Naveen Jindal-led Jindal Steel & Power (JSPL) is in advanced talks with New South Wales-based mining firm Hudson Resources to form a joint venture for the exploration and mining of coking coal in Australia, said a person who is mediating in the proposed venture. The JV is expected to absorb investments of $100 million once mining commences in the proposed coal block.
The coal mines are located in Maryborough Basin of Queensland with estimated recoverable reserves of 20 million tonne (mt), which could go up to 200 mt, if explored further. JSPL will hold 15% equity in the proposed JV during the exploratory stage, while ASX-listed Hudson Resources, which has interests in minerals such as bauxite and coal, will own the majority stake. Once deposits are defined, the Indian firm will have option to raise its stake to 50%.
The proposed JV will help JSPL meet raw material requirements for two of its upcoming greenfield steel projects with a capacity of 6 mt each in Orissa and Jharkhand. Coking coal is a key input in steel manufacturing.
Another New South Wales-based firm, Hindustan Global Resources (HGR), engaged in exploration, mining and consulting, is negotiating on behalf of the Australian company. HGR has also been assigned the job to carry out exploration and mining work for the JV.
HGR vice-president Amar Bhasin said: “JSPL executives had a fruitful meeting with the directors of Hudson Resources and HGR a few days ago. If everything goes well, we hope to finalise the deal in the next few days.” The initial investments in the venture for carrying out exploration work will be close to $8 million, he added.
JSPL executive director (raw materials) DN Abrol told ET: “We are talking to many Australian mining firms for setting up a JV to meet captive coking coal requirements. The extracted coal will be shipped to India. But, nothing has been finalised so far.”
Several Indian companies in the steel and power generation space have been scouting for coal assets abroad to ensure feedstock for captive consumption. Coal mining in India is confined to few public sector companies and the country has limited reserves of coking coal. As a result, steel companies are largely dependent on imports.
“In order to ensure long-term resource security, companies prefer owning some quality assets abroad. Moreover, its a cost advantage, as coking coal prices in the spot market keeps on fluctuating,” said a New Delhi-based steel analyst.
Source: Economic Times
Thursday, April 30, 2009
Delta Claims Liberia Allowing It To Bid For Iron Ore Deposit
Delta Mining Consolidated Ltd., a company partly owned by South African investor Bernard Swanepoel, has said that Liberia will allow the company to bid for the Western Cluster iron ore deposits.
In September, Liberia cancelled the award to Delta of a $1.6 billion contract to develop the deposit and barred it from participating in a new tender, citing alleged “impropriety.” The matter “is now closed and we can move forward to a more constructive engagement,” Johannesburg-based Delta said in an e-mailed statement today.
Tata Steel Ltd., India’s biggest steelmaker, was also barred last year by Liberia from bidding for the deposit.
Delta has interests in coal and iron ore. Its biggest shareholders are Avalon Trust, based in Johannesburg, and Swanepoel, a former chief executive officer of Harmony Gold Mining Co.
Source: Bloomberg
In September, Liberia cancelled the award to Delta of a $1.6 billion contract to develop the deposit and barred it from participating in a new tender, citing alleged “impropriety.” The matter “is now closed and we can move forward to a more constructive engagement,” Johannesburg-based Delta said in an e-mailed statement today.
Tata Steel Ltd., India’s biggest steelmaker, was also barred last year by Liberia from bidding for the deposit.
Delta has interests in coal and iron ore. Its biggest shareholders are Avalon Trust, based in Johannesburg, and Swanepoel, a former chief executive officer of Harmony Gold Mining Co.
Source: Bloomberg
Kazakhmys Reports Copper Production Decline
Kazakh miner Kazakhmys has posted a 20 percent fall in first-quarter copper cathode production on Thursday.
Total copper cathode output for the FTSE-100 miner declined to 85,600 tonnes in the first three months of 2009 from 106,600 tonnes in the previous quarter.
"At the end of 2008 we stated that we would reduce output in 2009, by suspending production at some higher cost mines, and this is reflected in these results," said Chief Executive Oleg Novachuk.
It continues to anticipate copper cathode production this year of about 300,000 tonnes.
Source: Reuters
Total copper cathode output for the FTSE-100 miner declined to 85,600 tonnes in the first three months of 2009 from 106,600 tonnes in the previous quarter.
"At the end of 2008 we stated that we would reduce output in 2009, by suspending production at some higher cost mines, and this is reflected in these results," said Chief Executive Oleg Novachuk.
It continues to anticipate copper cathode production this year of about 300,000 tonnes.
Source: Reuters
Steel Plan Aims To Tap Into Pakistan Iron Ore Reserves
Pakistan is all set to finalise a draft of its long-term National Steel Policy in the next two weeks after consultation with provincial mining departments.
The policy aims to bridge the supply-demand gap by achieving steel production of 15 million tonnes by 2020. Pakistan has more than 1.42 billion tonnes of proven iron ore reserves. Of these, about 947 million tonnes were spread in Punjab (Sargodha and Kalabagh), North West Frontier Province (NWFP) (Nizampur and Hazara), Balochistan (Kalat and Chaghi), which contain 20 to 60 per cent iron. Kalabagh retains 450 million tonnes of iron ore reserves containing 30-35 per cent iron content.
The government is focusing on these sites and has planned to establish steel mills in these areas in collaboration with foreign and local investors, who may be provided incentives, well-placed official sources said.
Under this initiative, the private sector would be encouraged to invest in these areas. They would be provided special incentives like cut in duty or zero duty on imports, provision of land and other infrastructure facilities, sources said.
The setting up of mills at these specified areas would reduce the cost of production and help cater to steel requirements of the country, they said. The areas, where the government wants to produce steel, are Makerwal-Sho (Mianwali) having iron ore reserves of 706m tons, Chichali-Chughlan (Mianwali) 369m tons, DG Khan (56 million tons) and Chiniot 17m tons. These are located in Punjab. In Balochistan, Pachinkoh (Nokundi) has iron ore reserves of 45m tons, Chigendik (Nokundi) 5m tons, Chilghazi (Dalbandin) 2.47m tons and Dilband (Mastung, Kalat) 200m tons. Besides, in NWFP, Pezu (DI Khan-Bannu) bristles with reserves of 13 million tons and Damar Nisar (Chitral) three million tons.
Zaigham Adil Rizvi, Director (Projects) Tuwairqi Steel Mills Ltd (TSML) said: “It is a matter of our survival to use local iron ore, as import from Brazil, Australia and others was costly this year. TSML will need about two million tonnes of iron per annum.”
Under-construction TSML plant located at Bin Qasim Karachi is Pakistan’s first private sector integrated steel manufacturing project and Al Tuwairqi Holding has so far invested about $300m. Rizvi said that the group was aggressively planning to develop iron ore sites in Balochistan in order to reduce dependence on imports.
Experts believe that developing and using local iron ore for steel production could keep the sector protected of international price shocks, fear of reduced supplies, high sea freight, carrying costs and logistic problems. During the fiscal year 2007-08, Pakistan’s annual steel requirement was about five million tons while domestically it produced 3.75 million tons. The reaming gap was catered through imports for which the national exchequer pay million of dollars.
Source: The News, Karachi
The policy aims to bridge the supply-demand gap by achieving steel production of 15 million tonnes by 2020. Pakistan has more than 1.42 billion tonnes of proven iron ore reserves. Of these, about 947 million tonnes were spread in Punjab (Sargodha and Kalabagh), North West Frontier Province (NWFP) (Nizampur and Hazara), Balochistan (Kalat and Chaghi), which contain 20 to 60 per cent iron. Kalabagh retains 450 million tonnes of iron ore reserves containing 30-35 per cent iron content.
The government is focusing on these sites and has planned to establish steel mills in these areas in collaboration with foreign and local investors, who may be provided incentives, well-placed official sources said.
Under this initiative, the private sector would be encouraged to invest in these areas. They would be provided special incentives like cut in duty or zero duty on imports, provision of land and other infrastructure facilities, sources said.
The setting up of mills at these specified areas would reduce the cost of production and help cater to steel requirements of the country, they said. The areas, where the government wants to produce steel, are Makerwal-Sho (Mianwali) having iron ore reserves of 706m tons, Chichali-Chughlan (Mianwali) 369m tons, DG Khan (56 million tons) and Chiniot 17m tons. These are located in Punjab. In Balochistan, Pachinkoh (Nokundi) has iron ore reserves of 45m tons, Chigendik (Nokundi) 5m tons, Chilghazi (Dalbandin) 2.47m tons and Dilband (Mastung, Kalat) 200m tons. Besides, in NWFP, Pezu (DI Khan-Bannu) bristles with reserves of 13 million tons and Damar Nisar (Chitral) three million tons.
Zaigham Adil Rizvi, Director (Projects) Tuwairqi Steel Mills Ltd (TSML) said: “It is a matter of our survival to use local iron ore, as import from Brazil, Australia and others was costly this year. TSML will need about two million tonnes of iron per annum.”
Under-construction TSML plant located at Bin Qasim Karachi is Pakistan’s first private sector integrated steel manufacturing project and Al Tuwairqi Holding has so far invested about $300m. Rizvi said that the group was aggressively planning to develop iron ore sites in Balochistan in order to reduce dependence on imports.
Experts believe that developing and using local iron ore for steel production could keep the sector protected of international price shocks, fear of reduced supplies, high sea freight, carrying costs and logistic problems. During the fiscal year 2007-08, Pakistan’s annual steel requirement was about five million tons while domestically it produced 3.75 million tons. The reaming gap was catered through imports for which the national exchequer pay million of dollars.
Source: The News, Karachi
Terramin Seeks Chinese Backing For Algerian Zinc Project
Terramin Australia Ltd., an Australian zinc and lead producer, will start financing talks in China next month for its planned $266 million Tala Hamza zinc and lead mine in Algeria.
China Nonferrous Metal Industry Foreign Engineering and Construction Co., which bought an 11 percent stake in Terramin last month, “will be introducing us to their various backers,” including China Development Bank Corp., Kevin Moriarty, chief executive officer of the Adelaide-based company, said today.
China, the world’s biggest buyer of metals, may spend more than $500 billion on overseas resources investments over the next eight years to secure supplies, according to Deloitte Touche Tohmatsu. China Nonferrous wants to boost its holding and participate in new ventures, Moriarty said.
“We don’t envisage any problems with financing the construction, and nor do our new partners,” Moriarty said in an interview in Melbourne, adding that he and Chief Financial Officer Martin Janes are due in China in the middle of next month for a variety of meetings. China Nonferrous “are keen for us to look and acquire more projects so they want to back us,” he said.
Terramin started production from its Angas zinc and lead mine in South Australia state last July.
Zinc has increased 17 percent this year and jumped 5.3 percent to $1,411.50 a metric ton yesterday on the London Metal Exchange. A “strong price recovery” in zinc is expected later in 2009 and through to 2010, Royal Bank of Scotland Group Plc said this week. Demand for zinc is estimated to grow 6 percent a year from 2010 to 2012, RBS said.
Tala Hamza is scheduled to start output by late 2011 and is expected to initially produce 250,000 tons of zinc and lead concentrate, Terramin said in an April 8 statement. Output is expected to increase to as much as 500,000 tons a year, the statement said. Commodities trading company Transamine has agreed to sales accords from the mine, Moriarty said.
The timing of building Tala Hamza “is totally spot on, we want to be bringing it in as the next high-cycle begins and not during it,” Moriarty said.
Source: Bloomberg
China Nonferrous Metal Industry Foreign Engineering and Construction Co., which bought an 11 percent stake in Terramin last month, “will be introducing us to their various backers,” including China Development Bank Corp., Kevin Moriarty, chief executive officer of the Adelaide-based company, said today.
China, the world’s biggest buyer of metals, may spend more than $500 billion on overseas resources investments over the next eight years to secure supplies, according to Deloitte Touche Tohmatsu. China Nonferrous wants to boost its holding and participate in new ventures, Moriarty said.
“We don’t envisage any problems with financing the construction, and nor do our new partners,” Moriarty said in an interview in Melbourne, adding that he and Chief Financial Officer Martin Janes are due in China in the middle of next month for a variety of meetings. China Nonferrous “are keen for us to look and acquire more projects so they want to back us,” he said.
Terramin started production from its Angas zinc and lead mine in South Australia state last July.
Zinc has increased 17 percent this year and jumped 5.3 percent to $1,411.50 a metric ton yesterday on the London Metal Exchange. A “strong price recovery” in zinc is expected later in 2009 and through to 2010, Royal Bank of Scotland Group Plc said this week. Demand for zinc is estimated to grow 6 percent a year from 2010 to 2012, RBS said.
Tala Hamza is scheduled to start output by late 2011 and is expected to initially produce 250,000 tons of zinc and lead concentrate, Terramin said in an April 8 statement. Output is expected to increase to as much as 500,000 tons a year, the statement said. Commodities trading company Transamine has agreed to sales accords from the mine, Moriarty said.
The timing of building Tala Hamza “is totally spot on, we want to be bringing it in as the next high-cycle begins and not during it,” Moriarty said.
Source: Bloomberg
Pike River Progressing Mine Repairs
Pike River Coal Ltd has made good progress towards its goal of restoring ventilation to its coal mine on the West Coast of the South Island following a rockfall in February.
The mine is yet to export any coal and delays in its development has caused the company to raise $45 million this year. While production has been delayed the price of hard coking coal has been falling.
The company has employed 110 people out of the total workforce of 150 required for full production.
Pike River said today the first export shipment of 60,000 tonnes of coal to Japan was due in the July-September 2009 quarter.
Coal production with one of the continuous miner machines was to recommence at the start of May, once reaming and lining of a 600mm diameter "slimline" ventilation hole was completed.
Full ventilation would be restored by the end of May with completion of an angled shaft bypass around the main ventilation shaft where it was blocked by a rock fall.
Large-scale production would come with the arrival from Australia of a high pressure water cannon, which would cut coal at a rate averaging more than 2000 tonnes a day.
Hydro mining was scheduled to start during the October-December quarter, boosting production to one million tonnes a year.
The economic downturn has reduced demand for steel and, as a result, premium hard coking coal prices have fallen from the record $US300 ($NZ532.76) per tonne in the 2008 Japanese fiscal year.
Pike River said the recent annual benchmark price-setting process for the year ended March 31, 2010 saw premium hard coking coal priced a $US128 per tonne.
"Pike River anticipates a price at or about this level when it completes its own negotiations.
"That would still be approximately $US30 per tonne higher than forecast for this period at the time of the company's 2007 initial public offer."
Source: National Business Review, NZ
The mine is yet to export any coal and delays in its development has caused the company to raise $45 million this year. While production has been delayed the price of hard coking coal has been falling.
The company has employed 110 people out of the total workforce of 150 required for full production.
Pike River said today the first export shipment of 60,000 tonnes of coal to Japan was due in the July-September 2009 quarter.
Coal production with one of the continuous miner machines was to recommence at the start of May, once reaming and lining of a 600mm diameter "slimline" ventilation hole was completed.
Full ventilation would be restored by the end of May with completion of an angled shaft bypass around the main ventilation shaft where it was blocked by a rock fall.
Large-scale production would come with the arrival from Australia of a high pressure water cannon, which would cut coal at a rate averaging more than 2000 tonnes a day.
Hydro mining was scheduled to start during the October-December quarter, boosting production to one million tonnes a year.
The economic downturn has reduced demand for steel and, as a result, premium hard coking coal prices have fallen from the record $US300 ($NZ532.76) per tonne in the 2008 Japanese fiscal year.
Pike River said the recent annual benchmark price-setting process for the year ended March 31, 2010 saw premium hard coking coal priced a $US128 per tonne.
"Pike River anticipates a price at or about this level when it completes its own negotiations.
"That would still be approximately $US30 per tonne higher than forecast for this period at the time of the company's 2007 initial public offer."
Source: National Business Review, NZ
Cheap Imports Deter Chinese Steel Exports
Sluggish exports, rising imports and high inventories still weigh heavily on China's steel market although the price increasing in Shanghai Futures Exchange recently, this is according Mr Guo Yong, an analyst at Jinrui Futures. Steel prices will be limited by output in the long term.
Compared with other countries, China's steel price is much cheaper at present due its huge output. As reported, Chinese origin rebar is priced at USD 477 per tonne while American rebar is USD 544 per tonne with Japanese rebar at USD 706 per tonne. For medium plate and hot rolled steel coil, China is priced as USD 477 per tonne with the US and EU at USD 544 per tonne and USD 706 per tonne respectively.
However, the relatively low price cannot promote steel exports but brings instead, many buyers' restrictions as for the fear of impact on their own domestic steel industries. Therefore, most foreign countries havejoined to launch a series of antidumping lawsuits on Chinese steel products. Meanwhile, the CISA announced that China's crude steel output in March was at 42.08 million tonnes up by 4.11% month-on-month. By comparison, exports in Q1 fell sharply with imported steel products somewhat higher.
According to statistics from Chinese Customs on April 10th, export volumes in March were 1.67 million tonnes, a drop of 54.8% year-on-year. Imports jumped to 1.27 million tonnes up by 15.33% year-on-year. Steel billet exports in March were zero while imports were 0.46 billion tonnes in March and 0.9 million tonnes for Q1 - up1700% year-on-year.
As per the statistics from http://www.steel-futures.cn, the inventories of long products and steel slab for the second week of April in Chinese key cities reached 4.8404 million tonnes and 5.1174 million tonnes, down by 0.2899 million tonnes and up 0.0243 million tonnes week-on-week respectively. The market inventory for common carbon steel products was reported to be 9.9578 million tonnes down by 2.6% from the previous week.
Mr Guo Yong notes that "China is not likely to cap output citing its important tasks of sustaining GDP and employment." Steel prices are fluctuating as a result.
Source: Steel Guru
Compared with other countries, China's steel price is much cheaper at present due its huge output. As reported, Chinese origin rebar is priced at USD 477 per tonne while American rebar is USD 544 per tonne with Japanese rebar at USD 706 per tonne. For medium plate and hot rolled steel coil, China is priced as USD 477 per tonne with the US and EU at USD 544 per tonne and USD 706 per tonne respectively.
However, the relatively low price cannot promote steel exports but brings instead, many buyers' restrictions as for the fear of impact on their own domestic steel industries. Therefore, most foreign countries havejoined to launch a series of antidumping lawsuits on Chinese steel products. Meanwhile, the CISA announced that China's crude steel output in March was at 42.08 million tonnes up by 4.11% month-on-month. By comparison, exports in Q1 fell sharply with imported steel products somewhat higher.
According to statistics from Chinese Customs on April 10th, export volumes in March were 1.67 million tonnes, a drop of 54.8% year-on-year. Imports jumped to 1.27 million tonnes up by 15.33% year-on-year. Steel billet exports in March were zero while imports were 0.46 billion tonnes in March and 0.9 million tonnes for Q1 - up1700% year-on-year.
As per the statistics from http://www.steel-futures.cn, the inventories of long products and steel slab for the second week of April in Chinese key cities reached 4.8404 million tonnes and 5.1174 million tonnes, down by 0.2899 million tonnes and up 0.0243 million tonnes week-on-week respectively. The market inventory for common carbon steel products was reported to be 9.9578 million tonnes down by 2.6% from the previous week.
Mr Guo Yong notes that "China is not likely to cap output citing its important tasks of sustaining GDP and employment." Steel prices are fluctuating as a result.
Source: Steel Guru
Bootu Creek Manganese Production Down 34%
OM Holdings produced 94,392 tonnes of manganese from its Bootu Creek mine in Australia's Northern Territory in the three months ended March 31st 2009, down by 34% YoY from the 143,465 tonnes produced in the quarter before.
The reduced output was in line with plans to reduce full year production to 500,000 tonnes for the first half of 2009, in line with a drop in global demand. Output from its 100%-owned Qinzhou Smelter in Guangxi produced 10,173 tonnes of high carbon ferromanganese during the March quarter, up by 2% QoQ from 9,951 tonnes produced in the December quarter.
Mr Peter Toth CEO of OMH said that "The current manganese ore prices make a large percentage of current manganese ore production short term cash negative and long term uneconomic, particularly in the low grade domestic and high cost marginal seaborne segments."
In its March 2009 Quarterly Report, OMH reported high grade manganese ore shipments totalling 172,306 wet tonnes. Ore shipments were suspended during the December 2008 quarter, when the manganese ore market, like most commodity sectors, was severely impacted by the short term effects of the global financial crisis.
Despite the outlook, OMH is pushing ahead with the construction of its new AUD 12.6 million rejects re treatment plant at Bootu Creek, which will be internally funded from operating cash flow. The commissioning of this facility, scheduled for December 2009, will enable production to reach an annualized rate of 900,000 tonnes by 2010.
Source: Steel Guru
The reduced output was in line with plans to reduce full year production to 500,000 tonnes for the first half of 2009, in line with a drop in global demand. Output from its 100%-owned Qinzhou Smelter in Guangxi produced 10,173 tonnes of high carbon ferromanganese during the March quarter, up by 2% QoQ from 9,951 tonnes produced in the December quarter.
Mr Peter Toth CEO of OMH said that "The current manganese ore prices make a large percentage of current manganese ore production short term cash negative and long term uneconomic, particularly in the low grade domestic and high cost marginal seaborne segments."
In its March 2009 Quarterly Report, OMH reported high grade manganese ore shipments totalling 172,306 wet tonnes. Ore shipments were suspended during the December 2008 quarter, when the manganese ore market, like most commodity sectors, was severely impacted by the short term effects of the global financial crisis.
Despite the outlook, OMH is pushing ahead with the construction of its new AUD 12.6 million rejects re treatment plant at Bootu Creek, which will be internally funded from operating cash flow. The commissioning of this facility, scheduled for December 2009, will enable production to reach an annualized rate of 900,000 tonnes by 2010.
Source: Steel Guru
ArcelorMittal SA Reports Q1 Loss
Steel producer ArcelorMittal SA plunged into losses in the first quarter to March.
Its headline loss of R237-million compared with a R1.14-billion profit in the fourth quarter of 2008.
The loss, said chief executive Nonkululeko Nyembezi-Heita, reflected the decline in demand and price and high raw material input costs, especially for coking coal, exacerbated by sharply lower income from the coke and chemicals business, and losses on foreign currency transactions.
Despite the bottom line loss, and indications from Nyembezi-Heita that the outlook for the second quarter looked equally gloomy, the share price rose almost 6percent in early trade yesterday, largely due to its announcement of a share buy-back.
ArcelorMittal SA said the headline loss reflected “a sharp decline in demand and prices of steel and the persistence of high contract prices for raw material inputs, particularly coking coal.
It said worsening economic conditions had a substantial negative impact on sales and income, and revenue dropped 24percent to R6.17- billion compared with the previous quarter.
The operating loss was R145-million from a profit of R1.61-billion in the fourth quarter of 2008, while the bottom line loss was even bigger due to lower income from the coke and chemicals business “amid a slump in demand for market coke from the ferro-alloy industry”.
There were also losses on foreign currency transactions as the rand strengthened against the dollar.
Nyembezi-Heita said the performance was affected by the sharp decline in steel prices; continued weak demand; and the slower than expected pace of de-stocking by steel merchants.
“The outlook for global steel production has not improved significantly and it now appears that the second quarter will be extremely challenging,” she said.
She said additional cost-saving measures were introduced in the first quarter “in the light of the deepening crisis”, and, following a continued decline in prices in April, further actions are under consideration.
She said steel export prices are falling below the operating cost level of many steel mills and sometimes even below their marginal costs.
World steel figures put the decline in steel output at 24percent year-on- year in the first quarter.
Source: The Times Of South Africa
Its headline loss of R237-million compared with a R1.14-billion profit in the fourth quarter of 2008.
The loss, said chief executive Nonkululeko Nyembezi-Heita, reflected the decline in demand and price and high raw material input costs, especially for coking coal, exacerbated by sharply lower income from the coke and chemicals business, and losses on foreign currency transactions.
Despite the bottom line loss, and indications from Nyembezi-Heita that the outlook for the second quarter looked equally gloomy, the share price rose almost 6percent in early trade yesterday, largely due to its announcement of a share buy-back.
ArcelorMittal SA said the headline loss reflected “a sharp decline in demand and prices of steel and the persistence of high contract prices for raw material inputs, particularly coking coal.
It said worsening economic conditions had a substantial negative impact on sales and income, and revenue dropped 24percent to R6.17- billion compared with the previous quarter.
The operating loss was R145-million from a profit of R1.61-billion in the fourth quarter of 2008, while the bottom line loss was even bigger due to lower income from the coke and chemicals business “amid a slump in demand for market coke from the ferro-alloy industry”.
There were also losses on foreign currency transactions as the rand strengthened against the dollar.
Nyembezi-Heita said the performance was affected by the sharp decline in steel prices; continued weak demand; and the slower than expected pace of de-stocking by steel merchants.
“The outlook for global steel production has not improved significantly and it now appears that the second quarter will be extremely challenging,” she said.
She said additional cost-saving measures were introduced in the first quarter “in the light of the deepening crisis”, and, following a continued decline in prices in April, further actions are under consideration.
She said steel export prices are falling below the operating cost level of many steel mills and sometimes even below their marginal costs.
World steel figures put the decline in steel output at 24percent year-on- year in the first quarter.
Source: The Times Of South Africa
Wednesday, April 29, 2009
FIMI - India's Iron Ore Exports "May Drop 25 Per Cent"
India’s iron ore exports may plunge at least 25 percent this fiscal year after competitors cut prices to win customers in China, the world’s largest buyer of the steelmaking ingredient, an industry body said.
Exports will drop from the 105 million metric tons sold in the year ended March 31, R.K. Sharma, secretary general of the Federation of Indian Mineral Industries, said in an interview in New Delhi today.
Australia’s BHP Billiton Ltd., the world’s largest mining company, said this month it sold more iron ore on the cheaper cash market after customers deferred some contract delivery. India was the largest seller of iron ore to China on the cash market, and its ore was usually of lower quality than those sold by BHP, Rio Tinto Group and Brazil’s Cia. Vale do Rio Doce.
“India’s exports will fall by 25 percent at least because we are less competitive than Australian sellers,” Sharma said. “The fall may be more if India does not lower railway freight costs and improve roads.”
Steelmakers have cut purchases of iron ore as demand for cars, buildings and appliances dropped in the global recession. Spot prices traded at $63 a ton, below the February high of $84 a ton, Citigroup Inc.’s analyst Johan U. Rode said April 3.
Prices of Indian ore have dropped to $48 a ton, Sharma said today. “Prices will remain weak,” he said.
India’s iron-ore exports recorded in the year ended March 31 were little changed from a year earlier, Sharma said.
Source: Bloomberg
Exports will drop from the 105 million metric tons sold in the year ended March 31, R.K. Sharma, secretary general of the Federation of Indian Mineral Industries, said in an interview in New Delhi today.
Australia’s BHP Billiton Ltd., the world’s largest mining company, said this month it sold more iron ore on the cheaper cash market after customers deferred some contract delivery. India was the largest seller of iron ore to China on the cash market, and its ore was usually of lower quality than those sold by BHP, Rio Tinto Group and Brazil’s Cia. Vale do Rio Doce.
“India’s exports will fall by 25 percent at least because we are less competitive than Australian sellers,” Sharma said. “The fall may be more if India does not lower railway freight costs and improve roads.”
Steelmakers have cut purchases of iron ore as demand for cars, buildings and appliances dropped in the global recession. Spot prices traded at $63 a ton, below the February high of $84 a ton, Citigroup Inc.’s analyst Johan U. Rode said April 3.
Prices of Indian ore have dropped to $48 a ton, Sharma said today. “Prices will remain weak,” he said.
India’s iron-ore exports recorded in the year ended March 31 were little changed from a year earlier, Sharma said.
Source: Bloomberg
Glencore Reverses Zambia Mine Closure
Zambia's Mopani Copper Mines, majority owned by Swiss commodities trader Glencore International AG, has reversed a decision to halt operations due to a cost savings plan and higher copper prices.
The Zambian government had asked Glencore to surrender the Nkana and Mufulira mines after it announced plans to temporarily close the loss-making operations after copper prices collapsed.
But Mopani, also partly owned by the government, said in a statement released overnight that agreement had been reached by its shareholders to keep the mines open.
"Following a detailed review of its mining, processing and administrative operations, Mopani expects to achieve a significant cost reduction," it said.
"This together with a slightly improved copper price environment has enabled Mopani to make the decision to continue with its mining operations rather than place the shafts on care and maintenance."
Mopani is 73 percent owned by Glencore, 17 percent by First Quantum Minerals Ltd and 10 percent by the Zambian government.
Mopani has a production capacity of 255,000 tonnes of copper metal and 2,000 tonnes of cobalt, according to Glencore's website.
Source: Reuters
The Zambian government had asked Glencore to surrender the Nkana and Mufulira mines after it announced plans to temporarily close the loss-making operations after copper prices collapsed.
But Mopani, also partly owned by the government, said in a statement released overnight that agreement had been reached by its shareholders to keep the mines open.
"Following a detailed review of its mining, processing and administrative operations, Mopani expects to achieve a significant cost reduction," it said.
"This together with a slightly improved copper price environment has enabled Mopani to make the decision to continue with its mining operations rather than place the shafts on care and maintenance."
Mopani is 73 percent owned by Glencore, 17 percent by First Quantum Minerals Ltd and 10 percent by the Zambian government.
Mopani has a production capacity of 255,000 tonnes of copper metal and 2,000 tonnes of cobalt, according to Glencore's website.
Source: Reuters
Nyrstar's Zinc Production Falls 30 Per Cent
Belgium's Nyrstar, the world's biggest producer of zinc, said its zinc production dropped by 30 percent in the first quarter of 2009 from the final quarter of 2008 and that it planned further cost saving measures.
Nyrstar, which left the Belgian blue-chip index .BFX in March, said in a statement on Wednesday it was planning to transform its cost structure across the entire company.
This would result in more than 50 million euros ($65.08 million) in sustainable cost savings per year from 2010, it said.
Zinc output dropped to 187,200 tonnes in January-March from 255,300 in the previous quarter. Nyrstar's lead output fell 18 percent to 50,000 tonnes from the last quarter of 2008.
The group said in February it would cut zinc production by 190,000 tonnes in the first half of 2009, about 9 percent of its output in 2008, following a 35,000-tonne reduction in the fourth quarter of last year.
The severe downturn in the global economy continued into the first quarter of 2009, leading to significantly reduced demand for zinc and other commodities, the group said.
But it said production cuts helped to stabilise stock levels and zinc prices throughout the quarter.
"With our strong cash position and no debt, we are well placed to survive the downturn and position the company for growth going forward," Chief Executive Roland Junck said in a statement.
Source: Reuters
Nyrstar, which left the Belgian blue-chip index .BFX in March, said in a statement on Wednesday it was planning to transform its cost structure across the entire company.
This would result in more than 50 million euros ($65.08 million) in sustainable cost savings per year from 2010, it said.
Zinc output dropped to 187,200 tonnes in January-March from 255,300 in the previous quarter. Nyrstar's lead output fell 18 percent to 50,000 tonnes from the last quarter of 2008.
The group said in February it would cut zinc production by 190,000 tonnes in the first half of 2009, about 9 percent of its output in 2008, following a 35,000-tonne reduction in the fourth quarter of last year.
The severe downturn in the global economy continued into the first quarter of 2009, leading to significantly reduced demand for zinc and other commodities, the group said.
But it said production cuts helped to stabilise stock levels and zinc prices throughout the quarter.
"With our strong cash position and no debt, we are well placed to survive the downturn and position the company for growth going forward," Chief Executive Roland Junck said in a statement.
Source: Reuters
Fortescue Cuts Sales Forecast
Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, has cut its full-year sales forecast by 15 percent because of slower than anticipated mining rates.
Sales are expected to be 26 million metric tons in the year ending June 30, Perth-based Fortescue said today in a statement to the Australian stock exchange. Shipments fell to 6.17 million metric tons in the three months ended March 31, from 6.28 million tons in the previous quarter, it said.
Cia. Vale do Rio Doce and Rio Tinto Group, the world’s two largest iron ore exporters, have slowed output as the worst recession since the Great Depression slashes demand from steelmakers. Fortescue started production from a mine, rail and port operation in Western Australia last year.
Source: Bloomberg
Sales are expected to be 26 million metric tons in the year ending June 30, Perth-based Fortescue said today in a statement to the Australian stock exchange. Shipments fell to 6.17 million metric tons in the three months ended March 31, from 6.28 million tons in the previous quarter, it said.
Cia. Vale do Rio Doce and Rio Tinto Group, the world’s two largest iron ore exporters, have slowed output as the worst recession since the Great Depression slashes demand from steelmakers. Fortescue started production from a mine, rail and port operation in Western Australia last year.
Source: Bloomberg
Shougang Has Its Eyes On Shanxi Steel Mill
Shougang Group, China's sixth largest steelmaker, is in talks to buy Highsee Iron and Steel Group, the largest private-owned steel mill in Shanxi province, according to reports in the 21st Century Business Herald.
The newspaper cited an unidentified local government official in Yuncheng, Shanxi, as saying Shougang is seeking to become the controlling stakeholder. The official said: "the two sides are now in talks but a detailed plan is yet to be finalized."
It cited another source in Shougang confirming that the company is in touch with Highsee and said it expects Shougang to inject its advantage in manufacturing long steel products.
A Shougang Group spokesman in Beijing declined to comment yesterday.
Experts said if the deal is inked, it would intensify Shougang's competition with Taiyuan Iron and Steel headquartered in Shanxi's capital city Taiyuan.
Taiyuan Iron and Steel is now busy with consolidation of some small-sized peers in the province, which is strongly supported by the provincial government.
As a large number of Chinese steel mills have been in the red for the past few months, the government is planning to promote restructuring in the sector to make it more competitive.
A stimulus plan published by the State Council, or the Chinese cabinet, in January encourages several major steel companies to take the lead in forming mega-sized steel groups across the country.
Source: China Daily
The newspaper cited an unidentified local government official in Yuncheng, Shanxi, as saying Shougang is seeking to become the controlling stakeholder. The official said: "the two sides are now in talks but a detailed plan is yet to be finalized."
It cited another source in Shougang confirming that the company is in touch with Highsee and said it expects Shougang to inject its advantage in manufacturing long steel products.
A Shougang Group spokesman in Beijing declined to comment yesterday.
Experts said if the deal is inked, it would intensify Shougang's competition with Taiyuan Iron and Steel headquartered in Shanxi's capital city Taiyuan.
Taiyuan Iron and Steel is now busy with consolidation of some small-sized peers in the province, which is strongly supported by the provincial government.
As a large number of Chinese steel mills have been in the red for the past few months, the government is planning to promote restructuring in the sector to make it more competitive.
A stimulus plan published by the State Council, or the Chinese cabinet, in January encourages several major steel companies to take the lead in forming mega-sized steel groups across the country.
Source: China Daily
Oz Minerals Reports Lower Zinc Production
OZ Minerals Ltd, which has struck a deal with China Minmetals Non-Ferrous Metals Co Ltd that will give it funds to pay down debt, has reported lower zinc production at its Century mine.
First quarter production was 101,961 tonnes and was lower due to the impact of wet weather during the period, which was the heaviest in the history of the mine based in Mount Isa, Queensland.
OZ Minerals said its production guidance for the year remained unchanged at 495,00 tonnes of zinc concentrate.
At the Sepon project in Laos, copper production was 17,217 tonnes and gold output was 26,422 tonnes.
OZ Minerals said its guidance for calendar 2009 copper production at Sepon was unchanged.
OZ Minerals recently recommended a revised offer from Minmetals that will deliver it $1.75 million in cash.
Minmetals hopes to acquire all of the companies metals mining assets, including Century, Sepon, Golden Grove, Rosebury, Avebury and Dugald River.
The deal excludes the Prominent Hill project in South Australia and selected assets in Cambodia and Thailand, which OZ Minerals will retain.
Minmetals had originally also wanted to acquire Prominent Hill.
OZ Minerals also said that it continued to working with its bank lenders to secure an extension to an upcoming debt maturity.
In late February, OZ Minerals got approval to extend the terms of its debt arrangements to March 31.
Its bankers then granted a further extension to April 30.
"The company continues to work with its lenders to secure a further extension to its facilities to 30 June 2009 to facilitate completion of the Minmetals transaction," OZ Minerals said.
The proposed transaction with Minmetals has been approved by the federal government and is awaiting Chinese government approvals.
Shareholders will vote on the deal at the company's annual general meeting in June.
Source: Melbourne Age
First quarter production was 101,961 tonnes and was lower due to the impact of wet weather during the period, which was the heaviest in the history of the mine based in Mount Isa, Queensland.
OZ Minerals said its production guidance for the year remained unchanged at 495,00 tonnes of zinc concentrate.
At the Sepon project in Laos, copper production was 17,217 tonnes and gold output was 26,422 tonnes.
OZ Minerals said its guidance for calendar 2009 copper production at Sepon was unchanged.
OZ Minerals recently recommended a revised offer from Minmetals that will deliver it $1.75 million in cash.
Minmetals hopes to acquire all of the companies metals mining assets, including Century, Sepon, Golden Grove, Rosebury, Avebury and Dugald River.
The deal excludes the Prominent Hill project in South Australia and selected assets in Cambodia and Thailand, which OZ Minerals will retain.
Minmetals had originally also wanted to acquire Prominent Hill.
OZ Minerals also said that it continued to working with its bank lenders to secure an extension to an upcoming debt maturity.
In late February, OZ Minerals got approval to extend the terms of its debt arrangements to March 31.
Its bankers then granted a further extension to April 30.
"The company continues to work with its lenders to secure a further extension to its facilities to 30 June 2009 to facilitate completion of the Minmetals transaction," OZ Minerals said.
The proposed transaction with Minmetals has been approved by the federal government and is awaiting Chinese government approvals.
Shareholders will vote on the deal at the company's annual general meeting in June.
Source: Melbourne Age
Vale Cutback May Strengthen Its Hand In Price Talks
A stiff cutback in iron ore output by Brazil's Vale could strengthen the company's hand in tough price talks with Chinese steel mills.
The company announced a year-on-year production drop of 37 per cent to 46.9 million tonnes for the first quarter of 2009.
“The emphasis is on operational flexibility, complemented by the priority given to minimising cost,” Vale said in its quarterly production report.
But the cost-cutting measures should also shrink global high-quality ore supplies and aid Vale’s bid to protect itself from a sharp price decrease this year.
Michael Zhu, president of Vale’s China unit, said the company was currently selling iron ore to the Chinese market at a provisional price equal to 80 per cent of the 2008 benchmark, with any price difference payable once a new benchmark is set, and backdated to April 1.
Mr Zhu noted that Chinese steel mills have sought a provisional price equal to only 60 per cent of the old benchmark.
Despite Chinese reluctance to settle without a large cut in iron ore prices, the country’s rising demand may force it to moderate its bargaining position.
Mr Zhu also noted the company’s intention to cut ore mining output by at least 25 per cent during 2009.
He described China’s iron ore demand outlook as healthy and said that Vale’s April ore exports to China were robust.
Brazil accounted for about 20 per cent of China’s monthly imports of iron ore in March. Vale is responsible for most of the total.
In its report, Vale also offered another clue to the buoyancy of Chinese demand.
Vale said steel output across Asia fell just 8.9 per cent in the first quarter, despite Japan’s recession. This would indicate continuing strength in Chinese demand, considering North American steel output fell 52 per cent and European output fell 44 per cent.
Furthermore, Vale said its first-quarter copper output was unchanged year-on-year, aided by Chinese consumer demand for durable goods.
Vale is regarded as one of only a few efficient iron ore miners that can make a profit at current low prices. Iron ore is selling on spot markets at around $US60 a tonne, compared to as high as $US200 last year.
Vale stepped back from negotiations aimed at setting an international benchmark price earlier this year, preferring to let Australia’s Rio Tinto and BHP Billiton take the lead in the talks.
Source: The Australian
The company announced a year-on-year production drop of 37 per cent to 46.9 million tonnes for the first quarter of 2009.
“The emphasis is on operational flexibility, complemented by the priority given to minimising cost,” Vale said in its quarterly production report.
But the cost-cutting measures should also shrink global high-quality ore supplies and aid Vale’s bid to protect itself from a sharp price decrease this year.
Michael Zhu, president of Vale’s China unit, said the company was currently selling iron ore to the Chinese market at a provisional price equal to 80 per cent of the 2008 benchmark, with any price difference payable once a new benchmark is set, and backdated to April 1.
Mr Zhu noted that Chinese steel mills have sought a provisional price equal to only 60 per cent of the old benchmark.
Despite Chinese reluctance to settle without a large cut in iron ore prices, the country’s rising demand may force it to moderate its bargaining position.
Mr Zhu also noted the company’s intention to cut ore mining output by at least 25 per cent during 2009.
He described China’s iron ore demand outlook as healthy and said that Vale’s April ore exports to China were robust.
Brazil accounted for about 20 per cent of China’s monthly imports of iron ore in March. Vale is responsible for most of the total.
In its report, Vale also offered another clue to the buoyancy of Chinese demand.
Vale said steel output across Asia fell just 8.9 per cent in the first quarter, despite Japan’s recession. This would indicate continuing strength in Chinese demand, considering North American steel output fell 52 per cent and European output fell 44 per cent.
Furthermore, Vale said its first-quarter copper output was unchanged year-on-year, aided by Chinese consumer demand for durable goods.
Vale is regarded as one of only a few efficient iron ore miners that can make a profit at current low prices. Iron ore is selling on spot markets at around $US60 a tonne, compared to as high as $US200 last year.
Vale stepped back from negotiations aimed at setting an international benchmark price earlier this year, preferring to let Australia’s Rio Tinto and BHP Billiton take the lead in the talks.
Source: The Australian
Tuesday, April 28, 2009
Highveld Reports Sharp Fall In Output
South Africa’s second-largest steel producer Highveld Steel & Vanadium reported a sharp fall in year-on-year production and prices for the first quarter ended March 31, 2009, relative to the same period last year.
In a notice to shareholders on Monday, the JSE-listed company reported that hot-metal output fell 31% to 125,251 t during the period, compared with the 181,603 t produced in the first three months of 2008.
The figure was also 18.7% lower than the 154,011 t produced during the fourth quarter of 2008.
Average steel prices were 6.7% down year-on-year at $696/t, from the $746/t achieved from January to the end of March 2008, and 23.9% lower than the $914/t achieved in the last quarter of 2008.
Ferrovanadium output fell by 29.2% to 1,2-million tons, compared with 1.7 million tons in the first quarter of 2008, but was 9.5% higher than the 1.1-million tons produced in the fourth quarter.
The price of ferrovanadium dropped by more than 42% to $27/kg, from $47/kg a year earlier. The price was also well down on the $44/kg achieved in the final quarter of 2008.
Source: Mining Weekly
In a notice to shareholders on Monday, the JSE-listed company reported that hot-metal output fell 31% to 125,251 t during the period, compared with the 181,603 t produced in the first three months of 2008.
The figure was also 18.7% lower than the 154,011 t produced during the fourth quarter of 2008.
Average steel prices were 6.7% down year-on-year at $696/t, from the $746/t achieved from January to the end of March 2008, and 23.9% lower than the $914/t achieved in the last quarter of 2008.
Ferrovanadium output fell by 29.2% to 1,2-million tons, compared with 1.7 million tons in the first quarter of 2008, but was 9.5% higher than the 1.1-million tons produced in the fourth quarter.
The price of ferrovanadium dropped by more than 42% to $27/kg, from $47/kg a year earlier. The price was also well down on the $44/kg achieved in the final quarter of 2008.
Source: Mining Weekly
Hebei Demands 40 Per Cent Iron Ore Price Cut
One of the China's biggest steel producers, Hebei Iron and Steel, has demanded that iron ore prices be slashed by at least 40 per cent this year.
Chinese production is expected to fall this year as exports drop by at least 20 per cent.
Even bigger production cuts are expected by Australia's two other main iron ore markets South Korea and Japan as global demand for steel continues to deteriorate.
China is now the biggest steel maker in the world, with global market share of about 38 per cent.
Benchmark negotiations between Australian miners and Chinese steel producers have become bogged down with the steel prices falling along with the Chinese spot price for iron ore, which has dropped below the benchmark price for the first time in the past few months.
Chinese steel mills remain in talks with BHP Billiton and Rio Tinto, with the China Iron & Steel Association saying yesterday that talks were still going, with a price drop agreed but not its level.
"Chinese steel mills and the three global miners have agreed on an iron ore price drop for 2009," CISA vice-chairman Luo Bingsheng said.
Brazilian firm Vale is not active in the talks but said it was selling its product at 80 per cent of last year's benchmark. Vale vice-president for China Michael Zhu referred to this as a "provisional pricing" plan.
"This is not a discount -- the difference will be returned once the 2009 term price is settled," he told Dow Jones. But Vale has backed out of the talks this year.
"The others can settle it and Vale will take the cue," Mr Zhu said. He said the company would cut output capacity by 25 per cent this year but Chinese mills were pushing for a better price cut.
Hubei Iron & Steel vice-president Tian Zhiping told the Metal Bulletin China Iron Ore conference in Beijing yesterday: "Iron ore suppliers and steel mills are close and irreplaceable partners who will rise and fall together only through mutual support and co-operation can we survive the global crisis together.
"The iron ore price shall go back to the level of 2007, this is a basic condition and the decrease is about 40 per cent or above.
"If we go back to the price of 2007, it's about a 44 per cent drop for Brazil and for Australia it's 44.4 per cent."
Chinese steel companies are suffering from having to pay prices set last year at the very tail of the resources boom and its steel exports have already slumped by 55 per cent for the first months of this year.
A leading Chinese government researcher in the sector called at the conference for the breaking of the benchmark system.
"We need to establish a new benchmark system of iron ore in our favour," Li Xinchuang, a researcher at the China Metallurgy Industry Research and Planning Institute, said.
"The price needs to be firm and stable and the current mechanism is not fair and reasonable.
"The steel industry in China also remains fractured and inefficient and is one of the main targets for industry rationalisation set by the country's leaders as part of it 4 trillion yuan stimulus package designed to boost domestic demand and consumption to help balance the ongoing plunge in demand for its goods," Mr Li said.
"There is irrational industrial distribution and that poses difficulties for the industry."
But despite fragmentation, Deloitte expects the top-five Chinese companies to account for 50 per cent of production by 2020.
A problem for China is that lower spot prices have forced low-grade local iron ore producers out of the market. increasing reliance on better quality ore from Australia and Brazil.
Source: The Australian
Chinese production is expected to fall this year as exports drop by at least 20 per cent.
Even bigger production cuts are expected by Australia's two other main iron ore markets South Korea and Japan as global demand for steel continues to deteriorate.
China is now the biggest steel maker in the world, with global market share of about 38 per cent.
Benchmark negotiations between Australian miners and Chinese steel producers have become bogged down with the steel prices falling along with the Chinese spot price for iron ore, which has dropped below the benchmark price for the first time in the past few months.
Chinese steel mills remain in talks with BHP Billiton and Rio Tinto, with the China Iron & Steel Association saying yesterday that talks were still going, with a price drop agreed but not its level.
"Chinese steel mills and the three global miners have agreed on an iron ore price drop for 2009," CISA vice-chairman Luo Bingsheng said.
Brazilian firm Vale is not active in the talks but said it was selling its product at 80 per cent of last year's benchmark. Vale vice-president for China Michael Zhu referred to this as a "provisional pricing" plan.
"This is not a discount -- the difference will be returned once the 2009 term price is settled," he told Dow Jones. But Vale has backed out of the talks this year.
"The others can settle it and Vale will take the cue," Mr Zhu said. He said the company would cut output capacity by 25 per cent this year but Chinese mills were pushing for a better price cut.
Hubei Iron & Steel vice-president Tian Zhiping told the Metal Bulletin China Iron Ore conference in Beijing yesterday: "Iron ore suppliers and steel mills are close and irreplaceable partners who will rise and fall together only through mutual support and co-operation can we survive the global crisis together.
"The iron ore price shall go back to the level of 2007, this is a basic condition and the decrease is about 40 per cent or above.
"If we go back to the price of 2007, it's about a 44 per cent drop for Brazil and for Australia it's 44.4 per cent."
Chinese steel companies are suffering from having to pay prices set last year at the very tail of the resources boom and its steel exports have already slumped by 55 per cent for the first months of this year.
A leading Chinese government researcher in the sector called at the conference for the breaking of the benchmark system.
"We need to establish a new benchmark system of iron ore in our favour," Li Xinchuang, a researcher at the China Metallurgy Industry Research and Planning Institute, said.
"The price needs to be firm and stable and the current mechanism is not fair and reasonable.
"The steel industry in China also remains fractured and inefficient and is one of the main targets for industry rationalisation set by the country's leaders as part of it 4 trillion yuan stimulus package designed to boost domestic demand and consumption to help balance the ongoing plunge in demand for its goods," Mr Li said.
"There is irrational industrial distribution and that poses difficulties for the industry."
But despite fragmentation, Deloitte expects the top-five Chinese companies to account for 50 per cent of production by 2020.
A problem for China is that lower spot prices have forced low-grade local iron ore producers out of the market. increasing reliance on better quality ore from Australia and Brazil.
Source: The Australian
Balla Balla Iron Ore Project Gets Go-Ahead
Pilbarra iron ore developer Aurox Resources has been given environmental approval for its Balla Balla project between Karratha and Port Hedland.
Environment Minister Donna Faragher gave approval to the WA company's 100 per cent owned iron ore project on, which will mine and process up to 10.1 million tonnes per annum of magnetite ore over 15 years.
Meanwhile, the Environmental Protection Authority today gave conditional approval for plans by Gindalbie Metals to mine iron ore at its Karara magnetite project east of Geraldton.
The Balla Balla project is expected to begin production in early 2012.
Mrs Faragher said there were stringent conditions on conserving flora and vegetation; managing fauna; protecting the quality of surface and groundwater; and ensuring site rehabilitation after the closure of the mine.
Aurox managing director, Charles Schaus, said, “This is a pivotal milestone for the company and its shareholders; one that ensures the Balla Balla Project will be developed as soon as the next stage of financing is secured.”
“Throughout the approval process there has been close co-operation between the company, the State Government and key project stakeholders, and we commend everyone involved for their efforts and patience.
“The Minister for Environment and the Office of the Appeals Convenor were particularly helpful in completing our approval.”
“Importantly, the environmental green light is the crucial approval financiers now look for when considering the commitment of funds to projects like Balla Balla, as they can be assured their investment can be put to work immediately.”
Representatives from Aurox arrived in Beijing on April 27 for discussions with potential investment groups and existing off-take partners.
Source: Perth Now
Environment Minister Donna Faragher gave approval to the WA company's 100 per cent owned iron ore project on, which will mine and process up to 10.1 million tonnes per annum of magnetite ore over 15 years.
Meanwhile, the Environmental Protection Authority today gave conditional approval for plans by Gindalbie Metals to mine iron ore at its Karara magnetite project east of Geraldton.
The Balla Balla project is expected to begin production in early 2012.
Mrs Faragher said there were stringent conditions on conserving flora and vegetation; managing fauna; protecting the quality of surface and groundwater; and ensuring site rehabilitation after the closure of the mine.
Aurox managing director, Charles Schaus, said, “This is a pivotal milestone for the company and its shareholders; one that ensures the Balla Balla Project will be developed as soon as the next stage of financing is secured.”
“Throughout the approval process there has been close co-operation between the company, the State Government and key project stakeholders, and we commend everyone involved for their efforts and patience.
“The Minister for Environment and the Office of the Appeals Convenor were particularly helpful in completing our approval.”
“Importantly, the environmental green light is the crucial approval financiers now look for when considering the commitment of funds to projects like Balla Balla, as they can be assured their investment can be put to work immediately.”
Representatives from Aurox arrived in Beijing on April 27 for discussions with potential investment groups and existing off-take partners.
Source: Perth Now
NZ Coal Mine To Close
Solid Energy will close its Terrace underground mine at Reefton in two months, its closure hastened by the world economic slowdown.
The mine, which employs 16 permanent and two fixed-term contract staff, had already lost about six staff over the last 18 months by natural attrition while its future was reviewed.
When the mine was last reviewed about 12 months ago, it was producing very good returns from the international market, said Solid Energy South Island operations manager Simon Doig.
"That underwrote continuing on with Terrace for another 12 months, but unfortunately the international market is in a different environment at the moment with the global credit crunch. That revenue is no longer there," Mr Doig said.
However, the closure was more to do with Terrace being a small, marginal, underground mine than the impact of the recession, he said.
Terrace produced 45,000 tonnes of thermal coal a year, mainly for the South Island industrial market.
In recent years, mining had reached depths of 230m, creating considerable engineering challenges, Mr Doig said.
"Unfortunately, we've reached a point where the costs of going deeper safely cannot be met by the lower returns for thermal coal."
Six workers will transfer to Spring Creek underground mine, near Greymouth, next month.
Solid Energy hoped the remainder would also get jobs at nearby Spring Creek or other Solid Energy mines after Terrace closes on June 26.
However, some miners had indicated they did not want to leave Reefton, Mr Doig said.
Century-old Terrace is Solid Energy's smallest mine.
Solid Energy was looking at resuming production at Island Block opencast mine, which had been in care and maintenance since 2002 after mining became uneconomic. Island Block contained about 5 million tonnes of semi-soft coking coal considered suitable for export.
Source: Stuff.co.nz
The mine, which employs 16 permanent and two fixed-term contract staff, had already lost about six staff over the last 18 months by natural attrition while its future was reviewed.
When the mine was last reviewed about 12 months ago, it was producing very good returns from the international market, said Solid Energy South Island operations manager Simon Doig.
"That underwrote continuing on with Terrace for another 12 months, but unfortunately the international market is in a different environment at the moment with the global credit crunch. That revenue is no longer there," Mr Doig said.
However, the closure was more to do with Terrace being a small, marginal, underground mine than the impact of the recession, he said.
Terrace produced 45,000 tonnes of thermal coal a year, mainly for the South Island industrial market.
In recent years, mining had reached depths of 230m, creating considerable engineering challenges, Mr Doig said.
"Unfortunately, we've reached a point where the costs of going deeper safely cannot be met by the lower returns for thermal coal."
Six workers will transfer to Spring Creek underground mine, near Greymouth, next month.
Solid Energy hoped the remainder would also get jobs at nearby Spring Creek or other Solid Energy mines after Terrace closes on June 26.
However, some miners had indicated they did not want to leave Reefton, Mr Doig said.
Century-old Terrace is Solid Energy's smallest mine.
Solid Energy was looking at resuming production at Island Block opencast mine, which had been in care and maintenance since 2002 after mining became uneconomic. Island Block contained about 5 million tonnes of semi-soft coking coal considered suitable for export.
Source: Stuff.co.nz
Steel Talks Yet To Conclude Though Parties Agree To Price Cut
Chinese steel mills have yet to conclude 2009 negotiations for iron ore prices with the world's top miners, as the two sides fail to agree on the extent of the price cut amid an uncertainty over demand.
Chinese mills have been in talks since the start of the year to finalise term prices with BHP Billiton , Rio Tinto and Brazil’s Vale .
“Chinese steel mills and the three global miners have agreed on an iron ore price drop for 2009,” Luo Bingsheng, vice chairman of the China Iron & Steel Association, said in its quarterly press briefing today.
But both parties are yet to decide on the level of the drop, he said.
The lack of an agreement has forced miners to sell more ore through spot deals.
While most purchases are being made at discounts of about 30 per cent to 40 per cent over last year’s prices, the sellers aren’t willing to lock in long-term contracts at such levels on expectations that there may be a revival in demand.
Chinese mills, on the other hand, want to extract the most given that they were forced to agree on a 70 per cent increase in prices last year due to sky-high prices of oil and services.
Mr Luo also said the industry has asked the government for more export tax rebates as stocks are piling up because weak local demand and overseas shipments have declined because of a fall in global consumption.
“We also suggested that the government should give export tax rebates to steel products immediately,” given that the country’s steel exports have dropped dramatically in the past few months, he said, without specifying any range.
China raised export tax rebates for some steel products since April 1, but no details are available on the size of the increase.
Mr Luo also said that imported steel products have had a “tremendous impact” on the local industry, and the CISA is closely watching the situation for any anti-dumping activities.
Iron ore inventories at local ports increased to 70 million tonnes in March, more than double than the normal level of 30 million tonnes
“But April iron ore imports won’t be as high as those in March,” Mr Luo said.
“One thing that is certain is that domestic iron ore demand will drop dramatically this year, and we expect iron ore imports in 2009 could fall below last year’s levels.”
Source: The Australian
Chinese mills have been in talks since the start of the year to finalise term prices with BHP Billiton , Rio Tinto and Brazil’s Vale .
“Chinese steel mills and the three global miners have agreed on an iron ore price drop for 2009,” Luo Bingsheng, vice chairman of the China Iron & Steel Association, said in its quarterly press briefing today.
But both parties are yet to decide on the level of the drop, he said.
The lack of an agreement has forced miners to sell more ore through spot deals.
While most purchases are being made at discounts of about 30 per cent to 40 per cent over last year’s prices, the sellers aren’t willing to lock in long-term contracts at such levels on expectations that there may be a revival in demand.
Chinese mills, on the other hand, want to extract the most given that they were forced to agree on a 70 per cent increase in prices last year due to sky-high prices of oil and services.
Mr Luo also said the industry has asked the government for more export tax rebates as stocks are piling up because weak local demand and overseas shipments have declined because of a fall in global consumption.
“We also suggested that the government should give export tax rebates to steel products immediately,” given that the country’s steel exports have dropped dramatically in the past few months, he said, without specifying any range.
China raised export tax rebates for some steel products since April 1, but no details are available on the size of the increase.
Mr Luo also said that imported steel products have had a “tremendous impact” on the local industry, and the CISA is closely watching the situation for any anti-dumping activities.
Iron ore inventories at local ports increased to 70 million tonnes in March, more than double than the normal level of 30 million tonnes
“But April iron ore imports won’t be as high as those in March,” Mr Luo said.
“One thing that is certain is that domestic iron ore demand will drop dramatically this year, and we expect iron ore imports in 2009 could fall below last year’s levels.”
Source: The Australian
Mongolia's Mining Hopes Hinge On Oyu Tolgoi
Mongolia's ambition to be a mining powerhouse may be hampered if it fails to quickly approve a $3 billion copper and gold project that has become a symbol of the difficulties of investing in the landlocked, mineral-rich country.
The Oyu Tolgoi proposal, a joint project between Ivanhoe Mines and Rio Tinto and endorsed by Mongolia's cabinet and National Security Council, is now in front of the parliament. A final decision is expected during this parliamentary session following years of bureaucratic infighting.
At issue is the extent of ownership Mongolia will ultimately demand, and the precedent that demand will set for future negotiations with regional and global players such as BHP Billiton and China Shenhua Energy Co Ltd -- who are hungry for a slice of the country's vast untapped mineral deposits.
"Oyu Tolgoi has become a burden, and until Oyu Tolgoi is approved, nothing else is going to move forward," Gerald Harper, senior vice president, Mongolian operations, for uranium miner Western Prospector Group Ltd, said at a recent conference in Hong Kong.
"Mongolia is very much focused on the concern that time is money," Harper added. "Given maybe a two-year delay before we get an investment agreement, followed by a three-year construction period, there's the possibility that we'll miss the next upcycle."
Rio Tinto and Ivanhoe both declined to comment.
Government officials say the delays are a result of wanting Oyu Tolgoi to set an example for other major deals that follow.
"This contract should become an exemplar and model contract for the exploitation of other strategically important big deposits," Badamsuren Khookhor, Mongolian parliament member and a leader of the Oyu Tolgoi working group, told Reuters.
"Some issues needed to be clarified," he added, referring to a combination of ownership, taxation and infrastructure-related issues that have held up the decision. "It should be perfected and discussed and approved promptly."
Mongolia's main export is copper, and mining at its peak accounted for 40 percent of government coffers even though fewer than 2 percent of Mongolians were formally employed in the sector.
Mongolia, whose annual per-capita income is about $1,200, wants to pull its 3 million people out of poverty with the country's uranium, lead, zinc, copper, gold, and coal deposits.
And it needs investment now more than ever, analysts say.
Nearly $1 billion in foreign loans and grants are tiding Mongolia through a collapse in mineral prices as the financial crisis crushes the value of its exports.
In the short term, the loans ease budgetary pressure, making the government less dependent on revenues from mining contracts to address the country's immediate needs.
Oyu Tolgoi will be Mongolia's largest foreign investment, with development costs reaching $7.3 billion. Ivanhoe initially struck a deal to develop the mine in 2006, but that pact was withdrawn last year when Mongolia sought more favourable terms as copper and gold prices soared.
The country's contentious 2006 mining law allows the state a share of up to 34 percent of deposits found with private funds and up to 50 percent of those discovered with state funds.
Investors expect a decision to be made soon to get their own projects off the ground. But with a presidential election scheduled for May 24, the government is distracted, making another delay likely, analysts say.
"It just pushes back the start date for a new wave of investment," said Andrew Driscoll, CLSA's head of resources research.
Oyu Tolgoi is just the beginning for Mongolia's government.
Looming on the horizon is a decision on Tavan Tolgoi, known as the world's biggest untapped coking coal deposit, with a coal reserve of 6.5 billion tonnes in the Gobi desert.
Mongolia has hired JP Morgan and Deutsche Bank to sell up to a 49 percent stake in the mine, which is drawing bids from Chinese coal giant China Shenhua, Peabody and world No.1 miner BHP Billiton, among others.
Negotiations for Oyu Tolgoi and Tavan Tolgoi have dragged on for years, outlasting the commodity boom as Mongolia sought the revenues that eluded it with previous mining projects.
In the longer term, Oyu Tolgoi and Tavan Tolgoi will be vital to Mongolia's ability to repay the loans, as well as maintain its independence from its two giant neighbours, China and Russia.
Any debates about Tavan Tolgoi could be bogged down by the infrastructure needs of the deposit, sources say.
"The issue is, how many schools are they going to build?" an investment banker with direct knowledge of the deal told Reuters.
But for now, lack of an official word on Oyu Tolgoi weighs.
"People are expecting that it should become a good contract that matches with interest of Mongolian people," Badamsuren Khookhor of Mongolia's parliament said.
"The public is anticipating its implementation."
Source: Reuters
The Oyu Tolgoi proposal, a joint project between Ivanhoe Mines and Rio Tinto and endorsed by Mongolia's cabinet and National Security Council, is now in front of the parliament. A final decision is expected during this parliamentary session following years of bureaucratic infighting.
At issue is the extent of ownership Mongolia will ultimately demand, and the precedent that demand will set for future negotiations with regional and global players such as BHP Billiton and China Shenhua Energy Co Ltd -- who are hungry for a slice of the country's vast untapped mineral deposits.
"Oyu Tolgoi has become a burden, and until Oyu Tolgoi is approved, nothing else is going to move forward," Gerald Harper, senior vice president, Mongolian operations, for uranium miner Western Prospector Group Ltd, said at a recent conference in Hong Kong.
"Mongolia is very much focused on the concern that time is money," Harper added. "Given maybe a two-year delay before we get an investment agreement, followed by a three-year construction period, there's the possibility that we'll miss the next upcycle."
Rio Tinto and Ivanhoe both declined to comment.
Government officials say the delays are a result of wanting Oyu Tolgoi to set an example for other major deals that follow.
"This contract should become an exemplar and model contract for the exploitation of other strategically important big deposits," Badamsuren Khookhor, Mongolian parliament member and a leader of the Oyu Tolgoi working group, told Reuters.
"Some issues needed to be clarified," he added, referring to a combination of ownership, taxation and infrastructure-related issues that have held up the decision. "It should be perfected and discussed and approved promptly."
Mongolia's main export is copper, and mining at its peak accounted for 40 percent of government coffers even though fewer than 2 percent of Mongolians were formally employed in the sector.
Mongolia, whose annual per-capita income is about $1,200, wants to pull its 3 million people out of poverty with the country's uranium, lead, zinc, copper, gold, and coal deposits.
And it needs investment now more than ever, analysts say.
Nearly $1 billion in foreign loans and grants are tiding Mongolia through a collapse in mineral prices as the financial crisis crushes the value of its exports.
In the short term, the loans ease budgetary pressure, making the government less dependent on revenues from mining contracts to address the country's immediate needs.
Oyu Tolgoi will be Mongolia's largest foreign investment, with development costs reaching $7.3 billion. Ivanhoe initially struck a deal to develop the mine in 2006, but that pact was withdrawn last year when Mongolia sought more favourable terms as copper and gold prices soared.
The country's contentious 2006 mining law allows the state a share of up to 34 percent of deposits found with private funds and up to 50 percent of those discovered with state funds.
Investors expect a decision to be made soon to get their own projects off the ground. But with a presidential election scheduled for May 24, the government is distracted, making another delay likely, analysts say.
"It just pushes back the start date for a new wave of investment," said Andrew Driscoll, CLSA's head of resources research.
Oyu Tolgoi is just the beginning for Mongolia's government.
Looming on the horizon is a decision on Tavan Tolgoi, known as the world's biggest untapped coking coal deposit, with a coal reserve of 6.5 billion tonnes in the Gobi desert.
Mongolia has hired JP Morgan and Deutsche Bank to sell up to a 49 percent stake in the mine, which is drawing bids from Chinese coal giant China Shenhua, Peabody and world No.1 miner BHP Billiton, among others.
Negotiations for Oyu Tolgoi and Tavan Tolgoi have dragged on for years, outlasting the commodity boom as Mongolia sought the revenues that eluded it with previous mining projects.
In the longer term, Oyu Tolgoi and Tavan Tolgoi will be vital to Mongolia's ability to repay the loans, as well as maintain its independence from its two giant neighbours, China and Russia.
Any debates about Tavan Tolgoi could be bogged down by the infrastructure needs of the deposit, sources say.
"The issue is, how many schools are they going to build?" an investment banker with direct knowledge of the deal told Reuters.
But for now, lack of an official word on Oyu Tolgoi weighs.
"People are expecting that it should become a good contract that matches with interest of Mongolian people," Badamsuren Khookhor of Mongolia's parliament said.
"The public is anticipating its implementation."
Source: Reuters
Monday, April 27, 2009
ArcelorMittal Delays Liberia Iron Ore Exports
Global steel giant ArcelorMittal announced late on Monday that it is delaying plans to export iron ore from Liberia because of the global economic crisis and that some 1,200 contractors will be laid off.
The company, the first to start a big foreign investment in post-war Liberia, is investing more than $1.5 billion in the iron ore industry and was set to start exporting ore this year, said Joseph Mathews, chief executive officer of ArcelorMittal Liberia.
Mathews told The Associated Press that the company has almost halved its global steel production in the current economic downturn, and that in turn has reduced the demand for iron ore.
Mathews said the company originally had planned to ship iron ore out of the West African nation later this year but that the company will now "postpone that to maybe 2010, 2011."
Some 1,200 workers who were employed by a contracting company to build a railway to transport iron ore from the mining site will have to be laid off because "the contract has been terminated."
"We put a stop to our construction activities," he said, adding that the termination of the railway contract "is definite."
Liberia's Lands, Mines and Energy Minister Eugene Shannon said the company's management needs to explain whether the slowdown also will affect money the company was due to pay to the Liberian government.
Shannon wants ArcelorMittal Liberia to state when the company will start exporting ore and what happens to the portion of the agreement relating to exports this year.
"The Mineral Development Agreement also talks about employment opportunities for our people; he needs to explain what happens to this," Shannon said.
The concession agreement grants the right to ArcelorMittal to export 12 million tonnes of ore a year for 25 years.
Liberia was ravaged by civil wars for years until 2003. The drawn-out conflict that began in 1989 left about 200,000 people dead and displaced half the country's population of 3 million.
Source: Associated Press
The company, the first to start a big foreign investment in post-war Liberia, is investing more than $1.5 billion in the iron ore industry and was set to start exporting ore this year, said Joseph Mathews, chief executive officer of ArcelorMittal Liberia.
Mathews told The Associated Press that the company has almost halved its global steel production in the current economic downturn, and that in turn has reduced the demand for iron ore.
Mathews said the company originally had planned to ship iron ore out of the West African nation later this year but that the company will now "postpone that to maybe 2010, 2011."
Some 1,200 workers who were employed by a contracting company to build a railway to transport iron ore from the mining site will have to be laid off because "the contract has been terminated."
"We put a stop to our construction activities," he said, adding that the termination of the railway contract "is definite."
Liberia's Lands, Mines and Energy Minister Eugene Shannon said the company's management needs to explain whether the slowdown also will affect money the company was due to pay to the Liberian government.
Shannon wants ArcelorMittal Liberia to state when the company will start exporting ore and what happens to the portion of the agreement relating to exports this year.
"The Mineral Development Agreement also talks about employment opportunities for our people; he needs to explain what happens to this," Shannon said.
The concession agreement grants the right to ArcelorMittal to export 12 million tonnes of ore a year for 25 years.
Liberia was ravaged by civil wars for years until 2003. The drawn-out conflict that began in 1989 left about 200,000 people dead and displaced half the country's population of 3 million.
Source: Associated Press
Richards Bay Coal Prices Fall For Second Week Running
Prices for coal shipped from South Africa’s Richards Bay, site of the world’s largest export terminal for the fuel, fell for a second consecutive week on weaker demand and sufficient stockpiles in Europe.
Export prices at the port, Europe’s biggest single source for coal burned for power, dropped $1.30, or 2.1 percent, to an average of $61.50 a metric ton in the week ended April 24, according to McCloskey Group Ltd. Prices have fallen 45 percent over the past 12 months as demand for power slumped after manufacturers cut output to grapple with the global recession. The world economy will shrink 1.3 percent this year, according to the International Monetary Fund.
“There’s lots of stocks in Europe and not many buyers around,” John Howland, an analyst at McCloskey Group Ltd., said today by telephone. The “coal of choice” at the moment in Europe is Colombian, he said. That may ease demand for South African imports.
Colombian coal supplies may increase after a strike ended this month at Fenoco, a rail company 40 percent-owned by Xstrata Plc. That, plus the end of weather disruption in Australia, will help push prices down to an average $55 a ton in the second and third quarters, Jim Lennon, a Macquarie Group Ltd. analyst in London, wrote in a report dated today. “The market is generally well-supplied,” he said.
The port of Rotterdam, Europe’s biggest, imported 7.7 million tons of coal in the first quarter of this year, up 24 percent from the same period of 2008, the port said in an e-mail on April 9. That may indicate a buildup of stocks.
Power station coal prices at Australia’s Newcastle port, a benchmark for Asia, were almost unchanged in the week to April 24, falling one cent to $63.11 a metric ton, according to the globalCOAL NEWC Index.
Source: Bloomberg
Export prices at the port, Europe’s biggest single source for coal burned for power, dropped $1.30, or 2.1 percent, to an average of $61.50 a metric ton in the week ended April 24, according to McCloskey Group Ltd. Prices have fallen 45 percent over the past 12 months as demand for power slumped after manufacturers cut output to grapple with the global recession. The world economy will shrink 1.3 percent this year, according to the International Monetary Fund.
“There’s lots of stocks in Europe and not many buyers around,” John Howland, an analyst at McCloskey Group Ltd., said today by telephone. The “coal of choice” at the moment in Europe is Colombian, he said. That may ease demand for South African imports.
Colombian coal supplies may increase after a strike ended this month at Fenoco, a rail company 40 percent-owned by Xstrata Plc. That, plus the end of weather disruption in Australia, will help push prices down to an average $55 a ton in the second and third quarters, Jim Lennon, a Macquarie Group Ltd. analyst in London, wrote in a report dated today. “The market is generally well-supplied,” he said.
The port of Rotterdam, Europe’s biggest, imported 7.7 million tons of coal in the first quarter of this year, up 24 percent from the same period of 2008, the port said in an e-mail on April 9. That may indicate a buildup of stocks.
Power station coal prices at Australia’s Newcastle port, a benchmark for Asia, were almost unchanged in the week to April 24, falling one cent to $63.11 a metric ton, according to the globalCOAL NEWC Index.
Source: Bloomberg
Chinese Ferromanganese Prices "Hit Bottom"
It is reported that despite a surge in China's domestic price of electrolytic manganese price, SiMn and FeMn markets remain weak. SiMn6517 is mainly quoted at CNY 6,600 to 7,000 per tonne and SiMn6014 is offered at CNY 5,500 to 5,900 per tonne. Prices now stands at CNY 6,600 to 6,800 per tonne for high carbon FeMn Mn 65% and 8,000 yuan/ton for medium carbon FeMn Mn75C2.0. Many alloy producers complain about dull sales as price has dived near cost line.
According to one Hunan-based producer, profit remains at some CNY 100 per tonne at the moment. The producer maintains production yet is worried about future market owing to stagnant sales and low purchase prices.
Many steelmakers offer purchase prices at no more than CNY 6,700 per tonne for high carbon FeMn Mn65%. FerMn market is unlikely to revive in a short term.
One SiMn producer in Guangxi has quoted SiMn6517 at CNY 6,600 per tonne, a level near to production cost. The producer is also pessimistic about the future market since demand is unlikely to rebound.
Market analysts believe that prices for SiMn and FeMn have dropped to the bottom and hence will not fall dramatically in coming days on any buoyancy in production costs.
Source: Steel Guru
According to one Hunan-based producer, profit remains at some CNY 100 per tonne at the moment. The producer maintains production yet is worried about future market owing to stagnant sales and low purchase prices.
Many steelmakers offer purchase prices at no more than CNY 6,700 per tonne for high carbon FeMn Mn65%. FerMn market is unlikely to revive in a short term.
One SiMn producer in Guangxi has quoted SiMn6517 at CNY 6,600 per tonne, a level near to production cost. The producer is also pessimistic about the future market since demand is unlikely to rebound.
Market analysts believe that prices for SiMn and FeMn have dropped to the bottom and hence will not fall dramatically in coming days on any buoyancy in production costs.
Source: Steel Guru
Yanzhou Coal Lowers Sales Target
Yanzhou Coal Mining Co lowered its 2009 sales target to 6.7 percent below its 2008 sales volume after reporting a first quarter profit fallof 48.5 percent, hurt by falling demand and prices.
The Chinese coal producer said late on Sunday it planned to sell 35.05 million tonnes of coal in 2009, compared with 37.56 million tonnes in 2008. Coal for export is estimated to be at 0.5 million tonnes for the year, down from 1.8 tonnes in 2008.
However, the company said government measures to stimulate economic growth would lift domestic demand for coal.
Yanzhou Coal said its first quarter net profit fell 48.5 percent year-on-year to 831 million yuan ($121.8 million) in accordance with Chinese accounting standards as demand and coal prices fell.
Sales volume fell 11.9 percent year-on-year during the quarter to 7.92 million tonnes, and the average coal price fell 15.1 percent to 492.66 yuan per tonne, it said.
"In view of the challenges ahead, we will speed up the construction of current projects and keep looking for new investment opportunities in both domestic and overseas markets ... so as to expand our coal mine assets and increase our sustainable development capability," chairman Wang Xin said in the statement.
The Chinese coal producer said its net income attributable to equity holders doubled to 6.49 billion yuan for 2008, from 3.23 billion yuan a year ago, as coal prices jumped during the year before a significant drop in the fourth quarter.
Source: Reuters
The Chinese coal producer said late on Sunday it planned to sell 35.05 million tonnes of coal in 2009, compared with 37.56 million tonnes in 2008. Coal for export is estimated to be at 0.5 million tonnes for the year, down from 1.8 tonnes in 2008.
However, the company said government measures to stimulate economic growth would lift domestic demand for coal.
Yanzhou Coal said its first quarter net profit fell 48.5 percent year-on-year to 831 million yuan ($121.8 million) in accordance with Chinese accounting standards as demand and coal prices fell.
Sales volume fell 11.9 percent year-on-year during the quarter to 7.92 million tonnes, and the average coal price fell 15.1 percent to 492.66 yuan per tonne, it said.
"In view of the challenges ahead, we will speed up the construction of current projects and keep looking for new investment opportunities in both domestic and overseas markets ... so as to expand our coal mine assets and increase our sustainable development capability," chairman Wang Xin said in the statement.
The Chinese coal producer said its net income attributable to equity holders doubled to 6.49 billion yuan for 2008, from 3.23 billion yuan a year ago, as coal prices jumped during the year before a significant drop in the fourth quarter.
Source: Reuters
Sunday, April 26, 2009
Russian Steelmakers Eye Iron Ore Talks
Russian steelmakers are nervously looking east, waiting to see what effect a series of deals hammered out in China will have on their own fortunes.
Traditionally, on April 1, the start of China's fiscal year, Russia's steel producers hold negotiations with iron ore miners to work out the terms of their annual contracts.
Chinese iron ore producers are reluctant to agree to contracts that by UralSib's estimates will likely represent a 30 percent to 40 percent price cut from last year because of low steel prices worldwide. And the longer they wait to accept it, the greater advantage low-cost steel exporters such as Russia have.
Usually, an agreement is reached in April; last year it was reached in June. This year, it could drag on even longer.
Since 2008, Russia has grown from the fifth-largest steel exporter to the largest thanks to the ruble's devaluation and a troika of competitive advantages: raw materials, inexpensive labour and low energy costs. Severstal, the country's biggest steelmaker, announced Friday that it would be exporting half of its output this year because of rising demand in Southeast Asia.
The Russian steel industry as a whole is seeing roughly 70 percent of its flat steel and 30 percent of its long steel sent abroad, Renaissance Capital metals analyst Rob Edwards said.
But the industry, which is capitalizing on the higher prices that it can manage on Asian markets, will see the heyday come to an end when China's iron ore agreements are finalized. With a lower production cost, local steel is likely to sweep out most competitors.
"When the iron ore price falls, the relative cost position of the Russians may weaken," said Michael Kavanagh, a senior metals analyst at UralSib. "In other words, the cost curve might flatten."
The increased volume on the market will also help drive out foreign competition.
"Once costs come down in Asia, the domestic Asian producers are going to ship more, and that's going to displace some of the Russian tonnages that are being shipped there," Edwards said. "That tonnage has to find a home somewhere else, hopefully by which time domestic demand will have recovered."
That somewhere else will have to be the domestic market, where summer usually represents a peak in demand. So far, apparent demand for steel here is down approximately 30 percent year on year, while real demand has probably fallen 25 percent, Edwards said.
Russian steel production bottomed out in December, when the country produced 3.3 million tons over the month. But output has been rising steadily since, with production reaching 4.6 million tons in March. China, the world's top producer, posted a rise of 1.4 percent in the first quarter for 45 million tons in March.
A small market rally and revving output helped steel stocks recover their losses after a miserable Monday, though analysts were of different minds concerning what lies ahead for the sector.
Bucking the trend was Magnitogorsk Iron & Steel Works, or MMK, whose Global Depositary Receipts gained 6 percent over the week in London after Bank of America bumped it up to "buy," citing increased domestic demand. The GDRs had fallen 6.3 percent last Monday.
Others were not so lucky, with a round of bad marks from banks weighing on sentiment. ING cut Severstal and Evraz to "sell" on lower steel price forecasts. Severstal also got a downgrade from Credit Suisse, which lowered both it and Novolipetsk Steel, or NLMK, to "underperform," also citing weaker prices.
Severstal's London-traded shares fell 9.9 percent Monday and limped back to close the week down 4.3 percent. NLMK shed 6.7 percent on the week's first day and closed on Friday down 5.5 percent for the period. Evraz recovered from a 5.6 opener in London to end the week down 0.5 percent.
Coal and steel maker Mechel had the biggest first-day drop, sinking 14.8 percent in New York, though it managed to finish the week behind just 1.4 percent after saying Wednesday that it would buy the coking-coal assets of Bluestone Coal for at least $1.4 billion.
Source: Moscow Times
Traditionally, on April 1, the start of China's fiscal year, Russia's steel producers hold negotiations with iron ore miners to work out the terms of their annual contracts.
Chinese iron ore producers are reluctant to agree to contracts that by UralSib's estimates will likely represent a 30 percent to 40 percent price cut from last year because of low steel prices worldwide. And the longer they wait to accept it, the greater advantage low-cost steel exporters such as Russia have.
Usually, an agreement is reached in April; last year it was reached in June. This year, it could drag on even longer.
Since 2008, Russia has grown from the fifth-largest steel exporter to the largest thanks to the ruble's devaluation and a troika of competitive advantages: raw materials, inexpensive labour and low energy costs. Severstal, the country's biggest steelmaker, announced Friday that it would be exporting half of its output this year because of rising demand in Southeast Asia.
The Russian steel industry as a whole is seeing roughly 70 percent of its flat steel and 30 percent of its long steel sent abroad, Renaissance Capital metals analyst Rob Edwards said.
But the industry, which is capitalizing on the higher prices that it can manage on Asian markets, will see the heyday come to an end when China's iron ore agreements are finalized. With a lower production cost, local steel is likely to sweep out most competitors.
"When the iron ore price falls, the relative cost position of the Russians may weaken," said Michael Kavanagh, a senior metals analyst at UralSib. "In other words, the cost curve might flatten."
The increased volume on the market will also help drive out foreign competition.
"Once costs come down in Asia, the domestic Asian producers are going to ship more, and that's going to displace some of the Russian tonnages that are being shipped there," Edwards said. "That tonnage has to find a home somewhere else, hopefully by which time domestic demand will have recovered."
That somewhere else will have to be the domestic market, where summer usually represents a peak in demand. So far, apparent demand for steel here is down approximately 30 percent year on year, while real demand has probably fallen 25 percent, Edwards said.
Russian steel production bottomed out in December, when the country produced 3.3 million tons over the month. But output has been rising steadily since, with production reaching 4.6 million tons in March. China, the world's top producer, posted a rise of 1.4 percent in the first quarter for 45 million tons in March.
A small market rally and revving output helped steel stocks recover their losses after a miserable Monday, though analysts were of different minds concerning what lies ahead for the sector.
Bucking the trend was Magnitogorsk Iron & Steel Works, or MMK, whose Global Depositary Receipts gained 6 percent over the week in London after Bank of America bumped it up to "buy," citing increased domestic demand. The GDRs had fallen 6.3 percent last Monday.
Others were not so lucky, with a round of bad marks from banks weighing on sentiment. ING cut Severstal and Evraz to "sell" on lower steel price forecasts. Severstal also got a downgrade from Credit Suisse, which lowered both it and Novolipetsk Steel, or NLMK, to "underperform," also citing weaker prices.
Severstal's London-traded shares fell 9.9 percent Monday and limped back to close the week down 4.3 percent. NLMK shed 6.7 percent on the week's first day and closed on Friday down 5.5 percent for the period. Evraz recovered from a 5.6 opener in London to end the week down 0.5 percent.
Coal and steel maker Mechel had the biggest first-day drop, sinking 14.8 percent in New York, though it managed to finish the week behind just 1.4 percent after saying Wednesday that it would buy the coking-coal assets of Bluestone Coal for at least $1.4 billion.
Source: Moscow Times
Bayan Seeks To Extend Clean Coal JV
Coal miner Bayan Resources intends to extend a joint venture constructing clean coal plants, to strengthen the company’s position among Indonesian coal firms.
Bayan and White Energy Co. plan to expand the upgrading capacity of the existing joint venture in Indonesia from the current 5 million tons of coal per year to 15 million tons a year.
Bayan and White Energy have sought talks with a few banks to seek debt facilities to assist an accelerated rollout of additional coal upgrading plants in the near term. The two firms will seek to negotiate refinancing for part of the equity contributed by both partners on the first plant.
Bayan’s joint venture with a White Energy unit, PT Kaltim Supacoal, recently completed construction of a modular clean coal plant capable of upgrading up to a million tons of coal every year.
“With the expansion of the joint venture, and the completion of the first clean coal upgrading plant, we are confident that this will increase the value of our reserves of low sulfur sub-bituminous coal, while maintaining a leading position in supplying premium-value, environmentally-friendly upgraded briquettes into the Asian market,” Eddie Chin, president director at Bayan, said in a statement late last week.
Bayan is one of the few Indonesian coal miners that mines and sell high-calorific value coal, aside from other grades of coal, including more environmentally-friendly, low-sulfur sub-bituminous coal and semi-soft coking coal.
The plant at Bayan’s Tabang mine in East Kalimantan Province will use White Energy’s exclusive Binderless Coal Briquetting, or BCB, a clean coal upgrading technology that would give Bayan a competitive edge in its operation and production costs.
Production at the plant is expected to be ramped up to full capacity by the end of this year, with export sales of the more valuable and environmentally friendly BCB coal to start then.
The company estimated that its average cost of production of upgraded BCB coal would be lower than the mining costs for most global thermal coal producers.
Bayan estimates that the upgraded coal will be marketable with a similar or premium price to conventional thermal coal, due to the similar energy yield and its environmental edge, with lower ash and sulfur content. .
Based on test results, the BCB clean coal upgrading technology will allow Bayan’s Tabang low calorie sub-bituminous coal of 4,200 Kcal/kilogram to be upgraded to 6,100 Kcal/kg, while maintaining the low sulfur content of 0.2 percent and low ash content of 3 percent
Bayan estimated that the BCB coal upgrading process is expected to enjoy a favorable long-term coal upgrading price arbitrage.
Source: Jakarta Globe
Bayan and White Energy Co. plan to expand the upgrading capacity of the existing joint venture in Indonesia from the current 5 million tons of coal per year to 15 million tons a year.
Bayan and White Energy have sought talks with a few banks to seek debt facilities to assist an accelerated rollout of additional coal upgrading plants in the near term. The two firms will seek to negotiate refinancing for part of the equity contributed by both partners on the first plant.
Bayan’s joint venture with a White Energy unit, PT Kaltim Supacoal, recently completed construction of a modular clean coal plant capable of upgrading up to a million tons of coal every year.
“With the expansion of the joint venture, and the completion of the first clean coal upgrading plant, we are confident that this will increase the value of our reserves of low sulfur sub-bituminous coal, while maintaining a leading position in supplying premium-value, environmentally-friendly upgraded briquettes into the Asian market,” Eddie Chin, president director at Bayan, said in a statement late last week.
Bayan is one of the few Indonesian coal miners that mines and sell high-calorific value coal, aside from other grades of coal, including more environmentally-friendly, low-sulfur sub-bituminous coal and semi-soft coking coal.
The plant at Bayan’s Tabang mine in East Kalimantan Province will use White Energy’s exclusive Binderless Coal Briquetting, or BCB, a clean coal upgrading technology that would give Bayan a competitive edge in its operation and production costs.
Production at the plant is expected to be ramped up to full capacity by the end of this year, with export sales of the more valuable and environmentally friendly BCB coal to start then.
The company estimated that its average cost of production of upgraded BCB coal would be lower than the mining costs for most global thermal coal producers.
Bayan estimates that the upgraded coal will be marketable with a similar or premium price to conventional thermal coal, due to the similar energy yield and its environmental edge, with lower ash and sulfur content. .
Based on test results, the BCB clean coal upgrading technology will allow Bayan’s Tabang low calorie sub-bituminous coal of 4,200 Kcal/kilogram to be upgraded to 6,100 Kcal/kg, while maintaining the low sulfur content of 0.2 percent and low ash content of 3 percent
Bayan estimated that the BCB coal upgrading process is expected to enjoy a favorable long-term coal upgrading price arbitrage.
Source: Jakarta Globe
China Knocked Back Guinea Iron Deal
China has underscored its power in the developing world by revealing it was offered a huge African iron ore field seized from Rio Tinto, but declined out of "sensitivity" to international repercussions.
The offer, by late Guinea dictator Lansana Conte to Chinese companies including Chinalco, has implications for the Australia-China relationship, and Chinalco's $US19.5 billion ($A27 billion) investment bid in Rio Tinto.
Rio had sunk $600 million into Guinea's Simandou iron ore concession and had planned to invest another $10 billion to make it the largest iron ore mine outside of Australia and Brazil.
Wang Wenfu, who leads Chinalco's overseas acquisition team, which includes its pursuit of 18 per cent of Rio Tinto, told The Age that the Guinean Government last year offered to hand Rio Tinto's iron ore tenement to Chinese state-owned companies in exchange for railways, roads, ports and hydroelectricity projects.
The Chinese Government has already built a 50,000-seat sports stadium, a national assembly building and other landmarks in the Guinean capital, Conakry, and provided services including training for the army's special forces.
"The Guinea Government was trying everyone in China, including Chinalco," Mr Wang said.
Ultimately, some time after the August Olympics, attended by Mr Conte, Beijing declined.
"The Chinese Government encourages Chinese companies to go to Africa, but they are also sensitive to the international results," said Mr Wang. "Chinalco said no - it wouldn't have been professional."
He added African countries wanted to work with the Chinese Government because of its history of support there, demonstrating how China's influence in Africa could prove useful for Rio and Australia.
"It's an example of how Chinalco could enhance the position of Rio Tinto. This sort of thing is happening wherever you go in Africa." He also said China might not be so accommodating of Australia's international interests if Chinalco's investment in Rio was not approved by the Australian Government.
The episode shows how China is pulling back from a previously gung-ho attitude to investing in unstable developing nations.
"China is getting better aware of the practices of African governments to divide and rule among Chinese companies and foreign powers," said Zha Daojiong, professor of international relations at Peking University.
But China's decision refuse the multibillion dollar deal has not yet helped Rio Tinto's interests in Africa.
Late last year Mr Conte handed the northern half of Rio's Simandou tenement to BSG Resources Mining & Metals, controlled by a controversial Israeli diamond-mining billionaire, Benny Steinmetz. "Mr Steinmetz will see us in court," said Sam Walsh, head of Rio Tinto's iron ore division.
In one version of events, Guinean politicians decided to end Rio's tenement at Simandou because they were unhappy that Rio wanted to connect the proposed mine directly to an existing port in Liberia, rather than build a railway along the length of Guinea to a new port on its coast.
"For them, it's if you invest in our infrastructure, we'll pay you back with mining resources," said Mr Wang.
In another version, Rio was also considering the indirect railway-and-port option and only lost its grip on Simandou when some Beijing leaders systematically courted Mr Conte.
Mr Walsh said his company had talked with Chinalco - which has bauxite exploration activities in Guinea - about running Simandou as a joint venture, but the discussions were superseded by more comprehensive investment talks after BHP Billiton dropped its hostile takeover bid for Rio Tinto in November.
Guinea is one of the world's poorest and most ill-governed nations, with annual per capita income of just $US442 ($A612) and is ranked 173 out of 180 countries on Transparency International's corruption perception index.
In late December, Captain Moussa Dadis Camara announced that Mr Conte had died and that he had seized power.
Mr Walsh said the new dictator has not overturned his predecessor's decision to deprive Rio of its tenement rights. "We're now in a hiatus," said Mr Walsh, "But we are confident we retain legal rights to the full Simandou tenement."
Rio has said it plans to mine more than 70 million tonnes of iron ore a year in Simandou and possibly as much as 170 million.
Mr Walsh said Rio had been reducing its work in the southern half of the tenement, where the company has focused on development, until clarity was restored.
Source: Melbourne Age
The offer, by late Guinea dictator Lansana Conte to Chinese companies including Chinalco, has implications for the Australia-China relationship, and Chinalco's $US19.5 billion ($A27 billion) investment bid in Rio Tinto.
Rio had sunk $600 million into Guinea's Simandou iron ore concession and had planned to invest another $10 billion to make it the largest iron ore mine outside of Australia and Brazil.
Wang Wenfu, who leads Chinalco's overseas acquisition team, which includes its pursuit of 18 per cent of Rio Tinto, told The Age that the Guinean Government last year offered to hand Rio Tinto's iron ore tenement to Chinese state-owned companies in exchange for railways, roads, ports and hydroelectricity projects.
The Chinese Government has already built a 50,000-seat sports stadium, a national assembly building and other landmarks in the Guinean capital, Conakry, and provided services including training for the army's special forces.
"The Guinea Government was trying everyone in China, including Chinalco," Mr Wang said.
Ultimately, some time after the August Olympics, attended by Mr Conte, Beijing declined.
"The Chinese Government encourages Chinese companies to go to Africa, but they are also sensitive to the international results," said Mr Wang. "Chinalco said no - it wouldn't have been professional."
He added African countries wanted to work with the Chinese Government because of its history of support there, demonstrating how China's influence in Africa could prove useful for Rio and Australia.
"It's an example of how Chinalco could enhance the position of Rio Tinto. This sort of thing is happening wherever you go in Africa." He also said China might not be so accommodating of Australia's international interests if Chinalco's investment in Rio was not approved by the Australian Government.
The episode shows how China is pulling back from a previously gung-ho attitude to investing in unstable developing nations.
"China is getting better aware of the practices of African governments to divide and rule among Chinese companies and foreign powers," said Zha Daojiong, professor of international relations at Peking University.
But China's decision refuse the multibillion dollar deal has not yet helped Rio Tinto's interests in Africa.
Late last year Mr Conte handed the northern half of Rio's Simandou tenement to BSG Resources Mining & Metals, controlled by a controversial Israeli diamond-mining billionaire, Benny Steinmetz. "Mr Steinmetz will see us in court," said Sam Walsh, head of Rio Tinto's iron ore division.
In one version of events, Guinean politicians decided to end Rio's tenement at Simandou because they were unhappy that Rio wanted to connect the proposed mine directly to an existing port in Liberia, rather than build a railway along the length of Guinea to a new port on its coast.
"For them, it's if you invest in our infrastructure, we'll pay you back with mining resources," said Mr Wang.
In another version, Rio was also considering the indirect railway-and-port option and only lost its grip on Simandou when some Beijing leaders systematically courted Mr Conte.
Mr Walsh said his company had talked with Chinalco - which has bauxite exploration activities in Guinea - about running Simandou as a joint venture, but the discussions were superseded by more comprehensive investment talks after BHP Billiton dropped its hostile takeover bid for Rio Tinto in November.
Guinea is one of the world's poorest and most ill-governed nations, with annual per capita income of just $US442 ($A612) and is ranked 173 out of 180 countries on Transparency International's corruption perception index.
In late December, Captain Moussa Dadis Camara announced that Mr Conte had died and that he had seized power.
Mr Walsh said the new dictator has not overturned his predecessor's decision to deprive Rio of its tenement rights. "We're now in a hiatus," said Mr Walsh, "But we are confident we retain legal rights to the full Simandou tenement."
Rio has said it plans to mine more than 70 million tonnes of iron ore a year in Simandou and possibly as much as 170 million.
Mr Walsh said Rio had been reducing its work in the southern half of the tenement, where the company has focused on development, until clarity was restored.
Source: Melbourne Age
Chinese Mills Turn To Imported Iron Ore
A Chinese domestic steel mill, Tangshan Ganglu Iron and Steel Co., Ltd., has been using 100 percent imported iron ore in production since March -- though in January, domestic iron ore made up for about 30 percent of the total raw materials.
The company, based in Zunhua in north China's Hebei Province, is one of the domestic mills that have been using more imported iron ore.
"Imported iron ore is cheaper than domestic one and with higher quality," said a manager with the company who declined to be named.
Analysts said the global iron ore big three, Vale, Rio Tinto and BHP, have been competing for Chinese markets as the demand in parts of the world has been shrinking amid global financial crisis.
Zhu Kai, Vale's China manager, said that about 100 million tonnes of domestic iron ore at high costs might be replaced by imported iron ore which had price advantages.
China imported a record volume of iron ore in March, 52.08 million tonnes. It beat the previous record set in February when the country imported 46.74 million tonnes of iron ore.
The country imported 130 million tonnes of iron ore in the first quarter.
The three global giants "dumping" iron ore to China will suppress domestic supply and cement their control over global mineral resources, said Zhang Ye, deputy-general-manager of China National Minerals Co., Ltd.
China might have a lesser say in the ongoing benchmark iron ore price negotiations, Zhang said.
Analysts reckoned the negotiations between China's steel companies and iron ore miners could last until mid-year, which would be a record.
The benchmark price for China is significant for the overall situation of the iron ore firms, as China's demand for iron ore in 2008 was 444 million tonnes, more than half of the world's total.
Iron ore and steel companies usually agree on the year's long-term contract prices by April 1, the start of a financial year. However, steel makers and iron ore companies are deadlocked this year.
"About 90 percent of China's iron ore mines are suffering from losses," said Du Wei, an analyst with Umetal.com. "The domestic mining firms would be under great pressure if the imported iron ore prices continued to go down."
Source: Xinhua
The company, based in Zunhua in north China's Hebei Province, is one of the domestic mills that have been using more imported iron ore.
"Imported iron ore is cheaper than domestic one and with higher quality," said a manager with the company who declined to be named.
Analysts said the global iron ore big three, Vale, Rio Tinto and BHP, have been competing for Chinese markets as the demand in parts of the world has been shrinking amid global financial crisis.
Zhu Kai, Vale's China manager, said that about 100 million tonnes of domestic iron ore at high costs might be replaced by imported iron ore which had price advantages.
China imported a record volume of iron ore in March, 52.08 million tonnes. It beat the previous record set in February when the country imported 46.74 million tonnes of iron ore.
The country imported 130 million tonnes of iron ore in the first quarter.
The three global giants "dumping" iron ore to China will suppress domestic supply and cement their control over global mineral resources, said Zhang Ye, deputy-general-manager of China National Minerals Co., Ltd.
China might have a lesser say in the ongoing benchmark iron ore price negotiations, Zhang said.
Analysts reckoned the negotiations between China's steel companies and iron ore miners could last until mid-year, which would be a record.
The benchmark price for China is significant for the overall situation of the iron ore firms, as China's demand for iron ore in 2008 was 444 million tonnes, more than half of the world's total.
Iron ore and steel companies usually agree on the year's long-term contract prices by April 1, the start of a financial year. However, steel makers and iron ore companies are deadlocked this year.
"About 90 percent of China's iron ore mines are suffering from losses," said Du Wei, an analyst with Umetal.com. "The domestic mining firms would be under great pressure if the imported iron ore prices continued to go down."
Source: Xinhua
BHP Books 13 Capesize Vessels For China
Platts reports that BHP Billiton arranged freight for a total of 2.2 million tonnes of iron ore between Port Hedland and Qingdao in 13 Capesize ships in the space of one week. It fixed 12 ships, each to carry 170,000 million tonnes cargoes and one ship to lift a 160,000 million tonnes stem.
As per the report, BHP's move has helped drive rates higher on the route to just shy of USD 8 per tonnes compared with USD 6.45 to USD 6.90 per tonnes seen at the end of last week.
All of BHP's fixtures are for cargoes due to load in the first 12 days of May. Allowing for port congestion, brokers said that most of the ships should arrive in China by the middle of June.
The latest business reported last Friday, showed that BHP fixing a 170,000 tonnes cargo at USD 7.20 per million for a May 10 loading. It also fixed another 170,000 stem on last Friday at USD 7.95 per tonne for a May 1 loading aboard the 2009 built Marvellous on what brokers said would be the ship's maiden voyage.
On, April 17, BHP fixed four 170,000 tonnes cargoes at rates between USD 6.45 and USD 6.90.
Brokers said that ship owners were now seeking between USD 8.00 per tonne and USD 8.50 per tonne for similar business between Western Australia and China, with one owner said to be holding out for USD 9.
According toship brokers, BHP Billiton has been extremely active on the spot iron ore market this year, selling millions of tons to China on CFR terms, having previously sold almost mostly on FOB terms. Consequently it has become the most active Capesize charterer in Australasian/Asian trades so far this year.
Earlier this week, BHP Billiton said that its spot market iron ore sales at prices showing discounts to long-term contract prices, trebled to 28% of its iron ore shipments in the company's Q3 ending March 31, as Asian steel mills deferred lifting ore against long-term contracts and cut output by 50% or more.
In its quarterly production statement earlier this week, BHP said that it had received an increased number of requests for deferred deliveries from steel mills and the producer had sold the deferred material on the spot market, instead. Consequently, spot market iron ore sales in its March quarter rose to 28% of total sales compared with just 10% a year earlier.
The company said that in the first nine months of its July 1st to June 30th 2009 fiscal year, BHP Billiton produced a record 87.38 million tonnes up 6% YoY. In the Q3 it produced 28.19 million tonnes which was only 1% below the corresponding year earlier period.
The main iron ore producers and steel producers are still locked in annual contract negotiations, with some forecasters predicting a 40% reduction in iron ore contract prices over 2008. Some in the industry believe that the system of long term, fixed price contracts maybe coming to an end and that there could be a move to formula pricing based on published benchmarks.
Source: Steel Guru/Platt's
As per the report, BHP's move has helped drive rates higher on the route to just shy of USD 8 per tonnes compared with USD 6.45 to USD 6.90 per tonnes seen at the end of last week.
All of BHP's fixtures are for cargoes due to load in the first 12 days of May. Allowing for port congestion, brokers said that most of the ships should arrive in China by the middle of June.
The latest business reported last Friday, showed that BHP fixing a 170,000 tonnes cargo at USD 7.20 per million for a May 10 loading. It also fixed another 170,000 stem on last Friday at USD 7.95 per tonne for a May 1 loading aboard the 2009 built Marvellous on what brokers said would be the ship's maiden voyage.
On, April 17, BHP fixed four 170,000 tonnes cargoes at rates between USD 6.45 and USD 6.90.
Brokers said that ship owners were now seeking between USD 8.00 per tonne and USD 8.50 per tonne for similar business between Western Australia and China, with one owner said to be holding out for USD 9.
According toship brokers, BHP Billiton has been extremely active on the spot iron ore market this year, selling millions of tons to China on CFR terms, having previously sold almost mostly on FOB terms. Consequently it has become the most active Capesize charterer in Australasian/Asian trades so far this year.
Earlier this week, BHP Billiton said that its spot market iron ore sales at prices showing discounts to long-term contract prices, trebled to 28% of its iron ore shipments in the company's Q3 ending March 31, as Asian steel mills deferred lifting ore against long-term contracts and cut output by 50% or more.
In its quarterly production statement earlier this week, BHP said that it had received an increased number of requests for deferred deliveries from steel mills and the producer had sold the deferred material on the spot market, instead. Consequently, spot market iron ore sales in its March quarter rose to 28% of total sales compared with just 10% a year earlier.
The company said that in the first nine months of its July 1st to June 30th 2009 fiscal year, BHP Billiton produced a record 87.38 million tonnes up 6% YoY. In the Q3 it produced 28.19 million tonnes which was only 1% below the corresponding year earlier period.
The main iron ore producers and steel producers are still locked in annual contract negotiations, with some forecasters predicting a 40% reduction in iron ore contract prices over 2008. Some in the industry believe that the system of long term, fixed price contracts maybe coming to an end and that there could be a move to formula pricing based on published benchmarks.
Source: Steel Guru/Platt's
Saturday, April 25, 2009
Merafe CEO Claims Ferrochrome Price Has Bottomed
Merafe Resources CEO Steve Phiri believes that the ferrochrome price has bottomed at the European benchmark price of US69c/lb. Phiri made this forecast after the second-quarter (Q2) level had fallen US10c/lb below the US79c/lb Q1 price.
Phiri said that the Xstrata-Merafe Chrome Venture’s stock levels were continuing to decline, owing to the company producing far less ferrochrome than it was selling. Globally, ferrochrome-using stainless steel was also being produced at a volume higher than the ferrochrome output.
While the Xstrata-Merafe Chrome Venture might even go beyond its 80% cutback to avoid the high winter electricity tariffs, it remained determined to retain its 6000 permanent employees. Investment banker Fairfax is also forecasting a recovery in the price of metals by end of this year.
Source: Mining Weekly
Phiri said that the Xstrata-Merafe Chrome Venture’s stock levels were continuing to decline, owing to the company producing far less ferrochrome than it was selling. Globally, ferrochrome-using stainless steel was also being produced at a volume higher than the ferrochrome output.
While the Xstrata-Merafe Chrome Venture might even go beyond its 80% cutback to avoid the high winter electricity tariffs, it remained determined to retain its 6000 permanent employees. Investment banker Fairfax is also forecasting a recovery in the price of metals by end of this year.
Source: Mining Weekly
Downward Pressures Remain In China Coal Market
As small coal mines in Shanxi and Henan provinces resume production while demand still remains low, China's coal market will probably continue its decline in the near future.
Looking at thermal coal, on April 12th China's locally-served power enterprises consumed 1.66 million tonnes, 30,000 tonnes less than on April 6th. They have 28.48 million tonnes of coal stock, which is enough for 16 days' production, one day more than in late March.
Although Qinhuangdao, China's major coal port, saw coal prices rising, coal has started to stockpile again after several weeks of decline and the thermal coal price has fallen in Jiangsu, Anhui, Shanxi and Hebei. Coking coal and lump coal prices hit by the weakened downstream market have also fallen.
Coal demand will continue to be low in the near future and as small and medium-sized coal mines facilitate coal supply, the coal market is predicted to continue its downward trend.
1. Qinhuangdao port
Coal stock increased by a small quantity largely due to a recent influx by rail department of Mongolian, thus coal stocks rebounded slightly. By April 17th stock remained at 3.66 million tonnes, increasing by 120,000 tonnes compared with April 11th. But still, such levels are low and vessels still need to wait for the resources to come up.
Last week all varieties of thermal coal witnessed a CNY 5 to 15 per tonne rise compared with a week earlier.
2. East China
There's simply no driving force for market demand to grow, and coal prices continue to dip. Statistics show that the high grade thermal coal price dropped CNY 10 per tonne at Wanzhai port, Xuzhou, Jiangsu province, and coal stocks fell slightly. In Nanjing and Suqian, it came down by CNY 50 per tonne. In Anhui, Huainan, Huaibei and Suzhou, 1/3 coking coal and medium grade thermal coal declined by CNY 100 per tonne and CNY 50 per tonne respectively.
3. North China
The coal market is still going through a downgrading process. As small coal mines begin to resume production in central and south Shanxi province, coal prices start to fall by CNY 20 to 30 per tonne.
In Jinzhong and Yuncheng, the primary clean coal dropped CNY 60 to 70 per tonne compared with last week.
4. Northeast China
Coking coal prices continue to fall due to weak market demand. In Fushuan and Anshan, the main coal producing areas in Heilongjiang province, coking coal prices slumped by CNY 100 to CNY 200 per tonne.
5. Central south
The coal market remained relatively flat amid downwards pressure. Small and medium-sized coal mines have started to resume production, while market demand has remained as flat as before.
6. Northwest China
The coal market remains weak, and coal prices are still declining. Statistics show in Wuhai, Inner Mongolia, 12 grade primary clean coal dropped CNY 80 per tonne compared with a week earlier. In Shaanxi, coking coal and lump coal dipped by CNY 50 per tonne compared with last week.
7. Southwest China
Trade was thin in the gloomy market. In Liupanshui, Guizhou, primary clean coal was down by CNY 80 per tonne compared with last week. In Anshun, anthracite slack coal edged down by CNY 40 per tonne compared with last week. In Chengdu, Panzhihua, primary clean coal dropped by CNY 200 per tonne from last week.
Source: Steel Guru/My Steel
Looking at thermal coal, on April 12th China's locally-served power enterprises consumed 1.66 million tonnes, 30,000 tonnes less than on April 6th. They have 28.48 million tonnes of coal stock, which is enough for 16 days' production, one day more than in late March.
Although Qinhuangdao, China's major coal port, saw coal prices rising, coal has started to stockpile again after several weeks of decline and the thermal coal price has fallen in Jiangsu, Anhui, Shanxi and Hebei. Coking coal and lump coal prices hit by the weakened downstream market have also fallen.
Coal demand will continue to be low in the near future and as small and medium-sized coal mines facilitate coal supply, the coal market is predicted to continue its downward trend.
1. Qinhuangdao port
Coal stock increased by a small quantity largely due to a recent influx by rail department of Mongolian, thus coal stocks rebounded slightly. By April 17th stock remained at 3.66 million tonnes, increasing by 120,000 tonnes compared with April 11th. But still, such levels are low and vessels still need to wait for the resources to come up.
Last week all varieties of thermal coal witnessed a CNY 5 to 15 per tonne rise compared with a week earlier.
2. East China
There's simply no driving force for market demand to grow, and coal prices continue to dip. Statistics show that the high grade thermal coal price dropped CNY 10 per tonne at Wanzhai port, Xuzhou, Jiangsu province, and coal stocks fell slightly. In Nanjing and Suqian, it came down by CNY 50 per tonne. In Anhui, Huainan, Huaibei and Suzhou, 1/3 coking coal and medium grade thermal coal declined by CNY 100 per tonne and CNY 50 per tonne respectively.
3. North China
The coal market is still going through a downgrading process. As small coal mines begin to resume production in central and south Shanxi province, coal prices start to fall by CNY 20 to 30 per tonne.
In Jinzhong and Yuncheng, the primary clean coal dropped CNY 60 to 70 per tonne compared with last week.
4. Northeast China
Coking coal prices continue to fall due to weak market demand. In Fushuan and Anshan, the main coal producing areas in Heilongjiang province, coking coal prices slumped by CNY 100 to CNY 200 per tonne.
5. Central south
The coal market remained relatively flat amid downwards pressure. Small and medium-sized coal mines have started to resume production, while market demand has remained as flat as before.
6. Northwest China
The coal market remains weak, and coal prices are still declining. Statistics show in Wuhai, Inner Mongolia, 12 grade primary clean coal dropped CNY 80 per tonne compared with a week earlier. In Shaanxi, coking coal and lump coal dipped by CNY 50 per tonne compared with last week.
7. Southwest China
Trade was thin in the gloomy market. In Liupanshui, Guizhou, primary clean coal was down by CNY 80 per tonne compared with last week. In Anshun, anthracite slack coal edged down by CNY 40 per tonne compared with last week. In Chengdu, Panzhihua, primary clean coal dropped by CNY 200 per tonne from last week.
Source: Steel Guru/My Steel
Vale Ends Legal Dispute With CSN
Brazil's mining giant Vale said on Friday that it agreed to end a legal dispute over a major iron ore mine with steel maker CSN.
Both sides have been waging a legal battle over the huge Casa de Pedra iron ore mine in the central Minas Gerais state since the unwinding of cross-shareholdings between them in 2000. The mine's output rose 25 percent in 2008 to 18.8 million tons.
Under an accord, CSN will no longer have to sell to Vale excess iron ore from the mine. It will also not have to pay financial compensation Vale was seeking for the end of the supply contract, a Vale spokeman said.
As part of the deal, Vale will supply up to 3 million metric tons of iron ore pellets to CSN by 2014.
Both companies agreed to end "all pending legal issues regarding Vale's right of first refusal for the purchase of iron ore produced by the Casa de Pedra mine," Vale said in a statement.
CSN is a major producer of iron ore, a key ingredient in steel. Last June, the company signed its first long-term deal to supply iron ore to a foreign customer, moving into a market dominated by Vale.
Vale and CSN would also halt legal action on issues related to the unwinding of cross-shareholdings, the statement said.
Source: Reuters
Both sides have been waging a legal battle over the huge Casa de Pedra iron ore mine in the central Minas Gerais state since the unwinding of cross-shareholdings between them in 2000. The mine's output rose 25 percent in 2008 to 18.8 million tons.
Under an accord, CSN will no longer have to sell to Vale excess iron ore from the mine. It will also not have to pay financial compensation Vale was seeking for the end of the supply contract, a Vale spokeman said.
As part of the deal, Vale will supply up to 3 million metric tons of iron ore pellets to CSN by 2014.
Both companies agreed to end "all pending legal issues regarding Vale's right of first refusal for the purchase of iron ore produced by the Casa de Pedra mine," Vale said in a statement.
CSN is a major producer of iron ore, a key ingredient in steel. Last June, the company signed its first long-term deal to supply iron ore to a foreign customer, moving into a market dominated by Vale.
Vale and CSN would also halt legal action on issues related to the unwinding of cross-shareholdings, the statement said.
Source: Reuters
Friday, April 24, 2009
Jindal Set To Start Mining At Bolivian Site
India's Jindal Steel and Power will start mining iron ore next month at Bolivia's El Mutun site, where it plans to invest $2.1 billion, the company said on Friday.
After meeting with President Evo Morales, Jindal Executive Vice President Vikrant Gujral said the company was ready to start production at the vast reserve, which lies near the border with Brazil.
"Next month we'll start producing raw material. I've invited the president to go to El Mutun because we want him to be there when the mineral crusher starts working," Gujral told reporters.
He did not specify how much the crusher will produce and said full production would not start until 2012.
A 40-year contract signed in late 2007 gives Jindal the right to mine approximately half the area of El Mutun, which has estimated iron ore reserves of more than 40 billion tonnes, though they are said to be of medium-grade quality.
In comparison, proven reserves in ore-rich Carajas in Brazil's northern state of Para total 1.5 billion tonnes.
Gujral said that as soon as the government gives Jindal rights over the land the company will begin investing some $300 million a year over the next three years.
The government said earlier this week that it would soon grant Jindal rights over the land it has requested.
As part of the project, Jindal has vowed to develop an integrated steel plant with an annual capacity of 1.7 million tonnes, which would start up by 2010.
Jindal and Bolivia will share the profits generated by the project, which officials have said would amount to $200 million per year in taxes and profits for the Bolivian state.
Source: Reuters
After meeting with President Evo Morales, Jindal Executive Vice President Vikrant Gujral said the company was ready to start production at the vast reserve, which lies near the border with Brazil.
"Next month we'll start producing raw material. I've invited the president to go to El Mutun because we want him to be there when the mineral crusher starts working," Gujral told reporters.
He did not specify how much the crusher will produce and said full production would not start until 2012.
A 40-year contract signed in late 2007 gives Jindal the right to mine approximately half the area of El Mutun, which has estimated iron ore reserves of more than 40 billion tonnes, though they are said to be of medium-grade quality.
In comparison, proven reserves in ore-rich Carajas in Brazil's northern state of Para total 1.5 billion tonnes.
Gujral said that as soon as the government gives Jindal rights over the land the company will begin investing some $300 million a year over the next three years.
The government said earlier this week that it would soon grant Jindal rights over the land it has requested.
As part of the project, Jindal has vowed to develop an integrated steel plant with an annual capacity of 1.7 million tonnes, which would start up by 2010.
Jindal and Bolivia will share the profits generated by the project, which officials have said would amount to $200 million per year in taxes and profits for the Bolivian state.
Source: Reuters
Iron Ore Talks "Could Last Until Mid-Year"
This year's negotiations between China's steel companies and iron ore miners on a benchmark price for the material could last until mid-year, which would be a record, analysts have told Xinhua.
The benchmark price for China is significant for the overall situation of the iron ore miners, as China's demand for iron ore in 2008 was 444 million tons, more than half of the world's total.
Iron ore and steel companies usually agree on the year's long-term contract prices by April 1, the start of a financial year. However, steelmakers and miners are deadlocked this time around.
In 2008, the two sides did not agree on long-term commercial contract prices until June but "this year, it will probably be even later," an analyst at Umetal, Hu Kai, said.
Iron ore companies believe China's 4-trillion-yuan ($586 billion) stimulus package and the new steel futures contracts that began trading in March might help spur steel demand, Hu said.
"However, steel companies believe that the global economy is still in contraction, and steel supply still outweighs demand," Hu said.
The usual practice is that until each new year's benchmark iron ore price is settled, steel companies continue to pay the previous year's contract price and get refunds if the final contract price is lower.
But "if Chinese steel companies bought iron ore at the 2008 benchmark prices, we wouldn't be able to survive," Wuhan Iron and Steel (Group) Corp general manager Deng Qilin said.
In the second half of 2008, steel prices fell 30 percent to 37 percent. The industry began cutting output amid weak demand, and so the need for iron ore diminished.
"Iron ore supply increased 30 to 40 percent [last year] as production capacity rose. Meanwhile, global demand for steel declined," China Iron and Steel Association secretary-general Shan Shanghua said.
He said ore miners should only ask for 60 percent of last year's benchmark price before striking a new deal.
On April 20, Brazil-based iron ore supplier Vale announced that "80 percent of the sales (should be paid for) in cash and the remaining 20 percent would be received at a later date" when the 2009 benchmark price settlement was concluded.
Hu said that actually, Vale, Rio Tinto and BHP Billiton -- three major suppliers -- had been giving a similar discounted price since early April.
Another Umetal analyst, Du Wei, said the 80 percent "discounted price" reflected that Vale would not easily accept China's demand for a 40 percent price cut.
"The current iron ore price is only 60 percent of the long-term contract price ... when iron ore prices were higher than long-term contract prices, iron ore miners ensured supply according to their contracts with steel companies. Now, it might be time to support the miners," Du said.
"The most important thing for the three iron ore miners is to maintain their market share with Chinese steel companies," he said.
Source: China Daily
The benchmark price for China is significant for the overall situation of the iron ore miners, as China's demand for iron ore in 2008 was 444 million tons, more than half of the world's total.
Iron ore and steel companies usually agree on the year's long-term contract prices by April 1, the start of a financial year. However, steelmakers and miners are deadlocked this time around.
In 2008, the two sides did not agree on long-term commercial contract prices until June but "this year, it will probably be even later," an analyst at Umetal, Hu Kai, said.
Iron ore companies believe China's 4-trillion-yuan ($586 billion) stimulus package and the new steel futures contracts that began trading in March might help spur steel demand, Hu said.
"However, steel companies believe that the global economy is still in contraction, and steel supply still outweighs demand," Hu said.
The usual practice is that until each new year's benchmark iron ore price is settled, steel companies continue to pay the previous year's contract price and get refunds if the final contract price is lower.
But "if Chinese steel companies bought iron ore at the 2008 benchmark prices, we wouldn't be able to survive," Wuhan Iron and Steel (Group) Corp general manager Deng Qilin said.
In the second half of 2008, steel prices fell 30 percent to 37 percent. The industry began cutting output amid weak demand, and so the need for iron ore diminished.
"Iron ore supply increased 30 to 40 percent [last year] as production capacity rose. Meanwhile, global demand for steel declined," China Iron and Steel Association secretary-general Shan Shanghua said.
He said ore miners should only ask for 60 percent of last year's benchmark price before striking a new deal.
On April 20, Brazil-based iron ore supplier Vale announced that "80 percent of the sales (should be paid for) in cash and the remaining 20 percent would be received at a later date" when the 2009 benchmark price settlement was concluded.
Hu said that actually, Vale, Rio Tinto and BHP Billiton -- three major suppliers -- had been giving a similar discounted price since early April.
Another Umetal analyst, Du Wei, said the 80 percent "discounted price" reflected that Vale would not easily accept China's demand for a 40 percent price cut.
"The current iron ore price is only 60 percent of the long-term contract price ... when iron ore prices were higher than long-term contract prices, iron ore miners ensured supply according to their contracts with steel companies. Now, it might be time to support the miners," Du said.
"The most important thing for the three iron ore miners is to maintain their market share with Chinese steel companies," he said.
Source: China Daily
Japanese Copper Production Down 60 Per Cent On Last Year
Japan’s output of copper and copper alloy fabricated products, including sheets and tubes, plunged 60 percent in March from a year earlier, an industry group said.
Production declined for an eighth straight month, slumping to 34,440 metric tons from 86,570 tons, the Japan Copper and Brass Association said in a statement today, citing preliminary data. Output dropped as machinery and electronics makers accelerated production cuts amid a recession
Source: Bloomberg
Production declined for an eighth straight month, slumping to 34,440 metric tons from 86,570 tons, the Japan Copper and Brass Association said in a statement today, citing preliminary data. Output dropped as machinery and electronics makers accelerated production cuts amid a recession
Source: Bloomberg
China's Tungsten Prices Down Over 30% In Q1
China's tungsten concentrate price has fallen steadily since Q4 in 2008 and by Q1 of this year the average offer of domestic tungsten concentrate had remained at CNY 60,200 to 61,900 per tonne, a fall of 32.81% year-on-year.
The price of APT and ferrotungsten have pointed to the same trend. In Q1 of 2009, the average price of APT remained at CNY 95,000 to 96,900 per tonne down 32% year-on-year and domestic ferrotungsten stayed at CNY 122,100 to 124,500 per tonne down 24.21% year-on-year.
Source: Steel Guru
The price of APT and ferrotungsten have pointed to the same trend. In Q1 of 2009, the average price of APT remained at CNY 95,000 to 96,900 per tonne down 32% year-on-year and domestic ferrotungsten stayed at CNY 122,100 to 124,500 per tonne down 24.21% year-on-year.
Source: Steel Guru
Shanxi Coking Coal Revunues Up In Q1
Shanxi Coking Coal Group Co Ltd, parent of the country's largest publicly traded coke producer Shanxi Coking Co Ltd, recorded sales revenue of RMB 13.11 billion for the first quarter of this year, up 1.47% compared with the same period of last year.
The company said in its quarterly report that it produced about 16.86 million tons of raw coal during the period, 10.4% less than that of a year ago. Output of clean coal and coking coal hit 8.08 million tons and 469,000 tons, representing a year-on-year decrease of 12% and 32% respectively.
During the period, the group generated about 1.51 billion kWh of electricity, down 4.5% from a year earlier.
Meanwhile, the company adjusted its production plan for the second half of 2009 in accordance with the sluggish coal market, with the target raw coal output being cut by over 2 million tons to 78 million tons.
The company expects its revenue and net profit for the first half of this year to hit RMB 26 billion and RMB 1.5 billion respectively.
SourcE: China Knowledge
The company said in its quarterly report that it produced about 16.86 million tons of raw coal during the period, 10.4% less than that of a year ago. Output of clean coal and coking coal hit 8.08 million tons and 469,000 tons, representing a year-on-year decrease of 12% and 32% respectively.
During the period, the group generated about 1.51 billion kWh of electricity, down 4.5% from a year earlier.
Meanwhile, the company adjusted its production plan for the second half of 2009 in accordance with the sluggish coal market, with the target raw coal output being cut by over 2 million tons to 78 million tons.
The company expects its revenue and net profit for the first half of this year to hit RMB 26 billion and RMB 1.5 billion respectively.
SourcE: China Knowledge
Thursday, April 23, 2009
Mooiplats Coal Production Ready For Sale By 1 July
JSE-listed Coal of Africa (CoAL) reported on Thursday that its Mooiplaats thermal coal project, in Mpumalanga, was on track to produce saleable export-quality thermal coal early in the company’s new financial year, which would begin on July 1.
CoAL MD Simon Farrell said in a statement that he was also confident that production at the company’s Vele coking coal project, in Limpopo, was likely to start by the end of 2009.
Progress on the underground and surface infrastructure of the Mooiplaats project continued according to schedule, the company stated in its quarterly report for the period ending March.
The incline conveyor belt linking the underground operations to the surface infrastructure had been commissioned, allowing for the transport of coal to the surface stockpile areas. Production, stockpile and auxiliary conveyor belts were completed with the installation and commissioning of the remaining conveyor belts due early in the next quarter.
The road network construction on the project remained on course for completion by the end of April 2009.
The development of the underground infrastructure was delayed owing to the presence of a dyke but, by the end of March, the two continuous miners had progressed over 150 m, yielding 16 900 t of coal, the company stated.
Construction of change houses, offices and workshops has commenced and was expected to be completed by the end of April 2009, when phase one of the wash plant was to be commissioned.
Kwena Processing will operate the wash plant and project management company Portaclone has been appointed to construct the second phase of the plant. The slurry dams will be constructed and operated by mining services ECMP.
CoAL stated that discussions with third parties regarding the use of their coal sidings continued and that finalisation of commercial terms were also expected by the end of April. Negotiations regarding long term off-take agreements for the export of thermal coal, as well as the lean coal produced, were ongoing.
Furthermore, discussions regarding the sale of lower quality thermal coal to State-owned electricity producer Eskom continued.
Regarding its Vele project, CoAL noted that during the March quarter, specialist studies required for the environmental impact assessment and environmental-management plan were completed.
“These specialist studies will be discussed with all interested and affected parties during April 2009, prior to submission to the Department of Minerals and Energy (DME) as part of the new order mining right application, submitted in October 2008. The Company remains hopeful of receiving a granted new order mining right by September of this year.”
The remaining 12 holes of the bulk sample drilling programme were completed in early 2009, allowing for better definition of the proposed bulk sample boxcut site. A full suite of geotechnical analysis as well as an incline drilling programme, started during the quarter.
The analysis to be undertaken includes a 70 hole-drilling programme that will improve the project drilling density and resource modelling, assist in assessing underground mining roof and floor conditions, as well as identify the presence of faulting and the continuity of the select mining horizon.
The incline drilling programme will improve the data on the site identified for the extraction of the 5 000 t bulk sample for analysis by steel producer ArcelorMittal and other potential customers.
Additionally, the tender process for the supply of a modular plant was finalised during the March quarter with a letter of intent sent to equipment supplier ELB for the construction of the plant. ELB has partnered with engineering house PBA Projects to design and construct the modular plant, which will be based on PBA’s processing plant designs used in the marine diamond industry.
A memorandum of understanding has been signed with mineral processing firm DRA to design, construct and operate the larger, permanent Vele coking coal wash plant. The modular wash plant will be relocated to the Makhado project once the larger wash plant at Vele has been commissioned.
GRD Minproc has been mandated to complete the project feasibility study on the Vele project, the results of which were expected by August 2009. This study will include both the underground and opencast sections of the project.
Agreements with surface rights owners have been finalised, allowing for the development of the required infrastructure and bulk sample box-cut once legislative approval for the sample has been granted.
CoAL has also appointed the preferred partner to conduct opencast mining operations at the Vele coking coal project, and the formalisation of the agreements with the partner was expected to be finalised by the end of the June 2009 quarter.
During the quarter under review, CoAL also reached an agreement with State-owned Transent Freight Rail (TFR) for the rail allocation of one-million tons a year to the Matola terminal, in Mozambique. This rail allocation matches the CoAL’s port allocation of one-million tons a year through the Matola Terminal, secured through an agreement with Terminal De Carvao Da Matola Limitada.
During the March quarter, CoAL successfully railed over 38 000 t of third-party coal to the Matola terminal. Of the coal railed, over 22 000 t were shipped from th terminal during the period, ensuring the viability of the rail and port allocation while at the same time generating income from the allocation.
CoAL stated that TFR announced during the quarter that a record of 50 000 t railed in one week through the Maputo corridor, further evidence of the practical viability of this export route as an alternative to the Richards Bay coal terminal.
During the quarter the company also secured the rights to up to 100% of any increased capacity at the Matola terminal in return for contributing loan funding.
CoAL agreed to loan the required funds for the proposed two-million tons a year expansion at the Matola terminal which will increase its export allocation at the port to three-million tons a year. The increased port capacity was expected to be effective from August 2010 and discussions with TFR to secure an additional two-million tons a year rail capacity were ongoing.
Source: Mining Weekly
CoAL MD Simon Farrell said in a statement that he was also confident that production at the company’s Vele coking coal project, in Limpopo, was likely to start by the end of 2009.
Progress on the underground and surface infrastructure of the Mooiplaats project continued according to schedule, the company stated in its quarterly report for the period ending March.
The incline conveyor belt linking the underground operations to the surface infrastructure had been commissioned, allowing for the transport of coal to the surface stockpile areas. Production, stockpile and auxiliary conveyor belts were completed with the installation and commissioning of the remaining conveyor belts due early in the next quarter.
The road network construction on the project remained on course for completion by the end of April 2009.
The development of the underground infrastructure was delayed owing to the presence of a dyke but, by the end of March, the two continuous miners had progressed over 150 m, yielding 16 900 t of coal, the company stated.
Construction of change houses, offices and workshops has commenced and was expected to be completed by the end of April 2009, when phase one of the wash plant was to be commissioned.
Kwena Processing will operate the wash plant and project management company Portaclone has been appointed to construct the second phase of the plant. The slurry dams will be constructed and operated by mining services ECMP.
CoAL stated that discussions with third parties regarding the use of their coal sidings continued and that finalisation of commercial terms were also expected by the end of April. Negotiations regarding long term off-take agreements for the export of thermal coal, as well as the lean coal produced, were ongoing.
Furthermore, discussions regarding the sale of lower quality thermal coal to State-owned electricity producer Eskom continued.
Regarding its Vele project, CoAL noted that during the March quarter, specialist studies required for the environmental impact assessment and environmental-management plan were completed.
“These specialist studies will be discussed with all interested and affected parties during April 2009, prior to submission to the Department of Minerals and Energy (DME) as part of the new order mining right application, submitted in October 2008. The Company remains hopeful of receiving a granted new order mining right by September of this year.”
The remaining 12 holes of the bulk sample drilling programme were completed in early 2009, allowing for better definition of the proposed bulk sample boxcut site. A full suite of geotechnical analysis as well as an incline drilling programme, started during the quarter.
The analysis to be undertaken includes a 70 hole-drilling programme that will improve the project drilling density and resource modelling, assist in assessing underground mining roof and floor conditions, as well as identify the presence of faulting and the continuity of the select mining horizon.
The incline drilling programme will improve the data on the site identified for the extraction of the 5 000 t bulk sample for analysis by steel producer ArcelorMittal and other potential customers.
Additionally, the tender process for the supply of a modular plant was finalised during the March quarter with a letter of intent sent to equipment supplier ELB for the construction of the plant. ELB has partnered with engineering house PBA Projects to design and construct the modular plant, which will be based on PBA’s processing plant designs used in the marine diamond industry.
A memorandum of understanding has been signed with mineral processing firm DRA to design, construct and operate the larger, permanent Vele coking coal wash plant. The modular wash plant will be relocated to the Makhado project once the larger wash plant at Vele has been commissioned.
GRD Minproc has been mandated to complete the project feasibility study on the Vele project, the results of which were expected by August 2009. This study will include both the underground and opencast sections of the project.
Agreements with surface rights owners have been finalised, allowing for the development of the required infrastructure and bulk sample box-cut once legislative approval for the sample has been granted.
CoAL has also appointed the preferred partner to conduct opencast mining operations at the Vele coking coal project, and the formalisation of the agreements with the partner was expected to be finalised by the end of the June 2009 quarter.
During the quarter under review, CoAL also reached an agreement with State-owned Transent Freight Rail (TFR) for the rail allocation of one-million tons a year to the Matola terminal, in Mozambique. This rail allocation matches the CoAL’s port allocation of one-million tons a year through the Matola Terminal, secured through an agreement with Terminal De Carvao Da Matola Limitada.
During the March quarter, CoAL successfully railed over 38 000 t of third-party coal to the Matola terminal. Of the coal railed, over 22 000 t were shipped from th terminal during the period, ensuring the viability of the rail and port allocation while at the same time generating income from the allocation.
CoAL stated that TFR announced during the quarter that a record of 50 000 t railed in one week through the Maputo corridor, further evidence of the practical viability of this export route as an alternative to the Richards Bay coal terminal.
During the quarter the company also secured the rights to up to 100% of any increased capacity at the Matola terminal in return for contributing loan funding.
CoAL agreed to loan the required funds for the proposed two-million tons a year expansion at the Matola terminal which will increase its export allocation at the port to three-million tons a year. The increased port capacity was expected to be effective from August 2010 and discussions with TFR to secure an additional two-million tons a year rail capacity were ongoing.
Source: Mining Weekly
Ennore Coke Begin Land Hunt For New Plant
Ennore Coke Limited, the Indian manufacturer of metallurgical coke, plans to scout for land for its proposed one million tonne per annum (mtpa) coke plant at Dhamara port in Orissa within three to four months.
The company needed 250-300 acres of land at Dhamara to set up a one mtpa coke plant at an investment of about Rs 1,400 crore. The plant was scheduled to be operational by the end of 2010.
“We would start scouting for land for our proposed coke plant at Dhamara port within three to four months. The company intends to acquire land for the project on its own”, said Ganesan Natarajan, president and chief executive officer, Ennore Coke Limited.
On acquiring an 90 per cent stake in Broughton Coal mines of Australia, Natarajan said, “We would conduct due diligence for the coal mines within a week. The company expects to close the deal at $10 million.”
Broughton coal mines of Australia are presently valued at about $12 million and they have an estimated reserve of 30 million tonnes of coking coal. Ennore Coke was looking to invest an additional $25-30 million on mining operations of these mines.
Ennore Coke had identified 3-4 coking coal properties in Australia for acquisition. It was also exploring the possibility of picking up stakes in coking coal assets in New Zealand.
Ennore Coke was aiming to pick up stakes in overseas coal mining assets as valuations of these properties were attractive in the aftermath of the economic downturn. Moreover, the company was aiming to achieve raw material security to cater to its expansion plans.
At present, the coking coal requirement of Ennore Coke stands at 7,20,000 tonnes per annum. The company’s coking coal requirement is set to go up significantly in the next couple of years as it is aiming to scale up capacity of its coke plant at Haldia (West Bengal) from the existing 1.5 lakh tonnes per annum to 3 lakh tonnes per annum.
Besides, the company’s proposed coke plant at Dhamara would have a coking coal requirement of 1.3 million tonnes per annum.
To cater to its growing raw material requirement, Ennore Coke aimed to import about four lakh tonnes of coking coal, mainly from Australia in 2009-10 out of which 50 per cent would be semi-soft coking coal and the remaining 50 per cent being premium hard coking coal.
Meanwhile, the company has successfully pushed coke into its batteries in its coke plant located in Haldia last week.
Commenting on the achievement, Natarajan said, “This is a proud moment for us and I would like to take the opportunity for thanking every member of the Ennore Coke family who have toiled ceaselessly to achieve this milestone.”
The successful pushing of coke at the Haldia plant is the first stage of the process of coke making which will culminate with the company attaining its full capacity of producing 130,000 mtpa of coke by the end of May this year. Ennore Coke will also co-generate 12 MW of power, which in turn will generate carbon credits and further add to the company’s bottom-line.
Source: Business Standard
The company needed 250-300 acres of land at Dhamara to set up a one mtpa coke plant at an investment of about Rs 1,400 crore. The plant was scheduled to be operational by the end of 2010.
“We would start scouting for land for our proposed coke plant at Dhamara port within three to four months. The company intends to acquire land for the project on its own”, said Ganesan Natarajan, president and chief executive officer, Ennore Coke Limited.
On acquiring an 90 per cent stake in Broughton Coal mines of Australia, Natarajan said, “We would conduct due diligence for the coal mines within a week. The company expects to close the deal at $10 million.”
Broughton coal mines of Australia are presently valued at about $12 million and they have an estimated reserve of 30 million tonnes of coking coal. Ennore Coke was looking to invest an additional $25-30 million on mining operations of these mines.
Ennore Coke had identified 3-4 coking coal properties in Australia for acquisition. It was also exploring the possibility of picking up stakes in coking coal assets in New Zealand.
Ennore Coke was aiming to pick up stakes in overseas coal mining assets as valuations of these properties were attractive in the aftermath of the economic downturn. Moreover, the company was aiming to achieve raw material security to cater to its expansion plans.
At present, the coking coal requirement of Ennore Coke stands at 7,20,000 tonnes per annum. The company’s coking coal requirement is set to go up significantly in the next couple of years as it is aiming to scale up capacity of its coke plant at Haldia (West Bengal) from the existing 1.5 lakh tonnes per annum to 3 lakh tonnes per annum.
Besides, the company’s proposed coke plant at Dhamara would have a coking coal requirement of 1.3 million tonnes per annum.
To cater to its growing raw material requirement, Ennore Coke aimed to import about four lakh tonnes of coking coal, mainly from Australia in 2009-10 out of which 50 per cent would be semi-soft coking coal and the remaining 50 per cent being premium hard coking coal.
Meanwhile, the company has successfully pushed coke into its batteries in its coke plant located in Haldia last week.
Commenting on the achievement, Natarajan said, “This is a proud moment for us and I would like to take the opportunity for thanking every member of the Ennore Coke family who have toiled ceaselessly to achieve this milestone.”
The successful pushing of coke at the Haldia plant is the first stage of the process of coke making which will culminate with the company attaining its full capacity of producing 130,000 mtpa of coke by the end of May this year. Ennore Coke will also co-generate 12 MW of power, which in turn will generate carbon credits and further add to the company’s bottom-line.
Source: Business Standard
Outokumpu Axes 110 UK Jobs
Stainless steel giant Outokumpu is to axe another 110 jobs at its melting shop in Sheffield.
The latest cuts come three months after the Finnish company announced it was cutting 50 jobs and three shifts in the same melting shop and just over six months after Outokumpu said it was axing its thin strip business at Meadowhall, with the loss of 230 jobs.
One worker told The Star: "Everyone is feeling a bit betrayed. We feel like we are the scapegoats and everything is geared towards saving jobs in Finland and Sweden.
"It always seems to be Sheffield that's targeted. People are a bit down hearted."
However, Outokumpu denies that Sheffield is being targeted. It says its plants in Finland and Sweden will also be hit and it remains committed to the city where Harry Brearley discovered stainless steel almost 100 years ago.
"Even after these job cuts, we will still have around 450 people left in Sheffield," said a spokesman.
"We will still have a melting shop capable of producing half a million tonnes of stainless steel, although operating at significantly less than that capacity, and a distribution company which has enjoyed some good investment in recent years and is by far and away the largest supplier of stainless in the UK."
At the start of the year the melting shop employed 290 workers and was operating on 18 shifts. Following the latest cuts, the plant will employ around 140 but will still be operating for 15 shifts, although it will only be melting steel for half the week.
During the rest of the week, melting shop workers will be transferred to work on finishing processes or preparing the melting shop.
Outokumpu says the cutbacks will reduce productions from current levels of 350,000 tonnes a year to 200,000 tonnes.
Consultations with workers and unions over the latest round of cuts will start on Monday (April 27) and Outokumpu has said it will "consider all reasonable practicable measures to alleviate the personal hardship caused by this proposal."
News of the cuts came as Outokumpu announced it was looking for further cost savings after suffering a "significant operating loss" on sales which have more than halved, compared with the same period last year.
Outokumpu is suspending the operation of its Chromium mine and ferrochrome plant in Finland, which will affect 300 people, and introducing a rolling programme of lengthy temporarily lay offs, which will affect all 1,500 staff at its Tornio plant.
In Sweden, more than 170 jobs are going at its Degofors plant and discussions are taking place at its Avesta plant about an as yet unspecified number of job cuts.
Figures published this week show Outokumpu lost €249,000 in the first quarter of 2009 on sales down from €1.7 million in the first quarter of 2008 to €679,000.
That compares with a profit of €100,000 in the first quarter of 2008 and a loss of €271,000 in the last quarter of 2008. Group sales in the last quarter of 2008 were €966,000.
Outokumpu says its cost saving programmes are going according to plan and it estimates that total fixed cost savings will be in excess of €100 million in 2009.
The group expects underlying operational losses in the second quarter to be at the same level or slightly lower than in the first quarter.
Chief executive, Juha Rantanen, said: "The stainless markets were exceptionally weak and this is reflected in our loss-making first quarter.
"This market weakness is a result of both lower end-user demand and heavy de-stocking in the long value chain to end consumers. The de-stocking will certainly come to an end at some point.
"Our main focus is now on maximizing cash flow by generating profitable sales, by cutting costs, limiting capital expenditure as well as reducing working capital. It is encouraging that these efforts resulted in strong cash flow generation during the first quarter.
"As the potential for further reductions in working capital is rather limited, increased effort is going into identifying additional cost-saving actions on top of those already being implemented."
Source: Sheffield Telegraph
The latest cuts come three months after the Finnish company announced it was cutting 50 jobs and three shifts in the same melting shop and just over six months after Outokumpu said it was axing its thin strip business at Meadowhall, with the loss of 230 jobs.
One worker told The Star: "Everyone is feeling a bit betrayed. We feel like we are the scapegoats and everything is geared towards saving jobs in Finland and Sweden.
"It always seems to be Sheffield that's targeted. People are a bit down hearted."
However, Outokumpu denies that Sheffield is being targeted. It says its plants in Finland and Sweden will also be hit and it remains committed to the city where Harry Brearley discovered stainless steel almost 100 years ago.
"Even after these job cuts, we will still have around 450 people left in Sheffield," said a spokesman.
"We will still have a melting shop capable of producing half a million tonnes of stainless steel, although operating at significantly less than that capacity, and a distribution company which has enjoyed some good investment in recent years and is by far and away the largest supplier of stainless in the UK."
At the start of the year the melting shop employed 290 workers and was operating on 18 shifts. Following the latest cuts, the plant will employ around 140 but will still be operating for 15 shifts, although it will only be melting steel for half the week.
During the rest of the week, melting shop workers will be transferred to work on finishing processes or preparing the melting shop.
Outokumpu says the cutbacks will reduce productions from current levels of 350,000 tonnes a year to 200,000 tonnes.
Consultations with workers and unions over the latest round of cuts will start on Monday (April 27) and Outokumpu has said it will "consider all reasonable practicable measures to alleviate the personal hardship caused by this proposal."
News of the cuts came as Outokumpu announced it was looking for further cost savings after suffering a "significant operating loss" on sales which have more than halved, compared with the same period last year.
Outokumpu is suspending the operation of its Chromium mine and ferrochrome plant in Finland, which will affect 300 people, and introducing a rolling programme of lengthy temporarily lay offs, which will affect all 1,500 staff at its Tornio plant.
In Sweden, more than 170 jobs are going at its Degofors plant and discussions are taking place at its Avesta plant about an as yet unspecified number of job cuts.
Figures published this week show Outokumpu lost €249,000 in the first quarter of 2009 on sales down from €1.7 million in the first quarter of 2008 to €679,000.
That compares with a profit of €100,000 in the first quarter of 2008 and a loss of €271,000 in the last quarter of 2008. Group sales in the last quarter of 2008 were €966,000.
Outokumpu says its cost saving programmes are going according to plan and it estimates that total fixed cost savings will be in excess of €100 million in 2009.
The group expects underlying operational losses in the second quarter to be at the same level or slightly lower than in the first quarter.
Chief executive, Juha Rantanen, said: "The stainless markets were exceptionally weak and this is reflected in our loss-making first quarter.
"This market weakness is a result of both lower end-user demand and heavy de-stocking in the long value chain to end consumers. The de-stocking will certainly come to an end at some point.
"Our main focus is now on maximizing cash flow by generating profitable sales, by cutting costs, limiting capital expenditure as well as reducing working capital. It is encouraging that these efforts resulted in strong cash flow generation during the first quarter.
"As the potential for further reductions in working capital is rather limited, increased effort is going into identifying additional cost-saving actions on top of those already being implemented."
Source: Sheffield Telegraph
Indian Iron Ore Exports This Month Down 50% To Date
India iron ore exports have dropped over 50% this month and tend to continuous decline for another 4-5 months due to many reasons, state-run MMTC, one of the exporters, has said.
"The exports of iron ore have declined substantially about 50% during April compared with the same month last year," MMTC Chairman Sanjiv Batra said, adding that the trend was likely to continue for another 4-5 months due to declining prices, lower demand and effective global competition".
"The international price has slipped as the demand for iron ore has decreased 25-30%, which has resulted in the drops of the production capacity," MMTC Chairman Sanjiv Batra said here on the sidelines of the Festival of Gold on April 23.
India&aposs total iron ore exports stood at 100mln tonnes, of which MMTC exported 7mln tonnes in fiscal year of 2008-2009 and 8.5mln tonnes during 2007-2008.
Meanwhile, the declining price had positive effect on coal imports, as there is a growing demand for the commodity in thermal power generation, Batra said.
The total import of the country is about 50mln tonnes, of which MMTC has already purchased 5.5mln tonnes which is expected to go up to 15mln tonnes in fiscal year of 2009-2010, he added.
Source: MetalBiz
"The exports of iron ore have declined substantially about 50% during April compared with the same month last year," MMTC Chairman Sanjiv Batra said, adding that the trend was likely to continue for another 4-5 months due to declining prices, lower demand and effective global competition".
"The international price has slipped as the demand for iron ore has decreased 25-30%, which has resulted in the drops of the production capacity," MMTC Chairman Sanjiv Batra said here on the sidelines of the Festival of Gold on April 23.
India&aposs total iron ore exports stood at 100mln tonnes, of which MMTC exported 7mln tonnes in fiscal year of 2008-2009 and 8.5mln tonnes during 2007-2008.
Meanwhile, the declining price had positive effect on coal imports, as there is a growing demand for the commodity in thermal power generation, Batra said.
The total import of the country is about 50mln tonnes, of which MMTC has already purchased 5.5mln tonnes which is expected to go up to 15mln tonnes in fiscal year of 2009-2010, he added.
Source: MetalBiz
Ansteel - Iron Ore Talks At An Impasse
Anshan Iron & Steel Group's president said there has been no result in the annual iron ore pricing talks.
Zhang Xiaogang said there wasn’t yet a conclusion on expectations for the new contract iron ore price, which will apply in the 12 months starting April 1.
But he said that it was a difficult time for everyone in the steel sector and that he would appreciate the opportunity for iron ore miners and steel mills to “work together and cooperate”.
Mr Zhang, in Perth to meet Western Australian Premier Colin Barnett and executives from its Australian joint venture partner, Gindalbie Metals, said that he plans to meet with Rio Tinto executives on Friday and pricing will be discussed.
Mr Zhang also emphasised the financial stresses being experienced by Chinese steel makers.
“I believe that, starting from April this year, every single steel maker in China was making a loss,” he said.
Mr Zhang said that Australian government approvals for Ansteel’s $162 million investment in Gindalbie are taking "a fair bit of time" but he said clearance for the deal from the Foreign Investment Review Board will be "coming very soon."
Ansteel is China's second largest steel maker by output.
Source: The Australian
Zhang Xiaogang said there wasn’t yet a conclusion on expectations for the new contract iron ore price, which will apply in the 12 months starting April 1.
But he said that it was a difficult time for everyone in the steel sector and that he would appreciate the opportunity for iron ore miners and steel mills to “work together and cooperate”.
Mr Zhang, in Perth to meet Western Australian Premier Colin Barnett and executives from its Australian joint venture partner, Gindalbie Metals, said that he plans to meet with Rio Tinto executives on Friday and pricing will be discussed.
Mr Zhang also emphasised the financial stresses being experienced by Chinese steel makers.
“I believe that, starting from April this year, every single steel maker in China was making a loss,” he said.
Mr Zhang said that Australian government approvals for Ansteel’s $162 million investment in Gindalbie are taking "a fair bit of time" but he said clearance for the deal from the Foreign Investment Review Board will be "coming very soon."
Ansteel is China's second largest steel maker by output.
Source: The Australian
BHP Selling More Iron Ore On Spot Market
BHP Billiton said on Wednesday its iron ore sales under cheaper spot prices trebled to nearly 30 percent as steel mills deferred long-term contracts and cut output up to half on weaker demand. But BHP kept iron ore output steady -- down just 1 percent last quarter from a year ago -- to take the total in the nine months to end-March to a record 87.4 million tonnes, up 6 percent from a year ago, suggesting the firm is willing to increase market share at the expense of lower prices.
BHP, the world's third largest iron ore miner, said in a statement that it had received requests for deferrals on deliveries for ore sold on long-term contracts and those deferred tonnes had sold on the spot market, raising the portion of sales at cheaper spot prices to 28 percent from less than 10 percent a year ago.
Production figures released on Wednesday show BHP mined 87.367 million tonnes in the first nine months of fiscal 2009.
Fellow Australian miner Rio Tinto Ltd/Plc, which reserved about 15 million tonnes of last year's total production of around 154 million tones for the spot market, would not say if it was being asked to defer shipments.
Global miners are locked in annual talks to settle contract prices of iron ore for the new fiscal year started this month and the issue of iron ore carryover from the prior year remains one of the thorny subjects.
Steelmakers want to cancel the leftover as they were forced to cut output dramatically due to collapsing global steel needs, but miners insist they honour the contract and pay 2008 prices which were agreed at nearly double the level of the year before.
BHP, which has long pushed for the benchmark process to be scrapped, has said it will honour deliveries already contracted under future benchmark prices but would not negotiate new benchmark contracts for as-yet undecided volumes. Instead, it favours an index-type pricing mechanism that takes prevailing spot prices into account.
Prices of Australian iron ore fines were agreed at around $91 a tonne last year, while spot prices are now quoted some 30 percent cheaper at around $64 a tonne.
POSCO said on Wednesday its committed purchase of long-term contract volume would decrease this year due to lower production plan but declined to comment whether it continues to demand deferals of long-term contracts.
The majority of the spot iron ore surplus has been absorbed by China, with the world's top steel producer importing record amounts of ore for the second straight month in March, as medium and small-sized mills raised output, betting the government stimulus plan would lead a demand recovery.
In contrast, iron ore imports by Japan, the world's No.2 importer, dropped nearly 50 percent last month to 5.9 million tonnes, as steelmills in the country, home to the world's top auto maker, cut otuput by the similar level.
Nippon Steel said on Wednesday it would keep its current output cuts into the April-June quarter.
Source: Reuters
BHP, the world's third largest iron ore miner, said in a statement that it had received requests for deferrals on deliveries for ore sold on long-term contracts and those deferred tonnes had sold on the spot market, raising the portion of sales at cheaper spot prices to 28 percent from less than 10 percent a year ago.
Production figures released on Wednesday show BHP mined 87.367 million tonnes in the first nine months of fiscal 2009.
Fellow Australian miner Rio Tinto Ltd/Plc, which reserved about 15 million tonnes of last year's total production of around 154 million tones for the spot market, would not say if it was being asked to defer shipments.
Global miners are locked in annual talks to settle contract prices of iron ore for the new fiscal year started this month and the issue of iron ore carryover from the prior year remains one of the thorny subjects.
Steelmakers want to cancel the leftover as they were forced to cut output dramatically due to collapsing global steel needs, but miners insist they honour the contract and pay 2008 prices which were agreed at nearly double the level of the year before.
BHP, which has long pushed for the benchmark process to be scrapped, has said it will honour deliveries already contracted under future benchmark prices but would not negotiate new benchmark contracts for as-yet undecided volumes. Instead, it favours an index-type pricing mechanism that takes prevailing spot prices into account.
Prices of Australian iron ore fines were agreed at around $91 a tonne last year, while spot prices are now quoted some 30 percent cheaper at around $64 a tonne.
POSCO said on Wednesday its committed purchase of long-term contract volume would decrease this year due to lower production plan but declined to comment whether it continues to demand deferals of long-term contracts.
The majority of the spot iron ore surplus has been absorbed by China, with the world's top steel producer importing record amounts of ore for the second straight month in March, as medium and small-sized mills raised output, betting the government stimulus plan would lead a demand recovery.
In contrast, iron ore imports by Japan, the world's No.2 importer, dropped nearly 50 percent last month to 5.9 million tonnes, as steelmills in the country, home to the world's top auto maker, cut otuput by the similar level.
Nippon Steel said on Wednesday it would keep its current output cuts into the April-June quarter.
Source: Reuters
Subscribe to:
Posts (Atom)