Safety inspectors have found no major damage at Codelco’s copper mines at El Teniente and Andina. The mines were closed after a power outage following an 8.8 magnitude earthquake that hit the country in the early hours of Saturday morning.
Chilean mining minister Santiago Gonzalez said the mines would open shortly without specifying a time-scale.
Codelco’s mines in the north of the country are operating normally. The company suffered no deaths or injuries as a result of the earthquake. The Escondida copper mine, jointly-owned by Rio Tinto and BHP, is also working normally as a result.
Anglo-American’s copper mines at Los Bronces and El Soldado are also out of action following a power outage caused by the earthquake.
Copper accounts for half of Chile’s $53 billion worth of exports. Codelco is the world’s largest copper producer with annual production of around 600,000 tonnes. Anglo-American produces around 280,000 tonnes a year from its two mines.
Sunday, February 28, 2010
Saturday, February 27, 2010
Breakwater Shows Q4 Profit
Canadian miner Breakwater Resources posted profits of C$5.4-million in the fourth quarter of 2009. This compared to a net loss of C$53.5-million a year earlier, when it wrote down the value of its mining assets. The full-year result was a profit of C$0.8 million against a loss of C$88.3 million in 2008.
Breakwater produces zinc, copper, lead and gold from mines in Canada, Chile and Honduras.
Lower zinc prices in late 2008 and early 2009 hit profits, however CEO David Petroff said that the company curtailed its spending and has since benefited from stronger metals prices..
“By mid-2009 any concern that Breakwater would not survive had been put to rest,” he told analysts and investors on Friday.
The company ended 2009 with C$41.1-million in the bank, working capital of C$70.7-million and a portion of future earnings protected by the purchase of zinc put options, giving shareholders the benefit of higher zinc prices.
Fourth quarter concentrate production fell 6% year-on-year to 61,757 tonnes after the company suspended production at its Langlois mine in Quebec in November 2008. However, the suspension also meant that operating costs fell by C$58.8 million or 77%, while there was also a saving of C$12 million in depreciation and depletion charges.
Gross sales revenue declined 50%, to C$50.4-million for the quarter, as a result of a 63% decrease in concentrate sold and a stronger Canadian dollar, partly offset by higher realised prices.
While zinc metal stocking and destocking at various levels in the supply chain, as well as fund activity, makes supply and demand fundamentals difficult to gauge in the short term, the company remains confident that the outlook for zinc is positive in the medium and long term, Petroff said.
There are several mine closures looming around the world, and recent production problems or uncertainty at large operations in Canada and Australia are also a reminder that “mine supply cannot be taken for granted,” he added.
Breakwater produces zinc, copper, lead and gold from mines in Canada, Chile and Honduras.
Lower zinc prices in late 2008 and early 2009 hit profits, however CEO David Petroff said that the company curtailed its spending and has since benefited from stronger metals prices..
“By mid-2009 any concern that Breakwater would not survive had been put to rest,” he told analysts and investors on Friday.
The company ended 2009 with C$41.1-million in the bank, working capital of C$70.7-million and a portion of future earnings protected by the purchase of zinc put options, giving shareholders the benefit of higher zinc prices.
Fourth quarter concentrate production fell 6% year-on-year to 61,757 tonnes after the company suspended production at its Langlois mine in Quebec in November 2008. However, the suspension also meant that operating costs fell by C$58.8 million or 77%, while there was also a saving of C$12 million in depreciation and depletion charges.
Gross sales revenue declined 50%, to C$50.4-million for the quarter, as a result of a 63% decrease in concentrate sold and a stronger Canadian dollar, partly offset by higher realised prices.
While zinc metal stocking and destocking at various levels in the supply chain, as well as fund activity, makes supply and demand fundamentals difficult to gauge in the short term, the company remains confident that the outlook for zinc is positive in the medium and long term, Petroff said.
There are several mine closures looming around the world, and recent production problems or uncertainty at large operations in Canada and Australia are also a reminder that “mine supply cannot be taken for granted,” he added.
Friday, February 26, 2010
Anvil Sells Stake In Congo Copper-Silver Project
Canada's Anvil Mining Ltd is to sell its 90 per cent interest in the Dikulushi copper-silver mine in the Democratic Republic of Congo (DRC) to Australia's Mawson West Ltd. In return Anvil will receive a 28 percent stake in the junior miner.
The company said it is focused on larger copper projects in the DRC, in particular the copper mine project Kinsevere Stage II in Congo which is expected to yield 60,000 tonnes per year of cathode copper and is expected to begin commissioning during the first quarter of 2011. The Company plans to carry out further drilling at Kinsevere during 2010 and is investigating expansion opportunities with attractive synergies for the Kinsevere operation with the possibility of extending the processing life of the project.
The Dikulushi copper-silver mine was placed on care and maintenance in the fourth quarter of 2008 due to weaker commodity prices.
The company said it is focused on larger copper projects in the DRC, in particular the copper mine project Kinsevere Stage II in Congo which is expected to yield 60,000 tonnes per year of cathode copper and is expected to begin commissioning during the first quarter of 2011. The Company plans to carry out further drilling at Kinsevere during 2010 and is investigating expansion opportunities with attractive synergies for the Kinsevere operation with the possibility of extending the processing life of the project.
The Dikulushi copper-silver mine was placed on care and maintenance in the fourth quarter of 2008 due to weaker commodity prices.
Ursa Major Reopens Shakespeare Nickel Mine
Canada’s Ursa Major Minerals Incorporated reports it has started shipping nickel ore from its restarted Sahakespeare open pit to Sudbury for processing at the Xstrata Nickel plant.
Ore shipments began in mid-February after the company's contractors began mining at the beginning of the month.
CEO Richard Sutcliffe said “We are extremely pleased with the quick and efficient start up that has been achieved at the Shakespeare Mine. Our team at Ursa Major has worked diligently to accomplish this task.”
He added “We are also very pleased to be in a position to benefit from the significant recent improvement in nickel and copper prices. In addition to the mining operations, we are planning an active exploration program in 2010 and the improved prices will further enhance these plans.”
Plans are to move 200,000 tonnes by truck to Sudbury in 2010 at a rate of about 1000 tonnes a day.
The company also announced a second private placement of financing consisting of the issuance of 6,800,000 common share purchase units at $0.10 per unit for gross proceeds of $680,000. The proceeds will go to general working capital and for certain costs associated with re-starting the Shakespeare mine.
Ursa Major has two nickel sulphide projects containing significant 43-101 compliant nickel/copper reserves and resources. The company has an option to earn a 70% interest in the past-producing Nickel Offsets mine, a 100% interest in the Shining Tree nickel deposit, and it has also acquired PGM exploration properties in the Thunder Bay area of Ontario.
Ore shipments began in mid-February after the company's contractors began mining at the beginning of the month.
CEO Richard Sutcliffe said “We are extremely pleased with the quick and efficient start up that has been achieved at the Shakespeare Mine. Our team at Ursa Major has worked diligently to accomplish this task.”
He added “We are also very pleased to be in a position to benefit from the significant recent improvement in nickel and copper prices. In addition to the mining operations, we are planning an active exploration program in 2010 and the improved prices will further enhance these plans.”
Plans are to move 200,000 tonnes by truck to Sudbury in 2010 at a rate of about 1000 tonnes a day.
The company also announced a second private placement of financing consisting of the issuance of 6,800,000 common share purchase units at $0.10 per unit for gross proceeds of $680,000. The proceeds will go to general working capital and for certain costs associated with re-starting the Shakespeare mine.
Ursa Major has two nickel sulphide projects containing significant 43-101 compliant nickel/copper reserves and resources. The company has an option to earn a 70% interest in the past-producing Nickel Offsets mine, a 100% interest in the Shining Tree nickel deposit, and it has also acquired PGM exploration properties in the Thunder Bay area of Ontario.
POSCO To Spend Agressively To Secure Raw Materials
POSCO, South Korea’s largest steelmakers, says it will actively pursue overseas investments in raw material assets as the costs of coal and iron ore become higher.
CEO Chung Joon Yang told shareholders that “the company will pursue investments in overseas mines more aggressively to secure raw materials.”
With iron ore contract prices up by around 40 per cent and even greater increases mooted for coal, steelmakers face escalating costs as the industry looks set to recover after the global recession.
“Economies at home and abroad are on a recovery path now, but the outlook for a full recovery is uncertain,” Mr Chung said today. “We expect competition among steelmakers to increase.”
The company is planning to buy a stake of as much as 15 per cent in the Roy Hill project in Australia to add to the 16.7 per cent stake POSCO bought in Jupiter Mines last year. POSCO also has a 10 per cent stake in Queensland’s Macarthur Coal.
POSCO has also bid for a stake of as much as 68 per cent in Korean trading firm, Daewoo International.
The company plans to spend as much as $8 billion in capital spending in 2010, almost double its spending last year. The company is also looking to expand overseas with as much as $30 billion earmarked for expansion into India, Indonesia and Vietnam. “We will go ahead with overseas mill plans in countries including India and Indonesia in order to strengthen the company’s status as a global player,” Mr Chung said.
CEO Chung Joon Yang told shareholders that “the company will pursue investments in overseas mines more aggressively to secure raw materials.”
With iron ore contract prices up by around 40 per cent and even greater increases mooted for coal, steelmakers face escalating costs as the industry looks set to recover after the global recession.
“Economies at home and abroad are on a recovery path now, but the outlook for a full recovery is uncertain,” Mr Chung said today. “We expect competition among steelmakers to increase.”
The company is planning to buy a stake of as much as 15 per cent in the Roy Hill project in Australia to add to the 16.7 per cent stake POSCO bought in Jupiter Mines last year. POSCO also has a 10 per cent stake in Queensland’s Macarthur Coal.
POSCO has also bid for a stake of as much as 68 per cent in Korean trading firm, Daewoo International.
The company plans to spend as much as $8 billion in capital spending in 2010, almost double its spending last year. The company is also looking to expand overseas with as much as $30 billion earmarked for expansion into India, Indonesia and Vietnam. “We will go ahead with overseas mill plans in countries including India and Indonesia in order to strengthen the company’s status as a global player,” Mr Chung said.
Thursday, February 25, 2010
Codelco Increases Copper Production By 16 Per Cent
Codelco, the Chilean state-controlled copper miner, increased copper output in 2009 by 16 per cent to 1.78 million tonnes compared to 1.46 million tonnes in 2008. This figure includes Codelco’s 49 per cent share of the El Abra mine controlled by Freeport McMoran, which equated to 80,000 tonnes.
Codelco also produced 22,000 tonnes of molybdenum during the year, against 21,000 tonnes in 2008.
However, profits before tax and extraordinary items fell by 18 per cent to $4 billion due to lower copper prices and the global financial crisis. Revenues rose to US$8.88bn from US$8.74bn the previous year, despite a steep fall at the company’s molybdenum division, registering a fall of $1 billion down to $500 million.
Output was higher for the first time in four years, largely due to investment in ageing plant, and helped by stimulus money from the Chilean government. The company invested $2.13 billion during the course of the year against $1.99 billion in 2008. Production was also helped by the fact that were no strikes at the company during the year.
CEO José Pablo Arellano told a press conference on Thursday that Codelco was the only Chilean miner to register growth during 2009. Figures for Chile’s copper production showed a fall on 5 per cent during 2009. Mr Arellano said that Codelco’s share of Chile’s copper production rose from 27 per cent in 2008 to 33 per cent last year.
Total costs fell to US$1.58/lb last year from US$1.78/lb in 2008. Cash costs following by-product credits and other deductions rose to US$0.93/lb in 2009 from US$0.70/lb in 2008.
Codelco also produced 22,000 tonnes of molybdenum during the year, against 21,000 tonnes in 2008.
However, profits before tax and extraordinary items fell by 18 per cent to $4 billion due to lower copper prices and the global financial crisis. Revenues rose to US$8.88bn from US$8.74bn the previous year, despite a steep fall at the company’s molybdenum division, registering a fall of $1 billion down to $500 million.
Output was higher for the first time in four years, largely due to investment in ageing plant, and helped by stimulus money from the Chilean government. The company invested $2.13 billion during the course of the year against $1.99 billion in 2008. Production was also helped by the fact that were no strikes at the company during the year.
CEO José Pablo Arellano told a press conference on Thursday that Codelco was the only Chilean miner to register growth during 2009. Figures for Chile’s copper production showed a fall on 5 per cent during 2009. Mr Arellano said that Codelco’s share of Chile’s copper production rose from 27 per cent in 2008 to 33 per cent last year.
Total costs fell to US$1.58/lb last year from US$1.78/lb in 2008. Cash costs following by-product credits and other deductions rose to US$0.93/lb in 2009 from US$0.70/lb in 2008.
Liberia To Generate $260 million In Iron Ore Tax Revenues
Liberia’s ministry of finance has said that the country aims to generate $260 million a year in tax revenue from iron ore mines by 2014. This is equivalent to 17 percent of gross domestic product. The statement was made today by the country’s Ministry of Finance/
Shipments of iron ore from the country are expected to commence in 2011. Meanwhile around $5 billion is being spent on new iron ore projects in the West African country.
China Union has a $2.6 billion iron ore project currently in the planning stages while Israel’s Elenilto was recently awarded the contract to develop the Western Cluster iron ore deposit in a project that is estimated to cost $2.4 billion.
Shipments of iron ore from the country are expected to commence in 2011. Meanwhile around $5 billion is being spent on new iron ore projects in the West African country.
China Union has a $2.6 billion iron ore project currently in the planning stages while Israel’s Elenilto was recently awarded the contract to develop the Western Cluster iron ore deposit in a project that is estimated to cost $2.4 billion.
Lion Energy Assigns El Sol Iron Ore Interest
Canadian miner, Lion Energy is to assign its interest in the El Sol iron ore property in northern Ontario to Northern Iron Corporation. In return Lion will receive a total of 8.5 million shares in NIC.
Lion has also agreed to accept an aggregate of 500,000 common shares in NIC as compensation for the assignment, and as consideration for agreeing to waive the requirement for either the Company or NIC to incur remaining exploration expenditures on the El Sol property up to $1,500,000.
The Shares are to be converted, on a ratio of not less than 1 to 1, into shares of a company listed on the TSX Venture Exchange. Lion will then distribute the shares to shareholders of Lion Energy.
Both parties have agreed a time frame of up to 31 January 2011 for the shares to be converted.
El Sol is located approximately 75 km northeast of Ear Falls, Ontario in the Red Lake Mining District.
Lion is also involved in oil and gas exploration projects in Kenya, Ethiopia and Somalia. It also holds several strategic investments in Potash, Sulphur Fertilizer and Uranium. The company recently formalised a deal to sell its potash assets to Encanto Potash Corp and in return Lion now owns 14.8% of Encanto.
Des Nogalski
Lion has also agreed to accept an aggregate of 500,000 common shares in NIC as compensation for the assignment, and as consideration for agreeing to waive the requirement for either the Company or NIC to incur remaining exploration expenditures on the El Sol property up to $1,500,000.
The Shares are to be converted, on a ratio of not less than 1 to 1, into shares of a company listed on the TSX Venture Exchange. Lion will then distribute the shares to shareholders of Lion Energy.
Both parties have agreed a time frame of up to 31 January 2011 for the shares to be converted.
El Sol is located approximately 75 km northeast of Ear Falls, Ontario in the Red Lake Mining District.
Lion is also involved in oil and gas exploration projects in Kenya, Ethiopia and Somalia. It also holds several strategic investments in Potash, Sulphur Fertilizer and Uranium. The company recently formalised a deal to sell its potash assets to Encanto Potash Corp and in return Lion now owns 14.8% of Encanto.
Des Nogalski
Indian Iron Ore Prices Head For $140 a Tonne
Reuters reports that iron ore prices from India are set to hit levels last seen during 2008. Deals done on Thursday were at $137-$138 a tonne C&F, up from $129 a tonne last week. Meanwhile there were rumours amongst traders of deals being done at $140-143 a tonne.
According to Beijing-based trade information company Umetal, steel mills did not increase inventories before the recent Lunar festival, leading to shortages when factories returned to work this week.
The price of iron ore last hit the $140 a tonne level back in 2008 when purchases for it post-Olympic infrastructure pushed up prices.
According to Beijing-based trade information company Umetal, steel mills did not increase inventories before the recent Lunar festival, leading to shortages when factories returned to work this week.
The price of iron ore last hit the $140 a tonne level back in 2008 when purchases for it post-Olympic infrastructure pushed up prices.
Profits Dive At OM Holdings
ASX-listed OM Holdings Limited (OMH) has reported a fall in post-tax profits of 77 per cent from last years $115.6 million to $26.9 million for the year to 31 December. The fall is blamed on lower prices and volumes for its manganese ore.
OM is looking for a better 2010 with budgeted production and sales of 1 million tonnes of ores and 41000 tonnes of high carbon ferromanganese powered by estimated Chinese steel production this year of 620 million tonnes.
Meanwhile OM also announced that reserves at its Bootu Creek manganese mine in Australia’s Northern Territory now stands at 32.9 million tonnes at 23.1 per cent manganese content.
OM is looking for a better 2010 with budgeted production and sales of 1 million tonnes of ores and 41000 tonnes of high carbon ferromanganese powered by estimated Chinese steel production this year of 620 million tonnes.
Meanwhile OM also announced that reserves at its Bootu Creek manganese mine in Australia’s Northern Territory now stands at 32.9 million tonnes at 23.1 per cent manganese content.
Coal India Proposes 20 New Coal Washeries
India’s state-owned coal miner, Coal India Ltd (CIL), has announced plans to invest about Rs 25 billion to set up 20 coal washeries with an annual capacity of 111.10 million tonnes, according to the pre-budget survey laid before the country’s Parliament.
The washeries will reduce the amount of ash in domestic coal and improve its calorific content. Indian coal contains an average ash content of 35 to 38 per cent.
The proposed units comprise seven coking coal washeries and 13 non-coking coal washeries. No time frame has been given for the construction of the washeries.
The washeries will reduce the amount of ash in domestic coal and improve its calorific content. Indian coal contains an average ash content of 35 to 38 per cent.
The proposed units comprise seven coking coal washeries and 13 non-coking coal washeries. No time frame has been given for the construction of the washeries.
China Non-Ferrous Metals Output Up 4 Per Cent In 2009
China’s non-ferrous metal output rose by 4 per cent in 2009 to hit 26.05 million tonnes, according to figures from the China Nonferrous Metals Industry Association.
Refined copper output was 4.11 million tons while virgin aluminium production stood at 12.85 million tons; in addition there was output of 3.71 million tons for lead, 4.36 million tons of zinc, 164,800 tons of nickel, 134,500 tons of tin, 165,800 tons of antimony, 500,800 tons of magnesium and 61,500 tons of titanium sponge.
However, the trade in non-ferrous metals fell in 2009 as a result of the crash in global commodities prices. Trade stood at US$83.2 billion, down 11.27% year on year.
Between them, ten regions of China, including Henan Province, Inner Mongolia Autonomous Region and Anhui Province, each produced more than one million tonnes of non-ferrous metals. Total output for these ten regions amounted to 18.78 million tonnes, 72.1% of the national total. Zhejiang Province plans to have five nonferrous metal producers with annual sales revenue exceeding RMB 10 billion each in the next three years.
Refined copper output was 4.11 million tons while virgin aluminium production stood at 12.85 million tons; in addition there was output of 3.71 million tons for lead, 4.36 million tons of zinc, 164,800 tons of nickel, 134,500 tons of tin, 165,800 tons of antimony, 500,800 tons of magnesium and 61,500 tons of titanium sponge.
However, the trade in non-ferrous metals fell in 2009 as a result of the crash in global commodities prices. Trade stood at US$83.2 billion, down 11.27% year on year.
Between them, ten regions of China, including Henan Province, Inner Mongolia Autonomous Region and Anhui Province, each produced more than one million tonnes of non-ferrous metals. Total output for these ten regions amounted to 18.78 million tonnes, 72.1% of the national total. Zhejiang Province plans to have five nonferrous metal producers with annual sales revenue exceeding RMB 10 billion each in the next three years.
Ferrous Resources Looking at London Listing
Brazilian iron ore miner Ferrous Resources is rumoured to be planning a London listing which will value the company at £3.2 billion.
London newspaper, the Daily Mail, reported on Thursday that Ferrous has appointed JP Morgan Cazenove and Deutsche Bank ahead of the flotation. Ferrous’ directors collectively own a total stake in the company of 20 per cent.
The news follows comes after a number of high-profile proposed London listings were pulled, including fashion retailer New Look which was pulled a matter of days after being announced.
Ferrous operates in the Iron Quadrangle region of Minas Gerais in south-eastern Brazil. The company’s target is to produce in excess of 50 million tonnes per annum of saleable iron ore products.
According to the company’s own figures measured, indicated and inferred iron mineral resources are 2,958 Mt grading 35.6% Fe at a cut-off grade of 25% Fe. In addition, the company’s properties contain an estimated target potential of a further 1,592Mt (± 30%) in areas where there has been insufficient sampling to date to define a mineral resource.
Ferrous is also developing a private sea port in Brazil to export its iron ore products. The mines are located 300 km from the sea, close to the nation’s capital, Brasilia.
Last week it was reported that Indian state-owned miner NMDC is looking at taking a 50 per cent stake in Ferrous’ Brazilian operations, which will be diluted to 40 per cent on flotation.
Ferrous’ executive chairman is Gordon Toll, who has a background with both Rio Tinto and BHP Billiton and was previously chairman of Australian iron ore miner, Fortescue.
London newspaper, the Daily Mail, reported on Thursday that Ferrous has appointed JP Morgan Cazenove and Deutsche Bank ahead of the flotation. Ferrous’ directors collectively own a total stake in the company of 20 per cent.
The news follows comes after a number of high-profile proposed London listings were pulled, including fashion retailer New Look which was pulled a matter of days after being announced.
Ferrous operates in the Iron Quadrangle region of Minas Gerais in south-eastern Brazil. The company’s target is to produce in excess of 50 million tonnes per annum of saleable iron ore products.
According to the company’s own figures measured, indicated and inferred iron mineral resources are 2,958 Mt grading 35.6% Fe at a cut-off grade of 25% Fe. In addition, the company’s properties contain an estimated target potential of a further 1,592Mt (± 30%) in areas where there has been insufficient sampling to date to define a mineral resource.
Ferrous is also developing a private sea port in Brazil to export its iron ore products. The mines are located 300 km from the sea, close to the nation’s capital, Brasilia.
Last week it was reported that Indian state-owned miner NMDC is looking at taking a 50 per cent stake in Ferrous’ Brazilian operations, which will be diluted to 40 per cent on flotation.
Ferrous’ executive chairman is Gordon Toll, who has a background with both Rio Tinto and BHP Billiton and was previously chairman of Australian iron ore miner, Fortescue.
Korean Retailer Submits Bid For Daewoo International Stake
South Korean second-largest retailer, the Lotte Group, has emerged as an unexpected bidder for the controlling stake in commodities trader and shipper, Daewoo International, according to an unidentified source within the company.
Yesterday, the country’s largest steelmaker, POSCO, indicated that it would be bidding for the stake of between 50 per cent plus one share and 68 per cent, which has been put up for sale by nine Daewoo shareholders.
Meanwhile analysts have played down Lotte’s chance of succeeding in buying the stake, pointing to various synergies in the POSCO bid and the fact that POSCO has more cash to bid for the Daewoo stake.
POSCO is looking at Daewoo’s energy and resource development business which it can tap into to secure supplies for its steel business.
It is believed that a number of other bidders handed in letters on intent by Wednesday’s deadline, although other than POSCO and Lotte none have been identified. It is believed that a consortium put together by a former Daewoo executive was also looking to put together a bid.
The sale of the Daewoo stake is being handled by the state-run Korea Asset Management Corp.
Des Nogalski
Yesterday, the country’s largest steelmaker, POSCO, indicated that it would be bidding for the stake of between 50 per cent plus one share and 68 per cent, which has been put up for sale by nine Daewoo shareholders.
Meanwhile analysts have played down Lotte’s chance of succeeding in buying the stake, pointing to various synergies in the POSCO bid and the fact that POSCO has more cash to bid for the Daewoo stake.
POSCO is looking at Daewoo’s energy and resource development business which it can tap into to secure supplies for its steel business.
It is believed that a number of other bidders handed in letters on intent by Wednesday’s deadline, although other than POSCO and Lotte none have been identified. It is believed that a consortium put together by a former Daewoo executive was also looking to put together a bid.
The sale of the Daewoo stake is being handled by the state-run Korea Asset Management Corp.
Des Nogalski
Gulf Mining Opens Oman's First Chrome Benefication Plant
Omani mining company, Gulf Mining Materials Company, opened the country’s first chrome ore beneficiation plant this week at Wadi Mahram in the north east of Oman. When commissioned, the plant will have an intake capacity of 15,000 tonnes per month.
Gulf Mining’s own chromite mine is situated close to the plant although the company says it will also process ore from other mines. It is envisaged that the finished chrome concentrate will be exported principally to companies in China and India.
Gulf Mining began its chromite ore mining operations in 2006, although up to now it has exported its chromite in raw form. The company is also active in laterite quarrying with a laterite quarry at Barka which mines around 30,000 tonnes per month. This is exported to the nearby United Arab Emirates. Marble quarrying is expected to commence shortly.
The opening of the chrome ore beneficiation plant is part of the company’s plan to diversify into value added processes. The company also hopes to begin mining for copper ore, iron ore, kaolin and limestone, among other minerals.
Des Nogalski
Gulf Mining’s own chromite mine is situated close to the plant although the company says it will also process ore from other mines. It is envisaged that the finished chrome concentrate will be exported principally to companies in China and India.
Gulf Mining began its chromite ore mining operations in 2006, although up to now it has exported its chromite in raw form. The company is also active in laterite quarrying with a laterite quarry at Barka which mines around 30,000 tonnes per month. This is exported to the nearby United Arab Emirates. Marble quarrying is expected to commence shortly.
The opening of the chrome ore beneficiation plant is part of the company’s plan to diversify into value added processes. The company also hopes to begin mining for copper ore, iron ore, kaolin and limestone, among other minerals.
Des Nogalski
Wednesday, February 24, 2010
POSCO In Bid For Daewoo Stake
South Korea’s POSCO, the world’s fourth largest steelmakers, is the favourite to buy a controlling $2 billion stake in Korean trading and resources firm, Daewoo International. Nine Korean financial institutions, including state-run debt clearer Korea Asset Management, are looking to sell a stake of between 50 percent plus 1 share and their entire 68 percent in Daewoo. It is understood that there other bidders for the company, including a consortium headed by a former executive of Daewoo.
POSCO said on Wednesday it had submitted a letter of intent ahead of a deadline to buy a stake in the company although it is not clear how much of the stake it is looking to buy. A source close to the deal said he expects POSCO to bid for the whole 68 per cent stake.
Last month POSCO said it would be spending $8.3 billion on investments and has earmarked a third of that for acquisitions.
Daewoo as a number of development projects, including a gas development in Myanmar and a nickel project in Madagascar as well as a 24 per cent stake in one of Korea’s leading life insurer, Kyobo Life. The company’s shipping arm already transports POSCO steel products however its iron ore trading activities makes it particularly attractive to POSCO as it seeks to shore up its raw material supply. Daewoo also ships base metals, auto parts and consumer electronics.
Daewoo’s corporate value is valued at around 5.4 trillion won (around $4 billion), some 50 per cent higher than its market capitalisation.
Daewoo is considered one of the most attractive acquisition targets this year as it focuses on development of buoyant oil, gas and resources, while its trading business should benefit from a global economic recovery.
Daewoo's resources portfolio includes an 8 trillion won ($6.9 billion) gas development in Myanmar and a nickel project in Madagascar. It also has a 24 percent stake in unlisted Kyobo Life, South Korea's No.3 life insurer.
POSCO said on Wednesday it had submitted a letter of intent ahead of a deadline to buy a stake in the company although it is not clear how much of the stake it is looking to buy. A source close to the deal said he expects POSCO to bid for the whole 68 per cent stake.
Last month POSCO said it would be spending $8.3 billion on investments and has earmarked a third of that for acquisitions.
Daewoo as a number of development projects, including a gas development in Myanmar and a nickel project in Madagascar as well as a 24 per cent stake in one of Korea’s leading life insurer, Kyobo Life. The company’s shipping arm already transports POSCO steel products however its iron ore trading activities makes it particularly attractive to POSCO as it seeks to shore up its raw material supply. Daewoo also ships base metals, auto parts and consumer electronics.
Daewoo’s corporate value is valued at around 5.4 trillion won (around $4 billion), some 50 per cent higher than its market capitalisation.
Daewoo is considered one of the most attractive acquisition targets this year as it focuses on development of buoyant oil, gas and resources, while its trading business should benefit from a global economic recovery.
Daewoo's resources portfolio includes an 8 trillion won ($6.9 billion) gas development in Myanmar and a nickel project in Madagascar. It also has a 24 percent stake in unlisted Kyobo Life, South Korea's No.3 life insurer.
Xstrata Puts USD100 a Tonne Tag On Thermal Coal
Reuters has reported that Xstrata Plc has offered Japan's Chubu Electric annual thermal coal contracts starting in April at $100 a tonne, up by 43 percent from the settled price last year, sources said on Wednesday.
"The Xstrata guys are in town at the moment and they have tabled an offer at $100 a tonne," said a source from Chubu with knowledge of the negotiations. Chubu are said to be holding out for $85-90 a tonne.
Last year’s contract prices were between $70 and $72 a tonne and represented a 44 per cent fall on the 2008-09 price. Sources suggest that Chubu will adopt a ‘wait and see’ stance and weigh up demand from other Asian customers such as China or India.
Xstrata was successful in achieving an $85 a tonne price for contracts that began in January.
"The Xstrata guys are in town at the moment and they have tabled an offer at $100 a tonne," said a source from Chubu with knowledge of the negotiations. Chubu are said to be holding out for $85-90 a tonne.
Last year’s contract prices were between $70 and $72 a tonne and represented a 44 per cent fall on the 2008-09 price. Sources suggest that Chubu will adopt a ‘wait and see’ stance and weigh up demand from other Asian customers such as China or India.
Xstrata was successful in achieving an $85 a tonne price for contracts that began in January.
Vale Denies Aquila Default Claim
Vale SA's Australian coal unit, Bowen Central Coal, has denied it is in default over infrastructure agreements for the A$1 billion Eagle Downs coking coal joint venture project with partner Aquila Resources Ltd.
The denial follows on from Aquila's statement on Tuesday that it had issued a default notice for the JV in a dispute over infrastructure arrangements. Aquila prefers to ship from Abbot Point from 2012-13 using the 69km rail line due to be completed by 2012, however Vale preference is to use the Dalrymple port, suggesting that lower costs would offset any delay. Using Dalrymple means the project will not ship any coal until 2015.
A spokesman for Vale put the dispute down to a difference of opinion: "Vale does not agree that we are in default. We and Aquila have different views about the best logistics solution for the JV. Always acting in the best interest of the JV, Vale tried to demonstrate to Aquila our views and conclusions but unfortunately Aquila refused to accept our point of view," a Vale spokesman said.
In a note to investors Patersons Securities analyst Alex Passmore said that the dispute was “clearly not positive for Aquila's relationship with Vale." The matter is now likely to go to arbitration. Aquila has set a deadline of Friday for the issue to be resolved so that contracts for the infrastructure can be signed by the end of March.
The two companies are also partners, along with AMCI Pty Ltd, in the A$2 billion Belvedere coal project, where Aquila holds a 24.5% stake and Vale 51% and Passmore believes that both companies are jockeying for position ahead of the release of the Belvedere feasibility study that is due shortly. Vale has an option to buy out its partners in Belvedere at “fair market value in the future” according to Aquila. If Vale is found to be in default then Aquila may try to buy out its share in the Eagle Downs project. It is likely to be backed in this regard by Chinese steel maker, Baosteel, who own a 15% stake in Aquila.
Meanwhile Queensland Rail has said that the billion-dollar rail link from the Bowen Coal basin to Abbot Point will not be jeopardised if the Aquila/Vale JV does ship through Dalrymple. "We have a number of customers for the GAP project, including the Northern Missing Link, and at this stage the project remains committed to proceeding, with construction expected to start in early April," spokesman Mike Carter said.
"We have a range of customers, our project is on schedule, it's aligned to a 50-million-tonne per annum project and we'll have that ready to go in early 2012."
The denial follows on from Aquila's statement on Tuesday that it had issued a default notice for the JV in a dispute over infrastructure arrangements. Aquila prefers to ship from Abbot Point from 2012-13 using the 69km rail line due to be completed by 2012, however Vale preference is to use the Dalrymple port, suggesting that lower costs would offset any delay. Using Dalrymple means the project will not ship any coal until 2015.
A spokesman for Vale put the dispute down to a difference of opinion: "Vale does not agree that we are in default. We and Aquila have different views about the best logistics solution for the JV. Always acting in the best interest of the JV, Vale tried to demonstrate to Aquila our views and conclusions but unfortunately Aquila refused to accept our point of view," a Vale spokesman said.
In a note to investors Patersons Securities analyst Alex Passmore said that the dispute was “clearly not positive for Aquila's relationship with Vale." The matter is now likely to go to arbitration. Aquila has set a deadline of Friday for the issue to be resolved so that contracts for the infrastructure can be signed by the end of March.
The two companies are also partners, along with AMCI Pty Ltd, in the A$2 billion Belvedere coal project, where Aquila holds a 24.5% stake and Vale 51% and Passmore believes that both companies are jockeying for position ahead of the release of the Belvedere feasibility study that is due shortly. Vale has an option to buy out its partners in Belvedere at “fair market value in the future” according to Aquila. If Vale is found to be in default then Aquila may try to buy out its share in the Eagle Downs project. It is likely to be backed in this regard by Chinese steel maker, Baosteel, who own a 15% stake in Aquila.
Meanwhile Queensland Rail has said that the billion-dollar rail link from the Bowen Coal basin to Abbot Point will not be jeopardised if the Aquila/Vale JV does ship through Dalrymple. "We have a number of customers for the GAP project, including the Northern Missing Link, and at this stage the project remains committed to proceeding, with construction expected to start in early April," spokesman Mike Carter said.
"We have a range of customers, our project is on schedule, it's aligned to a 50-million-tonne per annum project and we'll have that ready to go in early 2012."
Gindalbie, Anshan Sign Co-operation Deal
Australian iron ore miner, Gindalbie Metals and its Chinese shareholder Anshan Iron and Steel Group (Ansteel), have taken their co-operation a stage further with a deal to develop metallurgical coal, manganese, chromite and nickel projects, and pellet plants and steel mills in Australia.
Gindalbie and Ansteel currently co-operate on an iron ore project at Karara in Western Australia.
"The assets to be targeted will primarily be in the carbon steel materials sector ... as well as downstream processing opportunities such as pellet plants and steel mills," Gindalbie said in a statement on Wednesday.
The statement added: "Ansteel will contribute its extensive experience as a global iron ore and steel company and access to capital to potential joint development opportunities which can provide it with long-term sources of supply of raw materials from Australia. Gindalbie will contribute its geological and resource project expertise, contacts and knowledge base within the Australian resource sector to actively identify, explore and develop quality resource projects."
Gindalbie managing director, Garret Dixon, said the two partners had already identified several opportunities and will be stepping up their search in the months ahead.
Last year Ansteel and the West Australian government agreed to undertake a feasibility study to construct the state’s first steel mill at the Oakajee industrial estate near Geraldton, which is centred on a new deep water export port. Land clearing for the project is well advanced and exports are slated to commence in 2011.
Ansteel is Gindalbie's largest shareholder with a 36.2 per cent stake.
Gindalbie and Ansteel currently co-operate on an iron ore project at Karara in Western Australia.
"The assets to be targeted will primarily be in the carbon steel materials sector ... as well as downstream processing opportunities such as pellet plants and steel mills," Gindalbie said in a statement on Wednesday.
The statement added: "Ansteel will contribute its extensive experience as a global iron ore and steel company and access to capital to potential joint development opportunities which can provide it with long-term sources of supply of raw materials from Australia. Gindalbie will contribute its geological and resource project expertise, contacts and knowledge base within the Australian resource sector to actively identify, explore and develop quality resource projects."
Gindalbie managing director, Garret Dixon, said the two partners had already identified several opportunities and will be stepping up their search in the months ahead.
Last year Ansteel and the West Australian government agreed to undertake a feasibility study to construct the state’s first steel mill at the Oakajee industrial estate near Geraldton, which is centred on a new deep water export port. Land clearing for the project is well advanced and exports are slated to commence in 2011.
Ansteel is Gindalbie's largest shareholder with a 36.2 per cent stake.
Arehada Mining Sells Chinese Operating Subsidiary To Shanjin Mining
Toronto-quoted Chinese mining company is being bought by the Shandong-based mining company, Shanjin Mining Corporation. Under the terms of the agreement the Barbados-based subsidiary of the TSX-quoted company is to sell its shares in the Chinese operating subsidiary to Shanjin Mining.
The agreement will take effect upon the regulatory approval of authorities in the Inner Mongolia Autonomous Region and Shandong Province of China.
Arehada is engaged in the exploration, development, extraction and refining of base metals, primarily lead, zinc and silver in Inner Mongolia.
The agreement will take effect upon the regulatory approval of authorities in the Inner Mongolia Autonomous Region and Shandong Province of China.
Arehada is engaged in the exploration, development, extraction and refining of base metals, primarily lead, zinc and silver in Inner Mongolia.
Macarthur Coal Profits Down 63 Per Cent
Australian coal miner Macarthur Coal has reported a 63 per cent fall in first-half profits on lower coal prices.
Net profits fell to $39.6 million for the six months ended December 31, down from $106.9m a year earlier. However, the profit was within analyst guidelines of $37-42 million. The company said that weaker coal prices knocked $180.7m off the bottom line, offsetting higher production volume and lower costs.
Chief Executive Nicole Hollows told analysts that she is optimistic about contract coal prices, with Chinese demand set to drive prices higher.
Some of the major producers such as BHP Billiton are trying to move to quarterly pricing, although steel makers in Japan are said to be resisting the idea preferring to remain with annual contracts.
"We understand that the pricing that has been tabled in Japan is above US$200 a (metric) ton and is similar to where the spot price currently is into China and India," she told analysts.
Macarthur's pulverized coal is usually sold at a discount of between 20% and 30% to contract coking coal prices but Ms Hollows is hopeful that market conditions might allow Macarthur to reduce that discount this year.
Ms Hollows said about 28% of Macarthur's sales in the first half were to China but that there were no long-term contracts in place and that all these sales had been at spot price.
Macarthur owns two coal mines in Queensland’s Bowen Basin and Ms Hollows said the company is on track to produce 5 million tonnes of coal this year.
Net profits fell to $39.6 million for the six months ended December 31, down from $106.9m a year earlier. However, the profit was within analyst guidelines of $37-42 million. The company said that weaker coal prices knocked $180.7m off the bottom line, offsetting higher production volume and lower costs.
Chief Executive Nicole Hollows told analysts that she is optimistic about contract coal prices, with Chinese demand set to drive prices higher.
Some of the major producers such as BHP Billiton are trying to move to quarterly pricing, although steel makers in Japan are said to be resisting the idea preferring to remain with annual contracts.
"We understand that the pricing that has been tabled in Japan is above US$200 a (metric) ton and is similar to where the spot price currently is into China and India," she told analysts.
Macarthur's pulverized coal is usually sold at a discount of between 20% and 30% to contract coking coal prices but Ms Hollows is hopeful that market conditions might allow Macarthur to reduce that discount this year.
Ms Hollows said about 28% of Macarthur's sales in the first half were to China but that there were no long-term contracts in place and that all these sales had been at spot price.
Macarthur owns two coal mines in Queensland’s Bowen Basin and Ms Hollows said the company is on track to produce 5 million tonnes of coal this year.
Tuesday, February 23, 2010
Pike River Reports $14 million H1 Loss
Pike River Coal, New Zealand’s only listed coal miner, posted a $14.1 million first-half loss on Wednesday which, the company said, reflects the mine’s development phase.
The loss to 31 December 2009 compared to a $9.55 million loss for the same period last year and includes a $4.3 million unrealised exchange gain (relating to currency movements on the USD convertible bond), a $3.8 million depreciation and amortisation charge and $2.6 million of interest expenses.
Total investment in mine assets was $279.3 million including a $14.6 million investment was made in mine assets during the period.
Chief executive Gordon Ward commented: “Once hydro-mining is underway in the July-September 2010 quarter, the typical export shipment size of premium hard coking coal will be approximately 60,000 tonnes. Once full production rates from hydro-mining are achieved, the mine is expected to produce an average of approximately 1 million tonnes of premium hard coking coal a year.”
The company is also to raise $50 million in an equity issue. The company had suggested in its quarterly report last October that it needed $20 million in working capital. Biggest shareholder New Zealand Oil and Gas will refinance its existing $US28.9 million ($42m) bond facility, if shareholders approve. NZOG is to subscribe to its 29.5% interest in the rights issue and will also have a two-year option to buy Pike River coking coal at annually-negotiated market prices up to the existing un-contracted amount of coal to March 2013 and up to 30% of annual production for the rest of the mine’s life. Pike River said this would not affect contracts with Asian customers and it would still be able to sell on the spot market.
The new convertible bond will allow Pike River to repay its Liberty Harbor bond facility of $US27.5 million.
Last week Pike River despatched its first shipment of coal to India.
The loss to 31 December 2009 compared to a $9.55 million loss for the same period last year and includes a $4.3 million unrealised exchange gain (relating to currency movements on the USD convertible bond), a $3.8 million depreciation and amortisation charge and $2.6 million of interest expenses.
Total investment in mine assets was $279.3 million including a $14.6 million investment was made in mine assets during the period.
Chief executive Gordon Ward commented: “Once hydro-mining is underway in the July-September 2010 quarter, the typical export shipment size of premium hard coking coal will be approximately 60,000 tonnes. Once full production rates from hydro-mining are achieved, the mine is expected to produce an average of approximately 1 million tonnes of premium hard coking coal a year.”
The company is also to raise $50 million in an equity issue. The company had suggested in its quarterly report last October that it needed $20 million in working capital. Biggest shareholder New Zealand Oil and Gas will refinance its existing $US28.9 million ($42m) bond facility, if shareholders approve. NZOG is to subscribe to its 29.5% interest in the rights issue and will also have a two-year option to buy Pike River coking coal at annually-negotiated market prices up to the existing un-contracted amount of coal to March 2013 and up to 30% of annual production for the rest of the mine’s life. Pike River said this would not affect contracts with Asian customers and it would still be able to sell on the spot market.
The new convertible bond will allow Pike River to repay its Liberty Harbor bond facility of $US27.5 million.
Last week Pike River despatched its first shipment of coal to India.
Tara Minerals To Commence Production At San Felipe Vein
Tara Minerals has announced that is to advance the San Felipe gold and silver vein into production. The company has commenced a mine development plan and is enhancing the current mill design to incorporate the production of Gold and Silver concentrates. To date approximately 800 tonnes of material has been mined from San Felipe.
San Felipe is a Gold and Silver quartz vein located 1.5 km southeast of the Don Roman mine and mill near the town of Choix in Sinaloa state, Mexico. Recent channel samples returned an average grade of 10.06 grams per tonne Gold and 149.85 grams per tonne Silver.
The Don Roman mill is currently processing silver, zinc, and lead at a rate of 240 tonnes per day, which will be expanded to 360 tonnes per day by commissioning a third circuit. Further expansion will give a total plant production capacity of 660 tonnes per day. The expansion projects are anticipated to begin on 1 April this year and will be completed within nine months. The processing and sale of silver, zinc and lead concentrate will continue during the expansion work.
Tara Minerals President Francis Biscan Jr said "With the strong economics of the San Felipe Gold and Silver vein and the strategic location of this structure to our existing plant, we expect to achieve an expeditious return on investment. With the development of San Felipe, we will add to the diversity of metals produced, add substantial cash flow beyond our original expectations, and give our shareholders leverage to the Gold price."
San Felipe is a Gold and Silver quartz vein located 1.5 km southeast of the Don Roman mine and mill near the town of Choix in Sinaloa state, Mexico. Recent channel samples returned an average grade of 10.06 grams per tonne Gold and 149.85 grams per tonne Silver.
The Don Roman mill is currently processing silver, zinc, and lead at a rate of 240 tonnes per day, which will be expanded to 360 tonnes per day by commissioning a third circuit. Further expansion will give a total plant production capacity of 660 tonnes per day. The expansion projects are anticipated to begin on 1 April this year and will be completed within nine months. The processing and sale of silver, zinc and lead concentrate will continue during the expansion work.
Tara Minerals President Francis Biscan Jr said "With the strong economics of the San Felipe Gold and Silver vein and the strategic location of this structure to our existing plant, we expect to achieve an expeditious return on investment. With the development of San Felipe, we will add to the diversity of metals produced, add substantial cash flow beyond our original expectations, and give our shareholders leverage to the Gold price."
Aquila Resources JV On Hold In Disagreement Over Infrastructure
Australian miner Aquila Resources’ coking coal joint venture with Brazilian partner Vale could be held up as the two parties sort out a difference of opinion over infrastructure.
Initially the preferred option was to use the Abbot Point coal terminal from which shipments could be made from 2012-13. The JV has been offered 4 million tonnes a year at the expanded facility, though this was subject to an agreement being concluded by the end of the first quarter of this year. Queensland Rail has selected the JV as a foundation customer for its Goonyella-Abbot Point Expansion Project, which will allow coal trains originating in Central Queensland, south of Goonyella to be directed to the Abbot Point terminal.
On Tuesday Aquila released a statement setting out its preference for Abbot Point but pointing out that in order for this option to be pursued the matter had to be resolved with Vale subsidiary Bowen Central Coal by close of business on Friday. Aquila said on Tuesday morning that it considered Bowen Central Coal’s stance a default under the joint venture agreement and has issued a default notice. BCC does not agree it is a default.
Should Vale pull out of the agreement it is highly likely that Baosteel, China’s biggest steelmaker and a 15 per cent shareholder in Aquila would back the company should it need to buy out Vale’s share of the joint venture.
Eagle Downs will be developed as an underground mine targeting 4.6Mtpa of hard coking coal from a single longwall and up to 8Mtpa once a second longwall is installed.
Initially the preferred option was to use the Abbot Point coal terminal from which shipments could be made from 2012-13. The JV has been offered 4 million tonnes a year at the expanded facility, though this was subject to an agreement being concluded by the end of the first quarter of this year. Queensland Rail has selected the JV as a foundation customer for its Goonyella-Abbot Point Expansion Project, which will allow coal trains originating in Central Queensland, south of Goonyella to be directed to the Abbot Point terminal.
On Tuesday Aquila released a statement setting out its preference for Abbot Point but pointing out that in order for this option to be pursued the matter had to be resolved with Vale subsidiary Bowen Central Coal by close of business on Friday. Aquila said on Tuesday morning that it considered Bowen Central Coal’s stance a default under the joint venture agreement and has issued a default notice. BCC does not agree it is a default.
Should Vale pull out of the agreement it is highly likely that Baosteel, China’s biggest steelmaker and a 15 per cent shareholder in Aquila would back the company should it need to buy out Vale’s share of the joint venture.
Eagle Downs will be developed as an underground mine targeting 4.6Mtpa of hard coking coal from a single longwall and up to 8Mtpa once a second longwall is installed.
WISCO Receives Approval For Purchase Of MMX Stake
Wuhan Iron and Steel Company (WISCO), China's third biggest steel maker, will complete its acquisition of a stake in Brazilian iron ore miner MMX on 26 February. The company will then commence the construction of a steel mill in Brazil, the first overseas project for a Chinese steel company.
WISCO is paying US$400 million for a 21% stake in the enlarged share capital of MMX. The funds will be used to construct the mill, which will have a capacity of 5 million tons per annum and will be located in the new port of Acu, north of Rio de Janeiro. The purchase of the MMX stake will enable WISCO to succeed in its primary aim of securing iron ore resources.
The deal follows a memorandum of understanding WISCO and MMX signed in May 2009, which includes a 20-year contract for the sale and purchase of iron ore.
WISCO is paying US$400 million for a 21% stake in the enlarged share capital of MMX. The funds will be used to construct the mill, which will have a capacity of 5 million tons per annum and will be located in the new port of Acu, north of Rio de Janeiro. The purchase of the MMX stake will enable WISCO to succeed in its primary aim of securing iron ore resources.
The deal follows a memorandum of understanding WISCO and MMX signed in May 2009, which includes a 20-year contract for the sale and purchase of iron ore.
BHP Wants 55 Per Cent Coking Coal Price Rise
Japanese steelmakers have rejected BHP’s proposed coking coal price hike in the April-June quarter, the Nikkei business daily reported on Tuesday.
BHP has proposed a price of $200 per tonne for the quarter, a rise of 55% over a year ago, but it has yet to offer an annual contract price, the paper reported. Japanese steelmakers are reported as saying that the price is too high and that they cannot evaluate it without an annual contract. The steelmakers are resisting quarterly contracts on the grounds of volatility, saying that would hurt the business of manufacturers, their biggest customers.
Spot coking coal has recently been traded at about $220-$230 a tonne on the back of expanded steel output in Asia amid a government-incentive backed consumption boom.
BHP has proposed a price of $200 per tonne for the quarter, a rise of 55% over a year ago, but it has yet to offer an annual contract price, the paper reported. Japanese steelmakers are reported as saying that the price is too high and that they cannot evaluate it without an annual contract. The steelmakers are resisting quarterly contracts on the grounds of volatility, saying that would hurt the business of manufacturers, their biggest customers.
Spot coking coal has recently been traded at about $220-$230 a tonne on the back of expanded steel output in Asia amid a government-incentive backed consumption boom.
Losses Rise At International Ferro
South African ferrochrome producer International Ferro has reported increased losses as a combination of lower ferrochrome prices and a stronger Rand outweighed higher volumes.
Losses for the six months to December 2009 were R145m, up from R27m in the December 2008 half-year. In the previous six months losses were R429m.
Revenues fell 14% to R452m for the six months to December 2009, though this was up 77% on the previous six months.
There was a loss before tax of R145m in the December 2009 half, compared to a R27m loss in the December 2008 half. Losses in the previous six months were R429m. There is no interim dividend.
Sales volumes increased to 71,000 tonnes, up 35% on the June 2009 half, while production volumes increased by 4% to 95,000 tonnes as furnaces operated at full capacity for the half-year.
Meanwhile CEO David Kovarsky has suggested that Ferrochrome contract prices may rise as much as 29 percent in the second quarter as demand improves citing a tightness of supply. Mr Kovarsky said he expecs the European benchmark contract prices may rise to between $1.20 and $1.30 a pound from $1.01 a pound this quarter.
Losses for the six months to December 2009 were R145m, up from R27m in the December 2008 half-year. In the previous six months losses were R429m.
Revenues fell 14% to R452m for the six months to December 2009, though this was up 77% on the previous six months.
There was a loss before tax of R145m in the December 2009 half, compared to a R27m loss in the December 2008 half. Losses in the previous six months were R429m. There is no interim dividend.
Sales volumes increased to 71,000 tonnes, up 35% on the June 2009 half, while production volumes increased by 4% to 95,000 tonnes as furnaces operated at full capacity for the half-year.
Meanwhile CEO David Kovarsky has suggested that Ferrochrome contract prices may rise as much as 29 percent in the second quarter as demand improves citing a tightness of supply. Mr Kovarsky said he expecs the European benchmark contract prices may rise to between $1.20 and $1.30 a pound from $1.01 a pound this quarter.
Lundin Reports Increase In Copper Reserves
Lundin Mining Corporation has reported an increase of 44 per cent in the copper reserve at its Neves-Corvo copper mine in Portugal as at December 31, 2009.
The company reported measured and indicated copper resources of approximately 160,000 tonnes of contained copper, a figure roughly equivalent to two years of production.
At Tenke Fungurume in the Democratic Republic of Congo – in which Lundin owns a stake of 24.75% and which is operated by Freeport-McMoRan Copper & Gold - exploration during the 2009 calendar year has resulted in an increase in proven and probable reserves, Lundin’s share of which is 1.1 million tonnes of contained copper. Lundin's share of the Tenke cobalt reserves are reported to be 444,000 tonnes.
Lundin also reported proven and probable reserves of 2.1 million tonnes of copper, 4.9 million tonnes of zinc, 1.4 million tonnes of lead, 169 million ounces of silver, 48,000 tonnes of nickel and 110 tonnes of cobalt.
Total Lundin measured and indicated mineral resources were reported at 3.9 million tonnes of copper, 6.9 million tonnes of zinc, 2 million tonnes of lead, 261 million ounces of silver, 75 tonnes of nickel, and 231 million tonnes of cobalt.
President and CEO, Phil Wright, said "Our goal this past year was to increase copper resources at Neves-Corvo and the increases we have seen continue to justify this on-going investment, and our belief that Neves-Corvo remains under-explored. Equally pleasing is the growth of the mineral reserves at Tenke and the significant increase in the contained copper and cobalt in reserves,"
Lundin’s quarterly results are due to be released on Thursday of this week.
The company reported measured and indicated copper resources of approximately 160,000 tonnes of contained copper, a figure roughly equivalent to two years of production.
At Tenke Fungurume in the Democratic Republic of Congo – in which Lundin owns a stake of 24.75% and which is operated by Freeport-McMoRan Copper & Gold - exploration during the 2009 calendar year has resulted in an increase in proven and probable reserves, Lundin’s share of which is 1.1 million tonnes of contained copper. Lundin's share of the Tenke cobalt reserves are reported to be 444,000 tonnes.
Lundin also reported proven and probable reserves of 2.1 million tonnes of copper, 4.9 million tonnes of zinc, 1.4 million tonnes of lead, 169 million ounces of silver, 48,000 tonnes of nickel and 110 tonnes of cobalt.
Total Lundin measured and indicated mineral resources were reported at 3.9 million tonnes of copper, 6.9 million tonnes of zinc, 2 million tonnes of lead, 261 million ounces of silver, 75 tonnes of nickel, and 231 million tonnes of cobalt.
President and CEO, Phil Wright, said "Our goal this past year was to increase copper resources at Neves-Corvo and the increases we have seen continue to justify this on-going investment, and our belief that Neves-Corvo remains under-explored. Equally pleasing is the growth of the mineral reserves at Tenke and the significant increase in the contained copper and cobalt in reserves,"
Lundin’s quarterly results are due to be released on Thursday of this week.
Havila Commences Drilling At Lilydale
Havilah Resources has started drilling at the Lilydale iron ore project in South Australia with ten shallow percussion reverse circulation holes planned.
The holes will test the core of the large coincident gravity and magnetic anomaly associated with a poorly exposed portion of the Braemar Iron Formation.
According to Havilah Resources, the first hole intersected a 40m downhole width of iron and magnetite from which a surface sample containing 58.6% Fe has been previously collected.
The Lilydale project lies 50 km southeast of Yunta on the Transcontinental Railway, 200 km east of Port Pirie.
Havilah aims to become a significant producer of copper, gold, cobalt and molybdenum from its 100% owned Kalkaroo, Mutooroo and Benagerie projects, which are at an advanced stage of feasibility. It holds more than 6,500 km2 of surrounding tenements in the highly mineralized Curnamona Province of South Australia, where it maintains an active drilling program.
Deposits of iron ore, tin and hard rock uranium have been drilled, with good exploration upside.
The holes will test the core of the large coincident gravity and magnetic anomaly associated with a poorly exposed portion of the Braemar Iron Formation.
According to Havilah Resources, the first hole intersected a 40m downhole width of iron and magnetite from which a surface sample containing 58.6% Fe has been previously collected.
The Lilydale project lies 50 km southeast of Yunta on the Transcontinental Railway, 200 km east of Port Pirie.
Havilah aims to become a significant producer of copper, gold, cobalt and molybdenum from its 100% owned Kalkaroo, Mutooroo and Benagerie projects, which are at an advanced stage of feasibility. It holds more than 6,500 km2 of surrounding tenements in the highly mineralized Curnamona Province of South Australia, where it maintains an active drilling program.
Deposits of iron ore, tin and hard rock uranium have been drilled, with good exploration upside.
Profits Fall 59 Per Cent At Gloucester Coal
Gloucester Coal Ltd has posted a 59 per cent fall in net profit for the first half of 2009/10. Net profit for the first half was $18.099 million, down from $44 million in the first half of 2008/09, on revenue of $103.661 million, down 24 per cent on the corresponding period last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) were $25.5 million, down from $46 million.
The company sold 914,000 tonnes of coal in the first-half of 2009/10, a slight drop compared to the 921,000 tonnes in the prior corresponding period.
"We are pleased to have achieved this strong financial result despite the volatile economic conditions," Gloucester Coal chief executive officer Barry Tudor said in a statement. "Although the sales price of our semi-hard coking coal fell by over 60 per cent from last year, the company was able to maintain healthy volumes and solid margins."
Mr Tudor said that demand was still strong and in line with the company’s expectations and that prices were recovering: "Spot hard coking coal sales have been reported at prices substantially higher than those seen in the previous financial year and the company recently entered into a contract to supply coal at US$164 per tonne."
The company will not be paying a dividend.
The company sold 914,000 tonnes of coal in the first-half of 2009/10, a slight drop compared to the 921,000 tonnes in the prior corresponding period.
"We are pleased to have achieved this strong financial result despite the volatile economic conditions," Gloucester Coal chief executive officer Barry Tudor said in a statement. "Although the sales price of our semi-hard coking coal fell by over 60 per cent from last year, the company was able to maintain healthy volumes and solid margins."
Mr Tudor said that demand was still strong and in line with the company’s expectations and that prices were recovering: "Spot hard coking coal sales have been reported at prices substantially higher than those seen in the previous financial year and the company recently entered into a contract to supply coal at US$164 per tonne."
The company will not be paying a dividend.
Monday, February 22, 2010
India Imposes Moratorium On Goa Mining
India’s minister for the environment and forests, Jairam Ramesh, has told the Goa chief minister Digambar Kamat that the ministry has “imposed a moratorium on consideration of mining proposals for environmental clearance… till the mineral policy for the state of Goa is finalised.”
Ramesh has also called for a comprehensive environmental impact assessment of current mining activities and for those which permissions have been given over the last few years. The Nagpur-based National Environmental Engineering Research Institute is to carry out the study.
There are about 100 operational iro -ore and manganese ore mines in Goa’s hinterland which export nearly 33 million tons of ore annually.
Ramesh has also called for a comprehensive environmental impact assessment of current mining activities and for those which permissions have been given over the last few years. The Nagpur-based National Environmental Engineering Research Institute is to carry out the study.
There are about 100 operational iro -ore and manganese ore mines in Goa’s hinterland which export nearly 33 million tons of ore annually.
Bolivia To Build Two New Zinc Plants
Bolivia is to build two new zinc plants in US$500 million over the next three years.
The plants, in Oruro and Potosi are expected to produce 200 tonnes of zinc each year.
The Bolivian Mining Corporation, Comibol, will bid for the building of both plants, which are expected to begin production in 2013.
Bolivia’s zinc exports rose from 385 tonnes in 2008 to 429 tonnes last year bringing in US$685 million in revenues, though a fall in the price of zinc meant that this figure was 7 per cent lower than in 2008.
The plants, in Oruro and Potosi are expected to produce 200 tonnes of zinc each year.
The Bolivian Mining Corporation, Comibol, will bid for the building of both plants, which are expected to begin production in 2013.
Bolivia’s zinc exports rose from 385 tonnes in 2008 to 429 tonnes last year bringing in US$685 million in revenues, though a fall in the price of zinc meant that this figure was 7 per cent lower than in 2008.
Iron Ore Provisional Benchmark Is $84 a Tonne - Report
China’s People’s Daily is quoting “foreign media” reporting that China’s five major steelmakers and the big three iron ore miners as having increased a cost and freight price of $84 per ton for iron ore. This is a rise of 35 per cent over the $62 in 2009, although the paper is quoting an increase of 40 per cent.
The paper also quotes sources within the Chinese steel industry that suggest this is only a provisional price and that talks are continuing.
The cost and freight (CIF) of Indian 63.5 percent grade iron ore powder is 131 to 133 U.S. dollars per ton, approximately 80 percent higher than the "initial price" that Japanese steel mills received in their long-term contracts with Rio Tinto.
The paper also quotes sources within the Chinese steel industry that suggest this is only a provisional price and that talks are continuing.
The cost and freight (CIF) of Indian 63.5 percent grade iron ore powder is 131 to 133 U.S. dollars per ton, approximately 80 percent higher than the "initial price" that Japanese steel mills received in their long-term contracts with Rio Tinto.
L&M Energy Approves Acquisition
New Zealand’s L&M Energy said its shareholders have approved the acquisition of L&M Coal Seam Gas at a special general meeting in Wellington today.
The merged company owns six coal seam gas permits, two in the Waikato Basin on New Zealand’s North Island and four in basins on the South Island.
The merged company owns six coal seam gas permits, two in the Waikato Basin on New Zealand’s North Island and four in basins on the South Island.
Newcastle Coal Exports Up 15 Per Cent From A Week Ago
Coal exports from the port at Newcastle, Australia, the world's largest coal export terminal, jumped 15 percent from a week ago to 2.13 million tonnes; however this is short of the weekly target of 2.28 million tonnes and could force the port’s operator to cut export quotas for the second quarter.
Quotas for the rest of Q1 have already been cut by 1.7 million tonnes in an attempt to reduce logjams at the terminal. Ship queues fell to 47, of which 14 were due to mines having insufficient coal. Queues are expected to be 44 by the end of this month.
Quotas for the rest of Q1 have already been cut by 1.7 million tonnes in an attempt to reduce logjams at the terminal. Ship queues fell to 47, of which 14 were due to mines having insufficient coal. Queues are expected to be 44 by the end of this month.
Rio Tinto's Pilbara Iron Ore Project Starts Production
Rio Tinto Ltd's billion-dollar Mesa A/Warramboo mine in Western Australia has begun producing iron ore more than two years after construction began on the project. Rio has a 53 per cent stake in the mine.
Initial production of 20 million tonnes per annum will increase to 25 million tonnes by 2011, the company said. The deposit is estimated to have high-grade reserves of 249 million tonnes, with a mine life of 11 years.
Initial production of 20 million tonnes per annum will increase to 25 million tonnes by 2011, the company said. The deposit is estimated to have high-grade reserves of 249 million tonnes, with a mine life of 11 years.
NMDC To Take 50 Per Cent Stake In Brazilian Firm
Indian state-owned miner, NMDC has signed a non-disclosure agreement with the Ferrous group, a multinational consolidator of iron ore, to buy a 50% stake in its Brazilian operations for $2.5 billion.
The Ferrous group will issue fresh shares worth $2.5 billion to NMDC over the next few years. The funds will be used for developing mines and building infrastructure.
The partners will divest a 20% stake in the joint venture to raise another $1 billion and there are plans to list the venture on the London Stock Exchange. This will have the effect of diluting NMDC’s down to 40%.
The Brazilian venture has around 3 billion tonne iron ores reserves with 35.6% grade Fe content, plus an estimated 1.6 billion tonnes in reserves of 30% Fe mines. Once operational, the mines could produce about 25 million tonne of iron ore initially that could be converted into 10 million tonne of high 67% Fe grade ore concentrate through beneficiation.
The group is developing a private sea port in Brazil to export its iron ore products. The mines are located 300 km from the sea, close to the nation’s capital, Brasilia.
A senior official with NMDC said the company is not looking at taking complete control of any foreign firm. “Joining hands with existing partners help in mitigating the risk,” he said. NMDC is also exploring joint mining opportunities with ArcelorMittal in Africa and is collaborating with Rio Tinto on exploration activities.
The Ferrous group will issue fresh shares worth $2.5 billion to NMDC over the next few years. The funds will be used for developing mines and building infrastructure.
The partners will divest a 20% stake in the joint venture to raise another $1 billion and there are plans to list the venture on the London Stock Exchange. This will have the effect of diluting NMDC’s down to 40%.
The Brazilian venture has around 3 billion tonne iron ores reserves with 35.6% grade Fe content, plus an estimated 1.6 billion tonnes in reserves of 30% Fe mines. Once operational, the mines could produce about 25 million tonne of iron ore initially that could be converted into 10 million tonne of high 67% Fe grade ore concentrate through beneficiation.
The group is developing a private sea port in Brazil to export its iron ore products. The mines are located 300 km from the sea, close to the nation’s capital, Brasilia.
A senior official with NMDC said the company is not looking at taking complete control of any foreign firm. “Joining hands with existing partners help in mitigating the risk,” he said. NMDC is also exploring joint mining opportunities with ArcelorMittal in Africa and is collaborating with Rio Tinto on exploration activities.
Railway Rake Shortage Hits More Industries In Bhutan
The Association Of Bhutanese Industries reports that the shortage of railway rakes to carry raw materials from India to Bhutan is now affecting other industries with the ferroalloy and calcium carbide industries now hit. These industries import charcoal mostly from states in southern India, such as Tamil Nadu and Andhra Pradesh.
The delay has meant that raw materials are now taking up to 20 days to arrive against seven to 10 days previously. Bringing in raw materials by trucks is not an option because of frequent strikes and mechanical problems faced on the way.
“We’re expecting the government to take up the matter urgently as, irrespective of the status of the plant, the industrialist has to pay a fixed cost,” said the ABI secretary general, Letho. However there are fears amongst some industrialists that plants may have to close if the issue is not addressed.
The delay has meant that raw materials are now taking up to 20 days to arrive against seven to 10 days previously. Bringing in raw materials by trucks is not an option because of frequent strikes and mechanical problems faced on the way.
“We’re expecting the government to take up the matter urgently as, irrespective of the status of the plant, the industrialist has to pay a fixed cost,” said the ABI secretary general, Letho. However there are fears amongst some industrialists that plants may have to close if the issue is not addressed.
Saturday, February 20, 2010
India Iron Ore Exports Fall 11 Per Cent As Duty Takes Its Toll
India’s iron ore exports fell by 11 per cent in December as export duties imposed during the month took their toll. Chinese importers instead bought from Brazil and Australia.
According to data compiled by the Federation of Indian Mineral Industries, exports fell to 12.37 million tonnes (mt) in December 2009 compared to 13.85 mt in December 2008.
FIMI attributes the fall to the Indian government’s decision to levy an ad valorem export duty of 5 per cent on fines and 10 per cent on lumps, effective December 24, 2009 and the federation fears that exports will fall to ‘nil’ if the government increases the duty to 20 per cent. FIMI has urged the government to withdraw the export duty as domestic steel mills cannot fully use lumps hence there is a need for export.
For the current financial year FIMI estimated iron ore exports to be in the range of 104-106 mt. Total exports for the first nine months (April-December), recorded a rise of 15.15 per cent to 76.54 mt, against 66.47 mt in the comparable period last year.
According to data compiled by the Federation of Indian Mineral Industries, exports fell to 12.37 million tonnes (mt) in December 2009 compared to 13.85 mt in December 2008.
FIMI attributes the fall to the Indian government’s decision to levy an ad valorem export duty of 5 per cent on fines and 10 per cent on lumps, effective December 24, 2009 and the federation fears that exports will fall to ‘nil’ if the government increases the duty to 20 per cent. FIMI has urged the government to withdraw the export duty as domestic steel mills cannot fully use lumps hence there is a need for export.
For the current financial year FIMI estimated iron ore exports to be in the range of 104-106 mt. Total exports for the first nine months (April-December), recorded a rise of 15.15 per cent to 76.54 mt, against 66.47 mt in the comparable period last year.
Friday, February 19, 2010
Pike River Sends First Coal Shipment To India
New Zealand hard-coking coal miner, Pike River Coal, sent its first shipment of coal to India on Friday, a 20,000 tonne consignment worth $3.4 million shipped to Indian customer Gujarat NRE Ltd, which owns a 7.6% stake in Pike. GNRE is one of two Indian customers contracted to 55% of Pike's coal over its mine life.
CEO Gordon Ward said "It's a milestone day for us after some pretty intensive efforts." Pike has spent $270 million getting to this stage, $50 million of which were unexpected costs, forcing the miner to twice go back to its backers for more funds.
"It's a milestone day for us after some pretty intensive efforts," Mr Ward said, "we're very appreciative investors have kept their eye on the prize.”
CEO Gordon Ward said "It's a milestone day for us after some pretty intensive efforts." Pike has spent $270 million getting to this stage, $50 million of which were unexpected costs, forcing the miner to twice go back to its backers for more funds.
"It's a milestone day for us after some pretty intensive efforts," Mr Ward said, "we're very appreciative investors have kept their eye on the prize.”
Turkey's Ferroalloy Imports Fall 19 Per Cent In 2009
Turkey's ferroalloy imports fell by almost 19 percent in 2009. Total imports were 314,661 metric tons according to figures from the Turkish Statistical Institute (TUIK).
Ferromanganese imports were 46,760 metric tons, down 36.22 percent on 2008; ferrosilicon imports were 62,655 metric tons, down 14.54 percent; ferrosilicon-manganese imports were 193,324 metric tons, down 1.18 percent; and ferrochrome imports totalled 2,786 metric tons, down by 98.58 percent.
Ferroalloy imports from the CIS countries accounted for 77 percent of total ferroalloy imports, while imports from Europe constituted 9.6 percent and Asian countries 8.5 percent.
Ferromanganese imports were 46,760 metric tons, down 36.22 percent on 2008; ferrosilicon imports were 62,655 metric tons, down 14.54 percent; ferrosilicon-manganese imports were 193,324 metric tons, down 1.18 percent; and ferrochrome imports totalled 2,786 metric tons, down by 98.58 percent.
Ferroalloy imports from the CIS countries accounted for 77 percent of total ferroalloy imports, while imports from Europe constituted 9.6 percent and Asian countries 8.5 percent.
Anglo-American Profits Fall 53 Per Cent
Profits at mining giant Anglo American Plc fell 53% in 2009 as metals prices fell sharply as a result of the global economic downturn. The company also blamed falling demand, especially for its metallurgical coal and thermal coal.
The London-based firm reported full-year net profit of $2.42 billion, or $2.02 per share, compared with $5.22 billion, or $4.34 a share, in 2008.
Group revenue fell 25% to $24.6 billion from $32.9 billion.
The London-based firm reported full-year net profit of $2.42 billion, or $2.02 per share, compared with $5.22 billion, or $4.34 a share, in 2008.
Group revenue fell 25% to $24.6 billion from $32.9 billion.
Profits Fall At Fortescue Metals
Underlying first half profit at Australian iron ore producer, Fortescue Metals Group, fell in the first half of the year to $98 million, down from US$164 million in the previous corresponding period. Figures were affected by the revaluation of the Leucadia loan note, which resulted in a negative adjustment of US$55 million against a boost of US$1.4 billion in the previous year, however the fall was also due to lower average realised prices during the half, which fell to US$57.22 per dry metric ton from US$71.65 in the previous comparable period.
Revenue for the half year rose 17% on year to US$1.19 billion from a restated US$1.01 billion a year earlier. Earnings before interest, tax, depreciation and amortization were US$426 million for the half year ended Dec. 31, down from US$479 million a year earlier. The company isn't paying an interim dividend.
Fortescue also announced that it has pushed back expansion plans for its port and iron ore operations in the Pilbara region of Western Australia although it said that the date could be brought forward again if it sought external funding. The company had aimed for an annualised rate of 95 million tons a year from February 2012; it now aims for 92 million tons a year from April 2013.
Revenue for the half year rose 17% on year to US$1.19 billion from a restated US$1.01 billion a year earlier. Earnings before interest, tax, depreciation and amortization were US$426 million for the half year ended Dec. 31, down from US$479 million a year earlier. The company isn't paying an interim dividend.
Fortescue also announced that it has pushed back expansion plans for its port and iron ore operations in the Pilbara region of Western Australia although it said that the date could be brought forward again if it sought external funding. The company had aimed for an annualised rate of 95 million tons a year from February 2012; it now aims for 92 million tons a year from April 2013.
Tinkler Looking At Maules Creek Listing
Australian multimillionaire Nathan Tinkler is finalising plans to list his coal company, Ashton Resources, on the Australian Stock Exchange after completing the purchase of Rio Tinto's Maules Creek project. Mr Tinkler plans to raise up to $300 million in a partial initial public offering within six months.
The project, in the Gunnedah Basin in NSW, would need about $120m to develop and Mr Tinkler expects to maintain majority control.
"The Maules Creek project is one of Australia's few remaining `tier-one' coal development assets," said Mr Tinkler. "It ranks as a globally significant deposit of high-quality, low-ash, high-energy thermal coal and premium-quality semi-soft coking coal. Both the coking and thermal coal are a high-grade product and traditionally those products have found a home in Asia. The quality projects end up with the top Asian steel mills and we don't expect Maules Creek will be any different." he said.
The project, in the Gunnedah Basin in NSW, would need about $120m to develop and Mr Tinkler expects to maintain majority control.
"The Maules Creek project is one of Australia's few remaining `tier-one' coal development assets," said Mr Tinkler. "It ranks as a globally significant deposit of high-quality, low-ash, high-energy thermal coal and premium-quality semi-soft coking coal. Both the coking and thermal coal are a high-grade product and traditionally those products have found a home in Asia. The quality projects end up with the top Asian steel mills and we don't expect Maules Creek will be any different." he said.
Centennial Coal Hit By Falling Prices
First-half income at Australian coal producer Centennial Coal Co. fell 27 percent after a decline in the export prices the company said today in a statement. Net income dropped to A$31.1 million ($27.7 million) in the six months ended Dec. 31, while underlying profit declined to A$24.2 million, from A$50.7 million a year earlier. The company suffered from a 37 per cent drop in coal prices and an increase in the Australian dollar.
CEO Bob Cameron said that the company has made “substantial progress with the construction of Airly Mine and the Mandalong Haul Road, both of which will assist the group to achieve higher export sales at a time of strong demand and higher prices.” He added “Shareholders can look forward to an increased profit in the second-half.”
Centennial closed up 0.8 percent to A$3.82 in Sydney trading.
CEO Bob Cameron said that the company has made “substantial progress with the construction of Airly Mine and the Mandalong Haul Road, both of which will assist the group to achieve higher export sales at a time of strong demand and higher prices.” He added “Shareholders can look forward to an increased profit in the second-half.”
Centennial closed up 0.8 percent to A$3.82 in Sydney trading.
Timminco Signs Five-Year Silicon Metal Supply Deal
Timminco Ltd has secured contracts to supply about 90,000 tonnes of silicon metal over the next five years.
Subsidiary company Becancour Silicon Ltd will supply set base quantities of silicon metal between 2010 and 2014, subject to volume adjustments by the customer. Volume commitments can also be suspended for any year after 2010 if both parties cannot settle on pricing. The contract is with a long-standing customer, though Timminco has not divulged the customer’s name.
Subsidiary company Becancour Silicon Ltd will supply set base quantities of silicon metal between 2010 and 2014, subject to volume adjustments by the customer. Volume commitments can also be suspended for any year after 2010 if both parties cannot settle on pricing. The contract is with a long-standing customer, though Timminco has not divulged the customer’s name.
SAIL Looking For Overseas Coal Blocks
Steel Authority of India is in talks to acquire coking coal blocks in Australia, New Zealand, Mozambique and Indonesia to achieve its production targets, according to Chairman, Mr S.K. Roongta.
Speaking on the sidelines of “Global Steel 2020”, the Fifth International Conference on Steel and Steelmaking Raw Materials, he said “We are not looking at iron ore blocks but at coking coal blocks. We could acquire these blocks either on our own or through International Coal Ventures Pvt Ltd.”
SAIL’s aim is to secure around 40 per cent of its coking coal requirements through these acquisitions.
SAIL's steel production is expected to increase from 14 mtpa last year to 56 mtpa in 2020.
Speaking on the sidelines of “Global Steel 2020”, the Fifth International Conference on Steel and Steelmaking Raw Materials, he said “We are not looking at iron ore blocks but at coking coal blocks. We could acquire these blocks either on our own or through International Coal Ventures Pvt Ltd.”
SAIL’s aim is to secure around 40 per cent of its coking coal requirements through these acquisitions.
SAIL's steel production is expected to increase from 14 mtpa last year to 56 mtpa in 2020.
Thursday, February 18, 2010
Atlantic Coal terminates Maple Carpenter Creek Merger Talks
Atlantic Coal plc. has terminated talks with Maple Carpenter Creek, LLC about a merger of the two companies.
Atlantic announced in December that it had entered into an agreement to acquire the entire issued share capital of MCC and that it had agreed to make a working capital loan facility available to MCC of up to US$400,000. Talks took place regarding a revision of the terms of the agreement but the two parties have been unable to agree to revised terms.
To date Atlantic has advanced $300,000 to MCC in accordance with the loan facility.
Atlantic announced in December that it had entered into an agreement to acquire the entire issued share capital of MCC and that it had agreed to make a working capital loan facility available to MCC of up to US$400,000. Talks took place regarding a revision of the terms of the agreement but the two parties have been unable to agree to revised terms.
To date Atlantic has advanced $300,000 to MCC in accordance with the loan facility.
India's Indsil In Oman Ferrochrome Joint Venture
India’s Indsil Hydro Power and Manganese and its group sister company, Indsil Energy & Electrochemicals have entered into an arrangement with the Muscat Overseas Group in Oman to set up a form a 50:50 joint venture to set up a 75,000 tpy ferro chrome smelter in the Sultanate of Oman at a cost of US$30 million.
The project would have access to Muscat Overseas’ chrome ore assets in Oman. Indsil will provide the technology, operating and marketing expertise for the project. The share capital would be held equally by both the parties to the joint venture. The project is expected to be operational by the end of 2011.
The project would have access to Muscat Overseas’ chrome ore assets in Oman. Indsil will provide the technology, operating and marketing expertise for the project. The share capital would be held equally by both the parties to the joint venture. The project is expected to be operational by the end of 2011.
ENRC In $300 Million Zambian Takeover
Kazakh miner ENRC has paid $300 million to buy Dutch company Enya Holdings. Enya has a 9-% stake in the Chambishi copper and cobalt processing plant in Zambia. ENRC said in a statement on Thursday it hoped to cut costs by using the Chambishi plant in Zambia to process copper and cobalt produced in the Democratic Republic of Congo from a mine which the company bought last year.
The deal is being financed entirely from the company’s own cash resources.
"The acquisition of Chambishi accelerates the group's expansion in copper and cobalt and at a lower cost than would be required for new investment," said Mehmet Dalman, independent non-executive director. "The integrated copper and cobalt mining and smelting businesses of Chambishi and those in the DRC, when combined, should have an improved cost position over time."
ENRC plans to invest $80 million in Chambishi by 2011 to upgrade its facilities, which will boost annual capacity to 55,000 tonnes of copper cathode, more than twice its current level of 25,000 tonnes. The combined operation is expected to produce 130,000 tonnes of copper cathode a year and 12,000 tonnes of cobalt-contained metal salts and concentrates by 2012. The company said that building Chambishi’s facilities from scratch would take at least three years and would have cost more than it is paying for Enya.
Enya also owns 100% of Comit Resources FZE, a Dubai-based marketing and sales company that handles Chambishi's copper and cobalt sales.
Last September, ENRC bought Central African Mining and Exploration in a $955 million cash deal which diversified the firm into metals such as copper and into high-risk areas of Africa.
The deal is being financed entirely from the company’s own cash resources.
"The acquisition of Chambishi accelerates the group's expansion in copper and cobalt and at a lower cost than would be required for new investment," said Mehmet Dalman, independent non-executive director. "The integrated copper and cobalt mining and smelting businesses of Chambishi and those in the DRC, when combined, should have an improved cost position over time."
ENRC plans to invest $80 million in Chambishi by 2011 to upgrade its facilities, which will boost annual capacity to 55,000 tonnes of copper cathode, more than twice its current level of 25,000 tonnes. The combined operation is expected to produce 130,000 tonnes of copper cathode a year and 12,000 tonnes of cobalt-contained metal salts and concentrates by 2012. The company said that building Chambishi’s facilities from scratch would take at least three years and would have cost more than it is paying for Enya.
Enya also owns 100% of Comit Resources FZE, a Dubai-based marketing and sales company that handles Chambishi's copper and cobalt sales.
Last September, ENRC bought Central African Mining and Exploration in a $955 million cash deal which diversified the firm into metals such as copper and into high-risk areas of Africa.
Kumba Iron Ore Reports Earnings Up By 10 Per Cent
South African miner Kumba Iron Ore reported an increase in full-year earnings of 10 per cent to R23.4 billion, as export sales jumped 37% to 34.2 million tonnes. However, headline earnings per share fell to 21.82 rand ($2.86) from 23.02 rand in 2008, hit by a stronger rand against the U.S. dollar. Kumba said its operating profit remained highly sensitive to the rand/dollar exchange rate. The rand has risen by 20 percent since the start of 2009. Headline earnings are the main measure of profit in South Africa and strip out one-off, financial and non-trading items.
Kumba, Africa’s largest iron ore producer, saw an increase in exports to China of 130%. China now accounts for 75% of total exports. The company said it produced 41.9 million tonnes of iron ore last year, up from 36.7 million tonnes in 2008.
"Kumba is committed to a further increase in production volumes during 2010, with the continued ramp up of the Jig plant," the company said. "Although global steel demand is expected to return to growth in 2010, this is likely to be moderate and the sustainability of increase in demand outside of China remains uncertain," it added. Analysts expect exports to China to grow by 5% this year.
CEO Chris Griffith said " We expect demand for iron ore to rise further during 2010 as Chinese domestic iron ore production falls and a further recovery in steel markets outside of China, in our traditional markets, starts to take hold.”
Kumba is paying a final cash dividend of R7.40 per share, bringing the total cash dividend for 2009 to R14.60 per share. The company’s majority shareholder, Anglo American, reported that its 64% investment would generate underlying earnings of $490 million for the year ended 31 December 2009.
Kumba, Africa’s largest iron ore producer, saw an increase in exports to China of 130%. China now accounts for 75% of total exports. The company said it produced 41.9 million tonnes of iron ore last year, up from 36.7 million tonnes in 2008.
"Kumba is committed to a further increase in production volumes during 2010, with the continued ramp up of the Jig plant," the company said. "Although global steel demand is expected to return to growth in 2010, this is likely to be moderate and the sustainability of increase in demand outside of China remains uncertain," it added. Analysts expect exports to China to grow by 5% this year.
CEO Chris Griffith said " We expect demand for iron ore to rise further during 2010 as Chinese domestic iron ore production falls and a further recovery in steel markets outside of China, in our traditional markets, starts to take hold.”
Kumba is paying a final cash dividend of R7.40 per share, bringing the total cash dividend for 2009 to R14.60 per share. The company’s majority shareholder, Anglo American, reported that its 64% investment would generate underlying earnings of $490 million for the year ended 31 December 2009.
Cliffs Upgrades Iron Ore Sales Projections
Cliffs Natural Resources says that it expects to sell 25 million tons of iron ore in 2010. Increased demand has led to Cliffs to upgrade its previous estimate of 23 million tons.
The company also announced that 2009 pellet sales volume was 16.4 million tons, down from a record 22.7 million tons in 2008.
Full-year revenues for 2009 were $2.34 billion, down 35 percent from 2008. Revenue for the fourth quarter of 2009 fell 10 per cent to $821 million.
The company also announced that 2009 pellet sales volume was 16.4 million tons, down from a record 22.7 million tons in 2008.
Full-year revenues for 2009 were $2.34 billion, down 35 percent from 2008. Revenue for the fourth quarter of 2009 fell 10 per cent to $821 million.
Dundee Precious Metals Posts Q4 Profit
Canadian-based gold miner Dundee Precious Metals Inc. has announced a profit for the fourth quarter of C$3.7 million. This compares with a fourth quarter 2008 net loss of C$80.0 million.
For the year ended 31 December 2009, the Company had net earnings of C$5.0 million compared with a net loss of C$79.2 million in 2008.
Commenting on the unaudited results, President and CEO Jonathan Goldman said "A combination of strong metal prices and improved operating performance and efficiencies at Chelopech and Deno Gold contributed to solid earnings for 2009, which, when adjusted for a $6.4 million non-cash, tax-related valuation allowance, was $11.4 million. Construction of the mine/mill expansion at Chelopech is underway and on schedule for completion in the second half of 2011. In addition, underground exploration at the mine has identified two new ore zones and 1.43 million tonnes of Measured and Indicated Resource, more than offsetting the amount of ore mined during 2009."
DPM owns the Chelopech Mine, a gold/copper concentrate producer and the Krumovgrad gold project, a mining development project, both located in Bulgaria, and has a 95% stake in the Kapan Mine, a gold / copper / zinc concentrate producer in southern Armenia. In addition, DPM holds significant exploration and exploitation concessions in some of the larger gold-copper-silver mining regions in Serbia.
For the year ended 31 December 2009, the Company had net earnings of C$5.0 million compared with a net loss of C$79.2 million in 2008.
Commenting on the unaudited results, President and CEO Jonathan Goldman said "A combination of strong metal prices and improved operating performance and efficiencies at Chelopech and Deno Gold contributed to solid earnings for 2009, which, when adjusted for a $6.4 million non-cash, tax-related valuation allowance, was $11.4 million. Construction of the mine/mill expansion at Chelopech is underway and on schedule for completion in the second half of 2011. In addition, underground exploration at the mine has identified two new ore zones and 1.43 million tonnes of Measured and Indicated Resource, more than offsetting the amount of ore mined during 2009."
DPM owns the Chelopech Mine, a gold/copper concentrate producer and the Krumovgrad gold project, a mining development project, both located in Bulgaria, and has a 95% stake in the Kapan Mine, a gold / copper / zinc concentrate producer in southern Armenia. In addition, DPM holds significant exploration and exploitation concessions in some of the larger gold-copper-silver mining regions in Serbia.
Wednesday, February 17, 2010
Barrick Sues Over El Morro Sale
The world's largest gold miner, Toronto-based Barrick Gold, has filed a lawsuit in Ontario to try to halt Goldcorp's acquisition from New Gold of most of the El Morro copper and gold project in Chile, even though the transaction has now closed.
In October Barrick agreed to buy a 70 percent stake in El Morro from its owner, Anglo-Swiss miner Xstrata, for $465 million; however New Gold – a minority stakeholder in El Morro - claimed that it had first refusal on the stake and then proceeded to sell it on to Goldcorp.
Goldcorp said on Tuesday that it had completed the transaction.
"Fundamentally, we remain of the view that Xstrata were obliged to close with us," said a spokesman for Barrick. "Whether they closed or not, the courts will sort out." No date has been set for the hearing.
El Morro holds reserves of 5.7 billion pounds of copper and 6.7 million ounces of gold.
In October Barrick agreed to buy a 70 percent stake in El Morro from its owner, Anglo-Swiss miner Xstrata, for $465 million; however New Gold – a minority stakeholder in El Morro - claimed that it had first refusal on the stake and then proceeded to sell it on to Goldcorp.
Goldcorp said on Tuesday that it had completed the transaction.
"Fundamentally, we remain of the view that Xstrata were obliged to close with us," said a spokesman for Barrick. "Whether they closed or not, the courts will sort out." No date has been set for the hearing.
El Morro holds reserves of 5.7 billion pounds of copper and 6.7 million ounces of gold.
Playfair Enters Agreement For Rare Earth Metals Blocks
Canada’s Playfair Mining Ltd. has entered into an option agreement with Rare Earth Metals on its six large-claim REE blocks in Labrador. The six blocks, containing 313 claims covering a combined 7,825 hectares, are located in the Letitia Lake - Red Wine region covering highly prospective ground which is enriched in both rare metals and rare earth elements (REE).
Rare Earth Metals can earn a 51% interest in Playfair's six claim blocks by making an initial payment of $15,000 and 20,000 shares and guaranteeing a minimum first year expenditures of $100,000. Thereafter, Rare Earth Metals will make further annual contract anniversary payments of cash and shares totalling $55,000 and 130,000 shares and also incur additional exploration expenditures totalling $400,000 over three years in order to earn a 51% interest in the claims. The parties will then form a joint venture to further explore and develop mineral resources on the property. REM will operate the exploration programs during the option period in consultation with Playfair.
The agreement between Playfair and Rare Earth Metals accompanies a second and separate option agreement between REM and Cornerstone Capital Resources Inc. which is similar in nature and scope. REM, via staking and the two option agreements has consolidated a coherent land package in the Letitia Lake - Red Wine River region totalling 584 claim units (146 sq. km). The Red Wine REE District is located 120 km northeast of Churchill Falls, Labrador and is within 50 kilometres of an existing resource road originating at Churchill Falls. The estimated centre of the Red Wine REE camp is only 10 kilometres southwest of the western extent of Playfair's Seal Lake Copper-Silver exploration property.
During this upcoming summer-fall exploration season, Rare Earth Metals plans to conduct airborne geophysics and follow-up sampling, with select diamond drilling on priority showings and anomalies. This will be the first time since the 1960s that any detailed field work has been done in the area.
Rare Earth Metals can earn a 51% interest in Playfair's six claim blocks by making an initial payment of $15,000 and 20,000 shares and guaranteeing a minimum first year expenditures of $100,000. Thereafter, Rare Earth Metals will make further annual contract anniversary payments of cash and shares totalling $55,000 and 130,000 shares and also incur additional exploration expenditures totalling $400,000 over three years in order to earn a 51% interest in the claims. The parties will then form a joint venture to further explore and develop mineral resources on the property. REM will operate the exploration programs during the option period in consultation with Playfair.
The agreement between Playfair and Rare Earth Metals accompanies a second and separate option agreement between REM and Cornerstone Capital Resources Inc. which is similar in nature and scope. REM, via staking and the two option agreements has consolidated a coherent land package in the Letitia Lake - Red Wine River region totalling 584 claim units (146 sq. km). The Red Wine REE District is located 120 km northeast of Churchill Falls, Labrador and is within 50 kilometres of an existing resource road originating at Churchill Falls. The estimated centre of the Red Wine REE camp is only 10 kilometres southwest of the western extent of Playfair's Seal Lake Copper-Silver exploration property.
During this upcoming summer-fall exploration season, Rare Earth Metals plans to conduct airborne geophysics and follow-up sampling, with select diamond drilling on priority showings and anomalies. This will be the first time since the 1960s that any detailed field work has been done in the area.
African Minerals Announces Greater Iron Ore Reserves At Tonkolili
African Minerals has announced that the total JORC-compliant iron ore mineral resource at its Tonkolili project in Sierra Leone has grown to 10.5 billion tonnes. The company claims it is world's largest reported JORC compliant magnetite iron ore mineral resource. 9.7 billion tonnes of the JORC-compliant mineral resource has an average in-situ grade of 30.1% iron, with the remaining 0.8 billion tonnes grading 16.8% iron.
The company has also announced the placing of £80 million with institutional investors for the Phase 1 Hematite Development and Production Project.
Negotiations are ongoing with the China Railway Materials Commercial Corporation and African Minerals expects to execute definitive agreements with CRM in the next month for long term iron ore off-take, an investment by CRM and the procurement of equipment and services relating to the Project.
Production of Phase 1 Hematite iron ore is expected to commence in Q1 2011.
The company has also announced the placing of £80 million with institutional investors for the Phase 1 Hematite Development and Production Project.
Negotiations are ongoing with the China Railway Materials Commercial Corporation and African Minerals expects to execute definitive agreements with CRM in the next month for long term iron ore off-take, an investment by CRM and the procurement of equipment and services relating to the Project.
Production of Phase 1 Hematite iron ore is expected to commence in Q1 2011.
Optimum Coal Looking To Float In March
Optimum Coal, South Africa's sixth-largest thermal coal miner and its fourth largest coal exporter, is looking to to raise $300-$500 million via an initial public offering on the Johannesburg Stock Exchange in March according to sources in South Africa.
About 30 per cent of the company’s enlarged share capital will be offered valuing the firm at about $1 billion to $1.5 billion. The company announced on 1 February that it would float on the Johannesburg main board during the first half of this year. Proceeds from the IPO would repay debt and fund acquisitions.
Exports accounts for 45 per cent of Optimum’s sales mostly to Europe under a supply deal with BHP Billiton.
In the year to June 2009, the company generated earnings before interest, tax, depreciation and amortization of 1.4 billion rand ($181.8 million) on revenues of 4 billion rand ($519.5 million).
About 30 per cent of the company’s enlarged share capital will be offered valuing the firm at about $1 billion to $1.5 billion. The company announced on 1 February that it would float on the Johannesburg main board during the first half of this year. Proceeds from the IPO would repay debt and fund acquisitions.
Exports accounts for 45 per cent of Optimum’s sales mostly to Europe under a supply deal with BHP Billiton.
In the year to June 2009, the company generated earnings before interest, tax, depreciation and amortization of 1.4 billion rand ($181.8 million) on revenues of 4 billion rand ($519.5 million).
Ukraine To Investigate Ferroalloy Imports
The Ukrainian Interdepartmental Commission on International Trade is to investigate import the import of some ferroalloy products into Ukraine. Ferromanganese with a carbon content of more than two percent (excluding ferromanganese granules of more than 5 mm and with manganese content of more than 65 percent) and ferrosilicomanganese will be subject to the investigation regardless of origin.
The investigation has been requested by the Association of Ukrainian Ferroalloy Producers (UkrFA) and a number of ferroalloy producers including the Nikopol Ferroalloy Plant (NZF), the Zaporizhia Ferroalloy Plant and the Stakhanov Ferroalloy Plant (SFP).
In a statement released by the complainants Ukraine’s ferroalloy output decreased by 59 per cent in Q3 2009 compared to Q3 2008, however ferroalloy imports increased by 219 percent, while prices went down by 38 percent.
In 2009, Ukraine’s ferroalloy output decreased by 25.2 per cent against 2008 to 1.036 million mt, however ferroalloy imports increased by 5.4 times year on year to 103,350 mt. This included 58,940 mt of Ferrosilicomanganese imports were 58.940mt, up 4.3 times compared to 2008, ferromanganese imports were 35,600 mt - up 11.6 times - and ferrosilicon imports were 8,610 mt of ferrosilicon - up 4.1 times. Ukraine imports ferroalloys mainly from Russia, Kazakhstan, Georgia and China.
The investigation has been requested by the Association of Ukrainian Ferroalloy Producers (UkrFA) and a number of ferroalloy producers including the Nikopol Ferroalloy Plant (NZF), the Zaporizhia Ferroalloy Plant and the Stakhanov Ferroalloy Plant (SFP).
In a statement released by the complainants Ukraine’s ferroalloy output decreased by 59 per cent in Q3 2009 compared to Q3 2008, however ferroalloy imports increased by 219 percent, while prices went down by 38 percent.
In 2009, Ukraine’s ferroalloy output decreased by 25.2 per cent against 2008 to 1.036 million mt, however ferroalloy imports increased by 5.4 times year on year to 103,350 mt. This included 58,940 mt of Ferrosilicomanganese imports were 58.940mt, up 4.3 times compared to 2008, ferromanganese imports were 35,600 mt - up 11.6 times - and ferrosilicon imports were 8,610 mt of ferrosilicon - up 4.1 times. Ukraine imports ferroalloys mainly from Russia, Kazakhstan, Georgia and China.
Southern Uranium In South Australian Iron Ore Discovery
South Australian minerals explorer Southern Uranium Ltd says it has identified iron ore potential at its Jungle Dam prospect on the Eyre Peninsula in South Australia.
"Of a total of nine Acacia and Southern Uranium holes with complete assays and considered to be proximal to modelled magnetic bodies, six achieved iron intersections of significant width and grades of more than 30 per cent Fe (iron)," the company said on Wednesday. "The potential for substantial thicknesses of iron mineralisation is indicated by broad or adjacent intersections at the original Jungle Dam prospect," it said.
The metals division of Shell drilled at Jungle Dam in 1985 while Acacia Resources drilled there in 1996. Southern Uranium itself did some target drilling in 2008 and 2009.
"Of a total of nine Acacia and Southern Uranium holes with complete assays and considered to be proximal to modelled magnetic bodies, six achieved iron intersections of significant width and grades of more than 30 per cent Fe (iron)," the company said on Wednesday. "The potential for substantial thicknesses of iron mineralisation is indicated by broad or adjacent intersections at the original Jungle Dam prospect," it said.
The metals division of Shell drilled at Jungle Dam in 1985 while Acacia Resources drilled there in 1996. Southern Uranium itself did some target drilling in 2008 and 2009.
Montana Lowers Bonus For Otter Creek Coal Tracts
The Montana Land Board voted 3-2 Tuesday to reduce the asking price for the 572 million ton Otter Creek coal tracts near Ashland after receiving no bids on an earlier offer.
The 25 cents a tone bonus set by the board in December has been reduced to 15 cents a ton, which will bring in $86 million in bonuses against the $143 million under the terms of the original plan. The bonus bid the right to develop the coal, pending environmental permits.
State Governor Brian Schweitzer supported the reduced price, arguing that Arch Coal is going to be mining in the area regardless of whether it gets the Montana coal leases. Arch Coal agreed to a 10 cent per ton bonus bid to be paid over five years to lease a 732 million tons tracts owned by Great Northern Properties of Houston, Texas.
"If this board votes not to lease coal at any price, there will still be development at Otter Creek," Schweitzer said. "I'm a realist and I understand that we have a fiduciary responsibility to strike a price that is as good as we can get and get the development to go forward."
Governor Schweitzer said that the 15 cent bonus is still almost triple that suggested by an appraiser hired by the stat and that the greatest profits would come if the state-owned coal was mined. A 12.5 percent royalty payment would generate about $1 billion, as would the 15 percent coal severance tax.
Arch Coal was the only company to respond to the original offer, but their written response stated only that the bonus payment the state was asking for was too high.
Archived stories on this topic.
The 25 cents a tone bonus set by the board in December has been reduced to 15 cents a ton, which will bring in $86 million in bonuses against the $143 million under the terms of the original plan. The bonus bid the right to develop the coal, pending environmental permits.
State Governor Brian Schweitzer supported the reduced price, arguing that Arch Coal is going to be mining in the area regardless of whether it gets the Montana coal leases. Arch Coal agreed to a 10 cent per ton bonus bid to be paid over five years to lease a 732 million tons tracts owned by Great Northern Properties of Houston, Texas.
"If this board votes not to lease coal at any price, there will still be development at Otter Creek," Schweitzer said. "I'm a realist and I understand that we have a fiduciary responsibility to strike a price that is as good as we can get and get the development to go forward."
Governor Schweitzer said that the 15 cent bonus is still almost triple that suggested by an appraiser hired by the stat and that the greatest profits would come if the state-owned coal was mined. A 12.5 percent royalty payment would generate about $1 billion, as would the 15 percent coal severance tax.
Arch Coal was the only company to respond to the original offer, but their written response stated only that the bonus payment the state was asking for was too high.
Archived stories on this topic.
Noranda Income Fund Reports Q4 Earnings Of $1.4 Million
The Noranda Income Fund, which operates the CeZinc processing plant in Salaberry-de-Valleyfield, Québec, reported net earnings of $1.4 million for the fourth quarter of 2009, compared to earnings of $7.5 million in the same quarter a year ago and a net loss of $1.3 million for the third quarter.
"The plant operated at normal operating capacity during the quarter and this positively impacted fourth quarter profitability and cash flow. The benefits of improved demand for zinc, sulphuric acid and copper flowed through to the bottom line," said President and Chief Executive Officer, Mario Chapados.
Mr Chapados was upbeat in his outlook for 2010 with steel plants in the USA, the major users of zinc, running at 65% capacity against 44% in the first half of 2009, increasing stock levels and government stimulus initiatives such as the Cash for Clunkers car trade-in incentive.
Mr Chapados pointed to the ending of such initiatives and fiscal tightening in China as the main areas of uncertainty and while manufacturing activity is improving that doesn’t apply to all sectors. Low zinc premiums and a stronger Canadian dollar are also proving to be challenges.
"The plant operated at normal operating capacity during the quarter and this positively impacted fourth quarter profitability and cash flow. The benefits of improved demand for zinc, sulphuric acid and copper flowed through to the bottom line," said President and Chief Executive Officer, Mario Chapados.
Mr Chapados was upbeat in his outlook for 2010 with steel plants in the USA, the major users of zinc, running at 65% capacity against 44% in the first half of 2009, increasing stock levels and government stimulus initiatives such as the Cash for Clunkers car trade-in incentive.
Mr Chapados pointed to the ending of such initiatives and fiscal tightening in China as the main areas of uncertainty and while manufacturing activity is improving that doesn’t apply to all sectors. Low zinc premiums and a stronger Canadian dollar are also proving to be challenges.
Timminco Proposes Silicon Plant In Iceland
Canadian metals producer Timminco Ltd. is looking to boost its capacity with a proposed new plant in Iceland, the company announced on Tuesday. The news boosted Timminco’s shares by 24% to close at $1.33 on the Toronto Stock Exchange - well off the high of more than $30 reached in the middle of 2008.
Timminco has secured about $1 million in convertible debt financing from Icelandic private equity firm Strokkur Energy, and will use the proceeds to fund preliminary engineering work for.
The new plant will have an annual production capacity of 50,000 tonnes of silicon metal and would complement existing capacity at its plant in Becancour, Quebec, the company said.
The company has struck a long-term power supply agreement in principle with Icelandic company Reykjavik Energy which will provide Timminco with 85 megawatts of electrical power from a proposed plant in Hverahlid. This will begin operating in 2013.
Timminco has secured about $1 million in convertible debt financing from Icelandic private equity firm Strokkur Energy, and will use the proceeds to fund preliminary engineering work for.
The new plant will have an annual production capacity of 50,000 tonnes of silicon metal and would complement existing capacity at its plant in Becancour, Quebec, the company said.
The company has struck a long-term power supply agreement in principle with Icelandic company Reykjavik Energy which will provide Timminco with 85 megawatts of electrical power from a proposed plant in Hverahlid. This will begin operating in 2013.
Tuesday, February 16, 2010
Orissa Mining Looking To Diversify
Indian state-owned mining company, Orissa Mining Corporation (OMC), is to diversify into power and the coal mining sector, some two decades after becoming a mining-only company.
OMC will set up 2000 MW thermal power plant near Rengali in join venture with Orissa Hydro Power Corporation (OHPC) with an investment of Rs 80 billion. The two partners will each have a 50% stake in the new company, which will be known as Orissa Thermal Power Corporation Ltd (OTPCL). OTPCL has applied for the necessary documents for a coal block for the project. OMC is also looking at setting up an independent power plant consisting of two 660MW units though the company admit that such a plan is still at an early stage.
OMC has three coal blocks, one independently and two jointly with other enterprises. It has entered into agreements with the Assam Mineral Development Corporation (AMDC), Meghalaya Mineral Development Corporation (MMDC) and Tamilnadu Electricity Board (TNEB) to develop the Mandakini-B coal block in Angul with a reserve of 1200 million tons. Mandakini-B is expected to produce 15 million ton per annum (MTPA) of coal for power Generation.
The company is also planning to float another JV with Andhra Pradesh Mineral Development Corporation (APMDC) on 50:50 sharing basis to exploit a coal block at Nuagaon Telisahi in Anugul with a reserve of 733 million tons. The Mineral Exploration Corporation Ltd (MECL) is currently exploring the coal block jointly with OMC and the geological report is expected by the end of April, 2010.
OMC will set up 2000 MW thermal power plant near Rengali in join venture with Orissa Hydro Power Corporation (OHPC) with an investment of Rs 80 billion. The two partners will each have a 50% stake in the new company, which will be known as Orissa Thermal Power Corporation Ltd (OTPCL). OTPCL has applied for the necessary documents for a coal block for the project. OMC is also looking at setting up an independent power plant consisting of two 660MW units though the company admit that such a plan is still at an early stage.
OMC has three coal blocks, one independently and two jointly with other enterprises. It has entered into agreements with the Assam Mineral Development Corporation (AMDC), Meghalaya Mineral Development Corporation (MMDC) and Tamilnadu Electricity Board (TNEB) to develop the Mandakini-B coal block in Angul with a reserve of 1200 million tons. Mandakini-B is expected to produce 15 million ton per annum (MTPA) of coal for power Generation.
The company is also planning to float another JV with Andhra Pradesh Mineral Development Corporation (APMDC) on 50:50 sharing basis to exploit a coal block at Nuagaon Telisahi in Anugul with a reserve of 733 million tons. The Mineral Exploration Corporation Ltd (MECL) is currently exploring the coal block jointly with OMC and the geological report is expected by the end of April, 2010.
Shaanxi Facing Coal Shortage As Stockpiles Fall
The Chinese province of Shaanxi has been hit by what has been described as a "serious" coal shortage, with just one week’s worth of supplies to power the province’s 13 biggest utility power plants in January.
Official government figures released on Monday suggested that 1 million tons of thermal coal was stockpiled by utilities, a drop of 28 per cent over the December figure.
Local coal mines boosted output by 13% in January to help boost stockpiles but there is now concern about rationing in the region. It is thought that supplies will be imported from Indonesia and Australian to alleviate the situation.
Official government figures released on Monday suggested that 1 million tons of thermal coal was stockpiled by utilities, a drop of 28 per cent over the December figure.
Local coal mines boosted output by 13% in January to help boost stockpiles but there is now concern about rationing in the region. It is thought that supplies will be imported from Indonesia and Australian to alleviate the situation.
Xstrata Delays Closure Of New Brunswick Lead-Zinc Mine
Xstrata is expected to defer closure of its lead-zinc mine near Bathurst in northern New Brunswick. The mine was to close this month but Xstrata Zinc now says that it will stay open until 2011.
The mine has an annual capacity of 3.6 million tonnes of ore containing zinc, lead, copper, and silver.
The mine has an annual capacity of 3.6 million tonnes of ore containing zinc, lead, copper, and silver.
Chinese Manganese Company Exploring In Fiji
A Chinese manganese smelting company will soon carry out exploratory work in Fiji.
China Yunnan Metallurgical Company (CYMCO) will carry out exploration work on on potential manganese deposits in Nasaucoko in the upper-reaches of Navosa on Fiji’s largest island, Viti Levu. The work is expected to cost $5million over the next three years.
The Fijian government has granted a 30-year surface lease to Viti Mining Limited which is exploring in the area. Viti CEO John Sanday said that mining is expected to start next month. Mr Sanday said CYMCO officials were impressed with the manganese ore grade in Fiji during a visit in December. Of CYMCO he said "by the end of the year it will be the biggest manganese smelting company in China and in a couple of years it will be the biggest in the world with an output exceeding one million tonnes of manganese ferroalloy per year," he said.
The manganese ore is expected to be bought by CYMCO at market prices.
China Yunnan Metallurgical Company (CYMCO) will carry out exploration work on on potential manganese deposits in Nasaucoko in the upper-reaches of Navosa on Fiji’s largest island, Viti Levu. The work is expected to cost $5million over the next three years.
The Fijian government has granted a 30-year surface lease to Viti Mining Limited which is exploring in the area. Viti CEO John Sanday said that mining is expected to start next month. Mr Sanday said CYMCO officials were impressed with the manganese ore grade in Fiji during a visit in December. Of CYMCO he said "by the end of the year it will be the biggest manganese smelting company in China and in a couple of years it will be the biggest in the world with an output exceeding one million tonnes of manganese ferroalloy per year," he said.
The manganese ore is expected to be bought by CYMCO at market prices.
RINL Looking To Swap Jharkhand Coal Blocks
Indian State-run steel maker Rashtriya Ispat Nigam (RINL) is looking to swap two coal blocks in Jharkhand citing difficulties in developing the mines. The company is seeking two new coal blocks to replace those at Mahal and Tenughat-Jhirki, according to a source at India’s steel ministry. The Steel Ministry is expected to forward the request to the Coal Ministry.
Mahal has an estimated reserve of about 1,100 million tonnes (MT), while Tenughat-Jhirki contain about 215 MT of coking coal.
In addition RINL is actively looking to form joint ventures with miners of various grades of iron ore as the company lacks captive reserves of the raw material.
The firm's need for raw materials such as iron ore and coking coal is set to surge in the next year as it commissions the expanded production line at its Vishakhapatnam facility. Production at Vishakhapatnam is expected to 6MT a year by March 2011.
Mahal has an estimated reserve of about 1,100 million tonnes (MT), while Tenughat-Jhirki contain about 215 MT of coking coal.
In addition RINL is actively looking to form joint ventures with miners of various grades of iron ore as the company lacks captive reserves of the raw material.
The firm's need for raw materials such as iron ore and coking coal is set to surge in the next year as it commissions the expanded production line at its Vishakhapatnam facility. Production at Vishakhapatnam is expected to 6MT a year by March 2011.
Elenilto To Spend $2.4 Billion On Liberia's Western Cluster
Israeli miner Elenilto, a unit of Israel’s Engelinvest Group, will spend $2.4 billion developing Liberia’s Western Cluster iron ore deposit, the Liberian Ministry of Lands, Mines and Energy said on Monday.
Production from the Western Cluster is estimated to be as much as 1.1 billion tons of iron ore.
Last month Elenilto was awarded the rights by the Liberian government to develop the Western Cluster project. The project consists of three deposits and two idled mines, which were closed during Liberia’s civil wars.
Production from the Western Cluster is estimated to be as much as 1.1 billion tons of iron ore.
Last month Elenilto was awarded the rights by the Liberian government to develop the Western Cluster project. The project consists of three deposits and two idled mines, which were closed during Liberia’s civil wars.
Monday, February 15, 2010
Zambia Copper Output Up 14 Per Cent In 2009
Zambia’s copper output rose 14 percent in 2009 to 697,860 tonnes against 611,940 tonnes in 2008 the central bank said on Monday.
Copper exports increased to 675,384 in 2009 from 587,125 tonnes the previous year.
Cobalt production increased to 5,879 tonnes last year compared with 4,617 tonnes in 2008 and exports rose to 5,868 tonnes in 2009 from 4,610 tonnes.
Output for 2010 is expected to hit record levels, while Trafigura is expected to buy a quarter of the nation’s copper output this year.
Zambia is Africa’s leading copper producer.
Copper exports increased to 675,384 in 2009 from 587,125 tonnes the previous year.
Cobalt production increased to 5,879 tonnes last year compared with 4,617 tonnes in 2008 and exports rose to 5,868 tonnes in 2009 from 4,610 tonnes.
Output for 2010 is expected to hit record levels, while Trafigura is expected to buy a quarter of the nation’s copper output this year.
Zambia is Africa’s leading copper producer.
Kazakhstan Copper Output Down 25 Per Cent In January
Kazakhstan produced 28,423 tonnes of refined copper in January, a 25.6 percent decrease on the previous month and 6 per cent down on the same period last year, official data showed on Monday.
Total output was 28,423 tonnes against 38,212 tonnes in December.
Total output was 28,423 tonnes against 38,212 tonnes in December.
Griffin Mining Reports Higher Gold Output At Caijiaying
UK-based miner, Griffin Mining Limited, has reported increased production at its Caijiaying Zinc Gold Mine in Hebei province, China, in the quarter to 31st December 2009.
Gold output in the quarter was up 33.7 per cent at 1673 ounces, while zinc output was up 5.3 per cent at 7141 tonnes. Output of silver fell by 21.9 per cent to 29,695 ounces while that of lead fell 36.7 per cent to 138 tonnes. Total ore processed was up 9.8 per cent at 125,379 tonnes.
Following the grant of a new mining licence permitting the extraction of ore below the 1300 level, mine development and stope preparation below the 1300 level is now underway with the expectation of ore being extracted from the lower levels later this quarter. Work is also continuing on the upgrade of the processing plant and tailings dams to increase processing capacity to 750,000 tonnes of ore per annum by the autumn of 2010.
Chairman Mladen Ninkov said: “The operating performance of the Caijiaying mine continues to improve and we look forward to even better results as the next levels of the mine are accessed and the plant upgrade is completed.”
Gold output in the quarter was up 33.7 per cent at 1673 ounces, while zinc output was up 5.3 per cent at 7141 tonnes. Output of silver fell by 21.9 per cent to 29,695 ounces while that of lead fell 36.7 per cent to 138 tonnes. Total ore processed was up 9.8 per cent at 125,379 tonnes.
Following the grant of a new mining licence permitting the extraction of ore below the 1300 level, mine development and stope preparation below the 1300 level is now underway with the expectation of ore being extracted from the lower levels later this quarter. Work is also continuing on the upgrade of the processing plant and tailings dams to increase processing capacity to 750,000 tonnes of ore per annum by the autumn of 2010.
Chairman Mladen Ninkov said: “The operating performance of the Caijiaying mine continues to improve and we look forward to even better results as the next levels of the mine are accessed and the plant upgrade is completed.”
Beowulf Confident About Ruoutevare Iron Ore Deposit
Anglo-Swedish miner, Beowulf Mining, said on Monday that an independent study has showed that its Ruoutevare deposit in Sweden contains a significant iron-ore resource close to the surface making it a potential open-pit mining operation.
The study estimates gross revenues of about $6.85-billion over a 15-year mine life at an extraction rate of 10 million tonnes a year, with total potential cash flows of $3.07-billion over the mine life.
"We believe that, with further work, we can increase the tonnage available and hence the expected mining life of the project," said Beowulf chairman Clive Sinclair-Poulton.
Ruoutevare is one of the largest known iron-ore deposits not yet in production in Scandinavia.
The study estimates gross revenues of about $6.85-billion over a 15-year mine life at an extraction rate of 10 million tonnes a year, with total potential cash flows of $3.07-billion over the mine life.
"We believe that, with further work, we can increase the tonnage available and hence the expected mining life of the project," said Beowulf chairman Clive Sinclair-Poulton.
Ruoutevare is one of the largest known iron-ore deposits not yet in production in Scandinavia.
Wesfarmers Sees Sales Increase From Curragh Coal Mine
Australian conglomerate Wesfarmers Ltd says sales from its Curragh coal mine in Queensland are expected to rise to between 8 and 8.5 million tonnes a year, from current levels of 6.5-7 mtpa after signing a new long-term contract with Thiess Pty Ltd for increased overburden removal.
"The Thiess contract will result in the Curragh North mining area utilising an ultra-class fleet with Curragh and Thiess to be operating some of the largest earth moving equipment in Australia from mid 2011," Wesfarmers said in a statement.
The company said that the agreement, together with the Curragh mine's expansion, will enable the company to take advantage of the expected increase in seaborne metallurgical coal demand.
"The Thiess contract will result in the Curragh North mining area utilising an ultra-class fleet with Curragh and Thiess to be operating some of the largest earth moving equipment in Australia from mid 2011," Wesfarmers said in a statement.
The company said that the agreement, together with the Curragh mine's expansion, will enable the company to take advantage of the expected increase in seaborne metallurgical coal demand.
Sage May Make Play For Griffin Coal
Mining entrepreneur Tony Sage is close to finalising due diligence on Griffin Coal, the Australian coal miner that went into administration last month. Reports suggest that Mr Sage will make a play for the company at debt level. Griffin is thought to have unsecured debts of around $1 billion though Mr Sage suggested that it could be as high as $3 billion.
The move will be similar to his purchase of the debt of failed Queensland coal miner, Copper Co.
Once due diligence is completed Mr Sage will then talk to key stakeholders in the group.
The move will be similar to his purchase of the debt of failed Queensland coal miner, Copper Co.
Once due diligence is completed Mr Sage will then talk to key stakeholders in the group.
Berong Nickel Looking To Reopen Paladan Nickel Mine
Philippine miner Atlas Consolidated Mining and Development Corp. is hoping to reopen its Berong Nickel joint venture in Palawan, Southern Luzon later this year to take advantage of a rise in nickel prices. Atlas is also looking at setting up a processing plant.
Berong is a joint-venture between European Nickel Plc, Atlas Consolidated, and Toledo Mining Corp but the mine closed last February, laying off more than 600 workers after to a fall in nickel prices. But with prices up over 35 per cent over the past year Chairman Alfredo C. Ramos is hopeful that production will begin again soon and that it would sell to its traditional markets in Japan, South Korea and China.
Mr. Ramos said that if Berong Nickel Corp. resumed operations, the miner would still ship nickel ores to traditional markets like Japan, South Korea and China.
Berong Nickel has a supply agreement with BHP Billiton, the world’s largest miner, for the shipment of 500,000 MT of nickel ore per year until 2013. The mine is the world’s fourth-largest nickel laterite resource with a resource of about 275 million MT of nickel ores.
Atlas is also to study the viability of putting up a nickel processing plant to be able to supply a value-added product. This will mean a significant investment for the miner estimated at over P2 billion ($US 40 million) and finance officer Martin Buckingham has admitted that the company may end up having to find strategic partners for the project.
Meanwhile Berong shareholder European Nickel has decided to merge with Australia’s Rusina Mining NL to be able to spend $498 million for a nickel leach plant at the Acoje mine in Zambales.
Berong is a joint-venture between European Nickel Plc, Atlas Consolidated, and Toledo Mining Corp but the mine closed last February, laying off more than 600 workers after to a fall in nickel prices. But with prices up over 35 per cent over the past year Chairman Alfredo C. Ramos is hopeful that production will begin again soon and that it would sell to its traditional markets in Japan, South Korea and China.
Mr. Ramos said that if Berong Nickel Corp. resumed operations, the miner would still ship nickel ores to traditional markets like Japan, South Korea and China.
Berong Nickel has a supply agreement with BHP Billiton, the world’s largest miner, for the shipment of 500,000 MT of nickel ore per year until 2013. The mine is the world’s fourth-largest nickel laterite resource with a resource of about 275 million MT of nickel ores.
Atlas is also to study the viability of putting up a nickel processing plant to be able to supply a value-added product. This will mean a significant investment for the miner estimated at over P2 billion ($US 40 million) and finance officer Martin Buckingham has admitted that the company may end up having to find strategic partners for the project.
Meanwhile Berong shareholder European Nickel has decided to merge with Australia’s Rusina Mining NL to be able to spend $498 million for a nickel leach plant at the Acoje mine in Zambales.
Bluescope Steel Expects Small Profit As Prices Rise
Australia’s largest steel manufacturer, Bluescope Steel, said today that it expects to return to the black with a small net profit in 2009-10 on the back of rising steel prices after reporting a first-half loss of $28 million in half-year to 31 December. The loss was double market expectations and compared to a $407 million profit in the half-year to 31 December 2008.
The company said that after a $61 million loss in the first quarter it made a $28 million profit in the second quarter as it restarted production at its No 5 blast furnace at Port Kembla in NSW. Revenues were $4.1 billion compared to $6.16 billion a year ago. Production increased steadily during the first half-year after output was slashed in the wake of the financial crisis.
Chief executive Paul O'Malley said: “After a tough period across all our businesses, we are pleased to report a more positive trend in demand and pricing and expect a profit in the second half. We expect to deliver a small reported profit for the full year, largely due to continued improvement in domestic/export demand conditions, improved steel prices (and) further cost reduction initiatives.”
Bluescope shares closed down 8 cents (3.1 per cent) at $2.48 as traders were sceptical on the steelmaker’s growth prospects in the face of rising iron ore and coking coal prices and with the prospect of it losing domestic market share to cheaper imports. Mr O’Malley said that raw material prices were, indeed, a concern to the company in the face of increased Chinese demand and warned of volatility in margins for steelmakers.
The company said that after a $61 million loss in the first quarter it made a $28 million profit in the second quarter as it restarted production at its No 5 blast furnace at Port Kembla in NSW. Revenues were $4.1 billion compared to $6.16 billion a year ago. Production increased steadily during the first half-year after output was slashed in the wake of the financial crisis.
Chief executive Paul O'Malley said: “After a tough period across all our businesses, we are pleased to report a more positive trend in demand and pricing and expect a profit in the second half. We expect to deliver a small reported profit for the full year, largely due to continued improvement in domestic/export demand conditions, improved steel prices (and) further cost reduction initiatives.”
Bluescope shares closed down 8 cents (3.1 per cent) at $2.48 as traders were sceptical on the steelmaker’s growth prospects in the face of rising iron ore and coking coal prices and with the prospect of it losing domestic market share to cheaper imports. Mr O’Malley said that raw material prices were, indeed, a concern to the company in the face of increased Chinese demand and warned of volatility in margins for steelmakers.
BHP Forecasts Doubling In Chinese Steel Output In 20 Years
The managing director of BHP says that he expects steel production in China to double by 2025.
Speaking to the Australian TV network, ABC, Marius Kloppers, said that he's optimistic about prices for iron ore and coking coal and is particularly positive about the outlook for Australian exports of those products following an analysis done by his company over the past year-and-a-half.
"We did a bottom-up analysis. How many buildings, what is the steel intensity and so on [and] we think that this trend is going to go on for the 20 years that we've forecast."
Speaking to the Australian TV network, ABC, Marius Kloppers, said that he's optimistic about prices for iron ore and coking coal and is particularly positive about the outlook for Australian exports of those products following an analysis done by his company over the past year-and-a-half.
"We did a bottom-up analysis. How many buildings, what is the steel intensity and so on [and] we think that this trend is going to go on for the 20 years that we've forecast."
Mitsui Raises Zinc Price
Mitsui Mining & Smelting Co. has raised its zinc selling price by Y20,000 to Y240,000 a metric ton.
This brings the average selling price for zinc in February to Y234,500.
This brings the average selling price for zinc in February to Y234,500.
India Delays Private Coal Mining
India is to delay yet again the full entry of private companies into the country’s coal mining industry.
It has been expected that there would be a bill in the forthcoming Budget session that would allow the auctioning of coal mines to companies without the restriction of captive use, however the Prime Minister’s Energy Coordination Committee recommended that the bill be moved only after a consensus is arrived.
Trade unions have been expressing their opposition to the bill since it was cleared by the standing committee in 2001, opposition that has been successful in delaying the bill. Now, once again, the government has delayed the bill and is to wait for a ministerial panel to report on the matter. At present, private industries are allowed a role in coal mining only for captive use.
The coal ministry had proposed a lump sum payment plan for auctioning coal blocks, instead of the royalty and profit-share system used in oil or gas concessions. The bid amount would be realised in instalments over 10 years and bidders asked to make their offer above the floor price worked out on the basis of the government's estimate of coal reserves in a block. Preference would be given to companies proposing to set up washeries or end-use industries in coal-bearing states and proceeds from the bids would accrue to the government of the state where the coal block is situated.
It has been expected that there would be a bill in the forthcoming Budget session that would allow the auctioning of coal mines to companies without the restriction of captive use, however the Prime Minister’s Energy Coordination Committee recommended that the bill be moved only after a consensus is arrived.
Trade unions have been expressing their opposition to the bill since it was cleared by the standing committee in 2001, opposition that has been successful in delaying the bill. Now, once again, the government has delayed the bill and is to wait for a ministerial panel to report on the matter. At present, private industries are allowed a role in coal mining only for captive use.
The coal ministry had proposed a lump sum payment plan for auctioning coal blocks, instead of the royalty and profit-share system used in oil or gas concessions. The bid amount would be realised in instalments over 10 years and bidders asked to make their offer above the floor price worked out on the basis of the government's estimate of coal reserves in a block. Preference would be given to companies proposing to set up washeries or end-use industries in coal-bearing states and proceeds from the bids would accrue to the government of the state where the coal block is situated.
Sunday, February 14, 2010
Anglo American Said To Be Seeking Bids For Zinc Business
UK newspaper The Independent On Sunday reports that Anglo American PLC is seeking bids on its zinc business by the end of this month.
The paper suggested that private equity groups Apollo and First Reserve are considering bids on assets said to be worth around $800 million.
The paper suggested that private equity groups Apollo and First Reserve are considering bids on assets said to be worth around $800 million.
BHP Wants Quarterly Iron Ore Pricing System
The Nikkei Business Daily is quoting the CEO of BHP Billiton as saying that the miner wants to shift to a quarterly pricing system rather than the current system of setting an annual benchmark price.
Marius Kloppers told Nikkei that wild fluctuations in demand and exchange rates have rendered outdated the annual benchmark system. However Mr Kloppers is expected to encounter some resistance to his proposal from Japanese steelmakers, who believe that the current system provides some stability from frequently fluctuating costs.
But Kloppers was quoted by the Nikkei as saying that it is not acceptable to continue using the existing system just for iron ore and coking coal now that the mechanism for fuel coal has been shifted to a market price-based system.
Marius Kloppers told Nikkei that wild fluctuations in demand and exchange rates have rendered outdated the annual benchmark system. However Mr Kloppers is expected to encounter some resistance to his proposal from Japanese steelmakers, who believe that the current system provides some stability from frequently fluctuating costs.
But Kloppers was quoted by the Nikkei as saying that it is not acceptable to continue using the existing system just for iron ore and coking coal now that the mechanism for fuel coal has been shifted to a market price-based system.
Great Lakes Iron Ore Shipments Up 156 Per Cent In January
Iron ore shipments from the Great Lakes on US-flagged ships rose by 156 per cent in January compared with January 2009.
Ships moved 2.4 million ton of cargo in January compared with 918,981 tons in January 2009 and 3.8 million tons in January 2008.
The Ohio-based Lake Carriers Association said the bulk of the cargo was related to the steel industry with about 1.8 million tons of iron ore making up the monthly total.
The Great Lakes fleet is now in winter lay-up with the last delivery taking place Feb. 1.
Ships moved 2.4 million ton of cargo in January compared with 918,981 tons in January 2009 and 3.8 million tons in January 2008.
The Ohio-based Lake Carriers Association said the bulk of the cargo was related to the steel industry with about 1.8 million tons of iron ore making up the monthly total.
The Great Lakes fleet is now in winter lay-up with the last delivery taking place Feb. 1.
Tata Advisor Calls For Ban On Iron Ore Exports
A leading advisor to India’s Tata Steel has called for exports of iron ore to be banned.
Addressing the Global Steel Conference in Goa, Amit Chatterjee, advisor to Managing Director of Tata Steel Ltd said “Increasing exports of iron ore is a disturbing trend. Exports should be banned. We don’t need to export something which God has given to us.” He added “Restrict export of higher grade iron ore. Lower grade is a different issue.”
Mr. Chatterjee also suggested that “India will have a greater usage of steel in general. There will also be increased usage of steel in construction and boom in automobile industry will add to the demand,” Mr. Chatterjee. “Every car maker in the world is in India and more are coming (leading to increase in steel demand),” he stated.
Mr. Chatterjee pointed out India’s advantages of low cost iron ore and lower labour costs and projected that India’s steel manufacturing capacity would touch 100 million tonnes by 2012; however he said that raw material supply, environment responsibility and a lack of qualified personnel are big challenges ahead for the industry.
“Youngsters prefer IT to steel industry as it pays well. Working in steel industry is not considered fashionable,” he said.
Addressing the Global Steel Conference in Goa, Amit Chatterjee, advisor to Managing Director of Tata Steel Ltd said “Increasing exports of iron ore is a disturbing trend. Exports should be banned. We don’t need to export something which God has given to us.” He added “Restrict export of higher grade iron ore. Lower grade is a different issue.”
Mr. Chatterjee also suggested that “India will have a greater usage of steel in general. There will also be increased usage of steel in construction and boom in automobile industry will add to the demand,” Mr. Chatterjee. “Every car maker in the world is in India and more are coming (leading to increase in steel demand),” he stated.
Mr. Chatterjee pointed out India’s advantages of low cost iron ore and lower labour costs and projected that India’s steel manufacturing capacity would touch 100 million tonnes by 2012; however he said that raw material supply, environment responsibility and a lack of qualified personnel are big challenges ahead for the industry.
“Youngsters prefer IT to steel industry as it pays well. Working in steel industry is not considered fashionable,” he said.
China Imported 34 Per Cent More Nickel Ore In 2009
According to customs statistics released last week China imported 16.575 million tonnes of nickel ore in 2009, up by 34% YoY compared with 2008.
The main sources into China were: Philippines 8,783,000 tonnes, up 2.18 times from 2008 and Indonesia: 7,237,000 tonnes. New Caledonia was the third largest source of nickel ore for China in 2008 but China bought no nickel from New Caledonia in 2009 as its supplier, SMSP, is exporting its production to a new joint venture with POSCO of South Korea to produce ferronickel at a new refinery in South Korea.
The average unit prices for 2009 were Philippine ore: at USD 31.7 per tonne CIF and Indonesian ore: at USD 44.8 per tonne CIF. On the basis of these unit prices on material base, nickel contained in these two ores has been presumed to be 1.5% to 1.75% for Philippine ore and 1.7% to 2% for Indonesian ore.
The main sources into China were: Philippines 8,783,000 tonnes, up 2.18 times from 2008 and Indonesia: 7,237,000 tonnes. New Caledonia was the third largest source of nickel ore for China in 2008 but China bought no nickel from New Caledonia in 2009 as its supplier, SMSP, is exporting its production to a new joint venture with POSCO of South Korea to produce ferronickel at a new refinery in South Korea.
The average unit prices for 2009 were Philippine ore: at USD 31.7 per tonne CIF and Indonesian ore: at USD 44.8 per tonne CIF. On the basis of these unit prices on material base, nickel contained in these two ores has been presumed to be 1.5% to 1.75% for Philippine ore and 1.7% to 2% for Indonesian ore.
Baosteel Increases March Steel Prices
China’s Baosteel Iron and Steel Co has raised its March prices by up to 7.4 percent in th face of rising demand, increased costs and to recoup losses when it suspended price increases in February.
Hot-rolled coil for March delivery has increased by 300 yuan (US$44, 7.4 per cent) a ton, from February, while prices for cold-rolled products also rose 300 yuan, (5.4 percent).
The increases are within analyst expectations, given rising coke and spot iron ore prices.
Baosteel had kept February prices unchanged for most products amid speculation that this was in order to strengthen China’s position in the annual iron ore benchmark price negotiations. This current round of increases will enable it to catch up with other steel mills that did increase their prices.
Hot-rolled coil for March delivery has increased by 300 yuan (US$44, 7.4 per cent) a ton, from February, while prices for cold-rolled products also rose 300 yuan, (5.4 percent).
The increases are within analyst expectations, given rising coke and spot iron ore prices.
Baosteel had kept February prices unchanged for most products amid speculation that this was in order to strengthen China’s position in the annual iron ore benchmark price negotiations. This current round of increases will enable it to catch up with other steel mills that did increase their prices.
Saturday, February 13, 2010
Chek-Su.VK Signs Agreement For Manganese Processing Plant
Russian mining and smelting company CHEK-SU.VK has signed an agreement to build a manganese ore processing plant in the Krasnoyarsk Region of Russia.
Supplies of ore from deposits in the Kemerovo Region will be transported to the plant via Khakassia to be processed.
The project's total value is estimated at RUB 22 billion and will be completed in 2013.
The agreement was signed at the Krasnoyarsk Economic Forum which opened on Friday. Around 1000 representatives of government agencies and business have gathered at the forum to discuss issues of modernisation.
Supplies of ore from deposits in the Kemerovo Region will be transported to the plant via Khakassia to be processed.
The project's total value is estimated at RUB 22 billion and will be completed in 2013.
The agreement was signed at the Krasnoyarsk Economic Forum which opened on Friday. Around 1000 representatives of government agencies and business have gathered at the forum to discuss issues of modernisation.
Friday, February 12, 2010
Miners, Steel Mills Edging Towards 40 Per Cent Iron Ore Price Hike
Platt’s are quoting media reports that the big three iron ore miners have asked China’s five largest steel mills for a provisional 40% rise in iron ore prices and at least one has indicated a willingness to agree to the increase.
The increase has been discussed with each of the five separately and a source close to the negotiations claims that the miners are optimistic that the steel producers will agree a price in the next few weeks.
Click here for archived stories on this topic
The increase has been discussed with each of the five separately and a source close to the negotiations claims that the miners are optimistic that the steel producers will agree a price in the next few weeks.
Click here for archived stories on this topic
Montana Considers Options For Otter Creek Coal Tract
Officials at Montana’s Land Board are considering whether to lower the minimum bid for the 570 million ton Otter Creek coal tract near Ashland, Montana. The Board received no bids for the southeastern Montana tract by Monday’s deadline and received notification from Arch Coal that the $143 million upfront price was too high.
In a memo prepared for the Land Board’s meeting next Tuesday, the officials at the state’s Department of Natural Resources and Conservation outlined the value of several lower-priced bids. Bid options would reduce the present-value price of the coal from $30 million to $170 million. It said the present value of the original bid price is about $1 billion. The Board – a political grouping consisting of five representatives from the state’s Democratic Party – set an upfront bonus of 25 cents a ton along with a 12.5 per cent royalty. It is this upfront bonus that has caused bidders to balk at making a bid, especially as a nearby tract of coal was sold just three months earlier with a bonus of just 10 cents a ton.
Earlier this week State Governor Brian Schweitzer indicated that he thought the state should negotiate with Arch Coal, however that received short shrift from environmental groups who are opposed to the tract being developed at all.
Anne Hedges, program director for the Montana Environmental Information Center accused the state of behaving like a Third World country with regards to its dealing with Arch Coal: “For the price of a postage stamp used to send a letter to say the price is too high, they get, at worst, a $28 million price cut.”
Further reading on this story
In a memo prepared for the Land Board’s meeting next Tuesday, the officials at the state’s Department of Natural Resources and Conservation outlined the value of several lower-priced bids. Bid options would reduce the present-value price of the coal from $30 million to $170 million. It said the present value of the original bid price is about $1 billion. The Board – a political grouping consisting of five representatives from the state’s Democratic Party – set an upfront bonus of 25 cents a ton along with a 12.5 per cent royalty. It is this upfront bonus that has caused bidders to balk at making a bid, especially as a nearby tract of coal was sold just three months earlier with a bonus of just 10 cents a ton.
Earlier this week State Governor Brian Schweitzer indicated that he thought the state should negotiate with Arch Coal, however that received short shrift from environmental groups who are opposed to the tract being developed at all.
Anne Hedges, program director for the Montana Environmental Information Center accused the state of behaving like a Third World country with regards to its dealing with Arch Coal: “For the price of a postage stamp used to send a letter to say the price is too high, they get, at worst, a $28 million price cut.”
Further reading on this story
Vale Expects "New Price Reality" On Iron Ore
More speculation on Thursday that the benchmark iron ore price may rise by much more than the 30 per cent that has been mooted this far. Vale SA, the world’s largest iron ore miner, has suggested that the benchmark price will have to reflect soaring spot prices as Chinese demand for its iron ore has increased greatly.
Vale’s Ferrous Minerals Director Jose Carlos Martins told analysts on Thursday that it expects “a new price reality” from its customers. “If our customers want to stick to benchmark prices, they will have to accept something close to the level of spot prices.”
Mr Martins’ comments have led analysts to predict that the benchmark price may be as high as 40 to 50 per cent more than at present. Earlier this week Australian analysts Goldman Sachs JBWere predicted a rise of as much as 90 per cent following comments by BHP Billiton that current spot prices were that much more than contract prices.
Mr Martins said that iron ore is trading for about $130 a metric ton on the Chinese spot market whereas Vale’s average price last year was $55.99.
Meanwhile, Vale also said late yesterday in a regulatory filing that fourth-quarter net income increased 11 percent to $1.52 billion, or 28 cents a share, from $1.37 billion, or 26 cents, in the year-earlier period results which disappointed analysts who, on average, expected profits of around 31 cents a share.
Vale’s Ferrous Minerals Director Jose Carlos Martins told analysts on Thursday that it expects “a new price reality” from its customers. “If our customers want to stick to benchmark prices, they will have to accept something close to the level of spot prices.”
Mr Martins’ comments have led analysts to predict that the benchmark price may be as high as 40 to 50 per cent more than at present. Earlier this week Australian analysts Goldman Sachs JBWere predicted a rise of as much as 90 per cent following comments by BHP Billiton that current spot prices were that much more than contract prices.
Mr Martins said that iron ore is trading for about $130 a metric ton on the Chinese spot market whereas Vale’s average price last year was $55.99.
Meanwhile, Vale also said late yesterday in a regulatory filing that fourth-quarter net income increased 11 percent to $1.52 billion, or 28 cents a share, from $1.37 billion, or 26 cents, in the year-earlier period results which disappointed analysts who, on average, expected profits of around 31 cents a share.
Clines Raises Funds To Complete New Elk Mine Rehabilitation
Canadian coal miner Cline Mining has raised C$6.9 million to complete the rehabilitation of its New Elk thermal coal and metallurgical coal project in Colorado. C$3.9 million has come in the shape of a loan from Mitsui Matsushima International Pty of Tokyo with the rest coming from a private placement of shares and warrants.
The New Elk coking coal mine is situated near the town of Trinidad in Colorado. It has a coal resource of 315 million tons of coal and will directly employ 450 employees. The mine rehabilitation program is presently in due for completion in July 2010 with the first saleable production of coking coal expected in the fourth quarter of 2010. The mine will reach an annual capacity of 1.3 million tons in 2011, proceeding continuously to the production and sale of 3.0 million tons of coal annually, slated for world export markets.
The Mine has large in-place compliant coal resources and Cline expect further significant production in the future.
The New Elk coking coal mine is situated near the town of Trinidad in Colorado. It has a coal resource of 315 million tons of coal and will directly employ 450 employees. The mine rehabilitation program is presently in due for completion in July 2010 with the first saleable production of coking coal expected in the fourth quarter of 2010. The mine will reach an annual capacity of 1.3 million tons in 2011, proceeding continuously to the production and sale of 3.0 million tons of coal annually, slated for world export markets.
The Mine has large in-place compliant coal resources and Cline expect further significant production in the future.
Thursday, February 11, 2010
London Mining Granted Sierra Leone Mining Concession
AIM-listed London Mining has been granted parliamentary approval by Sierra Leone to extract iron ore from mine that closed 35 years ago and which is projected to earn the West African country $5 million dollars this year, Mines Minister Alpha Kanu said on Thursday.
Mr Kanu said " it is projected that by December 2010, the company will export up to 1.5 million tonnes of iron ore and will pay to the country some $5 million" (3.6 million euros). He said this would increase to $10 million by 2011 and to $20 million by 2013.
The British company will re-open the Marampa mine in northern Sierra Leone.
Graeme Hossie, CEO of London Mining plc, said, “Today’s announcement represents a major step forward for London Mining. The cross-party support we received for the incentives package is deeply encouraging for a continuing, long term relationship between London Mining and Sierra Leone. We now look forward to commencing development of the starter operation for the tailings as well as continuing our work on an expanded operation through development of the primary ore to reached a targeted 5-8Mtpa of production by the end of 2013. The Marampa mine exemplifies LM's strategy: using simple and deliverable logistics to reach the market, Marampa is being fast tracked into production to achieve near term cash flow and will then be expanded to significant scale. We are the first mining company in Sierra Leone to have its Mining Agreement approved by Cabinet and ratified by the Sierra Leone parliament under the new mining act and we will be implementing our construction and production plans immediately.”
Mr Kanu also said the government was working on similar agreements with international diamond mining companies in which one percent of turnover would go towards development and corporate social responsibility projects, including environmental protection.
He said that in total these agreements were expected to eventually amount to "a contribution to the national budget of some $300 million."
Sierra Leone is rich in diamonds, gold, bauxite and platinum but in 2009 the whole of the country’s mining industry contributed just $5.5 million to the country’s economy.
Mr Kanu said " it is projected that by December 2010, the company will export up to 1.5 million tonnes of iron ore and will pay to the country some $5 million" (3.6 million euros). He said this would increase to $10 million by 2011 and to $20 million by 2013.
The British company will re-open the Marampa mine in northern Sierra Leone.
Graeme Hossie, CEO of London Mining plc, said, “Today’s announcement represents a major step forward for London Mining. The cross-party support we received for the incentives package is deeply encouraging for a continuing, long term relationship between London Mining and Sierra Leone. We now look forward to commencing development of the starter operation for the tailings as well as continuing our work on an expanded operation through development of the primary ore to reached a targeted 5-8Mtpa of production by the end of 2013. The Marampa mine exemplifies LM's strategy: using simple and deliverable logistics to reach the market, Marampa is being fast tracked into production to achieve near term cash flow and will then be expanded to significant scale. We are the first mining company in Sierra Leone to have its Mining Agreement approved by Cabinet and ratified by the Sierra Leone parliament under the new mining act and we will be implementing our construction and production plans immediately.”
Mr Kanu also said the government was working on similar agreements with international diamond mining companies in which one percent of turnover would go towards development and corporate social responsibility projects, including environmental protection.
He said that in total these agreements were expected to eventually amount to "a contribution to the national budget of some $300 million."
Sierra Leone is rich in diamonds, gold, bauxite and platinum but in 2009 the whole of the country’s mining industry contributed just $5.5 million to the country’s economy.
Assmang To Produce Ferromanganese At Machadodorp Works
South African ferrochrome producer Assmang has announced to shareholders that it plans to convert one of the furnaces at its Machadodorp Works to produce high-carbon ferromanganese, rather than ferrochrome. The converted furnace is expected to produce 4000 tonnes per month of HCFeMn and production will commence by the middle of this year.
In its statement Assmang said that it needs to meet higher than expected demand for high-carbon ferromanganese but that it does not have excess capacity at its Cato Ridge Works to expand production.
The company said that it still expects to meet its contractual obligations for ferrochrome and that it is committed to continuing ferrochrome production. Its ferrochrome furnaces were idle for much of 2009.
In its statement Assmang said that it needs to meet higher than expected demand for high-carbon ferromanganese but that it does not have excess capacity at its Cato Ridge Works to expand production.
The company said that it still expects to meet its contractual obligations for ferrochrome and that it is committed to continuing ferrochrome production. Its ferrochrome furnaces were idle for much of 2009.
Nippon Steel Increases Stake In Ferromanganese Producer Nippon Denko
Nippon Steel Corporation has increased its stake in ferroalloy producer Nippon Denko from 9.5 percent to 15 percent. Nippon Denko will become an equity method affiliate of Nippon Steel.
The decision came after the companies' agreed to further strengthen their alliance, in order to enhance their competitive edge and corporate values.
The two companies have maintained a close business relationship through their trade in ferromanganese and the new agreement will enable both companies to stabilise their procurement of raw materials – including manganese ore – for Nippon Denko and to conclude a long-term sales and purchase agreement for ferromanganese produced by Nippon Denko.
The decision came after the companies' agreed to further strengthen their alliance, in order to enhance their competitive edge and corporate values.
The two companies have maintained a close business relationship through their trade in ferromanganese and the new agreement will enable both companies to stabilise their procurement of raw materials – including manganese ore – for Nippon Denko and to conclude a long-term sales and purchase agreement for ferromanganese produced by Nippon Denko.
South Africa Mining Output Shows Fall For 2009
Figures released by the South African government show that mining production declined by 6.7% year-on-year in 2009. A rise in iron ore production of 13.1% was offset by a fall of 6.7% in diamonds. Gold production also fell.
The figures, prepared by Stats SA, added that the seasonally adjusted value of mineral sales at current prices for the three months ended November 2009 increased by 847.3 million rand - or 1.5% - compared with the previous three months. This was mainly due to increases in the sales value of Platinum Group Metals (PGMs) contributing 4.4 percentage points or 2.494 billion rand, gold (contributing 1.6 percentage points or 923.1 million rand) and manganese ore (contributing 1.3 percentage points or 730.2 million rand.
The figures, prepared by Stats SA, added that the seasonally adjusted value of mineral sales at current prices for the three months ended November 2009 increased by 847.3 million rand - or 1.5% - compared with the previous three months. This was mainly due to increases in the sales value of Platinum Group Metals (PGMs) contributing 4.4 percentage points or 2.494 billion rand, gold (contributing 1.6 percentage points or 923.1 million rand) and manganese ore (contributing 1.3 percentage points or 730.2 million rand.
Hazelwood Resources Starts Pilot Tests At Big Hill Tungsten Deposit
Australian tungsten producer Hazelwood Resources has started pilot milling tests on bulk samples from the Big Hill Tungsten Deposit in Western Australia’s Pilbara region.
Approximately 30 tonnes of excavated material and 40 tonnes of large diameter metallurgical core have been collected to provide feed for pilot scale processing test work for the definitive feasibility study.
Hazelwood is focused on becoming Australia’s only Tungsten producer with 2-3% of world production commencing in 2010.
The company’s iron ore and nickel projects are located in the same Cookes Creek region in the eastern Pilbara and offer significant potential for the delineation of resources in the near future.
Approximately 30 tonnes of excavated material and 40 tonnes of large diameter metallurgical core have been collected to provide feed for pilot scale processing test work for the definitive feasibility study.
Hazelwood is focused on becoming Australia’s only Tungsten producer with 2-3% of world production commencing in 2010.
The company’s iron ore and nickel projects are located in the same Cookes Creek region in the eastern Pilbara and offer significant potential for the delineation of resources in the near future.
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