Yancoal To Commence Production At NSW Mine

Moolarben Project To Start Exporting In Weeks

Yancoal Australia, has announced that production will start next month at its Moolarben power station coal mine in New South Wales, the company’s biggest project.
Coal will be loaded onto trains at the end of April or early May and exported to China via Newcastle.

Yancoal is a subsidiary of China’s Yanzhou Coal Mining Co., and is a part owner of Newcastle Coal Infrastructure Group, which operates a new terminal at the port.

Inmet Raises $500 For Panama Minerals Project

Toronto-listed Inmet Mining Corp. has arranged a $500-million equity for the development of its Cobre Panama copper, gold and molybdenum project.

Funding Raised Through Singapore Investment Company

The financing has been arranged through Ellington Investments Ltd, a subsidiary of Singapore-based Temasek Holdings. Temasek controls a portfolio of US$119 billion and has office in Asia and Latin America.

The placement will close at the end of April after which Ellington is to buy 9.25 million subscription receipts at $54.0049 each. The receipts can either be exchanged on a one-for-one basis for shares of Inmet, or about 14 per cent of its outstanding common stock.

Ellington has the option to nominate one member to Inmet's board of directors, as long as its or its affiliates own at least five per cent of Inmet.

Ellington has also agreed to hold its Inmet shares for at least a year, subject to certain conditions and the investing group will have the opportunity to maintain their proportional stake in Inmet if it issues more stock.

Ivanhoe, Rio Tinto Finalise Oyu Tolgoi Deal

$5Billion Mongolian Copper-Gold Project Set To Go Ahead

Ivanhoe Mines and its partner, Rio Tinto, have finalised procedural and administrative conditions in their investment agreement with the Mongolian government to develop the Oyu Tolgoi copper-gold project. Full-scale construction is set to begin in the second quarter of 2010, the company said on Wednesday.

The Mongolian government will become a junior partner in the $5 billion project with a state-owned resource company owning a 34 per cent stake in the Ivanhoe Mines subsidiary, Oyu Tolgoi LLC. Ivanhoe owns the remaining 66 per cent while Rio Tinto has a 22 per cent stake in Ivanhoe and will provide financial and technical support for the project. Rio Tinto has an option to increase its stake in Ivanhoe to 46.6 per cent over the next 19 months.

The partnership have approved an initial $758 million to launch full-scale construction of the complex

Production of copper and gold is expected to begin in 2013 with a five year ramp up to full production of 450,000 tones of copper per year with significant gold by-products.

Included as part of the project’s infrastructure is a 105 km highway linking the Oyu Tolgoi complex with the Mongolia-China border as well as a regional airport capable of handling Boeing 737-sized aircraft.

Evraz Reports USD1.25 Billion Loss

Russian Steel Makers May Sell Two Siberian Mines

Russian steel producer Evraz reported a net loss for 2009 of $1.25 billion compared with a net profit of $1.78 billion in 2008, Chief Executive Officer Alexander Frolov said on Wednesday. Revenues were down 52.1% to $9.772 billion. Total debt fell to $7.923 billion.

Mr Frolov said the results reflect the fall in construction and infrastructure projects throughout the world; however he was optimistic about Evraz’s prospects for 2010 on the back of increased demand from Asia. Total debt fell to $7.923 billion.

Commenting on the results, Chief financial officer Giacomo Baizini said: "Our net loss of $1,261m for 2009 reflects the global softness of steel markets.

"However it should be noted that in the absence of the effect of the revaluation of certain asset classes due to the change in accounting policy under IAS16, the net loss would have amounted to US$207 million.

"This change resulted in additional depreciation of $558m (net of income tax effect of $148m) due to higher asset values, a loss from the revaluation deficit of $420m (net of income tax effect of $144m) recognised on the date of revaluation, and an additional impairment loss on goodwill of $76m (nil income tax effect)."

China, South Africa Sign Trade Deals

Chrome Ore Purchase Included In $300 Million Deal

China and South Africa have signed a series of deals worth $US300 million to the African nation. The deals were signed on Wednesday during a visit by Jia Qinglin, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), during his goodwill visit to South Africa. Mr Jia was in Pretoria to attend the China-South Africa Economic and Trade Forum.

The deals, involving almost 30 companies from the two countries, include the purchase of South African chrome ore, a vital raw material in the manufacture of steel.

Jianxi Copper To Increase Lead and Zinc Production

Jianxi Copper In Talks To Buy Shandong Copper Smelter

China’s largest copper producer, Jiangxi Copper is to add 100,000 tonnes each of lead and zinc capacity next year, the company’s chairman said.

Speaking to reporters in Hong Kong, Mr Li Yihuang said that this was the first phase in a project that will take lead and zinc capacity to 400,000 tonnes.

However, Mr Li warned that demand growth for the company’s copper is expected to fall as the Chinese government reduces its stimulus spending on the country’s power industry. He also expects price to fall in the second half of this year as governments worldwide also cut back their stimulus spending.Yesterday, the company announceda fourth-quarter net income of 623 million yuan ($91 million), compared with a loss of 1.4 billion yuan a year ago.

Mr Li also announced that the company is still in talks with the local government of Shandong to buy the Yantai Penghui Copper Industry Co., a copper smelter.
Capital expenditure for this year will increase by 13 percent to 3.4 billion yuan this year, from 3 billion yuan in 2009. President assistant Tang Delong, said that the company aims to increase its copper mine output to 240,000 metric tons in 2011, up from 172,000 tons this year.

Jiangxi Copper has a requirement of 464,000 tons of copper ore a year, with its own production accounts for about 35 percent of its needs.

Maghreb Minerals Halves Losses

Maghreb Pursuing Fluorspar Opportunities

AIM-listed Maghreb Minerals has announced that it halved its losses during the six-months ended 31 December 2009. Maghreb made a consolidated loss of £366,000 for the period, compared to a £892,000 the previous year. At 31 December 2009, the company had cash at bank of £207,000.

The company and its funding partner Firebird continue to pursue opportunities in the fluorspar sector, while the base-metals assets in Tunisia remain under care and maintenance.

Maghreb said turmoil in the global financial markets during 2009 meant that it did not receive the necessary funding required to further develop its main projects. However, the company, along with its major shareholder Firebird, continues to pursue opportunities in the fluorspar sector while its base-metals assets in Tunisia remain under care and maintenance.

Maghreb’s assets include zinc, lead, barite and fluorspar exploration projects in Tunisia, the principal of which is the the Bou Jabeur – Gite Est deposit, which has an inferred resource of 4.76 Mt (million tonnes) grading at 5.67% combined Pb/Zn with 39.6% barite, 7.69% fluorite and 7.3 g/t silver.

Ontario Lowlands Set For Mineral Boom

Significant Mineral Development In Ontario's Ring of Fire

The provincial government of Ontario has announced plans to develop the James Bay Lowlands in the north of the province.

More than 20 mining companies are hoping to cash in on an area believed to contain high-grade deposits of nickel, copper, zinc, gold, chromite and palladium.

The government plans to build a railway, roads and processing facilities in an area known locally as the Ring of Fire.

James Bay Lowlands is an extremely wet area on the edge of Canada’s boreal forest, some 300-400km from any existing permanent infrastructure; however investors are concentrating on a 12 km area with the Lowlands region. Currently, access to the general area is by float plane and helicopter.

Significant preparatory work, such as environmental assessments and feasibility studies will be needed before the real work can begin. Whatever infrastructure is built will depend on the nature of the mineral projects, however it is thought that winter roads on ice and snow would probably suffice for most projects, which can be adapted to seasonal production. However, there are plans for a 320km rail line which will link Nakina, north of Lake Superior, to chromite mines in the Ring Of Fire. This is because, unlike some other mineral projects in the area, chromite mining is expected to be a year-round activity.

Canada Chrome has staked mining claims along one possible route in order to secure a right-of-way. “We’re in the early process of evaluating the project,” says Nels Ojard, the firm’s group manager for special projects. Mr Ojard added that the project is probably five to seven years from becoming a reality.

Frank Smeenk, president of Canada Chrome’s parent company, KWG Resources, said it is too early to tell whether processing facilities such as smelters and concentrators will be built at the Ring of Fire or elsewhere. This depends largely on the consistency of an electricity supply.

“In the fullness of time there will probably be a (power) line along the railroad,” Mr Smeenk said. “With the economic downturn in Ontario the demand for electricity has fallen out a bit, so there’s lots of power in Ontario. The problem with it is the price is very high.”

Nyrstar Raises Stake In Ironbark Zinc

Belgian Miner Ups Ironbark Stake To 30.9 per cent

Australian zinc miner, Ironbark Zinc announced on Wednesday that it will issue the world’s largest zinc miner, Belgium’s Nyrstar International BV, with 42,857,143 shares at 35 cents each to raise $15,000,000. The issue will take Nyrstar’s stake in Ironbark to 30.9 per cent.

The issue will fund development at Ironbark’s Citronen base metal deposit in Northern Greenland. Citronen is one of the world’s largest undeveloped zinc projects, with in excess of 10 billion pounds in zinc and lead.

A Definitive Feasibility Study will be undertaken later this year and Ironbark says the funding is sufficient to take it to the major project financing stage. Commercial production is expected within three to five years.

Macarthur Coal Receives Takeover Bid From US Miner

Peabody Bids $3 Billion for Macarthur Coal

Brisbane-based Macarthur Coal Ltd. has had a takeover approach from Peabody Energy Corp.the world’s largest private coal company.

Macarthur went into a trading halt Tuesday and said it had received an approach from a third party seeking a controlling interest in the company. Later in the day the company announced that Peabody Coal had bid A$3.3 billion (US$3.03 billion) but said that the A$13 a share bid “did not fully value the company and its growth prospects.”

Shares in Macarthur hit a high of A$14.50 before settling back to close at A$14.05, a rise of 16% on the day. Shares in Gloucester Coal, which Macarthur was planning to purchase in a deal with Noble Group, closed down almost 10% at A$9 on fears that the deal may not now go through.

The bid is the latest in a number of deals for Australian resource firms. Earlier this month Arrow Energy agreed to a A$3.44 billion joint bid from Royal Dutch Shell and Petrochina.

Golden State Resources Sells Johnson Range Interest

Cliffs Natural Resources Snaps Up Australian Iron Ore Resource

Australian miner Golden State Resources has sold its interest in the Johnson Range iron ore project to a subsidiary of Cleveland-based Cliffs Natural Resources. The deal is said to be worth A$3 million.

Under the agreement Golden State will receive a gross royalty of 2% on iron ore sales from Johnson Range coupled with a 2% gross royalty on the sale of all other minerals transported from the project.

The project is located in the Yilgarn region of Western Australia, around 400km (250 miles) east of Perth.

Hurricane Global Launches China Iron Ore Office

Hurricane Announced Key Tianjin Iron Ore Appointment

Hurricane Global Resource Corporation, a subsidiary of Los Angeles-based bank, Worldvest, has signed a Joint Venture to launch its Chinese Iron Ore Sales Office in Tianjin. The company has also announced the appointment of Qianli Ma as its Managing Director in charge of negotiating and managing all relationships with the Chinese steel industry.

Mr. Ma has extensive experience of the steel industry at state and federal level in China having previously served as Chief Purchasing Officer for a large state-owned steel producer and iron ore importer in China, overseeing the import of almost 35 million tonnes of iron ore in 2009 from over 90 suppliers around the world. Previously, Mr. Ma spent two years as the Deputy Representative for the Chinese Ministry of Commerce in Africa where he was highly involved in developing foreign trade, economic cooperation and foreign investment relationships between China and Africa.

Hurricane has begun assembling a consortium of steel producers seeking to secure long-term supplies of iron ore and is currently evaluating investment opportunities to develop iron ore mines for the benefit of this consortium. In the meantime, Hurricane has also begun sourcing interim supply and plans to broker iron ore transactions on behalf of its buyers.

Senior Managing Director Garrett K. Krause said: "At this time there is a dramatic shift taking place within the $80 billion global iron ore market. With the majority of the world's buying power, China has begun flexing its muscles and challenging the status quo. The result, in our mind, is an enormous opportunity for Hurricane to recognize and address the causes of the disconnect existing among producers and buyers in order to emerge as a long-term partner and solution provider in this market."

Bathurst To Complete L&M Coal Purchase By 30 April

Australian Coal Miner Eyes New Zealand Coal Resource

Australian coal miner, Bathurst Resources, has said that it wants to complete its 100% share purchase of privately-owned New Zealand coal miner, L&M Coal Holdings, by 30 April. The company’s MD, Hamish Bohannon, made the announcement to the Australian Stock Exchange on Wednesday. Bathurst also announced that it is to dual-list on the New Zealand Stock Exchange.

L&M Coal has permits covering more than 10,000ha at Buller, in the western part of New Zealand’s South Island. The areas contain 50 million tonnes of premium hard-coking coal and 90 million tonnes of thermal coal.

"Studies show it should be developed as an open cut operation that could be in production within 18 to 24 months," said Mr Bohannan, adding that due diligence of the Buller coal field was currently in progress.

The neighbouring coal field owned by Solid Energy produces about 2 million tonnes of hard-coking coal per year.

No indication was given of the price Bathurst is paying for L&M Coal.

SAIL Signs Shipping Joint Venture Agreement

SAIL, Shipping Corp of India JV To Ship Imported Raw Materials

Steel Authority of India Ltd (SAIL) is to form a joint venture company with the Shipping Corporation of India (SCI) that will cater to the growing raw material import needs of the steel maker.

"SAIL is keenly focused on ensuring its long-term raw material security and will continue to give thrust on logistics facilities and creation of infrastructure for smooth flow of raw materials and movement of finished products," the company's Chairman S.K. Roongta said.

The two state-run companies entered into an agreement on Monday to set up the JV in which both will have equal stake. The agreement was signed by SAIL Director (Finance) Mr. Soiles Bhattacharya and SCI Director (Technical & Off-shore Services) Mr. U.C. Grover in the presence of SAIL Chairman Mr. S.K. Roongta and SCI Chairman Mr. S. Hajara. Mr. Roongta said that SAIL is keenly focused on ensuring its long-term raw material security and will continue to give thrust on logistics facilities and creation of infrastructure for smooth flow of raw materials and movement of finished products.

The JV will ship around one million tonnes a year of raw materials used by the steel company with the prospect of an expansion in capacity later.

The deal enables SAIL, India's largest public-sector steel producer, to have control over part of its coking coal supply chain and mitigate the risks existing in avolatile shipping market.

SAIL currently imports around 10 million tonnes coking coal each year, a major input for steel making. The company expects its requirement of imported coking coal to increase as it plans to double its hot metal production capacity in the coming years from the current level of around 14 million tonnes.

SCI, India's largest shipping company, will bring its expertise in the shipping arena to the JV. It is already in the process of acquiring new vessels, according to a statement issued by SAIL.

London Mining Snaps Up Colombian Coal Business

London Mining Buys International Coal Company

Iron ore firm London Mining has bought the remaining 80 percent stake in the Colombian coking coal business, International Coal Co (ICC) that it did not own in a deal that could cost it as much as $14 million in cash and 9.8 million shares.

The company is to pay $5.5 million in cash and 3.5 million shares immediately but says it might have to pay an additional $8.5 million in cash and up to 6.3 million shares depending on the performance of the Colombian business.

London Mining says it expects capital expenditure of $40 million over the next 18 months and is targetting 250 kilotonnes per annum (KTPA) of coking coal within 18 to 24 months and up to 400 KTPA of coke. The first coke production will be within 12 months.

Shares in London Mining rose in early trading but fell back to 265p, a fall of 0.75p by 1030 BST (0930 GMT).

Greenpeace Criticises Coal-Fired Data Centres

Environmentalists Slam Internet Cloud Pollution

Envrionmental activist group, Greenpeace, has criticised internet-based companies such as Facebook, Apple and Google for building data centres powered by coal.

Greenpeace released a report on Tuesday criticising the idea of an internet ‘cloud’ of pollution caused by these data centres.

Last month we reported that a data centre to be built by Facebook in the US state of Oregon will run on fuel created by a coal-fired power station. Apple is building a data centre in North Carolina that relies on coal power.

"The last thing we need is for more cloud infrastructure to be built in places where it increases demand for dirty coal-fired power," said Greenpeace in the new report.

The report highlights the fact that coal is still the number one fuel for power plants in the US and that Apple, Facebook, Microsoft, Yahoo and Google all have at data centres that still rely heavily on coal power.

Environmentalists Slam Cloud Of Internet Pollution

Data centre energy use is already huge and is growing rapidly, Greenpeace says, predicting that the cloud is set to be the fastest-growing facet of tech infrastructure over the next ten years.

The report also suggests that if global telecommunications and data centres were considered as a country it would have ranked fifth in the world for energy use in 2007, behind the US, China, Russia and Japan.

However, the Greenpeace report pointed to Yahoo as a company that it says is a model for data centre construction. The company is building a centre near Buffalo in New York state, that will get its energy from hydroelectric facilities. Yahoo said energy-efficiency was the top goal, with a building design that promotes air circulation.

POSCO Agreed Soft Coking Coal Price

POSCO To Pay $167 A Tonne for Soft Coking Coal

South Korea's POSCO, the world's fourth-largest steelmaker, is to pay Xstrata $167 per tonne for its April-June soft coking coal imports, according to a report by Reuters. The news agency quoted a source with knowledge of the deal.

The price compares with last year’s price of $80 per tonne last year.

Hard coking coal and pulverised coal injection (PCI) would be likely imported at $200 and $170 respectively, the same as Japanese and Chinese mills were paying.

Gindalbie To Sell All Karara Output To Ansteel

Gindalbie Signs $65 Billion Iron Ore Contract

Gindalbie Metals Ltd., has agreed to sell all its production from the Karara iron ore project in Western Australia to its partner in the project, China’s Anshan Iron & Steel Group (Ansteel).

The magnetite iron ore project in the Mid-West region may produce more than 30 million tons annually for 30 years, the Perth-based company said in a statement today and the company put a value of $65 billion on total sales over the life of the mine.

"Stage one production, based on a rate of 8 million tons per annum, is scheduled to be commissioned in late 2011," the company said. "Based on the 2009 benchmark iron ore fines price and stage one production rate, the off-take agreement is worth approximately $580 million a year, increasing to more than $2.1 billion a year at the project's potential production rate."

Vale, BHP End Annual Iron Ore Talks

Iron Ore Benchmark Pricing On Verge Of Being Consigned To History

Vale SA, and BHP Billiton Ltd. have announced that they have signed a number of short-term contracts with Asian steel mills, with Vale gaining a 90 percent increase in its prices.

Sumitomo Metal Industries Co., has agreed to pay Vale $100 to $110 a metric ton for the quarter starting April 1, spokesman Toshifumi Matsui said on Tuesday, adding that the pact is a tentative agreement.

Nippon Steel Corp., Japan’s largest steelmaker, has also reached a “tentative” price agreement for the April quarter, the company’s President Shoji Muneoka said today in Tokyo without providing pricing details. However, he added that his company still believes that annual benchmark prices are desirable and that his company would be contacting domestic customers about the change to quarterly pricing.

BHP, the largest mining company, today said it will sell the majority of its production to Asian steel mills on shorter-term contracts. The company gave no details of its pricing.

The pricing details mark a break with the 40-year old system of setting a benchmark price. “Details of the agreements with our customers are subject to confidentiality agreements,” said BHP spokesman Amanda Buckley. Ms Buckley declined to comment either on the price agreed or the names of the customers that had agreed those prices.

Pedro Gutemberg, director for marketing and research at Vale, said in Beijing today that his company wanted a new pricing system to improve pricing flexibility, predictability and transparency. Mr Gutenberg didn’t confirm the price agreement with Sumitomo Metal.

“For us, the benchmark system is old, so we decided to go this route,” he added.

Chinese steelmakers are said to be still in talks with the iron ore producers over pricing issues.

Carmen Completes Fifth Copper Shipment

Carmen Copper Completes Fifth Shipment

Philippines copper company, Carmen Copper, has completed its fifth shipment of copper concentrate for the year.

The company’s parent, Atlas Consolidated Mining and Development Corp. said its subsidiary delivered 5,277.62 wet metric tons of copper concentrates from its Toledo mine in Cebu City to Xiamen, China.

The shipment contained 29.50% copper, 3.01 grams gold/dry metric ton (dmt), and 28.3 grams silver/dmt based on preliminary assays.

To date, Carmen Copper has exported 89,037 dmt of copper concentrates to China.

Chinalco: Simandou Due Diligence Ongoing

Chinalco President Xiong Weiping has said his company is in the midst of conducting due diligence on its $1.35 billion deal with Rio Tinto PLC to develop the Simandou iron ore mine in Guinea.

Speaking in his capacity as chairman of Aluminum Corp. of China Ltd, Chinalco's listed unit known as Chalco, Xiong said Chinalco will decide on starting the feasibility study on the project once due diligence is completed.

On 21 March Chinalco and Rio Tinto agreed on a non-binding memorandum of understanding to set up a joint venture to develop the west African property, the first major step between the two companies to repair relations after Chinalco's plan to invest $19.5 billion in Rio Tinto collapsed last June.

Macarthur Resumes Shipments From Dalrymple

Australia’s Macarthur Coal has resumed coal shipments from the Dalrymple Bay Coal Terminal in Queensland following the closure of the terminal following a cyclone.

Macarthur declared force majeure on its coal shipments on 19 March. Similarly, BHP Billiton declared force majeure last week but has said that its operations will take 3-6 weeks to resume full operations. The Blackwater and Goonyella rail lines, which transport coal to and from the mines were also halted.

Hard coking coal prices have risen sharply in the past two weeks on the back of the supply disruptions. Prices of premium quality coal have been selling at $240 a tonne, while offer prices for the steel feed are between $240-$250 a tonne, up from $220-$225 a tonne about two weeks ago, traders said.

Japanese Steelmakers Set To Agree Iron Price Doubling

Major Japanese steelmakers and Brazilian miner Companhia Vale do Rio Doce are expected to agree to an increase in the price of iron ore of almost 100 per cent to about $110 per metric ton by the end of this month, the Yomiuri Shimbun has reported.

The paper said that Japanese steelmakers also are negotiating prices with two other mining companies – BHP Billiton and Rio Tinto - and will reach agreements on similar prices.

It is also likely that they will agree to the introduction of a new system under which prices would be reviewed every three months, a move that could lead to a further increase in July.

The average price for spot trades has risen to between $130 to $150 per ton since February--up from $60 a tonne last spring.

Chinese Firm Enquires About Pakistan Iron Ore

Beijing Kuntai Investment Co Limited, a leading Chinese Company has expressed its intention to purchase iron ore from Pakistan,

The Daily Times of Lahore reports that a trade inquiry has been sent to the Commercial Section Embassy of Pakistan in China.

Pakistan has iron ore deposits of more than 780 million tonnes.

Qatar Aluminium Ready To Open New Plant

Qatar Aluminium (Qatalum), will 0 inaugurate its new plant in Mesaieed Industrial City , 40km south if the nation’s capital, Doha, on April 12,.

The new plant aims to produce 585,000 tonnes per year of primary aluminium, which will see the company imports up to 1.1mn tonnes of alumina, 223,000 tonnes of calcined petroleum coke and 50,000 tonnes of liquid coal tar pitch.

Qatalum has incorporated port and storage areas into the new plant to receive these raw materials.

Chief executive Jan Arve Haugan described the plant as “the world’s most efficient and environmentally friendly aluminium smelter …. leading the way for the Gulf in high-quality aluminium products, cutting-edge technology and operational excellence.”

The company made it sfirst shipment of aluminium foundry alloys at the end of 2009.

Production Resumes At Zambian Nickel Mine

Zambia's only nickel mine, the Munali Nickel Mine, re-opened on Friday following an opening ceremony by Zambian President Rupiah Banda.

The mine was bought by China's Jinchuan Corporation last June after its previous owner, Albidon Ltd of Australia, halted operations following a fall in prices. The mine resumed operations on Friday and is expected to reach an output of 750,000 tons nickel ore in 2010.

President Banda attended a ceremony to mark the resumption at the mine, about 85 kilometers south from the Zambian capital city Lusaka and praised efforts made by Jinchuan, the largest nickel producer in Asia, in taking over the mine, which had led to unemployment for over 1,000 miners.

"I am pleased to know that the mine planned to increase the number of employees once the mine boosted its output," the president said.

The mine is planning to upgrade the mine from the current 750, 000 tons per annum of ore to 1.2 million tons of ore by 2011.

Ore production at Munali in the first two months of 2009 was 74,000 tons, below the forecast 87,000 tons, mainly due to a lack of equipment

Yang Zhiqiang, president of Jinchuan Corporation, said that Jinchuan will experience a prosperous development in Africa via combination of advanced technology from the Chinese side with the rich resources of the Zambian mine, which has proven reserves of 100,000 tons of nickel metal.

Baosteel Clarifies Chairman's Comments, Re-iterates Support For Pricing System

Despite hinting earlier this week that it may back a shift to quarterly contracts, Baosteel Group Corp., China’s lead negotiator for annual ore price talks with global miners, on Friday emphasised that it supports the existing system of pricing iron ore once a year. However, the company acknowledged that the 40-year-old format could be altered.


A company media official told Dow Jones Newswires that media reports on Thursday citing Chairman Xu Lejiang's remarks – made on the sidelines of a shipping conference in Shanghai - had missed the context setting out Baosteel's support for the existing system.

"The benchmark annual pricing system was set up 40 years ago, and miners, steel mills and the market have changed a lot since then, so it is reasonable that the system has some changes and adjustments now," the Baosteel official said, repeating what he said were Xu's actual remarks.


"But Baosteel supports the long-term annual contract system. This system is beneficial for steel mills and raw material suppliers to build a long-term and stable relationship based on cooperation. It also benefits the stability and prosperity of the industry chain."

Hazelwood Announces Increase In Big Hill Tungsten Resource

Australian miner, Hazelwood Resources, which is completing feasibility studies on its Big Hill Tungsten Deposit in Western Australia’s Pilbara region, has announced an interim upgrade to the JORC Resource. Results show an increase in higher category resources of 72%. Further resource upgrades are expected as drilling continues.

Production at Big Hill is due to start in 2011 and will produce around 3% of the world’s supply of primary mined tungsten.

Hazelwood announced earlier this week its acquisition of a majority stake in a ferrotungsten project in Vietnam that is expected to be commissioned later this year.

“The Big Hill deposit is mostly near the surface and needs almost no stripping to get the mine started. The metallurgy is proven through extensive testwork and we are currently doing significant pilot scale testing," said Hazelwood Managing Director Terry Butler-Blaxell.

"We can bulk mine and process at low cut-off grades and therefore mine more of the deposit,” he added.

Chinese Zinc Imports To Fall As Output Increases

Chinese zinc imports look set to fall by 60% this year as the country increases production of the metal.

Monica Gao of CBI China Co told a conference in Shenzhen on Thursday that she expects imports to fall to 278,000 tonnes from a level of 670,000 tons in 2009. This is despite demand rising from 4.25 to 4.69 million tons.

The government’s stimulus plan has led to a sharp increase in zinc production and smelters have restarted plants halted during the financial crisis as prices rose by 61% during the course of the year. Output increased 48% to 739,000 tons in the first two months of 2010, while copper production rose 16% to 702,000 tons, Ms Gao said. "China's domestic mining won't be able to meet smelting needs as most new capacity added last year will be put into production this year," she added.

Zinc stockpiles have increased to more than double the amount stored in warehouses monitored by the Shanghai Futures Exchange after output jumped, according to Ms Gao. Inventories in commercial warehouses in Shanghai and Guangdong increased to about 460,000 tons in the middle of this month from 380,000 tons at the end of 2009.

"High metal stocks seem to have little impact on prices," said Huw Roberts, an analyst at CHR Metals Ltd, in Shenzhen on Thursday. "Should fund investors continue to buy metals and support prices at, or above, current levels, mines and smelters will enjoy a good year," he said.

The country's zinc demand will climb by more than 10 percent this year as economic growth of 8 percent boosts demand from automakers and builders, He Renchun, president of Hunan Nonferrous Metals Corp, told the People’s Daily. Hunan Nonferrous is China's largest producer of zinc.

Essar Buys Indonesian Coal Mines

Local media reports from Indonesia suggest that Essar has acquired the Aries coal mines in Indonesia. The purchase will give Essar secured access to an additional 100 million tonnes of thermal coal resources and mineable reserves of 64 million tonnes.

Essar is currently building six power stations in India which will increase its power capacity from 1220Mw to 6100Mw by 2012.

The transaction is expected to be completed by April.

China To Probe Stored Iron Ore Quality

A number of Chinese government agencies, including the Ministries of Commerce, Industry and Information Technology, and Transport, are to investigate claims that some of the iron ore in storage at major Chinese ports has been adulterated.

The China Iron and Steel Association (CISA) and the Chamber of Commerce of Metals, Minerals & Chemical Importers & Exporters will also join the investigation, which has been triggered by claims that some of the iron ore has been adulterated.

CISA has been calling for iron ore imports to be regulated to stabilise prices and to eliminate the difference between long-term and spot prices.

Xi Xiangchun, chief analyst of Mysteel, said Chinese steel mills should seek compensation if the investigation finds the stored iron ore is of low quality. Mysteel forecasts that China will increase steel supplies by 8.6% this year to 621.5 million tons.

China To Finance =Russian Iron Ore Projects

The Russian miner Petropavlovsk PLC, previously known as Peter Hambro Mining, on Tuesday, has signed a cooperation framework agreement with two Chinese companies for the co-financing and development of two of its iron ore projects: Kimkan and Sutara (K&S) and Garinskoye in Russia's Far East.

Petropavlovsk has agreed an indicative loan term-sheet with Industrial and Commercial Bank of China (ICBC) for the financing of Stage 1 of the K&S iron ore project, and has also entered into a cooperation framework agreement jointly with China National Electric Equipment Corporation (CNEEC) and ICBC for the former to act as engineering, procurement and construction contractors and the latter to act as finance providers, for the development of the K&S and Garinskoye projects.

The ten-year loan, which would constitute 85 percent of the total amount of the proposed cost of the contract for the construction of the mining and beneficiation plant and thermal power station, is currently estimated at about $400 million, with an upper limit of $500 million for the inclusion of other possible items.

End In Sight For Iron Ore Benchmark System

The end seems to be in sight for the four-decade old system of iron ore benchmark pricing after Baosteel Group, representing China in the iron ore price talks, said that it was reasonable to expect adjustments in the way the commodity is prices.

Baosteel chairman, Xu Lejiang said today in Shanghai that the break with the traditional method of agreeing an annual price has led to tensions between the miners – Rio Tinto, BHP Billiton and Vale – and the steelmakers led by Baosteel.

“The contract pricing system needs improvement, and some adjustments are reasonable,” he said. “There’s still an iron ore supply shortage now,” Mr Xu added, “but the situation will turn around.”

Vale, the Brazilian miner which is the largest iron ore exporter, is seeking shorter-term contracts that could boost prices by between 90 percent and 110 percent, and wants to price iron ore on a quarterly basis in talks with customers. Meanwhile Sam Walsh, the head of iron ore at second largest miner, Rio Tinto said yesterday that “the customers are well and truly aware of the pressure on annual prices. The system is broken.” The third largest miner, BHP Billiton, wants to move to index-based pricing.

Traditionally, prices were set annually from 1 April each year.

Sinosteel Plans Expansion At Zimbabwe Ferrochrome Plant

Sinosteel Corp., China’s biggest iron-ore trader, plans to expand capacity at its ferrochrome plant in Zimbabwe by as much as 30 percent, a company executive said on Thursday.

“We are planning to expand the ferrochrome capacity there by 50,000-60,000 tons, from the current 200,000 tons a year,” Zhang Suwei, managing director at Sinosteel South Africa (Pty) Ltd., said in an interview in Hong Kong with Bloomsberg today.

East China Mineral Snaps Up Brazilian Iron Ore Mine

East China Mineral Exploration and Development Bureau (ECE) is to buy the Itaminas iron ore mine in Brazil for $1.2 billion. The two companies signed a letter of intent on Wednesday according to Winbros, a consultant hired by Itaminas for the transaction.


The mine has debts of $400 million and an estimated reserve of 1.3 billion tonnes of iron ore reserves and is said to be able to produce 25 million tonnes per annum with additional investment,

ECE, which has assets in Indonesia, Australia and Mexico, last September took a controlling stake in London-listed African copper miner Weatherly International Plc which has four copper mines in Namibia.

Oxford Resources In $250 Million IPO

US coal miner Oxford Resource Partners filed papers with regulators on Wednesday for an initial public offering to raise up to $250 million.

The company, based in Coshocton, Ohio, has reserves in northern Appalachia and the Illinois Basin. Its subsidiaries mine the reserves.

It said it would sell the shares as soon as possible once the registration statement becomes effective.

Chilean Company Buys Stake In China Molybdenum Subsidiary

Chile’s Molibdenos Y Metales S.A. has signed an agreement with China Molybdenum (China Moly) to purchase a 50% stake in its subsidiary, Luoyang High-Tech Molybdenum & Tungsten Material (LuoMo High-Tech). China Moly, a partly state-owned company, will own the remaining 50% of LuoMo High-Tech, which will be run as a joint venture.

The acquisition will help Molymet gain a foothold in the Chinese market, a key target for the company's overall growth strategy. The purchase price for the 50% ownership interest is USD37.7 million (Yuan 258 million) and is expected to be funded with cash on hand. The transaction will have a small leveraging affect on Molymet's balance sheet with net leverage increasing by 0.3 times (x) to around 1.0x from 0.7x net debt to EBITDA as of Dec. 31, 2009, still consistent with Molymet's rating category. Post-closing, liquidity is expected to remain strong with Cash to Short-Term Debt coverage at around 3.7x. In addition, Molymet also has access to available credit lines with 12 different banks totaling USD577 million.


This purchase is consistent with Molymet's publicly stated strategy of expanding its presence in China. LuoMo High-Tech is a Chinese metallic molybdenum producer. The transaction is expected to close in June following confirmation from Molymet and China Moly's boards, and final approval from Chinese authorities.

Aquila Says Belvedere Will Cost $2.81 Billion To Build

Australian miner, Aquila Resources, has announced that a pre-feasibility study of the proposed Belvedere coking coal project in Queensland indicates a cost of about $2.81 billion to build.

Aquila has a 24.5 per cent interest in the project. Brazilian mining company Vale owns 51 per cent and conducted the study. Vale has an option to buy Aquila's interest at "fair market value" although it has yet to indicate whether or not it will exercise its option.

Construction of the mine could commence in 2014 with the first coal mined in 2016.

Huaneng Power Sees Coal Prices Rising 8 Per Cent

Huaneng Power International Inc. China's biggest listed electricity producer, predicted that coal prices will rise eight percent in 2010, compared with a 13 percent fall in 2009.

The company will have to bear additional coal costs of about 3.2 billion yuan this year. As revenue growth stemmed from higher electricity output may not be able to cover coal costs, the company expects 2010 profits to be lower than in 2009.

China To Remain Net Coal Importer

Wu Chenghou, a senior official within the China Coal Transportation and Marketing Association, has suggested that the country will remain a net coal importer for the near future. However, he said that he expects imports to shrink this year from last year’s levels.

Wu predicted that China's annual energy demand would reach about five billion metric tons (tonnes) of standard coal. Raw coal demand by 2020 would be 4.53 billion tonnes. With domestic coal resources insufficient to meet demand, China will need to import coal.

Fan Liya from Shanxi Coking Coal Group said that China's coal supply will be short in the first quarter, driving up coal prices in the same period. The second and third quarters will see balanced supply and demand, as China's major coal producer Shanxi province is completing the coal resource integration and new capacities will be put into production in the second half of the year. Coal prices will likely fall slightly during the two quarters. Generally, prices during the year will remain stable with slight rise. Specifically, steam coal prices will stay high but fluctuate largely, while coking coal prices will fluctuate slightly at a high level.

Fan expected China's coal output to exceed 3.3 billion tonnes in 2010, up over 10 percent year on year. The annual coal imports are estimated to surpass 80 million tonnes, lower than that in 2009, while exports will likely reach 30 million tonnes.

Wang Junwei, manager of Sinomet International Corporation's Mines Department, echoed that China's coking coal imports would remain high in 2010, but lower than last year.

Ferrous Resources In $600 Million IPO

Iron ore miner, Ferrous Resources do Brasil Ltda., is seeking to raise about $600 million in a London initial public offering, according to sources close to the company.

JPMorgan Cazenove Ltd., Morgan Stanley and Deutsche Bank AG are said to be lead arrangers for the IPO while BMO Capital Markets, Liberum Capital Ltd. and RBC Capital Markets are co- lead arrangers of the sale. The company is looking to sell its shares as soon as the end of next month,
Ferrous, which was formed in 2007, is looking to build the $3 billion first stage of the Viga mining project in the Brazilian state of Minas Gerais.

Mahagenco Looks To Import 3.35 Million Tonnes Of Coal

Mahegenco, the state-owned Maharashtra State Power Generation Co, has announced that it is looking to import 3.35 million tons of steam or thermal coal in the year commencing 1 April 2010, an increase of 40 per cent on the 2.4 million tons the company will import in the year ended 31 March.

The company supplies power to the Indian state of Maharashtra, which includes the country’s commercial centre, Mumbai.

Mahagenco has said that it will be looking at prices linked to global coal prices instead of fixed price contracts.

A tender notice has been sent to traders this week to feed the company’s power plants at Nasik, Bhusawal, Khaparkheda, Parli and Chandrapur. Bids are due in on 13 April.

Xstrata Looking At Irish Zinc Project

The chief executive of global miner, Xstrata, has said that his company is interested in buying some of Anglo American’s zinc assets, which were put up for sale last year with a reported price tag of $US800 million.

"We are interested in Anglo's zinc business, and are looking at probably all assets," Santiago Zaldumbide said. "We're particularly interested in Anglo's Lisheen mine [in Ireland], which is close to one of our interests." Xstrata has a majority stake in the Pallas mine.

Vale To Adopt Index Pricing For Iron Ore

Brazilian iron ore miner Vale SA is to adopt a different iron ore pricing system and has more than doubled rates on some types of ore, the Sao Paulo newspaper, Valor Economico has reported, citing a note the company has sent to its clients.

The new prices will be valid from April until June and Vale will use the Platts Iodex index instead of a benchmark pricing system.

The price of Carajas sinter feed will increase to $122.20 per metric ton from last year’s reference price of $57, the newspaper said.

South Africa Wants Iron Ore Futures Exchange

South Africa wants iron ore to trade on a futures exchange to create a more transparent benchmark for pricing deals, one of the country's top mining officials said on Monday.

"The most important thing for me is the creation of a transparent instrument for price determination," said Sandile Nogxina, South Africa's Director General of the Ministry of Mineral Resources told Reuters on the sidelines of the UN commodity conference in Geneva.

"It is up for the various players to take this forward. What I'm proposing is similar to aluminium on the London Metals Exchange (LME). Let iron ore also be traded so it is more open."

China Coal Imports To Exceed 30 Million Tons

Coking coal imports by China, the world’s biggest steelmaker, will exceed 30 million metric tons this year as domestic supplies can’t keep pace with demand from mills; so said Teck Resources Ltd, CEO Don Lindsay at a conference in Singapore.

With Chinese steel output continuing to rise, demand for coking coal will also increase. China’s coking coal imports rose five-fold in 2009 from 6.85 million tons to 34.4 million tons after the government closed smaller coal mines in the wake of a number of high-profile mining accidents.

“China is hungry for commodities on an unprecedented scale,” said Mr Lindsay. “Domestic supply of high-quality coking coal required will not be able to keep pace with steel production growth.”

Teck Resources is the second-largest seaborne shipper of coal and wants to boost coking coal output by 50 percent within five years, Mr Lindsay said.

Newcastle Coal Shipments Fall 24 Per Cent

Coal shipments from Australia’s Newcastle port, the world’s biggest coal export harbour, fell 24 percent last week. The number of vessels waiting to load also fell.
The volume exported in the week ended 7 a.m. local time on Monday dropped to 1.11 million metric tons from 1.46 million tons in the preceding week, Newcastle Port Corp. said.

Fifty vessels, waiting to load 3.94 million tons of coal, were outside the harbour, down from 55 a week earlier with ships waiting to load for an average of 15.64 days, from 16.35 days a week earlier, the port authority said. General cargo vessels wait an average of 0.13 days.

Hazelwood Buys 60 Per Cent Stake In Ferrotungsten Project

Australian miner, Hazelwood Resources, has acquired a 60% interest in a new ferrotungsten plant in Vietnam as part of its vertical integration strategy. The plant is expected to be commissioned towards the end of this year and will be located near the port of Haiphong in northern Vietnam.

Hazelwood will pay $825,000 to acquire 60% of the share capital of Hong Kong Based Asia Tungsten Products Company Ltd and will contribute 60% of the capex and provide working capital as a loan. Capex for the first stage the project is approximately $US16.3m.

The plant will have the capability of providing 25% of the world’s ferrotungsten and will be able to operate on feedstock from multiple sources, including concentrate from Hazelwood’s Big Hill Tungsten Project in Western Australia.

At full capacity projected annual turnovers are $US150m at the current ferrotungsten price of $US31.50/kg. Profit after tax for ATC HK is projected at $US32m per annum from 2012. The project is anticipated to be cashflow positive late 2011/early 2012.

Formosa Plastics Secures Vietnam Iron Ore Supplies

Taiwan’s Formosa Plastics Group, has said that it has secured iron ore supplies for its planned Vietnamese steel mill.

An un-named official from the company says it has signed a letter of intent for an annual supply of 12 million metric tonnes from BHP Billiton, Rio Tinto and Vale.

The supply is scheduled to start from 2013, when the Vietnamese steel complex begins operations.

The group will invest 280 billion Taiwan dollars (nine billion US dollars) in a steel complex with an initial annual capacity of 7.5 million tonnes in central Vietnam’s Ha Tinh province.

Construction is planned to begin soon after Vietnamese authorities transfer the land needed for the steel plant, which they have committed to do by the end of April.

Formosa Plastics Group has interests in petrochemicals, semiconductors and biochemicals.

Peru's Gold Output Up, Silver Down

Peru's Energy and Mines Ministry has reported that the country’s gold production for February was 522,373 ounces, compared to 495,337 ounces in February 2008 – rise of 5.5%.

The increase was attributed to higher output at the Minera Barrick Misquichilca mine, as well as at mines owned by Compañia Minera San Simon, Companña Minera Podersoa, Minera Suyamarca and Minera Laytaruma.

Peru also mined 9,596,228 ounces of silver last month, an 11% decrease compared to February 2009’s 10,819,793 ounces of silver were produced.

Meanwhile lead production declined by 11% over the past year, tungsten dropped by 2% and molybdenum rose 13% during the same period.

India To Import Colombian Coal

India’s biggest coal importer, Adani Enterprises Ltd., has agreed to buy thermal coal from Colombia for the first time. A company official said that surging electricity demand meant the company had to diversify its purchases.

The first cargo of fuel – expected to be at least 110,000 deadweight tons – is expected to land at either Mundra or Dahej ports on India’s west coast.

Although neither the source of the coal nor the quantity have been indentified it is known that Cerrejon, the Colombian company that runs the world’s largest open-cast coal mine, has been touting for sales in India after describing prices there as “much better” than those in Europe.

BHP Billiton Ltd., Anglo American Plc and Xstrata Plc each own a third of Cerrejon, which will produce 31 million to 32 million metric tons of coal in 2010. Last year, the mine cut production because of weak demand in Europe and the U.S. Colombian coal accounts for about 10 per cent of global coal trade.

India imported 60 million tons of coal in 2009 – almost double the 2008 figures – and that figure is exported to hit 200 million tons by 2012, according to Macquarie Group. Imports in February were a little more than 6 million tons, up by more than 20 per cent of a year earlier.

Coal Output Up 18 Per Cent At China Shenhua Energy

China Shenhua Energy Co Ltd, the country's largest coal producer, announced that coal output rose 18 per cent year-on-year in February. Output was 17.7 million tons.

Sales volume increased 31.3% year-on-year, to 19.7 million tons, of which exports accounted for 1.1 million tons.

This year, Shenhua aims to produce 229 million tons of coal, 8.9% more than in the previous year, with coal sales increasing 7% year on year to reach 272 million tons.

Xiangguang Copper Breaks Off CuDeco Talks

China's Xiangguang Copper has terminated talks with Australian miner CuDeco Ltd over the potential financing and purchase of the Rocklands project in Queensland.

Xiangguang said it is evaluating other, similar opportunities.

Earlier, the company said it was talking with CeDeco for 15 percent stake in the latter's Rocklands copper project.

Xiangguang Copper is a copper refinery located in Shandong province of eastern China. It is seeking high-quality copper concentrate resources to increase its annual cathode copper refining capacity to 400,000 metric tons (tonnes).

Arrow Agrees To Shell, PetroChina Offer

Australia's Arrow Energy Ltd agreed to a takeover offer from Royal Dutch Shell and PetroChina.

A fresh offer was made of A$4.70 a share plus one share in a new listed company called Dart Energy and values Arrow at A$3.4 billion ($3.1 billion) in return for most of its Australian assets. Arrow 's Managing Director Nick Davies told reporters on Monday he was "reasonably confident" that shareholders would approve the revised offer.

Dart will contain Arrow’s Asian exploration assets and some of its Australian assets.
The new bid will give China its first stake in Australia's coal-seam gas industry and followed two weeks of talks after Shell and PetroChina made an offer that investors considered too low.

The takeover needs approval from Australia's Foreign Investment Review Board, which is likely to study it closely after regulators said they wanted to cap state-owned companies' stakes in Australia's top resource firms to 15 percent.
Disappointed investors, mostly hedge funds expecting a bigger offer, sold the shares, which were down 3.6 percent to A$5.10.

Iron Ore Miners, Steelmakers Moving Away From Annual Contract

London’s Financial Times newspaper reports on Monday that iron ore miners and Japanese steelmakers have reached a tentative agreement to adopt short-term contracts linked to the spot market, bringing to an end the 40-year old annual benchmark system.

"There is an understanding on both sides to move to quarterly pricing," the newspaper quoted a source involved in the talks as saying. The source added that a final deal will be settled in a matter of weeks.

Reuters confirmed sources in Asia as saying that negotiations were continuing about a move to quarterly pricing.

"Korea, Japan and China have received 90-100 percent hike offers based on quarterly systems from miners, which Japanese steelmakers seem to move toward accepting," a source at a large Asia steelmaker close to the negotiations said.

One sources suggested that Japanese steel mills are ready to accept the change as they are more concerned about security of supply than prices and are seeking to safeguard tonnage rather than prices.

Current spot iron ore prices are trading at twice the level of the 2009 benchmark.

A move towards quarterly coking coal contracts was announced earlier this month and analysts expect iron ore to adopt a similar system.

Rio Tinto, Chinalco Agree To Develop Guinea Iron Ore Project

Rio Tinto and Chinalco have agreed to develop the Simandou iron ore mine in Guinea.

Chinalco will pay $1.3bn for 47% of the project.

The deal comes amid tensions between China and Australia over next week's trial of four Rio employees on bribery and commercial spying charges.

China has rejected requests for the trial to be fully open to diplomats, citing concerns over trading secrets.

Grupo Mexico Shuts San Luis Potosi Copper Smelter

Grupo Mexico copper-mining subsidiary, Southern Copper, said on Friday it had closed its copper smelter in San Luis Potosi, Mexico.

In a filing with the U.S. Securities and Exchange Commission Grupo Mexico said that all 300 workers at the smelter, which had been used to treat copper concentrate from a number of mines in Mexico, will be laid off.

No reason was given and the company expects no material charges due to the closure.

The smelter had an annual capacity of 230,000 tonnes per year, according to the company's website.

Vale Asks For 100 Per Cent Price Increase

Brazilian miner Vale S.A. has asked Chinese steel mills for an increase of between 90 and 100% in the 2010 iron ore benchmark price, the China Iron and Steel Association Vice Chairman Luo Bingsheng said on Friday.

Vale first proposed a 90% increase, then later increased this to 100%, Mr Luo said at an industry conference.

Zimbabwe Suspends Chrome Ore Export Ban

Zimbabwe has suspended a ban on the export of raw chrome ore. The ban will be lifted for an 18-month period during which small-scale miners will be able to export the mineral.

The ban was brought in last year when the Zimbabwean government permitted only trade in refined chrome products, a move which put many small-scale exporters out of business as they had no capabilities to refine the ore, however this result has led Mines and Mining Development Minister Obert Mpofu to announce a lifting of the ban.

“We had imposed the ban to ensure that producers exported value-added products and not just raw chrome because, that way, the country was losing millions in potential revenue.But we have shelved this for 18 months” Mr Mpofu explained.

The minister also said that the government has relaxed legislation governing the gold sector to facilitate the entry of local enterprises into the sector.

“We have . . . allowed small-scale gold-miners to access licences to buy and sell their own gold. Because of our previous regulations that criminalised dealing in and possession of gold, these people were smuggling it to South Africa or selling it to illegal dealers here.” Mr Mpofu said. “Government was losing a lot money that way, but now the dealers can even buy from the gold panners and sell directly to the market.”

CBH Recommends Toho Bid

Australian zinc and lead miner CBH Resources is recommending a revised joint venture deal and bid for part of the company from its largest shareholder Toho Zinc Japan.

The move follows a suspension of the company’s shares after Toho unveiled a rival offer to a $290 million bid from Belgium’s Nyrstar.

CBH said it preferred the Toho proposal as Nyrstar's bid was conditional on acquiring all CBH's convertible notes and was also superior in terms of de-leveraging the company. Toho had earlier advised CBH that it would not support the Nyrstar bid as CBH’s major shareholder with a 23 per cent stake. It also holds just over 50 per cent of outstanding loan notes.

The Toho deal also includes a sale of 50 per cent of the Rasp zinc project at Broken Hill for $57.5m, to a joint venture between the two parties for the ownership and development of the mine.

Toho will make a partial takeover offer for up to 49.9 per cent in CBH at 25 cents a share valuing Toho’s offer for the shares it does not already own at $76 million. The offer compares with Nyrstar's revised offer of 19.5c for the whole of the company.

"Toho's revised proposal will provide CBH shareholders with the best of both worlds," CBH managing director Stephen Dennis.

"Shareholders will be able to receive significant near term gains on a portion of their CBH shares, and they will also have the opportunity to participate in the future growth of the company through the development of the Rasp project and the planned increase in production at the Endeavor Mine.

"The de-levering of the company, along with Toho's undertaking to support CBH in financing the Rasp Project, will also ensure that this important new mine is brought quickly into production."

Indian Steel Prices Set To Rise

Indian steel prices look set to rise next month as rising raw material prices look set to take effect. JSW, Tata and SAIL all look set to increase their prices by about 10-20% according to some industry sources.

Coking coal prices have risen by over 50% over the past few months. BHP Billiton recently agreed a 55% rise with the major Japanese steelmakers for the April-June quarter.

Seshagiri Rao, Joint MD and group CFO of JSW Steel, told the Times Of India that adecision will be taken next month. "We are keeping a watch on the international pricing scenario. We will revisit our pricing structure next month." Mr Rao has also been quoted as saying: "Cost pressures are very strong at the moment. Prices are not affordable... in the short-term we have to pass through this cycle."

Orissa Receives Eight Coal Mining Operations

The government of the Indian state of Orissa has received eight proposals from companies keen to start coal mining in the Angul district in the centre of the state. Terms and conditions have now been issued for four of the applications while four others are still under process.

Steel and mines minister Raghunath Mohanty said that Jindal Steel and Power Ltd (JSPL), Monnet Ispat and Energy Ltd., Utkal Coal, Kalinga Mines Ltd have been issued terms and conditions for coal mining while National Aluminium Company Ltd (Nalco), Tata Sponge Iron Ltd, Bhushan Steel Ltd and Mandakini Coal Ltd are all having their applications considered.

Jindal Steel and Power Ltd (JSPL) and Monnet Ispat and Energy Ltd both propose to set up steel plants in Angul district. JSPL has signed a memorandum of understanding (MoU) for the establishment of a 6 million tonne per annum (mtpa) splant while Monnet Ispat is to set up a 0.25 mtpa steel plant.

Russia's Iron Ore Concentrate Production Rises 37 Per Cent

Figures released by Russia’s state statistics service showed that the country produced 37 per cent more iron ore concentrate in the first two months of 2010 than in the same period last year. Production was 14.7 million tonnes in January and February.

Coal output in the same period increased by 17 per cent to 53.8 million tons while metallurgical coke output stood at 4.5 million tons, up 40 per cent.

Arch Coal Bids $86 Million For Otter Creek Coal Tracts

US coal miner, Arch Coal, has bid $86 million plus future royalties for the right to mine half a billion tons of coal at the Otter Creek tracts near Ashland in the American state of Montana. The miner already has the rights to a neighbouring tract of 731 million tons.

Last month, Arch refused to pay a $143 million royalty to mine the coal.

The Montana Land Board meets Thursday to consider Arch's bid.

Chinalco Confirms Guinea, Mongolia Talks

Chinese state-owned nonferrous metals company, Chinalco, has said it is in talks with Rio Tinto about potential joint ventures in Mongolia and Guinea, according to reports in a Chinese newspaper on Wednesday.

The Oriental Morning Post quotes vice-president Lu Youqing as saying the companies are talking about developing joint-ventures for the Mongolian Oyu Tolgoi copper-gold project as well as the Simandou iron ore mine in Guinea.

Kazakhstan Looks To Increase Copper Production By A Quarter

Kazakhstan’s Deputy Prime Minister Aset Isekeshev has said he has plans to increase his country’s copper cathode production by almost a quarter within the next five years.

Speaking at mining conference in Astana, Mr Isekeshev has said that output will rise from its current level of 400,000 tons to 495,000 tons. The bulk of the increase will come from AO Kazzinc, part of Glencore International, which looks set to increase its production by 70,000 tons with the rest of the increase taken up by Kazakhmys Plc, Kazakhstan’s biggest copper miner.

The nation’s President, Nursultan Nazarbayev, said in January in an address to the nation that it must double metals production and exports within five years.

Kazakhmys has sought investment from China to fund new smelters and mines. The firm plans to complete its new Boschekul copper facility by 2014. China Development Bank has lent Kazakhmys $2.7 billion for 15 years at a rate of LIBOR plus 4.8 percent to finance the project which will produce about 100,000 tonnes of copper concentrate a year. The company is now seeking finance for another expansion project at Aktogai, Chief Executive Oleg Novachuk said separately at the conference.
"We are in talks with our strategic partners and hope to inform the market on the results by the end of this year," Novachuk told the same conference. "We need $2 billion."

Kazzinc has said it will build a $700 million copper facility this year near the border in the east of the country near to the border with China.

More Japanese Steelmakers Agree Quarterly Coal Contracts

In a further indication of a shift to quarterly raw materials contracts, more Japanese steelmakers have struck deals with coal miners for the April to June quarter.

JFE Holdings, Kobe Steel and Sumitomo Metal Industries have both agreed a price of $200 a tonne, up 55 percent from the deal for the previous financial year, the firms said on Wednesday. JFE and Kobe have signed deals with miners BHP, Rio and Teck Resources, while Sumitomo have agreed a deal with BHP.

While the steelmakers are all looking for a return to an annual contract from 1 July, the miners have the upper hand as they try to move to a system that reflects changes in the market, but which leaves the steelmakers exposed to greater volatility in cost and renders them exposed to the spot market.

Endocoal To Raise $17 Million

New South Wales coal miner, Endocoal, has lodged its prospectus with the Australian Securities and Investments Commission to explore for coal in Queensland's Bowen Basin.

The company had initially hoped to raise $12 million, however strong demand for the stock both in Australia and abroad has led the company to raise its target to $17 million. A European commodity trader and a Chinese coal miner are among those interested in the stock. 28.3 million new shares will be issued at 60c a share.

The company has 10 exploration tenements covering approximately 5000sq km and is focussing its exploration program on two lead projects – Orion Downs and Rockwood, where exploration drilling began in September 2009.

Results at Orion Downs have identified potential export-quality thermal coal within a number of shallow coal seams up to a total of 12 metres in thickness. Independent coal quality analysis has indicated that the coal may be suitable for export without the need for a wash plant. Drilling at Rockwood has also shown encouraging results, with thick seams of coal intersected at depths of less than 80 metres.

“Endocoal is well positioned to benefit from long-term growth and strong underlying demand in the global thermal and coking coal markets”' said managing director Rod Austin.

Trading in the shares is expected to begin on 29 April.

Bolivia Refuses Jindal Contract Modifications

The Bolivian government has said that it will not accept changes to a contract awarded to India's Jindal Steel and Power Ltd to develop a $2.1 billion iron ore and steel project at the El Mutun site in the east of the country near the Brazilian border.

A 40-year contract signed in late 2007 gives Jindal the right to mine about half the reserves at El Mutun which is believed to contain more than 40 billion tonnes of medium-grade iron ore.

However, the government now claims that Jindal rescheduled investments from late-2008 to the second half of 2009, which the company blamed on administrative delays.

As part of the project Jindal was to develop an integrated steel plant with annual capacity of 1.7 million tonnes. However the company has apparently approached the Bolivian government with a proposal to change the contract to reduce the quality of steel production at the proposed plant along with the quantity of steel produced.

"Unfortunately Jindal hasn't fulfilled its commitments with the state," Mining Minister Jose Pimentel told local radio, adding that the government will not accept the Jindal proposal.

China Wants To Stick With Iron Ore Mechanism

China’s Ministry of Commerce says it wants to stick with an annual pricing system for iron ore and has hinted that it may include “trade actions” to support its steelmakers in negotiations.

“We hope that suppliers, the steel association and Japanese and Korean steelmakers can together maintain the mechanism and prevent price volatility,” ministry spokesman Yao Jian said today in Beijing.

“As the world’s biggest iron ore consumers, Chinese steelmakers’ interests should be appropriately reflected in the price talks,” Yao said. “Before the price is decided, it’s hard to say what measures will be taken, but we do have policies in reserve.”
Yao didn't elaborate on what those policies might be.

Western Coal Announces Contracts and Sales Forecasts

Canada’s Western Coal Corporation has has negotiated a sales price of US$200 per tonne for its hard coking coal and US$170 per tonne for its low-volatile PCI coal for 2.5 million tonnes, or 75% of its sales in Asia for the 2011 fiscal year. These prices are for the period from April to June 2010 and represent an increase of 59% compared to the fiscal 2010 hard coking coal contracts and an 89% increase compared to the fiscal 2010 low-volatile PCI coal contracts.

Western Coal also expects to sell 6 million tonnes of coal in the next fiscal year, an increase of 75% over the current year. Met coal sales are expected to hit 4.8 million tonnes - 80% of sales.

Sales from the Canadian, US and UK operations are expected to be higher than 2010 by approximately 60%, 100% and 180%, respectively.

China Halts Rare Earth Mining Applications

China has stopped accepting applications for new mines to produce rare earth minerals until June 30, 2011, the country’s land ministry announced on Monday.

The policy is aimed at protecting resources and will help producers in price talks.
China plans to cap 2010 output of tungsten metal at 80,000 tons, antimony at 100,000 tons and rare earth at 89,200 tons, the land ministry said in a statement. It has also set targets for provinces and companies.

“The policy is aimed at protecting and effectively utilize China’s advantageous mineral resources,” the ministry said.

Patriot Sells Coal To Asian Steel Mills

US coal miner, Patriot Coal Corp, is to sell 1.5 million tons of metallurgical coal to Asia, the company announced on Monday.

The deal was done through Pennsylvania coal trader, Xcoal.

Under the terms of the deal "steel mills in the Pacific Rim" will take coal from Patriot's Panther and Winchester mines to be delivered between April 2010 and the early part of 2011.

"This transaction opens up new markets for our products," said Patriot Chief Executive Richard Whiting, predicting additional opportunities for Patriot to sell met coal to Asia.

"With this sale, we now expect our 2010 met coal shipments will be more than 7 million tons. This represents more than a 30 percent increase in total met shipments over 2009 levels," he said.

CBH Resources Receives Alternative To Nyrstar Bid

Australian lead and zinc miner CBH Resources halted trades in its shares on Tuesday after receiving an alternative to the takeover offer on the table from Belgium's Nyrstar.

The offer is believed to have come from CBH's largest shareholder, the Japanese company, Toho Zinc, in which Toho will take a maximum 49.9 per cent stake in CBH.

The company has set up a committee of independent directors to weigh up the merits of both the Nyrstar and Toho proposals.

The company expects to make an announcement before the Australian Stock Exchange opens on Thursday.

Nyrstar has offered $0.195 per CBH share and $750 per convertible note in a bid that values all shares and convertible notes at about $290 million. CBH rebuffes a previous Nyrstar bid at the beginning of the year.

NMDC Expects 40 Per Cent Rise In Iron Ore for Japan

Indian state-owned iron ore miner, NMDC said on Monday that it expects a 40 per cent rise in the price of iron ore it supplies to Japanese steel mills in the next year. Preliminary talks with the mills begin on Wednesday.

NMDC has long-term agreements with a number of Japanese steel firms and the company says that it expects prices of iron ore lumps to rise from $85 a tonne to around $110 a tonne, while iron ore fines will be rise from $61 to $85 a tonne.

Rio Tinto, Chinalco In Talks Over Guinea Iron Ore Field

Rio Tinto and Chinalco are in discussions regarding the development of the vast Simandou iron ore field in Guinea.

Talks have been taking place in Beijing ahead of a visit to China this weekend by Rio Tinto chief executive Tom Albanese.

Any deal is likely to see Chinalco finance the next stage of pre-development, while Rio will remain the senior partner in the venture.

The two were in talks last year about a $19 billion tie-up, but the deal fell apart last June amid recriminations on both sides. However, it seems the Chinese have kept the door open for other types of co-operation. Repairing relations is a top priority for Mr Albanese while Chinalco president Xiong Weiping has refrained from publicly criticising Rio.

Meanwhile, a report by a Chinese government body failed to apportion blame for the talks’ failure to either party. The State Council's Development Research Centre added "The failure of the merger did not mean no other co-operation opportunities existed, or the breaking of mutual relations."

The two companies are believed to have discussed iron ore exploration in China and bauxite and alumina refining interests in north Queensland.

Steel do Brasil Buys Iron Ore Assets

German-controlled Steel do Brasil has agreed to buy majority stakes in two Brazilian mining companies for $435 million.

In a regulatory filing distributed on Sunday it announced that it would buy 70 percent of Mhag Servicos de Mineracao for $245 million while in a separate transaction, it has agreed to pay $190 million to buy 80 percent of Mineracao Minas Bahia's iron ore Jiboia assets

In the filing the company said it would "increase its capital muscle substantially to conclude the acquisitions and develop its activities for the next two years," the filing said.

Huge Increase In Ukrainian Ferroalloy Production

Ukraine’s ferroalloy industry confirmed its recovery when the Association of Ukrainian Ferroalloy Producers (UkrFA) reported that production in the first two months of 2010 increased by 2.9 times to 240,700 metric tonnes compared to the first two months of last year.

Silico-manganese output rose 2.8 times to 158,100 mt, ferromanganese production rose 5.4 times to 46,100 mt; ferrosilicon output increased 2.2 times to 33,700 mt, and metallic manganese production rose 86.7 percent to 2,800 mt, all compared to the same period of 2009.

The three largest ferroalloy producers all reported significant increases: Nikopol Ferroalloy Plant, increased its output by three times to 148,600 mt, including 112,900 mt of silico-manganese and 35,700 mt of ferromanganese. Zaporozhye Ferro Alloys Plant increased its ferroalloys output by 2.6 times to 53,800 mt, including 31,600 mt of silicomanganese, 9,000 mt of ferrosilicon, 10,400 mt of ferromanganese, and 2,800 mt of metallic manganese. Stakhanov Ferroalloy Plant increased its output by 3.3 times year on year to 38,300 mt, including 24,700 mt of ferrosilicon and 13,600 mt of silico-manganese.

Richards Bay Coal Exports Fall 5 Per Cent In February

Coal exports from Richards Bay fell from 5.2 million tonnes in February last year to 4.94 million tonnes this year.

Stockpiles rose to 2.98 million tons at the end of February from 2.71 million in January. The terminal received 5.19 million tons in February when 714 trains offloaded coal.

Richards Bay is Africa’s largest coal terminal. By the end of this month export capacity is expected to hit 91 million tons a year.

Dannemora Commences Production For Iron Ore Deliveries

Swedish iron ore miner Dannemora, has started production of iron ore for trial deliveries.

The company has engaged Bergteamet AB has as a sub-contractor, and Bergteamet will produce approximately 160 000 tonnes of crude ore with sub-level caving from a level of 162 metres in the Ströms ore.

A temporary processing plant has been established outside the entrance down to the Ströms ore. The finished products will be gradually moved to Hargshamn for shipment to steelwork customers.

The mining and processing operation is expected to run from the middle of March until June, with gradual deliveries to specific customers.

Approximately 9,000 tonnes of iron ore products were delivered to Austrian steel company Voestalpine last year. Negotiations on long-term supply agreements are expected to begin after final testing and an overall evaluation of the blast furnace tests.

NTPC To Burn 27 Per Cent More Coal This Year

India’s largest electricity generator, NTPC, has announced that it will burn 27 per cent more coal this year.

The company’s chairman, RS Sharma, said that the company, which supplies 20 per cent of India’s power generation capacity, will burn 160 million metric tonnes of coal in the fiscal year beginning 1 April 2010 – up from 126 million tonnes in the current year.

Coal imports may be as much as 14 million tonnes. The country’s junior power minister, Bharatsinh Solanki, told parliament last week that India may need to import as much as 47 million tonnes of thermal coal for its power plants next year.

NTPC is looking to add 4000 megawatts to meet the country’s soaring demand for power in the coming year.

Donling Group To Reopen Baoji Smelter

The Dongling Group is to restart its 100,000-tonne-a-year lead and zinc smelter this month. The lead and zinc smelter near Baoji city in China’s Shaanxi province has been shut since August last year following accusations by locals that it was a source of lead poisoning.

Authorities closed the plant in August after local villagers broke into the plant to protest about alleged lead poisoning. Villagers living near the smelter have since been relocated.

The smelter has a capacity of about 33,000 tons lead and 66,000 tons zinc.

Australia Won't Interfere in Iron Ore Talks

Australian won’t be interfering in the iron ore price negotiations between China AND miners with significant interests in Australian.

“We recognize China’s market economy status, all we ask in return is it act in accordance with market principles and not seek to get the government involved,” Trade Minister Simon Crean told reporters in Canberra today.

Mr Crean’s comments came after some of China’s largest steelmakers wrote to the Chinese government to ask for help in the latest round of iron ore talks.

It was reported last week that the miners have walked out of talks, which are said to be taking place in Singapore.

Vale To Restart Production At Sudbury

Brazilian miner Vale is to bring in outside workers at its strike-bound Sudbury nickel and copper mining operations. Last week, 90 per cent of workers at the mine rejected the company’s offer of a new contract in a dispute that began last July.

Copper mining at Sudbury re-commence last September while the nickel smelter resumed production in January, processing nickel stockpiles using employees from other parts of the company. Nickel mining began in February using workers from an outside contractor.

In February, the company said it planned to resume nickel mining at its Coleman and Creighton mines in Sudbury using workers from an outside contractor.

Mined nickel will be smelted and shipped to the company's refinery in Wales, which will be running at full capacity by April, producing 3,600 tonnes per month of nickel.

Pakistan Government To Launch Iron Ore Exploration Plan

A report in the Pakistani newspaper, the Pakistan Observer, suggests that the government of Pakistan is to explore for local deposits of iron ore for industrial purposes. The plan is being formulated by the Engineering Development Board as part of the country’s national steel policy.

Under the plan 1.5 million tonnes of iron ore will be mined each year by 2020.

The Pakistani government and the EDB will also give incentives for investors in the steel sector.

The report did not specify where the exploration will take place.

Iron ore is widespread in Pakistan and since the late-eighties, discoveries have been made in Balochistan and Punjab. However, much of the iron ore is low-grade and the country’s steel mills import much of their supply.

Falcon Minerals Raises Capital For Collurabbie Project

Australian miner Falcon Minerals has announced the completion of a A$4 million capital raising through Bell Potter Securities Ltd. The funds will fast track exploration activities at Falcon’s 100% owned Nickel-Copper-PGE Collurabbie Project in Western Australia.

The raising, which is the maximum under the company's 15% capacity, will be applied to drilling campaigns at Collurabbie, the first of which is scheduled to commence late April 2010.

Victory Moly Encouraged By Mahala Results

Australia’s Victory Moly (ASX: VWM) has completed a detailed, three-dimensional, double-offset dipole-dipole Induced Polarisation (IP) geophysical survey over the Anomaly B prospect area at the company’s Malala Molybdenum Project, Sulawesi, Indonesia.
The IP survey was conducted by Khumsup Limited, an internationally recognised geophysical contracting company with specialised expertise in the acquisition of this style of IP data.
Perth-based Southern Geoscience Consultants (SGC) has undertaken data processing, modelling and interpretation.

The IP survey covered an area 3.2 km x 2.6 km centred on Anomaly B and was designed to identify the mineralised corridor believed to have the highest prospectivity for economic concentrations of molybdenum mineralisation.
Preliminary interpretation indicates the IP survey has defined the structurally-controlled contact zone between the Tinombo metasediments (highly chargeable) and the relatively less chargeable Malala Porphyry.

The total combined prospective length of these contact zones is now in excess of 4kms (the “Identified Contact Zone”) representing a significant increase to the Company’s existing target mineralisation area at Anomaly B.

Work to date at Anomaly B (exploration target of 105-115mt @ 660-900ppm over approximately 800m of the contact zone) is located within the north-eastern section of the Identified Contact Zone has demonstrated significant molybdenum mineralisation, which can be up to 250m true width.

Several historical drill holes have been completed within a corridor approximately 1km long on this contact at Anomaly B, with a number returning very significant mineralised intersections including; 234m @ 1,680ppm Mo (M12), 363m @ 600ppm Mo (M30) and 245m @ 1,200ppm Mo (M37).

The remaining part of the Identified Contact Zone (more than 3km), to the south-east and south-west, appears extremely similar to the north-eastern zone and remains largely untested by drilling providing significant demonstratable upside for the company to investigate.

The company said it is highly encouraged by this initial data and is on track to complete a comprehensive and detailed geological interpretation within the coming weeks.

During 2010, Victory West Moly has proposed to undertake a detailed drilling program to prove up the company’s initial Exploration Target, followed by an aggressive campaign designed to evaluate the remainder of the highly prospective contact zones with the objective of significantly increasing the company’s exploration target.

Nyrstar Wants Answers On CBH Bid

Australian miner, CBH Resources, is to decide shortly on whether an EGM called for 30 March to discuss a takeover from shareholder Toho Zinc, will go ahead after all.

Last week CBH received a bid from Belgian zinc miner, Nyrstar, who have now written to the company saying that it needs to know if the EGM is still to go ahead. CBH said that a preliminary response will be made between now and next Monday, when Nyrstar wants a response to its bid.
Nyrstar’s bid of A19.5c per share compares with an earlier Nyrstar bid of A13.5c per share.

Chinese Domestic Coal Prices May Rise To Spot Rate

Australian investment bank, Macquarie, has suggested that the domestic price of coking coal mined in China may rise to $200 a ton in the next quarter – nearer the current spot price. Since December the domestic price has been traded at a discount to the spot price of $15 to $20 a ton.



Macquaries’s Bonnie Liu said in a research report “w would expect the Chinese domestic price to edge upward imminently” in what she said was a “very tight market”.



Imported coal has feweer impurities than domestic coal and attracts a premium price, she said. This premium is making import sales more difficult, and imports may decline tobetween 40 million tons and 45 million tons in the next quarter, down from a rate of 60 million tons a year set in January.

Chinese Steel Mills Seek Government Intervention In Iron Ore Talks

A report in the China Securities Journal suggests that a number of major Chinese steelmakers have asked the country’s Premier, Wen Jiabao, to intervene in iron ore contract negotiations taking place between China’s steelmakers and the big three iron ore miners, Rio Tinto, BHP Billiton and Vale.

Leading officials of the China Iron & Steel Association and the heads of mills including Baosteel, Wuhan Iron & Steel, Anshan Iron & Steel and Hebei Iron & Steel, wrote to Mr Wen on Thursday asking him to take up the issue at a national level.

The miners are reportedly asking for a contract price rise of anything between 80 and 100 per cent, reflecting the current spot market prices. Last year, talks led by CISA failed to secure an agreement on benchmark prices. It is believed that Vale in particular wants an end to an annual contract price and a move to quarterly prices, while the chairman of Hebei Iron & Steel said on Thursday that many mills were now abandoning the traditional annual contracts in favour of deals starting on January 1.

Talks are now said to be on hold, with some sources suggesting that Vale had walked out of the talks.

Click here for an archive of stories on the 2010 iron ore benchmark talks.

South Africa's Pgm Production Up In January

Statistics SA announced on Thursday that the country’s production of platinum group metals increased by 3.3 per cent in January,

The agency said the sector made the most significant contribution to the country's overall mining production with a rise of 7.7 per cent over the course of the month. It was the first improvement since July 2008.

PGM mineral sales were 11.2 per cent lower in 2009 than in the previous year. The fall for the whole of the mining sector was 22.7 per cent.

Nyrstar Ups Bid For CBH

Australian zinc miner CBH Resources said on Friday that it has received another takeover offer.

Belgian group Nyrstar - the world's largest zinc miner - recently failed to acquire CBH in a A$220 million ($135.5 million) bid but has returned with a bid worth A$290 million. CBH turned down Nyrstar's original offer in January and instead sold its Rasp Zinc project to Toho Zinc its largest shareholder, to raise cash.

CBH is reactivating equipment, idled in 2008 when zinc prices crashed, that will allow it to more than double ore production to 850,000 tonnes at its main Endeavor mine, yielding about 59,000 tonnes of zinc metal and 30,000 tonnes of lead.

Shares in CBH jumped around 29% to 0.18 dollars. CBH said it believes the deal would provide superior value to shareholders than the alternative transaction proposed by Toho Zinc.

New Fortescue Iron Ore Project To Cost $9 Billion

Australian iron ore miner, Fortescue Metals Group has delivered an upbeat assessment on the current iron ore market. In a presentation to investors in New York, CEO Andrew Forrest said he sees prices strengthening as China's ability to meet its own iron ore requirements declining fast.

Fortescue also gave an update on its operations in Western Australia where production is currently running at 40 million tonnes a year. The company is aiming to increase this to 55 million tonnes within the next 12 months.

The company’s feasibility study for its 60 million tonne a year Solomon operation is nearing completion. Capital expenditure on the project was likely to total $8.9 billion with $3.2 billion on the first stage and with a second stage to add an extra 100 million tonnes a year costing about $5.7bn.

Fortescue also indicated it envisaged a third rail hub linking the company's planned magnetite mining operations to the new Anketell Point port south-west of Port Hedland in WA.

Fortescue and Aquila Resources Ltd are driving plans for the new port, a short distance from Rio Tinto Ltd's major export port at Dampier.

The West Australian government gave the proposal the green light last week and has offered to contribute $3.5 million to its construction, which is expected to cost several billion dollars.

Australian Iron Ore and Coal Exports Hit Record Levels

Figures released by the Australian Bureau of Agricultural and Resource Economics (ABARE) show that exports of iron ore and coal both his record levels during the final quarter of 2009.

Iron ore exports hit 98 million tonnes while coal shipments were 74 million tonnes, mainly to South Korea, Japan and China.

Commenting on the figures, ABARE deputy executive director Paul Morris said "The record volumes of bulk commodity exports in the December quarter were underpinned by demand from steel mills and power stations in Japan, the Republic of Korea and China."

Energy and mineral export earnings rose one per cent to A$31 billion (US$28 billion) in the quarter, it added

The record volumes came despite a 9% rise in the value of the Australian dollar.

Vale "Walks Out Of Iron Ore Talks"

China’s National Business Daily is quoting a steel producer in China’s Hebei province as saying that Brazilian miner, Vale, the world’s largest iron ore miner, has quit the annual iron ore benchmark talks currently taking place between the large iron ore miners and China’s leading steel companies.

Vale have refused to comment.

As previously reported, Vale want to move away from an annual contract price to the spot price. However, spot prices are 80 per cent higher than last years’ contract price, and China’s steel mills have suggested that they will find a contract price rise of 40 to 50 per cent unpalatable amid suggestions that their profit margins have already been eroded. The price difference between the two parties may well explain Vale’s refusal to negotiate

Meanwhile, reports from Japan suggest that leading Japanese steelmaker, JFE Steel, are ready to accept a 90 per cent rise in their iron ore contract price. Vale have offered the new price for the April to June quarter and the Nikkei Daily reports that JFE are ready to accept. The company recently accepted a 55 per cent increase in the price it pays coal miner BHP Billiton for its coking coal.

Kerala Titanium Sponge Plant To Open In July

A Rs. 1.7 billion titanium sponge plant at Kollam in the Indian state of Kerala is expected to be commissioned in July. The plant is being set up by Kerala Minerals and Metals Ltd and is funded by the Indian Space Research Organisation (ISRO)and will have an annual capacity of 500 tonnes a year.

On completion India will then become the world's fifth-largest producer of titanium sponge, a material used in the defence and space industries.

Gujarat NRE To Invest In Illawarra Coal Mines

Indian coal miner, Gujarat NRE Coking Coal, is to $500 million into its coal operations at Illawarra in the Australian state of New South Wales.

Gujarat NRE has two hard coking coal mines in the region with production of 1.3 million tonnes a year, but has plans to ramp this up to 6 million tonnes a year over the next five years. All the coal is exported to India via the Port Kembla coal terminal.

The operation employs around 450 people, but this is expected to rise to 600 with the expansion.

Vale Wants To Drop Iron Ore Benchmark Price

Brazilian miner, Vale SA, has reportedly told Chinese steelmakers that it plans to drop the 40-year tradition of setting an annual benchmark prices for iron ore in favour of shorter contracts, according to, an analyst at research company UC361.com.

Hu Kai, a Shanhai analyst, claims that Vale has sent a note to major Chinese steelmakers, although he did not cite any of the mills.

Vale is reportedly awaiting the steelmakers’ response.

Phiri To Step Down As Merafe CEO

Steve Phiri is to step down as CEO of Merafe Resources, the black-owned ferrochrome company, with effect from end March 2010.

Mr Phiri will continue as a non-executive director of the company.

Stuart Elliot, Merafe Resources' current chief financial officer (CFO) will replace Mr Phiri as CEO with effect from April 2010.

Merafe said that Mr Phiri was poised to become the first CEO of the Royal Bafokeng controlled platinum company, which has as its main assets the currently operating Bafokeng Rasimone Platinum Mine and the adjacent Styldrift project.

Mr Elliot has been with Merafe for over nine years and involved in all aspects of the business.

Merafe said discussions were at an advanced stage on the appointment of a new CFO and it is anticipated that the appointment of the new CFO will be announced prior to end March 2010.

Hargreaves Confirms UK Coal Merger Talks

British coal miner Hargreaves Services has stated that it has been in tals about a merger with UK Coal confirming press speculation it was the suitor.

"Discussions with UK Coal are at a very early stage and there is no certainty that any transaction will result," Hargreaves added.

Hargeaves is the largest independent importer of coal into the UK and purchased the Maltby deep coal mine in south Yorkshire from UK Coal in 2007.

Problems with contract prices and production difficulties at its five deep mines have led to UK Coal to seek a merger.

Ansteel Expects Iron Ore Price By April

The president of one of China’s largest steelmakers said on Wednesday that a deal on benchmark iron ore prices is expected to be reached by April.

"I am not taking part in the negotiations but a result should come out by April 1 -- it is almost mid-year and if a price hasn't come out by then, it isn't normal," Zhang Xiaogang said.

Speaking on the sidelines of China’s latest parliamentary session, Mr Zhang said that while he did not know how much more steel mills would be paying for their iron ore, it was likely to be higher than the 20 per cent expected at the end of last year.

"What a normal price should be is hard to say, but you shouldn't have one side making losses and the other making excess profits," Mr Zhang said, "All steel firms feel the same way -- whether it is Nippon Steel, JFE, Posco, Thyssen Krupp, Mittal, US Steel or us -- we all feel deeply dissatisfied, but we have no option (but to accept the price rises)." He added that whether or not the benchmark system would survive would depend on the outcome of this year’s talks.

China Copper Imports Show 10 Per Cent Rise

Copper imports into China rose 10 percent to 322.822 tonnes in February, according to data from China’s customs service.

China imported 280,000 tons of scrap copper in February compared with 340,000 tons in January. Imports of aluminium and the metal’s products were 64,356 tons last month, compared with 97,633 tons a month ago.

China Iron Ore Imports Up 5.9 Per Cent In February

China's iron ore imports rose 5.9 percent in February to 49.38 million tonnes, according to data released by China's customs authority on Wednesday.

This was despite the Lunar New Year holiday and lingering concerns over rising spot prices, however January’s figure was down over 30 per cent over the December figure. Analysts expect March’s imports to reach a new high as demand recovers after slowing down over winter.

Stockpiles of iron ore in Chinese ports stood at 70.82 million tonnes, a rise of 5 per cent over the beginning of February.

Atlas Iron To Buy Aurox, Develops Iron Ore Pricing Mechanism

Australian iron ore producer, Atlas Iron has agreed to buy fellow Australian iron ore producer, Aurox Resources Ltd. for A$143 million (US$131 million) in shares to increase its ore resources and port capacity. Aurox’s board have unanimously recommended the offer.

Shares in both companies had been suspended yesterday pending a price-sensitive announcement. Aurox shares rose by 172 percent to 73.5 cents in after Perth-based Atlas offered one of its shares for every three of Aurox. The bid values Aurox at 73.67 cents each compared with its closing price of 27 cents on March 5.

The deal will give Atlas up to 12 million tons a year in port capacity at the Port Hedland terminal as well as the Balla Balla magnetite project in the West Pilbara region.
“It is all about resource quality, infrastructure access and economies of scale,” Atlas Iron Managing Director David Flanagan said in a statement to the Australian stock exchange.

Meanwhile, in a separate development, Atlas has announced that it will start selling its iron ore to Asian steel mills next month using a new mechanism combining both cash and benchmark prices.

About 70 percent of its production will be sold on a so-called “mutual fairness” basis. This is where mills pay the midpoint between the annual contract and the cash price, when the spot price is 20 percent above the benchmark. “We are definitely seeing a lot of upward pressure on pricing,” Mr Flanagan said today although he added that he doubted his firm was the only one with such a mechanism “There are hundreds of steel mills out there and surely Atlas can’t be the only one seeking that exposure to the spot market.”

Cashmere In Talks With China After Billion-Tonne Iron Ore find

A small West Australian iron explorer has announced it has discovered what could be the single biggest find of iron ore in the state’s Midwest region.

Cashmere Iron yesterday reported results of exploration studies from its project south east of Sandstone, about 480 kilometres east of Geraldton, confirming a combined haematite and magnetite deposit in excess of one billion tonnes, and there could be a lot more there with the current resource representing less than 15 per cent of the banded iron formations in their Cashmere Downs tenements.

Chairman, David Hendrie, says there could be as much as eight billion tonnes in the find, which is contained in a 7.5 kilometre stretch of banded iron ridges and that it has the potential to be the largest single deposit within the Mid West.

Cashmere has already spoken to developers of the Oakajee rail project. "To get up to full capacity you're looking at about a four to five year timeline, so we're realistically hoping that all fits in with the completion of Oakajee and the infrastructure railway lines," he said.

Meanwhile Mr Hendrie today announced that the unlisted Cashmere has been in talks with Chinese steel mills and with potential investors in Asia and the UK. “There are numerous entities that have been in discussions with us over the last 12 months,” David he said. “We expect those discussions to now advance quite quickly.”
The company is looking at listing its shares later this year but has not ruled out joint ventures or stake sales. Mr Hendrie declined to say how much Cashmere intends to raise from the flotation.

UK Coal Investigating Merger

British coal miner, UK Coal, said on Tuesday that it is in the early stages of investigating a merger proposal that could address the group's exposure to the volatile performance of its deep mines.

The statement came following a report in the Daily Mail that said that Peel Holdings, which holds a 28.3% stake in UK Coal, is working on a cash offer for the rest of the company’s shares.

UK Coal, which was formed out of the remains of the country's nationalied coal industry said it is not aware of any proposal for a cash bid.

Oz, Azure Agree To Mexico Joint Venture

Australian mining firms Azure Minerals and OZ Minerals have signed US$13 million joint-venture agreement on Azure’s 100%-owned San Eduardo property in Sonora Mexico.


Azure’s executive chairman, Mr Tony Rovira, welcomed the interest of one of Australia’s premier mining companies as confirmation of the high quality of Azure’s Mexican projects.

Mr Rovira said, "We are delighted to have attracted OZ Minerals to the Sierra Madre Occidental district of northern Mexico, which is one of the world’s great mining provinces.

“To secure the involvement of OZ Minerals in this exploration project is a strong vote of confidence in Azure’s on-going program of regional exploration, target identification and project staking, confirming the effectiveness of our exploration team in Mexico. This Joint Venture will enable Azure to accelerate our exploration programs and develop our projects.”

To earn an initial 51% participating interest in San Eduardo, OZ Minerals will spend US$3,000,000 over the next 3 years, with a minimum commitment of US$300,000 to be expended within the first year. OZ can earn an additional 19% participating interest in the project by spending a further US$10,000,000, taking its total equity to 70%.

The San Eduardo property is a granted mineral concession covering 201km2. It adjoins Azure’s 100%-owned El Tecolote project and is situated 10 kilometres west of Azure’s La Tortuga property (subject to an earn-in joint venture with JOGMEC).
Historical sampling by the Mexican Geological Survey at Alejandra collected a 40 channel samples of wall-rock, returning an average grade of 25 g/t Ag, 7.34% Pb and 1.89% Zn, with maximum values of 80.9 g/t Ag, 20.04% Pb and 5.45% Zn.
Planning of the San Eduardo work program is at an advanced stage and field work will commence shortly. Phase 1 will comprise geological mapping and surface sampling, an airborne magnetic and radiometric survey, Induced Polarisation (IP) surveying and drilling.
This involves a minimum expenditure commitment of US$300,000, which will be sole-funded by OZ Minerals, and is expected to be completed by the end of 2010.