Codelco, the world’s biggest copper mining company, said profits fell by almost half last year and production declined 7 percent because of a strike, storms and lower ore quality at its aging mines.
Annual production dropped to 1.55 million metric tons from 1.67 million tons in 2007 from its fully owned mines and a 49 percent stake in Chilean mine El Abra, Chief Executive Officer Jose Pablo Arellano said today at a press conference in Santiago. Net income dropped 47 percent to $1.57 billion as prices fell.
Saturday, February 28, 2009
Arehada Prepares For Mining Operation
Arehada Mining Limited announced on Friday that its wholly owned Chinese operating subsidiary, Arehada Mining Corporation ("Arehada China"), has obtained further extension for its bank loans and has re-assembled its management team on site to prepare for resumption of mining operations.
Arehada China has two short term bank loans with the Agricultural Bank of China (the "Agricultural Bank") in the amount of RMB 16,000,000 and RMB 14,000,000 due on February 21, 2009 and February 26, 2009 respectively, as well as a RMB 20,000,000 principal repayment due on February 20, 2009 on the five-year term loan with the Agricultural Bank. After discussions with Arehada China, the Agricultural Bank agreed to extend all three loans. The Agricultural Bank has agreed that when Arehada China re-starts its mining operation and generates cash flow from operation (after covering its operational needs), Arehada China would start to repay the interest on the loans, and when Arehada China has generated surplus cash flow after covering its operational and day-to-day business needs, the Company would start to repay the principal.
After a few months of care and maintenance, Arehada China is now gearing up to re-start its mining operations, thanks to the recent increase in zinc and lead prices. Managers, engineers and financial staff have been re-assembled at the mine site to prepare for the resumption of the mining operation. Arehada plans to further reduce costs and increase head grade of lead and zinc by targeting higher grade ore bodies and by adopting more efficient measures and technology. Arehada expects to resume the mining operation on or about mid-March, 2009. Arehada China currently does not have immediate plan to re-start the zinc processing plant.
"We are very pleased to receive the loan extension from the Agricultural Bank and we are excited that we will start our mining operations again," commented Mr. Steve Fan Wang, Chairman and CEO of Arehada. "The low metal prices in the past several months have been very difficult for mining companies like Arehada. We appreciate the co-operation and understanding shown by our bankers, shareholders and other stakeholders during this period. Now with the metal market condition improving, and with the new measures planned for our operation, we believe that the company will be back on track."
Arehada China has two short term bank loans with the Agricultural Bank of China (the "Agricultural Bank") in the amount of RMB 16,000,000 and RMB 14,000,000 due on February 21, 2009 and February 26, 2009 respectively, as well as a RMB 20,000,000 principal repayment due on February 20, 2009 on the five-year term loan with the Agricultural Bank. After discussions with Arehada China, the Agricultural Bank agreed to extend all three loans. The Agricultural Bank has agreed that when Arehada China re-starts its mining operation and generates cash flow from operation (after covering its operational needs), Arehada China would start to repay the interest on the loans, and when Arehada China has generated surplus cash flow after covering its operational and day-to-day business needs, the Company would start to repay the principal.
After a few months of care and maintenance, Arehada China is now gearing up to re-start its mining operations, thanks to the recent increase in zinc and lead prices. Managers, engineers and financial staff have been re-assembled at the mine site to prepare for the resumption of the mining operation. Arehada plans to further reduce costs and increase head grade of lead and zinc by targeting higher grade ore bodies and by adopting more efficient measures and technology. Arehada expects to resume the mining operation on or about mid-March, 2009. Arehada China currently does not have immediate plan to re-start the zinc processing plant.
"We are very pleased to receive the loan extension from the Agricultural Bank and we are excited that we will start our mining operations again," commented Mr. Steve Fan Wang, Chairman and CEO of Arehada. "The low metal prices in the past several months have been very difficult for mining companies like Arehada. We appreciate the co-operation and understanding shown by our bankers, shareholders and other stakeholders during this period. Now with the metal market condition improving, and with the new measures planned for our operation, we believe that the company will be back on track."
Tata Steel Q3 Profit Down 68%
Hit by the 40 per cent cut in production in Europe, Tata Steel has reported a 68 per cent drop in the consolidated net profit at Rs 732 crore (Rs 1,402 crore) for the third quarter of the financial year ended December 30, 2008. Sales rose 4 per cent to Rs 33,191 crore (Rs 31,899 crore) in the quarter under review.
The company has transferred the actuarial gain on funds for employee benefits of Rs 145 crore made last year to “reserves and surplus”.
“Had the company followed the previous practice of recognising changes in actuarial valuations of pension plans of Tata Steel Europe in the profit and loss account, the profit after tax for the current quarter would have been lower by Rs 4,256 crore and for the nine months ended December 31 it would have been down by Rs 8,635 crore,” the company said in a press release.
The company has given the pink slip to 2,500 employees in UK and 1,000 in other parts of Europe. The company will have a limited liability on pension for new employees to be recruited when the economy recovers.
“Most of the liabilities on pension fund have been taken care of and it will reduce in the coming months,” said Mr B. Muthuraman, Managing Director, Tata Steel.
The company has incurred a forex loss of Rs 201 crore in the third quarter as against a gain of Rs 45 crore in the same period last year.
The forex loss includes notional unrealised translation loss of Rs 753 crore (Rs 154 crore) on Convertible Alternate Reference Securities (CARS) issued in September 2007. CARS are convertible into equity shares only between September 4, 2011 and August 6, 2012 and are redeemable in foreign currency only in September 2012.
Profit after taking minority interest and share of profit of associate companies was Rs 814 crore (Rs 1,325 crore) in the third quarter, while it was Rs 9,486 crore (Rs 11,118 crore) in the nine months ended December 2009.
On a standalone bases, Tata Steel’s net profit in the third quarter was down 56 per cent at Rs 466 crore (Rs 1,068 crore), while net sales were down 3 per cent at Rs 4,802 crore (Rs 4,974 crore).
Value of inventories of raw materials and finished goods at some of the subsidiary companies has been written down by Rs 1,744 crore in the third quarter under review to recognise the fall in market prices of these products, the company said. Year-to-date write down amounted to Rs 2,188 crore.
Mr Muthuraman, said “We are optimistic that the steel demand in India is on a revival path. In the January-March quarter we expect our sales to grow 45 per cent to 1.6 million tonnes against 1.1 million tonnes logged in the October-December quarter.” The company has registered sales of 0.5 million tonnes in January and 5.90 lakh tonnes in February.
Tata Steel India produced 1.23 mt (1.25 mt) and sales of 1.07 mt (1.24 mt), Tata Steel Europe produced 3.31 million tonnes (4.89 mt) and sold 4.30 mt (5.60 mt), Nat Steel Asia produced 0.35 mt (0.42 mt) and sales were at 0.40 mt (0.70 mt) and Tata Steel Thailand registered a production of 0.19 mt (0.38 mt) and sales of 0.30 mt (0.40 mt).
The company has been renegotiating its contracts for coal procurement up to June 2009. The future contracts will be negotiated at $120-$130 a tonne, said Mr Muthuraman.
The company intends to prepay $50 million of high-cost debts in the next 12 months from the proceeds realised from sale of its assets. The company has repaid $500 million till the December quarter. In India, repayment of $795 million loan will start after 2009, the company said.
Tata Steel will be saving $ 16.4 million through spot buying of coal and exercise mutual options and save $4.4 million through postponement of spot buy of ferroalloys.
The company intends to save £600 million in the first half of FY’09 from its ‘weathering the storm” programme which includes aligning production with current market demand by shutting down three blast furnaces, adjustment of logistic and supply chain, reduction in use of third party services, flexible production to reduce energy cost, reduction in employment cost, general and administration cost saving programme and align hedging to new activity levels.
The company has a liquidity of $1.886 billion which included cash and cash equivalents of $1.134 billion.
Source: The Hindu Business Line
The company has transferred the actuarial gain on funds for employee benefits of Rs 145 crore made last year to “reserves and surplus”.
“Had the company followed the previous practice of recognising changes in actuarial valuations of pension plans of Tata Steel Europe in the profit and loss account, the profit after tax for the current quarter would have been lower by Rs 4,256 crore and for the nine months ended December 31 it would have been down by Rs 8,635 crore,” the company said in a press release.
The company has given the pink slip to 2,500 employees in UK and 1,000 in other parts of Europe. The company will have a limited liability on pension for new employees to be recruited when the economy recovers.
“Most of the liabilities on pension fund have been taken care of and it will reduce in the coming months,” said Mr B. Muthuraman, Managing Director, Tata Steel.
The company has incurred a forex loss of Rs 201 crore in the third quarter as against a gain of Rs 45 crore in the same period last year.
The forex loss includes notional unrealised translation loss of Rs 753 crore (Rs 154 crore) on Convertible Alternate Reference Securities (CARS) issued in September 2007. CARS are convertible into equity shares only between September 4, 2011 and August 6, 2012 and are redeemable in foreign currency only in September 2012.
Profit after taking minority interest and share of profit of associate companies was Rs 814 crore (Rs 1,325 crore) in the third quarter, while it was Rs 9,486 crore (Rs 11,118 crore) in the nine months ended December 2009.
On a standalone bases, Tata Steel’s net profit in the third quarter was down 56 per cent at Rs 466 crore (Rs 1,068 crore), while net sales were down 3 per cent at Rs 4,802 crore (Rs 4,974 crore).
Value of inventories of raw materials and finished goods at some of the subsidiary companies has been written down by Rs 1,744 crore in the third quarter under review to recognise the fall in market prices of these products, the company said. Year-to-date write down amounted to Rs 2,188 crore.
Mr Muthuraman, said “We are optimistic that the steel demand in India is on a revival path. In the January-March quarter we expect our sales to grow 45 per cent to 1.6 million tonnes against 1.1 million tonnes logged in the October-December quarter.” The company has registered sales of 0.5 million tonnes in January and 5.90 lakh tonnes in February.
Tata Steel India produced 1.23 mt (1.25 mt) and sales of 1.07 mt (1.24 mt), Tata Steel Europe produced 3.31 million tonnes (4.89 mt) and sold 4.30 mt (5.60 mt), Nat Steel Asia produced 0.35 mt (0.42 mt) and sales were at 0.40 mt (0.70 mt) and Tata Steel Thailand registered a production of 0.19 mt (0.38 mt) and sales of 0.30 mt (0.40 mt).
The company has been renegotiating its contracts for coal procurement up to June 2009. The future contracts will be negotiated at $120-$130 a tonne, said Mr Muthuraman.
The company intends to prepay $50 million of high-cost debts in the next 12 months from the proceeds realised from sale of its assets. The company has repaid $500 million till the December quarter. In India, repayment of $795 million loan will start after 2009, the company said.
Tata Steel will be saving $ 16.4 million through spot buying of coal and exercise mutual options and save $4.4 million through postponement of spot buy of ferroalloys.
The company intends to save £600 million in the first half of FY’09 from its ‘weathering the storm” programme which includes aligning production with current market demand by shutting down three blast furnaces, adjustment of logistic and supply chain, reduction in use of third party services, flexible production to reduce energy cost, reduction in employment cost, general and administration cost saving programme and align hedging to new activity levels.
The company has a liquidity of $1.886 billion which included cash and cash equivalents of $1.134 billion.
Source: The Hindu Business Line
Quebec Iron Ore Plant Will Not Reopen
The Iron Ore Company of Canada (IOC) and its largest shareholder Rio Tinto no longer plan to restart the Sept-Iles pelletising plant, in Quebec, after a sharp decline in global iron ore demand has made the plant unviable.
The plant was opened in 1973, but has been idle since 1981. It was partially refurbished during 2000 and 2001, but the decision not to restart will not result in any job cuts, the company said.
The pellet plant buildings will be kept intact “for the foreseeable future”, as they house important utilities that service IOC rail and port facilities, but the dismantling and removal of processing equipment will get under way soon.
Rio owns 58,7% and operates IOC, while Mitsubishi Corporation holds 26,18%, and the Labrador Iron Ore Royalty Income Fund has 15,1%.
The firm is the largest manufacturer of iron ore pellets in Canada.
Source: Creamers Mining Weekly
The plant was opened in 1973, but has been idle since 1981. It was partially refurbished during 2000 and 2001, but the decision not to restart will not result in any job cuts, the company said.
The pellet plant buildings will be kept intact “for the foreseeable future”, as they house important utilities that service IOC rail and port facilities, but the dismantling and removal of processing equipment will get under way soon.
Rio owns 58,7% and operates IOC, while Mitsubishi Corporation holds 26,18%, and the Labrador Iron Ore Royalty Income Fund has 15,1%.
The firm is the largest manufacturer of iron ore pellets in Canada.
Source: Creamers Mining Weekly
Chinese Ferromanganese Producers Continue To Struggle
Over twenty Chinese ferromanganese producers, representing more than two-thirds of the country's production gathered in Shanghai on February 25th to hold an industry conference.
There was pessimism regarding the global economy and a feeling that the world's major economies will not recover quickly from the financial crisis.
The Chinese producers face two difficulties: on the one hand, producers bought large amounts of manganese ore at a high price and stock levels of the ore are still high; on the other hand, even thought the manganese ore price has fallen, producers have yet to enjoy the low price and production costs have remain higher than sales prices.
Meanwhile steelmakers are squeezing purchasing costs and are delaying payments, triggering huge losses for ferromanganese producers.
Alloy stocks have dived after months of consumption. Only less than 50% of producers have maintained their production.
In the face of these conditions, producers should strengthen cooperation, struggle for preferential prices for manganese ore, ask the National Development and Reform Commission for relaxed policies through the ferroalloy association and strive for preferential electricity prices in local regions.
Producers agreed at the conference to control ferroalloy output, prevent 'blind' production, maintain moderate sales prices and enhance communication with steelmakers in order to win a mutual understanding.
Production costs now stands at over CNY 8,000 per tonne for silicomanganese, CNY 8,000 per tonne for 65 high carbon ferromanganese and CNY 10,500 per tonne for 78/20 medium carbon ferromanganese.
Source: Steel Guru
There was pessimism regarding the global economy and a feeling that the world's major economies will not recover quickly from the financial crisis.
The Chinese producers face two difficulties: on the one hand, producers bought large amounts of manganese ore at a high price and stock levels of the ore are still high; on the other hand, even thought the manganese ore price has fallen, producers have yet to enjoy the low price and production costs have remain higher than sales prices.
Meanwhile steelmakers are squeezing purchasing costs and are delaying payments, triggering huge losses for ferromanganese producers.
Alloy stocks have dived after months of consumption. Only less than 50% of producers have maintained their production.
In the face of these conditions, producers should strengthen cooperation, struggle for preferential prices for manganese ore, ask the National Development and Reform Commission for relaxed policies through the ferroalloy association and strive for preferential electricity prices in local regions.
Producers agreed at the conference to control ferroalloy output, prevent 'blind' production, maintain moderate sales prices and enhance communication with steelmakers in order to win a mutual understanding.
Production costs now stands at over CNY 8,000 per tonne for silicomanganese, CNY 8,000 per tonne for 65 high carbon ferromanganese and CNY 10,500 per tonne for 78/20 medium carbon ferromanganese.
Source: Steel Guru
China's Ferrochrome Imports
China's imports of ferrochrome have fallen by 32.8% on a year-on-year basis in January 2009 to 87,936 tonnes, including 85,845 tonnes of high carbon ferrochrome. However, the figure was up by 84.1% over December.
India, Kazakhstan and South Africa contributed 28,868 tonnes, 42,171 tonnes and 14,742 tonnes respectively, with average import prices of USD 914.2 per tonne, USD 924.8 per tonne and USD 829.8 per tonne. Germany and Sweden supplied 20 tonnes and 44 tonnes respectively.
Low carbon ferrochrome imports amounted to 2,091 tonnes with an average price of USD 1357 per tonne, of which 2,086 tonnes came from Kazakhstan. Due to high production costs, the domestic price was higher than prices for imports, hence imports rose significantly in this Jan.
China exports of ferrochrome were 11,466 tonnes in January 2009, including 8,138 tonnes of high carbon ferrochrome and 3,328 tonnes of low carbon ferrochrome. High carbon ferrochrome was exported at a price of some USD 900 per tonne with 6,488 tonnes going to Japan and 1,380 tonnes flowing into South Korea.
India, Kazakhstan and South Africa contributed 28,868 tonnes, 42,171 tonnes and 14,742 tonnes respectively, with average import prices of USD 914.2 per tonne, USD 924.8 per tonne and USD 829.8 per tonne. Germany and Sweden supplied 20 tonnes and 44 tonnes respectively.
Low carbon ferrochrome imports amounted to 2,091 tonnes with an average price of USD 1357 per tonne, of which 2,086 tonnes came from Kazakhstan. Due to high production costs, the domestic price was higher than prices for imports, hence imports rose significantly in this Jan.
China exports of ferrochrome were 11,466 tonnes in January 2009, including 8,138 tonnes of high carbon ferrochrome and 3,328 tonnes of low carbon ferrochrome. High carbon ferrochrome was exported at a price of some USD 900 per tonne with 6,488 tonnes going to Japan and 1,380 tonnes flowing into South Korea.
Friday, February 27, 2009
Indian Iron Ore Exports To Be Below Last Year's
India's iron ore exports in the financial year to March are expected to be below last year's 104 million tonnes.
Mines secretary Shantanu Consul told reporters "It may be difficult," on Friday when asked whether iron ore exports this year would match last year's.
Around 80 percent of India's iron ore exports go to China, where demand has slowed considerably.
Mines secretary Shantanu Consul told reporters "It may be difficult," on Friday when asked whether iron ore exports this year would match last year's.
Around 80 percent of India's iron ore exports go to China, where demand has slowed considerably.
Noble Group Bids For Gloucester Coal
Singapore-based commodities trader Noble Group Ltd has launched a bid to buy out Australian miner Gloucester Coal. Noble owns 21.7 percent of Gloucester.
The bid - at A$4.85 per share cash - is conditional on an all-share merger between Gloucester and Whitehaven not going ahead, Noble said in a statement released to the Australian stock exchange.
The bid - at A$4.85 per share cash - is conditional on an all-share merger between Gloucester and Whitehaven not going ahead, Noble said in a statement released to the Australian stock exchange.
World Steel Markets Remain Depressed
The UK-based research group, MEPS, says there is still downward pressure on US steel transaction prices, although the rate of decrease has decelerated. Mill outages continue, with operating levels quoted at between 40% and 50%, depending on the facility. MEPS said that “Deliveries are running late because of the production constraints. Nevertheless, distributors are keeping inventories at the lowest levels in many years as they react to the sharp decline in end user steel demand caused by the economic recession.”
It added that "The Canadian market remains depressed due to auto production cuts and weak construction activity. New order intake at the steelmakers continues to be slow, with no improvement from the poor levels of late 2008. Both service centers and consumers are working with such reduced inventories that they have to request rapid deliveries when they do purchase from the mills. Distributors’ volumes are low and profitability is declining. Although some imports are available at figures below domestic ones, customers are loathe commit to offshore business."
MEPS said that “The Chinese steel market responded quite positively to the government’s economic stimulus package and to the plans to revive auto, shipbuilding and machinery manufacture. These are expected to grow demand during the first half of 2009. However, the upward price tendency experienced over the last two to three months appears unsustainable for now. Domestic values rose in the first few trading days following the Chinese New Year holidays but have turned down since then. Steel exports continue to contract and overseas sales of manufactured goods are also declining due to the global economic crisis.”
MEPS added that "The Japanese mills are deepening their output curbs in the face of rapidly shrinking sales. They state that their prime task now is to reduce stock levels. Inventories of strip mill products held by local steelmakers and distributors, as end December, moved up by 3.1% as compared to November to the highest level ever recorded. Meanwhile, quayside stocks of imported flat products rose by 2% in the same time frame, the first increase since October 2008. Tokyo Steel decided to cut domestic list prices for all its products by between JPY 3000 and JPY 10,000 per tonne for March contracts. POSCO has extended its steel production cutbacks into this month due to weakening market conditions and the need to adjust stock levels. Flat product inventories at distributors climbed by 4% between November 2008 and the end of the year, reflecting dismal demand in the auto and appliance sectors. They stabilized during January."
MEPS further added that "The global crisis is impacting Poland. Strip mill demand is very limited at present with no significant mill bookings to speak of, thus causing suppliers to offer further price reductions. In the Czech and Slovak markets, the steel sector is expected to perform badly as long as the current economic squeeze persists. Those producers linked to the auto industry are likely to suffer the most. Mill prices may be at the bottom now and are expected to stay at this low level until mid year. Any recovery in the second half is expected to be small. Resale values are under considerable pressure as distributors fight for the few deals available, desperate to sell their high priced stock.”
It concluded that “In Western Europe, market sentiment is depressed. The slightly more positive attitude witnessed at the start of 2009 evaporated a month later. Producers failed to achieve the first quarter price rises they were seeking, due to continuing weak demand and a lack of any desire on the part of customers to order ahead."
Source: Steel Guru
It added that "The Canadian market remains depressed due to auto production cuts and weak construction activity. New order intake at the steelmakers continues to be slow, with no improvement from the poor levels of late 2008. Both service centers and consumers are working with such reduced inventories that they have to request rapid deliveries when they do purchase from the mills. Distributors’ volumes are low and profitability is declining. Although some imports are available at figures below domestic ones, customers are loathe commit to offshore business."
MEPS said that “The Chinese steel market responded quite positively to the government’s economic stimulus package and to the plans to revive auto, shipbuilding and machinery manufacture. These are expected to grow demand during the first half of 2009. However, the upward price tendency experienced over the last two to three months appears unsustainable for now. Domestic values rose in the first few trading days following the Chinese New Year holidays but have turned down since then. Steel exports continue to contract and overseas sales of manufactured goods are also declining due to the global economic crisis.”
MEPS added that "The Japanese mills are deepening their output curbs in the face of rapidly shrinking sales. They state that their prime task now is to reduce stock levels. Inventories of strip mill products held by local steelmakers and distributors, as end December, moved up by 3.1% as compared to November to the highest level ever recorded. Meanwhile, quayside stocks of imported flat products rose by 2% in the same time frame, the first increase since October 2008. Tokyo Steel decided to cut domestic list prices for all its products by between JPY 3000 and JPY 10,000 per tonne for March contracts. POSCO has extended its steel production cutbacks into this month due to weakening market conditions and the need to adjust stock levels. Flat product inventories at distributors climbed by 4% between November 2008 and the end of the year, reflecting dismal demand in the auto and appliance sectors. They stabilized during January."
MEPS further added that "The global crisis is impacting Poland. Strip mill demand is very limited at present with no significant mill bookings to speak of, thus causing suppliers to offer further price reductions. In the Czech and Slovak markets, the steel sector is expected to perform badly as long as the current economic squeeze persists. Those producers linked to the auto industry are likely to suffer the most. Mill prices may be at the bottom now and are expected to stay at this low level until mid year. Any recovery in the second half is expected to be small. Resale values are under considerable pressure as distributors fight for the few deals available, desperate to sell their high priced stock.”
It concluded that “In Western Europe, market sentiment is depressed. The slightly more positive attitude witnessed at the start of 2009 evaporated a month later. Producers failed to achieve the first quarter price rises they were seeking, due to continuing weak demand and a lack of any desire on the part of customers to order ahead."
Source: Steel Guru
Japan-China Trade To Fall In 2009
According to a report released today by the Japan External Trade Organization (JETRO), Japan's total trade with China (imports and exports combined) rose 12.5% year-on-year in 2008 to US$266.4 billion, setting a record for tenth straight year. Japan's exports to China rose 13.8% year-on-year to US$124.2 billion, while Japan's imports from China rose 11.5% to US$142.3 billion.
The collapse of Lehman Brothers on September 15th, 2008 deepened the effects of the financial turmoil on real economies across the globe. The US, Japan and developed countries in Europe all posted negative economic growth in the fourth quarter of 2008, while China, during this same period, grew a stunted 6.8%.
Japan's total trade with China in 2008 achieved double-digit growth (year on year) in each month from January to October, with the exception of February, the month of the Chinese Lunar New Year, but fell in November and December, by 4.7% and 10.0% respectively. This was the first back to back contraction of Japan-China trade since the August 2001-January 2002 period.
Japan's exports to China rose 13.8% year-on-year in 2008 to US$124.2 billion. Exports achieved higher growth (year on year) for each month from January to October, but slipped in November and December, by 12.4% and 23.9% respectively. This slowdown reflects a decline in Japan's exports (to China) of electronic parts, raw materials (including organic compounds) and parts, as Chinese exports of finished goods to consumption locations, such as Japan, the US and Europe, slowed considerably. Japan's exports of consumer goods such as automobiles, and capital equipment were also down due to stagnant domestic demand in China. Meanwhile, exports of construction machinery, particularly large items, were robust, driven by strong demand for such items in large-scale projects, despite lower demand in housing and other real estate sectors.
Japan's imports from China rose 11.5% year-on-year in 2008 to US$142.3 billion, recording monthly growth increases (year on year) until October, also with the exception of February, and leveling off in the last two months of the year, due to stagnant domestic demand in Japan, including for clothing. Imports of foods were down for the second straight year, owing to mounting concerns over Chinese food safety, while imports of LCD TVs and DVD players/recorders increased compared to last year (a weakening trend, however, was noted for these items in the fourth quarter); imports of digital cameras were down in each of the last four months of 2008. High resource prices caused the value of Japanese imports from China to rise. The value of coal imports, for example, was up in terms of value, but down in terms of quantity. Sharp rises (by value) were also seen in ferroalloys (various alloys of iron) and low-priced ordinary steel used in general construction.
In 2008, Japan's export growth to China (13.8%) was higher than Japan's overall export growth for the year (8.9%). Conversely, Japan's import growth from China (at 11.5%) was lower than the nation's overall import growth figure (21.6%). China accounted for 17.4% of Japan's total trade, down 0.3 points from 2007, marking the first such decline in 18 years.
China accounted for 16.0% of Japan-'s exports in 2008, compared to 17.6% for the US. China even briefly overtook the US at the first spot in July and August, as the gap narrowed. Meanwhile, China's share of Japan's imports fell below the 20% mark to reach 18.8% in 2008, mainly due to high resource and energy prices pushing up imports (by value) from oil/natural resource producing countries such as Saudi Arabia.
As the downward trend that began in November 2008 is expected to continue, the value of Japan-China trade will likely decline in 2009, which would mark the first such decline since 1998. The outlook for 2009 is summarized below:
Exports:
1)If consumption remains weak in advanced economies like Japan, the US and Europe-and exports of finished products from China, the world's factory, continues to fall-Japan's exports of high value-added raw materials and parts will continue its downward trend.
2)With a 4 trillion yuan stimulus plan, the Chinese government aims for 8% economic growth in 2009. Local Chinese governments have also begun taking their own measures, which aim at creating new demand for investment in infrastructure, among other areas. This will likely lead to increased Japanese exports of public infrastructure items, such as construction machinery.
3)China's central government is developing plans aimed at adjusting and promoting ten of the country's main industries, including automobiles and steel. Part of the plan includes measures for boosting consumption, such as a reduced tax on small car purchases.
If the above economic and industrial measures can revive the Chinese economy and expand domestic demand, Japan's exports to China will likely be positively affected.
Imports:
1)Japan's imports from China are expected to remain sluggish over the next year, in particular for consumer goods, due to a stagnant Japanese economy.
2)Japanese consumers' demand for inexpensive Chinese goods may increase, but would have only a limited impact on import value.
3)Plunging resource prices may be a factor in pushing down the value of imports.
*Figures are US dollar conversions of yen-denominated statistics for imports (provisional) and exports (fixed) released by Japan's Ministry of Finance in January 2009. On a yen-basis, Japan's total trade with China fell 0.3% to 27.8 trillion yen in 2008, with exports rising 0.9% to 13 trillion yen, and imports falling 1.4% to 14.8 trillion yen.
Source: JETRO
The collapse of Lehman Brothers on September 15th, 2008 deepened the effects of the financial turmoil on real economies across the globe. The US, Japan and developed countries in Europe all posted negative economic growth in the fourth quarter of 2008, while China, during this same period, grew a stunted 6.8%.
Japan's total trade with China in 2008 achieved double-digit growth (year on year) in each month from January to October, with the exception of February, the month of the Chinese Lunar New Year, but fell in November and December, by 4.7% and 10.0% respectively. This was the first back to back contraction of Japan-China trade since the August 2001-January 2002 period.
Japan's exports to China rose 13.8% year-on-year in 2008 to US$124.2 billion. Exports achieved higher growth (year on year) for each month from January to October, but slipped in November and December, by 12.4% and 23.9% respectively. This slowdown reflects a decline in Japan's exports (to China) of electronic parts, raw materials (including organic compounds) and parts, as Chinese exports of finished goods to consumption locations, such as Japan, the US and Europe, slowed considerably. Japan's exports of consumer goods such as automobiles, and capital equipment were also down due to stagnant domestic demand in China. Meanwhile, exports of construction machinery, particularly large items, were robust, driven by strong demand for such items in large-scale projects, despite lower demand in housing and other real estate sectors.
Japan's imports from China rose 11.5% year-on-year in 2008 to US$142.3 billion, recording monthly growth increases (year on year) until October, also with the exception of February, and leveling off in the last two months of the year, due to stagnant domestic demand in Japan, including for clothing. Imports of foods were down for the second straight year, owing to mounting concerns over Chinese food safety, while imports of LCD TVs and DVD players/recorders increased compared to last year (a weakening trend, however, was noted for these items in the fourth quarter); imports of digital cameras were down in each of the last four months of 2008. High resource prices caused the value of Japanese imports from China to rise. The value of coal imports, for example, was up in terms of value, but down in terms of quantity. Sharp rises (by value) were also seen in ferroalloys (various alloys of iron) and low-priced ordinary steel used in general construction.
In 2008, Japan's export growth to China (13.8%) was higher than Japan's overall export growth for the year (8.9%). Conversely, Japan's import growth from China (at 11.5%) was lower than the nation's overall import growth figure (21.6%). China accounted for 17.4% of Japan's total trade, down 0.3 points from 2007, marking the first such decline in 18 years.
China accounted for 16.0% of Japan-'s exports in 2008, compared to 17.6% for the US. China even briefly overtook the US at the first spot in July and August, as the gap narrowed. Meanwhile, China's share of Japan's imports fell below the 20% mark to reach 18.8% in 2008, mainly due to high resource and energy prices pushing up imports (by value) from oil/natural resource producing countries such as Saudi Arabia.
As the downward trend that began in November 2008 is expected to continue, the value of Japan-China trade will likely decline in 2009, which would mark the first such decline since 1998. The outlook for 2009 is summarized below:
Exports:
1)If consumption remains weak in advanced economies like Japan, the US and Europe-and exports of finished products from China, the world's factory, continues to fall-Japan's exports of high value-added raw materials and parts will continue its downward trend.
2)With a 4 trillion yuan stimulus plan, the Chinese government aims for 8% economic growth in 2009. Local Chinese governments have also begun taking their own measures, which aim at creating new demand for investment in infrastructure, among other areas. This will likely lead to increased Japanese exports of public infrastructure items, such as construction machinery.
3)China's central government is developing plans aimed at adjusting and promoting ten of the country's main industries, including automobiles and steel. Part of the plan includes measures for boosting consumption, such as a reduced tax on small car purchases.
If the above economic and industrial measures can revive the Chinese economy and expand domestic demand, Japan's exports to China will likely be positively affected.
Imports:
1)Japan's imports from China are expected to remain sluggish over the next year, in particular for consumer goods, due to a stagnant Japanese economy.
2)Japanese consumers' demand for inexpensive Chinese goods may increase, but would have only a limited impact on import value.
3)Plunging resource prices may be a factor in pushing down the value of imports.
*Figures are US dollar conversions of yen-denominated statistics for imports (provisional) and exports (fixed) released by Japan's Ministry of Finance in January 2009. On a yen-basis, Japan's total trade with China fell 0.3% to 27.8 trillion yen in 2008, with exports rising 0.9% to 13 trillion yen, and imports falling 1.4% to 14.8 trillion yen.
Source: JETRO
Maanshan Iron And Steel Expects Steep Fall In Profits
Chinese steelmaker Maanshan Iron & Steel announced that it expects its 2008 net profit to fall by around about 71 percent following a surge in raw material and fuel prices. The company has also set aside a provision of approximately 1.71 billion yuan ($250.1 million) to cover a drop in the value of its stocks.
The company estimates net profit attrwill fall to 717 million yuan ($104.9 million) from 2.475 billion yuan a year ago.
The company estimates net profit attrwill fall to 717 million yuan ($104.9 million) from 2.475 billion yuan a year ago.
Buenaventura Posts Q4 Loss
Peruvian miner Compania de Minas Buenaventura SAA announced on Thursday a loss of $6.1 million in the fourth quarter of last year as the global recession hit prices and sales of silver and base metals.
This compared to a profit of US$120 million in the same quarter of 2007.
Operational income fell 84 percent to $16.9 million in the quarter due to higher contractor expenses and falling prices of zinc, lead and silver.
Sales fell to $155 million, compared with $226.5 million in the same period a year earlier.
Production at Yanacocha, part-owed by Buenaventura and Latin America's largest gold mine, said income for the year was $153.3 million, down from $274.8 million in 2007.
Buenaventura is Peru's largest publicly traded precious metals company and a major holder of mining rights in Peru.
This compared to a profit of US$120 million in the same quarter of 2007.
Operational income fell 84 percent to $16.9 million in the quarter due to higher contractor expenses and falling prices of zinc, lead and silver.
Sales fell to $155 million, compared with $226.5 million in the same period a year earlier.
Production at Yanacocha, part-owed by Buenaventura and Latin America's largest gold mine, said income for the year was $153.3 million, down from $274.8 million in 2007.
Buenaventura is Peru's largest publicly traded precious metals company and a major holder of mining rights in Peru.
Thursday, February 26, 2009
Ennore Coke Looking For Lower Coke Prices
In the wake of softening prices of coking coal in the international market, Ennore Coke Limited, a domestic manufacturer of metallurgical coke, is negotiating with its global coking coal suppliers like Rio Tinto and BHP Billiton, to secure an annual long-term contract of the raw material at $140-150 per tonne.
“At present, we are buying coking coal from our overseas suppliers at around $160 per tonne and we are negotiating with them to fix the price at $140-150 per tonne for a long-term contract. We are seeking a lower purchase price for coking coal as spot prices of the raw material in the international market have dipped this year and steel makers are also pressing for lower prices”, Ganesan Natarajan, president and chief executive officer, Ennore Coke told Business Standard.
Ennore Coke was looking at long-term coking coal contracts as its requirement for the raw material which currently stands at about 7,20,000 tonnes per annum is set to go up significantly in the next two years
The company would have a coking coal requirement of 1.3 million tonnes per annum for its proposed one million tonne per annum at Dhamara port in Orissa which is scheduled to be operational by the end of 2010. It is also scaling up the capacity of its coke plant at Haldia (West Bengal) form 1.5 lakh tonnes to 3 lakh tonnes per annum.
Ennore Coke’s plans to negotiate coking coal prices comes close on the heels of a similar move by the domestic steel makers whose bottomline was significantly impacted due to higher coking coal prices in 2008.
Steel Authority of India Limited (SAIL) reported a 56 per cent decline in its net profit during October-December of 2008-09, compared to the corresponding period of the previous fiscal. SAIL’s profitability was primarily impacted by rising prices of coking coal which had pushed up the steel PSU’s expenditure by Rs 2,641 crore.
JSW Steel posted a net loss of Rs 127.5 crore for the third quarter of 2008-09 mainly on account of higher prices of coking coal.
JSW Steel has already negotiated coking coal prices with global mining major Rio Tinto at $175 a tonne for January-March 2009 and expects its annual long-term coking coal contract to close at $100 a tonne for 2009-10.
The average price of coking coal in the international market jumped from $96 a tonne in 2007 to around $300 in 2008. Steel makers were now seeking lower prices of coking coal owing to falling steel prices and slump in the demand for raw materials like coking coal in the wake of the prevailing economic recession.
Recent sales of coking coal in China were in the range of $130-150 per tonne. Australia-based Macquarie Group Limited, a global provider of banking, financial and advisory services has forecasted a benchmark price of coking coal at $110 per tonne for 2009.
Meanwhile, the steelmakers, both domestic as well as overseas, are also negotiating with Ennore Coke for lower prices of metallurgical coke.
Ennore Coke is supplying foundry coke to the steel units at $420 per tonne and the steel makers are negotiating for a price of around $300 per tonne, said Natarajan.
Ennore Coke exports nearly 45 per cent of its total coke production to countries like US, Saudi Arabia and Iran and the company aims to raise its export share to 60-70 per cent in the next few years.
“At present, we are buying coking coal from our overseas suppliers at around $160 per tonne and we are negotiating with them to fix the price at $140-150 per tonne for a long-term contract. We are seeking a lower purchase price for coking coal as spot prices of the raw material in the international market have dipped this year and steel makers are also pressing for lower prices”, Ganesan Natarajan, president and chief executive officer, Ennore Coke told Business Standard.
Ennore Coke was looking at long-term coking coal contracts as its requirement for the raw material which currently stands at about 7,20,000 tonnes per annum is set to go up significantly in the next two years
The company would have a coking coal requirement of 1.3 million tonnes per annum for its proposed one million tonne per annum at Dhamara port in Orissa which is scheduled to be operational by the end of 2010. It is also scaling up the capacity of its coke plant at Haldia (West Bengal) form 1.5 lakh tonnes to 3 lakh tonnes per annum.
Ennore Coke’s plans to negotiate coking coal prices comes close on the heels of a similar move by the domestic steel makers whose bottomline was significantly impacted due to higher coking coal prices in 2008.
Steel Authority of India Limited (SAIL) reported a 56 per cent decline in its net profit during October-December of 2008-09, compared to the corresponding period of the previous fiscal. SAIL’s profitability was primarily impacted by rising prices of coking coal which had pushed up the steel PSU’s expenditure by Rs 2,641 crore.
JSW Steel posted a net loss of Rs 127.5 crore for the third quarter of 2008-09 mainly on account of higher prices of coking coal.
JSW Steel has already negotiated coking coal prices with global mining major Rio Tinto at $175 a tonne for January-March 2009 and expects its annual long-term coking coal contract to close at $100 a tonne for 2009-10.
The average price of coking coal in the international market jumped from $96 a tonne in 2007 to around $300 in 2008. Steel makers were now seeking lower prices of coking coal owing to falling steel prices and slump in the demand for raw materials like coking coal in the wake of the prevailing economic recession.
Recent sales of coking coal in China were in the range of $130-150 per tonne. Australia-based Macquarie Group Limited, a global provider of banking, financial and advisory services has forecasted a benchmark price of coking coal at $110 per tonne for 2009.
Meanwhile, the steelmakers, both domestic as well as overseas, are also negotiating with Ennore Coke for lower prices of metallurgical coke.
Ennore Coke is supplying foundry coke to the steel units at $420 per tonne and the steel makers are negotiating for a price of around $300 per tonne, said Natarajan.
Ennore Coke exports nearly 45 per cent of its total coke production to countries like US, Saudi Arabia and Iran and the company aims to raise its export share to 60-70 per cent in the next few years.
Peruvian Copper Production Up 25 Percent In January
The Peruvian government's Mining Ministry has released the country's mineral production figures for 2009. Copper, zinc and silver all rose - copper by over a quarter - compared to January of last year. However, lead production fell slightly.
The government relies on minerals for most of its revenues.
The figures along with a comparison with January 2008 are as follows:
Copper: 106,796 tonnes (up 25.89 pct),
Zinc: 136,531 tonnes (up 5.22 pct),
Gold: 13,853,518 fine grams (down 4.04 pct),
Silver: 307,166 fine kg (up 9.04 pct),
Lead: 27,038 tonnes (down 4.34 pct),
Iron: 336,253 tonnes (up 14.12 pct),
Tin: 3,434 tonnes (up 0.91 pct),
Molybdenum: 1,474 tonnes (up 85.41 pct)
The government relies on minerals for most of its revenues.
The figures along with a comparison with January 2008 are as follows:
Copper: 106,796 tonnes (up 25.89 pct),
Zinc: 136,531 tonnes (up 5.22 pct),
Gold: 13,853,518 fine grams (down 4.04 pct),
Silver: 307,166 fine kg (up 9.04 pct),
Lead: 27,038 tonnes (down 4.34 pct),
Iron: 336,253 tonnes (up 14.12 pct),
Tin: 3,434 tonnes (up 0.91 pct),
Molybdenum: 1,474 tonnes (up 85.41 pct)
Sishen South Expansion To Go Ahead As Planned
Kumba Iron Ore's multibillion-rand Sishen South expansion project is expcted to go ahead as planned despite the plunge in commodity prices caused by the global economic downturn and despite concerns about the viability of the project.
Sishen South, situated 80km south of the Sishen mine near Postmasburg in South Africa's Northern Cape, should increase Kumba's annual production by 9,000,000 tonnes a year by 2013 but analysts have raised concerns about the project's economic viability in the current market conditions. Kumba CEO, Chris Griffith, says the project will go ahead with production commencing in the first hald of 2012.
To date, around R2.5-billion has been committed with a further R6-billion set aside for the remainder of the project.
“This is a significant achievement for Kumba, and one that demonstrates its commit- ment to deliver on a large project pipeline. The development forms part of Kumba’s strategy to grow iron-ore export volumes to 44-million tons a year by 2013. Including current domestic production of nine-million tons a year, this increases Kumba’s total production to well over 50-million tons a year. The company’s project pipeline remains robust, with potential to deliver 70-million tons a year by 2015,” says Griffith.
The Sishen South expansion project is set to benefit greatly from the Sishen Expansion Project, due for completion by the end of this year.
“An experienced project team has been secured and Kumba has ensured that the people and skills deployed in the Sishen Expansion Project were retained for the development of the Sishen South mine. Orders have also been placed on long-lead equipment, which means that the company is in a strong position to ramp up swiftly to full capacity,” says Griffith.
Source: Mining Weekly
Sishen South, situated 80km south of the Sishen mine near Postmasburg in South Africa's Northern Cape, should increase Kumba's annual production by 9,000,000 tonnes a year by 2013 but analysts have raised concerns about the project's economic viability in the current market conditions. Kumba CEO, Chris Griffith, says the project will go ahead with production commencing in the first hald of 2012.
To date, around R2.5-billion has been committed with a further R6-billion set aside for the remainder of the project.
“This is a significant achievement for Kumba, and one that demonstrates its commit- ment to deliver on a large project pipeline. The development forms part of Kumba’s strategy to grow iron-ore export volumes to 44-million tons a year by 2013. Including current domestic production of nine-million tons a year, this increases Kumba’s total production to well over 50-million tons a year. The company’s project pipeline remains robust, with potential to deliver 70-million tons a year by 2015,” says Griffith.
The Sishen South expansion project is set to benefit greatly from the Sishen Expansion Project, due for completion by the end of this year.
“An experienced project team has been secured and Kumba has ensured that the people and skills deployed in the Sishen Expansion Project were retained for the development of the Sishen South mine. Orders have also been placed on long-lead equipment, which means that the company is in a strong position to ramp up swiftly to full capacity,” says Griffith.
Source: Mining Weekly
Copper Mesa Reviewing Options After Approach
Copper Mesa Mining Corp. said on Thursday it was reviewing its strategic alternatives after receiving an approach from a possible buyer for the company.
The company said the review was "precipitated by the receipt of expressions of interest to purchase certain assets for cash and alternatively, purchase all of the outstanding shares of the company" and has hired Desjardins Securities as financial adviser. It has also established a special committee of independent directors to oversee the review process and make recommendations to the board.
Copper Mesa is a mineral exploration and development company with two key past-producing copper properties, the Zonia and Emerald Isle Mines in Arizona.
The company said the review was "precipitated by the receipt of expressions of interest to purchase certain assets for cash and alternatively, purchase all of the outstanding shares of the company" and has hired Desjardins Securities as financial adviser. It has also established a special committee of independent directors to oversee the review process and make recommendations to the board.
Copper Mesa is a mineral exploration and development company with two key past-producing copper properties, the Zonia and Emerald Isle Mines in Arizona.
Silmak To Close Last Ferroalloy Stove
Macedonian ferroalloy manufacturer Silmak is to close the last of its seven stoves on 1 March. A fall in ferroalloy demand and tumbling prices in being blamed for the closure.
Zvonko Stojanovski, Silmak's chief executive officer, said 100 workers will remain in the facility to work on the maintenance. The workforce stood at 700 in September 2008.
The plant's executives hope to restart production when demand and prices improve.
Zvonko Stojanovski, Silmak's chief executive officer, said 100 workers will remain in the facility to work on the maintenance. The workforce stood at 700 in September 2008.
The plant's executives hope to restart production when demand and prices improve.
Huge Rise In Profits At Gloucester Coal
Gloucester Coal, which recently announced its intention to merge with rival Whitehaven Coal, has reported a $44 million profit for the six months to 31 December, up from $5.1 million in the same period last year. The company said it remained on track to deliver solid results despite softening demand.
CEO Rob Lord said the combination of the company's interim result and the forthcoming merger would deliver strong returns for shareholders.
"We are confident that demand for our products will remain firm and that we can continue to deliver a solid operating performance," he said.
"In addition, completion of the Whitehaven merger will take Gloucester Coal to the next level, delivering additional revenue streams and a portfolio of production and development assets that will underpin long term success."
Gloucester said it was renegotiating its coking coal contracts with customers in India, China and Korea.
As at 31 January cash at hand was $50.7 million, up from $25 just a month prior.
The company also highlighted its increase in coal exploration saying: "Our exploration program also delivered great results with open cut reserves increasing by 33% to 38 million tonnes, lifting our coal resources to 209 million tones."
CEO Rob Lord said the combination of the company's interim result and the forthcoming merger would deliver strong returns for shareholders.
"We are confident that demand for our products will remain firm and that we can continue to deliver a solid operating performance," he said.
"In addition, completion of the Whitehaven merger will take Gloucester Coal to the next level, delivering additional revenue streams and a portfolio of production and development assets that will underpin long term success."
Gloucester said it was renegotiating its coking coal contracts with customers in India, China and Korea.
As at 31 January cash at hand was $50.7 million, up from $25 just a month prior.
The company also highlighted its increase in coal exploration saying: "Our exploration program also delivered great results with open cut reserves increasing by 33% to 38 million tonnes, lifting our coal resources to 209 million tones."
China To Close 1000 Small Coal Mines
China's State Administration of Work Safety has announced its intention to close 1000 small coal mines this year to further eliminate obsolete capacity. It also urged large-scale coal mines to regroup and to reconstruct smaller rivals by merger and acquisition.
SAWS will release economic compensation policy for those affected and will encourage local governments to set up exit mechanism for legal small coal mines and to explore and establish a system of supervision and punishment with regards to accidents.
Almost two-thirds of China's coking coal is produced by small coal mines, whose safety has been the butt of some criticism. A gas explosion at the Tunlan Coal Mine in Shanxi province on Sunday has killed at least 74 workers.
SAWS will release economic compensation policy for those affected and will encourage local governments to set up exit mechanism for legal small coal mines and to explore and establish a system of supervision and punishment with regards to accidents.
Almost two-thirds of China's coking coal is produced by small coal mines, whose safety has been the butt of some criticism. A gas explosion at the Tunlan Coal Mine in Shanxi province on Sunday has killed at least 74 workers.
Iron Ore Miners Seeking 5 Percent Price Rise
Iron ore producers Rio Tinto Group,, BHP Billiton and Vale (formerly Companhia Vale do Rio Doce) are seeking a price increase of as much as 5% in annual contract negotiations because they think the market has bottomed out, the Wall Street Journal is reporting, citing people familiar with the talks.
A price increase of 5% in China and Japan, though well below the 70% to 85% levels of last year, would set a benchmark price for iron ore that steelmakers around the world would follow. Any price hike will be unpopular and opposed by steel mills worldwide, which has scaled-back production in the face of collapsed demand.
There has been little spot-market reaction in ore prices to reports from Rio Tinto, the world’s second-biggest iron ore producer, that flooding has closed its two main iron ore rail lines in Australia--which may cause force majeure on near-term shipments
The Wall Street Journal report says that the mining firms believe a recent uptick in demand from China may have signalled that the market has bottomed out. China’s steel production in January jumped 9.9%, or 3.7 million metric tons, from December and several analysts were suggesting that further steelmaking expansion would occur in February. One analyst, for example, wrote clients that “increased Chinese production would spread a bit of optimism to the rest of the world.”
However, Xinhua news service reports from China say the early-2009 pickup in steelmaking has ended. And, United Press International today is quoting China Iron and Steel Association’s executive deputy director Luo Bingsheng as saying the market for Chinese steel hadn't shown signs of recovery and steelmaking has gone into a sharp decline. “The financial crisis and the domestic economic slowdown resulted in contraction in both overseas and domestic markets,” Luo said Monday.
Source: Purchasing.com
A price increase of 5% in China and Japan, though well below the 70% to 85% levels of last year, would set a benchmark price for iron ore that steelmakers around the world would follow. Any price hike will be unpopular and opposed by steel mills worldwide, which has scaled-back production in the face of collapsed demand.
There has been little spot-market reaction in ore prices to reports from Rio Tinto, the world’s second-biggest iron ore producer, that flooding has closed its two main iron ore rail lines in Australia--which may cause force majeure on near-term shipments
The Wall Street Journal report says that the mining firms believe a recent uptick in demand from China may have signalled that the market has bottomed out. China’s steel production in January jumped 9.9%, or 3.7 million metric tons, from December and several analysts were suggesting that further steelmaking expansion would occur in February. One analyst, for example, wrote clients that “increased Chinese production would spread a bit of optimism to the rest of the world.”
However, Xinhua news service reports from China say the early-2009 pickup in steelmaking has ended. And, United Press International today is quoting China Iron and Steel Association’s executive deputy director Luo Bingsheng as saying the market for Chinese steel hadn't shown signs of recovery and steelmaking has gone into a sharp decline. “The financial crisis and the domestic economic slowdown resulted in contraction in both overseas and domestic markets,” Luo said Monday.
Source: Purchasing.com
Mechel To Buy Bluestone Coal
A report in the Russian newspaper, Vedemosti, suggests that the Russian coal miner, Mechel, has agreed to buy the privately-owned American company, Bluestone Coal, for $425 million plus shares. Mechel agreed a $4 billion cash deal last year with Bluestone's owners, the James Justice family.
The paper quoted sources present at a meeting of Mechel's top management and investment bankers in London on Wednesday as saying that Mechel will pay $425 million and issue preferred shares equivalent to 15 percent of its charter capital.
A $424 million deposit has already been paid.
Source: Vedemosti
The paper quoted sources present at a meeting of Mechel's top management and investment bankers in London on Wednesday as saying that Mechel will pay $425 million and issue preferred shares equivalent to 15 percent of its charter capital.
A $424 million deposit has already been paid.
Source: Vedemosti
NMDC Sees Fall In Iron Ore Production In 2008/09
India's biggest iron ore miner, NMDC Ltd, expects iron ore production for 2008/09 to be down from last year, its chairman said at a news conference on Thursday.
The company produced 29.8 million tonnes of iron ore in 2007/08 but chairman Rana Som told reporters that it production for 2008/09 may be in the region of 27.5-28.5 million tonnes.
The company produced 29.8 million tonnes of iron ore in 2007/08 but chairman Rana Som told reporters that it production for 2008/09 may be in the region of 27.5-28.5 million tonnes.
JSW Looks Nearer To Home For Exports
Reports from India suggest that the country's third-largest steel producer, JSW Steel Ltd, is to focus its export drive away from Europe and the US after a decrease in demand from those areas.
The company's director of finance Mr MVS Seshagiri Rao told Reuters: "In India, demand definitely is far better. Worldwide, there is no major improvement. Instead of exporting to Europe and US, we will sell to Africa, Sri Lanka, Nepal and other countries."
Profits plunged at Indian steel firms at the back end of 2008 as sales and margins both took a hit. JSW posted a loss in the December quarter due to foreign exchange losses, lower sales and higher prices of raw material such as coking coal and iron ore.
Negotiations are under way for new coking coal contracts and speculation suggests that steel companies are looking at a price of $100-120 a tonne, compared to $305 last year.
JSW Steel imports all of its coking coal requirements although it buys its iron ore from local sources.
The company's director of finance Mr MVS Seshagiri Rao told Reuters: "In India, demand definitely is far better. Worldwide, there is no major improvement. Instead of exporting to Europe and US, we will sell to Africa, Sri Lanka, Nepal and other countries."
Profits plunged at Indian steel firms at the back end of 2008 as sales and margins both took a hit. JSW posted a loss in the December quarter due to foreign exchange losses, lower sales and higher prices of raw material such as coking coal and iron ore.
Negotiations are under way for new coking coal contracts and speculation suggests that steel companies are looking at a price of $100-120 a tonne, compared to $305 last year.
JSW Steel imports all of its coking coal requirements although it buys its iron ore from local sources.
Wednesday, February 25, 2009
Atomic Resources Secures Tanzanian Coal Concession
Coal and uranium exploration company Atomic Resources has secured the concession rights to two new exploration locks covering the northern extension of the Ngaka coalfield in western Tanzania.
Atomic MD, David Holden said “The new concessions double the size of the exploration territory in the Ngaka coalfield, increasing the resource potential for Atomic, and giving Atomic a dominant position in the Tanzanian coal industry.” He added that the new concessions strengthened the company’s position in Tanzania’s coal industry, as well as its relationship with its joint-venture partner, the National Development Corporation of Tanzania.
The Tanzanian government recently announced its intention to build a number of new 400 MW thermal coal power stations by 2011, which would form the basis of the nation’s domestic power supply.
“Tanzania is growing rapidly and requires substantial, cheap, and reliable sources of energy to fuel its economic development. Atomic’s substantial thermal coal fields in western Tanzania are ideally situated to provide feedstock for coal-fired power stations, already being planned for Tanzania, and we are at the forefront of this fast-growing new industry,” said Holden.
Source: Mining Weekly
Atomic MD, David Holden said “The new concessions double the size of the exploration territory in the Ngaka coalfield, increasing the resource potential for Atomic, and giving Atomic a dominant position in the Tanzanian coal industry.” He added that the new concessions strengthened the company’s position in Tanzania’s coal industry, as well as its relationship with its joint-venture partner, the National Development Corporation of Tanzania.
The Tanzanian government recently announced its intention to build a number of new 400 MW thermal coal power stations by 2011, which would form the basis of the nation’s domestic power supply.
“Tanzania is growing rapidly and requires substantial, cheap, and reliable sources of energy to fuel its economic development. Atomic’s substantial thermal coal fields in western Tanzania are ideally situated to provide feedstock for coal-fired power stations, already being planned for Tanzania, and we are at the forefront of this fast-growing new industry,” said Holden.
Source: Mining Weekly
Sherritt Shows Loss After Impairment Charges
Sherritt International Corp. the Canadian natural resource company, reported a loss for the fourth quarter, after a large goodwill impairment charge of C$473.3million.
The company's fourth-quarter net loss was C$592.1 million, compared to net earnings of C$83.5 million in the same period last year.
The impairment charge was the full amount of the goodwill of C$463.3 million related to the Ambatovy Project plus asset impairment charges of C$30.1 million, receivable impairment charges of C$72.9 million, fair value adjustment of C$41.7 million, inventory impairments of C$11.7 million and other adjustments of C$48.4 million.
On an adjusted basis, net loss was C$20.8 million for the fourth-quarter.
Total revenue for the quarter increased to C$379.0 million from C$323.6 million in the comparable quarter last year.
Source: RTT News
Revenue from the Metals division declined to C$96.0 million from C$176.9 million in the same quarter last year due to lower nickel and cobalt prices. Nickel production during the quarter was 4,337 tonnes, compared to 4,344 tonnes in the last year. Cobalt production was 464 tonnes, below last year's 483 tonnes.
The company's fourth-quarter net loss was C$592.1 million, compared to net earnings of C$83.5 million in the same period last year.
The impairment charge was the full amount of the goodwill of C$463.3 million related to the Ambatovy Project plus asset impairment charges of C$30.1 million, receivable impairment charges of C$72.9 million, fair value adjustment of C$41.7 million, inventory impairments of C$11.7 million and other adjustments of C$48.4 million.
On an adjusted basis, net loss was C$20.8 million for the fourth-quarter.
Total revenue for the quarter increased to C$379.0 million from C$323.6 million in the comparable quarter last year.
Source: RTT News
Revenue from the Metals division declined to C$96.0 million from C$176.9 million in the same quarter last year due to lower nickel and cobalt prices. Nickel production during the quarter was 4,337 tonnes, compared to 4,344 tonnes in the last year. Cobalt production was 464 tonnes, below last year's 483 tonnes.
Monnet Ispat Heads Consortium To Buy 20 Percent of Sponge Iron Firm
Monnet Ispat have formed a consortium with the Torsteel Research Foundation, TRFI Investment Private, and others to acquire 20% of the equity capital of Orissa Sponge Iron and Steel, an Indian coal miner manufacturer of sponge iron, ingots and ferroalloys.
Monnet Ispat and PAC proposes to acquire up to 6,100,000 equity shares of Rs 10 each at a price of Rs 310 a share shares payable in cash, subject to terms and conditions.
The specified date for the offer is Feb. 27, 2008. The offer opens on Apr 4, 2009 and closes on Apr. 23, 2009.
Monnet Ispat and PAC proposes to acquire up to 6,100,000 equity shares of Rs 10 each at a price of Rs 310 a share shares payable in cash, subject to terms and conditions.
The specified date for the offer is Feb. 27, 2008. The offer opens on Apr 4, 2009 and closes on Apr. 23, 2009.
Macarthur Unable To Predict Coal Sales
Australian coal miner, Macarthur Coal, expects thermal coal will make up 30 per cent of its production in the second half because of weak demand from steel makers for its primary product, PCI.
After record half-year profits of $106.9 million - up from $13.5 million the previous year - the Queensland miner said it was unable to provide any guidance for its full-year profits because of uncertainty about sale prices and the mix of thermal and PCI sales.
It did not declare an interim dividend but said it would consider a final dividend if the coal market improved.
Macarthur traditionally sells 58 per cent of its PCI coal to Europe and Brazil, which iron ore miner Vale last week deemed the weakest steel markets in the world at present.
Vale's largest customer, ArcelorMittal, has not bought any ore since October and is not expected to resume buying until April.
ArcelorMittal is also Macarthur's largest customer and its second-largest shareholder.
Macarthur's chief executive, Nicole Hollows, said the steelmaker had been using up its PCI stockpiles since the financial crisis hit, and would not disclose whether it had purchased any coal during that period.
"We are now working with customers to determine what that percentage of contract performance will be," she said. "We acknowledge that PCI coal has been hit particularly hard."
Macarthur was forced to book a $46.9 million loss on foreign exchange hedges because its forecast revenue did not meet expectations due to lost sales. It has a remaining $43.9 million exposure based on an exchange rate of US70.78c.
"I am worried that the hedging will continue to drag on earnings, especially if the volume is higher than their sales, and that they won't be able to roll them forward indefinitely," said a Patersons Securities analyst, Andrew Harrington. Macarthur's shares closed 2c higher at $2.57.
Source: Sydney Morning Herald
After record half-year profits of $106.9 million - up from $13.5 million the previous year - the Queensland miner said it was unable to provide any guidance for its full-year profits because of uncertainty about sale prices and the mix of thermal and PCI sales.
It did not declare an interim dividend but said it would consider a final dividend if the coal market improved.
Macarthur traditionally sells 58 per cent of its PCI coal to Europe and Brazil, which iron ore miner Vale last week deemed the weakest steel markets in the world at present.
Vale's largest customer, ArcelorMittal, has not bought any ore since October and is not expected to resume buying until April.
ArcelorMittal is also Macarthur's largest customer and its second-largest shareholder.
Macarthur's chief executive, Nicole Hollows, said the steelmaker had been using up its PCI stockpiles since the financial crisis hit, and would not disclose whether it had purchased any coal during that period.
"We are now working with customers to determine what that percentage of contract performance will be," she said. "We acknowledge that PCI coal has been hit particularly hard."
Macarthur was forced to book a $46.9 million loss on foreign exchange hedges because its forecast revenue did not meet expectations due to lost sales. It has a remaining $43.9 million exposure based on an exchange rate of US70.78c.
"I am worried that the hedging will continue to drag on earnings, especially if the volume is higher than their sales, and that they won't be able to roll them forward indefinitely," said a Patersons Securities analyst, Andrew Harrington. Macarthur's shares closed 2c higher at $2.57.
Source: Sydney Morning Herald
Iron Ore Demand Fall Hits Shipping Sector
China seems to be controlling the fate of the world's shipping industry. If any changes are happening in China’s freight operations, that will immediately be reflected in the world’s shipping industry.
This week, commodity shipping rates are all set to crash because China has halted iron ore imports from India. Rates had gone up at the beginning of this month but a dip in demand for Indian iron ore from China, which is negotiating its long-term contracts with Australia and Brazil, has sent a chill down the spine of the shipping trade.
A lull in the dry bulk freight market is expected until China finalises its long-term contracts in about a week’s time.
While China, the top iron ore importer in the world, sources most of its committed iron ore from Australia and Brazil, its short-term spot requirements are met by imports from India. About 80% of India’s iron ore exports are to China.
According to reports from ports, no China-bound iron ore cargo has moved out of India in the past four days.
The situation has worsened so much that exporters who have committed ships and have already brought the cargo in the port are faced with situations where buyers have withdrawn.
The Baltic Dry Index, an index for commodity shipping rates on 26 global routes, posted three consecutive drops early last week on falling rates to haul coal and iron ore for making steel.
China’s contract negotiations will lead to a temporary weakening of the freight market. However, what is more important to look out for is the outcome of these negotiations, he said.
With the commodity demand collapse leading to lack of enough cargo to fill up a Capesize, many of these vessels have been idled.
China’s renewed long-term contracts will get some strength back in the commodity market. India has also seen other critical exports come down. In the past few months, exports of agri-commodity such as soybean meal have come down along with the textile market.
Source: Commodity Online
This week, commodity shipping rates are all set to crash because China has halted iron ore imports from India. Rates had gone up at the beginning of this month but a dip in demand for Indian iron ore from China, which is negotiating its long-term contracts with Australia and Brazil, has sent a chill down the spine of the shipping trade.
A lull in the dry bulk freight market is expected until China finalises its long-term contracts in about a week’s time.
While China, the top iron ore importer in the world, sources most of its committed iron ore from Australia and Brazil, its short-term spot requirements are met by imports from India. About 80% of India’s iron ore exports are to China.
According to reports from ports, no China-bound iron ore cargo has moved out of India in the past four days.
The situation has worsened so much that exporters who have committed ships and have already brought the cargo in the port are faced with situations where buyers have withdrawn.
The Baltic Dry Index, an index for commodity shipping rates on 26 global routes, posted three consecutive drops early last week on falling rates to haul coal and iron ore for making steel.
China’s contract negotiations will lead to a temporary weakening of the freight market. However, what is more important to look out for is the outcome of these negotiations, he said.
With the commodity demand collapse leading to lack of enough cargo to fill up a Capesize, many of these vessels have been idled.
China’s renewed long-term contracts will get some strength back in the commodity market. India has also seen other critical exports come down. In the past few months, exports of agri-commodity such as soybean meal have come down along with the textile market.
Source: Commodity Online
China's Coal Prices Fall While Stockpiles Grow
Figures released by the China Coal Transportation and Development Association report that coal prices at Qinhuangdao Port, China's largest coal trans-shipment port, continued to decline from February 16th to February 23rd while stockpiles grew.
Average prices dropped between CNY 5 and 10 per ton over the period and the port's stockpiles increased from 7.38 million tons on February 14th to 7.60 million tonnes on February 21st. Stockpile volume is more than 2 million tonnes higher than it was on February 1st.
Mr Li Ming a CCTDA coal analyst, wrote in a research report on February 23rd that growing stockpiles is attributable to weak downstream demand. Meanwhile, coal stockpiles at key power plants grew to 36.30 million tons on February 10th which is enough to operate on for 21 days, or two days more than there was at the end of January. The situation indicates that thermal coal prices might continue to drop in the coming weeks.
Coking coal prices, however, have rebounded due to relatively short supplies. In addition, a coalmine explosion that occurred at a coking coal mine in Shanxi Province on February 22nd could further limit supplies.
Source: Steel Guru
Average prices dropped between CNY 5 and 10 per ton over the period and the port's stockpiles increased from 7.38 million tons on February 14th to 7.60 million tonnes on February 21st. Stockpile volume is more than 2 million tonnes higher than it was on February 1st.
Mr Li Ming a CCTDA coal analyst, wrote in a research report on February 23rd that growing stockpiles is attributable to weak downstream demand. Meanwhile, coal stockpiles at key power plants grew to 36.30 million tons on February 10th which is enough to operate on for 21 days, or two days more than there was at the end of January. The situation indicates that thermal coal prices might continue to drop in the coming weeks.
Coking coal prices, however, have rebounded due to relatively short supplies. In addition, a coalmine explosion that occurred at a coking coal mine in Shanxi Province on February 22nd could further limit supplies.
Source: Steel Guru
Russian Coal Miners Seek Rise In Import Duty
Reports from Russia say that coal companies in the country are requesting a rise in the import duty on coking coal from 5% to 15%. This would enable local miners to utilise more of their mining capacity.
The government's commission on foreign trade safeguard duties will consider the issue at its next meeting.
In October 2008 the country's Economic Development Ministry suggested scrapping the import duty on coking coal in a bid to bolster competition.
The government's commission on foreign trade safeguard duties will consider the issue at its next meeting.
In October 2008 the country's Economic Development Ministry suggested scrapping the import duty on coking coal in a bid to bolster competition.
Lincoln Minerals Signs Indonesian Deal
Lincoln Minerals has announced the Company has concluded a Heads of Agreement (HoA) with Indonesian mining house, Samusa Corporation of Jakarta, to establish a new iron ore joint venture to explore and exploit Samusa’s Desa Mirah Kalanaman iron ore mine and surrounding exploration concession in the south-central area of the Indonesian island of Kalimantan (Borneo).
Key points of the agreement:
- Lincoln will earn a 45% interest in the mine and exploration concession
- Proposed conditional initial JV commitment by Lincoln of US$2 million
- Mining to commence immediately - Plan for 250,000 tpa mine increasing if sufficient resources are defined
- Existing 7,000t ore stockpile sold under three month contract to Chinese buyer
- First overseas project expansion for Lincoln
- Enables near-term move from iron ore explorer to iron ore producer. Lincoln Minerals was invited to become a party to this joint venture because of its expertise in the geological aspects of this project.
Samusa mines iron ore, iron sand, lead, manganese, copper and chrome – and has exclusive rights to mine and sell iron ore from two areas in south central Kalimantan: a 4,911 hectare exploration area (Exploration No. 188.4 / 320-SK / Distambe / 2006) that also High grade iron ore stockpiles and outcropping ore, Desa Mirah includes a 200 hectare exploitation (mining) area (Exploitation No. 238 Tahun 2008) upon which trial mining operations have already commenced.
A small parcel of 7,000-10,000 tonnes (t) of high grade iron ore has been mined and selected samples range from 64.3% to 68.7% Fe.
Terms of agreement
The Heads of Agreement provides that Lincoln Minerals will contribute US$2.0 million of funding in respect of the initial mining and exploration program at Desa Mirah, targeting direct shipping hematite iron ore (DSO). Funds will be provided by Lincoln on an “as needs” basis but the joint venture arrangement has been framed so that proceeds of the sale of ore can be offset against Lincoln’s contribution obligations.
For every tonne over and above 2 million tonnes of JORC-compliant Inferred Resources from the concession area, Samusa shall be entitled to a further compensation of US$0.10 per tonne.
Subject to certain rights to withdraw, Lincoln will acquire a 45% interest in the Project. If it is determined within 12 months from the date of the Heads of Agreement that the mining concession contains less than 250,000t of iron ore (with an average grade of at least 63% Fe), then Lincoln’s obligations shall cease and it may surrender its 45% interest.
Lincoln Minerals has separately loaned US$50,000 to Samusa to enable mining operations to commence immediately and to enable the existing ore stockpile (approximately 7,000t) to be transported from the mine and loaded onto barges. A 3-month contract has been agreed to with a Chinese buyer to purchase this ore consignment FOB (Freight on Board) the barges. The loan by Lincoln will be repaid by Samusa from proceeds from the sale of the ore stockpile.
Consequent upon establishment of a suitable orebody at Desa Mirah, it is planned to develop a small scale, high grade mining operation producing about 250,000t of iron ore in the first 12 months but ramping up to increased production if sufficient resources can be defined. Field reconnaissance by Lincoln Minerals has identified outcrops both within and outside the exploitation area containing in excess of 61% Fe.
It is planned to commence a drilling program as soon as possible to define the extent of the resource. The iron ore is of lateritic style and forms a relatively flat-lying sheet beneath thin alluvium but cropping out along gullies and hill slopes.
In a statemnt, Lincoln Minerals said, "this is an exciting development for Lincoln Minerals and will enable the Company to become an iron ore producer at little or no cost to its existing investors while it also pursues development of its advanced iron ore exploration projects on South Australia’s Eyre Peninsula."
Key points of the agreement:
- Lincoln will earn a 45% interest in the mine and exploration concession
- Proposed conditional initial JV commitment by Lincoln of US$2 million
- Mining to commence immediately - Plan for 250,000 tpa mine increasing if sufficient resources are defined
- Existing 7,000t ore stockpile sold under three month contract to Chinese buyer
- First overseas project expansion for Lincoln
- Enables near-term move from iron ore explorer to iron ore producer. Lincoln Minerals was invited to become a party to this joint venture because of its expertise in the geological aspects of this project.
Samusa mines iron ore, iron sand, lead, manganese, copper and chrome – and has exclusive rights to mine and sell iron ore from two areas in south central Kalimantan: a 4,911 hectare exploration area (Exploration No. 188.4 / 320-SK / Distambe / 2006) that also High grade iron ore stockpiles and outcropping ore, Desa Mirah includes a 200 hectare exploitation (mining) area (Exploitation No. 238 Tahun 2008) upon which trial mining operations have already commenced.
A small parcel of 7,000-10,000 tonnes (t) of high grade iron ore has been mined and selected samples range from 64.3% to 68.7% Fe.
Terms of agreement
The Heads of Agreement provides that Lincoln Minerals will contribute US$2.0 million of funding in respect of the initial mining and exploration program at Desa Mirah, targeting direct shipping hematite iron ore (DSO). Funds will be provided by Lincoln on an “as needs” basis but the joint venture arrangement has been framed so that proceeds of the sale of ore can be offset against Lincoln’s contribution obligations.
For every tonne over and above 2 million tonnes of JORC-compliant Inferred Resources from the concession area, Samusa shall be entitled to a further compensation of US$0.10 per tonne.
Subject to certain rights to withdraw, Lincoln will acquire a 45% interest in the Project. If it is determined within 12 months from the date of the Heads of Agreement that the mining concession contains less than 250,000t of iron ore (with an average grade of at least 63% Fe), then Lincoln’s obligations shall cease and it may surrender its 45% interest.
Lincoln Minerals has separately loaned US$50,000 to Samusa to enable mining operations to commence immediately and to enable the existing ore stockpile (approximately 7,000t) to be transported from the mine and loaded onto barges. A 3-month contract has been agreed to with a Chinese buyer to purchase this ore consignment FOB (Freight on Board) the barges. The loan by Lincoln will be repaid by Samusa from proceeds from the sale of the ore stockpile.
Consequent upon establishment of a suitable orebody at Desa Mirah, it is planned to develop a small scale, high grade mining operation producing about 250,000t of iron ore in the first 12 months but ramping up to increased production if sufficient resources can be defined. Field reconnaissance by Lincoln Minerals has identified outcrops both within and outside the exploitation area containing in excess of 61% Fe.
It is planned to commence a drilling program as soon as possible to define the extent of the resource. The iron ore is of lateritic style and forms a relatively flat-lying sheet beneath thin alluvium but cropping out along gullies and hill slopes.
In a statemnt, Lincoln Minerals said, "this is an exciting development for Lincoln Minerals and will enable the Company to become an iron ore producer at little or no cost to its existing investors while it also pursues development of its advanced iron ore exploration projects on South Australia’s Eyre Peninsula."
Board Changes At Meteorex
South African mining company, Metorex, which has large copper-cobalt interests in the Democratic Republic of the Congo and Zambia, has announced the appointment of Terence Goodlace as its CEO. Mr Goodlace, previously chief operating officer at Gold Fields, was appointed following a radical survival plan announced during the second week of December.
Former CEO Charles Needham has been moved to the post of managing director. Mr Goodlace left Gold Field in September for personal reasons.
In other moves at the director and management level, Keith Spencer and Edward Legg, currently executive directors of Meteorex have resigned, but remain with the company as technical advisers. Maritz Smith, previously an alternate director, has been appointed as group financial director with immediate effect.
George Forrest, Snr., resigned as a non-executive director of Metorex with immediate effect, due to time constraints. Forrest's nominated replacement, Pierre Chevalier, has been accepted by Metorex. Les Paton, a technical director of Impala Platinum, joined Metorex as an independent non-executive director.
In December, DRC regional mining minister Barthelemy Mumba Gama indicated that up to 300,000 people may lose their jobs in Katanga Province; 200,000 such jobs, mainly in artisanal mining, had already gone.
Katanga Mining is struggling to raise finance to fund its scaled-down ambitions, while Camec remains on halt at its key mines, including Mukondo. Anvil continues to seek funding, and while Africo remains relatively well cashed up, it appears to have put its flagship Kalukundi development on ice for now.
Source: Mineweb
Former CEO Charles Needham has been moved to the post of managing director. Mr Goodlace left Gold Field in September for personal reasons.
In other moves at the director and management level, Keith Spencer and Edward Legg, currently executive directors of Meteorex have resigned, but remain with the company as technical advisers. Maritz Smith, previously an alternate director, has been appointed as group financial director with immediate effect.
George Forrest, Snr., resigned as a non-executive director of Metorex with immediate effect, due to time constraints. Forrest's nominated replacement, Pierre Chevalier, has been accepted by Metorex. Les Paton, a technical director of Impala Platinum, joined Metorex as an independent non-executive director.
In December, DRC regional mining minister Barthelemy Mumba Gama indicated that up to 300,000 people may lose their jobs in Katanga Province; 200,000 such jobs, mainly in artisanal mining, had already gone.
Katanga Mining is struggling to raise finance to fund its scaled-down ambitions, while Camec remains on halt at its key mines, including Mukondo. Anvil continues to seek funding, and while Africo remains relatively well cashed up, it appears to have put its flagship Kalukundi development on ice for now.
Source: Mineweb
India's Steelmakers Seek Sub-USD100 Coking Coal Price
Reports from India suggest that the country's steel makers are reluctant to finalize annual contracts for coking coal for 2009-10 as they are pitching for a price below USD 100 per tonne against a high of USD 300 a tonne in 2008.
Mr V Saran chairman of VISA said that "the global coking coal suppliers are seeking price of around USD 150 per tonne but we want the price of a year back when it was USD 96 per tonne to USD 98 per tonne for annual contract.”
Mr V Saran chairman of VISA said that "the global coking coal suppliers are seeking price of around USD 150 per tonne but we want the price of a year back when it was USD 96 per tonne to USD 98 per tonne for annual contract.”
China's SRB Buys 100,000 Tonnes Of Refined Zinc
As expected, China's State Reserves Bureau has bought 100,000 tonnes of refined zinc from eight local smelters at 11,450-11,500 yuan per tonne.
The purchase was the second in less than two months as part of Beijing's plan to support local smelters which are suffering from weak demand.
The average selling price was 11,497 yuan per tonne. Most smelters sold at 11,500 yuan though one smelter sold at 11,450 yuan.
Prices were almost 10 percent higher than spot values in Shanghai on Wednesday. When the SRB made a purchase of 59,000 tonnes in January it was at a price 3.5 percent higher than the spot rate.
The purchase is the result of a huge rise in China's zinc imports, which were up 306 percent from in January from a year earlier and 278 percent from December.
The purchase was the second in less than two months as part of Beijing's plan to support local smelters which are suffering from weak demand.
The average selling price was 11,497 yuan per tonne. Most smelters sold at 11,500 yuan though one smelter sold at 11,450 yuan.
Prices were almost 10 percent higher than spot values in Shanghai on Wednesday. When the SRB made a purchase of 59,000 tonnes in January it was at a price 3.5 percent higher than the spot rate.
The purchase is the result of a huge rise in China's zinc imports, which were up 306 percent from in January from a year earlier and 278 percent from December.
Philippines Shipped 351,000 Tonnes Of Nickel Ore In January
Figures released by the Philippines' Mines and Geosciences Bureau on Tuesday reveal that the country exported 351,000 tonnes of nickel ore in January. One local firm, SR Metals, shipped 250,000 tonnes to China. Taganito Mining Corp. and Rio Tuba Mining Corp. each shipped 50,500 tonnes to Japan.
Mining companies are now required to obtain a mineral export permit from the Department of Environment and Natural Resources, which oversees the MGB. The new directive is intended to enable the government monitor the country's mineral shipments. As a result, the agency was unable to provide comparative figures.
Mining companies are now required to obtain a mineral export permit from the Department of Environment and Natural Resources, which oversees the MGB. The new directive is intended to enable the government monitor the country's mineral shipments. As a result, the agency was unable to provide comparative figures.
Tuesday, February 24, 2009
Hindustan Zinc To Lift Silver Production
Silver production at Hindustan Zinc is likely to touch 500 tonnes by 2013 with the expansion of Sindesar Khurd mine in Rajasthan.
The company produced 70 tonnes of silver up to December and expects to register an output of 100 tonnes in the financial year 2008-09, said a company source. The company increased output of about 51.30 tonnes in 2006-07 to 80.40 tonnes in 2007-08.
Hindustan Zinc produces silver as a by-product with lead. “We have been constantly increasing silver production in the last few years. By 2013, we will be producing 500 tonnes of silver. This is going to boost the domestic ancillary industry,” said Akhilesh Joshi, Chief Operating Officer, Hindustan Zinc.
A large part of the increase was attributed to ores from the Sindesar Khurd mine where the silver occurrences are about 200 ppm (part per million) and use of appropriate technology in the new smelters. Further, ore production at the Sindesar Khurd mine will increase from 0.3 million tonnes per annum to 1.5 mtpa, company sources said.
Once the expansion is completed in 2013, Hindustan Zinc will become the largest silver producer in Asia and will be among the world’s top six silver producers. The world’s largest primary silver manufacturer, Mexico-based Fresnillo Plc, produced 1,084 tonnes in 2008 followed by Canada-based Pan Amercian Silver accounting for 622 tpa, while Kazakhstan-based Kazakhmys Plc is Asia’s largest silver producer at little less than 500 tpa. Hindustan Zinc last year proposed to invest Rs 3,600 crore to enhance capacity of smelters, captive power facilities, mine development, shaft sinking and other infrastructure. The company has total reserves and resources of 232.3 million tonnes (mt).
Silver output is likely to increase with other metal production. At present the company has zinc production capacity of 7.54 lakh tpa to 6.69 ltpa and 85,000 tpa of lead. The mining capacity stands at 7.1 mtpa. The company has captive mines in Rampura Agucha, Rajpura Dariba and Zawar in Rajastahan and smelters at Chanderiya and Debari (Rajasthan) and Visakhapatnam in Andhra Pradesh.
Domestic market
The annual demand for silver is about 3,200 tonnes of which 77.1 per cent is met through imports, 18.8 per cent from secondary silver, 2.5 per cent from Hindustan Zinc and 1.7 per cent from Hindalco Industries.
Of the total demand, industrial uses account for 50 per cent, jewellery and silver ware 39 per cent, coins and medals 9 per cent and about 1 per cent each from photography and implied net investment. Silver, which has no substitute, is known for unique properties such as strength, sensitivity, malleability and ductility, electrical and thermal conductivity and high reflectance of light and also the ability to endure extreme temperature ranges.
Apart from jewellery and coinage it is used in photography, batteries, electronic equipment, medical applications, mirrors and coatings, solar energy, water purification, brazing, soldering and bearings.
Source: Hindu Business Line
The company produced 70 tonnes of silver up to December and expects to register an output of 100 tonnes in the financial year 2008-09, said a company source. The company increased output of about 51.30 tonnes in 2006-07 to 80.40 tonnes in 2007-08.
Hindustan Zinc produces silver as a by-product with lead. “We have been constantly increasing silver production in the last few years. By 2013, we will be producing 500 tonnes of silver. This is going to boost the domestic ancillary industry,” said Akhilesh Joshi, Chief Operating Officer, Hindustan Zinc.
A large part of the increase was attributed to ores from the Sindesar Khurd mine where the silver occurrences are about 200 ppm (part per million) and use of appropriate technology in the new smelters. Further, ore production at the Sindesar Khurd mine will increase from 0.3 million tonnes per annum to 1.5 mtpa, company sources said.
Once the expansion is completed in 2013, Hindustan Zinc will become the largest silver producer in Asia and will be among the world’s top six silver producers. The world’s largest primary silver manufacturer, Mexico-based Fresnillo Plc, produced 1,084 tonnes in 2008 followed by Canada-based Pan Amercian Silver accounting for 622 tpa, while Kazakhstan-based Kazakhmys Plc is Asia’s largest silver producer at little less than 500 tpa. Hindustan Zinc last year proposed to invest Rs 3,600 crore to enhance capacity of smelters, captive power facilities, mine development, shaft sinking and other infrastructure. The company has total reserves and resources of 232.3 million tonnes (mt).
Silver output is likely to increase with other metal production. At present the company has zinc production capacity of 7.54 lakh tpa to 6.69 ltpa and 85,000 tpa of lead. The mining capacity stands at 7.1 mtpa. The company has captive mines in Rampura Agucha, Rajpura Dariba and Zawar in Rajastahan and smelters at Chanderiya and Debari (Rajasthan) and Visakhapatnam in Andhra Pradesh.
Domestic market
The annual demand for silver is about 3,200 tonnes of which 77.1 per cent is met through imports, 18.8 per cent from secondary silver, 2.5 per cent from Hindustan Zinc and 1.7 per cent from Hindalco Industries.
Of the total demand, industrial uses account for 50 per cent, jewellery and silver ware 39 per cent, coins and medals 9 per cent and about 1 per cent each from photography and implied net investment. Silver, which has no substitute, is known for unique properties such as strength, sensitivity, malleability and ductility, electrical and thermal conductivity and high reflectance of light and also the ability to endure extreme temperature ranges.
Apart from jewellery and coinage it is used in photography, batteries, electronic equipment, medical applications, mirrors and coatings, solar energy, water purification, brazing, soldering and bearings.
Source: Hindu Business Line
Exxaro Rules Out Sale Of Zinc Business
South Africa's only zinc producer, Exxaro, has said that its loss-making zinc is "under review" but that it will not be sold for now. The company is hoping for future demand to improve and said it expects the market to pick up in 2010.
"We will stick with it for now, although as any other businesses, it is under constant review," Exxaro's Chief Executive Officer Sipho Nkosi said during a results presentation.
"There is a market for it, and not only in South Africa ... it's a cyclical business and will be a challenge, but we believe that towards the end of 2010 the situation will get better."
Exxaro its increased net operating profit by 71% to R2.5-billion in the 12-month period ended December 31, the company said on Tuesday. Mr Nkosi reported that revenue had increased 36% to R13.8-billion.
The company's mainstay coal business reported record revenue and record net operating profit and that the mineral sands experienced a turnaround.
The newly acquired Namakwa Sands operation had made a maiden profit contribution and there was record zircon, titanium slag and pig-iron production.
"We will stick with it for now, although as any other businesses, it is under constant review," Exxaro's Chief Executive Officer Sipho Nkosi said during a results presentation.
"There is a market for it, and not only in South Africa ... it's a cyclical business and will be a challenge, but we believe that towards the end of 2010 the situation will get better."
Exxaro its increased net operating profit by 71% to R2.5-billion in the 12-month period ended December 31, the company said on Tuesday. Mr Nkosi reported that revenue had increased 36% to R13.8-billion.
The company's mainstay coal business reported record revenue and record net operating profit and that the mineral sands experienced a turnaround.
The newly acquired Namakwa Sands operation had made a maiden profit contribution and there was record zircon, titanium slag and pig-iron production.
Hunan Valin Takes Stake In Fortescue
China's state-owned Hunan Valin is to take a 16.5 percent stake in Australia's third-largest iron ore miner, Fortescue Metals.
In addition, Fortescue is continuing negotiations with China's $US200 billion ($A308 billion) sovereign wealth fund, China Investment Corp, on a possible $3 billion hybrid funding package to fast-track its growth plans in the Pilbara. It also hopes to secure another $500 million from an institutional placement of shares.
Valin's $1.2 billion deal involves a placement of 225 million shares from Fortescue at $2.48 each and the acquisition of 275 million shares from US fund manager Harbinger Capital Partners, reducing Harbinger to a 10 per cent stake.
In addition, Fortescue is continuing negotiations with China's $US200 billion ($A308 billion) sovereign wealth fund, China Investment Corp, on a possible $3 billion hybrid funding package to fast-track its growth plans in the Pilbara. It also hopes to secure another $500 million from an institutional placement of shares.
Valin's $1.2 billion deal involves a placement of 225 million shares from Fortescue at $2.48 each and the acquisition of 275 million shares from US fund manager Harbinger Capital Partners, reducing Harbinger to a 10 per cent stake.
Japanese Copper Production Slumps
Production of copper products in Japan is now at its lowest level since August 1975 and industry officials say it will be some months before consumption picks up.
Figures from the Japan Copper and Brass Association report that output of rolled copper products fell by 45 percent year-on-year to 46,013 tonnes in January on a seasonally adjusted bases. This was a 20.7 percent decline from December. Japanese copper wire and cable shipments in January fell by 21.2 percent from a year earlier to 53,100 tonnes, the lowest since December 1975.
Japan's economy shrank in the last quarter at its fastest rate since the first oil crisis in 1974 and January's trade figures are forecast to show Japanese exports almost halved from a year earlier.
Figures from the Japan Copper and Brass Association report that output of rolled copper products fell by 45 percent year-on-year to 46,013 tonnes in January on a seasonally adjusted bases. This was a 20.7 percent decline from December. Japanese copper wire and cable shipments in January fell by 21.2 percent from a year earlier to 53,100 tonnes, the lowest since December 1975.
Japan's economy shrank in the last quarter at its fastest rate since the first oil crisis in 1974 and January's trade figures are forecast to show Japanese exports almost halved from a year earlier.
Kim Calls For DPRK Iron Ore Mine To Be World-Class Producer
State media in North Korea report calls by the country's leader, Kim Jong Il, for efforts to develop the Musan Mine in North Hamgyong province into a world-class iron ore producer, state media said on Tuesday.
During a visit to the Musan Ore Mining Complex Kim is reported to have said that the mine is rich in iron ore and is a precious asset for building a rich and powerful nation.
The visit was reported in the official Rodong Sinmun daily without giving the date of the visit.
Kim said priority must be given to prospecting and an expansion of production by updating science and technologies.
Source: Xinhua
During a visit to the Musan Ore Mining Complex Kim is reported to have said that the mine is rich in iron ore and is a precious asset for building a rich and powerful nation.
The visit was reported in the official Rodong Sinmun daily without giving the date of the visit.
Kim said priority must be given to prospecting and an expansion of production by updating science and technologies.
Source: Xinhua
China's SRB To Buy More Zinc
Reports from China suggest that the country's State Reserves Bureau (SRB) is to buy refined zinc from smelters, its second purchase in less than 2 months.
"The SRB is going to buy zinc on Wednesday," a sales manager at a large zinc smelter told Reuters news agency. The amount involved is expected to be about 100,000 tonnes though smelters are refusing to sell more because of an expectation of higher prices.
Chinese zinc prices have stayed firm after the SRB bought 59,000 tonnes of refined zinc from smelters in January as part of Beijing's plan to support local smelters due to weak demand.
Strong Chinese prices encouraged merchants to import spot refined zinc with imports up 306 percent from a year earlier.
"Smelters are willing to sell more to the SRB this time as imports are rising and prices may fall soon," a manager at another large zinc smelter said.
"The SRB is going to buy zinc on Wednesday," a sales manager at a large zinc smelter told Reuters news agency. The amount involved is expected to be about 100,000 tonnes though smelters are refusing to sell more because of an expectation of higher prices.
Chinese zinc prices have stayed firm after the SRB bought 59,000 tonnes of refined zinc from smelters in January as part of Beijing's plan to support local smelters due to weak demand.
Strong Chinese prices encouraged merchants to import spot refined zinc with imports up 306 percent from a year earlier.
"Smelters are willing to sell more to the SRB this time as imports are rising and prices may fall soon," a manager at another large zinc smelter said.
Stirling Resources Forms Partnership With NMDC
Australian miner Stirling Resources has announced a new partnership with India's biggest iron ore producer, the government-owned NMDC, less than a week after it raised $2.2 million from Austrian commodity trading group DCM DECOmetal.
The partnership has been formed to develop coking coal and iron ore investments in Australia and New Zealand, Stirling said. Stirling boss, Michael Kiernan, has other activities on the subcontinent, principally through India Resources a copper- and base-metals focused company active in the east of the country and in north-west Rajasthan.
Stirling’s deal with DCM gives the Austrian trader in ores, alloys and metals a 19.9 per cent stake in Stirling. "DCM and myself have had many years of developing projects and markets together and it's great that our partnership can continue in an exciting period of building another diversified Australian resources group," said Kiernan.
DCM and Kiernan took Consolidated Minerals from being a $10 million company to one worth $1.25 billion, that sum being paid by Ukrainian oligarch Gennadiy Bogolyubov’s Palmary Enterprises paid for the company.
Joining Stirling’s board – currently made up of Kiernan, his son James, plus Richard Poole and Paul Page, partners of boutique investment bank Arthur Phillip – will be DCM’s director of business development George Bedineishvili. Bedineishvili, a former Salomon Brothers resources analyst, was chief economic advisor to the president of Georgia, Mikheil Saakashvili.
Source: Business Spectator
The partnership has been formed to develop coking coal and iron ore investments in Australia and New Zealand, Stirling said. Stirling boss, Michael Kiernan, has other activities on the subcontinent, principally through India Resources a copper- and base-metals focused company active in the east of the country and in north-west Rajasthan.
Stirling’s deal with DCM gives the Austrian trader in ores, alloys and metals a 19.9 per cent stake in Stirling. "DCM and myself have had many years of developing projects and markets together and it's great that our partnership can continue in an exciting period of building another diversified Australian resources group," said Kiernan.
DCM and Kiernan took Consolidated Minerals from being a $10 million company to one worth $1.25 billion, that sum being paid by Ukrainian oligarch Gennadiy Bogolyubov’s Palmary Enterprises paid for the company.
Joining Stirling’s board – currently made up of Kiernan, his son James, plus Richard Poole and Paul Page, partners of boutique investment bank Arthur Phillip – will be DCM’s director of business development George Bedineishvili. Bedineishvili, a former Salomon Brothers resources analyst, was chief economic advisor to the president of Georgia, Mikheil Saakashvili.
Source: Business Spectator
Minmetals Closer To Securing Oz Minerals
The state-owned Chinese company Minmetals has confirmed its due diligence in Oz Minerals, the first of two conditions to be satisfied before its $2.6 billion takeover can continue. The second condition - an agreement with Oz's banks extending a $1.1 billion debt facility to 31 March - needs to be completed by the end of this week, although the inclusion of European banks is expected to delay confirmation of the extension until Monday.
Approval from the banks is expected to be a formality as Minmetals intends paying off all OZ's debt.
OZ and Minmetals also need to secure approval from both the Australian and Chinese governments and the all-clear from the Australian Department of Defence because the group's Prominent Hill project in South Australia is on the Woomera rocket range.
As part of its refinancing plans, OZ has said it is advanced in separate deals to sell its Martabe gold project in Indonesia and the Golden Grove base metals mine in Western Australia.
Rumours that a deal had been struck last week to sell Martabe to a syndicate led by Owen Hegarty have yet to be confirmed.
Source: Melbourne Age
Approval from the banks is expected to be a formality as Minmetals intends paying off all OZ's debt.
OZ and Minmetals also need to secure approval from both the Australian and Chinese governments and the all-clear from the Australian Department of Defence because the group's Prominent Hill project in South Australia is on the Woomera rocket range.
As part of its refinancing plans, OZ has said it is advanced in separate deals to sell its Martabe gold project in Indonesia and the Golden Grove base metals mine in Western Australia.
Rumours that a deal had been struck last week to sell Martabe to a syndicate led by Owen Hegarty have yet to be confirmed.
Source: Melbourne Age
Farallon Ships Concentrates To Asia
Vancouver-based Farallon Resources announced on Monday that it has begun shipping zinc, copper and lead concentrates from the port of Manzanillo, in Mexico, to smelters in Asia.
Farallon has been transporting concentrates to port from the G-9 mine at Campo Morado since October 2008 and shipped the first concentrate, bound for South Korea and China, on February 12.
"The commencement of vessel shipments is yet another significant milestone in the overall development of the G-9 Mine,” said president and CEO Dick Whittington.
The mine is expected to reach design capacity of 1,500 t/d this month.
In June 2008, the company signed a heads of agreement with international trading company Trafigura Beheer BV Amsterdam, covering treatment of 100% of the copper, lead and zinc concentrates produced from the G-9 project.
Source: Mining Weekly
Farallon has been transporting concentrates to port from the G-9 mine at Campo Morado since October 2008 and shipped the first concentrate, bound for South Korea and China, on February 12.
"The commencement of vessel shipments is yet another significant milestone in the overall development of the G-9 Mine,” said president and CEO Dick Whittington.
The mine is expected to reach design capacity of 1,500 t/d this month.
In June 2008, the company signed a heads of agreement with international trading company Trafigura Beheer BV Amsterdam, covering treatment of 100% of the copper, lead and zinc concentrates produced from the G-9 project.
Source: Mining Weekly
Monday, February 23, 2009
Lull In Shipping As China Expects To Finalise Iron Ore Price
Commodity shipping rates, which rose in early February giving some respite to shipping companies, are expected to fall in the near term, industry observers say, following a drop in demand for Indian iron ore from China, which is negotiating its long-term contracts with Australia and Brazil.
"We will see a temporary lull in the dry bulk freight market till China finalises its long-term contracts," said an un-named executive from a leading Indian ship chartering company. The contracts are expected to be finalised in the next ten days.
While China, the top iron ore importer in the world, sources most of its committed iron ore from Australia and Brazil, its short-term spot requirements are met by imports from India. About 80% of India's iron ore exports are to China.
According to a shipping agent, no China-bound iron ore cargo has moved out of India in the past four days. The situation has worsened so much that exporters who have committed ships and have already brought the cargo in the port are faced with a situation where buyers have withdrawn.
Another shipping agent said that until early last week the trend was of exporters taking advantage of softer freight rates and booking as much cargo as they could before the year end. This had even seen the Baltic Dry Index, the index of commodity shipping rates, to rise from its December 2008 lows.
However, the situation has changed in a week where now the end user/buyer is not confirmed and hence no fresh contracts are being signed. "We are hoping this to be a short-term event," the agent said.
The Baltic Dry Index, an index for commodity shipping rates on 26 global routes, posted three consecutive drops early last week on falling rates to haul coal and iron ore for making steel.
This, coupled with lack of credit, as the banks are not honouring their letters of credit, is making things more difficult for shipping companies.
AR Ramakrishnan, director, Essar Shipping, said China's contract negotiations will lead to a temporary weakening of the freight market. However, what is more important to look out for is the outcome of these negotiations, he said.
"Indian iron ore exporters are looking forward for an increment in the iron ore rates as compared to last year, rate of as much as $90 per tonne," he said.
An executive from a leading shipping company, which has almost 50% of its vessels on the dry bulk market, said that the freight rates for Panamax size vessels will still be better. "The short-term softening of rates will be mainly for the Capesizes as we see demand mainly coming from Panamax." Besides the Indian imports are still strong, he said.
With the commodity demand collapse leading to lack of enough cargo to fill up a Capesize, many of these vessels have been idled. This, however, worked well for the Panamax vessel rates, which rose due to demand for smaller vessel types.
China's renewed long-term contracts will get some strength back in the commodity market.
"This will be able to sail us through March with reasonable demand and better freight rates," said the ship chartering executive.
India has also seen other critical exports come down. In the past few months, exports of agri-commodity such as soyabean meal have come down along with the textile market, which has almost collapsed.
It would at least take another two quarters to judge which direction the market is moving, Ramakrishnan said.
Delivery of the number of new-built Capesizes in 2009 is also expected to put pressure on the already weak market. "If this is coupled by a drop in demand of iron ore from China, it will take the Baltic Dry Index further down," Ramakrishnan said.
Source: Daily News & Analysis, Mumbai
"We will see a temporary lull in the dry bulk freight market till China finalises its long-term contracts," said an un-named executive from a leading Indian ship chartering company. The contracts are expected to be finalised in the next ten days.
While China, the top iron ore importer in the world, sources most of its committed iron ore from Australia and Brazil, its short-term spot requirements are met by imports from India. About 80% of India's iron ore exports are to China.
According to a shipping agent, no China-bound iron ore cargo has moved out of India in the past four days. The situation has worsened so much that exporters who have committed ships and have already brought the cargo in the port are faced with a situation where buyers have withdrawn.
Another shipping agent said that until early last week the trend was of exporters taking advantage of softer freight rates and booking as much cargo as they could before the year end. This had even seen the Baltic Dry Index, the index of commodity shipping rates, to rise from its December 2008 lows.
However, the situation has changed in a week where now the end user/buyer is not confirmed and hence no fresh contracts are being signed. "We are hoping this to be a short-term event," the agent said.
The Baltic Dry Index, an index for commodity shipping rates on 26 global routes, posted three consecutive drops early last week on falling rates to haul coal and iron ore for making steel.
This, coupled with lack of credit, as the banks are not honouring their letters of credit, is making things more difficult for shipping companies.
AR Ramakrishnan, director, Essar Shipping, said China's contract negotiations will lead to a temporary weakening of the freight market. However, what is more important to look out for is the outcome of these negotiations, he said.
"Indian iron ore exporters are looking forward for an increment in the iron ore rates as compared to last year, rate of as much as $90 per tonne," he said.
An executive from a leading shipping company, which has almost 50% of its vessels on the dry bulk market, said that the freight rates for Panamax size vessels will still be better. "The short-term softening of rates will be mainly for the Capesizes as we see demand mainly coming from Panamax." Besides the Indian imports are still strong, he said.
With the commodity demand collapse leading to lack of enough cargo to fill up a Capesize, many of these vessels have been idled. This, however, worked well for the Panamax vessel rates, which rose due to demand for smaller vessel types.
China's renewed long-term contracts will get some strength back in the commodity market.
"This will be able to sail us through March with reasonable demand and better freight rates," said the ship chartering executive.
India has also seen other critical exports come down. In the past few months, exports of agri-commodity such as soyabean meal have come down along with the textile market, which has almost collapsed.
It would at least take another two quarters to judge which direction the market is moving, Ramakrishnan said.
Delivery of the number of new-built Capesizes in 2009 is also expected to put pressure on the already weak market. "If this is coupled by a drop in demand of iron ore from China, it will take the Baltic Dry Index further down," Ramakrishnan said.
Source: Daily News & Analysis, Mumbai
Jhardkhand Blames Central Agencies Over Poor Iron Ore Quality
The Jharkhand state mines and geology department has blamed central government agencies such as Geological Survey of India (GSI), the Indian Bureau of Mines (IBM) and Mineral Exploration Corporation of India Limited (MECL) for undermining the interests of Jharkhand.
Officials of the department feel that different exploration agencies are not adopting uniform standards for assessing the quality and the quantum of mineral reserves in the state. The officials are not even willing to listen to the justifications offered by the experts.
According to the minutes of the Eighth Jharkhand State Geological Programme board meeting, the IBM representative failed to give satisfactory replies when the then department secretary, K.K. Khandelwal, asked him why the quantum of mineral reserves usually decreased in comparison with the original survey report.
The MECL, too, reportedly failed to justify why the specific density of haematite (iron ore) available in the state is considered as 3.5. The specific density of good quality haematite used in standard steel plants ought to be between 4 and 4.5.
Both these objections are of very serious nature considering the perception that the mafia, in connivance with corrupt officials, purportedly downgrade the quality and quantum of mineral reserves in different areas of the state. Thereafter, they avail of huge mineral reserves at throwaway prices and make money through illegal activities.
Senior geological scientist P. Tiru, who represented IBM at the meeting, however, argued that the quantum of mineral reserves projected in the general survey report and the detailed survey report usually vary. The area of influence, too, is very important.
The detailed surveys are carried out either by the GSI or companies involved in mining operations. The “required qualified person” prepares the mining plan. The IBM, after spot inspection and completing other necessary procedures, grants certificates.
“The total area never becomes the mainland zone. The quantum of reserves also varies from pit to pit. I tried my best to explain these things to the department officials but they were not willing to buy the explanations. Moreover, our organisation is not involved in mining explorations. Our prime responsibility is to ensure execution of the provision of Mineral Conservation Development Rules and Environmental Impact Assessment,” Tiru added.
A senior scientist of MECL argued that the specific density of haematite lumps and fines is bound to vary. The average specific density of iron ore found in a particular area is determined on the basis of sample analysis.
At the meeting, the GSI had complained that the mining explorations being carried out by it were never published in the gazette.
Source: The Telegraph, Calcutta
Officials of the department feel that different exploration agencies are not adopting uniform standards for assessing the quality and the quantum of mineral reserves in the state. The officials are not even willing to listen to the justifications offered by the experts.
According to the minutes of the Eighth Jharkhand State Geological Programme board meeting, the IBM representative failed to give satisfactory replies when the then department secretary, K.K. Khandelwal, asked him why the quantum of mineral reserves usually decreased in comparison with the original survey report.
The MECL, too, reportedly failed to justify why the specific density of haematite (iron ore) available in the state is considered as 3.5. The specific density of good quality haematite used in standard steel plants ought to be between 4 and 4.5.
Both these objections are of very serious nature considering the perception that the mafia, in connivance with corrupt officials, purportedly downgrade the quality and quantum of mineral reserves in different areas of the state. Thereafter, they avail of huge mineral reserves at throwaway prices and make money through illegal activities.
Senior geological scientist P. Tiru, who represented IBM at the meeting, however, argued that the quantum of mineral reserves projected in the general survey report and the detailed survey report usually vary. The area of influence, too, is very important.
The detailed surveys are carried out either by the GSI or companies involved in mining operations. The “required qualified person” prepares the mining plan. The IBM, after spot inspection and completing other necessary procedures, grants certificates.
“The total area never becomes the mainland zone. The quantum of reserves also varies from pit to pit. I tried my best to explain these things to the department officials but they were not willing to buy the explanations. Moreover, our organisation is not involved in mining explorations. Our prime responsibility is to ensure execution of the provision of Mineral Conservation Development Rules and Environmental Impact Assessment,” Tiru added.
A senior scientist of MECL argued that the specific density of haematite lumps and fines is bound to vary. The average specific density of iron ore found in a particular area is determined on the basis of sample analysis.
At the meeting, the GSI had complained that the mining explorations being carried out by it were never published in the gazette.
Source: The Telegraph, Calcutta
Fortescue Wants Seat At Iron Ore Talks
The financial website, Morning Star, has reported that Fortescue Metals Group is expecting to participate in annual benchmark iron ore price negotiations once it completes a staged expansion to 120 million tonnes of annual production.
Mr Graeme Rowley ED of FMG said that "When you become big enough, you are in a position to influence those discussions."
Fortescue was reported to have previously refused a seat at the annual contract talks.
Source: Morningstar.com
Mr Graeme Rowley ED of FMG said that "When you become big enough, you are in a position to influence those discussions."
Fortescue was reported to have previously refused a seat at the annual contract talks.
Source: Morningstar.com
China Iron Ore Import Price Unchanged For A Second Week
The Beijing Antaike Information Development Co reports that the cash price of iron ore imported by China remain unchanged for a second week at Qingdao port at Rmb690 a tonne ($101).
Prices have risen by 28 percent since 31 October.
Prices have risen by 28 percent since 31 October.
Foundation Stone Laid At Yemen Zinc Mine
The Yemen Prime Minister Ali Mujawar laid the foundation stone on Monday for a zinc mine in the Sulb Mountain in the Nehm area of the country. It is Yemen's first mine and is being built at a cost estimated at $200 million.
The Yemeni Authority for Geological Survey and Mineral Resources Board Ismael al-Janad and the director of the company which will carry out the project said that output could reach 80,000 tons per annum and the project will provide 400 jobs.
They indicated that the project would include the construction of 400 housing units and that the first shipment of Yemeni zinc would be exported in middle of next year.
Mr Mujawar indicated that the government put great store on this project in developing mineral industries in the area of Jawf, Mareb and Shabwa.
He said that any security violations would lead to a halt in the project and a negative effect on the future of investment in the mineral field. Yemen's mineral wealth was still a prime choice for developing the national economy.
The Jabal Sulb Company Limited began studies in the area in 1999.
The Yemeni Authority for Geological Survey and Mineral Resources Board Ismael al-Janad and the director of the company which will carry out the project said that output could reach 80,000 tons per annum and the project will provide 400 jobs.
They indicated that the project would include the construction of 400 housing units and that the first shipment of Yemeni zinc would be exported in middle of next year.
Mr Mujawar indicated that the government put great store on this project in developing mineral industries in the area of Jawf, Mareb and Shabwa.
He said that any security violations would lead to a halt in the project and a negative effect on the future of investment in the mineral field. Yemen's mineral wealth was still a prime choice for developing the national economy.
The Jabal Sulb Company Limited began studies in the area in 1999.
Noranda Cuts Zinc Production
Noranda Income Fund has said that it will reduce production of sulphuric acid and zinc by approximately 20 per cent in March due to a lack of storage capacity.
Noranda's sales agent,Xstrata Canada Corp, has given notice that it is unable to arrange for the temporary storage of sulphuric acid in quantities equal to the current rate of production.
The Noranda Trust, which produces zinc and by-products at the CEZinc plant in Salaberry-de-Valleyfield, Quebec, said it will reduce production by 4,800 tonnes of zinc and 8,000 tonnes of sulphuric acid since its sulphuric acid storage capacity is almost full.
"The current economic conditions are very challenging, and the traditional purchasers of the fund's sulphuric acid have restricted their purchases because of cutbacks in their order books," Noranda said in a statement. "The reduction in production will negatively impact the fund's profitability."
Source: Canadian Press
Noranda's sales agent,Xstrata Canada Corp, has given notice that it is unable to arrange for the temporary storage of sulphuric acid in quantities equal to the current rate of production.
The Noranda Trust, which produces zinc and by-products at the CEZinc plant in Salaberry-de-Valleyfield, Quebec, said it will reduce production by 4,800 tonnes of zinc and 8,000 tonnes of sulphuric acid since its sulphuric acid storage capacity is almost full.
"The current economic conditions are very challenging, and the traditional purchasers of the fund's sulphuric acid have restricted their purchases because of cutbacks in their order books," Noranda said in a statement. "The reduction in production will negatively impact the fund's profitability."
Source: Canadian Press
African Rainbow To Spend R9 Billion In Next Three Years
From Creamer's Mining Weekly
Cash-flush diversified mining company African Rainbow Minerals (Arm) would spend R9-billion in capital in the next three years, Arm executive chairperson Patrice Motsepe said on Monday.
Although that was down on the R13-billion that the company was scheduled to spend to June 2011, it reflected the "cautious-optimism" mode in which Arm currently found itself, as it partnered the large Brazil-based Vale in Africa and spoke of "its ambition being far greater than its size".
Motsepe said that the strategy would be to grow the company cautiously, with its cash having increased to R3.7-billion from R1.2-billion a year ago and after having trebled its headline earnings to R2.2-billion in the six months to December 31.
"Even if the current difficult times continue, we will still be profitable," Motsepe said, adding that it was imperative that the company continued its growth strategy and exploit greater acquisition choices, while targeting only those that were "absolutely irresistible".
Overtures had been made by several companies that were in "extreme distress", but Arm would only consider acquiring assets that were "extremely attractive".
"We have enough money to fund our growth and the future looks good," he said.
The joint venture with Vale had laid a foundation for Arm to take part in new activities in the Democratic Republic of Congo, and Motsepe pointed out that Vale had $15-billion in cash and opportunities were opening up for both companies, not only on the continent, but also in South Africa itself.
"We will be engaging Vale to look at how we can continue to grow," Motsepe said.
Arm CEO André Wilkens told Mining Weekly Online that Vale, which was producing some 400,000 t/y of copper, had singled out Africa as one of its growth areas and was providing Arm with expertise that it did not have.
Wilkens said that the partnership with Vale was based on Arm matching its business relationships in Africa with Vale's skills and expertise and in that way the two companies would be able to grow their African footprint together.
Wilkens said that Arm's coal partnership with Xstrata was another that was poised to grow the company on the back of coal prices, which he predicted would continue to be attractive.
The manganese partnership with Assmang, which contributed 66% of the company's earnings before interest and tax in the six months to December, would continue to yield into future, despite the fall in manganese prices and volumes.
Although there were concerns about the spot price of manganese falling to $6/ manganese unit, Wilkens reminded shareholders that the company did exceedingly well in the previous financial year when the spot price of manganese was only $5/ manganese unit.
"With Assore and Assmang, we have some of the best quality manganese available on the globe and it is always used as a blend material, and that puts us in a very strong position going forward," Wilkens told Mining Weekly Online.
Moreover, the price of $6/ manganese unit would put many of the smaller manganese miners under pressure, and create space for higher-margin participants like Arm.
"Our margins at the current spot prices are very significant," he added.
The company's new Khumani iron-ore mine was continuing to rampup and even at flat iron-ore prices was offering good margins of profit.
"Iron-ore is going to be a very nice growth area," Wilkens said.
There was no doubt that following the start of implementation of the Chinese stimulus package in October, the outlook for iron-ore demand improved with one of the Chinese banks having lent more money to microbusiness in the first 20 days of January than in the previous two months.
The Chinese economy was rising and China had announced several transport and other infrastructure programmes that were improving the outlook for iron-ore, manganese and copper.
The company's cutback on chrome production had been firm, with only two or three furnaces still operating.
"At the current prices, just about nobody can make money," Wilkens said, but the company was managing to sell some chrome and was reviewing its chrome position at three-monthly intervals.
He said that, of the 48 ferrochrome furnaces in South Africa, only a mere handful was in operation.
Producers have responded exceedingly well to the fall off in demand, which would have the effect of bringing the ferrochrome market back into equilibrium "soon".
Platinum production had been reduced 10% and the company was in the fortunate position of not being over reliant on the US and more reliant on Europe.
His view was that a platinum price $1 100/oz to $1 200/oz was possible in the medium term.
On iron-ore logistics, Arm executive director Jan Steenkamp told Mining Weekly Online that the company had signed a ten-million-ton-a-year, 20-year contract with Transnet. Another four-million-ton was to be added to the ten-million tons and a contract for that was expected to be finalised in the next few weeks.
Capital of R1,2-billion had been approved for the next phase of expansion, which would be for those four-million tons export a year, plus two-million tons a year, taking the capacity of the Khumani mine to 16-million tons a year.
The contract with Transnet in terms of the first rampup of the next four-million tons of export iron-ore would commence on July 1, 2012.
“We are on site, doing surface excavation for the next phase,” Steenkamp said.
Even with expected price reductions, the project would still give the shareholders an acceptable return.
Iron-ore was poised to sell in slightly higher volume in 2009, and the company had no reason to offer any price discounts at this stage.
On a possible new rail public-private partnership with Transnet, Steenkamp said that new models were being discussed and all roleplayers were participating in future alternatives, but no decisiona had as yet been made.
On manganese, Steenkamp said that sales volumes of manganese had declined, but production was being maintained in the different areas and different grades, because the company blended into the market.
Manganese price negotiations were also now under way and it was understood that there would be a reduction in manganese prices.
Cash-flush diversified mining company African Rainbow Minerals (Arm) would spend R9-billion in capital in the next three years, Arm executive chairperson Patrice Motsepe said on Monday.
Although that was down on the R13-billion that the company was scheduled to spend to June 2011, it reflected the "cautious-optimism" mode in which Arm currently found itself, as it partnered the large Brazil-based Vale in Africa and spoke of "its ambition being far greater than its size".
Motsepe said that the strategy would be to grow the company cautiously, with its cash having increased to R3.7-billion from R1.2-billion a year ago and after having trebled its headline earnings to R2.2-billion in the six months to December 31.
"Even if the current difficult times continue, we will still be profitable," Motsepe said, adding that it was imperative that the company continued its growth strategy and exploit greater acquisition choices, while targeting only those that were "absolutely irresistible".
Overtures had been made by several companies that were in "extreme distress", but Arm would only consider acquiring assets that were "extremely attractive".
"We have enough money to fund our growth and the future looks good," he said.
The joint venture with Vale had laid a foundation for Arm to take part in new activities in the Democratic Republic of Congo, and Motsepe pointed out that Vale had $15-billion in cash and opportunities were opening up for both companies, not only on the continent, but also in South Africa itself.
"We will be engaging Vale to look at how we can continue to grow," Motsepe said.
Arm CEO André Wilkens told Mining Weekly Online that Vale, which was producing some 400,000 t/y of copper, had singled out Africa as one of its growth areas and was providing Arm with expertise that it did not have.
Wilkens said that the partnership with Vale was based on Arm matching its business relationships in Africa with Vale's skills and expertise and in that way the two companies would be able to grow their African footprint together.
Wilkens said that Arm's coal partnership with Xstrata was another that was poised to grow the company on the back of coal prices, which he predicted would continue to be attractive.
The manganese partnership with Assmang, which contributed 66% of the company's earnings before interest and tax in the six months to December, would continue to yield into future, despite the fall in manganese prices and volumes.
Although there were concerns about the spot price of manganese falling to $6/ manganese unit, Wilkens reminded shareholders that the company did exceedingly well in the previous financial year when the spot price of manganese was only $5/ manganese unit.
"With Assore and Assmang, we have some of the best quality manganese available on the globe and it is always used as a blend material, and that puts us in a very strong position going forward," Wilkens told Mining Weekly Online.
Moreover, the price of $6/ manganese unit would put many of the smaller manganese miners under pressure, and create space for higher-margin participants like Arm.
"Our margins at the current spot prices are very significant," he added.
The company's new Khumani iron-ore mine was continuing to rampup and even at flat iron-ore prices was offering good margins of profit.
"Iron-ore is going to be a very nice growth area," Wilkens said.
There was no doubt that following the start of implementation of the Chinese stimulus package in October, the outlook for iron-ore demand improved with one of the Chinese banks having lent more money to microbusiness in the first 20 days of January than in the previous two months.
The Chinese economy was rising and China had announced several transport and other infrastructure programmes that were improving the outlook for iron-ore, manganese and copper.
The company's cutback on chrome production had been firm, with only two or three furnaces still operating.
"At the current prices, just about nobody can make money," Wilkens said, but the company was managing to sell some chrome and was reviewing its chrome position at three-monthly intervals.
He said that, of the 48 ferrochrome furnaces in South Africa, only a mere handful was in operation.
Producers have responded exceedingly well to the fall off in demand, which would have the effect of bringing the ferrochrome market back into equilibrium "soon".
Platinum production had been reduced 10% and the company was in the fortunate position of not being over reliant on the US and more reliant on Europe.
His view was that a platinum price $1 100/oz to $1 200/oz was possible in the medium term.
On iron-ore logistics, Arm executive director Jan Steenkamp told Mining Weekly Online that the company had signed a ten-million-ton-a-year, 20-year contract with Transnet. Another four-million-ton was to be added to the ten-million tons and a contract for that was expected to be finalised in the next few weeks.
Capital of R1,2-billion had been approved for the next phase of expansion, which would be for those four-million tons export a year, plus two-million tons a year, taking the capacity of the Khumani mine to 16-million tons a year.
The contract with Transnet in terms of the first rampup of the next four-million tons of export iron-ore would commence on July 1, 2012.
“We are on site, doing surface excavation for the next phase,” Steenkamp said.
Even with expected price reductions, the project would still give the shareholders an acceptable return.
Iron-ore was poised to sell in slightly higher volume in 2009, and the company had no reason to offer any price discounts at this stage.
On a possible new rail public-private partnership with Transnet, Steenkamp said that new models were being discussed and all roleplayers were participating in future alternatives, but no decisiona had as yet been made.
On manganese, Steenkamp said that sales volumes of manganese had declined, but production was being maintained in the different areas and different grades, because the company blended into the market.
Manganese price negotiations were also now under way and it was understood that there would be a reduction in manganese prices.
Mulfira Copper Mine Put Under Maintenance
Mopani Copper Mines, Zambia's second-largest copper and cobalt producer, is to temporarily close its Mufulira mine next month in a bid to cut costs. The mine will be put under maintenance but jobs will be cut as a result.
MCM's other units - Nkana Mine and the Mufulira Copper smelter - are expected to keep operating normally and the company expects to rely on revenues from the smelter, which treats concentrates from mines in Zambia and from Congo's Katanga province. Mufulira mine accounts for about 40% of the company's copper output.
See also
MCM's other units - Nkana Mine and the Mufulira Copper smelter - are expected to keep operating normally and the company expects to rely on revenues from the smelter, which treats concentrates from mines in Zambia and from Congo's Katanga province. Mufulira mine accounts for about 40% of the company's copper output.
See also
China's Steel Makers Profits Down 43 Per Cent In 2008
The China Iron and Steel Association (CISA) said on Monday that the aggregate net profit of 71 medium-sized and large steel producers fell 43 percent in 2008 as weak demand drove down prices.
Net profit was 84.6 billion yuan (12.4 billion U.S. dollars), CISA said, while sales climbed 24.7 percent year-on-year to 2.57 trillion yuan.
The 71 producers earned 101 billion yuan in net profit in the first half of 2008, but they lost 16.4 billion yuan in the second half as costs rose while selling prices declined.
CISA also said 15 steel producers recorded full-year losses totaling 8.5 billion yuan.
Source: Xinhua
Net profit was 84.6 billion yuan (12.4 billion U.S. dollars), CISA said, while sales climbed 24.7 percent year-on-year to 2.57 trillion yuan.
The 71 producers earned 101 billion yuan in net profit in the first half of 2008, but they lost 16.4 billion yuan in the second half as costs rose while selling prices declined.
CISA also said 15 steel producers recorded full-year losses totaling 8.5 billion yuan.
Source: Xinhua
Losses Increase At International Ferro
A slide in sales volumes and lower ferrochrome prices resulted in a big loss for International Ferro in the half year to December.
Revenues rose in the six months to R526m compared R367m last year, but were down 66% on the six months to June. Losses before tax came were R26.8m, up from R23.8m this time last year.
Production in the half fell slightly to 90,759 tonnes, but sales fell from 61,900 tonnes to 49,400 tonnes.
"The company has cut production, is controlling costs and conserving cash, but at the same time ensuring the operations are in good shape for the return of demand for ferrochrome," chief executive David Kovarsky said.
He added that market conditions appear to have begun to stabilise with ferrochrome inventories declining and spot prices stabilising, although large chrome ore stockpiles are a concern
The group added that its furnaces expected to be available to restart production from 1 April 2009, A slide in sales volumes and lower ferrochrome prices resulted in another big loss for International Ferro in the half year to December.
Revenues did rise in the six months compared with last year to R526m, from R367m, but were down 66% on the prior six months to June. Losses before tax came in at R26.8m, up from R23.8m this time last year.
Production in the half fell slightly to 90,759 tonnes, but sales fell from 61,900 tonnes to 49,400 tonnes.
"The company has cut production, is controlling costs and conserving cash, but at the same time ensuring the operations are in good shape for the return of demand for ferrochrome," chief executive David Kovarsky said.
He added that market conditions appear to have begun to stabilise with ferrochrome inventories declining and spot prices stabilising, although large chrome ore stockpiles are a concern
The group added its furnaces expected to be available to restart production, depending on market conditions, from 1 April 2009. A full ramp-up was possible within 4 weeks. Inventory level at 31 January 2009 was 33,338 tonnes.
Revenues rose in the six months to R526m compared R367m last year, but were down 66% on the six months to June. Losses before tax came were R26.8m, up from R23.8m this time last year.
Production in the half fell slightly to 90,759 tonnes, but sales fell from 61,900 tonnes to 49,400 tonnes.
"The company has cut production, is controlling costs and conserving cash, but at the same time ensuring the operations are in good shape for the return of demand for ferrochrome," chief executive David Kovarsky said.
He added that market conditions appear to have begun to stabilise with ferrochrome inventories declining and spot prices stabilising, although large chrome ore stockpiles are a concern
The group added that its furnaces expected to be available to restart production from 1 April 2009, A slide in sales volumes and lower ferrochrome prices resulted in another big loss for International Ferro in the half year to December.
Revenues did rise in the six months compared with last year to R526m, from R367m, but were down 66% on the prior six months to June. Losses before tax came in at R26.8m, up from R23.8m this time last year.
Production in the half fell slightly to 90,759 tonnes, but sales fell from 61,900 tonnes to 49,400 tonnes.
"The company has cut production, is controlling costs and conserving cash, but at the same time ensuring the operations are in good shape for the return of demand for ferrochrome," chief executive David Kovarsky said.
He added that market conditions appear to have begun to stabilise with ferrochrome inventories declining and spot prices stabilising, although large chrome ore stockpiles are a concern
The group added its furnaces expected to be available to restart production, depending on market conditions, from 1 April 2009. A full ramp-up was possible within 4 weeks. Inventory level at 31 January 2009 was 33,338 tonnes.
Sumitomo Seeks Stake In Copper Mines
Sumitomo Metal Mining Co Ltd, Japan's top producer of nickel and its second-largest copper producer, said on Monday that it plans to take a stake in at least one copper mine over the next 13 months. This is in line with the company's strategy to gain more control over the source of its ore. The company currently extracts 40 percent of its copper from its own mines and aims to boost that to 70 percent by the end of March 2014 in a bid to improve profitability and secure a stable supply of raw materials.
"We aim to take a stake in at least one profitable copper mine in the next business year," Shigeru Takeuchi, Sumitomo Metal Mining's general manager, told a strategy briefing.
Despite the fall in global commodities prices, the company has no plans to change its expansion programmes although it has been forced to cut metals production as the economic crisis cuts deeply into demand.
The company's second nickel production line and an expanded refinery plant in the Philippines will start up later this year as planned.
Demand for the company's copper has fallen 10-15 percent since the start of the year, although spot sales to China were seeing some recovery.
However, Mr Takeuchi said prospects for nickel and ferro-nickel, which has dropped by 25 to over 30 percent, were less encouraging, although he acknowledged that prospects remained bleak.
An announcement of its metals production is due to be made on April 1, he said.
"We aim to take a stake in at least one profitable copper mine in the next business year," Shigeru Takeuchi, Sumitomo Metal Mining's general manager, told a strategy briefing.
Despite the fall in global commodities prices, the company has no plans to change its expansion programmes although it has been forced to cut metals production as the economic crisis cuts deeply into demand.
The company's second nickel production line and an expanded refinery plant in the Philippines will start up later this year as planned.
Demand for the company's copper has fallen 10-15 percent since the start of the year, although spot sales to China were seeing some recovery.
However, Mr Takeuchi said prospects for nickel and ferro-nickel, which has dropped by 25 to over 30 percent, were less encouraging, although he acknowledged that prospects remained bleak.
An announcement of its metals production is due to be made on April 1, he said.
Indonesia Forecasting Big Rise In Tin Output
Indonesia's tin output for 2009 tin output is projected to rise to 105,000 tonnes - a 47 percent increase over last year, a document from the mines and energy ministry showed on Monday. The figure exceeds a government plan to cap output below 100,000 tonnes.
Last month a mining and energy ministry official said the government aimed to cut the target cap on tin output this year due to slowing global demand that has triggered falling prices.
The cap would reduce environmental damage and prolong the life of the tin mines, however Bambang Setiawan, director general of coal, minerals and geothermal said on 27 January that the government would assess market developments before deciding the new target.
Government officials were not immediately available for comment on Monday.
The ministry's document also forecast copper production would increase to 826,370 tonnes this year from 597,070 in 2008. Gold production was forecast to rise to 99.34 tonnes from 58.83 tonnes last year and nickel-in-matte output was projected to increase to 86,180 tonnes from 73,360 tonnes in 2009.
Coal production expected to be flat at 230 million tonnes in 2009 against 229.18 million tonnes a year ago.
Last month a mining and energy ministry official said the government aimed to cut the target cap on tin output this year due to slowing global demand that has triggered falling prices.
The cap would reduce environmental damage and prolong the life of the tin mines, however Bambang Setiawan, director general of coal, minerals and geothermal said on 27 January that the government would assess market developments before deciding the new target.
Government officials were not immediately available for comment on Monday.
The ministry's document also forecast copper production would increase to 826,370 tonnes this year from 597,070 in 2008. Gold production was forecast to rise to 99.34 tonnes from 58.83 tonnes last year and nickel-in-matte output was projected to increase to 86,180 tonnes from 73,360 tonnes in 2009.
Coal production expected to be flat at 230 million tonnes in 2009 against 229.18 million tonnes a year ago.
Record Profits For OM Holdings
Australian minerals and metals firm OM Holdings reported a record full year profit of $115.6 million, more than double its previous result.
Sales revenues increased 98 per cent to $574.1 million and operating profit was up 121 per cent to $243.1 million.
Each of the company's three divisions had contributed to the solid result. The Bootu Creek manganese mine in the Northern Territory, the Singapore based marketing, trading and logistics business and the Qinzhou smelting business in China all achieved record operating profits after tax.
Chief executive Peter Toth said a revised production plan at Bootu Creek and ongoing cost control initiatives would position the company well for a recovery in the manganese market.
“While the outlook for the steel industry remains volatile and uncertain, we have seen a recovery in Chinese manganese alloy and ore demand during the first quarter,” he said.
“This has been reflected in our ability to secure more than 150,000 tonnes of contracted sales of manganese ore for the January-March Quarter of 2009."
The company is looking to expand production at Bootu Creek to 1.5 million tonnes a year on a sustained recovery in global markets.
“In addition, we are continuing to aggressively pursue inorganic growth opportunities that will allow us to diversify our product and geographical exposure in the steel-making raw materials segment,” Mr Toth said.
The company said it had cash reserves of $119.3 million with virtually no debt.
Source: The West Australian
Sales revenues increased 98 per cent to $574.1 million and operating profit was up 121 per cent to $243.1 million.
Each of the company's three divisions had contributed to the solid result. The Bootu Creek manganese mine in the Northern Territory, the Singapore based marketing, trading and logistics business and the Qinzhou smelting business in China all achieved record operating profits after tax.
Chief executive Peter Toth said a revised production plan at Bootu Creek and ongoing cost control initiatives would position the company well for a recovery in the manganese market.
“While the outlook for the steel industry remains volatile and uncertain, we have seen a recovery in Chinese manganese alloy and ore demand during the first quarter,” he said.
“This has been reflected in our ability to secure more than 150,000 tonnes of contracted sales of manganese ore for the January-March Quarter of 2009."
The company is looking to expand production at Bootu Creek to 1.5 million tonnes a year on a sustained recovery in global markets.
“In addition, we are continuing to aggressively pursue inorganic growth opportunities that will allow us to diversify our product and geographical exposure in the steel-making raw materials segment,” Mr Toth said.
The company said it had cash reserves of $119.3 million with virtually no debt.
Source: The West Australian
Fortescue Shares Suspended
Fortescue Metals Group Ltd, Australia's third-biggest iron ore miner, plans to raise an unspecified amount of capital after requested a trading suspension on its shares.
Fortescue, did not give any further details after trading in its shares was suspended placed in a trading halt, which will remain in place until either the company makes an announcement, or normal trading begins on February 25.
Company spokesperson Cameron Morse would not confirm or deny a report in the The Australian Financial Review that it would raise a minimum of $500 million from institutions including Chinese steel maker Hunan Valin Iron and Steel.
The fund raising is expected to underpin the expansion of Fortescue's iron ore operations in the Pilbara, the paper says. The company wants to more than double its iron ore production capacity to 120 million tonnes a year.
Valin is reportedly in talks to buy some of Harbinger Capital's near-16 per cent stake in Fortescue.
Harbinger, a long-time investor in Fortescue is expected to sell between 5-10 per cent to the Chinese group.
Source: Business Spectator
Fortescue, did not give any further details after trading in its shares was suspended placed in a trading halt, which will remain in place until either the company makes an announcement, or normal trading begins on February 25.
Company spokesperson Cameron Morse would not confirm or deny a report in the The Australian Financial Review that it would raise a minimum of $500 million from institutions including Chinese steel maker Hunan Valin Iron and Steel.
The fund raising is expected to underpin the expansion of Fortescue's iron ore operations in the Pilbara, the paper says. The company wants to more than double its iron ore production capacity to 120 million tonnes a year.
Valin is reportedly in talks to buy some of Harbinger Capital's near-16 per cent stake in Fortescue.
Harbinger, a long-time investor in Fortescue is expected to sell between 5-10 per cent to the Chinese group.
Source: Business Spectator
China's Iron Ore, Refined Copper Imports Fall, Nickel Rises
Statistics released by China's General Administration of Customs on Monday show that imports of iron ore and refined copper both fell in January.
Iron ore imports fell by 5.4% over the previous month to 32.65 million metric tons compared to 34.53 million tons in December. Year-on-year, the fall was 11.2% from36.81 million tonnes in January 2008.
Imports of refined copper fell by 14.7 percent to 180,490 tonnes in January compared to 211,527 tonnes in December.
China's exports of primary aluminium was just 82 tonnes in January, down from December's 46,364 tonnes.
China is the world's top consumer of copper and aluminium.
Howver, imports of refined nickel were up 41.2% to 7,622 tonnes in January compared to 10,765 tonnes in December.
Iron ore imports fell by 5.4% over the previous month to 32.65 million metric tons compared to 34.53 million tons in December. Year-on-year, the fall was 11.2% from36.81 million tonnes in January 2008.
Imports of refined copper fell by 14.7 percent to 180,490 tonnes in January compared to 211,527 tonnes in December.
China's exports of primary aluminium was just 82 tonnes in January, down from December's 46,364 tonnes.
China is the world's top consumer of copper and aluminium.
Howver, imports of refined nickel were up 41.2% to 7,622 tonnes in January compared to 10,765 tonnes in December.
Sunday, February 22, 2009
Japanese Shipbuilding Orders Drop 69 Per Cent
Shipyards in Japan, the world's third-largest shipbuilding nation, reported 69 percent fewer orders in January and forecast a third year of declines in 2009 as the global recession slashes demand for new vessels.
Orders were received for 193,700 compensated gross tons last month, the Japan Ship Exporters Association said in an e-mailed statement. The yards, including Mitsubishi Heavy Industries Ltd. and Mitsui Engineering & Shipbuilding Co., had orders for 625,823 million tons a year earlier.
The deepening financial crisis has dried up funds and global demand for commodities, prompting owners and operators of vessels to hold back purchases. The Baltic Dry Index, a benchmark of demand for shipping dry goods, fell 75 percent in the past year.
"The serious global economic recession has slowed marine transportation," Masamoto Tazaki, chairman of the 20-member Shipbuilders' Association of Japan, said today at a press conference in Tokyo. "The industry will have to be ready for sluggish orders for new ships."
There have been no reports of vessel order cancellations at Japanese shipyards even as the number of contracts falls, he said.
Japanese yards will seek a drop in steel plate prices for contracts starting April 1 as demand for the metal falls from carmakers and machinery companies and prices decline for steelmaking commodities such as coking coal.
"It's natural that steel prices should go down substantially, as prices of the raw materials are declining," Tazaki said.
Japanese steelmakers want a 67 percent cut in the annual contract price for coking coal because of a slump in global demand for the alloy, Macquarie Group Ltd. analysts said in a report yesterday.
Compensated gross ton is an industry measure of ship size, the time required and materials used in production.
Source: Taiwan News
Orders were received for 193,700 compensated gross tons last month, the Japan Ship Exporters Association said in an e-mailed statement. The yards, including Mitsubishi Heavy Industries Ltd. and Mitsui Engineering & Shipbuilding Co., had orders for 625,823 million tons a year earlier.
The deepening financial crisis has dried up funds and global demand for commodities, prompting owners and operators of vessels to hold back purchases. The Baltic Dry Index, a benchmark of demand for shipping dry goods, fell 75 percent in the past year.
"The serious global economic recession has slowed marine transportation," Masamoto Tazaki, chairman of the 20-member Shipbuilders' Association of Japan, said today at a press conference in Tokyo. "The industry will have to be ready for sluggish orders for new ships."
There have been no reports of vessel order cancellations at Japanese shipyards even as the number of contracts falls, he said.
Japanese yards will seek a drop in steel plate prices for contracts starting April 1 as demand for the metal falls from carmakers and machinery companies and prices decline for steelmaking commodities such as coking coal.
"It's natural that steel prices should go down substantially, as prices of the raw materials are declining," Tazaki said.
Japanese steelmakers want a 67 percent cut in the annual contract price for coking coal because of a slump in global demand for the alloy, Macquarie Group Ltd. analysts said in a report yesterday.
Compensated gross ton is an industry measure of ship size, the time required and materials used in production.
Source: Taiwan News
Australians To Set Iron Ore Benchmark Price
Australian iron ore miners, Rio Tinto and BHP Billiton are expected to set the benchmark iron ore price this year after Vale of Brazil, who have trditionally set the price, said it would yield to its Australian rivals.
Vale's decision will come as a surprise to the market, which had speculated it would settle the price early - and perhaps at a lower level than Australian miners had hoped - in an effort to increase sales, since its mines are operating below capacity.
Most analysts expect the benchmark price will fall by 20 to 30 per cent.
But at an annual results briefing in Rio de Janeiro on Friday, the head of Vale's ferrous division, Jose Carlos Martins, said his company had decided to change tactics this year.
"We are used to being the price-setter, but this year we have decided to wait and see what will be fixed between the Australians and Chinese, because I think China is now the main seaborne market and the Australians are the biggest suppliers [to China] and are closer, so we will tend to let them fix the price," he said.
Vale last year received price increases of 65 to 71 per cent for its iron ore, but the Australian miners held out for an 85 per cent increase, which took into account the lower cost of shipping ore from Australia to Asia.
Vale later tried to increase the price of its ore by 10 per cent, but customers rejected that move as the extent of the global financial crisis became apparent.
"Last year we [set the price] and we know what happened," Mr Martins said. "[Rio and BHP] didn't follow the benchmark. Customers accepted a higher price, and we had all of the problems that everybody knows. There is no proposal on the table from Vale. We are only waiting for what will come. If it is good, we will follow. If it is not good, we will do what [Rio and BHP] did last year."
Among the world's three largest iron ore miners, Vale has been the staunchest defender of the benchmark system. BHP is trying to replace the traditional pricing system with index-linked contracts that better reflect spot market movements, while Rio prefers a mix of benchmark, hybrid and spot sales.
Mr Martins said Vale's position as the traditional price-setter had made it a target during the negotiating season.
"Tactically speaking, many customers reduce their inventories to increase their bargaining power," he said.
Vale has been particularly hard hit by the financial crisis since its main customers are in Europe and Brazil, regions that have suffered much larger steel production cuts than China.
Vale's chief executive, Roger Agnelli, said its largest iron ore customer, ArcelorMittal, had not bought a single tonne of iron ore from the miner since October, but it was expected to accept shipments from April.
To partially compensate for lost sales in Europe and Brazil, Vale has increased shipments to China. Vale expects to ship a record 30 million tonnes to China during the present quarter, and it is doing so at the full benchmark price without reimbursing customers for shipping costs.
"We already have agreements for an additional 50 million tonnes in China per year only with new customers … who never bought from Vale," Mr Martins said.
"In the past, we never had an opportunity to test what would be our market share in China, because we never had enough iron ore to fill their needs. We have a much stronger position in China than we did before the crisis started."
Source: Brisbane Times
Vale's decision will come as a surprise to the market, which had speculated it would settle the price early - and perhaps at a lower level than Australian miners had hoped - in an effort to increase sales, since its mines are operating below capacity.
Most analysts expect the benchmark price will fall by 20 to 30 per cent.
But at an annual results briefing in Rio de Janeiro on Friday, the head of Vale's ferrous division, Jose Carlos Martins, said his company had decided to change tactics this year.
"We are used to being the price-setter, but this year we have decided to wait and see what will be fixed between the Australians and Chinese, because I think China is now the main seaborne market and the Australians are the biggest suppliers [to China] and are closer, so we will tend to let them fix the price," he said.
Vale last year received price increases of 65 to 71 per cent for its iron ore, but the Australian miners held out for an 85 per cent increase, which took into account the lower cost of shipping ore from Australia to Asia.
Vale later tried to increase the price of its ore by 10 per cent, but customers rejected that move as the extent of the global financial crisis became apparent.
"Last year we [set the price] and we know what happened," Mr Martins said. "[Rio and BHP] didn't follow the benchmark. Customers accepted a higher price, and we had all of the problems that everybody knows. There is no proposal on the table from Vale. We are only waiting for what will come. If it is good, we will follow. If it is not good, we will do what [Rio and BHP] did last year."
Among the world's three largest iron ore miners, Vale has been the staunchest defender of the benchmark system. BHP is trying to replace the traditional pricing system with index-linked contracts that better reflect spot market movements, while Rio prefers a mix of benchmark, hybrid and spot sales.
Mr Martins said Vale's position as the traditional price-setter had made it a target during the negotiating season.
"Tactically speaking, many customers reduce their inventories to increase their bargaining power," he said.
Vale has been particularly hard hit by the financial crisis since its main customers are in Europe and Brazil, regions that have suffered much larger steel production cuts than China.
Vale's chief executive, Roger Agnelli, said its largest iron ore customer, ArcelorMittal, had not bought a single tonne of iron ore from the miner since October, but it was expected to accept shipments from April.
To partially compensate for lost sales in Europe and Brazil, Vale has increased shipments to China. Vale expects to ship a record 30 million tonnes to China during the present quarter, and it is doing so at the full benchmark price without reimbursing customers for shipping costs.
"We already have agreements for an additional 50 million tonnes in China per year only with new customers … who never bought from Vale," Mr Martins said.
"In the past, we never had an opportunity to test what would be our market share in China, because we never had enough iron ore to fill their needs. We have a much stronger position in China than we did before the crisis started."
Source: Brisbane Times
Zambia's Copper-Dependent Economy At Breaking Point
The international price of copper has fallen and Zambia’s copper-dependent economy is at a breaking point. In the 1980s, the country produced about 750,000 metric tonnes of finished copper every year until the 1990s when output dropped to 200,000 metric tonnes. Production picked up in 2000 but has been recently limited in the dawn of the current economic depression.
Mr. Rupiah Banda the president of Zambia recently announced that his government would take over mines facing operational difficulties, but has insisted that mines would not be nationalized, unless the private sectors failed to hold unto their operations.
Nationalization of the mines may become necessary as firms like Konkola Copper Mines (KCM), this week laid-off 700 of its workforce of 15,000 after shutting down its smelting plant and Mopani Copper Mines have announced that it would sack up to 1,000 of its 16,000 employees by the end of February 2009, and the country’s biggest mine.
This sad development for the Zambia economy has seen labor forces cut down, mining operations shut down and plans for projects put on hold. Poverty is said to begin to bite in Zambia’s Copperbelt Province. It is reported that the Bwana Mukubwa and Luanshya Copper mines now have only maintenance staff.
The management of Luanshya have also closed down their Chambishi copper smelter and suspended their $355 million Mulyashi mine project. Luanshya Copper Mine.
In December 2008, a joint venture of the Swiss-based International Mineral Resources and Bein Stein Group Resources of Israel, closed its operation resulting in 1,700 retrenchments. Many laid-off miners have turned to informal trading to make ends meet.
Finished copper is a valuable component in electrical and electronics, and in building industries and Zambia is the world largest producer of the valuable metal. However, the world economic recession has seen the demand for copper drop and thus its international value fall from a record high of about $8,000mt between 2005 and 2007 to about $3,000mt.
The country had hoped to increase productions to 100 000 metric tonnes by 2009 but that has been considered as unachievable following the global economic meltdown.
Source: Afrik.com
Mr. Rupiah Banda the president of Zambia recently announced that his government would take over mines facing operational difficulties, but has insisted that mines would not be nationalized, unless the private sectors failed to hold unto their operations.
Nationalization of the mines may become necessary as firms like Konkola Copper Mines (KCM), this week laid-off 700 of its workforce of 15,000 after shutting down its smelting plant and Mopani Copper Mines have announced that it would sack up to 1,000 of its 16,000 employees by the end of February 2009, and the country’s biggest mine.
This sad development for the Zambia economy has seen labor forces cut down, mining operations shut down and plans for projects put on hold. Poverty is said to begin to bite in Zambia’s Copperbelt Province. It is reported that the Bwana Mukubwa and Luanshya Copper mines now have only maintenance staff.
The management of Luanshya have also closed down their Chambishi copper smelter and suspended their $355 million Mulyashi mine project. Luanshya Copper Mine.
In December 2008, a joint venture of the Swiss-based International Mineral Resources and Bein Stein Group Resources of Israel, closed its operation resulting in 1,700 retrenchments. Many laid-off miners have turned to informal trading to make ends meet.
Finished copper is a valuable component in electrical and electronics, and in building industries and Zambia is the world largest producer of the valuable metal. However, the world economic recession has seen the demand for copper drop and thus its international value fall from a record high of about $8,000mt between 2005 and 2007 to about $3,000mt.
The country had hoped to increase productions to 100 000 metric tonnes by 2009 but that has been considered as unachievable following the global economic meltdown.
Source: Afrik.com
Chinese Steel Industry In Iron Ore Resale Agreement
Reports from China suggest that steelmakers and traders have finally agreed to an industry group proposal to limit the resale price margin on imported iron ore.
Mr Shan Shanghua, secretary general of the China Iron & Steel Association, said at a meeting with its members that mills and traders will only charge a 3% premium for reselling imported contract iron ore. Thw proposal had previously been rejected by interested parties.
Mr Shan Shanghua, secretary general of the China Iron & Steel Association, said at a meeting with its members that mills and traders will only charge a 3% premium for reselling imported contract iron ore. Thw proposal had previously been rejected by interested parties.
Hindustan Zinc Expected To Ride Out Recession
A report in India's Economic Times reports that Hindustan Zinc is expected to ride out the tough times on the back of its low-cost operations and strong cash position.
A recent research report by Enam Securities said the company's share price makes it undervalued.“
The report added that the situation regarding global concentrated supply is tight as the shutdown of zinc mining continues unabated. This is indicated by the weak treatment charge for zinc. Seven to eight percent of global smelting capacity has been closed as around 50% of total capacity is incurring losses.
Source: Economic Times
A recent research report by Enam Securities said the company's share price makes it undervalued.“
The report added that the situation regarding global concentrated supply is tight as the shutdown of zinc mining continues unabated. This is indicated by the weak treatment charge for zinc. Seven to eight percent of global smelting capacity has been closed as around 50% of total capacity is incurring losses.
Source: Economic Times
Pakistan Steel Mills 'On Path To Recovery'
Despite being affected by the global economic recession and incurring losses, the Pakistan Steel Mills will regain its lost sales and reach a respectable mark of sales by July 2009, Chairman, PSM, Mueen Aftab Sheikh said while addressing a press conference at Pakistan Steel Mills Saturday.
The steel mill recorded sales of Rs 1.5 billion in November 2008, Rs 2.8 billion in December 2008 and Rs 3.8 billion in January 2009.
Mr Aftab said: “we are making efforts to incorporate clause in PPRA rules authorising any government department committee to negotiate with suppliers to adjust the contracted prices equivalent to difference of current international prices of raw material and other consumables.
"We have initiated a project for making briquettes of coke dust 0-15 mm, as in the past around 40,000 tonnes of coke dust was wasted every year, but the coke briquette made from this dust would be worth $20 million per annum.”
PSM has also started using local Sharrigh coking coal to the tune of 5 percent in the plant. The price difference between local and imported coal is $275 per MT. To cut down the surplus contents PSM is also procuring a desulfurization plant to use more local coal as substitute of expensive imported coal, chairman informed.
The PSM management has also approached FBR for the imposition of a regulatory and antidumping duty because EU has imposed 85 percent duty on import of steel products from China. USA has imposed 153 percent dumping duty on Indian steel products and India has imposed 30 percent duty on import of steel products. Due to the global recession, the PSM is operating at 75 percent capacity instead of 90 percent.
The market share of PSM prior to the recession was 20 to 45 percent for long and flat steel products and the rest of demand was being met through imports in case of flat products, whereas long products were being produced locally through re-meltable scrap or ship breaking, he said.
Source: Daily Times, Lahore
The steel mill recorded sales of Rs 1.5 billion in November 2008, Rs 2.8 billion in December 2008 and Rs 3.8 billion in January 2009.
Mr Aftab said: “we are making efforts to incorporate clause in PPRA rules authorising any government department committee to negotiate with suppliers to adjust the contracted prices equivalent to difference of current international prices of raw material and other consumables.
"We have initiated a project for making briquettes of coke dust 0-15 mm, as in the past around 40,000 tonnes of coke dust was wasted every year, but the coke briquette made from this dust would be worth $20 million per annum.”
PSM has also started using local Sharrigh coking coal to the tune of 5 percent in the plant. The price difference between local and imported coal is $275 per MT. To cut down the surplus contents PSM is also procuring a desulfurization plant to use more local coal as substitute of expensive imported coal, chairman informed.
The PSM management has also approached FBR for the imposition of a regulatory and antidumping duty because EU has imposed 85 percent duty on import of steel products from China. USA has imposed 153 percent dumping duty on Indian steel products and India has imposed 30 percent duty on import of steel products. Due to the global recession, the PSM is operating at 75 percent capacity instead of 90 percent.
The market share of PSM prior to the recession was 20 to 45 percent for long and flat steel products and the rest of demand was being met through imports in case of flat products, whereas long products were being produced locally through re-meltable scrap or ship breaking, he said.
Source: Daily Times, Lahore
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