Queensland Miners To Bid For Rail Network

Bid Worth Over $A4 billion

A group of 13 Australian coal miners have made a joint A$4.85 billion bid for the Queensland rail-track network in a bid to prevent the system being sold on to the stock market as part of the state’s privatisation programme.


The group, the Queensland Coal Industry Rail Group (QCIRG), is headed by BHP Billiton, Rio Tinto and Xstrata and says its bid was conditional on the state government dropping its plan to sell both the track network and the coal haulage business in an initial public offer.

The miners are concerned that if both the tracks and trains are sold together the new private owner would exert too much power over the coal industry.

Most of Australia's coal ports are dogged by infrastructure constraints and suffer from endemic congestion, with the bottlenecks resulting in lengthy queues of ships waiting for berths.

QCIRG is chaired by former New South Wales state premier Nick Greiner, who said the offer represents a substantial premium to what is likely to be achieved under the government's proposed listing plan.

"We have considered the alternative model under the IPO ... and strongly believe it does not represent an optimal or even reasonable basis for assuring the future of the state's major export industry," Greiner said in a statement.

"Importantly, our offer is able to be settled with the government prior to the IPO and will not be dependent on volatile equity markets, removing major risk for the state while also providing early settlement."

Polo To Sell Stake In Mongolian JV

Polo To Sell Stake In Mongolian JV

Polo Resources is to sell its 50 per cent interest in its Mongolian joint venture with Peabody Energy to Winsway Coking Coal Holdings for the sale of Polo's 50% interest

The JV was formed to hold all of Polo's coal and uranium assets in Mongolia.

Winsway will pay a non-refundable deposit of $1.75m to Polo, which has granted exclusivity to July 20.

Polo chairman Neil Herbert said, 'We are pleased to be executing the divestment of our non-core holding in the joint venture in Mongolia.

'Polo is focused on maximising shareholder value through its uranium and coal interests in Extract Resources Limited, GCM Resources plc and Caledon Resources plc and currently has approximately $23m in cash.'

Polo, Peabody and Winsway will negotiate the terms of a sale of Polo's interests in the JV for $15m in cash, including the deposit, and $20m payable within 12 months.

In addition Polo will receive a 1% royalty for coal sold from the licences.

WISCO Buys 2bn Tonnes Of Iron Ore Reserves

Reserves Bought In Madagascar

Chinese steelmaker, Wuhan Iron and Steel, has purchased reserves of two billion tons of iron ore, according to the country's National Development and Reform Commission. The purchase increases the company's reserves of iron ore to four billion tons.

The iron ore were acquired from the Soalala Iron Ore Deposit in Madagascar and the reserves were purchased the in conunction with Guangdong Foreign Trade Group and Kam Hing International Holdings

Chinese Anger At Q3 Iron Ore Prices Rise

Further 23 Per Cent Asked For Iron Ore

Chinese steel mills have expressed outrage as Vale and BHP propose an iron ore price of $160 per tonne for the third quarter.

"BHP has recently informed us that they will raise third quarter iron ore prices, including freight, to 160 U.S. dollars a ton, which is unacceptable for us," according to an official from a large steel mill.

"We will become unprofitable with such prices on the back of a persistent fall in steel prices," the source said.

The price is 23 percent higher than that in the second quarter.

One source suggested that the price was unreasonable given the fall in spot prices in recent weeks.

"We will see a complete loss in the steel industry if the much-talked-about price is inked, and most small-sized mills will go bankrupt," said Chu Xueliang, an analyst at China Jianyin Investment Securities.

"We estimate that the acceptable price for Chinese steel mills is around 130 U.S. dollars per ton in the third quarter," Chu said.

Gold Price Spurs Kenyan Exports

Output Trebles As Price Rockets

Official data released by the Kenyan government shows that metal minerals performed better in 2009 than non-metal minerals.

Earnings from gold rose almost four times to Sh2.3 billion ($276 million) against Sh593 million ($72 million) in 2008 as the price of gold – traditionally a safe haven in times of recession – rose sharply on the international market. Production more than trebled from 0.3 tonnes to 1.1 tonnes.

Fluorspar brought in Sh123 million ($14.5 million).

The price of gold rose from $834 per ounce at the end of 2008 to $1095 per ounce at the end of 2009. The current price is around $1179 per ounce.

Prices of gold in the international market have leapt from $834 per ounce by close of 2008 to $1,095 by end of last year.

Chinese Steel Mills Receive Rio Tinto Price Offer

Price Is Double 2009 Benchmark

Rio Tinto has delivered its official iron ore price offer for the second quarter of this year to Chinese steel mills. According to sources within the Chinese steel industry, the offer was received on Friday.

The free-on-board price for fine ore with grade of 63.5 per cent was about $US123 per tonne and around $US138 per tonne for lump ore. With ocean freight added on, the price is around $US135 per tonne – around double the 2009 benchmark price agreed with Japanese and Korean steelmakers.

The China Iron & Steel Association admitted last month that the country's mills and the large iron ore miners had reached private price deals on iron ore supply, even as negotiations continued.

The offer means the end of the annual benchmark system and a move to quarterly pricing.

Cyclone Set To Hit India's East Coast

Refineries, Gas Fields And Ports on Alert

A cyclone over the Bay of Bengal is set to hit India's east coast on Thursday, putting on alert refineries, the country's biggest gas field and facilities for iron ore exports and coal imports.

The storm – known as Laila - would lash the coastal state of Andhra Pradesh in the early hours of 20 May with gusts of up to 135 kilometres per hour.


Officials at the Gangavaram port in Andhra Pradesh, a major hub for coal imports, said they were watching the situation although they were hopeful that operations wouldn’t be much affected.


Officials in Orissa state have also issued an alert although the cyclone is likely to be weaker by the time it reaches the Paradip port.

Fortescue To Review New Projects

Miner Blames Super Tax

Australian iron ore miner Fortescue Metals Group Ltd. has put two of its three expansion projects on hold.

The company has said that it wants to review the potential impact of the 40% tax on mining profits proposed by the Australian government. The tax is due to come into force in July 2012

Fortescue is to review its US9billion Solomon hub and its $6billion Western hub projects. Between them the two projects were set to employ up to 30,000 people.

"The uncertainty in the financial markets caused by the proposed tax and the cash impost that RSPT payments will place on future business revenues has necessitated an urgent review of the economics surrounding the development of Fortescue's major projects," the miner said in a statement on Wednesday.

The company had been aiming to approve Solomon next year but the only work to continue will be the completion of existing studies.

The project was slated to produce 160 million tonnes a year of iron ore.

However Fortescue continues to expand its Chichester hub capacity from 55 million tonnes to 95 million tonnes a year. Unlike the Solomon and Western projects, Chichester is to be financed from internal cash flows.

Macarthur Rejects Reduced Peabody Offer

Shares Plunge As Miner Rejects Bid

Macarthur Coal Ltd., the world’s largest pulverized coal producer, has rejected the latest bid from Peabody Energy Corp.’s saying it is too low. Macarthur’s two biggest shareholders, Citic and ArcelorMittal are also expected to reject the bid.

Peabody reduced its offer from A$16 a share to A$15 a share, citing its due diligence review of Macarthur’s finances and the Australian government’s plan to bring in a ‘super tax’ on mining companies’ profits.

Shares in Macarthur fell over 20 per cent on the news to close at A$11.25 a share.

Petrobas In Saudi PetCoke JV

Plant To Be Built on East Saudi Coast

Brazil's Petrobras has signed an agreement with Saudi Arabia's Modern Mining Holding Co. to study plans to build a $450 million calcined petroleum coke plant in Saudi Arabia.

The plant, to be built in Jubail, on Saudi Arabia’s east coast, is expected to produce 700,000 mt of calcined coke a year using raw petroleum coke – ore ‘green coke’ - produced by Petrobras’ refineries. The plant is scheduled to open in 2012.

The two partners in the joint-venture will provide equal amounts of finance for the project and are looking for capital from government and non-government banks.

Sharp Increase In Great Lakes Iron Ore Shipments

Iron Ore Shipments Doubled In April

Iron ore shipments on the Great Lakes in April showed a 146 percent increase over last year, according to figures just released by the Lake Carriers Association.

A total of 5.4 million tons were shipped from U.S. and Canadian Lakes and Seaway ports as a recovery in the steelmaking industry drove demand for iron ore higher.

Shipments from Two Harbors and Silver Bay were higher than they've been in any of the last five Aprils. Duluth shipments topped the five–year average, but Superior's shipments were lower than all of the last five years.

Rare Metal Found In North Queensland

Scandium Found Near Townsville

Australian miner Metallica Minerals says it has found deposits of scandium at its Ludrow nickel-cobalt project as Greenvale near Townsville in the Australian state of Queensland.

The element is used to strengthen low-weight aluminium alloys in the aerospace, automotive and sporting industries but supplies have been limited.
Metallica managing director Andrew Gillies says the company hopes to capitalise on that shortage, and subject to a feasibility study, become the world's largest scandium supplier.

"It has got fantastic attributes, and everybody likes quality products," Mr Gillies said.

"We are talking to serious end users that are in need of long term reliable supply. The problem has always been is that there's no long term reliable supply, so the main end users would be reluctant to add it to their plane wings, rocket wings [and] mainstream lighting components.

Mr Gillies said he thought there was around 1500 tonnes of scandium oxide in around 20 drilling holes at the Ludrow site. The Scandium will be processed in conjunction with nickel and cobalt from the project, making the venture worthwhile.

Sahara Chosen For Mali Iron Ore Mine

Indian Company Expects 50k MT per year

India’s Sahara Mining has been chosen to mine iron ore deposits at Moribabougou in Mali, the Malian Mines Ministry announced on Friday.

The ministry says iron ore reserves are evaluated at 91 million tons. Sahara says it expects annual output of 50,000 tons which will be exported through Dakar in Senegal, 1,350 km away from the mining site. The site itself is close to the Mali capital of Bamako.

The Moribabougou project requires an investment of US$40.83 million, the ministry’s statement said.

The project will create over 1600 jobs.

BHP, Rio Set Year-End Date For Iron Ore Deal

Year-End Deadline for Pilbara Merger

Iron ore giants BHP Billiton and Rio Tinto may re-evaluate plans to merge their Western Australian iron ore operations if the two parties cannot reach an agreement by year end.


The Wall Street Journal quotes BHP chief executive Marius Kloppers as saying the deal was being hampered by the proposed 40 per cent tax on mining profits proposed by the Australian government.


“The tax brings in uncertainty," Mr Kloppers told the paper. Earlier this week he told the Australian Broadcasting Corporation that both parties were keen to complete the joint venture despite the tax and despite opposition to the deal in the EU and China.


Mr Kloppers recently met his counterpart at Rio Tinto, Tom Albanese, and the two agreed on a 31 December deadline to complete the deal.


Mr Kloppers also said that BHP would invest elsewhere if the Australian government approved the deal.

Atlas Consolidated Reports Q1 Profit

Carmen Copper is Key To Turnaround

Philippines copper and nickel miner, Atlas Consolidated Mining and Development Corporation, has reported a profit of P164 million in the first quarter of this year, compared to a loss of P393 million for the same quarter in 2009.

The firm said the improved result is due to the improved performance of the company’s majority-owned subsidiary, Carmen Copper Corporation (CCC).

The Carmen copper mine processed over 2.5 million tons of ore during the quarter with production rates expected to exceed 38,000 tons per day during the third quarter of this year.

Total revenues for the quarter were P2.20 billion with net income from operations of P382 million. Five shipments of copper concentrate were made during the quarter amounting to approximately 24,500 dry metric tonnes.

However, Atlas’ nickel-producing subsidiary Berong Nickel Corporation (BNC), reported a loss of P26 million due the continued suspension of operations although the company is continuing to pursue long-term sales in China and Japan.

Last week CCC completed of its seventh shipment of copper concentrate this year by CCC with the delivery of 5,235 wet metric tons of copper concentrate loaded destined for the Jinlong Copper smelter in China.

The copper concentrate is estimated to contain 28.19 percent copper, 2.83 grams of gold per ton and 24.88 grams of silver per ton. The shipment has an estimated value of $9.2 million.

Twenty shipments have been made by CCC – all to China - since the start of commercial operations in September 2008. Approximately 98,520 dry metric tons have been shipped.

Get commodities prices

Base Metals         Precious Metals         Energy

Grain & Oil seed             Softs               Plastics

Northern Iron Recommissions Norway Project

Sydvaranger Recommissioned Ahead of Schedule

Northern Iron, the Australian company formed to acquire the Sydvaranger Iron Project in northern Norway, has reported Friday that the troubled project in Norway will be re-commissioned ahead of schedule.


Chairman David Griffith informed shareholders at the company's annual general meeting that "the rectification program will be completed four months ahead of schedule and the cost of the rectification program is currently tracking below budget."


The project went live last year four months late last year, which led Northern Iron to seek additional funding but Mr Griffiths said that concentrates were eventually produced and shipped. However, he admitted that there had been some shortcomings on the company’s part as it was not able to produce the quality of concentrate it had previously claimed.


Northern Iron has allocated some $US25 million for development projects that will rectify the project’s operational flaws. Negotiations are under way with UK steelmaker Corus to discuss late deliveries of the mine output.

Kangaroo To Complete Indonesian Coal Acquisition

Five More Coal Mines To Be Added To Portfolio

Australian mining company Kangaroo Resources is to acquire five Indonesian coal projects, after completing its due diligence. The company announced its plan to buy the projects late last year.

Drilling will soon commence at Kubah Indah, where the company’s exploration target is for 100-400 million tonnes of coking coal.

The company said this drilling program will be conducted in parallel with the ongoing ramp-up of production at its other Indonesian operations.

Prior to announcing these latest acquisitions Kangaroo already had two coal mines in Indonesia.

Managing Director Mark O’Keeffe said “The completion of due diligence was high on our list of priorities and, as expected, the projects were found to be technically and legally sound.”

“Kubah Indah in particular will become a very important project for us and, in combination with the Mamahak Project, will form the backbone of our coking coal production profile in the future."

“We will now move quickly towards the commencement of an initial exploration programme at Kubah Indah, and over the coming months we expect to be able to delineate a significant JORC resource,” added Mr O’Keeffe.

Kangaroo has issued 300 million shares to the projects’ vendors as consideration for the acquisition and these would be issued once its shareholders approve the deal.

Kangaroo recently announced an export sales contract with Chinese energy company, Yudean Farnon.

The contract involves three trial shipments of a total of 150,000 tonnes of coal over a two-month period. The deal will then be extended with pricing linked by a formula to the Chinese Coal Index.

Check Stock Prices  Symbol A-Z market search                Go

Gindalbie To Raise $200m For Karara Project

Australian iron ore miner Gindalbie Metals Ltd is seeking up to $206 million to help fund the development of its $2 billion Karara iron ore project in Western Australia.

The capital raising will include a $111.8 million share placement to institutions and another placement with its joint venture partner and largest shareholder, China's Angang Steel Company Ltd (AnSteel), to raise between $63.2 million and $74.6 million.

Last month Gindalbie secured last month a $US1.2 billion ($A1.34 billion) loan facility with funds sourced mainly from China Development Bank and Bank of China.
Gindalbie said at the time that it had about $200 million in cash reserves remaining from equity payments totalling $534 million that have been contributed by Gindalbie and AnSteel to the joint venture company.

Mining is expected to begin in mid-2011.

NYSE  NASDAQ  AMEX      DJIA  S&P500

Coal Offloaded from Stricken Ship

Shen Neng 1 To Be Towed Back To China

Salvage crews have begun to offload coal from the Chinese-registered ship that ran aground on the Great Barrier Reef off the coast of Queensland, Australia last month.

A smaller bulk carrier has docked beside the Shen Neng 1 and work has begun to offload a third of its coal. A second coal lighter will take over offloading duties when the first is full, probably this weekend. Around 19,000 tonnes will be removed from the over the next three weeks and the ship will then be towed back to China.

The Shen Neng 1 ran aground on 3 April causing extensive damage to the reef. It was refloated on 12 April 12 and towed to calmer waters off Hervey Bay on Tuesday for the salvage operation.

MSQ general manager Patrick Quirk said extensive environmental protection measures were in place.

"Water sprays are being used to suppress any coal dust which may be stirred up by the lighter's grab buckets, which are also specially designed to reduce spillage," Mr Quirk said.

"We will also have skilled observers watching the transfer process for any sign of spillage and they can call an immediate halt to the operation if they have any concerns."

Environmentalists have called for the Queensland government to guarantee that the state’s marine parks won’t be used as a refuge for ships that have run aground. A Greenpeace spokeswoman pointed out that the ship had been anchored in the Hervey Bay marine park that was home to dolphins and whales and she urged the state not to allow the Shen Neng 1 to set a precedent.

Iron Ore Contract Prices May Rise 32 Per Cent

Calculation Is Based On Three Months Spot Average

Contract prices of Australian iron ore may rise 32 percent in the July quarter over the previous three months, the Japan Metal Daily newspaper said.


Based on a calculation being put forward by iron ore miners BHP Billiton and Rio Tinto contract prices may rise from around $120 a tonne in the April to June quarter to around $158 a metric ton in the quarter from July to September.


The new amount is apparently derived from the three-month average of the iron ore spot price from March to May on the assumption that the market price stays at its current level until the end of this month.


At $158 a ton, iron ore would cost 2.6 times more than it did in the year ended 31 March.

Zijin Expects Congo Deal To Go Through

Approval for Platmin Deal Expected In Weeks

China’s largest gold producer, Zijin Mining Group Co., has said that it expects the governments of the Democratic Republic of Congo and China to approve its joint $284 million bid to buy copper mine developer Platmin Congo.

Zijin is looking to buy Platmin Congo along with the state-backed China-Africa Development Fund. Platmin has stakes in two copper-cobalt projects.

Vice Chairman Lan Fusheng told reporters in Shanghai that China is expected to nod through the deal next month although agreement from the Congo government is expected to take a little longer. The deal will go through once a “misunderstanding” is resolved.

“I believe this will eventually receive approval from the Congo government because the project needs investment,” Mr Lan said.

Alexis Mikandji Penge, Chief of Staff to Congo’s Ministry of Mining, pointed to a decision by the Congolese government last August which prohibits a partner in a joint mining venture in Congo to change the partnership or transfer shares before the project begins commercial production. It is believed that the country’s Minister of Mines, Martin Kabwelulu apparently learned of the proposed deal over the internet.

The state-owned mining company, Gecamines, has a 32 per cent stake in Platmin’s projects, Deziwa and Ecaille C. Zijin will own 60 per cent of the venture controlling Platmin with the China-Africa Development Fund holding the remaining 40 per cent. The $1 billion fund aims to support Chinese companies investing in Africa. It is believed that the fund initially got involved in the project and sought investment from Zijin to take over the development.

Get commodities prices

Base Metals          Precious Metals          Energy

Grain & Oil seed             Softs               Plastics