BHP Billiton Ltd., the world’s largest mining company, said it will begin talks next month with Asian steelmakers for 2010 contract iron ore prices, even before they settle this year’s prices with Chinese mills.
“We are still negotiating, still discussing and we will update the market when we have something” on talks with some Chinese mills for the year that began April 1, Tom Schutte, president of marketing at Melbourne-based BHP, told reporters today at a briefing in Sydney. BHP will begin negotiations for next year’s price in October, he said.
Contract prices for iron ore, BHP’s biggest earner, may rise 20 percent next year, UBS said on Sept. 2, reversing a previous estimate for a 33 percent decline. BHP wants to sell iron ore on shorter-term pricing contracts rather than the current annual system and has agreed to sell 30 percent of its iron ore under new pricing mechanisms.
“BHP no doubt would like to see the market be more dynamic and, importantly, more transparent when it comes to pricing, thus avoiding the likelihood of pricing impasses that we are currently in the midst of,” said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne.
BHP rose 2 percent to A$39 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The cash price for Australian ore delivered to China, the world’s biggest buyer has risen 15 percent this year.
Rio Tinto Group, the world’s second-largest exporter of iron ore, said on Sept. 4 it was shipping the steelmaking ingredient to China based on the 33 percent discount agreed with Japanese, South Korean and Taiwanese mills. Chinese producers want a 35 percent reduction.
The transfer to the new pricing system will take some time, Schutte said today.
BHP has renegotiated some of coking coal contracts on shorter-term pricing agreements, he said. Floating price mechanisms, rather than long-term pricing contracts, more accurately reflect the supply and demand of commodities, he said.
China imported 3.7 million tons of coking coal from Australian in July and it may import a total of 30 million tons globally this year, Schutte said. That would account for 67 percent of its consumption, he said.
BHP has undertaken five expansions of its Western Australia iron ore operations since 2001 taking capacity to 129 million tons from 69 million tons, on a 100 percent basis. It is now working to expand to 205 million tons and is studying a further expansion to 300 million tons by 2015.
BHP and Rio are seeking approval for the proposed combination of their iron ore operations in Western Australia’s Pilbara region.
Source: Bloomberg
Thursday, September 17, 2009
China Eyes Philippine Mining Projects
With China’s economy again showing signs of robust growth, Beijing is now encouraging Chinese firms to aggressively pursue mining projects in the Philippines to support its projected hike in demand for minerals and metals, Zhengping Wu, economic and commercial counselor of the Chinese Embassy in Manila, said.
Taking the cue from their government, Chinese companies have started to show renewed interest for mining projects in the Philippines, with Jinchuan Group Ltd. reportedly resuming talks with Philnico Industrial Corp. for the reopening of the Nonoc nickel mines. Related story in “Regions,”
“I heard they are now starting to resume [talks]. I hope that discussions at the corporate level will be successful. The demand for nickel in China is there. But this is a business decision rather than political,” Wu said at the Mining Philippines 2009 Conference and Exhibition at the Sofitel Hotel in Pasay City on Wednesday.
Wu said the Nonoc mine is one of the important projects discussed by the Philippines and China at the ministerial level.
Jinchuan and Philnico were close to signing a multibillion-dollar deal years back but the talks were stalled after the Chinese firm reportedly dilly-dallied.
Besides Nonoc, Jinchuan is also interested in acquiring the North Davao Mining Corp. site in Compostela Valley.
Jinchuan is one of the seven companies that prequalified for the bidding of the project along with another Chinese firm China Nonferrous Corp., Asia Alliance, Wellex Petroleum Corp., Century Peak, Mount Sinai and Carascal Nickel Mining Corp., the Philippine Mining Development Corp. disclosed.
Wu said the Zijin Mining Group would also surely get the clearance from Beijing to pursue its deal with Lepanto Consolidated Mining Co. for the acquisition of a 20-percent stake in a copper-gold project in Benguet.
Wu said China’s demand for metals and minerals is expected to increase anew to support the country’s infrastructure and industrial requirements.
He said Beijing area alone is constructing 12 railways and 12,000 kilometers of expressway in the next few years.
Being a close neighbour, Wu said the Philippines has been a steady supplier of minerals to China. For instance, 55 percent of China’s nickel-ore importation came from the Philippines.
With this, Wu said Chinese investors need to forge long-term and strategic partnerships with mining companies in the Philippines.
The two governments, meanwhile, should help in facilitating win-win arrangements for their private sectors, he said.
Wu added that Beijing wants Chinese companies to establish operations in the Philippines from the upstream to the downstream manufacturing sectors to also help in generating employment and revenues here.
Source: Business Mirror
Taking the cue from their government, Chinese companies have started to show renewed interest for mining projects in the Philippines, with Jinchuan Group Ltd. reportedly resuming talks with Philnico Industrial Corp. for the reopening of the Nonoc nickel mines. Related story in “Regions,”
“I heard they are now starting to resume [talks]. I hope that discussions at the corporate level will be successful. The demand for nickel in China is there. But this is a business decision rather than political,” Wu said at the Mining Philippines 2009 Conference and Exhibition at the Sofitel Hotel in Pasay City on Wednesday.
Wu said the Nonoc mine is one of the important projects discussed by the Philippines and China at the ministerial level.
Jinchuan and Philnico were close to signing a multibillion-dollar deal years back but the talks were stalled after the Chinese firm reportedly dilly-dallied.
Besides Nonoc, Jinchuan is also interested in acquiring the North Davao Mining Corp. site in Compostela Valley.
Jinchuan is one of the seven companies that prequalified for the bidding of the project along with another Chinese firm China Nonferrous Corp., Asia Alliance, Wellex Petroleum Corp., Century Peak, Mount Sinai and Carascal Nickel Mining Corp., the Philippine Mining Development Corp. disclosed.
Wu said the Zijin Mining Group would also surely get the clearance from Beijing to pursue its deal with Lepanto Consolidated Mining Co. for the acquisition of a 20-percent stake in a copper-gold project in Benguet.
Wu said China’s demand for metals and minerals is expected to increase anew to support the country’s infrastructure and industrial requirements.
He said Beijing area alone is constructing 12 railways and 12,000 kilometers of expressway in the next few years.
Being a close neighbour, Wu said the Philippines has been a steady supplier of minerals to China. For instance, 55 percent of China’s nickel-ore importation came from the Philippines.
With this, Wu said Chinese investors need to forge long-term and strategic partnerships with mining companies in the Philippines.
The two governments, meanwhile, should help in facilitating win-win arrangements for their private sectors, he said.
Wu added that Beijing wants Chinese companies to establish operations in the Philippines from the upstream to the downstream manufacturing sectors to also help in generating employment and revenues here.
Source: Business Mirror
Wednesday, September 16, 2009
Bidding Resumes For NTPC Coal
Indian state-owned trading firm MMTC on Wednesday resumed the bidding process to import 12.5 million tonnes of non-coking coal for power major NTPC,
after a previous bidding process had to be cancelled due to alleged flouting of norms by some bidders.
Five companies are learnt to have expressed an interest in participating in the current bidding process for importing coal. The firms include Bhatia International, Adani Enterprises, Agrawal Coal, Dubai-based Coal & Oil and Knowledge Infrastructure.
MMTC has asked for bids to supply 6,300 Kcal/kg non-coking coal to NTPC that will cost the power major about Rs 7,500 crore. MMTC is expected to announce the successful bidder within two weeks. MMTC had cancelled the earlier bidding process after Knowledge Infrastructure alleged foul play after its bid was rejected.
NTPC is exploring all options to source coal as stocks at eight of its plants are below normal levels. NTPC’s annual coal requirement totals 150 MT, of which 130 MT is sourced from Coal India.
Source: Economic Times
after a previous bidding process had to be cancelled due to alleged flouting of norms by some bidders.
Five companies are learnt to have expressed an interest in participating in the current bidding process for importing coal. The firms include Bhatia International, Adani Enterprises, Agrawal Coal, Dubai-based Coal & Oil and Knowledge Infrastructure.
MMTC has asked for bids to supply 6,300 Kcal/kg non-coking coal to NTPC that will cost the power major about Rs 7,500 crore. MMTC is expected to announce the successful bidder within two weeks. MMTC had cancelled the earlier bidding process after Knowledge Infrastructure alleged foul play after its bid was rejected.
NTPC is exploring all options to source coal as stocks at eight of its plants are below normal levels. NTPC’s annual coal requirement totals 150 MT, of which 130 MT is sourced from Coal India.
Source: Economic Times
ArcelorMittal To Resume Operations At Liberia Iron Ore Mine In 2010
ArcelorMittal, the world’s biggest steelmaker, will resume full operations at its Liberian iron- ore mine next year, Arthur Massaquoi, public relations officer of the company’s Liberia unit, said.
Acelormittal in March scaled down operations at its Nimba mine in Liberia by half, firing 80 percent of its expatriate workers because of the global financial crisis.
The first iron-ore exports from the plant will now leave in 2011 and not next year, Massaquoi told reporters in the capital, Monrovia, today. In December last year, Liberian President Ellen Johnson-Sirleaf said the company would not be able to meet its deadline of shipping its first ore from the mine in 2009.
AccelorMittal signed a $1.6-billion iron-ore exploration agreement with Liberia in 2007. The company is redeveloping the mine after it was abandoned in 1992 during a civil war that engulfed the West African nation. It says it expects 12.5 million tons of ore a year, or 21 percent of the company’s production, from Nimba.
Source: Bloomberg
Acelormittal in March scaled down operations at its Nimba mine in Liberia by half, firing 80 percent of its expatriate workers because of the global financial crisis.
The first iron-ore exports from the plant will now leave in 2011 and not next year, Massaquoi told reporters in the capital, Monrovia, today. In December last year, Liberian President Ellen Johnson-Sirleaf said the company would not be able to meet its deadline of shipping its first ore from the mine in 2009.
AccelorMittal signed a $1.6-billion iron-ore exploration agreement with Liberia in 2007. The company is redeveloping the mine after it was abandoned in 1992 during a civil war that engulfed the West African nation. It says it expects 12.5 million tons of ore a year, or 21 percent of the company’s production, from Nimba.
Source: Bloomberg
ENRC, CAMEC In Merger Talks
Eurasian Natural Resources Corp. PLC Wednesday said it is in "advanced discussions" to pay 20 pence a share for Central African Mining and Exploration Corp. PLC.
However, ENRC cautioned that a deal hadn't yet been finalized: "Whilst ENRC is engaged in such discussions and is assessing the merits of a potential transaction, there can be no certainty that any such transaction will proceed," the company said in a statement.
London-listed ENRC produces ferrochrome, iron ore and aluminium at operations in Kazakhstan, while CAMEC's main operations are copper and cobalt production in Congo.
Source: Trading Markets
However, ENRC cautioned that a deal hadn't yet been finalized: "Whilst ENRC is engaged in such discussions and is assessing the merits of a potential transaction, there can be no certainty that any such transaction will proceed," the company said in a statement.
London-listed ENRC produces ferrochrome, iron ore and aluminium at operations in Kazakhstan, while CAMEC's main operations are copper and cobalt production in Congo.
Source: Trading Markets
Orissa Suspends Director Of State Mines
Orissa government on Wednesday put under suspension director of state mines department R.N. Sahoo in connection with multi-crore mining
scam in the state. The move follows interrogation of the mines official by the vigilance sleuths recently.
The vigilance department which is probing into the mining scam that threatened to tarnish the image of chief minister Naveen Patnaik.
Earlier, five senior officials of mines department were suspended in the same case.
The opposition Congress had alleged that the scam pertaining to illegal mining and sale of minerals like iron ore, manganese and chrome ore from different mines in Orissa could run to thousands of cores rupees and had demanded CBI probe.
A two-member bench of the Orissa high court recently had issued notices to the governments at the centre and state besides CBI while admitting a public interest litigation [PIL] case seeking probe by the premier investigating agency into alleged multi-crore mining scam.
The vigilance department has already detected illegal mining and transportation of iron ore and manganese worth Rs 110 crore from a mine at Joda in Keonjhar district.
A mine trader, one retired mines department officer, five senior officials of the mines department and one forest officer were earlier arrested in this connection and later released on bail.
SourcE: Economic Times
scam in the state. The move follows interrogation of the mines official by the vigilance sleuths recently.
The vigilance department which is probing into the mining scam that threatened to tarnish the image of chief minister Naveen Patnaik.
Earlier, five senior officials of mines department were suspended in the same case.
The opposition Congress had alleged that the scam pertaining to illegal mining and sale of minerals like iron ore, manganese and chrome ore from different mines in Orissa could run to thousands of cores rupees and had demanded CBI probe.
A two-member bench of the Orissa high court recently had issued notices to the governments at the centre and state besides CBI while admitting a public interest litigation [PIL] case seeking probe by the premier investigating agency into alleged multi-crore mining scam.
The vigilance department has already detected illegal mining and transportation of iron ore and manganese worth Rs 110 crore from a mine at Joda in Keonjhar district.
A mine trader, one retired mines department officer, five senior officials of the mines department and one forest officer were earlier arrested in this connection and later released on bail.
SourcE: Economic Times
Trevali Commences Expansion At Peru Silver-Lead-Zinc Project
Trevali Resources Corp. in conjunction with partner Glencore International A.G. has successfully completed a positive internal mine development study examining initiating mining operations on the newly discovered Magistral deposits at the Santander polymetallic project in west-central Peru.
Trevali and Glencore have entered into a definitive development agreement for the Santander project that will see Glencore provide and operate a 2,000-tonne-per-day concentrate plant, undertake mining operations on a 'contractor/toll basis' and enter into a long-term concentrate offtake agreement for 100% of Santander project production at benchmark terms.
Trevalis Santander silver-lead-zinc mine project is located approximately 215 km by road from Lima, in the western extent of Peru's prolific Cerro de Pasco mineral district. The mine operated from 1958-1993 targeting a single Carbonate Replacement Deposit--type pipe and manto structure, the Santander Orebody.
Substantial site infrastructure at the formerly producing operation includes a fully refurbished 200-man camp and associated support facilities, an ore processing / concentrator plant (including various crushers, mills, flotation cells and filters able to produce zinc, lead-silver and copper concentrates) undergoing refurbishment, and the Tingo hydroelectric power-station located 17 km down-valley to the west. The Santander project and the considerable existing infrastructure form a highly strategic asset in this mining district. The Company commenced exploration at Santander in November 2007 discovering four new high-grade silver-lead-zinc replacement and massive sulphide bodies to date.
A recently completed independent NI 43-101 resource estimate of the three Magistral deposits by Golder Associates Engineers (see NR-09-06) reviews a total Indicated Mineral Resource of 5,298,000 tonnes with an average grade of 3.34% zinc, 1.27% lead and 38 g/t silver (using a 2% ZnEQ* cut-off grade) -- for a contained metal inventory of 390 million lbs. zinc, 149 million lbs. lead and 6.5 million oz. silver in the Indicated category. An additional Inferred Mineral Resource of 2,244,000 tonnes grading 2.92% zinc, 0.50% lead and 18 g/t silver was also reviewed in the three deposits using the same cut-off grade -- for contained metals of 144 million lbs. zinc, 25 million lbs. lead and 1.3 million oz. silver. All three Magistral bodies remain open at depth and to the East.
Additionally, a further 100 million contained lbs. of zinc are estimated to be present in the 1,656,000 indicated tonnes grading at 2.74% zinc (using a 2.0% zinc cut-off grade) within the Santander Tailings Impoundment.
Additionally, through its wholly owned subsidiary Trevali Renewable Energy Inc., the Company is undertaking a significant upgrade of the Tingo run-of-river hydroelectric generating facility along with transmission line upgrades and extensions to allow the potential sale of surplus power into the Peruvian National Energy Grid.
Source: Financial Post
Trevali and Glencore have entered into a definitive development agreement for the Santander project that will see Glencore provide and operate a 2,000-tonne-per-day concentrate plant, undertake mining operations on a 'contractor/toll basis' and enter into a long-term concentrate offtake agreement for 100% of Santander project production at benchmark terms.
Trevalis Santander silver-lead-zinc mine project is located approximately 215 km by road from Lima, in the western extent of Peru's prolific Cerro de Pasco mineral district. The mine operated from 1958-1993 targeting a single Carbonate Replacement Deposit--type pipe and manto structure, the Santander Orebody.
Substantial site infrastructure at the formerly producing operation includes a fully refurbished 200-man camp and associated support facilities, an ore processing / concentrator plant (including various crushers, mills, flotation cells and filters able to produce zinc, lead-silver and copper concentrates) undergoing refurbishment, and the Tingo hydroelectric power-station located 17 km down-valley to the west. The Santander project and the considerable existing infrastructure form a highly strategic asset in this mining district. The Company commenced exploration at Santander in November 2007 discovering four new high-grade silver-lead-zinc replacement and massive sulphide bodies to date.
A recently completed independent NI 43-101 resource estimate of the three Magistral deposits by Golder Associates Engineers (see NR-09-06) reviews a total Indicated Mineral Resource of 5,298,000 tonnes with an average grade of 3.34% zinc, 1.27% lead and 38 g/t silver (using a 2% ZnEQ* cut-off grade) -- for a contained metal inventory of 390 million lbs. zinc, 149 million lbs. lead and 6.5 million oz. silver in the Indicated category. An additional Inferred Mineral Resource of 2,244,000 tonnes grading 2.92% zinc, 0.50% lead and 18 g/t silver was also reviewed in the three deposits using the same cut-off grade -- for contained metals of 144 million lbs. zinc, 25 million lbs. lead and 1.3 million oz. silver. All three Magistral bodies remain open at depth and to the East.
Additionally, a further 100 million contained lbs. of zinc are estimated to be present in the 1,656,000 indicated tonnes grading at 2.74% zinc (using a 2.0% zinc cut-off grade) within the Santander Tailings Impoundment.
Additionally, through its wholly owned subsidiary Trevali Renewable Energy Inc., the Company is undertaking a significant upgrade of the Tingo run-of-river hydroelectric generating facility along with transmission line upgrades and extensions to allow the potential sale of surplus power into the Peruvian National Energy Grid.
Source: Financial Post
Arizona Copper Industry Grows Despite Recession
Even as the recession took hold and copper prices slumped at the end of last year, the Arizona copper industry set records for economic impact and job creation in 2008 according to a recent study prepared for the Arizona Mining Association.
The state's copper producers had a direct economic impact of about $3.9 billion last year, up 18 percent from 2007, says the report by the Western Economic Analysis Center in Marana.
As those copper dollars rippled through the state's economy, they created a combined direct and indirect economic impact of nearly $10.4 billion, the study says.
Meanwhile, Arizona copper-industry employment grew to an average of 11,200 over the course of 2008, the report showed.
Source: Arizona Daily Star
The state's copper producers had a direct economic impact of about $3.9 billion last year, up 18 percent from 2007, says the report by the Western Economic Analysis Center in Marana.
As those copper dollars rippled through the state's economy, they created a combined direct and indirect economic impact of nearly $10.4 billion, the study says.
Meanwhile, Arizona copper-industry employment grew to an average of 11,200 over the course of 2008, the report showed.
Source: Arizona Daily Star
Essar Steel Seeks Approval For Iron Ore Export
Ruias-led Essar Steel has sought Indian government approval for exporting iron ore produced as waste in the process to make steel and said it would earn up to $35 million if such shipments were allowed.
“Essar Steel ...has requested for export of iron and fines having an FE content of more than 64 per cent which are produced during the production process,'' a Commerce Ministry official told PTI.
The company makes steel through Direct Reduced Iron or Hot Briquetted Iron route which produces about 2.5 lakh tonnes of “broken pellet chips and fines'' having FE content of more than 66 per cent, Essar Steel has submitted to the ministry.
''...they cannot be used in the manufacturing process. They cannot be used by domestic users also,'' the steel maker, he said, has added.
“The total quantity of such waste/by-product would be approximately 2.5 lakh tonnes and has an FE content of more than 66 per cent.''
“Since Rule 18 3 (a) of the SEZ Rules stipulates that export of high grade iron ore, i.e. 64 per cent FE and above, except iron ore of Goa origin and Redi Origin would be subject to approval of the Board, they have sought permission of Board of Approval (BoA) for export of above mentioned byproduct /waste,'' he said.
Essar Steel's request has been placed for consideration of BoA, he added.
Source: PTI
“Essar Steel ...has requested for export of iron and fines having an FE content of more than 64 per cent which are produced during the production process,'' a Commerce Ministry official told PTI.
The company makes steel through Direct Reduced Iron or Hot Briquetted Iron route which produces about 2.5 lakh tonnes of “broken pellet chips and fines'' having FE content of more than 66 per cent, Essar Steel has submitted to the ministry.
''...they cannot be used in the manufacturing process. They cannot be used by domestic users also,'' the steel maker, he said, has added.
“The total quantity of such waste/by-product would be approximately 2.5 lakh tonnes and has an FE content of more than 66 per cent.''
“Since Rule 18 3 (a) of the SEZ Rules stipulates that export of high grade iron ore, i.e. 64 per cent FE and above, except iron ore of Goa origin and Redi Origin would be subject to approval of the Board, they have sought permission of Board of Approval (BoA) for export of above mentioned byproduct /waste,'' he said.
Essar Steel's request has been placed for consideration of BoA, he added.
Source: PTI
Great Lakes Iron Ore Shipments Down Half Over Last Year
Shipments of iron ore on the Great Lakes totalled 3,251,657 tons in August, a decrease of 52 per cent compared to a year ago. Although the steel industry was bringing some capacity back on line in August, stockpiles of ore were generally sufficient to meet immediate needs.
Said the Lake Carriers' Association: "Assuming water levels have peaked for the year, then so have iron ore cargos. One cargo topped 68,000 tons in August. The record – set in a period of high water in 1997 – is 72,300 tons. Vessels won’t be able to carry that much iron ore again until the US Army Corps of Engineers restores the Great Lakes Navigation System to project dimensions."
"Dredging ports and channels to project dimensions will cost more than US$200 million. Stimulus dollars will be of little help. The Corps only allocated 2 per cent of the US$4.6 billion Congress gave it in the American Recovery and Reinvestment Act to Great Lakes projects," said the Association.
"The dredging crisis on the Great Lakes will not end until the Harbor Maintenance Trust Fund spends rather than hoards the tax dollars industry pays in each year."
For the year, the Lakes iron ore trade stands at 16.1 million tons, a decrease of 59 per cent compared to a year ago. The decrease is slightly less – 56.4 per cent – when compared to the trade’s five-year average for the January-August timeframe.
Source: Dredging News Online
Said the Lake Carriers' Association: "Assuming water levels have peaked for the year, then so have iron ore cargos. One cargo topped 68,000 tons in August. The record – set in a period of high water in 1997 – is 72,300 tons. Vessels won’t be able to carry that much iron ore again until the US Army Corps of Engineers restores the Great Lakes Navigation System to project dimensions."
"Dredging ports and channels to project dimensions will cost more than US$200 million. Stimulus dollars will be of little help. The Corps only allocated 2 per cent of the US$4.6 billion Congress gave it in the American Recovery and Reinvestment Act to Great Lakes projects," said the Association.
"The dredging crisis on the Great Lakes will not end until the Harbor Maintenance Trust Fund spends rather than hoards the tax dollars industry pays in each year."
For the year, the Lakes iron ore trade stands at 16.1 million tons, a decrease of 59 per cent compared to a year ago. The decrease is slightly less – 56.4 per cent – when compared to the trade’s five-year average for the January-August timeframe.
Source: Dredging News Online
Indian Iron Ore Exports Probably Down 25Pct In September
India’s iron-ore exports probably fell 25 percent in the first two weeks of this month because of increasing railway freight rates and lower demand from China, the world’s biggest buyer, said Siddarth Rungta, president of the Federation of Indian Mineral Industries.
India is losing market share to BHP Billiton Ltd. and Rio Tinto Group, he said in an interview today.
Source: Bloomberg
India is losing market share to BHP Billiton Ltd. and Rio Tinto Group, he said in an interview today.
Source: Bloomberg
VBC Ferroalloy Board Approves OPCL Merger
VBC Ferro Alloys on Wednesday said its board has given 'in principle' approval for the merger of Orissa Power Consortium Ltd (OPCL) with itself.
The board approved merger of Orissa Power Consortium Ltd with the parent company, which is also promoter of VBC and Ferro Alloys, said in a filing to the BSE.
The proposal is subject to the approvals from concerned authorities, the filing added
Source: PTI
The board approved merger of Orissa Power Consortium Ltd with the parent company, which is also promoter of VBC and Ferro Alloys, said in a filing to the BSE.
The proposal is subject to the approvals from concerned authorities, the filing added
Source: PTI
Chinese Commodity Demand "Back On Track"
Commodity demand in China, the largest metals user, “is back on track in a very big way,” and copper and coking coal have the best prospects for price gains as the world economy accelerates, according to CLSA Research Ltd.
“Commodities that give investors the most upside potential when the rest of the world demand recovers” are those with supply constraints, Andrew Driscoll, head of resources research at CLSA, said in Shanghai. “In the next twelve months, having exposure to copper is going to be a good investment.”
China’s $586 billion stimulus plan and a record $1.1 trillion of lending in the first half of this year have countered a 10-month slump in the nation’s exports, helping Asia to lead a global rebound from the worst slump since the 1930s. Copper futures have more than doubled this year.
“We’ve gone through a period in the first half when China’s demand growth has recovered but the rest of the world demand has not,” Driscoll said late yesterday at a media briefing. “China’s commodity demand is back on track in a very big way, and we expect this to continue for the second half.”
U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday that the recession in the world’s largest economy has probably ended. Sales at U.S. retailers surged in August by the most in three years, signaling unexpected strength in consumer demand, according to data yesterday.
Jiangxi Copper Co., China Coal Energy Co., Fushan International Energy Group and Hidili Industry International Development Ltd. were among CLSA’s preferred equities, Driscoll said. “You’ll see strong momentum behind commodity markets and behind mining equities,” he said.
Jiangxi Copper, China’s biggest producer of the metal, has more than tripled in Hong Kong trade this year. The stock, which Driscoll has rated as an “outperform” since May, gained as much as 1.9 percent today to HK$18.52.
There aren’t many copper mines “that can be brought back into production and there isn’t a lot of existing coking coal supply that can be ramped up,” Driscoll said. “Because of current demand, those industries are already operating at very high utilization rates.”
Copper futures on the London Metal Exchange traded today at $6,299 a metric ton compared with $3,070 at the end of 2008, and the metal used for pipes is the top pick at Goldman Sachs Group Inc. Coking coal has risen 7.5 percent to 1,720 yuan ($252) a ton in Shanghai since March, according to Bloomberg data.
China will expand 8.5 percent in 2010, after growth of 7.5 percent this year, helping pull the world out of recession, according to forecasts from the International Monetary Fund. In August, China’s industrial production rose more than forecast, lending unexpectedly climbed and retail sales advanced.
The country’s economic upswing is “well advanced” and will help to drive demand for commodities including coal, BHP Billiton Ltd., the world’s largest mining company, said today in a presentation on its Web site.
The Asian nation’s refined-copper imports rose 168 percent to a record 2.1 million tons in the first seven months of the year, according to customs data. While shipments of the metal may drop in the second half compared with the first, they will remain at a healthy level, Driscoll said.
Source: Bloomberg
“Commodities that give investors the most upside potential when the rest of the world demand recovers” are those with supply constraints, Andrew Driscoll, head of resources research at CLSA, said in Shanghai. “In the next twelve months, having exposure to copper is going to be a good investment.”
China’s $586 billion stimulus plan and a record $1.1 trillion of lending in the first half of this year have countered a 10-month slump in the nation’s exports, helping Asia to lead a global rebound from the worst slump since the 1930s. Copper futures have more than doubled this year.
“We’ve gone through a period in the first half when China’s demand growth has recovered but the rest of the world demand has not,” Driscoll said late yesterday at a media briefing. “China’s commodity demand is back on track in a very big way, and we expect this to continue for the second half.”
U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday that the recession in the world’s largest economy has probably ended. Sales at U.S. retailers surged in August by the most in three years, signaling unexpected strength in consumer demand, according to data yesterday.
Jiangxi Copper Co., China Coal Energy Co., Fushan International Energy Group and Hidili Industry International Development Ltd. were among CLSA’s preferred equities, Driscoll said. “You’ll see strong momentum behind commodity markets and behind mining equities,” he said.
Jiangxi Copper, China’s biggest producer of the metal, has more than tripled in Hong Kong trade this year. The stock, which Driscoll has rated as an “outperform” since May, gained as much as 1.9 percent today to HK$18.52.
There aren’t many copper mines “that can be brought back into production and there isn’t a lot of existing coking coal supply that can be ramped up,” Driscoll said. “Because of current demand, those industries are already operating at very high utilization rates.”
Copper futures on the London Metal Exchange traded today at $6,299 a metric ton compared with $3,070 at the end of 2008, and the metal used for pipes is the top pick at Goldman Sachs Group Inc. Coking coal has risen 7.5 percent to 1,720 yuan ($252) a ton in Shanghai since March, according to Bloomberg data.
China will expand 8.5 percent in 2010, after growth of 7.5 percent this year, helping pull the world out of recession, according to forecasts from the International Monetary Fund. In August, China’s industrial production rose more than forecast, lending unexpectedly climbed and retail sales advanced.
The country’s economic upswing is “well advanced” and will help to drive demand for commodities including coal, BHP Billiton Ltd., the world’s largest mining company, said today in a presentation on its Web site.
The Asian nation’s refined-copper imports rose 168 percent to a record 2.1 million tons in the first seven months of the year, according to customs data. While shipments of the metal may drop in the second half compared with the first, they will remain at a healthy level, Driscoll said.
Source: Bloomberg
Tuesday, September 15, 2009
MPSL To Build Karnataka Iron Ore Plants
MSPL Ltd, the Bellary-based iron ore mining company, is planning to set up two iron ore beneficiation (extraction of iron ore from waste ore after washing) plants in the iron ore-rich Bellary district of Karnataka, India. Both the plants, which will have 1.2 million tonnes capacity each, will be set up with an estimated investment of Rs 650 crore.
Meda Venkataiah, executive director-mining, MSPL, said, “We have already taken approval from the state high level clearance committee for our new investment proposal and the water required for plants from Alamatti dam across Krishna river. We are in the process of acquiring land from Karnataka Industrial Area Development Board (KIADB) for the proposed plants.”
He said the company will be raising funds from the financial instititutions as well as from its own internal accruals to finance the proposed project. He said the company will be setting up two iron ore beneficiation plants at an area spread over 500 acres at Waddarahalli and 450 acres at Nandibanda villages near Hospet in Bellary district. MSPL proposes to use Banded Haematite Quartzite (BHQ), which is low grade iron ore with 35-37 per cent iron content, for extraction of iron ore fines. By removing silica from this ore, the company plans to separate iron ore fines and enrich it upto 64 per cent iron.
The company proposes to utilise the iron ore fines as the basic raw material for its upcoming pellet plant at Koppal. “We are currently extracting 5 million tonnes of iron ore and exporting it completely to our customers in China. Since we are setting up a pellet plant which will be operational by the end of 2010, we will fall short of iron ore for exports. With these beneficiation plans we plan to meet the shortage,” Venkataiah told Business Standard.
MSPL is currently storing BHQ ore at its existing mines in Vyasanakere of Bellary district, which will be used as raw material to extract iron ore fines, he said. The company is expected to open another mine at P K Halli in Bellary district which it acquired from Dalmia group. From this mine, which has an iron ore reserve of 50 million tonnes, MSPL plans to extract 2.5 million tonnes additional iron ore every year.
The company is also in the process of doubling its iron ore output to 10 million tonnes per annum by 2012. “We have taken on lease two more iron ore mines in Sandur area and currently waiting for the forest clearance. We expect to start mining in the next 3-4 months,” he added.
Source: Business Standard
Meda Venkataiah, executive director-mining, MSPL, said, “We have already taken approval from the state high level clearance committee for our new investment proposal and the water required for plants from Alamatti dam across Krishna river. We are in the process of acquiring land from Karnataka Industrial Area Development Board (KIADB) for the proposed plants.”
He said the company will be raising funds from the financial instititutions as well as from its own internal accruals to finance the proposed project. He said the company will be setting up two iron ore beneficiation plants at an area spread over 500 acres at Waddarahalli and 450 acres at Nandibanda villages near Hospet in Bellary district. MSPL proposes to use Banded Haematite Quartzite (BHQ), which is low grade iron ore with 35-37 per cent iron content, for extraction of iron ore fines. By removing silica from this ore, the company plans to separate iron ore fines and enrich it upto 64 per cent iron.
The company proposes to utilise the iron ore fines as the basic raw material for its upcoming pellet plant at Koppal. “We are currently extracting 5 million tonnes of iron ore and exporting it completely to our customers in China. Since we are setting up a pellet plant which will be operational by the end of 2010, we will fall short of iron ore for exports. With these beneficiation plans we plan to meet the shortage,” Venkataiah told Business Standard.
MSPL is currently storing BHQ ore at its existing mines in Vyasanakere of Bellary district, which will be used as raw material to extract iron ore fines, he said. The company is expected to open another mine at P K Halli in Bellary district which it acquired from Dalmia group. From this mine, which has an iron ore reserve of 50 million tonnes, MSPL plans to extract 2.5 million tonnes additional iron ore every year.
The company is also in the process of doubling its iron ore output to 10 million tonnes per annum by 2012. “We have taken on lease two more iron ore mines in Sandur area and currently waiting for the forest clearance. We expect to start mining in the next 3-4 months,” he added.
Source: Business Standard
Metmar Buys 40% Stake In Zimbabwe Alloys
JSE-listed commodities trading company Metmar has completed an agreement to acquire a 40% stake in Zimbabwe Alloys and its subsidiary Chrome Corporation (Chromecorp), in consortium with several partners.
Metmar owns a 20% stake in the consortium, which it said would not only make capital contributions, but also had the required knowledge to restart the mining and alloy production.
The purchase consideration amounted to $56,25-million and $4,1-million for Zimbabwe Alloys and Chromecorp respectively, and was payable in several tranches.
Most of the proceeds would be applied to restore the operation’s mining, processing and production capacity. The Metmar consortium would also apply its significant intellectual capital to unlock the value of this investment.
Accordingly, it would invest towards the design, construction and commissioning of new furnaces, the training of staff as well as the transfer of knowledge and know how regarding the direct current technology and/or the refurbishment of existing furnaces and mining and processing activities.
The purchased assets included, among others, a furnace complex in Gweru, washing and metal recovery plants and the mineral claims to the extensive high quality chrome deposits. The refinery consists of a smelter, metal recovery plant and crushing, screening and loading facilities. Over the years, the refinery produced about three-million tons of ferroalloy products.
“The opportunity to invest in Zimbabwe Alloys and Chromecorp attracted significant interest from a number of commodity players, both in South Africa and further afield, based on its long-term potential,” said Metmar CEO David Ellwood.
The acquisition met Metmar’s strategy of concluding equity stakes in production and mining assets to secure marketing rights as well as the potential to unlock long-term value for stakeholders. It fitted the group’s policy to diversify into a broader range of commodity sources, although the acquisition is still subject to the conclusion of a technical due diligence.
“Metmar is already successfully exposed to the Zimbabwean environment through metallurgical coke screening activities. With mounting evidence of the potential for economic renewal in the region, we started evaluating opportunities to strengthen our strategic presence there more than six month ago, underpinned by our cautious and conservative investment approach,” commented Ellwood.
“We are confident that the acquisition presents Metmar with access to high quality chrome ore, high-carbon ferrochrome and plasma chrome and our new Zimbabwean partnership with Benscore Investments, which owns the remaining 60% in Zimbabwe Alloys, holds significant potential.”
Source: Mining Weekly
Metmar owns a 20% stake in the consortium, which it said would not only make capital contributions, but also had the required knowledge to restart the mining and alloy production.
The purchase consideration amounted to $56,25-million and $4,1-million for Zimbabwe Alloys and Chromecorp respectively, and was payable in several tranches.
Most of the proceeds would be applied to restore the operation’s mining, processing and production capacity. The Metmar consortium would also apply its significant intellectual capital to unlock the value of this investment.
Accordingly, it would invest towards the design, construction and commissioning of new furnaces, the training of staff as well as the transfer of knowledge and know how regarding the direct current technology and/or the refurbishment of existing furnaces and mining and processing activities.
The purchased assets included, among others, a furnace complex in Gweru, washing and metal recovery plants and the mineral claims to the extensive high quality chrome deposits. The refinery consists of a smelter, metal recovery plant and crushing, screening and loading facilities. Over the years, the refinery produced about three-million tons of ferroalloy products.
“The opportunity to invest in Zimbabwe Alloys and Chromecorp attracted significant interest from a number of commodity players, both in South Africa and further afield, based on its long-term potential,” said Metmar CEO David Ellwood.
The acquisition met Metmar’s strategy of concluding equity stakes in production and mining assets to secure marketing rights as well as the potential to unlock long-term value for stakeholders. It fitted the group’s policy to diversify into a broader range of commodity sources, although the acquisition is still subject to the conclusion of a technical due diligence.
“Metmar is already successfully exposed to the Zimbabwean environment through metallurgical coke screening activities. With mounting evidence of the potential for economic renewal in the region, we started evaluating opportunities to strengthen our strategic presence there more than six month ago, underpinned by our cautious and conservative investment approach,” commented Ellwood.
“We are confident that the acquisition presents Metmar with access to high quality chrome ore, high-carbon ferrochrome and plasma chrome and our new Zimbabwean partnership with Benscore Investments, which owns the remaining 60% in Zimbabwe Alloys, holds significant potential.”
Source: Mining Weekly
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