Atlas, Aurox Merger Clears Final Hurdle

Atlas, Aurox Merger Clears Final Hurdle

The merger between Australian iron ore miners Aurox Resources and Atlas Iron have cleared its final regulatory hurdle on Thursday when the country’s Federal Court approved the $A143 million deal.

As a result of the approval, shares in Aurox will cease to be traded on the Australian Securities Exchange on Friday with shares in the merged entity set to be traded from Monday.

Under the merger deal, shareholders in Aurox will receive one Atlas share
for every three Aurox shares held, a deal that values Aurox at 74 cents a share, a 173 premium to Aurox’s share price prior to the deal being announced on 9 March 2010.

The merged entity will have up to 33 million tonnes per year of allocated port capacity in Western Australia’s Pilbara region.

Atlas commenced DSO mining at its Wodgina iron ore project in the Pilbara region
on 20 June. Atlas plans to export iron ore from Wodgina and its Pardoo project in the Pilbara at an annualised rate of 6 million tonnes by the end of the year and 12 million tonnes by 2012.

The company is also developing the Balla Balla project in the West Pilbara area with a mineral resource of 456 million tonnes and ore reserves of 238 million tonnes.

The company will also benefit from Aurox’s allocation of 6 million tonnes a year at the Utah Point berth at Port Hedland.

Iron Ore News; Chhattisgarh Chief Minister Calls For Export Ban

Iron Ore News; Chhattisgarh Chief Minister Calls For Export Ban

The Indian state of Chhattisgarh is to seek a ban on the export of iron ore.
The state’s Chief Minister, Raman Singh, told the IANS news agency that he was re-iterating calls for a ban, which he first made six years ago.

“It is not a wise decision at all to hand over the country's limited natural resources,” Chief Minister Singh said.

“Export of iron ore is a kind of crime against the nation because the country's limited stocks are getting exhausted everyday. It must be preserved for domestic steel industry which is on a massive expansion.”

The call came ahead of a meeting of a 10-member ministerial panel headed by the country’s Finance Minister Pranab Mukherjee this Thursday to consider a new bill for the development and regulation bill of mines and minerals.

India is the world’s third-largest iron ore supplier, exporting around half of its 226 million tonne annual output but calls for a ban have grown in the wake of reports of illegal exports of iron ore, especially from Karnataka. Left-wing parties this week called for a ban while the country’s Steel Minister, Vir Bhadra Singh is also in favour of a ban.

Steel Minister Vir Bhadra Singh last week came out in favour of a ban, saying the country should conserve its precious minerals and export value-added products.

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.

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.

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.

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.

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.

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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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.

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.

BC Iron To Start Production Later This Year

Exports slated for December quarter

Australia’s BC Iron says it is on track to begin production at its Nullagine iron ore project in Western Australia's Pilbara region in the September quarter.


It expects to commence production at Nullagine in the third quarter of the 2010 calendar year with exports scheduled to begin in the December quarter.


The project is an equal joint venture with Fortescue Metals Group Ltd, which agreed in June 2009 to provide rail haulage, port handling and ship loading facilities to in exchange for half of the project.

India's Iron Exports "Around 100mn Tonnes"

MMTC Official Puts Levels Similar To Last Year

A senior official in a state-run Indian company says he expects the country to export around 100 million tonnes of iron ore in the current financial year, which began in March.

"India's iron ore exports in 2010-11 are expected to be about 100 million tonnes," MMTC Chairman and Managing Director Sanjeev Batra told reporters on Friday.

The country exported about 105.67 million tonnes of iron ore in 2008-09, and figures for the last financial year are expected to have been in a similar range in the last financial year, Federations of Indian Mineral Industries Secretary General R K Sharma said.

Mr Sharma added that the recent increase in export duty on iron ore lumps to 15 per cent from 10 per cent may reduce its exports by 50 per cent. India exported around five million tonnes of iron ore lumps during 2008-09.

The export duty on iron ore fines, which comprises the bulk of iron ore exports, is 5 per cent.

Mr Batra also said that MMTC is likely to import 200 tonnes of gold in the current financial.

India's total gold imports for 2009-10 were 739 tonnes, of which MMTC imported 190 tonnes.

Iron Ore Of Canada Announces Labrador City Expansion

IOC Revives USD800 million Expansion Plans

Canada's biggest iron ore producer said yesterday that it will spend US$800 million to reinstate an expansion of capacity at its Labrador City mines and concentrator in the western part of the Canadian province of Labrador.

The programme was suspended in the middle of 2008 when steelmakers slashed production and iron ore fell to $40 U.S. a tonne compared to around $180 now.

The first stage of the programme – costing $435 million - will add 4 million tonnes of annual capacity to bring it to 22 million tonnes by 2012 and 26 million tonnes by 2015.

IOC will upgrade its conveyor system and add a fourth autogenous grinding mill, besides expanding the mines. It says it has about 4 billion tonnes of known reserves in Quebec-Labrador.

IOC majority shareholder Rio Tinto will invest $235 million in the revived first-stage expansion, with fellow shareholders Mitsubishi and Labrador Iron Ore Royalty Income Fund will provide the balance.

Surging Iron Ore Prices Boost Profits at Mitsubishi and Mitsui

Surging Iron Ore Prices Boost Profits at Mitsubishi and Mitsui

Surging iron ore prices are likely to boost profits at two of Japan’s largest trading houses.

Both Mitsubishi Corp. and Mitsui & Co., Japan’s two biggest trading houses, are forecasting higher profit this year on the back of increased prices for iron ore and coking coal.

Mitsubishi said on Friday said that net income may climb to 370 billion yen ($3.99 billion) in the year ending March 2011 - up from 273.1 billion yen a year earlier.

Mitsui expects profits of 320 billion yen, up 114 per cent on 149.7 billion yen a year ago.


Mitsubishi has stakes in iron ore mines in Chile and Canada and in a coking coal venture with BHP in Australia. It expects profits from metals to hit 185 billion yen this fiscal year compared to 137.9 billion yen in the year ended March. Earnings from energy are expected to climb to 73 billion – up from 71.9 billion.

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.