A unit of shipping services group Clarksons has begun iron ore swap trading and expects to see the largest growth from its Chinese clients and freight operators initially, the company's chief executive told Reuters on Wednesday.
Clarkson Securities Limited, the futures broking arm of the leading ship broker, has been offering cash-settled iron ore swaps since earlier in September.
"We have a huge number of clients that look at iron ore from the freight perspective," Chief Executive Alex Gray said in a telephone interview.
"We are interested as a group to move into the broking of other commodities and iron ore is a good fit for us."
Source: Reuters
Wednesday, September 30, 2009
Posco Signs Kazakh Titanium JV
South Korean steelmaker Posco said yesterday it has signed a deal with the Ust-Kamenogorsk Titanium and Magnesium Plant, a Kazakh titanium sponge producer, to build a titanium slab plant in the eastern Kazakhstan.
With the joint venture, Korea will become the fourth country in the world to have a titanium slab production system behind the U.S., Russia and Japan.
Titanium is a high-end non-steel metal with a value that is 10 times that of steel products. It is traded at between 40 million won and 50 million won ($34,000 and $42,400) per ton. It is resistant to erosion and salt water but is lightweight. It is used for ships, airplane engines and nuclear power plants.
The two companies will each invest half of the approximately $50 million cost of the plant, to be completed in 2012. The titanium slabs manufactured in Kazakhstan will be made into titanium plates at Posco’s steel plant in Pohang.
Posco, which was once entirely reliant on titanium imports, hopes that the titanium produced at the plant in Kazakhstan will help reduce its imports of titanium to Korea as well as stabilize titanium prices. Domestic consumption of titanium is estimated at around 5,000 tons a year.
“There is a great deal of value in developing the rich resources in Kazakhstan,” said Chung Joon-yang, Posco’s president. “Starting with the titanium business Posco and Kazakhstan will continue to cooperate to develop infrastructure and natural resources.”
Karim Massimov, prime minister of Kazakhstan, said that the Korean steelmaker will have the full support of the Kazakh government.
Source: Joongang Daily
With the joint venture, Korea will become the fourth country in the world to have a titanium slab production system behind the U.S., Russia and Japan.
Titanium is a high-end non-steel metal with a value that is 10 times that of steel products. It is traded at between 40 million won and 50 million won ($34,000 and $42,400) per ton. It is resistant to erosion and salt water but is lightweight. It is used for ships, airplane engines and nuclear power plants.
The two companies will each invest half of the approximately $50 million cost of the plant, to be completed in 2012. The titanium slabs manufactured in Kazakhstan will be made into titanium plates at Posco’s steel plant in Pohang.
Posco, which was once entirely reliant on titanium imports, hopes that the titanium produced at the plant in Kazakhstan will help reduce its imports of titanium to Korea as well as stabilize titanium prices. Domestic consumption of titanium is estimated at around 5,000 tons a year.
“There is a great deal of value in developing the rich resources in Kazakhstan,” said Chung Joon-yang, Posco’s president. “Starting with the titanium business Posco and Kazakhstan will continue to cooperate to develop infrastructure and natural resources.”
Karim Massimov, prime minister of Kazakhstan, said that the Korean steelmaker will have the full support of the Kazakh government.
Source: Joongang Daily
Western Coal To Hit 10Mn Tonnes Per Annum By 2013
Vancouver-based Western Coal (formerly Western Canadian Coal) plans to boost production to 10-million tons a year of coal by 2013, chairperson John Byrne told shareholders at the firm's annual meeting on Tuesday.
Earlier this year, Western bought Aim-listed Cambrian Mining. The combined company has five mines in West Virginia and Western Canada, with an installed capacity for 7-million tons of coal a year. Western also owns a 50,6% interest Energybuild which produces high quality anthracite and thermal coals in South Wales.
The company agreed last week to sell its AGD Mining unit, which has a gold and antimony operation in Australia, to Mandalay Resources, led by former Lonmin CEO Brad Mills.
Byrne said the company will increase production by expanding its Brule mine to 2-million tons a year, and restarting and expanding the shuttered Willow Creek mine, to 1,8-million tons a year.
It is also planning an underground mine at the Perry Creek project, which will boost production at the company's Wolverine operation to nearly 3-million tons, he said.
New equipment will be purchased for the two West Virginia mines, Maple Coal and Gauley Eagle, lifting output to 1,8-million tons and 1,4-million tons respectively.
Development work at Brule and Willow Creek is expected to begin in the first half of next year, Western said.
The company plans to lift production levels to take advantage of recovering demand for metallurgical coal, with spot prices for coking coal now over $170/t, Byrne said.
Assuming the continued recovery in steel demand, Western expects next year contract coal prices to be significantly higher.
“With current operations performing better than expected along with the expectation of higher coal prices in the near-term, we believe the time is right to expand our operations,” CEO John Hogg added.
“Cash costs at Wolverine are now around $100/t, which is almost 50% lower than fiscal 2009 costs.
“The year-to-date effective stripping ratio at Wolverine is now approximately 13 to 1, which is almost 20% lower than the average in fiscal 2009 of 16 to 1, and trending towards life-of-mine ratio of 10 to 1.”
Source: Mining Weekly
Earlier this year, Western bought Aim-listed Cambrian Mining. The combined company has five mines in West Virginia and Western Canada, with an installed capacity for 7-million tons of coal a year. Western also owns a 50,6% interest Energybuild which produces high quality anthracite and thermal coals in South Wales.
The company agreed last week to sell its AGD Mining unit, which has a gold and antimony operation in Australia, to Mandalay Resources, led by former Lonmin CEO Brad Mills.
Byrne said the company will increase production by expanding its Brule mine to 2-million tons a year, and restarting and expanding the shuttered Willow Creek mine, to 1,8-million tons a year.
It is also planning an underground mine at the Perry Creek project, which will boost production at the company's Wolverine operation to nearly 3-million tons, he said.
New equipment will be purchased for the two West Virginia mines, Maple Coal and Gauley Eagle, lifting output to 1,8-million tons and 1,4-million tons respectively.
Development work at Brule and Willow Creek is expected to begin in the first half of next year, Western said.
The company plans to lift production levels to take advantage of recovering demand for metallurgical coal, with spot prices for coking coal now over $170/t, Byrne said.
Assuming the continued recovery in steel demand, Western expects next year contract coal prices to be significantly higher.
“With current operations performing better than expected along with the expectation of higher coal prices in the near-term, we believe the time is right to expand our operations,” CEO John Hogg added.
“Cash costs at Wolverine are now around $100/t, which is almost 50% lower than fiscal 2009 costs.
“The year-to-date effective stripping ratio at Wolverine is now approximately 13 to 1, which is almost 20% lower than the average in fiscal 2009 of 16 to 1, and trending towards life-of-mine ratio of 10 to 1.”
Source: Mining Weekly
Chile Copper Production Up Almost 8 Per Cent
Copper output in Chile, the world’s biggest producer, rose 7.8 percent in August from a year earlier after state-owned Codelco and BHP Billiton Ltd. boosted production, the government said.
Output increased to 459,823 metric tons from 426,689 tons a year earlier, the country’s national statistics agency said in a statement distributed in Santiago today.
Codelco, based in Santiago, is the world’s biggest copper producer. Melbourne-based BHP, the largest mining company, owns 57.5 percent of Chile’s Escondida, the world’s biggest copper mine.
Production of molybdenum, used for stainless steel making, rose 27 percent to 3,164 tons from 2,495 tons a year earlier, the agency said.
Source: Bloomberg
Output increased to 459,823 metric tons from 426,689 tons a year earlier, the country’s national statistics agency said in a statement distributed in Santiago today.
Codelco, based in Santiago, is the world’s biggest copper producer. Melbourne-based BHP, the largest mining company, owns 57.5 percent of Chile’s Escondida, the world’s biggest copper mine.
Production of molybdenum, used for stainless steel making, rose 27 percent to 3,164 tons from 2,495 tons a year earlier, the agency said.
Source: Bloomberg
Fortescue Misses Own Funding Deadline
Fortescue Metals Group Australia's third-biggest iron ore miner, missed a self-imposed deadline on Wednesday to obtain up to $6 billion in debt financing from Chinese steel mills, casting doubt over big expansion plans and a related deal to discount its ore.
Fortescue agreed last month to sell the mills 20 million wet tonnes of iron ore at a 3 percent discount to rival miners, provided they arranged $5.5-$6 billion in financing by Sept 30 to fund the firm's ambitious growth in the Pilbara iron belt.
A Fortescue spokesman said the miner was sticking to a blueprint to lift annual output incrementally to 95 million tonnes from the current 38 million tonnes rate by tapping new mines deeper in the Pilbara, but would not comment on how the work would now be funded.
Fortescue's move to sell China cheaper ore was seen as breaking ranks with the industry's traditional price-setting mechanism and aimed at garnering favour with the world's biggest buyer of ore.
The China Iron & Steel Association (CISA) had complained miners wanted too much for their ore given the impact of the world financial crisis on steelmaking, refusing to officially sign off on contracts with Fortescue's larger competitors Rio Tinto (RIO.AX)(RIO.L) and BHP Billiton (BHP.AX)(BLT.L).
In July, Rio Tinto's lead iron ore price negotiator, Stern Hu, and three other employees were detained in Shanghai and accused of espionage and stealing state secrets, further clouding the mills' relationships with mining companies.
Fortescue said in a one-paragraph statement that it would continue to work with Chinese steel maker Baosteel and the China Iron and Steel Association (CISA) on financing.
A CISA official who did not want to be identified said: "CISA and Baosteel have never promised that Fortescue would definitely obtain Chinese funding, but CISA and Baosteel will help the miner to get it."
Fortescue left a question mark over its price discount for Chinese mills, saying it would continue working cooperatively with CISA, "including the provision of attractive iron ore pricing if requested."
Fortescue's chief executive, Andrew Forrest, known for his skills in raising funds to back elaborate mining ventures, was unavailable.
In announcing the deal on Aug. 17, Forrest said the discount hinged on securing the funds, but CISA suggested this week the funding was independent of pricing.
Fortescue stock was down 2.6 percent to A$3.80, outpacing losses in the wider Australian market .AXJO. Fortescue has dropped 20 percent since its mid-August announcement, compared with litte change in Rio Tinto's shares and a modest gain in BHP Billiton shares over the same period.
Sources close to Fortescue said the firm was attempting to find alternative sources of financing, preferably in China, where it sells all its ore. In the meantime, it would probably continue to provisionally price its ore at the deeper discount.
Miners typically price on a provisional basis in the absence of contracts to adhere to shipping schedules and adjust the price if needed once contracts are signed.
"It's important Fortescue stays on friendly terms with its Chinese customers, especially when it's trying to hit them up for $6 billion," said James Wilson, a mining analyst for DJ Carmichael & Co in Perth. "Fortescue is willing to extend it (the price discount offer) to keep the peace."
Chinese officials had hailed the Fortescue deal as a welcome compromise that might help break the deadlock in annual iron ore talks with Rio Tinto and BHP Billiton.
Both companies have declined to meet Chinese steelmakers' initial demands for a 40 percent price cut this year and have instead held out for a smaller reduction of 33 percent agreed with other Asian mills.
Under the China funding deal, Fortescue had said it would sell its ore to China at closer to a 35 percent reduction to last year's price.
Source: Reuters
Fortescue agreed last month to sell the mills 20 million wet tonnes of iron ore at a 3 percent discount to rival miners, provided they arranged $5.5-$6 billion in financing by Sept 30 to fund the firm's ambitious growth in the Pilbara iron belt.
A Fortescue spokesman said the miner was sticking to a blueprint to lift annual output incrementally to 95 million tonnes from the current 38 million tonnes rate by tapping new mines deeper in the Pilbara, but would not comment on how the work would now be funded.
Fortescue's move to sell China cheaper ore was seen as breaking ranks with the industry's traditional price-setting mechanism and aimed at garnering favour with the world's biggest buyer of ore.
The China Iron & Steel Association (CISA) had complained miners wanted too much for their ore given the impact of the world financial crisis on steelmaking, refusing to officially sign off on contracts with Fortescue's larger competitors Rio Tinto (RIO.AX)(RIO.L) and BHP Billiton (BHP.AX)(BLT.L).
In July, Rio Tinto's lead iron ore price negotiator, Stern Hu, and three other employees were detained in Shanghai and accused of espionage and stealing state secrets, further clouding the mills' relationships with mining companies.
Fortescue said in a one-paragraph statement that it would continue to work with Chinese steel maker Baosteel and the China Iron and Steel Association (CISA) on financing.
A CISA official who did not want to be identified said: "CISA and Baosteel have never promised that Fortescue would definitely obtain Chinese funding, but CISA and Baosteel will help the miner to get it."
Fortescue left a question mark over its price discount for Chinese mills, saying it would continue working cooperatively with CISA, "including the provision of attractive iron ore pricing if requested."
Fortescue's chief executive, Andrew Forrest, known for his skills in raising funds to back elaborate mining ventures, was unavailable.
In announcing the deal on Aug. 17, Forrest said the discount hinged on securing the funds, but CISA suggested this week the funding was independent of pricing.
Fortescue stock was down 2.6 percent to A$3.80, outpacing losses in the wider Australian market .AXJO. Fortescue has dropped 20 percent since its mid-August announcement, compared with litte change in Rio Tinto's shares and a modest gain in BHP Billiton shares over the same period.
Sources close to Fortescue said the firm was attempting to find alternative sources of financing, preferably in China, where it sells all its ore. In the meantime, it would probably continue to provisionally price its ore at the deeper discount.
Miners typically price on a provisional basis in the absence of contracts to adhere to shipping schedules and adjust the price if needed once contracts are signed.
"It's important Fortescue stays on friendly terms with its Chinese customers, especially when it's trying to hit them up for $6 billion," said James Wilson, a mining analyst for DJ Carmichael & Co in Perth. "Fortescue is willing to extend it (the price discount offer) to keep the peace."
Chinese officials had hailed the Fortescue deal as a welcome compromise that might help break the deadlock in annual iron ore talks with Rio Tinto and BHP Billiton.
Both companies have declined to meet Chinese steelmakers' initial demands for a 40 percent price cut this year and have instead held out for a smaller reduction of 33 percent agreed with other Asian mills.
Under the China funding deal, Fortescue had said it would sell its ore to China at closer to a 35 percent reduction to last year's price.
Source: Reuters
Chinese Iron Ore Miner Raises HK$2 Billion From IPO
China Vanadium Titano-Magnetite Mining has priced its initial public offering just above the mid-point of the offering range at HK$3.50 for a total deal size of HK$2.06 billion ($266 million). The shares were offered in a range between HK$3.12 and HK$3.86.
The deal attracted just over 100 institutional investors and a pretty good retail following, which should come as a relief for other listing candidates at a time when the secondary market has taken on a more negative tone -- the Hang Seng Index has fallen in six of the past eight sessions -- and the last few newcomers have fallen on their debuts.
Peak Sport Products dropped 17% on its first day of trading yesterday and Metallurgical Corp of China's H shares, which fell 11.7% in their debut last Thursday, lost another 1.3%, which left the share price 16.2% below the IPO price. The losses were all the more disappointing as they came despite a 2.6% gain in the Hang Seng Index. In the US, Chinese online gaming company Shanda Games lost 14% when it started trading last Friday.
These disappointing results have made investors a bit more cautious about committing money to other IPOs and bankers say the recent deals have seen a few more limit orders than the deals that priced earlier in the month. The final pricings have also started to creep off the top of the indicated ranges as companies are keen to avoid a similarly poor aftermarket performance.
And in one of the clearest signs yet that companies -- and bankers -- feel the market has become less sure-fire, Wilmar China yesterday chose to delay its Hong Kong IPO, which was scheduled to kick-off next Monday. The company is a spin-off of Singapore-listed palm oil producer Wilmar International and is involved in oilseed crushing, edible oil refining and the production of edible oils, feed meal, oleochemicals and specialty fats in China. It was expected to be the largest Hong Kong IPO year-to-date at about $3 billion to $4 billion. It has attracted a lot of interest both because of its well-known parent and its leading market position and strong cashflows.
The company has been pre-marketing for a couple of weeks but will hold off on launching the actual deal until the markets become more stable, according to a source. This could happen as early as mid-October, or later -- there is no need to rush, the source said. An official announcement from the company said: "Wilmar China is assessing market conditions and other considerations relevant to the evaluation of its Hong Kong IPO. The actual timing of its IPO will be dependent on conditions which are deemed to be in the best interest of the company."
A banker not involved in the Wilmar offering said the delay may be a smart move if the company doesn't need the money at this particular point. The withdrawal of that large a deal may also be helpful for other listing candidates as the competition for investor attention just got a little less intense. Wilmar China's offering is led by BOC International, Goldman Sachs and Morgan Stanley.
China Vanadium, an iron ore producer based in Sichuan province, was said to have been about 17 times covered overall. Retail investors subscribed for more about 40 times the number of shares earmarked for them, triggering a partial clawback that increased the size of the retail tranche to 30% of the total deal from the initial 10%. Citi and Deutsche Bank were the joint bookrunners.
The institutional demand came predominantly from Asia. European investors contributed about 10% of the order amount and US investors another 5%.
A source said there weren't many limit orders in the book, but the company had been keen not to price too high as a good trading debut and a quality order book was more important to it than the amount of proceeds.
The company sold 25% of its share capital in the form of 588.8 million shares. Some 84.9% of the shares are new, while 15.1% are secondary. The same split also applies to the 15% overallotment option, which, if exercised, could increase the total deal size to $306 million.
The final price values the company at 11.5 times its projected 2010 earnings on a fully-diluted, pre-shoe basis, based on the bookrunners' consensus. Hidili Industry, a Hong Kong-listed producer of coke and coking coal was viewed as the closest comparable on the basis that coking coal is the other key raw material used to produce steel. It is also of a similar size to China Vanadium, is based in the Sichuan province, has a strong organic growth profile and is viewed as a consolidator in its industry. Hidili yesterday closed at a P/E multiple of 12.5 times after falling 8.5% since China Vanadium started its roadshow last Monday.
The recent selling pressure on Hidili may have contributed to the decision to fix China Vanadium's IPO price at mid-range since a higher price would have resulted in little or no discount. At the beginning of China Vanadium's roadshow, Hidili was trading at a 2010 P/E multiple of 15-16 times.
China Vanadium owns majority stakes in two mines with 78.66 million tonnes of proven and probable reserves based on the Joint Ore Reserves Committee (JORC) code. It plans to complete an expansion of its existing assets by adding a 300,000 tonnes per annum production line and also has an option to acquire another five mines in the area with estimated resources of 126.2 million tonnes. Longer-term, the company is likely to be one of the main consolidators in the industry, sources say.
Being based in Sichuan means the company is able to take advantage of strong demand for iron and steel due to the reconstruction work in the wake of last year's earthquake. The government has also issued a policy that encourages the use of steel strengthened by vanadium for construction in earthquake zones, which is extremely positive for China Vanadium since its iron ore is naturally rich on vanadium and doesn't need to be artificially strengthened.
The company is due to start trading on October 8.
Source: Finance Asia
The deal attracted just over 100 institutional investors and a pretty good retail following, which should come as a relief for other listing candidates at a time when the secondary market has taken on a more negative tone -- the Hang Seng Index has fallen in six of the past eight sessions -- and the last few newcomers have fallen on their debuts.
Peak Sport Products dropped 17% on its first day of trading yesterday and Metallurgical Corp of China's H shares, which fell 11.7% in their debut last Thursday, lost another 1.3%, which left the share price 16.2% below the IPO price. The losses were all the more disappointing as they came despite a 2.6% gain in the Hang Seng Index. In the US, Chinese online gaming company Shanda Games lost 14% when it started trading last Friday.
These disappointing results have made investors a bit more cautious about committing money to other IPOs and bankers say the recent deals have seen a few more limit orders than the deals that priced earlier in the month. The final pricings have also started to creep off the top of the indicated ranges as companies are keen to avoid a similarly poor aftermarket performance.
And in one of the clearest signs yet that companies -- and bankers -- feel the market has become less sure-fire, Wilmar China yesterday chose to delay its Hong Kong IPO, which was scheduled to kick-off next Monday. The company is a spin-off of Singapore-listed palm oil producer Wilmar International and is involved in oilseed crushing, edible oil refining and the production of edible oils, feed meal, oleochemicals and specialty fats in China. It was expected to be the largest Hong Kong IPO year-to-date at about $3 billion to $4 billion. It has attracted a lot of interest both because of its well-known parent and its leading market position and strong cashflows.
The company has been pre-marketing for a couple of weeks but will hold off on launching the actual deal until the markets become more stable, according to a source. This could happen as early as mid-October, or later -- there is no need to rush, the source said. An official announcement from the company said: "Wilmar China is assessing market conditions and other considerations relevant to the evaluation of its Hong Kong IPO. The actual timing of its IPO will be dependent on conditions which are deemed to be in the best interest of the company."
A banker not involved in the Wilmar offering said the delay may be a smart move if the company doesn't need the money at this particular point. The withdrawal of that large a deal may also be helpful for other listing candidates as the competition for investor attention just got a little less intense. Wilmar China's offering is led by BOC International, Goldman Sachs and Morgan Stanley.
China Vanadium, an iron ore producer based in Sichuan province, was said to have been about 17 times covered overall. Retail investors subscribed for more about 40 times the number of shares earmarked for them, triggering a partial clawback that increased the size of the retail tranche to 30% of the total deal from the initial 10%. Citi and Deutsche Bank were the joint bookrunners.
The institutional demand came predominantly from Asia. European investors contributed about 10% of the order amount and US investors another 5%.
A source said there weren't many limit orders in the book, but the company had been keen not to price too high as a good trading debut and a quality order book was more important to it than the amount of proceeds.
The company sold 25% of its share capital in the form of 588.8 million shares. Some 84.9% of the shares are new, while 15.1% are secondary. The same split also applies to the 15% overallotment option, which, if exercised, could increase the total deal size to $306 million.
The final price values the company at 11.5 times its projected 2010 earnings on a fully-diluted, pre-shoe basis, based on the bookrunners' consensus. Hidili Industry, a Hong Kong-listed producer of coke and coking coal was viewed as the closest comparable on the basis that coking coal is the other key raw material used to produce steel. It is also of a similar size to China Vanadium, is based in the Sichuan province, has a strong organic growth profile and is viewed as a consolidator in its industry. Hidili yesterday closed at a P/E multiple of 12.5 times after falling 8.5% since China Vanadium started its roadshow last Monday.
The recent selling pressure on Hidili may have contributed to the decision to fix China Vanadium's IPO price at mid-range since a higher price would have resulted in little or no discount. At the beginning of China Vanadium's roadshow, Hidili was trading at a 2010 P/E multiple of 15-16 times.
China Vanadium owns majority stakes in two mines with 78.66 million tonnes of proven and probable reserves based on the Joint Ore Reserves Committee (JORC) code. It plans to complete an expansion of its existing assets by adding a 300,000 tonnes per annum production line and also has an option to acquire another five mines in the area with estimated resources of 126.2 million tonnes. Longer-term, the company is likely to be one of the main consolidators in the industry, sources say.
Being based in Sichuan means the company is able to take advantage of strong demand for iron and steel due to the reconstruction work in the wake of last year's earthquake. The government has also issued a policy that encourages the use of steel strengthened by vanadium for construction in earthquake zones, which is extremely positive for China Vanadium since its iron ore is naturally rich on vanadium and doesn't need to be artificially strengthened.
The company is due to start trading on October 8.
Source: Finance Asia
$500 Million Silicon Smelter Planned For Tasmania
A $500 million silicon smelter to make the building blocks for solar panels may be built between Wynyard and Stanley.
Tasmanian Treasurer Michael Aird and Australia's senior trade commissioner to Germany met top executives from multinational chemical giant Wacker last week in Munich to discuss the project.
Under the proposal, Wacker Chemie Ag would build a silicon refinery at the Port Latta industrial site near Stanley, next to the existing Grange Resources iron magnetite pellet plant.
The plant would be the biggest silicon refinery in Australia, producing a much more sophisticated silicon metal product than the other major refinery in Western Australia.
Tasmania is attractive to Wacker -- one of the world's largest specialist silicon companies -- because of its rich untapped reserves of high grade 99 per cent pure silica, water for cooling, renewable energy from both wind and hydro-electric sources and natural gas to power its high-temperature furnaces.
Circular Head mayor Daryl Quilliam confirmed yesterday Wacker representatives had visited the region "two or three times" recently to canvass their silicon project with locals.
He said council staff had met with Wacker to discuss its key needs in building a new hi-tech silicon refinery at Port Latta.
"Wacker has talked with the council. Our reaction is that any development like this is very important to us and that we will do whatever we can to make sure we get this refinery project for Circular Head," Mr Quilliam said.
Mr Quilliam said discussions had focused on getting the silica from the Marrawah and Arthur River area, where it would be mined, to the proposed Port Latta smelter using existing road and rail options.
The proposed refinery would turn high-grade silica into pure silicon.
The thin sheets of polysilicon wafers produced would be exported to be made into photovoltaic cells to supply the fast-growing demand for solar energy panels in China and Asia.
Refined silicon can also be used in the Liquid Crystal Display (LCD) screens of computers and TVs, in the manufacture of fibre-optic cables to carry high-speed broadband telecommunications and to make silicon chips that power computers.
Mr Aird, who spent $50,000 last week on a taxpayer-funded trip to Europe to talk to the Wacker board, has said the project would provide "hundreds of jobs".
He refused to discuss the project yesterday, despite being asked to confirm in Parliament that his mystery "manufacturing plant" mooted for the North-West Coast was a silicon mine and refinery.
He said discussions between the Government and the unnamed company were still "very sensitive", with the proponent still looking at two other locations.
"There are commercial-in-confidence reasons for the company not wanting to canvass the issues at this stage," Mr Aird said.
Greens leader Nick McKim had asked Mr Aird to confirm the "open secret" that the foreign investment project was a silicon refinery. Mr McKim demanded to know if a value-adding manufacturing plant would be part of any industrial smelter.
He also asked what incentives the Government was promising Wacker, if heavily discounted electricity prices were part of the package and where the timber needed in the chemical process to convert silica to silicon using charcoal was to be sourced.
"This may well be a good project which Tasmanians can be proud of, but can you provide an assurance that this will not be yet another divisive proposal which will rip the Tasmanian community apart, as Gunns Limited's pulp mill has," Mr McKim asked.
Wacker wants the Tasmanian and Australia governments to provide it with incentives before it makes a final decision.
Mr Aird met last week with federal Industry Minister Kim Carr in Melbourne to discuss a support package.
He said federal and state assistance would focus on the provision of infrastructure such as roads, rail and port facilities, and on skills training.
Source: The Mercury, Tasmania
Tasmanian Treasurer Michael Aird and Australia's senior trade commissioner to Germany met top executives from multinational chemical giant Wacker last week in Munich to discuss the project.
Under the proposal, Wacker Chemie Ag would build a silicon refinery at the Port Latta industrial site near Stanley, next to the existing Grange Resources iron magnetite pellet plant.
The plant would be the biggest silicon refinery in Australia, producing a much more sophisticated silicon metal product than the other major refinery in Western Australia.
Tasmania is attractive to Wacker -- one of the world's largest specialist silicon companies -- because of its rich untapped reserves of high grade 99 per cent pure silica, water for cooling, renewable energy from both wind and hydro-electric sources and natural gas to power its high-temperature furnaces.
Circular Head mayor Daryl Quilliam confirmed yesterday Wacker representatives had visited the region "two or three times" recently to canvass their silicon project with locals.
He said council staff had met with Wacker to discuss its key needs in building a new hi-tech silicon refinery at Port Latta.
"Wacker has talked with the council. Our reaction is that any development like this is very important to us and that we will do whatever we can to make sure we get this refinery project for Circular Head," Mr Quilliam said.
Mr Quilliam said discussions had focused on getting the silica from the Marrawah and Arthur River area, where it would be mined, to the proposed Port Latta smelter using existing road and rail options.
The proposed refinery would turn high-grade silica into pure silicon.
The thin sheets of polysilicon wafers produced would be exported to be made into photovoltaic cells to supply the fast-growing demand for solar energy panels in China and Asia.
Refined silicon can also be used in the Liquid Crystal Display (LCD) screens of computers and TVs, in the manufacture of fibre-optic cables to carry high-speed broadband telecommunications and to make silicon chips that power computers.
Mr Aird, who spent $50,000 last week on a taxpayer-funded trip to Europe to talk to the Wacker board, has said the project would provide "hundreds of jobs".
He refused to discuss the project yesterday, despite being asked to confirm in Parliament that his mystery "manufacturing plant" mooted for the North-West Coast was a silicon mine and refinery.
He said discussions between the Government and the unnamed company were still "very sensitive", with the proponent still looking at two other locations.
"There are commercial-in-confidence reasons for the company not wanting to canvass the issues at this stage," Mr Aird said.
Greens leader Nick McKim had asked Mr Aird to confirm the "open secret" that the foreign investment project was a silicon refinery. Mr McKim demanded to know if a value-adding manufacturing plant would be part of any industrial smelter.
He also asked what incentives the Government was promising Wacker, if heavily discounted electricity prices were part of the package and where the timber needed in the chemical process to convert silica to silicon using charcoal was to be sourced.
"This may well be a good project which Tasmanians can be proud of, but can you provide an assurance that this will not be yet another divisive proposal which will rip the Tasmanian community apart, as Gunns Limited's pulp mill has," Mr McKim asked.
Wacker wants the Tasmanian and Australia governments to provide it with incentives before it makes a final decision.
Mr Aird met last week with federal Industry Minister Kim Carr in Melbourne to discuss a support package.
He said federal and state assistance would focus on the provision of infrastructure such as roads, rail and port facilities, and on skills training.
Source: The Mercury, Tasmania
Tuesday, September 29, 2009
Cheap Imports Threatening Vietnam Steel Industry
With prices of domestically made steel products overly high in Vietnam, Chinese, Thai and Indonesian steel are likely to take advantage.
While the ingot steel and finished steel products’ prices have been dropping sharply in the world market due to oversupply, domestic prices have been continuously increasing. By the end of September 2009, the steel price has increased by 400,000-500,000 dong per tonne.
Domestically made steel products have been escalating for several months. A tonne of bar steel is now selling at 11.6 million dong, while a tonne of coil steel at 11.3 million dong (not including value added tax VAT). The retail price in HCM City market has reached 12.4 million dong and 12.1 million dong per tonne, respectively, which represents the 300,000 dong per tonne increase in comparison since the beginning of the month.
Meanwhile, the ingot steel price in the world’s market has dropped to $490 per tonne, a sharp decrease of $40-60 per tonne over the last month.
Despite the sharp fall of ingot steel prices in the world’s market, domestic producers still do not intend to slash sale prices.
Experts say steel production cost now in Vietnam is about $600 per tonne, which means that with the sale price of $630-640 per tonne, producers make profits of $30-40 per tonne, or 500,000-700,000 dong per tonne.
Meanwhile, experts, say,100,000 dong per tonne would be considered the ideal profit in steel production.
Analysts say the reason behind the refusal to drop prices is that steel producers only accept price cuts when they have big stocks and they cannot sell products due to low demand. However demand remains high.
Meanwhile, when asked why they do not slash sale prices, steel mills said that they need to maintain high prices in order to cover the losses they incurred in 2008.
In the meantime, however, foreign made steel products are flowing into Vietnam. Steel is being imported in large quantities from Malaysia, Thailand, Indonesia and China. According to the Vietnam Steel Association, the imports are about 40,000-50,000 tonnes a month.
According to Dao Dinh Dong, head of the market division under the Vietnam Steel Corporation (southern office), in general, Chinese steel mills put out 42-43 million tonnes a month. However, the output soared to 50.7 million tonnes in July and 53 million tonnes in August. This has resulted in large stocks in the context of decreasing demand and sharp falls in steel price.
Therefore, Chinese mills have targetted exports to neighbouring countries, including Vietnam, by offering very competitive prices.
Dong is worried that Chinese steel producers’ export may be boosted further by the decision by Vietnam’s government to allow the higher VAT tax fund of 12 percent instead of five percent, possibly to take effect in October 2009. If this happens, China made steel will become even more competitive.
Nguyen Tien Nghi, Deputy Chairman of the Vietnam Steel Association, has warned that if domestic producers do not adjust the sale prices, they will not be able to sell products.
Source: Vietnam Net
While the ingot steel and finished steel products’ prices have been dropping sharply in the world market due to oversupply, domestic prices have been continuously increasing. By the end of September 2009, the steel price has increased by 400,000-500,000 dong per tonne.
Domestically made steel products have been escalating for several months. A tonne of bar steel is now selling at 11.6 million dong, while a tonne of coil steel at 11.3 million dong (not including value added tax VAT). The retail price in HCM City market has reached 12.4 million dong and 12.1 million dong per tonne, respectively, which represents the 300,000 dong per tonne increase in comparison since the beginning of the month.
Meanwhile, the ingot steel price in the world’s market has dropped to $490 per tonne, a sharp decrease of $40-60 per tonne over the last month.
Despite the sharp fall of ingot steel prices in the world’s market, domestic producers still do not intend to slash sale prices.
Experts say steel production cost now in Vietnam is about $600 per tonne, which means that with the sale price of $630-640 per tonne, producers make profits of $30-40 per tonne, or 500,000-700,000 dong per tonne.
Meanwhile, experts, say,100,000 dong per tonne would be considered the ideal profit in steel production.
Analysts say the reason behind the refusal to drop prices is that steel producers only accept price cuts when they have big stocks and they cannot sell products due to low demand. However demand remains high.
Meanwhile, when asked why they do not slash sale prices, steel mills said that they need to maintain high prices in order to cover the losses they incurred in 2008.
In the meantime, however, foreign made steel products are flowing into Vietnam. Steel is being imported in large quantities from Malaysia, Thailand, Indonesia and China. According to the Vietnam Steel Association, the imports are about 40,000-50,000 tonnes a month.
According to Dao Dinh Dong, head of the market division under the Vietnam Steel Corporation (southern office), in general, Chinese steel mills put out 42-43 million tonnes a month. However, the output soared to 50.7 million tonnes in July and 53 million tonnes in August. This has resulted in large stocks in the context of decreasing demand and sharp falls in steel price.
Therefore, Chinese mills have targetted exports to neighbouring countries, including Vietnam, by offering very competitive prices.
Dong is worried that Chinese steel producers’ export may be boosted further by the decision by Vietnam’s government to allow the higher VAT tax fund of 12 percent instead of five percent, possibly to take effect in October 2009. If this happens, China made steel will become even more competitive.
Nguyen Tien Nghi, Deputy Chairman of the Vietnam Steel Association, has warned that if domestic producers do not adjust the sale prices, they will not be able to sell products.
Source: Vietnam Net
Indian Iron Ore Price Rises On China Demand
India’s export price for iron ore rose as much as 16 percent in the past week as customers in China replenished inventories ahead of National Day holidays, said an official of the Indian mineral industry association.
Prices rose to $70 a metric ton from $60 earlier this month, R.K. Sharma, secretary general of the Federation of Indian Mineral Industries, said today in a telephone interview.
China’s steelmakers are buying more iron ore, their main raw material, as the government implements a $586 billion stimulus spending. The economy is forecast to expand 8.2 percent this year, compared with a March estimate of 7 percent, the Asian Development Bank said last week, easing concern that the nation may slow raw-material imports.
“Demand has gathered momentum,” Sharma said. “India is benefiting as mills are stocking up ahead of the holidays.”
India’s exports may have fallen 15 percent in August and 25 percent in the first two weeks of this month, Siddharth Rungta, president of the Indian mineral body, said on Sept. 16.
China, the world’s biggest consumer of iron ore, may buy 20 percent more than forecast of the material next year, Canberra- based Australian Bureau of Agricultural and Resource Economics said on Sept. 22. China may import 637 million tons of ore in calendar 2010, compared with its June prediction of 529 million tons.
Also, global steel consumption may be 1.3 billion tons next year, up 6.5 percent from this year’s estimated 1.2 billion tons, the bureau said.
The Baltic Dry Index, the main measure of shipping costs for commodities, may surge more than 80 percent by the end of the year on increased demand for shipments to China, according China Ocean Shipping Group Co.
The gauge may rebound to 4,000 points as local governments encourage factory output, especially of steel, said Kong Fanhua, a senior researcher at China Ocean Shipping Group.
Iron-ore swaps for settlement this month traded at $79.67 a ton yesterday, according to SGX AsiaClear over-the-counter prices from Singapore Exchange Ltd. They indicate prices may rise to $81.42 in October.
China will be shut for more than week for the National Day holiday next month.
Source: Bloomberg
Prices rose to $70 a metric ton from $60 earlier this month, R.K. Sharma, secretary general of the Federation of Indian Mineral Industries, said today in a telephone interview.
China’s steelmakers are buying more iron ore, their main raw material, as the government implements a $586 billion stimulus spending. The economy is forecast to expand 8.2 percent this year, compared with a March estimate of 7 percent, the Asian Development Bank said last week, easing concern that the nation may slow raw-material imports.
“Demand has gathered momentum,” Sharma said. “India is benefiting as mills are stocking up ahead of the holidays.”
India’s exports may have fallen 15 percent in August and 25 percent in the first two weeks of this month, Siddharth Rungta, president of the Indian mineral body, said on Sept. 16.
China, the world’s biggest consumer of iron ore, may buy 20 percent more than forecast of the material next year, Canberra- based Australian Bureau of Agricultural and Resource Economics said on Sept. 22. China may import 637 million tons of ore in calendar 2010, compared with its June prediction of 529 million tons.
Also, global steel consumption may be 1.3 billion tons next year, up 6.5 percent from this year’s estimated 1.2 billion tons, the bureau said.
The Baltic Dry Index, the main measure of shipping costs for commodities, may surge more than 80 percent by the end of the year on increased demand for shipments to China, according China Ocean Shipping Group Co.
The gauge may rebound to 4,000 points as local governments encourage factory output, especially of steel, said Kong Fanhua, a senior researcher at China Ocean Shipping Group.
Iron-ore swaps for settlement this month traded at $79.67 a ton yesterday, according to SGX AsiaClear over-the-counter prices from Singapore Exchange Ltd. They indicate prices may rise to $81.42 in October.
China will be shut for more than week for the National Day holiday next month.
Source: Bloomberg
Zinc Futures Fall On Profit-Taking
Zinc futures prices on Tuesday fell up to 0.55 per cent due to profit-booking by traders following subdued demand in the spot markets.
However, overnight firmness in metal at the London Metal Exchange, restricted losses. At MCX, zinc for delivery in September contract traded 0.45 per cent down at Rs 88.95 a kg in a turnover in 488 lots.
The metal for delivery in October contract also fell by 0.55 per cent to Rs 89.90 a kg, with a turnover in 208 lots. At the London Metal Exchange, zinc closed 0.69 per cent higher at $1,865 a tonne in yesterday's trade. Analysts said emergence of profi t-taking by speculators and subdued trend in metal at spot markets on demand worries mainly attributed to the fall in zinc prices at the futures market here
Source: The Hindu Business Line
However, overnight firmness in metal at the London Metal Exchange, restricted losses. At MCX, zinc for delivery in September contract traded 0.45 per cent down at Rs 88.95 a kg in a turnover in 488 lots.
The metal for delivery in October contract also fell by 0.55 per cent to Rs 89.90 a kg, with a turnover in 208 lots. At the London Metal Exchange, zinc closed 0.69 per cent higher at $1,865 a tonne in yesterday's trade. Analysts said emergence of profi t-taking by speculators and subdued trend in metal at spot markets on demand worries mainly attributed to the fall in zinc prices at the futures market here
Source: The Hindu Business Line
Monday, September 28, 2009
Coking Coal Price Expected To Hit $200 A Tonne In 2010/11
Driven by surge in imports of coking coal by China, growth in Japanese steel output and signs of recovery in the Indian economy, spot prices of the raw material are expected to firm up in the international market.
Global prices of coking coal, which are currently hovering around $160-170 a tonne, are expected to harden further and reach $200 a tonne in 2010-11, says a report by Citi Investment Research and Analysis, a division of Citigroup Global Markets Inc.
The report has projected the price of the semi-soft variety of coking coal at $120 a tonne, up from the existing price of around $100 a tonne.
The sea-borne coking coal prices have sharply moved from $130 a tonne to $160-170 a tonne in the past three-four months as Chinese imports of the raw material have increased exponentially this year.
Coking coal imports by China are projected at 25.5 million tonnes this year, a 269.56 per cent jump over 2008. The surge is attributed to a dip in the country’s domestic production as it plans to close more than 4,000 small coal mines by 2010 to improve safety and drive consolidation in the coal sector.
“The spot prices of coking coal in Australia have touched $170 a tonne and this upward movement in prices is mainly due to an unexpected growth in imports by China. In fact, imports by the country in the past six months is comparable to what it usually imports in a period of 18 months”, said Ganesan Natarajan, president and chief executive officer, Ennore Coke.
Ennore Coke, a domestic manufacturer of metallurgical coke, which uses imported coking coal as the raw material, had settled its contracts for 2009-10 at around $130 a tonne with the international suppliers. However, Natarajan ruled out any further hardening of prices and said that premium hard coking coal rates in 2010-11 are expected to remain at the current level of $170 a tonne.
Dipesh Dipu, principal consultant, Pricewaterhouse Coopers said, “The coking coal prices in the short run, particularly in the second half of the year, may depend on the impact of Chinese order for the smaller mines to merge with the larger ones. The prices in 2011 are also expected to be in line with the prevailing prices or may be a few dollars higher than those of 2010.”
He indicated that the increase in global coking coal prices was set to impact the operations of the domestic steel makers who heavily depend on imports for their requirements.
Higher coking coal prices would mean greater contract prices for the domestic steel makers and this is bound to impact their margins, concurred Shashi Kumar, advisor (coal), NTPC and former chairman, Coal India Ltd (CIL).
Apart from coking coal prices, the outlook for thermal coal prices is also robust and the contract price for this variety of coal is projected at $80 a tonne in 2010-11.
“The spot price for internationally traded thermal coal in the second half of this financial year is likely to hover around $70 a tonne. This may primarily be attributed to strength in demand from power producers in emerging markets, including India”, said Dipu.
In the domestic market, CIL has sought a moderate hike in coal prices as its average prices were 30-40 per cent cheaper than the prevailing international prices. The prices of coal in India were last revised in December 2007.
Source: Business Standard
Global prices of coking coal, which are currently hovering around $160-170 a tonne, are expected to harden further and reach $200 a tonne in 2010-11, says a report by Citi Investment Research and Analysis, a division of Citigroup Global Markets Inc.
The report has projected the price of the semi-soft variety of coking coal at $120 a tonne, up from the existing price of around $100 a tonne.
The sea-borne coking coal prices have sharply moved from $130 a tonne to $160-170 a tonne in the past three-four months as Chinese imports of the raw material have increased exponentially this year.
Coking coal imports by China are projected at 25.5 million tonnes this year, a 269.56 per cent jump over 2008. The surge is attributed to a dip in the country’s domestic production as it plans to close more than 4,000 small coal mines by 2010 to improve safety and drive consolidation in the coal sector.
“The spot prices of coking coal in Australia have touched $170 a tonne and this upward movement in prices is mainly due to an unexpected growth in imports by China. In fact, imports by the country in the past six months is comparable to what it usually imports in a period of 18 months”, said Ganesan Natarajan, president and chief executive officer, Ennore Coke.
Ennore Coke, a domestic manufacturer of metallurgical coke, which uses imported coking coal as the raw material, had settled its contracts for 2009-10 at around $130 a tonne with the international suppliers. However, Natarajan ruled out any further hardening of prices and said that premium hard coking coal rates in 2010-11 are expected to remain at the current level of $170 a tonne.
Dipesh Dipu, principal consultant, Pricewaterhouse Coopers said, “The coking coal prices in the short run, particularly in the second half of the year, may depend on the impact of Chinese order for the smaller mines to merge with the larger ones. The prices in 2011 are also expected to be in line with the prevailing prices or may be a few dollars higher than those of 2010.”
He indicated that the increase in global coking coal prices was set to impact the operations of the domestic steel makers who heavily depend on imports for their requirements.
Higher coking coal prices would mean greater contract prices for the domestic steel makers and this is bound to impact their margins, concurred Shashi Kumar, advisor (coal), NTPC and former chairman, Coal India Ltd (CIL).
Apart from coking coal prices, the outlook for thermal coal prices is also robust and the contract price for this variety of coal is projected at $80 a tonne in 2010-11.
“The spot price for internationally traded thermal coal in the second half of this financial year is likely to hover around $70 a tonne. This may primarily be attributed to strength in demand from power producers in emerging markets, including India”, said Dipu.
In the domestic market, CIL has sought a moderate hike in coal prices as its average prices were 30-40 per cent cheaper than the prevailing international prices. The prices of coal in India were last revised in December 2007.
Source: Business Standard
Ormonde Makes Progress In Spain
Ormonde Mining, the AIM and IEX listed mining outfit with operations in Spain, today said it had put “significant effort” into progressing its two main projects during the first half of the year.
Work on the Barruecopardo tungsten project saw a doubling of the projected annual production to 400,000 tons following further appraisal work on the asset.
The currently defined JORC Inferred Resource at Barruecopardo is 5.2 million tons at an average grade of 0.48% tungsten trioxide. The company noted that with this size and grade of resource, Barruecopardo was already a major western world tungsten deposit. It is currently looking for a funding partner to help develop the project.
At the La Zarza copper-gold project Ormonde had better luck in attracting a partner after agreeing a deal with a mining major to inject US$7 million over a three year period via a joint venture to earn a 51% interest in the project.
Source: Small Cap News
Work on the Barruecopardo tungsten project saw a doubling of the projected annual production to 400,000 tons following further appraisal work on the asset.
The currently defined JORC Inferred Resource at Barruecopardo is 5.2 million tons at an average grade of 0.48% tungsten trioxide. The company noted that with this size and grade of resource, Barruecopardo was already a major western world tungsten deposit. It is currently looking for a funding partner to help develop the project.
At the La Zarza copper-gold project Ormonde had better luck in attracting a partner after agreeing a deal with a mining major to inject US$7 million over a three year period via a joint venture to earn a 51% interest in the project.
Source: Small Cap News
Chinese Firms Seek Stake In Minas Rio Project
Chinese companies have approached Anglo American about taking a stake in the planned Minas Rio iron ore operation in Brazil as they look to secure supply from one of the world's biggest new mines and encourage production from miners other than the three giants, Rio Tinto, BHP Billiton and Vale.
Anglo, the world's fourth biggest iron ore producer after the big three, paid $US7 billion for Minas Rio in 2008.
Since then it has boosted the iron ore resource there from 300 million tonnes to 1 billion tonnes and says it has potential to increase this to 7 billion tonnes.
"We have been approached by quite a number of possible partners very keen to get in with us," Anglo chief executive Cynthia Carroll said yesterday.
She said Chinese groups were among potential investors but Anglo wanted to do more work on development plans and capital requirements of future stages before selecting a partner.
Anglo plans to begin producing 26 million tonnes of iron ore a year from the mine from 2012 and then ramp up production to about 80 million tonnes a year, which is just under three-quarters of the current capacity of BHP's Pilbara iron ore network.
China is keen to secure supply for future demand and, as evidenced by its support of Andrew Forrest's Fortescue Metals Group in Western Australia, wants also to encourage growth from producers other than BHP, Rio and Vale, which control 70 per cent of the world's seaborne iron ore.
"Iron ore demand out of China for us in particular is at record levels -- they can't get enough," Ms Carroll said.
Source: The Australian
Anglo, the world's fourth biggest iron ore producer after the big three, paid $US7 billion for Minas Rio in 2008.
Since then it has boosted the iron ore resource there from 300 million tonnes to 1 billion tonnes and says it has potential to increase this to 7 billion tonnes.
"We have been approached by quite a number of possible partners very keen to get in with us," Anglo chief executive Cynthia Carroll said yesterday.
She said Chinese groups were among potential investors but Anglo wanted to do more work on development plans and capital requirements of future stages before selecting a partner.
Anglo plans to begin producing 26 million tonnes of iron ore a year from the mine from 2012 and then ramp up production to about 80 million tonnes a year, which is just under three-quarters of the current capacity of BHP's Pilbara iron ore network.
China is keen to secure supply for future demand and, as evidenced by its support of Andrew Forrest's Fortescue Metals Group in Western Australia, wants also to encourage growth from producers other than BHP, Rio and Vale, which control 70 per cent of the world's seaborne iron ore.
"Iron ore demand out of China for us in particular is at record levels -- they can't get enough," Ms Carroll said.
Source: The Australian
Petropavlovsk To Start Construction On East Russian Iron Ore Projects
Russian miner Petropavlovsk Group, which manages the principal assets located in Russia of London-listed mining and exploration company, Peter Hambro Mining, has started the construction of its iron ore project located on the Kimkan and Sutara iron ore fields in the Russian Far East, while it has also started building the first railway bridge between Russia and China across the Amur river.
The K&S iron ore project will have an annual production capacity of 4.18 million tonnes of iron ore concentrate and 2.5 million tonnes of granulated direct reduced iron, produced by the use of ITmk3 technology. Currently, the construction of a mining and processing plant is being carried out, with full production capacity scheduled to be reached in 2012. In 2010, it is planned to begin the construction of a metallizing plant which is to start production of granulated iron in 2014.
Petropavlovsk is to invest a total of Ruble 59.5 billion in its K&S iron ore project and in its other projects, including the implementation of its Garinskoye mining project. The K&S project is located close to the border with China, and will allow the company to export iron ore to this country more cheaply.
The construction of the railway bridge across the Amur River has become the first joint project for the development of the border territories of Russia and China. The Russian part of the project will require an investment of RUB 4.2 billion. It is expected that the first train will cross the bridge in 2013, and by 2020 the bridge is expected to carry 20 million tonnes of goods per year of which metallurgical products will account for 45%.
On September 14th 2009, Peter Hambro Mining decided to change its name to Petropavlovsk PLC to better reflect the fact that the London-traded company's assets are located in Russia.
Source: Steel Guru
The K&S iron ore project will have an annual production capacity of 4.18 million tonnes of iron ore concentrate and 2.5 million tonnes of granulated direct reduced iron, produced by the use of ITmk3 technology. Currently, the construction of a mining and processing plant is being carried out, with full production capacity scheduled to be reached in 2012. In 2010, it is planned to begin the construction of a metallizing plant which is to start production of granulated iron in 2014.
Petropavlovsk is to invest a total of Ruble 59.5 billion in its K&S iron ore project and in its other projects, including the implementation of its Garinskoye mining project. The K&S project is located close to the border with China, and will allow the company to export iron ore to this country more cheaply.
The construction of the railway bridge across the Amur River has become the first joint project for the development of the border territories of Russia and China. The Russian part of the project will require an investment of RUB 4.2 billion. It is expected that the first train will cross the bridge in 2013, and by 2020 the bridge is expected to carry 20 million tonnes of goods per year of which metallurgical products will account for 45%.
On September 14th 2009, Peter Hambro Mining decided to change its name to Petropavlovsk PLC to better reflect the fact that the London-traded company's assets are located in Russia.
Source: Steel Guru
Pike River Coal In Talks With Asian Customers
Pike River Coal is in "ongoing discussions" with groups in China and Korea, despite most of its production already committed for at least the next three years.
The country's only listed coal mining company, Pike River is mining the Brunner seam on Department of Conservation land on the Paparoa Ranges, 50 miles north-east of Greymouth in the South Island's West Coast.
The underground mine holds 58.6 million tonnes of hard coking coal, with a further potential of 8 million tonnes from the three Paparoa seams below the Brunner seam. Pike River expects to recover at least 18 million tonnes over the mine's 18-year life-span.
Plagued by delays to its planned production, the company is now preparing for its first shipment from Lyttelton to India in the first quarter of 2010.
Chief executive Gordon Ward said Pike River was entering the export market at a good time, as demand for hard coking coal recovered, due mainly to record imports by China this calendar year and international spot prices trading above the contract price.
Pike River has already sold three-quarters of its output over the next three years to Japan and India, with two Indian cornerstone shareholders committed to 55% for the life of the mine.
Mr Ward said there was also strong interest from other countries, including China and Korea. "In the last three to four months there's been increasing interest, which is reflective of increasing spot prices."
The company contracted coal sales to March 2010 at $US128 per tonne, but prices increased after that up to the $US170 mark, he said.
While Mr Ward said discussions were ongoing, it depended on how much tonnage the company "locked down."
"Ideally we'd have 10% to 20% available for the spot market," he said. "Then we might only have 5% to 10% available...it may just be purchased on a short-term contract."
At full production, Pike River expected to mine at the rate of one million tonnes a year, operating the second largest export coal mine in New Zealand (to Solid Energy).
Source: National Business Review
The country's only listed coal mining company, Pike River is mining the Brunner seam on Department of Conservation land on the Paparoa Ranges, 50 miles north-east of Greymouth in the South Island's West Coast.
The underground mine holds 58.6 million tonnes of hard coking coal, with a further potential of 8 million tonnes from the three Paparoa seams below the Brunner seam. Pike River expects to recover at least 18 million tonnes over the mine's 18-year life-span.
Plagued by delays to its planned production, the company is now preparing for its first shipment from Lyttelton to India in the first quarter of 2010.
Chief executive Gordon Ward said Pike River was entering the export market at a good time, as demand for hard coking coal recovered, due mainly to record imports by China this calendar year and international spot prices trading above the contract price.
Pike River has already sold three-quarters of its output over the next three years to Japan and India, with two Indian cornerstone shareholders committed to 55% for the life of the mine.
Mr Ward said there was also strong interest from other countries, including China and Korea. "In the last three to four months there's been increasing interest, which is reflective of increasing spot prices."
The company contracted coal sales to March 2010 at $US128 per tonne, but prices increased after that up to the $US170 mark, he said.
While Mr Ward said discussions were ongoing, it depended on how much tonnage the company "locked down."
"Ideally we'd have 10% to 20% available for the spot market," he said. "Then we might only have 5% to 10% available...it may just be purchased on a short-term contract."
At full production, Pike River expected to mine at the rate of one million tonnes a year, operating the second largest export coal mine in New Zealand (to Solid Energy).
Source: National Business Review
Baffinland Pleased With Mary River Trial
Baffinland Iron Mines appears pleased with the results from its Mary River lump iron ore trial cargo shipped to ThyssenKrupp Steel. The German steelmaker consumed the lump ore in one of the world's largest blast furnaces at a rate of 16% Mary River ore and 84% sinter.
Michael Zurowski, executive VP of Baffinland, said, "Baffinland's Mary River lump iron ore has now passed the ultimate test, the rigours of the commercial blast furnace. Baffinland is very pleased with the outstanding test results of the trial cargos. Mary River lump iron ore is an exceptional lump iron ore and should be an attractive alternative for pellets as a cheaper burden feed with no loss of productivity."
Source: Canadian Mining Journal
Michael Zurowski, executive VP of Baffinland, said, "Baffinland's Mary River lump iron ore has now passed the ultimate test, the rigours of the commercial blast furnace. Baffinland is very pleased with the outstanding test results of the trial cargos. Mary River lump iron ore is an exceptional lump iron ore and should be an attractive alternative for pellets as a cheaper burden feed with no loss of productivity."
Source: Canadian Mining Journal
Sunday, September 27, 2009
Avonlea Reports Positive Results From Namibia Iron Ore Project
Avonlea Minerals has reported encouraging sampling results from a set of iron prospects within the company’s Okatumba exclusive prospecting license 4129 in Namibia.
Avonlea said that it undertook its first exploration program in July 2009 and incorporated grab and surface channel samples were conducted over the Hammerhead, Bronzy, Nail and Tack targets in the northern part of the 1000 square kilometer EPL.
Avonlea said that it was enthusiastic that the initial assays indicated a very large scale magnetite rich mineralization zone at Hammerhead and neighboring prospects. It added that "Better surface channel sampling results from magnetite-rich zones included 300 line metres grading 23% Fe, 70 line metres at 28% Fe and 60 line metres at 27% Fe, while grab samples returning high grade zones of 49% and 45% Fe were also collected."
Source: The Economist, Namibia
Avonlea said that it undertook its first exploration program in July 2009 and incorporated grab and surface channel samples were conducted over the Hammerhead, Bronzy, Nail and Tack targets in the northern part of the 1000 square kilometer EPL.
Avonlea said that it was enthusiastic that the initial assays indicated a very large scale magnetite rich mineralization zone at Hammerhead and neighboring prospects. It added that "Better surface channel sampling results from magnetite-rich zones included 300 line metres grading 23% Fe, 70 line metres at 28% Fe and 60 line metres at 27% Fe, while grab samples returning high grade zones of 49% and 45% Fe were also collected."
Source: The Economist, Namibia
Saturday, September 26, 2009
Novolipetsk In Talks To Buy Ferromanganese Producer
Russian steelmaker Novolipetsk Steel is interested in the acquisition of ferromanganese producer Alapaevsk Iron and Steel Works located in the Sverdlovsk region from the Ukrainian Privat Group.
Mr Anatoliy Gredin Sverdlovsk region's minister of industry and science said "We have so many problems with foreign investors. Alapaevsk Iron and Steel Works employed more than two thousand workers before, while today it employs 70 people. The plant has been stopped. Currently, we are carrying out negotiations with NLMK in relation to their bid to acquire this enterprise."
Mr Gredin said for a year now NLMK has been conducting negotiations with the Ukrainian side for the purchase of the plant, but the talks are proceeding with great complications as the two sides cannot agree on the price. According to the calculations of experts, the maximal market price of the plant is USD 10 million.
Alapaevsk Iron and Steel Works are specialized in the production of ferromanganese in blast furnaces and have an annual production capacity of 40,000 tonnes. The plant, 100% owned by Privat Group, stopped its operations in 2005, when it produced 13,000 tonnes of ferromanganese.
Source: Steel Guru
Mr Anatoliy Gredin Sverdlovsk region's minister of industry and science said "We have so many problems with foreign investors. Alapaevsk Iron and Steel Works employed more than two thousand workers before, while today it employs 70 people. The plant has been stopped. Currently, we are carrying out negotiations with NLMK in relation to their bid to acquire this enterprise."
Mr Gredin said for a year now NLMK has been conducting negotiations with the Ukrainian side for the purchase of the plant, but the talks are proceeding with great complications as the two sides cannot agree on the price. According to the calculations of experts, the maximal market price of the plant is USD 10 million.
Alapaevsk Iron and Steel Works are specialized in the production of ferromanganese in blast furnaces and have an annual production capacity of 40,000 tonnes. The plant, 100% owned by Privat Group, stopped its operations in 2005, when it produced 13,000 tonnes of ferromanganese.
Source: Steel Guru
Sesa Goa To Raise Rs6,000 Crore
Domestic mining firm Sesa Goa on Friday said it will raise funds to the tune of Rs 6,000 crore through the issue of various securities in domestic as well as overseas markets.
The company plans to raise the said amount through the issue of Foreign Currency Convertible Bonds (FCCB), qualified institutional placements, global depository receipts, warrants or any other securities. A shareholders meeting would be held on October 20, to consider the fund raising of up to Rs 6,000 crore and an FCCBs issue of $500 million, Sesa Goa informed the BSE.
Regarding the $500 million (over Rs 2,400 crore) FCCB issue, the company said it has fixed the conversion price of its FCCBs at Rs 346.88 a piece. The proceeds from the FCCB offering would be used to expand the mining operations and to further develop i ts pig iron and metallurgical coke operations. The proceeds would be used in accordance with the external commercial borrowing regulations of the Reserve Bank of India, Sesa Goa said, adding that “the proceeds are intended to be used for financing the g rowth plans, including a rise in the mining capacity through organic and inorganic routes.''
The board has also approved a capital expenditure plan of Rs 605 crore ($125 million) for increasing the capacity of its Pig Iron plant along with expansion of Met Coke Plant and setting up a Waste Heat Recovery Power Plant.
Source: PTI
The company plans to raise the said amount through the issue of Foreign Currency Convertible Bonds (FCCB), qualified institutional placements, global depository receipts, warrants or any other securities. A shareholders meeting would be held on October 20, to consider the fund raising of up to Rs 6,000 crore and an FCCBs issue of $500 million, Sesa Goa informed the BSE.
Regarding the $500 million (over Rs 2,400 crore) FCCB issue, the company said it has fixed the conversion price of its FCCBs at Rs 346.88 a piece. The proceeds from the FCCB offering would be used to expand the mining operations and to further develop i ts pig iron and metallurgical coke operations. The proceeds would be used in accordance with the external commercial borrowing regulations of the Reserve Bank of India, Sesa Goa said, adding that “the proceeds are intended to be used for financing the g rowth plans, including a rise in the mining capacity through organic and inorganic routes.''
The board has also approved a capital expenditure plan of Rs 605 crore ($125 million) for increasing the capacity of its Pig Iron plant along with expansion of Met Coke Plant and setting up a Waste Heat Recovery Power Plant.
Source: PTI
Ferrovanadium Prices Slip
Ferrovanadium spot prices have dropped $1.45/lb to $11.80 in just two weeks, possibly an indication that production of high-strength steels and tool steels is about to soften and push the alloying metal's price down again.
The alloying metal was selling as low as $7.40/lb in April because of a serious overhang of inventory and collapsed demand from specialty steelmakers. Prices inched back up from May to August in line with reduced stockpiles caused by expanded exports and slow and gradual improvement in purchases by the domestic steel companies.
However, transaction prices have turned south as "the market has been as flat as a pancake in the U.S. for the past five or six weeks," a producer tells AMM.com. With regards to purchasing by specialty steelmakers, "just nothing is happening."
Some traders believe that the market price will fall again soon. One trader has been telling the press that "the reality is market much weaker than the trade journals have been reporting." Yet another says that "the U.S. market is pretty thin on demand at the moment."
Source: Purchasing.com
The alloying metal was selling as low as $7.40/lb in April because of a serious overhang of inventory and collapsed demand from specialty steelmakers. Prices inched back up from May to August in line with reduced stockpiles caused by expanded exports and slow and gradual improvement in purchases by the domestic steel companies.
However, transaction prices have turned south as "the market has been as flat as a pancake in the U.S. for the past five or six weeks," a producer tells AMM.com. With regards to purchasing by specialty steelmakers, "just nothing is happening."
Some traders believe that the market price will fall again soon. One trader has been telling the press that "the reality is market much weaker than the trade journals have been reporting." Yet another says that "the U.S. market is pretty thin on demand at the moment."
Source: Purchasing.com
Chonggang Looks To Buy 3 bn Tonnes Of Australian Iron Ore
By the end of 2010, Chonggang will have an annual steel production of 6.5mln tons and revenues of 35bln yuan, and iron ore is the major support. Chonggang stated on September 24 that at present besides five mines in Sichuan, Shaanxi and Chongqing making a domestic iron ore production of 10mln tons and self-sufficiency of over 50%, the government is negotiating the purchase of one iron mine with 3bln tons. If the project can succeed it will become Chongqing's overseas largest iron ore buying project.
Insiders believe that Australia's iron ore price is one of the global wind vanes. The iron ore giant of this country---BHP Billiton, provides iron ore raw materials for China's large-scale steel groups. If Chongqing succeeds in purchasing the Australian iron ore project, it may not only meet the iron ore demand from local state-owned companies, but may also help domestic enterprises avoid the risk from a rising iron ore price and carry out iron ore transactions as well bring online a new revenue stream.
Previously, Chonggang also imported iron ore material from Australia. Top officials at Chonggang unveiled that the company needs to import 5mln tons of iron ore, with4mln tons from Australia and Brazil.
Source: Alibaba
Insiders believe that Australia's iron ore price is one of the global wind vanes. The iron ore giant of this country---BHP Billiton, provides iron ore raw materials for China's large-scale steel groups. If Chongqing succeeds in purchasing the Australian iron ore project, it may not only meet the iron ore demand from local state-owned companies, but may also help domestic enterprises avoid the risk from a rising iron ore price and carry out iron ore transactions as well bring online a new revenue stream.
Previously, Chonggang also imported iron ore material from Australia. Top officials at Chonggang unveiled that the company needs to import 5mln tons of iron ore, with4mln tons from Australia and Brazil.
Source: Alibaba
Friday, September 25, 2009
National Aluminium, Hindustan Copper To Begin Prospecting In Namibia
India's National Aluminium Co. is in talks with Hindustan Copper Ltd. to explore for the metal in Namibia, National Aluminium Finance Director B.L. Bagra said today in a telephone interview with Bloomberg.
Namibia agreed last month to give Indian companies access to explore for copper and diamonds in the African nation, India’s Mines Minister B.K. Handique said on Sept. 16.
Source: Bloomberg
Namibia agreed last month to give Indian companies access to explore for copper and diamonds in the African nation, India’s Mines Minister B.K. Handique said on Sept. 16.
Source: Bloomberg
Glebe Given Fluorspar Go-Ahead
A mining company's application to work a Peak District quarry for six years has been given the go-ahead after a court decision looked like throwing the application into doubt.
In January, Peak District National Park Authority granted Glebe Mines permission to extract 660,000 tonnes of fluorspar ore from Tearsall Quarry over six years, on Bonsall Moor.
It followed an offer by Glebe to give up its rights to quarry minerals at another environmentally-sensitive site – Peak Pasture, at Longstone Edge.
But in March, a Court of Appeal decision clarified the legal status of quarries on Longstone Edge, including Peak Pasture.
As a result, authority members have reconsidered whether the benefits gained were still sufficient to warrant allowing the Tearsall application to go ahead.
After a debate, authority members decided that, on balance, the benefits of protecting Peak Pasture meant the application should proceed.
Narendra Bajaria, chair of the Peak District National Park Authority, said: "Even with the new ruling, the 1952 planning permission covering Peak Pasture doesn't require the site to be restored once quarrying has finished."
Source: Bakewell Today
In January, Peak District National Park Authority granted Glebe Mines permission to extract 660,000 tonnes of fluorspar ore from Tearsall Quarry over six years, on Bonsall Moor.
It followed an offer by Glebe to give up its rights to quarry minerals at another environmentally-sensitive site – Peak Pasture, at Longstone Edge.
But in March, a Court of Appeal decision clarified the legal status of quarries on Longstone Edge, including Peak Pasture.
As a result, authority members have reconsidered whether the benefits gained were still sufficient to warrant allowing the Tearsall application to go ahead.
After a debate, authority members decided that, on balance, the benefits of protecting Peak Pasture meant the application should proceed.
Narendra Bajaria, chair of the Peak District National Park Authority, said: "Even with the new ruling, the 1952 planning permission covering Peak Pasture doesn't require the site to be restored once quarrying has finished."
Source: Bakewell Today
Slight Rise In Japan Copper Output Hints At Recovery
Japan's output of rolled copper products rose 2.2 percent in August from July, preliminary data showed on Friday, in a sign of recovering metals demand as the country's economy appears to be on the mend.
Japan's demand for copper began to plunge from late last year as major manufacturers cut output in a sharp economic downturn.
Now appetite is sharpening in the automobile and semiconductor sectors, but the August figure remains low on an annual basis.
August's seasonally adjusted figure fell 21 percent on the year, to 63,224 tonnes, the Japan Copper and Brass Association said.
Japan's economic activity traditionally slows in August for the country's summer break.
The association also said it expects demand for the year to March 2010 to total 713,930 tonnes -- the lowest since the year ended March 1976. That represents an 11.5 percent decrease from the year ended in March 2009.
Demand recovery in copper, which has several applications from air conditioners to computer chips, has been led by the semiconductor sector, with demand from the automobile sector, another large user, also improving.
Japanese industry officials say consumption of copper has returned to about 70 to 80 percent of its levels in 2008.
The Japanese Electric Wire and Cable Makers' Association last week estimated that annual demand for copper wire and cable shipments for the fiscal year through March 2010 was likely to be the lowest since 1971/72.
Source: Reuters
Japan's demand for copper began to plunge from late last year as major manufacturers cut output in a sharp economic downturn.
Now appetite is sharpening in the automobile and semiconductor sectors, but the August figure remains low on an annual basis.
August's seasonally adjusted figure fell 21 percent on the year, to 63,224 tonnes, the Japan Copper and Brass Association said.
Japan's economic activity traditionally slows in August for the country's summer break.
The association also said it expects demand for the year to March 2010 to total 713,930 tonnes -- the lowest since the year ended March 1976. That represents an 11.5 percent decrease from the year ended in March 2009.
Demand recovery in copper, which has several applications from air conditioners to computer chips, has been led by the semiconductor sector, with demand from the automobile sector, another large user, also improving.
Japanese industry officials say consumption of copper has returned to about 70 to 80 percent of its levels in 2008.
The Japanese Electric Wire and Cable Makers' Association last week estimated that annual demand for copper wire and cable shipments for the fiscal year through March 2010 was likely to be the lowest since 1971/72.
Source: Reuters
Thursday, September 24, 2009
Indian Iron Ore Mining May Be Allowed Over 100 Sq Kn
The government is considering to increase maximum area for iron ore mining from 25 sq km to 100 sq km to ensure enough supply of raw materials to steel companies, an official in the steel ministry said requesting anonymity.
“A proposal of steel ministry in this regard is being considered by the mines ministry which will be included in the proposed new Mines and Minerals (scientific development and regulation) or MMDR Bill,” he said.
The new legislation will replace the existing MMDR Act and operationalise the National Mineral Policy which has already been announced by the government. The government is likely to place the new legislation for Parliamentary approval during the winter session, the official said.
In its comments steel ministry has suggested that the maximum area for mining iron ore should be linked to other major minerals where 100 sq km of land is provided for mining. It has said that changes is important as major investment is likely in iron and steel making in the country for building infrastructure and present restriction of 25 sq km would be hindrance.
Iron ore is the key raw material used for steel making. While India is surplus in iron ore production at present, various estimates by government and non-government agencies have suggested that this situation may soon turn to deficit if government did not promote scientific mining and identify and preserve ore resources for future use.
“The increase in area for mining iron ore would also remove ambiguity created in present regulations. There are several manganese bearing areas where even iron ore occurs and government gives lease for mining both the minerals. However, area restriction for iron ore also impacts manganese mining,” said a senior official of private sector steel company who also wished not to be identified.
Mining areas in overseas countries are much larger than it is existing in India. Countries like Australia, Brazil are able to extract more iron ore due to scientific mining that is possible on large tracks of mineral bearing land. Area restriction often hampers ore production in India and acts as a disincentive for making investment towards scientific mining.
Source: Economic Times
“A proposal of steel ministry in this regard is being considered by the mines ministry which will be included in the proposed new Mines and Minerals (scientific development and regulation) or MMDR Bill,” he said.
The new legislation will replace the existing MMDR Act and operationalise the National Mineral Policy which has already been announced by the government. The government is likely to place the new legislation for Parliamentary approval during the winter session, the official said.
In its comments steel ministry has suggested that the maximum area for mining iron ore should be linked to other major minerals where 100 sq km of land is provided for mining. It has said that changes is important as major investment is likely in iron and steel making in the country for building infrastructure and present restriction of 25 sq km would be hindrance.
Iron ore is the key raw material used for steel making. While India is surplus in iron ore production at present, various estimates by government and non-government agencies have suggested that this situation may soon turn to deficit if government did not promote scientific mining and identify and preserve ore resources for future use.
“The increase in area for mining iron ore would also remove ambiguity created in present regulations. There are several manganese bearing areas where even iron ore occurs and government gives lease for mining both the minerals. However, area restriction for iron ore also impacts manganese mining,” said a senior official of private sector steel company who also wished not to be identified.
Mining areas in overseas countries are much larger than it is existing in India. Countries like Australia, Brazil are able to extract more iron ore due to scientific mining that is possible on large tracks of mineral bearing land. Area restriction often hampers ore production in India and acts as a disincentive for making investment towards scientific mining.
Source: Economic Times
Baltic Dry Index Hits Quarterly Low
With demand for iron ore in China sliding and more vessel capacity coming online through the end of the year, dry bulk freight rates have sunk to four-month lows on the Baltic Dry Index this week and look to continue down, according to several experts.
The Baltic Dry Index, which measures dry bulk ocean freight rates in a collection of lanes, has dropped steadily from a recent peak in June above 4,000 to its close yesterday of 2,175. Reuters reports that average Capesize earnings, for example, have fallen to $23,762 this week, down 74% since their June peak this year.
"Panamaxes are beginning to feel the pressure as well on increased competition from Capes as well as lighter volumes than last week," Dahlman Rose & Company said in a note.
One of the biggest drivers of drybulk freight demand is iron ore shipping to China for steelmaking. With stimulus-fed production slipping, China's iron-ore imports declined 14% in August from July and coal imports slid 15%, a second consecutive monthly decline, according to a Bloomberg analysis of customs data. And the outlook for iron ore demand from most analysts points to a short-term slump.
"Lower Chinese imports will slow iron-ore trade in late 2009," said Piet-Hein Ingen Housz, managing director of metals commodities at Fortis, in a Bloomberg report. "Iron-ore trade growth will be slow in the first half of 2010, with activity increasing" later that year, he said.
But at the same time, there is a continuing overcapacity issue in drybulk freight markets. The rally in drybulk rates earlier this year may have been enough to convince some shipbuilders to avoid retiring older ships or scrapping plans for new ones, creating overcapacity on the water, especially in the all-important lanes between Asia and North and South America. And port congestion that once plagued the market is much less of an issue with the lower volumes.
Morgan Stanley analyst Ole Slorer says, "While the impressive recovery in dry bulk markedly lifted rates and values in 2009, it also resulted in a near-halt in scrapping and less incentive to cancel newbuildings from a total orderbook that currently stands at 65% of the fleet."
Another Fortis analyst tells Bloomberg there are still more than 100 Capesizes are due for delivery by year-end and one such ship will be delivered every day next year, as shipowners placed orders in the last few years as rates rose.
Source: Purchasing.com
The Baltic Dry Index, which measures dry bulk ocean freight rates in a collection of lanes, has dropped steadily from a recent peak in June above 4,000 to its close yesterday of 2,175. Reuters reports that average Capesize earnings, for example, have fallen to $23,762 this week, down 74% since their June peak this year.
"Panamaxes are beginning to feel the pressure as well on increased competition from Capes as well as lighter volumes than last week," Dahlman Rose & Company said in a note.
One of the biggest drivers of drybulk freight demand is iron ore shipping to China for steelmaking. With stimulus-fed production slipping, China's iron-ore imports declined 14% in August from July and coal imports slid 15%, a second consecutive monthly decline, according to a Bloomberg analysis of customs data. And the outlook for iron ore demand from most analysts points to a short-term slump.
"Lower Chinese imports will slow iron-ore trade in late 2009," said Piet-Hein Ingen Housz, managing director of metals commodities at Fortis, in a Bloomberg report. "Iron-ore trade growth will be slow in the first half of 2010, with activity increasing" later that year, he said.
But at the same time, there is a continuing overcapacity issue in drybulk freight markets. The rally in drybulk rates earlier this year may have been enough to convince some shipbuilders to avoid retiring older ships or scrapping plans for new ones, creating overcapacity on the water, especially in the all-important lanes between Asia and North and South America. And port congestion that once plagued the market is much less of an issue with the lower volumes.
Morgan Stanley analyst Ole Slorer says, "While the impressive recovery in dry bulk markedly lifted rates and values in 2009, it also resulted in a near-halt in scrapping and less incentive to cancel newbuildings from a total orderbook that currently stands at 65% of the fleet."
Another Fortis analyst tells Bloomberg there are still more than 100 Capesizes are due for delivery by year-end and one such ship will be delivered every day next year, as shipowners placed orders in the last few years as rates rose.
Source: Purchasing.com
Anglo-America To Boost Its Queensland Output
Predicting recent Chinese coking coal import demand is here to stay, Anglo American wants to double its global coking coal production by boosting output from its Queensland mines.
The mining giant, which produces most of its 15 million tonnes a year of coking coal from Australia, said it wanted to increase production to 30 million tonnes a year by 2018.
Expanded production beyond 2011 is yet to be sanctioned, but the company is targeting an average 12 per cent annual increase in output each year until then, Anglo Coal boss and former Gold Fields chief executive Ian Cockerill said in a presentation in London.
"Anglo's future seaborne metallurgical (coking) coal growth is focused on consolidating around its existing clusters in the highest-quality metallurgical coal areas of Queensland's Bowen Basin," he said. Australia is the world's biggest exporter of coking coal, mostly from mines in the Bowen Basin of eastern Queensland, which has the world's lowest production cost.
Demand for coking coal, which is used to make steel, slumped late last year with the global financial crisis. But a surprise boost in demand this year from China, where many domestic mines were closed for cost, environmental and safety reasons, saved Australian miners from another round of production cuts.
Demand from China, which had been a net exporter, was treated cautiously at first. But recently, coking coal exporters, including the world's biggest, BHP Billiton, have become more confident the nation's imports can be sustained.
Mr Cockerill said China's demand for seaborne coal was expected to grow at a rate of about 6 per cent a year over the next decade. Most of Anglo's growth will come from previously flagged, but not approved, projects at Moranbah South and Grosvenor, west of Mackay, which have the potential to produce a combined 10 million tonnes a year of coking coal. The remaining 5 million tonnes of capacity would probably come from expansions at its CapCoal and Foxleigh mines, which are further south and can now produce a combined 10 million tonnes of coal a year.
China's imports of Australian coking coal dropped 29 per cent in August, according to Chinese customs data reported this week by Dow Jones Newswires.
Despite the fall, however, it was the third-highest month for Australian imports this year and nine times higher than a year earlier.
The steelmaking giant imported 2.39 million tonnes of Australian coking coal last month, down from record rates of about 3.2 million tonnes in June and July. The drop indicates that some of the higher-cost Chinese coking coalmines are starting to increase production, but analysts do not expect domestic production there to be able to flood the market.
"China's production is increasing, but so is demand," Citi commodities analyst Alan Heap said this week.
Citi raised its coking coal price forecast for the 2010 Japanese financial year from $US140 a tonne to $US200.
Source: The Australian
The mining giant, which produces most of its 15 million tonnes a year of coking coal from Australia, said it wanted to increase production to 30 million tonnes a year by 2018.
Expanded production beyond 2011 is yet to be sanctioned, but the company is targeting an average 12 per cent annual increase in output each year until then, Anglo Coal boss and former Gold Fields chief executive Ian Cockerill said in a presentation in London.
"Anglo's future seaborne metallurgical (coking) coal growth is focused on consolidating around its existing clusters in the highest-quality metallurgical coal areas of Queensland's Bowen Basin," he said. Australia is the world's biggest exporter of coking coal, mostly from mines in the Bowen Basin of eastern Queensland, which has the world's lowest production cost.
Demand for coking coal, which is used to make steel, slumped late last year with the global financial crisis. But a surprise boost in demand this year from China, where many domestic mines were closed for cost, environmental and safety reasons, saved Australian miners from another round of production cuts.
Demand from China, which had been a net exporter, was treated cautiously at first. But recently, coking coal exporters, including the world's biggest, BHP Billiton, have become more confident the nation's imports can be sustained.
Mr Cockerill said China's demand for seaborne coal was expected to grow at a rate of about 6 per cent a year over the next decade. Most of Anglo's growth will come from previously flagged, but not approved, projects at Moranbah South and Grosvenor, west of Mackay, which have the potential to produce a combined 10 million tonnes a year of coking coal. The remaining 5 million tonnes of capacity would probably come from expansions at its CapCoal and Foxleigh mines, which are further south and can now produce a combined 10 million tonnes of coal a year.
China's imports of Australian coking coal dropped 29 per cent in August, according to Chinese customs data reported this week by Dow Jones Newswires.
Despite the fall, however, it was the third-highest month for Australian imports this year and nine times higher than a year earlier.
The steelmaking giant imported 2.39 million tonnes of Australian coking coal last month, down from record rates of about 3.2 million tonnes in June and July. The drop indicates that some of the higher-cost Chinese coking coalmines are starting to increase production, but analysts do not expect domestic production there to be able to flood the market.
"China's production is increasing, but so is demand," Citi commodities analyst Alan Heap said this week.
Citi raised its coking coal price forecast for the 2010 Japanese financial year from $US140 a tonne to $US200.
Source: The Australian
Australia Vetoes Mining Project
Australia has vetoed a multi-billion dollar mining project involving a Chinese company because of national security and safety concerns. The plan involved a mining site within a restricted missile testing range at Woomera in the South Australian desert.
The Hawks Nest iron ore mine would have been a joint venture between Australian company Western Plains Resources and a Chinese steel corporation. The plan was to develop a multi-billion dollar iron ore facility inside the Woomera Prohibited Area, a military testing base in South Australia, where other mining projects have been approved in the past.
The application has been blocked by the Australian government, which has cited national security and safety concerns.
The huge Woomera range, which is roughly the size of (the U.S. state of) Florida, is a vital part of Australia's defense capabilities.
Defense Minister John Faulkner says the ministry stepped in to veto the project in what he considers to be an extremely strategic area.
"The difficulty here in relation to this proposal is its location," he said. "It's within the testing range's center line and the location of the Hawks Nest tenement is an inherently dangerous and very sensitive, the most sensitive part of the range."
Western Plains Resources said the government's intervention was surprising and disappointing.
It is the second time this year that the government has blocked Chinese investment in the Woomera area on national security grounds.
Large mining deals of this type have ignited a debate over whether Chinese-controlled companies should be allowed to control Australia's mineral resources.
Despite the concerns, China has become the third largest investor in Australia behind the United States and Britain.
Australia's Foreign Investment Review Board said that it had received almost $30 billion of applications from China in the past 18 months and most have been approved.
This latest decision could aggravate relations between Canberra and Beijing. China has become one of the biggest buyers of Australian exports, particularly commodities such as iron ore. But the failure of a Chinese offer to buy a large stake in Australian mining company Rio Tinto, followed by China's arrest of Rio Tinto executives on industrial espionage charges, caused new tension between the two.
Things worsened in July when Canberra granted a visitor's visa to an activist from China's Uighur minority group. Beijing considers Rebiya Kadeer, who lives in the United States, to be the leader of a terrorist group.
Source: Voice Of America
The Hawks Nest iron ore mine would have been a joint venture between Australian company Western Plains Resources and a Chinese steel corporation. The plan was to develop a multi-billion dollar iron ore facility inside the Woomera Prohibited Area, a military testing base in South Australia, where other mining projects have been approved in the past.
The application has been blocked by the Australian government, which has cited national security and safety concerns.
The huge Woomera range, which is roughly the size of (the U.S. state of) Florida, is a vital part of Australia's defense capabilities.
Defense Minister John Faulkner says the ministry stepped in to veto the project in what he considers to be an extremely strategic area.
"The difficulty here in relation to this proposal is its location," he said. "It's within the testing range's center line and the location of the Hawks Nest tenement is an inherently dangerous and very sensitive, the most sensitive part of the range."
Western Plains Resources said the government's intervention was surprising and disappointing.
It is the second time this year that the government has blocked Chinese investment in the Woomera area on national security grounds.
Large mining deals of this type have ignited a debate over whether Chinese-controlled companies should be allowed to control Australia's mineral resources.
Despite the concerns, China has become the third largest investor in Australia behind the United States and Britain.
Australia's Foreign Investment Review Board said that it had received almost $30 billion of applications from China in the past 18 months and most have been approved.
This latest decision could aggravate relations between Canberra and Beijing. China has become one of the biggest buyers of Australian exports, particularly commodities such as iron ore. But the failure of a Chinese offer to buy a large stake in Australian mining company Rio Tinto, followed by China's arrest of Rio Tinto executives on industrial espionage charges, caused new tension between the two.
Things worsened in July when Canberra granted a visitor's visa to an activist from China's Uighur minority group. Beijing considers Rebiya Kadeer, who lives in the United States, to be the leader of a terrorist group.
Source: Voice Of America
Iron Ore Prices Rise Ahead Of China Holidays
Iron ore prices rose in Asia from a week ago despite a fall in steel and freight prices as investors made purchases ahead of holidays in China, traders said on Thursday.
Iron ore of Indian origin was quoted at $88-$90 a tonne for ores with 63.5 percent iron basis C&F, higher than last week's $83-$85.
Prices had slipped on a sudden lack of buying from China since touching a near one-year high at $115 in August. "The market has been picking up for a week or so," said Dhruv Goel, managing partner at SKTC, a trading firm in India's eastern state of Orissa. "All miners in the east have increased prices citing short supply."
China, the world's biggest steel maker, breaks for an eight-day holiday starting October 1 for its National Day and Mid-Autumn festival for which there is some urgency in buying stocks for immediate requirement, traders said.
"We have not seen any sharp decline in iron ore deliveries yet," said a dealer in Shanghai.
Traders in China feared a deliberate holding of stocks by sellers that would push prices higher, specially as the next fiscal year's price negotiations are on the anvil.
"Indian iron ore price could return to $100 a tonne next month as overseas miners want to squeeze the market ahead of the negotiations," the Shanghai-based dealer said.
Chinese steel mills are expected to unofficially kick off the iron ore price negotiation for 2010/11 starting April next month, while the China Iron and Steel Association holds a key annual conference in northern Chinese coastal city of Qingdao.
But some doubts persisted about the sustainability of iron ore's bounce back as steel and freight prices were down.
China's Hebei, world's fourth largest steelmaker cut steel rebar prices by 10 percent on Wednesday amid persisting oversupply.
The Baltic Exchange's main sea freight index that tracks rates to ship dry commodities including iron ore, fell to a four month low on Wednesday signifying weak demand.
Source: Reuters
Iron ore of Indian origin was quoted at $88-$90 a tonne for ores with 63.5 percent iron basis C&F, higher than last week's $83-$85.
Prices had slipped on a sudden lack of buying from China since touching a near one-year high at $115 in August. "The market has been picking up for a week or so," said Dhruv Goel, managing partner at SKTC, a trading firm in India's eastern state of Orissa. "All miners in the east have increased prices citing short supply."
China, the world's biggest steel maker, breaks for an eight-day holiday starting October 1 for its National Day and Mid-Autumn festival for which there is some urgency in buying stocks for immediate requirement, traders said.
"We have not seen any sharp decline in iron ore deliveries yet," said a dealer in Shanghai.
Traders in China feared a deliberate holding of stocks by sellers that would push prices higher, specially as the next fiscal year's price negotiations are on the anvil.
"Indian iron ore price could return to $100 a tonne next month as overseas miners want to squeeze the market ahead of the negotiations," the Shanghai-based dealer said.
Chinese steel mills are expected to unofficially kick off the iron ore price negotiation for 2010/11 starting April next month, while the China Iron and Steel Association holds a key annual conference in northern Chinese coastal city of Qingdao.
But some doubts persisted about the sustainability of iron ore's bounce back as steel and freight prices were down.
China's Hebei, world's fourth largest steelmaker cut steel rebar prices by 10 percent on Wednesday amid persisting oversupply.
The Baltic Exchange's main sea freight index that tracks rates to ship dry commodities including iron ore, fell to a four month low on Wednesday signifying weak demand.
Source: Reuters
Signs Of Recovery In Peru's Iron Ore Output
According to sources at Peru's energy and mineral department, the country's iron ore output was 429,000 tons in August, down 12.09% year on year. The cumulative production was 2.93mln tons in the first eight months of the year, down 16.73% year on year.
Although production in August was lower than the level in the same period last year, it represented growth compared with previous months this year.
Source: Alibaba
Although production in August was lower than the level in the same period last year, it represented growth compared with previous months this year.
Source: Alibaba
FNX To Start Ore Deliveries To Vale
Toronto-based FNX Mining would start delivering ore on Wednesday from its Sudbury operations to Vale Inco's Clarabelle mill, spokesperson David Constable told Mining Weekly Online.
FNX shares rose 4% on the news, to C$9,55 apiece by 13:32 in Toronto.
Vale Inco, which has a long-term processing agreement covering all FNX ore, closed all its operations in Sudbury at the end of May for an extended maintenance shutdown, and has yet to reopen, after more than 3 000 union members went on strike in mid-July.
FNX continued mining in the meantime, and reached an agreement last month with Vale's rival in the Sudbury basin, Xstrata Nickel, which will process more than 150 000 t of FNX ore at its own mill.
About 157 000 t of ore was shipped to Xstrata by the end of August, and will be processed in October, FNX said on Wednesday.
Meanwhile, Vale has announced it will restart partial production in Sudbury with its own nonstriking staff and FNX was recently notified that it should restart ore deliveries.
The company will start shipping ore from a 10 000-t surface stockpile of crushed and sampled ore, followed by the about 11 000 t that is not yet crushed and sampled.
“Now that we know we have to start delivering, we will start crushing and sampling that material, getting it ready to ship out,” Constable said.
The company will aim to truck the stockpiled ore as fast as possible to Vale's mill, although the actual timing will depend on how quickly the trucks can get through the picket lines set up by striking workers at Clarabelle.
Once the stored-up ore has all been shipped to Vale, trucking will continue at a steady state of about 2 000 t/d, as the ore is mined from FNX's operations.
Despite the notification sent to FNX, Vale Inco has yet to set a date for operations to restart.
Spokesperson Cory McPhee said on Wednesday that the company is currently moving ore that is inventoried at its Stobie mine to the Clarabelle mine, as it tests the mill circuit and trains staff for a resumption of partial production.
“That resumption has not yet occurred nor has there been a definitive date established for that resumption to begin,” he added.
“When it does we will be processing ore from FNX, and the Stobie inventory as well as ore mined at the 153 orebody at Coleman Mine and our Garson ramp,” McPhee said.
He was not in a position to disclose projected levels of any ore that would be processed.
When it restarts mining, Vale has said it will target parts of the orebody with high grades of copper and platinum-group metals, and is understood to have reconfigured the mill for the short term to focus on recovering copper concentrate, which could be sold to a local smelter.
The ores from both Vale and FNX's mines would likely also produce some quantities of nickel and precious metal.
FNX is currently producing from the copper and precious-metal rich Rob's deposit at the Levack mine, PM deposit at McCreedy West and 2 000 deposit at the Podolsky operation.
It is also developing the Levack Footwall deposit, at Levack, and expects to have it in commercial production around mid-2010.
Last year, the firm suspended nickel-ore mining at both McCreedy West and Levack and cut more than 300 jobs, after nickel prices dropped.
Nickel traded above $22/lb in 2007, but fell sharply, after slowing global economic activity dampened demand for the metal, which is used to make stainless steel.
Spot nickel was trading at around $8/lb on Wednesday.
Both Xstrata and Vale have also curtailed Sudbury operations and delayed projects this year because of weak demand and prices for the metal.
FNX was formed in 2002, when it bought five Sudbury properties from what was then Inco, and has made several discoveries of its own since then.
FNX shares rose 4% on the news, to C$9,55 apiece by 13:32 in Toronto.
Vale Inco, which has a long-term processing agreement covering all FNX ore, closed all its operations in Sudbury at the end of May for an extended maintenance shutdown, and has yet to reopen, after more than 3 000 union members went on strike in mid-July.
FNX continued mining in the meantime, and reached an agreement last month with Vale's rival in the Sudbury basin, Xstrata Nickel, which will process more than 150 000 t of FNX ore at its own mill.
About 157 000 t of ore was shipped to Xstrata by the end of August, and will be processed in October, FNX said on Wednesday.
Meanwhile, Vale has announced it will restart partial production in Sudbury with its own nonstriking staff and FNX was recently notified that it should restart ore deliveries.
The company will start shipping ore from a 10 000-t surface stockpile of crushed and sampled ore, followed by the about 11 000 t that is not yet crushed and sampled.
“Now that we know we have to start delivering, we will start crushing and sampling that material, getting it ready to ship out,” Constable said.
The company will aim to truck the stockpiled ore as fast as possible to Vale's mill, although the actual timing will depend on how quickly the trucks can get through the picket lines set up by striking workers at Clarabelle.
Once the stored-up ore has all been shipped to Vale, trucking will continue at a steady state of about 2 000 t/d, as the ore is mined from FNX's operations.
Despite the notification sent to FNX, Vale Inco has yet to set a date for operations to restart.
Spokesperson Cory McPhee said on Wednesday that the company is currently moving ore that is inventoried at its Stobie mine to the Clarabelle mine, as it tests the mill circuit and trains staff for a resumption of partial production.
“That resumption has not yet occurred nor has there been a definitive date established for that resumption to begin,” he added.
“When it does we will be processing ore from FNX, and the Stobie inventory as well as ore mined at the 153 orebody at Coleman Mine and our Garson ramp,” McPhee said.
He was not in a position to disclose projected levels of any ore that would be processed.
When it restarts mining, Vale has said it will target parts of the orebody with high grades of copper and platinum-group metals, and is understood to have reconfigured the mill for the short term to focus on recovering copper concentrate, which could be sold to a local smelter.
The ores from both Vale and FNX's mines would likely also produce some quantities of nickel and precious metal.
FNX is currently producing from the copper and precious-metal rich Rob's deposit at the Levack mine, PM deposit at McCreedy West and 2 000 deposit at the Podolsky operation.
It is also developing the Levack Footwall deposit, at Levack, and expects to have it in commercial production around mid-2010.
Last year, the firm suspended nickel-ore mining at both McCreedy West and Levack and cut more than 300 jobs, after nickel prices dropped.
Nickel traded above $22/lb in 2007, but fell sharply, after slowing global economic activity dampened demand for the metal, which is used to make stainless steel.
Spot nickel was trading at around $8/lb on Wednesday.
Both Xstrata and Vale have also curtailed Sudbury operations and delayed projects this year because of weak demand and prices for the metal.
FNX was formed in 2002, when it bought five Sudbury properties from what was then Inco, and has made several discoveries of its own since then.
CISA Studying New Strategies For 2010 Iron Ore Talks
China Iron and Steel Association (CISA), the country's industry group, is studying new strategies for next year's annual iron ore price negotiations, the 21st Century Business Herald said on Thursday.
CISA, which represents the world's biggest steel-making nation in talks with overseas miners, including Brazil's Vale, Australia's Rio Tinto and BHP Billiton, said negotiations for this year were still ongoing.
However, an executive with the Shandong Iron and Steel Group, China's sixth-biggest steel maker, said 2009 negotiations had become meaningless and it "would be impossible to have new results basically", the newspaper said.
"We have started preparations for the negotiations for next year, but have not started talks with the largest three miners," the newspaper quoted the Shandong Iron and Steel executive as saying.
"(We have found out that) media comments have an influence on negotiations. Therefore, the association is likely to change its style of public relations to avoid embarrassment," the executive said.
CISA has deprived about 10 firms of their iron ore importing licences, the newspaper said, citing industry sources. They had said CISA was reviewing iron ore import licences held by steel mills and trading companies and could cancel 20 licences.
CISA officials were unavailable for comment.
CISA has been attempting to win a more than 33 percent price cut in protracted contract price talks with foreign miners, an effort analysts said was likely futile months ago.
It also attempted to cajole traders and small mills into cutting iron ore imports, but without much support from Beijing policy makers.
Chinese steel mills are expected to kick off annual iron ore price negotiations with suppliers unofficially during an upcoming international conference, usually held by CISA in late October or early November.
Source: Reuters
CISA, which represents the world's biggest steel-making nation in talks with overseas miners, including Brazil's Vale, Australia's Rio Tinto and BHP Billiton, said negotiations for this year were still ongoing.
However, an executive with the Shandong Iron and Steel Group, China's sixth-biggest steel maker, said 2009 negotiations had become meaningless and it "would be impossible to have new results basically", the newspaper said.
"We have started preparations for the negotiations for next year, but have not started talks with the largest three miners," the newspaper quoted the Shandong Iron and Steel executive as saying.
"(We have found out that) media comments have an influence on negotiations. Therefore, the association is likely to change its style of public relations to avoid embarrassment," the executive said.
CISA has deprived about 10 firms of their iron ore importing licences, the newspaper said, citing industry sources. They had said CISA was reviewing iron ore import licences held by steel mills and trading companies and could cancel 20 licences.
CISA officials were unavailable for comment.
CISA has been attempting to win a more than 33 percent price cut in protracted contract price talks with foreign miners, an effort analysts said was likely futile months ago.
It also attempted to cajole traders and small mills into cutting iron ore imports, but without much support from Beijing policy makers.
Chinese steel mills are expected to kick off annual iron ore price negotiations with suppliers unofficially during an upcoming international conference, usually held by CISA in late October or early November.
Source: Reuters
Cazaly To Raise $4 Million From Chinese Company
Shares in Cazaly Resources rose after the junior gold and iron ore explorer announced it would raise up to $4 million through an unidentified Chinese company.
The company said in a statement today it planned to place 10 million shares at 40 cents a share to "a private company based in southern China".
The Chinese investor would also be issued with five million unlisted options exercisable at 48 cents each, expiring two years from issue.
"It is a large privately-owned company with over $100 million in annual revenue," Cazaly said.
"It supplies to major manufacturers, which use extensive steel products and other inputs.
"The company has close commercial relationships with several mid-to-large sized steel mills in China."
Cazaly on Wednesday announced it had $3.8 million in cash and cash equivalents at the end of June, saying this was "sufficient capital to effectively explore its current landholdings".
The company said on Thursday the funds raised under the $4 million placement would be used mainly to advance its Parker Range iron ore project in Western Australia.
The company reported a loss for 2008/09 of $5.29 million, compared to a net profit of $1.53 million in the previous financial year.
Source: Perth Now
The company said in a statement today it planned to place 10 million shares at 40 cents a share to "a private company based in southern China".
The Chinese investor would also be issued with five million unlisted options exercisable at 48 cents each, expiring two years from issue.
"It is a large privately-owned company with over $100 million in annual revenue," Cazaly said.
"It supplies to major manufacturers, which use extensive steel products and other inputs.
"The company has close commercial relationships with several mid-to-large sized steel mills in China."
Cazaly on Wednesday announced it had $3.8 million in cash and cash equivalents at the end of June, saying this was "sufficient capital to effectively explore its current landholdings".
The company said on Thursday the funds raised under the $4 million placement would be used mainly to advance its Parker Range iron ore project in Western Australia.
The company reported a loss for 2008/09 of $5.29 million, compared to a net profit of $1.53 million in the previous financial year.
Source: Perth Now
Wednesday, September 23, 2009
Hyundai To Buy 300,000tpa Siberian Coal
South Korea's Hyundai Steel said on Wednesday it will buy a maximum of 300,000 tonnes of coal per year from Siberian Anthracite of Russia from 2010 for five years to feed its steel capacity expansion.
Both firms have signed a memorandum of agreement for the supply deal in Novosibirsk, Russia, a company spokesman said.
Another South Korean steel maker, POSCO, also signed a five-year contract on Wednesday to buy 1 million tonnes of coking coal and coal products per year from another Siberian miner, Sibuglemet, Interfax news agency reported.
The POSCO contract will also run from 2010, Interfax said.
Hyundai Steel is investing 5.84 trillion won ($5.61 billion) to build its first blast furnace to produce 8 million tonnes of steel annually.
The steel project, set to start operations in 2010, will boost output from the country's second-largest steelmaker by 60 percent.
For this expansion, Hyundai Steel late last year said it would buy 8 million tonnes of coking coal from BHP Billiton for five years, and reached similar deals with Canada's EVCC and Australia's Rio Tinto and Wesfarmers.
Russia's largest miner of coking coal for the steel sector, Mechel, in February agreed to supply up to 300,000 tonnes per year of the fuel to Hyundai Steel.
SourcE: Reuters
Both firms have signed a memorandum of agreement for the supply deal in Novosibirsk, Russia, a company spokesman said.
Another South Korean steel maker, POSCO, also signed a five-year contract on Wednesday to buy 1 million tonnes of coking coal and coal products per year from another Siberian miner, Sibuglemet, Interfax news agency reported.
The POSCO contract will also run from 2010, Interfax said.
Hyundai Steel is investing 5.84 trillion won ($5.61 billion) to build its first blast furnace to produce 8 million tonnes of steel annually.
The steel project, set to start operations in 2010, will boost output from the country's second-largest steelmaker by 60 percent.
For this expansion, Hyundai Steel late last year said it would buy 8 million tonnes of coking coal from BHP Billiton for five years, and reached similar deals with Canada's EVCC and Australia's Rio Tinto and Wesfarmers.
Russia's largest miner of coking coal for the steel sector, Mechel, in February agreed to supply up to 300,000 tonnes per year of the fuel to Hyundai Steel.
SourcE: Reuters
Newmont Suspension Will Not Hit Output
A suspension of operations at Newmont Mining Corp's Indonesian copper and gold mine due to a rockslide will not hit production this year given available stocks, a senior Indonesian mining official said on Wednesday.
Newmont said on Tuesday there had been a "geotechnical failure" on Sept. 18 and 19 in the west wall of the open-pit mine on Sumbawa island, which produces most of Newmont's copper, along with a small amount of gold.
"Newmont has reported to me about the mine suspension following the rock slide. We will send a team today to inspect the mining side," Bambang Setiawan, director general of mining, coal and geothermal at the energy and mines ministry, told Reuters.
"There will be no problem for production this year because Newmont has a lot of stock to be processed," he added.
Newmont's Indonesian affiliate, PT Newmont Nusa Tenggara, continued to process lower-grade ore from stockpiles at the Batu Hijau mine, the Denver-based company said in a statement expanding on an earlier filing with the Securities and Exchange Commission.
Batu Hijau uses an advanced monitoring system that measures movement in the pit walls, so no workers were in the pit at the time of the wall movement, Newmont said.
Initial assessments indicated nominal damage to infrastructure and equipment at the pit, which is located on the remote island of Sumbawa, about 950 miles (1,530 km) east of Jakarta.
For 2009, the company expects equity gold sales from the Indonesian mine of between 225,000 and 250,000 ounces, along with between 210 million and 230 million pounds of copper.
Source: Reuters
Newmont said on Tuesday there had been a "geotechnical failure" on Sept. 18 and 19 in the west wall of the open-pit mine on Sumbawa island, which produces most of Newmont's copper, along with a small amount of gold.
"Newmont has reported to me about the mine suspension following the rock slide. We will send a team today to inspect the mining side," Bambang Setiawan, director general of mining, coal and geothermal at the energy and mines ministry, told Reuters.
"There will be no problem for production this year because Newmont has a lot of stock to be processed," he added.
Newmont's Indonesian affiliate, PT Newmont Nusa Tenggara, continued to process lower-grade ore from stockpiles at the Batu Hijau mine, the Denver-based company said in a statement expanding on an earlier filing with the Securities and Exchange Commission.
Batu Hijau uses an advanced monitoring system that measures movement in the pit walls, so no workers were in the pit at the time of the wall movement, Newmont said.
Initial assessments indicated nominal damage to infrastructure and equipment at the pit, which is located on the remote island of Sumbawa, about 950 miles (1,530 km) east of Jakarta.
For 2009, the company expects equity gold sales from the Indonesian mine of between 225,000 and 250,000 ounces, along with between 210 million and 230 million pounds of copper.
Source: Reuters
NSW To Earn $500 Million More In Coal Royalties
Australia’s New South Wales state may earn A$500 million ($437 million) more a year in coal royalties, the Australian Financial Review has reported.
The increase is due to an industry agreement that will more than double coal capacity at Port of Newcastle within six years, the newspaper said, citing an interview with the state’s Port Minister Joe Tripodi.
Australia’s competition regulator has to approve the plan, the Review reported.
Source: Bloomberg
The increase is due to an industry agreement that will more than double coal capacity at Port of Newcastle within six years, the newspaper said, citing an interview with the state’s Port Minister Joe Tripodi.
Australia’s competition regulator has to approve the plan, the Review reported.
Source: Bloomberg
Niagara Falls Silicon Plant Set To Re-Open
The reopening of the former Globe Metallurgical plant onin Niagara Falls, New York, has taken longer than anticipated but the proposed creation of 500 jobs is reportedly still on the radar.
Clara Dunn, the city’s Empire Zone coordinator, provided an update on the plant’s progress Monday to City Council members, who say they’ve been receiving numerous phone calls from people wondering why nothing seems to be happening on the highly publicized economic development project.
“It’s something we’ve been banging the drum on for a while and saying it’s going to create 500 jobs ... but we’re not seeing it happen,” Council Chairman Chris Robins said.
Dunn said she recently took a tour of the site and was told interviews to fill jobs at the plant have restarted and more updates could be announced in the upcoming weeks. Currently, 23 employees have been hired, including seven from Niagara Falls.
“There’s every indication from inside the plant that things are moving forward,” Dunn said.
One of the world’s largest producers of metallurgical and chemical-grade silicon metal and silicon-based specialty alloys, Globe Specialty Metals announced in May 2008 plans to reopen and expand production at its old plant, which closed down production and moved to Ohio in 2003. The $60 million investment proposed creating 500 “green collar” jobs, most of which will be tied to the construction of a new 100,000-square-foot facility by Solsil, Inc., a subsidiary of Globe that refines silicon metal to create solar panels.
The first phase of the project consisted of restarting operations at the existing building, creating about 100 jobs within the first year, company officials have said. However, Globe’s Human Resources Director Lee Payssa said back in January some of the goals included in the tentative production schedule were delayed as the company awaited funding from economic inventive programs and grants. Difficulties securing construction materials and harsh economic conditions were also named as deterrents.
However, Dunn said Monday company officials remain optimistic about their future in Niagara Falls and that the project will happen as proposed.
n Dunn also provided a report on the hiring of local residents at Ascension Industries. Last year, the City Council amended the city’s charter to allow the North Tonawanda metal manufacturing company to be recognized within a state Empire Zone, opening it up to tax credits. In exchange for the approval, Ascension officials promised to make hiring Falls residents a priority.
Dunn reported the company has since hired 18 new employees, including 11 from Niagara County and four from Niagara Falls. The company has also advertised openings locally prior to expanding the search, she said.
“In all actuality, they’ve done what they said they were going to do,” Dunn said.
Ascension is required to provide the city a detailed business report including hiring statistics by next April.
Source: Niagara Gazette
Clara Dunn, the city’s Empire Zone coordinator, provided an update on the plant’s progress Monday to City Council members, who say they’ve been receiving numerous phone calls from people wondering why nothing seems to be happening on the highly publicized economic development project.
“It’s something we’ve been banging the drum on for a while and saying it’s going to create 500 jobs ... but we’re not seeing it happen,” Council Chairman Chris Robins said.
Dunn said she recently took a tour of the site and was told interviews to fill jobs at the plant have restarted and more updates could be announced in the upcoming weeks. Currently, 23 employees have been hired, including seven from Niagara Falls.
“There’s every indication from inside the plant that things are moving forward,” Dunn said.
One of the world’s largest producers of metallurgical and chemical-grade silicon metal and silicon-based specialty alloys, Globe Specialty Metals announced in May 2008 plans to reopen and expand production at its old plant, which closed down production and moved to Ohio in 2003. The $60 million investment proposed creating 500 “green collar” jobs, most of which will be tied to the construction of a new 100,000-square-foot facility by Solsil, Inc., a subsidiary of Globe that refines silicon metal to create solar panels.
The first phase of the project consisted of restarting operations at the existing building, creating about 100 jobs within the first year, company officials have said. However, Globe’s Human Resources Director Lee Payssa said back in January some of the goals included in the tentative production schedule were delayed as the company awaited funding from economic inventive programs and grants. Difficulties securing construction materials and harsh economic conditions were also named as deterrents.
However, Dunn said Monday company officials remain optimistic about their future in Niagara Falls and that the project will happen as proposed.
n Dunn also provided a report on the hiring of local residents at Ascension Industries. Last year, the City Council amended the city’s charter to allow the North Tonawanda metal manufacturing company to be recognized within a state Empire Zone, opening it up to tax credits. In exchange for the approval, Ascension officials promised to make hiring Falls residents a priority.
Dunn reported the company has since hired 18 new employees, including 11 from Niagara County and four from Niagara Falls. The company has also advertised openings locally prior to expanding the search, she said.
“In all actuality, they’ve done what they said they were going to do,” Dunn said.
Ascension is required to provide the city a detailed business report including hiring statistics by next April.
Source: Niagara Gazette
Tuesday, September 22, 2009
Nyrstar Swoops For East Tennessee Zinc
East Tennessee Zinc Co., which operated zinc mines in East Knox and Jefferson Counties and employed about 400 workers before being shut down late last year, is being sold to Belgian mining company Nyrstar NV for $126 million.
East Tennessee Zinc was sold by Swiss raw materials conglomerate Glencore Group, which reopened the Young mine in New Market, the Coy mine in Strawberry Plains, and the Immel mine in Mascot in 2006. Glencore disclosed the sales agreement last week.
Nyrstar already owns a smelting operation in Clarksville, Tenn., and another zinc mine complex in Gordonsville, Tenn. Nystar said the Clarksville smelter was originally built to treat the high-grade zinc concentrate from the Knox-Jefferson and Gordonsville mines.
“Consistent with our strategy, the acquisition provides an opportunity to capture a number of significant synergies in relation to cost reductions and operational benefits between our Clarksville smelter and the East Tennessee and Gordonsville zinc mine complexes, thereby supporting a long-term sustainable future for these operations,” Nyrstar CEO Roland Junck said in a statement.
Junck said Nyrstar, which acquired the Gordonsville mines in May, recently has restarted limited operations there and intends to restart the East Tennessee mines “as quickly as possible.”
Nyrstar said several steps remain before the deal closes, including completion of due diligence, but the transaction is expected to be completed during the fourth quarter.
Source: Knoxville News
East Tennessee Zinc was sold by Swiss raw materials conglomerate Glencore Group, which reopened the Young mine in New Market, the Coy mine in Strawberry Plains, and the Immel mine in Mascot in 2006. Glencore disclosed the sales agreement last week.
Nyrstar already owns a smelting operation in Clarksville, Tenn., and another zinc mine complex in Gordonsville, Tenn. Nystar said the Clarksville smelter was originally built to treat the high-grade zinc concentrate from the Knox-Jefferson and Gordonsville mines.
“Consistent with our strategy, the acquisition provides an opportunity to capture a number of significant synergies in relation to cost reductions and operational benefits between our Clarksville smelter and the East Tennessee and Gordonsville zinc mine complexes, thereby supporting a long-term sustainable future for these operations,” Nyrstar CEO Roland Junck said in a statement.
Junck said Nyrstar, which acquired the Gordonsville mines in May, recently has restarted limited operations there and intends to restart the East Tennessee mines “as quickly as possible.”
Nyrstar said several steps remain before the deal closes, including completion of due diligence, but the transaction is expected to be completed during the fourth quarter.
Source: Knoxville News
Brazil Looking To Develop Minas Gerais Iron Ore Reserves
Brazil’s Minas Gerais state is seeking to develop iron ore that may hold 12 billion metric tons of the raw material or more than Vale SA’s 9-billion proved reserves, Economic Development Secretary Sergio Barroso said.
A group of Brazilian companies was formed to measure the reserves in the northern part of the state, Barroso told reporters today at a mining conference in Belo Horizonte, Brazil. The deposit may later be put up for sale to larger mining companies, he said.
“The state will offer transport and tax support,” Barroso said. Barroso said he couldn’t name the companies participating in the group or the larger companies that have expressed an interest in possible acquisition of the site’s mining rights.
The Minas Gerais deposit may be four times larger than Asia’s biggest iron ore deposit, which was found in China’s northern province of Liaoning in June. The Asian deposit has reserves of more than 3 billion metric tons.
Vale, the world’s largest iron ore producer, ended 2008 with proven reserves of 9 billion metric tons, according to the company’s Web site.
An initial confirmation of the Minas Gerais reserves may be ready in late November, when the group will sign an accord with the state for initial development plans, he said.
Source: Bloomberg
A group of Brazilian companies was formed to measure the reserves in the northern part of the state, Barroso told reporters today at a mining conference in Belo Horizonte, Brazil. The deposit may later be put up for sale to larger mining companies, he said.
“The state will offer transport and tax support,” Barroso said. Barroso said he couldn’t name the companies participating in the group or the larger companies that have expressed an interest in possible acquisition of the site’s mining rights.
The Minas Gerais deposit may be four times larger than Asia’s biggest iron ore deposit, which was found in China’s northern province of Liaoning in June. The Asian deposit has reserves of more than 3 billion metric tons.
Vale, the world’s largest iron ore producer, ended 2008 with proven reserves of 9 billion metric tons, according to the company’s Web site.
An initial confirmation of the Minas Gerais reserves may be ready in late November, when the group will sign an accord with the state for initial development plans, he said.
Source: Bloomberg
HudBay Finds New Copper And Gold Deposit In Manitoba
HudBay Minerals Inc. says it has found evidence of a major new copper-gold zone near its Snow Lake concentrator in the Flin Flon area of northern Manitoba.
The Toronto-based mining company's announcement was based on initial results from recent drilling at the Lalor deposit, an area containing gold and zine where HudBay is focusing its efforts.
The new Copper-Gold mineralization zone discovered recently and is lower than the three previously announced Base Metal, Separate and Contact Gold zones.
HudBay chief executive Peter Jones said in a statement that the copper and gold contained in one of the drill holes is "among the best I have seen in nearly 40 years in the mining business and the new Copper-Gold zone may be very significant."
The hole, called DUB263W02, assayed at 13.35 grams per tonne of gold, 27.98 grams per tonne of silver, 5.33 per cent copper and 0.35 per cent zinc over 34.54 metres at a depth of from 1,253.08 to 1,287.62 metres.
"Excluding the new Copper-Gold zone, HudBay's target is to reach three million contained ounces of gold. The Lalor project is our focus and we will continue to advance it to a production decision with the highest priority," Jones said.
HudBay said Tuesday it expects to provide a more detailed resource estimate of the zinc contained at the Base Metal zone on the Lalor deposit by early October as well as more preliminary estimates of the gold contained at the Separate and Contact Gold zones.
Source: Canadian Press
The Toronto-based mining company's announcement was based on initial results from recent drilling at the Lalor deposit, an area containing gold and zine where HudBay is focusing its efforts.
The new Copper-Gold mineralization zone discovered recently and is lower than the three previously announced Base Metal, Separate and Contact Gold zones.
HudBay chief executive Peter Jones said in a statement that the copper and gold contained in one of the drill holes is "among the best I have seen in nearly 40 years in the mining business and the new Copper-Gold zone may be very significant."
The hole, called DUB263W02, assayed at 13.35 grams per tonne of gold, 27.98 grams per tonne of silver, 5.33 per cent copper and 0.35 per cent zinc over 34.54 metres at a depth of from 1,253.08 to 1,287.62 metres.
"Excluding the new Copper-Gold zone, HudBay's target is to reach three million contained ounces of gold. The Lalor project is our focus and we will continue to advance it to a production decision with the highest priority," Jones said.
HudBay said Tuesday it expects to provide a more detailed resource estimate of the zinc contained at the Base Metal zone on the Lalor deposit by early October as well as more preliminary estimates of the gold contained at the Separate and Contact Gold zones.
Source: Canadian Press
Australia Sees Growth In Asian Coal Imports
Strong demand for thermal coal in China and India will help Asia avoid the first fall in imports for a decade this year, and push import growth even higher in 2010, an Australian government forecast showed on Tuesday.
In an updated quarterly forecast, the Australian Bureau for Agriculture and Resource Economics (ABARE) said demand for imported coal in Asia would rise by 13.6 milion tonnes, or 3.5 percent, to 401.6 million tonnes in 2009. This compares with its previous forecast in June for a 3.3 percent fall, which would have been the first decline in at least 10 years. ABARE, the research body for the world's number two thermal coal exporter, also said Asia's steam coal imports in 2010 would increase by 25.4 million tonnes, or 6.3 percent, to 427 million tonnes, up from its previous estimate of 5.3 percent growth. Thanks to improved regional demand and new port capacity, ABARE has significantly upgraded Australia's thermal coal exports, estimating it to increase 2.6 percent from a year ago to 140 million tonnes in 2009/10. It had expected Australian exports to fall 6 percent to 122.5 million tonnes in 2009/10 in its June report. "Over the course of 2009, thermal coal demand in the Atlantic market has been weak, while demand in the Asian market has remained relatively strong, underpinned by increasing imports into China," ABARE said in the report.
Imports from China, the world's largest coal producer and consumer, are expected to jump about 70 percent from a year ago to reach 60 million tonnes in 2009 -- making it a net importer this year by 35 million tonnes, ABARE said. Previously ABARE had said that China, now the world's No. 6 steam coal exporter, would only become a net importer in 2010.
Indian imports are seen rising 24 percent from a year ago to 42 million tonnes in 2009 and reaching 50 million tonnes in 2010, underpinned by the government's plan to double coal-fired electricity generation capacity by 2017.
ABARE also revised up its thermal coal import forecasts by Japan, the world's largest steam coal buyer, estimating a 10 percent fall in 2009 to 115 million tonnes, compared with its June forecast of a 14 percent decline. Japan's thermal coal imports are expected to see little growth in 2010 due to a subdued economic environment and possible higher use of nuclear power, the agency said.
In South Korea, ABARE said growth in the country's steam coal imports is seen slowing in 2010, after a forecast 7 percent increase to 81 million tonnes this year on the back of new coal-fired power plants coming onstream. "The program to expand coal-fired generation capacity was largely completed in the first half of 2009 and limited new capacity is scheduled to be completed in the near future," it said.
Source: Reuters.
Production tables available here
In an updated quarterly forecast, the Australian Bureau for Agriculture and Resource Economics (ABARE) said demand for imported coal in Asia would rise by 13.6 milion tonnes, or 3.5 percent, to 401.6 million tonnes in 2009. This compares with its previous forecast in June for a 3.3 percent fall, which would have been the first decline in at least 10 years. ABARE, the research body for the world's number two thermal coal exporter, also said Asia's steam coal imports in 2010 would increase by 25.4 million tonnes, or 6.3 percent, to 427 million tonnes, up from its previous estimate of 5.3 percent growth. Thanks to improved regional demand and new port capacity, ABARE has significantly upgraded Australia's thermal coal exports, estimating it to increase 2.6 percent from a year ago to 140 million tonnes in 2009/10. It had expected Australian exports to fall 6 percent to 122.5 million tonnes in 2009/10 in its June report. "Over the course of 2009, thermal coal demand in the Atlantic market has been weak, while demand in the Asian market has remained relatively strong, underpinned by increasing imports into China," ABARE said in the report.
Imports from China, the world's largest coal producer and consumer, are expected to jump about 70 percent from a year ago to reach 60 million tonnes in 2009 -- making it a net importer this year by 35 million tonnes, ABARE said. Previously ABARE had said that China, now the world's No. 6 steam coal exporter, would only become a net importer in 2010.
Indian imports are seen rising 24 percent from a year ago to 42 million tonnes in 2009 and reaching 50 million tonnes in 2010, underpinned by the government's plan to double coal-fired electricity generation capacity by 2017.
ABARE also revised up its thermal coal import forecasts by Japan, the world's largest steam coal buyer, estimating a 10 percent fall in 2009 to 115 million tonnes, compared with its June forecast of a 14 percent decline. Japan's thermal coal imports are expected to see little growth in 2010 due to a subdued economic environment and possible higher use of nuclear power, the agency said.
In South Korea, ABARE said growth in the country's steam coal imports is seen slowing in 2010, after a forecast 7 percent increase to 81 million tonnes this year on the back of new coal-fired power plants coming onstream. "The program to expand coal-fired generation capacity was largely completed in the first half of 2009 and limited new capacity is scheduled to be completed in the near future," it said.
Source: Reuters.
Production tables available here
Monday, September 21, 2009
Global Output Increases In August
Global steel production continued its steady climb from the lows it reached in late 2008 and early 2009, with China remaining the engine of that comeback, according to the August industry report from the World Steel Association, issued by the group on Monday.
In August, the 66 countries surveyed by the trade group produced 106.5 million metric tons. That's up 2.5% from the previous month, but still down 5.5% from August 2008. The picture becomes darker (if unsurprisingly so) if you tote up the year-to-date numbers and compare them to the same period in 2008. Worldwide, year-to-date steel production is off 22% from a year ago. And excluding the buoying factor of the Chinese steel industry, year-to-date output is down 39% from the first eight months of 2008.
The report offers insight into just how much China has focused on boosting its manufacturing via its vaunted stimulus package, and just how much China has become the world's great steelmaking nation. August marked the most steel -- 52.3 million metric tons -- the country has ever produced in a month.
China now makes almost as much steel as the rest of the world combined. Chinese steel production is up 22% from August 2008, while the rest of the world's output has shrunk by the same margin.
Japan and South Korea, two other leading steelmaking countries, also experienced a fairly strong August, with output rising 8.5% and 5.2% compared with July, respectively.
Source: The Street
In August, the 66 countries surveyed by the trade group produced 106.5 million metric tons. That's up 2.5% from the previous month, but still down 5.5% from August 2008. The picture becomes darker (if unsurprisingly so) if you tote up the year-to-date numbers and compare them to the same period in 2008. Worldwide, year-to-date steel production is off 22% from a year ago. And excluding the buoying factor of the Chinese steel industry, year-to-date output is down 39% from the first eight months of 2008.
The report offers insight into just how much China has focused on boosting its manufacturing via its vaunted stimulus package, and just how much China has become the world's great steelmaking nation. August marked the most steel -- 52.3 million metric tons -- the country has ever produced in a month.
China now makes almost as much steel as the rest of the world combined. Chinese steel production is up 22% from August 2008, while the rest of the world's output has shrunk by the same margin.
Japan and South Korea, two other leading steelmaking countries, also experienced a fairly strong August, with output rising 8.5% and 5.2% compared with July, respectively.
Source: The Street
STX, Vale Sign Iron Ore Shipping Deal
Korean shipping company STX Pan Ocean has agreed to a long-term deal worth some W6 trillion with Brazil-based Vale, the world's largest iron ore mining company (US$1=W1,208).
An official at STX Pan Ocean said on Sunday that the company is working out final details but expects to sign the contract on Tuesday or Wednesday.
Under the deal the Korean shipper will transport 12 to 13 million tons of ore a year, for a total of 300 million tons over 25 years, earning up to W6 trillion, the official said.
Source: Chosun Ilbo
An official at STX Pan Ocean said on Sunday that the company is working out final details but expects to sign the contract on Tuesday or Wednesday.
Under the deal the Korean shipper will transport 12 to 13 million tons of ore a year, for a total of 300 million tons over 25 years, earning up to W6 trillion, the official said.
Source: Chosun Ilbo
Sunday, September 20, 2009
JSW Seeks Karnataka Iron Ore Mine
Jindal South West Steel Limited (JSW Steel Ltd), the flagship company of the JSW Group, is seeking allotment of a captive iron ore mine in the iron ore-rich Bellary-Hospet region of north Karnataka. The company has applied to the state government and is waiting for the grant of the mining lease.
The company currently procures iron ore from the open market for its steel plant at Toranagal in Bellary as the state government is yet to fulfil its assurance of grant of a lease for a mine with reserves of 110 million tonnes in the Bellary region.
The company needs its own mine to expand the steel plant to 11 million tonnes per annum. This is scheduled to commence in 2010. Currently, it operates a steel mill with a capacity of 7.8 million tonnes.
The company required around 25 million tonnes iron ore to feed its plant once the expansion was completed, said Sajjan Jindal, vice-chairman and managing director, JSW Steel Ltd.
“We have been looking for mines since the start of our steel plant. But some people have gone to court against allotment of mining lease to us. We are waiting for the state government to sanction certain mining concessions. Once these come, we will take up the next phase of expansion,” Jindal told Business Standard.
Acquisition of a mine in Bellary is crucial for the company as it is in the process of expanding its steel-making capacity to 11 million tonnes per annum by 2010. The company has also received the state government’s approval to further expand the capacity to 16 million tonnes per annum at an investment of Rs 20,000 crore.
He said the proposed acquisition of the mine would meet around 50 per cent of the company’s raw material requirement. The the remaining would be procured from the open market, he added.
“There are not enough deposits at the mine we are looking to acquire. But, we are also developing new technologies to use low-grade iron ore.”
JSW Steel Ltd is the single-largest investor in the state. Its investments amount to Rs 21,700 crore.
For the year ended March 2009, the company reported a 73 per cent drop in its net profit to Rs 458.5 crore on a turnover of Rs 15,179 crore, a growth of 20 per cent over the previous year.
Source: Business Standard
The company currently procures iron ore from the open market for its steel plant at Toranagal in Bellary as the state government is yet to fulfil its assurance of grant of a lease for a mine with reserves of 110 million tonnes in the Bellary region.
The company needs its own mine to expand the steel plant to 11 million tonnes per annum. This is scheduled to commence in 2010. Currently, it operates a steel mill with a capacity of 7.8 million tonnes.
The company required around 25 million tonnes iron ore to feed its plant once the expansion was completed, said Sajjan Jindal, vice-chairman and managing director, JSW Steel Ltd.
“We have been looking for mines since the start of our steel plant. But some people have gone to court against allotment of mining lease to us. We are waiting for the state government to sanction certain mining concessions. Once these come, we will take up the next phase of expansion,” Jindal told Business Standard.
Acquisition of a mine in Bellary is crucial for the company as it is in the process of expanding its steel-making capacity to 11 million tonnes per annum by 2010. The company has also received the state government’s approval to further expand the capacity to 16 million tonnes per annum at an investment of Rs 20,000 crore.
He said the proposed acquisition of the mine would meet around 50 per cent of the company’s raw material requirement. The the remaining would be procured from the open market, he added.
“There are not enough deposits at the mine we are looking to acquire. But, we are also developing new technologies to use low-grade iron ore.”
JSW Steel Ltd is the single-largest investor in the state. Its investments amount to Rs 21,700 crore.
For the year ended March 2009, the company reported a 73 per cent drop in its net profit to Rs 458.5 crore on a turnover of Rs 15,179 crore, a growth of 20 per cent over the previous year.
Source: Business Standard
Orissa, NALCO Plan Aluminium Park JV
The Orissa government and Navratna public sector blue-chip National Aluminium Company Ltd (NALCO) on Saturday signed a memorandum of understanding (MoU) for establishment of an aluminium park at Angul at an estimated investment of Rs 75 crore.
The proposed park will be a 50:50 joint-venture between Nalco and the state-owned Orissa Industrial Infrastructure Development Corporation (IDCO).
The MoU was signed by Mr P K Dey, general manager (business development), Nalco and Srikant Kabi, managing director IDCO in the presence of chief minister Naveen Patnaik, industry minister Raghunath Mohanty, Nalco chairman and managing director C R Pradhan, chief secretary T K Mishra, industry secretary Sourabh Garg and several other dignitaries.
Speaking on the occasion, chief minister Naveen Patnaik said establishment of the aluminium park would help entrepreneurs to set up downstream industries near the Nalco's smelter at Angul.
"My government's Industrial Policy 2007 and Medium Small Micro Enterprises [MSME] Policy 2009 accord highest priority for development of ancillary and downstream industries in MSME sector for greater value addition of steel and aluminium products in the state. The proposed park is yet another step to provide a platform for MSME industries to come up and grow," Mr Patnaik observed.
NALCO CMD Mr Pradhan said MSMEs coming up in the 200-acre proposed park would save a lot of cost as it will be located close to the smelter plant.
"Being close to the smelter plant, transfer of alumina in molten stage is possible. This would reduce the cost of production," Mr Pradhan said, adding, the MSMEs in the proposed park would have easy access to water, coal, electricity and other required materials.
The ancillary and downstream units identified to be set up in the proposed industrial park in the alumina/aluminium sectors will be caustic soda, calcined petroleum coke, coal tar pitch, aluminium fluoride, aluminium conductors, aluminium extrusions, aluminium castings, slugs and circles; and aluminium power.
"I hope the initiative will trigger similar downstream and ancillary industrial parks in close vicinity of the new mega projects being set up in aluminium, steel and power sectors in Orissa," industry minister Mr Mohanty said.
Source: Economic Times
The proposed park will be a 50:50 joint-venture between Nalco and the state-owned Orissa Industrial Infrastructure Development Corporation (IDCO).
The MoU was signed by Mr P K Dey, general manager (business development), Nalco and Srikant Kabi, managing director IDCO in the presence of chief minister Naveen Patnaik, industry minister Raghunath Mohanty, Nalco chairman and managing director C R Pradhan, chief secretary T K Mishra, industry secretary Sourabh Garg and several other dignitaries.
Speaking on the occasion, chief minister Naveen Patnaik said establishment of the aluminium park would help entrepreneurs to set up downstream industries near the Nalco's smelter at Angul.
"My government's Industrial Policy 2007 and Medium Small Micro Enterprises [MSME] Policy 2009 accord highest priority for development of ancillary and downstream industries in MSME sector for greater value addition of steel and aluminium products in the state. The proposed park is yet another step to provide a platform for MSME industries to come up and grow," Mr Patnaik observed.
NALCO CMD Mr Pradhan said MSMEs coming up in the 200-acre proposed park would save a lot of cost as it will be located close to the smelter plant.
"Being close to the smelter plant, transfer of alumina in molten stage is possible. This would reduce the cost of production," Mr Pradhan said, adding, the MSMEs in the proposed park would have easy access to water, coal, electricity and other required materials.
The ancillary and downstream units identified to be set up in the proposed industrial park in the alumina/aluminium sectors will be caustic soda, calcined petroleum coke, coal tar pitch, aluminium fluoride, aluminium conductors, aluminium extrusions, aluminium castings, slugs and circles; and aluminium power.
"I hope the initiative will trigger similar downstream and ancillary industrial parks in close vicinity of the new mega projects being set up in aluminium, steel and power sectors in Orissa," industry minister Mr Mohanty said.
Source: Economic Times
Copper May Rise 15% By End Of Year
The price of copper, this year’s best commodity investment, may rise 15 percent by the end of the year as China buys more of the metal and mine supply is constrained, Macquarie Group Ltd. said.
Copper may cost $3.20 a pound in the last quarter of 2009, up from an earlier forecast of $1.70 a pound, Macquarie analysts led by Jim Lennon said in a report. It may average $3.20 a pound next year, up from an earlier forecast of $2.50.
Demand from China, the biggest user, increased after the government pledged 4 trillion yuan ($586 billion) to stimulate the economy and banks made loans of a record $1.1 trillion. There may be a small global deficit of copper next year, increasing in 2011, Macquarie said.
“Copper continues to present the most compelling bull case into a global economic recovery, entering the economic upturn with low stocks, limited idled capacity and a lack of committed new projects,” Lennon said. Copper is the only metal on which Macquarie is “outright bullish” relative to spot prices, he said.
The price of copper, used to make pipes and wires, has gained 93 percent to $2.78 a pound this year. The International Copper Study Group said July 10 that fewer mine expansions are planned for 2009 through 2011.
Factory output in China, the world’s fastest-growing major economy, climbed 12.3 percent from a year earlier last month, the most since August 2008, the statistics bureau said Sept. 11. Copper imports jumped 76 percent to 3 million metric tons in the first eight months, preliminary customs data show.
Commodity demand in China, the largest metals user, “is back on track in a very big way,” and copper and coking coal have the best prospects for price gains, CLSA Research Ltd. said Sept. 15
Source: Bloomberg
Copper may cost $3.20 a pound in the last quarter of 2009, up from an earlier forecast of $1.70 a pound, Macquarie analysts led by Jim Lennon said in a report. It may average $3.20 a pound next year, up from an earlier forecast of $2.50.
Demand from China, the biggest user, increased after the government pledged 4 trillion yuan ($586 billion) to stimulate the economy and banks made loans of a record $1.1 trillion. There may be a small global deficit of copper next year, increasing in 2011, Macquarie said.
“Copper continues to present the most compelling bull case into a global economic recovery, entering the economic upturn with low stocks, limited idled capacity and a lack of committed new projects,” Lennon said. Copper is the only metal on which Macquarie is “outright bullish” relative to spot prices, he said.
The price of copper, used to make pipes and wires, has gained 93 percent to $2.78 a pound this year. The International Copper Study Group said July 10 that fewer mine expansions are planned for 2009 through 2011.
Factory output in China, the world’s fastest-growing major economy, climbed 12.3 percent from a year earlier last month, the most since August 2008, the statistics bureau said Sept. 11. Copper imports jumped 76 percent to 3 million metric tons in the first eight months, preliminary customs data show.
Commodity demand in China, the largest metals user, “is back on track in a very big way,” and copper and coking coal have the best prospects for price gains, CLSA Research Ltd. said Sept. 15
Source: Bloomberg
Saturday, September 19, 2009
Vale Snaps Up Corumba Iron Ore Operations
The world's biggest iron-ore miner, Brazil's Vale, has completed its $750-million acquisition of the Corumbá iron-ore mining operations, in Brazil, from rival Rio Tinto, the company reported on Friday.
Vale said it plans to spend more that $2-billion to expand the capacity at Corumbá to 15-million tons a year.
In 2008, Corumbá produced 2-million tons of iron ore.
About $1,5-billion of the estimated capital would be spent to acquire convoys of barges, which could be ordered from Brazilian shipyards.
The expansion project still requires approval from Vale's board of directors.
“Corumbá is a world-class asset, with high iron content and a strategic importance to our product portfolio, adding a substantial volume of lump ore to our reserves,” the company said in a statement.
“Lump ores are becoming increasingly scarce in our iron ore deposits in the southern and southeastern systems in the state of Minas Gerais, Brazil,” Vale added.
Further, because of its high quality, a significant portion of the Corumbá reserves can be employed in the direct reduction process, which implies a price premium over other ores.
Source: Mining Weekly
Vale said it plans to spend more that $2-billion to expand the capacity at Corumbá to 15-million tons a year.
In 2008, Corumbá produced 2-million tons of iron ore.
About $1,5-billion of the estimated capital would be spent to acquire convoys of barges, which could be ordered from Brazilian shipyards.
The expansion project still requires approval from Vale's board of directors.
“Corumbá is a world-class asset, with high iron content and a strategic importance to our product portfolio, adding a substantial volume of lump ore to our reserves,” the company said in a statement.
“Lump ores are becoming increasingly scarce in our iron ore deposits in the southern and southeastern systems in the state of Minas Gerais, Brazil,” Vale added.
Further, because of its high quality, a significant portion of the Corumbá reserves can be employed in the direct reduction process, which implies a price premium over other ores.
Source: Mining Weekly
Friday, September 18, 2009
China Unlikely To Return To Net Coal Imports
China's appetite for foreign coking coal may moderate over the coming months, but the country won't become a net exporter again due to an overhaul of its mining sector and ongoing demand from coastal steel mills.
That’s good news for Australian producers which provided the majority of China’s coking coal imports in the January-July period, after demand from traditional importers Japan, South Korea and Europe buckled.
China shipped in 18 million tonnes of coking coal in the first seven months of 2009, making it the world's second-largest importer.
Demand from Indian steel mills is also helping to keep the market tight, and analysts are expecting a fresh wave of mergers and acquisitions in Australian coking coal as India and China seek greater control over supply lines.
BHP Billiton this week said it expects China to import 30 million tonnes this year, out of a global seaborne market of 140 million tonnes.
BHP's comments are closely watched because it is the world's largest miner and, through its BHP Mitsubishi Alliance, the world's largest coking coal producer for the seaborne market.
“A small percentage of high-quality coking coal imports into China looks sustainable given the push towards coastal, larger mills which require higher-quality coking coals,” BHP Marketing President, Tom Schutte, said.
This ties in with estimates by analysts who expect the pace of China's imports to taper off. They believe higher freight rates and falling domestic coal prices in China will make seaborne coal less competitive.
In addition, demand from India is expected to grow 5 per cent to 6 per cent annually from a high base of 28 million tonnes. India's domestic coking coal output is small.
"The focus is on China, but both (countries) are as important as each other in the long term," Nam Le, analyst at Australian Mineral Economics, said.
Support for the seaborne market is coming from a wave of safety checks at small mines in China after an accident in Henan province this month killed at least 44 people. This is the latest in a string of accidents that have forced many smaller mines that have the poorest safety record to shut down temporarily.
Macquarie estimated checks in Henan following the blast at the Pingdingshan coal mine would shut in about 3 million tonnes of coking coal output for a month.
That may appear small beer for China's domestic coking coal industry, which churns out 475 million to 500 million tonnes a year. However, much of China's supply growth has come from small mines.
"As the coking coal industry is consolidated, mining should become a more-regulated, more-capital-intensive and more-ponderous activity. It may be difficult to maintain historical growth rates given a new industry structure," Macquarie said.
Australia meets about 60 per cent of global seaborne demand, as infrastructure constraints and regulatory uncertainty hold back potential competitors like Mozambique and Mongolia.
Reliability of its supply has prompted China's largest mill Baosteel Group to agree to buy a 15 per cent stake in Aquila Resources, and Yanzhou Coal Mining to offer $3.54 billion for Felix Resources.
Patersons Coal analyst Andrew Harrington said dozens of Indian companies are "kicking tires" in Queensland.
Last month, Caledon Resources said it was in talks over a takeover offer of up to $US1 billion from India's Essar Minerals.
"Coking coal imports into China are a small story. Future growth will come from India, where there's negligible coking coal," Mr Harrington said.
Source: The Australian
That’s good news for Australian producers which provided the majority of China’s coking coal imports in the January-July period, after demand from traditional importers Japan, South Korea and Europe buckled.
China shipped in 18 million tonnes of coking coal in the first seven months of 2009, making it the world's second-largest importer.
Demand from Indian steel mills is also helping to keep the market tight, and analysts are expecting a fresh wave of mergers and acquisitions in Australian coking coal as India and China seek greater control over supply lines.
BHP Billiton this week said it expects China to import 30 million tonnes this year, out of a global seaborne market of 140 million tonnes.
BHP's comments are closely watched because it is the world's largest miner and, through its BHP Mitsubishi Alliance, the world's largest coking coal producer for the seaborne market.
“A small percentage of high-quality coking coal imports into China looks sustainable given the push towards coastal, larger mills which require higher-quality coking coals,” BHP Marketing President, Tom Schutte, said.
This ties in with estimates by analysts who expect the pace of China's imports to taper off. They believe higher freight rates and falling domestic coal prices in China will make seaborne coal less competitive.
In addition, demand from India is expected to grow 5 per cent to 6 per cent annually from a high base of 28 million tonnes. India's domestic coking coal output is small.
"The focus is on China, but both (countries) are as important as each other in the long term," Nam Le, analyst at Australian Mineral Economics, said.
Support for the seaborne market is coming from a wave of safety checks at small mines in China after an accident in Henan province this month killed at least 44 people. This is the latest in a string of accidents that have forced many smaller mines that have the poorest safety record to shut down temporarily.
Macquarie estimated checks in Henan following the blast at the Pingdingshan coal mine would shut in about 3 million tonnes of coking coal output for a month.
That may appear small beer for China's domestic coking coal industry, which churns out 475 million to 500 million tonnes a year. However, much of China's supply growth has come from small mines.
"As the coking coal industry is consolidated, mining should become a more-regulated, more-capital-intensive and more-ponderous activity. It may be difficult to maintain historical growth rates given a new industry structure," Macquarie said.
Australia meets about 60 per cent of global seaborne demand, as infrastructure constraints and regulatory uncertainty hold back potential competitors like Mozambique and Mongolia.
Reliability of its supply has prompted China's largest mill Baosteel Group to agree to buy a 15 per cent stake in Aquila Resources, and Yanzhou Coal Mining to offer $3.54 billion for Felix Resources.
Patersons Coal analyst Andrew Harrington said dozens of Indian companies are "kicking tires" in Queensland.
Last month, Caledon Resources said it was in talks over a takeover offer of up to $US1 billion from India's Essar Minerals.
"Coking coal imports into China are a small story. Future growth will come from India, where there's negligible coking coal," Mr Harrington said.
Source: The Australian
Newcrest Mine Capable Of 4800tpa Tungsten
Australia's Newcrest Mining Ltd. said on Friday that the O'Callaghans tungsten mine, near its Telfer gold mine, would be capable of annual production 4,800 metric tons of tungsten.
Newcrest, Australia's largest gold miner, is conducting a feasibility study and will decide in the next 12 months whether to develop the resource.
Once developed, O'Callaghans would be twice as large as any other tungsten mine in the world, producing about 7% of global output, Newcrest said in a presentation.
Source: Trading Markets
Newcrest, Australia's largest gold miner, is conducting a feasibility study and will decide in the next 12 months whether to develop the resource.
Once developed, O'Callaghans would be twice as large as any other tungsten mine in the world, producing about 7% of global output, Newcrest said in a presentation.
Source: Trading Markets
Lack Of Power Holding Back SA Ferrochrome Industry
There is significant global ferrochrome production capcity and, even with the recent surge in demand from China, it will take some time
before the industry can fully draw on this capacity, stated MSA Geoservices consultant Richard Wadley earlier this month.
“That, of course, is always assuming that the industry will have sufficient electricity supply for those energy-intensive plants,” said Wadley at a Ferrous Metals conference, in Johannesburg.
The fact that South Africa is at least three years away from significant new power-generation capacity would definitely impose a hindrance on the industry’s recovery to its former level.
Electricity is also becoming more expensive and power tariffs alone could constitute a third of the production costs of ferrous metals in the near future.
Nonetheless, Wadley pointed out that the ferrous metals industry was well aware of the impact of rising electricity costs. “There are concerted efforts being made to push technology towards greater energy efficiency,” he said.
Further, he noted that the ferrous metals industry followed the decline in steel demand and steel prices, with industry prices effectively being halved in the past year. “However, there has been some recovery and most prices are back to the levels they were at in 2006/07.
“Unfortunately, costs have risen dramatically and, although the prices are up again, profitability is much lower than it was in 2006/7.
“Alternatively, the industry could consider the export of raw materials; however, South Africa is still hindered by some serious logistical constraints,” said Wadley.
Nonetheless, he noted that all was not lost for the South African ferrous metals industry, seeing that many of the other industries and producers were experiencing similar problems.
Electricity costs were rising globally and infrastructure in most developing countries was not up to scratch. “By and large, our competitors are experiencing many or all of the problems and challenges that we are encountering.
“It is not entirely doom and gloom – we have a vibrant, highly sophisticated and deeply experienced fraternity that operates within the South African ferrous metals industry.
“Industry has shown resilience and an innovative ability to move forward, taking into account the different constraints. This is certainly not the first time that the ferrous metals industry has experienced a downturn.
“By and large, we are emerging from the trough of the last eight months in somewhat better shape than one might have expected.”
Wadley said that the South African ferrous metals industry could only hope that the recovery fuelled by Chinese demand was solid and sustainable, and that it wold underpin long-term recovery of the industry.
Source: Mining Weekly
“That, of course, is always assuming that the industry will have sufficient electricity supply for those energy-intensive plants,” said Wadley at a Ferrous Metals conference, in Johannesburg.
The fact that South Africa is at least three years away from significant new power-generation capacity would definitely impose a hindrance on the industry’s recovery to its former level.
Electricity is also becoming more expensive and power tariffs alone could constitute a third of the production costs of ferrous metals in the near future.
Nonetheless, Wadley pointed out that the ferrous metals industry was well aware of the impact of rising electricity costs. “There are concerted efforts being made to push technology towards greater energy efficiency,” he said.
Further, he noted that the ferrous metals industry followed the decline in steel demand and steel prices, with industry prices effectively being halved in the past year. “However, there has been some recovery and most prices are back to the levels they were at in 2006/07.
“Unfortunately, costs have risen dramatically and, although the prices are up again, profitability is much lower than it was in 2006/7.
“Alternatively, the industry could consider the export of raw materials; however, South Africa is still hindered by some serious logistical constraints,” said Wadley.
Nonetheless, he noted that all was not lost for the South African ferrous metals industry, seeing that many of the other industries and producers were experiencing similar problems.
Electricity costs were rising globally and infrastructure in most developing countries was not up to scratch. “By and large, our competitors are experiencing many or all of the problems and challenges that we are encountering.
“It is not entirely doom and gloom – we have a vibrant, highly sophisticated and deeply experienced fraternity that operates within the South African ferrous metals industry.
“Industry has shown resilience and an innovative ability to move forward, taking into account the different constraints. This is certainly not the first time that the ferrous metals industry has experienced a downturn.
“By and large, we are emerging from the trough of the last eight months in somewhat better shape than one might have expected.”
Wadley said that the South African ferrous metals industry could only hope that the recovery fuelled by Chinese demand was solid and sustainable, and that it wold underpin long-term recovery of the industry.
Source: Mining Weekly
Thursday, September 17, 2009
Asia Iron Ore Prices Remain Flat Ahead Of Chinese Holiday
Iron ore prices in Asia remained nearly flat this week supported by moderate demand from China ahead of its holidays early next month, traders and dealers said on Thursday.
"Buyers are turning a bit active these days. We have a week-long holiday ahead and need to prepare quickly," said a dealer at an international trading house in Shanghai.
Chinese markets will be closed from Oct 1-8 for the National Day holiday and Mid-Autumn Festival, ahead of which some traders need to buy for near term requirement.
Industry consultant Mysteel said ores of Indian origin with 63/63.5 percent iron were quoted at $83-$85 a tonne, C&F for forward delivery, compared to $82-$84 last week.
In India, a trader said he had heard of a deal done at $84 a tonne C&F.
A miner in western Indian state of Goa said he was quoting iron ore fines with 58 percent iron at $67-$68 C&F, but deals were not done as fines would be available for shipment by mid October.
"Demand is stagnant at the moment. People are waiting and watching," said Gaurav Atha, managing partner at K.N. Ram and Co in east India. "Buyers are asking for $80, but we are not selling." Freight costs reflected the slow demand.
The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities including iron ore, fell by 3 percent on Wednesday from a week ago.
Lower outlook for steel prices too cast a doubt over iron ore.
China's Baoshan Iron and Steel Co Ltd cut prices by 6 percent for October owing to high production.
But dealers and traders remained hopeful of China's long term demand.
"China would still need to buy iron ore as its steel market is the biggest and it can't stop producing it," a dealer in a large global trading company in New Delhi said.
Source: Reuters
"Buyers are turning a bit active these days. We have a week-long holiday ahead and need to prepare quickly," said a dealer at an international trading house in Shanghai.
Chinese markets will be closed from Oct 1-8 for the National Day holiday and Mid-Autumn Festival, ahead of which some traders need to buy for near term requirement.
Industry consultant Mysteel said ores of Indian origin with 63/63.5 percent iron were quoted at $83-$85 a tonne, C&F for forward delivery, compared to $82-$84 last week.
In India, a trader said he had heard of a deal done at $84 a tonne C&F.
A miner in western Indian state of Goa said he was quoting iron ore fines with 58 percent iron at $67-$68 C&F, but deals were not done as fines would be available for shipment by mid October.
"Demand is stagnant at the moment. People are waiting and watching," said Gaurav Atha, managing partner at K.N. Ram and Co in east India. "Buyers are asking for $80, but we are not selling." Freight costs reflected the slow demand.
The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities including iron ore, fell by 3 percent on Wednesday from a week ago.
Lower outlook for steel prices too cast a doubt over iron ore.
China's Baoshan Iron and Steel Co Ltd cut prices by 6 percent for October owing to high production.
But dealers and traders remained hopeful of China's long term demand.
"China would still need to buy iron ore as its steel market is the biggest and it can't stop producing it," a dealer in a large global trading company in New Delhi said.
Source: Reuters
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