Baosteel Group Corp., China’s largest steelmaker, and other Chinese mills won a 35 percent reduction in iron ore prices from Australia’s Fortescue Metals Group Ltd.
The Chinese mills will pay 94 U.S. cents a dry metric ton unit for fines, the most commonly traded product, Shan Shanghua, the secretary general of the China Iron & Steel Association said today at a press conference in Beijing. The price agreement will apply for the second half of 2009, he said.
China had sought a discount of as much as 45 percent this year, more than the 33 percent offered by Rio Tinto Group, arguing it should enjoy a bigger cut as the largest buyer. The announcement follows the formal arrest of four Rio executives, including Australian Stern Hu, head of the company’s iron ore business in China, last week.
The price for lump iron ore will be 100 cents a dry metric ton unit, or 50 percent lower, Shan said.
Source: Bloomberg
Monday, August 17, 2009
Sunday, August 16, 2009
Chambishi To Delay Cobalt Production
Zambia's largest cobalt producer Chambishi Metals Plc will delay restarting production until September after suppliers in the Democratic Republic of Congo (DRC) failed to deliver cobalt concentrates, it said on Sunday.
Operations at Chambishi were suspended in December and were due to restart in August, but Chief Executive Officer Derek Webbstock said it would have to wait until mines in the DRC begin to deliver raw materials.
"We are still waiting for the cobalt concentrates. The suppliers we agreed with are having problems and we haven't had any deliveries yet," Webbstock told Reuters in a telephone interview.
Webbstock said Chambishi, which had forecast output of 3,400 tonnes of cobalt in 2009 from 2,500 before it suspended operations last December, would first have to stockpile the cobalt concentrates before starting operations.
The resumption of output had already been pushed back to August from July while Chambishi waited for supplies from the DRC.
"If the suppliers get their problems sorted out quickly we can resume production in two weeks time but it may take longer because we need to stockpile the concentrates first," Webbstock said.
Chambishi, which was previously owned by Luanshya Copper Mines (LCM), a joint venture of Bein Stein Group Resources (BSGR) and International Mineral Resources (IMR), is now owned by Enya Holdings of the United Kingdom.
Source: Reuters
Operations at Chambishi were suspended in December and were due to restart in August, but Chief Executive Officer Derek Webbstock said it would have to wait until mines in the DRC begin to deliver raw materials.
"We are still waiting for the cobalt concentrates. The suppliers we agreed with are having problems and we haven't had any deliveries yet," Webbstock told Reuters in a telephone interview.
Webbstock said Chambishi, which had forecast output of 3,400 tonnes of cobalt in 2009 from 2,500 before it suspended operations last December, would first have to stockpile the cobalt concentrates before starting operations.
The resumption of output had already been pushed back to August from July while Chambishi waited for supplies from the DRC.
"If the suppliers get their problems sorted out quickly we can resume production in two weeks time but it may take longer because we need to stockpile the concentrates first," Webbstock said.
Chambishi, which was previously owned by Luanshya Copper Mines (LCM), a joint venture of Bein Stein Group Resources (BSGR) and International Mineral Resources (IMR), is now owned by Enya Holdings of the United Kingdom.
Source: Reuters
Saturday, August 15, 2009
China Manganese Ore Imports Up 15% In June
It is reported that China imported 709,605 tonnes of manganese ore in June 2009, up by 15% MoM compared to 617,146 tonnes in May and almost the same as 712,667 tonnes in June 2008.
The main manganese ore import resources were Australia 281,549 tonnes, up by 240% MoM, South Africa 164,645 tonnes, up by 83.3% MoM, Gabon 89,005 tonnes, Ghana 27,024 tonnes, Myanmar 22,067 tonnes, Kazakhstan 14,802 tonnes and Brazil 14,688 tonnes.
Source: Steel Guru
The main manganese ore import resources were Australia 281,549 tonnes, up by 240% MoM, South Africa 164,645 tonnes, up by 83.3% MoM, Gabon 89,005 tonnes, Ghana 27,024 tonnes, Myanmar 22,067 tonnes, Kazakhstan 14,802 tonnes and Brazil 14,688 tonnes.
Source: Steel Guru
Shanxi To Reopen Idle Coal Mines
Ominous signs for Australian coal miners surfaced yesterday, with reports China's biggest coal mining province, Shanxi, would reopen idled mines and produce an extra 150 million tonnes in the second half.
Demand for Australian coking and thermal coal surged unexpectedly in recent months as stimulus-led demand combined with the closure of high-cost and unsafe mines left China short of coal.
In response, Australian mines that were shut due to the global economic crisis have started to return to production.
This week, BHP Billiton, whose Queensland mines make it the world's biggest coking coal exporter, said its mines were back to almost full capacity.
Coal miners have been optimistic about the demand, but wary of how sustainable it could be, knowing that China, the world's biggest coal producer, is capable of swamping the market.
Stoking those concerns, top-five Chinese power producer Huadian Power International announced Shanxi province's second-half output could rise to 400 million tonnes, from 250 million tonnes in the first half.
By comparison, Australia, the world's biggest coal exporter, exported about 250 million tonnes of coking and thermal coal in the last financial year.
ANZ head of commodities research Mark Pervan said although the figures could put a damper on some enthusiasm for coal stocks, he believed second-half coking coal demand from China was being underestimated by the market.
"Second-half demand is going to be quite strong. It will be when the stimulus package is starting to hit the ground," he said.
He said a lot of the demand would be in steel-intensive sectors such as real estate and motor vehicles.
Almost 4000 people were killed working in Chinese coalmines in 2007, prompting the government to close smaller mines.
Still, Australian miners have been sceptical about China's willingness to keep mines shut in the face of recent gains in spot prices.
One local mining source with contacts in China said he was doubtful China's coal output had been slashed as much as stated, with smaller mines often getting around directives to shut down.
Chinese imports of coking coal, mostly from Australia, surged to about 4.6 million tonnes in June, up about 50 per cent from May.
That compared with almost nothing a year earlier when China was a net exporter.
Source: The Australian
Demand for Australian coking and thermal coal surged unexpectedly in recent months as stimulus-led demand combined with the closure of high-cost and unsafe mines left China short of coal.
In response, Australian mines that were shut due to the global economic crisis have started to return to production.
This week, BHP Billiton, whose Queensland mines make it the world's biggest coking coal exporter, said its mines were back to almost full capacity.
Coal miners have been optimistic about the demand, but wary of how sustainable it could be, knowing that China, the world's biggest coal producer, is capable of swamping the market.
Stoking those concerns, top-five Chinese power producer Huadian Power International announced Shanxi province's second-half output could rise to 400 million tonnes, from 250 million tonnes in the first half.
By comparison, Australia, the world's biggest coal exporter, exported about 250 million tonnes of coking and thermal coal in the last financial year.
ANZ head of commodities research Mark Pervan said although the figures could put a damper on some enthusiasm for coal stocks, he believed second-half coking coal demand from China was being underestimated by the market.
"Second-half demand is going to be quite strong. It will be when the stimulus package is starting to hit the ground," he said.
He said a lot of the demand would be in steel-intensive sectors such as real estate and motor vehicles.
Almost 4000 people were killed working in Chinese coalmines in 2007, prompting the government to close smaller mines.
Still, Australian miners have been sceptical about China's willingness to keep mines shut in the face of recent gains in spot prices.
One local mining source with contacts in China said he was doubtful China's coal output had been slashed as much as stated, with smaller mines often getting around directives to shut down.
Chinese imports of coking coal, mostly from Australia, surged to about 4.6 million tonnes in June, up about 50 per cent from May.
That compared with almost nothing a year earlier when China was a net exporter.
Source: The Australian
Konkola Contracts Copper Mining To Brazilian Firm
Zambia's Konkola Copper Mines (KCM) has contracted Brazil's U & M Mining to help it mine for copper in Zambia as it seeks to raise output to 500,000 tonnes by 2011, the company said on Friday.
KCM, Zambia's largest copper producer, also reiterated its plans to push cobalt output to 5,000 tonnes after starting operations at its 300,000 tonnes per year Nchanga copper smelter. It gave no figures for current cobalt production.
"Under the contract, U & M (Mining) will mine two areas...of the vast Chingola open pit over a period of three years," KCM acting manager for open pits, Obino Kalela said in a statement.
Kalela said U & M Mining would mine the two areas for both waste and copper ore while Konkola would now concentrate on the Nchanga open pit mine, which produces copper and is the company's main source of cobalt.
KCM, which also operates the Nchanga open pit, Konkola copper mine and the satellite Fitwaola mine, is a unit of London-listed Vedanta Resources Plc (VED.L), which is developing the Konkola Deep Copper Project (KMDP), touted as Africa's deepest copper mine.
KCM says about $500 million will be spent on developing the KDMP.
Konkola is implementing several projects, which it says will raise its output to 500,000 tonnes -- or half of Zambia's total planned production -- by 2011 from the current 200,000 tonnes per year.
Zambia is Africa's largest copper producer, with copper mining being the nation's economic mainstay. The mines are a major employer in this southern African country of 12 million people.
SourcE: Reuters
KCM, Zambia's largest copper producer, also reiterated its plans to push cobalt output to 5,000 tonnes after starting operations at its 300,000 tonnes per year Nchanga copper smelter. It gave no figures for current cobalt production.
"Under the contract, U & M (Mining) will mine two areas...of the vast Chingola open pit over a period of three years," KCM acting manager for open pits, Obino Kalela said in a statement.
Kalela said U & M Mining would mine the two areas for both waste and copper ore while Konkola would now concentrate on the Nchanga open pit mine, which produces copper and is the company's main source of cobalt.
KCM, which also operates the Nchanga open pit, Konkola copper mine and the satellite Fitwaola mine, is a unit of London-listed Vedanta Resources Plc (VED.L), which is developing the Konkola Deep Copper Project (KMDP), touted as Africa's deepest copper mine.
KCM says about $500 million will be spent on developing the KDMP.
Konkola is implementing several projects, which it says will raise its output to 500,000 tonnes -- or half of Zambia's total planned production -- by 2011 from the current 200,000 tonnes per year.
Zambia is Africa's largest copper producer, with copper mining being the nation's economic mainstay. The mines are a major employer in this southern African country of 12 million people.
SourcE: Reuters
Friday, August 14, 2009
Resource Estimate Increased At Tonkolili Iron Ore Project
African Minerals Ltd said its pre-tax losses narrowed in the first half and announced on Friday an increase in resource estimates at the Tonkolili iron ore project in Sierra Leone.
It said the Tonkolili project contains an estimated 5.1 billion tonnes of iron ore and that drilling on the northern section of the licence area indicates the potential to increase the iron ore magnetite resource to about 10 bilion tonnes.
The AIM-listed company said it believes Tonkolil is the world's third-largest magnetite iron ore resource.
The group's losses narrowed to $5.1 million from $11.4 million on a significant drop in the cost of sales.
Source: Reuters
It said the Tonkolili project contains an estimated 5.1 billion tonnes of iron ore and that drilling on the northern section of the licence area indicates the potential to increase the iron ore magnetite resource to about 10 bilion tonnes.
The AIM-listed company said it believes Tonkolil is the world's third-largest magnetite iron ore resource.
The group's losses narrowed to $5.1 million from $11.4 million on a significant drop in the cost of sales.
Source: Reuters
Yanzhou Climbs As Felix Recommends Bid
Yanzhou Coal Mining Co. climbed in Hong Kong and Shanghai trading after Felix Resources Ltd. recommended its shareholders accept a A$3.5 billion ($3 billion) takeover offer from China’s fourth-biggest coal producer.
Yanzhou gained as much as 7.3 percent in Hong Kong and jumped by the 10 percent trading limit in Shanghai. The Hong Kong shares climbed 1.7 percent to HK$12.32 at 11:36 a.m. while the Hang Seng Index was down 0.6 percent. Felix rose 4.6 percent to A$17.67 in Sydney trading.
Yanzhou will pay A$18 a share for Felix, including a dividend and stock in a unit, Brisbane-based Felix said yesterday. The acquisition is China’s biggest in Australia since Rio Tinto Group rebuffed a $19.5 billion investment from state- owned Aluminum Corp. of China in June.
“We view the acquisition positive to Yanzhou, as the company puts excess cash to use,” Credit Suisse Group analysts Trina Chen, Kevin You and Ada Dai said in a report today. “We estimate the proposed acquisition to boost earnings by 14 percent for 2010 earnings, and 37 percent by 2011 earnings.”
Chinese energy companies have spent at least $12.6 billion on overseas assets since December as they take advantage of lower valuations caused by the global recession. Macquarie Group Ltd. analysts led by Sophie Spartalis said the offer is “inferior” and shareholders should reject it.
A bid of between A$23 to A$25 a share for Felix would be “more reasonable,” Spartalis said.
Felix reported profit of A$166 million in the half-year ended Dec. 31 and is yet to report full-year profit. The Australian company posted record annual coal sales of 4.8 million metric tons in the year through June.
It’s building the Moolarben coal mine in New South Wales, a A$405 million project that’s a potential “company maker,” according to Credit Suisse Group in Australia. Production is scheduled to start next March, Felix said July 30.
Source: Bloomberg
Yanzhou gained as much as 7.3 percent in Hong Kong and jumped by the 10 percent trading limit in Shanghai. The Hong Kong shares climbed 1.7 percent to HK$12.32 at 11:36 a.m. while the Hang Seng Index was down 0.6 percent. Felix rose 4.6 percent to A$17.67 in Sydney trading.
Yanzhou will pay A$18 a share for Felix, including a dividend and stock in a unit, Brisbane-based Felix said yesterday. The acquisition is China’s biggest in Australia since Rio Tinto Group rebuffed a $19.5 billion investment from state- owned Aluminum Corp. of China in June.
“We view the acquisition positive to Yanzhou, as the company puts excess cash to use,” Credit Suisse Group analysts Trina Chen, Kevin You and Ada Dai said in a report today. “We estimate the proposed acquisition to boost earnings by 14 percent for 2010 earnings, and 37 percent by 2011 earnings.”
Chinese energy companies have spent at least $12.6 billion on overseas assets since December as they take advantage of lower valuations caused by the global recession. Macquarie Group Ltd. analysts led by Sophie Spartalis said the offer is “inferior” and shareholders should reject it.
A bid of between A$23 to A$25 a share for Felix would be “more reasonable,” Spartalis said.
Felix reported profit of A$166 million in the half-year ended Dec. 31 and is yet to report full-year profit. The Australian company posted record annual coal sales of 4.8 million metric tons in the year through June.
It’s building the Moolarben coal mine in New South Wales, a A$405 million project that’s a potential “company maker,” according to Credit Suisse Group in Australia. Production is scheduled to start next March, Felix said July 30.
Source: Bloomberg
Namibian Flurspar Mine To Close Indefinitely
Nearly 300 workers at the Okorusu Fluorspar Mine, some 48km north of Otjiwarongo in Namibia, face uncertainty after management decided to close down the mine for what seems to be an indefinite period.
Mine workers were notified of the closure only three days before they were told to leave the mine.
The mine management told Namibian Sun that the mine would remain shut until the end of September as it is battling to sell its fluorspar on the international market due to the current economic crunch.
Managing Director of the mine, Mark Dawe, said that demand for fluorspar from the mine has fallen from 120 000 tonnes to only 62 000 tonnes. “We can not work with such little production so we have to temporary close the mine because we are not making profit at the moment,” he said.
Lack of communication between the employees, the mine and Mine Workers Union of Namibia (MUN) has caused uncertainty amongst the miners, who are in the dark about their fate at the mine. A miner who spoke to Namibian Sun said that he does not have much detail on what the union and the mine have decided about their future, prompting him to think that the mine is closing down for good.
According to Joseph Hengari, the General Secretary of MUN, the employees were initially expected to take three weeks’ leave but the mine had allegedly extended the period to one month and three weeks over the weekend.
“It is stated here in the agreement that they sent me, so I don’t know were the new agreement came from,” said Hengari. He went on to say that the mine had expected the employees to take the leave from their annual leave of three weeks, which was an unreasonable move from the mine’s side.
In the new agreement reached by the union and the mine, however, the clause was changed from “personal leave” to “company leave” for all employees. But, John Ekundi who represents the workers at Okorusu Fluorspar Mine still maintains that the workers are expected to take three weeks’ paid leave and in addition to that, another 15 days from their annual leave. He said employees who had already taken some of their personal leave days would just have to sacrifice their benefits as the situation came at a bad time. Ekundi also said that the workers have not been informed of the new agreement but they are looking at ways to inform them through the media.
Dawe has given his reassurance that workers will receive their full salaries and will not lose out on any benefits while on leave. He said all workers will return to the mine after the temporary closure and there is no talk of retrenchment, even though they can’t predict the mine’s future as it all depends on when the global financial crisis comes to an end.
Source: Namibian Sun
Mine workers were notified of the closure only three days before they were told to leave the mine.
The mine management told Namibian Sun that the mine would remain shut until the end of September as it is battling to sell its fluorspar on the international market due to the current economic crunch.
Managing Director of the mine, Mark Dawe, said that demand for fluorspar from the mine has fallen from 120 000 tonnes to only 62 000 tonnes. “We can not work with such little production so we have to temporary close the mine because we are not making profit at the moment,” he said.
Lack of communication between the employees, the mine and Mine Workers Union of Namibia (MUN) has caused uncertainty amongst the miners, who are in the dark about their fate at the mine. A miner who spoke to Namibian Sun said that he does not have much detail on what the union and the mine have decided about their future, prompting him to think that the mine is closing down for good.
According to Joseph Hengari, the General Secretary of MUN, the employees were initially expected to take three weeks’ leave but the mine had allegedly extended the period to one month and three weeks over the weekend.
“It is stated here in the agreement that they sent me, so I don’t know were the new agreement came from,” said Hengari. He went on to say that the mine had expected the employees to take the leave from their annual leave of three weeks, which was an unreasonable move from the mine’s side.
In the new agreement reached by the union and the mine, however, the clause was changed from “personal leave” to “company leave” for all employees. But, John Ekundi who represents the workers at Okorusu Fluorspar Mine still maintains that the workers are expected to take three weeks’ paid leave and in addition to that, another 15 days from their annual leave. He said employees who had already taken some of their personal leave days would just have to sacrifice their benefits as the situation came at a bad time. Ekundi also said that the workers have not been informed of the new agreement but they are looking at ways to inform them through the media.
Dawe has given his reassurance that workers will receive their full salaries and will not lose out on any benefits while on leave. He said all workers will return to the mine after the temporary closure and there is no talk of retrenchment, even though they can’t predict the mine’s future as it all depends on when the global financial crisis comes to an end.
Source: Namibian Sun
Copper Heads For 10-Month High
Copper traded near a 10-month high in London and is poised for its longest string of weekly gains since April as the global economic recovery increases demand.
Copper was little changed after jumping as much as 4.2 percent yesterday on reports showing the economies of Germany and France unexpectedly expanded in the second quarter. A phase of rapid growth in metals and energy demand in major industrial nations may be imminent, Barclays Capital analysts including Gayle Berry said in a report e-mailed today.
“Economic recovery in Europe and the U.S. is the key driver of copper prices, though the metal has been climbing much faster than the economy could rebound,” said Edward Fang, an analyst at China International Futures (Shanghai) Co. “There’s no correction in sight before London copper may top $6,600.”
Three-month delivery copper dipped 0.3 percent to $6,360 a metric ton on the London Metal Exchange at 12:25 p.m. in Singapore. It earlier climbed as much as 1.6 percent to $6,480, the highest since Oct. 1.
Copper for November delivery on the Shanghai Futures Exchange climbed as much as 2.8 percent to 51,290 yuan ($7,506) a ton, the highest since Sept. 26. It last traded at 49,900 yuan.
Oil and metal prices jumped yesterday after reports showed the French and German economies expanded 0.3 percent from the first quarter. Economists surveyed by Bloomberg News had predicted declines.
A day earlier, the U.S. Federal Reserve said it would keep interest rates “exceptionally low” for an extended period, acknowledging signs that the worst recession since the 1930s may be ending.
China Demand
Copper futures in China, the world’s biggest consumer of the metal used in plumbing and power transmission, gained 82 percent the past six months. LME prices gained 91 percent the same time.
Shanghai prices “trended weaker than London” after record imports swelled domestic supplies, Fang said from Shanghai.
China’s imports of copper and copper products fell for the first time in six months in July, declining 15 percent from record levels reached in June. Industrial production last month rose 10.8 percent from a year earlier, the nation’s statistics bureau said Aug. 11.
The “key concern” for metal markets is whether increased demand from developed countries will come quickly and strongly enough to offset an anticipated slowdown in China’s commodity imports, Barclays said.
While there are risks around China’s second-half demand, they should not be “blown out of proportion in relation to the backdrop of strong underlying demand,” the bank said.
“There is plenty of evidence that China’s growth recovery has surprised on the upside,” the analysts wrote.
UBS AG last month said China’s copper imports may plunge 64 percent in the second half as stockpiles may have exceeded industrial demand by as much as 700,000 tons.
Among other LME-traded metals, nickel climbed 0.2 percent to $20,650 a ton and aluminum fell 0.4 percent at $2,051 a ton. Lead dropped 1.8 percent to $1,900 a ton, zinc slid 1.6 percent to $1,880 a ton and tin fell 1.6 percent to $14,910 a ton.
Source: Bloomberg
Copper was little changed after jumping as much as 4.2 percent yesterday on reports showing the economies of Germany and France unexpectedly expanded in the second quarter. A phase of rapid growth in metals and energy demand in major industrial nations may be imminent, Barclays Capital analysts including Gayle Berry said in a report e-mailed today.
“Economic recovery in Europe and the U.S. is the key driver of copper prices, though the metal has been climbing much faster than the economy could rebound,” said Edward Fang, an analyst at China International Futures (Shanghai) Co. “There’s no correction in sight before London copper may top $6,600.”
Three-month delivery copper dipped 0.3 percent to $6,360 a metric ton on the London Metal Exchange at 12:25 p.m. in Singapore. It earlier climbed as much as 1.6 percent to $6,480, the highest since Oct. 1.
Copper for November delivery on the Shanghai Futures Exchange climbed as much as 2.8 percent to 51,290 yuan ($7,506) a ton, the highest since Sept. 26. It last traded at 49,900 yuan.
Oil and metal prices jumped yesterday after reports showed the French and German economies expanded 0.3 percent from the first quarter. Economists surveyed by Bloomberg News had predicted declines.
A day earlier, the U.S. Federal Reserve said it would keep interest rates “exceptionally low” for an extended period, acknowledging signs that the worst recession since the 1930s may be ending.
China Demand
Copper futures in China, the world’s biggest consumer of the metal used in plumbing and power transmission, gained 82 percent the past six months. LME prices gained 91 percent the same time.
Shanghai prices “trended weaker than London” after record imports swelled domestic supplies, Fang said from Shanghai.
China’s imports of copper and copper products fell for the first time in six months in July, declining 15 percent from record levels reached in June. Industrial production last month rose 10.8 percent from a year earlier, the nation’s statistics bureau said Aug. 11.
The “key concern” for metal markets is whether increased demand from developed countries will come quickly and strongly enough to offset an anticipated slowdown in China’s commodity imports, Barclays said.
While there are risks around China’s second-half demand, they should not be “blown out of proportion in relation to the backdrop of strong underlying demand,” the bank said.
“There is plenty of evidence that China’s growth recovery has surprised on the upside,” the analysts wrote.
UBS AG last month said China’s copper imports may plunge 64 percent in the second half as stockpiles may have exceeded industrial demand by as much as 700,000 tons.
Among other LME-traded metals, nickel climbed 0.2 percent to $20,650 a ton and aluminum fell 0.4 percent at $2,051 a ton. Lead dropped 1.8 percent to $1,900 a ton, zinc slid 1.6 percent to $1,880 a ton and tin fell 1.6 percent to $14,910 a ton.
Source: Bloomberg
Exxaro Aims To Double Coal Production By 2017
As the single biggest supplier of coal to South African State-owned power utility Eskom and the domestic metallurgical market, diversified miner Exxaro aims to increase its coal production to about 100-million tons a year by 2017, an increase of 50-million tons from its current production level.
Exxaro executive GM for business growth Ernst Venter says that its coal business is, and will remain, the company’s mainstay for the future because it holds a lot of potential and it is one of its core competences.
He says that most of the company’s focus will be directed to increasing the production capabilities in the Waterberg region, in Limpopo province.
“The future of coal export in South Africa 15 years from now lies in the Waterberg region and not in Mpumalanga,” says Venter.
He says the company aims to increase its exports to 12-million tons a year of coal by 2014, from its current total of about five- million tons a year.
“We have long-term plans of 26-million tons a year of coal export potential, but for that to be possible, we need to look at infrastructural constraints in terms of rail,” says Venter.
He says that the company is working with rail operator Transnet Freight Rail (TFR) to upgrade the rail line between the Grootegeluk mine, in Limpopo province, to the Waterberg and the Richards Bay Coal Terminal, in KwaZulu-Natal province.
“This will allow us to increase the capacity. Currently, it is around five-million tons a year of coal and, if you put rolling stock on the line, you can increase capacity to 7,5-million tons a year of coal without spending any capital, but as soon as you go beyond that, you have to start thinking about electrification and spending extra capital. We are talking with TFR about this,” says Venter.
Projects in Progress
“If we look at South Africa going forward, the country still needs to increase its energy capacity to 90 000 MW between the years 2020 and 2025. There is market space, and the Medupi expansion and Grootegeluk West project are positioned to help us capture a portion of that,” says Venter.
The first phase of the Grootegeluk mine expansion project, intended to supply coal to Eskom’s Medupi power station, will produce about 14-million tons a year of coal. The second phase of the project, Grootegeluk West, entails a greenfield expansion of the original mine and will produce an additional 16-million tons a year of coal. It will serve the energy coal market as well as the metallurgical coal market.
Meanwhile, Venter says that the company is looking into expanding the capacity of its Inyanda coal plant, in Mpumalanga province.
“There is a lot of potential at the Inyanda plant as it is close to the market and is ideally suited for both metallurgical export and the sized-coal domestic market. The only constraint is that of reserves. We are trying to see if we can double the reserve base to allow a 15-year life-of-mine. Mine production capacity can increase from 1,5-million tons a year of coal to 1,8-million tons a year,” says Venter.
Also in Mpumalanga province is the Belfast project, which is a greenfield extension of the existing mine within the company’s North Block Complex (NBC).
“We are mining 3,5-million tons a year of coal from a base of one-million tons a year of coal in 2007. This is another potential growth area for Exxaro,” says Venter.
The company is building a beneficiation plant in that region to facilitate the Belfast project, as well as the rest of the NBC coal production cluster.
The Belfast project will be developed in two phases. Phase one will involve the supply of coal to Eskom and phase two will involve the supply of coal to the export market.
“When we activate phase two, part of the project will entail sorting out the logistical issues with TFR and the Richards Bay Coal Terminal allocation,” says Venter.
Outside South Africa, the company has entered into a joint venture with mining giant Anglo Coal over its Moranbah South prime hot coking coal mine, in Queensland, Australia.
The mine will be developed in two phases, with phase one produ- cing between 1,5-million tons to two-million tons of prime hard coking coal and phase two producing between 4,5-million tons and five-million tons of prime hard coking coal. This will be destined for the Asian market.
Venter says that the project is a high-priority focus for Exxaro.
Meanwhile, he says the company’s most valuable market, in which it wants to aggressively maintain and grow its market share, is the metallurgical reductant market.
“The high-value metallurgical reductant market feeds the pyrometallurgical industries in South Africa; this is one of the big focus areas for us in the future and it will be the first thrust of our plans going forward,” says Venter.
“We recently commissioned our sintel char plant at Grootegeluk and believe there is great potential to expand this downstream business for the reductant market”
He adds that the second thrust is to increase the company’s energy coal supply to Eskom and independent power producers (IPPs).
“We believe there is room for the growth of IPPs in South Africa in the future, and we will be facilitating that because we believe that the country needs it and cannot do without it,” says Venter.
Source: Mining Weekly
Exxaro executive GM for business growth Ernst Venter says that its coal business is, and will remain, the company’s mainstay for the future because it holds a lot of potential and it is one of its core competences.
He says that most of the company’s focus will be directed to increasing the production capabilities in the Waterberg region, in Limpopo province.
“The future of coal export in South Africa 15 years from now lies in the Waterberg region and not in Mpumalanga,” says Venter.
He says the company aims to increase its exports to 12-million tons a year of coal by 2014, from its current total of about five- million tons a year.
“We have long-term plans of 26-million tons a year of coal export potential, but for that to be possible, we need to look at infrastructural constraints in terms of rail,” says Venter.
He says that the company is working with rail operator Transnet Freight Rail (TFR) to upgrade the rail line between the Grootegeluk mine, in Limpopo province, to the Waterberg and the Richards Bay Coal Terminal, in KwaZulu-Natal province.
“This will allow us to increase the capacity. Currently, it is around five-million tons a year of coal and, if you put rolling stock on the line, you can increase capacity to 7,5-million tons a year of coal without spending any capital, but as soon as you go beyond that, you have to start thinking about electrification and spending extra capital. We are talking with TFR about this,” says Venter.
Projects in Progress
“If we look at South Africa going forward, the country still needs to increase its energy capacity to 90 000 MW between the years 2020 and 2025. There is market space, and the Medupi expansion and Grootegeluk West project are positioned to help us capture a portion of that,” says Venter.
The first phase of the Grootegeluk mine expansion project, intended to supply coal to Eskom’s Medupi power station, will produce about 14-million tons a year of coal. The second phase of the project, Grootegeluk West, entails a greenfield expansion of the original mine and will produce an additional 16-million tons a year of coal. It will serve the energy coal market as well as the metallurgical coal market.
Meanwhile, Venter says that the company is looking into expanding the capacity of its Inyanda coal plant, in Mpumalanga province.
“There is a lot of potential at the Inyanda plant as it is close to the market and is ideally suited for both metallurgical export and the sized-coal domestic market. The only constraint is that of reserves. We are trying to see if we can double the reserve base to allow a 15-year life-of-mine. Mine production capacity can increase from 1,5-million tons a year of coal to 1,8-million tons a year,” says Venter.
Also in Mpumalanga province is the Belfast project, which is a greenfield extension of the existing mine within the company’s North Block Complex (NBC).
“We are mining 3,5-million tons a year of coal from a base of one-million tons a year of coal in 2007. This is another potential growth area for Exxaro,” says Venter.
The company is building a beneficiation plant in that region to facilitate the Belfast project, as well as the rest of the NBC coal production cluster.
The Belfast project will be developed in two phases. Phase one will involve the supply of coal to Eskom and phase two will involve the supply of coal to the export market.
“When we activate phase two, part of the project will entail sorting out the logistical issues with TFR and the Richards Bay Coal Terminal allocation,” says Venter.
Outside South Africa, the company has entered into a joint venture with mining giant Anglo Coal over its Moranbah South prime hot coking coal mine, in Queensland, Australia.
The mine will be developed in two phases, with phase one produ- cing between 1,5-million tons to two-million tons of prime hard coking coal and phase two producing between 4,5-million tons and five-million tons of prime hard coking coal. This will be destined for the Asian market.
Venter says that the project is a high-priority focus for Exxaro.
Meanwhile, he says the company’s most valuable market, in which it wants to aggressively maintain and grow its market share, is the metallurgical reductant market.
“The high-value metallurgical reductant market feeds the pyrometallurgical industries in South Africa; this is one of the big focus areas for us in the future and it will be the first thrust of our plans going forward,” says Venter.
“We recently commissioned our sintel char plant at Grootegeluk and believe there is great potential to expand this downstream business for the reductant market”
He adds that the second thrust is to increase the company’s energy coal supply to Eskom and independent power producers (IPPs).
“We believe there is room for the growth of IPPs in South Africa in the future, and we will be facilitating that because we believe that the country needs it and cannot do without it,” says Venter.
Source: Mining Weekly
Merafe Decries SA Chrome Ore Exports
The exporting of raw chrome ore to China is still a “problem that is a thorn in the side” of the South African ferrochrome industry; however, moves to block such exports are being made at the highest level, reports ferrochrome major Merafe Resources.
In March, Mining Weekly reported that the “unbridled” and “suicidal” export of raw chrome from South Africa was worsening. At the time, Merafe CEO Steve Phiri reported that the company had noted that more and more people were getting into the chrome ore industry and showing no signs of becoming integrated producers that beneficiate raw chrome into ferrochrome.
Phiri also reported that no progress had been made with government to block such exports. However, four months on, Phiri paints a different picture.
At the company’s recent half yearly results presentation for the period ended July 2009, Phiri said that the company was in continuous consultation with the Department of Mineral Resources (DMR), and progress had been made to amend the Mineral and Petroleum Resources Development Act to block such exports, as they were detrimental to the country’s ferrochrome industry as a whole.
He added that the company was confident that a solution to the problem would be found; however, the DMR had to engage with the other members of the business cluster to ascertain whether a move to block such exports would be viable.
Phiri had not ignored, though, the potential that the Asian market could offer the company, in its recovery from the worst results recorded in its history.
Although there had been a significant decrease in worldwide demand for stainless steel, demand from the Asian market was still significant enough to help the company recover from its current position.
Statistics show that 2009 ferrochrome demand from China is 1,92-million tons. This is significantly higher than the demand from the entire European Union, which is 1,69-million tons. Demand from South Korea, Taiwan and India, collectively is 1,06-million tons.
China’s 2009 demand for ferrochrome was slightly lower than its 2008 demand for ferrochrome, which was 1,98-million tons. Chinese ferrochrome imports increased by 44% in the first half of 2009, when compared with imports for the corresponding period in 2008.
Phiri reported that the company had managed to save the jobs of its 6 000 permanent employees.
This was largely attributable to the company having limited cash burn.
Phiri added that it would be senseless for the company to retrench any of its staff as it was a high-tech company that needed a high level of skills on hand when the furnaces were brought back on line.
Phiri reported that the company had ended its relationship with a number of contract workers; it had also made no new appointments and had not promoted any workers.
With a recovery from the global economic crisis in sight, Phiri reported that the company had brought back on line 11 of the furnaces that it had shut down during the worst part of the crisis. He added that it would be keeping an eye on the market to ascertain the best time to restart the remaining nine furnaces.
Source: Mining Weekly
In March, Mining Weekly reported that the “unbridled” and “suicidal” export of raw chrome from South Africa was worsening. At the time, Merafe CEO Steve Phiri reported that the company had noted that more and more people were getting into the chrome ore industry and showing no signs of becoming integrated producers that beneficiate raw chrome into ferrochrome.
Phiri also reported that no progress had been made with government to block such exports. However, four months on, Phiri paints a different picture.
At the company’s recent half yearly results presentation for the period ended July 2009, Phiri said that the company was in continuous consultation with the Department of Mineral Resources (DMR), and progress had been made to amend the Mineral and Petroleum Resources Development Act to block such exports, as they were detrimental to the country’s ferrochrome industry as a whole.
He added that the company was confident that a solution to the problem would be found; however, the DMR had to engage with the other members of the business cluster to ascertain whether a move to block such exports would be viable.
Phiri had not ignored, though, the potential that the Asian market could offer the company, in its recovery from the worst results recorded in its history.
Although there had been a significant decrease in worldwide demand for stainless steel, demand from the Asian market was still significant enough to help the company recover from its current position.
Statistics show that 2009 ferrochrome demand from China is 1,92-million tons. This is significantly higher than the demand from the entire European Union, which is 1,69-million tons. Demand from South Korea, Taiwan and India, collectively is 1,06-million tons.
China’s 2009 demand for ferrochrome was slightly lower than its 2008 demand for ferrochrome, which was 1,98-million tons. Chinese ferrochrome imports increased by 44% in the first half of 2009, when compared with imports for the corresponding period in 2008.
Phiri reported that the company had managed to save the jobs of its 6 000 permanent employees.
This was largely attributable to the company having limited cash burn.
Phiri added that it would be senseless for the company to retrench any of its staff as it was a high-tech company that needed a high level of skills on hand when the furnaces were brought back on line.
Phiri reported that the company had ended its relationship with a number of contract workers; it had also made no new appointments and had not promoted any workers.
With a recovery from the global economic crisis in sight, Phiri reported that the company had brought back on line 11 of the furnaces that it had shut down during the worst part of the crisis. He added that it would be keeping an eye on the market to ascertain the best time to restart the remaining nine furnaces.
Source: Mining Weekly
Thursday, August 13, 2009
China Industry Minister Calls For Halt To Additional Steel Capacity
China's Ministry of Industry and Information Technology, Li Yizhong, also says there should be no new or additional steel mills within three years. Li says the Chinese steel industry is facing a serious over-capacity problem, as demand has plummeted due to the global financial crisis.
The Minister says the steel mills have an estimated total output capacity at 660 million tonnes already, and many steel projects are still under construction. Demand, however, is only estimated to be around 470-million tonnes.
The Minister says if the trend continues, the Chinese steel industry will reach a dead end. As a result, he says the Industry and Information Ministry will not approve any expansion-related projects in the steel industry, moreover it will eliminate outdated projects.
Source: China Daily
The Minister says the steel mills have an estimated total output capacity at 660 million tonnes already, and many steel projects are still under construction. Demand, however, is only estimated to be around 470-million tonnes.
The Minister says if the trend continues, the Chinese steel industry will reach a dead end. As a result, he says the Industry and Information Ministry will not approve any expansion-related projects in the steel industry, moreover it will eliminate outdated projects.
Source: China Daily
Xstrata To Invest R13bn In South Africa
Xstrata Plc, the world’s largest exporter of coal used to generate power, may spend about 13 billion rand ($1.6 billion) over five to six years to expand production of the fossil fuel in South Africa.
The company is studying investing in the Zonnebloem coal project, currently at the conceptual stage, Jeff Gerard, chief operating officer at Xstrata Coal South Africa, said today in an interview at the Goedgevonden mine, east of Johannesburg.
Zonnebloem may cost about 5 billion rand to 6 billion rand to develop and be similar in size to Goedgevonden, which will produce 12 million metric tons when completed, he said.
Source: Bloomberg
The company is studying investing in the Zonnebloem coal project, currently at the conceptual stage, Jeff Gerard, chief operating officer at Xstrata Coal South Africa, said today in an interview at the Goedgevonden mine, east of Johannesburg.
Zonnebloem may cost about 5 billion rand to 6 billion rand to develop and be similar in size to Goedgevonden, which will produce 12 million metric tons when completed, he said.
Source: Bloomberg
Brazil May Ship More Iron Ore
Brazil may ship more iron ore at the expense of Australia, supporting rates for capesize ships because they will make longer journeys, Lorentzen & Stemoco AS said.
China’s detention of Australian national Stern Hu and three Rio Tinto Group colleagues last month “strained relations between China and Australia,” Nicolai Hansteen, an Oslo-based analyst with shipping consultant Lorentzen & Stemoco, wrote in a note dated today. “This could eventually benefit Brazilian iron-ore exports, hence more ton-miles for capesize vessels.”
Australia was the source of 43 percent of China’s iron-ore imports in June and Brazil, home to Vale SA, the biggest producer and exporter, 22 percent, according to China’s customs data. China is the biggest consumer of the material used to make steel. Rio is the second-largest iron ore exporter.
A ton mile takes into account the distance that ships travel to deliver their cargoes. Rates to hire the vessels that typically haul iron ore have dropped 46 percent this quarter to $43,706 a day. They are called capesizes because they are too large to sail through the Panama Canal and must travel around South Africa’s Cape of Good Hope or Chile’s Cape Horn.
Iron ore shipments between Brazil and China create the biggest source of demand for dry-bulk shipping based on the amount of cargo being shipped multiplied by voyage length, according to London-based SSY Research & Consultancy Ltd.
Source: Bloomberg
China’s detention of Australian national Stern Hu and three Rio Tinto Group colleagues last month “strained relations between China and Australia,” Nicolai Hansteen, an Oslo-based analyst with shipping consultant Lorentzen & Stemoco, wrote in a note dated today. “This could eventually benefit Brazilian iron-ore exports, hence more ton-miles for capesize vessels.”
Australia was the source of 43 percent of China’s iron-ore imports in June and Brazil, home to Vale SA, the biggest producer and exporter, 22 percent, according to China’s customs data. China is the biggest consumer of the material used to make steel. Rio is the second-largest iron ore exporter.
A ton mile takes into account the distance that ships travel to deliver their cargoes. Rates to hire the vessels that typically haul iron ore have dropped 46 percent this quarter to $43,706 a day. They are called capesizes because they are too large to sail through the Panama Canal and must travel around South Africa’s Cape of Good Hope or Chile’s Cape Horn.
Iron ore shipments between Brazil and China create the biggest source of demand for dry-bulk shipping based on the amount of cargo being shipped multiplied by voyage length, according to London-based SSY Research & Consultancy Ltd.
Source: Bloomberg
South African Mining Output Falls In June
South Africa’s total mining production fell 7,3% year-on-year in June, with gold production down 12,2% year-on-year and non-gold production dropping 6,4% year-on-year, official data shows.
Statistics South Africa (Stats SA) reported on Thursday that the total mining production for the second quarter of the year increased by 4,5%, compared with the first quarter of the year.
Platinum-group metals (PGMs) production was the main contributor to the increase, it added, highlighting that nongold production was 5,8% higher quarter-on-quarter, while gold production was down 4,2% quarter-on-quarter.
However, production in the second quarter of this year fell by 10,7%, compared with production figures for the second quarter of 2008.
Meanwhile, Stats SA reported that the total seasonally adjusted value of mineral sales of R17,9-billion for the three months ended May, declined by 0,8%, compared with the previous three months, owing to a 2,5%, or R1,2-billion, decline in the sale of nongold minerals.
The actual estimated total value of mineral sales for the three months was down 24,1%, compared with the three months ended May 2008.
PGMs sales contributed to 15% of the decline, manganese ore sales to 4,4%, coal to 3,8% and other nonmetallic minerals to 1,7% of the decline.
Iron-ore had made a 3% positive contribution to the change in sales, while gold had made a 1,4% positive contribution.
Source: Mining Weekly
Statistics South Africa (Stats SA) reported on Thursday that the total mining production for the second quarter of the year increased by 4,5%, compared with the first quarter of the year.
Platinum-group metals (PGMs) production was the main contributor to the increase, it added, highlighting that nongold production was 5,8% higher quarter-on-quarter, while gold production was down 4,2% quarter-on-quarter.
However, production in the second quarter of this year fell by 10,7%, compared with production figures for the second quarter of 2008.
Meanwhile, Stats SA reported that the total seasonally adjusted value of mineral sales of R17,9-billion for the three months ended May, declined by 0,8%, compared with the previous three months, owing to a 2,5%, or R1,2-billion, decline in the sale of nongold minerals.
The actual estimated total value of mineral sales for the three months was down 24,1%, compared with the three months ended May 2008.
PGMs sales contributed to 15% of the decline, manganese ore sales to 4,4%, coal to 3,8% and other nonmetallic minerals to 1,7% of the decline.
Iron-ore had made a 3% positive contribution to the change in sales, while gold had made a 1,4% positive contribution.
Source: Mining Weekly
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