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).

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.

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.

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.

UK "Clean Coal" Exploration Approved

The UK's Coal Authority has approved a bid by a company to explore whether coal seams beneath the Humber could be used to produce "clean" energy.

Studies by the Clean Coal Company suggest there are coal reserves of 200m tonnes between Grimsby and Immingham.

That would be enough to meet half the energy needs of Grimsby and Hull for at least 30 years, the company said.

In a process called gasification, coal would be turned into a gas underground and then used as a fuel.

Carbon dioxide would be separated during the gasification process and stored in the underground cavities left by burning the coal.

The Humber is one of five locations around the UK coast to be surveyed by the company for potential energy use.

The site stretches over 50 sq miles (80 sq km), with survey boreholes being drilled at depths of up to 0.7 miles (1.2 km).


COAL GASIFICATION
The process of underground coal gasification works by pumping a mix of water and air or oxygen in to a coal seam, through a borehole
The coal is burnt underground, and the gas produced in the process can then be used as a fuel
Supporters of the process say immediate benefits include no need for traditional mining
The company said the investigations, which will be carried out in the first half of 2010, would have no detrimental impact on marine life, shipping or fishing in the estuary.

If the project does go ahead it would lead to a multi-million pound investment in North East Lincolnshire and create up to 30 jobs.

According to Clean Coal, this would be the first time that the gasification of underground coal would be potentially available to the UK energy market.

The gas extracted in the process can be used to power electricity generating turbines, industrial heating, or used in jet and diesel oil production.

Clean Coal chairman Rohan Courtney said: "Recent developments in directional drilling technology and the growing need for new, secure and environmentally benign sources of energy means that underground coal gasification now merits serious investigation.

"This is an exciting and commercially viable development which can bring significant long-term benefit to Humberside."

A Friends of the Earth spokesman said: "As long as no danger was posed to marine wildlife, and all the C02 produced by any gasification of the coal seam was fully captured and stored underground, then it's definitely a potential source of energy that should be looked at."

Source: BBC

Tata To Revive Production Capacity At Corus

Tata Steel today said its European subsidiary Corus will be able to meet full capacity utilisation by the end of the current fiscal, riding on revival in global demand.

Corus, which had cut production capacity of its mills by as much as 50 per cent amid the demand slump last year, has currently revived the utilisation of its mills to 80 per cent.

"In October, the capacity utilisation had touched 80 per cent. It should be 85 per cent by the end of November and 100 per cent by the end of this financial year," Tata Steel Vice-Chairman B Muthuraman said on the sidelines of CII Steel Summit here.

Corus produces about 20 million tonnes of steel per annum.

"Demand is coming back in the west," he added.

Globally, steel producers have started reviving their production capacities with the rise in demand for their products. ArcelorMittal had revived the capacity utilisation of its mills to about 61 per cent in the past three months and aims to take it up to 70 per cent in the ongoing quarter.

However, the world's largest steel maker had warned against the over production at Chinese still mills and the resultant influx of cheap steel goods, especially in the South Asian market.

But, Muthuraman said the production by Chinese steel mills is only meant to feed its domestic market and there is no threat of dumping of cheap steel items.

"Chinese steel production will meet its internal demand, which is high," he added.

Source: Business Standard

Wolf Talks Up UK Tungsten, Tin Development

Wolf Minerals is doing the rounds on the east coast, talking up interest in its Hemerdon tungsten and tin project.

Hemerdon will be the first sizeable new metals mine in Britain (Devon to be precise) in more than a decade.

After hanging on through the global financial crisis, Wolf recently raised $4 million to get through a feasibility study, which it hopes to have done in the second quarter of next year -- a year later than proscribed in its pre-GFC timetable.

According to managing director Humphrey Hale (a Brit himself), Hemerdon has an NPV of $US237m, which makes Wolf’s $14m market value look a little low if you buy the story of the mine and continued tungsten demand.

With China controlling 80 per cent of global tungsten production, Wolf is expecting European companies like Stanvik and H.C. Starck to want to tie up demand from the British mine.

Perth-based Wolf is looking to finance the L64m ($11.7m) start-up cost through a mixture of debt and equity and is chasing some lift in the share price to help it get some better terms for whatever amount of equity financing it settles on.

Hemerdon has fairly moderate grades, but a low strip ratio of 1.46:1, which Wolf says should keep a lid on costs.

Source: The Australian

Clarksons Begins Iron Ore Swap Trading

A unit of shipping services group Clarksons has begun iron ore swap trading and expects to see the largest growth from its Chinese clients and freight operators initially, the company's chief executive told Reuters on Wednesday.

Clarkson Securities Limited, the futures broking arm of the leading ship broker, has been offering cash-settled iron ore swaps since earlier in September.

"We have a huge number of clients that look at iron ore from the freight perspective," Chief Executive Alex Gray said in a telephone interview.

"We are interested as a group to move into the broking of other commodities and iron ore is a good fit for us."

Source: Reuters

Glebe Given Fluorspar Go-Ahead

A mining company's application to work a Peak District quarry for six years has been given the go-ahead after a court decision looked like throwing the application into doubt.

In January, Peak District National Park Authority granted Glebe Mines permission to extract 660,000 tonnes of fluorspar ore from Tearsall Quarry over six years, on Bonsall Moor.

It followed an offer by Glebe to give up its rights to quarry minerals at another environmentally-sensitive site – Peak Pasture, at Longstone Edge.

But in March, a Court of Appeal decision clarified the legal status of quarries on Longstone Edge, including Peak Pasture.

As a result, authority members have reconsidered whether the benefits gained were still sufficient to warrant allowing the Tearsall application to go ahead.

After a debate, authority members decided that, on balance, the benefits of protecting Peak Pasture meant the application should proceed.

Narendra Bajaria, chair of the Peak District National Park Authority, said: "Even with the new ruling, the 1952 planning permission covering Peak Pasture doesn't require the site to be restored once quarrying has finished."

Source: Bakewell Today

EU Petcoke Imports Rise Despite Recession

Figures from the European Union show that despite the global recession, imports of calcined petroleum coke into the EU rose by almost 54% to just under EUR138 million during the first quarter of 2009 compared to a year ago. However, the calcined petroleum coke trade between EU member states fell during the period by 6% to EUR79 million.

China and the USA were the chief sources for calcined petroleum coke, which is mainly used in the aluminium industry. The United States accounted for 45% of imports from outside the EU at EUR63 million, a rise of 15% over the first quarter of 2008. Despite the appreciation of the Yuan, China’s rise in imports was even more spectacular showing an increase of 225% from EUR9.59 million in Q1 of 2008 to EUR31.2 million in the first quarter of 2009.

Japan also saw a significant increase as its CPC exports to the EU trebled to EUR18.9 million in the quarter.

There were significant falls in imports from Argentina – down 33% to EUR2.9 million – and from Bosnia-Herzegovina, which sold EUR1.5 million to the Netherlands in Q1 of 2008, but zero in the first quarter of 2009.

Among the 27 EU nations, The Netherlands was the single biggest importer with EUR66.3 million worth of imports of which EUR59.7 million came from outside the EU, a rise of 30% on the first quarter of 2008. Two-thirds of the Netherlands’ imports came from the USA.

Germany imported EUR31.3 million – a rise of 85% - though almost half of that came from other EU countries, principally from the Netherlands and the UK.

UK Aluminium Smelter Goes Into Administration

An aluminium smelting firm in Congleton, England, has been placed into administration leading to the loss of 61 jobs. Richard Fleming and Paul Dumbell from the Manchester office of KPMG have been appointed as joint administrator to the firm, FE Mottram (Non-Ferrous) Ltd which has temporarily ceased trading.

The company, which was set up in 1973, makes a wide range of casting alloys, hardeners and de-oxidants. It is one of the largest secondary aluminium smelters in the UK, with a capacity to produce 25,000 tonnes per year.

Dumbell said that the firm had been hit hard by the global downturn, “and in particular, by the reduced level of orders from car manufacturers and the reducing level of metal prices”.

He said that it intended to preserve the site in the hope of finding a buyer.

Neither the Sheffield-based Ferro-Titanium business of F.E. Mottram Limited, or the nearby Dunstan and Wragg business are affected by the administration and both continue to trade as normal.

In 2007, the company made a profit of £384,000 on sales of more than £38.3m.

Source: Crain's Manchester Business

UK Coal Says Production In Line With Expectations

UK Coal Plc, Britain's biggest coal producer, said on Friday that its deep mine production had continued broadly in line with expectations since March 27, the end of its first quarter.

Surface mine production at the start of the year was affected by the weather, but production is expected to recover during the year, UK Coal said.

It said new contracts negotiated or amended during the current financial year had increased its long-term contracted coal prices and short-term cash flows.

UK Coal said its property business, Harworth Estates, continued to progress as expected.

The company said production in the first quarter was flat at 1.7 million tonnes.

Source: Reuters

Outokumpu Axes 110 UK Jobs

Stainless steel giant Outokumpu is to axe another 110 jobs at its melting shop in Sheffield.

The latest cuts come three months after the Finnish company announced it was cutting 50 jobs and three shifts in the same melting shop and just over six months after Outokumpu said it was axing its thin strip business at Meadowhall, with the loss of 230 jobs.

One worker told The Star: "Everyone is feeling a bit betrayed. We feel like we are the scapegoats and everything is geared towards saving jobs in Finland and Sweden.

"It always seems to be Sheffield that's targeted. People are a bit down hearted."

However, Outokumpu denies that Sheffield is being targeted. It says its plants in Finland and Sweden will also be hit and it remains committed to the city where Harry Brearley discovered stainless steel almost 100 years ago.

"Even after these job cuts, we will still have around 450 people left in Sheffield," said a spokesman.

"We will still have a melting shop capable of producing half a million tonnes of stainless steel, although operating at significantly less than that capacity, and a distribution company which has enjoyed some good investment in recent years and is by far and away the largest supplier of stainless in the UK."

At the start of the year the melting shop employed 290 workers and was operating on 18 shifts. Following the latest cuts, the plant will employ around 140 but will still be operating for 15 shifts, although it will only be melting steel for half the week.

During the rest of the week, melting shop workers will be transferred to work on finishing processes or preparing the melting shop.

Outokumpu says the cutbacks will reduce productions from current levels of 350,000 tonnes a year to 200,000 tonnes.

Consultations with workers and unions over the latest round of cuts will start on Monday (April 27) and Outokumpu has said it will "consider all reasonable practicable measures to alleviate the personal hardship caused by this proposal."

News of the cuts came as Outokumpu announced it was looking for further cost savings after suffering a "significant operating loss" on sales which have more than halved, compared with the same period last year.

Outokumpu is suspending the operation of its Chromium mine and ferrochrome plant in Finland, which will affect 300 people, and introducing a rolling programme of lengthy temporarily lay offs, which will affect all 1,500 staff at its Tornio plant.

In Sweden, more than 170 jobs are going at its Degofors plant and discussions are taking place at its Avesta plant about an as yet unspecified number of job cuts.

Figures published this week show Outokumpu lost €249,000 in the first quarter of 2009 on sales down from €1.7 million in the first quarter of 2008 to €679,000.

That compares with a profit of €100,000 in the first quarter of 2008 and a loss of €271,000 in the last quarter of 2008. Group sales in the last quarter of 2008 were €966,000.

Outokumpu says its cost saving programmes are going according to plan and it estimates that total fixed cost savings will be in excess of €100 million in 2009.

The group expects underlying operational losses in the second quarter to be at the same level or slightly lower than in the first quarter.
Chief executive, Juha Rantanen, said: "The stainless markets were exceptionally weak and this is reflected in our loss-making first quarter.

"This market weakness is a result of both lower end-user demand and heavy de-stocking in the long value chain to end consumers. The de-stocking will certainly come to an end at some point.

"Our main focus is now on maximizing cash flow by generating profitable sales, by cutting costs, limiting capital expenditure as well as reducing working capital. It is encouraging that these efforts resulted in strong cash flow generation during the first quarter.

"As the potential for further reductions in working capital is rather limited, increased effort is going into identifying additional cost-saving actions on top of those already being implemented."

Source: Sheffield Telegraph

Tata Targets £1 Billion Cost Savings At Corus

Rough times call for tough measures. Tata Steel is targeting £1 billion in cost savings at its UK subsidiary, Corus, during FY’10 in a bid to tide over the ongoing global recession. The company has already managed to achieve some £650 million in cost savings upto March 2009.

The Tata Steel group also plans to secure Corus’ raw material base by investing in development of three key properties in South Africa, Canada and Mozambique. "We do not see a recovery in steel demand in Europe, US, Japan and South Korea any time soon. We have taken very strong steps in response to the market in Europe. These include cost reduction and aligning the product mix to suit customer needs," Mr B Muthuraman, managing director of Tata Steel, said at a press meeting on Friday.

Elaborating further, Corus group director of strategy, Jean-Sebastien Jacques, said these savings are based on three cost brackets. These include lowering cost of employment, cutting down on third party sourcing, setting stretch targets across all its divisions to achieve cost reduction.

"Since we are producing at a lower level, we have also been able to reduce cost of employment, apart from reducing the number of contractors. We have also speeded up a planned stretch initiative labelled ‘Fit For Future’ because of the downturn," Jean-Sebastien Jacques added.

On the raw material side, Tata Steel is poised to invest in Sedibeng, an iron ore block in South Africa with estimated reserves of 50 million tonnes alongwith access to another 100 million tonne reserves through a Canadian mining company, New Millennuim Capital. It is already developing coking coal blocks in Mozambique. "We are focussing on projects where cash outflow is small but which can be quickly put to production," Mr Muthuraman said.

Tata Steel has also managed to complete Corus’ financing by converting a bridge loan facility taken to fund the acquistion into a long term loan. "We are comfortable with the cash flow position and will be able to service the loan. We do not have any debt repayment obligation till December 2009," Mr Muthuraman said.

Source: Economic Times

BG Ups Its Offer For Pure Energy

The UK's BG Group has increased its cash offer for Australia's Pure Energy to A$8.00 a share or A$995 million.

BG Group launched the increased offer for Pure Energy in response to revised takeover offer from Arrow Energy which is offering A$3.00 per share in cash and 1.57 Arrow Energy shares.

BG Group said that its offer was wholly unconditional.

Glebe Wins Fluorspar Mine Permission

UK mining firm Glebe Mines has been granted permission to blast a new 45-metre-deep quarry in a Dales hillside – despite protests from residents, walkers and conservationists. Peak Park council members narrowly backed the bid to extract 660,000 tonnes of fluorspar from Tearsall Quarry near Wensley in Derbyshire after a five-hour meeting at the Bakewell Agricultural Business Centre on Friday.

Glebe will stop mining at Longstone Edge near Calver for four years, in exchange for being allowed to open a new 10.4 hectare open pit near Wensley.

Several villagers, an independent ecologist, Friends of the Peak District, Save Longstone Edge and Save Wensley Hillside pleaded with members to block the unusual deal – which officers and members admitted broke conservation guidelines.

Fears included noise, vibrations, pollution, dust, safety, access issues, impact on livestock, threat to tourism and visual and archaeological harm.

Henry Folkard, from the British Mountaineering Council, said: "The company's economic convenience isn't a valid argument for destroying the national park along the way.

"Mineral operators have to start looking to dig underground and should be encouraged to so as soon as possible."

Peak District National Park Authority chairman Narendra Bajaria objected to the new quarry, which he said threatened the park's position as a "national treasure."

Mr Bajaria said: "We are going to set aside our own well-considered policies. That is the price we are being asked to pay for a four year stay of execution and that's all it would be, let's make no bones about it.

"Are we not paying a high price for what we are getting from it? The community benefit is far less than I would have expected."

But Glebe Mines bosses said the new mine was vital to keeping 1,500 workers – including 67 in the Dales – in their jobs.

And general manager Gary Goodyear said refusal of the plans could have knock-on effects at Longstone Edge.

"I believe we have the right to mine at Peak Pasture (Longstone Edge) right now.

"We're not sure what that would remove and there's been quite a bit of limestone removed to get fluorspar already. But we could move quite quickly if we needed to," Mr Goodyear added.

Members approved officers' recommendation to back the plans, by ten votes to eight.

The Peak District National Park Authority received 435 letters backing Glebe's proposals, and 2,269 against before Friday's meeting.

Source: Matlock Mercury

Corus To Sell Teesside Plant

UK steelmaker Corus has confirmed that it is to sell its plant at Redcar in the north east of England to an Italian-led partnership made up of two of Teesside Cast Products’ (TCP) five key customers.

Family-owned Marcegaglia, based in Northern Italy, will become the majority stakeholder in the plant, along with South Korean-based Dongkuk. Corus will retain a minority share of around 25%.

The transfer of ownership will effectively mean the end of the consortium of buyers - made up of Marcegaglia, Dongkuk, Duferco , Imsa (now Ternium), and Corus’ own downstream plants - brought together in 2004 to guarantee TCP’s future.

Last week, it emerged that the plant, which employs around 2,000 staff, had escaped swingeing job cuts as Indian-owned Corus scaled back its UK production.

TCP MD Jon Bolton said the plant would continue to supply all five of the former consortium members but the consortium deal had been torn up.

“It’s a different arrangement. The two members will have an equity share and we will continue to supply all of them - it’s very positive.”

The impact on local management of the plant is still unclear.

“Any change of ownership will have an impact but it’s difficult to say what that will be at the moment,” said Mr Bolton.

“As far as investment goes, they are aware of our plans.”

Last year, TCP reopened negotiations with the consortium on extending the supply deal beyond 2014.

Discussions revolved around major investment in the plant’s blast furnace.

The new deal, reportedly worth, $450m, will guarantee steelmaking stays on Teesside, Mr Bolton said earlier this week.

It relieves Tata-owned Corus of a large plant and helps restore stability to its balance sheet after a massive slump in world steel demand.

Source: Newcastle Journal

Hargreaves Takes Control Of Coal4Energy

British business support group Hargreaves Services Plc has bought the remaining 50 percent stake in Coal4Energy Ltd from UK Coal Plc for £9 million, the companies said on Wednesday.

Coal4Energy will now be a wholly-owned subsidiary of the group and will relocate to Hargreaves' Yorkshire regional office in Glasshoughton, Castleford. The company is the largest supplier of coal to the UK domestic and industrial markets and Hargreaves said that the purchase will have a significant impact on its second-half profit.


UK Coal said the net profit from the disposal of its half of the Coal4Energy joint venture is estimated to be about £7.0 million and the proceeds will be used to reduce borrowings and fund investment.

Glebe Fluorspar Plan Hits Opposition

Hopes by UK quarry operator Glebe Mines of expanding operations at its Tearsall open pit on Bonsall Moor in Derbyshire are being opposed by a local campaign group.

Friends of the Peak District is fighting an application to extend the pit, which is set to be decided on Friday January 30.

Glebe wants to extract a further 660,000 tonnes of fluorspar from the 11.95 hectare site over the next six years.

The pressure group argues it will spoil the landscape near Wensley and Winster and should be scaled back in the Peak District because underground supplies of the mineral fluorspar are still available in the area.

Glebe has an underground fluorspar mine at nearby Great Hucklow and has agreed that 15 per cent of all the fluorspar it extracts in the Peak District will come from underground by 2011.

Andy Tickle, head of planning at FPD, said: "This is still not enough. We want Glebe to guarantee 30 per cent of fluorspar comes from underground by 2012. This would be the best way to make sure that their impact on the Peak District's landscape can be minimised."

Corus Cuts 3500 Jobs

Steelmaker Corus has confirmed that it is cutting 3,500 jobs worldwide, including about 2,500 in the UK. The announcement comes after Corus, like all steel firms, has seen a substantial fall in demand.

Corus, a subsidiary of India's Tata Steel, currently employs 24,000 people in the UK and 42,000 worldwide. It said it would be "mothballing" a facility at Llanwern near Newport, south Wales, and was trying to sell a majority stake in its Teesside site.

The company said that 600 jobs would go at Llanwern, plus an additional 1,000 to 1,200 across the firm's other Welsh operations, including its main steelworkers at Port Talbot. A further 1,400 jobs will go at other UK sites, including 713 in Rotherham and 93 in Scunthorpe.

Corus said it would "make every effort to achieve the job losses through voluntary redundancies".

"The structural changes we are proposing today have been carefully considered," said Corus chief executive Philippe Varin, "they are essential for the future of the business."

Corus workers were told about the job cuts this morning.

The firm said the restructuring work would help it improve annual profits by more than £200m.

"This is a body blow for UK manufacturing," said John Wilson, senior officer of the GMB union. Newport West MP Paul Flynn said the decision to mothball the Llanwern site was "a bitter blow for the workers and their families".

"There is virtually no alternative for blue-collar workers with skills from the steel industry. It is going to be an extremely difficult period."

Steelmakers around the world have been hit by falling demand from carmakers, shipbuilders, construction and heavy engineering sectors, which, in turn, have seen demand for their products drop.

A 40% fall in global demand for steel from its peak of last year caused Corus's order book to drop by more than a third and steel prices have fallen by half since last September.

Corus was formed in 1999 through the merger of British Steel and Koninklijke Hoogovens. In 2007, it became a subsidiary of Tata Steel. The company says it is Europe's second-largest steelmaker, producing 20 million tonnes of crude steel every year with annual revenues are about £12bn ($16.3bn).

Corus has requested financial help from the UK government for a rolling programme to provide new skills to its entire workforce.

"It is essential that the UK government offers this industry the same support being offered to the banking sector because, just like banks, steel is the bedrock of our economy," added Mr Wilson.

Derek Simpson, joint leader of Unite, said his union would not accept any compulsory redundancies.

"We understand that Corus do face difficulties, but before this recession, Corus had been making extremely healthy profits," he said.

"Our members have supported Corus through good times and bad and now expect Corus to support them."

Source: BBC