China Railway Takes Stake In African Minerals

Funds Will Develop Sierra Leone Iron Ore Project

Guernsey-based exploration company, African Minerals Ltd., has signed an agreement with China Railway Materials Commercial Corp. to develop the Tonkolili iron-ore project in Sierra Leone.

Under the terms of the agreement China Railway will take a 12.5% stake in Africa Minerals in a share issued that will raise £167.8 million, according to a statement released by Africa Minerals on Thursday. The funds will enable Africa Minerals to begin the first phase of production at Tonkolili.

This is the latest in a series of Chinese overseas investments to attempt to become less dependent on the three largest iron ore producers, Rio Tinto, Vale and BHP Billiton.

Carmen Completes Fifth Copper Shipment

Carmen Copper Completes Fifth Shipment

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

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

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

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

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

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


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

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


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

China To Probe Stored Iron Ore Quality

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

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

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

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

China To Remain Net Coal Importer

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

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

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

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

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

China Coal Imports To Exceed 30 Million Tons

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

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

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

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

Newcastle Coal Exports To China Down As Coal Snap Ends

Port Waratah Coal Services, the operator of two terminals at Newcastle, the world’s biggest coal export harbour, has said that exports to China fell by 67 per cent in February as cold weather in the country receded.

The port exported 7.87 million tonnes of coal in February; around 5 per cent of this went to China but thus was down from 15.6 percent in January, 15.9 percent in December and 16.15 percent in November.

Poor weather is being blamed by analysts for the fall as China’s coldest winter for 50 years meant disrupted the country’s internal transportation system making it easier to import coal from the coast.

According to figures from Chinese customs the country imported 16.4 million tons in December, a sixfold increase over December 2008. Around 80 per cent of exports from Newcastle is of steam – or thermal – coal, used by power stations.

Kumba Iron Ore Reports Earnings Up By 10 Per Cent

South African miner Kumba Iron Ore reported an increase in full-year earnings of 10 per cent to R23.4 billion, as export sales jumped 37% to 34.2 million tonnes. However, headline earnings per share fell to 21.82 rand ($2.86) from 23.02 rand in 2008, hit by a stronger rand against the U.S. dollar. Kumba said its operating profit remained highly sensitive to the rand/dollar exchange rate. The rand has risen by 20 percent since the start of 2009. Headline earnings are the main measure of profit in South Africa and strip out one-off, financial and non-trading items.


Kumba, Africa’s largest iron ore producer, saw an increase in exports to China of 130%. China now accounts for 75% of total exports. The company said it produced 41.9 million tonnes of iron ore last year, up from 36.7 million tonnes in 2008.


"Kumba is committed to a further increase in production volumes during 2010, with the continued ramp up of the Jig plant," the company said. "Although global steel demand is expected to return to growth in 2010, this is likely to be moderate and the sustainability of increase in demand outside of China remains uncertain," it added. Analysts expect exports to China to grow by 5% this year.


CEO Chris Griffith said " We expect demand for iron ore to rise further during 2010 as Chinese domestic iron ore production falls and a further recovery in steel markets outside of China, in our traditional markets, starts to take hold.”


Kumba is paying a final cash dividend of R7.40 per share, bringing the total cash dividend for 2009 to R14.60 per share. The company’s majority shareholder, Anglo American, reported that its 64% investment would generate underlying earnings of $490 million for the year ended 31 December 2009.

IronClad Signs China Iron Ore Deal

Australian iron ore junior IronClad Mining has signed a Memorandum of Understanding with Linzhou Iron and Steel of China for the sale of a minimum of one million tonnes of iron ore a year from its Wilcherry Hill project in South Australia. When converted into sales contracts this will account for at least half of Wilcherry Hill’s iron ore output. The ore will be transported by road and rail from Wilcherry Hill to Port Adelaide for shipment to China.

IronClad Executive Chairman Ian Finch said the MOU was in line with the company's aim of establishing long-term relationships with substantial and stable off-take partners while retaining the ability to sell some of its high quality iron ore into the spot markets.
He added that the MOU would be in force from 15 February 2010 until the signing of the first sales contracts between the parties or 31 December 2010 - whichever comes first.

Lizhou Iron and Steel is the second largest steelmaker in southern China with over 8 million tonnes of steel produced in 2009. The company aims to produce 10 million tonnes in 2010.

China Coal Export Volume Triples In 2009

China’s coal imports more than tripled in volume in 2009 as domestic supplies were unable to meet the demand caused by the country’s 4 trillion yuan ($586 billion) economic stimulus package.

Coal imports jumped 110% to 130 million tonnes in 2009 with an average price of $84 per tonne, the General Administration of Customs (GAC) said Wednesday.

The GAC attributed the increase to higher domestic coal prices and a supply shortage caused by the increase in demand after the economic stimulus package increased demand for high-quality coking coal in the steel, cement and chemical industries.

China’s coal exports stood at 22.4 million tonnes last year, down 50.7% year on year with a value of $2.38 billion in value, a year-on-year decrease of 54.7 percent.