes and thermal coal sales rose by 142 percent to 36,000 tonnes. Figures for the year were 397,000 tonnes for coking coal - a rise of 166 percent - and 66,000 tonnes for thermal coal - a rise of 248 percent.
Total coal stocks fell slightly, to 36,000 tonnes at the end of December, down from 41,000 tonnes at the end of September and compared to 40,000 tonnes at the end of December 2007.
Caledon acquired the mothballed Cook Mine in late 2006 and has since recommissioned the operation. The company also purchased the nearby Minyango exploration concessions in 2006 and has conducted a number of drilling programs in preparation for a feasibility study.
Exploration activity on the Minyango tenements during the quarter included drilling, analysis and pre-feasibility studies with costs incurred amounting to $217,000.
Coking coal production rose by 58 percent year-on-year to 106,000 tonnes, while the figure for the year rose by 122 percent to 378,000 tonnes.
Thermal coal production rose by 36 percent year-on-year to 17,000 tonnes for the quarter and 66,000 tonnes for the year - a rise of 103 percent.
Coal sales for the quarter also showed healthy year-on-year gains. Coking coal sales were up by 72 percent to 105,000 tonnes and thermal coal sales rose by 142 percent to 36,000 tonnes. Figures for the year were 397,000 tonnes for coking coal - a rise of 166 percent - and 66,000 tonnes for thermal coal - a rise of 248 percent.
Total coal stocks fell slightly, to 36,000 tonnes at the end of December, down from 41,000 tonnes at the end of September and compared to 40,000 tonnes at the end of December 2007.
Caledon acquired the mothballed Cook Mine in late 2006 and has since recommissioned the operation. The company also purchased the nearby Minyango exploration concessions in 2006 and has conducted a number of drilling programs in preparation for a feasibility study.
Exploration activity on the Minyango tenements during the quarter included drilling, analysis and pre-feasibility studies with costs incurred amounting to $217,000.
Coking And Thermal Coal Markets Taking Different Paths
Latest sales figures from Macarthur Coal and Centennial Coal point to a divergence between the markets for coking coal and thermal coal.
Demand for thermal coal - produced by Centennial - has held up much more strongly than that for coking coal - Macarthur's main product.
Centennial reported even stronger export sales in the December quarter than for the September quarter, seemingly bucking the trend. The miner has been trying to increase its proportion of export sales, which attract higher prices than domestic sales, even if the export price halves to about $US75 a tonne, as many analysts expect.
In total, Centennial sold 3.9 million tonnes in the December quarter. Of that, 1.1 million tonnes were exports.
Analysts suggest said thermal coal is a much safer bet in the present market.
Centennial did report a big fall in the price of semi-soft coking coal and will close its Newstan mine earlier than expected while slow-working its Awaba East project.
Last year many thermal coal producers maximised semi-soft coal production to take advantage of a big price difference between the products. Falling demand for semi-soft coal and PCI coal in recent weeks has led to those products being placed in the thermal coal market, which has lowered the spot price of thermal coal.
Macarthur Coal, which produces mostly PCI, said 22 per cent of its sales in the December quarter had been of thermal coal because of lower demand for PCI.
Last month the Queensland miner lowered its annual sales forecast to 3.9 million tonnes from 5 million tonnes.
"The sales mix will also change as thermal coal sales increase and low-volatile PCI coal sales reduce," the miner said.
Macarthur maintained its profit forecast of $75 million to $125 million, including up to $48 million for negative hedge accounting adjustments.
It said lower shipments would continue this quarter, and noted demand from the Atlantic region - home to its largest customer, ArcelorMittal - had been hit harder than other regions due to a 30 per cent cut in steel output.
Source: Sydney Morning Herald
Demand for thermal coal - produced by Centennial - has held up much more strongly than that for coking coal - Macarthur's main product.
Centennial reported even stronger export sales in the December quarter than for the September quarter, seemingly bucking the trend. The miner has been trying to increase its proportion of export sales, which attract higher prices than domestic sales, even if the export price halves to about $US75 a tonne, as many analysts expect.
In total, Centennial sold 3.9 million tonnes in the December quarter. Of that, 1.1 million tonnes were exports.
Analysts suggest said thermal coal is a much safer bet in the present market.
Centennial did report a big fall in the price of semi-soft coking coal and will close its Newstan mine earlier than expected while slow-working its Awaba East project.
Last year many thermal coal producers maximised semi-soft coal production to take advantage of a big price difference between the products. Falling demand for semi-soft coal and PCI coal in recent weeks has led to those products being placed in the thermal coal market, which has lowered the spot price of thermal coal.
Macarthur Coal, which produces mostly PCI, said 22 per cent of its sales in the December quarter had been of thermal coal because of lower demand for PCI.
Last month the Queensland miner lowered its annual sales forecast to 3.9 million tonnes from 5 million tonnes.
"The sales mix will also change as thermal coal sales increase and low-volatile PCI coal sales reduce," the miner said.
Macarthur maintained its profit forecast of $75 million to $125 million, including up to $48 million for negative hedge accounting adjustments.
It said lower shipments would continue this quarter, and noted demand from the Atlantic region - home to its largest customer, ArcelorMittal - had been hit harder than other regions due to a 30 per cent cut in steel output.
Source: Sydney Morning Herald
SAIL Hit By Higher Coking Coal Prices
Steel Authority of India's (SAIL) Q3 standalone net profit came in at Rs 843.34 crore (Rs8.433 billion) compared with Rs 1934.66 crore (Rs19.347 billion) in the same quarter last financial year. Standalone net sales were up at Rs 8856 crore (Rs88.56 billion) against Rs 9533.30 crore (Rs95.33 billion) year-on-year.
Commenting on the company's results S K Roongta, CMD, SAIL, said its Q3 profit after tax (PAT) was impacted due to high coking coal prices. Q3 sales volume were lower by 20%. Mr Roongta said the product mix has improved and 40% of total production is now in value added products.
Here are excerpts of SK Roongta's comments at the company's press conference.
"Our profit before tax (PBT) for Q3 has been Rs 1,257 crores and profit after tax (PAT) at Rs 843 crore while we have maintained making profits but certainly there is decline in both PBT and PAT.
PAT declined by 56% year on year (YoY) and by 58% if compared with Q2. This has to be seen in context that there was significant downturn in the steel sector within India as well as globally. There is more than 24% decline in the global steel production in the month of December and there has been negative growth for the calendar year 2008 as a whole of 1.2% as compared to 2007.
The biggest factor that impacted our bottomline is very high cost of our inputs especially imported coking coal as well as domestic coking coal. We had to absorb the higher coking coal prices. Last year at this time the coking coal prices were ruling at USD 96, while in the current year the prices went upto USD 300.
Added to that there was adverse exchange variation; Rupee depreciated vis-�-vis dollar which further pushed up the cost of coking coal and this impact has been very severe. There was also downturn in sales. October was a month when virtually sales came to a standstill with most of the steel companies although it picked up in November-December but our overall sales in physical terms has been 20% less in Q3 as compared to Q3 of last year although in value terms negative growth is only 7.5% which also impacted our margins.
We took several internal actions to cushion the adverse impact of high input costs as well as fall in sales- especially with improvement in product mix we increased our share of finished steel in our production. We went for more value added products and now more than 40% of our total production is in value added products. The cumulative impact of these two factors alone gave us about Rs 400 cr additionally. We improved our domestic coal utilization and we changed our blend, reducing the imported component which is much costlier and we have also been able to reduce our energy consumption in the current year by about 4%.
So, while we could ward off some of the adverse effects of high input costs but the cost pressures were so high that the entire impact could not be neutralized.
We have been able to contain our employee cost in the Q3 of this year to the same level as was in Q3 of last year, this is a significant achievement. This has also helped in cushioning of the adverse impact of higher input costs."
Commenting on the company's results S K Roongta, CMD, SAIL, said its Q3 profit after tax (PAT) was impacted due to high coking coal prices. Q3 sales volume were lower by 20%. Mr Roongta said the product mix has improved and 40% of total production is now in value added products.
Here are excerpts of SK Roongta's comments at the company's press conference.
"Our profit before tax (PBT) for Q3 has been Rs 1,257 crores and profit after tax (PAT) at Rs 843 crore while we have maintained making profits but certainly there is decline in both PBT and PAT.
PAT declined by 56% year on year (YoY) and by 58% if compared with Q2. This has to be seen in context that there was significant downturn in the steel sector within India as well as globally. There is more than 24% decline in the global steel production in the month of December and there has been negative growth for the calendar year 2008 as a whole of 1.2% as compared to 2007.
The biggest factor that impacted our bottomline is very high cost of our inputs especially imported coking coal as well as domestic coking coal. We had to absorb the higher coking coal prices. Last year at this time the coking coal prices were ruling at USD 96, while in the current year the prices went upto USD 300.
Added to that there was adverse exchange variation; Rupee depreciated vis-�-vis dollar which further pushed up the cost of coking coal and this impact has been very severe. There was also downturn in sales. October was a month when virtually sales came to a standstill with most of the steel companies although it picked up in November-December but our overall sales in physical terms has been 20% less in Q3 as compared to Q3 of last year although in value terms negative growth is only 7.5% which also impacted our margins.
We took several internal actions to cushion the adverse impact of high input costs as well as fall in sales- especially with improvement in product mix we increased our share of finished steel in our production. We went for more value added products and now more than 40% of our total production is in value added products. The cumulative impact of these two factors alone gave us about Rs 400 cr additionally. We improved our domestic coal utilization and we changed our blend, reducing the imported component which is much costlier and we have also been able to reduce our energy consumption in the current year by about 4%.
So, while we could ward off some of the adverse effects of high input costs but the cost pressures were so high that the entire impact could not be neutralized.
We have been able to contain our employee cost in the Q3 of this year to the same level as was in Q3 of last year, this is a significant achievement. This has also helped in cushioning of the adverse impact of higher input costs."
Gold Hits 900 Dollars An Ounce
The price of gold rose to 906 dollars in London on Monday, the highest level for three and a half months, on buying by specialist funds amid fresh concerns about the global economic outlook.
The price reached 906 dollars in mid-morning trading, the highest quote since October 10, having risen above 900 dollars on Friday for the first time in three months. The price has risen strongly since January 15.
John Reade, an analyst at UBS bank, said that buying had been driven mainly by defensive investment in physical gold or through specialist so-called exchange-traded funds.
Last week, a wave of bad economic indicators and a new round of problems in the banking sector, particuarly in Britain, raised general concern about economic conditions, causing some investors to put money into gold, seen as a protection of value in troubled times.
Source: Economic Times
The price reached 906 dollars in mid-morning trading, the highest quote since October 10, having risen above 900 dollars on Friday for the first time in three months. The price has risen strongly since January 15.
John Reade, an analyst at UBS bank, said that buying had been driven mainly by defensive investment in physical gold or through specialist so-called exchange-traded funds.
Last week, a wave of bad economic indicators and a new round of problems in the banking sector, particuarly in Britain, raised general concern about economic conditions, causing some investors to put money into gold, seen as a protection of value in troubled times.
Source: Economic Times
Indian Forgers Dismayed At Steel Duty Increase Proposal
The Association of Indian Forging Industry (AIFI) has expressed dismay at the recent appeal by Indian steel companies to increase the import duty on steel from 5 per cent to 15 per cent. “This helps them claim as usual that Indian steel prices are lower than the international market. If domestic steel prices are reasonable, why would anyone import the same? We have consistently said that domestic steel prices should be equivalent to ex-factory prices in China,” AIFI president Vidhyashankar Krishnan said in a statement.
AIFI has urged the government not to increase the import duty as it would lead to spiralling price rises. An increase in steel prices would render Indian auto component manufacturers uncompetitive, AIFI said.
“As it is, steel prices in India are higher than ex-factory prices internationally. This will lead to more job losses in the industry which is already reeling under falling demand,” Krishnan said, adding, “The steel industry has always claimed that prices in India are lower than international prices, when it is not so. Ex-factory prices in India have always been higher than ex-factory prices in most international markets. In addition, prices in India rose well before prices of steel in the international markets went up.”
AIFI said that the user industry, in particular, the forging industry, has struggled to keep pace with regular price increases. At each point of price increase, steel suppliers have stopped supplying steel even against purchase orders previously accepted by them, Krishnan alleged.
“Steel mills would not even supply steel against purchase orders accepted by them for deliveries well before the date of price increase, citing market conditions,” he said, demanding that steel prices be reduced to international levels or even lower so that Indian auto component manufacturers can regain export competitiveness.
The forging industry body said that in early 2008, when steel prices were on the rise, the industry had mooted a proposal to the Centre to bring in a regulatory mechanism to check price increases.
But this proposal was set aside on the plea that it was not in line with open market economy policies, AIFI members said.
Source: Business Standard
AIFI has urged the government not to increase the import duty as it would lead to spiralling price rises. An increase in steel prices would render Indian auto component manufacturers uncompetitive, AIFI said.
“As it is, steel prices in India are higher than ex-factory prices internationally. This will lead to more job losses in the industry which is already reeling under falling demand,” Krishnan said, adding, “The steel industry has always claimed that prices in India are lower than international prices, when it is not so. Ex-factory prices in India have always been higher than ex-factory prices in most international markets. In addition, prices in India rose well before prices of steel in the international markets went up.”
AIFI said that the user industry, in particular, the forging industry, has struggled to keep pace with regular price increases. At each point of price increase, steel suppliers have stopped supplying steel even against purchase orders previously accepted by them, Krishnan alleged.
“Steel mills would not even supply steel against purchase orders accepted by them for deliveries well before the date of price increase, citing market conditions,” he said, demanding that steel prices be reduced to international levels or even lower so that Indian auto component manufacturers can regain export competitiveness.
The forging industry body said that in early 2008, when steel prices were on the rise, the industry had mooted a proposal to the Centre to bring in a regulatory mechanism to check price increases.
But this proposal was set aside on the plea that it was not in line with open market economy policies, AIFI members said.
Source: Business Standard
Coal Companies Urged To Quicken Imports
There were warnings today that India's power generation industry may be hit if companies do not import coal expeditiously.
The warning came from the country's Minister of State for Coal, Mr Santosh Bagrodia, who suggested that blame for any power shortages "must be on the power ministry and the power companies for not co-operating and not importing coal.”
Mr Bagrodia remakrs came at a gathering of stakeholders in the coal industry. He said no power company has approached Coal India Ltd on its offer to import 4 million tonnes of coal in the current financial year. Mr Bagrodia added that the Ministry has started issuing de-allocation notices to firms that have not commenced production according to the timeline. “Out of 200 blocks allocated in last 10-12 years, hardly 20-22 have commenced production,” Mr Bagrodia said in the meeting.
The Coal Ministry has already issued show-cause notices to public and private sector companies such as Monnet Ispat, Adhunik Group, Haryana Power Corporation and NCT Delhi for de-allocation of captive coal blocks.
Mr Bagrodia also said that in the new round of allocations, those companies that have met their deadlines are likely to be “given preference”. Not ruling out the possibility of de-allocating the coal blocks of NTPC, Mr Bagrodia said “the judgment has to be done irrespective of public or private sector companies”.
NTPC has been allocated six captive blocks since 2004 with estimated reserves of about 4 billion tonnes, which it says is in the process of developing.
Source: The Hindu
The warning came from the country's Minister of State for Coal, Mr Santosh Bagrodia, who suggested that blame for any power shortages "must be on the power ministry and the power companies for not co-operating and not importing coal.”
Mr Bagrodia remakrs came at a gathering of stakeholders in the coal industry. He said no power company has approached Coal India Ltd on its offer to import 4 million tonnes of coal in the current financial year. Mr Bagrodia added that the Ministry has started issuing de-allocation notices to firms that have not commenced production according to the timeline. “Out of 200 blocks allocated in last 10-12 years, hardly 20-22 have commenced production,” Mr Bagrodia said in the meeting.
The Coal Ministry has already issued show-cause notices to public and private sector companies such as Monnet Ispat, Adhunik Group, Haryana Power Corporation and NCT Delhi for de-allocation of captive coal blocks.
Mr Bagrodia also said that in the new round of allocations, those companies that have met their deadlines are likely to be “given preference”. Not ruling out the possibility of de-allocating the coal blocks of NTPC, Mr Bagrodia said “the judgment has to be done irrespective of public or private sector companies”.
NTPC has been allocated six captive blocks since 2004 with estimated reserves of about 4 billion tonnes, which it says is in the process of developing.
Source: The Hindu
Activists Pour Scorn On Iron Ore Report Claims
That there is no area in the Kavuthi Malai and Vendiappan Malai of Tiruvannamalai that is ‘ecologically fragile’ and that iron ore does not contain any toxic element are just two of the claims of the Tamil Nadu Iron Ore Mining Corporation that are being pooh-poohed by environmentalists and forest officials.
The claim has been made in the executive summary of the Rapid Environment Impact Assessment (REIA) report and the Environment Management Plan submitted with the application seeking approval for iron ore mining in the reserved forest of Kavuthi Malai and Vediappan Malai.
Mark Cherniak, a scientist with Environment Law Alliance World Wide (E-Law), US, says: ‘The area of the project is a forested area and forests are among the most threatened and vulnerable ecological assets around the world.
Supporting his view, local forest officials, too, say that it is ironical to classify the two hills as not ecologically fragile. Forest officials had explained to the Central Empowerment Committee that visited the area before forest clearance was given for the project that mining operations would disturb the entire ecosystem of the district.
‘If lakhs of trees are felled it will lead to soil erosion, affect the ground water storage and disturb the wildlife. The forest is home for endangered species like monitor lizard, pangolin and more than 60 varieties of birds’, they say.
The assessment report says that no top soil is expected to begenerated in the mining plan period and the waste shall be dumped in the pre-determined dumping place outside the mine area.
But Piyush Sethia of ‘Speak Out Salem’, the NGO that spearheads the anti-mining movement, says: It is literally impossible to mine without removing the topsoil of the hills. Forest officials too concur with him.
On the pre-determined dumping place outside the mine areas, Sethia points out that it has not explained about the place selected for the waste disposal.
Disputing the point that iron ore does not contain any toxic element, Cherniak says, ‘acid-mine drainage from an iron ore mine in China has caused alarming levels of cadmium and lead to contamination of surface water and locally-grown rice and vegetables,’ citing a scientific publication ‘Agricultural soils irrigated acidic mine water: acidity, heavy metals, and crop contamination’ in the Australian Journal of Soil Research.
Though the assessment report says that afforestation will be done over the waste dump slopes by spreading or utilizing the topsoil segregated and stacked separately, in the previous pages of the report, it is stated: ‘No topsoil is expected to be generated in the plan period,’ enviornmentalists point out.
Then, it is not known from where the water - the report says that the requirement will be about 560 cubic million/day - will come from, when the district administration has already reduced the supply from Sathanur dam for irrigation from 110 days to 90 days per year, says Kumar Ambayiram, a local environmentaal activitist.
Above all, the report is silent on where beneficiation and pelletization plant, which will require at least 100 acres of land, will be set up, points out Sethia.
Source: Express Buzz
The claim has been made in the executive summary of the Rapid Environment Impact Assessment (REIA) report and the Environment Management Plan submitted with the application seeking approval for iron ore mining in the reserved forest of Kavuthi Malai and Vediappan Malai.
Mark Cherniak, a scientist with Environment Law Alliance World Wide (E-Law), US, says: ‘The area of the project is a forested area and forests are among the most threatened and vulnerable ecological assets around the world.
Supporting his view, local forest officials, too, say that it is ironical to classify the two hills as not ecologically fragile. Forest officials had explained to the Central Empowerment Committee that visited the area before forest clearance was given for the project that mining operations would disturb the entire ecosystem of the district.
‘If lakhs of trees are felled it will lead to soil erosion, affect the ground water storage and disturb the wildlife. The forest is home for endangered species like monitor lizard, pangolin and more than 60 varieties of birds’, they say.
The assessment report says that no top soil is expected to begenerated in the mining plan period and the waste shall be dumped in the pre-determined dumping place outside the mine area.
But Piyush Sethia of ‘Speak Out Salem’, the NGO that spearheads the anti-mining movement, says: It is literally impossible to mine without removing the topsoil of the hills. Forest officials too concur with him.
On the pre-determined dumping place outside the mine areas, Sethia points out that it has not explained about the place selected for the waste disposal.
Disputing the point that iron ore does not contain any toxic element, Cherniak says, ‘acid-mine drainage from an iron ore mine in China has caused alarming levels of cadmium and lead to contamination of surface water and locally-grown rice and vegetables,’ citing a scientific publication ‘Agricultural soils irrigated acidic mine water: acidity, heavy metals, and crop contamination’ in the Australian Journal of Soil Research.
Though the assessment report says that afforestation will be done over the waste dump slopes by spreading or utilizing the topsoil segregated and stacked separately, in the previous pages of the report, it is stated: ‘No topsoil is expected to be generated in the plan period,’ enviornmentalists point out.
Then, it is not known from where the water - the report says that the requirement will be about 560 cubic million/day - will come from, when the district administration has already reduced the supply from Sathanur dam for irrigation from 110 days to 90 days per year, says Kumar Ambayiram, a local environmentaal activitist.
Above all, the report is silent on where beneficiation and pelletization plant, which will require at least 100 acres of land, will be set up, points out Sethia.
Source: Express Buzz
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