Copper News - Zijin Closes Plant After Leak

Copper News - Zijin Closes Plant After Leak

Zijin Mining Group Co. has closed a copper plant at Shanghang, in China’s Fujian province, after a “substantial leakage of waste water” was discovered by government investigators.

A plant manager, deputy plant manager and environmental safety officer at the Zijinshan Copper Mine plant were detained by police, the company said in a statement to the Hong Kong stock exchange today. Duties of the deputy plant manager and environmental safety officer have been suspended.

Zijin could face fines of around 500m yuan (US$70m) as well as suffering losses of around 700m yuan (US$100m) as a result of the leak.

Fujian provincial authorities plan to legal action against government officials and Zijin executives, according to the Xinhua News Agency after the company ignored an order issued last September to repair a reservoir leak.

Zijin also plans to invest 100 million yuan (US$14m) in a water plant the state is building near to its mine.

The company could be fined 500m yuan by the China Securities Regulatory Commission for not immediately disclosing the pollution, while lost production could cost it another 350m yuan with compensation to local fishermen affected by the leak costing a further 350m on top of that.

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.

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.

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.

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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.

Sinosteel, Anshan To Continue Investing In Australia

Move Comes Despite 40 per cent Tax

China's large steel makers, Sinosteel and Anshan Iron and Steel Corp, say they are willing to continue to invest in Australia, despite a proposed 40 percent tax on the profits of Australian mining companies.

Speaking at a conference in Beijing on Monday, Sinosteel president Huang Tianwen said "We are reviewing how the tax will impact our companies, and undoubtedly, it will affect costs and profits in our local projects," however the company is still committed to exploring overseas resources.

Bai Jingpu, vice-president of Anshan Steel, also said the company is evaluating and analyzing the impact of the "super tax" on the Australian mining industry, but he also added that the company will continue to invest in the country.

Australia’s tax plan for miners was released last week and is expected to start in July 2012. Some Australian companies have criticised the plan saying it will adversely affect future projects in the country. Xstrata Copper has already announced that it is to shelve future plans for projects in northern Queensland.

However, Chinese steelmakers companies are looking to secure raw material supplies, particularly in the light of huge increases in raw materials and a shift from annual to quarterly contracts by the big three global iron ore miners, BHP Billiton, Vale and Rio Tinto.

Sinosteel and Anshan already have projects in Australia. Sinosteel bought iron ore company Midwest in 2008 while Anshan steel has a stake in Ginadalbie Metals Ltd with whom it is developing the Karara iron ore project in Western Australia.
China’s iron ore imports grew by 11.6 per cent in the first four months of this year compared to the corresponding period in 2009.

Baosteel Faces Difficult Second Half-Year

Company Looking for Alternative Iron Ore Sources

The chairman of the group company of Baosteel, China’s leading steel manufacturer says that the Chinese steel sector is likely to face difficulties in the second half of the year amid a slowdown in the real estate sector.
Speaking on the sidelines of an industry conference in Beijing, Xu Lejiang told reporters "In the second half of the year it is uncertain whether the yuan will appreciate, whether interest rates will rise.

"There is also the property market, and fixed asset investment could also fall."
Real estate development in China saw Chinese steel mills through the global economic crisis against a steep fall in exports but the government is trying to keep a lid on surging property prices and is set to legislate against speculation.

But the industry has also been affected with raw materials costs also rising and with the three global mining giants, Rio Tinto, BHP Billiton and Vale moving to quarterly prices against annual contracts.
The China Iron and Steel Association (CISA) said at a press briefing earlier this month that mills were now free to secure their own individual deals with their suppliers and Mr Xu confirmed Baosteel was currently sourcing iron ore from foreign miners on a temporary price basis, however he warned the conference that the advantages currently enjoyed by the big thre miners were unlikely to last.

"Across the world, iron ore isn't a scarce resource but it's just that in recent years, the ability to supply iron ore has not matched the development of the steel industry, especially the Chinese steel industry," Mr Xu said.

The three miners have been able to exert considerable control over the volumes of new iron ore reserves available to the market but their high price demands would push steel mills to develop alternative supply sources, he added.

"In two or three years the demand and supply situation will see a big improvement," he added.

Baosteel Importing Iron Ore On Short-Term Prices

Baosteel Importing Iron Ore On Short-Term Prices

Chinese steelmaker Baosteel has admitted that it is now importing iron ore on shprt-term contract.

Chen Ying, board secretary of Baosteel's listed company, Baoshan, said that his company "had settled deals with certain (price) increases with miners as of April" and would pay the price difference after iron ore talks were finalised.

China Allows Steel Mills To Sign Individual Contracts

China Allows Steel Mills To Sign Individual Contracts

The lobbying body for the Chinese steel industry, the China Iron and Steel Association (CISA), has acknowledged that Chinese steel mills have signed individual deals with global miners, but it said that iron ore price negotiations are continuing

"Considering the operating pressure and difficulties of steelmakers, they [the steelmakers] can now talk with the big three miners and buy iron ore at provisional prices under CISA's regulations," said Vice-chairman Luo Bingsheng.

Despite this Mr Luo said that price negotiations were ongoing: "It is totally the individual business of companies," he said. "They [the miners] offer a price we don't accept, that doesn't mean the end of negotiations. The price talks are still going on."

CISA previously refused to allow Chinese steelmakers to sign contracts until a national benchmark price had been agreed. Despite previously suggesting that a deal would be done-and-dusted by 1 April talks have dragged on with seemingly no end in sight.

CISA also asked domestic steel companies and traders to stop buying iron ore for the two months from Vale, BHP and Rio Tinto to protest against the price monopoly.

Earlier reports said some Chinese steel mills have accepted a quarterly pricing regime, based on the previous three months' average spot prices or at a price agreed by steel mills in Japan and Korea. The prices were said to be around 90 per cent higher than the previous benchmark price and were to run for a period of just three months from 1 April instead of the customary one year’s duration.

China is the world’s biggest importer of iron ore.

China Approves Centra-WISCO JV On Eyre Peninsula

WISCO To Take Stake In Enlarged Centrex

The Chinese government has approved a joint-venture on the Eyre Peninsula in South Australia between Wuhan Iron and Steel (Wisco) and Australian iron-ore miner Centrex Metals.


All the conditions surrounding the joint venture have now been met and Centrex is targeting the deal to be closed by the end of May.


Under the terms of the agreement, Wisco will earn a 60 per cent interest in the iron-ore rights of five of Centrex’s exploration tenements on the Eye Peninsula for a total investment of A$271-million.


Wisco is to invest A$75-million of the total investment capital into sole funding of the exploration of the joint venture and will take a 15 per cent direct equity stake in the enlarged capital of Centrex.

Other points to note in the deal:

- WISCO is to pay Centrex A$51.5 million on completion (A$ 0.5 million deposit already paid) and a further A$ 26 million on the first anniversary of the completion (total A$ 78 million).

- WISCO is to pay four further payments of A$ 27 million if and when the JORC Inferred Resources for the project reach 1.25Bt, 1.5Bt, 1.75Bt and 2.0Bt respectively (up to an additional A$ 108 million).

- WISCO is to additionally sole fund the first A$ 75 million of exploration for the Joint Venture.

- WISCO is to assist with project financing for construction.


The two companies have also signed a heads of agreement to develop Centrex’s Sheep Hill port facility on the peninsula which would seek approval for the development of a Cape-sized vessel capable, deep-water port facility for use by the joint-venture and other exporters.

China Ends Iron Ore Talks

"Current negotiations have not been negotiations" - CISA chief

Iron ore price talks between Chinese steel mills and the big three global iron ore suppliers - Vale, BHP Billiton and Rio Tinto - have been suspended, Luo Bingsheng, vice-chairman of the China Iron and Steel Association told reporters on Tuesday.


"The current negotiations have not been negotiations at all because no buyers have been given a say (in deciding prices)," Mr Luo said at a briefing.


He added that the monopoly status of the three big three suppliers meant that they were no longer considering the interests of their customers, he said.


He said China would take a strategic approach to resolving its dependence on foreign ore suppliers by trying to encourage domestic iron ore output.


Meanwhile spot prices in China fell on fears that government measures regarding the property market would curb demand for iron ore. This follows rising property prices in China.

On 24 April China’s securities regulator announced moves that requires developers to submit fund-raising plans for review, adding to curbs imposed by the central bank on loans for third-home purchases, increased down-payment requirements and higher mortgage rates.


Iron ore prices have soared, reaching $189.50 last week for 63.5 percent-content iron ore in Chinese ports while import prices averaged $96.31 a ton in the first quarter. However, steel stockpiles rose earlier in the year as the Chinese property sector appears to have cooled in the light of rising prices and more regulation.


However, Mr Luo said that steel inventories have dropped 9 percent to 9.77 million tons as at 23 April.

China Steelmakers Sign Quarterly Deals - Reports

Low Iron Ore Stocks Force Steel Mills' Hand

Reports from China suggest that some Chinese steelmakers have signed private pricing contracts on a quarterly basis with global iron ore suppliers.


The China Economic Times cites an unnamed executive at China’s largest steel mill, Hebei Iron and Steel Group, as saying that several of the company's subsidiaries had no choice but to accept the quarterly pricing proposal as their ore reserves would last last until mid-May.

"Some steel mills, including us have accepted the new quarterly pricing system, based on the previous three months' average spot prices," a sales executive from another large steel mill told China Daily.

"The China Iron and Steel Association (CISA) has issued a document asking steel mills not to sign iron ore contracts with the three big miners until the final negotiations are completed. But we cannot stop production and hence most of the steel mills have signed contracts privately like they did last year," he added.


The Shanghai Securities Journal suggested on Monday that Chinese steelmakers were basing these deals on Vale's agreement last month with Japanese and Korean mills that resulted in a 96.4% rise on last year's benchmark to about $110 a metric ton.

Official sources have denied the reports.

Some analysts estimated that the uptrend in iron ore prices would be short-lived, as most traders have started to show pessimism on market prospects.

The three global miners - Vale, Rio Tinto and BHP Billiton - broke the 40-year tradition of selling iron ore on an annual contract basis this year opting instead for a quarterly pricing system.

Hebei Takes Over Macheng Iron and Ore Assets

Hebei Takes Over Macheng Iron and Ore Assets

China’s Ministry of Land and Resources has approved a plan by the Hebei provincial government to transfer assets from Macheng Iron and Ore to Hebei Iron and Steel Group, reports 163.com.

Macheng Iron and Ore has proven reserves of 1.044 billion tons of iron ore and prospective reserves of 500 million tons of iron ore with an average grade of 34.89 percent.

Hebei Iron & Steel Group, currently has total iron ore reserves of about 4.4 billion tons.

The company plans to increase its production capacity of iron ore to 30 million tons a year and improve its self-sufficiency rate in iron ore from 35 percent to 40 percent.

China Minmetals Considers Mauritania Iron Ore Project

Minmetals Carrying Out Due Diligence

China’s largest minerals and metals trader, China Minmetals Corporation, is considering iron ore mining projects in Mauritania to diversify its raw material sources, a report in the China Daily newspaper said on Friday.

The paper reports that the company’s vice-president Xu Siwei, said on Thursday that it has started due diligence on iron ore projects in the West African country and that it expects to sign an agreement soon.

"Other international miners have also expressed interest in the Mauritania mines, but we are confident of succeeding," said Mr Xu.

Mauritania already has one large iron ore operation in SNIM, which exports much of its output to Europe, in particular to France.

Minmetals imported 4 million tons iron ore from Mauritania in 2009 and Mr Xu said that the figure would be higher this year. Mauritania is the ninth largest iron ore supplier to China and Minmetals has been importing Mauritanian iron ore through its branch office in Germany.

The country has been producing iron ore since the early nineteen-fifties. Iron ore mines are situated at at Idjill Kédia, M’haoudat and Guelbs.

China is the latest overseas country to consider mining projects in the country.

Minmetals acquired Australian zinc miner Oz Minerals for $1.4 billion in June 2009 and last year also gained control of Hong Kong-listed Hunan Nonferrous Metals Co Ltd.

Chinese miners will consider more investment opportunities in the higher-risk investment destinations of Africa, Central Asia and Russia as it is difficult to acquire high-yielding mines in low-risk countries like Australia and Canada this year, the newspaper said.

China To Investigate Iron Ore Trade

Commerce Ministry Defends Benchmark System

China's Ministry of Commerce has announced that it will launch an investigation into the big three global miners’ monopoly over the iron ore trade while defending the traditional benchmark system of pricing. This follows moves by the big three international mining giants to end the 40-year-old system.

"The commerce ministry's anti-trust bureau is currently studying the issue," ministry spokesman Yao Jian said on Thursday. Mr Jian said the benchmark system offered a transparent, stable and foreseeable trading platform for both the suppliers and buyers and enabled the two sides to control production costs and balance their interests but he warned that China's booming iron ore market would become more rational as it diversified supply channels at home and abroad, said Yao.

He pointed out that the number of countries China was sourcing its iron ore from had risen from 10 to 20 in recent years. Chinese steel mills had reduced their reliance on imports, with the percentage of imports falling between 50 and 60 per cent this year.

Chinese steel mills have yet to agree a 2010 price with miners BHP, Rio Tinto and Vale despite other Asian steel mills having agreed price increases of over 90 per cent and a move from annual to quarterly contracts.

CISA Chief Blasts Miners' Dictatorial Attitude

Luo Accuses Miners of "High Degree Of Monopoly"

The chairman of the China Iron and Steel Association has blasted iron ore miners for their attitude towards their Chinese customers.

Speaking at an industry conference, Luo Bingsheng said that the miners are no longer negotiating but dictating prices to their customers.

"There are no negotiations any more," Mr Luo said "now it's 'I say the price, you must accept, or else we will stop supplying you.'"

Mr Luo accused miners Vale, BHP Billiton and Rio Tinto of "a high degree of monopoly" in the supply of seaborne iron ore.

He added that while steel prices have risen sharply the domestic steel industry still faced the challenges of global protectionism, sharply higher inventory levels and slow consolidation in the industry.

MCC, HZL Said To Be In Running For Anglo Zinc Business

Bid Expected To Realise $1 Billion

Metallurgical Corporation of China Ltd (MCC) and Hindustan Zinc are said to be in the running for the $1 billion worth of zinc assets put up for sale by miner Anglo American Plc.

MCC has recently begun to expand its overseas mining assets. An anonymous company official told the newspaper China Daily that "We intend to capitalize on the commodity price rally and the Anglo bid is in line with our strategy."

Most of MCC’s mining assets are located overseas. In February 2010 the company paid $200 million for a 5 per cent stake in Australian miner, Resourcehouse Ltd in a deal which saw it agree to buy coal from Resourcehouse and a 10 per cent stake in the China First coal project.

Hindustan Zinc is although thought to be bidding for the assets. The company recently became the world’s largest zinc miner and sources within the business have told the Indian press that the company is working on a bid.

Anglo American's zinc assets include the wholly owned Skorpion and Lisheen mines in Namibia and Ireland and a 74 percent interest in the Black Mountain mine in South Africa.

China May Probe Iron Ore Monopoly

Industry or Government May Instigate Investigation

A report in China suggests that the country’s government is likely to investigate suspected monopoly abuse by the world's three iron ore mining giants.

The report, in the Economic Information Daily, cited an unnamed legal expert as saying that the three companies – Vale, Rio Tinto and BHP Billiton – are highly coordinated in the supply, transportation, and pricing of iron ore which, it said indicates a clear monopoly abuse.

The paper quote the legal expert as saying there were two ways to launch an investigation into foreign companies' monopoly. The ‘victim’ firms can file a monopoly case with the government and the government can then start an investigation. But if the monopoly has a negative impact on China's economy, the relevant government departments can initiate the investigation themselves.

Chinese Coal Ship Refloated

Reef Could Take 20 Years To Recover

The Chinese coal carrier, the Shen Neng 1, which ran aground on the Great Barrier Reef off the coast of Queensland, has been refloated and is now lying in safe waters off Great Keppel Island.

However, Australian scientists say that the ship caused miles of damage to the Reef and it could take 20 years for the reef to recover.
The Shen Neng 1 ran aground 10 days previously, on a journey taking Australian coal to China.

Great Barrier Reef Marine Park Authority (GBRMPA) chief scientist David Wachenfeld says the damage is worse than expected and stretches for three kilometres.

"This is by far the largest ship grounding scar we have seen on the Great Barrier Reef to date," he told ABC.

"This vessel did not make an impact in one place and rest there and then was pulled off.

"This scar is more in the region of 3km long and up to 250 metres wide."

Marine park authority chairman Russell Reichelt said toxic paint from the hull of the coal carrier was killing coral around Douglas Shoal, where the ship ran aground. He added that it would be some weeks before the full extent of the damage was known but said that paint that had been scrapped off onto the Reef is killing coral in the vicinity.

"I'm a multiple-use marine park advocate but I do think we have claimed in the past that we've got the best shipping protection in the world," he said.
"If the best isn't good enough - we're still having groundings - we have to do better."

A white plume that had been photographed around the coral was evidence that the ship’s hull was crushing coral as it moved with the wind and the swell of the sea.
Australian environment minister Peter Garrett has asked the marine park authority for a thorough review of the site.