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.
Australian coal miner Macarthur Coal Ltd has said that full-year profits may fall as much as 39 percent from a year ago after a fall in prices.
Net income may be A$103 million to A$113 million for the year ending 30 June from A$168.6 million in 2009, the company said in a statement to the Australian stock exchange.
Macarthur is currently the target of a A$4.1 billion ($3.8 billion) takeover offer from America’s Peabody Energy.
“Profitability in the June 2010 quarter has improved given recent coal price settlements with higher prices starting April 1”, the company said in the statement. Macarthur said it is still on course for full-year sales volumes of 4.8 million to 5.0 million tons.
Coking coal prices have risen sharply in recent months after the global steel industry came into recovery. A number of global coking coal suppliers including BHP Billiton, Rio Tinto and Teck Resources won a shift from annual to quarterly contracts and a rise of 55 per cent for supplies in the April to June quarter. Australia’s Centenntial Coal also warned of a tightening in the global supply of the product.
Peabody asked Macarthur, the world’s largest exporter of pulverized coal, for more information after completing a review of its finances yesterday. The American miner is also said to be concerned after the Australian government announced on Sunday that it plans to bring in a new 40 per cent tax on mining company’s profits. Macarthur said on Tuesday that the new tax had a brought an air of uncertainty to the industry.
The Australian Financial Review’s Street Talk column reported in its Wednesday edition that Noble Group Ltd may be preparing to make a new approach to Macarthur Coal as early as this week.
Last week Noble saw a deal rejected by its shareholders in which it would have become the largest shareholder in Macarthur.
Macarthur is currently in talks with US miner Peabody Energy Corp., which has made a A$4.1 billion cash offer for the company.
Iron ore shipments on the Great Lakes were higher in March than in any other March since 2006 as the American steel industry continues to pull out of recession.
The Lake Carriers' Association says its ore boats shipped 2,109,911 net tons in March. However, the year-to-date figure of 4.1 million tons is still 13% lower than the five-year average for the first quarter.
Duluth, Two Harbors, and Silver Bay all beat the five-year averages for March ore shipments. Superior didn't ship any iron ore at all last month. The locks at Sault Ste. Marie, Mich. opened on March 21, four days ahead of schedule, to accommodate the need for iron ore at steel plants.
Australia’s New Hope Corporation, which last week had a revised takeover bid for Macarthur Coal turned down, has said that it will look for other acquisitions if, as seems likely, its bid for Macarthur is unsuccessful.
Speaking to Australia’s ABC TV network on Sunday, New Hope Chairman Rob Millner said “Obviously there are other avenues for us. If we can’t find anything in coal, we’ll have to go and look somewhere else. Going forward, there’s a real shortage of particularly pulverized coal in the world, and most of the ports around the world are constrained by capacity, so I see a good future for coal, both thermal and PCI coal.”
Commenting on the Macarthur bid, Mr Millner said: “If we secured Macarthur that would probably steady us up for the time being (with acquisitions). But, you know, it's certainly going to create a very large independent coal company with a market capitalisation of well over $8 billion and it would be in the top 30 to 40 companies within Australia."
Meanwhile, Andrew Harrington, a coal analyst at Paterson Securities, told ABC “They [New Hope] don’t have any debt on their balance sheet. They’ve got A$1.5 billion in cash in the bank and probably another half billion coming from the sale of their Arrow Energy shares, so they could easily plonk down the cash and raise some financing to afford this.”
New Hope’s revised takeover bid for Macarthur - its second bid - included A$950 million in cash, but it was rejected by the Macarthur board on 15 April. Macarthur said the New Hope bid did not represent an adequate premium for control of the company. Macarthur said on Friday that it intends to enter into talks with US miner Peabody Energy, which raised its bid to A$16 a share, valuing Macarthur at A$4.1 billion.
The board of Macarthur Coal has said that it will open talks with Peabody, following the American company’s latest $16-a-share offer that values Macarthur at $4.07 billion.
Peabody will be granted a five day period of due diligence.
However Macarthur said an extraordinary general meeting scheduled for Monday to approve its takeover of Gloucester Coal has been postponed to a date, time and venue to be advised.
The moves came after two of Macarthur’s largest shareholders, Korean steel mill Posco with an 8.3 per cent stake and international steel company, ArcelorMittal, which has a 16.6 per cent shareholding in Macarthur, gave a guarded welcome to Peabody’s latest offer.
POSCO said that it "confirms its in-principle support for a Peabody-led privatisation of Macarthur" while ArcelorMittal stated "that the Peabody offer is one that warrants due consideration". Macarthur’s largest shareholder, China’s Citic, has yet to indicate its support for the offer. Peabody has indicated that Macarthur’s three largest shareholders may be allowed to keep their stakes in the company.
The deal to buy Gloucester Coal and a stake in Hong Kong-based Noble Group’s Middlemount project in Queensland would have given Noble at 24 per cent stake in Macarthur. Industry-watchers are suggesting that this deal is now dead as Macarthur begins its engagement with Peabody. However, Macarthur is yet to officially recommend Peabody’s latest bid which could leave the way open for a bid from another mining giant, Switzerland’s Xstrata.
The United States Commerce Department has announced that it will slap antidumping import duties on Chinese steel pipe used in oil and gas wells. US imports of those goods from China were estimated at $1.1 billion in 2009, though that was well down on 2008’s $2.7 billion.
A group of American manufacturers and trade unions, including U.S. Steel and the United Steelworkers Union, filed a complaint over the issue a year ago.
The Commerce Department said on Friday it had made its "final determination" in the antidumping duty investigation and in a statement it said that China has sold the goods in the United States at 29.94 percent to 99.14 percent less than fair value,
"As a result of this final determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond equal to the weighted-average dumping margins," the statement added.
Tianjin Pipe International Economic and Trading Corp., received a final dumping rate of 29.94 percent, as did 37 other Chinese respondents.
All other Chinese exporters are subject to the final dumping rate of 99.14 percent.
The US International Trade Commission is scheduled to issue its final determination of injury in the case by 24 May.
Australian miner Macarthur Coal has announced a one-week delay in a shareholder vote on whether to take over smaller rival Gloucester Coal Ltd.
In a statement on Friday the company said that a shareholder meeting due to take place on Monday will now take place on 19 April.
The company has delayed the vote after some shareholders complained there was not enough time to review all the information the company has disclosed with regards to the matter.
Macarthur is fighting a takeover battle with America’s Peabody Energy. Earlier on Friday Macarthur rejected a counter-bid from Australian coal miner New Hope.
Australia’s Macarthur Coal has rejected a $3.4 billion bid from rival Australian miner, New Hope.
New Hope has made an all-share offer worth $14.58 a share, a 58c premium over the rival bid from the US’s Peabody Energy.
Macarthur’s shares closed at $15.50 – a rise of 8.2% on the day.
Macarthur has announced that a meeting on Monday to discuss a deal with Hong Kong’s Noble Group will take place as planned on Monday. Peabody has tried to get Australia’s Takeover Panel to stop the meeting from taking place.
Meanwhile, the Australian Financial Review reported on Friday that international mining company Xstrata has approached two of Macarthur’s shareholder, POSCO and ArcelorMittal, about a bid to rival the offer from America’s Peabody Energy.
The newspaper did not disclose its source for the information.
US coal miner Peabody Energy has asked Australia’s Takeover Panel to block a shareholders’ meeting on Monday by takeover target Macarthur Coal to approve Macarthur’s acquisition of Noble Group subsidiary, Gloucester Coal.
If Monday’s meeting approves the Gloucester acquisition it would give Noble Group a stake of 24% in Macarthur effectively blocking Peabody’s bid for the Queensland miner.
Peabody wants the panel to provide an updated independent expert's report on the Gloucester bid and for the Macarthur shareholder vote on that bid delayed until at least two weeks after the report has been sent to shareholders.
Macarthur’s response was it was justified in not engaging with Peacock on the basis that the conditional bid was “not a superior proposal” to the Gloucester/Noble transaction. It said that this resulted in it not being permitted to engage under its Gloucester agreement.
"It is disingenuous for Peabody to now seek to delay the shareholder meeting in circumstances where it has not made a binding offer to Macarthur shareholders," Macarthur said in a statement to the stock exchange, adding "Your directors believe the Peabody [press] advertisements are self-serving and potentially misleading."
Macarthur rejected an independent report compiled in February which valued its shares at below the Peabody bid, saying that the report did not take into account gains in coal prices since then.
It rejected Peabody claims that Noble would have a controlling influence over Macarthur. It also said that a February independent expert's report valuing Macarthur shares at below Peabody's bid was out of date and did not take into account gains in coal prices.
Macarthur shares rose 5c on Thursday to $14.36, 36c higher than Peabody’s $14 a share bid.
Meanwhile the Australian Financial Review suggested that Macarthur is holding out for a $15 a share bid and that Peabody was offering major shareholders Posco, Citic Pacific Ltd. and ArcelorMittal to persuade them to accept the bid. The newspaper gave no source for its report.
US steelmaker, AK Steel, said on Tuesday that it will add a $420 per ton surcharge for electrical steel products shipped in May.
The surcharge is based on price increases for
raw materials – principally iron ore – and energy used to make its steel products. The March purchase cost was used to determine surcharges for May.
The company's electrical steel products include electrical transformers and generators.
AK Steel produces flat-rolled carbon, stainless and electrical steel, primarily for automotive, appliance, construction and electrical power and generation and distribution markets.
Utah Mine May Contain Ecnomically Sginificant Gold Deposits
Canadian miner, Andover Ventures has announced a new set of drilling results from its Burgin mine in Utah.
Andover is reporting grades of up to 365 g/t (grammes per tonne) of silver, 7.43% of lead, 2.39% of zinc and 2.55 g/t of gold from hole C0902 and 295 g/t of silver, 12.18% of lead, 4% of zinc and 1.481 g/t of gold from hole C0904.
“Our current interpretation suggests that the gold-rich horizon may be a consistent and economically significant, but previously unrecognized, zone within the deposit,” the company said in the statement.
Andover also announced a private placement of 1.2 million units with each consisting of a common share in the capital of the company at C$0.25 and one common share purchase warrant, entitling the owner to buy one additional share at C$0.35, exercisable over 24 months.
Twenty-five coal miners have been killed and four are still missing in a blast at a coal mine in the US state of West Virginia.
The accident happened at the Massey Energy Company’s Upper Big Branch mine some 30 miles south of Charleston.
Safety officials said that a number of miners were killed directly by the blast on Monday afternoon while others were killed by breathing in toxic air.
Officials also said that the chances of finding the four missing miners alive were slim, but that rescuers would return to the mine after it had been ventilated.
The accident is the worst at a US coal mine since 1984.
US coal miner, Peabody Energy, has raised its bid for Macarthur Energy, the Australian coal producer, to $3.27 billion after Macarthur spurned Peabody's initial $3 billion offer. Peabody has now upped its bid $14 a share for Macarthur – a $1 a share increase on last week’s offer.
In a separate development, Singapore-based commodities trader, Noble Group, has made an all cash offer for the remaining shares of Gloucester Coal it does not already own. The company has offered $12.60 a share for the remaining 12.3% stake. Noble already owns 87.7% of Gloucester and says its offer is a 35.3% premium to Gloucester’s closing price on 1 April.
Yesterday, Noble derided Peabody's bid for Macarthur in a colourful statement to the Singapore Stock Exchange.
Peabody's offer is still conditional on Macarthur not acquiring Gloucester Coal. The American firm is attempting to delay a meeting on 12 April when investors will vote on the Gloucester deal. Gloucester executives have told their shareholders to vote in favour of Macarthur's offer.
Meanwhile, Macarthur’s third-largest shareholder, the Korean steelmaker POSCO, has said that it wishes to remain a shareholder of Macarthur regardless of any offer for the company. POSCO has an 8.3% stake in Macarthur.
Macarthur shares were suspended for a while on Tuesday pending the announcement of Peabody’s revised offer, but trading resumed later in the day and shares closed up 23c at $15.10 a share, 7.9% above the Peabody offer price.
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 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."
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.
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.
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.
